Friday April 26 Ag News

Ag Property Rights Bill Advance

Nebraska lawmakers gave second round approval to LB 227 this week. The bill was introduced by Sen. Dan Hughes of Venango, at the request of Nebraska Farm Bureau and other agriculture groups to boost protections for farms and ranches against nuisance law suits.

The amended version of the bill senators will consider for final passage will continue agriculture’s “first in time” protections that prevent an individual or entity from moving next to an agriculture operation and filing a nuisance suit based on the operation’s normal farming practices. The amended version further establishes a statute of limitation whereby a change in farming practices could only be considered a nuisance if the individual or entity files a nuisance lawsuit within a two-year window of claiming a nuisance situation exists.

Passage of LB 227 in one of Nebraska Farm Bureau’s top priorities for the 2019 legislative session.



Corps of Engineers Release Three Week Missouri River Forecast

The U.S. Army Corps of Engineers updated its near-term forecast for the Missouri River this week as the basin prepares for mountain snowpack to melt and collect in the system.

The three-week forecast calls for increased water output from the Missouri River water control facilities along the river. Currently, system reservoirs are below their exclusive flood control pool elevations. However, as the mountain snowpack melts, the pool elevations will increase significantly. Storing water in the exclusive flood control pools at reservoirs in the middle of the system limits flexibility for reducing flood risk from upstream or downstream rain events.

Thus, officials say they will maintain release levels higher than inflows. Gavins Point releases are forecast to remain steady at 55,000 cubic feet per second to continue evacuating runoff from the spring plains snowmelt. John Remus, chief of the Corps’ Missouri River Basin Water Management Division, says fluctuations to river stages downstream from Gavins Point are possible due to rain events occurring downstream from Gavins Point. Some areas downstream are still at flood stage and have been since last month’s bomb cyclone weather event.



Congresswoman Finkenauer Visits ICGA Vice President Jim Greif’s Farm

Congresswoman Abby Finkenauer visited Iowa Corn Growers Association® (ICGA) Vice President Jim Greif’s family farm on Wednesday for a tour and discussion about United States-Mexico-Canada Agreement (USMCA). The Congresswoman represents Iowans in U.S. Congressional District 1.

During her time at the farm, Congresswoman Finkenauer stressed the need for trade agreements that allow farmers to access markets and provide them with stability. “I want a deal figured out, and we need to get it done,” she continued, “If a deal isn’t made come May, I’m going to ask for a weekly call with Lighthizer and deliver him the facts and numbers of total losses in Iowa. We are way past time on a deal for Iowa farmers.”

As Chair of the Subcommittee on Rural Development, Agriculture, Trade and Entrepreneurship, Congresswoman Finkenauer recently brought corn, pork and soybean producers from the district to testify before members of Congress. “My number one job is to make sure Iowans have a seat at the table when decisions affecting their lives and livelihoods are being made,” said Finkenauer. “It’s important that Congress hear directly from Iowa’s farmers so they understand what’s actually happening and what the stakes are.”

 “Agriculture is a low hanging fruit,” said ICGA Vice President Jim Greif, a farmer from Monticello, “It’s comforting to hear Congresswoman Finkenauer is fighting hard for all farmers.”

 “We all want what’s best for Iowa,” said Congresswoman Finkenauer, “As Iowans, we want to be respectful, but we also aren’t going to be quiet.”

The visit concluded with Greif giving the Congresswoman a tour of his farm.



Nominations Now Open for 67th Annual Iowa Conservation Farmer of the Year

Nominations are now being sought to find the 2019 Iowa Conservation Farmer of the Year, a prestigious honor with a substantial prize; the winner receives use of a new John Deere 6E utility tractor for a year. The statewide award and regional awards, co-sponsored by the Iowa Department of Ag and Land Stewardship (IDALS) and the Iowa Farm Bureau Federation (IFBF), honor the Iowa farmers who have a proven track record of commitment to soil conservation and water quality improvements and is dedicated to continuing efforts that continuously improve the land and water.

