ERS stated that, “Net farm income is forecast to be $95.7 billion, 10.3 percent above the $86.8 billion farmers are estimated to have earned in 2007 and 57 percent above the 10-year average of $61.1 billion [related graph].”
“A U.S. Department of Agriculture report tomorrow [today, Aug. 28] may show costs are accelerating as revenue growth slows, similar to a pattern that led to a 1980s farm crisis that was the worst since the Great Depression, said Gary Schnitkey, a University of Illinois farm economist. Corn, wheat and soybean prices are all at least 18 percent below their peaks.
“Fertilizer costs doubled from a year ago, while fuel increased 62 percent, USDA data show. Expenses probably will surpass the $279.2 billion that the USDA estimated in February, eroding net income the government pegged at a record $92.3 billion for 2008, farmers and economists said.”
The Associated Press reported today that, “Brazil plans to ask the World Trade Organization to impose punitive sanctions worth billions of dollars against the United States for handing out illegal cotton subsidies, its foreign minister said Wednesday.
“A precise sanction figure was still being calculated and had yet to be formally lodged with the World Trade Organization arbitration panel, Brazilian Foreign Minister Celso Amorim said in the Australian capital Canberra.”
Bloomberg news reported today that, “U.S. corn and soybean conditions worsened last week because of dry conditions in parts of the Midwest.
“The corn crop was rated 64 percent good or excellent as of Sunday, down from 67 percent a week earlier, the U.S. Department of Agriculture said Monday in a weekly report. Soybeans were rated 61 percent good or excellent, compared with 62 percent a week earlier.”
Reuters writer Doug Palmer reported on Saturday that, “World trade negotiators need to bounce back quickly from a failed meeting in July to have any chance of reaching a deal by the end of the year, the head of the World Trade Organization said on Friday.
“‘The good news is that they want to re-engage,’ WTO Director General Pascal Lamy said in an interview, referring to India and the United States, whose differences on agriculture led to the collapse of world trade talks last month in Geneva.”
The article explained that, “Lamy spoke to Reuters after meeting on Friday with U.S. Trade Representative Susan Schwab and several U.S. industry groups, including the National Association of Manufacturers and the U.S. Chamber of Commerce.
“Earlier this month, he traveled to New Delhi to explore India’s interest in restarting negotiations.”
Reuters writer Jonathan Lynn reported yesterday that, “The United States wants officials to resume international trade talks in September after a meeting of ministers collapsed without a breakthrough last month, U.S. trade chief Susan Schwab was quoted as saying.
“She said in an interview with specialist newsletter Inside U.S. Trade on Wednesday that senior officials from a small group of countries should meet next month to explore the possibility of restarting the Doha round negotiations at the World Trade Organisation (WTO).”
Neil Irwin reported in today’s Washington Post that, “Financial markets are frazzled, and the jobs situation is getting worse. But there is a surprising bit of good news for the economy in the months ahead.
“Prices for global commodities — oil, of course, but also a variety of metals, agricultural products and other raw materials — have been falling steadily since mid-July, after reaching record highs. Prices are still elevated, pinching consumers and businesses alike. But these modest declines should offer some relief to stretched American pocketbooks in the months ahead and help reverse some of the steep rise in inflation that occurred in the spring and early summer.”
Brian Gadd reported yesterday at the Zanesville Times Recorder Online (Ohio) that, “U.S. Rep. Zack Space (Ohio) kept up a busy ‘recess’ schedule Tuesday, by hosting the first of three town hall meetings throughout the 18th Congressional District.
“Space brought along Rep. Collin Peterson, chairman of the House Committee on Agriculture, to give an update on the latest legislative information on agriculture and the Farm Bill at the Ohio University Zanesville/Zane State College Campus Center.”
DTN writer Chris Clayton provided an overview of the hearing in an article from yesterday (link requires subscription) and noted in part that, “Despite various legislative proposals in Congress to change ethanol policies, Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said Monday he doesn’t see any plan getting approved this fall that would jeopardize the domestic ethanol industry.
“Lawmakers looking to lower prices of corn or gasoline have tossed out proposals to reduce the renewable fuels standard or lower the 54-cent tariff on imported ethanol. But Harkin pointed out that Congress has to deal with appropriations legislation and likely has barely a month to complete its work before breaking again for elections.
“‘With the abatement of high corn prices that have come down now, oil prices are down, things have eased a little bit so I don’t think you will see much debate this fall,’ Harkin, D-Iowa, said following a committee field hearing on food and fuel in Omaha.”
The DTN article indicated that, “Still, Harkin said the first major issues the next president will tackle will be winding down the war in Iraq, health-care policy and energy policy. Fights over ethanol and renewable energy will continue.
“‘It will be in full force next year,’ Harkin said.”
