Wednesday September 22 Ag News

Comparing the Grand Island and Holcomb Meat Processing Plant Fires
Elliott Dennis, UNL Assistant Professor and Livestock Marketing Economist

A packing plant fire occurred at the JBS meat processing plant in Grand Island, Nebraska, on Sunday, Sept. 13, 2021, having an eerie similarity to the Tyson meat processing plant fire in Holcomb, Kansas. Both plants processed about 6,000 head per day, or approximately 6% of total daily beef slaughter. This article aims to explain what some of the possible market reactions would be if the Grand Island fire has similar damage to the Holcomb fire.

Lessons Learned from Holcomb
We learned several lessons from the Holcomb fire that could apply to the Grand Island fire. First, live cattle prices are likely to fall given the now oversupply of harvest-ready cattle relative to processing capacity. Second, wholesale cutouts are likely to increase as retailers seek to make advance purchases on beef. Combined, these will likely widen beef processing margins – something that has been curiously and intensely watched since 2019. The market will look for two signals to regulate this margin: 1) will the damaged plant be rebuilt? And 2) how long will the plant be shut down before it will be fully operational? In the case of the Holcomb fire, it was about one month before plant damage was fully assessed and announced to be rebuilt and four months (Dec. 2019) before it became fully operational. Examining the fed cattle price differentials between the major cattle feeding areas, showed that all areas experienced decreased prices within the first month, about a 10% decline in price relative to prices the Friday before the fire, and were at prices equal to prices the Friday before the fire two months after the fire (see Table 1; Dennis 2020). A similar situation across the different cattle feeding regions could playout for the Grand Island plant fire as well.

Unique Issues with Grand Island Fire
The point of differentiation between the two fires likely lies in available processing capacity pre-fire and the day on which the fire occurred. After the Holcomb fire, Tyson diverted committed cattle (< 14 days) to other plants that had excess capacity. This showed up in increased Saturday harvest levels as plants ran additional shifts. This was in a pre-COVID era where absenteeism was lower, labor relations were better, and there were no increased OSHA protocols in plants due to COVID and its derivatives. JBS will most likely try to do the same in the short run. However, given that the processing industry was already running at strained levels of labor levels, how much they will be able to increase Saturday and Sunday kills without losing more labor is left to be seen. One positive is that JBS recently reached a new labor contract at their Greeley, Colorado, plant which could help lessen concerns about potential labor shortages. Second, the fire also occurred AFTER Labor Day where retailers had already started to back off beef purchases. This should work to lessen the severity of any price jump in the wholesale cutout value as there are fewer concerns about wanting to capture consumers grilling preferences.

Hidden Impacts
The biggest loser in the fire could be feeder cattle producers. The fire occurring after Labor Day should lessen the upward price movement in the cutout, but it puts greater pressure on market-ready cattle to be moved out of pens to provide space for weaned feeder cattle to enter pens. Although the plant fire primarily affected fed cattle, it did influence feeder cattle prices. Feeder cattle have already started to enter feedlots earlier than in previous years as drought and reduced forage production has forced some feeder cattle producers to market feeder cattle earlier. If pens continue to stay full, this could reduce the price feedlots would be willing to pay for feeder cattle. This combined with potentially higher feed grain prices both have the potential for increased downside price movements.

More on this story, including price trends before and after the Holcomb fire, can be found here:  https://cap.unl.edu/livestock/comparing-grand-island-ne-and-holcomb-ks-meat-processing-plant-fires.  



Water for Food Global Forum tackles water and food security in month-long virtual event

The Daugherty Water for Food Institute (DWFI) at the University of Nebraska will host the Water for Food Global Forum in October 2021. Registration is now open and will continue throughout the event. This free, virtual series covers one month of discussions, presentations, workshops and case studies through live sessions and on-demand content. The Forum will convene leading international experts, growers and organizations to tackle issues related to achieving global water and food security and focus on integrating knowledge and practice.

In place of its flagship Water for Food Global Conference, in 2021 the institute is capturing the depth and breadth of its global connections and expertise through a variety of free, virtual events. The Forum will provide an opportunity for individuals with diverse areas of expertise and interest to learn about, collaborate and strategize solutions to pressing issues related to water and food, including those exacerbated by the COVID-19 pandemic.

“While we are disappointed that the global pandemic prevents us from meeting in person this year, we are excited that this virtual event allows for a more diverse audience to contribute to the conversation,” said Peter G. McCornick, DWFI executive director.

Each week will dive into a new topic related to global water and food security including:
    Food systems and nutrition (October 3-9)
    Innovations and entrepreneurship in agriculture and water management (October 10-16)
    Water and nutrient management (October 17-23)
    Climate change and extreme events (October 24-30)

In the first week, multidisciplinary experts will explore the influence that water has on food systems and nutrition on both a global and local scale. This will include a moderated panel discussion on the impacts, innovations and outcomes to come out of the United Nations Food Systems Summit this September.

