A newsletter from the National Corn Growers Association First Quarter 2008 Volume VII, Issue 1

Corn Grower update
New Renewable Fuels Standard, Presidential Veto Override Mark Busy First Quarter

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mong many accomplishments, the National Corn Growers Association (NCGA) began its fiscal year and ended its calendar year with record corn production, two major legislative victories and the introduction of a new first vice president for the Corn Board. Corn producers had many reasons to celebrate and be thankful as the holidays came and went. The first quarter, which ended December 2007, proved to be an especially eventful three months for the NCGA as it worked to complete major legislation, scoring two wins with ethanol and water development bills and building on our organization’s reputation as a responsible innovator when it comes to farm policy. And trade and farm policy issues were also front-and-center, even though Congress and the president could not agree on the new farm bill. While Washington was getting an energy bill through Congress and the White House that included our vision of a renewable fuels standard, NCGA and state grower leaders and staff were continually confronting ethanol critics who distorted or ignored research. From the Wall Street Journal to National Geographic magazine, NCGA was countering false claim after false claim in a positive and informative manner. In the meantime, U.S. corn growers were pleased to see the fruits of a record harvest. We already were expecting high numbers given the number of acres planted earlier in 2007, but the production of 13.1 billion bushels (and an average yield of 151.1 bushels per acre) was above and beyond expectations. Perhaps this explains why we also saw a record number of entrants to NCGA’s National Corn Yield Contest – nearly 5,000 growers.

One of the causes of this higher production is a growth in biotechnology, and NCGA in December updated its “Know Before You Grow” program to help farmers make their seed purchase decisions, and kicked off a “Respect the Refuge” campaign to promote the planting of non-Bt corn and protect the use of biotech in the fields. With the beginning of a new fiscal year, the annual Corn Board officer change took place. Ken McCauley of Kansas became chairman of the NCGA Corn Board, Ron Litterer of Iowa became president and Bob Dickey of Nebraska became first vice president. The officers traveled intensely during the first quarter, and all three spent a good deal of time in meetings in Washington, D.C., working to ensure passage of our priority legislation. Clark Gerstacker of Michigan and Bart Schott of North Dakota took seats as Corn Board members. In late October, as the nation’s corn farmers harvested the largest crop in history, the National Corn Growers Association and its state affiliates launched a campaign to educate consumers about growers’ dedication for producing the safest, most abundant food and feed supply on Earth, while also supplying the demands for cleaner-burning, renewable ethanol. A campaign Web site highlighted interesting facts about farming, complete with an interactive timeline.
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Leadership Busy at Broadcasters Conference NCGA Chairman Ken McCauley, left, and President Ron Litterer meet the press at the National Association of Farm Broadcasting’s annual conference, held in November in Kansas City.

In this issue
First Quarter Accomplishments

• • • • • • • •

Biotech Ethanol and Energy Farm and Rural Development Research and Business Development Production and Stewardship Trade Membership NCGA Funding Update

Biotechnology
The NCGA Biotechnology Working Group kicked off a communications campaign called “Respect the Refuge” in December to stress the importance of setting aside refuge acres when planting certain biotech corn hybrids. The refuge program is a key responsibility for corn growers using Bt corn, a hybrid that contains a gene from the soil bacterium Bacillus thuringiensis, which produce proteins that can kill the European Corn Borer or Corn Rootworms. Growers use Bt corn as an alternative to spraying insecticides for control of these pests. In addition to being mandated by the U.S. Environmental Protection Agency, planting a refuge of non-Bt corn on a farm is crucial to ensure that European corn borer or Corn Rootworms do not develop resistance to the Bt proteins. These refuge acres ensure that rare resistant insects have a population of susceptible insects to mate with thus diluting any resistance in their offspring. The "Respect the Refuge" campaign has two major elements. The first was a postcard distribution to NCGA membership that highlighted the top reasons for refuge compliance. In addition, NCGA worked with others in the Bt corn industry to place billboards in several states promoting the importance of a refuge. Interstate and highway drivers in certain parts of Iowa, Illinois, Minnesota, South Dakota, Missouri, Tennessee and Mississippi will be seeing them this winter. Leading scientists agree the resistance threat is real and planting a proper refuge will help ensure the longevity of the current products available. Loss of the technology to insect resistance could cost U.S. farmers billions of dollars through yield reduction and increased pesticide use. Also in December, NCGA updated its popular “Know Before You Grow” database, which the association maintains to help growers realize potential export markets for their crops. The database lists seed products and their approval status by Japan and the European Union. Of 24 registered hybrid traits covered in the database, 22 have been approved in Japan, 10 for food and feed use in the EU, and 13 for feed use in the EU. The database lists nearly 4,000 seed products based on these biotech traits.

