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Commodity Communicator Weekly

August 24, 2012


08212012 EPA - RFS - Request for Comments.pdf

. . . . . In a report released last week, the University of Missouri Food and Agricultural Policy Research Institute details possible consequences of key provisions within the Senate-passed and House Agriculture Committee-passed farm bills. The Senate Farm Bill, titled the "Agriculture Reform, Food and Jobs Act of 2012" was passed in mid-June, whereas the House Farm Bill, titled the "Federal Agriculture Reform and Risk Management Act of 2012" was only passed out of committee before Congress' August recess. The report compares the largest changes in both bills, including the elimination of direct payments, the addition of the Stacked Income Protection Plan, Agriculture Risk Coverage and Supplemental Coverage Option programs in the Senate version and the establishment of Price Loss Coverage and Revenue Loss Coverage plus STAX and SCO in the House version. Differences and similarities between the two bills were calculated using baseline data that assumes continuation of current farm bill policy. The report explained that the two bills are very similar in that they both replace direct payment programs with programs that focus on current production levels and farm spending would be reduced under both.
According to the report, the Congressional Budget Office has determined savings from the Senate bill to be approximately $18 billion and savings from the House bill to be $18.5 billion. The study also found that impact on commodity markets would be minimal. A key difference between the two bills is the additional support to peanut, wheat, rice and barley growers offered in the House Committee bill, but not in the Senate's version. However, protections for corn and soybeans would be greater under the Senate bill than under the House Ag Committee bill.  Under both bills, the report found, farm real estate values would decline, as would net farm income.  Possibly one of the most significant differences between the two bills is the level of coverage for different crops.

According to the report, the House Committee bill through the combination of PLC, RLC, SCO and STAX provide similar levels of average support to producers of corn, soybeans and cotton relative to that provided by the Senate bill. In contrast, average producer program benefits are far greater under the House Committee bill for wheat, rice, barley and peanuts. These programs provide an average of about $17 per acre for corn, $9 per acre for soybeans, $14 per acre for wheat, $41 per acre for upland cotton $94 per acre for rice and $86 per acre for peanuts. For most crops, prices are lower under the House Committee bill than under the Senate bill, so the market value of production per acre is also lower.  The $5 billion spending difference between the two bills is relatively small when compared to outlay changes cause by DCP and ACRE elimination, the report says.
In the House Committee bill, the new PLC, RLC, STAX and SCO provisions offset some of the savings from eliminating the DCP and ACRE programs. The estimated 10-year budgetary effect of the provisions examined is to reduce net outlays by $12.5 billion relative to the Baseline. Expenditures by the Commodity Credit Corporation for traditional farm programs, PLC and RLC are reduced by a net of $28.1 billion, while crop insurance costs associated with SCO, STAX and changes in producer participation and coverage levels increase net outlays by $15.7 billion.

COTTON DEFOLIATION. . . . . Defoliation has started with some of the earlier planted cotton and dryland fields. The weather forecast continues to look optimum for defoliant applications. There is only a slight chance of rain over the weekend and a fairly clear week ahead. Temperatures remain high; therefore many products and combinations will work well.

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COTTON UPDATE . . . . . According to the latest crop update released by the USDA, approximately 31% of the Arkansas cotton crop contains an open boll, well ahead of our average 5 year maturity of only 13% at this time.  Several thousand acres of cotton will be defoliated by the end of this week.  The Arkansas cotton crop was rated this week to be approximately 60% good or excellent, 25% fair and 15% poor, overall I believe we will have an above average yield for the 2012 cotton crop.

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WILLIAMS NAMED 2012-2013 MISS ARKANSAS RICE. . . . .Meredith Williams of Searcy (White County) was named 2012-13 Miss Arkansas Rice at the Brinkley Convention Center, Aug. 18. Williams, 18, is the daughter of Bill and Ruth Williams of Searcy.  Bailey Dillinger of Palestine (St. Francis County) was first runner-up, and second runner-up was Bailey Davis of Bono (Craighead County). Other county winners participating in the state finals were Stephanie Palmerin Sanchez of Altheimer (Arkansas County), Brooklyn Devazier of Wynne (Cross County), Elizabeth Pack of Lonoke (Lonoke County) and Ashtyn Lowry of Brinkley (Monroe County). The goal of the Miss Arkansas Rice program is to encourage youth interest in rice promotion and to publicize the importance of the Arkansas rice industry to the state's economy. Contestants were judged on their promotion activities, knowledge of the rice industry and rice-cooking skills. Meredith's recipe was "Pineapple Rice Delight." The Arkansas Rice Council sponsors the annual contest in cooperation with the Arkansas Farm Bureau and the Arkansas Cooperative Extension Service.

PETA MAY SUE THE KANSAS STATE FAIR. . . . .Drovers CattleNetwork…..A free speech lawsuit against the Kansas State Fair has been threatened by People for the Ethical Treatment of Animals.  At issue is a 13-minute video PETA wants to show at its booth at the Kansas State Fair containing undercover images from slaughterhouses and factory farms.  The video, narrated by ex-Beatle and vegetarian Paul McCartney, is described as “gruesome” by PETA. The Kansas State Fair has told PETA they can’t show a video or pictures “that depict animal slaughter, animal harvest, hide removal, or show or depict live animals being decapitated, dismembered or butchered.” Further, such images must “not be readily visible to passersby or the general public on any side of the booth.” The Wichita Eagle reports that the American Civil Liberties Union of Kansas and Western Missouri and a Kansas City law firm have agreed to represent PETA in a potential federal suit.  The ACLU believes the state fair is imposing a content-based restriction on PETA’s speech that is blatantly unconstitutional. In a news release defending the video’s content and the group’s right to show it, PETA executive vice president Tracy Reiman said, "Meat comes from intelligent, feeling animals who suffer every day of their lives on factory farms and experience a painful and terrifying death at slaughterhouses.  People who eat meat deserve to know the truth.  The truth isn't always pleasant, but you don't get around it by denying people their constitutional rights."  

DAIRY COW SLAUGHTER IS DEFINITELY UP. . . . .Dairy Herd Network…..A substantially higher number of dairy cows went to slaughter in July than the same month a year earlier, an indication that high feed costs are causing some herds to liquidate.  According to the “Livestock Slaughter” report issued by the U.S. Department of Agriculture this morning, 239,000 dairy cows went to slaughter in July, compared to 207,000 in July 2011. That is a 32,000-cow increase, which is substantially higher than the 2,000-cow year-over-year increase in April and the 10,000-cow increase in June. Yet, in May ? before this summer’s drought set in and caused feed prices to skyrocket ? the increase was 31,000 head, which might suggest the nation’s dairy herd was already in the process of downsizing.  The true impact of this summer’s drought may not show up until the August numbers are in. For the week ending Aug. 11, dairy cow slaughter under federal inspection was up 7.7 percent, at 57,300 head, compared with the same period the previous year, points out Dave Kurzawski, dairy analyst with FC Stone/Downes-O’Neill in Chicago.  Year-to-date slaughter levels are 4.9 percent higher than 2011 levels, with 1,857,600 head slaughtered. 

FARM BUREAU VEHICLE PURCHASE PROGRAM . . . . . Members now have a better way to buy a new or used vehicle through this easy to use program.  Benefits include in-depth price reports, target prices, estimated values and certified dealers.  The $500 GM incentive for members is already built into the system for qualifying vehicles.  Complete details at

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