UNL Public Policy Specialist: Rocky Road Ahead for Farm Bill, but Still Doable
Farm-bill politics this year reflect the broader political dynamics in Congress these days – the triumph of ideology over consensus, said a University of Nebraska-Lincoln public policy specialist.
The Republican-controlled House of Representatives finally approved a new farm bill earlier this month, but one that stripped out the food-stamp provisions that have been part of the package for decades. The House bill now heads to an uncertain future in conference with the Senate version, which includes the nutrition elements.
It's likely to take many months to sort out, perhaps going past the ostensible Sept. 30 deadline to the "real" Dec. 31 deadline, said Brad Lubben, UNL public policy specialist.
The political environment has changed, Lubben said. Redistricting of House districts has made many of them less competitive between the parties.
"Redistricting has left us with fewer competitive races and some members have to worry more about their primary races than the general election," Lubben said. In that environment, members from both parties are likely to take their cues from their respective political bases. That leads to increased ideology and less bridge-building consensus.
Lubben pointed out that while conservative Republicans are taking the heat for the House's split of farm and food legislation, liberal Democrats, too, have contributed to the current standoff.
"Politically speaking, the food side of the coalition abandoned the coalition too. ... Back in June, the food side was arguing they shouldn't take any cuts and the farm side should shoulder all of the proposed budget cuts," Lubben said.
That bill proposed less than 3 percent in cuts for food programs and more than 10 percent in cuts for farm and conservation planks. It still didn't get enough Democratic support, Lubben said.
As for what happens next, House Republicans are suggesting action on a nutrition-only bill that could also become part of the farm-bill conference process. If that fails, they could go into conference without an official position on the nutrition package. That could put them in a weak position in negotiations with Senate colleagues, Lubben said.
Lubben said a nutrition- only bill that could get House approval likely would have even bigger cuts than the bill proposed in June, meaning it would draw few Democrats' votes. But any package that emerges from conference with both farm and food-program planks is likely to be "a bill that (House Republicans) like even less" than what they've previously opposed.
"It seems clear that the final version from conferencing with the Senate would be something left of what the House passed in July and probably left even of what they failed to pass back in June," Lubben predicted.
Still, many conservatives are getting exactly what they sought, Lubben said. "Far right interest groups pushed for separating farm and food programs in the farm bill ... They wanted an ideological debate on both parts," he added. "Of course, some of those same conservative groups were then disappointed that the farm-only legislation passed the House without substantially more reforms and budget cuts that what had failed back in June."
"There are some very rural, very conservative districts where representatives voted against the bill both times. Are those districts that really dislike government spending more than they like farm programs? It could be."
The path ahead is challenging, but Lubben pointed out, "We are a step closer."
"I've been optimistic for two years that we would get a new farm bill done based on the fact that we know it's got to be done," Lubben said. "I'm still optimistic."
Then, he added with a laugh, "maybe it's not well founded."
Wheat Stem Sawfly and Alfalfa Weevil Cause Trouble for Growers
Two species of insects have been making life difficult for alfalfa and wheat farmers this season, a University of Nebraska-Lincoln entomologist said.
The wheat stem sawfly and the alfalfa weevil have been reported in higher numbers compared to last year, said Jeff Bradshaw, entomologist in UNL's Department of Entomology.
"We had a fairly warm, mild season last year and the wheat stem sawfly overwinters as a pupa," Bradshaw said. "If it is too warm in the spring, it will just decide to not emerge so it can actually carry over to the next year."
Bradshaw said that the higher numbers this year are partially due to carryover from last year.
The wheat stem sawfly lays eggs in the stem of wheat plants. When the larvae hatch, they damage the stems, causing the wheat to collapse in the field.
Combines have trouble harvesting fallen wheat, leading to a loss in yield.
"Not only can you not harvest the wheat, but when that wheat falls to the ground the mature grain can develop, leading to volunteer wheat," Bradshaw said. "The volunteer wheat can be a host of aphids and wheat curl mites."
Hail can have the same effect on wheat.
A special type of combine can harvest the fallen wheat, Bradshaw said, but the downside is the high cost of the combines.
Wheat can be cut early to prevent damage from the wheat stem sawfly, Bradshaw said. A process called swathing allows the wheat to be cut and placed in a "wind row," where it can dry out and then be harvested at a later date.
Due to the nature of the sawfly, it is difficult to control with chemical sprays.
"Not many products get inside the stem," Bradshaw said.
For farmers with a wheat stem sawfly infestation, there are a few options.
"One option is to plant a hard- stem wheat in a border area," Bradshaw said. "The sawfly can't completely finish development in a hard-stem plant."
