Tuesday February 4 Ag News - Farm Bill Passes Senate - Off to President

Johanns Says Farm Bill Provides Certainty for Ag Producers

U.S. Sen. Mike Johanns (R-Neb.) today said the passage of a five-year farm bill will give our nation’s ag producers the risk management tools and certainty they need. The bill passed the House of Representatives last week and today passed in the Senate, with Johanns’ support, by a vote of 68-32.

“Reaching a consensus on this farm bill has been a long time in the making, but we can finally tell our ag producers that they will have the risk management tools they need,” Johanns said. “I would have preferred stronger payment limits and a movement away from target prices, but progress was made on those fronts. Progress was also made to reform and streamline conservation programs, something I backed as Secretary, and to end direct payments that paid farmers no matter what.

“At the end of the day, this constitutes a hard-fought compromise, and while no one got everything they wanted, this bill warrants our support.”

Senator Johanns is on the Senate Agriculture Committee, and served as the Department of Agriculture’s Secretary under President George W. Bush.

Editors Note:  Along with Senator Johanns, Senator Deb Fischer (R) of NE and Senator Tom Harkin (D) of Iowa voted in favor of the Farm Bill.  As was the same with yesterday's cloture vote, Senator Chuck Grassley (R) of Iowa did not vote in favor of the Farm Bill. 



STATEMENT FROM AGRICULTURE DIRECTOR GREG IBACH ON PASSAGE OF THE AGRICULTURAL ACT OF 2014

"Passage of this farm bill provides Nebraska producers with the policy certainty that is critical to being able to make sound business decisions for their operations.  As current conditions show, agricultural markets are cyclical and subject to downs as well as ups, so I am pleased with a commodities title that has a strong insurance component, something our producers wanted.

"The bill also reauthorizes the livestock assistance provisions Nebraska producers asked for as a result of several severe weather situations in recent years.”

"The importance of the farm bill isn't just limited to our commodity crop growers and livestock producers.  The scope of the legislation is broad, including support for natural resources stewardship, international trade, and nutritional programming, among others.  The farm bill touches every Nebraskan's life, to some degree, so passage of the Agricultural Act of 2014 is good news for the entire state."



Nebraska Farm Bureau On U.S. Senate Passage of Farm Bill
President Steve Nelson

“After more than two years of deliberation, we are pleased by today’s action in the Senate to send a new five-year farm bill to the President for final approval. We greatly appreciate the votes of both Sen. Mike Johanns and Sen. Deb Fischer earlier today and for the previous votes in support from Congressman Lee Terry and Adrian Smith in the House.”

“As many in our congressional delegation have said, this is not a “perfect” farm bill. However, this is not a Nebraska only farm bill, but a farm bill for America. As a result there are many interests engaged in these policy discussions and what was passed today is very much a reflection of the diverse interests in the form of Congressional compromise.

“This farm bill does bring certainty to Nebraska farmers and ranchers on the direction of American farm policy and farm programs for the next five years which is important to Nebraska’s farmers and our state’s economy because it is so heavily based in agriculture.”

“We have wanted a farm program that moves away from direct payments to farmers and instead leans toward risk management programs like crop insurance. Farming and ranching is unique in that the success of what we do is so dependent on the one factor we can’t control: Mother Nature. We’ve seen first-hand what the floods of 2011 and the drought of 2012 can do to Nebraska farm and ranch operations - making crop insurance enhancements one of the better parts of this farm bill.”

“We are equally pleased by the bill’s re-authorization and retroactive funding for Livestock Disaster Programs. Like grain farmers, livestock farmers are equally affected by Mother Nature as we saw with the blizzard last fall in Northwest Nebraska where severe cattle losses can wipe out a long-standing family operation in a single swoop. These programs exist for those situations that are catastrophic in nature and well beyond the scope of handling through farm or ranch management decisions.”

“This bill provides enhancements for USDA research programs vital to helping farmers and ranchers make improvements in not only how we raise food but how we manage our land resources and environment. The bill also takes a step forward in trade promotion which is critical to Nebraska farmers and ranchers as more of Nebraska’s farm products are destine for consumers abroad. In 2011 Nebraska ranked fifth in the U.S. for agriculture exports which were worth nearly $7 billion dollars to Nebraska’s economy.”

“As people evaluate this farm bill it is important to understand the programs which touch farmers and rancher directly reflect only 20 percent of total farm bill spending. The remaining 80 percent of farm bill allocations are for food assistance and nutritional programs. That fact is often overlooked. More importantly it would be a mistake to for us to forget that the farm bill is about food security for America which ultimately is a critical part of our national security.”

“We look forward to swift action by the President to finalize this important piece of legislation.”



ISA supports Senate passage of Farm Bill; urges signage and implementation

Iowa Soybean Association President Brian Kemp of Sibley, Iowa issued the following statement regarding Tuesday’s passage of the Agricultural Act of 2014 by the U.S. Senate.

“After years of delay, a bipartisan agreement has been reached on important food and farm policy that will guide decisions by farmers while continuing to provide security for all Americans. We encourage President Obama’s swift signage.

