Monsanto and Cargill started a joint recruiting campaign last week to persuade farmers in twelve states, from Nebraska to the East Coast, to grow Monsanto’s Vistive-brand low linolenic soybeans, according to a report from the Des Moines Register. The Vistive soybeans have less trans fatty linolenic acid than normal soybeans.

In efforts to use healthier oil, 20 states have proposed regulations restricting the use of oils high in trans fats, 25 municipalities have proposed ordinances or health codes, and two dozen school districts have proposed limiting use of trans fat ingredients or foods served to students. McDonald’s, KFC, Wendy’s and other restaurant chains are switching to trans-fat-free oil.

The premium adds an incentive for growers already watching soaring soybean prices. Analysts say high prices, plus the rising cost of producing corn, will prompt farmers to plant more soybeans this year.

Both the Senate and House on March 12 approved another extension to the 2002 farm bill, to April 18, to give farm bill writers still more time to settle issues that have been around for over a year.  When looking at Congress’ upcoming recesses, the extension will not offer much additional time while lawmakers are in session. The extension provides only 11 additional days when Congress is in session, and three of those in the House have votes beginning after 6:30 p.m. EDT.

In the ongoing negotiations on the next farm bill, “there is no dispute that the level of funding will be about $10 billion over baseline, but there is a dispute over how it will be offset,” says Sen. Chuck Grassley (R-Iowa). If correct, the agreement removes one major hurdle facing the legislation that has been under consideration since late last year.

Grassley confirmed that it appears that the upcoming farm bill conference will approve a permanent agriculture disaster program that would meet the requirements of western senators, such as Senate Finance Chairman Max Baucus (D-Mont.). Whether to include such a program and, if so, the level of spending that would be required, also has been a significant block to completing work on the legislation.

Meanwhile, House Ag Chairman Collin Peterson (D-Minn.), House Agriculture ranking member Bob Goodlatte (R-Va.), and Senate Ag Chairman Tom Harkin (D-Iowa) said after a meeting last week that they were working on allocating money among the farm bill titles under two different proposals: one based on adding $10 billion over 10 years to the $597 billion baseline for the bill and a second without the $10 billion.

The mention of a “baseline bill” brought a lot of concern that crop insurance funding would be sliced by billions of dollars, and the Commodity Title I funding would be crimped, likely via cuts in direct payments.

Peterson said it would be better to write the bulk of the new farm bill at the baseline level during the recess and “plus up” the bill if tax-writing chairmen Baucus and Rep. Charlie Rangel (D-N.Y.) and the Bush administration reach agreement rather than waste the two-week Easter/Spring recess writing a bill at the higher funding level.

Argentina’s four leading farm groups on March 13 launched a two-day farm strike to protest a new export tax scheme that sharply raised the duty on soybeans leaving the country.  Dow Jones Newswires reports that the CRA, FAA, SRA and Coninagro said the strike may be extended if the government doesn’t respond to their demands to scrap the scheme. The Rosario Grain Exchange also recommended that trade be halted Thursday in protest over what it called “the unfortunate interventionist measures.”

On March 11 the government announced a sweeping overhaul of the export tax structure on grains and derivative products. A sliding scale was implemented with rates increasing as export values rise. The new taxes will be in place for four years, Economy Minister Martin Lousteau said.

The export tax on soybeans was raised to 46 percent from 35 percent based on the government’s March 11 FOB reference price of $538 per tonne. Based on current prices, the tax on wheat and corn exports decreased by about 1 percentage point. Increased export taxes depress domestic grain prices since the local value is determined by subtracting the tax rate from export prices.

The heavier tax on soybeans is designed to stem the rampant expansion of soybean cultivation at the expense of other crops.

Taiwan dropped its 5 percent business tax on grain imports for a year from March 10 in a bid to help its economy, reports The Public Ledger. No business tax will be levied on imports of soybeans, barley, wheat, and corn for a period of one year from March 10. To help stabilize domestic commodity prices, the Legislative Yuan has passed the appropriate legislation, which empowers the cabinet to flexibly regulate the business tax levied on the four commodities when sold on by importers. Previously, a 5 percent business tax was levied.

Taiwan’s Ministry of Finance said in a statement that although the move will decrease government revenue by $94.56 million, the ministry will direct all customs offices to comply with the measure in consideration of the people’s livelihoods and the nation’s overall economic development.  

The soy complex closed up on March 13 reflecting a decline in the U.S. dollar to new lows and a rally in crude oil and gold to new record highs. Soybeans and soyoil, however, did close near their lows for the day with soybeans settling single digits higher. In overnight trade, soybeans did post double-digit gains in all but the March and May contracts with soybean meal also higher, but soybean oil futures were mostly lower along with Chinese soybean oil and Malaysian palm oil futures. March bean futures closed up $2.94, finishing at $509.63; May gained $2.85, closing at $515.42; and July was up $3.03, ending at $521.30. March meal increased $8.27 closing at $389.11; May was $6.06 higher, finishing at $392.42; and July meal closed up $5.18, ending at $395.17. March oil increased $9.92 to finish at $1369.06; May was up $7.05, closing at $1379.20; and July was $8.16 higher, closing at $1395.95.

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