CURRF) «t PERIODICAL!r r ’ /.RTWfMT

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INSIDE•People and Places •A Look At the IOMSA’s

June 2003 Convention •New Cenex Fairmont Plant On Target •Brazil Switches Cotton For Soybeans •Key Issues Facing Agriculture

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TRAMCO, INC. • 1020 East 19th Street Wichita, KS 67214 • Phone: 316-264-4604 Fax: 316-264-7965 • E-mail: sales@tramcoinc.com Web Site: www.tramcoinc.comEURO-TRAMCO, B.V. • Space shuttle 8 G 3824 ML Amersfoort • The Netherlands Phone:+31 (0)334-567033 • Fax:+31 (0)334-558149 E-mail: hans@tramco-europe.comTRAMCO-EUROPE LTD • 8 Cannon Street Hull, England HU2 OAD • Phone:+44(0) 1482-328771 Fax: +44(0) 1482-327841 Email: tramco@tramco-europe.karoo.co.uk

Seed Oil ProductionToday's Demand for Nutritional Oils... ’ *

requires natural processing steps. That is why th§ simple & safe mechanical approach is the choice for thdse con­cerned about high temperatures or chemicals altering natural characteristics of extracted oil. " *

The Expeller® Press...is designed by Anderson International to continuously & efficiently remove the oil. Experience is the key ingredi­ent when choosing the right mechanical system for producing a Premium Oil.

And rson International Corp...has been producing Expeller® Presses for the mechanical recovery of oils from a variety of seeds, beans and nuts since 1902.

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785-527-5641 Carver, Inc........................................... 28

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IOMSA OFFICERSPRESIDENT JE F F ROGERSAg Processing

Omaha, N E

1ST VICE PRESIDENT

JAKE B E N T LE Y

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2ND VICE PRESIDENT CARL PARKERAg Processing

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Tramco.................................................... 2316-264-4604

3E Company......................................... 131-800-333-5722

Woodex..................................................27207-371-2210

PAULA SMITH KOLMAREDITOR/PUBLISHER

www.oilm illgazetteer.com

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UPCOMING EVENTS...2003 annual IOMSA Convention, June 23-26, at the Sandestin Hilton in Destin,Florida. Pre-reg form in this issue and at oilmillgazetteer. com.

IOMSA MEMBERSHIP FORM...Join IOMSA and receive discounts at the summer conventions plus a subscription to the Oil Mill Gazetteer. Complete and send the form in this issue or at oilmillgazetteer. com

On The Cover...Cenex Harvest States is in the process of completing construction on its new soybean crushing facility in Fairmont, Minnesota. See pages 12-13 for details on the plant and construction projects.

4 OIL MILL GAZETTEER / March 2003

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March 2003 / OIL MILL GAZETTEER 5

Profit. It’s what it’s all about. That’s why the IMPCO Decorticator/Separator is designed to obtain results. Providing the highest capacity per foot of width in the oilseed preparation industry, we have engineered our system with your success in mind. Energy effi­cient and virtually maintenance free, our systems keep your oper­ating cost to a bare mini­mum while maximizing your profits. In providing the lowest

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6 OIL MILL GAZETTEER / March 2003

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Additional Worldwide OfficesBrazilIntecnialTel.: +55 54 520.8100

Honduras Hernan ParedesTel.:+504 550.8374

Argentina Alejandro CitterioTel.:+54 341.506.1460

ChinaWuhan OfficeTel.:+86 27 8462.8068

Beijing OfficeTel.:+86 10 8360.7490

RussiaEuropa Crown Moscow OfficeTel.:+7 095 198.7309

Crown Iron customers tend to stay Crown Iron customers. We'd like to believe it's because we're better than anyone else at assur­ing a solid return on their oilseed processing investments.

At Crown Iron, we make more than just the world's largest capacity extraction systems.

We make custom solutions for all oilseed processing challenges. You may need the highest capacity system or an economical pilot plant. Whatever your re­quirements may be, you can depend on our worldwide engineering and manufacturing capabilities for cost competitive, innovative production answers.

Contact Crown Iron Works to speak with a Crown engineering specialist

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Crown Iron Works Company Minneapolis, MN U.S.A. www.crow niron. com +1 651.639.8900

Europa Crown Limited East Yorkshire, England www.europacrown.com +44 1482.640.099

“ People and PlacesThe International Oil Mill Superintendents Association welcomes membership applications from Jim Willits, Alfa Laval, Smithville, Missouri; Bo Hobbs, American International, Dyersburg, Tennessee; Robert Williams, Kice Industries, Cedar Rapids, Iowa; John Jefferson, Planters Cotton Oil Mill, Pine Bluff, Arkansas; and Terry Dolesal, Hupp Electric Motors, Cedar Rapids, Iowa.

IQPC Canada is pleased to present Canadian Soyfood Congress 2003 an opportunity for you to explore new market opportunities and quiz some of the foremost industry experts on topics such as: how you can derive the most value from the soy industry at home and abroad; leveraging new technology; new health claims and regulations; and how to market for growth. The congress will be held April 28-29 at the Holiday Inn in Toronto, Ontario, Canada. For information go to www.IQPC-canada.com or call 1 -800-882-8684.

