Lower Fertilizer Prices

In Farming, General by Cindy

The bad news is that commodity prices are lower – the good news is that input costs are dropping as well.

FarmingAfter increasing for six consecutive years, U.S. fertilizer prices are finally beginning to fall at the wholesale level, according to a report by the American Farm Bureau Federation (AFBF).

AFBF senior economist Terry Francl says the wholesale fertilizer price drop began about two months ago, generally after the time farmers applied fall fertilizer to their crops – but retail prices have yet to fall.

Wholesale prices for anhydrous ammonia in the Corn Belt have declined from the $1,000 per–ton-plus range to the $500 range. Urea has dropped from the mid-$800 range to the mid-$300 range. Diammonium Phosphate (DAP) has declined from $1,100 to $600 per ton. The decline in potash prices has been less notable, dropping from a little over $900 per ton to slightly over $800.

Francl advises farmers to “hold off their spring purchases for as long as possible” as fertilizer dealers will likely have to “cost average their prices down” by averaging their current high priced inventories with lower-priced future inventories which should eventually mean lower retail prices.

High Corn Yields

In Farming by Cindy

Despite a year of unusual weather, corn growers stepped up to the challenge and shattered yield records this year in the National Corn Growers Association (NCGA) 2008 National Corn Yield Contest.

CornNot only was the number of entries (6,725) higher than ever before, and double the number in 2006, but several entrants scored yields of more than double the estimated national average.

Even though there is no “official” overall winner in the contest due to the variety of growing climates and methods, Steven Albracht of Hart, Texas attained the highest overall yield of 368.27 bushels per acre in the national irrigated category. The national winners with the first, second and third highest yields in each of the eight production categories ranged from Albracht’s high to 284.5849 bushels per acre.

For more information about the winners – click here.

New Book Features Comments from Corn Industry

In Ethanol, Farming by Cindy

A new book on current energy issues includes a chapter on the future of corn ethanol written by National Corn Growers Association (NCGA) Chief Executive Officer Rick Tolman.

Energy Crisis to Energy Security book“From Energy Crisis to Energy Security” is a collection of essays edited by Daveed Gartenstein-Ross and Clifford D. May for the Foundation for Defense of Democracies, which is “a nonpartisan policy institute dedicated exclusively to promoting pluralism, defending democratic values, and fighting the ideologies that threaten democracy,” according to their website.

Tolman’s chapter stresses the ability of farmers to meet all demands for corn – food, feed, fuel or fiber.

“The future for corn ethanol in the U.S. is bright,” Tolman writes. “The trends in cost of production, productivity, and sustainability are all moving in a positive direction. Corn ethanol is the bridge to second and third generation biofuels, but will continue to play a key role for the foreseeable future as we develop alternative sources for petrochemical stocks.”

The book includes a foreword by R. James Woolsey and other contributors include Robert McFarlane, Robert Zubrin, Bruce Dale, Roger S. Ballentine, Laura Chasen, George Philippidis, and Kenneth J. Nemeth.

Only $10.95 – might make someone a great Christmas gift!

New Appointments Good for Agriculture

In Administration, Ethanol, government, Politics by Cindy

Tom VilsackPresident-elect Obama has announced former Iowa governor Tom Vilsack as his choice for Secretary of Agriculture and Colorado Sen. Ken Salazar as interior secretary. Both appointments are good news for the agriculture industry.

Vilsack served two terms as governor of Iowa from from 1998 until 2006 and was a short-lived opponent of Obama’s in the presidential race. As governor, Vilsack was a strong supporter of ethanol and other biofuels as a way to help rural economies. In his brief run for the Democratic presidential nomination last year, Vilsack made the focus of his campaign a plan to end U.S dependence on foreign oil by promoting alternative energy sources.

By the way, the last Secretary of Agriculture from Iowa was Henry Wallace who served under Franklin D. Roosevelt from 1933 to 1941. Wallace was a plant geneticist who founded what is now Pioneer Hi-Bred.

Ken SalazarAs for Salazar, the interior secretary will play a key role in setting the new administration’s environmental, energy and land-use policies.

