Tuesday November 19 Ag News

Union Pacific Railroad Excels in Speed, Customer Service
Company is Ready to Handle Record Crop Harvest Transportation

With superior network performance supported by the best average train speed among the four largest U.S. railroads, Union Pacific is uniquely poised to help its customers take advantage of the record grain harvest. Train speed measures cargo movement between rail terminals. The data are compiled by the Association of American Railroads.

"Excellent service is always important to customers, and we are committed to maintaining it even as we accommodate the need for transportation of additional grain," said Paul Hammes, vice president and general manager, Agricultural Products at Union Pacific. "The combination of Union Pacific's train speed performance and available grain car fleet translates into increased freight capacity for the railroad's agricultural customers."

Following the 2012 drought, which significantly reduced crop production during 2012-2013, this year's corn crop has soared to a new national record. In the most recent crop supply and demand report, the U.S. Department of Agriculture said it expects 13.99 billion bushels of corn, up from the September forecast of 13.8 billion bushels. The previous record was 13.1 billion in 2009.

The larger production and robust grain export markets will create much stronger demand for transportation during the 2013-2014 crop year compared to the previous crop year. Customer commitments for Union Pacific trains have increased accordingly, and the company shipped an all-time high number of grain trains to the Pacific Northwest in October.

Union Pacific also is offering a six-month shuttle commitment program. Shuttle commitment programs allow qualifying customers to exclusively use train cars for a pre-determined amount of time, providing guaranteed capacity to these customers. Traditionally, shuttle commitment programs have required customers to commit annually. The six-month option offers the opportunity to use the train cars for a shorter time, allowing for greater flexibility during peak periods.

"Union Pacific prides itself on giving customers the assurance of capacity when they need it most," Hammes said. "Our investments in service and equipment allow us to grow along with our customers."



No-Till Organic Crop Rotation Workshop Jan. 11 in Columbus

            University of Nebraska-Lincoln Extension and Nebraska OCIA will co-sponsor a no-till organic crop rotation workshop from 1:30-4 p.m. on Jan. 11 at Central Community College, 4500 63rd St., Columbus (http://www.cccneb.edu/columbuscampus).

            Randy Anderson, USDA-ARS research agronomist at the North Central Agricultural Research Laboratory in Brookings, S.D., will present his research findings followed by a farmer roundtable discussion on cropping systems. Cost to attend the workshop is $15. Registration is at the door and the event is open to the public.

            Anderson, a weed ecologist, will discuss the goal of his research program to develop a continuous no-till cropping system for organic producers. He will present results on converting red clover fields to cropland without tillage and describe a no-till cultural system that suppresses weed growth in soybean more effectively than tillage-based management. Though this is focused on organic producers, any producer wanting to decrease input costs will find this information useful.

            Anderson also will discuss the impact of underseeding clovers in winter and spring wheat on downy brome growth.  Producers will learn how to minimize the need for tillage to control weeds and how a system based on winter-killed cover crops can control weeds adequately to grow no-till.

            Anderson’s research focuses on reducing the need for weed management inputs by understanding the aspects of weed population dynamics. He developed a population-based approach to weed management that reduced input costs for weed management 50 percent compared to conventional practices. He looks at the benefit of crop diversity and crop sequences that are synergistic and improve growth efficiency of the following crop, thus crop yield can increase without needing to increase resource inputs such as fertilizer or water. He has observed that tolerance to weed interference is greater with synergistic sequences, thus possibly reducing the need for herbicides.

            Producers using no-till rotations can learn more about how synergistic crop sequences are improving land productivity, farm economics, soil health and resource-use-efficiency in the semiarid Great Plains. UNL will share an update on organic research results using crimper and flamer to manage weeds.

            A round table discussion will follow so producers will have a chance to discuss their crop rotations and how they can reduce tillage and improve soil health.

            For more information about the workshop contact Liz Sarno at 402-309-0944.



