In the face of bad news for the general economy in the United States, agriculture is looking pretty good.
Last week we heard that U.S. economic growth dropped to just 1.6 percent in the second quarter of this year, compared to 3.7 percent for the first three months, and some say it could be below one percent next quarter. Meanwhile, unemployment continues to flirt with double digits, riding at 9.5 percent overall.
But the agricultural sector is showing a significant increase in both farm income and exports. It’s all up about 23-24 percent compared to last year. Granted, last year was down 20 percent from the year before, which was a record for exports and near record for farm income. But, it definitely spells R-E-C-O-V-E-R-Y, unlike the rest of the economy, despite the best of efforts to make that happen.
“The great thing about this recovery is that it’s sector-wide,” said Agriculture Secretary Tom Vilsack in a press conference today about the new reports. “While an increase in the value of livestock production accounted for much of the upward movement, the value of dairy production rose by 26.2 percent; the value of meat animal production is up 14.6 percent, and the value of poultry and egg production rose 8.4 percent.” That’s all good news for corn farmers.
USDA increased its forecast for 2010 exports by $3 billion compared to May to $107.5 billion, due mostly to greater grain and feed shipments and higher values along with increased livestock, poultry, and dairy product exports. “Agriculture is one of the few major sectors of the economy today that has a trade surplus, which we are now forecasting to be a little over $30 billion,” said Vilsack. That is also forecast to get even better next year, up to $113 billion, very close to the record $115 in 2008, thanks to sharply higher unit values and volumes for wheat and corn, as well as increases in products like distillers’ dried grains (DDGS). Vilsack points out that every billion dollars in agricultural exports supports over 8,000 jobs and generates an additional $1.4 billion in economic activity.
Kind of makes you wonder where our economy would be right now without farmers and ranchers, doesn’t it? Vilsack noted the significance of the “underlying values of rural America and its farmers and ranchers to the resilience of the agriculture sector.” In other words, farmers and ranchers are not afraid of hard work, they have kept their debt below that of the rest of the economic sectors, and they continue to increase productivity through innovation and research.
It is really a very simple solution to economic problems. Hard work + low debt + increased productivity = economic recovery. The rest of the economy certainly could learn a lot from the farm.
May is World Trade Month – and it would be a great time for Congress to finally ratify the free trade agreements that have been sitting around gathering dust for three years now.
No one seems to know exactly what the hold up is on ratifying the agreements with South Korea, Panama and Columbia, especially since President Obama made increasing exports number three in his list of priorities for the nation during his State of the Union address in January, specifically setting a goal to “double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.”
“If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. But realizing those benefits also means enforcing those agreements so our trading partners play by the rules,” the president said. “And that’s why we will continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea, Panama, and Colombia.”
Several agriculture groups got together Monday in Washington to urge Congress to “stop dragging its feet” and pass the Colombia, Panama and South Korea free trade agreements. The South Korea and Panama agreements were both finalized in June of 2007 – Columbia has been sitting around since November 2006. In the meantime, all three countries have been moving forward on trade deals with U.S. competitors.
American Farm Bureau Federation president Bob Stallman says the inaction on the part of Congress is costing U.S. agriculture lost market share and competitiveness. “We are seeing all around us FTAs being negotiated or already negotiated by our competitors, increasing their export potential and putting the U.S. at a disadvantage,” said Stallman. “The three FTAs combined, which are stalled in Congress, represent almost $2.5 billion in additional exports.”
Maryland corn farmer Chip Bowling says U.S. corn exports to Columbia alone have dropped 50 percent, a loss of $273 million to the U.S. economy. “Instead of seeing increasing markets and new opportunities for corn growers, we are fighting to keep our markets away from international competitors,” Bowling says, but passing the Columbia FTA could fix the problem. “Under the Colombia Free Trade Agreement, the United States would have immediate access to Colombia’s market for 2.1 million metric tons of corn at a zero percent duty.”
Our extensive water transportation system in the United States may very well be one of our greatest national economic and strategic assets. It is definitely our most unappreciated means of moving goods because the vast majority of the population doesn’t see river transport in action, smell it, or risk getting run over by it.
That’s also the downside. People will support road projects all day because of our personal engagement with the asphalt and concrete, but ignore our most efficient and environmentally safe means of moving critical goods from coal to corn to construction materials.
So it is concerning that a critical part of our nation’s transportation infrastructure, the locks and dams along the Illinois River and the Upper Mississippi River, are deteriorating and falling behind technologically after 80 years of stalwart contributions.
Granted, this oversight may be understandable given the public and government’s focus on political issues from war to health care and economic issues that don’t need any explanation, but the consequence for this lack of vision may carry a big price tag in years ahead.
