Monday, August 19, 2019

Monday August 19 Ag News


For the week ending August 18, 2019, there were 4.5 days suitable for fieldwork, according to the USDA's National Agricultural Statistics Service. Topsoil moisture supplies rated 2 percent very short, 11 short, 77 adequate, and 10 surplus. Subsoil moisture supplies rated 1 percent very short, 10 short, 79 adequate, and 10 surplus.

Field Crops Report:

Corn condition rated 1 percent very poor, 6 poor, 19 fair, 59 good, and 15 excellent. Corn dough was 61 percent, well behind 86 last year, and behind 80 for the five-year average. Dented was 17 percent, behind 35 last year and 27 average.

Soybean condition rated 1 percent very poor, 5 poor, 22 fair, 62 good, and 10 excellent. Soybeans blooming was 93 percent, behind 99 both last year and average. Setting pods was 78 percent, behind 90 last year and 87 average.

Winter wheat harvested was 96 percent, near 100 both last year and average.

Sorghum condition rated 0 percent very poor, 1 poor, 18 fair, 70 good, and 11 excellent. Sorghum headed was 85 percent, behind 95 last year and 92 average. Coloring was 13 percent, well behind 40 last year, and behind 31 average.

Oats harvested was 94 percent, behind 100 last year, and near 96 average.

Dry edible bean condition rated 5 percent very poor, 18 poor, 20 fair, 50 good, and 7 excellent. Dry edible beans blooming was 92 percent. Setting pods was 75 percent.

Pasture and Range Report:

Pasture and range conditions rated 1 percent very poor, 3 poor, 13 fair, 65 good, and 18 excellent.

Iowa Crop Progress & Condition Report

 Much needed rain fell across parts of Iowa during the week ending August 18, 2019, according to the USDA, National Agricultural Statistics Service. Statewide there were 5.5 days suitable for fieldwork. Fieldwork activities included scouting, spraying fungicides and insecticides and harvesting hay and oats.

Topsoil moisture condition was rated 6 percent very short, 25 percent short, 67 percent adequate and 2 percent surplus. Rain this past week helped improve topsoil moisture conditions except for the southeast district which remained at 64 percent short to very short. Subsoil moisture condition was rated 4 percent very short, 23 percent short, 71 percent adequate and 2 percent surplus.

Nearly all the corn crop has begun to silk at 96 percent statewide. Fifty-nine percent of the crop reached the dough stage, 12 days behind last year and 9 days behind the 5-year average. Seven percent of the crop reached the dented stage, 2 weeks behind last year and 10 days behind average. Corn condition rated 65 percent good to excellent.

Ninety-three percent of the soybean crop has started to bloom, 2 weeks behind last year and 10 days behind average. Seventy-one percent of the crop has started setting pods, 17 days behind last year and nearly 2 weeks behind average. Soybean condition declined slightly from the previous week to 61 percent good to excellent.

Oats harvested for grain has almost wrapped up at 97 percent complete statewide.

The second cutting of alfalfa hay was nearly complete at 96 percent. The third cutting of alfalfa hay reached 36 percent, 9 days behind average. Hay condition rated 55 percent good to excellent.

Pasture condition declined for the seventh straight week and rated a season low 42 percent good to excellent. Comments mentioned pasture regrowth has been slow and supplemental hay feeding has been used due to drier than normal pasture conditions. Some livestock have struggled with continued temperature fluctuations.

Corn, Soybean Condition Down 1 Percentage Point

Good-to-excellent condition ratings for both U.S. corn and soybeans slipped slightly last week, according to the latest USDA NASS Crop Progress report released Monday.

As of Sunday, Aug. 18, the U.S. corn crop was rated 56% in good-to-excellent condition, down 1 percentage from 57% the previous week. That compares to last year's 68% and is the lowest good-to-excellent rating for this time of year in seven years. The crop's poor-to-very-poor rating category gained 1 percentage point to reach 14%.

