Wednesday November 19 Ag News

2014 Silver Eagle Award to Honor Clayton Yeutter

Nebraska Farm Bureau has selected Dr. Clayton Yeutter of Eustis, Neb., as the 2014 recipient of its highest honor, the Silver Eagle Award. The award will be presented to Dr. Yeutter on Dec. 9 at the 2014 Nebraska Farm Bureau Convention in Kearney.

Dr. Clayton Yeutter served as Secretary of Agriculture from 1989-91, under George H.W. Bush. He and his United States Department of Agriculture (USDA) team were responsible for much of the 1990 Farm Bill, which moved the U.S. farm policy toward greater market orientation, Nebraska Farm Bureau President Steve Nelson said Nov. 5.

“Dr. Yeutter was born and raised on a farm, feeding and raising cattle near Eustis in Dawson County. No other Nebraskan has such a broad and diverse record of service to agriculture at the highest levels of government and industry. His service as chief executive officer of the Chicago Mercantile Exchange, U.S. trade representative under the Reagan administration, Secretary of Agriculture under President George H.W. Bush, and then advancing as a special economic advisor to President Bush, the only Nebraskan to ever do so, have all enhanced the position of agriculture and increased the economic future for agricultural producers in our state and across the nation,” Nelson said.

Dr. Yeutter has an undergraduate degree in animal husbandry and received a juris doctor (law) degree and doctor of philosophy (Ph.D) in agricultural economics from the University of Nebraska-Lincoln, all with highest honors. He headed the Nebraska Mission to Columbia, the largest agricultural technical assistance program in the world. His impact on U.S. agriculture was felt globally when he led negotiations of the historic U.S. Canada Free Trade Agreement, which later became NAFTA when Mexico was added to the agreement.

“During his service in the Reagan administration, Dr. Yeutter helped launch the Uruguay Round of trade negotiations, which created the World Trade Organization (WTO). As a result of these negotiations, American agriculture has benefited from progressively more open markets and greater access to consumers around the world,” Nelson said.

Dr. Yeutter’s service to agriculture didn’t stop with President Ronald Reagan, he went on to serve as Secretary of Agriculture and special economic advisor to President George H.W. Bush.

“In 1990 he steered a more market oriented Farm Bill through the U.S. Congress. This legislation, coupled with markets Dr. Yeutter had opened up during his time as U.S. trade representative, led to an unprecedented expansion of agricultural exports, a huge benefit to American agriculture over the past two decades,” Nelson said.

Dr. Yeutter’s first wife Jeanne died unexpectedly in 1993. They have four children together and nine grandchildren. His second wife, Cristy, served on the White House staff under President Reagan and they have three children.

“Agriculture and certainly Nebraska is stronger because of Dr. Yeutter’s vision,” Nelson concluded. “We congratulate Dr. Yeutter who is extremely worthy of Nebraska Farm Bureau’s highest honor, the Silver Eagle Award.”



National Expert to Speak at November Ethanol Board Meeting

Doug Durante, Clean Fuels Development Coalition executive director, will speak about the Urban Air Initiative and other biofuel industry challenges at the Nebraska Ethanol Board meeting Monday, Nov. 24.

In conjunction with the Urban Air Initiative, a nonprofit dedicated to reducing harmful emissions from gasoline to improve public health, Durante has been working with Nebraska policymakers advocating for cleaner, renewable fuels.  Durante’s national ethanol advocacy efforts and his relationship with the Nebraska ethanol industry span more than 35 years.  He frequently consults on international biofuel projects including initiatives which focus on the use of biofuels to reduce greenhouse gas emissions.

During the last several years, research collected by the Urban Air Initiative shows how toxic compounds called aromatics, which are added to gasoline to boost octane, are causing a host of respiratory illnesses in urban populations. Durante advocates for a cleaner alternative – ethanol – which is a natural octane enhancer and a clean, low-carbon fuel choice.

Durante, a veteran of biofuel policy and ethanol market development, is headquartered in Bethesda, Maryland, and represents members of the Clean Fuels Development Coalition on Capitol Hill. Previously, he served as an ethanol advisor to members of Congress and as a technical and policy advisor to the U.S. Department of Agriculture and the U.S. Department of Energy.

