Wednesday January 11 Ag News

 Center for Rural Affairs launches multi-million dollar initiative to support small meat processing

Independent meat processors in Nebraska now have access to $10 million in loan capital through the Center for Rural Affairs.

The new initiative comes at a time when small lockers across the state have seen an increase in use. When packing plants were suffering from COVID-19 worker health challenges and the national meat supply chain faltered, these small businesses kept serving local customers.

This boost to Nebraska’s rural economy is made possible with a U.S. Department of Agriculture Rural Development Meat and Poultry Intermediary Lending Program grant.

“Small meat lockers—independent businesses by definition—help anchor small town main streets,” said Brian Depew, executive director of the Center. “They provide jobs and a retail outlet for affordable and quality local food. Independent livestock farmers rely on them to process their animals into marketable products. And, as the pandemic illustrated, they’re a critical pillar of a resilient food system in times of crisis.”

However during the pandemic, local farmers who depend on small lockers found themselves waiting months for an open slaughter date.

“The challenges for small meat lockers started long before the pandemic,” Depew said. “Consolidation in livestock production, retiring owners, and aging facilities had already shuttered many small-town lockers. It is common for local farmers to drive an hour or more to find custom slaughter and processing.”

For more than 30 years, the Center for Rural Affairs has offered loans, one-on-one business counseling, and other support to small businesses in Nebraska. Expanding these services for independent meat processors and in turn, supporting local farmers, was the next step, according to Depew.

These loans can be used for expansion of existing processors, start-up of new processors, real estate purchase, facilities update or expansion, equipment purchase, energy efficiency upgrades to facilities and equipment, sale of an existing business in cases where the sale will avert closure, or working capital.

Both primary and secondary meat processing facilities are eligible.

“Our local meat lockers need and deserve our support and assistance,” Depew said. “We will continue to bring policy change, technical assistance, and lending support to the sector because we understand that local food processing infrastructure is a cornerstone of a vibrant and sustainable rural future.”

Interested borrowers can contact Wyatt Fraas at 402.254.6893 or wyattf@cfra.org.

For more information, visit cfra.org/meatprocessingloans.



NEBRASKA DAIRY RECEIVES BUSINESS BUILDER GRANT

Jisa Farmstead Cheese, a Nebraska dairy located in Brainard, is one of 31 dairy companies and cooperatives in an 11-state region selected to receive a Dairy Business Builder grant. The grants were made available through the Dairy Business Innovation Alliance (DBIA), a partnership between the Wisconsin Cheese Makers Association and the Center for Dairy Research at the University of Wisconsin–Madison.

The Dairy Business Builder grant program encourages small- to medium-sized dairy farmers, entrepreneurs, and processors in the Midwest to pursue innovative projects such as diversifying on-farm activity, creating value-added products, enhancing dairy byproducts, and creating or enhancing dairy export programs. The reimbursement grants of up to $100,000 each are awarded following a competitive review process.

“We’re focused on supporting dairy growth, innovation and development in this state today and in the future as dairy products are one of Nebraska’s top 10 commodities,” said Nebraska Department of Agriculture Director Sherry Vinton. “If you are a Nebraska dairy or dairy processor looking to expand and improve your business, consider applying for a Dairy Business Builder grant in the future. The program is designed to encourage growth in the dairy industry.”

DBIA is supported by funding from the U.S. Department of Agriculture. Since its inception as part of the 2018 Farm Bill, DBIA has administered approximately $7 million in grants to 88 dairy businesses within its 11-state service area of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin. The program also offers technical assistance and education to dairy farmers and processors in the region.

To view the complete list of DBIA awards to the 31 dairy companies and cooperatives, visit https://www.cdr.wisc.edu/dbia-awards-december-2022. The Dairy Business Builder Grant program will open for its next cycle of grant applications in February 2023. Questions on the grant program may be directed to Allissa Troyer at 531-220-9211 or allissa.troyer@nebraska.gov.