Ethanol and Energy
NCGA and its allies celebrated a major victory on December 19 when President Bush signed the Energy Independence and Security Act, expanding the renewable fuels standard to require 15 billion gallons of corn ethanol production by 2015 – perfectly in line with NCGA’s vision. Other provisions in the bill include: • Requirement of 9 billion gallons of renewable fuels in 2008, progressively increasing to the 36 billion-gallon requirement by 2022, including a 1 billiongallon mandate for biodiesel; • Increases in the Corporate Average Fuel Economy (CAFE) standards to 35 miles per gallon by 2020, the first congressional increase in 32 years; • Studies on the feasibility of ethanol pipelines, higher blend levels and the optimization of flex fuel vehicles. During this same period, NCGA was forced to respond to numerous attacks on corn ethanol, the most egregious of which was a statement by Jean Ziegler of the United Nations, who said that using food crops for biofuels are a “crime against humanity.” “Genocide is crime against humanity. War crimes are a crime against humanity. Any act of persecution to a large scale of people is a crime against humanity. Finding solutions to a global energy problem while continuing to provide food to the world is not a crime against humanity,” said NCGA CEO Rick Tolman. Tolman said if Ziegler were citing facts on biofuels and corn he would know the United States is harvesting more than enough to help meet the needs of global hunger, offset petroleum use, provide a nutritious feed for livestock and have more than an adequate corn supply on hand. “It is a travesty when an official makes public statements that are so irresponsible, so inaccurate and so inappropriately damning,” he added. “The statements ‘crime against humanity’ and ‘catastrophe of the massacre (by) hunger in the world’ are not to be used lightly or in such an irresponsible manner. Hunger is not something to trifle with and those in positions of responsibility need to be accountable in their statements.”

2 Corn Grower Update: A newsletter from NCGA

In October, a letter from NCGA President Ron Litterer led the letters page of the Wall Street Journal after an editorial in the paper attacked ethanol’s water usage. The editorial, Litterer wrote, “obfuscates the need for domestic energy solutions by torturing data and attempting to stir up those ugly political fights it warns about. … Growers are on the brink of delivering the largest U.S. corn crop on record—providing enough corn for food, fuel, feed and fiber. And they’re doing it responsibly.”

program provided in the farm bill approved by the House. With additional refinements, the ACRE would offer corn growers the choice of an even more viable risk management tool for a rapidly changing agriculture economy. NCGA urges Congress to adopt a strong “NCGA will continue to revenue-based safety net program in the fight for a farm bill that will 2008 Farm Bill that provides farmers strengthen the agricultural better targeted and more reliable safety net and create job and protection against crop losses and falling commodity prices. growth opportunities for “NCGA will continue to fight for a farm bill that will strengthen the agricultural safety net and create job and growth opportunities for rural America,” said David Gillen, chair of NCGA’s Public Policy Action Team.

Farm and Rural Development
In the first quarter of the fiscal year, NCGA’s grower leaders and staff worked hard to ensure its voice was heard in all key discussions related to the renewal of the farm bill. While the farm bill has yet to pass out of Congress and make its way to the president’s desk, our voice has not only been heard but is reflected in the House and Senate legislation being discussed in conference committee. NCGA is advocating a market-based revenue protection program so that producers would have access to flexible supports that move up with rising commodity prices and input costs. In an era of increased demand for corn and other feed grains, revenue-based programs target support more efficiently than current programs. The organization called on its members and other interested parties to reach out to their senators especially, and express support for a revenue program option. On Dec. 14, the Senate passed the Food and Energy Security Act of 2007, marking another positive step forward for the optional revenuebased counter cyclical program. The adoption of the state-based Average Crop Revenue Election (ACRE) program in the comprehensive bill’s Commodity Title incorporates a more market-oriented farm safety net program that better meets the needs of producers in today’s economic environment. ACRE is scheduled to be available as an option beginning 2010 and is designed to deliver more effective support for producers who experience revenue shortfalls. Although the ACRE is tied to base acres and is not integrated with federal crop insurance, the optional program’s expected variable support per acre is more stable across high and low prices than payments from current programs or the national revenue counter-cyclical

rural America.”

