CEO Report December 2007

CEO Report To The Board & States
December 2007

U.S. soybean farmers planted 11.8 million fewer acres of soybeans in 2007 than they planted in 2006. This 15.6 percent reduction was primarily caused by demand for ethanol. Economists are debating how many of these acres soybeans will gain back in 2008 given $10 to $11 per bushel price levels, whether today’s prices will be short-lived, or if they signal a new and sustainable global benchmark for agricultural products. Either way, the work of the American Soybean Association to pursue policies that create and sustain demand, advance new technologies, and open markets will be critical to the continued success of U.S. soybean producers. Below are a few of the most significant developments since ASA’s July Board of Directors meeting –Stephen Censky, December 2007

ASA Pushes for Farm Bill Completion On July 27, ASA applauded passage of the Farm, Nutrition, and Bioenergy Act by the U.S. House of Representatives. This legislation improves on the 2002 Farm Bill by increasing the income safety net for soybean producers by 30 cents per bushel, encourages domestic production of soy-based biodiesel, authorizes a new program to assist in the production of oilseeds with high stability oils, and increases funding for the McGovern-Dole Food for Education Program. On Oct 25, ASA welcomed Senate Agriculture Committee passage of its version of the Farm Bill. Last week, ASA led 18 other farm groups in expressing dismay that the Senate did not complete action on the bill prior to the Thanksgiving recess, and urged the Senate to complete action by the end of the year. ASA’s goal is to get the bill to conference committee, where ASA can work with both Senate and House Conferees to reach an agreement on provisions that will meet with needs of U.S. soybean farmers.

ASA Celebrates Passage of Water Resources Development Act On Nov. 8, ASA celebrated years of work and congratulated Congress for final passage of the Water Resources Development Act (WRDA), which authorizes much-needed improvements to waterways that are vital to the transport of U.S. soybeans. The Senate voted 79-14 and the House of Representatives voted 361-54 to override the President’s veto. More than 75 percent of U.S. soybean exports move to world ports through the Upper Mississippi and Illinois river systems. WRDA legislation will authorize funding for construction of seven new locks and other critical improvements on the Upper Mississippi and Illinois Rivers. ASA and its 25 state soybean affiliates have been working in Washington for many years to improve our nation's waterways. Although these authorized projects must still be funded through the annual federal appropriations process, ASA is very pleased that this major step has been accomplished.

ASA Leads in Foreign Market Development Funding ASA ranked #1 in Foreign Market Development (FMD) program funding when USDA released its 2007 fiscal year export promotion totals. On Nov. 5, USDA released the summary of the $234 million that USDA has provided to help market American agricultural products overseas. ASA received $7,380,344 in Foreign Market Development (FMD) funds. Additionally, ASA ranked 9th in Market Access Program (MAP) allocations with a total of $7,849,268 for the fiscal year that ended Sept. 30. These allocations will provide ASA with the resources to continue to provide a major portion of funding for the export promotion activities being managed by USSEC staff in Saint Louis, and implemented by the American Soybean Association International Marketing staff located around the world.

Biodiesel Provisions in Energy Bills Passed by House On Aug. 7, ASA praised two energy bills containing biodiesel priorities that were passed by the U.S. House of Representatives. ASA has championed extension of the biodiesel tax incentive and other biodiesel provisions that were included in H.R. 2776 and H.R. 3221. H.R. 2776 extends the important biodiesel tax incentive through Dec. 31, 2010. Under current law, the incentive expires after Dec. 31, 2008. H.R. 3221 contains ASA-supported biodiesel policies that were also approved by the House on July 27, in its version of the 2007 Farm Bill (H.R. 2419, the Farm, Nutrition, and Bioenergy Act of 2007). The House Energy Bill authorizes and provides $1.215 billion in funds over five years for a new CCC Bioenergy Program to support domestic production of biodiesel, cellulosic ethanol and biomass-based energy. This is a significant increase over the $150 million in annual funding provided under the previous Bioenergy Program. While welcoming passage of these bills, ASA is not pleased with all provisions and is working to address these provisions as Congress tries to complete an energy bill this year.

ASA Forms Biotech Working Group, Conducts Advocacy Missions To Europe To Push For Approval Of New Biotech Soybean Varieties With a full pipeline of new soybean events making their way toward commercialization over the coming years, ASA formed a Biotech Working Group to provide a forum for ASA, USB, and USSEC representatives to consult with biotechnology companies on their commercialization, domestic and international regulatory approvals status, and stewardship plans. The first meeting of the Biotech Working Group was held on September 20. ASA’s goals are to bring these new soy technologies to farmers just as quickly as possible, while at the same time safeguarding important export markets. Toward these goals, ASA conducted advocacy missions to the European Union (EU) this fall. ASA’s proactive advocacy program complements and augments ongoing IM efforts to educate and motivate key EU livestock, feed industry, EU and Member State officials that the Roundup Ready2 Yield (RR2Y) and Liberty Link (LL) biotech soybean varieties are targeted to be commercialized in 2009, with a full pipeline of soy events following. ASA seeks to gain support among industry stakeholders, Member State, and EU officials for timely approval of the RR2Y and LL events, as well as improvements in the EU’s overall approval system. The first mission to Poland, Bulgaria, Romania, and Latvia took place October 15-19, and the second mission to Spain, Portugal, and Italy took place November 12-21. At least two other missions are being planned for the first and second quarters of 2008.

ASA Leads Ag Groups in Call for Redirecting WTO Talks On Oct. 5, ASA initiated a letter to President Bush from 12 farm organizations urging a correction to the severe imbalance in the current agriculture text in the WTO Doha negotiations. The groups expressed deep concern with the status and direction of the Doha round of WTO agricultural negotiations. The letter reiterated points made by the same groups in June 2006, that the level of ambition in obtaining access to both developed and developing countries must be commensurate with the level of ambition in cutting trade distorting domestic support. Meetings also were held with the Office of the U.S. Trade Representative to discuss these concerns. Due to its standing as a strong supporter of trade liberalization and trade agreements, the ASA was asked by other U.S. agricultural organizations to take the lead in meetings with U.S. trade negotiators during the WTO negotiations in Geneva Oct. 14-18. The group had daily briefings by the Chief U.S. Agricultural Negotiator and his team. U.S. negotiators emphasized that the participation of the commodity groups was very helpful to underscore and affirm the U.S. negotiators’ message that without a big outcome on market access, U.S. ag groups won’t support an agreement, and without such support from agriculture, any trade agreement won’t pass Congress.