If the problem persists, it may be best to transition the field to a different type of crop that is a non-host for wheat sawflies, such as corn, sunflowers, dry peas and some types of barley, Bradshaw said.
For alfalfa growers, the alfalfa weevil can cause damage to crops by eating the foliage.
"It seems to be a big problem," Bradshaw said. "Alfalfa weevil comes in early in the year during the first cut. The problem we have in Western Nebraska is that there seems to be another bump in the population earlier in the season."
Products like chlorpyrifos can be used to suppress alfalfa weevils, Bradshaw said.
"It does a decent job at suppressing the insects," Bradshaw said.
For more information on alfalfa weevils and treatment thresholds, go to: http://cropwatch.unl.edu/web/cropwatch/archive?articleID=5266768.
Cover Crop, Organic Farm Tour Aug. 17
Farmers interested in learning more about cover crops can attend a University of Nebraska-Lincoln Extension Cover Crop and Organic Farm Tour Aug. 17.
Participants will learn more about adding a cover crop to their rotation, reducing cost on inputs and find out what cover crops grow in eastern Nebraska.
In addition, the tour will discuss equipment, when to plant cover crops and how they are used for weed management, increase soil moisture and fertility and extend livestock feed reducing the need to buy hay.
The tour begins at 1 p.m. at the Bernard and Sharon Kavan farm, 2890 Road 30, which is east of Linwood south at Road 30.
The Kavans have been organically farming since the 1970s. A hayrack ride will be given to show the biodynamic farm approach to raising crops and life-time commitment to building the fertility of the soil through legumes and livestock. Refreshments will be provided.
At 2:30, participants will drive nine miles to Larry Stanislav's farm, 4291 Road W, which is located two miles north of Abie. Stanislav has been using green manure and cover crops for more than 25 years.
He will talk about his crop rotation of corn, soybean, spring wheat, green manure/cover crops and alfalfa. He will discuss his UNL on-farm research projects: use of a roller crimper and weed flamer to manage weeds and a three year Nutrient Management Study that evaluated his system of green manure/cover crop and animal manure use.
At 4:30, the tour will drive five miles south to Mike and Karen Ostry's farm, 2281 Spur 12-B, which is one-half mile north of Bruno.
A handicap accessible wagon ride will be available to tour organic field crops, cover crops, large organic garden and on-farm livestock processing facility. Ostry will discuss their direct marketing of chickens, ducks, turkeys, geese, hogs and cattle. Antique farm demonstrations will be held. Families are welcome.
A free meal will start at 5:30 p.m. Music will be provided by the Ostry Family.
Call Wendy at 402-584-3837 for a meal reservation.
This tour is sponsored by Nebraska Chapter #1 Organic Crop Improvement Association.
For more information about the tour, organic production or certification contact Kim at 402-620-2701, email ociane1@yahoo.com.
Farm Safety at Dodge County Fair KidZone
Youth stopping by the check out the KidZone at the Dodge County Fair will learn about farm safety starting at 5 p.m. on August 3. Emilia Woeppel, Farm Credit Services of America (FCSAmerica) outreach coordinator, will be on hand to discuss farm safety.
According to the National Safety Council, agriculture is the nation’s most dangerous industry. Between 1995 and 2000, nearly 700 youth died on farms and ranches in the United States, according to the 2004 Journal of Safety Research.
“The farm is a great place to live,” said Woeppel. “People just need to be mindful of the dangers. Nearly every job on the farm can be dangerous.”
Woeppel partners with Farm Safety For Just Kids to offer safety education for youth. Farm Safety For Just Kids was founded 25 years ago by an Iowa farm wife after the death of her son in a gravity flow grain wagon accident. The organization promotes a safe farm environment to prevent injuries and death by educating our youth.
FCSAmerica sponsors Woeppel’s position, in addition to outreach coordinators in Iowa and South Dakota.
“Raising awareness for farm safety is important in our rural communities,” said Dick Zach, FCSAmerica vice president in the Omaha and Columbus area. “Our goal is to help ensure continued focus for our kids and promote education of safe environments through resources and programs provided by Farm Safety For Just Kids.”
For more information, visit www.farmsafetyforjustkids.org.
AG COMPLIANCE HOSTS SPCC SEMINARS August 5th-7th
Attention farmers and ranchers…Do you store fuel on your property? The EPA requires America’s farms and ranches to prepare A Spill Prevention, Control, and Countermeasure plan on their fuel storage facilities. AgCompliance invites you to several local free educational seminars:
- August 5th in Seward at 9am, 12pm and 3pm at the Cobblestone Hotel and Suites
- August 6th in Columbus at 9am, 12pm and 3pm at the Dusters Restaurant and
- August 7th in Creighton at 9am and 12pm at the Creighton Community Golf Course
This seminar is not conducted by the EPA nor is affiliated with the EPA. Find out how to keep you farm and ranch free from fines by attending one of our free seminars. Please call Ann Forbes at (308) 872-9532 to RSVP or for more details.