Walter Farr, president of Farr Research International, Olive Branch, Mississippi, reports St Jude Research Hospital in Memphis, Tennessee, is testing Farr Gold skin care conditioners for bed-ridden and terminally ill children. The Farr Golf skin conditioner prevents dry skin and also reduces or prevents bed sores, muscular pain. The Farr Gold product line can be seen at www.emuoil-skincare.com.

Dr. Roy Cantrell, vice president for agricultural research for Cotton Inc. is the recipient of the 2002 Cotton Genetics Research Awardgiven by the U.S. Commercial Cotton Breeders. The award has been presented in the past to scientists performing outstanding research in cotton genetics. In the last few years. Dr. Cantrell has been recognized as the driving force in cotton genetics.

Trinity Consultants reports the Environmental Protection Agency hasproposed a clarification to NSPS regarding volatile organic liquid storage vessels. In the proposal, ‘storage vessel’ is defined as “each tank, reservoir, or container used for the storage of volatile organic liquids.” EPA issued a conflicting interpretive memo about whether this includes intermediate tanks within a process that are not used for the storage of raw materials. In addition, the EPA has proposed to amend the NSPS to exempt storage vessels that are subject to the National Emission Standards for Hazardous Air Pollutants which is 40 CFR 63 Subpart GGGG.

The Food Protein Research and Development Center of Texas A&MUniversity, College Station is conducting an Oilseed Workshop, April 22 through April 24, 2003. This course is planned as a fundamental course in processing a variety of oilseeds. This year’s course will include: soyt ns, canola, safflower, sunflower, cottonseed, and corn germ. Each. seed will be discussed in a classroom setting prior to pilot plant demonstrations of processing. In the pilot plant demonstration portion of the iass, each seed will be prepared for extraction using one or more;; jparation method of today’s industry. For details contact Wilson Johns at 979-845-2741.

The N;: >nal Sunflower Association has elected Michael Clemens,Wimbk )n, North Dakota as the association president for the nextterm. Jc i Riley remains first vice president and Dean Sonnenberg hasbeen el ed as the new second vice president. Mr. Clemens joinedthe NS n 1999 and is a past president of the North Dakota OilseedCouncil

Through nil one-day seminars will be held around the country on understa ing, interpreting and complying with the rules and regulations of workf e safety and OSHA compliance. The course includes vital informati ;uch as: the latest changes in OSHA rules and regulations, making s< se of OSHA’s language, how to assess your workplace for poten i hazards, and how to spot potential “red fiags.” The fee is $249. 'ib egister or find out more details go to www.pryor.com or call 1-80C >6-2998.

The China and International Soy Conference & Exhibition held in November 2002 in Beijing drew 150 delegates from overseas and 350 from China. Soybean producers and corporations from the United States, Brazil and India sponsored the event. China consumes 6.5 million metric tons of soybeans/products each year making it the world’s largest user of soy. Two special forums at the CISCE in Beijing were 1) global interests in China’s markets and soy industry by country or regions; and 2) strategies to boost the Chinese soy industry and collaborations with global partners. Chinese recent membership in the World Trade Organization will help reduce market restrictions, plus quotas for soybeans and other crops will disappear gradually. The American Soybean Association projects by 2005 there should be an open vegetable oil market directly affecting world oil prices.

A group in the United Kingdom recently published a report on whether soy-based infant formulas pose a risk to infants and whether there are health implications for other groups of people from dietary phytoestrogens. Though the report comes to no major conclusion it does recommend that soy-based infant formulae should only be given to infants for clinical reasons, and that doctors and other healthcare workers are made aware of the potential interactions between soy-derived phytoestrogens and the thyroid function.

According to a new survey sponsored by the Asian Food Information Center, most Asian consumers are not strongly opposed to genetically modified foods. In fact 66 per cent believed they would directly benefit from food biotechnology over the next five years and 61 per cent believe they had consumed biotech foods recently.

Soy-based tofu can now be found in a new product called Panino Tofu Schnitzel. Tofu Schnitzel was created by Germany-based manufacturer Nagel GmbH. The company also makes Tofu Oriental and Tofu Madagaskar.

Destin-Fort Walton Beach Airport

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Come To Destin This Summerfor the International Oil Mill Superintendents Association annual convention June23-26 on the beautiful Gulf shores of Florida. The meeting has a two-day technical agenda on fune 25-26 and several social activities as part o f the overall convention festivities. Next issues will carry more details. Pre-registration form is on page 20 .10 OIL MILL GAZETTEER / March 2003

Technical Program Agenda109th Annual IOMSA Convention June 25-26

Wednesday, June 257:45 a m NFPA 36 Update

Mickey Lay, VP - Site Manager, Bunge Milling

The Future of OSHA, 2003 and BeyondSkip Stevenson, Director of Safety, Bunge Foods

Overview of the North America Gas MarketMark Tillwick, Director of Marketing, BP Gas & Power

Vegetable Oil Refining UpdateBlake Hendrix, VP Marketing & Sales, I PH LLC

World Overview of Oilseeds & ProductsJohn Baize, President, John C. Baize & Associates

Thursday, June 267:30 a m The Workforce Ain’t What It Used To Be

Ray Weinberg, Principal, Silverstone Group

The New Homeland Security Threat and Its Implications For U.S. Oilseed Processing Industry

