Thursday February 08 Ag News

Farm Sector Profits Forecast To Fall in 2024
U.S. Department of Agriculture, Economic Research Service

Net farm income, a broad measure of profits, is forecast at $116.1 billion in calendar year 2024, a decrease of $39.8 billion (25.5 percent) relative to 2023 in nominal (not adjusted for inflation) dollars. This follows a forecast decrease of $29.7 billion (16.0 percent) from 2022 to $155.9 billion in 2023. After adjusting for inflation, net farm income is forecast to decrease $43.1 billion (27.1 percent) in 2024 relative to 2023. With this expected decline, net farm income in 2024 would be 1.7 percent below its 20-year average (2003–22) of $118.2 billion and 40.9 percent below the record high in 2022 in inflation-adjusted dollars.

Net cash farm income is forecast at $121.7 billion in 2024, a decrease of $38.7 billion (24.1 percent) relative to 2023 (not adjusted for inflation). This follows a forecast decrease of $41.8 billion (20.7 percent) from 2022 to 2023. When adjusted for inflation, 2024 net cash farm income is forecast to decrease by $42.2 billion (25.8 percent) from 2023. In 2024, net cash farm income is forecast to be 13.7 percent below its 2003–22 average of $141.0 billion and 43.2 percent below the record high in 2022. Net cash farm income encompasses cash receipts from farming as well as cash farm-related income (including Federal Government payments) minus cash expenses. It does not include noncash items (including changes in inventories, economic depreciation, and gross imputed rental income of operator dwellings) reflected in the net farm income measure.

Cash receipts from the sale of agricultural commodities are forecast to decrease by $21.2 billion (4.2 percent, in nominal terms) from 2023 to $485.5 billion in 2024. Total crop receipts are expected to decrease by $16.7 billion (6.3 percent) from 2023, led by lower receipts for corn and soybeans. Total animal/animal product receipts are expected to decrease by $4.6 billion (1.9 percent), following declines in receipts for eggs, turkeys, cattle/calves, and milk.

Also contributing to lower forecast net income in 2024 are lower direct Government payments and higher production expenses. Direct Government payments are forecast to fall by $1.9 billion (15.9 percent) from 2023 to $10.2 billion in 2024. This decrease is expected largely because of lower supplemental and ad hoc disaster assistance in 2024 relative to 2023. Meanwhile, total production expenses, including operator dwelling expenses, are forecast to increase by $16.7 billion (3.8 percent) to $455.1 billion in 2024. Livestock/poultry purchases and labor expenses are expected to see the largest increases in 2024 relative to 2023.

Average net cash farm income for farm businesses is forecast to decrease 27.2 percent from 2023 to $72,000 per farm in 2024 (in nominal terms). All nine USDA, Economic Research Service (ERS) Farm Resource Regions are expected to see average net cash farm income fall in 2024 relative to 2023, with farm businesses located in the Northern Great Plains region expected to see the largest decline. When grouped by commodity specialization, all farm businesses specializations are likewise forecast to see lower average net cash income in 2024. Farms specializing in wheat are expected to see the largest percentage decline and those specializing in cotton expected to see the largest dollar decline relative to 2023.

Farm sector equity is expected to increase by 4.7 percent ($166.2 billion) from 2023 to $3.74 trillion in 2024 in nominal terms. Farm sector assets are forecast to increase 4.7 percent ($193.2 billion) to $4.28 trillion in 2024 following expected increases in the value of farm real estate assets. Farm sector debt is forecast to increase 5.2 percent ($27.0 billion) to $547.6 billion in 2024. Debt-to-asset levels for the sector are forecast to worsen slightly from 12.73 percent in 2023 to 12.78 percent in 2024. Working capital is forecast to fall 16.6 percent in 2024 relative to 2023.

Median Income of Farm Operator Households Forecast To Increase in 2023, Marginally Decrease in 2024
Median total farm household income is forecast to have increased to $99,523 in 2023. That is a nominal increase of 4.3 percent (a 0.7-percent increase after inflation) between 2022 and 2023. In 2024, median total farm household income is forecast to decrease to $99,445. That is a nominal decrease of 0.1 percent (a decrease of 2.2 percent after inflation) between 2023 and 2024.

Farm households typically receive income from farm and off-farm sources. Median farm income earned by farm households is forecast to have increased in 2023 to -$542 from -$849 in 2022 and forecast to decrease to -$1,198 in 2024. Many farm households primarily rely on off-farm income. Median off-farm income in 2023 is forecast at $84,224, an increase of 3.8 percent (0.2 percent after inflation) from $81,108 in 2022. Median off-farm income in 2024 is forecast to increase to $86,555, an increase of 2.8 percent from 2023 (0.6 percent after inflation). Since farm and off-farm income are not distributed identically for every farm, median total income will generally not equal the sum of median off-farm and median farm income.



