Thursday March 26 Ag News

Iowa Soybean Association partner gives farmers helping hand in financial management

With net farm income predicted to shrink by a third in 2015, Iowa soybean farmers are scrutinizing all aspects of their farm operations to remain competitive. To assist in their efforts, the Iowa Soybean Association (ISA) is renewing its partnership with Pivot Wealth Strategies of Des Moines to provide farmers with timely insight on asset management, financial planning, and farm succession.

In a time of tightening margins, financial decisions impacting farmer profitability are taking on added importance. The U.S. Department of Agriculture forecasts net farm income to be $73.6 billion in 2015, down nearly 32 percent from 2014. In addition, total production expenses are expected to increase one percent.

Chris Uglum and Ben Nelson, co-founders of Pivot Wealth Strategies, value the opportunity to partner with ISA in service to soybean farmers.

“Modest declines in farm ground and the increase in production costs signal an increased debt to asset ratio,” Uglum said. “We’re hearing from farmers interested in building a plan for diversification. Having more than one ‘net worth bucket’ will make times like these less painful. While the most advantageous time to develop such a plan is when times are good, the second best option is to start one today.”

Succession planning and farm transition are also becoming increasingly important given that the average age of the Iowa farmer is nearing 58. Farmers need to have a game plan to ensure their legacy continues.

“Operating a successful farm business certainly includes making the right agronomic and marketing decisions. But increasingly, it includes being knowledgeable about money management, implications and rules,” said ISA president Tom Oswald. “Pivot has been a valuable partner since 2012 and we are excited to deepen our relationship.”

ISA’s partnership with Pivot Wealth Strategies began with the creation of “Farm Wealth Update” a bi-monthly e-newsletter providing timely expertise on issues directly impacting farm profitability and competitiveness. This year, ISA members will also have the opportunity to engage with Pivot through ISA District Advisory Council surveys and events.



Existing Rules Protect Water Quality, Says NPPC

Existing regulations on agriculture are more than adequate to maintain and improve water quality, the National Pork Producers Council said in written testimony submitted yesterday to the Senate and House agriculture committees, which recently held hearings on a proposed rule to define “Waters of the United States” (WOTUS). The organization also said that upstream waters should not be categorically covered by the regulation.

The U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers last April proposed the WOTUS rule to clarify their authority under the Clean Water Act (CWA) over various waters. Currently, that jurisdiction – based on several U.S. Supreme Court decisions – includes “navigable” waters and waters with a significant hydrologic connection to navigable waters. The WOTUS rule would broaden that to include, among other water bodies, upstream waters and intermittent and ephemeral streams such as the kind farmers use for drainage and irrigation. It also would encompass lands adjacent to such waters.

“We all need and want more jurisdictional clarity, and we understand the need for a rule that addresses this,” said NPPC in its testimony. “But starting from the question ‘what is jurisdictional’ is functionally backward. The goal is clean water, not the forever-expansive growth of federal jurisdiction over every drop of water and all land features and activities that affect that water, merely for the sake of jurisdiction.”

The organization pointed out that pork operations already are regulated under the Clean Water Act’s Concentrated Animal Feeding Operation rule, which regulates how pork producers store, manage, handle and use manure for crop production. Additionally, farmers are adopting and updating practices to prevent or minimize storm water discharges, not only as part of caring for their fields and conducting efficient operations but under a section of the CWA. Furthermore, under the so-called Swampbuster provisions of various Farm Bills, farmers are subject to severe penalties if they drain, dredge, fill or level agricultural wetlands for the purpose of producing a commodity.

NPPC noted that while EPA has stated it doesn’t intend to impose new restrictions on agricultural non-point source discharges that now qualify for the CWA’s exemptions from permitting, under the WOTUS rule, it would make upstream features jurisdictional.

“Making upstream features with little or no resemblance to the types of waters that fit with the Clean Water Act’s aspirational goals adds no water quality value to the downstream waters that we all want to protect,” NPPC said.

