Monday July 23 Ag News

Crop Insurance Lunch and Learn

Concerned about the claims process?
Not sure about your crop insurance, chopping silage, etc?

Join us for FREE LUNCH and presentation/ discussion by:
-  Marvin Rhodes, RCIS Field Service Rep.
-  Terry Warren, RCIS Field Service Rep.

WHEN: Wednesday, August 1st
WHERE: Nielsen Center in West Point

TIME: 11:30 to 1:00 Lunch
1:00–2:00 Presentation
Open Forum Discussion

Sponsored by:
Wells Fargo Bank, N.A. of West Point and
Rural Community Insurance Services



CRP Acreage Released for Emergency Haying and Grazing in 17 More Counties

"As of July 19, seventeen additional Nebraska counties have been released for CRP emergency haying and grazing," announced Farm Service Agency (FSA) State Executive Director Dan Steinkruger. They are: Antelope, Kearney, Platte, Dixon, Knox, Polk, Franklin, Madison, Thayer, Hall, Nuckolls, Wayne, Hamilton, Phelps, Webster, Jefferson, and Pierce. These are in addition to the counties previously named.

The Drought Monitor was updated Thursday and designated these additional counties as being in a "D2 – Severe Drought" status. Secretary Vilsack recently authorized FSA State Committees to release counties for CRP emergency haying and grazing once they reached the D2 level. In addition, the associated payment reduction was decreased from 25% to 10% to further assist producers impacted by the drought conditions.

CRP participants need to file a request to hay or graze at their local FSA office. CRP use includes specific rules for haying and/or a grazing plan to insure consistent uses of the land. An additional approval was granted this year for practice CP-25, Rare and Declining Habitat, to allow grazing for the first time.

Steinkruger added, "This approval will provide additional forage to livestock producers in the affected counties as the drought continues to intensify."



This Week's Temperatues Could Top 100°F with Winds over 20 mph
Early Models Indicate September and October Could Bring Much-Needed Moisture
Al Dutcher, UNL Extension State Climatologist

Crops continue to suffer from hot temperatures and a lack of significant rainfall. It seems this opening statement has been the norm for the past month. This week the National Drought Monitor designated a second area in Nebraska in extreme drought. Unfortunately, the latest models and extended forecasts offer little evidence of a pattern change that will end this nightmare scenario.

The extended outlooks for August, just released by the Climate Prediction Center (CPC), indicate above normal temperatures are likely for the entire state. They indicate a tendency for below normal moisture across eastern Nebraska, but equal likelihood of above normal, normal, or below normal precipitation for the remainder of the state.

The Climate Prediction Center’s outlook for August-October continues the bias toward above normal temperatures for the entire state. However, only extreme eastern Nebraska is assigned a tendency for below normal moisture; the remainder of the state has equal chances of above normal, normal, or below normal precipitation.

On a positive note, the movement away from drier conditions in the three-month forecast could indicate that better moisture may occur in September and October. How can I come to this conclusion? August represents approximately 40% of the moisture that normally falls in this three-month period. With a dry August forecast for eastern Nebraska, the three-month map may be indicating that enough moisture could fall in the latter two months to compensate for the below normal moisture projected for August.

In the short term, further crop stress will not be avoided through the middle of next week as high temperatures should remain in the upper 90s or above. In fact, the entire state could easily see 100-110°F readings from Monday through Wednesday. The hottest temperatures are likely to occur across south central, southwest, and west central Nebraska.

If the heat isn’t bad enough, models indicate that wind speeds of 20+ mph are likely across the western two-thirds of the state during the first part of next week. This will be in response to an upper air trough trying to move along the periphery of the upper air ridge firmly established over the central Plains. If this upper air trough can dig far enough south, it may be able to flatten the ridge and allow for thunderstorm development in response to monsoon moisture being pulled around the north side of the ridge.

The models also hint that a few days of cooler weather may return to eastern Nebraska by the end of next week as the upper air trough digs southward into the eastern Corn Belt. Depending on the weather model, the cool down may last two to five days with highs dropping 5-15 degrees. This is a large temperature range and indicates considerable uncertainty regarding the strength and longevity of the projected event.

