Wednesday May 6 Ag News

New Flex Fuel option in Lincoln

Shoemaker’s South fueling station (Highway 77 & Saltillo Road) in southwest Lincoln kicks off summer driving season by offering a new flex fuel option for drivers, E85—a blend of 85 percent American Ethanol and 15 percent gasoline.

Shoemaker’s adds to the more than 85 locations in Nebraska with E85/flex fuel pumps that offer American Ethanol-blended fuels for flex fuel vehicles. These flex fuel pumps were paid for in part by a grant provided by the Nebraska Corn Board. Over the last two years, Nebraska Corn Board, in cooperation with the Nebraska Ethanol Board, has helped the state more than double the number of locations that offer E85 and other American Ethanol-blended fuels, such as E10, E15 and E30.

“We have been working hard to get flex fuel pumps located across Nebraska,” said David Bruntz, farmer from Friend, Nebraska and director on the Nebraska Corn Board.  “Lincoln has so many flex fuel vehicles and it’s exciting to see flex fuel pumps go into this popular Lincoln location.”

Currently, one in seven Lincoln motorists drives a flex fuel vehicle, which can run on any blend of American Ethanol and gasoline, up to E85. To confirm your vehicle is flex fuel, look for a yellow gas cap, flex fuel emblem or check your owner’s manual.

When flex fuel drivers fill up on E85 and other American Ethanol-blended fuels, they’re improving air quality and reducing the causes of asthma, heart disease and lung cancer not only for themselves but also their children and grandchildren. E85 is approved as a Clean Air Choice® and when flex fuel drivers fill up with E85 rather than gasoline; they are significantly reducing carbon dioxide emissions that enter our air, according to the American Lung Association of the Upper Midwest.

The American Ethanol brand was created by a partnership between the National Corn Growers Association and Growth Energy and was originally introduced four years ago when NASCAR adopted E15 (15 percent ethanol) in its racing fuel.  Starting this May, the American Ethanol brand will appear on American Ethanol-blended fuel pumps at retail locations across Nebraska.

“Consumers like to have a choice when they are making a purchasing decision at the pump.  The decision to open flex fuel pumps at the Highway 77 and Saltillo Road location was based on an on-going demand we were seeing from our customers,” said Dave Shoemaker, owner of Shoemaker’s convenience stores in Lincoln, Nebraska. “E85 not only provides more options for our customers at the pump, but it’s also a fuel choice that is both good for the environment and consumer health.”

Grand opening details for the flex fuel pumps at Shoemaker’s South Highway 77 & Saltillo Road location will be available at a later date.

To find a list of retailers that offer E85 and other mid-level ethanol blends, visit the Nebraska Corn Board website at www.NebraskaCorn.org or the Nebraska Ethanol Board website at www.ethanol.nebraska.gov.



March Pork, Beef Exports Show Positive Momentum

Exports of U.S. pork and beef gained momentum in March after starting the year slowly, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Although pork exports were down from the large totals recorded in March 2014, export volume was the largest in 11 months at 191,041 metric tons (mt). This was 9 percent lower than a year ago, but a 10 percent increase from February. Export value of $495.3 million was down 18 percent year-over-year, but up 5 percent from February.

March beef exports totaled 86,774 mt, down 7 percent from a year ago but a 5 percent increase over February. Export value was $527.3 million, up 2 percent year-over-year but down slightly from February.

The March results reflect some degree of relief from the West Coast port congestion that plagued red meat exports in January and February. Port traffic began to improve after a tentative labor contract was reached in late February, though congestion lingered for several weeks at some major ports.

“Port congestion remained an issue well into March – and even into April in the Southern California ports – but the announcement of the new labor contract certainly improved the business climate,” said USMEF President and CEO Philip Seng. “After months of frustration, the U.S. meat industry was finally able to reassure Asian buyers that the worst of the crisis was behind us and that they could once again count on the U.S. to fulfill its role as a reliable supplier. This was especially important for customers purchasing chilled pork and beef, which require very prompt delivery due to product shelf life.”

