Friday August 8 Ag News

Farmers Look to Connect with Riders at Local Bike Ride Event

CommonGround Nebraska, a group of local volunteer farm women, is partnering with event organizers for the third annual Seven Cities Century Bike Ride. CommonGround will sponsor lunch for riders and attendees on August 9 in order to start a conversation about food topics, such as today's farming practices, food safety, and family farming versus corporate farming.

David Loberg, a farmer from Carroll, Nebraska who starred in Academy Award winning director James Moll's new documentary, "Farmland," will also be at the lunch to share his story. Moll's film provides a glimpse into the lives of six young farmers and ranchers and their families from across the country. The luncheon will be held at Rooster's Steakhouse in Carroll from 11 a.m. To 2 p.m.

Loberg, a fifth-generation farmer, runs the family corn and soybean farm with his mother near Carroll. The farm also custom feeds 500 head of cows for a local dairy operation.

CommonGround volunteers Diane Becker, who farms near Madison, and Joan Ruskamp,  who farms near Dodge, will also be on hand to discuss Nebraska agriculture and the importance of family farms to the state’s economy.

CommonGround will post road-side signs like the old “Burma-Shave” signs along the Saturday morning bike route with messages to get bikers thinking about such farming topics as GMOs and modern food production that they may want to discuss with the volunteers and Loberg over lunch.

The bike ride is a great opportunity for people to see farm country up close, says CommonGround’s Becker, who also serves on the “7 Cities Century Bike Ride” steering committee. “As riders, we get a whiff of the hog barns and feedlots as we pedal by. Riders see that these farms are homes for those who work there, not factories. My hope is that the ride instills pride for the American farmer for those who pedal the 100 miles through the heart of Northeast Nebraska.”

Becker says CommonGround’s Saturday luncheon “gives riders a noon break to absorb what they've seen the first 25 miles of riding and ask questions of the farmer volunteers, and guest farmer Loberg. What better place to have a conversation about farming and food than in the middle of farm country?”



Watch For Late Season Insects on Late Planted Corn and Soybeans
Bob Wright, UNL Extension Entomologist

There are many areas of the state where corn or soybeans were planted late due to hail or other storm injury. Be aware that these late planted fields will be at risk for late season insect infestations.

Corn will attract many insects during silking. It may have higher than normal populations of corn earworms, European corn borer, and corn rootworm beetles, as well as other insects. Late planted corn functions as a trap crop for rootworms, and beetles from surrounding fields planted earlier will move into later planted fields and concentrate there to feed and lay their eggs.

Corn planted back to these fields in 2015 will be at greater risk for rootworm injury, depending on how many rootworms moved into the field.

Soybeans also will attract insects such as stink bugs during flowering. Also, leaves will be green while nearby soybeans may be less attractive to insects. Late season caterpillars, bean leaf beetles, rootworm beetles, and soybean aphids may cause economic damage in these fields.

Don't ignore these late planted fields. Continue to scout them during their vulnerable growth stages, regardless of the calendar date.



Heineman Seeks Applicants for Natural Resources Commission to Represent Ground Water Irrigators

Gov. Dave Heineman is seeking qualified candidates for one position on the Natural Resources Commission to represent ground water irrigators.  The open position is due to a vacancy.

The Natural Resources Commission is charged with helping to conserve, protect, and utilize the water and related land resources of the state through the oversight of seven state aid programs established for these purposes. The Commission consists of twenty-seven members who represent diverse water and land conservation and related natural resources management interests.

Individuals interested in applying for the Natural Resources Commission should send a resume, along with a completed application form to Kathleen Dolezal in the Governor’s Office, at P.O. Box 94848, Lincoln, NE 68509 or Kathleen.Dolezal@nebraska.gov. The application form can be completed on the Governor’s website or requested by calling the Governor’s Office. Applications will be accepted through close of business on August 29.

Nebraskans with questions about the position may call the Governor’s Office at (402) 471-2244 and ask for Ms. Dolezal.



Early Propane Purchase May Help Limit Risk
John Hay, UNL Extension Educator

The propane price spike of 2014 was shocking to some who had to purchase propane in early 2014 to make it through the winter. While it is unknown whether such a spike will occur again, long-term propane price data shows relatively stable prices across the year.  This suggests there is less risk of a price decline with early purchases. 

