Wednesday November 23 Ag News

Lower Elkhorn NRD appoints 2 new board members

The Lower Elkhorn Natural Resources District (LENRD) has seen a lot of change this year on their board of directors.

At their November meeting, the LENRD Board of Directors appointed two new members.  David Kathol and Jill Barr, both of Norfolk, took the oath of office and joined the other members around the table.

In the November election, David Kathol of rural Norfolk, was elected in Subdistrict 4 to replace Tim Tighe of Humphrey, who did not seek re-election.  The appointment was possible due to Tighe’s early departure from the board last month, resigning just before the end of his term because he had recently relocated outside of the Subdistrict.  Kathol was appointed at the November board meeting to fill the remainder of Tighe’s term, and will begin to serve his elected term in January.

Kathol worked for NPPD for 40 years.  He is now retired and has some time to commit to being a board member.  When applying for the position, Kathol said, “We all need to know the facts about the water under our feet; how geologically it is stored, moves, replenished, and what happens to make wells go dry.”  He added, “We all need to be educated about water law.”

Jill Barr was appointed to Subdistrict 2 to replace Luke Winkelbauer of Norfolk.  Luke recently resigned from the board due to his previous commitments and the time requirements to serve on the board.  Barr has been appointed to fill the remainder of the two-year term.

Barr is a pharmacist at Hy-Vee West in Norfolk.  In her cover letter, she said, “As the granddaughter of one of the founding fathers of Nucor, I understand the importance of resources and how they play a role in the economics of Nebraska.  Industry, agriculture, and municipalities all rely on the water to survive.  All of us rely on it to drink, bathe, and live.  I look forward to being a part of the conversation on how to keep resources sustainable for current and future generations.”

In other action, a public hearing was held for a proposed Chemigation rule change.  The proposed amendment would allow the chemical injection line check valve to be removed during the off-season.  LENRD Water Resources Technician, Josh Schnitzler, said, “By allowing producers to remove the check valve when they are not chemigating, it should prolong the life of the check valve, as the plastic check valves tend to deteriorate quickly when left out year-round.  It should also give producers a chance to inspect the check valve for any defects or animal damage that may have occurred.”  The board subsequently approved the proposed amendment to the LENRD rules for Chemigation and will forward the approved rule and all other necessary documentation to the Director of the Nebraska Department of Environmental Quality (NDEQ) for their consideration and approval.  The change would become effective soon after approval of the change from NDEQ.

In other business, the board approved 15 Community Forestry Incentive applications and one Forestry Incentive for Public Facilities application, for a total cost of $39,929.50.

The members also approved the staff recommendations for Conservation Cost-share and Lands for Conservation programs and authorized $500,000 for the 2017 construction season.

A request came from the Norfolk Area Visitors’ Bureau for assistance in providing bike racks on Norfolk trails.  A cost-share program was proposed, and the board voted to fund 50% of the cost of the bike racks to be placed around Norfolk, up to $5,000, with the other 50% to be funded by businesses or other entities.

Each year, the LENRD must determine the maximum number of new groundwater irrigated acres to be allowed for the following year.  The board voted to allow 0 acres of new groundwater irrigation development district-wide under the district’s standard variance process for 2017.  Under the district’s expedited variance process, they voted to allow no transfer of irrigated acres district-wide, but to allow approval of applications of 10 acres or less, if the addition of the requested acres will allow the applicant’s center pivot irrigation system to finish its circle.  They also voted to allow for the approval of qualified good cause variances and to approve a total of no more than 250 new irrigated acres in the hydrologically connected area and no more than 250 irrigated acres in the non-hydrologically connected area for expedited variance applications located outside of the district’s quantity subareas for 2017.  In addition, the board directed the staff to allow for the approval of supplemental wells, only in situations where the certified irrigated acres have been severed from the source of groundwater.  LENRD Water Resources Manager, Brian Bruckner, said, “In summary, this policy is identical to the allowable development that had been in place in the LENRD for 2016.  District staff members are continuing to develop the framework for further expansion of irrigated acres in defined areas within the district by 2018.”