In addition to shipping concerns, U.S. exporters have found their competitive position in some key markets damaged by large volumes of lower-priced products from other supplying countries. In many cases, diminished purchasing power due to the strength of the U.S. dollar has made the price disadvantage even more severe. Market access barriers also remain a concern in some markets, most importantly China and Russia.

“Closure of the Russian market to European pork continues to impact all major pork suppliers, as the EU has focused very aggressively on alternative markets in Asia,” Seng said. “In the beef complex, the projected slowdown in Australia’s production may still be coming, but certainly did not materialize in the first quarter.

“These are unusual conditions that are made more difficult by the strong U.S. dollar, but now isn’t the time to dwell on the stiff headwinds we are facing. We must aggressively defend the customer base the U.S. industry has worked so hard to build over the years by reaffirming the value and quality delivered by U.S. red meat.”

March pork export volume highest since April 2014
March pork exports accounted for 25 percent of total production and 21 percent for muscle cuts only – the latter being the largest percentage since July of last year. First-quarter ratios were 23 percent and 19 percent, respectively. Export value per head slaughtered was $50.10 in March, down nearly $20 from a year ago, but roughly steady with the per-head value recorded in March 2013. For the first quarter, per-head export value was $49.48, down 19 percent from last year and down 7 percent from the first quarter of 2013.

First-quarter pork exports to Mexico topped last year’s record pace by 7 percent in volume, reaching 179,507 mt, though value was down 6 percent to $321.2 million. Year-over-year growth in the first quarter was led by South Korea, where exports increased by 43 percent in volume (57,376 mt) and 55 percent in value ($180.4 million). Exports to Canada were up 2 percent in volume (48,905 mt) while export value was steady with last year’s pace at $192.4 million.

Offsetting these results, however, were lower exports to Japan and China/Hong Kong. First-quarter exports to Japan declined 13 percent in volume (103,921 mt) and 19 percent in value ($386.6 million) as Japan’s total imports slowed after accumulating large frozen inventories of EU pork. Exports to China/Hong Kong fell 40 percent in volume (67,754 mt) and 42 percent in value ($152.1 million) in the first quarter, although March exports were the largest in 12 months. Results in Latin American markets were mixed, with year-over-year growth achieved in the Dominican Republic, Honduras, Guatemala and Panama, but exports declined to Colombia and Chile.

Japan, Mexico still mainstays for U.S. beef
March beef exports accounted for 10 percent of total production and 13 percent for muscle cuts only, slightly exceeding first-quarter ratios but down from 11 percent and 14 percent, respectively, from March 2014. Export value per head of fed slaughter was $284.30 in March, up 5 percent from a year ago. For the first quarter, per-head export value was $290.32, up 9 percent.

So far in 2015, beef exports to Japan have performed extremely well despite significant obstacles – including the West Coast port situation, a weakened Japanese yen and a tariff advantage for Australian beef under the recently implemented Japan-Australia Economic Partnership Agreement. First-quarter exports to Japan increased 4 percent in volume (48,347 mt) and 11 percent in value ($322.8 million). Exports to Mexico increased 4 percent in value ($285 million) despite slipping 1 percent in volume (56,582 mt).

Beef exports to Korea got off to a very slow start in 2015, but continued to gain momentum in March. First-quarter volume was still down 4 percent from a year ago to 27,624 mt, but export value was up 2 percent to $204.1 million. Exports to Taiwan trended in the opposite direction, slowing in March after a very solid start. First-quarter volume to Taiwan was down 10 percent to 6,382 mt, while value was up 11 percent to $64.1 million. Exports to Hong Kong, which were record-large in 2014 but slowed toward the end of the year, were down 21 percent in volume (27,841 mt) and 6 percent in value ($211.9 million) in the first quarter.

March lamb exports steady; first-quarter totals lower year-over-year
March exports of U.S. lamb were down slightly in volume (728 mt) from a year ago but steady in value at $1.92 million – the largest monthly value total since November. First-quarter exports were down 14 percent in volume (2,271 mt) and 18 percent in value ($5.36 million) as growth in the Caribbean and Middle East was offset by lower totals for Mexico and Canada.




Ethanol Inventories Fall

U.S. Energy Information Administration data released Wednesday shows ethanol inventories fell for the second straight week as domestic production tumbled to a 6-1/2 month low.

