Tuesday May 2 Ag News

Lender Survey: U.S. Farm Profitability Down

Nearly 90 percent of agricultural lenders have seen an overall decline in farm profitability in the last 12 months, according to a joint survey by the American Bankers Association and the Federal Agricultural Mortgage Corporation. The survey of more than 350 agricultural lenders representing institutions of all sizes across the country revealed that when it comes to their producer customers, lenders are most concerned about commodity prices, liquidity and farm income.

Ninety-five percent of lenders indicated commodity prices - particularly grains, beef cattle and dairy - are a top concern. While concerns about commodity prices varied by region, overall, lenders are most concerned about grains (80 percent rated it a four or five on a scale of one to five) followed by beef cattle (63 percent), dairy (55 percent), swine (40 percent), poultry (21 percent), vegetables (20 percent), and fruits and nuts (17 percent).

The decline in commodity prices has led to a fall in farm income, and subsequent tightening in profitability. Still, ag lenders reported that the majority of their current agricultural borrowers (60 percent) were profitable in 2016 and expect 54 percent to remain profitable in 2017.

Lenders also expressed concerns about land values. Nearly half of the respondents (47 percent) indicated lower land values in 2016, and slightly more than half (56 percent) expect further declines in 2017. The lenders surveyed believe that nearly 44 percent of average quality land and 33 percent of cash rents are priced above fair market value in their area. Jackson Takach, Farmer Mac's in-house economist, theorized, "The difference between the two is likely a function of the short duration of rental contracts compared to the relatively infrequent sale of the underlying land - cash rents have simply had more opportunities to adjust in the last 3 years than have land values."

As a result of lower levels of cash, ag lenders expect greater demand for debt financing. More than 66 percent of respondents expect an increase in ag operating loan demand in the first half of 2017 while 33 percent of lenders expect demand for ag real estate loans to increase.

"These responses are consistent with agricultural credit downcycles - financing needs on the farm increase at the same time as profitability and short-term creditworthiness decreases. Fortunately, ag lenders are seasoned, most with long careers in agriculture, and they understand these cycles well," said Takach.

When asked about challenges facing their own institutions, lenders indicated that regulation, compliance and competition with non-banks are their top concerns. These topics edged out more market-based forces like loan demand and credit quality, highlighting the negative impression of increased regulatory scrutiny.



Nebraska Egg Value Down $181 Million from 2015

The value of egg production in Nebraska during 2016 was $99.8 million, down $181 million from $281 million in 2015, according to the USDA's National Agricultural Statistics Service.

Egg production in 2016 was estimated at 2.57 billion eggs, up 280 million from the previous year.

Average number of layers for 2016 at 8.84 million was up 1.15 million from 2015.



Kwik Trip to Add E15 to its Pumps

One of region's largest suppliers of gasoline announced plans to add E15 to most of its locations within the next few years. Kwik Trip said once all of the designated pumps are converted, the company will likely have the highest number of E15 locations in the United States.

The convenience store chain has over 500 retail outlets in Wisconsin, Iowa and Minnesota. Fuel Marketing Manager Joel Hirschboeck says the company will use its existing fueling infrastructure to offer E15, including at the more than 90 sites where it currently sells E85--which is an 85% ethanol/gasoline blend.

"We pride ourselves on offering consumers a first-class experience at our convenience stores," Hirschboeck said. "Part of the value we can provide consumers is through offering them an array of choices at the pump. Adding E15 was an important step for us."



Iowa Swine Day to Showcase Nationally Recognized Speakers

The sixth annual Iowa Swine Day will once again address current issues and opportunities facing pork producers with a line-up for topnotch speakers and topics. The event, scheduled for June 29 on the Iowa State University campus in Ames, is planned and hosted by Iowa State University College of Agriculture, the Iowa Pork Industry Center and the Iowa Pork Producers Association. Organizer John Patience, professor of animal science, said planners build upon the success of past programs by continuing to seek industry input from an industry committee. Patience has concluded from past years that the best approach to developing a program for the pork industry, is to seek input from producers representing a cross section of the industry.

