Thursday October 27 Ag News

Ricketts, Ibach Tout Growing EU Beef Exports

Today, Governor Pete Ricketts and the Nebraska Department of Agriculture (NDA) announced that a recent trade mission led by state officials to the European Union led to agreements expanding markets for Nebraska beef.  Last week, a delegation led by NDA Director Greg Ibach met with leaders from a number of European companies and signed six letters of intent formalizing commitments to purchase and promote Nebraska beef.

“Growth in demand for Nebraska beef in Europe is helping grow our market share and grow Nebraska,” said Governor Pete Ricketts, “I am committed to supporting our beef industry by promoting the Nebraska beef brand all around the globe.  Missions like these continue to help Nebraska’s share of beef exports grow exponentially both in the EU and around the world.”  

Nebraska is the number one producer of beef in the nation, and the high-quality, great-tasting beef it produces continues to grow in popularity across the world.

“Signing these letters of intent is great news for Nebraska's farmers and ranchers,” said NDA Director Greg Ibach.  “Nebraska has long been a leader and innovator in beef production, raising some of the best cattle and beef in the world.  By promoting the Nebraska brand of excellence and quality we will continue to increase our exports of beef.  More exports mean more jobs and growth in the Nebraska economy.”

Representatives from import companies and restaurant chains doing business in England, Germany, Italy, Sweden and the Netherlands met with Ibach and others.  The delegation included: Chris Calkins, professor of Animal Science, University of Nebraska; Myron Danner, Nebraska Rancher and member of the Nebraska Beef Council; Jerry Wiggs, Greater Omaha Packing Company; and Stan Garbacz, Nebraska Department of Agriculture.

During the trip, the group promoted the attributes of the Nebraska beef production system.  They touted the grasslands, where families raise their herds to produce calves that will fill the feedlots across Nebraska and those cattle will consume locally-grown corn, distillers grains, and roughages.  The group went on to share that these finished cattle are processed in plants that pay special attention to consumer expectations and food safety.  This unique system allows Nebraska’s farm families to feed families around the world.

In 2005, when NDA started promoting Nebraska beef in partnership with the Nebraska Beef Council, the United States exported $36.3 million of beef to Europe.  Nebraska’s share was $1.8 million or 5 percent.  Ten years later in 2015, when the U.S. exported $315.4 million to Europe, Nebraska’s share of the market had grown to 45.2 percent or $142.7 million.  In the first 6 months of 2016, Nebraska has continued to grow our market share exporting 50 percent of the U.S. total. 

The following is a summary of the delegations activities during the trip:

London, England - Met with Goodman Restaurants to sign a letter of intent for the group to increase purchases of Nebraska beef.  A new customer, Roar Global, signed a letter of intent to purchase and promote Nebraska beef.  This decision follows a visit to Nebraska this summer where they saw firsthand, the innovative system Nebraska families and businesses have created to produce high quality beef.

Düsseldorf, Germany - Albers GmbH Foods pledged to continue to promote and expand their sales of Nebraska beef.  While in Germany, the Albers family hosted a promotional event to hear presentations from Chris Calkins and Myron Danner where 70 current and potential new customers learned how to utilize lower-priced wholesale cuts in the chuck to create value-added consumer cuts.

Paris, France - The Nebraska delegation attended the SIAL Food Show where they met with numerous current and potential customers, including a potential importer for the China market when it opens.  While there, Gunnar Dafgärd AB of Sweden, and Meta Foods with European operations based in the Netherlands, signed letters of intent aimed at growing the Nebraska beef footprint.

Valencia, Spain - The delegation presented at a workshop to share the Nebraska beef story with 50 potential customers of the INALCA company in Spain.  INALCA, an Italian importer, has been a long-term buyer of Nebraska beef and is working aggressively in the Spanish market to expand its sales.  INALCA pledged to work with Nebraska to accomplish this goal.



USDA Invests Nearly $1.4 Million for 17 Nebraska Value-Added Projects

USDA Rural Development Nebraska State Director Maxine Moul announces that USDA is investing in 17 projects throughout Nebraska providing nearly $1.4 million through the Value-Added Producer Grant (VAPG) program.