PASTURE LEASE DROUGHT CONSIDERATIONS
– Todd Whitney, NE Extension

Drought conditions usually occur 1 out of every 5 years in Nebraska especially in the western regions. Further, when severe drought conditions occur in one year, the majority of the time…another extreme drought subsequentially follows in the next growing season. Our last back-to-back extreme drought occurred in 2012 and 2013. Will the extreme 2022 drought conditions repeat again this year? If so, should pasture lease agreements be adjusted?

Historically, pastures (especially in the western region) need time for full recovery after drought. During Dust Bowl years, heavily (over-grazed) pastures often resulted in delayed forage production for up to five years. Whereas, moderately grazed pastures recovered quicker.

So, now may be the time for landowners and tenants to include a clause in their written pasture lease agreements to account for potential dry conditions. Other pasture biomass management clauses might include severe hail and wildfire considerations.

Traditionally, pasture leases are for 5 or 6 months from April or May through October. Previously stressed warm-season grass pastures might be rested by delaying grazing season start in 2023. Further, pasture stocking rates could be reduced 10-15% and adjusted further if drought continues. In fairness, pasture rent owed should also be adjusted accordingly if the grazing season is shortened.

Consider pricing leases based on grazing animal unit months (AUM’s) rather than a flat rate per acre or cow-calf pair. A clause might be added to cover livestock water in case water source go dry. Typically, pasture weed control is a landlord expense; but if the pasture was overgrazed due to drought, weed control costs might be shared between landowners and tenants.

Start your communications early and make written agreements for fairness and equity. UNL Extension Ag. Econ. provides free fillable AgLease101.org leases at: https://cap.unl.edu Other drought information is available online at: https://beefwatch.unl.edu and https://cropwatch.unl.edu .



Bill seeks to keep food access changes permanent

A Nebraska state senator is hoping a temporary change to eligibility requirements for the Supplemental Nutrition Assistance Program (SNAP), approved in 2021, will become permanent under legislation introduced recently.

Legislative Bill (LB) 84, sponsored by state Sen. Jen Day, would keep the gross income eligibility requirement at 165% or below of the federal poverty level, rather than reverting back to 130%. The Legislature increased the threshold as a way to fix a flaw known as the “cliff effect,”  however, it is set to expire on Sept. 30.  

With a hearing date pending before the Legislature’s Health and Human Services Committee, the Center for Rural Affairs has released the new white paper, “Supplemental Nutrition Assistance Program: Nebraska’s Eligibility Decision.” Authored by Policy Associate Derrik Conard, it explores recent usage trends and examines how SNAP affects state and local economies.

Conard said making the current SNAP gross income limit permanent is a good step.

“Keeping the eligibility level at 165% will give Nebraska families and workers the stable food security they need while pursuing better work, and it would encourage workforce advancement, which is good for the local economy,” he said.

SNAP is the largest federal nutrition assistance program. It exists to supplement the budgets of qualifying families so they can buy healthy food. In 2021, 157,000 Nebraska residents participated in SNAP. More than 72% of the users are families with children and 30% are households with seniors or people with disabilities. Participation is slightly higher in small and rural communities with populations between 10,000 and 50,000.

Basic eligibility requirements are set at the federal level, but states are allowed to introduce flexibility beyond the minimum standards in certain instances.

If lawmakers approve LB 84, Nebraska would join its neighboring states in combating the cliff effect. Iowa and Minnesota have limits of 160% and 165%, respectively. Colorado, North Dakota, and Wisconsin each have gross income eligibility limits of 200%.

The report also recommends lawmakers consider a broader set of changes to combat food insecurity.

“State policies can and do have a large effect on food insecurity in our local communities,” Conard said. “In particular, average wage rates, lower taxes for low-income households, and the cost of housing all play a factor in food insecurity.”

To read and download “Supplemental Nutrition Assistance Program: Nebraska’s Eligibility Decision” visit cfra.org/publications.



Values Available for End-of-Year Tax Considerations

Crop and livestock farmers who are working on preparing their 2022 income tax returns can review two useful documents for end-of-year determinations.

The article “Suggested Closing Inventory Prices for 2022 Records” provides suggested closing inventory prices for all major crop and livestock commodities produced in Iowa, and “Deductible Livestock Costs for Adjusting 2022 Income Tax Returns” provides cost estimates for farmers who consume food produced by their operation, which must be deducted from expense reporting.