Week two will dive into innovations and entrepreneurship seen in agriculture and water management. One session will showcase women innovators who are working to solve farming challenges. Other sessions from this week will examine the changing landscapes and methods of managing water around the world, including the topics of smallholder farmers; innovations in irrigation; and ways to evaluate gaps and opportunities for research, service and investment.

In week three, we will take a closer look at the local impacts of water quality and nutrient management. This includes discussions on the economic and human health costs of nitrate pollution; investigating pollution from the ethanol plant in Mead, Nebraska; how to accelerate innovation through collective action; and solutions related to wastewater and its reuse.

The forum will wrap up by discussing the influence of climate change and extreme events on water and food security. Experts will discuss the impacts that extreme weather-related events have on water, food systems and human health. Other sessions feature case studies on climate adaptation.

Event registration, agenda and speaker information is available at go.unl.edu/waterforfood.



 LB396 CREATES NEW OPPORTUNITIES FOR FARM-TO-SCHOOL MEALS

On any given weekend in Nebraska, one can visit 100-plus farmers markets and purchase dozens of varieties of locally grown fruits and vegetables. Or stop by one of hundreds of roadside stands or dozens of you-pick operations. Nebraska grows a lot more than cattle and corn. But most of what Nebraska students eat doesn’t come from the state.

“Research in the last couple years shows that more than 90% (of food) is being imported from outside the state,” said Benjamin McShane-Jewell, an assistant extension educator with Rural Prosperity Nebraska.

However, with Legislative Bill 396, he and others are aiming to change that ratio. Introduced by Sen. Tom Brandt, the Adopt the Nebraska Farm-to-School Program Act reserves funds to create new and promote existing farm-to-school food programs. The bill passed unanimously in May with two goals in mind:
> Provide schoolchildren with fresh, non-processed meals and introduce them to healthy eating habits. This includes field trips to farms, cooking classes, and gardening and composting programs.
> Increase the income of Nebraska farmers.

“There’s $65-$70 million in food purchases made every year just for school programs,” McShane-Jewell said. “That’s a huge under-tapped market for local producers.”

Based in Washington County, McShane-Jewell has worked with the Regional Food Systems division of Rural Prosperity Nebraska for three years. Before that, he established urban agricultural projects, such as community gardens, around the country for 10 years, usually working on a small scale.

“It becomes really tricky when you think about a school district like Lincoln or Omaha, where you’re serving 25,000-50,000 students a day,” McShane-Jewell said. “That quantity becomes difficult to source.”

What a bill like LB396 provides, he said, is funding to organize and establish farm-to-school programs on a statewide scale, which requires extensive coordination.

Creating connections between producers and schools is at the heart of LB396. This is where Sara Smith comes in. As the farm-to-school specialist in the Nebraska Department of Education, Smith’s charge is to organize agriculture programs that connect schools with producers. One such statewide initiative, Nebraska Thursdays, encourages schools to serve locally sourced meals on the first Thursday of each month. Another program, Harvest of the Month, features a different Nebraska specialty crop each month and provides schools with the resources to serve those crops to their students.

“This is all an effort to guide schools toward products that can be grown in Nebraska with the hopes that we will see an increase in purchases from local growers,” Smith said.

“We’ve talked to a lot of buyers; they want to source locally. We’ve talked to local producers; they want to sell to schools,” McShane-Jewell said. “We’re just trying to bridge those gaps.”

One effort to bridge such gaps during the 2021-22 school year is an in-school gardening program. Schools build greenhouses on the grounds, and students are taught about agriculture. The food they produce goes directly to the school’s cafeteria. But students are only one side of the coin.

“In 2022, we’re going to hold trainings for producers across the state,” McShane-Jewell said. “Hopefully that will help them be more confident to reach out to schools and work with them to start producing what (the schools) need.”

While each school’s student body and resources differ, both McShane-Jewell and Smith have high hopes for the future.

“As they say, ‘If you want to reach the top of the trees, you shoot for the moon,’ so I’m a big proponent that we need to go really big on this,” McShane-Jewell said. “There are models out there that set targets for 10% or 15% local. I would love to see Nebraska get really ambitious and think about 50%, 75%, 100% local.

“There’s so much production happening in this state. It’s just: How do we turn the tides toward a different marketplace?”

One immediate step is the Mountain Plains Crunch Off, an eight-state competition celebrating October as National Farm to School Month. Who can encourage the most residents to “crunch” into a piece of fresh produce?

“Nebraska is the reigning champion two years running,” McShane-Jewell said, “so we’re keen to keep that going.”

For more information on the Mountain Plains Crunch Off, visit http://buylocalnebraska.org/nebraska-crunch. For more information on Rural Prosperity Nebraska, visit https://ruralprosperityne.unl.edu.



Smith and Biofuels Caucus Co-Chairs Call Out President Biden on Failed RFS Promises

Today, Congressmen Adrian Smith (R-NE), Dusty Johnson (R-S.D.), and Rodney Davis (R-IL), Co-Chairs of the House Biofuels Caucus, sent a letter urging President Biden to uphold campaign promises he made regarding the Renewable Fuel Standard (RFS).