"Investing in value-added projects helps agricultural producers with the processing and/or marketing of bio-based value-added products.  Generating new products, creating and expanding marketing opportunities, and increasing producer income are the goals of this program,” said Moul.  “The value-added program facilitates keeping products local which impacts Nebraska’s economy.”

Nebraska Value-Added Recipients include:
BUTLER COUNTY - Wendy McKenzie - $40,579 - To support the processing and marketing of goat cheese.

LANCASTER COUNTY - Lakehouse Farm, LLC - $75,000 - To provide a strategic plan to increase regional networking of producers, end-users and consumers, and create a joint steering committee which will be tasked with exploring the development of a Regional Food Hub.

LANCASTER COUNTY - Robinette Farms, LLC - $24,834 - To process, expand the market area and distribute micro-greens, eggs from pastured hens and pastured boiler chickens.

PLATTE COUNTY - Annette Hellbusch - $32,000 - To market and distribute vegetables and help cover rental expense for an indoor farmers' market.

SARPY COUNTY - Volcanic Peppers, LLC - $49,996 - To assist in the processing and marketing of hot pepper sauces.

SAUNDERS COUNTY - Heartland Nuts N’ More - $49,999 - To implement a marketing plan to provide a central market for member producers to sell their high-quality nut oil from cultivar tree nuts.

WAYNE COUNTY - Eltee Mangalitsa’s, LLC - $49,950 - To process and market Magalitsa pork.

VAPG grants can be used to develop new product lines from raw agricultural products or promote additional uses for established products. Veterans, socially-disadvantaged groups, beginning farmers and ranchers, operators of small- and medium-sized family farms and ranches, and farmer and rancher cooperatives are given special priority.



Conservation Reserve Program - Transition Incentives Program

The Center for Rural Affairs is seeking participants in the Conservation Reserve Program - Transition Incentives Program (CRP-TIP) to learn more about how CRP-TIP is being implemented. Landowners in Iowa, Nebraska, North Dakota or South Dakota who have participated in CRP-TIP are encouraged to contact the Center to talk about their experiences with the program.

“One of the major barriers to getting started in farming is access to land,” commented Anna Johnson with the Center for Rural Affairs. “And we know we can learn a lot from both beginning farmers and ranchers as well as landowners who have utilized the CRP-TIP program. That’s why it is vitally important that we talk with people that have put this program to work, on the ground.”

According to Johnson, the CRP-TIP program provides a valuable opportunity both for beginning and socially disadvantaged farmers to get started in agriculture and for conservation practices to be implemented on more acres. CRP provides payments to landowners for taking environmentally sensitive land out of production for a period of time. It is administered by the United States Department of Agriculture, Farm Service Agency. CRP-TIP is a relatively new part of the program. Landowners with expiring CRP contracts are eligible for two additional years of payments if they sell or rent their land to a beginning or socially disadvantaged farmer or rancher. That farmer or rancher then has to use sustainable farming or grazing practices on the land.

“The CRP-TIP program was created through the 2008 Farm Bill,” continued Johnson. “With the next farm bill debate beginning in earnest next year, we believe it is more important than ever to hear from farmers, ranchers and landowners about how this program works and how we could make it work even better.”

Producers can contact Glen Ready with the Center for Rural Affairs at glenr@cfra.org or (402) 687-2103 ext. 1011.

The Center for Rural Affairs, Dakota Rural Action, and the National Sustainable Agriculture Coalition, in cooperation with the USDA Farm Service Agency have embarked on this project to learn more about the impact of CRP-TIP and look for ways to improve the implementation of the program.



NCGA Promotes NASS Survey Completion; It Is Important to Farmers

National Corn Growers Association's Risk Management Action Team Chair Steve Ebke, who farms in Daykin, Neb.,  discusses the importance of responding to surveys distributed by the U.S. Department of Agriculture's National Statistics Service. Responses to recent surveys from USDA have reached historical lows, and this can impact farmers' bottom lines.

"There seem to be county-to-county differences that are unaccounted for and, when you look at it, some counties did not have enough information from responses to the National Agricultural Statistics Service for them to publish data. Farm Service Agency uses that data to calculate ARC payments. So, if NASS does not have the data, they will have to look elsewhere for it.

