Thursday, December 29, 2011

Thursday December 29 Ag News

AGP Annual Meeting Jan. 19-20 near Omaha

Members and guests will be joining their fellow cooperators at the 28th Annual Meeting of Ag Processing, Inc. on Jan. 19 and 20 near Omaha. The meeting will be held at the Embassy Suites Hotel & Conference Center in LaVista, Neb.

Election of directors will take place, along with management and financial reports on Fiscal 2011. Board nominees include:  from area 1 including Iowa, Gold-Eagle Cooperative General Manager Brad Davis of Goldfield, Iowa;  from area 2 including Minnesota, North and South Dakota, and Wisconsin, LaBolt Farmers Grain Company Board Chair Bruce Granquist of LaBolt, South Dakota;  and from area 3 including Illinois, Kansas, Missouri and Nebraska, Ag Partners Cooperative Board Member Larry Oltjen of Hiawatha, Kansas.  Copies of the 2011 AGP Annual Report will be distributed to member cooperatives.

In addition to an entertaining program for spouses, entertainment, guest speakers and exhibits, there will be special drawings for members and members' spouses for 12 $500 Visa gift cards throughout the annual meeting.

The guest speakers include James M. Olson, Dennis Gartmann and Carol Grace Anderson.

Born in LeMars, Iowa, Olson has a B.A. and a J.D. in international law from the University of Iowa. He was a career officer in the Directorate of Operations of the Central Intelligence Agency, serving mostly overseas in clandestine operations. He served as chief of counterintelligence at CIA headquarters in Langley, Va. Overseas assignments included the former USSR, Austria, and Mexico. He has experience in international affairs, economics, trade negotiations, intelligence support to the military and the law enforcement community, counterintelligence, counterterrorism, counter narcotics, and technical collection systems. He was a senior intelligence advisor to several U.S. ambassadors and had extensive liaison with many government agencies. He is also the author of "The Ten Commandments of Counterintelligence" and "Fair Play: The Moral Dilemmas of Spying".

Gartman has been involved in the capital markets since 1974 after graduating from North Carolina State University. He started his career at Cotton, Inc. and went to NCNB National Bank in Charlotte, N.C., before joining A.G. Becker & Company in Chicago. He was an independent member of the Chicago Board of Trade until he moved back to Virginia to run the futures brokerage operation for the Sovran Bank, and began producing "The Gartman Letter". Gartman has lectured on capital market creation to central banks and finance ministries around the world, and has taught classes on derivatives for the Federal Reserve Bank's School for Bank Examiners. He served as an outside director of the Kansas City Board of Trade from 2006-2008. He now serves on the Investment Committee of North Carolina State University.

Anderson is a sought-after speaker and best-selling author. She is a successful motivational expert and host of her own online show: "Get Fired UP!" She's been published in four languages and also contributed to the mega-best seller "Chicken Soup For The Soul" series.

Registration information for the annual meeting have been mailed to all AGP member cooperatives. For more information, contact the member and corporate relations office at 800-247-1345, ext. 5017.

Northeast Nebraska RC&D Council Meets

The Northeast Nebraska RC&D Executive Committee met on Tuesday, December 27, 2011 for the last meeting in 2011.

A new project was discussed and agreed upon for an upcoming E-Waste Recycling Event to be held during the month of February at the RC&D office.  The Council will know whether a grant will be forthcoming in January to help with this project.  More information will be available soon, so please watch your local paper and RC&D website for more details.

Northeast Nebraska RC&D will be hosting the Nebraska RC&D State Conference September 25 – 27, 2012 tentatively to be held in Wayne, NE.  Plans are being made for a successful Conference and hopefully bringing people from across the State to the Northeast Nebraska area.  A tentative theme of the Conference is “Reduce – Reuse – Recycle”. 
A new 2012-2014 Strategic Plan prepared by Volunteer Jan Jorgensen and a 2012 budget were reviewed for  full board approval next month.

The next Council Meeting will be held in Hartington at Outdoorsmen Productions, LLC on January 23, 2012  at 1:30 p.m.  Everyone is welcome to attend.   

ASA Tells Story of Success for Soybean Growers in 2011

American Soybean Association (ASA) farmer-leaders recently reviewed some of the key accomplishments from a year that saw ASA serve soybean farmers by protecting and increasing the market value and opportunities for U.S. soybeans.

“ASA members play an effective role in domestic and international policy development,” said ASA President Steve Wellman, a soybean producer from Syracuse, Neb. “Working with our state affiliates and industry partners, ASA advanced soybean farmer interests in numerous areas in 2011.”

The essential elements of ASA’s 2012 Farm Bill proposal that would help farmers manage risk were included in the Farm Bill developed by the House and Senate Agriculture Committees in 2011.

“Even though the Super Committee process failed, ASA’s collaborative work with Ag Committee leadership and the progress made on a revenue program that complements crop insurance will be key to maintaining our forward momentum toward a Farm Bill next year,” said ASA Chairman Alan Kemper, a soybean producer from Lafayette, Ind. Kemper served as ASA President in 2011.

ASA successfully pressed for passage of free trade agreements with South Korea, Colombia and Panama that represent nearly $3 billion in additional agricultural exports. ASA also worked to maintain access for U.S. soybean exports to the European Union (EU) by addressing the EU’s Renewable Energy Directive.

ASA worked to protect the GPS signals and equipment important to farmers by urging additional testing of the interference caused by a proposed nationwide broadband network.

“Record U.S. soybean production and export values and record biodiesel production were clear indicators of the benefit of ASA’s long-term efforts to increase both domestic and international market demand,” Kemper said. “While we are proud of our work, this is a shared record of accomplishment that was made possible by the work of ASA, our state affiliates, the soybean checkoff at both the national and state levels, and our industry partners.” 

“ASA had a highly successful year in 2011 for our members and soybean farmers, and 2012 promises to be a year full of challenges,” added Wellman. “ASA will continue its close involvement in the development of the new Farm Bill; defend biodiesel’s renewable fuel standard and work to extend the biodiesel tax incentive; fight regulatory overreach; and increase market access for U.S. soybeans.”

See ASA’s complete summary of accomplishments for soybean growers in 2011 at

Pork Demand from Abroad Supports U.S. Hog, Corn Markets

Increased export demand for U.S. pork is raising pork profitability and leading to an overall rise in the national hog inventory according to a December reports released by the U.S. Department of Agriculture's National Agricultural Statistics Service and Economic Research Service. The National Corn Growers Association welcomes this growth, which translates into stronger demand for corn and distillers dried grains.

"Corn farmers value our relationship with the hog industry, which consistently provides an important market for our product," said NCGA President Garry Niemeyer. "In 2011-12 marketing year, it is estimated that hogs will consume 960 million bushels of corn. As demand grows for pork both internationally and domestically, corn farmers benefit also thus reinforcing the importance of cooperation among all sectors in the agricultural community."

USDA Economic Research Service projects a significant increase in pork exports during the fourth quarter of 2011, with 1.4 billion pounds of pork exported during this period. This 22 percent increase over fourth quarter exports in 2010, if realized, would set total 2011 U.S. pork exports at more than 5.1 billion pounds. Further agency estimates indicate these levels will hold in 2012.

In addition to strong demand for U.S. pork abroad, domestic demand could also see a slight increase in 2012. Service estimates foresee this demand increase as the market balances against projected reductions in beef and poultry production.

The rise in demand has already increased production, which should be sustained in the coming year. NASS reports indicated that, as of December 1, the total U.S. hog inventory stood at 65.9 million head, two percent higher than at that time last year with the breeding herd expanding at the same rate during that period. While the rate of sows farrowing fell by one percent from September 1, an increase in the number of viable pigs produced per litter hit a record high of 10.02 offsetting the drop in sows.

The overall increases in pork production, export and in domestic demand have not only resulted in a rise in demand for corn, but also in demand for distillers dried grains, an ethanol co-product. Hog sector interest in and demand for DDGs increased steadily over the past few years to take advantage of the quality protein option that it offers at a low cost.

Weekly Ethanol Stocks, Plant Output Up

Domestic ethanol inventories posted a modest build of 11,000 barrels (bbl) to 17.674 million bbl during the week-ended Dec. 23, putting the total supply 4.9% higher than a year earlier, according to data released Thursday by the Energy Information Administration.  The inventories climbed as production from domestic plants increased 19,000 barrels per day (bpd), or 2.0%, to 962,000 bpd last week, which is 5.4% above the level seen a year ago.

On demand, refiner and blender net inputs came in at 836,000 bpd last week, up 1,000 bpd, or 0.12%, from the prior week and 1.3% higher than the year-ago level.  Refiner and blender net inputs represent a major portion of implied demand for ethanol.

Meanwhile, implied demand for motor gasoline rose 44,000 bpd to 8.923 million bpd for the week, while four-week average demand at 8.8 million bpd was down 5.6% from the year-ago level.

Crop Insurance Payouts Climb Over $7 Billion in 2011

Crop insurance companies have paid out more than $7.1 billion and climbing in claims so far this year, which makes 2011 second only to 2008's $8.6 billion in the total value of indemnities paid out to farmers.

The combination of several large-scale floods in the Central U.S., record droughts in the southern plains, a strong tropical storm in the Northeast and a hard freeze in Florida set the stage for the widespread agricultural losses.

Without insurace, many say the major losses from natural disasters or market fluctuations could have lead to widespread bankruptcies and foreclosures.

According to the USDA, net farm income is forecast at $100.9 billion for 2011, up $21.8 billion for a rise of 28 percent from 2010. All three measures of farm sector earnings (net farm income, net cash income, and net value added) are forecast to rise more than 18 percent in 2011.

Mosaic To Reduce Phosphate Production

Mosaic Co. said it would cut phosphate production by up to 250,000 tons over the next three months in response to market oversupply, though still expects record demand for crop fertilizers next year.

The company said dealers and distributors had delayed buying ahead of the North American crop season because of wider economic uncertainty. Prices had fallen but are seen recovering as farmers use an above-average amount of crop nutrients next year.

The cut by the world's largest producer of potash and phosphate for crop use comes just four weeks after Mosaic told investors the market was in balance, with global demand for the two nutrients seen rising by as much as 12% in the 2012/2013 growing season.

"The current spot prices in this market do not reflect our outlook for the business, nor do we think they are sustainable," President and Chief Executive Jim Prokopanko said in a statement.  Global industry phosphate production is expected to reach 60 million tons this year, rising to a record 64 million in 2012, Mosaic told investors last month.

Mosaic and rivals such as Potash and Germany's K+S AG have benefited from rising worldwide needs for food, with fertilizer capacity increases countered by rising demand.  However, in recent months spot-market prices have been tumbling as buyers have been delaying purchases and reducing inventories.

