Those Amber Waves Are Fueling Exports

Foreign demand for U.S. grain keeps rising, and farmers have cash to spare. Just a few years ago, who would have guessed that farms would turn out to be a bright spot in the U.S. economy? Farmers were fretting about falling prices and mounting competition from Russia and Ukraine. Today drought has withered much of the Russian and Ukrainian crops, and the world needs more grain—and soybeans and pork—than ever. The best place to get it: the fertile soil of the U.S. Midwest and South, home to some of the most productive farms on earth.

In the first eight months of 2010, U.S. agricultural exports increased 14 percent, to $69.8 billion, from the same period a year earlier, according to the most recent U.S. Agriculture Dept. data. Joseph Glauber, chief economist for the USDA, says farm exports in the year that began on Oct. 1 may top the 2008 record.

This cornucopia is providing an unexpected boost to President Barack Obama's drive to double exports by 2015. China's need for cotton, pork, corn, and soybeans will make it the second-biggest U.S. agricultural trading partner in 2011, the USDA estimates. Shipments of farm products to China will total $15 billion, compared with Canada's $16.8 billion and Mexico's $14.6 billion. Corn prices are up over 60 percent since June, while wheat as much as doubled. "It's going to be the best year American farmers have had in two and a half decades," says Dennis Gartman, an economist and editor of The Gartman Letter in Suffolk, Va.

The cash that farmers are fingering in their pockets is boosting companies at home as well. While agriculture accounts for just 1 percent of the $14.3 trillion U.S. economy, the actual impact of surging prices may be 10 times more once spending on equipment, seeds, grain handling, and food processing is added, says Jason Henderson, an economist at the Federal Reserve Bank of Kansas City.

Sales of farm equipment are correlated to growers' cash receipts, which should increase 24 percent, to $118.4 billion, for majåor crops in the 2010-11 season, Ann Duignan, an analyst at JPMorgan Chase (JPM) in New York, said in an Oct. 8 report. That's good news for Moline (Ill.)-based Deere (DE), the world's largest farm-equipment maker as well as rivals Amsterdam-based CNH Global (CNH) and Duluth (Ga.)-based Agco (AGCO), she says.

Deere's per-share profit will more than double, to $4.25, in the current fiscal year, according to the mean estimate of eight analysts surveyed by Bloomberg. Cargill, the giant grain handler and food processor, said on Oct. 12 that thanks to price volatility and the performance of its affiliate, fertilizer producer Mosaic (MOS), profit for the latest quarter rose 68 percent.

Back in the 1980s, falling prices, record-high interest rates, and too much farmland bought on credit prompted a wave of farm bankruptcies. Now low interest rates are amplifying the boom, says Tom Neher, vice-president for AgStar Financial in Rochester, Minn. The bank issued twice as many farm-equipment loans as expected in a recent promotion. "I've seen more brand-new combines bought than I've seen for a long, long time," says Neher, who helps manage $2.1 billion in grain-related loans and leases for AgStar. "When you can get a machinery loan for 4 percent interest, that's about as low as it ever gets."

There are limits to how much cash will trickle down to the Main Streets of rural America, says Ernie Goss, an economics professor at Creighton University in Omaha: "You have fewer and fewer farms, and fewer and fewer farm families, so it hasn't spilled into small businesses like the drugstore or the shoe store." Farm prices have been supported by a lower dollar, which boosts exports, and not by rising domestic demand, says Goss. Small businesses "are mystified by all these reports about how wonderful the rural economy is. That's because they're selling in Greeley, Neb., and the farmer out there is selling in Beijing."

Still, the mix of foreign demand and a weak dollar is the best news farm country has had for decades. "It is a perfect situation for U.S. farmers, the best since the early 1970s," says Bill Adams, a trader at ACT Currency Partner, a currency and commodity specialist in Zurich. "There will be quite a few Cadillacs sold in the Midwest this Christmas."

