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					  AGRIBUSINESS UPDATE
                                                     Weekly news critical to your agribusiness

October 10, 2005

Legislative NEWS                                                                          fied risk materials (SRMs) by the Agriculture Department when the
                                                                                          animal is meant for human consumption. It also continues to allow
Aid for Western Farmers. Gov. Easley has approved the reallocation of $20
                                                                                          the use of poultry litter in cattle feed, as well as plate waste, blood
million appropriated by the 2005 Hurricane Recovery Act to provide additional
                                                                                          and, in some cases, fat and tallow.
assistance to farmers in Western North Carolina. Part of the Operation Brighter
                                                                                          Energy Supply Bill. The U.S. House Resources Committee is
Day relief effort, this money will provide necessary aid to farmers who did not
                                                                                          using the Hurricane Katrina and Rita disasters to try to pass legis-
receive assistance from the USDA. This aid will include producers who grow
                                                                                          lation that would open a portion of the Arctic National Wildlife Re-
Christmas trees, nurseries, woody ornamentals, sod, turf, grass and hay.
                                                                                          fuge to drilling for oil. The legislation, the National Energy Supply
Meth Law Signed. Gov. Mike Easley has signed House Bill 248, the “Meth
                                                                                          Diversification and Disruption Prevention Act, would also allow nat-
Lab Prevention Act,” which reduces access to pseudoephedrine and ephe-
                                                                                          ural gas production in federal waters of the outer continental shelf.
drine, key ingredients used to make methamphetamine. The bill will require
                                                                                          Chambliss Proposes Cuts. U.S. Senate Agriculture Committee
that all medicines containing pseudoephedrine and ephedrine be sold behind a
                                                                                          Chairman Saxby Chambliss has proposed a 2.5 percent cut in crop
pharmacy counter. Purchasers must be at least 18 years old, show photo ID
                                                                                          and dairy subsidies as the centerpiece of a plan to reduce USDA
and sign a log to buy these products. Under the new law, retailers of pseudoe-
                                                                                          spending by $3 billion over five years. Chambliss also recom-
phedrine products will also be required to record information about each pur-
                                                                                          mended cutting food stamps by $574 million, a move that by some
chaser, and maintain records of these sales for at least two years.
                                                                                          estimates would affect 300,000 recipients. Chambliss also recom-
Washington NEWS                                                                           mended revival of the Milk Income Loss Contract program for two
Congressional Frustration with Japan. Japan said it needs more time to                    years at a cost of $1 billion, and 10 more months of a cotton subsi-
evaluate U.S. safeguards before deciding to reopen its market to U.S. beef.               dy. The plan was scheduled for a vote in the committee this week,
The announcement caused an immediate negative reaction from many mem-                     but a spokesman for Chambliss said the vote was being put off
bers of Congress. During a House Ways and Means Committee hearing con-                    indefinitely.
cerning Japanese trade relations, committee members warned it may be time                 Brazil to Retaliate. Brazil will seek final permission from the
to retaliate against Japan for unfair trade measures and the delay in reopening           World Trade Organization to retaliate for U.S. cotton subsidies. In
the Japanese market to U.S. beef.                                                         July, Brazil asked the WTO to allow it to increase import duties on
Groups Testify on Animal ID. Various agriculture groups testified before the              certain U.S. goods to penalize the U.S. for failing to sufficiently
U.S. House Agriculture Livestock Subcommittee on the development of a pri-                change its export programs. In March, the WTO upheld a ruling
vate sector-based National Animal Identification System (NAIS) this week. The             condemning government help for cotton producers in the U.S., say-
National Cattlemen's Beef Association (NCBA) strongly supported a private                 ing many programs include export subsidies or domestic payments
sector program. However, the National Pork Producers Council (NPPC) testi-                that are higher than WTO rules allow.
fied that they are comfortable with the current level of recording and reporting          Cloned Animals. The Food and Drug Administration is expected
and already have accepted the costs of this system. Meanwhile, the National               to rule soon that milk from cloned animals and meat from their
Farmers Union (NFU) believes the USDA should control an animal ID program.                offspring are safe to eat. Hundreds of cloned animals are already
Cuts to Pay for Katrina - The Republican Study Committee issued a docu-                   living on farms around the country, as companies and livestock
ment, Operation Offsets, that outlines proposed cuts to approximately 100 gov-            producers experiment and await a decision from the FDA. The
ernment programs to help pay for the cost of disaster-relief measures for Hurri-          agricultural industry has observed a voluntary moratorium on using
cane Katrina. The proposed cuts amount to $500 billion over 10 years. Some                the products of clones.
of the proposed cuts include reducing farm payment acreage by 1%, eliminat-
                                                                                          Council NEWS
ing new enrollments in the Conservation Security Program and reducing fund-
                                                                                          Nominated. N.C. Agribusiness Council Executive Vice President
ing for the Agricultural Research Service.
                                                                                          Erica Upton Peterson has been re-nominated to serve a four-year
Feed Ban Extension. The Food & Drug Administration will publish an expan-
                                                                                          term on the Board of Directors of the N.C. Agricultural Foundation.
sion on its ruminant-to-ruminant feed ban, making it illegal to include some cat-
                                                                                           The N.C. Agricultural Foundation supports a wide range of teach-
tle parts in feed meant for animals other than cattle. The proposed rule would
                                                                                          ing, research and extension programs in the College of Agriculture
ban brains and spinal cords of cattle over the age of 30 months from the animal
                                                                                          and Life Sciences at N.C. State University.
feed supply, along with those items from cattle of any age that die on the farm,
                                                                                          State Fair. The N.C. Agribusiness Council will have a booth at the
exhibit symptoms of illness or have been delivered to a rendering plant without
                                                                                          2005 N.C. State Fair, which runs from October 14th through the
being inspected by a USDA veterinarian or inspector. The rule does allow eye-
                                                                                          23rd. The booth, which is open between 9 a.m. and 9:45 p.m., will
balls, tonsils, vertebrae, intestines and other body parts considered to be speci-




