National Farmers Organization calls for Cool rule appeal, expresses disappointment on GIPSA

     AMES, IOWA (Dec. 5, 2011) - Canada and Mexico's WTO victory on country of origin labeling should be appealed by the U.S., according to National Farmers Organization.
     "We believe the U.S. trade representative should appeal the WTO ruling, America's consumers deserve the right to easily determine where their food comes from in a retail environment," said National Farmers Ag Policy Analyst Gene Paul.
     Although WTO representatives agreed that country of origin labeling is allowable in principle, they ruled the U.S., through it's labeling requirements, provided less favorable treatment to Canadian and Mexico's livestock and meat products.
     Regarding GIPSA, National Farmers members are pleased with poultry provisions, but extremely disappointed that pork and beef producer concerns were ignored. "We look forward to the publication of interim and final rules Dec. 9 that will help poultry producers, but we're disappointed that fairness and competition was not the rule of the day for beef and pork producers," said Paul.
     A policy rider included in the Ag Appropriations bill ensured that only the portions of GIPSA that were sent to the Office of Management and Budget (OMB) were to be finalized in the federal register, essentially removing beef and pork producer provisions.
     The final rule includes language ensuring poultry producers and growers are allowed to participate in the arbitration process, and mandates a reasonable time for those producers to remedy a breach of contract before their contracts are terminated.
     National Farmers is a price negotiation and risk management organization for the nation's farmers and ranchers.

National Farmers Organization announces support for Dairy Security Act of 2011

    Ames, IOWA (November 10, 2011)- As the Nov. 23 deadline for the Joint Select Committee on the Budget to trim $1.2 trillion from federal spending looms, National Farmers Organization has announced its support for a dairy reform proposal, The Dairy Security Act of 2011.
    "National Farmers supports an extensive overhaul of domestic dairy policy, and we believe that producers must receive a reasonable return for their labor and investment," said National Farmers Ag Policy Analyst, Gene Paul.
    During the past several months, as dairy policy proposals have been introduced and discussed, NFO has believed certain concepts must be a part of the final dairy legislation. They include:

•   A program using price as an incentive to manage growth
•   Replacement of end product pricing by reforming Federal Milk Marketing Orders and using a competitive price as the basis for pricing milk
•   Elimination of make allowances

    National Farmers, a collective bargaining organization, continues to believe that the ability to manage the supply of a commodity available to the market is essential to the bargaining process. "The Dairy Security Act of 2011 contains a market stabilization component, using price as an incentive to manage growth," he said.
    The legislation also directs the Secretary of Agriculture to conduct hearings to eliminate end product pricing-which uses make allowances, and replace them with a competitive milk pricing system.
    "After careful consideration of various dairy reform proposals and their impact on producers, we believe The Dairy Security Act of 2011 offers the best option," Paul said. "It's vital that dairy producers come to a consensus on dairy reform, and we urge Congress to act appropriately to ensure a healthy dairy production industry."

National Farmers Organization supports NFUs Farmer- Owned Reserves policy approach

     Ames, IOWA (September 21, 2011) Today National Farmers Organizations Executive Board announced its support for a Farmer-Owned Reserves policy proposed by National Farmers Union and the Agricultural Policy Analysis Center at University of Tennessee last week.
     “National Farmers Organization has supported re-enactment of a farmer-owned grain reserve for several years, and this new study by Dr. Daryll Ray confirms the benefits it would offer farmers and consumers, while saving tax dollars,” said National Farmers Ag Policy Analyst Gene Paul.
     Many farm groups believe funds available for the 2012 Farm Bill will be lower than in the past, and are searching for ways to maintain a farm safety net for producers.
NFUs new policy approach combines the following options.
•   Farmer-owned reserves
•   Increased loan rates
•   Set-asides
•   Elimination of direct payments
•   Reduced reliance on other government payment instruments

     “In view of all the budget concerns in Congress, this proposal offers a method to help drive down costs of the next Farm Bill,” Paul said. In the reserve, farmers would be paid at commercial storage rates, and it could not be brought back into the market for less than 160 percent of the loan rate.
     During the study period of 1998-2010, the farmer-owned reserves approach would have moderated grain price volatility, and government payments would have been cut more than one-half.
     National Farmers provides group marketing, price negotiation and risk management to the nations farmers and ranchers.