“The new five-year farm bill is not perfect but does address key production, demand and conservation priorities raised by the Iowa Soybean Association (ISA) on behalf of Iowa’s nearly 45,000 soybean farmers. They include:
·         A flexible farm safety net that offers a choice between price-based and revenue-based risk management tools.
·         Maintaining the decoupling of payments from current planted acreage under both programs.
·         Securing critical agricultural research programs including the new Foundation for Food and Agriculture Research.
·         Supports demand for U.S. soybeans courtesy of the Foreign Market Development and Market Access Program (soybeans are the nation’s top farm export with Iowa often ranking first nationally in soybean production).
·         Streamlining greater adoption of conservation programs by soybean farmers who are committed to continuously improving environmental performance. This includes the consolidation of 23 previous conservation programs into 13 while focusing conservation activities on working lands.
·         Supports key energy programs including the Biodiesel Education Program and strengthens the Biobased Markets Program.

“It should also be emphasized that the Farm Bill addresses the nation’s important budgetary issues by cutting nearly $24 billion over 10 years, making agriculture the only industry that has contributed to real deficit reduction.”

The ISA has been actively engaged in the Congressional discussions that have led to today’s action by the U.S. Senate to ensure the needs of soybean farmers are represented in this important legislation. We now look forward to working closely with the American Soybean Association, Iowa soybean farmers and local, state and national officials to ensure its successful implementation.



Farm Bill Passes Senate, on to President

The National Corn Growers Association thanked members of the Senate for their passage today, with a 68-32 vote, of the 2014 farm bill. The bill passed the House on January 29 and now goes to President Obama for signing.

“We’re happy to see the farm bill pass the Senate and are looking forward to seeing it signed and implemented,” said NCGA President Martin Barbre. “It was a long time coming for a bill so important for promoting stability in farm policy while saving taxpayers money and feeding the hungry. While it’s not perfect, we’re pleased to see the bill contains many provisions we’ve been working hard for over the years.”

Barbre in particular pointed out that the new legislation provides the farmers the option to participate in either the revenue-based Agriculture Risk Coverage program (with county or farm-level options) or a Price Loss Coverage program with fixed reference prices.  The ARC will provide a band of coverage for 76 to 86 percent of the benchmark revenue.

Among other specific provisions, the bill:
•    Eliminates controversial direct payments while maintaining decoupled farm support programs that will minimize the possibility of planting and production distortions that could trigger new World Trade Organization challenges.
•    Consolidates 23 previous conservation programs into 13, and focuses conservation efforts on working lands.  It also ties conservation compliance for wetlands and highly erodible land to premium support for crop insurance.
•    Maintains authorizations for important agricultural research programs, including AFRI, as well as including a new Foundation for Food and Agriculture Research that will provide a structure and mandatory funding for new public/private partnerships and investments that will further USDA’s research mission.
•    Maintains authorizations and funding levels for export promotion, including the Foreign Market Development (FMD) Program and the Market Access Program (MAP).
•    Continues the combined authorization of both agricultural and nutrition programs, a linkage that has been essential in enacting every farm bill since 1974.



Following Senate Passage, ASA Calls on President Obama to Sign Farm Bill into Law

Following the Senate’s vote to pass the Agricultural Act of 2014 this afternoon, the American Soybean Association (ASA) thanked both chambers of Congress and called on President Barack Obama to quickly sign the bill into law.

“We are relieved and pleased to see the farm bill cross the finish line this afternoon,” said ASA President and Iowa farmer Ray Gaesser. “Today’s vote is the culmination of years of advocacy by ASA and other farm groups on behalf of policies that help our individual crops and our collective industry move forward. We’ve invested a great deal of time and energy in this bill, and the final product represents a true compromise that will benefit many crops, regions and aspects of American agriculture.”

The bill includes a choice between a revenue program that covers both price and yield losses with county and farm level options, and a price support program which allows the optional purchase of insurance coverage under a Supplemental Coverage Option (SCO). The bill also eliminates Direct Payments while maintaining decoupled farm support programs that will minimize the possibility of planting and production distortions that could trigger new challenges from the World Trade Organization.

“From day one, soybean farmers have been invested in passing a bill that provides comprehensive risk management while avoiding potential market distortions,” added Gaesser. “We are confident that this bill accomplishes that, and we are very thankful to Chairwoman Stabenow, Chairman Lucas and Ranking Members Cochran and Peterson for their relentless persistence in driving this process forward and bringing the bill to the best possible conclusion.”

In addition to the risk management framework, the bill also secures several other ASA priorities: agricultural research programs, including the Agriculture and Food Research Initiative (AFRI) and the new Foundation for Food and Agriculture Research (FFAR); export promotion done under the Foreign Market Development (FMD) and Market Access Program (MAP) on which soybeans depend as the nation’s top farm export; and key energy programs, including the Biodiesel Education Program and a strengthened Biobased Markets Program. Additionally, the bill consolidates 23 previous conservation programs into 13, while focusing conservation efforts on working lands.

“Last week’s vote in the House and today’s vote in the Senate—both accomplished in overwhelmingly bipartisan fashion—show that this bill is important not only to farmers and rural Americans, but also to our urban and suburban neighbors and business leaders in communities nationwide,” said Gaesser. “We are grateful for the perseverance of the agriculture leadership in Congress, and we call on President Obama to sign the bill into law without delay.”



