Evening Report (VIP) -- February 28, 2013

February 28, 2013 09:08 AM


DROUGHT MONITOR REFLECTS MINOR IMPROVEMENT... According to the National Drought Monitor, 33.62% of the contiguous U.S. is drought-free, which reflects minor improvement from 33.16% last week. Minor improvement was made to the drought situation in Kansas, although some shifting in drought categories was noted in Oklahoma and Texas. While still completely covered by some form of drought, Oklahoma saw improvement in categories as 11.8% is now in "exceptional" drought, compared to 41.64% last week. In Texas, 5.17% of the state is covered by "exceptional" drought, down from 7.89% last week.

The monitor notes that 59.53% of the Midwest is covered by some form of drought, which represents a minor change from 60.22% last week. The monitor notes that snow and rain were common in the region from Missouri into Illinois last week. Further improvement to the Midwest and Plains should be reflected by next week's drought monitor after widespread snow fell across the regions this week. Click here for related maps.


USDA TO SURVEY FARMERS ABOUT 2013 PLANTING INTENTIONS... USDA's National Agricultural Statistics Service (NASS) recently mailed thousands of growers a survey regarding 2013 planting intentions as well as pork producers' hog and pig inventories and spring farrowing intentions. Participants can respond via mail or on NASS's secure website. The data that is compiled from the survey provides valuable data for the Prospective Plantings and Quarterly Hogs & Pigs Reports on March 28 and the ag industry as a whole. Therefore, your Pro Farmer editors urge you to take time out of your busy schedules to complete these survey in a timely manner. Get more details.


VILSACK: MEAT SHORTAGES LIKELY EVEN IF INSPECTOR FURLOUGHS STAGGERED... Even if USDA were to stagger meat inspector furloughs in the event of sequester-forced cuts, meat shortages would eventually arise, USDA Secretary Tom Vilsack said in an interview with Reuters TV. Vilsack insisted that under a sequester, furloughs of inspectors would be unavoidable, detailing "80% of the budget of food safety is personnel," with 88% of that group frontline personnel with 15% of the remaining portion of 20% of the budget supporting those frontline inspectors. "So nearly 87% to 88% of the budget is those frontline inspectors. So if you're going to basically cut 5% to 6% of your annual budget, you're obviously going to impact frontline inspectors," Vilsack continued.

Under a furlough of inspectors, Vilsack explained that meat and poultry processing lines could not operate. He said how this plays out on the supply front "depends on how this is all worked out and how many days we have to furlough and how we stagger those days." This is the first that Vilsack has mentioned staggering inspector furloughs, but he also acknowledged the furloughs would not take place immediately should the sequester occur. He also said inspectors have not been notified of any potential furlough because the sequester has not yet occurred, "but on March 1 or shortly thereafter we will begin that process." Get more details on what impact the sequester may have on agriculture, according to Vilsack.


UTEC TO INVESTIGATE OTHER COUNTRIES' FARM SUBSIDIES... U.S. trade officials have said the Interagency Trade Enforcement Center (ITEC) has started an expansive investigation into other countries' use of farm subsidies and whether they violate World Trade Organization (WTO) rules. A number of people believe this study is long overdue, as a 2011 study by DTB Associates points to skyrocketing use of farm subsidies in developing countries, such as Brazil, India and Thailand with little regard for WTO commitments.

Meanwhile, U.S. policies have been successfully challenged and producers penalized for violating WTO commitments. For instance, in recent years, Brazil won a WTO case against the U.S. government that had a marketing loan rate equivalent of 52 cents per pound. But according to a Texas Tech study, Brazil's government was using a minimum support price for cotton of 75 cents per pound.

Former Assistant U.S. Trade Representative Donald M. Phillips says the findings of such a probe could be useful for global trade negotiations going forward.

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