A study by the Missouri Attorney General suggests the combination of a cold winter, record propane exports, and high use for grain drying during harvest contributed to the reduced supplies and high prices in 2013-14. To manage risk of a price hike, the Missouri report recommends:
-    Consider a pre-purchase fixed price or maximum price plan offered by propane dealers during warmer months.
-    Consider the supplier's track record and reputation, and shop around. Some suppliers have a greater ability to access inventory during times of peak demand.
-    Research whether it makes sense to own or lease a tank. Consumers who own their own propane tank often have greater flexibility in choosing a supplier, while those who lease often must buy propane only  from the tank owner.

Propane is produced from both petroleum and natural gas. The price of propane tends to trend with the price of petroleum. The production of propane is not seasonal yet consumption is very seasonal with heavy use for heating and crop drying during the fall and winter seasons. A cold winter combined with other factors such as weather and competing markets can cause price spikes.

The spike in 2014 was extreme compared to any year in the last decade or more. Although it is unknown if a spike like 2014 will occur this coming winter, a full tank of propane and a plan or contract for more may help mitigate a potential cost spike.



ISA China trade mission strengthens friendships, explores new opportunities

Iowa Soybean Association (ISA) leaders spent the latter half of July in China, strengthening relationships with buyers and exploring new markets to help sell a potential record crop.

A common theme during ISA’s China Trade Mission, July 23-Aug. 1, was that demand from the world’s largest soybean buyer will continue to increase.

ISA participants included President Brian Kemp, who farms near Sibley; President Elect Tom Oswald, who farms near Cleghorn; CEO Kirk Leeds, Market Development Director Grant Kimberley and several soybean industry officials.

“Every time we go to China, or other countries, we’re meeting with new buyers and solidifying relationships with existing ones,” Kemp said. “It’s important for us to understand their culture and industries. By understanding Chinese buyers better, we can fulfill their needs.”

The ISA delegation received the latest information about soy demand and food policy from Chinese government and agriculture officials. They visited farms, processors and ports. The group traveled to the province of Inner Mongolia for the first time where they learned about the country’s burgeoning dairy industry and future needs for soybeans and soybean products, like bypass soybean meal.

“As far as soybeans, there’s lot of potential,” said Peter Mishek, president of Mishek Inc. & Associates, part of the trade mission staff.

Gov. Terry Branstad recently proclaimed August as Iowa Soybean Month. The designation recognizes soybean farmers for their contributions to the state’s economy and environmental stewardship.

Persistent work by ISA in the area of market development has increased profitability of soybean production in the state — the reason why the organization was formed 50 years ago. Agriculture and related businesses account for about one-quarter of Iowa’s $152.4 billion gross domestic product.

Oswald said trade missions definitely pay off.

“We spend a lot of time making people feel comfortable doing business with us and utilizing soybeans and soybean products sourced from Iowa,” he said. “Buyers know where to go for good quality.”

In mid-July, the U.S. Department of Agriculture projected national soybean production at a record 3.8 billion bushels, up 165 million from last year. U.S. soybean exports during the 2014/15 marketing year are projected at 1.675 billion bushels, a slight increase from the current year. About half will likely go to China.

Chinese soybean imports are expected to reach a record 68 million metric tons by the end of the current marketing year. Prominent Chinese government and agribusiness officials predict imports could reach 75 million metric tons next year and 80 to 85 million in five years.

“The reason for growth is our large population (1.3 billion) and we use more (soybean) oil than any other country. As the living standard has increased, we eat more meat. (Soybean) meal is used for livestock,” Lui Ren, director general of the foreign affair department for China’s State Association of Grain, said.

Kimberley said the blistering pace of Chinese soybean imports is slowing somewhat compared to recent years, but the nation’s economy remains strong and is growing.

“There will still be significant growth in soybean, feed and meat demand in China for at least another decade, if not more,” Kimberley said.



U.S. Pork, Beef Exports on Record Pace through June
U.S. pork and beef exports remained strong in June, pushing export value for both products to a record first-half pace according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

June pork exports totaled 181,531 metric tons (mt), up 7 percent from a year ago, while export value increased 25 percent to $585.1 million. In the first half of 2014, pork export volume (1.15 million mt, +9 percent) and value ($3.4 billion, +17 percent) achieved record highs.

