Tuesday October 2 Ag News

Grazing Alfalfa In The Fall
Larry Howard, UNL Extension Educator, Cuming County

Some good pasture still may be available this fall – from your alfalfa fields!  Alfalfa can provide considerable, high quality grazing this fall.  Grazing avoids the problem of slow curing of hay that often occurs during the fall and eliminates the cost of baling.

Many growers find that grazing alfalfa in the fall provides some special flexibility that often is useful this time of year.  Alfalfa makes an outstanding weaning pasture for spring calves; yearlings gain weight rapidly on fall alfalfa even after summer grass has already died off; cows gain excellent condition before winter by grazing alfalfa during the fall; and ewes and lambs perform very well on fall alfalfa.

Fall grazing of alfalfa is not without problems, though.  Bloat always must be a concern, but after alfalfa has been frosted and started to dry down it has less tendency to cause bloat than summer alfalfa.  The same thing holds true with fully bloomed out alfalfa.  To protect your livestock from bloat, fill them with hay before turning them onto alfalfa.  Also, maintain access to dry hay or corn stalks while grazing alfalfa to help reduce bloat.   Producers can swath the alfalfa ahead of grazing and let animals graze dry hay in the swath.  Of course, bloat protectants like poloxalene can be fed as blocks or mixed with grain.  This can be an expensive supplement, but it works well when animals eat a uniform amount each day.

Also be careful not to damage your alfalfa stand.  Only graze when fields are dry and firm.  Reserve a small sacrifice area to graze and for feeding when soils are wet to avoid damaging the entire field.   If you aren't already doing so, consider alfalfa for late fall pasture.  Its advantages greatly exceed any disadvantages.

Soybean Stubble For Cows
As soybeans are combined, cows sometimes are put out on the residues to graze.  Some bean residues are even baled.  But how good is this feed? 

Producers are familiar with the usefulness of grazing corn stalks, but more residue from soybean fields are grazed every year.  Cows seem to like what’s left behind after combining.  But frankly, some folks may think their cows are getting more from those bean residues than what truly is there.

The problem is a matter of perception.  When most people think of soybeans, they think high protein.  So we expect bean residues will be a high protein feed, too.  Unfortunately, the opposite is true; soybean residue is very low in protein.  Soybean stems and pods contain only about 4 to 6 percent crude protein, well below the 7 to 8 percent needed for minimum support of a dry beef cow.  And even though leaves can be up to 12 percent protein, it’s only around one-third digestible, so that’s not much help.  In fact, protein digestibility is low in all bean residues.

Energy is even worse.  TDN averages between 35 and 45 percent for leaves, stems, and pods.  This is even lower than wheat straw.  Unless cows fed soybean residues also find and eat quite a few beans, cows fed only bean residue can lose weight and condition very quickly.

Now, this doesn’t mean soybean residues are worthless for grazing or even baled.  They can be a good extender of much higher quality hay or silage.  But, cattle must be fed quite a bit of higher energy and protein feeds to make up for these deficiencies in soybean residues.  Don’t be misled into thinking bean residues are as good or better than corn stalks.  Otherwise, you and your cows will suffer the consequences.



Farmers Should Be Looking For On-Farm Research Opportunities This Fall

Two University of Nebraska-Lincoln Extension educators suggest while growers are spending time in their combines this fall they should give some thought as to how weather conditions in 2012 might impact performance of crop inputs and management practices in 2013.

Gary Zoubek and Keith Glewen, co-coordinators for the Nebraska On-Farm Research Network along with other cooperating UNL Extension educators and specialists, are suggesting whether it is irrigated or dryland corn and soybean production, inputs and certain production practices may possibly respond differently in 2013 as the result of unprecedented drought conditions this past growing season.

"This could be a real learning opportunity for growers who are in it for long haul," Zoubek said.

Both Zoubek and Glewen noted the Nebraska On-Farm Research Network provides growers the framework and opportunity to conduct relevant research in their own fields, using their own farm machinery.

"Growers often will comment that their soils and weather conditions are unique and results can vary greatly from their farms and fields as compared to private and public research stations located in the Midwest," Glewen said.

