Friday August 7 Ag News

HAYING WET MEADOWS THAT ARE TOO WET
Bruce Anderson, Nebraska Extension Forage Specialist

               The extra rain received by central and western regions this year has been mostly welcome.  But it has raised havoc with making hay, especially on wet meadows.

               Wet meadows are a great resource.  Their natural subirrigation enables them to reliably grow many of the plants cut for winter hay for many ranches.

               This year, however, many of these meadows have had too much of a good thing – rain.  Not only have frequent rain showers made it difficult to put up the hay, many meadows are so wet it’s been impossible to even get in to cut the hay.

               So what do you do?  I suppose you can continue to wait until the ground dries and firms up enough to drive haying equipment over it.  But the quality of this late cut hay isn’t going to be very good and the cost of putting it up will be high.  And for many of you, much of your summer hay crew will soon go back to school.

               Maybe a better idea would be to winter graze the meadows instead of cutting hay.  You might need to build some temporary fence and figure out how cattle will be watered, but there are several advantages to this approach.  First, it saves you the time and expense of cutting and feeding hay.  Also, it reduces the risk of damaging the meadow with heavy equipment running over it when it’s too soft.  Cattle won’t cause damage if you graze only when the ground is firm or frozen.  And finally, research on both meadows and uplands has shown that dry cows do well when winter grazing, often needing just a little protein supplement to assure good fiber digestion and healthy calves.

               With all these advantages, I wouldn’t be surprised if some of you ranchers who try it decide to do at least some of it on a regular basis. 



Iowa Meets Inspection Goal for EPA Animal Feeding Plan

DNR's work to comply with a five-year agreement with the U.S. Environmental Protection Agency Region 7 is right on track. DNR staff completed 41 percent of required animal feeding operation inspections in its first two years of the work plan.

"Our biggest effort is to complete the required 8,582 inspections, working to identify any hog, cattle, dairy or other operations that need National Pollutant Discharge Elimination System (NPDES) permits," said Barb Lynch, chief of DNR's field services and compliance. "We agreed to complete about 20 percent of the inspections each year.

"Since the majority of larger facilities in Iowa are confinements, with animals housed under a roof and state law requiring manure containment, most facilities we inspect do not have problems with manure runoff," she added. "We've worked to ensure those that do have problems receive the appropriate enforcement actions, some of which result in new NPDES permits."

The latest progress report on the work plan is available at www.iowadnr.gov/afo/. Look for the EPA/DNR Workplan heading on the left.

Ongoing work plan efforts include enforcement actions, which are taken as needed, identifying previously unknown animal feeding operations and completing annual training requirements to ensure consistency in inspections and enforcement across Iowa.

Other priorities for field staff include responding to complaints and spills.

During the first year of the agreement, efforts focused on updating state regulations to be consistent with federal requirements and developing standard forms and procedures.

"With additional funding from the state, we were able to hire new staff for this intensive effort," Lynch said. Training for new and existing staff began in January 2013 and continues each year with ongoing refreshers.



FARMLAND Film Helps Educate at Iowa State Fair

This year's Iowa State Fair Aug. 13-23 will feature special screenings of the film FARMLAND. The event will be open to the public and hosted by the Iowa Agriculture Literacy Foundation.

The 44 minute film from award-winning director James Moll follows the lives of farmers and ranchers in their twenties, all of whom are now responsible for running their farming business. The film explores the risks and rewards associated with farming and the passion that is passed down from generation to generation.

"Many Americans have never set foot on a farm or ranch," said Iowa Agriculture Literacy Foundation executive director Will Fett. "Few have met or talked to the people who grow and raise the food we eat. This film will let them connect with modern agriculture in a whole new way."

The event will help attendees of the fair connect with the issues that farmers and ranchers face. It recognizes the contributions of agriculture providing a safe and affordable food supply. After the film, guests will be invited to ask questions of a panel of experts from the agriculture industry. The panel will comprise of farmers from around Iowa including Secretary of Agriculture Bill Northey.

