Friday October 26 Ag News

PROJECT CONTRACT SIGNED; TAX BASE, ECONOMY TO BE PROTECTED 

Following action by four Natural Resources Districts in the last week, a purchase contract has now been signed that brings the group a step closer to launching a stream flow enhancement project expected to aid and protect the Republican and Platte Rivers, local schools and other political subdivisions that rely on property tax revenues, and both agricultural and municipal water users.

Kansas has sued Nebraska over Republican River Compact compliance and is seeking the permanent shutdown of roughly 300,000 irrigated acres in the basin that stretches from Haigler to Hardy, Neb. The project being pursued by the NRDs could help prevent a shutdown of that magnitude in the future. Such a shutdown would have staggering financial consequences, reducing property tax revenue from irrigated land by millions of dollars annually and potentially shifting more of the property tax burden to owners of residential, commercial and other non-irrigated property.

The stream flow enhancement will protect the existing property tax base of irrigated land and be paid for by irrigators via the occupation tax on irrigated land, not by all property owners.

  “When it comes to providing long-term financial stability to our schools throughout the Basin, and assuring our kids get the first-rate educations they deserve, this project is a wise choice,” said Joe Anderjaska, President of the Hayes Center Public Schools Board of Education and a Middle Republican Natural Resources District board member. Anderjaska is also president of the Nebraska Association of Resources Districts.

Lacking a stream flow enhancement project such as the one NRDs in the Republican Basin expect to operate, compliance with the Republican River Compact would still be achieved, even in dry times, because of comprehensive water-management plans they have developed with the State of Nebraska. But doing so would require the use of severe regulations that could completely shutdown irrigation in some areas in dry years. In the Middle Republican NRD, for example, all irrigators could face drastic regulations in dry years. Should exceptionally severe regulations be imposed throughout the Middle Republican NRD, for example, lost revenue from decreased yields could be roughly $200 million or more in just one year.

“The local economy would be a disaster and local businesses would be in trouble,” if severely reducing water-use allocations was the only option used by NRDs to maintain compliance, said state Sen. Mark Christensen. Christensen, who supports the stream-flow enhancement project, said: “I support the ability to keep Nebraska in compliance with the Compact through the use of the occupation tax. We have to rely on projects like this to keep water allocations at reasonable levels.”

The project proposes to transport water, via a pipeline, to the Republican and Platte Rivers that otherwise would have been consumed by crops on a large swath of irrigated land in southern Lincoln County. A significant amount of engineering design must still be completed, but it is expected that the project could add a total of roughly 45,000 acre feet of water to both the Republican and Platte Rivers in years when needed to maintain compliance with both the Republican River Compact and the Platte River Recovery Implementation Program. In the Platte, NRDs are responsible for returning that basin to water supply-and-demand conditions that existed in 1997 and ultimately reversing an over-appropriated designation to fully appropriated status under state law.

The amount of water available under the project is expected to be enough to close most of the gap between supplies and allowable use under the Republican River Compact that historically has existed in the Republican Basin during exceptionally dry years.

Water-supply alternatives to meet legally mandated objectives in both the Platte and Republican Basins could be much more expensive than costs associated with the project now being pursued by NRDs. Including land, project development and operations, producing water under the project for both river basins could cost between $300 and $500 an acre foot. By comparison, leasing surface water from irrigation districts in the Republican Basin can cost between $2,000 - $3,000 an acre foot. Permanently retiring irrigated acres close to streams without piping the water and instead allowing groundwater to seep into rivers and tributaries to increase flows can cost approximately $3,000 an acre foot, or more.

Under the proposed project, water that otherwise would have been irrigated and consumed by crops on a Lincoln County farm with 15,800 irrigated acres will instead be piped into the Republican and Platte Rivers when needed. The NRDs involved in the project – Twin Platte NRD and the Upper, Middle and Lower Republican NRDs – expect to close on the property in November.

“The project shows the tradition of local Nebraskan’s working together.  The local NRD Board members that voted for this project demonstrates the ability of local Nebraskans getting together, analyzing the challenges at hand and developing a long-term solution to the problem,” said Dean Edson, executive director of the Nebraska Association of Resources Districts.

