California Wheat Commission  

Home | Directories | Quality Info | Variety Survey | CAWG Update | News/Info. | Laboratory | Links

California Association of Wheat Growers (CAWG)

March 31, 2007

THAEMERT TESTIFIES ON WHEAT’S FARM BILL NEEDS, PRIORITIES. NAWG President John Thaemert testified before Congress Wednesday about the 2002 Farm Bill’s failure for wheat growers and what wheat growers need in the 2007 Bill. 

Speaking before the House Committee on Agriculture’s Subcommittee on General Farm Commodities and Risk Management, Thaemert told Members that the 2002 Farm Bill has not worked well for wheat growers, who have received no benefits from the loan deficiency payment and minute benefits from the counter-cyclical payment over the term of the 2002 Bill.

Thaemert also gave details of NAWG’s 2007 Farm Bill proposal for wheat – a wheat direct payment of $1.19 and a wheat target price of $5.29. The NAWG Board of Directors adopted this proposal after extensive examination of historical input costs and what affordable levels of crop insurance can typically cover.

To read all of NAWG’s 2007 Farm Bill recommendations in NAWG’s “Road Map to the 2007 Farm Bill”, please visit: http://www.wheatworld.org/html/info.cfm?ID=20

DISASTER ASSISTANCE PASSES SENATE; LIKELY TO BE VETOED. This week, the Senate passed its version of the emergency supplemental spending bill for the wars in Iraq and Afghanistan by a vote of 51-47. The legislation includes about $4 billion for agriculture disaster assistance.

The agriculture provision is a traditional disaster assistance program providing payments to producers who experienced crop losses exceeding 35 percent in 2005 or 2006.

The Senate will go to conference with the House over a version that passed the House last week. The two bills contain several differences that will be need to be worked out before a final bill can be sent to President George W. Bush, who will likely veto it. The Administration has announced its opposition to both bills, which contain a definite date for troop withdrawal from Iraq in addition to spending levels above the President’s request.

If the bill is vetoed, it will likely have to be rewritten. NAWG will continue to work with Members in the House and Senate on securing disaster assistance in any new emergency spending legislation.

HOUSE PASSES BUDGET, AG RESERVE FUND INCLUDED. The House passed a nearly $3 trillion budget on Thursday by a narrow margin of 216-210. Included in the resolution was $20 billion reserve fund for agriculture. 

The $20 billion provided by the resolution would be put into a “reserve fund” for the 2007 Farm Bill. The conditions under which the money can be used are unclear at this point, but it would likely be available only through an offset, either with decreased spending or increased revenue from somewhere else in the agriculture or general budgets. This is similar to a $15 billion “reserve fund,” which would also have to be offset, in the Senate budget resolution.

NAWG and other agricultural organization have argued for increased budget allocations for months, as the level of budget authority allowed will likely be the chief determining factor for major portions of the 2007 Bill. NAWG will continue to work on this issue and report to members as needed.

USDA PLANTING ESTIMATES SHOW SPRING DOWN, TOTAL UP. (U.S. Wheat Associates)

A survey of farmers’ intentions carried out by USDA’s National Agricultural Statistics Service (NASS) confirmed Friday an expected decline in non-durum, spring planted wheat as producers shift acreage to corn.  

Extremely strong corn prices are anticipated to drive a 15 percent increase in corn plantings, diverting U.S. spring wheat acres, soybean acres (down 11 percent) and cotton acres (down 20 percent), the report said.

The decline in spring wheat offsets an increase in winter wheat plantings, up 10 percent over last year, and in durum plantings, up 6 percent over last year, yielding a 5 percent (3 million acre) increase in wheat acreage of all classes.

The NASS estimate of a 7 percent, 1.1 million acre, decline in non-durum spring wheat acreage, is at the lower end of trade estimates that preceded the report, which were predicting a decline ranging from 6 to 15 percent. An increase of 120,000 acres planted to durum was a surprise as the trade anticipated a decline.

Spring wheat acres in North Dakota account for more than half of the U.S. total. Superior economic returns for corn, barley and other crops over HRS are expected to lead to a 3 percent decline in spring wheat acres.

According to the NASS survey, corn acreage will increase by 54 percent (910,000 acres) in North Dakota, oats by 26 percent (110,000 acres) and barley acreage will rise 18 percent (200,000 acres). Corn acreage is also expected to climb in other major HRS states, such as Minnesota and South Dakota, with farmers reporting intentions to plant 8 percent (600,000 acres) and 9 percent (400,000) more in corn than last year, respectively.  

The NASS report is the first official government estimate of the year. An actual spring plantings report will be released in June.

The NASS Prospective Plantings Report can be found at:
http://usda.mannlib.cornell.edu/usda/current/ProsPlan/ProsPlan-03-30-2007.pdf

According to the California Wheat Commission, winter wheat acreage in California was increased to 550,000 acres from 530,000 acres estimated in USDA's January 2007 report.  This represents a 22% increase over the 2006 crop.  Durum acreage is reported at 100,000 acres, no change from USDA's report in January.  This is a 43% increase over the plantings for last year's crop.

FSA EXTENDS DCP SIGN-UP DEADLINE UNTIL AUGUST 3. USDA’s Farm Service Agency said this week it is extending the sign-up deadline for the 2007 Direct and Counter-cyclical Program (DCP) to August 3.

Problems with the FSA’s Web-based computer system caused agency officials to extend the deadline in order to ensure adequate opportunity for all producers to participate in the sign-up.

While the sign-up deadline is extended, the cut-off for participation remains Sept. 30. Those producers failing to sign up by Aug. 3, but before Sept. 30, will pay a late-file fee of $100.

Enrollment in DCP for the 2007 contract period began Oct. 1, 2006, and was scheduled to end on June 1. The extension applies only to the enrollment period, and does not extend the DCP contract period.

DCP provides payments to eligible producers on farms enrolled for the 2002 through 2007 crop years. There are two types of DCP payments - direct payments and counter-cyclical payments. Both are computed using the base acres and payment yields established for the farm. The Farm Security and Rural Investment Act of 2002 authorizes DCP, which is administered by FSA.

WEEKLY WHEAT BULLETIN AVAILABLE FROM CWC. Please see the current Weekly Wheat Bulletin for an update on the 2007 wheat crop. The Wheat Bulletin may be accessed on the California Wheat Commission website: www.californiawheat.org.