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Crop storage issues may be less severe than anticipated

Published October 20, 2014

URBANA, Ill. – The large size of fall-harvested crops in the United States has raised very real concerns about the ability to readily store the record supply of crops available this year. According to a University of Illinois agricultural economist, supplies that exceed permanent storage capacity require the use of temporary storage facilities or may require delayed harvest in some circumstances. However, weather-related harvest delays to date and a rapid rate of consumption mean that overall storage issues may be less severe than feared this year.

“The supply of crops to be stored in the fall of the year consists of the inventory already in store as well as the newly harvested crops,” explained Darrel Good. “The USDA’s September Grain Stocks report showed the inventory of feed grains, wheat, and soybeans on Sept. 1, 2014, at 3.528 billion bushels, 422 million bushels larger than the inventory of the previous year.  The October Crop Production report estimated that the corn, sorghum, and soybean harvest would total 18.806 billion bushels, 1.134 billion bushels larger than last year’s harvest. The fall supply of feed grains, wheat, and soybeans is estimated to be 22.334 billion bushels, 1.556 billion bushels larger than the supply of a year earlier. The majority (62 percent) of the total year-over- year increase in supply comes from larger corn supplies.”

Each year, the USDA provides an estimate of on-farm and off-farm grain storage capacity based on surveys conducted in December. Total storage capacity as of Dec. 1, 2013, was estimated at 23.44 billion bushels. “Some additional capacity has been added in 2014, but the total fall crop supply this year likely represents about 95 percent of total storage capacity,” Good said. “While overall storage capacity appears to be fully adequate to handle the available crop supply, issues develop because some of that capacity is occupied by other crops and, more important, the location of available storage capacity does not always align with the location of fall-harvested crops. Still, not all of the supply has to be stored.  Harvest occurs over a relatively long period of time, and crops are continually consumed.”

Good said that harvest has proceeded more slowly this year than in the recent past due to wet weather in some major producing areas. As of October 12, the USDA estimated that only 24 percent of the corn acreage had been harvested, compared to the previous 5-year average of 43 percent. That average includes 2009 when only 13 percent of the acreage had been harvested as of the same date. Soybean harvest has been a little more timely but was estimated at only 40 percent complete as of October 12, compared to the previous 5-year average of 53 percent. The slower pace of harvest has allowed for more crops to be consumed as harvest progresses, reducing the overall requirement for storage space.

Based on USDA weekly export inspection estimates, Good said that the exports of feed grains, wheat, and soybeans from Sept. 1 through Oct. 16 totaled about 625 million bushels. Based on the USDA’s projection of feed and residual use of corn for the 2014-15 marketing year and the recent seasonal pattern of that use, about 1.225 billion bushels of corn were likely used in that category during that same time period. Similarly, about 800 million bushels of corn were likely used for domestic food and industrial products, mostly ethanol. Feed and residual use of other feed grains and wheat was likely near only 50 million bushels as residual use of wheat is often negative during the fall quarter. Based on the National Oilseed Processor Association (NOPA) estimate of the domestic soybean crush for September and assuming a normal seasonal increase in October, about 170 million bushels of soybeans were likely processed during that time period. Based on a typical seasonal pattern, seed, feed, and residual use of soybeans was likely near 150 million bushels. Food and industrial use of wheat and feed grains other than corn would have been near 180 million bushels if use followed a typical seasonal pattern.    

“In total, it is likely that consumption of feed grains, wheat, and soybeans during the period from Sept. 1 through Oct. 16 totaled about 3.2 billion bushels, or about 69.6 million bushels per day,” Good said. “That pace of use continues so that nearly 16 percent of the total fall crop supply has already been consumed. That magnitude of consumption has substantially reduced the requirement for crop storage capacity, resulting in a modest strengthening of the corn and soybean basis in many areas.”

Good concluded that while overall crop storage issues may be less severe than anticipated, regional issues persist. “In addition, a more rapid pace of harvest, particularly for corn, is expected to occur this week and beyond as weather conditions remain favorable over much of the production area,” Good said. “A rapid pace of harvest would be expected to keep basis levels for corn and soybeans seasonally weak. A typical post-harvest recovery in basis levels, however, is expected.”