China DDG Imports Down

China's imports of distillers dried grains fell 48.6% in the first 11 months to 1.5 million metric tons, the state-backed China National Grain and Oils Information Center said Thursday.

The corn-based animal feed was the subject of an antidumping probe against U.S. exporters, which the Ministry of Commerce on Wednesday said it would extend by six months to June 28.  (see more below) 

Imports of the agricultural commodity this year have continued to come largely from the U.S., the CNGOIC said, attributing the sharp decline to Beijing's antidumping investigation.

Imports of U.S. DDG rose 3.8 times last year from 2009 to 3.16 million tons, sparking bilateral trade tensions. In 2008, China imported just 45,000 tons of the commodity, which is a byproduct as corn is turned into ethanol.

Before 2008, there were "hardly any" DDG imports, the CNGOIC said.

Chinese Government to Extend U.S. DDG Anti-Dumping Probe

Almost exactly one year after launching an anti-dumping probe into distillers dried grains exported to China from the U.S, the Chinese government announced Wednesday it will extend that probe until June 28 before making a final ruling. 

China's Commerce Ministry said that the case was "special and complicated" and warranted the extended months for their investigation.

China institute the probe the week before New Year's last year, claiming the alleged U.S. dumping of DDG into their livestock markets presented unfair competition on the country's own ethanol producers who could not produce DDG as cheaply because of high domestic corn prices.

Some in the industry believed the move was part of the continuing trade disputes between the U.S. and China. In 2009, China imposed antidumping duties on U.S. chicken to prevent the U.S. from harming its own poultry industry, prompting the U.S. to file a complaint with the World Trade Organization against China, complaining its wind power subsidies were unfair.

Some considered the move puzzling, since China cannot provide all the feed it needs for its livestock industry and must import feedstuffs such as corn, soybeans and DDG.

The probe, however, caused DDG exports to China to plummet, as Chinese buyers ceased their purchases in fear that high tariffs could be implemented as a result of the probe.

According to the U.S. Department of Agriculture's Foreign Agricultural Service, China's DDG imports in the first 10 months of 2011 totaled slightly more than 1.1 million metric tons of DDG in the first 10 months of 2010, a marked decrease from nearly 2.2 mmt in the first 10 months of 2011. The total DDG imports to China for 2010 were more than 2.5 mmt, a staggering figure considering China only began importing U.S. DDG in 2007.

The U.S. Grains Council had announced in mid-December that Chinese interest in U.S.-produced DDG seemed to be on an upswing, especially after the Council held a series of successful DDG workshops in Guangzhou and Qingdao.

The U.S. Grains Council has worked extensively toward a positive resolution to the investigation to preserve trade relations.

Wednesday, December 28, 2011

Wednesday December 28 Ag News

Environmental Lawsuits Could Have Major Impact in 2012

The National Corn Growers Association is currently involved in two major pieces of environmental litigation that will likely be decided in federal court in 2012. This could have major implications for future environmental regulations.

Earlier this year, NCGA joined with the American Farm Bureau Federation and other agricultural organizations to challenge the Environmental Protection Agency's Total Maximum Daily Load for nitrogen, phosphorus and sediment in the Chesapeake Bay. The farm groups stated the Chesapeake Bay TMDL goes beyond the scope of Clean Water Act authority, that the science used by the Agency is flawed and that the regulatory process lacked transparency. The case has been filed in a federal court in Pennsylvania.

The outcome of this lawsuit could establish significant precedent for future water quality regulations throughout the country. Many corn growers are concerned that the Chesapeake Bay TMDL could be used as a blueprint for addressing nitrogen, phosphorus and sediment runoff in the Mississippi River Basin and other watersheds. In recent months, EPA has begun to publicly question its own confidence in the agency's water quality modeling, particularly for establishing localized nutrient allocations.

The second lawsuit involves pesticide registrations and their potential impact on endangered species. The Center for Biological Diversity filed a suit against EPA in 2011 alleging that the agency failed to consult with the Fish and Wildlife Service and National Marine Fisheries Service on hundreds of pesticide registrations potentially affecting hundreds of species.

EPA has lost similar cases in recent years and federal judges have often established buffer zones and product restrictions until interagency consultations between EPA, FWS and NMFS could be conducted. NCGA and other agricultural organizations are interveners in the CBD case to ensure that growers have a seat at the table in any potential settlement negotiations.

Insurers Worry That 2012 Will Top Past Year's Weather Disasters

From floods that crippled countries, to mega cyclones, huge blizzards, killer tornadoes to famine-inducing droughts, 2011 has been another record-breaker for bad weather.  While it is too early to predict what 2012 will be like, insurers and weather prediction agencies point to a clear trend: the world’s weather is becoming more extreme and more costly.

A La Niña event in the Pacific Ocean is expected to last well into 2012. The phenomenon is a cooling of waters in the central Pacific and has a global impact on weather.  Forecasters expect it to bring above-average rains to northern and eastern Australia and more cyclones than normal during the Australian November-April storm season. La Niña events also tend to strengthen the Atlantic hurricane season.

Colorado State University researchers expect an above-average hurricane season if conditions that bring warmer than usual tropical water temperatures in the Atlantic continue and there are no major El Nino events.  Winter across Europe and the United States is also expected to be milder, forecasters say.

Dry Outlook for S. Brazil, Argentina

Brazil's southernmost soy state Rio Grande do Sul will have little rain in the next fortnight, forecaster Somar said on Wednesday, putting the newly sown crop there at greater peril of losses while Argentina's soy regions also remain dry.  The No.3 soy state in Brazil, the world's No.2 soy producer, sows its crop later than many others, a factor that may still help it dodge disaster even if rains keep away for a while longer.

"There is some rain coming (to Rio Grande do Sul) but it is not the kind of rain that would resolve the problem," Somar meteorologist Celso Oliveira said.  "The pattern of rain and drought will continue for at least two weeks," Oliveira said, referring to erratic weather caused by the La Nina anomaly over the Pacific bringing abundant rain to key soy regions further north while leaving the far south bereft of moisture.

In Brazil's Mato Grosso do Sul, whose crop is more advanced than Rio Grande do Sul, Somar data showed rain would pick up in the next few days, bringing some relief to an area that has had less than half the usual rain for December so far this month.  "Brazil is in a complicated situation. (The rain) is badly distributed, raining too much or not arriving at all in places," Oliveira said.

The No.1 Brazilian soy-producer state, Mato Grosso, has seen more adequate weather and will need a certain amount of dryness to ensure machinery can enter the fields to begin harvesting due to start within days.

There is still no forecast for rain in any key soy areas in neighboring Argentina, the world's No.3 soy grower and biggest exporter of many soy-derived products.

Crop Scout Cuts S. America Crop Size

Widely followed crop scout Michael Cordonnier has cut his estimates for South American corn and soybean production for 2011/12 and indicated further reductions may be necessary.  "Certainly this is an ominous forecast and if it verifies it would cause more harm to the crops and begin to stress soybeans when they're flowering and setting pods," Cordonnier said.

Cordonnier said he cut his outlook for Brazilian corn production to 60 million tonnes from his previous forecast for 63 million and reduced Argentine corn production to 27 million tonnes from his previous outlook for 28.0 million.

"Corn production is cut more than soybeans. It has been dry when corn is pollinating in Brazil's Rio Grande do sul and west Parana," Cordonnier said.

Cordonnier trimmed his forecast for Brazilian soybean production to 74.0 million tonnes from his previous outlook for 75.0 million and pegged Aregentina's soy output at 53.0 million compared with 53.5 million previously.

The U.S. Department of Agrculture (USDA) in early December pegged Brazilian corn output at 61.0 million tonnes and Argentine corn output at 29.0 million.  USDA's current forecast for Brazilian soy for 2011/12 is 75.0 million tonnes and for Argentina 52.0 million.

Branstad, Reynolds Announce IRS Rule for Flooded Homeowners

Gov. Terry Branstad and Lt. Gov. Kim Reynolds announced that the Internal Revenue Service (IRS) has approved the Branstad/Reynolds Administration's request for a temporary waiver of income restrictions on federal housing tax credit properties throughout the state to assist Iowans who may have been displaced by the Missouri River flooding last summer. The Iowa Finance Authority administers the federal housing tax credit program in Iowa and a listing of properties is available at:

"The IRS approval of our request for affordable housing relief means that hundreds of Iowans who may have been displaced by the Missouri River flooding, but may not have been income-qualified to live at a federal housing tax property now have that option," said Branstad. "Lieutenant Governor Reynolds and I are committed to providing flood-impacted Iowans with the essential tools they need to successfully rebuild a safe, decent and affordable place to call home."

"Having adequate housing is at the core of strong families and vibrant communities. By allowing Iowans who have been displaced by the floods access to hundreds of affordable housing properties throughout the state, we're arming them with a tool that will be vital in their rebuilding process," said Lt. Governor Reynolds.

Eligible Iowans must have resided in one of the five counties that were designated for Individual Assistance by the Federal Emergency Management Agency (FEMA) during the period of May 25, 2011, to August 1, 2011. These counties include: Fremont, Harrison, Mills, Monona and Pottawattamie counties.

More than 1,200 Iowans have registered for FEMA Individual Assistance as of December 19, 2011.

Mountain Lion Shot in Monona County

An adult male mountain lion was shot and killed right before Christmas by local law enforcement officers in the Monona County city of Blencoe.

The Blencoe police chief and a Monona County Sheriff's Deputy responded to a citizen's call regarding the mountain lion around midnight on Friday. After finding the lion in a tree in the northwest part of town, the officers shot the lion.

The lion will be analyzed to determine its age, what it has been feeding on as well as DNA tests to try and determine its place of origin. The lion will eventually be mounted and used as a display somewhere in Monona County.

Iowa law does not provide wildlife protection to mountain lions.

Mountain lion sightings have been documented periodically in Iowa and DNR biologists believe that most of the lions seen here are likely young males that have been pushed from their native areas by older, dominant males. The lion likely came from a state west of Iowa.

Generally a mountain lion will sense human presence before humans know they are in the area and the mountain lions will quickly vacate the area.

Sightings of a mountain lion can be reported to local law enforcement or to DNR conservation officers.

Iowa Chicken and Egg Numbers Up

Egg production in Iowa for November 2011 was 1.19 billion eggs, up 2 percent from October 2010, according to the Chickens and Eggs report released by USDA, National Agricultural Statistics Service.  The total number of layers on hand during November 2011 was 52.3 million, up from 51.7 million layers in November 2010.  Eggs per 100 layers for the month of November was 2,241 eggs, up from 2,210 eggs the previous year.