The proposed project has benefits beyond compliance with interstate water agreements in the most cost-effective way and protecting the regional tax base.

One such benefit is refilling municipal well fields in the Basin by providing additional recharge to alluvial wells.

Stream flow enhancement will do more to increase stream flow during dry times than regulations, and dry times are when it is most important that well fields receive stream seepage. This project, in conjunction with the Rock Creek Steam Flow Enhancement Project in the Upper Republican NRD, will provide recharge to communities in the Republican Basin, and the Platte Basin from North Platte east.

“Three irrigation districts in the Platte Basin have entered agreements in Dawson County with the Central Platte NRD which is downstream from the new augmentation site.  The agreements between the Central Platte NRD and these irrigation districts provides another opportunity to put the additional water to beneficial recharge when certain conditions exist, thus providing more benefits downstream in the Platte Basin,” said Ron Bishop, general manager of the Central Platte NRD.

The project will also aid the surface-water irrigation system in the Republican Basin. The project could allow more surface water deliveries during dry years and limit regulations on surface water. And running water through the canals during dry times will help water supplies by providing additional recharge.

It is uncertain when exactly the proposed project will be operational, but the NRDs hope to have it in place during the second half of 2013. 



Commercial Red Meat Production Down From Last Year

Commercial red meat production for the United States totaled 3.95 billion pounds in September, down 6 percent from the 4.19 billion pounds produced in September 2011.

Sept 2012 state production
Iowa ..............:     555.4 million pounds, -1% from Sept 2011      
Kansas .........:     404.6 million pounds, -9% from Sept 2011      
Nebraska ......:     587.8 million pounds, -5% from Sept 2011      

Beef production, at 2.02 billion pounds, was 9 percent below the previous year. Cattle slaughter totaled 2.54 million head, down 12 percent from September 2011. The average live weight was up 33 pounds from the previous year, at 1,311 pounds.

Veal production totaled 8.8 million pounds, 17 percent below September a year ago. Calf slaughter totaled 64,300 head, down 13 percent from September 2011. The average live weight was down 17 pounds from last year, at 235 pounds.

Pork production totaled 1.91 billion pounds, down 2 percent from the previous year. Hog slaughter totaled 9.45 million head, down 2 percent from September 2011. The average live weight was up 1 pound from the previous year, at 271 pounds.

Lamb and mutton production, at 12.5 million pounds, was up 6 percent from September 2011. Sheep slaughter totaled 174,300 head, 2 percent below last year. The average live weight was 145 pounds, up 11 pounds from September a year ago.

January to September 2012 commercial red meat production was 36.6 billion pounds, up slightly from 2011. Accumulated beef production was down 2 percent from last year, veal was down 10 percent, pork was up 3 percent from last year, and lamb and mutton production was up 4 percent.



Another Farmland Sale Record Broken in Iowa

The state of Iowa has seen another broken record in the trend of high farmland prices.  The Land Owner newsletter reports that a 80.5 acres parcel located southwest of Boyden was sold this week by Rich Vander Werff, Vander Weff & Associates, Inc. for $21,000/acre.  It featured 79 flat tillable acres and carried a CSR of 84.1.



Low-Water Impacting the Missouri and Mississippi Rivers

The Waterways Council (WCI) reported that low-water on both the Missouri and Mississippi Rivers, resulting from drought conditions, will further impact channel depths from St. Louis to Cairo, Ill., which rely on flows from Missouri River reservoirs. Those flows will be decreased near the end of November, with the full impacts felt on the Mississippi River by mid-December.

WCI is working with American Waterways Operators on this issue, and is developing a plan to mitigate the effects moving forward. The Army Corps of Engineers has set up a Task Force which will meet with waterways industry groups in early November.



Double Trouble for Soybean Cyst Nematode
When it comes to soybean cyst nematode, which costs U.S. soybean farmers $1 billion annually in crop losses, farmers can never have enough potential solutions. Twice recently, research funded by the United Soybean Board and soy checkoff has yielded potential breakthroughs in fighting off this devastating disease.

