Thrusday January 14 Ag News

2016 Nebraska Crop Budgets
Roger Wilson, UNL Dept. of Agricultural Economics

The 2016 Nebraska Crop Budgets are complete and available online at:
    Farm and Ranch Management http://farm.unl.edu/crop-budgets
    CropWatch http://cropwatch.unl.edu/economics/budgets
    Nebraska Extension http://extensionpublications.unl.edu/assets/pdf/ec872.pdf

Four new budgets have been added for dryland corn production in eastern Nebraska.

The breakeven prices for 2016 are lower than they were in 2015 for every budget. The average decline in breakeven prices of the irrigated corn budgets is almost 24 cents per bushel; $4.42 in 2015 compared to $4.19 in 2016. (The apparent discrepancy in the math is because of rounding errors.) The break-even price for irrigated soybean budgets was 44 cents per bushel lower; $10.62 in 2015 compared to $10.18 in 2016.

Lower fuel cost is one reason for the decline in breakeven prices. The price used for fuel in 2015 was $3.25 per gallon compared to $2.25 per gallon in 2016. The fuel price for 2016 appears a little high now because it was obtained in October, 2015; but what it will be in the spring remains to be seen.

Fertilizer is another expense category where prices are lower in 2016 than they were in 2015. Nitrogen price is the main driver for this. The per-pound cost of nitrogen used in the budgets dropped from $0.55 per pound in 2015 to $0.47 per pound in 2016. Monoammonium phosphate has a lower proportion of nitrogen than any of the other fertilizers used in formulating the budgets and its price has changed the least over the past two years.

Prices for herbicides used in the budgets were mixed. Some of the prices for the products used in the budgets were higher and some lower. Some changed substantially, the changes in other price were more modest, and the prices used for some products were unchanged.

The prices for fungicides and insecticides used in the budgets either remained constant or increased modestly.

Land charges on the budgets are calculated by multiplying prices from University of Nebraska-Lincoln's Department of Agricultural Economics’ Farm Real Estate Report times 5% for opportunity cost plus 2% for an estimation of real estate taxes. The 2014-2015 report estimates of farmland prices decreased from a year earlier and these decreases showed up in the lower breakeven prices.

While decreased production costs are good news, they will not completely cover the reduced revenues from decreased crop prices. They do mitigate these revenue losses somewhat and may provide some optimism for the farm economy going forward. The following is a list of some selected budgets and their estimated breakeven prices.



NE Soybean Board to Meet

The Nebraska Soybean Board will hold their next meeting on Wednesday, January 20th, 2016 at the Central Valley Ag home office in York, Nebraska.  The meeting will start at 8:30am.  Highlights of the agenda include....
  - update on Soybean Management Field Days
  - Domestic Marketing and Producer Education/Communication committee meetings
  - Research and International Marketing committee meetings
  - Presentation on grain marketing apps from UNL's Cory Walters
  - UNL Research Reports
  - US Soybean Export Council projects update
  - Discussion on use of soybean meal in aquaculture diets

The agenda is preliminary and subject to change.  The meeting is open to the public. 



NE Corn Board to Meet

The Nebraska Corn Board will hold its next meeting on Thursday and Friday, January 28-29, 2016 at The Cornhusker Marriott, located at 333 South 13th Street in Lincoln, Nebraska.

The Board will address regular board business on Friday and is open to the public, providing the opportunity for public comment. A copy of the agenda is available by writing the Nebraska Corn Board, PO Box 95107, Lincoln, NE 68509, emailing janet.miller@nebraska.gov or calling either 402/471-2676 or 800-NECORN1.