Farm Bill Passes Senate, Awaits President's Signature
The National Association of Wheat Growers (NAWG) is joining in the excitement of the passage of the Farm Bill conference report. After a three-year long process, the Senate passed the bill with a final vote of 68-32 Tuesday. The House passed the farm bill report last week and the bill now awaits the President’s signature.

A statement from NAWG President Bing Von Bergen, a wheat farmer and seedsman from Moccasin, Mont.:

“On behalf of U.S. wheat growers, I thank our agriculture leaders in the House and Senate for their diligence in getting this bill passed. I offer special thanks as well to the support from our wheat states for continuously reaching out to leadership in Congress urging support of a long-term and comprehensive farm bill.”

“This bill strengthens crop insurance and allows growers the necessary safety net to keep a secure, affordable and healthy food supply. In addition, this bill provides funding for important programs in conservation, research and trade that help keep America’s wheat industry productive and competitive on a global scale.”



NMPF Statement on Passage of Farm Bill by House and Senate
Jim Mulhern, President and Chief Executive Officer, National Milk Producers Federation

“It has been a long and torturous road toward the creation of a better safety net for dairy farmers, but with today’s vote in the Senate to approve the farm bill, coupled with last week’s House vote, that five-year journey has reached its end.

“We didn’t wind up precisely where we wanted in terms of the dairy program, but the milk glass is more than half-full. The new farm bill replaces three outmoded programs intended to help farmers – but that often failed in that effort. In their place is a new, more modern, and more comprehensive margin protection program offering dairy producers a far better and more effective safety net. Because it is designed to protect against periods of both low milk prices as well as high feed costs, margin insurance is a better risk management tool to help farmers deal with the global volatility in commodity prices in the 21st century.

“On behalf of our dairy farmer members, I want to thank the farm bill conference committee principals – Sens. Debbie Stabenow and Thad Cochran, and Reps. Frank Lucas and Collin Peterson – as well as Sen. Patrick Leahy, for all of their enormous efforts, and those of their staffs, to fashion this new dairy policy.

“I also want to express my appreciation to all of the farmers, cooperatives, and farm organizations that have helped throughout this long process. The members of NMPF have worked tirelessly since 2009 to build a new and better dairy program. The farm bill’s margin protection program is a tribute to their dedication and commitment.”



National Grange very pleased with final Farm Bill passage

After the Senate passed the Agriculture Act of 2014, also known as the Farm Bill, today, National Grange Legislative Director Grace Boatright said the 146-year-old agriculture advocacy organization representing more than 160,000 members across the country was very pleased that the bill has finally passed both chambers of Congress.

The bill, Boatright said, will provide much-needed relief to American agriculture and the many farmers, ranchers, businesses and consumers who depend on it.

National Grange President Ed Luttrell said the slow process has resulted in an imperfect but acceptable new Farm Bill.

“It may be two years passed due, but we’re thrilled to finally see a real Farm Bill passed into law today. America’s farmers and ranchers have had to operate their businesses on guesses and assumptions for the last two years but today, they’re finally getting the stability and predictability that only a strong Farm Bill can provide. It’s not a perfect bill by any means but I’ll take it,” Luttrell said. “On behalf of the National Grange, I’d like to thank everyone on the House and Senate Agriculture Committees for their work on this,”

The House passed the bill January 27, and President Obama is expected to sign it into law immediately. The nearly $1 trillion bill will fund agricultural and various other programs operated by the USDA through fiscal year 2018.

The 949-page Farm Bill saves nearly $17 billion over a 10-year period, a third of which comes from the Nutrition Title that funds the Supplemental Nutrition Assistance Program (SNAP). Other changes made by the conference committee are the elimination of the direct payment system and elimination of the Dairy Market Stabilization Program.

The Farm Bill package passed the House by a vote of 251-166 and then passed the Senate by a vote of 68-32.

Provisions of the 2008 Farm Bill expired in 2012, receiving a year long extension of U.S. agriculture policy that expired in December of 2013. Since that time, legislators have been working hard to pass a final, comprehensive, five-year Farm Bill.

“The Farm Bill conference committee had a tough job to do here but they’ve finally come through. It’s two years overdue but better late than never - especially when we’ve been operating with no real agriculture policy for the last month. However, now America’s growers and producers can move forward with more confidence and that’s a wonderful thing for everyone,” Boatright said.



Statement by Secretary Vilsack on Passage of the Agricultural Act of 2014

Secretary Vilsack made the following statement on passage of the Agricultural Act of 2014:

"Today's action will allow the proud men and women who feed millions around the world to invest confidently in the future. Our communities will have additional support to attract new economic opportunity and create jobs. During difficult times, children, working families, seniors and people with disabilities will have access to nutritious food. The potential of new products, treatments and discoveries will be strengthened through new agricultural research. Renewed conservation efforts will protect our fields, forests and waters creating new tourism options. This legislation is important to the entire nation.

Building on the historic economic gains in rural America over the past 5 years, this bill will accomplish those goals while achieving meaningful reform and billions of dollars in savings for the taxpayer. While no legislation is perfect, this bill is a strong investment in American agriculture and supports the continued global leadership of our farmers and ranchers."