Both documents are published by Iowa State University Extension and Outreach and are part of the December Ag Decision Maker https://www.extension.iastate.edu/agdm/.  

“The closing inventory prices found in the ‘Suggested Closing Inventory Prices for 2022 Records’ document are used by farmers and farm business consultants to assign a consistent value to ending inventories of crops and livestock each year,” said Alejandro Plastina, associate professor in economics and extension economist at Iowa State.

The inventory prices are averages compiled by economists with ISU Extension and Outreach, using data from the United States Department of Agriculture, the Iowa State Cash Rental Rates Survey, and the Iowa Farm Business Association. The prices are used by consultants with the Farm Business Association and tax preparers across Iowa.

In addition to tax preparation, the prices can help farmers who simply want to track their inventory, or who are required to track and report inventory for lending or other business purposes.

“A net worth statement or balance sheet should be developed on or around Jan. 1, to measure the financial progress of the farm from year to year,” said Plastina. “This helps farmers make comparisons and estimate the net income for each year.

Home consumption
As Plastina explains, when farmers consume livestock or products that they have produced themselves, they are not allowed to include the costs of raising those livestock or products in their deductible expenses. Likewise, these products are also not taxed as income, because they are being consumed at home.

“Since most farmers would not be able to estimate their own costs for one unit of livestock or product, the document provides an estimated average cost, for common products produced and consumed at home,” said Plastina. “This report is particularly relevant to farm income tax preparers who attend the Farm income Tax Schools.”

Both reports use averages, based on credible data. Actual results per farm should be based on local markets, conditions of the crops and livestock marketed, and other pertinent factors. Farmers should consult with their accountant or tax professional on final determinations for their farm.



New Resources to Aid Spanish Speaking Farmers across Iowa

In 2023 Iowa State University Extension and Outreach staff will be delivering farm stress resource packets to Spanish speaking farmworkers across Iowa.

“Iowa agriculture relies on skilled labor to provide care for animals and the land, which can be very labor-intensive jobs. Couple this with cultural and language barriers, and it can increase stress for farm workers both on the farm and at home,” said Jennifer Bentley, ISU Extension and Outreach dairy field specialist.  

Nationwide, Spanish speaking farmers often deal with challenges including cultural and language barriers, inadequate healthcare access, and limited support systems in addition to the challenges related to the occupational stressors and hazards of farm work.

“A part of our mission at Iowa State University Extension and Outreach is to meet all people where they are,” said Demi Johnson, behavioral health program specialist. “The translated farm resource packets are one more way to help farmers across the state learn the warning signs of a mental health crisis and how to access services such as those provided by Proteus Inc. and Iowa Workforce Development to ensure safe and reliable access to healthcare, education and resources.”  

Additional resources are available on the North Central Farm and Ranch Stress Assistance Center website at farmstress.org/. Electronic copies of farm stress resource publications are also available for free download from the Extension Store website, including Farm Stress and Mental Health (HS 180A) and Stress on the Farm (HS180).



IRFA to EPA: Biodiesel Blending Levels “Woefully Low”

This morning, Nathan Hohnstein, Policy Director with the Iowa Renewable Fuels Association (IRFA), urged EPA to boost proposed blending levels for biodiesel during a hearing on the proposed rule for Renewable Fuel Standard blending levels for 2023, 2024, and 2025.

After thanking EPA for proposing a “solid foundation” for conventional blending, with levels at 15 billion gallons in 2023, and 15.25 billion gallons for 2024 and 2025, Hohnstein stated, “To be blunt, the biomass-based diesel number is woefully low.”

Hohnstein pointed to U.S. Energy Information Administration reports showing that biodiesel and renewable diesel production today already exceed EPA’s proposed blending level for 2025.

Hohnstein also addressed concerns that the proposed rule appears to shift the benefit of new “eRINs” from the renewable fuel producer to electric vehicle manufacturers.

“Between the de-emphasis of advanced biofuels and rewarding electric vehicles with eRINs, critics have called this draft rule the first step to the electrification of the RFS,” Hohnstein stated. He went on to urge the EPA to follow the intent of Congress that the RFS be a market moving mechanism.



