Midwest Flood and Related Policy Developments

June 18, 2008 07:00 PM

via a special arrangement with Informa Economics, Inc.

Damage assessments; Gov't seeking outside advice

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

-- President Bush leads tour of flood region today: President George Bush, with USDA Secretary Ed Schafer and others joining him, will tour the Midwest flood region today. U.S. government analysts and officials have been meeting daily, with some working the weekends, regarding various options to deal with the impact of the floods and other weather-related and commodity market developments.

-- Outside industry officials have been consulted, including those from the seed, ethanol, and export sectors: Some information and opinions garnered from U.S. government inquiries to the private sector include the following, based on sources:

(1) USDA is being urged to announce as soon as possible an early out option without penalty for CRP participants, with as big a universe of potential acres as possible;
(2) some ethanol facilities have scaled back production beyond normal maintenance downtime;
(3) several industry analysts told USDA that their worldwide wheat feed use estimate is too low by several million tons, largely due to a belief that the EU will feed more of its wheat rather than import alternative grains;
(4) there is growing concern about an acreage battle for 2009 because of low carryover stocks for both corn and soybeans, and uncertainty about how much lower cotton acreage can and will go.

Meanwhile, sources report that lobbyists from the corn and hog industry recently met to discuss several industry topics "of mutual interest.”

-- State Executive Directors of the Farm Service Agency (FSA) filing in daily assessment reports: Bush administration contacts say a recent acreage assessment of "damaged or destroyed acreage” totaled 4.386 million acres, with expectations of additional acreage ahead on fear of the impact of more levee breaks.

-- Irrigation units damaged in Nebraska: Sources say hundreds of irrigation units in Nebraska were put out of commission due to high winds and will not be able to be back in operation anytime soon for several reasons, including a lack of needed parts for the damaged irrigation units.

-- Iowa's Gov. and Ag Secretary urge soybean planting deadline extension: Iowa Gov. Chester (Chet) Culver and Bill Northey, the state's Secretary of Agriculture, on June 16 wrote to Risk Management Agency Administrator Eldon Gould to ask for an extension of the crop insurance deadline beyond June 15 for planting soybeans and still receive full crop insurance coverage after massive flooding has wiped out millions of acres of crops. (The deadline for planting corn and receiving full crop insurance coverage passed on May 31.) The two Iowa leaders wrote that "It is critical that you move quickly to extend the final planting date for soybeans this year due to the dramatic number of acres affected by the wet weather. As we finally enter a period of dryer weather, farmers are going to making planting decisions very quickly. The flexibility to plant soybeans without the late planting penalty would be greatly appreciated.”

-- USDA reviewing additional feed assistance ideas for livestock, with current focus on hogs: Government sources advise it is not whether but how and when USDA announces additional measures regarding feed assistance to livestock producers. One source said a plan is being devised to aid the hog feed sector. Details are lacking at this time.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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