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Association News - Fall 2005

AFIA Revs up for EXPO ’05

“The Race is On!” is the theme for the American Feed Industry Association’s EXPO ’05, September 19-21, in Kansas City, Mo. “Bartle Hall will be teeming with excitement typically reserved for a racing event. There will be plenty of race-related activities in and around the show hall to rev up attendees,” report show organizers.

The trade show is expected to draw more than 200 exhibitors. AFIA also will be welcoming its newest member companies to the EXPO, including nine out of the top 10 poultry producers in the U.S., as well as the largest pork and cattle operations in the country.

The education forum schedule of events is jam-packed, with sessions planned to address nutrition, safety and health, manufacturing, personnel, business and management, feed quality, regulatory updates, pet food, commodities outlook and more. (Please see the schedule of sessions on page 20.)

John Johnson, president & CEO, CHS, Inc., one of the nation’s largest agribusiness companies, will provide the keynote address on Tuesday, September 20. AFIA reports that Johnson will share his recipe for achieving a strong and consistent record of success.

USPOULTRY, AFIA
Announce Co-Location for Events

The boards of directors of the American Feed Industry Association (AFIA) and the U.S. Poultry and Egg Association (USPEA) have agreed in principle to co-locate their respective trade exhibitions, beginning in January 2007. Under the arrangement, the International Poultry Expo (IPE) will devote space for a separate feed industry component as part of its annual exposition in Atlanta, Ga.

AFIA will explore opportunities in developing and conducting educational venues in conjunction with upcoming IPEs. This will begin with the sponsorship of a feed manufacturing program on January 24, 2006, in concert with the 2006 show.

“In a time when exhibitors are trying to become more efficient, the opportunity to exhibit in a combined show benefits them and attendees alike. It’s truly a win-win situation for both,” says Joel Newman, AFIA president.

Don Dalton, president, USPOULTRY, says, “This partnership greatly strengthens the feed manufacturing component of IPE and immediately broadens our appeal to that audience. With the role feed plays in poultry production, the action should significantly increase interest by international visitors, particularly those from Latin America and Asia. Since the feed sector goes across swine and cattle sectors, this paves the way for new technologies to migrate into the poultry sector.”

Under the proposal, USPOULTRY will provide AFIA exhibit space in B-Hall of the Georgia World Congress Center. The groups will cooperate on all facets of meeting production and will market the event jointly and individually.

Details of the arrangement are being finalized. AFIA’s Expo ‘05 will continue as planned for September 19-21 in Kansas City, Mo. The next annual International Poultry Expo is scheduled for January 25-27, 2006 in Atlanta, Ga.

GEAPS Approves Scholarships for Language, Grain-Industry Studies

The Grain Elevator & Processing Society (GEAPS) has approved nearly $5,000 in scholarship funding for seven people pursuing studies in foreign languages, and the grain industry.

Two people were awarded funding from the Henry H. Kaufmann Memorial Scholarship, named in honor of a former GEAPS International president and a “Member of Distinction.” Kaufmann scholarships are awarded to full-time agribusiness professionals for foreign-language studies. Recipients are: Darren Grahsl, member and chapter services coordinator, GEAPS, Minneapolis, Minn.; and Sarah Dorman, communication specialist at West Central Co-op in Ralston, Iowa. Grahsl will study Portuguese at the University of Minnesota while Dorman plans to study Spanish at Des Moines Area Community College.

GEAPS also awarded five Harold Reese Memorial scholarships, set up to promote interest in the study of grain-handling operations for career purposes. Reese also was a GEAPS international president and Member of Distinction.

Recipients are: Mitch Fabus, St. Johns, Mich., Michigan State University and Lansing Community College; Nathan Fleck, Purdue University; Nicholas Kerr, Southern Illinois University; Andrew Hiser, University of Illinois; and Shawn Cogdill, Iowa State University.

Applications for 2006 will be accepted next January. Contact Chuck House, GEAPS, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Tel. 612-339-4625.

Associations Urge House to Approve Waterways Construction Bill

In a letter to House Transportation and Infrastructure Committee Chairman Don Young (R-AK), the National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) urged the House to act and to reject amendments that would undermine or further delay authorization to finance construction and renovation of deteriorating locks on the Upper Mississippi and Illinois River.

In July, the House was scheduled to begin floor consideration of the bill, which would authorize the U.S. Army Corps of Engineers to allocate $1.795 billion in federal funds for the construction of seven new 1,200-foot locks on the Upper Mississippi River, as well as at LaGrange lock and Peoria lock on the Illinois Waterway. An additional $235 million in federal funds would be authorized to construct mooring facilities at locks 12, 14, 18, 20, 22, 24 and LaGrange, as well as for providing switchboats at locks 20 through 25 to expedite barge movements.

Most of the existing locks and dams on the Upper Mississippi-Illinois Waterway were built in the 1930s and 1940s and are obsolete because they are too short to handle modern barge tows. The existing 600-foot locks require barge tows to be separated and processed through the locks in two separate transits.