 

 

NCR-SARE Grant Programs accepting proposals

Published October 17, 2014

URBANA, Ill. - The North Central Region Sustainable Agriculture Research and Education Program (NCR-SARE) has announced that the call for proposals is now open for four grants offered by the program. 

Farmers and ranchers in the North Central Region are invited to submit grant proposals to explore sustainable agriculture solutions to problems on the farm or ranch. Proposals should show how farmers and ranchers plan to use their own innovative ideas to explore sustainable agriculture options and how they will share project results.

Sustainable agriculture is good for the environment, profitable, and socially responsible. Projects should emphasize research or education/demonstration.

NCR-SARE is accepting proposals for the following grants:

  • The Research and Education Grant program - Individual grants range from $10,000 to $200,000. NCR-SARE expects to fund about seven to ten projects in the twelve-state North Central Region. Deadline: October 23, 2014.
  • The Partnership Grant program – The SARE Partnership Grant program is new and is intended to foster cooperation between agriculture professionals and small groups of farmers and ranchers to catalyze on-farm research, demonstration, and education activities related to sustainable agriculture. Individual grants are limited to $30,000. For the current year funding of the Partnership Grant Program, up to $200,000 of the partnership grant pool of $340,000 in funds is available for projects focused on cover crops and soil health. For consideration under the cover crops and soil health funding, applicants are asked to use cover crops and/or soil health in their project title and to make the topic of cover crops and/or soil health the main focus of the application.  For the remaining funds of $140,000 or more, other project topics appropriate to the NCR-SARE program will be considered for funding. Deadline: Oct. 30, 2014.
  • Youth Educator Grant program – Youth Educator Grant projects provide opportunities for youth in the North Central Region to learn more about sustainable agriculture (farming and ranching that is ecologically sound, profitable, and socially responsible). Educators use the grants to encourage young people and their parents to try sustainable practices and see sustainable agriculture as a viable career option. Projects should help youth discover that sustainable farming and ranching is profitable; good for families, communities, and their quality of life; and good for the environment long term. The maximum amount for grants is $2,000, and a total of approximately $20,000 is available for this program. Deadline: Nov. 13, 2014.
  • The Farmer-Rancher Grant program - There are three types of competitive grants: individual grants ($7,500 maximum), partner grants for two farmers/ranchers from separate operations who are working together ($15,000 maximum), and group grants for three or more farmers/ranchers from separate operations who are working together ($22,500 maximum). NCR-SARE expects to fund about 45 projects in the 12-state North Central Region with this call. A total of approximately $400,000 is available for this program. Deadline: Nov. 20, 2014.

Interested applicants can find the call for proposals online, as well as useful information for completing a proposal at www.northcentralsare.org. Find more information about sustainable agriculture at http://www.sare.org/.

The focus of the NCR-SARE grant programs is on research and education, and these grants are all highly competitive. Funding considerations are made based on the relevance and potential of the project to increase the sustainability of agriculture in the region, as well as how well the applicant articulates the research and education components of their sustainable agriculture grant proposals.

For more information, contact SARE state coordinator Richard Weinzierl at 217-244-2126 or weinzier@illinois.edu or Mary Hosier at 217-333-7512 or mhosier@illinois.edu.

First recipient of award supporting the advancement of women in plant science recently named

Published October 16, 2014
Robb Fraley, left, introduces Laura Chatham, center, as the first recipient of the Fraley Borlaug Scholars in Plant Science scholarship. Photo by Miranda McCarthy, College of ACES.

URBANA, Ill. – The first recipient of the Fraley-Borlaug Scholars in Plant Science scholarship, established to support women studying plant biology and biotechnology in the College of Agricultural, Consumer and Environmental Sciences at the University of Illinois, was recently announced.

