Everyone is invited to attend the Nebraska Loess Hills RC&D Council’s annual meeting on Thursday, November 10, 2011 at the Silver Hills Winery in Tekamah. The meeting will start at 5:00 p.m. with social time featuring a variety of appetizers and Silver Hills award winning wines. The cost is $10.00 per person for the food. Wine tasting is $5.00 and wine may also be purchased by the glass or bottle.
After the social time, Pam Bergstrom, NRD/NRCS Forester will speak about tree damage from flooding and tree programs/assistance currently available. This presentation will be followed by a brief business meeting.
Please RSVP no later than 5:00 p.m. Tuesday, November 8th if you plan to attend. Either call the RC&D Council office at (402)687-9499 (leave a message including number of people attending) or email to: deb.ward@nlhrcd.org.
If you have questions please contact the RC&D Council office.
Labor Dept. to Allow Ag Producers Extended Input on Proposals
Nebraska's Senator Ben Nelson and Sen. Jerry Moran of Kansas have secured extra time to make sure the voices of farmers, ranchers and other agricultural producers are heard on a proposed rule that could change the structure of family farms and have a negative impact on the education of the next generation of farmers.
On Sept. 2, the U.S. Department of Labor announced proposed changes to the Fair Labor Standards Act, which could, among other provisions, prohibit children younger than 15 from working on a farm or ranch that is not directly owned by their parents.
Citizens were initially given until November 1, 2011, to submit comments on the proposal, making it difficult for agricultural producers who are in the midst of the harvest season to register their comments.
Having heard concerns from farmers and ranchers in Nebraska, Kansas and across the country, Nelson and Moran sent the Labor Department a letter last week stating their concerns and seeking an extension of the comment period on the proposed rule.
Last week, the Labor Department notified the senators that the comment period would be extended an additional 30 days.
Nelson and Moran believe the proposed rule fails to reflect the reality that ownership patterns of agricultural operations have changed over time, as farms and ranches have been passed from one generation to another. For instance, it is common for siblings to jointly own and operate farms and for extended families and neighbors to participate in agricultural production. The proposed rule could fundamentally alter these dynamics.
"One out of every three jobs in Nebraska is tied to agriculture. We need to increase opportunities for our family farmers and ranchers to strengthen our rural economies, not threaten them with new, unneeded regulations from Washington," Senator Nelson said. "Nebraskans deserve the time to make sure their voices are heard on this misguided rule. It is another example of Washington being out of touch with Nebraskans' values."
Additionally, cooperative extension programs and vocational education programs, such as 4-H and Future Farmers of America, are critical for training the next generation of leaders in American agriculture. The proposed rule would put the activities of these organizations in danger.
"Nebraska's farmers and ranchers have a great number of issues with Department of Labor's proposal. Our main concern, however, is that the rule will drastically limit the ability for young people to gain valuable knowledge and experience in the many facets of agriculture," Nebraska Farm Bureau President Keith Olsen said. "The proposed rule would make it even harder for the next generation of farmers and ranchers to develop the interest and work ethic necessary to come back to farm or ranch. It simply does not make sense for Nebraska agriculture."
During the month of October, Nelson and Moran built support among their colleagues for extending the public comment period on the rule. The letter they sent to Labor Secretary Hilda Solis on Tuesday was signed by 32 U.S. senators.
"If allowed to move forward in its current form, [the rule] would have vast implications for the agriculture industry. The original 60 days allowed for comment are not enough for the affected parties to express their concerns," Nelson and Moran wrote in the letter to Solis. "Not only would this regulation, as currently drafted, have far reaching effects on youth agricultural education programs, farms, ranches and other agricultural businesses, it could greatly impact the structure of family farms and rural communities in the states we represent. We strongly urge you to consider extending the comment period an additional 60 days."
In support of their effort, American Farm Bureau Federation President Bob Stallman said, "In towns from coast to coast, consumers enjoy a safe and affordable food supply due to the efficiency and performance of America's family farmers, but the Department of Labor's proposed regulations threaten the future of our industry. In addition to being the economic backbone of so many of America's towns, the traditions and the work ethic associated with growing up on a family farm are worth preserving, and the American Farm Bureau Federation appreciates Senators Moran and Nelson taking the lead on this important issue."
