Tuesday November 24 Ag News

Nebraska Soybean Day and Machinery Expo Offers 2016 Growing Season Information

The 2015 Nebraska Soybean Day and Machinery Expo Dec. 17 will assist soybean producers in planning for next year's growing season.

The expo, which begins at 8:30 a.m. and concludes at 2:15 p.m., will be in the pavilion at the Saunders County Fairgrounds in Wahoo, said Keith Glewen, University of Nebraska-Lincoln Extension educator.

The expo opens with coffee, doughnuts and the opportunity to view equipment and exhibitor booths. Speakers start at 9 a.m.

Presenters include UNL researchers and specialists, Nebraska Soybean Board representatives, soybean growers and private industry representatives.

Dr. David Kohl, Professor Emeritus Agricultural Economics, Virginia Tech will present on Megatrends in Agriculture and Global Economics, How it Impacts Nebraska Farmers.  Tina Barrett, Executive Director, Nebraska Farm Business Association   will discuss Nebraska’s Farm Financial Outlook. Management of Herbicide Resistant Weeds:  Combatting Waterhemp, Palmer Amaranth, and Marestail will be presented by John Frihauf, Field Biologist Sr., BASF.  And Nebraska Extension Educator Keith Glewen will provide information on the Nebraska On-Farm Research Network as he presents “Discovering Production Answers On Your Farm, What Could be New in Your Tool  Box?”.

The expo also will include an update on the Nebraska Soybean Checkoff update and association information.

Producers will be able to visit with representatives from seed, herbicide, fertilizer and equipment companies and view new farm equipment during a 30-minute break at 9:45 a.m.

The Saunders County Soybean Growers Organization requests that each participant donate one or more cans of nonperishable food to the food pantry.

Complimentary noon lunch will be served.

Registration is available the day of the expo at the door. For more information about the program or exhibitor information, call (800) 529-8030 or e-mail kglewen1@unl.edu.  Information online at:  http://ardc.unl.edu/nebraskasoyexpo.

This program is sponsored by Nebraska Extension in the university's Institute of Agriculture and Natural Resources, the Nebraska Soybean Board, Saunders County Soybean Growers Organization and private industry.  There is no registration fee.



UAVs LAND IN LINCOLN AT NEBRASKA POWER FARMING SHOW

The Nebraska Power Farming Show, presented by Farm Credit Services of America and AgDirect, is known for showcasing the latest technology in agriculture and this year is no exception. The use of Unmanned Aerial Vehicles (UAVs) is an exciting frontier. Four UAV companies will display their products this year. There are three plane-type UAVs: Honeycomb, Sensefly and Slantrange, and two Helicopter-type UAVs: Slantrange and Precision Drone.

UAVs are the new form of crop scouting. Equipped with a camera and the correct software on the ground, UAVs give growers and scouters the ability to check crop health from the air at an efficient rate. Software on the ground can stitch aerial shots into a high-resolution mosaic map that can be used to make better crop management decisions.

UAVs can provide farmers with two types of detailed views. First, seeing a crop from the air can reveal patterns that expose everything from irrigation and fertilizer problems to soil variations and even pest and fungal infestations that are not apparent at eye-level. Second, cameras can take multispectral images (infrared and visual spectrum) which can be combined to create a view of the crop that highlights the difference between healthy and distressed plants.

Laura Thompson, UNL Extension Educator, will discuss the use of unmanned aerial vehicles as it relates to measuring nitrogen levels and other ways UAVs are advantageous in agriculture. She will be presenting Wednesday of the show in Seminar 1 located north of the food court in Pavilion 3.

Although there is excitement about the use of UAVs, the legality of flying them remains an issue. The Federal Aviation Agency (FAA) prohibits the use of all unmanned aircraft for commercial use without the agency’s express approval. The FAA has said that it plans to allow commercial UAVs once it has drawn up proper regulations for the aircraft. Some rulings may occur yet in 2015, but more likely in early 2016. In the meantime, the current recommendation is to educate yourself about UAVs and spend some time with flight simulator software.

Honeycomb is in Booth 3505 in Pavilion 3; eBee by Sense is sold by Labra Consulting, Booth 4914 in Pavilion 4; SLANTRANGE Ag Drone is in Booth 3209 in Pavilion 2 and Precision Drone is represented by McGinnis Precision Drone, Booth 1908 in Pavilion 1. There could be more UAV vendors by show time, so stop by any information booth to inquire.

The Nebraska Power Farming Show, the second largest indoor farm show in the United States, runs from December 8-10, 2015, at the Lancaster Event Center in Lincoln, Nebraska. This year the show is sponsored by: Diamond Sponsors – Farm Credit Services of America & AgDirect; Platinum Sponsor – Bayer CropScience; and Gold Sponsors – Nebraska Farm Bureau and Stine Seed.



