Friday March 1 Ag News

SIGNUP FOR THE 2013 FARM PROGRAM HAS STARTED

Farmers and landowners should be aware that signup for the 2013 Farm Program called the Direct and Counter-cyclical Payment (DCP) Program/Average Crop Revenue Program (ACRE) started in February stated Bruce J Coffey County Executive Director of the Colfax County Farm Service Agency.  The Colfax County FSA Office is currently taking appointments for sign-up for the 2013 farm program.  

Prior to calling the office for an appointment the producer should consider the following items:
-Have you added new farms to your operation this year --if yes then you will need to provide a copy of the lease or have the owner call our office to put your name on the farm.
-Has there been a change in ownership on any of the farms -if yes we need a copy of the filed deeds before changing our records.
-Has there been a change in your operation such as you are farming jointly with another producer or you have formed an entity (LLC or corporation).  You need to provide this information immediately.
-Are any of the owners on the farm deceased? If yes we need to have the land records updated with a copy of the filed deed provided by you or the new landowner.

Producers can choose to go into DCP or ACRE on any of their farms regardless of which program they were in for crop year 2012. Coffey noted producers are encouraged to signup now rather than waiting until later when they will want to be in the field or have other commitments.  If there is a written cash lease for the 2013 crop year, a copy of that lease can be provided to the office instead of getting the landowner signatures.   Eligibility documents will also be required to be updated for 2013 including compliance with Adjusted Gross Income provisions and Highly Erodible Land/Wetland provisions reminded Coffey.

FARM RECORDS NEED UPDATED AT FARM SERVICE AGENCY
Farmers and landowners should make sure the records concerning ownership of the farm,  operator of the farm,  shareholders in corporations, etc. are updated immediately at your local FSA office.  Colfax County FSA County Executive Director Bruce Coffey says.  The farm records at FSA should match the records at the county courthouse.  Also in many situations there are deceased producers that show as landowners on our records –these situations must be updated to the correct ownership.  This is the producer’s responsibility.  Our office cannot change the records until we are notified and the proper title transfer documents are provided.  If you operate a farm with this situation, please contact the heirs or personal representative and get the needed records.  Your efforts to ensure your farm records are correct will save all of us time during farm program signup noted Coffey.

Changes of land ownership must be updated in our office by providing a copy of the deed or other legal document showing this transfer.  Our office is required to pay the correct producers on the farm based on land ownership and risk in the crop based on inputs in the growing crop.  Coffey stated if you fail to update the ownership records at FSA, everyone on the farm will lose program benefits.    Producers need to plan ahead to save everyone time during signup in the farm program.   Anyone that has questions on what documents are needed, please contact the Colfax County FSA office at 402-352-5200.

FOREIGN LANDOWNERS MUST REPORT LAND TRANSACTIONS
Also, foreign investors who buy, sell, or hold a direct or indirect interest in agricultural lands in the United States are required under the Agricultural Foreign Investment Disclosure Act to report their holdings to USDA.

Coffey says, “The law requires foreign investors who buy or sell agricultural land to report the transactions within 90 days of the date of the sale."  Report forms (FSA-153, Agricultural Foreign Investment Disclosure Act Report) are available at all Farm Service Agency offices and may be downloaded from the agency’s Web site http://www.fsa.usda.gov.  The completed reports must be turned in to the Farm Service Agency county office where the land is located. The reporting requirement is nothing new Coffey said.  It’s been on the books since 1978 and we work to remind investors and real estate professionals of the requirement at least once a year. Failure to file an accurate or timely report can result in a penalty with fines up to 25 percent of the fair market value of the agricultural land.  If you need additional details, contact your local Farm Service Agency office.



Soil Testing Critical After a Drought Year
Steve Tonn, UNL Extension, Washington County

Most crop producers are beginning to think about the upcoming planting season. However, before planting season gets started, if you didn’t do soil testing in the fall then soil sampling should be near the top of your to do list this spring.  The combination of drought conditions, heavy irrigation, and widely varying yields means that soil testing is more important than ever this year.

The big question is how the 2012 drought will affect nutrient requirements for this year. The net effect of crop nutrient removal on soil nutrient availability will vary from field to field, and with locations within fields.

