Thursday July 21 Ag News

 Rural Mainstreet Economy Weakens in July - Negative Cash Flows Likely for Many Crop Farmers

The Creighton University Rural Mainstreet Index for July fell from June’s weak reading, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.  

Overall: After improving for four of the last five months, the index, which ranges between 0 and 100, sank to 39.8 from 43.9 in June.  This is the 11th straight month the overall index has remained below growth neutral.

“Over the past 12 months, farm prices have fallen by 9 percent, and livestock prices are off by 16 percent. These weak agriculture commodity prices are pushing the overall Rural Mainstreet economy lower,”  said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

As a result of weaker farm economic conditions, bankers expect almost one in five crop farmers, or 19.5 percent, to suffer negative cash flows where cash expenses exceed cash revenues for 2016.

Farming and ranching: The farmland and ranchland-price index for July slumped to 31.3 from 32.3 in June. This is the 32nd straight month the index has languished below growth neutral 50.0.

This month, bankers estimated, on average, farmland prices have fallen by 6 percent over the past 12 months. However, as in previous months, there is a great deal of variation across the region in the direction and magnitude of farmland prices, with prices growing in some portions of the region.

The July farm equipment-sales index sank to 10.7 from 12.8 in June. “Weakness in farm income and low agriculture commodity prices continue to restrain the sale of agriculture equipment across the region,” said Goss.

This month, bankers were asked to assess the likelihood of loan defaults in their area. On average, farm loan defaults are expected to rise by 5.4 percent over the next 12 months.  However almost one-fifth, or 18.3 percent, of bank CEOs estimate loan defaults will expand by more than 10 percent.

Nebraska: The Nebraska RMI for July shrank to 51.5 from a regional high of 63.2 in June. The state’s farmland-price index slipped 49.3 from June’s 49.7. Nebraska’s new-hiring index declined to 55.2 from 58.8 in June. Nebraska’s job growth over the last 12 months; Rural Mainstreet, 1.5 percent; Urban Nebraska, 1.4 percent.

Iowa: The July RMI for Iowa sank to 51.9 from June’s 59.1. Iowa’s farmland-price index for July dipped to 49.7 from 51.5 in June. Iowa’s new-hiring index for July fell to 55.4 from 59.4 in June. Iowa’s job growth over the last 12 months; Rural Mainstreet, 1.5 percent; Urban Iowa, 0.9  percent.

Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included. The survey is supported by a grant from Security State Bank in Ansley, Neb.

This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.



Nebraska Farm Bureau Young Farmers and Ranchers Maintain Optimism in the Face of Tougher Economic Times

The future of agriculture relies upon the ability of young people to maintain and grow their farms and ranches. While the recent downturn in the agricultural economy could lead one to be pessimistic about the future, after a recent National Affairs visit to Washington D.C., the Nebraska Farm Bureau Young Farmers and Ranchers Committee, continue to remain optimistic about the years ahead.

“Given the importance of agriculture to the overall health of Nebraska’s economy, it isn’t hard to see why Nebraska has successfully weathered and even prospered through the economic uncertainty of the past. Yet, recent USDA projections of an over 30 percent reduction in net farm income, as compared to 2013, along with continued tax and regulatory challenges, could signal trouble on the horizon. These continued challenges make it more important than ever for our state’s young farmers and ranchers to speak out about the challenges they face on their operations,” Steve Nelson, president of Nebraska Farm Bureau said July 21.

“Of particular concern is a 33 percent rise in operating debt since 2012. As farmers and ranchers are adding debt, they have also been drawing down financial assets, such as cash or equity. Young and new farmers and ranchers are of particular concern as their ability to handle such a downturn is significantly less than a well-established farmer or rancher,” Nelson said.

However, with great challenges comes even greater opportunities. Throughout the trip, increased agricultural trade, Trans Pacific Partnership (TPP), was highlighted as a way to provide a necessary boost to the agricultural economy. Passage of TPP continues to be a Farm Bureau priority. According to analysis conducted by the American Farm Bureau (AFBF), the TPP will increase annual net farm income by $4.4 billion and increase U.S. agricultural exports by $5.3 billion per year.

