Thursday May 9 Ag News

KC Fed Reserve: Ag Credit Conditions Deteriorate Steadily
Nathan Kauffman, Vice President and Omaha Branch Executive
Ty Kreitman, Assistant Economist

Farm income decreased across the Tenth District and the trend of steady deterioration in agricultural credit conditions continued in the first quarter of 2019. With low income weighing on farm finances, the pace of decline in farm loan repayment rates increased slightly. In addition, carry-over debt increased again for many borrowers and bankers continued to restructure debt and deny a modest amount of new loan requests due to cash flow shortages. Major flooding and blizzards across some regions in the District late in the first quarter may also put additional financial pressures on some farm borrowers as damages continue to be assessed.

Farm Income
A majority of bankers across the District continued to report decreases in farm income during the first quarter. Despite a slight improvement in livestock prices toward the end of the period, the pace of decline in farm income quickened slightly from a year ago and from the prior quarter. A similar pace of decline also was expected in coming months. However, significant increases in hog prices in the final weeks of the quarter and into April improved revenues for some operations in the livestock sector.

Reductions in farm income were sharpest in Nebraska and Missouri, states heavily concentrated in corn and soybean production. The drop was largest in Missouri, where farm income was steady a year ago. While some areas were heavily affected by spring flooding and blizzards, it may be months before the full impact to farm income is realized as immediate damage and implications for the 2019 operating cycle were being evaluated.

Weakness in farm income continued to weigh on farm household and capital spending across the District. Declines in spending by farm borrowers remained similar to the previous quarters after moderating slightly in 2018. While following similar trends, decreases in capital spending remained larger than cuts to household spending and that relationship was expected to continue into the next quarter.

Farm spending declined at a pace similar to the previous year in all District states with the exception of Oklahoma, where bankers were less pessimistic. Similar to changes in farm income, the pace of decline in farm household and capital spending was sharper in Missouri when compared with a year ago. The decrease in capital spending also was notably smaller in Oklahoma and remained sharpest in Nebraska.

Credit Conditions
As farm income remained low, demand for farm loans remained high and the ability of farm borrowers to repay loans weakened at a slightly faster pace than in previous quarters. Lower rates of repayment in Missouri and Nebraska were the largest contributors to overall weakness in farm loan repayment rates across the District.  Similar to farm income, recent severe weather also may have contributed to slower repayment rates and increased loan demand, but the full impact remains uncertain pending assessment of damages.

 As farm cash flows remained weak, bankers continued to restructure debt and even deny some farm loan requests. Despite moderating from a high of 23 percent in 2017, about 14 percent of new farm loan requests involved restructuring to meet liquidity needs. New loan requests were denied at a pace of 8 percent because of cash flow shortages, a rate similar to a year ago. While remaining near the District average, the rate of denial on new loan requests in Kansas increased moderately compared with a year ago.

Additionally, further reductions in farm income also led to another year of increases in carry-over debt for some borrowers. On average, about 20 percent of farm borrowers throughout the District had an increase in carry-over debt. Compared with last year, the share of borrowers with an increase in carry-over debt nearly doubled in Missouri and was slightly higher in Oklahoma. In all other states, the share declined slightly.

With continued deterioration in agricultural credit conditions, bankers also further tightened credit standards. About 25 percent of all bankers in the District increased collateral requirements relative to last year. Over 30 percent of survey respondents in Kansas, Missouri and Nebraska increased collateral requirements, in contrast to about 10 percent of banks in Oklahoma and the Mountain States.

Debt service capacity in the farm sector also has tightened in recent years. Survey respondents indicated annual cash flow was only slightly greater than annual debt obligations for nearly half of borrowers with crop operating loans in the Tenth District. A similar capacity for servicing debt was reported for other types of loans. The coverage of loan payments by cash flow was tighter in Nebraska, where respondents reported that more than half of borrowers, regardless of loan type, had a debt service coverage ratio of less than 125 percent.

Interest Rates and Farmland Values
Interest rates on all types of agricultural loans in the first quarter increased at a moderate pace. Compared with the first quarter of 2015, fixed interest rates have increased slightly more than variable rates for the same types of loans. For example, variable rates on operating loans have increased about 110 basis points over that time compared with an increase of nearly 120 basis points on fixed rates. Similarly, variable and fixed rates on farm real estate loans over that same period increased by 80 and 110 basis points, respectively.