Models indicate that the heat will return after next week’s brief cool down, but also indicate that monsoon moisture may become a more significant contributor to thunderstorm development across western Nebraska. Although confidence is low that these models have correctly identified this scenario, at least there is a glimmer of hope that some welcome moisture may make its way into the state during the latter half of next week.



Agriculture Secretary Vilsack Announces New Obama Administration Efforts to Assist Farmers and Ranchers Impacted by Drought

Agriculture Secretary Tom Vilsack today announced new flexibility and assistance in the U.S. Department of Agriculture's major conservation programs to get much-needed help to livestock producers as the most wide-spread drought in seven decades intensifies in the United States. Vilsack also announced plans to encourage crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums, as some farming families can be expected to struggle to make ends meet at the close of the crop year.

"President Obama and I are committed to getting help to producers as soon as possible and sustaining the success of America's rural communities through these difficult times," said Vilsack. "Beginning today, USDA will open opportunities for haying and grazing on lands enrolled in conservation programs while providing additional financial and technical assistance to help landowners through this drought. And we will deliver greater peace of mind to farmers dealing with this worsening drought by encouraging crop insurance companies to work with farmers through this challenging period. As severe weather and natural disasters continue to threaten the livelihoods of thousands of our farming families, we want you and your communities to know that USDA stands with you."

The assistance announced uses the Secretary of Agriculture's existing authority to help create and encourage flexibility within four USDA programs: the Conservation Reserve Program (CRP), the Environmental Quality Incentives Program (EQIP), the Wetlands Reserve Program (WRP), and the Federal Crop Insurance Program.

Conservation Reserve Program (CRP)
To assist farmers and ranchers affected by drought, Vilsack is using his discretionary authority to allow additional acres under CRP to be used for haying or grazing under emergency conditions. CRP is a voluntary program that provides producers annual rental payments on their land in exchange for planting resource conserving crops on cropland to help prevent erosion, provide wildlife habitat and improve the environment. CRP acres can already be used for emergency haying and grazing during natural disasters to provide much needed feed to livestock. Given the widespread nature of this drought, forage for livestock is already substantially reduced. The action today will allow lands that are not yet classified as "under severe drought" but that are "abnormally dry" to be used for haying and grazing. This will increase available forage for livestock. Haying and grazing will only be allowed following the local primary nesting season, which has already passed in most areas. Especially sensitive lands such as wetlands, stream buffers and rare habitats will not be eligible.

Environmental Quality Incentives Program (EQIP)
To assist farmers and ranchers affected by drought, Vilsack is using his discretionary authority to provide assistance to farmers and ranchers by allowing them to modify current EQIP contracts to allow for prescribed grazing, livestock watering facilities, water conservation and other conservation activities to address drought conditions. EQIP is a voluntary program that provides financial and technical assistance to agricultural producers on their land to address natural resource concerns on agricultural and forest land. The USDA Natural Resources Conservation Service (NRCS) will work closely with producers to modify existing EQIP contracts to ensure successful implementation of planned conservation practices. Where conservation activities have failed because of drought, NRCS will look for opportunities to work with farmers and ranchers to re-apply those activities. In the short term, funding will be targeted towards hardest hit drought areas.

Wetlands Reserve Program (WRP)
To assist farmers and ranchers affected by drought, Vilsack is using his discretionary authority to authorize haying and grazing of WRP easement areas in drought-affected areas where such haying and grazing is consistent with conservation of wildlife habitat and wetlands. WRP is a voluntary conservation easement program that provides technical and financial assistance to agricultural producers to restore and protect valuable wetland resources on their property. For producers with land currently enrolled in WRP, NRCS has expedited its Compatible Use Authorization (CUA) process to allow for haying and grazing. The compatible use authorization process offers NRCS and affected producers with the management flexibility to address short-term resource conditions in a manner that promotes both the health of the land and the viability of the overall farming operation.

