Tuesday September 19 Ag News

 Lower Elkhorn Board of Directors Approve Budget for Fiscal Year 2024

Do you know your NRD? Created in 1972, Nebraska’s 23 Natural Resources Districts (NRD’s) are a unique form of local government when compared to other parts of the nation. Nebraska is the only state that addresses natural resource management concerns using this political structure.  NRDs are tasked with 12 areas of responsibility aimed at helping to conserve, develop, and manage our natural resources.

Given the fact that NRD’s are granted the authority to generate revenue by levying property taxes provides them with a consistent source of revenue that can sustain critical programs and projects, but also heightens the need to be fiscally responsible with local tax dollars. The Lower Elkhorn NRD (LENRD) board and staff work diligently to prioritize spending to ensure that local tax dollars are used efficiently.

The operating budget for Fiscal Year (FY) 2024 was approved by the LENRD Board of Directors at their September 14th meeting with a tax request of $4,896,906.  The estimated levy, based on the property tax request, is 2.2586 cents per $100 of valuation, which is a decrease of 1.66% from the fiscal year 2023 levy of 2.2968 cents per $100 of valuation.  For example, if a person owns a $300,000 house, the taxes owed to the LENRD would have been $68.90 in 2023 and will be approximately $67.76 in 2024.

The LENRD’s total operating budget for fiscal year 2024 is estimated at $12,049,933, which is a decrease of $1,795,034 (or 12.97%) from last fiscal year.

Some major expenditures for FY 2024 are: Levee/Flood Protection Projects – which includes the West Point Levee, McKenzie Dam, Winslow Demolition, and Logan East Well Projects - $791,400; Water Resources Programs - $602,700; Project Construction – Willow Creek Artesian Pressure Mitigation and Willow Creek Downstream Streambank Erosion Projects - $998,670; Conservation Cost-Share Programs – Bazile Groundwater Management Area Project (BGMA) and Willow Creek Best Management Practices (BMPs) - $670,000;  and Additional Sinking Funds – Battle Creek Project Sinking Fund ($975,000) and Flood Mitigation Sinking Fund ($250,000).

The LENRD has received major grant funding for Scribner Bank Stabilization, Willow Creek Dam Artesian Pressure, and Hazard Mitigation Plan (Federal Emergency Management Agency & Nebraska Emergency Management Agency); Bazile Groundwater Management Area and Willow Creek Best Management Practices (Environmental Protection Agency) as well as State Grants and Funds from Department of Natural Resources, Nebraska Environmental Trust, and Nebraska Forest Service.

The LENRD also received grant funding from Natural Resources Conservation Services (NRCS) for Watershed Flood Prevention Operations.  Earlier this summer, the LENRD was approved for a grant through the NRCS to help fund the North Fork Elkhorn River Watershed Plan and Environmental Document. This project is about identifying and evaluating opportunities to reduce flood risk within the watershed, notably within the communities of Pierce and Osmond. However, the study area also includes the communities of Plainview, Foster, McLean, Magnet and Wausa. The first of three sets of open houses for this project are slated for early November.

Because the LENRD strives to be fiscally responsible with local tax dollars, there is a strong focus on the continuation of allocating resources towards Sinking Funds in the budget. The funds are put into savings now to be used for future projects. “By setting money aside today into a sinking fund, tagged for use for a specific project, it helps to minimize impact to the property tax levy for tomorrow,” said Brian Bruckner, LENRD interim General Manager

To learn more about the 12 responsibilities of the Nebraska’s NRDs and how your local district can work with you and your community to protect your natural resources, visit www.lenrd.org and sign up for our monthly emails. The next board of directors meeting will be September 28, 2023 at the LENRD office in Norfolk at 7:30 p.m. and on Facebook Live.



NeFU Brings Ten Participants to the National Farmers Union Fly-In

Ten Nebraska Farmers Union (NeFU) members were among the 300 Farmers Union members from around the nation who participated in the 2023 National Farmers Union (NFU) Fall Fly-In last week in Washington, D.C. The NeFU group had individual meetings with the Nebraska Congressional Delegation as well as Representatives from New Jersey, Virginia, and Nevada.

