Feedstuffs is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

GMO labeling law goes to New Mexico legislature

GMO labeling law goes to New Mexico legislature

LEGISLATION has been introduced in the New Mexico Senate that would require animal feed and human food containing genetically modified organisms (GMO) to be labeled as such.

The legislation, introduced by state Sen. Peter Wirth, an attorney from Santa Fe, N.M., would amend the state's feed and food laws. If it passes the Senate, it then would go to the New Mexico House of Representatives.

The legislation would require that any product that contains more than 1% by weight of genetically modified material be packaged with a label that's "conspicuous and easily understood by consumers."

Genetically modified material is described as a substance that has been modified through the use of bioengineering or genetic engineering.

Regulations for enforcement would be developed by the New Mexico Environmental Improvement Board.

Wirth, a Democrat, said the bill's premise "is simple: New Mexicans deserve the right to know what's in the food they are eating and feeding their families." The bill would give people the "basic information" needed to decide what kinds of food they want to buy, he said.

Wirth said he introduced the bill after being approached to do so by the environmental activist group Food & Water Watch.

The legislation is one of several state-based initiatives seeking to require the labeling of feed and food that have GMOs in them.

A GMO labeling measure on the California ballot was defeated last year after initially finding overwhelming support in opinion polls; however, it then went up against massive advertising campaigns and other opposition from farm/seed and food producers (Feedstuffs, Nov. 12, 2012).

GMO labeling legislation currently is before the Washington state assembly, and if it's not acted on in the assembly, it will be submitted to voters this fall (Feedstuffs, Oct. 15, 2012). It's largely assumed that the legislature will take the latter route, and polling shows that 72% of the state's voters support the measure.

Ballot initiatives also are being pursued in Connecticut, Vermont and Oregon, and a petition requesting that foods made with GMOs be labeled is pending before the Food & Drug Administration, which has taken the position, after years of research, that conventionally produced foods and GMO-enhanced foods are substantially the same.

FDA's position is supported by the American Medical Assn., National Academy of Sciences and World Health Organization.

Most recently, Mark Lynas, often called one of the founders of the anti-GMO movement, publicly stated that he has reconsidered his position and that science clearly demonstrates that biotechnology is not only safe but critical to feeding the growing global population while protecting natural resources, including water.

Volume:85 Issue:03

Perdue sues Waterkeeper for $2.5m

Perdue sues Waterkeeper for $2.5m

PERDUE Farms Inc. is seeking to recover $2.5 million in attorneys' costs for defending itself and Alan and Kristin Hudson in a lawsuit brought by the Waterkeeper Alliance alleging that the Hudsons and Perdue had polluted waters that flow into the Chesapeake Bay.

Perdue is the fourth-largest chicken integrator in the U.S., and the Hudsons were contract growers for the company.

In its filing, Perdue said Waterkeeper, an activist environmental organization headed by Robert F. Kennedy Jr., continued its litigation of the case even after an alleged uncovered pile of chicken manure was demonstrated to be harmless biomass.

Waterkeeper sued the Hudsons and Perdue, maintaining that the "manure pile" leached into a ditch on the farm and, from there, leached into other waters that wind their way to the bay.

Waterkeeper said Perdue, as the contractor, should also be held responsible for the situation.

A federal judge last month ruled that the Hudsons and, therefore, Perdue did not pollute the waters as the Waterkeeper suit insisted (Feedstuffs, Dec. 24, 2012).

Volume:85 Issue:03

ConAgra clears conditions to acquire Ralcorp

ConAgra clears conditions to acquire Ralcorp

CONAGRA Foods Inc. last week reported that the waiting period in the U.S. for regulatory review of its proposed acquisition of Ralcorp Holdings Inc. has expired and that the Canadian Competition Bureau has advised that it does not plan to pursue a review of the acquisition.

ConAgra said the clearances satisfy two major requirements for the acquisition to go forward, but the company noted that the purchase remains subject to certain other closing conditions, including approval by Ralcorp shareholders.

ConAgra, a leading manufacturer of branded food products, reached an agreement to acquire Ralcorp, the largest manufacturer of private-label food products in the U.S., in November (Feedstuffs, Dec. 3, 2012). ConAgra said it would buy Ralcorp for $90 per share, or $6.8 billion, including an assumption of debt.

