Tuesday July 12 Ag News

NEBRASKA CROP PRODUCTION REPORT

Based on July 1 conditions, Nebraska's 2016 winter wheat crop is forecast at 60.0 million bushels, up 32 percent from last year’s crop, according to the USDA’s National Agricultural Statistics Service. Average yield is forecast at 50 bushels per acre, up 12 bushels from a year earlier. If realized this would be a new record yield.

Acreage to be harvested for grain is estimated at 1.20 million acres, down 10,000 acres from a year ago. This would be 94 percent of the planted acres, above last year’s 81 percent harvested.

Oats production is forecast at 2.60 million bushels, down 3 percent from 2015. Yield, at 65 bushels per acre, is forecast to be down 2 bushels per acre from a year ago. Acreage for harvest, at 40,000 acres, is unchanged from last year.



Iowa Crop Production Report

Oat production in Iowa is forecast at 3.45 million bushels, down 17 percent from the 4.16 million bushels produced in 2015 according to the latest USDA National Agricultural Statistics Service - Crop Production report. Iowa oat growers intend to harvest 53,000 acres for grain, down 4,000 acres from last year. The expected yield is 65 bushels per acre, down 8 bushels from 2015.

The forecasts in this report are based on July 1 conditions and do not reflect weather effects since that time. The next crop production forecasts, based on conditions as of August 1, will be released on August 12.



USDA:  Winter Wheat Production Up 8 Percent from June

Winter wheat production is forecast at 1.63 billion bushels, up 8 percent from the June 1 forecast and up 19 percent from 2015. Based on July 1 conditions, the United States yield is forecast at a record high 53.9 bushels per acre, up 3.4 bushels from last month and up 11.4 bushels from last year. The area expected to be harvested for grain or seed totals 30.2 million acres, unchanged from the Acreage report released on June 30, 2016 but down 6 percent from last year.

Hard Red Winter production, at 1.03 billion bushels, is up 10 percent from last month. Soft Red Winter, at 370 million bushels, is up 4 percent from the June forecast. White Winter, at 224 million bushels, is up 4 percent from last month. Of the White Winter production, 21.2 million bushels are Hard White and 202 million bushels are Soft White.

Durum wheat production is forecast at 82.8 million bushels, up less than 1 percent from 2015. The United States yield is forecast at 39.8 bushels per acre, down 3.7 bushels from last year. Expected area to be harvested for grain totals 2.08 million acres, unchanged from the Acreage report released on June 30, 2016 but up 10 percent from last year.

Other spring wheat production is forecast at 550 million bushels, down 8 percent from last year. Area harvested for grain is expected to total 11.8 million acres, unchanged from the Acreage report released on June 30, 2016 but down 9 percent from last year. The United States yield is forecast at 46.5 bushels per acre, up 0.2 bushel from the 2015 average yield. Of the total production, 511 million bushels are Hard Red Spring wheat, down 9 percent from last year.



Record Production Leads to Lower Prices for U.S. Corn

Increases to U.S. corn acres, both planted and harvested, led to higher production and thus lower price forecasts in the Department of Agriculture reports released today. Despite a 30-million-bushel overall increase in demand, corn price forecasts for the 2016/2017 crop year fell ten cents to $3.40 per bushel.

"While NCGA is pleased with increased demand from the export sector, it is evident that far greater gains must be made in generating additional demand from all sectors if we are to ensure the continued profitability of U.S. family farmers," said National Corn Growers Association President Chip Bowling, a farmer from Maryland.  "To grow these markets, farmers need the help of our federal legislators and regulators. Farmers need the EPA to step up and comply with its statutory obligations under the Renewable Fuel Standard. We need Congress to help us push export demand even further by opening new markets by passing the Trans-Pacific Partnership and lifting the Cuban Trade Embargo. We must work together to generate the demand America's rural communities and farm families need to thrive."

This report projected increased export forecasts by 100 million bushels to 2.05 billion bushels. If realized, this would be the first time U.S. corn exports have exceeded two billion bushels since 2007/2008. This increase, in large part, reflects decreased competition by Brazil, for which USDA reduced old crop export estimates by 157 million bushels. This increase was, in large part, offset by decreased demand in the ethanol and feed sectors. Overall demand forecasts were thus only raised by 30 million bushels.