David Gillen Chairman NCGA Public Policy Action Team

Research and Business Development
NCGA research representatives met with representatives from the U.S. Department of Agriculture and researchers from the landgrant universities to assess the proposed changes to the structure of USDA’s research arms – the Agricultural Research Service (ARS) and the Cooperative State Research, Education, and Extension Service (CSREES). Currently, the Research and Business Development Action Team supports increasing the efficiency, inter- and intra-agency communication, stability and long term increases in agricultural research resources. However, the House of Representatives’ version of the farm bill supports the creation of six new oversight positions to review all research activities within the USDA, a possible increase in bureaucracy and decrease in efficiency. The Senate version holds some promise and caveats as well. NCGA supports the creation of a National Institute of Food and Agriculture (NIFA), but the Senate does so at the expense of any guaranteed funding to agricultural research and replaces half of the current USDA research organization, CSREES with NIFA. NCGA hopes to see better solutions to the decline in agricultural research in during the conference sessions of the farm bill. Divergence, a research company in which NCGA has invested, reported having a successful year in developing chemical and transgenic nematode control in agricultural systems. In addition to their work in corn, soy Corn Grower Update: A newsletter from NCGA 3

At its regular meeting of action teams and committees in November, NCGA took time out for a reception celebrating the passage of the Water Resources Development Act of 2007. Joining NCGA President Ron Litterer, left, were U.S. Rep. Jerry Costello of Illinois, center, and Art Bunting, president of the Illinois Corn Growers Association.

and other plant systems, Divergence was awarded a grant from the National Institute of Heath to continue parasitic control research in animal systems. Likewise, Divergence was highlighted as one of the major technology transfer success stories produced from the research done under the National Plant Genome Initiative (NPGI). The NPGI has seen tremendous growth since NCGA helped create it 10 years ago and, through the National Science Foundation, will be announcing the draft sequence of the corn genome this spring. An announcement of the corn genome sequencing will coincide with the 50th Maize Genetics meeting being held in March in Washington, D.C. NCGA has been working with the oversight committees organizing the event for a kickoff reception at the Smithsonian Natural History Museum, honoring some of the major scientific and political contributors to plant genetics.

These high yields were reflective of recordbreaking production in 2007, as harvest-time reports brought out some significant numbers. Production in 2007 hit an all-time high of 13.1 billion bushels from a harvested 86.5 million acres, for a yield of 151.1 bushels per acre, the USDA reported. Moving these record crops to market will become easier, thanks to congressional action on the 2007 Water Resources Development Act (WRDA), which was passed by Congress, vetoed by President Bush, and then passed by Congress again in override votes in November. “When it comes to this issue, nothing has been easy,” said NCGA President Ron Litterer. “After almost two decades of work by corn growers, millions of dollars spent on studies, seven years of waiting on the legislative process, a presidential veto and then a veto override by the U.S. Congress, we finally have achieved authorization to modernize seven locks on the Upper Mississippi River System. Once again, our grower members demonstrated their influence and commitment to the Water Resources Development Act by contacting their members of Congress and urging them to overturn the president’s veto.” Overturning the president’s veto is just a permission slip to seek funding through the annual appropriations process. For several years, NCGA has worked to secure preconstruction dollars for the Upper Mississippi River System projects, but the real work now begins with a full-court press to obtain construction dollars through the annual appropriations process, Litterer said.

Production and Stewardship
In December, NCGA released the results of its annual National Corn Yield Contest. Staff were faced with an extraordinary record number of entries – 4,932, which is 56 percent more than in 2006. And the yields themselves were extraordinary. Two dozen entries recorded yields of 300 bushels or more per acre, and the 27 national winners in nine production categories had verified yields averaging more than 298 bushels per acre, compared to the estimated national average of 151.1 bushels per acre. While there is no overall winner in the contest due to differences in categories, the top yield of 385.5861 was recorded by David K. Hula of Charles City, Va. The 529 national and state winners will be recognized at the 2008 Commodity Classic and are featured in the mid-February issue of Farm Journal.