Federal Crop Insurance Program
To help producers who may have cash flow problems due to natural disasters, USDA will encourage crop insurance companies to voluntarily forego charging interest on unpaid crop insurance premiums for an extra 30 days, to November 1, 2012, for spring crops. Policy holders who are unable to pay their premiums in a timely manner accrue an interest penalty of 1.25 percent per month until payment is made. In an attempt to help producers through this difficult time, Vilsack sent a letter to crop insurance companies asking them to voluntarily defer the accrual of any interest on unpaid spring crop premiums by producers until November. In turn, to assist the crop insurance companies, USDA will not require crop insurance companies to pay uncollected producer premiums until one month later.

Thus far in 2012, USDA has designated 1,297 counties across 29 states as disaster areas, making all qualified farm operators in the areas eligible for low-interest emergency loans. Increasingly hot and dry conditions from California to Delaware have damaged or slowed the maturation of crops such as corn and soybeans, as well as pasture- and range-land. Vilsack has instructed USDA subcabinet leaders to travel to affected areas to augment ongoing assistance from state-level USDA staff and provide guidance on the department's existing disaster resources. To deliver assistance to those who need it most, the Secretary recently reduced the interest rate for emergency loans from 3.75 percent to 2.25 percent, while lowering the reduction in the annual rental payment to producers on CRP acres used for emergency haying or grazing from 25 percent to 10 percent. Vilsack has also simplified the Secretarial disaster designation process and reduced the time it takes to designate counties affected by disasters by 40 percent.

USDA agencies have been working for weeks with state and local officials, as well as individuals, businesses, farmers and ranchers, as they begin the process of helping to get people back on their feet. USDA offers a variety of resources for states and individuals affected by the recent disasters. For additional information and updates about USDA's efforts, please visit www.usda.gov/drought.



Aphids in Corn and Sorghum
Bob Wright, UNL Extension Entomologist

Greenbugs should be monitored closely for the next couple of weeks in case economically damaging populations develop. Predator populations, particularly lady beetles and greenbug parasites, may be found in many fields. The greenbug parasite is highly effective in controlling greenbugs if it gets started early.

The adult parasite is a small wasp that lays eggs inside greenbugs. The immature stage (larva) of the parasite develops internally and ultimately kills the greenbug. Just before completing development, the larva causes the greenbug exoskeleton to swell and change to a tan color. This is the parasite pupal stage, called a mummy. The wasp will emerge from the mummy in one to two days.

Because parasites and predators can be highly effective in controlling greenbugs, delay use of insecticides until economic thresholds are reached.

Most insecticides registered for greenbug control usually provide excellent control. Insecticide-resistant greenbugs have occasionally been present in Nebraska, but there have not been any recent reports of insecticide failure in Nebraska.

Treatment Thresholds
Plants 6 inches tall to boot stage: Treat if greenbug colonies are beginning to cause red or yellow leaf spotting on most plants; before any entire leaves are killed, and if parasite numbers are low (less than 20% of greenbugs are mummies).

Boot to heading: Treat if greenbug colonies are present on most plants and have killed one lower leaf and if parasite numbers are low (less than 20% of greenbugs are mummies).

Heading to hard dough: Treat if greenbug colonies are present on most plants and have killed two normal-sized leaves and if parasite numbers are low (less than 20% of greenbugs are mummies).

Corn Leaf Aphids
Corn leaf aphids are beginning to appear in corn fields. Their survival is favored by dry weather, which inhibits the activity of fungal pathogens which often help control these insects in a year with more frequent rainfall.  Corn leaf aphids cause the greatest amount of injury while they are feeding within the whorl. Sometimes , if they are very abundant, they can interfere with pollination. They are less likely to cause damage after pollination unless they are very abundant.

Treatment
There are no research-based treatment thresholds for corn leaf aphids in corn after pollination. Treatment would be most likely to increase profit in later planted field, or fields under drought stress with high populations of aphids associated with leaves or tassels killed by previous aphid feeding.