The 2016 Crop Season Promises Challenges; GrowingOn® 2016 Meetings Offer Solutions

It’s no secret the agriculture sector is in one of its down cycles. Midwest crop prices have been falling for the past few years and livestock prices are under pressure as production recovers from herd reductions caused by prolonged drought and diseases. While many are focused on cutting input costs, the GrowingOn® meetings hosted by Farm Credit Services of America (FCSAmerica) will focus on solutions tied to risk management and fixed costs.

FCSAmerica hosts GrowingOn each year as part of the Association’s commitment to be a dependable and reliable partner during all ag cycles. This year’s educational meetings will be held at six locations in Nebraska, from December 14-17, 2015. Always topical, GrowingOn will provide an outlook on agriculture based on today’s economic environment and offer producers strategies to improve profits and maximize revenue guarantees.

Steven Johnson, farm management specialist with Iowa State University Extension and Outreach, is the main speaker. He will offer his 2016 crop price outlook and cost of production estimates and share insights into a variety of strategies, tools and case studies to highlight solutions for managing farm, financial and marketing risks.

“Farmers are scrutinizing expenses as a result of the drop in crop prices. Most already are focused on reducing their variable costs, such as seed, fertilizer and crop protection,” Johnson said. “However, most variable costs are not expected to decline much in 2016. It’s really the fixed costs that are key to reducing overall cost of production.”

“Fixed costs include land, machinery and equipment, as well as family living expenses,” he said. “These are what typically differentiate high-cost from low-cost farming operations. Renegotiating cash rent leases and perhaps refinancing existing debt should be priorities this winter. Combine these solutions with the discipline to manage other costs without cutting yields, and market proactively to improve results.”

According to Johnson, crop insurance continues to be one of the best investments for managing crop price volatility. In the western Corn Belt, revenue protection is used on roughly 95 percent of all tillable acres. Since it insures both yield and price, revenue protection facilitates a pre-harvest marketing plan.

FCSAmerica crop insurance specialists will share ways to maximize 2016 crop insurance choices. “Somewhere every year, Mother Nature shows us why crop insurance is important,” said Tony Jesina, senior vice president-related services. “This year, weather challenges in our four-state area ranged from delayed and prevented planting to hail and factors that affected grain quality. Crop insurance kept many operations whole. Perhaps most importantly, it allows producers to take advantage of pricing opportunities before and during the growing season. It really is one of the most fundamental tools for farm business risk management. But the right policy is different for each operation.”

Crop insurance decision-making is complex, Jesina emphasized. FCSAmerica’s crop insurance specialists understand the financial side of risk management. FCSAmerica also offers online tools that allow customers to build crop and insurance plans; calculate breakevens, set profit goals and measure results; track progress of cash sales, futures and options; see how marketing plans align with crop insurance coverage and calculate a variety of what-if scenarios.

“Federal crop insurance products are the same, but crop insurance agents aren’t,” Jesina said. “Farmers should look for an agent who specializes in crop insurance full time, who has up-to-date information, truly understands the business of farming and offers value-added tools and services.”

While meetings are free, preregistration is required for GrowingOn. Details can be found at growingon.com, or by calling local FCSAmerica offices or 1-800-884-FARM.



2015-2016 NEBRASKA AG YOUTH COUNCIL MEMBERS ANNOUNCED

Today, Nebraska Department of Agriculture (NDA) Director Greg Ibach announced the selection of the members of the 2015-2016 Nebraska Agricultural Youth Council (NAYC). The Council is comprised of college-aged students from around the state who have a passion for agriculture and who promote the industry by teaching others. NDA sponsors the Council and its activities throughout the year.

“There is a great deal of need for agriculture education and outreach,” said NDA Director Greg Ibach. “This is a talented and committed group of young men and women, and they are ready to create excitement among Nebraska’s youth about agriculture and the many careers available in the industry.”

The NAYC is entering its 45th year with the installation of this group of Council members. Throughout the year, the Council coordinates several agricultural learning experiences for Nebraska youth including: visiting elementary classrooms to discuss where food comes from; taking urban youth to experience farms and what a day in the life of a farmer is like; and visiting with high school students from across the state. The primary focus of the NAYC is to coordinate the annual Nebraska Agricultural Youth Institute (NAYI), a five-day summer conference for current high school juniors and seniors.

“It’s important that young people carry on the tradition and heritage of those who have made this state the agricultural leader it is today,” said Ibach. “These are the future leaders of our agricultural industry, and I am excited to see what these students accomplish as they serve on the Council.”

