ASMancaster Farming, Saturday, May 4, 1996 (Continued from Page A 1) add to the cost of hauling agricul tural commodities, of which most of the cost is home by producers. According to a news release from Indiana U.S. Sen. Richard Lugar, who pushed hard to dissas semble federal production controls (i.e. promoting overproduction and purchasing and storing surplus in order to maintain low commodi ty prices.) in creating the 1996 Farm Bill, he met Wednesday with President Bill Clinton, U.S. Sec retary of Agriculutre Dan Click man and congressional leaders to figure out a way to help beef producers. In his news release. Sen. Lugar proposed that the low cattle prices can be expected to continue until the first com crop' is harvested, about four months away. “Obviously this is an emergency feed problem that can’t be remed ied immediately simply because you have a growing season that has to take place.” He said a bipartisan effort could help, and he provided his synopsis of what the administration has said it would do, though an official statement from the USDA was not available by presstime. According to Sen. Lugar. U.S. Agriculture Secretary Clickman announced a five-point plan for helping the cattle industry. That plan includes permitting the nation’s livestock producers to graze cattle on land enrolled in the Conservation Reserve Program (CRP) and to cut hay on that land starting July 1 until Sept. 30, except for the most environmental ly sensitive land. That also carries with it the pro vision that fanners who opt to graze and hay their CRP land are to sacrifice S percent of their annual CRP rental payment for each month they graze. The plan also is to include using every tool available to promote the export of American beef, as well as pressing the World Trade Organi zation for a resolution of the com plaint the United States has had against the European Union for its ban on importing United States hi-mao | Agricultural Lime Spreading Cash Discount Savings on Delivery Call Tollfree day and evening 1-800-724-3277 Serving PA, MD, Delitiarva, NJ, NY & (LI) | Diesel Engine Service { [S • New - Rebuilt Used Engines i rfl and Power Units f B] • New John Deere i i m Ind. Powerunits 19-375 HP ? 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However, that situation appa rently has not been fully developed. To help, Clickman is to immedi ately start the USDA beef purchase program for the 1996-97 school year, spending up to $5O million and to consider additional purch ases later, depending on the market situation, according to Lugar. Additionally, the USDA is to survey the credit needs of livestock producers and report back to the president within 30 days to see if loan leniency should be called for. And finally, Clickman is repor tedly to meet with livestock pro ducers and industry representa tives to monitor how effective the steps taken have been and to deter mine what other steps may be necessary. According to H. Louis Moore, Penn Slate University Extension commercial agriculture econom ist, the high feed price situation is not expected to let up soon. He said Thursday that com prices can be expected to remain high for at least two years, as well as can the price for other grains, because of increased domestic and world demand and because of weather-related production cuts. Earlier in the year he talked about the disappearance of record carryover of com in recent years because of exporting and addition al uses for com. With carryover from last year estimated low, and with demand Haylage Seasons Means •.A******® Moveable RESALE VALUE B’6” Height Tongue & Grooved Joints Bolt Together ro i Sollenberger Silos Coro . R R R B ' s ,os & ■ Main ll c bvbtrmb »-T~ /I (‘n/n/uni J o , 1M , Ask Tor lABH JUSTUS „ Bn « f I I h I 111 Ik ‘I ■ Inn I (’A I , ’I ) I I | -| -I. 1 •iMt I Pour,-cl Concrete Silo Since 1008 tvcnnu)-, /1/-/W-BWU estimated strong, Moore said he heard that Clickman has suggested that grain supplies/prices may not recover for 10 years. Wheat prices especially have been surging, because of poor con dition of overwintering crop, expected to fulfill the market demand. “It’s an unsusal situation and apparently the (wheat) crop in the West is coming off a lot worse than anybody anticipated,” Moore said Thursday. “I don’t have full infor mation, but SO percent of the crop in Kansas has been rated poor to very poor. “We’ve been hearing a lot of reports from Texas to Kansas in the whole wheat belt that the wheat is so bad, many people who are turning down wheat to plant sorghum say they haven’t done so in the past 25 to 30 years,” Moore said. The situation is apparently real this year, Moore said, instead of just a scare rumor that