USDA:  November Egg Production Up 1 Percent

United States egg production totaled 7.61 billion during November 2011, up 1 percent from last year. Production included 6.62 billion table eggs, and 999 million hatching eggs, of which 932 million were broiler-type and 67 million were egg-type. The total number of layers during November 2011 averaged 338 million, down slightly from last year. November egg production per 100 layers was 2,253 eggs, up 1 percent from November 2010.
All layers in the United States on December 1, 2011 totaled 338 million, down 1 percent from last year. The 338 million layers consisted of 286 million layers producing table or market type eggs, 50.1 million layers producing broiler-type hatching eggs, and 2.78 million layers producing egg-type hatching eggs. Rate of lay per day on December 1, 2011, averaged 75.4 eggs per 100 layers, up 1 percent from December 1, 2010.

Egg-Type Chicks Hatched Down 3 Percent

Egg-type chicks hatched during November 2011 totaled 37.5 million, down 3 percent from November 2010. Eggs in incubators totaled 40.1 million on December 1, 2011, up 6 percent from a year ago.

Domestic placements of egg-type pullet chicks for future hatchery supply flocks by leading breeders totaled 218 thousand during November 2011, down 17 percent from November 2010.

Broiler-Type Chicks Hatched Down 5 Percent
Broiler-type chicks hatched during November 2011 totaled 704 million, down 5 percent from November 2010. Eggs in incubators totaled 609 million on December 1, 2011, down 5 percent from a year earlier.

Leading breeders placed 6.89 million broiler-type pullet chicks for future domestic hatchery supply flocks during November 2011, down 9 percent from November 2010.

Urea Prices Head Back to Earth

As has been the case the past three weeks, declining fertilizer prices are continuing, according to retail fertilizer prices tracked by DTN for the third week of December. While commodity prices have rebounded recently, fertilizer prices have continued to decline during this time. 

Seven of the eight major fertilizers had lower prices compared to the third week of November. Urea featured a 9% decline in price compared to last month. The fertilizer now has an average price of $573 per ton.  The remaining six fertilizers with lower prices compared to a month earlier had relatively small decreases in price. DAP had an average price of $690/ton, MAP $729/ton, potash $658/ton, anhydrous $805/ton, UAN28 $394/ton (its first drop below $400/ton since the fourth week of August 2011) and UAN32 $448/ton.

The remaining fertilizer, 10-34-0, showed a slight increase in price compared to the third week of November. The starter fertilizer had an average price of $830/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.62/lb.N, anhydrous $0.49/lb.N, UAN28 $0.70/lb.N and UAN32 $0.70/lb.N.

Even with recent price relief, latecomers will be paying significantly more than they did a year ago. Six of the eight major fertilizers show double-digit increases in price compared to one year earlier. Leading the way higher is 10-34-0. The starter fertilizer has skyrocketed early this year before retreating some in recent months. It is now 40% higher compared to the third week of December 2010.  Urea has jumped 20%, potash 17%, UAN32 15%, UAN28 14% higher and anhydrous 12% higher compared to year earlier.  The two phosphorus fertilizers continue to bring up the rear. MAP is 6% more expensive while DAP is 4% higher compared to December of 2010.

EPA Releases Final '12 RFS Volumes

The Environmental Protection Agency on Tuesday released the long-awaited 2012 Renewable Fuels Standard volume requirements after a nearly one-month delay from its deadline.

The RFS targets were established by the Energy Independence and Security Act signed into law in December 2007, with volume requirements for the upcoming compliance year due by Nov. 30. Last week, an EPA spokeswoman said the delay was caused by an internal review of the rule.

The total RFS volume requirement for 2012 is 15.2 billion gallons, or 9.23%, of the projected demand for petroleum-based fuels next year. Of that total, 1.0 billion gallons, or 0.91%, of the RFS mandate must be satisfied with biomass-based diesel. Advanced biofuels constitute 2.0 billion gallons, or 1.21%, of the total, with cellulosic biofuels accounting for 8.65 million gallons, or 0.006%, of the 2012 RFS mandate.

Overall, the RFS will require refiners to blend more than 1.25 billion gallons of renewable fuels over the amount mandated for 2011. EPA also noted that during the spring the agency proposed a volume requirement of 1.28 billion gallons for biomass-based diesel for 2013 even though the RFS specifies a 1.0 billion gallon minimum volume requirement for that category for 2013 and beyond. However, EISA enables the EPA to increase the volume requirement after consideration of a variety of environmental, market and energy-related factors. EPA said it would continue to evaluate comments from stakeholders on the proposed biomass-based diesel volume for 2013 and will take final action next year.

The RFS target steadily increases to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer must determine the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

Tuesday, December 27, 2011

Tuesday December 27 Ag News

2011-2012 Nutrient Management Record Keeping Calendars are Available
Larry Howard, UNL Extension Educator, Cuming County

The University of Nebraska Animal Manure Management team with the help of Purdue University has developed an easy-to-use record keeping calendar for livestock operations that need to keep track of manure related records. The calendar is endorsed by the Nebraska Department of Environmental Quality and the U.S. Environmental Protection Agency for use by permitted operations.  With new regulations for medium and small operations that have waste control facilities, it’s a simple and organized way to keep monthly records in one place.   Contact your local Extension office or Leslie Johnson (402-584-3818, to obtain a free copy of the 2011-2012 calendar. Calendars are good through December 2012.

Farmers Tax Guides Also Available

Farmers can better understand their 2011 tax returns with help from a guide available through the University of Nebraska-Lincoln Extension. The 2011 Farmers Tax guide has illustrated examples, a sample return and describes available deductions.  Cuming County Extension Educator Larry Howard says the tax guides are in and are free to local producers.  They can be picked up at the UNL Extension office in Cuming County, area tax preparers or any Cuming County bank.

Flooding Tops Farm Bureau’s List of Top 5 Nebraska Ag Stories

By any measure, the flooding along the Missouri and Platte Rivers was the state's top agricultural news story of 2011, Nebraska Farm Bureau said in releasing its annual list of the Top 5 Agricultural News Stories of the Year.

The flooding along the Missouri alone cost farmers with land along the river $105 million in crop losses and cost the state's economy as a whole nearly $189 million, according to a study commissioned by Nebraska Farm Bureau. Net farm income was $41 million less than it would have been without the flooding.

"Those numbers only tell part of the story," Farm Bureau President Steve Nelson said. "The farmers and ranchers who were affected by flooding will be dealing with the effects of the flood and reduced production for several years. Businesses that process crops, market and distribute crop products, and companies that sell equipment and machinery to farmers – all are affected."

The other Top 5 stories, in no particular order, are:
•    The strong response from Nebraska agriculture, local chambers of commerce and communities to attacks on agriculture, especially food animal production.
 "Animal rights groups stepped up their activity in Nebraska this year and it was gratifying to see nearly all of the ag groups coming together, including Farm Bureau, to oppose this activity and to educate about how we grow crops and livestock," Nelson said, by forming a new organization, We Support Agriculture. In addition, 13 local chambers of commerce, including the Omaha Chamber, adopted resolutions supporting Nebraska agriculture and opposing restrictions on livestock production which would harm Nebraska's way of life.

•    Record-setting ag land values and agricultural profitability. Farm land values in Nebraska increased roughly 41 percent over 2010, according to the Federal Reserve Bank of Kansas City and some irrigated crop land sold in excess of $10,000 an acre. Many ag commodities reached unprecedented price territory. UNL forecast net farm income for Nebraska for 2011 to be about $5.4 billion, compared to about $4.2 billion a year ago.  "Farmers paid down debt, upgraded equipment and purchased land," Nelson said. At the same time, high prices for energy drove up the cost of everything from production inputs to the retail cost of food, he said.

•    Regulatory overkill. "EPA wanted to regulate dust and spilled milk. The IRS wanted farmers to get or issue a form 1099 whenever purchases topped $600 in a year. The Department of Labor wants to restrict the jobs children can do on farms and ranches, including the very important job of detasseling. The Department of Transportation wanted owners and operators of farm equipment to get a Commercial Drivers License. And the list goes on," Nelson said.

Other examples: EPA sought to institute a new federal permit under the Clean Water Act for farmers who apply pesticides, even though the practice is already well-regulated under the Federal Insecticide, Fungicide and Rodenticide Act. EPA also sought new authority to regulate greenhouse gases which would have resulted in utilities, refiners and manufacturers passing on their increased costs to farmers as higher prices for fertilizer and fuel and other energy costs.

"These kinds of regulations show little understanding of today's farming and ranching practices and working to defeat them is taking more and more of farmers' time," Nelson said.

•    The federal budget deficit and the work of the Joint Committee on Deficit Reduction. "Nebraska farmers have a huge stake in the size of the federal debt because it affects their costs of borrowing money and the value of their commodities in export," Nelson said.

As part of the deficit reduction effort, the chairs of the House and Senate Agriculture Committees essentially drafted the next farm bill, he said. Although the Joint Committee failed to offer a proposal to Congress and the next farm bill will be developed in a more traditional manner, the process made it clear that direct farm payments are most likely a thing of the past, Nelson said, and that crop insurance will play a much larger role in providing a safety net in times of crop disasters.

Looking ahead to 2012, Nelson predicted the Top 5 Ag Stories of the New Year will be the farm bill, tax issues, profitability, the elections and continuing attacks on agriculture.

•    The farm bill. "The work done for the deficit reduction effort (in 2011) makes it clear that the next farm bill will put greater emphasis on assisting farmers when they're faced with major losses. Our members don't want the government to guarantee a profit, but they do want to maintain a strong crop insurance program," Nelson said.

•    Taxes. Several major tax provisions expire in 2012, including the rules for federal estate taxes, capital gains, depreciation and the current federal taxes rates. How these are handled will have a tremendous impact on farmers' and ranchers' day-to-day operations and estate planning, he said.

•    Profitability. Market prices for farm commodities will likely decline after 2011's record highs and net farm income is expected to be down. Rising costs for crop inputs and impacts from the financial world, such as the MF Global situation and Greece's instability, will be felt on the farm. "Achieving profitability will be much more difficult in 2012 than in 2011," Nelson said.

•    The 2012 elections. The presidential election will likely determine whether expansion of government regulations for agriculture continues, Nelson said. At the state level, legislative redistricting following the 2010 Census means the legislature will be more urban than ever. "As an organization, we'll continue to support candidates who understand agriculture and its needs," he said, and work with all state senators to support legislation that supports agriculture, Nebraska's economic driver.

•    Continued attacks on agriculture. "We see this continuing, and that means we in agriculture need to do even more to connect directly with consumers and answer their questions about how food is produced – rather than just tell them what we think they want to know," Nelson said.

Reflecting on Farm Bureau's predictions a year ago for 2011's top ag stories, Nelson said the organization did a good job of forecasting. The 2011 list included federal and state budget deficits; trade; increasing attacks on agriculture; market volatility, input costs and profitability; and regulatory uncertainty.

