Wednesday August 12 Ag News

NEBRASKA CROP PRODUCTION REPORT

Based on August 1 conditions, Nebraska's 2015 corn crop is forecast at 1.66 billion bushels, up 4 percent from last year, according to the USDA’s National Agricultural Statistics Service. Acreage harvested for grain is estimated at 8.90 million acres, down 1 percent from a year ago. Average yield is forecast at 187 bushels per acre, up 6 bushels from last year and the highest of record.

Soybean production in Nebraska is forecast at 288 million bushels, unchanged from last year. Area for harvest, at 5.15 million acres, is down 4 percent from 2014. Yield is forecast at 56 bushels per acre, up 2 bushels from last year and the highest of record.

Nebraska’s 2015 winter wheat crop is forecast at 52.0 million bushels, down 27 percent from last year. Harvested area for grain, at 1.30 million acres, is down 10 percent from a year ago. Average yield is forecast at 40 bushels per acre, down 9 bushels per acre from 2014.

Sorghum production of 20.2 million bushels is up 54 percent from a year ago. Area for grain harvest of 220,000 acres, is up 38 percent from last year. Yield is forecast at 92 bushels per acre, up 10 bushels from last year.

Oat production is forecast at 2.16 million bushels, up 35 percent from last year and the largest since 2008. Harvested area for grain, at 30,000 acres is up 10,000 acres from last year. Yield is forecast at 72 bushels per acre, down 8 bushels from 2014.

Dry edible bean production is forecast at 3.3 million cwt, down 12 percent from last year. The average yield is forecast at 2,400 pounds per acre, down 100 pounds from last year. Acres planted by class are as follows: Pinto, 83,000; Great Northern, 36,000; Light Red Kidney, 22,000; Black, 4,000; All Other, 4,000.

Sugarbeet production is forecast at 1.23 million tons, down 8 percent from 2014. Area for harvest, at 47,000 acres, is up 2 percent from last year. Yield is estimated at 26 tons per acre, down 2.9 tons from a year ago.

Alfalfa hay production is forecast at 3.20 million tons, down 6 percent from last year. Expected yield, at 4.00 tons per acre, is down 0.1 ton from last year. All other hay production is forecast at 3.06 million tons, up 17 percent from last year. Expected yield, at 1.70 tons per acre, is up 0.2 ton from last year.



IOWA CROP PRODUCTION REPORT

Iowa corn production is forecast at 2.43 billion bushels according to the latest USDA, National Agricultural Statistics Service Crop Production report. If realized, the production would be the highest on record, 1 percent above the previous high from 2009. Based on conditions as of August 1, yields are expected to average 183 bushels per acre, an increase of 5 bushels per acre from last year. If realized, the yield will be the highest on record, 2 bushels above the previous high set in 2009. Corn planted and harvested for grain acreage is estimated at 13.7 million and 13.3 million acres, respectively.

Forecasted production and yield is up in 5 Iowa districts. Northwest Iowa is anticipated to have the highest yield in the state, with 193 bushels per acre. All three northern Iowa districts are anticipated to have higher yields and production than last year, while all three southern districts are expected to have lower yields and production than last year.

Soybean production is forecast at 516 million bushels. If realized, this would be the second highest soybean production on record, behind only the 525 million bushels produced in 2005. The August 1 yield forecast is 52 bushels per acre, 0.5 bushel above 2014. Iowa farmers planted 10.0 million acres of soybeans and plan to harvest 9.92 million acres.

Production and yield is forecast to be up in 4 Iowa districts. Northwest Iowa is expected to have the highest yield in the state, with 57 bushels per acre. Similarly to corn, all three northern Iowa districts are anticipated to have higher yields and production than last year, while all three southern districts are expected to have lower yields and production than last year.

The largest increase in yield is expected in the North Central Iowa, where yields are anticipated to average 8.4 bushels per acre more than 2014. The largest decrease in yield is expected in Southwest Iowa, where yields are expected to decline 6.7 bushels per acre from 2014.

Oat production for grain is forecast at 3.58 million bushels. The expected yield is 65 bushels per acre, up 1 bushel from 2014, but down 2 bushels from the July forecast. An estimated 55,000 acres will be harvested for grain.

Iowa hay yield for alfalfa and alfalfa mixtures is expected to be 3.60 tons per acre with a total production of 2.95 million tons, a production increase of 1 percent from the previous year. The projected yield for other hay is 2.50 tons per acre, with production at 863,000 tons, up 14 percent from 2014.