Statement from Agriculture Secretary Tom Vilsack on the 2024 Farm Sector Income Forecast

The U.S. Department of Agriculture’s (USDA) Economic Research Service Wednesday released its annual Farm Sector Income Forecast report for 2024. Agriculture Secretary Tom Vilsack issued the following statement:

“After the three highest consecutive years on record in 2021-2023, the first farm income forecast of 2024 indicates net farm income this year will return to prior levels. During this period of record farm income, U.S. farmers rose to the occasion by producing strong harvests and increasing commodity stocks while the U.S. economy recovered more quickly and more robustly than that of the global economy from COVID-19. As a result, while we have rebuilt the global supply, we are seeing a decreased demand for U.S. commodities and commodity prices are coming down. At the same time, while some production costs have come down, others, including labor, pesticides, and livestock purchases, have increased. This brings us to the slightly below historic levels for farm income forecasted today.  

“The forecast underscores the critical importance of USDA’s ongoing work to help foster prosperity for producers and the communities they love by supporting an economy that grows from the bottom up and the middle out, and by creating new market opportunities that promote competition in the marketplace that can help combat low prices and high input costs.  

“Under the Biden-Harris Administration, USDA has taken unprecedented actions to level the playing field so small and mid-sized farmers can get a fair price for their products, while making billions of dollars in transformative investments through the American Rescue Plan and Inflation Reduction Act to create new markets and new income opportunities for family farmers. USDA will continue to focus its efforts on enhancing economic resiliency and robust price competition, increasing farmers’ and ranchers’ earnings, increasing the ability to compete, and keeping farming viable and rural communities thriving.”



NDA REPORTS CASE OF HPAI, REMINDS POULTRY PRODUCERS TO REMAIN VIGILANT

The Nebraska Department of Agriculture (NDA) is reminding poultry owners to continue to monitor for and protect their birds against Highly Pathogenic Avian Influenza (HPAI). Recently, NDA in conjunction with the U.S. Department of Agriculture, confirmed a case of HPAI in Nebraska in a commercial flock in Gage County.

“Nebraska hasn’t had any reported cases of HPAI for a few months so while we are disappointed, we are not surprised, to see another case, as there have been several confirmed HPAI cases in surrounding states,” said State Veterinarian Dr. Roger Dudley. “Poultry producers need to continue to be vigilant in protecting their flocks. It’s important for producers to know the signs and symptoms of HPAI and to continue to practice good biosecurity measures to help prevent the spread of this disease into their flocks.”

HPAI is a highly contagious virus that spreads easily among birds through nasal and eye secretions, as well as manure. The virus can be spread in various ways from flock to flock, including by wild birds, through contact with infected poultry, by equipment, and on the clothing and shoes of caretakers. Wild birds can carry the virus without becoming sick, while domesticated birds can become very sick and die.

Symptoms of HPAI in poultry include: a decrease in water consumption; lack of energy and appetite; decreased egg production or soft-shelled, misshapen eggs; nasal discharge, coughing, sneezing; incoordination; and diarrhea. HPAI can also cause sudden death in birds even if they aren’t showing any other symptoms. HPAI can survive for weeks in contaminated environments.

Resources are available for poultry producers at https://nda.nebraska.gov/animal/avian/index.html. Poultry experiencing signs of HPAI or unusual death should be reported to NDA at 402-471-2351 or the USDA at 866-536-7593.



Beef Leadership Experience Sees Successful Second Year of Program
 
For the second year in a row, the Nebraska Beef Council hosted the Beef Leadership Experience in and around Kearney, January 15-19. Five college students had the opportunity to attend the weeklong experience, where they get to see behind the scenes of the cattle industry in many ways.

Participants this year included Mattison Beattie of Sumner; Ainsley Fischer of Franktown, Colorado; Jaylea Pope of Ravenna; Noah Summers of Gibbon; and Emelia Rourke of Waverly. All attendees are currently college students studying animal science at the University of Nebraska Lincoln.

The Beef Leadership Experience was a great way for students interested in the beef industry to gain a better understanding of all the segments and working parts that go into supplying beef to consumers from pasture to plate.  It also allowed the students to learn about the work of the Beef Checkoff from nutrition education, advertising, promotion and beef research.

Mattison Beattie reflected on how practical the experience was for her.

“This was one on my favorite industry experiences,” said Beattie. “We gained a load of useful knowledge and were able to build strong relationships with fellow students, industry leaders and the Beef Council staff.”

