~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Oklahoma's latest farm and ranch news
Your Update from Ron Hays of RON for Friday November 19, 2010A service of Johnston Enterprises, P & K Equipment/ P & K Wind Energy and American Farmers & Ranchers Mutual Insurance Company!
-- FDA Food Safety Modernization Act Nears Final Vote
-- OSU Grain Economist Joins Other Market Watchers in Scratching Their Heads Over Recent Market Moves
-- NCBA Speaks Out on Proposed GIPSA Rule
-- National Pork Producers Also Getting Comments in on GIPSA Rule- They Call It a Bureacratic Overreach
-- Groups Pushing GIPSA Rule Plead Their Case to Congressional Staffers
-- Despite Recent Dollar Climb, U.S. Wheat Remains Competitive
-- Friday Facts- We Shout Out to Randy Boman, Steve Damron and OFB
-- Let's Check the Markets!
Here's your morning farm news headlines from the Director of Farm Programming for the Radio Oklahoma Network, Ron Hays. We are pleased to have American Farmers & Ranchers Mutual Insurance Company as a regular sponsor of our daily update- click here to go to their AFR web site to learn more about their efforts to serve rural America!
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FDA Food Safety Modernization Act Nears Final Vote
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~It might come this weekend- but more than likely, the US Senate will go home and have turkey and dressing and the rest of the fixings- then return after Thanksgiving and vote on landmark Food Safety legislation. The biggest sticking point seems to be the so called Tester Amendment, which would excuse smaller producers of food marketed from the farm to local outlets from being subject to the heavy hand of the federal government. Smaller processors say that if they have to comply with the new rules, it could put them out of business.
Proponents of the "local food" movement are supportive of the Jon Tester proposal. The Tester Amendment is strongly opposed by the major fresh fruit and vegetable groups in the country. The United Fresh Producers Association said the amendment proposed by US Senator Jon Tester of Montana would "reject a risk-based approach to food safety" and lead to the creation of a federal food safety system that "adheres to arbitrary exemptions rather than to sound scientific principles".
Robert Guenther of United Fresh Produce says "We are appalled at statements by Senator Tester reported today in the Capital Press that "small producers are not raising a commodity, but are raising food". Industrial agriculture, he said, takes the people out of the equation. This is simply hogwash, and should insult not only the farmers of America, but the intelligence of members of Congress."
It is unclear when the Senate would finish work on the bill. If it
passes, it would have to be merged with a House-passed bill, or the House
would have to approve the Senate bill as is. One other complication to
passage is the demand by Oklahoma Senator Tom Coburn that the Senate
should find an offset to pay for this new piece of regulation. Given the
mood in Congress to push everything they can to the new Congress- a Food
Safety Bill may not make it through the Lame Duck.
OSU Grain Economist Joins Other Market Watchers in Scratching Their Heads Over Recent Market Moves
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The crazy moves up and then down in the recent ag commodity markets does not reflect any ties back to the fundamentals of the market, but rather several outside forces that include the intentions of the Commodity funds that have held huge stakes in the agricultural markets off and on in recent years.
OSU Grain Marketing Economist Dr. Kim Anderson tells Austin Moore with the weekly OSU Ag Communications produced SUNUP program that some of the jetters that we see in the market may be traced back to fears that the Commodity Funds may be ready to liquidate their positions, which could be a major shock to the ag markets.
We've got Kim and Austin talking about the latest grain market conditions at the LINK below. We also have the complete rundown of this week's SUNUP with Lyndall Stout and her team that will be seen on OETA Saturday morning at 7:30 AM. Check it out.
NCBA Speaks Out on Proposed GIPSA Rule
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The National Cattlemen's Beef Association has submitted comments to USDA on behalf of its membership, concerning the proposed rule on livestock and poultry marketing, as presented by USDA's Grain Inspection, packers and Stockyards Administration. NCBA vice president of government affairs, Colin Woodall, says comments, as submitted, represent a thorough review of the potential consequences the proposed rule will have on the U.S. beef cattle industry.
