Tuesday, August 6, 2019

Monday August 5 Ag News


Nebraska State Fair is honored to announce this year's Celebration Parade Grand Marshals. The Grand Marshal Program honors individuals who have made significant contributions within their county fair communities. As a salute to those who serve our country, an active member of the military has been chosen to help salute our veterans on Labor Day, Monday, Sept. 2.

"Each year, we select individuals who represent what it means to be dedicated to agriculture and their community," said Chelsey Jungck, State Fair Chief of Events and Entertainment. "These individuals continually go above and beyond and are worthy of our appreciation and distinction."

Grand Marshals are selected through a nomination process and are honored one day at the Fair.

Following is a list of the grand marshals:

Aug. 24: Jerry Fitzgerald, Gering, Neb.
Jerry served on the State Fair Board for many years and was a key player in moving the State Fair from Lincoln to Grand Island. As the Chairman of the State Fair in 2009, Jerry was instrumental in the construction of five buildings for Nebraska State Fair in Grand Island. In 2013, Jerry was recognized as the Friend of 4-H for his years of volunteering at the 4-H Livestock Sale and his crucial contributions in the design and building of the Scotts Bluff County Fairgrounds livestock pavilion.

Aug. 25: Jimmy Marak, Osceola, Neb.
Jimmy served on the Polk County Agricultural Society for more than 45 years. He was instrumental in building Ag Hall, Pinnacle Show Arena as well as the replacement of the grandstand bleachers at Nebraska State Fair. He has been a 4-H leader and the leader of the local Saddle Club. The Saddle Club was active in organizing and competing in local horse shows and rodeos, as well as providing entertainment for area parades.

Aug. 26: Brian and Ann Marie Bosshamer, Amherst, Neb.

Brian was an extension educator for Buffalo County and the leader of the 4-H program in Amherst, Neb. for more than 20 years. He was instrumental in implementing Lamb Camp, Life on the Farm and the Lottery Pig Show. Ann Marie volunteered countless hours coordinating and announcing at the Market and Class Shows for the Buffalo County Fair. The Bosshamers are involved with the 4-H sale committee at Nebraska State Fair as well as the Cattlemen’s Classic and Gateway Farm Expo.

Aug. 27: Jon and DeAnn Epley, Fullerton, Neb.

DeAnn was the office manager for the Nance County Extension for more than 35 years. Jon was instrumental in the development of the Shooting Sports Program for the Nance County community. Over the years, Jon and DeAnn have volunteered numerous hours helping with 4-H and the food stand at the Nance County Fair. In addition to their work with 4-H, the Epleys were founding members of the Nance County Veterans Memorial and Museum.

Aug. 28: Jess and Marilyn Johnson, Lincoln, Neb.
For the past 39 years, Jess and Marilyn Johnson have coordinated all supply requirements for the many competitive and livestock disciplines at Nebraska State Fair. Also, Marilyn has volunteered to help at the Lancaster County Fair for at least one day each year and continues to volunteer wherever help is needed to promote educational and agricultural programs in Lancaster County.

Aug 29: Oliver and Marjorie Johnson, Clarkson, Neb.

Oliver has served on the Colfax County Ag Society for more than 20 years. He is a former 4-H leader and fair superintendent. Marjorie assists in the Open Class areas of the Colfax County Fair. The Johnsons are past Pioneer Farm Family Award recipients. They were members of the Clarkson Czech Dancers for almost 50 years, performing at the annual Clarkson Czech Day and other Czech celebrations. 

Aug. 30: Richard and Marlene Hermelbracht, Bancroft, Neb. and Art and Arlene Rolf, West Point, Neb.

Richard Hermelbracht has been involved with the county fair throughout his life. He has served on the Cuming County Ag Society for the past 41 years. For the past 41 years, Richard has been the person to open the gates of the Cuming County Fair at 6 a.m. He and Marlene hire and oversee the gate personnel for the fair. Richard is a veteran and Marlene is active in the American Legion Auxiliary.

Arlene Rolf served as the secretary of the Cuming County Ag Society for 40 years. Arlene was instrumental in the development of the Cuming County Fair Sponsorship Program which has grown from five sponsors to over 100. Arlene is a member of the Cuming County Fair Foundation Board, which helps promote and raise monies for capital improvements.

Art Rolf is an integral part of the daily operations of the Cuming County Fair and helps coordinate the setup and cleanup of the fair. During the fair, Art can be found from open to close at the front gate taking admission and greeting everyone with a smile.

Aug. 31: Steve and Jana Kruger, Arlington, Neb.

Steve and Jana have served as horticulture superintendents at the Washington County Fair and Nebraska State Fair for 28 years. Steve has served on the State Fair board for 22 years, 14 of which were as president, and served more than 22 years on the State Fair Board. Jana served nine years on the State Fair Board, four of them as president. They originated the concept of the Grand Marshal Program at Nebraska State Fair.

