Corn futures in Chicago markets fell the most since November, while wheat experienced its biggest plunge since January 2009, as the U.S. government reported grain acreage and inventories that topped estimates by analysts.

“It was very much of a surprise,” said Arlan Suderman, a market analyst with Farm Futures magazine. “Corn was the biggest shocker in acreage and in stocks.”

U.S. farmers planted 92.3 million acres of corn this year, 1.8 percent more than projected by analysts in a Bloomberg News survey, and the second-most since 1944, the U.S. Department of Agriculture said Thursday. Corn stockpiles as of June 1 were 3.67 billion bushels, 12 percent higher than forecast.

In reaction, corn futures for December delivery slid by the daily limit of 30 cents, or 4.6 percent, to settle at $6.205 a bushel on the Chicago Board of Trade, the biggest drop since Nov. 16. The grain has jumped 66 percent in the past year, partly on surging demand from ethanol makers and livestock farms.

“For the end user, today was a windfall,” said Don Roose, president of U.S. Commodities, an Iowa-based grain and livestock investment mangement firm. As commodity prices have risen over the past year, foodmakers like Minnesota’s General Mills Inc. and Hormel Foods Corp. have been increasingly passing down their higher costs to retailers and consumers.

For packaged-food makers, the drop in corn and wheat prices offers a short-term window to lock in relatively lower input costs. However, analysts say the underlying long-term equation of high corn demand and relatively low supply hasn’t changed. So the corn price retreat could be short-lived.

Why the jump in the short-term supply forecast? Farmers reacted to the market, Roose said, deciding to plant more corn because prices for that grain were comfortably high.

In Minnesota, soggy weather hasn’t been kind to corn farmers: They’re well behind schedule this year, a possible detriment to yields. The average height of corn plantings in Minnesota as of last week was only 16 inches, compared with a five-year average of 29 inches at this time of year, according to the USDA.

But the corn crop in major Corn Belt states such as Iowa, Illinois and Nebraska — which haven’t had the same weather issues as Minnesota — looks good so far, Roose said.

Prices for wheat traded in Chicago often follow corn prices, and that’s what happened Thursday. But longer-term factors are also putting downward pressure on wheat prices. Prospective global wheat supplies are improved over last year, when Russia rattled markets by banning wheat exports because of a major drought.

So far this year, wheat crops in Russia and throughout Europe are strong, Roose said. The same goes for many regions of the United States, he said, except the Upper Midwest. Farmers in Minnesota, the Dakotas and Montana — the nation’s largest producers of hard red spring wheat, a key grain for bread — have had a tough time due to wet weather.

The USDA said Thursday that it plans to specifically survey farmers next month in Montana, Minnesota and North and South Dakota on acreage planted for corn, soybeans, durum wheat and spring wheat.

“A large percentage of acres remained to be planted” in those states following the survey in the first half of June, the USDA said. By Mike Hughlett, Star Tribune

Gill Hodgson, of Field House Farm, Everingham, near Pocklington, was shocked to learn that only ten per cent of the flowers sold in the UK were sourced from this country – the majority coming from as far afield as Columbia and Kenya.

Now, in a bid to encourage farmers and landowners to grow flowers for cutting and to generate awareness amongst consumers Gill, with daughter Peggy, has formed a marketing co-operative – Flowers From The Farm – and is looking for members.

Gill said: “Many of the flowers we buy have clocked up thousands of air miles and can be more than a month old by the time they hit the shelves. We are all aware of the major benefits of buying food locally but somehow flowers seem to have slipped under the radar in our quest for local provenance. “The aims of Flowers From The Farm are twofold – to encourage more farmers to become growers and to put potential customers in touch with growers in their area.”

Gill began growing her own flowers three years ago and now has a regular stall at the Driffield Farmers’ Market. She also provides for weddings and special events and to local businesses such as restaurants.

She points out that an incredible array of flowers can be grown on half an acre and set-up costs are not high. Farmers have the land, the skills and the machinery – they may not have grown flowers before, but are used to cultivating crops and these are no different. The co-operative will provide members with advice on which varieties to grow, where to look for new markets and how to get the best results from a small area.”

To become a member of the not-for-profit co-operative costs just £55 per year and Gill has calculated that with 633 members she can cover the whole of Great Britain. Gill said: “I want to see British flowers in every florist and supermarket. We can grow foxgloves, sweet peas, zinnias, dahlias and cosmos. Our flowers look beautiful, smell glorious and I need the help of other British farmers to put them back into every vase in the country.”

