Ag News: Thursday, November 24

"U.S. Ag Exports to Hit New Record in FY 2006"
USDA on Tuesday issued a new estimate of U.S. ag exports for fiscal year 2006. USDA Chief Economist Keith Collins says the new estimate is a billion dollars more than USDA thought just three months ago. But he says the U.S. ag trade surplus will still likely be smaller this year than last. Collins says USDA's new ag export forecast of 64.5-billion dollars - and the new ag import forecast of 61.5-billion - would both be all-time records. He says the increase in U.S. ag export value is largely because of good export demand and relatively good prices for wheat, rice and pork. And the value of U.S. ag exports could go higher. The new USDA ag export forecast does NOT factor in any potential re-opening of the Japanese or South Korean market to U.S. beef.

"Johanns Says UN FAO Conference a Great Opportunity to Talk About WTO"
U.S. Ag Secretary Mike Johanns on Wednesday wrapped up a three-day trip to the United Nations Food and Agriculture Organization Conference in Rome. Johanns met with his counterparts from more than a hundred countries at the conference - aimed at assessing the current state of global agriculture and food security. But Johanns says his primary reason for going to the UN conference in Rome was to make progress before next month's meeting of all World Trade Organization ministers in Hong Kong. He says the conference represented a unique opportunity to talk to over 100 ag ministers at one time - something that rarely happens. And Johanns says he wasn't shy in telling the assembled ag ministers from around the world about the value of the Doha Round of WTO talks to developing nations. The Iraqi ag minister was among those at the UN conference in Rome. Johanns says he met with him - and promised U.S. assistance in planning Iraq's agricultural future. As it stands now - the U.S. Grains Council is the only contractor USDA is using to develop Iraqi agriculture. For more than two years - the Grains Council has worked to build Iraq's poultry industry - which used to be one of the biggest in the region.

"Portman Says U.S. Hasn't Lowered Expectations for Doha"
U.S. Trade Representative Rob Portman says - even though expectations for the WTO ministerial in Hong Kong are lower - he still believes the Doha Round of WTO talks can conclude successfully by the end of 2006. Portman says the key to progress is still market access for agricultural goods. And he says Europe must still give ground on its proposals for domestic supports and tariffs. But according to Portman - European Union Trade Commissioner Peter Mandelson is also correct in calling for progress on non-agricultural trade issues. And Portman says he's encouraged by the strong support of the Doha Round that appeared to emerge from last week's meeting of Asian nations. But Portman admitted no specifics for advancing the Doha Round are likely to emerge from the Hong Kong meeting. Instead - he said goals of the meeting include educating both participants and the public on remaining issues - taking stock of progress made - and putting building blocks into place for the eventual discussion of specific numbers on tariff reductions. Portman has been pushing hard for progress in the global trade talks - traveling to Europe - Africa - India - China and Korea and then back to Europe - all in the last two weeks. And Portman says he'll be back in Geneva the week after Thanksgiving for more talks. Portman made his remarks at a press conference Wednesday after wrapping up his most recent meetings with World Trade Organization ministers in Geneva.

"IG Gives USDA Finances a Mostly Clean Bill of Health"
USDA's Inspector General on Wednesday issued a 401-page report on the Agency's finances - and gave them a mostly clean bill of health. The report said USDA's financial balance sheets at the end of the last two fiscal years fairly present the financial position of USDA in all material respects. But the IG also found USDA needs to improve its overall financial management across the entire agency - and also needs to improve its information technology security and controls. Among the IG's specific findings - so called-abnormal balances existed at year-end without being fully researched and corrected. As of the end of fiscal year 2005 - the IG found over 90 abnormal account balances at USDA totaling over a billion dollars - that's billion with a b. Also - the IG said the Farm Service Agency incorrectly entered the loan maturity range for one of its loan programs - so FSA's cash flow model for direct loans didn't calculate the weighted average interest rate correctly. The IG said FSA fixed that problem after it was brought to their attention. And how about this - the IG review of a Commodity Credit Corporation's footnote to its cash-flow model found errors in disclosure relating to CCC’s loans. Corrections totaling more than 8-billion dollars were subsequently made to that single footnote on that one CCC document. The IG report says it's intended only for the information of USDA - the White House Office of Management and Budget - and Congress. It also says it is not intended and should not be used by anyone but those parties. So don't tell anyone from the government I told you about it.

"Brazil Temporarily Suspends Request for Sanctions Against U.S."
Brazil has agreed to suspend its demand for over a billion dollars a year in trade sanctions against the U.S. - at least for now. Brazil earned the right to ask for sanctions after it won a World Trade Organization case against the U.S. cotton program in March. Brazil first asked the WTO for permission to apply trade sanctions against the U.S. in July - asking for three-billion a year at that point. They put that request on hold after giving the United States until the end of the year to eliminate two cotton export programs ruled illegal by the WTO. But a Brazilian diplomat says the latest move doesn't mean Brazil is giving up on its quest for WTO sanctions against the U.S. He says - instead - the latest move is aimed at bringing the two sanctions requests together. Brazil says Washington has done little or nothing to come into line with the WTO ruling against the U.S. cotton program. U.S. officials counter by saying USDA itself eliminated one illegal cotton export program - and has asked Congress to eliminate the other one - known as the Step 2 program.