The Ethanol Board meeting will be held at Country Inn and Suites in Lincoln at 9 a.m. Durante will speak at approximately 10 a.m.



Cow Depreciation – A Hidden Significant Non-Cash Expense for Cow-Calf Producers
Aaron Berger, UNL Extension Educator
Cow depreciation is frequently the second largest expense to the cow-calf enterprise after feed. Depreciation is a non-cash expense that is often overlooked by cow-calf producers. Depreciation for a cow is calculated as the following.

Depreciation = (Purchase Price or Replacement Cost – Salvage Value)/Productive Years in the Herd

Purchase price is the dollar value of the bred heifer or cow when she is bought and enters the herd. For producers raising their own replacement heifers, replacement cost should include all costs starting with the costs to produce the weaned heifer calf till the time she enters the herd as a bred female.

To demonstrate how significant this expense can be, examine an example of current bred replacement heifer prices against today’s cull cow values.

(Bred Two-Year-Old Heifer = $2750) – (Average Cull Cow Value = $1500) = $1250/head, Depreciation without death loss

The average number of productive years for most cows in a herd is somewhere from 3-5 years assuming a 10 - 20% cowherd replacement rate. Using five years, depreciation is $250.00 per head per year. At four years it is $312.50 per head per year and at three years it is $416.67. If you add in death loss at 2% on an average cow herd value of $2000 then depreciation expense jumps to $290.00 per head for five years, $352.50 for four and a $456.67 for three. Cow depreciation is a significant expense!

Aggressively identifying ways to reduce depreciation expense should be a goal for cow-calf producers. Depreciation can be reduced one of three ways.
1. Reduce replacement heifer development costs or the purchase price for bred heifers/cows.
2. Increase the salvage value of cows that are leaving the herd.
3. Increase the number of years a cow is productive in the herd.

Let’s take a look at each segment of the cow depreciation equation.

PURCHASE PRICE OR REPLACEMENT COST
Cow-calf producers who purchase bred replacement females need to evaluate the cost of those females against expected productivity and revenue that will be generated from them. When most cow-calf producers think of buying bred replacements, they probably are thinking of purchasing bred heifers. However, it may be that purchasing a different age group of cows would be more profitable and provide greater management flexibility.

Those cow-calf producers who raise and develop their own replacement heifers should enterprise replacement heifers separately from the cowherd to identify all of the costs involved. A producer should know their costs to produce a weaned heifer calf. At weaning the producer should on paper “sell” the weaned replacement heifers to the replacement heifer development enterprise at market value. The replacement heifer enterprise “buys” the weaned heifers and then develops the heifers into bred heifers that can be “sold” back to the cow-calf enterprise. Once the bred heifers are ready to enter the herd, the cow-calf enterprise then “buys” these bred heifers at market value.

While all of these transactions only occur on paper, and may seem unnecessary, it brings clarity to where expenses and revenue are being generated in the operations and which enterprises are profitable. Keeping track of all expenses, including a heifer’s market value at weaning, that go into developing a bred replacement heifer is important to be able to identify opportunities to optimize development costs. For more information on developing replacement heifers see the UNL NebGuide “Reducing Replacement Heifer Development Costs Using a Systems Approach” at http://go.unl.edu/8m5d.

SALVAGE VALUE
In the depreciation equation, increasing the “salvage” value of cows leaving the herd often provides the greatest opportunity to reduce depreciation. Frequently cow-calf producers pregnancy test spring calving cows and cull non-pregnant cows in the fall of the year. Other cows are frequently culled at this time as well for a plethora of reasons including age, attitude, udders, structure, lumps, bumps, etc. This time of the year is also historically when annual cull cow values tend to be lowest for the year.

The following are two examples of the ways that value can be added to cows leaving the herd increasing their worth and thus reducing depreciation expense.

1. Have a long breeding season and a short calving season. The use of pregnancy diagnosis tools such as palpation and ultrasound can identify how far along a cow is in her pregnancy. Those cows that will calve later than the desired time period can be sold as bred cows. In today’s market environment bred cows usually bring a significant premium to non-pregnant cows.

