Tuesday January 22 Ag News

Midwest Loss Ratios Soar as Indemnities Continue to Rise
(from National Crop Insurance Services)

Twelve states have loss ratios of at least 1.1 — meaning crop losses paid are $1.10 for every dollar received in premiums for the 2012 crop year — according to the January 21 data from the Risk Management Agency. The highest loss ratio states are in the heartland, with the top five states including Illinois at 2.36, Missouri at 2.24, Kentucky at 2.16, Nebraska at 1.83 and Iowa at 1.66.

To date, most of the crop losses are to corn and soybeans, with corn producers accounting for 59 percent of all indemnities paid and soybeans accounting for roughly 12 percent. Cotton, wheat and grain sorghum make up the other top five crop losses.

While most of the losses nationally can be attributed to the record drought of 2012, other parts of the country suffered from other weather anomalies. The spring freeze that damaged crops in New England and the upper Midwest resulted in high losses in many apple orchards, with loss ratios in New Hampshire coming in at 1.24 and Massachusetts at 1.1. Nationally, the loss ratio is 1.12 and rising.

In 2012, farmers paid more than $4.1 billion in premiums to purchase crop insurance. To date, more than $12.3 billion has been paid out to farmers, easily surpassing 2011’s old record of $10.8 billion in indemnities paid. Unlike disasters of the past however, the private sector is paying for a significant portion of the bill.

In fact, past natural disasters – prior to the widespread availability of crop insurance – cost taxpayers $45 billion from FY1989 to FY2001, according to the Congressional Research Service. And while the data is still not in, private sector losses from 2012 will almost certainly be in the billions of dollars.

What’s worrying many producers is that there are early indications that 2013 could be even drier than 2012. More than 60 percent of the continental U.S. – including a good portion of the nation’s breadbasket – remains in some stage of drought, compared to roughly 32 percent a year ago, according to the January 8 U.S. Drought Monitor.

Every county in the states of Iowa, Minnesota, Missouri, Oklahoma, Kansas, Nebraska, South Dakota, Colorado, Wyoming, New Mexico, Arizona and Utah are either abnormally dry or in some level of drought. USDA has already designated 597 counties in 14 states as primary natural disaster areas due to drought and heat, making all qualifying farm operations eligible for low interest emergency loans.



2013 Guide for Weed Management Now Available
Larry Howard, UNL Extension Educator, Cuming County

The 2013 Guide for Weed Management in Nebraska is now available from local Extension offices or can be ordered on-line.  The guide provides integrated weed management recommendations for a wide range of crop and non-crop sites in Nebraska. It includes herbicide options and efficacy tables by crop, specific recommendations for “difficult to control” and noxious weeds, pointers on sprayer calibration and maintenance, pesticide safety and more. The guide also includes sections on fungicide and insecticide information for corn, soybeans and wheat. It is a valuable resource for farmers, crop consultants, industry professionals, landowners, homeowners, and anyone else whomanages weeds. Individuals can also order online at http://marketplace.unl.edu/extension/extpubs/ec130.html.  The 282-page book is available for $10.00 at any of the local University of Nebraska-Lincoln Extension offices.



New Microloans Expand Small Farm Finance Options

New and beginning farmers and ranchers in Nebraska now have an agricultural Microloan credit option to consider.  The U.S. Department of Agriculture’s Farm Service Agency (FSA) has announced a new program to offer its customers a Microloan designed to help farmers and ranchers with credit needs of $35,000 or less. The loan features a streamlined application and a simplified qualification process built to fit the needs of new and smaller producers.

“This innovative offering will be more customer-friendly than our larger, more traditional loan programs,” said Dan Steinkruger, State Executive Director. “Farms and ranches seeking a smaller loan for start-up or operational needs now have a great new tool to consider.”

“For those selling at Farmers’ Markets or through community-supported agriculture operations (CSAs), a Microloan might serve their needs perfectly,” Steinkruger continued.  “And the reduced paperwork associated with the new Microloan will help expedite the process for everyone.”