Sept. 1: Jim and Sharon Specht, Hartington, Neb.

Jim has served on the Cedar County Fair Board for more than 24 years and is currently the vice president of the Cedar County Ag Society. For the past 6 years, Sharon has been chairman of the Cedar County Open Class Division and the county fair pie contest. Both Jim and Sharon spend countless hours before the opening of the fair cleaning the barns, setting up rodeo equipment and printing premium books for the open class exhibits. In 2017 Jim was selected for the NAFM’s Fair Person of the Year award. This past year, Sharon was selected as Cedar County Ag Society’s Outstanding Volunteer.

Sept. 2: Major General Daryl Bohac, Lincoln, Neb.
Major General Daryl L. Bohac serves as the Adjutant General, Nebraska National Guard in Lincoln, Neb. He is the senior uniformed National Guard officer responsible for formulating, developing and coordinating policies, programs, and plans impacting nearly 5,000 Army and Air National Guard personnel. He serves on the Governor's staff and is the Director of the Nebraska Military Department and the Nebraska Emergency Management Agency, respectively and serves as the state's official channel of communication with the National Guard Bureau to the Departments of the Army and Air Force.

"The grand marshal program is a long tradition for Nebraska State Fair, and we are proud of the outstanding individuals and families to honor each year," Jungck said.

There is Still Time to Donate to the Nebraska Farm Bureau Disaster Relief Fund

While there is still time to donate to the Nebraska Farm Bureau Disaster Relief Fund, we will be closing the fund on Aug. 15. Nearly $3.3 million has been raised, and 90 percent of the funds have been distributed to Nebraska farmers, ranchers, and rural communities suffering from the natural disasters that impacted the state in March, Steve Nelson, Nebraska Farm Bureau president said Aug. 5.

“As conditions slowly return to a new normal for Nebraska agriculture, it is our hope that the Nebraska Farm Bureau Disaster Relief fund has helped get farmers, ranchers, and rural communities back on their feet sooner. Nebraska Farm Bureau is equipped and ready to help if other disasters strike affecting farmers and ranchers,” Nelson said.

The Disaster Relief fund was established at the Nebraska Farm Bureau Foundation, a 501(c)(3) charitable nonprofit, so donations meet the criteria for qualified charitable contributions for tax purposes.

“With 90 percent of the funds distributed, the remaining amount will be dispensed by the Foundation’s 2019 fiscal year end, Sept. 30. It will be distributed on a rolling basis until 100 percent of donated funds have been expended,” said Megahn Schafer, executive director of the Nebraska Farm Bureau Foundation.

Nebraska Farm Bureau continues to work to ensure that government programs are accessible and working for those who need them the most.

“We continue to work with state and national leaders to do everything possible in dealing with disasters across the state. The floods and blizzards in March complicated life in Nebraska, and while the effects will likely be felt for months and in some case years, Nebraskans are resilient and will move positively forward,” Nelson said.

While donations to the Nebraska Farm Bureau Disaster Relief Fund will end Aug. 15, there are other ways to support continued disaster relief efforts. Donors interested in helping those affected by recent flooding in Central Nebraska or farmers in Western Nebraska who are without water for their crops because of a canal breach in Wyoming can learn more and make donations to the Kearney Area Community Foundation at www.paypal.com/cgi-bin/webscr or the Oregon Trail Community Foundation at www.otcf.org.

SHOULD YOU BE CONSIDERING SILAGE BAGS? Bagged Silage vs. Silage Bunkers & Piles

Steve Niemeyer – NE Extension Educator

Making silage is an effective way for many producers to best use the resources available to their operation. However, for some, spoilage and shrink can result in significant loss that can greatly increase the cost of silage fed and impact animal performance. Bagging of silage offers flexibility for operations of all sizes to produce silage while potentially reducing spoilage and shrink loss. The intent of this article is to create familiarity with the concept of bagging silage, describe the process, and outline some of the key advantages and disadvantages to this method of silage production.

How Does Silage Bagging Work?

In the bagging system, silage is packed into oxygen and light impermeable plastic sleeves for the ensiling process and long-term storage. The target moisture content for forage going into a bag is 30-40% DM, which is the same range for making silage in a bunker or pile. Silage bags come in many diameters and lengths to suit the needs of different operations; 8 ft in diameter and 150 ft long is a common small bag size. While density of silage impacts the capacity of a bag, this size will hold between 100-150 tons (as-fed).   Bags that are 10 ft diameter and 300 ft long are also commonly used and will hold between 350 to 450 tons (as-fed). The Silage Bag Capacity Guide from the University of Wisconsin can help you determine potential capacity of various sizes (bag diameter and length) and packing densities. 