Bids were received and reviewed to select contractors to perform flow meter maintenance and installation inspections for the district.  The board approved 2 proposals, and authorized the general manager to enter into contracts with the firms.  They approved the proposal from Buchanan Well, Inc. of Osmond, for the northern area of the district to perform the maintenance on an estimated 443 flow meters at $46 per site for a total of $20,378.00.  The other proposal approved was with Derek Becker and Austin Becker of Norfolk, for the southern area of the district at $50 per unit for an estimated 434 flow meters for a total of $21,700.00.

The LENRD officially shared their new logo with the public this week.  It brings together their mission of conserving and protecting water, soil, and trees.  Check it out on their website and social media.

The next board meeting will be held on Thursday, December 15th at 7:30 p.m.



Upper Big Blue NRD is Hosting the 13th Annual CROP-TIP Field Day to Help Farmers Gain an Advantage—Increase Bottom Line

Cornerstone Bank and the Upper Big Blue Natural Resources District will be sponsoring the “13th Annual CROP-TIP Field Day” on December 14, 2016, from 9:30 a.m. to 2:30 p.m. at the Holthus Convention Center (York).  The public is invited to attend this free event.

The following speakers are featured and will cover these topics:
  - Keith Berns, Producer/Researcher (Bladen, NE): “Cover Crops:  What’s the Big Deal?”
  - Michelle Rook, Farm Director-WNAX Radio (Yankton, SD): “Commodity Prices:  Review 2016-Preview 2017.”
  - Dr. Al Dutcher, State of Nebraska Climatologist (Lincoln, NE): “Nebraska’s Weather Forecast:  What’s Ahead in 2017.”
  - Dan Leininger, Upper Big Blue NRD (York, NE):  “CROP-TIP Update.”

The “Cornerstone Resources Observation Plot—Test Irrigation Project” (CROP-TIP) was an idea formulated in January 2004 by Cornerstone Bank and the Upper Big Blue NRD.  Similar to an outdoor classroom, the farm is used as a demonstration plot for producers and youth throughout the area.  We will share the harvest data and future plans for CROP-TIP this year.

We are providing a free meal, so please RSVP by December 9th by calling Carleen at the Upper Big Blue NRD at (402) 362-6601.



Saunders Co Soybean Growers Bus Tour
Keith Glewen, NE Extension Educator

The following link http://ardc.unl.edu/2016SaunderCoBusTour%20-%20SOYBEAN%20GROWERS.pdf  provides information on the Saunders County Soybean Growers Organizations Bus Tour scheduled for Tuesday, November 29th. We still have a few empty seats on the bus. Member or non-member, if you are interested in joining us give me a call on my cell, (number listed below) any time prior to departure. The Saunders County Extension Office is closed Thursday and Friday so calling me any time prior to Tuesday’s departure is o.k. But do not assume there will be room on the bus, so please call….… 402-624-8005 – Office........... 402-450-1463 – cell.   Thanks!



USDA October 2016 Livestock Slaughter

Commercial red meat production for the United States totaled 4.43 billion pounds in October, up 3 percent from the 4.31 billion pounds produced in October 2015.

Beef production, at 2.21 billion pounds, was 4 percent above the previous year. Cattle slaughter totaled 2.64 million head, up 5 percent from October 2015. The average live weight was down 9 pounds from the previous year, at 1,381 pounds.

Veal production totaled 6.6 million pounds, 8 percent below October a year ago. Calf slaughter totaled 48,300 head, up 20 percent from October 2015. The average live weight was down 67 pounds from last year, at 237 pounds.

Pork production totaled 2.20 billion pounds, up 1 percent from the previous year. Hog slaughter totaled 10.4 million head, up 2 percent from October 2015. The average live weight was down 1 pound from the previous year, at 282 pounds.

Lamb and mutton production, at 11.7 million pounds, was down 2 percent from October 2015. Sheep slaughter totaled 181,600 head, 2 percent below last year. The average live weight was 128 pounds, unchanged from October a year ago.

