Wednesday November 30 Ag News

CVA Announces New Board of Directors

Central Valley Ag Cooperative (CVA) recently hosted their Annual Meeting for member-owners to review the fiscal year, and to announce the new elected members of their Board of Directors. CVA relies on it’s Board of Directors to position CVA for future success and profitability for member-owners. The CVA Board of Directors is made up of local, agricultural producers who are recognized for their industry expertise, as well as economic and community development skills. CVA member-owners elected the following individuals to represent their voice on the board; Ryan Crumly – Region 1, Kurt Thoene – Region 2, Paul Jarecke – Region 3, Neal Bracht – Region 4, Jeff Berggren – Region 5 and Doug Moon – Region 6.

“I would like to congratulate our newly elected board of director members, we believe that the Cooperative business model requires a balanced approach and our board plays an integral role in CVA’s performance,” said Dave Beckman, Chairman of the Board of Directors for CVA. “In addition to congratulating our newly elected members, I would like to thank our departing board of director members Rod Heiss, Byron Neinhueser and Mike Bergen for their dedication to CVA over the years.”

At the meeting, CVA reported $15.04 Million in Local Net Profit, $27.3 Million in Total Profit and returned $8.0 Million in patronage to member-owners with 50% paid in cash and the balance in Non-Qualified Equity. Over the 2016 fiscal year $8.1 Million was paid out in cash patronage, equity redemptions, and estates. The amount paid out in cash to CVA member-owners now stands at $62.6 Million over the past five years. Not only is the cash received as a benefit for member-owners; $40.7 Million was reinvested in assets to improve speed, space, and efficiency in 2016. CVA has now spent $213.8 Million over the past five years in assets to better serve its member-owners.

“The Cooperative model continues to perform well and these results could not have been obtained without an outstanding group of employees and the support of our member-owners,” said Beckman.



CVA Fullerton Opens New Doors

This Harvest has been extra busy for Central Valley Ag employees in Fullerton, Nebraska. Not just because this harvest brought in 1.9 million bushels of corn, 630,000 bushels of beans and 27,000 bushels of milo to the location but right amidst soybean harvest the Fullerton employees were making a move to their new office and upgrading the facility’s scale.

CVA Fullerton New ScaleConstruction of the new office and installation of the new scale began on April 1, 2016, and finished up at the end of September. The new scale is ten-foot longer and two foot wider than the old one, which allows it to better service equipment. This upgrade has come as a welcome asset by both employees and customers. In addition to the new scale, employees also have a new office with approximately double the square footage of their old space. The expansion in Fullerton will allow more room for employees from the Clarks CVA location who will now office in Fullerton during the Fall and Winter months, after Clarks recently made the transition to a seasonal location.

“I feel this office will allow us to expand our offerings to customers, as far as CVA’s specialty areas – ProEdge and ACS, before this we didn’t have the room or the capabilities to offer these services,” said Brian Dubas, CVA Fullerton Location Manager. “Also having more space to house the Clarks employees here in Fullerton during harvest now that Clarks is only open during the growing season is a great benefit.” Overall Dubas seems excited about the recent change and is happy with the direction CVA is taking, “I believe the improvements that CVA has made throughout the company, including our location, is a testament to their willingness to improve facilities for their customers and employees needs.”

On November 23, 2016, an Open House was held so customers could tour the new office and learn about the benefits the new facility will bring. Over the past fiscal year, $40.7 Million was reinvested in assets across the CVA territory to improve speed, space, and efficiency. CVA has now spent $213.8 million over the past five years in assets to better serve its member-owners.

“This new office is something we’ve had in the works for a couple of years,” said Brent Reichmuth, CVA Region 3 Operations Manager. “Construction got started a little late with the weather that we encountered in the spring, which made for an extra stressful bean harvest for the Fullerton employees. The employees worked hard to continue assisting customers throughout the move, and once situated harvest went really well. I look forward to seeing the benefits this new office will bring to the area, the addition turned out great and proves that CVA will continue to provide services to the Fullerton area for a long, long time.”



Extending the Grazing Season for Cow Herds
Steve Tonn, NE Extension Educator – Beef Systems, Washington County Extension

Feed costs represent the major cost in most cow calf production systems.  An analysis of 225 Standardized Performance Analysis (SPA) Beef Cow Records on herds in Illinois and Iowa showed that feed cost was the overriding factor determining profitability, explaining over 57 percent of the herd-herd variation.  Typically the cost of supplying nutrients to cows is much greater using harvested feedstuffs as opposed to grazing pastures, cover crops, or crop residues.  Usually savings can be at least $1 per head per day for grazing compared to feeding harvested forages.  Providing grazable forage, in a cost-effective manner to the cow, for as many days of the year as possible should be the goal of cow calf producers.

Several strategies can be used to supply forage into the fall or early winter and effectively extend the grazing season by 60 to 90 days, thus reducing the need for stored feeds.  These strategies can be categorized into three major groups: 1) stockpiling (conserving forages in late summer for use in the fall and winter,  2) utilizing forage crops that continue to grow into the fall and early winter or 3) utilizing crop residues.

Stockpiling
Stockpiled forage is forage that is allowed to grow and accumulate for use at a later time.  We are used to stockpiling silage but stockpiling forage for later grazing may be a new concept to many.

Tall fescue is well suited for stockpiling.  The one drawback to tall fescue is that it may contain the endophyte fungus which reduces cattle performance.  Cattle consuming endophyte infected tall fescue have reduced weight gains, lower milk production and and/or health problems.  However some research shows that stockpiling may help to reduce the toxicity of endophyte-infected tall fescue.  Tall fescue can be tested to determine the percent of endophyte infected plants.  Also there are endophyte free tall fescue varieties that can be planted.  If tall fescue is going to be stockpiled, then don’t graze it from August to early October.  To produce a high yielding, high quality stockpile, the pasture should be clipped fairly short and fertilized with 40-80 pounds of nitrogen in early to mid-August if there is sufficient moisture.  Smooth brome is also a candidate for stockpiling.  It should be managed in a similar manner as tall fescue.  Smooth brome is not as productive as tall fescue.   Fertilizing with 25-30 pounds of nitrogen per acre in early to mid-August is recommended if soil moisture is available.