Since much of the work within the industry is done behind the scenes, this opportunity allowed the students to experience first-hand how a feedlot operates, the process at a packing plant, the beef product distribution logistics, and how consumers purchase beef at a grocery store. Having a broader understanding of the entire beef supply chain will hopefully help the students be better prepared for their future careers.

Nebraska Beef Council Director of Nutrition and Education Mitch Rippe helped with consumer information and shopping for a beef-based meal that the students prepared themselves. Rippe said this year’s group of students was great to work with.

“Students were surprised and impressed by the back-end of things that they were never really aware of before,” said Rippe. “They leaned in heavily to the Ag advocacy standpoint and enjoyed listening to Jesse Fulton about BQA and Chandler Mulvaney at NCBA (a contractor to the Nebraska Beef Council).”

The Beef Leadership Experience is also a way that the industry is preparing for the future. The need for volunteers to fill leadership roles continues to increase as many beef producers are approaching retirement. Whether the students want to go back to the ranch, work within the supply chain, or become advocates and communication specialists, it’s essential that they be involved in the organizations that protect and pave the future for the industry.

For more information and to learn more about the Nebraska Beef Council, visit www.nebeef.org.



Green Plains Reports Fourth Quarter and Full Year 2023 Financial Results

Omaha-based Green Plains Inc. Wednesday announced financial results for the fourth quarter and full year 2023. Net income attributable to the company was $7.2 million, or $0.12 per diluted share for the fourth quarter compared to net loss attributable to the company of $38.6 million, or ($0.66) per diluted share, for the same period in 2022. Revenues for the quarter were $712.4 million compared with $914.0 million for the same period in the prior year. EBITDA was $44.7 million for the quarter compared to $5.7 million for the same period in 2022.

“The last half of 2023 has started to show the results of years of planning and execution to get our asset base and team ready for a further transition to higher-value, higher-margin products,” said Todd Becker, President and Chief Executive Officer. “During the fourth quarter, we achieved a 95% utilization rate which contributed to another solid financial performance. We continue to see the positive impact from Ultra-High Protein production and expanded renewable corn oil yields over each of the last two quarters, and we believe we can continue to optimize our asset base to higher utilization in the future.”

“Since we started our transformation path to 2025, while our product and innovation portfolio continues to evolve, the upside opportunity from decarbonization is in sight and we are more optimistic than ever,” added Becker. “We believe our Nebraska platform is in an advantaged position to capitalize on incentives to reduce our carbon intensity, and is ideally situated to participate in the early days of the 45Z Clean Fuel Production Credit. We believe that our Nebraska asset base could have a significant early advantage and could further benefit after taking into consideration the potential for alcohol-to-jet sustainable aviation fuel. We believe our diversified decarbonization strategy will be a strong contributor to our future earnings potential with our first facilities positioned to begin carbon capture in 2025.”

“We are nearing completion of three instrumental projects that will help define our path to true biorefineries with recurring, higher quality earnings streams,” added Becker. “Our first commercial-scale clean sugar facility is anticipated to begin commissioning during the first quarter of 2024. We believe CST is a game changer and as we begin to ship low carbon-intensity dextrose to support the emerging bio-economy, food companies and industrial users, we will demonstrate the true potential of our technology and production platform. Our joint venture to build the world’s largest MSC high-protein facility with Tharaldson Ethanol is in the process of commissioning and is anticipated to begin full production in the coming months, further expanding our capacity for Ultra-High Protein. Last but certainly not least, construction of the facility combining MSC technology with Shell Fiber Conversion Technology is anticipated to be completed this quarter. This novel, disruptive technology aims to become a powerful processor of agricultural feedstocks to liberate the remaining high-value proteins, vegetable oil feedstocks, and cellulosic sugars to be used in food, fuel and feed products globally.”

“As we close out a solid second half of 2023, we are seeing the fruits of our investments and the dedication of our employees,” added Becker. “The progress we made in the second half of last year, from consistent operations and deployment of new technology, leave us well-positioned to continue the execution of our long-term vision to add more value to every bushel of corn we process, through our high protein ingredients and renewable corn oil, capture of biogenic carbon dioxide and conversion of a portion of the starch into low-CI dextrose.”

“In light of our progress, the buy-in of the partnership and these positive catalysts on the horizon, the Board has decided to review the company’s strategic alternatives to determine the best way for Green Plains and its shareholders to realize the full value of the transformation we have made and are continuing to make,” concluded Becker.

