May 2008

HECONVEYORT1521 “I” Street, Sacramento, CA 95814; (916) 441-2272; FAX (916) 446-1063; e-mail dboggs@cgfa.org; Website: www.cgfa.org

Chairman Peter Hanlon summed up last month’s84th Annual Convention in Palm Springs with thisobservation: “When it was all over, everyone left theconvention better prepared to face the issues that lie aheadthan they were before they came.”

The theme of this year’s convention was “The NewAgriculture,” and Hanlon acknowledged the effective waythat the featured speakers “played a big role in meeting ourconvention theme of the New Agriculture...facingtomorrow’s challenges today.”

Hanlon had high praise for the convention speakers.“They were all excellent—dynamic, well respected in theindustry, very knowledgeable and approachable. We hadlong discussions with them after the lunch and they wereall very approachable. It was great.”

The convention planning committee came up with thisyear’s theme after brainstorming about the need to focuson the very timely issues that CGFA members all face.“The committee was comprised of managers, traders,brokers and CGFA staff. I thought this was a key to oursuccess as we were able to discuss the spectrum ofindustry concerns from a wide variety of viewpoints,” hesaid.

“These issues include the changing global economyand what it means to us and what tools we can use to betterequip ourselves for change,” he said. “It is a testimony tohow wonderful our organization really is. Our membershipis comprised of people who not only want to stay on top ofcurrent issues but look forward to and embrace change.”

More than 300 people attended this year’s conventionat the Hilton Palm Springs Resort.

Hanlon said the success of the event is a credit to allof the people who helped with the planning and organiza-tional aspects. “It always takes a team effort to makethings successful and we had a great team,” he said. “Thecommittee members and wives all contributed. A specialthanks to Hilary Hanlon, Chris Adams, FrankieHearne, and Mary Kauffmann for their tremendousefforts for everything from decorations to offsite events.Also, a huge thanks to John Kauffmann, Randy Jonesand Mark Krebsbach for the sponsorship drive, and RonSeley and Mike Hearne for help with the speakers and

ideas. And let us not forget that this convention would nothave been a success without Donna Boggs and AnitaGore and all they do that no one really sees.”

Bill Adams—Outgoing PresidentReflecting on his just completed one-year term as

CGFA president, Bill Adams said it was a year of chal-lenges and a year of unification as members and staff cametogether as one voice to deal with them.

“Right after I became president, we had the resigna-tion of Rich Matteis (longtime CGFA executive vicepresident and now administrator of the California FarmBureau Federation). As proof of the resiliency of ourorganization, everyone—staff, board members and theexecutive committee—stepped up to make the transitionfairly seamless as Chris Zanobini took the helm,” he said.

Adams, of Imperial Western Products in Selma, notedthat CGFA, like other agricultural organizations, faces anumber of short-term and long-term challenges, particu-larly dealing with water supply and environment issues.

“Our biggest challenge in the California grain industryis risk management because of escalating food prices andgrain prices. Also, escalating fuel prices play a huge rolebecause California imports about 80 percent of the feedthat goes to the dairies and feedlots,” he said. “It is alsoimportant to monitor our customer base. As the feed pricesgo up, the customers’ bottom lines get squeezed. Generallymost of our accounts are unsecured credit situations, socredit and collections are going to be big issues.”

Adams stressed the need for CGFA members to getinvolved by volunteering for committees, sending lettersand making phone calls when called upon to do so.

“Even with all the environmental problems that weface, I don’t think people realize all the little things theyneed to do. There are a number of examples over the last10 years where a few members made the difference bybecoming involved with some of the things we are fightingagainst. If it wasn’t for their dedication, we could havebeen in serious trouble.”

Adams expressed confidence in the continued effec-tiveness of CGFA under the leadership of new presidentSonda Sibole. Sibole, of Kemin Agri Foods North Americain Orland, is the association’s first female president.

CGFA convention was both timely and effective

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May 2008

Agriculture—Global PerspectiveBruce Scherr, chairman of the board and CEO of

Informa Economics Inc. (formerly known as SparksCompanies, Inc.), discussed the changing economiclandscape of American agriculture and its implications forthe future of agricultural business. Informa Economics isa world leader in broad-based domestic and internationalagricultural and commodity/product market research,analysis, evaluation and consulting.

Scherr noted that the United States is undergoing anunprecedented commodity price boom that is being drivenby extraordinary global growth. Key factors are the emergedand newly emerged middle-income consumers, over twodecades of disinflation from 1977 to 2001, and excessiveliquidity from 2000 to 2005.

Describing the U.S. corn market, Scherr said pricesare at a near record, but that there is no sign of rationing asdemand for more corn is coming for food, fuel and exports.He predicted that a persistently tight market balance islikely to continue for several years because of theseincreasing demands for corn.