With the assistance of UNL faculty, farm operators can make valid, field-sized and replicated comparisons which can provide growers valuable economic information.

"Whether yield results are measured in a grain cart, weigh wagon or yield monitor, we have documented over a 20-year period of time a significant return on investment for conducting on-farm research," Glewen said.

For more information, interested growers should go to the CropWatch website at www.cropwatch.unl.edu and click on the farm research link.

The Nebraska On-Farm Research Network is sponsored by UNL Extension in partnership with the Nebraska Corn Growers Association and the Nebraska Corn Board.



Vilsack Announces that America's Farm Co-ops Set Records in 2011
It's National Cooperative Month: Co-ops set Sales and Income Records, Number of Co-op Jobs Also up

Agriculture Secretary Tom Vilsack said today that farmer, rancher and fishery cooperatives posted record sales and income in 2011, surpassing the previous record sales year of 2008 by $10 billion while besting the old income record by $500 million. Dallas Tonsager, under secretary for Rural Development, made the announcement on the Secretary's behalf, kicking-off National Cooperative Month. Tonsager said co-op employment levels remained strong, with cooperatives employing 184,000 full-time, part-time and seasonal workers, up slightly from 2010.

"These new cooperative sales and income records for 2011 underscore the strength and productivity of the nation's farmer- and rancher-owned cooperatives, and the vital role they play in the nation's economy," said Tonsager. "Primarily because of mergers, the number of farm co-ops continued to decline, but memberships and asset values are up."

Net income before taxes for all agricultural co-ops was a record $5.4 billion, eclipsing the previous high of $4.9 billion, set in 2008. Net income was up more than 25 percent, or $1 billion, from 2010.

The year also saw double-digit increases in prices for dairy products, cotton, livestock and grains and oilseeds. Farm production expenses also increased by double-digits in 2011, with feed, fertilizer and fuel prices leading the upward trend. The 2,285 surveyed cooperatives had sales of $213 billion, exceeding 2010 sales by more than $40 billion.

Top 100 Ag co-ops
USDA's annual list of the nation's 100 largest agricultural cooperatives, also released today, shows that they also had record sales and income in 2011. The 100 largest ag co-ops reported revenue of $148 billion in 2011, an increase of almost 30 percent over 2010, when revenue totaled $113 billion. Net income for the 100 top co-ops was $3.17 billion, up from $2.35 billion in 2010. The previous top 100 co-op records were $130 billion for sales and $2.42 billion for income, both marks set in 2008.

CHS Inc., Saint Paul, Minn. – an energy, farm supply, grain and food co-op – was once again the nation's largest ag co-op, with $36.9 billion in revenue in 2011. It was followed by Dairy Farmers of America, Kansas City, Mo.; with $12.9 billion in revenue. It traded places from 2010 with third-ranked Land O' Lakes Inc., St. Paul, Minn., a dairy, food and farm supply co-op, with $12.8 billion in revenue in 2011.

Iowa is home to 14 of the top 100 ag co-ops, the most of any state. It is followed by Minnesota with 13, Nebraska with 10, California with 6 and Wisconsin with 5. The biggest gains on the list were made by cotton cooperatives, due primarily to sharply higher cotton prices in 2011. Carolinas Cotton Growers Cooperative, Garner, N.C., made the largest jump, rising from 129 in 2010 to 71 on the 2011 list. It was followed by Calcot Ltd., Bakersfield, Calif., which climbed from 131 in 2010 to 85 in 2011. The next eight biggest gainers on the list were all grain or mixed (grain and farm supply) co-ops, due largely to high grain prices.

Most Ag co-op sectors see gains
Looking at the entire ag co-op sector, grain and oilseed sales by cooperatives climbed by almost $14 billion in 2011, while dairy product marketing increased by $8 billion. Cotton sales increased more than $1.5 billion while livestock and sugar sales both gained more than $600 million. Sales of farm supplies increased by $10 billion, primarily due to increasing energy prices. Farm supply co-ops recorded gains of more than $3 billion for petroleum products, while sales were up by $1 billion for fertilizer, feed and crop protectants.

