Wednesday December 26 Ag News

Snow Is Good For Alfalfa
Larry Howard, UNL Extension, Cuming County

The recent snow storm left at least some snow just about everywhere.  Sure it created some problems, but snow is good – for alfalfa.   Alfalfa loves snow.  In fact, nothing can increase the chance of alfalfa surviving winter better than a thick blanket of snow. 

Our moderate fall weather allowed alfalfa plants to harden well for winter, leaving them with a high concentration of nutrients and a low concentration of water in their roots.  This winterized condition enables alfalfa crowns and roots to withstand temperatures down as low as 5 degrees above zero.  Air temperatures will get much colder than that.  Fortunately, the soil doesn't get as cold as the air above it.  When soil is covered with a blanket of snow, this snow acts like a layer of insulation protecting the ground from bitter cold temperatures.  Plus, it reduces the rate that soils and alfalfa roots dry out.  This is why winters with little snow cover can cause more injury to alfalfa stands, especially if soils also are dry as they are this winter.

Of course, management practices in the fall influence the effect of snow on your alfalfa.  Tall stubble provides some insulation value itself and it will catch more snow.  Also, avoiding alfalfa harvest during the so-called risk period from mid-September through mid-October helps alfalfa roots winterize well by building up nutrients and reducing water content.  You may not like the way snow disrupts your daily routine, but remember how valuable it can be for your alfalfa. 

Calendar Planning
In between snow storms and frigid temperature is a great time to reflect on last year’s successes and problems as well as plan ahead for next year.   Put your calendar to good use by planning next year’s forage activities now and make notes on that calendar to complete needed work on a timely basis.

Bruce Anderson, UNL Forage Specialist suggests that producers order alfalfa and other seeds in January and February to make sure you get what you want.  Then in March, remind yourself to pull any soil samples you didn’t get last fall as well as get ready to plant oats at your earliest opportunity.  By mid-April, be sure to get alfalfa planted before corn planting begins.  This might also mean that lime and phosphorus or other fertilizers needed to be applied even earlier.  Mark it down.  Cool-season grass pastures also should be fertilized by mid-April.

Wen May arrives, get your thistles sprayed right away and begin checking your alfalfa so once buds just start to form you can be ready for an early first cutting that brings a premium price.  In late May, warm-season grass pastures can use some fertilizer, and shortly thereafter plant your summer annuals.

Be ready by early August to prepare and plant turnips or oats for late fall, early winter grazing.  Finally, finish your year by sampling and testing all your harvested forages so you can plan and feed animals during winter to meet their needs at lowest cost.  Make those notes now, and in twelve months you will smile, knowing you got your forage work done correctly and on time.



Purchases of Wind Power Crucial First Step
CFRA applauds recent NPPD and OPPD announcements

Nebraskans received welcome news last week when the Nebraska Public Power District (NPPD) and Omaha Public Power District (OPPD) both announced plans to purchase wind generated electricity. The Center for Rural Affairs applauded the announcements and encouraged Nebraska’s two largest electric utilities to view these commitments as an important first step in developing the state’s considerable wind power resources.

“We applaud the decisions by both NPPD and OPPD to increase the amount of wind generated electricity in their generation portfolio,” said Johnathan Hladik, Energy Policy Advocate at the Center for Rural Affairs. “Nebraska enjoys some of the best wind energy potential in the nation but we lag far behind a number of states in developing that resource. These announcements are an important step in closing that gap.”

According to Hladik, every state bordering Nebraska has made strong investments in order to get their wind industry off the ground, leaving Nebraska far behind. As a result, Nebraska sits on the sidelines while watching our neighbors prosper.

“Nebraskans look to NPPD and OPPD for leadership. Rural Nebraskans benefit tremendously when we invest in wind energy and invest in Nebraska. We need leaders that recognize this and are willing to help move our state forward,” explained Hladik.