According to analyses by agricultural organizations, including NPPC, and federal agencies, the WOTUS rule would encompass millions of miles of streams and adjacent lands, subjecting any activity near or on them – including, for farmers, applying fertilizers and pesticides and (potentially) planting crops – to CWA permitting. The regulation also would expose farmers to citizen lawsuits, alleging, for example, that ditches on cropland should be regulated under the CWA.



Pre-World Pork Expo tours offer a broad view of Midwest agriculture

The National Pork Producers Council (NPPC) is offering two tours before the 2015 World Pork Expo opens that will provide visitors a unique opportunity to gain insights into U.S. agriculture. A two-day tour, set for June 1-2, will travel to locations in Illinois, Indiana and Iowa, showcasing hog, feed, bioenergy and equipment production. The one-day tour on June 2 will provide a look at modern swine production and food marketing, as well as agricultural research and product development. Both tours include meals on tour days, along with free, three-day admission to World Pork Expo, the world’s largest pork-specific trade show.

“The pre-World Pork Expo tours are a great way to gain a broad view of the many facets of U.S. agriculture and food production,” says Greg Thornton, NPPC director of producer services. “This year’s tours will cover a lot of ground — from feed milling to hog production, and pork marketing to energy production. Participants will gain a rich perspective of Midwest agriculture at the farm and beyond.”

Get a personal view of Midwest agriculture
Participants can join the two-day tour, which is underwritten by the Illinois Soybean Association, in either Des Moines, Iowa, on Sunday, May 31, or Chicago, on Monday, June 1. Monday will feature stops in Indiana at a Co-Alliance feed mill; Bio Town Ag, a pork and beef producer with an anaerobic digester to recycle animal waste; and Fair Oaks Farms, home of the Farmhouse Restaurant and The Pig Adventure, which showcases modern pork production. Day Two includes a visit to the John Deere Harvester Works in East Moline, Illinois, and a barge trip down the Mississippi River to observe grain-export activities along this vital waterway. After touring a Cargill commercial wean-to-finish swine barn, the group will dine at the award-winning Smokey D’s BBQ in Des Moines.

The one-day Central Iowa tour on Tuesday, June 2, includes visits to Kemin Industries’ research and product-development facilities, and the DuPont Pioneer Research & Development Center. Lunch will be served at the Lucky Pig restaurant in Ogden, Iowa, which is owned and operated by pork producer Craig Christensen. Other stops include a commercial wean-to-finish hog facility, a modern Hy-Vee grocery store for a look at the U.S. retail food sector, and dinner at the Machine Shed Restaurant, which has been featured on the Travel Channel.

“These pre-Expo tours are open to anyone, but in the spirit of World Pork Expo, they are an excellent opportunity for visitors from other countries to get an up-close look at the business of agriculture from the farm gate to the consumer’s plate,” says Ron Prestage, NPPC president and Camden, South Carolina, pork producer. “Tour participants also will enjoy the exhibits and seminars at World Pork Expo as they gain further insight into the latest products and technologies pork producers use to supply the world with nutritious, high-quality pork.”

Space is limited
The fee for the one-day tour, which can accommodate up to 30 people, is US$150 per person. The cost of the two-day tour, which has a maximum capacity of 54 and includes hotel accommodations for the night of June 1, is US$450 per person.

Both tours end at the Holiday Inn Des Moines-Airport, which is the World Pork Expo international headquarters hotel. Participants in the two-day tour can choose to board the bus at the Holiday Inn Des Moines-Airport on May 31, or join the tour June 1 at the Holiday Inn Hotel & Suites Chicago-O’Hare. Included in the tour packages are bus transportation, three meals on tour days, exhibit fees and any biosecurity apparel required to visit the hog operations. Registration also includes a three-day pass to World Pork Expo, and access to free transportation between the international headquarters hotel and Expo grounds, June 3-5.