The report detailed a 35,000 barrel (bbl) decline in ethanol stocks during the week-ended May 1 to 20.762 million bbl while domestic production fell 34,000 barrels per day (bpd) to 887,000 bpd.

On year-over-year basis, total stocks were 21.1% higher while production was down 0.8%.

Blender inputs, a gauge for ethanol demand, eased for the second straight week, down 5,000 bpd to 870,000 bpd for the week-ended May 1 while up 2.8% year over year.

Implied demand for gasoline fell 135,000 bpd last week to 8.785 million bpd, although 0.8% higher than the same week last year.



NFU Encourages Support for Reauthorization of Livestock Mandatory Price Reporting

National Farmers Union (NFU) President Roger Johnson today encouraged Congress to reauthorize the Livestock Mandatory Price Reporting Act — an important tool in combatting problems caused by high concentration and vertical integration in livestock markets — and offered suggestions for making the price reporting data a more effective and usable tool for family farmers and ranchers.

“Price reporting is an important tool in addressing the market failures caused by the high levels of concentration in livestock markets,” said Johnson in a letter to Chairman Pat Roberts, R-Kansas, and Ranking Member Debbie Stabenow, D-Michigan, of the U.S. Senate Committee on Agriculture, Nutrition and Forestry. “NFU encourages the Senate to review and reauthorize the Livestock Mandatory Price Reporting Act in an open and transparent process.”

Johnson offered a series of suggestions for improving cattle reporting in order to capture more transactions and ensure the data is more accurate and usable. Those suggestions include:

    Data omitted from public reports due to the confidentiality rule (3/70/20 confidentiality guideline) should be aggregated both weekly and regionally.

    Clarify reporting definitions for cattle such that it is consistent with country-of-origin-labeling. Mandatory Price Reporting (MPR) data considers cattle to be of domestic origin even if they are imported, so long as they spend some time in U.S. feedlots. A recent report by Dr. Bob Taylor of Auburn University found this loophole resulted in roughly one million cattle per year failing to show up in MPR data, while showing up in trade statistics.

    Require weekly reporting of market concentration through the use of the Herfindahl-Hirschman Index (HHI) for both captive supplies and cash transactions. This should be reported both regionally and nationally.

    Improve usability of the MPR Dashboard and Data Mart, including prominent display of definitions for reports, weekly histograms with the day of the week for negotiated sales, and graphs showing the thinness of the cash market by day.

    Separate the data for forward contracts from those tied to the futures market.

Johnson noted that the latest estimate for the four-firm concentration ratio (CR4) in beef indicates that the top four meatpackers control 85 percent of the market share - a serious competition issue reflected across the U.S. livestock industries.

NFU has worked to address farmers’ and ranchers’ power in the marketplace since 1902. “NFU has a long history of addressing competition issues in the marketplace and advocating on behalf of family farmers and ranchers,” said Johnson. “At our recent annual convention, delegates approved a special order of business on transparency in livestock markets noting the importance of mandatory price reporting to address substantial changes in livestock markets.”

Johnson also sent a similar letter to Chairman Michael Conaway, R-Texas, and Ranking Member Collin Peterson, D-Minnesota, of the House Committee on Agriculture.



Mexico Still Largest Buyer of U.S. Ag Exports

Intraregional agricultural trade among the United States, Canada, and Mexico has grown since the implementation of the North American Free Trade Agreement in 1994. According to the USDA, agricultural imports from NAFTA partners between 2011-13 accounted for 80 percent of Mexico's total agricultural imports, 63 percent of Canada's imports, and nearly 40 percent of all U.S. agricultural imports.

Roughly two-thirds of U.S. agricultural imports from Mexico consist of beer, vegetables, and fruit.

These imports are closely tied to Mexico's historical expertise in producing alcoholic beverages and a wide range of fruit and vegetables, along with favorable climates with growing seasons that largely complement those of the United States.

Meat, grains, vegetables, fruit, and related products make up roughly 60 percent of U.S. agricultural imports from Canada, while grains, fruit, vegetables, meat, and related products accounted for about 61 percent of U.S. agricultural exports to Canada.