For very low-yielding, rainfed corn fields, expect residual nitrate levels to be high. This will primarily be from unused fertilizer nitrogen. Soil mineralization of N will have been quite low in rainfed fields due to low moisture.  Limited crop nitrogen removal and little or no leaching means that unused fertilizer nitrogen remains in the soil. Since we have not had an unusually wet winter, this nitrate-N will be mostly available for crop use this year. The only way to accurately account for residual nitrate-N is through deep sampling, to a depth of at least 2 feet. Unusually high residual nitrate levels following soybean harvest are not likely as soybean typically depletes soil nitrate-N to reduce energy needed for biological N fixation.

For irrigated fields, total irrigation amounts for 2012 were double or more compared to 2011 applications, with many more irrigation events for sprinkler-irrigated fields. Generally nitrate leaching with irrigation is not a concern with sprinkler-irrigated fields, due to irrigation amounts being one inch or less per event. Such frequent irrigation, combined with warm soil temperatures all summer, may have led to above-average mineralization of nitrogen from organic matter. Consequently, residual nitrate-N levels for sprinkler-irrigated fields may still be higher than normal, even if yields are not that much lower.

For irrigated fields with yields close to normal, expect little impact from drought on soil test levels of phosphorus (P), potassium (K), and other nutrients.  For dryland fields, crop uptake of these nutrients will be less than normal. However, this may have little impact on soil test levels for P, K, and other nutrients. There may be some tendency toward higher soil test values, but soil tests for these nutrients are an estimate of plant availability over the growing season. However, most Nebraska soils are quite high in potassium, and thus slight differences in soil test K that can occur with the analytical process have no impact on the fertilizer recommendation.

In some cases, growers harvested fields intended for grain production as silage. In other cases, we saw more producers harvest crop residue as feed due to reduced pasture and hay production. Either way, growers should be aware of nutrient removal resulting from biomass harvest. Significant amounts of P, K, and micronutrients, as well as carbon, can be removed from the field with biomass harvest.  If stalks are grazed rather than baled, expect much of the nutrient content in grazed residues to return to the field, minus the harvested weight of cattle once they are taken off the field.

Expect soil nutrient values — particularly residual nitrate — to be more variable this spring than in recent years from field to field, and within fields. The only way to know the availability of soil nutrients is to soil test. Making accurate estimates of profitable fertilizer rates for this year will require accurate soil test information.

There is still time before planting season to get soil samples taken and analyzed in order to make sound fertility decisions. Spring sampling should result in a more accurate prediction of nitrate-N availability. We are fortunate to have several good analytical labs where growers can have soil samples tested.   Contact the Washington County Extension Office or visit the CropWatch web site cropwatch.unl.edu for a list of soil testing labs.  Contact any of these labs for information on current pricing and how to ship samples.



Nebraska Farmers Union Sponsors College Students Attendance to College Conference on Cooperatives

18 agricultural students and their professors from 4 different Nebraska Colleges traveled to Minneapolis, Minnesota February 14-17 to learn about cooperatives under the guidance of Nebraska Farmers Union.  The participating colleges included the University of Nebraska at Lincoln, Northeast Community College at Norfolk, Southeast Community College at Beatrice, and Nebraska College of Technical Agriculture at Curtis.  The College Conference on Cooperatives brought a total of 97 students from 32 different Midwestern colleges and universities making it the largest College Conference on Cooperatives held to date. 

The Cooperative Conference included tours of the CHS (Cenex Harvest States) Headquarters, the REI Sports Sales Coop, housing coops, food coops, and the Mill City Flour Museum.  The Conference brought in speakers from a vast array of areas including renewable energy, ag coops, rural electric coops, credit unions, and new coops.  NeFU Public Affairs Director Graham Christensen said, “We had another great conference.  The feedback we received from the students and professors was very positive.  The students learned about a host of different ways cooperatives can serve communities, and the wide range of career opportunities available that utilize the benefits of the cooperative approach to economic development.  Everyone left Minneapolis excited about these new opportunities.”

The conference evaluations revealed that 47% of the students in attendance were from farms or ranches, 31% were rural, 12% were from small towns, and the remaining 10% were urban. Christensen said, “The College Cooperative Conference helps make more students aware of additional cooperative tools that can be used to create the economic opportunities needed to help our rural youth stay in their communities.  We are pleased to partner with these Nebraska colleges to help send Nebraska kids to this Conference.”