In a paper titled 'A Soybean Cyst Nematode Resistance Gene Points to a New Mechanism of Plant Resistance to Pathogens,' scientists reveal that they identified and validated the gene at the Rhg4 locus, a major driver in a soybean plant's resistance to SCN.

"The checkoff has a number of projects that aim to identify the genes in a soybean plant that can effectively control SCN," says USB Production program Chair Jim Schriver, a soybean farmer from Bluffton, Ind. "Even though there are different types of SCN, if we could take advantage of those genes that control resistance, it would be effective for all types of SCN."

The study, published recently in the online journal Nature, is the first to identify the gene and its mechanism for creating resistance, according to the article’s lead authors, Khalid Meksem, Ph.D., of Southern Illinois University Carbondale and Melissa Goellner Mitchum, Ph.D., of the University of Missouri at Columbia.

"Funding and support from USB and the soy checkoff have been crucial to this new discovery of disease resistance, which will be used to develop products that will benefit U.S. soybean farmers," says Meksem, associate professor of plant, soil science and agricultural systems at SIUC. "This discovery comes at a time when farmers need new solutions, as the nematodes adapt and find ways through the soybeans' defenses."

The team hopes their research will lead to a better understanding of how the resistant genes work and ultimately lead to improved crop yield.

A separate checkoff-funded project recently found that soybean plants with multiple copies of a multi-gene block known as Rhg1 also show better resistance to SCN. Both projects allow researchers to focus on these gene structures - Rhg1 and Rhg4 - to help them develop SCN-resistant U.S. soybean varieties.



IGC Raises SA Soy Outlook

The International Grains Council Friday raised its forecast for global soybean output in the 2012-13 aggregate year by 8 million metric tons to 264 million tons on the back of revised expectations for crops in South America.

If the revised forecast is realized, global production will rise by 11% compared with actual output in 2011-12, despite a disappointing U.S. crop, the IGC said in a monthly report.

Soybean futures on the Chicago Board of Trade hit a record in September due to successive droughts in South America and U.S., the world's largest suppliers. A rebound in output would likely prevent prices from testing fresh highs.

"Early indications are that the farmers in Argentina and Brazil will plant a record acreage of soyabeans," the IGC said.

Favorable weather conditions may propel a 7% expansion in Brazil's soybean acreage in 2012-13, which along with improved yields could push output up by 21%, to 80.5 million tons, it said.

Drought last year significantly reduced yields in South America. The IGC forecast record soybean output in the region in the coming year, at 146.4 million tons, up 28% on year.

As of mid-October, around 9% of the plantings have been completed in Brazil, despite delays in southern and central regions, which are presenting relatively challenging conditions, with the south being too wet and the center rather dry, the IGC said.

The IGC raised its forecast for global trade in soybeans in the marketing year that started Oct. 1 by 1.8 million tons, to a record 95.6 million tons. This would be a 4.7% on-year increase, which the council attributed largely to further strong demand growth from China.

The IGC forecast China's soybean consumption to rise 7% on year to a record 75.3 million tons in 2012-13, mainly due to stronger animal feed demand. It put China's soybean imports at a record 60 million tons, up from 57 million tons in 2011-12.

The IGC said the global soymeal trade is also expanding. It forecast a 2.3% on year rise to a record 58.3 million tons in 2012-13 due to strong demand in the European Union and East Asia.

It said soymeal imports by the EU, the world's largest importer, will likely rise around 5% on year to 22.6 million tons on the back of tight supplies of alternative feed ingredients, such as rapeseed, also known as canola. The EU is switching to direct imports of soymeal in lieu of buying soybeans, it said.

Soymeal exports by India, Asia's largest exporter, are forecast at 4.6 million tons, down from 4.8 million tons, the IGC said.

It forecast the global canola trade in 2012-13 to fall by 11% on year to 11 million tons, citing constrained demand due to tight supply and high prices.



Coming Your Way: Export Exchange International Grains Buyers

Fresh from the record-attendance Export Exchange conference in Minneapolis, teams of international grain buyers fanned out across America, from Ohio to Washington State, and Minnesota to Louisiana. Their goal: to gain information, assess the current U.S. corn crop, explore the availability of other grains such as sorghum and barley, and build relationships leading to future sales.

