Wednesday September 15 Ag News

 Nebraska Leaders Urge Nebraskans to Join the Fight, Say “NO” to Federal Tax Hikes, Regulatory Overreach

Nebraska agriculture and elected leaders rallied together at Husker Harvest Days, the state’s largest farm show, Tuesday, Sept. 14 to urge Nebraskans to join the fight to stop federal proposals to increase taxes on Nebraska family farms, ranches, and businesses, while also sharing opposition to the Biden administration’s plans to undo existing water regulations, which the partners fear could result in expanded federal authority over of private lands and waters.

Nebraska Governor Pete Ricketts, Congressman Don Bacon (NE-2), and representatives from Nebraska Farm Bureau, Nebraska Cattlemen, Nebraska Corn Growers Association, Nebraska State Dairy Association, Nebraska Grain Sorghum Association, Nebraska Soybean Association, Nebraska Pork Producers Association, and the Nebraska Wheat Growers Association united to share concerns during a media event. While unable to attend in person, Sen. Deb Fischer (NE-R), Sen. Ben Sasse (R-NE), Congressman Jeff Fortenberry (NE-1), and Congressman Adrian Smith (NE-3) also offered support for the groups’ efforts via video messages.

“Agriculture is the heart and soul of what we do here in Nebraska. It’s what drives our economy, and yet the Biden Administration seems intent on undermining agriculture and our way of life. Whether it’s the lack of support for a robust Renewable Fuel Standard or the radical 30 x 30 plan, the Biden Administration has not been thoughtful about how to support agriculture. And now they’re doubling down with tax hike proposals and expanding federal control and regulation of our water resources. It’s time for Nebraskans to stand shoulder to shoulder with our farm and ranch families and to push back on this federal overreach,” said Governor Ricketts.

The groups took aim at legislative proposals supported by the Biden administration and members of Congress to increase taxes to offset federal spending, specifically proposals to reduce estate tax exemptions, increase corporate and business taxes, in addition to increasing capital gains taxes by eliminating “stepped-up basis” tax provisions.

“Stepped-up basis is a long-standing and key tax provision that helps family farms and businesses pass from one generation to the next without facing huge capital gains tax bills. Elimination of stepped-up basis threatens the future of family farms and businesses. No farm or business should find itself in the position of needing to sell a part of their land or operation just to pay capital gains taxes,” said Mark McHargue, Nebraska Farm Bureau president.

Lance Atwater, a second-generation farmer from Ayr who serves as the young farmer and rancher representative on the Nebraska Farm Bureau Board of Directors told attendees that his family is in discussions about how to transition the family farm to him and his sister.

“If Congress eliminates stepped-up basis and increases taxes, it’s going to be much harder for my sister and I to transition the farm so it can carry on into the future. Taxing our farm and ranch families more is not what’s going to keep them in business, that’s what will drive them out of business,” said Atwater. “It’s imperative we in agriculture share our stories about how this will be detrimental to our families, our state, and our economy.”

Ken Herz, a cattle producer, and past president of the Nebraska Cattlemen from Lawrence reiterated the devastating impact of eliminating stepped-up basis, having just completed estate planning for transitioning his family operation to his sons.

“Protecting stepped-up basis is critical to protecting the next generation of farmers and ranchers. The economic impact of a repeal of stepped-up basis on family farms upon death and transfer would cause an immediate one-time tax liability equivalent to 280 percent of the operation’s annual income, a tax burden that would be too large for my sons to overcome,” said Herz.

The groups also took aim at the EPA’s plan to undo a President Trump era “Navigable Waters Protection Rule”, which replaced a much maligned “Waters of the U.S.” Rule (WOTUS) proposal. The groups previously helped defeat WOTUS which reflected a massive expansion of federal power over private lands and waters by expanding the definition of “navigable waters” to include puddles and ditches that would have subjected virtually every landowner to additional federal permitting and regulatory requirements.