Corn development remained behind its average pace last week. Ninety-five percent of the crop was silking, 5 percentage points behind the five-year average of 97%. Corn in the dough stage was estimated at 55%, up 16 percentage points from 39% the previous week but 21 percentage points behind the five-year average of 76%. That was little improvement from last Monday's report when corn in the dough stage was running 22 percentage points behind the average.  Corn dented was 15%, behind last year's 41% and 15 percentage points behind the five-year average of 30%.

Like corn, the condition of the soybean crop also fell 1 percentage point last week, from 54% good to excellent the previous week to 53% as of Sunday. That compares to the five-year average of 66%, and also remains the lowest rating since 2012.

The portion of the soybean crop that was blooming was 90%, 6 percentage points behind the five-year average of 96%. That was an improvement from last Monday's report when blooming was running 11 percentage points behind average. Soybeans setting pods reached 68% as of Sunday, 17 percentage points behind the average pace of 85%. That was also an improvement from last week's report, when soybeans setting pods were estimated at 22 percentage points behind the average pace.

Winter wheat harvest crept ahead another 4 percentage points last week to reach 93% complete as of Sunday, behind last year's 97% and 5 percentage points behind the five-year average of 98%.

Spring wheat harvest progress was up 8 percentage points from the previous week to reach 16% as of Sunday, well behind last year's 56% and 33 percentage points behind the five-year average of 49%. That was further behind normal than in last Monday's report when harvest was 22 percentage points behind average.  Spring wheat condition -- for the portion of the crop still in the field -- was estimated at 70% good to excellent, up 1 percentage point from 69% the previous week. Last year's rating at the same time was 74% good to excellent.

Sorghum heading reached 75% as of Sunday, behind the five-year average of 83%. Sorghum coloring was estimated at 31%, behind the average of 43%. Sorghum mature was estimated at 21%, behind the average of 26%. Sorghum condition was rated 65% good to excellent, down 1 percentage point from 66% the previous week. Oats were 60% harvested, behind the average of 78%.

Cotton setting bolls was 85%, equal to the five-year average. Cotton bolls opening was at 24%, ahead of the average of 13%. Cotton condition was rated 49% good to excellent, down 7 percentage points from 56% the previous week. Rice headed was pegged at 88%, behind the average of 93%. Rice harvested was 10%, slightly behind the average of 13%. Rice condition was rated 68% good to excellent, down 2 percentage points from 70% the previous week.

Ethanol Board offers fuel retailer training to install E15 blends and higher

Since the U.S. Environmental Protection Agency (EPA) lifted regulations against the sale of E15 throughout the summer months, the market and industry feedback has proven positive. For the first time ever, consumers driving 2001 or newer vehicles can access the fuel with up to 15% ethanol year-round. Because customers see a decrease in price, an average of 3-7 cents cheaper per gallon than E10, fuel retailers making room for E15 experience an increase in patrons.

“In 2017, our sales of E15 increased over 300 percent; in 2018, they went up another 225 percent,” said Randy Gard, COO of Grand Island-based Bosselman Enterprises. “And with the help of President Trump opening the door for year-round E15, our newest projections for this year show an increase of another 400 percent.”

Bosselman Enterprises operates 45 Pump & Pantry convenience stores in the state, and they have been offering E15 since 2016. Gard said sales growth has been tremendous and it is a huge market opportunity. He encourages other retailers to join the E15 movement to offer a better fuel, at a better cost, that’s better for the environment.

The biggest hurdle that often stops fuel retailers from adding higher ethanol blends is cost, but Roger Berry, administrator for the Nebraska Ethanol Board (NEB), said that might not actually be a hurdle at all. To help dispel these myths and to educate fuel retailers on the benefits and ease of offering E15, NEB will host a free workshop for fuel retailers Aug. 28 in Kearney, Nebraska. Attendees will hear best practices from fuel retailers who’ve seen success selling E15, a keynote from Ron Lamberty of American Coalition of Ethanol, and will learn about resources to make implementing and labeling infrastructure easy and affordable.