The acquisition would give ConAgra $18 billion in sales, making it the second-largest packaged food company in the U.S. behind Kraft Foods Group Inc., which has $19 billion in sales.

ConAgra, headquartered in Omaha, Neb., and Ralcorp, headquartered in St. Louis, Mo., both market products through virtually every food format, including club and warehouse stores, convenience stores, grocery stores and restaurants.

ConAgra's brands are found in 97% of U.S. households.

The acquisition is scheduled to close by March 31.

Volume:85 Issue:03

Cargill credits balanced, diverse business portfolio

Cargill credits balanced, diverse business portfolio

CARGILL Inc. has reported an increase in profits of more than 400% for its fiscal 2013 second quarter, crediting "balance and diversity" across the company.

For its quarter ended Nov. 30, 2012, Cargill reported net earnings of $409 million on revenues of $35.2 billion, compared with $100 million and $33.1 billion in its fiscal 2012 second quarter.

For its first half, Cargill reported net income of $1.38 billion, compared with earnings of $336 million the year before. Revenues for the first half were $69 billion.

The company said second-quarter earnings increased in four of its five operating segments, and first-half income rose in all five segments.

Cargill said its agriculture segment benefited from improved operating results in animal nutrition.

The company noted that while feed manufacturing dealt with high prices for corn and other feed ingredients, performance was strengthened from the integration of Provimi, which has brought nutritional expertise, technology and products to the business portfolio since Cargill acquired Provimi in 2011 (Feedstuffs, Nov. 11, 2011).

The agriculture segment also benefited from large grain shipments to Canada, the company said.

Cargill said its origination and processing segment results were a function of "fundamentally driven markets," including an improved environment for oilseed processing in several regions of the world. This segment was the largest contributor to total earnings.

Cargill said its food ingredients segment results were down slightly from the exceptional performance of the year before due mostly to excess capacity in the North American ethanol market.

Animal protein, which is included in the segment, was profitable despite high livestock feeding and raw material costs, compared with what were extremely negative results in beef processing the year before, the company reported.

Cargill said results rose for its industrial segment, although deicing salt production lagged behind normal levels because of the carryover of product from the mild North American winter last season.

The company said its financial and risk management segment turned around from the loss the year before, when markets were stressed by debt turmoil in the U.S. and Europe. By contrast, fiscal 2013 has experienced improved investor sentiment and stronger financial markets, Cargill said.

Chair and chief executive officer Greg Page said the company continues to invest in its operations to better serve customers around the world.

He noted that following two years of investing capital in acquisitions, Cargill is now focused on building new, expanding and modernizing facilities, with a record $2.4 billion of large projects under construction in 13 countries.

Page said these projects are strengthening the company's innovation, risk management and supply chain, "helping us better serve customers' needs and becoming their partner of choice."

Cargill, headquartered in Minneapolis, Minn., is an international producer and marketer of agricultural, food, industrial and financial products that employs 142,000 people in 65 countries. The company reported fiscal 2012 revenues that totaled $133.9 billion.

Volume:85 Issue:03

Stock market summary, 1/21/13

Stock market summary, 1/21/13

 

Jan. 16  

Jan. 9

Year ago

Feedstuffs-Moskow Stock Indexes

Agribusiness

418.50

416.40

365.60

Baking

160.00

156.50

126.50

Fertilizer

565.80

573.60

588.20

Meat

408.50

407.80

348.80

Poultry

479.30

445.30

205.70

Packaged Foods

178.80

176.20

192.60

Dow Jones Ind.

13,511.00

13,391.00

12,579.00

NASDAQ

3,117.54

3,105.81

2,769.71

S&P 500

1,472.60

1,461.00

1,308.00

 

 

-2012-13-

Jan. 16

Jan. 9

 

Highs

Lows*

Close

Close

Andersons, The

51.01

35.63

45.28

43.71

ADM

33.50

24.48

28.39

28.48

Balchem

40.21

26.60

36.35

36.47

Bunge Ltd.