Nebraska Ethanol Board meeting Dec 2

The Nebraska Ethanol Board will meet on Monday, December 2nd  at 10:00 a.m. The meeting will be held at the Crane Trust Center located near the Alda Exit on Interstate 80. The meeting will mainly focus on current fiscal year projects and budget items. The agenda follows:
-    Call Meeting to Order
-    Approval of Agenda
-    Minutes
-    Budget Status Report
-    Management Services Agreement and Discussion
-    Personnel
-    Ethanol Marketing Programs and Project Approvals
-    Internship Program Report and Proposal
-    State and Federal Legislation
-    Ethanol Plants Report
-    Chair’s Report
-    Administrator’s Report
-    Travel Reports and Authorization
-    Next Meeting Date and Time
-    Working Lunch
-    Adjourn

This agenda contains all items to come before the Board except those items of an emergency nature.



Iowa Corn Farmers Featured in New Multimedia Campaign

Four Iowa farmers are featured in a new multimedia, statewide, campaign by the Iowa Corn Growers Association and the Iowa Corn Promotion Board. Television advertisements focus on ethanol/economic development, products from corn to ethanol process and conservation practices on farm. The campaign will also include online, print, and radio messages.

"We are proud of the outstanding farmers we have in Iowa," said Shannon Textor, Market Development Director for Iowa Corn and the staff person responsible for ethanol marketing. "We picked just four Iowans for the campaign, but we have thousands more great Iowa farmers that we could have chosen to feature."

The campaign starts November 15 and runs through December 14 with possible expansion to other topics. The farmers featured in the ads range in age, experience, and have different farming operations. They are united, however, on their passion for agriculture in general.

The following farmers were featured and more information can be found at www.iowacorn.org:
-- Mark Recker-Arlington, Iowa
-- Brent Drey- Sac City, Iowa (Iowa State University Student)
-- Pam Johnson- Floyd, Iowa
-- Bill Couser- Nevada, Iowa

"We can't forget to mention the campaign includes a fuel giveaway," said Textor. "Our hope is that they will see ways to get involved on the ethanol issue while signing up for ethanol produced by the farmers in this campaign."

More campaign details along with the ads and information on the Fill Up on Us campaign can be found at www.iowacorn.org/fillup.



Pork Checkoff Board of Directors to meet Nov. 18-20, 2013, in Des Moines

The National Pork Board will hold its next meeting Nov. 18-20, 2013, in Des Moines, Iowa. Board President Karen Richter, a farmer from Montgomery, Minn., will preside over the meeting as the board finalizes the 2014 budget.

“We have a number of challenges ahead this next year—from sustaining the momentum of our Pork. Be Inspired.® campaign to helping producers facing new swine diseases find the answers they need to keep their pigs healthy. The budget that we’ve put together will help us meet these challenges head-on,” said Richter.

In addition to finalizing the Pork Checkoff 2014 budget, the agenda for the board meeting includes reviewing Pork Quality Assurance® Plus program developments, as well as updates on Pork Checkoff-funded research and producer education outreach on porcine epidemic diarrhea virus. The board of directors will also discuss an innovative new program that could help producers during future disease outbreaks.

Meetings of the National Pork Board are open to the public. Those wishing to attend are asked to contact Jamie Lowrey Byrnes at jlowrey@pork.org, or (515) 223-2600.



US Milk Production Up 1.2% in October

Milk production in the 23 major States during October totaled 15.4 billion pounds, up 1.2 percent from October 2012. September revised production, at 14.8 billion pounds, was up 1.0 percent from September 2012.  The September revision represented a decrease of 13 million pounds or 0.1 percent from last month's preliminary production estimate.  Production per cow in the 23 major States averaged 1,806 pounds for October, 14 pounds above October 2012.  The number of milk cows on farms in the 23 major States was 8.50 million head, 36,000 head more than October 2012, but 2,000 head less than September 2013.

Milk production in Iowa during October 2013 totaled 378 million  pounds,  up  4  percent  from October  2012, according to the USDA, National Agricultural Statistics Service – Milk Production  report. The  average number of  milk  cows  during  October,  at  206,000  head,  was 3,000 more than last year. Production per cow averaged 1,835 pounds, 40 pounds higher than in October 2012.



