By now you are probably aware of the problem in which Starlink^TM corn was found in several brands of taco shells and has resulted in nationwide recalls of the products. All of the affected corn flour has, so far, been traced to one mill in Texas. The issue is still important because the Starlink^TM hybrid is the only GMO corn not approved for both human and animal consumption. In order to keep Starlink^TM out of human food channels, Aventis and the U.S. Department of Agriculture agreed to develop plans under which the Commodity Credit Corporation (CCC) will offer to purchase Starlink^TM corn on the farm by offering growers an incentive payment of 25 cents per bushel over the Oct. 2, posted county price in the county where the corn was grown. Under an agreement reached late on Sept. 29, between Aventis, USDA and the Environmental Protection Agency, Aventis agreed to reimburse CCC for the costs incurred in purchasing and marketing the purchased Starlink^TM corn. In addition, Aventis has agreed to cancel its registration for Starlink^TM corn^. This action does not affect the marketing of the crop into approved channels for domestic industrial or animal feed uses.

Importantly, Aventis and USDA have not developed an approach yet for addressing Starlink^TM corn that already may have been harvested and delivered off the farm, either knowingly or unknowingly. In a Sept. 29 letter sent to growers, Aventis specifically stated that its payment offer for both 1999- and 2000-crop Starlink^TM corn "does not extend to corn that already has been removed from your farm." Further, there have been reports of some instances in which producers around the country have attempted to deliver Starlink^TM corn to warehouses based on Aventis’ statement in its Sept. 29 letter that CCC might direct that the corn be delivered to a "CCC-approved location in your area." At this point, the USDA has only designated ConAgra feedlots and grain facilities as approved for delivery of Starlink^TM corn. There are however, at least 100 additional facilities that Starlink^TM growers have cited as potential marketing locations. There are a number of other facilities that have requested delivery location approval by the USDA on their own. USDA has approved some 90 other facilities as acceptable for Starlink^TM. For those wishing to become an approved Starlink^TM destination, you must contact Aventis at 1-866-785-8665 and have a brief interview to determine if your facility meets three criteria. Those criteria are: 1) a willingness to accept Starlink^TM corn, 2) an agreement that the facility will be a "direct end-user" of Starlink^TM corn delivered to the facility, and 3) an agreement that the Starlink^TM corn and/or its derivatives are to be only used for domestic non-food industrial uses or domestic animal feed.

Negotiations are still underway, with industry groups included, to address unresolved aspects of the Starlink^TM situation, including any plans that may be under consideration to trace-forward the delivery of the corn that has left the farm. There is also discussion that grain handlers be compensated by CCC (which in turn should be reimbursed by Aventis) if the value of their corn inventory has been affected by unknowingly taking delivery of Starlink^TM corn. Those grain handlers who have been identified by Starlink^TM growers as recipients of their grain have received certified letters from Aventis. These letters remind the grain handler that all Starlink^TM corn must be "destined for appropriate use (domestic animal feed or industrial non-food)." Each handler letter is also copied to the USDA, the FDA and the EPA. The letter does not address the issue of any undermining in value of Starlink^TM commingled corn.

Some issues remain unresolved at this time, as new information becomes available, we’ll be sure and keep you informed. If you have any further questions, please call the WASA office.

Wisconsin Attorney General James Doyle announced earlier this month the largest antitrust settlement in state history. It is the second leg of a price fixing conspiracy that involved three European companies and three Japanese vitamin manufacturers who set prices from 1989 to 1998. Last year, direct purchasers of the vitamins for animal feed were able to recover a portion of their overpayments because of a settlement with the firms that pled guilty. This new settlement allows indirect purchasers to also recover damages in the 23 jurisdictions that allow this type of claim. These indirect purchasers can involve both feed mills and feed purchasers.

