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California Association of Wheat Growers (CAWG)

June 15, 2005

USDA ISSUES PROPOSED ASSESSMENT REGULATIONS. Last week, USDA published draft regulations to implement the law clarifying USDA’s authority to collect assessments on commodities (including wheat) going under federal loan. Although USDA has been collecting assessments on behalf of state commodity commissions for over twenty years, the department decided a couple of years ago that it lack clear statutory authority to do so. With the concerted efforts of national and state wheat organizations, and help from other commodities including rice, legislation was passed last year. USDA decided to go through the formal rulemaking process and has just issued proposed regulations.

CAWG and the California Wheat Commission are reviewing the proposed rule and preparing comments. We are concerned that the language may complicate the assessment collection process and want to provide constructive suggestions on how to streamline the process. All comments are due on July 7, 2005. For more information, or to obtain a copy of the proposed rule, call the CAWG office.

In related news, CAWG and CWC are trying to finalize the interim Memorandum of Understanding that will allow assessments to be collected on this year’s crop going under loan. We understand that the MOU is close to reinstatement and look forward to announcing the completion of the process soon.

CONSOLIDATION UPDATE. Since the proposal to consolidate the three national wheat organizations failed by a close vote in Reno in February, several states have been looking for ways to resurrect the plan and move forward. US Wheat has developed a counter-proposal, which will be considered and revised at its upcoming board meeting next month. A vote is not planned until October in Portland. The major changes are:

• A state's weighted vote is split between the two directors according to the relative contributions from the commission and the grower association, unless the state agreed to share their vote 50-50.
• The locked-in percentages for the revenue split between major program areas increase from three years to five.

 The new proposal is being examined by all interested parties.

HOUSE APPROVES FY06 AG APPROPRIATIONS. The House of Representatives last week approved their version of the FY2006 agriculture appropriations bill 408-18. This bill includes $16.83 billion in discretionary spending, the same level as last year, but more than President George W. Bush’s budget proposal had requested. The bill also includes $88.82 billion in mandatory spending and overall, about 17 percent more funding than last year’s appropriation bill, primarily because of increases in mandatory spending.

 Highlights of the bill include:

• A $20 million increase in the Food Safety and Inspection Service’s budget, bringing it to $837 million, or $127 million over the President’s request.
• A $35 million increase for the Animal and Plant Health Inspection Service, for a total of $849 million, $13 million less than the President’s request.
• $1 billion for the Farm Service Agency, the level the President requested and $25 million more than last year.
• $1.124 billion for the Agricultural Research Service, $164 million more than last year and $63 million more than the President’s request.
• $794 million for Conservation Operations, $37 million less than last year but $26 million more than the President’s request.
• A $40 million increase in the cap of the Environmental Quality Incentive Program, though at the expense of three 2002 Farm Bill programs: the Conservation Security Program (reduced by $13 million); the Private Grazing and Land Assistance Program (reduced by $17 million); and the Farmland Protection Program (reduced by $10 million).
• $20 million shifted from the National Resources Conservation Service’s conservations programs to its’ watershed rehabilitation program.
• The House also funded the Cooperative State Research, Education and Extension Service’s Hatch Act, McIntire-Stennis and Animal Health Disease programs at FY2005 levels.
• Proposed new user fees for the Grain Inspection, Packers and Stockyards Administration or the Agricultural Marketing Service were not included in the bill.

For more information about the agriculture appropriations bill, visit the Appropriations Committee Web site at http://appropriations.house.gov/

DROUGHT EXPECTED TO TRIM AUSTRALIAN WHEAT CROP. The World Grain newsletter (www.world-grain.com) reported on Tuesday that the Australian Bureau of Agricultural and Resource Economics (ABARE) has lowered its expectations for Australian wheat output by 21% from last year.  Production for 2005/06 is projected at 16 million metric tons, compared to 20.4 MMT last year and a five-year average of 21.4 MMT.  Barley and canola production is also expected to fall below last year.

The overall change actually masks an even more significant drop in New South Wales, where production is expected to fall by 55% to 4 MMT.  Other eastern Australian states of Queensland, Victoria and South Australia are down by between 16% and 27% from a year ago.  Bringing up the average are good conditions in Western Australia, which should result in a 16% increase in production from a year ago to over 13 MMT.

NAWG BLOG UP AND RUNNING. NAWG President Sherman Reese has started a blog - an online journal or weblog - about the Association, accessible at www.wheatworld.org/blog/blogger.html or via a link on NAWG’s Web site, www.wheatworld.org.

Reese said in his first post that it was suggested to him a blog could be a good way to communicate with the association’s members. Also in his first post, Reese solicited opinions from members on a variety of subjects ranging from high gas prices to transgenic wheat.  

To read comments others have posted, click on the link at the bottom each post. From that screen, users can also make comments, either as a fellow blogger, anonymously or as “other”.