Corn Commentary

Ups and Downs, Highs and Lows

Corn growers have seen some pretty good prices over the past several years, but the downward trend this past year for a record crop is expected to be the norm for the next several, according to Patrick Westhoff, director of the Food and Agricultural Policy Research Institute (FAPRI).

afbf15-westhoffSpeaking at the American Farm Bureau meeting last week, Westhoff said that due to corn prices dropping to levels not seen in years, farmers will plant less corn in the next two years. More than 90 million acres were planted in 2014 and he expects less that 88 million acres will be planted this year. While Westhoff expects average corn prices to remain low by 2007-2012 standards, “but still well above the level we saw before 2007.”

The demand picture for corn is high on the livestock side, but low on the ethanol side. “We have global demand growth in the animal sectors, here and around the world,” said Westhoff. “But perhaps weaker growth, if any at all, in biofuels – depending on policy, oil prices and a lot of other things we can’t possibly know.”

On the export side, Westhoff says there is a lot more competition. “The high prices of the last several years kicked off lots of supply from Ukraine to Argentina and that’s not all going to go away over night,” he said. And while China is a huge source of demand growth, Westhoff says “the good news is it’s growth, but the bad news is it’s not as fast as it has been. They’re looking at 6.5 percent growth next year.”

Westhoff concludes that the ups and the downs are always dependent on factors beyond our control. “As always, weather, oil prices and other factors will drive annual swings in prices.”

Listen to Dr. Westhoff’s comments here: Presentation on crop outlook by Dr. Pat Westhoff, FAPRI

Ag Secretary Stresses Biofuels Support at AFBF

afbf15-vilsack-stallmanFarmers from around the country had a chance to ask Agriculture Secretary Tom Vilsack questions during an informal town hall-style meeting at the American Farm Bureau convention this week in San Diego.

The last question he took was from a South Dakota farmer who asked about continuation of strong biofuels policy in the United States. Vilsack detailed his continued support for the industry, particularly in the area of exports. “I am a firm believer in the future of the biofuels industry,” he said. “Ethanol production is at record levels…we’re now beginning to see great interest in the export market, not just for ethanol but also for dried distillers grains.”

Vilsack also noted the need to update the research on ethanol when it comes to indirect land use. “A lot of the push back to the industry is based on studies that took place 15 years ago, 10 years ago, and there have been enormous increases in productivity of American farmers, that basically suggest the indirect land use calculations are not as accurate as they need to be,” he said.

Listen to the secretary’s comments on biofuels here: Secretary Vilsack at AFBF on biofuels


2015 AFBF Convention photo album

Ag Unites for Trade with Cuba

usaccAgricultural companies and organizations united this week to launch the U.S. Agriculture Coalition for Cuba (USACC) to work toward liberalized trade and re-establishing Cuba as a market for U.S. food and agriculture exports.

Agriculture secretary Tom Vilsack says the conversation to normalize relations with Cuba is long overdue and important for US agriculture. “Cuba imports about 80 percent of its food,” said Vilsack. “It’s a $1.7 billion market. Our rice growers, our wheat growers, our corn growers, our soy producers, our poultry and pork and beef producers, all have opportunities in this new day.” Secretary Vilsack at US Ag Coalition for Cuba kickoff

One of several lawmakers who attended the Ag coalition kick off was Congressman Rodney Davis of Illinois who says re-establishing normal relations with Cuba will help the Cuban people. “I believe that opening more trade with agricultural products…increasing the trade that we already have in the Cuban nation, is going to allow America to invest in a Cuban economy that’s going to free the Cuban citizens from the conditions they live under now,” said Davis. Cong. Rodney Davis of Illinois at USACC launch

Rep. Kevin Cramer (R-ND) says he is excited about the opportunities of increasing trade relations with Cuba. “The real excitement to me is the opportunity to … spread Democracy, the opportunity to do what farmers do naturally and that is feed hungry people,” he said. “Trade ought to be a part of diplomacy.” Cong. Kevin Cramer of North Dakota at USACC launch

The National Corn Growers Association (NCGA) is one of the many agricultural organizations that have joined the coalition.

“Cuba is not a level playing field for American farmers. It’s time we have a chance to better compete for Cuba’s business. NCGA has long supported normalized trade relations with Cuba, as part of our efforts to expand markets for U.S. corn and feed the world,” said NCGA President Chip Bowling.

The USACC believes that normalizing trade relations between the U.S. and Cuba will provide the U.S. farm and business community with new market access opportunities, drive enhanced growth in both countries and allow U.S. farmers, ranchers and food companies to efficiently address Cuban citizen’s food security needs. Under current sanctions, U.S. food and agriculture companies can legally export to Cuba, but financing and trade restrictions limit their ability to serve the market competitively. The USACC ultimately seeks to end the embargo and allow for open trade and investment.