Louis Uchitelle reported in today’s New York Times that, “Exports are the bright spot this year in an otherwise bleak economy. But the world is not suddenly snapping up made-in-America goods like aircraft, machinery and staplers. The great attraction is decidedly low-luster commodities like corn, wheat, ore and scrap metal.”
The Times article explained that, “Commodity sales have been helped greatly this year by rising prices, particularly for grains, and also by the decline in the value of the dollar, which reduces the cost of American exports in other currencies. Both trends, however, have recently reversed, suggesting that the rise in commodity sales will not be sustained, and that exports might shrink, weakening the economy another notch.”
DTN writer Chris Clayton reported yesterday (link requires subscription) that, “Agriculture Secretary Ed Schafer is butting heads with members of Congress over actual language in the 2008 farm bill and what Congress argues is the intent or way some provisions on farm programs should be interpreted.
“Schafer told DTN on Thursday USDA is ‘getting a lot of heat’ from Congress because of efforts to cut off the smallest farmers from receiving direct payments or counter-cyclical payments. Though spelled out in the farm bill passed earlier this summer, Congress wants USDA to be more flexible in shutting off people from commodity programs due to the provision eliminating farmers who own 10 acres or fewer.
“In a similar vein affecting commercial-sized farmers, USDA is having an ongoing tug-of-war over how to interpret the Average Crop Revenue Election program, set to begin by the 2009 planting season. Schafer argues Congress budgeted ACRE one way, but that it wants USDA to implement the program another way.”
An update posted yesterday at the WTO Online stated that, “Director-General Pascal Lamy, in his remarks on the second day of the ‘Global Partnership for Development’ conference in New Delhi on 13 August 2008, said that the Doha Round should not collapse over the issue of the special safeguard mechanism in agriculture for developing countries. ‘A fine balance is required and the search for this fine balance requires that our negotiating resources continue at work,’ he added.”
The Associated Press reported today that, “The Doha Round of World Trade Organization negotiations can still be concluded by the year-end deadline, despite the collapse of talks last month in Geneva, WTO chief Pascal Lamy said in New Delhi.
“Echoing his optimism, Indian Commerce Minister Kamal Nath said his country is keen to resume the talks and complete the round. ‘The Geneva talks weren’t a failure, but a pause and hope that the talks will go forward,’ said Mr. Nath, who emerged as one of the dominant negotiators in the talks.
“The latest talks in Geneva collapsed after the U.S. couldn’t reach an agreement with China and India on developing countries’ ability to impose emergency tariffs on agricultural products to protect farmers from a sudden increase in imports.”
Reuters writer Jonathan Lynn reported yesterday that, “World Trade Organisation talks, which collapsed last month over a proposal to help poor farmers cope with a surge in imports, need to resume soon to build on existing compromises, the WTO farm mediator said on Monday.
Scott Kilman reported in today’s Wall Street Journal that, “In its most anticipated monthly crop report of the year, the U.S. Agriculture Department is expected Tuesday to show that June flooding didn’t damage Midwest farm fields nearly as much as originally feared.
“According to a survey of commodity brokerage firms last week by Dow Jones Newswires, grain analysts expect the USDA to forecast that U.S. farmers will harvest 11.94 billion bushels of corn this year, down from the record 13.07 billion bushels harvested last year.”
The Journal article noted that, “During the height of the flooding, which swamped parts of Iowa, Illinois, Wisconsin and Missouri, some analysts figured corn farmers might be able to produce only about 11 billion bushels. Corn futures prices soared to about $7 a bushel as traders contemplated that a harvest that size wouldn’t meet demand.
“Corn prices have since eased about $2 a bushel because weather conditions turned nearly ideal for plant growth after the June deluge ended. Yet corn prices remain twice as high as what they were for much of the decade, amid booming demand from ethanol fuel manufacturers. Before the flooding, many analysts had expected corn farmers to produce more than 12.2 billion bushels.”
With respect to soybeans, the article stated that, “Analysts expect the USDA to predict that farmers will harvest nearly three billion bushels of soybeans compared with the 2.59 billion bushels harvested last year. U.S. farmers planted soybeans on more acres this year in hopes of capitalizing on rising prices.”
Siobhan Hughes, Jessica Resnick-Ault and Lauren Etter reported in today’s Wall Street Journal that, “The Bush administration denied a request to reduce the amount of ethanol that must be blended into the U.S. gasoline supply, dealing a setback to food producers, livestock ranchers and others who say the mandate is contributing to high food prices.
“The decision marks a victory for U.S. corn growers and ethanol makers. But it is unlikely to settle the broader debate over U.S. biofuels policy and the degree to which the U.S. should continue to subsidize alternative fuels such as corn-based ethanol. Within minutes of the administration’s announcement, groups representing poultry producers, livestock farmers and other industries vowed to take their case to Congress and the next presidential administration.”