Egypt Rejects More Wheat Cargo

Egypt has rejected another wheat cargo, just as the government looked set to end confusion over how much of the fungus known as ergot would be allowed in imports.

The biggest wheat buyer turned away a 33,000-metric-ton cargo of U.S. wheat from Venus International on June 13 after finding ergot, the company’s Chairman Mohamed Abdel Fadil said by phone. Egypt made similar rejections earlier this year of French, Canadian and Polish cargoes containing the naturally occurring fungus.

That, and conflicting statements from different parts of the government over what would be permitted, roiled the wheat market and led many traders to withdraw their offers or charge higher prices. While the Cabinet this week said it backed allowing shipments containing 0.05 percent ergot -- the international standard -- a spokesman for the Agriculture Ministry today said it will apply a zero-tolerance policy until a new decree is issued.

"We were hoping the shipment would be allowed in after the Prime Minister’s decree, but that didn’t help," Fadil said. The cargo contained 0.002 percent ergot, Fadil said, citing health ministry documents.

Ministry Comments

Agriculture Ministry spokesman Eid Hawash on Thursday said he wasn’t aware that a shipment had been rejected. Yesterday, he said an official decree ordering the quarantine office to accept a level of 0.05 percent ergot was expected. Ministers of supply, agriculture, trade and health met with Prime Minister Sherif Ismail the day before to discuss wheat policy. The decree still hasn’t been issued, Hawash said.

Egypt buys massive amounts of wheat every year, both through international tenders and from local farmers, to provide subsidized bread for citizens.

"We won’t allow any shipment with the slightest trace of ergot before we receive a decree from the Cabinet instructing the ministry to apply a 0.05 percent policy,” Hawash said today.

U.S. Sales

Egypt has imported little wheat from the U.S. in recent years, buying from Europe and the Black Sea region because of price competitiveness and improving quality, said Jay O’Neill, senior economist at Kansas State University’s International Grains Program Institute. The U.S. exported 41,798 metric tons to Egypt in the marketing year that ended June 1, compared with 386,873 tons in the prior season, U.S. Department of Agriculture data show.

Egypt’s recent rejections of European and Black Sea cargoes, as well as quality concerns for the coming crop, provided “a window of opportunity” for a U.S. sale, O’Neill said.

“I don’t see it to be a flood of new business for the U.S.,” he said in a telephone interview. “As they reject these cargoes, it’s going to make everybody very leery about selling to Egypt. The trade right now is terribly disappointed that this internal dispute and controversy still continues to take place.”

Unnecessary and burdensome regulations will leave Egypt with more than $860 million in direct costs and lost export earnings this year, while its citizens pay more for their food, the USDA estimated in a report this month. The agency cited costly tender requirements and confusion over wheat-import policies as factors.

Wheat futures for September delivery fell 1.4 percent to close at $4.6575 a bushel on the Chicago Board of Trade, after touching a two-month low.

NILE Merit Heifer Program Accepting Applications

BILLINGS, MONT.--This year the NILE will select 25 recipients for the Merit Heifer Program and match them up with donors from across the region. Applications are being accepted now. 

The NILE Merit Heifer program is a "live animal" scholarship that strives to help youth get a start in the beef cattle business by awarding heifer calves to participants chosen based on merit, future goals, and ability to care for the animal. Any youth ages 12-16, who are a 4-H or FFA member, may apply. Applicants are not limited to Montana residents.

During the program duration, participants are responsible for raising the heifer, arranging for her to be bred, completing the record keeping procedure and bringing the animal back one year later as a bred replacement heifer for exhibit at the NILE Stock Show in October.

"This program would not be possible without the generous support of our donor ranchers and we are very grateful to them,"  commented Bill Pelton, Merit Heifer Chairman.

The NILE Merit Heifer Selection Committee is requests: 

-filled out application 

-character references

-written essay

- NILE JR. Membership

-a 3-5 minute YouTube video.  

The video should include, but is not limited to: an introduction, facility tour, current 4-H/FFA projects, goals and objectives for the Merit Heifer, and the video must be voiced by the applicant. An example YouTube video can be seen here.

Applications and YouTube video must be received no later than 5 p.m. June 30, 2016. An application is available online at  www.thenile.org or by calling the NILE office.  In addition to applications from eligible kids, the NILE is also accepting information from ranches wishing to donate a heifer calf.

