WEEKLY NEWS HIGHLIGHTS

COMPILED BY THE RED RIVER FARM NETWORK

Commodity Classic Adds Wheat — This past week, the American Soybean Association and National Corn Growers Association celebrated its 10th anniversary for Commodity Classic. Starting next year, the National Association of Wheat Growers will join the soybean and corn groups at Commodity Classic.

Administration Won’t Oppose WRDA — In an apparent change in policy, Agriculture Secretary Mike Johanns reports the Administration will not oppose congressional attempts to modernize the locks and dams on the Mississippi and Illinois Rivers. "If you have any doubt about the importance of the Mississippi system and its tributaries you need only look at what happened when there was a rather short disruption during Hurricane Katrina; it just rippled all across the United States into the middle part of the country," said Johanns, "We’ll work with Congress and we’re not opposing that legislation." The House passed the Water Resources Development Act and the bill awaits passage in the U.S. Senate. The National Corn Growers Association and American Soybean Association called the WRDA bill a priority.

Keep Options Open — National Corn Growers Association delegates decided to keep their farm bill options open. There was strong support for the current farm program, but the NCGA wants to be prepared for change. A committee will evaluate future options. NCGA President Gerald Tumbleson says the next farm program could provide incentives for investment in ethanol and biodiesel plants, rather than direct or countercyclical payments. "If you did that and made some money, you have an incentive to keep investing it; that investment keeps the money rolling in the United States," said Tumbleson, "That’s the big picture that people aren’t looking far enough ahead on."

’07 Farm Bill Will Look Different Than ’02 — Virginia Tech Professor Emeritus David Kohl says agriculture has lost strong political leaders, including Daschle, Stenholm and Combest, which will impact the farm bill debate. Funding for agriculture will also be scarce. "We have Iraq and Afghanistan drawing on the dollars and Medicare is eating up the dollars, as well." Speaking at a farm business management program in Thief River Falls, Kohl said farmers and ranchers are living in a time of extremes. Price volatility has become standard.

Ag Already Gave At the Office — Senate Agriculture Committee Chairman Saxby Chamblis has asked budget leaders to ignore President George W. Bush’s proposed cuts in ag spending. Chamblis is urging the budget committee members to wait until the overhaul in farm policy is complete. The White House is calling for a long term revision of farm programs to save $10 billion dollars in ten years. After the budget cuts seen last year, Chamblis said it is impossible to achieve budget savings in mandatory agriculture programs in the new budget year.

Payment Cap Sought — South Dakota Senator Tim Johnson is concerned about possible cuts in the Agriculture Department’s budget. Johnson thinks the only way to save money is by reducing the farm payment limit. "The only area that I see where we could go to save some money from the existing farm bill would be to impose more aggressive caps on the overall level of dollars that can go to a handful of huge agribusiness outfits."

Dear Mike and Rob — A coalition of 16 U.S. commodity groups has sent a letter to Agriculture Secretary Mike Johanns and U.S. Trade Representatives Rob Portman, saying the World Trade Organization must provide meaningful market access. The letter was signed by the American Soybean Association, National Corn Growers Association, National Association of Wheat Growers, American Sugar Alliance, National Cattleman’s Beef Association, National Milk Producers Federation and others.

It is all about Market Access — Agriculture Secretary Mike Johanns travels to London this week for trade negotiations. The United States, European Union, Brazil, India, Japan, and Australia will meet to kick start the WTO trade talks. While at Commodity Classic, Johanns said market access is his focus. "Market access is the key and 2006 is the year and if something isn’t falling together here by the end of April, you start running out of time." Johanns says the global trade talks "have a ways to go in the market access area."

Acreage Mix — With higher input costs, many analysts predict lower corn acreage in 2006. Yet, with growing interest in ethanol, the demand for corn will influence the crop mix. At Commodity Classic, Doug Robinson of the Golden Harvest seed company offers his prediction. "When corn acres start going down, people start bidding on corn and when bean acres go down, people start bidding on beans; right now, we are seeing the bean acres up a little bit, but who knows who will win the race when we get to planting." Dave Rhylander is with Monsanto and he expects to see a few more soybeans planted his year. "If you are looking in the South, you’re seeing a shift out of corn into soybeans; In the High Plains area, where the farmers are doing a lot with the cost of irrigation and fertilizer, you are seeing a move away from corn acres," said Rhylander, "But when you go in those areas where there are ethanol plants, we hear there is going to be an increase in corn acres." Bob Daws of Degelman Industries says many of the spring planting decisions have not yet been made. "A lot of producers don’t know what they are going to be putting in yet."

