Thursday July 16 Ag News

Rural Mainstreet Index Climbs for July: Bankers Expect Farm Loan Defaults to Rise 5%

The Creighton University Rural Mainstreet Index (RMI) increased to a weak level from June’s frail reading. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, July’s reading represented the fourth straight month with a reading indicating recessionary economic conditions.     

Overall: The overall index for July climbed to 44.1, well below growth neutral, but up from June’s 37.9 and April’s record low 12.1. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Farm commodity prices are down by 12.5% over the last 12 months. As a result, and despite the initiation of $16 billion in USDA farm support payments, only 6% of bankers reported their area economy had improved compared to June while 17.6% said economic conditions had worsened,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. 

Farming and ranching: Farmland prices continue to slide, with a July reading of 45.6, down from June’s 46.8. This is the 79th time in the past 80 months the index has been below growth neutral.

Falling agriculture commodity prices and farm income have failed to diminish annual farm rents per acre. This month bank CEOs reported average per acre farmland rents of $220 which is almost unchanged from that detailed earlier this year, and four years ago.

The July farm equipment-sales index increased to a weak 34.4 from 32.8 in June. This marks the 82nd straight month the reading has remained below growth neutral 50.0. 

Banking: Borrowing by farmers expanded for July, but at a slower rate than in June. The borrowing index fell to 57.4 from June’s 63.6. The checking-deposit index declined to 64.7 from June’s 77.3, while the index for certificates of deposit and other savings instruments increased to 52.9 from 51.5 in June.     

This month, bankers estimated that farm loan defaults would rise by 5% over the next 12- month period. This is up slightly from 4.8% registered one year ago.

Approximately 38% of bankers reported a decline in customer visits due to the coronavirus. Almost one-third of bank CEOs indicated that the coronavirus had reduced the number of farm loan applications.

Below are the state reports:
Nebraska: The Nebraska RMI for July jumped to 49.3 from 41.8 in June. The state’s farmland-price index declined to 48.0 from last month’s 49.1. Nebraska’s new-hiring index jumped to 64.0 from June’s 59.4. Compared to the pre-COVID-19 level, the Nebraska Rural Mainstreet economy is down by 14,000 jobs, or 4.9%. 

Iowa: The July RMI for Iowa increased to 43.1 from June’s 39.4.  Iowa’s farmland-price index grew to 49.2 from June’s 48.3. Iowa’s new-hiring index for July fell to 43.4 from 51.9 in June.   Compared to the pre-COVID-19 level, the Iowa Rural Mainstreet economy is down by 57,000 jobs, or 8.6%.  Jim Eckert, president of Anchor State Bank in Anchor said, “Our immediate area is in a dry pocket again this year. Crops look good but are under severe stress due to lack of rain.”

Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities, and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.  

This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.



POLL: MOST RURAL NEBRASKA COMMUNITIES HARMED BY SEVERE WEATHER IN 2019
A majority of rural Nebraskans surveyed said their community was harmed by extreme weather events in 2019, according to the 2020 Nebraska Rural Poll.

Twenty-six percent of respondents to the Rural Poll — an annual survey of 7,000 rural Nebraska households conducted by the University of Nebraska–Lincoln’s Department of Agricultural Economics — reported their household was harmed either a moderate amount or a great deal by extreme weather in 2019, and 57% said their community was harmed at least a moderate amount. In addition, most respondents said their extended family and friends outside their community but living in Nebraska were impacted by extreme weather or natural disasters at least a moderate amount.

Impacts of the weather events were not uniform across the state, according to Becky Vogt, survey research manager for the Rural Poll. While those living in or near smaller communities were more likely to say their household was impacted at least a moderate amount, residents of larger communities were more likely to say their community was harmed at least a moderate amount. When viewing results by region, Panhandle residents were most likely to say their household was harmed at least a moderate amount, and residents of the Northeast region were most likely to say their community was harmed either a moderate amount or a great deal.

The perceived impact of extreme weather in rural areas may be related to rural Nebraskans’ strong ties to agriculture, said Brad Lubben, extension associate professor and policy specialist at Nebraska. 

“City residents may not feel much impact or focus on weather unless it directly hits their home, community, occupation or activities, but for those involved in or connected to agriculture, weather is always front and center, affecting not just the day but the year’s production, as well,” Lubben said.

Rural Nebraskans experienced many different extreme weather events in 2019. Most rural Nebraskans said their household experienced extreme high winds (62%), and many experienced an extreme rainstorm (46%) or an extreme winter storm (42%). Similar proportions reported that their community also experienced these weather events. However, rural Nebraskans were more likely to report their community, rather than their household, experienced a flood (53% compared to 32%).

