Thursday September 19 Ag News

U.S. Soy Demand Gets Boost from Biodiesel

The biodiesel that fuels semis, farm tractors and bus fleets continues to fuel market potential for U.S. soybean oil and profit opportunities for U.S. soybean farmers.

In order to meet federal biodiesel-usage requirements of 1.28 billion gallons this year, manufacturers will need 9 billion pounds of vegetable oils and animal fats. At least 4.8 billion pounds of that could be soybean oil. That’s the oil from 430 million bushels of U.S. soybeans.  

“There’s value for soybean farmers from the growing market use of soybean oil for biodiesel,” says Gregg Fujan, a USB director and soybean farmer from Weston, Neb. “It expands the market for our soybeans, which also increases the price we receive.”

According to research commissioned by soybean farmers in Minnesota, Nebraska, North Dakota and South Dakota through their state soy checkoff boards, biodiesel contributed to a $15 billion increase in soybean-oil revenues between 2006 and 2012. Over that time period, this raised the price of soybeans by 74 cents per bushel.

Soy-checkoff-funded research on biodiesel’s environmental benefits helped it qualify under the Environmental Protection Agency as an Advanced Biofuel. Under the federal Renewable Fuel Standard (known as RFS2), at least 1.28 billion gallons of biodiesel will be produced in the United States in 2013.

For nearly 20 years, soybean oil has been the primary feedstock for U.S. biodiesel manufacturing. The soy checkoff helps fund biodiesel research and promotion efforts to increase fuel and feedstock demand for U.S. soybean farmers.   



Growth Slows for Rural Mainstreet Economy: Farm Equipment Sales Decline Again

While growth for the Rural Mainstreet economy remains positive, it slowed a bit in September, according to the monthly 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, declined to 52.4 from 55.8 in August.

“Lower grain prices this year are slowing the growth in the Rural Mainstreet economy. Additionally, 39.4 percent of bankers this month indicated that lower grain prices have encouraged farmers to store grain and hold for higher prices later. This strategy is likely to payoff for the farmer given the Federal Reserve’s decision this week to continue their current stimulus program. This $85 billion per month Fed bond program will be supportive of higher agriculture commodity prices and the farm economy in the months ahead,” said Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University.

According to Scott Tewksbury, CEO of Heartland State Bank in Edgeley, N.D., “We are looking at reduced production for 2013 due to late season drought, which is why I anticipate the economy to be down in the next six months.”

As indicated by Jeff Bonnett, president of Havana National Bank in Havana, Ill., “We do anticipate a significant increase in stored or deferred grain sales from this year’s harvest.”

Nebraska: After moving below growth neutral for January, Nebraska’s Rural Mainstreet Index has been above growth neutral for eight straight months. However, the September RMI declined to 53.0 from 56.2 in August. The farmland-price index for September rose to 48.1 from August’s 47.7. Nebraska’s new-hiring index stood at 49.3, down from 53.4 in August. Compared to its pre-recession level, Rural Mainstreet employment in Nebraska is currently down by 1.3 percent.

Iowa: The August RMI for Iowa sank to 53.4 from 56.9 in August. The farmland-price index for September was unchanged from August’s 53.2. Iowa’s new-hiring index for rose to 52.7 from August’s 52.4.  Compared to its pre-recession level, Rural Mainstreet employment in Iowa is currently down by 2.1 percent.

Farming: The farmland-price index declined for the ninth time in the past 10 months. The September index fell to 54.0 from 55.8 in August. “Our farmland-price index has been above growth neutral since February 2010.  However, lower farm commodity prices are slowing growth in farmland prices. The Federal Reserve’s decision to make no changes to their expansionary monetary policy is definitely bullish for agriculture. Most economists, including me, expected the Fed to begin tapering QE3. Thus, the Fed’s lack of action in September will be supportive of agriculture commodity prices, farm income and farmland prices in the weeks and months ahead,” said Goss.

This month bankers were asked how much farmland cash rents expanded in their area over the last year. On average, bankers reported that cash rents grew by 9.9 percent from this time last year.

Farm equipment sales for September once again declined. The index slumped to 48.3 from 49.2 in August. “Lower agriculture commodity prices are weighing on farmer confidence and their willingness to purchase big ticket items such as agriculture equipment,” said Goss.