Find more information and register for a tour
For more details and to register for these tours, go to worldpork.org and select “Attendees” on the blue registration button. Then, scroll down to "Industry Tours."

The website also has the latest details about room availability at the official Expo hotels, a schedule of activities, and answers to frequently asked questions about traveling to World Pork Expo. Regular updates are available when you connect with World Pork Expo on Facebook, follow World Pork Expo on Twitter (@NPPCWPX, #WPX15), or download the official app by searching for “World Pork” in the Apple Store, Android Market or Blackberry’s App World.

World Pork Expo takes place June 3-5 at the Iowa State Fairgrounds in Des Moines. Hundreds of commercial exhibits will be on display from 8 a.m. to 5 p.m. on Wednesday, June 3, and Thursday, June 4, as well as from 8 a.m. to 1 p.m. on Friday, June 5. The swine breeding stock sales will take place on Saturday, June 6, from 8 a.m. until they are completed (at approximately noon).



Wheat Growers Express Concern Over IARC Glyphosate Reclassification 
The National Association of Wheat Growers (NAWG) expressed concern about the claims of a recent, stand-alone report by the International Agency for Research on Cancer (IARC) that moves to reclassify glyphosate as a probable human carcinogen. NAWG President Brett Blankenship, a wheat farmer from Washtucna, Wash., provided the following statement on the issue:

“I appreciate people being concerned about food safety and where their food comes from, but years of regulatory scrutiny and scientific review show the clear facts about the safety of glyphosate use in production agriculture. The use of glyphosate in wheat production is minimal, but not absent. On my own farm in Washington State, I use glyphosate well before I plant my wheat to provide a clean planting environment to give the consumer the cleanest and healthiest possible product I can provide as a farmer.

“The claims by the IARC are very troubling and are not based on any new science. More than 25 years of analysis from global regulatory bodies and the international scientific community, assessing updated data and peer-reviewed literature, has consistently provided the same evidence: the toxicity levels of glyphosate are low and glyphosate is not carcinogenic. The discrepancy between 25-years of scientific analysis and one report, which was based on a limited amount of data, cannot be ignored.

Consumers can have faith that U.S. farmers and ranchers, including wheat growers, work tirelessly to provide the safest possible food for our families and theirs. NAWG stands side-by-side with our industry partners and allies in supporting farmers’ conscientious use of glyphosate.”

Senate and House Consider Budget Resolutions
On Wednesday, the U.S. House of Representatives adopted its FY 2016 budget resolution on a vote of 228-199. The version of the budget resolution approved by the full House reflects the version passed by the House Budget Committee last week, but it includes an additional $2 billion for a particular Defense account.

During floor consideration, the House rejected a number of alternative budget proposals, including a proposal from the Republican Study Committee that would have called for the elimination of funding for the Market Access Program (MAP) and the Foreign Market Development (FMD) Program. The final version adopted by the House does include reconciliation instructions for the Agriculture Committee to find $1 billion in reductions over 10 years in mandatory programs.

The Senate is still considering its budget resolution with amendment votes anticipated to extend through Thursday night. There were a number of amendments introduced that could impact crop insurance and the farm programs, including amendments from Senator Flake (R-AZ) that would eliminate premium subsidies on policies utilizing the Harvest Price Option, limiting premium support for producers with an AGI above $750,000, and calling for disclosure of participants in the crop insurance program; an amendment from Senator Shaheen (D-NH) that would call for a premium support cap of $50,000 annually; and an amendment from Senator Booker (D-NJ) that would call for a reduction in the AGI cap for Title 1 farm programs. NAWG is opposed to these amendments and we ask that you contact your Senate offices today (Thursday) to oppose any amendment that would undermine crop insurance or that would reopen the Farm Bill.