“Worldwide economic activity has globalized despitetrade-talk failures, and businesses have fosteredglobalization,” he said. “This extraordinary economic growthand related infrastructure demands and consumptionexpansion has shifted demand curves to reflect more thana billion emerging and newly emerged global consumers.”

Farmers and commercial handlers are concentratingand controlling grain storage and distribution, Scherr said.“High-priced commodities boost the cost of doing business,and big, well financed farmers are establishing morestorage and executing better control of marketing. Fewer,but well positioned commercial firms will concentrate thetasks of grain assembly, handling and distribution to endmarkets.”

Other Convention SpeakersDuring the Annual Convention’s business session,

Bell Chen from the China offices of RJ O’Brien andAssociates gave a briefing on agricultural markets in Chinaand the impact of Chinese agriculture on global trade.Founded in 1914, RJ O’Brien is one of the oldest and mosthighly regarded independent futures commission mer-chants in the industry today.

Richard Matteis, chief executive officer of theCalifornia Farm Bureau, gave a very timely and informa-

tive report on key legislative and congressional activitiesthat have an impact on farmers and ranchers in this state.Matteis, the former executive vice president of CGFA,discussed such major issues as the farm bill, water andenvironmental challenges and labor.

William Orts, leader of Bioproduct Chemistry andEngineering Research at the USDA Agricultural Re-search Service Western Regional Research Center inAlbany, CA, described some of the important work beingconducted at the center. Orts explained that the goal of hisresearch unit is to add value to crops by optimal productionof biofuels and biobased products.

“In order for bioenergy production to be viable in theWestern states, a wide range of feedstocks will need to beutilized, requiring flexibility in processing capabilities,” hetold the group.

Orts pointed out that USDA-ARS has a wide-rangingprogram in biomass-to-energy conversion including newprocessing methods, enzymes and technologies for cellu-lose-to-ethanol capabilities, new separation methods forproduction of ethanol and bioproducts, and crop improve-ment via plant molecular biology.

Humor in the WorkplaceConvention attendees were entertained and informed

by inspirational speaker Jim Pelley’s presentation of humorin the workplace. Pelley’s company, Laughter WorksSeminars, is dedicated to providing the highest quality, mosthumorous presentations pos-sible, packed with tools andskills for a more productiveworkplace.

Through his light-hearteddelivery, Pelley conveyed howlaughter and humor can workto your advantage whendealing with the seeminglyunfunny business of balancingrisk and managing change.Attendees also learned theimportance of maintaining apositive attitude is a key toproblem solving.

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May 2008

Industry Social Hour

This popular convention event was held at the PalmSpring Aerial Tramway, featuring the world’s largestrotating tram cars that carry visitors from the Valley Station,elevation 2,643 feet, to the Mountain Station located at the8,516-foot level at Mt. San Jacinto State Park and Wilder-ness. This scenic and unique setting made the Industry SocialHour an unforgettable experience.

Other Convention HighlightsFor convention attendees, the options for activities

seemed endless. The biggest challenge for everyone wasdetermining which activities to choose. They included:

♦ The Convention Golf Tournament: Teams formed up atthe Indian Springs Golf and Country Club for a challengingday of fun at one of the most pristine golf courses anywherein the world. The players were provided with new PrecedentGolf Cars, equipped with GPS.♦ ¨Upscale Shopping: Destination for shoppers was theworld famous El Paseo Shopping District in Palm Desert.Known as the Rodeo Drive of the Desert, the district offersmore than 300 world-class shops, clothing boutiques, artgalleries, jewelers and restaurants.♦ ¨Living Desert Museum: Attendees who chose this op-tion received a real treat as they discovered remarkableplants, animals, places and natural phenomena associatedwith deserts.♦ The President’s Poolside Banquet: Lively music, a deli-cious dinner and amazing views of the desert mountainsmade this convention finale unforgettable. Topping theshow was the performance of J.C. and Alejandro, the world-renowned Dueling Pianos. Their spirited performance hadpeople laughing, clapping and shouting with enthusiasm.♦ Children’s Program: While the adults were busy with theiractivities, the children weren’t left out. KiddieCorp profes-sionals providing the children with age-appropriate games,arts and crafts, toys and entertainment that left the young-sters with plenty of fond memories.

Red Jeep TourSeveral convention participants enjoyed the thrill of an

open-air off-road jeep tour into the depths of the Indio Hills.They explored miles of pristine canyons, box canyons andfossil beds that are part of an incredible maze created by theSan Andreas Fault. Tour members learned about the hardyplants and animals that have adapted to survive in thisrugged terrain. A pause for refreshments at a private palmoasis was a welcome break during this 3-½ hour adventure.

Maggie Smith and Chris Adams enjoy the amenities at Spa Day Poolside.

The Spouse ProgramCGFA ladies attending this year’s convention received

some special pampering during a morning of rejuvenationpoolside. On-site therapists offered participants the optionof either a manicure or pedicure as they lounged alongsidethe resort’s pool. Coffee and a light breakfast wereprovided and each of the ladies received a goodie bagstocked with a variety of feminine items.