By State  (million pounds, % of Oct '15)
Nebraska ...:         710.4            103      
Iowa ..........:         645.9            108      
Kansas .......:         473.8            105      

January to October 2016 commercial red meat production was 41.5 billion pounds, up 3 percent from 2015. Accumulated beef production was up 5 percent from last year, veal was down 8 percent, pork was up 1 percent from last year, and lamb and mutton production was down 1 percent.



American Soybean Association Welcomes Ruling in Federal Seed Protection Case

Following a ruling from the U.S. District Court for the Northern District of California in the case of Anderson v. EPA this week, the American Soybean Association (ASA) welcomed a significantly positive development in the ongoing fight to protect farmers’ rights to use proven-safe seed treatments. In the court, the ruling sided with EPA and an industry coalition of intervenors including ASA, CropLife America, American Seed Trade Association, Agricultural Retailers Association, National Cotton Council of America, National Association of Wheat Growers and National Corn Growers Association in confirming that additional regulation would unnecessarily duplicate EPA’s existing science-based regulatory review. ASA President Richard Wilkins, who farms in the Chesapeake Bay Watershed in Greenwood, Del., issued the following statement on the news:

“Monday’s ruling is a big step forward in the push for a science-based system. The federal ruling underscores how activists use lawsuits to force duplicative additional regulations to tie up farmer productivity. Our farmers make their decisions based on science, and as such, need regulations based on that same sound science. We appreciate the ruling today, and hope that it will signal a respect for pragmatic regulation moving forward.”



EPA Finalizes Increase in Renewable Fuel Volumes

The U.S. Environmental Protection Agency (EPA) today finalized increases in renewable fuel volume requirements across all categories of biofuels under the Renewable Fuel Standard (RFS) program. In a required annual rulemaking, today’s action finalizes the volume requirements and associated percentage standards for cellulosic biofuel, advanced biofuel, and total renewable fuel for 2017, and for biomass-based diesel for 2018.

“Renewable fuel volumes continue to increase across the board compared to 2016 levels,” said Janet McCabe, the agency’s acting assistant administrator for the Office of Air and Radiation. “These final standards will boost production, providing for ambitious yet achievable growth of biofuels in the transportation sector. By implementing the program enacted by Congress, we are expanding the nation’s renewable fuels sector while reducing our reliance on imported oil.”

Cellulosic biofuel (million gallons) - 311
Biomass-based diesel (billion gallons) - 2.0
Advanced biofuel (billion gallons) - 4.28
Renewable fuel (billion gallons) - 19.28

Some key elements of today’s action:
-    Non-advanced or “conventional” renewable fuel increases in 2017, meeting the 15 billion-gallon congressional target for conventional fuels.
-    The standard for biomass-based biodiesel – which must achieve at least 50 percent lifecycle greenhouse gas emission reductions compared to petroleum-based diesel – grows by 100 million gallons. The required volume of biomass-based diesel for 2017 is twice that of the minimum congressional target.
-    Cellulosic biofuel – which must achieve at least 60 percent lifecycle greenhouse gas emissions reductions – grows 35 percent over the 2016 standard.
-     The advanced biofuel standard – comprised of biomass-based diesel, cellulosic biofuel, and other biofuel that achieves at least 50 percent lifecycle greenhouse gas emissions reductions – increases 19 percent over the 2016 standard.
-    Total renewable fuel volumes grow 1.2 billion gallons from 2016 to 2017, a 6 percent increase.

The Clean Air Act requires EPA to set annual RFS volume requirements for four categories of biofuels. By displacing fossil fuels, biofuels are part of the nation’s overall strategy to enhance energy security and address climate change. EPA is using the tools provided by Congress to adjust the standards below the statutory targets, but the steadily increasing volumes in the final rule continue to support Congress’s intent to grow the volumes. EPA implements the RFS program in consultation with the U.S. Department of Agriculture and the U.S. Department of Energy.



Statement by Steve Nelson, President, Regarding the EPA Boosting Renewable Fuel Requirements for 2017

"We are very pleased to see that the Environmental Protection Agency (EPA) has decided to follow the statutory requirements congress laid out in the 2007 Renewable Fuel Standard (RFS) law and allow for the blending of 15 billion gallons of corn-based ethanol. Given the current state of the agricultural economy, any reduction in RFS would have been a further blow to not only Nebraska's ethanol and corn industries, but to our livestock industry which had come to rely upon Dried Distillers Grains, an ethanol production byproduct, as a staple in the diets of cattle and hogs."