NASS Continues to Suspend Certain Statistical Estimates and Reports due to Sequestration

USDA’s National Agricultural Statistics Service will not conduct a number of statistical surveys in Fiscal Year 2014 (October 1, 2013-September 30, 2014).   Because we are starting the new Fiscal Year with the FY2013 sequestration-level funding under a continuing resolution, we are not able to reinstate the programs that were suspended in March 2013.  Before deciding upon the program suspensions, NASS reviewed its survey programs against mission- and user-based criteria as well as the timing of data collection with the goal of finding available cost savings and maintaining the strongest data in service to agriculture.  The decision to suspend these reports was not made lightly, but it was nevertheless necessary, given the funding situation.
-    July Cattle Report
-    Potato Stocks Reports
-    June Rice Stocks Report
-    All Hops and Hops Stocks Estimates
-    Annual Mink Report
-    June on- and off-farm stocks for Austrian Winter Peas, Chickpeas, Dry Peas and Lentils
-    July acreage forecasts for Austrian Winter Peas, Dry Edible Peas and Lentils
-    All Catfish and Trout Reports including Catfish Feed Deliveries and Catfish Processing; however, NASS will publish the annual catfish and trout report using data collected during the census of aquaculture.

NASS will publish the Non-Citrus Fruit and Nut Annual Summary; however, there will be no forecasts, no preliminary summary and no monthly prices in FY2014.

NASS will publish the Vegetable Annual Summary; however, there will be no forecasts or monthly prices in FY2014.



Biodiesel Producers Coming to Washington

Dozens of biodiesel stakeholders from across the country are heading to Capitol Hill Tuesday to support the Renewable Fuel Standard (RFS) and voice strong disappointment with the Obama Administration’s recent proposal for next year’s renewable fuels volumes.

Among those making the trip is Ben Wootton, a biodiesel producer from Pennsylvania, who said his plant is likely to close under the EPA’s volume proposal announced last week.

“If the EPA freezes the biomass-based diesel target, it would put our company out of business,” said Wootton, president and CEO of Keystone BioFuels of Camp Hill, Pa. “Keystone is just starting to come out of a reorganization plan.  The EPA proposed freeze on biomass-based diesel would essentially cut our current market in half and force us to shut our doors. It would be a major step back for the environment and the economy in our state.”

Anne Steckel, vice president of federal affairs at the National Biodiesel Board, said more than 100 biodiesel supporters, representing more than two dozen states from California to Iowa to North Carolina, will be making sure their members of Congress understand that this proposal will eliminate jobs and threaten production in their states.

“Our producers are frustrated and disappointed that the Administration, with no explanation, is essentially freezing a growing Advanced Biofuel industry for the next two years at production levels far below where they are today,” Steckel said. “Biodiesel is an RFS success story, and this proposal turns its back on that success and on the producers who have made it happen.”

Biodiesel production is on track to set a production record of approximately 1.7 billion gallons this year, using an increasingly diverse mix of feedstocks including recycled cooking oil, agricultural oils and animal fats. The EPA’s proposed rule for next year would set biodiesel volumes at 1.28 billion gallons while shrinking the overall Advanced requirement to 2.2 billion gallons. The biodiesel category is a subset of the overall Advanced category.

The draft proposal is particularly damaging because it freezes the biodiesel reduction for two years – 2014 and 2015. Additionally, because excess biodiesel production in 2013 can be carried over for compliance into 2014 the 1.28 billion gallon proposal for 2014 could mean an effective market closer to 1 billion gallons – a dramatic reduction from current levels.



Fertilizer Prices Continue Steady

Retail fertilizer prices continue to sit fairly steady, as has been the case in recent weeks, according to prices tracked by DTN for the second week of November.  All eight of the major fertilizers registered lower prices from last month, but none showed a significant price drop of at least 5%.  DAP had an average price of $516 per ton, MAP $564/ton, potash $490/ton and urea $441/ton. 10-34-0 was at $519/ton, anhydrous $645/ton, UAN28 $321/ton and UAN32 $368/ton

On a price per pound of nitrogen basis, the average urea price was at $0.48/lb.N, anhydrous $0.39/lb.N, UAN28 $0.57/lb.N and UAN32 $0.57/lb.N.

