Thursday March 17 Ag News

Rural Mainstreet Economic Index Rises to Healthy Level: 4 of 10 Bankers Project Upturn in 2022 Farm Income
 
The Creighton University Rural Mainstreet Index (RMI) climbed in March from February’s healthy reading and remained above growth neutral for the 16th straight month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.         

Overall: The region’s overall reading for March jumped to 65.4, from February’s 61.5. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“A 25% gain in farm commodity prices over the past 12 months, near-record-low short-term interest rates and growing agricultural exports have underpinned the Rural Mainstreet Economy,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.  

Farming and ranching: The region’s farmland price index decreased to a still strong 78.0 from February’s 78.8. March’s reading represented the 18th straight month that the index has moved above growth neutral.   

Even with the rapidly rising farm input costs, 42.3% of bank CEOs expect 2022 net farm income to expand from 2021’s healthy level. Only 11.5% of bankers anticipate a decline in 2022 net farm income from 2021’s value. The remaining 46.2% of bankers expect no change in 2022 net farm income from 2021 levels.

Approximately 38.4% of bankers expect Russia’s invasion of Ukraine to have negative impacts on net farm income. Of bankers projecting negative impacts, damages are expected to be higher for livestock producers than for grain producers.

Farm equipment sales: The March farm equipment-sales index increased slightly to 72.2 from 72.0 in February. This was the 16th straight month that the index has advanced above growth neutral. Readings over the past several months are the strongest string of monthly readings recorded since Spring 2011.

Despite surging farm input costs and global tensions, over 96% of bankers indicated that they had not tightened credit standards for farmers. Furthermore, 42.3% of bankers expect net farm income to expand for 2022. Only 11.5% of bankers anticipate a decline in net farm income with the remaining 46.2% forecasting no change in 2022 net farm income from 2021 levels.

Below are the state reports:
Nebraska: The Nebraska RMI for March slipped to 62.3 from February’s 62.6. The state’s farmland-price index fell to 78.2 from last month’s 80.0. Nebraska’s new-hiring index rose to 63.5 from 62.9 in February. U.S. Bureau of Labor Statistics data indicate that over the last 12 months, Nebraska’s Rural Mainstreet has experienced a solid 2.0% gain in nonfarm employment (non-seasonally adjusted) compared to a lower expansion of 0.9% for urban areas of the state.  

Iowa: The March RMI for Iowa fell to 52.0 from 62.0 in February. Iowa’s farmland-price index expanded to 80.3 from February’s 79.8. Iowa’s new-hiring index for March dropped to 59.6 from 62.7 in February. U.S. Bureau of Labor Statistics data indicate that over the last 12 months, Iowa’s Rural Mainstreet has experienced a solid 1.8% gain in nonfarm employment (non-seasonally adjusted) compared to a higher expansion of 2.6% for urban areas of the state.

The survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It provides the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005 and launched it in January 2006.



County Farm Bureaus to Host District 40 Candidate Forum

Those interested in learning more about the candidates running for the District 40 seat in the Nebraska Legislature are invited to participate in a candidate forum sponsored by the Antelope, Cedar, Dixon, Holt, Knox, and Pierce County Farm Bureaus.

The candidate forum will be held:
Thursday, March 31 at 7:00 p.m. (CST) at Mary’s Restaurant, 108 S. West Street, Plainview, NE 68769.

The forum will provide an opportunity for the public to meet and ask questions of the candidates who are seeking to represent the district in the Nebraska Legislature. The event is free and open to the public. Doors will open 30 minutes before the forum begins to enable attendees the opportunity to meet the candidates and submit written questions for consideration at the forum. The forum will last 90 minutes.

All of the filed candidates seeking to represent District 40 have been invited to participate, including Barry Dekay of Niobrara, Robert Johnston of Clearwater, Keith Kube of Crofton, and Mark Patefield of Laurel.

Legislative District 40 encompasses all of Antelope, Cedar, Holt, Knox Counties, and portions of Dixon and Pierce Counties. The seat is currently held by Sen. Tim Gragert, who is not seeking re-election.



