Thursday March 12 Ag News

Inaccurate Guidelines Would Harm Ag Industry

Today, U.S. Senator Deb Fischer (R-Neb.) joined 29 of her colleagues in objecting to a report on food guidelines that advises Americans to decrease consumption of red meat. In a letter to USDA Secretary Tom Vilsack and HHS Secretary Sylvia Burwell, the senators condemn the report’s conclusions, which ignore relevant scientific evidence on nutrition. Senator Fischer released the following statement regarding the report this afternoon:

“The recommendations in this report are misguided and if enacted, could have a devastating effect on Nebraska’s livestock industry. Any changes to our nation’s food policies must be based on sound science and outside experts. Our ranchers, and the millions of Americans they feed, could be harmed for generations by inaccurate and unfounded reports like this.”

Every five years, USDA and HHS review the dietary guidelines for American food nutrition policy. Last month, the Dietary Guidelines Advisory Committee – whose members are appointed by HHS and USDA – submitted their report recommending that Americans eat less red meat and consume more fruits and vegetables. Their recommendations were based on environmental impact concerns, not science. HHS and USDA use this report as the foundation to develop standards for national nutrition policy, including the school lunch program.

The senators’ letter, led by Commerce Committee Chairman John Thune (R-S.D.), also requests an extension of the 45-day comment period to ensure stakeholders have enough time to review and comment on the report’s questionable findings.



RICKETTS ANNOUNCES NATIONAL AG WEEK TOUR

Governor Pete Ricketts will travel to Omaha, Broken Bow, North Platte and Seward on Monday to participate in a series of events to mark the celebration of National Ag Week in Nebraska. He will be accompanied by Nebraska Department of Agriculture Director Greg Ibach, Chairman of the Legislature’s Agriculture Committee Senator Jerry Johnson, and Nebraska Farm Bureau President Steve Nelson.

“I am excited to make several stops across the state next week to recognize the hard work so many Nebraskans put into making agriculture our state’s number one industry,” said Gov. Ricketts. “It starts with our farmers and ranchers and extends to thousands of workers in the state connected to agriculture from Harrison to Humboldt.”

This day-long tour for National Ag Week will have both a rural and urban flavor. There will be a focus on the state’s ever-growing livestock and crop production sector and the hard-working Nebraskans who make it possible. In addition, there will be recognition of value-added agriculture, and how the state’s largest city is connected to the industry.

“This is a great time to demonstrate how important agriculture is to both the urban and rural segments of Nebraska,” said Director Ibach. “Our tour will start with a stop in our state’s largest city, proceed to parts of greater Nebraska and then finish in Seward. National Agriculture Week is definitely a time for all Nebraskans to celebrate.”

“It is truly a privilege to travel the state during National Ag Week,” Sen. Johnson said. “Having the opportunity to visit with producers, while in the middle of the legislative session, shows how important agriculture is to Nebraska’s economy.”

“We are extremely excited to join the Governor and others in celebrating National Agriculture Week. At its core, Nebraska agriculture is about the farm and ranch families that work every day to support their families and communities,” Nebraska Farm Bureau President Steve Nelson said. “These events give us the opportunity to recognize those efforts and celebrate the great things associated with raising food for others.”

Green Plains Inc. in Omaha will be the first tour stop and highlight value-added agriculture and agribusiness. Green Plains is a diversified commodity-processing business with operations related to ethanol production, corn oil production, grain handling and storage, cattle feedlot operations, and commodity marketing and distribution services. Green Plains has locations across the Midwest, including four ethanol plants and two grain storage facilities in Nebraska.

During the Omaha visit, Gov. Ricketts will offer comments on the recently-released Greater Omaha Chamber of Commerce’s value-added agriculture strategy report, unveiled last week.

The group will then travel to Broken Bow for a lunch event with farmers, ranchers and agri-business representatives. The stop will highlight Nebraska’s strong crop and livestock sectors. Custer County is annually one of the top counties in the state for value of agricultural production. Custer County Farm Bureau is coordinating the event in cooperation with the Broken Bow Chamber of Commerce.

Next, the group flies to North Platte where the Governor will conduct his monthly statewide call-in radio show beginning at 2 p.m. CT. The Governor plans to highlight recent activity in marketing Nebraska agriculture products both domestically and abroad. The public is encouraged to call in with agriculture-based questions.

The final stop takes the group to Seward for the 47th Annual Seward County Agriculture Recognition Banquet. A large crowd is expected to help recognize and celebrate the state’s number one industry. The Governor is scheduled to give brief remarks as part of a program of activities. The event is coordinated by the Seward County Fair Board, the Seward Kiwanis and the Seward Chamber of Commerce.