Dave Ailor, Dir. of Regulatory Affairs, NOPA

Fifty-Six Years of Oilseed Processing & Safety in 40 MinutesRaymond Rush

Vendors Forum

and Its Implications For U.S. Oilseed Processing Industry

The September 11,2001, terrorist attacks on New York City and Washington,D.C. and the expectation of future terrorist actions of some nature have led U.S. government agencies, state and local governments, and the private sector to take up the challenge of protecting our nation’s critical infrastructures. The food industry, by virtue of its critical role in producing safe and wholesome foods for American consumers, is one focus of this attention. Other critical infrastructures include telecommunications, energy, banking and finance, water systems, government operations, and emergency services.Congress responded to the challenge in May 2002 by passing H.R. 3448,

the “Public Health Security and Bioterrorism Preparedness Act of 2002” . Title III of the bill, was signed into law by the President on June 12, 2002 (PL107-188).The food industry, including the oilseed processing industry, has also

been very active in meeting the challenge. This paper will focus on the new homeland security threat, the principal actions taken to date by government and industry to address it, and the implications of these actions for the oilseed processing industry.

A u th o r... Mr. Ailor currently serves as director o f Regulatory Affairs for two Washington D. C. -based industry trade associations — the American Coke and Coal Chemicals Institute and the National Oilseed Processors Association .

March 2003 / OIL MILL GAZETTEER 11

New Oilseed Plant In Fairmont MN On TargetIn the year since ground was broken in March of 2002 for Cenex Harvest-States’ second soybean crushing facility much

contruction, and equipment installation has been completed and the anticipated start-up date for the plant is on schedule for October 2003.

When completed, this plant will crush approximately 110,000 bushels per day - doubling the current crush output by Harvest States supplying soybean meal to livestock producers and soybean oil for its oilseed refinery facility in Mankato, Minnesota.Todd and Sargent, Ames, Iowa-based contractor for the plant, reports building storage facilities for soybeans will have a

capacity of 1.32 million bushels and three silos for soybean meal storage of 6,564 tons. The $60 million facility has two truck receiving systems and two truck/rail soybean meal loadout systems rated at 300 tons per hour.

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12 OIL MILL GAZETTEER / March 2003

Situated on 26 acres of a larger 200-acre site, the Fairmont plant will utilize 38 full-time positions when it opens and will be running at full capacity within 30 days of start-up.According to Cenex, key contributors to the overall positive economic impact of the new Fairmont plant include new state and local taxes, as well as expanded access to soy meal for hog and livestock farmers and an anticipated per-bushel increase to the soybean basis price for local producers and their co-ops.

“Our vision to add value for our member-owners has always included investing in business opportunities that connect producers further along the grain-based food chain,” said John D. Johnson, president and chief executive officer, CHS Cooperatives. “We are in a better position now to realize that vision for our farmers and local co-op members than when we originally announced the expansion in 1998.Over the past several years, our integrated system has continually

strengthened its links from origination through handling and processing, all the way to the end customer.“Today, we have soybean-based products going all the way to the

supermarket shelves and on to tonight’s dinner table. We are more confident than ever in our ability to bring value to our members through further expansion in the soybean crushing business,” added Mr. Johnson.Roskamp Champion is providing the crushing equipment for the

plant including flaking, cracking, hammer, and pellet mills. With a history of helping build the Mankato facility, Cenex and Roskamp have a standing relationship. “We have had a strong relationship with Cenex Harvest States in the past and are pleased to be part of this project,” says Jim Hughes, Roskamp Champion general manager. “We know their quality standards and our equipment will help them meet their goals.”An estimated 17,000 cubic yards of concrete will ultimately be

used to construct the new crushing plant. At approximately $80 per yard, that brings $1,360,000 spent locally.

The new oilseed processing plant under construction in Fairmont, Minnesota by Cenex Harvest States will add 110,000 bushels-per- day crushing capacity when complete in

| October 2003.

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March 2003 / OIL MILL GAZETTEER 13

Biodiesel Fuel Picks Up SteamNew Distribution Site Crops Up In IowaA new biodiesel off-site loading facility located in Milford, Iowa

will enable petroleum distributors to offer soy biodiesel blends to farmers and other consumers in Iowa and Minnesota more efficiently. Cenex, a division of CHS Cooperatives, is a major farmer- owned petroleum entity based in North America, recently opened the new site in partnership with Soy Solutions.

According to the National Biodiesel Board in Jefferson City, Missouri, biodiesel is a cleaner burning alternative fuel produced from renewable resources, such as soybean oil produced

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by American farmers. It works in any diesel engine with few or no modifications, and it performs similarly to petroleum diesel. Studies show even low blends of biodiesel significantly enhance

the lubricity of petroleum diesel. Biodiesel has the added advantages of reducing emissions and contributing to national energy security.

“ Interest and demand for biodiesel blends continues to grow as consumers become more familiar with the product,” said Darin Hunhoff, the brand, products and marketing manager for Cenex Refined Fuels.

He continues, “Farm producers continue to show growing support of the product that many of them grow.”According to reports from Cenex, the move will give petroleum

distributors easy access to biodiesel for blending with the petroleum diesel they commonly pickup at the nearby pipeline terminals. Cenex currently works w ith ten other sim ilar term inals spread across key markets in the midwest, with several others in development.

Although the fuel can be used in its pure form, biodiesel is commonly blended with traditional petroleum diesel at rates ranging from two per cent (B2) to 20 per cent (B20).

