Friday January 20 Cattle on Feed + Ag News

 NEBRASKA CATTLE ON FEED UNCHANGED

Nebraska feedlots, with capacities of 1,000 or more head, contained 2.60 million cattle on feed on January 1, according to the USDA’s National Agricultural Statistics Service. This inventory was unchanged from last year.

Placements during December totaled 470,000 head, down 7% from 2021.

Fed cattle marketings for the month of December totaled 470,000 head, down 1% from last year. Other disappearance during December totaled 10,000 head, unchanged from last year.



IOWA CATTLE ON FEED REPORT

Cattle and calves on feed for the slaughter market in Iowa feedlots with a capacity of 1,000 or more head totaled 620,000 head on January 1, 2023, according to the latest USDA, National Agricultural Statistics Service – Cattle on Feed report. This was down 2 percent from December but up 3 percent from January 1, 2022.

Placements of cattle and calves in Iowa feedlots with a capacity of 1,000 or more head during December totaled 84,000 head, down 20 percent from November and down 1 percent from December 2021.

Marketings of fed cattle from Iowa feedlots with a capacity of 1,000 or more head during December totaled 92,000 head, down 2 percent from November but unchanged from December 2021. Other disappearance from feedlots with a capacity of 1,000 or more head in Iowa totaled 2,000 head.



United States Cattle on Feed Down 3 Percent
    
Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.7 million head on January 1, 2023. The inventory was 3 percent below January 1, 2022. The inventory included 7.03 million steers and steer calves, down 4 percent from the previous year. This group accounted for 60 percent of the total inventory. Heifers and heifer calves accounted for 4.65 million head, down 1 percent from 2022.

On Feed, By State - (1,000 hd - % Jan 1 '22)
Colorado ......:                1,040           92             
Iowa .............:                  620          103              
Kansas ..........:                2,390           96             
Nebraska ......:                2,600          100            
Texas ............:                2,770           95          

Placements in feedlots during December totaled 1.80 million head, 8 percent below 2021. Net placements were 1.75 million head. During December, placements of cattle and calves weighing less than 600 pounds were 455,000 head, 600-699 pounds were 435,000 head, 700-799 pounds were 415,000 head, 800-899 pounds were 304,000 head, 900-999 pounds were 105,000 head, and 1,000 pounds and greater were 90,000 head.

Placements by State (1,000 hd - % Dec '21)
Colorado .......:                      145            88            
Iowa .............:                       84              99             
Kansas ..........:                       440            98          
Nebraska ......:                      470            93              
Texas ............:                      350            79            

Marketings of fed cattle during December totaled 1.74 million head, 6 percent below 2021. Other disappearance totaled 54,000 head during December, unchanged from 2021.

Marketings by State (1,000 hd - % Dec '21)
Colorado .......:                   140           82              
Iowa .............:                    92           100            
Kansas ..........:                   370            86                
Nebraska ......:                   470            99                
Texas ............:                   380            96           



Private Pesticide Training Offered by Zoom for 2023
Wayne Ohnesorg - Extension Educator

Nebraska Extension will be offering three private pesticide applicator trainings via Zoom in March and April. Each one will have a different agricultural area of focus, including corn, soybean and pasture.

Several different steps must be met to attend these trainings.
        Pre-registration will be required. Registration can be completed at the following links:
            March 8 at 9:30 a.m.: Corn and Soybean https://go.unl.edu/patcornsoybeanmarch8
            March 21 at 1:30 p.m.: Pasture https://go.unl.edu/patpasturemarch21
            April 4 at 6:30 p.m.: Corn and Soybean https://go.unl.edu/patcornsoybeanapril4

        Training materials will need to be picked up at a county extension office PRIOR to training.
        Nebraska Department of Agriculture paper will need to be filled out and submitted when picking up training materials.
        The training fee of $50 will need to be paid when picking up training materials.
        Attend and participate in the training session where you have registered.
        A photo ID must be presented during the training session.
        A working web camera must be on for the duration of the training.

No certification will be initiated unless all seven requirements are completed. Individuals are encouraged to contact their local extension office first to see if training materials are available.