In addition, NeFU President John Hansen was a member of a small group that met with high-ranking officials from EPA about NFU’s ongoing dialogue with the EPA regarding biofuels, agricultural Right to Repair, changes to the definition of Waters of the United States (WOTUS) under the Clean Water Act, and opportunities related to climate-smart agriculture.

Hansen was also a member of a small group that met with Federal Trade Commission Chairwoman Lina M. Khan and her top management team about NFU’s ongoing dialogue with the Federal Trade Commission regarding NFU’s Fairness for Farmers campaign; specifically, to provide an update on NFU’s efforts on agricultural Right to Repair, ask for an update from the FTC on its Right to Repair enforcement efforts; and to level NFU’s concerns with the proposed Kroger-Albertsons grocery stores merger.

This year’s participants included NeFU Vice President Vern Jantzen of Plymouth; Farmers Union Midwest Agency (FUMA) General Manager Jeff Downing of Elkhorn; FUMA agent Kyle Wade and his wife Sarah of Grand Island; NeFU District 3 Board of Director Mary Alice Corman of Edgar, Lisa Orem of Lincoln, NeFU District 7 President Keith Dittrich of Tilden, Alaiya Cave and Decker Gabriel-Woods of Omaha and NeFU President John Hansen of Lincoln.

Monday morning USDA Secretary of Agriculture Tom Vilsack spent over an hour briefing and answering questions with all the participants in the Monday morning briefing at USDA’s Jefferson Auditorium. His presentation included his updated White Board presentation.

In addition, Deputy Secretary of Agriculture Xochitl Torres Small, USDA Farm Service Agency Administrator Zach Ducheneaux, and USDA Under Secretary for Farm Production and Conservation Robert Bonnie also made presentations and answered questions.

Monday afternoon NFU Fly-In participants attended a briefing on Capitol Hill from the House and Senate Majority and Minority lead staff on the status of the upcoming Farm Bill which was the focus of this year’s Fly-In.

NeFU President John Hansen was extremely pleased with the positive meetings that were held with the Nebraska Congressional Delegation. “We had very positive discussions about the NFU list of suggestions for the Farm Bill.  The meetings with FTC and EPA I attended were excellent. President Biden’s historic Executive Order on Competition is being taken seriously by the regulatory agencies, and it supports NFU’s “Fairness for Farmers” campaign that is having a very positive impact,” Hansen concluded.



TIMING LAST ALFALFA HARVEST WITH GDD
– Ben Beckman, NE Extension Educator

Allowing for alfalfa to winterize before dormancy is a key factor preventing winter kill across a stand.  Traditionally, my recommendation has been to time the last cutting for roughly 6 weeks before the first frost.

While this general guideline has proven its worth over the years, many producers would love to have a bit more accurate method to time last cuttings.  One way to narrow the no-harvest window down is by utilizing growing degree days (GDD).  Work from Dr. Dan Undersander with the University of Wisconsin calculated winterkill risk looking at GDDs at a base 41°F accumulating until a killing frost of 24°F.  The two GDD levels of importance for alfalfa stands were 500 and 200.

By providing at least 500 base 41°F GDD after harvest, research trials showed that there was sufficient time for alfalfa to winterize.  If harvest occurred with under 200 GDD left, alfalfa plants did now have sufficient time to regrow and deplete carbohydrate reserves to a level that would negatively impact winterization.

While other factors like ground cover and stress of the stand over the course of the year need to factor into the decision for a late cutting, this gives us a more accurate calendar point to shoot for if forage is needed.  We also need to keep in mind that late cuttings may have a difficult time drying down in a timely fashion.

Most of the state is right at the edge of our 500 GDD threshold. To decide where you stand, the High Plains RCC CLIMOD (climod.unl.edu) can be used to look at past years GDD. Using accumulated 41 GDD for past years and your expected first freeze dates, we can avoid the 500-200 GDD no harvest zone and plan a late alfalfa cutting if needed.  



CAP Webinar: Foreign Investment in the U.S. and Ag Land Ownership Restrictions
Sep 28, 2023 12:00 PM
With: Dave Aiken, Professor, Agricultural and Water Law Specialist, University of Nebraska-Lincoln; and Larry Van Tassell, Professor, Center for Agricultural Profitability Director, University of Nebraska-Lincoln.

