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May 19, 2011
· Farm subsidies targeted in budget battle
· Monsanto brewing supercharged veggies
· Yields are key to processing tomato profits
· Deere & Co. 2Q income jumps 65 percent
· Cell phones and their possible link to bee decline
Farm subsidies targeted in budget battle
(KansasCity.com) – Liberals and conservatives aiming to close trillion-dollar federal budget gaps may soon reach a rare consensus on a common target for spending cuts: The American farmer.
“Agriculture is clearly in the crosshairs for significant
reductions,” said Sen. Jerry Moran, a Kansas Republican and a longtime champion
of farm interests in
The nation’s creaking, decades-old system of farm subsidies, crop insurance, conservation programs and disaster relief is controversial even in good budget times.
But with federal deficits and debt at unheard-of levels, the $10 billion to $25 billion spent each year on farm supports is attracting new scrutiny from the right and the left.
And their budget-cutting scythes are out.
“Most people who do not directly benefit from farm subsidies seem to recognize that these programs have been an absolute failure and make virtually no economic sense,” said Brian Riedl, an economist with the Heritage Foundation, a conservative think tank.
Liberal groups aren’t any happier. Farm subsidies aren’t needed, they argue, because farm income is going up, while some food prices — driven in part by federal support for ethanol production — are also higher, hurting families at the grocery store.
What’s more, they point out that most federal spending for farmers actually goes to corporations, which don’t need help, rather than family farms.
In
“We’re taxpayers, too,” Boehm acknowledged. But he noted that price supports provide a safety net when crops don’t come in.
The federal government sends roughly $5 billion annually in direct cash payments to farmers of 10 different crops such as wheat, corn and rice, payments that are made regardless of crop prices. Other farm spending — loans, subsidized insurance, conservation incentives, disaster payments — can cost an additional $5 billion to $20 billion annually.
“Direct payments seem the least defensible,” said David DeGennaro of the Environmental Working Group, a liberal organization long opposed to most farm spending. “It’s just a cash handout for landowners and farmers, who get it whether they need it or not.”
Farmers, and farm-state lawmakers, are nervously watching all the budget-cutting zeal. The farm bill, which establishes the broad outline for agriculture programs and spending, is tentatively up for renewal next year.
Farm advocates argue that while agriculture is ready to do its part to reduce the deficit, farm programs — cobbled together over many decades since the Great Depression — protect a system that delivers high-quality, safe food at a relatively low cost.
“Certainly agriculture is part of the (budget-cutting) mix,” Moran said. “Most farmers are pretty conservative when it comes to the federal government and spending, and they recognize that the debt is unsustainable. … Having said that, there is plenty of evidence agriculture has given already, so we’re looking for some fairness.”
Indeed, some farmers contend federal payments provide an essential safety net for neighbors facing drought, floods and near-record fuel prices, not to mention an inevitable downturn in the farm economy.
“This is a balloon,” said Donn Teske, a farmer from
Sen. Claire McCaskill, a Missouri Democrat facing a tough re-election campaign, maintains that a rapid cut in taxpayer spending for agriculture could backfire, costing urban consumers more at the market.
“We pay very little for our food in this country compared to other nations,” McCaskill said. “I don’t want to get in a situation where all of a sudden people are seeing the same thing at the grocery store that they are at the gas pump.”
Even with current farm programs that are in place, the price consumers pay for food is creeping up. The Agriculture Department projects food inflation this year will be between 3 and 4 percent, much higher than the 2010 food inflation rate of less than 1 percent.
And farm land values continue rising, leaving farmers as a group as well off as they’ve been in many years. Late last year, the Congressional Research Service projected a 24 percent jump in net farm income in 2010, based largely on export demand and higher prices.
As a result, farm household income — aided in part by money earned off the farm — exceeded the average non-farm household income by 17 percent in 2008, according to the Research Service.
Last week, the Heritage Foundation proposed eliminating most farm support in exchange for tax-deductible farm savings accounts, which would allow farmers to bank income in better years to tide them over in poorer years.
“Farm subsidy reform has to be included in any real deficit reduction plan,” said Riedl, the Heritage economist. “There’s no reason Social Security and Medicare should be reformed, but farmers should be let completely off the hook.”