All eight of the major fertilizers are now double digits lower in price compared to a year earlier.  UAN32 is now down 13%; MAP, 10-34-0 and UAN28 are all 16% less expensive; DAP is 19% lower; potash is 21% less expensive; anhydrous is 24% lower; and urea is 26% less expensive compared to last year.



Hogs Provide Near $7/bu Corn Value

According to Purdue University Extension economist Chris Hurt, grain farmers are looking for new corn uses now that ethanol is not big enough. "Low corn prices are encouraging end users to seek ways to add value to corn, which is now below costs for most corn growers. What about hogs? For the 2013-14 corn marketing year, hogs are offering an estimated $6.85 per bushel if the profits from hog production are assigned to the value of corn," Hurt said.

Hurt explained that livestock was historically the way to add value to abundant corn supplies on Midwest farms. During the first-half of the 1800s what is now the eastern Corn Belt became the center of hog production. Cincinnati was nicknamed "Porkopolis" in 1835. By the end of the Civil War in 1865, public monies were being used to open terminal markets farther west with the Chicago Union Stockyards the most famous. The center of the hog industry has continued to move farther west to Missouri, Iowa, Minnesota, and Nebraska in the past 50 years.

"Today most corn growers cannot add hogs to their farm enterprises," Hurt said. "Modern hog production is large-scale, high-tech, high-investment, and highly coordinated. So, the hope for most corn growers is that large hog production corporations will expand rapidly and thereby expand the corn usage base."

"At first glance, it appears to be very large," Hurt said. "During the period that spans the 2013-14 corn marketing year, live hog prices are expected to average about $67 per hundredweight with costs of production closer to $56. That means an expected profit of $32 per head and relates to the $6.85 per bushel for corn marketed through hogs. Unfortunately, it takes time to get into hog production, and gilts retained now will not have market-ready pigs until late 2014 when much of the profit incentive will be eroded. That profit erosion is due to the expected expansion already under way and to somewhat higher corn prices for the 2014-15 marketing year," he said.

According to Hurt, the best news for the hog industry and other animal industries is that feed prices will probably moderate for a series of years, not just this one year. "If so, that means an extended period of lower feed prices and expansion of animal production," Hurt said. "Over the next three to five years, expect a 'mini-boomlet' for animal industries in which three positive demand drivers will occur: higher U.S. per capita consumption; modest domestic population growth; and continued growth of exports," he said.

For hog production in the coming year, Hurt said that this means a 1 to 3 percent expansion of the breeding herd that has already begun. Increased pork production from this expansion will begin by late summer of 2014, and prices will move below year-previous levels at that time. As an example, hog prices in the last quarter of 2014 are expected to be $58 per live hundredweight compared with $65 during the last quarter this year.

Hurt said that the big profits will come during the 2013-14 corn marketing year, reaching $37 per head of profits on average during the second and third quarters of 2014.

Hog prices are expected to average around $65 in late 2013 and the first quarter of 2014. Then record-high hog prices are anticipated in the second quarter with an average near $72, followed by $67 for the third quarter. As pork supplies begin to rise into the fall of 2014, hog prices are expected to drop $9 per live hundredweight to around $58.

"While hog prices are strong, it is really lower feed costs that are providing the strong profitability forecasts," Hurt said. "In the peak of the 2012 drought, hog production costs were near $73 in the third quarter of 2012. Those have dropped to about $56 for the coming year.

"While selling corn at $6.85 per bushel is appealing to cash grain farmers, it is important for them to recognize that the high feed prices resulting from the 2012 drought caused large losses," Hurt continued. "In the current profitable period, it will take until June 2014 to recover the losses that were suffered from drought-induced high feed costs. After many years of often high and very volatile feed prices, the future appears brighter for all of the animal species with feed prices moderating over the coming years. With moderation should also come less volatility. The pork industry is well positioned to take advantage of several years of favorable consumer expansion driven by improving domestic consumption and foreign demand," Hurt said.