“The 2017 Census of Agriculture found Iowa farmers planted 973,000 acres of cover crops, representing a 256 percent increase from the 2012 census,” said Iowa Secretary of Agriculture Mike Naig. “It’s great to see Iowa farmers taking on the challenge of protecting their soil and improving water quality. This award is an opportunity to highlight and recognize a farmer that goes above and beyond in those efforts and serves as a model of land stewardship in their community and across the state.”  

The award, which was launched in 1952, is designed to help raise awareness about the importance of caring for Iowa’s fertile lands and vital waterways and to acknowledge those who accept the challenge of continuously working to improve conservation.

“Leading by example is so important, because everyone has a role to play in protecting our soil and water quality. Over the years, we’ve proudly honored remarkable Iowans who have made incredible progress in conservation who also encourage others to step up to the plate,” says IFBF President Craig Hill. “Our role as farmers is to do more than grow food; we must all work towards leaving the land and watershed better for the next generation and remain focused on continued improvement.”

The nomination process is simple; a farmer can be nominated for the award by any Iowan sending a brief letter or email, 100 words or less, summarizing the nominee’s conservation efforts.  Nominations are due to the county Soil and Water Conservation District (SWCD) by June 1. The 99 county SWCDs will choose one nominee from each county to advance for consideration for a regional conservation award, and the nine regional award winners will compete to be named ‘Iowa’s Conservation Farmer of the Year.’

The winner will be announced during the Iowa State Fair and the winner will receive the keys to their tractor during the Conservation Districts of Iowa annual meeting August 18-20 in Ames. The top prize, 12 months or 200 hours of free use of the John Deere 6E Series tractor, valued at more than $12,000, is once again donated by the Farm Bureau partner Van Wall Equipment of Perry and John Deere.



South Dakota to Host BIF Annual Meeting and Research Symposium; Registration Now Open

Registration is now open for the 2019 Beef Improvement Federation (BIF) Annual Meeting and Research Symposium. This year’s event will be June 18-21 at the University Comfort Suites and Convention Center in Brookings, South Dakota.

Early registration deadline is May 15. Attendees can save $100 by pre-registering. Online registration is available at http://www.beefimprovement.org.

This year’s BIF symposium features two and a half days of educational programming and a full day of tours. The first morning’s general session — “Applications of Technology” — will feature Mark Allan, Trans Ova Genetics director of genetic technology; Alison Van Eenennaam, U.C. Davis animal biotechnology and genomics extension specialist; and a producer panel including John Moes, Moes Feedlot, Watertown, South Dakota; Trey Patterson, Padlock Ranch, Ranchester, Wyoming; Tylor Braden, King Ranch, Kingsville, Texas; and John Maddux, Maddux Cattle Co., Wauneta, Nebraska.

The second day’s general session, “Utilization of Big Data” will include a presentation by Dr. Mark Trotter, Central Queensland University.

The afternoon breakout sessions both days will focus on a range of beef-production and genetic-improvement topics. The conference also features a Young Producer Symposium on Tuesday afternoon, designed for networking and to equip young cattle producers with essential knowledge as they grow their role in the business. Tuesday evening attendees will also enjoy an opening reception followed by the National Association of Annual Breeders Symposium at 7 p.m.

For more conference details, including registration information, complete schedule and lodging information visit http://www.beefimprovement.org.

Each year the BIF symposium draws a large group of leading seedstock and commercial beef producers, academics and allied industry partners. The attendance list is a “who’s who” of the beef value chain, offering great networking opportunities and conversations about the issues of the day. Program topics focus on how the beef industry can enhance value through genetic improvement across a range of attributes that affect the value chain.



Walmart to Source Beef Directly From TX Feeder, Cutting Out Processors

Walmart Inc. is taking control of the supply chain for Angus beef sold in some of its stores, cutting out meat processors as the company looks to offer higher quality products in an intensely competitive grocery industry. According to Reuters, the world's largest retailer said on Wednesday that the move would allow it to ensure supplies of quality Angus beef and meet demands from customers who want to know the origin of their meat.