Nebraska Corn & Beef Producers Return from Mission Excited About Beef Exports to Japan
A group of Nebraska corn farmers and cattlemen have returned from a trade mission in Japan convinced that Japan will soon return to its traditional spot as the number one export customer for U.S. beef.
The Nebraska Corn Board funded the participation of five Nebraska producers on the Japan mission, which centered on Tokyo and the Sendai region. Tim Scheer of St. Paul and Mark Jagels of Davenport represented the Nebraska Corn Board. Kyle Cantrell of Anselmo represented the Nebraska Corn Growers, while Dale Spencer of Brewster and Doug Parde of Sterling participated on behalf of Nebraska Cattlemen.
Jagels is the chair-elect of the U.S. Meat Export Federation (USMEF), a Denver-based organization supported in part with checkoff funds from the Nebraska Corn Board and dozens of other U.S. organizations. USMEF is responsible for market development and promotion of U.S. beef, pork and lamb around the world. The trade mission was hosted by USMEF's staff in Tokyo.
In January 2013, Japan agreed to permit imports of U.S. beef from animals aged 30 months and younger, up from an earlier restriction of 20 months and younger that was adopted after a 2003 mad-cow disease scare involving one case of the disease, bovine spongiform encephalopathy (BSE), in Washington involving a Canadian-born cow. Now that the restriction has been raised to the 30-month level, about 95 percent of U.S. beef now qualifies for import into Japan.
For all practical purposes, American beef has been out of the Japanese market in the ten years since the BSE scare. "During that time, Australia and New Zealand have been very aggressive in promoting their product into Japan with considerable success," Jagels said. "We need to reintroduce Japanese consumers to the robust flavor of American corn-fed beef—and teach them ways to prepare and enjoy convenient and delicious dishes featuring U.S. beef."
Already, sales of U.S. beef into Japan are on track to exceed $1 billion in value this year, up from virtually zero in 2006. The Japanese market is particularly important to U.S. beef producers since Japan is a high-volume purchaser of beef cuts that are not highly valued in the U.S. "Beef tongue, short plate, skirt and variety meats are greatly desired by Japanese consumers," Scheer said. "Beef tongue that brings about $1.50 per pound in the U.S. will command $7 per pound in Japan—and that adds value to every beef animal raised in America."
The Nebraska team was able to take part in two significant promotions sponsored by USMEF. Some 40 influential "foodie" bloggers from across the country were invited to a luncheon featuring Rika Yukimasa, a rising television star and mother of two. She prepared a number of dishes featuring U.S. beef and pork—and the bloggers reacted with enthusiasm, rushing the stage several times to snap pictures of the food. "Many of these bloggers have 20,000 readers every day," Scheer said. "With that one event, USMEF was able to create a firestorm of positive news about U.S. beef and pork on the Internet in Japan."
The following day, 640 high-level meat buyers and purveyors were on hand for a beef and pork training and information seminar, during which USMEF staffers outlined the consumer promotion campaigns, provided educational information on U.S. beef and pork, and answered questions. Following the seminar, the participants were treated to a buffet dinner featuring a wide range of dishes featuring U.S. beef and pork.
"Within a 36-hour period, USMEF reached some of the most important decision-makers and influencers in Japan," Jagels said. "Add to that the aggressive consumer advertising and public relations campaigns that are underway, and it's very clear that our checkoff dollars are being used to great effect in getting U.S. beef back on Japanese dinner plates."
During the weeklong trade mission, the Nebraska team also:
• Met with several of the top Japanese importers of U.S. beef to discuss their outlook for increased business and their expectations in terms of quality, service and delivery;
• Visited retail establishments to see how U.S. beef and competitive products are being displayed, marketed, packaged and promoted;
• Met with key restaurant chains that feature U.S. beef on their menus, including one chain that specializes in beef tongue (with 30+ different tongue items on the menu!);
• Saw a major advertising campaign for U.S. beef in Tokyo station, one of the largest metro transit stations in that city of 30 million people;
• Toured the Yokohama port facility, through which a large volume of U.S. beef enters Japan;
• Visited a food processing facility that transforms U.S. beef into ready-to-eat convenience meals;
• Visited Japan's largest cold storage facility, which featured a large inventory of American beef and pork—as well as products from a number of competitor nations;
• Got a first-hand look at a Wagyu beef feeding facility as well as an auction of Wagyu beef carcasses. Wagyu beef is highly marbled Japanese beef. It's also highly valued. One 950-lb carcass on auction brought $12,000 US!
