Friday, March 29, 2019

Friday March 29 Ag News


Nebraska corn growers intend to plant 9.70 million acres this year, up 1 percent from 2018, according to the USDA's National Agricultural Statistics Service.

Soybean planted acreage is expected to be 5.40 million acres, down 5 percent from last year.

All hay acreage to be harvested is expected to total 2.80 million acres, up 4 percent from 2018.

Winter wheat acres seeded in the fall of 2018 are estimated at a record low 1.10 million acres, unchanged from last year.

Sorghum growers in Nebraska intend to plant 210,000 acres, down 9 percent from a year ago.

Oat intentions are estimated at 115,000 acres, down 8 percent from last year.

Dry edible bean acreage intentions are estimated at 95,000 acres, down 32 percent from 2018. Beginning in 2019, chickpeas are excluded from the dry edible bean estimates.

Sugarbeet growers expect to plant 43,800 acres, down 4 percent from last year.

Sunflower producers expect to plant a record low 25,000 acres, down 32 percent from 2018. Oil varieties account for a record low 15,000 acres, down 40 percent from a year ago. Non-oil varieties made up the balance of 10,000 acres, down 17 percent from the previous year.

Dry edible pea acreage intentions are estimated at 55,000 acres, down 5 percent from last year.
Estimates in this report are based on a survey conducted during the first two weeks of March.

Iowa Prospective Plantings Report

Iowa farmers intend to plant 13.6 million acres of corn for all purposes in 2019 according to the USDA, National Agricultural Statistics Service – Prospective Plantings report. This is up 400,000 acres from 2018.

Producers intend to plant 9.40 million acres of soybeans in Iowa this year. This is a 600,000 acre decrease from 2018.

Iowa farmers intend to plant 135,000 acres of oats for all purposes, unchanged from last year.
Farmers in Iowa expect to harvest 1.05 million acres of all dry hay for the 2019 crop year. This is 110,000 acres more than harvested in 2018.

The Prospective Plantings report provides the first official, survey-based estimates of U.S. farmers’ 2019 planting intentions. NASS’s acreage estimates are based on surveys conducted during the first two weeks of March from a sample of approximately 82,400 farm operators across the United States with more than 2,800 from Iowa. Actual plantings will depend upon weather, economic conditions and the availability of production inputs at the time producers make their final planting decisions.

USDA:  Corn Planted Acreage Up 4 Percent from 2018

Soybean Acreage Down 5 Percent
All Wheat Acreage Down 4 Percent
All Cotton Acreage Down 2 Percent

Corn planted area for all purposes in 2019 is estimated at 92.8 million acres, up 4 percent or 3.66 million acres from last year. Compared with last year, planted acreage is expected to be up or unchanged in 34 of the 48 estimating States.

Soybean planted area for 2019 is estimated at 84.6 million acres, down 5 percent from last year. Compared with last year, planted acreage is down or unchanged in 26 of the 29 estimating States.

All wheat planted area for 2019 is estimated at 45.8 million acres, down 4 percent from 2018. This represents the lowest all wheat planted area on record since records began in 1919. The 2019 winter wheat planted area, at 31.5 million acres, is down 3 percent from last year but up 1 percent from the previous estimate. Of this total, about 22.4 million acres are Hard Red Winter, 5.55 million acres are Soft Red Winter, and 3.55 million acres are White Winter. Area planted to other spring wheat for 2019 is estimated at 12.8 million acres, down 3 percent from 2018. Of this total, about 12.4 million acres are Hard Red Spring wheat. Durum planted area for 2019 is estimated at 1.42 million acres, down 31 percent from the previous year.

All cotton planted area for 2019 is estimated at 13.8 million acres, 2 percent below last year. Upland area is estimated at 13.5 million acres, down 2 percent from 2018. American Pima area is estimated at 255,000 acres, up 2 percent from 2018.


Nebraska corn stocks in all positions on March 1, 2019 totaled 1.01 billion bushels, up 5 percent from 2018, according to the USDA's National Agricultural Statistics Service. Of the total, 600 million bushels are stored on farms, up 11 percent from a year ago. Off-farm stocks, at 406 million bushels, are down 3 percent from last year.

Soybeans stored in all positions totaled 217 million bushels, up 31 percent from last year. On-farm stocks of 80.0 million bushels are up 57 percent from a year ago, and off-farm stocks, at 137 million bushels, are up 19 percent from 2018.

Wheat stored in all positions totaled 48.9 million bushels, down 7 percent from a year ago. On-farm stocks of 2.15 million bushels are down 17 percent from 2018, and off-farm stocks of 46.8 million bushels are down 7 percent from last year.

Sorghum stored in all positions totaled 7.53 million bushels, up 37 percent from 2018. On-farm stocks of 890,000 bushels are up 19 percent from a year ago and off-farm holdings of 6.64 million bushels are up 40 percent from last year.

On-farm oat stocks totaled 360,000 bushels, down 28 percent from 2018.

Iowa Grain Stocks Report

Corn stored in all positions in Iowa on March 1, 2019, totaled 1.57 billion bushels, down 8 percent from March 1, 2018, according to the latest USDA, National Agricultural Statistics Service – Grain Stocks report. Of the total stocks, 63 percent were stored on-farm. The December-February 2019 indicated disappearance totaled 614 million bushels, 10 percent below the 685 million bushels from the same period last year.

Soybeans stored in all positions in Iowa on March 1, 2019, totaled 420 million bushels 15 percent above the 366 million bushels on hand March 1, 2018. This is the largest March stocks on record, 11 percent higher than the previous record of 380 million bushels on hand March 1, 2007. Of the total stocks, 46 percent were stored on-farm. Indicated disappearance for December-February 2019 is 107 million bushels, 12 percent below the 122 million bushels from the same quarter last year.

Oats stored on-farm in Iowa on March 1, 2019, totaled 760 thousand bushels, up 1 percent from March 1, 2018.

USDA: Corn Stocks Down 3 Percent from March 2018

Soybean Stocks Up 29 Percent
All Wheat Stocks Up 6 Percent

Corn stocks in all positions on March 1, 2019 totaled 8.60 billion bushels, down 3 percent from March 1, 2018. Of the total stocks, 5.13 billion bushels were stored on farms, up 3 percent from a year earlier. Off-farm stocks, at 3.47 billion bushels, are down 11 percent from a year ago. The December 2018 - February 2019 indicated disappearance is 3.33 billion bushels, compared with 3.67 billion bushels during the same period last year.

Soybeans stored in all positions on March 1, 2019 totaled 2.72 billion bushels, up 29 percent from March 1, 2018. Soybean stocks stored on farms are estimated at 1.27 billion bushels, up 49 percent from a year ago. Off-farm stocks, at 1.45 billion bushels, are up 15 percent from last March. Indicated disappearance for the December 2018 - February 2019 quarter totaled 1.03 billion bushels, down 2 percent from the same period a year earlier.

All wheat stored in all positions on March 1, 2019 totaled 1.59 billion bushels, up 6 percent from a year ago. On-farm stocks are estimated at 368 million bushels, up 42 percent from last March. Off-farm stocks, at 1.22 billion bushels, are down 1 percent from a year ago. The December 2018 - February 2019 indicated disappearance is 419 million bushels, 11 percent above the same period a year earlier.

Nebraska Farmers Union Spring 2019 District Meeetings

District 5 Spring Meeting:  Brewsky’s, Food & Spirits, 1602 South St., Lincoln, NE 68502
Monday, April 8, 2019.  6:00 pm supper on your own with meeting to follow
 · District 5 Director’s Report:  Ben Gotschall
· NFU Convention, state & national issues:  John Hansen
Flood Relief efforts and Nebraska Legislature updates will be given.
Special Guests: Senators Tom Brandt & Myron Dorn
Bring a friend, neighbor or family member. Donations will be accepted to the NeFU Foundation for flood relief at the meeting.
For more information, call Ben Gotschall (402) 705-8679.

District 7 Spring Meeting: Barnstormers Family Bar & Grill, 4100 S. 13th St., Norfolk
Wednesday, April 10, 2019 11:00 am Lunch on your own with meeting to follow
District 7 Director’s Report:  Martin Kleinschmit
NFU Convention & national issues:  John Hansen
Flood Relief efforts and Nebraska Legislature updates will be given
Special Guest:  Josh Moenning-Mayor of Norfolk & Director of New Power Nebraska
Bring a friend, neighbor or family member. Donations will be accepted to the NeFU Foundation for flood relief at the meeting.
For more info, call Art Tanderup (402) 278-0942 or (402) 887-1396.

District 6 Spring Meeting: 
The Office bar & Grill, 121 N Main Street, Hooper, NE 68031
Wednesday, April 10, 2019 6:00 pm supper on your own with meeting to follow.
 ·District 6 Director’s Report:  Graham Christensen
· NFU Convention report: Graham Christensen & John Hansen
Flood Relief efforts and Nebraska Legislature updates will be given.
LB227: Nuisance Law, LB729 Soil Health Productivvity
LB23 Soil Health Task Force, Property Tax Reform & Hemp
Updates on the Dist. 6 First Tree-Range Regenerative Poultry Farms
Bring a friend, neighbor or family member. Donations will be accepted to the NeFU Foundation for flood relief at the meeting.
For more information, call Paul Poppe (402) 380-4508.

Confirmed Case of Equine Herpesvirus in Altoona Has Been Contained

The Department of Agriculture and Land Stewardship received positive test results of a case of Equine Herpesvirus (EHV) at a barn in Altoona. To prevent the virus from spreading, other horses in the barn were quarantined for two weeks, with barn staff checking their temperatures twice daily. State Veterinarian Dr. Jeff Kaisand is working with owners and staff to ensure proper procedures are followed to contain the virus.

EHV can cause herpesvirus myeloencephalopathy (EHM), a neurological disease affecting horses that can cause damage to blood vessels in the brain and spinal cord. EHV does not pose any threat to humans or other species of animals.

EHV is common in large horse populations and is spread through respiratory tract and nasal secretions. Most horses have been exposed to EHV at some point in their lives and most show no serious signs of illness.

The Department encourages horse owners and caretakers to monitor their horses for symptoms of EHV. If a horse develops a fever or shows signs of other symptoms, such as loss of coordination, leaning against a wall or fence to maintain balance, nasal discharge, decreased urine output, loss of tail tone, hind leg weakness, lethargy or the inability to stand, owners should call their veterinarian immediately.