This year’s Council is comprised of 23 young men and women. The 2015-2016 NAYC leadership includes:
·         Head Counselors: Morgan Zumpfe, Friend and Landon Swedberg, North Platte;
·         President: Rebecca Cornelius, Madrid;
·         Secretary: Toni Rasmussen, Albion;
·         Vice President of Promotions: Railen Ripp, Kearney;
·         Vice President of Greater Nebraska NAYI: Kate Likens, Swanton;
·         Vice President of Communications and Social Media: Rachel Ibach, Sumner;
·         Vice President of Sponsorship and Alumni Relations: Grant Uehling, Uehling;
·         Vice President of Youth Outreach: Maggie Louthan, Smithfield; and
·         Vice President of NAYI Improvement: Sarah Wollenburg, Beatrice.

Additional NAYC members include: Hannah Borg, Wakefield; Dylan Dam, Hooper; Logan Kalkowski, Omaha; Amanda Kowalewski, Gothenburg; Brandon Nichols, Bridgeport; Elizabeth (Liz) Rice, Murray; Hunter Schroeder, Howells; Ryan Schroeder, Wisner; Jacy Spencer, Brewster; Grant Suddarth, York; Collin Thompson, Eustis; Eric Wemhoff, Humphrey; and Cody Zumpfe, Friend.

To learn more, visit the NAYI website at www.nda.nebraska.gov/nayi/ or search for Nebraska Agricultural Youth Institute on Facebook.



Cattle On Feed
Kate Brooks, Assistant Professor
Department of Agricultural Economics, University of Nebraska - Lincoln
 
USDA-NASS released the monthly Cattle on Feed report on November 20.  Numbers came in very similar to the average pre-report estimates. Total cattle on feed number (U.S. feedlots over 1,000 head capacity) on November 1 was up 2.1% over 2014 at 10.8 million head. This is the largest November cattle on feed number since 2012.  In 2015 cattle on feed inventories have been at or above 2014 levels for all but one month, with the last five month inventories at 2% or more above last year's levels.

October marketings were as expected at 1.63 million head, down 3.2% from October 2014.  There was one less marketing day available in 2015 compared to 2014 which would attribute to fewer marketings.  As we look at the marketings on a state basis, Iowa and Nebraska appear to be at the center of the heavy weight cattle.  Compared to 2014, October marketings for Iowa were up 13% and Nebraska were up 3%, while Texas was down 14% and Kansas was down 6%.  Nebraska was also up 7.5% in September marketings compared to 2015.  It appears we have pushed through many of the heavyweights during the end of September and through October.  The last report shows steer weights as of Nov 7th at 921 pounds down from the peak of 930 pounds.

Placements in October came in at 2.28 million head, down 3.7% compared to a year ago, which was in line with pre-report estimates.  Feedlots appear to be cautious with placing cattle as current closeouts have been reported at losses.  Of the three largest cattle on feed states, Kansas was the only state with increased placements up 6% compared to year ago. Nebraska placements in October were down 2% and Texas was down 13%.

Not to sound like an old record, but the trend for heavier weight placements continued again in October.  All weight categories saw declining placement numbers for October 2015 compared to year ago, except the heavy weight category (800 pounds and over) which increased placements by 5.4%.  Decent forage and pasture conditions throughout much of the U.S. has continued to be a major driver, allowing cattle to stay out of the feedlots longer and placing at heavier weights.  Recent rains in the southern states have allowed for decent wheat pasture conditions, this trend for placing heavier cattle could continue for another couple of months.



High Octane Ethanol Fuels Championship for Oder

John Oder claimed the Kearney Raceway Pro Class Points Championship in a come-from-behind victory Nov. 1.

Trailing by 60 points late in the event, Oder needed to win two more rounds to take the lead. His excellent reaction time helped him snatch the victory from the jaws of defeat and earn his second consecutive championship.

The Osceola resident won six races during the 2015 season, including his final three races. Although he’s been racing 16 years, this was his first year racing on Ignite Fuel – a 90 percent ethanol and 10 percent gasoline blend.

“I remember thinking ‘Wow! I can’t believe I pulled this off,’” Oder said. “I didn’t think I had a chance of winning the championship again, but the car ran on the ‘number’ all weekend. It finally sank in the following week when I had time to think about the accomplishments and work I did figuring out the new fuel, carburetor and car setup.”

His fuel choice shifted when he was approached by Grady Koch, local farmer and Kearney Raceway Park investor, to consider racing his 2015 season on Ignite Fuel.

“I wanted to supply a consistent ethanol-blended fuel for our racers and I needed a driver willing to give it a try,” Koch said. “Bringing in Ignite high performance racing fuel was a great decision for our track. We get a high quality, high octane blend of ethanol every time.”

Oder’s 1971 Dodge Challenger, which runs a Dodge 440 big block engine, needed some fine tuning to properly run the new fuel. The first half of his racing season was spent adjusting the new carburetor, which was not set up for drag racing, according to Oder.

“I’m always interested in ways to advance my racing and I like a challenge,” he said. “I drove on race fuel 15 years, so I knew this would be a good learning experience. I learned to be patient and not give up quickly when I had issues at the beginning of the season.”

