Monday November 5 Ag News

Running Your Business: What is your Product? 
Austin Duerfeldt - Agricultural Systems Economist Extension Educator

Very few farm operations are strictly production-based models anymore. Drive around the countryside and you will notice what I am talking about. Row crop farmer Smith sells seed corn as an additional business and his brother Randy does custom hay harvesting. Beef rancher Wilson builds fence and rents out some portable cattle chutes and alleys. Producer Davis is doing tile and conservation work.

Some of these side businesses become major income sources for those families. I want to help those interested in starting a business, or growing an existing business, prosper. This series will cover basic principles of marketing and management. Today’s topic is: understanding your product.

What is your Product?
I may have lost some of you by the seeming absurdity of the question. Farmer Smith sells seed corn so seed corn is the product. Surprisingly, a product is much deeper than that. Why does someone buy a John Deere over a Case IH, or vise-versa? Both companies are selling the same product, a tractor that provides the same benefit to the operation. By now, you have already started thinking of reasons why you choose one over the other such as color, brand, quality, services, customer care, or warranties. All of these considerations are part of the product. Products actually have three levels, the first of which is the Core Product.

Level One – Core Product
The Core Product is the intangible benefit of the product. What makes this item valuable to the customer? Look at hiring a chemical company to spray your bean field. The benefit of the chemical company spraying the field is you not walking beans with a bean hook in the dead heat of summer. Maybe it is the utility of an item, ease of use, convenience, or speed. The core product will always be the reason why people buy a product. The next two levels determine if the purchase will be with you or a competitor.

Level Two – Actual Product
Now we look at the actual product. This level is the physical product. To demonstrate, let’s say the product is a farm tractor. What do you physically need in the product? Another way to think of this question is under a generic banner of the product. What do you think of? The product needs to have a certain horsepower and numerous hydraulic hookups. The cab needs to be spacious and have room for all your monitors. The materials need to be of a certain standard with quick and easy maintenance. Front wheel assist is required, and it must have a tight turning radius. These considerations will help you define the actual product, the minimum product offerings needed to meet the core benefit from level one.

Level Three – Augmented Product
The final level is Augmented Product. These are features that go beyond the customer's basic expectations. Maybe, it is free two-day shipping or a fantastic warranty. This level is going to be the non-physical part of the product. Brand images and identities are formed at this level and help set you apart from competitors. Other areas, such as services, installation, financing, and customer care, fall into this level. The features in this level will determine if a customer sees added value in buying from you and whether they will pay a premium for that added value. You build customer loyalty and satisfaction at this level as you mold the product in different ways to meet and exceed the individual customer’s needs.

Bringing It All Together
Too often business owners don’t fully understand what they are actually selling. By fully understanding what your product is, you have a wealth of power. You might identify situations where you undervalue or overvalue your product. Maybe you are starting to lose customers to a competitor who is selling the exact same actual product for the exact same price. Figuring out your product will help you to find your niche, build a brand, and establish customer loyalty and satisfaction.



FSA County Committee Elections to Begin; Producers to Receive Ballots Week of Nov. 5

Nebraska Farm Service Agency (FSA) State Executive Director Nancy Johner announced the U.S. Department of Agriculture (USDA) today began mailing ballots to eligible agricultural producers for the 2018 FSA county committee elections. Producers must return ballots to their local FSA offices by Dec. 3, 2018, to ensure their vote is counted.

“County committee members represent the farmers, ranchers and foresters in our Nebraska communities,” said Johner. “Producers elected to these committees have always played a vital role in local agricultural decisions. It is a valued partnership that helps us better understand the needs of the farmers and ranchers we serve.”

Nearly 7,700 FSA county committee members serve FSA offices nationwide. Each committee has three to 11 elected members who serve three-year terms of office. One-third of county committee seats are up for election each year. County committee members apply their knowledge and judgment to help FSA make important decisions on its commodity support programs, conservation programs, indemnity and disaster programs, emergency programs and eligibility.

Johner said producers must participate or cooperate in an FSA program to be eligible to vote in the county committee election. Farmers and ranchers who supervise and conduct the farming operations of an entire farm, but are not of legal voting age, may also be eligible to vote.