Marketing of food, fiber, renewable fuels and farm supplies by cooperatives experienced 24 percent increases over the previous year, according to the annual survey conducted by the Cooperative Programs office of USDA Rural Development. Gross business volume of $213 billion was the largest ever, as was net income before taxes.

The value of cooperative assets in 2011 grew by about $13 billion, with liabilities increasing by $11 billion and owner equity gaining $2 billion. Equity capital remains low but is clearly showing an upward trend, with an 8 percent increase over the previous year.

Patronage income (refunds from other cooperatives due to sales between cooperatives) fell by more than 11 percent, to $613 million, down from $674 million in 2010.

Farmer, rancher and fishery cooperatives remain one of the largest employers in many rural communities and also provide jobs in many cities. The total farm co-op workforce of 184,000 was up slightly from 2010. While full-time jobs at co-ops increased by 1,800, the number of part-time and seasonal employees declined by 1,600.

There was a continued downward trend in farm numbers, with USDA counting 2.2 million farms in 2011, down about 10,000 from 2010. The number of farmer cooperatives continues to decline; there are now 2,285 farmer, rancher and fishery cooperatives, down from 2,314 in 2010. Mergers account for most of the drop, resulting in larger cooperatives.

Producers held 2.3 million memberships in cooperatives in 2011, up 2 percent from 2010. The number of U.S. farms and cooperative memberships are now about equal. This does not mean that every producer is a member of an agricultural cooperative. Previous studies have found that many farmers and ranchers are members of up to three cooperatives, so farm numbers and cooperative memberships are not strictly comparable.

For more in-depth information about how the nation's agricultural cooperatives performed in 2011, see the September-October issue of USDA's "Rural Cooperatives" magazine at: http://www.rurdev.usda.gov/BCP_Coop_RurCoopMag.html.



Large Losses Still Loom for Pork Industry

Pork producers are expected to continue to suffer very large losses in the next six months after already operating in the red for the last six. These large losses have been brought on by the extreme feed prices due to the drought.

According to Purdue University Extension economist Chris Hurt there is little producers can do to change the overall situation for the industry because the pigs that will represent these large losses are already on-feed. "The pigs that are here today represent producers' plans earlier this year when they were hopeful for $5 corn prices," Hurt said.

"In the spring of 2012, producers were optimistic that cheap corn was going to arrive by the fall and were expanding the breeding herd," Hurt said. "That optimism faded quickly after mid-June when the reality of drought became apparent. The drought turned optimism into fear and producers then shifted to a liquidation mode during late July and August. By early September they had reduced the size of the breeding herd by 74,000 (1.3 percent) compared to the USDA June inventory estimate. In September, weekly sow slaughter estimates indicated a slowing of the liquidation, with sow slaughter only slightly larger than a year ago. Some follow-through on sow liquidation appears to be likely as farrowing intentions are down nearly 3 percent for the fall and 2 percent for this coming winter," he said.

Hurt said that September hog slaughter was up about 4 percent and was surprisingly large. USDA's Sept. 1 market herd inventory estimates suggest that this high rate should drop to only 1 percent more hogs in October and then move to 1 percent fewer hogs for November through February. Next spring's market hog supply will also be down about 2 percent, with fall farrowings down 3 percent and the number of pigs per litter up 1 percent. Supplies next summer would be down about 1 percent if producers follow-through on intentions to reduce winter farrowing by 2 percent and with 1 percent more pigs per litter. Market weights began to drop in September as producers tried to save valuable corn. Currently producers are selling hogs about 3 pounds lighter. Lighter weights are likely to continue and will help ease pork supplies as long as corn and meal prices stay high.

"Large losses still loom over the industry for the next six months," Hurt said. "Live hog prices are expected to be in the mid-to-higher $50s for the final quarter of the year and then improve to the low-to-mid $60s in the first quarter of 2013. Unfortunately, costs are still far higher due to continued high corn and soybean meal prices. Estimated costs this fall and winter are about $73 per live hundredweight and losses are expected to be about $45 per head this fall and $30 in the winter. Unfortunately, the industry has been suffering losses of an average of $18 per head for the past six months representing the second and third quarters of this year," he said.