The new initiative is being supported by the Yorkshire office of the Country Land and Business Association (CLA) in Easingwold, whose regional director, Dorothy Fairburn, said: “This is a marvellous, low-risk business opportunity for farmers and landowners in the region.”  By Ron Godfrey, York Press

About 20 farmers around Danyang city in Jiangsu province were affected, losing up to 115 acres (45 hectares) of melon, China Central Television said in an investigative report.

Prices over the past year prompted many farmers to jump into the watermelon market. All of those with exploding melons apparently were first-time users of the growth accelerator forchlorfenuron, though it has been widely available for some time, CCTV said.

Chinese regulations don’t forbid the drug, and it is allowed in the U.S. on kiwi fruit and grapes. But the report underscores how farmers in China are abusing both legal and illegal chemicals, with many farms misusing pesticides and fertilizers.

Wang Liangju, a professor with College of Horticulture at Nanjing Agricultural University who has been to Danyang since the problems began to occur, said that forchlorfenuron is safe and effective when used properly.

He told The Associated Press that the drug had been used too late into the season, and that recent heavy rain also raised the risk of the fruit cracking open. But he said the variety of melon also played a role.

“If it had been used on very young fruit, it wouldn’t be a problem,” Wang said. “Another reason is that the melon they were planting is a thin-rind variety and these kind are actually nicknamed the ‘exploding melon’ because they tend to split.”

Farmer Liu Mingsuo ended up with eight acres (three hectares) of ruined fruit and told CCTV that seeing his crop splitting open was like a knife cutting his heart.

“On May 7, I came out and counted 80 (burst watermelons) but by the afternoon it was 100,” Liu said. “Two days later I didn’t bother to count anymore.”

Intact watermelons were being sold at a wholesale market in nearby Shanghai, the report said, but even those ones showed telltale signs of forchlorfenuron use: fibrous, misshapen fruit with mostly white instead of black seeds.

In March last year, Chinese authorities found that “yard-long” beans from the southern city of Sanya had been treated with the banned pesticide isocarbophos. The tainted beans turned up in several provinces, and the central city of Wuhan announced it destroyed 3.5 tons of the vegetable.

The government also has voiced alarm over the widespread overuse of food additives like dyes and sweeteners that retailers hope will make food more attractive and boost sales.

Though Chinese media remain under strict government control, domestic coverage of food safety scandals has become more aggressive in recent months, an apparent sign that the government has realized it needs help policing the troubled food industry.

The CCTV report on watermelons quoted Feng Shuangqing, a professor at the China Agricultural University, as saying the problem showed that China needs to clarify its farm chemical standards and supervision to protect consumer health.

The broadcaster described the watermelons as “land mines” and said they were exploding by the acre (hectare) in the Danyang area.

Many of farmers resorted to chopping up the fruit and feeding it to fish and pigs, the report said. By Alexa Olesen, The News & Observer

You might think this scenario would tempt plenty of farmers to flip their acres from cattle pasture to cropland. But it’s a tough decision that depends on much more than recent prices.

Acres That ‘Flex’

Some farmers use the term “flex acres” to describe land that can be used either to graze cattle or to grow crops like corn and soybeans.

Wearing green coveralls and a tan hat, Morse stands outside his barn watching his 17-year-old son Noah drive a feed wagon down a row of cattle while the animals feast on corn and hay.

This 320-acre farm will see some changes soon. Despite the record-high corn prices, Morse is shifting his land out of corn and soybeans and into pasture.

“With the cattle you’re more on your own,” he says. “In some ways, it’s an act of faith because you have got to look out into the future a couple years and see that this will be a paying proposition as well.”

Morse is used to analyzing figures. He’s also a law professor at nearby Creighton University in Omaha, Neb. Morse admits corn is tempting but says he’ll stick to cows for now.

An Increase In Planting Crops

But that’s an unusual decision, according to agricultural economist Darrell Mark at the University of Nebraska-Lincoln.

He says there’s been a drop in cattle operations in key Corn Belt states including Iowa, Illinois and Nebraska. “We’re seeing an increase in acres being planted to row crops.”

In central Missouri’s Calloway County, farm owner Margot McMillen says one of her tenants offered her three times the rent to convert some of her pasture land into row crops. But she turned down the offer because of her long-term plans and a desire to avoid knee-jerk decisions based on what commodity is hot.

“It’s almost like the gamble,” McMillen says. “You make the decision because of what your neighbors are doing, what you hear — sort of the buzz. And you really can do better if you become independent and think on your terms as to what’s going to work for me.”

Getting Creative To Balance Cattle, Crops

Historically low cattle numbers over the last three years, combined with increasing worldwide demand, have led to some of the highest cattle prices ever.