Farmers and ranchers will begin receiving their ballots the week of Nov. 5. Ballots include the names of candidates running for the local committee election. Voters who did not receive a ballot can pick one up at their local FSA office. Ballots returned by mail must be postmarked no later than Dec. 3, 2018. Newly elected committee members will take office Jan. 1, 2019.

For more information, visit the FSA website at www.fsa.usda.gov/elections. You also may contact your local USDA Service Center or FSA office. Visit http://www.farmers.gov to find an FSA office near you.



Midwest Rural Ag Safety and Health Conference Nov. 27-29 

Farm safety advocates will gather at the Mid America Center in Council Bluffs Iowa for The Midwest Rural Agricultural Safety and Health Conference on November 27-29. The theme for the conference is “Stressing Resilience.”

The Central States Center for Agricultural Safety and Health (CS-CASH) at the University of Nebraska Medical Center will co-host the conference along with two Iowa agricultural safety and health organizations. The conference keynote speaker will be nationally known farm management consultant Dick Wittman, said CS-CASH coordinator Ellen Duysen. Wittman will give a presentation titled “Planning and Management, Keys to Reducing Stress and Improving Resilience in Agriculture.”

“The conference draws people from a variety of backgrounds," Duysen said, "but all in attendance are concerned about some aspect of keeping farmers, farmworkers and their families safe and healthy. This year’s attendees can elect to attend the full conference, a single day, or one of three special workshops”.

Workshops include an Immigrant Worker Health and Safety program on Tuesday November 27 from 12-4 p.m. It will be presented by Mark Grey, director of the Iowa Center for Immigrant Leadership and Integration at the University of Northern Iowa. Registration is $10 and includes lunch.

Anhydrous ammonia safety training will be the focus of a workshop on Wednesday, November 28, from 6-9 p.m. at the Treynor Iowa Fire Department. This hands-on workshop includes training on an anhydrous tank simulator and is targeted to emergency responders including fire fighters and EMS. The workshop will be conducted by Dan Neenan, director of the National Education Center for Farm Safety (NECAS). This workshop is free to firefighters and EMS personnel and includes supper. Register by calling NECAS at 888-844-6322

Dan Neenan will also present Anhydrous Ammonia Safety Training targeted to farmers, elevator and co-op staff, and the public Thursday, November 29, from 12-2:30 pm. Registration is $10 and includes lunch.

Conference and registration information is available online or by contacting Ellen Duysen at ellen.duysen@unmc.edu. Discounted rates are available for farmers and students.



Cooperative Producers adds E15 at Funk location

The Nebraska Ethanol Board applauds Cooperative Producers, Inc. (CPI) for adding E15 at their fuel site in Funk, Nebraska. This is CPI’s third location selling E15 in Nebraska.

“As a farmer-owned cooperative we need to support the folks who do business with us,” said Gary Brandt, vice president of Energy with CPI. “CPI uses 500,000 bushels of corn in the ethanol we sell every year, so adding more ethanol to the pumps in Funk really brings a sense of ownership to our growers who work hard throughout the year to feed and fuel our country.”

Brandt noted that CPI’s Funk location only sold a small amount of conventional clear gasoline, so they are removing that product to sell E10 and E15 fuel. CPI did not need to modify fuel storage or dispenser equipment to add E15.

“This location doesn’t have a flex fuel pump, but we’re still able to offer E15 by blending it at the pipeline terminal,” Brandt said. “We’re looking forward to seeing the impact on our business by only offering ethanol-blended fuels. As E15 fuel gains momentum, we believe it will become available at most fuel stations in Nebraska.”

E15, a blend of 15 percent ethanol and 85 percent gasoline, is typically priced 5 to 10 cents lower than regular unleaded, and has an octane rating of 88. The U.S. Environmental Protection Agency approved E15 for use in all vehicles 2001 and newer, and it is currently available at more than 40 stations across Nebraska.