2. Capture additional value from non-pregnant cows by adding weight and selling into a historically seasonally better market than the fall. The value of weight gain today for a cull cow can be quite amazing at current prices. This is especially true if you can move a cow from a “Lean” classification into a “Boner/Breaker” classification in a market where prices are increasing.

PRODUCTIVE YEARS IN THE HERD
Evaluate ways to cost effectively reduce cowherd turnover. The first reason cows are usually removed from the herd is because they are not pregnant. Young cows, especially those that are two or three years of age are often the most vulnerable. Older cows toward the end of their productive life can be vulnerable as well. There are several tools such as hybrid vigor, genetics that fit resources, health programs, development systems and strategic feeding/supplementation that can be used to cost effectively reduce cowherd turnover.

Cow depreciation is a significant expense. Cow-calf producers who aggressively manage to cost effectively reduce this expense will see an increase in their profit.



USDA:  October Milk Production up 3.9 Percent
                       
Milk production in the 23 major States during October totaled 16.0 billion pounds, up 3.9 percent from October 2013. September revised production, at 15.5 billion pounds, was up 4.3 percent from September 2013.  The September revision represented an increase of 22 million pounds or 0.1 percent from last month's preliminary production estimate.

Production per cow in the 23 major States averaged 1,868 pounds for October, 51 pounds above October 2013. This is the highest production per cow for the month of October since the 23 State series began in 2003.

The number of milk cows on farms in the 23 major States was 8.59 million head, 89,000 head more than October 2013, and 3,000 head more than September 2014.

Milk production in Iowa...
...during October 2014 totaled 390 million pounds, up 4 percent from October 2013 according to the USDA, National Agricultural Statistics Service – Milk Production report. The average number of milk cows during October, at 207,000 head, was unchanged from last month, but 1,000 more than a year ago. Monthly production per cow averaged 1,885 pounds in October 2014, up 65 pounds from last October. This sets a new October production record for Iowa, surpassing the previous record set in 2012.

October Milk Production in the United States up 3.8 Percent
Milk production in the United States during October totaled 17.1 billion pounds, up 3.8 percent from October 2013.  Production per cow in the United States averaged 1,842 pounds for October,
52 pounds above October 2013.  The number of milk cows on farms in the United States was 9.28 million head, 77,000 head more than October 2013, and 4,000 head more than September 2014.



Iowa Farm Bureau to Hold Farm Bill Enrollment Meetings

In the next few months, farmers, landowners and Iowans with farm ties face many risk management enrollment decisions in the 2014 farm bill. With enrollment deadlines approaching and more choices and more decision options available than ever before, the Iowa Farm Bureau Federation (IFBF) is offering free informational meetings to help Iowans navigate their options.

The Agricultural Act of 2014, better known as the farm bill, has several vital risk management tools which require enrollment in order to be 'locked in.' For example, the Agriculture Risk Coverage (ARC) or the Price Loss Coverage, (PLC) programs are both designed to provide a safety net for farmers in times of extreme market swings, but there are many options to consider before choosing them. Once completed, all program enrollment decisions will be binding for the duration of the five-year Farm Bill program.

In addition to risk management program enrollments, farmers and landowners will also have options to update their farm's base acreage and production history. "Farms may have evolved over the years and yields have risen, so these things need to be updated in the Farm Services Administration (FSA) system to be sure farmers are best able to protect their long-range economic sustainability," says Dave Miller, IFBF director of research and commodity services.

"With the range of options available for farmers, the IFBF farm bill meetings are designed to help farmers and others visualize how each program will help them manage risk in the short term, as well as in the later years of the 2014 farm bill," Miller added. "We want to help farmers get a better idea of the longer term. In some cases, the program option that looks best for this year or next may not be the right one for the last two years of the farm bill."

The meetings will also help farmers determine which option is best for their location. "For example, a farmer with land in Kossuth County may find one program best suited to that location, but it could be a very different choice that would be best for a farmer with land in Lucas County," says Miller.