Midwest Dairy elects new leadership

Allen Merrill from Parker, South Dakota, was re-elected as chair of Midwest Dairy during the organization’s annual meeting held this week in Scottsdale, Arizona.  Elections for the Corporate board officer team also were held. Charles Krause, Buffalo, Minnesota, was re-elected as first vice chair; Dan Hotvedt, Decorah, Iowa, was re-elected as second vice chair; Rita Young, Plainview, Minnesota, was newly elected as secretary and Barb Liebenstein, Dundas, Minnesota, was reelected as treasurer.

New members elected by their divisions to the Midwest Dairy Corporate board include:
• Jonna Schutte – Iowa
• Shirley Hulinsky – Minnesota
• Joyce Racicky – Nebraska
• Lilah Krebs – North Dakota
• Marv Post – South Dakota

Newly elected division board officers and new division board members include:
Nebraska Division
• Chair – Mary Temme, Wayne
• Vice chair – Joyce Racicky, Mason City
• Secretary/Treasurer – Jodi Cast, Beaver Crossing
• Larry Schuster, Pickrell, was seated as a new member of the Nebraska Division board.

Iowa Division
• Chair – Dan Hotvedt, Decorah
• Vice chair – Lee Maassen, Maurice
• Secretary – Jonna Schutte, Monona
• Treasurer – Larry Shover, Delhi
• Dennis Mashek, Calmar, was seated as a new member of the Iowa Division board.



Delegates From Iowa Recognized For Five Years Of Service

The state of Iowa was well-represented at the U.S. Grains Council’s (USGC) 19th International Marketing Conference and 62nd Annual Membership Meeting in February, as a trio of representatives from the Iowa Corn Promotion Board (ICPB) were honored for their half-decade of membership with the Council.

Kelly Nieuwenhuis, Jerry Maier and Stan Nelson were celebrated for their continuing contributions to the Council’s mission of developing markets, enabling trade and improving lives.

Nieuwenhuis is the president of the ICPB and operates a 2,800-acre corn and soybean farm with his two brothers. An interest in global trade led him to the Council, where he has been able to engage with the agricultural industries of other countries as a member of the Ethanol Advisory Team (A-Team).

“We need the U.S. Grains Council to make the connections and have its offices around the world,” Nieuwenhuis said. “Importers like to meet and get to know the people they’re dealing with, and I don’t see how we could do that without the Council.”

Nieuwenhuis encourages other growers to get involved in not only their local farming communities, but to look outwardly for national and global opportunities to make a positive impact on U.S. export markets.

“I’m just a family farmer who chose to get involved,” Nieuwenhuis said. “It’s so important for farmers to have a voice, and I truly believe more of them should be involved in commodity organizations to promote what they produce.”

Jerry Maier is the district two representative on the ICPB and operates a 1,000-acre corn and soybean farm in northern Iowa. He has contributed to the Asia A-Team as well as the Innovation and Sustainability A-Team during his time with the Council.

Spreading the word about what the Council does for American farmers has been an important goal for Maier since he started learning more about its mission and services.

“A lot of our fellow farmers think that a foreign country just calls a farmer in Iowa to order 10 million metric tons of corn,” Maier said. “They don’t realize that there are a lot of steps to get to that point.”

Maier added that his participation with the Council has encouraged him to get his two sons involved in commodity organizations to further the development of his farm.

Like Maier, Nelson also got an early start in collaborative associations as a young grower in Iowa. He hails from the ICPB’s ninth district and is currently a member of the Trade Policy A-Team. Nelson joined the Young Member Committee of the Iowa Farm Bureau 40 years ago, and he has continued to be active in various groups since then.

Passing along solid information and the feelings of his fellow farmers to other collaborators at the Council has been a focal point for him since he joined the Council.

“We all have strengths and weaknesses and I like to share perspectives with the people I meet when we’re talking about the markets,” Nelson said. “That’s an opportunity for me to talk with them about what Iowa Corn and the Council are doing. There are a lot of moving parts in this industry.”

The Council thanks Kelly, Jerry and Stan for their service to the organization for the past five years and for many more to come!