The annual College Cooperative Conference is co-sponsored by the CHS Foundation in cooperation with the National Farmers Union Foundation.  Nebraska Farmers Union was awarded a grant from the CHS Foundation to help defray the attendance costs for the Nebraska participants.



Upper Big Blue NRD Places Nitrate Management Zone 5 into Phase III Status; Zone 11 Moves to Phase II Designation

The Upper Big Blue NRD Board of Directors met on Tuesday, February 26, 2013, and approved placing Nitrate Management Zone 5 (York County) into a Phase III Status.  Cities and villages located in Zone 5 include Bradshaw, Waco, and York.

Changes to District Rule 5 for setting the trigger levels in Phase II and Phase III management areas went into effect on February 1, 2013.  The Phase III trigger is now 10 milligrams per liter (mg/l).  Zone 5 has been a Phase II management area since 2003.  Zone 5 has a median groundwater nitrate level of 12 mg/l.

The Phase II trigger is now 7 milligrams per liter (mg/l).  The rules change also provides that no more than one management zone would be designated a Phase II management area each year.  There are currently four management zones with a median nitrate level exceeding the Phase II trigger.  Zone 11 (Seward County), which has a median groundwater nitrate level of 8.6 mg/l, has the highest level of the four zones, and has now been designated as a Phase II Management Zone.  Cities and villages located in Zone 11 include Goehner, Milford, Seward, Tamora, and Utica.

Both Zone 5 and 6 have been in Phase II up to this point, however with Zone 5 moving into Phase III, certain requirements now must be met.  Fall-Winter application of anhydrous ammonia in the Phase III Area must include a nitrification inhibitor.  Spring anhydrous application would not require the use of a nitrification inhibitor.  Zone 6 will remain in Phase II for now.  Cities and villages in Zone 6 include Henderson, Luston, and a portion of McCool Junction.

Phase II and Phase III producers would also be required to use electrical resistance blocks or capacitance probes to schedule irrigation in one field.  Scheduling irrigation using soil moisture information can reduce the risk of excess irrigation leaching nutrients from the root zone.

Increasing nitrates in groundwater have been a concern in the Upper Big Blue NRD for several years.  Several communities in the District have found it necessary to construct new wells to comply with state and federal drinking water standards.  Some communities have built, or are considering, treatment plants.  Many rural residents have also replaced wells or installed private water treatment systems.

Nitrate is found naturally in the environment, however excess nitrates that are causing groundwater contamination come primarily from the use of commercial fertilizers.  Nitrogen fertilizer is needed to produce corn, however the amount and timing of the fertilizer application can reduce the risks of groundwater contamination.  Anhydrous ammonia is the most common form of nitrogen fertilizer used throughout the District.

Since 1996, the NRD has required that farmers wait until November 1st to apply anhydrous, and to wait until March 1st to apply other formulations of nitrogen fertilizer.  In some parts of the District where groundwater nitrate is the highest, farmers are required by existing regulations to attend training classes, take soil samples, and calculate crop nitrogen needs.  Despite these efforts, groundwater nitrate levels have continued to rise.  The proposed changes to District Rule 5 are designed to encourage farmers to adopt fertilizer management practices that will reduce the opportunity time for nitrate leaching out of the crop root zone.



2013 GrillMaster Experience BBQ Tour Kicks Off

Today the Beef Checkoff Program, in partnership with the American GrillMaster Experience, announced the kick-off of a nationwide grilling tour taking place at Sam’s Club National BBQ Tour events. Using beef grilling demonstrations, product samples, recipes and other checkoff-funded resources, the American GrillMaster Experience educates and informs consumers about the value and benefits of cooking with beef and grilling techniques.

A total of 30 events covering 25 states are slated for the 2013 tour, which runs from March to November. Events will take place at Sam’s Club® locations, as part of the Sam’s Club National BBQ Tour, which is the largest Kansas City Barbeque Society (KCBS) sanctioned competition series. The Grill Master’s samples are sourced from premium quality Sam’s Club beef, which has a 200 percent freshness guarantee.