The Iowa Farm Bureau Farm Bill Decision meetings will also help attendees learn the online USDA-sponsored decision tools, so they can make program choices that best suit their individual needs.

Among the meetings scheduled include...
December 22, 1:00 P.M., LeMars, Plymouth Co. Convention Center – 251 12th Street SE    
December 22, 6:30 P.M, Sheldon, Northwest Iowa Community College – 603 West Park St.
January 6, 6:30 P.M, Denison, Boulders Conference Center – 2507 Boulders Drive
January 8, 6:30 P.M, Ames, Scheman Building at the Iowa State Center - Room #275
January 19, 1:00 P.M, Red Oak, Red Coach Inn – 1200 Senate Avenue    
January 19, 6:30 P.M., Council Bluffs, Iowa Western Community College – Looft Hall Auditorium

IFBF will host 32 meetings around the state from December 15, 2014 to February 3, 2015. There is no cost to attend, but registration is requested. A complete list and locations of the meetings can be found at www.iowafarmbureau.com. For additional questions call 515-225-5633.



Dec. 15 Deadline to Report 2015 Forage Acres

Iowa producers must report all perennial forage crops (hay/pasture) and fall-seeded small grains for the 2015 crop year by Dec. 15 to their local Farm Service Agency office. Perennial forage crops and fall-seeded small grains reported after Dec. 15 are subject to a minimum $46.00 late filed fee, per farm. If a producer acquires additional acreage after the Dec. 15 acreage reporting date, then the acreage must be reported no later than 30 calendar days after the purchase or acquiring the lease.

Reporting acreage ensures producers are compliant with current and future FSA farm programs, including disaster assistance.

Appointments are encouraged, but not necessary. Please contact your local Farm Service Agency office for more information.



ASA Welcomes Rep. Mike Conaway as House Agriculture Committee Chairman

The members of the House Republican Steering Committee announced yesterday that Rep. Mike Conaway, who represents the Permian Basin in West Central Texas, will become the chairman of the House Committee on Agriculture. Rep. Conaway succeeds current Chairman Frank Lucas of Oklahoma, and will assume the gavel at the start of the 114th Congress. American Soybean Association First Vice President Wade Cowan, who farms in Brownfield, Texas, just north of Rep. Conaway's district, offered ASA's congratulations to the incoming Chairman.

"Rep. Conaway has a proven track record of representing farmers not only in West Central Texas, but across the country, and he will make a fine chairman," said Cowan. "As chair of the Agricultural Subcommittee on General Farm Commodities and Risk Management, Rep. Conaway exhibited fluent understanding of the complex issues that shape the nation's farm program, and how those issues can impact soybean farmers in the field. With this understanding, we are confident that soybean farmer issues will continue to be well represented within the Committee, and we look forward to working with him and his able staff."

Cowan also noted the contributions of outgoing Chairman Lucas, with whom ASA worked to pass the 2014 Farm Bill.

"Soybean farmers owe a great deal of our success on farm policy issues to Chairman Lucas' leadership," said Cowan. "Under his watch, Chairman Lucas helped to shepherd a farm bill that ASA worked very hard to pass for the benefit of American farmers and consumers alike. But that's only one dimension of his impact. Our farmers are better equipped to address volatile market conditions, growing international competition and the generational drought that has devastated Texas, Oklahoma, and many other states in recent years. We wish Chairman Lucas all the best, and look forward to working with him as an influential member of the committee."



USDA Helps Open and Expand Export Markets for U.S. Agriculture

Agriculture Secretary Tom Vilsack today announced that the U.S. Department of Agriculture's (USDA) Foreign Agricultural Service has awarded funding to more than 60 U.S. agricultural organizations to help expand commercial export markets for American products.

"The Market Access and Foreign Market Development Programs help agricultural organizations representing thousands of producers and businesses open and grow markets for American products around the world," Vilsack said. "Exports create jobs and foster growth that is critically important for rural communities and our entire nation's economy."