Both the number of planted and harvested acres were changed in light of the information released in the acreage report last month. With an additional 500,000 acres planted and 700,000 acres to be harvested, production forecasts increased despite steady yield forecasts. If achieved, corn production would set a new record at 14.5 billion bushels. Notably, the ending stocks forecasts was increased by 73 million bushels.

The 2016/17 season-average corn price received by farmers fell and is now projected to be between $3.10 to $3.70 per bushel.



Soybean production up, so is demand

The world is hungry for soybeans and the U.S. is expected to have plenty to deliver, according to today’s U.S. Department of Agriculture World Agricultural Supply and Demand Estimates (WASDE) Report.

Iowa Soybean Association (ISA) industry experts say demand is robust, and the U.S. will likely be the supplier of choice as summer progresses.

National soybean production is estimated at 3.88 billion bushels, according to the report. That’s up 80 million bushels from last month. The government left yield estimates unchanged at 46.7 bushels per acre, but increased the harvested area by 1.6 million acres from the previous report to 83 million acres.

Soybean crush and exports were raised 10 million and 20 million bushels, respectively, to nearly 2 billion bushels each, according to the report. And it could go up even more.

“USDA has a history of underestimating the export numbers and is going to have to make up for that,” said Grant Kimberley, ISA market development director. “We’ve seen extraordinarily strong demand for U.S. soybeans and we expect it to continue. There are several international trade groups coming to Iowa this week as part of the National Governors Association meetings and they will want to talk about soybean supply.”

Soybean ending stocks for the current marketing year are projected at 350 million bushels, down 20 million from last month, according to the report. Ending stocks for the 2016/17 marketing year were increased by 30 million bushels to 290 million.

Kimberley expects soybean ending stocks to be lower than current projections. That’s based on an Iowa State University (ISU) report issued last year funded by the ISA.

The USDA has significantly overestimated monthly soybean ending stock projections, especially in the early and mid-part of the marketing year and typically failed to readjust figures in a timely manner, the ISU report said. The study finds the overall value of the state’s soybean crop has been reduced by at least 1 percent annually the past 18 years, costing farmers tens of millions of dollars a year.

According to the WASDE Report, the U.S. season-average soybean price for 2016/17 is projected at $8.75 to $10.25 per bushel, unchanged from last month. November soybeans on the Chicago Board of Trade closed 32 cents higher today at $10.87 per bushel.



Landlord - Tenant Cash Lease Workshops before September 1 Deadline

Area farmers and landlords have two opportunities to attend a Landlord - Tenant Cash Lease Workshop on Wednesday, July 27. Nebraska Extension will be offering programs at 1:30 p.m. at the Fire hall in Pender or at 6:30 p.m. at the First National Bank Northeast in Tekamah. These come at a critical time of year as September 1 is the deadline for landlords or tenants in a verbal lease to notify the other of intentions to change or renegotiate provisions of the current lease or to terminate the lease for the following crop year.

Arriving at a fair cash rental rate is difficult when land and commodity prices are stable. However, throw in volatility for either of these variables... or for production costs... and the challenge just got even greater. Rising crop prices lead many landowners to seek higher cash rents while falling crop prices lead tenants to seek lower cash rents. Cash rental rates are probably one of the most cussed and discussed topics in crop production.

This program will help landlords and tenants establish and maintain a positive farm leasing relationship and deal with the volatility of their cash rental rates. Landlords try to be loyal to their tenants, yet want a fair return for the land asset. Tenants want to stay in business, yet feel the pressure to bid to keep the land base that they have been farming.

It is very helpful if both the tenant and landlord can attend together. Topics for discussion include:

•    Trends in Farmland Values and Cash Rental Rates
•    Types of Leases
•    Flexible Cash Rental Arrangements
•    Good Landlord-Tenant Communications
•    Developing a Fair Lease
•    Modification to or Termination of Verbal and Written Leases
•    Importance of Leases for Government Programs
•    Other Topics: Pasture Rental, Grain Bin Rental, Farm Building Rental, Etc.