To prevent EHV horse owners should practice the following good husbandry and biosecurity practices at all times. If you own or interact with horses:
-    Make sure you work with a veterinarian to have a good health program for your horse(s).
-    Practice good biosecurity while at and after attending events where multiple horses gather. This includes:
-        Not sharing equipment with other horse owners. This includes avoiding shared water and feed buckets/troughs between other horse(s) and your horse(s).
-        Wash hands or use hand sanitizer between handling other horse(s) and your horse(s).
-        When returning home, isolating your horse(s) that were at the event from your horse(s) that did not attend. This will help keep the rest of your horses from being exposed to any potential diseases brought back from the event.
-    For additional guidance speak with your veterinarian.

Iowa Winner of Pulled Pork Madness Contest

An Ottumwa restaurant beat out fifteen other competitors to take the championship bracket of Pulled Pork Madness sponsored by the Iowa Pork Producers Association (IPPA). Warehouse Barbecue Co. was the top vote-getter in this social media contest that had 2,200 votes cast as Iowans worked their way through the Sweet Sixteen group announced March 13.

IPPA's Consumer Outreach Director Kelsey Byrnes initially invited Iowa Pork social media followers to nominate the Iowa restaurant they felt had the best pulled pork sandwich. About 1,130 pork fans nominated 80 restaurants and Byrnes then selected the top two vote-getters in each of IPPA's eight districts to fill out the "Sweet 16" bracket that got the head-to-head contests underway.

In the championship round, Warehouse Barbecue Co. defeated Iowa BBQ Co. of Le Mars.

Warehouse Barbecue Co. is owned by a father and son duo, Dusty and Roger Ware. The menu describes their winning Pulled Pork as made from hickory-smoked Duroc premium pork. You can order a pulled pork sandwich, or buy the pulled pork in ¼, ½, or 1-pound quantities.

"We hold this social media contest to attract new pork fans and remind people that there are restaurants in all parts of Iowa that offer really great barbecue pork," Byrnes said.

Along with bragging rights, Warehouse Barbecue Co. receives $250 and a "Pulled Pork Madness" plaque.

R-CALF USA Asks Attorney General Barr to Block Merger Between National Beef Packing Co. and Iowa Premium

Yesterday, R-CALF USA sent a formal request to U.S. Attorney General William P. Barr urging him to block the proposed acquisition of Iowa beef packer Iowa Premium by National Beef Packing Company (National Beef), which is now majority owned by Brazilian-based Marfrig Global Foods (Marfrig).

In its nine-page letter, R-CALF USA wrote that National Beef’s acquisition of Iowa Premium will substantially reduce competition for fed cattle regionally as well as nationally, thus harming independent U.S. cattle producers and will also likely substantially reduce competition for boxed beef, which will harm American consumers.

The letter points out that National Beef is a member of the “Big 4,” which the group refers to as a beef packing cartel because the Big 4 beef packers already control 85 percent of the nation’s fed cattle market. According to a Cattle Buyer’s Weekly report referenced in the letter, National Beef slaughters 12,000 fed cattle per day and Iowa Premium slaughters 1,100 fed cattle per day, making Iowa Premium the nation’s twentieth largest beef packer.  

The group argues that allowing National Beef to roll Iowa Premium into the Big 4 cartel will accelerate the already shrinking price discovering cash market; will accelerate the decline of smaller to mid-sized beef packing plants; and will allow the Brazilian beef packing cartel to weaken the U.S. cattle industry.

The letter states that the Iowa-Minnesota fed cattle procurement region “is the U.S. cattle industry’s last bastion of robust regional competition for fed cattle.” The Iowa-Minnesota fed cattle region is the only region in which over 50 percent of fed cattle are still purchased in the competitive cash market.

The group states this will likely change if the acquisition is allowed to occur because small to mid-sized beef packers like Iowa Premium operate differently than do the Big 4. Among the differences the group cites are that smaller packers are not inclined to refuse to buy cattle on a live weight basis by offering bids only on a carcass weight basis, which then subjects cattle producers to shipping costs; and smaller packers are more inclined to “step out” of the narrow, one- to two-day, late week trading window established by the Big 4 to offer more competitive bids earlier in the week. 

Another difference the group cited is that unlike National Beef, which has joined in a cartel with Tyson and Cargill to limit access to the marketplace unless producers become certified under the Beef Quality Assurance (BQA) program, smaller packers are less likely to engage in such conduct. The group explains that National Beef’s conduct is an example of market power abuse as National Beef does not even specify which particular production standards it wants producers to follow.

“Indeed, it does not need to because by joining the cartel, the three Big 4 packers know they possess sufficient market power to force producers into compliance, including producers whose cattle are not purchased by National Beef or the other three packers,” the group wrote.

The group also raised concerns with what it calls the Brazilian cartel that is trying to “swallow up America’s critical food production facilities and gain control over America’s food-production supply chain, particularly its live cattle supply chain.”

According to the letter, National Beef’s new owner, Brazilian-based Marfrig, had been cited for antitrust violations in Brazil and was implicated in the widespread Brazilian food safety scandal that caused the U.S. to close its border to fresh Brazilian beef in 2017.

“The U.S. Department of Justice should take decisive action to prevent Marfrig-owned National Beef from acquiring Iowa Premium on the grounds that Marfrig demonstrates an unrepentant propensity for: i) exploiting cattle producers through anticompetitive buying practices; ii) exploiting consumers through the production and sales of unsafe beef; iii) violating basic food safety standards; and, iv) engaging in cartel behavior with JBS, the group wrote.

In its conclusion, R-CALF USA urged the U.S. Department of Justice’s Antitrust Division to aggressively enforce United States antitrust laws to block the proposed acquisition of Iowa Premium by National Beef.

ICGA Leaders Raise Concerns Over Proposed Rule at EPA Hearing

Today, Iowa Corn Growers Association® (ICGA) President Curt Mether and ICGA At-Large Director Bob Hemesath testified to the Environmental Protection Agency (EPA) on the importance and impact of finalizing the proposed E15 RVP rule released earlier this month. The proposal would allow for year-round E15 sales; however, it also raises many concerns for farmers and ethanol blending due to a few renewable identification number (RIN) reform proposals within the proposed rule.

In Mether’s testimony he noted, “We support using the proposed substantially similar determination for equitable RVP treatment of E15.” He also emphasized that, “EPA needs to finalize the proposed RVP rule by June 1 because the current landscape is causing needless confusion for consumers and retailers and limiting greater ethanol sales through increased E15 availability."

Hemesath added, “Programs and initiatives that help put in place biofuels pumps and tanks have some serious momentum, and that momentum has been multiplied on the heels of this proposal to ensure E15 is now available year-round to motorists around the country.”

However, both farmer leaders cautioned the EPA on the RIN reform proposals, with Mether stating, “When it comes to the RIN reform proposals within this proposed rulemaking, we ask that EPA ensure changes to the RIN market are fair to those who are actually blending biofuels. The current proposal seems to tip the scales in favor of those who choose not to blend biofuels, instead of incentivizing those who blend biofuels and actually further the goals of the RFS.”

ICGA and its members will continue to engage with the EPA and our elected leaders on this proposed rule to finalize equitable RVP treatment for E15 by June 1. ICGA encourages farmers and ethanol supporters to join us to lift the outdated restrictions on E15 to ensure this proposal continues to enhance ethanol blending opportunities by submitting a comment to the EPA and supporting E15 year- around here. The EPA is accepting comments on the proposed rule until April 29.

E15 is a fuel blend containing 15 percent ethanol and is approved for use in all 2001 and newer vehicles, making up roughly 90 percent of the vehicles on the road today. Currently, outdated Reid Vapor Pressure (RVP) regulations force fuel retailers to restrict sales of E15 to flex fuel vehicles (FFV) only from June 1 to September 15, the peak driving season. Today’s EPA hearing allows ICGA to speak and inform the public about the importance of year-round sales of E15.

NCGA Testifies in Support of Year-Round E15

National Corn Growers Association First Vice President and Minden, Iowa, farmer Kevin Ross spoke in support today of the Environmental Protection Agency’s (EPA) proposed rule to allow for year-round sales of E15 across the country.

“Farmers stand ready to work with the Administration to clear obstacles to higher blends of ethanol such as E15 and ensure a final rule works for the full ethanol and fuel supply chain,” Ross said. “To ensure E15 sales are not interrupted, NCGA urges EPA to complete this rulemaking by June 1.”

Ross’s comments came during a hearing held as part of the rulemaking that would remove outdated regulations requiring retailers in many areas of the country to stop selling E15, a blend of gasoline and 15 percent ethanol approved for all vehicles 2001 and newer, during the summer months.

Year-round E15 is a no-cost means for farmers to grow demand. It also saves drivers between 3 and 10 cents per gallon and reduces greenhouse gas emissions.

During the hearing, Ross also spoke on the negative impacts EPA’s expansive Renewable Fuel Standard (RFS) waivers for refiners have had on farmers who are already struggling amid declining farm incomes and trade disruptions. NCGA has urged the EPA to rein in RFS exemptions provided to profitable refiners.

Ross also urged caution around the proposed rule’s complex RIN market reform proposal. “To ensure E15 sales are not interrupted, NCGA urges EPA to complete this rulemaking by June 1, as well as keep the complex RIN market reform proposal from weighing down the E15 rule,” Ross said.

Growth Energy Backs E15 Year-Round Proposal at EPA Hearing

Today, Growth Energy CEO Emily Skor testified at the U.S. Environmental Protection Agency’s (EPA) hearing on the proposed rule to implement year-round sales of E15, a fuel blended with 15 percent ethanol. Skor spoke alongside farmers, retailers, and ethanol producers in support of this proposal, pressing EPA to finalize the rule before the June 1 deadline.

In her testimony, Skor emphasized the economic, engine performance, and environmental benefits of E15: “For motorists, the value proposition of E15 is clear. Drivers typically save up to 10 cents per gallon, while E15’s superior octane rating provides better engine performance. The value to our planet is equally compelling. E15 is a cleaner fuel that reduces evaporative emissions and greenhouse gas emissions. It replaces toxic fuel additives associated with cancer, asthma, and smog.”

And stressed how allowing E15 sales year-round will be the shot in the arm rural America needs:

“Eliminating this barrier promises to unlock an estimated 1.3 billion gallons of new annual ethanol demand. Over time, that added demand could grow to seven billion gallons, lending an economic lifeline to rural families.... Across the heartland, more than 200 biofuels plants support their communities, and these plants are under incredible strain. Many have already shut their doors or idled production in recent months. The recent flooding across the Midwest has only exacerbated these tough times, not to mention the 2.6 billion gallons lost to small refinery exemptions.