Summer annuals such as sudan, sorghum sudan hybrids, pearl millet and others can work as stockpiled forages.  These summer annual grasses make acceptable winter pasture for beef cows. The quality of this feed will be higher if planting is delayed so that the crop does not reach maturity before frost. Tonnage of dry matter per acre will be lower, but protein content of the forage will be higher. Less lodging should occur if frost catches the crop prior to the flowering stage of maturity compared to later stages of maturity.  High nitrate levels can be an issue with sudan and sorghum sudan hybrids.   Swath the forages in early fall and if the windrows are to be grazed through the winter, make the windrows high and dense to reduce weathering loss.  Strip or swath grazing will allow for more efficient utilization.  See the NebGuide Windrow Grazing G1616 for more information.

Fall Growing Forages
Tall fescue and smooth brome are fall growing forages which provide the opportunity to extend the grazing season.  Both of these forages respond to fertilization in early August if soil moisture is adequate.  These grasses can especially be well suited for use with weaning calves.

Winter cover crops on corn and soybean acres are a natural fit for crop-and-beef producers.  The winter cover, which can be grasses (cereal rye, wheat, oats, triticale), legumes, brassicas (turnips, radish, rape, and collards) or a mix, offers extended grazing into the winter for cows and stocker calves.

Cover crops added to a cropping system can complicate management. The crops must be seeded early enough to get a good start on growth before winter.  Planting between August 10th and September 10th in Nebraska can result in 1 to 2 tons of dry matter of high quality forage.  Adequate rainfall or moisture in the fall for crop emergence and growth is a critical factor.  Cover crops work the best after corn silage harvest or wheat harvest.  However if conditions are right they can also be sown in corn and soybean fields.  This may mean aerial seeding into the soybeans or corn.  Another consideration would be to use earlier maturing corn and soybean varieties. Don’t make it too complicated.  Try a cover crop that gives you a good chance for success. Check out the Nebraska Extension beef web site (beef.unl.edu) or the cropwatch web site (cropwatch.unl.edu) for information on UNL research with cover crops.

Crop Residues
Most if not all Eastern Nebraska cow calf producers graze their cows on corn stalks.  But are we utilizing them to their optimum benefit?  Data from the University of Missouri Systems Research Center shows that harvesting efficiency of corn stalks with whole field grazing is typically about 30 to 40 percent.  Only about a third of the feed available when the cows went into the field is utilized.  The rest is fouled or trampled.

Utilizing strip-grazing can extend grazing time and make the quality of the diet more uniform over the grazing period.  By limiting access to only a small portion of the field, the cattle are forced to consume residual corn and both the high-and-low quality forage components of the residue.

What is the potential for utilizing other corn stalk fields?  Do you have neighbors whose corn stalks are not being grazed?  Can you extend your grazing season by renting more corn stalks?  Nebraska Extension has a spreadsheet called the Corn Stalk Calculator that can be a very good tool for calculating stocking rate and rental rates.  The Corn Stalk Calculator can be found on the UNL Beef Web Site   beef.unl.edu   click on learning modules and scroll down to Corn Stalk Calculator.

Dormant alfalfa also offers the opportunity to extend the fall grazing season.  Grazing the regrowth of alfalfa hay fields after cold weather has ensured dormancy is an excellent option.  Usually 2 to 3 days of successive evening temperatures in the 24-27 degree range should be experienced before grazing alfalfa.  Bloat should be less of a problem when grazing frosted alfalfa.  It is important to graze early enough to utilize the forage while still in a leafy palatable state.  An added benefit to fall grazing is that research and farmer experience indicates a reduction in alfalfa weevil populations the following spring.

Select the forages that fit into your farming system.  Extending the grazing season and reducing the amount of harvested forages fed to your cows will make your operation more cost efficient.  There are some excellent research based publications and articles on the internet on extending the grazing season.  Search the internet for extending the grazing season or cover crops for grazing.

So what do you need to extend the grazing season next fall?
1.     Forage in the field:  Begin planning now how you will grow forage for your cow herd to utilize later into the fall and winter.  Learn how to inventory standing feed.

2.     Control of livestock: Acquire and learn how to use high-quality fencing materials.  Allocating feed for short grazing periods permits one to increase harvesting efficiency and increase carrying capacity.

3.     Cows that know how to “work”: Don’t be swayed by “Sad Brown Eye Syndrome” or the vocal complaints of your cows.  Livestock are tough and can learn to graze for a living.

4.     Positive attitude:  A skeptical approach to fall and winter grazing on your part will virtually assure that it will “fail” for you.  Don’t make it too complicated.  Try something that gives you a good chance to succeed.



NEBRASKA SOYBEAN DAY AND MACHINERY EXPO IS DEC. 15

The 2016 Nebraska Soybean Day and Machinery Expo on Dec. 15 will assist soybean producers in planning for next year's growing season.

The expo, from 8:30 a.m. to 2:15 p.m., will be in the pavilion at the Saunders County Fairgrounds, 635 W. First St. in Wahoo.

Presenters include University of Nebraska researchers and specialists, Nebraska Soybean Checkoff representatives, soybean growers and private industry representatives.

> Jason Norsworthy, a weed scientist at the University of Arkansas, will discuss the current status of herbicide resistance in the United States with specific detail given to the extent of the problem in Nebraska cropping systems. Norsworthy will outline reasons for the development of herbicide resistance and provide strategies for growers to maximize weed control and protect against further resistance.

> Roger Hoy, director of the Nebraska Tractor Test Laboratory, will discuss large equipment, tires and compaction.

> Loren Geisler, Nebraska Extension plant pathologist, will provide the latest on management of soybean sudden death syndrome.

> Cory Walters, assistant professor and grain and oilseed economist at the University of Nebraska-Lincoln, will discuss marketing for soybean and corn crops.

The expo also will include an update on the Nebraska Soybean Checkoff and association information.

Producers will be able to visit with representatives from seed, herbicide, fertilizer and equipment companies and view new farm equipment during a 30-minute break at 9:45 a.m.

A complimentary lunch will be served at noon. The Saunders County Soybean Growers Organization requests that each participant donate one or more cans of nonperishable food to the food pantry.