The 23 jurisdictions, of which Wisconsin is one, will share in an available claim fund pool of $107 million. There is no specific dollar allocation breakdown per state so if only one state’s citizens make claims, they could potentially split the whole pool among themselves. (This scenario is highly unlikely though.) The total claim fund of $107 million will be shared pro rata among all those filing valid claims. Within the next 30 to 60 days, full-page newspaper ads will appear in national papers with instructions on how to apply for damages. There are also plans for a website with information. The vitamins covered by the settlement are:

· Vitamins A, B2, B3, B4, B5, C & E

· Beta Carotene · Pre-mixes

The claims process was devised by the defendant’s attorneys and will be, to some degree, intimidating. The claim form is anticipated to be eight pages long and will state that some form of receipt must document all claims. There are loopholes for this such as providing the last couple year’s records and self-certifying that you had a similar operation in prior years. Your feed customers may also point to you as their feed dealer who can justify their claims. The details of this little item have not yet been worked out. The deadline for claim applications will be sometime in March or April of 2001. Final settlement payments are not anticipated for 9 to 12 months from now.

As information comes available, we’ll let you know. We’re also planning on having an expert involved with the settlement and claims process as a speaker at the Annual Convention in January.

A recent OSHA inspection of a Wisconsin elevator resulted in substantial proposed penalties. The amount of the penalties had less to do with safety & health issues than it did with the perceived size of the company. OSHA mistakenly believed this facility was part of a larger organization and based their initial penalties on that erroneous belief. As a direct result of services provided through the WASA Loss Control Program, OSHA has acknowledged that their initial assessment was in error and recalculated the proposed penalties to less than 20% of the original fines. This individual case is still open and being negotiated, but it shows the potential dollar impact on your operation if it is part of a larger entity (e.g.: division, subsidiary, affiliate, etc.). Regardless of the number of employees at your local facility, OSHA looks at the whole ownership structure and bases fines on the total employee number, even if those employees are in other divisions in other states. The bottom line is that you may not be eligible for any penalty reduction simply because of your indirect size.

As harvest rushes in, not only does your workload get heavier, but employees seem to have an increased tendency to "cut corners" as well. Both conditions can lead to employee injuries, but how much does an injury actually cost? According to one source, one back strain can have a direct cost of $5,945 and additional indirect costs of $7,134. Using a net profit margin of 3%, you will have to increase sales $237,800, just to cover the indirect costs!

A Facility Survey by WASA Loss Control Director, RB [Bob] Willder, can assist you by evaluating both the physical conditions of the workplace and the work habits of your employees. To sign-up for a survey, call 608-223-1111.

Federal legislation co-authored by Wisconsin senator Herb Kohl has passed the Congress and is at the president’s desk awaiting his expected signature. The bill would impose felony penalties for the theft and/or transportation of anhydrous ammonia across state lines for use in the manufacture of methamphetamine. The bill also includes an appropriation of a half-million dollars to Iowa State University to continue research into the development of an inert agent that would render anhydrous useless as an ingredient in meth production while maintaining its efficacy in legitimate agricultural practices.

At the same time, Minnesota has upped their penalties for the theft of anhydrous or tampering with anhydrous storage equipment to a felony punishable by up to five years in prison and a $50,000 fine. For those members bordering Minnesota, expect so see the meth problem in your area get worse as the "bad guys" come into Wisconsin to "cherry-pick" our ag suppliers. In Wisconsin, anhydrous theft or tampering is still a simple misdemeanor. Transportation of a thermos bottle of anhydrous is legal in Wisconsin, even though there is only one purpose on earth for that quantity and that’s meth production. Why is Wisconsin in this situation? Sadly and stupidly, because the bill we introduced last year was caught up in partisan bickering and gamesmanship and was killed. Hopefully, the Legislature will be more positive this year.

Next month’s presidential election will affect our industry for years to come. Not only will the winner of the presidential election be able to appoint heads of various regulatory bodies which have direct bearing on how your business operates, but he will in all likelihood, nominate two and maybe three Supreme Court justices in the coming four years. These new nominees have the potential to be the swing votes for many years to come. Whatever your political stripe or persuasion, we urge you to exercise your right and vote in the coming election. Find and make the time, it is important.

In an earlier fax/letter regarding the Wisconsin Attorney General’s announcement of the vitamin anti-trust settlement, we had an incorrect date. (For full information on the story see the opposite page.) The correct deadline for the filing of claims will be in March or April 2001.