USDA’s final 2011 corn production estimate and the December 1 corn stocks numbers surprised the corn market. The March 2012 futures price declined by 52 cents per bushel in the two sessions following the release of the reports. According to Darrel Good, a University of Illinois agricultural economist, – part of the surprise came as a result of the average expectation of a smaller 2011 crop estimate. With the absence of any supporting evidence, it is not clear why, on average, analysts expected a 30-million-bushel reduction in the estimated size of the crop.

The remainder of the surprise is the result of incorrect expectations about the level of feed and residual use of corn during the first quarter of the 2011-12 marketing year. The market anticipated a high level of use. But, the surprisingly large estimate of September 1, 2011, stocks implied a very low level of feed and residual use during the final quarter and for the entire marketing year.

According to Good, the seasonal pattern and the total implied feed and residual use of corn during the 2010-11 marketing year is still troublesome. Explanations for the low level of use center on the potential for overestimating the amount of corn used to produce ethanol, increased feeding of distiller’s grains, and/or an underestimation of the size of the 2010 crop.

Good adds, – with year-ending stocks of U.S. corn still expected to be a relatively low 6.7 percent of projected use, a lot of price uncertainty remains.

Courtesy: NAFB News

If Congress gives the Obama Administration the green light to reorganize the government, asingle federal food safety agency is likely. If that happens, Office of Management and Budget Director for Management Jeff Zients believes – the first proposal will be to merge the six business-oriented agencies, folding together the Commerce Department’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency.

Following that a consolidation is expected of USDA’s Food Safety and Inspection Service with the food safety unit at the U.S. Food and Drug Administration. Obama administration officials are believed to be in favor of the merger because it would make food safety independent of USDA, which primarily exists to market and promote American farm products.  In all, 12 agencies are involved in food safety.

Food & Water Watch has come out against the move. Wenonah Hauter, Executive Director of F&WW – strongly urges against consolidating food safety functions of different government departments until much more progress is made to improve basic food safety protections. Other food safety groups, however, may see “consolidation powers” for Obama as a rare opportunity to achieve a long elusive goal.

Courtesy: NAFB News

Agriculture Secretary Tom Vilsack reports that during fiscal year 2011, Rural Development investments created or saved about 440-thousand jobs. These facts come from the Secretary’s report on USDA Rural Development fiscal year 2011 investments in job-creating businesses, infrastructure and housing for Americans living in rural communities across the nation.

In the federal fiscal year that ended on September 30, Vilsack said Rural Development, through its Business, Cooperative, Utilities and Housing programs provided housing opportunities for over 143-thousand families, upgraded community facilities, boosted the reliability of the electric grid, funded renewable energy projects, and supported efforts to provide affordable, reliable Internet service to rural homes.

The largest portion of FY 2011 funding, 63 percent, supported fee-generating loan guarantees that enabled private lenders to safely increase the pool of capital available in rural areas for credit-worthy businesses, communities and homebuyers, without direct cost to the Government. About 34 percent of Rural Development investments were made in the form of secure, affordable direct loans that will be paid back to the government, with interest.

Secretary Vilsack noted that the agency’s cost of doing business is less than two cents for every dollar invested in the future of rural communities.

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The Humane Society of the United States has purchased stock in fast food mogul CKE, in hopes of leveraging stakeholder engagement to influence animal rights.  Apollo Global Management, the parent company of CKE restaurants, has sold 325 stock shares to the animal advocacy organization. For its 4-thousand dollar investment HSUS is guaranteed certain privileges, including speaking up at shareholder meetings. The restaurants involved include: Carl’s Jr. and Hardees.

Through its’ stock ownership, the Humane Society of the United States hopes to abolish the small cages animals are forced to occupy. According to a HSUS News Release, – nearly all breeding pigs and egg laying hens used for Hardee’s and Carl’s Jr.’s products are confined in crates or cages that prevent the animals from moving more than a few inches for most of their  lives.

CKE currently runs 31,250 fast-food restaurants nationwide, serving millions of customers. HSUS says most of these customers – are very concerned about the treatment of animals.

Courtesy: NAFB News

We are still a month or so away from a decision by President Obama on the Keystone XL Pipeline but the effort to establish the public’s mind-set in Washington has already begun. Campaigns have been established on both sides of the pipeline issue. The pipeline has been under review for more than three years because it requires a federal permit from the State Department because it crosses an international border.

