Monday October 28 Ag News

USDA’s Farm Service Agency Issues ACRE Revenue PaymentsFarm Service Agency (FSA) State Director Dan Steinkruger announced that both non-irrigated corn and non-irrigated soybeans have been determined eligible in Nebraska for revenue payments, called “ACRE” payments, under the provisions of the 2012 Average Crop Revenue Election (ACRE).     Additional Nebraska crops qualifying for ACRE revenue payments include both irrigated and non-irrigated barley and dry peas.  “The impact to our corn and soybean yields resulting from the extreme drought conditions during the 2012 growing season caused revenue declines that are now compensated by the ACRE program” Steinkruger added.   ACRE revenue payments will assist in mitigating the portion of a revenue loss not covered by crop insurance indemnities.

The ACRE program, as a part of the 2008 Farm Bill, provides a revenue safety net which protects declines in either yield or price.  Nebraska qualified to have irrigated and non-irrigated acreages of corn and soybeans considered as separate crops.   ACRE crops may be eligible for payment when the actual state revenue is less than the crop’s state ACRE guarantee.    In order to earn payments, each farm participating in ACRE must also hit the “farm trigger”, which means the actual 2012 farm revenue is less than the farm’s benchmark revenue.  Benchmark revenue is calculated using a 5-year average yield, and a 2-year average national market price.  Actual revenue cannot be determined until the end of a crop’s marketing year, which was August 31, 2013 for 2012 crop corn and soybeans.

Under the provisions of the 2008 Farm Bill, farmers and landowners had an opportunity each year to elect participation in either the ACRE program or the Direct and Counter-cyclical Program (DCP).  The ACRE election could be made in any year, but was then irrevocable through the end of the Farm Bill.   In exchange for the revenue protection offered by ACRE, participants gave up 20% of their direct payments.  ACRE payments are calculated using 85% of the planted acres, not to exceed a farm’s base acres.

Nebraska had approximately 17,000 farms participating in ACRE in 2012.  Individual questions on payments and calculations should be directed to the local FSA Office where the ACRE contract is administered.  For more information on DCP, ACRE and other FSA programs, visit your local FSA Service Center or www.fsa.usda.gov.



Soil Moisture Levels Recovering
With Normal Snows, Likely to Reach Field Capacity by Spring
Al Dutcher, UNL State Climatologist

Soil moisture recharge across most of the state is better than at the start of the 2013 growing season, according to information presented to the Nebraska Climate Assessment and Response Committee October 23. They met to discuss the current drought status across Nebraska and prospects for more moisture before the start of the 2014 crop season. The committee examined impacts of the Colorado flood, the South Dakota blizzard, and above normal precipitation in October that has led to widespread drought reductions across most of Nebraska.

Although massive flooding along the front range of the Rockies resulted in large infrastructure damage to numerous Colorado communities, flooding on the South Platte watershed scoured the channel of water-consuming vegetation and helped recharge the alluvial aquifer.

It has been over a month since the flood surge reached Nebraska. River flows at Roscoe stand at 650 cubic feet per second, five times the average daily flow for this time of year. Flows from now through the spring snow melt are likely to be significantly greater than the past few years because only a small fraction of the water will be lost to infiltration into the alluvial aquifer.

With the alluvial aquifers in the South Platte and along with the Platte east of Lake McConaughy recharged, normal snowmelt likely will have a greater hydrological impact than we’ve seen since 2011. There is enough space available to hold 2.6 million acre feet of runoff. We could mimic the winter snows of 2010-2011 and still have 400,000 acre feet of storage available by the end of snowmelt.

By all accounts, the winter of 2010-11 produced a snowpack of 140%-150% in the northern branch of the Platte. Two significant snow events have hit the headwater region this October and month to date precipitation averages are running over 150% of normal in north central Colorado to 170% of normal across south central Wyoming. With soils moist going into winter, it is expected that much of the snow melt early next spring could become runoff.

Streamflow rates also are likely to benefit from October moisture events, including the Panhandle blizzard at the start of the month and subsequent rainfall from two systems moving through the state. Soil moisture reports across the entire Panhandle are now above average which may enhance flow rates into Lake McConaughy next spring. Of course, these benefits will be contingent on periodic moisture events.
Soil Moisture Recharge Mostly Good

Soil moisture levels in other areas of the state are also showing significant benefits from the intense storm activity of the past 30 days. A few pockets of central and northeast Nebraska have as much soil moisture in the top 4 feet of the profile as was measured in late April and early May of this year. Only one site in the High Plains Regional Climate Center’s soil moisture monitoring network is currently showing less soil water content than it had at the beginning of March.