"Although looking back we didn't name trade as a top five  issue of 2011, certainly passage of the Free Trade Agreements with Columbia, Panama and South Korea this year, after many years of effort, will have major positive impacts for Nebraska farmers and ranchers," he said.

And the Platte and Missouri River flooding? "Many times we've had 'weather' as one of our top story predictions, but not for 2011. Most often drought is more of a concern in Nebraska than having too much water. Flooding is not on our list for 2012 because we believe the Corps of Engineers will take timely action this year to avoid it," he said.

2011 in Review

Senator Mike Johanns

It’s hard to believe 2011 has come to an end and my first term representing you in the U.S. Senate is at its midpoint. We’ve accomplished a lot this year, and I want to thank all of you who took time out of your busy schedules to meet with me. As 2011 draws to a close, I thought it would be appropriate to reflect upon the year.

We started right where we left off in 2010—working to repeal the burdensome 1099 mandate tacked onto the health care law. Repeal of 1099 was one of the first pieces of legislation I introduced in the new Congress, and I'm pleased that a bipartisan majority agreed with me. Repeal of this ill-advised mandate was signed into law by the President shortly thereafter, saving more than 40 million small businesses – our nation’s job creators – from a paperwork monsoon.

The new Congress also brought about a new committee assignment, and throughout the year I used my position on the Environment and Public Works (EPW) Committee to push back against EPA’s regulatory overreach. My legislation to exempt milk spills on dairy farms from being regulated in the same manner as oil spills raised the profile of this ludicrous EPA idea. I was pleased when EPA finally approved the exemption. I also worked hard to fight against the agency’s attempts to regulate farm dust. Facing the potential of an overwhelming bipartisan vote on my legislation, EPA Administrator Jackson announced the agency would back off the rule.

I've also been working to ensure those affected by the Missouri River flooding are receiving assistance. I introduced legislation to ensure the flood victims are treated fairly and signed onto a bill that would ensure the Army Corps take the devastating flood of 2011 into consideration when preparing their 2012 plan.  I witnessed firsthand extraordinary resolve as I visited affected communities to get a clear understanding of the challenges you face.

Our debt and deficit remains a serious challenge in Washington, and I cosponsored a balanced budget amendment and voted for the only bill brought to the floor that made a serious effort to cut spending. I also spearheaded an effort with Senator Michael Bennet to bring together more than 60 Senators – 32 Republican and 32 Democrat – to urge President Obama to join us in solving our budget woes.

We tackled many important issues this year, and I invite you to visit for a full report. But our work is not done. Next year we must work even harder to rein-in government spending and control our ballooning debt. The federal bureaucracy continues its regulatory march. I will continue my work to stop the overreach and infuse some commonsense into regulations. Whether through email, on the phone, by signing up for my e-Update, or stopping by one of my offices to say hello, your insight is greatly valued and appreciated. After all, you are the reason Stephanie and I are so proud to call Nebraska our home. God bless.

Alltech North American Lecture Tour

January stops in NE, IA

Since the first intelligible sentence was carried through telephone wire on March 10, 1876 in the rented top floor of a Boston boarding house, the world has been on a constant move to find the latest breakthroughs in technology. These advances in technology will be showcased in Shaping Tomorrow’s World: Path to a Profitable Future, the theme of Alltech’s 2011 North American Lecture Tour. Speakers on the 24 stop tour will explore how the latest technological developments can move the agriculture industry forward.  The lecture tour will examine such issues as programmed nutrition, epigenetics, sales organizations, the Alltech Ag Network, social media and the implementation of algae in our nutrition program.  Stops include:  January 17, The Cornhusker Marriott, Lincoln, NE, 3pm;  January 31, Gateway Hotel and Conference Center, Ames, Iowa, 9am.  There is NO CHARGE for the event and a FREE DINNER will be served.  Bring a friend or neighbor!  Groups and students are encouraged to attend.  Please RSVP to Alltech South Dakota at 605.692.5310 or  Go here for more information...

Webinar to Discuss U.S., Farm Economic Outlook

While the agricultural industry is helping to strengthen the state's overall economy, it's important for Iowa farmers to carefully manage risk and understand economic challenges and opportunities, says the Iowa Farm Bureau Federation (IFBF). IFBF will offer a 2012 U.S. and farm economic outlook webinar on Jan. 17 at noon (CST).

The webinar will feature Robert Dieli, president of RDLB, Inc., and Paul Prentice, president of Farm Sector Economics. They will discuss the current volatility in agriculture and offer insight in opportunities and potential challenges.

Participants can access the free webinar at and look for the link on the main rotating banner. Registration is encouraged. Participants can also log in as guests on the day of the webinar.

For more information, contact Ed Kordick, Iowa Farm Bureau commodity services manager, at 515-225-5433.

Biodiesel Statement on EPA Renewable Fuels Rule

The National Biodiesel Board (NBB) expressed support Tuesday for the EPA's final rule establishing U.S. renewable fuel requirements for 2012 and called on the Obama administration to act quickly in completing a 2013 rule that maintains the EPA's recommended volume increases for Biomass-based Diesel.

The 2012 rule raises the Biomass-based Diesel program to 1 billion gallons, up from 800 million gallons this year. According to the latest EPA figures, the biodiesel industry had produced some 908 million gallons through the end of November, exceeding the 2011 requirement with one month of production remaining.

"This industry has shown without a doubt that it can meet and exceed the goals of this program in a sustainable way, with a diverse mix of feedstocks," said Anne Steckel, vice president of federal affairs at NBB, the trade association for the U.S. biodiesel industry. "Our industry has plants in nearly every state in the country that are hiring new employees and ramping up production, in part because of the demand that this policy creates. As the only EPA-designated advanced biofuel being produced on a commercial scale nationwide, we look forward to continued growth in 2012."

Steckel also urged the administration to issue a final rule for 2013 volumes raising the Biomass-based Diesel requirement to 1.28 billion gallons, as the EPA proposed earlier this year. The EPA on Tuesday postponed finalizing the 2013 volume, saying it needs more time for review.

"We would have preferred to see that number released in this announcement and hope to see it finalized soon so that our member companies can plan their investments and continue boosting this economy," Steckel said. "The increase will create thousands of jobs, improve our energy security by diversifying the fuel supply and cut down on pollution and greenhouse gas emissions."

A recent economic study on biodiesel found that domestic production of 800 million gallons supports more than 31,225 jobs, generates income of nearly $1.7 billion to be circulated throughout the economy, and creates more than $3 billion in GDP.  At 1.28 billion gallons of production - the EPA's initial proposal for 2013 - the industry would support 50,725, generate $2.7 billion in income, and create nearly $5 billion in GDP.

Biodiesel makes up the vast majority of the Biomass-based Diesel program under the RFS. Because it also qualifies as an advanced biofuel under the program - with greenhouse gas emission reductions of 57 percent to 86 percent - biodiesel is also eligible to help meet general advanced biofuels requirements under the program.

Brazil May Not Fill Ethanol Void

The U.S. will drop all trade barriers on ethanol imports from Jan. 1, but amid the ballyhoo, there's unlikely to be much impact as Brazil, the main potential supplier, is struggling to meet its own demand.

Congress adjourned on Friday without extending the tariffs on ethanol, including the $0.54 per gallon tax on imported ethanol and a corresponding tax credit of $0.45 per gallon for blenders.

The move was expected after U.S. producers gave up lobbying for the credit earlier this year. The industry is now seeking subsidies to build more ethanol-compatible fueling stations and for commercializing newer forms of ethanol made from the inedible parts of plants.

The U.S. industry "has evolved, policy has progressed, and the market has changed making now the right time for the incentive to expire," the U.S. ethanol trade group, the Renewable Fuels Association, said on its website Thursday.

Demand in the U.S. is assured through 2022 thanks to a federal mandate that forces refiners to blend more and more ethanol with gasoline--an opportunity which led Brazil to lobby hard for the expiration of the tariff for years.

Brazil wants to sell its sugarcane-based ethanol, which it says is cheaper to produce and more fuel efficient than U.S. corn-based ethanol. But shortages at home may not mean Brazilian producers will secure an overnight windfall, though they are optimistic about the long term.

"This is the beginning of the consolidation of ethanol as a global commodity," said Marcos Jank, president of Brazil's sugarcane association, Unica, in an interview. "It will guarantee a lower cost of gasoline at the pump for Americans."

For Brazilian farmers, the end of the U.S. trade barriers could prompt renewed investment after several years of uncertainty and misfortune on the production front, even as domestic demand soared thanks to sturdy economic growth.

Sugarcane ethanol is a major fuel source in Brazil, where half the domestic auto fleet--or around 15 million cars--have flex-fuel engines. Drivers can choose between filling their tanks with hydrous ethanol--a pure alcohol fuel--or gasoline, which contains a government-mandated 20% anhydrous ethanol.

But the sugarcane industry was hammered by the 2008 global financial crisis, with many farmers and processing plants falling into bankruptcy. Since then, much of the industry's attention has been focused on the wave of new capital, which has swooped in to snap up troubled companies, rather than on planting more sugarcane.

Added to that, Brazil's government has frozen fuel prices at below-market rates to avoid a significant impact on domestic inflation, though that has made pure ethanol less competitive. That distorts the balance between production of hydrous and anhydrous ethanol.

Finally, the industry has also been beset by climate problems, which damaged harvests. That led to some shortages of ethanol earlier this year, a sharp jump in ethanol prices and a surge in ethanol imports--some of which came from the U.S.--to meet the shortfall. The Brazilian government has since moved to introduce regulations that it hopes will ensure there will be sufficient ethanol supplies in the future.

"Brazil won't become a huge exporter that quickly," said Jank. But "over the next 10 years we will have the opportunity to expand production by 10 times, and will be able to meet some of the U.S. demand."

What Brazil needs most is some "predictability," said Jank, adding that the end to U.S. tariffs helps create that longer-term perspective.

Jank said that he hopes the move by the U.S. will now allow the South American free trade bloc, Mercosur, to reduce its barriers on ethanol. While Brazil eliminated its tariffs in 2010 as a result of its shortage, the other Mercosur countries, particularly Argentina, continue to protect their local industry with a 20% tariff.

"I can't understand how you could have a biofuels policy based only on domestic raw materials. With an agricultural commodity which depends on climate, by definition you have to talk of a global market," Jank said.