Farm Bill audits, financial regulatory legislation on ag producers radar

     Ames, IOWA (July 5, 2011)— U.S. House of Representatives Agriculture Chairman Frank Lucas, R-Okla., kicked off a series of farm program audit hearings in late June, as preliminary work begins for the 2012 Farm Bill.
     Program inefficiencies, as well as relevancy in today’s markets, will take center stage in the review process, as the ag subcommittees take on the task of doing more with fewer taxpayer dollars.
     “Chairman Lucas made a point of saying there are no sacred cows, and during tough fiscal times, every program will be on the table for review,” said National Farmers Ag Policy Analyst Gene Paul.
     Rep. K. Michael Conaway, Chairman of the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management, held the first audit hearing for the Federal Crop Insurance Program. “Major cost savings in crop insurance already occurred last year, with Standard Reinsurance Agreement (SRA) expense reimbursement cuts,” noted Paul. “The savings to taxpayers totaled several billion dollars, and we support maintaining the status quo in that program.”
     Crop insurance gives producers an important tool in their arsenals as they grow feed and food. Farmers use crop insurance in their operating plans, and many lenders now require it as a part of their ag customers’ business plans when applying for operating credit lines.
     National Farmers members believe greater regulation of markets is also warranted. The current hot-button Dodd-Frank legislation, scheduled to go into effect July 16, centers on regulatory reform of financial services and Wall Street. This issue matters to farmers, and to National Farmers because a portion of Dodd-Frank will improve transparency and reduce systemic default risk in over-the-counter derivatives, a major component of hedging activities for farmers. “With ag market volatility the norm in recent years, it is becoming increasingly important that the system is open, transparent, and not overloaded with speculators,” Paul said. The Securities and Exchange Commission (SEC) has temporarily suspended the rule for derivatives contracts, until it can take into account public comments and formally write the provisions.
     Another regulatory issue is the effort to reinstate the Glass-Steagall Act, an amendment in place for nearly 80 years. It was struck down in 1999, during deregulation of the banking industry. A current resolution to restore Glass-Steagall provides strict separation of commercial and investment banking, which could help provide a more secure financial system.
     National Farmers provides group marketing, price negotiation and risk management to the nation’s farmers and ranchers.

Commodity market volatility impacts all of us

     Ames, IOWA (May 16, 2011)- Whether it's gasoline, milk, or corn, all Americans feel the broad impacts of today's volatile commodity markets. And whether you are a consumer, business person or farmer, lately members of all three groups may have reasons to complain.
     "A trip to the gas station brings home to everybody why we need more regulation. It's projected that gasoline prices are at least a dollar higher thanks to market speculation," said National Farmers Organization Ag Policy Analyst Gene Paul. "Position limit reform by the CFTC (Commodity Futures Trading Commission) is critical to minimizing speculator impact on consumer wallets at the pump."
     Bart Chilton, a commissioner on the CFTC, writes in an opinion piece that appeared in the Mankato (Minn.) Free Press newspaper May 1, that speculator money is entering the commodity markets at a blistering pace. "In fact, speculative positions in energy contracts have increased 64 percent since we last saw such high prices in 2008," Chilton wrote. The global investment banking and securities firm, Goldman Sachs reports a link between rising oil prices and speculation. In crude oil markets, there could be as much as a $27 a barrel speculative premium added to current price levels.
     House Agriculture Committee ranking member Collin Peterson, D-Minn., made reference to the Goldman Sachs report in comments about the consequences of delaying the Dodd-Frank legislation, which would limit positions speculators could take in commodity markets. Despite his comments, the U.S. House voted to delay implementing CFTC position limit rules.
     Meanwhile, dairy producers saw the value of their product drop recently when a third straight week of inventory revisions by the Chicago Mercantile Exchange climaxed with the discovery of 27 million pounds of unreported butter stocks. Of course prices fell precipitously.
     National Farmers Organization has long questioned the accuracy and design of the pricing system, because it does not use mandatory reporting measures. Traders believe warehouses may not necessarily call in to report their stocks on hand, which makes it extremely difficult to get a true handle on supplies.
     And, despite unseasonably cold and wet weather in grain country, USDA still predicted a record corn crop, driving market prices lower. As of May 8, only 40 percent of the 2011 corn crop had been planted, dramatically down from the five-year average of 59 percent.
     "National Farmers believes there should be stricter guidelines on forecasting crop projections," said Paul. "Because of the enormous financial impact on farmers, it's important that enough hard data be in USDA's hands before they issue a report that impacts markets."
     And what are solutions to all of the above? National Farmers proposes a three-part approach.