After figuring out the jetting and timing of his Challenger, Oder noted the biggest benefit was the consistency of the car.

“Consistent times allow for precise ‘dialing in,’ which is important in E.T. bracket racing,” he said. “My horse power and torque increased helping improve all my times.”

Although Oder burns about 30 percent more fuel the economics still work in his favor. The race fuel he used previously cost more than $7.70 per gallon. Ignite Fuel has a 114 octane rating and is about $4 per gallon – about a 50 percent savings.

“I would recommend it to my fellow racers to improve horsepower, torque and consistency,” Oder said. “Ethanol fuel doesn’t corrode like straight methanol, so I was able to use all the same fuel system components.”

Koch is in negotiations now to bring Ignite Fuel to Nebraska circle tracks including Junction Motor Speedway in McCool and I-80 Speedway in Greenwood.

“Racers gain about 10 percent more horsepower with a less expensive fuel that burns cleaner,” Koch noted. “Ethanol is a green fuel that reduces pollution and our exposure to unhealthy toxic compounds found in racing fuel. This is a great opportunity for more tracks to get a cleaner-burning, high octane fuel.”



New Herbicide Publication for Corn and Soybean Producers

The status of weed control across the state and the most effective herbicides for tackling weeds are outlined in a recently released Iowa State University Extension and Outreach publication.

The “2016 Herbicide Guide for Iowa Corn and Soybean Production” was written by ISU Extension and Outreach weed specialists Bob Hartzler and Mike Owen and is now available online at the Extension Store, https://store.extension.iastate.edu/. 

Hartzler and Owen note that the many weed issues from the past continue to plague Iowa’s farmers, particularly the weed, water hemp, in soybean fields.

“There has not been a notable increase across the state in major weed management failures,” according to the weed specialists. “However, random surveys suggest that a high percentage of fields with weeds visible above the soybean canopy have evolved resistance to one or more herbicides.” They conclude that herbicide-resistant weed populations are slowly increasing.

The two experts advise farmers that now is the time to make adjustments to their weed management programs before weed densities become worse. Their suggestions include diversifying types of herbicides as well as paying attention to how and when they are used.

The 24-page guide provides industry updates and gives instructions on how to design resilient herbicide programs to manage herbicide resistance. The resilient herbicide programs rely on multiple herbicide groups to manage weeds, and the new publication details successful approaches. Non-herbicidal strategies also are included.

It also lists the effectiveness of different herbicides for controlling grass, broadleaf and perennial weeds in corn and soybeans, grazing and haying restrictions for herbicides used in grass pastures and the active ingredients in herbicide prepackage mixes.

The publication contains four tables on herbicide sites of action — the specific proteins that herbicides inhibit in plants to kill them — and information about typical injury symptoms. “Herbicide programs that include several different sites of action is a key step in managing herbicide-resistant weeds,” the authors wrote.



Beef Stew Warms Living History Farms Race Runners

Thousands of runners braved the cold temperatures and snow for the 37th annual Living History Farms Off-Road Race on Saturday, November 21, located at Living History Farms in Urbandale. The annual cross country race, hosted by Fitness Sports, challenged runners through farm land by crossing creeks and conquering many obstacles. Proceeds from the race support the Living History Farms Museums.

Upon completing the race, all runners were welcomed to refuel with a warm bowl of beef stew, served by beef industry volunteers including members of the Dallas County 4-H Club and the Madison County Youth Beef Team.

“Beef is an excellent source of protein, which is a great tool to refuel the runners,” says Brooke German, Director of Marketing for the Iowa Beef Industry Council. “Amongst the thousands of runners were many Team Beef members representing states such as Iowa, Missouri and Minnesota.”

Team Beef, Iowa member, Jack Dekkers, Professor of Animal Science at Iowa State University, enjoyed refueling with beef stew after crossing the finish line. “It was great to hear the crowd cheer the beef team on along the race,” he comments. “It was even better to cross the finish line and refuel with beef stew. After a long and challenging race, protein is exactly what my body needs to repair.”

“This is an event we look forward to every year,” states German. “Rain, sleet or snow, we are always excited to see everyone brave the weather and finish the race with the signature beef stew.”

The beef checkoff provided the beef used in the beef stew which was prepared by the Iowa Machine Shed.



Farm Sector Profitability Expected To Weaken in 2015

Both net cash and net farm income are forecast to decline for the second consecutive year after reaching recent highs in 2013. Net cash income is expected to fall by 27.7 percent in 2015, while the forecast 38.2-percent drop in net farm income would be the largest single-year decline since 1983 (in both nominal and inflation-adjusted terms).

Highlights
-    Both net cash and net farm income are forecast to decline for the second consecutive year after reaching recent highs in 2013. Net cash income is expected to fall by 27.7 percent in 2015, while the forecast 38.2-percent drop in net farm income would be the largest single-year decline since 1983 (in both nominal and inflation-adjusted terms).