For more information regarding the NILE Merit Heifer Program, please email Shelby at shelby@thenile.org or call the NILE Office at (406) 256-2495

Winter Wheat Yield Predicted to Break Records

The United States Department of Agriculture (USDA) Economic Research Service (ERS) predicts in a recent report that due to excellent growing conditions over much of the United States, particularly in the Great Plains region, the winter wheat average yield is now projected to be a record high 50.5 bushels per acre, with total production projected at over 1.5 billion bushels. Additionally, despite an 8-percent year-to-year decline in production area, this improved outlook for winter wheat will increase 2016/17 aggregate wheat production by 25 million bushels over the 2015/16 crop. According to the report, declines in planted acres have been offset by higher yield gains as compared to last year’s crop and a higher projected harvest-to-planted ratio. As of June 1, the winter wheat expected harvested area is 29.831 million acres, down 2.4 million acres from last year, but the projected harvest-to-planted ratio is 82.4 percent, slightly higher than 2015’s 81.7 percent. Despite some reports of bad weather and disease, the quality of the 2016/2017 winter wheat crop also remains high, with 62% of the winter wheat reported to be in “good” to “excellent” condition for the week ending June 5. In contrast, the spring wheat production for 2016 is projected to decline 16 percent based on lower planted area, relative to 2015. As of June 5, 96 percent of the spring wheat crop had emerged in the major wheat-cultivating states, which is well above the 5-year average pace of 78 percent. As with winter wheat, reports have stated that 79 percent of the crop is rated “good” to “excellent”. Overall, the weather in winter and spring wheat growing regions has provided excellent conditions for the cultivation of wheat, pushing the entire wheat yield to almost 50 bushels per acre. More information and analysis can be found by visiting the Economic Research Service website. 

USDA Department of Interior Announces Funding for Water and Energy Efficiency

The U.S. Departments of Agriculture (USDA) and Interior (DOI) today announced more than $47 million in funding to help water districts and producers on private working lands better conserve water resources. The funds include $15 million in USDA funds and $32.6 million from the Bureau of Reclamation for local projects to improve water and energy efficiency and provide a strengthened federal response to ongoing and potential drought across 13 states in the West. The Bureau of Reclamation funding supports 76 local projects through the DOI's WaterSMART program. Funding from USDA's Natural Resource Conservation Service (NRCS) will support on-farm water delivery system improvements through its Environmental Quality Incentives Program, in tandem with the DOI WaterSMART funded competitive grant projects and cost share grants.
 
More details on the program and projects announced today can be found on the WaterSMART Water and Energy Efficiency Grants website and on the Drought Response Program website. Through EQIP, NRCS is providing $5.2 million in on-farm assistance to complement several projects that have been funded previously by BOR, and will provide an additional $10 million in 2017 to support some of the Reclamation projects announced today. 

US Meat Production Numbers Released For May

Commercial red meat production for the United States totaled 4 billion pounds in May, up 5 percent from the 3.81 billion pounds produced in May 2015.

Beef production, at 2.03 billion pounds, was 5 percent above the previous year. Cattle slaughter totaled 2.51 million head, up 6 percent from May 2015. The average live weight was up 1 pound from the previous year, at 1,333 pounds.

Veal production totaled 6.0 million pounds, 9 percent below May a year ago. Calf slaughter totaled 35,500 head, up 7 percent from May 2015. The average live weight was down 49 pounds from last year, at 286 pounds.

Pork production totaled 1.95 billion pounds, up 5 percent from the previous year. Hog slaughter totaled 9.18 million head, up 5 percent from May 2015. The average live weight was down 1 pound from the previous year, at 283 pounds.

Lamb and mutton production, at 13.0 million pounds, was up 9 percent from May 2015. Sheep slaughter totaled 185,300 head, 9 percent above last year. The average live weight was 140 pounds, down 1 pound from May a year ago.

January to May 2016 commercial red meat production was 20.2 billion pounds, up 3 percent from 2015. Accumulated beef production was up 4 percent from last year, veal was down 6 percent, pork was up 1 percent from last year, and lamb and mutton production was up 1 percent.

Feds come to Colorado to bestow $44 million to boost drought resilience

As temperatures set records around the arid southwest, Obama administration officials will head to the South Platte River north of Denver on Thursday to launch $44 million in projects aimed at boosting resilience to drought.

Federal officials said grants that will be awarded Thursday will help water providers and agricultural producers do more with less water on private land in 13 Western states. This is being done under President Barack Obama’s order to build up the nation’s capabilities for withstanding long-term drought.

“By working with communities and producers to more wisely manage the water they have, we help ensure that this and future generations will have sufficient supplies of clean water for drinking, agriculture, economic activities, recreation and ecosystem health,” Agriculture Secretary Tom Vilsack told The Denver Post.

Water supplies are strained, with 50 million westerners relying on the oversubscribed Colorado River. Key reservoirs have reached record-low levels.“As drought continues across the West, our farmers and ranchers are stepping up to the plate to partner with communities and strengthen efficiency to better conserve our water supply.”