Gov. Ricketts encourages people to attend the many National Ag Week events being held across Nebraska. Many communities and organizations across the state host some type of activity.

“It is a time for all of us to reflect on all the different ways agriculture affects our daily lives,” Gov. Ricketts said. “It starts with the food on our plate, but extends to products we routinely use, and the way the economy is affected through the broad reach of agriculture-related employment.”



EXPERT: AMERICANS' ACCEPTANCE OF CLIMATE CHANGE INCREASING

Everyone should take a course in climate change 101, a widely recognized expert on public opinion of the topic said Tuesday.

Anthony Leiserowitz, director of the Yale Project on Climate Change Communication and research scientist in the School of Forestry and Environmental Studies at Yale, spoke as part of the Heuermann Lectures in the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln.

Leiserowitz conducted the first empirical assessment of worldwide public attitudes toward global sustainability and researched these values in the United States, individual states and municipalities, India and with the Inupiaq Eskimo of Northwest Alaska.

Together with Edward Maibach, director of the Center for Climate Change Communication at George Mason University, Leiserowitz developed the concept of the "Six Americas," which segments the U.S. population based on the public's attitudes and beliefs toward climate change. The six groups are "the alarmed" (13 percent), "the concerned" (31 percent), "the cautious" (23 percent), "the disengaged" (7 percent), "the doubtful" (13 percent) and "the dismissive" (13 percent).

The facts are actively interpreted by these different audiences, who construct their own understanding in accordance with what they already "know," value and feel. Each audience needs tailored engagement strategies and clear messages, repeated often, Leiserowitz said.

The number of Americans who think climate change is not real continues to decline but a well-funded and documented "denial industry" uses strategies similar to those used to try to discredit the link between tobacco and human health in which "doubt was the product," he said. One of the reasons for doubt about global warming is that it is invisible.

"Carbon dioxide is pouring out of buildings, tailpipes and people's mouths. We are standing in a volcano of carbon dioxide rising out of the atmosphere," Leiserowitz said. "It is the same in every city but we can't see it so it is out of sight, out of mind."

Leiserowitz listed what he calls "the big five facts in 10 words" that people should know about global warming: "It's real; it's us; it's bad; scientists agree; there's hope.”

Only one in 10 Americans knows that 90 percent or more of climate scientists have concluded that human-caused global warming is happening.

Research by Leiserowitz and his colleagues indicates that about 71 percent of Americans believe global warming is occurring but only 45 percent are worried and only 11 percent are "very worried."

No one associates the impact of global warming on human health such as allergies, asthma and diseases, he said. "People become more engaged when they realize it's about them."

Politics is another factor. Democrats and Republicans agreed on global warming in 1997. Currently it is one of the most polarizing issues.

Despite the fact that global warming was next to last of the top priorities for the president and Congress in 2014, a majority of Americans support funding to make roads, bridges and buildings more resistant to extreme weather; funding more research on renewable energy sources; providing tax rebates for consumers who buy energy-efficient vehicles or solar panels; regulating carbon dioxide pollution; and requiring electric utilities to produce at least 20 percent of their electricity from renewable energy resources even if it costs the average household an additional $100 annually.

Leiserowitz's suggested course of action: Communicate the scientific consensus on global warming. Connect climate change to our lives and values, especially health. Explain extreme weather in the proper climate context and emphasize that global warming is solvable.

     "Americans are beginning to connect the dots between climate change and extreme weather, jobs, national security, faith and values, making it here and now," he said.

Heuermann Lectures are made possible through a gift from B. Keith and Norma Heuermann of Phillips, longtime university supporters with a strong commitment to Nebraska's production agriculture, natural resources, rural areas and people. Lectures stream live at http://heuermannlectures.unl.edu and are archived at that site soon afterward. They're also on NET2 World at a later date.



AgriBank Reports Fourth-Quarter 2014 and Year-End Financial Results

Today St. Paul-based AgriBank announced strong financial results for the fourth quarter and full year 2014 with continued growth in net income, strength in credit quality, and robust liquidity and capital.

Highlights:
    Net income continues to grow: Net income increased $6.1 million to $569.6 million for the year ended December 31, 2014, driven by increases in mineral income and non-recurring gains on sales of certain available-for-sale investment securities.
    Credit quality remains strong: Loan portfolio credit quality remains strong, as acceptable loans stood at 99.7 percent.
    Liquidity and capital remain robust: Cash and investments totaled $16.4 billion at year-end, compared to $13.5 billion at the end of 2013. End-of-the-period liquidity was 147 days, well above the regulatory requirement. Capital also remained well above the regulatory minimum and company targets at $4.9 billion.

