Friday May 9 Ag News

NEBRASKA'S WHEAT CROP EXPECTED TO BE +40% FROM LAST YEAR
Based on May 1 conditions, Nebraska's 2014 winter wheat crop is forecast at 55.4 million bushels, up 40 percent from last year’s crop, according to the USDA’s National Agricultural  Statistics  Service.   Average  yield  is  forecast  at  39  bushels  per  acre,  up 4 bushels from a year earlier.

Acreage  to be harvested  for grain  is estimated at 1.42 million acres, up 26 percent  from a year ago.  This would be 95 percent of the planted acres, well above last year’s 77 percent harvested.

May 1 hay stocks of 1.15 million tons are near double that of last year, up 89 percent from 2013.

IOWA HAY STOCKS REPORT
All  hay  stored  on  Iowa  farms  on  May  1,  2014 totaled 410,000 tons, up 41 percent from May 2013, according  to  the  USDA  National  Agricultural Statistics Service Crop Production  report.   The last  two  years  have  been  among  the  ten  lowest  on record.    Disappearance  from  December  1,  2013  - May  1,  2014  totaled  2.34 million  tons,  compared with  1.55 million  tons  for  the  same  period  a  year earlier.

U.S. Winter Wheat Production Down 9 Percent from 2013
Winter wheat production is forecast at 1.40 billion bushels, down 9 percent from 2013. As of May 1, the United States yield is forecast at 43.1 bushels per acre, down 4.3 bushels from last year.  Hard Red Winter production, at 746 million bushels, is up slightly from a year ago. Soft Red Winter, at 447 million bushels, is down 21 percent from 2013. White Winter, at 209 million bushels, is down 7 percent from a year ago. Of the White Winter production, 10.9 million bushels are Hard White and 198 million bushels are Soft White.



Heineman Proclaims May as Beef Month and Highlights Best Burger Winner

Today, Gov. Dave Heineman proclaimed May as Beef Month in Nebraska and highlighted Stella’s Bar and Grill in Bellevue as the winner of the statewide Best Burger Competition.

“This is a celebration of our successful beef industry,” Gov. Heineman said. “This is an opportunity for Nebraskans to acknowledge and appreciate that Nebraska raises the best beef in the business.”

Gov. Heineman issued a proclamation which noted cattle production as part of Nebraska’s agricultural heritage and highlighted the care that livestock producers give to both the cattle and the natural resources needed to support those animals.

“We have great synergy,” said Greg Ibach, Director of the Department of Agriculture. “Our cattle, corn and ethanol sectors combine to make Nebraska a competitive place to produce beef. At the same time, our other agricultural sectors - like pork, dairy, poultry, soybeans and wheat – provide important diversification that helps keep our agricultural industry as a whole strong.”

Nebraska ranks at or near the top nationally in a number of agriculture categories, including becoming the number one cattle feeding state in the nation earlier this year.

“Our state’s natural resources of water, grass and fertile soil that grow feed grains, coupled with devoted ranchers and feeders, strongly positions Nebraska into the future,” said Jeff Rudolph, President of Nebraska Cattlemen. “If we continue to nurture the business, Nebraska should remain a leader in beef production for many years into the future.”

Additionally, Gov. Heineman and Steve Hanson, Chairman of the Nebraska Beef Council Steve Hanson presented Stephanie Francois of Stella’s Bar and Grill in Bellevue with the award for winning the 2014 Nebraska’s Best Burger Contest. The contest was started by the Nebraska Beef Council in 2011 and is open to all Nebraska eateries that serve beef hamburgers. The contest involves nominations from the public, and then a panel of judges visits the finalists.

Stella’s “Stella Cheeseburger” won the contest. The cheeseburger was the main entrée served at a beef month barbecue hosted by Gov. Heineman at the Governor’s Residence. This is the second time Stella’s has won the competition, with its first title coming in 2012.

“I’m proud to present this award to Stella’s on behalf of Nebraska’s entire beef community,” said Hanson. “The restaurant’s commitment to quality beef ensures that their customers will enjoy great tasting hamburgers on every visit.”

In 2012, the most current year for which full statistics are available, there were 49,969 farms and ranches in Nebraska, and cattle could be found on 23,280, or about half, of those operations. Farmers and ranchers produced $23 billion in agricultural products in 2012, and roughly $10 billion of that is attributed to the beef sector.  



USGC Familiarizes Korean Swine Industry with Wean-to-Finish Model

While Korea's hog inventory has increased to more than 9.9 million head in 2013, Korea's demand for pork has outpaced its production. Primary due to its inability to supply high quality pork at competitive prices, the Korean swine industry is looking for new ways to be more efficient. This sector is very important for sustaining Korea's demand for U.S. grains, as it used 3.3 million metric tons of grain in 2013, or about 27 percent of the nation's total demand for grain.