Each training will offer individuals the opportunity to pick one of the special topics. Those offered are:

March 8: Corn and Soybean
    Tar Spot in Corn
    Weather Considerations for Planting Spraying
    Insect Soybean Defoliation

March 21: Pasture
    Thistle ID and Management
    Eastern Red Cedar Management
    Small Sprayer Calibration

April 4: Corn and Soybean
    Chemigation Application Uniformity
    Weather Considerations for Planting Spraying
    Sprayer Technology Update

For questions regarding the trainings, contact one the organizers below:
        Mitiku Mamo, Nebraska Extension in Dixon County, 402-584-2234
        Wayne Ohnesorg, Nebraska Extension in Madison County, 402-370-4040
        Luan Oliveira, Nebraska Extension in Burt County, 402-374-2929
        Aaron Nygren, Nebraska Extension in Saunders County, 402-624-8030
        Amy Timmerman, Nebraska Extension in Holt County, 402-336-2760
        Jennifer Weisbrod, Nebraska Extension Pesticide Safety Ed. program coordinator, 402-472-1632
        Todd Whitney, Nebraska Extension in Phelps County, 308-995-4222



Legislation encourages streamlining of food truck permitting, inspection process

With up to 625 political subdivisions developing their own unique rules and regulations for mobile food units, supporters of a bill introduced in the Nebraska Legislature say it's time to bring consistency to the inspection and permitting process.

Legislative Bill 740, introduced by Sen. Tony Vargas, seeks to offer a fresh set of solutions to a problem that has puzzled lawmakers for years.

"The barriers that our food truck owners are faced with in Nebraska are unacceptable,” Vargas said. “As lawmakers, we should be doing everything we can to support our small business owners. I am honored to continue fighting for this important piece of legislation."

An interim legislative study, conducted by the Center for Rural Affairs as part of Legislative Resolution 328, found that mobile food unit entrepreneurs are navigating a permitting process unlike any other professional industry. Center Policy Director Johanthan Hladik said the process is designed for brick-and-mortar restaurants, not mobile food units.

“We came away from this research very surprised by the almost limitless variety of rules and regulations being established by cities, counties, and health departments across the state,” Hladik said. “As every business owner knows, it is extraordinarily difficult to succeed when you are subject to a different set of regulatory requirements in every community you operate in.”

Under state regulations, all food establishments, including mobile food units, must first acquire an initial permit from the State of Nebraska. Additionally, they need an annual health inspection permit, which four organizations—the Nebraska Department of Agriculture (NDA) and three autonomous county health departments in Douglas, Hall, and Lancaster counties—have the authority to issue.

With no reciprocity agreements between those entities, Hladik said the cost of complying can add up.

“LB 740 helps the state's three largest health departments establish a shared set of regulations and encourages them to enter into reciprocity agreements so food truck operators will know what to expect when operating within those three different jurisdictions,” he said.

The bill also asks the NDA to host a registry listing the ordinances or requirements of every municipality in Nebraska that chooses to regulate mobile food units and to develop a pre-inspection checklist so food truck operators have clear guidance as they prepare for their first inspection.

“With so many different regulations in place across Nebraska, food truck operators often spend hours on the phone trying to reach city clerks just to get a sense of what municipal ordinances exist and what their terms might be,” Hladik said.

If passed, Nebraska would join other state legislatures in responding to the growing popularity of the mobile food businesses by modernizing their laws to eliminate redundancy and simplify regulations.



NRD Legislative Conference Brings Together Elected Leaders, Highlights Partnerships

In preparation for another legislative session, the Nebraska Association of Resources Districts host their annual Legislative Conference to highlight partnerships and discuss natural resources policy at the Lincoln Embassy Suites Jan. 24-25, 2023.

The two-day conference brings together Natural Resources Districts (NRDs), elected officials and public-private partners integrally involved in conservation, technology and policymaking. The conference also provides attendees an opportunity to learn how Nebraska’s NRDs work with ag producers, state and federal agencies, and members of the public to protect Nebraska’s natural resources.

Gov. Jim Pillen will kick off the event Tuesday, Jan. 24, followed by a presentation on the South Platte River Compact and discussion of proposed legislation of interest to the NRDs. During the evening Senators Reception, NRD leaders will meet with state senators to discuss natural resources challenges and successes in the districts.

The conference continues Wednesday, Jan. 25, with breakout sessions for attendees, including:
    The Nebraska Department of Natural Resources and Drought: Planning and Preparedness around Disaster
    Lower Loup NRD Nitrate Vulnerability Model
    The Human Dimension of Conservation
    Nebraska Watershed Aquifer Virtual Education System (WAVES)
    Simplified Solutions for Compounded Complexity in Nitrogen Management
    Niobrara River Water Right Purchase
    Groundwater Data Management: Lessons Learned Using a Dashboard and Cloud-based Customized Software Solutions

More than 350 natural resources stakeholders are expected to attend the conference, which is presented by Nebraska’s Natural Resources Districts with a range of local and national sponsors including HDR, JEO Consulting Group, LRE Water, Olsson, Nebraska Department of Natural Resources, The Daugherty Water for Food Global Institute, The Nebraska Water Center, Houston Engineering, Union Bank and Trust, Valley Irrigation and EA Engineering, Science and Technology. Online registration and a detailed agenda are available on the Nebraska Association of Resources Districts’ website: www.nrdnet.org.