“I had the opportunity to experience the 2012 Bentonville, Ark., event and was thoroughly impressed,” says Brett Morris, producer from Ninnekah, Okla., and vice-chair of the Beef Image Committee. “It truly is an event everyone should experience because of the professionalism the checkoff sponsored Grill Master, Michael McDearman, puts into it.. In addition, when going behind the scenes, I thought I had eaten good beef before until I sampled the competition food and there was not one bad entry to be tasted! What really connects consumers to the experience is that the competitors demonstrate the potential beef taste and tenderness it can achieve. It will knock their socks off.”

In 2010, Sam’s Club launched a pilot competitive barbecue program and became the first major retailer to sponsor KCBS, the largest and most respected barbecue sanctioning body in the world. From that pilot program, the Sam’s Club National BBQ Tour was born. During 2011, the inaugural tour became the largest competitive barbecue series in America, and in 2013, the extremely popular competition series will award a whopping $500,000 in prize money.

“These events provide the beef checkoff with an opportunity to encourage interaction between the grillers and consumers,” said Morris. “The Grill Master showcases the different ways to prepare premium-quality beef and to bring out the full flavor and taste each product provides. He speaks about unique pairings for beef products and educates consumers with information they can take home and apply on their own grills.”

Click here to view the GrillMaster events schedule... GrillMasterTour.com.  Stops include...
4/27/2013 - Overland Park, KS
7/20/2013 - Des Moines, IA
11/1/2013 - World Food Championships, Las Vegas, NV



General Session Offers Insight, Inspiration to a Packed House

This morning, emcee Mark Mayfield once again welcomed Commodity Classic General Session attendees to the forum.  The packed house listened intently as Mayfield led the program through a series of exciting presentations from sponsor Dow AgroSciences, U.S. Secretary of Agriculture Tom Vilsack and inspirational speaker Chad Hymas.  Rounded out by a talk show-style panel during which the presidents of all four hosting associations, General Session 2013 provided insight into the broader political climate affecting farmers as well as inspirational messages to take into the upcoming planting season.

Mayfield opened the presidents' roundtable conducting brief interviews with each participant.  Speaking with National Corn Growers Association President Pam Johnson, Mayfield inquired first about the growing push for sustainability and what it means today for farmers.

"Sustainability for corn growers means that we continuously improve the way we grow corn," said Johnson, a farmer from Floyd, Iowa. "In our effort to improve, we need access to the best seed technology, genetics and agronomic practices. For us, sustainability is leaving the land in better shape for our kids and our grandkids."

Mayfield followed up by asking what Johnson believes will help shape a strong future for farmers.

"We have a great story to tell, but sadly we don't have that many farmers out there telling their story," she replied. "This is hurting us in D.C. with our policymakers and in our dialogue with consumers, who want to know who we are, what we do and that their food is safe."

Johnson called upon not only Commodity Classic attendees, but also on Americans across the country, to act now. Coming out of morning discussions with U.S. Secretary of Agriculture Tom Vilsack, she noted that the failure of Congress to pass a farm bill was only one small example of how inaction on the part of our legislators is impacting the country in major ways.

"If there is anything I can leave today with the audience, it is a call to action," said Johnson. "Everyone out there as an American and as a farmer needs to call their representatives in Congress.  They need to say that we are mad as hell. We are sick of people pointing fingers and assigning blame. We aren't going to accept it anymore. You have to act responsibly, and you have to act now."

Mayfield then conducted similar interviews with American Soybean Association President Danny Murphy, National Association of Wheat Growers President Eric Youngren and National Sorghum Producers President Terry Swanson.  Then, the conversation shifted to a more open format as the presidents discussed questions about the continued relevancy of agriculture.  In addition to presenting their organization's thoughts on the issues, the discussion offered a glimpse into the many shared concerns and unique issues facing each group.

For the fourth consecutive year, Secretary Vilsack addressed attendees of Commodity Classic's General Session. He began by expressing his commitment to working with America's farmers.

"I want to start by expressing what every Secretary of Agriculture and all Americans should," said Sec. Vilsack. "Thank you for what you do, and what your families do, every single day. You not only produce enough food for all of our needs every single day, but you produce an abundance that enables us to export much of what you grow to feed the rest of the world and grow U.S. jobs."