-    Crop receipts are expected to decrease by 8.7 percent ($18.2 billion) in 2015, led by a forecast $8.6-billion decline in corn receipts, a $5.7-billion drop in soybean receipts, and a $2.7-billion drop in wheat receipts.

-    Livestock receipts could fall by 12.0 percent ($25.4 billion) in 2015, a reversal from the 43.8-percent increase in receipts over 2005-14 period.

-    The reduction in crop and livestock receipts is largely driven by changes in price rather than changes in output.

-    Government payments are projected to rise 10.4 percent ($1.0 billion) to $10.8 billion in 2015.

-    Total production expenses are forecast to fall 2.3 percent, the first time since 2009 that they have fallen year over year. Energy inputs and feed are expected to have the largest declines. Expenses are forecast to increase for labor, interest, and property taxes.

-    After several years of steady improvement, farm financial risk indicators such as the debt-to-asset ratio are expected to rise in 2015, indicating increasing financial pressure on the sector. However, debt-to-asset and debt-to-equity ratios remain low relative to historical levels.

-    Declining farm sector assets resulting from a modest decline the in value of farmland, investments, and other financial assets—as well as higher debt—are forecast to erode equity by 4.8 percent, the first drop since 2009.

-    After several years of steady improvement, farm financial risk indicators such as the debt-to-asset ratio are expected to rise in 2015, indicating greater financial pressure on the sector. However, the sector appears to have remained well insulated from solvency risk.

The Value of Agricultural Sector Production Forecast To Fall for the Second Straight Year in 2015
The annual value of U.S. agricultural sector production is expected to fall 9.2 percent to $427.7 billion in 2015, as the value of both crop and livestock production decline (see table on value of production). The value of production is comprised primarily of cash receipts adjusted for any changes in inventories and home consumption use, plus all farm-related income. The falling value of crop production (to a forecast $186 billion in 2015) represents a second consecutive decline from 2013’s record high of $233.2 billion, and the third straight year of declining crop cash receipts despite a net inventory reduction. The value of U.S. livestock production is also forecast to decline 12.3 percent (to $191.3 billion) in 2015 as a large drop in receipts more than offsets the sector’s inventory expansion.

Falling Crop Prices and Receipts Forecast for 2015
Crop cash receipts—the cash income from crop sales in the 2015 calendar year—are forecast to fall 8.7 percent in 2015, led by broad price declines for most field crops. Corn cash receipts are expected to decline the most, falling by $8.6 billion in 2015. Since hitting a record high in 2012, corn receipts have fallen 36 percent. While production is expected to drop slightly relative to 2014, corn prices are expected to fall by a larger percentage in 2015. Cash receipts for soybeans and wheat are also expected to decline from 2014, falling $5.7 and $2.7 billion, respectively. Rice cash receipts are expected to decline by 36.4 percent ($1.3 billion) on lower expected production and calendar-year prices.

Despite an expected increase in production, cash receipts for fruits and nuts are expected to remain flat in 2015 due to lower prices received by farmers. Production of grapefruits and oranges are both expected to fall as citrus greening disease has resulted in unmarketable fruit throughout Florida and elsewhere. California citrus production has held steady or increased relative to 2014, despite continued drought conditions. California has historically accounted for a large portion of U.S. vegetable and fruit/nut cash receipts. The drought there is likely to affect fruit/nut and vegetable production, and to reduce cotton and rice cash receipts. California is the second largest rice producing State and accounts for a large share of long-staple cotton production.

Animal and Animal Product Receipts Forecast Lower in 2015
Animal and animal product cash receipts increased by 43.8 percent in real terms from 2005 to 2014, but in 2015 are expected to fall 12 percent in 2015 (to $186.8 billion) in nominal terms. Much of the decline is due to falling dairy and hog receipts, but broilers and cattle/calves are implicated as well. After reaching a record high of $49.3 billion in 2014, milk receipts are expected to drop 28.2 percent in 2015 as declining prices more than offset an expected increase in milk production. Hog production is expected to rise in 2015 as the industry recovers from the porcine epidemic virus. However, hog prices are expected to drop sharply relative to 2014 and result in a 25-percent decline in hog cash receipts. Cash receipts from cattle production are also expected to decline by 4.9 percent in 2015 due to an expected drop in both price received and quantity marketed. The decline has primarily been driven by declining price expectations since the August data release.

Overall poultry and egg cash receipts are expected to fall 2.4 percent in 2015, due primarily to falling broiler receipts. Poultry and egg receipts are expected to be broadly affected by the highly pathogenic avian influenza (HPAI or "Bird Flu") in 2015, although impacts are mixed. Since being detected in December 2014, HPAI has claimed 48.1 million birds, with turkeys and egg laying chickens most vulnerable. Both turkey and egg laying chicken quantities are forecast to decline and place upward pressure on prices. In contrast, U.S. broiler production is expected to increase in 2015. The increase in broiler production—coupled with HPAI-related import bans on U.S. poultry by some nations—has increased supply in the U.S. market, leading broiler prices sharply lower.