investors can usually be depended upon to spread to affect the future’s market. “Normally we get all these scary reports this time of year,” Moore said, "but apparently this year they are pretty accurate. I think they are thinking the wheat crop will be low about 2 billion bushels, of hard and soft Last year it was around 2.2 billion bushels.” According to Moore, the projec tion of wheat harvest is the lowest in the decade, and during a year when exporting is to pick up. “Our drought year of 1988 it was 1.8 billion bushels, but then in 1992 it was 2.46 billion, and in 1993,2.42 billion bushels, and in 1994 2.32 billion bushels. “So if (production) falls below 2 billion bushels it will certainly be different than at any time in the 19905, and of course we have used up our reserves.” ‘ He said that die current estimate is that on June I'the nation might have a carryover of only 300 mil lion bushels on hand when new crop begins to enter the supply market. Bunker Season Moore compared that to June 1 carryover levels in 1995 of 456 million bushels, and 549 million in 1994. Even with the short crop in 1988, there was carryover from 1987 which had 820 million bushels in reserve. “Even with the short crop in 1988, it wasn’t nearly as harmful because of carryover, but if we have a short crop this year and only have 300 million in carryover, I think that we will have a record low (of wheat supply),” Moore said. Moore said that strong domestic use and good exporting along with the tight supplies cause him to believe we are not going to get back to normal prices in any com modities for at least two years. While not good news for the livestock industry, it is good news for grain producers. Moore said he doesn’t expect food prices to increase because most of the growth in use for grains has been in “value-added” pro ducts and not in basics such as bread. He said that even if manu facturers doubled the amount of wheat used in a loaf of bread, it shouldn’t much change the price. He said that even if food prices rise, he expects only a 3- 104-per cent increase. Though some have been predicting increases rtf 7- to 8-percent. Moore said he doesn’t think there is enough data to sup port such a prediction. On top of it, fuel price increases can be expected to complicate mat ters. The combination could pos sibly spark inflation, something definetly not desired in a presiden tial election year. A proposed elimination of a 4-cent federal gas tax tied in with an increase in minimum wage isn’t expected to have much impact on agriculture, according to Moore. Others disagree. More importantly, Moore said, “The short and the long term effect of the Farm Bill should encourage farmers to produce more and tend to hold prices down over time. I assume most farmers will plant Is Here!! more and most will certainly plant more com and soybeans this year and more next year because prices will be favorable. “And if exports experience a 50-pcrccnt growth (as predicted), we’re going to have a problem building reserves.” Production input prices'can be expected to increase. Moore said that if com planting increases by IS percent, fertilizer demand is IS percent greater and seed demand is that much greater. He said most input costs should increase somewhat, because of demand. This late spring may have some additional pressure on prices. Last year we had a late spring, and Moore noted that’s why crops are short in supply this year. His advise to growers was, “You don’t need to be concerned about overplanting this year. Be assured you are not adding to a surplus for the next two years. We aren’t going to go back to normal com prices to quite a while.” Also, Moore said that, while it might be too late, fanners in Pen nsylvania looking for feed may consider planting spring grains such as oats or spring barley. Glen Shirk, Lancaster County extension agent, said dairymen are seeking alternative feeds, but so are beef producers and other lives tock producers, putting pressure on those normally excess commodities. "They’re looking for all kinds of susbsistute commodities and feeds and they’re hard to find, because everybody is looking for them, and demand is pushing the price of the commodities. For a tot of dairy men the spring harvest can’t come too soon,” he said. He said that some options with potenital are grazing graze small grains, hay fields and of course pastures. He said, however, whatever farmers do, don’t jeopar dize the crop yield or the stand to try gain a little edge on feeding livestock. Shirk said that what the situation (Turn to Pag* A 39) Sollenberger Silo #1 in precast concrete! Ask about Bunker add. Discount!
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