Certain regions of the state were more likely to have experienced different weather phenomena. Residents of the Northeast region were more likely than residents of other regions to have experienced a flood — both at their home and in their community. Forty-one percent of Northeast residents surveyed experienced a flood at their home, and 78% said their community experienced flooding. Panhandle residents were the regional group most likely to report their community experienced extreme high winds, drought or an extreme winter storm.

At least three in 10 rural Nebraskans surveyed reported minor or major impacts from the extreme weather events in the following areas: having to drive extra miles for shopping, damage to their house, and increased levels of anxiety and stress.

The personal impacts of extreme weather differed by community size, region and various demographic characteristics. Those living in or near smaller communities were more likely to report having to drive extra miles for work, school, shopping or health care. For example, 45% of respondents living in or near the smallest communities — those with 500 or fewer residents — reported having to drive extra miles for shopping because of extreme weather. By comparison, 16% of people living in or near the largest communities — those with 10,000 or more residents — said they had to drive extra miles for shopping.

Residents of smaller communities were also more likely to report receiving damage or losing economic activity to a non-farm business — 17% of people living in or near the smallest communities compared to about 6% of people living in or near communities with populations of 5,000 or more.

“The direct personal impacts of the weather events in general were around or below 30%, but nearly half of rural Nebraska felt the impact of the weather events psychologically, with increased levels of stress and anxiety,” said L.J. McElravy, associate professor of youth civic leadership at Nebraska. “The current COVID-19 pandemic and economic downturn may be hitting Nebraskans with higher-than-normal levels of stress and anxiety. The psychological resilience of rural Nebraska and their ability to bounce back from adverse events may not be as high as it would typically be.”

Residents of both the Panhandle and South Central regions were more likely than residents of other regions to report their homes were damaged as a result of extreme weather. Just over 40% of respondents living in these regions received at least minor damage to their house, compared to 17% of respondents in the Northeast region. Northeast residents were most likely to report that they evacuated their homes for a time as a result of extreme weather events — one in 10 Northeast residents compared to less than 1% of Southeast residents.

Farmers and ranchers were more likely to experience financial impacts from the weather events than those in other occupations. Forty-nine percent of farmers, ranchers and others who work in agriculture reported reduced household earnings or income.

Now in its 25th year, the Rural Poll is the largest annual poll of rural Nebraskans' perceptions on quality of life and policy issues. The margin of error is plus-or-minus 2%. This year's response rate was 33%. Complete results are available at http://ruralpoll.unl.edu.



Lower Elkhorn NRD receives grant to expand groundwater monitoring program in Pierce County

The Lower Elkhorn Natural Resources District (LENRD) recently announced they will receive $8,750 from the Nebraska Environmental Trust (NET) for the “LENRD Establishment of Baseline Vadose Zone Sampling in Pierce County” project.  This is the first year of award with a potential for 2nd year funding of an additional $8,750. The project is one of the 118 projects receiving $20,000,000 in grant awards from the NET this year. Of these, 73 were new applications and 45 are carry-over projects.

Within the LENRD, citizens rely on groundwater as the primary source of water for all uses. Maintaining a safe drinking water source is one of the most important priorities of the LENRD. This has been increasingly difficult within areas of Pierce County, as groundwater nitrate levels in many areas exceed the maximum contaminant level, and in some areas, continue to increase. This condition is well documented by over 40 years of groundwater sampling data that has been collected by the LENRD.

Through this project, the LENRD will expand its groundwater monitoring program by establishing baseline vadose zone nitrate data. Through the collection of a minimum of 11 cores spread throughout the area of Pierce County designated as the Phase 3 Groundwater Management Area, the LENRD will be able to determine the nitrate load moving through the soil profile, and will monitor the nitrate load in response to best management practices being implemented by producers. After establishing this baseline data-set, the LENRD intends to return to the sample location sites every 5 years for additional monitoring.

 

HEALTHY SOILS TASK FORCE TO MEET

Keith Berns, chair, has scheduled a Zoom meeting of the Healthy Soils Task Force (HSTF) for Wednesday, July 22.  The meeting will begin at 2:00 p.m. CDT. To attend the Zoom meeting contact HSTF Chairman Keith Berns at keith@greencoverseed.com.

The Task Force will review the updated draft of a healthy soils initiative and action plan as presented by committee.

For an agenda and more details, call the Nebraska Department of Agriculture at (402) 471-2341 or visit https://nda.nebraska.gov/healthysoils/index.html.