Salazar has also has been a strong supporter of biofuels, this year co-sponsoring the Open Fuel Standard Act, legislation would require that half of all new automobiles starting in 2012 be flex-fuel vehicles warranted to operate on gasoline, ethanol, and methanol, or be warranted to operate on biodiesel. Colorado Governor Bill Ritter will have to appoint a replacement to complete Salazar’s term in the Senate through 2010. Among the contenders is Salazar’s brother, John, a potato farmer who serves in the U.S. House of Representatives.

Debunking Corn Ethanol Myths

In Ethanol, Food Prices, State Groups by Cindy

Texas Corn Producers Board Executive Director David Gibson has a great op-ed in the San Angelo paper this week about how the food companies continue to perpetuate the myth that ethanol has driven up food prices this year.

Texas CornTo hear the food companies tell it, the cause of rising food prices this year has been the high price of corn. The big food manufacturers have waged a yearlong, well-financed public relations campaign to blame ethanol for driving up the price of corn and grocery bills. It has been an effective message but it should be clear to everyone now that it simply isn’t true.

Since June, the price of corn has plunged more than 55 percent. A bushel of corn is now below $3.50, about the same price farmers received back in 1995 even though the cost of growing corn has soared in recent years. While corn prices were falling, ethanol production has been increasing every month, clear proof that ethanol is not driving corn prices higher. But cheap corn hasn’t resulted in lower food prices and food giants such as Kraft Foods and Kellogg’s have reported higher than expected earnings, due in large part to higher prices for consumers.

Gibson concludes:
There is no way that our country can achieve its goal of energy independence without increasing ethanol production. The low price being paid for corn is bad news for farmers, some of whom will not be able to cover their production costs. But it proves we have enough corn for food and for ethanol to reduce foreign oil imports. Now we just have to wait for the big food manufacturers to give consumers a break at the grocery checkout line instead of pocketing larger profits.

Read the rest of the article here.

Comment on Corn for Ethanol

In Ethanol, Farming, government by Cindy

The U.S. Department of Agriculture is seeking comments on a petition to deregulate corn that has been genetically engineered to produce a microbial enzyme that facilitates ethanol production.

SyngentaUSDA’s Animal Plant Health Inspection Service (APHIS) has regulated the corn, developed by Syngenta, since 2002.

SyngentaIf approved, the petition would allow the corn, which goes by the name Event 3272, to be freely grown and sold in the United States. According to APHIS, “If granted non-regulated status, Event 3272 corn could be the only GE variety available (specifically) for ethanol production.”

The petition has been submitted in accordance with APHIS regulations concerning the introduction of certain genetically engineered organisms and products. In accordance with those regulations, they are soliciting comments on whether this genetically engineered corn is likely to pose a plant pest risk. USDA is also making available for public comment an environmental assessment for the proposed determination of nonregulated status.

Comments need to be submitted by January 20, 2009. More information can be found here on the Federal Regulations website.

Different Type of Sweet Corn

In Ethanol, Farming by Cindy

Earless CornA cross between corn and sugar cane could be a new crop for the Midwest that could potentially double ethanol production per acre.

According to a story in the Kansas City Star, Seattle-based biotechnology company Targeted Growth has been testing “sugarcorn” in test plots in Illinois and Indiana.

Sugarcorn is a takeoff on a type of maize grown in the tropics, which grows traditional ears of corn.

Researchers found that when the tropical corn has a longer growing day, such as those in the Midwest, it delays its flowering and sends more energy into making sugar in the stalk instead of producing starch in the corn.

We did a story on tropical maize research being done at the University of Illinois over a year ago – that’s where the photo comes from. Targeted Growth is trying to take the crop from the research stage into commercialization. The company hopes to make sugarcorn commercially available in two years.

Economist Surprised by USDA Figures

In Ethanol, Exports, government by Cindy

Some of the numbers in the USDA December World Agricultural Supply and Demand Estimates (WASDE) took American Farm Bureau Federation senior economist Terry Francl by surprise.

AFBF Terry Francl“The most dramatic change in the December WASDE report was the big drop in corn used for ethanol production,” said Francl in an AFBF press release. “I am surprised that corn use for ethanol dropped by that much. Demand for ethanol is down, just like demand for gasoline is down, but I just don’t think the decline is that large. I believe 3.8 billion bushels to 3.9 billion bushels is closer to the mark.”