NEBRASKA CHICKENS AND EGGS

All layers in Nebraska during December 2022 totaled 6.80 million, down from 8.22 million the previous year, according to the USDA's National Agricultural Statistics Service.

Nebraska egg production during December totaled 161 million eggs, down from 205 million in 2021. December egg production per 100 layers was 2,371 eggs, compared to 2,487 eggs in 2021.



IOWA CHICKEN & EGGS REPORT

Iowa egg production during December 2022 was 1.04 billion eggs, up 3 percent from last month but down 18 percent 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 December 2022 was 40.9 million, up slightly from last month but down 16 percent from the same month last year. Eggs per 100 layers for December were 2,552, up 2 percent from last month but down 2 percent from last December.



December Egg Production Down 6 Percent

United States egg production totaled 9.12 billion during December 2022, down 6 percent from last year. Production included 7.83 billion table eggs, and 1.29 billion hatching eggs, of which 1.19 billion were broiler-type and 100 million were egg-type. The total number of layers during December 2022 averaged 374 million, down 5 percent from last year. December egg production per 100 layers was 2,435 eggs, down 1 percent from December 2021.                                     
All layers in the United States on January 1, 2023 totaled 373 million, down 5 percent from last year. The 373 million layers consisted of 306 million layers producing table or market type eggs, 63.0 million layers producing broiler-type hatching eggs, and 3.83 million layers producing egg-type hatching eggs. Rate of lay per day on January 1, 2023, averaged 78.2 eggs per 100 layers, down 1 percent from January 1, 2022.



Organic No-Till Production Guide Provides Useful Information for Farmers

Organic producers looking to increase benefits from a no-till system now have a guidebook to walk them through the process.

The Iowa State University Extension and Outreach publication “Organic No-Till Production” https://store.extension.iastate.edu/product/16633 provides a “how-to” for organic no-till production in Iowa, which utilizes a rolled down cover crop to facilitate weed suppression, with the commercial crop drilled, planted or transplanted into the rolled mulch. The publication offers an overview of different rolling/crimping systems, an economic outline of costs and returns, and provides producers with the resources they need to secure potential funding from the USDA-NRCS cost-share programs supporting organic no-till.

More producers are investigating organic no-till production in Iowa, with best results coming from the rolled rye/soybean system. In order for the system to work successfully, the amount of cover crop biomass is extremely important. Research recommends at least 8,000 lbs. per acre of rolled rye biomass to create a thick enough mulch to block sunlight to the weeds, allowing the crops to better compete with the weeds.

“We see great benefits from organic no-till in relation to soil quality improvements,” said Kathleen Delate, organic specialist with Iowa State University Extension and Outreach. “The challenge remains to ensure adequate rolled rye biomass to effect ample weed management to obtain competitive yields.”



NEW Cooperative Scholarships – Apply Today!

The NEW Cooperative Foundation annually provides scholarships to undergraduate students pursuing degrees in agriculture. We are proud to offer two scholarships in 2023. Deadline to apply for both scholarships is March 10, 2023.

NEW Cooperative Ag Scholarship
NEW Cooperative Foundation awards approximately eight $2,000 one-year scholarships annually to local students pursuing a career in agriculture while attending college full-time. Applicants must be a member of NEW Cooperative or the dependent of a NEW Cooperative member or full-time employee.

Applicants shall be a full-time student that has been accepted into an accredited two-year college or four-year university, pursuing an agriculture-based degree. High school seniors as well as college freshmen, sophomores, or juniors are eligible to apply. Recipients are chosen by an independent selection committee.

Bob Wallentine Memorial Ag Business Scholarship
NEW Cooperative is pleased to establish the Bob Wallentine Memorial Scholarship, awarding one $4,000 scholarship to a full-time student pursuing an Agricultural Business degree. Wallentine served as General Manager of NEW Cooperative from its inception in 1973 until his retirement in 1996. He cared deeply for the farmers and employees he worked with and was inducted into the Iowa Cooperative Hall of Fame in 2006.

Applicants must be a member of NEW Cooperative or the dependent of a NEW Cooperative member or full-time employee. Applicants shall be a full-time student that has been accepted into an accredited two-year college or four-year university, pursuing an Agricultural Business degree. High school seniors as well as college freshmen, sophomores, or juniors are eligible to apply. Recipients are chosen by an independent selection committee.