“There are a lot of misconceptions about the costs associated with adding E15 to the pump,” Berry said. “Many gas stations can begin to sell E15 with very little investment in their current infrastructure. If a pre-blended E15 is available at the rack where the fuel retailer sources their fuel, they can often times replace one of their current choices, such as an 89 octane mid-grade that they generally sell very little of, with very little to no investment. Of course they must have the Nebraska State Fire Marshall’s office out for an inspection prior to putting E15 in that tank and dispensing it through the dispenser. The retailer does not have to install the more expensive blender pumps in order to sell E15.”

Additionally, some of the burden can be relieved through a grant program from the Nebraska Corn Board, who will award qualifying retailers money for equipment and infrastructure to offer higher blends of ethanol fuel.

To sign up, fuel retailers should register by Aug. 23 at The workshop is free, and food and drink will be provided throughout the day.

The increase in E15 sales will provide an additional value-added market for Nebraska farmers and ethanol plants, who are experiencing many challenges this year. Weather, the strain of tariffs that have cut U.S. exports drastically, and the EPA’s indiscriminate approval of small refinery exemptions (SREs) are weighing heavily on the industry. Fuel retailers who offer E15 will not only be driving customers seeking lower costs and environmental change to their stores, they will have a real impact on Nebraska’s farmers and economy. 

Nebraska Farm Credit Mediation

J. David Aiken, NE Extension Water and Agricultural Law Specialist

Your lender informs you that your unpaid operating loan will not be renewed. What are your options? Loan foreclosure? Bankruptcy? One important option in Nebraska is farm credit mediation. This is when you and your creditor (or creditors) sit down with a trained mediator who tries to facilitate a compromise among the parties that avoids loan foreclosure and bankruptcy.

How does mediation work? Farm credit mediation in Nebraska operates under the Negotiations Program of the Nebraska Department of Agriculture. Mediation proceedings are confidential. To begin mediation you fill out an application form on which you list the creditors you wish to mediate with. You will have the option to request a financial counselor to assist you in preparing for mediation. This is a very important free benefit and you should use it. The financial counselor will take an in-depth look at your situation, help evaluate your overall financial picture, and look at debt restructuring and refinancing possibilities.

Within 40 days of applying for mediation you will have your first mediation session if your creditors agree to mediate–they are not legally required to. If you are a Farm Service Agency borrower, FSA will mediate, but you must meet the time deadlines included in the information you receive from FSA. Parties each pay $20 per hour for mediation session. You may bring an attorney or other advisor with you to mediation. Most mediation sessions are completed within 60 days of your application, and result in an agreement between the parties.

For more information, visit the Negotiations Program website or call 402-471-4876.

Types of Compromises

What type of compromises might be negotiated in mediation? This is where the benefits of the pre-mediation financial counseling come in. Hopefully you will have developed a strategy that can deal with your debts and allow you to continue operating. A farm credit mediation compromise might include one or more of the following:
·    Extending the loan term to lower loan payments
·    Lowering loan payments with a large balloon payment that requires the loan balance to be renegotiated or refinanced in the future
·    Giving creditors additional loan collateral (security)
·    Turning an annual operating loan into a separate fixed-term loan
·    Negotiating how to share the new crop revenue between existing and new creditors
·    Agreeing to turn property over to creditors in exchange for forgiveness of any unpaid loan balance

If you do negotiate a mediation compromise, it is essential to have the agreement reviewed by an attorney and also by your tax advisor. Mediation agreements include a two-week review period unless the review period has been waived by the parties. Turning property over to creditors may in some cases trigger capital gains income, debt-forgiveness income, or both. It is crucial to identify and understand the income tax consequences of your mediation agreement before it is too late to do anything about them.

What happens if one or more creditors are taking steps to foreclose on a loan? If this happens you need to contact an attorney immediately. One legal option is a bankruptcy court order to stop state foreclosure proceedings. This can provide time for the parties to negotiate a non-bankruptcy settlement. If you don’t have an attorney who has dealt with farm foreclosure issues, contact the Rural Response Hotline at 800-464-0258. Legal Aid Nebraska assists producers with agricultural credit issues, as do many Nebraska attorneys.