25x'25 Statement on Final 2017 RFS RVOs
Bart Ruth, Chairman, 25x'25 Alliance - Nebraska farmer from Rising City

The 25x'25 Alliance today commends EPA for its wise decision to increase its final renewable volume obligations (RVOs) above the levels proposed when the agency first recommended the 2017 biofuel blending levels under the Renewable Fuel Standard (RFS) back in May. Of particular importance is EPA's decision to raise the RVO for conventional biofuels, including corn ethanol, from the proposed 14.8 billion gallons proposed in May to the full 15 billion gallons authorized by the 2007 Energy Independence and Security Act. The agency's decision to meet the statutory requirement reflects an acknowledgement of the economic and energy security benefits that Congress envisioned from biofuels when lawmakers created the RFS 11 years ago. Biofuels offer a cleaner alternative to petroleum-based fuels and the decision to increase the blending levels in 2017 sends a clear signal to investors that growth in the sector is back on course.



NCGA Statement on EPA’s Final 2017 Renewable Volume Obligation

The following is a statement from Texas farmer Wesley Spurlock, president of the National Corn Growers Association, in response to today’s announcement by the U.S. Environmental Protection Agency (EPA) of the final 2017 renewable volume obligation under the Renewable Fuel Standard.

“Today the EPA moved in the right direction by increasing the 2017 ethanol volume to statute. This is critical for farmers facing difficult economic times, as well as for consumers who care about clean air, affordable fuel choices, and lowering our dependence on foreign oil.

“The Renewable Fuel Standard has been one of America’s great policy success stories. It has improved our energy independence, our air quality, and our rural economies. Although we believe the EPA did not have authority to reduce the ethanol numbers in the first place, we are pleased to see the RVO finally back on track.

“Moving forward, we call on the EPA to continue following the law and keep the RFS on track. Doing so will bring much-needed stability to the marketplace, providing greater certainty for farmers and the industry while also spurring increased investment in renewable fuels.

“Together with both public and private sector partners, NCGA will continue working to grow our national fuel infrastructure so that consumers have greater access to renewable fuels. America’s corn farmers are proud to grow a cleaner-burning, renewable fuel source for America and the world. Thank you to everyone who took the time to contact the EPA in support of the RFS and renewable fuels.”



EPA Returns RFS Renewable Volume Obligations to Statutory Level in 2017

Today, the Environmental Protection Agency (EPA) released their final 2017 Renewable Volume Obligations (RVOs) rule for the Renewable Fuel Standard (RFS). The conventional biofuel amount of 15 billion gallons is an increase from 14.8 billion gallons in the proposed rule, and sets the levels in line with bipartisan Congressional intent. In response, Emily Skor, CEO of Growth Energy, issued the following statement:

“We are pleased that the EPA’s rule finally achieves the statutory volume for conventional biofuel as called for by Congress. The Renewable Fuel Standard is our country’s most successful energy policy. It continues to inject much needed competition and consumer choice into the vehicle fuels marketplace. It enables greater consumer adoption of cleaner biofuels that displace toxic emissions and reduce harmful emissions, while creating American jobs, spurring innovation and lowering the price at the pump.

“Today’s announcement by the administration validates the critical importance of cleaner burning, less expensive biofuels, like ethanol. The American ethanol industry is a true success story, and with increased volumes, producers can unleash their full potential to ensure that higher blends, such as E15, are available to consumers and producers can continue to innovate by leveraging 21st century fuels for 21st century cars.

“This announcement is a win for our energy security, the environment, the American consumer and American innovation. We look forward to working with EPA, as well as the incoming Trump administration, to ensure the continued successful implementation of the RFS.”



Renewable Fuels Announcement Strengthens Energy Security

The National Biodiesel Board (NBB) welcomed the release of new standards to support American jobs and energy security. The group applauds the administration for working to reduce America’s dependence on fossil fuels by raising biodiesel volumes under the Renewable Fuel Standard (RFS).