                                                         North Carolina Agribusiness Council
                                                                 3701 National Drive, Suite 211 * Raleigh, NC 27612
                                                                      phone 919-782-4063, fax: 919-782-4064
be located in the Kerr Scott Building near the entrance. Please stop by and                tions available as people exit. Another three handwashing stations
say hello!                                                                                 will be elsewhere at the fairgrounds at places where people might
Environmental NEWS                                                                         interact with the animals.
The N.C. Environmental Stewardship Project of the CropLife Foundation has up-              USDA NEWS
dated its Pesticide Applicator information and materials. A Pesticide Applicator’s         Livestock Producers Waiting on Payments. Livestock produc-
Handbook and a booklet with “Tips on Working Safely with Pesticides in North               ers around the country are still waiting for agricultural disaster
Carolina” are now available in both English and Spanish.                                   payments Congress approved a year ago to help them deal with an
Commodity NEWS                                                                             ongoing drought. Senators are pressuring USDA to distribute
                                                                                           money that Congress appropriated in an October 2004 spending
Tobacco Decision. A N.C. judge ruled that tobacco growers in 14 states
                                                                                           bill. Thus far, only 13 percent of the checks have been distributed
should be paid $318 million as part of the 1998 settlement between states and
                                                                                           to qualified producers. A USDA spokesman attributed the delay to
cigarette-makers while litigation continues on whether the farmers are entitled
                                                                                           “one glitch after another” in Department computer systems, and
to more money. Tobacco companies fought in N.C. courts for a refund, arguing
                                                                                           said the payments should be distributed within the next two weeks.
that the compensation due to farmers was overridden by last year's passage of
                                                                                           AGR-Lite. The Adjusted Gross Revenue Lite program has intro-
a $10 billion federal buyout of tobacco quotas. The judge’s decision means
                                                                                           duced several 2006 improvements, including an increase of the
that as much as $125 million will be distributed to about 80,000 farmers and
                                                                                           policy liability limit to $1 million, a sales closing date of March 15th.
quota holders in North Carolina.
                                                                                           AGR-Lite is a whole-farm revenue protection plan of insurance that
Poor Pumpkin Crop. The hot summer has dried out North Carolina’s sandy
                                                                                           provides protection against low revenue due to unavoidable natural
soils and shriveled the pumpkin harvest. The crop should be better this year
                                                                                           disasters and market fluctuations that affect income during the in-
than last, but only slightly. The heat and dry weather hurt pumpkins' chances
                                                                                           surance year.
for pollination earlier in the season. Although the strength of a pumpkin patch
                                                                                           Tobacco Suit. Two Virginia farmers have sued the USDA, accus-
rarely affects area farmers' livelihoods, some farmers are losing a small part of
                                                                                           ing it of steering away from Congress’ directives and effectively
their incomes.
                                                                                           slashing the payments the farmers think they should have received
Egg Labels. The egg industry is changing the text of its “Animal Care Certi-
                                                                                           from the federal tobacco quota buyout. The farmers claim the
