In addition, sessions will be held on climate change, renewable energy, health care and other issues important to NFU members as they form their policy for the next year. The 2010 NFU convention is Sunday, Monday and Tuesday.

AUDIO: NFU President Roger Johnson (11 min., MP3)

One disappointing note, nonfat dry milk and skim milk powder exports dropped 41 percent from a year ago to 27.8 million pounds. On a daily average basis, that is the lowest amount in five-and-a-half years. For the month, the U.S. exported 19 percent of our total dairy production, less than half the average rate of the last five years.

Packaged meat sales for the quarter were $145.3 million compared to $115.9 million a year ago. That was more than enough to offset fresh pork sales which dropped from $13.5 million to $7.5 million.

Smithfield’s hog production unit was able to reduce losses in the third quarter from $253.6 million a year ago to $55.6 million this year. CEO Larry Pope says the ongoing restructuring of the pork business will be completed in April with the closing of the John Morrell plant in Sioux City. He also believes the reopening of the Russian market and hopefully China will help put the division back in the black.

Read the quarterly report here:

The final rule would revise Farm Credit bank and association director election and voting rules, the requirements associated with holding stockholder meetings, clarifying the duties of nominating committees, and making and accepting floor nominations. The rule also enhances annual meeting and election notices to stockholders.

The final rule will be effective 30 days after publication in the Federal Register.

Read more details from FCA;

According to the FDA, Best Food Flavors had learned that samples from the plant tested positive for salmonella on January 21st. The company tested for and found salmonella twice in January and once in February but never issued a recall or took steps to minimize the risk of contamination. They kept manufacturing and shipping HVP through February 15th.

FDA was notified by a Best Food customer of possible contamination and began investigation of the plant on February 12th. FDA does not have the authority to order a recall so they began negotiating with Best Food Flavors to initiate a voluntary recall of the products which the company did on February 26th.

So far, no illnesses have been linked to the HVP and FDA says the risk is low because most of the products it is used in are cooked at some stage at temperatures high enough to kill the salmonella. The main concern is with ready-to-eat snacks.

American Farm Bureau president Bob Stallman told the committee, “We have seen the promise this market holds…unfortunately, because of restrictions on U.S exports to Cuba, U.S. farmers have not been able to benefit from the full potential of the market.” Stallman says our competitors have an advantage right now but eliminating the restrictions would give U.S. farmers the advantage.

National Farmers Union president Roger Johnson, who has led eight trade missions to Cuba, noted current U.S. policy hampers our ability to be reliable suppliers. “Agricultural producers in the United States are well positioned to benefit from additional trade in Cuba,” said Johnson. “This will also assure Cubans a source for sustainable, high-quality food for its people.”

American Soybean Association Board member Scott Fritz of Indiana told the committee the sanctions have cost U.S. farmers and businesses billions of dollars in exports. “We can no longer sit on the sidelines and watch our competitors supply a market where we have a natural advantage.”

National Association of Wheat Growers president, Jerry McReynolds testified, “U.S. wheat producers and the industries that support them stand to gain up to $100 million in sales each year if trade and travel restrictions with Cuba are eased.”

John Wilson, senior vice president of marketing and industry affairs for Dairy Farmers of America (DFA) said lifting the restrictions would help the U.S. dairy industry regain some of the ground lost in 2009. He cited a June, 2009 International Trade Commission study which found “that fully eliminating financing and travel restrictions on U.S. exports to Cuba would have boosted 2008 dairy sales to Cuba from $13 million to between $39 and $87 million.”

Most commented that increased travel to Cuba would mean increased income for the country and more money to spend on U.S. goods.

Corn was very narrowly mixed on consolidation and late short covering. Contracts were lower early, continuing to absorb Wednesday’s USDA supply, demand and production numbers along with smaller than expected weekly export sales. Late support came from that short covering and continued concerns over wet weather delaying planting in some areas of the Cornbelt. Also, May managed to hold on above February’s low and additional support came from traders correcting corn and soybean spreads, buying corn and selling beans. In any event, fundamentals remain negative. Ethanol futures were lower. The Buenos Aires Grain Exchange left its Argentine corn production estimate unchanged at 20.2 million tons with 11.5% of the crop harvested.

The wheat complex was lower on technical and fund selling, along with spillover from beans. Fundamentals are extremely negative with a large world supply and poor demand for U.S. wheat, pushing wheat to new five month and contract lows. However, the dollar was down and contracts are technically oversold, which kept wheat from dropping too hard too fast. European wheat was modestly lower on follow through selling and the negative fundamentals; May Paris was down .8% and May London was 1% lower. The United Kingdom’s Department of Environment, Food and Rural Affairs expects U.K. planted wheat area to be up 11.4% from 2009 and Kazakhstan’s Ag Ministry is projecting a 3% increase in planted area for grains. Japan bought 85,000 tons of U.S. wheat, 42,000 tons from Australia and 25,000 tons from Canada, and Tunisia picked up 25,000 tons of soft milling wheat and 25,000 tons of durum from an unnamed seller.

“So if we get recovery in the overall economy that should let people have a little more money to spend on things like meat and dairy products and that might help us to see at least a mild recovery in the overall farm economy after a very bad 2009,” says Pat Westhoff, co-director of FAPRI, the Food and Agricultural Policy Research Institute at the University of Missouri. He net farm income is expected to increase somewhat over the next two years mostly due to stronger livestock prices, assuming demand increases. The FAPRI report also projects more corn acres this spring and an increase in corn demand for ethanol production. Slightly lower prices for soybeans and fewer wheat acres are expected this year.

Westhoff says crop insurance will be a more important part of government expenditures on agriculture, “By the end of our 10-year baseline outlook, we’re spending almost as much on the crop insurance program as we are on the basic farm programs funded by the Commodity Credit Corporation.”

Over the next 10 years, the FAPRI report says, direct payments make up the bulk of government payments.

AUDIO: Pat Westhoff, co-director, FAPRI, University of Missouri (5 min., MP3)

National Biodiesel Board Federal Affairs Vice President Manning Feraci says the lapse in the tax credit at the end of 2009 has been disruptive to the biodiesel industry.

The incentive is designed to make biodiesel price competitive with conventional diesel fuel. Since its lapse, the US biodiesel industry has seen a dramatic drop in demand and production.

The House and Senate now have to reconcile differences between the two versions. Both provide for a one year retroactive extension of the biodiesel tax incentive.

Senate Ag Committee and Ranking Finance Committee chair Charles Grassley of Iowa voted against final passage of the Senate Tax Extenders Act on Wednesday. In a statement following the passage of the bill, which restores the biodiesel tax incentive, Grassley said he opposes the contingency to include more deficit spending to fund it. Grassley faults congressional leaders for what he calls “irresponsible and even offensive” actions. The bill, which also extends unemployment benefits, passed 62 to 36.

The American Soybean Association applauds the passage of the legislation and is urging quick reconciliation and retroactive restoration of the dollar per gallon tax credit on biodiesel which Congress allowed to lapse on December 31st.

The bill also includes Senate Ag Chairman Blanche Lincoln’s 1.5 Billion dollar disaster aid for Arkansas farmers affected by weather related disasters. Counties that received a primary disaster declaration in 2009 are eligible.  Producers in Lincoln’s home state of Arkansas, as well as Mississippi, were especially hard hit.

Brownfield’s Tom Steever contributed to this report