USDA: Sorghum Exports, Ethanol Production Up

By Marri Carrow, manager of communications

USDA today released its monthly World Agricultural Supply and Demand Estimates (WASDE). It projects a 10 million bushel increase from the previous month for U.S. sorghum exports due to increased imports for Japan and Mexico. The U.S. Grains Council welcomes this news as it actively promotes U.S. sorghum in those markets.

WASDE projects corn used for ethanol 100 million bushels higher, reflecting the latest ethanol production data from the Energy Information Agency. According to USDA, recently lower corn prices continue to support profitability for ethanol producers. USDA projects corn exports for 2009/2010 50 million bushels lower due to increased competition from Argentina.

U.S. barley exports are unchanged from the previous month, projecting 5 million bushels.

Click here for the full report.

See You in Puerto Vallarta!

By Shannon Schaffer, U.S. Grains Council Director of Membership

The U.S. Grains Council’s 7th International Marketing Conference and 50th Annual Membership Meeting is just more than a week away and the excitement is building. There will be almost 300 individuals, including attendees, Council staff, speakers and guests, flying into Puerto Vallarta, Mexico, for this meeting. This will make it one of the largest regular Council meetings ever!

The theme for the meeting is “50 Years of Leadership: Acting on Opportunities.” This captures our desire to celebrate the Council’s history, while looking forward and working on the future. Future planning will be a key thrust of the meeting. The work Council members will be doing in Mexico is critical to the continued success of the Council. This meeting is no vacation! It brings our key international staff together with our membership to work on the Unified Export Strategy, or UES, which will serve as the blueprint for the Council’s programming in the future. The input from the Council membership, provided through the Advisory Team (A-Team) meetings, is invaluable in assuring that our programming truly meets the industry needs. The Council is an organization driven and run by its membership.

In addition to the UES, members attending the meeting have been asked to provide input about issues that may affect their business and U.S. agricultural trade in general over the next two or three years. This initial discussion will be focused on three topics: Global competition in export markets for coarse grains and products; product differentiation to add value and capture markets; and innovative use of technology in market development efforts. Each A-Team will have time set aside in their agenda to discuss these topics.

Beyond planning the future of the Council, attendees will also hear from internationally recognized speakers to help put the issues of the day in context for the work they are doing. Carole Brookins, managing partner of Public Capitol Advisors LLC, and former U.S. executive director of the World Bank, will discuss the policies and strategies necessary to address the mounting changes facing the world today – from climate change to financial changes. Christopher Langholz, president of Cargill’s domestic trading arm, will be on hand to talk about the challenges facing increasing U.S. exports, from competition to transportation issues. Attendees will also hear from Pedro Gonzales Hernandez, an under secretary for agribusiness issues in the Mexican Department of Agriculture, about the future of U.S. trade with Mexico.

The Council depends on involvement by its members to make its projects as effective as possible. Meetings like this one in Mexico and the July Board of Delegates Meeting in Boston are a key way for the Council to get the necessary input for Developing Markets, Enabling Trade and Imporving Lives.

Mistakes Are Correctable... Yellow Tail

By Mike Deering, director of communications

I know we all have made several mistakes. However, mistakes are nothing more than lessons that lead to bigger and better things. These screw ups allow us to expand our intellectual capacity a bit. Yellow Tail wine, owned by Casella Wines, recently donated $100,000 to the Humane Society of the United States (HSUS) for their "Tails for Tails" initiative. This deceptively named organization threatens the fabric of the entire agricultural industry, U.S. economy and global food security.

As our friends at the Center for Consumer Freedom aggressively point out on a regular basis, HSUS is NOT - I repeat IS NOT - an animal shelter group taking care of abandoned pets. I do, however, understand how one would assume its association with fuzzy puppy shelters (just look at their puppy covered Web site). HSUS fully intends to pull one over on us. They ask for donations to help pets but HSUS only reported to the Internal Revenue Service that $450,000 of their $89,000,000 million budget went to that worthy cause. The rest went to fundraising, lobbying and salaries. For example, Wayne Pacelle, the well-spoken and manipulative CEO of this so-called animal well being organization, pulled in a whopping $250,000.