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May 2008

“Follow me,” quipped Dave Johnson as the wilderness hike began.

Mecca Hills Wilderness HikeFormer CGFA president Dave Johnson provided

skillful leadership for an enchanting hike into the MeccaHills Wilderness. The geological formations found thereare among the most unusual sites of their kind in the world.The area is a badlands labyrinth, a natural maze of small,narrow, steep canyons. Boxed lunches, plenty of waterand transportation were provided.

2008 Convention Committee

President & First Lady: Bill & Chris Adams,Imperial Western Products

Chaircouple: Peter & Hilary Hanlon,Hanlon Trading

Committee Members:John & Mary Kauffmann, J.D. Heiskell & Company

Ron Seley, Seley & CompanyMark & Nickie Krebsbach, Western Milling LLCMike & Frankie Hearne, L.A. Hearne Company

Randy Jones, Penny-Newman Grain

Major SponsorsWednesday Pre-Convention Golf

J.D. Heiskell & Company

Entertainer, Martini Bar & Cigar RollerPenny-Newman Grain Company

Business Session SpeakersA.L. Gilbert Company

BNSF Railroad

Keynote Speaker at LunchImperial Western Products

Ladder Canyon HikeJ.G. Boswell Company

Golf Tournament EntertainerCHS

Golf Towels Simplot AgriBusiness

Golf BallsADM

Hole in One PrizePenny-Newman Milling/Golden State Feeds

PAC Hors d’ oeuvresHilton Palm Springs Resort

PAC RefreshmentsCanbra Foods Ltd.

Interstate CommoditiesTPi

V-V Enterprises

Spouse/Guest ProgramAnderson ClaytonV-V Enterprises

ISH TransportationADM

Horizon Milling

Dueling Piano EntertainersADM

V-V Enterprises

A.L. Gilbert Co. Page 4

May 2008

A.L. Gilbert Co.Ackerman-Beardsley-Bennett

ADMAg Processing

All Star TradingAnderson Clayton Corp.

Associated Feed & SupplyBNSF Railroad

Baker CommoditiesBarker Trading Co.

Big W SalesBioTech Associates Ltd., Inc.

Boer CommoditiesBunge CBIA & Emporia, KS

Bunge-CanadaCanbra Foods Ltd.

Cargill Animal NutritionCargill Salt

Central Life SciencesConAgra Trade Group

Conestoga-Rovers & AssociatesCorn Products

Cypress TradingDSM Nutritional Products

Darling InternationalDiamond V Mills

El Toro Export LLCEvonik Degussa

Foster FarmsGrain Processing Corp.

H & H Engineering Construction Inc.Hanlon Trading

Hunt & Behrens, Inc.Imperial Western Products

Integrated Grain & Milling (IGM)Interstate Commodities Inc.Interwest Commodities LLC

InterWest Insurance Services

J.D. Heiskell & Co.J.G. Boswell Co.

James Farrell CompanyKemin Industries

Kings Valley IndustriesL.A. Hearne CompanyLeach Grain & Milling

MB CommoditiesMosaic Company

Novus International Inc.Nutrius LLC

NuWest Milling LLCPCS Sales

Pennfield Animal HealthPenny-Newman Grain Co.

Penny-Newman Milling/Golden State FeedsPhil O’Connell Grain Company

Premier ChemicalsRichard Best Transportation

Ridley Block OperationsSeley & Company

Simplot AgriBusinessThe Scoular CompanySouth Valley TradingThe Stuart Company

Tate & LyleThompson Trading Co.Union Pacific Railroad

V-V EnterprisesVeraSun Energy

Verhoeven Grain Co.Veterinary Services Inc.Vogel Sales Engineering

Western Milling LLCWestway Feed Products

Wilbur-Ellis Co.Wilks & Topper

William C. Loughlin & Co.Zinpro Corp.

Industry Social Hour Sponsors

May 2008

Golf Tournament Sponsors

ADMAdisseo USA Inc.Anderson Clayton

Bellwether Trading Co.BioTech Assoc., Ltd., Inc.

Bunge CBIA & Emporia, KSBunge-Canada

C.S.C.Cal By-Products

Canbra Foods Ltd.Corn Products

Cypress TradingDSM Nutritional Products

El Toro Export LLCElanco Animal Health

Evonik DegussaFeedTrader.com

Foster FarmsFrontier Ag

Grain Processing Corp.H & H Engineering Const., Inc.

IGM (Integrated Grain & Milling)Interstate Commodities Inc.InterWest Insurance Services

J.D. Heiskell & Co.Kemin Industries

Kings River CommoditiesMB Commodities

North Central CompaniesNutrius LLC

Pennfield Animal HealthPhibro Animal Health

Poet NutritionPrince Agri ProductsQuality Grain Co.