1. Adopt commodity market reform similar to Dodd-Frank legislation
2. Reform federal milk marketing orders to eliminate end-product pricing, and replace it with a truly competitive pay price as the pricing basis
3. Move toward greater accuracy in acreage and crop progress reports for corn, soybean and wheat markets

National Farmers is a group marketing, price negotiating and risk management organization for the nation's farmers and ranchers.

National Farmers’ Farm Kids for College scholarship judges select winners from Iowa, Wisconsin, Kentucky

     AMES, IOWA (April 25, 2011)—National Farmers’ Farm Kids for College national youth scholarship has named its top three award recipients for 2011. Three high school students earned $1,000 each — Zach Tietz, Frederic, Wis., Kelsi Pringnitz, Garner, Iowa, and Lydia Richardson, Brandenburg, Ky.
     “The Farm Kids for College judging panel at the National Farmers headquarters in Ames, Iowa, reviewed student applications, looking at activities and honors, essays, references, future plans and involvement in independent agriculture, and these three students earned the highest scores,” says Helene Bergren, national scholarship coordinator. “These students are serious about making contributions to agriculture, understand the importance of family and independent farming in our country and offer great potential for the future.”
     Tietz, who attends Frederic High School, Frederic, Wis., plans to major in agricultural engineering technology at University of Wisconsin-River Falls. He plans to work in an industrial manufacturing setting, and eventually plans to operate his family’s dairy. For the last two years, he has operated his own custom round baling business, and has participated in Future Farmers of America, holding the offices of president, vice president and parliamentarian. He has earned the Greenhand Award, and has served on the Dairy Judging Team, winning the regional contest three years. He belongs to Indian Creek 4-H Club, serving now as president, and as vice president and treasurer previous years. He has also played football throughout high school. He is the son of Joe and Donna Tietz of Frederic, Wis.
     Pringnitz attends Garner-Hayfield High School, Garner, Iowa. She plans to attend South Dakota State University, Brookings, S.D., majoring in agricultural business, economics and/or agricultural promotions. She has been an FFA member from 2008 to 2011, participating on the Conduct of Meetings Team, winning first place at sub-district and third at the district competition. She earned the Swine Proficiency Award, received the Iowa Farmer Degree and served as chapter treasurer. In her 4-H club, she has served as treasurer, and has been a National Honor Society member since 2009, and in track since 2008. She is the daughter of Jesse and Angela Pringnitz of Garner, Iowa.
     Lydia Richardson, Brandenburg, Ky., attends La Rue County High School, Hodgenville, Ky. She plans to attend Western Kentucky University in Bowling Green, majoring in horticulture. She has been involved in FFA throughout high school, serving as vice president, and in 4-H, earning the Bronze, Silver and Gold Awards. She also served as a National 4-H Congress Delegate. She has been involved in Future Business Leaders of America, Y-Club, served on student council and participated in varsity soccer. She also participated in an FFA-Kentucky Soybean Association YouTube contest, producing a video about how Kentucky farmers take good care of their livestock.
     The Farm Kids for College national scholarship competition is open to high school seniors committed to pursuing college degrees in agricultural fields. National Farmers provides professional marketing and risk management services for grain, livestock and dairy commodities, as well as farm financial services for producers nationwide.
     “At National Farmers, we are happy to help students who have such great potential to succeed in college and agricultural careers,” Bergren added.