Recent reports indicate the Biden Administration is taking steps to weaken Renewable Volume Obligations (RVOs) which would reduce the demand for biofuels, an action President Biden strongly condemned under the Trump Administration.

“If your Administration makes the unprecedented move to reopen the finalized 2020 RVO, and strip the demand for billions of gallons, the industry will certainly be devastated,” said the members. “As you stated, “Lip service won’t make up for nearly four years of retroactive damage that’s decimated our trade economy and forced ethanol plants to shutter.” If these rumors are correct, demand for over 5 billion gallons of renewable, clean fuels will be lost.”

In June, members of the Biofuels Caucus raised concerns about rumored plans to circumvent RFS in favor of the oil industry.



Fall Forage Residue Options
– Todd Whitney, NE Extension

Fall harvest provides many valuable forage options for ag. producers. For some growers, early high moisture corn harvest is providing strong basis prices. Others may be harvesting whole plants as corn silage; while still others may be waiting for dry down to sell grain into the cash markets.

For those planning to harvest corn as grain, baled stalks offer another income source along with potential forage stalk grazing. Final corn harvest decisions will likely depend on your harvesting equipment available; cashflow needs; feed inventory; and projected forage needs & supply.

Our Nebraska Extension Forage Team encourages crop managers to consider the following in your economic and forage harvest plans. Since corn leaves detach from the stalks within 1 to 2 months after harvest and may blow out of fields; so timely baling and/or grazing soon after harvest is highly recommended to save your valuable corn leaf residue. UNL research indicates that for every 40 bushels per acre of grain production, corn residue production will average about 1 ton per acre.

Ideally, about 2 tons of residue should be remain in the field after baling corn stalks to reduce erosion. Also, avoid taking residue cover from fields with slopes higher than 5%; or leave at least half the residue cover to reduce soil erosion along with wind and water.

In corn-soybean rotations, corn stalks harvests are recommended every four years to maintain soil health while still providing additional forage income in a grain sales system.

More baling crop residues research information is available on both our cropwatch.unl.edu and beef.unl.edu websites.



NEBRASKA CHICKENS AND EGGS

All layers in Nebraska during August 2021 totaled 8.17 million, down from 8.57 million the previous year, according to the USDA's National Agricultural Statistics Service. Nebraska egg production during August totaled 205 million eggs, down from 214 million in 2020. August egg production per 100 layers was 2,508 eggs, compared to 2,502 eggs in 2020.

IOWA: Iowa egg production during August 2021 was 1.28 billion eggs, down slightly from last month but up 3% from last year, according to the latest Chickens and Eggs report from the USDA's National Agricultural Statistics Service. The average number of all layers on hand during August 2021 was 49.4 million, down slightly from last month but up 5% from the same month last year. Eggs per 100 layers for August were 2,592, up slightly from last month but down 2% from last August.

August Egg Production Up Slightly
United States egg production totaled 9.39 billion during August 2021, up slightly from last year. Production included 8.12 billion table eggs, and 1.28 billion hatching eggs, of which 1.20 billion were broiler-type and 73.9 million were egg-type. The average number of layers during August 2021 totaled 385 million, up 1 percent from last year. August egg production per 100 layers was 2,442 eggs, down slightly from August 2020.
                                    
Total layers in the United States on September 1, 2021 totaled 385 million, up slightly from last year. The 385 million layers consisted of 320 million layers producing table or market type eggs, 62.2 million layers producing broiler-type hatching eggs, and 2.84 million layers producing egg-type hatching eggs. Rate of lay per day on September 1, 2021, averaged 78.8 eggs per 100 layers, up 1 percent from September 1, 2020.



Weekly Ethanol Production for 9/17/2021

According to EIA data analyzed by the Renewable Fuels Association for the week ending September 17, ethanol production slowed by 11,000 barrels per day (b/d), or 1.2%, to 926,000 b/d, equivalent to 38.89 million gallons daily. Production was 2.2% above the same week last year, which was affected by the pandemic, but 1.8% below the same week in 2019. The four-week average ethanol production volume decreased by 0.2% to 922,000 b/d, equivalent to an annualized rate of 14.13 billion gallons (bg).

Ethanol stocks expanded for the first time in eight weeks, rising 0.5% to 20.1 million barrels. Stocks were 0.6% above the year-ago level but 10.6% below the same week in 2019. Inventories built across all regions except the East Coast (PADD 1) and Midwest (PADD 2).

The volume of gasoline supplied to the U.S. market, a measure of implied demand, remained largely unchanged from the prior week at 8.90 million b/d (136.38 bg annualized). Gasoline demand was 4.5% above a year ago but 4.8% less than the same week in 2019.

Refiner/blender net inputs of ethanol ticked 0.1% higher to 899,000 b/d, equivalent to 13.78 bg annualized. Net inputs were 7.2% above a year ago but 3.9% less than the same week in 2019.