"This has resulted in a great deal of concern in the countryside. What we are doing at this time is urging everyone to complete their NASS surveys so that each county has a sufficient amount of data for FSA to calculate the payments based upon what actually happened in that county."

Ebke says a lack of data has led to discontent regarding Agriculture Risk Coverage program payments for 2014 and 2015.

"In fact, I just received my county agricultural production survey in the mail for 2016 the other day. You can either do it manually with the booklet that you receive and mail that back in, or you can complete it online. Most of the information in that survey is information farmers have readily available.

"One thing that we want to emphasize is that your data is confidential. Your individual data is confidential and never individually presented somewhere. Your data is aggregated and only presented in that format. The confidentiality of your individual data submitted on the NASS survey is protected by federal law."

Failing to complete the survey, according to Ebke, puts your farm at risk for receiving ARC payments that do not reflect actual production in your county.

"I just want to urge everyone to go ahead and complete this as it is very important to your bottom line. We have additional information on our website and even a direct link to USDA's site, where you can complete your survey."



Iowa Cattle Industry Leadership Summit
December 10, 2016
Hansen Ag Student Learning Center - Ames, IA
2508 Mortensen Road, Ames, IA 50011

(Don't miss out on the Cattlemen's Night Out Political Action Committee Fundraiser on Friday, December 9, 2016)
 
Saturday, December 10, 2016 - Iowa Cattle Industry Leadership Summit
Attendees will have the opportunity to enhance their leadership and communication skills, shape the priorities of the Iowa Cattlemen’s Association through the policy development process, network and much more at this first annual, FREE event.

Registration is FREE! Download a registration form or register online by November 29 to guarantee a meal.

The day will feature:

Iowa’s Best Burger-Enjoy Iowa’s 2016 Best Burger, from the Chuckwagon Restaurant in Adair, for the noon meal.

State of the Industry Panel-What are the current realities of the cattle industry? How will successful cattle producers navigate these challenges and continue to build their business? Hear insights and advice from thought leaders in the cattle industry.

Communication for Connection and Cooperation (Not Compliance or Control) - Alan Feirer, Group Dynamic

Learn how to give feedback and assign tasks in ways that build relationships, improve staff retention and engagement. In this session, we will identify and overcome three common obstacles to effective communication. Chief among these is the words we use and how we say them, so we will spend a lot of time on words to use, words to avoid, and ways to give better feedback.

This session will be interactive, fun, and practical. The methods learned can be utilized right away.

Beef Up your County Board- Join us and other successful county leaders in sharing what practices develop a board that operates like a well-oiled machine. Advice on conducting effective board meetings and dealing with conflict are a few topics seasoned leaders will be prepared to share. Additionally, we will identify different ways to get involved in the community and how those type of events can increase community awareness for your organization. Continue to sharpen the saw by learning from your peers and join us for a great discussion!

Tools in your Iowa Beef Industry Headquarters Toolbox-How can the organizations at the Iowa Beef Industry Headquarters support your local county cattlemen? Find out what services and opportunities are available, and hear from local leaders who have effectively worked with us to enhance opportunities in their county.

Social Media that Sticks - Shannon Latham, Latham Hi-Tech Seeds - Tips and guidelines to for using social media to successfully promote your county organization, build awareness of your own cattle business, or clear up misconceptions with consumers.
 
Policy and Governance
Cattle Production Policy Meeting: The Cattle Production Committee focuses on areas of cattle health and well-being, live cattle marketing, and science and technology.

Business Issues Policy Meeting: The Business Issues Committee focuses on areas of agriculture policy, public/private lands and environmental management, and tax and finance.

Beef Product Policy Meeting: The Beef Product Committee focuses on areas of beef safety, global consumer marketing, and nutrition, health and information.

ICA Annual Meeting: Be a part of the ICA policy development process. ICA's Policy Committees will present recommendations for all members to vote on. Resolutions approved by a majority vote of the members in attendance become the official policy of the association.

Iowa Beef Industry Council Annual Meeting: Learn how the Iowa Beef Industry Council, funded by the $1-per-head beef checkoff, is invested in beef promotion, consumer information, research, industry information and foreign market development to increase beef demand. The meeting will include an election of executive committee members.
 
