The Grain News

Grain News: January 2010

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Dorr First New President, CEO at U.S. Grains Council in Nearly 20 Years

For the first time in nearly 20 years, the U.S. Grains Council has a new president and chief executive officer.

Ken Hobbie stepped down from those positions in the last quarter of 2009. Thomas C. Dorr, a former farmer from Iowa and rural development leader at the U.S. Department of Agriculture, was named as the president and CEO.

Dorr grew up on a family farm in Iowa, spent three years working off the farm after college only to return in 1971, spending the next three decades building a family operation that included corn, soybeans, livestock and a small county elevator.

Early in his farming days, however, he became acquainted with the U.S. Feed

Grains Council – the U.S. Grains Council’s predecessor – when he worked to get the first voluntary corn checkoff in the United States passed.

“When I came back to the farm, I had the opportunity to serve with the Iowa Corn Growers Association to get the corn checkoff passed,” Dorr said.

The first two ballots failed. In 1976, though, the U.S. Feed Grains Council invested in the effort, giving Dorr and other supporters the opportunity to speak at farmer meetings and field days ahead of a vote in 1977. That third vote passed by one-half of one percent and Iowa had the first voluntary corn checkoff in the country.

“That’s how I got involved in the Iowa Corn Growers and the corn checkoff,” Dorr explained. “What is marvelous about the checkoff is that it is still voluntary and member-driven with a high level of accountability on how those funds are used, whether to support the Council’s efforts or other organizations. It is a tremendous program.”

Dorr said during that time he became well acquainted with the Council and believes that, over the years, it “has done a stellar job in international market development work.”

Yet the Council is more than just developing markets, he said.

“The U.S. Grains Council is a remarkable model for not only moving grain, but for facilitating the transfer of knowledge – political, business, trading, pricing systems, financial systems and more,” he said. “It’s an extraordinary tool to increase economic opportunities and improve the quality of life around the world.”

In his thirtieth year of farming, Dorr was invited to work at the U.S. Department of Agriculture – to become immersed in renewable energy and rural development. He worked for four Secretaries of Agriculture, including Ann Veneman and Mike Johanns, during his time as Undersecretary for Rural Development. He left USDA in 2008.

Agriculture Technology

In 1990, Dorr hired a young man right out of college who knew very little about agriculture, but was a wiz with computers. The goal was to develop a field mapping program for his farm.

“By 1999 we were using real-time GPS mapping for every field we farmed,” he said. “It allowed us to develop procedures that would increase production and reduce the environmental impact of farming.”

At the same time, he said, biotechnology in agriculture is working in similar ways.

“Biotechnology allows a broader and less onerous pesticide protocol to control weeds and enhanced tolerance to pests enables corn plants to develop much more robust roots and vegetation,” he said. “That equates to more vigorous and better plant structures that are capable of producing more grain and better quality grain.”

All in all, he said, biotechnology is “a remarkable story,” having helped farmers reduce soil erosion, pesticides applied per acre, the water required per bushel and the amount of fertilizer needed per bushel.

“Clearly biotechnology is enhancing the environment,” Dorr said. “It’s also allowing farmers around the world to produce high quality feedstuffs that enable burgeoning populations to have access to a higher standard of living in a cost effective manner.”

The U.S. Grains Council, he said, has positive relationships around the world and can help tell the story of technology and agriculture.

“I feel very fortunate to be at the Council to help further this and other stories,” he said. “We are a reputable and honest broker of knowledge and information, and we are coming into a new age of agriculture that is exciting and full of opportunities.”

U.S. Produces Record Corn Crop, but Quality Being Closely Watched

he 2009/2010 U.S. corn crop, while late getting planted and harvested, held together well and allowed farmers to produce the largest corn crop in history.

According to the U.S. Department of Agriculture’s January 2010 report, U.S. farmers produced some 13.2 billion bushels (335.3 million metric tons) of corn, which should grow ending stocks from the previous year and prices stable.

“Spring was difficult, the growing season was drawn out because of cool weather and then weather delayed harvest and didn’t give the crop a chance to dry down in the field,” said Rob Elliott, a farmer from Monmouth, Ill. “While 2009 was perhaps one of the ugliest years in my history of farming, we produced excellent yields anyway.”

However, with generally outstanding yields come concerns about crop quality. This is due in part because of the late, wet harvest of a crop that had not consistently reached maturity and because so much of the crop had to be run through dryers in order to prepare it for storage.