“When I ran for Congress in 2015, WOTUS was one of the top two or three issues I’d hear about in Nebraska. EPA was attempting to call ditches ‘rivers’, and puddles ‘lakes’ to take away farmers’ ability to use their land. Under the Trump administration we were able to fix that, but this new Administration is taking us back to the future, back to the bad. We can’t undermine agriculture,” said Congressman Don Bacon.

Andy Jobman, a fifth-generation farmer from Gothenburg and president of the Nebraska Corn Growers Association called regulatory overreach from the Administration and EPA’s efforts to redo current water regulations “troubling”.

“I did not think we’d be here talking about “Waters of the U.S.” once again, but yet here we are. I think many in agriculture find it insulting that a federal agency thinks that agriculture producers in Nebraska, the number one irrigation state in the nation, need their help managing water. It would be an incredible overreach for the federal government to consider regulating the puddles and ephemeral ditches that run for short times during rain events,” said Jobman.

The groups actively encouraged Nebraskans to help support efforts to stop federal tax hikes and revisions to the water rule by urging Nebraskans to sign the Nebraskans for Tax Truth coalition petition supporting reasonable tax policy at www.nebraskansfortaxtruth.org. Nebraskans for Tax Truth is a coalition formed by the Nebraska Farm Bureau and the NE Chamber.

Nebraskans were encouraged to help stop EPA’s water revision efforts by visiting the Common Sense Nebraska coalition’s Facebook page. Common Sense Nebraska is a wide-ranging coalition of Nebraska-based entities and organizations that formed in opposition to the 2015 EPA WOTUS Rule.



ALFALFA WINTERIZATION AND FROST CONCERNS
– Brad Schick, NE Extension Educator

We’ve already discussed when the last cutting of alfalfa should occur, but what about cold snaps and winterization?

When alfalfa experiences a non-killing frost, the lowest areas of a field may still be susceptible to damage. A killing frost usually occurs if the temperature is 24-29°F for approximately 4 to 6 hours whereas a non-killing frost would be a temperature of 30°F to 32°F.

So what does frost mean for cutting? For non-killing frosts, there will be some damage to the tips of the alfalfa as well as some curled or wilted leaves. These plants will continue to growth well as fall progresses, but the quality will decline after each non-killing frost event. It is fine to cut after a non-killing frost, however, be sure that there has been ample winterization because regrowth will come from the crown buds and use the energy already stored for winter.

In a killing frost situation, cutting will need to take place soon after as the quality will quickly decline due to damage to the plant cells. If grazing, watch out for bloat; and this is only recommended if feed is needed.



POLLS: PANDEMIC AFFECTED NEBRASKANS’ MENTAL HEALTH, FINANCES, CONSUMERISM

Residents across the state have felt the impacts of the COVID-19 pandemic over the past year in terms of their physical health, mental health, work, and consumer habits, according to the University of Nebraska–Lincoln’s 2021 Nebraska Rural and Metro Polls.

The majority of Nebraskans surveyed, 61%, indicated the pandemic affected life overall a fair amount or great deal. Poll results suggest some of these effects on health, wellness and finances were experienced differently across demographic groups, by region, and between rural and urban communities.

Across the state, in both rural and metropolitan communities, about a quarter of respondents (25% in rural areas and 23% in metro areas) said someone in their household contracted COVID-19. Eighteen percent of rural respondents reported friends or family in their community dying of COVID-19, compared to 13% of metro respondents.

“With the rural population historically being a bit older and COVID initially hitting older adults harder, it is not surprising that this shows up as a difference in the poll,” said Cheryl Burkhart-Kriesel, associate professor and extension specialist at Nebraska.

The pandemic took a toll on several quality-of-life factors. Most respondents in both metro and rural areas said their socialization with others was disrupted by COVID-19 (84% in metro areas, 68% in rural areas). Fifty-one percent of metro respondents and 40% of rural respondents said their mental health was affected. In the northeast region, 46% of residents said their mental health was impacted, compared to about one-third in the southeast and north-central regions.