Beef exports were up 5 percent in volume (106,609 mt) in June and set a new monthly value record of $631.7 million (+12 percent). First-half export value also set a new record of $3.27 billion (+16 percent). Export volume was 585,953 mt in the first half, up 8 percent from a year ago but trailing the 2011 record.

Despite intense competition, U.S. pork performing well in Asia
Pork export value per head slaughtered was a record-high $72.24 in June, up $15 from a year ago. The percentage of U.S. production exported was 25 percent for muscle cuts and 29 percent when including both muscle cuts and variety meat – up from 24 percent and 28 percent, respectively, in June 2013.

With European pork absent from the Russian market for the past six months due to an impasse over African swine fever, competition has intensified in key Asian markets. But U.S. pork still achieved first-half increases in South Korea and Japan.

“USMEF has focused for many years on establishing loyal customers in these markets and impressing upon them the quality and consistency of U.S. pork,” said USMEF President and CEO Philip Seng. “That loyalty is being tested in this increasingly competitive environment, but our results have held up very well.”

First-half highlights for U.S. pork included:
-    Exports to Korea continued well ahead of last year’s pace, as high domestic pork prices helped fuel imports. First-half volume was up 31 percent to 77,209 mt, while value increased 48 percent to $236.3 million.
-    Pork muscle cut exports to Japan were up 3 percent in volume (213,653 mt), and 5 percent in value ($969.3 million).
-    Exports to Mexico posted a very strong first half, increasing 15 percent in volume (333,072 mt) and 42 percent in value ($751.6 million).
-    Colombia has emerged as the pacesetter for U.S. pork in the Central/South America region, with exports increasing 83 percent in volume (25,779 mt) and nearly doubling in value ($69.7 million, +95 percent). Exports to the entire region increased 12 percent in volume (59,619 mt) and 21 percent in value ($160.8 million).
-    After a down year in 2013, exports to Australia rebounded nicely – increasing 17 percent in volume (33,149 mt) and 25 percent in value ($114.3 million).

U.S. pork regained limited access to the Russian market in March after a 13-month absence, with two slaughter plants resuming shipments to Russia. Exports were large in June (9,371 mt valued at $34.3 million), but have now been suspended (effective Aug. 7) due to retaliatory sanctions announced this week by the Russian government.

June beef export value nearly $300 per head
Beef export value per head of fed slaughter set another new record in June at $299.14, up $38.93 from a year ago. The ratio of U.S. production exported was 12 percent for muscle cuts and 15 percent for muscle cuts and variety meat combined – up from 11 percent and 14 percent, respectively, a year ago.

“Seeing beef export value per head approach $300 is really remarkable,” Seng explained. “Just four years ago, export value was about $150 per head and we broke $200 per head for the first time in 2011. This shows just how important the international markets are for delivering strong returns to the producer.”

First-half highlights for beef exports included:
-    Exports to Hong Kong increased 55 percent in volume (71,829 mt) and 76 percent in value ($492.5 million). U.S. beef regained full access to Hong Kong in mid-June, adding key products such as ground beef and processed meats, which should help exports maintain a strong pace in the second half of the year.
-    Momentum continued in Korea, as exports increased 11 percent in volume (56,478 mt) and 40 percent in value ($379.5 million). Strong demand from retail outlets and restaurants helped fuel a 50 percent increase in beef muscle cut value ($362.6 million) to Korea.
-    Export volume to Japan slowed slightly from a year ago (111,044 mt, -3 percent), but export value was steady at $693.6 million. Japanese import data show that U.S. beef continues to gain market share, as imports were lower from all other main suppliers.
-    Exports to Mexico increased 30 percent to 116,337 mt, while value increased 44 percent to $545.9 million. However, USMEF is analyzing possible issues with the 2013 export data for Mexico, which may partially explain the large year-over-year increase.
-    Taiwan bounced back from a slow first quarter to post first-half increases in both volume (16,127 mt, +3 percent) and value ($132.8, +7 percent).
-    Growth continued in the Central/South America region, with exports increasing 5 percent in volume (20,293 mt) and 20 percent in value ($84.8 million). Peru is still the largest volume market in the region at 6,965 mt, while Chile leads in value at $33.6 million.