“Our research and analysis clearly demonstrate that an innovation-led plan to invest in wind generated electricity has the potential to create thousands of jobs as well as other direct economic benefits to consumers, farmers, ranchers and rural communities,” Hladik continued.

Recently, several media outlets reported that OPPD agreed to buy 200 megawatts from the Prairie Breeze Wind Energy Center near Elgin, just west of Norfolk. NPPD's board also approved a plan to buy up to 75 megawatts of wind power, but the utility hasn't decided which wind farm to buy from.



Dr. Dave Rhoda to Address Dairy Producers at NCBA Convention

The annual Dairy Producer Communications Forum and breakfast will be held during the upcoming Cattle Industry Convention in Tampa, Florida. The meeting is scheduled for Friday, Feb. 8, from 7:00 a.m. to 9:00 a.m. in the Marriott Waterside Hotel, Florida Ballroom Salon IV.

This year, the checkoff will be hosting Dr. Dave Rhoda, DVM from Wisconsin, who will discuss the necessity of a "mindset shift" for dairy and veal producers in terms of vigilance on how they're using antibiotics in order to avoid cull cow and bob veal drug residues.

While preventing drug residues in milk is definitely on producers' radar screens as a result, they're also urged to step up their surveillance of antibiotics in calves they ship. The meeting is a great opportunity to learn more about how to avoid these drug residues.

To RSVP for the breakfast, please email Melissa Slagle at mslagle@beefboard.org.   

Checkoff Meetings Open to All
Reminder to all cattle farmers, ranchers and importers: All beef checkoff meetings are open to every person who pays the checkoff. During the upcoming 2013 Cattle Industry Conference, Feb. 6-9  in Tampa, Fla., these meetings include meetings of the Cattlemen’s Beef Board (CBB); Federation of State Beef Councils (Federation) and joint committee meetings that include checkoff representation. We've made it easy for those interested to participate.



Fertilizer Prices Stable for Year-End Buys

Retail fertilizer prices continue to remain stable the third week of December, according to data tracked by DTN. This week marks the seventh in a row prices have remained at fairly constant levels.  Six of the eight major fertilizer prices slipped compared to last month, but these moves to the low side were slight. DAP had average price of $637 per ton, MAP $672/ton, potash $607/ton, urea $573/ton, 10-34-0 $604/ton and UAN28 $372/ton.  The remaining two fertilizers were higher compared to the third week of November, but again the move higher was fairly irrelevant. Anhydrous had an average price of $873/ton and UAN32 $424/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.63/lb.N, anhydrous $0.53/lb.N, UAN28 $0.66/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 9% higher compared to last year.  Six fertilizers are actually lower in price compared to December 2011. Urea is just slightly lower, UAN32 is 5% less expensive, UAN28 is 6% less compared to last year and DAP, MAP and potash are all 9% lower.  The remaining fertilizer is now down double digits from a year ago. 10-34-0 is now 27% less expensive from a year earlier.



Bill Would Repeal FL Ethanol Blend Law

A bill introduced in the Florida state legislature would repeal a law requiring gasoline sold and used in the state be blended with ethanol.

State Rep. Matt Gaetz (R), says he introduced the bill last month because "Floridians should stop subsidizing the Midwestern corn industry."

The Florida Renewable Fuels Standard, which was signed into law by Gov. Crist, requires all gasoline sold or offered for sale by a terminal suppliers, importer, blender or wholesaler in the state contain 9% to 10% ethanol, or other alternative fuel, by volume.

A lot has changed since then, said Gaetz, adding that ethanol has become "economically unviable."  Gaetz cited BP's decision two months ago to abandon plans to build a commercial-scale cellulosic ethanol plant in Highlands County, Fla. BP said at the time of the project's cancellation in October that it would refocus its U.S. biofuels strategy on research and development as well as licensing its biofuels technology.