Putting together the right lease isn't about what’s being discussed at the coffee shop, or what a survey of cash lease rates says. It’s about what fits both the landlord and tenant for their circumstance and situation. Attending this presentation will provide a set of ideas to work from as those specifics are discussed.

The free workshop is sponsored by Nebraska Extension, the Nebraska Soybean Board, and the North Central Extension Risk Management Education Center.  Refreshments and handouts will be provided. Registration is requested by Friday, July 22.  To register for the session in Pender, contact the Nebraska Extension office in Thurston County at 402.385.6041. To register for the session in Tekamah, contact the Nebraska Extension office in Burt County at 402.374.2929.

The workshops have been held extensively across Nebraska for several years with over 3,300 attending. The vast majority of both landlords and tenants find the information to be very helpful in improving communications, setting rental terms, and learning about the use of flex lease provisions. As crop budgets tighten, it is more important than ever to attend and hear the latest discussion about leasing issues.

For more information, please contact John Wilson, Extension Educator, at 402.374.2929 or email at jwilson3@unl.edu.



Soy Growers Honor Kansas' Mike Pompeo as Soy Champion

The American Soybean Association (ASA) presented Congressman Mike Pompeo (R-Kan.) with the organization's Soy Champion Award, recognizing the lawmaker's outstanding public advocacy for soybean farmers. In a presentation before its board of directors Tuesday in Washington, ASA presented Rep. Pompeo with the biennial award, citing specifically his work in authoring legislation establishing a national framework for the labeling of foods containing biotechnology as a member of the House Energy and Commerce Committee.

"Through his exemplary representation of a very unique urban, suburban and rural district, Congressman Pompeo has been a great advocate for farmers in Kansas and across the country," said Charles Atkinson, a soybean producer and ASA Director from Great Bend, Kan. "His work on the Safe and Accurate Food Labeling Act has laid solid groundwork for success on one of our industry's most significant issues, and we are proud to honor him as a Soy Champion today."

ASA presented Rep. Pompeo with the award during the association's annual July board meeting and Legislative Forum, in which the ASA directors and representatives from 30 soybean-growing states gather in Washington to meet with lawmakers and raise the profile of public policy issues impacting soybean farmers.

"I am truly honored to receive the Soy Champion Award. The American Soybean Association has been a vital partner in efforts to ensure our farmers have the biotechnology tools required to feed a growing world," said Pompeo. "Thanks to the support and hard work of this organization and its many members, the American people will continue to have access to safe and affordable food."

ASA will meet with lawmakers and administration officials in Washington through Wednesday.



EIA Maintains Ethanol Output, Demand Estimates for 2016-17

In its latest Short-Term Energy Outlook released today, the U.S. Energy Information Administration maintained its outlook for ethanol production and demand for this year.

EIA reiterated ethanol production averaged almost 970,000 barrels per day (bpd) in 2015 and once again projected production for 2016 and 2017 at about 980,000 bpd.

The agency repeated that ethanol consumption in 2015 averaged about 910,000 bpd, while holding firm its forecast for 2016 and 2017 to about 930,000 bpd.

"This level of consumption results in the ethanol share of the total gasoline pool averaging 10% in both 2016 and 2017."

The U.S. Environmental Protection Agency on Nov. 30, 2015, finalized a rule setting Renewable Fuel Standard volumes for 2014 through 2016 and on May 18 released its proposed RFS volumes for 2017 along with finalized biomass-based diesel volumes for 2017.

The agency used both the final and proposed volumes to develop the current STEO forecast through 2017.

EIA continues to expect the largest effect of the proposed RFS targets will be on biomass-based diesel consumption, which includes both biodiesel and renewable diesel and helps to meet the RFS targets for use of biomass-based diesel, advanced biofuel, and total renewable fuel.

Biodiesel production averaged 82,000 bpd in 2015 and is forecast to average 99,000 bpd this year, 1,000 bpd lower than last month's estimate. In 2017, the estimate is 106,000 bpd, steady on the month. Net imports of biomass-based diesel are also expected to increase from 29,000 bpd in 2015 to 41,000 bpd in 2016 and 47,000 bpd in 2017, each unchanged from the prior month estimate.

EIA assumes 10,000 bpd of domestic renewable diesel consumption will be used to help meet the biomass-based diesel and advanced biofuels RFS targets in both 2016 and 2017.