Full Year Highlights and Recent Developments:
    Began development of a novel Sustainable Aviation Fuel technology through a joint venture, Blue Blade Energy, with United Airlines and Tallgrass
    Published third annual Sustainability Report, providing updates on progress toward emissions reduction, governance and other goals
    Successfully completed full scale 60% protein production runs using Fluid Quip Technologies’ MSC™ system combined with biological solutions
    Expanded protein sales to customers in North America, South America and Asia Pacific across multiple species
    Announced technology collaboration with Equilon Enterprises LLC to deploy Shell Fiber Conversion Technology, with construction nearing completion at Green Plains York

Results of Operations
Green Plains’ ethanol production segment sold 215.7 million gallons of ethanol during the fourth quarter of 2023, compared with 225.2 million gallons for the same period in 2022. The consolidated ethanol crush margin was $49.7 million for the fourth quarter of 2023, compared with $7.9 million for the same period in 2022. The consolidated ethanol crush margin is the ethanol production segment’s operating income before depreciation and amortization, which includes renewable corn oil and Ultra-High Protein, plus intercompany storage, transportation, nonrecurring decommissioning costs, nonethanol operating activities and other fees, net of related expenses.

Consolidated revenues decreased $201.7 million for the three months ended December 31, 2023, compared with the same period in 2022, primarily due to lower average selling prices and lower volumes sold on ethanol, distillers grains and renewable corn oil within our ethanol production segment. Revenues were also lower within our agribusiness and energy services segment as a result of decreased trading margins.

Net income attributable to Green Plains increased $45.8 million and EBITDA increased $39.0 million for the three months ended December 31, 2023, compared with the same period last year, primarily due to higher margins in our ethanol production segment. Interest expense increased $2.2 million for the three months ended December 31, 2023 compared with the same period in 2022. Income tax benefit was $0.3 million for the three months ended December 31, 2023 compared with income tax expense of $4.9 million for the same period in 2022, primarily due to a decrease in the valuation allowance recorded against certain deferred tax assets for the three months ended December 31, 2023.



APPLY TODAY TO ATTEND THE 2024 NEBRASKA AG YOUTH INSTITUTE

The Nebraska Department of Agriculture (NDA) is currently accepting applications to attend one of the biggest ag youth outreach events in the state. The Nebraska Agricultural Youth Institute (NAYI) brings together hundreds of high school juniors and seniors for a week to learn more about agriculture, Nebraska’s number one industry.

NAYI will be held July 8-12, 2024, at the University of Nebraska-Lincoln’s East Campus. Students selected to attend NAYI do so free of charge due to generous donations from numerous agricultural businesses, commodity groups and industry organizations. Current high school juniors and seniors interested in attending have until April 15, 2024, to apply. Applications for NAYI are available at nda.nebraska.gov/nayi and must be submitted online. This year’s theme is “Leading Your Legacy.”

“From the beginning, NAYI has shared the importance of agriculture with thousands of Nebraska high school students,” said Nebraska Agricultural Youth Council Advisor Christin Kamm. “Students participating in NAYI continue the legacy of exceptional ag leaders in Nebraska by developing their leadership skills and by increasing their knowledge and passion for agriculture. If you know high school juniors or seniors interested in ag, encourage them to apply to NAYI before the April 15th deadline.”

NAYI is in its 53rd year, making it the longest running agricultural youth program of its kind in the nation. Over 250 students attended NAYI last year. NAYI features motivational speakers, discussions on agricultural issues, career development, networking opportunities, leadership activities, a farm management game, a formal banquet and awards presentation, and a dance. NDA selects students to attend NAYI based on their leadership skills, interests, and involvement in agriculture.

NAYI is coordinated by the Nebraska Agricultural Youth Council, which is comprised of 21 college-aged students selected by NDA for their passion and interest in the ag industry. The Council’s purpose is to provide young Nebraskans with a better understanding of agriculture, including agricultural opportunities available to today’s youth.



LEAD Application Deadline is June 15

Applications are now being accepted for Nebraska LEAD Class 43, which begins in the fall of 2024. Up to 30 highly motivated individuals with demonstrated leadership potential will be selected. The Nebraska LEAD Program is specifically designed for both men and women involved in production agriculture or agribusiness, who are intent on making a difference by providing quality leadership for the future of the industry of agriculture and the State of Nebraska.

LEAD Fellows will participate in 12 monthly three-day seminars across Nebraska, a 10-day national study/travel seminar and a 14–16-day international study/travel seminar. The goal of the program is to develop problem solvers, decision makers, and spokespersons for Nebraska agriculture and beyond.

Seminar themes include leadership assessment/potential, natural resources, energy, communication, agricultural policy/finance, international trade, Nebraska’s political process, social/cultural issues, agribusiness and marketing, information technology, advances in health care, the resources and people of Nebraska’s Panhandle and other areas designed to develop leaders through exposure to a broad array of current topics and issues and how they interrelate.