The event will be held at in the Maytag Family Theaters building on the Iowa State Fairgrounds and is free to the public. The screening will begin at 1pm every day of the fair Aug. 13-23 with the panel discussion immediately to follow.

This film screening is a cooperative effort of agriculture business and commodity groups including; DuPont Pioneer, Iowa Beef Industry Council, Iowa Corn Growers Association, Iowa Farm Bureau Federation, Iowa Pork Producers Association, and the Iowa Soybean Association.



New ‘Ag Mag’ Helps Students Beef Up Food Production Knowledge

A new beef “Ag Mag,” developed by the American Farm Bureau Foundation for Agriculture and funded in part by the Beef Checkoff, is available for purchase in classroom sets of 30 and in free eReader format.

The Ag Mag, a newspaper-style reader, features information about beef production, nutrition and related careers, and encourages discussions about the industry in the classroom and at home. The Ag Mag is aligned to national learning standards and is written at a fourth-grade reading level, although the interest level is very broad. The Ag Mag and other beef education resources developed by the Foundation can be found at http://www.agfoundation.org/resources/learn-about-beef.

“The Beef Ag Mag was designed not only for classrooms, but also to be used by families and other youth groups as they learn where their food comes from,” said Julie Tesch, executive director of the Foundation.

In addition to the beef-based curriculum, the Ag Mag features four agricultural leaders who play different roles within the industry. The featured leaders include a meat scientist from Minnesota and cattle ranchers from Nebraska, Mississippi and Idaho.

“These leaders represent a great cross-section of the industry that both youth and adults will enjoy getting to know,” Tesch said. “All of these leaders are committed to providing superb animal care, producing a nutritious product and sharing the story of their ranch.”

The Beef Checkoff Program funded the development of the new beef Ag Mag. The Beef Checkoff Program (www.MyBeefCheckoff.com) was established as part of the 1985 farm bill. The checkoff assesses $1 per head on the sale of live, domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. In states with qualified beef councils, states retain up to 50 cents of the dollar and forward the other 50 cents per head to the Cattlemen’s Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval.

The Foundation’s Ag Mag series includes apples, bees, corn, dairy, energy, pizza, poultry, soybeans and careers in agriculture. These educational resources, along with the beef Ag Mag, are available at www.agfoundation.org.



Dive In! Exploring the Science of Water and Food Production

“Dive in! Exploring the Science of Water and Food Production,” is a new educational resource developed for students in sixth to eighth grade by the American Farm Bureau Foundation for Agriculture.

The “Dive in!” kit includes five lesson plans and is aligned to national learning standards. The kit is designed to develop 21st century competencies in students as they collaborate in learning groups, communicate key messages and use innovation to develop new solutions. Educators and classroom volunteers will find the kits engaging and easy to use.

The “Dive in! Exploring the science of water and food production” kit is available for purchase on agfoundation.org.

Other recently released educational materials available from the Foundation include Farm a Month, Farm to Cart and Grocery Grab.



Celebrating a Decade of Success Under the RFS

Saturday, August 8, will mark the tenth anniversary of when President Bush signed the bipartisan Renewable Fuel Standard (RFS) into law. The policy, which is slated to last until 2022, has been an overwhelming success and it is accomplishing the very goals it was designed to achieve. In recognition of this momentous anniversary, Tom Buis, CEO of Growth Energy, issued the following statement:

“The RFS has been an overwhelming success and it is important that we as a nation recognize how much this policy has done to help improve the lives of all Americans. This bipartisan law was passed in Congress in 2005 and strengthened in 2007 with several policy goals: energy security, job creation and reduced greenhouse gas emissions. I am pleased to say that it has done that and more.

“Since the enactment of the RFS, we have reduced our dependence on foreign oil by more than half — from 60 percent to 27 percent. We have created nearly 400,000 jobs that cannot be outsourced and our industry is helping mitigate climate change by reducing harmful greenhouse gas emissions. Furthermore, no beaches have ever been closed because of an ethanol spill – and that is something to celebrate as Americans across the country take their vacations over the summer to beaches near and far.