Awards and Recognition
2016 Young Cattlemen’s Leadership Class Recognition
Commercial Producer of the Year
Seedstock Producer of the Year
Hall of Fame
Environmental Stewardship Award Program
Foundation Heifer Award
Ralgro Wheel Presentation
Beef Quality Assurance
President’s Council
County Membership Awards

Registration is FREE! Download a registration form or register online by November 29 to guarantee a meal.  More info and registration at www.iacattlemen.org. 



Iowa Pork Industry Center to Offer PQA Plus 3.0 Advisor Certification Session

To help meet industry need, Iowa Pork Industry Center at Iowa State University has added one more Pork Quality Assurance Plus 3.0 advisor certification session on Wednesday, Dec. 14. With the introduction of this new program by National Pork Board earlier this year all PQA Plus advisor certifications done under the former 2.0 program expired Aug. 31. Attendance at an all-day session and passage of an exam at the end of the session is now necessary for recertification.

Iowa State University extension swine veterinarian Chris Rademacher said those who want to become certified for the first time are welcome to submit applications for this session. The Iowa Board of Veterinary Medicine has approved seven hours of CE credit for the session.

“All previous PQA Plus advisor certifications expired on August 31 regardless of when the advisor most recently certified through the 2.0 program,” Rademacher said. “This also means everyone needs to complete the two-page application form and be approved to attend this session.”

Rademacher is coordinating this training session, which will be held at the Hansen Ag Student Learning Center on the Iowa State campus in Ames. There is a 15-person minimum with the application deadline of Dec. 1 or whenever the 30-person maximum is reached. No walk-ins are allowed and no individual spot is guaranteed until the application is approved and specific payment is accepted by IPIC. The cost is $75 per person and includes refreshments and the noon meal. Registration begins at 8:30 a.m. with the session starting at 9 a.m.

“Those who wish to attend need to submit their application soon to ensure receipt in time for approval and payment,” Rademacher said. “The form is available as a fillable pdf document and as a word document. People can choose the format that best suits their needs.”

Those who qualify and are interested in the program should download the application form from the IPIC website, then complete and submit it soon.



Poultry Slaughter Production Narrows Gap on Red Meat Production

Total federally inspected red meat and poultry production in 2015 was 94.3 billion pounds, a record high. Federally inspected poultry slaughter production also reached a record high in 2015 at 46.3 billion pounds. Since 1990, poultry slaughter production has almost doubled.  In 1990, federally inspected red meat production was about 60 percent higher than poultry production. The gap between poultry and red meat has steadily decreased and red meat is currently only 4 percent higher than poultry. In terms of gross domestic product, the red meat and poultry slaughter industry is the largest segment of United States agriculture. Red meat and poultry products from slaughter also contribute to agriculture's positive trade balance. In 2015, beef and veal exports totaled over $5.15 billion, pork exports totaled over $4.01 billion and chicken exports totaled over $2.79 billion.

The Overview of the United States Slaughter Industry report provides an official review of changes in the United States slaughter industry over the past 25 years. Additionally, this report gives a brief overview of survey and estimation procedures as well as terminology used in the National Agriculture Statistics Service's (NASS) slaughter publications. The 2016 Overview of the United States Slaughter Industry report will highlight data from NASS' annual Livestock Slaughter report and annual Poultry Slaughter report.

Commercial Pork Production Reaches Record High in 2015
Total commercial red meat production was 48.4 billion pounds in 2015, up 2 percent from 2014. Commercial red meat production reached a record high in 2008 at 50.2 billion pounds. In the past 25 years, commercial red meat production has increased 25 percent. Most of the increase is due to a rise in pork production.

Commercial beef production during 2015 was 23.7 billion pounds, down 2 percent from 2014. Over the past 25 years, beef production has held relatively steady, ranging from a low of 22.6 billion pounds in 1990 to a high of 27.1 billion pounds in 2002.

Commercial veal production was a record low in 2015 at 82.5 million pounds, 12 percent below 2014. This was the seventh year in a row that veal production was a record low.

Commercial pork production during 2015 was a record high at 24.5 billion pounds, 7 percent above the 22.8 billion pounds produced in 2014. Pork production also surpassed beef production as the majority of red meat production for the first time in 2015. Since 1990, pork production has increased 60 percent.

