Thursday January 15 Ag News

Rural Mainstreet Index Remains Weak for January: Cash Farmland Rents Expected to Fall by 16 Percent in 2015

The Creighton University Rural Mainstreet Index for January rose slightly from December’s weak reading according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.   

Overall: The Rural Mainstreet Index (RMI), which ranges between 0 and 100, was 50.9 in January, up from December’s 50.0.

“Lower energy and grain prices along with weaker exports, continue to restrain growth in the rural economy,” said Ernie Goss, Ph.D., Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Lower corn and fuel prices have yet to impact ethanol producers according to bank CEOs. More than 71 percent reported no change in production for ethanol firms in their area. Only 14.4 percent indicated reduced ethanol production while 14 percent indicated ethanol production was higher for local ethanol firms.

Farming and ranching: The farmland and ranchland-price index for January advanced to a weak 39.4 from December’s 38.6. “Much weaker crop prices continue to take air out of the bubble in agricultural land prices. This is the 14th straight month the index has moved below growth neutral,” said Goss.

On average, bank CEOs expect 2015 cash rents for farmland to decline to $214 per acre, down significantly from last year’s $254.

The January farm-equipment sales index expanded to 29.5 from 23.7 in December.  The index has been below growth neutral for 18 straight months. “Farmers have become very cautious regarding equipment purchases even though they have not changed their spending on seed and chemicals,” said Goss.

Confidence: The confidence index, which reflects expectations for the economy six months out, advanced slightly to 43.6 from 42.5 in December. “Much weaker crop prices and declines in energy prices have negatively affected the outlook of bank CEOs in energy and agriculture dependent portions of the region,” reported Goss.

Nebraska: The Nebraska RMI for January advanced to 49.0 from 48.8 in December. The state’s farmland-price index expanded to 34.0 from 32.9 in December. Nebraska’s new-hiring index sank to 47.9 from December’s 49.7.  Larry Rogers, executive vice-president of First Bank of Utica in Utica, Neb., said “It is hard to understand how farmland prices are staying so strong, but around here they are. We are in the heart of seedcorn raising territory.” Nebraska Rural Mainstreet job growth for the past 12 months was 0.1 percent.

Iowa: The January RMI for Iowa climbed to 51.6 from December’s 48.6. The state’s farmland-price index for January expanded to 38.7 from 35.1 in December. Iowa’s new-hiring index for January rose slightly to 51.7 from December’s 51.5. Iowa Rural Mainstreet job growth for the past 12 months was 2.1 percent

Each month, community bank presidents and CEOs in nonurban, agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included. The survey is supported by a grant from Security State Bank in Ansley, Neb.

This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.



Looking Ahead to the 2015 NE FFA Convention
Stacey Agnew, Executive Director, NE FFA Foundation

It's time to mark your calendars for the 2015 State FFA Convention!

On April 8, over 4,000 FFA members, parents, advisors, sponsors and guests will flood downtown Lincoln for the 87th Annual Nebraska FFA State Convention. We'd love to have you join us as we celebrate student accomplishments and support these future leaders in the ag industry.

If you can join us here in Lincoln, I'd also encourage you to read below for information on serving as a volunteer judge. This is a great way for you to interact with FFA members and learn more about the talent of members across the state. Today is the last day to volunteer, so please take a minute to sign up on the link below.

Finally, I am so excited that the State FFA Officer Team has announced this year's theme for State Convention - Live a Legacy. Students will be learning all about how to live a legacy of growth, investment, services, excellence, purpose, dedication and vision. I'm excited to see the impact this lesson has on our young leaders.

I hope to see you in Lincoln on April 8-10!



Higher Protein Content Boosts Value of Crop

Farmers have often heard that higher-quality soybeans could generate more value. Now, a new soy-checkoff-funded study shows how much more.

The price of soybeans is driven by the combined value of soybean meal, oil and hulls, a measurement known as the estimated processed value (EPV). The study, conducted by Centrec Consulting Group LLC, shows how EPV increases when farmers raise the protein content in their soybeans. In fact, increasing protein content by 1 percentage point, when yield and oil levels remain the same, increases a crop’s value per acre.

“Higher-quality soybean meal is a win-win for both the soybean farmer and livestock and poultry producers,” says Laura Foell, chair of the United Soybean Board’s Meal Action Team and a soybean farmer from Schaller, Iowa. “Farmers can provide animal ag with the quality of feed the industry demands, and the value farmers get in return will rise.”