The bottom line: Farm exports from the U.S. are rising fast. That's benefiting farm-equipment makers, fertilizer companies, and other suppliers.  By Whitney McFerron, Jeff Wilson, Shruti Singh and Elizabeth Campbell

Why Monsanto is paying farmers to spray its rivals’ herbicides

Monsanto's ongoing humiliation proceeds apace. No, I'm not referring to the company's triumph in our recent "Villains of Food" poll. Instead, I'm talking about a Tuesday item from the Des Moines Register'sPhilip Brasher, reporting that Monsanto has been forced into the unenviable position of having to pay farmers to spray the herbicides of rival companies. 

If you tend large plantings of Monsanto's "Roundup Ready" soy or cotton, genetically engineered to withstand application of the company's Roundup herbicide (which will kill the weeds -- supposedly -- but not the crops), Monsanto will cut you a  $6 check for every acre on which you apply at least two other herbicides. One imagines farmers counting their cash as literally millions of acres across the South and Midwest get doused with Monsanto-subsidized poison cocktails.

The move is the latest step in the abject reversal of Monsanto's longtime claim: that Roundup Ready technology solved the age-old problem of weeds in an ecologically benign way. The company had developed a novel trait that would allow crops to survive unlimited lashings of glyphosate, Monsanto's then-patent-protected, broad-spectrum herbicide. It was kind of a miracle technology. Farmers would no longer have to think about weeds; glyphosate, which killed everything but the trait-endowed crop, would do all the work. Moreover, Monsanto promised, Roundup was less toxic to humans and wildlife than the herbicides then in use; and it allowed farmers to decrease erosion by dramatically reducing tillage -- a common method of weed control.

There was just one problem, which the Union of Concerned Scientists pointed out as early as 1993, New York University nutritionist and food-politics author Marion Nestle recently reminded us. When farmers douse the same field year after year with the same herbicide, certain weeds will develop resistance. When they do, it will take ever-larger doses of that herbicide to kill them -- making the survivors even hardier. Eventually, it will be time to bring in in the older, harsher herbicides to do the trick, UCS predicted. 

At the time and for years after, Monsanto dismissed the concerns as "hypothetical," Nestle reports. Today, Roundup Ready seeds have conquered prime U.S. farmland from the deep South to the northern prairies -- 90 percent of soybean acres and 70 percent of corn and cotton acres are planted in Roundup Ready seeds. Monsanto successfully conquered a fourth crop, sugar beets, gaining a stunning 95 percent market share after the USDA approved Roundup Ready beet seeds in 2008. But recently, as I reported here, a federal judge halted future plantings of Roundup Ready beets until the USDA completes an environmental impact study of their effects.

Given what happened to other Roundup Ready crops, it's hard to imagine that the USDA can come up with an environmental impact study that will exonerate Monsanto's sugar beet seeds. Today, there are no fewer than 10 weed species resistant to Roundup, thriving "in at least 22 states infesting millions of acres," The New York Times recently reported. And the ways farmers are responding to them are hardly ecologically sound: jacked-up application rates of Roundup, supplemented by other, harsher poisons.

And as Monsanto's once-celebrated Roundup Ready traits come under fire, there's another Roundup problem no one's talking about: Roundup itself, once hailed as a an ecologically benign herbicide, is looking increasingly problematic. A study by France's University of Caen last year found that the herbicide's allegedly "inert" ingredients magnify glyphosate's toxic effects. According to the study, "the proprietary mixtures available on the market could cause cell damage and even death" at levels commonly used on farm fields.

Moreover, the annual cascade of Roundup on vast swaths of prime farmland also appears to be undermining soil health and productivity, as this startling recent report shows.

Meanwhile, the endlessly repeated claim that Roundup Ready technology saves "millions of tons" of soil from erosion, by allowing farmers to avoid tilling to kill weeds, appears to be wildly trumped up. According to Environmental Working Group's reading of the USDA's 2007 National Resource Inventory, "there has been no progress in reducing soil erosion in the Corn Belt since 1997." (The Corn Belt is the section of the Midwest where the great bulk of Roundup Ready corn and soy are planted.) "The NRI shows that an average-sized Iowa farm loses five tons of high quality topsoil per acre each year," EWG writes.