Through the Market Access Program (MAP), Foreign Agricultural Service partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities. The program, which focuses on consumer promotion, including brand promotion for small companies and cooperatives, is used extensively by organizations promoting fruits, vegetables, nuts, processed products, and bulk and intermediate commodities. Through MAP, the Foreign Agricultural Service will provide $173.2 million to 62 nonprofit organizations and cooperatives. Participants contribute an average 214 percent match for generic marketing and promotion activities and a dollar-for-dollar match for promotion of branded products by small businesses and cooperatives.

The Foreign Market Development (FMD) Program focuses on trade servicing and trade capacity building by helping to create, expand and maintain long-term export markets for U.S. agricultural products. Under FMD, also known as the Cooperator Program, the Foreign Agricultural Service will allocate $26.7 million to 22 trade organizations that represent U.S. agricultural producers. USDA's Foreign Agricultural Service partners with U.S. agricultural producers and processors, who are represented by non-profit commodity or trade associations called cooperators. The organizations, which on average contribute nearly triple the amount they receive in federal resources, will conduct activities that help maintain or increase the demand for U.S. agricultural commodities overseas.

USDA's international market development programs have had a significant and positive impact on U.S. agricultural exports. An independent study released in 2010 found that trade promotion programs like MAP and FMD provide $35 in economic benefits for every dollar spent by government and industry on market development.

The past six years represent the strongest period for U.S. agricultural exports in the history of the United States. Farm exports in fiscal year 2014 reached a record $152.5 billion and supported 1 million jobs in the United States.



CommonGround Shares a Farm Perspective on Thanksgiving with Millions of Consumers Nationwide

While Americans are busy gobbling up 46 million turkeys on Thanksgiving Day, many don't stop to think about where the food on their tables comes from. For the average American, Thanksgiving probably includes traveling, relaxing, indulging, football watching and spending time with family. However for farm families, the day probably starts and ends with chores, with a little bit of turkey in between.

The ingredients we use in our meals come from family farmers throughout the nation. These dedicated farm families make our safe, nutritious, not to mention, delicious Thanksgiving meals, and every other meal throughout the year possible.  In the United States 93 percent of the 2.1 million farms are family owned and operated.  And while only 1% of Americans claim farming as their occupation, U.S. farming supports more than 24 million jobs. With Thanksgiving right around the corner, it's the perfect time to hear from the farmers who make this meal possible. Even though grain harvest is wrapping up throughout most of the country, that doesn't mean the year's work is done for farmers.

CommonGround volunteers took the story of American farming, their story, to people across the country through a series of interviews with television and radio stations. Discussing how farmers work all year to grow the foods on Americans' Thanksgiving tables, Julie Kenney and Katie Pratt of Iowa, Kristin Reese of Ohio and Krista Stauffer of Washington opened the barn doors, offering themselves and their fellow CommonGround volunteers as a resource for consumers with questions about where their food comes from and how it is grown.

In a series of interviews, the volunteers helped explain why this Thanksgiving, as families gather to eat a wholesome meal, they should be thankful for a safe and healthy food supply from family farmers. They also shared what the holiday is like on their farms, as well as some of their favorite dishes from their own Thanksgiving family traditions.

Over the course of the morning, the four women took part in 25 interviews, both live and taped, which will reach a national audience through both television and radio.

Many of the stations involved in this tour aired the interviews live, but quite a few others taped the segments to run over the coming weeks. Interviews will air in: Huntsville, Ala.; Fort Meyers, Fla.; Gainesville, Fla.; Tampa, Fla.; Atlanta, Ga.; Rockford, Ill.; Detroit, Mich.; Minneapolis, Minn.; Lincoln, Neb.; New York City, N.Y.; Charlotte, N.C.; Greensboro; N.C.; Cincinnati, Ohio; Toledo, Ohio; Charleston, S.C.; Greenville, S.C.; Tyler, Texas; Green Bay, Wis.; and Casper, Wyo.  Interviews were also conducted with regional Texas radio and the USA Radio Network's "Daybreak USA" program, which reaches a national audience of more than 2.5 million. Additionally, Olthoff provided an interview to CRN Digital Talk Radio's "What's Cookin' Today" show, which reaches a national audience of more than three million.

Video from these interviews will be posted to the National Corn Growers Association's website as available.... www.ncga.com. 

