Monday December 29 Ag News

Ranching for Profitability Series
Gary Stauffer, UNL Extension Educator 

Last year was one for the record books!  Many a sale barn broke record cattle prices. Mother Nature, as usual, was unpredictable. Input prices also continued to creep upward- forage was no exception.

As a cattle producer, you may have questions about what to do next in 2015. Eight meetings will be held across Nebraska focusing on the changing beef industry. 

“To stock or not to stock?”- That is the question.  From buying cows, retaining heifers to breed, or keeping cows longer, can you afford to rebuild your herd? Matt Stockton and Kate Brooks, Nebraska Extension Beef Economists, will discuss “Restocking and Replacing- the Economics of Moving Forward on the Ranch.”

Forage has become a valuable commodity!  With variable weather, forage production can tank and leave you without grass or hay for your cattle. Learn how you can cope with forage losses with risk management programs.  Aaron Berger and Monte Vandeveer, Nebraska Extension Educators, will discuss the kinds, costs, and how these forage programs work, including PRF and LFP.

Jerry Volesky, Nebraska Extension Range Specialist, has been through drought, hail, excessive rains, and blizzards. Volesky understands how variable the production of your pastures can be from one year to the next. He will present “Managing for Variable Range & Pasture Production.”

Figuring out where you are making money and where you might not be with your various enterprises on your operation can be very important to long term profitability and sustainability. Gary Stauffer, Holt/Boyd Extension Educator will conclude the program with “Determining Profitability-Understanding your Unit Costs of Production”.

Please pre-register ahead of time for a meal count at the local extension office.   Cost is $15/person. Sponsorship is provided by the North Central Extension Risk Management Education Center & the USDA National Institute of Food and Agriculture and Nebraska Extension.

Ranching for Profitability Schedule (all times are local):
  *January 5th – Holt County Court House Annex Meeting Room, O’Neill (10 am – 2 pm), 402-336-2760;
  *January 5th – Zion Lutheran Church, Ainsworth (5-9 pm), 402-387-2213;
  *January 6th – Broken Bow Country Club, Broken Bow (10 am – 2 pm), 308-872-6831;
  *January 12th – College Park, Grand Island (10 am -2 pm), 308-236-1235; 
  *January 12th – Brady Community Center, Brady (4:30-9 pm), 308-532-2683;
  *January 13th – Bullseye Building, Mullen (10 am -2 pm), 308-645-2267;
  *January 13th– Peppermill Restaurant, Valentine (4-9 pm), 402-376-1850;
  *January 19th – Kimball Event Center, Kimball (5-9 pm), 308-235-3122.



Grower Services Action Team Focuses on Membership, Leadership, Communications

When members of the National Corn Growers Association's Grower Services Action Team met in St. Louis recently, they focused on the three traditional key areas of focus for the team, three areas where a lot of progress has been seen over the past year: membership, leadership and communications. Going into 2015, the team also sees great potential in these areas.

"Looking at the role our grower members have played in shaping the national dialogue on agriculture, the importance of building and engaging our base cannot be understated," said Tom Haag, a Minnesota corn grower who serves as the team's chairman. "We've seen a lot of success with our programs in the past, and this next year will offer many opportunities to expand our work."

In the area of membership, Haag noted that NCGA reached a milestone in 2014, reaching a membership of more than 42,000 as growers saw the importance of NCGA's work on the new farm bill and in building and defending markets for corn, such as ethanol. The success of a full stable of member benefits and programs like the National Corn Yield Contest have had an impact as well, he said.

In terms of leadership, 2014 saw the first class of the NCGA DuPont New Leaders Program, designed as a gateway to leadership for young farmers, and an opportunity for farming couples to take part in a leadership program together. The second class begins in January with 39 participants from 17 states. At the same time, the Leadership at its Best and Advanced Leadership programs, cosponsored by Syngenta, continue to build informed and involved leaders.

Finally, Haag noted NCGA's success with communications programs continues to grow, especially with its involvement in the Corn Farmers Coalition, which seeks to educate Washington insiders about corn and corn farming; CommonGround, a joint program with the United Soybean Board to develop farm women as spokespersons with their urban and suburban peers; the U.S. Farmers and Ranchers Alliance, a much broader movement to build consumer confidence in today's agriculture; and American Ethanol, an ethanol industry effort to promote ethanol, especially the E15 blend, through a NASCAR sponsorship.