The Nebraska LEAD Program is governed by the non-profit Nebraska Agricultural Leadership Council in cooperation with the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln and 13 other institutions of higher education throughout Nebraska.

Applications are due no later than June 15 and are available via e-mail from the Nebraska LEAD Program. Please contact the Nebraska LEAD Program office at leadprogram@unl.edu
You may also request an application by writing to 104 ACB, University of Nebraska-Lincoln, 68583-0940 or by calling 402-472-6810. You may visit www.lead.unl.edu for information about the selection process.

Nebraska LEAD Program offices are on UNL’s East Campus, housed within the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln. Contact: Terry Hejny, 402-472-6810, thejny1@unl.edu



Iowa Pork Producers Regional Conferences Slated for February 19-22
    
Four educational conferences for pork producers across Iowa will take place February 19-22. The Iowa Pork Producers Association, Iowa Pork Industry Center, and Iowa State University Extension and Outreach are joining forces to offer updates on the economic outlook of the pork market, swine health, disease preparedness and more.

Pork producers, production employees, veterinarians and swine industry stakeholders are encouraged to register and attend one of the four events.

The conference locations and dates are:
·        Monday, Feb. 19 – Orange City-Sioux County Extension Office, 400 Central Ave. NW, Suite 700
·        Tuesday, Feb. 20 – Webster City at the Briggs Woods Conference Center, 2501 Briggs Woods Trail
·        Wednesday, Feb. 21 – Nashua at the Borlaug Learning Center, 3327 290th St.
·        Thursday, Feb. 22 – Washington at the Washington County Extension Office, 2223 250th St.

There are four topics for the afternoon sessions:

·        Updates from the National Pork Board
Dr. Brett Kaysen, senior vice president of producer and state engagement, will share program updates regarding work in domestic and international markets, as well as success in foreign animal disease prevention and preparedness.

·        Pork Market Outlook, Dr. Lee Schulz
Dr. Schulz will summarize the current supply and demand situation, draw implications for hog and pork markets, and outline a series of broader issues shaping the marketplace.

·        Hot Topics in Swine Health, Dr. Chris Rademacher
 Take a look at new disease surveillance tools available to producers and what’s new with diseases such as PRRS, PED, and E. coli, as well as some emerging diseases. Also get tips on preparing your farm for a foreign animal disease outbreak.

·        More Tools for your Toolbox
Iowa State University Extension has five area swine specialists across the state ready to help you solve production problems and provide practical solutions. They aim to promote and enable efficient pork production by disseminating decision-impacting information to producers. They will discuss some of the tools they can put in your toolbox.

“I am excited to offer producers an opportunity to learn and engage with colleagues, extension, and National Pork Board staff,” said Zoey Dinkla, producer education director for the Iowa Pork Producers Association.

In addition to the regional conference program that runs from 1:00 – 5:00 p.m. each day, a separate morning session from 9 a.m. to noon will provide Pork Quality Assurance (PQA) Plus® training. Producers can attend one or both sessions.

Conference details and online registration are available on the Iowa Pork Producers website. You can also preregister by contacting IPPA by phone 800-372-7675 or email bsmeby@iowapork.org.



Remembering Wayne Fredericks

Iowa Soybean Association (ISA) leadership have released the following statements today following news of the passing of Wayne Fredericks, ISA past president:
 
- Suzanne Shirbroun, ISA president and soybean farmer from Farmersburg
“It’s with a heavy heart that we learn of the passing of Wayne Fredericks. Wayne was a husband, father, grandfather, farmer and tremendous voice in Iowa’s agricultural community. I was fortunate enough to witness his effective leadership and advocacy for the issues impacting farmers over the years – both as a fellow board director and friend. His mentorship to fellow farmers and passion for conservation were admired by many and have undoubtedly advanced the ISA, American Soybean Association and industry in countless ways. Future generations of Iowa farmers will benefit from Wayne’s many contributions and determination. We will miss him very much and extend our deepest condolences to the Fredericks family.”
 
- Kirk Leeds, ISA chief executive officer
“Saddened doesn't come close to expressing how we all feel about the passing of our dear friend. Wayne was a generational leader in the soybean industry, particularly in the areas of conservation, stewardship and biodiversity. He cared deeply about his family and the farm, land and water that he had been entrusted with protecting and improving. I will never forget the first time I visited Wayne on his farm as I listened and watched him speak with a sense of reverence about his farm and particularly the soil. He was determined to leave the farm and that beautiful black soil better than it was when he first started farming. It was a commitment that he never forgot and upheld his entire life. Wayne's family is in our prayers as we reflect upon and celebrate his life and the impact he has had on so many.”
 