Packing silage into the bags may be accomplished via pull-type or self-propelled baggers. For operations that plan to bag silage themselves, the pull-type is more affordable. Used models can be found for $20,000 to $40,000. Self-propelled silage baggers are typically owned by custom silage bagging operations or operations that make a lot of silage, since they are often 10 times the cost of pull-type baggers.

In the bagging process, silage is unloaded from a standard silage trailer onto a belt conveyor that carries it into the rotor of the bagger. From there, it is mechanically packed into the bag. Cables along each side of the bag run from the bagger to a backstop to allow for control of packing density. The bagger is moved forward by the operator as the bag fills and the desired density is achieved. Many video examples are available on the internet. When ready for use, silage is fed out of the bag in the same way it is fed from a traditional bunker silo.

What are the Advantages?

The primary advantage of bagging silage is that it reduces exposure to oxygen. This effectively eliminates the uncovered period between packing and covering the pile/bunker with plastic that occurs in a traditional system. In general, this period can result in about 5 to 7% loss (of the total amount of silage produced). For those who don’t have the labor to cover a bunker or pile, this can be an even bigger saving, with losses from surface spoilage ranging from 10 to 20% of the total silage. Those that use piles will see the biggest losses because they have more surface area exposed, and thus a greater advantage in switching to bagging. Beyond the shrink loss (disappearance of silage DM), the spoiled silage layer that remains when silage is not covered is about 22% lower in digestibility than unspoiled silage and appears to negatively affect the rumen environment. The Kansas State University study Effect of Level of Surface Spoiled Silage on the Nutritive Value of Corn Silage-Based Rations (2000) and UNL Beef Systems Specialist Dr. Mary Drewnoski’s Silage Guidelines Market Journal interview (2017) explain that feeding spoiled silage impacts rumen environment and digestibility of other feeds. Proper use of silage bags can help prevent feeding spoiled silage and the resulting disruption of rumen function. 

The other major advantage of bags is the small feed-out face, which minimizes feed-out spoilage. For many cow-calf operations and smaller backgrounding operations, the reduction in feed-out losses can be quite large upon converting their systems from silage bunker/piles to silage bags. When well-managed, feed-out losses in bunkers can be 3% or less. To achieve this, however, at least 5 inches need to be removed from the entire face each day in the winter and 8 inches in the summer. If removal rates are less, even with proper removal technique (keeping the face tight), a loss of 10% of the silage or more, depending on outside temperature, can occur.   These estimates don’t account for the loss of feeding value for the silage that remains.

What are the Disadvantages?

One of the chief concerns of silage bags is that, while they are impervious to oxygen and light, bags can be damaged. Holes and punctures must be sealed quickly and properly to avoid spoilage. Many bags come with repair kits, and specially designed vinyl repair tapes are widely available-- duct tape is unfortunately not acceptable for repairs since it is oxygen permeable. It takes skill and practice to successfully pack a smooth, dense bag, which places significant responsibility on the silage bagger operator to carefully monitor rate of filling. Some companies have created bags with lines that appear when stretched which allow for a quick visual estimate of fill to make this task easier.

Another less obvious complication is the disposal of used silage bags. You can check with your local waste disposal service, landfill, or Natural Resources District to inquire about recycling opportunities like this one in the Lower Republican District. Additionally, in Nebraska, Delta Plastics offers free pickup of used bags provided they are rolled tightly and surpass 40,000 lb. (20 tons) of plastic. It is preferred that the bags are loaded in a box van. Delta Plastics designated pickup locations in the state include Scottsbluff, Bridgeport, Minden, Gibbon, Chapman, and York. Contact Delta Plastics at (800) 277-9172 or recycling@deltaplastics.com for more information.

·    Bagging silage can reduce spoilage/shrink loss, especially for those that do not cover their silage bunkers or piles with plastic.
·    Switching to bags can reduce feed-out losses and improve the feed value of silage. This is especially true for those that do not remove 5 to 8 inches of silage off the face of the bunker or pile each day when feeding.


The combined benefit of all Cattlemen’s Beef Board (CBB) programs is 11.91 times more valuable than their costs. That is one major finding from a recent third-party, return-on-investment (ROI) study commissioned by the national Beef Checkoff program and conducted by Dr. Harry M. Kaiser of Cornell University.

Completed in June 2019, the study is based upon an econometric model which quantifies the relationship between the CBB’s various marketing activities and domestic and international demand for U.S. beef. It also compared the costs and benefits of those activities relative to producer and importer investments in the national portion of the Beef Checkoff program.* Under existing agricultural legislation, the CBB is required to have an independent analysis of the program’s economic effectiveness conducted at least once every five years. 

“We’re extremely pleased with the results of this latest ROI study,” said Chuck Coffey, a cow/calf producer from Springer, OK who currently serves as CBB chairman. “Our primary goal is to increase beef demand worldwide. The statistics uncovered by this study tell us that we’re achieving that goal and providing producers with an excellent return on their national checkoff investments.”  