Banking: The loan-volume index remained above growth neutral for the month at 73.5,  and up from 70.5 in August. The checking-deposit index advanced to 56.3 from August’s 51.7 while the index for certificates of deposit and other savings instruments increased to a very weak 43.8 from August’s 43.5. 

Hiring: September’s hiring index plunged to 53.2 from August’s strong 59.2. “Despite recent healthy job growth, Rural Mainstreet employment is down by 1.2 percent from pre-recession levels. Solid farm and manufacturing productivity growth have allowed businesses to expand their sales with little accompanying job growth,” said Goss.

Confidence: The confidence index, which reflects expectations for the economy six months out, slumped to 46.1 from 53.4 in August. “The farm economy continues to grow but is trending lower as agriculture commodity prices have moved lower. This and the uncertainty surrounding passage of the Farm Bill and potential Congressional budget impasses pushed confidence below growth neutral for the month,” said Goss

Bankers remain concerned about the lack of a farm bill. According to Dale Bradley, CEO of The Citizens State Bank in Miltonvale, Kan., “Passage of a good farm bill is important to most farmers.”

Home and retail sales: The September home-sales index declined to a still strong 60.2 from 72.5 in August.  The September retail-sales index declined to 49.2 from 52.6 in August. “Higher interest rates slowed housing sales, though sales are still increasing at a healthy pace,” said Goss. 

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.



Finding A Home for Renewable Energy and Transmission

A report released this week lays out clear steps that utilities must take in order to involve America’s farmers, ranchers and rural landowners in the critical decisions of how and where to build new energy transmission infrastructure.

“A clean and efficient power system requires wires to transmit and distribute electricity where it is most needed,” said Johnathan Hladik, Center for Rural Affairs Energy Policy Analyst and co-author of the report. “Today’s aging grid struggles to achieve this as consumers are increasingly demanding efficiency and clean energy.”

Hladik was joined by Carl Zichella of the Natural Resources Defense Council in authoring Siting: Finding A Home for Renewable Energy and Transmission, one of eight white papers making up America’s Power Plan, a report curated by the Energy Foundation in partnership with Energy Innovation.

The Siting report can be viewed or downloaded at:  http://americaspowerplan.com/site/wp-content/uploads/2013/09/APP-SITING-PAPER.pdf. 
The full America’s Power Plan report available at:  http://americaspowerplan.com. 

Hladik and Zichella’s paper focuses on the institutional innovations that can help modernize America’s power grid, by making changes to the way we plan for, site and permit clean power generation and transmission infrastructure.

According to Hladik, policymakers have many options to accelerate siting for new generation and transmission needs. This includes changes to the way landowners are compensated for the value of their land. Hladik and Zichella’s paper goes on to focus on reforms needed to locate, coordinate and expedite any new generation or transmission that the grid system requires.

In short, the report calls for policymakers to:
-    Optimize existing grid infrastructure,
-    Fully use available planning processes,
-    Employ “Smart from the Start” criteria,
-    Improve interagency, federal-state and interstate coordination,
-    Work with landowners to develop new options for private lands, including innovative compensation measures,
-    Refine the process to support siting offshore wind developments.

“Today’s siting process can be a particular challenge for transmission line projects that cross many different jurisdictions,” explained Hladik. “But the changes we’ve described here can help accelerate smart siting.”

Hladik and Zichella were among over 150 leading energy analysts from academia, industry and the non-profit sector that were tapped for their analysis in the commissioning of America’s Power Plan, the first national effort to take a comprehensive look at the challenges faced by the electric power system and outline potential policy and market solutions. The report is intended to tackle the tough questions about America’s energy future and serve as a toolkit for state and local decision makers as they seek to address these challenges.



ISU Vet Researchers Develop New Test to Detect PEDV Antibodies

Veterinary researchers at Iowa State University have developed a new test to detect antibodies against Porcine Epidemic Diarrhea Virus (PEDV), a costly disease in pigs confirmed in the United States for the first time this year.

Previously, the virus could be detected only in acute cases while it was still reproducing and infecting a host pig. In such cases, the virus could be identified through the use of a test known as a polymerase chain reaction assay. But those tests could give a false negative if the pig had stopped shedding the disease or if shedding had become intermittent.