“We appreciate Cooperative Producers’ move to add higher blends like E15, because more ethanol means fewer toxic chemicals in our fuel,” said Sarah Caswell, Nebraska Ethanol Board administrator. “Using higher blends of ethanol is a good decision for all Nebraskans. It helps the state’s economy, consumers’ wallets, vehicle engines and the environment. Ethanol’s impact across the country and the globe continues to grow, but it starts right here at home.”

“We often refer to our industry as the ‘golden triangle,’” said Ted Schrock, district 6 director of the Nebraska Corn Board and farmer from Elm Creek. “We have productive corn, ethanol and livestock sectors, which all work together to boost our state’s economy while providing us with food, fuel and fiber. CPI Cooperative has taken a great step in strengthening this triangle by using a renewable, locally-produced product that benefits everyone who likes to breathe clean air while saving at the pump.”

To learn more about diversifying fuel choice and adding more ethanol blends, visit www.flexfuelforward.com. Fuel retailers may also qualify for a fuel infrastructure grant from the Nebraska Corn Board: http://nebraskacorn.gov/news-releases/2018grants/.



Two Ag Chemical Dealer Update Sessions Planned for December

Crop production product updates and recommendations are featured topics at meetings sponsored by Iowa State University Extension and Outreach in Iowa City, Dec. 11 and Ames, Dec. 12.

The meetings give ag input providers an opportunity to meet with ISU Extension and Outreach specialists and review current research, discuss new products and learn of new recommendations.

Topics for 2018 include technology and research updates in fertilizer spreading, weed and corn disease updates and information on soybean gall midge.

Meetings are approved for Certified Crop Adviser credits. In addition, the meetings offer Iowa Commercial Pesticide Applicator recertification in categories 1A, 1B, 1C and 10 for calendar year 2018. Recertification is included in meeting registration. Attendance at the entire meeting is required for recertification.

Early registration is $70 if received by midnight, Dec. 4 (Iowa City) or Dec. 5 (Ames). Late or on-site registration is $85. Visit www.aep.iastate.edu/acu for program details or to register online. For additional information contact an ISU Extension and Outreach field agronomist hosting the meeting.

Iowa City – Dec 11.
Rebecca Vittetoe, rka8@iastate.edu, 319-653-4811
Virgil Schmitt, vschmitt@iastate.edu, 563-263-5701
Joshua Michel, jjmichel@iastate.edu, 319-523-2371

Ames – Dec 12.
Angie Rieck-Hinz, amrieck@iastate.edu, 515-532-3453
Meaghan Anderson, mjanders@iastate.edu, 319-331-0058
Mike Witt, witt@iastate.edu, 641-747-2276



U.S. Beef Exports Remain Solid; Pork Exports Still Facing Headwinds

U.S. beef exports remained very strong in September while pork exports continued to be impacted by retaliatory duties in China and Mexico, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef exports cooled from the record results posted in August, but were still significantly higher year-over-year. Pork muscle cut exports improved over last September’s volume, but were offset by sharply lower shipments of pork variety meat.

September beef exports totaled 110,160 metric tons (mt), up 6 percent from a year ago, valued at $687.1 million – up 11 percent. For January through September, beef exports were just over 1 million mt, up 9 percent from a year ago, while value surged 18 percent to $6.2 billion. For beef muscle cuts only, the year-over-year increases were even more impressive, jumping 13 percent in volume (777,740 mt) and 20 percent in value ($5.54 billion).

Exports accounted for 13.7 percent of total beef production in September and 11.4 percent for muscle cuts only, up from 12.5 percent and 10.4 percent, respectively, a year ago. For the first three quarters of 2018, exports accounted for 13.5 percent of total production (up from 12.8 percent) and 11.1 percent for muscle cuts – up one full percentage point from last year. Beef export value equated to $334.63 per head of fed slaughter in September and $320.85 for January through September, each up 16 percent from a year ago.