USDA:  Corn Production Down 4 Percent from 2014
Soybean Production Down 1 Percent from 2014
Cotton Production Down 20 Percent from 2014
Winter Wheat Production Down 1 Percent from the July Forecast

Corn production is forecast at 13.7 billion bushels, down 4 percent from last year's record production. Based on conditions as of August 1, yields are expected to average 168.8 bushels per acre, down 2.2 bushels from 2014. If realized, this will be the second highest yield and third largest production
on record for the United States. Area harvested for grain is forecast at 81.1 million acres, unchanged from the June forecast but down 2 percent from 2014.

Soybean production is forecast at 3.92 billion bushels, down 1 percent from last year. Based on August 1 conditions, yields are expected to average 46.9 bushels per acre, down 0.9 bushel from last year. Area for harvest in the United States is forecast at a record 83.5 million acres, down 1 percent from June but up nearly 1 percent from 2014. Planted area for the Nation is estimated at 84.3 million acres, down 1 percent from June.

All cotton production is forecast at 13.1 million 480-pound bales, down 20 percent from last year. Yield is expected to average 795 pounds per harvested acre, down 43 pounds from last year. Upland cotton production is forecast at 12.7 million 480-pound bales, down 20 percent from 2014. Pima
cotton production is forecast at 432,000 bales, down 24 percent from last year. All cotton planted area for the Nation is estimated at 8.90 million acres, down 1 percent or 100,000 acres from June.

All wheat production, at 2.14 billion bushels, is down slightly from the July forecast but up 5 percent from 2014. Based on August 1 conditions, the United States yield is forecast at 44.1 bushels per acre, down 0.2 bushel from last month but up 0.4 bushel from last year.

Winter wheat production is forecast at 1.44 billion bushels, down 1 percent from the July 1 forecast but up 4 percent from 2014. Based on August 1 conditions, the United States yield is forecast at 43.2 bushels per acre, down 0.5 bushel from last month but up 0.6 bushel from last year. The area expected to be harvested for grain or seed totals 33.3 million acres, unchanged from last month but up 3 percent from last year. Hard Red Winter production, at 856 million bushels, is down 1 percent from last month. Soft Red Winter, at 389 million bushels, is down 1 percent from the July forecast. White Winter, at 193 million bushels, is down 1 percent from last month. Of the White Winter production, 12.5 million bushels are Hard White and 181 million bushels are Soft White.

Durum wheat production is forecast at 76.8 million bushels, up 2 percent from July and up 45 percent from 2014. The United States yield is forecast at 40.2 bushels per acre, up 0.6 bushel from last month and 0.5 bushel from last year. Expected area to be harvested for grain totals 1.90 million acres, unchanged from last month but up 43 percent from last year.

Other spring wheat production is forecast at 621 million bushels, up less than 1 percent from the July forecast and up 4 percent from last year. Area harvested for grain is expected to total 13.2 million acres, unchanged from last month but up 4 percent from last year. The United States yield is forecast at 47.0 bushels per acre, up 0.3 bushel from both last month and last year. Of the total production, 576 million bushels are Hard Red Spring wheat, up slightly from the previous forecast and up 4 percent from last
year.



USDA WORLD AG SUPPLY AND DEMAND - AUG 12 2015

COARSE GRAINS: Projected 2015/16 U.S. feed grain supplies are increased this month with higher forecast corn, sorghum, barley, and oats production. Corn production is forecast at 13.7 billion bushels, up 156 million from the July projection, with the season’s first survey-based corn yield forecast at 168.8 bushels per acre, 2.0 bushels higher than last month’s trend-based projection. Corn supplies for 2015/16 are projected at a record 15.5 billion bushels, up 154 million from last month with a small reduction in beginning stocks. Projected ending stocks for 2014/15 decline 6 million bushels with higher expected use. Increased use for sweeteners is partly offset by reductions in other categories of food and industrial use and an increase in imports.

Total U.S. corn use for 2015/16 is projected 40 million bushels higher as increased domestic usage is expected to more than offset a reduction in exports. Feed and residual use is projected 25 million bushels higher with the larger crop and lower expected prices. Food, seed, and industrial use is projected up 40 million bushels with use for ethanol production raised 25 million bushels on the latest forecast for gasoline consumption by the Energy Information Administration. Exports are projected 25 million bushels lower with larger supplies in Brazil and Argentina expected to increase competition for U.S. corn in world markets. U.S. corn ending stocks for 2015/16 are projected 114 million bushels higher. The season-average corn price received by producers is projected 10 cents lower on both ends to $3.35 to $3.95 per bushel. This would be down 5 cents, at the midpoint, from the $3.65 to $3.75 per bushel expected for 2014/15.

