Wednesday December 3 Ag News

What did it cost you to produce a calf this year? What will it cost you in 2015?
Aaron Berger, Nebraska Extension Educator

2014 will go down in the record books as one where record profits occurred for many in the business of producing weaned calves. Was your cow-calf business profitable this year? What did it cost you to produce a pound of weaned calf? What do you project it will cost in 2015?

Unit cost of production (UCOP) is a value based on a relationship in production or manufacturing between costs and units of product made or produced.

Unit Cost of Production = Costs / Units Produced

The relationship between the numerator (Costs) and the denominator (Units Produced) is what drives the UCOP value. The power of the UCOP ratio for cow-calf producers is that everything involved in the production of a pound of calf is represented in the numerator or denominator of the equation. For example, if a producer wants to buy a pickup that will be used in the production of calves, he can estimate how the purchase of that new pickup will affect his UCOP in terms of cost per pound of calf produced. The same thing goes for the purchase of a new bull. Evaluating the purchase of a bull in light of how many estimated pounds of calf that bull will produce in relation to his cost can give insight into what a producer might be willing to spend.

What did it cost to produce a pound of weaned calf this year? What is it projected to cost next year? The old adage “you can’t effectively manage what you don’t measure” is true in relation to managing the cow-calf enterprise. The first step in calculating UCOP is to have production and financial records. These records do not have to be complicated, but they need to be accurate and thorough. If current management and information systems don’t provide the data to run this type of analysis, consider changes that will provide the records needed.

Unit Costs of Production takes into account both product produced and input costs. Knowing UCOP allows a manager to look forward utilizing both present and projected input costs with production numbers to make informed decisions. Cow-calf producers who know UCOP numbers for their operation’s enterprises and understand the interaction between input costs and production can implement strategies to effectively manage resources to meet business and personal goals.

Table 1 (http://go.unl.edu/zh2r) shows estimated costs to produce a weaned calf from a sample central Nebraska ranch. In this example, the cowherd is static with a 16% replacement rate. The number of bred heifers entering the herd is equal to the number of cows that are culled or lost due to death loss. All costs including labor, depreciation, and opportunity cost on cowherd value is included in this example.



THE AREA'S LARGEST AGRICULTURE EXPOSITION IS COMING BACK TO THE CENTURYLINK CENTER-OMAHA March 11-12, 2015

     One of the Midwest's premier indoor farm events, the TRIUMPH OF AGRICULTURE EXPOSITION will be held March 11-12, 2015 at the CenturyLink Center-Omaha, 10th and Capitol Avenue, just off I-480.  The 49th Annual Farm and Ranch Machinery Show will once again be filled with the latest agricultural innovations, equipment and supplies with more than 900 exhibits for farmers, ranchers, and their wives to visit all on one level of over 200,000 square feet in the state-of-the-art  CenturyLink Center-Omaha.

     "It's an excellent opportunity to see all types of Short-Line farm equipment, new products, labor and time saving ideas all under one roof," says Bob Mancuso, Sr., the Show's Producer.  "The Triumph of Ag Expo is the best place for farmers to find answers for what they do control while taking advantage of the new technologies at the Expo - ranging from machinery to new plant varieties that are available."  The Farm Show is open 9 AM to 4 PM on Wed and 9 AM to 3 PM on Thurs.  Advance free admission tickets can be obtained from Exhibitors, County Extension agents, farm machinery and equipment dealers or at the CenturyLink Center-Omaha door.  This is an ideal time for area Farm Operators to find ways to improve productivity and increase profits, before spring field work begins.

     Brien McCready from John Deere and A & M Green Power and Show Councilman says he's looking for a great Show  at the CenturyLink Center Omaha and says, "The Triumph of Ag Expo is always packed with lots of new improvements and helpful information." At no other time this spring will area Farm Operators be able to see this much farm equipment and technology on display.  The Triumph of Ag Expo offers visitors a hands-on experience with continuous demonstrations so those attending will be able to compare and evaluate quickly and conveniently, all under one roof, in one location and on one level with over 4,500 on-site parking available.