“The real winners with this announcement are American consumers who will now have access to even more cleaner burning, advanced biofuel,” said NBB CEO Donnell Rehagen. “These benefits extend far beyond the biodiesel industry, supporting high paying jobs and clean air across the nation. Though we are poised to top these numbers this year, growth in advanced biofuels still sends positive signals to the marketplace.”

Under the new RFS rule, Biomass-Based Diesel standards would move to 2.1 billion gallons in 2018 up from 2 billion gallons in 2017. The Biomass-Based Diesel category – a diesel subset of the overall Advanced Biofuel category – is made up of biodiesel and renewable diesel, another diesel alternative made from the same feedstocks using a different technology.

Additionally the new RFS rule, would move Advanced Biofuels to 4.28 billion gallons in 2017 up from 3.61 billion gallons in 2016 with Biomass-Based Diesel continuing to fill a large portion of the Advanced Program.

The new standards reflect modest growth in the standards but remain below the more than 2.6 billion gallons of biodiesel and renewable hydrocarbon diesel expected in 2016.



EPA Releases 2017-18 RFS Volumes

The U.S. Environmental Protection Agency (EPA) released its Renewable Fuel Standard (RFS) volumes for 2017-18 this morning. There are positive aspects to the volumes they have announced, with the overall RFS increasing and the total Advanced Biofuels portion being increased above the levels in the Proposed Rule. The increased Advanced Biofuels volume requirements provide a market opportunity for soy biodiesel, which is the most prevalent fuel to qualify as an Advanced Biofuel. The American Soybean Association (ASA) would have liked to see greater support and promotion specifically for domestically produced biodiesel through higher volumes for the biomass-based diesel category. EPA chose to maintain the biomass-based diesel volumes at 2.1 billion gallons for 2018, the same level in the initial Proposed Rule. While it represents a 100 million gallon increase in the RFS biomass-based diesel volumes from 2017, it is roughly the same amount of biomass-based diesel that was utilized in the U.S. in 2015.

"The levels announced today provide opportunities but also do not take full advantage of an opportunity to further promote a viable, domestically produced renewable fuel industry that is U.S. biodiesel," said ASA President Richard Wilkins, a soybean farmer from Greenwood, Del. "EPA will raise the overall volumes relative to the Proposed Rule and increase the total Advanced Biofuels volume requirements for 2017 from 4.0 billion gallons to 4.28, an increase of 19 percent. That's a plus for biodiesel as the primary source of Advanced Biofuels." Wilkins noted, however, that EPA chose not to raise the Biomass-based diesel volume requirements within that Advanced Biofuel pool for 2018.

"When EPA issued its proposed rule, ASA clearly stated that the 2.1 billion gallon mark did not adequately capture the capacity of the biodiesel industry," he said. "To see the volume remain at 2.1 billion gallons as they were in the Proposed Rule is frustrating. We know we can do more."



EPA Sets Right Tone for Advanced Biofuels with RFS Announcement, NFU Says

The U.S. Environmental Protection Agency (EPA) announced the 2017 Renewable Fuels Standard (RFS) volume obligations, setting conventional renewable fuels at the 15 billion volume level established by Congress. In response, National Farmers Union (NFU) President Roger Johnson released the following statement:

“We are appreciative that EPA has raised the RFS volume obligations from their initial proposal to meet the 15 billion volume obligations set by Congress. Today’s action shows a clear commitment to achieving the environmental benefits inherent in conventional ethanol and to protecting the future of advanced biofuels in the market.

“Farmers and ranchers face substantial challenges in a changing climate; today's announcement encourages family farmers to join in building climate resilience. A regulatory environment that promotes investment in renewable fuels and advancement in biofuels is critical to involving the agriculture community in mitigating the impact of climate change. By properly implementing the RFS, we can collectively do more to meet the Administration’s broader climate goals.

“We look forward to working with the new administration to continue to support proper implementation of the RFS.”