Registration is available the day of the expo at the door. There is no registration fee.

For more information about the program or exhibitor information, visit http://ardc.unl.edu/nebraskasoyexpo, call 800-529-8030 or e-mail kglewen1@unl.edu. 

The program is sponsored by Nebraska Extension, the Nebraska Soybean Checkoff, Saunders County Soybean Growers Organization and private industry.



Farm Sector Weakness To Continue Into 2016

Net cash farm income is forecast at $90.1 billion and net farm income at $66.9 billion for 2016, according to USDA's Economic Research Service in a report released today. Both measures are forecast to decline for the third consecutive year after reaching record highs in 2013 for net farm income and 2012 for net cash income. Net cash farm income is expected to fall by 14.6 percent in 2016, while net farm income is forecast to decline by 17.2 percent. These declines follow the 19.8- and 12.7-percent reductions in net cash income and net farm income, respectively, that occurred in 2015.

Highlights
    Overall, cash receipts are forecast to fall $23.4 billion (6.2 percent) in 2016 due to a $23.4-billion (12.3 percent) drop in animal/animal product receipts; crop receipts are forecast essentially unchanged from 2015. Nearly all major animal specialties—including dairy, meat animals, and poultry/eggs— are forecast to have lower receipts, including a 14.8-percent drop ($11.6 billion) in cattle/calf receipts. The slight gain in crop cash receipts is driven largely by a $5.3-billion increase in oil crop receipts, namely soybeans, while feed crops and vegetables/melons are down $2.2 billion (3.8 percent) and $1.4 billion (6.9 percent), respectively.

    While overall cash receipts are expected to decline, receipts for several commodities—including turkeys, rye, cotton (cotton lint), miscellaneous oil crops, and tobacco—are forecast to rise by 10 percent or more.

    Direct government farm program payments are forecast to increase in 2016 by $2.1 billion, or 19.1 percent, to $12.9 billion. Increases were primarily in price- and revenue-contingent farm programs.

    A 2.6-percent drop in overall production expenses forecast for 2016, on top of an 8.1-percent decline in 2015, partly offsets the forecast decline in cash receipts. Notably, expenses for inputs that typically are produced by the farm sector itself—including feed and livestock/poultry purchases—are expected down (6.1 percent). Also, expenses for fuels and oils are forecast down by 12.2 percent in 2016. If realized, expenses across each of these three categories will have fallen for 3 straight years. Interest expenses are forecast to decline 3.8 percent relative to 2015 due to falling real estate interest expenses. In contrast, cash labor expenses are forecast to increase 5.4 percent due to an increase in hired labor costs.

    The value of total farm sector equity is forecast down by $79.9 billion (3.1 percent) in 2016, due to a rise in farm sector debt and a modest decline in sector assets relative to 2015. The value of real estate, the largest component by far of the asset portfolio, is forecast down by $12.0 billion (0.5 percent). The (inventory) value of crops, animals/animal products, and purchased inputs is forecast down by $17.4 billion (9.3 percent) and the value of machinery/vehicles is expected down $22.7 billion (9.5 percent) from 2015.

    The balance sheet forecast indicates a fourth consecutive year in which farm solvency measures have declined. Liquidity positions have likewise declined, but these indicators of financial health remain near historic lows for the sector as a whole.

    Following the decline in net farm income, the rate of return on farm assets and the rate of return on farm equity are both negative for 2016, and both have declined every year since their recent peaks in 2012.

Value of Agricultural Sector Production Expected To Fall in 2016
The annual value of U.S. agricultural sector production is expected to fall 5.9 percent to $403.7 billion in 2016, almost entirely due to declines in the value of animal/animal product production (see table on value of production). The value of agricultural sector production is composed primarily of crop and livestock cash receipts adjusted for any changes in inventories and home consumption, plus farm-related income, which includes commodity insurance indemnity payments. If realized, the forecast value of crop production ($185.2 billion in 2016) would represent a small increase from 2015, the first year-over-year increase since 2013. The value of U.S. livestock production is forecast to decline 13.3 percent (to $168.6 billion) in 2016 as lower animal and animal product prices are expected to lead to large declines in both livestock receipts and the value of inventory adjustment.

The value of agricultural sector production includes several types of farm-related income in addition to cash receipts, including imputed rental income from farm dwellings and income from machine hire and custom work, forest products sold, net cash rent received, and Federal crop and livestock insurance indemnities. Indemnities received can partially cover losses to insured farmers due to natural disasters and market declines. Wheat (base acres) is the largest recipient (25.2 percent) of 2016 crop-year-to-date Federal Crop Insurance Corporation (FCIC) indemnities, followed by corn, cotton, and soybeans. Federal commodity insurance indemnities paid in 2016 are expected to decline for the third straight year, decreasing by almost $3 billion from 2015.

Total Crop Receipts Essentially Unchanged in 2016
Crop cash receipts—the cash income from crop sales during the 2016 calendar year—are forecast essentially unchanged in 2016 as prices continue to decline for most field crops. The crop cash receipts forecast of $186.5 billion represents a decline of over 24 percent in inflation-adjusted terms from the all-time high in 2012; for corn receipts, the 2012-16 decline is forecast at about 36 percent, reflecting lower U.S. corn prices. Expected further weakening of corn prices in 2016 more than offsets production gains, leading corn cash receipts to fall by almost $2 billion (4 percent) from 2015. Similarly, wheat receipts have declined since peaking in 2012. Wheat receipts are expected to decline almost $1 billion (10 percent) from 2015 as price declines accompany strong harvests. Increased soybean production is expected to be supplemented by higher prices in 2016, reflecting strong export commitments and indications of higher priced, forward sales. Thus, soybean cash receipts are expected to increase over $5 billion (16 percent) in 2016. Rice receipts are forecast to fall in 2016 while cotton receipts are expected to increase, though they are forecast to remain 30 percent below their 2012 high.

Vegetable and melon cash receipts are expected to fall almost 7 percent ($1.4 billion) in 2016. Dry bean receipts are expected to decline almost 8 percent, while potato receipts are expected to rise 4.8 percent. Cash receipts for fruits and nuts are expected to decline 7.2 percent in 2016. Sugarcane/sugarbeet receipts are expected to rise between 2 and 3 percent in 2016.