The U.S. imported 36,000 b/d of ethanol, or 10.58 million gallons for the week, following two weeks when no imports were reported. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of July 2021.)



USDA Cold Storage August 2021 Highlights

Total red meat supplies in freezers on August 31, 2021 were up 4 percent from the previous month but down 6 percent from last year. Total pounds of beef in freezers were up 4 percent from the previous month but down 8 percent from last year. Frozen pork supplies were up 4 percent from the previous month but down 1 percent from last year. Stocks of pork bellies were down 37 percent from last month and down 44 percent from last year.

Total frozen poultry supplies on August 31, 2021 were down 3 percent from the previous month and down 20 percent from a year ago. Total stocks of chicken were down 3 percent from the previous month and down 20 percent from last year. Total pounds of turkey in freezers were down 2 percent from last month and down 20 percent from August 31, 2020.

Total natural cheese stocks in refrigerated warehouses on August 31, 2021 were down 1 percent from the previous month but up 4 percent from August 31, 2020. Butter stocks were down 7 percent from last month and down 1 percent from a year ago.

Total frozen fruit stocks on August 31, 2021 were up 6 percent from last month but down 6 percent from a year ago. Total frozen vegetable stocks were up 18 percent from last month but down 4 percent from a year ago.



DAP Fertilizer Tops $700 Per Ton for First Time in a Decade

Potash prices rose significantly compared to last month, while the average retail price of DAP reached a 10-year high, according to prices tracked by DTN for the second week of September 2021.

Potash was 6% higher compared to last month. The fertilizer had an average price of $598/ton. The remaining seven fertilizers were all just slightly higher. DTN designates a significant price increase as 5% or more.  Four fertilizers had price increases of 3% compared to last month. MAP had an average price of $776/ton, urea $572/ton, anhydrous $762/ton, and UAN28 $381/ton.  The price of UAN32 increased 2% to $428/ton.  DAP prices increased 1% to $702/ton. The average price of 10-34-0 was fractionally higher at $632/ton. DAP rose above $700/ton for the first time in nearly 10 years. The last time the phosphorus fertilizer's price was this high was the second week of Dec. 2011 when the average price was at $702/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.62/lb.N, anhydrous $0.46/lb.N, UAN28 $0.68/lb.N and UAN32 $0.67/lb.N.

Retail fertilizer prices compared to a year ago show all fertilizers have increased significantly. 10-34-0 is now 39% more expensive, urea is 59% higher, DAP is 62% more expensive, UAN32 is 69% higher, MAP is 73% more expensive, both potash and UAN28 are now 74% higher and anhydrous is 77% more expensive compared to last year.



Soy Checkoff Elevates Value of Farmer Investments Through Soy Hopper

Through their checkoff, U.S. soybean farmers drive innovation beyond the bushel, improve sustainability, create new export markets and deliver a better product to meet end-user needs. That strategic drive and investment is paying off, bringing profits back to the men and women who grow soybeans across the country.

“Through your dollars invested in the soy checkoff, you are accomplishing big things for this extremely versatile commodity,” said Dan Farney, United Soybean Board Chair and soybean farmer from Morton, Illinois. “Our checkoff continues to lead the way by investing in promotion, research, partnerships and education. Those investments differentiate U.S. soy through quality and sustainability, ultimately bringing value to every U.S. soybean farmer.”

But connecting farmers to their checkoff investment isn’t always a simple task.

“Farmers are busy farming,” said Farney. “This is why it’s crucial we proactively connect them to their checkoff in new ways, so they feel confident knowing their dollars are returning value to the farm.”

A new educational effort from the checkoff is doing that — connecting farmers to their investments — so they can see, in real time, how the 78 volunteer farmer-directors who represent them on the national checkoff board continue to build U.S. soy’s reputation across the globe.

Farmers can explore the Soy Hopper, a digital hub with shareable content highlighting results of checkoff investments across market growth, production research and more. Additionally, farmers can subscribe to receive a monthly update about how their checkoff dollars bring a $12.34 return on investment back to the farm by driving demand and preference for U.S. soy.

“The soy checkoff was created by farmers, is run by farmers and serves farmers,” said George Harper, USB director of investor and industry communications who leads the Soy Hopper digital hub. “Farmers contribute their own dollars to the checkoff, and those dollars work to build domestic and global soy demand in animal agriculture, biofuels and other industries that depend on sustainable U.S. soy.”

Through a new “Moving (YOU) Forward” checkoff campaign, farmers can see examples of major demand opportunities for U.S. soybeans.

For example, in export markets, soybean sales to Egypt have increased exponentially by 708%. Furthermore, the U.S. soybean industry is expected to export a record $28.9 billion of soy to markets around the globe this fiscal year.

“These checkoff successes highlight the fact that when farmers pool their resources through a checkoff program, they see significant and measurable returns,” said Harper.