Iowa Farmers Union Opposes CO2 Pipeline Use of Eminent Domain

The Iowa Farmers Union, a grassroots organization fighting for family farmers, rural communities, and sustainable agriculture for more than 100 years, opposes the use of eminent domain to facilitate any of the three carbon dioxide pipelines proposed to cross Iowa.

The IFU membership is on record supporting biofuels as a first step to a more climate-friendly transportation system. It is important to acknowledge that several aspects of biofuels production mean they are not a long-term solution, not the least of which is their carbon footprints. However, pipelines and deep earth burial are not the only or best solution (but will only perpetuate an unsustainable system). New technologies for carbon capture and removal are being developed literally on a daily basis. Most of these make the carbon or CO2 reusable for other purposes and require much less energy. Most importantly, there are viable solutions that do not require transporting a dangerous product through pipelines. leaders said in a statement Wednesday.

This country is built on the supremacy of property rights, which can only be abridged for uses deemed to provide significant public benefit. These pipelines are being built by outside interests and financiers who hope to exploit tax benefits for their personal gain (which will also leave Iowa). Their claims of providing public benefit fail to rise to the level to justify the use of eminent domain. If pipeline developers are unable to negotiate satisfactory agreements with landowners in their respective paths, they should abandon these projects, IFU leaders said.

The track record of other pipelines in Iowa has shown that instead of providing public good, they cost farmers millions in lost revenue; construction cause long-term damage to soil health; drainage system disruptions are often ongoing; crop yields suffer long term; and property values are lowered. In addition, these pipelines will carry an extremely deadly compound that poses imminent danger if it leaks for all life, plus creating very serious danger for emergency personnel.

Because there is almost no public benefit and because the right to secure our property is so important, the Iowa Farmers Union is asking the Iowa Utilities Board to deny the use of eminent domain for these pipelines.



USDA Updates Eligibility for Spot Market Hog Pandemic Program

The U.S. Department of Agriculture (USDA) has clarified the definition of a spot market sale and hog eligibility under the Spot Market Hog Pandemic Program (SMHPP), which assists producers who sold hogs through a spot market sale from April 16, 2020, through Sept. 1, 2020. Hog producers will also now be required to submit documentation to support information provided on their SMHPP application. USDA’s Farm Service Agency (FSA) will accept applications through April 29, 2022, which is an extension of the April 15, 2022, deadline previously set for the program.  

USDA is offering the SMHPP in response to a reduction in packer production due to the COVID-19 pandemic, which resulted in fewer negotiated hogs being procured and subsequent lower market prices. The program is part of USDA’s broader Pandemic Assistance for Producers initiative and addresses gaps in previous assistance for hog producers.

“Since opening signup for the Spot Market Hog Pandemic Program, we have heard from stakeholders and interested parties who have expressed concern and confusion about eligibility criteria, particularly as they related to the definition of a spot market sale and the definition of an eligible hog,” said FSA Administrator Zach Ducheneaux. “We have clarified the intent and scope of this program to target assistance to hog producers who were hard-hit by the pandemic but have not been included in other forms of assistance. In updating the SMHPP, we are working to provide new, broader, and more equitable opportunities for farmers, ranchers and producers.”

SMHPP Program Updates
When the pandemic disrupted normal marketing channels, including access to packers, producers sold their hogs through cash sales to local processors or butchers, direct sales to individuals and third-party intermediaries, including sale barns or brokers. The use of third-party intermediaries was the only available marketing alternative for many producers and are now included in SMHPP. The only direct to packer sales that are eligible for SMHPP are those through a negotiated sale. Hogs sold through a contract that includes a premium above the spot-market price or other formula such as the wholesale cut-out price remain ineligible. Hogs must be suitable and intended for slaughter to be eligible. Immature swine (pigs) are ineligible.

FSA will now require documentation to support the accuracy of information provided on the FSA-940 Spot Market Hog Pandemic Program application, including the number of hogs reported on the application that were sold through a spot market sale and how the price was determined for the sale.

SMHPP payments will be calculated by multiplying the number of head of eligible hogs, not to exceed 10,000 head, by the payment rate of $54 per head. To ensure SMHPP funding availability is disbursed equitably to all eligible producers, FSA will now issue payments after the application period ends. If calculated payments exceed the amount of available funding, payments will be factored.  

