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Commodity Communicator Weekly

September 28, 2012

SENATORS HAGAN AND CRAPO INTRODUCE PESTICIDE PERMIT LEGISLATION…..Senators Kay Hagan (D-NC) and Mike Crapo (R-ID) have introduced S. 3605, “Restoring Effective Environmental Protection” (REEP Act); Mark Pryor (D-AR) is a cosponsor.

The legislation clarifies that National Pollutant Discharge Elimination System (NPDES) permits are not required when applying pesticides according to their EPA approved label. The bill is similar to H.R. 872, which passed the full House last year.

While similar language was included in the House Agriculture Committee version of the Farm Bill; supporters are looking for other vehicles to advance the language prior to the end of the year during the lame duck session. Unfortunately, the REEP Act has been referred to the Senate Environment & Public Works Committee, which is chaired by Senator Barbara Boxer (D-CA) who is the chief opponent of the legislation.  
 
U.S. HOME BUILDER CONFIDENCE RISES….Confidence among U.S. home builders rose this month to its highest level in six years. The National Association of Home Builders/Wells Fargo builder sentiment index released last week increased to 40 in September.

That's up from 37 in August and the highest reading since June 2006, just before the housing bubble burst. Any reading below 50 indicates negative sentiment about the housing market. (read more http://www.newsday.com/classifieds/real-estate/u-s-home-builder-confidence-rises-1.4015574)

IOWA GETS OK FROM FDA TO BLEND AFLATOXIN CORN
…..The U.S. Food and Drug Administration will allow grain handlers in Iowa to blend corn containing aflatoxin levels above 20 parts per billion with corn that has lower levels.  

Elevators typically dock farmers for corn with levels above 20 ppb, and reject loads at levels above 200. In an FDA letter sent to the state this week, officials indicated that the move was only temporary:

“Given the recent weather conditions this year and the preliminary aflatoxin data provided by the state, we do not object to providing temporary relief during the months of September and October to allow the mixing or blending of corn with aflatoxin levels above 20 parts per billion with corn found to have lower or negative aflatoxin levels,” the letter said.

DTN found reports of aflatoxin levels as high as 300 ppb in parts of Indiana, Illinois and Kansas, but so far Iowa is the only state to announce that it has received FDA approval to blend. Although FDA requires states to seek approval before blending, an FDA guidance document for toxins said the agency has not established regulatory limits for toxins or contaminants found in food or feed, although it has stated its intent to eventually establish limits for aflatoxin.

DTN RETAIL FERTILIZER TRENDS…..Prices of three fertilizers continued to move while the other major fertilizers are generally steady the third week of September, according to retail fertilizer prices tracked by DTN.

Anhydrous prices have marched steadily higher since spring, narrowing the price advantage over other N fertilizers. The nitrogen fertilizer was 8% higher compared to August. Two other fertilizers were slightly higher compared to a month earlier; MAP and UAN28.
 
Leading the way lower once again was urea, which slid 8% in the last month and dropped $167/ton since Memorial Day.  Three other fertilizers were also less expensive but just slightly lower: DAP, potash, and UAN32.

On a price per pound of nitrogen basis, the average urea price was at $0.65/lb.N, anhydrous $0.51/lb.N, UAN28 $0.69/lb.N and UAN32 $0.65/lb.N. (Source DTN)

RENEWABLE FUEL STAKEHOLDERS JOIN FORCES TO DEFEND RFS…..A large coalition of advanced and traditional renewable fuel stakeholders have joined forces to “defend America’s Renewable Fuel Standard and its benefits to our nation’s economy, domestic energy supply and national security”.

The launch comes as the U.S. Environmental Protection Agency considers a request to waive the RFS, a move that coalition members stressed would have serious consequences for America’s rural communities, renewable technology innovators and energy independence.

Fuels America members include 25x25, Abengoa Bioenergy , ACORE, Advanced Ethanol Council, American Coalition for Ethanol, American Security Project, Biotechnology Industry Organization, DuPont, Growth Energy, National Association of Wheat Growers, National Corn Growers Association, National Farmers Union, National Sorghum Producers, Novozymes, POET and the Renewable Fuels Association.

The Fuels America campaign will be a national effort, including advertising, beginning in Washington DC and several states, including Colorado, Ohio, Delaware and Montana. Each state will have its own online platform reachable through FuelsAmerica.org and feature the stories of renewable fuel innovators and communities with a stake in maintaining the RFS.

ETHANOL TO RBOB GASOLINE SPREAD WIDENS…..Ethanol is currently trading at an 85-cent discount to the gasoline market, which is the widest price spread seen since spring 2012.

Corn futures prices have dropped over $1 per bushel in the last month, and this movement lower has not only reduced overall ethanol production costs at many plants, but also led to some plants resuming production levels as margins were improving. Traditionally, the wide discount to gasoline prices has been a boost for overall demand, but with ethanol supplies currently over 10% ahead of last year, even increased demand is not likely to spark price support in the ethanol market.

