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Past Blog Items on Agriculture

Tuesday, May 29, 2007

Brazilian firm to buy Swift & Co., creating world's largest meatpacker

Latin America's largest beef processor, JBS S.A. of Sao Paulo, Brazil, has agreed to buy Swift & Co. of Greeley, Colo., America's third-largest beef and pork processor, "creating the world's largest meatpacking firm," reports Tom Johnston of MeatingPlace.com, a magazine for the read-meat industry.

The $1.4 billion sale was announced today by "the companies' respective majority owners, J&F Participacoes S.A. of Sao Paulo, and Dallas-based private equity firm HM Capital Partners LLC," Johnston writes. "It also includes the assumption by J&F of almost $1.2 billion in Swift debt and other related expenses," related to the sale of Swift by ConAgra Foods in 2002.

MeatingPlace also notes, "In December, federal agents raided six Swift plants and arrested some 1,300 workers on immigration charges. Company officials said the raids cost upwards of $50 million in lost production and other expenses, but that Swift is on the rebound, with staffing and production levels normalizing in May." (Read more) For a staff story from The Tribune of Greeley, click here.

Friday, May 4, 2007

Crop insurance: Taxpayers take most risks, insurers make big profits

"Private companies are taking advantage of a poorly designed crop insurance program for farmers to reap 'excessive' profits while taxpayers absorb most of the costs and risks, investigators told a House committee yesterday. Republican and Democratic members of the House Oversight and Government Reform Committee reacted with calls for major changes in the insurance program," reports The Washington Post.

Reporters Dan Morgan and Gilbert Gaul were following up on some of their own work. They reported in October that the 16 government-approved firms writing crop insurance made $3.1 billion in profits in the past eight years, while the government lost $1.5 billion. The Government Accountability Office found that the companies "had rates of return averaging 30 percent in 2005 and 24 percent in 2006," compared with a 'benchmark' of 6.4 percent for property and casualty insurers, Gaul and Morgan report.

Here's a local angle for you: The Agriculture Department "paid the companies $6.6 billion to cover administrative costs in the past decade. Much of that has been passed on to local crop insurance agents -- some of them farmers -- who constitute an influential lobby that has fought changes in the program."

USDA sets premiums to insure crops against weather losses and falling prices, and "charges farmers only about a third of what it costs to pay the claims, and it covers most costs on policies for farms with the worst weather risk," the Post notes. "Congress expanded crop insurance subsidies in 2000, promising that the subsidies would end other 'emergency' farm payments. But last week Congress approved $3.4 billion in drought and weather relief, ignoring a White House veto threat." (Read more)

Monday, March 19, 2007

Agriculture Week, Ag Day celebrate American farmers, tout ethanol

This is National Agriculture Week, and National Agriculture Day is Wednesday, March 21, the first full day of spring. “Ag Day serves to recognize and celebrate the abundance provided by agriculture and is celebrated by producers, agriculture associations, agribusinesses, academia and others. The day itself is hosted nationally by the Agriculture Council of America, but events are carried out at the state and local level across the country,” writes Kristin Danley-Greiner of The Messenger in Fort Dodge, Iowa. (Read more) Sponsors include John Deere and Archer Daniels Midland, an agricultural processing and fermentation company and ethanol producer based in Decatur, Ill.

This year’s Ag Day theme will be “Convergence of Food and Fuel,” reflecting the growing relevance of ethanol and biofuel to the agricultural sector. According to an ACA release and data from the Renewable Fuels Association in 2006, the U.S. ethanol industry increased U.S. gross domestic output by $41.1 billion dollars and created more than 160,000 jobs.

The week will celebrate the more than 22 million people employed in farm-related jobs. “Today each American farmer feeds more than 144 people compared to 25 people four decades ago,” said Greg Webb, public-affairs vice president for Archer Daniels Midland in an ACA release. “Simply put, American agriculture is doing more - and doing it more efficiently - than ever before to meet growing demand.” The ACA lauds the changing nature of agriculture production, including renewable fuels and advancements in farm technology such as self-guided tractors.