“Nebraska also stands to make significant annual gains from the TPP with a $378.5 million increase in ag cash receipts and a $229.2 million boost to ag exports. According to the Nebraska Farm Bureau analysis, Cuming, Custer, Platte, Dawson, and Lincoln counties would be among the biggest winners under TPP, as those counties would each experience more than $10 million in additional cash sales of agriculture commodities per year once TPP trade protocols are fully enacted. Congress needs to pass the TPP quickly as we continue to lose market share in many of the TPP member nations each day this agreement is not in place,” Nebraska Farm Bureau Young Farmers and Ranchers Committee Chairman Todd Reed said.

Another issue front and center during the trip was the GMO Labeling bill, which passed the U.S. House of Representatives while the group was in town. This important piece of legislation will help provide certainty to food companies who would have been unable to work through a patchwork of state GMO labeling laws.

“As with all compromises, there are pieces we like and pieces we don’t. The bill’s mandatory nature continues to be a problem for us, however we simply could not allow a system of state-based GMO labeling to occur. While not perfect, the Roberts-Stabenow compromise bill will set a national standard on GMO labeling utilizing digital disclosure technologies,” Reed said.

Those attending the National Affairs visit are:
Steve Nelson, president Nebraska Farm Bureau – Kearney/Franklin County
Todd and Julie Reed, chairman YF&R Committee – Lancaster County
Brian and Amy Gould, District 3 representative YF&R Committee - Cedar County
Matt and Elizabeth Albrecht, District 7 representative YF&R Committee - Dawson County
James and Katie Olson, District 6 representative YF&R Committee - Holt County

Besides visiting with Nebraska’s Congressional Delegation, the Nebraska Farm Bureau Young Farmers and Ranchers met with the Federal Aviation Administration to discuss recently released rules regarding the commercial use of “unmanned aircraft systems”, or “drones”, and met with CropLife America and Syngenta to discuss the latest efforts to remove the well-known product Atrazine from their toolbox of crop protection products.

“The list of challenges young farmers and ranchers face is no doubt long. However, the need for young producers to answer the call of growing food for our nation and world remains as strong as ever. Continuing to communicate our message to key decision makers is vital to the future success of our nation as well as for farm and ranch families,” Reed said.



Central Valley Ag’s 2016 Purina® Check-R-Board® Days

Central Valley Ag is announcing their 2016 Purina® Check-R-Board® Days, a customer appreciation event.  Stop by Central Valley Ag located at 445 South Main West Point, NE 68788 on Friday, August 26th for special savings on select items throughout, prize giveaways, complimentary burgers, live remote radio from 11 AM – 1 PM plus a Purina®  Animal Nutrition Specialist will be on-site to answer any questions.

Customers will also have the opportunity to enter in the national 2016 Purina® Check-R-Board® Days Sweepstakes for their chance to win a 2016 John Deere™ Gator TS, a Trip-for-Two to the Purina® Animal Nutrition Center, or Purina® Gear YETI® Tundra Cooler. See store for official rules.

“We are proud to serve the residents of our community and thank them for their continued loyalty,” Brandi Salestrom of Central Valley Ag. “We invite everyone to come celebrate our 2016 Purina® Check-R-Board® Days with us!”



Cyclists will have a chance to fuel up on lean protein at stops along the RAGBRAI route this year.

Beef is an excellent source of protein and plays a vital role in muscle repair and recovery. Beef is considered a nutrient dense and energy-packed food that can be a high powered source of nutrition for athletes participating in RAGBRAI. According to the 2015 U.S. Dietary Guidelines, a single 3-ounce serving of lean beef provides 10 essential nutrients in about 150 calories – including nutrients like iron, zinc and B vitamins that are critical for development and optimal health throughout life.

Riders can find beef in Fremont county at the old Randolph lumber yard. The Fremont County Cattlemen will be grilling ribeye steak sandwiches from 10 am to 4 pm on Sunday, July 24, and the Page and Fremont County Corn Growers will also be roasting sweet corn.

On Monday, the Adams County Cattlemen will be grilling at the Central Park in Corning, near the Beer Garden. They will serve ribeye steak sandwiches, ribeye wraps, and beef brats.

Washington County Cattlemen will be grilling ribeye steak sandwiches at the Washington County Fairgrounds on Friday, July 29 from 10 am to close. There will also be a potato bar and live band playing.

Brewer Family Farms of Dallas Center has teamed up with the Iowa Craft Beer Tent and will be offering beef brats at 13 stops along the route.