Applying for Assistance 
Eligible hog producers can apply for SMHPP by April 29, 2022, by completing the FSA-940, Spot Market Hog Pandemic Program application, along with required supporting documentation. Producers can visit farmers.gov/smhpp for examples of supporting documentation, information on applicant eligibility and more information on how to apply. 

Applications can be submitted to the FSA office at any USDA Service Center nationwide by mail, fax, hand delivery or via electronic means. To find their local FSA office, producers should visit farmers.gov/service-locator. Hog producers can also call 877-508-8364 to speak directly with a USDA employee ready to offer assistance. 



Spot Market Hog Pandemic Program Eligibility Broadened
NPPC

USDA’s Farm Service Agency (FSA) today announced it has modified the Spot Market Hog Pandemic Program (SMHPP) eligibility requirements. The program — announced last year — provides payments to pork producers who made spot market transactions between April 16 and Sept. 1, 2020.

The clarified eligibility requirements expand the agency’s interpretation of “spot market sales” and “sale to a packer” to better reflect the nontraditional types of transactions made during that period, including sales to dealers, cull markets, meat lockers, intermediaries and others.

“The changes to SMHPP are certainly welcome and producers thank FSA for its commitment to clarifying the parameters of the program,” said NPPC President Terry Wolters. “Producers forced into spot market sales have been excluded from many of the previous recovery programs, and these modifications will hopefully lead to these funds making it into the right hands.”

During the covered period, many producers were forced onto the spot market after meat processors were unable to meet their obligations due to COVID-19-related shutdowns. As a result, live hog prices decreased dramatically with reduced demand from nearly all traditional buyers. While producers showcased their resiliency in finding destinations for many of their hogs, most were sold well below the cost of production. SMHPP was set to relieve these producers with $50 million in available funds, but some confusion regarding which hogs were eligible led to a program pause in December 2021.

In its clarification, FSA noted that spot market hogs of a harvest-ready weight are eligible for SMHPP relief even if sold to intermediaries, meat lockers or other nontraditional recipients. Additionally, FSA noted that all disbursements will be made after the application period concludes and, should the number of payouts exceed the funding available, the $54/head payment may be reduced so that all eligible recipients can be included in the program. Producers will need to submit all necessary supporting documentation to FSA ahead of the newly extended April 29, 2022, deadline. If producers already submitted SMHPP claims, they will be able to amend their applications if necessary.

“2020 was a hard year for every pork producer but particularly those who partially or fully were forced onto the spot market by force majeure claims,” Wolters said. “NPPC looks forward to continuing its work with FSA to ensure an efficient and effective disbursement for SMHPP.”

FSA and NPPC were quick to engage one another following initial reports of issues with the program this past December. NPPC provided an outline of proposed eligibility changes based on feedback from producers. USDA Secretary Tom Vilsack noted in his testimony to the House Agriculture Committee on Jan. 20 that changes would likely be coming in March. A month later, FSA announced an initial extension of the program, pending adjustments.



Production Costs Outpacing Commodity Prices

The cost of growing crops could outpace revenue for many farmers in 2022, making it more difficult to break even despite rising commodity prices and increased demand both domestically and globally. The American Farm Bureau Federation is launching a series of Market Intel articles examining rising farm production expenses.

The first report concludes that farm production costs are likely to increase 6% in 2022, which follows a 12% increase in 2021. This continues a trend stretching back several years. Since 2013, farmers have seen almost all production expenses increase. For example, livestock and poultry expenses have gone up 46% and marketing, storage and transportation costs have increased 59%.

Farmers are seeing a number of production cost increases including:
-    Rising fertilizer, seed and chemical prices, which now make up to 17.5% of on-farm expenditures
-    Rising fuel and energy prices, exacerbated by uncertainty due to the Russia-Ukraine conflict
-    Increased costs of labor, both on-farm and for agribusinesses serving farms
-    COVID-19 disruption of labor markets and production

“The rising prices for fuel, fertilizer and other supplies create an unwelcome counterforce to higher commodity prices,” said AFBF President Zippy Duvall. “Higher prices for crops are getting a lot of attention right now and of course help farmers balance the books, but when expenses are rising just as quickly or even outpacing revenue, the financial gains evaporate. Right now, there are serious concerns about whether farmers will be able to access the supplies they need to put a crop in the ground.”