Lauren McNeal Joins USGC As Summer Intern

Lauren McNeal, Kearney, NE started an internship on July 6 with the U.S. Grains Council (USGC) headquarters office in Washington, D.C., thanks to generous support from the Nebraska Corn Board. Due to COVID-19 adjustments and restrictions, McNeal will spend her internship working virtually through September 2020.

McNeal graduated this spring from the University of Nebraska-Lincoln, earning degrees in political science, Spanish and psychology. During her internship, she is working on special projects with the organization’s trade education, global strategies and policy functions.

McNeal plans to attend law school in the fall of 2021 and is interested in international law, particularly related to Latin America.

“The Council is excited to have Lauren join us this summer,” said Melissa Kessler, USGC director of strategic relations. “Her educational background covers a wide variety of topics that make her a great addition to the Council, and we hope to provide her with real-world work experience as she prepares to continue her education.”

Nebraska Corn’s internship program is designed to provide students with an overview of Nebraska’s corn industry through professional examples and experiences. In addition to McNeal working with the Council, student interns will also join the U.S. Meat Export Federation, National Corn Growers Association, Nebraska Corn Board and Nebraska Corn Growers Association for the summer.



Financial Assistance Available to Help Iowa Farmers Implement Conservation Practices

Iowa Secretary of Agriculture Mike Naig announced today that farmers and landowners can sign-up now for cost share funds through the state’s Water Quality Improvement (WQI) program. The state funding helps off-set the cost of conservation practices, including cover crops, no-till/strip-till acres or nitrification inhibitors. These practices are proven to support soil health, reduce erosion and improve water quality.

“Iowa is a national conservation leader. We’re committed to helping communities, farmers and landowners adopt practices that improve soil health and water quality locally and downstream,” said Secretary Naig. “The state WQI fund is one of many resources available to help farmers and landowners adopt conservation practices that work for their fields. Working with our public and private partners, we’re helping Iowans build on these conservation projects every year.”

Cost share funding through the Iowa Department of Agriculture and Land Stewardship is limited to 160 acres per farmer or landowner. Farmers can start submitting applications immediately through their local Soil and Water Conservation District offices. Due to COVID-19 social distancing protocols, applicants are encouraged to call ahead to schedule an appointment.

Last fall, more than 2,900 farmers participated in the program and invested an estimated $10.2 million in funding to match $6.1 million through the state’s cost share fund. Participants included 1,200 farmers using a conservation practice for the first time and more than 1,700 farmers continuing their conservation practices.

To learn more about the state’s Water Quality Initiative, visit cleanwateriowa.org/water-quality-initiative.



Veterinary researcher works with South Korean company on African swine fever virus vaccine development

New vaccine development work at Kansas State University may soon help confront African swine fever, a disease that is endemic in sub-Saharan Africa. It has spread to different regions of Europe and Asia, causing devastating losses worth billions of dollars in China, Vietnam and other surrounding countries where pork is the most popular food item.

K-State is doing the vaccine development work through a sponsored research agreement facilitated by K-State Innovation Partners and MEDIAN Diagnostics Inc., or MDx, a veterinary medicine company based in South Korea. K-State Innovation Partners facilitates technology commercialization for the university.

"The technology we are utilizing is based on a novel adenovirus backbone — developed from human adenovirus serotype 6 — that can amplify a transgene up to 10,000 copies in the infected cell without producing infectious viruses," said Waithaka Mwangi, professor of diagnostic medicine and pathobiology in the university's College of Veterinary Medicine.

Mwangi said the technology of single-cycle adenovirus, or SCAd, allows a recombinant virus encoding a gene of interest to mediate protein expression in an infected cell in a similar manner as a replication competent virus but without producing infectious progeny — making it safe to use. This platform was originally developed at the Mayo Clinic.

"We believe this will be a way to deliver a safe and effective vaccine," Mwangi said.

Mwangi said that the single-cycle adenovirus vaccine platform can safely induce more robust and persistent immune responses compared to live, inactivated and subunit vaccines that are traditionally used.

"There are a lot of issues to be solved for commercializing an African swine fever virus vaccine and one of the main problems is safety," said JinSik Oh, CEO of MDx. "We should enhance the vaccine efficacy on the basis of guaranteed safety. We are convinced the SCAd technology is one of the most advanced and promising platforms to develop next-generation African swine fever vaccine candidates and Kansas State University is the best partner to cooperate with in the veterinary research and development area, so MDx made a decision to invest in this project."

MDx expects the formulation and testing of the new African swine fever virus vaccine candidate to be completed through this research and development project, which is entering the first year of funding and will continue through 2023.