Current National Drought Summary
droughtmonitor.unl.edu

Much of the Midwest continued to be 6-9 degrees warmer than normal in the past week. New England was warm, too, with Maine and northern New York as much as 9-12 degrees warmer than usual. Areas in northern Washington, Idaho, western Wyoming and much of California were 3-6 degrees warmer than usual, as were the coastal areas of the Mid-Atlantic and much of Florida. For areas west of the Missouri River, temperatures were generally cooler than normal, by as much as 9-12 degrees in parts of Arizona, New Mexico, Montana and South Dakota. On the wet end of the spectrum, much of southern California, southern Nevada, Arizona, southern Utah, southern Colorado, Kansas, northwest Missouri, southeast Nebraska, western Iowa, southern Florida, eastern Pennsylvania, and Maine recorded more than 200 percent of normal precipitation, with multiple storm events in the West. But the Pacific Northwest, northern Great Plains, south Texas, and the Southeast all had below-normal precipitation for the week.

High Plains and South
Portions of east Texas, east Kansas, southeast Nebraska, and the Texas Panhandle that were in the wettest part of the storm track got more than 200 percent of normal precipitation for the week. Temperatures were generally 3-6 degrees cooler than normal, as a good push of arctic air made it into the region. No changes were made in the High Plains or South on this week’s U.S. Drought Monitor.

Midwest
Temperatures remained on the warm side over most of the Midwest, with northern Michigan hitting 8-10 degrees above normal. Much of the Midwest recorded precipitation for the week, with the wettest areas being from southern Illinois into Indiana, Ohio, and Michigan, with total precipitation for the week over 1 inch. This precipitation led to removal of all the abnormally dry conditions from Indiana, Ohio, and much of southern Michigan this week. No other changes were made in the Midwest.

Looking Ahead
Over the next 5-7 days, an active pattern will bring precipitation to much of the Pacific Northwest and northern California, which could see as much as 8 inches of precipitation. Much of the area from the Mississippi Valley to the east also looks favorable for precipitation, with the greatest amounts along the Gulf Coast and Eastern Seaboard. Temperatures will be normal to slightly above normal over the West and East, cooler than normal over the High Plains, and above normal over the Southern Plains.

The 6-10 day outlooks show that the best chances for above normal temperatures are over the area west of the Rocky Mountains with the greatest chances over the West Coast. The best chances for below normal temperatures is over the Eastern Seaboard. The best opportunity for above normal precipitation is over much of California and into the Great Basin. Increased chances of above normal precipitation can also be anticipated over much of the Plains and into the Southeast. The greatest odds of below normal precipitation is anticipated over south Texas and the Great Lakes region into northern New England.




Protecting Property Taxpayers, Continuing Progress in Conservation and Addressing School Infrastructure Funding Among Iowa Farm Bureau Priorities for 2016 Legislative Session

Iowa Farm Bureau Federation’s 2016 (IFBF) priorities are focused on securing adequate funding to continue to advance Iowa’s water quality efforts, extending funding mechanisms that protect property taxpayers and address school infrastructure funding.

“Farm Bureau has long worked to advance Iowa’s water quality and soil conservation efforts and it’s important that work continues in the 2016 legislative session,” says IFBF President Craig Hill.  “Using the Iowa Nutrient Reduction Strategy as our science-proven guide, Iowa farmers have made great strides in planting cover crops and installing conservation structures and we need to keep that momentum going, because we know it’s working; while Iowa distributed a record $8.78 million in conservation cost share dollars last year, farmers more than matched that state investment with $12.8 million of their own funds.  Keeping the momentum moving forward to measurably improve water quality takes generational investment and commitment.”

Farm Bureau will also work with legislators to update the state’s one-cent sales tax used for school infrastructure.  Farm Bureau members favor the elimination of a scheduled sunset on the Secure and Advanced Vision for Education, or SAVE program, and will also work to encourage increased public input and property tax relief with SAVE funds across the state.   

Farm Bureau has long been committed to addressing funding mechanisms to help reduce the burdens placed on property taxpayers.  “Iowans will pay more than $5 billion in property taxes this year and the legislature has the opportunity to address several measures to help ease that burden and make us more competitive nationally, for small business growth,” says Hill.  Farm Bureau will work with the legislature to ensure that property taxpayer protections are extended in the mental health funding system by extending the statewide cap that keeps property tax contributions limited and controlled.  The legislature must also extend the funding mechanism that ensures increases in education are funded by the state, which has saved property taxpayers over $31 million the past three years.     

