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California Association of Wheat Growers (CAWG)

February 19, 2008

ANDERSON AND BOURIS VISIT WITH CALIFORNIA CONGRESSIONALS.  Ian Anderson, President and Mike Bouris, Vice President spent February 2^nd through 6^th in Washington, DC attending the mid-year meetings of the National Association of Wheat Growers.  In addition to their work with the national association, they visited with the Offices of Representatives Bono, Cardoza, Costa, Filner, Herger, McCarthy, and Nunes and Senators Boxer and Feinstein.  

The key messages they delivered:

·        Wheat prices are up, but so are production costs;   

·        We need a Farm Bill by March 15^th and support for the Senate’s provisions re:  Hard White Wheat Program and Prohibiting USDA-FSA from charging fees to the wheat commissions across the U.S.;

·        We continue to support research with highlights of ARS wheat research and the recent USDA Discovery Award to Jorge Dubcovsky;

·        A request for a letter of support for re-filling Dr. Lee Jackson’s Small Grain Extension Specialist Position; and,

·        A briefing on the status of Karnal Bunt of Wheat in the Palo Verde Valley of Riverside County.

FUNDING NUMBER FOR FARM BILL EXPECTED TODAY.  House and Senate leaders were expected to agree over the weekend on a final funding number for the farm bill after a week of public and private disputes over what that number should be and how it should be determined.

Early in the week and during a press call Wednesday, House Agriculture Committee Chairman Collin Peterson (D-Minn.) announced with House Agriculture Ranking Member Bob Goodlatte (R-Va.) that they believed they had support from the Bush Administration for a funding limit of $6 billion over baseline.

Many Senators, most of the agricultural community and others interested in the farm bill quickly expressed concern that this number is not sufficient to address all the needs in this year’s bill. Forty commodity groups, including NAWG, wrote House and Senate Agriculture Committee leaders Thursday expressing concern that any less than $12.5 billion over baseline would severely underfund the bill.

The letter read, in part:

“The Commodity Title has already experienced a 60 percent decrease in baseline spending. To strain the safety net for American agriculture with a further $6.5 billion cut is excessive…[W]e believe that providing less than $12.5 billion in additional funding will require the farmer safety net to bear the unfair burden of paying for increases in spending in other areas of the bill.

“It is easy for some to say that, in these times of good prices, the safety net for agriculture can or should be weakened. However, we should learn from the past. Markets move. During the life of the 1996 Farm Bill, generally good prices in 1995-1996 quickly turned to poor prices in 1999 and beyond. Combined with the dramatic increases in farm input prices already faced by agriculture producers today, a downturn in commodity costs could prove disastrous for American agriculture. For this reason, it is imperative that prices today not be used as a justification to erode the future safety net for agriculture.”

Policy considerations were also in play this week, despite Peterson’s insistence on a funding focus. On Monday, more than 20 commodity groups including NAWG wrote leaders of the Agriculture Committees, urging them to keep final policy prescriptives within the bounds of the House- and Senate-passed versions of the farm bill. The groups writing Thursday also encouraged conferees to stay within the bounds of the two passed bills.  House and Senate Agriculture Committee leaders are expected to work over the weekend to arrive at a final budget number by Sunday so policy discussions can begin in earnest on Monday.  Parts of the 2002 Farm Bill have been extended until March 15, primarily to preserve budget baseline. Congress is out next week for Presidents’ Day recess.

GROWERS GET STATUS UPDATE OF BIOTECHNOLOGY IN WHEAT.  One highlight of last week’s wheat meetings in Washington, D.C., was a very thorough and thought-provoking presentation from Dr. William Wilson of North Dakota State University on the status of biotechnology, or genetic modification (GM), as it relates to wheat.

The presentation, given at a joint meeting of the NAWG and U.S. Wheat Boards of Directors and available on NAWG’s Web site, provided a number of key take-aways of crucial importance to the wheat industry, including: 

·        There have been substantial negative shifts in the wheat supply curve in both the United States and Canada meaning that at a given price producers will supply less wheat, and prices will have to be higher to get the same planted acreage.

·        With the advent of GM sugar this year, wheat will be the only major ingredient in one branded bakery snack food that is not GM.

·        In a variety declaration and testing system, the seller’s risk of having product rejected that should not be is 1.5 percent; for the buyer, the risk of having a purchase show up out of contract specs is 1/5 of 1 percent.

·        There are significant economic gains both to producers and to consumers in countries that adopt biotechnology.

Wilson said many things have changed in the past four years that might influence the commercialization GM wheat. GM traits can be found in more crops while crops with GM traits are seeing them become more sophisticated. GM acres are rising throughout the world, even while supply and demand shifts occur because of renewable fuel and demand for special traits in commodities. Additionally, Australia is doing field trials of GM wheat, animals are now being cloned and segregation systems have matured.   Concerns about the impacts of GM crops on wheat competitiveness and supply are also heightened.

A biotech trait typically takes 10 to 12 years from concept to commercialization, costing more than $100 million. Wilson gave attendees an outline of possible GM traits for wheat, corn and soybeans, including Dow AgroSciences’ and Monsanto’s corn SmartStax, which is anticipated to combine eight genes by the end of the decade.

Wilson’s full presentation is available at:
http://www.wheatworld.org/pdf/commercializing%20gm%20wheat.pdf