Bill Huffman
Director - Government Relations

The Friday Report

April 2, 2010

March 1 Planting Intentions Report

USDA issued its annual March 1 Planting Intentions Report this week. The report shows that U.S. rice farmers plan to plant 3,411,000 acres, up 9% from a year ago. Arkansas acreage is forecast to be up 10%, Louisiana up 9%, Mississippi up 10%, Missouri up 7 % and Texas up 7%.  Interestingly, USDA predicts 600,000 acres of rice will be planted in California.

By type of grain, USDA estimates long grain acreage will gain 12% this year, medium grain will be down 1% and short grain is estimated to be down about 2%.

As we’ve said before, the March 1 Planting Intentions Report is just a statistical guess at what rice acreage will be for the 2010 planting season. This report does not even consider the potential for “water sales” in California, which we understand could be as much as 30,000 to 50,000 acres. The report is developed from survey data USDA obtains from a small list of growers in early February.

With a declining market, the potential for 6-8 million cwt of California medium grain carryover from the 2009 crop, and the potential water sales it is hard to place any reliability in the forecasted 600,000 acres forecasted for California.

We should also note reports out of the South that soybean prices are strong which may lead to many rice farmers there changing their planting plans as planting season advances.

Farm Bill Dialogue

House Agriculture Committee Chairman Collin Peterson, D-Minnesota, was in Oregon this week speaking at a forum in Aurora. Peterson and fellow Agriculture Committee member Kurt Schrader, D-Ore, laid out an aggressive agenda for the Committee as it moves forward with hearings this spring and summer for development of the 2012 Farm Bill. 

As we were told a month ago in Washington, D.C., Peterson said, “There are a lot of people out there that don’t like the Farm Bill…..so we are going to take a look at it.  Whether we can convince people to change, we’ll see.  We are going to try!”

Peterson’s comments indicate that he expects another bruising battle over producer payments, payment limits and the crop insurance program all during a time with very large Federal deficits.  Peterson told Oregon growers that “I think we have to do it or someone else will do it for us, someone who doesn’t know what they’re doing.”

Peterson is pitching his idea that “growers can buy insurance that would fit their individual situation, whatever a grower’s situation might be. He is looking for a system where growers can have insurance to cover the cost of what growers have in their crop, or something close to it. If growers have a loss, they could cover their bank loan and be able to “farm another year”.  It sounds like the Chairman is going to pitch a program of “revenue insurance” as contrasted with the current payment program for producers.

Obesity and Farm Subsidies

Food activists and some so-called nutrition experts have claimed for years that farm subsidies and child obesity are linked. In a new study to be formally released in May at a conference at UC-Davis, scientists will share the results of a four year study that disproves that theory.

An analysis by researchers at UC-Davis and Iowa State University shows that there is no evidence that farm subsidies contribute to obesity in the U.S.

Julian Alston, a UC-Davis professor of agricultural economics said, “People like (food activist” Michael Pollan and others make claims that farm subsidies have a big impact on food commodity prices and availability, especially with things like corn, and that’s been a contributor to the growing obesity rate. Our project was to investigate that question and our conclusion is that’s not it”.

Professor Alston and other researchers will present their finds during a two-day obesity workshop May 21-22 at the UC-Davis conference center.

Easter

We send our best wishes to our friends and FRC members for a wonderful Easter. We hope you and your family have a relaxed and enjoyable day.