in the Conservation Reserve Enhancement Program. These enable state agencies
to choose their own conservation priorities, with USDA picking up 80% of the tab.
31 states operate CREPs, involving more than 1.1 million acres. Others will join in.
Meanwhile, USDA also launches its own initiatives…mini CRPs, if you will.
These programs also often let states address specific conservation needs,
but the department oversees all of the various projects and pays all of their costs.
The newest one: State Acres for Wildlife Enhancement provides payments
to landowners for expanding habitat for waterfowl, upland game, fish and more.
Among others: Upland bird habitat buffers, encompassing 198,000 acres,
and prairie pothole duck nesting habitat, covering 38,000 acres. More are on tap.
Landowners can enroll in such programs year-round, a big change
from general CRP contracts, which can be entered only when USDA invites bids.
The department hasn’t enrolled anybody in a general CRP contract since 2006.
Another conservation project: The Farmable Wetlands Program.
Created in 2001, the program is being expanded, courtesy of the new farm bill.
Congress raised its ceiling to 1 million acres, jacked up payments to participants
to 120% of regular CRP rates and added a sign-up bonus of $100 per acre.
Also as part of the program, USDA will pay 40% of farmers’ costs to plant grasses
and trees to hasten conversion of low lying farm fields back into wetlands.
Enrollment is moving quickly…it’ll exceed 200,000 acres by October.
Look for more such extensions of CRP to be added in coming years.
Their generous terms make them popular with farmers and other landowners.
 The run-up in retail food prices is showing early signs of losing steam.
It’s not likely to top 7% this year or climb more than 4%-5% during 2009,
despite some further upticks as high crop prices continue to seep into grocery items.
Key food price drivers...crop prices and supply scares…are starting to ease.
A record world wheat crop is being harvested. Global output and stocks of grains
and oilseeds will rise in the next year. And in the U.S., good weather in most regions
will net more feed grains and soybeans than expected, already pacing price drops
of 20% since July 1 in corn and soymeal…leading livestock and poultry feed sources.
Grain and oilseed prices will erode more as USDA confirms the larger crops,
slowing price increases for meat, dairy, eggs and other items in coming months.
 Can biotech expand its crop repertoire...soybeans, corn, cotton and canola?
You bet. Think fruits and vegetables. Transgenic papaya and squash
have been grown for years, and plum trees that resist the aggressive plum pox virus
are already in orchards. Promising candidates include potatoes that absorb less oil
in the fryer, carrots loaded with calcium and apples that don’t turn brown.
Besides transgenic successes, more crops will be enhanced through transgenomics,
coaxing genes from one variety to another within the same or closely related species.
USDA is expanding its crop insurance discounts on biotech corn varieties
that carry triple-stacked traits for herbicide tolerance and protection from insects.
The discount was started for 2008 crops in four states and is now approved for 2009
for varieties offered by Monsanto, Syngenta and Pioneer Hi-Bred International
(with Dow AgroSciences) in Mich., Mo., Ohio, Ill., Ind., Iowa, Kan., Neb., S.D., Minn.
and Wis. Check out further details at kiplinger.com/letterlinks/biotechcorn.
 USDA will hang tough on a farm subsidy restriction in the 2008 farm bill:
It prohibits most crop subsidies for farms with under 10 qualifying acres.
Farm state senators are peeved that USDA will disallow after-the-fact consolidations
of farms to avoid that 10-acre limit, except when farmers expand by buying land.
Lawmakers told USDA in a report accompanying the bill that they expect the agency
to let farmers aggregate acreage to avoid the limit. But USDA claims that lawmakers
removed the allowance from the farm legislation itself to shave cost estimates.
Congress won’t likely override USDA, allowing mergers to secure subsidies,
due to assigned budget costs. But the next administration may bow to the senators.
USDA provides a user-friendly explanation of 2008 farm bill provisions,
making significant ones easy to find, understand and compare with the 2002 law.
Go to kiplinger.com/letterlinks/farmbilltable to take a look at this useful resource.
 As the autumn potato crop harvest approaches, the price outlook is strong
for most U.S. fresh and processing types of spuds, despite abundant stocks
from 2007 through midyear and normal 2008 yields of winter and spring crops.
Output will be down 8% or so this fall. Farmers planted fewer acres,
especially in major potato raising states...Idaho, Wash. and N.D...because costs
of production are lower and profits, better, for other crops. Fresh-potato distributors
and makers of chips, french fries and the like foresee tight 2009 inventories.
Farmers can expect prices over $20/cwt. for fresh potatoes until spring...
better than average for processing spuds, though a lot of them are contracted early.
The Plains’ favorable weather will soften sunflower prices for the next year.
As an oilseed, sunseed competes with soybeans and canola. It has enjoyed premiums
of around $3/cwt. vs. soybeans in recent years, in part because it has no trans fat.
But a big U.S. sunflower crop is on tap, and Argentina is resuming its foreign sales.
So contract prices for this fall’s crop are now just $23/cwt…near soybean prices.
A striking shift in the use of fertilizers and crop enhancers is on tap.
Keeping soils “healthy” is a big goal now, not only for organic advocates,
of course, but for others as well. Researchers are closely comparing the structure
and composition of healthy soils against crop fertility and yields. Meanwhile...
Expect cutbacks in synthetic fertilizers. Tests show that many chemicals
can harm organisms crucial to soil health. Plus polluted zones are expanding
in coastal areas near major river outlets...the Gulf of Mexico, but others as well.
Soaring prices for synthetics are also working against them: Potash
and phosphates are up 300% in two years...nitrogen, 120%...all fertilizers, 165%.
And the synthetics are increasingly imported, so availability can be a limitation.