This group and its supporters have often times gathered millions of dollars to offer assistance to worthy causes, but have a history of manipulation. From helping animal victims in Haiti to those that suffered from Hurricane Katrina, HSUS capitalizes on horrific events to gather funds for their deceptive attempts to ruin agriculture - the single most important industry to the survival of mankind.

Back to my point that we all make mistakes. I truly believe Casella Wines had no clue it was donating to an animal rights extremist group trying to destroy food security. I think they just screwed up and didn't do their homework. Why do I believe this? Casella Wines is an example of a small business that took hard work and dedication to the max. The company started in the late 1950s as a small family business. Six generations later, the company is huge and still family owned. Why in the world would a family operation that dreams the dream and is willing to pay the price to make their goals a reality work against farm families who are trying to feed a growing global population? That makes zero sense.

Casella Wines - Yellow Tail - has the opportunity to look back and say "oops." Fix it. Cancel the check. Move on to other things. Write a check to the National FFA Organization and/or National 4-H. I assure you that your wine sales will skyrocket from this agricultural communications guru. Another good blog post is one from Corn Commentary.

USGC Supports Farm Bureau's Call to Congress to Support FTAs

By Marri Carrow, manager of communications

The American Farm Bureau Federation (AFBF) is urging members of the Senate Finance Committee and House Ways and Means Committee to expedite the passage of the pending Colombia, Panama and Korea free trade agreements in order to help achieve the president’s goal to double exports in the next five years. The U.S. Grains Council is impressed with AFBF's rapid action on this very important issue.

AFBF President Bob Stallman wrote to Congress saying, “By 2010, there will be more than 600 bilateral and regional trade agreements worldwide with the United States engaged in fewer than 25.” Stallman said an aggressive trade agenda is important for the U.S. economy and the creation of American jobs.

According to AFBF, the drop in U.S. agricultural exports from 2008 to 2009 is estimated to have cost roughly 160,000 American jobs in the production, processing and transportation sectors. The Colombia, Panama and Korea free trade agreements combined represent almost $3 billion in additional U.S. agricultural exports, according to Farm Bureau estimates.

US Farmers’ Checkoffs Carry-out President’s Directive

By Mike Callahan, Senior Director of International Operations for Asia

In last night’s State of the Union address, President Barack Obama said he wanted exports to double within the next five years. He said it was vital to our nation that the United States and especially U.S. farmers provide the agricultural products that are sought around the world. I found this encouraging to our efforts of the U.S. Grains Council with the funding from U.S. farmers’ checkoffs and U.S. agribusinesses. For the last 50 years, farmers have invested their own money into building markets around the world for their products. They have seen significant returns on their investment as economies like South Korea and Egypt become developed, turning to the United States to fulfill a portion of their food and feed needs.

The USGC 7th International Marketing Conference and 50th Annual Membership Meeting, held Feb. 13-17 in Puerto Vallarta, Mexico, comes at an opportune time as we will take the charge from our Commander-in-Chief and prepare ourselves to increase our marketing efforts. This meeting provides the Council and its members a unique opportunity to coordinate efforts to form a unified front to developing international markets for U.S. corn, barley, sorghum and their co-products. The meeting allows a venue for U.S. producers, agribusinesses and USGC staff to discuss insights and experiences and form an industry approach to the world in the form of a Unified Export Strategy (UES).

The UES is the Council’s strategic plan for developing international markets for U.S. grains and co-products. It is submitted to USDA’s Foreign Agricultural Service in order to obtain market development funding, primarily through the Market Access Program and Foreign Market Development program.

As President Obama said in his address, he does not accept second place for the United States and we agree. We have 10 international offices and representation in 15 different countries. We work around the world, around the clock to ensure that the United States maintains and increases its market share in existing markets, and finds new markets for U.S. barley, corn, sorghum and their co-products. I hope to see you all in Puerto Vallarta.