The new test, called an immunofluorescence antibody or indirect fluorescent antibody assay and conducted using blood samples from pigs, will allow veterinarians and producers to know if a pig has ever had the disease in the past, whether it's shedding the virus or not. It's the first test available to the U.S. veterinary community that can detect PEDV antibodies.

"The new test gives practitioners and their clients a historical perspective," said Dr. John Johnson, a clinician in veterinary diagnostic and production animal medicine. "It'll help them to understand if a particular animal has been exposed to the virus before. This tool, coupled with polymerase chain reaction results, will provide additional crucial information as veterinarians and their clientele assess the risk of moving a group of animals into a PEDV-negative population."

Dr. Kyoung-Jin Yoon, a professor of veterinary diagnostic and production animal medicine, led the effort in developing the new test. The screening works by detecting the presence of PEDV antibodies in a blood sample. If the antibodies are present, then the pig in question has been exposed to the virus before, Yoon said.

The screening, available through the ISU Veterinary Diagnostic Laboratory, costs $5.50 per sample and can be requested by local veterinarians.

"In order for this test to function, we must first have an isolated virus on hand," Yoon said. "For a long time, it's been difficult to isolate the virus in a cell culture, so there are a lot of tricks and manipulation we have to do to make this virus propagate in cell culture."

The test will be especially helpful to pork producers who are looking for replacement breeding stock, Johnson said. By performing the test, producers can know if an animal has been exposed to the virus in the past before they bring it onto their farms.

The Iowa State University Veterinary Diagnostic Laboratory identified the first U.S. cases of Porcine Epidemic Diarrhea Virus in early May. Since then, the diagnostic laboratory has helped to confirm cases of the disease in 17 states, including Iowa, Yoon said.

The virus was first diagnosed in 1971 in Britain, and Europe has experienced sporadic outbreaks in the years since, while the disease has become prevalent among pigs in Asia since 1982. PEDV infects only pigs and does not pose a threat to human health.

The primary symptom of the disease, which is spread through fecal matter, is severe diarrhea in pigs of all ages with high mortality in neonatal piglets. The most common sources of infectious feces are infected pigs, contaminated trucks, boots and clothing, making biosecurity measures on farms especially important to contain the spread of the disease. Hog producers who notice severe diarrhea among their herd should contact a veterinarian immediately.

Diagnosticians and clinicians in the ISU Department of Veterinary Diagnostic and Production Animal Medicine and the Iowa Pork Industry Center are now working closely with producers and veterinarians to implement best practices to diagnose the disease in other herds and to minimize its impact and prevent its spread to uninfected herds, Yoon said.

He said discovery of the disease in the United States has led a wide range of personnel in the ISU College of Veterinary Medicine to collaborate to help Iowa producers deal with the disease.

"This is a new disease to the U.S., and when that happens, we have to either develop new tests or try to find what's available from other parts of the world," he said. "When those things happen, we have to have a lot of people help out. In this instance, we've seen great collaboration between faculty, technical staff and graduate students at Iowa State to help with our response to this virus."



Questions about Late Harvest, Low Prices Addressed by Iowa State Extension

Members of the extension crops team from Iowa State University responded to producer questions related to the late spring, dry summer and slow crop development by holding meetings in north central Iowa last week.

Extension field agronomists Mark Johnson and Paul Kassel discussed crop maturity, crop drying, potential effects of an early frost, and pre-harvest preparations at meetings held in Clarion, Wesley and Sheffield. Charles Hurburgh, extension grain quality and handling specialist, spoke of 2013 crop quality, including moisture and test weight variability, potential diseases, and the best practices for handling and storing the crop.

Iowa State specialists Chad Hart, extension economist, and Kelvin Leibold, extension farm management specialist, reviewed the 2013-2014 crop market outlook at the meetings.