U.S. Rep. Sam Graves, whose 6th Congressional District in Missouri will soon represent nearly half of the state, said he’s ready to battle for farm price supports — despite his recent vote for U.S. Rep. Paul Ryan’s budget, which quietly cut $30 billion in farm spending over a 10-year period.
“Every single producer would rather get a check from the
market than the government,”
“I agree that we need to look at reforms or ways we can be more efficient. The key is to strike the right balance between a safe food supply and fiscal responsibility.”
Sen. Roy Blunt, a Missouri Republican, predicted that farmers will do their part to close the deficit gap, but other cuts need to be on the congressional carving table as well.
“I don’t think all of the cuts need to come from rural communities and farm families,” Blunt said. “And that’s the only thing that appears to be on the board right now.”
Monsanto brewing supercharged veggies
(KansasCity.com) – At the store one morning you finally ditched the old “thump test” and picked out a perfectly ripe melon based on color alone. The broccoli in your fridge will supercharge the level of antioxidants your body produces, helping repel disease. And now you’re tearlessly chopping away at an onion while making your famous chili.
Fantasyland? Not for long, according to St. Louis-based agribusiness giant Monsanto, which is throwing its considerable weight behind developing new varieties of produce with added benefits for consumers.
“We’re definitely at the first wave,” said David Stark, a vice president at Monsanto who oversees the company’s push into the checkout aisle.
With a catalog of seeds that now spans 4,000 vegetable and fruit varieties across 20 species, Monsanto researchers and executives said the potential to replicate desired traits goes well beyond what it could in the past. The tearless EverMild onion and SweetPeak melon that turns light orange when it’s ripe are just the opening acts.
“Monsanto is definitely putting its time and its energy behind these investments in fruits and vegetables,” Stark said. “I’ve got tons of things coming.”
So how much demand is there for superstar fruits and vegetables?
“Unlimited,” said Kathy Means, vice president for the Produce Marketing Association. “When you hit the right mark, consumers will buy it.”
Between January 2010 and January 2011, fresh produce sales
in the
Numbers that big have scientists, from university laboratories to established biotech companies such as Swiss-based Syngenta, on the lookout for new varieties of fresh produce.
But harvesting a hit in the produce section involves more than just flavor and eye appeal. Shoppers also make choices based on the science behind their food, especially when it comes to tinkering with genetic code.
“Most
At the same time, customers often balk at knowingly buying genetically modified fruits and vegetables.
“The perception is, someone’s been messing with my food,”
Means said. “Though the (
Controversy and legal battles continue to surround Monsanto’s genetically modified row crops such as alfalfa and sugar beets, and the European Union has been particularly reluctant to approve the sale of food with altered DNA.
“Clearly there are a lot of people who have questions about biotechnology … around the world,” Stark said.
Monsanto’s efforts to cultivate new lines of consumer-focused produce do not involve direct manipulation of genetic code.
There’s an economic incentive at work here as well. Monsanto said it generally took about 10 years and $100 million to make a genetically modified seed.
Advanced cross-breeding techniques can shorten that process to five or eight years, Stark said.
“It’s significantly cheaper and with a different regulatory requirement and — let’s face it — a different public perception,” Stark said. “And there’s so much we can do, especially in fruits and vegetables where the technology is so new to the whole industry that the gains we can make, we’re pretty excited about.”
But it’s not a one-size-fits-all technology.
Consider Monsanto’s Vistive Gold soybeans, which received Food and Drug Administration approval in 2010 for testing in things such as cooking oils that could eliminate the need for harmful trans fats.
The company said it tried to create the Vistive Gold seed with breeding but had to turn to genetic modification to provide farmers a seed with high-yield potential.
Though it has longstanding breeding programs for row crops such as corn, Monsanto for the most part left the fruit and vegetable seed business in the mid-1990s.
The agribusiness heavyweight started buying its way back in with the purchase of two major fruit and vegetable seed companies in the mid-2000s.
In 2005 Monsanto picked up
“When Monsanto first entered with the purchase of Seminis, the level of research commitment changed dramatically,” Stark said. “So Monsanto is definitely putting its energy and its resources behind these investments in fruits and vegetables.”
The moves gave the company complementary pieces, with Seminis specializing in outdoor varieties and De Ruiter focused more on greenhouse varieties.
To get a return on its investment, Monsanto’s revenue plan extends from field to checkout aisle and leans heavily on seed sales to farmers and royalty fees from retailers.