The study’s other key findings include:
-    CBB activities have a substantial impact on beef demand in the U.S. and in foreign markets.
-    CBB activities increased beef demand by 2.6 billion pounds per year between 2014-2018.
-    Without a national checkoff, U.S. beef demand would have been 14.3% lower than it actually was by the end of 2018
-    CBB’s investment in export marketing programs increased U.S. beef exports by 5.5%
-    CBB-funded activities generated $11.91 in additional net revenue for beef producers and importers.
-    All nine demand-enhancing CBB activities – beef advertising, public relations, beef safety research, channels marketing, nutritional research, industry information, new-product development, product-enhancement research and foreign-market development – had a positive and statistically significant impact on increasing beef demand.

The study estimated three econometric questions: (1) retail domestic beef demand, (2) retail domestic beef supply and (3) U.S. beef import demand. The study’s domestic model also factored in consumer income, while the foreign-demand model factored in exchange rates and gross domestic product (GDP). It also evaluated the CBB’s expenditures in each of its demand-enhancing activities.

The previous ROI study, which Dr. Kaiser conducted in 2014, found that CBB programs were 11.20 times more valuable than their costs. The 2019 study’s ROI calculation of 11.91 shows that CBB programs have continued to provide significant value over the past five years by steadily building beef demand.

“While we are happy that CBB programs are successfully promoting beef, we know that there’s always room for improvement,” Coffey said. “Our board members are dedicated to making the best possible decisions on behalf of American beef producers and importers. As we head into our next fiscal year, we hope to take what we’ve learned in 2019 and continue moving the needle forward.”

To view the complete ROI study, a summary of the study or get more information about the Cattlemen’s Beef Board, as well as the Beef Checkoff and its programs – promotion, research, foreign marketing, industry information, consumer information and producer communications – visit beefboard.org.

Strong Finish to First Half for U.S. Pork, Beef Exports

U.S. pork and beef exports were above year-ago levels in both volume and value in June, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Led by a rebound in Mexico and China, pork export value was the highest in 14 months, while strong results in South Korea and Taiwan pushed beef export value to the fourth-highest total on record.

June pork exports posted double-digit gains in both volume and value, reaching 212,887 metric tons (mt), up 11% year-over-year, valued at $569.2 million (up 12%). For the first half of 2019, pork exports remained 2% below last year in volume (1.25 million mt) and were down 6% in value to $3.14 billion.

Pork export value averaged $56.99 per head slaughtered in June, up 7% from a year ago and the highest monthly average since April 2018. First-half export value averaged $50.05 per head, down 9% from the same period last year. June exports accounted for 27.8% of total U.S. pork production and 24% for muscle cuts only, up from 25.8% and 22.4%, respectively, a year ago. For January through June, exports accounted for 25.8% of total pork production (down from 27.3%) and 22.4% for muscle cuts (down from 23.6%).

Beef exports were up 3% year-over-year in June to 118,677 mt. Export value ($724.8 million) increased just 1% from a year ago but trailed only August 2018, May 2019, and October 2018 for the highest monthly value total on record. First-half beef exports were down 2% from a year ago in volume (648,765 mt) but held steady with last year's record value pace at $4.03 billion.

Beef export value per head of fed slaughter averaged $325.10 in June, up 4% from a year ago, while first-half export value averaged $312.06 per head, down 2%. June exports accounted for 15.4% of total U.S. beef production, up nearly a full percentage point from last year. For muscle cuts only, exports accounted for 12.7% of production — up from 12.3% last year and the highest ratio since July 2018. For the first half of the year, exports accounted for 14.2% of total production and 11.6% for muscle cuts — down from 14.6% and 11.9%, respectively, a year ago.

Duty-free access bolsters pork exports to Mexico; China's volume highest in three years

On May 20, the 20% retaliatory duty on most U.S. pork exports to Mexico was removed as the U.S., Mexico and Canada reached an agreement on steel and aluminum tariffs. Entering Mexico duty-free for the first time in nearly a year, June exports to Mexico were the largest since January at 59,837 mt (steady year-over-year), while value climbed 13% to $119 million — the highest since April 2018.

"It's a tremendous relief to have Mexico's retaliatory duties on U.S. pork behind us, as the June bump in export value clearly illustrates," noted USMEF President and CEO Dan Halstrom. "Now the goal is to get back to the record-setting trend the U.S. industry established in Mexico from 2012 through 2017, prior to the metal tariff dispute. USMEF's marketing programs have ramped up in Mexico so that we can recapture lost market share and regain momentum in this critical market for U.S. pork."