Animal/Animal Product Receipts Forecast Sharply Lower in 2016
Animal/animal product cash receipts are expected to fall $23.4 billion (12.3 percent) in 2016. Relative to 2015, prices are expected to fall for almost all major animal and animal product commodities, especially eggs.

Since reaching a record high of $49.4 billion in 2014, milk receipts are forecast to drop $15.4 billion (31.2 percent) over 2015-16 as declining prices continue to outweigh expected increases in milk production. Cash receipts from cattle and calves are also expected to decline in 2016, falling $11.6 billion (almost 15 percent) from 2015 as cattle/calf prices decline. Hog production is expected to continue rising in 2016 as the industry recovers from the porcine epidemic virus (PEDV) in 2014. Hog prices are expected to drop in 2016, leading to a forecast drop in hog cash receipts of nearly 7 percent. While animal and animal product receipts are forecast substantially down, turkeys (up $0.6 billion or 10.6 percent) and miscellaneous livestock (up $0.2 billion or 2.9 percent) are both expected to grow in 2016.

Poultry and egg cash receipts are expected to fall over 18 percent in 2016, due primarily to a decline in egg receipts. HPAI, or "bird flu," resulted in 50.4 million birds being destroyed in 2015, with turkeys and egg laying chickens suffering the largest loss in numbers and driving egg prices to new—if fleeting—highs. The egg-laying industry has returned to normalcy in post-flu 2016, and the greater production levels have resulted in large price declines, with an overall decline in 2016 chicken-egg receipts. Broiler prices are expected to decline in 2016 as production increases, leading to a decline in broiler cash receipts. In contrast, turkey production, prices, and receipts are expected to increase in 2016.

Falling Prices For Most Crops Underlie Forecast Drop in Farm Cash Receipts
Cash receipts across all commodities are expected to fall $23.4 billion (6.2 percent) in 2016. This net impact can be decomposed into a separate 'price effect' that lowers receipts by $41.3 billion and a 'quantity effect' that raises receipts by $17.5 billion (plus a $0.5-billion increase in receipts for minor commodities whose prices could not be differentiated from overall receipts).

We estimate the price effect by holding 2015 quantity sold constant while allowing commodity prices alone to change; thus, cash receipts would be $41.3 billion lower due solely to the 2016 change in price. The largest impact on cash receipts is from cattle and calves, with a nearly $15-billion decline in receipts caused by prices alone. The second largest price effect was also negative, as prices for chicken eggs lowered receipts by another $7 billion.

The quantity effect is calculated for the same commodities by holding prices constant at their 2015 levels and allowing 2015-16 production changes alone to determine cash receipts. Here, the biggest production impact on cash receipts is from soybeans, as record yields associated with the 2016 harvest raise cash receipts by a forecast $6.3 billion. Second was cattle and calves, where production gains would have led to a forecast increase in receipts of over $3 billion had prices not fallen.
Change in farm cash receipts, 2015-2016F, by component of change

Direct Government Farm Payments Forecast To Rise in 2016
Direct government farm program payments are forecast to rise by 19.1 percent in 2016 to $12.9 billion (see table on government payments). The Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) programs are expected to account for 64.4 percent of all program payments. PLC payments in 2015 went to farms with base acres in long-grain rice (51.5 percent), peanuts (41.4 percent), and canola (7.1 percent). In 2016, about 39.2 percent of PLC payments are expected to go to producers with peanut base acres, 35.6 percent to producers with wheat base acres, almost 15 percent to producers with grain sorghum base acres, and the remainder to canola, corn, and oat base acres.

Operators with corn base acres received almost 84 percent of Agriculture Risk Coverage-County (ARC-CO) 2015 payments, reflecting both lower corn prices and the large number of corn base acres on which payments are made. Similarly, about 69 percent of 2016 ARC-CO payments are expected to go to producers with corn base acres, 18.5 percent to soybean base producers, and another 10.8 percent to producers with wheat base acres. The forecast increases in 2016 payments reflect expected declines in seasonal average crop prices. USDA payments are scheduled to begin sometime after October 1, 2016, contingent on adjusted gross income, payment limits, and other factors.

Commodity certificates, available beginning with the 2015 crop, allow producers to exchange collateral pledged to CCC for an outstanding, nonrecourse Marketing Assistance Loan (MAL).  The Cotton Ginning Cost-Share (CGCS) program provides one-time cost-share assistance payments to cotton producers with an ownership share in the 2015 cotton crop plantings.  They are capped at $40,000 per individual or entity and do not count against statutory payment limitations under the 2014 Farm Bill.  Finally, a category of Marketing Loan Benefits (MLBs)—composed of Marketing Loan Gains (MLGs), Loan Deficiency Payments (LDPs), and the reintroduced Certificate Exchange Gains (CEG)—are forecast to collectively increase due to expected lower prices for upland cotton, wheat, and peanuts.

The Dairy Margin Protection Program (MPP) is forecast to return $11.3 million to the Federal Government, after netting fees and premiums paid by dairy producer participants from payments issued under the program.  Supplemental and Ad Hoc Disaster Assistance payments are forecast to decline substantially in 2016 due to large expected declines in Livestock Forage Program (LFP), Noninsured Crop Disaster Assistance Program (NAP), and APHIS Bird Flu payments. Conservation payments—reflecting Farm Service Agency (FSA) and Natural Resource Conservation Service (NRCS) financial assistance programs—are expected to remain stable.
Government farm program payments to farm producers, 2006-2016F

Production Expenses Forecast Lower in 2016, Led by Reduced Livestock, Fertilizer, and Fuel Costs
After reaching record highs exceeding $390 billion in 2014, farm production expenses are forecast to dip for the second consecutive year in 2016. The expected $9.2-billion (2.6 percent) decline is the second largest year-over-year reduction in expenditures since 2009, behind the $31.7-billion (8.1 percent) decline from 2014 to 2015. Reduced input costs are expected to ease, but not eliminate, some of the pressure from lower cash receipts.

