By DAVE BLOWER JR.
Farm World Editor

WASHINGTON, D.C. — To combat rising feed costs for livestock producers, the USDA announced a plan last week to open specific Conservation Reserve Program (CRP) acres to haying and grazing.
The National Cattlemen’s Beef Assoc. (NCBA), though, opposes the plan.

USDA Secretary Ed Schafer has authorized more than 24 million acres enrolled in CRP to be eligible for this critical feed-use program. This land is from about 330,000 contracts. USDA estimated the plan will make available up to 18 million tons of forage worth about $1.2 billion.

“Recently we’ve seen increased demand for commodities like corn and wheat, and that has contributed to record feed prices,” Schafer said during a press conference in Washington, D.C. last week. “The livestock industry in particular has felt the effects of tightened supplies.

“This authorization does not constitute an early opt-out of CRP contracts. However, it does allow producers nationwide to either hay CRP acres once or allow livestock grazing, either for their own use or to help their neighbors.”

Land eligible for the critical feed-use program may not be hayed or grazed until after the end of the primary nesting season. Also, some of the eligible land or forage of the land must be reserved for wildlife and any land that is used under this authority must have a conservation plan, said the USDA.

In many cases, the removal of some of the grass cover will increase the diversity of the stand and provide long-term benefits for wildlife. The most environmentally sensitive land enrolled in CRP will not be eligible. The land will be subject to a site inspection to ensure compliance with the conservation plan.

“Cattlemen appreciate the fact that USDA recognizes the hard times we are facing in the livestock industry, and wants to provide some relief through this CRP plan,” said Colin Woodall, NCBA executive director of legislative affairs. “But this is just the wrong solution. Any CRP relief plan must maintain a level playing field for all farmers and ranchers, and put land back into production in a meaningful way.”

He explained that the plan fails to provide any significant, long-term relief for the nation’s dwindling supply of agricultural land and feed sources.

“Livestock producers cannot use this land for any haying or grazing until the primary nesting season ends, and then they have to be finished with any forage use by Nov. 10,” Woodall said.

“In most cases that’s a very limited window of opportunity, and it does not provide the kind of significant relief this industry needs. It’s a nice gesture by USDA, but unfortunately it doesn’t amount to much more than that.”

Schafer disagreed. “It will significantly increase the amount of feed available to the livestock industry while still maintaining CRP’s environmental benefits,” he explained. “In fact there are many circumstances where removing some of the grass cover will actually help increase wildlife diversity. It will also provide long-term benefits for wildlife in the area.”

With this plan, USDA said no rental payment reduction will be assessed on contracts being utilized for this use. However, a $75 fee will be charged to process the required contract modification, Schafer added.

“This is the first time we’ve taken this approach to allowing forage to be harvested from CRP,” said John Johnson, Farm Service Agency (FSA) deputy administrator for Farm Programs.

“This is different than emergency haying and grazing; this is different than managed haying and grazing. We’re using a separate authority (Schafer) has for contract modification to do this. And so we’ve never run a program like this where there wasn’t a rental reduction and you simply had the $75 administrative cost to pay.
“And so we expect to see much higher participation under this program than what has been previously experienced under either emergency haying and grazing or managed haying and grazing. But it’s a little bit hard for us to project exactly how many people take advantage of it.

“We’re hoping that we’ll get much better utilization of this by giving advanced notice and by taking this different approach under the Secretary’s authority for contract modification with only a $75 administrative fee.”

Signup for interested CRP participants started on June 2 at Farm Service Agency (FSA) offices.

The USDA said this modification for critical feed use is only for 2008. All forage use must be completed no later than Nov. 10.
NCBA supports managed haying and grazing of CRP acres during times of a shortage for hay and livestock forage due to drought or other emergency conditions, but only with a corresponding reduction in CRP payments.

While the economic conditions facing many cattle producers could qualify as an emergency, USDA’s plan does not require a payment reduction in areas where these additional uses will be allowed, Woodall said. Without such a reduction, livestock producers raising or obtaining their hay and forage from non-CRP land are placed at an unfair disadvantage.

“NCBA policy favors conservation programs that make every effort to keep agricultural land in production,” Woodall explained. “To do that, USDA needs to do more than just tweak CRP around the edges. The cattle industry is facing historic economic difficulty as a result of the federal government’s competing policy goals. Tremendous pressure is being placed on our rapidly shrinking supply of agricultural land, and today’s action just temporarily sidesteps the problem.”

“The most environmentally sensitive lands enrolled in CRP will not be eligible for this program, Schafer said. “Wetlands and filter strips, for example, cannot be enrolled.

Under CRP, farmers and ranchers enroll eligible land in 10- to 15-year contracts with USDA’s Commodity Credit Corp. (CCC). FSA administers CRP on behalf of CCC. Participants plant appropriate cover such as grasses and trees in crop fields and along streams.
These plantings are intended to prevent soil and nutrients from running into regional waterways and affecting water quality. The long-term vegetative cover may also improve wildlife habitat and soil quality.

Schafer admitted that this plan may not help all livestock producers.

“We recognize the cost of feed have gone up, especially in the poultry area as well, and in hogs,” he said. “And the thing that we’ve noted here is, we’re going to do everything we can to help. This is something we can do.

“I would also point out that in the hog industry specifically we’ve purchased $50 million worth of hogs and whole hog products from them as they have started to reduce their sow herds, provide a better economic balance with the herds that are out there. And we’ve purchased that meat so that we can pull it through. This will also, as we look at this hay and forage coming into the feed supply, should reduce the use of grain for further livestock actual use.”