Ineffective swine health management, inadequate business management and inefficient marketing systems are blamed for the low productivity and high cost of Korean pork. The industry looking to expand has experienced enormous difficulties. Scarcity of land, unfavorable social acceptance, enforced environmental regulations and more stringent manure management regulations are a few of the restrictions faced by the local producers.

korean-swine-2The U.S. Grains Council hosted a webinar for 60 Korean swine farmers, managers, extension agents and others, about a method to improve efficiencies in the Korean swine industry. A USGC consultant discussed management of a wean-to-finish system.

Wean-to-finish swine systems are an innovative concept in Korea. Typically the Korean swine producers raise hogs to market weight at one location. To supplement the industry's limited knowledge, the webinar informed participants about facilities needed for a wean-to-finish operation, how to start pigs successful on feed when they arrive at the location and the most up-to-date management and feeding tips.

The Council has worked in the Korean swine industry from the beginning of its presence in Korea in 1972 and was instrumental in bringing modern production practices and management knowledge to
the sector. The Council will continue to provide educational webinars and other programs to this important sector in Korea.



AgriBank Reports First-Quarter 2014 Financial Results

Today St. Paul-based AgriBank announced financial results for the first quarter of 2014.  “AgriBank posted a strong first quarter of 2014, with continued stellar credit quality that reflects the financial strength of borrowers across our District,” said Bill York, AgriBank CEO. “We attribute moderate declines in net income and total loans to non-recurring or seasonal factors. With solid liquidity and capital, we are well-positioned to fulfill our mission of meeting the credit needs of eligible rural borrowers over the long term.”

First-Quarter 2014 Results of Operations
Net income declined 6 percent to $131.1 million for the first quarter of 2014, down from $140.0 million in 2013. Excluding the impact of non-recurring items in 2013, net income remained essentially flat.

Net interest income remained relatively flat at $127.0 million, compared with $128.3 million for 2013. Net interest income remains at acceptable levels and primarily reflects the expected decline in our ability to enhance net interest income through our funding actions.

Non-interest income decreased to $29.5 million from $40.9 million in 2013. The decrease was primarily due to one large non-recurring loan prepayment fee of $10.0 million in 2013.

Non-interest expense decreased to $24.9 million from $28.7 million in 2013. The decrease was primarily due to the non-recurring loss on debt extinguishment of $4.0 million in 2013. There was no debt extinguishment in 2014.

Loan Portfolio
Total loans declined 2 percent to $72.1 billion, primarily due to seasonal paydowns that occur during the first quarter of the year as customers sold crops after year-end. The strong liquidity and equity positions of many borrowers are reflected in the continued favorable credit quality of AgriBank’s loan portfolio. The portfolio had 99.8 percent non-adverse loans at March 31, 2014 and at the end of last year. Nonaccrual loans at March 31, 2014 declined to $38.1 million from $39.7 million at the end of last year, while the allowance for loan losses rose to $10.7 million from $10.1 million.

The U.S. Department of Agriculture’s initial projection of 2014 net farm income indicates a decrease, compared to 2013, of 26.6 percent to $95.8 billion. The 2014 projection is the lowest level since 2010, but $8 billion above the previous 10-year average and still one of the highest levels of net farm income on record. The forecasted decrease is largely driven by expected lower crop revenues due to lower crop prices.

The passage of the Agricultural Act of 2014 (the Act) is generally positive, as it continues the economic safety net for agriculture producers. The Act replaces a system of annual direct payments with a set of programs that only trigger payments in years with low prices and/or low farm revenue. In addition, the Act strengthens the Federal Crop Insurance program by providing a county-level revenue product that covers part of a producer’s deductible. It also provides dairy producers with a new program that makes payments when margins over feed costs are low.

The onset of PED Virus in early 2013 in the United States has negatively impacted pork industry production, thus bolstering pork prices. Profitability for pork producers is expected to be variable and based on their overall production and marketing results.

Generally grain commodity prices are lower compared to one year ago, having some negative impact on profitability for crop producers. However, most crop producers have entered this lower commodity price environment with strong overall financial positions. Conversely, lower grain commodity prices have been favorable for the profitability of livestock, poultry, ethanol and dairy producers who purchase these inputs. In addition, prices for livestock, poultry and dairy production have been very favorable for producers in those sectors. 

