Chicken producers receive help

Taking care of “cluck cluck” costs a lot of “cha-ching.”

But, new rules are in the works to improve fairness in the marketplace for America’s poultry producers.

Agriculture businesses are expensive to launch; extensive equipment, buildings, machinery, labor and animal costs add up.

Now, financial risks could be far less for one of agriculture’s most important sectors.

Most producers take out loans to build and maintain their farms, then sign contracts with poultry processors (Tyson Foods, Perdue and others) to produce specified amounts of chicken.

Poultry processors are at liberty to terminate contracts if they deem a producer is not abiding by required equipment/building upgrades.

As the cost of animal-production increases, stemming from increased energy and alleged animal-feed costs, coupled with a declining demand, poultry producers’ pocketbooks are taking the hit. The downturn has lead to reduced poultry orders, a decline in renewed poultry contracts and the termination of poultry-processing plants.

According to the USDA, Americans who participated in the Obama Administration’s Rural Tour stops throughout the country expressed concern about the financial implications of poultry farmers and the lack of oversight of the nation’s poultry processors.

Since then, the USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) released new antitrust provisions to the 2008 Farm Bill to address the feedback.

"Concerns about a lack of fairness and commonsense treatment for poultry producers have gone unaddressed far too long," Agriculture Secretary Tom Vilsack said in a written statement. "This proposed rules will help ensure a level playing field for producers by providing additional protections against unfair practices and addressing new market conditions not covered by existing rules."

Some of the proposed rules as published include:

• Establish new protections for producers required to provide expensive capital upgrades to their growing facilities, including protections to ensure producers have the opportunity to recoup 80 percent of the cost of a required capital investment.
• Provide poultry growers with a written notice of a company’s intent to suspend the delivery of birds as confirmed in a poultry-growing arrangement at least 90 days prior to the date it intends to suspend the delivery.
• Improve market transparency by making sample contracts (except for trade secrets or other confidential information) be made available at GIPSA’s website for producers.
• Improve competition in markets by limiting exclusive arrangements between packers and dealers.

"The USDA has never gone this far before in what are unfair practices," said Becky Ceartas of Rural Advancement Foundation International.

However, some believe the proposals are not justified.

“The regulation was clearly drafted to satisfy a small number of activist growers and will do nothing to enhance the business of the great majority of broiler producers who are satisfied with the current system," stated The National Chicken Council in a news release.

GIPSA will consider public comments via e-mail (comments.gipsa@usda.gov) received by August 23, 2010.

Do you feel that this industry is deserving of the new regulations? Are there other methods that can be used to financially safeguard chicken producers?

*Photo obtained from: www.britannica.com

Strickland shapes fate of ag sector

On June 30, The Humane Society of the United States (HSUS), Ohio Gov. Ted Strickland and Jack Fisher, executive vice president of the Ohio Farm Bureau Federation (OFBF), announced a compromise affecting Ohio’s agricultural groups.

This agreement terminates HSUS’ initial plan to advocate for an amendment inclusion of animal-care practices in the Ohio Constitution.

HSUS began rallying support for a constitutional amendment to be included on the November ballot about a year ago. HSUS wanted the Ohio Livestock Care Standards Board to adopt minimum standards that would, “end confinement of animals in cages so small they can't turn around or extend their limbs,” as well as “cruel methods of killing sick or injured animals—to prevent the inhumane treatment of farm animals, enhance food safety, protect the environment and strengthen Ohio family farms.”

This agreement was made a day prior to the planned presentation of 500,000 signatures representing opposition to stop factory farming, to the Ohio secretary of state by an advocacy group, Ohioans for Humane Farms.

Some believe this agreement is good for Ohio agriculture.

“This agreement represents a joint effort to find common ground. As a result, Ohio agriculture will remain strong and animals will be treated better,” Strickland said. “Instead of expending tens of millions of dollars and unproductive energy fighting an acrimonious campaign during the fall, both sides will be able to continue investing in our agricultural base and taking care of animals.”

The actual agreement includes:

• A ban on veal crates by 2017, which is the same timing as the ballot measure.
• A ban on new gestation crates in the state after Dec. 31, 2010. Existing facilities are grandfathered, but must cease use of these crates within 15 years.
• A moratorium about permits for new battery-cage confinement facilities for laying hens.
• A ban on strangulation of farm animals and mandatory humane euthanasia methods for sick or injured animals.
• A ban on the transport of downer cows for slaughter.
• Enactment of legislation establishing felony-level penalties for cockfighters.
• Enactment of legislation cracking down on puppy mills.
• Enactment of a ban on the acquisition of dangerous exotic animals as pets, such as primates, bears, lions, tigers, large constricting and venomous snakes, crocodiles and alligators.