Learn more at www.newcoop.com/scholarships.  



Heartland Cooperative Scholarship Programs

Single Scholarship Program
Heartland Co-op is pleased to partner with Iowa State University to offer a $700 academic scholarship to students who successfully complete and pass the Individual Project for Cooperatives - Iowa State – Econ 332.Course.

Heartland Co-op has established this scholarship in partnership with Iowa State University to educate future agricultural leaders about the importance of cooperatives in the agriculture world today.

This scholarship is one way we highlight our commitment to give back to the agriculture field and to support students working toward an agricultural career.

To be eligible; students must meet the following requirements:
*Heartland Co-op member (self, parent/guardian, corporation)
* Enrolled in Econ 332 at Iowa State University Complete final class project, confirmed by Professor
*Submit application with copy of project.

Annual Scholarship Program
Heartland Co-op is a proud sponsor of the Iowa FFA Association and offers twelve $1,000 scholarships to full-time agriculture students, through the Iowa FFA Foundation. Recipients are voted on by a selection committee. To be eligible for this scholarship, students must meet the following requirements:
*Class A Heartland Co-op member (self, parent/guardian, corporation)
*Full-time student accepted into a college program offering an agricultural degree, or a 2-year transferable ag program to major in an agricultural curriculum (must enroll in one or more agriculture class each semester of scholarship year)
*The college's agriculture program can be at any accredited university or college in the US or any 2-year agricultural program.  Dependent children and/or spouses of Heartland Co-op directors and officers are prohibited from receiving a scholarship.
*Recipient can be awarded a scholarship one time only.
*Available to applicants who are undergraduate students in two- or four-year programs (high school Seniors, as well as college Freshmen, Sophomores and Juniors are eligible to apply)

Should you have any questions regarding either Heartland Co-op scholarship programs, contact Jim Hilzendeger at: jhilzendeger@heartlandcoop.com or click here https://www.heartlandcoop.com/ScholarshipPrograms.



"Igniting” Knowledge with Heartland Co-op

Heartland Co-op has recently been working with a local tech school, to help them gain agricultural knowledge and implement best professional practices.

Justin Mills, teacher at Ignite Pathways, contacted Madison Muff at the Woodbine Heartland Co-op location.  Madison and Justin worked to combine efforts and teach the kids the full cycle of planting to selling their crops. Madison taught them about marketing, testing for moisture, and signing contracts.

 The kids made the decision to contract their grain but unfortunately, when they brought their crop in, they were short fulfilling the contract.  That didn’t stop them. They made a new plan to have a fundraiser at Heartland Co-op. They asked for support from the local farmers to donate crops so they could meet the contract. Their contract was not only met but was surpassed by the great generosity of the local farmers.

While the kids were at the location, they handed out lunches to the farmers and workers at the co-op.  Heartland Co-op is pleased to support a great program like this, investing in the farmers of tomorrow.



CHS to build a new grain shuttle facility in southeast South Dakota

CHS Inc. will begin construction this spring on a new grain shuttle facility in southeast South Dakota, a strategic location in its Pacific Northwest corridor.

[CHS Inc. will begin construction this spring on a new grain shuttle facility in southeast South Dakota. The new facility will include industry-leading technology and the latest safety features in the new 1.1-million-bushel grain facility.]

"We continue to reinvest in projects that bring even more value to our owners while expanding customer-focused retail solutions for area farmers," says Rick Dusek, executive vice president of CHS ag retail operations. "Our continued focus is on making investments on behalf of our farmer-owners that will strengthen rural America and help meet the growing demand for agricultural products and services."

The new facility will include industry-leading technology and the latest safety features in the new 1.1-million-bushel grain facility. It will be built near the intersection of Interstate 29 and State Highway 44 in southeast South Dakota and tie into an existing rail loop currently used for CHS agronomy operations. The facility will feature fast and efficient receiving and loadout capabilities to bring area farmers even more market access in the Pacific Northwest grain corridor and other important markets.

"This investment in infrastructure and supply chain capabilities is part of a coordinated and focused effort to drive operational and efficiency gains throughout our expansive CHS network," says Kent Mulder, CHS vice president of operations in South Dakota and the Southern Plains. "Our operational footprint and assets are the strength of our supply chain and this important project delivers on our strategy to have safe, efficient assets in the right places to best serve our farmer-owners' increasing need for speed and space and connect them to global markets."

The new facility will create a safer environment for employees, farmers and community members through cleaner operating conditions and updated equipment with enhanced safety features.