"The USMEF Japan team has done an excellent job in raising the profile of American beef and creating excitement that U.S. beef is back in Japan," Scheer said. "All of the key contacts we met were very complimentary of the efforts of USMEF staff and were extremely optimistic about their increased use of American beef."
The group also visited Katsura Island off the coast of Sendai, Japan, the area devastated by the March 2011 earthquake and tsunami. The Nebraska Corn Board was the first commodity organization within USMEF membership to be in Japan with support for the islanders and other victims. Working with USMEF, the Nebraska Corn Board and Nebraska Beef Council helped provide beef and pork and other foodstuffs to the remaining islanders. USMEF partnered with a number of Japanese organizations to make that happen and continues to do so.
One of those organizations is Bond & Justice, a group of Japanese thirty-somethings involved in the nation's hip-hop music industry. During the team's visit, the Bond & Justice group grilled U.S. beef and served the Nebraska team as well as dozens of island residents. The musicians have been visiting Katsura Island about twice a month since the disaster to provide food and social connections for the islanders. USMEF continues to provide beef and pork for these visits.
"Our relief efforts are greatly appreciated as the people of the Sendai region struggle to rebuild their communities and their lives," Scheer said. "We should be thankful that Nebraska is in a position to provide food and support for our Japanese friends who have suffered through unspeakable disaster."
The group returned to Nebraska optimistic about the prospects for regaining market share for U.S. beef in Japan. "It's clear that Japanese importers are very excited and relieved to have American beef back in the marketplace," Jagels said. "Once Japanese consumers again experience the flavor, tenderness and unique qualities of American beef, we expect beef exports to Japan to go nowhere but up. Since Nebraska is a national leader in beef production, this will have a tremendous positive effect on our state's livestock industry."
For a detailed blog on the mission, visit www.midwestcorngrowers.blogspot.com.
Market Access Triggers Swings in Beef Variety Meat Values
Beef, it’s what’s for dinner. In the United States, when we think beef, we are likely to think of a juicy steak, a rack of ribs or our cherished hamburgers. But if you’re pulling your chair up to the dinner table elsewhere, liver may be the main course in Egypt…or tongue in Japan…or heart in Peru…or intestine in Mexico or Southeast Asia.
Rarely found on menus in the U.S., variety meat, offal or fancy meat takes many forms: kidneys, livers, stomachs, tendons, aortas, cheek meat, oxtails and more -- and these beef items are highly prized for use in international cuisine.
When does 12 percent equal 28 percent…or nearly 100 percent?
By any name, variety meat is gold to the U.S. beef industry. Total U.S. beef exports in 2012 set a new record at $5.51 billion. Beef offal represented 12.8 percent ($703.1 million) of that. It also accounted for 28.4 percent of the total volume of beef exports (321,772 metric tons or 709.4 million pounds). And virtually 100 percent of the U.S. livestock herd is represented in variety meat exports – some part of every animal is sold to international customers.
“Demand for both large and small intestines would tank without the international market,” said Jerry Wiggs, export salesman for Greater Omaha Packing Company Inc. “We are selling large intestines to South Korea or Koreans who recently moved to the U.S. And just recently we resumed selling small intestines to Mexico (where they had been banned since BSE was found in the U.S. in late 2003). Without those countries, the markets for those products would basically disappear.”
The same can be said for many beef variety meat items. More than 90 percent of U.S.-produced beef tongues are exported, primarily to customers in Northern Asia and Mexico. Buyers in the Middle East, South America and Russia (when the Russian market is open) buy more than 9 out of 10 U.S. beef livers, hearts and kidneys. And consumers in Mexico and Southeast Asia consume more than 75 percent of U.S. beef stomachs.
Not only are international destinations important for consumption of beef items that aren’t eaten in the U.S., but variety meat often is the first U.S. beef tasted by consumers in many countries.
“There are many examples of how variety meat items are the first point of entry for U.S. beef into developing markets,” said Mark Gustafson, vice president of international sales at JBS. “These consumers may be seeking protein, but they can’t always pay the price of high-end cuts. Variety meat items are very economically priced protein. For example, we’re seeing growing interest in beef kidneys to the Ivory Coast and hearts to Peru, which could open a door to other exports down the road.”
Gustafson also noted that even top beef export markets started out primarily as variety meat markets.