     Regarded as one of the largest indoor diversified short-line farm machinery shows, Ben Hellbusch, from Busch Equipment of Columbus, Nebraska and Council Board Member said, "The Expo has something for every kind of farm operation," including tillage equipment, planters, monitor and control systems, soil testing equipment, mowers, cattle chutes, augers, fertilizers, various seed hybrids, feeders, tanks and pumps, hay moving and handling equipment, plows, combines, computers and software, tractors, and many more agricultural products and services for today's farmers and ranchers.
   
      Bob Mancuso, Jr., Show Director, said if you are interested in agriculture and farming, this year’s Expo is the place to be on March 11-12, 2015 .  In addition to all of the latest equipment, products, and services - there will be seminars throughout the Show, craft items and displays, antique farm tractors and equipment, and special programs.  The Triumph of Ag Expo is a charter member of the North American Farm Show Council – the Top 25 shows in North America!



County Farm Bureaus Show Progress, Innovation in 2014 Through New Iowa Farm Bureau Share Program

To kick off Iowa Farm Bureau Week, the Iowa Farm Bureau Federation (IFBF) is celebrating the innovation and achievements of 19 county Farm Bureaus who participated in a new IFBF Share Program launched earlier in the year.          

“IFBF developed the Share Program this year to encourage county Farm Bureaus to engage in activities that support conservation and water quality, education, and community revitalization,” said IFBF President Craig Hill. “Farm Bureau is unique in that we have a presence in every county in Iowa, and it’s important to our members to ensure the vitality of agriculture and those communities for the long-term. The Share Program is one tool the counties can use to help them meet important goals at the local level.”          

“The projects these counties conducted this year range in size but the goals are the same – to bring measurable progress to rural Iowa,” Hill continued. “One Share project started a three-year push to make measurable soil erosion and sedimentation reductions in the Middle Nodaway River; other projects included cover crop demonstrations in Cherokee, Decatur and Hamilton counties.”          

Additional efforts focused on utilizing updated technology tools, such as iPads, for conducting agriculture education programs in Cerro Gordo, Kossuth, Winnebago, and Worth county schools to help young Iowans understand the role agriculture and farming plays now and in their futures.  A Union county project helped a volunteer fire department secure an ATV to aid in rural rescues in remote terrain.  “This is measureable work - vital work - that will benefit communities today and well into the future; we applaud their great work,” said Hill.             

The IFBF Share Program will continue in 2015, with a focus on nurturing issues and projects important to Farm Bureau, including the promotion of new conservation and water quality projects, agriculture education, rural and agriculture entrepreneurship and farm safety.  



NORTHEY REQUESTS $7.5 MILLION FOR WATER QUALITY

Iowa Secretary of Agriculture Bill Northey today requested $7.5 million for the Iowa Water Quality Initiative in a public meeting with Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds as part of the Iowa Department of Agriculture and Land Stewardship’s fiscal 2016 and fiscal 2017 budget requests. This request puts funding at the level of support sought for the soil conservation cost share program, or Iowa Financial Incentives Program (IFIP), over the next two years.

“The strong support from the Governor, Lt. Governor and Legislature for the Water Quality Initiative has been critically important to the exciting progress we have made.  This request is designed to allow us to continue to build on the initiative.  Funding water quality and soil conservation efforts at equal levels will allow us to continue the exciting work taking place in both of these critically important programs,” Northey said.

The Department received $4.4 million for the current fiscal year for the Water Quality Initiative.  The $7.5 million per year requested would allow the Department to continue offering cost share statewide to farmers trying new water quality practices, expand work in targeted watersheds to achieve measurable water quality improvements, and develop new programs to help engage all Iowans in water quality efforts.

Northey also requested $7.5 million for conservation cost share for each of the next two fiscal years.  For over four decades, Iowa’s soil conservation cost share program has encouraged the adoption of conservation structures and practices to protect and preserve our state’s natural resources.  Last year alone, the state’s $9.5 million investment generated $13 million in matching funds from Iowa farmers and land owners to support conservation practices.

In the meeting with Branstad, Northey also requested $1.92 million in both fiscal 2016 and 2017 to support the closure of seventeen additional agriculture drainage wells in the state.