"The strength of rural America relies on agriculture, and CHS is well-positioned to grow and expand opportunities for our farmer-owners through these strategic investments," Mulder says.



Ghana Officially Opens its Market to US Pork and Pork Products Export

In a signed letter to the Veterinary Medical Officer of USDA’s Food Safety and Inspection Service (FSIS), dated January 12, 2023, the Acting Chief Veterinary Officer of the Ghanaian Veterinary Services Directorate of the Ministry of Food and Agriculture acknowledged receipt of the FSIS’ proposed certificate of export for pork and pork products, and confirmed its acceptance. The Ghanaian market is now officially open to U.S. exports of pork and pork products in addition to other meat products from the United States.

Reaction from the National Pork Producers Council
Ghana’s import pork market was valued at nearly $16 million in 2021. Imports have increased steadily over the past five years, topping 15,000 metric tons in 2021. Countries in the European Union have dominated the Ghanaian pork market, with the United States not being a significant player. With its 32 million inhabitants, the West African country makes for a potentially lucrative market for U.S. pork.



U.S., Taiwan Conclude Round of Trade Talks
 
The United States and Taiwan concluded four days of negotiations under the U.S.-Taiwan Initiative on 21st-Century Trade. Launched June 1, 2022, the initiative is intended to develop a roadmap to deepen the nation’s economic and trade relationship, advance trade priorities, and promote innovation and economic growth for workers and businesses.
 
The National Pork Producers Council has been closely watching the talks.... In 2020, the U.S. pork industry exported nearly $54 million of product to Taiwan, making the island nation the No.15 destination for American pork. However, in 2021, because of new trade barriers imposed by Taiwan, that amount fell to just under $16 million, a 70% drop.  NPPC supports negotiations between the United States and Taiwan that eliminates tariff and non-tariff impediments to U.S. pork.


ACE Joins USGC in Highlighting Ethanol Advantages at 2023 India Auto Expo

The American Coalition for Ethanol (ACE) Chief Marketing Officer (CMO) Ron Lamberty joined the U.S. Grains Council (USGC) at the India Auto Expo last week, Asia’s largest automotive show, to promote ethanol implementation across the country. Lamberty was also invited to speak about the U.S.’s experience and use of ethanol during the first edition of the co-located International Symposium for Thriving Eco-Energy in Mobility (STEM) event in a session about how biofuels are a boon for the Indian sustainability roadmap.

“India has an air quality emergency and is following the science which shows the best and fastest way to improve air quality is to add more ethanol,” Lamberty said. “They’ve gone from almost zero ethanol to 10 percent in only a few years and have a goal of 20 percent nationwide by 2025.”

“In my remarks I said I was a little bit jealous to see the Indian government, the auto manufacturers, and the oil industry all supporting the 20 percent standard,” Lamberty added. “They all agree because something has to be done now, and unlike in the U.S., where ethanol has been reducing smog and pollution for decades, India doesn’t have the luxury of ignoring what works while hoping another platform can provide relief sometime in the distant future.”

Lamberty thanked the USGC for inviting ACE to sponsor and take part in the event and praised their efforts to promote ethanol at the Auto Expo. “The USGC staff put together a massive, attention-grabbing trade show display space that attracted a lot of people, and provided information about how ethanol is made, how it gets to stations, the equipment used to sell it, and even an FFV converted by eFlexFuel,” he said. “I enjoyed working with the Grains Council staff and interns, our friends at the Renewable Fuels Association, Growth Energy, Iowa Renewable Fuels Association, and some corn grower groups, as well as meeting people the Grains Council is working with in India and providing information for others who wanted to learn more about ethanol.”

India recently achieved an ethanol fuel blending target of 10 percent ahead of schedule, a milestone on its way to reaching E20 by 2025. As the Government of India pushes to reach its E20 target, the Society of Indian Automobile Manufacturers (SIAM) has been tasked with leading the promotion and eventual implementation of the ethanol blend mandate, as well as transitioning their fleet to FFVs. To achieve these goals, SIAM has partnered with the USGC. Part of this partnership has resulted in a large, physical presence at the Auto Expo via the Ethanol Pavilion, which is featured at the event to showcase the environmental, economic, and technological benefits of ethanol for the nation.

Previously, Lamberty has joined the USGC at several retailer workshops in Mexico to educate marketers about adding ethanol blends in that market and co-led a tour in 2019 with the Iowa Renewable Fuels Association in conjunction with the USGC for key Mexican retail and supplier groups to see how ethanol blends have been successfully and profitably incorporated across Iowa.