Presently Nebraska holds the last piece of the pipeline puzzle. Nebraska has reached an agreement with the pipeline’s owner, TransCanada, to change the pipeline’s rout, avoiding the Nebraska Sandhills region. Once the new rout is established TransCanada is ready to begin construction. But the President needs to make his declaration on the issue without knowing what the route around the Sandhills region will be.

Its supporters say the project would create jobs and provide the United States with a stable energy supply from Canada. Meanwhile, its foes say it will accelerate climate change by transporting energy-intensive crude oil that could spill and harm fragile habitat.

Courtesy: NAFB News

Speaking during a business roundtable meeting in Chicago Monday, Agriculture Secretary Tom Vilsack said the United States is particularly well positioned to transition to a broader bioeconomy, which includes production of aviation fuel in commercial quantities. He also pointed out that the American farmer has logged substantial productivity gains over time to meet growing demands for food and fiber and now biomass.

The Secretary also said a robust rural economy will result by implementing the Obama Administration’s vision for renewable fuel development which creates sustainable jobs by combining new markets, new technologies and better use of available natural resources. The roundtable was attended by representative of United Continental Holdings and Honeywell.

The Secretary said the FAA and the aviation industry have invested more than 80-million dollars in research focused on developing aviation biofuels. And to encourage the production of advanced biofuels from non-food sources, USDA has made payments to 235 companies already producing biofuels from non-corn feedstocks in 42 states.

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In its monthly short-term outlook, the Energy Department expects U.S. benchmark crude oil prices to average over 100-hundred dollars a barrel in 2012 and touch an all-time high amid rising demand as global economies grow. This report signals continuing high energy costs for farmers already squeezed by increasingly expensive fuel. West Texas Intermediate crude is forecast to average $100.25 a barrel this year, up 5.7 percent from the level of 2011. The 2012 estimate was revised up by 2.3 percent from the department’s projection a month ago, and would be a record high not adjusting for inflation.

Retail diesel will average about $3.85 a gallon in 2012, up 1 cent from 2011 and a record high. The American Farm Bureau Federation says it will cost a farmer nearly 1,040-dollars to fill the 270-gallon tank on a Case IH 9370 tractor with diesel. That’s up 43 percent from 2010 and up 77 percent from 2009.

The U.S. Energy Department expects China and the Middle East to lead growth in global petroleum consumption over the next two years. Additionally, any supply disruptions in key producing regions could spike oil prices higher. The Energy Department projected global oil consumption at a record 89.38 million barrels a day in 2012.

Courtesy: NAFB News

During their annual meeting in Honolulu, delegates to the American Farm Bureau Federation’s 93^rd Annual Meeting approved its policy for the coming year. In doing so, delegates said national farm policy should be rewritten this year. The farmers and ranchers endorsed a multi-pronged policy proposal, including a provision for catastrophic revenue loss protection that works with a flexible range of crop insurance products, as well as amending the current farm bill’s marketing loan provisions to better reflect market values.

The adopted policy calls for a farm bill that – provides strong and effective safety net and risk management programs that do not guarantee a profit and minimizes the potential for farm programs affecting production decisions. Farm Bureau President Bob Stallman says – our delegates approved a program to help farmers manage the many different types and levels of risk they face today, in particular catastrophic revenue losses that can threaten the viability of a farm or ranch.

The delegates defeated a proposal to retain the current farm bill’s direct payments and a second proposal that would have allowed a patchwork of support through multiple programs for different commodities and regions.

Bob Stallman was re-elected for another 2-year term. Also, Barry Bushue, the President of the Oregon Farm Bureau, was re-elected to a third two-year term as AFBF vice president.

Courtesy: NAFB News

The Renewable Fuels Association points out the saber-rattling of Iran in the Strait of Hormuz has had an impact on fuel prices. But many are erroneously blaming ethanol because of the end of the tax incentive for ethanol use known as VEETC. RFA says it is true that Congress raised taxes on gasoline blended with ethanol when VEETC expired. But that only translates to about 4.5 cents per gallon of E10 ethanol blends.

But that tax increase doesn’t mean ethanol blends are now somehow more expensive than pure gasoline.  In fact, as RFA Vice President of Research Geoff Cooper notes, the wholesale price of ethanol has been around 60-cents cheaper than that of gasoline in recent weeks and has traded at a discount to gasoline for much of the past few years.

Additionally, with ethanol representing 10 percent of the nation’s gasoline supply, it is helping to put downward pressure on oil and gasoline prices by extending supplies. An Iowa State University/University of Wisconsin study pegged that savings as 25 cents per gallon on average over the past 10 years and 89 cents per gallon in 2010 alone.

Courtesy: NAFB News