Farm Bureau Opposes Speed Limiters Proposal
 
The Department of Transportation’s proposal to require speed limiters for large commercial vehicles fails to take into account the fact that many commercial vehicles often cover hundreds of miles on open roads with few other vehicles, Farm Bureau pointed out in recently submitted comments.  In addition, the proposed rule would pass on significant costs to already struggling farmers and ranchers who only use heavier trucks seasonally.

The proposed rule, put forth by the National Highway Traffic Safety Administration, the Federal Motor Carrier Safety Administration and DOT, would require vehicles with a gross vehicle weight rating of more than 26,000 pounds to be equipped with a speed limiting device initially set to a speed no greater than a speed to be specified in a final rule and would require motor carriers operating such vehicles in interstate commerce to maintain functional speed limiting devices set to a speed no greater than a speed to be specified in the final rule for the service life of the vehicle.

Speed limits should not be arbitrarily established by federal rule, Farm Bureau said in its comments. Instead, it should be based on conditions in the area in which it’s posted.

"Our members operate in all types of environments from the most rural regions of this country to more urban areas in high population densities. That is one of the reasons we have different posted speed limits for different scenarios based on the distinct local conditions," according to Farm Bureau's comments.

“The proposal ignores the fact that many commercial vehicles often operate for hundreds of miles without much interaction with other traffic. There is no clear rationale in the rule for suggesting a truck traveling in a rural setting with minimal traffic should have the same top speed as a truck traveling in a large city,” Farm Bureau continued.

The organization also pointed out that the proposal would be too costly for farmers and ranchers who use large trucks only during certain times of the year.

“The rule, if adopted, would pass on significant costs to our members who do not operate as commercial motor vehicle enterprises but only utilize heavier trucks seasonally. These costs would impact an industry that is currently struggling to make ends meet with the recent downturn in the farm economy,” Farm Bureau said.



Fertilizer Prices Remain Mixed

Average retail fertilizer prices were mixed again the third week of November 2016 with most products slightly lower while some were higher, according to fertilizer retails surveyed by DTN.

Like last week, prices for six of the eight major fertilizers were lower compared to a month earlier, though none of these moves were substantial. DAP had an average price of $436 per ton, MAP $445/ton, 10-34-0 $445/ton, anhydrous $466/ton, UAN28 $219/ton and UAN32 $256/ton.

The remaining two fertilizers were slightly higher in price compared to a month prior. Neither fertilizer was up significantly. Potash had an average price of $315/ton and urea was at $327/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.35/lb.N, anhydrous $0.28/lb.N, UAN28 $0.39/lb.N and UAN32 $0.40/lb.N.

Retail fertilizers are lower compared to a year earlier. All fertilizers are now double digits lower.

Urea is now down 19%, DAP is 20% less expensive and MAP is 21% lower. Both 10-34-0 and UAN32 are 23% lower, UAN28 is 24% less expensive and both potash and anhydrous are 26% lower compared to a year prior.



Will Corn and Soybean Surpluses Be Reduced?
Darrel Good, University of Illinois

The USDA's November WASDE report projected that U.S. stocks of corn will grow from 1.738 billion bushels at the beginning of the current marketing year to 2.403 billion bushels at the end of the marketing year. Soybean stocks are expected to grow from 197 million bushels to 480 million bushels.

Large increases in stocks are expected even though corn consumption during the current marketing year is expected to exceed that of last year by 948 million bushels (6.9 percent) and soybean consumption is expected to increase by 165 million bushels (4.2 percent). Increased corn consumption is projected in both the feed and residual and export categories. A majority of the expected increase in soybean consumption is in the export category. The expected increase in stocks reflects the extremely large crops produced this year.

The large crops and resulting low prices are creating increased financial stress for corn and soybean producers and a lot of interest in how long surpluses and low prices might persist. For now, much of the focus is on the potential size of the 2017 South American crops and the implications for demand for U.S. crops. Increasingly, the focus will shift to 2017 production prospects in the U.S. The over-riding question is whether surpluses and low prices will persist for another year. It is a bit early to speculate on supply and consumption prospects for the 2017-18 marketing year, but some scenarios can be considered.