Friday, December 23, 2011

Friday December 23 Ag News


Nebraska inventory of all hogs and pigs on  December 1, 2011, was 3.15 million head, according to the USDA’s National Agricultural Statistics Service, Nebraska Field Office.  This was unchanged from December 1, 2010, but down 3 percent from September 1, 2011.  Breeding hog inventory, at 385,000 head, was up 3 percent from December 1, 2010, and up 1 percent from last quarter.  Market hog inventory, at 2.77 million head, was down slightly from last year and down 4 percent from last quarter.   The September-November 2011 Nebraska pig crop, at 1.87 million head, was up 3 percent from 2010.  Sows farrowing during the period totaled 180,000 head, unchanged from last year.   Nebraska hog producers intend to farrow 180,000 sows during the December 2011-February 2012 quarter, up 3 percent from the actual farrowings during the same period a year ago.  Intended farrowings for March-May2012 are 185,000 sows, unchanged from the actual farrowings during the same period the previous year.  

Iowa inventory of all hogs & pigs on December 1 was 19.8 million, according to the Quarterly Hogs and Pigs report  released  by  USDA,  National  Agricultural  Statistics  Service.  This  was  down  1 percent  from  the 20.0 million in September 2011, but up 700,000 head from December 2010.  The September-November  2011  pig  crop was  4.99 million  head.   A  total  of  480,000 sows  farrowed with  an average litter size of 10.4 pigs per sow.   As  of  December  1,  producers  planned  to  farrow  475,000 head  of  sows  and  gilts  in  the  December  2011  – February 2012 quarter. Farrowing intentions for the March - May 2012 period were estimated at 480,000 as of December 1, 2011. 

US Hog Inventory up 2 Percent
United States inventory of all hogs and pigs on December 1, 2011 was 65.9 million head. This was up 2 percent from December 1, 2010, but down 1 percent from September 1, 2011.  Breeding inventory, at 5.80 million head, was up slightly from last year, but down slightly from the previous quarter. Market hog inventory, at 60.1 million head, was up 2 percent from last year, but down 1 percent from last quarter.

The September-November 2011 pig crop, at 29.0 million head, was up 2 percent from 2010. Sows farrowing during this period totaled 2.89 million head, up slightly from 2010. The sows farrowed during this quarter represented 50 percent of the breeding herd. The average pigs saved per litter was a record high 10.02 for the September-November period, compared to 9.89 last year. Pigs saved per litter by size of operation ranged from 7.40 for operations with 1-99 hogs and pigs to 10.10 for operations with more than 5,000 hogs and pigs.

United States hog producers intend to have 2.87 million sows farrow during the December 2011-February 2012 quarter, up 1 percent from the actual farrowings during the same period in 2011, but down slightly from 2010. Intended farrowings for March-May 2012, at 2.89 million sows, are down 1 percent from 2011, and down 1 percent from 2010.

The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 45 percent of the total United States hog inventory, unchanged from last year.

Former E3 Biofuels Plant Set to Reopen this Spring under New Ownership

A closed-loop, Nebraska biofuel plant touted as the first of its kind before shuttering in the wake of bankruptcy appears to be getting a new life. The former E3 plant was constructed next to a 30,000-head cattle feedlot near Mead, NE, and was designed to produce ethanol. The plant would be powered by an anaerobic digester converting methane drawn off the feedlot, while also producing dried distillers grain for cattle feed.

The idea for the $25 million venture was to feed the grain byproducts from ethanol production to 30,000 cattle in an adjoining feedlot, and then to use their manure and methane digesters as an energy source to operate the plant.

The plant was hailed in 2006 by then-EPA Administrator Stephen Johnson as a model for future sustainable energy production in the agriculture sector. But a boiler explosion, fluctuating corn prices and some technology issues forced the E3 Biofuels into bankruptcy. Kansas City-based Spectrum Business Ventures, operating as AltEn Opportunities I, purchased the plant at auction last year and announced plans to reopen the facility. Spectrum officials say construction is expected to be finished and production underway by the end of this coming spring.

The plant, which is designed to produce 25 million gallons per year, could employ as many as 75 people. Company officials say the technology planned for the plant has yet to be used elsewhere, setting the facility up still as the first of its kind.

NBB hosts farmers for New York City Bioheat tour

Farmer-leaders from throughout the country descended on New York City to see the bourgeoning Bioheat industry in action. The National Biodiesel Board hosted about 20 farmers Dec. 11-13 on a biodiesel and Bioheat tour of New York City.

"New York City is a major energy center," said Tom Verry, director of development for the National Biodiesel Board. "High volumes of biodiesel are used here too, which makes it the perfect place to show soybean farmers how their long-term vision for biodiesel and Bioheat has become a reality."

The group toured CME Group, the world's leading and most diverse derivatives marketplace, where energy is bought and sold. An educational session there on the Bioheat market includes speakers such as John Maniscalco, president of the New York Oil Heating Association; and New York City Councilman James Gennaro.

Starting in October of next year, all heating oil sold within New York City will contain at least 2 percent biodiesel.

The group also toured Central Park and JFK International Airport, getting an up-close look at the biodiesel facilities of New York City Department of Parks & Recreation and the Port Authority of New York and New Jersey. Both use biodiesel blends in their diesel vehicles, as does the Department of Sanitation. Steven Levy of Sprague Energy, a leading biodiesel supplier in the area, says those three agencies use about 11 million gallons of biodiesel blends a year, ranging from 5 to 50 percent biodiesel.

"It's exciting for us to see the passion in New York City among biodiesel's many champions," said Greg Anderson, a soybean farmer in Newman Grove, Neb., taking the tour for the second time. "New York City represents more than just another market for biodiesel. It's a strategic partner in furthering biodiesel acceptance in the Northeast, and nationwide. Our champions here want to leverage their position as energy leaders to promote biodiesel growth. That's a powerful partnership."

The farmers also visited the facilities of Metro Energy, one of the largest petroleum distributors in New York City and the Northeast. In 2009 the company sold 10 million gallons of biodiesel to be used as Bioheat in New York City alone. Metro is building a 110 million gallon biodiesel production facility in Brooklyn.

"The biodiesel and Bioheat industries would not be where they are today without the support of farmers, the United Soybean Board, and the soybean checkoff in developing this fuel," said Paul Nazzaro, who runs the Bioheat program for the National Biodiesel Board. "It's a pleasure to show them how their vision has materialized into reality."

Pipeline More Uncertain Than Ever

The payroll tax bill passed by U.S. Congress contains a provision forcing President Barack Obama to speed his decision on the Keystone XL oil pipeline, but his approval is far from certain.

The bill, which passed on Friday, said Obama must grant a permit for TransCanada Corp's Canada to Texas pipeline in 60 days, unless he determines the line does not serve the national interest.

"The project now faces further uncertainty following its entanglement in Congressional maneuvering around the payroll tax extension legislation," Robert Johnston, a director for energy and natural resources at the Eurasia Group, said in a research note.

Obama bowed to huge pressure from environmentalists, who staged high-profile protests to stop the pipeline that would deliver oil sands crude from the boreal forests of Alberta to refineries in Texas.

In November the State Department, which has the power to give the project a final permit because it would cross the state border, announced it would delay its decision until after next year's presidential election.

Environmentalists oppose the project for the carbon emissions that come from processing oil sands. But the line also faced stiff opposition in Nebraska because of concerns a pipeline spill would contaminate a huge aquifer that serves millions or spoil its fragile Sandhills region.

Despite the language in the bill, Obama still has the ability to delay the project. He could reject it based on the national interest argument or he could give it a thumbs up but delay it by awaiting a route study.

If Obama decides the pipeline is not in the national interest, "it would effectively be the end of the project," said Johnston, although TransCanada would likely still move forward with a smaller leg of the pipeline from the Cushing, Oklahoma oil hub to Texas.

But even if Obama approves it within 60 days, he could do so conditionally by declaring the project is in the national interest, but contingent on the completion of the State Department's study on alternative routes through Nebraska.

The State Department delayed its decision because it said it needed to do additional analysis on the line's routes in Nebraska, to avoid environmental damage.

That decision came a day after some 10,000 environmentalists and other opponents of Keystone circled the White House in protest of the pipeline.

White House officials have also said the congressional maneuvering does not help the project. Dan Pfeiffer, a White House communications director, tweeted before the Senate passed its version of the payroll tax bill last week: "How will (Republicans) explain to their members that the bill doesn't force the President to approve Keystone, it essentially kills it?"

Daniel Weiss, of the Center for American Progress, said last week that even if Obama approves the line, it would not survive the court process, as U.S. law clearly states that environmental impact statements have to be fully completed before the government can determine whether a project is in the national interest.

If Obama kills the project, Republicans would likely try to use that against him in the campaign, particularly if oil prices rise next summer, and as the jobless rate remains stubbornly high.

Supporters say the pipeline would create 20,000 jobs, but the State Department has said the number is closer to 7,000.

November Pork Production at Record High

Commercial red meat production for the United States totaled 4.26 billion pounds in November, down 2 percent from the 4.33 billion pounds produced in November 2010.

Beef production, at 2.15 billion pounds, was 4 percent below the previous year. Cattle slaughter totaled 2.79 million head, down 3 percent from November 2010. The average live weight was down 6 pounds from the previous year, at 1,293 pounds.

Veal production totaled 10.8 million pounds, 5 percent below November a year ago. Calf slaughter totaled 73,000 head, up slightly from November 2010. The average live weight was down 14 pounds from last year, at 255 pounds.

Pork production totaled 2.09 billion pounds, up 1 percent from the previous year. Hog slaughter totaled 10.04 million head, up 1 percent from November 2010. The average live weight was unchanged from the previous year, at 278 pounds.

Lamb and mutton production, at 12.6 million pounds, was down 12 percent from November 2010. Sheep slaughter totaled 186,700 head, 15 percent below last year. The average live weight was 135 pounds, up 4 pounds from November a year ago.

January to November 2011 commercial red meat production was 45.0 billion pounds, up 1 percent from 2010. Accumulated beef production was up slightly from last year, veal was down 3 percent, pork was up 2 percent from last year, and lamb and mutton production was down 9 percent.

State Production (million pounds, % of Nov, 2010)

Iowa ..................:  604.5,  102%      
Nebraska ...........:  612.5,  97%      
South Dakota .....:  101.0,  102%      

Feedlot Forum 2012 Features Old and New

The cattle industry will soon begin a new year, but much of 2011 — high feed costs, a smaller calf crop and a slow economy — will linger. These and new factors affecting profitability will be the focus of Feedlot Forum 2012 on Jan. 17 in Sioux Center, according to Beth Doran, Iowa State University (ISU) Extension and Outreach beef program specialist.

“The forum begins with Bill Davis as he presents a broad overview of the agricultural financial climate and discusses the outlook for agricultural lending and availability of ag credit for operating and expansion,” Doran said. Davis is senior vice president and chief credit officer for Farm Credit Services of America at Omaha, Neb.

Record corn futures prices of $7.99¾ in June, coupled with severe drought in the south, have elevated the prices for all feedstuffs, Doran said.