Falling Prices are Primary Driver of a Forecast Drop in Cash Receipts in 2015
Cash receipts for all commodities are expected to fall by nearly $41.5 billion in 2015. This decline largely reflects falling commodity prices, which are lower for a broad set of agricultural commodities in 2015 relative to recent years. To add perspective to the forecast change in cash receipts, the overall change for 2015 relative to 2014 can be decomposed into separate price and quantity effects for those commodities—soybeans, tobacco, peanuts, sugar beets, hay, potato, sunflower, flax, cottonseed, dry beans, barley, rapeseed, rye, canola, oats, mustard seed, safflower, sugarcane, sorghum, long-staple cotton, rice, wheat, upland cotton, and corn, hogs, broilers, milk, farm chickens, turkeys, eggs, and cattle/calves—where we forecast both prices and quantities. For these commodities, falling prices account for 96.5 percent of the decrease in receipts from 2014 to 2015.

Government Farm Program Payments Forecast To Increase in 2015
U.S. government farm program payments to the farm sector are forecast to rise 10.4 percent from 2014 levels to $10.8 billion (see table on government payments). New commodity-based programs introduced as part of the 2014 farm bill and implemented for the first time in 2015—such as the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) programs—are now the largest source of government payments to the farm sector. ARC is a revenue-based compensation system where payments are triggered when revenues fall below the ARC guarantee for the covered commodity. Payments on corn base acres are expected to account for over 80 percent of all 2015 ARC program payments. PLC payment levels depend only on the level of covered commodity prices relative to a reference price. PLC payments in 2015 are expected to go mainly to long-grain rice, peanuts, and canola base acres. Forecast increases in marketing loan gain and loan deficiency payments relative to 2014 reflect declining peanut and upland cotton prices in 2015, while increased payments for the Milk Income Loss Contract (MILC) and Margin Protection Program reflect declining milk prices. Increases in conservation spending reflect increases in Natural Resources Conservation Service (NRCS) financial assistance.

In contrast to increasing commodity program payments, the largest decline in payments relative to 2014 is expected in the Supplemental and Ad Hoc Disaster Assistance category, down $3.1 billion to $1.7 billion in 2015. The decrease primarily reflects a drop in payments from the Livestock Forage Disaster Program (LFP). In 2015, payments under the LFP are expected to decline significantly from 2014’s all-time high, which reflect delayed (since 2011) obligations collectively paid in 2014. This decline in ad hoc assistance is forecast to be partially offset by indemnity payments under an Animal and Plant Health Inspection Service (APHIS) program for losses from Highly Pathogenic Avian Influenza, or "bird flu," affecting U.S. poultry operations in 2015.

Declines in other government payment categories in 2015 reflect the phasing out of previous farm bill programs—including the Average Crop Revenue Election (ACRE) program, the Direct and Counter-Cyclical Payment (DCP) program, and the Tobacco Buyout—and completion of the 2014 Farm Bill’s transitory program for upland cotton (CTAP).

The November 2015 forecast for U.S. government payments declined by $586 million (5 percent) from the 2015 forecast issued in August. The major reason was an even larger decline in the forecast for ARC payments since the August forecast.

Production Expenses Forecast To Decline for the First Time in Since 2009
Year-over-year reductions in farm production expenses are infrequent. However, in 2015, for the first time since 2009 and for the third time since 2000, total farm production expenses are forecast to fall. The $7.7 billion decline, about 2 percent, follows a period of rapid increases in production expenses, on average, of over 9 percent annually (in nominal terms) from 2010 to 2014. Despite the decline in 2015, production expenses are still projected to be high by historic standards, behind only 2014 in both real and nominal terms. The drop in expenses alleviates, but does not completely offset, the effect of the drop in cash receipts, leading to tighter margins.

The forecast decline in expenses is driven primarily by lower spending on feed, fuel, and fertilizer, which outweigh expected increases in spending on labor, interest, and property taxes/fees.

    Even with higher expected demand for feed due to more cattle being fed, feed expenses are expected to be over $5 billion (8.5 percent) lower in 2015 due to lower feed prices.

    Continued rebuilding of cattle inventory and renewed poultry purchases to restore inventory depleted by the Highly Pathogenic Avian Influenza (HPAI or “Bird Flu”) contributed to forecast livestock and poultry purchases remaining in line with 2014 purchase expenses.

    Fuel and oil expenses are forecast to decrease by over 28 percent to $12.7 billion in 2015. This reflects the Energy Information Agency’s forecast of the price of diesel and gasoline fuel, both projected down over 28 percent in 2015.