Farm credit issues can be difficult to deal with emotionally. Often producers wait too long to address these issues, at which point there are fewer good options available--often the result of declining land values. Helpful sources of information and assistance include:
·    Nebraska Rural Response Hotline at 800-464-0258 (financial, legal and family counseling services and referrals)
·    Farm Finance and Ag Law Clinics at 800-464-0258 (Watch CropWatch for each month's schedule. These free monthly clinics are sponsored by Nebraska Department of Agriculture Negotiations Program and deal with debtor-creditor issues and farm credit mediation.)
·    Negotiations Program at  402-471-4876 (mediation services for agricultural borrowers, creditors, and USDA program participants)

Note: This information is provided for educational purposes—it is not intended as legal advice.

Dairy-Based Experiences at the 2019 Nebraska State Fair Include Cooking Demonstrations and Dairy Princesses

More than 315,000 attendees will experience dairy in new, exciting ways at the Nebraska State Fair this year. From engaging in conversations with local dairy farmers to meeting the Nebraska Dairy Princesses and tasting gelato, root beer floats and mac and cheese, fairgoers will get a closer look at how dairy not only delivers enjoyment but is nutrient-rich and produced locally and responsibly by farmers who are highly dedicated to their work.

“We are excited about the 2019 Nebraska State Fair and all the exciting dairy-based experiences like the 4-H cooking contest that features dairy as the main ingredient, Chef Nadar Farahbod’s cooking demonstrations in the Raising Nebraska building and the milking demonstrations that will be held daily in the Milking Parlor.” said Kris Bousquet Midwest Dairy’s Nebraska State Fair project manager. “Attending these events will be a great opportunity to interact with dairy farmers and enjoy everything that’s delicious about dairy.” Farahbod is owner and executive chef of Billy’s Restaurant, one of the most successful restaurants in Lincoln, Nebraska.

The 4-H Cooking Contest in the Raising Nebraska Building features dairy as the main ingredient and will be held Saturday, August 31. Chef Nadar’s cooking demonstrations featuring recipes that combine dairy and pork ingredients will be held in the Raising Nebraska building from 12-2 p.m. Saturday August 24 and August 31, and Sunday August 25 from 12-1 p.m. Fair attendees can visit the Milking Parlor daily to watch live milking demonstrations.

Faith Junck, daughter of Dwayne and Priscilla Junck of Carroll and Whitney Hochstein, daughter of Neal and Sharlee Hochstein, will be available throughout the fair to meet fairgoers, answer questions about dairy farming and participate in the Dairy Livestock Show Award Ceremony. They both were crowned the Nebraska’s 2019 Dairy Princesses in Columbus at the Nebraska Dairy Convention in February. Junck and Hochstein were selected based on an application, essay, interview skills and ability to advocate for dairy farmers. They will spend the year serving as the official ambassadors for the state’s dairy farmers advocating and educating on their behalf. They will be making public appearances that include media interviews, classroom appearances, dairy events and fairs.

Delicious dairy foods will be front and center throughout the state fair at the Mac and Cheese Stand near the Nebraska Lottery Booth in Food Pod 5 and at eight different ice-cream stands located throughout the state fairgrounds.

Each year, the Nebraska state fair celebrates the more than 250 dairy farmers in the state who are contributing 17,000 jobs and an economic impact of 828.4 million. To learn more about dairy farming in the Midwest, including Nebraska, visit

Nebraska, Wyoming Farm Bureaus Urge USDA to Cover Crop Losses Associated with Irrigation Tunnel Collapse

The Nebraska and Wyoming Farm Bureaus are urging the United Stated Department of Agriculture (USDA) to ensure crop insurance will cover crop losses experienced by farmers impacted by the July 17 irrigation tunnel collapse that has prevented irrigators on the Goshen Irrigation District in Wyoming and the Gering-Ft. Laramie Irrigation District in Nebraska from receiving irrigation water during a critical time in the growing season.