In addition to Nelson and Moran, the letter was signed by U.S. Senators Pat Roberts (R-Kan.), Debbie Stabenow (D-Mich.), Mike Johanns (R-Neb.), Max Baucus (D-Mont.), Roy Blunt (R-Mo.), Johnny Isakson (R-Ga.), Kent Conrad (D-N.D.), Mike Crapo (R-Idaho), Herb Kohl (D-Wis.), Dick Lugar (R-Ind.), Claire McCaskill (D-Mo.), Lindsey Graham (R-S.C.), Ron Wyden (D-Ore.), John Barrasso (R-Wyo.), Amy Klobuchar (D-Minn.), James Risch (R-Idaho), Jon Tester (D-Mont.), Chuck Grassley, (R-Iowa), Tom Coburn (R-Okla.), Mike Enzi (R-Wyo.), Jim DeMint (R-S.C.), John Boozman (R-Ark.), Dan Coats (R-Ind.), Jon Kyl (R-Ariz.), John Hoeven (R-N.D.), John Thune (R-S.D.), James Inhofe (R-Okla.), Orrin Hatch (R-Utah), Saxby Chambliss (R-Ga.) and Tom Udall (D-N.M.).
Yesterday, a Department of Labor official sent a memo responding to the senators' concerns. She wrote, "Because of the interest that has been expressed in this matter and the Department's desire to obtain as much information about its proposals as possible, the Department will announce in the Federal Register on Oct. 31 that it has extended the period for submitting public comment on the [rule] through Dec. 1." Individuals may voice their opinions on the rule through the Federal eRulemaking Portal at http://www.regulations.gov and clicking on "Child Labor Regulations, Orders and Statements of Interpretation: Violations-Civil Money Penalties."
"I encourage Nebraskans who appreciate the great traditions and contributions of our agricultural community to make their voices heard on this issue," Nelson said.
Larger Grain Bins May Need Added Fan Power
Tom Dorn, Extension Educator, Lancaster County
Many farmers are building larger grain bins than were common 30 years ago. A typical on-farm grain bin traditionally was 27 to 36 feet in diameter and would store grain to a depth of 18 to 22 feet. Many new grain bins are 42 to 48 feet in diameter and store grain to a depth of 28 to 32 feet — almost three times the volume of the earlier bins.
These large bins work well for storing dry grain when equipped with aeration fans capable of pushing 0.3 cubic feet of air per minute per bushel (0.3 cfm/bu) through the bin.
Many fan manufacturers produce a 10 hp axial-flow fan capable of producing 0.3 cfm/bu in a 48-foot diameter bin with corn 30 feet deep. In cases where there is low static pressure — the pressure required to push air through the grain bin — axial flow fans will produce more airflow than a centrifugal fan with the same horsepower.
Using a 48-foot diameter bin for drying corn is a much different situation. The minimum airflow recommended for drying corn in Nebraska is 1.0 cfm/bu. A 48-foot diameter bin with grain 30 feet deep would require three 40 hp centrifugal fans on separate transition ducts to produce 1 cfm/bu airflow.
Static pressure is affected by two parameters: grain depth and airflow (cfm/bu). At a given grain depth and airflow, the diameter of the bin does not affect the static pressure.
There are several management changes you could make to reduce the initial cost of the grain bin and associated equipment. These changes will also reduce operating costs for years to come. Reducing grain depth can reduce horsepower requirements significantly. In a 48-foot diameter bin
if grain were loaded into the bin to a depth of 30 feet, three 40 hp centrifugal fans could produce the needed 1.0 cfm/bu,
if grain were loaded into the bin to a depth of 25 feet, two 40 hp centrifugal fans could produce 1.0 cfm/bu, or
if grain were loaded to a depth of 18 feet, one 40 hp centrifugal fan could produce the required 1.0 cfm/bu.
Since the airflow remains the same in all three scenarios, the time required to dry the grain would be the same. Note: Two fans can dry 83% as much grain per batch as three fans. One fan can dry 60% as much grain per batch as three fans.
Drying Smaller Batches Cuts Costs
When buying a new bin, if you decide that you’re willing to dry smaller batches of grain at a time, one-third or even or two-thirds of the expense for fans, transition ducts, control boxes, and wiring can be saved. Also, for each fan that’s eliminated, the electrical use for fan operation drops 33%. Reducing grain depth from 30 feet to 25 feet eliminates one fan and associated equipment and reduces electricity use by 33%. Likewise, reducing grain depth from 30 feet to 18 feet reduces electricity use by 67%.
Distillers grains research initiative yields know-how more quickly
A three-year initiative that created a beef cattle advisory committee to oversee a research partnership between the Nebraska Corn Board and University of Nebraska resulted in a number of important breakthroughs when it comes to feeding distillers grains to cattle.
The initiative, which wrapped up this year, allowed an advisory committee to work with university researchers to more quickly identify research projects that would benefit cattle producers. The Nebraska Corn Board then provided funding for the projects. This reduced the lag time between research projects and doubled the amount of research conducted during the initiative.
“We were very pleased with how everything came together, as it allowed the corn checkoff to fund key research and more quickly advance the understanding of feeding distillers grains to cattle,” said Kelly Brunkhorst, director of research for the Nebraska Corn Board. “While this initiative has ended, the Nebraska Corn Board continues to fund research and further expand our knowledge and understanding of feeding distillers grains to cattle. We believe distillers grains, which are produced by ethanol plants, give Nebraska cattle producers a tremendous advantage in the marketplace, so the more we know the better.”