Despite retaliatory duties remaining in place, June also brought an encouraging rise in pork exports to China, which were the largest in more than three years at 41,704 mt (up 123% year-over-year), valued at $88.5 million (up 77%). This pushed first-half exports to China 23% ahead of last year in volume (177,060 mt) and 3% higher in value ($353.1 million). For the China/Hong Kong region, first-half exports were up 4% to 224,009 mt but value declined 16% to $427.8 million. The European Union remains the primary pork supplier to China/Hong Kong. Through May, EU exports to the region were 859,030 mt, up 27% year-over-year, valued at $1.57 billion (up 34%). China/Hong Kong has accounted for 52% of EU export volume in 2019, compared to 18% of U.S. exports.

All of U.S. pork and beef's major competitors gained tariff relief in Japan this year through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the economic partnership agreement between Japan and the European Union, making red meat trade a major focus of the U.S.-Japan trade agreement negotiations that continued last week. Japan is the leading value destination for U.S. pork, and June exports were steady with last year in both volume (31,742 mt) and value ($131.5 million). For the first half of the year, exports to Japan were 4% below last year's pace in volume (191,281 mt) and down 6% in value ($773.5 million). Japan's imports of chilled U.S. pork were down just 1% in volume (100,869 mt) and 2.5% in value ($481 million), but imports of U.S. ground seasoned pork (GSP) fell 24% to 41,769 mt, with value down 33% at $109.5 million. U.S. share of Japan's GSP imports was 58%, down from 67% last year and nearly 75% in 2017.

Other first-half highlights for U.S. pork include:

-    Despite a June slowdown, first-half exports to Colombia were still up 20% from a year ago in volume (55,148 mt) and 13% in value ($118.8 million). Combined with excellent growth in Chile and Peru, exports to South America climbed 35% above last year's record pace in volume (84,032 mt) and 34% higher in value ($205.4 million).
-    Australia is one of U.S. pork's top-performing markets in 2019, with first-half volume up 44% to 56,338 mt and value increasing 32% to $150.1 million. With exports to New Zealand also increasing significantly this year, exports to Oceania climbed 43% from a year ago in volume (61,597 mt) and 32% in value ($166.4 million).
-    In Central America, where pork exports also set new records in 2018, first-half volume was up 11% to 44,614 mt while value increased 12% to $106.8 million. Exports to leading market Honduras were up slightly from a year ago, while strong growth was achieved in Guatemala, Panama, Costa Rica and Nicaragua.

Korea, Taiwan lead beef export growth; variety meat exports rebound

Last year South Korea surpassed Mexico as the second-largest destination for U.S. beef exports, and in 2019 it continues to close the gap on leading market Japan. Exports to Korea remained on a record pace in June, increasing 2% from a year ago to 25,118 mt (a post-BSE high), while value climbed 15% to a record $178.3 million. These results pushed first-half exports to Korea 12% above last year in volume (126,879 mt) and 15% higher in value ($921.8 million). U.S. beef now accounts for 61% of Korea's chilled beef imports, up from 57% in the first half of last year, with chilled volume increasing 7% to 26,537 mt.

Beef exports to Taiwan finished a very strong second quarter with June shipments reaching a new monthly high of 6,654 mt, up 40% from a year ago, valued at $58 million (up 46% and the second-highest on record). First-half exports to Taiwan were 16% above last year's record pace in volume (31,132 mt) and 11% higher in value ($276.2 million).

As noted above, U.S. beef faces a significant tariff rate disadvantage in leading market Japan, where June exports totaled 29,794 mt, down 4% year-over-year, while value was down 7% to $179 million. For the first half of the year, exports to Japan were 1% below last year's pace in both volume (157,839 mt) and value (just over $1 billion). Japan's imports of Australian beef have also slowed this year, but first-half imports from Canada, New Zealand and Mexico were up 83%, 37% and 28%, respectively, offering a glimpse of the upside opportunities in the market when tariff rates are lowered.

"It is very gratifying to see U.S. beef posting such remarkable gains in Korea and Taiwan, and the $2 billion milestone could even be in play this year for Korea," Halstrom said. "Exports to Japan can definitely achieve a similar trajectory if the U.S. can get back on a level playing field with our competitors, so we are encouraged by the progress in the U.S.-Japan trade negotiations."

Other first-half highlights for U.S. beef include:

-    June exports of beef variety meat were the largest in two years at 28,195 mt, up 13% from a year ago, while value also climbed 13% to $79.7 million. This pushed first-half export volume even with last year at 158,466 mt while value increased 8% to $472.9 million. The large June increase was primarily driven by growth in Japan and Indonesia, while exports to Egypt rebounded from last year's low levels.
-    Though first-half export volume to Mexico was down 3% year-over-year to 114,541 mt, export value increased 6% to $539.1 million. Beef muscle cut exports to Mexico slowed in June but still finished the first half up 4% from a year ago in volume (70,333 mt) and 8% in value ($422 million).
-    U.S. beef muscle cuts also have a rapidly growing presence in Colombia, where first-half muscle cut exports increased 29% from a year ago in volume (1,919 mt) and 36% in value ($11.2 million). Combined beef and beef variety meat exports to Colombia were up 1% from a year ago to 2,991 mt while value climbed 27% to $12.4 million. First-half exports to Chile, the top South American market for U.S. beef, increased 5% to 6,144 mt, with value up 7% to $34.3 million.
-    The Dominican Republic has emerged as a strong growth market for U.S. beef, with first-half exports soaring 57% above last year's record pace in volume (4,524 mt) and gaining 47% in value to $36.2 million.
-    Fueled by strong growth in the Philippines and Indonesia, first-half exports to the ASEAN region increased 23% from a year ago in volume (26,711 mt) and 8% in value ($132.4 million).