As corn prices hover near record highs, National Farmers Organization voices support for creating grain reserve

     Ames, IOWA (April 7, 2011)- Amid dwindling corn stockpiles and surging corn prices, a national farm group is urging re-enactment of a farmer-owned grain reserve. National Farmers Organization asserts that with less than a four-day supply of corn projected to be on hand by Sept. according to Farm Futures analysts. NFO believes establishment of a grain reserve should be a top food security priority.
     "When you consider that the U.S. had the third largest corn harvest on record last year, but is still experiencing soaring world demand pressure and inventories projected at 15-year lows by August, the time has certainly come for a farmer-owned grain reserve," said National Farmers Ag Policy Analyst Gene Paul.
     Paul said the federal government could facilitate farmers isolating a corn supply of last resort, with provisions of grain release at price levels of 120 percent of production costs.
     National Farmers reaffirmed its position on four other farming issues concerning producers this spring. The organization applauded President Barack Obama's announcement last week to cut America's oil imports by one third in the next 10 years.
     "Renewable fuel production that includes cellulosic biofuels will help the nation secure its energy future, while protecting the environment," Paul said.
     Organization leaders also called for swift publication of the final GIPSA rule by USDA. Rapid consolidation and vertical integration of livestock markets in the last two decades has caused economic harm to both producers and rural America. The organization said fairness and competition in the nation's livestock and poultry markets are critical.
     Federal budget pressures notwithstanding, the organization advocated continued funding levels for crop insurance. "Agriculture and the farm safety net were already cut by $4 billion in 2010, as a result of the Standard Reinsurance Agreement for federal crop insurance programs," Paul emphasized. "Therefore, we believe this important risk management tool should remain in place at current funding levels."
     And, National Farmers supports continued funding for Livestock Gross Margin Insurance for dairy producers. A federal risk management program for dairy farmers, it provides producer protection against the loss of gross margin (market value versus feed costs).

     National Farmers is a group marketing, price negotiating and risk management organization for the nation's farmers and ranchers.

National Farmers Organization supports bargaining rights

     Ames, IOWA (Feb. 21, 2011)- For more than 75 years, collective bargaining agreements in Wisconsin and other states have helped improve the lives of workers across public and private sectors, including agriculture. Responding to the Wisconsin state budget battle, National Farmers Organization members are reiterating their support for collective bargaining outside of agriculture.
     "We support the right of everyone to bargain collectively," said National Farmers President Paul Olson, a dairy producer from Taylor, Wis. It is unfortunate that this basic negotiating tenet used in professional sports, aviation, agriculture and manufacturing, as well as many other segments of the American economy is under severe pressure in Wisconsin and several other states.
     The organization's president pointed out that the issue isn't really about budgetary considerations, but more about limiting collective bargaining. Wisconsin's public employees have already offered to help the state's budget by agreeing to the financial and benefit concessions called for in the Wisconsin budget bill.
     "National Farmers Organization is committed to the collective bargaining concept authorized by the Capper-Volstead Act that provides farmers the right to bargain as a group," said Olson. "And, we uphold the men and women who provide basic services that protects and supports communities in rural areas and cities alike."
     National Farmers Organization was created in 1955 to help farmers and ranchers improve contract terms and earn higher prices for their commodities in the agricultural marketplace.

Dairy co-op's GM examines merger issues, USDA-DOJ 2010 listening sessions at National Farmers Convention 2011