The forecast decline in production expenses is predominantly driven by less spending on livestock/poultry purchases, fertilizer, and fuel, which should more than offset the increased outlays for hired labor and property taxes/fees.

    Livestock and poultry purchases are expected to have the largest decline of any expense in 2016, both in absolute terms ($6.8 billion) and in percentage terms (22.5 percent), due primarily to lower feeder cattle prices.
    A double-digit decline (12.2 percent) in spending on fuels and oils is expected for the second consecutive year, with the U.S. Energy Information Agency expecting diesel and gasoline prices down over 15 percent in 2016.
    Labor costs are forecast to increase in 2016 by 5.4 percent (still slightly below 2014 highs), after dipping in 2015. Wage rate increases are putting upward pressure on hired labor costs.
    Interest expenses are expected to fall 3.8 percent in 2016, with expected declines in real estate interest offset by a modest increase in interest paid on nonreal estate debt.
    Net rent expense—the amount paid to rent land, adjusted for any payouts of the landlord’s share of government payments and/or insurance indemnities and for any expenses paid by the landlords—is forecast to decrease by 1.6 percent to $19.8 billion in 2016. As in recent years, the majority of net rent expense is forecast to be paid to nonoperator landlords (farmland owners who do not themselves farm) as opposed to landlords who are also operators.

Payments to Stakeholders Expected To Increase Slightly in 2016
In 2016, payments to stakeholders are forecast to increase by $1.0 billion (1.5 percent), while net value added is forecast to decline by 9.0 percent (see chart below for inflation-adjusted series trends). Net value added represents the sum of economic returns to all the providers of factors of production. Net value added is distributed among stakeholders who receive a fixed ­payment in return for their services and equity owners who share in the net farm income (profits) of the sector. Stakeholders provide the hired labor, leased capital, and rental land used in agricultural production, but in most cases do not directly share risk in the short term. An exception is landlords who sign operators to share-rent agreements. Consequently, the payments that stakeholders receive can be more stable over time than net farm income received by equity owners.



Statement from Agriculture Secretary Vilsack on Farm Income Forecast for 2016

Agriculture Secretary Tom Vilsack issued the following statement today on the Farm Income and Financial Forecasts for 2016, released by USDA's Economic Research Service.

"Today's forecast continues to show that the health of the overall farm economy is strong in the face of challenging markets. After reaching record highs in 2012-2014, net farm income declined in 2015 and is forecast to decline in 2016, but the bigger picture shows that farm income over the last five-year period reflects the highest average five-year period on record. The comprehensive farm safety net provided by the 2014 Farm Bill will continue to help America's farmers and ranchers respond to market conditions and provide financial stability for producers. Farm Bill program payments are forecast to increase over 19 percent to $12.9 billion in 2016, primarily through Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payments.

"As we saw in the August forecast, the estimates again show that debt to asset and debt to equity ratios -- two key indicators of the farm economy's health -- continue to be near all-time lows, and more than 90% of farm businesses are not highly leveraged. Median household income for farming families remains near historic highs and is expected to remain stable relative to 2015. In 2016, higher off-farm earnings are expected to help stabilize losses due to low commodity prices.

"The trend in strong household income reflects work of the Obama Administration since 2009 to make significant and targeted investments to help rural America thrive, including farming and non-farming families alike. At the beginning of the Obama Administration, rural areas were reeling from the Great Recession. Rural counties were losing 200,000 jobs per year, rural unemployment reached nearly 10 percent, and poverty rates reached heights unseen in decades. Over the past eight years, USDA has invested in building a more robust system of production agriculture, expanding foreign markets for U.S. farm goods, bolstering local and regional food systems across the country, and creating a new biobased economy in rural communities that today supports more than 4.2 million American jobs. Rural counties added over 250,000 jobs in both 2014 and 2015, and the rural unemployment rate has dropped below 6 percent for the first time since 2007. Rural populations have stabilized and are beginning to grow. Median household income in rural areas increased by 3.4 percent in 2015, poverty rates have fallen, and child food insecurity is at an all-time low.

"The future of rural America looks much brighter today, but we must continue to focus on the targeted investments to help the rural economy retool itself for the 21st century."



FY 2017 Ag Exports Forecast Up $1.0 Billion at $134.0 Billion; Imports at $112.5 Billion

Fiscal year 2017 agricultural exports are projected at $134.0 billion, up $1.0 billion from the August forecast, largely due to expected increases in dairy and livestock byproduct exports... according to USDA's Economic Research Service in a report released today. While beef and pork forecasts remain unchanged, dairy is forecast $500 million higher at $5.3 billion. Grain and feed exports are forecast up $300 million to $29.6 billion, driven primarily by stronger wheat volumes and unit values as well as by corn volumes, helping to offset expected declines in rice exports. Cotton exports are forecast at $4.4 billion, a $200 million increase, due to a poor harvest in Brazil and production uncertainty in India. Soybean export volumes continue to set records, raising the soybean forecast $500 million, which is countered by expected declines in soybean meal, soybean oil and other oilseed products. Overall, the oilseed and product forecast remains unchanged at $31.0 billion.

Forecasts to China and Mexico received the largest upward adjustments, each increasing $300 million. China continues to be forecast as the top market for fiscal year 2017 at $21.8 billion, followed by Canada ($21.3 billion) and Mexico ($18.3 billion).

U.S. agricultural imports in fiscal year 2017 are forecast at $112.5 billion, down $1.0 billion from the August forecast. Reduced imports of horticultural, sugar, and tropical products are leading the forecast decline. As a result, the U.S. agricultural trade surplus is expected to increase to $21.5 billion in fiscal 2017.

Click here to read the complete report... https://www.ers.usda.gov/webdocs/publications/aes97/aes-97.pdf. 



Statement by Agriculture Secretary Vilsack on Latest Quarterly Export Forecast for 2017

Agriculture Secretary Tom Vilsack today issued the following statement on the forecast for U.S. agricultural exports in fiscal year 2017.