AFBF is working to ensure the administration and Congress understand the severity and potential implications of increased production costs and the limited availability of some supplies.



Nutrien Increasing Potash Production in Response to Global Supply Uncertainty

Nutrien Ltd. announced this week that in response to the uncertainty of potash supply from Eastern Europe it plans to increase potash production capability to approximately 15 million tonnes in 2022, an increase of nearly one million tonnes compared to previous expectations. The majority of additional volume is expected to be produced in the second half of the year.

“Our thoughts and sympathies are with those impacted by the crisis in Ukraine and we hope for an immediate de-escalation of this conflict. The impacts of this conflict extend beyond Eastern Europe as a disruption in supply of key agriculture, fertilizer and energy commodities could have implications for global food security,” said Ken Seitz, Nutrien’s Interim President and CEO.

“Nutrien is responding to this period of unprecedented market uncertainty by safely expanding potash production to help provide our customers with the crop inputs they need. We continue to closely monitor market conditions and will evolve our long-term plans to ensure we utilize our assets in a safe and sustainable manner that benefits all our stakeholders,” added Mr. Seitz.

Nutrien’s 2022 potash production is expected to increase by nearly 20 percent compared to 2020 and account for more than 70 percent of global production added over this period. We expect a small increase in our 2022 capital expenditures and will be hiring additional employees across our network of low-cost potash mines in Saskatchewan.

We will provide a further update on our outlook and 2022 full-year guidance in our first-quarter 2022 earnings release in early May.



U.S. Soy Growers Approve Annual Resolutions

Commodity Classic concluded on Saturday, March 12, with members of the American Soybean Association approving the organization’s annual policy resolutions. This process is critical, as it updates and builds on existing resolutions and helps lead the organization in addressing current and emerging priorities for the U.S. soy industry.

The resolutions approved for this year highlighted soy policies including supply chain, crop protection and a strong safety net for the 2023 Farm Bill. Among the approvals are resolutions supporting:

-    An improved Title I farm safety net in the next farm bill and continued support for crop insurance
-    Sufficient in person staffing at USDA county offices
-    Policies that ease supply chain delays and obstructions
-    The use of sound science, grower engagement, and flexibility on pesticide Endangered Species Act mitigations
-    Biofuels enhancement programs in the 2023 Farm Bill
-    Increased USDA investment in soybean research proportionate to soybean’s farmgate receipts
-    Engagement in negotiations for new free trade agreements, including in the Indo-Pacific region
-    Promotion of U.S. soy as the most sustainably produced soy in the world
-    Inclusion of soy and bio-based products in the next farm bill and beyond
-    Federal agencies working together to improve broadband spectrum licensing decisions and cyber security
-    Full funding of the Environmental Quality Incentives Program (EQIP)
-    Definition of biodiversity that encompasses the wide variety of beneficial species tied to agriculture
-    Energy development on private land that protects farmers’ interests
-    A reaffirmation of producers’ right to repair their equipment and machinery
-    The national soybean checkoff, which helps develop new uses and expands markets

The ASA resolutions process kicked off in January and was shaped by input from states, ASA board members and other farmer-leaders and staff who serve on ASA’s advocacy teams covering various soy policy areas. Recommendations are thoroughly reviewed by resolution subcommittees, which hone the language that is voted on by delegates. The process is conducted in multiple stages to allow ample input, revisions, and improvements from ASA membership across the soy states and culminates in the final voting process, held on the final day of Commodity Classic.



Over 1,000 Farmers and Biofuel Supporters Tell President Biden: Use More Ethanol to Lower Gas Prices!

More than 1,000 farmers, workers in the ethanol industry, and other biofuel supporters sent a clear message to President Biden today: The solution to record-high gas prices is to immediately allow broader use of lower-cost ethanol blends like E15.