Foreign investment in the U.S. is not a new concept. Recent investments by Chinese corporations and government, though, have brought a new awareness and raised concerns regarding security ramifications. Recent attempts by the Chinese to purchase ag land near military bases has put the issue of state ownership restrictions in the news. This webinar will examine foreign investment in the U.S. and Nebraska. Nebraska and federal legislation dealing with foreign ownership of agricultural land, and with limiting foreign investments in the U.S. that could threaten national security, will also be discussed.

Get more information and register at https://cap.unl.edu/webinars.  



CAP Webinar: U.S. Ag Outlook: Tighter Profits, but Strong Financials
Oct 5, 2023 12:00 PM
With: Nate Kauffman, Senior Vice President and Omaha Branch Executive, Federal Reserve Bank of Kansas City.

Following consecutive years of strong incomes in agriculture, profit margins have shown signs of tightening in recent months. Interest expenses are sharply higher than a year ago, input costs remain elevated, and labor is an ongoing challenge in certain industries. Despite signs of tighter profits and numerous ongoing risks, however, many agricultural producers remain in a strong financial position with the end of the year approaching.

Get more information and register at https://cap.unl.edu/webinars.  



NEBRASKA POULTRY AND EGG DEVELOPMENT, UTILIZATION AND MARKETING COMMITTEE NOTICE OF MEETING
 
The Nebraska Poultry and Egg Development, Utilization, and Marketing Committee has planned a meeting for Friday, October 20, 2023, at 10:00 a.m. at the Courtyard by Marriott in Lincoln, NE.

Schedule
PED - 10:00 a.m. - 11:30 a.m.
NPI - 11:30 a.m. - 1:00 p.m.

The current agenda of subjects to be discussed at this meeting is available for public inspection at the offices of the Nebraska Department of Agriculture, Poultry and Egg Division, 521 First Street, Milford, Nebraska.

Please send any funding requests or additions to the PED agenda to Alyssa no later than October 9, 2023.

Please contact the PED office at 402-761-2216 or alyssa@nepoultry.org if you have any questions.



Nebraska wineries gather to host the 3rd Annual 2023 TOAST Nebraska Holiday Wine Festival.
 
The Nebraska Winery and Grape Growers Association (NWGGA) is excited to launch ticket sales for their 3rd annual holiday wine festival. The TOAST Nebraska: Holiday Wine Festival is the second largest gathering of wineries in the state, succeeding their spring festival hosted last May in Omaha.

With 17 participating wineries for the 2023 holiday festival, the event is unique in that the wineries host the event through the statewide association (NWGGA). The festival is a great opportunity to experience a wide variety of offerings from wineries across the state, conveniently in one location at Fonner Park in Grand Island.

The event in November of 2022 served over 1,400 attendees from 185 cities across Nebraska and 10 surrounding states. The wineries expect even more merriment for the 2023 event.

Along with the participating wineries, attendees can expect products and offerings from over 25 Nebraskan artisan and food vendors, live music, educational wine classes, and the crowd-favorite wine bingo.

The event is an excellent opportunity to stock up on Nebraska wine favorites for holiday gatherings and gifts. Attendees can purchase multiple bottles of wine to replenish - or start - their very own Nebraska wine cellar at home. The event staff even hosts a wine check, similar to a coat check, so purchasers needn't worry about bearing the weight of all their new purchases. Attendees can also purchase bottles for consumption on-site, with many sharing a bottle with their group while enjoying a friendly game of wine bingo in the Pinnacle Bank Expo Center's Quilt Room.

The event is hosted from Noon to 8:00 p.m. on Saturday, November 4, 2023, at the Pinnacle Bank Expo Center at Grand Island's Fonner Park.

Tickets are $45 for general admission and include a wine-tasting glass, unlimited wine tastings at all participating wineries, a wine tote, access to artisans and vendors, live music, and free activities such as educational classes and wine bingo. Designated driver tickets are also available for $25, including a bottle of water, a wine tote, and a $5 food voucher. Tickets increase to $65 on October 20 until tickets sell out or the event ends. All attendees must be 21 years or older to attend - no infants, children, or pets at any time.

To purchase tickets and find more event information about the 2023 TOAST Nebraska: Holiday Wine Festival, visit www.toastwinefest.com and www.facebook.com/toastwinefest. Tickets are limited, and on-site ticket availability is not guaranteed.