The checkoff conducted the study in 13 states where EPV increased by between $7.70 and $12.96 per acre, depending on the state. The state-by-state increases are as follows:

•    Illinois: $11.16
•    Indiana: $10.62
•    Iowa: $12.33
•    Kansas: $7.70
•    Kentucky: $10.00
•    Michigan: $8.83
•    Minnesota: $12.43
•    Missouri: $9.07
•    Nebraska: $12.96
•    North Dakota: $10.81
•    Ohio: $9.25
•    South Dakota: $11.35
•    Wisconsin: $11.26

Farmers in regions with higher-quality soybeans receive better prices than those in areas with lower protein content. That is because higher-quality soybeans create more demand. That brings processors more value and allows them to pay more to farmers. Seed selection is the key to growing soybeans that are high in quality. Farmers should ask their seed dealer or visit www.GrowSoybeanValue.com to find varieties that will produce greater protein without sacrificing yield.



Informa Sees Nearly Equal Acreage

Private analytical firm Informa Economics expects farmers to plant nearly equal corn and soybean acres in 2015 at 88.6 million for corn and 88 million for soybeans.

The corn estimate is nearly 2 million acres lower than the year prior while the soybean estimate is 4.3 million acres higher. However, corn acres shifted higher and soybeans lower than Informa's report last December.

Informa's latest acreage report is based on a survey of producers conducted in early January. Informa's report noted that corn's implied "net revenue premium to soybeans for the 2015 season is similar to that of 2014 at this time; however, it is much lower compared with years prior."

Regionally, the Western Corn Belt is expected to reduce corn area by 1 million acres from 2014 and expand soybean acreage by 2.2 million. Farmers in the Eastern Corn Belt are expected to 750,000 fewer acres of corn while increasing soybean plantings by more than 1 million acres.

Informa expects double-crop soybean acreage to decline nearly 400,000 acres from last year, totaling 5.4 million acres due to lower winter wheat acres in Southern states.

As for production possibilities, using a trend-type yield and average abandonment, Informa thinks farmers could grow 13.5 billion bushels of corn in 2015 with an average yield of 165.9 bushels per acre.

Informa estimates the soybean crop at 3.9 bb, down 44 million bushels from 2014, using a yield estimate of 44.9 bpa, down 2.9 bpa.

All wheat acreage was pegged at 54.8 ma, which would be 2 million less than in 2014. Informa incorporated USDA's Winter Wheat Seedings estimates into its latest report, pinning hard red winter wheat acreage at 29.5 million acres, soft red winter wheat at 7.5 million acres and white winter wheat at 3.5 million acres.

Informa forecasts that farmers will cut spring wheat acreage by 629,000 acres. Durum acres, at 2 million, are 573,000 acres above last year.



U.S. Biodiesel Slumps in 2014 Amid Policy Uncertainty

The U.S. biodiesel market shrunk in 2014 amid policy uncertainty in Washington that destabilized the industry and caused many biodiesel plants to shut down or reduce production.

According to EPA data released Thursday, total U.S. biodiesel consumption fell to 1.75 billion gallons for the year, down slightly from nearly 1.8 billion gallons in 2013. The downturn came as the Obama Administration failed to finalize biodiesel volumes under the Renewable Fuel Standard (RFS) and Congress allowed the biodiesel tax incentive to lapse at the beginning of 2014.

“These numbers reflect the consequences of policy inaction,” said Joe Jobe, CEO of the National Biodiesel Board (NBB), the industry trade association. “The drop in production represents lost jobs and economic activity. It represents a lost opportunity to reduce greenhouse gas emissions and other pollutants. And it represents another year in which we fail to tackle our dangerous dependence on oil in the fuels sector.”

“The numbers would have been even lower had the EPA not signaled throughout the year that it will strengthen the RFS proposal and finalize it promptly,” Jobe said. “But companies can operate on faith for only so long. We have already seen many producers close their doors, and many others are struggling to stay open as we enter a New Year with continued uncertainty.”

“The most frustrating aspect is that this is completely unnecessary,” Jobe added. “This is an industry that should be growing, and that has proven it can expand with smart policies in place. Yet we have this paralysis in Washington. Biodiesel companies simply can’t plan for growth or hire new people with the kind of uncertainty we have now.”



The trend is ethanol’s friend: White Paper urges regulators to re-think corn ethanol’s carbon value

A new White Paper written by Ron Alverson, the President of the American Coalition for Ethanol (ACE) Board of Directors, reveals how scientists are applying technology innovations by farmers and ethanol facilities to improve the accuracy of carbon intensity modeling for biofuels.   The result: a dramatic improvement in the low carbon value of corn-based ethanol.