Were African swine fever to enter the U.S., where there are millions of feral pigs and ticks capable of transmitting the virus, it could cause billions of dollars in economic losses to swine and other related industries according to animal disease experts. The pork industry in China and other parts of Asia is expected to take a long time to recover from the 2018 outbreak and the virus is expected to become endemic in Europe where it has infected wild boars.



New Funding for Cattle Producers to Secure Strong Future for the Beef Industry

The National Cattlemen’s Foundation (NCF) today announced its partnership with Cargill to provide funding to North American cattle producers to provide practical tools to help manage market shifts, reduce costs, manage finite natural resource availability and withstand extreme weather events.

The four-year strategic partnership, which was funded by a $3 million contribution from Cargill’s protein business, establishes a professional development scholarship program, and provides educational resources through the U.S. Roundtable for Sustainable Beef (USRSB) and experiential learning in partnership with the National Cattlemen’s Beef Association (NCBA).

“Cargill is invested in the future of ranchers and farmers,” Jon Nash, Cargill Protein – North America business leader. “This contribution is just one of the ways we are investing what we’ve earned back in agricultural communities. We know we can’t deliver protein to tables without the people on the frontlines of our food system.”

The Rancher Resilience Grant program, which serves as the professional development scholarship arm of the program, offsets expenses for farmers and ranchers to attend state, regional, national, and global educational events. This includes industry conferences, seminars, and certifications that address animal health and wellbeing, profitability, natural resources, sustainability, genetics, and reproduction education.

“This partnership furthers NCF’s vision by advancing the future of the beef industry,” said NCBA CEO Colin Woodall. “There is no better way to achieve this than by meeting producers on the ground and supporting access to continuing education through free tools and resources.”

Cargill and the NCF will also work with the USRSB to support free virtual education platforms for the entire beef value chain. Additional resources will support the NCBA in promoting producer professional development opportunities.

“The USRSB educational modules provide real-world solutions that can be applied to any operation, no matter size or location,” said Wayne Morgan, USRSB chair. “We are excited to partner with Cargill and the NCF to develop tools designed to help stakeholders across the industry continuously improve how we raise, process and distribute beef.”

“Our industry continually explores technologies and production practices to support more efficient operations that focus on profitability and consistent high-quality beef,” said NCBA Executive Director of Producer Education Josh White. “It’s exciting to see industry partners come together through a shared commitment to promote the long-term economic wellbeing of farmers and ranchers across the beef value chain while also improving our product and our care for livestock and natural resources.”

The Rancher Resilience Grant program will launch this fall. Development of educational resources and promotion will begin immediately.



Yet Even More Waiver Requests While a Hurting Rural America Continues to Wait for EPA to Correct its RFS Missteps

Today, the U.S. Environmental Protection Agency (EPA) updated its Small Refinery Exemption (SRE) dashboard, disclosing the Agency’s received six more retroactive SRE petitions or so-called ‘gap filings’ for compliance years 2011 through 2016 under the Renewable Fuel Standard (RFS). EPA unveiled in its June update that the Agency had received 52 new retroactive SRE petitions for compliance years 2018 to 2011. EPA has yet to offer answers regarding these ‘gap year’ waivers, while the Agency continues to delay applying the precedent set by the Tenth Circuit Court nationally. EPA has also punted on issuing its proposed renewable volume obligations (RVOs) for 2021 or addressing the loss in fuel demand to ensure the 2020 RVOs are met this year. The American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following reaction statement:

"We are already halfway through the year and instead of taking steps to comply with the January Tenth Circuit Court ruling to limit Small Refinery Exemptions under the Renewable Fuel Standard, EPA seems merely interested in providing refiners yet another escape hatch in the form of the now nearly 60 retroactive waiver requests. EPA's priority is obviously protecting refiners and ignoring the statue or court decisions.”



NIAA elects officer team and new board members

The National Institute for Animal Agriculture (NIAA) recently elected offices and executive committee members who will guide the organization over the next two years. In addition, three new board members were elected, and three current board members were re-elected.

The officer team includes Kevin Maher, Board Chair, VetMeasure, Inc.; Eric Moore, DVM, Vice Chair, Norbook, Inc.; Chelsea Good, Treasurer, Livestock Marketing Association; and Michael Short, DVM, Secretary, Florida Department of Agriculture & Consumer Services.

In addition to the officer team, the board of directors elected three members to serve at-large on the executive committee. Joining the officers on the executive committee are Todd Low, Hawaii Department of Agriculture; David McElhaney, Allflex USA; and Lucas Pantaleon, DVM, Engormix/Pantaleon PLLC.