In an Aug.16 letter to USDA Under Secretary of Farm Production and Conservation Bill Northey and USDA Risk Management Agency Administrator Martin Barbre, Nebraska Farm Bureau President Steve Nelson and Wyoming Farm Bureau President Todd Fornstrom urged the agency to “thoroughly examine the tunnel collapse” and “provide crop insurance coverage for those Nebraska and Wyoming farmers affected by the loss of irrigation.”

Questions have existed about whether federal crop insurance would cover associated losses due to the unknown surrounding the cause of the tunnel collapse. The USDA Risk Management Agency has yet to make an official decision.

“It seems this situation, which will cause considerable crop losses outside of the control of those who farm within the 100,000 plus acre area impacted, is precisely why federal crop insurance was created,” wrote Nelson and Fornstrom.

The disruption affects approximately 107,000 acres of crops, or about 35 percent of the total acres irrigated by surface water in the North Platte River Valley in both states. Approximately 55,000 acres are affected in Nebraska and 52,000 acres in Wyoming. With temporary repairs to the tunnel underway, it’s unclear as to when water will return to the system. The Universities of Nebraska and Wyoming recently issued a report noting the economic impact of the tunnel collapse could climb as high as $89 million if the loss of irrigation water results in a total crop failure.

Nelson and Fornstrom recently toured the affected area to visit with farmers and to see the tunnel collapse site.

“We can tell you the farmers we spoke to, who are already dealing with poor economic conditions, are relying on federal crop insurance to cover their losses. We hope the Risk Management Agency will use all its authority to protect the farmers who have been impacted by this disastrous event,” wrote the Farm Bureau leaders.

In Nebraska, a website has been established by Platte Valley Bank and the Oregon Trail Foundation as a relief fund for farmers impacted by the tunnel collapse. All funds will go towards the effort to restore water and support local affected agriculture families. Donations can be made at

In Wyoming, a donation account has been established at First State Bank to support the repair efforts in response to the irrigation canal collapse. One hundred percent of the donations will be allocated to the Goshen Irrigation District to support their work in repairing the tunnel and the canal damage. Donations can be sent to: First State Bank, P.O. Box 1098, Torrington, WY 82240. Checks should be made out to: Goshen Irrigation District Donation Account.

Due to the remote location of the tunnel collapse, the Goshen County Farm Bureau in Wyoming is also collecting donations to help cover food costs for tunnel repair workers. Daily food costs are in the rage of $500 to $600. To donate, checks can be made to the Goshen County Farm Bureau and mailed to Lori Schafer, 5858 Road 33, Veteran, WY 82243.

Nearly 17,000 Dairy Operations Enrolled in Dairy Margin Coverage Program

The U.S. Department of Agriculture (USDA) today announced that producers of nearly 17,000 dairy operations have signed up for the Dairy Margin Coverage (DMC) program since signup opened June 17. Producers interested in 2019 coverage must sign up before Sept. 20, 2019.

DMC offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

“We’re encouraged by the number of dairy producers who have signed up for this new program, but we are hopeful that we will get more folks in the door,” said Bill Northey, USDA’s Under Secretary for Farm Production and Conservation.“At this point in the signup process, we are well ahead of the number of producers covered at this time last year under the previous safety net program, with more producers enrolling every day. As we move into the homestretch, we expect more producers across the country to get coverage through DMC and our team at FSA is really going above and beyond to make sure we get the word out there, the returns this year to-date should speak for themselves.”

In June, when the DMC signup was announced, Secretary Perdue said, “For many smaller dairies, the choice is probably a no-brainer as the retroactive coverage through January has already assured them that the 2019 payments will exceed the required premiums.”

To date, more than 60 percent of dairies with established production histories have enrolled in the program. Wisconsin has seen the most participants with more than 4,832 dairy operations, followed by Minnesota (1,865), New York (1,779), Pennsylvania (1,511) and Michigan (702).

USDA’s Farm Service Agency (FSA) began issuing program payments to producers on July 11. DMC provides coverage retroactive to Jan. 1, 2019. The producers who have signed up to date will receive more than $219.7 million in payments for January through June, when the income over feed cost margin was $8.63 per hundredweight (cwt.), triggering the sixth payment for eligible dairy producers who purchased the $9 and $9.50 levels of coverage under DMC.