The country’s inland navigation system plays a critical role in the nation’s economy, moving more than a billion tons of domestic commerce valued at more than $300 billion per year. More than one billion bushels of grain (about 60 percent of all grain exports) move to export markets via the inland waterways each year.
Growing agricultural productivity in the U.S. and growing populations and buying power overseas provide some clues to the critical importance of addressing this issue. Population is expected to grow by 2.5 billion more people by 2050 to more than 9 billion people and many of those hungry eyes will be looking to the U.S. to keep their pantries and their stomachs full.
There are also significant environmental benefits to the inland waterway system. The backwaters created by the lock and dam system support more than 40 percent of the migratory water fowl and fish breeding grounds and are home to more than 500 miles of wildlife refuge. In addition, more than $1 billion are generated each year in recreational use – fishing, hunting and tourism.
So if the opportunity arise to tell your local, state or federal elected officials they need to get active now on updating our water transportation system it will be time well spent.
U.S. Grains Council Corn Mission to Morocco, Egypt and Jordan has been immortalized in a 17 minute slide presentation by Chuck Zimmerman of ZimmComm New Media who documented the mission in photos and audio:
A consistent theme was the growth potential in these markets. That’s why the USGC has people on the ground working to develop new business opportunities for American farmers. After our team’s final dinner I spoke with them as a group to get their final thoughts on what they’d like farmers back home to know about their experience. We just went around the table starting with the corn grower members. Here are some of their final thoughts:
The main thing is the relationship the USGC staff has with people in all these countries. They appreciate what the USGC does.
I got to see what the USGC does on a personal level. These ddgs programs are working well. I hope they’ll buy more.
I sure learned a lot about the legwork that goes on on the ground here for these guys. There’s still some work to be done.
We spent our time well and did something that will benefit everyone back home. The USGC work has been an important part of keeping our exports going.
I think the potential for increased sales is there. The network is in place and working well.
Demand looks strong and will continue for a long time to come.
Shannon Schaffer, the USGC staff representative on our trip added these thoughts:
These guys worked really hard on this trip. Lots of time spent on the road and with the customers we service. They served as ambassadors for the USGC and corn growers specifically.
You can listen to Chuck’s final interview with the Corn Mission Team below:
Read all about the trip and see all the photos on Agwired and/or USGC’s The Grain Board.
A team of corn growers on a mission in Morocco this week heard from Kurt Shultz, Director for the Mediterranean and Africa for the U.S. Grains Council (USGC), about the agriculture industry in Morocco and the potential it holds for U.S. grain producers.
Chuck Zimmerman, who is blogging the trip on Agwired and The Grain Board, reports that Kurt told them the USGC became involved in Morocco about 15 years ago when corn imports were low and there was a huge duty of about 75 percent. USGC formed a relationship with livestock producers and the government that has led to the reduction of those duties to about 35 percent, which has driven growth tremendously, as has an increase in poultry production.
Kurt says that the USGC helped form a poultry organization that provides members with educational materials so that it can compete on a global level. He says that investment has paid off big dividends over the years. Besides corn, he says they are seeing a growth in the imports of dried distillers grains. Kurt says that imports in Morocco could double in the next five years, especially with developments in the ruminant sector.
The 2009 U.S. Grains Council (USGC) Corn Mission team landed in Casablanca today for the first leg of a trip that includes Morocco, Egypt and Jordan. Blogging for the team is Chuck Zimmerman (far left in the photo) of ZimmComm New Media who already has interviews with the entire team posted for your listening pleasure here on Agwired.
The team includes – William “Sparky” Crossman representing the Virginia Corn Board, Jim Stuever with the Missouri Corn Merchandising Council, Bob Timmons of the Kansas Corn Commission, Darren Armstrong with Corn Growers of North Carolina, Jerry Griffith representing the Kentucky Corn Promotion Council, Joe Zenz with the Wisconsin Corn Promotion Board – and USGC Director of Membership Shannon Schaffer. That is not in any particular order, since Chuck didn’t identify them from left to right in the photo. I only know him because we’ve been married for almost 30 years! Oh – and Shannon is the guy in the middle.
National Corn Growers Association board member Guy Davenport of North Carolina has been taking part in the U.S. Grains Council’s Annual China Corn Tour this month which has already visited Northern China Plain regions of Henan, Anhui, Hebei and Shandong Provinces and is now touring the drought stricken Northeast region of China.
During a conference call from China this morning, Guy talked about what they have been seeing. “China corn farming was certainly not what I envisioned it to be,” Guy said. “They have soils that are just as good as ours, very large fields that are very comparable to our Midwest farms.” Guy says they found most farmers had just about five acres, but they were small holdings all close together, giving the impression of vast acreage for miles. They also found out that harvest is done by hand and takes a typical farmer about ten days.