U.S. lamb exports remain well ahead of 2018 pace

June exports of U.S. lamb totaled 1,073 mt, up 6% from a year ago, but value fell 21% to $1.73 million. For the first half of 2019, lamb exports were up 42% year-over-year in volume (7,783 mt) and 17% in value ($13.2 million). Mexico has been the primary growth driver for U.S. lamb, with first-half exports to Mexico climbing 52% from a year ago in volume (6,762 mt) and 33% in value ($6.7 million). Exports also showed promising growth in the Dominican Republic, Bermuda, Panama and Guatemala.


The National Corn Growers Association today submitted comments to the U.S. Department of Agriculture on the Proposed Rule regarding Movement of Certain Genetically Engineered Organisms. The submission voiced support for the proposed rule while also offering several suggestions that would strengthen the final rule. The proposed rule marks the first comprehensive revision of USDA’s regulations since they were established in 1987.

Corn farmers have a strong interest in the availability of new technologies to enhance the sustainability, productivity and competitiveness of U.S. agriculture. Agriculture biotechnology and next generation breeding techniques allow growers to increase yields while decreasing inputs. Meeting demand, improving processes and minimizing environmental impacts are what make modern corn production a dynamic industry. The proposed rule, in large part, demonstrates an underlying agreement with the basis of NCGA’s stance and strives to create a more efficient regulatory process allowing growers greater access to new products.

NCGA praised USDA’s intention to focus on the plant pest risk of each product, instead of the method used to create it.  NCGA also thanked USDA for its proposal to only review plant-trait-mechanisms of action (MOA) requiring oversight once, instead of each time that MOA is used in combination with other traits, as is the requirement now. The proposed rule indicates a path moving forward appropriate for the advancements in plant breeding innovation while ensuring a responsible degree of oversight. To further build upon this foundation in the rule, NCGA requested explicit and formal language be added to ensure this system functions in a timely and reliable manner that adds no additional barriers for previously approved plant-trait mechanisms.

The comments submitted urged the USDA to coordinate with the U.S. Environmental Protection Agency and the Food and Drug Administration broadly on the regulation of ag biotechnology to continue streamlining the process and avoiding unnecessary duplications that delayed the tools farmers need to meet today’s needs. NCGA referenced the June 11, 2019 Executive Order, Modernizing the Regulatory Framework for Agricultural Biotechnology Products, which asks the three regulatory agencies to identify ways to streamline regulatory processes, when making this request.

ACE conference holding timely discussions on strategies for ethanol producers to overcome the margin squeeze

The American Coalition for Ethanol (ACE) annual conference, August 14-16, will host a timely general session discussion on ways for ethanol producers to diversify their revenue stream through coproducts, considering the margin squeeze many ethanol plants are facing today. Join ACE at the Omaha Marriott Downtown at the Capitol District next week to hear from leading technology providers and producers on strategies available for ethanol plants to become more efficient and remain profitable.

Several articles published recently about poor profit margins at ethanol plants, one citing a CoBank report, noted how low margins drive plants to diversify revenue through coproducts, “The ethanol plant of today could turn into the corn biorefinery of tomorrow.” This important topic will be covered during several conference breakout sessions, as well as the general session panel “Steps to a Biorefinery,” with speakers from Fluid Quip Technologies (FQT), ICM Inc., and ACE member plant Golden Grain Energy (GGE), moderated by consulting firm Ascendant Partners Inc.

“In the current environment, producers must make critical decisions related to maximizing short- and long-term profitability,” said Steve Hartig, ICM Inc. Vice President of Technology Development. “Producers should view ethanol plants as true biorefineries and implement processes to capture the most value possible from the ethanol, animal feed and corn oil streams. Reducing costs and maximizing plant efficiency, while important, will not be enough long-term. Other options must be considered, including the addition of value-added product offerings by the plant.”

“Diversification of revenue is paramount for the industry today and to be truly sustainable now and well into the future,” said Neal Jakel, Vice President of Strategy and Technology Development at FQT. “Our partners operating our MSC™ protein systems are averaging 10 to 17 cents per gallon EBITDA which is critical when ethanol margins are tight. MSC is a robust technology, producing an established consistent product that plants can look to for proven revenue and risk diversification today,” Jakel added.