Statewide, the pandemic appeared to financially affect those with the lowest incomes the most. About four in 10 respondents with household incomes under $40,000 said their financial health was impacted by the pandemic, compared to 20% of persons with incomes of $100,000 or more in rural areas or $75,000 or more in metropolitan areas. Survey respondents in both the Panhandle and northeast regions were more likely than those in other regions to say their financial health was affected at least a fair amount.

Rural respondents working in production, transportation or warehousing appeared to be hit hardest economically by the pandemic. These respondents were most likely to report that someone in their household was temporarily laid off, had their hours reduced or returned to work after being laid off temporarily.

“This mirrors national trends,” Burkhart-Kriesel said. “It also dovetails with the poll results that show those with lower incomes were more affected financially by the pandemic. Production, transportation and warehousing can be entry-level positions at the lower end of the pay scale.”

Participants were asked whether internet service affected their ability to work, study, socialize or attend school during the pandemic. Fewer than one in 10 in both rural and metro areas reported being limited by internet service at home.

Many Nebraskans reported adopting new consumer behaviors during the pandemic, such as shopping online, using self-service banking, ordering food from a restaurant for delivery or curbside pickup, and videoconferencing with friends and relatives.

“Many respondents also report they are likely to continue these behaviors going forward,” said Becky Vogt, manager of the Rural Poll. “Businesses that continue to adapt and offer these new delivery methods will be poised to meet these demands in the future.”   

Steve Schulz, associate professor of supply chain management at the University of Nebraska Omaha, said these changes have dramatically impacted the state’s supply chains, adding that “the infrastructure and workforce in Nebraska will need to evolve in order to meet the needs of consumers in the future.”

This year, 1,568 rural Nebraskans completed the Nebraska Rural Poll (a 26% response rate), and 1,305 urban residents completed the Nebraska Metro Poll (a 21% response rate). The polls asked participants about their experiences with the pandemic, their health and well-being, views about their community, and trust in institutions and media.

The Nebraska Rural Poll, now in its 26th year, is sent to 7,000 households annually in rural communities across the state. In 2021, an additional 7,000 surveys were distributed to Nebraskans in metropolitan areas to capture experiences and perceptions across the entire state.

The Rural Poll is the largest annual poll gauging rural Nebraskans’ perceptions about policy and quality of life. The margin of error for the Rural Poll is plus-or-minus 2%; the margin of error for the Metro Poll is plus-or-minus 3%. Complete results are available at https://ruralpoll.unl.edu. The university's Department of Agricultural Economics conducts the poll with funding from Rural Prosperity Nebraska and the Institute of Agriculture and Natural Resources. The Nebraska Business Development Center at the University of Nebraska Omaha provided funding to expand the survey to the Omaha and Lincoln metropolitan areas.



Webinar Invitation: USDA Hogs and Pigs Report Analysis

You’re invited to register for our next webinar for pork producers featuring expert insights and analysis on the quarterly USDA Hogs and Pigs Report that will be released on September 24.

Guest analysts include:  
    Dr. Steve Meyer — Partners for Production Agriculture
    Dr. Scott Brown — University of Missouri
    Len Steiner — Steiner Consulting Group
    John Nalivka — Sterling Marketing

Webinar: Quarterly USDA Hogs and Pigs Report Analysis

Friday, September 24, 2021
3:30 p.m. CT
Click to Register... https://pork.zoom.us/webinar/register/WN_tfcrjModR-GF9-5AvHRMvQ.  



Applications Due Soon for Pork Quality Assurance Advisor Certification Session

The application deadline for the Iowa Pork Industry Center's next Pork Quality Assurance Advisor certification session is approaching, and those interested in attending should submit their application soon. The session date is Friday, Oct. 8, and the application deadline for this virtual session is Friday, Sept. 24.

The sessions are organized by Chris Rademacher, Iowa State extension swine veterinarian. The session, including the exam, will take approximately five hours to complete.

“All of the material will be presented through a Zoom session and that access information will be shared with participants closer to the session date," he said.