Normally, Walmart would buy Angus beef from companies like Tyson Foods Inc and Cargill Inc.

Walmart has now arranged to source cattle from Texas rancher Bob McClaren of Prime Pursuits and 44 Farms, who said the retailer will sell no-hormones-added Black Angus beef.

The cattle will be fed at a feedyard that specializes in avoiding hormones, slaughtered in Kansas and packaged in Georgia before the beef hits shelves in about 500 Walmart stores in the southeastern United States.

"Having visibility to the end-to-end process lets us know we are helping our customers bring a consistently great piece of meat to their table every time they buy with us," Scott Neal, Walmart's senior vice president of meat, said in a statement.

Tyson and Cargill said they supported Walmart's project. Tyson shares slipped 0.9 percent, while Walmart shares rose 0.4 percent.

Walmart's efforts to exert more control over its meat supply come after it switched to selling high-grade Angus beef in 2017.

The retailer's latest actions target younger consumers who want more transparency in food production and no growth hormones in their meat, said Cassie Fish, a beef industry expert who formerly worked at Tyson.

"It's a play for the millennials," she said.

Walmart has separately increased its control over its dairy supply by opening a processing plant in Indiana that supplies private-label milk to stores.

Rival Costco Wholesale Corp is meanwhile building a chicken plant in Fremont, Nebraska, that will serve its stores.

"There appears to be an emerging trend of backwards integration into the ag supply chain," said Jeremy Scott, an analyst at Mizuho.

"This is a unique approach by Walmart to pursue a direct link from calf to plate, but it comes with plenty of risk and new variables."

Walmart would struggle to create a supply chain that covers all its beef needs, Vertical Group analyst Heather Jones said, so the retailer will still need to buy some meat from Tyson.

Processors such as Tyson buy cattle from feedlots in broad geographic areas and own multiple plants that slaughter beef for sale by retailers and restaurants.

Tyson also recently announced a program to trace the origins of beef raised without antibiotics or added hormones.



NPPC SUMBITS COMMENTS ON EU PROPOSAL FOR A REGULATION ON VETERINARY MEDICAL PRODUCTS

The National Pork Producers Council this week submitted comments in response to EU Regulation 2019/6 of the European Parliament and the Council on veterinary medicinal products and repealing Directive 2001/82/EC. In its comments, NPPC said it had "significant concerns on the precedent Regulation 2019/6 would have on the global trade of meat and meat products." Specifically, while the U.S. pork sector doesn't have robust trade with EU member countries, there is significant concern that countries could impose precautionary requirements on U.S. pork products based on this precedent. "It is essential that the U.S. Department of Agriculture advocates to the European Parliament and the Council to consider international standards set by the CODEX Alimentarius Commission," NPPC wrote.

In its comments, NPPC highlighted how the Food and Drug Administration has addressed public health concerns from the use of antimicrobials to promote growth and urged USDA's Foreign Agricultural Service to highlight the certainty of the robust FDA process in its argument on the unnecessary restrictions posted by Regulation 2019/6. Additionally, while the U.S. has a list of antimicrobials restricted from use in food animals, the country follows Maximum Residue Levels on its imported food products. NPPC urges the EU to adhere to that same principle.



New ‘Ag Mag’ Explores Food Waste in the U.S.

A new food waste “Ag Mag” developed by the American Farm Bureau Foundation for Agriculture is available for purchase in classroom sets of 30.

The Ag Mag, a newspaper-style reader, features information about food waste in the U.S. and how it can be reduced or prevented. It also explores the science of decomposing food and the steps necessary to move food from the farm to consumers’ tables. The Ag Mag is aligned to national learning standards and is written at a third- to fourth-grade reader level. 

“The launch of our Food Waste Ag Mag is especially timely, as 40% of all food grown and produced in the U.S. is never eaten, according to the Agriculture Department,” said Christy Lilja, executive director of the Foundation. “The Food Waste Ag Mag is a great tool for classroom educators and can also be used by families and youth groups interested in learning about this important issue.”