Laura Chatham, a first-year Ph.D. candidate in the Department of Crop Sciences, was introduced as the first Fraley-Borlaug scholar during ACES’ annual Salute to Ag Day on Sept. 6. The scholarship was established by Monsanto and U of I alumnus Robb Fraley, who serves as Monsanto’s executive vice president and chief technology officer. Fraley, who was named one of three 2013 World Food Prize laureates, announced last year that he would use his share of the financial award, along with a match from Monsanto, to establish the endowment, initially totaling $250,000 for the College of ACES.

Fraley said establishing the endowment was not only a way for him to help with an under-representation of women in plant science and biotechnology, but a way to honor Norm Borlaug, recognized as the father of the Green Revolution and as having saved one billion lives as a result of improved wheat production. Borlaug created the World Food Prize in 1968 to honor those who make significant contributions to improving the world’s food supply.

“I knew Norm Borlaug very well during the last 20 years of his life. One of Norm’s passions was education, and he spent a lot of time training students,” Fraley said. “After I won the World Food Prize, I was looking for a way to recognize Norm. I have a personal passion for diversity and ensuring that there are more women in agricultural sciences. Establishing this award blended my experience and relationship with Norm and my own passion.

“As I look around the world, particularly in Africa, women play a real and important role in agriculture and the decision making. In North America, we are seeing a whole new renaissance of women in agriculture, I think particularly because of an interest in food security and food production,” he said.

Fraley added that particularly in the areas of plant breeding and agronomy, there is a need to have women who are trained in those sciences who can move into the workplace. “There is an opportunity for many more women to enter and provide leadership in a historically male-dominated industry. I hope this scholarship encourages more women to get degrees and move into that space,” he added.

Chatham’s research at U of I will be focused on replacing artificial dyes in food with natural colorants developed from corn. She will also work with Jack Juvik, a professor in crop sciences, researching cancer-preventative properties in brassica vegetables.

The newly named scholar said she sees the value in an award aimed at encouraging women to study in this field. “There is a disparity between the number of men and women in the STEM fields, and I’m not sure why the numbers still haven’t evened out,” she said. “Maybe this award will help in removing some of the obstacles for women getting into this field, and maybe it will inspire women to take this route when they might not have.

“It’s encouraging that such a successful company has realized this and is supporting women in an area that has long been male dominated,” she added.

Juvik said that currently about 38 percent of graduate students in crop sciences at U of I are women, a number that is up from 10 percent just 10 years ago, he added.

“The establishment of this scholarship sets a theme that is very important. By far the majority of students who graduate with specialties in plant breeding and genetics in our department, and others, are men. There is a real issue about women and their roles in agriculture in a number of countries. Much of the agriculture in developing countries is affiliated with women so it would be helpful to have women in positions of leadership that other women can look up to. These leaders could influence agricultural processes that would lead to improved sustainability in the food supply,” Juvik said.

He added that this endowment will provide opportunities for women to gain training and confidence to perform and provide leadership not only for their gender but for plant breeding and food sustainability for the future.

Chatham will be joining Fraley and others this week at the 2014 World Food Prize Borlaug Dialogue Oct. 15 -17 in Des Moines, IA, where she will again be recognized as the recipient of the scholarship. This year’s dialogue will address the challenge of sustainably feeding nine billion people on our planet by the year 2050.

“There has never been a more exciting or more important time to be in agriculture with the challenge that the planet faces with the food supply,” Fraley said. “It’s going to take all the innovation and tools possible. It’s not only a noble mission but a great area from the point of view of a great career to participate in. The science is changing very dramatically, and all of the phenomenal advances in biology and information technology we’re seeing coming together on the farm leads to the recommendation that no matter what aspect of agricultural research or science you’re involved in, having a broad training background that encompasses both biology and information technology is key.”

A new recipient of the award will be chosen each year, and Juvik said he would like to see international students be considered for the fellowship as well.