For the benefit of those not attending the meetings, ISU Extension and Outreach has made video recordings of the presentations available on the Iowa Grain Quality Initiative website at http://www.extension.iastate.edu/grain/.
-    Crop Maturity – Mark Johnson (9 min) https://connect.extension.iastate.edu/p8hjxoaw3x5/
-    Grain Quality and Storage – Charles Hurburgh (14 min) https://connect.extension.iastate.edu/p3jly245js7/
-    Crop Market Outlook – Chad Hart (15 min) https://connect.extension.iastate.edu/p8bvrdk0y66/

As the drought situation continues in Iowa, new material is added to the Dealing with Drought – 2013 webpage. The webpage offers information for dealing with crops, livestock, stress, home and yard and financial concerns during drought situations at  www.extension.iastate.edu/topic/recovering-disasters.



Iowa Soybean Association leaders assume roles with national export group

Iowa Soybean Association (ISA) CEO Kirk Leeds was elected vice chairman of the U.S. Soybean Export Council (USSEC) this week during the group’s annual meeting at the 2013 U.S. Soy Global Trade Exchange conference in Davenport.

Laura Foell of Schaller, who is also involved with the United Soybean Board (USB), was elected USSEC secretary. John Heisdorffer of Keota and USB Chairman Jim Stillman of Emmetsburg also serve on the USSEC board. All three are ISA board members and soybean farmers.

“Iowa is the leading producer of soybeans in the country and, understanding that nearly 60 percent of our crop is exported, anything we can do to help expedite the sale of soybeans for Iowa farmers is important,” said Leeds who is serving his third year on the USSEC board. “Iowa farmers are great spokespeople for the soybean industry. The soybean customers around the world recognize the Iowa brand, and this reinforces to customers that our state and nation are quality suppliers.”

Foell looks forward to her new role on the national export council.

“I think it will help Iowa soybean farmers because we are in the heart of soybean country,” Foell said. “There are many markets for our soybeans … and we want to make sure those markets are open.”



U.S. Cattle Placements in August Seen Down 8.4% From 2012

The number of young cattle entering U.S. feed yards in August was predicted to be the lowest on record for the month, down 8.4% from the year before, according to a Wall Street Journal survey for a federal cattle-on-feed report.

The U.S. Department of Agriculture will release the report at 2pm CDT Friday.

After the historic drought in 2012, feed costs are projected to drop sharply following the harvest of the new corn crop. However, until combines begin rolling through the largest grain-producing regions in the central Midwest, livestock market-watchers have said prices for old-crop feed remain high, giving feedlot operators little incentive to quickly place young cattle onto feed.

Cool, wet conditions for much of the Farm Belt over the summer also contributed to favorable pasture conditions, which could have the effect of producers holding onto replacement cattle longer than usual.

The estimates for placements in August ranged from 1.9% above to 13.5% below a year earlier, across 11 analysts' estimates, with the majority predicting fewer than a year ago. The number of cattle placed, according to the average of the projections, would be 1.84 million head. That figure would be up from the two previous months but represent the lowest August placement numbers since the federal report began recording the monthly estimates in 1996, according to historical USDA data.

On the other hand, analyst Steve Wagner with CHS Hedging suspects there are "more cattle out there than a lot of people think."

"People are paying pretty good money for feeder cattle, which means someone is out there putting them on the lot" to cash in on the higher prices, said Wagner. The spot feeder-cattle contract at the Chicago Mercantile Exchange has risen 2.4% since the start of August, in anticipation of cheaper feed costs in the months to come.

The number of cattle on feed as of Sept. 1 was projected to be 6.5% below a year ago, or 9.959 million head, according to the average of the estimates. That's the fewest head of cattle in feed yards for any month since August 2010.

The estimates ranged from 7.3% to 4% below last year's number.

The average of the estimates for marketings was about 1.866 million head, or 4.5% below the same period a year ago and 5.7% below the 10-year average. July had one fewer weekday this year compared with 2012, but one more Saturday, resulting in slightly less available time for processing cattle.

Feedlot margins were again negative in August, which extended losses to a record 28 consecutive months, according to Rich Nelson, chief strategist with Allendale Inc. in McHenry, Ill. The previous record was 22 straight months set from June 2007 through March 2009.



House Committee Passes WRRDA Bill

Today, the House Transportation and Infrastructure Committee passed H.R. 3080, the Water Resources Reform and Development Act of 2013.  The National Corn Growers Association appreciates the bi-partisan effort put forth by members of the committee to clear this legislation of its first major hurdle in the House.