Farm real estate values in the Tenth District were relatively steady compared with a year ago despite pressure from weaknesses in the farm sector and higher interest rates. In fact, the value of nonirrigated cropland increased slightly for the first time since 2015. The value of ranchland across the District also increased slightly for the third straight quarter while irrigated cropland declined slightly, but at the slowest rate since 2015.

In contrast to the change in farm real estate values across the District, the value of nonirrigated cropland declined slightly in Nebraska and Kansas. The decline in the value of nonirrigated farmland was largest in Kansas while there was a moderate increase in Missouri and Oklahoma. Even as values have appeared to stabilize in recent quarters, slightly higher interest rates as well as supply and demand factors of farm real estate markets are likely to remain key risks to the outlook for farmland.

Conclusion
Alongside ongoing weakness in the Tenth District farm economy, agricultural credit conditions deteriorated slightly in the first quarter. Demand for farm loans remained strong and weaknesses in farm finances also put added downward pressure on farm loan repayment rates and farm spending. Despite higher interest rates and added deterioration in farm income and credit conditions, however, farmland markets remained relatively steady as an important source of support for Tenth District agriculture.



New Farm Bureau Report Details Sensitivity of Agriculture Exports to Tariff Threats, Negative Trade Talk

A new report by the Nebraska Farm Bureau details the strong connection between the threat of U.S. imposed tariffs on trade partners and the loss of hundreds of millions of dollars in Nebraska agriculture exports in 2017. The “Nebraska Agriculture and International Trade” report uses the most current United States Department of Agriculture (USDA) trade data to identify the 2017 value of Nebraska agriculture exports on a per-commodity, per-county, and per-farm and ranch basis. In doing so, the report details the strong sensitivity of agriculture markets and Nebraska exports to negative trade and tariff talk.

“While retaliatory tariffs on U.S. agriculture commodities didn’t occur until President Trump imposed steel and aluminum tariffs on our trading partners in May of 2018, the President began threatening the use of tariffs in trade negotiations in January of 2017, an entire year earlier. This new report reviews 2017 numbers and provides an economic perspective on how harmful the threats of tariffs were to Nebraska agriculture exports well before the President enacted tariffs and agriculture began to suffer from other countries’ retaliatory measures,” said Jay Rempe, Nebraska Farm Bureau senior economist and author of the report.

The analysis in the report provides direct comparisons between newly calculated values for Nebraska agriculture exports in 2017 and the value of Nebraska agriculture exports for 2016, allowing for a comparison of how U.S. talk of implementing tariffs negatively impacted Nebraska agriculture.

“Nebraska agriculture exports were down almost $200 million in 2017 compared to 2016. Most of that decline was due to decreased exports of soybeans, which were down $130 million, and reduced corn exports, which fell more than $140 million. It’s no coincidence those declines coincide with U.S. tariff threats made against some of our largest trading partners like China, Mexico, and Canada. China is the largest consumer of Nebraska soybeans, while Mexico is the largest buyer of Nebraska corn and the third largest purchaser of soybeans. Canada is Nebraska’s top overall agriculture export market,” said Rempe. “The tariff threats clearly impacted those markets for Nebraska agriculture commodities.

Although Nebraska soybeans and corn exports were off in 2017, Nebraska beef exports were up $112 million and pork exports were up $16 million over 2016 export amounts.

“The boost in beef and pork exports was good for Nebraska and needed to help offset overall declines in corn and soybean exports. Fortunately, Japan, which is far and away the largest buyer of Nebraska beef, and the largest purchaser of Nebraska pork, was never targeted for tariffs. Our beef and pork producers escaped the negative market impacts of tariff threats in 2017,” said Rempe.

To bring the value of agriculture trade closer to home for farmers and ranchers, the report identifies a value of agricultural trade on an individual commodity basis for 2017.