Some of the key results for feedlot cattle include:
- Drying distillers grains increases production cost, greenhouse gas emissions and does not have as positive an impact on cattle performance compared to using wet distillers grains. Modified distillers grains, meanwhile, is intermediate to wet and dry distillers grains. Understanding this has huge implications for Nebraska as Nebraska cattle producers can utilize wet distillers grains due to the proximity of corn, cattle and ethanol plants. “The research provided excellent results on comparing these types of distillers grains,” said Galen Erickson, a beef feedlot specialist with the University of Nebraska.
- A rumen degradable sulfur concept was established and better explains hydrogen sulfide production, which can cause the polio observed with high sulfur diets from distillers grains feeding. “Based on metabolism work on sulfur funded through the research initiative, we have degradabilities for different distillers grains, and hydrogen sulfide production in different feedlot diets containing distillers,” said Erickson. “Likewise, we have recommendations on polio incidence as dietary sulfur and rumen degradable sulfur increase in feedlot diets.”
Some of the key results for cattle on forage include:
- The energy value of distillers grains in forage based-diets was relatively unknown and a major need by the industry. “Thanks to research conducted through the initiative, this is now known and is well established,” said Aaron Stalker, a beef range specialist with the university. The comparison was also made to other major energy supplements in forage diets, such as corn.
- Research also found that replacing nitrogen fertilizer by supplementing distillers grains to grazing cattle will have major implications and has been effective in intensely grazed pastures. “Plus, supplemented cattle have greater removal of nitrogen, from supplement compared to fertilizer, and perform better,” Terry Klopfenstein, professor of animal science added.
While many important strides were made over the last three years, the Nebraska Corn Board recognizes that additional research needs remain when it comes to distillers grains.
“Ethanol production technology continues to advance,” Brunkhorst said.
For example, some ethanol plants are extracting corn oil for other uses and that changes the distillers grains. “We need to understand that and devote resources to additional research,” Brunkhorst said, “but we have limitations simply because our budget is limited by what is available via the corn checkoff, which is the lowest of all leading corn states.”
Nebraska Wind Power 2011 Conference Agenda Released
The final agenda for the Wind Power 2011 Conference to be held in Kearney at the new Younes Conference Center November 15-16 has been released. The agenda is available at the Nebraska Energy Website: http://neo.ne.gov/renew/wind-working-group/2011conference/agenda.htm
The agenda is also posted at the Nebraska Farmers Union website at: http://www.nebraskafarmersunion.org
This year’s conference will include three separate tracks, 30 sessions, 60 speakers making 89 presentations, and over 40 commercial exhibitors and sponsors. The agenda provides details as to sessions and speakers.
The keynote speaker for Tuesday’s luncheon is James J. Hoecker, Past Chairman of the Federal Energy Regulatory Commission from 1997 to 2001. During that time he was responsible for instituting regional transmission organizations to administer the wholesale electric power system and streamlining the regulatory system. He is currently Senior Counsel and Energy Strategist for the Husch Blackwell law firm.
Wednesday’s keynote speaker is Nicholas (Nick) Brown, President and Chief Executive Officer of the Southwest Power Pool, Inc. Since Nebraska is now aligned with the Southwest Power Pool, their regional transmission planning and development directly impacts Nebraska’s state planning and development. State transmission development directly impacts the future development of Nebraska’s wind energy resources.
This year Professional Development Hours Certificates will be offered to those that attend various sessions at the Wind Power 2011 Conference. These certificates can be submitted to the various licensing boards to document continuing education requirements for license renewal. There will be sign-up sheets at the various sessions. The PDH Certificates will be emailed to attendees that sign up at the various sessions at the conference.
Tuesday, the third track will feature two nationally recognized small and directed wind pioneers and experts, Trudy Forsyth from the National Renewable Energy Laboratory in Golden, Colorado and Larry Flowers, Deputy Director of Community and Distributed Wind for AWEA who will release AWEA’s annual Small Wind Report. Trudy Forsyth will present sessions on small wind hardware standards, testing, and certification for both equipment and small wind installers as well as discuss the development of small wind around the nation with Larry Flowers.
Wednesday, the third track will have an outstanding set of presenters will outline the expanding University of Nebraska, Community College, and technical trainings opportunities available in our state. There will be sessions on Nebraska’s nation leading “Wind For Schools” program, career opportunities, and teacher training will be offered. Student scholarships are still available. For scholarship information, call Nebraska Farmers Union at 402-476-8815.
The discounted Pre-registration rates of $60 per person and $30 per student end November 7th. Then, online registrations and at the door the fees will be $75 per person and $45 for students. Registration fees include meals.