“With year-round E15, EPA has the opportunity to give American farmers and producers the ability to grow greater demand and expand market access for their homegrown fuel.”

The proposed rule would lift a nearly thirty-year-old limitation on E15, which restricts sales between June 1 and September 15. Today’s hearing is part of the public comment period of the rulemaking process, which ends on April 29. EPA has committed to completing the rulemaking process by June 1, 2019.

RFA Strongly Supports, Urges Quick Action on EPA Proposal to Allow Year-Round E15

In testimony delivered at a public hearing today in Ypsilanti, Mich., RFA President and CEO Geoff Cooper urged the agency to finalize the Modifications to Fuel Regulations to Provide Flexibility for E15 proposal ahead of the summer driving season.

In remarks to EPA officials, Cooper said, “We strongly support EPA’s proposal allowing E15 to take advantage of the 1-psi Reid Vapor Pressure (RVP) waiver that currently applies to E10 during the summer months….Extending the 1-psi RVP waiver to E15 during the summer volatility control season will open the marketplace to a fuel that provides consumers higher octane, lower cost, and reduced tailpipe emissions. We firmly endorse EPA’s proposal to interpret section 211(h)(4) of the Clean Air Act as being applicable to ethanol blends containing at least 10 percent ethanol, including E15, and we believe EPA’s justification for this interpretation is well supported by the statutory text and Congressional intent.”

Cooper further commented on E15 made at blender pumps, stating, “RFA encourages EPA to consider a more flexible approach to regulation of E15 made at blender pumps. A majority of the retail dispensers selling E15 today are, in fact, blender pumps that mix E85 and E10 together to make the finished fuel. Under your proposal, E15 made in this manner would not qualify for the 1-psi RVP waiver, even if the finished fuel met applicable sulfur and benzene standards and had volatility of 10.0 psi or less. This seems unreasonable, especially because E15 made from E85 and E10 via a blender pump typically contains just 1 percent natural gasoline.”

In addition, Cooper testified to the RIN (Renewable Identification Number) Reform portion of the proposal, saying “RFA generally opposes any changes that would reduce RFS compliance flexibility, diminish liquidity in the RIN market, give certain parties in the marketplace unfairly advantaged positions, add unnecessary complexity, increase administrative burdens, or impugn the RIN market’s ability to incentivize expansion of renewable fuel consumption. RFA does not believe any of the four main options proposed represent an improvement or enhancement of the current RIN program.”

Cooper further discussed the issue of Small Refinery Exemptions (SREs), noting “while RFS small refinery exemptions are not the explicit subject of this rulemaking or today’s hearing, we feel compelled to remind EPA that continued abuse of the SRE program would significantly undermine the ethanol market expansion intended to result from finally allowing year-round sales of E15.”

In closing, he stated, “We continue to believe it is very important that the Agency sever the RVP and RIN reform provisions into two rulemaking efforts in the event it appears from the comments submitted that the RIN reform provisions might jeopardize or complicate promulgation of the RVP measures before May 31.”

NBB Asks EPA to Reform Small Refinery Exemptions at Public Hearing

Today, representatives from the National Biodiesel Board (NBB) and its member companies testified at the Environmental Protection Agency’s (EPA) public hearing on the proposed Modifications to Fuel Regulations to Provide Flexibility for E15 and to Elements of the Renewable Identification Number (RIN) Compliance System. NBB asked the agency not to adopt the proposed changes to the RIN system as it finalizes the E15 rule.

“EPA must change its practice of encouraging retroactive small refinery exemption petitions,” Kurt Kovarik, NBB’s Vice President of Federal Affairs, testified. “We ask that the agency use this opportunity to instead address the timing of small refinery exemption petitions. If EPA finds that it can easily propose a quarterly compliance deadline in the RIN reform proposed rule, the agency should feel just as comfortable applying a similar reasonable administrative requirement that small refineries submit petitions before the end of the compliance year.”

NBB Chairman Kent Engelbrecht also testified, stating, “We appreciate EPA taking claims of RIN market manipulation seriously. But because the agency has yet to see data-based evidence of such behavior, we recommend that EPA not finalize the RIN reform portion of the proposed rule.”

Roy Strom, President & CEO of W2Fuel, LLC, an NBB member, stated at the hearing, “To succeed, the biodiesel industry needs signals that allow us to forecast market demand. While the RVO should be the forecast, the current practice of granting retroactive small refinery exemptions undermines that signal.”

Chris Peterson, President of HERO BX, testifying on behalf of NBB, said, “Unfortunately, EPA has not provided any evidence of RIN market manipulation to warrant any of its proposed reforms. The reforms themselves could further lead to market uncertainty and financial losses.”

David Cobb, NBB Director of Federal Affairs, added, “EPA acknowledges within its proposal that there is no evidence of RIN market manipulation to date. Rather than solve a problem, the proposed RIN system changes could potentially disrupt the RIN market and even undermine the RFS.”

On Thursday, March 28, EPA granted a 35th small refinery exemption for 2017, upping the total volume of exempted gasoline and diesel for that year to 17.05 billion gallons. The exemptions have destroyed demand for more than 360 million gallons of biomass-based diesel over the past 12 months.

ACE leadership testifies on EPA’s proposed RVP/RIN rule

American Coalition for Ethanol (ACE) Senior Vice President and Market Development Director Ron Lamberty testified today during the public hearing in Ypsilanti, Michigan, on the Environmental Protection Agency’s (EPA) proposed rule “Modifications to Fuel Regulations to Provide Flexibility for E15; Modifications to RFS RIN Market Regulations.”

Lamberty’s testimony highlights points which will be detailed in ACE’s written comments to the proposed rule. The points include: (1) supporting EPA’s effort to allow the 1-psi Reid vapor pressure (RVP) waiver to apply to E15 today and accommodate for a higher octane higher ethanol blend if one were approved in the future; (2) finalizing a legally-defensible rule in time for fuel retailers to sell the fuel by June 1; (3) welcoming EPA’s analysis that E15 would be held to the same gasoline volatility standards as E10 and have substantially the same level of emissions performance as E10; (4) urging EPA to cast away the proposed changes to RINs that would undermine ethanol demand and negate the upside benefit of E15 year-round; and (5) emphasizing the need for proper implementation of the Renewable Fuel Standard (RFS) Small Refinery Exemption (SRE) program.

In his testimony to EPA, Lamberty said, “ACE supports EPA’s effort to enact a legally-defensible rule providing RVP relief to ethanol blends 10 percent and higher, and to do so in time for E15 retailers to avoid the pointless stop-and-start dance they have been forced to perform for the previous seven summer driving seasons. The unnecessary changes in product availability and labeling currently required each June and September – changes which prevent stations from offering a more environmentally friendly, higher octane, lower cost fuel, during the busiest time of the year - have been a major roadblock preventing gas station and convenience store owners and operators from offering E15. The fact thousands of other retailers are willing to jump through EPA’s hoops each spring and fall is testament to how valuable E15 is to those businesses and their customers.”

On EPA’s RIN Reform portion of the proposal, Lamberty noted ACE continues to encourage EPA to separate these unrelated matters and stated, “the proposed changes to blending and RIN trading proposed in this rule would create new challenges for retailers and blenders, removing incentives for those who have invested in blending infrastructure and turning control of the RFS back to those who have refused to take action to comply with the rule over almost a decade and a half since the RFS became law.”

NMPF Thanks Congressional Agriculture Leaders for Urging Dairy-Program Implementation

The National Milk Producers Federation today thanked key House and Senate dairy leaders for adding bipartisan momentum to implementing new, greatly needed dairy programs, a top priority for the U.S. Department of Agriculture.

The letters from the House and Senate to Agriculture Secretary Sonny Perdue urge the department to implement dairy-related provisions of the Farm Bill passed in 2018 as swiftly as possible. House Agriculture Committee Chairman Collin Peterson (D-MN) and senior committee member Representative Glenn ‘GT’ Thompson (R-PA) led the House effort, and Senate Agriculture Committee Ranking Member Debbie Stabenow (D-MI) and Senator Roy Blunt (R-MO) led in the Senate. As noted in the letters, the new Dairy Margin Coverage (DMC) program and other improvements in the new farm bill will provide critical help to dairy farmers this year.

The letters, signed by 77 House members and 38 Senators from both parties, also urge active USDA engagement with farmers on multiple levels, including mailings, phone calls and local meetings, as well as collaboration with stakeholders including state officials, cooperatives, producer groups and institutions of higher education.

“We commend Chairman Peterson, Rep. Thompson, Ranking Member Stabenow, Senator Blunt, and their numerous colleagues for drawing attention to the difficulties dairy farmers are enduring,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “Implementing dairy programs in a fast and farmer-friendly manner is important to NMPF members. We applaud Secretary Perdue for his efforts to commit to a timeline that gives farmers some certainty for financial planning. We need to ensure that outreach is broad and that farm-specific issues that arise during implementation are addressed with flexibility.”

“We look forward to working with USDA to continue to best serve our hard-working, economically stressed producers, and we support the congressional support of this process,” Mulhern said. 

Cargill reports fiscal 2019 third-quarter results

Cargill today reported results for the fiscal 2019 third quarter and first nine months ended Feb. 28, 2019. Key measures include:
-    Adjusted operating earnings were $604 million, up 8 percent from the $559 million earned last year. This brought earnings for the first nine months to $2.34 billion, a 2 percent decrease from the prior year.
-    Net earnings on a U.S. GAAP basis for the quarter were $566 million, a 14 percent increase from $495 million in the year-ago period. For the nine-month period, net earnings declined 3 percent to $2.33 billion.
-    Third-quarter revenues decreased 4 percent to $26.9 billion, bringing the year-to-date figure to $83.5 billion.

“Disruptions and uncertainty in the global business environment continued to present challenges during the quarter, but our teams captured greater efficiencies across the company,” said Dave MacLennan, Cargill’s chairman and chief executive officer. “We remain focused on our growth objectives. To achieve them, we are innovating what matters for our customers so they can win with consumers in local markets.”

Segment results

Adjusted operating earnings across Cargill’s four business segments were below the year-ago level. The difference was offset by reduced spending among corporate functions and other cost reductions.