"A modern inland waterways system is critical to American agriculture and to the nation's economy," NCGA President Pam Johnson said.  "Every year more than a billion tons of domestic commerce, valued at more than $300 billion, travels through our lock and dam system.   In addition, more than one billion bushels of grain which equates to roughly 60 percent of all grain exports, move to markets via the inland waterways each year.  We can't afford to allow such an integral part of our value chain continue to deteriorate."

The bill, which passed by a voice vote, authorizes the U.S. Army Corps of Engineers to continue its work on developing, maintaining and supporting the Nation's port and waterways infrastructures.  It also supports targeted flood protection and environmental restoration needs.  NCGA urges the House Ways and Means Committee to include a barge fuel tax to improve the revenue stream for the Inland Waterway Trust Fund to ensure projects to not continue to fall behind. While a waterways bill has historically been passed every two years, the previous legislation to be signed into law was in 2007.

"While we are very pleased with the action by the House Transportation Committee today, the job is not done," Johnson said.  "In order to build the infrastructure approved by the Committee, we need the Ways and Means Committee to approve funding to come from the private sector to pay for it."

NCGA will continue to educate members of the House on the importance of this legislation prior to the expected floor consideration in October.



ASA Welcomes Committee Approval of WRRDA, Calls for Passage by Full House

American Soybean Association President Danny Murphy, a soybean farmer from Canton, Miss., voiced the association’s approval this afternoon as the House Transportation and Infrastructure Committee voted unanimously to approve the Water Resources Reform and Development Act (WRRDA). The bill includes provisions to speed up Army Corps of Engineers projects and boost harbor maintenance funding. Murphy released the following statement:

“Today’s unanimous vote by the House T&I Committee to pass the WRRDA bill is a very positive sign, and we call on the full House to take up and pass the WRRDA without delay. Soybeans are the nation’s largest agricultural export, and approximately half of all soybeans grown domestically are sent overseas. We contribute the largest share of the nation’s burgeoning farm exports, as well as the agricultural trade surplus. Soybean farmers rely on a reliable network of waterways, locks, dams and ports to move our products from farm to market. Many links in that chain have been, and some are in danger of a catastrophic failure that would bring a stop to commerce. This bill and its companion in the Senate would begin to the process of addressing the backlog and improving our vital waterways infrastructure."



Red Meat Production Down 4 Percent From Last Year

Commercial red meat production for the United States totaled 4.20 billion pounds in August, down 4 percent from the 4.39 billion pounds produced in August 2012.

Beef production, at 2.24 billion pounds, was 5 percent below the previous year. Cattle slaughter totaled 2.82 million head, down 6 percent from August 2012. The average live weight was up 10 pounds from the previous year, at 1,310 pounds.

Veal production totaled 9.1 million pounds, 11 percent below August a year ago. Calf slaughter totaled 64,500 head, down 11 percent from August 2012. The average live weight was up 3 pounds from last year, at 240 pounds.

Pork production totaled 1.94 billion pounds, down 3 percent from the previous year. Hog slaughter totaled 9.56 million head, down 4 percent from August 2012. The average live weight was up 2 pounds from the previous year, at 271 pounds.

Lamb and mutton production, at 13.8 million pounds, was down 3 percent from August 2012. Sheep slaughter totaled 208,100 head, 4 percent above last year. The average live weight was 133 pounds, down 9 pounds from August a year ago.

January to August 2013 commercial red meat production was 32.5 billion pounds, down slightly from 2012. Accumulated beef production was down 1 percent from last year, veal was down 6 percent, pork was down slightly from last year, and lamb and mutton production was up 2 percent.

By State (million pounds, % of Aug 2012)
Nebraska ....:     635.1              95      
Iowa ...........:     556.4              97      
Kansas ......:     481.6              99      



Consumer's Respond to Zilmax
John Michael Riley, Asst. Extension Professor
Department of Agricultural Economics, Mississippi State University

I will simply play the role of messenger this week as I relay information provided by Dr. Jayson Lusk of Oklahoma State University. On Friday, Dr. Lusk released a report summarizing survey results from 1,000+ individuals related to meat and beef demand. The respondents indicated an increase in their willingness-to-pay (WTP) for steaks and hamburger (as well as chicken breast, beans, rice and pasta) but a lower willingness-to-pay for pork chops, deli ham, and chicken wings. The two beef products, steak and hamburger, that the survey inquired about received positive feedback, with WTP reported higher by 8.3% and 1.3%, respectively. While this is positive news for the beef industry given concerns have crept into the closing months of 2013, the results related to expected food expenditures more closely follow other reports of consumers pumping their spending brakes. Respondents indicated they were less likely to make more beef purchases during September (33.19% indicated they would not compared to 26.12% indicating they would) and 58.39% noted they would not eat out more.