Statement by President Obama
Today, in a strong bipartisan vote, the U.S. Senate came together to pass a comprehensive Farm Bill – legislation that will build on the historic economic gains in rural America over the past five years, create new jobs and opportunities, and protect the most vulnerable Americans.  This bill provides certainty to America’s farmers and ranchers, and contains a variety of commonsense reforms that my Administration has consistently called for, including reforming and eliminating direct farm subsidies and providing assistance for farmers when they need it most.  It will continue reducing our deficits without gutting the vital assistance programs millions of hardworking Americans count on to help put food on the table for their families.  And it will support conservation of valuable lands, spur the development of renewable energy, and incentivize healthier nutrition for all Americans.   As with any compromise, the Farm Bill isn’t perfect – but on the whole, it will make a positive difference not only for the rural economies that grow America’s food, but for our nation.

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NE NRCS PARTNERS WITH BUFFETT FOUNDATION TO PROMOTE SOIL HEALTH

Farmers, ranchers, researchers, agricultural business operators and conservationists are invited to participate in forums about cover crops and soil health from 8:45 a.m. until 12:15 p.m. Tuesday, Feb. 18, at nine different locations in Nebraska.

The USDA’s Natural Resources Conservation Service (NRCS) is partnering with University of Nebraska Extension to sponsor the nine Nebraska forums. The forums will be conducted simultaneously along with more than 200 other forums throughout the country. They will be in concert with the National Conference on Cover Crops and Soil Health in Omaha, Nebraska, sponsored by the Howard G. Buffett Foundation.

In addition to providing a venue to discuss local cover crop and soil health opportunities, benefits and barriers, the forums will feature live-streaming video of the national conference’s opening session featuring presentations by Howard G. Buffett, NRCS Chief Jason Weller, Ray Gaesser, Iowa farmer and president of the American Soybean Association, and a panel of farmers applying soil health and cover crop practices on their operations.

“By taking advantage of communications technology, local participants will be able to view discussions about the soil-health movement nationally,” says Nebraska State Conservationist Craig Derickson. “Then local farmers and ranchers can discuss the benefits of healthier soil and how to improve soil health on their land.”

Derickson says forum participants will also have the opportunity to provide ideas and recommendations that will be forwarded to national researchers and policy makers.

The nine Nebraska forum locations are Sidney, North Platte, Alma, Grand Island, Norfolk, O’Neill, Lincoln, Wilber and Syracuse.

This event is free and open to the public, but because seating is limited, reservations are required. To participate, contact Colleen James at (402) 437-4039 or colleen.james@ne.usda.gov to preregister. For more information about the Cover Crops and Soil Health Forum, visit http://www.sare.org/Events/Forum-on-Cover-Crops-and-Soil-Health .



Iowa Weather Summary for January 2014

January saw temperatures mostly below normal.   Average precipitation for  the  month  was  also  below  normal.    With  the  small  amount  of precipitation  in  the  month,  there  were  rising  concerns  about  drought conditions when spring comes.  Soil erosion was a concern with strong winds throughout the month.

As January came to a close, moisture levels rated 18 percent very short, 39 percent short, 43 percent adequate, and 0 percent surplus.  Southwest Iowa  was  the  driest  in  the  state  with  37  percent  very  short.    The northeast  reported  the  most  moisture  with  87  percent  in  adequate  to surplus.

January  had  a  number  of  very  cold  days  that  caused  interruptions  to grain  transportation  in  some  areas. Grain movement  rated  40  percent none, 35 percent light, 21 percent moderate, and 4 percent heavy.  

Availability  of  hay  and  roughage  supplies  was  15  percent  short, 80 percent adequate, and 5 percent surplus with 48 percent of the supply in good condition.  Livestock conditions have been reported as normal.  Hog and pig losses in January were 9 percent light, 80 percent average, and 11 percent heavy.   Some pork producers had heavy  losses due  to Porcine Epidemic Diarrhea Virus (PEDV).   Cattle and calf  losses were 15 percent light, 81 percent average, and 4 percent heavy.



IOWA PRELIMINARY WEATHER SUMMARY
Harry Hillaker, State Climatologist Iowa Department of Agriculture & Land Stewardship

General Summary.  Temperatures averaged 13.9 degrees or 5.5 degrees below normal while precipitation totaled 0.43 inches or 0.49 inches less than  normal.     This  ranks  as  the  35th  coldest  and  19th driest  January among  142  years  of  records.      A  colder  calendar  month  was  last recorded in January 2010 and a drier one in November 2007.

Temperatures.   A very persistent weather pattern prevailed through the month  bringing  the  coldest  air  frequently  to  northeastern  Iowa where temperatures  averaged  6  to  10  degrees  below  normal.      Meanwhile occasional  brief  periods  of  strong  southwesterly winds  allowed  quick warm-ups  across  the  far west where  temperatures  averaged  only  2  to 4 degrees below normal.   The statewide average daily temperature was twenty or more degrees below normal on  the 2nd, 5th, 6th, 23rd, 27th and  28th.    Each  of  these  cold  episodes  was  accompanied  by  strong winds,  resulting  in wind chills  falling  to  -34 degrees or  lower.     Wind chills bottomed out at  -51 degrees on  the morning of  the 6th at Mason City and Oelwein.   These were the lowest wind chills recorded in Iowa since January 2, 2010, when Estherville recorded a -53 degrees reading.   Actual  temperatures  fell  as  low  as  -29  degrees  at  Elkader  on  the morning of  the 28th.       On  the other extreme,  temperatures climbed  to daily record highs of 65 degrees at Little Sioux, Logan and Sioux City on  the  19th.        However,  persistent  snow  cover  over  the  northeast counties did not  allow  temperatures  to climb above 38 degrees during the month at Dubuque and Oelwein.