In short, current soil moisture water content is four to five months ahead of last year and is within 1 inch of normal for all areas except southwest and south central Nebraska. With normal moisture from now through April 2014, most of eastern Nebraska would have 7-8 inches of stored soil moisture and be at or close to field capacity in the top 4 feet of the profile.

The situation is a little more precarious in south central and southwest Nebraska where they haven’t seen as much moisture as other areas of the state. While soil moisture is higher than in March, these sites all had less than an inch of stored moisture in the top 4 feet of the profile. Our best estimate is that it will take approximately 120% of normal precipitation through next April for this area of the state to return to normal soil moisture levels.

Drought Outlook Improves for Nebraska
The positive impacts of recent storm activity can be seen on the latest U.S. Drought Monitor for Nebraska. The October 24 Drought Monitor indicates that 13.35% of the state is not classified in drought, 38.8% is abnormally dry, 20.46% is experiencing moderate drought, while 27.39% of the state is experiencing severe drought or worse.

If storm activity continues through the winter at the same intensity we saw in early October, snowpack levels will be sufficient to provide the necessary runoff to bring reservoirs on the northern branch of the Platte back to near capacity. However, if the winter is mostly dry, abnormally dry or moderate drought conditions are likely to appear in these areas.



Adjusting Cash Rents for 2014
Allan Vyhnalek, UNL Extension Educator in Platte County

I’ve already had landlords and tenants, but especially tenants, contact me regarding cash rents for 2014. The questions is generally, “What should I charge (or pay) for cash rent next year?” The best answer that I can give is “It depends.” That sounds kind of like a non-answer, so let me explain.

Logically, if you look at the top rents mentioned at places of socialization, like places where people gather for coffee, it seems to me that rent should go down some. The economics just do not support $350 per acre for dryland rent, or $500 per acre for irrigated ground cash rent.

Let’s look at where the rent might be based on average yields and expected commodity price levels for 2014. For illustration and discussion, I am using eastern Nebraska data. Too many times, the landlord wants to calculate rent on the best yield and the price of about $8.00 per bushel, which is the best price of the last year. The tenants want to calculate rent on the poorest yielding year of the last 10 years and the lowest price of the last year, which might be about $3.90 per bushel. Neither point of view is fair or realistic.

I have suggested that a starting point for rent should be about 30% of the gross revenue per acre, which would be paid to the landlord. I also insist that this calculation be completed by taking an average yield times a fall 2014 price at the local elevator or grain processor. So, an average irrigated corn yield of 200 bushels per acre times an expected fall 2014 price of about $4.40 would be $880 gross revenue per acre. By multiplying that amount by 30% you arrive at a suggested rent of $264 per acre. This would be the starting point for negotiating rent for 2014.

You can see from this simple calculation, if cash rent for irrigated corn ground is less than $200 per acre, it may be appropriate for the rent to go higher. If rent is above $350 per acre, a decrease in rent seems appropriate.

Now having said that, rent will be determined by what the tenant is willing to pay and what the landlord is willing to accept. Not by a suggested calculation. True economics of a particular commodity is still determined by supply and demand. With land economics, the demand is still exceeding supply from what I am able to determine. That said, cash rents will probably still remain strong in Nebraska. So, a specific rent on a specific farm will vary. This proves why I am right with my original answer. Where will cash rent be in 2014? “It depends!”



2013-14 Farmers & Ranchers College Programs

The Farmers and Ranchers College was formed in January 2000 with the purpose of providing high quality, dynamic, timely educational workshops for agricultural producers in south central Nebraska. It was developed and is supported through a collaborative effort of business, industry and higher education leaders. Last year nearly 400 producers from 14 Nebraska counties and two Kansas counties paticipated in the programs. Participants responding to a survey said the information they gained provided about $21 of benefit per acre.

Following is the schedule of upcoming programs:
-    November 20 — Land Leasing Workshop*, Shickley Community Building, 9 a.m. to 3 p.m. with registration at 8:45 a.m. (Information for young or new farmers will follow the leasing discussion.)
-    December 9 — “Positioning Your Business for Agriculture’s Next Decade” featuring David Kohl, Virginia Tech professor emeritus in agricultural economics, at the Bruning Opera House, Bruning, at 1 p.m.
-    January 28 — Partners In Progress – Beef Seminar* at the U.S. Meat Animal Research Center near Clay Center from 10 a.m. to 3:30 p.m., registration at 9:30 a.m.
-    March 18 — Agricultural Water Update* at the Fillmore County Fairgrounds in Geneva from 10 a.m. to 3 p.m. with registration at 9:45 a.m.

