Tuesday, March 18, 2014

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Today's Update!

 

New Farm Bill Provides Loss Coverage For Rice Farmers 

 

Rice farmers across Louisiana learned how the new farm bill will affect their operations in a series of meetings held by the LSU AgCenter and the USA Rice Federation in Crowley, Abbeville, Kinder, Alexandria and Rayville. 

The new farm bill eliminated direct payments and relies heavily on two new income support programs as well as placing more emphasis on crop insurance programs. 

"This bill is focused on providing assistance when you need it," said Reece Langley, USA Rice Federation vice president for government affairs. The commodity title of the new farm bill has two options - the Agriculture Risk Coverage or Price Loss Coverage. Langley said farmers in the northern states are more likely to use risk coverage because it is affected more by a farm's yield, while rice farmers probably will want to sign up for the price loss coverage, he said. 

LSU AgCenter economist Mike Salassi said price loss coverage would provide better protection for rice because market price risk is of much more concern for rice growers compared to other crops. Salassi provided several scenarios to show how the programs would work for rice, soybeans and corn crops. He said once the U.S. Department of Agriculture finalizes the farm bill rules, he will have detailed posted online examples to show how the programs will work. The PLC program for rice would pay only if the market price drops below $14 per hundredweight ($22.68 per barrel or $6.30 a bushel), said Salassi

The threshold prices under the price loss program for other commodities are $8.40 per bushel for soybeans, $3.70 per bushel for corn, $3.90 for grain sorghum and $5.50 for wheat. Cotton is ineligible for this program and has loan rates ranging from 45 to 52 cents per pound.  

Salassi said the farm bill could have been much worse for rice farmers had it not been for U.S. Sen. Thad Cochran of Mississippi, who helped promote the idea of a price-based option. "Rice growers could have ended up with just an ARC program option with no target price," he said. The price loss program would be paid on a farmer's base acres established for the program up to 85 percent of a farm's total base acreage.  In addition, the program for rice allows growers to update program payment yields using 90 percent of an average yield from the 2009 through 2012 crop years. 

The maximum payment is limited to $125,000 per individual, Langley said, and any payments for the 2014 crop would be disbursed until fall 2015. 

Lauren Echols, USA Rice Federation government affairs manager, said the farm bill still requires the foreign food aid program, PL480, to buy American-grown agricultural food. 

 

 

New Food Safety Rules Still Being Developed

 

Although Congress passed the Food Safety Modernization Act in 2010, the Food and Drug Administration is still in the process of developing rules to enforce the law. The rules seek to enhance safety regulations by requiring more documentation and shifting the focus to prevention rather than response. 

Complying with these new rules could be especially challenging for farmers and other food producers with limited financial resources, said LSU AgCenter extension food safety specialist Achyut Adhikari. Proposed FSMA rules touch every aspect of agriculture operations, including water and biological soil amendment quality, workers' hygiene, wild animal control and equipment storage. Adhikari, who joined the AgCenter in February, is developing food safety educational outreach programs that will help producers implement food safety practices and satisfy updated requirements. Meeting and maintaining the level of water quality proposed by FSMA will be an important issue in Louisiana, he said. 

One proposed FSMA rule states if E. coli is detectable in surface water, growers are prohibited from using that water during or after harvest of produce that is consumed raw. E. coli can be used as an indicator of pathogens that are difficult to test for, Adhikari said. Testing for E. coli, however, is time-consuming and expensive. Adhikari said if a farmer suspects runoff is contaminating surface water, he or she must test that water every seven days. Still, producers can never have total control over their water supply. "In Louisiana, we have a lot of rain," Adhikari said. "Because of the rain, the water will carry contaminants from the soil to the surface water. In such occasions, alternatives can be taken, including changing the irrigation system or treating the water."  FSMA also permits producers to treat their water, but the FDA has not yet specified approved treatments. 

The law will also affect the way some producers use their land. Raw manure is the main source of several pathogens. If a grower uses raw manure for soil enrichment, he or she must wait nine months after application to harvest the food crop. This is problematic in Louisiana, Adhikari said, where it is common for farmers to pasture animals in areas where they grow crops such as pecans. It also means producers must take extra precautions against wild animals - if they come in contact with food crops, the producer cannot legally harvest it.

The AgCenter is assembling a food safety task force of experts from various departments that will develop programs for growers. One goal they have is to identify alternative, science-based treatments and practices that reach FSMA-mandated levels of protection but are more appropriate for Louisiana. Making sure producers understand and comply with FSMA rules is crucial, said Gina E.  Eubanks, LSU AgCenter associate vice chancellor and program leader for nutrition and food science. 

"In the long run, no farmer wants to produce unsafe food," Eubanks said. "Sometimes, that costs. It may be an extra step that you have to do when you're processing, or you would have to not use a certain chemical." 

 

 

U of I's Good on Upcoming Soybean Stocks Estimate

 

Due to the rapid pace of U.S. exports, concerns about the size of the South American harvest and prospects for generally tight stocks at the end of the marketing year - University of Illinois Ag Economist Darrel Good says the estimate of soybean stocks as of March 1st may be more important than usual. USDA will release the estimate March 31st. Good notes anticipating the size of the March 1 stocks estimate starts with the USDA estimate of stocks held on December 1st plus imports during the quarter. Stocks on December 1 were estimated at 2.148-billion bushels. Census Bureau estimates of imports in December and January totaled five-million bushels - so Good says the total for the quarter may have been near eight-million bushels - resulting in a total supply of 2.156 billion bushels. Running number on exports and domestic crush as well as average feed, seed and residual use during the first half of the 2013-14 marketing year - Good expects March 1 soybean stocks of 973-million bushels. He says an estimate that differs by as much as 25-million bushels in either direction from that estimate shouldn't be considered a surprise given the historic variation in feed, seed and residual use during the first half of the marketing year. 

 

 

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Monday's  Closing Market Prices

  

Nov  Soybeans                  1175.6 up 1.2

Dec Cotton                         8004 up 20

North & South

   Delta Cotton                    8878 down 16

Sept  Corn                          482 down 5.2

Sept   Rice                          1427.5 up 2

Sept  Wheat                        686.2 down 122

#16 Sugar May                    2195 down 13

April Live Cattle                   145-07.5 down 17.5

April Feeder Cattle              178-05 up 82.5

 

 

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Don Molino & Neil Melancon 

Please contact us with any questions or feedback regarding information you would like to receive in this e-letter. 

 

Don Molino

Senior Farm Broadcaster

LFBARN

don@louisianaradionetwork.com

(225) 291-2727, ext. 210