Global coarse grain supplies for 2015/16 are projected 4.8 million tons higher with a 3.0-million-ton increase in beginning stocks and a 1.8-million-ton increase in global coarse grain production.  Foreign corn beginning stocks are up 3.6 million tons with increases in 2014/15 production for Brazil and Mexico and increases in 2014/15 imports for China, EU, South Korea, and Mexico. Argentina corn production is also raised for 2014/15. Foreign corn production for 2015/16 is reduced 5.5 million tons with reductions for China, EU, and Serbia, only partly offset by increases for Brazil, Ukraine, and Russia. Global barley production is higher this month with increases for Ukraine and Morocco outweighing a reduction for Canada.

Global 2015/16 coarse grain consumption is lowered slightly with a reduction in global corn use driven by reductions in corn feeding for EU, China, and Ukraine. Higher wheat feeding is expected for EU and Ukraine, and higher sorghum feeding for China. Global coarse grain trade is higher with corn imports raised for EU, barley imports raised for Saudi Arabia, and sorghum imports raised for China. Corn exports are raised for Ukraine, Brazil, and Russia with larger crops. Corn exports are reduced for Serbia, EU, and the United States. Barley exports are raised for Ukraine, but lowered for Canada. Sorghum exports are raised for the United States with the larger crop. Global coarse grain ending stocks for 2015/16 are raised this month with a 5.1-million-ton increase for corn mostly on higher stocks in the United States, Brazil, and Mexico.

OILSEEDS: U.S. oilseed production for 2015/16 is projected at 115.4 million tons, up 0.4 million from last month as a higher soybean production forecast offsets lower cottonseed and peanut crops. Soybean production for 2015/16 is projected at 3.916 billion bushels, up 31 million as a higher yield offsets a lower harvested area. Harvested area is revised down 0.9 million acres from the July estimate to 83.5 million mainly on lower acreage in Missouri. The first survey-based soybean yield forecast of 46.9 bushels per acre is 0.9 bushels above last month’s projected trend and 0.9 bushels below last year’s record yield. Soybean supplies for 2015/16 are projected 16 million bushels above last month based on the higher production forecast. Forecast U.S. soybean exports are lowered by 50 million bushels to 1.725 billion, as a result of slow export sales commitments. Soybean crush is raised 20 million bushels based on expected higher domestic use of soybean meal and soybean oil. Soybean ending stocks are projected at 470 million bushels, up 45 million from last month.

The U.S. season-average soybean price for 2015/16 is forecast at $8.40 to $9.90 per bushel, down 10 cents at the midpoint from last month. Soybean meal prices are forecast at $310 to $350, down 5 dollars at the midpoint. Soybean oil prices are forecast at 29.5 to 32.5 cents per pound, down 1 cent at the midpoint.

U.S. changes for 2014/15 include increased soybean crush, which is raised 15 million bushels to 1.845 billion reflecting higher domestic use and exports of soybean meal. With higher expected domestic use, the forecast of season-ending soybean stocks are reduced to 240 million bushels. Global oilseed production for 2015/16 is projected at 529.1 million tons, down 2.7 million tons from last month.  Reductions for rapeseed, sunflowerseed, cottonseed, and peanuts more than offset an increase in soybean production. Soybean production is projected up 1.1 million tons with higher crops for the United States and Ukraine. Rapeseed production is reduced 2.6 million tons as hot and dry weather curtailed yields in Canada and the EU, while harvested area is lowered for Ukraine, Belarus, and Australia. Other changes include lower EU sunflowerseed production, and reduced cottonseed production for India and China.

Projected 2015/16 global soybean ending stocks are lowered 4.9 million tons to 86.9 million with a higher crush for China, the EU, and the United States. Despite this month’s reduction, global soybean stocks remain record high. Projected soybean imports for China in 2015/16 are increased 1.5 million tons to 79 million and up from a revised 2014/15 forecast of 77 million. Soybean exports for Brazil and Argentina are projected higher due to growth in global trade.