76.45

57.22

76.45

74.40

Cagle's

3.45

0.03

N/A

3.00

Cal-Maine Foods

46.31

34.57

41.34

41.07

Church & Dwight

58.76

45.24

56.09

55.76

ConAgra

31.17

23.81

31.17

30.40

Corn Product

68.98

45.59

68.98

67.40

CSX

23.39

19.01

20.82

20.54

Digital Angel

0.14

0.03

0.05

0.06

DuPont

53.80

41.95

45.97

46.44

Hormel

34.51

27.48

34.42

34.51

IGI

1.34

0.94

1.10

1.05

Internatl Flavors

69.46

53.33

69.46

68.64

KC Southern

88.82

62.54

86.57

86.19

Kraft Foods

42.52

25.11

27.82

27.05

Lilly

53.81

38.49

52.93

52.97

Merck

47.96

37.18

42.54

42.59

Monsanto Co.

101.90

69.89

101.90

99.58

Mosaic

61.05

45.62

58.99

59.35

MWI Vet. Supply

117.12

67.16

114.27

112.30

Neogen

47.93

30.94

45.48

47.03

Novartis

65.48

51.48

65.18

64.63

Omega Protein

9.12

6.01

6.38

6.45

Pfizer

26.76

20.95

26.61

26.47

Philip Morris

36.16

28.14

32.78

31.90

Pilgrims Pride

8.64

4.28

8.50

8.10

Potash Corp.

47.45

37.28

41.81

42.44

Sanderson Farms

55.01

36.50

48.55

49.80

Sara Lee

111.60

24.46

30.06

29.48

Seaboard

2,642.64

1,828.65

2,504.00

2,569.00

Smithfield Foods

24.05

17.82

22.80

22.80

Strategic Diag.

2.10

0.93

1.04

1.05

Tejon Ranch

31.26

25.29

30.17

30.41

Tyson Foods

20.46

14.17

20.46

20.28

YUM! Brands

74.47

61.23

65.95

64.82

Feedstuffs’ Stock Summary indexes and stock quotes are provided by Credit Suisse First Boston (CSFB), New York, N.Y.

Moskow Stock Indexes are developed exclusively for Feedstuffs by Rob Moskow at CSFB. E-mail Moskow at [email protected]

*Highs and lows are as of Jan. 16.

 

Volume:85 Issue:03

Names in the News, 1/21/13

Names in the News, 1/21/13

AMERICAN SEED TRADE ASSN., Alexandria, Va. -- Jane B. DeMarchi has been named vice president, government affairs. DeMarchi was previously with the National Association of Wheat Growers.

ANIMART INC., Beaver Dam, Wis. -- Carissa Merfeld has joined the inside sales team of the dairy and livestock division. Merfeld will be responsible for building and maintaining client relationships, sharing product knowledge through inbound and outbound phone calls and assisting outside sales representatives by taking orders and organizing deliveries.

ARM & HAMMER ANIMAL NUTRITION, Princeton, N.J. -- Dr. Neil Michael has joined the company as senior business manager. Michael will be responsible for coordinating and overseeing the execution of marketing and business management efforts. He was previously with Vita Plus Corp.

ASSOCIATION OF EQUIPMENT MANUFACTURERS, Milwaukee, Wis. -- Charlie O'Brien has been named senior vice president. O'Brien will have expanded leadership responsibilities, including increased member engagement, market information services and global business development. He was most recently vice president.

HARRISVACCINES INC., Ames, Iowa -- Dr. Mark Mogler has been promoted to head of research. Mogler will help direct development of new products, assist in troubleshooting scientific and production issues and lead discovery activities to enhance new and existing products.

SOUTH DAKOTA STATE UNIVERSITY, Brookings, S.D. -- Dr. Joe Cassady has been selected as head of the animal science department, effective June 22. Cassady will be responsible for the department's: goals and objectives; faculty, staff and student recruitment and retention; budgets; fund-raising efforts; facilities; representation in official communications, and fostering and building working relationships with other disciplines and stakeholders. He was previously with the Beef Improvement Federation.

VALMONT INDUSTRIES INC., Omaha, Neb. -- Richard P. Heyse has joined the company as executive vice president, effective in late February. Heyse was previously with WESCO International.

ZINPRO CORP., Eden Prairie, Minn. -- Dr. Fei Ji has been named regional research and nutritional services manager for North Asia.

Michael Keith has joined the company as account manager-Gulf states. Keith will have sales responsibilities for eastern Texas, Louisiana, Arkansas, Missouri and eastern Oklahoma.

Dr. Christof Rapp has been appointed regional research and nutritional services manager for Europe. Rapp will also provide technical support for the Middle East and North Africa. He was most recently research nutritionist for Europe.