Corn Exports — For the first time since 1999, U.S. corn export sales have surpassed one million metric tons for five straight weeks. With corn prices competitive in the world market and strong sales to Korea and South America, the U.S. Grains Council predicts the sales pace will continue.

No Action Yet — A Southern Korean delegation was scheduled to be in the United States this week to review beef safety standards, but that trip as been delayed until next week. Meanwhile, Japan’s agriculture minister says it is still unclear if the United States has done enough to stop bone-in product from entering the Japanese market. USDA submitted a report to Japan in mid-February outlining January’s violation and protocols to prevent a recurrence. The Japanese government is sending follow-up questions to the U.S. government. Agriculture Secretary Milk Johanns plans to meet with his Japanese counterpart during world trade talks in London this week.

Canadian Beef Production to Increase 5% This Year — CanFax senior market analyst Anne Dunford told a Grain World audience that Canada could be looking at record beef production over the next four to five years. As for price outlook, she thinks the tops are in in the heavyweight feeder steer market. "The light cattle market is in its own little world and I think it will stay there." Last year, Canada had the biggest calf crop in its history. The beef cow inventory is also record large..

USAIO Traceback — The newly formed U.S. Animal Identification Organization says it is ready to track livestock across the country. Chairman Chuck Miller says the traceback can be done for 30 cents per head, or less. The goal of USAIO is to find the home farm and herd-mates of suspected animals within 48 hours of a disease outbreak.

Beef Survey — As part of the legal settlement over the beef checkoff, at least 8,000 producers will have an opportunity to share their thoughts about the checkoff. The survey will be checkoff funded and will ask questions developed with input the Livestock Marketing Association, the Beef Board, Federation of State Beef Councils and USDA. LMA Spokesman John McBride is pleased the attitude survey is happening, but his organization still wants a producer-vote on the future of the beef checkoff program.

Fertilizer Outlook — The fertilizer outlook is tied directly to the outlook for energy prices. Jeff Holzman, a business research analyst for Agrium, gave the fertilizer outlook at Grain World in Winnipeg. "We believe volatile energy prices will continue to impact the nitrogen market," said Holzman, "As long as we have $60 a barrel oil, it will continue to have an impact on nitrogen markets."

Food Trends — The NPD Group has been tracking U.S. eating patterns for over 25 years. Vice President Harry Balzer says restaurants have become an appliance for today’s consumer. "What we’re using those restaurants for is take-out meals; it has the potential of preparing a meal without you being involved, all you have to do is eat it." Balzer says the take-out segment has been the growth area for the entire restaurant industry from fast food to upscale operations.

Other White Meat — The National Pork Board has purchased the ‘Other White Meat’ trademark from the National Pork Producers Council. The NPPC created the ‘Other White Meat’ identity in 1985, before the pork checkoff was established.

Monsanto Acquires Two Seed Companies — Monsanto’s American Seeds subsidiary has announced two strategic additions to its family of region brands. ASI acquired Gold Country Seed, Inc., based in Hutchinson, Minnesota, and Heritage Seeds, of Rensselaer, Indiana. The combined acquisition price totaled $8.7 million.

Kaystar Renamed — Kaystar Seed has been renamed Pannar Seed Incorporated. This spring the Huron, South Dakota company will launch new corporate branding, a new seed line-up and product line-up for the Midwest. The Pannar Group acquired Kaystar five years ago.

Pioneer Optimum GAT — DuPont unveiled its new glyphosate/ALS-tolerant trait from Pioneer at Commodity Classic Thursday. The brand name is Optimum GAT is targeted for commercialization, as early as 2009 in corn and soybeans. DuPont Crop Protection President Jim Collins says Optimum GAT is more than glyphosate tolerant. "In addition to unsurpassed glyphosate tolerance, this new trait from DuPont also has tolerances to herbicides that are designed to really compliment glyphosate; most of you know those as ALS chemistry or the sulfoneourea chemistry that DuPont pioneered a number of years ago." The release is part of Pioneer’s broader plan to quit paying licensing fees to Monsanto for its genetically engineered traits.

Pioneer Research — Pioneer Hi-Bred International’s decision to open a new research center in Brookings, South Dakota should help expand the development of new corn inbreds and commercial hybrids for farmers. Research scientist Jan Jackson says this research should improve Pioneer’s product lineup. "Some of the areas that we will see at the Brookings center will contributeo very heavily to things like drought tolerance and stress tolerance." Pioneer hopes to have a temporary research facility open in early April and a permanent facility open by this fall or next spring.

PAL Class Completes Year — The 2006 Partners in Agricultural Leadership class have completed its year of study. The American Farm Bureau Federation includes graduates Troy Hadrick of South Dakota, Bryan Lawrence of Minnesota and Nathan Russell of Minnesota.

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