“By using the level of biofuels contained in the RFS, greenhouse gas emissions will be reduced by 138 million metric tons– the equivalent of taking 27 million cars off the road. In 2014 alone, the 13.4 billion gallons of ethanol blended into gasoline in the United States helped reduce greenhouse gas emissions by approximately 38 million metric tons, which is the equivalent of removing roughly 8 million cars from the road.

“So tomorrow, the American farmer, the backbone of our country, will acknowledge this anniversary as an important milestone increasing new markets and economic opportunity for their families and communities. Furthermore, consumers across the country will also celebrate this anniversary because ethanol provides them a choice and a savings at the pump.

“The RFS is the only meaningful policy to help break Big Oil’s stranglehold on the liquid fuels marketplace. The RFS is working. It is doing exactly what it was intended to do, with great success. That is why we should acknowledge this historic milestone, but more importantly, the success of the RFS should renew Congress’ and EPA’s faith in this program. They must ensure we continue down a path of renewable fuel innovation by continuing to support the RFS and refusing to accept the status quo of foreign oil and fossil fuels as our transportation energy future.”



National Attorneys General Agriculture Committee Formed

South Dakota Attorney General Marty Jackley, as president of the National Association of Attorneys General announced the newly created National Attorneys General Agriculture Committee. Arkansas Attorney General Leslie Rutledge and Iowa Attorney General Tom Miller have been tasked with the important responsibility of serving as Co-Chairs for this committee. Other committee members include: Attorneys General Doug Chin (Hawaii), Cynthia Coffman (Colorado), Brad Schimel (Wisconsin), Derek Schmidt (Kansas), Bill Sorrell (Vermont) and Greg Zoeller (Indiana).

"The State Attorneys General have always taken a proactive approach to recognizing important issues that directly impact our States. The newly formed Agriculture Committee will allow us to address the 21st century legal challenges facing our farmers, ranchers and the agriculture industry," said Attorney General Jackley.



NPPC, FARM BUREAU FILE BRIEF IN EPA DATA RELEASE CASE

The National Pork Producers Council and the American Farm Bureau Federation (AFBF), in a brief filed this week, asked the U.S. Court of Appeals for the Eighth Circuit in St. Louis to reverse a U.S. District Court’s decision to dismiss their lawsuit against the U.S. Environmental Protection Agency for its release to environmental activists personal data on thousands of livestock farmers.

The lower court ruled that NPPC and AFBF lacked “standing” to bring the case, which stems from EPA’s February 2013 release of information from farms in 30 states to the Natural Resources Defense Council (NRDC), Earth Justice and the Pew Charitable Trusts under Freedom of Information Act (FOIA) requests the groups filed. In some instances, the data contained farmers’ home addresses, phone numbers, e-mail addresses and personal medical information. After objections from NPPC, AFBF and other farm groups, EPA requested that the environmental organizations return the data but reissued it after redacting some of the information. The reissued data still contained some personal information on farmers.

In July 2013, the agency was set to release more data when the U.S. District Court for the District of Minnesota court issued a restraining order. That court in April dismissed the case.



Cargill reports fourth-quarter and full-year fiscal 2015 earnings

Cargill this week reported a net loss of $51 million in the fiscal 2015 fourth quarter ended May 31, 2015, compared with earnings of $376 million in the same period a year ago. Fourth-quarter revenues were $28.4 billion, compared with $36.2 billion in the year-ago period.

For the full fiscal year, Cargill earned $1.58 billion, a 13 percent decrease from $1.82 billion* in the prior year. Revenues decreased 11 percent to $120.4 billion. Cash flow from operations totaled $3.82 billion, up 1 percent from fiscal 2014.