Animal Nutrition & Protein was the largest contributor to Cargill’s adjusted operating earnings. Within the segment, earnings in North American protein exceeded the year-ago period, boosted by continued strong domestic and export demand for beef as well as consumer demand for egg products. Higher production costs at Cargill’s poultry processing joint ventures in the Philippines and U.K. contributed to a decline in global poultry results. Two recently acquired value-added chicken processors – Campollo in Colombia and Konspol in Poland – both got off to a good start as part of Cargill. Increased sales volumes for salmon feeds in the North Sea region and functional feeds in North America improved earnings in aqua nutrition, but animal nutrition results in total trailed the prior year due in part to the outbreak of African swine fever in China and other countries, as well as unfavorable dairy economics in the U.S.

Food Ingredients & Applications delivered mixed results across the segment. Starches and sweeteners earnings declined on historically low ethanol prices in North America, and higher energy and raw material costs in Europe. Lower sales volume and higher operating costs in North America trimmed otherwise strong cocoa and chocolate performance in other regions. Edible oils pulled ahead of last year on good positioning and operating efficiencies. In North America, wintry weather slowed bioindustrial sales to the road construction industry; at the same time, icy and snowy road conditions drove demand for deicing products. Sales of salts for food and water quality applications also contributed to improved salt results.

In early March, Cargill announced its intent to acquire Smet, a Belgium-based supplier of chocolate and chocolate decorations. The purchase aligns with Cargill’s intent to accelerate growth in specialty ingredients, as Smet would broaden product offerings and services to artisan, chocolatier and foodservice customers. Subject to information and/or consultation procedures with the appropriate employee representative bodies, the transaction is expected to close in the first half of calendar 2019.

Earnings in Origination & Processing reflected a challenging environment with ongoing trade tensions and other supply chain disruptions. In North America, soy and canola crush operations ran at high capacity, but the near absence of the Chinese market for plentiful U.S. soybean stocks reduced profitability. The trade turbulence also negatively affected soybean crush operations in China, as did lower demand for soybean meal for feed following the culling of hogs to control the spread of African swine fever. The segment’s European and South American operations both posted higher profits over the prior year, with soybean and soft seed processing leading the way in Europe, and corn and soybean origination improving in Brazil.

Announced last quarter, Cargill completed the formation of Grainbridge with Archer Daniels Midland. The technology joint venture will begin developing a suite of digital tools to give North American farmers market data and information on their grain marketing activities in a single platform at no cost to them.

Earnings in the Industrial & Financial Services segment were negatively affected by the industrywide impact of a mining disaster in Brazil in January that required the mine owner to cut iron ore production and exports to China. The incident caused iron ore futures prices in China to rise sharply, and Capesize vessel freight rates to fall significantly. Ocean shipping rates began to strengthen by quarter end, but concerns about a slowdown in global growth continued to weigh on markets. Elsewhere in the segment, the risk management business, which develops diversified risk management strategies for a wide range of customers, put up a strong quarter with balanced performance across agriculture, energy, metals and other product lines.

Thursday, March 28, 2019

Thursday March 28 Ag News


Nebraska inventory of all hogs and pigs on March 1, 2019, was 3.55 million head, according to the USDA's National Agricultural Statistics Service. This was up 3 percent from March 1, 2018, and up 1 percent from December 1, 2018.

Breeding hog inventory, at 450,000 head, was up 7 percent from March 1, 2018, and up 2 percent from last quarter. Market hog inventory, at 3.10 million head, was up 2 percent from last year, and up 1 percent from last quarter.

The December 2018 - February 2019 Nebraska pig crop, at 2.14 million head, was up 1 percent from 2018. Sows farrowed during the period totaled 185,000 head, up 3 percent from last year. The average pigs saved per litter was 11.55 for the December - February period, compared to 11.70 last year.

Nebraska hog producers intend to farrow 195,000 sows during the March - May 2019 quarter, up 3 percent from the actual farrowings during the same period a year ago. Intended farrowings for June - August 2019 are 200,000 sows, up 8 percent from the actual farrowings during the same period a year ago.

Iowa Hog Inventory Up 4 Percent

On March 1, 2019, there were 23.5 million hogs and pigs on Iowa farms, according to the latest USDA, National Agricultural Statistics Service – Hogs and Pigs report. The March 1 inventory is up 4 percent from the previous year.

The December-February 2019 quarterly pig crop was 5.94 million head, down 5 percent from the previous quarter and 2 percent below last year. A total of 530,000 sows farrowed during this quarter. The average pigs saved per litter was 11.20, equal to last quarter.

As of March 1, producers planned to farrow 530,000 sows and gilts in the March-May 2019 quarter and 560,000 head during the June- August 2019 quarter.

United States Hog Inventory Up 2 Percent

United States inventory of all hogs and pigs on March 1, 2019 was 74.3 million head. This was up 2 percent fromMarch 1, 2018, but down slightly from December 1, 2018. 

Breeding inventory, at 6.35 million head, was up 2 percent from last year, and up slightly from the previous quarter.  Market hog inventory, at 67.9 million head, was up 2 percent from last year, but down slightly from last quarter.

The December-February 2019 pig crop, at 33.0 million head, was up 3 percent from 2018. Sows farrowing during this period totaled 3.08 million head, up 2 percent from 2018. The sows farrowed during this quarter represented 49 percent of the breeding herd. The average pigs saved per litter was a record high of 10.70 for the December-February period, compared to 10.58 last year.

United States hog producers intend to have 3.12 million sows farrow during the March-May 2019 quarter, up 1 percent from the actual farrowings during the same period in 2018, and up 3 percent from 2017. Intended farrowings for June-August 2019, at 3.19 million sows, are down slightly from 2018, but up 3 percent from 2017.

The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 47 percent of the total United States hog inventory, unchanged from the previous year.

Should Leases be Adjusted for Flood Damaged Ground?

Allan Vyhnalek, NE Extension Educator

Where there is significant damage from flooding to cropland, should the rental rate be adjusted for 2019? The answer lies in the characteristics of the individual situation. This article provides guidance on adjusting rental rates for flood-damaged land with different lease characteristics.

How bad is the damage and who is going to fix it?

Flood damage can be categorized into two distinct types. One is the ‘hard’ work and the other is the ‘heavy’ work:

The ‘hard’ work will probably not be avoided. This usually includes quite a bit of hand labor and light work with equipment to remove branches, corn stalks, trash debris and other obstacles deposited on the field.

The ‘heavy’ work may not need to be done at all. This work includes heavy equipment like bulldozers, scrapers or graders to take care of major problems. It might include moving topsoil, removal of sandbars, and fixing holes, gullies, and ruts from the flooding.

In both cases, the party primarily responsible for completing this work is the landlord. The landlord bears the responsibility for providing the tenant with the land ready to farm. Desiring a positive long-term landlord/tenant relationship and knowing the work needs to be done in a timely fashion, most tenants are probably going to provide most if not all, of the ‘hard’ work described above. When that happens, is it appropriate for the landlord to acknowledge that effort? Most would say yes.

Should rental rates be adjusted?

Crop Share
If the land lease arrangement is a conventional crop share, the rental rate may not need to be adjusted. Since the crop share lease arrangement shares production risk between the landlord and tenant, if the production varies, the amount received from a share varies based on production. Crop insurance policies contain preventative plant provisions which could lead to an insurance payment, even though nothing was planted. This will only apply to those with an insurance policy and payment size, if any, depends upon the rules contained in the preventative plant provisions. We encourage those with crop insurance policies to contact their agent about preventative planting rules. 

Cash Rent
For cash rents, is it appropriate for the landlord to receive a full cash rent payment for 2019, if the land has flood damage? Due to the language in the lease contract, full payment will likely be expected. However, is that equitable to both parties? Good landlord and tenant communications will be key to deciding equitable payment for 2019. Begin that conversation now instead of waiting until the end of the production year. Waiting will likely result in a hardship with at least one of the parties. The language contained in the lease needs to be examined. If the lease does not specifically address weather-related events prior to planting, the amount paid might vary. Under contractual law, if an event renders the property unusable for the entire growing season, the tenant may have a case for vacating the premise and not making any lease payments for 2019. Seeking release from a property under these terms may have a devastating effect on the relationship between the tenant and the landlord (even the neighborhood) in the future.

One suggestion for adjusting cash rents in 2019 is to look at some way to adjust cash rent based on actual productivity. Another possibility is to use some measure of total revenue on a per acre basis. Setting up some type of flexible cash rent that takes into account the date of planting, damage to topsoil, sand deposits, and other aspects that might affect yields. Check with your local Agricultural Economics Extension Educator for ideas to accomplish this.

Do you have crop insurance?

The other issue with cash rental rates relates to the holder of the crop insurance policy, which is the tenant. The tenant may consider assisting the landlord in the ‘hard’ and/or ‘heavy’ work by contributing preventative planting payments to cleaning up flood damaged farmland.

For crop share rents, both the landlord and tenant could have crop insurance, which will likely include a prevented planting coverage.  For either type of rent, have good communications with your insurance agent. 

In addition, Good communications between the landlord and tenant on issues like this will go a long way towards an amicable resolution.

Also be sure to visit with the Farm Service Agency to understand any implications on changes to the crop lease agreement.

For government help, be sure to document

There will be situations where the cost of doing both the ‘heavy’ and the ‘hard’ work can be documented and submitted to Farm Service Agency for Emergency Conservation Program payments. The key point is that documentation should include pictures (before and after), tracking equipment used, supplies, and labor.

If you are modifying your rental agreement for 2019, get it in writing. Stress may be high, you will want to make sure both parties are fully aware of what they are agreeing to. In summary, 2019 may be the year that both parties need to share the pain of the March flooding. Good communications between landlord and tenant is probably the only sure way that both parties are satisfied with the results of the lease.

If you would like to visit about this issue, the team of Extension Educators working in Agricultural Economics can help:
Jim Jansen, Northeast District, 402-261-7572;
Allan Vyhnalek, Department of Agricultural Economics, 402-472-1771;

Questions Frequently Asked about Prevented Planting

Recent flooding has forced many crop producers to reexamine their timeline for planting this spring. Planting a crop early provides the best chance for optimum yields, but what happens when tillage and planting are not able to be accomplished as early as desired?

Steve Johnson, farm management specialist with Iowa State University Extension and Outreach, has compiled a list of frequently asked questions regarding prevented planting and the options farmers have.

When is prevented planting available?