Weekly Ethanol Production for 1/6/2023

According to EIA data analyzed by the Renewable Fuels Association for the week ending January 6, ethanol production rebounded by 11.7% to 943,000 b/d. This is equivalent to 39.61 million gallons daily. However, production was 6.3% lower than the same week last year and 8.5% below the five-year average for the week. The four-week average ethanol production decreased 3.0% to a twelve-week low of 945,000 b/d, equivalent to an annualized rate of 14.49 billion gallons (bg).

Ethanol stocks retreated 2.6% to 23.8 million barrels. Still, stocks were 3.9% more than a year ago and 2.8% above the five-year average. Inventories thinned across the East Coast (PADD 1) and Gulf Coast (PADD 3) but built across the other regions.

The volume of gasoline supplied to the U.S. market, a measure of implied demand, ticked up 0.6% to 7.56 million b/d (115.86 bg annualized). Yet, demand was 4.4% less than a year ago and 8.3% below the five-year average.

Refiner/blender net inputs of ethanol waned, down 2.7% to 768,000 b/d, equivalent to 11.77 bg annualized and the lowest volume in a year. Net inputs were 1.7% more than a year ago but 5.8% below the five-year average.

There were zero imports of ethanol recorded for the fifth consecutive week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of November 2022.)



 CHS Reports First Quarter Earnings

CHS Inc., the nation's leading agribusiness cooperative, today released results for its first quarter ended Nov. 30, 2022. The company reported quarterly net income of $782.6 million compared to $452.0 million in the first quarter of fiscal year 2022.

Fiscal 2023 first quarter highlights include:
    Revenues of $12.8 billion compared to $10.9 billion in the first quarter of fiscal year 2022, a year-over-year increase of 17%.
    Continued robust global demand for commodities, coupled with market volatility, resulted in strong earnings across all business segments.
    Significantly improved earnings in our Energy segment resulted primarily from higher refining margins driven by strong demand in rural America and global market conditions.
    Our soybean and canola processing businesses in our Ag segment benefited from strong demand for meal and oil.
    Our CF Nitrogen investment delivered strong earnings due to robust urea and UAN demand.

"The U.S. agricultural industry has benefited from ongoing strong global demand for grain and oilseed commodities," said Jay Debertin, president and CEO of CHS Inc. "Our continued strong earnings are attributable to market dynamics and supported by our investments on behalf of our owners in infrastructure, supply chain capabilities and innovative technology that drive efficiency and operational improvements. As we enter 2023, CHS remains well-positioned to maximize value for our member cooperatives, farmer-owners and customers."

Energy
Pretax earnings of $396.6 million for the first quarter of fiscal year 2023 represent a $327.4 million increase versus the prior year period and reflect:
    Improved refined fuels market conditions including higher refining margins and discounts on heavy Canadian crude oil, partially offset by higher renewable energy credit costs and increased refinery maintenance expenses
    Higher refined fuels and propane volumes driven by strong demand due to more favorable weather conditions during fall harvest compared to the same period in fiscal year 2022
    Lower propane margins resulting from hedging-related impacts due to volatile pricing in the first quarter

Ag
Pretax earnings of $287.3 million represent a $0.9 million increase versus the prior year period and reflect:
    Strong global demand and constrained supply for grain and oilseed
    Improved margins in our oilseed processing business due to robust demand as well as mark-to-market gains
    Lower margins on our grain and oilseed commodities, driven by unfavorable mark-to-market impacts, as well as less favorable pricing for our agronomy products
    Decreased volumes across most of our Ag segment due to numerous factors, including drought conditions in portions of our trade territory

Nitrogen Production
Pretax earnings of $96.9 million represent a $0.3 million increase versus the prior year period and reflect continued favorable performance of our strategic investment in CF Nitrogen due to strong global demand for urea and UAN.

Corporate and Other
Pretax earnings of $36.7 million represent a $22.2 million increase versus the prior year period and reflect increased equity income from our Ventura Foods joint venture, which resulted from more favorable market conditions for edible oils.