Lamb export value higher in June, but down in first half
U.S. lamb export value achieved a modest increase in June ($2.6 million, +2 percent), despite a decline in volume (986 mt, -30 percent). For the first half of the year, lamb exports were lower in both volume (5,461 mt, -25 percent) and value ($13.8 million, -12 percent). The decline was mostly attributable to lower exports to Canada, which were down sharply. Panama was a bright spot in the first half, with exports totaling 38 mt (+245 percent) valued at $273,000 (+133 percent).



Margin Protection Program: New Dairy Safety Net on Track for September Launch

After years of work by NMPF and its member cooperatives, a better federal dairy program is expected to finally emerge between now and Labor Day. Barring any last-minute glitches, producers will soon be perusing the details of this new, and very different, safety net based on margins rather than just milk prices.

The Dairy Margin Protection Program will offer farmers basic insurance against 2009-type catastrophic margins for only $100 per year, and higher levels of coverage for an additional premium.

The regulation implementing the program has moved from the Agriculture Department to the Office of Management and Budget – a key bureaucratic step – and USDA expects to have it out in time to launch the sign-up process following the Labor Day weekend.

In the meantime, local Farm Service Agency offices are getting up to speed on the program and preparing to assist farmers once the sign-up period begins. The USDA plans an August letter to farmers explaining the new program.

Many program details won’t be final until the implementing regulation is published, but NMPF has been urging USDA to make the program farmer-friendly. There will be a USDA handbook on the program, and a consortium of land-grant universities will also be helping producers calculate farm-specific margin coverage options.

NMPF will schedule webinars and will have a simple, downloadable web-based tool to help producers navigate the decision-making process. The online tool will allow farmers to plug in their own numbers and quickly and easily see the program’s potential impact.

A detailed summary of what was in the legislation that created the program can be found at www.futurefordairy.com.



CWT Helps Dairy Exports Hit Record for June

The United States exported 17.3 percent of its milk production in June, the highest percentage ever achieved for the month of June and one of the highest monthly percentages ever.

The increase from the previous June record – 16.5 percent in June 2013 – resulted partly from increased butter and cheese exports since last year. An important factor boosting butter and cheese exports was export assistance provided by NMPF’s Cooperatives Working Together, the voluntary, farmer-funded program that helps member cooperatives expand markets for U.S. dairy products overseas.

Between January and May, CWT helped with approximately a quarter of U.S. butter exports and more than half of U.S. American cheese exports. In the first six months of the year, butter exports were up 42 percent compared with 2013 and American and cheddar cheese exports were up 65 percent. CWT sales have helped keep U.S. butter and cheese prices above world levels during a significant downturn in world prices.

In July alone, CWT committed to assist with 26 million pounds of dairy product export sales arranged by five CWT-member cooperatives. That includes 21 million pounds of cheese, 1.2 million pounds of butter and nearly 4 million pounds of whole milk powder. Destinations include all six continents. The five cooperatives were Dairy Farmers of America, Land O’Lakes, Michigan Milk Producers Association, Northwest Dairy Association (Darigold) and Tillamook County Creamery Association.



AgriBank Reports Second Quarter 2014 and Six Month Financial Results

Today St. Paul-based AgriBank announced financial results for the second quarter of 2014.

“AgriBank continued to have strong performance through the second quarter of 2014, with continued strong credit quality and a slight decline in net income primarily attributable to non-recurring factors,” said Bill York, AgriBank CEO. “Favorable growing conditions are expected to result in strong yields throughout our District. Lower crop prices, as compared to the prior year, will result from these strong yields but should have a positive impact on producers who use these crops as inputs.”

YEAR-TO-DATE 2014 RESULTS OF OPERATIONS
Net income decreased to $266.6 million for the six months ended June 30, 2014 from $281.3 million during the same period in 2013. Excluding the impact of non-recurring items in 2013 and an increase in provision for loan losses of $4.0 million, net income remained essentially flat.

Net interest income remained relatively flat at $258.3 million for the six months ended June 30, 2014 compared to $258.4 million for the same period in 2013.

