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AMI, 100+ Other Groups, Urge Immediate Penalty-Free Release of CRP Acres

Wednesday, June 25, 2008

(American Meat Institute)

The American Meat Institute and more than 100 other members of the Alliance for Agricultural Growth and Competitiveness is calling on USDA Secretary Ed Schafer to immediately allow a penalty-free, early release of non-environmentally sensitive cropland from the Conservation Reserve Program (CRP), citing U.S. Department of Agriculture reports this month which are further confirming that this year’s basic crops are confronting enormous, unprecedented challenges, and an early-out CRP option is becoming more and more an urgent necessity.

In a letter to Secretary Schafer, the coalition acknowledges the Department’s recent decision to allow haying and grazing on a portion of land enrolled in the CRP is a positive step, but says this option will not adequately alleviate the direct pressure on the livestock industry or the increased feed cost pressures on other segments of agriculture and food industries. 

The need for additional acres is reaching a peak as production levels shift and stocks remain low, the letter states.  The following points are noted:

 For wheat, the Department expects global stocks to remain at historic lows, despite a projected increase in U.S. production.  In addition, disease problems in portions of the U.S. wheat crop currently being harvested will reduce yields and quality.

 For corn, domestic production is expected to decline by 34 million metric tons to 298 million metric tons in 2008/09, even though biofuel demand for corn will increase over the same timeframe.  This dynamic helps explain the Department’s estimate that ending U.S. stocks for corn will fall approximately 50 percent. 

While production for soybeans will increase in 2008/09, USDA reports expect that a 14 million metric ton increase in production will only raise stock levels 1.3 million metric tons.

 Corn/wheat for feed usage are forecast to decrease by more than 12 percent for 2008/09.  For animal agriculture to cut production by 12 percent will require severe economic hardship on these producers while further pressuring consumer food prices to move even higher.

Based on USDA estimates, corn, wheat, and soybean supplies will remain incredibly tight leaving no room for a poor harvest.  Yet, we know production levels will be less than expected given the flooding in the Midwest.  In Iowa, for example, some reports estimate that as much as 20 percent of the corn crop will be damaged.

“The undersigned organizations and companies believe that, given the current and foreseeable crop supply conditions, increased flexibility for CRP contracts will allow U.S. agriculture to better meet the unprecedented growth and demand for agricultural commodities,” the letter concludes.

The American Meat Institute joined two similar letters in the past two years requesting authority from USDA to allow farmers to respond to market signals and ease the adverse feed grains situation that many livestock and poultry producers are enduring.  AMI has also been supportive of waiving the corn-ethanol mandate as a means of easing unnecessary demand for feed grains.   

To view this letter in its entirety, click here

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