According to NCBA, provisions in the proposed rule causing the most concern for cattlemen and women include: eliminating the requirement that a plaintiff establish injury to competition in order to prove a claim, purport to define "competitive injury" and the likelihood thereof, and declare that specific acts or practices are "unfair, unjustly discriminatory or deceptive; suggesting the factors which may establish an undue or unreasonable preference; prohibiting sales of livestock by a packer to another packer or its affiliates; and requiring the production and publication of all cattle marketing and production contracts.
Woodall called the proposed rule - a pervasive invasion of government into private business. A report recently commissioned by several organizations in the meat industry, found that the rule would result in ongoing direct and indirect costs to the livestock and poultry industries - eventually borne by producers and consumers - of more than 1.64-billion dollars, including nearly 880-million to the beef industry.
National Pork Producers Also Getting Comments in on GIPSA Rule- They Call It a Bureacratic Overreach
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A U.S. Department of Agriculture agency lacked authority or exceeded it on certain provisions of a proposed rule on buying and selling hogs, failed to support the need for the regulation with evidence of problems in the pork industry and didn't consider its own studies showing that restricting contracts could harm the industry, said the National Pork Producers Council in comments filed today on the so-called GIPSA rule.
In its comments, NPPC, which has called the regulation a "bureaucratic overreach," said that GIPSA lacked authority to, for example, declare that no showing of injury to competition is necessary to establish a violation of the PSA. It pointed out that federal courts have uniformly rejected that view and that Congress rejected a similar provision during debate on the 2008 Farm Bill.
"In all my years in the pork industry, I have never seen a regulation
proposed that would do as much harm to America's pork producers as the
GIPSA rule would do," said NPPC CEO Neil Dierks. "There's no justification
for imposing this rule on pork producers. It's based on anecdotes, not
Groups Pushing GIPSA Rule Plead Their Case to Congressional Staffers
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Group supportive of the so called GIPSA Rule banded together this week under the banner of the "Competition Coalition" and sponsored separate briefing sessions for House and Senate congressional offices this week to explain why the GIPSA rule is needed to restore transparency and fairness to livestock and poultry markets accessed by the nation's family farmers and ranchers.
Groups that sponsored the congressional briefings in support of the GIPSA rule included: R-CALF USA, National Farmers Union, National Family Farm Coalition, Rural Advancement Foundation International-USA (RAFI-USA), Land Stewardship Project, Western Organization of Resource Councils (WORC) and the Organization for Competitive Markets (OCM),.
Bob Mack, a cattle feeder and cow/calf producer from Watertown, S.D., told nearly 60 congressional office staffers that the marketplace should produce winners and losers based on who does the best job and who is the most efficient, not based on decisions by just two or three meatpackers positioned to pick winners and losers by rewarding some producers and discriminating against others. Mack said the GIPSA rule makes sure that packers follow the rules of the market. "All we want are fair rules for everyone and a referee," he said. "From my perspective, this rule (the GIPSA rule) makes sure the rules are followed."
Among the questions raised by congressional offices was how packers could possibly justify different prices for livestock, as required by the GIPSA rule. Mack explained that the industry is already providing such justification. He said a simple review of USDA's market reports show that USDA already provides notations to explain why different prices are paid for seemingly similar animals. "Our industry already uses common terms like 'fleshy,' 'green,' 'heavy,' and 'full' to explain price differences," he said. "The market records required under the GIPSA rule already are being generated in the normal course of the meatpackers' purchasing transactions, and all the GIPSA rule does is require the packers to maintain those records."