Hurt concluded that the hog industry expansion will not be large enough to return corn prices to the previous lofty levels. However, when all animal industries are included, it will be a period of growing feed-use base for corn growers. Thus, it is anticipated that in coming years there will be a better balance between the crop production sector and the animal sector.

"Assuming ethanol use is relatively level in the future, this means that corn farmers have achieved the goal of providing sufficient production for both food and fuel," Hurt said.



MAIZALL Efforts Lift Off During Tour of Asian Markets

The first international MAIZALL mission is underway in Asia this week, bringing representatives of corn farmers from the United States, Argentina and Brazil to South Korea and China for meetings with key industry and government officials. The team, which includes National Corn Growers Association Chairwoman and MAIZALL board member Pam Johnson, will discuss issues important to both parties including biotechnology, current corn production, product regulatory issues and domestic farming practices.

Launched in the spring of 2013, MAIZALL is a voluntary, non-governmental organization representing grower organizations in major exporting countries interested in the international trade in corn. Currently, the group includes the National Corn Growers Association, the U.S. Grains Council, ABRAMHILO and MAIZAR, the national corn producers' organizations of Brazil and Argentina respectively. While all three countries are now, and will remain, vigorous competitors, the three also share common interests in market access, transparent and efficient global trading systems, and increased global acceptance of modern agricultural technology.

"A lot of work has gone into planning and organization and now it is paying off," said Julius Schaaf, USGC chairman and MAIZALL's first president.

"In both Korea and China we will be meeting with the American, Brazilian and Argentine embassy, as well as with each country's top corn importers and end-users, and key government officials. Not only will Korea and China receive America's, Brazil's and Argentina's perspectives but they will also hear a common commitment to food security through trade, and regulatory systems that make that possible for a growing world."

Legally incorporated in Panama, a central location, MAIZALL is designed to elevate the producer perspective from the major corn exporting countries in the ongoing, and sometimes heated, global debate about agricultural technology and trade.



National Farmers Organization Receives USDA Risk Management Agency Education Grant

Risk permeates agriculture, and USDA’s Risk Management Agency granted National Farmers and its Nexus Ag Marketing cattle marketing division $184,000 to host 16 price risk management education seminars for cattle producers in six states during 2014.

“We understand beef producers operate under a variety of pressures in today’s marketplace,” said Perry Garner, National Farmers risk education grant project co-director. National Farmers is developing workshops and an assortment of materials that will help ag producers determine their true costs, write and improve their marketing plans and learn more about usable approaches to managing risks, such as forward contracts, hedges and options. “We’d like to thank the USDA Risk Management Agency for extending the grant to us,” Garner said.

National Farmers Livestock Division staff will conduct the seminars to be held in Wisconsin, Minnesota, Iowa, Ohio, Indiana, Illinois and Michigan. Among partners are Michigan, Wisconsin and Iowa National Farmers Union groups, Western Ohio Dairy, Institute for Rural America, and individuals from Mid State Technical College, Wisconsin Rapids, Wis., Castle Bank and Fidelity Bank in Iowa. Several seminars will be presented at farm trade shows, as well.

The workshops will cover seven educational topics:
-    Understanding price risk management as a financial risk management strategy
-    True cost of production
-    Market risks and market fundamentals
-    Key marketing strategies
-    Contracts and hedging
-    Comparing past marketing plans and results to future plans and results
-    Developing marketing plans

“We fully intend for producers to take what they learn and use it in practical ways in their operations’ marketing. We’ll help them with their understanding and use of price risk management and reliable marketing strategies,” Garner said. USDA’s Risk Management Agency and National Farmers officials advocate producer education about price risk management topics, because of today’s volatile ag marketing environment.

“We hear from producers we represent in the marketplace that they can buy new equipment, build new buildings or expand cattle herds because of the techniques we employ for them,” Garner said.