Sunday, March 18, 2007

Farm interests seek more money for university-based agriculture research

"Over the past two decades, public funding of agricultural research and extension has been reduced or declined in real dollars," Farm Foundation reports. "Evidence is now emerging that the rate of growth in agricultural productivity is beginning to decline. At the same time, some U.S. competitors are increasing public funding of agricultural research. Adequate public funding for agricultural research and Extension programs is a critical factor in the future competitiveness of U.S. agriculture."

To address these issue, Farm Foundation held a conference last week in Washington. Among the speakers was Bob Stallman, president of the American Farm Bureau Federation, which issued a press release quoting Stallman as saying, “Congress needs to consider how our land grant universities contribute and verify advancements in agriculture. . . . We need more funding for research, not less.”

The release said, “With new expectations being placed on American agriculture, as well as farmers and ranchers exploring new ways to improve the environment through innovative conservation practices, the need for research is intensifying. . . . Key areas where research is needed, according to Stallman, are bio-security; improved diets; the environment; rural revitalization; biotechnology; and renewable energy.”

Smaller-scale agricultural interests spoke up, too. Bill Nelson, president of WineAmerica, the National Association of American Wineries, said producers of specialty crops need research for many reasons: Such crops are diverse, with complex, site-specific growth characteristics; many require considerable capital and time to establish; and producers and processors face strict and wide-ranging quality requirements. For an outline of the Farm Foundation program and links to presentations of other speakers, click here.

Friday, March 16, 2007

Kentucky, North Carolina looking at future of tobacco-settlement money

The top two tobacco-producing states, Kentucky and North Carolina, each set aside for agriculture half of the money they got in the national settlement with cigarette manufacturers. They have invested it in very different ways, but now both states are considering changes.

At the first Kentucky Governor's Summit on Agriculture yesterday, called to start drafting a strategic plan for agriculture in the state, there was much talk about the settlement money, most of which has gone directly or indirectly to help the state's cattle industry, the largest east of the Mississippi River. Gov. Ernie Fletcher, a Republican seeking re-election, said the plan should build on past successes but "not shy away from new opportunities and the unknown. . . . The prospects for growth and diversification are endless."

Scott Smith, dean of the University of Kentucky College of Agriculture and a member of the board that has made nearly 3,000 grants totaling $233 million from settlement funds, said the state needs to invest "wisely and more wisely" in ag-related projects. "We need to broaden our scope and broaden our vision" to include research and development, workforce and education, infrastructure and leadership, he said.

In North Carolina, where the settlement money is invested and only the earnings are spent, Gov. Mike Easley wants the foundation that handles the money "to be more aggressive in helping rural areas win jobs," report Jonathan Cox and Tim Simmons of The News & Observer. Easley, a Democrat in his first term, "said the Golden LEAF Foundation needs to use more of its money to build infrastructure and buildings in distressed communities so they're more attractive to industry."

Foundation president Valeria Lee told the Raleigh newspaper that Easley's staff had already told her much the same. "She said that the foundation has been aggressive in its efforts to help struggling communities and has done a good job.' What's more, it's planning a new initiative to go into communities and identify needs," Cox and Simmons write. It has made about 560 grants, totaling about $205 million. (Read more)

For a detailed comparison of the two states' settlement spending, from the Institute for Rural Journalism and Community Issues, based at the University of Kentucky, and its partner at the Project on Public Life in the Center for the Study of the American South at the University of North Carolina, click here. For a report on the Kentucky summit from business writer Greg Hall of The Courier-Journal, click here.

Saturday, March 10, 2007

Tobacco migrating off mountains in N.C.; a local story in several states

The end of the federal tobacco program is concentrating production among large-scale growers and reducing the amount grown in hilly areas where large tracts are more difficult to assemble. That trend is illustrated by figures on production of burley tobacco in North Carolina and its Watauga County, reported by Scott Nicholson of The Watauga Democrat in Boone, N.C. This is a story that can be done by any news outlet in a tobacco-growing county, with data from the local office of the federal Farm Service Agency.

