CEO Report To The Board & States
July 2007

One of the biggest challenges faced by the U.S. soybean industry today is not competition from Brazil or Argentina, but the competition for planted acres right here at home. During the past five years, U.S. soybean planted acres have averaged 74 million acres annually. But this year, the latest projections show soybean acres at 64 million acres, a decrease of 10 million acres. High corn prices, driven by the demand for ethanol, are the driver behind this shift. And while the farm program income safety net doesn’t come into play with today’s and tomorrow’s forecasted prices, periods of high prices are precisely the right time to try to improve the income safety net for soybean farmers for the longer-term in case prices eventually fall. As Congress writes the 2007 Farm Bill, ASA is urging Congress to raise the soybean Target Price to $6.85 per bushel to eliminate the inequity between soybean and other crop safety net levels. Additionally, ASA is pursuing other policy initiatives to increase soybean farmer profits. Below are a few of the most significant developments since ASA’s March Board of Directors meeting –Stephen Censky, July 2007

New Senate Bill to Extend Biodiesel Tax Incentive On March 14, ASA praised Senate legislation that would achieve one of ASA’s top priorities—extension of the federal excise tax credit and income tax credit for biodiesel. If adopted, the legislation would continue to propel the young biodiesel industry that has increased demand for U.S. soybeans. ASA successfully championed the original biodiesel incentive that became law in 2004. In 2005, ASA also achieved its goal when the landmark Energy Bill extended the biodiesel tax incentive through 2008. The new bill is key to soybean growers and the biodiesel industry because it would extend the biodiesel tax incentive to 2017. Earlier this year on the first day of the 110th Congress, the House introduced legislation that would make permanent the biodiesel tax incentive and small agri-biodiesel producer credits. ASA is urging Congress to extend the tax incentive as long as possible to provide a solid foundation for the continued growth of biodiesel in the fuel supply and to reduce our dependence on imported oil. To maximize biodiesel’s potential, the young industry needs the long-term confidence the tax incentive provides.

House Bioenergy Proposal In May, ASA applauded the House Agriculture Committee for proposing to reauthorize and double funding for the CCC Bioenergy Program in the 2007 Farm Bill. The Bioenergy Program reauthorization was included in a draft Energy Title released for this year’s omnibus Farm Bill legislation. It would provide a total of $1.5 billion in funds (an average of $300 million per year) from the Commodity Credit Corporation (CCC) to encourage increased production of biodiesel and other energy products derived from biomass by U.S.-based companies. This amount is twice the annual funding level of $150 million provided under the previous Bioenergy Program, and reflects the growth of domestic bioenergy industries, including biodiesel, over the past five years.

House and Senate Approval of WRDA On April 20, ASA hailed House passage of H.R. 1495, the Water Resources Development Act of 2007 (WRDA). The bill passed by an overwhelming margin of 394 to 25. Then on May 16, ASA applauded the Senate’s 91-4 approval of WRDA. ASA is now calling for a rapid conference to reconcile differences between the House and Senate versions of WRDA so soybean growers can finally realize long-awaited infrastructure improvements to the nation’s waterways that transport more than 75 percent of U.S. soybean exports to world markets.

Korean Trade Agreement On April 3, ASA lauded a trade agreement reached with the Republic of Korea for creating landmark opportunities for U.S. soy, meat, and poultry exports. ASA leaders had numerous discussions with U.S. negotiators prior to conclusion of the historic free trade agreement. The agreement offers immediate duty-free access to U.S. soybeans for crushing and to U.S. soybean meal. And for the first time, producers of U.S. food-grade soybeans would have access to the South Korean market outside of the import monopoly created by the Korean State Trading Enterprise. Tariffs on refined soybean oil would be eliminated over 5 years, and tariffs on crude soybean oil would be eliminated over 10 years. U.S. negotiators worked hard to achieve ASA’s objectives. U.S. soybean growers will also benefit because this agreement is expected to generate millions of dollars of new value-added U.S. meat and poultry exports. Of course, none of these benefits will be realized if Congress does not approve the trade agreement, and for that reason ASA will be working to achieve Congressional approval of the agreement.

ASA Supports Legislation to Bolster McGovern-Dole International Program On March 21, ASA praised new legislation to reauthorize the important George McGovern-Robert Dole International Food for Education and Child Nutrition program. In recent years, the international school-feeding program has used U.S. soy to provide children with better nutrition that helped them to learn. The new legislation would continue the program in fiscal years 2008 to 2012, under the oversight of the USDA. The bill calls for increased funding over five years, beginning with $140 million in FY 2008 and reaching $300 million in FY 2012. Adding high-protein soy is a simple and cost effective way to help children. Soybean growers make the McGovern-Dole program even more effective through ASA’s World Initiative for Soy in Human Health (WISHH) program that assists international groups with education and training on the use of high-protein soy. For a few cents per serving, high-protein soy can be added to foods that are already popular with children in developing countries.

ASA Invites Growers to Precision Ag Education Meetings ASA, in partnership with John Deere Ag Management Solutions (AMS), has invited growers to take advantage of a unique event to learn about the value of precision ag systems. This is the summer education series of our "Reach for the Stars" precision ag program. It is a great opportunity for anyone who has considered integrating precision ag into their operation. The meeting dates and locations are: July 17 in Morton, Minnesota; July 18 in Plain City, Ohio; and July 20 in Bettendorf, Iowa. For more information, and to pre-register for one of these meetings, go to www.SoyGrowers.com/PA.

Soyfoods Featured at ASA’s Congressional Lunch Members of Congress, congressional staff, government officials, and farmer leaders enjoyed a luncheon featuring a wide-variety of tasty soyfoods and beverages at ASA’s fifth annual Congressional Soyfoods Lunch on Capitol Hill. Approximately 400 people attended the event, which showcased a mouth-watering selection of foods and beverages made from soybeans. The annual Congressional Soyfoods Lunch on Capitol Hill becomes bigger and better each year. It provides a unique opportunity for the U.S. soybean industry to give Members of Congress, their staff, and other government officials, a taste of the ever-expanding selection of fabulous soyfoods and beverages available today.