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Ongoing Agricultural News and Information
---PROPOSITION 2 SUPPORTERS SUE AMERICAN EGG BOARD, USDA---A group led by Farm Sanctuary and the Humane Society of the United States has filed a federal lawsuit against the American Egg Board and the Agriculture Department over what they claim is an unlawful expenditure of $3 million of Egg Board funds to campaign against Proposition 2, the California ballot initiative that addresses farm animal housing.
The lawsuit claims the Egg Board adopted a motion at its fall meeting last year that the $3 million be held in reserve to assist opponents of Proposition 2. However, the Egg Board said this is based on an inaccurate report in a trade publication, and the board
adopted no such motion.
Its board did pass by unanimous vote a motion to hold the money in reserve "for a consumer education campaign to educate the public about current production practices." The motion does not specify any one state and does not suggest any kind of lobbying or other efforts to influence policy.
Proposition 2 would make cage housing illegal in egg production, which, if passed, would end nearly all egg production in California.
See the article in the San Francisco Chronicle.
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---BUSH NOT WILLING TO QUIT ON WORLD TRADE TALKS---Agriculture Secretary Ed Schafer said President Bush still believes a world trade deal is possible despite a major setback last month and will continue to push to get one, according to a Reuters article.
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---DEERE RESULTS DISAPPOINT WALL STREET---Deere & Co. turned in fiscal third-quarter earnings that disappointed Wall Street on Wednesday with surging raw-material prices also pointing to weaker fourth-quarter profit numbers, according to an article in the Chicago Tribune.
Merrill Lynch analyst Andrew Obin said Deere’s third quarter miss was driven by the construction and forestry and commercial and consumer divisions as well as a slightly higher tax rate. The agricultural equipment division did not have enough operating leverage to offset weaker than expected performance in the other divisions.
“While Deere’s miss in the quarter is a disappointment, we attribute it to timing of rising raw material costs and pricing rather than any structural issues,” Obin wrote in a Wednesday research note. “We think that the company is very well positioned going into 2009 to recoup higher costs with pricing as the ag cycle remains very strong.”
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---OLYMPICS HELP CURTAIL CHINESE PORK CONSUMPTION---The Olympic Summer Games in Beijing are contributing to decreased pork consumption in China as citizens stay home to watch television, avoid restaurants in Beijing and have fewer street hawkers from which to buy pork snacks as China attempts to puts its best foot forward for tourists, according to an article by Joel Hagard, the U.S. Meat Export Federation’s senior vice president, Asia Pacific Region.
As a result, huge volumes of imported pork and poultry products have stacked up in Chinese cold stores, with some facilities reporting 100 percent capacity. National distribution of imported pork has also been slowed by the Olympics, due to increased roadway security.
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---OLYMPIC CHAMPION FUELS ON 12,000 CALORIES A DAY---An article in the Melbourne Herald Sun reports that Olympic Gold metal swimmer Michael Phelps consumes up to 12,000 calories per day to fuel his grueling regimen, with fried-egg sandwiches a favorite.
Also, according to an article in the United Kingdom Times, when asked what he needed to continue his gold-medal winning streak, Phelps said, "Get some calories into my system and try to recover the best I can."
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---CORN CROP PEGGED AT 12.3 BILLION BUSHELS--- Despite June’s severe flooding in the Midwest, farmers are on pace to produce the second largest corn crop and the fourth-largest soybean crop in history, according to the Agriculture Department’s World Agricultural Supply and Demand Estimates (WASDE) released today.
USDA’s first survey-based forecast for 2008 pegs U.S. corn production at 12.3 billion bushels, up 573 million bushels from last month’s projection with higher forecast yields and increased harvested area. The 12.3 billion bushel figure is a tad higher than the 11.94 billion bushel figure that analysts were projecting. Last year, corn farmers harvested a record 13.07 billion bushels.
Based on conditions as of Aug. 1, corn yields are expected to average 155 bushels per acre, up 3.9 bushels from last year. If realized, this would be the second-highest corn yield on record, behind 2004.
USDA pegs U.S. soybean production at 2.973 billion bushels, down 27 million from the July projection, but 388 million bushels above last year’s crop. The 2.973 billion bushel figure is right in line with the 3 billion bushel figure analysts were predicting. Soybean yields are expected to average 40.5 bushels per acre, down 0.7 bushels from 2007.
All wheat production is pegged at 2.46 billion bushels, virtually unchanged from the July forecast but up 19 percent from 2007. Based on Aug. 1 conditions, yield is forecast at 43.5 bushels per acre, unchanged from last month but 3.0 bushels above last year.
All cotton production is forecast at 13.8 million bales, down 28 percent from last year. Producers expect to harvest 7.85 million acres of cotton, the lowest harvested area since 1983 and 25 percent below last year.
You can access the full WASDE report by clicking here.
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---CROP ASSISTANCE DEADLINES LOOM---Two important deadlines are looming for Farm Service Agency crop protection assistance. The first, Sept. 16, is the deadline for producers to sign up for new permanent disaster programs which are more comprehensive than past programs that took an ad-hoc approach.
The 2008 farm bill requires producers who wish to participate in the new disaster program to have crop insurance or non-insured crop disaster assistance coverage for the land for which assistance is being requested, and for all farms in all counties in which they have an interest. Because the law was enacted after the application period had closed for those programs, a waiver was authorized that allows producers to pay a “buy-in” fee to be eligible for this new disaster assistance.
The second deadline is Sept. 30 for producers to sign up for the 2008 Direct and Countercyclical Payment Program, which helps deliver certainty for the crop year and the option of a timely disaster payment.
For more information, access the Farm Service Agency Web site.
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---NEBRASKA BEEF LTD. CONTINUES PRODUCTION---Production continues at Nebraska Beef Ltd., which issued its second beef recall in two months just a few days ago. Stepped up testing and increased oversight have been implemented at the plant.
According to a representative of the company, testing indicates no E. coli bacteria have been found in products made since July 8.
On Friday, the company recalled 1.2 million pounds of its beef products that may be contaminated with E. coli O157:H7 and might have sickened 31 people in 12 states. Several retailers including Whole Foods Market and Kroger Co. have recalled beef products associated with the company.
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---MOODY’S ISSUES GLOOMY FORECAST FOR U.S. FOOD INDUSTRY---Moody’s Investors Service has rated the outlook for the U.S. food industry as “negative” for the next 12 months to 18 months. Analysts with the firm made the projection based on expectations that 2009 commodity prices will further surpass historical averages resulting in pressure on profit margins and putting cash flow at risk for most companies.
“Profit margins will continue to contract as most speculative-grade food companies struggle to pass on rising commodity costs to consumers,” Brian Weddington, vice-president and senior analyst with Moody’s, told the Meat & Poultry Journal.
However, Weddington also told the journal there could be some commodity price relief in the coming year due to a softening global economy that may weaken global demand.
In addition, the majority of investment-grade food companies “should be able to sustain fairly stable earnings next year under moderate commodity cost inflation,” according to Weddington. He noted that some companies are likely to continue to have difficulty passing on rising costs and will see a reduction in profit margins.
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