FOREST PRODUCT EXPORT CONFERENCE OCTOBER 30 AND 31….The Arkansas Farm Bureau Federation and Mississippi Farm Bureau Federation would like to invite you to participate in our Forest Product Export Conference. With more than 95% of the World’s consumers living outside the borders of the U.S., demand for wood products will grow much faster beyond our borders, which is why it is essential for producers to look beyond our borders and take advantage of the growing international markets. To register or for more information visit our website http://www.arfb.com/ag-markets-statistics/forestry.aspx


USDA LOWERS OLD-CROP CORN STOCKS, RAISES SOYBEAN STOCKS….Going against market expectations, USDA's quarterly stock numbers dropped old-crop corn stocks to 988 million bushels, pegging it at just 7.3% of total supply from the 2011-12 crop, the lowest percentage of quarterly corn stocks since 2004.  Friday's USDA reports could be considered bullish for corn and wheat and bearish for beans.

USDA EXPLORES PARTNERSHIPS IN BUDGET CRUNCH…..With the future of the farm bill hanging in the balance and concerns that federal funds may become more scarce for conservation programs, federal agencies are trying to get the most bang for the buck on programs designed to address Mississippi River watershed challenges.

Ann Mills, deputy undersecretary for natural resources and environment at USDA, said "We've known for a number of years that there will be farm resources out there. We can't look to states because they have their budget challenges as well. How do we invite private groups to find common interests and to mutually benefit? I think you're going to see a boon of public/private partnerships. We are always ready and willing to listen to new ideas."

Mills said U.S. agriculture faces a number of big challenges including finding ways to adapt to a changing climate, to sustain its natural resource base, and maintain and improve water quality, all while feeding a growing population. Although farmers have made progress in reducing nutrient runoff in recent decades, she said some 42% of rivers and streams in the U.S. are not considered to be in good condition.

"We do think conservation makes economic sense," Mills said. "But how do you engage farmers to convince them? We need additional farmers for them to do it. "If at the end of the day farmers can't afford to do it, it doesn't matter."


EFSA PUBLISH PRELIMINARY GM CORN STUDY NEXT WEEK
…..The European Food Safety Authority said Wednesday it will publish next week a preliminary review of a study which alleges a genetically engineered corn made by Monsanto Co. causes cancer. The EFSA said a multi-disciplinary task force will analyze the paper from the University of Caen in France and publish an initial scientific review as the first step in a two-stage process.

ARKANSAS FORESTRY COMMISSION (AFC) SUMMER FIRE SEASON REPORT…The AFC fought some 1,177 fires in June, July and August, compared to the 10-year average of 365 fires over the same time period.  Just a hand full of these fires was over 100 acres and only 2 fires exceeded 1,000 acres (Yell and Drew Counties).

                              Number of Fires    Acres Burned       Average Fire
2012                             1,177                   20,866                17.7 acres
10-year Average           365                      3,902                 10.7 acres

The single engine air tankers (SEAT) and the National Guard Blackhawk Helicopters proved vital this summer as they made a combined 681 drops on some 88 fires. The SEATs saves some 477 structures (169 homes and 278 outbuildings), while only 130 structures were lost due to fire this summer.

AFC SEEKS ADDITIONAL REVENUE IN 2013 LEGISLATIVE SESSION
... The AFC has drafted a bill to increase the fire protection fee on timberland from 15-cents per acre to 25-cents per acre.  They are currently seeking sponsors for the bill.  Farm Bureau policy currently only support a 5-cent increase.

Additionally the AFC will be seeking an increase in their budget from general revenues during the next legislative session.  They are looking for around $1.8 million dollars to go to fund the tanker program in the interim before a proposed tax is implements and also do some much needed repair on equipment after this trying fire season, as well as hire some new employees.

HOUSE BILL PUTS H-2A UNDER USDA….A group of bipartisan House members from New York introduced the “Family Farm Relief Act,” H.R. 6373, which would transfer oversight of the current H-2A farm worker program from the Department of Labor to the U.S. Department of Agriculture (USDA).  The effort, led by Rep. William Owens (D-N.Y.), also makes a series of reforms to improve the H-2A program for producers that rely on it for farm labor.
 
The bill provides for an electronic filing system for H-2A petitions and repeals or prohibits a series of regulations imposed on farmers through the program.  These include domestic workforce regulations as well as certain advertising and recruitment requirements.  The bill also specifically opens the program to certain dairy workers, who currently are barred from participation in the program.  The H-2A visa program allows farmers to hire foreign seasonal workers when domestic labor is unavailable.

FARM BUREAU CONTINUES ITS SUPPORT OF THE ILLINOIS RIVER WATERSHED
.....During its September 20th meeting the Arkansas Farm Bureau Federation board of directors approved a three-year commitment to contribute $2,000 a year to the Illinois River Watershed partnership beginning in 2013.

The contribution is to be designated as matching funds toward the Walton Family Foundation’s contribution to the Cave Springs Watershed Sanctuary.

FARM LABOR CONFERENCE NOVEMBER 16, 2012
…..One day conference seeks to assist those engaged in understanding the increasingly complex issues of hiring agricultural labor. Training will enhance the knowledge and understanding of the agricultural labor markets, policies and regulations.

Sessions include:
•    Nuts and Bolts of Agricultural Labor
•    Local vs. Migrant Labor Issues
•    Grower’s Perspective
•    Agricultural Labor Policy Update
•    Overview of Legal Issues by National Agricultural Law Center

Where: University of Arkansas Cooperative Extension Service Headquarters, 2301 South University Ave. Little Rock, AR 72204

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 www.FBVerify.com/Drive.  

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