Statement by Thomas C. Dorr, USGC President and CEO, Regarding the Appointment of John Brewer as FAS Administrator

By Thomas C. Dorr, President and CEO

“On behalf of the U.S. Grains Council, I want congratulate John Brewer on his appointment to serve as the new Administrator of USDA’s Foreign Agricultural Service (FAS). This appointment comes at a critical time for foreign market development in regards to the increase in worldwide feed and food grains competition, pending free trade agreements and the awaiting Doha negotiations of the World Trade Organization.

“The Council is impressed with Mr. Brewer’s international experience and credentials and we look forward to working with him.”

Wheat Growers Urge Senate to Approve Pending Trade Representative Positions

By Marri Carrow, manager of communications

The National Association of Wheat Growers (NAWG) recently joined a coalition of agricultural groups to urge the Senate to confirm two key trade nominees. These individuals include Michael Punke, Obama Administration nominee for deputy U.S. Trade Representative (USTR) based in Geneva; and Dr. Isi Siddiqui, Obama Administration nominee for chief agricultural negotiator at USTR.

Both nominations were approved by the Senate Finance Committee on Dec. 23 and currently await Senate approval. According to NAWG, agricultural trade agenda, particularly the World Trade Organization’s Doha talks, will be severely stymied as long as these positions remain vacant.

NAWG and other agricultural groups have written Senators supporting both nominees in the past. Those letters and the one sent this week are available at www.wheatworld.org/trade.

2010 US Agriculture

By Terry Vinduska, U.S. Grains Council Vice Chairman and Kansas Corn Commission Board Member

Every farmer is optimistic. We wouldn’t be farming if we weren’t. As I look into the new year and how export demand will affect prices, I am, as usual, cautiously optimistic. One disclaimer: As vice chairman of the U.S. Grains Council, some will say I am biased toward the value of exports. I do believe in the value of exports and the importance of exports as we look into next year’s grain price crystal ball. As a grain producer, I believe we need both a strong domestic demand and a strong export demand to lead us into higher prices.

This month, USDA raised its projection for U.S. wheat ending stocks for 2009/2010 by 15 million bushels. At the same time, global wheat supplies for 2009/2010 are projected to be one million tons higher and global wheat trade is projected slightly lower. We can all see that this doesn’t paint a bright picture for 2010 wheat prices. Even though projected U.S. wheat planted acres are down to around 59 million acres from 63 million last year, I’m afraid carry-over and strong world supply will make up for fewer planted acres. Looks like $5 wheat may be close to a top price next year (USDA range is $4.65-$5.05). I sure hope it’s closer to $6, but there’s just a lot of wheat worldwide.

USDA is projecting that corn ending stocks for 2009 will be nearly unchanged from 2008 ending stocks. Corn exports are nearly at the same level as last year but we are currently experiencing a slightly slower pace of shipments. The Ukraine is offering increased competition as a world feed grain supplier and some are projecting that China will be exporting corn in 2010. Global coarse grain supplies are projected to be 3 million tons lower than 2008 supplies. U.S. planting intentions for 2010 are projected to be about the same as 2009 for corn and down almost 1.7 million acres for sorghum.

So as we digest all of this information, can we look for strong U.S. prices for feed grains? USDA is projecting $3.25 to $3.85 average prices for corn. I’d lean toward somewhere in the top of that range because I think U.S. exports will strengthen slightly.

I just have to comment on the supposed experts who said not too long ago that the United States would be out of corn and the world would be starving for corn due to increased demand of the ethanol plants. Once again the ability of U.S. production agriculture was underestimated. Weren’t we supposed to have $10 corn today because of lack of supply? And the U.S. housewife could never again afford a box of corn flakes! Guess they were wrong. Like it or not, whether we want to admit it or not, the market does work. And U.S. farmers know how to grow corn.

Soybeans experienced a record export pace in December, according to USDA, which leads to higher price projections. Soybean ending stocks for 2009 are projected to be down 15 million bushels from the end of November. 2010 USDA projections for soybeans are for a 2 million acre increase in planted acres and a price range of $8.75-$10.25. I can’t help but think that soybean exports will continue to increase.

All things considered, I think we can survive with these price projections if we have normal to above normal yields. I hope USDA is low, we deserve more, but my guess is that they are pretty close.