“I appreciate the opportunity to outline this proposal for the Governor and Lt. Governor and I look forward to working with them and the Legislature to keep Iowa’s conservation efforts moving forward,” Northey said.



With Passage of Tax Extenders Stopgap, ASA Callsfor Longer-Term Solution

In response to the passage of a short-term extension of several key tax credits by the House of Representatives today, the American Soybean Association (ASA) expressed both its appreciation for a fix in the near term, and disappointment in the absence of a longer-term solution. ASA President and Iowa farmer Ray Gaesser used the opportunity to call on Congress to redouble its efforts to pass a longer-term tax extenders package.

“ASA first and foremost supports a long-term extension of several of the items included in today’s short-term fix. These initiatives include the dollar-per-gallon biodiesel tax credit, expensing for farm equipment and infrastructure under the Section 179 expensing provision, and bonus depreciation on farm assets. Such an approach provides greater certainty and a more stable climate for the farmers and producers who make use of these programs, and we were very disappointed that agreement was not reached on a broader measure. That said, we support the House’s passage of their short-term extension in the absence of a more permanent solution. While it remains only a stopgap measure, we hope that the Senate will take up and pass it quickly. At that point, we urge both chambers to join together and tackle the work of extending these critical tax incentives for the long term.”



EIA: Ethanol Output Down

Domestic ethanol supply increased while demand and output both declined during the week-ended Nov. 28, the Energy Information Administration reported at midmorning Wednesday.

EIA showed ethanol supply increased 200,000 bbl to 17.3 million bbl, with the build taking place in the Midwest PADD 2, where inventory totaled 5.9 million bbl on Nov. 28. Inventory was unchanged in the remaining four PAD districts.

U.S. ethanol supply is 2.2 million bbl higher than during the comparable year-ago period while down 2.0 million bbl from the same week in 2012.

The supply build came despite a 20,000 bpd drop off in output from U.S. ethanol plants to 962,000 bpd, albeit the decline in production came from a record high. During the four weeks through Nov. 28, U.S. ethanol output averaged 965,000 bpd, 47,000 bpd or 5.1% higher than during the same four weeks in 2013.

Refiner and blender net inputs of ethanol, a proxy for ethanol demand, slid 18,000 bpd to 856,000 bpd. Inputs averaged 861,000 bpd during the four weeks ended Nov. 28, 1.3% greater than during the comparable year-ago period.

Implied gasoline demand surged 170,000 bpd to 9.425 million bpd, a three-month high, during the week reviewed, which included three of the five travel days for the Thanksgiving Day holiday weekend. It was the second highest weekly demand rate of 2014, and marked the fifth consecutive week in which implied demand topped 9.0 million bpd, an occurrence that last took place during the 2013 summer driving season.



E15 Debuts in Florida
Today, Protec Fuel will begin to offer E15 in Florida at retail stations in Ft. Myers and Sarasota. E15 (15 percent ethanol) is approved by the Environmental Protection Agency (EPA) for use in vehicles 2001 and newer. In addition to E15, consumers will also be able to purchase E85 (85 percent ethanol) at these stations for use in flex-fuel vehicles. The retail stations are operated by Mid-State Energy.

“Floridians in the Sunshine State certainly have something to smile about today as they now have another choice at the pump,” stated Robert White, vice president of industry relations at the Renewable Fuels Association. “It is exciting to see E15 continue its expansion to the East Coast and it is my hope that additional states in the South and East that don’t currently offer E15 will follow Florida’s example and begin offering low-cost E15 to their consumers.”

“Protec Fuel is proud to be at the forefront of E15 expansion and is excited to bring E15 to Florida,” said Todd Garner, managing partner and CEO of Protec Fuel. “Drivers deserve options. They deserve access to low-cost fuel. E15 will certainly be a welcome option down here in Florida.”

The Renewable Fuels Association worked with the Florida Department of Agriculture and Consumer Services for more than two years to overcome regulatory barriers that hindered the sale of E15 in Florida.



Science Denial and Today’s Food Consumer - New CFI Research Cracks the Code to Informed Decision Making

Overwhelming scientific consensus tells us that genetically modified foods are safe and that humans contribute more to antibiotic resistance than animals. Yet consumer skepticism about these and other issues is widespread, leaving those dedicated to improving lives through science-based technology and innovation asking, “Science says it’s so, so why is there still debate?”