Heating Degree Days.   Home  heating  requirements,  as  estimated  by heating degree day totals, averaged 19 percent greater than last January and  13 percent  greater  than  normal.      Degree  day  totals  so  far  this heating season (since July 1) have averaged 15 percent greater than one year ago and 9 percent greater than normal.    This has been the coldest start to the heating season in 17 years.

Precipitation.    Precipitation  was  rather  frequent  during  January, especially over northeast Iowa, but amounts were nearly always on  the light side.   Burlington reported the largest storm total with 5.0 inches of snow on  the 4th-5th.       Monthly snow  totals varied  from 1.0  inches at Glenwood  (all  of  which  fell  on  New  Year’s  Day)  to  18.1  inches  at Elkader.      There  was  little  if  any  snow  cover  over  much  of  the southwest one-half of  the state during January while  the northeast one-quarter of the state has endured continuous snow cover since December 8, with a snow depth of 10 to 20 inches being common at month’s end.

Severe Weather.   Despite the lack of heavy snow, high winds combined with  relatively  light  snowfall  to  produce  blizzard  conditions  over portions of central Iowa on the 16th and over northeast and east central areas on the 26th.   Prolonged cold weather, combined with little, if any, snow  cover  has  allowed  soils  under  sod  to  freeze  to  depths  of  20  to 27 inches  across  the  state  by  month’s  end  according  to  National Weather Service measurements.      Iowa DOT sensors show  the ground under pavement to be frozen from three to four and one-half feet below the  surface.      The  deep  frost  has  resulted  in  hundreds  of water main breaks  across  the  state.     Unfortunately,  the  frost depth  typically goes even  deeper  during  February.      Meanwhile  the  prolonged  cold  has resulted  in a record spike  in propane prices owing  to a combination of high  demand  and  low  supply.      Finally,  January  has  been  an exceptionally  windy  month.      At  Des  Moines  wind  gusts  exceeded 40 mph on eight days during  the month.     The average wind speed for the month was  13.5 mph.     Owing  to  changes  in wind measurement equipment and procedures over  the years  it  is difficult  to make ‘apples to apples’ historical comparisons but at Des Moines this was the highest calendar month wind speed average since March 1986.



Corn Rootworm Management Webinar Feb. 20

Growers can learn about current corn rootworm management options through a free webinar scheduled for Feb. 20. The webinar is co-organized by SDSU Extension and research and Extension faculty from surrounding states.

The program will begin at 1 p.m. CDT and conclude at 2:30 p.m. For those interested, SDSU Extension is providing two ways of viewing the webinar: in person, at the SDSU Extension Regional Center in Sioux Falls (2001 E. 8th St, Sioux Falls, 605.782.3290), or online.

A link to join the webinar online will be available a week before the webinar under Events tab on iGrow, search for Corn Rootworm Webinar.

SDSU Extension invites growers to join us at 12:30 p.m. for refreshments at the SDSU Extension Regional Center in Sioux Falls. A Q&A session will follow the webinar at the Regional Center. This program is supported by a USDA-NIFA North Central IPM program grant.

Topics to be covered include:
-- Rootworm biology and behavior, presented by Joe Spencer, Illinois Natural History Survey
-- Resistance evolution and IRM for rootworm, presented by Aaron Gassmann, Iowa State University
-- Adult management options, presented by Lance Meinke, University of Nebraska-Lincoln
-- Larval management options, presented by Bob Wright, University of Nebraska-Lincoln
-- Decision tree for grower management options, presented by Ken Ostlie, University of Minnesota.

To learn more, contact Ada Szczepaniec, SDSU Extension Entomology Specialist at 605.688.6854.



Cattle Industry Beginning Transition to Expansion

Recent record-high cattle prices and much lower feed prices have just begun to provide the profit incentives that will be necessary to move the beef cattle industry toward expansion after a continual decline in numbers since 2007. Purdue University Extension economist Chris Hurt said that while those incentives have turned positive, they have not been in place long enough for the industry to begin registering signs of expansion, according to USDA inventory numbers. The rebuilding of the beef herd is expected to take multiple years.

"The cattle herd in the United States has been in a long-term decline with total numbers at the start of this year reaching their lowest level since 1951," Hurt said. "The number of beef cows stood at the lowest level since 1962, according to USDA. The most recent phase of the decline began in 2007 as a result of two basic drivers. First, sharply higher feed costs forced cattle feeding into large losses that depressed calf prices and, secondly, drought conditions in major beef cow production areas caused herd reductions."

Beef cow numbers fell by 253,000, or 1 percent, in 2013 with most regions of the country reporting fewer cows. The biggest decline in numbers was in the Southeastern United States with a reduction of 118,000 cows; followed by the Pacific Northwest at 88,000; the Northern Plains at 62,000; and the Southern Plains at 57,000 head.

The continual decline in beef cow numbers since 2007 now means the 2014 calf crop will be very small, about 33.7 million head, a 10 percent reduction since 2007.