WHEAT: Projected U.S. wheat supplies for 2015/16 are lowered on a smaller crop and reduced imports. An increase in spring wheat production is more than offset by decreases for Hard Red Winter, Soft Red Winter, and White Wheat. Hard Red Spring wheat yields in North Dakota are forecast to be a record. Projected imports are lowered 5 million bushels on the larger U.S. Hard Red Spring crop and lower Canadian production. All wheat exports for 2015/16 are projected 25 million bushels lower at 925 million on a slow pace to date and increased foreign supplies. Ending stocks are raised 8 million bushels to 850 million, the largest since 2010/11. The season-average farm price is lowered 10 cents on the low end and 20 cents on the high end to $4.65 to $5.55 per bushel.

Global wheat supplies for 2015/16 are raised 2.2 million tons primarily on increased production in the FSU and Turkey. A 2.4-million-ton reduction in global beginning stocks partially offsets the production increase; EU accounts for over 60 percent of the reduction. World wheat production is projected at a record. Crop conditions in the spring wheat areas of Russia and Kazakhstan continue to be excellent. Winter wheat production in Russia and Ukraine is better than expected, particularly considering last autumn’s drought. A 1-million-ton reduction for Canada, due to drought conditions in the western prairies, is partially offsetting. Argentina production was lowered 0.4 million tons to 11.1 million.

World exports are lower with the biggest decreases for Canada (smaller crop), Argentina (smaller crop and lower carryin), and the United States. Global imports are also down with the biggest changes being a 1-million-ton reduction for Iran offset by a 1-million-ton increase for Morocco. Iran’s imports are reduced as a result of a newly imposed import duty and the Morocco change is from a Foreign Agricultural Service GAIN report. Global use is up slightly, supported by increased feed and residual use for EU, Russia, and Ukraine. With supplies growing faster than use, global ending stocks are raised 1.7 million tons to a record 221.5 million tons.

LIVESTOCK, POULTRY, AND DAIRY:
The forecasts for total meat production in 2015 and 2016 are lowered from last month. Beef production for 2015 and 2016 is lowered due to a combination of slower marketings of fed cattle and reduced cow slaughter. Pork production forecasts for 2015 and 2016 are unchanged. Broiler production for 2015 is lowered from last month as growth in the number of eggs set and chicks placed has slowed. Weaker forecast broiler prices are expected to limit production growth as well. No change is made to 2016 production. Turkey production is raised for 2015 based on hatchery data. Egg production for 2015 is lowered based on second quarter production but no change is made to the forecasts for the remainder of 2015 and 2016. The beef export forecasts for 2015 and 2016 are lowered from last month on the relative strength of the dollar and expectations of weak demand. Beef imports are raised on strength in demand for processing-grade beef. Pork and broiler imports and exports are adjusted to reflect June trade data. The turkey export forecast is reduced for 2015 and 2016 as supplies remain tight.

Cattle prices for 2015 and 2016 are reduced from last month on weaker demand. Hog prices are reduced for 2015 as supplies are large. Broiler prices are lowered for both 2015 and 2016 on competition from relatively lower red meat prices. Turkey prices for 2015 are raised from last month on tighter supplies. Egg prices for both 2015 and 2016 are raised from last month on tight supplies and prices to date.

The milk production forecast for 2015 is unchanged from last month, but weaker milk prices in late 2015 and 2016 result in lower production for 2016 than forecast last month. Exports are reduced as competition in world markets is expected to be robust in both 2015 and 2016 and relatively strong domestic demand will likely encourage increased imports. Stocks at the end of 2015 are forecast higher than last month as a result of increased imports and reduced exports. Skim stocks for the end of 2016 are also forecast higher than last month.

Larger domestic supplies as a result of increased imports and weaker exports are expected to pressure product prices in 2015. Forecast prices for butter, cheese, nonfat dry milk (NDM) and whey are lowered from last month. Price forecasts for 2016 for cheese, whey, and NDM are reduced. However, domestic demand strength and expectations that milk will flow away from butter and NDM production in 2016 support an increase in the butter price forecast. NDM prices are expected to be pressured by continued competition in international markets. Class III and Class IV prices are reduced from last month for both 2015 and 2016. The all milk price is forecast at $16.75 to $16.95 per cwt for 2015 and $16.40 to $17.40 per cwt for 2016.



Six farmers elected to the Iowa Soybean Association board of directors

Six soybean farmers have been newly elected to serve as Iowa Soybean Association directors. They will be officially seated at the association’s September board meeting.

They are: Mark Vosika, Pocahontas (District 1); April Hemmes, Hampton (District 2); Suzanne Shirbroun, Farmersburg (District 3); Robb Ewoldt, Blue Grass (District 6); Pat Swanson, Ottumwa (District 9); and Tim Bardole, Rippey (At Large). 