There are several ways to reduce fertilizer costs. (Consider soil tests
before making changes to determine the best course of action.) Among them:
No-till or minimum-till (residues will enrich soils and save moisture).
Time nitrogen applications, including splitting delivery to twice a season
to reduce the tons needed and to maximize the enhancement to crops as well.
And compost manure and litter from area livestock operations.
Check out organic fertilizers. They can improve your soil structure
for longer-term benefits, which may make them cost competitive over time.
Consider a new nontoxic crop enhancer called SoySoap that boosts yields
of field crops, farmers report. Learn more at kiplinger.com/letterlinks/soysoap.
Replenish worms in your soil to help restore it (then avoid blasting them
with chemicals). Consider composting your own worms. For intensive field crops
and orchards, buy worm castings to fertilize soils and curb fungal diseases.
Check out kiplinger.com/letterlinks/worms or contact a soils expert near you.
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 Look for the first U.S. pipeline shipments of ethanol early next year.
Ethanol’s corrosive damage to the pipes has kept that fuel out of pipelines
for years. Now, Kinder Morgan Energy Partners LP will rely on corrosion inhibitors
to ship ethanol 150 miles by pipe...from the port of Tampa to Orlando, Fla.
Piping ethanol from the Midwest to the East and West coasts is years off
and will likely depend on Congress extending tax breaks for such projects.
However, two major pipeline firms are already examining the feasibility
of a 1700-mile pipeline to bring ethanol from the Midwest to the Northeast.
A 9¢ drop in the ethanol import tariff? Not this fall. There won’t be time
for Congress to address the issue before adjourning ahead of the November elections.
But expect such a cutback next year, bringing ethanol’s main import duty
down to 45¢, the same level as the ethanol tax credit set by the 2008 farm bill.
A justification for the tariff is that it effectively nullifies the tax credit for imports.
Urban lawmakers will push for the change, saying cheaper foreign ethanol
will help cut gasoline prices. Abetting their case: Brazil is preparing to seek a ruling
by a World Trade Org. panel to declare the U.S. duties as illegal trade barriers.
Sweet potatoes are a new warm-latitudes candidate for making ethanol.
They can compete handily: They have over twice the carbohydrates
(for making ethanol) as corn when the crops are grown in Md...triple if grown in Ala.
Note: Md.’s corn yields are a fourth less than the Corn Belt’s...Ala.’s, a third less.
But carbs in Ala. sweet potatoes approach those of sugarcane, the top ethanol crop.
Also, the tubers need less fertilizer and pesticides than corn, a plus in costs
of production and cutting pollution. But costs of planting and harvesting are higher.
Cassava, a subtropical and tropical tuber, performs similarly in the South.
Grown in the Gulf Coast region, its carbohydrate yields could be triple those of corn.
 U.S. farm-raised catfish are going to be harder to find on American menus.
Fish farmers are draining their ponds and bailing out: Pond acreage is down
by 12% from a year ago in the big catfish raising states of Ala., Ark., La. and Miss.
Moreover, USDA’s July tally of 660,000 parent fish is down 29% from two years ago.
Why? Skyrocketing feed costs are outweighing the fairly strong prices
that farmers and processors are getting for catfish.
The costs of soybean meal, which shot past $450 a ton
earlier this summer, and corn, which topped $7/bu.,
make it too pricey to feed fish and still earn a profit.
It’s more profitable to raise field crops
than fish, so a lot of ponds will be dried and seeded.
Catfish processing plants will close as a result
of the shift away from fish farming in the year ahead.
Look for processing to fall sharply in late 2009 or so,
after about a year of more moderate cutbacks.
Imports from China and Vietnam will fill in
for U.S. demand. So will other types of farmed fish.
 Farmers will soon use center-pivot sprinklers for rice instead of flooding,
the method long used to water U.S. rice in Gulf Coast states, Mo. and Calif.
Univ. of Missouri researchers say center-pivot sprinkling shows marked advantages.
Sprinkling takes half the water used in flooding. That spells big savings
on water, labor and power for pumps and skips costs of building paddies and canals.
Sprinkling also opens rice production to soils too porous for efficient flood irrigation.
Plus it allows farmers to rotate crops…not an option when maintaining rice paddies.
But sprinkled fields require more seed than flooded ones...likely more fertilizer, too.
Recent research in Brazil using center pivots to grow rice produced similar findings.
 The U.S. sheep flock has resumed its steady decline after an uptick in 2005
when ranchers expanded parent flocks and recorded a 1% larger lamb crop.
Look for a continued annual shrinkage in breeding stock and lambs of 2%-3%,
despite firm prices for fat lambs: Expect $90/cwt. to year-end at San Angelo, Texas.
Americans continue to eat less lamb and mutton...per capita, 1.1 pounds
this year, falling to under a pound in a few years. Imports, making up more than half
of U.S. consumption, are slipping as well, partly because of the cheap dollar.
If it’s a calm horse you want during training, keep it away from the sweets,
research at Montana State Univ. suggests. In blind tests, young horses fed hay
were less jumpy and more obedient than counterparts fed hay plus sweet grain
(a blend of grains and molasses). Of course, young horses are often fed sweet grain
because it makes them more energetic and helps give them glossier coats.
 Efforts to safeguard bees and other critical pollinators are going global,
in light of reports that colony collapse disorder is also striking bees
in Europe, South America and China. A five-year effort being coordinated
by the UN Food and Agriculture Org. will enlist scientists, governments, farmers
and industries. The aim is to improve overall protection for bee populations
and boost repopulation efforts for all pollinators…birds, bats, bees and other insects.
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©2008 The Kiplinger Washington Editors
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Washington, Aug. 29, 2008