“While several Cargill businesses generated very strong earnings in fiscal 2015, we lagged results from the prior year and did not meet our own expectations,” said David MacLennan, Cargill’s president and chief executive officer. “The economic environment remains sluggish in many emerging markets where we have invested significantly over the past several years. Even so, we aim for growth and profitability through these cycles. We are moving forward with good progress on changes begun last year to optimize the business portfolio, reduce costs and increase operational effectiveness.”

MacLennan noted that for Cargill, how it achieves results is paramount. “Over the 150 years that Cargill has been in business, we’ve seen big changes in the marketplace, including today’s profound rise in the importance of sustainability. Given Cargill’s broad presence in food and agriculture, we’re in a good position to drive positive change. We want to be the most trusted source of sustainable products and services in our industry.”

In addressing the fourth quarter, MacLennan noted that all four of the company’s business segments were profitable. The loss in the three-month period resulted from charges taken at the corporate level, including an asset impairment related to the company’s enterprise resource planning (ERP) system and an additional charge related to Venezuela’s currency.

Segment performance:
Animal Nutrition & Protein posted increased profits for the full fiscal year, with strong performances in global animal nutrition, Central American poultry, and U.S. pork, turkey and egg further processing. The segment executed extremely well, drawing on its global reach, diverse products and services, and lower feed input costs. Softer results in some animal protein businesses held fourth-quarter earnings below the year-ago level. The biggest factor was the North American market, where high cattle costs decreased beef’s competitiveness relative to other meats. In the fiscal 2016 first quarter, Cargill agreed to sell its U.S.-based pork business to JBS USA Pork for $1.45 billion, pending regulatory review and approval.

Full-year earnings in Origination & Processing were up slightly for the year; fourth- quarter results lagged the year-earlier period. Recent years’ record-large crops in the Americas have seen the rebuilding of global agricultural commodity stocks, which reduced price volatility and limited market opportunities for many of the segment’s businesses. Adverse economic conditions hampered results in Argentina, as farmers held their crops; Brazil also experienced slower farmer selling due to lower global prices for corn and soybeans. Cargill’s evacuation and the subsequent armed occupation of its sunflower seed processing plant in Donetsk, Ukraine, in early July 2014 decreased earnings in that region during the following 11 months. In contrast to those geographies, results in North America were strong. The combination of a record U.S. soybean crop, limited supplies from South America and a strong export pull for most of the year boosted soybean crush volumes in North America, even in the typically slower fourth quarter. After months of unusually high grain-handling and export volumes in Canada, driven by the country’s very large 2013 and 2014 harvests, the segment’s grain origination returned to more normal levels in the fourth quarter. Alvean, the new Cargill-Copersucar sugar joint venture, got off to a very strong start in its first eight months of operations.

Earnings in Food Ingredients & Applications trailed the prior-year period for both the fourth quarter and full year. Areas of continuing strong performance included Cargill’s salt operations, which met high demand for deicing products during a harsh northeastern winter in North America. Ardent Mills, the North American flour milling joint venture formed by Cargill, ConAgra Foods and CHS in fiscal 2014, had a successful first year of operation. Elsewhere in food ingredients, earnings lagged. The economic slowdown and excess industry capacity in emerging markets decreased results, as did rapidly evolving consumer preferences in developed economies. Comprehensive efforts are underway to improve profitability and reshape the portfolio for better performance.

The Industrial & Financial Services segment posted an upturn in the fourth quarter, though not for the full year. The energy businesses, especially petroleum, performed significantly better than a year ago in both periods – a function of last fiscal year’s restructuring and good positioning during calendar 2014’s sharp drop in crude oil prices.



Fertilizer Maker CF to Buy OCI Assets

(Dow Jones) -- U.S. fertilizer maker CF Industries Holdings Inc. agreed to buy parts of a Dutch competitor for about $8 billion and shift its headquarters to the U.K., creating a global nitrogen-fertilizer powerhouse with a significantly lower tax bill.

The so-called tax inversion deal would combine CF with OCI NV's European, North American and global distribution operations. The transaction would create the world's largest publicly traded nitrogen fertilizer company and lower CF's overall tax rate to 20% from the current 34%, CF said.