Jeff Jorgenson of Sidney was re-elected for a second term in District 7.

Retiring directors are: Brian Kemp, Sibley; Dean Coleman, Humboldt; Ben Schmidt, Iowa City; John Heisdorffer, Keota; and Ron Heck, Perry. Heisdorffer will remain as an Iowa representative on the American Soybean Association board and Coleman will continue to serve on the officer committee of the World Initiative for Soy in Human Health. Shirbroun replaces Dennis Lindsay of Masonville who served one, three-year term as District 3 director.

“The association is grateful for the dedication and service our outgoing directors have provided during their terms,” said ISA-President Elect Wayne Fredericks of Osage. “We also congratulate the newly elected directors and welcome the fresh perspectives they bring to the work of our board as we strive to improve the competitiveness of soybean farmers.

“I especially want to thank Dennis Lindsay for his contributions,” Fredericks added, “and look forward to his continued engagement with the association to the benefit of farmers and the soybean industry.”

Joining Fredericks and the newly elected directors on the ISA board are: ISA President Tom Oswald, Cherokee (At Large); Chuck White, Spencer (District 1); Scott McGregor, Nashua (District 3); Sheila Hebenstreit, Jefferson and Randy Souder, Rockwell City (District 4); Rolland Schnell, Newton and Morey Hill, Madrid (District 5); Ed Ulch, Solon (District 6); Bill Shipley, Nodaway (District 7); Cliff Mulder, Pella (District 8); Mark Jackson, Rose Hill (District 9); Lindsay Greiner of Keota and Stephanie Essick of Dickens, At Large directors.



Farmers Elected to Iowa Corn Board, Corn Growers

Iowa Corn announced the board of directors for the Iowa Corn Growers Association (ICGA) and the Iowa Corn Promotion Board (ICPB). The directors elected to ICGA will continue to bring grassroots policy issues forward and be the voice on behalf of all members at the state and national level. ICPB directors will carry on promoting the corn industry through research, market development and education.

Those serving ICGA are as follows:
President, Bob Hemesath -- District 3
Vice President, Kurt Hora -- District 9
Chair, Jerry Mohr -- District 6
Dean Meyer -- District 1
Jerry Maier -- District 2
Mark Recker -- District 3
Curt Mether -- District 4
Dennis Freist -- District 5
Jim Greif -- District 6
Carl Jardon -- District 7
Kyle Phillips -- District 8
Roger Wuthrich -- District 9

Those serving ICPB are as follows:
President, Mark Heckman -- District 6
Vice President, Larry Klever -- District 4
Chair, Chris Edgington -- District 2
Lowell Appleton -- District 1
Chris Weydert -- District 2
Greg Alber -- District 3
Larry Buss -- District 4
Roger Zylstra -- District 5
Pete Brecht -- District 6
Duane Aistrope -- District 7
Don Hunerdosse -- District 8
Wayne Humpreys -- District 9

Elected members will begin to serve their three-year terms on Sept. 1.



ISU Extension Workshop Focuses on Late Season Crop Management

Iowa State University Extension and Outreach is offering a Late Season Crop Management Clinic on Wednesday, Aug. 26, and Thursday, Aug. 27, at the Field Extension Education Laboratory near Boone, Iowa. Designed for agribusiness professionals and crop producers, the two-day course provides hands-on, in-field experience and discussions of the 2015 growing season, along with the latest research on disease management and identification from ISU Extension and Outreach specialists.

The clinic will focus on management decisions made throughout the season and the results of those decisions. Presenters will also discuss topics such as cover crops, nutrient applications and other decisions to be made this fall. Finally, specialists will present their most recent research and how the results have formed their suggestions and recommendations.

“This program provides agribusiness professionals and crop producers with up-to-date information on research and how data from that research is used to make management suggestions,” said Warren Pierson, program specialist with the Field Extension Education Laboratory at ISU Extension and Outreach. “Our goal is to offer a hands-on learning experience by getting the attendees into the corn and soybean plots.”

ISU Extension and Outreach specialists and field agronomists will provide instruction on the principles of Integrated Pest Management with an emphasis on weed, insect and crop disease identification in Iowa corn and soybean production.