Dr. Mike Socha has been promoted to regional research and nutritional services manager for North America. Socha was most recently dairy research team leader.

Dr. Terry Ward has been appointed global director of the research and nutritional services team. Ward will be responsible for managing all research and technical service activities for the company worldwide.

Volume:85 Issue:03

Biotech makes farming 'greener'

Biotech makes farming 'greener'

A COMPREHENSIVE and important study -- peer reviewed and published in a biotechnology and economics professional journal -- clearly and decidedly shows that the world has benefited from a decade of biotech crops.

In the period covering 1996 through 2005 -- the first 10 years in which biotech crops were commercially planted to any significant extent -- farmers have experienced greater yields and income for grain, oilseed and cotton crops, and the world has experienced major reductions in carbon dioxide emissions (greenhouse gasses), according to the study.

Biotech is truly helping the world "go green," according to the U.S. Grains Council, which hosted a news conference to release the study in the U.S.

The study, GM Crops: The First 10 Years -- The Global Socio-economic & Environmental Impacts, analyzed biotech crop production in the principal user countries around the world and was conducted by PG Economics Ltd. in the U.K. It was commissioned by Monsanto Co.

 

Changed way to farm

Herbicide-tolerant biotech crops planted using conservation tillage practices help retain carbon in the soil, and insect-resistant crops "dramatically" reduce the need to spray fields and, thus, reduce farm fuel usage, according to Graham Brooks, author of the study and director of PG Economics.

In 2005 alone, biotech crops planted on 87 million hectares (215 million acres) by 8.5 million farmers around the world reduced carbon dioxide emissions by 9 million kilograms (8.9 million tons), Brooks said. He noted that the impact is the equivalent of taking 4 million cars off the road for an entire year -- 17% of the cars in the U.K.

Put simply, "biotech crops have changed the way people farm," Brooks said, emphasizing that their environmental performance shows the important role biotechnology is playing to help agriculture around the world decrease its carbon dioxide emissions.

Countries such as Argentina, Canada and the U.S. are leading the way "toward these environmental benefits" by planting herbicide-tolerant crops to switch to low- and no-till crop production and insect-resistant crops to reduce sprayings, Brooks said. It all adds up to less tillage and reduced field operations, he said.

Conventional tillage disturbs soil and releases carbon dioxide into the atmosphere, whereas low- and no-tillage cropping systems that use herbicide-tolerant varieties leave more plant residue on soil surfaces, sequestering carbon in the soil and contributing to soil and water conservation, he explained.

Furthermore, since 1996, biotech crops have saved farmers 1.7 billion liters (441 million gallons) of fuel in the decreased field work, eliminating 4.6 billion kilograms of carbon dioxide emissions, according to the study.

In just Argentina, the study concluded that herbicide-tolerant varieties led to a 157% increase -- from 5.9 million hectares (14.8 million acres) in 1996 to 15.2 million hectares (38 million acres) in 2005 -- in no-till soybean plantings, decreasing carbon dioxide emissions by 21.0 billion kilograms (20.8 million tons).

Worldwide, the study found that biotech crops decreased the environmental impact of crop production related to pesticide use by more than 15% over the 10 years.

 

No longer overlooked

According to the study, biotech crops provided a $5.6 billion net benefit to farmers' income around the world in 2005 -- counting a second soybean crop in Argentina -- and a $27.0 billion net benefit in the 10 years (Table 1). The additional income comes from decreased costs for field work and increased yields, the study said.

The study reported that corn production in the U.S. increased 29 million tons in the 10 years due to biotech corn production, U.S. farmers' net income increased $2.7 billion from biotech corn production and U.S. farmers' net income has increased $13 billion from all biotech crop production.

This impact on income is size neutral, Brooks said, pointing to how farmers in developing countries actually captured more (55%) of the income benefit in 2005 than farmers in developed countries did (Table 2).

Brooks said biotech crop planting is currently approved in 22 countries, with projections putting that number at 40 countries and 200 million hectares (500 million acres) by 2015.

Looking ahead, he said the gains made possible with biotech crops have the potential "to compound quite dramatically" as the technology becomes available to more farmers worldwide. "These are benefits that, if overlooked in the past, will not be in the future," he said.