Welcoming the New Congress

ncga-rodneyThe National Corn Growers Association spent Tuesday on Capitol Hill this week, welcoming the 114th Congress to Washington and talking up the importance of agriculture to the American economy.

“We are here to welcome the new Congress, and to encourage them to work together with one another and the Obama Administration to advance policies that help agriculture and family farmers,” said NCGA President Chip Bowling, pictured here with Rep. Rodney Davis (R-IL). “I was encouraged not only by the warm reception we received, but also a hope that lawmakers will set aside past divisions, find common ground, and get things done.”

After overcoming the challenge to his bid for re-election as Speaker of the House, Rep. John Boehner of Ohio used a very agricultural metaphor to urge Democrats and Republicans to work together. “Every day you and I come here, try to cultivate good seeds, and take care of the pests. And then with patience, sacrifice, and God’s grace, there will be a harvest,” said Boehner. “Let’s make this a time of harvest.” Speaker John Boehner harvest quote

NCGA executive vice president Jon Doggett notes that you have to plant a crop and nurture it before you harvest it. “I think there will be a lot of actions taken in the first few months of this Congress that will set the tone as to whether or not we’re really going to be able to harvest anything at the end of this Congress,” said Doggett.

With the latest farm bill being implemented, Doggett says corn growers are mostly concerned with protecting what they have during the budget reconciliation process. “We may see some attacks on Title 1 of the farm bill (and) on the crop insurance program,” he said. “Both have piles of money that folks will want to rob.”

Doggett talks about opening day for the 114th Congress and priorities for corn growers in this interview: Interview with NCGA Executive VP Jon Doggett

Happy Anniversary to the RFS

rfs-7Friday marks the seventh anniversary of the signing into law of the Energy Independence and Security Act of 2007 (EISA) which expanded the Renewable Fuel Standard (RFS) as we know it today.

The Renewable Fuels Association (RFA) has compiled a report that examines the successful impact of the RFS over the past seven years on the economy, job creation, agriculture, the environment, fuel prices, petroleum import dependence, and food prices.

Among its findings, the report notes that “Renewable fuel production and consumption have grown dramatically. Dependence on petroleum—particularly imports—is down significantly. Greenhouse gas emissions from the transportation sector have fallen. The value of agricultural products is up appreciably. And communities across the country have benefited from the job creation, increased tax revenue, and heightened household income that stem from the construction and operation of a biorefinery.”

Renewable Fuels Association (RFA) president and CEO Bob Dinneen remembers that day seven years ago and talks about its accomplishments so far and how EPA needs to move ahead with the law as written. Ethanol Report on RFS Anniversary

Partisan Report on RFS

bpcThe Bipartisan Policy Center (BPC) appears to be a bit partisan in a new report released this week on “Options for Reforming the Renewable Fuel Standard.”

The report was produced after several meetings during the year with an advisory group that consisted of 23 members, seven of which were oil companies representatives. Only five members of the group represented agriculture (2) or biofuels (3). The rest were a mix of academia (2), big business (4) with two of those representing Toyota, environmental groups (2), and policy organizations (3).

Both of the agriculture representatives were from the National Farmers Union (NFU), president Roger Johnson and vice president of programs Chandler Goule. “It was very important that agriculture that supports the renewable fuels industry be present at the table,” said Goule, who notes that while the meetings were held in a very professional manner, “they were heavily skewed toward big oil.”

Goule says NFU has major objections to two of the policy recommendations made in the report. “The flattening of the total renewable fuel mandate at its current level going forward, but continuing to increase the three advanced categories, we have significant concerns about what that would to do ethanol and biodiesel,” he said. “Even more concerning was removing the total renewable fuel mandate and only mandating the three advanced categories. Basically what they are doing is giving in to Big Oil’s conclusion that a blend wall exists, which it does not.”

Chandler talks more about the BPC report in this interview: Interview with Chandler Goule, NFU

One Economist’s Outlook for Corn

asta-css-14-basseAgResource Company president Dan Basse giving his economic outlook for the year at the ASTA CSS 2014 and Seed Expo last week.

Basse says the protein side of the plate is doing very well right now, dairy and beef in particular, “so we call it the Year of the Cow” and while grain farmers will likely struggle for the next few years, “they’ve had a very good 5-7 years behind them.”

Basse notes that this crop year is historic in that it’s the first time we’ve seen record world production for corn, wheat and soybeans and global stocks are also record high. “It should give us pause as agricultural producers that unless we start making some cuts or unless something happens in the world climatically speaking, we’re going to keep piling on those big stocks and it’s going to create issues going forward,” he said.

With the biofuels market reaching maturity, Basse says that means more stagnant demand for corn use to make ethanol. “We have an EPA that can’t even make a decision on what the mandate should have been for 2014 and surely can’t make one for 2015,” he said. “We’ll still see corn demand for ethanol somewhere in the vicinity of five billion bushels, but there’s not that growth engine we’ve had in the last five years.”