Prevented planting must be due to an insured cause of loss that is general in the surrounding area and that prevents other producers from planting acreage with similar characteristics. Failure to plant when other producers in the area were planting will result in denial of the prevented planting claim.

There’s also a 20/20 Rule – a minimum of 20 acres or 20 percent of the unit must be affected. Total acres of planted and prevented planted cannot exceed the total cropland acres. Prevented planting claims must be filed with your crop insurance agent by June 28 for corn and July 13 for soybeans. Prevented planting acres must be reported on the FSA Form 578 acreage report. That deadline to file that form in Iowa is July 15, 2019.

When is prevented planting not available?

On ground that is insured through a New Breaking Written Agreement; Conservation Program Reserve land that is in its first year out of CRP; on ground where a pasture or forage crop is in place during the time of planting; when other producers in the area are able to plant; and on county-based crop insurance area policies such as AYP and ARPI.

How much do I get paid for prevented planting?

55 percent of the initial revenue guarantee on corn and 60 percent on soybeans.
    An example payment for corn would look like the following: 190 bushels APH x 80% x $4.00/bu = $608 initial revenue guarantee x 55% = $334.40/acre PP payment.
    For soybeans, an example is: 55 bushels APH x 80% x $9.54/bu = $419.76 initial revenue guarantee x 60% = $251.86/acre PP payment.
    Note that payments for prevented planting use the projected price (new crop futures price average in February).

How are eligible acres for prevented planting determined?

The insurance company considers each of the insured’s crops in each county. They look at the maximum number of acres reported for insurance and certified in any of the four most recent crop years. The acres must have been planted in one of the last three crop years.
What happens if you are prevented from planting and there are not enough eligible acres for the crop being claimed?

When the insured runs out of acreage eligibility for one crop, the remaining prevented planting acres will be “rolled” to another crop, such as corn to soybeans.

What happens to my APH – actual production history – if I take prevented planting?

The insured farmer who receives prevented planting on a crop does not have to report the actual yield for the year. Generally, prevented planting will not impact the APH yield in future years, unless a second crop is planted on prevented planting acres.

What happens if the first crop is prevented planting, but the second crop is planted?

If the second crop is planted, it MUST be insured if there was insurance for that crop elected on or before March 15, 2019. The second crop must have been planted AFTER June 25 for corn and July 10 for soybeans. If the insured farmer plants a second crop they will still receive 35 percent of the indemnity for the prevented planting crop and pay only 35 percent of the premium.

Planting a second crop on prevented planting ground affects the following year’s APH:
    First crop – you receive 60 percent of the approved yield (190 bu/A APH X 60% = 114 bu/A).
    Second crop – actual yields are used for APH.

What will crop insurance adjusters need to do for prevented planting claims?

Visually inspect all prevented planting acres to determine:
    Acres are within 5 percent of what was on the acreage report.
    Whether the acres are left idle, or whether a cover crop or second crop has been planted.
    What the cause of loss was, and if it is general to the area.
    Determine eligible acres.
    Roll acres to other crops if insured is short of eligible acres for reported prevented planting crop.

What are the deadlines for filing prevented planting in Iowa?

These dates vary by state, but tend to be three days after the last day of the late planting period.
    In Iowa, the deadline for filing prevented planting with your crop insurance agent is June 28 for corn and July 13 for soybeans.
    Acreage reporting deadline is July 15.
    Prevented planting acres listed on your acreage report (FSA Form 578) should match the information provided to your crop insurance agent in order to qualify for a full indemnity payment.
    Work with your crop insurance agent well in advance of these dates regarding a prevented planting claim and whether a cover crop or a second crop will be planted.

If I have to leave some of my acres unplanted (prevented planting), will they still count toward my eligibility for enterprise units?

Only planted acres are considered when determining eligibility for enterprise units. (To qualify for enterprise units on crop insurance policy, at least the smaller of 20 acres or 20 percent of planted acres must be in two or more different township sections.) For example, a farm with 200 acres each in two sections would normally qualify for enterprise units. However, if fewer than 20 acres are planted in one of the sections, the farm would no longer qualify. Possible increases in crop insurance premiums due to a change in unit designation should be considered when deciding whether or not to file a prevented planting claim on some acres.

If I take prevented planting on some of my fields and plant a cover crop, when can I harvest or graze the cover crop?

If you plant any kind of cover crop and expect to receive a crop insurance indemnity payment for prevented planting, you cannot harvest or graze those acres until after Nov. 1.

More details can be found in the ISU Extension and Outreach Ag Decision Maker publication “Delayed and Prevented Planting Provisions.” An electronic decision spreadsheet is also available to help analyze alternative actions. Producers should communicate with their crop insurance agent before making decisions about replanting or abandoning acres.

Husker researchers develop livestock-monitoring technology

Livestock producers face a recurring challenge: watching animal behavior for signs of illness or injury.

An interdisciplinary team from the University of Nebraska-Lincoln has developed precision technology to help producers continuously monitor animals and use the resulting data to improve animal well-being.

The team includes Nebraska electrical and computer engineers Lance C. Pérez, Eric Psota and Mateusz Mittek, and animal scientists Ty Schmidt and Benny Mote, who developed the technology system using video footage of pigs.

The system processes video footage from livestock facilities — day and night — and applies machine learning, which uses statistical algorithms to help computer systems improve without being explicitly programmed. It identifies individual pigs and provides data about their daily activities, such as eating, drinking and movement.

Based on this data, the system can also estimate how much each pig weighs and how fast it is growing.

“Our system provides a pattern of typical behavior,” said Psota, research assistant professor of electrical and computer engineering. “When an animal deviates from that pattern, then it may be an indicator that something’s wrong. It makes it easier to spot problems before they get too big to fix.”

The team created their system using deep learning networks, a form of machine learning with millions of coefficients and parameters. To identify pigs from all angles, the networks processed images large and small, rotated, skewed and otherwise transformed. The team uses ear tags to help with identification but aims to rely on unique physical characteristics such as ear shape, saving producers the added work of tagging.

Although the system has been developed to identify pigs, its algorithms can be used for other livestock, such as cattle, horses, goats and sheep.

“We want to make a tool that is available to the livestock producers,” said Schmidt, associate professor of animal science. “In a competitive agricultural market with rising costs, producers are looking for solutions that streamline operations while enhancing the health and well-being of their animals.”

The team is pursuing further development with the help of NUtech Ventures, the university’s technology commercialization affiliate. NUtech has patented the technology and is exploring industry investment.

“NUtech provides a valuable service and opens us up to conversations with people outside the university,” Schmidt said. “We’re now looking for industry collaboration to help us advance this system.”

Detecting illness, deciphering traits

The team recently received $675,000 from the National Association of Pork Producers to fund two studies. In collaboration with Kansas State University, the first study will explore the technology’s ability to predict illness. The team plans to collect data from both healthy and immune-compromised pigs, training the system to distinguish early symptoms.

The second study will explore the lifespan of sows — female pigs of reproductive age — and traits that may be associated with longevity. The Nebraska team’s technology will track sows over time and identify changes in movement, gait patterns and physical activity — data that may yield links between genetic background and longevity. It’s a connection that hasn’t been measured because there hasn’t previously been technology to do it, Schmidt said.

“Could we make more informed management decisions — identifying optimal genetic lines that are healthier, more efficient or less aggressive?” Schmidt said. “Can we identify a sick pig, days ahead of when symptoms are visible to the producer? In both of these studies, we’re looking to push the boundaries of what we’ve already created.”

ICGA Members Take Their Priorities to the State Capitol

Nearly 100 Iowa Corn Growers Association® (ICGA) members filled the State Capitol rotunda yesterday for the “Iowa Corn Day on the Hill” lobbying event. This delegation included ICGA Board, county leaders, grassroots members and student FFA members from across the state. Their lobbying efforts focused on continued support for Iowa’s Renewable Fuels Infrastructure Program, support of Iowa State University through both continued funding for the Veterinary Diagnostic Lab as well as support for the new request for biosciences, and last protecting agriculture in comprehensive tax reform. In addition, corn farmers took time to thank the state lawmakers who helped pass funding of the Iowa Nutrient Reduction Strategy with SF 512 and increasing state coupling of the federal section 179 expensing provision.

“Our ‘Iowa Corn Day on the Hill’ event facilitates one-on-one interactions with state legislators where members can discuss and promote ICGA policy priorities and issues important to Iowa agriculture,” stated Iowa Corn Growers Association President Curt Mether, a farmer from Logan. “The dedication and engagement of our members allow ICGA to have a strong, unified voice at the State Capitol.”

ICGA's “Day of the Hill” efforts focused on the organization’s top state legislative priorities for this session, including:
    Conservation/Water Quality – Maintain legislative funding stream for Iowa Nutrient Reduction Strategy
    Ethanol: Continue funding for renewable infrastructure cost-share program (RFIP)
    Livestock: Support existing regulatory framework for the livestock industry
    Research: Ag Extension and Diagnostic Lab funding
    Taxes: Protect critical tax credits (Section 179 and biofuels)

“Our focus is to help Iowa’s struggling farm economy, and at the top of our list is Section 179,” explained Mether. “We also want thank our legislators for passing Section 179 to the federal provision allowing farmers and small businesses to expense and depreciate capital expenses on their tax returns, but they need to hold firm to allow it to fulfill full coupling in year three.”

If you missed this Day on the Hill event, we encourage you to contact your legislators by other means, including by participating in calls to action or attending local townhalls. To see ICGA’s full list of state and federal priorities for 2019, visit

Corn Farmers Disappointed with Latest Water Quality Lawsuit

Two environmental groups, Iowa Citizens for Community Improvement and Food & Water Watch, filed a lawsuit yesterday suing the state of Iowa claiming the state has violated its obligation to protect the Raccoon River for the use and benefits of Iowans . This lawsuit comes as a disappointment to Iowa farmers as it will be costly and cause scarce resources to be reallocated from current water quality projects without any guarantee of improving our waters.

“Iowa farmers are aware of the role we play in our state’s quality of life, this includes the water we share. By implementing Iowa’s nutrient reduction strategy, we embrace the best science and rely on years of experience to collaborate in results that better our water,” stated Iowa Corn Growers Association® President Curt Mether, a farmer from Logan. “Farmers will continue to work together to achieve the best long-term solutions for our soil and water while feeding the world.”

“At a time farmers are struggling financially and also from historic flooding, this lawsuit is a low blow to farmers” continued Mether. “It will divert resources from implementing conservation practices and helping our farmers recover from the latest natural disaster.”