"For example, the morning plenary session features Dr. Joe Schwarcz of McGill University who will discuss misconceptions about the use of science in agriculture," Patience said. "His presentations include a humorous twist, with the ultimate goal of bringing logic to the conversation about science in our day-to-day life. He's the only non-American to win the American Chemical Society's prestigious Grady-Stack Award for demystifying chemistry to the general public, so his talk will be entertaining as well as educational."

Also in the morning session, Mark Greenwood will talk about the future state of the U.S. pork industry. As senior vice president at AgStar Financial Services, he will discuss how the new packing capacity on the horizon will afford producers both opportunities and challenges going forward. Dr. Dharmu Thamodaran, Executive Vice-President of Smithfield Foods, and Bruce Vincent, Executive Director of Provider Pals will round out the morning session.

Following lunch, 12 presentations will be part of three concurrent sessions. Patience said the topics range from updates on PRRS, PEDv and Seneca Valley Virus to progress in the implementation of the new VFDs, and from challenges and emerging needs of production facilities to diet changes in response to new restrictions on feed antibiotics.

Following the day's program, attendees are invited to a barbecue in the Iowa State Center courtyard, organized by TechMix and AB Vista. Patience said attendees won't want to miss it this relaxing and tasty end to the day.

"This meal will be catered by Smokey D's, currently ranked sixth in the U.S. out of more than 4,000 competition barbecue teams," he said. "They are the only team to win all four BBQ major contests on the Kansas City Barbecue Society Circuit, accomplishing that feat in 2016."

Iowa Swine Day will be held in the Scheman Building on the Iowa State Center, with check-in and onsite registration beginning at 7:30 a.m. and the first session set for 9 a.m. Lunch and refreshments are included in the registration fee of $50 per person; this will increase after June 17 to $75. Similarly, students of all ages may register at no cost until June 17, with the registration increasing to $45 thereafter. The full schedule, sponsor list and registration information are available on the event website.



Iowa Soybean Association recommends timely confirmation of Branstad as U.S. ambassador to China

Statement courtesy of Iowa Soybean Association President Rolland Schnell who farms near Newton in Jasper County...

“Gov. Branstad’s insights and experiences shared in today’s hearing before the U.S. Senate Foreign Relations Committee underscores his unique qualifications for U.S. Ambassador to China. Iowa soybean farmers urge his timely confirmation so he can immediately go to work on behalf of Iowa, U.S. farmers and all who rely on this strategic trade partner.

“He is the right person at the right time to serve as ambassador. Decades of work and time spent in China have built a tightknit bond in state-to-province relationships between Gov. Branstad, Iowa and the country of nearly 1.4 billion people. He has known China President Xi Jinping for decades, hosted the Chinese leader for visits to Iowa and made many trips to China, including several as a participant in trade missions with the Iowa Soybean Association.

“Hundreds of thousands of Chinese – a number exceeding the U.S. population – will join the middle class during the next decade. That means more protein consumption, thus increased demand for meat and soy. Iowa and U.S. farmers stand ready to provide grains, oilseeds and other agricultural products in abundance to help meet this demand.

“Strong trade relations between the United States and China cannot be overstated. When President Xi visited Iowa in 2012, he noted that agricultural trade with Iowa and the United States is the foundation of strong bilateral relationships for both countries. Gov. Branstad will continue to be a tireless supporter of trade between the two countries and a friend to American agriculture. He has demonstrated true leadership for agriculture as the nation’s longest-serving governor and will continue to do so as U.S. Trade Ambassador to China. His timely confirmation is important and deserved."



Confirmation Hearing Held for Ambassador to China

Following the confirmation hearing today for Iowa Gov. Terry Branstad to be U.S. Ambassador to China, Growth Energy CEO Emily Skor released the following statement:

“Gov. Branstad has been an incredible ally and champion of the American ethanol industry, and having him as our Ambassador to China would be an important step forward in helping re-open the Chinese marketplace to American ethanol and distiller’s grains.