In 2012, the Farm Service Agency provided $186.8 million in farm loan assistance to agricultural producers of all sizes in Nebraska. That year, operating loans accounted for the majority of the loans extended (1,411 loans for $95.4 million), while farm ownership loans were fewer (315 loans for $91.5 million).  In 2012, 64% of all FSA direct and guaranteed farm loans were made to Nebraska beginning farmers and ranchers. 

“The interest rate of 1.25 percent on the new FSA Microloan is also a great benefit for farmers and ranchers who are just starting out, in need of capital and on a tight budget,” according to Steinkruger. “Producers in every Nebraska county can contact their nearest FSA office for details and to determine if they qualify for a Microloan.”  The Microloan term can be up to seven years.

In response to tighter financial markets, USDA has expanded the availability of farm credit, helping farmers refinance loans across the U.S. Since 2009, USDA has provided more than 128,000 loans to family farmers totaling more than $18 billion. Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers.

For more information on Microloans and other FSA programs, please contact your local USDA Service Center.



USDA TO TAKE THE ECONOMIC PULSE OF U.S. AGRICULTURE

The U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) will spend the next several months gathering production practices information from farmers and ranchers across the nation through the Agricultural Resource Management Survey (ARMS). The results of this survey will serve as a baseline for numerous federal policies and programs that affect U.S. farm and ranch families. 

“It is hard to overestimate the impact the responses to ARMS can have since this survey is the primary tool for federal, state and local government representatives and all major farm and ranch sector stakeholders to gauge the financial condition of American farms and ranches,” said Dean Groskurth, director of the NASS Nebraska Field Office. “By responding, Nebraska farmers and ranchers can ensure that they are accurately represented when it comes to decision-making.”

NASS conducts ARMS jointly with USDA’s Economic Research Service. In an effort to obtain the most accurate data, the federal agencies will reach out to nearly 33,000 producers nationwide, including 1,800 in Nebraska, between January and April. The survey asks producers to provide data on their operating expenditures, production costs and household characteristics.

As with all NASS surveys, information provided by respondents is confidential by law. NASS safeguards the confidentiality of all responses, ensuring no individual respondent or operation can be identified.  

The economic data gathered in ARMS will be published in the annual Farm Production Expenditures report on August 2, 2013. All NASS reports are available online at www.nass.usda.gov.  



Farm Service Agency Announces Important Program Updates

The U.S. Department of Agriculture’s Farm Service Agency (FSA) reminds producers that the American Taxpayer Relief Act of 2012 extended the authorization of the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill) for many Commodity Credit Corporation (CCC) commodity, disaster, and conservation programs through 2013. FSA administers these programs.

The extended programs include, among others: the Direct and Counter-Cyclical Payment Program (DCP), the Average Crop Revenue Election Program (ACRE), and the Milk Income Loss Contract Program (MILC). FSA is preparing the following actions:

FSA will begin sign-ups for DCP and ACRE for the 2013 crops on Feb. 19, 2013. The DCP sign-up period will end on Aug. 2, 2013; the ACRE sign-up period will end on June 3, 2013.

The 2013 DCP and ACRE program provisions are unchanged from 2012, except that all eligible participants in 2013 may choose to enroll in either DCP or ACRE for the 2013 crop year. This means that eligible producers who were enrolled in ACRE in 2012 may elect to enroll in DCP in 2013 or may re-enroll in ACRE in 2013 (and vice versa).

All dairy producers’ MILC contracts are automatically extended to Sept. 30, 2013. Eligible producers therefore do not need to re-enroll in MILC. Specific details regarding certain modifications to MILC will be released soon.

FSA will provide producers with information on program requirements, updates and signups as the information becomes available. Any additional details will be posted on FSA’s website.

For more information about the programs and loans administered by FSA, visit any FSA county office or www.fsa.usda.gov.



Abengoa Temporarily Shuts 2 NE. Plants

Abengoa Biorefinery Corp. plans to temporarily shut down two of its six ethanol plants in the United States due to low margins, the company said on Jan. 16.

They are the 90-million-gallon-per-year Ravenna plant and the York plant that has an annual production capacity of 56 million gallons. Both plants are located in Nebraska.