Read more on the Fraley-Borlaug Scholarship and women in agriculture on a recent blog written by Fraley at http://monsantoblog.com/2014/09/10/launching-the-fraley-borlaug-scholars-in-plant-science-scholarship/

News Source:

Jack Juvik, 217-333-1966

Social trust eroded in Chinese product-tampering incident

Published October 14, 2014
rice bowl with chopsticks

URBANA, Ill. - For about a decade, Chinese consumers weren’t getting what they paid for when they purchased Wuchang, a special brand of gourmet rice that has a distinct scent. The quality was being diluted when less expensive rice was aromatized, packaged in the same way as the high-quality rice, and sold at the premium price. Researchers at the University of Illinois studied how the tampering scandal affected the public’s perception of risk and their subsequent behavior.

Because public anxiety over the fake rice issue was more pronounced in urban districts, the researchers interviewed the residents of the city of Xi’an, ultimately analyzing the survey responses of 225 people.

“Over half of those we interviewed were aware of the product tampering, but only very vaguely,” said U of I agricultural communications professor Lulu Rodriguez. “They rely much more on interpersonal communication with friends and family members for information.”

The study also showed that although people didn’t understand the details or potential health risks that the tainted rice may cause, the public’s perception of risk remained high.

“In this case, their trust of social institutions, such as the government, food safety regulators, and the mass media was eroded,” Rodriguez said. “This incident came in the wake of other food safety scandals in China. In the interviews, we heard people say, ‘we are left to fend for ourselves.’ They had to make do with informal information channels because the government cannot be trusted. In the meantime, the government placed the blame on local agencies.”

Rodriguez explained that rice retailers knew the product tampering was taking place. “Production was not jiving with what was being sold,” she said. About 800,000 tons of Wuchang rice were produced but up to 10 million tons were on the market. Adding a pound of fragrance to ten tons of rice allowed the lower-quality rice to pass as the more expensive Wuchang brand. When the Chinese Central TV finally broke the story, it immediately assured the public that the government will swiftly deal with the culprits, but that wasn’t good enough to calm the public’s anxiety.

“Fortunately, there wasn’t any real health risk, but that didn’t stop residents from thinking about health-related concerns,” Rodriguez said. “It is food, after all, and the public didn’t know exactly what was being added to the rice. This goes to show that a strong public perception of risk, even if it is incorrect or has no factual basis, still means food safety regulators have a hefty communication problem.”

Although their knowledge level about the risk was low, the uncertainty of the situation and belief that they were subjected to an involuntary risk was high enough that people’s behavior shifted to not buying the rice.

“More openness is needed, especially in times of ambiguity,” Rodriguez said. “This incident reminded me of the way the SARS epidemic was handled in the Chinese mainland, in which the government delayed notifying the World Health Organization of the outbreak for three months. Keeping quiet about topics that may be perceived as posing undue risks just makes people more nervous.”

Rodriguez said that the problem was compounded because no one took ownership of the scandal. “The government seemed to think all it had to do was assure the public it’s doing its best. But exactly what it was doing was never made clear. The lack of information created high anxiety, particularly in urban districts where rice outlets are concentrated,” she said. “We also noted that although people were aware of the incident, they were very reluctant to speak out about it, fearing possible repercussions.”

As an agricultural communications educator, Rodriguez views this incident as a teachable moment.

“There is a window of opportunity for us,” she said. “There are students from China who come to the University of Illinois for undergraduate and graduate studies. Our task is to train a cadre of communicators with the technical ability and the communication savvy to report on incidents like this. Trust is very difficult to build but very easy to destroy. There are, however, mechanisms that can help re-establish trust.”

 “Social trust and risk knowledge, perception and behaviours resulting from a rice tampering scandal” was published in an issue of International Journal of Food Safety, Nutrition and Public Health and written by Lulu Rodriguez, Jing Li, and Sela Sar.

How many acres of corn are needed in 2015?

Published October 13, 2014

URBANA, Ill. – One of the functions of crop markets is to direct planting decisions of U.S. producers. That process begins with fall seeded crops, primarily winter wheat, and continues through the following spring. According to a University of Illinois agricultural economist, the market’s assessment of the amount of acreage needed of various crops in any production cycle is complicated and continually changes.

“Providing direction for planted acreage requires anticipating the level of old-crop inventories available for the upcoming marketing year, the magnitude of consumption during the upcoming marketing year, the likely average yield, and the desired level of year-ending stocks,” said Darrel Good. “For corn, these factors all currently suggest that fewer acres of corn will likely be needed in the U.S. in 2015.”