“We are eager for his confirmation and hope the Senate will confirm him quickly.”



ACE supports Branstad for US Ambassador to China

Brian Jennings, executive vice president of the American Coalition for Ethanol (ACE), issued the following statement on Iowa Governor Terry Branstad’s hearing before the U.S. Senate Foreign Relations Committee today to consider his nomination to be the U.S. Ambassador to China:

 “We want to express to the Foreign Relations Committee our strong support of the nomination of Terry Branstad. Giving his longstanding relationship with the President of China and the Chinese people, we’re confident that as Ambassador of China, Governor Branstad will emphasize the need for the two countries to have a strong trade relationship. China has been a top export destination for U.S. ethanol and distillers dried grains, and we look forward to what Branstad can accomplish with China and its people to further develop this marketplace. Export demand for ethanol is critically important to our industry, especially as we try to remove barriers constraining ethanol use here at home.” 



USDA Grain Crushings and Co-Products Production

Total corn consumed for alcohol and other uses was 515 million bushels in March 2017. Total corn consumption was up 9 percent from February 2017 and up 5 percent from March 2016. March 2017 usage included 91.3 percent for alcohol and 8.7 percent for other purposes. Corn consumed for beverage alcohol totaled 2.66 million bushels, down 14 percent from February 2017 and down 2 percent from March 2016. Corn for fuel alcohol, at 460 million bushels, was up 9 percent from February 2017 and up 5 percent from March 2016. Corn consumed in March 2017 for dry milling fuel production and wet milling fuel production was 89.9 percent and 10.1 percent respectively.

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 2.00 million tons during March 2017, up 5 percent from February 2017 and up 4 percent from March 2016. Distillers wet grains (DWG) 65 percent or more moisture was 1.39 million tons in March 2017, up 14 percent from February 2017 and up 5 percent from March 2016.

Wet mill corn gluten feed production was 355 thousand tons during March 2017, up 32 percent from February 2017 and up 4 percent from March 2016. Wet corn gluten feed 40 to 60 percent moisture was 308 thousand tons in March 2017, up 5 percent from February 2017 and up 6 percent from March 2016.



Dairy Industry Applauds USDA Secretary Perdue for Supporting School Milk Options

Dairy leaders thanked newly confirmed Agriculture Secretary Sonny Perdue for recognizing the important role school milk plays in ensuring school-aged children get the nutrition they need.

In one of his first actions as Secretary of Agriculture, Perdue visited Catoctin Elementary School in Leesburg, Va., to announce that the U.S. Department of Agriculture (USDA) will implement regulations to allow school districts to again offer low-fat (1%) flavored milk as part of the National School Lunch and School Breakfast programs. Under the Obama Administration, USDA eliminated low-fat flavored milk as an option in the school meal and a la carte programs. Since then, consumption of school milk declined, as did overall participation in the school lunch program.

“In just the first two years after low-fat flavored milk was removed from the program, 1.1 million fewer school students drank milk with their lunch,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “Secretary Perdue’s action today recognizes that a variety of milks and other healthy dairy foods are integral to child nutrition programs in schools.”

“Today Secretary Perdue took an important step toward bringing back lunchroom favorites – low-fat chocolate and strawberry milk – that students have been missing,” said J. David Carlin, senior vice president of legislative affairs and economic policy for the International Dairy Foods Association. “When kids don’t drink milk, it’s extremely difficult for them to get the proper amounts of calcium, potassium, Vitamin D and other nutrients that dairy foods supply.”

Perdue was joined in Virginia by Senate Agriculture Committee Chairman Pat Roberts (R-KS). Throughout the visit, Perdue outlined principles to provide schools greater flexibility while maintaining the nutritional standards of the program.