Alverson, a farmer and founding board member of Lake Area Corn Processors, LLC (owners of a 60 million gallon per year ethanol facility near Wentworth, SD), holds a BS degree in Agronomy and Soil Science from South Dakota State University. His White Paper cites new research and improved modeling by the Department of Energy’s Argonne National Laboratory (ANL) which indicate corn ethanol’s carbon intensity (CI) is trending lower.

“ANL scientists have documented significant reductions in corn ethanol’s CI since 2008. Through updates to the Greenhouse gases Regulated Emissions and Energy use in Transportation (GREET version 2.0, 2013) model, ANL recently determined that average ethanol manufacturing energy use has decreased 25%, corn farming energy use decreased 24%, corn fertilizer and chemical use decreased by 3%, and that ethanol facilities are extracting 3% more ethanol from each bushel of corn.   ANL has also updated their Land Use Change (LUC) calculations with recent data and now estimate LUC of just 7.6 grams of CI, a 75% reduction from the widely used and outdated estimate of 30 grams CI.   A significant portion of this reduction resulted from soil carbon modeling which predicts soil carbon sequestration from corn,” Alverson notes in the White Paper.

“Unfortunately, low carbon fuel market regulators, such as the U.S. EPA and the California Air Resources Board, have yet to acknowledge these improvements and update their models with this new science,” continues Alverson.  “Because fossil fuel CI is getting worse and corn ethanol CI is improving, failure to account for these trends unfairly penalizes biofuels in low carbon markets.”

“Corn farmers have responded to market signals and rapidly adopted precision application technology to reduced fertilizer application rates,” concludes Alverson.  “The future is bright for corn ethanol to provide meaningful contributions to reducing greenhouse gas emissions from transportation fuel.   Recognizing these new realities would provide us with a homegrown advanced biofuel that meets a range of health and public policy objectives.”



USDA OKs New Monsanto Soy, Cotton Seeds

The U.S. Department of Agriculture on Thursday approved soybean and cotton seeds engineered by Monsanto Co. to tolerate dicamba herbicide.

The seeds are among a range of products developed by agricultural companies to combat the spread of weeds that have developed resistance to glyphosate, a widely used weed killer marketed by Monsanto under the Roundup brand. Left unchecked, glyphosate-resistant weeds can choke crops and damage farm equipment.

Environmental and consumer groups, however, have pushed back against efforts by Monsanto and rival Dow Chemical Co. to roll out new seed and herbicide pairings. They argue that the weed killers used in these new pairings pose threats to public health and risk triggering the emergence of even more-resilient weeds that could infect more farms.

Monsanto's Roundup Ready 2 Xtend soybeans are genetically modified to tolerate glyphosate and dicamba. Bollgard II XtendFlex cotton technology can tolerate glyphosate, dicamba and glufosinate.

The U.S. Environmental Protection Agency is "nearing completion of its concurrent review" of a new formulation of dicamba and glyphosate designed to treat plants grown from the new seeds, USDA officials said Thursday.

Monsanto, the world's largest seed company by sales, submitted the genetically modified seeds for USDA approval in 2010. Company officials said last year they expected to begin selling the new soybean seeds in 2016, with international approvals anticipated in 2015.



NCGA Priority and Policy Conference Yields Insight into Top Issues

The National Corn Growers Association's annual Priority and Policy Conference wrapped up today in St. Louis, concluding a series of discussions on NCGA policies and state and national priorities for 2016.

"This meeting consistently provides a chance for NCGA leadership to gain valuable insight from our state affiliates while fostering deep discussions that help all of us examine the issues more fully," said NCGA President Chip Bowling, a grower from Newburg, Md. "The insight and ideas our attendees brought to discussions will provide us with sound guidance upon which to base effective, impactful plans for the upcoming years."

The meeting includes chairs, presidents and executive directors of NCGA's state organizations, as well chairs and vice chairs of the organization's action teams and committees. For two days, these leaders discussed organizational policy and their perspective on the relative importance of each issue facing the industry. While each participant brought keen insight, it quickly became evident that all parties recognized the need for efforts to build and protect corn markets, such as the Renewable Fuel Standard, and to be wary of excessive government regulations that add to the high cost of farming.

Again this year, as part of a collaborative initiative with the U.S. Grains Council, the Priority and Policy Conference also included leadership from that organization for a discussion of USGC priorities and trade issues.



First USDA Forecast Shows Normal Water Supply Forecast for Much of the West

A normal water supply is predicted for much of the West, while the Southwest, Sierra Nevada region and Pacific Northwest are beginning the year drier than normal, according to data from the first 2015 forecast of USDA's National Water and Climate Center (NWCC). California, Arizona and New Mexico as well as parts of Colorado, Utah and Nevada are experiencing prolonged drought, focusing attention again on the winter snowfall.