“Farmers and grain elevators knew this was coming and prepared well,” Elliott said.

 “We took some extra precautions to help maintain grain quality on our own farm,” he said.

Some of those precautions included running corn through a screen to remove more fines, which helps to improve airflow during drying and storage.

While there were concerns over mold in the field, Elliott said those were generally isolated and were not a big issue. “Anytime you have a situation like that, it tends to get more press than reality,” he said. “The big concern wasn’t mold, it was getting the crop dried down for storage.”

Dr. Charles Hurburgh of Iowa State University said mold simply counts as damage in the grain and not all mold is an issue. While aflatoxins could be of concern, it turns out they are not a problem this year because aflatoxin has not shown up in testing, he said.

“Grain importers who are concerned, though, can ask for an official GIPSA vomatoxin test on a sublot basis,” Hurburgh said. “It’s affordable assurance.”

While there are no standards on vomatoxin, buyers for swine and poultry operations should be able to know what levels they will accept, he said. If not, the Grains Council may be able to help.

Export specifications are generally for No. 3 yellow corn, which has a maximum of 7 percent damage and a minimum test weight of 52 pounds.

“Most years, there simply isn’t that much No. 3 corn around, so export shipments do not approach those limits and contain a lot of No. 2 corn,” Hurburgh said. “That will be different this year because there is more No. 3 corn in the countryside than No. 2. Buyers need to understand that.”

He said buyers may want to consider lowering the moisture specification in the grain contract to 14 percent, which will help ensure the corn maintains its quality during transit. “Any dryer and the grain will be more prone to breaking and cracking,” he said. “It is also possible to spec No. 2 corn, but because there is not as much of this corn around this year, it will likely be very expensive.”

Elliott said local and commercial grain handlers are much better at managing grain, including lower test weight grain.

As a result, he said he expects there will be few grain quality problems provided everyone monitors grain in storage as they should.

“The corn plants we grow today stayed upright and healthy despite poor conditions,” he said. “That helps ensure grain is healthier going into the bin – we just need to ensure it stays that way.”

Solid Barley, Sorghum Crops in Good Condition

While there were some unseasonably late rains in some barley-producing areas of the United States, farmer Dan Mader from Genesee, Ida., said the rains actually helped the crop in his state finish well.

“The crop was plump and the grain was very high quality, as good as we’ve seen in a long time,” Mader said. “Yields were also good, up considerably from the last two years.”

He noted that spring was late this year, which delayed the crop initially. In addition, planted acres were lower due to competition from other crops.

 “The late rains and good yields offset some of the drop in planted acres,” he said, “leaving us with a big crop that will increase ending stocks and may pressure prices depending on global markets.”

According to a recent report from the U.S. Department of Agriculture, U.S. barley production is estimated to be 227 million bushels (5.8 million metric tons), compared to 240 million bushels (6.1 million tons) last year.

While more than 75 percent of Idaho’s barley crop is malting varieties, the rest is feed varieties, and a sizeable amount of that is exported. Mader said a portion of the crop is contracted, typically malting barley, while feed barley is generally sold on the market. “We’re also seeing some interest in specific food varieties and may grow some on contract in 2010,” he said.

U.S. sorghum production is estimated to be 383 million bushels (9.7 million tons), which is a smaller crop than last year due to reduced overall plantings, although yields were very high.

According to USDA, demand for U.S. sorghum will fall within the United States but exports should hold steady.

Good yields will allow stocks to climb to 58 million bushels (1.5 million tons), compared to 55 million bushels (1.4 million tons) last year, but USDA estimates that prices will hold mostly steady.

One sorghum trader noted, however, that sorghum prices are difficult to predict because should demand increase at all, prices could move up significantly.

“Alternatively, if another global supplier produces a big crop, prices could soften,” he said.

When harvest time arrived, U.S. sorghum producers faced the same situation as U.S. corn farmers (article, p. 1) – a wet crop that wouldn’t dry down in the field. That meant more of the crop had to go through dryers before storage.

“There are no quality problems with sorghum right now. It all looks good,” the trader noted. “Sorghum should store well over the winter and can always be dried further when weather warms up in the spring.”

He said U.S. sorghum typically ships overseas at 14 percent moisture unless requested differently by the buyer. At 14 percent, the grain will store and ship well.

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