A more interesting aspect of Dr. Lusk's survey results was the inclusion of new questions related to the beta-agonist Zilmax. When asked if they had heard of the product 83.65% of respondents replied they had not and of those who had only 3.23% correctly defined the drug's role as a beta-agonist. Many in the industry, myself included, were uncertain of how the general public would react to the news surrounding the product. While not a gauge of the entire population the survey does encompass a representative sample and therefore should be viewed as win with respect to consumer response to this point.



Rabobank Report Finds U.S. Land Values Acceleration to Slow

Investment in U.S. farmland is still competitive with alternative investments, but the era of extremely low interest rates and extraordinarily high commodity prices is drawing to a close, according to a new report from the Rabobank Food & Agribusiness (FAR) Research and Advisory group.

“We’ll likely see lower commodity prices this year, but they aren’t going to be low enough long enough to substantially impact land values over the coming year or so,” says report author and Rabobank Food & Agribusiness Research and Advisory (FAR) senior analyst, Sterling Liddell. “In the short term, strong farmer balance sheets and high rental rates will support current levels. However decreasing commodity prices will keep the values from accelerating as rapidly as they have been.”

The report, “Land Values Peaking Out—But Not Down,” finds in the medium term, the single greatest risk to U.S. agricultural land values is looming higher interest rates.  Interest rates have been increasing through the first half of 2013, but based on the current Federal Reserve policy, a significant increase isn’t expected until 2014 or 2015.

“We are entering an era where planning how you’re going to pay for your land is likely to become as important as planning for marketing your crop,” notes Liddell.

The report forecast finds a decline in land values in the central U.S. of 15 to 20 percent over the next three years. In the Western and Southeast U.S., the decline will be less marked than in the Midwest.  The key determinant in the susceptibility to land value changes is an area’s reliance on grain and oilseeds. While an increase in interest rates will have a similar impact on agricultural land values throughout the country,  the amount of change will depend on the type of crop production and proximity to urban areas.

Central U.S.
Since the four dominant commodity crops (corn, soybeans, wheat and cotton) compete for the same acres in the Midwest, Plains and Delta regions, global grains/oilseed prices will be key factors in determining land values. As global stocks grow, prices will drop, leading to some decline in values over the next two to three years.

Corn led the ramp-up in commodity prices and the associated increase in ag land values. As such, if corn were to fall below 4.50/bu for an extended period of time, a significant decrease in land values could follow.

Western U.S.
Vernon Crowder, senior analyst with FAR, co-authored the report and notes that in the Western U.S. agricultural land values are expected to move in the same direction as those in the Midwest.

“The changes seen in land values in the West, especially those in California, should be less dramatic than that of the rest of the country,” said Crowder. “This is due in large part to the diversity of crops grown in the region.”

Orchards, vineyards and irrigated land in the Western U.S.  have seen extreme increases in land values due to strong market prices and growing export demand.  Interest rates will be the primary determinant of any decline in the value of farmland, but the strength of the U.S. dollar is also important due to the rate of exportation for many commodities produced in the Western U.S. A stronger U.S. dollar will negatively impact exports.

Southeast U.S.
The Southeast U.S. has seen a modest appreciation of irrigated cropland, as it weathers a severe drought. Florida in particular is in the midst of a difficult era, due in part to weather, disease, increased competition  from imports and influence of the struggling housing market leading to a lack of appreciation of farmland value.

Expected increases in interest rates and declines in major cash commodities will lead to a difficult medium term, especially if commodity price declines lead to a reduction in land rents.