March 31 Deadline for Farm Bill Approaching; Extension Available in FSA Offices

With less than one week until the sign-up deadline, 77 percent of farmers have made their election into the farm bill risk management program, according to USDA Farm Services Agency officials testifying today at a hearing of the House Agriculture Subcommittee on General Farm Commodities and Risk Management. Ninety-four percent have completed their base acre reallocations. Farmers have until Tuesday, March 31 to update their base acres and choose between Ag Risk Coverage or Price Loss Coverage at their local FSA office.

At the hearing, FSA officials said county offices will remain flexible during program sign-up. Farmers who are unable to complete the process by the deadline are encouraged to go to their local FSA office as soon as possible (before March 31) to sign a document of their intent to enroll. This will allow the farmer to come back into the FSA office to complete the enrollment process. Producers failing to enroll in either ARC/PLC are by default enrolled in the PLC program and forfeit program benefits for 2014.

"These are important decisions that will impact farm operations for at least the next five years," said NCGA President Chip Bowling. "FSA offices are here to help with that process. If you haven't completed the enrollment process yet, and need more time, get into your local office as soon as possible and sign your intent to enroll."



Corn Sales to Western Hemisphere Surge

As of March 12, the Western Hemisphere claimed nearly 708.6 million bushels in outstanding sales and accumulated exports of U.S. corn for the 2014/2015 marketing year, 102 million bushels more than last year at the same time, the U.S. Grains Councol reported this week.

With domestic consumption of U.S. corn expected to remain flat for the current marketing year, there is an abundant supply available for export. The Western Hemisphere is a natural market due to its proximity to U.S. export channels.

Canada, Mexico, Colombia and Venezuela are generally among the top 10 export markets for U.S. corn, and the countries of Central America are generally among the top 20 export markets. New growth throughout the region is occurring due to grain availability, competitively priced U.S. corn and policies that enable open, liberalized trade of goods and services.

"The increase in sales in this region demonstrates clearly what can happen when, working together, the National Corn Growers Association advocates for trade policies which the U.S. Grains Council can then use to promote U.S. corn in export markets," said NCGA Trade Policy and Biotechnology Action Team Chair John Linder, a farmer from Ohio. "NCGA and USGC's synergistic relationship effectively builds exports and directly benefits farmers in the form of increased demand."

Two notable increases were in Colombia, with an increase of almost 39 million bushels, and Peru, with an increase of 28 million bushels. Both markets have free trade agreements with the United States that provide greater market access for U.S. agricultural products.

Under the U.S.-Colombia free trade agreement, the United States enjoys a duty-free tariff rate quota for the first 95.7 million bushels of corn exports to Colombia in 2015. However, as of March 12, Colombia's accumulated exports and outstanding sales of U.S. corn totaled more than 122 million bushels, meaning Colombia will be importing U.S. corn outside of its TRQ this year. This highlights the vast demand for the U.S. product.

Meanwhile, Peru's appetite for U.S. corn has also exploded, reaching 71 million bushels as of March 12. The U.S.-Peru trade promotion agreement has been instrumental in boosting bilateral trade in food and agricultural products between the United States and Peru. Within the first seven days of 2015, Peru exhausted its entire TRQ of 27.9 million bushels, again highlighting the success of the U.S. FTA.

"The notable continuation of Colombia and Peru sourcing the majority of their corn from the United States is an important achievement as is U.S. market share in Central America maintaining the pace set in the 2013/2014 marketing year," said USGC Director of the Western Hemisphere Marri Carrow. 

"The Council has been involved in the region since the early 1980s, accelerating the growth of domestic meat, milk and egg production. While domestic production boosts the economy of our export customers, this growth presents U.S. farmers with the opportunity for increased profitability in the homeland. Also during this time, the Council fostered long-standing trade partnerships between key buyers and sellers in the region, which helped make this increase of U.S. corn exports to the region possible."