Dan Loy, Iowa Beef Center (IBC) interim director and ISU Extension feedlot specialist, will talk about low-cost feed approaches feedlot operators can implement to enhance profitability.

“Extension ag engineers Shawn Shouse and Kris Kohl will team up to present 'Handling and Land Applying Feedlot Runoff,’” Doran said. “Shawn will cover best management practices to maximize the nutrient value of manure and protect the environment, and Kris will focus on a new, low-cost method of pumping manure.”

Cattle Fax market analyst and grain expert Chad Spearman will present trends and expectations for the cattle and beef markets, including a snapshot of what has happened and what the future holds for beef producers. The 2012 Feedlot Forum also features a trade show with new product displays from more than a dozen ag businesses, and will include the District One meeting of the Iowa Cattlemen’s Association. During the meeting, CEO Matt Deppe will share his vision for the organization and address membership questions.

A forum flyer with registration form is available on the IBC website. Registration is $25 per person which includes the noon meal and a beef certificate, and is due Jan. 12 at the Sioux County Office. For more information, contact Doran at 712-737-4230 or e-mail

USDA Lowers Food Inflation Outlook

The U.S. government lowered its 2011 food-inflation estimate Friday on lower-than-expected price increases at restaurants, but said customers eating at home continue to see steep price increases for meat, eggs and dairy products.

The price of all food for 2011 will be up 3.25% to 3.75%, the U.S. Department of Agriculture said, down from a November forecast of 3.5% to 4.5%. The downward revision is due to a cut in the food-away-from-home inflation forecast, which the USDA projected at 2% to 2.5%, down from a November forecast of 3% to 4%.

The forecast demonstrates that consumers, struggling with high food prices in a sluggish economy, have increasingly opted to eat at home instead of going out, said Ricky Volpe, a research economist with the USDA.

The USDA narrowed its food-at-home inflation forecast to 4.25% to 4.75%, versus 4% to 5% the prior month.

"Food-at-home has easily outpaced food-away-from-home all year," Volpe said.

Food costs broadly have been driven up by high prices for fuel and agricultural commodities. Those higher prices are a bigger factor for grocery stores than restaurants, Volpe said, as restaurant prices are also driven to a larger degree by other factors such as labor costs and advertising.

The government's forecasts don't show that meals at home are more expensive than restaurant meals, only that the price of a meal at home is rising more quickly.

The government continued to raise inflation estimates for many dinner-table staples. Meat, fish and poultry prices are estimated to increase 7% to 7.5% in 2011 versus a year ago, up from a prior-month forecast of 5.5% to 6.5%. Beef prices are projected up 9.5% to 10%.

The government also sharply increased the inflation estimate for eggs. It estimates 2011 egg prices will be up 8.25% to 8.75%, compared with a November forecast of a 5% to 6% rise.

Fats and oils prices are estimated to jump 8.5% to 9% from a year ago, up from the November forecast of 6.5% to 7.5%.

The only category for 2011 the USDA lowered was cereals and bakery products. It projected those prices would be up 3.5% to 4%, down from last month's forecast of 4% to 5%.

The government reiterated Friday it expects food inflation to cool in 2012. It projects prices for all food to climb 2.5% to 3.5% next year, and food at home to increase 3% to 4%.

Soyoil Accounting for Large % of Crush Value

DTN Contributing Analyst Joel Karlin

The value of soybean meal has reached a very low point historically in comparison with corn.  Also, soybean meal has also reached a historically low point versus soybean oil.  In recent weeks, soybean oil has accounted for almost half the crush value, compared with the average 38.1%.  Reasons for the relative strength in soybean oil as opposed to soybean meal include the sharp reduction in the intensive protein meal consuming poultry sector in recent months, poor crush margins, and the surge in crude oil to more than $100 per barrel, which has allowed soybean oil to tag along.

Lawmaker: Don't Move Agro-Defense Lab

A New York congressman wants to take the "For Sale" sign off Plum Island.  In a letter this week, Rep. Timothy Bishop argues it is ludicrous for the federal government to be spending as much as $1 billion to construct a new laboratory in Manhattan, Kan., to study animal diseases that could devastate the country's livestock industry when a "perfectly good" facility already exists off the tip of eastern Long Island.

The Long Island Democrat, who previously has criticized the Department of Homeland Security's relocation plan, notes in a letter to the Office of Management and Budget that the National Academy of Sciences is again studying the suitability of placing a new lab in the so-called Beef Belt. He adds that plans to sell the New York island -- made famous in a 1997 Nelson DeMille best-selling book of the same name, and its mention as a possible home for Hannibal Lecter in the film "Silence of the Lambs" -- to finance the move to Kansas are more than 18 months behind schedule.

"Let's just say this was a bad idea and move on," Bishop told The Associated Press.

Kansas officials, who recently authorized $45.4 million in bonds for the next phase of construction on the $650 million National Bio and Agro-Defense Facility, counter that there is no reason to turn back.

"Plum Island is not the long-term solution that our country needs to protect our food supply," Gov. Sam Brownback said. "Building the National Bio and Agro Defense Facility is integral not only to the security of our nation's food supply but also to our capacity to respond to acts of terror directed against the American people."

The Department of Homeland Security, which was formed after the Sept. 11, 2001, terrorist attacks, took responsibility for the research laboratory at Plum Island in 2003. Scientists there study highly dangerous and contagious pathogens that could wipe out the nation's cattle or hog populations if they were released. The site was chosen in the 1950s because it was located off the mainland of the United States.

Homeland Security officials determined several years ago that the aging facility may not be suitable for continued research and studied several sites around the country, settling on Manhattan, Kan. That lab is not supposed to open until at least 2018, so DHS officials in the interim have spent $35 million on security and other enhancements at Plum Island in recent years.

Although Plum Island was considered as a possible site for the new lab, officials ruled it out after Bishop and others opposed plans to upgrade the laboratory to a Bioscience Level-4 facility, which means it could also study diseases dangerous to humans. The Kansas site will be a Level-4 facility, while Plum Island, which is not expected to close until at least 2018, remains at Level-3.

"Simply upgrading the outdated Cold War-era Plum Island Animal Disease Center is not an option for many reasons, among them that the local community, led by Rep. Bishop, sought and received a commitment from DHS in 2003 not to build a BSL-4 lab on Plum Island," said Rep. Lynn Jenkins, R-Kan. "His latest argument that he is opposed to building NBAF in order to save money is a faulty, disturbing, and transparent argument."

Bishop counters there are existing Level-4 facilities at Fort Detrick, Md., and elsewhere, that could handle the research on human diseases envisioned for Kansas. He argues that in hard economic times, moving research to Kansas is unnecessary.

"One of the things I've been elected to do is protect the needs and interests of my own district and there are 200 jobs at this facility," Bishop said. "I would also suggest that Kansas' interest is no more enlightened than my interest. If they're going to accuse me of playing parochial politics, I could easily level the same accusation against them. From a fiscal point of view, given the difficulty we had, this is a facility we don't need.

"So am I trying to protect local jobs? You're damn right I am. But do I also believe there are significant, larger national interests at play here, absolutely."

Sen. Tom Harkin, D-Iowa, a member of the appropriations and agriculture committees, also opposes the move to Kansas. The appropriations committee is holding up $50 million in funding for the Kansas laboratory in next year's budget pending the outcome of a National Academy of Science study on the feasibility of placing the lab in the nation's heartland. A previous study identified a 70 percent chance that a release of foot-and-mouth disease could occur at the new facility during its projected 50-year lifespan. Damages to the livestock industry could total as much as $50 billion if a release were to occur, officials have said.

The academy is again studying the feasibility of placing the lab in Kansas; a report is due next summer.

Meanwhile, the General Services Administration had originally promised a draft environmental impact statement on the proposed sale of Plum Island in the summer of 2010, with public hearings to follow. The report was delayed in part because officials were obtaining additional information on the 840-acre pork-chop shaped island from the U.S. Fish and Wildlife Service and others. The draft is now expected in January or February.

Bishop also derides notions that any sale of Plum Island will offset the costs of moving to Kansas. One eastern Long Island real estate expert has estimated that the island could fetch as much as $50 million, far less than the estimated $650 million for the new laboratory.

"Sheer fantasy," Bishop said of the idea that the Plum Island sale would cover the cost of the new lab. He adds that the estimates don't include the cost of possible environmental remediation at the island, where secret Cold War-era chemical warfare testing is believed to have taken place. "You would have to do at least $80 million to $100 million worth of environmental cleanup, so there's no way the numbers add up at all," Bishop said.

Thursday December 22 Ag News

Getting More Calves Born During the Daytime
Steve Tonn, UNL Extension Educator, Washington County

Calving season is just around the corner with some producers even starting to calve in January.  It is generally accepted that adequate supervision at calving has a significant impact on reducing calf mortality. Which do you prefer, checking and assisting cows and heifers at night or during the daytime hours?  Adequate supervision has been of increasing importance with the use of larger beef breeds and cattle with larger birth weights. On most cow calf operations, supervision of the first calf heifers will be best accomplished in daylight hours and the poorest observation takes place in the middle of the night. 

The easiest and most practical method of inhibiting nighttime calving at present is by feeding cows at night; the physiological mechanism is unknown, but some hormonal effect may be involved. Rumen motility studies indicate the frequency of rumen contractions falls a few hours before parturition. Intraruminal pressure begins to fall in the last 2 weeks of gestation, with a more rapid decline during calving. It has been suggested that night feeding causes intraruminal pressures to rise at night and decline in the daytime.

In the most convincing study to date, 1331 cows on 15 farms in Iowa were fed once daily at dusk, 85% of the calves were born between 6:00 am and 6:00 pm. Whether cows were started on the night feeding the week before calving started in the herd or 2 to 3 weeks earlier made no apparent difference in calving time.  Currently, evening feeding of cattle seems to be the most effective method of scheduling parturition so assistance can be available during daylight hours.

What about the situation where large round bales of hay are being fed to the cows and heifers?  If the cows have unrestricted access to the hay around the clock, then the best method of influencing the time of calving is via the time of day that the supplement is being fed.  At Oklahoma State University, the switch from supplement feeding in daytime to late afternoon/early evening feeding encouraged 72% of the cows to calve between 6 AM and 6 PM.  These cows had 24/7 access to large round bales of grass hay.  Before the change was made, when supplement was fed during the morning hours, the ratio of night time versus day time calving was nearly even, with half of the calves born at night and half during the day. 

Some small herd owners have reported success controlling access to the large round bales.  The hay is fed within a small enclosed pasture or lot near a larger pasture where the cows graze during the day.  In the evening, the gate to the area where the hay is placed is opened and the cows are allowed to enter and consume hay during the night.  The next morning, they are moved back to the daytime pasture to graze until the following evening.  In this manner, the nighttime feeding is accomplished with hay or silage only. 