Capital Resources and Liquidity
Total capital decreased $192.1 million during the period to $4.7 billion, driven primarily by reduced capital stock and participation certificates of $237.1 million. As a result of the benefits of the $250 million in non-cumulative perpetual preferred stock issued during the fourth quarter of 2013, we elected to amend our capital plan to reduce the base stock requirement. The amendment resulted in a decline of the base required stock investment for all affiliated Associations and other financial institutions from 2.50 percent to 2.25 percent which was effective March 31, 2014. Additionally, there was $79.9 million in patronage paid to Associations. These reductions in capital were partially offset by earnings of $131.1 million.

Cash and investments totaled $14.1 billion at March 31, 2014, compared to $13.5 billion at the end of last year.

About AgriBank
AgriBank is one of the largest banks within the national Farm Credit System, with more than $85 billion in total assets. Under the Farm Credit System’s cooperative structure, AgriBank is owned by 17 affiliated Farm Credit Associations. The AgriBank District covers America’s Midwest, a 15-state area stretching from Wyoming to Ohio and Minnesota to Arkansas. More than half of the nation’s cropland is located within the AgriBank District, providing the Bank and its Association owners with exceptional expertise in production agriculture. For more information, visit www.AgriBank.com.



CNH Industrial Reports Lower Quarterly Income

CNH Industrial N.V. announced consolidated revenues of $7.5 billion for the first quarter 2014, in line with the same time period a year earlier. Net sales of Industrial Activities were $7.2 billion, a 0.6% decrease compared to the prior year.

Net sales for Agricultural Equipment were $3.7 billion for the quarter, down 6.0% from 2013. The drop was mainly a result of decreased volumes in Latan America.

Worldwide Agricultural Equipment market share was lower for tractors and combines, mainly due to the expected timing impact from the transition to Tier 4B final emission regulations in major markets. The company's worldwide production of Agricultural Equipment was 27% above retail sales for the quarter, consistent with past years as the company increases inventory in the first quarter in anticipation of the spring and summer selling seasons.

Agricultural Equipment operating profit was $464 million for the quarter.



Weekly Column: Helping America’s Farmers Rise to the Challenge of Climate Change
USDA Secretary Tom Vilsack

Farmers, ranchers and foresters have long understood the need to care for our land and water—not only because preserving those resources for our children and their children is the right thing to do, but because they know that our farms and forests are more productive and efficient when they’re properly cared for.

Science and technology has expanded our capability and improved our understanding over the years, but this core mission remains the same. Today’s farmers and ranchers have risen to the twin responsibilities of producing safe, affordable food while employing cutting edge conservation practices on their operations to conserve water, minimize runoff, prevent soil erosion, and preserve wildlife habitat. They know that this will only become more critical as we take on the challenges of feeding a growing global population and dealing with the impacts of a changing climate.

This week, the White House released the Third National Climate Assessment (NCA) report, which provides an unprecedented look at what many of us in agriculture already know: climate change is not just a problem for the future.

We’ve seen firsthand the impact of increasingly severe drought, floods, extreme temperatures, and other dramatic weather patterns. Drought alone was estimated to cost the U.S. $50 billion from 2011 to 2013.

Farmers and ranchers know that severe and extreme weather means crop damage, delayed spring planting, delayed harvest, and reduced yields, and they know that those things have happened with increasing frequency over the past decade.

The NCA authors—240 of the nation’s leading scientists and experts, including researchers from USDA—confirm our on-the-ground understanding. The authors found that climate disruptions to agriculture have increased in the past forty years, and project that those disruptions will increase over the next twenty five.

Thus far, agriculture has been able to adapt, and USDA has been there to buffer and protect producers from weather-related risks through programs like disaster assistance. However, as the impacts of climate change become more prevalent, farmers and ranchers will need new tools and techniques to protect their bottom line and ensure the future food security of our nation.

USDA has undertaken a multipronged, multiyear approach to protect producers from the negative impacts of climate change. Our regional Climate Hubs collect data, conduct research, and develop practical, science-based conservation tools and techniques tailored specifically to the differing needs of each region of the country. We support cutting edge research by our land-grant university partners, including $6 million to ten schools to study the effects of climate on agriculture and an additional $6 million to develop tools to improve water resource quantity and quality. This research will help farmers, ranchers and forest landowners deal with the complex consequences of climate change in the short term.

Our efforts provide invaluable information and will help to safeguard the future food security of our nation, but there is more to do. We must continue to support policies and practices that mitigate the negative impacts of climate change, reduce consumption of fossil fuels, and make our land, air and water cleaner. You can learn more about the Climate Hubs and USDA’s climate change research at www.usda.gov/climatechange.