Commercial lamb and mutton production was 150.6 million pounds in 2015, 3 percent below 2014 and the second lowest production on record. Lamb and mutton production has been on a steady decline the past 25 years and reached a record low in 2011 at 148.7 million pounds.

The percent of commercial red meat production by state over the past 25 years been relatively unchanged. In 1990, the top 10 states were Iowa, Nebraska, Kansas, Texas, Illinois, Minnesota, Colorado, South Dakota, California, and Michigan. In 2015, the top 10 states were Nebraska, Iowa, Kansas, Texas, Illinois, Minnesota, North Carolina, Colorado, Missouri, and Indiana. These states had 75 percent of the commercial red meat production in 1990 and 78 percent of the commercial red meat production in 2015.



NBB Sends Letter to Congress Urging Action on Biodiesel Tax Incentive

The National Biodiesel Board sent a letter to House and Senate tax committee leaders urging extension of the biodiesel tax incentive before it expires on December 31st. The letter was sent on behalf of U.S. biodiesel producers nationwide.

“We strongly urge you to extend the biodiesel tax credit and take this opportunity to make a simple, common-sense reform by focusing the credit on U.S. production,” said Donnell Rehagen, Interim NBB CEO in the letter. “Legislation pending before Congress – S. 3188 and H.R. 5240 – would accomplish these objectives by extending the incentive through 2019 and changing it from a blender’s credit to a domestic producer’s credit. The legislation has strong support from American biodiesel producers and strong bipartisan support in both the House and Senate – reflected last year when a similar proposal passed the Senate Finance Committee.”

The growth of the U.S. biodiesel industry in recent years is paying tremendous dividends in reducing emissions, strengthening our energy security, generating competition in the diesel sector and creating jobs and economic activity in every state in the nation. The biodiesel industry supports nearly 48,000 jobs and $1.9 billion in wages across the country.

“Many biodiesel producers who are now poised to expand and hire would likely cut jobs and production. Congress can avoid this with a long-term extension giving producers the policy stability they need to plan for the future.”

U.S. biodiesel producers have more than 1.5 billion gallons of unused production capacity that stands ready to be utilized under the right policy framework. Mobilizing that capacity would create thousands of jobs and billions of dollars in economic activity. Additionally, reforming the incentive would save the Treasury some $90 million as imports are reduced and domestic production rises, according to the Joint Committee on Taxation.

Under the current “blender’s” structure of the incentive, foreign biodiesel imported to the U.S. and blended with petroleum diesel in the U.S. is eligible for the tax incentive. Increasingly, foreign biodiesel producers are taking advantage of the U.S. incentive by shipping their product here. In 2015 alone, some 670 million gallons of biodiesel and renewable diesel was imported to the U.S., making up nearly a third of the U.S. market.



R-CALF Presents Cattle Industry Priorities for New Congress

In a prepared statement presented during the 2018 Farm Bill listening session sponsored by Senator Jon Tester (D-Mont.), R-CALF USA said the need for major changes is urgent if Congress wants to prevent the U.S. cattle industry from going the way of the packer-controlled poultry, hog and sheep industries.

"Our industry is fast becoming chickenized, meaning dominant packers are eliminating competition in the fed cattle market and substituting it with corporate ownership or control," said R-CALF USA CEO Bill Bullard. This process is also known as vertical integration, in which dominant packers acquire complete control over the supply chains within their respective industries.

Bullard described the U.S. cattle industry as an industry where 4 of every 10 ranchers in business 30 years ago are gone today, where cattle supplies have shrunk to 70-year lows, where domestic production has shrunk to a 20-year low, and where the cattle cycle, which historically provides several years of strong prices, is now dysfunctional. He said cattle prices have been falling farther and faster than any time in history despite historically low supplies and strong beef demand.

"These are not indicators of progress. These are indicators of an industry in decline."

He said incremental changes will not reverse the declining cattle industry because the dominant packers are simply too powerful and too sophisticated to let one or two new hurdles stop them from continuing to capture the live cattle supply chain away from independent producers.

"We must act aggressively to reverse our industry's decline before the packers dismantle or destroy the competitive processes and marketing channels within our industry. When those are gone, we will no longer be able to bring our industry back," he said.