“Our 2016 analysis pegged the per-unit value of exports for soybeans at $6.27 per bushel. The 2017 analysis shows the soybean value at $5.66 per-bushel; a 61 cent decline. On the other end of the spectrum, we calculated the per-unit value of trade to beef at $169.22 per head in 2016. In 2017, the analysis shows the value of trade to beef at $226.30 per head; an increase of $57.08,” said Rempe.

The report also analyzes and puts a dollar value of agricultural trade for every Nebraska county. Cuming County edged out Platte County as the county receiving the most value from agriculture trade in 2017. More than $155 million of export value flowed to Cuming County due to international sales, while $149 million flowed to Platte County, which held the top spot in the 2016 report.

When measuring the importance of trade on a per-farm basis, Phelps County is the most reliant on trade with a per-farm export value of $281,000. Other counties heavily reliant on trade on a per-farm basis included Kearney, Fillmore, Clay, York, and Boone counties, each with a per-farm value of trade exceeding $180,000.

“This report shows that we can’t understate the importance of agricultural trade to Nebraska, but it also reflects the sensitivity of agriculture markets to negative talk surrounding trade policy. Between the blizzard and flooding disasters that have hammered our state, and the overall downward trajectory of the agriculture economy, farmers and ranchers are in desperate need of a ‘win’ on trade. Nebraska Farm Bureau is committed to working with the Administration and Congress to pass the U.S.-Mexico-Canada Agreement (USMCA) and we need the President to deliver on his promise to secure trade deals with both Japan and China,” said Steve Nelson, Nebraska Farm Bureau president.

The “Nebraska Agriculture and International Trade” report is available on the Nebraska Farm Bureau website at www.nefb.org. 



Child Agricultural Injury Prevention workshop coming to Des Moines, June 23-24

A national workshop dedicated to childhood agricultural safety is scheduled for June 23-24 in the agricultural and insurance hub of Des Moines, Iowa.

The Child Agricultural Injury Prevention (CAIP) Workshop is designed for those who work in or with the agriculture industry, and want to establish and enhance child injury prevention strategies for their organizations.

Early-bird registration ($199) runs through Friday, May 10. The fee will then increase to $249. Scholarships are available to assist with the cost of registration. More information, including the registration link, is available at www.marshfieldresearch.org/CAIP-Workshop.

Co-hosts include the Great Plains Center for Agricultural Health (University of Iowa) and the Central States Center for Agricultural Safety and Health (University of Nebraska Medical Center), along with the National Children’s Center for Rural and Agricultural Health and Safety. Sponsors include John Deere, Westfield Insurance and the National Farm Medicine Center.

“We’ll coach workshop participants on how to work with farmers and farm supervisors to protect children who live, work and play on farms and ranches,” said Ellen Duysen, M.P.H., Central States Center coordinator.

The workshop is expected to draw participants from producer groups, insurance, FFA, healthcare, Extension, agribusiness, public health and media.

“All these professions have a role to play in protecting kids on farms,” said Stephanie Leonard, M.S., an occupational safety manager at the University of Iowa who also writes a safety column for Iowa Farmer Today. Leonard will give a workshop presentation on partnering with media.

By the end of the workshop, participants will be able to:
-    Understand the leading causes of injuries to children who are either working or playing on farms;
-    Describe interventions most likely to be effective in preventing childhood farm injuries; and
-    Identify their (and their organization’s) unique role in helping farm children grow up happy and healthy.

“Protecting our children needs to be a priority,” Duysen said. “A youth dies in an agricultural incident about every three days in the United States.” 

The workshop will be co-located with the International Society for Agricultural Safety and Health (ISASH) annual conference, which begins June 24 and runs through June 27, https://vafb.swoogo.com/ISASH2019. Those who register for both the workshop and the ISASH Conference will save $50 on the combined registration fees. Both events will be held at the Embassy Suites Downtown Des Moines.

Additional  Child Agricultural Injury Prevention Workshops are scheduled for Lexington, Ky., Aug. 6-7; and Hershey, Pa., Sept. 17-18. All workshops are national in scope, but also feature issues of interest to the respective regions.

For more workshop information, email nccrahs@marshfieldresearch.org or call 1-800-662-6900. The National Children’s Center is funded in part by the National Institute for Occupational Safety and Health (NIOSH), Centers for Disease Control and Prevention.