Members of NIAA elected three new members and re-elected three existing board members. New board members are Joe Leathers, 6666 Ranches; Justin Smith, DVM, Kansas Department of Agriculture; and Roger Saltman, DVM, RLS Management Solutions. Re-elected board members are Fabian Bernal, DeLaval; Lucas Pantaleon, DVM, Engormix/Pantaleon PLLC; and Leonard Bull, Ph.D, Logical Solutions Consulting.

“I look forward to working with our board and newly elected officer team as we continue advancing the animal agriculture sector of our food and agriculture system forward,” Kevin Maher, Board Chair, VetMeasure, Inc., says. “Animal agriculture has tremendous potential while also facing several obstacles. NIAA will continue to bring animal agriculture leaders together to collaborate while deriving solutions for our sector.”

Additionally, the NIAA Board of Directors has named J.J. Jones with Roots & Legacies Consulting, Inc., as the full-time executive director. Jones and his team have led the organization through the interim period for the past six months.

As a member-driven non-profit, the National Institute for Animal Agriculture works to unite and advance the aquatic livestock, beef, dairy, equine, poultry, small ruminant, and swine sectors that, collectively, form animal agriculture.

To learn more about NIAA visit, www.animalagriculture.org.



Farmers, Rural Communities, Hospitals Need More Support to Weather Pandemic

The coronavirus pandemic continues to overwhelm rural hospitals, upend the agricultural economy, and interrupt daily life as we know it, making it clear that family farmers and rural communities require additional support to withstand these trying times. In a letter sent today to Senate leadership, National Farmers Union (NFU) President Rob Larew highlighted the many difficulties the organization’s members have been enduring over the last several months and recommended policies that would help ensure both their immediate wellbeing as well as their long-term recovery.

Most urgently, family farmers and ranchers need financial aid to overcome severe market disruptions and depressed prices. While the Coronavirus Aid, Relief, and Economic Stimulus (CARES) “provided critical support for hospitals, family farmers, workers, and rural communities,” Larew noted that “in the absence of further assistance packages, net farm income is expected to drop by 12 percent this year,” a loss significant enough to potentially push thousands of small and mid-sized operations out of business. To prevent such a catastrophic outcome, Larew urged legislators to consider several emergency measures, including a boost in funding for direct assistance for farmers, programs that would facilitate the purchase and distribution of surplus food from farms to food banks, greater flexibility for farm credit programs, and the elimination of barriers to Small Business Administration (SBA) programs.

Financial assistance alone is not enough to keep farmers afloat; the markets, infrastructure, and services they rely on need to be fully operational as well.  One of the most obvious examples is meat processing facilities, whose pandemic-related shutdowns and delays have had substantial consequences for ranchers and consumers alike. Small and regional meat processors “improve competition for ranchers and make our food supply chain more resilient to disruption,” but they often face financial and regulatory hurdles to increase processing capacity and expand sales. As a solution, Larew advocated a pair of bills that would ease the monetary burden of meeting federal inspection requirements and of paying federal inspectors working overtime or on holidays. Other sectors, including the biofuels industry and rural broadband initiatives, play a similarly critical role for agricultural livelihoods and, according to Larew, should receive comparable relief.

While farmers are concerned about their bottom line, they are also thinking about the health of their families and community members in the midst of the pandemic – particularly because “the daily number of new cases in rural counties has grown by 150 percent in the past month.” Larew notes that “the allocation of $10 billion specifically for rural providers as directed by the CARES Act was greatly needed,” but “between the cost of treating acutely ill patients and losing revenue from elective care,” many hospitals are hemorrhaging money. In order to keep rural facilities open, as the care they provide is even more crucial now than it was before, “NFU recommends a 20 percent rural benchmark in the Provider Relief Fund that prioritizes rural providers with the greatest financial need, those hit hardest by COVID-19, and those serving a large portion of at-risk patients.”

Farmers aren’t the only ones who are struggling; millions of Americans are out of work, resulting in a “steep rise in hunger and food security.” Food banks, though important, are not equipped to handle this influx in demand over a sustained period of time; the Supplemental Nutrition Assistance Program (SNAP), on the other hand, can be scaled up quickly, efficiently, and inexpensively. Currently, as Larew writes in the letter, “for every meal provided through a Feeding America network food bank, SNAP can provide nine meals.” He encouraged the Senate to supplement the work food banks are doing by “providing a 15 percent boost in the SNAP maximum benefit and increasing the SNAP monthly minimum benefit from $16 to $30.”