Corn Commentary

USDA Revises Crop Report

For the first time ever, USDA has revised and re-issued a monthly crop report. A new October acreage and production report was issued this morning.

NASSUSDA revised the numbers after discovering discrepancies in a Farm Service Agency (FSA) database of producer-reported crop acreage used by the National Agricultural Statistics Service (NASS). NASS published the changes this morning in a corrected version of the Oct. 10 Crop Production. The World Agricultural Outlook Board also issued an abbreviated World Agricultural Supply and Demand Estimates (WASDE) report reflecting the acreage updates.

Compared to the Oct. 10 release, the corrected Crop Production report reflects 1.2 percent fewer planted acres for corn, 1.4 percent fewer planted acres for soybeans, 1.9 percent fewer acres planted acres for canola, 0.8 percent fewer planted acres for sunflowers, and 0.7 percent fewer planted acres for dry edible beans. The report also reflects a 2.5 percent increase in planted acres for sorghum. Even with the reduced acreage estimates, the 2008 corn crop is still on track to be the second largest on record, while the soybean crop will be the fourth largest.

Schafer Clarifies USDA Loan Program

USDA has been trying to get the message out that they are not bailing out ethanol plants that lost money speculating on commodity markets this year.

World Food Prize Ed SchaferThe problem started when Secretary of Agriculture Ed Schafer told members of the press at the World Food Prize symposium in Des Moines that some ethanol plants might be eligible for loans through USDA. “There is going to have to be some credit applied to companies to buy some lower-priced corn to blend with their higher-priced corn obligations,” Schafer said.

Reaction from the livestock industry was swift and angry. Eight major livestock organization leaders wrote to the secretary protesting what they viewed as preferential treatment for the ethanol plants. “Many of our producer and processor members also took long positions on corn and soybeans and are paying above-market rates right now,” they wrote. “We in animal agriculture are particularly concerned that you would consider adding one more level of support for the corn-based ethanol industry.”

So, Schafer met with those groups today to try and explain the USDA’s Business and Industry Loan Guarantee Program. “We walked through the B&I loan guarantee program, which has been used by their memberships, and we assured them that this was a long-standing program that we would use to help finance businesses in rural America, some of them may be ethanol facilities,” Schafer said.

Schafer notes that the loan program is there for the livestock industry as well. “And we’re going to pass along the elements of the Business and Industry loan guarantee program to them that they can pass out to their members.”

No word from the livestock industry on whether they would consider that a “bail out.”

South Dakota Corn Sponsors Ethanol Bowl

South Dakota CornThe South Dakota Corn Utilization Council is partnering with Northern State University to present the First Annual Ethanol Bowl next month.

The premiere event will feature the NSU Wolves facing Northern Sun Intercollegiate Conference rivals the Augustana Vikings on November 8 at Clark Swisher Activities Complex in Aberdeen, S.D.

“Northern State looks forward to celebrating a growing industry in our region and enjoy some great NSIC football,” said Bob Olson, NSU Athletic Director.

Increased Demand for Ethanol By-Product

US Grains Council Ken HobbieExport opportunities for the ethanol by-product distillers dried grains with solubles (DDGS) are increasing as the industry continues to grow. That was the main message to more than 500 who attended the second the U.S. Grains Council’s International Distillers Grains Conference this week in Indianapolis.

“The reason we’re holding this conference is that we are confident the U.S. ethanol industry will continue to grow due to efforts undertaken by the National Corn Growers Association and state producer organizations over the last several years,” said USGC president and CEO Ken Hobbie. “Due to the efforts of U.S. growers to establish the ethanol industry, we made DDGS our top priority in 2006 and since then have seen DDGS exports exceed 2 million metric tons annually.”

“DDGS and its value in all types of animal rations shows that US grain producers have the capacity and the capability to produce for both food and fuel.” Hobbie said. He noted that if the four million tons of DDGS exported from the US this year were divided equally between all the major livestock food sectors it would produce 331,000 metric tons of chicken, nearly five billion eggs, almost 86,000 metric tons of beef, 1.8 million metric tons of milk and 205,000 metric tons of pork.

Listen to Hobbie’s remarks here, provided by Hoosier Ag Today:

Will They Admit Their Error?

From Reuters, today:

Ethanol no longer seen as big driver of food price

Heavy demand for corn from ethanol makers was seen as a key driver of corn futures to record highs in June, but since then the sharp decline of corn along with other commodities shows that belief was mistaken.

“The record high prices were a speculative bubble,” said Stewart Ramsey, senior economist for Global Insight, Philadelphia.

Duly Noted and Quoted

Back in August, when the U.S. Environmental Protection Agency upheld the renewable fuels standard, ethanol critics were disappointed. Scott Faber, the Grocery Manufacturers Association, was quoted saying that the Bush Administration lost a chance “to immediately reduce food prices and, more importantly, to avoid the certainty of much higher food prices in 2009.”