As part of their ongoing efforts to ease tax burdens on Iowans, IFBF will once again work to ensure that Ag Land/Family Farm and Homestead property tax credits remain unchanged from last year’s levels, as well look for opportunities to couple Iowa’s tax policies with federal tax policies.



Corn, LP Becomes Newest Growth Energy Member

Today, Growth Energy, the largest trade association for U.S. ethanol producers and supporters, welcomed Corn, LP as its newest member.

“We are excited that Corn, LP has joined the Growth Energy team,” said Growth Energy co-chairman Tom Buis. “Corn, LP is an outstanding plant that provides a great market for corn growers in the heart of Iowa and produces highly nutritious animal feed for the region. Corn, LP also creates good jobs that cannot be outsourced, improves our environment and reduces our dependence on foreign oil.”

Dr. John Gazaway, President of Corn, LP, commended the partnership, stating, “By joining Growth Energy, we will be able to further our mission of adding value to locally grown grains and benefitting our community through economic growth. We are also proud to support Growth Energy’s efforts to ensure a strong future for our industry.”

Corn, LP is located next to its partner Gold-Eagle Cooperative in Goldfield, Iowa, and has a production capacity of 60 million gallons.



RENEWABLE FUELS MARKETING AWARDS PRESENTED TO DARIN SCHLAPIA FROM FARMERS COOPERATIVE COMPANY IN AFTON AND KEVIN DEGOEY FROM NEW CENTURY FS IN GRINNELL

Iowa Secretary of Agriculture Bill Northey announced that Darin Schlapia from Farmers Cooperative Company in Afton and Kevin DeGoey from New Century FS in Grinnell are the 2016 winners of the Secretary’s Biodiesel and Ethanol Marketing Awards.  The awards were created by the Iowa Department of Agriculture and Land Stewardship to recognize fuel marketers that have gone above and beyond in their efforts to promote and sell renewable fuels.

“New Century FS and Farmers Cooperative Company have made expanding access to renewable fuels a priority and invested in the infrastructure necessary to make variety of biodiesel and ethanol available to their customers.  On top of that, they have worked hard to promote these home-grown fuels and educate their customers about the benefits,” Northey said.

The Secretary’s Ethanol and Biodiesel Marketing Awards were designed to recognize businesses that market the renewable fuels they have available through creative efforts including, but not limited to: hosting special events highlighting their renewable fuels, development of creative signage, initiation of new advertisements or marketing efforts, and dramatically increase renewable fuel availability.

The winners were announced and recognized during the Petroleum Marketers & Convenience Stores of Iowa Annual Meeting in Des Moines on Jan. 12th.  The Petroleum Marketers and Convenience Stores of Iowa (PMCI) is a non-profit state trade association serving the needs of independent petroleum marketers and convenience store owners throughout the state of Iowa.

“Fuel marketers are the place where customers access the home-grown, clean-burning renewable fuels we produce here in Iowa.  Our state is fortunate to have many retailers that have made a significant investment to give customers greater access to renewable fuels and more choice at the pump,” Northey said

Ethanol
Kevin DeGoey, the Energy Department Manager for New Century FS in Grinnell is winner of the 2016 Secretary’s Ethanol Marketing Award.

New Century FS offers higher ethanol blends at their sites in Grinnell and Vinton and are working to add additional ethanol blender pumps as part of the Iowa USDA Biofuels Infrastructure Partnership program.  They were an early adopter of registered E15 and are now one of 40 locations statewide offering this higher blend to customers.  In the second year that E15 was offered at their facility in Vinton sales jumped 93 percent and now account for 27 percent of the fuel sales at that site.