The agency estimates that energy-related emissions of carbon dioxide decreased by 2.8% in 2015. Emissions are forecast to decrease by 1.6% in 2016 and then increase by 1.1% in 2017. These forecasts are sensitive to assumptions about weather and economic growth.



Ag Groups Express Concern Over Pending EU Legislation Affecting Agricultural Exports

Today, CropLife America, along with nearly 50 agricultural organizations and associations, sent a letter to U.S. Trade Representative Michael Froman regarding pending decisions concerning implementing legislation in the European Union (EU) governing crop protection products that could have significant consequences for U.S. agricultural exports. The letter expresses concern that the EU may implement legislation in a manner that is “scientifically questionable, unduly trade-restrictive and inconsistent with the EU’s commitments in the World Trade Organization (WTO).” The letter further asks Ambassador Froman “to reiterate [his] concerns in the coming weeks, and to put Commissioners on notice that [the U.S.] will hold them to their WTO obligations.”

As the letter states, “Regulation (EC) No. 1107/2009, which governs the registration of pesticides in the EU, establishes several hazard-based “cut-off” criteria that essentially exclude certain categories of products from consideration for normal authorization. For such products, the EU would not perform a risk assessment. Rather, it would declare them to be ineligible for authorization, or reauthorization, based on their intrinsic properties, without taking into account important risk factors such as level of exposure. It is likely that a number of widely used substances will not be re-approved due to these cut-off criteria when their current registration expires.”

The letter further explains that, if the legislation is implemented in this manner, “the EU would be ignoring its own risk assessments. For most of the substances at issue, the EU has already established MRLs (Maximum Residue Levels) at levels calculated to ensure consumer safety, based on risk assessments performed in recent years by the European Food Safety Authority. It would also be ignoring MRLs established by the Codex Alimentarius,” also known as the Food Code, developed by the United Nations Food and Agricultural Organization, and the World Health Organization.

“The potential effect of this implementation would not only hurt growers and consumers in the EU, but U.S. agricultural producers as well,” stated Jay Vroom, president and CEO of CLA. “From fruits and vegetables to nuts and processed foods, the sale of nearly all of our bulk commodities to the EU might no longer be permitted. We urge Ambassador Froman to address this concern and ensure that U.S. growers can still use the most advanced, most precise pesticide technologies available to them. Consumers around the world need access to affordable food; this legislation hinders growers from making that possible.”

Signatories of the letter also called on Ambassador Froman to express concern regarding draft documents released by the European Commission (EC) that would establish specific criteria for identifying so-called endocrine disruptors. The documents follow the hazard-only approach, with little to no consideration of exposure to any chemical. These EU documents ignore other endocrine policy programs and well-researched and verifiable data available from governmental peers worldwide, including from the U.S. Environmental Protection Agency’s (EPA) Endocrine Disruptor Screening Program which follows a risk- and exposure-based approach based on solid research.

With this pending implementation, and other regulations regarding crop protection chemicals in the EU, the EC has repeatedly taken a hazard-based approach, taking into account only the intrinsic properties of a chemical without consideration of potency, exposure, or benefits to society. CLA and its members continue to support a risk-based approach to the regulation of crop protection products around the world, and to oppose precautionary, hazard-based regulation of crop protection products.



Combine Sales Were Up in June

According to the Association of Equipment Manufacturer's monthly "Flash Report," the sale of all tractors in the U.S. in June 2016, were up .3% compared to the same month last year.

Two-wheel drive smaller tractors (under 40 HP) were up 3% from last year, while 40 & under 100 HP were up 3%. Sales of 2-wheel drive 100+ HP were down 22%, while 4-wheel drive tractors were down 34%.

For the six months in 2016, a total of 109,200 tractors were sold which compares to 105,189 sold thru June 2015 representing a 4% increase year to date.

Meanwhile, two-wheel drive smaller tractors (under 40 HP) are up 13% over last year, while 40 & under 100 HP are down 1%. Sales of 2-wheel drive 100+ HP are down 4%, while 4-wheel drive tractors are down 31%.

Combine sales were up 8% for the month. Sales of combines for the first six months totaled 1,784, a decrease of 23% over the same period in 2015.