U.S. ethanol exports in 2014 reach highest level since 2011
(Energy Information Administration)

According to EIA monthly supply data through December 2014, which EIA released in late February, U.S. exports of fuel ethanol in 2014 reached their second-highest level at a total of 826 million gallons. This level was second only to the 1.2 billion gallons exported during 2011 and 33% more than exports of fuel ethanol in 2013. Similarly, U.S. imports of ethanol, which totaled approximately 377 million gallons during 2013, fell by 81% to a total of 73 million gallons in 2014, their lowest annual level since 2010. As a result, the United States was a net exporter of fuel ethanol for the fifth consecutive year and exported the fuel to 37 different countries in 2014.

In the United States, ethanol is primarily used as a blending component in the production of motor gasoline (mainly blended in volumes up to 10% ethanol, also known as E10). Corn is the primary feedstock of ethanol in the United States, and large corn harvests have contributed to increased ethanol production. The U.S. Department of Agriculture estimates that the United States produced a record 14.2 billion bushels of corn in 2014, 3% higher than the previous record set in 2013.

Given the uncertainty surrounding future Renewable Fuel Standard (RFS) targets and the lack of significant demand for higher ethanol blends in 2014, the growth in ethanol output had two primary outlets: it can either be blended into domestic gasoline or it can be exported. U.S. gasoline blending grew for the second consecutive year in 2014, with gasoline consumption increasing slightly from 2013 levels. As gasoline consumption increases, more ethanol is able to be used as a blendstock (as E10). Additional volumes of ethanol beyond requirements for E10 blending and relatively small volumes used in higher ethanol blends such as E85 (85% ethanol and 15% gasoline) were exported in 2014.

Canada remained the top destination for U.S. ethanol exports in 2014, receiving 336 million gallons, or about 41% of all U.S. ethanol exports. Brazil, the United Arab Emirates, and the Philippines all imported at least 50 million gallons of U.S. ethanol in 2014; 33 other countries received less than 50 million gallons each. U.S. ethanol has been a competitively priced octane booster for gasoline in foreign markets as well as an attractive option for meeting renewable fuel and greenhouse gas emissions programs standards. In addition, countries such as Canada and Brazil have ethanol blending mandates that continue to generate demand for U.S. ethanol.

Export volumes to Brazil increased by 146% in 2014 in part because of the need to meet Brazilian ethanol demand. Brazilian ethanol producers have already lost significant market share internationally over the past few years as U.S. exports have grown, in large part because of abundant U.S. corn harvests. As a result, reports state that as many as 60 Brazilian ethanol plants were temporarily closed in 2014. Brazilian ethanol producers were also hurt by a lack of U.S. ethanol import demand in 2014, driven by uncertainty surrounding future RFS targets in the United States, which have been a strong driver of U.S. demand for sugarcane ethanol from Brazil in previous years. Sugarcane ethanol, unlike corn ethanol, generally counts as an advanced biofuel under the RFS program, which includes targets for several distinct categories of biofuels.

The United States imported 73 million gallons of ethanol in 2014, a decrease of more than 81% from 2013. About 74% of U.S. imports came from Brazil, with the remaining gallons primarily from Guatemala, Canada, and the Netherlands. U.S. import demand for ethanol was driven lower primarily because of RFS targets that are not yet finalized along with strong domestic production and import quantities of biomass-based diesel, which, like sugarcane, also counts as an advanced biofuel under the RFS program. The California Low Carbon Fuel Standard, which includes incentives for increased blending of sugarcane ethanol, did little to draw in Brazilian volumes of ethanol in 2014, with slightly more than 10 million gallons entering the United States on the West Coast, down from 126 million gallons in 2013.

Given the existing ethanol production capacity coupled with the ongoing constraints for blending ethanol into domestic gasoline, the United States likely will continue to remain a strong exporter of ethanol in 2015. Ultimately, the key drivers for ethanol exports this year are the finalized levels of RFS targets for 2014 and 2015, future corn crop yields, and ethanol producer profitability. Increased exports of ethanol to Brazil in 2015 may be supported by an increase in the Brazilian ethanol blend level from 25% to 27%, which took effect in mid-March.