Last Call for Century and Heritage Farm Applications

Iowa Secretary of Agriculture Mike Naig reminds eligible farm owners to apply for the 2019 Century and Heritage Farm Program by June 1, 2019. The program is sponsored by the Iowa Department of Agriculture and Land Stewardship and the Iowa Farm Bureau Federation and recognizes families that have owned their Century Farm for 100 years or Heritage Farm for 150 years.

“The Century and Heritage Farm Program is one way to recognize the hard work and dedication that is necessary to keep a farm in the same family for 100 or 150 years,” Naig said. “The award ceremony provides a great opportunity to consider all of the challenges and unexpected obstacles each of them would have to overcome during their time on the farm.”

Century Farm applications are available at www.iowacenturyfarms.com and Heritage Farm applications can be found at www.iowaagriculture.gov/heritageFarmsProgram.asp. Applications may also be requested from Becky Lorenz, Coordinator of the Century and Heritage Farm Program via phone at 515-281-3645, email at Becky.Lorenz@IowaAgriculture.gov or by writing to Century or Heritage Farms Program, Iowa Department of Agriculture and Land Stewardship, Henry A. Wallace Building, 502 E. 9th St., Des Moines, IA 50319.

The Century Farm program began in 1976 as part of the Nation’s Bicentennial Celebration. To date, more than 19,000 farms from across the state have received this recognition. The Heritage Farm program was started in 2006, on the 30th anniversary of the Century Farm program, and more than 1,000 farms have been recognized. In 2018, 359 Century Farms and 148 Heritage Farms were recognized.

A full list of all past Century Farm recipients is available at www.iowacenturyfarms.com.

The ceremony to recognize the 2019 Century and Heritage Farm Families is scheduled to be held at the Iowa State Fair on Thursday, August 15, in the Pioneer Livestock Pavilion.



Cattle Industry’s Beef Quality Assurance Program Develops, Distributes Extensive National Manual

 An official manual for the Beef Quality Assurance program that is both detailed and extensive is now being distributed nationwide throughout the cattle industry. The manual and the BQA Program are both managed by the producer education team at the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff.

The 124-page manual addresses topics such as food safety, animal well-being, worker safety and environmental stewardship. It provides specific information to help producers approach management decisions in a way that acknowledges a responsibility to the animals, consumers, the environment and the larger beef industry.

The manual includes the most current set of key practices, guidelines and suggestions for providing thoughtful and responsible cattle management. A helpful resource for cattle producers and others in the industry, it is the foundation for training and certification programs offered nationally and by many states.

“In the Beef Quality Assurance Program, we have a slogan that the right way is the only way,” according to BQA Advisory Group Chair, Bob Smith, DVM. “At the same time, we recognize that no two cattle operations are the same. And no program or manual could ever compile all of the “do’s” and “don’ts” that would completely constitute the ‘right way’.”

Smith says this manual instead outlines a way of thinking for cattle producers – a guideline for approaching decisions with thoughtfulness and care. He says following the easy-to-understand manual will lead to both a stronger individual cattle operation and a more vibrant, respected and robust cattle industry.

The BQA Program is a cooperative effort between beef producers, veterinarians, nutritionists, extension staff and other professionals from veterinary medical associations and allied industries. It’s goal is to assure consumers that all cattle shipped from a beef production unit are healthy, wholesome, and safe; their management has met FDA, USDA and EPA standards; they meet quality requirements throughout the production system; and are produced using animal well-being, worker safety, and environmentally-sound production practices.

It has six objectives focused on production standards, data retention, hands-on training and education, technical assistance and maintaining a foundation of continuous improvement and responsible cattle management.

 BQA encourages producers to use all reliable sources and information and take actions that will accomplish BQA program’s goals and objectives. In addition, the BQA recommends the use of common sense, appropriate management skills and accepted scientific knowledge to deliver the highest levels of animal stewardship and the production of quality, healthy and safe products. 

To view the new BQA manual or become BQA certified visit BQA.org.