    Seed, pesticide, and fertilizer expenses, which are the principal inputs into crop production, are expected to decrease by about $3.2 billion in 2015, driven primarily by lower fertilizer expenses.

    Labor costs are expected to increase in 2015 by over 4 percent, with most of the increase driven by higher expected wage rates.

The largest forecast increase in farm production expenses is for interest outlays, up significantly due to forecast increases in farm debt. Interest paid on debt secured by real estate is expected to increase by almost 19 percent in 2015, to $11.4 billion. Interest payments for nonreal estate debt are also expected to increase by 23 percent based on continued demand for operating and other types of nonreal estate loans.

Net rent expense—the amount paid to rent land, adjusted for the landlord’s share of government payments and insurance indemnities and net of any expenses paid by the landlords—is forecast to remain relatively flat, decreasing by a little under 1 percent in 2015. As in recent years, the majority of net rent expense is forecast to be paid to non-operator landlords.

Property taxes and fees—which include real estate and personal property taxes, as well as motor vehicle registration and licensing fees—are expected to increase by over 7.8 percent to $15.5 billion in 2015, driven primarily by the increase in the (taxes) prices-paid index.

Miscellaneous expenses—which include insurance premiums, spending on irrigation, production contract fees, and grazing fees—are expected to increase slightly in 2015.

Payments to Stakeholders Expected To Increase in 2015
In 2015, payments to stakeholders are forecast to increase by $4.1 billion (6.3 percent), while net farm income is forecast to fall 38.2 percent. Net value added represents the sum of economic returns to all the providers of factors of production. Net value added is distributed among stakeholders who receive a fixed payment in return for their services and equity owners who share in the profits. Stakeholders provide the hired labor, leased capital, and rental land used in agricultural production, but in most cases don’t directly share risk in the short term. An exception is landlords who sign operators to share rent agreements. Consequently, the payments that stakeholders receive can be more stable over time than net returns to the equity owners of agricultural production.



Statement from Secretary Tom Vilsack on Updated 2015 U.S. Farm Income Forecast

U.S. Secretary of Agriculture Tom Vilsack today made the following statement:

"As one growing season comes to an end and another lies on the horizon, USDA continues to seek out new and innovative ways to expand opportunity for America's farming families and support markets that will boost farm income. Roughly one in three American farm products are exported, but there is significant and as yet untapped opportunity in markets in Asia and Europe. By the end of the year, I will have met with key leaders in those regions to promote the benefits of the Trans-Pacific Partnership and further negotiations on the Transatlantic Trade and Investment Partnership, as well as expanded access in China. Expanded trade will help to drive higher commodity prices, additional farm income and agribusiness jobs that ultimately generate more cash flow in rural economies and support local businesses on main street.

"Thanks to its ability to remain competitive through thick and thin, American agriculture continues to enjoy some of the strongest years in our nation's history, supporting and creating good-paying American jobs for millions, and positioning the United States as a reliable supplier of high-quality goods for domestic and foreign markets alike. Overall, today's projections provide a snapshot of a rural America that continues to remain innovative, stable and resilient in the aftermath of the worst animal disease outbreak in our nation's history and as the western United States unloosens itself from the grip of historic drought. For example, today's projections indicate a rise in specialty crop receipts in 2015, while final farm income for 2014 was revised upward by $1.9 billion since August and $13.5 billion since February. Today's estimates also indicate that new 2014 Farm Bill safety net programs are working as intended and helping producers protect their operations from changes in the marketplace.

"Since 2009, USDA, under President Obama, has made historic investments in rural America and American agriculture. Two-thirds of all rural counties gained jobs over the past year and the American economy overall has created 8 million jobs over the past 36 months, the fastest pace since 2000. USDA and the Obama Administration will continue to stand with America's farming families, small businesses and rural communities as they build a brighter future for our country on the land that they love."



NCGA Commends Farm Service Agency Revision to Administrative County Rules for ARC-CO Program
The Farm Service Agency recently approved a modification allowing growers on a farm with one or more tracts outside the administrative county the option to recalculate Agriculture Risk Coverage-CO benefits based on the farm's physical location.  This decision follows an extensive of review of the potential impacts of the previous requirement that payments for the Agriculture Risk Coverage program be based on the administrative county where farm records are maintained.

"NCGA worked determinedly to bring this issue to the attention of FSA Administrator Val Dolcini. We greatly appreciate his consideration of our concerns and the decision to act on the information we provided," said National Corn Growers Association Public Policy Action Team Chair Steve Ebke.

According to the FSA Administrator's office, the payments for farms enrolled in 2014 and 2015 with payments "would be recalculated in each physical location and summed for the farm using weights according to the number of base acres (including attributed acres) in each county."

