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California Association of Wheat Growers (CAWG)

March 3, 2008

FARM BILL PROGRESS SLOW.  It appears that a tentative farm bill funding agreement was reached last week between House and Senate Agriculture Committee leaders and the leaders of the Senate Finance Committee and the House Ways and Means Committee. 

However, reports this morning indicate that Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Charles Rangel, D-N.Y. had wanted to have a financing plan in place for the Farm Bill by the weekend; they didn't make it.   Although it is unclear when a financing plan for the Farm Bill will be completed, several senators indicated that they were hopeful that it could be done today – Monday.   The House and Senate are waiting for a final number of funding for the bill so a conference committee can finally meet and work out a bill to be sent to the President.

Speaking at the National Farmers Union Convention on Sunday night, House Ag Committee Chairman Collin Peterson, D-Minn., says meetings of leaders over the weekend have been productive and he is confident they will get the bill done.

"We’re moving slowly ahead, at least not backwards and we’re close to getting a final resolution," Peterson says. "“COOL, interstate shipment of meat, permanent disaster, all will get done.”  The Chairman also thinks the bill will take until mid-April to finish. 

Reports that the Committees would try to write a farm bill with approximately $10 billion in new baseline spending were widespread, though offsets for this funding were not reported immediately and as reported above - details were still under negotiation.  Reports also indicated that timing shifts would be likely in the bill, increasing the total farm bill funding number further.

Chuck Conner, deputy agriculture secretary, responded in the press to the potential agreement, saying, “We have made it clear to Congress that we oppose any increase in spending without significant reform. The President has said he will veto a tax and spend farm bill. So, this is not just about a dollar amount – it’s about real reform and no tax increases. Even $5 billion is too much if there is little or no reform and no spending offsets.”

All farm bill discussions continue to focus on funding levels and not on policy framework. As soon as funding level agreements are reached, it is expected that policy discussions will begin anew.

STEM RUST - NEW VIRULENT STRAIN IS SPREADING.  Ug99, a virulent stem rust that could affect most wheat varieties in the United States and elsewhere in the world, has spread across the Arabian Peninsula to Iran.  The report comes from Dr. Jim Peterson, wheat breeder at Oregon State University and chair of the National Wheat Improvement Committee (NWIC).  

Confirmation of the spread came to the international research community from the Agricultural, Research, Education and Extension Organization of Iran in letters dated Feb. 23 to the members of the Global Rust Initiative, the International Maize and Wheat Improvement Center (CIMMYT) and the International Center for Agricultural Research in the Dry Areas,  leading international research centers for agriculture.

Ug99 is a race of stem rust that blocks the vascular tissues in cereal grains including wheat, oats and barley. Unlike leaf or stripe rusts that may reduce crop yields, Ug99-infected plants may suffer up to 100 percent loss.   Ug99 was first identified in Uganda in 1999 and has been migrating eastward through airborne spores carried by prevailing winds.  In 2006, Ug99 was found in Yemen at the southern tip of the Arabian Peninsula. 

The arrival in Iran now means that Ug99 is more closely poised to threaten key wheat producing areas in Southeast Asia and the Middle East, including Pakistan and India.  These immediate risk areas, as assessed by CIMMYT, produce 19 percent of the world’s wheat, and a high proportion of varieties grown in this region are susceptible to this new race. 

The U.S. would also be highly vulnerable to Ug99, with recent assessments suggesting that more than 50 percent of hard winter wheat and more than 75 percent of hard spring wheat acreage are currently planted to varieties that are susceptible to Ug99. New variants of Ug99 have recently been identified in Kenya that increase vulnerability to more than 75 percent of hard winter and spring wheat acreage.

The National Association of Wheat Growers – along with CAWG and NWIC have been working for a number of years to secure funding from Congress to research resistance to Ug99 and will be seeking additional funding for both USDA’s Agricultural Research Service and the U.S. wheat research community to address the ongoing threat. 

NAWG, USW WRITE USDA ON WHEAT EXPORT QUESTIONS.  NAWG and U.S. Wheat Associates wrote Agriculture Secretary Ed Schafer last week, asking him to stay firm in his commitment to free market principles in response to suggestions that the federal government intervene in wheat exports to address domestic shortages.

The organizations wrote, in part:

“The Department and U.S. wheat producers have invested many years and resources to develop overseas markets for our wheat…As a result of this effort, the U.S. wheat industry has earned a valuable reputation as the world’s most reliable supplier. Responding to a short-term supply crunch by restricting exports would be ill-advised, counter to U.S. policy precedent and would undermine the reputation of our industry after years of investment in market development. We must give all our customers access to U.S. wheat, regardless of where they reside.”

The letter, signed by NAWG CEO Daren Coppock and U.S. Wheat President Alan Tracy, repeated a common agricultural truism: the cure for high prices is high prices. “Global wheat production will assuredly expand in response to these prices; this is the time-honored way for participants in a free market to recruit more wheat production,” the letter said.