Grains, oilseeds, meat, and related products make up about three-fourths of U.S. agricultural exports to Mexico.



‘Get a Move on for GMOs’ Helps Farmers Stand Up for Biotechnology

GetaMoveOn.fb.org is Farm Bureau’s just-launched advocacy website that gives farmers and ranchers a simple way to “Get a Move On” for GMOs. Through the website, farmers can easily express support for a national, science-based labeling standard, like the approach taken in the Safe and Accurate Food Labeling Act (H.R. 1599).

“Now is the time for farmers and ranchers to take action in support of innovation in agriculture,” said American Farm Bureau Federation President Bob Stallman. “Access to crop traits that resist pests, diseases and drought stress is helping farmers across the nation grow more food using less land, water, fuel and pesticides,” Stallman said. “Biotechnology will offer even more benefits in the future.”

From the website, farmers and ranchers can send House members emails encouraging “yea” votes for the Safe and Accurate Food Labeling Act. The bill will clarify the Food and Drug Administration as the nation’s foremost authority on food safety and create a voluntary labeling program run by the Agriculture Department’s Agricultural Marketing Service, the same agency that administers the USDA Organic Program.

The legislation will provide a federal solution to protect consumers from a confusing patchwork of 50-state GMO labeling policies, and the misinformation and high food costs that would come with them.

Through GetaMoveOn.fb.org, farmers can not only connect with their lawmakers, but find state-by-state fact sheets detailing the value and share of GMO crops in each state. They can then share this information in their emails.

“It’s critical that we as farmers help our lawmakers understand that there’s a cost associated with discouraging agricultural innovation,” Stallman said. “That cost will go well beyond the higher prices consumers will pay at the supermarket if each state passes its own GMO labeling law,” he added.

In addition to the advocacy site, Farm Bureau’s grassroots toolkit continues to be a helpful resource for farmers and ranchers who want to share the many positives about biotechnology with policymakers, community members and others. Accessible at fb.org/biotech, this free online resource includes an overview of biotechnology; an explanation of biotechnology’s benefits to consumers, the environment, farmers, the U.S. economy, and more; links to credible sources for biotech information; and avenues for getting active on social media.

A strong consumer-focused resource is GMOAnswers.com, which allows people to ask any and all questions about GMOs. Responses come from independent experts in leading academic institutions, industry groups and representatives from Biotechnology Industry Organization member companies. The website also features studies, articles and safety data.



'Move America' Bill to Boost Infrastructure Investment

Senator John Hoeven, R-N.D. and Senate Finance Committee Ranking Member Ron Wyden, D-Ore., introduced legislation that would bring billions of dollars of investment to state and local government to help grow and repair America's aging infrastructure. The bill, the "Move America Act of 2015," would expand tax-exempt private activity bonds and create a new infrastructure tax credit, giving states significant flexibility to pursue infrastructure projects that are badly needed across the country.

"Move America bonds and tax credits are an effective way to leverage private-sector dollars to build the infrastructure we need across the country to grow America's economy and create jobs," Hoeven said. "It's fully paid for so it doesn't increase the deficit, and we've designed it to work with the P3 partnership program, so it could be particularly helpful in funding permanent flood protection in the Red River Valley."

"To get the American economy moving again, Congress needs to pursue every avenue it can to take on the growing infrastructure crisis," Wyden said. "Move America will turbocharge investment and give states and localities the flexibility they need to quickly and efficiently break ground on projects. An injection of private capital, in addition to sustainable funding for transportation programs, will help get America's economic engine running at full speed."

The Move America program is designed to leverage additional private investment in our public infrastructure. The program creates Move America Bonds, to expand tax-exempt financing for public-private partnerships, and Move America Credits, to leverage additional private equity investment at a lower cost for states. Through cheaper and more flexible access to debt and equity, Move America gives states the tools they need to expand investment in roads, bridges, ports, rail, and airports.

The American Society of Civil Engineers (ASCE) has stated that the country needs over $3.6 trillion of additional investment by 2020. To address this critical investment need, it is important to ensure the solvency of the trust funds for highways, airports, ports and waterways, but it is also vital that the federal government do what it can to leverage greater private investment in infrastructure.