The Iowa Corn Growers Association has partnered with farmers and agricultural stakeholder in projects targeted at improving water quality for all Iowans such as the National Corn Growers Association’s Soil Health Partnership and Iowa Agriculture Water Alliance.

Red Meat Export Volume Fairly Steady in January; Pork Value Still Reflects Tariff Impact

January exports of U.S. beef and pork were slightly below last year’s volume levels while export value posted mixed results, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports slipped 1 percent year-over-year to 104,766 metric tons (mt), but value still increased 3 percent to $642.3 million. Export value per head of fed slaughter pulled back from the red-hot pace of 2018, averaging $284.86, down 3 percent from a year ago. January exports accounted for 12.2 percent of total beef production and 9.7 percent for muscle cuts only, down from 12.4 percent and 10.1 percent, respectively, in January 2018.

January pork exports were also down 1 percent from a year ago at 201,835 mt, with value dropping 9 percent to $494.1 million. Export value averaged $44.75 per head slaughtered, down 12 percent year-over-year. Exports accounted for 23.6 percent of total January pork production, down from 24.7 percent a year ago. For muscle cuts only the ratio was 20.3 percent, down from 21.5 percent.

Results for both beef and pork were bolstered by stronger variety meat volumes. Beef variety meat exports totaled 26,630 in January, up 7 percent from a year ago, valued at $81.8 million (up 19 percent). This was fueled by strong performances in Japan, the ASEAN region and Africa. Pork variety meat exports climbed 5 percent year-over-year to 41,143 mt, led by increases in Mexico, Japan, Central and South America and Taiwan. But value was still down 11 percent to $81 million, because exports to China, the leading market for U.S. pork variety meat, remain subject to China’s 50 percent retaliatory duties.

Japan, Korea set strong early pace for 2019 beef exports

January beef exports to leading market Japan increased 8 percent year-over-year to 25,925 mt, valued at $167 million (up 12 percent). Variety meat exports to Japan (mainly tongues) were especially strong, soaring by 36 percent in both volume (4,645 mt) and value ($31.4 million). January was the first full month in which competitors of U.S. beef received tariff relief in Japan under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the import duty rate dropping from 38.5 to 27.5 percent on Dec. 30, 2018. This gap will widen further on April 1, when the rate for CPTPP countries drops to 26.6 percent.

“It’s great to see Japan’s demand for U.S. beef increase in January despite these tariff rate changes for our major competitors,” noted Dan Halstrom, USMEF president and CEO. “But this disadvantage will become more and more pronounced over time, so negotiations toward a U.S.-Japan trade agreement cannot come soon enough. The playing field needs to be leveled as quickly as possible so that the U.S. industry can continue to capitalize on booming meat demand in Japan.”

Following a record-shattering year, beef exports to South Korea increased 4 percent in January to 17,900 mt, with value up 10 percent to $134.3 million. U.S. beef enjoys a tariff rate advantage under the Korea-U.S. Free Trade Agreement (KORUS), with the import duty rate declining from 40 to 18.7 percent since KORUS was implemented in 2012 (the rates for Australian and Canadian beef are 24 and 26.6 percent, respectively). U.S. beef is benefiting from several new trends in Korea, including mid-priced steak restaurants (also underway in Japan), inclusion of beef cuts such as chuckeye roll and short plate in meal kits sold at retail and through e-commerce, and demand for a wider range of U.S. beef cuts, such as brisket point, in Korean barbecue establishments.

Other January highlights for U.S. beef include:

-    Export volume to Mexico was steady with last year at 21,194, but value climbed 14 percent to $101.7 million. The results for beef muscle cuts were especially strong, increasing 16 percent in volume (12,532 mt) and 21 percent in value ($78.2 million).
-    Led by Indonesia and the Philippines, exports to the ASEAN region jumped 49 percent from a year ago in volume (4,644 mt) and 31 percent in value ($20.7 million). Variety meat exports more than doubled from a year ago to 1,941 mt (up 107 percent), with value up 85 percent to $3.8 million.
-    Strong growth in Costa Rica, Guatemala and Honduras drove beef exports to Central America up 39 percent to 1,508 mt, while value was up 36 percent to $8 million.
-    Exports to Taiwan were steady with last January at 4,215 mt, but value was down 12 percent to $36.8 million.
-    A slow month in Hong Kong partially offset growth in other markets, as exports fell by 36 percent in volume to 7,047 mt, while value was down 28 percent to $57.4 million.

Amid trade disputes, smaller markets step up demand for U.S. pork

Retaliatory duties continued to pressure U.S. pork exports to Mexico in January, with volume down 9 percent from a year ago to 66,293 mt. Export value absorbed an even harsher blow, dropping 28 percent to $96.1 million. While the U.S. is still Mexico’s main pork supplier, Canada’s January exports to Mexico were up 26 percent to 11,500 mt and EU exports increased 91 percent to 305 mt. Chile’s volume was steady at 690 mt.

Exports to China/Hong Kong also felt the sting of China’s retaliatory duties, dropping 16 percent from a year ago in volume (26,744 mt) and 32 percent in value ($53.2 million).

While Japan’s import duties on U.S. pork remain unchanged, CPTPP countries received tariff relief at the end of 2018 and will see another rate decrease on April 1. This likely contributed to the January decline in U.S. pork exports to Japan, which were down 6 percent from a year ago in volume (32,910 mt) and 8 percent in value ($135.2 million). Lower duty rates for European pork under the Japan-EU Economic Partnership Agreement (EPA) were implemented Feb. 1, so the EPA’s impact was not yet reflected in Japan’s January import data.

“Trade barriers in these large, mainstay markets are very unsettling for major customers of U.S. pork and are hurting the entire U.S. supply chain, so it is essential that they are addressed in a timely manner,” Halstrom explained. “On a positive note, the U.S. industry’s longstanding efforts to expand and diversify international destinations for U.S. pork have never been more important, and it is gratifying to see impressive growth in many of our emerging and developing markets.”

January highlights for U.S. pork include:

-    Led by continued record exports to Colombia and a surge in shipments to Chile, pork exports to South America increased 57 percent in volume (12,752 mt) and 61 percent in value ($31.3 million). Exports were also higher year-over-year to Ecuador and Uruguay.
-    Strong growth in Panama, Costa Rica and Guatemala moved exports to Central America 18 percent higher year-over-year in volume (7,271 mt) and 15 percent higher in value ($16.6 million).
-    Exports to the Dominican Republic remained on a roll, increasing 29 percent from a year ago in both volume (3,289 mt) and value ($7.2 million).
-    Growing exports to Canada (16,165 mt, +13 percent) indicate the U.S. is backfilling Canada’s product needs as more Canadian pork is bound for China, Japan and Mexico. Canadian pork production is not increasing, therefore Canada needs to import more U.S. pork to meet domestic demand. This situation will continue until retaliatory tariffs on U.S. pork exports to China and Mexico are removed and could intensify across other markets as China’s buying ramps up due to African swine fever.
-    Pork exports to both Australia and New Zealand were higher year-over-year in January, pushing results for Oceania up 22 percent in volume (9,272 mt) and 12 percent in value ($24.8 million).
-    Led by excellent growth in the Philippines and Singapore, exports to the ASEAN region were up 28 percent in volume (3,895 mt) and 25 percent in value ($9.9 million).
-    Strong demand in Taiwan pushed January exports to 2,561 mt (up 153 percent) valued at $4.9 million (up 70 percent). The results for pork muscle cuts were even more impressive, nearly tripling in volume (1,780 mt, up 196 percent) and climbing 149 percent in value to $3.8 million. Taiwan is importing less pork from the EU and Canada so U.S. pork is gaining market share, climbing from 9 percent in January 2018 to 19.5 percent this year.
-    Pork exports to Korea eased from the record-breaking pace of 2018 but remained strong at 18,491 mt, down 2 percent year-over-year, with value down 8 percent to $50 million.

Lamb exports trend higher in January

Muscle cut growth in the Caribbean and the United Arab Emirates, along with continued strong demand for variety meat in Mexico pushed January exports of U.S. lamb to 1,384 mt, up 87 percent from a year ago. Export value was $2.13 million, up 45 percent. For muscle cuts only, exports climbed 94 percent from a year ago in volume (244 mt) and 49 percent in value ($1.17 million).

Senators Sponsor Bill Expanding Family Farm Protections

Struggling farm families who need to consider protection from the U.S. bankruptcy code may see a little relief under a proposal being considered by a bipartisan group of senators. On Wednesday, Ron Johnson of Wisconsin and Iowa's Chuck Grassley introduced the Family Farmer Relief Act of 2019 to help family farms financially reorganize after falling on hard times.

"For a host of reasons, farm bankruptcies have increased. Current policies don't accurately reflect the increased cost of running a farm in today's day and age," Johnson said. "This legislation is designed to help keep more of Wisconsin's family farms operating by allowing them access to a streamlined path to reorganization to get through tough times."

Under current law, Chapter 12 bankruptcy removes certain costly reorganization requirements intended for large corporations. Johnson's measure raises the Chapter 12 operating debt cap to $10 million, allowing more family farmers to seek relief under the program.

Grassley says several years of low commodity prices, stringent farm lending regulations and market uncertainty have taken a toll on America's agriculture producers.

"Farm bankruptcy rates in many farming regions across the country are at their highest point in a decade," he said. "In some places in 2018, farm bankruptcies doubled from the previous year. Debts held by farmers are nearing historic levels set in the 1980s, further financially extending farm operations."

Other supporters of the bill include Sens. Amy Klobuchar and Tina Smith of Minnesota, Patrick Leahy of Vermont, Thom Tillis of North Carolina, Doug Jones of Alabama, and Joni Ernst of Iowa

Bipartisan Demand for Checkoff Reform Renewed with Filing of U.S. Senate Legislation

Common ground was found among unlikely allies again as the Opportunities for Fairness in Farming (OFF) Act was reintroduced by U.S. Senators Mike Lee (R-UT), Cory Booker (D-NJ), Rand Paul (R-KY) and Elizabeth Warren, (D-MA). The Off Act would put an end to the most egregious abuses committed by the boards and contractors of the federally mandated commodity checkoff programs.

Checkoff programs have been instrumental in the history of agricultural advertising. Famous campaigns, such as “Beef. It’s What’s for Dinner,” have been paid for with family farmers’ checkoff tax dollars. However, checkoff programs have fallen under the control of commodity trade organizations representing global agribusiness interests, and oftentimes the millions of dollars paid into checkoff programs by hard-working family farmers and ranchers end up being used to lobby for policies that harm their interests.