Record High Red Meat Production for June

Commercial red meat production for the United States totaled 4.23 billion pounds in June, up 5 percent from the 4.02 billion pounds produced in June 2015.

Beef production, at 2.19 billion pounds, was 10 percent above the previous year. Cattle slaughter totaled 2.71 million head, up 10 percent from June 2015. The average live weight was up 3 pounds from the previous year, at 1,335 pounds.

Veal production totaled 6.4 million pounds, 8 percent below June a year ago. Calf slaughter totaled 37,600 head, up 7 percent from June 2015. The average live weight was down 45 pounds from last year, at 291 pounds.

Pork production totaled 2.01 billion pounds, up 1 percent from the previous year. Hog slaughter totaled 9.57 million head, up 1 percent from June 2015. The average live weight was down 2 pounds from the previous year, at 280 pounds.

Lamb and mutton production, at 13.2 million pounds, was down 2 percent from June 2015. Sheep slaughter totaled 195,200 head, slightly above last year. The average live weight was 135 pounds, down 3 pounds from June a year ago.

June '16 Prod    
State                          million lbs.      % of June '15
Nebraska .....:               689.0                  114      
Iowa ............:               567.5                   98      
Kansas .........:               469.1                  108      

January to June 2016 commercial red meat production was 24.4 billion pounds, up 3 percent from 2015. Accumulated beef production was up 5 percent from last year, veal was down 7 percent, pork was up 1 percent from last year, and lamb and mutton production was up slightly.



June Milk Production up 1.6 Percent
                       
Milk production in the 23 major States during June totaled 16.7 billion pounds, up 1.6 percent from June 2015 according to USDA.  May revised production at 17.4 billion pounds, was up 1.2 percent from May 2015.  The May revision represented a decrease of 2 million pounds or less than 0.1 percent from last month's preliminary production estimate.

Production per cow in the 23 major States averaged 1,926 pounds for June, 26 pounds above June 2015.  This is the highest production per cow for the month of June since the 23 State series began in 2003.

The number of milk cows on farms in the 23 major States was 8.65 million head, 17,000 head more than June 2015, and 3,000 head more than May 2016.

IOWA MILK PRODUCTION
 Milk production in Iowa during June 2016 totaled 413 million pounds, up 2 percent from the previous June according to the latest USDA, National Agricultural Statistics Service – Milk Production report. The average number of milk cows during June, at 211,000 head, was the same as last month but 1,000 fewer than a year ago. Monthly production per cow averaged 1,955 pounds, up 45 pounds from last June.

April-June Milk Production up 1.2 Percent
Milk production in the United States during the April  - June quarter totaled 54.4 billion pounds, up 1.2 percent from the April - June quarter last year.The average number of milk cows in the United States during the quarter was 9.33 million head, 8,000 head more than the January - March quarter, and 6,000 head more than the same period last year.

Nebraska Milk Production
Milk production in Nebraska during the April – June 2016 quarter totaled 354 million pounds, up 8 percent from the April – June 2015 quarter, according to the USDA’s National Agricultural Statistics Service. The average number of milk cows was 61,000 head, 5,000 head more than the same period last year.



ASA Continues to Press EU on Approval of Xtend Soybeans and Dicamba Use

The American Soybean Association (ASA) has continued to pressure the European Commission to provide final approval of Xtend soybeans that have been awaiting final authorization from the Commission since January.  ASA also met separately with Monsanto and companies like Pioneer, that have in-licensed the trait , to discuss each company’s planning to keep Xtend soybeans planted in 2016 out of EU export channels should EU approval be further delayed.

ASA is aware of reports of potential inappropriate and unauthorized use of dicamba over Xtend soybeans in the mid-South that reportedly caused crop injuries. Below are updates on all three issues.

Final Authorization in the European Union
While Xtend soybeans are approved for import into China and other major U.S. soy export markets, final approval in the European Union (EU) has been pending since January.  ASA has continued its pressure on the EU to provide final authorization; we hope and anticipate that final approval will be received in the next number of days.  We will keep the ASA board and states informed of developments.