“We strongly encourage all farmers to use at least a two per cent blend of biodiesel in all their diesel farm equipment,” said Bob Metz, president of the National Biodiesel Board. “By creating demand for B2 or higher, farmers can help make sure petroleum distributors are equipped to provide biodiesel to the public on a broad scale.”

Our check-off dollars helped develop the biodiesel industry, and now by using biodiesel ourselves we can help biodiesel continue the momentum of this successful commercial industry.”

MEMBERSHIP APPLICATION

International Oil Mill Superintendents AssociationDate: Fee per person: $70(domestic) $75 (foreign)I hereby make application for membership to the International Oil Mill Superintendents Association. If accepted I will abide by the Constitution and ByLaws and will promote the interests of the Association. My annual dues are enclosed or will be mailed shortly. I understand that membership includes a subscription to the Oil Mill Gazetteer.

Name

Company

Position

Address

Citv State Zip

Phone Fax

Email

Home Address With Zip Code

Mail this form and payment toe L in d a P auke rt, IO M SA, 1835 E d in b u rg h S tre e t, P ra ttv ille , A L 3 6 0 6 6

14 OIL MILL GAZETTEER / March 2003

EPA’s New Study On Biodiesel Emissions Shows Dramatic ResultsThe Environmental Protection Agency released at the end of

2002 a new comprehensive technical report of biodiesel emissions data that shows biodiesel use can reduce emissions of particulate matter by 47 per cent when compared to petroleum diesel in unmodified diesel engines.The report also verified a 67 per cent reduction in unburned

hydrocarbons and a 48 per cent reduction in carbon monoxide with pure biodiesel called B100.While the technical report, which is a compilation of 39 separate

scientific studies, is not an official rulemaking, the release of the report by EPA provides a government-validated reference for federal, state and local pollution strategies to reduce emissions that are harmful to human health and the environment.

Increasing interest in biodiesel spurred the EPA to prepare the report. A domestically produced alternative fuel that can be made from any fat or vegetable oil. Biodiesel works in any diesel engine with few or no modifications and has achieved a full national standard (ASTM D 6751).More than 250 vehicle fleets use B20, a mixture of 20 per cent

biodiesel with 80 per cent petro-diesel, commercially nationwide. Lower level biodiesel blends, such as B2 or B5, are used in countless pieces of equipment from tractors to over the road semi trucks, and hundreds of fuel distributors are now carrying biodiesel blends nationally."This EPA evaluation provides independent confirmation of the

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emissions benefits of biodiesel, which is important for air planners and customers who are evaluating the switch to biodiesel, ” said Joe Jobe, executive director of the National Biodiesel Board.

“We are pleased that the EPA numbers are actually a little higher than our own analysis, and that they show benefits can be obtained at any biodiesel concentration in a mostly linear fashion, as we have been advising. We are planning to adopt the EPA analysis so NBB and EPA will be giving out the same set of numbers,” said Mr. JobeDuring the last few years, biodiesel has enjoyed commercial

success as one of the most thoroughly tested fuels in the country.

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March 2003 / OIL MILL GAZETTEER 15

O ilseeds In Brazil

Brazil Expects To Switch More 2002/03 Cotton Acreage To Better-Priced Soybeans

The Agricultural Trade Office in Sao Paulo, Brazil estimates 2002- 2003 (August-July) cotton production at 784,400 metric tons, up three per cent from 2001-2002’s revised figure of 763,600 metric tons.The forecast is asumming that producers use adequate

technology, follow good crop management practices and regular weather conditions prevail during crop development and harvest. The planting season was somewhat delayed in Bahia and center- western states due to irregular rainfall, according to the ATO.

Cotton area for 2002-2003 is projected at 715,400 hectares, down almost four per cent from revised figure for previous crop, according to information provided by the National Supply Company of the Ministry of Agriculture, Livestock and Supply.

Major factors that contributed to reduce the Brazilian cotton area are:

(1) increased 2001-2002 world cotton carry-over stocks

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as a consequence of higher world production (21.4 million m etric tons) fo llow ed by a m odest increase in w orld consumption therefore depressing cotton prices both in international and domestic markets; and

(2) improved soybean vis-a-vis cotton prices as of July 2002, which led producers to increase soybean area as opposed to cotton area.Cotton producers in center-western states moved to some

extent to soybean production as it offers lower production costs, better current and future prices and higher marketing liquidity compared to cotton.

Outlook for 2003-2004The ATO forecasts Brazilian cotton area for 2003-2004

(August-July) at 751,000 hectares, up five per cent from the current estimate for 2002-2003, w ith an expectation of continued strengthened cotton prices both in international and domestic markets during 2003.The most apparent counterweight would be continued strong

soybean prices vis-a-vis cotton prices during 2003 and increased world cotton supply projections which together could potentially offset the upward trend in area planted to cotton.

Projected reduced world cotton carry over stocks for 2002-2003 of 8.3 million metric tons will also likely encourage cotton planting for the out-year, according to the ATO’s report. In

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addition, many producers currently base part of their planting intentions on export markets and, according to Post contacts, some contracts have already been set for 2003-2004.The steady devaluation of the local currency, the Real, contributes

to such forward contracting.Brazilian cotton production for 2003-2004 is projected at 823,000 metric tons, lint cotton, up five per cent from the current projection for the 2002-2003 crop, assuming favorable weather conditions during cotton planting, development and harvest. The sources note that out-year projections also incorporates factors such as the continued use of higher producing varieties and adequate technology applied to the crop.