Ron Koehn TruckingSimplot AgriBusiness

Tate & LyleUnion Pacific Railroad

V-V EnterprisesVeraSun Energy

Westway Feed Products

Auction Donors

Bellwether Trading Co.Bunge Canada

Bunge North AmericaCGFA

Canbra Foods Ltd.Cypress Trading

Darling InternationalEl Dorado Hotel & Casino

El Toro Export LLCEmbassy Suites on Monterey Bay

Evonik DegussaFoster Farms

H & H Engineering Construction Inc.Hanlon Trading

Harris Feeding CompanyHyatt Newport Beach Hotel

J.D. Heiskell & Co.John & Mary KauffmannL.A. Hearne CompanyMarshall Estates LLC

Meritage HotelMosaic Company

Penny-Newman Grain CompanyScrew Conveyor Corp.Simplot AgriBusiness

V-V EnterprisesWestern Milling LLC

Westway Feed ProductsWilbur-Ellis Company

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May 2008

DHS Clarifies No-Match RuleThe U.S. Department of Homeland Security (DHS)

has released a Supplemental Proposed Rulemaking for theNo-Match Rule previously issued on August 15, 2007.This rulemaking addresses three issues cited in a decisionof the U.S. District Court for the Northern District ofCalifornia enjoining the August 2007 No-Match Rule.This Supplemental Proposed Rulemaking provides a moredetailed analysis of how DHS developed the No-Matchpolicy and will help responsible employers ensure that theyare not employing unauthorized workers.

This supplement addresses the three grounds onwhich the district court based its injunction, said HomelandSecurity Secretary Michael Chertoff. “We have alsofiled an appeal and are pursuing these two paths simulta-neously to get a resolution as quickly as possible,” he said.

The rule outlines clear steps an employer may take inresponse to receiving a letter from the Social SecurityAdministration indicating that an employee’s name doesnot match the social security number on file. If the businessfollows the guidance in the No-Match Rule, comprisingvarious actions to rectify the no-match within 90 days ofreceiving the letter, they will have a safe harbor from theno-match letter being used against them in an enforcementaction.

The original No-Match Notice of Proposed RuleMaking was published on June 14, 2006, and the commentperiod was open for 60 days. The department then incor-porated the comments and issued a final rule on August 15,2007. DHS is requesting public comment on the Supple-mental Proposed Rulemaking for 30 days after its publica-tion in the Federal Register.

Farm Bill Adopted; Veto ExpectedAfter months of intense debate, congressional nego-

tiators have completed a $286 billion farm bill that faces apresidential veto because it fails to ban crop subsidypayments to farmers who make more than $200,000 ayear. The new farm bill would ban all government pay-ments to growers with off-farm income exceeding $500,000,according to media reports.

According to the Associated Press, the legislationwould:

♦Expand subsidies for certain crops, extenddairy programs and increase loan rates for sugarproducers. It includes language which calls on thefederal government to buy surplus sugar and sell it toethanol producers, where it would be used in amixture with corn.

♦Cut a per-gallon ethanol tax credit that sup-ports blending fuel with the corn-based additive from51 cents to 45 cents in favor of more money forcellulosic ethanol, which is made from plant matter.

♦Add dollars for conservation programs de-signed to protect farmland.

♦Pay farmers for weather-related farm lossesout of a $3.8 billion disaster assistance fund.

♦Eliminate loopholes that now allow farmers tocollect subsidies for multiple farm businesses.As details of the farm bill provisions became clear,

U.S. Agriculture Secretary Ed Schafer reiterated a Bushadministration threat to veto the bill. “The U.S. House andSenate announced the completion of a farm bill thatunfortunately fails to include much needed reform andincreases spending by nearly $20 billion,” Schafer said. “Ata time of record farm income, Congress decided to furtherincrease farm subsidy rates, qualify more people fortaxpayer support, and move programs toward more gov-ernment control. We should not remove farm commoditiesfrom market forces and make them dependent upongovernment support programs.”

Ethanol Production RisesU.S. ethanol fuel production averaged 423,000 barrels

per day in 2007, an increase of more than 34 percent over2006 production, according to the Renewable FuelsAssociation.

Ethanol fuel production totaled 6.48 billion gallons in2007, far above the 4.7 billion gallons of renewable fuelrequired by the Energy Policy Act of 2005. Ethanolproduction is expected to continue to increase this year, asthe Energy Independence and Security Act of 2007 includesa new Renewable Fuel Standard that requires 8 billiongallons of renewable fuels to be blended into the country’sfuel supply in 2008.

That’s an annual growth rate of more than 23 percent,but the industry appears ready to meet that challenge.According to the RFA, there are currently 143 ethanolbiorefineries with the combined capacity to produce 13.4billion gallons per year of ethanol fuel, well above thatrequired by the new standard.

The industry is also building another 57 biorefineriesand expanding 7 existing biorefineries, an effort that willboost ethanol production capacity by another 5.2 billiongallons.