“The world has seen an increased demand for plant-based protein in recent years,” said Chad Kuhlers, GGE COO. “By 2050, global demand is expected to increase 80 percent over current levels due to population growth in African countries and increased wealth in Asia. It is important for ethanol producers to recognize this trend and help to supply the world’s protein demands by further refining and processing their coproducts to not only meet world demand, but also add value to their coproducts,” Kuhlers added. “These facilities need to be viewed as a biorefinery and every aspect of the facility needs to be optimized to capture as much value as possible.”

Visit ethanol.org/events/conference to view the full agenda and register.

Forward Contracting Activity

Matthew Diersen, Risk & Business Management Sp., South Dakota State University

Seasonally, mid-summer is a relatively quiet time at most feeder cattle auctions. An exception are video and satellite sales, which often include feeder cattle for later delivery. In recent years sales volumes during July and August have been similar across fixed and video auction sites. For perspective, annual volume in 2018 was 10.7 million head at regular auctions and 2.0 million head at video auctions. An examination of recent prices of forward sales may give an indication of eventual cash prices and basis levels. Note that forward sales would be excluded from the CME Feeder Cattle Index.

Consider the recent sale at Northern Livestock Video Auction from July 22-24, 2019, which included a large volume of cattle from Northcentral states. There was just over 1,000 head of steers for current delivery. The rest of the volume was for delivery from August through January. Sales with November delivery dates are predominantly of calves and thus the expected weights are lower than the standard feeder cattle contract weight span, which is 700-899 pounds. There were 2,244 head averaging 531 pounds that sold for $171.75 per cwt and 1,327 head averaging 571 pounds that sold for $160.88 per cwt.

Rounding the difference suggests 500-599 pound calves may sell for $166 per cwt in November. Because November feeder futures traded around $142 per cwt during the auction period, the implied basis or price difference is $24 per cwt. A year earlier, the same auction had sales of 500-599 pound steers with an average price of $186 per cwt and an implied basis versus November of $32 per cwt. The basis calculation disguises the fact that the implied spread between calf and feeder values is currently wider per head compared to 2018, likely reflecting higher expected corn prices and stable hay prices. August auctions could be monitored to see if the patterns of lower prices and narrower basis levels hold.

Forward contract volumes for fed cattle are less seasonal, but the total volume fluctuates through time. July is seasonally a low period for forward contract cattle being delivered. The longer trend for total volume contracted has been relatively low for much of the past year, but has started to shift higher. Currently there are 1,523,309 head of fed cattle contracted through November of 2020. The volume is higher than a year ago at this time with most of the increase in the front six months. However, there was very little volume in front months last week. In other words, feedlots and packers have priced more cattle for delivery by year-end than they had at this point last year. Basis levels vary by month. Basis for December delivery averaged -$4.32 last week, while a year ago it averaged -$5.35. Without knowing the source locations, the basis should be used a rough indicator of price trends. The basis distribution bears this out, the contracts for January 2020 delivery signed last week ranged from -$20.00 to $3.50, with most of the volume trading at -$0.50 basis the February contract.

Elanco Acquires Canadian Vaccine Maker

Elanco Animal Health Inc. has acquired a Canadian biotech startup that specializes in vaccines for food animals. Elanco announced last week it acquired Montreal-based Prevtech Microbia Inc. in an all-cash deal of nearly $60 million.

The two companies already had a relationship as Elanco has exclusive rights to distribute a product line of swine vaccines called Coliprotec in Canada and Europe.

Coliprotec vaccine products are designed to protect pigs against post-weaning diarrhea (PWD) and associated clinical signs caused by E. coli. E. coli is a highly prevalent pathogen causing disease in swine production without effective non-antibiotic control options. It affects up to 50 percent of all weaned pigs, leading to diarrhea, suppressed appetite, weight loss and mortality. The disease has a considerable effect on animal well-being and is a major cause of economic loss for swine operations. In Europe, mortality due to PWD has an estimated cost of 15,000 € per year for a 500-sow herd.1

"Elanco's partnership with Prevtec has been very successful and has resulted in delivery of an important non-antibiotic solution for swine producers," said Ramiro Cabral, executive vice president of International for Elanco. "This acquisition is another example of our approach to partner with companies to introduce novel innovation and further demonstrates our commitment to introduce antibiotic alternatives through internal or external innovation pathways."

"We are very pleased to come up with this agreement which sums up our combined efforts and early commitment to bring biological products to our industry," said Michel Fortin, president and CEO of Prevtec Microbia. "Our distribution agreement thus culminates in this exciting opportunity to provide actual and future vaccines to the animal health industry."

Elanco was the exclusive distributor for Coliprotec in Canada and Europe. These vaccine products are particularly important in Europe given the EU's direction to phase out the use of the antibiotic colistin and zinc oxide, both among the ways producers' protect against E.coli today. The transaction also brings Prevtec's research and development programs to Elanco's pipeline.