The challenge facing the company now is marketing new varieties such as its tearless EverMild onion to shoppers and retailers alike.
And Monsanto’s pitch is layered.
The EverMild has a dedicated website that includes recipes, the science behind what
makes the onion mild and even a “made in the
Still, it’s hard for the company to know whether any of its marketing is actually working with shoppers.
“We tend to understand pretty well what our farmer customer wants,” Stark said. “At the same time we don’t talk to (grocery store) consumers every day.”
With that in mind the company uses retailers as its eyes and ears.
Schnuck Markets sold the EverMild onions through February of this year, and Michael O’Brien, vice president of produce for St. Louis-based Schnuck Markets Inc., advises Monsanto on what his shoppers are looking for in the produce section.
“By working with us and us working so closely with the customers and doing consumer research, we can provide what the customer wants.” O’Brien said.
Yields are key to processing tomato profits
(cfbf.com)
– After some late spring delays due to intermittent rainstorms, the planting of
processing tomatoes in the
The U.S. Department of Agriculture National Agricultural Statistics Service, in its mid-April forecast, projected planting contract intentions this year of 268,000 acres, compared to 269,000 contracted acres last year. Projected yield is 12.6 million tons, compared to last year’s production of almost 12.3 million tons.
“The next report is supposed to come out in May. I think the general belief is that the projection is going to be less than what it was in the April report, but we’ll see,” said Mike Montna, president/chief executive officer of the California Tomato Growers Association.
Montna added that negotiations with major processors have resulted in a price to growers of $68 per ton, compared to last year’s price of $65 per ton. This accounts for about 70 percent of the projected crop and negotiations are continuing for the remaining crop, he said.
Like most processing tomato growers in
Because of increased costs of inputs such as fuel, fertilizer, chemicals and labor, the net return to growers would likely be about the same as last year, he said.
But it all comes down to yields.
“It’s always going to depend on yield, but we’ve already seen a big wave of these cost increases,” Montna said.
“This is the first year we planted 100 percent 80-inch double row. We have more plants to the acre and we are hoping to get more tonnage,” he said. “We had been planting everything on 60-inch beds for so many years that it is a big move to go to 80-inch. We didn’t have anything that worked, so everything had to change to make it go to 80-inch—all new cultivators, planters, everything—so it isn’t something that can be taken lightly.”
Like most growers in the San Joaquin and
“We try not to plant any more in a day than we can harvest in a day. But a lot of times you plant faster than you can harvest because there are cannery quotas or maybe the tomatoes don’t ripen just right. There are a lot of factors involved,” he said.
Water availability this year has improved, particularly on
the west side of the
“We’ve cut back on our tomato acreage,” Sanguinetti said. “We’ve got a lot more corn planted. We like to grow tomatoes and we want to stay with this crop. We can’t just quit, but we can cut back and then later if they want more tomatoes we can plant more. We are filling in with corn right now. With the price of corn, it shows a good profit. Corn may make us more money than the tomatoes. It may be our cash crop and tomatoes are something we are using for rotation.”
Tom Turini, University of California Cooperative Extension farm advisor for Fresno County, said, “It doesn’t look like we have the same challenges this year that we had over the last several years in terms of water, so that’s not as up front of their minds at this point. Of course they know long term that’s going to be a challenge, but the availability of Westlands water is certainly better than it was in 2008 or 2009.”
Turini said he is already seeing tomato spotted wilt in some areas.
“For the most part this isn’t at high levels, but it’s a definite concern,” he said. “Now there is a substantial acreage of processing tomatoes in the area that has genetic resistance, so that could help us.”
Brenna Aegerter, UCCE farm advisor
in
“The stands that I’ve seen so far look good. They aren’t patchy, so at this point things look good,” she said. “The wind can damage the plants in addition to just drying them out. It can actually damage the stems. Those little tender stems can get whipped around and get essentially broken by the wind.”
Sanguinetti said that the varieties available to growers are far superior to those that were planted in the past—both in higher yields and disease resistance.
“If you just look at the yields, back in the 1970s we used to get 25 tons to the acre and now an average crop is probably 40 tons and we make 50, 60, 70 tons on occasion,” he said. “We hope we can make some money, but when compared to the wheat and the corn and what the alfalfa has done and the walnuts and almonds, these crops have gone up substantially and tomatoes have stayed pretty flat.”