“Japan and South Korea are prime examples,” said Gustafson. “When there was a beef import quota in Japan, they didn’t have a quota on variety meat, such as outside skirts and hanging tenders. Japan’s yakiniku industry grew up around variety meat items that were outside the quota with lower duties. The same with Egypt – it once was strictly a liver market, but now buyers there are purchasing muscle cuts.”
Gustafson noted that the U.S. beef industry has not always produced variety meat items such as beef finger meat and chuck flap. At one time, they went directly into trimming.
“Now, it’s not unusual to have an executive from a visiting Asian meat company stand in a processing plant at the trim belt to see what’s going into rendering or trimmings and ask for samples,” he said. “They know what a strip or tenderloin is, but they’re looking for an item to use in soup or as a protein supplement.”
The importance of market access
The premium prices that offals can generate internationally are only meaningful when the United States has unfettered market access. That message has been illustrated vividly twice this year – once as market access was lost and another when access was regained.
Beef livers are one example. There are essentially two prime international markets for U.S. beef livers: Russia and Egypt. The bottom fell out of liver prices when Russia stepped up enforcement of its zero-tolerance policy for residues of the livestock feed additive ractopamine, effectively closing the market. This action led to liver prices dropping from about 64 cents per pound to 39 cents – a loss of about $3.50 per head just from that one cut. When shipping access to Egypt was threatened by unrest in the Middle East, the price was poised to plummet to 7 cents.
“Russia was a huge niche market,” said Wiggs. “The closing of Russia made Egypt the only game in town (for livers), and they knew it. If Egypt stopped taking livers, they would go into rendering or pet food.”
Russia has a similar effect on beef cheek meat, according to Veronica Leon, vice president of sales for Northern Beef Industries.
“When Russia buys, prices rises about 15 to 20 percent,” she said. “Russian buyers will come in and clean out our inventory.” With about 4.25 pounds of cheek meat per animal going for roughly $1.37 per pound, that Russian presence in the market can add another $1 or so in value per head for this item alone.
While the disappearance of Russia from the market has depressed prices, the opposite occurred when Japan expanded access in February to include beef from U.S. cattle up to 30 months of age. Demand surged for U.S. beef tongues. For an item that averages 2.8 pounds per animal, the jump from $2 per pound to $4 boosted the value per head from this single cut by about $5.60.
While the tongue and liver are dramatic examples, there are others. Mexico is a key market for U.S. variety meat. Wiggs noted that Mexico’s recent decision to accept sweetbreads has boosted returns, while that country is the primary destination for beef feet.
Leon noted that Mexico also is critical for profitability on beef tripe and lips.
“If Mexico closed, a big percentage of beef tripe likely would go to rendering,” she said. “We’d probably lose $4 to $4.50 per animal. And beef lips are a huge item for Mexico. I have no record of lips going anywhere else. There’s almost 3 pounds per head, and they’re being sold high: $1.75 to $1.85 per pound delivered FOB to Mexico. Demand is great for them in Mexico, but in the U.S. they would have no value at all, and would probably end up in pet food.”
Growth potential
USMEF has had a long and active history of promoting variety meat in the international marketplace, and while their exports have increased in recent years, exporters believe that there is room for continued growth.
In addition to exploring new markets, such as Africa, Gustafson believes there’s growth potential in some existing markets.
“Prior to the finding of BSE in the U.S. in 2003, South Korea – along with Mexico – bought almost 100 percent of the small intestines,” he said. “But we’re really not back into that market yet. As each market opens or expands, it creates more opportunity to move the value base up.
“When I first started in this business, variety meat was an afterthought,” he said. “The quality was generally poor. Most would be sold for pet food. Today, the packaging and quality (of variety meat) has almost become a science in itself. We look at the international markets as premium markets, in large part because of variety meat.”
“The reality is that one or more parts of every beef animal produced in this country is being enjoyed by consumers around the world,” said Dan Halstrom, senior vice president of Marketing and Communications for the U.S. Meat Export Federation (USMEF), which is working actively in more than 100 global markets to raise the visibility of U.S. red meat products, including beef variety meat.
“USMEF is targeting specific countries – and niches within those countries – to demonstrate to meat buyers, food service and retail operators how different muscle cuts or variety meat items can be an ideal solution for their business. It’s an education process, but we’re seeing growth and expect it to continue.”
Legislation Introduced to Prevent EPA from Releasing Producer Information
Yesterday, U.S. Sens. Charles Grassley (R-Iowa) and Joe Donnelly (D-Ind.) introduced legislation that protects the personal information of livestock producers from dissemination by the Environmental Protection Agency (EPA). The Farmer Identity Protection Act (S. 1343) comes in response to the EPA’s release of livestock and poultry producers’ names and other personal information to three radical environmental groups through a Freedom of Information Act (FOIA) request in February and again in April. The release divulged names, addresses, geographic coordinates and in some cases telephone numbers and email addresses of over 80,000 producers in 29 states.