Whatever method fits your operation should be utilized.  The advantages of heifers/cows being observed with daylight during calving are obvious.  Also during winter months, baby calves born in the warmer part of the day with radiant heat from the sun to reduce cold stress, have a better chance for early colostrum consumption and therefore survival. 

Nebraska Agriculture: Today’s Challenges, Tomorrow’s Opportunities

Governor Dave Heineman

The 24th Annual Governor’s Ag Conference will be held February 15-16 at the Holiday Inn in Kearney. The theme for this year’s conference is “Nebraska Agriculture: Today’s Challenges, Tomorrow’s Opportunities.” This event presents an annual opportunity for agricultural producers and leaders to learn more about their industry, and to come together to help ensure this vital industry remains strong. While these dates are earlier than usual, we listened to the feedback of our conference attendees and worked hard to ensure that our event did not conflict with other large agriculture meetings.

This year’s speakers will include John Doggett who is the Senior Lecturer of International Entrepreneurship, Management and Sustainability, and a Senior Research Fellow at the University of Texas at Austin. Mr. Doggett will discuss Nebraska’s agriculture role in the global economy of the future.

Bruce Knight, the Principal and Founder of Strategic Conservation Solutions, will provide an update on the federal Farm Bill reauthorization. Mr. Knight is a former USDA Under Secretary and he will share insight on the farm policy picture and its potential impact on Nebraska.

A statistic often heard is to feed an anticipated 9 billion people, farmers will need to double agricultural output by 2050 and perhaps even sooner. We will have two speakers who will address how Nebraska agriculture can respond to this challenge - Dr. Archie Clutter and Mr. Bill Holbrook.

Dr. Clutter is with the Institute of Agriculture and Natural Resources at the University of Nebraska and he will explain how the University is positioning itself to be part of meeting the challenge to provide food to a growing world population. As a leading research institution, we are pleased to have him discuss their progress and ideas for the future. Mr. Holbrook is from The ProExporter Network, an agribusiness economic research and analysis provider, and he’ll discuss opportunities and challenges farmers will face in meeting food production demand.

A panel of Nebraskans will join us to discuss their organizations and how they connect consumers with farmers and ranchers. The panelists include Willow Holoubek from A-FAN, Dawn Caldwell from Common Ground Nebraska, and Pete McClymont with We Support Agriculture.

Overall, the farm economy is doing well. Farmers and ranchers generally reinvest profits in their industry in order to improve their production capabilities for the future. They are making needed investments and improvements. They are putting additional conservation practices in place that improve the land and protect the environment. They are putting up new machine shops and bins, and they are paying down debt.

When Nebraska agriculture does well, so does main street Nebraska. Registration information is available on the Nebraska Department of Agriculture website at or by calling 1-800-831-0550. I look forward to seeing Nebraska’s farmers, ranchers and agribusiness leaders at the 2012 Governor’s Ag Conference.

Economist Sees Modest Pork Industry Expansion

Ron Plain, University of Missouri Agricultural economist, says hog producers enjoyed record hog prices this summer which he believe has caused some modest herd expansion. Plain discusses his expectations for the USDA December Hogs and Pigs Report due out this Friday, Dec. 23, as well as 2012 hog prices.

"I expect live hog prices to average close to $64 per hundredweight ($85 per hundredweight carcass) in the first quarter of 2012; $69 per hundredweight ($91 per hundredweight carcass) in the second and third quarters of 2012; and $58 per hundredweight ($77 per hundredweight carcass) in the fourth quarter of 2012," he says. "My estimates are that the breeding herd is 0.8 percent larger than a year ago; the market hog inventory is 1.4 percent larger; and the total herd is 1.4 percent larger than in December 2010. My estimates of the December 1 market hog inventory by weight groups are: 180 pounds and heavier 102 percent, 120-179 pounds 101.3 percent, 50-119 pounds 101 percent, and under 50 pounds 101.6 percent of a year earlier."

September-November sow slaughter was up 4.2 percent. Imports of Canadian sows for slaughter during this period were up 8.4 percent. Thus, net slaughter of U.S. sows was up 3.5 percent out of a sow herd that was 0.6 percent larger compared to 12 months earlier.

Slaughter of barrows and gilts during September-November was up two percent compared with a year earlier. USDA's September report implied summer slaughter would be up 2.1 percent. There appears little need for USDA to make any large changes in their September market hog inventory or their estimate of sows farrowed and pig crop during March-May.

Plain says in their last inventory report, USDA predicted that September-November farrowings would be down 0.2 percent and December-February farrowings would be 0.5 percent higher than a year earlier. There is a good chance that hot weather last summer slightly reduced the size of the winter pig crop. I believe fall farrowings actually were down 0.5 percent.

"I'm forecasting winter farrowings to be unchanged and March-May farrowings up 0.5 percent compared to last spring," he noted.

Composting Helps Swine Farm Improve Biosecurity

Following an initial project begun in 1999 at the Iowa State University (ISU) swine breeding farm, the university's swine teaching farm started composting mortalities eight years ago in an effort to increase biosecurity practices. Swine farms manager Jay Lampe said the move was positive.

"This process has changed our management style and lowered our biosecurity risks at the farm while providing a sustainable way of managing mortalities," he said. "Composting has eliminated two potential sources of disease outbreaks for our farms: rendering and fuel trucks entering our property."

"We are able to decrease the number of outside vehicles like rendering trucks entering the farm grounds, and that helps us keep our biosecurity at a high level," Lampe said.

Constructing a composting facility The size of and cost to construct a composting facility varies according to available land, type of materials and size of mortalities to be composted. The swine teaching farm facility is completely roofed with eight bays, each of which is approximately 10 feet square with four foot high concrete walls. This allows adequate space for all carcass sizes from the farm to be incorporated.

ISU agricultural and biosystems engineering professor Tom Glanville said the correct process of preparing and using a mortality composting facility is vital to its success.

"Start by placing a 12-inch layer of dry cover material, like sawdust, wood shavings or chopped corn stalk in the bottom of a compost bin," he said. "Decaying carcasses will release excess moisture, so this absorptive base layer plays an important role in preventing release of excess liquid."

Alternate layers of cover material with additional carcasses until the bin or bay is filled, Glanville said. "The top layer should always be cover material," he said. "Realize that you might not be able to fill an entire bin in a short period of time depending on your operation's mortality rates and size of the moralities."

After a bin is filled, the compost must undergo a primary heating cycle of 60 to 90 days. This time frame varies based on the size of mortalities placed in the bin. After this initial heating cycle, the partially composted carcasses are moved from the primary bin to a secondary bin.

"Moving the compost breaks up the materials in the pile, redistributes excess moisture and introduces a new oxygen supply," Glanville said. "By the end of a 60- to 90-day secondary heating cycle with additional decomposition activity, even large carcasses of breeding stock are normally reduced to a few large bones that are free of soft tissues which cause odors or attract insects and predators."

The composting process can continue during winter months, he said. The layout of the composting facility also plays an important role. By having bins share a larger amount of common wall area, it cuts down on the amount of bin wall exposed to the cold, reducing heat loss. There is more information on composting equipment, facilities, procedures, sizing and layout in the ISU Extension publication, "Composting Swine Mortalities in Iowa," available from the Extension Online Store at

At the ISU swine farm, a nitrogen source (mortalities or manure) and a carbon source (typically corn stalks or woodchips) are the primary materials used in composting. After the process is complete, the composted material is then usually applied on cropland.

"Land disposal of mortality compost adds organic matter to the soil and allows mortalities to be returned to the soil without odor, attraction of flies and other insects or scavengers," Glanville said.

The long term success of composting on the swine farms has led to similar practices at other Iowa State facilities, including the poultry and beef teaching farms.

"Deciding to compost means initial costs of constructing the facility," Lampe said. "But in the long run, it saves money that would be spent on a potential disease break from vehicles such as rendering services or fuel trucks for an incinerator entering the farm property. The trade-off was been well worth it at the farm."

For more information and illustrations on composting swine mortalities, see Glanville's "disSolving Swine Mortality Project."

ICA Board Re-Elects Havens, Greiman, Sexton

The Iowa Cattlemen's Association (ICA) board members re-elected three leaders to each serve a second one-year term. Ross Havens, Wiota, will serve as president; Ed Greiman of Garner will continue as president-elect; and Mike Sexton, Rockwell City, will serve as associate vice president.

Havens continues to focus on involving young people in ICA activities and the cattle business. "One of the goals of my presidency is to work hard to have programs that involve young people; get them active in our association," Havens said. During this past year, ICA's Young Cattlemen's Leadership Program kicked off the ICA Carcass Challenge program, and ICA sponsored Mark Moore of What Cheer to attend NCBA's Young Cattlemen's Conference.

Other members of the ICA executive committee are Larry Johnson, Maquoketa, Northeast Regional VP; Phil Reemtsma, DeWitt, Southeast Regional VP; Scott Hansen, Southwest Regional VP, and Allan Johnson, Northwood, Northwest Regional VP. Reemtsma and Allan Johnson were newly elected at the late summer regional meetings, while Larry Johnson was re-elected to a second term. Leaving the executive committee was Dick Cochran, Ladora, who served as an ICA volunteer leader for the past five years.

At district meetings this fall, county representatives elected two new district directors. They are J.D. Morris, Algona, District 3 Director and Marcus Younge, Ventura, District 4 Director.

Re-elected district directors are Rob Medberry, Volga, Dist. 6; Brett Katzer, Conrad, Dist. 9; Jessica Wilson, Pierson, Dist. 12; Norm Ziskovsky, Swisher, Dist. 15; and Jim Hanson, New Market, Dist. 18.

EPA Releases November Biodiesel Volume

The EPA reported Thursday that nearly 108 million gallons of Biomass-based Diesel were sold during the month of November, continuing a record year of production. Biodiesel makes up the vast majority of the EPA's Biomass-based Diesel category under the Renewable Fuel Standard program, representing about 95 percent of the volume this year.

Biodiesel production specifically had reached an all-time high 908 million gallons through the end of November, according to annual figures compiled by the EPA. The previous annual record for biodiesel production was 690 million gallons in 2008.

USDA Cold Storage Highlights

Total red meat supplies in freezers were up 3 percent from the previous month and up 3 percent from last year. Total pounds of beef in freezers were up 6 percent from the previous month and up 1 percent from last year. Frozen pork supplies were up 1 percent from the previous month and up 6 percent from last year. Stocks of pork bellies were up 207 percent from last month but down 29 percent from last year.

Total frozen poultry supplies on November 30, 2011 were down 23 percent from the previous month and down 9 percent from a year ago. Total stocks of chicken were down 5 percent from the previous month and down 14 percent from last year. Total pounds of turkey in freezers were down 53 percent from last month but up 11 percent from November 30, 2010.