CommonGround is a grass-roots movement to foster conversation among women - on farms and in cities - about where our food comes from. The National Corn Growers Association, the United Soybean Board and their state affiliates developed CommonGround to give farm women the opportunity to engage with consumers through the use of a wide range of activities.



Dairy Situation and Outlook, November 19, 2014
Bob Cropp, University of Wisconsin Cooperative Extension

Milk prices continue to show weakness from their peak back in September. Factors that are pushing milk prices lower include the increase in U.S. milk production, holiday orders by buyers of cheese and butter are about complete, and a continued decline in U.S. dairy exports. USDA’s estimate of U.S. milk production shows October production up 3.8% from a year ago, the result of 0.8 % more milk cows and 2.9% more milk per cow. The September milk production increase was revised upward to 4.2%. While milk production was flat at this time last year, this is a relatively high increase. Of the 23 reporting states 13 had added milk cows from year ago with increases of 32,000 head in Texas, 17,000 in Michigan and 10,000 head in Idaho. Cow numbers were unchanged for California and down 3,000 head in Minnesota and 2,000 head in Wisconsin. Milk cow numbers have increased by 78,000 head since the end of last year. No state had less milk per cow than a year ago.

Milk production increases for October from a year ago were led by Texas 11.6%, Colorado 9.7%, Utah 7.6%, Michigan 7.1% and Kansas 6.9%. Milk production was up 2.7% in California. 5.1% in Idaho, 3.0% in New York, 4.0% in Iowa, 2.8% in Minnesota and 4.0% in South Dakota and2.4% in Wisconsin.

Retail sales of butter and cheese are always a seasonal high during the holidays. Retail buyers need to build inventory for these peak sales by early November. Thus, buyer purchases are now lower resulting in lower wholesale butter and cheese prices.

World milk production continues well above a year ago for major exporters of dairy products, in particular New Zealand, Australia and the EU-28 countries. China has backed off from its very aggressive buying of dairy products on the world market earlier in the year (China was the second largest customer for the U.S.) as they have accumulated stocks of dairy products. The Russia/Ukraine issue where Russia has banned imports from the EU-28 has disrupted EU exports. The result of these factors has been a drop in world dairy product prices by about 50% from earlier in the year putting prices well below U.S. dairy product prices. U.S. dairy exports were setting new record highs the first half of the year and are now experiencing declines. The latest export data for September showed the following exports compared to a year ago: butter down 79%, cheese still 9% higher but new orders declining, nonfat dry milk down 29%, dry whey exports down 13%, whey protein concentrate down 19%, with lactose up 7%.

Stocks of dairy products have been well below year ago levels for butter and relatively tight for cheese. Dairy product production is increasing with more milk and stocks will become less tight. Butter production was still running 1.6% lower than a year ago in September. Compared to September a year ago American type cheese production was 4.0% higher with cheddar production 5.9% higher, and production of all types of cheese up 4.7%. Nonfat dry milk production was 54.1% higher with skim milk powder production 24.5% lower reflecting reduced exports. September 30th stocks of butter were still 37.3% lower than a year ago, American cheese stocks 4.5% lower, total cheese stocks 5.4% lower, but nonfat dry milk stocks 17.9% higher.

Dairy product prices continue to show weakness. CME butter set a record high in September at $3.06 per pound, averaged $2.31 for October, has been around $2 thus far for most of November, but as of the 19th it had fallen to $1.9875. CME cheddar barrels were as high as $2.49 per pound in September, averaged $2.145 for October, and as of November 19th the price was below $2.00 at $1.915. The 40-pound cheddar block price was as high as $2.45 per pound in September, averaged $2.20 for October, and as of November 19th the price was well below $2 at $1.80. Nonfat dry milk which was trading near $1.40 per pound in October is now $1.28 and dry whey which was about $0.61 per pound in October is now about $0.59. We can expect additional weakness in these dairy product prices as we close out this year and head into next year.

