April 23, 2013

23/04/2013: CBH loses transport monopoly; Obama's budget proposes changes to crop insurance; Russia less dependent on grain for feed production

CBH Group has been stripped of its grain transport mono­poly, paving the way for multinational rivals including Glencore and Cargill to cut cheaper deals with freight operators and potentially improve profits for farmers.

The Australian Competition Tribunal on Friday upheld a decision by the competition regulator in 2011 that stripped CBH of its ability to force farmers and grain marketers that use its extensive farm storage facilities to use its transport arm, Grain Express, to get their grain to port.
CBH appealed the ACCC at the Australian Competition Tribunal.

It will mean rival grain marketers including Glencore, Cargill's AWB and Emerald can source alternative train and road freight suppliers. 


President Barack Obama's FY2014 budget proposal was submitted to Congress Wednesday, being met with open opposition from the Republican side of the aisle for proposed spending and revenue increases and more muted grumbling from Democrats for proposed trims in cost-of-living increases to entitlement programs such as Medicare.

For agriculture, the president's budget proposal is a mixed bag. Overall, the Department of Agriculture would receive nearly $22 billion in discretionary funding, a decrease of $1.2 billion over 2012 funding levels. The entire 2014 USDA budget would be $145.8 billion. 

Related to farm programs, the document reprises proposals to cut crop insurance support and eliminate direct payments, which officials said would save $37.8 billion over the 10-year budget window. These topics are expected to be central to continued discussions leading toward a new, long-term farm bill. 

As expected, the Obama Administration proposal suggests elimination of the Food for Peace (PL-480) program, aiming to shift from a system of shipping U.S. commodities directly to countries in need.


Russia's use of grain in producing compound feed is slowly declining, according to Valery Afanasiev, head of the Russian Feed Producers Union (FPU). 

"About five to six years ago, the grain content in Russian feed production amounted to 75 -76 percent, now it has decreased to 68 percent. This is average value, as the ratio of feed ingredients varies considerably depending on the particular livestock sector," said Afanasiev.

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Cargill grain elevator and terminal
Cargill grain elevator and terminal (Photo credit: Wikipedia)


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