In a news release distributed by HSUS, Wayne Pacelle, president and CEO of HSUS stated:

"I'm grateful to Governor Strickland and his administration for their outstanding leadership on these issues. This agreement moves us forward on all of the components of the proposed ballot measure as well as other important advances for animals, too. I look forward to working with the legislature and the Livestock Care Board to see these reforms adopted."

OFBF supports the agreement as well. According to Fisher, this agreement helps farmers live up to the promises they made during the November 2009 Issue 2 campaign.

“One of animal agriculture’s most vocal critics has agreed that the Livestock Care Standards Board is the proper authority to handle difficult questions about farm-animal care,” said Fisher. “This is truly a milestone and confirms Ohio’s position as a national leader in farm-animal care.”

Others however, do not have the same enthusiasm as HSUS and OFBF about the agreement. A blog authored by Butch Hash in the Zanesville Times Recorder, mentions his disappointment — a “dark day” in agriculture is how Hash referred to it.

The Animal Agriculture Alliance (AAA) states that “Ohio's agricultural leadership has succumbed to pressures from HSUS — and the only group to benefit from this agreement is HSUS,” claiming that Ohio family farms will suffer greatly because they do not have the capital to make the move to alternative systems required in the agreement.

The AAA contends that because of the cost of the new compliance, such as new gestation stalls for hogs and new conventional cages for chicken housing, Ohio consumers will face increased prices for local produce or will rely on conventionally produced foods imported from nearby states or elsewhere.

A part of the agreement includes a ban on veal crates — all veal calves in Ohio must be raised in group housing by the end of 2017. Robert Cochrell, president of Beth El Veal, Inc., isn’t sure about the new rules that were put in place by the agreement.

“One of the intended or unintended consequences for the independent veal farmers in Ohio is that they will have two choices: Either cease production and go out of business because of an unsustainable, unproven method of production, or turn to an integrator that will own the calves, pay or finance the conversion and pay the farmer for his investment in labor and facilities,” said Cochrell.

In a recent editorial for The Columbus Dispatch, Cochrell mentioned that studies comparing group housing for calves with individual stalls found that in group pens there was twice the sickness, twice the mortality, increased medication use and poorer growth performance (an indication of the animals ability to thrive) than in individual stalls.

In an article by Brownfield Ag News, Ken Anderson describes farmers as being “dismayed,” and “betrayed.” According to Anderson, farmers across the country agree that HSUS’ primary goal is to abolish animal agriculture.

“I could not agree more with those people,” said Joe Cornely, spokesman for OFBF. “We at Ohio Farm Bureau fully recognize and believe that it is the ultimate goal of the Humane Society of the United States—just as our ultimate goal is to not let that happen. We haven’t given up the battle—we’ve just changed the rules of engagement.”

Do you feel that the agreement made by Ohio agriculture and HSUS is a positive action for Ohio agriculture? Do you think there was another option for Ohio?

*Photo obtained from: http://humaneeducation.org/IHEblog/confinedpigs.jpg

Insurance cuts worry farm industry

In a time of national financial stress, Congress is trimming its monetary-assistance programs whenever it can.

America’s crop-insurance industry is the latest business sector to experience insurance cuts – six billion in target crop insurance cuts throughout the next 10 years to be exact.

The 2008 Farm Bill provided funding for crop insurance and permanent disaster relief programs to benefit farmers nationwide. But in February, the Obama administration announced plans to amend the safety-net provisions specified in the Farm Bill.

The Obama administration estimates $2.26 billion can be saved throughout a 10-year period by reducing federal farm payments to "wealthy farmers," while $8 billion can be saved by reforming the crop insurance program to end what it calls "huge windfall profits" for insurance companies, according to a Corn & Soybean Digest article.

Federal crop insurance is sold and serviced by means of private insurance companies. A portion of the premium, as well as the administrative and operating expenses of the private companies, is subsidized by the federal government. The Federal Crop Insurance Corporation re-insures the companies by absorbing some of the losses of the program when indemnities exceed total premiums.