In addition to Haag, grower members of the Grower Services Action Team are Vice Chairwoman Patty Mann, Corn Board Liaison Kevin Skunes, Debbie Borg (Allen, NE), Jayne Dalton, Les Imboden, Larry Mason, Mike Moreland, Ted Mottaz, Gerald Mulder, Danny Nerud and Roger Zysltra. Katie Glick, with Indiana Corn, represents state affiliates and NCGA Director of Development Joe Hodes is the staff lead for the team.



Obama Preparing for Major Push on Free Trade Zone
President Obama will seek to enlist Republicans to partner on a major push on trade deals. The administration is moving aggressively in hopes of wrapping up negotiations by the middle of next year on a 12-nation free-trade pact in the Asia-Pacific region before the politics become even more daunting ahead of the 2016 presidential campaign. The Washington Post reported last week the move will test his willingness to pull away from his own party in pursuit of a legacy-burnishing achievement. Already, fellow Democrats are accusing him of abandoning past promises on trade and potentially undermining his domestic priority of reducing income inequality. At issue is Obama’s support for the proposed Trans-Pacific Partnership (TPP), which would establish the world’s largest free-trade zone. The first test could come next month if the new Congress takes up Trade Promotion Authority, making trade deals strictly an up or down vote to fast-track approval.



NFU Opposes Importation of Meat from Areas with Foot and Mouth Disease
Johnson:  "U.S. Must Retain High Standards for Imports"

National Farmers Union (NFU) President Roger Johnson urged the U.S. not to resume importation of meat from Northern Argentina and Uruguay because of ongoing concerns with Foot and Mouth Disease (FMD), a highly contagious disease that could devastate family farmers and ranchers in the U.S.

“Livestock health is critical to production agriculture and our nation’s ability to provide a safe food supply,” said Johnson in comments submitted today to the Animal and Plant Health Inspection Service (APHIS). “Achieving the necessary means to ensure livestock health is a priority for NFU.”

Johnson noted that NFU supports banning livestock, animal protein products, and meat imports that would jeopardize U.S. efforts to eradicate livestock diseases, including FMD, and that allowing imports of beef from Northern Argentina could potentially conflict with these efforts.

“APHIS acknowledges that Northern Argentina is not considered to be free of FMD,” said Johnson. “In May of 2000, the World Organization for Animal Health designated Argentina as FMD-free without vaccination. Just two months later, FMD outbreaks reappeared, culminating in the epidemic outbreak in 2001. Since then, Argentina has made multiple unsuccessful attempts to eradicate and control FMD, and concealed the outbreaks from the international community for months.”

Johnson pointed out that in addition to health safety risks, serious economic repercussions could result from an outbreak of FMD in the U.S.

“The economic impacts of an FMD outbreak in the U.S. would be tremendous,” noted Johnson. “FMD is highly contagious and has the potential to spread very quickly. Given the rapidity with which FMD spreads, an outbreak would create devastating economic consequences for farmers and ranchers. Recent research has estimated outbreaks in FMD-free countries and zones cause losses of greater than $1.5 billion per year.”

Johnson also noted that in 2001, an outbreak of FMD in the United Kingdom (UK) resulted in the slaughter or burn of nearly 3 million animals. The epidemic was costly both to farmers and the economy; total losses to agriculture and the food chain amounting to roughly £3.1 billion.

“Prior to the 2001 outbreak, the UK had gone 34 years without an outbreak,” said Johnson. “This particular example demonstrates that no country is immune to the devastating impacts of a FMD outbreak, and the utmost precaution should be taken when evaluating changes in import status from countries with a recent history of FMD.

“U.S. farmers and ranchers are known throughout the world for the high standards to which their livestock herds are raised. Our long-standing disease prevention efforts have thus far been successful.”