"Right now, snowpack and streamflow forecasts look pretty close to normal for much of the West," NWCC hydrologist Cara McCarthy said. "A couple of major regional exceptions are the Southwest and California, which are unusually dry, once again."

In Western states where snowmelt accounts for the majority of seasonal water supply, information about snowpack serves as an indicator of future water availability. Streamflow in the West consists largely of accumulated mountain snow that melts and flows into streams as temperatures warm in spring and summer. NWCC scientists analyze the snowpack, air temperature, soil moisture and other measurements taken from remote sites to develop the water supply forecasts.

Overall, the basins of the Missouri, Colorado and Columbia rivers are expected to receive near normal streamflows.

In the Pacific Northwest, although rainfall during the fall months has been above average, the current snowpack is far below normal because of higher than normal temperatures.

"This is just the first forecast of the season; everything can change," McCarthy said. "A weak El Niño is forecast for this year, which might play a part in coming months."

Although variable, El Niño conditions tend to deliver more than normal winter precipitation to the Southwest and less to the Pacific Northwest.



Pigs not going to market on time? Examine gut health

It’s a continuous race against time and money in the pig barn. Striving for the ultimate goal of getting pigs to market weight as quickly as possible; producers are also racing against the ever-growing cost that comes with each additional day the pigs are not sent to market. Poor gut health can delay marketing, adding further time to reach the desired finishing weight and money for the extra feed that must be purchased.

“Healthy pigs eat better and produce more efficiently. They are more likely to perform to their optimum potential,” said Russell Gilliam, U.S. swine business manager for Alltech. “Addressing gut health and managing it from wean to finish is important for the producer’s bottom line.”

The producer’s goal is that feed purchased is of optimum digestibility by the pig; the reality is that feed supplied and animal performance can vary greatly. Many challenges can affect gut health, from pH levels and feed quality to viruses and diseases. Gilliam said that while these obstacles can be difficult to manage, it is not impossible. Addressing the key phases of gut health, producers can increase the likelihood of their pigs reaching their maximum potential as quickly as possible.

“There are three key phases that we focus on with Alltech’s new Gut Health Management program,” Gilliam said. “The first is getting the animal off to the right start, because they can never get over a good or bad start. Second, it is essential that pigs are getting the most from their feed, ensuring the animals perform at their peak. Finally it is important to build the animal’s natural immunity to prepare it for any challenges that may arise.”

The company will officially launch Alltech Gut Health Management to the swine industry during the Iowa Pork Congress, Jan. 28 and 29 in Des Moines, Iowa. One of the services included in the second phase of the program is True CheckTM, a unique tool developed by Alltech that helps producers see how effective their feed is at providing nutrients for digestion. Utilizing samples of feed, True Check uses a system that mimics real life conditions of the pig’s digestive system. After simulation, samples are compared to show the energy and nutrient release, giving producers the results they can expect from their pigs’ diet. Using NIR (Near Infrared Spectrometer) capabilities, Alltech’s True Check in vitro screening has replicated more than 7,200 hours of pig digestion to date.



Beef and Veal Steal the Stage at Pennsylvania Farm Show

The Beef Checkoff Program partnered with the Pennsylvania Department of Agriculture to host “Beef & Veal Day” on Jan. 14, during the 99th annual Pennsylvania Farm Show.

As part of its Northeast Beef Promotion Initiative (NEBPI), the national checkoff partnered with the Pennsylvania Beef Council to bring together chefs, culinary instructors and students from across Pennsylvania to kick off the event with multiple beef and veal cooking demonstrations. That included a recipe from Flinchy’s Steak and Seafood House co-owner Dawson Flinchbaugh for Bolognese Sauce Ala’ Flinchy’s with Mediterranean relish, as well as a recipe from Franklin & Marshall College’s Sodexo Campus Dining Executive Chef Thomas J. Long for oat crusted chopped veal steak with warm dried cherry chipotle chutney.

During the PA PreferredT Collegiate Beef Brawl, rival state universities were challenged to a Beef Triathlon in which teams competed in three separate rounds:  a beef cut identity portion, trivia challenge and a kitchen skills relay, where they were in a race against time to impress a panel of judges and win the title of Pennsylvania Beef Champion. Judges voted the Delaware Valley College students as the overall winners.

Checkoff staff interacted with hundreds of consumers filtering through the Farm Show Complex and cooking stage. Visitors had the opportunity to enter to win the “Best of Beef” prize pack, and gather lean beef stick samples, recipes and other beef and veal branded items.