The federal funding would be matched with money from the Inland Waterways Trust Fund, which consists of about $400 million barge fuel tax revenues, assessed at a rate of 20 cents per gallon, generated from barge companies and shippers. While commercial users operating on the Upper Mississippi and Illinois River system have paid more than 40 percent of the money in the trust fund, they have received less than 15 percent of the benefits through investments in infrastructure improvements, report the NGFA and the NAEGA.

“This project is absolutely essential to the long-term growth and economic success of U.S. agriculture, as well as to maintain U.S. export competitiveness,” says NGFA President Kendell Keith. “If U.S. transportation capacity cannot be efficiently expanded through improved waterways, increasing congestion on the highway and rail network will hamper overall U.S. economic growth. Further, an efficient inland waterways system leads to reduced costs throughout the entire transportation network, providing benefits up and down the supply chain.”

NAEGA President Gary Martin notes that U.S. grain and oilseed exports can fluctuate from year to year, influenced by world supply-demand and U.S. crop conditions, the comparative strength of the U.S. dollar compared to foreign currencies, the condition of the world economy and ocean freight rates. A doubling of ocean freight rates has dampened U.S. exports over much of the past year, and in particular has redirected export flows away from the U.S. Gulf to Pacific Northwest ports, temporarily reducing barge traffic, he adds.

The NGFA and NAEGA have urged the rejection of two amendments expected to be offered. One, expected to be offered by Reps. Jeff Flake (R-AZ) and Earl Blumenauer (D-OR), would require another study to examine the feasibility of an appointment-scheduling approach for processing barge traffic through the congested locks on the Upper Mississippi-Illinois Waterway. The two associations note that the U.S. Army Corps of Engineers already has spent 14 years and more than $70 million to study the feasibility of the lock reconstruction project, and that further delay is untenable since it is projected that construction, once started, will take up to 20 years to complete. The NGFA and NAEGA also note that the bill already would authorize the development and testing of a barge appointment-scheduling system.

A second amendment, expected to be offered by Rep. Ron Kind (D-WI), would link the timetable for completing the lock renovation with the schedule for completing the environmental ecosystem improvements that would be authorized under the bill. “The environmental restoration project is four times larger than the lock-and-dam modernization program,” the NGFA and NAEGA say. “We do not believe it would be fair for the navigation improvements to have to wait four times longer to be completed. Linking the projects could waste time and increase costs.”

NGFA Urges Rebalancing CRP to Emphasize Water Quality

The USDA should place more emphasis on water quality benefits when considering which expiring Conservation Reserve Program (CRP) contracts merit reenrollment, the National Grain and Feed Association (NGFA) told Congress in late July.

“There appears to be excessive focus in the CRP on game birds and hunting, at the expense of water quality…, which USDA estimates represents only eight percent of the CRP’s non-market benefits,” said NGFA President Kendell Keith.

The NGFA testified at a July 27 hearing conducted by the Senate Agriculture Committee’s Subcommittee on Forestry, Conservation and Rural Revitalization, chaired by Sen. Mike Crapo (R-Idaho). The hearing focused on the policy options being considered by USDA to address the more than 22 million acres currently enrolled in the CRP under contracts scheduled to expire in 2007/08.

“Water quality is one of the most important long-term challenges facing U.S. agriculture, and should be a measurable goal that is given much more consideration” by USDA when evaluating which acres should be eligible for CRP enrollment, Keith said. “This means more emphasis on stream buffers. It also means that rather than automatically enrolling whole farms and large tracts of land, USDA needs to evaluate whether enrollment of only partial fields and filter strips could contribute substantially to water-quality improvements.”

The NGFA urged that USDA not automatically reenroll existing CRP acreage in long-term contracts without “critically evaluating,” through a competitive-bidding process, the environmental benefits that would be achieved by doing so. It noted that many CRP acres covered by soon-to-expire contracts – some of which have been in the CRP for up to 18 years – were enrolled using much less-demanding environmental criteria.

The NGFA also warned that excessive long-term reenrollments of existing CRP acreage would hamstring Congress when deciding CRP policy as part of the 2007 farm bill, as well as when allocating finite federal funding for conservation programs. “Congress should determine if more funding should be diverted to conservation programs that enhance water quality,” Keith said. Enrolling filter strips or grassed waterways in the CRP to enhance water quality is more expensive on an acre-for-acre basis than enrolling flat farmland, but may provide far greater environmental benefits, he added.

Congress also should have the latitude to devote additional resources to enhancing conservation on working farmlands to improve the rural economy, said NGFA. The association added that Congress should consider if the CRP is too concentrated in western states, and determine if the current 39.2-million-acre CRP cap should be reduced.

CRP policy decisions should not be driven by administrative workload considerations at USDA’s Farm Service Agency, the NGFA said. It noted that private businesses encounter “crunch times” during which it is necessary to mobilize human resources, and it is not unreasonable to expect FSA to do the same – much as it did to expeditiously implement the 2002 farm law.