PG Economics, based in Dorchester, U.K., provides consultant services to agricultural and other natural resource-based industries and specializes in agricultural production systems, markets and policy and plant biotechnology.

The U.S. Grains Council is a private organization representing agribusinesses and farmers committed to building international markets for U.S. barley, corn, grain sorghum and their products.

The study was published in the Jan. 17 issue of AgBioForum and is available at www.grains.org in the News & Information section and at www.isaaa.org.

 

Here's the point

SOMETIMES, facts just speak for themselves and speak clearly and convincingly. Such is the case in a comprehensive study of the first decade of biotech corn, soybeans and other crops admittedly commissioned by Monsanto Co., which has a vested interest in biotechnology, but put together by an independent and internationally recognized specialist in agricultural production systems, PG Economics Ltd. in the U.K.

The study found that biotech crops increase yields and permit farmers to use conservation-focused low- or no-till production practices that reduce field work, pesticide use and, therefore, farm fuel use. This has obvious benefits to farm income, i.e., increased production at less cost.

This also has obvious benefits to environmental sustainability, i.e., reductions in carbon dioxide emissions -- greenhouse gasses that have been linked to environmental issues such as air and water quality and global warming.

Furthermore, the benefits are significant. Biotech corn production increased corn production in the U.S. by 29 million tons and U.S. farm income by $2.7 billion in the 10-year period from 1996 to 2005, and biotech crop production increased overall U.S. farm income by $13 billion, according to the study. Biotech crop production increased farm income worldwide by $27 billion in the 10-year period.

In 2005 alone, biotech crop production reduced carbon dioxide emissions by 9 billion kilograms (8.9 million tons), which is equivalent to taking 4 million cars off the road for one year, the study said.

These benefits will become even greater as biotech crop production expands in the future as more countries approve biotech plants that provide current traits such as herbicide tolerance and insect resistance, as well as new traits such as drought tolerance, according to the author of the study. The future also promises new quality traits such as high omega-3 oil content, he said.

These are important messages farmers should share with fellow farmers, food producers and retailers, policymakers and the general public in the U.S. and around the world in personal contacts and other forums and by referencing www.FeedstuffsFoodLink.com.

 

 

1. Biotech crop impact on farm income (million U.S. $)

 

Increase in

Increase in farm

Trait

farm income 2005

income 1996-2005

GM HT maize

212

795

GM HT soybeans

2,281 (2,842)

11,686 (14,417)

GM HT cotton

168

927

GM HT canola

195

893

GM IR maize

416

2,367

GM IR cotton

1,732

7,510

Other GM crops

25

66

Total

5,027 (5,588)

24,244 (26,975)

Note: GM is genetically modified, HT is herbicide tolerant and IR is insect resistant.

Note: Bracketed number is with second soybean crop in Argentina.

 

 

2. Biotech crop impact on farm income in developed and developing countries (million U.S. $)

Trait

Developed

Developing

% developed

% developing

GM HT maize

212

0.3

99.9

0.1

GM IR maize

364

53

86.5

13.5

GM HT soybeans

1,183

1,658

41.6

58.4

GM HT cotton

163

3

98.4

1.6

GM IR cotton

354

1,378

20.4

79.6

GM HT canola

195

0

100

0

GM IR papaya and squash

25

0

100

0

Total

2,496

3,092

45

55

Note: Study considered all countries in South America as developing.

Source for Figure and Tables: GM Crops: The First 10 Years -- Global Socioeconomic & Environmental Impacts, a study by PG Economics Ltd.

 

Volume:79 Issue:19

Grant will help sustain Cornell Johne's research

Grant will help sustain Cornell Johne's research

- New grant builds on results of current project.

- Risk assessment models under development.

- Tools to help build optimal MAP-free milk programs.

RESEARCHERS with Cornell University's College of Veterinary Medicine have received a new $500,000 grant over five years from the U.S. Department of Agriculture's National Institute of Food & Agriculture that will allow them to continue their research to identify Mycobacterium avium subspecies paratuberculosis (MAP) in milk, determine risk factors for milk contamination and document recommended intervention strategies to make milk safer.

MAP is a bacterium that is linked to Johne's disease in cattle and possibly Crohn's disease in people. According to Cornell, it incites an infection in ruminant animals that takes about four years before showing clinical signs. Dairy cows will typically have had two calves during that period, and those calves can contract the infection from their mothers and produce thousands of gallons of milk before clinical signs appear.