Rabobank Issues Fertilizer Outlook Report

Rabobank has issued a new report on the global fertilizer industry, looking at issues of price, supply and demand in key international markets. In the report, published by Rabobank's Food & Agribusiness Research and Advisory group, the bank says that as the fertilizer supply appears set to outweigh demand globally, the forecast for Q1 2015 looks rather cloudy in terms of pricing. While spring demand in the Northern Hemisphere will prevent prices from slipping significantly, Rabobank believes that lower farmer margins will incent farmers to be more prudent in fertilizer application, but a strong demand destruction is unlikely.

An increase in urea supply in the first quarter of 2015 will set the tone for global urea prices. Supply is likely to outstrip demand in Q1 2015 as rumored brand new capacity in Algeria and Egypt comes on-line and the just-announced change in Chinese export tariff is likely to boost urea availability. China will replace its tax seasons by a single flat tariff of 80 CNY/ton for urea.

"Chinese urea export availability could improve by another 10-15% in FY 2015, as China seems very close to abolishing its policy of separate tax windows," says Rabobank analyst Suzanne Pera. "This would amount to 11.6- -12.1 million tons based for FY 2015."

However, spring demand for urea in the Northern Hemisphere could prevent prices from slipping significantly, providing a floor for the global urea market. The Southern Hemisphere is mostly out of season, and demand is largely covered.

Spring demand in the Northern Hemisphere would normally provide upside in phosphates as well when combined with supply management. However, the new Chinese tax policy of 100 CNY/ton for DAP, will provide downside, as availability of phosphates would improve if prices decline significantly, some buyers might be inclined to lock in prices.

Meanwhile, the potash market is awaiting the outcome of negotiations between suppliers and China for the Q1 2015 price direction. Continued pressure on farmer margins in the U.S. and Europe is likely to drive spring potash applications lower by as much as 5%. Relatively high inventories and downward price pressure on grains and oilseeds will put a lid on further price increases.



Rabbobank: Global Beef Supplies to Remain Tight in 2015

As what many have expected, Rabbobank is calling for global beef supplies to remain tight through 2015. In its quarterly outlook for the first quarter of 2015, Rabbobank forecast renewed price strength and tight supplies in the first quarter of 2015. Food Business News reports an improving economy and a strong dollar have positioned the United States as a major influence on global beef market trends. Rabbobank’s Angus Gidley-Baird said “The U.S. continues to be the driver in the global beef market with constrained supply and strong demand keeping prices high.” Baird said Rabbobank is keeping a close eye on the price of oil and the Russian Ruble given Russia’s status as the world’s largest beef importer

The gap between premium and ground beef markets will continue to widen. Prices for prime beef will remain high in 2015, while lackluster demand and growing supplies of dairy-based beef will pressure prices for ground beef. Strong international demand for beef from Brazil and New Zealand will likely carryover into 2015 while, in China, retail prices for beef are expected to remain stable. Meanwhile, Australia continues to report record cattle slaughter Rabobank said the new year will be critical for Canada, as the beef industry decides whether it starts herd rebuilding or continues to downsize the industry. In Mexico, low availability of cattle is partially offset by increased cattle weights.



Rabobank Forecasts Dairy Prices Will Continue Downward Trend in Early 2015

Global dairy prices fell in the fourth quarter of 2014 and will continue on a downward trend in early 2015, according to the A4 Dairy Quarterly published by Rabobank.

The report found that even though prices fell in late 2014, the rate of decline did decelerate somewhat compared to third-quarter prices. Prices of powders were down about 15% on late September levels, and cheese prices were only about half that loss. However, butter prices were relatively unchanged.

Although some stabilization occurred by December, the value of the U.S. dollar rose by 5% in Q4, which also contributed to the decreases in U.S. dairy prices, the report said.

Supplies in the international market have been boosted by milk production growth in export regions that surpassed weak local consumption in the last nine months of 2014. Rabobank reported that trade growth was up 15% year on year, as low prices cleared huge volumes.

Rabobank estimated that U.S. wholesale prices will fall further in early 2015, although local markets lagging behind offshore markets may cause price recovery to be delayed.

The report predicted that the market will gradually tighten up in the first six months of 2015. However, a weak Southern Hemisphere production peak in 2015 could turn things around and lead to price recovery in international markets in late 2015.

