Less Savings From Same Farm Bills
The possibility of getting a five-year Farm Bill passed just got harder. A new Congressional Budget Office estimate says the amount of savings has changed since last summer and it is much less.
The Senate bill savings estimate now stands at $13.1 billion over 10 years, not $23.1 billion. The House bill savings figure fell from $35.1 billion over 10 years to $26.6 billion.
The CBO says that market changes impact the savings estimates. Higher costs are coming from Agriculture Risk Coverage, or crop insurance, as commodity prices have increased the promised revenue guarantees. Some commodity groups are favoring the old target price program rather than the Agriculture Risk Coverage (ARC) since funding may be insufficient to cover costs.
Most commodity groups strongly favor the crop insurance program. Groups are willing to throw their weight behind other programs, such as the supplemental coverage option, which would enhance crop insurance or a target price program, if it doesn’t distort planting decisions.
Will Sequester Hurt Direct Payments?
Secretary of Agriculture Vilsack recently said that the sequester budget cuts could disrupt and cut agriculture by as much as $8 billion, affecting as many as 60,000 jobs.
He said, “Distributing direct payments among producers will be equitable. USDA is prepared to operate the program and is also committed to giving farmers in the Average Crop Revenue Election program options to stay in or withdraw from ACRE.”
Peanut farmers are hoping to retain the $36 per ton direct payment that should be distributed in October. “I think there will be an impact on the program with the sequester,” Vilsack said. “Sequester may impact the amount of payments, but I don’t think it will affect whether people get payments. And I think anything that Congress does relative to removing, reducing or modifying direct payments, as they either formulate a response to sequester or formulate a Farm Bill, I suspect will be in future years and won’t be this particular year.”
The Secretary said it is also possible that some producers could be asked to return a percentage of commodity or conservation payments made to them. He said, “A cut of $60 million in agriculture research could hurt many of our programs.”
No agreement by the two political parties and the President on the sequester clears the way for an $85 billion cut in U.S. budgets this fiscal year and $1.2 trillion over the next 10 years.
SUSTA Ready To Help With Exporting
Troy Rosamond, Financial Director of the Southern U.S. Trade Association (SUSTA) told buying point managers that SUSTA has the mission of increasing southern U.S food and agricultural exports. SUSTA covers 16 states and is funded by USDA’s Foreign Agricultural Service.
SUSTA is available to help small businesses, trading companies with fewer than 100 employees, farmer co-ops and even wholesale/export companies. SUSTA provides up to 50 percent reimbursement for certain international marketing expenses such as advertising, point of sale materials, in-store promotions, freight for samples, exhibiting at international shows and travel to shows, labeling changes and even giveaway items. He noted that if you want to export, this is a great place to start.
For more information, visit their Web site at www.susta.org.
USDA Praises Producers, Buying Points
Tim Mehl, chief of the Warehouse License and Examination Division of USDA, praised the peanut industry for an excellent job in handling the gigantic 2012 crop of peanuts.
Mehl said, “I know it took a lot of patience at many locations as we worked to get the peanut properly stored.”
A total of 29 shellers had 312 functional warehouses approved to handle 3.8 million tons. That is up from 282 warehouse facilities the previous year. Georgia has the most licensed nut facilities with 127 and North Carolina is second with 44. Arkansas is the newest state with three approved.
Through September, the examination branch has conducted 2,230 warehouse examinations. He said that inspectors will continue to monitor the stored peanuts and make certain guidelines are followed.
Grand Jury Takes On Salmonella
A federal grand jury has indicted four people in a 2009 salmonella outbreak linked to a Blakely, Ga., processing plant. The indictment in federal court in Georgia charges four employees with Virginia-based Peanut Corp. of America. The charges include conspiracy, wire fraud, obstruction of justice related to contaminated or misbranded food.
The company’s processing plants were blamed for the outbreak that killed nine people and sickened hundreds. The company later went bankrupt.
Named in the indictment were company owner Stewart Parnell, vice president Michael Parnell, Georgia plant manager Samuel Lightsey and Georgia plant quality assurance manager Mary Wilkerson. Officials confirmed that the Federal Bureau of Investigation was brought in to provide additional resources to a complex investigation.
An indictment is only an allegation, and defendants are presumed innocent until proven guilty beyond a reasonable doubt. A trial date has not been set.
2012: Most Valuable U.S. Peanut Crop
According to USDA’s National Agricultural Statistics Service, the price of peanuts averaged 0.345 cents per pound ($690 ton) last season, almost 8.5 percent higher than 2011. These average prices appear to have included options paid to farmers.
The value of the 2012 peanut crop at farm level is $2,308,652,000, a 97.6 percent increase from 2011. The higher prices were coupled with a 44 percent increase in acreage.
The highest average price was paid in New Mexico at $946 per ton, followed by Texas at $816 per ton. The lowest average price was paid in Florida at .302 cents per pound or $604 per ton followed by Virginia at $656 per ton. About 49 percent of the revenue from peanuts was produced in Georgia, Alabama was second with 13 percent, followed by Florida with 10.2 percent.
TPPB Announces New Varieties
Research and development has long been a key focus of the Texas Peanut Producers Board. Continued producer funding of research has ultimately led to the release of four new peanut varieties since 2011: Tamrun OL11, Webb, Tamrun OL12 and Schubert through Texas A&M AgriLife.
The varieties are described as follows:
• Tamrun OL11, released in the summer of 2011, is a runner-type peanut with good resistance to Sclerotinia blight and high grade potential. Tamrun OL11 is in the registered seed stage.
• Webb, named after former TPPB executive director, Mary Webb, was released in the summer of 2012. It is also a runner-type peanut with resistance to root-knot nematodes and moderate resistance to Sclerotinia blight.
• Tamrun OL12, another runner-type peanut, was also released in the summer of 2012. This variety matures approximately two weeks earlier than currently grown runner varieties and should be of benefit to the West Texas region, which has a shorter growing season.
• Schubert, a Spanish-type peanut, was released in the summer of 2012 and was named after the late A.M. Schubert, Ph.D., who served as a long-time plant physiologist working with peanuts. Schubert yields approximately 500 pounds per acre better and grades two to three percentage points higher than the currently grown OLin variety.
Webb, Tamrun OL12 and Schubert are all in the breeding increase seed stage of production.
NPB Approves Research Projects
At a recent quarterly meeting of National Peanut Board, production research projects submitted by the state producer organizations and the University of Arkansas and all 49 projects were unanimously approved. The majority of projects investigate the challenges of disease control, pest management and drought tolerance. The total allocation for FY-13 production research funding exceeds $1.5 million.
Vic Jordan, NPB chairman and At- Large delegate, says, “Our research efforts are important to growers now and in the future. All these projects help make our crop more sustainable and efficient by reducing the cost of production and/or increasing yields.”
In addition, Howard Valentine, executive director of The Peanut Foundation, presented updates about genomics research and the progress made toward mapping the peanut genome. Last August, the NPB allocated $400,000 toward the Peanut Genome Initiative, which is in addition to the production research funded through state organizations and research institutions.
“Helping the industry produce better peanut varieties ultimately helps the producer reduce input costs and reduce our environmental footprint,” said Michael Davis, research committee chair and Florida delegate.
Funding production research to make America’s peanut farmers more competitive is a core part of the Board’s mission. To date, NPB has funded more than $18 million in production research.