“Local tobacco production continued to decline even though last year the state had a historic high production of burley tobacco, the kind most often grown in the High Country,” Nicholson reports. “Statewide burley tobacco production totaled 6.46 million pounds last year, a 31 percent increase. Yield per acre averaged 50 pounds more than the 2005 crop, suggesting large-scale farmers were achieving more efficiency.”

“Those boys down East ... picked up the slack,” FSA man Bud Smith told Nicholson. “Burley just migrated off the mountain.” Eastern North Carolina production has been almost entirely flue-cured, but the end of federal quotas has allowed growers in the region to adopt burley, which is in higher demand by cigarette companies. Those growers were already large-scale, making it relatively easy for them “to find barns and other covered, dry buildings” for burley, which is air-cured, Nicholson explains, quoting Smith. “They’re not growing two or four or six acres like we did up here. They have 50 or 80 or 100 acres.” (Read more)

Friday, March 9, 2007

Closings of federal Farm Service Agency offices raise farmers' concern

The federal Farm Service Agency wants, and probably needs, to close some of its 2,346 county offices, where farmers get information about farm programs and provide information to the FSA, an agency of the Department of Agriculture.

"As farms get bigger and the number of farms declines, it certainly makes sense that a system that was originally designed to serve almost three times the number of farms we have today should change, particularly at the county office level. And, increasingly, change means the closure of FSA offices," Farm Week said in an editorial in December, complimenting the agency's decision to leave the decision about which offices to close up to state administrators. (Read more)

But the closing of a county office is still a story for local newspapers, as the weekly LaRue County Herald-News of Hodgenville, Ky., showed this week, covering a hearing that drew about 80 people to complain to FSA officials about the plan to close the county office. "The FSA office assists farmers with commodity programs, crop loans and conservation methods. Nearly 700 LaRue County farmers utilize the grain program alone," editor Linda Ireland explained. (Read more)

Jeff Hall, FSA administrator for Kentucky, said the agency plans to close about a third of the offices in the 120-county state, largely because of the end of the federal tobacco program. Much tobacco is still grown in Kentucky, but by many fewer farmers -- about 7,500, University of Kentucky tobacco economist Will Snell estimates. That's about 10 percent of the number who grew the crop 20 years ago.

Wednesday, March 7, 2007

Some states cutting farm irrigation to reduce depletion of aquifers

Irrigation is the number one consumer of fresh water in the United States, and the vast quantities of water used by farms is raising contention with governments and environmental groups. Irrigation, particularly in the West, has been said to contribute to dried up streams and lowered reservoirs and may damage the land in the long term, reports Maria Sudekum Fisher of The Associated Press.

“Several states have taken steps to curtail irrigation,” writes Fisher. “Colorado shut down about 400 wells last summer. Farm states such as Kansas and Nebraska have also been developing new plans to stem overpumping. Kansas is paying farmers to stop irrigating and retire the water rights to wells that draw on underground sources like the massive Ogallala Aquifer, which has been showing signs of depletion in some sections for years.”

However, irrigation could not be halted completely without dealing a huge blow to the economy. “The U.S. Department of Agriculture estimates that while about 16 percent of all cropland is irrigated, largely in the western states, that acreage generates about $60 billion, or about half the value of U.S. crops,” writes Fisher. (Read more)

Tuesday, Feb. 27, 2007

Disappearance of bees threatens production of fruits, nuts, vegetables

In 24 states all over the country, "Bees have been disappearing inexplicably at an alarming rate, threatening not only their livelihoods but also the production of numerous crops, including California almonds, one of the nation’s most profitable," reports Alexei Barrionuevo of The New York Times. (Photo: bee in almond tree by Ann Johnannson for NYT)

"The sudden mysterious losses are highlighting the critical link that honeybees play in the long chain that gets fruit and vegetables to supermarkets and dinner tables across the country," Barrionuevo writes. "Beekeepers have fought regional bee crises before, but this is the first national affliction." It is called "colony collapse disorder," and it's a big deal.

Cornell University estimates that more than $14 billion worth of U.S. seeds and crops, mostly fruits, vegetables and nuts, are pollinated by honeybees each year. “Every third bite we consume in our diet is dependent on a honeybee to pollinate that food,” Zac Browning, vice president of the American Beekeeping Federation, told Barrionuevo, who reports: "The bee losses are ranging from 30 to 60 percent on the West Coast, with some beekeepers on the East Coast and in Texas reporting losses of more than 70 percent; beekeepers consider a loss of up to 20 percent in the offseason to be normal."

