Thursday May 16 Ag News

Farm Income Growth Slows
Nathan Kauffman, Economist, Kansas City Federal Reserve

Rising production costs and falling crop prices curbed farm income growth in the first quarter of 2013. High feed and forage costs continued to stifle profitability in the livestock sector, where losses were compounded by declines in livestock prices and the persistence of intense drought. Crop production expenses, particularly for seed and fertilizer, climbed higher as planting season approached. Higher than expected inventories dampened crop prices at the end of the quarter, further limiting farm income gains. Crop prices were expected to fall throughout the growing season and wheat harvest, potentially restoring livestock and ethanol sector profits but restraining farm income from crop sales.

Land values climbed further in the first quarter of 2013. District cropland values rose 20 percent and ranchland values rose 14 percent year-over-year, a modest slowdown compared with the first quarter of 2012. Rising land values strengthened the balance sheet of farmers who own land but boosted debt levels for others financing farmland purchases. Even though most bankers commented that debt levels have remained manageable, some noted that record land prices were raising the debt obligations for young and beginning farmers and producers expanding their operations. Bankers also indicated that livestock producers were more highly leveraged due to recent losses accentuated by drought.

After a robust first quarter, farm household and capital spending were expected to slow in the coming months amid softening incomes and higher operating costs. According to survey respondents, capital spending was stronger than expected in the first quarter even after a surge in equipment purchases at the end of 2012.  Producers appeared to be taking advantage of record low interest rates to finance capital purchases but were using cash to cover operating costs, limiting overall operating loan demand. In addition to weak demand for operating loans, bankers reported fewer requests for farm loan renewals and extensions compared with last year. Although loan repayment rates remained higher than the previous year, the pace of improvement was expected to slow considerably with mounting production costs and expectations of lower farm income.

Read the entire report here...  http://www.kansascityfed.org/publicat/research/indicatorsdata/agcredit/AGCR1Q13.pdf.  



Rural Mainstreet Economy Advances for Month:  Farmland Price Growth Slows

Growth strengthened for the Rural Mainstreet economy over the past month according to the May survey of bank CEOs in a 10-state area.   

Overall: 
The Rural Mainstreet Index (RMI), which ranges between 0 and 100 with 50.0 representing growth neutral, climbed to 58.8, its highest level since December 2012, and up from April’s healthy 58.3.

Bankers reported on the most significant risks to the Rural Mainstreet economy for 2013. Approximately 60 percent reported that low agriculture commodity prices are the greatest threat to the farm-based economy for 2013.  Another 16.7 percent indicated that drought is the number one threat to the rural economy for 2013 while 15.2 percent reported that the bursting of the farmland price bubble is the biggest economic threat for the agriculturally dependent economy for 2013.

On a positive note, Charles Helscher, president of Farmers Savings Bank in Keota, Iowa, reported, “The drought appears to be over in southeast Iowa, at least temporarily.” However he indicated that excessive rain has delayed planting and some bottom ground may not be planted due to flooding.

Farming:
The farmland price index dipped to a still strong 62.1 from 66.9 in April. The farmland-price index has been above growth neutral for more than three years. However, the index has now declined for the fifth time the past six months. The farm-equipment-sales index declined to 52.4 from 57.3 in April.

“Since the beginning of the year, the U.S. dollar has climbed in value by 5 percent,” said Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University. “This has been a factor pushing farm commodity prices downward.  For example, corn prices have slumped by almost 10 percent since December of last year. This trend, which I expect to continue in the months ahead, has taken a bit of the air out of farmland price growth and farm-implement-sales growth.”

Banking: 
The loan-volume index moved above growth neutral for the month. The index rose to 72.1 from 66.0 in April. The checking-deposit index declined to 54.5 from April’s 63.0 while the index for certificates of deposit and other savings instruments advanced to a weak 42.6 from last month’s 40.4.

“We are recording more and more reports of negative economic fallout from Dodd-Frank,” said Goss.

Larry Rogers, president of the First Bank of Utica, Utica, Neb., said, “Dodd-Frank and new regulations from the Consumer Financial Protection Board are strangling us. New regulations are going to cause us to quit making residential real estate loans hurting the people these regulations are supposed to be helping.”

Hiring:
May’s hiring index expanded to 59.8 from April’s 57.5. “Despite solid job creation across Rural Mainstreet beginning in January 2011, rural areas are still not back to pre-recession employment levels. Government data show that regional employment is off more than 1.2 percent,” said Goss.

Bankers pointed to federal policy’s negative impact on job creation. Michael Flahaven, president of Wenona State Bank in Wenona, Ill., said, “The Healthcare Reform Act will likely affect employment in this area in the months ahead. The Dodd-Frank regulations will adversely affect community banks.”