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May 2008

Less Corn Planted This YearOn the heels of last year’s record-high corn produc-

tion, U.S. farmers intend to plant 8 percent fewer cornacres in 2008, according to the Prospective Plantingsreport released by the U.S. Department of Agriculture’sNational Agricultural Statistics Service. Producersplan to plant 86 million acres of corn this year. While 7.6million acres less than 2007, this would still be the second-largest acreage since 1949.

The outlook for corn prices remains strong, thanks toincreasing ethanol production and other factors. Still, fa-vorable prices for other crops, along with crop rotationconsiderations and high corn input costs, are motivatingsome farmers to switch from corn.

Corn prices soared to a record in April after the U.S.government said stockpiles were falling faster than ex-pected, raising concerns of a shortage of the grain used tofeed livestock and make biofuel, according to the Associ-ated Press.

Corn for May delivery jumped $13.75 cents to settleat $6.05 a bushel on the Chicago Board of Trade, afterearlier rising as high as $6.16 a bushel, the highest ever.Prices for corn have shot up 30 percent this year amiddwindling stockpiles and surging demand to feed livestockand make alternative fuels including ethanol. Moreover,cold, wet weather in parts of the U.S. corn belt may forcefarmers to delay spring planting, potentially sending priceseven higher.

The Prospective Plantings report provides the firstofficial estimate of U.S. farmers’ planting intentions for2008. NASS’s acreage estimates are based on surveysconducted during the first two weeks of March from asample of approximately 86,000 farm operators across theUnited States. Prospective Plantings and all NASS reportsare available online at www.nass.usda.gov.

Truck Replacement RuleLooms

California Air Resources Board (CARB) is for-mulating regulations that could affect the more than 1.5million trucks and buses in use on California’s roads,highways and farms.

Given the age and, in many instances, the limitedusage of most agricultural vehicles, CARB’s proposal hasenormous economic consequences. A statement submit-ted by more than 75 agricultural groups offers a number ofalternatives relating to low mileage exemptions and finan-

cial incentives to allow agriculture to comply in an eco-nomically feasible manner.

Agriculture’s biggest challenge relates to the factmost farm vehicles have pre-1998 engines, which meansthey would have to be retrofitted or replaced twice withinan 11-year timeframe if CARB’s schedule is adopted asproposed.

Meetings have been held with the CARB staff toexplain the impact of the replacement schedule on agricul-ture and seek an alternative schedule that would requireonly one replacement/retrofit within the same time period.

Given the millions of consumer and industrial goodsand products delivered via truck each day in the state, theseregulations threaten to have a profound, negative impact onthe business community, according to the California Cham-ber of Commerce.

What CARB is proposing to adopt are the nation’smost stringent new emissions regulations that could also bethe most costly and far-reaching rule that business has yetto face.

Under the new proposed rule, any heavy-duty vehiclewith a pre-1998 engine will need to be replaced or retrofit-ted with yet-to-be developed technologies by Dec. 31,2010.

In addition:• All vehicles with engines manufactured between

1998 and 2002 must be retrofitted or replaced byDec. 31, 2011.

• All vehicles with 2003-04 engines must be retrofit-ted or replaced by Dec. 31, 2012.

• All 2005 and newer engines must be retrofitted orreplaced by 2013.

All trucks must meet 2007 emissions standards by theyear 2114 and 2010 emission standards by the year 2022.

If the rule goes into effect, the market will be floodedwith “outdated” trucks; greatly diminishing the ability ofbusinesses to sell used equipment or recoup any resalevalue.

Businesses have an opportunity to make sure theirvoice is heard in this process and have an impact on thefinal adopted rule. The California Chamber of Commerceand other associations are leading a coalition effort called“Driving Toward a Cleaner California.”

For additional information on joining Driving Towarda Cleaner California, contact Jason Schmelzer at theCalChamber, (916) 444-6670,

jason.schmelzer@calchamber.com.

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May 2008

ARB Targets Diesel EmissionsThe California Environmental Protection Agency Air

Resources Board (ARB) staff is developing a regulation toreduce diesel particulate matter and other emissions fromin-use heavy-duty diesel powered vehicles operating inCalifornia. A proposed regulation is planned to be pre-sented to the Air Resources Board in October 2008. Theproposed regulation would apply to diesel shuttle buses,vehicles greater than 14,000 pounds Gross Vehicle WeightRating (GVWR), and does not include pickups.

Interested parties are invited to participate in the nextseries of public workshops to discuss revised proposedregulatory language to reduce emissions from existingdiesel-fueled trucks, buses, and other vehicles operating inCalifornia. In addition to discussing revisions to the pro-posed regulation, staff will also discuss revised emissionbenefits and cost estimates, revisions to the Public Agencyand Utility Regulation, and how school districts would beaffected by the proposed regulation. The workshops willbe held during the day and in some locations, in the eveningas well, with breakout sessions to discuss the proposedschool bus requirements.