The Times story has much more on the bee industry and possible causes for the disorder. (Read more)

Thursday, Feb. 15, 2007

Organic farming is small, but is growing fast, including livestock

“It’s still a small proportion of farm land, but organic farming continues to be one of the fastest growing segments of U.S. agriculture,” writes Sara Wyant of Agri-Pulse. “The U.S. had under a million acres of certified organic farmland when Congress passed the Organic Foods Production Act of 1990. By the time USDA implemented national organic standards in 2002, certified organic farmland had doubled, and doubled again between 2002 and 2005, according to a recent report by USDA’s Economic Research Service. For the first time, all 50 states in the U.S. had some certified organic farmland in 2005. California ranked first in terms of acreage, with over 220,000 acres and North Dakota came in second. U.S. producers dedicated over 4 million acres of farmland -- 2.3 million acres of cropland and 1.7 million acres of rangeland and pasture -- to organic production systems in 2005.”

“Many U.S. producers are embracing organic farming in order to lower input costs, conserve resources, capture high-value markets, and boost farm income, according to ERS,” writes Wyant. “However, the overall adoption level is still low — only about 0.5 percent of all U.S. cropland and 0.5 percent of all U.S. pasture was certified organic in 2005. ... Only a small percentage of the top U.S. field crops -- corn (0.2 percent), soybeans (0.2 percent), and wheat (0.5 percent) -- were grown under certified organic farming systems. On the other hand, organic carrots (6 percent of U.S. carrot acreage), organic lettuce (4 percent), organic apples (3 percent) and other fruit and vegetable crops were more commonly organic grown in 2005. Organic livestock was beginning to catch up with produce in 2005, says ERS, with 1 percent of U.S. dairy cows and 0.6 percent of the layer hens managed under certified organic systems.” (Read more)

Tuesday, Feb. 13, 2007

A weak dollar can be a strong advantage for U.S. agricultural exports

American farm exports may benefit from a weak dollar and the prosperity of other nations, giving produce grown stateside a competitive advantage when pitted against those in other countries. “Between February 2002 and May 2006, the U.S. dollar depreciated almost 18 percent against foreign currencies. When the dollar appreciates against foreign currencies, U.S. exports cost more in foreign local currencies and thus demand for them declines. Conversely, a depreciation of the dollar increases U.S. agricultural competitiveness by lowering prices of U.S. products in foreign markets,” write Mathew Shane and William Liefert of Amber Waves, a publication of the Agriculture Department's Economic Research Service.

“The decline in the U.S. exchange rate since 2000 has helped boost U.S. agricultural exports to an all-time high of close to $70 billion per year,” write Shane and Liefert. “However, almost all of the depreciation is accounted for by appreciation of currencies in developed countries such as the European Union (EU), Australia, Canada, and South Korea.” U.S. agriculture exports lose out in the many developing countries that purposefully depreciate their currencies against the dollar to keep a trade advantage. “Developing countries’ commodities and goods have thus become particularly competitive in the U.S. market, while U.S. agricultural exports have become more difficult to market in those countries. As a result, these countries (mostly in Asia) have generated substantial trade surpluses mirrored by trade deficits for the United States.”

“Yet, other longer term factors can help boost U.S. agricultural exports,” write Shane and Liefert. “High income growth in developing countries is the most important. However, pursuing and maintaining high rates of productivity growth in U.S. agriculture is equally important. These two factors combine to create a strong potential for the future growth in U.S. agricultural exports regardless of how the exchange rate fluctuates in the short to medium term.” (Read more)

Thursday, Feb. 1, 2007

Bush Farm Bill: Conservation, ethanol, specialties gain; wealthy lose

The Farm Bill proposed by the Bush administration yesterday, which would cut payments to farmers by $10 billion over the next five years, may be the most reform-minded in decades. Conservation, ethanol and fruit and vegetable growers would get more money. Wealthy farmers would lose funding entirely and multiple payment provisions will be cut off. “The department noted that under the government’s current policies, only 9 percent of all American farms collected 54 percent of all government commodity payments,” writes Alexei Barrionuevo of The New York Times. “These proposals are more equitable distributions. We have to keep that support amongst the people who pay the bill,” Agriculture Secretary Mike Johanns said.