"AgriBank completed another quarter and year of strong earnings and sound credit quality," said Bill York, AgriBank CEO. "We anticipate that the inevitable swing of market cycles will result in earnings and credit quality returning closer to long-term averages. We are in a strong position to manage through this environment, given the liquidity and capital levels we maintain to fulfill our mission of serving agriculture and rural America."

Year-End 2014 Results of Operations
Net income increased $6.1 million to $569.6 million for the year ended December 31, 2014.

Net interest income increased slightly to $525.0 million compared to $523.8 million for 2013, primarily due to loan growth. The impact of the higher loan volume was substantially offset by our changing product mix driven by increases in our wholesale loans with significantly lower spreads than our retail products, as well as compressing spreads on the AgDirect equipment loan portfolio.

Provision for loan losses was $3.5 million for the year ended December 31, 2014 as compared to a reversal of loan losses of $4.0 million for the same period in 2013. The prior year reversal of loan losses was primarily related to a large recovery.

Non-interest income increased to $159.9 million, compared to $146.3 million for 2013. This increase was primarily driven by higher mineral income and non-recurring net gains on sales of certain available-for-sale investment securities.

Fourth-Quarter 2014 Results of Operations
Fourth-quarter 2014 net income was strong at $147.3 million, compared to $142.7 million for the same period of 2013. The increase was primarily due to the increase in mineral income and non-recurring net gains on sales of certain available-for-sale securities, partially offset by an increase in provision for loan losses reflecting the credit quality in the growing AgDirect retail equipment financing portfolio.

Loan Portfolio
Total loans increased 5.3 percent year-over-year to $77.5 billion, primarily due to increases in wholesale loans to affiliated Associations. Throughout 2014, affiliated Associations funded increased real estate mortgage loans for agriculture real estate. Additionally, operating lines on production and intermediate loans spiked in December due to seasonal increases at year end for borrower tax planning purposes. The AgriBank retail loan portfolio grew during 2014 due to funding of increased loan participation interests in retail equipment financing originating from the AgDirect program.

The solid liquidity and equity positions of many retail borrowers are reflected in the strong credit quality of the AgriBank portfolio at 99.7 percent acceptable loans at year-end. Acceptable loans represent the highest quality assets. Credit quality has been steadily improving since 2009 and remains consistent with the position as of December 31, 2013; however, these are strong positions, and they are expected to decline to more normal levels over time. Nonaccrual loans at year-end declined to $37.8 million in 2014 from $39.7 million in 2013 resulting from several years of profitable crop production.

The U.S. Department of Agriculture’s Economic Research Service (USDA-ERS) projects U.S. aggregate net farm income (NFI) to decline from the all-time high of $129.0 billion in 2013 to $108.0 billion for 2014. The overall decline in 2014 NFI was driven by falling crop prices and increased production expenses, partially offset by the very strong financial performance of livestock and dairy producers due to record or near-record output prices and lower feed costs. Despite the significant expected decline in 2014 farm incomes, the U.S. farm economy enters 2015 in perhaps its strongest financial condition in over 50 years. The U.S. farm sector debt-to-asset ratio, a measure of overall farm financial health, reached an all-time low level of 10.6 percent in 2014 and is projected to increase only slightly to 10.9 percent for 2015.

USDA-ERS projects NFI to decline further in 2015 to $73.6 billion. If realized, this decline would result in the lowest NFI posted since 2009. While the outlook for corn, soybean and wheat producers’ income is mostly negative, the strong financial condition of the District’s crop portfolio is expected to greatly reduce the initial impact of lower or negative margins. Given current price projections, producers may benefit from commodity title programs under the Agricultural Act of 2014. However, given the sharply uneven distribution of farm debt, there is a strong probability of some financial stress with a limited number of borrowers if projected conditions are realized during the coming year. Overall, the livestock industry is expected to continue to benefit from reduced feed costs; however, profit margins are expected to tighten, especially for cattle feedlots, pork, poultry and dairy producers.

Capital Resources and Liquidity
Total capital remains very strong at $4.9 billion. This is a slight decrease, reflecting AgriBank’s return of $222.8 million of stock to members in the first quarter of 2014. This significant return was substantially offset by continued strong income of $569.6 million, less $337.6 million of patronage distributions to our owners.