ConsumptionATO/Sao Paulo revised the domestic cotton consumption

estimates for 2001-2002 and 2002-2003 to 835,000 and 830,000 metric tons, lint cotton, respectively, based on information provided by CONAB and post contacts.CONAB estimates domestic consumption for 2001 and 2002

at 865,000 and 815,000 metric tons, respectively. According to the Brazilian Textile Industry Association, domestic cotton consumption for calendar year 2001 is 872,000 metric tons. ABIT

has not released an estimate for domestic calendar-year 2002 cotton fiber consumption.Major factors that could explain lower cotton consumption by

textile mills for 2002 are the steady devaluation of the local currency meaning additional costs for the imported fiber; macroeconomics and some jitters as a result of the country’s presidential election in October 2002; and decreased consumer purchasing due to higher inflation rates not followed by salary re-adjustments.

TradeBrazilian cotton imports for 2001-2002 (August-July) are

estimated at 54,977 metric tons, lint cotton, based on official Brazilian Department of Foreign Trade information, down 76,261 metric tons compared to the same period for 2000-2001. .Cotton imports for 2002-2003 (August-July) are estimated by

the Brazil-based ATO at 31,785 metric tons. On the other hand, cotton exports the same period are estimated at 146,759 metric tons, and lint cotton, according to SECEX, is up 78,267 metric tons relative to the same period for 2000-2001.Cotton exports for 2002-2003 (August-December) are

estimated at 69,128 metric tons. The ATO notes that a significant part of 2002-2003 cotton exports are 2002 crop.

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Russia’s Oilseed Production Surges 30%Country Craves More Oilseed Products But Plants Are In Poor ConditionRussia’s total 2002 oilseeds production is estimated at 4.1 million

metric tons, almost a 30 per cent increase from the previous year, according to a report from the Foreign Agricultural Service of the USDA. All of this increase is due to sunflower seeds, which will exceed 88 per cent of total production of all oilseeds in Russia.

In 2002 sunflower seeds were planted on 4.1 million hectares, an increase of almost eight per cent over the previous year. Of the four million hectares sown, three million were for agribusinesses, one million in private farms, and less than one per cent in individual households.According to preliminary data of the State Statistical Committee

of the Russian Federation, total production of sunflower seeds

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reached 3.63 million metric tons, 35 per cent higher than in 2001, while the Ministry of Agriculture estimates output slightly lower. However, some specialists consider that the final clean weight after removal of excessive moisture and foreign materials will not be higher than 3.2 million metric tons.The high moisture content in the sunflower seeds is the result of

extremely bad conditions while harvesting, reports the FAS.In some regions harvesting went on until mid-December due to

incessant rains and snowfalls.Sources includes official Russian data in the PSD, but decreases

the extraction rate for meal and oil to reflect the high moisture content of the 2002 sunflower seed crop.

Foreign sources report decreases in the soybean production forecast from 370,000 metric tons to 360,000 metric tons in spite of increased area sown to soybeans. In the Russian Far East, where more than 85 per cent of soybeans are grown, part of the crop suffered from early snowfalls in mid-October, the usual time of harvesting.

Sources forecast consumption of sunflower seeds and soybeans at over 3.8 million metric tons, a 23 per cent increase from the previous year due to the bigger sunflower seed crop.Crush consumption is forecast to increase to 3.65 from 2.9

million metric tons, while food use and seed use will remain at almost the same level as the previous year.The forecast for crush is close to the present capacity of

domestic oil refining and crushing plants, which the Russian Federation estimates at 4.4 million metric tons. However, at least 15 per cent of this capacity is in poor condition.

Processed oilseed products (meal and vegetable oil products) demand is increasing, although consumption data is not available.

However, production of margarine and mayonnaise has been growing steadily since 1998.

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Good Returns On Cotton Spurs Pakistan Into

Another Good Cotton YearCotton acreage in Pakistan for 2003-

2004 is forecast at 2.9 million hectares, up ten per cent above the 2002-2003 area estimate.According to a report from the Foreign

Agricultural Sen/ice of the USDA higher returns for cotton relative to competing crops coupled with major problems farmers had marketing the current sugarcane crop - delayed payments from sugar mills, 50 per cent reduction in offered cane price - should encourage acreage diversion tow ards cotton production in the new year.Unlike sugarcane and rice (the alternate

crops to cotton), farmers received good returns on seed cotton in 2002-2003.Seed cotton farm-gate price on average

is up 30 per cent above the 2001 -2002 level, about 16 cents per pound.Pakistan’s cotton yield for 2002-2003 is

645 kilograms per hectare, 11 per cent above the 2001-2002 national average and 13 per cent higher than the five-year average yield.Exceptionally favorable weather during all

critical stages of production spurred higher output, the FAS reported.

Forecast yields in 2003-2004 are

International Oil M ill Superintendents Association

JEFF ROGERS In the IOMSA President’s CornerCarl Parker was elected Second Vice President at the Tan-

Tar-A convention by the regular membership. Carl will be responsible to plan and host the 2005 annual convention.The regular membership voted on Kansas City or an

alternate choice in the Mid-west as the convention location. In the upcoming year, there will be a considerable increase in the soybean crush capacity in the state of Minnesota. This capacity joins the existing soybean, sunflower and canola crushing plants in the states of South Dakota and North Dakota. As a result, the Board of Directors has chosen the Black Hills of South Dakota as the sight of the 2005 convention.