Sean McClatchey, 38, of Lincoln, Neb., sees this as an opportunity.

“We gotta grow it to make it work,” he says. “It’s not like maybe it was 30 or 40 years ago where a farm the size of ours could support a family or two.”

McClatchey’s parents got rid of cattle when he was a boy. He now has 115 head and is slowly increasing his herd size.

He’s getting creative with his wheat crop this spring to save on feed and fuel. For example, he’ll graze on the wheat fields early in the growing season in a way that will still allow the wheat to be harvested.

McClatchey says these practices allow him to get more than one harvest per year. And he says growing feed on the farm also helps keep costs down.

But it will likely be a while before herd sizes increase from their lowest point since the 1950s. It takes a minimum of 14 months for cattle to move from birth to the market.

While agricultural economist Darrell Mark predicts herd sizes will increase later this year, he doesn’t expect it to drive down costs at the meat counter for quite a while.

Meanwhile, farmers like Morse and McClatchey will try to figure out just where the profit tipping point will be. By Clay Masters, National Public Radio

The prices of many commodities have surged exponentially to above the peak reached in 2008. Corn is now US$290 per tonne and oil is back above US$100 per barrel. Soaring food and energy prices now pose a threat to the fledgling impetus in the recovery of the world economy.

Increased food prices could aggravate poverty in developing countries like Jamaica, increasing the risks of political and social instability. India, for example, is struggling to cope with an 18 per cent annual food inflation rate.

Another food crisis appears imminent. Finance ministers from the Group of 20 (G20) leading economies met in Paris Friday to discuss the food crisis but failed to devise a plan to address this urgent issue.

We hope that the G20 will be more forthcoming, noting that in 2009, they pledged US$22 billion over three years, including a special fund at the World Bank, called the Global Agriculture and Food Security Programme. That fund has received a pitiful US$350 million.

The demand for food — emanating from population growth (world population has doubled since 1970) — is pushing up prices because of the slow growth of global food supplies, the use of grain to fuel cars and the increasingly affluent populations of China and India.

China’s economy is roughly 20 times larger than it was 30 years ago and India’s is roughly four times what it was 20 years ago.

The expansion of supply has been hampered by soil erosion, inadequate irrigation, depletion of aquifers, the loss of cropland for residential uses, and insufficient credit to small farmers. These ongoing trends have been compounded by human-induced climate change which is taking a toll in the form of floods and droughts in key production areas.

The severity of the impact will be greatest in the net food importing regions, such as the Caribbean.

Mr Jeffrey Sachs argues that Africa is the most vulnerable because there is already widespread hunger and because the continent has been bypassed by the Green Revolution. The yield of 1.1 tonnes per hectare in tropical Africa is less than a third of the yields achieved in Asia and Latin America. Mr Lester R Brown of the Earth Policy Institute notes that each day there are 219,000 additional mouths to feed.

To cope with escalating food prices, Jamaica has to increase domestic food production and substitute local foodstuffs for the increasingly costly imported items. Farmers have an opportunity to expand production because the jump in the cost of imported food will increase the demand for local food. Increased production could save foreign exchange, generate employment and improve rural development. Let us see if the agricultural community will rise to the challenge.

Substitution can only deal with a part of the problem because there are no easy substitutes for wheat and corn for human consumption and for products, notably chicken, which depend on animal feed made from imported grain.

Consumers can make a significant contribution if in making their choice of food they spend their money wisely in both economic and nutritional terms. When we consume locally produced food we employ Jamaicans, and when we eat imported food we employ foreigners and pay them in foreign exchange. Jamaica Observer

Addressing a seminar on “Degradation of Environment and Solutions,” organised by Tamil Nadu IAMWARM here on Wednesday, Mr. Nammalvar said that the West promoted chemical fertilizers in India to sell their produce. “In the name of green revolution, vast tract of land in the country has been rendered arid,” he said.

The country that gave hundreds of lakhs of rupees subsidy for chemical fertilizers should instead give one cow, two goat/sheep and five hens to each farmer to promote natural farming.

Stating that farmers were complaining that natural farming was not a profitable venture, Mr. Nammalvar said the consumption of food produced through natural farming had the advantages of not causing serious health implications. Food processing across the country used 150 types of poisonous metals as preservatives, he said. He blamed pollution from industries and vehicles and deforestation for global warming.

“The US and the European countries were the major culprits causing global warming,” he pointed out. He wanted the farmers to grow more trees to mitigate the impact of global warming.