Farms will not be allowed to retroactively change the administrative county or to be reconstituted.   The choice for producers who may be adversely impacted is between recalculating all base acres on a farm or retaining the current calculation tied to the farm's administrative county.  The flexibility to select and choose among different tracts or crops is not available.  In addition, a decision to recalculate based on the physical location of the tracts must be agreed upon by all producers on the farm with a share in the payment.  The deadline for requesting a recalculation is February 1, 2016. 

Although NCGA has learned the number of farms not located in their administrative county represent a small percentage nationwide, the potential for variation in payments can be very significant.  Growers who have transferred their farm records to another county office and those who have been impacted by the consolidation of county offices are encouraged to contact your FSA office for additional information.    



CHS Inc. to hold annual meeting Dec. 3 and 4 at the Minneapolis (Minn.) Convention Center.

Nearly 2,500 member cooperative- and farmer-owners of CHS Inc. (NASDAQ: CHSCP), the nation's leading co-op and a global energy, grains and foods company will gather in Minneapolis Dec. 3-4 to hear how the company they own demonstrated its commitment to them in 2015. The 2015 CHS Annual Meeting — with the theme "Commitment"— features reports from the company's board and management on 2015 fiscal results, operational highlights and strategic direction. A member question/answer session, director elections and other business will also take place during the meeting. Former NASA astronaut Mark Kelly, commander of Space Shuttle Endeavour's final voyage, will share his commitment story at the opening session on Thursday, Dec. 3, at approximately 4:30 p.m.

Agenda Highlights: (Complete agenda at www.chsinc.com/annual-meeting)

Thursday, Dec. 3
    CHS Expo Hall is open from 7:30 a.m. to 4 p.m. Learning exhibits and learning centers provide a hands-on experience with many of the resources and tools that CHS offers producers, cooperatives and business operations.
    Nearly 60 breakout sessions on Dec. 3 that tap into the expertise of CHS business leaders on issues affecting attendees' farm and cooperative operations. See a complete listing at chsinc.com/annual-meeting. Highlights include:
        Managing for opportunities through all economic cycles
        Producer financing
        Hedging 101: Price risk management
        Global crop nutrients market trends
        Ardent Mills joint venture value proposition
        Precision agriculture: YieldPoint® solution for success
        Global grain markets updates
        Energy prices
        Ethanol's value proposition
    Ardent Mills Mobile Innovation Center. Visitors will learn what is next in grain innovation, try some tasty grain-based samples and obtain new information about whole grain products. Representatives will also explain about their North American footprint that includes more than 40 community mills and blending facilities, as well as an artisan commercial bakery.

Friday, Dec. 4
    Starting at 9:30 a.m., the general session will feature board, management and financial reports, the company's business meeting and a member question/answer session.

Live webcast: Begins at 4 p.m. on Thursday, Dec. 3, and resumes at 9:30 a.m. on Friday, Dec. 4, at www.chsinc.com.  Twitter hashtag: #CHSInc2015. 



New Infographic Explains Antibiotic Use on Pig Farms

The National Pork Board has debuted a new infographic depicting how U.S. pig farmers work with their veterinarians to use antibiotics responsibly to help keep people, pigs and the planet healthy.

“As pig farmers, we work closely with veterinarians to make sure we’re using antibiotics only when necessary for the health and well-being of our animals,” said Derrick Sleezer, president of the National Pork Board and a pig farmer from Cherokee, Iowa. “We’re also committed to protecting human health, and we understand the importance of using tools such as antibiotics responsibly to ensure food safety.”

The National Pork Board continues to update and expand programs, such as Pork Quality Assurance® Plus, that certify that farmers know the latest information about how to practice responsible antibiotic use at the farm level. However, pig farmers are increasingly communicating with the public about this issue with the goal of demystifying antibiotic use.

“We realize that today’s consumers want to know how their food is produced and that it’s safe for their families,” Sleezer said. “This is why we’re reaching out and telling people how we keep animals healthy to produce safe food. This infographic is one way we will achieve that goal.”

The National Pork Board has made a concerted effort in 2015 to address antibiotic-related issues. The board’s three-point plan of action focuses on research, education and communication. The plan will help shape educational outreach to pig farmers, share information with the retail and foodservice industries and inform pork consumers.

Other antibiotic initiatives coming from the National Pork Board include a new independent blue-ribbon panel to discuss the issue and to help prioritize research and producer education programs. The panel also will identify opportunities for improvement in current antibiotic practices and offer guidance in how to improve antibiotic stewardship in the pork industry.

“The role antibiotics play in pig farming is often misunderstood,” said Chris Hodges, National Pork Board chief executive officer. “That’s why we work closely with various groups in the food chain and why we’re reaching out to consumers with information about how antibiotics are used on the farm. It’s all part of our responsibility to build consumer trust in pork production.” The entire infographic can be found by visiting porkcares.org under the Our Practices tab.