The group's urgent priorities include:

- Reinstate mandatory country of origin labeling (COOL) to provide independent producers the tool they need to compete in their domestic market and abroad.

- Support the so-called GIPSA rules so the overarching rules of competition envisioned in the Packers and Stockyards Act (PSA) can be enforced; and then amend the PSA to disallow packers from circumventing those rules of competition by claiming to have a business justification for violating the PSA. Bullard said these changes will empower producers to self-monitor and self-enforce the rules of competition without having to wait for the government to act.

- Remove from the packers' toolbox the tools they use to manipulate prices. This includes banning packer ownership of cattle; banning un-priced cattle procurement contracts (such as formula contracts); and prohibiting packers from shorting or otherwise speculating in the cattle futures market for the purpose of lowering prices.

- Remove the Agriculture Secretary's discretion to allow fresh meat from countries where foot-and-mouth disease (FMD) exists. This includes amending the Animal Health Protection Act to prohibit the importation of fresh meat from Brazil or any other country that is not free of FMD without vaccination.

- Provide producers with real-time and more accurate market information. This includes amending the Livestock Mandatory Reporting Act to address the numerous new cattle procurement practices the group says that dominant packers use to circumvent reporting requirements. The group identifies five new practices that it says causes reporting inaccuracies.

- Restore the integrity of the national beef checkoff program by prohibiting any lobbying group from contracting for checkoff dollars and making the checkoff program voluntary.

- Reinstate a Livestock Title in the Farm Bill to include all livestock-related provisions.



Youth grain handling safety resources more important than ever

The recent death of a 16-year-old South Dakota boy in a grain bin incident is a grim reminder of the hazards of grain handling.

“Tragedies like this motivate safety people to work even harder,” said Marsha Salzwedel, M.S., Agricultural Youth Safety Specialist with the National Children’s Center for Rural and Agricultural Health and Safety, part of Marshfield Clinic Research Foundation, Marshfield, Wis.

On the same day that Salzwedel presented a grain handling safety talk in Indianapolis during the National FFA Convention, Taylor Watzel, an FFA student from Winner, S.D., became trapped in a grain bin. He died from his injuries the next day, Oct. 19.

“If we can get people to use these resources, we can prevent incidents like the one with Taylor from happening in the future,” Salzwedel added.The resources highlighted in her talk are available at https://www.marshfieldresearch.org/nccrahs/grainsafety.

Salzwedel shared information about youth agricultural work guidelines, as well as the curriculum she developed with the Grain Handling Safety Coalition, during a general session of the National Association of Supervisors of Agricultural Education, held in conjunction with the FFA Convention.

“The work guidelines can be used in supervised agricultural experiences or by anyone supervising young workers to determine if a youth is able to perform a job safely,” Salzwedel said. “When working with grain, adding the curriculum enhances youth safety. We want to educate youth about flowing grain hazards, but we also want the adults supervising the youth to make sure the young people are doing age appropriate work.”



CarbonTV Debuts Season 2 of Hit Farming Series American Harvest

Season two of the popular agriculture docu-series "American Harvest," presented by Chevy Trucks, debuts exclusively on CarbonTV. The new season focuses on the next generation as they battle the odds to pursue careers in the rapidly evolving agriculture industry. "American Harvest: Next Generation" is available on-demand for free on www.carbontv.com and related CarbonTV OTT apps.

"American Harvest" Season 1 introduced the Johnsons, a multi-generational family of farmers in Central Minnesota. In Season 2, the series follows Leah Johnson as she manages a full-time job at Red River Marketing while also helping her father and brother run the family farm. Josh Fiedler and his wife Liz, who grew up raising cattle, prepare to re-enter their old lives with a risky move back to the family farm. Chad Olsen, owner and operator of one of Olsen Custom Farms, enters into another year of custom harvesting along the route from Texas to Canada. With a fleet of more than 80 combines, Chad's business is a feat of organization and problem solving. They must all find a way to make a living in an agriculture industry that is far different than the one in which their parents grew up.

"Viewers loved Season 1 for its authentic portrayal of the high-stakes American farming industry," says Daniel Seliger, EVP of Content and Marketing at CarbonTV. "Season 2 continues the story with a focus on the passion and commitment of the next generation."