Confidence:
The confidence index, which reflects expectations for the economy six months out, dipped to 54.5 from 56.3 in April. “Over the past three months, we asked bankers how the federal spending sequestration was affecting their area economy,” said Goss. “Each month, approximately three-fourths of the bank CEOs reported no impact from sequestration. Only 1.5 percent reported significant impacts with the remaining 20.6 percent indicating only modest impacts.”

Home and retail sales:
For a fourth straight month the homes-sales index took a large, positive jump. The May home-sales index advanced to a record 73.9 from April’s 70.8. The May retail-sales index rose to 52.3 from April’s 51.4. “Despite the growth in home sales, bankers reported a modest 4 percent growth in housing prices for Rural Mainstreet over the past year.  However, one in 10 bankers indicated that housing prices in their area had expanded by more than 10 percent over the past year,” said Goss. 

Nebraska: 
After moving below growth neutral for January, Nebraska’s Rural Mainstreet index has now moved above growth neutral for four straight months. The May RMI expanded slightly to 57.7 from 57.3 in April. The farmland-price index for May sank to 53.9 from April’s 65.4.

Iowa:
The May RMI for Iowa dipped to 58.1 from April’s 62.3. The farmland-price index sank to 60.7 from 70.0 in April. Iowa’s new-hiring index for May weakened slightly to 59.1 from 60.2 in March.

Each month, community bank presidents and CEOs in nonurban, agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.

This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, president of CNB Community Bank of Greeley, Neb., created the monthly economic survey in 2005.



Energy, Energy, Energy
Bruce Anderson, UNL Extension Forage Specialist

Are you one of the lucky ones with pasture to graze? As you start and progress through the breeding season, are you sure your pasture is providing the right nutrition this year? The answer may surprise you.

Regardless of whether you breed cows on good looking green grass or have virtually no grass, cows are at a higher risk than usual this year of ending up open. Research shows that cows on an increasing plane of nutrition are bred more easily than those on a declining plane of nutrition. So it might be smart this year to do some extra supplementing to make sure your cows get bred.

The supplement needed, though, may not be what you expect. Most of the time when we supplement cows, we provide protein. This year, at least during late spring and early summer, your cows might need energy or TDN even more than extra protein.

Cows are likely to be short on energy if they're grazing pastures that are still in drought. They definitely are deficient in both energy and protein if they are being fed primarily hay or corn stalk bales, especially if the hay isn't alfalfa. While cows grazing lush green grass might more than meet their energy and protein needs now, if it becomes hot and dry like last summer and grasses go dormant later in the breeding season, cows could need extra energy, or protein, or both.

Getting cows extra energy may not be simple, however. High starch feeds like corn grain often reduce digestibility of the roughage in the diet, so they aren't the best choice. Better are digestible fibers like corn gluten, distillers grains, or soyhulls that provide energy much more efficiently, but availability and storage can present challenges.

If you are uncertain about the diet your cows are getting, check with an extension educator or a nutritionist. Supplements may be expensive, but open cows are even worse.



Producers in 38 States Including Nebraska Receive Funds to Support Advanced Biofuel Production

   Acting Under Secretary for Rural Development Doug O’Brien today announced payments to producers in 38 states to support the production of advanced biofuels.  Three Nebraska producers will receive a combined total of more than $1.4 million in payments.  The United States Department of Agriculture (USDA) remains focused on carrying out its mission, despite a time of significant budget uncertainty.  Today’s announcement is one part of the Department’s efforts to strengthen the rural economy.

   Ethanol facilities across the Midwest have traditionally utilized corn as their primary feedstock for ethanol production. Several plants however have found advanced biofuel production to be advantageous and have therefore incorporated grain sorghum into their feedstock.
·       Chief Ethanol Fuels, in Hastings, Nebraska, produces ethanol from sorghum at its ethanol facility located in Hastings, Nebraska.  Chief has participated in the program for three years.  Chief Ethanol Fuel, Inc. will receive $16,314 in payments.
·       Cornhusker Energy Lexington, LLC, also procures sorghum to produce advanced ethanol biofuel at its ethanol facility located in Lexington, Nebraska.  Cornhusker Energy Lexington, LLC has participated in the program since 2011.  Cornhusker Energy Lexington, LLC will receive $2,037 in payments to offset the advanced biofuel production costs.

   Biodiesel is made from an increasingly diverse mix of feedstocks, including used cooking oil, agricultural oils and animal fats.
·       Ag Processing Inc., headquartered in Omaha, Nebraska, produces biodiesel from soybean, canola and waste vegetable oil feedstock at their St. Joseph, Missouri, Sargeant Bluffs, Iowa, and Algona, Iowa production facilities.  It has participated in the program since 2009.  Ag Processing, Inc. will receive $1,404,008 in payments. The payments help offset the costs associated with producing the advanced biodiesel biofuel.