"The negative profit incentives and drought since 2007 have discouraged the cattle industry," Hurt said. "However, the financial incentives have recently shifted back to strong profitability. The two factors driving the strong profit incentives are the small number of fed cattle and calves, which keep beef supplies extremely low, and much lower feed costs starting last fall with normal U.S. yields of corn, soybeans, and forages. These factors have resulted in record-high prices for fed cattle and calves this winter."

Hurt explained that while the profit incentive has shifted back to strong profits, there has been too little time for the industry to show much response. "The recent USDA cattle inventory update suggests the industry has barely begun the expansion process, if at all," Hurt said. "Beef heifers being retained for beef cow replacements were up nearly 2 percent, but this may be too small to increase beef cow numbers during 2014," he said.

The total number of heifers being retained for breeding was only 90,000, which represents less than 1 percent of beef cow numbers and is the smallest number of retained heifers in the past three years. The question of whether the beef cow herd will grow or continue to decline in 2014 will also depend heavily on the rate of cow slaughter.

"Some cow/calf operations will see 2014 as the golden opportunity to get out with record-high cow prices," Hurt said. "But the greater tendency will be for producers to hold onto the cows for the profitable opportunities that are expected over the next three or more years.

Regardless, Hurt said that any increase in beef cow numbers is expected to remain modest in 2014 for at least three reasons: 1) The costs to retain heifers is very high; 2) Cow/calf producers had a long period of narrow margins and want a longer period of strong margins to build their confidence to take on the market uncertainties; 3) and drought/dryness still covers substantial areas of brood cow-production areas.

"The price outlook is extremely favorable for 2014 to 2016 for the beef industry," Hurt said. "Beef supplies this year are expected to be down 5 percent. Domestic demand is expected to remain positive with some continued income growth in the United States, but USDA anticipates that beef exports will be down 8 percent with the very high U.S. beef prices. There also will be greater competition from 2 percent more pork and turkey and 3 percent more chicken. However, the low beef supplies will dominate these drivers and likely push cattle prices to another record-high year," he said.

Finished cattle prices are expected to average about $133 per live hundredweight in 2014, exceeding the previous record high near $126 in 2013. The extremely high prices in January 2014, around $143, are expected to moderate to an average of about $140 in February and March. Then prices may move down seasonally to a second-quarter average in the mid-$130s before reaching the lows of the year in the third quarter close to an average in the very high $120s. The final quarter of 2014 is expected to have prices in the low-$130s. Strong prices are expected to continue into 2015.

"Calf prices also have seen recent record highs," Hurt said. "Oklahoma City 500- to 550-pound steer calves averaged about $209 per live hundredweight in January with 600- to 650-pound steer calves at $184. Continued moderate feed prices and strong fed-cattle prices are expected to keep calf prices very strong in 2014, but lower than the extreme January prices due to lower fed-cattle prices," he said.

Hurt concluded by commenting on the drought in California. "The state's beef cow inventory is only 2 percent of the nation's beef cows and 4 percent of the cattle on feed. However, California is the largest dairy state with 19 percent of the nation's milk-cow inventory. Continued drought in California and surrounding states could become an important story to the cattle and beef industry in 2014," he said.



2014 Cattle Industry Convention Kicks Off in Nashville

More than 6,200 cattlemen and women from across the country are registered to attend the 2014 Cattle Industry Convention and National Cattlemen’s Beef Association Trade Show, which kicked off today at the Gaylord Opryland Resort. The convention, which will run through Feb. 7, is the largest annual gathering of the beef industry.

NCBA President Scott George said Nashville is always one of the best-attended locations and this convention will be no exception.

“Nashville is a legendary city known for its rural roots and country music scene and this week America’s cattlemen and women are taking the city by storm. We’re here to highlight some of the successes of the past year while also setting goals and priorities for what lies ahead,” George said. “From today’s Cattlemen’s College sessions to the many other educational events that will take place over the next three days, cattlemen and women will have the opportunity to hear directly from the experts about how to sustain and improve their operations.”

This year the Trade Show will not only be larger, but will feature more educational and entertainment opportunities for attendees. On the Trade Show floor will be two education areas, including a demonstration area with live animals to provide hands-on instruction. New this year is the NCBA Learning Lounge, which will feature 30-minute educational sessions to provide attendees valuable educational tips from industry experts in informal, face-to-face, technology-friendly classroom settings.

Following Cattlemen’s College, exciting keynote speeches at the general sessions, and a record-breaking Trade Show, convention goers will have the opportunity to attend committee meetings and take part in the grassroots policy development.

“The grassroots policy process is the backbone and the strength of NCBA. It’s important our producers voice is heard and this week cattlemen will come together to discuss policy priorities that will lay the groundwork for the next year,” said George. “From cattle health and the environment, to marketing and tax policy issues, there will be many critical issues addressed this week.”

With so many events taking place during the convention all attendees are encouraged to download the 2014 Cattle Industry Convention app to their smart phones to see the schedule of events, locations, maps and receive alerts before, during and after the event. Visit www.beefusa.org for more information about the convention, and follow NCBA on Facebook and Twitter.