Deere & Co. 2Q income jumps 65 percent
(AP via
Yahoo! News) – Deere & Co. said Wednesday its fiscal second-quarter
profit soared 65 percent because of strong demand for its agricultural
equipment, especially in the
The earnings beat Wall Street expectations, and it raised its forecast for 2011 revenue.
But its shares fell 46 cents to $86.50 as Deere predicted higher-than-expected costs and warned about weakness in key South American markets.
"We've noticed this with other industrials: there are high expectations right now in the market," said Jeff Windau, an Edward Jones analyst.
Jefferies & Co. analyst Stephen Volkmann said in a research note that he was somewhat disappointed with Deere's pretax profit margin, and he said a lower tax rate boosted Deere's earnings by 6 cents per share in the quarter.
"Overall the quarter was good, but not great," Volkmann said.
Deere is the world's largest maker of agricultural equipment. It also makes construction, forestry and landscaping equipment, such as backhoes, excavators, riding mowers and leaf blowers.
The
Analysts surveyed by FactSet expected earnings of $2.06 a share.
Revenue grew 25 percent to $8.9 billion from last year's $7.1 billion. Analysts expected $8.12 billion.
Windau said investors appear to be concerned about the costs Deere reported for raw materials, compensation and research and development because those were higher than expected.
Deere said raw-material costs were up about $175 million in the second quarter. Research and development costs were up 12 percent and administrative costs were 19 percent higher than the previous year.
The company raised its forecast for fiscal 2011 revenue. Deere now predicts sales will be rise 21 to 23 percent even though the Japanese tsunami will hurt sales by $300 million. Earlier this year, Deere predicted sales would increase 18 to 20 percent.
"John Deere is well positioned to address the world's growing need for agricultural commodities, shelter and infrastructure," said Samuel Allen, Deere's chairman and chief executive.
Deere now predicts full year net income will grow to $2.65 billion in 2011. Its previous forecast was for $2.5 billion net income.
Company officials predict that global sales of agricultural
and turf equipment will increase 20 percent in 2011 with continued healthy
sales growth in North America and
To help deal with higher demand, Deere said it plans to
invest $80 million in a new agricultural equipment manufacturing plant in
northeast
And Deere said the Kuhn Group will begin producing large John Deere branded square balers for European markets starting in 2012.
Deere said its third quarter sales should be up about 20 percent over last year.
The company said farmers in most of the world's major markets are seeing their income grow because demand for their crops remains high while global stockpiles are relatively low. Deere predicted that this year's crop prices will average well above last year's levels.
Corn prices have more than doubled since last summer and hit an all-time high of $7.76 a bushel on April 11. The price had risen because demand from ethanol producers and overseas consumers has grown faster than supply. Prices have declined this month because new USDA estimates predicted corn supplies will grow this year, but corn prices still remain close to $7 per bushel.
Cell phones and their possible link to bee decline
(PhysOrg.com) -- In a new study published in Apidologie, Lausanne researcher and bee specialist Daniel Favre shares his findings of cell phones electromagnetic fields and their effects on the honeybee population. Research is being done worldwide to try and explain the phenomenon known as Colony Collapse Disorder (CCD), where workers bees disappear from a colony and cause a decline in honeybees, and Favre's research puts another idea out there.
In his experiment, Favre placed two cell phones inside a bee hive and set up equipment to record the sounds of the bees when the phones were off, in stand-by mode, and active in a phone call. After the phones had been on for about 20 - 40 minutes, the bees began to make a high pitched squeaking sound known as “piping.” This sound is usually a single made by the bees to announce swarming or that the hive is in danger. However, even after the phone signals running for 20 hours and the “piping” sound continuing, the bees did not swarm. Within only two minutes of the cell phones being turned off, the bees calmed down to their original state.
Favre is calling for the international scientific community to continue looking into the connection between cell phones and electromagnetic fields and the decline in the honeybee population.
While this experiment does show that phones in a close proximity to beehives can disrupt the normal bee behavior, scientists argue that cell phones are not normally found in beehives and believe that other causes, such as pesticides, the varroa mite, viruses, genetically modified crops, and unusually cold winters.
British bee expert Norman Carreck does not hold much weight in the study as having a link to CCD as he says you can knock or hit a beehive and receive the same result this experiment shows and many cases of CCD in the United States have taken place in remote areas where cell phone signals would not be an issue.
End Transmission