CoBank Quarterly: Inflation is Beginning to Loosen its Grip

The U.S. economy will progressively slow through the first half of 2023 and fears of a recession are still high, and still warranted. Inflation and interest rate increases intended to combat swiftly rising prices are behind the broad economic slowdown. But with the unemployment rate at a 53-year low and inflation trending lower, forecasts are turning at least a little less gloomy.

U.S. consumers are still spending but doing so by increasing dependence on credit. They are also finally pushing back on price increases on goods, a response to continuous declines in real wages and dwindling reserves of pandemic savings. Like consumers, businesses economy-wide are also spending more cautiously, according to a new quarterly report from CoBank’s Knowledge Exchange.

“The economic cracks that emerged in late 2022 in housing and tech are beginning to spread to manufacturing, finance and retail,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange division. “These sectors are showing signs of weakness but not to the degree of pointing to an imminent recession. Manufacturing and retail are both undergoing a normalization phase as pandemic consumption of goods has shifted to post-pandemic consumption of services.”

The Federal Reserve raised its benchmark overnight rate by more than 400 basis points in 2022 and it is not finished hiking. The Fed has made it clear it is focused less on headline inflation and more squarely on the labor market and core services inflation excluding housing. With job growth far outpacing the availability of workers, the scarcity of labor is cause for concern, especially for the services sector.

China’s abrupt reversal of its zero-COVID policy is unleashing the full brunt of the virus. The humanitarian toll has been severe. Little data is coming out of China, but reports have estimated that in some regions up to 75% of the labor force has been infected — forcing shutdowns at manufacturing plants and causing major delays in trucking and at ports. U.S. exporters are feeling the impacts now, as supply chain problems have been preventing the movement of many goods into and around China.

Grains, Farm Supply & Biofuels
Grain markets balanced several challenges in the fourth quarter, from the war in Ukraine and economic slowdowns in China and Europe to interest rate hikes in the U.S. and other developed economies. The continuation of these factors and La Nina weather conditions into 2023 will likely put pressure on grain storage and merchandising margins. Stocks-to-use ratios for corn, soybeans and wheat finished 2022 at multi-year lows driven by strong domestic demand.

For the second year in a row, ag retailers posted exceptionally strong revenue and profit growth, driven by sturdy grain market fundamentals. Interestingly, despite high spring demand and tight global supplies, fertilizer prices declined during the fourth quarter amid falling prices for natural gas. While the farm supply sector begins 2023 on strong financial footing, rising wages, higher interest rates and continued high transportation costs are likely to tighten margins.

Ethanol production in the fourth quarter nearly caught up to pre-COVID levels, averaging 15.5 billion gallons for the quarter. Profit margins averaged $0.27/gallon compared to $0.25 for the first nine months of 2022 and long-run historical average levels of $0.25 to $0.30. Profitability was well above average during October and November, but increasing corn prices, coupled with a 12% decline in ethanol fuel prices, pushed down margins in December. Year-round sales of E15 gained momentum with the Biden administration’s announcement of its intention to review states’ proposals.

Animal Protein & Dairy
Animal protein production surged in the fourth quarter, with the weekly average increasing 6% compared to the third quarter. While cold storage inventories edged higher through the second half of the year, they remain below the five-year average due to the ongoing strength of demand.

In a major shift from the prevailing conditions earlier in the year, chicken markets were well-supplied during the fourth quarter thanks to increased placements and higher live weights. Retail chicken prices remained elevated, averaging $1.85/lb. for the quarter. However, wholesale chicken prices crumbled amid the pressure of mounting supplies. Export markets have been less affected. Overall, U.S. chicken remains supported by global markets despite the weakening fundamentals at home.

Shrinking market-ready fed cattle supplies are bullish for cattle prices, but beef prices have drifted down from their summer highs. While retailers provided modest relief at the meat case during the fourth quarter, and a discount to year ago levels, consumer demand remained resilient despite comparatively high prices. At the wholesale level, however, beef prices have dropped from their elevated levels. From January highs to December lows, the boxed beef cutout lost 15% of its value. Processor margins suffered through the fourth quarter due to moderating beef prices and higher operating costs.

Nearby lean hog futures accelerated quickly to begin 2022 and had gained 68% in value by late July, peaking at $122/cwt. Hogs retained much of that support through the third quarter. But despite tight hog supplies, valuation succumbed to the pressure of seasonal tendencies and processing limitations during the fourth quarter. The lean hog index dropped into the upper $70s to end the year, and the hog market appears poised for a significant bounce in 2023.

