U.S. Soybean Rust Threat Evaluated

The Asian soybean rust that has plagued South American producers for the past several years and which was discovered in some southern U.S. fields this fall is causing Corn Belt farmers to consider more carefully just how many acres they plant to soybeans this spring. The 2005-06 season will be the first that farmers must confront the fungal disease threat head on, but researchers say Brazil’s experience may be misleading. “The suitability of weather conditions to rust in Brazil’s major soybean production regions is far greater than what is in the U.S. major soybean production region,” according to a report from three Iowa State University (ISU) plant pathologists.

The ISU report looks at the major risk factors for the disease. These include long dew periods, cool temperatures, and rain (especially the number of rain days), which are favorable to rust development. In Brazil, epidemics seemed highly dependent on rain because major losses were found in areas with high frequency of rain during a growing season.

A second risk factor, the report notes, is that in Brazil, spores are present as early as soybeans emerge in most production regions. In the United States, rust likely overwinters in the Gulf Coast during a mild winter, a much smaller risk compared with Brazil. However, the report warns that it currently is not known how early and how many spores can be carried by winds to the north in a growing season, which presents “a major uncertainty in our risk assessment.”

Perhaps the greatest risk faced by U.S. producers is that unlike Brazil, the soybean production system in the north-central region of the United States currently is not set up to manage foliar diseases. This compares with Brazil, where farmers had regularly used fungicides to control soybean foliar disease even before Asian soybean rust was found there. Though the risk level in the north-central United States is not as high as in Brazil’s major soybean production region, “when outbreaks occur, even with moderate ones, they still could cut yields significantly if not controlled,” the researchers warn. They conclude that Corn Belt farmers should be prepared to control the disease with fungicides “next season and seasons to come.”

Asian Rust And Costs Likely Will Keep Brazil Behind U.S. In Production This Year

Asian rust fungus now has been identified in 128 municipalities across Brazil’s agricultural belt, up from 88 two weeks ago, Brazil’s government pathologists report. Rust appeared early in the current 2004-05 crop cycle, increasing the risk of losses, and reports of its appearance are expected to multiply as Brazil’s crop develops. “A lot of cases were identified during the vegetative development stage of soy,” said Rafael Soares, crop pathologist at Embrapa. As of publication, 71 of the total cases are in the southern state of Parana, Brazil’s second largest soybean producer.

Meanwhile, the combination of low prices and the spread of Asian rust may be acting as a brake on soybean expansion in Brazil, according to a recent New York Times article. “The days of euphoria are ending,” said Ademir Henning, an Embrapa plant pathologist. “The margin for error is now shrinking,” he added. “If producers don’t spend what it takes to improve crop management and combat soy rust, they’re going to lose a good portion of their crops and go broke.”

The costs of combating the disease have increased Brazilian farmers costs by 15%, according to the National Agricultural Confederation, a farm lobby in Brazil. Last spring, farmers received around $20 for a 60 kilogram (132 pound) bag, and made a heady profit. With prices now around $12.50 per bag, most farmers may not even break even.

Estimates are for a 6% increase in acreage this year – far below the 15% increases per year seen over the past decade. Some analysts believe that this could make it unlikely that Brazil will overtake the United States in production this year.

Senate Ag Committee Approves Johanns Nomination For Secretary Of Agriculture

The Senate Agriculture Committee last week unanimously approved the nomination of Nebraska Governor Mike Johanns as USDA Secretary. The full Senate will take up the matter sometime after January 20, the next congressional business day. Johanns will resign as governor upon confirmation, and would then replace current USDA Secretary Ann Veneman and become the nation’s 28th secretary of Agriculture. Veneman announced her resignation on November 15.

Johanns used the words “aggressive” and “aggressively” in describing how he would respond to several major issues confronting U.S. agriculture. For example, on agricultural trade issues he promised a very activist approach. “I’m going to do everything I can to push as aggressively as I can to make sure that markets are open to our food. Trade is a very, very significant priority for me.” Johanns said he will be “personally involved” in the Doha Round of multilateral trade talks. “I see such a critical role for agriculture here,” Johanns said. “I want to be there. I want to be at the table. I want to be advocating for agriculture, making sure that our voice is hear…My goal at the Doha negotiations is to make sure that agriculture is front and center.”

High Water Sparks Barge Safety Advisory

A massive winter storm has river levels rising across the U.S. interior, sparking safety advisories from federal officials, slowing barge traffic and tightening exportable grain supplies. Dow Jones Newswires reports that river levels have jumped seven feet in the past three days on the Ohio River at Cairo, Ill., and have surged as much as 11 feet on some sections of the Mid-Mississippi River as of the morning of January 7, leaving that waterway one to three feet above flood stage at docks in Illinois and Missouri. The news service says the U.S. Coast Guard Marine Safety Office on January 6 issued a safety advisory for more than 40 miles of the Mississippi River –– approximately centered on the port of St. Louis –– as a result of the flooding.

Soy Complex Higher On Strong Demand

The soy complex closed higher on January 6 as farmer marketings have not picked in the new year and demand continues to be strong. January bean futures closed up $2.85 finishing at $199.06; March was $2.02 higher, closing at $195.66 and May gained $1.93 ending at $197.04. January meal was up $1.76, closing at $172.95; March was $1.87 higher, finishing at $173.72 and May increased $1.87 to finish at $175.82. January oil closed $3.09 higher to finish at $442.68; March increased $2.20, closing at $444.67; and May gained $1.76, ending at $446.87.