    “These payments represent the Obama administration’s commitment to support an ‘all of the above’ energy strategy,” O’Brien said. “Producing advanced biofuels is a major component of the drive to take control of America’s energy future by developing domestic, renewable energy sources.”

    The funding is being provided through USDA’s Bioenergy Program for Advanced Biofuels, which was established in the 2008 Farm Bill.  Under this program, payments are made to eligible producers based on the amount of advanced biofuels produced from renewable biomass, other than corn kernel starch.  Examples of eligible feedstocks include but are not limited to: crop residue; animal, food and yard waste material; vegetable oil; and animal fat. Biofuel can be from a variety of non-food sources, including waste products.

    Through this and other programs, USDA is working to support the research, investment and infrastructure necessary to build a strong biofuels industry that creates jobs and broadens the range of feedstocks used to produce renewable fuel. More than 280 producers in 45 states and territories have received $192.5 million in payments since the program’s inception.  It has supported the production of more than 3 billion gallons of advanced biofuel and the equivalent of more than 36 billion kilowatt hours of electric energy.



University of Nebraska Water and Natural Resources Tour Is June 25-26

            Urban and rural management of Nebraska's water resources will be examined in a two-day University of Nebraska water and natural resources tour in June.

            The June 25 and 26 tour is jointly planned and conducted by NU’s Water Center, the Kearney Area Chamber of Commerce, and Central Nebraska Public Power and Irrigation District. The Nebraska Water Center is part of NU's Robert B. Daugherty Water for Food Institute.

            The tour leaves from and returns to the University of Nebraska-Lincoln’s East Campus in Lincoln but will be based primarily in and around York and Clay Center.

           Present and future management of Nebraska's surface and groundwater resources from both rural and urban perspectives will be the tour's main focus.

            "In terms of current and future demands and with additional impacts of ongoing drought conditions fresh in everyone's minds, the timing is right to visit these topics in some detail," said tour organizer and retired UNL water resources engineer Mike Jess.

            The annual tour is normally three days, but to keep costs in check and accommodate schedules that sometimes have difficulty fitting in a three-day tour, organizers thought a two-day format was worth exploring for this year's in-state tour. Traditional July tour dates have also been moved up to take advantage of the probability of cooler temperatures.

            The tour will encompass several watersheds and look at both rural and urban water management issues. There will be one overnight at York.

            Anticipated tour stops include:
            –The Jayne Snyder Trails Center, Lincoln, with discussions hosted by the Lower Platte South NRD on the Antelope Creek flood control and urban development project.
            – Spring Creek Prairie Audubon Center near Denton.
            – Monsanto Research Center near Waco for discussions on crop research and genetics.
            – Preferred Sands of Genoa for viewing and discussion of sands used in the fracking industry.
            – Crop demonstration sites and public works water projects in the Upper Big Blue NRD and York areas.
            – Agricultural water management and research projects at UNL’s South Central Agricultural Lab near Clay Center
            – A tour and discussion of the missions of the U.S. Department of Agriculture's Meat Animal Research Center near Clay Center.
            – A tour of Reinke Manufacturing Co. near Deshler.

            Registration is $400 per person single occupancy or $350 per person double occupancy. To register, contact Nollette at the Kearney Area Chamber at (308) 237-3168 or email jnollette@kearneycoc.org. Space is limited and registration is first-come, first-served.

            Additional tour organizers are Jeff Buettner of Central Nebraska Public Power and Irrigation District and Nollette of the Kearney Area Chamber of Commerce.

            Additional sponsors include Monsanto Company and Nebraska Public Power District.



IBIC Joins 50th Anniversary Council Federation Celebration

The Iowa Beef Industry Council is joining with other beef councils around the country in celebrating the 50th anniversary of the Federation of State Beef Councils. Established in 1963, the Federation helps assure grassroots involvement in the national $1-per-head Beef Checkoff Program and provides assistance and support to state beef councils.

First created in 1963 as the Beef Industry Council of the National Live Stock and Meat Board, the Federation is now a division of the National Cattlemen's Beef Association (NCBA), which is a contractor to the Beef Checkoff Program. Qualified State Beef Councils in 45 states collect the $1-per-head checkoff, and retain control of 50 cents of each dollar to be used on in-state, national and international beef promotion, research and education programs approved by their boards. The other 50 cents is sent to the Cattlemen's Beef Board for use in national and international demand-building programs.

"Over the past half century, this has been a successful cooperative effort at the state and national levels to help build demand for our beef," says Terri Carstensen, Iowa Federation Director from Odebolt. "The foundation built by visionary beef producers back in the 1950s and 60s has proven solid over time. We're excited about what we've done, but even more excited about what this partnership means for the future."