The workshops in Sacramento will also be webcast.For more information on the workshops, visitwww.arb.ca.gov/msprog/onrdiesel/workshops.htm.

Governor Seeks Delta Water StudyGov. Schwarzenegger has sent a letter to Senate

Democrats informing them that he intends to move for-ward on studies of the Sacramento-San Joaquin Delta,including the peripheral canal, as well as call for a 20percent per capita reduction in statewide water use, ac-cording to the Sacramento Bee.

Department of Water Resources Director LesterSnow compared the water conservation proposal to a 2006law that requires the state to reduce state greenhouse gasemissions 25 percent by 2020.

Schwarzenegger wrote that he intends to direct DWRto begin federal and state environmental reviews on at leastfour Delta canal alternatives. Those include no new Deltatransfer system, a two-part system with a canal andpumps, a stand-alone canal and substantial improvementsto the existing pumps.

The studies could take two to three years and costmore than $100 million, paid for by water users underexisting contracts, Snow said.

The governor also plans to have DWR completefeasibility studies of three dams, including new projects at

Temperance Flat northeast of Fresno, Sites Reservoir inColusa County and expansion of the existing Los VaquerosReservoir north of Livermore. Those studies would be paidfor by 2006 voter-approved bond funds.

Wireless Telephone LawsTwo new laws dealing with the use of wireless

telephones while driving go into effect on July 1.The California Highway Patrol explains the differ-

ences between the two laws this way: The first prohibitsall drivers from using a handheld wireless telephone whileoperating a motor vehicle. Motorists 18 and over may usea hands-free device. The second law states that driversunder the age of 18 may not use a wireless telephone orhands-free device while operating a motor vehicle.

CHP points out that the all motorists are allowed to usea handheld wireless telephone to make emergency calls toa law enforcement agency, a medical provider, the firedepartment, or other emergency services agency.

The base fine for the first offense is $20 and $50 forsubsequent convictions. According to the Uniform Bailand Penalty Schedule, with the addition of penalty assess-ments, a first offense is $76 and a second offense is $190.

There is no grace period for enforcement of thesenew laws. The laws also apply to out-of-state drivers.They do not apply to passengers in motor vehicles.

For more information, visit the CHP Website at:www.chp.ca.gov/pdf/media/cell_phone_faq.pdf

Report on Greenhouse GasesThe California Energy Commission has adopted a

report to develop comprehensive regulatory strategies tomeet AB 32 greenhouse gas reduction goals. The InterimOpinion on Greenhouse Strategies was prepared jointly bythe Energy Commission and the California Public Utili-ties Commission (CPUC).

The Interim Opinion makes recommendations to theCalifornia Air Resources Board (ARB) for a regulatorystructure that includes a combination of market and pro-gram approaches to reduce greenhouse gas emissions inthe electricity and natural gas sectors.

The Interim Opinion is the first of two phases taskedto the commissions under AB 32. This initial decision thatdefines the point of regulation and a second opinion to beissued in the summer of 2008 will describe the specificmechanisms for requiring the electricity and natural gasindustries to meet their goals. Both decisions will beconsidered and possibly incorporated into the ARB’s

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May 2008

Scoping Plan for the agency’s further work in implementingAB 32.

The foundation of this proposed regulatory frame-work is based on the state’s “loading order” which putsenergy efficiency as the top priority, followed by renew-able energy investment. The Interim Opinion recommendsthat all retail providers of electricity and natural gas berequired to provide, at minimum, yet-to-be determinedlevels of all cost-effective energy efficiency and renew-able energy.

The Interim Opinion further recommends that if amulti-sector cap-and-trade program is developed for Cali-fornia, the electricity industry should take part. The En-ergy Commission believes that if a robust cap-and-tradeprogram is implemented by the ARB, the electricity sectorcan provide reductions in greenhouse gases beyond themandatory programs and at a lower cost with increasedflexibility and innovation.

Additional recommendations will be provided laterthis year to ARB after detailed economic modeling isfinished on emission reduction opportunities and costs inthe electric and natural gas sectors.

The opinion is available at www.energy.ca.gov/ghg_emissions/meetings/.

New Federal Ozone StandardFederal officials announced a tougher national ozone

standard that could push back the San Joaquin Valley’starget date for clean air by six years, to 2030, the FresnoBee reported.

The U.S. Environmental Protection Agency low-ered the threshold above which the corrosive summertimegas is considered unhealthy by about 6 percent.

“I adhered to the law, I adhered to the science inchoosing the new ozone standard,” EPA AdministratorStephen Johnson said.

Electric utilities, oil companies and other industriesobjected to the new standard, maintaining that the oldstandard is still adequate. The stricter standard for ozonewill cost billions of dollars to reach, hurting the economy.

Many counties haven’t been able to meet the currentstandard set a decade ago, said John Kinsman, seniordirector for environment at the Edison Electric Insti-tute, which represents most of the country’s powercompanies. “Moving the goalpost again will inflict eco-nomic hardship on those areas without speeding up airquality improvements.”