How big are these losses across the industry?
Hurt reported that during the last six months, total losses are estimated to have been about $1 billion. Losses in the next six months are forecast at around an additional $2 billion, meaning that the amount of equity erosion that has occurred in the last six months is expected to double in the next six months. For any hog production, operations that are in a weak financial situation at this point, lenders and other creditors will be key to their ability to continue. In September, two large Canadian hog firms filed for receivership and bankruptcy.

Creditors also need to look at the longer-term outlook when making their decisions to continue to finance individual pork operations, Hurt advised.

"By spring, hog production is expected to return to breakeven with the start of some moderation in feed costs due to lower soybean meal prices," Hurt said. "Corn prices are expected to begin to move lower in the late summer of 2013 if more normal yield outcomes are developing for the 2013 corn crop. Currently the outlook for the last three quarters of 2013 is indicating a small positive return of $2 per head. While that would not allow much equity building, it would end the equity erosion," he said.

What can producers do now?
"They need to work with their creditors to secure a path through the next six months," Hurt said. "Overall, some additional reduction in the breeding herd is needed and is likely. Producers can also sell at the lightest weights possible to avoid any underweight discounts. However, the decision on weights depends on the economics of each producer, so each needs to do their own analysis. Also, producers are looking for all alternative feed nutrient supplies including discounted aflatoxin corn that has contamination levels approved by FDA," he said.



Ammonia Prices Edge Higher

As has been the case in recent weeks, retail fertilizer prices tracked by DTN for the fourth week of September continue to show three fertilizers on the move. The remaining five fertilizers, meanwhile, are staying generally steady.  The only fertilizer that was higher by any significant amount was anhydrous, and it was higher for the eighth straight week. With fall fertilizer application rapidly approaching, the nitrogen fertilizer was another 8% higher compared to the fourth week of August and had an average price of $843/ton. It has gained about $79/ton since late April.  Two other fertilizers were slightly higher compared to a month earlier. MAP had an average price of $672/ton while UAN28 was at $383/ton.

Leading the way lower once again, like it has many times in recent months, was urea. The nitrogen fertilizer was 8% lower and now has an average price of $595/ton. Urea's price has now dropped $172/ton since Memorial Day.  Also somewhat lower was 10-34-0. The starter fertilizer declined 7% compared to a month earlier. 10-34-0 had an average price of $618/ton.  Three other fertilizers were also less expensive but just slightly lower. DAP had an average price of $634/ton, potash $619/ton and UAN32 $424/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.65/lb.N, anhydrous $0.51/lb.N, UAN28 $0.68/lb.N and UAN32 $0.66/lb.N.

Only one of the eight major fertilizers is still showing a price increase compared to one year earlier. Anhydrous is now 3% higher compared to last year.  Five fertilizers are actually lower in price compared to September 2011. Urea is now 3% lower, potash 4% lower, UAN28 6% lower, UAN32 7% lower and MAP 9% lower.  Two remaining fertilizers are now down double digits from a year ago. DAP is now down 10% while 10-34-0 is now 23% less expensive from a year earlier.



CWT Assists with 4.4 Million Pounds of Cheese and Butter Export Sales
Cooperatives Working Together (CWT) has accepted 10 requests for export assistance from Dairy Farmers of America, Land O’Lakes, Maryland & Virginia Milk Producers Cooperative Association and United Dairymen of Arizona to sell 4.246 million pounds (1,926 metric tons) of Cheddar cheese, and 200,621 pounds (91 metric tons) of butter, to customers in Asia, Central America, the Middle East and North Africa. The product will be delivered October 2012 through March 2013.

In 2012, CWT has assisted member cooperatives in making export sales of Cheddar, Monterey Jack and Gouda cheese totaling 95.9 million pounds, butter totaling 58.3 million pounds, and anhydrous milk fat totaling 123,459 pounds. The product will go to 34 countries on four continents. On a butterfat basis, the milk equivalent of these exports is 2.159 billion pounds, or the same as the annual milk production of 102,700 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.



