Friday, January 28, 2011

Columbia Free Trade Agreement Vital to U.S. Wheat Growers

Columbia Ambassador Gabriel Silva, a guest presenter at the U.S. Wheat Associates winter meeting, provided an overview of Columbia’s growing economy and its importance to U.S. wheat growers. Colombia has the second-largest population in South and Central America and the Caribbean, and is the third-largest economy in the region.

Colombia is an important growing market with its imports nearly tripling in the past 7 years. Agricultural products, including corn, wheat and soybeans represent about 10% of total imports. Colombia imports 97% of the wheat it consumes. Until 2009, the U.S. was the main supplier of corn, wheat, soybeans and their products in Colombia with a peak of 76% of market share in 2007. However, in 2010 U.S. market share of these products fell to 27% and for the first time, U.S. lost its place as Colombia’s main supplier.

The U.S. Colombia Free Trade Agreement is crucial to the U.S. wheat industry to maintain sales and market share in an increasingly competitive trade environment. In 2009/10, Columbia was the eighth largest market in the world for sales of U.S. wheat. A fully implemented free trade agreement will immediately eliminate the country’s price ban system and remove tariffs on U.S. wheat imports upon implementation. This would level the playing field, ensuring U.S. products can compete in the Columbian Market.

U.S. wheat producers face an increasingly competitive and uncertain market in Colombia despite long-standing ties with Colombian millers, the U.S. wheat industry will continue to lose market share to Canada, Argentina and possibly the EU under implemented FTAs. Based on direct input from Colombia’s milling industry, at current prices, U.S. wheat producers across the country stand to lose up to $100 million in wheat sales every year if we must compete without a ratified FTA.

The U.S. wheat industry, along with other agricultural commodity groups, supports immediate ratification of the U.S./Colombia free trade agreement so U.S. producers can compete fairly in the Colombian market. Without the U.S./Colombia FTA, U.S. wheat growers and producers will face an uphill battle in this hard-fought and critical export market resulting in millions of dollars in losses of both exports and jobs.

Thursday, January 27, 2011

2011 Cereal School Schedule

The University of Idaho will be presenting eight cereal school events held across the state. These educational workshops provide wheat growers the opportunity to learn about insect issues, cereal disease updates, variety trials, weed control and a number of other important issues facing the wheat industry.

The Idaho Wheat Commission will be providing up-to-date information about the status of biotech wheat along with world wheat supply and demand numbers. Growers will earn 3 pesticide applicator recertification credits by attending a cereal school in their area.

Southern Idaho Cereal School Schedule
February 1 – Burley Cereal School, 9:00-3:00 p.m. Best Western Burley Inn
February 2 – Pocatello Cereal School, 9:00-3:00 p.m. Red Lion Hotel
February 3 – Idaho Falls Cereal School, 9:00-2:45 p.m. Red Lion Hotel
February 3 – Ashton Cereal School, 9:00-3:00 p.m. Trails Inn
February 4 – Preston Cereal School, 9:00-2:30 p.m. Robinson Building, Franklin County Fairground

Northern Idaho Cereal School Schedule
February 7 – Greencreek Cereal School, 7:30 a.m. – 12:15 p.m. Creencreek Community Hall
February 8 – Lewiston Cereal School, 8:00 a.m. – 1:30 p.m. Lewiston Elks Lodge
February 9 – Bonners Ferry Cereal School, 8:00 a.m. – 1:40 p.m. Memorial Hall Boundary County Fairgrounds

Thursday, January 20, 2011

Inflation Strikes!

The headline “Inflation Strikes!” probably caught your attention, writes Dr. Dave Kohl. Let’s take this issue a little bit further. According to Kohl, when the news media reports on inflation, core inflation is a docile 0.8 percent, well under the 1.0 percent ideal rate. Headline inflation, which includes food and energy, is 1.6 percent, below the 4.0 percent target - a 50 year average.

In Kohl's seminars many agricultural groups question these numbers. First, let’s go globally and examine the number two economy in the world, China. Overall, inflation is in the mid-4 percent range in China. Isolating food, the inflation rate is nearly 12 percent. Many in Chinese leadership are concerned with this high rate of food inflation, because it could result in social unrest and possible food shortages and hoarding.

For the agricultural industry, inflation is approximately 4 to 8 percent depending upon the segment and location in the country. For example, fuel, fertilizer, feed, cash rents, and, yes, the appreciation of land values, medical, and education costs are indicative of a higher inflation rate. So why such low rates of inflation in the general economy? This is the result of less expensive airline tickets, some consumer goods, and housing costs, which have been in a deflationary spiral.

It will be interesting to see what happens to interest rates. In the past sixty days, mortgage interest rates have increased over 60 basis points. Inflation in interest rates could be very detrimental to profit margins in farm businesses.

Thursday, January 13, 2011

Idaho Winter Wheat Seedings Up 12 Percent

Idaho’s winter wheat seeded area for the 2011 crop is estimated at 840,000 acres, up 12 percent from the 750,000 acres seeded for the 2010 crop, according to the National Agricultural Statistics Service.

Nationally, winter wheat planted area for harvest in 2011 is estimated at 41.0 million acres, up 10 percent from 2010 but 5 percent below 2009. Seeding began last August and during September was slightly behind the 5-year average. During October, seeding progressed slightly ahead of the 5-year average. More acres were seeded this year due to the early row crop harvest and higher prices. The winter wheat crop condition at the end of November was rated 47 percent good to excellent compared with 63 percent the previous year. Approximate class acreage breakdowns are: Hard Red Winter, 29.6 million, up 4 percent from 2010; Soft Red Winter, 7.76 million, up 47 percent from the previous year; and White Winter, 3.66 million, up 4 percent from 2010.