Under Kevin’s leadership, New Century FS actively promotes higher ethanol blends through signage, advertisements, sponsored direct mail pieces containing fuel discount coupons and customer education events with fuel discounts.

DeGoey and New Century FS were nominated for the award by the Iowa Corn Promotion Board and the Iowa Renewable Fuels Association.

Biodiesel
Darin Schlapia with Farmers Cooperative Company in Afton is the winner of the 2016 Secretary's Biodiesel Marketing Award.

Farmers Cooperative Company participated in the “Fueling our Future” pilot program to install one of the first biodiesel blender pumps in the state at their site in Mt. Ayr.  That site offer offers #2 diesel, B11, B20, B30 and B99.  As part of the “Fueling our Future” program, Schlapia and Farmers Cooperative Company worked with Iowa State University to evaluate consumer perceptions and the impact of increased assess to mid-level biofuels blending options, including impacts on improved air quality.

Schlapia has also worked to promote higher blends of biodiesel to coop members and area motorists in advertising, articles and promotional events.

Schlapia and Farmers Cooperative Company were nominated for the award by the Iowa Renewable Fuels Association.

Renewable Fuels Industry Overview
Iowa leads the nation in the production of ethanol and biodiesel.  According to the Iowa Renewable Fuels Association, Iowa has 43 ethanol refineries capable of producing more than 3.0 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.

The Iowa Renewable Fuels Infrastructure Program offers cost-share grants for the installation of E85 dispensers, blender pumps, biodiesel dispensers, and biodiesel storage facilities.  The grant program is managed by Iowa Department of Agriculture and Land Stewardship and more information can be found on the Department’s website at www.IowaAgriculture.gov.



Alltech launches EPNIX feedlot program at NCBA

Global animal health leader Alltech is launching a new feeding program that aims to give their cattle customers a competitive advantage in the feedyard.

EPNIX stems from Alltech’s nutrigenomics and epigenetics research platforms and provides a targeted nutritional approach to improving the carcass weight and performance of feedlot cattle independent of antimicrobial or beta-agonist supplementation. Alltech, recognized throughout the beef industry for its signature product Bio-Mos®, will be launching EPNIX at their booth 3917 at the 2016 National Cattleman’s Beef Association Convention in San Diego, California, Jan. 27- 29.

“Developed through five years of testing with accredited universities and large pen beef research institutions, EPNIX is a feeding program that is nutritionally customized to fit the specific life stages of feedlot cattle,” said Dr. Vaughn Holder, Alltech beef specialist. “Using nutritional interventions specifically targeted to each stage of production, we can achieve better health, improved performance and increased profitability.”

EPNIX allows producers to focus on precisely meeting the nutritional needs of both their receiving and finishing cattle. A major component of the program is powered by 100 percent organic trace minerals through Alltech’s Total Replacement Technology (TRT). Recent research shows that producers can feed substantially lower amounts of organic trace minerals than the inorganic alternative and achieve similar, if not better, performance in cattle.

“Through recent feedyard trials with EPNIX, we have seen increased carcass weight up to 14.1 pounds and significant increases in dressed yield and ribeye area,” Holder said. “This increases profit per head and ultimately delivers a positive ROI to the producer.”

Holder will introduce EPNIX and present the latest TRT feedlot research at the NCBA Learning Lounge, Friday, Jan. 9 at 10:30 a.m. NCBA attendees are also invited to find out more about EPNIX during Alltech’s happy hours Jan. 28 from 5 to 6 p.m. and Jan. 29 from 4 to 5 p.m.

Alltech is the first Feed Verified company by IMI Global, certifying 13 technologies at an approved feed input in the Verified Natural, Antibiotic-Free, Non-Hormone Treated Cattle (NHTC), GAP 5-Step Animal Welfare RatingTM and Non-GMO Project Verified programs. For more information, visit http://www.imiglobal.com/feed-verified.html.