Rapid City, South Dakota will be the host location. The Rapid City airport accommodates most of the major airlines and costs are very reasonable.The exact dates of the convention have yet to be determined as negotiations

with the hotel are on going. One thing it for sure, within an easy commute of Rapid City is some of the most spectacular sights and scenery in the United States. The list includes the Badlands of South Dakota, Custer National Park,Deadwood, where Wild Bill Hick met his maker and the legend of the Dead Mans

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projected to stay the same based on:(a) Increased planting of virus-tolerant,(b) adequate fertilizer application, and(c) availability of better quality pesticides.

Cotton output in Pakistan for 2003-2004 is forecast at 1.85 million metric tons assuming an increase in area but no change in yields from last year.

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Key Issues Facing Agriculture

BY

JAMES MOSELEY, USDA Deputy Secretary Washington, DC

This is my firs t presentation o f the new year and it is good to be w ith the co tton industry at w ha t is an h istorical tim e fo r the nation .

Because we regard threats to the nation's food and fib e r supply system as real and because the econom ic consequences w o u ld d ire c tly im pact nationa l security, ag ricu ltu re is key to the nation 's in frastructu re and th e re fo re to Homeland Security.

President Bush said this: "From the m orn ing o f September 11th, 2001, to th is hour, America has been (engaged in) an unprecedented e ffo r t to defend our freedom and security. W e are f ig h tin g against te rro r w ith all ou r resources, and we are determ ined to w in ."

Now, w h a t does th is mean fo r us? It means the most im p o rta n t th in g w e can do to negate terrorism is to p reem pt i t ... and everyone, a t every step in the fa rm -to -tab le con tinuum , is responsible.

Everyone in ag ricu ltu re is our firs t line o f defense when it comes to the b io-security o f our farms, our p ro ce ss in g p la n ts , o u r labs and research facilities...every piece o f ou r p roduction system.

Secretary Anne Venem an and I are w o rk ing closely w ith secretary-designate Tom Ridge o f the new D epartm ent o f Hom eland Security. We m et w ith him the day a fte r he was sworn in to the W h ite House

O ffice o f Homeland Security in late 2001- and w h a t I leaned is - he understands.

As a g o v e rn o r o f an a g r ic u ltu ra l s ta te he comprehends the th re a t to Am erican agricu ltu re and he knows th a t hom eland security must have a bene fit beyond just th w a rtin g terrorism otherw ise the cost is never recovered.

T h e th ingsw e w ill do in homeland security is n o ton ly to protect against terrorists - it w ill be good business as well:

•TRACKING shipm ent• IMPROVING the safety o f ou r processing systems• PROTECTING our ag ricu ltu ra l p roduction inputs.

We are preparing on many fronts: investing in early detection technologies, staging s im ula tion exercises, reaching in to every county in the nation , to develop " f i r s t re sp o n d e r" c a p a b ility , to g u id e fa rm e rs and ranchers in securing th e ir operations, and to s treng then preparedness in ways ra n g in g fro m fe r t il iz e r and chemical s to ra g e to d isaster re p o rtin g .

But I can not overstate th a t th is is no t a federa l stra tegy. It is a na tiona l stra tegy. The f ro n t line is a t the local and state level.

The im portan t po in t though w ou ld be th a t as a

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nation w e are fu lly capable o f com prehending this th re a t and th e vig ilance it demands.

This is the challenge the President wrestles w ith every day. It is the to p p r io r ity o f the President because it must be. And w h a t th e President asks us to understand is all re la ted to the small sacrifices th a t must be made to m ain ta in the broader freedom s th a t we cherish and a w ay o f life th a t we must preserve. And I say must, no t w an t, because we, the United States, are the leaders o f the free w o rld and w ith o u t our leadership, as h istory has revealed over and over again, the despots o f the w o rld w ill have th e ir way.

That is w h a t is a t stake as we en te r a new year; the President wants, needs, and fo r my part, deserves your support. So I w ou ld appeal to you, please help all Americans by o ffe rin g him your patience and resolve to rid the w o rld o f th is th re a t because lite ra lly the w o rld depends on it.

As we enlist your help in the w ar on te rrorism , we have the responsib ility a t the USDA to move fo rw a rd on many o the r fron ts to address the many ongo ing needs and concerns o f ag ricu ltu re and specifically today the co tton industry.

We are here to listen abou t w h a t we can do to help you. These are ex traord ina ry tim es and this I know - the Am erican fa rm er is under con tinu ing and intense pressure.PRODUCTION TECHNOLOGY

Even when new technologies fo r be tte r p roduction ,

such as Bt co tton , o r ig in a te here in th e U n itedStates.....ou r free en te rp rise system makes themavailable w ith in a fe w years to farm ers everywhere.

The result is w e now have a condensed tim e fram e o f com petitive advantage as Am erican farm ers from technology. So we are com pelled to increase yield and effic iency and to m axim ize fib e r qua lity , jus t to keep from fa llin g behind.

B u tthe challenge is deeper, yet the farm er's num ber one customer - th e Am erican te x tile m ill - is under severe pressure o f its ow n from a strong do lla r, low - cost labor and im proving techno logy overseas.