September pork export volume was down 2 percent from a year ago to 179,423 mt, while export value fell 7 percent to $470.2 million. Pork muscle cuts were 2 percent higher than a year ago at 146,542 mt, but value still declined 3 percent to $397.6 million. September variety meat exports dropped significantly in both volume (32,881 mt, down 18 percent) and value ($72.6 million, down 21 percent). For January through September, combined pork and pork variety meat exports were 1 percent above last year’s record pace at 1.81 million mt and 2 percent higher in value at $4.79 billion. For pork muscle cuts only, exports increased 6 percent from a year ago in volume (1.46 million mt), valued at just under $4 billion (up 3 percent).

September exports accounted for 24.8 percent of total pork production, up from 23.6 percent a year ago. For muscle cuts only, the percentage exported was 21.8 percent – up two full percentage points from last September. For January through September, pork exports accounted for 26.1 percent of total production, down from 26.5 percent last year, but the percentage of muscle cuts exported increased from 22.1 to 22.7 percent. Export value per head slaughtered was down 1 percent from a year ago in September ($48.72) and for January through September ($52.46).

"With a full quarter still to be reported, beef export value records are already being surpassed in some markets and global value is on track for $8 billion by year’s end," said USMEF President and CEO Dan Halstrom. "Pork exports have also held up relatively well, but unfortunately the obstacles U.S. pork faces in China and Mexico are putting a lot of pressure on export value."

New value record in Korea tops beef export highlights
South Korea has been the growth pacesetter for U.S. beef exports in 2018, and September was no exception. Exports to Korea were up 22 percent from a year ago in volume (19,116 mt) and were 29 percent higher in value ($143.1 million). January-September exports reached 180,495 mt, up 37 percent from a year ago, while export value soared 51 percent to $1.29 billion, already breaking last year’s full-year value record. These results included a 28 percent increase in chilled beef exports to 40,372 mt, valued at $391 million (up 38 percent). U.S. share of Korea’s total beef imports has increased sharply this year, from 44.7 to 48.7 percent, as U.S. beef underpins Korea’s growing beef consumption.

September beef exports to leading market Japan were up 4 percent from a year ago in both volume (28,086 mt) and value ($172.3 million). For the first three quarters of 2018, exports to Japan were up 7 percent from a year ago in volume (252,871 mt) while value increased 10 percent to $1.59 billion. Chilled beef exports to Japan were down 1 percent to 111,908 mt, but value still climbed 7 percent to $895 million. On a value basis, the U.S. is the top supplier to Japan with 46.8 percent of imports, up slightly from the first three quarters of 2017. But on a volume basis, U.S. beef accounted for just under 42 percent of total imports, down from 43 percent in the same period last year and trailing Australia’s 48.6 percent share. With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) set to enter into force Dec. 30, the tariff advantage enjoyed by Australian beef will be extended to all of U.S. beef’s major competitors in Japan with another duty reduction on April 1, the start of Japan’s fiscal year.

For January through September, other highlights for U.S. beef exports include:
-    Beef exports to Taiwan were up 32 percent from a year ago in volume (43,539 mt), while value reached $403.8 million – up 36 percent and just short of last year’s annual record of $409.7 million. Chilled exports to Taiwan were up 29 percent in volume (17,523 mt) and 36 percent in value ($221 million), as the United States captured 75 percent of Taiwan’s chilled beef market – the highest market share of any Asian destination.
-    Exports to Mexico were up 1 percent from a year ago in volume (177,906 mt) and 8 percent higher in value ($783.1 million). With a strong fourth quarter, exports to Mexico should top $1 billion for the first time since 2015.
-    After slowing in the summer months, beef exports to China/Hong Kong rebounded in September (10,076 mt valued at $82 million). This pushed January-September results 6 percent higher than a year ago in volume (89,660 mt) and 28 percent higher in value ($720.8 million). This included exports to China of 5,114 mt valued at $44.2 million.
-    A strong performance in the Philippines and solid growth in Vietnam pushed beef exports to the ASEAN region 13 percent ahead of last year’s pace in volume (33,924 mt) and 25 percent higher in value ($186.6 million).
-    Strong September results pushed exports to South Africa 8 percent higher year-over-year in volume (11,508 mt), while value jumped 28 percent to $11.7 million. Exports to Angola also increased significantly in both volume (2,643 mt, up 15 percent) and value ($3.6 million, up 45 percent). Exports to Africa (which do not include Egypt) were down 8 percent in volume (16,880 mt) but still increased 8 percent in value ($18.9 million).