The NGFA urged that USDA reevaluate its administration of the current 25 percent per-county limit on CRP enrollments. It noted that enrollment of acreage in the CRP has exceeded 35 percent of modern cultivated acres in several counties, causing economic damage that “is driving merchants out of business and driving people out of communities.” Excessive CRP enrollment in western states also has led to “troubling disinvestment” in marketing infrastructure, including rail line abandonment, which in turn triggers higher transportation costs for remaining grain that reduces farm prices, reported NGFA.

The NGFA also expressed concerns over the CRP’s impact on the future growth of major U.S. agriculture sectors that are heavily dependent upon competitive supplies of grains and oilseeds, including livestock and poultry producers. The NGFA explained that traditional users of U.S. grains and oilseeds confront a situation in which ethanol production now utilizes 14 percent of the U.S. corn crop; U.S. wheat acreage has declined by more than 10 million acres over the last seven years; total land devoted to crops plus CRP acres has declined by nine million acres over the same time span; and yield-robbing plant diseases, such as soybean rust, have created uncertainty.

“If the United States does not employ the land base needed to stay world-competitive in grains, we will force sizable portions of our livestock and poultry production off-shore,” Keith said.

The NGFA’s testimony was endorsed by several other organizations that are part of the Alliance for Agricultural Growth and Competitiveness (AAGC), a coalition of national and state organizations representing a broad cross-section of meat, livestock and poultry production; agricultural input; and grain marketing, handling, processing feed manufacturing and exporting interests. Organizations endorsing the statement were: North American Export Grain Association, National Oilseed Processors Association, North American Millers Association, National Chicken Council, National Turkey Federation, Agricultural Retailers Association, The Fertilizer Institute, American Bakers Association, Independent Bakers Association, Biscuit and Cracker Manufacturers’ Association, National Grain Trade Council, American Feed Industry Association, Louis Dreyfus Corp., and The Scoular Co.

NGFA, NAEGA Commend Ag Committee for Bill Authorizing Use of Third-Parties

The National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) recently commended the House Agriculture Committee for approving legislation that would amend the U.S. Grain Standards Act to authorize the USDA to delegate to independent, third-party agencies the responsibility at export facilities for performing the hands-on inspection and weighing of grain, under 100 percent USDA supervision.

The legislation (H.R. 3421), which was approved by a voice vote, is “absolutely essential” if a government-based official grain inspection and weighing system is to be “cost-competitive and remain viable for bulk U.S. grain and oilseed exports in the future,” said the NGFA and NAEGA.

NGFA President Kendell Keith and NAEGA President Gary Martin praised the leadership of House Agriculture Committee Chairman Bob Goodlatte (R-Va.) and ranking member Rep. Collin Peterson (D-Minn.), as well as Reps. Jim Moran (R-Kan.) and Bob Etheridge (D-N.C.), the chairman and ranking member of the committee’s Subcommittee on General Farm Commodities and Risk Management, respectively, for securing a bipartisan consensus on the bill.

The legislation also would reauthorize for five years (through Sept. 30, 2010) the official grain inspection and weighing system and related programs administered by USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA). Also reauthorized for five years would be the Grain Inspection Advisory Committee, which provides input to the secretary of agriculture concerning the official grain inspection and weighing system. The legislation was scheduled to be considered by the Senate Agriculture Committee once Congress returns from its summer recess after Labor Day.

Joining the NGFA and NAEGA in supporting the legislative change were the American Farm Bureau Federation, American Soybean Association, National Association of Wheat Growers, National Corn Growers Association, National Grain Sorghum Producers and U.S. Wheat Associates, and the American Association of Grain Inspection and Weighing Agencies, which represents most of the state and private inspection agencies that currently perform official inspections for GIPSA in the domestic market.

The NGFA and NAEGA said the legislation authorizing USDA to designate independent third-party agencies to perform inspection and weighing at U.S. export facilities is necessary to reverse the steadily increasing cost of inspections performed by GIPSA employees. GIPSA currently is responsible for performing official grain inspection and weighing at all but a handful of export ports, where state agencies are authorized to perform such service.

The NGFA and NAEGA said GIPSA’s fixed expenses for personnel and administrative overhead have increased well above the underlying rate of inflation, and show no signs of abating. Meanwhile, U.S. producers and industry confront intense foreign competition for grain and oilseed exports, including from Brazil and Argentina where inspections are done by third-party surveyors at a cost that is 20- to 25-cents per metric ton less than charged by GIPSA for U.S. export grain inspections, said the associations.

The NGFA and NAEGA estimated that once fully implemented, the change would result in an immediate 23 percent savings in official inspection costs, amounting to $6.1 million per year. Because those savings would be compounded over time compared to the approximately seven percent annual inspection fee increase occurring now under GIPSA, the savings would grow to around $17.5 million after a decade – a cumulative savings of approximately $112 million over the 10-year period, the NGFA and NAEGA estimated.

“Confronting global competition, U.S. exporters have responded aggressively by reducing operating costs and enhancing efficiencies wherever possible,” said NAEGA President Martin. “The one operating expense that remains beyond the reach of exporters’ control – and has come to represent the single largest uncontrollable expenditure we face – is the cost incurred for official grain inspection and weighing services performed by GIPSA.”

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