Michael Hoxmeier Joins Meristem Team

Experienced crop input specialist Michael Hoxmeier has joined Meristem Crop Performance® Group, LLC (www.MeristemAg.com), one of the fastest-growing crop input suppliers in America. Hoxmeier becomes Meristem’s sales rep and dealer coach in Nebraska.

“Michael Hoxmeier is a service-oriented expert at helping farmers get solid crop production results,” says Mitch Eviston, Meristem Founder and CEO, in announcing the hire. “Michael has a passion for serving farmers and we are excited to gain the value of his experience as we continue to grow our Meristem business throughout Nebraska.”

Hoxmeier most recently served as a customer business advisor for Bayer Crop Science, where he counseled Bayer customers as a local expert with a key focus on DEKALB/Asgrow brands. Before that, he honed his skills as a seedsman during seven years with AgriGold Hybrids as a key account specialist.

“Meristem’s entrepreneurial approach and effort to reduce waste in the distribution system really appeals to me,” says Hoxmeier of his new mission. “There’s a lot of excitement around biologicals as new technology that can help farmers make the most of every seed they plant. I’m excited about bringing Meristem’s innovation to more farmers who can benefit.”

Hoxmeier earned a business education degree from the University of Nebraska, so he is uniquely suited to bringing more understanding to growers. He grew up on a family crop and livestock farm near Orleans, Neb., and currently lives with his family about a mile down the road from that on-going operation. He and his wife Bridget have five children: Leah, Emma, Josie, Max, and Noah.

“There’s all of this potential – science and traits – in a bag of seed, yet we’re still having the same kind of conversation around seed decisions that we had when hybrids were introduced,” he says. “With the kind of innovation Meristem is bringing to the market there’s an opportunity for a whole new conversation. There’s more value for farmers in what’s available today.”

“I really love the challenge of helping crop producers figure out how to increase yield at a better ROI,” Hoxmeier says. “Biologicals are working now, and there’s still much to learn. There’s a lot of education we can do to help farmers use them to gain a better ROI (return on investment).”



ASI INVESTIGATES TRADE CASE AGAINST LAMB IMPORTS

The American Sheep Industry Association released a video podcast today sharing the status of a legal process initiated several months ago toward the possible filing of a United States trade law violation by lamb importers.

ASI Executive Director Peter Orwick offers an update as the association awaits the results of a preliminary investigation by the law firm of Kelly Drye. Those results will be shared with the ASI Executive Board the final week of this month.  

"We are specifically looking for the estimate of trade case strength, which depends on two parts, with one as injury to the industry -- the entire industry, the sheep producer, the lamb feeders and lamb companies," Orwick said. "The second piece is estimate of any violation including dumping or subsidy margins so the board can project an impact on American lamb returns should a case filing result in tariffs on imported lamb meat."

Pursuing a trade case against lamb importing countries would cost a minimum of $1.3 million in legal expenses alone and require nearly a year to see the case through to the end, Orwick said.  He appreciates volunteer leaders of ASI taking part in multiple meetings and interviews of legal firms this spring to secure the research and guidance from professionals on United States trade law.

Due to investment costs, the ASI Executive Board has indicated it will require a vote of the full board of directors to move forward with any litigation. While a virtual meeting is an option in the coming months, the board will meet in person at ASI's Annual Convention in Denver, Colo., on Jan 10-13.

Eight of ASI's 44 state member associations joined the National Lamb Feeders Association in April of this year in requesting that the association investigate lamb imports. A law firm was selected in May and conducted confidential financial surveys of American sheep producers, lamb feeders and lamb companies as part of the initial investigation. International analysis of lamb meat pricing and production costs will also be a key piece of the recommendation to be considered by the ASI Executive Board.  



Growth Energy Urges Action after Administration Officials Show Commitment to Biofuels at 2023 Advocacy Summit

Growth Energy, the nation’s largest biofuels trade association, welcomed its members from across the U.S. to Washington, D.C. last week for the 14th-annual Growth Energy Biofuels Summit—the American biofuels industry’s premier advocacy event.