"This was a difficult decision that has become necessary as a result of the continuation of unfavorable market conditions that have been plaguing the industry throughout 2012," Chris Standlee, executive vice president of Abengoa, said in an email on Jan. 16.

He added, "We are still very optimistic about the long-term future of the ethanol industry, and we will maintain these Nebraska facilities in a ready mode available for restart on short notice. However, for the near term we have decided to focus on continuing to support production operations at our two newest and largest plants located in Indiana and Illinois, and also the construction efforts on our new commercial scale cellulosic ethanol facility we are building in Hugoton, Kan."

Commenting on the general market conditions, Steve Sorum, ethanol manager at Nebraska Ethanol Board, also said the ethanol market is going through a tough time, with producer margins down tremendously due to high corn prices and soft demand linked to the blend wall. He added three or four of Nebraska's 24 ethanol plants have shut.



Iowa EPC Approves New Enforcement Rule

At its regular January meeting, the Iowa Environmental Protection Commission approved a new rule regarding how the DNR handles enforcement actions.

Despite many comments at the meeting claiming the new rule weakens environmental enforcement, the rule simply clarifies the variety of compliance and enforcement documents and other communications the DNR considers in response to a potential violation of state law or rules. The DNR has used procedures similar to the proposed Chapter 17 rule for many years, and this rulemaking simply formalizes this practice.

The DNR takes enforcement on a wide variety of violations, from submitting late reports to willful violation of state and federal environmental standards. "Our primary goal is to achieve compliance and minimize impact to the environment," said Barb Lynch, chief of DNR's field services and compliance. "This rule helps us achieve more consistency on how we approach the varying levels of severity when we must take enforcement action," she added.

"The DNR works hard to educate people on the front end," said Chuck Gipp, director of the DNR. "We would much rather provide assistance in meeting environmental regulations so that people understand and know what's expected of them to protect our resources, than say 'Gotcha' when they mess up."

The new chapter is intended to meet the DNR's responsibility to protect public health and the environment, while, at the same time, providing regulated entities and the public with transparency, clarity, consistency and fairness in addressing potential violations of Iowa's environmental statutes and rules.

In other action, the commission approved the quarterly plan for state revolving loans to fund clean water and drinking water projects, and authorized a new method of funding water quality, the "Water Resource Restoration Sponsored Projects."

Commissioners also finalized their annual report to the governor and the general assembly.



Steers in ICA Carcass Challenge Make Steady Progress

The 47 steers that Iowa cattle producers entered in the Iowa Cattlemen's Association (ICA) Carcass Challenge are making steady progress, recording weight increases of nearly six percent during the first few weeks of the competition.

This is the second year of the ICA Carcass Challenge, which is a statewide carcass contest for cattle producers. When the idea launched in 2011-12, it was the first time such a contest had been held in Iowa in 25 years. The steers in the contest are compared using a calculated value called Retail Value per Days on Feed or RVDoF. Basically, RVDoF selects for high quality meat and total pounds of meat in the days on feed.

The steers were delivered to the participating feedyard in November, and were weighed after two-and-a-half weeks to track their progress. The average delivery weight of the steers was 681 pounds, and they averaged 727 pounds at the weigh-in.

"Genetics, feed regimen and technology all play a part in producing quality and plentiful beef during the six-month feeding period," says Kellie Carolan, ICA's Seedstock Manager. That's especially important now as the U. S. cattle industry enters a period of a smaller cattle supply. Iowa State University Extension Economist Lee Schulz says cattle slaughter numbers will drop four to six percent this year.

The Carcass Challenge is organized by ICA's Young Cattlemen's Leadership Program (YCLP) as "an educational effort to stress that each step in the value-chain affects the end product," Carolan says.

The contributors of the three top steers will receive cash prizes, and donors of the top ten steers will be presented with jackets noting their participation. 



USFRA REVEALS WINNERS OF ITS FACES OF FARMING & RANCHING NATIONAL SPOKESPERSON SEARCH

Today, the U.S. Farmers & Ranchers Alliance announced that Chris Chinn (Mo.), Will Gilmer (Ala.), Katie Pratt (Ill.), and Bo Stone (N.C.), have been selected as the winners of its Faces of Farming & Ranching program, a nationwide search launched in summer 2012 to help put real faces on the American agriculture industry.  More than 100 applications were submitted from passionate, dedicated farmers and ranchers across the country.