NCBA Cattlemen Webinar Series: Is She Pregnant and Now What!?
May 16, 2019 @ 7pm Central

Everyone wants to know if their breeding season was a success or not. New technologies may allow you to know how successful you were much earlier. Now that you know she’s pregnant, research has shown that how the fetus is treated in utero can have an impact on the future performance of the calf. Join Dr. Ky Pohler and Dr. Reinaldo Cooke as their presentation discusses what technologies can get you the information you need to know the success of your breeding season and improve the overall management of your herd.

Ky Pohler, PhD. - Texas A&M University
Dr. Ky Pohler is an Assistant Professor and a member of the graduate faculty in the Department of Animal Science. He grew up in Shiner, TX and received a B.S. in Animal Science from Texas A&M University.  He then received a M.S. and Ph.D. from the University of Missouri. Ky’s research interest focus on understanding the physiological and molecular mechanisms that control reproductive efficiency in cattle. More specifically his lab is interested in the mechanisms that lead to embryonic and fetal mortality in cattle and development of management strategies to overcome these losses.

Reinaldo Cooke, PhD. - Texas A&M University
Dr. Reinaldo Cooke is an Associate Professor with the Texas A&M University Department of Animal Science. Dr. Cooke developed an internationally-recognized academic program, resulting in methods to improve efficiency of beef operations in the US and across the globe. Highlights of Dr. Cooke’s research include: 1) impacts of cattle temperament on productive and reproductive traits, 2) management to alleviate stress-induced inflammation in receiving cattle, and 3) role of omega-6 fatty acids in early pregnancy establishment.

Click Here to Register Today!  https://www.ncba.org/cattlemenswebinarseries.aspx

You can also check out all the past Producer Education webinars... https://www.youtube.com/playlist?list=PLsDMBXSb2jYcUGaCNrQ09f0JxDJXJQu24. 

Leading industry speakers from across the country presenting the latest information on topics ranging from tax strategy to genetic improvement. For those that can’t attend “live”, the sessions are recorded and “always on”!



USDA 2018 Dairy Production Summary

Total cheese production, excluding cottage cheeses, was 13.0 billion pounds, 3.0 percent above 2017 production. Wisconsin was the leading State with 26.3 percent of the production.

Italian varieties, with 5.56 billion pounds was 3.0 percent above 2017 production and accounted for 42.7 percent of total cheese in 2018. Mozzarella accounted for 78.3 percent of the Italian production followed by Parmesan with 7.6 percent and Provolone with 7.2 percent. Wisconsin was the leading State in Italian cheese production with 31.1 percent of the production.

American type cheese production was 5.25 billion pounds, 3.6 percent above 2017 and accounted for 40.3 percent of total cheese in 2018. Wisconsin was the leading State in American type cheese production with 19.5 percent of the production.

Butter production in the United States during 2018 totaled 1.89 billion pounds, 2.4 percent above 2017. California was the leading state in Butter production with 30.6 percent of the production.

Dry milk powders (2018 United States production, comparisons in percentage with 2017)
Nonfat dry milk, human - 1.77 billion pounds, down 3.4 percent.
Skim milk powders - 567 million pounds, up 7.0 percent.

Whey products (2018 United States production, comparisons in percentage with 2017)
Dry whey, total - 999 million pounds, down 3.5 percent.
Lactose, human and animal - 1.16 billion pounds, up 3.0 percent.
Whey protein concentrate, total - 514 million pounds, up 5.1 percent.

Frozen products (2018 United States production, comparisons in percentage with 2017)
Ice cream, Regular (total) - 840 million gallons, down 3.6 percent.
Ice cream, Lowfat (total) - 451 million gallons, down 2.2 percent.
Sherbet (total) - 40.2 million gallons, down 6.4 percent.
Frozen Yogurt (total) - 50.2 million gallons, down 20.2 percent.



Farmers Need Lifeboat to Survive Low Prices, Oversupply Caused by Trade War

On the heels of unsuccessful trade negotiations with China, the White House is expected to increase tariffs from 10 percent to 25 percent on $200 billion worth of Chinese goods early Friday morning. President Donald Trump has also threatened to levy duties on an additional $325 billion worth of imports, which, if implemented, would mean that nearly all U.S. imports from China would be subject to tariffs. In response, Beijing plans to enforce “necessary countermeasures,” on top of the tariffs they have already imposed on $110 billion worth of U.S. products.