In short, Monsanto's Roundup Ready technology is emerging as an environmental disaster. The question isn't why a judge demanded an environmental impact study of Roundup Ready sugar beets in 2010; it's that no one did so in 1996 before the technology was rolled out. After all, the Union of Concerned Scientists was already quite, well, concerned back then.

As I wrote in June, rather than spark a reassessment of the wisdom of relying on toxic chemicals, the failure of Roundup Ready has the U.S. agricultural establishment scrambling to intensify chemical use. Companies like Dow Agriscience are dusting off old, highly toxic poisons like 2, 4-D and promoting them as the "answer" to Roundup's problems.

In a better world, farmers would be looking to non-chemical methods for controlling weeds: crop rotations, mulching, cover crops, etc. Instead, they're being paid by Monsanto to ramp up application of poisons. Perhaps the USDA's main research arm, the National Institute of Food and Agriculture, will rise to the occasion by funding research in non-chemical weed-control methods? Not likely, since the Obama administration tapped a staunch Monsanto man to lead that crucial agency.

But instead of true innovation, we have the spectacle of Monsanto paying farmers to dump vast chemical cocktails onto land that not only feeds us, but also drains into our streams and rivers. BY Tom Philpott

Sprouting for Health

When we sprout grains, the grain itself is treated better, and therefore treats the human body better.  We will review the nutritional and digestive benefits of sprouted grain breads, the methods for sprouting grains, and the formulation and process of a truly wonderful 100% sprouted grain bread.  

With the sprouting method, products become far more digestible because the starches are turned into simple sugars; the proteins are broken down into amino acids; and the fats are converted into soluble fatty acids.  The overall enzyme content of the product is greatly increased and the sprouting process.

With growing concerns about the American diet, many of us are beginning to reduce our intake of highly processed, white flour-based breads.  Whole grain breads, whether wheat or rye, seeded or not, commercially-yeasted or naturally-leavened, are some of the many choices we consider when consuming our bread products. Bakeries from small to large have taken note, and more varieties of healthful breads are becoming available every day.  
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USDA To Resume Biomass Crop Assistance Program

The U.S. Department of Agriculture will resume a program to pay farmers for producing non-foodstock crops for conversion into biofuels and biomass-generated energy.  Agriculture Secretary Vilsack announced publication of a final rule to implement the Biomass Crop Assistance Program (BCAP) during a speech Thursday to the National Press Club in Washington.

BCAP uses a dual approach to support the production of renewable energy. First, it provides assistance for the establishment and production of eligible renewable biomass crops within specified project areas. Producers who enter into BCAP contracts may receive payments of up to 75% of the cost of establishing eligible perennial crops. Further, they can receive payments for up to five years for annual or non-woody perennial crops and up to 15 years for woody perennial crops.

In addition, BCAP also assists agricultural and forest landowners and operators by providing matching payments for the transportation of certain eligible materials that are sold to qualified biomass conversion facilities. The facilities convert the materials into heat, power, biobased products or advanced biofuels.

The Secretary also announced jointly with the Federal Aviation Administration (FAA) a five year agreement to develop aviation fuel from forest and crop residues and other "green" feedstocks in order to decrease dependence on foreign oil and stabilize aviation fuel costs. Under the partnership, the agencies will bring together their experience in research, policy analysis and air transportation sector dynamics to assess the availability of different kinds of feedstocks that could be processed by bio-refineries to produce jet fuels.

The agencies already have existing programs and collaborative agreements with private and public partners and resources to help biorefiners develop cost-effective production plans for jet aircraft biofuels.

The Secretary also discussed a biofuels report prepared by USDA's Economic Research Service (ERS)that says replacing more petroleum with cost-competitive domestic biofuels reduces crude oil imports, thereby lowering prices for energy and benefiting the U.S. economy.
Read additional coverage at the link below.

The BCAP program previously operated as a pilot, pending publication of the final rule. Authorized in the Food, Conservation, and Energy Act of 2008, BCAP is designed to ensure that a sufficiently large base of new, non-food, non-feed biomass crops is established in anticipation of future demand for renewable energy consumption.