For corn, there is a general expectation that U.S. producers will reduce acreage in the year ahead. A decrease of about 3.5 million acres, to 83.3 million acres harvested for grain, seems to be a common expectation right now. With such a reduction and a 2017 U.S. average corn yield near our calculated trend value of 168.8 bushels, the 2017 crop would total 14.06 billion bushels, 1.165 billion bushels less than the 2016 harvest. If corn consumption during the 2017-18 marketing year remained at the elevated level of 14.61 billion bushels projected for the current year, stocks at the end of the 2017-18 marketing year would be reduced to about 1.9 billion bushels.

With a trend yield of 168.8 bushels and a constant level of consumption, any reduction of more than 0.5 million acres would result in some draw down in year ending stocks of corn during the 2017-18 marketing year. Conversely, a 3.5 million acre reduction in acres along with a constant level of consumption means that an average yield of less than 174.8 bushels would result in some draw down in marketing year ending stocks. However, if combined corn production in Brazil and Argentina in 2017 increases by 945 million bushels, as now projected by the USDA, U.S. corn exports would be expected to decline during the 2017-18 marketing year. If U.S. exports decline by 250 million bushels and acreage is reduced by 3.5 million acres, the 2017 average yield would need to be less than 171.8 bushels in order to reduce year ending stocks.

For soybeans, there is a general expectation that U.S. producers will increase acreage in the year ahead. An increase of about five million acres, to 88 million harvested acres, seems to be a common expectation right now. The extremely high soybean yields of the past three years raise some questions about a potential increase in the trend yield. However, if the 2017 U.S. average soybean yield is near our calculated linear trend value of 47.5 bushels and acreage is increased as expected, the 2017 crop would total 4.18 billion bushels, 181 million bushels less than the 2016 harvest. If soybean consumption during the 2017-18 marketing year remained at the elevated level of 4.108 billion bushels projected for the current year, stocks at the end of the 2017-18 marketing year would grow to about 580 million bushels.

With a trend yield of 47.5 bushels and a constant level of consumption, any increase of more than 2.85 million acres would result in some further growth in year ending stocks of soybeans during the 2017-18 marketing year. On the other hand, a five million acre increase in soybean area along with a constant level of consumption means that an average yield of more than 46.3 bushels would result in some increase in marketing year ending stocks. However, if combined soybean production in Brazil and Argentina in 2017 increases by 210 million bushels, as now projected by the USDA, U.S. soybean exports would be expected to decline during the 2017-18 marketing year. If U.S. exports decline by 100 million bushels and acreage is increased by five million acres, a 2017 average yield of more than 45.2 bushels would result in some increase in year ending stocks.

There are obviously multiple potential acreage, yield, consumption, and ending stocks scenarios for the 2017-18 U.S. corn and soybean marketing year. The most likely scenarios tend to favor a modest reduction in marketing year ending stocks of corn and a modest to large increase in marketing year ending stocks of soybeans. The corn market currently appears to reflect expectations of reduced stocks, with the December 2017 futures price $0.37 higher than December 2016 price. The soybean market is apparently not convinced that stocks will continue to grow next year, with the January 2018 future price only $0.06 lower than the January 2017 price. The soybean market appears to be reflecting more production risk than reflected by the corn market. Perceived production risk may stem from current drought conditions in the southeast U.S. and/or uncertainty about potential impacts if a La Nina episode unfolds.



Farmers Receive Less Than Twenty Percent of Thanksgiving Retail Food Dollar, NFU Farmer’s Share Shows

Consumers’ holiday food costs have declined, but farmers still receive less than 20 percent of the food dollar, according to the annual Thanksgiving edition of the National Farmers Union (NFU) Farmer’s Share publication. The popular Thanksgiving Farmer’s Share compares the retail food price of traditional holiday dinner items to the amount the farmer receives for each item.

“It’s important to understand the difference between the price consumers pay for food at the grocery store or restaurant and the commodity prices farmers are paid for their products. Just recently food costs started to drop, but farm and ranch families have been plagued by low commodity prices for nearly three years,” said Roger Johnson, president of NFU. “Comparatively, the costs associated with the rest of the supply chain have a more pronounced effect on consumers’ food prices.”