The two-day Late Season Crop Management Clinic presentation topics and Iowa State instructors include:

    Phosphorus and potassium soil testing and fertilization management – Antonio Mallarino, professor and extension specialist in agronomy at Iowa State University

    Soybean cyst nematode management in 2015 and beyond – Greg Tylka, professor in plant pathology and microbiology

    Late season insect management issues – Erin Hodgson, associate professor and extension specialist in entomology

    Corn disease management update – Alison Robertson, associate professor and extension specialist in plant pathology and microbiology

    Soybean disease management update – Daren Mueller, assistant professor and extension specialist in plant pathology and microbiology

    Disease identification quiz – Alison Robertson and Daren Mueller

    Update on bioenergy, specifically with miscanthus in Iowa – Nicholas Boersma, assistant scientist in agronomy and Catherine Bonin, agronomist

    Late-season weeds: What do they forecast? – Bob Hartzler, professor in agronomy and extension weed specialist

    Prairie strips: Conservation for multiple benefits – Lisa Schulte-Moore, associate professor in natural resource ecology and management

    Cover crops as part of the corn and soybean cropping system – Mark Licht, extension cropping systems agronomist

    Corn production and management – Mark Johnson, extension field agronomist

    Soybean production and management – Mark Johnson or Mark Licht

    Water quality update – Jamie Benning, extension water quality program manager

Registration check-in begins at 8:30 a.m. on Wednesday, Aug. 26, with sessions starting at 9 a.m. and adjourning at 4 p.m. Sessions will start on Thursday, Aug. 27, at 8 a.m. and adjourn at 4 p.m. Pre-registration is required and must be completed before midnight, Aug. 19. Cost is $250 and includes lunch, refreshments and class materials. To register, go to www.aep.iastate.edu/feel/late. Registration is available online with credit card or by mail with check payment.

For assistance with registration, receipts, cancellation or questions regarding registration status, contact ISU Extension and Outreach program services at 515-294-6429 or anr@iastate.edu.



Nitrogen Fertilizer Manufacturing Investment Positions Co-Op CHS For Assured Supply, Efficiency, Economics

A record $2.8 billion investment in nitrogen fertilizer manufacturing through CF Industries Nitrogen, LLC, is a historic step that links CHS Inc. (NASDAQ: CHSCP) member cooperative- and farmer-owners to long-term assured product supply, efficiency and economics, the president and chief executive officer of North America's leading farmer-owned cooperative said today.

CHS and CF Industries Holdings, Inc. announced today that they have agreed to enter into a strategic venture through an equity investment agreement and a fertilizer supply agreement through CF Nitrogen, LLC.

"This investment links CHS strength as the nation's largest fertilizer wholesaler with CF Nitrogen's manufacturing platform, creating supply sourcing efficiency and economics for our owners," said Carl Casale, CHS president and chief executive officer. "In short, through CF Nitrogen, CHS will be able to add direct value and provide sustained access to dependable, patronage-eligible fertilizer products comparable to our successful 70-year-old petroleum refining platform."

CF Nitrogen currently owns three production facilities in the United States: Donaldsonville, Louisiana; Port Neal, Iowa; and Yazoo City, Mississippi. CF also expects to contribute its Woodward, Oklahoma, plant to the LLC prior to the transaction closing. CF will continue to manage and operate all production facilities.

Once the capacity expansion projects are completed at Donaldsonville and Port Neal, CF will have total production of 18.9 million product tons, not including the new capacity from the business combination with OCI N.V. Of that total 18.9 million tons, CHS will have the right to purchase up to 1.7 million tons, or about 8.9 percent of CF Industries' total production capacity.  CHS, a major CF customer and knowledgeable industry leader, is making a $2.8 billion investment for approximately 8.9 percent of CF's total system capacity.

CF Nitrogen will sell annually to CHS up to 1.1 million tons of granular urea and 580,000 tons of UAN, at market prices. The 1.7 million tons available under the supply agreement have an average gross margin that reflects the average gross margin across the entire CF system.

CHS's semi-annual profit distributions from CF Nitrogen will be based generally on the volume of granular urea and UAN purchased by CHS pursuant to the supply agreement.  

The transaction is expected to close February 1, 2016, or earlier by mutual consent, subject to satisfaction of certain conditions.

Casale also announced today that the company has made a separate decision against moving forward with construction of a proposed fertilizer plant at Spiritwood, N.D.

"Our long-term goal has always been to add value for CHS owners through investment in the nitrogen fertilizer manufacturing space. To that end, we've continued to look at a variety of options, including the Spiritwood project," he said. "Ultimately, we determined that the construction cost, water supply challenges, overall risk profile and time required for the Spiritwood project had changed significantly since it was first considered. As a result, we concluded we couldn't achieve the level of returns needed to justify the increased costs and risks.