Legal action may follow the EPA decision, as it oftendoes with new air standards, and that could delay SJVefforts to implement it.

The district still must meet the cleanup goal for thecurrent standard, which is clean air by 2024. It would thenhave six more years to meet the new standard.

Johnson said that ought to change. He said the Bushadministration plans to propose legislation to Congress tooverhaul the 1970 law, which was amended in 1990, so thatin the future costs can be considered when setting healthstandards.

Any such move is likely to be met with strong oppositionin Congress. Health experts and environmentalists viewthe setting of health standards without consideration of costas essential for assuring public health.

Tougher Dust Standard Is OK’dDespite Republican and Administration opposition,

the House Education and Labor Committee has ap-proved a bill requiring OSHA to come up with a “combus-tible dust standard.” Both Republicans and OSHA haveargued there’s no need for a new standard since OSHA’sexisting dust rules cover general rules for housekeeping,emergency action plans, ventilation, hazardous standardsand communications.

The Department of Labor said of the committee’saction, “(The bill) would mandate a one-size-fits-all stan-dard for as many as 200,000 worksites throughout thecountry…supporters mistakenly believe there are no com-bustible dust workplace protections, when there are 17existing OSHA standards.”

The agency also said it’s currently inspecting facilitieswith the highest risk of explosion, and said if these inspec-tions find that current rules aren’t working, then the agencywill initiate a rulemaking.

Renewable Fuels Waiver OptionWith the Senate closer to an agreement on its list of

energy program tax extenders, the recent U.S. Depart-ment of Agriculture planting intentions report and thesubsequent market reaction have some calling for a waiverof alternative fuel blending requirements to take the pres-sure off corn and soybean markets.

A waiver of the Renewable Fuels Standard (RFS),which mandates exactly how much of various alternativefuels must be blended with diesel over the next five years,carries a provision allowing the Bush Administration towaive the requirements if the mandate distorts other

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May 2008

NEW MEMBERS TO CGFANEW MEMBERS TO CGFANEW MEMBERS TO CGFANEW MEMBERS TO CGFANEW MEMBERS TO CGFAmarkets and costs. First to publicly call for a waiver of thestandard was the Nebraska Cattlemen, saying now is thetime to begin to talk about how the waiver might beinvoked.

“We don’t want to see cattlemen shut down and thena waiver comes into place,” said Nebraska PresidentMike Kelsey, stressing that decreasing corn supplies inthe face of record demand threatens both livestock pro-duction and ethanol refining.

Immensity of California AgricultureIf California were a country, it would rank in the top

10 of the world’s nations in the value of its agriculture,according to a report by the University of CaliforniaAgricultural Issues Center.

The report found that California farms and relatedprocessing industries generate 7.3 percent of the state’sprivate-sector jobs and account for 5.6 percent of laborincome. The calculations include ripple effects.

Findings are based on an analysis of data from the2002 U.S. Census of Agriculture, which is the most recentone available. Center staff posted it online so that otherresearchers and policy analysts can begin to use the dataright away.

“California agriculture is large, diverse, complex anddynamic,” said Daniel Sumner, a professor of agriculturaland resource economics at UC Davis. “It contributessignificantly to the economies of the state and nation.”

In addition to looking at the state as a whole, the reportalso analyzes agriculture’s economic impact on the CentralValley, San Joaquin Valley, Sacramento Valley and Cen-tral Coast regions of California.

Established in 1985, the UC Agricultural Issues Cen-ter serves as forum for the study of important trends andissues involving California agriculture.

The report, entitled “Agriculture’s Role in theEconomy,” is now available on the Internet atwww.aic.ucdavis.edu/publications/MOCA_Ch_5.10aPrePrint.pdf.

State Board Creates ‘Ag Vision’From backyard fruit trees to supermarket shelves,

California’s $31.4 billion agricultural industry touches thelives of individuals worldwide on a daily basis. In the yearsto come, how this industry adapts and innovates will bevital to its continued success. In planning for this future,the State Board of Food and Agriculture has broughttogether the public and the agricultural industry to createan “Ag Vision” for California.

At a meeting on March 26, the state board heardpresentations by agricultural representatives and depart-mental officials concerning the strategic planning pro-cess. Chris Zanobini, CGFA executive vice president,was among the agricultural leaders who made presenta-tions to the board.

The California Agricultural Vision will consist ofstrategic goals that the agricultural industry wants toachieve by the year 2030. Public input is essential for theagricultural vision to fully represent California, includingperspectives from farmers, ranchers and processors aswell as hunger, nutrition, conservation and rural developmentgroups.

“When we forget the stable foundation upon whichagriculture must stand, we do so not at our own peril, butat the peril of civilization itself,” said A.G. Kawamura,secretary of the California Department of Food andAgriculture.