“We can show more producers how to capitalize on these tools, too. These strategies are within their reach. And they can understand them with some assistance from our people at Nexus Ag Marketing who deal with these price risk management tools every single day,” he added.



Tyson Completes Record Year as Fourth Quarter Earnings Increased 23% to $0.70; Poised for Strong Growth in 2014

Fourth Quarter Highlights
-    Record sales of $8.9 billion, an increase of 7% over last year
-    Operating income increased 18% to $416 million
-    Repurchased 9.9 million shares for $300 million
-    Board declares 50% increase on quarterly dividend from $0.05 to $0.075 on shares of Class A common stock

Fiscal 2013 Highlights
-    Record adjusted EPS from continuing operations increased 15% to $2.26 compared to $1.97 last year
-    Record sales of $34.4 billion, an increase of 4% over last year
-    Operating income increased 7% to $1,375 million
-    Repurchased 21.1 million shares for $550 million
-    Liquidity totaled $2.1 billion at September 28, 2013

"We had a great fourth quarter, and 2013 was the best year in company history in terms of record sales and earnings per share," said Donnie Smith, Tyson's president and chief executive officer. "The company achieved these results while buying back $550 million in stock, paying more than $100 million in dividends, continuing to build out operations in China and growing our prepared foods business through acquisitions and by entering new product categories.

"A year ago we outlined our expectations for growth. We said you should expect top line sales to grow around 3-4% annually. In fiscal 2013, we grew sales by 4%," Smith said. "This time last year, we projected earnings for fiscal 2013 would be roughly flat to the previous two years but would grow at a rate of at least 10% a year in 2014 and beyond. By overcoming many challenges, we grew adjusted earnings from continuing operations by 15% this year. Sales growth from value-added products was almost 6%, against an aggressive goal of 6-8% growth per year. And finally, we set a goal of growing sales from international production by 12-16% a year, and we beat that goal with 20% growth.

"I'm proud of what we've accomplished, and with every success, we raise the bar higher. Although we've been successful, there is still so much potential," Smith said. "We have a great team that is focused and united. As a leader and as a shareholder, I'm excited about the future of Tyson Foods."

Segment Performance Review
-    Chicken - Sales volumes grew due to increased domestic and international production driven by stronger demand for our chicken products. The increase in average sales price in the fourth quarter and 12 months of fiscal 2013 was due to mix changes and price increases associated with higher input costs. Since many of our sales contracts are formula based or shorter-term in nature, we were able to offset rising input costs through improved pricing and mix. Operating income was positively impacted by increased average sales price and volume, improved live performance and operational execution, as well as improved performance in our foreign-produced operations. These increases were partially offset by increased feed costs of approximately $30 million and $470 million for the fourth quarter and 12 months of fiscal 2013, respectively.
-    Beef - For the fourth quarter of fiscal 2013, sales volume rose as we increased production due to sufficient cattle supply and strong demand for our beef products. Sales volume decreased for the 12 months of fiscal 2013 due to less outside trim and tallow purchases. Average sales price increased due to lower domestic availability of fed cattle supplies, which drove up livestock costs. Operating income rose due to improved operational execution, less volatile live cattle markets and improved export markets.
-    Pork - Sales volume decreased as a result of balancing our supply with customer demand and reduced exports. Demand for pork products improved, which drove up average sales price and livestock cost despite a slight increase in live hog supplies. While reduced compared to the prior year, operating income remained strong in the 12 months of fiscal 2013 despite brief periods of imbalance in industry supply and customer demand.
-    Prepared Foods - Sales volume increased as a result of improved demand for our prepared products and incremental volumes from the purchase of two businesses in fiscal 2013. Average sales price rose due to price increases associated with higher input costs. Operating income decreased, despite increases in sales volumes and average sales price, as the result of increased raw materials and additional costs incurred as we invested in our lunchmeat business and growth platforms. Because many of our sales contracts are formula based or shorter-term in nature, we are typically able to offset rising input costs through pricing. However, there is a lag time for price increases to take effect.