In addition to food waste, the Foundation’s Ag Mag series includes ag innovations, apples, bees, beef, biotechnology, careers, corn, cotton, dairy, energy, pizza, plant breeding, poultry, school gardens, sheep, snacks, soybeans and specialty crops. Spanish language versions of several Ag Mags (apples, bees, beef, pizza, school gardens and specialty crops) are also available. General information about Ag Mags and other educational resources offered by the Foundation is available at https://www.agfoundation.org/resources.




ADM Reports First Quarter Earnings

Archer Daniels Midland Company today reported financial results for the quarter ended March 31, 2019 of $0.41/share and net earnings of $233 million.

“The first quarter proved more challenging than initially expected,” said Chairman and CEO Juan Luciano. “Impacts from severe weather in North America were on the high side of our initial estimates, and the ethanol industry environment limited margins and opportunities.

“Despite a challenging start to the year, we continue to make excellent progress on our key imperatives for 2019: improving performance in certain businesses, accelerating our Readiness efforts, and delivering results from our growth investments,” Luciano continued. “We are very encouraged with our new Neovia business and the creation of a global Animal Nutrition platform. Readiness continues to expand our efforts to enhance our competitiveness. And additional actions we are announcing today will help us advance our goals to deliver best-in-class customer service along with long-term growth and shareholder value.

“With three quarters of the year still ahead of us, the continued advancement of our strategy, combined with an anticipated resolution of the U.S.-China trade situation and an expected acceleration of soybean meal demand driven by African Swine Fever, make us optimistic for the second half. Taking all of these factors into account, we remain committed to continuing to pull the levers under our control to deliver our objective of full-year earnings comparable to or higher than 2018.”

As part of that commitment, the company is announcing a series of measures to continue to underpin long-term-value creation:
    First, to meet growing customer demand, ADM plans to repurpose its corn wet mill in Marshall, Minnesota, to produce higher volumes of food and industrial-grade starches as well as liquid feedstocks for food and industrial uses, phasing out production of high-fructose corn syrup at that facility as soon as committed deliveries are complete.
    Second, the company is creating an ethanol subsidiary, which will include ADM’s dry mills in Columbus, Nebraska; Cedar Rapids, Iowa; and Peoria, Illinois. The ethanol subsidiary will report as an independent segment. The new structure will allow the company to advance strategic alternatives, which may include, but are not limited to, a potential spin-off of the business to existing ADM shareholders.
    Finally, ADM has begun a series of actions to enhance agility, accelerate growth, and strengthen customer service. These actions include organizational changes to centralize and standardize business activities and processes, and enhance productivity and effectiveness; accelerating the capture of planned synergies after a period of acquisitions; and offering early retirement for some colleagues in the U.S. and Canada.
    As a result of Readiness-based improvements in capital prioritization, project evaluation and project execution processes, and in keeping with the company’s commitment to returns, ADM also plans to reduce 2019 capital spending by 10 percent, to the range of $0.8 to $0.9 billion.



April Cattle on Feed
Stephen R. Koontz, Dept of Ag and Resource Economics - Colorado State University

Now, that was a Cattle on Feed report. Close to record high inventories with strong placements. One week to think about it and then the futures market reacted hard. Cattle on feed inventories were 11.964 million head as of April 1, 2019. This is the highest on-feed number - since 1996 with this version of the report - for any month except December of 2011. That record level was 12.110 million head. All but the upper Midwestern states in the report had higher inventories than the prior year. Placements were 5% above the prior year and 8% above the prior month. Placements in Colorado, Kansas, and Oklahoma were 21%, 16%, and 13% above the prior year. All states detailed in the report except Nebraska, Iowa, and Arizona placed animals in excess of the prior year. Understandably, placements in Nebraska were 11% below the prior year. Fed cattle will be abundant through the summer and fall.