fied” logo on store cartons in response to complaints from an animal rights
                                                                                           USDA replaced a simple calculation approved by Congress with a
group that claimed that the seal misled customers. The new logo will say
                                                                                           complex formula that cuts payments to many farmers.
“United Egg producers Certified,” and in smaller type, “Produced in Compliance
                                                                                           FSA Tomorrow. The USDA held a meeting in Raleigh on October
with United Egg Producers’ Animal Husbandry Guidelines.” The new seal will
                                                                                           4th to discuss its consolidation plan FSA Tomorrow, which will close
appear on egg cartons manufactured after Nov. 30, and all egg cartons bearing
the old logo will be removed by April 1, 2006.                                             26 local FSA offices in North Carolina. The FSA Tomorrow plan is
Fungicide Benefits. In a newly released study, the Crop Protection Research                designed to modernize FSA to ensure that it is better staffed and
Institute says fungicide benefits to the United States are immense. The report,            better equipped to meet the needs of farmers in the 21st century.
reviewed and endorsed by 38 commodity groups (including the National Cotton                Consolations will be determined by distance between offices and
Council and United Soybean Board), says if left untreated, yields of most fruit            workload as evidenced by staff members in each location. Keith
and vegetable crops would plunge 50 to 95 percent.                                         Weatherly, State Executive Director, is engaging stakeholders and
Tobacco Payments. Agriculture Secretary Mike Johanns announced that to-                    local and state congressional leaders to develop a proposal that
bacco quota holders and producers have received more than $900 million un-                 will help FSA chart the course for the agency’s future. Weatherly’s
der the Tobacco Transition Payment Program (TTPP), concluding the first of                 plan must be delivered by Nov. 15th.
ten annual payments. Payments occur annually from 2005 through 2014.                       Counter-Cyclical Payments. The USDA will now issue final
TTPP payments for 2005 have been completed and 2006 and subsequent year                    2004-crop counter-cyclical payments for corn and grain sorghum.
payments will be made every January 15th. Quota holders and producers who                  The final payment rate for corn is $0.29 per bushel and $0.27 per
wish to sell their remaining nine annual payments to a successor in return for a           bushel for grain sorghum. Final counter-cyclical payments are
lump-sum payment must do so by Dec. 2, 2005. Quota holders and producers                   made at the end of an applicable crop’s 12-month marketing year.
who did not sign-up for the 2005 payment must enroll by Dec. 2, 2005 to re-                The 2002 Farm Bill provides for two partial 2004-crop counter-
ceive future year payments.                                                                cyclical payments. The first was in October 2004 and the other in
Soybean Exports. The American Soybean Association reports record soy-                      February 2005. The final marketing year price for 2004-crop corn
bean exports for 2005. U.S. soybean exports during marketing year 2004-                    is $2.06 per bushel. The final price for grain sorghum is $1.79 per
2005, exceeded 29,966,000 metric tons, which is equivalent to 1.1 billion bu-              bushel.
shels. This year's all-time record is more than 3 percent higher than the pre-
vious record of 1.063 billion bushels set in marketing year 2001.
NCDA NEWS
Fair Petting Zoo Changes. Fairgoers will be able to pet barnyard animals
only through a fence at this year's N.C. State Fair petting zoo, one of several
changes implemented after an E. coli outbreak at last year's fair infected more
than 100 people. Last year, fairgoers could wander among the animals and
walk on the animals' feces-laden bedding, which officials believe is how the
bacteria spread. Beyond the separation of humans and animals, the petting
zoo will be plastered with warning signs and will have two handwashing sta-



                                                          North Carolina Agribusiness Council
                                                                  3701 National Drive, Suite 211 * Raleigh, NC 27612
                                                                       phone 919-782-4063, fax: 919-782-4064

				
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