Kansas Corn Leader Update

March 28, 2008

Senate Approves HB2897 with Amendments
The Senate, under Committee of the Whole, favorably recommended HB 2897 and it will move to Final Action, which could be taken today.

HB2897 as passed by the House:
--Would double the checkoff authority for corn, wheat, grain sorghum and sunflowers; sets the soybean authority equal to the nation soybean checkoff; suspends the collection of any checkoff while a national checkoff for that commodity is being collected.
--Would require a majority vote of all growers of the respective commodity before a commission could institute any actual increase in checkoff assessments.
--Would require the commissions, when presenting their annual reports to the legislature, to submit a listing of all expenditures, along with other required information.
--Would allow the commissions the option to appoint a first purchaser as a commission member.

The Senate approved the bill on General Orders with these amendments:
--Clarify that the “first purchaser” member of a commission could be in addition to the other two “at-large” positions provided for under current law
--Eliminate language that would have required any increase in the assessments to be approved by mail ballot
--Reinstate language that prohibits the commissions from raising the assessment rates more than once per year (return language to current law)
--Prohibit the commodity commissions from “lobbying” as defined by KSA 46-225

Arm Yourself with Information
Seems like every time we turn around, one of our city friends is asking us why we are charging so much for our corn, why we are making ethanol and raising gas prices, why we are making them pay more for everything from tequila to milk to eggs. NCGA has put out some very good information, and we have put together some talking points for our growers on our website at www.ksgrains.com . Check it out!

Commission Election Results Released
The Kansas Department of Agriculture recently released the winners of the commodity commission elections. The three candidates for the corn commission in the central districts ran unopposed. District four – Mike Brzon, who grows corn, soybeans, sorghum and wheat in Republic County was reelected to the commission. District five – Terry Vinduska, who grows corn, grain sorghum, soybeans, wheat and alfalfa on a family farm in Marion County was reelected. District six – Kent Moore, who grows corn, wheat and soybeans in Pratt County serves on the KCGA board and ran for the commission position to replace Carolyn Dunn of Hudson, who chose not to run for reelection to the commission. The commissioners begin their three-year term April 1. Thanks to Carolyn Dunn for her service on the Kansas Corn Commission.

What Is the Magic Number?
We won’t know until Monday when Ag Statistics releases its long awaited Prospective Plantings report. And remember the prospective planting report is an estimate. Last year’s report had Kansas corn acreage at 3.7 million acres. We ended up planting 3.9 million acres in 2007. Ken McCauley was featured this week in a Reuters News Service article looking ahead to the prospective plantings report excerpts are below.

Markets nervous: will U.S. plant enough corn?
By Carey Gillam

WHITE CLOUD, Kansas (Reuters) - Kansas farmer Ken McCauley wants to help keep the world from going hungry next year, so he's planting corn: lots and lots of corn.

The third-generation farmer said he'll begin seeding about 3,000 acres of corn on his northeastern Kansas farm within the next two weeks, compared to only about 1,000 acres of soybeans he'll plant this spring, a change from his traditional 50/50 mix of the two key crops.

Indeed, with food prices racing higher around the world, and strong demand for corn from food companies, livestock producers and ethanol makers, U.S. corn production is considered a critical component of keeping people fed.

Higher prices for corn have fattened farmer wallets even as stocks from last year's bumper crop remain sufficient for the short term.

But as spring planting season draws near, now market analysts fear that many U.S. farmers will not follow McCauley's example but will instead plant soybeans, which are commanding historic high prices at more than $13 a bushel (compared with $5.50 a bushel for corn) and are much cheaper to produce than corn.

Market experts say all signs point to a sharp decline in overall U.S. corn seeding this spring, which could spell a significant tightening of supplies that would resonate at home and abroad, impacting everyone from consumers to cattle feeders.

"We have tight stocks worldwide and strong demand, so when there is an acreage or production shortfall you end up with more extreme and violent moves in prices. This is the risk that we face," said agricultural economist Bill Lapp.

. . . . For McCauley, who is chairman of the National Corn Growers Association, the market issues translate to higher profit potential. Indeed, McCauley is holding tight to about 50,000 bushels of old corn, anticipating what analysts say could be another 10 percent or greater price jump. "Corn was too cheap before," said McCauley, taking a break from clearing winter debris from his still-barren fields. "We're making the most of this.”








 

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