Cash and investments totaled $16.4 billion at year-end, compared to $13.5 billion at the end of 2013. The Bank’s end-of-the-period liquidity position represented 147 days coverage of maturing debt obligations, well above the 90-day minimum established by the Farm Credit Administration, the Bank’s independent regulator.

About AgriBank
AgriBank is one of the largest banks within the national Farm Credit System, with more than $90 billion in total assets. Under the Farm Credit System’s cooperative structure, AgriBank is primarily owned by 17 affiliated Farm Credit Associations. The AgriBank District covers America’s Midwest, a 15-state area stretching from Wyoming to Ohio and Minnesota to Arkansas. About half of the nation’s cropland is located within the AgriBank District, providing the Bank and its Association owners with expertise in production agriculture. For more information visit www.AgriBank.com.



Valmont Board Declares Quarterly Dividend

The Board of Directors of Valmont Industries, Inc. has declared a quarterly dividend of 37.5 cents per share payable on April 15, 2015 to shareholders of record on March 27, 2015.

The dividend indicates an annual rate of $1.50 per share.

Valmont is a global leader, designing and manufacturing highly engineered products that support global infrastructure development and agricultural productivity. Its products for infrastructure serve highway, transportation, wireless communication, electric transmission, and industrial construction and energy markets. Its mechanized irrigation equipment for large scale agriculture improves farm productivity while conserving fresh water resources.

In addition, Valmont provides coatings services that protect against corrosion and improve the service lives of steel and other metal products.



Mosaic to Invest $1.7 Billion in Saskatchewan Potash Mine
Mosaic Co. has announced it will spend $1.7 billion to expand its K3 potash mine near Esterhazy, Sask. The company says it plans to accelerate the production ramp-up of the mine over the next eight years.

During that time, an average of more than 300 skilled contract tradespeople will be working at the site, and as many as 600 workers will be on site during peak construction, reports CTV Regina.

Mosaic expects to begin mining potash ore at K3 by late 2017.

The project will serve as a satellite mine for the milling and storage facilities that were upgraded during the previous Esterhazy Stage 1 expansion.



American Farm Bureau Files Brief in Egg Law Case

A California law that regulates agricultural production in other states is unconstitutional for multiple reasons, and a lower court ruling that barred other states from bringing suit against California on behalf of their citizens should be reversed, according to the American Farm Bureau Federation.

In a friend-of-the-court brief filed today in the U.S. Court of Appeals for the Ninth Circuit (State of Missouri, et al. v. Harris, et al.), AFBF urged the court to find that six states have standing to challenge California’s egg law.

A federal district court in California dismissed a lawsuit brought by officials from Missouri, Alabama, Iowa, Kentucky, Nebraska and Oklahoma on behalf of their citizens in October of 2014, months before a new California law imposed hen cage size restrictions on any shell eggs sold in the state, including those produced out-of-state. California’s legislature enacted the law to protect California egg producers from a competitive disadvantage resulting from the 2008 Proposition 2 ballot initiative that imposed cage size restrictions on California egg producers.

“It is unfortunate that California’s voters put egg producers in their state at a clear competitive disadvantage, and we sympathize with the California farmers who will bear the brunt of that action,” said AFBF President Bob Stallman. “Freedom from unreasonable restrictions on interstate commerce, however, is a hallmark of our nation and the federalist system of government established in the U.S. Constitution. Without a legitimate health or safety justification, the California Legislature simply does not have the authority to regulate how eggs are produced in other states. A foreign trading partner attempting this kind of trade-barring action would cause an outcry all across the world trade arena.”

The California law presents out-of-state egg producers with an untenable situation and, because all “consumers will suffer,” the states of Alabama, Iowa, Kentucky, Missouri, Nebraska and Oklahoma should be allowed to file suit against California on behalf of all their citizens, AFBF said. According to AFBF’s brief, the law would have detrimental effects on the national egg market, since California accounts for one in every eight eggs sold in the U.S.

As for out-of-state egg producers, they “are placed between a rock and a hard place,” deciding whether to opt out of that sizeable market, or comply by incurring enormous capital costs associated with installing cage systems required by California law. The Congressional Research Service estimates compliance costs between $25 and $30 per hen. For a medium-sized farm with 300,000 hens, costs would be between $8 million and $9 million.

“It is more than sufficient to establish … standing to allege that one state has enacted a law that threatens broad-based harm to an entire industry within another state,” according to AFBF’s brief. “The injury to each state’s egg-consuming public assuredly is enough (to warrant the suit against California),” according to AFBF. “The claim is straight-forward: By playing with the levers of the national supply of shell eggs, California’s legislation is likely to drive up the cost of eggs for consumers within the plaintiff states. That is all that is necessary to establish … standing.”