Qualification information is available on the two-page application form, which is available as both a fillable pdf document and a word document on the certification page of the IPIC website.

Applicants may use either version. There is a five-person minimum, and no individual spot is guaranteed until the application is approved and specific payment is accepted by IPIC. The cost is $85 per person and includes all materials and online access. The session begins at 9 a.m. Central Time.

Five hours of CE credit have been approved by the Iowa Board of Veterinary Medicine for this session.



FAPRI Updates Farm Income Forecast
Food & Agriculture Policy Research Institute, University of Missouri

Higher commodity prices contribute to a sharp increase in U.S. net farm income in 2021. Under current policies, farm income could drop again in 2022, as government payments decline and production expenses continue to rise.

This report utilizes commodity supply, demand and price projections from the FAPRI-MU baseline update released in early September 2021 (FAPRI-MU Report #04-21, available at www.fapri.missouri.edu). Historical data are from USDA and include the revision to farm income accounts released by the Economic Research Service (ERS) on September 2, 2021.

These baseline estimates reflect policies in place in late August 2021. It utilizes ERS estimates that farmers will receive about $18 billion in 2021 from pandemic-related programs such as the Coronavirus Food Assistance Program (CFAP), the Pandemic Assistance for Producers (PAP) initiative, and the Paycheck Protection Program (PPP). No further ad hoc assistance is assumed for 2022 and subsequent years, nor do these current-policy projections include any payments that might result from prospective legislation.

Given the assumptions of the analysis, here are a few highlights of the results:
• Projected 2021 net farm income reaches the highest level since 2013. Relative to 2020, a sharp increase in receipts from sales of crop and livestock products more than offsets the impact of higher production expenses and reduced government payments.
• At $122 billion, projected 2021 net farm income exceeds that reported by ERS by several billion dollars. FAPRI-MU and ERS estimates of 2021 livestock sector receipts, government payments and production expenses are similar, but FAPRI-MU estimates higher receipts for corn, soybeans and other crops.
• Total projected government spending on farm-related programs reaches a record $52 billion in fiscal year (FY) 2021. Spending on pandemic-related programs accounts for most of the outlays. Spending on 2018 farm bill commodity and crop insurance programs account for less than one-third of total expenditures on the selected programs in FY 2021.
• Under current policies, government outlays drop to $22 billion in FY 2022, and government payments to farmers fall from $29 billion in calendar year 2021 to $6 billion in 2022. Conservation programs account for most 2022 govern-ment payments.
• Projected market prices for several crops peak in the 2021/22 marketing year. As a result, feed grain and oilseed mar-ket receipts decline after 2021, but remain well above the levels of 2020.
• In contrast, receipts for cattle, dairy and poultry all continue to increase each year. Hog receipts jump in 2021 with sharply higher barrow and gilt prices and then fall back in 2022 as prices moderate.
• Higher costs for feed, purchased livestock, fertilizer and other farm inputs raise farm production expenses by $27 billion in 2021, and a smaller increase is projected for 2022.
• In 2022, net farm income declines by $23 billion and net cash income falls even more sharply. Reduced government payments and higher production expenses explain the decline, as there is little net change in farm receipts.
• In later years, projected net farm income remains fairly steady in nominal terms at just under $100 billion each year. After adjusting for inflation, real net farm income declines each year, and the projected value in 2026 is similar to that in 2019.
• Rising asset values and slower growth in debt reduce the sector’s debt-to-asset ratio in 2021 and 2022, temporarily reversing the trend of previous years. Lower projected farm income halts the rise in farm real estate values in 2023, and the debt-to-asset ratio again begins to increase.

In contrast to the 2021 FAPRI baseline prepared earlier this year, these estimates do not consider market uncertainty. Small proportional changes in market receipts or production expenses can dramatically change the outlook for net in-come.

See the report here:  https://www.fapri.missouri.edu/.  



