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Incentives needed to improve grain markets in India

Published March 18, 2014
Rice field in India

URBANA, Ill. – Even after the agricultural reforms of 2002-03, for wheat, rice, and pearl millet farmers in India, grain markets are still pretty sticky. Two University of Illinois economists analyzed infrastructure of interstate trade for food-grain crops in three Indian states and found that grain farmers are unable to cash in on India’s market reforms and take advantage of a price difference between two or more markets.

“We wanted to see if there was more integration in the markets since the 2002 reforms,” said Kathy Baylis. “We were surprised at how little integration we saw.  Apparently there are still a lot of regulations in place. A lot of the wholesale markets are not open other than right around harvest.  There is a strong incentive to sell at harvest because if you don’t you’d have to travel to Delhi or another major city. The ADM Institute for the Prevention of Postharvest Loss that provided the funding for this research is interested in storage, and what we found in India is that there was a huge disincentive to invest in on-farm storage because even if farmers could store their grain for six months or so, they wouldn’t be able to sell it then.”

Baylis explained that, prior to the reforms of the early 2000s it was difficult in India to transport grain across state lines. The reforms made that easier and also expanded the number of people who could purchase and trade grain. Farmers used to have to go through a long, arduous process to become certified. The reforms eliminated some of those issues, but other problems still plague the system.

“Some people may think of this as only an engineering problem,” Baylis said, “where we just need to develop a really good place for them to store the grain. But if there isn’t an incentive to store grain to sell later and get a better price, the extra storage won’t help farm income.”

According to Baylis and her colleague Mindy Mallory, although India still needs some serious policy reform, small innovations could be facilitated to encourage more independent traders to get into the market.

“Anecdotally we heard that in places where there were more active traders, farmers were able to benefit from this market arbitrage potential,” Baylis said. “They weren’t stuck looking at their own local market. If they worked with a trader, they could keep an eye on what’s happening in the city and sell their grain two or three months after harvest.”

Baylis said that fruit and vegetable crops, which are highly perishable, tend to have less regulation than the grains and oilseeds.  Because they don’t go through the government markets, traders are making investments to get the food from the farmer to the city.

“You have these parallel systems going on,” Baylis said. “One is regulated, very structured and not very efficient. One is unregulated and in some cases works well; in other cases, it is also a mess.  For vegetable crops, if farmers don’t have those linkages, they really can’t sell perishable products.  There’s a massive lack of cold storage in India, for example.”

As an economist, Baylis said that she studies how policy can create headaches for farmers and on the consumer end of the supply chain.

“Global food security is often seen as a production issue, but often it’s not just lack of water or access to the right seeds,” she said. “There has been evidence that major famines, weren’t due to a lack of food production, they occurred because you had all of these other institutional crises or economic crises.

“Some people on the outside look at the postharvest loss in India and say we need to develop a better mouse trap – to develop better storage. Our point is that although that’s a good thing, if you don’t have the right policy and economic incentives, the best mouse trap still won’t help.”

“Food Corporation of India and the Public Distribution System: Impacts on Market Integration in Wheat, Rice, and Pearl Millet,” co-authored by Mindy Mallory, was published in an issue of the Journal of Agribusiness.

 

Celebrate National Nutrition Month with the University of Illinois!

Published March 18, 2014
healthful foods

URBANA, Ill. – Dietetics and Human Nutrition students from the Department of Food Science and Human Nutrition, University Dining Services, McKinley Health Center Nutrition Education Peer Educators, Campus Recreation, and NutrImpact are teaming up to spread the word about National Nutrition Month (NNM).

A fun and interactive Nutrition Fair will be held on March 19 from 4 to 6 p.m. in the lobby of Ikenberry Commons on the U of I campus to help spread the message of NNM and give nutrition students practice in educating the public about healthy eating. Fair attendees will have the chance to win cool prizes and taste healthy snacks while learning more about nutrition. Everyone is welcome to come learn about eating right on a budget, eating right for exercise, healthy weight loss and much, much more!