For the firs t tim e last year, the U nited States exported m ore raw co tton than w e used here at home - an ind ica to r o f the loss o f dom estic m illing . Fortunately, w o rld co tton consum ption is g row ing , expected to be a record h igh 96 m illion bales this year. But we still have to o much co tton w o rldw ide . Our own stocks to use ra tio still remains abou t 40 per cent. But w h a t to do?

I stiil read the fa rm m agazine articles and they frequen tly ask the question "can w e com pete?" - th a t is the w rong question. The one w e w a n t to answer is - How do we compete? As I listen to you r leadership, th is is w h a t I hear.

The in d u s try needs a s tro n g resea rch and deve lop m e n t p rog ram , w h ich you have a lready deve loped to advance th e p o s itio n o f co tto n in the m arketp lace. And fo r go ve rn m e n t's pa rt, o u r ro le is

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to equ ip industry w ith every possible too l, th rough legislation and fund ing , and th ro u g h research, science and trade, to develop and m arket products scientifically and com petitive ly .BIOTECHNOLOGY, VALUE, WORLD TRADE

Here are some th ings th a t seem obvious to pursue. First, it has been suggested th a t perhaps one reason fo r th is leveling o f f o f yields may be the narrow genetic base o f cu rren t commercial varieties. This means w e need n ew genes fo r y ie ld , disease resistance, and fib e r qua lity in the base genotype even over and above w h a t genetic engineering can add. In the past fe w years, ou r A g ricu ltu ra l Research Service has a lm ost doub led the num ber o f geneticists dedicated to th is issue. And we are look ing fo rw ard to research partnerships w ith Cotton Incorporated and land g ra n t universities th a t w ill produce another m ajor cycle o f p roduc tiv ity increases.

Second, it was, in fac t the ou ts tand ing USDA- p riva te sector research partne rsh ip over th e last 20 years t h a t re s u lte d in th e h ig h v o lu m e ins trum enta tion classing system.

That system has shown the superio rity o f U.S. co tton and added to its price on the w o rld m arket w ith co tton fib e r q u a lity now more im p o rta n t than ever, th e question is: can th is be im proved even more? W e are now bu ild ing on the system to add short fib e r tests th a t m eet in te rna tion a l standards fo r accuracy and precision th a t provide a valid measure of in trinsic value, so a free and fa ir m arketp lace w ill

reward our farm ers w ith a price th a t tru ly reflects th e high qua lity o f th e ir product.

My th ird p o in t ... your industry operates in a h igh ly com petitive m arketplace th a t is o fte n un fa ir due to n o n -ta r iff trade barriers. And this is w here USDA partners must really step up w ith trade policies and research and deve lopm ent capabilities th a t counter these strong forces.

W hen China announced new standards on short f ib e r last summer, USDA fo rm ed em ergency task groups ta t delivered on th e ir promise to have scientific data in hand at the end o f 2002. But th o u g h we play a m ajor "g o ve rn m e n tto governm en t" role, we cannot and did no t do th is alone. W ith coopera tion by Cotton Incorporated, we docum ented evidence th a t the Chinese standards are unsu itab le fo r use in in te rna tiona l trade. This data, in part, w ill fo rm the basis fo r fu tu re o ffic ia l actions on these n o n -ta r iff barriers.

A ll o f th is leads to the a ll- im p o rta n t issue o f w o rld trade, an issue th a t always w ill be o f h igh im portance to American agricu ltu re if we are to m ain ta in our current productive land base and the agricu ltu ra l system.

N in e te e n th -c e n tu ry B ritish h is to r ia n Thom as Macaulay lived in a tim e when free trade was, as it is now, a m ajor issue. He w ro te , "Free trade, one o f the greatest blessings which a governm en t can confer on a people, is in alm ost every country unpop u la r." More than a century later, no t enough has changed.

The Processing Division oi th e AOCS is proud to invite you to attend its exceptional program at the 94th AOCS Annual Meeting &Expo. Here's a look at some of the events we have scheduled:

:acility Management SummitM O N D A Y , M A Y 5 , 2 0 0 3bis thre^quarter day ©vent for facility managers in fhe processing industry will feature presentations y high-profile industry participants on topics including control systems; equipment evaluation;

sign-build contracts; security issues; hiring, training and keeping quality employees; managing orkplace culture changes; legislative update; marketing insights; and new developments in food

and production technologies.

Safety, Security and Regulatory Issues} E D N E S D A Y , M A Y 7 , 2 0 0 3( airs: Robert Reeves, Institute of Shortening & Edible Oils, USA and Ron Collier, Process Plus, USA.1 >s session will focus on how to assess and manage the security and safety of oil processing facili­

ty how to use audits to ensure compliance with environmental regulations and ensure securily of p :essing facilities, the FDA's food security regulations, transportation security of rail cars and tank

tr s, and the requirements of many recent environmental ond workplace regulations.

F< complete program information on these sessions and other Processing Division sessions, visit the website

w w .a o cs.o rg /m eetin g s/a m 2003. Online registration and housing information is also available.

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March 2003 / OIL MILL GAZETTEER 23

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There is no question - and co tton producers know this be tte r than anyone - th a t our farm ers need free trade , fo r w ith o u t it, th e dow ns iz ing w o u ld be catastrophic. As a fa rm er w ho produced corn and pork I know I w ou ld no t have survived w ith o u t trade.