Cattlemen Testify to the Importance of the Trans-Pacific Partnership
 
Today, the United States International Trade Commission hosted a hearing entitled Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors. Kevin Kester, National Cattlemen’s Beef Association Policy Division chair, testified before the ITC, stressing the importance of TPP for the cattle industry.

"We have a very mature market in the United States, but 96 percent of the world’s population lives outside U.S. borders," said Kester, a cattle producer from California. “With a growing middle class overseas demanding a higher quality diet, we need strong trade agreements like TPP in place to level the playing field and allow us access to those consumers who are asking for our product."

The TPP is multi-lateral trade agreement negotiated by the United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Japan, Canada and Mexico. The biggest advantage for cattle producers is the increased access to the Japanese market. In 2014, the U.S. exported beef worth $1.6 billion into Japan at a 38.5 percent tariff. Once TPP is implemented that tariff rate will phase down to 9 percent over 15 years, with a significant cut in the first year.

“This agreement grants the greatest market access for U.S. beef ever negotiated into Japan,” said Kester “Since Australia implemented their own bilateral trade agreement with Japan last year, the U.S. has lost five percent of the market share, about $100 million in sales, in Japan. We cannot afford to wait on TPP or we will continue to lose market share.”

The U.S. is already one of the most open markets in the world and the National Cattlemen’s Beef Association urges Congress to pass TPP swiftly. Of the more than 260 preferential trade agreements in force worldwide, only 14 include the United States. If the U.S. does not act to expand new market opportunities in these growing economies, cattle producers will be severely disadvantaged the global market place.



Free workshop Saturday at National Western Stock Show examines stewardship of antimicrobial drug use in livestock

Stewardship of medically-important antimicrobial drugs in food animals is the subject of a free workshop to be offered Saturday, Jan. 16, at the National Western Stock Show (NWSS) in Denver, CO.

The workshop is targeted to youth raising and showing cattle, livestock producers, veterinarians, feed suppliers and educators. The workshop will be 9 a.m. to noon at the Beef Palace Arena on the NWSS grounds.

For those not able to participate in person, this workshop will be webcast live by BARN Media. Access the webcast at: http://livestream.com/BarnMedia/events/4637175. The webcast will also be archived for later viewing.

A collaboration of Farm Foundation, NFP and the Livestock Division of the NWSS, the workshop will focus on two Guidance for Industry (GFIs) issued by the U.S. Food and Drug Administration (FDA) regarding the use of medically-important antimicrobial drugs in food-producing animals, as well as the FDA's revised Veterinary Feed Directive (VFD) rule. These actions mean some drugs will see label changes allowing only therapeutic uses, and some drugs administered in feed or water will require veterinary oversight in the form of a veterinarian's prescription or direct administration by a veterinarian.

Officials from FDA and USDA's Animal and Plant Health Inspection Service (APHIS) will participate in the workshop to discuss specific elements of the policies. An update will also be provided on USDA's Antimicrobial Resistance Action Plan. A major portion of the workshop is designated for participants to identify and give feedback to federal officials on the management challenges ahead. Kevin Ochsner of the Adayana Agribusiness Group will lead the workshop.

Saturday's workshop is one of a series Farm Foundation has conducted across the country. The workshops were an opportunity for provide producers, veterinarians and feed suppliers to gain information on the new policies, and for FDA and APHIS to gain feedback on the management challenges involved in implementing the policies. NWSS hosted a Sept. 28 workshop, and invited Farm Foundation to present another workshop as part of the 2016 Stock Show.

The national summit, Antibiotic Stewardship: Policies, Education and Economics, will be Jan. 20-21, 2016, at the Hyatt Regency Capitol Hill, Washington, D.C. This summit is an opportunity for farmers, ranchers, feed suppliers, veterinarians, academics and government agency staff to advance the conversation on the industry's adaptation to the changing landscape of antimicrobial drug use. The event is a collaboration of Farm Foundation, the Association of Public and Land-grant Universities, the Association of American Veterinary Medical Colleges and USDA's Economic Research Service.



