Agriculture organizations call for Conservation Reserve Program amendments

Tight supplies of grains and oilseeds make it imperative that farmers be allowed to remove land from the Conservation Reserve Program that can be cropped in an environmentally sustainable way, according to seventy-two national and state agribusiness, meat, livestock and poultry organizations.
In a letter to Congress, the organizations said that providing flexibility to CRP rules is essential if the U.S. is to keep up with the global market. Currently, under the CRP, landowners enter into binding contracts with the U.S. Department of Agriculture to idle land for 10 to 15 years. Penalties — including forfeiting all rental and cost-share payments received for the entire life of the CRP contract, plus interest and liquidated damages — currently apply to CRP contract holders who wish to end their contracts prior to expiration. The CRP currently represents, in acreage terms, America’s fourth largest crop, comprising approximately 31 million acres (roughly 15% of available U.S. farmland).
Other factors supporting the need for additional U.S. planted acreage included:

• The current low stocks situation will require record corn crops on a consistent basis in 2011 and beyond.  
• Expansion could help offset yield variability resulting from weather anomalies, particularly given tightening stocks-to-use ratios.  
• World demand for all grains and oilseeds has increased 30% over the last decade, by 90 million metric tons, and shows no sign of abating. 
• Several hundred million bushels of corn could potentially be produced in an environmentally sustainable way on land currently enrolled in the CRP.  
• The use of grain for biofuels has negated the rationale used previously that land-idling programs, like the CRP, were needed as a way to control stocks. 

US farmers must plant 237 million acres corn, other crops to meet global demand

237 million acres of corn, wheat, soybeans and cotton will need to be planted this year in the U.S. to meet U.S. and global demands.

The Rabobank Food & Agribusiness Research and Advisory group's report, "The Battle For Acres: U.S. Field Crops in Competition,” has concluded that in order to build U.S. and global supplies to acceptable levels, 237 million acres of corn, wheat, soybeans and cotton will need to be planted this year in the U.S.
The estimate represents an increase of 7 million over 2010’s total planted acres and an increase of 3 million over 2008’s record high of 234 million planted acres. Such numbers could lead to price volatility as producers determine how much of each crop to plant. "The consequence of the current competition among major crops, other principal crops and land uses, as well as historical precedence, is an intensely volatile environment which could drive prices to historical highs,” said co-author Sterling Liddell, vice president of FAR. “Global events are adding volatility on both the supply and demand side. Conditions are different this year from 2008, as all crops have rallied strongly in need of more U.S. production."
While profit margins favor corn over soybeans and wheat, according to the report the differential is not strong enough to drive significant substitution among the four major crops.

Storage facilities under bumper crop pressure

Fall harvests of corn, sorghum and soybean are expected to be high, leaving the Midwest with storage concerns, according to reports. A lackluster demand for the abundant winter wheat crop is causing storage problems as overseas buyers watch and wait as prices fall. With a strong fall harvest on the way, storage will be difficult to come by.
Some grain will be “placed on the ground in some areas,” said Tom Tunnell, executive director of the Kansas Grain and Feed Association. This leads to problems for elevator operators as crops stored in this manner typically have much higher rates of spoilage.
Some winter crops have been stored in Oklahoma where crops have been poor, making storage space available.
Wheat futures on the Chicago Board of Trade are trading around $4.5575 a bushel, down from August’s $5.7725.

Monsanto expects corn, soy to be profitable

Despite cutting nearly 2,000 employees, Reuters reports Monsanto is set to introduce its new corn and soybean products next year.
These lines are projected to provide a third of gross profits in three years and expects a launch on 10-12 million acres. The new products are Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans.
Further news that the company’s restructuring plan will provide significant cost cuts helped push Monsanto shares up 42 cents at $78.50 in pre-market trade on the New York Stock Exchange.

Temperature increases could impact US corn, soybean crops

An American research report to the National Academy of Sciences says predicted temperature increases due to climate change would have a huge impact on the corn and soybean crops in the U.S. Midwest.
At ambient temperatures up to 29 C for corn and 30 C for soybeans, yields would actually rise with a warmer climate. Above those levels, however, the effect on yields is likely to be devastating.
The calculations, reported in “Nonlinear temperature effects indicate severe damages to U.S. crop yields under climate change,” by Dr Michael Roberts of North Carolina State University and Dr Wolfram Schlenker at Columbia University, indicate a continuation of greenhouse gas emissions at current rates would cut US yields of maize, soybeans and cotton by 63-82%. Even if united action succeeded in cutting emissions down to 50% of 1991 levels by 2050, there would still be warming enough to reduce crop yields across the U.S. by between 30% and 46%.
The scientists emphasized they looked at crops in the U.S. alone. But since American farms have been producing more than 40% of all corn worldwide and 38% of soybeans, they continued, there would be implications for global grain supplies.

USDA predicts rise in corn, wheat production

Latest crop production data from the U.S. Department of Agriculture show that corn-planted area estimates remain unchanged at 35.2 million hectare, 5% higher than last year, as reported in the weeklytimesnow.com.
Wheat production is predicted to increase by 2.8 million metric tons to 659.3 million metric tons.
Chris Brown, wheat trading manager at CBH Group, anticipates a downward pressure on world feed grain prices due to the rise in corn production.

US gears up for largest-ever soy crop

Drought damage to South Africa's soybean crop, a key U.S. competitor in soybean exports, could benefit farmers in the U.S., journalgazette.net reported, quoting a grain analyst.
A U.S. Department of Agriculture report forecasts the largest soybean crop ever and the second-largest corn crop.
Jon Cavanaugh, marketing director for Central States Enterprises Inc., said that China is importing nearly 42 million metric tons of soybeans. It is expected to buy 60% of U.S. soybean exports.
Cavanaugh has reportedly predicted soybean prices to hover around $9.50 a bushel but added that demand could push prices to as high as $12 a bushel.

USDA releases 2009 Prospective Crop Plantings report

U.S. producers intend to plant less in 2009 than in 2008, says University of Illinois Extension Economist Darrel Good and according to the U.S. Department of Agriculture (USDA) Prospective Plantings report.
Planting intentions for all crops included in the survey are 7.8 million acres less than acreage seeded to those crops in 2008. Including acreage of hay intended for harvest, the decline is about 7.6 million.

Declines total as follows:
*4.5 million for wheat
*1.3 million for sorghum
*1 million for corn
*658,000 for cotton
*446,000 for sunflowers
*410,000 for peanuts
*154,000 for canola

For wheat, 75% of the acreage reduction is for winter wheat, even though winter wheat seedings are 791,000 acres larger than reported in January. Intended acreage of soybeans included in the report is 306,000 more than planted in 2008. Intended acreage of all oilseed crops is 672,500 less and acreage of feed grains (corn, sorghum, barley, and oats) is 2.4 million less than planted in 2008.
The complete USDA report can be accessed here.