Total natural cheese stocks in refrigerated warehouses on November 30, 2011 were down 4 percent from the previous month and down 5 percent from November 30, 2010.  Butter stocks were down 27 percent from last month but up 36 percent from a year ago.

Total frozen fruit stocks were down 1 percent from last month but up 3 percent from a year ago.  Total frozen vegetable stocks were down 3 percent from last month and down 4 percent from a year ago.

Top 5 Ethanol Stories for 2011

America’s ethanol industry has been in a state of rapid evolution since the beginning of 2000.  Record-setting production, policy development, and market expansion have all moved forward with dramatic speed and helped to create the world’s largest, most efficient, most cost effective renewable fuels industry.

However, developments in 2011 have set the stage for a new chapter in American ethanol history.  Here are the Top 5 stories of 2011 as seen through the eyes of the Renewable Fuels Association.

1.  EPA gives final approval to E15 for MY2001 and newer vehicles.  For the first time ever, Americans driving conventional vehicles will be provided the opportunity to choose ethanol blends in excess of 10 percent.  While a strong argument could be made for the end of the tax incentive as the year’s top story, the impact of an expanded market through E15 blends will have an exponentially greater impact on the U.S. ethanol market than the temporary adjustment caused by the end of VEETC.

2. End of VEETC and the secondary tariff.  Without protest, U.S. ethanol producers allowed the $0.45 per gallon tax incentive for ethanol blending to expire.  The offsetting secondary tariff on imported ethanol will also expire.  The domestic ethanol industry has evolved, policy has progressed, and the market has changed making now the right time for the incentive to expire.  Ethanol producers never intended for the tax incentive to be permanent.  Like all incentives, it was put in place to help build an industry and when successful, it should sunset.  Unfortunately, the same mentality does not extend to century-old tax subsidies supporting 20th century petroleum technologies.

3. U.S. exports set all-time highs.  As the U.S. worked to move beyond artificial barriers in the domestic market, new international markets emerged as opportunities for domestic ethanol producers.  An estimated one billion gallons of denatured and undenatured ethanol – gallons never blended with gasoline or eligible for the tax incentive – were exported in 2011.  Additionally, U.S. exports of ethanol feed co-products, largely distillers grains, also surged.  An estimated 8-9 million metric tons of this high value livestock feed was exported in 2011.

4. Restarting the advanced and cellulosic ethanol engine.  Weathering the economic collapse of 2008, advanced and cellulosic ethanol producers made big strides in 2011 to bring these promising technologies to commercial production.  A number of advanced and cellulosic ethanol companies, including Abengoa, Coskata, and Mascoma are beginning construction on ethanol biorefineries that will expand America’s ability to fuel its economy with a broader range of renewable feedstocks.  (An RFA side note:  The formation of the Advanced Ethanol Council in partnership with the RFA was a pivotal step forward in forcefully and effectively advocating for the accelerated commercialization of advanced and cellulosic ethanol technologies.)

5. Emergence of the integrated biorefinery model.  Ethanol production is far more than fuel and feed.  Today, approximately 40 percent of all ethanol facilities are capturing and selling corn oil.  An ever-increasing number of ethanol producers are also deploying technologies to produce proteins, biochemicals and other co-products that can further displace oil in marketplace.  Anything made from oil can be made from biomass.  It is matter of know-how and American ethanol producers are proving that it can be done and be done at scale.

It is these five developments that defined 2011 and are setting the stage for 2012 and beyond.  In the first week of January, the RFA will be publishing a companion piece to this that looks at the Top 5 stories to watch for U.S. ethanol in 2012.

AMPI dispersing $10 million to owners

The dairy farmer-owners of Associated Milk Producers Inc. (AMPI) will share $10 million in equity payments this year. The cash will be paid to individuals based on the amount of milk they marketed through AMPI.  In November, $6.5 million of members’ capital retain investment was distributed. This month’s payment of $3.5 million is a result of previously allocated earnings.  The payments to members also included AMPI’s early equity revolvement option. Members who are age 65 and retired from dairying can receive their cooperative equity through an accelerated, five-year distribution.  “Distributing equity reaffirms the cooperative’s focus on its mission of maximizing the return on milk marketed and equity invested for its members,” said AMPI President and CEO Ed Welch.

Cropp: Dairy Farmers Should Watch Output & Exports in 2012

The price of milk paid to dairy producers in 2012 depends heavily upon two things: the level of milk production and the level of dairy exports. That's according to Dr. Bob Cropp, professor emeritus with the University of Wisconsin-Extension. In his monthly Dairy Situation and Outlook report, he says lower milk prices for the start of the year, along with relatively high feed cost, could halt the increase in cow numbers and dampen increases in milk per cow.

"USDA's outlook report for November milk production showed cow numbers declined only slightly for the past two months, down 4,000 head from September, but still 1.0% more than a year ago," Cropp said. "Compared to a year ago, November milk production was 2.2% higher for the 23 reporting states and estimated 1.8% higher for the U.S. The increase in milk per cow continued to run below normal trend, at just 0.8%.

He says the boost in milk production continued to be attributed to western states--many of which had more milk cows than a year ago. In the midwest, production was also up in Iowa and Wisconsin, but down slightly in Minnesota.

"USDA expects dairy exports to decline some, especially for cheese and butter, but yet remain favorable," the report noted. "If this holds and milk production slows milk prices could well improve the second half of 2012, but are likely to still average below 2011 for the year."

Meanwhile, Cropp says the wholesale price of dairy products often decline seasonally starting the end of November into December, especially for butter and cheese. He said cheese prices may well recover some by mid-January and February, but the Class III price for first quarter of 2012 could average near $16.75 per hundredweight.

"Also with lower nonfat dry milk prices dry whey prices will likely show some weakness," Cropp said. "Some forecast lower Class III prices, but total cheese stocks have improved with October 31 stocks being 4.3% lower than a year ago."

October cheddar cheese production was 5.8% below a year ago and total cheese production just 1.7% higher. Cheese exports continue to be favorable with October exports 22% higher than a year ago and up 31% for the year.

Farmers May Benefit When Russia Joins WTO

The decision to allow Russia to become a member of the World Trade Organization can be a benefit to American agriculture, the National Corn Growers Association said. WTO ministers adopted Russia's terms of entry at the Eighth Ministerial Meeting, held recently in Geneva, and Russia has 220 days to ratify its accession agreement.

"Russia's membership makes the WTO a more universal trade organization," Chad Blindauer, Chair of NCGA's Trade Policy and Biotechnology Action team said. "It also ensures Russia plays by the same rules as other WTO members.The deal allows for more fair and open trade policy."

The Working Party Chair of Russia's accession, Ambassador Stefan Johannesson of Iceland, said the "documents constituting Russia's terms of entry into the WTO resulted from a tough and successful engagement between Russia and WTO members."

As part of the accession deal, Russia has agreed to undertake further commitments to open its trade regime. This includes lowering tariffs on a wide range of agriculture products.

NRCS Reminds Producers of Program Deadlines

USDA's Natural Resources Conservation Service (NRCS) today announced that the ranking period cut-off date for the Conservation Stewardship Program (CSP) is Jan. 13. Producers interested in CSP should submit applications to their local NRCS office by the deadline so that their applications can be considered during the first ranking period of 2012.

"CSP is one of our most popular conservation programs, and we expect to receive many applications," NRCS State Conservationist Jane Hardisty said. "I encourage all farmers who are interested in applying to contact their local NRCS office as soon as possible so they can meet the deadline."

The CSP is offered through continuous sign-ups and provides many conservation benefits including improvement of water and soil quality, wildlife habit enhancements and adoption of conservation activities that address the effects of climate change. Eligible lands include cropland, pastureland, rangeland, nonindustrial private forest land and agricultural land under the jurisdiction of an Indian tribe. CSP offers financial assistance to eligible participants through two possible types of payments: (1) annual payment for installing and adopting additional activities; and improving, maintaining, and managing existing activities and (2) supplemental payment for the adoption of resource-conserving crop rotations.

A CSP self-screening checklist is available to help potential applicants determine if CSP is suitable for their operation. The checklist highlights basic information about CSP eligibility requirements, contract obligations and potential payments. It is available from local NRCS offices and at under programs and services.

As part of the CSP application process, potential applicants can work with our NRCS field personnel to complete a resource inventory using a Conservation Measurement Tool (CMT). The CMT determines the conservation performance for existing and new conservation activities. The applicant's conservation performance will be used to determine eligibility, ranking and payments.

Brazil, Argentine Soy Dry

The main soy areas of Brazil and Argentina have not gotten enough rain in recent days to fully relieve fields that are baking under the southern hemisphere's summer sun, experts said Thursday.

There has been no rain to speak of in Brazil's key south and center-west farming zones over the past three days. And the showers that have fallen in Argentina's soy belt have been too scattered and inconsistent to help parched plants.

"Today was the longest day of the year. It was also the hottest day in a decade and this has been the driest December in the century," said a grains farmer in Brazil's Parana state. "I wish I could just go to sleep and wake up with it raining."

Parana is expected to get 19 millimeters of rain between Thursday and early next week. The state has been dry in December but has seen slightly better rainfall than Rio Grande do Sul in the past weeks and ended November with above-average rainfall.

Parana soy crops are further along in development than in Rio Grande do Sul, having been planted several weeks earlier.

The state's crop is more than 30% flowering and will begin the critical pod filling stage in the coming weeks when consistent soil moisture is essential for the formation of beans.

Brazil's main center-west states, with some isolated exceptions of dryness, have seen excellent rainfall in the past weeks. No. 1 soybean state Mato Grosso is expected to begin early harvesting of a record soybean crop of 22.2 million metric tons, 30% of Brazil's soy output, next week.

Rainfall in western Rio Grande do Sul growing areas has been extremely light in December, with only 18 millimeters compared with an average of 131 mm that normally falls in that region over the entire month of December, Somar data showed. That's 86% shy of average rainfall in December and November was 47% below average rainfall for western Rio Grande do Sul.

Four to nine mm of light scattered showers are expected to fall on parts of the state's growing areas over the weekend.

The trend for both Brazil and Argentina remains hot and dry, consistent with La Nina conditions, which tend to produce drier weather to the southern cone.

"It has rained but it has been very uneven," said Argentine climatologist Eduardo Sierra. "The areas that got showers received 30 to 40 millimeters, which is enough for them to get by but not enough to really improve the situation."

Argentina is the world's No. 3 soybean producer after the United States and Brazil. Argentina is also the second biggest international corn supplier.

"Corn is the most exposed to the dry weather because it is finishing its critical development stage without water," he added. "Soy can wait for rain until mid-January."

Regular rainfall is critical for the germination and healthy development of soy, which serves as the world's most important source of protein.