In addition to collecting the dollar and conducting in-state programs, state beef councils select representatives to the Federation, which elects half of the members of the 20-member Beef Promotion Operating Committee (BPOC), which helps select programs to be funded with national checkoff funds. BPOC-identified programs must be approved by both the Cattlemen's Beef Board and the U.S. Department of Agriculture. State councils also select representatives of Joint Advisory Committees that help identify Checkoff-funded programs to conduct.

Helen Wiese, Manning, who also represents Iowa on the Federation says giving state beef councils such important roles assures grassroots participation in, and control over, the Beef Checkoff Program. Furthermore, research shows producers continue to support these kinds of efforts in this kind of program. In 1988 the approval level in a referendum to continue the program was 79 percent. The most recent independent producer attitude study in the December 2012 put the producer approval level at 76 percent, which is unchanged since January 2012.

"The bottom-up structure of the Beef Checkoff Program has passed the test of time," says Wiese. "Although there will certainly be changes to our programs and our structure as our industry matures, I'm confident the successful base we've established will be around for at least another half century. We're thrilled to help wish a happy 50th Anniversary to the Federation of State Beef Councils."



AFBF Urges Congress to Keep Current Tax Tools

Farmers and ranchers need a tax code to manage the risks associated with agriculture while complying with tax liabilities, according to the American Farm Bureau Federation. In a statement filed this week with the House Ways and Means Committee for a hearing on small business taxation, AFBF urged congressional members to maintain cash accounting tools and higher small business expensing limits in any tax code rewrite.

Cash accounting tools, like the deferral of commodity and product receipts and prepaying the cost of livestock feed, fertilizer and other farm supplies, are important to farmers. Proposed changes to cash accounting rules, which would require some farmers to change to accrual accounting, would be time-consuming and costly to farms and ranches.

"Farmers and ranchers will either have to take time away from running their businesses or pay for help to comply," said AFBF. "Both are harmful in an industry with tight profit margins, unpredictable income streams and an inability to pass on added expenses to customers."

Farm Bureau said it supports the continuation of unrestricted cash accounting currently available to most farmers and ranchers and cautioned against reducing the number of partnership types eligible to use the tool.

Further, because farming and ranching requires large investments in machinery, equipment and other depreciable capital, Farm Bureau said it supports maintaining the $500,000, Section 179 small business expensing limitation and not reducing the $2 million acquisition limit, both of which are scheduled to drop next year respectively to a $25,000 limitation with a $200,000 threshold. Section 179 provides accelerated expensing and depreciation, allowing farmers to better manage cash flow, minimize tax liabilities and reduce borrowing.



NASS Releases 2012 Chemical Use Data for Soybeans, Wheat

The U.S. Department of Agriculture's National Agricultural Statistics Service has published the 2012 Agricultural Chemical Use Survey data for soybeans and wheat. During the fall of 2012, NASS conducted the survey among soybean producers in 19 states and wheat producers in 15 states. The information released includes on-farm fertilizer use, pesticide use, and pest management practices.

The 19 states surveyed for chemical use on soybeans accounted for 96 percent of the soybean acreage planted in the United States during the 2012 crop year (the period starting after the 2011 harvest through end of the 2012 harvest). Phosphate and potash were each applied to 37 percent of planted acres, making them the most widely used fertilizer materials, followed by nitrogen (27 percent of planted acres).

Farmers applied herbicides to 98 percent of soybean planted acres, more widely than insecticides (18 percent) and fungicides (11 percent). The top monitoring practice for managing pests was scouting for weeds, used on 94 percent of planted acres. The survey also asked about prevention, avoidance, and suppression practices for managing pests.

The 13 states surveyed for chemical use on winter wheat accounted for 80 percent of the winter wheat acreage planted in the United States during the 2012 crop year. The four states surveyed for chemical use on spring wheat (excluding durum) accounted for 91 percent of the spring wheat (excluding durum) acreage planted in the United States in the 2012 crop year. The two states surveyed during the 2012 crop year for chemical use on durum wheat accounted for 88 percent of the durum wheat acreage planted in the United States.

The surveyed farmers applied nitrogen more widely than other fertilizers, applying it to nearly all durum and spring (excluding durum) wheat acres, and to 85 percent of winter wheat acres. Herbicides were the most extensively used pesticide, applied to 99 percent of durum wheat acres, 97 percent of spring (excluding durum) wheat acres, and 61 percent of winter wheat acres.



RFA Welcomes Energy Secretary Moniz

The Renewable Fuels Association (RFA) welcomes newly confirmed Secretary of Energy Ernest Moniz. RFA’s President and CEO, Bob Dinneen, congratulated Secretary Moniz on his appointment, saying:  “Ethanol producers across this country congratulate Secretary Moniz on his appointment. President Obama, Secretary of Agriculture Vilsack and others in the Obama Administration have been enthusiastically supportive of ethanol and other biofuels over the years so we look forward to working with the Obama Administration’s newest team member. Given his background and expertise in energy, we look forward to the Secretary’s first visit to an ethanol plant. We are eager for him to see firsthand the positive economic impact the Renewable Fuel Standard has had in creating new jobs and revitalizing rural economies. We are anxious to introduce him to drivers who appreciate having fuel choices at the pump that save money and protect the environment. We believe Secretary Moniz, like the President, will recognize the power of ethanol to help make this nation more energy independent and less beholden to the whims of foreign governments in oil-rich countries. Again, welcome to Washington and to the Heartland of America, Secretary Moniz.”