"U.S. farmers and ranchers continue to rise to the challenge of supplying the world with high-quality, American-grown products. At a projected $134 billion in 2017, U.S. farm exports continue to rally and remain on the record-setting pace of the past eight years. Since 2009, the United States has exported more than $1 trillion in agricultural products, far more than any other period in our history, thanks to the productivity and ingenuity of American farmers and ranchers, aided in part by the work of USDA's Foreign Agricultural Service to arrange and support trade missions and of the Animal and Plant Health Inspection Service to break down trade barriers.

"The $134-billion forecast represents an increase of $4.3 billion from 2016 and would be the sixth-highest total on record. U.S. agriculture is once again expected to post a trade surplus, totaling $21.5 billion, up nearly 30 percent from the $16.6 billion surplus in 2016.

"The expected volume of 2017 exports is noteworthy, with bulk commodity exports expected to surpass last year's record levels - led by soybeans at a record 55.8 million metric tons, and corn, up 11 percent from last year, to 56.5 million metric tons. The volume of cotton exports is expected to begin recovering and most livestock and poultry products should see moderate increases in export volume as well.

"Exports are responsible for 20 percent of U.S. farm income, also driving rural economic activity and supporting more than one million American jobs both on and off the farm. Earlier today, USDA's Economic Research Service (ERS) released the Farm Income and Financial Forecasts for 2016, demonstrating the strength and resilience of the farm economy in the face of challenging markets, in large part due to the contribution of exports. Over the past eight years, USDA has worked to boost export opportunities for U.S. agricultural products by opening new markets, pursuing new trade agreements, enforcing existing agreements, and breaking down barriers to trade.

"USDA has made support for exports and production agriculture one of the Four Pillars of a 21st century rural economy, along with local and regional food systems, the biobased economy, and conservation and natural resources, and has made significant, targeted investments in these areas. Today's reports showing growing exports and stable farm incomes reflect the strategic, consistent work of the Obama Administration since 2009 to help rural America thrive. We must continue promoting a favorable trade environment for American exports and making targeted investments that drive the rural economy forward to ensure this progress continues."



Weekly Ethanol Production for 11/25

According to EIA data analyzed by the Renewable Fuels Association, ethanol production averaged 1.012 million barrels per day (b/d)—or 42.50 million gallons daily. That is down just 2,000 b/d from the week before. The four-week average for ethanol production stood at 1.011 million b/d for an annualized rate of 15.50 billion gallons.

Stocks of ethanol stood at 18.4 million barrels. That is a 2.7% decrease from last week and the lowest level of stocks in more than a year. Ethanol stocks currently sit at just over 20 days of supply, the lowest implied stocks-to-use since October 2015.

Imports of ethanol were nonexistent for the 14th week in a row.

Gasoline demand for the week averaged 381.4 million gallons (9.080 million barrels) daily. Refiner/blender input of ethanol averaged 906,000 b/d.

Expressed as a percentage of daily gasoline demand, daily ethanol production was 11.15%.


   
RFA Analysis: Automakers Approve E15 in More than 80% of New 2017 Vehicles

More than 80 percent of new 2017 model year (MY) vehicles are explicitly approved by the manufacturer to use 15 percent ethanol blends (E15), according to an analysis of warranty statements and owner’s manuals conducted by the Renewable Fuels Association (RFA). That is up from last year, when approximately 70 percent of MY2016 vehicles were approved by automakers for the use of E15.

For the first time, Hyundai Motor Company has approved the use of E15 in MY 2017 Hyundai and Kia vehicles, joining the majority of its auto competitors. Together, Hyundai and Kia represent slightly more than 8 percent of the U.S. light-duty automobile market.

In 2012, EPA approved the use of E15 in vehicles built in MY 2001 or later. However, auto manufacturers did not retroactively endorse the use of E15 in legacy vehicles that were already on the road.

Other key points from RFA’s analysis include:
-    The Detroit Three (Chrysler, General Motors and Ford), which collectively represent 45 percent of U.S. market share, all clearly allow E15 in their vehicles. GM started approving the use of E15 with its MY 2012 vehicles, while Ford joined the following year and Chrysler began E15 approval with its MY 2016 vehicles.
-    Other automakers explicitly offering E15 approval for MY 2017 vehicles include Honda, Toyota, Volkswagen Group, and Tata Motors (maker of Land Rover and Jaguar). Altogether, auto manufacturers with approximately 81 percent of the U.S. market share now approve the use of E15 in their MY 2017 vehicles.
-    With 9 percent of the U.S. market share, Nissan Motor Corporation remains the largest vehicle manufacturer that does not explicitly approve E15 in its vehicles. Despite announcing earlier this year that it is developing a vehicle powered by an ethanol fuel cell, the automaker only approves the use of E10 in its vehicles. Curiously, Nissan approves the use of gasoline containing up to 15 percent MTBE, a toxic additive that is banned in more than two dozen states.
-    Mazda, Subaru and The Daimler Group (maker of Mercedes-Benz) also continue to exclude E15 from fuel approvals and warranty statements. Together, these three manufacturers own about 7.5 percent of the U.S. market share.
-    Of note, BMW Group’s Mini vehicles again allow the use of 25 percent ethanol blends. The manufacturer states, “Fuels with a maximum ethanol content of 25 percent, i.e., E10 or E25, may be used for refueling.”
-    While neither automaker approves the use of E15, both Mercedes-Benz and Nissan produce some flex fuel vehicle models that are capable of operating on up to 85 percent ethanol blends (E85).

RFA estimates that approximately 25–30 percent of the 230 million vehicles on the road today are clearly approved by the automaker to use E15. Meanwhile, roughly 90 percent of vehicles on the road were built in 2001 or later, meaning they are legally approved by EPA to use E15.

“This analysis demonstrates that automaker acceptance and approval of E15 continues to expand rapidly,” said RFA President and CEO Bob Dinneen. “More than four out of every five new vehicles carries the manufacturer’s explicit endorsement of E15, putting to rest the myth propagated by the American Petroleum Institute that automakers don’t allow or warranty the use of this lower-cost, higher-octane fuel blend. We applaud Hyundai for joining the ‘E15 Club’ with its model year 2017 vehicles, and we’re thrilled to see Mini going above and beyond to offer E25-compatible vehicles. At the same time, we encourage Nissan, Mazda, Subaru and Daimler to get with the times and offer their customers greater freedom and flexibility when it comes to making a fuel choice at the pump.”