More than 200 international buyers and end-users had flocked to Minneapolis from Oct. 22-24 to meet with U.S. suppliers and to hear from industry and government leaders about the near- and long-term prospects for U.S. export capacity. CHS President and CEO Carl Casale’s keynote address set the theme: managing risk in the face of soaring demand for feed grains, a short U.S. crop in 2012, and major uncertainties on the geopolitical horizon. USDA Chief Economist Joe Glauber, farmer and industry leaders, and observations from major foreign buyers and end-users of U.S. feed grains rounded out the picture.

“Everyone present -- more than 200 foreign guests and about 300 U.S. producer and agribusiness representatives -- recognized that this will be a challenging year,” said U.S. Grains Council President and CEO Tom Sleight. “That’s why our international partners are so eager to talk with U.S. producers about their intentions and prospects for next year.”

Teams from Saudi Arabia, Egypt, Turkey, Mexico and Taiwan got a head start, visiting U.S. farms, agribusinesses, and export terminals before heading to Minneapolis. Following Export Exchange, even more teams hit the road: a Japanese team to Iowa and Minnesota; a European team to Nebraska; a Chinese team to Ohio and Louisiana, among others.

“It’s one thing to sit in a conference room and hear industry and government leaders talk about how U.S. producers always bounce back strong,” Sleight continued. “Export Exchange provided that, and more. But there is still no substitute for the ground truth you get from getting out into the field, and talking directly to farmers and exporters. That’s what our Export Exchange guests are doing now.”

Many participants expressed a continuing preference for buying U.S. grains due to the consistency and quality of the grain and the transparency and reliability of the U.S. marketing and delivery systems. While price and availability will clearly be major impediments to U.S. exports this year, due to the drought, the buyer sentiment was clear: they are looking forward to a better crop next year, and a U.S. export sector that comes back strong.



Drought Conditions Have An Upside: Minimal Scab Appearance

Abnormally dry conditions in much of the United States this year resulted in disappointing yields for many farmers, but had at least one upside: minimal problems with Fusarium head blight, also known as scab, and vomitoxin (DON), the mycotoxin it creates. Very few areas had significant issues with the disease in 2012, scientists are reporting. The most recent issue of the U.S. Wheat and Barley Scab Initiative’s (USWBSI's) electronic newsletter includes a detailed recap of the season in scab for each grain-growing region.

From the Great Plains / Hard Winter Wheat Belt...
The broken-record (in a good way) 2012 FHB story continues in the Southern Great Plains, where Oklahoma State University extension wheat pathologist Bob Hunger reports no detection of Fusarium Head Blight in that state’s wheat crop.  “Although weather in the spring of 2012 was wet and cooler as compared to 2011, the periods of moisture and moderate temperatures were interspersed with hot and dry conditions that prevented FHB from becoming an issue,” he says.  Fungicide use for the control of foliar diseases actually expanded substantially in 2012, but Hunger knows of no instances where applications were made exclusively for scab management.

Just to the north, Kansas State University extension plant pathologist Erick De Wolf likewise reports overall low levels of scab in 2012, with the disease being  “completely absent in most areas of the state.”  “Conditions became dry around the time the wheat flowered, and significant drought developed as harvest approached,” he relates.  “It is clear that heat and drought were among the most important factors affecting wheat production in Kansas this year.”

Such is the story in Nebraska as well.  Dry weather, coupled with a shorter growing season (the wheat crop matured three to four weeks earlier than normal), prevented develop- ment of scab in 2012, says University of Nebraska extension plant pathologist Stephen Wegulo.  “Trace levels of the disease were seen in a few fields in southeast Nebraska — and only in low-lying spots in the field,” he notes. “But overall, losses due to scab were negligible.”

Whereas scab was a major problem in parts of South Dakota in 2011, its effect was minimal this year.  A key reason, not surprisingly, was the dry-to-drought growing conditions across much of the state.  “Winter wheat had a little more scab than spring wheat, but nothing that was significant,” says Kay Ruden, extension/research associate with South Dakota State University.  “The reports across the state of DON levels in winter wheat were from ‘no detectable’ levels to 1.0 ppm,” she notes, adding that as of early September, she knew of no DON being detected in the 2012 spring wheat crop.