“Livestock producers are grateful to Sens. Grassley and Donnelly for introducing this legislation,” according to National Cattlemen’s Beef Association (NCBA) Past President and Pilger, Neb., cattle feeder J.D. Alexander. “Unlike other businesses, cattlemen and women live, work and raise their families on their operations. We have a reasonable expectation of privacy on our private property and there is no conceivable reason for the EPA to release this type of information.”
EPA claims it lacks statutory authority to protect livestock producers’ personal information. The Farmer Identity Protection Act would unequivocally provide the agency with the ability to prevent such farm-specific releases from happening in the future, allowing the agency to provide information to outside parties only in aggregate without individually indentifying information, or with the producer’s consent.
"In this instance EPA went too far, jeopardizing the health and safety of cattle producers and their families,” said Alexander. “As a producer whose information was blatantly given to the recognized enemies of the U.S. beef industry, it comes as a relief to have this legislation introduced. Congress is going to have to be the one to fix this problem created by the incestuous relationship between environmentalists and EPA. Today is a step in that direction, and we thank Sens. Grassley and Donnelly for their efforts.”
NCGA President Testifies on RFS Impacts before House Subcommittee
Today, National Corn Growers Association President Pam Johnson spoke on the impacts of the Renewable Fuel Standard on the agricultural sector before the House Subcommittee on Energy and Power. Other witness panels focused on fuel production and fuel sale and use.
"The Renewable Fuel Standard is doing exactly what it was intended to do," Johnson said during her testimony. "It has positively impacted the agriculture sector by creating jobs and promoting rural development, reducing greenhouse gases and allowing our nation to grow our energy at home."
Johnson stated the ethanol industry has created opportunity in rural America allowing her two sons and a growing number of young farmers to be able to return to the farm after college. She also pointed to benefits to rural communities because of the RFS. Her community in rural Iowa has been able to build a new fire station, remodel the hospital and hire additional teachers because of the economic activity created by the local ethanol industry.
Members on the committee have stated they are using this hearing to determine whether to reform, or even repeal, the RFS. NCGA continues to stress the importance of farmers meeting with their representatives during the August recess and telling personal stories on the benefits of the RFS.
Weekly Ethanol Production for 7/19/2013
According to EIA data, ethanol production averaged 853,000 barrels per day (b/d) — or 35.83 million gallons daily. That is down 23,000 b/d from the week before. The four-week average for ethanol production stood at 868,000 b/d for an annualized rate of 13.31 billion gallons.
Stocks of ethanol stood at 17.3 million barrels. That is a 4.1% increase from last week.
Imports of ethanol were 41,000 b/d, down from last week.
Gasoline demand for the week averaged 377.2 million gallons daily.
Expressed as a percentage of daily gasoline demand, daily ethanol production was 9.50%.
On the co-products side, ethanol producers were using 12.934 million bushels of corn to produce ethanol and 95,197 metric tons of livestock feed, 84,869 metric tons of which were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. Additionally, ethanol producers were providing 4.44 million pounds of corn oil daily.
Boyle to Step Down as AMI President
American Meat Institute's J. Patrick Boyle has announced that he will step down at the end of 2013 as president and CEO of the industry's oldest and largest trade association after 24 years of service to the meat and poultry industry. He is the longest serving president in AMI's 107-year history.
Boyle joined AMI in 1990 after serving as administrator of USDA's Agricultural Marketing Service. Before that, he worked as an attorney at several food trade associations and as agricultural legislative assistant to former Senator Pete Wilson (R-CA).
"It has been an honor and a privilege to lead this great industry for more than two decades. With the organization in a sound position to meet the challenges of the future and given the many accomplishments of the last two decades, this year seemed like an appropriate time for me to move onto another phase of my professional life," he said.
Under Patrick's leadership, AMI has been an influential voice for the meat and poultry industry successfully addressing numerous public policy challenges, according to Chairman Nick Meriggioli, president of Kraft Foods, Inc./Oscar Mayer.
Under his watch, AMI formally petitioned the U.S. Department of Agriculture to require nutrition labels on meat and poultry products and to promulgate a regulation requiring that meat and poultry plants implement HACCP-based food safety controls. USDA subsequently issued final regulations on both proposals.
During the 1990s, Boyle and his team also were the early adopters of the animal welfare approach of Temple Grandin, professor of animal science at Colorado State University, who contended that 'you manage what you measure.' AMI first partnered with Grandin in 1991 on its Recommended Animal Handling Guidelines for the Meat Industry and later on an animal welfare audit program that has become the global standard around the world and is a condition of doing business with many leading foodservice and retail customers.