     AMES, Iowa (RuralWire) January 27, 2011-An array of antitrust topics peppered remarks by David Cooper, general manager, Family Dairies USA, during a Jan. 19 panel discussion addressing the 2010 USDA - Department of Justice listening sessions about agriculture industry consolidation, at National Farmers Profit More 2011 national convention in Kansas City, Mo.
     Price discovery, competition in cheese markets, merger rules and foreign ownership in dairy production - all part of the consolidation concerns that led to the meetings - topped discussions at the Madison, Wis., dairy industry session in June.
     As leader of the Wisconsin dairy co-op, Cooper shared his insights and impressions. He was one of five panelists, individuals knowledgeable about agriculture industry and related policy, at National Farmers' convention discussing the groundbreaking listening sessions.
     Cooper told producers that U.S. Attorney General Eric H. Holder said vigorous and appropriate enforcement is an important component to ensure market fairness.
     Related to Holder's comment, Cooper presented National Farmers members, and independent producers in general, with a few questions and a challenge.
     Cooper asked producers how they felt about such comments made by an official of Holder's stature. "Do you feel they're just words, or do you feel like some action is going to happen? Do you hold those individuals accountable for the workshops they provided, and those commitments they made...
     "Are we going to do our part to make sure communication and dialog continue? As a producer group and as people engaged in agriculture, we have to continue to press forward and hold folks accountable for those opportunities," he said.
     Cooper was encouraged by information at the sessions that the Department of Justice representatives didn't express antitrust concerns regarding cooperatives, and the DOJ was not pursuing co-ops. Cooperatives share common ground with National Farmers in their reliance on the Capper-Volstead Act to allow for their business models.
     At the Madison, Wis., listening session many attendees ask why mergers happen at all. Cooper highlighted three main reasons:

1. The business is looking to gain efficiency in procurement or processing.
2. The company is operating on tight marketing margins and they have capital constraints. So, they look for other companies to merge with that aren't affected as much.
3. The entity is looking for market entry. Merging with or buying a company that has a presence where company officials want to participate, opens up that market to sales.

     When it comes to antitrust laws, Cooper said, "It may not be difficult to find the issue or the problem, but it may be very difficult to prosecute." He also cautioned that such cases are mired in court systems for long periods of time, giving an example of a case in Wisconsin.
     He also reminded panel discussion participants and those in the audience at National Farmers' convention, that for a merger to be approved, the companies must show that it creates efficiencies or cost savings, and that those are passed on either to consumers or to farmers.
     But he expressed caution about this, too. "It's difficult to define what gets passed on. Oftentimes, mergers require companies to spin off other investments," he said. "How do you really measure those investments in terms of what you bring back to the pie?"
     Cooper reiterated concerns outlined in the listening sessions. Senator Herb Kohl, D-Wis., at the Madison, Wis., meeting, pointed out that CFTC numbers indicate Chicago Mercantile Exchange from 1997-2006 trading of barrel cheese represented just one percent of cheese produced, and two buyers there represent 74 percent of the sales at the CME.
     "That's a problem," Cooper said. "I think they've identified that. They made that very clear at the Madison hearing. I don't know if there's an easy solution."
     Cooper noted several mechanisms remain in play for price discovery, one being the NASS survey, and one the CME spot price. But a University of Wisconsin study found there is a 98 percent correlation between prices paid, and prices that sellers charge. Basically, those two numbers are tied together, he explained.
     "Do we have two buyers or do we have a multitude that are dictating the price?" He noted activity earlier this month on the exchange "bears a lot of witness to what is happening in the marketplace. A lot of it doesn't make sense at this point. Hang on for the ride. At least, right now, the ride is trending upward. Which is positive, but at the same time, doesn't solve the problem."
     Cooper also noted large gaps in the dollar amount of sales between the country's largest retailers and dairy cooperatives. In 1994, the four largest retailers accounted for 17.5 percent of U.S. grocery sales. In 2009, that had about doubled to 37 percent.
     Land O'Lakes, the largest U.S.-based dairy cooperative is worth $10.4 billion in sales, of that, $3.2 billion of their business is in farm supplies. "That doesn't match up to Walmart's $408 billion, Kroger's $77 billion or Kraft's $40 billion," Cooper added. This puts cooperatives at a disadvantage.
     Foreign interest in agriculture also becomes an issue as large companies participate in production level agriculture. Wisconsin has over 12,000 farms that produced 25 billion lbs. of milk in 2010.
     "What would happen to our communities if that $25 billion was produced by 250 entities rather than 12,000?" Cooper asked. ". . .The issue of foreign interest would be entering the picture in that case."
     Interest outside the U.S. and what affect that has on our markets is a concern, he said.