Branstad Reminds Iowa Public of Harvesting Grass in Ditches

Iowa Gov. Branstad encouraged farmers to harvest grass in the state highway right of way as a way to help combat this summer's drought.

"Under the hot and dry conditions that the state is and has been experiencing, farmers are searching for alternative ways to feed their livestock. Harvesting grass along the side of state roads is an efficient and economical mean for farmers to maintain their livestock levels," said Branstad.

Farmers are allowed to legally mow and bale grass on highway right of ways only during certain periods of the year as established by the Iowa Department of Transportation.

Persons interested must have a permit, granted by the Iowa DOT, before mowing. The permit form can be found online. All work should be performed between 30 minutes after sunrise and 30 minutes before sunset.



USDA:  Iowa Egg Production

Egg  production  in  Iowa  for  June  2012  was  1.19 billion  eggs, down 3 percent  from  last month and down  fractionally  from  last year,  according  to  the  latest  Chickens  and  Eggs  release  from USDA’s  National  Agricultural  Statistics  Service.   The  total number  of  layers  on  hand  during  June  was  51.8 million,  down 1 percent  from  last  month  and  down  2  percent  from  the 52.7 million  layers  in  June  2011.    Eggs  per  100  layers  for  the month  of  June were  2,286,  4  percent  lower  than  last month  but 1 percent higher than last year.

US Chickens & Eggs
United States egg production totaled 7.50 billion during June 2012, down slightly from last year. Production included 6.47 billion table eggs, and 1.03 billion hatching eggs, of which 965 million were broiler-type and 68 million were egg-type. The total number of layers during June 2012 averaged 337 million, up slightly from last year. June egg production per 100 layers was 2,227 eggs, down slightly from June 2011.

All layers in the United States on July 1, 2012 totaled 335 million, down slightly from last year. The 335 million layers consisted of 281 million layers producing table or market type eggs, 51.6 million layers producing broiler-type hatching eggs, and 2.81 million layers producing egg-type hatching eggs. Rate of lay per day on July 1, 2012, averaged 73.9 eggs per 100 layers, down 1 percent from July 1, 2011.



Dairy Situation and Outlook
Bob Cropp, Professor Emeritus, University of Wisconsin Cooperative Extension

The milk price outlook has changed dramatically from last month. Days of high summer temperatures along with high humidity over much of the U.S. has put milk cows under stress reducing both the level of milk production and butterfat tests. Lower butterfat tests also reduce the yield of dairy products per 100 pounds of milk. In addition, drought conditions over about 58% of the U.S. has reduced the yield of hay per acre and deteriorated the condition of both corn and soybeans. Dairy farmers are concerned about not only the cost of hay, other forages and grain and concentrate prices this fall and winter, but also having enough feed supplies to maintain their cow numbers. If significant rainfall would develop fairly soon, some improvement in the feed situation could improve. Dairy farmers will be assessing their feed situation for fall and winter and making decisions as to whether or not to reduce cow numbers. But, a reduction in the size of the nation’s dairy herd will likely occur this fall and winter. In July USDA revised downward its milk production forecast for 2012 and 2013 due to concern over high feed costs reducing returns to dairy farmers that will reduce cow numbers as well as milk per cow. In June USDA had forecasted 2012 milk production being up 3.3% from 2011. This has been revised down to an increase of 2.8% with almost no increase for 2013. But, drought conditions have worsened since then, and as a result December corn futures are $8 per bushel, November soybeans are $16.50 per bushel and hay prices will be increasing substantially. So a further downward revision for 2012 and 2013 milk production is likely.

The effect of high temperatures and humidity on milk production was already evident in USDA’s release of June milk production. Milk per cow for the 23 reporting states and estimated for the U.S. was just 0.4% higher than a year ago. But, of the 23 reporting states only 5 had a less milk per cow than a year ago—California, Texas, New Mexico, Pennsylvania and Iowa, and 3 had no change—Oregon, Virginia and Washington. But, hot and humid weather continues to persist during July which likely will show a great impact on milk per cow for the month of July.