For Registration: http://neo.ne.gov/renew/wind-working-group/2011conference/register.htm. For Conference information: http://neo.ne.gov/renew/wind-working-group/2011conference/2011announce.htm
For Lodging: Wingate Inn: 308-237-4400 • Hampton Inn: 308-234-3400 • Fairfield Inn: 308-236-4200. The Hampton Inn and Fairfield Inn are connected by a hallway to the Younes Center. The Wingate Inn is just across the driveway from the main entrance.
Envisioning Tomorrow’s Weed Control and How to Get There
Steve Young, Extension Weeds Specialist
How will you control weeds in 10-20 years?
Look for sensor-driven, integrated weed management systems that identify weed species and immediately target the correct control measure for the plant growth stage and weed species. These systems could limit chemical applications to the micro dose needed, reducing herbicide amounts and practically eliminating drift and groundwater issues.
At UNL’s West Central Research and Extension Center, work is underway on targeted control systems for use with sensors and guidance systems that can identify and control weeds in real-time as a device moves through the field.
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| Robotic weed control could be an essential element of tomorrow's more targeted, integrated weed management systems. Researchers at UNL's West Central Research and Extension Center are looking at what these systems would need and how they could integrate the latest technologies in weed identification, biology, engineering, and weed control. (Illustration conceived by Steve Young and drawn by Michael Heller) |
The combination of plant recognition and various application technologies into a single platform will require integrating research in the fields of biology, engineering, and computer science. This single platform will incorporate sensors and decision support software so multiple application technologies can be accessed to provide directed weed management. Ideally, it would be a self-guided machine that could systematically comb the field to identify weeds and then apply the necessary control tool (e.g., spray, mow, cultivate) at the individual plant or patch scale.
From a biological approach, successfully integrating weed management requires an understanding of three key components:
- the effect of treatments on weed populations
- weed growth and development stages, and
- the critical period for applying control tools.
Control tools (e.g., mowing, spraying, cultivating) have different effects on weeds and without a complete understanding of the life history of the target weed(s) and crop, the development of effective and efficient robotic systems will be challenging, if not impossible. In most crops, there is a period when weed control is critical to avoid yield loss. An autonomous robotic system that doesn’t consider timing of weed removal will perform poorly in current cropping systems. For a robotic system to respond to critical periods of crop growth, it must be either manually sent into the field or programmed to perform weed control operations that are in sync with crop growth stage.
In a true integrated weed management system that uses the latest machine-based guidance systems with sensors and decision control systems, weed identification and control applications could occur simultaneously moving across a field.
Research Needs
An immediate research need in this area is to refine targeted application methods for quantifying micro-dose herbicide rates suitable for effective weed control. The research team at the West Central REC is conducting a series of related greenhouse studies and has proposed additional studies.
In the future, a single platform will need to have more than one tool for use in the field for controlling weeds. Greater collaboration among scientists in the fields of weed science and biological and computer science can help achieve two major goals:
- combination of weed management tools into one operation to allow for a truly integrated system, and
- advancement of more sustainable integrated weed management programs that result in reduced environmental contamination and human exposure to chemicals, as well as inputs needed to economically control weeds.
October Farm Prices Received Index Increased 6 Points
The preliminary All Farm Products Index of Prices Received by Farmers in October, at 185 percent, based on 1990-1992=100, increased 6 points (3.4 percent) from September. The Crop Index is up 3 points (1.5 percent) and the Livestock Index increased 1 point (0.7 percent). Producers received higher prices for cattle, eggs, hogs, and sweet corn and lower prices for corn, milk, wheat, and soybeans. In addition to prices, the overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased monthly movement of soybeans, corn, grain sorghum, and sunflowers offset the decreased marketing of wheat, milk, hogs, and hay.
The preliminary All Farm Products Index is up 34 points (23 percent) from October 2010. The Food Commodities Index, at 173, increased 6 points (3.6 percent) from last month and increased 26 points (18 percent) from October 2010.
Prices Paid Index Unchanged
The October Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 205 percent of the 1990-1992 average. The index is unchanged from September but 20 points (11 percent) above October 2010. Higher prices in October for feeder cattle, complete feeds, concentrates, and supplements offset lower prices for diesel, feed grains, LP gas, and gasoline.
Prices Received by Farmers
All crops: The October index, at 206, increased 1.5 percent from September and 26 percent above October 2010. Index increases for oilseeds more than offset the index decreases for feed grains & hay, food grains, and commercial vegetables.
Food grains: The October index, at 229, is 6.9 percent below the previous month but 21 percent above a year ago. The October all wheat price, at $6.94 per bushel, is down 61 cents from September but $1.06 above October 2010.
Feed grains & hay: The October index, at 257, is down 4.5 percent from last month but 39 percent above a year ago. The corn price, at $5.92 per bushel, is down 45 cents from last month but $1.60 above October 2010. The all hay price, at $181 per ton, is up $5.00 from September and $70.00 higher than last October. Sorghum grain, at $11.10 per cwt, is 60 cents higher than September and $3.30 above October last year.