As the administration works to ensure that China complies with international trade regulations, National Farmers Union (NFU) is calling on Congress to provide farmers with adequate support to maintain their livelihoods amid shrinking export markets and low farm income. NFU President Roger Johnson issued the following statement:

“China’s unfair and manipulative trade practices are clearly a problem that need to be fixed. But addressing these practices has created new problems for American farmers and ranchers in the form of lost export markets, a commodity glut, and severely depressed prices.

“We are more than a year into this trade war with China, and this most recent escalation suggests that there is no end in sight. At this point, we can’t expect export markets to go back to the way they were – the damage has already been done. In the long term, there needs to be a fundamental shift in the way we establish the economic sustainability of agricultural production in the U.S. But until that happens, struggling family farmers and ranchers are in desperate need of a lifeboat to keep them afloat, whether that’s another round of Marketing Facilitation Program payments or some other form of economic disaster assistance.”



U.S. Exports of Ethanol & Distillers Grains Reinvigorated in March
Ann Lewis, Research Analyst, Renewable Fuels Association
   
U.S. ethanol exports swelled 23% to 140.0 million gallons (mg) in March 2019, according to government data released this morning and analyzed by the Renewable Fuels Association (RFA). This is the sixth straight month that exports have exceeded 100 million gallons.

Brazil was our top trading partner for the fourth straight month, purchasing a substantial 65.7 mg of U.S. ethanol and representing nearly half (47%) of our March export market. This reflects an 81% increase over February and the largest monthly shipment to Brazil in twelve months. Exports to Canada also surged 33% to 22.7 mg (16% of the global export market). India pared back on U.S. ethanol imports, decreasing 30% to 10.5 mg. Other significant importers include Switzerland (9.1 mg), Peru (5.5 mg), and the Philippines (4.9 mg).

March exports of U.S. undenatured fuel ethanol broadened 36% to 92.2 mg. Brazil was the largest importer with 65.7 mg, up 81% and representing 71% of the market. Switzerland made a record purchase of 9.1 mg after only previously dabbling in our market, while Peru purchased 5.5 mg.

American producers shipped 19% less denatured fuel ethanol in March at 33.3 mg. However, U.S. exports to Canada increased 36% to 21.6 mg, representing two-thirds of all U.S. sales. The Philippines (4.9 mg), United Arab Emirates (3.1 mg), and South Korea (1.5 mg) were other major markets.

U.S. sales of ethanol for non-fuel, non-beverage purposes plumped up in March as 14.5 mg entered the global marketplace. U.S. shippers exported 6.3 mg of undenatured product—the second-highest monthly volume on record—with the bulk distributed to Saudi Arabia (2.3 mg), Sweden (1.7 mg), Canada, Colombia, and Japan. India (7.9 mg) sourced most exported denatured product for non-fuel, non-beverage purposes.

The United States imported 10.7 mg of undenatured fuel ethanol from Brazil in March, while Canada dispatched 0.1 mg of denatured fuel ethanol. This reflects the first U.S. fuel ethanol imports of the year, and the largest first quarter volume to enter our borders in six years.

March exports of U.S. dried distillers grains with solubles (DDGS)—the animal feed co-product generated by dry mill ethanol plants—rebounded from a 6-year low in February, pushing 39% higher to 956,828 metric tons (mt). Shipments to Turkey were five times higher than February at 162,660 mt, while DDGS exports to Mexico decreased 21% to 128,712 mt. South Korea (128,712 mt, +47%), Vietnam (94,695 mt, +29%), and Indonesia (89,401 mt, +19%) were other significant export markets. These five countries represented two-thirds of all U.S. DDGS exports in March.



Brazil Soy Crop Estimate 114.3 MMT

Brazilian crop agency Conab raised its estimates for soybean and corn production for the 2018-2019 growing season after good weather later in recent months boosted productivity in many areas.

Brazilian farmers produced 114.3 million metric tons of soybeans in the 2018-2019 harvest, which is practically finished, Conab said Thursday. In April, the agency estimated a crop of 113.8 million tons, and in the 2017-2018 season Brazil produced 119.3 million tons of soybeans.