After increasing month-to-month starting back in October of 2010, both for the 23 reporting states and the U.S., milk cow numbers have declined for two consecutive months, May and June. For the 23 reporting states cow numbers were still 0.7% higher than a year ago and for the U.S. 0.5% higher. Of the 23 reporting states, 7 had reduced cow numbers from May to June, 13 had no change and 3 had more cows. But, with the anticipated feed situation we can expect more states with a decrease in cow numbers by fall.

The increase in milk production continues to slow down. Compared to a year earlier, June milk production for the 23 reporting states was up just 1.0% compared to an increase of 1.9% in May and about 3.9% January through April. For the U.S June milk production was estimated to be just 0.9% higher than a year ago. For the 23 reporting states June milk production was lower than a year ago for just 5 states—New Mexico 1.9%, Texas 2.2%, Pennsylvania 2.2%, Iowa 1.4% and Minnesota 0.3%. June milk production was 2.7% higher for Arizona, but up just 0.3% in California and 1.4% in Idaho. New York still had an increase of 1.4%, Michigan 3.6% and Wisconsin 2.5%. But, reports are coming in with significant fall offs in milk volumes by some milk plants in the Northeast and Midwest. The milk production report for July will likely show a further slowdown in milk production.

Dairy product prices are reacting to lower and anticipated lower levels of milk production. On the CME, butter averaged $1.48 per pound in June and is now $1.585 despite May 31st stocks up 55.4% from a year ago. Cheddar barrels averaged $1.59 per pound in June and are now $1.695. Cheddar blocks averaged $1.63 per pound in June and are now $1.7175. As of May 31st American cheese stocks were about the same as year ago and total cheese stocks were 1.9% lower. Nonfat dry milk and dry whey prices have been firm with May 31st stocks of nonfat dry milk 31.1% higher than a year ago and dry whey stocks 5.2% lower. Dairy product prices will increase further in the weeks ahead. Current dairy product prices will put the July Class III price near $16.70, up from $15.63 in June and the July Class IV price near $14.45, up from $13.24 in June.

Dairy product sales have been mixed. Through April of this year, fluid (beverage) milk sales have been 3.1% lower than a year ago, butter sales 5.4% lower, but American cheese sales were 1.0% higher and other cheese varieties 1.2% higher. Dairy exports have been very positive thus far. Compared to a year ago, May exports of Nonfat dry milk/skim milk powder were up 31%, total whey proteins up 18%, cheese up 43%, but butter was 2% lower. With dairy product prices increasing making them less competitive on the world market exports later this year could slow down.

The milk price outlook beyond July and for the first half of 2013 is much higher than what was projected earlier. The final feed supply situation and feed prices for this fall and winter will be major factors determining how high milk prices will go. Class III futures have the August Class III at $17.72, increasing to $18.75 by September and staying well above $18 through May of 2013. Class IV futures are $15.75 for August, above $16 for September through December and then staying at $15.50 or higher through May of 2013. Could prices go even higher? The answer is yes, but higher prices could dampen both domestic sales and dairy exports that could hold down higher prices. Record dairy exports accounting for 13% of milk production on a total solids basis last year was a major factor for the Class III price reaching a record $21.67 in August of last year. So exports will remain a major factor as to whether $20 plus Class III prices could happen later this year and into 2013.



CWT Assists with 4.8 Million Pounds of Cheese and Butter Export Sales

Cooperatives Working Together (CWT) has accepted 18 requests for export assistance from Bongards Creamery, Dairy Farmers of America, Darigold and Foremost Farms to sell 4.548 million pounds (2,063 metric tons) of Cheddar and Monterey Jack cheese, and 220,462 pounds (100 metric tons) of butter, to customers in Asia, Central America, North Africa and the Middle East. The product will be delivered July through December 2012.

In 2012, CWT has assisted member cooperatives in making export sales of Cheddar, Monterey Jack and Gouda cheese totaling 70.1 million pounds, and butter and anhydrous milk fat totaling 55.1 million pounds (adjusted for cancellations), to 32 countries on four continents. On a butterfat basis, the milk equivalent of these exports is 1.848 billion pounds, or the same as the annual milk production of 88,000 cows.

