Evening Report (VIP) -- March 12, 2013

March 12, 2013 09:58 AM

NASS SUSPENDS CERTAIN REPORTS DUE TO SEQUESTRATION... USDA's NASS today announced it is suspending a number of reports for the remainder of the fiscal year (through Sept. 30) due to reduced funding caused by sequestration. The only report on the list your Pro Farmer Editors cover is the July Cattle Report. It's very disappointing -- although not surprising -- that we won't get this snapshot of the cattle industry during this critical time. Click here for a full report list.


EU: INCREASE IN ACREAGE COULD RELIEVE TIGHT SUPPLIES... The European Union Commission released its short-term outlook, which states an increase in fall-sown cereal and oilseed acreage could help relief the tight supply situation. The 2012 cereal grains harvest was about 5% lower than the previous year at 272.3 MMT and wheat production was down 4.2% to 123.2 MMT due to lower yields. But it reports wheat acreage for the 2013 harvest is up 2.2% in the EU-27. Based on an average yield, the commission sees potential for a cereal grains crop (usable production) of 291.1 MMT (up 6.9% from last year's crop) and for a 6.3% increase in wheat production. Click here for more.


AUSTRALIAN BUREAU NOTES 'VOLATILE' SOI... The Australian Bureau of Meteorology says as is typical for this time of year, the Southern Oscillation Index (SOI), which is used as a measure of ENSO (La Nina or El Nino), has been volatile. The recent increase in the SOI has been due to persistent high pressure weather systems in the central Pacific Ocean, but overall ENSO indicators generally continue and are expected to remain within the neutral range the next three months.


JOHANNS: WHY DIDN'T VILSACK REQUEST FUNDING FLEXIBILITY ON MEAT INSPECTOR FURLOUGHS?... Yesterday, Sen. Mike Johanns (R-Neb.) sent a letter to USDA Secretary Tom Vilsack asking why "one of your first options to avoid furloughs -- requesting funding flexibility in the Continuing Resolution -- was never pursued." Johanns points out Vilsack and USDA officials have requested more than $100 million in funding flexibility as part of the upcoming CR to fund the government for fiscal year 2013, including requests such as giving USDA funds to the Department of Interior to roundup wild horses and requested additional funds to process the 2012 Census of Agriculture. Considering this, Johanns asks, "Why would the administration have failed to submit a similar request in order to prevent the harmful consequences of furloughing food safety inspectors?"

"This lack of effort seems to suggest that there is no interest in resolving this issue. Instead, it seems that the threat of inspector furloughs is simply part of the administration’s broader messaging efforts to make the sequestration seem as painful as possible. Our country’s food safety and the livelihood of our nation’s meat producers should not be used as pawns in such a manner," Johanns continues.


EIA: GAS PRICES TO GRADUALLY DECLINE... In its updated Short-Term Energy Outlook, the Energy Information Administration (EIA) said it expects gasoline prices to gradually decline over the next two years. The agency expects lower crude oil prices to result in monthly average regular gasoline prices staying near their February average of $3.67 over the next few months, with the annual average gasoline price declining from $3.63 in 2012 to $3.55 this year and to $3.38 in 2014. Click here for more.


SENSIBLE SCHOOL LUNCH ACT AIMED AT PROVIDING SCHOOLS MORE FLEXIBILITY... In December, USDA agreed to ease its strict caloric intake rule for grain, starches and protein for 2012-13 and later extended this through 2014 in the new national school lunch and breakfast program to allow more consumption of meat and grains. This decision came in response to outrage by school administrators, food service directors, parents and students, as vocalized in a bipartisan letter spearheaded by Senators John Hoeven (R-N.D.) and Mark Pryor (D-Ark.). In an effort to make this change permanent, Hoeven recently introduced a bill, the Sensible School Lunch Act, that would require USDA to permanently retract a portion of the Healthy, Hunger-Free Kids Act to "give food preparers at our schools the flexibility to provide nutritious, satisfying meals for growing youngsters, and at the same time, address such important issues as childhood obesity and poor nutrition." The School Nutrition Association (SNA) has endorsed the Hoeven-Pryor bipartisan act.

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