Basse expects U.S. corn demand to remain about 13.5 billion bushels for the foreseeable future as export demand is also slowing with China producing more corn than it needs with strong incentives for farmers. “China has produced eight consecutive record corn crops … it’s swimming in corn,” he said. “So the Chinese are doing what they can to keep world corn out of the market and that’s what this GMO issue with MIR 162 is all about and it’s not likely to change anytime soon.”

So, as far as demand for corn, Basse says, “We’re really looking at the livestock sector and maybe we’ll build herds or get meat exports going.”

Lots more in this interview with Basse here – a condensed version of his one hour breakfast presentation at CSS. Interview with Dan Basse, Ag Resources


2014 ASTA CSS & Seed Expo photo album

Taking on the Food Fear Mongerers

asta-css-14-kevinHearing food and health “celebrities” spread misinformation about agriculture really annoys plant molecular and cellular biology professor Dr. Kevin Folta, who spoke at the CSS 2014 and Seed Expo this week in Chicago.

Folta, who has a blog where he calls himself “a scientist in a scientifically illiterate nation at a time when we need science the most,” took the Food Babe to task on social media after she made an appearance on his home turf at the University of Florida. “She misinformed our students, said stuff that was just not true, she made chemistry and safe food additives look bad,” he said. “It was a promotion for her and really an unfortunate one because I really believe her heart’s in the right place but she gave our students bad information – and not on my watch.”

Folta was prepared to challenge her at the forum where she spoke, but since she did not take questions as expected, he did a blog post to refute her and he stresses the importance of food being a social debate. “Dr. Oz has an audience of five million people every day, I have an audience of a dozen,” he said. “We have to amplify our message by getting more of us involved.”

Interview with Kevin Folta, University of Florida professor


2014 ASTA CSS & Seed Expo photo album

NCGA President at NAFB Trade Talk

nafb-14-ncgaBiotechnology and GMO labeling, Waters of the U.S., and soil health were just a few of the issues on the mind of National Corn Growers Association president Chip Bowling at the recent National Association of Farm Broadcasting convention where he did dozens of interviews with farm broadcasters nationwide.

Bowling says corn growers are very concerned about the growing number of initiatives nationwide called for labeling of GMO products, and passage of a temporary ban on biotech crop production in Maui where many agribusiness companies do research on new traits. “The issue in Hawaii is critical,” he said. “We Hawaii is a place we can grow crops all year long and the companies that test their traits out there needs to have the accessibility to those areas.” Monsanto and Dow AgroSciences have filed suit over the ban, which was passed by a slim margin, and a judge has blocked its implementation.

One of the most important issues facing farmers right now, in Bowling’s opinion, is the proposed Waters of the U.S. rule. “It’s not going to go away,” he said. “We need them to withdraw the interpretive rule and clarify what they mean to regulate and we need to make sure that it’s not overreaching.” Bowling recently had officials from EPA out to his farm in Maryland to take a look at ditches and ponds and get their opinions on how they would interpret the rule.

Bowling is pleased with NCGA’s participation in the Soil Health Partnership (SHP). “We understand that we need to be good stewards of the land,” said Bowling. “It’s all about doing the right thing at the right time and we want to make sure that the farmers that we represent have all the information that they can get.”

Bowling talks about a variety of other issues in this interview: Interview with Chip Bowling, NCGA president


2014 NAFB Convention Photos

New Study Disputes Indirect Land Use Models

CARD LogoA new analysis of real-world land use data by Iowa State University raises serious concerns about the accuracy of models used by regulatory agencies regarding “indirect land use changes” (ILUC) attributed to biofuels production.

The study, conducted by Prof. Bruce Babcock and Zabid Iqbal at ISU’s Center for Agricultural and Rural Development (CARD), examined actual observed global land use changes in the period spanning from 2004 to 2012 and was compared to predictions from the economic models used by the California Air Resources Board (CARB) and Environmental Protection Agency (EPA) to develop ILUC penalty factors for regulated biofuels. The report concluded that farmers around the world have responded to higher crop prices in the past decade by using available land resources more efficiently rather than expanding the amount of land brought into production.

“There hasn’t been much land use change in terms of converting non-agricultural land into crop land,” said Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper of the report results. “We’ve seen more double-cropping, we’ve seen triple-cropping in some parts of the world. And, very interestingly, we’ve seen an increase in the amount of planted acres that are harvested.”

Cooper says the study, which was funded in part by RFA, comes at a time when the California ARB is in the process of re-adopting its low carbon fuel standard, which includes revisiting their land use analysis. “So this paper, we hope, should inform that debate and bring some clarity and commonsense,” said Cooper. More importantly, this new analysis can provide input to states like Oregon and Washington which are currently working on developing low carbon fuel standards.

Cooper explains more in this interview: Interview with Geoff Cooper, RFA



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