Buenos Aires Exchange Raises Corn Area View on Late Planting

A late rush to plant corn prompted the Buenos Aires Cereals Exchange to raise its 2015-16 Argentine corn area view Thursday.

The exchange raised its acreage estimate by 9% to 10.3 million as growers responded to the better prospects for the grain following the end of corn export tariffs and quotas and the devaluation of the Argentine peso.

Acreage will still be 9% lower than last year though.

Immediately following his surprise election win in December, Argentina's new president, Mauricio Macri abolished the 20% tax on corn shipments and later scrapped a quota system for export. He also allowed the Argentine peso to devalue by 40%. These factors led to a dramatic jump in local prices.

By mid-December, corn planting was already two-thirds complete, but those who planted late corn or employed it as a second crop chose to increase area.

Planting is now 89.4% complete, according to the exchange, and a lot looks in generally good condition across most of Argentina's grain belt following abundant rainfall in recent months.



Dairy industry voices pros and cons to TPP in front of U.S. International Trade Commission

The U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) continued to play an active role in the Trans-Pacific Partnership (TPP) trade agreement process this week, as USDEC President Tom Suber testified before the U.S. International Trade Commission (USITC) representing the U.S. dairy industry.

USITC held three days of hearings to gather information for an economic analysis of TPP as mandated by Trade Promotion Authority legislation. That analysis includes the pact’s impact on specific business sectors, such as agriculture. Suber, following detailed written comments to USITC submitted jointly by USDEC and NMPF in December, sought to outline issues and concerns of the U.S. dairy business.

“USDEC, working with NMPF and other organizations in the dairy industry, is still completing its overall analysis of TPP,” said Suber. “The deal falls short in providing the degree of market access we had been seeking, but it also avoids a disproportionate opening of the U.S. market to dairy exporters. While we don’t give the pact a failing ‘grade,’ until we have come to a final analysis of its net benefits, we felt it was important to participate in USITC’s assessment and identify points we believe the agency should consider in its economic analysis.”

The agreement for example contains landmark non-tariff achievements dealing with sanitary and phytosanitary (SPS) rules and geographical indication (GI) provisions. TPP is the first U.S. trade agreement to include rules and disciplines on SPS measures that go beyond those contained in the World Trade Organization (WTO) SPS agreement.

“The strengthened SPS commitments address the escalating threat that unwarranted and sudden SPS measures are posing to U.S. agricultural exports around the world,” said Suber. “Nearly all the ‘WTO-plus’ provisions are enforceable through the TPP’s settlement mechanism.”

Furthermore, prior to TPP, U.S. trade deals were virtually silent on GIs. TPP’s groundbreaking GI provisions establish a more equitable international model for approaching the issue of GI registration in sharp contrast to the fundamentally flawed European Union approach that uses Gis in trade negotiations as bargaining chips for market access.

“These achievements may be difficult to quantify through traditional economic modeling, but are certainly relevant to the economic gains the United States may hope to achieve through TPP,” Suber said.

USDEC also identified of number of additional factors pertinent to USITC’s assessment efforts and urged the agency to take them into account. Those factors include TPP’s impact on U.S. exports in existing FTA partner markets (like Mexico and Peru) and elsewhere in light of TPP-region competition from Australia and New Zealand; the impact of U.S. tariff elimination on milk powders and specific cheeses; the expected level of exports from Canada to the United States; the likelihood of intentionally obstructive regulatory barriers; the degree of flexibility created by the agreement’s rules of origin; and the use of new TPP safeguard provisions by the United States.

“We stand ready to work with USITC analysts following these hearings to discuss these recommendations and to assist in their efforts,” Suber said.

Legislation mandates that USITC deliver its assessment to the president and Congress no more than 105 days after the president signs the agreement. The earliest the president can sign the agreement is February 4, which would make the USITC report due by May 18.