Greater use of private capital through public-private partnerships ("P3s") could serve as a helpful addition to increased federal infrastructure funding through the infrastructure trust funds. P3s provide two major benefits: the private investment provides an injection of upfront capital financing, and the risk-transfer to private parties can bring increased efficiency to the design, construction, and maintenance process. While not all projects are feasible for P3s, they can play a helpful, additive role for public infrastructure, in concert with robust public funding.



NCGA Offers Members Exclusive Discount on Succession Planning Tool

Succession planning is, or should be, a high priority for most American farmers. According to the USDA, 70 percent of farmland will change hands in the next 20 years. If a farm family has not adequately planned for succession, the farm is likely to go out of business, be absorbed by a large farming neighbor, or be converted to non-farm use. This crisis-in-the-making comes at a time when land prices are out-stripping some farmers' ability to grow their operations and fewer members of the family are involved in day-to-day farming. 

Because the National Corn Growers Association is dedicated to strengthening member farmers, maintaining a healthy organization and continuing prosperity for the industry, NCGA offers an exclusive discount when using eLegacyConnect, a dynamic online succession planning community.

"NCGA always strives to provide a rich portfolio of membership benefits that helps farmers maximize their opportunities today and to build a better tomorrow for their families," said NCGA Grower Services Action Team Chair Tom Haag. "Through the eLegacyConnect benefit, we offer a valuable discount on a service that will help farmers develop a concrete succession plan to ensure the future well-being of their operations."

The service provides educational resources, action plans, community forums and a number of meaningful experiences to help farm families achieve their succession planning dreams. It has a growing roster of qualified advisors to answer questions and interact with engaged family members in real-time. Additionally, it offers a slate of weekly webinars and regular podcasts to inform the community. eLegacyConnect's FarmPartner resource is a first-of-its-kind matchmaker to help aspiring farmers connect with transitioning farmers for career opportunities, mentor/protégé relationships and ownership transitions.  



The Andersons, Inc. Reports First Quarter Results

The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the first quarter ended March 31, 2015.

Highlights
-    Base grain pre-tax income up $6.9 million year over year
-    Rail Group leasing pre-tax income up 18 percent year over year
-    Ethanol Group pre-tax income of $5.3 million despite challenged markets
-    Good planting progress and higher ethanol margins point to a good full-year outlook

"As expected we experienced a soft start to 2015, yet conditions in the markets we serve give us optimism for the full year. During the first quarter we delivered year-over-year improvements in our core grain and rail leasing businesses. Additionally, our Ethanol Group remained profitable despite reduced industry margins during the seasonally weak first quarter," said CEO Mike Anderson. "Also, we are successfully integrating our 2014 acquisitions which contributed more than $1.0 million in pre-tax income for the quarter."

Key Highlights
Net income for the first quarter of 2015 attributable to the Company was $4.1 million, or $0.14 per diluted share.  Last year net income was $22.7 million, or $0.80 per diluted share. When excluding the partial redemption of our investment in Lansing Trade Group last year, adjusted net income was $12.1 million, or $0.42 per diluted share.  (See the Reconciliation to Adjusted Net Income Table for a discussion and reconciliation of income and adjusted income.) First quarter 2015 revenues were $950 million compared to $1.0 billion in revenues the same time last year.

    The Ethanol Group achieved record first quarter ethanol production volumes and saw E-85 sales progress to a first quarter record as well.

    The Rail Group's utilization rate has increased for nine consecutive quarters and averaged 91.8 percent during the quarter.

    The Rail Group's lower pre-tax income was due to gains on railcar sales being down $6.3 million this quarter versus the same time last year.

    The Plant Nutrient Group experienced lower volumes than expected this quarter due to poor weather conditions at the start of the planting season.

    This quarter, the Company has merged the former Turf & Specialty and Plant Nutrient groups. Going forward the group will be known as the Plant Nutrient Group.

    The Company repurchased 631,000 of The Andersons' common shares during the quarter which offsets the shares issued as part of the acquisition of Auburn Bean & Grain.