Weekly Ethanol Production for 9/10/2021

According to EIA data analyzed by the Renewable Fuels Association for the week ending September 10, ethanol production scaled up by 14,000 barrels per day (b/d), or 1.5%, to 937,000 b/d, equivalent to 39.35 million gallons daily. Production was 1.2% above the same week last year, which was affected by the pandemic, but 6.6% below the same week in 2019. The four-week average ethanol production volume decreased by 1.0% to 924,000 b/d, equivalent to an annualized rate of 14.16 billion gallons (bg).

Ethanol stocks drew down by 1.9% to 20.0 million barrels, a 14-week low. Stocks were 1.1% above the year-ago level but 13.9% below the same week in 2019. Inventories tightened across all regions except the Midwest (PADD 2).

The volume of gasoline supplied to the U.S. market, a measure of implied demand, dropped 7.5% to a 14-week low of 8.89 million b/d (136.31 bg annualized). Gasoline demand was 4.9% above a year ago but 0.5% less than the same week in 2019.

Refiner/blender net inputs of ethanol declined 0.9% to 898,000 b/d, equivalent to 13.77 bg annualized and the lowest volume since the start of May. Net inputs were 6.3% above a year ago but 0.8% less than the same week in 2019.

There were zero imports of ethanol recorded for the second consecutive week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of July 2021.)



Retail Fertilizer Prices Climb Slowly as Shutdowns Hint at Shortages

Retail fertilizer prices continued to show small increases the first week of September 2021, according to sellers surveyed by DTN. However, it's been four weeks since any fertilizer posted significant price changes, which DTN designates as 5% or greater.  

All eight major fertilizers were higher compared to a month earlier, with potash increasing the most. It was up 2% to $575 per ton. The remaining seven fertilizers saw price increases of 1% or less. DAP had an average price of $699/ton, MAP $757/ton, urea $558/ton, 10-34-0 $631/ton, anhydrous $750/ton, UAN28 $371/ton and UAN32 $422/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.61/lb.N, anhydrous $0.46/lb.N, UAN28 $0.66/lb.N and UAN32 $0.66/lb.N.

Retail fertilizer prices compared to a year ago show prices for all fertilizers have increased significantly. 10-34-0 is now 38% more expensive, urea is 55% higher, DAP is 61% more expensive, both potash and UAN32 are 67% higher, MAP 70% more expensive, UAN28 is 72% higher and anhydrous is 73% more expensive compared to last year.



NMPF Cooperative Leader Spotlights Need for Class I Pricing Changes at Senate Hearing

Congress must do additional work to ensure dairy farmers are fairly compensated for losses rooted in a change to the pricing formula for Class I milk, a leader of Agri-Mark Cooperative and a member of NMPF’s Economic Policy Committee said today in a hearing called by Senate Agriculture Committee dairy subcommittee chair Sen. Kirsten Gillibrand (D-NY).

The hearing focused on issues related to milk pricing and the Federal Milk Marketing Order system, which has shown strains during the COVID-19 pandemic due in large part to flaws in the current Class I mover and its ripple effects through dairy revenues. The pandemic “has created an even greater urgency to revisit orders,” said Catherine H. de Ronde, vice president for economic and legislative affairs for Agri-Mark, based in Middlebury, VT, in her testimony. “Negative PPDs had milk checks looking incredibly bizarre, de-pooling at a level never-before seen became a new phenomenon for many. The change to the underlying Class I mover was a key catalyst of these outcomes.”

The 2018 Farm Bill changed the Class I mover, which determines the price of fluid milk under the Federal Milk Marketing Order system, at the urging of dairy processors who sought greater price predictability. The change contributed to substantial market volatility last year and has led to an estimated $750 million in losses for farmers compared to the previous Class I formula. Without a fix, dairy farmers will permanently bear unfair and unnecessary price risk compared to processors during times of unusual market volatility.

USDA plans to mitigate last year’s losses somewhat through its Pandemic Market Volatility Assistance Program, which will reimburse farmers for $350 million of those losses. But that initiative distributes payments unevenly, requiring further remedies to equitably fill the gap for producers of all sizes.