These lower dairy product prices will put the November Class III price near $21.75 compared to a record of $24.60 in September. The Class III price may be near $18.55 for December. For the year the Class III price will average near $23.40, about $5.40 higher than the $17.99 average in 2013. The November Class IV price will be near $18.05 compared to its peak of $23.89 back in August, and may be as low as $16.90 for December. The Class IV price will average about $22.10 for the year, about $3.50 higher than the $19.05 average in 2013. The November U.S. All Milk price will be near $23.10 compared to the peak of $25.70 back in September, and may be near $19.95 for December. The U.S. All Milk price will average near $24 for the year, about $4 higher than the $20.05 average for 2013.

As we look into 2015 milk prices will show further weakness, but opinions of the extent of weakness vary considerably. The record milk prices experienced in 2014 will encourage more milk production going into 2015. USDA’s is projecting milk production will increase 3% in 2015 as cows are added and with lower feed costs dairy producers feed for more milk per cow. But, dairy producers appear to be expanding cow numbers rather slowly as replacement numbers are rather tight and of high value, and cow slaughter prices remain high. Dairy producers recognizing milk prices will be lower may be more cautious as well in expanding. So the 3% increase in milk production could be a little on the high side. There is a much uncertainty as to the level of dairy exports for 2015. Milk prices are at a 5 year low in New Zealand and have declined in the EU-18 countries. This may slow the increase in milk production in these major exporters. China could come back stronger in world product purchases by the second half of the year. World dairy product prices could be at their low point and will likely show some strength as we move through the year. But, it appears that U.S. dairy exports will be lower in 2015 than 2014.

The Class III price could be below $18 by January and in the low $17’s February through June. While earlier it looked like the Class III price could stay above $17 for all of 2015, a Class III price in the mid to high $16’s May through June could well happen before showing some strength for the last half of the year. Some are predicting a Class III price below $16 this summer which is possible if the increase in milk production runs a good 3% and exports are weaker. With much lower butter and nonfat dry milk prices the Class IV price could be near $16 by January and below $16 through June with some strengthening thereafter. While milk prices will average considerably lower in 2015, milk prices are very sensitive to small changes in milk production, milk sales and exports making final prices for 2015 in a range of possibilities.



ADM Sues Syngenta Over GE Corn

Archer Daniels Midland Co. sued Syngenta AG over losses the grain trader and processor said it suffered after Syngenta sold genetically engineered corn in the U.S. that had yet to win approval in China.

ADM said Syngenta's push to sell its biotech corn to U.S. farmers, without first securing Chinese import approval, led China to reject shipments of U.S. corn in the past year. That caused "substantial economic losses and damages" for ADM, the Chicago company said in a lawsuit filed in a Louisiana state court.

ADM didn't specify how much the company claims to have lost due to rejected grain shipments and lost sales, though a spokeswoman said they amounted to "tens of millions of dollars in losses and added costs."

A spokesman for Syngenta said the Swiss seed-and-chemical company "believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies."

ADM's lawsuit escalates legal battles over Syngenta's Viptera corn, which the company in 2011 began selling in the U.S., Argentina and Brazil. Commodities trader Cargill Inc. and Trans Coastal Supply Co., another grain exporter, filed suits alleging similar losses in September.

Lawsuits by farmers have been filed in more than 10 states since then, blaming Syngenta for a sharp decline in U.S. corn exports to China this year and lower prices for the grain. ADM estimated that China consumed about 24.5% of the world's corn in 2013.



Cover Crop Report Documents Yield Boost, Soil Benefits and Ag Retailer Roles

For the second year in a row, a national survey of farmers has documented a yield boost from the use of cover crops in corn and soybeans, as well as a wide variety of other benefits. The survey - which was funded by the North Central Region Sustainable Agriculture Research and Education (SARE) program and carried out by the Conservation Technology Information Center (CTIC) - also details the challenges and benefits farmers expect from cover crops, data on the costs of seed and establishment, and insight into how farmers learn to manage cover crops.

In all, 1,924 respondents - both users and non-users of cover crops - completed the survey in the winter of 2013-2014. Of the total, 639 provided data comparing corn yields on similar fields with and without cover crops. They noted an average yield increase of five bushels per acre, or 3.1 percent, on fields that had been planted to cover crops before corn. Comparing yields in soybeans, 583 farmers reported an average boost of two bushels per acre, or 4.3 percent, following cover crops.