Estevan Lopez, commissioner of the Bureau of Reclamation, will join Vilsack on Thursday in Brighton.

Water-saving projects in Colorado are among those expected to benefit. Those projects include:

• The Cottonwood Water and Sanitation District will receive $300,000 for a $4 million effort to develop a treatment system that can remove selenium from concentrated discharges at its wastewater treatment plant.
• The Grand Valley Water Users Association in Grand Junction will receive $300,000 for an $800,000 effort to install a polyvinyl liner along a canal.
• Larimer and Weld county farmers will receive $1 million toward a $3.6 million project to automate irrigation canal gates aimed at doing more with less water.
•  The Uncompahgre Valley Water Users Association in Montrose will receive $1 million for a $6.8 million project to install a hydroelectric facility along an irrigation canal.

Washington Insider: Brexit and Ag

The main press focus this week is today’s vote on whether Britain should leave the EU.

In fact, agriculture will be involved either way, Bloomberg says, since the vote could have a major impact on trade policies of the U.S. and Britain. Still, in Washington, agricultural policy makers have been quiet on the issue, likely because the trade itself is modest, but could be significant, Bloomberg says.

The article comments on the general lack of ag involvement. For example, influential agriculture policy groups such as the National Farmer's Union and the Farm Bureau haven't weighed in on the issue publicly, Bloomberg says and notes that Senate Agriculture Committee Chairman Pat Roberts, R-Kan., declined to comment on how a vote to “leave” would affect ag trade with Britain.

Also, the administration isn't wringing its hands either about a potential UK pullout, Bloomberg says.

Secretary Vilsack also has downplayed the vote’s importance, arguing that, “I think there are far more comprehensive issues relating to the EU and the UK's role in the EU and obviously the people are going to make a decision that they think is in their best interest,” he told the press last week.

He went on to note that he is more concerned with completing the Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations that have been moving slowly for years and listed several trade issues he sees as are more important than today’s vote.

President Obama was less sanguine. Beyond agricultural trade, leaving the EU would likely require Britain to strike new trade deals with the U.S., but Britons might have to wait, he said.

“Maybe some point down the line, there might be a UK-U.S. trade agreement, but it's not going to happen anytime soon because our focus in negotiating is with the big bloc, the European Union, to get a trade agreement done, and UK [could be] going to the back of the queue,” Obama said during an earlier press conference with British Prime Minister David Cameron.

Indeed, agricultural trade between the U.S. and UK is small but it makes up a significant percentage of sales to the EU.

Still, “Agriculture trade with Britain shouldn't be seen as some insignificant gnat,” James P. Moore Jr., managing director of the Business, Society and Public Policy Initiative at Georgetown's McDonough School of Business, told Bloomberg. In 2012, the UK was a net importer of food and bought $2.4 billion in US agriculture, fish and forestry products. That's compared to $8.1 billion in U.S. agricultural exports to major EU members as a whole. Most U.S. agricultural exports to Britain and the EU are bulk commodities, while the U.S. imports tend to be high-value, consumer-oriented agricultural products, the USDA says.

Moore points out that agriculture is a cornerstone of the European Union, and Britain’s exit would leave a policy vacuum that may be difficult to fill. “Where agriculture is concerned, it was very much the anchor in so many ways to the creation of the European Union,” Moore said.

Britain's exit would certainly affect the bloc’s ag policy and has been a factor in the “exit” debate. Many UK farmers oppose EU rules. “What's gotten the farmers a bit angry is that, for the past few years, there have been efforts in Brussels to limit subsidies and get involved in regulations dealing with the environment,” Moore said.

Were the UK to drop out of the multistate agricultural system, it would leave U.S. regulators and trade officials looking toward the UK government for an indication of what new regulatory structure would emerge, and analysts in the US have yet to predict what that would be, Moore said.

“There is such a view of the unknown that we are literally writing a brand new chapter in economic and political history, and it's going to create just a mess in regard to how we put back some pieces of the puzzle,” Moore said.

The EU’s Common Ag Policy has long been seen as highly protectionist, but it has been broadly supported by many in US geopolitical circles because it served at least partially to unite formerly bitter enemies and warring states.

Thus, if the EU decides to go its own way now, it likely will mean much greater socioeconomic uncertainty across the region that could also face other stresses especially affecting relations with the Middle East and Russia, as well as the US. While it may be too early to estimate the specific impacts on US-EU ag trade, it would seem that most impacts would be negative and possibly significant, and certainly should be watched closely should they occur, Washington Insider believes.