The Grain News

4-10_image_1

 

Download April 2010

U.S. Farmers Looking at More Corn. A good crop year – as evidenced by the record U.S. corn crop last year – “gets farmers charged up and excited to producing another good crop,” said Dexter, Mo., farmer Jim Stuever in response to the U.S. Department of Agriculture’s Prospective Plantings report released March 31.

In the report, USDA said U.S. farmers intend to plant 88.8 million acres (35.9 million hectares), up 3 percent from last year’s 86.5 million acres (35.0 million hectares). It’s also about 3 percent more than 2008’s 86.0 million acres (34.8 million hectares).

If realized, the plantings figure would be the largest since 2007 when 93.5 million acres (37.8 million hectares) were planted – the most since the 1940s. USDA’s estimates are based on a survey of farmers conducted in early March.

“There is an optimistic feeling heading into planting,” Stuever said. “Corn market prices are stable and within reason, crop input prices are acceptable and farmers see more of an opportunity to produce a corn crop that yields well. Farmers see a good future in corn.”

Dan O’Brien, an agriculture economist with Kansas State University, said the planting intentions report raises market expectations for larger production and total supplies of feed grains – although things can certainly change depending on weather during planting and the growing season.

He noted that if the ratio between planted and harvested corn acres holds steady, 88.8 million acres of planted corn would result in a harvested area of 80.7 million acres. With an average U.S. corn yield of 160.9 bushels per acre that USDA used at its outlook forum earlier this year, U.S. corn production in 2010 would equal 12.99 billion bushels (330 million tons), O’Brien said.4-10_image_2

While weather can influence final planting numbers – USDA will provide figures on actual plantings June 30 – the general trend is for farmers to match or exceed USDA intentions when it comes to planting corn.

Stuever, a board member of the Missouri Corn Growers Association, said with last year’s record corn production of 13.1 billion bushels (333 million tons), which will leave a 1.8 billion bushel (45.7 million tons) carryout at the end of this marketing year, any concern about the corn supply should ease.

“Even though corn demand has been positive, including by the domestic ethanol and feed sectors, as well as exports, a lot of corn remains in the countryside,” he said.

In fact, USDA’s March 31 Grain Stocks report noted that 7.7 billion bushels (195.6 million tons) of corn were in storage across the United States as of March 1. That’s an increase of 11 percent over last year.

O’Brien said corn usage during December 2009-February 2010 was up from the prior year but was lower than expected.

He noted that if low corn test weights resulting from late maturity and poor harvest conditions in the United States last fall were to impact corn usage, the impact would have shown up in the report. “The December-February usage figure seemingly does not reflect any significant impact on usage from light corn test weights or poor quality in the 2009 U.S. corn crop,” he said.

 

U.S. Grains Council Marking Five Decades. Some of the best story lines involve tragedy and circumstance, where, in the final chapter, all the seemingly independent story angles come together in a grand conclusion. Certainly this is the case with the story of how the U.S. Grains Council came to be – but in this story, the conclusion was only the first chapter in a tale that now spans five decades.

In December 1958, the U.S. Foreign Agricultural Service (FAS) and the Grain Sorghum Producers Association (GPSA) laid the initial groundwork of market development, and in 1959 the two began activities throughout Europe via an office in Rome.

In late 1959 two unplanned events occurred that would greatly expand the FAS/GPSA efforts.

First was a devastating typhoon that did considerable damage in the Yamanashi prefecture in Japan – the largest producer of pork in the nation. This spawned a donation of 36 breeding swine from Iowa to the prefecture that was organized by the Iowa Corn Growers Association. This became known as the “hog lift,” as the animals were flown from the United States to Japan, where the total number of progeny from the original 36 animals reached at least 500,000 over the next nine years.

4-10_image_4Along with the hogs went a donation of 60,000 bushels (1500 tons) of corn.

Second was a telephone call from the Japanese embassy in Washington, D.C., to FAS. By chance, two GPSA members were visiting FAS that day, and when asked if the United States could supply feed grains to Japan, the GPSA members gave assurance that U.S. farmers would certainly be able to do so. Trade teams from Japan began arriving in the United States to visit with farmers and examine farm fields soon after.

All of these independent story lines became well known and in the spring of 1960, they came together to create the first chapter of the U.S. Feed Grains Council – now known as the U.S. Grains Council. A charter was signed in a hotel room in Washington, becoming official on July 1, 1960.

Building relationships

The Council quickly came to understand that the best way to succeed was to promote the benefits of meat, milk and eggs to consumers and the benefits of feed grains and proper nutrition for livestock and poultry. This was revolutionary thinking and fit perfectly with Japan’s public health officials who wanted to improve consumers’ consumption of animal protein.

At the time, the Yamanashi prefecture and Iowa established a sister-state relationship, the first of its kind between Japan and the United States. It set an example the Council understood as imperative to its mission of developing markets, enabling trade and improving lives: building positive relationships.

So in 1961, the Council chose to establish one of its first foreign offices in Japan.