As a representative for all corn growers, Guy will be reporting back to the NCGA board what he has learned in China. “I think this gives us a better perspective about how much corn can be grown in that part of the world, how efficient they are in their corn production and to what extent they use irrigation. It was truly an eye-opening experience to me.’
Cary Sifferath, USGC Senior Director in China, talked about the drought conditions in the country and high corn prices. “Those high prices have led to some opportunities for US feed grains products, specifically distillers dried grains (DDGS) products from the US ethanol industry,” Cary said. “We had roughly 8,000 metric tons of DDGS that was exported from the US into China and right now for 2009 we can easily predict 250,000 to 300,000 tons of distillers dried grains being imported by China’s feed and livestock industry, especially in the southern and coastal areas of China where DDGS has become a very competitive feed ingredient.”
A man with his roots in corn has been chosen to help take U.S. corn exports to the next level.
It was officially announced today that former USDA Undersecretary for Rural Development Thomas C. Dorr will serve as president and CEO of the U.S. Grains Council, effective November 16.
Before serving the USDA for seven years, Dorr was an Iowa farmer for 30 years and a member and officer of the Iowa and National Corn Growers Associations. Dorr is taking the helm of the organization as it is about to celebrate 50 years in 2010, succeeding Ken Hobbie, who has been with USGC for 33 years and served as president and CEO for the last 19 years.
Dorr says his first priority will be to work with the Council’s membership, Board of Directors, and staff to clearly define, not just the challenges, but the opportunities for international grain trade.
Chuck Zimmerman with Agwired interviewed the new CEO:
“While consumers in Japan always say that safety is a top priority, we have found that they actually respond more positively to messages that convey quality and wholesomeness,” said USMEF Japan Director Gregory Hanes. “This type of image helps us subtly address consumers’ safety concerns, but do so in a more positive and appealing manner by stressing the quality of corn-fed beef and pork.”
Earlier this summer, a delegation of producers representing the Iowa Beef Industry Council, the Iowa Corn Promotion Board, the Nebraska Beef Council and the Nebraska Corn Board went to Tokyo on a trade mission organized by USMEF to promote U.S. corn-fed beef in both Japan and South Korea.
Alan Tiemann, a corn and soybean farmer from Seward, Nebraska was on that mission and says that USMEF’s promotional efforts are paying off in Japan. “In the grocery stores, markets and restaurants where USMEF has promotions going on, U.S. beef is very well-received,” he said. “We see a lot of meat going off the shelves where they are doing promotions, and it’s been fun to watch those programs produce results.”
The bad news is that between the overall economy and low prices in key export markets, U.S. beef and pork exports have been down this year. Add in the H1N1 problem and pork exports were down about 30 percent in June of 2009 compared with June 2008.
The National Pork Producers Council today urged the USDA to help U.S. pork producers to help recover from the economic crisis that has caused them to lose an average of more than $21 on each hog marketed for the past two years. Among other things, NPPC wants USDA to work with the U.S. Trade Representative to open export markets to U.S. pork. Several countries, including China, continue to impose unwarranted bans on U.S. pork because of the H1N1 flu.
Rest assured that corn growers will continue to do what they can to help open markets and increase meat exports as well.
But the agricultural sector is showing a significant increase in both farm income and exports. It’s all up about 23-24 percent compared to last year. Granted, last year was down 20 percent from the year before, which was a record for exports and near record for farm income. But, it definitely spells R-E-C-O-V-E-R-Y, unlike the rest of the economy, despite the best of efforts to make that happen. 
No one seems to know exactly what the hold up is on ratifying the agreements with South Korea, Panama and Columbia, especially since President Obama made increasing exports number three in his list of priorities for the nation during his State of the Union address in January, specifically setting a goal to “double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.”
A consistent theme was the growth potential in these markets. That’s why the USGC has people on the ground working to develop new business opportunities for American farmers. After our team’s final dinner I spoke with them as a group to get their final thoughts on what they’d like farmers back home to know about their experience. We just went around the table starting with the corn grower members. Here are some of their final thoughts:
A team of corn growers on a mission in Morocco this week heard from Kurt Shultz, Director for the Mediterranean and Africa for the 
The 2009 
As a representative for all corn growers, Guy will be reporting back to the NCGA board what he has learned in China. “I think this gives us a better perspective about how much corn can be grown in that part of the world, how efficient they are in their corn production and to what extent they use irrigation. It was truly an eye-opening experience to me.’
It was officially announced today that former USDA Undersecretary for Rural Development Thomas C. Dorr will serve as president and CEO of the 
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