Environmental Impacts
Those increases, while significant, are lower than the boost discovered in a similar survey last year by SARE and CTIC, which saw improvements of 11.1 bushels (9 percent) in corn following cover crops and 4.9 bushels (10 percent) of soybeans after cover crops. Rob Myers, Regional Director of Extension Programs for NCR-SARE and an agronomist at the University of Missouri, points out that much of the difference in yield impact between the two years of surveys may be attributed to the drought in 2012, which highlights the moisture-management benefits of cover crops.

The new report also reveals other benefits farmers gain from planting cover crops, including increases in soil organic matter, reduced soil erosion and compaction, improved weed control, the availability of "free" nitrogen through soil fixation by legumes, and others.

Dramatic Growth in Acreage
"These many benefits of cover crops are reflected in the rapidly rising rate of adoption from 2010 to 2013, when cover crop acreage among survey respondents increased by 30 percent per year," says Myers.

Of course, both users and non-users of cover crops recognize that the practice can add challenges to the average crop rotation. Users and non-users alike ranked the time and labor required to plant and manage cover crops as their biggest concern. Establishing the cover crops, seed cost and selecting the right cover crops for their operations also ranked high for both groups of farmers

"The survey reveals a widespread perception among farmers that cover crop seed and seeding costs are high," says Chad Watts, project director for CTIC. "It also shows that the median cost for cover crop seed was $25 per acre. This points to a clear need for detailed research into the economic benefits of cover crops, and the return on investment that they can provide. Such research is currently ongoing - in fact, CTIC is engaged in a USDA-funded study on the economics of cover crops in seven Midwest states right now."

Incentive Surprise
"One of the most surprising findings of the survey was that 63 percent of the cover crop users said they had never received cost-share assistance or payments to grow cover crops," Myers points out. "In fact, only eight percent said they only plant cover crops when they receive financial assistance. Our conclusion is that incentive payments can be very important to some farmers - either to get them started with cover crops or on an ongoing basis - but that the benefits of cover crops become apparent pretty quickly and inspire farmers to continue with the practice."

Landowners also were reported to view cover crops favorably. More than half the cover crop users - 61 percent - said their landowners were very supportive or somewhat supportive of cover crops on rented or tenant-shared acreage.

Ag Retailer Role
The new survey report delves into another new direction, exploring the role of agricultural retailers in supporting cover crops. Farmers said ag retailers can assist most by helping them assess changes in the soil resulting from cover crop use, guiding changes in nutrient management plans to account for cover crops, and providing advice and service for termination. Help with seed selection and custom seeding also ranked high on the lists for both users and non-users of cover crops.

"Ag retailers are widely respected for their agronomic knowledge, and it's clear from this year's survey that farmers are willing to look to them for insight and services related to cover crops," says Myers. "That creates great opportunities for ag retailers to expand their offerings and expertise, and for farmers to tap into local expertise that can help them manage cover crops to their best advantage."

Other Insights Abound
The SARE-CTIC survey features a wide range of other insights about farmers' experience with and perceptions about cover crops. Additional highlights include:
-    Seventy-one percent of the cover crop users seed their own cover crops.
-    Nearly half (48 percent) of the cover crop users apply a herbicide for termination; tillage and choosing species that winter-kill are each employed by about half as many growers (21 percent and 20 percent, respectively).
-    Winter cereals are by far the most popular cover crops, planted by 73 percent of respondents. Legumes and brassicas are each planted by 55 percent of respondents. About one-third (34 percent) of the cover crop users plant a multiple-species mix.
-    Cover crop users say they learn most about cover crop management through trial and error. Local workshops are the second-most popular source of insight, followed by online research and regional meetings.

"The farmers who shared their time and perspective on this survey have done a lot to teach us about on-the-ground perceptions and realities of cover crops, and about the types and sources of information that we can provide to support the adoption of these remarkable tools," says Watts.

The 2013-2014 SARE-CTIC Cover Crop Survey Report is available online at www.sare.org/covercropsurvey.