Partners-in-Agriculture

To celebrate the famous hog lift, 50th anniversary of the U.S. Grains Council and the 50th anniversary of the Iowa-Yamanashi sister-state relationship, the organizations and FAS developed “Partners-in-Agriculture,” a series of events to be held in Japan through May.

Roots of the U.S. Grains Council are often traced to a shipment of swine from Iowa to Japan in 1960 (shown here being unloaded in Japan). The “hog lift” was in response to a typhoon that devastated the Yamanashi prefecture in Japan. The donation created momentum to form the Council and long-lasting relationships between the two countries.

The focal point of the celebration took place in Kofu, the capital of Yamanashi prefecture, on April 8 and 9, while a Global Food Security Symposium is scheduled in Tokyo on April 7.

Details about Partners in Agriculture, including a history of trade between the two countries, can be found at www.partners-in-agriculture.org and www.partners-in-agriculture.org/jp (Japanese language version).

 

Grains Council Opens Office in Panama City, Panama. In a region where many people live below the poverty line, less expensive food can make a big difference in people’s diet and overall health. This is why, from its new office in Panama City, Panama, the U.S. Grains Council will strive to improve livestock production systems and reduce import duties on feed grains and co-products in Latin America and the Caribbean Region.

Director of the new Latin America and Caribbean Region office is Council veteran Kurt Shultz, who has been with the Council since 1999 and previously served for seven years as the Council’s regional director in the Mediterranean and Africa. Prior to his assignment in the Mediterranean and Africa, Shultz covered Latin America from the Council’s headquarters in Washington, DC.

Shultz said having an office in Latin America will allow the Council to work more closely with those in the region and develop more detailed strategies to develop programs that will enhance trade opportunities for U.S. farmers and directly benefit people in the region.

“If we can develop programs to improve the efficiency of livestock production and promote more open trade to reduce import duties for feed grains and grain co-products, people in Latin America will benefit from lower food costs,” he said. “This is something the Council has seen in many areas, and we hope to make progress here, too.”

4-10_image_3The Council chose Panama because of its central location in the region, with direct flight connections to most countries in Central and South America. The Panama Canal also provides opportunities to highlight the importance of freight and shipping in a global trade.

“Having an office in the region will help us better communicate with customers of U.S. grain and co-

products,” he said. “Communication and building trust and long-term relationships is fundamental to the Council’s mission to develop markets, enhance trade and improve lives.”

Shultz said expanding trade – expanding opportunities for people in the region and for U.S. farmers – needs to be done through trade agreements.

Rick Fruth, chairman of the Council, said the failure of the United States to ratify pending free trade agreements in the area is causing a reduction in U.S. exports. “It has had a consequential effect on the economic development of our friends and allies in the Latin American region,” said Fruth, referring to the U.S.-Colombia Trade Promotion Agreement (CTPA).

CTPA was approved by Colombia but has not yet been ratified by the United States.

Don Fast, a barley producer from Montana and secretary of the Council’s Board of Directors, said there is a negative impact from an un-ratified CTPA. “The reluctance of the U.S. Administration and Congress to pass the CTPA already approved by Colombia is responsible for directly increasing the cost of food products to the Colombian people,” he said.

Shultz said Council programs to improve the production, availability and affordability of animal proteins can be successful only if there is access to a reliable supply of feed grains and grain co-products like distiller’s dried grains with solubles. “Trade agreements and partnerships are the fastest ways to accomplish this,” he said.

 

U.S. Farmers May Plant Less Barley, Sorghum. In its March 31 Planting Intentions report, the U.S. Department of Agriculture said U.S. farmers intend to plant some 3.3 million acres (1.3 million hectares) of barley in 2010. If that estimate holds, barley acres will fall by some 8 percent from last year’s 3.6 million (1.5 million hectares) – and would be well below 2008’s 4.2 million acres (1.7 million hectares).

U.S. barley stocks as of March 1 totaled some 157 million bushels (3.4 million tons), an increase of 22 percent from March 1, 2009, even though barley use increased about 12 percent during the December 2009-February 2010 period when compared to the prior year.

U.S. barley supplies remain positive thanks to last year’s good crop of 227 million bushels (4.9 million tons). In fact, USDA estimated a carryout of 111 million bushels (2.4 million tons) of barley at the end of the current marketing year.

As for sorghum, USDA said U.S. farmers intend to plant some 6.4 million acres (2.6 million hectares) this year, a decline of about 4 percent from last year’s 6.6 million acres (2.7 million hectares), should those intentions hold.

Grain sorghum in storage as of March 1 totaled 175 million bushels (4.4 million tons), down 15 percent from last year. This reduction echoes a 383 million bushel (9.7 million tons) harvest last fall that was below the 472 million bushels (12.0 million tons) harvested in 2008.

USDA estimated that the sorghum carryout would total about 48 million bushels (1.2 million tons) at the end of the current marketing year. That compares to a carryout of 55 million bushels (1.4 million tons) a year ago.

We're Here to Help

Get your questions answered today. Contact the U.S. Grains Council at 202-789-0789 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it.