UI Dining Services is also holding a nutrition midterm game show at Illinois Street Residence Dining hall on March 18 during the dinner meal service, complete with prizes.

On March 31, Ikenberry Dining Hall will feature a “Be Flexitarian” food vendor show during the dinner meal to serve hundreds of healthy and plant-centric food samples to students.

The nutrition student-leaders of NutrImpact, a campus community nutrition service organization, will demonstrate how to get five-a-day fruits and vegetables through a healthy cooking class. Featured dishes being demonstrated in the class include a vegetarian pizza with a cauliflower-base crust, a herbed quinoa dish, kale chips, and a chocolate avocado fruit dip. This cooking class is offered through the Orchard Downs Family and Graduate Housing on March 21 from 2 to 4 p.m.

Please join us on March 19 at Ikenberry Commons for the NNM Fair and for many other events on campus in celebration of Nutrition Month! It’s a great opportunity to learn more about the benefits of healthy eating and try recipes that are nutritious and delicious.

News Sources:


Katie Paige, 319-939-1940
Justine Karduck, 217-300-0181

Anticipating the March 1 soybean stocks estimate

Published March 17, 2014

URBANA, Ill. – On March 31, the USDA will release an estimate of soybean stocks as of March 1. Typically, the most interest in the quarterly stocks estimates is focused on corn because these reports reveal the apparent pace of feed and residual use during the previous quarter and that use is a very large component of total corn consumption. According to a University of Illinois agricultural economist, while seed, feed, and residual use of soybeans is a smaller component of total consumption, there has been enough variation in revealed consumption to provide market surprises from time to time. The March 1 soybean stocks estimate this year may be more important than is normally the case due to the rapid pace of U.S. exports, concerns about the size of the South American harvest, and prospects for generally tight stocks at the end of the marketing year.

“Anticipating the size of the March 1 stocks estimate starts with the USDA estimate of stocks held on Dec. 1, 2013, plus imports during the quarter,” said Darrel Good. “An estimate of consumption during December, January, and February is subtracted from that total in order to estimate stocks as of March 1. Consumption occurs in three categories: exports; domestic crush; and domestic seed, feed, and residual use. Stocks on Dec.1 were estimated at 2.148 billion bushels. Census Bureau estimates of imports in December and January totaled 5 million bushels, so the total for the quarter may have been near 8 million bushels, resulting in a total supply of 2.156 billion bushels. The Census Bureau also provides the export estimates used in the USDA’s supply-and-demand balance sheets. However, those estimates are currently only available through January 2014. An estimate of exports for the entire quarter is based on a combination of Census Bureau estimates through January and USDA estimates, which are available for the entire quarter. USDA export inspection estimates for the December-February quarter totaled 703 million bushels. However, Census Bureau estimates for December and January exceeded the inspection estimates by 16 million bushels. Assuming that margin persisted through February, exports for the quarter were near 719 million bushels,” he said.

Good explained that historically the estimate of the size of the domestic crush was also based on monthly Census Bureau estimates. Those estimates were discontinued in July 2011. Monthly and quarterly estimates of the crush are now based on National Oilseed Processors Association (NOPA) monthly estimates of crush by its member firms and the historical relationship between those estimates and the Census Bureau estimates. That procedure results in an estimate of 486 million bushels for the crush during the December-February quarter.

According to Good, during the previous 10 marketing years, the magnitude of apparent seed, feed, and residual use of soybeans during the second quarter of the year (December-February) ranged from -42.4 million bushels to 88.3 million bushels. However, that estimate is not independent of the magnitude of apparent use in the first quarter of the marketing year. That is, unusually large (small) estimates of use during the first quarter have tended to be at least partially offset by unusually small (large) estimates in the second quarter. Making an estimate of use during the second quarter of the year then is conditioned on the magnitude of apparent use in the first quarter. Still, the total for the two quarters over the past 10 years was in a very wide range, from 124 million to 195 million bushels. The average was near 165 million bushels.