Xtend Soybeans and EU Approvals
In recent weeks ASA has met separately with Monsanto and Pioneer (which was in-licensed by Monsanto to sell Xtend soybeans in 2016) to discuss the status of Xtend soybeans in the EU, and planning to keep Xtend soybeans out of EU export channels should approval be further delayed. The EU commission has communicated to government agencies and been quoted in the press on multiple occasions that the final import approval for Xtend soybeans would be completed soon. The companies are very cognizant of the need to keep unapproved biotech events out of export channels so that U.S. soy exports are not disrupted and U.S. soybean farmers do not suffer losses. The companies remain in dialogue with ASA and key industry partners, including the grain handling sector, on this important issue. Farmers are encouraged to talk with their seed dealer with any questions.

Reports of Dicamba Injury to Crops
Over the past week there have been news stories reporting on potential dicamba injury to crops, and that the Missouri, Arkansas and Tennessee Departments of Agriculture are investigating such reports.

Some Key Points:
-    ASA is aware of recent news reports of potential injury to crops from suspected dicamba herbicide use, and that appropriate state departments of agriculture are investigating such reports.
-    Susceptible crops can sustain injury from dicamba herbicides due to non-complete cleanout of spray equipment, wind drift, or volatilization in certain climatic conditions (in which the liquid turns into a vapor in certain climatic conditions and moves from its placement on a field).
-    In the case of drift or volatilization, injury to nearby susceptible crops could occur if dicamba was being used to “burn down” the weeds in a field prior to planting of a double-crop, if dicamba was being used to control weeds in nearby corn fields or other crops for which dicamba use is approved, or if dicamba was inappropriately used in an over-the-top application on a dicamba tolerant soybeans or cotton (Xtend soybeans and cotton).
-    If dicamba was sprayed by an operator on Xtend soybeans or cotton, such in-season crop use was inappropriate and unauthorized because the labels for such use still are in the process of being finalized by the Environmental Protection Agency (EPA).  Growers were advised by ASA, Monsanto, Pioneer, BASF, and other sellers of Xtend soybeans and cotton that dicamba use was not approved for over-the-top application during the 2016 growing season.
-    Both Monsanto and BASF have developed dicamba formulations that significantly reduce volatilization and thus will help avoid any non-target crop damage.  Labels for these formulations currently are pending review by the EPA.  ASA is working with Monsanto, BASF, and EPA for approval of these labels this summer/fall so that these low-volatility dicamba formulations will be available to growers in the 2017 growing season.




New Leaders Conclude 2016 Program with Washington Meetings

A busy week of meetings focused on our nation's capital concluded the 2016 class of the NCGA DuPont New Leaders Program. Twenty-six farmers from 15 states took part in the overall program, which was generously co-sponsored by DuPont and is aimed at preparing participants to be strong advocates and leaders for today's agriculture.

"It was great to meet many of those participating in our events this week, like the action team meetings, our Corn Congress policy sessions, and visits to their members of Congress," said NCGA Chairman Martin Barbre. "These new leaders are the future of our organization, and it was inspiring to see the passion and energy these men and women bring into everything they do. We're also very grateful for DuPont's support in this growing effort."

For the participants, the week began with Monday spent in Wilmington, Del., learning about the history of DuPont and the important work the company is doing specifically in the area of crop protection. In Washington, they attended policy meetings on Tuesday and Wednesday. Completing their DC experience, the team had an opportunity to thank members of Congress and their staff for the GMO labeling vote, encourage revision of EPA's draft risk assessment of atrazine, and urge support of the Trans-Pacific Partnership.

This is the second plenary session of the program, which kicked off in January in Des Moines, followed by activities at the Commodity Classic convention and trade show and month webinars April through July focused on key issue areas and reports from participants on their interim activities. 2016 marks the third year of this program.

This year's overall program participants were: Jonathan and Bridget Hitchcock, Georgia; Casey and Teresa Schlichting, Iowa; Matthew DeSutter, Illinois; Sam and Stephanie Halcomb, Kentucky; Corey Pace, Kentucky; Greg Dell, Maryland; Brent and Bryce Krohn, Minnesota; Ben Storm, Minnesota; Brian Martin, Missouri; Phillip and Lindsay Sloop, North Carolina; Ben Bakko, North Dakota; Deb Gangawish, Nebraska; Joel and Jenna McAfee, Nebraska; Tyler and Whitni Drewes, Ohio; Rob Holman, Tennessee; Bert and Brittney Ring, Texas; Robert Baylor, Virginia; and Trent Jones, Virginia.