Farmers are struggling amidst increasing consolidation, low commodity prices, and excess supply. Net farm income is at a 19-year low. Along with recent trade disruptions and natural disasters, such as the flooding in the Midwest, the last thing farmers want or need is their tax dollars working against them.

The Off Act would prohibit lobbying trade organizations from receiving checkoff funds, however, this restriction does not apply to universities. It would rein in conflicts of interest and stop anti-competitive activities that harm other commodities and consumers. It would also force checkoff programs to publish their budgets and undergo periodic audits so that farmers and ranchers know where their hard-earned tax dollars are going.

Having filed the OFF Act in the last Congress, Senators Lee and Booker offered the legislation as an amendment to the 2018 Farm Bill. The amendment was supported by over 100 organizations and garnered the support of 38 U.S. Senators.

In November 2018, independent polling by the nation’s oldest livestock publication, Drovers, found that over half of cattle producers flatly rejected the notion that the checkoff was helpful to their farms and ranches. A November 2017 Government Accountability Office report found that the U.S. Department of Agriculture (USDA) must do more to keep checkoffs in check across commodities.

Fred Stokes, founding member of the Organization for Competitive Markets, said:
“Organization for Competitive Markets extends our gratitude to the sponsors of this legislation. The evidence is clear: commodity checkoff programs abuse the very farmers and ranchers who are mandated to pay into them. The over $850 million these programs take from farmers each year have become the cash cow for organizations that work against fair competition and market transparency. So long as checkoff funds remain hidden from accountability and in the hands of trade and lobbying groups, independent family agriculture is in peril of being wiped from the face of the countryside. It is imperative this legislation be passed and signed into law.”

Checkoff programs have had a long history of acting beyond the scope of their statutory mandate. Lax oversight by the USDA has resulted in collusive and illegal relationships between checkoff boards and lobbying organizations, both of which have repeatedly used checkoff funds to influence legislation and government action despite a broad statutory prohibition against these activities. Such advocacy efforts have an anticompetitive effect, benefiting certain producers to the detriment of others, and forcing some producers to pay into a system that actively works against them.

The major reform provisions of the OFF Act, which would end the glaring abuses of the program boards, are:

1.     Stop federally mandated checkoff dollars from being transferred to parties that seek to influence government policies or action relating to agriculture issues.

2.     Enforce the prohibition against conflicts of interest in contracting and all other decision-making operations of the checkoff program.

3.     Stop federally mandated funds from being used for anticompetitive programs or from being spent to disparage another commodity in the marketplace.

4.     Increase transparency of the individual boards’ actions by shedding light on how federal checkoff funds are spent and the purpose of their expenditures.

5.     Require audits of each program every five years to ensure their activities are in compliance with the law.

Organization for Competitive Markets is a national membership-based research and advocacy organization working for open and competitive markets and fair trade in America’s food and agricultural sectors.

U.S. Members of Congress Introduce Bipartisan Bill to Help Farmers Export to Cuba

Today, U.S. Representatives Rick Crawford (R-AR-1) and Cheri Bustos (D-IL-17) introduced the Cuba Agricultural Exports Act (H.R. 1898), legislation that would make it easier for American farmers to sell to our island neighbor by removing arbitrary restrictions on private financing for U.S. agricultural exports to Cuba.

Cuba imports nearly 80% of its food, which amounts to almost $2 billion annually, creating a huge potential export market for American farmers only 90 miles off our shores. However, U.S. financing restrictions limit the ability of U.S. producers to compete for market share. The Congressional Budget Office estimates that the proposed legislation would save U.S. taxpayers $690 million over 10 years.

“Eliminating these onerous, outdated restrictions will finally allow our farmers to claim their fair market share in Cuba, while at the same time, giving the Cuban people the quality U.S. food they desire,” said James Williams, President of Engage Cuba. “Why should Cuba turn to Vietnam and Brazil for rice and soy when Arkansas and Illinois are right next door? We need to update our policies to reflect the realities of today and allow our farmers to compete in a market 90 miles off our shores."

“The Cuba embargo has been in place for several decades, yet it has done little to weaken the oppressive socialist government of Cuba and has instead stifled American business opportunities that are within a short reach. Eliminating the cash-for-crop requirement would open up a substantial market for Arkansas farmers and open the door to future trade partnerships among our nations," said Congressman Rick Crawford (R-AR-1).

“On top of a struggling farm economy, the President’s trade war has been devastating for producers in our region,” Congresswoman Cheri Bustos (D-IL-17) said. “That’s why I’m working across the aisle on this legislation that would expand agricultural trade with Cuba – because we need to protect and open new markets for farmers and manufacturers. By providing Cubans with access to the standard credit terms offered by virtually every other nation in the world, we’ll take meaningful steps toward increasing our agricultural exports and strengthening our local economy. That’s a goal we should all be able to get behind."

U.S. producers have been allowed to export agricultural commodities to Cuba since Congress passed the Trade Sanctions Reform and Export Enhancement Act (TSRA) in 2000, but a cash-in-advance requirement prevents Cuba from purchasing U.S. food on credit. As a cash poor country, U.S. agricultural exports to Cuba have declined every year since 2009 in terms of dollar amount, market share, and in the variety of products shipped. The U.S. used to be the number one supplier of agricultural commodities to Cuba, but has since fallen behind international competitors like the European Union, Brazil, and Vietnam.

Farmers seeking to export to Cuba won some success in the 2018 farm bill. Last year, the farm bill passed with a provision that allows U.S. agricultural producers to use federal market promotion dollars for agricultural exports to Cuba. A cornerstone of Engage Cuba's legislative advocacy efforts in the last Congress, this was the first law to repeal part of the U.S. embargo on Cuba in nearly 20 years and laid the groundwork for comprehensive trade between the United States and Cuba.

The provision codifies the ability of U.S. farmers receiving U.S. Department of Agriculture (USDA) market promotion grants to direct those funds toward marketing their products in Cuba. These grants, under the Market Access Program (MAP) and Foreign Market Development (FMD) program, help U.S. farmers offset the costs of overseas marketing. An amendment to the farm bill, the provision was part of the Senate companion to the Cuba Agricultural Exports Act, introduced by Sens. Heidi Heitkamp (D-ND) and John Boozman (R-AR).

In September of 2017, a bipartisan group of over 60 agriculture associations, businesses, and elected officials across 17 states sent a letter to the leadership of the House and Senate Committees on Agriculture to urge the inclusion of both Cuba trade provisions in the final farm bill.

The U.S. Senate Appropriations Committee approved the bill as an amendment to a financial services spending bill in 2016, as well as in July 2015.

RFA Statement on EPA Issuing Yet Another Small Refinery Exemption from RFS Compliance

Today, EPA issued its 35th small refinery exemption from the 2017 Renewable Fuel Standard (RFS). RFA President and CEO Geoff Cooper had the following statement:

“If these exemption trends continue, they will fully and completely undermine the RFS at the expense of rural America and cause consumers to pay more at the pump for dirtier fuels. With dozens of ethanol plants closing or idling and U.S. ethanol consumption showing the first annual decline in 20 years, it is unfathomable that the new EPA Administrator would double down on former Administrator Pruitt’s unjustifiable abuse of the small refinery exemption provision. We hope that today's waiver marks the end of this destructive trend and hope to see a more transparent process in the weeks to come as EPA decides on the 39 pending 2018 exemption requests.”

Skor on Another Small Refinery Exemption Granted by EPA

Growth Energy CEO Emily Skor issued the following statement on the Environmental Protection Agency’s (EPA) announcement that it granted another small refinery exemption for 2017:

“New leadership at the EPA was supposed to mean a return to the president’s pro-biofuel agenda. Instead, we’re getting a man-made recession in rural America, just to boost profits for a few oil giants. There’s no way to view continued abuse of EPA wavers except as a betrayal of rural manufacturing workers and farm communities. The EPA has now destroyed 2.6 billion gallons of biofuel demand, eliminating the market for a billion bushels of U.S. grain. Farm families are already facing natural disasters, on top of lost export markets. If the EPA doesn’t act now to restore the market promised to farmers, there is little hope for a swift rural recovery. EPA must start considering denials for the record 39 exemption requests that have already arrived for 2018. If 2018 looks anything like 2017 in terms of refinery handouts, the damage to the rural economy could be irreparable.”

WTO Director-General to open Farm Foundation trade conference

The Director-General of the World Trade Organization (WTO) will open the April 30 Farm Foundation trade conference, Agricultural Trade in a Time of Uncertainty. Director-General Roberto Azevêdo will address conference attendees via video at 8:30 a.m. at the DoubleTree Hotel Crystal City, Arlington, VA.

"Given the role of the WTO in international agricultural trade, it is most appropriate that the Director-General open this conference," says Megan Provost, Farm Foundation's Vice President of Policy and Programs. "His comments will set the stage for the day's discussion of the issues and opportunities of global food and agricultural trade today."

Azevêdo's address will be followed by a panel discussion of U.S. agriculture and the WTO, including the international organization's dispute settlement process and its long-term future given the current proliferation of bilateral and regional trade agreements. Joe Glauber, Ph.D., a senior fellow at the International Food Policy Research Institute, will moderate the discussion. Panelists will include Ambassador Alan Wolff, Deputy Director-General of the World Trade Organization, Chad Bown of the Peterson Institute for International Economics, and Evan Rogerson of Nanyang Technological University.

This conference will also feature key leaders from Congress and the Administration. Sen. Rob Portman (R-Ohio) has been invited to provide perspectives on the domestic policy landscape for U.S. agricultural trade. Invited to discuss the Administration's approach to food and agricultural trade are Ted McKinney, USDA Undersecretary for Trade and Foreign Agricultural Affairs, and Gregg Doud, Chief Agricultural Negotiator in the Office of the U.S. Trade Representative.

Other topics for the day-long conference include the intricacies of free trade agreements, the impacts of trade wars and retaliatory trade measures on the farm economy, and the trade implications of today's geopolitical landscape. The conference agenda is available on the conference website.

This is the first conference hosted by Farm Foundation's Food and Agricultural Trade Resource Center. The Resource Center was created to bring clarity to trade discussions and enable productive debate and dialogue on trade policy issues.