U.S. Wheat Organizations Join Renewed Call for End to Cuban Embargo
National Association of Wheat Growers (NAWG)
U.S. Wheat Associates (USW)

After participating in a “learning journey” to Cuba March 1 to 4, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) have joined members of the U.S. Agriculture Coalition for Cuba (USACC) to renew a call for Congress to end the U.S. trade embargo.

USW Assistant Director of Policy Ben Conner and Kansas wheat farmer Doug Keesling represented the U.S. wheat industry on the trip.

“Our visit was an important first step toward a stronger relationship with Cuba,” Conner said. “We appreciated the opportunity to sit down and personally discuss these issues with representatives of the Cuban government and its people. We left with the distinct impression that lifting the embargo represents a unique chance to benefit people in both countries.”

“We have exported wheat to Cuba in the past and there should be no reason why we can’t do it now or in the future,” Keesling said. “It is the biggest wheat importer in the Caribbean — just a couple days away from our Gulf ports — and our own policies are keeping us from working together again. That’s not good for farmers or for the Cuban people.”

While ongoing travel and financing restrictions negatively affect the export potential for U.S. wheat farmers, competitors in the European Union and Canada freely sell wheat to Cuba. Even if the U.S. government loosens its trade policies, the larger political implications of an ongoing embargo create an unstable business environment for the United States and Cuba.

“Since Cuba can buy almost anything from anywhere except from the United States, the embargo is effectively an embargo against U.S. businesses and citizens, not of Cuba,” said USW President Alan Tracy.

“We will seize every opportunity to expand trade and Cuba is no exception,” said NAWG President Brett Blankenship. “Cuba represents untapped trade potential within our own hemisphere, and an end to the embargo would greatly benefit the U.S. export economy. Our wheat growers stand with America’s farm and business leaders to promote trade with Cuba today, tomorrow and well into the future.”

Last week’s visit included more than 95 U.S. agricultural leaders who met with officials of the Cuban government and learned about initiatives underway in Cuba to boost food production.

“As a result of this week’s learning journey, U.S. agricultural interests are well-positioned to facilitate a strong, two-way relationship when the embargo is lifted,” said USACC Chair Devry Boughner Vorwerk.



Ag Day a Great Opportunity for Farmer Outreach to Consumers

With multiple farming-related topics top of mind for consumers right now, it’s more important than ever for farmers to engage those food purchasers with the true story of today’s agriculture. And there’s no better time to do it than on National Ag Day, March 18.

Farmers’ freedom to operate depends in large part on consumers feeling good about the practices and technology being used to raise their food. The soy checkoff partners with multiple organizations and supports the development of resources that farmers can use to connect with consumers in meaningful ways.

“It’s natural for consumers to have questions about where their food comes from and how farmers are producing it,” says Nancy Kavazanjian, a soybean farmer from Wisconsin who serves as the United Soybean Board’s Communications Target Area Coordinator as well as chairwoman of the U.S. Farmer and Ranchers Alliance (USFRA). “That provides farmers with an opportunity to share our stories in honest and simple ways and show that we share their values.”

This Ag Day, farmers have their choice of plenty of resources to help them do that. The checkoff works with the Center for Food Integrity (CFI), CommonGround and USFRA, all of which support farmers as they answer consumers’ questions, just in different ways:

• Consumer Research – CFI (www.foodintegrity.org/research/2014-research, @FoodIntegrity) conducts leading-edge consumer research, which results in models of best practices that position farmers for success in connecting with consumers. CFI’s most recent research provides guidance on how to introduce technical and scientific data about food and farming into conversations so that consumers will consider the information in their decision-making process.

• Resources for Moms – The women farmers of CommonGround (www.FindOurCommonGround.com, @CommonGroundNow) start conversations with moms looking for more information about what they feed their families. CommonGround develops resources, such as videos and infographics, that farmers can share to inform on topics like animal welfare, GMOs and issues related to local and organic production.

• Ag for Movie Night – The goal of USFRA (www.fooddialogues.com, @USFRA) is to bring the farmer and rancher voice to food and farming conversations with customers. USFRA produces the Food Dialogues, bringing together farmers, consumers, industry representatives and media to discuss the most pressing food topics. Additionally, USFRA supported production of the film, “FARMLAND,” which is now available at Walmart, Netflix and many other outlets.