On average, farmers receive 17.4 cents of every food dollar consumers spend, while more than 80 percent of food costs cover marketing, processing, wholesaling, distribution and retailing. For the 15 items NFU tracks for the Thanksgiving version, farmers received 19.4 cents of the retail food dollar.

Turkey growers, who raise the staple Thanksgiving dish, receive about 89 cents per pound retailing at $1.59. Wheat farmers averaged a meager 4 cents on 12 dinner rolls that retail for $3.29. And dairy producers received only $1.44 for the $4.49 gallon of fat free milk.

Thanksgiving presents an opportunity to raise awareness about food production, including misconceptions about food costs, Johnson explained. “Farmers and ranchers play the most valuable role in actually producing the food that is served at holiday dinners, yet they make just pennies on the dollar for their products.”

The Farmers’ Share is based on calculations derived from the monthly Agriculture Prices report produced by the U.S. Department of Agriculture’s National Agricultural Statistics Service, and compared to price points of common grocery food items at Safeway supermarket.



Deere Sees Better Results

Farm-equipment supplier Deere & Co. easily topped quarterly sales and profit expectations on Wednesday and said it expects declining sales of its agricultural machinery will start to ease next year.

Deere continued to forecast weakening demand in North America where it dominates the market for large farm tractors and harvesting combines. But the company sees an upturn in South America propelled by resurgent sales of farm equipment in Brazil and Argentina.

Its shares were 11% higher at $102.29 in midday trading on Wednesday, after earlier notching an all-time high.

Lower prices for farm commodities and a glut of used equipment have held down demand for new machinery for the past three years. Farmers have grown increasingly cautious about buying new equipment following years of elevated demand for equipment when farm incomes and commodity prices were high.

The Moline, Ill.-based company forecast that sales of its farm and construction equipment would fall by 1% during the fiscal year ending Oct. 31, 2017. Wall Street analysts were expecting sales to drop by about 3% after declining 9.3% to $23.4 billion in 2016. The company predicted profit next year will be down 1%, following a 21% decline in 2016 to $1.5 billion.

Sales of the company's farm and landscaping machinery fell 5% during the fourth quarter from the same period a year earlier to $4.44 billion, but profit from the business surged 37% to $371 million from a combination of higher prices on machinery and lower expenses. Deere reported that prices for new and used equipment firmed in the quarter, taking pressure off dealers to offer discounts that squeeze margins.

"This happened to be a quarter where we had a lot of little things that were positives," said Tony Huegel, director of investor relations, during a conference call.

Income from Deere's financing unit dropped 27% during the quarter to $164 million, reflecting losses on the sale of equipment that had previously been leased. Deere has stepped up its leasing activity in recent years to offset falling sales. Low prices on used equipment are making it difficult for Deere to recover all of the leftover costs on leased equipment when farmers return it to the financing unit. The company said it has raised lease rates to result in smaller residual values at the end of the leases that are more in line with used-market prices.

Deere expects retail sales of farm machinery in 2017 to fall 5% to 10% industrywide in North America, but anticipates about a 15% increase in industry sales of tractors and combines in South America, a key growth market for Deere and other farm-equipment companies.

Deere's construction-machinery business continued to struggle during the fourth quarter, losing $17 million as sales slipped 5% to $1.21 billion. The company attributed the loss to higher costs for production and sales incentives and an impairment charge for its equipment operations in Brazil and China. Deere said demand for its construction equipment in the U.S. is being weighed down by reduced spending by equipment-rental companies and building contractors. Deere expects sales of its construction and forest equipment to increase by 1% in 2017.

Deere sidestepped questions from analysts about the effects of potential tax cuts or trade policy changes anticipated under the new Trump administration. But Huegel said Deere executives are strategizing for a variety of possible scenarios. "At the end of the day, we want to be prepared for whatever becomes reality," he said.

In all for the fourth quarter, Deere reported net income of $285.3 million, or 90 cents a share, compared with $351.2 million, or $1.08 cents a share, in the year-ago period. Analysts expected the company to earn 40 cents.

Overall equipment sales fell 5% from last year to $5.65 billion, better than the $5.38 billion expected by analysts.