The United States Department of Agriculture released its final Standard Reinsurance Agreement (SRA) contract June 29, outlining the details of the $6 billion cut:

• Lowers the projected long-term return for insurers to about 14.5 percent by modifying the terms under which the Risk Management Association provides re-insurance
• Phases out federal crop subsidies to people with more than $250,000 in adjusted gross income (AGI) from off-farm sources or more than $500,000 in on-farm AGI
• $2 billion will be used to “strengthen successful, targeted risk-management and conservation programs
• $4 billion is intended to reduce the national deficit
• Imposes a cap on commissions at 80 percent of the administrative and operating (A&O) subsidy to carriers under the program and a cap of no more than 100 percent of A&O when profit sharing is included

Insurance companies have 30 days to respond and make technical corrections.

In a letter to members of the Senate Committee on Agriculture, Nutrition and Forestry July 2, Roger Johnson, president of the National Farmers Union (NFU) said:

“The fact that the number of farmers has declined is not a reason to weaken the farm safety net. The population of our country - the people fed by American farmers - continues to grow. We must work together to provide sufficient federal investment in domestic food production.

Since the last farm bill was enacted, many farmers have endured some of the most difficult economic conditions in decades,” said Johnson. “The next farm bill must address the new realities we face: extreme volatility in market prices for commodities, extended periods of extraordinarily high energy costs and the ongoing exodus of young people and job opportunities from our rural areas.”

The National Association of Crop Insurance Agents also wrote to Congress to express its members’ concern about proposed legislation.

“While the farm economy is currently strong, we should be careful to avoid doing anything that could undermine the financial infrastructure of rural America. Although farm prices are generally up, farm input costs have risen even faster in many cases. This makes crop insurance even more important to farmers who need credit in order to plant a crop.”

Individuals may write to his/her respected legislator to offer opinions at http://pianet.capwiz.com/pianet/issues/alert/?alertid=15150501&type=CO.

Do you feel that the USDA should resume its intent to cut funding? Are there other ways to contribute to the national deficit? Do farmers deserve federal safety nets?

*Photo obtained from: http://insurance.yoursfree.biz/crop_insurance.htm

Tree producers getting disaster relief

Crop farmers aren’t the only agricultural producers who are eligible for agricultural assistance.

Because of the Agricultural Disaster Relief Trust Fund, the 2008 Farm Bill opened the door to possible support not just to crop farmers but also to tree farmers across the country.

Thanks to financing provided by the fund, the United States Department of Agriculture (USDA) Farm Service Agency (FSA) created the Tree Assistance Program (TAP). This program provides financial assistance to those orchard and nursery tree growers that must replant or rehabilitate eligible trees, bushes and vines damaged by natural disasters. To be eligible the damage had to occur on or after Jan. 1, 2008 and before Oct. 1, 2011.

"This program helps our orchardists and nursery tree growers replant and get back on their feet after natural disasters," said Tom Vilsack, agriculture secretary.

The tree industry is commonly overlooked. What most people don’t realize is that the fruit and tree-nut industry alone adds an average of $18 billion to the nation’s economy. According to the USDA, the average person consumes about 270.9 pounds of tree-bearing fruit each year.

Recently, the 2008 Farm Bill extended the program to include Christmas tree growers who were previously ineligible under prior legislation.

The Christmas tree industry is larger than most give it credit for. Here are a few facts about Christmas trees that many people do not realize:

• There are roughly 40 million trees sold during the Christmas season in the United States.
• There are about 1 million acres in production for growing Christmas trees.
• The industry is valued at approximately $506 million.
• Christmas tree growing contributes to the economies of all 50 states.
• For every tree harvested two to three seedlings are planted in its place.
• Each acre of trees grown provides daily oxygen for 18 people.

In an executive summary by the Environmental Defense Fund (EDF), the Agriculture Disaster Relief Trust Fund was created with the intent to compensate farmers who have experienced weather-related losses.

According to Vilsack, orchardists and nursery tree growers were eligible to start applying for benefits under the TAP in May of this year.

To be eligible for TAP, producers must have suffered more than a 15 percent death loss because of the natural disaster after adjustment for normal mortality. TAP is a cost-reimbursement program, with payments covering up to 70 percent of replant costs and 50 percent of pruning, removal and other salvaging costs for replacing or salvaging damaged trees.

Eligibility:

• Trees, bushes and vines from which an annual crop is produced for commercial purposes
• Nursery trees include ornamental, fruit, nut and Christmas trees produced for commercial sale
• Trees used for pulp or timber are ineligible

What are your thoughts about the program? Should the USDA offer more relief programs to other areas of agriculture? Should the program include trees used for timber and pulp?

*Photo obtained from: http://www.texaschristmastrees.com/