“We would also like to thank Sen. Roberts for his efforts to bring more milk options and flexibility to the School Lunch and School Breakfast programs,” said Carlin.  In the House, Reps. GT Thompson (R-PA) and Joe Courtney (D-CT) were also strong supporters of enhancing the milk options available to school kids.

USDA will publish an interim rule to cover the regulatory changes needed to allow low-fat flavored milk in schools.  It is unclear when the change will be implemented.



Monsanto Scraps Plans to sell Precision Planting to Deere

Monsanto Co. has terminated an agreement to sell its Precision Planting LLC farm equipment business to machinery maker Deere & Co, the companies said on Monday, ending a legal fight with antitrust authorities over the deal.

The U.S. Department of Justice last August filed a lawsuit to block the sale, arguing the deal could make it more expensive for farmers to use fast, precise planting technology. The planned sale was originally announced in late 2015. Financial terms were not disclosed, reports Reuters.

Monsanto, the world's largest seed company, and Deere, the biggest U.S. farm equipment manufacturer, had been preparing to argue the case later this year.

"We just didn't see that there was a clear path going forward, that the DOJ was going to approve the transaction. We have a valuable business and people in limbo and it was just time to move on," Michael Stern, CEO of Climate Corporation, the Monsanto subsidiary that runs the Precision Planting business, said in an interview.

A digital collaboration agreement between Deere and Climate and a distribution deal with farm data management company Ag Leader will also be terminated, Deere said in a release.

The Department of Justice hailed the deal's termination as a victory for American farmers and consumers.



Precision Laboratories Partners with Monsanto to offer Intact™ Drift Reduction Agent in Roundup Ready PLUS® Crop Management Solutions

Precision Laboratories announces a partnership with Monsanto to include an adjuvant in Roundup Ready PLUS® Crop Management Solutions. Intact™ drift reduction agent is available for the 2017 crop season and can provide growers and applicators additional confidence with on-target application.

"This partnership is a benefit to growers who want to take the next step toward the most effective use of new technologies available to them," said Rick Wohlner, President of Precision Laboratories. "Monsanto's proven unique competencies in plant development and commitment to grower success align well with Precisions' dedication to exceptional adjuvant technology and agricultural stewardship."

The Roundup Ready PLUS® incentive offer will increase access to Intact for soybean and cotton growers. In addition, growers participating in Roundup Ready PLUS® Crop Management Solutions are eligible to receive an additional $0.50 per acre cash back incentive when they use Intact.

"We want to offer growers a broad selection of products through the Roundup Ready PLUS® platform," said Julio Negreli, North America Crop Protection Business Lead at Monsanto. "The addition of Intact provides growers and applicators additional options to develop and maintain a sustainable weed management program."

Intact is an optimized formulation of proven plant-based polymer technology that enhances drift control for a wide range of crop protection products. This technology helps ensure more droplets are retained on the target leaf surface for improved coverage, uptake potential and herbicide performance. When used with proper nozzles and spray conditions, wind-tunnel studies indicate Intact further reduces driftable fines that may be produced during application(s).

When used with XtendiMax™ herbicide with VaporGrip™ Technology, Intact can provide the following additional advantages:
-   Complements selected drift-reduction nozzles to help further reduce driftable spray fines during application(s).
-   Helps protect spray droplets from premature evaporation during flight from the nozzle tip to targeted weed's leaf surface.
-   Helps ensure the recommended ultra-coarse sized droplets, which minimize spray drift, are retained on target weeds.

Precision Laboratories is committed to advancing education and stewardship in agriculture through such programs as Roundup Ready PLUS® and Total Spray Droplet Management™. Please visit www.PrecisionLab.com for more information.



Willowood USA Adds Two New Products to its Lineup

Soybean growers have a new herbicide option, and specialty crop growers have a new spider mite protection option, both at a lower price point than leading brands.

Willowood Sulfentrazone MTZ herbicide for soybeans contains sulfentrazone, the same active ingredient as Authority® MTZ. And Willowood Bifenazate 50WDG contains bifenazate, the same active ingredient in Acramite®. Both post-patent formulations from Willowood USA have been approved by the Environmental Protection Agency and soon will be available from distributors and local ag retailers. State registrations are pending.