While in D.C., the attendees met with their elected senators and representatives to tell the industry’s story, and advocate for pro-biofuels policy priorities like lowering fuel prices and carbon emissions by securing year-round E15, building a strong sustainable aviation fuel (SAF) market by using the GREET lifecycle analysis model to apply tax credits from the Inflation Reduction Act (IRA), and investing in infrastructure to ensure that biofuels can continue to play a role in addressing the nation's climate challenges, among other issues.

Before spending a day and a half on Capitol Hill meeting with lawmakers, summit attendees enjoyed an executive-level conference program—the centerpiece of which was a suite of presentations by three Biden administration officials who each spoke to the White House’s commitment to supporting domestic, farm-based biofuels as a climate solution. Specifically, attendees heard from U.S. Secretary of Agriculture Tom Vilsack, Department of Energy Deputy Assistant Secretary for Sustainable Transportation and Fuels Michael Berube, and White House National Climate Advisor Ali Zaidi.

After the summit, Growth Energy CEO Emily Skor issued the following statement:
“Biofuels have a necessary role to play in the energy transition and in meeting the nation’s climate goals. It’s encouraging to see that this administration understands that fact.

“Today, with the right policies, biofuels can take up a larger part of our nation’s fuel supply to lower emissions; tomorrow, with the right modeling, farm-based biofuels will serve as the cornerstone feedstock for SAF that dramatically decarbonizes the aviation sector. The remarks from Secretary Vilsack, Deputy Assistant Secretary Berube, and National Climate Advisor Zaidi make clear that when it comes to biofuels, this administration understands their potential.

“Now comes the most important step—taking concrete actions to ensure America doesn’t miss this opportunity for homegrown biofuels to lead us into a low-carbon future. The industry is ready, and we look forward to partnering with this White House and with our champions on the Hill to follow through and cement farm-based bioethanol’s place as a next generation climate solution.”

For more highlights from the 2023 Growth Energy Biofuels Summit, watch this video and follow Growth Energy on X.



Clean Fuels, ASA, NOPA and U.S. Canola Urge Use of GREET Model for SAF Tax Incentives

Today, Clean Fuels Alliance America, the American Soybean Association, the National Oilseed Processors Association, and the U.S. Canola Association delivered a letter to Senior Advisor John Podesta urging the Biden administration to support the investments made by U.S. companies and farmers who are ramping up production of sustainable aviation fuel. The trade associations – whose combined memberships represent the entire value chain for SAF production – urge the administration to explicitly recognize the most recent version of the Argonne National Laboratory’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model as the “similar methodology” option specified in the Inflation Reduction Act for determining SAF tax credit eligibility.

“U.S. producers of SAF and their partners in farming and oilseed processing should be able to rely on the GREET model to calculate the value of SAF credits. Without this, our combined members and others in the industry may not be able to follow through on investments in SAF production,” the groups state in the letter.

The letter asks the administration to consider the billions of dollars that members of the associations have made to build new or optimize existing production facilities and expand availability of sustainable, homegrown, low-carbon feedstocks like soybean oil and canola. The letter further points out that the SAF Grand Challenge Roadmap recognizes that the goal to produce three billion gallons of SAF by 2030 will rely on expanded use of soybean oil and canola.

The letter is available for download on cleanfuels.org.

“It’s inconceivable that Congress would create, or Treasury would implement, a clean energy incentive that discourages use of sustainable, homegrown feedstocks. We are asking the administration to follow through on its goals and enable the aviation sector to access better, cleaner fuels in the near term,” added Kurt Kovarik, Clean Fuels’ Vice President of Federal Affairs. “Our industry has consistently contributed real-world data to Argonne to ensure that the GREET model is the most accurate, up-to-date lifecycle carbon emission assessment tool.”



As USDA Sees Record Interest in Conservation and Clean Energy Programs, Swift Implementation of Inflation Reduction Act Funding Continues

On the heels of the first anniversary of President Biden’s Inflation Reduction Act, the U.S. Department of Agriculture (USDA) has seen record interest in the conservation and clean energy programs that received funding from the law. As a key part of President Biden’s Investing in America agenda, the Inflation Reduction Act is the nation’s largest-ever investment to combat climate change.

“With the Inflation Reduction Act, President Biden provided USDA with historic resources to improve the lives of the American people,” said Agriculture Secretary Tom Vilsack. “It is clear there is a significant appetite among producers and rural communities for clean energy and conservation programs, specifically those that were boosted by the law. I am proud of the swift work USDA has done to create, expand and streamline programs in order to put resources directly into communities.”