These programs are free, but registration is appreciated for a meal count. Please call the Fillmore County Extension Office at (402) 759-3712 one week prior to the program.



I-CON PREPARES FOR EIGHTH ANNUAL CONVENTION

Independent Cattlemen of Nebraska (ICON) have invited R-CALF USA CEO Bill Bullard to their annual Convention in O’Neill, Nebraska, on Saturday, November 9, at the O’Neill Community Center.

Bullard will talk about Country of Origin Labeling (COOL) and the pending lawsuit filed by the international meatpacking industry. R-CALF USA, Food & Water Watch, South Dakota Stockgrowers Association and Western Organization of Resource Councils have been given the nod by United States District Court for the District of Columbia to intervene and defend COOL.

“As the largest producer-only trade association representing the U.S. cattle industry, we will take this opportunity to aggressively defend COOL for U.S. cattle farmers and ranchers,” said R-CALF USA CEO Bill Bullard in a recent press release from R-CALF USA. “R-CALF USA fought for more than a decade to implement COOL with these very allies and together we are prepared to fight even harder to defend it.”

The R-CALF USA press release went to explain the history of COOL, ‘The requirement for mandatory COOL was first passed in the 2002 Farm Bill, but its implementation was repeatedly delayed by meatpacker pressure on Congress. A coalition of meatpackers (both domestic and international) and packer-producer trade associations sued USDA to block COOL in July 2013, nearly five years after COOL was included again in the 2008 Farm Bill, and additionally sought a preliminary injunction to halt COOL’s implementation immediately.’

After a morning panel of Nebraska state senators, a catered noon luncheon, and Sheriff Richard Mack talking about states’ rights, Bullard will speak.

The day will start with registration at 8 a.m. and the ever popular Senator Panel will begin at 9 a.m. Senator Al Davis, ICON director, will be joining Senators Mark Christensen, Jerry Johnson and Tom Carlson for the ICON panel. The ICON membership is always intrigued by visiting with the Senators in a one-to-one situation. Registration is $50 and pre-payment is also appreciated so ICON staff can order meals.

A Social Hour will precede a Prime Rib Evening Banquet and auction for the Jim Hanna Memorial Scholarship. The evening entertainment will follow. The charge for the evening banquet is $25 and must be reserved before Oct. 30. The evening entertainment is $10 at the door for non-convention participants. Everyone is welcome.

This past year ICON has been deeply involved in the brand issue as a form of animal identification and disease traceability. It supports a bill which would make Nebraska a state-wide brand state.

           More convention information and registration forms will be available in the October issue of the Rancher’s Review and online at http://www.independentcattlemen.com/ , by calling communications director Linda Wuebben at 402-357-3778 or email at linbo@gpcom.net.



Senators Aim to Reduce Some EPA Regulations
U.S. Senator Kay Hagan is leading a bipartisan group of 12 senators in urging the Senate Agriculture Committee to include a provision in the 2013 Farm Bill that eliminates a duplicative Environmental Protection Agency regulation on pesticides.

"This redundant regulation creates unnecessary liability and paperwork burdens on farmers, state and local governments, public health officials and small businesses," Hagan said. "This is not about whether pesticides should be regulated, but rather it is about eliminating an unnecessary and duplicative regulation that wastes taxpayer dollars and provides little to no environmental or public health benefits.

Agriculture is our state's largest industry, and we need to be breaking down barriers that keep farmers from growing jobs, not adding more paperwork. I am hopeful that Agriculture Committee leaders in both the Senate and the House will remove this burdensome requirement in the final 2013 Farm Bill."

Until recently, the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) required EPA to conduct a comprehensive review of pesticides before they could enter the market. However, in 2011 the Sixth Circuit Court of Appeals ruled that Clean Water Act permits are also required for aquatic application of pesticides.

"We urge you to include a provision in the final version of the Agriculture Reform, Food and Jobs Act that specifies that these duplicative permits are not required for the lawful application of FIFRA approved pesticides," the Senators concluded.

Hagan previously introduced a bipartisan bill to eliminate this redundant regulation. The House included similar language in their version of the Farm Bill, but the Senate farm bill did not include the measure. The Senate and House are now in a conference committee to work out the details on a new Farm Bill to reauthorize the current law.



Dairy Producers Reminded of November 1 Deadline to Submit Production Evidence for the Milk Income Loss Contract (MILC) Program

Juan M. Garcia, Administrator of USDA’s Farm Service Agency (FSA), reminds producers that final production evidence and any supporting documentation for the Milk Income Loss Contract (MILC) program for eligible months (including fiscal years 2009, 2010, 2012 and 2013) that MILC payments were available must be submitted by Nov. 1, 2013.