“Cracking the Code on Food Issues: Insights from Moms, Millennials and Foodies,” the new consumer trust research from The Center for Food Integrity (CFI), provides a roadmap for those in today’s food system to make complex, technical and controversial information relevant and meaningful to the decision-making process of today’s consumer.  

“This research provides guidance to the food system for overcoming the many communication barriers that keep consumers from integrating science-based information into their decisions,” said Charlie Arnot, CFI CEO. “The food system can use CFI’s new models developed through this research as a guide to connect with consumers, especially moms, millennials and foodies, but it will require communicators to embrace a new approach.” 

A key takeaway from the research is how important food issues are to moms, millennials and foodies. They help define who they are as people and shape their cultural identities. Foodies, in particular, express a higher level of concern about food-related topics than any other segment. Because these issues are meaningful and relevant to each of these groups, how technical and scientific information is introduced to them is crucial. By following the approach outlined in the research, we can find new ways to encourage informed decision-making.

“I hope all of those who dedicate their lives to technology and innovation that benefits society will incorporate these strategies from CFI’s latest research to assure that the value of their work will be recognized and given proper consideration by those whose welfare it can improve,” said Dan Kahan, Elizabeth K. Dollard Professor of Law and Professor of Psychology at Yale Law School and member of the Yale Cultural Cognition Project, which focuses on how cultural values shape public risk perceptions and related policy beliefs.

The 2014 CFI web-based survey was completed by 2,005 respondents who reflect the general U.S. consumer population. To provide deeper insights into moms, millennials and foodies, those groups driving consumer thought on key food issues, the results were segmented into the three groups.

Additionally, using scenarios on the topics of genetically modified ingredients in food and antibiotic use in animal agriculture, the survey tested three voices: a Mom Scientist, a Federal Government Scientist and a Peer “who shares my interest about food.”

After reading information about the two topics by each of the three voices, trust in the Mom Scientist and Government Scientist remained strong while the Peer lost trust. This indicates that once shared values have been established, having technical expertise and a credential build credibility when communicating technical information.

Further, the research also revealed respondents’ trusted sources for food system information. Websites rank highest for moms, millennials and foodies. The second choice for moms is local television stations, while millennials and foodies prefer friends (not online). Food-specific TV programs and networks are important sources for foodies.  

Since 2007, CFI has conducted annual consumer trust research to track trends and attitudes, and provide insights and guidance to those in agriculture and food on how to best engage today’s increasingly skeptical consumer.

To download the 2014 CFI Consumer Trust Research report or learn more, visit www.foodintegrity.org. 



Rabobank AGri commodity market outlook for 2015

Rabobank has published its outlook for the global agri commodity markets in 2015, looking at issues of demand, supply and pricing across international agri commodities, and forecasting a 12-month price outlook for 12 major agri commodities.   (chart below)
In the report, the bank’s Agri Commodities Markets Research analysts say that fundamentals in the agri commodity markets appear more balanced through 2015, but they expect narrower trading ranges for many commodities versus 2014. On the demand side, growth has slowed in recent years. However, lower price levels should now encourage consumption growth, which will support prices.  Rabobank says key variables to watch in the year ahead are U.S. dollar strength, uncertain Chinese demand growth, slowing biofuel demand, and oil price weakness.

Stefan Vogel, global head of Rabobank Agri Commodities Markets Research, said, “2015 will be another interesting year for agri commodities. Macro drivers remain very much in play and price swings from supply and demand shocks are still likely, given that the stocks for most commodities are not yet at levels necessary to provide an adequate buffer.”

The pace of world economic growth has been disappointing during 2014, particularly in the Eurozone where counter sanctions from Russia have hindered economic recovery.  Rabobank says that the UK and the U.S. are the bright spots for 2015, but their pace of expansion will be tempered by slow growth elsewhere.  Significantly, in 2015 Rabobank expects a downward revision of China’s 7.5% annual growth rate.

Rabobank says farmer selling and planting decisions, global demand and weather-related production risks remain key drivers through 2015. Assuming normal growing conditions, moderate increases in demand will allow stocks to build for most commodities through 2015.