The Inflation Reduction Act made nearly $20 billion available over five years for USDA’s Natural Resources Conservation Service (NRCS) to address continuous high demand for popular conservation programs. This additional investment will help farmers and ranchers implement expanded conservation practices that reduce greenhouse gas emissions and increase carbon storage. Importantly, many of the practices funded under the Inflation Reduction Act provide significant environmental co-benefits for producers outside of their climate mitigation value. Consistent with the direction from Congress in the Inflation Reduction Act, NRCS made available $850 million for these programs in Fiscal Year 2023 and has already seen substantially more interest than funding available under the law. These amounts include both financial assistance that will be included in contracts and agreements, and the technical assistance needed to implement complex on-the-ground conservation systems.
    The Environmental Quality Incentives Program (EQIP), for which $250 million was made available, received nearly 9,000 applications totaling nearly $475 million.
    The Agricultural Conservation Easement Program (ACEP), which has $100 million available for 2023, received over $180 million in applications.
    The Conservation Stewardship Program (CSP) has received nearly 3,700 applications requesting funding that exceeds the available amount of $250 million.
    The Regional Conservation Partnership Program (RCPP), for which $250 million was made available, has received project proposals exceeding $2 billion in funding.

In addition to strong interest in NRCS’s programs, USDA’s Forest Service received $6.4 billion in applications for the Urban and Community Forestry Program, for which $1.5 billion funding was made available in Fiscal Year 2023 under the Inflation Reduction Act to increase tree cover in urban spaces and boost equitable access to nature while bolstering resilience to extreme heat, storm-induced flooding, and other climate impacts. Last week, USDA awarded over $1 billion of this funding to nearly 400 projects in every state across the country.

As of August 2023, USDA has publicly announced the availability of over $17 billion, or 45% of the 10-year total of Inflation Reduction Act funding, for new and existing programs. Additionally, USDA has already put significant resources directly into the pockets of farmers and small business owners. For example, USDA:
    Provided $1.15 billion to date to over 20,000 distressed direct and guaranteed Farm Service Agency (FSA) loan borrowers, helping them reach long-term stability and operate successful, thriving agricultural businesses.
    Recently announced 1,234 grants to help thousands of agricultural operations and rural small business owners access clean energy systems and energy efficient improvements through the Inflation Reduction Act resources that bolster the Rural Energy for America Program (REAP).
    Awarded $262.5 million to provide training and support to more than 20,000 students that will sustain the next generation of food, agriculture, natural resources and human sciences workforce
    Announced $300 million for 50 selected projects under the Increasing Land, Capital, and Market Access Program, to increase access to farm ownership opportunities, improve results for those with heirs’ property or fractionated land, increase access to markets and capital that affect the ability to access land, and improve land ownership, land succession and agricultural business planning
    Announced $300 million to improve measurement, monitoring, reporting and verification of greenhouse gas emissions and carbon sequestration in climate-smart agriculture and forestry.

Additionally, USDA’s Rural Development is moving quickly to give farmers and rural communities relief through clean energy that will lower energy bills and reduce pollution. Demand from rural communities for USDA’s clean energy support is very strong:
    The Powering Affordable Clean Energy Program (PACE), for which $1 billion was made available, has so far received over $7.6 billion in applications – which represents more than 660% more interest received than available funding – in Fiscal Year 2023 to fund new clean energy projects and energy storage in rural America.
    The Empowering Rural America Program (New ERA), for which $9.7 billion was made available, recently closed its application window and will release more information as it processes proposals. It received interest from member-owned electric cooperatives in over 40 states and Puerto Rico to help transition to clean, affordable, and reliable energy.

Consistent with the direction from Congress, USDA has allocated all Inflation Reduction Act funds, which total nearly $38 billion over 10 years, for spending under programs that invest in communities and producers nationwide. USDA agencies responsible for implementing the provisions of the Inflation Reduction Act have worked diligently and efficiently to expand existing programs and create new funding opportunities while undergoing a rigorous review of their spending plans by USDA’s Office of Budget and Program Analysis.