Korea, Latin America continue to shine for U.S. pork
September pork exports to South Korea increased 33 percent from a year ago in volume (12,486 mt) and 30 percent in value ($33.6 million). Through September, exports increased 43 percent in volume (172,022 mt) while export value climbed 48 percent to $489.2 million – already topping the 2017 year-end total of $475 million. U.S. share of Korea’s total pork imports has increased dramatically this year, from 31 to 35 percent, even as imports also trended higher from most of Korea’s main suppliers.

Pork exports to South America continued to gain momentum in September, led by strong growth in Colombia and Peru and a rebound in exports to Chile. Through the first three quarters of the year, exports to the region were 27 percent ahead of last year’s record pace in volume (92,252 mt) and 22 percent higher in value ($227.9 million).

With steady growth in mainstay markets Honduras and Guatemala and sharply higher shipments to Panama, El Salvador, Nicaragua and Costa Rica, January-September exports to Central America increased 20 percent in volume (58,756 mt) and 17 percent in value ($138.7 million). This region is also coming off a record year in 2017.

Exports to the Dominican Republic have already broken the records set last year, with volume climbing 35 percent to 32,859 mt, valued at $71.6 million (up 29 percent).

Other January-September results for U.S. pork exports include:
-    Exports to Japan increased 2 percent year-over-year in both volume (295,346 mt) and value ($1.22 billion). This included a 2 percent decrease in chilled pork volume (155,395 mt) while value held steady at $750 million. U.S. share of Japan’s total imports has held relatively steady this year at 35 percent. But with CPTPP set to enter into force Dec. 30 and with the Japan-EU Economic Partnership Agreement also on track to be implemented in the coming months, U.S. pork will soon face significant tariff disadvantages in its leading value market.
-    Despite a fourth straight month in which shipments were below last year’s level, exports to leading volume market Mexico remained 1 percent ahead of last year’s record pace at 589,235 mt. Export value, however, has felt intense pressure from Mexico’s retaliatory duties, dropping 8 percent to $1.01 billion. Canada’s January-September exports to Mexico were up 20 percent to 93,346 mt (valued at $126.5 million, up 25 percent). EU exports also surged to Mexico in July (1,809 mt, up 747 percent) and August (2,343 mt, up 733 percent) and are expected to continue gaining momentum as Spain, Denmark and Germany take advantage of Mexico’s recently implemented duty-free pork quota.
-    Exports to China/Hong Kong declined 26 percent from a year ago to 277,779 mt, with value dropping 14 percent to $667.9 million. This region is the largest destination for U.S. pork variety meat exports, which were down 27 percent in volume (177,747 mt) and 13 percent in value ($466.2 million).
-    Led by strong growth in the Philippines and Vietnam, exports to the ASEAN region increased 40 percent in volume (49,406 mt) and 29 percent in value ($123.5 million). This was fueled by a surge in pork variety meat exports to the region, which more than doubled over last year in both volume (20,111 mt, up 147 percent) and value ($32.2 million, up 122 percent).
-    With solid growth in Australia and a steady performance in New Zealand, exports to Oceania were 11 percent ahead of last year’s pace in volume (62,360 mt) and 10 percent higher in value ($182.3 million).

Lamb variety exports climb in September, but muscle cuts still sluggish
September exports of U.S. lamb more than doubled from a year ago to 1,177 mt (up 106 percent), fueled by a sharp increase in lamb variety meat exports to Mexico. But export value was down 12 percent to $1.63 million as muscle cuts continued to struggle. Lamb muscle cut exports were just 126 mt in September, down 53 percent from a year ago and matching the lowest monthly volume of 2018.

Through the first three quarters of the year, lamb exports were 65 percent ahead of last year’s pace in volume (9,210 mt) and 16 percent higher in value ($17.1 million). The increase is mainly attributable to stronger variety meat demand in Mexico, but muscle cut exports showed promising growth in the Bahamas, the United Arab Emirates, Taiwan and the Philippines.