Feed grain end users want easier opt-out for CRP
Seventy-two groups that represent livestock producers, feed processors and exporters have sent a letter to congressional ag committees asking that the 2012 Farm Bill make it easier for farmers to opt out of the Conservation Reserve Program.
The letter says that historically tight supplies of grains and oilseeds and strong demand into the foreseeable future make it imperative for Congress to reform the Conservation Reserve Program (CRP). The groups want Congress to make it easier for farmers to remove land that can be farmed in an environmentally sustainable way from the CRP before contract expiration, without penalty.
According to a statement released by the National Grain and Feed Association and the National Chicken Council, “The U.S. Department of Agriculture repeatedly has refused to use its existing authority under the 2008 farm law to waive CRP penalties, further justifying legislative action.”
Other groups backing the idea include the American Bakers Association, Louis Dreyfus Commodities, National Oilseed Processors Association, National Pork Producers Council, and The Fertilizer Institute.
The letter to the chairs of the House and Senate Agriculture Committees cites a paper by The ProExporter Network (PRX) that shows “some major risk factors for global grain supplies in 2011 and beyond.”
The letter cites the paper’s main conclusions that:
• Over the past decade, the price index for energy commodities has tripled.
• Global trade is very strong; China is now importing soybeans equivalent to production on 48 million acres.
• Land expansion (such as through CRP changes) could be an effective hedge against risks of climate change variability.
• U.S. acres planted to corn and soybeans must rise to new records in 2011.
• A 5% reduction in yields would force prices to further ration demand.
• Over the past 140 years, there has been a 25% chance for a yield decline of at least 5% in any given year.
Here’s the full letter. And you can find the PRX paper here.