“Simply allowing gasoline blenders to sell E15 year-round would instantly help moderate prices at the pump and deliver relief to American families,” the letter states. “Today, E15 is selling for 10-25 cents per gallon less than standard gasoline, meaning year-round use of the fuel would save the average American household at least $125-200 on its annual gasoline bill. Those savings would accrue immediately while also providing energy, environmental and economic benefits for the long-term.”

The letter, signed by farmers and biofuel supporters from 30 states, stated “Biofuels like ethanol are underutilized in today’s fuel market, largely because outdated government regulations handcuff market access and deny consumers choice at the pump.” The signers of the letter specifically urged President Biden to take emergency action to allow the uninterrupted sale of E15 throughout the upcoming summer.

“We stand ready to unleash the power of American agriculture to enhance our nation’s energy and environmental security,” the letter concluded.



 Court Denies Stay Motion on Chlorpyrifos Rule

On Tuesday, the Eighth Circuit Court of Appeals denied a motion from ASA, state soybean associations, and other agriculture groups, to stay EPA’s rule revoking tolerances for chlorpyrifos while the underlying lawsuit proceeds. Practically, the denial of the stay motion would allow the agricultural ban on chlorpyrifos to remain in effect for at least the 2022 growing season.

In response to the denied motion, Brad Doyle, ASA president and a soybean grower from Weiner, Arkansas, said, “This is certainly a disappointing decision, but it in no way affects the underlying strength of our claims. EPA’s career scientists found these 11 uses to be safe and yet the agency arbitrarily revoked tolerances all the same. We look forward to discussing with our coalition partners next steps in the case considering this development.”

ASA and other ag groups brought a lawsuit against EPA in February over the agency’s decision to revoke tolerances after EPA’s career scientists found in its December 2020 proposed interim decision on chlorpyrifos and its final rule revoking tolerances that chlorpyrifos did not pose a dietary risk of concern. At least 11 crops, including soybeans, were identified as safe for continued use by EPA, and yet the agency still moved forward to revoke all food and feed tolerances, effectively banning the chemistry for agriculture. ASA has and will continue to strongly advocate that EPA develop and stand by science and evidence-based regulatory decisions, including those for chlorpyrifos.



Dairy Joins Problem Solvers Caucus Roundtable on Supply Chain Snarls

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) joined the U.S. House of Representatives’ bipartisan Problem Solvers Caucus in a roundtable today to discuss additional steps Congress could take to address the ongoing export supply chain crisis facing American exports, including dairy.

Jaime Castaneda, executive vice president for policy development and strategy for USDEC and NMPF, spoke during a panel discussion moderated by Reps. Jim Costa (D-CA) and Dusty Johnson (R-SD) to identify the challenges exporters are facing in securing container and vessel space, unprecedented congestion, and record fees to ship products to international customers.

“A conservative estimate of the supply chain challenges for dairy exporters in 2021 is over $1.5 billion in higher direct costs, reduced value, and lost sales,” Castaneda noted in his remarks. “If this continues, we risk losing ground to our competitors in highly competitive foreign markets, which has ripple effects on the paychecks of American dairy farmers and the thousands of workers who support the export supply chain.”

“The Problem Solvers Caucus is known for its laser-like focus on delivering practical legislative solutions. We’re proud to be part of that process today in identifying additional areas where Congress can act to help alleviate the supply chain snarls that have been limiting U.S. dairy producers’ ability to export,” said Jim Mulhern, president and CEO of NMPF. “We thank Representatives Costa and Johnson for their continued leadership on advancing bipartisan solutions to bring about some much-needed relief to American dairy and agricultural exporters.”

“Last year proved to be a very difficult and unsustainable environment for U.S. dairy exporters, as supply chain challenges risked American agricultural exporters’ reputation as reliable suppliers. I have heard directly from customers their intent to switch suppliers to our competitors solely because of these congestion issues,” said Krysta Harden, president and CEO of USDEC. “We want to thank Representatives Costa and Johnson for their bipartisan leadership in leading today’s discussion on these issues and for their invitation to be part of today’s discussion. Their work continues to be essential to American farmers and the entire agricultural value chain.”

Other organizations speaking at the event included the American Trucking Association, National Retail Federation, Agricultural Transportation Coalition, and the National Association of Manufacturers.