“Our calculation of use in this category during the first quarter of the 2013-14 marketing year was a record large 187 million bushels,” Good said. “That estimate points to a small forecast for the second quarter. If the total for the two quarters was near the 10-year average of 165 million bushels, second-quarter use would have been near -22 million bushels. 

“The estimates of exports and domestic crush presented here along with average feed, seed, and residual use during the first half of the 2013-14 marketing year would point to March 1 soybean stocks of 973 million bushels,” Good said. “However, an estimate that differs by as much as 25 million bushels in either direction from that estimate probably should not be considered a surprise given the historic variation in feed, seed, and residual use during the first half of the marketing year.”

Good concluded by saying that the magnitude of feed, seed, and residual use of soybeans during the first half of the marketing year is sometimes used to anticipate whether the USDA will ultimately alter the estimated size of the previous year’s harvest. A large (small) level of use, for example, might suggest that the crop was over (under) estimated. 

“While use during the first half of the year has varied considerably, it is not a good predictor of use during the last half of the year,” Good said. “That use has ranged from -99 million to 40 million bushels and is not highly correlated to use during the first half of the year.  As a result, the magnitude of use during the first half of the marketing year provides very little information about the likelihood of a change in the production estimate.”

 

Recent herbicides labeled for edamame could mean more U.S. production of the crop

Published March 17, 2014
edamame
Photo courtesy of Marty Williams

URBANA, Ill – Two herbicides recently labeled for use on edamame are welcome additions to the battle against weeds in production of the crop, which is growing in popularity in the United States, said a University of Illinois crop sciences researcher and USDA-ARS ecologist.

With the help of the IR-4 Project, the herbicides imazamox (Raptor, BASF) and fomesafen (Reflex, Syngenta), both used in soybean for years, were recently registered by the Environmental Protection Agency (EPA) for use on edamame (vegetable soybean). Marty Williams said this is good news for producers because not only do these herbicides add two new modes of action in edamame-approved products, but they are also the first post-emergence herbicides with activity on broadleaf weeds.

“Right now hand-weeding costs can exceed $500 per acre, so more cost-effective weed management tools are critical,” he said. “More diverse weed management systems in edamame ultimately will reduce the cost of hand weeding, potentially allowing it to be grown on more acres.”

In 2010, the United States imported an estimated 100,000 tons of edamame, mostly from China, with some imported from Taiwan.

“Although not everyone is the U.S. is familiar with edamame, demand is growing strongly,” Williams said. “We are the number one soybean producer in the world, so why don’t we grow more edamame here?”

Edamame is a complete protein with all the essential amino acids, which is unique to a vegetable crop. It also contains “good fats” that are largely unsaturated fats. Often marketed as a healthy snack food, edamame requires minimal processing and preparation.

The federal labeling of these herbicides could mean that, in time, more of what you buy in the grocery store was grown in the U.S. and not imported. “Part of the motivation for growing edamame here is so that there is a complete understanding of how it’s actually being produced,” he said.

Before registration of imazamox in late 2013 and fomesafen in March 2014 for use on edamame, the EPA had approved the use of only a few other products since July 2011.

“In a relatively short amount of time, just three years, the number of herbicides we now have for managing weeds in the crop has increased dramatically. More work remains but this achievement has lowered the height of one barrier to domestic edamame production,” Williams said.

Unlike soybean, which is harvested after a long season and senescence has occurred, edamame is harvested at the full-seed stage (R6) while the plant is entirely green and the seeds are large in the pod. Because of this contrast, the EPA treats edamame as a different crop regarding pesticide use.

While previous herbicides have been helpful in addressing certain weed species, current issues of herbicide resistance make the need for new modes of action even more important.

“We don’t want to rely on just one herbicide. Each herbicide can be useful, but none of them is a stand-alone product. Those days are long gone, even in corn and soybean. We continue to relearn the consequences of overuse of individual products, specifically, herbicide-resistant weeds,” Williams said.