In the October 10 World Agricultural Supply and Demand Estimates (WASDE) report, the USDA projected that stocks of old-crop corn at the start of the 2015-16 marketing year will be at a 10-year high of 2.081 billion bushels even with record large consumption of 13.655 billion bushels. 

“Based on the pattern of USDA yield forecasts in previous years when the U.S. average yield was well above trend value, as is the case this year, many expect that the final yield estimate this year will exceed the October forecast of 174.2 bushels,” Good said. “If the final 2014 production estimate is larger than the current forecast and consumption is near the current forecast, year-ending stocks may be near 2.2 billion bushels. The large 2014 crop and the buildup in stocks are expected to result in a 2014-15 marketing-year average farm price in the low- to mid- $3 level, well below the cost of production for most producers,” he said.

Good said that one way to approach the question of how many corn acres are needed in 2015 is to determine the combination of production, consumption, and year-ending stocks that would result in a 2015-16 marketing-year average farm price closer to the cost of production, estimated to be in the low $4 range (assuming trend yields) in much of the Corn Belt. 

“The marketing-year average farm price was $4.20 in 2007-08 with an ending stocks-to-use ratio of 12.8 percent, $4.06 in 2008-09 with an ending stocks-to-use ratio of 13.9 percent, and $4.46 in 2013-14 with an ending stocks-to-use ratio of 9.1 percent,” Good said. “It may be that a marketing-year average farm price in the low $4 range next year would require ending stocks near 12 percent of consumption.”

According to Good, if consumption of U.S. corn during the 2015-16 marketing year remains near the record level projected for this year, year-ending stocks near 1.64 billion bushels would represent 12 percent of consumption. With beginning stocks near 2.2 billion bushels, imports of 20 million bushels, and consumption of 13.655 billion bushels, a 2015 U.S. corn crop near 13.075 billion bushels would result in 2015-16 marketing-year-ending stocks near 1.64 billion bushels.

With a trend yield near 162.5 bushels in 2015, 80.46 million acres would need to be harvested to produce 13.075 billion bushels of corn. That magnitude of harvested acreage for grain would require about 88.26 million acres of corn to be planted for all purposes. That is 2.625 million fewer acres than the USDA’s most recent estimate of planted acreage in 2014, 8.895 million less than the record acreage of 2012, and equal to acreage planted in 2010.

Good said that the market’s assessment of needed corn acreage in 2015 may well reflect different conditions than assumed here and will surely vary between now and planting time.

“Changing assessments will reflect the pace of consumption of U.S. corn, the size of the final 2014 production estimate to be released in January, and the development of the South American crop,” Good said.

Good reported that current prices for the 2015 corn crop suggest that the market is encouraging some reduction in corn acreage in favor of soybeans and wheat. The ratio of cash soybean and corn prices for 2015 harvest delivery in central Illinois, for example, is currently near 2.6 to 1.0. That ratio has been declining, but still favors soybeans over corn for many producers. Similarly, the ratio of July 2015 wheat futures to December 2015 corn futures and November 2015 soybean futures favors wheat over corn and soybeans.

Good sees as the bigger dilemma that, while a reduction in U.S. corn acreage is likely needed in 2015, an increase in wheat and soybean acreage may not be needed. U.S. wheat stocks are expected to increase during the current marketing year and a trend yield in 2015 would result in a larger crop than produced this year with no increase in acreage.

“A trend soybean yield in 2015 would result in a smaller crop than produced this year, but production would still exceed the projection of use during the current marketing year,” Good said. “It may be that low prices will result in some decline in total crop acres in 2015.  

“At this juncture, it appears that corn acreage may decline sufficiently in 2015 to generate a 2015-16 marketing-year average price in the low $4 range,” Good concluded. “However, price ratios will have to continue to motivate that acreage decline into planting time,” he said.

The first indication of producer acreage decisions will be revealed in the USDA’s Winter Wheat Seedings report to be released in early January 2015.

 

 

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