Recent studies have shown that MAP in milk can survive pasteurization, which has raised human health concerns, the announcement said.

Once MAP has infiltrated a herd, the cows are widely susceptible to Johne's disease, which is contagious, chronic and often fatal. The disease is blamed for up to $250 million in annual losses in the U.S. dairy industry.

The new grant will allow Cornell to build on the results of the current $2.5 million project, which has been under way since 2009.

The researchers are in the midst of a nine-year longitudinal study to gather DNA from four generations of cows and bacteria, said Ynte Schukken, principal investigator and professor of epidemiology and herd health at the college.

"Our study covers the entire spectrum, with data and samples collected from the field cultured in the lab and bacteria and host DNA sequenced using the most modern genomic methods," Schukken said. "Because of this unparalleled nine-year data set, we have the potential to unravel the mysteries of Johne's disease, a very slow-going and devastating infection on dairy farms."

The researchers, including Cornell professor of population medicine and diagnostic science Yrjo Grohn and scientists from The Pennsylvania State University, the University of Pennsylvania and the University of Maryland, will:

* Validate the effectiveness of a current test used to identify MAP;

* Analyze data from two herds with a known MAP infection prevalence and cross-sectional data from 300 dairy herds with the complete range of MAP infection prevalence, focusing on the relationship between management practices and MAP contamination of milk;

* Develop risk assessment models that explain and predict MAP contamination of raw milk, and

* Use models they developed to design optimal, sustainable MAP-free milk programs.

Schukken's investigation will extend prior results that have already explained transmission patterns of MAP at the molecular level, developed mathematical models for predicting transmission, devised control programs and monitored the success rates of those programs, the announcement said.

"Our immediate goal is to provide dairy farmers with the tools they need to produce milk that is free of MAP," Schukken said. "Evidence from previous work we've done proves that a high percentage of dairy farms in the U.S. have MAP-infected cattle, so reducing viable MAP in raw and pasteurized milk is of importance -- first for the health and well-being of the cows (and) also, because of the possible connections to Crohn's disease, for the health and well-being of people."

Volume:85 Issue:02

Immigration agents raid Sparboe, arrest 10

Immigration agents raid Sparboe, arrest 10

FEDERAL Department of Homeland Security agents swept through Sparboe Farms in Litchfield, Minn., last week and arrested 10 workers for immigration-related violations but said the arrests were part of "a larger criminal investigation" and provided no additional details.

Sparboe, the fifth-largest commercial egg producer in the U.S., said it was cooperating with the agents.

A spokesperson for U.S. Immigration & Customs Enforcement (ICE) said the arrests were made on "administrative charges," terminology ICE uses to detain people suspected of immigration violations, such as being in the country illegally.

Two of the 10 workers arrested were released for "humanitarian reasons," the ICE spokesperson said.

In a statement, Sparboe said it has invested "significant resources" in immigration regulation compliance, including using the federally approved "e-verify" system to document the eligibility of applicants to work in the U.S.

In its statement, Sparboe said it knew of no food safety or quality issues that would have brought federal officers to its operations.

A spokesperson for the U.S. Attorney's Office also refused to discuss the nature of the "larger criminal investigation."

Immigration raids at meat and poultry operations were common in the mid-2000s, with ICE agents often hauling suspected illegal immigrants away from farms and plants by the busload.

One of the most visible raids was in 2008 at Agriprocessors Inc. in Postville, Iowa, in which 389 workers were arrested for being in the U.S. illegally (Feedstuffs, May 19, 2008).

A consequential investigation led to 86 counts of fraud and violations of the Packers & Stockyards Act that were brought against Sholom Rubashkin, the company's general manager. He was found guilty and sentenced to 27 years in prison (Feedstuffs, June 28, 2010).

Agriprocessors declared bankruptcy, was sold to an investor and is now doing business as Agri Star.

The Obama Administration has shifted its immigration focus away from minor infractions toward serious felonies, such as companies engaged in abetting immigration violations and/or systematically hiring undocumented workers.

Egg industry sources explained last week that while e-verify works well, it cannot stop illegal immigrants from using fake or stolen identification. One source suggested that there may be more raids in the future.

Sparboe, founded by Bob Sparboe in 1954, produces eggs on farms in Minnesota, Iowa and Colorado and markets eggs and egg products to foodservice and retail customers throughout the U.S.