Trade issues--from tariff escalations and other trade barriers to proposed restructurings of long-standing trade agreements--have disrupted market flows around the world. U.S. agriculture, which exports more than 20% of its production, has been particularly hard hit and the ripple effects have been seen in farm cash receipts and rural communities. The U.S. food and agriculture sector exports nearly $140 billion in commodities and value-added goods, making it one of the nation's only sectors with a trade surplus.

"Given these dynamics, a basic understanding of food and agricultural trade is critical," says Provost. "With our 86-year reputation for providing objective information, Farm Foundation established the Resource Center to provide public and private decision-makers with informational tools and analyses. A solid foundation of basic trade education, as well as more detailed analyses of larger trade issues, will support quality dialogues on agricultural trade."

CoBank Quarterly Economic Outlook – Agriculture Still Seeking Relief

U.S. agriculture will face challenges in 2019 as slowing domestic and global economic growth rates, trade talks continue and weather casts uncertainty in the short- and long-term markets. U.S. commodity markets remain focused on potential progress in U.S.-China negotiations and the ratification of USMCA agreement pending the removal of U.S. steel and aluminum tariffs. Current trade disputes and global acreage shifts for this crop year may ease some downward pressures on prices. A slowing global economy may force animal protein and dairy sectors to scale back planned production increases as the year unfolds.

The latest Quarterly Rural Economic Review from CoBank’s Knowledge Exchange Division indicates that as global and U.S. economic growth has slowed, financial conditions in agriculture have remained highly variable across commodities and regions.

“U.S. agricultural producers and markets are in for a challenging year with economic uncertainty,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “There are a few bright spots, but growth is likely to average 2 to 2.5 percent with significant volatility in quarterly growth.”

The report states that world economic growth has slowed from 3.8 percent in 2017 and 2018, and will likely average between 3 to 3.5 percent. China’s economy continues to slow to 6.6 percent—the slowest since 1990—as reduced trade flows and inability to stimulate domestic consumption hamper growth potential. Europe’s growth potentials have also declined as uncertainties over Brexit and reduced trade flows to Asia have dampened optimism.

Also noted is that economic growth in the U.S. slowed significantly in the fourth quarter to a 2.2 percent annual rate compared to the 3 to 4 percent growth in the previous six months. First quarter growth was significantly impacted by the government shutdown and ongoing trade disruptions.

CoBank quarterly economic reviews provide market outlooks for several topics and industries, including: global and U.S. economic environments, U.S. agricultural markets and rural infrastructure industries.

A recap of the report is provided below and the full quarterly U.S. rural economic review, “Agriculture Still Waiting for Relief” is available at
Grains, Oilseeds and Biofuels

As trade deals continue to be ironed out, a resolution of current trade disputes and global acreage shifts could influence U.S. producers. Sharp declines in farm income since 2014 have resulted in significant reductions in working capital of nearly 70 percent and rising levels of farm debt of nearly 24 percent. Devastating flooding in Nebraska and Iowa now threatens the livelihood of many producers and will impede agricultural transportation and processing for months.

    Corn: Domestic corn demand dipped by 2 percent despite continued growth in animal protein supplies. Ethanol remains a weak spot, but feed demand and corn exports should remain strong.
    Soybeans: The U.S.-China trade dispute is easing up with reports of a pledge from China to buy soybeans. U.S. exports continue to lag behind last year; domestic demand remains robust.
    Wheat: Domestic demand is in line with USDA expectations; wheat demand is strengthening on the export front with commitments for 2019 just ahead of last year’s levels.
    Ethanol: Ethanol producer margins have improved slightly from lows this winter with supply and demand balanced by a reduction in supply.

Farm Supply

Poor fall weather and a wet start to the year has impacted the Midwest, resulting in delayed fieldwork and decisions on seed and fertilizer. Without knowing what farmers will plant or what their fertilizer plans will be, ag retailers have an elevated risk of having too much or too little inventory of a product.

Fertilizer prices have largely declined from recent highs. Urea and DAP (diammonium phosphate) prices in New Orleans are now approximately 20 percent below highs set last fall. Potash prices remain robust on tighter supplies. Seasonal upticks in demand should increase prices this spring.
Animal Protein

Animal protein supply grew less than expected in 2018. The primary driver was a slowdown in fourth-quarter chicken production. Overall, animal protein production grew by 2.5 percent. Pork led the way with nearly 3 percent growth. Beef and chicken followed at 2.5 and just over 2 percent, respectively.

While supply isn’t expected to change from 2018 levels, domestic and international demand is uncertain. Trade negotiations with Asian markets will likely sway export opportunities. If the USMCA trade agreement is not ratified, it could also impair trade flows with these important markets.

    Pork: Trade and exports are important as domestic consumption remains between 46 and 52 pounds per person. Factors including African Swine Fever and trade negotiations will influence U.S. pork exports.
    Chicken: The U.S. chicken sector is seeing a building boom that will continue through the spring of 2020 with expected production increases of 1.5 percent in 2019, down from 2.2 percent in 2018.
    Beef: The U.S. beef sector outlook reflects a balance of supply and demand and anticipates continued production growth. U.S. exports have seen remarkable growth of 40 percent since 2015.


U.S. milk production totaled 217.5 billion pounds in 2018—a 0.9 percent increase over 2017 compared to a typical increase of 1.5 percent. Production was driven by an additional 250 pounds per cow despite 49,000 fewer cows in the national herd.

Slower growth rates in milk production translate to less excess milk being dried into powder. Cheese inventories are about 5 percent higher compared to last year despite slowed production in December. Relatively low cheese and whey prices offset somewhat higher powder and stable butter prices, resulting in farm milk prices remaining in the current range.
Specialty and Other Crops

Some other U.S. crops expect production growth in the year ahead. Rice production is expected to be up 26 percent. Cane sugar production is estimated to hit a record 4.1 million tons raw value—a 3 percent increase. However, beet sugar production is projected to fall by 7 percent.

Cold and wet weather conditions in California have delayed harvest, while Florida has capitalized on favorable conditions. Reports show promise of a good production year with an increase in orange and grapefruit production of 41 and 29 percent, respectively. Cooler temperatures and rains set California strawberry crops for a good spring harvest, although weather will limit harvest volumes and quality.

Grape crush and acreage reports are delayed due to the government shutdown and are expected in April.
Rural Infrastructure Industries

Natural gas supply is projected to outpace rising domestic and international demand resulting in an abundance that should keep prices lower than 2018. Despite high demand in the 2018/19 winter heating season, supply growth is anticipated to replenish the U.S. gas inventory.

The first quarter saw continued development of non-hydro renewable and combined cycle capacity and significant retirements of coal-fired capacity. Coal is likely to fuel less than 25 percent of the country’s power generation this year—the lowest share since 1949.

The recently passed Farm Bill provides funding for rural water opportunities—$4 billion over the next 10 years—to support efforts to protect sources of drinking water. While this investment is not enough to address the cost of modernizing the nation’s broader water infrastructure, the increased funding is likely to afford communities across rural America significant health benefits.

Fiber assets saw aggressive acquisition as significant domestic and foreign capital flowed into infrastructure funds specifically targeting fiber assets. Investors prefer fiber assets with prospects of emerging tech like 5G, augmented and virtual reality, and data centers. Rural broadband also saw attention with a focus on improving access to rural America.

IGC Raises Global Grain Production Estimate for 2019-20

The International Grains Council said Thursday that it expects rising global grain demand to outstrip an increase in production next year.

The IGC's fresh monthly estimation revealed its first forecasts for the 2019-20 season, with the body upping expected production to 2,175 million tons--up from a previous upward revision to 2,125 million tons expected in 2018-19--but forecasting a fall in expected carryover stocks to 575 million tons from the 604 million tons expected this year.

Still, that would represent a 2.4% increase in global production next season, and the IGC's expectations for this season's production was raised just 4 million tons from its February forecast of 2,121 million tons.

In its predictions for the 2019-20 production season, the IGC upped its expected wheat production by 24 million tons--or 3.3%--year on year to 759 million tons from its 2018-19 forecast of 735 million tons.

Soybean production is expected to stay flat at 359 million tons, with rice and corn expected to rise 5 million and 10 million tons on-year to 505 million tons and 1,124 million tons.

The IGC expects much of the reduction in carryover stocks to be accounted for by corn, and the body sees a 38 million-ton deficit.

Case IH Bolsters RB5 Round Baler Series Lineup With Premium HD Addition

From wet silage to dry hay to straw and stalks, the new Case IH RB565 Premium HD round baler provides producers the flexibility to bale a full range of crops. The RB565 Premium HD round baler is equipped with components to efficiently handle wet hay making in an all-purpose, multicrop baler. This new baler expands the RB5 series lineup, taking high-efficiency hay production to the next level.

“More and more producers are baling wet hay due to shorter production windows and added feed value,” said Brian Spencer, Case IH hay and forage marketing manager. “To accommodate those customers wanting to produce baleage in a 5x6 bale, we added the proven, robust design of our 4-foot silage baler to our 5-foot baler with some additional features.”
New round baler features

Building on the robust design, larger platform and improved bale-ejection system of the RB5 series, RB565 Premium HD round balers help to achieve higher bale density with the following enhancements:
•    Higher torque load on the cutout clutch
•    Larger main gearbox with heavier output shaft
•    Larger main drive chain and sprockets
•    Larger roll drive chains
•    Dual chopping rolls in the tailgate and sledge areas to prevent crop buildup
•    Neoprene-covered backwrap roll
•    Factory-installed moisture sensor option
•    Endless belts with 3-year/15,000-bale warranty

ISOBUS Class 3 technology boosts round baler productivity

The RB565 Premium HD round balers can be equipped with ISOBUS Class 3 Tractor and Baler Automation. Paired with a Puma® or Maxxum® tractor featuring a CVXDrive™ continuously variable, PowerDrive powershift or ActiveDrive 8 dual-clutch transmission, this system controls the tractor stop, bale wrap and bale-eject functions without operator input. Operators can take advantage of ISOBUS Class 3 controls to automatically stop the tractor when the target bale size is reached. From there, net wrap is automatically applied. When the wrap cycle is complete, the baler tailgate raises and lowers automatically to eject each wrapped bale. Once the completed bale is ejected, the operator can simply move the tractor shuttle lever to the forward position and go.

“When hay-making windows open, baler automation can help reduce bale cycle time, minimize operator stress and increase productivity, even with a less-experienced operator,” Spencer said. “Case IH strives to deliver equipment with the technology necessary to make the highest-quality hay.”