The cure for low prices...US loan rate

[fjlip]

The resilience in American sowings reflects support programs which "insulate" US growers from the falls in global prices which are affecting farmers elsewhere. Calculations for government-backed loan programs which, at more than $6 a bushel in major growing areas, attribute twice the value to durum that farmers can get at elevators. "This means that a farmer in North Dakota, when deciding between durum and spring wheat, with a loan rate below $4 a bushel, will continue to plant durum.

[charliep]

Perhaps lessons we will learn is the new durum loan rate (already higher than spring wheat in other years) will provide signals to make the US self sufficient in durum production in the coming crop year. From a publication I get, previous forecast US durum production was 77 million bushels and could likely push this volume to 90 million bushels. US durum domestic consumption is about 90 million bushels. Realize there is a flow of US durum exports to the world and imports from Canada. Impact of the above is less Canadian imports (other factors like grade taken out).

Perhaps we are learning the corporate decision on behalf of all farmers to carry durum year to year is not a smart one. This decision has had far more impact on the market than any policy on the US loan rate side.

[charliep]

I note more US durum acres equal less acres of other spring wheats. If you believe statscan, western Canadian farmers are shifting acres from durum to other wheats.

[charliep]

A good explanation of the US loan rate and implications for durum.

[URL="http://www.smallgrains.org/article.aspx?id=8979"]US durum ldp[/URL]

[hlg]

So our option is to flood the feed market and drop the price there. Sounds alot like shooting both of one`s feet instead of just one. An overall lowering of world stocks needs to happen,but why do Canadian farmers always be the ones with the short straw!!!!

[charliep]

Can't disagree with you. However, when Canada is 50 to 60 % of world durum
trade, we determine our fate. If you netted out European and US
imports/exports, our market share is even higher.

Perhaps this highlights why a WTO agreement is important even for CWB
crops.

[charliep]

Interesting article that relates both durum and US rules around using common seed.

Start quote Farm Net News.

Brown-bagging is Illegal --
The sudden interest in planting durum, to take advantage of the $1.50 higher loan rate, is causing some concern about seed availability. Ken Bertsch, Commissioner of the North Dakota State Seed Department, says there is a limited supply of certified durum seed. "There may be adequate durum seed out there, we simply don't know, but the bigger problem is timing," said Bertsch, "Guys are out seeding right now and all of a sudden, there's this massive interest in durum seed and with that comes plenty of potential problems." Bertsch says it usually takes ten days to get a germination test. The other concern is the issue of legality. The industry is protected by plant variety protection. Of the protected varieties, farmers can only purchase certified seed or replant their own seed that was purchased as certified, and those are really the only two things that can be done with protected varieties. Brown-bagging, or buying seed from a neighbor, carries up to a $5,000 fine for violating PVP laws, plus the owner of the patent can take farmers to court to get triple damages.

End quote.