Significant checkoff successes include:
    Soybean meal is the No. 1 protein source in chicken feed because few feed ingredients can match the nutritional composition of soybeans.
    A soy checkoff research partnership with The Goodyear Tire & Rubber Company has led to a multi-decade commitment by Goodyear® to source sustainably produced soybean oil for its tires, with a long-term goal of full petroleum oil replacement in all company products by 2040.
    Demand for soybean oil to produce biodiesel has increased farmer income by 63 cents a bushel.
    One of the soy checkoff’s greatest research successes was assisting in sequencing the soybean genome. This research helped speed up the identification of new, valuable genes that protect and increase yields.
    A $2 million checkoff investment opened the door to a $245 million investment from the federal government and the state of Louisiana to dredge the lower Mississippi River, which will allow more soy to be carried per ship. This project will bring an estimated additional $460 million in revenue to U.S. soybean farmers.

“These successes can all be directly attributed to the personal investments that you, our farmers, make in your checkoff every harvest. And that translates into the competitiveness and longevity that powers U.S. soybeans now and decades ahead,” said Farney.  



USB Joins CFI Coalition for Responsible Gene Editing in Agriculture

The United Soybean Board (USB) has joined the leadership of the Coalition for Responsible Gene Editing in Agriculture, a group of leaders in food, agriculture and science collaborating around the vision of global acceptance and support for gene editing. The coalition is facilitated by The Center for Food Integrity (CFI).

USB is an organizations whose 78 volunteer farmer-directors work on behalf of all U.S. soybean farmers to invest checkoff funds in programs and partnerships that drive soybean innovation and increase markets for U.S. soy.

“It’s an exciting time for soybean farmers, with advancements in gene editing to improve crops and help solve pressing challenges in farming and food production. That includes helping farmers keep pace with the growing demand for healthier, more abundant and affordable food, while using less water, land and other resources,” said Mace Thornton, USB vice president of communications and marketing, and CFI board member. “We look forward to working collaboratively with the broader food system and technology developers to earn trust in gene editing as a solution for issues we face in food production and environmental stewardship.”    

Andy Scott, a soybean farmer and breeder in Hidalgo County, Texas, and USB director, will serve on the Coalition Framework Oversight Committee, responsible for administration and verification processes related to the Coalition’s Responsible Use Framework.

Emily Dustman, USB director of science education, will serve on the Coalition Operations Committee, which leads stakeholder engagement, communication and Coalition administration.

“The success of gene editing hinges on public support. USB is an important contributor, representing the integral role of farmers as coalition members engage in public dialogue about the shared benefits and responsible use of gene editing,” said Charlie Arnot, chief executive officer of CFI. “For more than a decade, we’ve partnered with USB on many initiatives. USB’s active role in the coalition is a natural next step as we work to earn trust in a technology that is vital to agriculture.”

Other members of the coalition include American Seed Trade Association, BASF, Biotechnology Innovation Organization, Corteva Agriscience, Costco, Genus, National Pork Board, Tropic Biosciences and Pivot Bio. Advisors to the coalition represent the Center for Science in the Public Interest, FMI – The Food Industry Association, The Nature Conservancy and United States Department of Agriculture.

The mission of the coalition, which was established in 2016, is to cultivate support for gene editing in agriculture through the development and adoption of trust-worthy guidelines for the responsible use of gene editing, effective stakeholder outreach and engagement, and broad-based involvement and collaboration of those engaged in gene editing.

After a nearly two-year development process and robust stakeholder feedback process, the coalition has developed a Responsible Use Framework, a set of commitments and recommended best practices that demonstrate an organization’s commitment to using gene editing responsibly. The framework includes independent third-party verification of conformance with the framework. The framework is now being shared with interested stakeholders to solicit support and continue the process for implementation.

In addition, the coalition has created a soy-specific communication guide, Gene Editing & Soy: Engage in the Conversation, to encourage an informed dialogue on gene editing in food and agriculture. It includes five specific approaches to trust-earning engagement.  

To develop the guide, the coalition collaborated with universities, associations and others who have conducted research on consumer understanding and attitudes about gene editing. Common threads from this research, along with previous learnings about biotechnology acceptance, provide the foundation for the communication recommendations.  

Materials and information about the coalition are available at https://geneediting.foodintegrity.org/. To learn more about USB visit unitedsoybean.org.



FARM Releases Stakeholder Survey for Version 5.0

The National Dairy Farmers Assuring Responsible Management (FARM) Program today released its Animal Care Version 5.0 Stakeholder Survey. This survey will give dairy farmers, industry stakeholders, and partners an opportunity to provide early input on topics, issues, and potential changes they would like considered for Version 5.0.

“The FARM Program is committed to ensuring any updates or changes made in Version 5.0 reflect the needs and goals of farmers, veterinarians, cooperatives, processors, and others who work every day to provide assurances to the dairy supply chain,” said Karen Jordan, DVM, dairy farmer and chair of the Animal Care Task Force and NMPF Animal Health and Wellbeing Committee. “This survey is just one of the tools we hope can capture an accurate representation of all of those voices ahead of Version 5.0 revisions beginning.”