Japan’s Olympic Chefs Team Chooses U.S. Beef for International Culinary Event

When a team of Japan’s finest chefs goes head-to-head with more than 1,000 chefs from around the world starting this week (Oct. 5-10) in Erfurt, Germany, it will be relying on U.S. beef to bring home the gold medal.

The International Exhibition of Culinary Art 2012 is a world-class event held every four years, in which more than 1,000 cooks and confectioners from 33 countries compete for medals and the Olympic championship title.

“Corn and soybean-fed U.S. beef is tender, tasty and juicy with just the right amount of marbling,” said Japanese chef team captain Miura. “It is a perfect match for our main dish (U.S. beef fillet wrapped in burdock and veal-base mousse). The slow-roasting of U.S. beef brings out the beautiful balance in cherry red color as well as marbling and its taste.”

The chef teams will have 6½ hours to prepare their dishes, and each team will serve 110 guests who purchase tickets in advance. Japan’s team practiced for the competition by serving about 130 guests at an event at the Kyoto ANA Hotel.

“It is an honor for U.S. beef to be featured by Japan’s national team in this worldwide competition,” said Takemichi Yamashoji, USMEF-Japan senior marketing director. “Japan is the home of world-class Kobe beef, but the chefs felt that U.S. beef is the right choice for this event.”

Established by a group of German chefs in 1896, the International Exhibition of Culinary Art is a prestigious and elaborate event. The Japanese National Team was selected by the All Japan Culinary Chefs Association, which has a close relationship with USMEF. Japan’s team of seven chefs will compete in the event with the Beef Checkoff logo on their uniforms along with the USMEF We Care logo that has become synonymous with U.S. beef in Japan.

While primary funding for the Japanese National Team comes from 45 Japanese corporations including Kirin and Osaka Gas, U.S. beef for the competition is provided through the Beef Checkoff Program.



Mosaic Profit Off 18%

Mosaic Co.'s fiscal first-quarter earnings fell 18% as the fertilizer producer's sales declined because of production problems and weak demand in China and India.

Mosaic said revenue fell 19%, weakened by lower sales volumes and prices for phosphate, its biggest source of revenue.

The Plymouth, Minn., company struggled to meet phosphate demand due to longer-than-normal annual plant repairs, as well as disruptions from Hurricane Isaac at its Louisiana facilities at the end of August. Sales at Mosaic were further hurt by low Mississippi River levels, which slowed fertilizer shipments.

"Demand for our products outpaced our ability to produce and deliver," Chief Executive Jim Prokopanko said in a statement. "We expect better execution in the quarters ahead."

Weak demand for potash in China and India caused the company to slow potash production and also pressured Mosaic's earnings.

For the quarter ended Aug. 31, Mosaic reported net income of $429.4 million, or $1.01 a share, down from $526 million, or $1.17 a share, a year earlier. The latest period included a net two cents in charges related to currency fluctuations, legal reserve expenses and other items. The year-earlier period included a net four cents in charges.

Revenue slipped to $2.51 billion from $3.08 billion a year earlier.



Argentina Suspends Bunge

Argentina has affirmed the suspension of the local subsidiary of international grain trader Bunge Ltd. from a key grain registry on charges of tax evasion.

The company, one of Argentina's leading grain exporters, was included in a list of grain storage operators suspended from the registry published in the official bulletin Monday.

Exclusion from the registry means the income tax withheld on domestic grain trades rises to 15% from 2% and imposes the withholding of a 10.5% sales tax, up from 8%. The affected firms also face new, burdensome approval requirements imposed for domestic shipping permits.

Bunge will still be able to trade, but the suspension will result a big financial cost for the company, said an official at Afip, the national tax agency, who asked not to be identified.

A Bunge spokesman declined to comment. In its 2011 annual report, Bunge said it "believes the allegations and claims are without merit, however, we are...unable to predict the outcome."

Earlier this year, Bunge lost an appeal in federal court against suspension from the registry over the charges.