The Florida legislature will resume its session in March, which is when Gaetz expects his bill would be voted on in the state's House of Representatives, with identical legislation to be voted on in the state Senate. If passed, the legislation would take effect July 1, 2013.



Brazil to See Soy Transport Costs Explode In 2013

Brazilian farmers will see the cost of transporting soybeans explode in the post-harvest period due principally to a record crop and a lack of motorists to truck produce down to port.

According to the Mato Grosso Agricultural Economy Institute (IMEA), the cost of transporting a metric ton of soybeans from Sorriso, Mato Grosso to Paranagua port, one of the main export points in the south, will rise 56% this year to R$310 ($150).

Brazilian soy transport prices are already much higher than in the U.S. and Argentina -- nearly four times higher, according to the exporters association -- and the 2013 jump will further affect competitiveness against the other major soybean producers.

There is a confluence of factors pushing up freight prices.

Firstly, and perhaps most significantly, soybean output is expected to rise by 20% to 81 to 83 million metric tons (mmt) this season, according to most local forecasters, inflating demand for trucks and wagons to transport the crop

Secondly, and also very importantly, with Brazil getting near full employment, there is increasingly a lack of motorists to trucks beans the often-enormous distances to port -- Sorriso to Paranagua is 1,300 miles. That shortage will be aggravated this year by the new Truckers Law, which restricts motorists to 10-hour days and demands they rest half an hour for every four at the wheel.

Thirdly, diesel prices have risen.

Fourthly, a smaller-than-expected U.S. harvest means demand for beans will be more concentrated than ever at the start of the Brazilian export season in March.

Fifthly, trading companies still have winter corn in their Mato Grosso silos, which they will have to ship in the first quarter, occupying motorists and taking them away from producing regions.



ConAgra Foods Reports Strong Second-Quarter EPS Growth

ConAgra Foods, Inc., (one of North America's leading packaged food companies, reported results for the fiscal 2013 second quarter ended Nov. 25, 2012. Diluted EPS from continuing operations was $0.51 in the fiscal second quarter, up 19% over $0.43 earned in the year-ago period. Excluding $0.06 of net expense in both the current quarter and the year-ago period from items impacting comparability, current quarter EPS of $0.57 was 16% above the comparable $0.49 earned in the year-ago period. Items impacting comparability in the second quarter of fiscal 2013 and the same period a year ago are summarized toward the end of this release and reconciled for Regulation G purposes starting on page 9.

Gary Rodkin, ConAgra Foods' chief executive officer, said, "We are pleased that both of our segments posted operating profit growth in the midst of current economic conditions. Effective margin management initiatives, moderating input cost inflation, the benefit of acquisitions, and good results from our potato operations are collectively driving high-quality EPS growth. We are very excited about the pending acquisition of Ralcorp, which we announced on Nov. 27, 2012, given the strategically and financially compelling nature of the acquisition. The acquisition is expected to close in the first quarter of calendar 2013, and we look forward to updating our investors on the financial benefits of the acquisition in due course."

The Consumer Foods segment posted sales of $2,423 million and operating profit of $286 million for the second quarter. Sales increased 11%, reflecting 11% contribution from acquisitions, 4% favorable price/mix, and a 4% organic volume decline. Sequentially, organic volume improved by a slight amount (on an unrounded basis).

Brands posting sales growth for the quarter include Act II, Hebrew National, Marie Callender's, Orville Redenbacher's, Reddi-wip, Ro*Tel, Wesson, and others. More brand details can be found in the Q&A document accompanying this release.

Volume performance is expected to improve sequentially as the fiscal year progresses, reflecting the lapping of price increases taken last fiscal year as well as the expected favorable impact of the company's innovation pipeline and marketing investment.