Non-interest income decreased to $63.4 million for the six months ended June 30, 2014 from $75.6 million during the same period in 2013. The decrease was primarily due to fewer loan conversions and prepayments in the first half of 2014 and one large non-recurring loan prepayment fee of $10.0 million in 2013. These decreases were partially offset by an increase in mineral income of $9.9 million in the first half of 2014 driven by relatively high gas prices resulting in continued demand for exploration rights and production activities.

Non-interest expense decreased to $52.6 million during the six months ended June 30, 2014 from $54.2 million during the same period in 2013. The decrease was primarily due to the non-recurring loss on debt extinguishment of $4.0 million during the six months ended June 30, 2013. There has been no debt extinguishment in 2014.

SECOND QUARTER 2014 RESULTS OF OPERATIONS
Second quarter 2014 net income was strong at $135.5 million, but down from $141.3 million for second quarter 2013. The decrease was primarily due to an increase in provision for loan losses of $4.0 million.

LOAN PORTFOLIO
Total loans declined slightly to $73.0 billion as of June 30, 2014 from $73.7 billion as of December 31, 2013. The decrease was primarily due to seasonal paydowns occurring during the first quarter of the year, substantially offset by increases in operating lines funded by wholesale loans to Associations during the second quarter. The strong liquidity and equity positions of many borrowers are reflected in the continued favorable credit quality of AgriBank’s loan portfolio. The portfolio remained at 99.8 percent non-adverse loans as of June 30, 2014; unchanged from December 31, 2013. Nonaccrual loans as of June 30, 2014 declined slightly to $38.4 million from $39.7 million as of December 31, 2013. The allowance for loan losses increased to $12.0 million as of June 30, 2014 from $10.1 million as of December 31, 2013.

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 2014 District crop production growing season started with colder temperature and excess precipitation in the northern region, resulting in a higher than normal abandonment rate. The central, southern and eastern regions, however, experienced near ideal planting conditions followed by very favorable growing conditions. This has resulted in expectations for record yield levels for corn and soybeans, and above average yields for many of the other crops grown in these areas of the District. The resulting reduction in crop prices and feed cost should continue to have a positive impact on livestock, poultry, dairy and ethanol producers, but could potentially have an adverse effect on crop producers.

CAPITAL RESOURCES AND LIQUIDITY
Total capital decreased $140.7 million during the period to $4.8 billion, driven primarily by reduced capital stock and participation certificates of $232.4 million and patronage to Associations of $158.2 million, substantially offset by net income of $266.6 million. The decrease in capital stock and participation certificates was primarily due to the first quarter amendment to our capital plan which reduced the base required stock investment for all affiliated Associations and other financial institutions from 2.50 percent to 2.25 percent effective March 31, 2014. The capital plan amendment was made possible by the issuance of $250.0 million in non-cumulative perpetual preferred stock in the fourth quarter of 2013.

Cash and investments totaled $14.8 billion as of June 30, 2014, compared to $13.5 billion as of December 31, 2013.



CNH to Invest $24 Million to Expand Iowa Facility

CNH Industrial N.V. is investing $24 million to expand production in Burlington, Iowa, with the addition of the company's crawler dozer production line. The capital goods company is increasing its existing presence in the city by adding the new production line to its manufacturing plant.

The production facilities will include a new dedicated paint line, welding and computer numerical control machining equipment and a dedicated assembly line. The Burlington plant, home to more than 600 employees, has manufactured equipment for CNH Industrial's brands, since 1937.

In addition to producing Case Construction Equipment, the plant's employees produce agricultural equipment for the company's Case IH and New Holland brands. This expansion will create approximately 50 full-time jobs. Preparations will begin later this year and production on the new line is expected to begin in the second half of 2015.

"With the growing demand for quality construction equipment, we are pleased to announce that production in Burlington, Iowa will be expanded," said Bret Lieberman, CNH Industrial Vice President of Manufacturing, North America. "We look forward to creating a state-of-the-art production line that will continue CNH Industrial's tradition of providing high-performing equipment to the construction industry."

According to the firm, establishing this production line to Iowa is consistent with CNH Industrial's long-term strategy to optimize its manufacturing footprint and achieve a lean, flexible industrial operation. The project is contingent upon completion, and approval, of all State and local incentives and grants.