“The MILC program helps dairy producers get through tough economic times, and is another reason we need a new Farm, Food and Job bill," said Garcia. "When low dairy prices create a hardship for dairy producers, payments are made to those who participate in the program to ensure they have the financial assistance they need to maintain their business. An additional benefit is the stimulation of local economies.”

Statutory authority for the MILC program expired Sept. 30, 2013. New legislation must be enacted before the MILC program, or its replacement, can provide assistance.

Dairy operations can obtain more information on MILC by contacting a local FSA office or search “MILC” at www.fsa.usda.gov.



Organic Center announces New Science Advisory Board

The Organic Center (The Center) today announced the names of 24 scientists who have agreed to serve on its newly formed Science Advisory Board.

“We are pleased with the response from prominent scientists to serve on our Science Advisory Board,” said Jessica Shade, Ph.D., The Organic Center’s Director of Scientific Programs. She added, “All are distinguished researchers who are recognized for excellence in the field of organic research.”

The Science Advisory Board will augment The Center’s internal scientific expertise and act as an outside evaluator voice on issues that arise in the organic field. It will serve as a support system for internal scientific management, and provide oversight on the progress of The Center’s scientific initiatives.

Specifically, board members will act as experts in their field to inform The Center on a broad array of organic topics. They will also respond to emerging issues of importance to the organic agriculture, help The Center identify future scientific focus areas, and collaborate with The Center on conducting research in priority areas.

The 24 members include scientists from academic institutions such as Harvard University, the University of California-Berkeley, Cornell University, the University of Michigan, Tufts University, the University of New Hampshire, the University of Maine, and the University of Wisconsin, as well as Newcastle University in the United Kingdom

“This is an unprecedented gathering of the best minds on sustainable food and farming, and The Organic Center is honored to have such prestigious members of the science community on its Advisory Board. These individuals will be critical in adding to The Center’s knowledge base on specific issues, and will give it a broader level of expertise,” Dr. Shade added.

Individual Science Advisory Board members are already contributing to the work of The Center, and have been providing insight and guidance on emerging issues, such as the link between agricultural antibiotic use and the development of antibiotic-resistant bacteria, speaking at events about their research, taking part in roundtable discussions exploring current knowledge gaps in scientific literature about organic food and farming, and collaborating with The Center on developing new projects to fill those knowledge gaps.

Members of the Science Advisory Board include:
    Catherine Badgley, University of Michigan, who focuses on the history of global biodiversity and includes extensive studies of ecosystem changes over geologic time, biogeography of modern mammals, and sustainable agriculture.
    Chuck Benbrook, Washington State University, who has done work examining pesticide use patterns.
    Jeffrey Blumberg, Tufts University, the Director of the Antioxidants Research Laboratory at the Jean Mayer USDA Human Nutrition Research Center on Aging at Tufts University.
    Asa Bradman, University of California, Berkeley, who examines health hazards of pesticide exposure.   
    Andre Brito, University of New Hampshire, who examines pasture-based dairy systems and organic dairy cattle nutrition.
    Patrick Carr, North Dakota State University, who directs an organic research program that focuses on cropping systems and conservation tillage practices suited to horticultural and field crop production.      
    Cindy Daley, California State University, Chico, whose research works to enhance and support organic dairy, including sustainable feeding strategies, nutrient management and value-added marketing.
    Kathleen Delate, Iowa State, whose research focuses on the challenges of organic production.    
    Eric Gallandt, University of Maine, who works on weed management.
    Nguyen Hue, University of Hawaii, whose research examines soil chemistry and heavy metal accumulation.
    Molly Jahn, University of Wisconsin, whose current work focuses on the role of agriculture and our choices within agricultural and food systems in humanity’s long-term sustainable provisioning.    
    Carlo Leiffert, University of Newcastle, UK, who focuses on agricultural production system evaluation/modeling, and integration of agronomic and breeding strategies to improve resource use efficiency in crops and livestock production.
    Alex Lu, Harvard University, who focuses on assessing exposure to environmental chemicals.
    Bruce Maxwell, Montana State University, who works on weed management.
    Charles Mohler, Cornell University, who works on organic weed control.
    Joji Muramoto, University of California, Santa Cruz, who researches fertility and soil-borne disease management.
    Warren Porter, University of Wisconsin, who examines low-level contaminant/pesticide mixtures at environmentally relevant concentrations that affect/alter developmental processes, neurological function, immune function, and endocrine function.
    Alex Racelis, University of Texas Pan American, whose current efforts focus on research in agroecology and sustainable agriculture in the subtropics, and on increasing student diversity in the agricultural sciences through curriculum development and experiential learning.
    Chris Reberg-Horton, North Carolina State University, who looks at organic breeding for fertility management and organic no-till, especially in corn, soybeans, and wheat.
    Jim Riddle, The Ceres Trust, whose interests focus on organic requirements, genetic engineering, soil and water conservation, and organic research needs.
    Erin Silva, University of Wisconsin, whose research includes projects involving organic no-till production, organic cover crop systems, participatory breeding and trialing in organic systems, and cost-of-production tools for diversified organic vegetable producers.
    Phil Stansly, University of Florida, who works on integrated management of citrus and vegetable pests. 
    Danielle Treadwell, University of Florida, who focuses on integrating cover crops to reduce tillage and manage pests in subtropical and tropical horticultural crops.
    Mark Williams, University of Kentucky, whose research focuses on sustainable organic horticulture production.