Rabobank head dairy analyst Tim Hunt said that the low prices helped to clear the market which was still dealing with strong supply growth, rising value of the U.S. dollar, a weak economic environment and reduced buying from China and Russia. China's incoming shipments were down almost 50% in October from the same time last year. Also, Russia's ban on imports from key countries resulted in buyers from second- and third-tier importers such as Southeast Asia, the Middle East and North Africa waiting for prices to decrease 30-50% before buying.

Rabobank predicts that while such markets are taking advantage of discount product, world dairy suppliers will need to respond quickly to price decreases in order to avoid stock accumulation.

Some improvement in demand in the U.S. and the European Union should reduce stocks available to the international market in the first half of 2015, but Rabobank stated that this will likely be insufficient to cause any amount of price recovery, due to the continuing Russian trade ban and decreasing Chinese purchases since last year.



Oil Settles Lower After Early Rally

An early rally for New York Mercantile Exchange oil futures faded in midsession, with the oil complex ending floor trading lower Monday after traders realized the oil market remains well supplied despite problems in Libya while new worries about Europe stoked demand concerns.

“Lower Libyan output does make it more likely that OPEC overall production will be at or even somewhat below the 30.0 million bpd official quota, but a first half 2015 supply/demand surplus may still be on the order of 1.5 million bpd,” said analyst Tim Evans at Citi Futures in New York.

He added, “U.S. inventory data for last week seems unlikely to provide much support for prices either, with the early [forecasts] pointing to builds of 900,000 bbl in crude stocks, 2.5 million bbls in distillate inventories, and 2.0 million bbls in gasoline stocks for the week ended December 26.”

At settlement, NYMEX February WTI crude futures slumped $1.12 to $53.61 bbl, off a five-year, eight-month spot low at $52.90. February ICE Brent declined $1.57 to a $57.88 bbl settlement, off a five-year, eight-month spot low at $57.37.



Caterpillar Celebrates 85 Years on the New York Stock Exchange

On December 22nd, 2014, Caterpillar Inc. Chairman and CEO Doug Oberhelman rang the opening bell on the New York Stock Exchange (NYSE) to mark the 85th anniversary of the company’s listing on the NYSE, considered the world’s foremost securities marketplace. Of the approximately 3,200 companies listed on the NYSE, Caterpillar (NYSE: CAT) is among only 2 percent that have been listed for 85 years or more.

“Not only are we celebrating 85 years on the NYSE this year, but next year we will also celebrate the 90th anniversary of Caterpillar as a company,” Oberhelman said. “Both milestones are a testament to the strength of our global brand, our dedication to customers and strong reputation with stockholders for financial strength and performance through the years. In 2014, the strength of our balance sheet and strong cash flow positioned Caterpillar to repurchase $4.2 billion in stock and to pay $1.6 billion in dividends. Caterpillar has paid a cash dividend every year since the company was formed in 1925 and has paid a quarterly dividend since 1933. We are proud of delivering that consistency and value over the decades.”

Caterpillar is also giving Wall Street traders and New York City the opportunity for an up-close look at Cat® machines used in a variety of industries. On display in front of the NYSE are a mixer truck, wheel loader, skid steer loader and backhoe loader.

Listing on the NYSE is a globally recognized signal of corporate strength and leadership, reserved for companies that meet the NYSE’s stringent requirements for income, market capitalization, cash flow and ethical practice.

Caterpillar Inc. - 85 Years on the New York Stock Exchange
-    The company listed on December 2, 1929, under the name Caterpillar Tractor Company. In 1986, the name was changed to Caterpillar Inc.
-    In May 1991, Caterpillar became one of 30 companies in the Dow Jones Industrial Average.
-    Caterpillar sales for 1929 were $52 million and profit was $12 million.
-    An investor buying one share of Caterpillar Tractor Company at $56.25 in 1929 would have an investment worth about $40,000* today, accounting for share price growth, stock splits and dividends over the past 85 years. (*As calculated at close December 2, 2014)
-    Caterpillar’s total shareholder return has sustained an annual compounded growth rate of 8 percent since the company listed in 1929.
-    On December 2, 1929, the first listing day, 1,882,240 shares were outstanding and 400 shares of Caterpillar stock were traded. On December 2, 2014, there were more than 605,000,000 shares outstanding and about 4 million shares traded.