Calling farmers both food providers and job creators, the Secretary noted how American farmers' willingness to embrace technology, advanced production practices and conservation techniques allows them to grow an abundance while acting as good stewards of the land and the water.

Next, he noted that most of the energy used across the country comes from rural America with more and more of this energy coming from the feed stock growers produce. This movement toward domestically-produced biofuels has helped reduce our nation's imports of foreign oil. He noted that upon entering his position the country imported 62 percent of its oil supply and now has been able to reduce that level to only 41 percent. He stated that, as this continues to drop steadily, rural America is making the entire nation stronger and more energy secure.

Acknowledging the drought of 2012, Sec. Vilsack outlined how the USDA will work to find ways to mitigate difficulties as the climate continues to warm. He then noted that, over the next year, the USDA will work toward initial steps to help agriculture deal with these challenges. In addition to initial steps, he affirmed that research into the possible challenges and ways to deal with them will continue into the foreseeable future.

The Secretary called on Congress to pass a five-year farm bill that helps build a safety net for farmers and provides support for the growing rural bioeconomy. As he did in prior speeches, he stressed the importance of forward-looking, comprehensive legislation in this area that helps continue the country's tradition of agricultural strength.

Finally, he noted that, before doing so, the Congress must pass a budget. Reminding the audience that the sequester will most probably go into effect later today, Sec. Vilsack described the ways in which these budget cuts must be implemented, how they will impact the USDA and how this will impact farmers.

As he concluded, Sec. Vilsack clarified earlier remarks about the relevance of rural America. He stressed that he is well aware of the important role that farmers play, but that shrinking populations have made farmers less of a voice in the federal government. Then, he stressed that by working together with those who want an economically secure, ecologically secure, energy secure country to fully realize the enormous opportunity in rural America.



NOAA Revises Winter's End Forecast

Government weather forecasts scrapped a dramatic forecast made just a week ago calling for above-normal March temperatures in the eastern two-thirds of the U.S., from southeast Arizona across the Midwest and the East Coast, with the lone exception of south Florida.

In an end-month update to the forecast issued Thursday, the National Oceanic and Atmospheric Administration said the outlook for temperatures in the entire region is cloudy. The entire area now carries an "equal chances" designation on NOAA's forecast map, meaning that temperatures could be normal, below-normal or above-normal.

NOAA also broadened the area of the Northwest were below-normal March temperatures were expected in its Feb. 21 forecast. The update shows below normal temperatures reaching from the entire Pacific Coast inward to Nebraska and stretching northeastwardly to western Iowa and western Wisconsin.



USDA Announces Commodity Credit Corporation Lending Rates for March 2013

U.S. Department of Agriculture's Commodity Credit Corporation (CCC) today announced interest rates for March 2013. The CCC borrowing rate-based charge for March 2013 is 0.125 percent, unchanged from 0.125 in February 2013. For 1996 and subsequent crop year commodity and marketing assistance loans, the interest rate for loans disbursed during March 2013 is 1.125 percent, unchanged from 1.125 in February 2013.

Interest rates for Farm Storage Facility Loans approved for March 2013 are as follows, 1.375 percent with seven-year loan terms, up from 1.250 in February 2013; 2.000 percent with 10-year loan terms, up from 1.875 in February 2013 and; 2.250 percent with 12-year loan terms, up from 2.125 percent in February 2013.



USDA to Simplify Guaranteed Farm Loans by Setting Thresholds on Interest Rates

The U.S. Department of Agriculture (USDA) today announced an interim rule that sets thresholds on the interest rates charged by lenders on guaranteed farm ownership and operating loans. The changes will amend guidelines for interest rates and establish new policies that clearly set the maximum interest rate lenders may charge to borrowers.

"By providing clear thresholds on interest rates for federally-guaranteed farm loans, USDA is ensuring greater certainty to producers, making compliance easier for our lenders and ensuring greater benefits for all farmers and ranchers," said Agriculture Secretary Tom Vilsack. "It is important that American agriculture continue to play a key role in driving economic growth and creating good-paying jobs across the American middle class. By setting thresholds on interest rates, USDA will strengthen access to farm credit."

USDA's Farm Service Agency (FSA) guaranteed loans reduce the risk of loss to lenders (banks, farm credit institutions and credit unions) by guaranteeing up to 95 percent of the loss of principal and interest on a loan. By reducing a lender's risk, borrowers benefit from a lower rate.

