ASGA: Roundup Ready Update

As of March 14, the legal challenges by our opponents requesting a Temporary Restraining Order and a Preliminary Injunction in an attempt to prevent 2011 RRSB planting remain unresolved. Given the uniqueness and timeliness of this issue, you should look to your grower cooperative for specific direction in making your business and planting decisions. Compliance Agreements On Monday, March 7, the USDA Animal Plant Health Inspection Service (APHIS) made the procedure for applying for Compliance Agreements available to beet processors in order for their growers to plant RRSB. It is vitally important that you understand and follow all of the requirements set out in the Compliance Agreement. You will be apprised of all of your obligations when you receive training from your processor. Expect to have your fields inspected by third-party inspectors and your observation and activity records audited by third-party auditors at any time once the crop has been planted. Crop Insurance- Price Election The Risk Management Agency at USDA announced an increase of $5.50 per ton for the Price Election for the 2011 beet crop. This moves the Price Election from $41.50 to $47.00 per ton-an approximate increase of $44 million in coverage for our growers this year. Many thanks to ASGA President Russ Mauch, Vice President Kelly Erickson and United Sugars President John Doxie for meeting in January with the Administrator and Deputy Administrator of RMA and RMA staff in Kansas City (via phone) to argue for a significant increase in the price election. 2012 Farm Bill The Senate is expected to outline a timetable and action plan by the first of April for proceeding on the development of the 2012 Farm Bill. Once a hearing schedule is in place, you can rest assured that our industry will strongly defend the current sugar policy. Initial baselines show that the current U.S. sugar policy will operate at no cost for the next 10 years. That is good news going into the Farm Bill; however, everyone needs to be mindful that opponents of our policy will also be very active in an effort to dismantle it. Those opponents include the Sweetener Users Group, which has conflicting objectives. Members admittedly want and need a strong domestic beet and cane industry, but do not want a sugar policy that sustains the industry. They support a policy that would cause the market to be habitually oversupplied and threaten the viability of U.S. producers. This is both short-sighted and ill-advised. Your grower leaders will be making their annual visits to legislators on Capitol Hill this summer to impress upon members and staff the importance of a strong domestic sugar policy to provide food security and thousands of good rural jobs. More Imports? The Administration may take actions after April 1 to increase the amount of sugar imported to the U.S. market above the minimum obligations under our array of various free trade agreements. On March 10, the USDA projected ending stocks at 10.4 percent, which historically is conservative. The beet and cane sugar industries have already requested that 110,000 tons of import shortfalls under the existing import quota system be reassigned to those countries that can ship sugar. U.S. cane production for the 2010 crop is expected to be down by 250,000 tons from the previous years, while consumption continues to grow. Before increasing imports further, however, the USDA needs to be sure that no beet or cane companies have blocked stocks in their inventory. It makes no sense to increase imports if any of our beet or cane sugar is restricted from the market. Since Mexico has unrestricted access to our market, we need to make certain that Mexico does not import from a third country in order to displace their sugar and send Mexican sugar into our market. The conversion from sugar to HFCS in the Mexican soft drink industry also frees up some supplies to enter the U.S. The next government estimate of the market conditions (WASDE) will be published on April 8, which would give policy administrators a little more time to analyze the current market and make a thoughtful decision. Website Updates You can see the monthly USDA WASDE reports and keep up to date on sugar issues by visiting the ASGA website at www.americansugarbeet.org.