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NGF JOINS 130 ORGANIZATIONS IN USDA LETTER URGING PENALTY-FREE EARLY OUTS OF CRP LAND NOW! The Nebraska Grain and Feed Association (NGF) joined over 130 other non profit trade associations and private and cooperatively owned agribusinesses to urge the USDA to allow penalty free release of certain Conservation Reserve Program (CRP). While USDA’s decision to open CRP to haying and grazing was a positive step, the Agricultural Alliance for Growth and Competitiveness (AAGC) letter stated that it will not adequately alleviate the direct pressure on the livestock industry or the increased feed cost pressures on other segments of agriculture and food industries. “The organization and companies signing this letter believe that stronger measures must be taken very soon to ensure that grain and oilseed production more adequately meets the demand for food and feed. Some of the 1.2 million acres that have CRP contracts expiring this September will be put back into crop production. However, many times that acreage amount will be needed to begin to bring better balance for the supply/demand of grains and oilseeds.” The AAGC letter pointed out that early-out, penalty-free release of non-environmentally sensitive CRP cropland would be a significant positive step to encourage increased supply which would allow producers to more fully benefit from strong market demand. “Delaying a decision until the August crop report will be too late to provide a timely option for many CRP contract-holders take the necessary investments in time and equipment to ready land for production for this fall and next spring,” the letter said. The need for additional acres is reaching a peak as production levels shift and stocks remain low. The following points were noted: § For wheat, the Department expects global stocks to remain at historic lows, despite a projected increase in U.S. production. In addition, disease problems in portions of the U.S. wheat crop currently being harvested will reduce yields and quality. § For corn, domestic production is expected to decline by 34 million metric tons to 298 million metric tons in 2008/09, even though bio fuel demand for corn will increase over the same timeframe. This dynamic helps explain the Department’s estimate that ending U.S. stocks for corn will fall approximately 50 percent. § While production for soybeans will increase in 2008/09, USDA reports expect that a 14 million metric ton increase in production will only raise stock levels 1.3 million metric tons. § Corn/wheat for feed usage are forecast to decrease by more than 12 percent for 2008/09. For animal agriculture to cut production by 12 percent will require severe economic hardship on these producers while further pressuring consumer food prices to move even higher. Based on USDA estimates, corn, wheat, and soybean supplies will remain incredibly tight leaving no room for a poor harvest. Yet, we know production levels will be less than expected given the flooding in the Midwest. In Iowa, for example, some reports estimate that as much as 20 percent of the corn crop will be damaged. NGF member companies and affiliates are urged to write their own letters supporting the early CRP release.
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