In the face of these supplies there are factors relieving the pressure. Slaughter weights remain below the prior year. The cold and wet spring has accelerated the seasonal decline in average carcass weights. Saturday slaughter continues to run strong and marketings in the report are 3% above the prior year and 5% above the prior month. Cold storage of beef is reasonable given available supplies. Finally, boxed beef values and the choice-select spread appear to be will into their normal spring rallies. Thus, the cash fed cattle trade has been strong.

But the inventory of market ready cattle, as proxied by the calculated cattle on feed over 120 days, are nothing short of enormous. Orderly and aggressive marketings through the remainder of April, May, and June are essential. The live cattle futures complex has strong discounts in the more deferred out until December. This seasonal structure certainly appears appropriate. Trade this week and next will reveal where cash fed cattle prices are headed.



Consumers Sue Leading Beef Manufacturers for Massive Antitrust Price-Fixing Scheme

A federal class-action lawsuit has revealed that a nationwide cartel of leading meatpacking manufacturers in the $100 billion beef industry forced consumers to pay high prices for steak, hamburgers and other beef products, according to the law firm bringing the case, Hagens Berman.

According to the lawsuit filed Apr. 26, 2019 in the U.S. District Court for the District of Minnesota, the price-fixing scheme has been carried out by the biggest names in the industry who control approximately 75 percent of the beef-packing market.

The defendants – Tyson, Cargill, National Beef and JBS – are responsible for purchasing beef from ranchers, processing the beef and selling it to retail businesses for purchase by consumers, and attorneys say they have been bilking consumers since 2015 by artificially limiting the amount of beef they purchase, process and sell to retail operations.

“Our complaint alleges that families nationwide have been overpaying for years for beef products they buy routinely, unknowingly paying inflated prices fixed by a scheme to limit beef supplies,” said Steve Berman, managing partner of Hagens Berman and attorney representing consumers in the class-action lawsuit against the meatpacking defendants. “The result: this $100 billion industry reaped billions of dollars in extra profits while consumers paid far more for beef than they should have. We intend to put an end to it.”

The class action seeks to recover losses consumers faced under the price-fixing scheme, as well as injunctive relief from the court to put an end to the anticompetitive behavior. The case brings counts of violations of federal and state antitrust laws and unfair competition, unjust enrichment and consumer protection laws.

The lawsuit alleges that defendants, “entered into a conspiracy to extract maximum profits from the distribution channel of beef – by both extracting all gains from the ranchers who raised the cattle, as well as artificially inflating the price of beef being sold to the consumer.” The suit goes on to say that defendants, “engaged in a concerted scheme to suppress throughput of beef, artificially depressing both the amount of cattle they purchased and the amount of processed beef they sold to retail operations. The purpose of the scheme was to maximize the margins they received from sale of beef – by both underpaying the farmers, and simultaneously ensuring an overcharge to the consumer.”

According to an industry insider quoted in the suit, “meat works like the mafia.”  Executives at companies in the meatpacking industry all know each other, according to the insider, and someone may be a competitor but also a customer. 

The defendants colluded on their purchases of cattle from ranchers by restricting the amount of cattle they purchased and bid rigging practices that depressed the price of cattle that the defendants purchased through auctions, attorneys claims. Defendants’ actions created an artificial shortage of beef, which harmed consumers by elevating the price they paid for beef.

The lawsuit alleges that prior to the anticompetitive conduct, the price of cattle sold to the defendants and the price of beef sold by defendants moved in tandem. Following the anticompetitive conduct, the price of cattle fell while the price of beef remained elevated.

“It’s a matter of common sense that the prices of cattle and beef should move together because beef is simply processed cattle,” said Berman. “But these leading meatpacking manufacturers manipulated the market so this natural economic relationship broke down.”



Key Brazilian Bridge Collapses
US Soybean Export Council

A portion of a bridge over the Moju River in the state of Para, Brazil collapsed in early April when it was hit by a tank barge. Agribusiness consultant Kory Melby says 10 or 20 percent of soybeans grown in Brazil’s center west are delivered by road to those ports and “it will probably take years for that bridge to be rebuilt.” The bridge collapse comes on the heels of Highway BR-163 being closed for two weeks in March. The northern arc of ports were responsible for 28 percent of Brazil’s soybean and corn exports in 2018 according to the National Agency for Water Transport (Antaq).