Pigs Gain Same with Corn-Ethanol Co-product as with Corn-Soybean Meal

Distillers dried grains with solubles, or DDGS, are increasingly common in swine diets in the United States. In recent years, different types of DDGS have come on the market.

"Ethanol plants use different procedures to produce DDGS, which results in different end products," said Hans H. Stein, a professor of animal sciences at University of Illinois.

"To produce conventional DDGS, the corn is cooked to gelatinize starch prior to fermentation. However, uncooked DDGS can also be used if specific enzymes are used to pre-digest the starch prior to fermentation. Some ethanol plants also use a different fractionation technology to produce DDGS with more protein than conventional DDGS."

Stein's team tested diets containing 30 percent conventional DDGS (DDGS-CV), high-protein distillers dried grains (HP-DDG), or uncooked DDGS (DDGS-BPX), and compared them with a corn-soybean meal basal diet. They conducted one experiment using growing pigs and another experiment using finishing pigs to determine if the stage of growth of pigs affected their utilization of the different ingredients.

Results indicated that pigs fed DDGS-CV, HP-DDG, or DDGS-BPX had no differences in average daily gain, average daily feed intake, and gain to feed ratio compared with pigs fed the basal diet. This was true for both growing and finishing pigs.

With a few exceptions, there was no difference in retention of energy, protein, or lipids between pigs fed the test ingredients. Growing pigs fed the basal diet retained more protein than pigs fed DDGS-CV or HP-DDG. Finishing pigs fed DDGS-BPX had greater lipid gain than pigs fed DDGS-CV. Net energy in DDGS-CV was greater than in HP-DDG or DDGS-BPX if fed to finishing pigs, but that was not the case if fed to growing pigs.

"Results from this study indicate that whereas there are some differences in retention of energy and nutrients among the different sources of DDGS, these differences are not of such a magnitude that they affect growth performance," said Stein. "Conventional, high-protein, or uncooked DDGS can be included at up to 30 percent in growing and finishing pig diets without a negative effect on performance."

The study, "Effects of co-products from the corn-ethanol industry on body composition, retention of protein, lipids and energy, and on the net energy of diets fed to growing or finishing pigs," was published in a recent edition of the Journal of the Science of Food and Agriculture. It was co-authored by Nestor Gutierrez, Dong Yong Kil, Yanhong Liu, and James Pettigrew.



FAA Streamlines Rules to Speed Up Permits to Fly Drones

(AP) -- Federal aviation officials, battered by complaints that bureaucratic hurdles are preventing industry from realizing the economic benefits of drones, announced Tuesday they are streamlining rules to expedite permits to fly small, commercial unmanned aircraft.

The Federal Aviation Administration made the announcement an hour before a congressional hearing at which an Amazon.com executive complained that the agency took too long to approve a request to flight test a delivery drone. The model of drone was already obsolete when the request was finally granted last week.

Drone industry officials have complained that FAA's restrictions on testing are forcing U.S. companies to do their testing overseas and giving foreign competitors a leg up.

"We don't test it anymore. We've moved on to more advanced designs that we already are testing abroad," said Paul Misener, Amazon's vice president for global public policy at a hearing of the Senate Commerce, Science and Technology's aviation subcommittee.

Amazon submitted a new request to the FAA last Friday -- the day after the previous request was granted -- for permission to test fly a more advanced drone, Misener said. "We are hopeful that this permission will be granted quickly," he said.

The company is also asking FAA for permission "to rapidly modify our test vehicles without administrative delays associated with every change," Misener said.

By contrast, European regulators are "enthusiastically pursuing" an approach that is "eminently reasonable" and "mindful of the tremendous opportunities for innovation and economic benefits" that drones present, he said.