FSA Reminds Producers of Nearing Deadline to Submit Nominations for County Committees
Juan M. Garcia, Administrator of USDA’s Farm Service Agency (FSA), today reminded farmers, ranchers and other agricultural producers that they have until Aug. 1, 2013, to nominate eligible candidates to serve on local FSA county committees.
"The last day to file your nomination form is about a week away," Garcia said. "Please get involved this year and nominate the candidate of your choice or nominate yourself to serve on your local county committee. I especially encourage the nomination of beginning farmers and ranchers, as well as women and minorities. This is your opportunity to have a say in how federal programs are delivered in your county.”
FSA county committees help local farmers through their decisions on commodity price support loans, conservation programs and disaster programs, and by working closely with county executive directors.
To be eligible to hold office as a county committee member, individuals must participate or cooperate in a program administered by FSA, be eligible to vote in a county committee election and live in the local administrative area where they are running. A complete list of eligibility requirements, more information and nomination forms are available at http://www.fsa.usda.gov/elections.
All nominees must sign the nomination form FSA-669A. All nomination forms for the 2013 election must be postmarked or received in the local USDA Service Center by close of business on Aug. 1, 2013. Ballots will be mailed to eligible voters by Nov. 4 and are due back to the local USDA Service Centers on Dec. 2. The newly elected county committee members will take office Jan. 1, 2014.
Donations to HSUS Down, Donations to Local Shelters Up
(from HumaneWatch.org)
HumaneWatch has had a lot of success. We're approaching 500,000 Facebook fans, we've been around for 3 years, and one of our main messages—that the Humane Society of the U.S. gives only 1 percent of the money it raises to local shelters—is being repeated far and wide.
We were excited to discover that our analysis of IRS data found that local pet shelters saw a 6 percent increase in revenue in 2011. Notably, HSUS's donations in 2011 were down significantly. Its revenue from contributions and grants was down about 6 percent. In other words, there's a 12-percent gap between HSUS and hands-on animal shelters. That's a big blow for the HSUS scammers—but good news for shelters. It would seem that more people are hearing the “give local” message.
And frankly, the gap might be a little higher.
On its tax return, HSUS classifies over $17 million in donated public service announcement time under “contributions and grants.” This not only inflates the total grants and contributions HSUS is bringing in by around 17 percent, but the $17 million would also be reported completely as “program expenses,” inflating how efficiently HSUS is spending donations. (The percentage of budget used by a charity on programs, as opposed to overhead, is a metric that some third-party watchdogs use in rating an organization.)
Given HSUS's P.R.-centric attitude, we're not surprised if it's engaging in a little revenue puffery. Taking out donated-ad “revenue,” it appears HSUS experienced a 9-percent drop in donations from donors last year. So there could be a 15-point gap between HSUS and pet shelters in 2011.
We continue to learn more about the agenda of HSUS, including that its CEO Wayne Pacelle has written that “I don't love animals or think they are cute.” And we'll make sure the public continues to learn about it. Our message certainly seems to be sinking in, despite HSUS's best efforts to attack us.
Caterpillar Highlights Strong Cash Flow and Operational Performance in Second-Quarter Results, Revises 2013 Outlook
Caterpillar Inc. (NYSE: CAT) today announced second-quarter 2013 profit per share of $1.45, down from second-quarter 2012 profit per share of $2.54. Sales and revenues were $14.621 billion, down from $17.374 billion in the second quarter of 2012. Profit was $960 million in the second quarter of 2013, down from $1.699 billion in the second quarter of 2012.
“Even though our sales and profit in the second quarter are down from last year, I’m pleased with how our team has performed. We’ve taken action to respond to the economic environment we find ourselves in, and operationally, the team has done a great job. We experienced headwinds during the quarter, and while we had a positive $135 million gain related to the Siwei settlement, it was more than offset by currency translation and hedging losses, an additional $1 billion of dealer machine inventory reductions and a decline of $1.2 billion in our own inventory. While these were significantly negative to profit in the second quarter, our outlook doesn’t reflect additional currency losses or reductions in our inventory during the second half of 2013. As a result, we expect profit to improve in the second half of the year,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman.
“The $1 billion reduction in dealer machine inventory was more than we previously expected and was negative to our sales and profit in the quarter. While dealer machine inventory is low by historic standards, dealers are utilizing inventory from our product distribution centers and are positioned to reduce inventory even further. As a result, we expect dealer machine inventory to decline about $1.5 to $2 billion in the second half of 2013 and end the year about $3.5 billion lower than year-end 2012. That means that we are underselling end-user demand this year, and it sets us up for better sales in 2014,” Oberhelman added.