Record $3.4 Million in Quarterly Biofuels Grants Will Expand E15 Availability

The Iowa Renewable Fuels Infrastructure Program (RFIP) Board approved 74 project applications totaling more than $3.4 million in cost-share funding for Iowa fuel retailers during its quarterly board meeting last week. 73 ethanol cost-share projects were awarded, an all-time record for one quarter, which will lead to the installation of new ethanol infrastructure to increase Iowans’ access to lower cost, cleaner burning E15. The board also approved one application for a new biodiesel terminal project. Once completed, these projects will expand fueling options for E15 and biodiesel blends in 38 different Iowa counties.

The RFIP helps fuel retailers provide higher blends of homegrown, more affordable biofuels to consumers by incentivizing the installation, replacement and conversion of ethanol and biodiesel dispensing and storage infrastructure. Incentives to upgrade biodiesel terminal and storage facilities are also available. While the Iowa Department of Agriculture and Land Stewardship manages the program, a board appointed by the Governor and confirmed by the Iowa Senate determines grant allocations on a quarterly basis.

“Iowans are fueling their vehicles with lower cost E15 at record levels, Iowa plants are producing record volumes of ethanol, and Iowa is setting records for ethanol infrastructure investment,” said Iowa Secretary of Agriculture Mike Naig. “The Renewable Fuels Infrastructure Program is truly driving biofuels momentum, and that is important because this industry supports rural jobs, creates markets for farmers and helps us secure our energy future. With significant state and federal cost-share assistance available, there has never been a better time for fuel retailers to help Iowa drivers save money at the pump by upgrading their fueling infrastructure.”

38 counties had locations receiving one or more of the project grants, including the following: Adair, Allamakee, Black Hawk, Bremer, Buchanan, Butler, Cherokee, Chickasaw, Clarke, Clayton, Clinton, Dallas, Davis, Decatur, Delaware, Des Moines, Dickinson, Dubuque, Grundy, Hamilton, Jackson, Jasper, Jefferson, Johnson, Jones, Marshall, Page, Polk, Poweshiek, Scott, Story, Tama, Wapello, Warren, Webster, Winneshiek, Woodbury, and Wright. 

Additionally, in October 2023, ten RFIP awards totaling $442,300 were approved for E15 infrastructure projects in 8 different counties. Those counties receiving one or more cost-share grants for RFIP projects include the following: Clay, Clinton, Dickinson, Jackson, Jefferson, Linn, Polk, and Scott.  The complete list of locations awarded at the October 2023 meeting can be found here.

To date, $5,483,555.57 of funding for this fiscal year has been awarded to 119 biofuels infrastructure projects.  The program also leverages significant private investment by the participating fuel retailers.

The breakdown of total RFIP funding awarded during this current fiscal year is as follows:
    $103,250 to 3 E85 projects
    $3,998,803 to 87 E15 projects
    $1,281,503 to 27 Biodiesel projects
    $100,000 to 2 Biodiesel Terminal projects

The Renewable Fuels Infrastructure Board will consider additional RFIP grant applications during its next quarterly meeting in the spring of 2024. The RFIP grant application is available on the Iowa Department of Agriculture and Land Stewardship’s website.

Over the history of the program, the state has invested over $80 million while private industry has invested over $240 million. To learn more about the Renewable Fuels Infrastructure Program, visit the program’s webpage on the Iowa Department of Agriculture and Land Stewardship’s website.



Weekly Ethanol Production for 2/2/2024

According to EIA data analyzed by the Renewable Fuels Association for the week ending February 2, ethanol production expanded 4.2% to 1.03 million b/d, equivalent to 43.39 million gallons daily. Output was 3.3% more than the same week last year and 3.4% above the five-year average for the week. However, the four-week average ethanol production rate declined 0.7% to a 38-week low of 974,000 b/d, which is equivalent to an annualized rate of 14.93 billion gallons (bg).

Ethanol stocks rebounded 2.1% to 24.8 million barrels. Stocks were 1.5% more than the same week last year and 2.5% above the five-year average. Inventories built across all regions except the Rocky Mountains (PADD 4) and West Coast (PADD 5).

The volume of gasoline supplied to the U.S. market, a measure of implied demand, sprang 8.1% to a 6-week high of 8.81 million b/d (135.01 bg annualized). Demand was 4.5% more than a year ago and 2.9% above the five-year average.

Refiner/blender net inputs of ethanol increased 1.3% to a 6-week high of 839,000 b/d, equivalent to 12.86 bg annualized. Net inputs were 2.4% more than a year ago and 0.6% above the five-year average.

Ethanol exports were estimated at 78,000 b/d (3.3 million gallons/day), or 43.1% below the prior week. There were zero imports of ethanol recorded for the 20th consecutive week.



