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The U.S. budget includes proposals to enhance crop insurance coverage and reduce costs to deliver the program, so that crop insurance will provide coverage that is sufficient to sustain most farmers in times of loss. Proposals include a higher minimum coverage level, tying the receipt of direct payments to purchase of crop insurance, and changes in fees, premium rates, and delivery expenses.
Source: Doane's Agricultural Report; Vol. 68, No. 6-1; Feb. 11, 2005
Canada proposes new regs for U.S. cattle imports
The Canadian Food Inspection Agency has proposed new regulations that would permit the importation of live cattle born in 1998 or later or beef from animals of any age that have had specified risk material removed. Certain animal feeds and other at-risk materials will be prohibited for trade.
Restrictions on imports to Canada were put in place after the detection of bovine spongiform encephalopathy in Washington State in December 2003.
The proposed regulations were published in the Canada Gazette I. A 30-day comment period, ending March 1, has been established.
Source: AFBF; Executive Newswatch; Feb. 1, 2005
USDA's forecast of 2005 farm income is still lofty
Net farm income is forecast at $64.4 billion in 2005 by USDA, down $9.2 billion from 2004's record, but still the second highest ever seen. But a better barometer is net cash income, which USDA puts at $78.1 billion for 2005, a record and up from 2004. USDA says farmers postponed some sales of 2004 crops into 2005.
Big crops are a key factor constraining farm income for 2005. USDA notes cash receipts for crops are forecast at $104.6 billion, down from the 2004 record "due to oversupply and downward pressure on market prices."
For livestock, the value of production and cash receipts are seen at $117.9 billion for 2005, the third consecutive year and fourth out of the last five years they both passed the $100 billion threshold.
Government payments are seen rising to $24.1 billion in 2005, driven in part by more marketing loan program benefits.
Source: ProFarmer; Vol. 33, No. 7; Feb. 19, 2005
Investors turn to farmland
Tired of watching their hard-earned money evaporate in stock market investments like Enron and World Com, some investors have discovered farmland as a tangible asset.
A good example of this was the enthusiastic turnout for the Farmland Investment Fair held in Joliet, IL, and sponsored by the Chicago Farmers, an organization that includes farmers, landlords and agribusiness.
While the fair was in progress, Jeff Martin, event chairman, said, "We've got a record turnout compared to the last 10 years. We've had over 100 walk-ins and we had around 250 people pre-register."
Admittedly, the attendees were not all novices. In fact, some were sellers of farmland looking for other opportunities to buy. Under Section 1031 of the Internal Revenue Code, property exchanges can result in the deferral of capital gains tax.
The 1031 tax deferral exchanges are considered one of the reasons farmland prices are rising, and anything rising in value is bound to get the attention of outside investors.
Source: AFBF; Focus on Agriculture; Feb. 21, 2005
GM promotes 'flex-fuel' vehicles
General Motors has kicked off a campaign to promote its "flex-fuel" vehicles, which run on either traditional gasoline or a high-ethanol gas blend. The company donated demonstration vehicles for use by 28 state governments.
Specially-equipped Chevrolet Avalanches can run on E85, a mix of 85 percent ethanol and 15 percent gasoline. About 30 percent of gasoline sold in the United States is E10, a 10 percent ethanol mix. GM currently produces several flex-fuel models and will roll out E85-compatible versions of its Chevrolet Impala and Monte Carlo models in the next year or so.
Source: AFBF; Executive Newswatch; Feb. 14, 2005
Demand for U.S. beef increases
Consumer demand for beef in the United States was up nearly 8 percent in 2004 from 2003, according to economics reports.
The reports noted that a steady increase in beef demand since 1998 has increased the value of a metric ton of fed cattle by $22.
Source: AFBF; Executive Newswatch; Feb. 8, 2005