These investments made through the Inflation Reduction Act are powering the Biden-Harris Administration’s efforts to make USDA programs more inclusive, accessible and available to more people than ever before so that their benefits are felt for generations to come. Many of these programs are also part of President Biden’s Justice40 Initiative, which is advancing environmental justice by ensuring that 40 percent of the overall benefits of certain federal investments reach disadvantaged communities that are marginalized and overburdened by pollution and underinvestment.

For more information on the USDA’s implementation of the Inflation Reduction Act, visit: www.usda.gov/ira.



Russian Wheat Exports Remain Biggest Risk to U.S. Wheat Elevators

A modest rebound in U.S. wheat production and supplies is improving the outlook for profitability among grain elevators that store wheat. Futures market carries have improved for all three major classes of wheat and the buy basis is widening following a bigger harvest. The larger harvest follows two years of poor production and a historic run of inverted futures markets that sapped profitability for storing wheat.

According to a new report from CoBank’s Knowledge Exchange, the major risk to elevators in the year ahead is a sharp rally in wheat prices. Wheat stocks among major exporters are historically tight, and any disruption to the flow of Russian exports through the Black Sea could trigger a sharp price run-up.

“The flood of cheap Russian wheat into the global market may have created a false sense of security in the world wheat market,” said Tanner Ehmke, grains and oilseeds economist for CoBank. “The greatest margin risk to storing wheat is the shrinking world wheat crop outside of Russia and China, which leaves the market vulnerable to supply shocks and extreme volatility in wheat prices.”

The cost of storing grains, including wheat, remains historically high due to the sharp rise in interest rates.  As a result, elevators will still struggle to pencil in profit on the wider carries, particularly for the hard wheats. Elevators struggling to make margin on carries will be looking for opportunities to benefit from rising basis on company-owned grain through the marketing year.

U.S. Wheat Harvest
The rebound in the U.S. wheat harvest was largely driven by a substantial increase in soft red winter wheat yields in the Midwest, where farmers produced the biggest crop in nine years. This year’s soft red winter wheat harvest rose 31% year-over-year, based on USDA’s latest estimates.

With ample supply, elevators will benefit from exceptionally wide carries in the futures market and the variable storage rate that adds about 3 cents per bushel to the futures spread. Soft red winter wheat is a low-protein wheat typically used for snack food products like crackers and pastries.

In the Central and Southern Plains, production of hard red winter wheat lost significant yield under ongoing drought. Overall production rose 10% year-over-year, according to USDA estimates, with gains attributable to expanded acreage. The abundance of protein in the hard red winter wheat crop in recent years has resulted in protein premiums falling. Hard red winter wheat is typically used for bread, buns and rolls.

The hard red spring harvest in the Northern Plains is expected to fall 7% year-over-year despite expanded acreage, according to USDA. Late planting followed by persistent drought limited yields. The smaller harvest is compounded by a drop in Canadian hard red spring wheat production that is expected to hold prices at a significant premium in the year ahead. Hard red spring wheat is a high-protein wheat used for products like bagels and pizza crust.

Blending this year’s wheat crop will be a tightrope for elevators, millers and bakers that are challenged to find low- to medium- protein hard wheat in a market saturated with high protein. With the hard wheats trading at a sizable premium, millers and bakers will be motivated to blend more soft red wheat with hard wheat. However, blending will be limited due to stark differences in mixing and baking performance.

World Wheat Supplies
The flood of cheap Russian wheat into the global market, combined with a strong U.S. dollar continue to be major headwinds for U.S. wheat exports. Russia’s currency has fallen sharply, down 30% year-to-date, putting Russian exports on sale and pushing down world wheat prices. Russia is currently harvesting a near-record wheat crop with substantial carryover inventories from last year’s record-sized harvest.

In China, wet weather during harvest damaged a substantial portion of the Chinese wheat crop, which likely result in China increasing wheat imports.

Excluding Russia and China, the world’s wheat stocks-to-use ratio is nearly the tightest on record. Drought has substantially reduced wheat supply in Argentina, Canada and Australia. Ukraine’s wheat harvest faces numerous obstacles to being delivered to the world market due to the ongoing Russia-Ukraine war.

Weak performance with the North African wheat crop will also translate into greater demand for imports, as will India’s ban on white rice exports. The ban is shifting food demand from rice to wheat in major importing regions like Southeast Asia and Africa.