Oilseeds: The October index, at 208, is up 3.5 percent from September and 24 percent higher than October 2010. The soybean price, at $11.90 per bushel, decreased 30 cents from September but is $1.70 above October 2010.
Livestock and products: The October index, at 153, is 0.7 percent above last month and 14 percent higher than October 2010. Compared with a year ago, prices are higher for cattle, hogs, milk, eggs, calves, and turkeys. Prices for broilers are down from last year.
Meat animals: The October index, at 155, is up 4.0 percent from last month and 25 percent higher than last year. The October hog price, at $68.80 per cwt, is up $1.70 from September and up $15.50 from a year ago. The October beef cattle price of $116 per cwt is up $4.00 from last month and is $22.90 higher than October 2010.
Dairy products: The October index, at 152, is down 6.2 percent from a month ago but 7.0 percent higher than October last year. The October all milk price of $19.90 per cwt decreased $1.20 from last month but is up $1.40 from October 2010.
U.S. Supreme Court Takes Up Treatment of Pigs
The National Meat Association is challenging a California law regarding the treatment of pigs at slaughterhouses. The current California law says slaughterhouses must remove and "humanely euthanize" non-ambulatory pigs. The NMA is arguing that sometimes pigs are stressed, fatigued or stubborn and just refuse to get up and that claim that forcing slaughterhouses to cull 200 to 300 pigs a day just because they are lying down would cause severe financial stress on the pork industry. Federal laws state that such animals must be removed and inspected, although most do not need to be kept from the slaughterhouse. The NMA is asking the California court to repeal the law, arguing that it is trumped by the federal law. California Deputy Attorney General Susan K. Smith said California's definition of a non-ambulatory pig is one who is unable to stand and walk without assistance and that the law is intended to protect the human food supply and prevent animal cruelty.
Lenssen New ISU Soybean Production Systems Agronomist
Andrew (Andy) Lenssen joined Iowa State University (ISU) on Oct. 1 as a soybean systems agronomist with teaching, research and extension responsibilities. Lenssen comes to Iowa State from Sidney, Mont., where he was a research ecologist and lead scientist for USDA dryland research.
"Andy has a wealth of experience in agronomy and ecology that will be very beneficial to Iowa," said Kendall Lamkey, chair, ISU Department of Agronomy. "His most recent experience as a research ecologist in Montana broadens our extension, research and teaching portfolio here at Iowa State."
Lenssen has nearly two decades of experience conducting large-scale, long-term cropping system studies that he describes as very collaborative -- often times having worked with agronomists, ecologists, soil scientists, plant pathologists and entomologists. He will be taking a systems approach as he addresses the primary issues of Iowa soybean producers in his research and programming.
"Andy's experiences working with researchers and producers to evaluate and improve complex production systems is a great asset for extension," said John Lawrence, director, ISU Extension Agriculture and Natural Resources. "He has a proven record of pulling together effective teams that will help us identify profitable and sustainable soybean production systems."
Developing new collaborations will be necessary to address and solve Iowa soybean production problems and improve or increase soybean production sustainability, both economic and environmental sustainability, Lenssen said. His systems approach will look at the effects of genotype, inputs, tillage, crop rotation and other aspects related to growing soybeans in Iowa. Lenssen said this will provide answers to deeper questions than just crop profitability.
"Collaborative studies gain more useful knowledge on complex interactions," Lenssen said. "It takes a team to understand the interconnectedness of our actions, and field research to look at many of the bigger issues."
Lenssen earned doctorate and master's degree in agronomy at Kansas State University and a bachelor's degree in agronomy at Cornell University. When away from work he enjoys fly fishing, tennis and downhill skiing.
Agriculture Secretary Vilsack Announces Funding to Expand the Production and Availability of Advanced Biofuels
Agriculture Secretary Tom Vilsack today announced payments for 156 advanced biofuel producers across the country to support the production and expansion of advanced biofuels.
"This funding will help local producers increase the production and availability of renewable energy and thus help our nation begin to reduce its reliance on foreign oil," Vilsack said. "Just as importantly, USDA's support will help to further develop the nation's growing biofuels industry and generate green jobs and economic growth."
The funding is being provided through USDA's Bioenergy Program for Advanced Biofuels program. Under this program, payments are made to eligible producers to support and ensure an expanding production of advanced biofuels. Payments are based on the amount of biofuels a recipient produces from renewable biomass, other than corn kernel starch. Eligible examples include biofuels derived from cellulose; crop residue; animal, food and yard waste material; biogas (landfill and sewage waste treatment gas); vegetable oil, and animal fat. Through this and other programs, USDA is working to support the research, investment and infrastructure necessary to build a biofuels industry that creates jobs and conserves natural resources across America.