The interim rule on maximum interest rates for FSA-guaranteed loans will benefit lenders and producers alike. Lenders have expressed a desire to see greater clarity in FSA's interest rate policy. At the same time, FSA seeks greater consistency with industry standards and other government agencies that administer similar programs. The improvements in the new rule will make credit pricing procedures easier to follow and improve compliance for lenders.

At this time, FSA is also requesting additional comments on the interim policies in the rule, aiming to assure that the benchmark rates required of lenders do not prevent farmers and ranchers from obtaining guaranteed loans. USDA is seeking comments through June 3, 2013.

This interim rule is part of USDA's work to expand credit opportunities for America's farmers and ranchers. In January, USDA announced a new microloan program to help small and family operations, and beginning and socially disadvantaged farmers secure loans under $35,000. The new microloan program is aimed at bolstering the progress of producers through their start-up years by providing needed resources and helping to increase equity so that farmers may eventually graduate to commercial credit and expand their operations. The interest rate for microloans changes monthly and is currently 1.25 percent.

While USDA continues to introduce new products that are more responsive to the credit needs of its diverse customer base, the Department continues to expand its traditional farms loans. In fact, since 2009 USDA has made a record amount of farm loans—more than 134,000 loans totaling nearly $18 billion. USDA has increased the number of loans to beginning farmers and ranchers from 11,000 loans in 2008 to 15,000 loans in 2011. More than 40 percent of USDA's farm loans now go to beginning farmers. In addition, USDA has increased its lending to socially-disadvantaged producers by nearly 50 percent since 2008.



Informa Ups Brazil Estimates

Private analytical firm Informa Economics increased its crop projections for Brazil while holding its estimates for Argentina steady.

Informa pegged Brazil corn production at 71.6 million metric tons, a 1.3 mmt increase from its previous forecast. Even if the upwardly-revised estimate is realized, the crop will still be 1.4 mmt below last year's output.  On soybeans, Informa boosted its Brazilian estimate to 84.5 mmt, a 500,000 mt jump. Brazil's harvest was 28% complete.

After receiving below-normal rains from early January to late February, Argentina's precipitation has returned to near-normal levels, Informa reports, and that's why it kept its corn forecast at 25 mmt.  Informa expects Argentina will produce 51 mmt, also unchanged from last month, noting that rains in late February stabilized yields, given that the majority of beans there are flowering and filling.

USDA's estimate is higher on Brazilian corn production at 72.5 mmt and lower on soybean production at 83.5 mmt.  As for Argentina, USDA is 2 mmt higher than Informa on soybeans and corn at 53 mmt and 27 mmt, respectively.



Paraguayan Soy Harvest Looks Good

With a large portion of the soybean harvest complete, farmers in Paraguay are celebrating what they believe will be a record harvest.  While farmers in Argentina and parts of southern Brazil suffered from dry weather, the principle growing regions in Paraguay got decent showers in January.  As a result, this week soy exporters association reaffirmed its forecast for a record crop of 8.5 million metric tons (mmt), nearly double last year's drought-hit output.  Much of Paraguay's soy is produced along the borders with the Brazilian states of Parana and Mato Grosso do Sul.



AgriBank Reports Fourth Quarter 2012 and Year End Financial Results

Today St. Paul based AgriBank announced financial results for the fourth quarter of 2012 and year end, reporting continued strong levels of net income, capital, liquidity and credit quality.

“Continued demand, coupled with the 2012 drought, and resulting anticipated small carryover stocks, kept key district commodity prices strong. Most crop producers purchased crop insurance which contributed to solid incomes. Many livestock producers used hedging strategies to mitigate exposure to higher feed costs,” said AgriBank CEO Bill York. “Near record net farm income fueled increasing land values, and concerns about tax changes drove many real estate transactions. These factors, and continued opportunities to refinance to lower cost debt, contributed to the strong growth and earnings achieved.”

Year End 2012 Results Compared to Year End 2011 Results
Net income rose 11% to $514.2 million for the year, up from $464.9 million in 2011.  Net interest income was $483.9 million compared with $457.7 million last year, driven primarily by an increase in retail volume, including significant growth in loan participations purchased from the AgDirect equipment financing program. Net interest income remains elevated as the Bank continued to take advantage of a favorable interest rate environment by re-pricing callable debt at lower costs.