Advanced Ethanol Council Congratulates Secretary Moniz
Brooke Coleman, Executive Director of the Advanced Ethanol Council, released the following statement today congratulating Secretary Moniz on his unanimous confirmation by the U.S. Senate.  She says,  “The advanced ethanol industry congratulates Secretary Moniz on his new appointment. Secretary Moniz has just the right combination of technical expertise and political experience to be very effective as the new Secretary of Energy. He clearly understands what it takes to commercialize new energy technologies, and we look forward to working with the Secretary and his colleagues going forward as the advanced ethanol industry deploys commercially in the United States and abroad.”



Smith Statement on House Committee Passage of a Farm Bill

Congressman Adrian Smith (R-NE) made the following statement regarding passage of H.R. 1947, the Federal Agriculture Reform and Risk Management Act in the House Committee on Agriculture:  “Passage of a responsible, long-term Farm Bill is among my highest priorities and yesterday’s markup in the Agriculture Committee was a step in the right direction.  I look forward to reviewing the details of the bill passed by the committee and allowing the legislative process to work.  Given the importance of farm policy to our agriculture economy, it is critical we not only pass a bill, but also to ensure we get the policy right.”



Corn Growers Pleased to See House Ag Committee Progress on Farm Bill

National Corn Growers Association President Pam Johnson released the following statement in response to the House Committee on Agriculture’s farm bill passage late Wednesday night:

“We greatly appreciate the work by House Committee on Agriculture’s Chairman Frank Lucas, Ranking Member Collin Peterson and the Committee to move forward in the process to develop a five-year farm bill. NCGA is assessing similarities and differences between the legislation and our grower-developed policy.

“While we are pleased the process is moving forward, NCGA remains extremely concerned with the Committee’s decision to adopt a fixed-target-price program that moves U.S. farm policy away from the market-oriented reforms that have made possible a robust rural economy. It is also disappointing  the Committee failed to use this opportunity to ensure a Revenue Loss Coverage program that is a genuine risk management option for producers.

“We understand this is only the second step in a long process, and we do applaud the House Ag Committee for holding a markup. Now, we call upon Speaker John Boehner to quickly take up the bill in the full House. We look forward to our continued work with members and staff on this important piece of legislation and urge Congress to pass a farm bill this year.”



House Agriculture Committee Passes Farm Bill, ASA Calls on Full House to Bring Bill to the Floor

The American Soybean Association (ASA) applauds Chairman Frank Lucas, Ranking Member Collin Peterson and the members of the House Agriculture Committee for passing the Federal Agriculture Reform and Risk Management Act earlier today. The bill, which passed the Committee on a 36 to 10 vote, will now head to the House floor for consideration. ASA President Danny Murphy, a soybean farmer from Canton, Miss., commended the Committee and called on the full House to pass the bill as quickly as possible.

“ASA is very pleased that the farm bill is moving forward, and we applaud Chairman Lucas and Ranking Member Peterson, as well as the entire Committee, for their work on the bill,” said Murphy. “The House bill contains several key ASA priorities including provisions to strengthen crop insurance and continue our overseas marketing programs. We remain concerned with the bill’s inclusion of a price-based program under which payments are tied to current plantings, and the potential planting distortions this program could cause if market prices fall. That said, we believe these differences can be ironed out, either on the House floor or in conference with the Senate.”

Murphy noted that ASA was particularly pleased that Rep. Bob Gibbs (R-Ohio) offered and spoke to an amendment that would have decoupled payments under the Price Loss Coverage (PLC) program from current-year plantings in order to avoid production distortions. Rep. Gibbs made clear in his remarks that the PLC program, as included in the draft Committee bill, could distort plantings during periods of low prices, and he argued that all crops should be supported at a consistent level, based on market prices. In withdrawing his amendment, Rep. Gibbs made clear his intention to raise these issues again when the bill moves to the House floor.

“We appreciate Rep. Gibbs’ efforts to highlight the potential distortions that could result from a program based on target prices that are coupled to current-year plantings. The avoidance of such distortions has been a core ASA priority from the beginning, and we commend the Congressman for bringing up this concern during Committee markup.”