CF, Mosaic Make Phosphate Deal

Mosaic Co. agreed to buy fellow fertilizer company CF Industries Holdings Inc.'s phosphate operations for $1.4 billion in cash, consolidating this business in Florida amid continued weakness across all fertilizer products.

This past summer, the $22 billion global market for another key fertilizer ingredient, that being potash, was hit by the collapse of a sales partnership that helped underpin potash prices. Mosaic Chief Executive James Prokopanko said it is "anybody's guess" whether there will be resolution to OAO Uralkali and Belaruskali's dispute, which has weighed on fertilizer prices broadly and prompted major buyers to hold off on purchases.

"It's pure speculation as to how and when it might be resolved," he said in an interview with the Wall Street Journal on Monday.

Prokopanko said Mosaic continues to invest "substantial sums" in developing its potash business alongside the phosphate operation, its biggest business by sales.

The major motivation behind the acquisition announced Monday was the opportunity to realize cost savings from combining the two companies' Florida-based phosphate operations.

CF's South Pasture mine is close to Mosaic's planned phosphate mine in Hardee County, allowing Mosaic to save about $500 million by not having to build a planned $1 billion plant and to use that money to reinvest, the company said.

That business "is the hole in the middle of the donut that Mosaic owns that surrounds the (CF) facility," Prokopanko said. "It offers substantial synergies."

Phosphate prices have been hit in recent months by an increased supply among other factors. This September, Mosaic joined other fertilizer giants in warning that results would be hit in the calendar third quarter. The Plymouth, Minn.-based company lowered its sales forecast for the period to between 2.6 and 2.8 million metric tons, from 2.9 to 3.3 mmt, and narrowed its phosphate price forecast to $430 to $440 a ton, from $430 to $465 in July.

Mosaic says the long-term fundamentals for this market are healthy given the major driver, the farming industry, is doing well.

"Farmers are doing well almost everywhere in the world ... and crops nutrients are very affordable," Prokopanko said.

Likewise, the executive said, he sees a rebound in potash prices, not least of all from Uralkali and the Belarusians eventually resolving their dispute.

"We think that the course of action taken by Uralkali does not make economic sense for anyone in the industry, including themselves," he said.

The Russian company abandoned its sales agreement and said it would ramp up production as it pursued a quantity-over-price sales strategy. Potash prices have fallen by around a quarter as buyers step back from the market waiting for further price advantage.

Prokopanko said that the collapse of Belarusian Potash Co. in late July does not affect the future of Canpotex, the North American sales partnership that Mosaic belongs to alongside Potash Corp. of Saskatchewan Inc. (POT) and Agrium Inc. (AGU).

"Canpotex is a very valuable organization; it's a logistics and marketing organization so it does more than simply sell the product," he said.

The CF Industries facilities in Florida produce about 1.8 million tons of phosphate fertilizer per year, which would be added to the annual 8.2 million tons Mosaic produces.

The sale will enable CF Industries to sharpen its focus on its nitrogen business, Chief Executive Stephen R. Wilson said in a statement.

CF Industries recently has faced pressure to return more cash to shareholders from Third Point LLC, the hedge fund run by activist investor Daniel Loeb. Third Point took a roughly 1.5% stake in the company and in July called for it to increase its quarterly dividend. On Oct. 17, CF Industries said it would raise the dividend to $1 a share from 40 cents.

The deal, expected to close in the first half of next year, should add about 30 cents a share to Mosaic's earnings in 2015, the company said.

Mosaic also said Monday that it had also signed strategic supply agreements under which CF Industries will provide Mosaic with up to about one million tons of ammonia a year, starting no later than 2017.