Pigweed species, including palmer amaranth and waterhemp, are reported in edamame. “But the complete list of problematic broadleaf weeds may be long,” he said.

While labeling of the two herbicides is helpful, Williams said weed management has not been the only factor limiting growth of this crop in the U.S. Barriers such as limited seed availability and improved cultivars appear to have prevented larger acreage of edamame production in the U.S., the researcher explained.

“Because edamame is a relatively small crop, not all seed companies may be in a position to produce large amounts of seed. However, my understanding is that the vegetable industry struggles to get adequate amounts of seed to plant. Moreover, the growing environment influences crop development and the cultivars that can be used successfully,” Williams said.

There are issues of adaptation, disease resistance, taste, harvestability, seed size, seedling emergence, and vigor in developing new cultivars as well. “There appears to be room for improvement on all fronts,” Williams said.

“The vegetable industry recognizes the growing consumer demand in the U.S., but until more of these hurdles to domestic production of the crop are lowered or removed, I think they’re going into it cautiously as they should,” he added.

Study looks at calcium in canola meal as part of pig diet

Published March 17, 2014
pigs dirt

URBANA, Ill. – When formulating diets for pigs, it is more accurate to use values for standardized or true nutrient digestibility than values for apparent nutrient digestibility because the former are additive in mixed diets. Research at the University of Illinois is helping to determine the true digestibility of calcium in swine diets.

Hans H. Stein, a professor of animal sciences at the U of I, led the team that conducted the study. "We know that there are endogenous losses of calcium in cattle and chickens, and our hypothesis was that the same is true for pigs," Stein said. "We also wanted to determine if adding microbial phytase to the diets would affect endogenous losses of calcium."

Stein's team set out to determine the apparent total tract digestibility (ATTD) and true total tract digestibility (TTTD) of calcium in canola meal without and with microbial phytase. They fed growing pigs four diets containing 0.08, 0.16, 0.24, or 0.32 percent calcium. All of the calcium in the diets came from canola meal, which is one of the few ingredients that contain both phytate and appreciable amounts of calcium. In addition, they fed four diets that were identical to the first four except that they also contained 1,500 units per kilogram of microbial phytase.

In diets both with and without added phytase, the ATTD of calcium increased as the calcium level in the diets increased. This indicated that there was endogenous loss of calcium. Using regression equations, the researchers estimated that the total endogenous loss of calcium was 0.160 g/kg dry matter intake (DMI) for pigs fed diets with no added phytase, and 0.189 g/kg DMI for pigs fed diets containing microbial phytase. These values were not statistically different, demonstrating that phytase doesn't affect endogenous loss of calcium, Stein said.

Next, values for the TTTD of calcium were calculated by correcting the ATTD for total endogenous losses. Unlike ATTD, the TTTD of calcium was not affected by the level of calcium in the diet. The ATTD and TTTD of calcium were both greater in diets containing added phytase than in diets with no phytase added.

Stein said that the results bore out his team's hypothesis.

"There is a measurable loss of endogenous calcium from the gastrointestinal tract of pigs," he said. "The fact that TTTD values are unaffected by dietary calcium levels indicates that the only reason ATTD increases as dietary calcium increases is because of the reduced contribution of endogenous calcium to the total output.

"Because TTTD values for calcium were not influenced by the level of calcium in the diets, we expect these values to be additive in mixed diets,” he added. “It is, therefore, necessary to take endogenous losses of calcium into account when formulating diets for pigs.”

Future work will focus on determining the digestibility of calcium in additional feed ingredients.

The study, "Endogenous intestinal losses of calcium and true total tract digestibility of calcium in canola meal fed to growing pigs", was recently published in the Journal of Animal Science. It was co-authored by Caroline González-Vega and Yanhong Liu of the University of Illinois and Carrie Walk of AB Vista Feed Ingredients (Marlborough, UK). The full paper is available at http://www.journalofanimalscience.org/content/91/10/4807.full.

AB Vista provided financial support for the research.

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