Willowood Sulfentrazone MTZ provides broad-spectrum control of tough winter weeds including glyphosate- and ALS-resistant weeds. Applied in the fall, Willowood Sulfentrazone MTZ offers residual control that lasts through the spring to tackle weed seeds before they germinate. It can also be applied early pre-plant and preemergence.

Specialty crop growers gain a low-cost alternative with Willowood Bifenazate 50WDG, a versatile miticide that attacks spider mites at all stages, from egg to adult. It provides fast knockdown on more than 15 species of spider mites, yet is easy on predator mites and beneficial insects. It is labeled for a variety of fruits, vegetables, tree nuts and other specialty crops.

Contact your distributor or local ag retailer for more information, or visit www.willowoodusa.com. Always read and follow label directions.



Modes of Action, Multiyear Plans Limit Weed Issues

Controlling weeds is becoming increasingly difficult. Success requires a multipronged strategy that keeps weeds at bay during the growing season and limits their ability to pressure fields in coming years.

To accomplish this, growers must make timely herbicide applications:
-    A burndown or tillage to start with a clean field.
-    A preemergence application of effective residual herbicides.
-    Timely postemergence applications featuring multiple herbicide modes of action.

Using multiple modes of action is vital to control current weed pressure while limiting the development of herbicide resistance that can cause heavier pressure in future years.

Weather muddies the waters
This spring, although temperatures were plenty warm over much of the Corn Belt, many growers had to pull in the reins because of wet fields. When possible, take time for an effective burndown.

“When it’s wet, some growers may consider skipping the burndown,” says David Hillger, Ph.D., Enlist field specialist for Dow AgroSciences. “A rainy spring can make it difficult to clean up fields before planting. Still, it’s usually best to delay planting and take time for a burndown. Soybeans in particular are somewhat forgiving of planting date.”

The value of residuals
Residual herbicides go a long way in helping the crop establish a good stand. Growers in the northern Corn Belt are finding preemergence residuals help keep tough weeds under control, reports Steve Snyder, an Enlist field specialist who covers Wisconsin, Minnesota and the Dakotas.

“Waterhemp and glyphosate-resistant giant ragweeds are two of our most challenging weeds,” Snyder reports. “Growers are using preemergence products such as Sonic herbicide to control these weeds in soybeans before applying postemergence herbicides.”

Snyder notes a good preemergence herbicide program delays weed emergence and expands the window for effective postemergence application.

Timing postemergence treatments
No matter how good a herbicide is, it’ll work better if it’s applied before weeds get too big.

“Weeds are more of a challenge when they get above 6 or 8 inches tall,” Hillger says. “Ideally, we want to treat them at 3 or 4 inches, especially marestail and Palmer amaranth, which are two of our biggest concerns in the Corn Belt.”

Weed resistance is forcing farmers to learn to be more flexible.

“We have to be willing to rotate modes of action to maintain the efficacy of our herbicide tools,” Hillger says. “We’ll need a multiyear approach on herbicides. We understand the value of rotating crops; we need to realize the value of rotating modes of action.”

Read the label
Snyder points out that this requires farmers to follow herbicide labels. “We may have two products with different brand names, one that we use on corn one year and the other that we use on soybeans the next. But if they offer the same mode of action, we’re taking a chance on weeds developing resistance to that mode of action.”

Hillger and Snyder note the Enlist™ weed control system is designed to support a weed management plan that features multiple modes of action. Enlist crops are tolerant to three postemergence herbicide modes of action. Farmers can treat Enlist soybeans with Enlist Duo® herbicide, a combination of new 2,4-D choline and glyphosate, as well as glufosinate. They can treat Enlist corn with Enlist Duo and the FOP family of grass herbicides.

“The Enlist weed control system offers flexibility,” Hillger says. “It provides growers an ideal way to control weeds this year and down the road.”