“The proposal would increase conservation financing by $7.8 billion and direct almost $5 billion to fruit, vegetable and other “specialty” growers, who have received little federal assistance in the past,” writes Barrionuevo. “It would also provide $1.6 billion for research and development on cellulosic ethanol, which comes from agricultural waste and nonfood crops. The proposal would actually increase overall direct payments to farmers by $5.5 billion, or 10 percent, over 10 years. But it would also reduce large loans that, Brazil and other countries have argued, distort global trade.”

Subsidies would go only to “growers who make less than $200,000 in adjusted gross income, a restriction affecting 71,800 farmers of the 2 million who declared farm income in 2003,” writes Barrionuevo. “The current income cap is far more — $2.5 million — and it disappears altogether if at least 75 percent of a grower’s income is farm-related.” Antipoverty groups such as Oxfam America have praised the bill for supporting poorer farmers, but critics say it’s a bad move for business and the economy. (Read more) “The administration's plan also eliminates the three-entity rule, which allows farmers to receive payments under multiple entities, and would restrict the possibility of maneuvering around the new, proposed limit. Under the 2007 plan, farm payments would be limited to individuals and capped at $360,000,” writes Aine Gianoli of Data Transmission Network. (Read more)

Johnanns' announcement was "the administration's opening move in what will be a lengthy tug of war with Congress over a new multi-year farm bill," write Dan Morgan and Gilbert Gaul of The Washington Post, which has focused much attention on farm subsidies. Click here for the story and links to related articles.

Hospitals and more: The Farm Bill deals with much more than farming, including rural development and rural health. “The plan includes $1.6 billion in guaranteed loans to complete the rehabilitation of more than 1,200 current Rural Critical Access Hospitals. It also includes $500 million to reduce the backlog of rural infrastructure projects such as water and waste disposal loans and grants,” said a USDA release.

Sunday, Jan. 21, 2007

Changes in tobacco market make a burley harvesting machine viable

The end of federal quotas and price supports has turned burley tobacco from a mainstay of small farmers to a plantation-type crop for large farmers. That, and a shortage of immigrant labor to harvest the crop, means that the time may have come for a tobacco harvesting machine developed by engineers at the University of Kentucky and the manufacturer, GCH International of Louisville.

"This is really the industrial revolution for burley tobacco," GCH President Jeff Androla told Greg Hall of The Courier-Journal. "Androla said he doesn't see how farmers can continue to find the labor needed to cut tobacco in the traditional way. The U.S. Agriculture Department said some Kentucky burley growers couldn't harvest their crop in time last year because they couldn't get enough workers.

The machines sell for $379,000. "Androla said about five growers are seriously considering ordering the harvester. Producing one machine would take up to four months, but making them in multiples could shorten that time, he said." (Read more) To watch a video of the harvester at work, click here.

Thursday, Jan. 11, 2007

Farm Bureau delegates no longer want to keep Farm Bill the way it is

Delegates to the American Farm Bureau Federation convention "say they’d like the 2007 Farm Bill to be similar to the current one, but they’ve abandoned policy that the measure be extended," reports Tom Steever of Brownfield Network. "AFBF policy had supported extending the 2002 until a new World Trade Organization agreement is reached. Negotiations on a new WTO pact collapsed last July."

The lobbying group's change of position may improve chances that the nation's basic law on farm subsidies and rural development will undergo substantial change this year. Many interest groups and government officials are calling for more limits on subsidies and more help for rural development. The bill deals with a wide range of programs, including conservation and food stamps.