Pig Farmers Encouraged to Pay It Forward with #HamsAcrossAmerica

This Giving Tuesday, the Pork Checkoff is encouraging pig farmers to pay it forward with a new holiday campaign called #HamsAcrossAmerica. This first-annual event encourages farmers and others involved in the pork industry to show their appreciation for friends, family and neighbors through the gift of ham – in the form of gifts or donations of ham or ham-based products.

“For pig farmers, volunteering at community events and participating in local fundraisers has always been a part of what makes us who we are,” said Brad Greenway, 2016 America’s Pig Farmer of the Year who is from Mitchell, South Dakota. “Hams Across America allows farmers to not only live the We CareSM ethical principles, but also share their love of the product that they produce.”

Pig farmers are encouraged to extend Giving Tuesday through Dec. 23 with Hams Across America by simply purchasing a gift of ham and paying it forward. Participants are also encouraged to share their pay-it-forward stories on social media using #RealPigFarming and #HamsAcrossAmerica.



Retail Fertilizer Prices Remain Varied

As has been the case in the last few weeks, retail fertilizer prices continue be mixed the fourth week of November, according to fertilizer retailers surveyed by DTN.

Six of the eight major fertilizers slipped lower compared to a month earlier, and again none of these moves were significant. DAP averaged $436 per ton, MAP $445/ton, 10-34-0 $445/ton, anhydrous $465/ton, UAN28 $218/ton and UAN32 $256/ton.

The remaining two fertilizers were slightly higher in price looking back to a month earlier. Neither fertilizer was up any substantial amount. Potash averaged $316/ton and urea was at $328/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.36/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 17%, both DAP and MAP are 20% less expensive and UAN32 is 21% lower. 10-34-0 is 23% lower, UAN28 is 24% less expensive, potash is 25% lower and anhydrous is 26% less expensive compared to a year prior.



Corn Refiners Association Celebrates Commitment to Community in 2016 Annual Report

As we approach International Volunteers Day on December 5, the Corn Refiners Association (CRA) celebrates the commitment of industry employees to their communities by releasing our 2016 Corn Annual: Strengthening the Fabric of Our Nation. The report illustrates the many ways corn refining companies contribute to the vitality, spirit and social fabric of the communities where they operate.

The feeling of connection and spirit of local pride is evident in the ways that the industry gives back to their communities. In the U.S., industry employees volunteered more than 45,000 hours and charitable donations were more than $9 million in 2014.

It’s also heard in the voices that explain the social good brought by the people of the corn refining industry.

“It’s that commitment that they’re making to our community that is, quite honestly, contagious,” says Randy Kuhlman, Chief Executive Officer, Fort Dodge Community Foundation and United Way. “It not only spreads throughout their employees, but it spreads throughout the community in a number of different ways.”

Beyond philanthropic contributions to their local communities, the corn refining industry helps strengthen the fabric of rural America as a strong, stable part of the economy. For every job directly supported by the corn refining industry, an additional 32.6 jobs are added across the U.S. contributing an additional $12.5 billion in incomes. For every $1 in industry sales, an additional $3.54 is added to the U.S. economy.

“Rural areas continue to experience population loss and higher poverty rates than urban areas. With the majority of our facilities located in the Corn Belt, we take our role in America’s rural communities and agricultural economy very seriously,” says CRA President and CEO John Bode. “You see it in the way our companies value their employees and value the relationships with their communities.”



USDA Partners with Farmers, Ranchers to Protect More Than 500,000 Acres of Working Grasslands

Farm and Foreign Agricultural Services Deputy Under Secretary Alexis Taylor today announced the U.S. Department of Agriculture (USDA) will accept more than 504,000 acres that were offered by producers during the recent ranking period for the Conservation Reserve Program (CRP) Grasslands enrollment. Through the voluntary CRP Grasslands program, grasslands threatened by development or conversion to row crops are maintained as livestock grazing areas, while providing important conservation benefits.

USDA will accept more than 2,100 offers totaling more than 504,000 acres across 34 states. Over 70 percent of the acres are from beginning farmers, veterans and underserved producers. About two-thirds of the acres are in counties with the highest threat for conversion. Additionally, nearly 60 percent of the acres are in wildlife priority areas and nearly three-fourths of the acres will have a wildlife-focused conservation plan as part of the operation.

“This 15-year commitment on more than half a million acres demonstrates that voluntary, incentive-based conservation methods benefit producers and help to preserve our natural resources,” said Taylor. “Combining conservation and wildlife benefits, while still supporting livestock production, is a clear example of how agriculture and conservation can go hand-in-hand.”

USDA is also reminding producers that it is still accepting additional offers for CRP Grasslands. The current ranking period that closes on Dec. 16, also includes a new CRP Grasslands practice specifically tailored for small-scale livestock grazing operations to encourage broader participation. Small livestock operations with 100 or fewer head of grazing dairy cows (or the equivalent) can submit applications to enroll up to 200 acres of grasslands per farm. USDA’s goal is to enroll up to an additional 200,000 acres. The new practice for small-scale livestock grazing operations encourages greater diversity geographically and in all types of livestock operation. Small livestock operations are encouraged to contact their local Farm Service Agency office to learn more about this program before Dec. 16 to be considered as part of the current ranking period.

Participants in CRP Grasslands establish or maintain long-term, resource-conserving grasses and other plant species to control soil erosion, improve water quality and develop wildlife habitat on marginally productive agricultural lands. CRP Grasslands participants can use the land for livestock production (e.g. grazing or producing hay), while following their conservation and grazing plans in order to maintain the cover. A goal of CRP Grasslands is to minimize conversion of grasslands either to row crops or to non-agricultural uses. Participants can receive annual payments of up to 75 percent of the grazing value of the land and up to 50 percent to fund cover or practices like cross-fencing to support rotational grazing or improving pasture cover to benefit pollinators or other wildlife.

USDA will select offers for enrollment based on six ranking factors: (1) current and future use, (2) new farmer/rancher or underserved producer involvement, (3) maximum grassland preservation, (4) vegetative cover, (5) environmental factors and (6) pollinator habitat. Offers for the second ranking period also will be considered from producers who submitted offers for the first ranking period but were not accepted, as well as from new offers submitted through Dec. 16.