NATIONAL CORN

YIELD CONTEST

4 Corn Grower Update: A newsletter from the NCGA

Trade
Passage and signing of the Peru Trade Promotion Agreement was another victory for corn growers in late 2007. This success came about, in part, due to the effective grassroots of NCGA. In October, prior to the passage of the agreement legislation, NCGA joined 50 organizations representing U.S. farmers, ranchers, meat processors, food producers and exporters, to urge congressional approval. “Removing trade barriers between the U.S. and Peru will create important new export opportunities for corn growers,” said NCGA President Ron Litterer. “This agreement will allow the United States to compete on a level playing with Peru’s other trading partners.” The PTPA provides reciprocal access for American farmers and ranchers, as many of Peru’s agricultural products have little or no tariffs upon entry into the United States through the Andean Trade Preference Act. Under the act, corn growers could expect a penny-per-bushel increase in price. In addition, the increased demand in beef, pork and poultry converted into bushels of corn would likely mean another one-half cent. The Peru trade agreement would also improve U.S. corn growers’ ability to compete with regional competition such as Argentina. In October, NCGA joined with farm groups representing a dozen agricultural commodities to ask President Bush to push for trade reform. The letter to the president stated that proposed cuts in farm programs need to be balanced with improved trade opportunities for U.S. crops, including corn. The groups asked the president to correct what they called a “severe imbalance” between proposed cuts in federal support for agriculture and weak or non-specific concessions by trade partners to remove barriers to their markets. “The level of ambition in cutting tradedistorting domestic support must be commensurate with the level of ambition in obtaining access to both developed and developing country markets,” the letter said. “Unfortunately, the current text for the agriculture negotiations proposes to further reduce U.S. domestic support well below the U.S. offer of October 2005, while the ranges for overall tariff cuts are set lower than those proposed by the United States. Even more troubling, the current agriculture text does

not address key measures that could seriously erode any market access gains.” Without significant improvements in the current World Trade Organization negotiations, the groups said, there is “little hope of achieving balance between what the U.S. is being asked to give up in reduced domestic support and what our trading partners are offering on increased market access.” The groups cautioned the president that correcting the current flaws in the U.S. position was essential for continued support by agriculture for a new trade agreement. Considerable concern has arisen regarding the ability of American farmers to access the necessary supply of inputs, including fertilizer. One of the issues raised in regard to this supply is the current antidumping orders on solid urea from Russia and Ukraine, given the rapidly growing demand for agricultural inputs. NCGA began work on the issue of Russian urea and the tariff this past year.

“Removing trade barriers between the U.S. and Peru will create important new export opportunities for corn growers. This agreement will allow the United States to compete on a level playing with Peru’s other trading partners.”
Ron Litterer President, NCGA

In late November, the U.S. International Trade Commission (ITC) failed to allow new information to be reviewed for the record on the antidumping order. The court is unlikely to now overturn the ITC’s decision but there is always a possibility. White & Case, which represents Russian fertilizer manufacturers, plans to submit comments to the U.S. Court of International Trade opposing the ITC’s decision. However, in late December, the Department of Commerce issued a preliminary decision on a new shipper review, brought by EuroChem, a Russian exporter, which stated a 0.00% dumping margin for the latter half of 2006. A final decision is expected in May 2008.

Membership
As the presidential election season approached the first set of primaries and caucuses, NCGA debuted an informational program designed to educate the candidates about issues of importance to growers – and to involve growers in the political process by providing them the information they need to make an informed choice. Called the Targeted Agricultural Education Program (TAEP), the program’s main feature is a Web site section that provides information on where the candidates stand on five issue areas Corn Grower Update: A newsletter from NCGA 5

important to growers – trade, the farm bill, ethanol and renewable fuels and estate and capital gains taxes. It also includes information about where the NCGA stands on these issues. For more information, visit www.ncga. com/vote2008. Also in late 2007, NCGA and BASF Corp. joined forces to award college scholarships to deserving undergraduate and graduate students pursuing a degree in an agriculturerelated field. “A solid education will help tomorrow’s agricultural leaders excel in a world of increased technological and scientific sophistication,” said Matt Gibson, chair of the

