Some questions being raised about federal egg inspectors at the facilities. Earlier this week, officials from the Food and Drug Administration reported a number of violations at the two farms including rodents, maggots and wild birds in the barns. USA Today reports USDA Egg Graders were at both farms 40 hours a week even before the outbreak and questions why they didn’t see the problems. The rules state the buildings and outside premises must be free of conditions that harbor vermin but apparently there is some discrepancy as to the definition of buildings and outside premises. The article quotes USDA assistant branch chief in the egg grading program as saying “Under the USDA’s unwritten interpretation of the regulations, egg graders only look for vermin inside the specific processing building where they are based. The agency interprets outside premises as only the area immediately around the processing building’s loading dock and trash receptacle.”

The barns at Hillandale Farm are about 50 feet from the processing facility while at Wright County Egg the barns are about 50 feet apart but are connected to the processing plant. USDA spokesman Caleb Weaver said egg graders have no authority to look at the laying barns, even though they are connected to the processing facilities.

Vilsack says he was interviewed for the Bloomberg article, but he tells Brownfield at no time did he call for five billion dollar cuts to farm programs.

“If you look at the transcript that we provided, there’s no mention of that at all—none at all,” says Vilsack. ‘It’s an unfortunate circumstance where I think a reporter had basically an idea and a story that he wanted to write, and what I told him wasn’t necessarily consistent with that—but he just decided to write it anyway—which is unfortunate because it gets a lot of misinformation out there.”

The accuracy of the article aside, Vilsack’s USDA has been criticized by some for putting too much emphasis on rural development programs, and organic and so-called “local food” initiatives, and not enough on traditional farming.  Vilsack defends his efforts to spur economic development in rural America, but says he continues to be a fierce advocate for strong farm safety net programs as well.

“We understand that there are certain risks inherent in agriculture that are probably different than virtually any other business, industry or occupation in the country,” he says, “and that we need a strong safety net in order to protect not just our farmers and ranchers, but also the consumers who, in this country, benefit from a relatively affordable food supply which is safe and abundant.”

At the same time, Vilsack says deficit reduction is a big challenge. He proudly points out that USDA has already saved four billion dollars that was put towards deficit reduction by renegotiating the agency’s agreement with crop insurance companies.

 AUDIO: Tom Vilsack (4 min MP3)

Link to Bloomberg Businessweek article

Link to Vilsack’s statement on the Bloomberg article

Attorney General Chris Koster says the settlement provides a firm schedule under which modern technology will be installed in hog barns operated by the company, and Koster says the agreement also includes $1 million in voluntary payments by the company. PSF will pay $100,000 each to the local county school funds for the counties of Gentry, Daviess, Mercer, Sullivan and Putnam. PSF will pay a total of $500,000 to the county road funds for the following amounts: Daviess ($90,000), Gentry ($90,000), Grundy ($50,000), Mercer ($90,000), Putnam ($90,000) and Sullivan ($90,000).

Considering the penalties, the Missouri AG is confident PSF will meet the deadlines set in the settlement, $2,000 per day, per barn, for the first 30-days of noncompliance, the penalty goes to $4,000 for the next 30 days of noncompliance and then $6,000 per day for 60 days and beyond of noncompliance.

“Now, no company is going to eat those kinds of penalties when the other option is simply to apply the modern technologies to the barn as required,” said Koster.

Premium Standards Farm President Bill Homan calls the time-line aggressive, but says the company will install the $7.5 million in equipment on time. And Homan says the settlement should finally resolve the dispute which he says put 1,100 jobs in jeopardy.

“I think it is just a great bit of news for our employees and for the economy here in north Missouri,” Homan said.

In addition to the 55 primary counties in Illinois, the list also includes contiguous counties in ILLINOIS, INDIANA, IOWA, MISSOURI and WISCONSIN.

Primary counties in Illinois:

Adams, Cumberland, Iroquois, Madison, Sangamon, Bond, Edwards, Jasper, Marion, Schuyler, Brown, Effingham, Jefferson, Mason, Scott, Calhoun, Fayette, Jersey, McDonough, Stark, Carroll Fulton, Jo Daviess, Menard, Stephenson, Cass, Greene, Kankakee, Mercer, Vermilion, Christian, Grundy, Knox, Montgomery, Warren, Clark, Hamilton, Livingston, Morgan, Wayne, Clinton, Hancock, Logan, Pike, White, Cook, Henderson, Macon, Randolph, Will, Crawford, Henry, Macoupin, Rock Island, Winnebago

Illinois contiguous counties: Boone, Du Page, La Salle, Moultrie, Shelby, Bureau, Edgar, Lake, Ogle, St. Clair, Champaign, Ford, Lawrence, Peoria, Tazewell, Clay, Franklin, Marshall, Perry, Wabash, Coles, Gallatin, McHenry, Piatt, Washington, De Kalb, Jackson, McLean, Richland, Whiteside, De Witt, Kane, Monroe, Saline, Woodford, Douglas, Kendall

Indiana: Benton, Knox, Newton, Sullivan, Vigo, Gibson, Lake, Posey, Vermillion, Warren

Iowa: Clinton Dubuque Lee Muscatine Des Moines Jackson Louisa Scott

Missouri: Clark, Lincoln, Perry, Ralls, St. Louis, Lewis, Marion, Pike, St. Charles, Ste. Genevieve

Independent City: St. Louis

Wisconsin: Grant, Green, Lafayette, Rock

Back in 2008, JBS altered scheduled breaks at the Nebraska facility to allow Muslims at the plant to pray at sundown during the month of Ramadan. Non-Muslims at the plant protested the change so the company ended up putting the break time back to where it was. 86 Muslim workers walked off the job and were fired.