FAA officials have been cautious about granting permission both to companies who want to test drones for future operations like Amazon and to companies that want to use drones now. Agency officials have said their tight restrictions are necessary to prevent collisions between drones and manned aircraft, especially since drones don't show up on radar and drone operators have limited ability to "see and avoid" other aircraft.

Last year, the FAA began granting permits on a case-by-case basis to companies that want to use drones for aerial photography, to monitor crops and pipelines, and to inspect bridges, cell phone towers, oil platforms and other tall structures, among other uses. But the agency has a backlog of nearly 700 permit applications, and the list is growing.

Under the streamlined rules, the FAA will grant blanket flying permission to applicants whose drones weigh less than 55 pounds and who agree to keep flights under 200 feet, to fly only in the daytime, and to keep away from airports.

The permits FAA has granted thus far also require operators to keep drones within line of sight of operators. That severely limits the distance drones can fly and would prevent the kind of deliveries Amazon envisions.

Amazon wants to use drones weighing less than 50 pounds to deliver small packages to customers within 30 minutes or less. That would entail flying "distances of 10 miles or more, well beyond visual line of sight," Misener said.



Louis Dreyfus Remains Private

Louis Dreyfus Commodities B.V., a privately held agricultural trading firm since 1851, won't be going public.

Margarita Louis-Dreyfus, the largest shareholder and most powerful corporate board member at the family-controlled company, said Thursday she would increase her stake in the firm to 80%, dashing hopes of an initial public offering or sale of a stake. Louis-Dreyfus has steadily increased her holding since the death of her husband, Robert Louis-Dreyfus, in 2009.

"We are a long-term investor, and to be a long-term investor it's very important to have family control of the company," Louis-Dreyfus told reporters at a Paris news conference as the company reported a small increase in 2014 net profit.

The announcement settled for now any question about the company's ownership structure. Louis-Dreyfus had fueled speculation about changes because of her strong emphasis on developing the company's corporate governance and her desire that its business model and operations align more closely with those of a publicly listed business.

However, she didn't rule out the possibility that the company might seek a strategic partner to invest in the 20% still owned by other members of the Louis-Dreyfus family.

Louis-Dreyfus is also chairwoman of Louis Dreyfus Holding, which owns 85% of Louis Dreyfus Commodities. The other 15% is owned by employees.

Along with Archer Daniels Midland, Bunge and Cargill, the company dominates the global trade in agricultural commodities, which have been hurt by weak prices in recent months.

Still, Louis Dreyfus said Thursday its net profit inched higher to $648 million last year as weak commodities prices made for a difficult operating environment. The steady earnings follow a nearly 30% decline in net profit in 2013 because of the effects of a severe drought in the U.S.

"We're in a phase where the commodity cycle is slower and margins are lower and if you look at our peers, profitability is not at its peak, so it's quite a performance to be able to maintain our profit performance," said Executive Chairman Serge Schoen.

Last year, bumper crops put downward pressure on the price of agricultural commodities, leading to a 13% decline in operating results from the company's merchandising unit, which focuses in trading such products as sugar, cotton and coffee. However, companies like Louis Dreyfus also benefited from increased volumes passing through industrial and logistical assets, boosting results in the companies' value chain operations.

Shipped volumes, which the company said was a better sign of performance in a depressed price environment, rose 4% to 80 million tons. Return on equity was 14%.

"These results prove that our business model and strategy, combining processing and logistics operations with merchandising expertise, is a great recipe for success," Schoen said.

Louis Dreyfus intends to maintain its current rate of investment, planning to spend $4 billion over the next 5 years as it considers its strategic goals for the next 10 years.

Meanwhile, it has yet to find a new CEO after an attempt to hire ex-Viterra Inc. boss Mayo Schmidt fell through late last year because of a disagreement over the terms and conditions of his employment. The company said the delay in finding a new CEO hadn't affected its operations and strategy and that it will take its time to consider other possible candidates to make sure it finds someone who fits the culture.