The decline from the previous season was due to unusually hot and dry weather in some states, especially Parana and Mato Grosso do Sul, at the start of the growing season, which reduced productivity in areas hit by the bad weather. But farmers who planted later, and who work in areas unaffected by the heat, had higher than normal productivity, according to Flavio Franca Jr., an analyst at Datagro.

"At first things looked bad, then the situation improved and then it got a lot better," he said. "The soybeans planted in the last third of the season are in very good shape."

The trade conflict between the U.S., the world's biggest soybean grower, and China, the world's biggest consumer, has helped prices for the crop in Brazil. With the recent increase in trade tensions between those two countries, Brazil should benefit, Mr. Franca said.

"Our whole crop will be consumed, either by the Chinese, or here in Brazil," he said. "We started the year with very low stocks because of all the exports, and our crop is smaller this year, so there won't be a surplus."

The good weather toward the end of the season also is favoring corn production, Conab said. Brazilian farmers take advantage of the country's mild winters to plant two crops per year, often soybeans in the summer then corn in the winter.

Conab raised its forecast for corn production to 95.2 million metric tons from 94 million tons in April. In the 2017-2018 season, Brazil grew 80.7 million tons of corn.



USDA Accepting Applications to Help Cover Producers’ Costs for Organic Certification

USDA’s Farm Service Agency (FSA) announced that organic producers and handlers can apply for federal funds to assist with the cost of receiving and maintaining organic certification through the Organic Certification Cost Share Program (OCCSP). Applications for fiscal 2019 funding are due Oct. 31, 2019.

“Producers can visit their local FSA county offices to apply for up to 75 percent of the cost of organic certification,” said FSA Administrator Richard Fordyce. “This also gives organic producers an opportunity to learn about other valuable USDA resources, like farm loans and conservation assistance, that can help them succeed. Organic producers can take advantage of a variety of USDA programs from help with field buffers to routine operating expenses to storage and handling equipment.”

OCCSP received continued support through the 2018 Farm Bill. It provides cost-share assistance to producers and handlers of agricultural products for the costs of obtaining or maintaining organic certification under the USDA’s National Organic Program. Eligible producers include any certified producers or handlers who have paid organic certification fees to a USDA-accredited certifying agent. Eligible expenses for cost-share reimbursement include application fees, inspection costs, fees related to equivalency agreement and arrangement requirements, travel expenses for inspectors, user fees, sales assessments and postage.

Certified producers and handlers are eligible to receive reimbursement for up to 75 percent of certification costs each year, up to a maximum of $750 per certification scope, including crops, livestock, wild crops, handling and state organic program fees.



California Prohibits Chlorpyrifos 

In a move to protect workers, public health and the environment, the California Environmental Protection Agency (CalEPA) announced today that the Department of Pesticide Regulation (DPR) is acting to ban the use of the pesticide and toxic air contaminant chlorpyrifos in California by initiating cancellation of the pesticide.

CalEPA and the California Department of Food and Agriculture (CDFA) also announced that the Governor will propose $5.7 million in new funding in the May Revision budget proposal to support the transition to safer, more sustainable alternatives, and plans to convene a working group to identify, evaluate and recommend alternative pest management solutions.

“California’s action to cancel the registration of chlorpyrifos is needed to prevent the significant harm this pesticide causes children, farm workers and vulnerable communities,” said CalEPA Secretary Jared Blumenfeld. “This action also represents a historic opportunity for California to develop a new framework for alternative pest management practices.”

The decision to ban chlorpyrifos follows mounting evidence, including recent findings by the state’s independent Scientific Review Panel on Toxic Air Contaminants, that the pesticide causes serious health effects in children and other sensitive populations at lower levels of exposure than previously understood. These effects include impaired brain and neurological development.

In April, chlorpyrifos was formally listed as a “toxic air contaminant”, which California law defines as “an air pollutant which may cause or contribute to an increase in mortality or an increase in serious illness, or which may pose a present or potential hazard to human health.” The listing requires DPR to develop control measures to protect the health of farm workers and others living and working near where the pesticide is used.

DPR has determined, in consultation with CDFA, the Office of Environmental Health Hazard Assessment (OEHHA), and the California Air Resources Board (CARB), that sufficient additional control measures are not feasible.

