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U.S. FEED GRAINS COUNCIL PRESIDENT PLEASED WITH CORN SALES, CARGO PREFERENCE LIMITS AMOUNTS

 WASHINGTON, May 4 /PRNewswire/ -- "We are pleased that the Russians were allowed to choose the commodities they need most. Their selection of corn validates our reports that the Russian feed and livestock industries desperately need basic feed ingredients to survive and provide food products to the Russian people. But cargo preference is costly to the United States," said Ken Hobbie, president and CEO of the U.S. Feed Grains Council, responding to yesterday's announcement on the Food for Progress (FFP) program to Russia, which included $227.5 million in corn.
 Of the $700 million aid package, $200 million will be spent on freight because cargo preference regulations mandate that 75 percent of the commodities must be shipped on U.S.-flagged vessels. U.S.-flagged vessels currently charge two to three times the world rate. According to reports from the Congressional Budget Office, $125 million of the $200 million is directly attributable to having to ship on U.S.-flagged vessels.
 "It is unfortunate that $125 million that should go to aid commodity purchases must be used to pay for freight under the cargo preference regulations," stated Hobbie. "That $125 million could have purchased 49 million bushels (1.25 million metric tons) of feed grains," Hobbie stated.
 "That is why the U.S. Feed Grains Council opposes application of cargo preference requirements to U.S. agricultural exports," said Hobbie. "Individual sectors of the economy should not be asked to support the U.S. maritime industry," Hobbie stated, explaining the U.S. Feed Grains Council's opposition to cargo preference regulations.
 Monday, USDA announced the commodity mix for the $700 million FFP package. The Russians requested $227.5 million for corn, $105 million for soybean meal, $66.5 million for butter, $56 million for wheat, $5 million for sugar and $40 million for high-value products.
 The $700 million FFP aid package was announced by the U.S. government following early April meetings in Vancouver between Presidents Clinton and Yeltsin. An agreement between USDA and the Russian government on the cargo preference regulations was finally reached this weekend.
 The council is a private, non-profit organization that develops and expands export markets for U.S. feed grains and co-products through a network of 13 international offices. The council has staff in Latin America, Europe, the Middle East, Africa and Asia. Support for the council comes from barley, corn and sorghum producers in Colorado, Idaho, Iowa, Illinois, Kansas, Kentucky, Louisiana, Minnesota, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oregon, South Dakota, Texas, Virginia, Washington and Wisconsin. The council also receives substantial support from leading agribusiness firms across the United States.
 -0- 5/4/93
 /CONTACT: Stanton J. Barrett of the U.S. Feed Grains Council, 202-789-0789/


CO: U.S. Feed Grains Council ST: District of Columbia IN: AGR SU:

TW -- DC033 -- 4574 05/04/93 17:36 EDT
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Date:May 4, 1993
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