Rep. Gibbs was successful in including a second amendment that would require the Secretary of Agriculture to report annually on the impact of the PLC and Revenue Loss Coverage (RLC) programs on the planting, production, price, and export of commodities, as well as on the cost of these programs. ASA supported this provision as a means for monitoring Title 1 programs, particularly if payments based on high support levels are tied to current-year production, which could distort planting decisions.



Wheat Farmers Ready for Farm Bill Floor Action

A statement from National Association of Wheat Growers (NAWG) President Bing Von Bergen, a wheat farmer from Moccasin, Mont.:

"The leaders of the National Association of Wheat Growers (NAWG) and the farmers we represent across the country are excited and grateful for the House and Senate Agriculture Committees' passage of farm bill legislation over the last two days.

"This farm bill has been a long time coming. The bills approved by both Committees are solid products crafted through discussion, debate and significant work on the parts of Members who know the importance of agriculture, the leaders of the Ag Committees and their dedicated staff.

"From all appearances, leaders in both the Senate and House are ready to move the farm bill to the floors of their chambers and across the finish line. Our top legislative priority is completing a long-term farm bill this year, and we stand ready to assist in their efforts to reach this goal."



NCBA on House Agriculture Committee Farm Bill

After a lengthy discussion, the House Agriculture Committee cleared its version of the 2013 Farm Bill during a markup session which ended late Wednesday night. The House markup follows the Senate Agriculture Committee’s much briefer markup of its farm bill Tuesday.

For the National Cattlemen’s Beef Association (NCBA), portions of the House farm bill included priorities important to cattlemen and women such as permanent disaster programs along with the elimination of the livestock title, maintaining of conservation programs and a strong research title. 

NCBA President Scott George, a Cody, Wyo. cattle and dairy producer, lauded the House Agriculture Committee for including disaster assistance in the legislation, stating that it would provide certainty to cattlemen and women who are affected by disastrous weather events and continue to contribute to the nation's strong agriculture industry.

“Farmers and ranchers endure extreme weather conditions - from drought to flood to freezes to the extreme heat – and still work 24 hours a day, seven days a week, 365 days a year to provide the country and the world with food and fiber,” said George. “Including disaster assistance programs in the House farm bill is a positive step toward providing a strong safety net for our producers. We appreciate the work of Chairman Lucas and his committee on this important issue.”

Also included in the House version of the farm bill is an amendment introduced by Rep. Steve King (R-Iowa) that would prohibit states from setting production standards for foods brought in from other states. The amendment would render federal production mandates such as the Humane Society of the United States (HSUS) / United Egg Producers (UEP) proposal, untenable.

“We are encouraged by the amendment introduced by Rep. King, which would keep decisions regarding how to raise livestock and poultry in the hands of farmers and ranchers, where they belong,” said George. “NCBA is supportive of the House version of the farm bill and we hope that both the full House and Senate take up their respective bills soon and continue to move forward with passing a 2013 Farm Bill which is positive for cattle producers and gives rural America much needed certainty.”



Total Farm Safety Net Spending Drops By Two-Thirds as More Farmers Purchase Crop Insurance
(from Farm Policy Facts)

Total government spending on farm safety net programs – including all commodity programs and crop insurance – dropped by two-thirds from fiscal years 2000 to 2012, according to data provided by USDA and the Congressional Budget Office. The reduction took place as spending on commodity programs – including direct, counter-cyclical, loan deficiency and other payments which once represented the lion’s share of safety net spending – has been slowly phased down in favor of crop insurance, which is partially self-funded through farmer premiums and farmer deductibles. 

In 2000, nearly $28 billion was spent on commodity programs and less than $3 billion on crop insurance. Over the course of 12 years, the overall amount of spending slowly but consistently fell and commodity spending and crop insurance spending equalized. In 2012, total farm safety net spending was $10 billion, and was split equally between the two.

During the same period, while spending on farm safety net programs dropped precipitously, the value of crop sales more than doubled, from roughly $93 billion in 2000 to nearly $220 billion in 2012. This exponential growth in crop values was cited by the Federal Reserve as one of the brightspots that brought the country out of the long recession, by bolstering rural America as well as giving a strong shot in the arm to U.S. exports. 

Moving forward over the next two years, crop insurance spending will be up in 2013, due to the 2012 drought, but still small in comparison to past disasters.  Beyond that, USDA projections show spending on commodity programs (even before sequestration and farm bill cuts) will remain flat at $5 billion, while crop insurance spending will decline from the 2013 level.    The Farm Bills proposed by both the House and the Senate will cut an additional roughly 10 percent from commodity programs and crop insurance.



NCBA Statement on Reauthorization of the Animal Drug User Fee Act

National Cattlemen’s Beef Association (NCBA) President Scott George, a Cody, Wyo. dairy and beef producer, issued the following statement on yesterday’s action by the House Energy and Commerce Committee on reauthorization of the Animal Drug User Fee Act (ADUFA):

“Cattlemen and women rely on new and innovative animal health products, and for that reason the reauthorization of ADUFA has been one of the NCBA’s key priorities this year. I am pleased to see the House Energy and Commerce Committee pass ADUFA reauthorization yesterday by a voice vote and look for the full House to consider reauthorization shortly.”