Dairy Industry Asks U.S. Government to Swiftly Secure Strong Trade Deal with Japan

In an effort organized by the National Milk Producers Federation and the U.S. Dairy Export Council, 70 dairy companies, farmer-owned cooperatives, and associations today sent a letter to the United States Trade Representative and the U.S. Secretary of Agriculture asking the U.S. government to capitalize on the conclusion of Japan’s national elections and quickly finalize a strong trade deal with Japan in order to secure critical market access for the dairy industry here at home.

“Given that Japan is an established market with a growing demand for dairy products, the successful negotiation of a robust trade agreement with Japan will bring a much-needed boost to the economic health of the U.S. dairy industry and set our industry up on a path to compete effectively there moving forward. Securing robust dairy export opportunities into this overseas market will be critical to restoring confidence for our dairy farmers and processors across the country,” they wrote.

The continued success of the U.S. dairy industry relies on stable export opportunities to markets abroad and Japan represents a major opportunity to expand growth. However, the Japan-EU agreement and the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) have allowed the European Union, New Zealand and Australia to position themselves to seize sales from the U.S. dairy industry. Swift negotiation of a trade deal with Japan that builds upon the best components of the Japan-EU agreement and the CPTPP is urgently necessary for America’s dairy farmers and processors.

“Eroding dairy competitiveness in Japan is at a critical point. The time to re-level the tariff and access playing field is right now,” said Stan Ryan, President and CEO of Darigold. “Today Darigold supplies over 50% of the US American-style cheese exports to Japan. Those sales will soon be lost as competitor trade deals take effect.”

“Japan has been a very important market for Leprino Foods Company’s US-produced products for years,” said Sue Taylor, Vice President of Dairy Policy and Procurement for Leprino Foods Company. “We invested heavily in developing lactose and whey protein exports several decades ago and, more recently, mozzarella exports into this important market and believe that the market has significant further growth potential.  We risk losing these sales and growth opportunities to competitors who recently finalized preferential trade agreements unless the US negotiates a strong agreement.  We are very supportive of the administration’s efforts to secure an agreement that allows us to retain and grow this important market.”

“Japan is an important market for Glanbia Nutritionals, where we have the opportunity to grow our dairy exports,” said Wilf Costello, Chief Commercial Officer for Global Cheese with Glanbia Nutritionals. “We are at an important juncture where our competitors have secure preferential trading terms that are impacting US dairy ambitions. To ensure we can deliver on the opportunity in Japan, we need our trade negotiators to quickly finalize a trade agreement that secures access for American dairy products and ample room to grow.”

The U.S. exported $270 million in dairy products to Japan in 2018 with room for further growth. However, without a strong U.S.-Japan trade agreement, half of U.S. dairy sales to Japan will be wrested by competitors, mounting to a toll of $5.4 billion in lost export sales when Japan’s deals with the EU and CPTPP are fully phased in.

July Milk Production in the United States up slightly

Milk production in the United States during July totaled 18.3 billion pounds according to USDA, up slightly from July 2018.  Production per cow in the United States averaged 1,969 pounds for July, 17 pounds above July 2018.  The number of milk cows on farms in the United States was 9.31 million head, 82,000 head less than July 2018, and 9,000 head less than June 2019.

Milk production in Iowa during July 2019 totaled 436 million pounds, down 1 percent from the previous July according to the latest USDA, National Agricultural Statistics Service – Milk Production report. The average number of milk cows during July, at 217,000 head, was the same as last month but down 3,000 from last year. Monthly production per cow averaged 2,010 pounds, up 15 pounds from last July.

Macroeconomic Volatility and Industry Specific Shocks Pressure Down Cattle Prices

Elliott Dennis, Extension Economist, Dept of Ag Econ, University of Nebraska - Lincoln

The cattle markets have been through a wild ride this week. Both the Tyson packing plant fire and USDA crop report has dominated market activity, commentary, and analysis. The news has caused downward pressure, in some cases limit down, on both fed and feeder cattle prices. This news is important, time sensitive, and will have both short- and long-run implications throughout the beef supply chain. However, even given this news the market's reaction should be interpreted in the context of the macro economy the cattle market was already operating in.