Assisting CWT members through the Export Assistance program positively impacts producer milk prices in the short-term by reducing inventories that overhang the market and depress cheese and butter prices. In the long-term, CWT’s Export Assistance program helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the farm milk that produces them.

CWT will pay export bonuses to the bidders only when delivery of the product is verified by the submission of the required documentation.



Supply Management Would Have Already Reduced Milk Supplies Soon To Be Further Reduced By Drought Conditions

A proposal in the new Farm Bill headed to the House floor would have been limiting U.S. milk production since May, if it had been in effect, even as agriculture economists and the U.S. Department of Agriculture are warning that the drought throughout the country will reduce milk supply and raise consumer prices.

According to calculations set out in the bill using current USDA data, the proposed "Dairy Market Stabilization Program" (DMSP) would have been in effect starting in May and would likely still be in effect today. This new government program would force milk companies to short payments to dairy producers and send the difference to the government. Producers would be subjected to the penalty until they reduced milk production.

The new program would allow the government to manipulate farm milk prices when producers' profits falter, effectively reducing the milk supply until milk prices increase. Dairy farmers enrolled in the program would have had their revenue reduced from 2 percent to 6 percent in May and possibly by 3 percent to 7 percent in June of this year. As a result of the lost revenue, farmers would be expected to reduce their milk production, most likely by reducing herd size.

The Farm Bill also calls for a new subsidized revenue insurance program that would simultaneously provide payments to dairy farmers to partially or totally offset the revenues lost through the stabilization program. Both programs have been included in the Farm Bill that passed the Senate in June and was endorsed by the House Committee on Agriculture earlier this month.

"Not only will consumers be facing higher prices in the near future, because cows produce less milk during high heat conditions, and the cost of feed will be higher, but this new program would have already dug the hole deeper," said Connie Tipton, president and CEO, International Dairy Foods Association.

"This is an excellent example of why it doesn't make any sense for Congress to attempt to manage the supply of milk," said Jerry Slominski, senior vice president, International Dairy Foods Association. "The weather changes faster than government can change its rules and regulations, and this will cause prices to swing more wildly once the impacts of the drought are felt by the industry."

The House Committee on Agriculture considered striking the new government milk supply management program, but an amendment offered by Congressman Bob Goodlatte of Virginia and Congressman David Scott of Georgia was defeated. Speaker of the House John Boehner recently stated that our dairy programs are "Soviet-style" and that one of the proposals in the bill "makes it worse."



National Milk Producers Federation Statement on IDFA News Release on Milk Supplies
from Jerry Kozak, President and CEO of NMPF

"The International Dairy Foods Association (IDFA) has mischaracterized the real issue facing dairy farmers this summer.

"Summer heat always leads to a slowdown in milk output – this year will be no different – but the USDA reported last week that milk production in the second quarter of 2012 was up 2.0% compared to 2012, while the first quarter was up a whopping 5.3%. The U.S. is well on track to produce a record volume of milk this year, a hot summer notwithstanding.

"As a result, farmers’ prices this June were down 18% from June 2011, 30 cents a gallon less. Consumers really should be asking if the price they pay at retail for dairy products have dropped by the same amount. The answer is, retail prices haven’t changed, even as the farm price this year has reflected the fact that supply has raced ahead of demand. Meanwhile, grain prices reflect the opposite: that supplies are short in relation to demand.

"The dairy policy provisions in the Senate and House farm bills are tied to the critical difference between the farmer’s milk price, and the cost of feed.  When that margin contracts to dangerously low levels, those who volunteer to use the proposed program will be insured against these low margins – and they are also expected to trim their milk output until margins reach healthy levels.

"These summer temperatures, and the possibility of a poor crop harvest, are exactly why we need a dairy farm safety net that takes into account higher feed prices, and also gives us a tool to better align supply and demand. Relying on the weather to perform this process is foolish."