FARM will use the input from this survey and work with the FARM Farmer Advisory Council, the Animal Care Task Force, the NMPF Animal Health and Wellbeing Committee, and the NMPF Board of Directors to review Version 4.0 of the program and design updates and improvements for Version 5.0, which would come into effect July 1, 2024.

Survey information will be used to inform decisions, although no decisions will be made solely from the responses, which are anonymous. The survey will take approximately 15 minutes to complete and is open to any stakeholders wishing to lend their expertise to the FARM Animal Care Program update.



American Dairy Coalition defends temporary return to Class I ‘higher of’ milk price formula until USDA hearing process evaluates options

There are several key reasons American Dairy Coalition supports a temporary return to the previous Class I milk pricing formula using the ‘higher of’ Classes III or IV, until a USDA hearing process can evaluate other ideas including a change made in the 2018 Farm Bill to an averaging method plus 74 cents, which was implemented in May 2019.

“We know calling for a temporary return to the previous Class I formula -- while various ideas about Federal Milk Marketing Orders (FMMO’s) are sorted out -- isn’t going to happen overnight, but the process needs to begin. We are also looking futuristic and beyond a recent short-term shift and what the futures markets currently show us because a lot of dairy farmers have suffered severe loss of revenue due to milk being removed from the federal orders. Subsequently farmers have lost confidence in the functioning of the FMMOs and question the value of purchasing available risk management programs under the average of pricing formula,” said Laurie Fischer, CEO of American Dairy Coalition about the ADC Board’s passage of a motion to support returning to the ‘higher of’ temporarily until a long-term solution can be examined.

“Decisions need to be made on what is sound economically over the long-term, not short-term. Long-term, using the ‘higher of’ is best economically and provides the proper economic signal. If a decision is made solely on short-term economic gains, then there will be constant flipping back and forth -- a direction the dairy industry too often takes,” said Calvin Covington, retired cooperative CEO and former breed association executive with vast experience in Class I fluid milk markets, multiple component pricing and FMMO order reforms.

“The previous ‘higher of’ milk pricing formula allowed us to participate in risk management strategies with the confidence they could help protect our business from market shocks. Under the new ‘averaging method,’ risk management results are no longer as predictable. So, in addition to living with a milk pricing system that is not as responsive to unexpected market conditions, our experiences over the last 18 months have caused us to lose confidence in using these risk management tools,” said Linda Hodorff of Second Look Holsteins in Wisconsin and Broken Bow Dairy in Nebraska.

Fischer said ADC has been hearing from producers and collaborating in conference calls for over a year with momentum building months ago for this step as a stop-gap measure.

“We have known since June that the wide divergences we saw for many months between Class III and IV are now coming together,” Fischer noted. “The future markets at one point predicted this would happen at the beginning of this year, even late last year, but it never materialized until the July 2021 Class I price was announced, in just two weeks of dairy commodity trade which immediately followed Senator Kirsten Gillibrand’s May 26 announcement that she wanted a hearing on milk pricing.”

That hearing was held last week in the Senate Ag subcommittee on dairy, livestock and poultry, chaired by Sen. Gillibrand. Two hours of discussion with six testifiers provided a multi-faceted short- and long-term view which addressed current challenges with the FMMOs including the Class I change.

During the Sept. 15 hearing, Sen. Gillibrand cited the over $750 million in Class I losses over a 26-month period, a figure confirmed by National Milk Producers Federation and several dairy economists.

“Currently, Class I is benefiting from the new averaging method with the 74-cent adjuster,” Fischer explained. “If we include the small benefit ranging 34 to 69 cents for July through September, the net loss across the 29 months of implementation so far is still $720 million, or the equivalent of 67 cents on every hundredweight of Class I milk shipped since May 2019.”

Looking at today’s milk futures, the Class III and IV gap could stay narrow across the next six to 12 months of contracts -- “but we’re not there yet, and what worries my members is how do they protect their costs of production when they have no way to protect their risk when the market experiences a shock and processors decide to remove milk from the federal orders. Luckily, in the past some processors shared these benefits with their farmer patrons, but unfortunately others didn’t.

“Right now, Class I does benefit from the averaging of milk pricing method, which can max out at 74 cents on the top-side. But if that gap between Classes III and IV widens again, there is no limit to the losses on the bottom-side,” said Fischer.

“The Class I change was made quickly without a hearing process to examine it, and farmers were told it would be revenue neutral…. Meaning it would not harm farmers. This didn’t happen, and farmers ended up being harmed by how this change affected their milk checks and risk management strategies during periods of market stress and volatility when they needed them most,” said Fischer. “Beginning the process to return to the ‘higher of’ method is necessary to protect farmers from future distortions as they navigate uncertain markets."