Trade disruptions and greater uncertainty about economic stability were two ongoing macroeconomic issues spilling over into the cattle markets. First, Chinese trade issues continued to weigh on the agriculture markets. Effects were seen in corn and soybeans spilling over into the cattle markets. The markets avoided a sell off when President Trump delayed tariffs on Beijing till December. Cattle markets saw a response with Chinese purchases towards the end of this past week. In absence of China, several negotiated trade deals have yet to be ratified by Congress. Combined, this has weighed down the domestic market. Second, trade issues caused prices to increase putting a squeeze on manufacturing margins. Faltering Q2 manufacturing and consumer company profits have sent signals of a looming recession. Other market signals tell a similar story. For example, the spread between Treasury yields, commonly used as a measure of economic recession, turned negative this past week -the first time since 2007. With a faltering economy, eyes have now turned to the Federal Reserve to see how they will react either with increased "quantitative easing" or adjusting the interest rates.

So what does knowing about all the instability in the macro economy before the crop report and Tyson fire issues tell us? First, the beef market will need to find additional homes for the beef on the market. More beef on the domestic markets will further depress prices. While beef was doing a decent job at finding internationals home, this trend will need to continue and, in some cases, increase. Second, while domestic demand has been strong there is greater uncertainty whether consumers will continue to have increasing disposable income in the future due to inflation. If inflation spills into the consumer goods market, then this could further depress derived demand prices.

Was the crop acreage report and Tyson fire important news this past week? Yes, it was. However, greater macroeconomic environment and trends will continue to larger players as they directly affect consumer's disposable income. This has the potential to lower demand which will then be passed down the beef supply chain through downward pressure on fed and feeder cattle prices.

Deere Announces Third-Quarter Net Income of $899 Million

Deere & Company reported net income of $899 million for the third quarter ended July 28, 2019, or $2.81 per share, compared with net income of $910 million, or $2.78 per share, for the quarter ended July 29, 2018. For the first nine months of the year, net income attributable to Deere & Company was $2.532 billion, or $7.87 per share, compared with $1.584 billion, or $4.82 per share, for the same period last year.

Affecting 2019 and 2018 results were charges or benefits to the provision for income taxes due to U.S. tax reform legislation (tax reform).

Worldwide net sales and revenues decreased 3 percent, to $10.036 billion, for the third quarter of 2019 and increased 5 percent, to $29.362 billion, for nine months. Net sales of the equipment operations were $8.969 billion for the quarter and $26.182 billion for nine months, compared with $9.286 billion and $25.007 billion last year.

"John Deere's third-quarter results reflected the high degree of uncertainty that continues to overshadow the agricultural sector," said Samuel R. Allen, chairman and chief executive officer. "Concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases. At the same time, general economic conditions remain positive and are contributing to strong results for Deere's construction and forestry business."

Company Outlook & Summary

Company equipment sales are projected to increase by about 4 percent for fiscal 2019 compared with 2018. Included in the forecast are Wirtgen results for the full fiscal year of 2019 compared with 10 months of the prior year. This adds about 1 percent to the company's net sales forecast for the current year. Also included is a negative foreign-currency translation effect of about 2 percent for the year. Net sales and revenues are projected to increase about 5 percent for fiscal 2019. Net income attributable to Deere & Company is forecast to be about $3.2 billion.

"In spite of present challenges, the long-term outlook for our businesses remains healthy and points to a promising future," Allen said. "We continue to expand our global customer base and are encouraged by response to our lineup of advanced products and services. Furthermore, we are fully committed to the successful execution of our strategic plan focused on achieving sustainable profitable growth. In support of the strategy, we are conducting a thorough assessment of our cost structure and initiating a series of actions to make the organization more structurally efficient and profitable."

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