The winners will act as national spokespeople, and will share stories and experiences on a national stage to help answer consumers’ questions about how food is grown and raised to feed our nation.

“The four winners selected are passionate about farming and ranching, and eager to share their stories about the innovative ways they continue to improve food production each day,” said Bob Stallman, chairman of USFRA and president of the American Farm Bureau Federation. “There are a lot of misconceptions and questions among consumers about how food gets from the farm to our tables. These four individuals are equipped with the passion and experience necessary to address these complicated issues and give honest answers.”

Chris Chinn and her husband Kevin, are fifth generation farmers – farming with his parents and brother.  They raise 1,500 pigs on their farm, and 60 head of cattle in addition to growing corn, soybeans, hay and rye.

Will Gilmer and his father own and operate a dairy farm, which has been in continuous operation since Will’s grandfather established it in the early 1950s. They currently milk 200 Holstein cows and raise their own replacement heifers, while managing 600 acres of land used for pasture and forage production.

Katie Pratt and her husband, Andy (a seventh generation farmer), currently farm in partnership with Andy’s family.  They raise corn, soybeans and seed corn for a regional family-owned company.  They welcome tour groups to their farm as part of a family tradition, which started back in the early 1970s. 

Bo Stone jointly owns P&S Farms with his parents and wife, Missy. They grow 2,300 acres of row crops, raise approximately 10,000 pigs annually and have 60 cows. They also grow 2.5 acres of strawberries and 4 acres of sweet corn to sell at their own roadside market. Bo represents the sixth generation to farm their land.



Stabenow Applauds Majority Leader Reid for Making Farm Bill a Top Priority

Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today applauded Majority Leader Harry Reid for his commitment to making a new Farm Bill priority legislation for the 113th Congress. Reid introduced the Senate-passed version of the Farm Bill today as one of several privileged, top priority bills, underscoring his support for and commitment to enacting a new five-year farm bill.

“I applaud Sen. Reid’s leadership and commitment to getting a five-year farm bill done to provide certainty to the 16 million Americans working in agriculture,” Chairwoman Stabenow said. “Last year we were able to pass a farm bill with overwhelming bipartisan support, saving more than $23 billion in taxpayer money and reforming farm bill programs to be more cost-effective and market-oriented. Unfortunately, the House didn’t bring the Farm Bill to the floor. Majority Leader Reid has demonstrated that the Senate will once again make supporting our nation’s agriculture economy while cutting spending a top priority.”

The Agriculture Reform, Food and Jobs Act (S.2340) cleared the Senate with overwhelming, bipartisan support on June 21, 2012. The bill reforms food and agriculture policy, consolidates programs and saves taxpayers more than $23 billion by making programs more cost-effective. The bill and the bipartisan way in which it was passed was praised by Members on both sides of the aisle. Additionally, a wide range of national press outlets called the bill one of the most significant reforms in decades and praised its passage as an example of the Senate finally working the way it should.

Chairwoman Stabenow has said she is committed to convening a Committee mark up as soon as possible, to produce an updated version of the Farm Bill, which could then be substituted for Majority Leader Reid’s placeholder bill.



AFBF Board Establishes Strategic Action Plan for 2013

Following the delegate session of the American Farm Bureau Federation’s 94th Annual Meeting, which wrapped up this week in Nashville, the organization’s board of directors met to establish priorities for AFBF’s strategic action plan for 2013.

“This plan represents those issue areas where we believe the American Farm Bureau Federation and its grassroots members will have real opportunities to achieve success this year, as well as challenges we will need to tackle to help safeguard our members’ ability to operate their farms and ranches,” said AFBF President Bob Stallman.

Aggressively working to secure passage of legislation early in the year that addresses both long- and short-term agricultural labor needs is a priority for AFBF. A recent Farm Bureau economic analysis concluded that $5 billion to $9 billion in annual production is in jeopardy if the employee shortage cannot be filled.