U.S. milk prices continued softening in the fourth quarter with Class III milk futures falling 5%. Butter prices have also fallen in a faster-than-expected retreat. Spot butter prices are down nearly 10% from the record highs scored in October. Record large total U.S. dairy exports for 2022 carried through the fourth quarter, underpinned by recent weakening of the U.S. dollar. However, the outlook for U.S. exports in the first half of 2023 is deteriorating. Dairy product prices are expected to grind lower as post-holiday season demand wanes amid uncertain global demand.

Cotton, Rice & Specialty Crops
China’s worsening COVID situation adds even more uncertainty to cotton markets, which were already under pressure from the deteriorating global economic outlook. China represents about one-third of global mill use and textile exports, so widespread or long-lasting mill shut-downs would send cotton prices lower yet again. Cotton futures have fallen sharply since May. The steep decline in prices will impact 2023 cotton planting decisions and ultimately, global supply.

Rough rice prices climbed in the fourth quarter as USDA continued shrinking its estimate of the U.S. rice crop amid tightening global supplies. The 2022 U.S. long grain crop is down 8.9% year-over-year while the medium/short grain crop is down 30.7%. The small U.S. crop and strong U.S. dollar have stimulated imports of rice to a record fast pace, mostly of the jasmine and basmati varieties. Exports, meanwhile, have fallen as U.S. rice is priced out of the world market.

Sugar has been one of the best-performing U.S. farm commodities in 2022. Wholesale refined sugar prices averaged the year near $0.60/lb., nearly double the long-term average. And the 2023 outlook is for continued price strength and resilient consumer demand for groceries, particularly in the sweet snack and confectionery categories.

Frozen orange juice concentrate prices ended 2022 at the highest level since 2016 and near an all-time record high. USDA estimated Florida’s crop in December at a sparse 18 million boxes, down 56% year-over-year and the lowest since 1937. Processors are filling their needs with increased purchases of imported concentrates from Mexico and Brazil.

Power, Water & Communications
Higher energy costs will continue to squeeze the majority of U.S. consumers this year. Nearly half of all U.S. households heat primarily with natural gas and they will spend 28% more to do so this winter, according to the U.S. Energy Information Administration. The cost of electricity this season is also set to increase, with consumers likely to notice a 10% seasonal adjustment in their bill. Unfortunately, high energy costs have a cascading effect, feeding inflation and hampering economic growth.

Charter Communications signaled its commitment to stick with its hybrid fiber-coaxial infrastructure as it announced a three-year plan to deploy DOCSIS 4.0 across its cable footprint. This will bring top speeds of 10Gbps by 2025 at a cost significantly less than fiber. Comcast has also voiced its support for DOCSIS 4.0 and recently completed a trial in Philadelphia. These announcements are important to the broadband industry because they represent a meaningful competitive threat to companies deploying fiber to the home as cable companies build on their existing (and cost-effective) infrastructure. Meanwhile, a tight labor market and access to critical equipment continue to negatively impact operators’ ability to meet their network build schedules.

Read The Quarterly. Each CoBank Quarterly provides updates and an outlook for the Macro Economy and U.S. Agricultural Markets; Grains, Biofuels and Farm Supply; Animal Protein; Dairy; Cotton and Rice; Specialty Crops and Rural Infrastructure Industries.



R-CALF USA: New RFID Proposal Is for Benefit of Multinational Beef Packers

This week, the U.S. Department of Agriculture (USDA) Animal and Plant Health Protection Service (APHIS) published a proposed rule to require adult cattle shipped interstate to bear a radio frequency identification eartag. Though APHIS has changed its terminology from radio frequency identification (RFID) eartags to electronic identification (EID) eartags, it acknowledges that “the only official electronically readable identification tags are RFID tags.”

“The proposed rule is a proposal to mandate the use of RFID eartags when adult cattle are shipped across state lines, period,” said R-CALF USA CEO Bill Bullard.

According to Bullard, the Regulatory Impact Analysis that accompanies the proposed RFID rule reveals a primary, if not the primary, reason APHIS persists in its efforts to mandate RFID eartags.

In support of its RFID mandate, the analysis asserts that if restrictions on U.S. beef exports are imposed, then domestic markets can be flooded with products that were intended for foreign markets and this increased supply will lower domestic prices and producers’ profits.

APHIS then cites the 2003 restrictions placed on U.S. beef exports following the discovery of an imported Canadian cow in the U.S. with bovine spongiform encephalopathy (BSE) or mad cow disease. The agency states that the resulting restrictions on U.S. beef exports caused upwards of $7.1 billion (adjusted for inflation) in losses to the “U.S. beef industry.”