On May 8, 2013, the Senate passed ADUFA re-authorization by unanimous consent.



FSA Administrator Urges Producers to Enroll in DCP/ACRE

USDA Farm Service Agency (FSA) Administrator Juan M. Garcia today encouraged farmers and ranchers to enroll for the 2013 Direct and Counter-Cyclical Payment Program (DCP) or the Average Crop Revenue Election Program (ACRE) before the deadline. Producers who wait until the last minute to sign up could face increased waiting time in FSA county offices.

“We understand that producers have gotten busy, but they can’t forget to visit their county office and sign up for DCP or ACRE,” said Garcia. “Just as farmers and ranchers plan their spring plantings, producers should plan to schedule an appointment to visit their USDA Service Center at the earliest possible time. It’s best to complete the paperwork now rather than to stand in line the day before the deadline,” advised Garcia.

The sign-up for both programs began Feb. 19, 2013. The deadline to sign up for ACRE is June 3, 2013. The DCP sign up period ends Aug. 2, 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).

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



New Report Outlines Corn Ethanol's Ever-Improving GHG Reduction Benefits

Ethanol not only reduces greenhouse gas emissions compared to petroleum but continues to steadily improve upon the levels at which it does so, according to a report released by Dr. Steffen Mueller of the University of Illinois at Chicago's Energy Resources Center. In his study findings, which are now available online, Mueller outlines how ethanol has helped the Renewable Fuel Standard meet its goal of reducing greenhouse gas emissions and, due to a uniquely high rate of innovation and technology adoption in the ethanol industry, continues to improve the level of greenhouse gas emission reductions offered by this renewable, sustainable biofuel.

The report, "Corn Ethanol: Emerging Plant Energy and Environmental Technologies," comes from a study funded by the National Corn Growers Association's Ethanol Committee, the Illinois Corn Growers Association and Monsanto with research assistance provided by the Renewable Fuels Association. Using the data outlined in the paper, NCGA will submit comments on the impact of the Renewable Fuel Standard to the House Committee on Energy and Commerce in response to their third white paper, "Greenhouse Gas Emissions and Other Environmental Impacts."

"The study findings are exciting, but they do not come as a surprise to those who have been involved with the ethanol industry for any significant amount of time," said NCGA Ethanol Committee Chair Chad Willis. "Every day, we see concrete improvements to the technology and practices used to make ethanol and to the final product we provide for America's driving public. While ethanol already offers a renewable, environmentally responsible fuel alternative, we still strive to continually find even better ways to improve and grow a greener energy future."

The report answers specific questions about the environmental impacts of ethanol use under the RFS and shows that, even when potential indirect land use change emissions are considered for ethanol, today's average corn-based ethanol does reduce GHG emissions compared to petroleum.

Using more contemporary feedstock production data from the USDA to update the Argonne National Laboratory's GREET model which calculates GHG emissions, the researchers found that ethanol reduces GHG emissions by 19 to 48 percent compared to gasoline. Furthermore, when ILUC emissions are excluded, average corn ethanol reduces GHG emissions by 29 to 57 percent relative to gasoline.

The study also shows that the RFS is encouraging development of even lower greenhouse gas emitting fuels and has had a positive impact on the adoption of new technologies that accomplish this goal at existing corn-ethanol plants. Substantiating this statement, the report outlines how, on average, dry grind plants produce ethanol at higher yields with lower energy inputs in 2012 than they did in 2008. Not only have yields already increased, continued adaptation of new technologies, which is helped in part by the more tangible incentives and also the market certainty provided by the RFS, will allow the industry to build upon the gains already in place.



RFA and Growth Energy File a Complaint Luxembourg Court to End the Duty on U.S. Ethanol

Today, the Renewable Fuels Association (RFA) and Growth Energy filed a complaint with the General Court in Luxembourg challenging the European Union’s (EU) decision to impose a 9.6 percent antidumping duty on all ethanol imported from the United States.

The complaint outlines 10 specific violations of one established trade law committed by the European Commission in its investigation of anti-dumping claims, and the imposition of a country-wide anti-dumping penalty, against all U.S. ethanol. These include errors in the assessment of relevant facts in determining injury and dumping margins as well as violations of the EU’s own rules regarding the implementation of anti-dumping penalties, such as their refusal to calculate individual dumping margins and assign individual dumping duties, their incomplete and inaccurate calculation of an alleged injury margin, and their overstatement of the volume of imports from the U.S. The complaint from RFA and Growth Energy requests the complete and total end of the duty.