“The National Milk Producers Federation appreciates the work of Senators Gillibrand and Hyde-Smith for today’s initial examination of crucial milk pricing issues,” said Jim Mulhern, president and CEO of NMPF. “Dairy farmers have done their best to navigate this ongoing crisis, aided in part by necessary disaster assistance. But without equitable assistance, many family dairy farmers across the nation will needlessly struggle from the effects of the Class I mover change they’ve already felt. And without a change in the mover, we can only expect these struggles will recur.”

Gillibrand leads the Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security. Sen. Cindy Hyde-Smith (R-MS) serves as the subcommittee’s Ranking Member.



House Ag Comm Chair Lauds Protection of Stepped-Up Basis in Tax Package

House Agriculture Committee Chairman David Scott of Georgia issued the following statement lauding the protection of stepped-up basis in the newest version of the tax package released by the House Ways and Means Committee:

“I have been working tirelessly to ensure that stepped-up basis is protected, and I am very pleased that the package released does not impact the benefit’s operation,” said Chairman David Scott.

“The preservation of stepped-up basis will allow family farms and ranches to continue from generation to generation while also protecting them from significant tax burdens. I want to thank the Members of the Agriculture Committee who spoke out on this issue for continuously advocating for our agriculture producers. I also want to thank Ways and Means Committee Chairman Richard Neal and Tax Subcommittee Chairman Mike Thompson for listening to our concerns and the concerns of our family farmers, ranchers and foresters,” Chairman David Scott continued.



Tomorrow is National Teach Ag Day

National Teach Ag Day, a component of the NAAE National Teach Ag Campaign, Thursday, September 16.  This year’s webcast celebration will be hosted at the National Association of Agricultural Educators’ office in Lexington, Kentucky.  They will celebrate the profound impact of agriculture teachers through the Teach Ag website and on our social media accounts.

The National Teach Ag Campaign is sponsored by the CHS Foundation, Corteva Agriscience, Growth Energy, and BASF.



Red Angus Association of America Approves Gene-Edited Traits for Animal Registration

The Red Angus Association of America (RAAA), a leading progressive breed organization for seedstock beef cattle in the United States, announced today they will provide herdbook registry of Red Angus animals carrying gene-edited traits for heat tolerance and coat color. Both trait approvals by RAAA emanate from specific genetic alterations designed and submitted by Acceligen, a technology company pioneering commercialization of gene-edited food animals.  

Acceligen has already bred and registered animals that express a trait known for better tolerance to tropical and sub-tropical heat. Black-to-red gene edits have also been made on multiple calves that will be born soon. These traits are a part of Acceligen's business portfolio that focuses on providing opportunities to the global cattle industry for better genetic management of animal well-being and health.

RAAA recognizes the efficacy of this advanced technology to provide its breeders with new opportunities along with an enhanced and expanded gene pool. Red Angus is the first beef breed organization to accept gene-edited animals into their registry, recognizing the potential benefits they can bring to the breed. Tom Brink, CEO of RAAA, explained, "In considering the future, we see an opportunity to accelerate the Red Angus breed's genetic progress by selectively allowing gene-edited animals into our population. The technology has been proven to be both safe and effective, and for traits such as the slick hair coat and black to red, there is a chance to speed up the introduction of useful, naturally-occurring genes and genetic combinations that would take many generations to accomplish through traditional breeding efforts."

According to Acceligen CEO, Dr. Tad Sonstegard, "Working with the Red Angus Association provides a prime opportunity to boost purebred breeding programs via desirable traits and overall breed improvement outcomes that could take decades through classical breeding methods. These traits also demonstrate how genetics can solve problems ranging from carbon footprint to biodiversity, which are topics we are all concerned about relative to the beef production value chain."