South Dakota State University released two new spring wheat varieties this year with moderate resistance to scab: Forefront and Advance.  Several other varieties of both spring and winter wheat with scab resistance also were planted in the state in 2012.  That resistance did not impact wheat yields and quality this year due to the absence of scab; but “in years when scab is more prevalent, we see a greater impact of choosing those resistant varieties,” Ruden points out.  More South Dakota wheat producers appear to be accessing the national scab prediction model each year to assess the threat of disease in their area, Ruden adds.

The entire summary is available in full at http://www.scabusa.org/pdfs/fus-focus_10-2012_newsletter.pdf.




Argentina Soy Planting Starts Slowly

Argentina's 2012-13 soybean planting is kicking off in fits and starts, as a series of recent heavy rains has slowed progress, the Buenos Aires Cereals Exchange said in its weekly crop report Thursday.  Still, a bumper soybean crop is expected for the season.

To date, just 2% of the record 19.7 million hectares seen going to soybeans this season have been planted, down 4.2 percentage points from a year earlier, the exchange said.

Early planting is expected to continue slowly, as many low-lying fields are flooded and more rain is expected across much of the farm belt over the next week.

But Argentina's farmers are on track to shatter production records for both soybeans and corn this season, encouraged by high global prices and aided by wet weather.

Argentina is the world's No. 3 soybean exporter behind Brazil and the U.S. and is the world's leading exporter of soyoil and soymeal. Prices of the oilseed, a key animal feed, have surged this year as drought has battered the U.S. crop and stoked supply fears.

Production from the 2012-13 Argentine soybean crop is expected to reach 55 million-60 million metric tons, smashing the previous record of 52.7 million tons set in 2009-10, according to Agriculture Ministry sub-secretary Oscar Solis.

The El Nino weather phenomenon is seen continuing to bring heavier-than-normal showers throughout the growing season and boosting yields.

Prospects for Argentina's corn crop are also good, although planting also has been stalled in many areas due to the heavy rains, the exchange said. So far, 36.8% of the corn crop has been planted, down 18.3 percentage points on the year.

Argentina is the world's second-largest corn exporter, behind the U.S., although Brazil appears set to pass it this season. The wet conditions and high prices are expected to stoke more planting, denser planting and more use of fertilizer, all of which should combine to drive up corn yields.

The Agriculture Ministry expects a 2012-13 corn crop of 28 million-30 million tons, breaking the previous record of 24 million tons set in 2010-11.

The Buenos Aires exchange, however, has trimmed its forecast for sunflower seed cultivation by 200,000 hectares, to a total 1.8 million hectares. That's down 3.2% from last season. To date, 45.3% of the crop has been seeded. The country is also one of the world's top exporters of sunflower seed oil.

Meantime, Argentine farmers have started to gather winter wheat, with 4% of the crop harvested to date, the exchange said. Heavy rainfall has flooded many fields and is increasing the risk of outbreaks of fungus and other crop diseases. But conditions are very good in the important wheat growing areas of the south and southeast parts of Buenos Aires province, the exchange said.

The exchange held its forecast for 2012-13 wheat production at 10.12 metric tons. That's down from the 13.2 million tons the government estimates was grown last season. Government export limits on wheat have driven down prices and led many farmers to shun planting the grain.

Argentina is a major exporter of wheat, with about half of the crop being shipped to neighboring Brazil.



Russia Grain Harvest Down 23%

Russia's grain harvest for this year is 23% lower than last year's volume due to a drought in the region.

Russia harvested 72.2 million metric tons of grain to Oct. 26, 23.1% less than for the same date last year, the agriculture ministry reported Friday.

The grain was harvested on 38.4 million hectares or just over 98% of the total area to be harvested, and average yield to date was 1.88 tons a hectare compared with 2.31 tons/ha a year ago.

The ministry said wheat harvest to date was 39.6 million tons on 99% of the total area to be harvested, compared with 58.9 million tons on the same date last year. Wheat average yield to date was 1.85 tons/ha compared with 2.38 tons/ha last year.