Fischer said the American Dairy Coalition stands ready to collaborate on long-term solutions to this and other FMMO challenges so these federal orders function as intended for all parties -- producers, cooperatives and processors -- can successfully manage their businesses in a dynamic and changing dairy industry.



National Farmers Union Announces Campaign to Fight Monopolies in Agriculture

Today, National Farmers Union, a national organization advocating on behalf of nearly 200,000 American farm families and their communities, launched Fairness for Farmers. This campaign seeks to rally Americans to urge their Congressional leaders and the Biden administration to take concrete steps to curtail consolidation in agriculture, which negatively impacts farmers, ranchers and consumers. At today’s press conference, NFU President Rob Larew, Montana Farmers Union President Walter Schweitzer, and Minnesota Farmers Union President Gary Wertish, were joined by Montana Senator John Tester and Minnesota Attorney General Keith Ellison, both leaders for strengthening America’s antitrust laws, and protecting working families.

“Today, we launched the Fairness for Farmers campaign. This endeavor has clear goals: to curtail consolidation in agriculture and bust the monopolies, which hurts farmers, ranchers and consumers,” said Rob Larew, NFU President. He added: “We launched Fairness for Farmers because we have a President who is committed to taking on the challenge of fighting consolidation in agriculture. We are all buoyed by President Joe Biden’s Executive Order on ‘Promoting Competition in the Marketplace’—a commitment from his Administration to restore fairness to our economy.”

Fairness for Farmers is a national campaign that seeks to engage farmers and ranchers to fight for an economy that rewards hard work and ensures fair agricultural markets by:
·     Encouraging farmers and ranchers to share videos of their stories online
·     Advertising campaigns, both digital and radio
·     Working with NFU members across the nation to engage local media
·     Building national coalitions to support lawmakers and regulators in the anti-trust space to fight for strengthening our pro-competition laws and regulations
·     Educating lawmakers, the media and the American people about our broken food system that allows monopolies to cheat farmers and ranchers, and charge consumers higher prices at the grocery store

NFU is calling for these solutions:
·     Packers and Stockyards Act (PSA) reform
·     Improving price discovery and ensuring fair and accurate market information
·     Facilitating competition and more diverse market opportunities
·     Reinvigorated antitrust enforcement

Larew added: “I do believe we are in for a fight. The giants who dominate our food and agriculture industry are not going to be toppled without a struggle.” He concluded: “But Farmers Union members, and everyone who joined me today, are not afraid of a fight and are ready to stand up for fairness.”

For more information, please visit the Fairness for Farmers webpage by clicking here or visiting this link: https://nfu.org/fairness-for-farmers/.  



FFAR Research Revolutionizes Hybrid Seed Production
 
Hybrid seeds are produced when crops are cross-pollinated to improve the characteristics of the offspring plants. The large-scale use of hybrid seeds over the past century has contributed to a revolution in agriculture production, both fortifying crops and increasing yields. However, hybrid seeds need to be generated afresh every season. The seed production process is labor-intensive and results in higher costs for farmers. To circumvent this production bottleneck, the Foundation for Food & Agriculture Research (FFAR) awarded a $600,000 Seeding Solutions grant to University of California, Davis (UC Davis) to develop hybrid plants which produce seeds that are genetic clones of the parent plant, substantially reducing their climatic impact and farmers’ bottom lines.
 
Hybrid crop plants produce higher yields than their non-hybrid cousins, but they are expensive to create. To make hybrid maize seeds, for example, farmers must plant alternating rows of male and female plants, with each containing a different desirous trait, and then harvest the resulting hybrid seeds. This process requires 33 percent extra land as well as the use of specialized tractors, which compact the soil and burn fossil fuels. Rice and wheat hybridization, too, rely on cumbersome systems which are highly sensitive to adverse environmental conditions while many crops, including most legumes and sorghum, are not available to farmers as hybrids due to the difficulty of cross-pollinating them.
 
Further increasing costs, high-yielding hybrid strains cannot currently be maintained from season to season. Existing hybrid plants generate a second generation of seeds, but the seeds are not as productive as the first generation because optimal gene combinations are not retained. Thus, the hybridization process must be repeated every season.
 
UC Davis researchers are optimizing newly discovered synthetic apomixis technology to reduce the cost of developing and maintaining hybrid strains. Apomixis is a process in many plants that reproduce asexually, avoiding the genetic variability in the next generation that arises from sexual reproduction. Synthetic apomixis is the application to crop plants that allows hybrids to produce seeds that are clones of the parent plant, with the same high yields. Using genome editing, the research team is introducing apomixis to rice plants and aims to boost the frequency of clone seeds in affected plants from 30 percent to 90 percent. The team also plans to introduce the improved synthetic apomixis technology in maize, which shares many key features with rice and has a large demand for hybrid seeds. Rice and maize provide the majority of calories in the developing world. Incorporating synthetic apomixis into cereal crops, therefore, would go a long way toward sustaining global food security.
 