Maintaining a Top US Corn Customer

U.S. corn has traditionally enjoyed over 95 percent of the market share in the Japanese milling industry. This past year, however, the U.S. share dropped to around 80 percent due to the U.S. drought and the emergence of competitive suppliers. The U.S. Grains Council is seeking to recapture U.S. market share with one of the United States' largest customers for corn through rebuilding Japanese miller's confidence in U.S. corn.

"Last year's high U.S. corn prices caused by the drought lost market share for U.S. corn in Japan," said Tommy Hamamoto, USGC director in Japan. "Reminders of U.S. corn magnitude, reliability and resiliency are an important step to regaining Japanese corn end-users' confidence in the U.S. corn supply."

The Council escorted a team of Japanese corn millers through Illinois and Iowa to get a firsthand look at the plentiful U.S. corn production, to meet with U.S. corn farmers and to receive updated information on corn farming practices in the United States.

"During this trip, the end-users saw that this year's corn crop would be far better than last year's crop, which I believe will lead to a recovery of U.S. market share in the Japanese corn milling industry," Hamamoto said.

Japan is a mature market for feed grains. The Japanese corn milling industry usually imports around 3 million metric tons (118 million bushels) of corn annually, which is about 21 percent of Japan's total corn demand.



United States Milk Production

Milk production in the 23 major States during August totaled 15.7 billion pounds, up 2.7 percent from August 2012. July revised production, at 15.7 billion pounds, was up 1.3 percent from July 2012. The July revision  represented an increase of 29 million pounds or 0.2 percent from last month's preliminary production estimate.

Iowa:  Milk production in Iowa during August 2013  totaled  392  million  pounds,  up 8.0 percent  from August 2012  according to  the  USDA,  National  Agricultural Statistics  Service  –  Milk  Production Report.  



“Grains for Your Brain” Online
The debate about nutrition and links to human health is center stage on the public agenda again in the United States and many other markets around the world. Within this disparate, sometimes confusing topic, healthy doses of fact-based information are sorely needed. The Grains Food Foundation (GFF) has launched a new, interactive, consumer-focused website called “Grains for Your Brain” to do just that.

With this information, “Grains for Your Brain” aims to arm consumers with common sense strategies backed by nutrition experts.

“GFF marshaled our assets to make GrainsForYourBrain.org a go-to resource for millers and bakers,” Christine Cochran, GFF executive director, said. “They can access the latest scientific research, the questions and answers influencers and consumers are asking about their products and read articles drafted by our advisory board members on the key issues. It is an excellent source for messaging based soundly in science.”

The website focuses on four main areas:

    “Grains in Your Kitchen” features expert videos, meal plans and recipes for adding whole grains to the diet.
    “Grains & Your Brain” highlights videos and articles on nutritional neurology -- how the diet affects the inner workings of the brain.
    “Ask an Expert” provides an extensive frequently asked questions (FAQ) database, including video responses, from a variety of medical experts. Visitors also have the opportunity to submit their own questions.
    “Research & Insights” lists articles and studies written by top nutrition and wellness experts on food, fitness and healthy living.

While the information at www.GrainsForYourBrain.org is prepared primarily for a U.S. audience, USW believes international wheat buyers, millers and processors will gain value from the content.



Mosaic Cuts Potash, Phosphate Outlook

U.S. fertilizer company Mosaic Co cut its third-quarter outlook for the price and sales volume of potash and phosphate on Monday, saying crop nutrient markets had softened in the wake of the breakup of the Belarusian Potash Company. The company's shares eased 0.9 percent in New York after markets closed.

Plymouth, Minnesota-based Mosaic, the second-biggest North American potash producer, lowered its guidance on potash shipments to a range of 1.45 million to 1.65 million tonnes in the third quarter, down from 1.8 to 2.1 million tonnes. It dropped its potash realized price expectation to a range of $330 to $340 per tonne from $330 to $360, reports Reuters.

Mosaic said the cautious tone among buyers in potash markets has spilled over to the crop nutrient phosphate as well.

It lowered third-quarter phosphate volume guidance to 2.6 to 2.8 million tonnes from 2.9 to 3.3 million tonnes. Mosaic also cut its outlook for third-quarter realized phosphate prices to a range of $430 to $440 per tonne from $430 to $465.

Mosaic pegged its third-quarter potash gross margin rate in the low- to mid-30 percent range and its phosphate gross margin rate in the mid-teens.