"We deeply appreciate the tremendous support and assistance from the Jamestown and Spiritwood communities, North Dakota's governor, elected officials and state agencies and organizations like the North Dakota Farmers Union; and other government leaders who have supported us through our due diligence process."

Casale noted that CHS has been a committed North Dakota business and neighbor since its 1931 founding and looks forward to a bright future that includes other investments in the state.

Given the dynamic market for nitrogen fertilizer manufacturing and distribution, investing in CF Nitrogen creates access to more immediate benefits to CHS owners and customers than a four-year plant construction window, Casale said.

An investment in CF Nitrogen enables CHS to serve its entire customer base through geographically diversified production and multiple transportation modes – including truck, rail and barge – that leverages the CHS distribution system and risk management expertise, he said.



EIA: Ethanol Stocks at 7-1/2 Month Low

Ethanol stocks in the United States fell to a 7-1/2 month low during the week-ended Aug. 7 while demand eased from a record high the preceding week to a three-week low last week, according to a report released by the U.S. Energy Information Administration on Wednesday, Aug. 12.

The EIA report also showed domestic production rose by 4,000 barrels per day (bpd) to 965,000 bpd while up 3.65% year on year.

Total ethanol stocks fell 710,000 barrels (bbl), or 3.7%, to 18.529 million bbl during the week-ended Aug. 7, according to the EIA, narrowing a year-over-year stock surplus to 4.3%. 

Blender inputs, a gauge for ethanol demand, fell 12,000 bpd, or 1.3%, to 898,000 bpd last week. On a year-over-year basis, implied demand for ethanol was up 0.9%.

EIA said implied demand for gasoline dipped 1,000 bpd to 9.686 million bpd, although is 8.6% above the same week a year ago.



Highly Critical Memos Show Need to Slam the Brakes on WOTUS

As the Aug. 28 implementation date approaches for the U.S. Environmental Protection Agency’s final rule on the “Waters of the U.S.,” the National Corn Growers Association has demanded the EPA postpone implementing its controversial rule and strongly supports congressional efforts to rescind the rule.

The need for this action became all the more clear with the release of highly critical internal memos from the U.S. Army Corps of Engineers related to the rule.

“In July, EPA Administrator Gina McCarthy came to our meeting in Washington and made certain assurances that no new risks are created by the rule,” NCGA President Chip Bowling said. “We have since become convinced that these assurances are based on an inaccurate reading of the rule, the preamble, and the recent applicable field record of her agency’s own actions on these issues.”

The NCGA’s concerns were exacerbated when it became known that the Corps of Engineers, which had been partnering with EPA in the process, expressed significant reservations on the science and legality of the rule.

“Corps data to EPA has been selectively applied out of context, and mixes terminology and disparate data sets,” a May 15, 2015 internal memo states. “In the Corps judgement, these documents contain numerous inappropriate assumptions with no connection to the data provided, misapplied data, analytical deficiencies and logical inconsistencies.”

Further, from an April 27, 2015 memo:  “The rule’s contradictions with legal principles generate multiple legal and technical consequences that in the view of the Corps would be fatal to the rule in its current form.”

In a letter sent to McCarthy this week requesting an extension of the effective date of the rule, NCGA noted that the agency’s field staff did not even have a clear or consistent understanding of how to implement the rule.

“Our concerns are exacerbated by the fact that the Agencies’ field staff have yet to develop a shared understanding of the rule and how it will be implemented,” the letter states. “Furthermore, the Agencies’ leadership and field staff have yet to develop with farmers a similar understanding of their responsibilities under the Clean Water Act in light of this rule.”



EPA’s Proposed Ethanol Blending Rule Would Add the Equivalent of Nearly One Million More Vehicles to the Road: UIC Analysis

A proposal by the U.S. Environmental Protection Agency to change ethanol blending rules would significantly increase carbon emissions to the equivalent of adding nearly one million more passenger vehicles on the road, according to an analysis conducted by the Energy Resources Center at the University of Illinois at Chicago (ERC).

The findings come in the wake of proposed rules by the U.S. E.P.A. that call for a reduction of the volume of ethanol blended in gasoline as mandated by the Renewable Fuel Standard (RFS), a program of the Energy Policy Act of 2005 signed into law 10 years ago this month. If the rules are adopted as proposed, a total of 17.5 billion gallons of ethanol would be blended with gasoline by 2016, 3.75 billion fewer gallons than originally mandated by Congress.