Pointing out that many species had vanished due to pollution, Mr. Nammalvar said sparrows were killed by the food grains produced using chemical fertilizers.

“It also killed the cattle heads. Even vultures that fed on the dead cattle died,” he said.

“Our fertilizers killed many birds, spider and the dragon flies that fed on mosquitoes,” Mr. Nammalvar said.

Deputy Chief Engineer, Public Works Department, Madurai region, T. Arul Santhiappan, Executive Engineer, Periyar-Vaigai Basin Circle, S. Vijayakumar, Assistant Professor, Thiagarajar College of Engineering, S. Chandran, Executive Engineer, PWD Environmental Cell Division, M. Selvarajan, Assistant Executive Engineer, Karunakaran, and Assistant Engineer, Ayyapparaja, spoke. The Hindu

AgriNurture Inc. president and CEO Antonio Tiu said in a phone interview that exports would not be much affected by lost mango output, if at all. However, local supplies would shrink since the mango-growing regions hit by typhoon “Juan” focus on local sales of off-season mango.

“Local prices could increase toward Christmas, up to February,” Tiu said.

Tiu said AgriNurture would not be affected since it had other sources of mango.

“It (mango production loss) might have an impact on exports but then again, producers normally reserve the volume required for exports,” an industry observer said.

Farm damage due to the latest typhoon has reached P7.55 billion in the regions of Ilocos, Cagayan Valley, Central Luzon and the Cordilleras.

Government officials said Pangasinan is a major source of mango for the local market.

It is more likely that the domestic supply will be the one affected, they said.

Part of the mango production in Luzon goes to the Philippines’ fresh-fruit exports to Japan, Korea and other Asian markets. In contrast, Guimaras’ mango output goes to the US and Australia.—Riza T. Olchondra, Inquirer

The money is from the U.S. Department of Agriculture’s 2010 Farmers Market Promotion Program.

The city of Albuquerque will receive $63,914 to establish a sales and marketing organization to help create a permanent indoor/outdoor growers’ market in the city.

The Santa Fe Farmers Market Institute will get $54,086 to improve the Santa Fe Farmers Market with professional development workshops and consumer education. About $4,000 will be used to promote the existing electronic benefits program, which makes it possible for recipients of the Supplemental Nutrition Assistance Program and the Special Supplemental Nutrition Program for Women, Infants and Children to use assistance funds to purchase locally grown fresh fruits and vegetables. Business Journal

It will eliminate much of the guess work of traditional crop cultivation. Farmers will have better ability to plant more robust, higher yielding and drought and disease-resistant trees. This in turn will mean better yields and so higher income for farmers.

The major funder of the research, which involved millions of dollars, was Mars Inc – famous for the MARS bar brand and other chocolate products. The company is a global leader in cocoa science and has committed to ensuring the information is publicly available as opposed to putting a patent on it.

Other key players in the research include the US Department of Agriculture and IBM who have expertise in what is known as computational biology.

Cacao joins more than 180 life forms where scientists have now completed the genetic sequence. These include rice, yeast, grapes, the honeybee, chimpanzees, dogs, modern humans and also microbes such as the malaria parasite. Scoop

The question over whether the country’s “policy of grain self-sufficiency will be sustainable” was raised by the rise in corn and soybean imports, as “demand rises and agricultural land shrinks under the advance of cities.”

Chinese local market has seen record levels of wholesale corn prices, and industrial officials forecast the government would “import at least 1 million tons of the grain this year, up from just 50,000 tons in 2008-09 and the highest since crop failure in 1994-95.”

Meanwhile, “China’s rice imports have also been higher than usual this year, with big purchases in Vietnam and elsewhere.”

The country has faced “apocalyptic warnings that its increasing demand would lead to food shortage worldwide ever since it began economic reforms 30 years ago.” However, these warnings have “turned out to be wide of the mark.”

But the country still has to “feed its population with limited fertile land, scarce water and relatively basic agricultural technologies.” Its government considers “grain self-sufficiency a matter of national security and has responded to the challenges of boosting supplies by plowing a record amount of money into agriculture.”

Chinese people’s dietary shift is one key reason driving the rising corn and soybean imports this year. People are “eating more meat and less rice. In spite of rising family incomes, absolute rice demand in China is basically at the same level this year as it was 10 years ago, according to the US Department of Agriculture.”

Another reason is that “consumption of key feed stocks such as corn and soybeans used to fatten livestock has jumped, with soybean consumption doubling in the past 10 years.”

Many believe that “China will be mostly self-sufficient in future, especially if agricultural policies succeed in increasing crop yields.” China Daily