Watch "American Harvest: Next Generation" now: http://www.carbontv.com/shows/american-harvest.



Growing Demand For Feed Wheat May Ease Storage Crunch At U.S. Elevators

Grain handlers are anticipating an uptick in orders for feed wheat, which should allow them to move excess wheat inventories as farmers bring in a record fall harvest, according to a new report from CoBank.

“While all grain prices have fallen to low levels in the face of this year’s record-large harvests, wheat prices have fallen the most,” says Tanner Ehmke, CoBank senior economist and co-author of the report. “As a result wheat is destined to become a staple in livestock’s feed rations for at least the next year or two and will remain competitive with other feed grains for the foreseeable future, barring a major weather event.”

Current USDA forecasts indicate that wheat feeding and residual use will climb to 260 million bushels in 2016, up from 152 million bushels last year. With cash wheat prices on the plains continually finding new lows—some local areas are posting the lowest prices in decades—USDA’s feed-wheat estimate could likely see upward revisions given wheat’s high stocks-use ratio, according to the CoBank report.

In some areas hard red wheat has traded more than 40 cents below the price of corn. In other areas soft red wheat has a 30-cent premium to corn, as prices drop with the arrival of the new crop. The shortfall in South American corn production has boosted U.S. corn exports, supported corn prices and widened the wheat-corn price spread. Further, an abundance of lower-priced old-crop corn—which could be discounted due to new-crop supplies—adds more pressure to grain prices.

In contrast a shorter supply of other feed grains, such as oats, barley and sorghum, will likely add to the attractiveness of corn and wheat in animal diets.

“A key question becomes whether farmers will be willing to sell wheat stocks as several market factors are incentivizing crop retention and storage,” notes Ehmke. “Still, the need to make room for the large fall harvest could ultimately motivate sales.”

Storage and price matters aside several other factors come into play as livestock producers incorporate wheat into rations. One such factor is that wheat has less energy than corn, therefore requiring livestock producers who add more wheat to rations, to have to add other grains with a higher energy content to compensate. However, wheat also contains more protein than corn, meaning livestock farmers must also consider the cost savings from reducing the amount of competing protein sources like soybean meal.

The substitution rate of wheat in place of corn is dependent upon the method of grain processing used prior to feeding.

“These factors, along with on-farm logistics and other animal health considerations, mean livestock producers will need to work closely with their nutritionist, veterinarian and other key advisors,” says Trevor Amen, the other co-author of the report and an economist and livestock specialist at CoBank. “These relationships will be crucial as producers consider ration ingredient changes and how to best incorporate them.”

Regardless of the individual decisions that each livestock operator must make based on local markets, they all stand to reap huge rewards with an abundant feed supply that is likely to grow into 2016-17 with a potentially record fall harvest. In the meantime, grain handlers that still hold substantial wheat inventories are being offered an opportunity to create much needed space by sending more wheat into the feed mix.



IGC Revises Grain Production Forecast

The International Grains Council Thursday raised its forecast for global grains production in the 2016 to 2017 marketing year, for the sixth time in seven months.

Production will hit a record 2.077 billion metric tons, ahead of the 2.069 billion tons forecast last month, the IGC said. The previous record, for 2014 to 2015, stands at 2.048 billion tons.

"This month's upward adjustments for [corn] include for the U.S., Argentina and India, while larger numbers for wheat are mostly in the Black Sea region," the London-based IGC said.

It raised its forecast for corn production by eight million tons to 1.035 billion tons, for wheat by one million tons to 748 million tons, for soybeans by three million tons to 332 million tons and for rice by two million tons to 484 million tons.

The upward revision in the production forecast exceeded a five million ton hike in the IGC's global grains consumption forecast to 2.054 billion tons.

"A rise in feed demand accounts for about half of the projected 72 million [year-over-year] gain in grains consumption," the IGC said.

As a result, the IGC expects year-end stocks to climb from 2016's 475 million tons to 498 million tons next year, not the previously expected 492 million tons.

The IGC said efforts by Chinese policymakers to encourage consumption of domestic grains instead of imports will contribute to a slight decrease in global trade volumes, which are expected to decline from 344 million tons last year to 337 million tons in 2016 to 2017.