The lawsuit seeks a safe work environment and prayer time for Muslim employees at sundown along with back pay for those who were fired.

Read the EEOC statement here:

In the Crop Index, the August all-wheat price was $5.56 per bushel, up $1.06 from July. Corn averaged $3.65 per bushel, up 16 cents while soybeans increased 31 cents to average $10.10 per bushel and sorghum grain also gained 31 cents to average $6.28 per cwt. The all-hay price was down $1.00 at $111 per ton.

In the Livestock Index, the average hog price in August was $61.30 per cwt up $2.80 from July while beef cattle were $1.60 higher at $93.20 per cwt. Broilers were 3 cents lower at 48 cents per pound while the August turkey price was up 1.6 cents to average 66.3 cents per pound. Eggs were 9.6 cents higher than July at 62.4 cents per dozen.

Dairy prices were up 3.3 percent from July and 37 percent higher than August of last year. The August all milk price is $16.60, up 60 cents from last month and $4.50 more than a year ago. The fluid price is 60 cents higher than July at $16.60 while the manufacturing grade price is $1.00 higher at $15.10. Dairy profitability improved for the fourth month in a row, the cost of feed to produce 100 pounds of milk comes in at $7.03 putting income over feed cost at $9.57…47 cents better than in July.

The Index of Prices Paid by Farmers increased 0.5 percent from July; lower prices for feeder pigs, feeder cattle, nitrogen, hay and forages were offset by higher prices for feed grains, concentrates, diesel and LP gas.  Prices paid by farmers are 2.8 percent more than August, 2009.

Read the full NASS report here:

USDA projects net farm income, which declined more than 20 percent in 2009, will be up 29 percent in 2010.  And the agency has raised its forecast for ag exports to 107-point-five billion dollars, an 11 billion dollar increase over last year.

In an interview with Brownfield, Agriculture Secretary Tom Vilsack suggests the rest of the economy could take a lesson from the ag sector.

”I think this is an indication of the way you recover,” Vilsack says. “You keep an eye on debt and make sure that it’s manageable.  You invest in productivity and innovation, the way American agriculture has—and you promote, like the dickens, new opportunities both here and abroad—and that’s what American agriculture does and is doing it very well.”

Vilsack says several factors have contributed to the recovery, including the 2008 Farm Bill, the efforts of the Obama administration—such as the Recovery Act—and, in his words, “the hard work and resilience of America’s farmers and ranchers.” 

AUDIO: Tom Vilsack (3 min MP3)

Link to USDA news release

FDA says several buildings had openings allowing flies, rodents, wild animals and other birds to enter the facilities.  At one farm, hens outside their cages were tracking manure throughout their facilities.  Investigators also found that employees going from house to house did not change protective clothing and that equipment moved from site to site was not being sanitized.

Feedstuffs.com quotes FDA deputy commissioner Mike Taylor as saying there is no reason to believe that the conditions at the two farms are indicative of industry-wide practices.  The two farms are owned by the same individual.

Taylor also called for passage of food safety legislation in Congress that would give FDA more access to records and mandatory recall authority.

At the recent ag competition workshop in Colorado, Vilsack cited statistics showing that the spot market for hogs has declined from 62 percent in 1994 to less than four percent today.  And he says trends indicate the cash cattle market is headed that way as well.

 “In 1999, the spot market for cattle was 68 percent.  Today it’s closer to 52 percent nationally and we know, in some parts of the country, it’s less than 30 percent,” Vilsack says. “This thinning spot market is a concern because it sets the base prices in marketing contracts.” 

But James Herring of Friona Industries in Texas, one of the nation’s largest cattle feeding operations, says the cash markets are a very poor method of determining value in cattle—and that’s why they are on the decline.

 “Cattlemen are just getting smarter about determining value for the product,” says Herring, “and believe me, since all our formulas are based on the cash, if the industry ever sees the cash market becoming a poor mechanism for value transmissions, the industry participants will solve the problem—not the government.” 

The president of the Iowa Farmers Union, pork producer Chris Petersen of Clear Lake, Iowa, believes the contraction of the cash market has opened the door to market manipulation by the packers. 

“A hundred-thousand hog a day on the spot market—half of those spot transactions are packer-to-packer.  Isn’t that amazing?” says Petersen. “I’ve really been convinced for a long time that something’s going on here.” 

Analysts say as the use of formula pricing and grid pricing contracts has increased, cash hog markets have declined in importance.  However, they remain an important formula in determining the base price for those contracts.

Prior to joining DATCP, Romanski served as the Executive Assistant for the Wisconsin Department of Natural Resources, deputy chief of staff for Governor Jim Doyle; executive assistant for the Department of Transportation; and spokesperson and policy analyst for the Wisconsin Department of Justice. He also has strong experience in the state legislature, having held staff positions in both the Senate and the Assembly, working directly on agricultural, rural affairs and natural resources issues.