USDA Announces New Availability for Credit Guarantee Program

By Marri Carrow, manager of communications

USDA’s Foreign Agricultural Service recently announced availability of fiscal year 2010 GSM-102 Credit Guarantees for export sales to the following country and regions:

Mexico - $45 million, bringing the total to $145 million;
The Central America Region - $30 million, bringing the total to $130 million; and
The Caribbean Region - $60 million, bringing the total to $160 million.
(The Central America Region includes Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The Caribbean Region includes Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, British Virgin Islands, Cayman Islands, Dominica, Dominican Republic, Grenada, Guadeloupe, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago).

The U.S. Grains Council believes GSM-102 is an effective program that encourages international consumers to purchase their agricultural needs from the United States. All credit given by this program is only good for purchasing U.S. agricultural commodities. These new allocations bring the total GSM-102 credit guarantees to $1.335 billion of the $5.5 billion cap set in the U.S. Farm Bill.

The credit guarantee program is great for both the United States and foreign customer as it provides a guaranteed market for U.S. agricultural goods. The receiver is also provided with funds they might not otherwise have access to and therefore can thrive in economic success.

Read the release here.

Iowa Hogs Started Something Big

By Marri Carrow, manager of communications

The American Embassy’s Agricultural Trade Office in Japan recently launched the “Partners in Agriculture” Web site, http://www.partners-in-agriculture.org/. The site coincides with the “Partners in Agriculture” events beginning in March 2010. The site houses the celebration’s calendar of events while sharing success stories of USDA’s cooperators and the unique partnership between the United States and Japan.

The “Partners in Agriculture” events aim to celebrate the 50th anniversary of the Iowa-Yamanashi Sister State relationship, which sparked the USDA’s cooperate programs, the famous “hog-lift” and, of course, the start of the U.S. Grains Council.

The “hog lift” experience helped lay the foundation for the Council, which set up its first overseas office in Japan in 1961. The access to high quality feed led to the development of the Japanese domestic meat industry. This provided the incentive for U.S. Meat Export Federation (USMEF) to open its first overseas office in Japan in 1977. There are now about fifty cooperators active in the Japanese market.

Japan is the perfect example of how the partnership between USDA's Foreign Agricultural Service and cooperators has been one of the most successful public-private partnerships in the United States, facilitating billions of dollars in U.S. agricultural exports and creating millions of jobs. Today, Japan is our largest commercial market for feed grains and pork and will return to being our largest market for beef. Japan’s purchases have been essential contributors to the health of the U.S. economy and will continue to be critical for U.S. agriculture in the future.

The Council will be actively involved in these events and will provide more information as it becomes available.

Council Programs Put Our Money to Good Use

By Joe Zenz, Wisconsin Corn Promotion Board Inc.

Traveling on the U.S. Grains Council’s 2009 Corn Mission to Morocco, Egypt and Jordan was an eye-opening experience both from a cultural perspective and a business perspective. First and foremost, I was very impressed with the effectiveness of Council programs there and the high level of people we have working for us in those countries.

From the chicken farm and feedlot in Morocco, the water buffalo dairy in Egypt and Jordan’s modern Holstein dairy, everyone we met loved our distillers’ grains. Producers talked about the excellent quality and how well the high energy component of the distillers’ grains worked in their rations.

We saw great disparities in conditions on the trip. There were farmers living the way their ancestors had for thousands of years; there were some of the most modern facilities you’d find anywhere. In Egypt, because they are trying so hard to keep people employed, we saw a lot of people doing menial labor. The dairy we visited in Egypt – which milked water buffalo – had a pipeline and refrigerated milk tank but then the milk was hauled out in milk cans on pickup trucks and even the occasional donkey cart! This seemed like it was a detriment to modernization and was in sharp contrast to the way things are in Jordan, which is a very contemporary country with dairy farms like you’d see in the United States.

Although taking the trip made harvest more stressful, it was a very meaningful trip and I’d encourage everyone given the chance to participate. I have a whole new appreciation for the Council’s programs, its staff and how well our money is being put to use. I also can say I’ve eaten pigeon and a few other foods I’m not really sure about! Thanks for the memories.

Editor's Note: Joe is pictured above with the 2009 Corn Mission participants. He is pictured to the far left.