However, the projected lower price levels through 2015 also provide a great incentive for consumption to exceed the forecast levels. In particular, China’s import demand will continue to be one of the most important variables for many agri commodity markets.

On the supply side, weather-related production abnormalities will impact agri commodity prices. The weather in 2014 was somewhat of an anomaly for agri commodity production, with favorable to ideal growing-season conditions experienced across most regions driving bumper crops across commodities. The only exception was persistent drought conditions across central and southeast Brazil and the east coast of Australia. Despite the higher beginning stocks in 2015, weather threats, including risk of a weak-to-moderate El Nino, could cause prices to diverge from our base case.



Appleton Joins NCGA Public Policy Department

The National Corn Growers Association welcomes Brooke Appleton as director of public policy and political strategy. Appleton brings an excellent combination of experience on the Hill, strong analytical skills and a production agriculture background. In this new position, she will handle transportation issues, Title II of the farm bill and other lobbying duties. Additionally, she will coordinate the efforts of the NCGA lobbying staff, St. Louis-based grassroots program, state associations and the NCGA CornPAC while building and maintaining strategic alliances in Washington.

"Brooke is an incredibly valuable addition to our team, and we are excited utilizing her unique skillset in an innovative manner," said NCGA Vice President of Public Policy Jon Doggett. "She already has a wealth of experience interacting with the many stakeholders necessary to ensure the organization's continued success. She will play a central role in shaping a forward-facing, cohesive strategy to address the many upcoming challenges farmers will face."

Appleton most recently worked for the National Association of Wheat Growers as the director of government affairs for risk management. Previously, she also served on the staff of the House Committee on Small Business and in the office of Congressman Sam Graves of Missouri as a legislative assistant. She holds a Bachelor of Science in agribusiness management from the University of Missouri and has also completed course work at the Czech University of Agriculture in Prague.



USDA Dairy Product Production - October 2014 Highlights

Total cheese output (excluding cottage cheese) was 977 million pounds, 2.3 percent above October 2013 and 3.5 percent above September 2014.  Italian type cheese production totaled 421 million pounds, 2.9 percent above October 2013 and 1.2 percent above September 2014.  American type cheese production totaled 383 million pounds, 3.2 percent above October 2013 and 5.8 percent above September 2014.  Butter production was 148 million pounds, 1.5 percent above October 2013 and 13.8 percent above September 2014.

Dry milk powders (comparisons with October 2013)
Nonfat dry milk, human - 132 million pounds, up 54.1 percent.
Skim milk powders - 41.1 million pounds, down 34.1 percent.

Whey products (comparisons with October 2013)
Dry whey, total - 70.6 million pounds, down 1.2 percent.
Lactose, human and animal - 97.2 million pounds, up 9.0 percent.
Whey protein concentrate, total - 46.3 million pounds, up 1.7 percent.

Frozen products (comparisons with October 2013)
Ice cream, regular (hard) - 60.4 million gallons, down 7.5 percent.
Ice cream, lowfat (total) - 30.6 million gallons, up 1.7 percent.
Sherbet (hard) - 3.03 million gallons, down 7.3 percent.
Frozen yogurt (total) - 4.66 million gallons, down 17.9 percent.



Coca-Cola Enters Premium Milk Market

After conquering the soda industry, Coca-Cola has set its sights on a new market: milk.

Beginning in December, the company will debut Fairlife, a premium, filtered, lactose-free milk, Business Insider reported. Currently, Fairlife is only available in select markets, but will soon be available nationwide, reports Oregon Live.

"The milk is made on a sustainable dairy with fully-sustainable high care processes with animals," Sandy Douglas, global chief customer officer and president of Coca-Cola North America, said at the Morgan Stanley Global Consumer Conference last week.

But what sets it apart from the milk you currently drink is the "proprietary milk filtering process" which increases protein by 50 percent, lowers sugar content by 30 percent and removes lactose, Douglas explained.

"It's basically the premiumisation of milk...and we'll charge twice as much for it as the milk we (sic) used to buying in a jug." Douglas said.

The company plans to invest in the "milk business" for the next several years and says Fairlife will eventually "rain money."