“We believe the implementation of an EU duty on imported ethanol violates EU law and we are proactively taking our case to the General Court in Luxembourg,” said Tom Buis, CEO of Growth Energy.

RFA and Growth Energy are trying to remedy the situation through other avenues as well. EU’s determination to impose the duty violates various requirements put in place by the World Trade Organization (WTO). Consequently, RFA and Growth Energy are working with appropriate officials in the United States to pursue a challenge before the WTO.

Earlier this month, 14 Senators signed a bipartisan letter to Acting Commerce Secretary Rebecca Blank and Acting U.S. Trade Representative Demetrios Marantis demanding that the Administration carefully evaluate the EU’s decision to impose a duty on imported ethanol and consider challenging the WTO requirements.

“We believe this duty violates well established international anti-dumping law, and we are going to pursue every challenge available to us.  Whether it is a private challenge in Luxembourg or a challenge at the World Trade Organization, we are going to fight this illegal ruling to the end, and we are going to win,” said Bob Dinneen, President and CEO of the Renewable Fuels Association.



Japanese Milling Executives Complete Wheat Industry Tour
Julia Debes, USW Assistant Director of Communications

Japan consistently imports more U.S. wheat than any other country, averaging more than 3.21 MMT (118 million bushels) per year for the past five years. Japanese millers, however, are concerned as much with quality as quantity when it comes to the wheat they use.

As part of long-term marking efforts to demonstrate the continued reliability, quality and value of U.S. wheat, USW brought five milling executives to the United States May 1 to 7 for a personal look at this year’s crop potential in North Dakota and to talk trade policy and market developments with U.S. agricultural organizations in Washington, DC.

“These visits to the United States give milling executives more insight and perspective into U.S. wheat’s value,” said USW Japan County Director Wataru “Charlie” Utsunomiya, who accompanied the team. “They also reinforce the strong relationship built between Japanese millers and U.S. wheat farmers, which started in 1949 when the Oregon Wheat Growers League organized the first trade delegation to Japan.”

Today, Japan typically accounts for roughly 10 percent of all U.S. wheat exports, importing significant amounts of HRW, HRS and SW wheat. As of May 2, Japan has purchased 3.69 MMT (135.5 million bushels) of wheat so far this marketing year.

Trade team participants, however, are already looking forward to the upcoming crop. While in North Dakota, the team received an outlook on possible acreage, growing conditions and prices for HRS wheat, even though weather has delayed planting, in addition to meeting directly with wheat farmers.

“The team met with three of our producer board members, which I think is a highlight of these trade teams,” Erica Olson, marketing specialist with the North Dakota Wheat Commission, said. “The buyers get to meet directly with the person who grows the product they buy and our producers get the opportunity to assure them that they are committed to growing the best quality wheat possible. This open dialogue gives everyone a chance to discuss the questions or concerns they may have.”

Olson also said that meeting with researchers at North Dakota State University provided team members with a better understanding of how spring wheat varieties are developed, including how researchers work to meet quality targets. The team also gained more knowledge of the elevator system and the economics of farm production.

USW worked with the North Dakota Wheat Commission to organize this year’s team in addition to collaborating with the North American Millers’ Association, the North American Export Grain Association, the Northern Crops Institute and other industry organizations.



Trade Teams Open Doors for the International Wheat Market
Brittney Fund, USW Communications Intern

Japan’s consistent ranking as one of the largest buyers of U.S. wheat is a great example of what can be achieved by building a strong relationship with overseas markets (see story above) — but Japan is not the only country whose partnership with U.S. wheat farmers has been strengthened through trade teams. Several other trade teams will visit the United States this summer and early fall to gain insight into crop conditions, learn more about U.S. grain production and marketing systems and discuss policy issues.

Trade team visits to the United States are a vital part of building and sustaining a relationship with international wheat buyers. Combined with local trade servicing and support from USW representatives, trade team visits help validate the United States’ position as the world’s most reliable choice for wheat. The planning begins months before the teams’ arrival — but the impact lasts much longer.

For example, U.S. wheat growers have established a strong relationship with Nigerian flour millers and pasta manufacturers through trade teams. Nigerian millers consistently use the United States as a preferred source for about 90 percent of their wheat needs. The partnership can only grow stronger this year when a Nigerian trade team meets with wheat industry leaders in Oklahoma, Kansas and Nebraska from June 1 to 12 to discuss future production levels of all U.S. wheat classes and the potential for new wheat varieties.

None of these trade team visits would be possible without the continued support from our state wheat commission member organizations and USDA Foreign Agricultural Service (FAS) market development programs. In June alone, trade teams from Ecuador, Korea and Israel will make the journey to the United States to meet with U.S. wheat producers, breeders and exporters, hosted by several state commissions. Additionally, teams from Kenya, China, South Africa, the Philippines, Costa Rica, Taiwan and Europe are also scheduled before the end of September.