Under the agreement, the companies plan to form a holding company domiciled in the U.K. in which shareholders of Deerfield, Ill.-based CF would own a 72.3% stake. The remainder would be held by shareholders in OCI. The deal is valued at $8 billion based on CF's current share price and the assumption of $2 billion in debt.

Tony Will, chief executive of CF, said on a conference call with investors Thursday that it pursued the purchase because of expansion prospects, not to lower its tax rate. "This is not a tax-driven deal," he said. "I would view this as a combination with great industrial logic."



DFA Proposes $50M Settlement

(AP) -- A national dairy marketing cooperative has agreed to pay a total of $50 million to thousands of Northeast dairy farmers in an amended settlement of a long-running lawsuit accusing the group of trying to drive down milk prices, but some farmers are opposed to the deal.

Under the proposal filed Wednesday, Dairy Farmers of America would pay an average of $4,000 to about 9,000 farmers. The settlement must be approved by a judge, who rejected a proposal in March.

The 2009 class-action lawsuit charged Dairy Farmers of America; its marketing arm, Dairy Marketing Services; and Dallas-based dairy processor Dean Foods with working together to monopolize the market for raw milk in the Northeast.

Dean Foods agreed to a settlement of $30 million in 2011. It covered farmers in Delaware, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia and the District of Columbia.

U.S. District Court Judge Christina Reiss rejected the previous settlement proposal mainly because some farmers opposed it.

They argued that they could be exposed to retaliation by the groups and said the estimated financial compensation of $4,000 per farm was “functionally irrelevant,” reflecting the cost of one “tractor tire,” the judge wrote in her decision. They contended the proposal's injunctive relief was insufficient and would allow the defendants to continue practices that led to the lawsuit, Reiss said.

The judge said it appeared there was strong opposition to the proposed deal on the following grounds: The monetary relief was inadequate if there were no significant changes to how defendants did business; the proposed release was overly broad; and, in light of the modest per-farm relief, lawyers would be the primary beneficiaries of the proposed settlement if their fees and costs were approved.

The farmers' attorneys requested fees of $16.6 million plus expenses in the first settlement proposal.

After negotiating, the two sides agreed to amend the settlement to address some of those concerns, but the settlement amount remained the same.

“We think it's a fair and reasonable settlement and that it's in the best interest of the farms,” said Kit Pierson, a Washington-based attorney for the plaintiffs.

But dairy farmer Jonathan Haar of West Edmeston, N.Y., who is a class representative, opposes the deal.

“We remain opposed to it. It's fundamentally the same settlement that the judge correctly recognized ... that the primary beneficiaries were counsel,” he said.

A spokeswoman for DFA said attorneys for both sides agreed to certain amendments to the earlier deal.

“It is believed that these changes will address the concerns, and we look forward to a final conclusion of the matter,” said Monica Massey of DFA.



AgriBank Reports Second Quarter 2015 Financial Results

Today St. Paul-based AgriBank announced financial results for the second quarter of 2015 with continued strong net income and credit quality, and robust liquidity and capital.

Highlights: 
-    Strong net income: Net income remained strong, but decreased $24.9 million, or 9.3 percent, to $241.7 million for the six months ended June 30, 2015. While net interest income remained relatively stable, the decrease was primarily driven by lower mineral income due to continued low oil prices and reduced mineral leasing activity.
-    Strong credit quality: Loan portfolio credit quality remained strong. Acceptable loans stood at 99.7 percent.
-    Robust liquidity and capital: Cash and investments totaled $15.9 billion at June 30, 2015, compared to $16.4 billion at the end of last year. End-of-the-quarter liquidity was 173 days, well above requirements established by the Farm Credit Administration (FCA), the Bank’s independent regulator. Regulatory capital ratios also remained above FCA minimums, with capital of $5.0 billion.