Pace of U.S. Ethanol and DDGS Export Sales Accelerates at Year-End
Ann Lewis, Senior Analyst, Renewable Fuels Assoc.

December U.S. ethanol exports shot up 34% to 155.6 million gallons (mg). Canada was our largest destination for the 33rd consecutive month despite a 13% drop in volume. Shipments totaled 43.6 mg (of which 92% was denatured), accounting for 28% of global sales. The U.S. exported 26.0 mg to the United Kingdom (triple the November volume), which is the largest monthly sales in 12 years. Ethanol exports also escalated to India (+51% to a 9-month high of 20.5 mg), the European Union (+109% to a 7-month high of 16.2 mg), the United Arab Emirates (up from essentially zero to a 5-year high of 12.9 mg), the Philippines (up from zero to 23-month high of 9.2 mg), South Korea (+121% to a 5-month high of 8.3 mg), and Peru (+113% to a 7-month high of 6.1 mg). Brazil again was notably absent from the market. Total U.S. exports for the year were 1.43 billion gallons, the third highest volume on record.

There were no U.S. imports on record in December, according to the monthly data. Total U.S. imports for the year were just 20.6 mg, or 74% less than 2022.

Exports of dried distillers grains (DDGS), the animal feed co-product generated by dry-mill ethanol plants, leapt 20% to a three-month high of 992,827 metric tons (mt). U.S. exports to South Korea catapulted 60% to a record 174,282 mt (18% of total DDGS shipments in December), nabbing Mexico’s 17-month title as our largest export market. Sales to Mexico diminished 11% yet were a robust 158,880 mt. Other larger importers included Indonesia (88,164 mt, +6%), Canada (70,011 mt, -11%), Turkey (tripled to 65,367 mt), Vietnam (63,551 mt, -37%), and the European Union (45,530 mt, +529%). Total U.S. exports for the year of 10.8 million mt were 1% less than 2022.



State departments of agriculture urge federal support for state meat inspection programs to stabilize costs and maintain processing capacity

During the 2024 Winter Policy Conference Wednesday, National Association of State Departments of Agriculture members passed an action item emphasizing the need to resume full federal cost-share for state meat and poultry inspection programs.
 
“To continue supporting and expanding the meat processing industry and the livestock sector, Congress and USDA must ensure consistent and reliable funding is available to sustain state meat and poultry inspection programs,” NASDA President Oklahoma Agriculture Secretary Blayne Arthur said. "State meat inspection programs provide services necessary for meat processors in many states. Recent funding shortfalls are detrimental to the resilience of state programs and must be immediately addressed.”
 
With the new action item, NASDA members will urge Congress to require USDA’s Food Safety Inspection Service to provide at least 50 percent funding match to state departments of agriculture to ensure the viability of state meat and poultry inspection programs. NASDA will likewise advocate for an increase in federal appropriations to the USDA Food Safety Inspection Service to ensure the agency can adequately fund these important state programs.
 
State departments of agriculture play a central role in leading outreach to local processors and hold regulatory authority over state inspected meat processing facilities. Twenty-nine state departments of agriculture operate state meat and poultry inspection programs and NASDA emphasizes the essential collaboration between state and federal meat inspection programs in both intrastate and interstate commerce, as outlined in NASDA’s policy.
 
Background
While the USDA’s Food Safety Inspection Service cooperative agreement model with states has historically provided up to the full 50 percent match required under the Federal Meat Inspection Act, states have seen a recent reduction in funds, impacting states like Ohio, which received only 43 percent federal funding in fiscal year 2023.  If federal funding continues to be reduced – challenging the solvency of state programs – the Food Safety Inspection Service would be required to assume inspection responsibilities along with the full cost.
 
Federal and state government funding aimed at supporting independent meat and poultry processing businesses have contributed to a surge in state inspected slaughter establishments. However, the recent reduction in federal funding jeopardizes state services critical for assisting small to medium-sized processors to meet federal and state food safety regulations cost-effectively.



State departments of agriculture support farmer and rancher access to approved vaccine technologies

Wednesday at the 2024 Winter Policy Conference, National Association of State Departments of Agriculture members passed a policy amendment supporting farmers and ranchers’ ability to safeguard animal health through the responsible use of vaccines. Members also emphasized the importance of utilizing vaccines that have undergone a thorough approval and licensing process by the USDA and FDA, ensuring a robust foundation of scientific and peer-reviewed research.
 
“Our farmers and ranchers must have the ability to safeguard animal health against foreign and emerging disease. Vaccines developed and researched through an approved, scientific and regulatory process are a tool helping producers to accomplish that,” NASDA CEO Ted McKinney said. “NASDA prioritizes the wellbeing of livestock and public health, and we must ensure farmers and ranchers have access to approved mRNA vaccines to ensure the health of their animals and provide a safe and resilient food supply.”
 