The state board and the California Department ofFood and Agriculture have launched a series of listeningsessions that will provide a forum for the agricultureindustry and public to give their input into a Californiastrategic agricultural vision. For a schedule of these ses-sions, go online at www.cdfa.ca.gov/agvision/files/listeningsessions.pdf.

Feed Rule Changes PublishedThe long-pending final changes to the Food and

Drug Administration’s restricted use protein products(RUPP) rule, known to the industry as the BSE feed rule,were published on April 25, despite opposition by mostindustry segments affected by the rulemaking, accordingto the State Association Weekly Washington Report.

The changes come just days after the White Houseannounced a new beef trade agreement with Korea,including a provision demanded by Korea that meat fromanimals over 30 months old would not be accepted unlessthe U.S. “expanded” its feed rule. The 12 nationalorganizations that signed the letter to federal agencies saidcurrent economics argue against the rulemaking, that theBSE risk in the U.S. is so low that the new ban will havealmost no effect on risk, and that trade policy should notdrive food safety policy.

Effective April, 2009, the regulation rule expands the1997 feed rule to ban the so-called “short list” of SRMs,meaning brains and spinal cords from animals over 30months must be removed at processing and rendering, andthe use of these ruminant byproducts in all livestock,poultry and pet foods is forbidden. FDA says the ban will

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May 2008

CGFA BOARD OF DIRECTORSPresidentSonda SiboleKemin Agri FoodsNorth America, Inc.Orland

Vice PresidentDuane "Butch" FischerJ.D. Heiskell & Co.Tulare

Past PresidentBill AdamsImperial Western ProductsSelma

Directors:Tom ArmstrongCorn ProductsStockton

Pat BivensCargill Animal NutritionTurlock

Mike BraunPhibro Animal HealthFresno

Don DesmetDarling International Inc.San Francisco

Casey DoelmanQuality Grain CompanyChino

Bob GallagherA.L.Gilbert CompanyKeyes

Chuck HeuringPenny-Newman Grain Co.Fresno

Ejnar KnudsenWestern Milling LLCGoshen

Tom McLaughlinIntegrated Grain & MillingFresno

prevent the accidental cross-contamination of feeds withmaterials which could carry BSE infectivity.

FDA estimates that the changes could cost live-stock-related industries up to $81 million a year in disposaland rendering costs.

The new rule can be found by going to the FDAwebsite at www.fda.gov, and clicking on the icon for theCenter for Veterinary Medicine.

FSA Signup Deadline NearsJohn Smythe, director for USDA’s Farm Service

Agency in California reminds producers of the acreagereporting requirements that must be met prior to receivingprogram benefits. Filing an accurate acreage report for allcrops and land uses, including failed acreage and pre-vented planting acreage, can prevent the loss of benefitsfor a variety of programs.

“Producers are required to file an FSA-578, Reportof Acreage, certification for the farm by July 15 for allcrops except small grains,” said Smythe. Small grain cropreporting dates in California have already passed exceptfor Spring-seeded grains in Northern California. Forsmall grain reporting dates and other crop reportingissues, producers can contact the nearest county FSAoffice in their area.

According to Smythe, acreage reports on crops aredue in the county office by the earlier of July 15 for allcrops except small grains, or 15 calendar days before theonset of harvest or grazing of the specific crop acreagebeing reported.

“It is also very important that producers report croplosses, including those insured under Federal Crop Insur-ance (FCIC) and Non-insured Assistance Program (NAP)within 15 days of the date damage occurred or 15 daysfrom the date damage is apparent,” said Smythe. “Losses

and or damages to crops must be reported after eachdisaster occurrence and in a timely manner to insurecontinued eligibility for benefits.”

Producers are encouraged to visit their local FSAcounty office to file the required FSA-578 certificationreport before the deadline dates expire. For backgroundinformation, visit the state website at www.fsa.usda.gov/ca.

DDDDDAAAAATES TES TES TES TES TTTTTOOOOOREMEMBERREMEMBERREMEMBERREMEMBERREMEMBER

* January 14-15, 2009 - Grain & Feed IndustryConference, Embassy Suites - San Luis Obispo,CA

* April 29-May 2, 2009 - CGFA AnnualConvention, The Meritage Resort and Spa - Napa,CA

In MemoryCGFA Past President Bill Carender, 68, of Kingsburg,died on Monday, April 7, 2008. Graveside services for Mr.Carender were held on Friday, April 11 at the KingsburgCemetery.

Mr. Carender was a retired Kingsburg Cotton Oil managerand long-time active member and past president of theCalifornia Grain & Feed Association. Remembrancesmay be sent to Grace Church of the Valley, 1849 18thAve., Kingsburg, CA 93631.

Dan MezgerMezger Bros.Yolo

Ron SeleySeley & Co.South Pasadena

Randy SmithScrew Conveyor Corp.Visalia

Steve StewartInterwest Commodities LLCDana Point

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