Despite Recent Dollar Climb, U.S. Wheat Remains Competitive
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Chad Weigand, US Wheat Associates Market Analyst, says that recent currency movements have had a significant impact on wheat prices. On Nov. 4, the ICE Dollar Index, which measures the dollar against six major currencies, was on a downward trend and hit its lowest point since last December, providing a distinct advantage to U.S. wheat prices on the global market. This week, however, the trend has reversed due to concerns over the EU economy and discussion of a tighter Chinese monetary policy. This news has provided strength to the U.S. dollar, pushing the dollar index to its highest level since late September. Despite the recent strength in the dollar, U.S. wheat prices remain competitive in the global market.
He adds that EU wheat prices have become more competitive due to the recent fall in the euro, which reached a seven-week low against the dollar on Wednesday. However, the rapid pace of EU exports, which are up by more than 30 percent from last year, has substantially decreased EU supplies and underpinned prices. The difference between U.S. and EU prices is evident by the spread between the Chicago Board of Trade (CBOT) and Matif futures prices. The nearby contracts for the CBOT and Matif markets traded at near parity as recently as August, but have steadily grown apart as the EU faces dwindling supplies. As of Nov. 17, CBOT wheat futures traded at a $56 per metric ton (MT) discount to Matif futures, the widest spread since mid-2007. While the spread in FOB cash prices is less dramatic, U.S. HRW 11 percent protein is currently trading at approximately a $15 per MT discount to French 11 percent protein wheat, with U.S. HRW at $275 per MT compared to $290 per MT for French wheat.
U.S. wheat prices also currently have an advantage against southern hemisphere supplies. Data from the Buenos Aires Grain Exchange shows Argentine wheat currently trading at $300 per MT on a FOB basis. In Australia, the strong Aussie dollar, which reached a 28-year high against the U.S. dollar on Nov. 5, has kept Australian wheat relatively more expensive on the global market. While the Aussie dollar has softened slightly since Nov. 5, it remains at historical highs (see chart below). In the latest tender by the Egyptian General Authority for Supply Commodities, U.S. wheat came in at the lowest offer, $8 per MT less than the lowest Australian offer of $301 per MT. Despite a rapid export pace, U.S. exporters continue to find both the wheat and the export capacity to make new sales at competitive prices.
Friday Facts- We Shout Out to Randy Boman, Steve Damron and OFB
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Dr. Randal Boman is the new Research Director and Cotton Extension Program Leader for the Southwest Research and Extension Center at Altus. Dr. Boman comes to us from Texas Agri-Life Extension at Lubbock, Texas where he currently serves as Professor and Cotton Extension Agronomist. Randy was born in Frederick, OK and received all three degrees (B.S., M.S. and PhD.) from OSU. He will be filling the position vacated by Dr. J.C. Banks' recent retirement.
Randy won't be joining OSU until March first of next year- but I have worked with him when we covered the Texas cotton industry in another life- and he is a tremendous addition to the OSU team!!!
Oklahoma State University's Steve Damron has been named the 2010
Oklahoma Professor of the Year by the Carnegie Foundation for the
Advancement of Teaching and the Council for Advancement and Support of
Our In the Field guest for Saturday morning will be Tyler Norvell of the Oklahoma Farm Bureau- and we will be talking about the policy process of the OFB at their annual convention that is getting underway today and running through Sunday midday. Tyler is the new Vice President for Public Policy for the Oklahoma Farm Bureau, taking the slot that has been held in recent years by Lori Peterson. Join us for our In the Field segment with Tyler if you can on KWTV, News9 at 6:40 AM on Saturday morning- we'll be posting an audio conversation with Tyler later on today with him on our website at www.OklahomaFarmReport.Com.
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Let's Check the Markets!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~We've had requests to include Canola prices for your convenience here- and we will be doing so on a regular basis. Current cash price for Canola is $8.70 per bushel- as of the close of business yesterday, while the 2011 New Crop contracts for Canola are now available are $9.50 per bushel- delivered to local participating elevators that are working with PCOM.
Here are some links we will leave in place on an ongoing basis- Click
on the name of the report to go to that link:
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