Small livestock operations or other farming and ranching operations interested in participating in CRP Grasslands should contact their local FSA office. To find your local FSA office, visit http://offices.usda.gov. To learn more about FSA’s conservation programs, visit www.fsa.usda.gov/conservation.



Pilgrim's Pride to Acquire Gold n' Plump for $350 Million

Pilgrim's Pride Corp., a subsidiary of JBS S.A., has announced a definitive agreement to acquire GNP Co. for $350 million in an all-cash transaction.

With production facilities in Gold Spring and Luverne, Minn., and Arcadia, Wis., GNP provides premium branded and custom chicken products with distribution in nearly all 50 states under the Just Bare and Gold'n Plump brands. The company has approximately 400 family farm partners and more than 1,700 employees. The transaction is expected to close during the first quarter of 2017 and remains subject to regulatory review and approval and customary closing conditions.

"The Pilgrim's team is excited to combine the collective strengths of Pilgrim's Pride and GNP Co.," said Bill Lovette, chief executive officer of Pilgrim's Pride. "GNP Co. boasts outstanding state-of-the-art assets in geographic areas where Pilgrim's is not currently present, providing Pilgrim's the opportunity to expand our production and customer bases, while maintaining our high standards for quality service and great-tasting products."

Additionally, Pilgrim's Pride plans to leverage GNP's use of innovative technologies, such as gas stunning, aeroscalding and automated deboning, to enhance its production efficiencies. The addition of GNP's Just Bare product lines joins Pilgrim's existing no-antibiotics-ever and organic production capabilities, strengthening the company's footprint in fast-growing and higher-margin chicken segments.

The addition of GNP's Just Bare product lines joins Pilgrim's existing no-antibiotics-ever and organic production capabilities.

The $350 million purchase price reflects an expected EBITDA multiple of 5.2x, excluding potential synergy gains. Pilgrim's expects to achieve approximately $20 million in annualized synergies and to capture an estimated present value of approximately $28 million in tax savings and a post-synergies EBITDA multiple of 3.9x. The company anticipates the acquisition will be accretive to the diluted earnings per share in 2017.

"Today's announcement is a clear demonstration of Pilgrim's commitment to our growth strategy of disciplined acquisitions that enhance both our portfolio of value-added products and our ability to provide key customers with the high quality products demanded by consumers," Lovette said. "We look forward to welcoming GNP Co.'s team members and family farmer partners to the Pilgrim's team as we continue to position Pilgrim's as the preferred choice of consumers and retail and food service partners across the country."

Pilgrim's Pride produces fresh, frozen and fully cooked chicken products under the Pilgrim's and Country Pride brands. It produces fresh, frozen and fully cooked chicken products under the Pilgrim's and Country Pride brands with distribution primarily through retailers and food service distributors. The company operates chicken processing plants and prepared foods facilities in 12 states, Puerto Rico and Mexico, and employs approximately 38,200 people.



Five Myths of Internal Parasite Control

It’s estimated that the cattle industry loses about $3 billion each year in lost weight gains, poor feed conversion and increased disease because of internal parasites.1 With the financial impact and animal welfare concerns on cattle operations, it is important for producers to understand parasite control, as well as the misconceptions about parasite control.

Here are five parasite control myths that might be putting a producer’s management program at risk.

Myth No. 1: All active ingredients in parasite control products have the same efficacy.
There are different active ingredients and different classes of dewormers, which should be used strategically on an operation for effective parasite control, advises Mark Alley, DVM, managing veterinarian with Zoetis.

Products such as DECTOMAX® Pour-On or DECTOMAX® Injectable provide both extended therapy and good efficacy against both adult and inhibited Ostertagia, the brown stomach worm. However, in populations of cattle where Cooperia, Nematodirus or Haemonchus are an issue, white dewormers such as VALBAZEN® Suspension may be a better selection. It is important that a producer has a discussion with his or her veterinarian or animal health provider to determine which is most appropriate.

Myth No. 2: My animals look fine, so I don’t have a parasite resistance problem.
“Parasitologists agree that no dewormer provides 100% effectiveness against parasites,” said Dr. Alley. “We make the assumption that all parasite control products are 100% effective, but even with 50% kill of parasites, producers will see a clinical improvement in the animals.”

Dr. Alley says producers can’t tell visually if there is a resistant parasite problem in the herd. They need to work closely with their veterinarian to diagnose resistant parasites and establish a strategic deworming program.

Myth No. 3: Parasites cannot withstand winter’s cold temperatures.
“It is a mistake to think it gets cold enough to kill parasites over the winter,” Dr. Alley said.

Parasites can simply overwinter in cattle or pastures. While winter may take its toll on many things, studies demonstrate that infective larvae were able to survive on pastures during winter months.2,3

Myth No. 4: Antiparasitics can be administered to work at a producer’s convenience.
Timing is critical for administering antiparasitic products. Often, producers deworm when it’s most convenient for them, rather than when it’s most effective to control parasites. Dr. Alley recommends year-round parasite control, both in the fall and again in the spring before summer pasture turnout.

Myth No. 5: Dosing to the average weight of the group is adequate.
It’s important for producers to not only match the dewormer to the type of parasite challenge but also to administer each dose per the animal’s calculated weight. Incorrect dosing has been identified as a major contributor to the development of resistant parasites. A common practice is to dose products to the average weight of the herd, rather than to the individual weight of the animal. In this case, half the herd could be underdosed.

For more information about parasite control, please visit with your animal health adviser or Zoetis representative.

DECTOMAX Injectable has a 35-day pre-slaughter withdrawal period. DECTOMAX Pour-On has a 45-day pre-slaughter withdrawal period. Do not use in female dairy cattle 20 months of age or older. Do not use in calves to be processed for veal. DECTOMAX has been developed specifically for cattle and swine. Use in dogs may result in fatalities.

Cattle must not be slaughtered within 27 days after the last treatment with VALBAZEN. Do not use in female dairy cattle of breeding age. Do not administer to female cattle during the first 45 days of pregnancy or for 45 days after removal of bulls.