As a result, DPR intends to move forward in a responsible manner by beginning the process of canceling the registrations for products containing chlorpyrifos, and at the same time, convening a cross-sector working group to identify safer alternatives to avoid replacing chlorpyrifos with an equally harmful pesticide.

DPR also will consult with county agricultural commissioners and local air pollution control districts before filing for cancellation. The cancellation process could take up to two years.

During the cancellation process, DPR’s recommendations to county agricultural commissioners for tighter permit restrictions on the use of chlorpyrifos will remain in place. These include a ban on aerial spraying, quarter-mile buffer zones and limiting use to crop-pest combinations that lack alternatives. DPR will support aggressive enforcement of these restrictions.

DPR and CDFA will convene a cross-sector working group to identify and develop safer and more practical and sustainable alternatives to chlorpyrifos, including the use of biological controls and other integrated pest management practices. They will also partner with growers as they transition from using chlorpyrifos to implement safer alternatives.

In addition, the Governor’s May Revision budget proposal includes $5.7 million in funding for additional research and technical assistance to support this effort. In combination, the working group and funding for alternatives will produce short-term solutions and prioritize the development of long-term solutions to support healthy communities and a thriving agricultural sector.

“We look forward to working with the Legislature through the budget process on the Governor’s proposal to support growers in the transition to alternative pest management,” said CDFA Secretary Karen Ross.

In 2015, DPR designated chlorpyrifos as a “restricted material” that requires a permit from the county agricultural commissioner for its application. In addition, application of chlorpyrifos must be recommended by a licensed pest control advisor and supervised by a licensed certified applicator.

The proposed cancellation would apply to dozens of agricultural products containing the pesticide. The pesticide has been prohibited by the U.S. Environmental Protection Agency for residential uses since 2001.

Chlorpyrifos is used to control pests on a variety of crops, including alfalfa, almonds, citrus, cotton, grapes and walnuts. It has declined in use over the past decade as California growers have shifted to safer alternatives. Use of the pesticide dropped more than 50 percent from two million pounds in 2005 to just over 900,000 pounds in 2016.



Spring deworming: a chance to reduce parasite challenges to improve herd health

Raising cattle in the Midwest poses a unique problem for producers at the end of every winter — how to reduce the economic drag of parasites on production during the coming year. It’s crucial to understand where the parasites live and how to get ahead of the problem with injectable parasite control before it’s time for turnout.

Parasites are, in effect, “that unseen money that you’re giving up,” said Dr. Brian Dorcey, veterinarian, beef technical services, Zoetis. “It’s a huge subclinical profit robber.”

Protect cows and calves from parasites
Stopping parasites starts with getting past a common misconception — that most parasites are in the cow’s gastrointestinal system — and understanding where they are located, with most of them in the grass, Dr. Dorcey said. And in spring, in the Midwest, the primary parasites that can infect a herd and impair a cow’s ability to gain weight are what Dr. Dorcey calls the “HOT complex” — Haemonchus, Ostertagia and Trichostrongylus spp.

“They’re the profit robbers,” he said.

But Dr. Dorcey also encourages producers and veterinarians to not forget about Cooperia and Nematodirus when developing a parasite control program, as these species can challenge calves later in the grazing season.

Dr. Dorcey likened the cows and calves in a herd to vacuum cleaners for an operation. With the vast majority of parasites in the grass, treating cows — and calves — with injectable parasite control before grazing offers the opportunity to proactively address the problem at turnout.

Dr. Dorcey stressed that calves should not be ignored when it comes to treatment, as they follow behind the cow and testing has shown calves sometimes have two to three times the fecal egg count as cows. It’s important to look at the whole animal unit.

Accurate weight drives accurate dosing
In Dr. Dorcey’s experience, many producers struggle to know the actual weight of their animals. He urges producers to avoid dosing based on averages — or what they believe is the animal’s weight.

“You need to know the weights and adjust accordingly, from the heaviest to the lightest weight animal,” Dr. Dorcey said. “We don’t want to underdose because it will impact the overall efficacy of the product.”

To learn more about injectable parasite control for your herd, contact your veterinarian or visit GetLessParasites.com for solutions from Zoetis.