“Comprehensive immigration reform through legislation is needed to solve the agricultural worker problem,” Stallman said.

Passage of the Water Resources Development Act and reform of the harbor maintenance trust fund and the inland waterways trust fund is another priority for AFBF.

“A reliable and efficient inland water system for shipment of farm goods is essential for U.S. agriculture to be competitive,” explained Stallman.

Another important priority is working to secure passage of a new farm bill that meets core principles important to farmers and ranchers. This includes a farm income safety net and crop insurance products to provide risk management tools that help protect farmers from catastrophes, including programs that provide emergency assistance for livestock and specialty crops producers not covered by farm programs or federal crop insurance.

The board also directed AFBF to defend standards and incentives necessary to further develop the U.S. renewable fuels industry; oppose Environmental Protection Agency efforts to expand the scope of navigable waters subject to federal regulations under the Clean Water Act; oppose expansion of federal Clean Water Act permit requirements for poultry and livestock farmers and ranchers; protect farmers’ and ranchers’ tax interests in debates on fiscal policy and tax reform; and protect farmers’ and ranchers’ interests in development of Food and Drug Administration food safety regulations.

“The 2013 priorities set by the board are built upon the dedicated efforts of our grassroots members working together during our annual meeting and throughout the year to achieve policy goals that will benefit all of agriculture, as well as the nation’s consumers and our customers around the world,” said Stallman.



USDA Cold Storage Highlights - Jan 22, 2013

Total red meat supplies in freezers were up 2 percent from the previous month and up 9 percent from last year. Total pounds of beef in freezers were up 5 percent from the previous month and up 2 percent from last year. Frozen pork supplies were down 1 percent from the previous month but up 14 percent from last year. Stocks of pork bellies were up 55 percent from last month but down 11 percent from last year.

Total frozen poultry supplies on December 31, 2012 were up 5 percent from the previous month and up 16 percent from a year ago. Total stocks of chicken were up 1 percent from the previous month and up 8 percent from last year. Total pounds of turkey in freezers were up 16 percent from last month and up 40 percent from December 31, 2011.

Total natural cheese stocks in refrigerated warehouses on December 31, 2012 were up 5 percent from the previous month but down slightly from December 31, 2011.  Butter stocks were up 20 percent from last month and up 43 percent from a year ago.

Total frozen fruit stocks were down 7 percent from last month but up 5 percent from a year ago.  Total frozen vegetable stocks were down 6 percent from last month but up 2 percent from a year ago.



CWT Assists with 6.2 Million Pounds of Cheese and Butter Export Sales

Cooperatives Working Together (CWT) has accepted 19 requests for export assistance from Dairy Farmers of America, Northwest Dairy Association (Darigold), Foremost Farms USA, Maryland & Virginia Milk Producers Cooperative Association, Michigan Milk Producers Association, United Dairymen of Arizona and Upstate Niagara Cooperative (O-AT-KA) to sell 3.814 million pounds (1,730 metric tons) of Cheddar and Monterey Jack cheese and 2.423 million pounds (1,099 metric tons) of butter to customers in Asia, the Middle East and North Africa. The product will be delivered January through June 2013.

The 2013 CWT-assisted sales will be going to 18 countries on five continents and are the equivalent of 252.4 million pounds of milk on a milkfat basis. That is the annual production of 12,000 cows.

Assisting CWT members through the Export Assistance program positively impacts producer milk prices in the short-term by helping to maintain inventories of cheese and butter at desirable levels. 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.



Rabobank Report: Global Fertilizer in Oversupply Mode

Rabobank has published a new research report on the global fertilizer industry, in which the bank forecasts oversupply through Q1 2013 and potential downside price risk, with the exception of urea.

In the report, Rabobank's global Food & Agribusiness Research and Advisory team says that reduced end-user demand and inventory destocking was a feature of the global fertilizer market through Q4 2012, resulting in a lull in global trading activity which is expected to continue in Q1 2013.

