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National Ag Day is Saturday
This week is National Ag Week and Saturday, March 20, is National Ag Day. Each year, on or around the first day of Spring, National Ag Day gives producers, agricultural associations, corporations, universities, government agencies and others across America the opportunity to recognize and celebrate the abundance provided by agriculture. For more information, contact the Agriculture Council of America or visit www.agday.org.

MU FAPRI economists see impact of high crop prices on feed costs; possibly lowering feeder calf demand
Crop prices reaching seldom-seen highs of $9 per bushel for soybeans and $3 for corn opened the discussion at an agricultural outlook meeting for farmers.

But, a University of Missouri livestock analyst reminded producers that good grain prices could affect cattle prices.

"Higher feed costs will affect what feedlots are willing to pay for calves," said Scott Brown of the MU Food and Agricultural Policy Research Institute (FAPRI).

The meeting was one of 15 being held across the state by FAPRI economists who are bringing the results of their 10-year baseline projection to the farm level. They had presented their annual analysis to the U.S. Congress the first week of March.

"Feeder cattle (400- to 500-pound calves) are still selling strong," Brown said. "But prices of heavier calves have not maintained their strength."

Feedlot operators are considering their near-term risks. "They have some very high feed costs to deal with," Brown said. Corn and soybean meal make up a large part of cattle-finishing rations.
Longer term, Brown said cattle prices should remain strong at least through 2006, as the supply of beef remains tight.

High feed costs, and high prices received for fed cattle, caused feeders to move their cattle to market quicker. That resulted in lighter weight carcasses and less beef for the retail trade.
Brown reminded farmers that steaks now average about $6.50 a pound in the supermarket, compared with what was considered a good price of $4.50 just a couple of years ago. "Packers can afford to pay more for cattle."

"We are continuing the longest down-trend in cattle numbers we've ever seen," Brown said. "We're in the 14th year and can expect to see 15 years in this cycle." Normally the U.S. cattle herd completes a full swing, from high to low and back, in about 10 years.

Brown said the outlook for hogs is not as bright: "I wouldn't want to be raising hogs right now." Hog producers face prices that won't offset higher feed costs. The FAPRI charts show more red ink than black for hog farms.

Brent Carpenter of the FAPRI representative-farms group, agreed. "Of all of the enterprises, hog farms are at the highest risk."

The feed-grain farms, as a group, show the highest potential for good cash flow and ability to repay debt, he added.

Representative farms monitored by FAPRI economists indicate the impact of the changing price outlook and changing government policies. "We study the impact of such things as crop insurance," Carpenter said. The group monitors some 42 farms across the state.

Carpenter noted that in recent visits with farmer panels to update changes, no representative farm had increased acreage. This was a first, although he does not know the reason for the slow down in expansion.
Farmers present at the meeting offered a ready answer: Rising land prices.

Carpenter did note that there has been a shift from crop-share rental agreements to cash rent. "Cash rent brings higher risks to the operator," he added.

Brown said that visits to representative farms, and the feedback from the outlook meetings, gives information for the FAPRI economists to carry to legislators in Washington, D.C., and Jefferson City.

Congress underwrites part of the expense of the policy analysis think tank, which has units at the University of Missouri-Columbia and Iowa State University, Ames. Assistance in analysis for specialty crops, such as cotton and rice, comes from other state universities.

USDA Provides States With Emergency Conservation Program Funding
Agriculture Secretary Ann M. Veneman today said on March 16, that USDA is providing about $3.4 million in Emergency Conservation Program (ECP) funding to 10 states and one territory.

"These funds will help farmers and ranchers rehabilitate farmland damaged by tornadoes, drought and other natural disasters," Veneman said. "We are able to provide this funding as a result of unused allocations from other states."

ECP funding to the 10 states and one territory is as follows:
State Disaster Type Funding

State Disaster Type Funding
Colorado Drought $45,000
Guam Typhoon $30,000
Idaho Drought $30,000
Illinois Tornado $75,900
Kansas Tornado $102,000
Kentucky Ice storm $2,200,000
Kentucky Flood $2,400
Minnesota Tornado $133,000
Missouri Tornado $50,000
Missouri Flood $20,000
Missouri Drought $15,000
Oklahoma Tornado $60,000
Oregon Flood $16,500
Oregon Drought $604,000
South Dakota Tornado $16,000
TOTAL $3,399,800

The program provides for technical assistance to help producers remove debris from farmland, restore fences and conservation structures, provide water for livestock in drought situations and grade and shape farmland damaged by a natural disaster.

Producers should check with their local FSA offices regarding ECP sign-up periods, which are set by the county FSA committees. The committees determine producer eligibility based on on-site inspections of damage. For a producer's land to be eligible, the disaster must create new conservation problems that, if untreated, would impair or endanger the land and affect its productive capacity. Conservation problems existing prior to the applicable disaster are ineligible for ECP assistance.

USDA offers additional programs to help farmers and ranchers recover from damages caused by natural disasters. These programs include the Emergency Loan Program, Federal Crop Insurance, Crop Disaster Program and the Noninsured Crop Disaster Assistance Program
More information on ECP and other disaster assistance programs is available at local FSA offices and online at: http://disaster.fsa.usda.gov.

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