NCGA’s Grower Services Action Team and a farmer from Morocco, Ind. “We’re proud to support this program to help young growers get the academic background they need to advance our industry.” The NCGA Academic Excellence in Agriculture Scholarship Program will be conducted annually, awarding five (5) $1,000 one-year scholarships to deserving, qualified second-year undergraduate students (or later) or graduate students enrolled in an agriculture, agribusiness, or agriculture vocation program at a 2-year or 4-year program of study at an accredited junior college, college or university. Winners will be recognized at the 2008 Commodity Classic.

REGISTER NOW FOR TOP NCGA EVENTS
Two upcoming meetings will provide NCGA members and others with the opportunity to network, learn and share ideas – and have a little fun in the process. The 2008 Commodity Classic is right around the corner, Feb. 28-March 1, in Nashville, Tenn. Several educational and marketing sessions and a trade show await corn, soybean and wheat growers at this annual convention and trade show of NCGA, the American Soybean Association (ASA) and the National Association of Wheat Growers (NAWG). Of special interest for NCGA members will be the issues briefing, open forum and state caucuses on Wednesday, Feb. 27, the CornPAC Auction that night, and Corn Congress sessions on Thursday, Feb. 28 and Saturday, March 1. An enlightening General Session, learning sessions, large trade show and family fun at the Evening of Entertainment round out this annual favorite. For more information, visit www. commodityclassic.com. Also, NCGA has been gearing up for the biennial Corn Utilization and Technology Conference (CUTC), June 2-4 in Kansas City. With a theme of “Corn: New Horizons,” the conference will emphasize the importance of identifying the next generation of technologies to sustain corn as nature’s feedstock of the future. CUTC has been expanded to include new topics that will be of value to many audiences, such as ethanol producers and livestock interests. CUTC has been increasingly recognized as an important industry networking event. Attendees will have the chance to meet with hundreds of valuable business contacts, identify potential new customers, and learn how new technologies will enhance the value of corn. CUTC will also offer exhibitors presenting new technologies and equipment, posters demonstrating cutting-edge technology, and a golf tournament at Tiffany Greens, one of the top courses in the state. Visit www.corntechconf.org to register or for more information.

6 Corn Grower Update: A newsletter from NCGA

NCGA FY 2008 BUDGET

NCGA FY 2008 REVENUE SOURCES
Government Grants

2%
Interest

1%
CUTC Corn Yield Contest Commodity Classic

2%

Memberships

7%

7%

Industry

10%

3%

Checkoff Revenue

68%

5-YEAR FINANCIAL STATEMENT COMPARISON
10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0

2003

2004
Total Liabilities

2005
Equity

2006
Total Revenue

2007
Total Expense

Total Assets

Corn Grower Update: A newsletter from NCGA 7

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“The media is full of stories about a pending corn shortage and the impact higher corn prices were having on the consumer’s pocketbook,” said NCGA President Ron Litterer. “In the midst of the largest corn harvest in history, we wanted to take a moment to highlight corn growers' role in meeting demands for both our food and feed needs, as well as helping our nation become more energy independent.” The Image of Corn campaign generated a total of nearly 50 million media impressions. As part of that a radio spot with actor James Garner earned approximately 32 million media impressions across the country, including airing about 150 times in the top 10 media markets. In addition, a holiday news release detailing how America stacks up in terms of food prices earned an additional 17.7 million media hits, including a prime spot in New York’s Times Square at four times over the Christmas holiday. And Internet elements of the campaign reached more than 75,500 individuals with campaign messages.

‘Image of Corn’ Campaign Celebrates Farming, Educates Consumers

CONTACT NCGA: (636) 733-9004 - FAX (636) 733-9005 - corninfo@ncga.com - www.ncga.com

2007 Photo Contest Winner a Three-Peat
By its exuberant portrayal of farm family life, a nontraditional top photo helped amateur shutterbug Peggy Bellar take home the top award in NCGA’s annual photo contest for the third year in a row. Bellar’s photo shows her sons, Luke and Ben, with puppies at the family farm, in Howard, Kan.