Barley harvest to date was 14.5 million tons on 98% of the total area to be harvested, compared with 17.6 million tons a year ago. Barley average yield to date was 1.9 tons/ha compared with 2.29 tons/ha last year.

Corn harvest to date was 5.6 million tons on 70% of the total area to be harvested, compared with 3.7 million tons a year ago. Corn average yield to date was 4.09 tons/ha compared with last year's 4.41 tons/ha.

The agriculture ministry expects this year's grain harvest to be 71.7 million tons and the grain export in the 2012-2013 marketing year to be 10-12 million tons. In 2011 Russia harvested 94.2 million tons of grain and exported 27.2 million tons in the 2011-2012 marketing year.




Ukraine Harvest Down 16%

Ukraine's grain harvest is lagging 16% behind last year as the crops have been negatively affected by drought.

Since harvesting began in mid-June, Ukraine harvested to Oct. 25 40.76 million metric tons of grain on 13.65 million hectares, or 92% of the total area to be harvested, with the average yield of 2.98 tons a hectare, the agriculture ministry reported Friday.

The ministry said on the same date last year Ukraine harvested 48.52 million tons of grain on 14 million hectares with the average yield of 3.46 tons/ha.

The ministry said the corn harvest to date was 14.47 million tons on 3.36 million hectares, or 76% of the total area to be harvested, with the average yield of 4.3 tons/ha.

Ukraine planted spring grains this year on 8.9 million hectares, 17.1% more than a year ago. The total grain planted area this year, including winter and spring grains is 15.9 million hectares, the same as last year.

The Ukraine national weather center said July 6 Ukraine was likely to harvest this year 43 million tons of grain, compared with last year's 56.7 million tons. The weather center said the fall in harvest would be due to the drought that had been negatively affecting crops over the past few months.

The agriculture ministry said Sept. 12 it expected harvest this year between 46 million tons and 46.5 million tons.

Ukraine Exports 8.06 MT Grain to Oct 26
Ukraine exported 8.06 million metric tons of grain between the beginning of the current marketing year July 1 and Oct. 26, about 73% more than in the corresponding period last year, the agriculture ministry reported Friday.

Grain exports have been greater at the beginning of this marketing year due to the large amounts of grain left over from the previous year and because this year's harvest began earlier. Wheat export has recently intensified after news that exporting wheat would be banned after Nov. 15. Wheat export in September totaled 1.3 million tons, in the first 25 days of October it was nearly 1.4 million tons and in the last full week of the month it reached 423,000 tons.

The ministry said wheat exports since the beginning of the current marketing year to date totaled 3.99 million tons with the total volume including 3.31 million tons of milling wheat. Barley exports during the period totaled 1.51 million tons and corn exports totaled 2.45 million tons.

The ministry also said storage facilities at sea ports held 1.05 million tons of grain on Oct. 25, including 518,000 tons of wheat. It said 221,000 tons of grain, including 83,000 tons of wheat, had been loaded on ships.

The total amount of grain exported and prepared for export to date was 9.33 million tons, including 4.59 million tons of wheat, it said.

To date 12.13 million tons of grain were contracted for export, the total included 5.53 million tons of wheat -- of which 4.73 million tons was milling wheat -- 1.99 million tons of barley and 4.36 million tons of corn.

The ministry said earlier that Ukraine was likely to exhaust its wheat export potential, which amounts to 5 million tons to 5.3 million tons in the current marketing year, by Nov. 15, after which curbs on the export of wheat would be imposed.

The agriculture ministry expects this year's grain harvest between 46 million tons and 46.5 million tons, compared with last year's 56.7 million tons. Grain exports in the 2012-2013 marketing year were about 20 million tons. In the previous marketing year, Ukraine exported 21.80 million tons of grain.

Because of the smaller harvest, caused by drought, the government, grain producers and traders have agreed this year that Ukraine's wheat exports in the current marketing year shouldn't exceed 5 million tons. According to the agreement, when 4.2 million tons of wheat has been exported, the government will hold consultations with grain exporters to decide on ways to regulate the market. The government has promised that if limitations on wheat exports become necessary it will inform the market two months before the imposition of such limitations.