Loan loss provisions decreased 13% to $7.4 million.

Non-interest income was up 26% to $153.7 million from $121.7 million in 2011. The increase was attributable to a $30.7 million (67%) increase in income from mineral rights held by AgriBank, the majority of which are in North Dakota and a $15.0 million non-recurring refund from the Farm Credit System Insurance Corporation.

Fourth Quarter 2012 Results
Quarterly net income was $129.4 million compared with $126.5 million for the same period of 2011. The positive impacts of higher net interest income and continued strong mineral income were primarily offset by a reduction in loan prepayment and fee income which are leveling off from highs experienced during the same period of last year.

Loan Portfolio
Total loans grew 12% year-over-year to $69.7 billion at the end of the year, reflecting the growth in retail loans made by Associations in the AgriBank District primarily due to demand for cropland, tax planning strategies and uncertainty regarding tax law changes at year end.

AgriBank’s loan portfolio credit quality remains strong with 99.7% non-adverse loans at the end of the year, the same as the end of last year. Nonaccrual loans declined to $51.4 million from $62.0 million at the end of last year while the allowance for loan losses was $13.3 million compared with $9.2 million.

AgriBank’s overall strong results reflect a continued robust Midwest farm economy despite the effects of the 2012 drought. The significant majority of U.S. corn and soybean production occurs in the AgriBank District. The February 11, 2013 U. S. Department of Agriculture Economic Research Service report projects high levels for both U.S. net farm income ($112.8 billion) and net cash income ($135.6 billion) in 2012. Net farm income for 2012 is forecasted to be down 4.3% from 2011. The income levels forecasted are driven by increased price levels in the grain commodities of corn, soybean and wheat and increases in crop insurance indemnities due to the significant 2012 drought.

Significantly lower production levels, due to drought conditions, are the primary driver for higher corn, soybean and other feed grain prices. The Federal crop insurance program, which is widely used by crop producers, will mitigate the worst impacts of the drought. Usage of the Federal crop insurance program, that includes revenue protection plans, is expected to allow crop producer income to remain adequate. Strong liquidity and equity positions of many borrowers in the loan portfolios are reflected in continued favorable credit quality.

However, high grain commodity prices, which are a primary expense component for the livestock sector, have negatively impacted the livestock sector. Price risk and margin management strategies employed by many livestock producers have allowed many to remain profitable in 2012 or at a minimum minimize losses. However, negative operating margins are likely, for at least a portion of 2013, as the effect of high grain commodity prices are generally unavoidable.



NASA Tests 50% Camelina-Based Jet Fuel

NASA researchers have begun a series of flights using the agency's DC-8 flying laboratory to study the effects of a 50% blend of camelina-based jet fuel on engine performance, emissions and aircraft-generated contrails at altitude.

The Alternative Fuel Effects on Contrails and Cruise Emissions, or ACCESS, research involves flying the DC-8 as high as 40,000 feet while an instrumented NASA Falcon HU-25 aircraft trails behind at distances ranging from 300 feet to more than 10 miles.

"We believe this study will improve understanding of contrails formation and quantify potential benefits of renewable alternate fuels in terms of aviation's impact on the environment," said Ruben Del Rosario, manager of NASA's Fixed Wing Project.

ACCESS flight operations are being staged from NASA's Dryden Aircraft Operations Facility in Palmdale, Calif., and will take place mostly within restricted airspace over Edwards Air Force Base, Calif.

During the flights, the DC-8's four CFM56 engines will be powered by conventional JP-8 jet fuel, or a 50-50 blend of JP-8 and an alternative fuel of hydroprocessed esters and fatty acids that comes from camelina plants.

More than a dozen instruments mounted on the Falcon jet will characterize the soot and gases streaming from the DC-8, monitor the way exhaust plumes change in composition as they mix with air, and investigate the role emissions play in contrail formation.

Also, if weather conditions permit, the Falcon jet will trail commercial aircraft flying in the southern California region in coordination with air traffic controllers to survey the exhaust emissions from a safe distance of 10 miles.

The flight campaign began Feb. 28 and is expected to take as long as three weeks to complete.