Inspector General Corrects Beef Checkoff Audit Pursuant to R-CALF USA's Complaint

In a corrected report issued today, the U.S. Department of Agriculture (USDA) Office of Inspector General (OIG) has withdrawn its 2013 conclusions that the National Cattlemen's Beef Association (NCBA) had properly expended all Beef Checkoff Program funds and that the relationship between the Beef Checkoff Program's Cattlemen's Beef Board (CBB) and the NCBA complied with U.S. law.

This and other substantive corrections were made by the OIG to its March 29, 2013 audit report (original report) that reviewed whether USDA was properly ensuring that Beef Checkoff Program funds were being properly collected, distributed and expended.

Last April, R-CALF USA filed a complaint with the OIG calling the original report a "colossal whitewash of monumental proportions," and alleging that the report defied "any semblance of logic, impartiality and credibility."

In response to R-CALF USA's complaint, the OIG withdrew the original report from the public domain and initiated an investigation into R-CALF USA's allegations under the Data Quality Act and Implementing Guidelines. 

In its investigative report addressed to R-CALF USA, the OIG states that the audit team for the original report did not perform all necessary procedures and, therefore, the OIG "could not determine that all funds were collected, distributed, and expended in accordance with the Act and Order . . . "

The investigative report further states: "With respect to R-CALF's objection to OIG's determination that funds were expended in accordance with the Act and Order, the revised report concludes that AMS' (USDA's) oversight as an internal control function needs improvement. In our view, this resulted in agency officials having reduced assurance that beef checkoff funds were collected, distributed, and expended in accordance with the Act and Order."

"This is a huge revelation," said R-CALF USA CEO Bill Bullard adding, "No longer does the audit report vindicate the actions by either the USDA or the NCBA, particularly the actions by the NCBA of submitting improper expenses to the Beef Checkoff Program for reimbursement and the action by USDA of requiring NCBA to reimburse $216,944 as the agency's only punishment meted out for the NCBA's egregious misuse of producers' funds."

The investigative report also clarifies that the OIG audit was very narrow in scope as it was an audit of USDA's oversight of the CBB, not an audit or investigation of the CBB's operations. It also was performed so as not to duplicate the work performed by other reviewers, such as the independent public accountant that disclosed NCBA's misappropriation of the $216, 944 in 2010.

Bullard said that another important disclosure in the investigative report is the fact that the OIG does not have the authority to grant R-CALF USA's request to permanently suspend the NCBA's eligibility to contract with the Beef Checkoff Program. The OIG states that is a management function that OIG is precluded from performing.

"Now that the OIG's audit report has been corrected to remove the many errors contained in the original report, we intend to go back to the U.S. Agriculture Secretary to renew our request that he begin performing his managerial function of protecting U.S. producers' beef checkoff funds from the NCBA that not only has abused the Beef Checkoff Program, but that is also fighting against the interests of a majority of U.S. cattle producers by trying to eliminate the widely popular country of origin labeling (COOL) law both in Congress and in U.S. courts.

"It is unconscionable that our U.S. Secretary of Agriculture refuses to put a stop to this corruption," concluded Bullard.



Informa Boosts Brazil Soybean Forecast

Private analytical firm Informa Economics trimmed its South American corn production estimates on Tuesday, while increasing its expectation for Brazilian soybeans and lowering the bean forecast in Argentina.

On soybeans, Informa more closely aligned its production estimates with Brazilian forecasting agencies. Informa now believes Brazil will produce 89.7 mmt, which is 1 mmt higher than last month's projection and just shy of Brazilian consultancy Agroconsult's 90 mmt estimate. In January, USDA pegged the Brazilian crop at 89 mmt.

Brazil is projected to produce 66.5 million metric tons of corn, 1 mmt less than Informa's previous forecast. Informa cut the main-crop harvest to 31.4 mmt, a 200,000-metric-ton decrease, while cutting second-crop production to 35.2 mmt, down 800,000 mt. In January, USDA estimated Brazilian corn production at 70 mmt.

Argentina's soybean crop was also trimmed, but Informa noted that recent rains were quite timely as much of the crop is entering the pod-setting stage. Informa now sees the country producing 57 mmt, down 500,000 mt from last month. USDA's latest forecast put Argentina's production at 54.5 mmt.

Argentina's corn harvest, at 22.6 million metric tons, is down 2.4 mmt from Informa's previous forecast. USDA forecast Argentina's production at 25 mmt last January. A late-January survey showed that January's erratic rain pattern and warm temperatures lowered yield potential. Much of the crop was planted four weeks late, and while just over half of the crop is in silking stage, only 30% has started to fill.



Urea, UAN28 Prices Higher

Urea and UAN28 retail prices continued to climb higher while prices for other fertilizers were fairly steady the fourth week of January 2014, according to fertilizer retailers surveyed by DTN. Prices of selected fertilizers have shifted higher in recent weeks, retailers report.

Leading the way to the higher side was urea. The nitrogen fertilizer was 10% higher compared to the fourth week of December and now has an average price of $495 per ton.  The other fertilizer with a notable price change was UAN28. This fertilizer was 5% more expensive from last month. Its average price now is at $332 per ton.  Three other fertilizers were higher compared to a month earlier, but these moves were insignificant. DAP had average price of $516 per ton, MAP $542/ton and UAN32 $379/ton.