During the breeding process, Acceligen makes changes to the candidate animal's genome that are identical to those that occur naturally in other cattle breeds. Accessing Acceligen's breeding platform allows producers to introduce important traits in a single generation to rapidly achieve the same historically safe and effective outcomes of any conventional breeding program. Acceligen also de-risks the process of commercialization for breeders and commercial producers by providing complementary efforts to obtain regulatory clearance on gene-edited traits in cattle. At this time of pre-commercial acceptance by RAAA, both heat tolerance and coat color traits require final regulatory decisions from the U.S. Food and Drug Administration. Acceligen is currently working with FDA for trait commercialization.



CP's Acquisition of KCS Back on Track

(AP) -- The path is now clear for Canadian Pacific's $31 billion acquisition of Kansas City Southern railroad to move forward after Canadian National dropped out of the bidding war Wednesday.

The deal could still face tough scrutiny from regulators at the federal Surface Transportation Board, which hasn't approved any major railroad mergers since the 1990s, bus KCS shareholders will be set to get paid once shareholders of both companies and Mexican regulators approve regardless of what the STB ultimately decides.

The $31 billion deal includes 2.884 CP shares and $90 in cash for each shareholder and the assumption of roughly $3.8 billion in debt.

"Our path to this historic agreement only reinforces our conviction in this once-in-a-lifetime partnership," said CP President and Chief Executive Officer Keith Creel. "We are excited to get to work bringing these two railroads together."

Canadian Pacific triumphed in the bidding war even though it offered less than Canadian National's $33.6 billion bid because federal regulators wouldn't let CN set up a voting trust to acquire and hold Kansas City Southern during their prolonged review. Canadian National will receive $1.4 billion in breakup fees for its trouble in the deal that has gone back and forth since CP and KCS first announced their merger agreement in March. CP will reimburse KCS for those breakup fees under the terms of their deal.

Canadian National CEO JJ Ruest said his railroad will focus on "profitable growth and opportunities for excellence" in its operations. CN had faced pressure in recent weeks from a major investor to abandon the deal and focus on its own performance.

The London-based TCI fund, which owns about 5% of CN's stock, has already announced plans to call a special meeting to nominate four new directors who would help choose a new CEO for the railroad. TCI didn't immediately comment Wednesday on CN's decision to drop the deal.

For more than two decades the railroad industry has been stable, with two railroads in the Western United States -- BNSF and Union Pacific -- two in the Eastern United States -- CSX and Norfolk Southern -- Kansas City Southern in the Midwest and the two Canadian railroads that serve part of the United States. Regulators have said that any merger involving two of the largest railroads generally needs to enhance competition and service the public interest to get approved.

The only deal involving one of those major railroads to be completed since the 1990s was when Warren Buffett's Berkshire Hathaway bought BNSF in 2010, but that deal faced less scrutiny because it wasn't a merger of two of the big railroads.

Kansas City Southern made an attractive acquisition target because it was the smallest of the major railroads and the only one with direct lines into Mexico, so the new combined railroad will benefit from expanding trade across North America under the new trade agreement Canada, Mexico and the United States all signed. KCS President and Chief Executive Officer Patrick J. Ottensmeyer said the deal will "benefit KCS and our employees by enabling us to become part of a growing and truly North American continental enterprise."



Australia Predicts Record Farm Production

Australia is forecast to reap record farm revenues this year despite pandemic challenges, a mouse plague and a trade dispute with China.

According to the Associated Press, Australian farmers are expected to sell 73 billion Australian dollars ($54 billion) in produce in the current fiscal year that started in July thanks to favorable weather and grain prices inflated by drought in the United States and Canada, according to a report released on Tuesday by the Agriculture Department’s research branch.

That compares with AU$66 billion ($49 billion) earned in 2020-21. That was also a good year for agriculture that followed a prolonged, crippling drought and devastating wildfires across southeast Australia.

The latest forecast is the first time the Australian Bureau of Agricultural and Resource Economics and Sciences has forecast a return exceeding AU$70 billion ($51 billion).

The biggest contribution to growth in agricultural exports would be crops, which are forecast to rise by 17% to AU$30 billion ($22 billion).

A mouse plague across much of the eastern Australian cropping land reduced grain and hay production toward the end of the last fiscal year.