USDA today is announcing $44.6 million in payments to 156 local producers and business-owners.
Below is a partial list of award recipients by state:
Nebraska
Ag Processing, Inc. : $2,085,753.77 for Biodiesel Trans Esterification.
Horizon Biofuels, Inc. : $634.82 for Pellets.
Kaapa Ethanol, LLC: $2,829.49 for Ethanol Production.
Iowa
Clinton County Bio Energy, LLC: $131,831.49 for Biofuel From Waste Products.
Iowa Renewable Energy, LLC: $138,360.72 for Biofuel From Waste Products.
Renewable Energy Group, Inc.: $3,739,128.61 for Biodiesel Trans Esterification.
Western Dubuque Biodiesel, LLC: $487,871.16 for Biodiesel Trans Esterification.
Western Iowa Energy: $658,243.95 for Biofuel From Waste Products.
South Dakota
Hanson County Oil Producers, LLC: $6,599.50 for Biodiesel Trans Esterification.
Agricultural Banks Improve Profitability
Paul Ellinger, University of Illinois
The health of many commercial banks in the U.S. has improved in 2011. However, many of the large U.S. banks continue to face significant challenges, especially in their residential and commercial mortgage portfolios. Additional regulatory costs including the Dodd--Frank Wall Street Reform and Consumer Protection Act present challenges for small and large banks. As a share of total operating costs, these regulatory costs are greater for smaller banks. Regulators are also placing higher regulatory emphasis on banks with significant concentrations in industry sectors such as agriculture.
In spite of these headwinds, agricultural banks have improved profitability in 2011. The rate of return on assets (ROA) for agricultural banks (banks whose agricultural production loans plus real estate loans secured by farmland exceed 25 percent of total loans and leases) in the second quarter of 2011 was 1.13%, the highest quarter since the second quarter of 2008 (FDIC). This level exceeded the ROA for all FDIC insured banks (0.85) as well as banks with concentrations in commercial loans (banks whose commercial and industrial loans, plus real estate construction and development loans, plus loans secured by commercial real estate properties exceed 25 percent of total assets) and mortgage loans (banks whose residential mortgage loans, plus mortgage-backed securities, exceed 50 percent of total assets). Profitability at agricultural banks has exceeded all banks and banks concentrating on commercial or mortgage loans through the financial crisis and economic downturn. Moreover, 96% of agricultural banks were profitable in 2011Q2. This level of bank profitability has increased from a low of 61% in the second quarter of 2009.
Although elevated from pre-crisis levels, the ratio of problem loans to total loans at agricultural banks, is less than 50% of the level at all banks and banks concentrated in commercial loans or mortgages. Net charge-offs at agricultural banks have only exceeded 1% in 2009 Q4. Noncurrent loans (nonaccruing loans and loans past due more than 90 days) have not exceeded 2% and are clearly at levels below the banking sector as a whole and the banks with concentrations in commercial loans and mortgages.
The profitability of agricultural sector has certainly contributed to the improved profitability and strong loan portfolios at agricultural banks. Improved borrower profitability has also presented a challenge for many lenders in agriculture. Borrower repayment rates on agricultural loans have remained high and deposit levels at banks have increased. Loan-to-deposit levels at agricultural banks have dropped significantly since 2008. Given that growth in loan demand has slowed and returns on federal funds, government and agency securities are at all-time lows, profit margins at banks will likely decline.
In summary, the health of agricultural banks remains relatively strong and shows signs of improving. Increasing regulatory costs combined with modest to low potential loan growth present challenges to agricultural banks. Stress in the agricultural sector would obviously increase the challenges of all lenders to commercial agriculture.
MF Global Files for Bankruptcy
(AP) -- MF Global Holdings Ltd., the securities firm run by former New Jersey Governor and Goldman Sachs head Jon Corzine, is seeking bankruptcy protection one week after reporting its biggest-ever quarterly loss.
MF Global shares plunged 66 percent last week. Besides the loss of $186.6 million for the fiscal second quarter, investors were spooked when MF Global's debt was downgraded to junk status. Credit-rating agencies expressed concern about the firm's $6 billion portfolio of European debt.
MF Global appears to be the first major U.S. casualty of Europe's debt crisis, although last week it sought to reassure investors that the investment in European sovereign debt was prudent. It blamed the big loss on weaker-than-expected trading revenue and one-time costs.
The filing came after the New York Federal Reserve said it suspended MF Global from doing new business as a primary dealer. MF Global was one of 22 companies considered financially secure enough to sell US government debt on behalf of the Fed.
MF Global turned a profit just three times in the past 12 quarters. As the European debt crisis threatened to spread, investors and analysts focused on the company's holdings of debt from Belgium, Italy, Spain, Portugal and Ireland.