NASDA supports a robust federal approval and review process for any new vaccine or other animal health tool that can be used to protect the domestic livestock industry from existing or emerging foreign or domestic animal disease outbreaks, safeguarding livestock and public health. Currently, no mRNA vaccines are approved for administration to animals in the U.S. even though one RNA vaccine has been licensed for use in swine. Research and scientific review of mRNA vaccines in livestock is crucial to provide livestock producers with access to all approved and available technologies.



NASDA members urge U.S. agencies to collaborate on strategies to address agricultural labor shortages

Wednesday at the 2024 Winter Policy Conference, members of the National Association of State Departments of Agriculture encouraged federal agencies to develop strategies that address agricultural labor shortages across the country.
 
The action item aims to encourage the United States Department of Agriculture, the United States Department of Labor and the United States Department of Homeland Security to immediately collaborate on a strategy to secure the labor force and ensure the success of the nation’s agricultural industry. NASDA simultaneously urges Congress to pass comprehensive immigration reform to ease agricultural workforce challenges.
 
“Labor shortages in the agricultural industry affect the entire supply chain, making it more difficult for the country to compete in the global marketplace and threatening our overall food and national security,” NASDA CEO Ted McKinney said. “With many changes in wage rates and proposed regulations in the past few months and years, NASDA members are navigating this issue in their states as farmers and ranchers operate in a complex regulatory environment. Our producers need federal agencies who oversee the H-2A and H-2B process, specifically the Department of Labor and Department of Homeland Security, to work collaboratively with USDA to develop a long-term strategy for addressing these challenges.”



Shrinking Supply of Dairy Heifers May Limit Growth of U.S. Milk Production

A sharp decline in the number of dairy heifers available to replace older cows exiting the U.S. dairy herd could limit any meaningful growth in domestic milk production over the next few years. The number of dairy replacement heifers has fallen almost 15% over the last six years to reach a 20-year low, according to data from the USDA’s most recent Cattle report. While the global demand outlook for U.S. dairy products remains murky due to export market uncertainties, any potential growth opportunities may be stymied by an inability to expand U.S. milk production.

According to a new report from CoBank’s Knowledge Exchange, the rising cost of rearing dairy heifer calves has far outpaced increases in heifer values over the last several years. That imbalance has prompted dairy farmers to reduce their heifer replacement inventories, in large part by breeding more dairy heifers and cows to beef bulls. Contraction in the U.S. beef herd due to drought and other adverse conditions has led to record high prices for beef cattle and retail beef products.

“Raising dairy heifers has been a losing proposition for most farmers in recent years, to the tune of $600 - $900 per animal,” said Corey Geiger, lead dairy economist for CoBank. “To better manage on-farm heifer inventories, dairy farmers have turned to using beef semen on a portion of their dairy herd to reduce the number of replacement heifers. That’s enabled farmers to cut the costs associated with raising heifers and generate additional income from beef sales.”

Less than a decade ago, dairy heifers sold for a tidy profit, but rearing costs today mean they sell at a loss. While heifer rearing cost estimates vary, they are all trending upward. University of Wisconsin Extension survey data from 1999 to 2015 found the total cost to raise a dairy heifer from birth to entering the milking herd climbed from $1,360 to $2,510 per head. In a similar analysis looking at 2016 to 2021, Penn State Extension specialists calculated heifer rearing costs averaged $2,034.

Meanwhile, heifer values have not kept pace with higher rearing costs. From April 2018 to January 2022, the sale price of dairy heifers never exceeded $1,400 per head, according to USDA’s Agricultural Prices report. The discrepancy between rearing costs and sale value led to a prolonged and steady decline in replacement heifers in recent years.

Some fluctuation in the population of replacement heifers is a natural outcome of market and economic forces. But a sufficient inventory is important to the continuity of U.S. milk production and critical to the industry’s ability to expand. While the number of replacement heifers has dropped to a 20-year low, the overall U.S. dairy herd has been stable with 9.3 million to 9.4 million head of dairy cows over the last six years.

The steep drop in heifer supply went largely unnoticed until recently, when dairy farmers went looking to buy now-scarce replacements. As a result, dairy replacement prices have now jumped to an eight-year high, with USDA data and auction market reports ranging from $1,890 to $2,800 per head. These higher replacement values will likely be in place for the foreseeable future given the tight supply.

Geiger said the shrinking replacement pipeline will impact the ability to grow U.S. milk production for some time. “Even if dairy producers reverse course and use more dairy bull semen in the coming years, it will be two to three years before the resulting dairy calves even reach the milking barns,” he said.