The bank predicts that global fertilizer prices are likely to remain relatively range-bound, and says that market fundamentals suggest global fertilizer markets will remain relatively balanced through Q1 2013. However, a general oversupply, especially across the phosphate and potash complex, will linger through Q1 2013, providing some potential downside price risk. As a result, Rabobank has a slightly bearish view for the fertilizer complex through Q1 2013, with urea being an exception.

A lull in global trading activity enveloped the fertilizer complex through Q4 2012, which the bank says is normal given the state of planting and harvest during this period. As a result of the subdued demand and lackluster trading, most nutrient prices remained relatively range-bound throughout the period. Overall, price movements were mixed across the fertilizer complex, but market sentiment has generally been weaker.

"Looking ahead, as agricultural markets are faced with the challenge of rebuilding global stocks next season, and given the precariously balanced fundamentals, global agri commodity prices are expected to remain at elevated levels in 2013," says Rabobank analyst Dirk Jan Kennes.

Buyers have remained cautious through the closing stages of 2012. Globally, end-user demand is seasonally low at this time of the year. Southern Hemisphere crops are underway, while the large Northern Hemisphere crops have been harvested. As a result, many market participants have taken the opportunity to liquidate excess fertilizer inventories.

In the short term, at least, this means global buyers will continue to defer purchases in anticipation of lower prices given short term requirements are covered. In addition, as the euro crisis continues, European farmers are very cautious about locking in fertilizer purchases far in advance of the application season.



CME Group to Conduct Industry Outreach on Expanded CBOT Grain and Oilseed Hours

CME Group, the world's leading and most diverse derivatives marketplace, today announced it will begin the process of conducting outreach to customers, producer groups and other market participants on expanded CBOT grain and oilseed trading hours.

"We've received significant customer feedback about the extended hours we implemented for CBOT grains last summer," said Tim Andriesen, Managing Director, Agricultural Commodities and Alternative Investments, CME Group. "As we start a new year, we think the timing is right to review those changes and industry feedback more formally to ensure we're continually meeting our customers' needs. Beyond hours, we continue to explore other suggestions from our customers on ways to enhance our products and markets."

CME Group will engage participants on CBOT grain and oilseed trading hours, which were expanded to 21 hours per day in May of 2012, through one-on-one conversations, customer focus groups and an online survey. The survey will be made available to participants on CME Group's website from Tuesday, January 22 through Thursday, January 31.

The CME Group survey is open to all CBOT grain and oilseed customers and market participants and can be found online at www.cmegroup.com/agsurvey. 



AGCO LAUNCHES Auto-Guide 3000 FOR PROFESSIONAL FARMERS

AGCO today announced the release of Auto-Guide™ 3000 – AGCO’s latest integrated assisted-steering solution designed to provide professional farmers around the world with best-in-market functionality.

“Assisted steering has become a very important option on the machinery owned and operated by professional farmers,” says Martin Richenhagen, chairman, president and CEO of AGCO. “Professional farmers and agriculture enterprises can increase their efficiency and realize rapid return on their investment by adding integrated, precision technology solutions from our factories.”

Auto-Guide 3000 is a complete satellite-assisted steering technology and is the mainstream offering for precision technology solutions from AGCO. To meet a growing customer demand for guidance systems, AGCO has taken steps to design its next generation of guidance solutions to be simple to operate and fully scalable from sub-meter to sub-inch accuracy.

AGCO is committed to the agricultural technology market including the assisted steering segment. “Our new guidance solution is one of the most extensively tested guidance products that has come from AGCO to date,” states Matt Rushing, director, AGCO ATS, Product Management.  “It’s a proven solution that both customers and dealers can place a high level of confidence in.” To deliver the best customer experience, key highlights include:
-    Affordability as well as fully-integrated plug-and-play convenience.
-    High quality and reliability driven by extensive testing at nine of AGCO’s global manufacturing sites.
-    Customers’ choice of system scalability with both basic and easy-to-use features on the base monitor, or more advanced characteristics and functionality on the optional monitor.

In North America, Auto-Guide 3000 will be available starting in second quarter of 2013 as a factory-installed option on select Challenger® and Massey Ferguson® tractors, combine harvesters, including Gleaner® and self-propelled windrowers.