At worst, MF Global's bankruptcy could roil credit markets and make financial companies reluctant to lend to each other. It wouldn't equal the fallout from the failure of Lehman Bros. in 2008 because Lehman was bigger and more intertwined with other companies.
However, banks could be spooked temporarily by concerns about who lost money as a result of MF Global's bad bets. Fears about losses on European debt already have roiled markets for months.
NCBA’s Cattlemen to Cattlemen Live Show to Address State of Beef Cattle Industry
Drought, shrinking herd size, passage of the much anticipated free trade agreements, the outstanding proposed change to the U.S. Department of Agriculture (USDA) Grain Inspection, Packers and Stockyards Administration’s (GIPSA) marketing rules and record cattle prices have taken the U.S. beef cattle industry on a wild ride in 2011. The National Cattlemen’s Beef Association (NCBA) has been fighting for U.S. cattlemen and women each step of the way. Expert panelists will address these other important issues during NCBA’s Cattlemen to Cattlemen live call-in show Nov. 1, 2011, on RFD-TV at 8:30 p.m. EDT. Viewers will be able to ask questions of the panelists by calling 1-888-824-6688 or by emailing C2C@beef.org
Among the panelists will be NCBA President and Montana rancher Bill Donald; NCBA Chief Executive Officer Forrest Roberts, NCBA Vice President of Government Affairs Colin Woodall; and CattleFax Market Analyst Kevin Good.
“There is a lot of change in the beef cattle industry this year. We’ve experienced some major challenges but we’ve also had some significant wins in Washington, D.C.,” said Donald. “This live program will give viewers a chance to understand how these developments are having a positive impact on their livelihoods now and into the future.”
Viewers are also going to be encouraged to join NCBA. NCBA membership staff will be on hand to answer membership inquiries and talk to callers live about special membership incentives at 1-866-BEEF-USA. The program will be re-broadcast on RFD-TV Wed., Nov., 2, 2011, at 10:30 a.m. EDT and Sat., Nov. 5, 2011, at 9:00 a.m. EDT. In addition, all episodes of NCBA’s Cattlemen to Cattlemen are available on the program’s website at www.cattlementocattlemen.org.
Wells Issues Voluntary Recall Due to Undeclared Allergen
Wells Enterprises, Inc., LeMars, Iowa, in cooperation with the U.S. Food and Drug Administration (FDA) is voluntarily recalling a limited number of packages of its Blue Bunny Personals ice cream 5.5 fl oz. because it was mispackaged and contains undeclared wheat. People who have an allergy or severe sensitivity to wheat and/or have gluten sensitivities may be at risk from consuming these products.
On a limited number of packages, the lid describes the product as Blue Bunny Super Chunky Cookie Dough ice cream, and the carton portion of the package describes the product as Blue Bunny Peanut Butter Panic ice cream. The product inside the carton is Super Chunky Cookie Dough. The ingredient statement on the carton does not declare wheat, which is an ingredient in the Super Chunky Cookie Dough product.
The affected mispackaged product was distributed in 5.5 fl oz. Personals cartons, with Lot Number 10009 "Best Used By" date 10/1/2012, - UPC 0 70640 00463. The lot number and UPC can be found printed on the side of the carton.
The affected product was shipped to the following states: Kansas, Minnesota, Mississippi, Missouri, Iowa, Oklahoma, Nebraska, North Dakota, Tennessee, Florida, Wisconsin, Oregon, Pennsylvania, Indiana, Massachusetts, and Texas.
Wells Enterprises, Inc. became aware of the packaging error after receiving a report from a store that the lid and cup were for different products.
The allergy alert and recall relates only to the above mentioned mispackaged Blue Bunny ice cream. No other Blue Bunny ice cream products are affected.
No adverse reactions have been reported to date.
CNH Third Quarter 2011 Revenue Increases 30%; Operating Profit up 92%; EPS $1.13
CNH Global N.V. announced financial results for the quarter ended September 30, 2011. For the quarter, net sales increased 30% (26% on a constant currency basis) to $4.6 billion as agricultural equipment markets continue to perform well across the Group's geographical portfolio and the construction equipment market continues its recovery. Equipment Operations posted an Operating Profit of $460 million as a result of this increased equipment demand (with resulting increases in industrial utilization) and improved net pricing.
Net equipment sales for the quarter were 77% from agricultural equipment and 23% from construction equipment. The geographical distribution of revenue for the period was 42% North America, 29% EAME & CIS, 17% Latin America, and 12% APAC markets.
Year to date capital expenditures totaled $218 million, a 42% increase from the comparable prior period largely as a result of new product launches in both the agricultural and construction equipment segments: 73% of the capital spend in the period was on new products and production capacity. Equipment Operations generated $390 million of operating cash flow during the first nine months of the year as net sales levels and operating performance more than offset the increased net working capital needed to support business activity. CNH's Equipment Operations ended the period with a net cash position of $2.3 billion. The 31% effective tax rate for the third quarter 2011 is in line with the Group’s full year expectations of 32% to 38% for 2011.