The three remaining fertilizers had lower prices from the previous month, but again these moves were fairly small. Potash had an average price of $471/ton, 10-34-0 $498/ton and anhydrous $617/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.54/lb.N, anhydrous $0.38/lb.N, UAN28 $0.59/lb.N and UAN32 $0.59/lb.N.

All eight of the major fertilizers are now double digits lower in price compared to January 2013.  Both UAN28 and UAN32 are now down 12% while urea is 13% less expensive. DAP and 10-34-0 are both 18% lower, MAP is 19% less expensive 23% lower, potash is 12% less and anhydrous is 29% lower than a year earlier.



ADM 4Q Earnings Down

Archer Daniels Midland Co. said its fourth-quarter earnings fell 27% on charges related to its blocked GrainCorp deal and other items, while the U.S. grain trader and processor's revenue also declined.

Huge corn and soybean harvests last year in the U.S. eased supply constraints caused by the historic U.S. drought of 2012. Exports in the U.S. and Brazil improved in the fourth quarter, boding well for ADM's grain trading businesses.

However, the company faces challenges ahead as the U.S. government mulls a reduced ethanol blending mandate that could hit ADM's ethanol business. ADM also is considering its next steps as its aims to expand its profile in Asia after the Australian government blocked ADM's deal for GrainCorp in November.

"Lower corn costs and improved ethanol margins helped support a significant improvement in our corn business. Our great oilseeds performance was driven by our ability to meet robust global demand for meal and by improved biodiesel results in North America and Europe," Chairman and Chief Executive Patricia Woertz said. "However, our [agricultural] services business was impacted by the slow farmer-selling of corn and challenges in international merchandising."

Archer Daniels Midland reported a profit of $374 million, or 56 cents a share, down from $510 million, or 77 cents a share, a year earlier. Excluding items such as charges related to GrainCorp, adjusted earnings rose to 95 cents from 60 cents. Revenue decreased 3.1% to $24.14 billion.



CWT Assists with 4.6 Million Pounds of Cheese, Butter and Whole Milk Powder Export Sales

Cooperatives Working Together (CWT) has accepted 25 requests for export assistance from Bongards Creameries, Dairy Farmers of America, Foremost Farms USA, Michigan Milk Producers Association, Tillamook County Creamery Association and United Dairymen of Arizona to sell 3.889 million pounds (1,764 metric tons) of Cheddar, Gouda and Monterey Jack cheese, 209,439 pounds (95 metric tons) of butter and 518,086 pounds (235 metric tons) of whole milk powder to customers in Africa, Asia, Central America and the Middle East. The product will be delivered in January through June 2014.

Year-to-date, CWT has assisted member cooperatives in selling 12.383 million pounds of cheese, 3.751 million pounds of butter and 518,086 pounds of whole milk powder to 17 countries on four continents. These sales are the equivalent of 198.8 million pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program positively impacts producer milk prices in the short-term by helping to maintain inventories of cheese and butter at desirable levels. In the long-term, CWT’s Export Assistance program helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the farm milk that produces them.



Dairy Products December 2013 Production Highlights

Total cheese output (excluding cottage cheese) was 973 million pounds, 2.3 percent above December 2012 and 4.9 percent above November 2013.  Italian type cheese production totaled 433 million pounds, 5.6 percent above December 2012 and 8.1 percent above November 2013.  American type cheese production totaled 376 million pounds, 2.2 percent below December 2012 but 6.6 percent above November 2013.  Butter production was 161 million pounds, 6.9 percent below December 2012 but 12.9 percent above November 2013.

Dry milk powders (comparisons with December 2012)
Nonfat dry milk, human - 125 million pounds, down 20.8 percent.
Skim milk powders - 58.1 million pounds, up 52.4 percent.

Whey products (comparisons with December 2012)
Dry whey, total - 82.1 million pounds, down 8.0 percent.
Lactose, human and animal - 92.3 million pounds, up 5.0 percent.
Whey protein concentrate, total - 43.2 million pounds, up 12.4 percent.

Frozen products (comparisons with December 2012)
Ice cream, regular (hard) - 43.1 million gallons, down 11.0 percent.
Ice cream, lowfat (total) - 21.7 million gallons, down 14.3 percent.
Sherbet (hard) - 2.19 million gallons, down 23.8 percent.
Frozen yogurt (total) - 4.40 million gallons, down 2.7 percent.



Ukraine Lowers 2014 Harvest Forecast

Ukraine is likely to harvest 62.1 million metric tons of grain this year, 1.4% less than in 2013, the agriculture ministry said Tuesday, stressing that it was a preliminary estimate and much would depend on how the winter crops survived the recent frosts and lack of snow, as well as on the success of the spring grain planting campaign.

The wheat harvest this year was likely to fall by 1% on the year to 21.2 million tons, the ministry said. The corn harvest is also seen going down by 2.2% to 30.2 million tons, while the barley harvest is seen increasing by 10% to 8.3 million tons.

The sunflower harvest this year was likely to fall by 15.4% on the year to 9.3 million tons and soy beans harvest was likely to increase by 6.7% to 2.9 million tons, the ministry added. Rape seeds harvest is seen falling by 12.9% to 2.1 million tons. The sugar beet harvest is forecast at 13.4 million tons, an increase of 24.6% on the year.