“The RFS has been one of the most successful federal policies enacted in the United States because it achieved exactly what it was intended to do: spur research and investment, lower greenhouse gas emissions and reduce dependence on foreign oil. Our work has demonstrated that, over the last 10 years, steady reductions in greenhouse gas emissions have materialized as biofuels became a more efficient, high quality product,” said Dr. Steffen Mueller, principal economist at the Energy Resources Center.

The peer-reviewed analysis was conducted using the GREET Model (Greenhouse gases, Regulated Emissions, and Energy use in Transportation) developed by Argonne National Laboratory which examines the full life cycle emissions impacts of energy sources. As part of the analysis, carbon emissions related to the planting, growing, harvesting, transportation and production of corn into ethanol were compared to that of oil recovery and production.

Under the EPA’s proposed rules, conventional starch ethanol would likely be reduced to 13.4 billion gallons from 15 billion gallons in 2015. In this scenario, the analysis found that 4,520,000 tonnes of additional CO2 emissions would be incurred in 2015.

The single year of carbon emissions is the equivalent to the annual greenhouse gas emissions of 951,600 passenger vehicles, according to the EPA’s equivalency calculator. Overall findings of the analysis are based on peer reviewed, published research that shows that greenhouse gas emissions from ethanol are close to one-third lower than those from gasoline.

“We are disappointed that the same federal agency charged to protect human health and the environment is proposing a rule change that would directly lead to greater greenhouse gas emissions,” said Ken Hartman, president of the Illinois Corn Growers Association. “After 18 months of delay in proposing new rules, the EPA has chosen not only to shirk its legal obligation as set forth by Congress, but to lose sight of its own mission.”

The EPA rulemaking proposal concerning the RFS was released on May 29. The EPA is expected to conclude the rulemaking process and issue a final rule in November.



Tractor Sales Rebound in July, Combines Still Down

According to the Association of Equipment Manufacturer's monthly "Flash Report," the sale of all tractors in the U.S. through July 2015, were up 19% compared to last year.

In the month of July, a total of 21,906 tractors were sold which compares to 18,452 sold thru July 2014 representing a 19% increase, reports Agri Marketing magazine.

For the month, two-wheel drive smaller tractors (under 40 HP) were up 31% over last year, while 40 & under 100 HP were up 22%. Sales of 2-wheel drive 100+ HP were down 24%, while 4-wheel drive tractors were down 34%.

Combine sales were down 34% for the month.

For the seven months, two-wheel drive smaller tractors (under 40 HP) are up 8% over last year, while 40 & under 100 HP are down 2%. Sales of 2-wheel drive 100+ HP are down 19%, while 4-wheel drive tractors are down 43%.

Sales of combines for the first seven months totaled 2,840, a decrease of 41% over the same period in 2014.



NFU Denounces Chinese Currency Devaluation, Strongly Urges Administration to Include Currency Manipulation Prohibition in the TPP

National Farmers Union (NFU) President Roger Johnson today denounced the Chinese government’s recent decision to devalue its currency, an unfair move that hurts U.S. family farmers’ and ranchers’ ability to export goods to China. Johnson called for the administration to ensure currency manipulation is prohibited in the final Trans-Pacific Partnership (TPP) agreement.

“This deliberate currency manipulation by the United States’ second largest trading partner, and largest supplier of goods imports, is a prime example for why the U.S. needs to prioritize meaningful measures to address currency manipulation with our trading partners,” said Johnson in a letter to U.S. Trade Representative (USTR) Michael Froman. “NFU strongly urges the administration to include a prohibition on currency manipulation in the TPP to protect the U.S. from unfair trading practices and preserve jobs across America.”

Johnson noted that currency manipulation is the most significant contributor to the massive U.S. trade deficit. In 2014, the trade deficit with China alone was $343 billion.

“The overall U.S. trade deficit with all trading partners was $505 billion, a 3 percent drag yearly on our national GDP,” said Johnson. “We have lost millions of additional jobs as a result of currency manipulation and the resultant trade deficit.”

Johnson noted that while China is not currently in the Trans-Pacific Partnership negotiations, NFU is concerned with the potential ripple effect that China’s currency devaluation could have on other countries currently in the negotiations, since several of them also have a history of currency manipulation.

“China’s actions clearly illustrate the need for the U.S. to refuse to allow our trading partners to bend the rules,” noted Johnson. “There must be consequences for currency manipulation, and there must be a prohibition on currency manipulation in the final TPP agreement.”