All Retail Fertilizer Prices Lower at Start of 2023, With Half Down Significantly

Average retail prices for all eight major fertilizers were lower the first week of January 2023 compared to last month, according to sellers surveyed by DTN. This is the third straight week prices have been down from the previous month. And for the second consecutive week, prices for half of the fertilizers were down substantially from last month. DTN designates a considerable move as anything 5% or more.

Both MAP and potash were 8% lower compared to last month. MAP had an average price of $879 per ton, while potash was at $752/ton. Urea was 6% less expensive than last month, and the nitrogen fertilizer had an average price of $739/ton. DAP was 5% lower compared to last month, and the phosphorus fertilizer had an average price of $876/ton.

The remaining four fertilizers were slightly less expensive looking back to last month. 10-34-0 had an average price of $754/ton, anhydrous $1,302/ton, UAN28 $573/ton and UAN32 $673/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.80/lb.N, anhydrous $0.79/lb.N, UAN28 $1.02/lb.N and UAN32 $1.05/lb.N.

Fertilizers are now mostly lower than one year earlier. This week, seven fertilizers are lower while only one is still higher. UAN32 is 1% lower, UAN28 is 2% less expensive, 10-34-0 is 5% lower, MAP is 6% less expensive, potash is 7% lower, anhydrous is 9% less and urea is 19% lower looking back to a year prior. One fertilizer is still more expensive compared to last year. DAP is 1% higher looking back a year.



USDA Reminds Producers of Continuous Certification Option for Perennial Forage

The U.S. Department of Agriculture (USDA) reminds agricultural producers with perennial forage crops of an option to report their acreage once, without having to report that acreage in subsequent years, as long as there are no applicable changes on the farm. Interested producers can select the continuous certification option after USDA’s Farm Service Agency (FSA) certifies their acreage report. 

“FSA’s continuous certification option simplifies future acreage reporting of perennial crops, and it can also help streamline the application process for many of our farm programs, including disaster assistance programs,” said FSA Administrator Zach Ducheneaux. “For example, when persistent drought conditions over the past year affected livestock producers in the West and Great Plains, producers who had previously filed a continuous acreage report were able to benefit from a streamlined application process for the Livestock Forage Disaster Program.” 

An acreage report documents a crop grown on a farm or ranch and its intended uses, including perennial crops like mixed forage, birdsfoot trefoil, chicory/radicchio, kochia (prostrata), lespedeza, perennial peanuts and perennial grass varieties. To access many USDA programs, producers must file an accurate and timely acreage report for all crops and land uses, including failed acreage and prevented planting acreage. 

The perennial crop continuous certification process requires a producer to initially complete an acreage report certifying the perennial crop acreage. The producer may select the continuous certification option any time after the crop is certified.  Once the continuous certification option is selected, the certified acreage will roll forward annually and does not require additional action on the producer’s part in subsequent years unless the acreage report changes. 

Once a producer selects continuous certification, then continuous certification is applicable to all fields on the farm for the specific crop, crop type and intended use. If continuous certification is selected by any producers sharing in the crop, then the continuous certification is applicable to fields in which the producer has a share for the specific crop, crop type and intended use.

“Currently less than half of the 336.5 million acres of perennial forage is being reported using the continuous certification process,” Ducheneaux said. “Producers can help streamline the reporting process by selecting continuous certification after filing their crop acreage report.”

Producers can opt out of continuous certification at any time. The continuous certification will terminate automatically if a change in the farming operation occurs. 

How to File a Report  
To file a crop acreage report, producers need to provide:  
    Crop and crop type or variety.  
    Intended use of the crop.  
    Number of acres of the crop.  
    Map with approximate boundaries for the crop.  
    Planting date(s).  
    Planting pattern, when applicable.  
    Producer shares.  
    Irrigation practice(s).  
    Acreage prevented from planting, when applicable.   
    Other information as required.  

Producers can contact their local FSA office to see if their crops are eligible for continuous certification or to make an appointment. Producers can make an appointment to report acres by contacting their local USDA Service Center.   