Operating profit of $286 million grew 12% over $256 million in the year-ago period, as reported. After adjusting for $7 million of net expense in the current period, and $15 million of net expense in the year-ago period, from items impacting comparability, current-quarter operating profit of $293 million increased 8% over the comparable $271 million a year ago. Marketing investment for the base business (excluding recently completed acquisitions) increased 18%, reflecting the company's planned commitment to building long-term brand strength. Operating profit growth was driven by a combination of favorable price/mix and other margin management initiatives, moderating inflation, and contribution from completed acquisitions.

The company currently expects full fiscal year productivity savings to exceed $250 million for this segment and for input cost inflation to be approximately 2-3%.

Sales for the Commercial Foods segment were $1,312 million, 5% above year-ago period amounts. The growth primarily reflects favorable price/mix and good volumes for the Lamb Weston potato operations, which posted notable success in international markets. To a lesser extent, the sales growth also reflects the pass-through of higher wheat costs in terms of higher flour prices for the milling operations. The overall segment remains focused on top-line growth through innovation, improving product mix with higher-margin items, and strong alignment with high-potential customers.

Segment operating profit was $169 million, 5% above year-ago period amounts as reported, reflecting the sales growth as well as a continued focus on productivity and cost-saving initiatives. Lamb Weston drove the overall segment's profit growth, while flour milling profits were below year-ago period amounts, as planned, due to the very strong performance in the same period a year ago.

The company recorded $16 million of net hedging loss in the current quarter, and $27 million of net hedging loss in the year-ago period, as unallocated Corporate expense. The company identifies these amounts as items impacting comparability. Hedge gains and losses are aggregated, and net amounts are reclassified from unallocated Corporate expense to the operating segments when the underlying commodity or foreign currency being hedged is expensed in segment cost of goods sold.

On Nov. 27, the company announced an agreement to acquire Ralcorp for $90 per share in cash. The transaction is expected to close on or before March 31, 2013, subject to the approval of Ralcorp shareholders, customary regulatory approvals, and the satisfaction of other closing conditions. Including the assumption of debt, the transaction is valued at approximately $6.8 billion. The company expects to finance this transaction with cash on hand, existing credit facilities, incremental borrowings, and the issuance of equity. The company is committed to an investment-grade credit rating. The company expects $225 million of annualized synergies (pre-tax) by the fourth full fiscal year following the transaction close. This acquisition is expected to favorably impact ConAgra Foods' short-term and long-term EPS performance. The company will offer more financial details in due course after the transaction is closed.



Merial to Buy Animal Health Division of Dosch Pharmaceuticals

Merial, the Animal Health division of Sanofi, announced that it has entered into a binding agreement to acquire the animal health division of the Indian company Dosch Pharmaceuticals Private Limited, creating a market entry for Merial in that country's strategically important and growing animal health sector. The agreement is subject to regulatory approval and is expected to finalize sometime in the first half of 2013. Financial details were not disclosed.

Dosch Pharmaceuticals, headquartered in Mumbai, India, was incorporated in 1992 and is a diversified pharmaceutical company, primarily operating through two divisions, animal health and exports. The animal health division being acquired by Merial has more than 86 products under 50 brands for ruminants, poultry and companion animals. Products include an extensive range of animal health therapeutics and nutritional feed supplements. Within the animal health division, Dosch has a 279 member sales force, covering 18 Indian states.

"The acquisition of Dosch's Animal Health Division will be a significant milestone for Merial and give us a strategic platform for our development in the Indian market," said Jose Barella, Chief Executive Officer of Merial. "We are convinced that the combination of Dosch's animal health brands and distribution strength, along with the robust new product pipelines from both Merial and Dosch, will strongly position Merial to become rapidly a major animal health player in India."

Dosch CEO, Dr. Sharat Tugnait and his management team will manage the future combined operations of Dosch and Merial in India under the supervision of Mayank Parekh, Merial.

The animal health market in India is estimated at more than €350 million in 2012, and is experiencing annual double digit growth. India is home to the world's largest herd of cattle and buffalo, second largest herd of sheep and goats, and has the world's fifth largest population of poultry. India is also the world's largest milk producer.