How immediate would that reduction in food prices have been? Faber never said, and now we know why. As much as corn prices have decreased since reaching a peak in August, there seems to be no intention to lower prices. Here’s another quote from Faber, from an Oct. 17 Wall Street Journal story that looks into how food prices are remaining high, despite much lower prices for commodities suich as corn, soybeans and wheat: “The impact of [higher priced] corn is continuing to work its way through the value chain and will continue to be reflected in higher grocery prices for some period.”

If anything gets reduced, it’s the size of food packages in grocery stores, as noted in a post below.

Feeding and Fueling the World

World Food Prize Ed SchaferThe answer to feeding a growing world population lies with building on the success of the American farmer, according to Agriculture Secretary Ed Schafer, who addressed the World Food Prize breakfast last week in Des Moines.

“Our focus should be on sharing our technology, equipment and know-how, processes and procedures to help farmers all over the world boost the productivity of their land,” Schafer said. “Just in the last 15 years, our corn yields have increased from an average of 100 bushels per acre to 150 bushels per acre, a 50 percent increase in yield in 15 years.”

“Gains of this kind have allowed the United States producers to meet the rising demand for food and feed and fuel, while maintaining record level exports and strong food aid donations,” Schafer added.

Listen to Schafer’s comments regarding productivity here:

A Kernel of Truth About Corn Products

Grains For LifeI don’t know about you but I like corn in all its various forms, fuel for my body or fuel for my car. Here’s some new research that shows just how healthy the milled food products can be. Someone please get me a bowl of grits! Corn – a Grain For Life.

New research just published in the October issue of the Journal of Agricultural and Food Chemistry reveals significant health benefits in milled yellow corn products. The study, authored by Purdue University professor Dr. Mario Ferruzzi, demonstrates milled yellow corn products are rich in antioxidants, especially carotenoids such as lutein. Additionally, the bioaccessibility level of carotenoids milled corn products is high, often more than 50% bioaccessible.

Carotenoids are yellow and orange plant pigments known for their association in the prevention of chronic diseases including cancer, cardiovascular disease and macular degeneration. Vegetables such as carrots, spinach and tomatoes are frequently associated with high levels of carotenoids; however, given the findings of this study, milled yellow corn products should be included in this category of antioxidant-rich foods. (more…)

European Biotech Resistance

It was pretty evident at last week’s World Food Prize symposium in Des Moines that European nations remain the most resistant to biotech crops. But some farmers are bucking the system.

World Food Prize TATT AwardOliver Ransmann of Germany participated in a Truth about Trade and Technology farmer roundtable that included over 20 producers from nearly as many countries discussing the benefits and challenges of biotechnology in their parts of the world. I had a very interesting conversation with him about the lack of acceptance of biotech in his country and Europe in general. He just started using Monsanto’s corn borer resistant genetics two years ago on his 400 ha farm that grows mainly corn and rye to generate biogas. He talked about the stringent government regulations on biotech crops and the general distrust of biotech by both farmers and the general public.

He told me that farmers who choose to grow biotech crops in Germany are “branded” in a way and subject to vandalism. “This year my ground was damaged by activists – we had iron sticks in the fields and spoons and knives in the grain,” he told me. “We can’t understand why people are doing it and it’s very dangerous.”

So why does he still choose to grow biotech crops on his farm? “If I’m not using Bt maize, I have 30-40 percent less productivity and I can’t afford it,” he said. He understands that biotech varieties offer environmental benefits by allowing farmers to use less chemicals and to produce more on less land, but he says that message is being ignored in Europe.

Listen to an interview with Oliver here: [audio:]

High Food Prices Sticking Around

stickyEven though grain and energy prices have dropped significantly in recent weeks, higher food prices may have more sticking power than gum on the bottom of a shoe.

The reason being given by the economic experts is “sticky prices,” according to this AP story. “That’s what analysts call it when companies slap higher prices on products and keep them there even though the rationale for the price hikes — such as soaring oil prices — is gone,” the story says.

Some folks would really like to get to the bottom of this whole food price mystery. Last week on World Food Day, launched “Operation Missing Cookie” after discovering that Kraft and other companies were reducing the weight content in packages of food items such as Chips Ahoy cookies and selling them at the same price.

Food Price Truth“Kraft pointed the finger at higher operating costs, but their profits are up 24% this year compared to last year,” the organization noted, calling such statements from food companies misleading and disingenuous. “These companies pretend that they are suffering at the hands of higher energy and grain prices like average Americans, but it’s really about squeezing more money out of the consumer.” compiled a chart of familiar food items showing up to 25 percent weight reductions in common food items like cheese, mayonnaise and ice cream.

Sticky prices simply mean that food companies are sticking it to consumers – and that’s even more disgusting than finding gum on the bottom of your shoes.

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