Net income before restructuring and exceptional items for the quarter was $272 million as a result of improved top line and industrial operating performance, better results from the Group's unconsolidated subsidiaries and affiliates, and a lower comparable tax rate. This resulted in the Group generating a significant increase in diluted earnings per share to $1.13 (before restructuring and exceptional items) compared to $0.43 per share in the comparable period of 2010.
2011 Full Year Market Outlook
Demand in the agricultural and construction equipment markets is expected to remain firm for the balance of 2011 on the back of a positive environment in agricultural commodity prices and the consequent increase in planting and farming income estimates. Further, the environment for construction equipment continues to improve overall with the exception of the APAC region where the demand environment has begun to slow from its significant growth trajectory over the past 36 months.
FY 2011 World Wide Unit Growth Forecast
- Agricultural equipment demand up approximately 10%
- Construction equipment demand up 20-25%
Agricultural Equipment Industry and Market
Worldwide agricultural industry unit sales increased 12% compared to the third quarter of 2010. Global tractor sales grew 12% while global combine sales grew 16% for the quarter. North American tractor sales were flat, with the over 40 horsepower segment up 3%, and combine sales down 15%. Latin America sales of tractors decreased 9% and combine sales increased 56%. EAME & CIS markets improved for the quarter, with tractor sales up 25% and combines sales up 85%. APAC markets were up 14% in tractor sales and up 36% in combine sales.
CNH Agricultural Equipment Third Quarter Results
CNH’s net sales in the agricultural equipment sector increased 29% for the quarter (24% on a constant currency basis) as a result of solid trading conditions in every region. Net sales in the EAME & CIS markets continued their positive growth trajectory with reported revenue up 51% on the back of firm demand across all product segments. As a result of this increased unit volume in Europe and the CIS, comparative industrial capacity utilization in the region increased driving positive cost absorption. This benefit coupled with improved price realization and favorable product mix (to larger horsepower tractor and combine segments) resulted in a 3.0 percentage point increase in comparative operating margin to 11.5% for the period.
Third quarter tractor market share performance continues to be positive in Europe, and in line with the market in the over 40 horsepower segment in North America (on the back of solid demand for the Tier 4A/Stage IIIB compliant equipment). CNH also gained market share in Latin America despite an overall unit volume decline. Overall tractor market share was slightly down driven by the under 40 horsepower segment in North America and the highly fragmented low horsepower APAC markets. Combine market share improved in every region during the quarter. Industrial production and retail sales continue to be closely aligned during the period with resulting company and dealer inventory levels remaining largely unchanged.
In Europe, New Holland Agriculture confirmed its leadership introducing the Tier 4A/Stage IIIB ECOBlue SCR technology to the flagship CR Series Twin Rotor combines, featuring the all-new SmartTrax system for reduced soil compaction, and to the TC5070 and TC5080 combines for farm operations harvesting up to 300 ha. The brand also launched the new LM5020 and LM5030 compact telehandlers for livestock and light industrial applications, with industry leading maneuverability and operator comfort. The line-up of combines with ECOBlue SCR technology has been extended also in North America with the addition of five CR Series and three CX8000 Series Super Conventional models. The Dynamic Stone Protection system is available as an option for CR8090 and CR9090 as well as the new Opti-Spread technology for an evenly chopped straw distribution across the full header width. The new 880CF SuperFlex draper head, available on both combine series, provides closer cutting and better flotation. The Agritechnica jury recognized New Holland’s innovative technologies with five silver medals, in particular, the Braud 9090X olive harvester and the ECOBraud sustainable viticulture program, both also awarded by the SITEVI (international exhibition for the vine-wine & fruit-vegetable sectors) jury.
At the Farm Progress Show, in North America, Case IH introduced its new Efficient Power Axial-Flow 30 Series combines, Patriot 4430 sprayer and Maxxum tractors that deliver more power, burn less fuel and meet Tier 4 emissions standards. Case IH Axial Flow combines were found by independent researchers at the Göttingen University (Germany) to have the lowest overall operating costs, and the lowest spare parts costs of all models tested. Latin America executed a successful introduction of the new Case IH Magnum tractor series with 5 new models ranging from 235 hp – 340 hp, produced in Brazil that will address the productivity and performance needs of large customers. Also launched was the new Axial Flow 2566, Case IH’s first ever class 5 combine for the region.
The Case IH Diesel Saver Automatic Productivity Management (APM) System has been awarded the ASABE 2011 Rain Bird Engineering Concept of the Year Award for its fully integrated drive-train management system available on the Case IH Steiger 4WD and QUADTRAC tractors. This system controls the drive train for maximum operating efficiency with minimum fuel consumption while reducing operator fatigue and noise.
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