“Synthetic apomixis is a promising new technology that has the potential to revolutionize the production of hybrid seeds,” said FFAR Executive Director Dr. Sally Rockey. “This project will bridge the critical gap between novel research and commercialization, delivering real benefits to producers.”
 
“This FFAR award provides us a great opportunity to take an exciting new technology to the stage where it can be put to use, to directly benefit seed producers and farmers,” said UC Davis lead researcher Dr. Venkatesan Sundaresan.
 
Syngenta provided $600,000 in matching funds and material support for a $1,200,000 total investment in improving the revolutionary apomixis technology.



State departments of agriculture leaders express need to strengthen emergency food supply networks

Today during the 2021 annual meeting of the National Association of State Departments of Agriculture NASDA members adopted an action item to support and expand emergency food supply networks. Specifically, NASDA members emphasized the importance of ensuring state agriculture departments can utilize new USDA funds as they become available to support their states’ communities.

NASDA CEO Dr. Barb Glenn reflected on the unprecedented challenges the COVID-19 pandemic has presented the food supply system and NASDA members’ responsibility of supporting healthy communities.

“NASDA members are committed to offsetting the effects of the pandemic, and we haven’t forgotten that people and businesses are still recovering. State agriculture departments have proven their integral role in food supply chain resiliency and have provided millions in need with food throughout the pandemic,” Glenn said.

Earlier this year, NASDA developed the NASDA Food Security Toolkit to connect local farmers and ranchers with local food banks and community leaders.

“Partnerships are an important tool needed to combat food security and the effects of COVID-19. When given the resources, state departments of agriculture can implement federal programs at the state level and best meet local objectives and strategies focusing on food insecurity,” Glenn said.



State department of agricultural officials advocate for increased workforce security for the industry

Today during the hybrid 2021 annual meeting of the National Association of State Departments of Agriculture, NASDA members voted to promote agricultural workforce reform. Specifically, NASDA members adopted policy to support amending the H-2A and H-2B visa programs to include year-round workers for the agriculture and forestry industries.
 
NASDA CEO Dr. Barb Glenn praised members actions saying, “Systems that establish a secure, dependable workforce for the agricultural and food industries are necessary to our food supply. An estimated half of the U.S. agricultural workforce is foreign-born, and year-round H-2A and H-2B visas would provide opportunities for these individuals to contribute to the U.S. agricultural economy and earn legal status through continued agricultural employment.”
 
Year-round H-2A visas have never been available before, and their establishment would be transformational for agricultural operations like dairies that currently rely only on temporary labor.
 
“Understanding the demand for labor across the U.S. food system, NASDA will continue to advocate for flexible, efficient visa programs that permit year-round employment for foreign-born agricultural workers, along with other programs that address workforce challenges,” Glenn said.



NASDA members advocate for funding options to support growing hemp industry

Today during the National Association of State Departments of Agriculture 2021 Annual Meeting, NASDA members amended the organization’s policy on the Specialty Crop Block Grant Program. Members voted to advocate for USDA to allow hemp to be designed as both a specialty crop and an agronomic commodity depending its intended use.
 
NASDA’s policy states, “NASDA supports the dual designation for hemp as a specialty crop based on the manner and purpose for which it is grown. NASDA supports expanding the Specialty Crop Block Grant Program funding eligibility to hemp crops with horticultural uses.”
 
NASDA CEO Dr. Barb Glenn expounded on the importance of dual designation for hemp.
 
“Allowing hemp to be designated as both a specialty crop and a traditional commodity recognizes the crop’s up-and-coming nature and assures new farmers will be supported in their decisions to grow the crop for either food, fiber or horticultural use. In addition, designating the crop as eligible for Specialty Crop Block Grant Funding promises that more research will be dedicated to the new industry, laying a strong foundation for the industry to build on,” Glenn said.
 
“As the regulators and stewards of healthy agricultural industries in their states, NASDA members have been the leading voice for supporting the hemp industry since hemp’s inclusion in the 2014 Farm Bill. This action would be another important step in helping hemp achieve long-term sustainability.”



NASDA members vote to emphasize importance of free interstate commerce

Today during the hybrid 2021 National Association of State Departments of Agriculture Annual Meeting, NASDA members voted to support the free flow of interstate trade and reiterated the importance of states’ ability to create regulations that best suit their particular needs.
 
NASDA CEO Dr. Barb Glenn commented on the organization’s policy:
 
“State departments of agriculture are strongest when they can develop regulations and markets based on their state’s unique conditions.  However, to ensure all our states’ agricultural industries thrive, individual states must not impede on each other’s access to interstate commerce,” Glenn said.
 
NASDA’s amended policy now states, “NASDA supports the rights of state governments to establish statutes, regulations or policies regarding the production or manufacture of agriculture products within those states, as those products are defined in Section 207 of the Agricultural Marketing Act of 1946. These statutes, regulations or policies must be constructed in such a way as to allow for the free flow of interstate trade that is afforded by the Commerce Clause of the Constitution of the United States of America.”