The WASDE estimates corn used for ethanol production this year at 3.7 billion bushels, down 300 million bushels from the November estimate. Francl explained that a number of ethanol plants are idled due to weak demand, which explains the drop in corn used for ethanol. However, the Renewable Fuel Standards would seem to imply that at least 3.8 billion bushels of corn will be utilized for ethanol production in 2008/09.

He does seem to agree with the estimate for exports, which was lowered 100 million bushels from November to 1.8 billion bushels. “The drop in corn exports is more on target due to the weakening global economy,” Francl said.

The AFBF economist expects a further weakening in corn exports in 2009 due to the economic slowdown.

Disconnect Between Food and Agriculture

In Farming, Media by Cindy

There seems to be an enormous disconnect in places like New York City between food and the farmers who produce it.

nyt editorialTake for example this editorial in the New York Times this week by Nicholas D. Kristof calling on president-elect Obama to appoint a “Secretary for Food” instead of agriculture.

Mr. Kristof says, “A Department of Agriculture made sense 100 years ago when 35 percent of Americans engaged in farming. But today, fewer than 2 percent are farmers. In contrast, 100 percent of Americans eat.”

Did it happen to occur to Mr. Kristof that that means two percent of our population feeds themselves and the other 98 percent – not to mention a good portion of the rest of the world? Nope. For some reason, he doesn’t appear to get that connection. Instead he says that renaming the USDA the “Department of Food” would move us “away from a bankrupt structure of factory farming that squanders energy, exacerbates climate change and makes Americans unhealthy — all while costing taxpayers billions of dollars.”

Then he proceeds to quote from anti-agriculture activist Michael Pollan who says, “We’re subsidizing the least healthy calories in the supermarket — high fructose corn syrup and hydrogenated soy oil, and we’re doing very little for farmers trying to grow real food.”

I guess that means that all the corn and soybean farmers in this country are not growing real food. So why should anyone be concerned that ethanol production is using food for fuel then?

Then Mr. Kristof complains that he gets $588 a year for “not growing crops on timberland I own in Oregon.” He gallantly points out that he forwards that money to charity. More than likely that money comes from some conservation program that is designed to help preserve our natural resources. Again, he seems to think this is a bad thing.

There were some 250 comments on this article in one day before they closed the comments. Sadly, too many of those commenting seemed to agree with his contention that the government, through USDA, supports “factory farms” rather than small family operations and rural towns. He wants to see a “Department of Food” to give “primacy to America’s 300 million eaters.”

What he apparently doesn’t realize is that because there are less farmers they need to produce more and more food to feed those “eaters.” Does he think we should have smaller farms and more of them? Would he like to have his own sustainable, organic farm in New York City to produce his own food?

Despite our best efforts in agriculture, the disconnect remains. The well-fed population of the United States fails to see the connection between the healthy, safe and abundant food supply they enjoy and the hard working farmers who produce it.

Higher Ending Stocks Projected for Corn

In Audio, Ethanol, Exports, Farming, Food vs Fuel, government by Cindy

The latest World Agricultural Supply and Demand Estimate (WASDE) from USDA is projecting a higher carryout for corn this year due to smaller than expected usage for ethanol and exports.

USDAProjected U.S. feed grain ending stocks for 2008/09 are raised this month with increases for corn, barley, and oats. Corn use is projected lower with increased feed and residual use more than offset by reductions in ethanol use and exports. Ethanol use is projected 300 million bushels lower this month as prospects for blending above federally mandated levels decline. Financial problems for ethanol producers are reducing plant capacity utilization for existing plants and delaying plant openings for those facilities still under construction. Falling gasoline prices have also resulted in high relative prices for ethanol, reducing blender incentives. Despite reductions in expected meat production, corn feed and residual use are raised 50 million bushels as lower ethanol production reduces the availability of distiller grains. Corn exports are projected 100 million bushels lower reflecting strong competition from larger foreign grain supplies and the slow pace of sales to date. Projected ending stocks are raised 350 million bushels. The season-average farm price is projected at $3.65 to $4.35 per bushel, down on both ends of the range from last month’s $4.00 to $4.80 per bushel.

There is no update for corn production from USDA this month, which remains at 12 billion bushels.