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Texas Agriculture Archive

May 21, 2004

Terra, Agrium hurt by cheap foreign ammonia
Cheap foreign ammonia has cut into profits for U.S. anhydrous products produced by companies such as Terra Industries, Inc., and Agrium Inc., who are facing a deadly mixture of high domestic natural gas prices (90 percent of the input cost of ammonia) and a global collapse in ammonia prices due to low-cost production in Ukraine and the Caribbean.

In sharp contrast to the fate of nitrogen producers, those producing phosphate-based fertilizers, such as IMC Global and Potash Corp. of Saskatchewan Inc., have been doing well on increased soybean acreage in North America, which has kept prices stable on strong demand.
Source: Doane's Agricultural Report; Vol. 67, No. 16-1; April 16, 2004

U.S., Japan remain far apart on beef exports
Beef exports to Japan are blocked until fall at the earliest. The two sides did agree to setting up a panel of experts to lay the groundwork for resuming trade. The panel will meet monthly through the summer to resolve issues.

USDA's optimistic assumption is that U.S. beef exports to Japan will resume in the fall. However, it is not clear that the U.S. and Japan are any closer on the issues disrupting trade just because they agreed to set up a panel.

To date, the key sticking point has been Japan's demand that 100 percent of cattle slaughtered be tested while USDA intends to test less than 1 percent—but target high-risk animals.
Source: Doane's Agricultural Report; Vol. 67, No. 18-1; April 30, 2004

Creekstone takes USDA to task on BSE testing
According to wire reports, Creek-stone Farms Premium Beef continues to search for ways to circumvent the Agriculture Department's refusal to allow private testing of slaughtered cattle for bovine spongiform encephalopathy (BSE).

Desperate to find a way to resume beef sales to Japan, the company reportedly offered to allow Japanese officials to use their lab in Kansas to conduct BSE tests on tissue samples. The company has also considered shipping brain samples from slaughtered cattle to Japan for testing.

USDA has not commented on the issue, as Creekstone has not submitted a formal request that Japanese officials be allowed to conduct tests at their plant.

Another meat packer has asked the Agriculture Department for permission to privately test its cattle for bovine spongiform encephalopathy. The Gateway Beef Cooperative in Overland, Mo., is following the lead of Creekstone by requesting permission to test 100 percent of its cattle in order to export to Japan.

USDA has not responded to the request.

Bunge profits soar 75 percent
Bunge Ltd. profits soared by 75 percent for the quarter just ended thanks to exceptional soybean business with China, edible oil sales in Eastern Europe, and better-than-expected margins on fertilizer.

Bunge has sought a balance of business between the U.S., South America, and Europe that has lessened the impact of tight soybean supplies in the U.S.
Source: Doane's Agricultural Report; Vol. 67, No. 18-1; April 30, 2004

Bird problems? Try garlic!
Scientists at the University of Albany in New York state are studying the effectiveness of garlic oil as a bird repellent.

In wire reports, researchers said that pungent garlic oil appears to ward off European starlings, the raucous black birds known for destroying crops and stealing grain from feed troughs.

European starlings were brought to New York City's Central Park in the late 1800s and now number close to 200 million throughout North America.
Source: AFBF; Executive Newswatch; May 7, 2004

Small producer driving Texas oil industry
The days of the big oil strike are long gone in Texas.

While the oil still flows, it's the small producer that is driving the industry. The big names have been selling wells to smaller companies, according to Frank Tomicek of the Texas Railroad Commission, the state agency that regulates the oil industry in Texas.

Tomicek said small and midsize operators are assuming production roles in some of these areas, and they may actually be able to operate more efficiently even with decreased production volumes since their cost of operation is significantly lower than that of larger companies.

Oil prices have seen both the high side and the low side in the last 10 to 15 years. According to the Texas Comptroller, the taxable price per barrel of oil reached as high as $34 in 1990; fell as low as $9.20 in 1999; and rose back up to $34 in March 2003.

Texas was the top oil-producing state in 2002 with 365,817,000 barrels, though the state's total production trailed the amount of oil generated in federal waters in the Gulf of Mexico at 567,810,000 barrels.
Source: Fiscal Notes; Texas Comptroller; April 2004

Farm import tariff formula debated
According to wire reports, debate over what formula to use for reducing tariffs on farm imports remains a contentious issue in Geneva.

Leaders from the United States, the European Union and the G-20 group of developing countries disagree on how to go about reducing tariffs. The United States and EU favor a "blended formula" that uses a combination of approaches for reducing tariffs; the G-20 group says that plan will not work for their countries.

Agreement on how to reduce tariffs must be reached in order for agriculture talks to advance when World Trade Organization members meet in July.
Source: AFBF; Executive Newswatch; May 7, 2004

Shrink wrap your equipment
The concept that led livestock farmers to stuff silage into long plastic casings instead of silos is now available for storing equipment.

"Dr. Shrink" of Manistee, MI, offers a device and materials that let you shrink wrap even large seasonal equipment (such as grain dryers) in plastic as an alternative to sheds.
Source: Doane's Agricultural Report; Vol. 67