“Operationally, we’ve done very well. We’ve taken action to aggressively lower costs, and we’ve been successful in the marketplace with end-user demand for Cat machines outpacing the industry overall. In addition, our business in China improved — our sales and end-user demand for Cat machines were up in the quarter while the overall construction equipment industry was down. Cash flow was outstanding and coupled with our strong balance sheet, puts us in a position to repurchase more Caterpillar stock this year. I am confident we are positioned to improve results in the second half of 2013,” Oberhelman added.
2013 Outlook
We have revised our outlook for 2013 to reflect sales and revenues in a range of $56 to $58 billion, with profit per share of about $6.50 at the middle of the sales and revenues outlook range. The previous outlook for 2013 sales and revenues was a range of $57 to $61 billion, with profit per share of about $7.00 at the middle of the sales and revenues outlook range.
“Overall end-user demand is similar to our previous outlook, but we now expect a more significant reduction in dealer machine inventory. That’s the main reason for the reduction in the sales and revenues outlook. During the second quarter, dealers increased their utilization of inventory from our product distribution centers, which allows them to meet customer demand with less inventory. With the sharp reduction in dealer inventory and the decline in mining, 2013 is turning out to be a tough year and we've already taken action to reduce costs. During the first half of the year, we've had temporary factory shutdowns, rolling layoffs throughout much of the company, reductions in our flexible workforce, and we've reduced discretionary and program costs. While we've taken significant action already, we will be taking additional cost reduction measures in the second half of 2013,” said Oberhelman.
DuPont Reports Profitable First Half of 2013
DuPont announced second quarter 2013 operating earnings per share of $1.28, in line with previously announced guidance. Prior-year second quarter operating earnings were $1.50 per share. GAAP1 EPS from continuing operations was $1.10 versus $1.15 for the second quarter 2012. Results reflect strong Agriculture sales, sequentially improving titanium dioxide volumes and lower Performance Chemicals earnings.
The company says net sales were $9.8 billion, 1 percent below the prior year, principally reflecting lower titanium dioxide pricing. Total company volume increased 1 percent with increases in Agriculture, Performance Chemicals, Performance Materials, and Safety & Protection. Volume declined in Electronics & Communications and Nutrition & Health.
For the first half, agriculture segment sales grew 11 percent driven by seed price gains and volume growth in corn seeds, insecticides and fungicides. First half operating grew 8 percent despite higher seed input costs pressuring margins.
The company continues to expect full-year operating earnings to be about $3.85 per share.
"Agriculture sales remained strong in the second quarter and titanium dioxide volume improved. As expected, this was largely offset by a substantial decline in Performance Chemicals earnings from last year's peak levels," said DuPont Chair and CEO Ellen Kullman. "We anticipate second half earnings will be significantly better than last year's second half. We expect to deliver full-year earnings modestly above 2012 results, overcoming steep declines in the titanium dioxide market and economic headwinds in Europe and parts of Asia."
Operating earnings for its ag division were $941 million, down 1 percent as higher seed input costs were mostly offset by sales growth. Agriculture sales increased 7 percent primarily due to higher seed prices and insecticide and fungicide volumes.
Finally, just because I'm a fan of steam engines.....
Union Pacific Railroad Acquires Big Boy Locomotive No. 4014
Railroad Plans to Restore One of the Largest Steam Locomotives Ever Built
Union Pacific Railroad today announced it reached an agreement with the Southern California Chapter - Railway & Locomotive Historical Society in Pomona, Calif., to transfer ownership of one of the world’s largest steam locomotives, Big Boy No. 4014, back to Union Pacific.
Union Pacific plans to relocate No. 4014 to Cheyenne, Wyo., where Union Pacific’s Heritage Fleet Operations team will work to restore it to operating condition. Details regarding those efforts will be made public at a later date.
Union Pacific donated No. 4014 to the historical society December 7, 1961. The locomotive arrived January 8, 1962, at its current display location at the Rail Giants Train Museum in Pomona.
No other railroad has retained its historical equipment or honored its American roots like Union Pacific.
“Our steam locomotive program is a source of great pride to Union Pacific employees past and present,” said Ed Dickens, senior manager – Union Pacific Heritage Operations. “We are very excited about the opportunity to bring history to life by restoring No. 4014.”
Welcome to the KTIC Agriculture Information blog!!! Check back here for the latest in ag news and information, from local events to international happenings and government reports that affect your operation. Please email with suggestions! -Chad Moyer, Farm Director, KTIC Radio
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