NCGA Applauds USDA Secretary for Stand on Biotech Corn Trade with Mexico, Urges Quick Action to Resolve Trade Impasse

Agriculture Secretary Tom Vilsack indicated on Monday that there would be no compromise on Mexico’s proposal to ban biotech corn. The secretary’s statement came as Biden met with Mexico’s President Andrés Manuel López Obrador.

The National Corn Growers Association weighed in on the developments.
 
“We appreciate Secretary Vilsack for taking a firm stand on this issue,” said NCGA President Tom Haag. “We would encourage the Biden administration to keep this issue front and center and push for a quick resolution, as farmers have already made their purchasing decisions for the 2023 crop year. We also continue to urge the Biden administration to file a dispute under the U.S.-Mexico-Canada Agreement.”

Talks between the two countries started in the fall of last year, as NCGA and state corn grower groups encouraged the Biden administration to act to prevent López Obrador from moving forward with a promise to ban shipments of biotech corn beginning in early 2024.

In December, Haag, along with the presidents of 23 state corn grower groups, sent a letter to President Biden calling for him to take additional steps to address the pending decree by Mexico that would block imports of biotech corn.

Mexico is a major purchaser of U.S. corn, and 90 percent of corn grown in this country is biotech corn.

NCGA has argued that the decree is a violation of USMCA.



Combine Harvesters Finish Positive for 2022, While Tractor Sales Fall

Combine harvester sales finish the year 2022 with healthy gains in unit sales while ag tractors finish the year below 2021 levels in both the U.S. and Canada according to the latest data from the Association of Equipment Manufacturers (AEM).

Total U.S. ag tractor unit sales fell for both the month of December as well as the year as a whole compared to 2021, with the sub-40hp segment leading losses in both timeframes, losing 26.7 percent for the month and 19.3 percent for calendar 2022. U.S. self-propelled combine sales, however, grew 16.3 percent on the month, finishing the year up 15.8 percent. Only one other segment grew for the year, 100+hp units, finished the year up 11.3 percent despite losing 2.7 percent for the month of December. Total farm tractor sales in the U.S. for the year fell 14.8 percent versus 2021.

“The strength of combine harvester sales during this unusual time in ag markets is a testament to the advantages new technologies make in improving the quality and quantity of crops farmers can bring out of the field,” said Curt Blades, senior vice president, industry sectors and product leadership at the Association of Equipment Manufacturers. “And while other segments fell versus 2021, the previous two years saw the sales gains they did because of the pandemic, while this year was more a return to normal. That said, overall equipment sales finished near or above their 5-year average more often than not this year.”



U.S. Ethanol Industry Praises India on Achieving Blending Target

Growth Energy, the U.S. Grains Council, and the Renewable Fuels Association (RFA) congratulated India for recently achieving its ethanol fuel blending target of 10 percent, five months ahead of schedule. The three groups issued the statement ahead of India’s upcoming Auto Expo 2023, one of Asia’s largest automotive trade shows that’s expected to welcome more than 115,000 visitors to New Delhi next week. Growth Energy, the U.S. Grains Council, and RFA will all be on-site at the trade show.

“Ethanol presents an immediate solution to tackling two of the world’s greatest modern challenges: it represents an efficient alternative to petrol without infrastructure change and is a preeminent solution to mitigating the impending climate crisis,” the groups said. “When adopted through clear and long-term public policies, ethanol can also significantly contribute to the reduction of air pollution in urban centers leading to more positive public health outcomes.

“India’s decision will provide economic benefits to domestic producers, facilitating new cycles of innovation and investment. By reducing dependencies, this forward-looking policy will equally allow the country to save up to $4 billion or Rs 32,000 crore every year in foreign exchange.

“We are delighted to be so warmly welcomed here in India at the Auto Expo 2023 and fully support India’s bright and ambitious goal of transitioning toward higher blends. We look forward to working together with Indian businesses on the path toward net zero.”

Prime Minister Narendra Modi announced in 2021 that India would attain net zero emissions by 2070, with ethanol set to play a prominent role in the country’s reduced reliance on fossil fuels. India’s transition toward renewables is further supported by a target of 20 percent ethanol blending by 2025, driving the country to use ethanol to fast-forward to a resilient and sustainable economy.