All the ports on the Amazon are said to be operating normally. The bridge collapse will impact the movement of soybeans from the interior of the state of Para with approximately 300,000 hectares of soybeans. Farmers in the state will have to take a longer route to a port. The bottom line is the extra cost will be borne by the farmer.



U.S. Special 301 Report Criticizes Europe for Wrongly Targeting U.S. Dairy Exports

U.S. dairy officials today lauded the U.S. Trade Representative’s Office for denouncing Europe’s anti-trade agenda against common-name food products and pursuing avenues to preserve U.S. export access rights.

The U.S. Special 301 Report, issued yesterday by USTR, categorically rejects EU policies that seek to intentionally disadvantage U.S. suppliers in global markets by blocking their ability to use common names such as fontina, gorgonzola, asiago and feta cheeses.

“The EU pressures trading partners to prevent all producers, other than in certain EU regions, from using certain product names,” read the report. “This is despite the fact that these terms are the common names for products and produced in countries around the world.”

Europe’s actions infringe on the rights of U.S. producers and imposes unwarranted market barriers to U.S. goods, according to the USTR.

“Europe has disadvantaged the U.S. dairy industry for too long by abusing geographical indications (GI) policies,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council. “We face unfair barriers around the world because of Europe. USTR should be commended for recognizing the problem, and we look forward to working with them to rectify it.”

Vilsack urged the USTR to prioritize securing binding commitments from America’s current trading partners to prevent future GI restrictions. The market access preservation commitments secured with Mexico as part of the U.S.-Mexico-Canada Agreement, he said, provide a positive precedent to build upon.

Jim Mulhern, president and CEO of the National Milk Producers Federation, also urged the Administration to take into account the lopsided dairy trade imbalance between the United States and Europe in formulating policies to tackle the EU’s predatory attacks on U.S. dairy exports.

Europe sent $1.8 billion in dairy goods to the U.S. market in 2018 but only imported $145 million of U.S. products, even though America is a major dairy supplier to the rest of the world.

“Trade is supposed to be a two-way street,” Mulhern noted. “America’s struggling U.S. dairy producers deserve a lot better than the current one-way trade relationship with the European Union whereby they sell us a billion dollars of cheese each year while erecting walls to our ability to compete head to head with them overseas.”



USDA Reaffirms Science-Based Decision Making at G20 Agricultural Chief Scientists Meeting

Two of the U.S. Department of Agriculture’s top scientists today reaffirmed the United States’ commitment to science-based decision-making at the G20 Agricultural Chief Scientists (MACS) meeting held this week in Tokyo.

Dr. Chavonda Jacobs-Young, USDA’s Acting Chief Scientist and Administrator of the Agricultural Research Service and Dr. Scott Hutchins, USDA’s Deputy Under Secretary for Research, Education, and Economics (REE), led the U.S. delegation. The United States has participated in MACS meetings since 2012.

“The G20 MACS brings together Agricultural Chief Scientists from around the world to deliberate on global agricultural research priorities,” Jacobs-Young said. “The meetings have proven to be essential in advancing the science and technology dialogue on critical issues facing the agricultural sector.”

“I was pleased to see an affirmation of the role for science-based decision making for advancing global food production in the MACS communique,” Hutchins said. “Globally, we are seeing an increase in the use of scientific information in policymaking and it is important that we remain vigilant in our risk assessment processes to ensure that we continue to accelerate innovation in agriculture.”

Hutchins said the USDA was also pleased to see support for the International Plant Protection Convention (IPPC) implementation of electronic phytosanitary certification (ePhyto) in the MACS communique.

“Embracing technological solutions such as ePhyto is critical to supporting efforts to minimize the global spread of transboundary plant pests,” he said.