Volume:85 Issue:02

Waterways need 'fresh' ideas

Waterways need 'fresh' ideas

IF there were ever any doubts about the value of the U.S. inland waterway system, the 2012 drought put the issue to rest.

With low water levels on the Mississippi River threatening to shutter commercial barge traffic, dozens of industries and business interests coalesced to push the federal government into action to avert a potential shipping crisis.

While closure of the river is still a possibility, drought-withered navigation channels are just the latest issue that highlights the importance of the nation's waterway transportation grid to commerce, especially as it relates to agriculture.

For several years, the issue has been an aging lock and dam system that, by many reports, is crumbling day by day.

Last fall, Lock 27 on the Mississippi River closed for five days due to emergency repairs, necessitated, in part, by falling water levels. The U.S. Army Corps of Engineers estimated that an unscheduled closure similar to that of Lock 27 likely costs $2.8 million per day or more, not including the associated economic impact on shippers and customers that are unable to move products.

A recent study commissioned by the soybean checkoff suggested that it may be time for a new approach to funding much-needed improvements to the infrastructure of the river system.

Soybean industry leaders said the inland waterway system is not merely a contributing factor to the success of U.S. soybean farmers but a dominant one. While other nations can produce soybeans at a lower cost, the ability of the U.S. to deliver soybeans to customers in an extremely cost-effective manner has been our competitive advantage for decades.

While dozens of industries rely on barge transportation as the most economical mode of delivering products to export terminals, coaxing infrastructure funding from Congress has been an elusive goal for many years.

Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), said the industry is "gravely concerned" by the continued degradation of the waterway system, and several like-minded stakeholders have concluded that it is time for "fresh thinking" on the funding issue.

The study, conducted by the Texas Transportation Institute at Texas A&M University, highlighted several inadequacies of the current scheme of managing the lock and dam system and how alternative funding and maintenance strategies have the potential to yield better results.

Looking at similar systems in other parts of the world -- the Panama Canal expansion, as one example -- Steenhoek said it is "discouraging to observe how many other countries are able to construct their major infrastructure projects" more efficiently than the U.S. can. Projects elsewhere tended to be completed within budget and on schedule.

Citing the Olmsted Lock & Dam project on the Ohio River near Olmsted, Ill., as an example of the inefficient U.S. system, Steenhoek pointed out that the project originally was estimated to cost $775 million but is now projected to cost more than $3.1 billion and is not expected to be completed until at least 2020.

The much larger Panama Canal project, meanwhile, was approved in 2006 and will likely be completed by April 2015 at an estimated cost of $5.25 billion. The Texas study suggests that the reason for repeated cost overruns and project delays in the U.S. is the piecemeal and unpredictable manner in which such projects are funded.

Another project cited in the study -- the McAlpine Lock & Dam project on the Ohio River near Louisville, Ky. -- faced overruns and delays similar to Olmsted. On average, the project received only 61% of full capability funding levels, resulting in a 38% cost escalation and a project completion delay of 6.5 years. Had the funds been secured up front, or at least with greater certainty, those overruns and delays might have been greatly reduced or avoided completely.

One approach recommended in the study, which was funded by the United Soybean Board's Global Opportunities program, would be to place greater emphasis on maintenance of the existing lock and dam system rather than on new construction. Such an approach could take various forms based on different combinations of routine preventative maintenance and a so-called "fix as fails" strategy.

The ideal situation, the study found, would include providing regular routine maintenance coupled with major rehabilitation. It has been estimated that in the next half-century, major rehabilitation will be necessary at all 171 U.S. lock sites.

Also examined in the analysis was the feasibility of instituting a bonding-style approach to lock and dam funding that grants priority projects more funding up front, potentially decreasing the likelihood of delays and cost overruns.

"The research highlights that how you allocate money is just as important as how much money is allocated," Steenhoek explained. "A bigger check from the government is not the only solution. Better stewardship is also essential."

The study found that the cost of one lock construction project -- roughly $365.8 million -- is approximately equal to the cost of nine major rehabilitation projects, suggesting that if each of the nine new construction projects currently underway were downgraded to a major rehabilitation, the total cost could drop to $366.3 million instead of the $3.2 billion listed at present. 

Volume:85 Issue:02