“We don’t contest that the “beef industry” sustained over $7 billion in losses, but those are losses sustained by the “beef industry” – mainly the multinational beef packers – who had to pay more for U.S. cattle when those export restrictions were in place,” Bullard said.

Bullard explained that immediately following the 2003 trade restrictions, financial returns to cow/calf producers increased to historically high levels for two years in a row, due principally to the increased prices the beef packers paid for domestic cattle for several years after the restrictions were put in place.

“It’s clear the proposed RFID mandate is intended to serve the trade interests of the multinational beef packers by protecting them from having to pay higher prices for cattle as occurred following the BSE-related trade restrictions imposed in 2003.

“A government mandated RFID scheme is wrongheaded. If the multinational packers believe RFID eartags will help them avoid losses associated with trade restrictions, then those packers should offer economic incentives to the cattle industry to encourage more voluntary RFID participation.

“APHIS’ proposal is a gift to the multinational packers, granting them economic benefits that they won’t have to pay for because the proposed rule would require cattle producers to bear the cost. In addition, it’s a windfall for multinational eartag manufacturers who, by virtue of the government mandate, are guaranteed millions of dollars in eartag sales,” Bullard added.   

The agency’s analysis further shows that disease traceability has improved exponentially under current law that has been in place since APHIS’ 2013 regulations that did not mandate RFID eartags and instead granted producers flexibility in choosing the type of animal identification to use when shipping adult cattle interstate.

The agency explained that after implementation of the 2013 regulations, the time each state took to trace the movement of an animal was reduced from 490 hours in 2013 to 11.5 hours in 2020, meaning it is now 42 times faster to trace a suspect animal than it was prior to the 2013 regulation. According to the agency’s chart depicting the reduced trace time, there have been year-over-year improvements each year since the current regulation has been in place.

“The agency’s own analysis demonstrates it is continually improving its disease trace-back capabilities under existing law, which is not a justification for mandating the use of high-cost RFID eartags,” Bullard commented.

In its previous Regulatory Impact Analysis, APHIS estimated the cost of tags required by the 2013 regulations based on the interstate movement of 30 million cattle per year, and the cost to producers for the metal tags authorized in that regulation was zero. In today’s proposal, the agency is estimating that only 11 million cattle would be subject to the RFID mandate, but at a cost upwards of $3.65 per eartag.

“The agency does not explain why it has reduced its estimate of cattle moving interstate by nearly a third, nor does it explain how independent cattle producers who have long suffered from depressed cattle prices can withstand upwards of a $3.65 per head increase in production costs with no expectation of recovering that cost in the marketplace.     

“We are deeply disappointed in APHIS’ persistent kowtowing to multinational beef packers and multinational eartag manufactures as demonstrated by this proposed rule,” Bullard concluded.

 

Case IH Patriot 50 Series Sprayer Wins 2022 Good Design Award  

Case IH, a global leader in agriculture equipment, has been recognized as a 2022 Good Design® Award winner for the industry-leading Patriot® 50 series sprayer. The award, presented by The Chicago Athenaeum℠ Museum of Architecture and Design℠, highlights the most innovative and cutting-edge industrial, product and graphic designs produced around the world.

“We are honored and proud to be recognized, once again, with a Good Design Award; the oldest and most prestigious awards program organized worldwide,” said Scott Harris, Case IH global president. “This award proves Case IH’s two-century history commitment to serving farmers’ needs by providing innovative products and solutions to help them meet the challenges of today and growing demands of tomorrow.”

Each year since 1950, The Chicago Athenaeum Museum of Architecture and Design and Metropolitan Arts Press Ltd. present the Good Design Awards Program celebrating the yearly achievements of design excellence. Each submission is evaluated by a jury based on the following criteria established in 1950: innovative design, new technologies, form, materials, construction, concept function, utility, energy efficiency and sustainability.

The Patriot 50 series sprayer is designed to help farmers and ag retailers work more productively and efficiently with its exceptional operator environment, complete vehicle control, advanced connectivity solutions and integrated spray technology. Operators will appreciate the modern, yet luxurious, cab environment and an innovative 4-bar linkage chassis suspension system that delivers superior ride quality to make time in the cab more comfortable.

“Efficiency is if I can stay in the field and load one more time to get another 200 to 400 acres in a day after days of spraying,” said Matt Moreland, Kansas farmer and Patriot sprayer user. “The other piece of efficiency is knowing our spray rates are accurate. When we look a year ahead with these input prices, we need to be precise this coming year.”