“AgriBank’s results for the quarter reflect our consistent strength in earnings and credit quality,” said Bill York, AgriBank CEO. “As is typical in the agricultural industry, producers face volatile markets and other challenges. However, with nearly 100 years of experience focused on our mission of supporting rural communities and agriculture by providing consistent and reliable credit, AgriBank and affiliated Associations have the expertise to help Farm Credit customers succeed today and tomorrow.”

Year-to-date 2015 Results of Operations
Net income decreased $24.9 million, or 9.3 percent, to $241.7 million for the six months ended June 30, 2015.

Net interest income decreased slightly to $255.3 million for the six months ended June 30, 2015, compared to $258.3 million for the same period in 2014. The decrease in net interest income was primarily attributable to increased interest expense on System-wide debt securities and changing earning asset mix. Earning asset mix changes were driven by increases in lower yielding assets in the liquidity investment portfolio and loans to affiliated Associations. Compressing spreads due to competitive pressures on the AgDirect and retail loan portfolios also contributed to lower net interest income. These negative impacts on net interest income were offset by growth in loan volume year-over-year.

Provision for loan losses was $3.0 million for the six months ended June 30, 2015, compared to $2.5 million for the same period in 2014.

Non-interest income decreased to $48.4 million for the six months ended June 30, 2015, compared to $63.4 million for the same period in 2014. This decrease was primarily driven by lower mineral income due to continued low oil prices and a reduction in mineral leasing activity.

Second Quarter 2015 Results of Operations
Second quarter 2015 net income was strong at $117.8 million, but down from $135.5 million for second quarter 2014. The decrease was primarily due to lower mineral income.

Loan Portfolio
Total loans declined slightly to $77.5 billion, primarily due to paydowns on real estate mortgage loans purchased through the Asset Pool program, partially offset by increases in loans to affiliated Associations. The strong liquidity and equity positions of many borrowers are reflected in the continued favorable credit quality of AgriBank’s loan portfolio. The portfolio had 99.7 percent acceptable-rated loans at June 30, 2015 and at the end of last year. Acceptable loans represent the highest quality assets. Credit quality has been steadily improving since 2009 and remains consistent with December 31, 2014; however, these strong positions are expected to revert to more normal levels over time as the commodity price outlook remains challenging.

Credit quality remains strong, with nonaccrual loans and the allowance for loan losses increasing only slightly from year-end.

The U.S. Department of Agriculture’s Economic Research Service (USDA-ERS) projects U.S. aggregate net farm income (NFI) to decline from the forecasted $108.0 billion in 2014 to $73.6 billion in 2015. The overall decline in 2015 NFI is driven by the expected decline in crop prices and a retreat from the record livestock and dairy prices of 2014. Production cost increases are expected to moderate in 2015, partially due to lower energy costs, but are still projected to show a minimal 1.0 percent increase. Despite the significant expected decline in 2015 farm incomes, the U.S. farm economy entered 2015 in perhaps its strongest financial condition in over 50 years.

The margin outlook for most crop producers looks challenging for the next five years with most forecasters projecting corn and soybean prices to be at or near break-even levels. Producers may benefit from USDA commodity title programs under the Agricultural Act of 2014 which could be triggered by lower commodity prices. These programs, combined with disciplined risk management practices and the generally strong financial condition of borrowers comprising the District’s crop portfolio, are expected to mitigate the initial impact of lower margins.

While challenging to the individual operations directly impacted, the recent avian influenza outbreak appears to have abated in recent weeks, with minor impacts to overall supplies. Egg-laying chickens have been impacted more than commercial turkey flocks, while broilers were mostly unaffected.

Capital Resources and Liquidity
Total capital increased $125.9 million during the period to $5.0 billion, driven primarily by net income, partially offset by patronage and dividends.

Cash and investments totaled $15.9 billion at June 30, 2015, compared to $16.4 billion at the end of last year. The Bank’s end-of-the-period liquidity position represented 173 days coverage of maturing debt obligations, well above the 90-day minimum established by AgriBank’s 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.