A lto g e th e r we export abou t a qua rte r o f all we produce - over ha lf the co tton and w heat. These are trem endous achievements, bu t the challenge never ends - we must constantly keep g row ing m arkets by tea ring dow n walls th a t keep our products o u t o f o the r countries.

We continue our e ffo rts to slash trade barrie r g lo b a lly th ro u g h th e W o rld Trade O rg a n iza tio n n e g o tia tio n s . The jo in t p roposa l s u b m itte d by secretary Venem an and U.S. trade representa tive Zoellick w ou ld u ltim a te ly e lim ina te th e rem ain ing barriers to a g ricu ltu ra l tra d e - e xp o rt subsidies, domestic supports, and m arke t access barriers.

We are w o rk in g w ith the U nited States Trade Representative to nego tia te free trade agreements w ith Morocco, Austra lia , and th e countries o f Central Am erica and Southern A frica . N ego tia tio ns w ith Singapore and Chile have been concluded, and we seek to expand hem ispheric tra d e w ith th e Free Trade Area o f the Americas.

But we are curren tly concerned w ith Brazil's WTO challenge to U.S. co tton program s. I have been to ld we are still consulting in fo rm a lly w ith them on the

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issue, w h ich is no t ye t a t the stage o f a " fo rm a l" WTO com p la in t.

We are w o rk ing closely w ith the co tton industry to co o rd in a te th e U.S. response. The U.S. pos ition is th a t our programs are in fu ll compliance w ith all o f our GATT and WTO ob liga tions and we w ill v igorously defend th e ir leg itim acy and legality.

We are also w o rk ing closely w ith USTR to press China to live up to the com m itm ents it made when it became the one -hun d red -fo rty -th ird m em ber o f the WTO just over a year ago. A t issue is th e ir agreem ent to establish a ta r i f f rate quota system fo r co tton and o the r com m odities and they have fa iled to live up to th a t agreem ent. People make plans and investments based on a g re e m e n ts and w e c a n n o t accep t neg ligence in fo llo w in g them .

The b o ttom line is th a t we have many challenges in the tra d e arena and secretary Venem an w orks da ily to representthe interestsall o f American ag ricu ltu re to our tra d in g partners around the w orld . But it is a challenge th a t never ends...and we at the USDA can always use your counsel and advice. Call, w rite or express ideas th ro u g h you r association, b u t le t us know w h a t m ore we can do to help.FIGHTING BIOTECH PREJUDICE

I w a n t to close w ith an area th a t frank ly distresses me, no t in term s o f its need and usefulness bu t the challenge we are seeing. This year I w itnessed a state o f affairs I never tho u g h I w ou ld see: U.S. food aid was

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tu rn e d d o w n by som e c o u n tr ie s because o f b io techno logy.

I was in Johannesburg fo r the W orld Sum m it on Sustainable D eve lopm ent w hen we learned th a t Z im babwe had rejected our gra in to feed starving people.

The U n ited States p ledged over 500,000 tons o f fo o d aid to A frica to am elio ra te th a t need. And yet some countries in southern A frica are a llow ing th e ir peop le to starve ra th e r th a n d is tr ib u te th e fo o d aid w e have p rov ided .

Why? The simple w o rd is fear.Fear th a t the corn is no t safe to eat? No.But the fear th a t the European com m unity w ou ld

cut o f f purchases fro m A frica to Europe because o f po ten tia l "b io te ch " con tam ina tion .

M eanw hile , fam ine continues, and w ill continue un til its underly ing causes are rem edied, w hich is, or course, fo o d p roduction th a t b iotech could address. For the sake o f generations to come - A frica should embrace b io techno logy.

This is a m ajor issue th a t is arriv ing at the flash po in t and we cannot le t irra tiona l public opposition in Europe prevent the rest o f the w o rld from accessing th is te ch n o lo g y p a rticu la rly w hen th e ir b rand o f b io tech seems to be all r ig h t.

M aybe you saw the story. The Euro, th e new European do lla r, it tu rns o u t is made w ith genetica lly m od ified co tton .

If the re is any d o u b t abou t ou r position on th is issue, listen carefully: We must hold firm in our position th a t b io te ch n o lo g y rem ains one o f o u r best too ls and brigh test hopes fo r addressing num erous g lobal concerns, in c lu d in g hunger, m a ln u tr it io n , w a te r scarcity and environm enta l degrada tion .

To take any o the r d irec tion or hold any o the r position is irresponsible to the genera tions ye t to arrive on this M o the r Earth.2002 FARM BILL

Before I close I w a n tto m en tion the fa rm b ill. In the fe w m onths since President Bush signed the fa rm bill, it feels like we have pu t tw o years' w o rth o f w o rk in to ge tting programs in to the hands o f Am erica 'sfarm ers. We com m itted early on to have the program in place by October, to ge t payments f lo w in g by October, and we did it, thanks to a de te rm ined and tireless staff.

We estim ated the USDA could pum p a to ta l o f about $13 b illion in payments in to the fa rm economy during the las tqua rte r o f 2002 a n d th e f irs tq u a r te ro f 2003.

But it is no t just abou t com m odity programs; this legislation puts fo rw a rd a h istorica l investm ent in conservation programs. In short th is fa rm b ill is a real o p p o rtu n ity - we even have an energy t it le - b u t it is also h igh ly complex and comprehensive.

Presented at the 2003 Beltw ide Cotton Conferences, Nashville, Tennessee, January 2003.

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