"The farm organization’s policy setting session was remarkable in its brevity and general agreement on what should be contained in the next farm bill," Steever reports. "American Farm Bureau President Bob Stallman told reporters following the session that the rapid policy decisions were a sign of solidarity in spite of commodity and geographic differences. . . . Delegates also agreed that farmers should have a safety net, but agreement was more fleeting on the subject of country-of-origin labeling. While many members want policy supporting a mandatory COOL program, the vote was to support voluntary labeling." (Read more)

In tackling the Farm Bill, Congress will be "debating the future of rural America," says the Nebraska-based Center for Rural Affairs. "Rural America is a valuable part of America, but many rural people and communities are not sharing in the nation’s prosperity. The place of rural communities in the nation’s future is at risk. When rural America is a risk, all of America is at risk." (Read more)

Monday, Jan. 8, 2007

Hay runs short, used farm equipment prices run high in some areas

Our friend Al Tompkins at The Poynter Institute has a couple of rural story ideas in today's edition of Al's Morning Meeting. One deals with a hay shortage in places such as Alabama and Oklahoma. You can see if your area is affected by clicking here for the National Drought Monitor from the University of Nebraska. The other story is on rising values of used farm equipment, by Greg Peterson of FACTs Report, an equipment-auction guide, which Al got from one of our favorite sites, Agriculture Online.

When we went to the Ag Online page, we tool special notice of the banner ad from Arctic Cat, which brought to mind our Jan. 3 blog item on all-terrain vehicles replacing horses in cattle country. But we also noticed something strange about the ad. It read, "Wrangling cattle. Bailing hay. We have you covered cowboy." Seems that the ATV manufacturer is not as familiar with baling hay as the company would like you to think -- and Ag Online isn't copyediting its banner ads. To see the page, click here.

Meanwhile, our hay note caught the attention of Ivan "Red" Swift, a friend in North Alabama. He writes that in The Huntsville Times "yesterday there was an ad for hay rolls at $60 a roll," but cautions, "If dry sage grass is in the roll, lots of cows and other livestock won't eat it. . . . If the roll is rolled tight there's a lot more hay in it. So, the $60 rolls for sale may be small, packed loose, and not really edible cured grass, like fescue and orchard grass. I put out three rolls today -- two for my cattle, one for my goats. Put out a roll for my sheep on Saturday. Haven't bought corn for several weeks but heard at the feed store today that is was shooting up in price." Red may be hearing the sounds of the corn-fueled ethanol boom.

Friday, Jan. 5, 2007

Brownfield Report offers wrapup of last year's big stories in agriculture

2006 "was a year of frustration for U.S. cattle producers hoping that beef trade would once again approach normalcy. The frustrations extended to those in agriculture who hoped for some resolution in the Doha Round of global trade negotiations," reports Brownfield Network. "There was growing demand during 2006 for crops that are increasingly used as sources of energy and that show promise for other uses. It's been a year of position squaring ahead of the 2002 Farm Bill expiration date."

To stream audio of Brownfield's 54-minute report, click here. To download it as an mp3 file, click here. Brownfield Report, based in Jefferson City, Mo., is an agricultural news service for radio stations, but does such a good job of tracking agriculture-related news, it's useful to all media. It also has information on rural issues, and commentaries from founder Derry Brownfield. For the commentary page, click here. To read the Brownfield Blog, which tells more about its subscribers and contributors, click here.

The Institute for Rural Journalism and Community Issues helps non-metropolitan media define the public agenda in their communities, through strong reporting and commentary on local issues and on broader issues that have local impact. Its initial focus area is Central Appalachia, but as an arm of the University of Kentucky it has a statewide mission, and it has national scope. Cooperating institutions include Appalachian State University, East Tennessee State University, Eastern Kentucky University, Indiana Universiy of Pennsylvania, Marshall University, Middle Tennessee State University, Ohio University, Southeast Missouri State University, the University of North Carolina-Chapel Hill, the University of Tennessee-Knoxville, Washington and Lee University, West Virginia University and the Community Journalism Fellows program at the University of Alabama. To get notices of Rural Blog postings and other Institute news, click here.

Institute for Rural Journalism & Community Issues
School of Journalism and Telecommunications, College of Communications & Information Studies
122 Grehan Building, University of Kentucky, Lexington KY 40506-0042
Phone 859-257-3744 - Fax 859-323-3168

Al Cross, director al.cross@uky.edu