By acquiring Prevtec and bringing the Coliprotec line into Elanco's swine portfolio, Elanco will look to expand registration to other key geographies. Offering a full range of alternative solutions is particularly important given alternatives do not typically have the same broad spectrum of activity antibiotics deliver. With more than 1 billion pigs marketed globally each year, pork is the most widely consumed protein and a significant market opportunity.

Under the terms of the agreement, Elanco acquired the company, including inventory and pipeline assets in an all-cash deal for CAD $78.5 million (approx. $59.9 million USD). The agreement also includes a contingent payment of up to CAD $21.5 million (approx. $16.4 million USD) to the former Prevtec shareholders in Q1 2022, if certain sales milestones are achieved in 2021.

The New York Times: All the News That's Fit to Print...and Left on the Cutting Room Floor

On Sunday, Aug. 4, 2019, New York Times readers were treated to a wildly inaccurate and one-sided news story, commonly called a hit piece, about a 2015 salmonella outbreak in Washington State from tainted pork. The reporter misrepresented our industry, twisting comments to paint an essentially pre-determined narrative without regard for the truth.

The U.S. pork industry prides itself on having strict on-farm biosecurity protocols, demonstrated progress in responsible antibiotics use and a strong food safety record. Excellent animal care is imperative to produce healthy food for consumers. It's a shame the reporter presented none of this in the story.

The U.S. pork industry takes animal care and food safety very seriously and has demonstrated its commitment to responsible antibiotic use. Salmonella and other food safety cases are extremely rare.

Here are key facts omitted from the story:

Responsible Use of Antibiotics
-    U.S. pork producers supports and complies with U.S. Food and Drug Administration (FDA) regulations on the use of medically important antibiotics only to treat sick animals or those at risk of becoming sick and with veterinary oversight. This FDA report reflects declining use of antibiotics in pork production.
-    When antibiotics are used, farmers follow withdrawal periods set by FDA before marketing their animals.
-    The U.S. Department of Agriculture (USDA) tests for residues to confirm that meat is free of any harmful level of antibiotics. In March 2019, USDA's Agricultural Research Service reported that a survey of more than a thousand pork kidney samples found almost no veterinary drug residues and none at levels that even approached U.S. regulatory limits.
-    U.S. pork producers support veterinary oversight of antibiotic uses and objectives, scientifically rigorous studies and risk assessments to help farmers make informed decisions about the use of antibiotics in food animals.
-    The article also incorrectly mentions there is no information on antibiotic use on farms. In fact, the FDA is releasing such a report on Monday. The information will be based on a large sample population and highlights that the U.S. pork industry has farmers who produce a large proportion of pigs marketed in the U.S. that are voluntarily providing information to a government agency.
-    The National Pork Producers Council (NPPC) is working with the USDA and the FDA to develop plans to continue to collect more detailed data on how antibiotics are used in food-animal production and to better understand the epidemiology of antibiotic resistance.

On-Farm Testing
-    NPPC and other agriculture groups have created a working group with USDA and state animal health inspectors and salmonella experts to determine investigation goals and effective protocols for visiting farms during a salmonella or other antibiotic resistant pathogen outbreak investigation. USDA has a memorandum of understanding with the Centers for Disease Control and Prevention (CDC) to work on these issues. There is ongoing communication between CDC and agricultural groups discussing antibiotic resistance issues.
-    In September 2018, NPPC made commitments to the "AMR Challenge," an initiative led by CDC and the U.S. Department of Health and Human Services to bring together pharmaceutical and health insurance companies, food animal producers and purchasers, medical professionals, government health officials and leaders from around the world to collaborate on efforts to address antibiotic resistance. This global initiative will create international standards and codes of practices to prevent unsafe residues of veterinary drugs in food, develop integrated surveillance that can help mitigate risks associated with antibiotic use and minimize the development and spread of antimicrobial resistance in humans and animals.

Industry Input Ignored
-    The New York Times reporter spoke with NPPC Chief Veterinarian Liz Wagstrom approximately a year go for this story. He cites her as saying that visiting hog farms wouldn't yield valuable information in cases like the salmonella case profiled. He failed to include key comments made by Dr. Wagstrom. Specifically, she noted that the salmonella case profiled in the story began in April of 2015 and CDC wanted to start the investigation in August of that year—four months later. After that amount of time, it would be impossible to gather data to draw any reliable conclusions in the case.
-    When contacting NPPC on Friday, the New York Times reporter acknowledged he had lost notes reflecting pork industry input for this story from interviews he conducted approximately a year ago. Perhaps that explains the one-sided nature of this story.

The U.S. pork industry provides the highest quality, safest pork in the world. It's a shame The New York Times didn't provide the full picture to its readers.

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