Forty Senators Call for Higher Biodiesel Targets in RFS

Forty U.S. senators from across the country Thursday called on the EPA to strengthen biodiesel volumes in the pending Renewable Fuel Standard (RFS) proposal.

The senators emphasized that biodiesel and renewable diesel are leading the way in delivering Advanced Biofuels under the RFS and said the EPA should do more to encourage their growth.

“The biodiesel industry has met RFS criteria for growth, exceeding the goals that Congress envisioned when it created the RFS with bipartisan support in 2005 and supporting over 47,000 jobs,” the letter states. “To date, biodiesel and renewable diesel have delivered the majority of the advanced biofuels under the RFS. We believe it is clear that these fuels offer the best opportunity for growth in the near future.”

The letter, which can be found here, was led by Sens. Roy Blunt, R-Mo., Patty Murray, D-Wash., Chuck Grassley, R-Iowa, and Heidi Heitkamp, D-N.D. It was signed by a bipartisan group of additional senators from California to Minnesota to Maine.

Biodiesel – made from a diverse mix of resources such as recycled cooking oil, soybean oil and animal fats – is the first and only EPA-designated Advanced Biofuel to reach commercial-scale production nationwide. It has made up the vast majority of Advanced Biofuel production under the RFS to date.

According to the EPA, it reduces greenhouse gas emissions by 57 percent to 86 percent compared with petroleum diesel.

“I think this letter reflects a growing consensus on Capitol Hill that biodiesel and renewable diesel are successfully delivering the economic and environmental benefits that Congress had in mind when it created the RFS,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board (NBB). “This is a success story, and hopefully this letter helps show the Obama administration and the EPA that we need to do more. We need to embrace growth in our cleanest fuels, and the EPA proposal as it stands falls short of that.”

“On behalf of biodiesel producers around the country we want to thank all the senators who signed this letter, particularly Sens. Blunt, Murray, Grassley and Heitkamp for their leadership in organizing the effort,” Steckel added.

The RFS – a bipartisan policy passed in 2005 and signed into law by President George W. Bush – requires increasing volumes of renewable fuels in the U.S. fuel stream, and specifically calls for increasing volumes of Advanced Biofuels in the coming years.

Biodiesel and renewable diesel – a similar diesel alternative – fall under the Biomass-based Diesel category of the RFS, which is an Advanced Biofuel category intended to ensure that the policy also addresses the diesel fuel market, not just gasoline. Under the law, Advanced Biofuels must reduce lifecycle greenhouse gas emissions by at least 50 percent compared to petroleum fuels.

The EPA proposal would establish a 2.1-billion-gallon Biomass-based Diesel requirement in 2018, up only slightly from the already established 2-billion-gallon requirement for 2017. Citing unused industry capacity and data showing that Biomass-based Diesel consumption is already exceeding 2.1 billion gallons annually, the senators called for at least 2.5 billion gallons for 2018.

The additional senators signing the letter were Tammy Baldwin (D-Wis.), Richard Blumenthal (D-Conn.), Barbara Boxer (D-Calif.), Sherrod Brown (D-Ohio), Maria Cantwell (D-Wash.), Bob Casey (D-Pa.), Susan Collins (R-Maine), Joe Donnelly (D-Ind.), Richard Durbin (D-Ill.), Joni Ernst (R-Iowa), Dianne Feinstein (D-Calif.), Al Franken (D-Minn.), Martin Heinrich (D-N.M.), Mazie Hirono (D-Hawaii), John Hoeven (R-N.D.), Angus King (D-Maine), Mark Kirk (R-Ill.), Amy Klobuchar (D-Minn.), Patrick Leahy (D-Vt.), Ed Markey (D-Mass.), Claire McCaskill (D-Mo.), Jeff Merkley (D-Ore.), Jerry Moran (R-Kan.), Gary Peters (D-Mich.), Jack Reed (D-R.I), Pat Roberts (R-Kan.), Mike Rounds (R-S.D.), Bernie Sanders (I-Vt.), Jeanne Shaheen (D-N.H), Debbie Stabenow (D-Mich.), Jon Tester (D-Mont.), John Thune (R-S.D.), Tom Udall (D-N.M.), Elizabeth Warren (D-Mass.), Sheldon Whitehouse (D-R.I.), and Ron Wyden (D-Ore.).