Key Ag policy positions approved at National Farmers Convention ’11

     Kansas City, MISSOURI (Jan. 20, 2011)—At National Farmers Convention 2011 in Kansas City, Mo., Tuesday, members approved several ag policy planks for the coming year.
     In dairy, members supported the concept of a growth management program, using price as an incentive to manage production.
     Members voiced support for reform of the Federal Orders system by ending make allowances, and the elimination of end product pricing system, and favored establishing a broadly based competitive pricing system as the base price for milk.
     In the area of commodity speculation reform, National Farmers supports legislation that will add transparency to futures markets and close the door to excessive speculation by tightening key investment laws and clarifying the oversight mission of the Commodities Futures Trading Commission (CFTC).
     In livestock, members commended USDA and the DOJ for conducting anti-trust listening sessions in 2010. And, the organization recommended implementation of the published GISPA rules.
     Food security issues were also discussed, and members voted to again call for establishing a World Food Reserve.
     National Farmers is a group marketing, price negotiating and risk management organization for the nation’s farmers and ranchers.

USDA-DOJ ag concentration panel reviews 2010 Listening Sessions at National Farmers Convention ’11

     Kansas City, MISSOURI (Jan. 20, 2011)—At National Farmers Convention 2011 in Kansas City, Mo., Wednesday, a slate of nationally-known agricultural experts examined last year’s five USDA-DOJ joint public workshops to explore competition issues affecting the agricultural sector and the appropriate role for antitrust and regulatory enforcement.
     Dr. Mary Hendrickson, co-director of the Food Circles Networking Project at University of Missouri, noted that the listening sessions were a historic undertaking. “The information that USDA learned is extremely valuable, and the question now is, ‘What will that data accomplish,’” said Hendrickson.
     Several panel members stressed that examination of buyer power was extremely important to crafting real solutions to competition issues. “I think that the issue of monopsony power must be included in the deliberation process as USDA and DOJ determine where to go with the information they discovered,” she said. A common theoretical implication of monopsony is that the price of the good is pushed down near the cost of production.
     When asked about how domestic regulations can impact global food conglomerates, Hendrickson said a global competition policy must be developed. “It’s absolutely crucial that it does emerge.”
     Mark Lauritsen, international vice president for the United Food and Commercial Workers Union said if Justice officials don’t address the retail end of the equation, that big issue will still negatively impact farmers, ranchers and workers.
     From the ranch gate to the grocery store, there is just one group that has taken a larger share of the retail dollar through the years, and they are the end sellers to consumers. Lauritsen underscored that monopsony power must be addressed. “If the Department of Justice broke up big meat packing companies into a large number of small packers, I’m not sure those small packers could withstand the demands of low prices that are dictated by large retailers,” he said.
     For this to happen, panelists said the Federal Trade Commission as the retail regulator, would have to become involved, in addition to USDA and DOJ.
     David Senter, chairman of the board of Kimmitt, Senter, Coates, and Weinfurter (KSCW) was doubtful at first when the listening sessions were announced, fearing it would be a dog and pony show. But he hopes that in fact a few positive steps will be taken to address the concentration problem, he said. “It was extremely smart the way USDA and DOJ officials structured the listening sessions.”
     Richard Oswald, Missouri Farmers Union president and a national board member of the Organization for Competitive Markets noted retail margins are, and packer margins are increasing, while producer margins decrease. Markets we used to rely on, such as Kansas City, St. Joseph, Mo., and Omaha, Neb., just aren’t there anymore. And today, the market offers very little discovery in the cash market.
     David Cooper, General Manager of Family Dairies USA, reiterated results from the Madison, Wis., listening session, where producers and panelists talked a lot about the Capper- Volstead Act, and the Department of Justice did not have a big concern about cooperatives and what they do.
     National Farmers is a group marketing, price negotiating and risk management organization for the nation’s farmers and ranchers.