DlG—Lancaster Farming, Saturday, February 16,1980 Action CHICAGO, D.C. A spokesman for the U.S. Department of Agriculture has said most of the un certainty U.S. agriculture has faced due to the suspension of sales to the Soviet Union by now has been reduced by the series of actions taken by the Ad ministration and the Department. Speaking before the Fertilizer Institute’s annual meeting here, Howard W. Hjort, director of economics, policy analysis and budget, cited a rebounding of farm prices and rapidly moving exports as signals of a continued strong agricultural plant. In spite of the suspension in sales, he said, the U.S. will continue to be the world’s greatest agricultural ex porter. However, he said, one issue of prime importance to the fertilizer industry remains unresolved the question of whether a land diversion program will be implemented this spring. Futhermore, while U.S. policy on fertilizer product trade has been announced, the issue has not yet been completely settled. “Before the suspension of grain shipments to the USSR, we had forecast consumption of nitrogen, phosphate and potash to increase three to four per cent, as a result of an in crease in planted acreage and higher application rates. Fertilizer prices were forecast to nse substantially above 1978-79 levels in response to strong domestic and foreign demand and mcrea°'ng production costs. “The invasion of Afghanistan and the U.S. response have complicated this outlook,” Hjort said. On January 18, President Carter imposed a quota on 1980 Russian ammonia imports, limiting imports to 1 million short tons in calendar year 1980. Of this quota, it is estimated that 500,000 tons will be imported cited to during January July. “By itself, this action would have had little impact on nitrogen supplies or price,” Hjort said. However, actions taken by the In ternational Longshoremen’s Association have been a complicating factor since the union was refusing to load or unload all cargo to or from the USSR effectively stopping ammonia imports on the East Coast and all phosphate exports. On Friday, however, the ILA was ordered to stop in terfering with phosphate exports to the Soviet Union. “However, the consistency of a policy to allow fertilizer trade with the Soviets at a time when grain sales had been suspended, had come into question,” Hjort said. Secretary of Commerce Philip M. Klutznick has announced that in the in terest of U.S. foreign policy, the U.S. suspended new licensing of phosphate ex ports under general licenses, effective February 4. “In the future, phosphate exports will require validated licenses before shipment can be made to the USSR. Shipments of phosphate on dock for loading or in transit to a port have been given 48 hours to move under general licen ses. But until a thorough assessment of the issues is completed, no licensing action will be taken,” Hjort said. “The net result of these actions could mean some downward pressure on domestic phosphate prices,” Hjort said. “On the other DON'T BE SLOW Call Now To Place Your CLASSIFIED AD Ph: 717-394-3047 or 717-626-1164 reduce ag’s uncertain prospects hand, near-term ammonia imports could be constrained slightly.” Whether a diversion program is implemented in 1980 will also affect demand and prices for fertilizer, he added. Hjort described the measures President Carter directed in response to the Soviet Unions invasion of Afghanistan, mainly dealing with the suspension of grain sales above the eight million tons allowed under terms of the U.S. - USSR Grains Supply Agreement and its potential impacts on American farmers. “In other circumstances, this action might have meant disaster for our agricultural producers. In this case, it has not. The reason lies behind the President’s commitment to ensure that our agricultural producers alone do not bear the cost,” he said. During the last month, the government has offered to assume the contractual obligations for ap proximately four million tons of wheat, 10 million tons of corn and about one million tons of soybeans. In the case of com and soybeans, the Commodity Credit Corporation will either take delivery or, if the farm price is above the pre suspension level, arrange sales of the contract to another party; none of the wheat will go back onto the market instead it will be used for foreign food aid purposes. The government also amended the farmer-owned reserve to encourage far mers to place additional quantities of grain in reserve. Loan prices for wheat and corn were increased and the bands between reserve release and call prices ex panded. Reserve storage rates were increased and interest on the fust 13 million tons of com entering were waived for one year. Producers already with com in reserve also were given a year’s interest waiver as on January 7, but interest accrued before that time is still owed. In addition, the govern ment offered and received bids to make direct pur- Enjoy with pride the value and the real convenience of THE MILLER BUILDING, delivered complete and ready for use ... 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HAMBURG SHARTLESVILLF FARM SERVICE 215-488-1025 LEBANON DAIRY EQUIPMENT WILLIAMSBURG 7“SI2aT ENT McALISTERVILLF SANER FARM SYSTEMS 717-463-2606 MILLEI IBURG LANDIS LABOR SAVERS 717-692-4647 OUARRYVILLE UNICORN FARM SERVICE JAMES E LANDIS 717-786-4158 PIPERSVILLE MOYER FARM SERVICE 215-766-8675 “At home, the reaction of our people has been equally encouraging. Our producers and consumers understand the seriousness of the current situation. They understand the reasons behind the President's ac tions. Most are willing to carry part of the load. “Agricultural producers, at first skeptical of the President’s commitment to protect farm prices and farm income, are seeing that our promise will be kept. And, as a result of the Ad ministration's actions, most of the uncertainty surrounding prospects for U.S. agricultural has been reduced,” Hjort said. 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