Commodities Outlook, Ag Policy Hot Topics at Conference

3/16/2013 7:00 AM
By Janice F. Booth Maryland Correspondent

ANNAPOLIS, Md. — It’s been two years in coming, and the audience was attentive and concerned at the 2013 Agricultural Outlook and Policy Conference held in Annapolis on March 8.

The progress of the 2013 Farm Bill in the Senate and House was an issue of primary concern. Additional hot topics were commodities prices, Monsanto’s expiring Roundup Ready patent on the national scene, Maryland’s septic tank legislation, the wind generation project and plant diversity protection.

Valerie Connelly, Maryland Farm Bureau’s director of government relations, provided a comprehensive overview of current legislative bills and topics of interest. Connelly urged interested parties to sign up for her weekly “Hotline” updates, available at www.mdfarmbureau.com/Hotlines.asp.

She spoke briefly about SB0675, the Maryland Pesticide Reporting and Information Act, which calls for the creation of a centralized database of pesticide use in the state.

A “solution without a problem,” she said, seems to be the general consensus on the bill, which ignores reporting problems, such as different names for the same chemicals. This is the fourth time the bill has been introduced, each time with a different sponsor.

Connelly announced that SB0521, Agriculture-Meat and Poultry-Antibiotic Use-Labeling, had been voted down. The bill would have required meat and poultry intended for human consumption derived from animals that are raised, processed and sold in the state to bear a label identifying each antibiotic that was fed or administered to the animal while being raised in the state.

Legislation concerning raw milk, genetically modified organisms labeling and septic remain under debate.

The Maryland Farm Bureau’s presentation was followed by Kevin McNew’s much-anticipated overview of commodity prices for 2013. McNew, president and founder of GeoGrain, is a cash market analyst whose weekly columns are published by the Bloomberg Report, Dow Jones and Reuters.

In his review of the grain market, McNew covered the corn, soybean and wheat markets. The over-arching messages were:

There is strong, international competition in the grain marketplace now from India and South America.

Fortunately, China’s demand for grain continues to grow at a steady pace.

International competition in the commodities market means weather patterns — predicting and following them — become more important to the U.S. producer.

Corn’s once-strong ethanol market has cut back, he said, noting the USDA predicts a 10 percent drop in the demand for corn ethanol. In fact, the U.S. use demand is at a 20- to 30-year low, he said. Ethanol plants in the Plains states are going idle or using wheat instead of corn.

The market for cattle feed is no brighter, due in part to the severe and persistent drought conditions across the Midwest and Plains, McNew said. Year-to-date, cattle-on-feed is 4.5 percent lower than last year, according to GeoGrain data.

The bright spot, if there is one, is that broiler chicks are up from last year, and thus the demand for feed corn will grow, he said.

U.S. soybean supply-and-demand predictions are a bit brighter. The U.S. is “ahead of pace” in export sales, McNew said. The U.S. export of soybeans to China has grown by 4 million metric tons per year since 2006.

So far, South America has had serious problems bringing their soybeans to the market, but McNew warns that Argentina and Brazil are aggressively tackling their distribution problems, and they’re expected to be bigger players in the global soybean market.

The U.S. wheat market is uncertain. Currently, wheat prices are below corn. The demand for feed in the U.S. market is low. Abnormal weather predictions for spring and summer could play a big part, McNew said.

GeoGrain works closely with Planalytics, a global weather predicting service. Planalytics predicts a continuation of the U.S. drought conditions.

In summary, McNew’s outlook for corn supply and demand is bleak; soybean’s market outlook, while uncertain, is a bit brighter; wheat faces “abundant global supplies” and strong market competition from India, Ukraine, Russia and the European Union.

Wyatt Thompson, an associate professor in the agricultural economics department of the University of Missouri, picked up the global market theme, discussing the connection in the marketplace between biofuels, grain and oilseed.

The impact of the controversial Plant Variety Protection Act and the recent Monsanto court battle were the focus of the Center for Agricultural and Natural Resource Policy researcher Paul Goeringer.

And while sequestration is in place but the effects remain unclear, Bart Fischer, chief economist to the U.S. House Committee on Agriculture, brought the attendees up to date on the House version of the 2013 Farm Bill.

Fischer’s report followed an update on the Senate’s version of the Farm Bill by Ann Hazlett, Republican chief counsel to the U.S. Senate Committee on Agriculture.

Regionally, Dave Newburn, a University of Maryland professor, brought the attendees up to date on Maryland’s new septic bill. Lori Lynch, director of the Center for Agricultural and Natural Resource Policy, spoke about the economic impact of agriculture in Maryland.<\c> Wyatt Thompson, an associate professor in the agricultural economics department at the University of Missouri, discusses the connection in the marketplace between biofuels, grain and oilseed.


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