Wednesday September 2 Ag News

 Nebraska Extension partners to spread safety awareness this harvest season

Safety around powerlines should always be front of mind when operating large farm equipment, and Nebraska Public Power District (NPPD), Nebraska Extension and UNMC Central States Center for Agricultural Safety and Health (CS-CASH) are partnering together to spread awareness about potential dangers as harvest season approaches.  

NPPD, Nebraska Extension and CS-CASH will be hosting events at multiple locations across the state which will feature a “Look Up and Look Out” custom combine and an ATV and grain bin entry safety simulator. First responders will be on hand to provide education on how to exit machinery safely in case of contact with a downed power line or pole structure.  

“We want to make sure farmers and equipment operators who are working around power lines know what precautions need to be taken in order to perform their work safely,” says NPPD Transmission and Distribution Construction and Maintenance Manager Scott Walz. “If a piece of equipment gets too close to a powerline or makes contact with a line it can result in serious or fatal injuries, and our main concern is that people are able to go home safe at the end of the workday. Hopefully these events will help remind people to keep a focus on safety.”  

The scheduled events will provide lunch to attendees and will take place at the following locations:
    Scottsbluff Panhandle Research and Extension Center on Tuesday, Sept. 1
    Buffalo County Fairgrounds southwest lot in Kearney on Wednesday, Sept. 2
    York County Fairgrounds on Wednesday, Sept. 9
    Madison County Extension, 1305 S. 13th St. in Norfolk on Thursday, Sept. 10
    Red Willow County Fairgrounds in McCook on Friday, Sept. 25

All the events are scheduled to take place from 11 a.m. to 1 p.m. and will be marked with identifying banners for exact location. The events will also be supported by local public power districts that serve the surrounding area. Events in Norfolk and Kearney will include live line safety demos  

“Nebraska Extension and CS-CASH continue to be valuable health and safety resources for our ag producers around the state, and we are excited to partner with NPPD to promote harvest safety as the season gets underway with more equipment heading out into the field,” says Nebraska Extension Educator, Susan Harris.

The events are open to the public and will all be held outdoors to encourage social distancing. Attendees are encouraged to wear masks at the event, where CDC guidelines will be in place.



Norfolk Cattle Feedlot Owner Sentenced for Bank Fraud

United States Attorney Joe Kelly announced that Max Kant, age 48, of Norfolk, Nebraska, was sentenced today to 12 months and a day in prison by United States District Court Judge Brian C. Buescher for Bank Fraud. There is no parole in the federal system. Upon his release from prison, Kant will serve 3 years of supervised release. Kant is also ordered to pay $1,590,363.19 in restitution to Security National Bank.

Kant owned and operated MK Feedlots in Battle Creek, Nebraska.  MK Feedlots would house and feed cattle before they would be sold for slaughter. Kant was a customer of Security National Bank and had an operating line of credit, a real estate loan, and a purchase inventory line of credits with Security National Bank. On April 25, 2016, Kant submitted to Security National Bank a fraudulent Live Cattle Purchase Contract between MK Feedlots and what has been identified in the Indictment as Company A, wherein Company A purported to agree to purchase 4,000 head of cattle from MK Feedlots in June 2016. On July 28, 2017, Kant again submitted to Security National Bank a fraudulent Live Cattle Purchase Contract between MK Feedlots and Company A, wherein Company A purported to agree to purchase 5,500 head of cattle from MK Feedlots. These contracts represented a sizable receivable for MK Feedlots which induced Security National Bank to extend Kant’s line of credit. In September 2017, Kant admitted to Security National Bank that the July 28, 2017 contract was fraudulent and MK Feedlots closed. As a result of Kant’s actions, Security National Bank claimed that it experienced a loss of $2.1 million. Security National Bank is insured by the Federal Deposit Insurance Corporation (FDIC).

This case was investigated by the Federal Bureau of Investigation.



Nebraska Women in Agriculture to launch entrepreneurship web series

Nebraska Women in Agriculture has announced a new monthly live webcast series that will highlight the entrepreneurial spirit of women in the agriculture industry from across the state.

“Open for Business: A Nebraska Women in Agriculture Agripreneurship Series” will debut on Sept. 8 at 6:30 p.m. Central Standard Time with Jaclyn Wilson, a fifth-generation cow-calf producer and founder of Flying Diamond Genetics and Flying Diamond Beef.  

The webcast will feature a conversation between Wilson and Jessica Groskopf, director of Nebraska Women in Agriculture, that focuses on surviving business shocks such as disasters, regulatory changes and shifting family dynamics.  

“We know it’s a challenging time for our state, which is why we are excited to showcase the grit, determination, and success of female agribusiness entrepreneurs in Nebraska,” Groskopf said.

“It’s our hope that their stories inspire and uplift other women to pursue their own goals and that attendees can pick up some creative and useful business insights along the way.”

From Lakeside, Neb., Wilson and her father, Blaine, operate Wilson Ranch, a Red Angus operation founded in 1888.  

In 2011, she founded Flying Diamond Genetics, a recipient business headquartered near Alliance, Neb., and, last fall, co-founded Flying Diamond Beef, a direct-to-consumer venture, with two other female business partners.

Wilson has been active in the beef industry, serving in leadership roles with Nebraska Cattlemen and the National Cattlemen’s Beef Association. She is an alumna of the Nebraska LEAD program, served as chair of the Nebraska Agriculture Leadership Council, and on agricultural advisory committees for Gov. Pete Ricketts, Sen. Deb Fischer and Rep. Adrian Smith. She currently sits on the Nebraska Humanities Council. In 2016. she received Farm Journal Media’s 40 Under 40 Award.

The webcasts will be free to attend. Registration is required on the Nebraska Women in Agriculture website, wia.unl.edu. The monthly schedule will be updated there as well.

Nebraska Women in Agriculture is a program of Nebraska Extension in the Department of Agricultural Economics, dedicated to providing unbiased, research-based risk management education to female agriculture professionals in Nebraska. This material is based upon work supported by USDA-NIFA under Award Number 2018-70027-28586.

 

Fortenberry Announces Farm of the Future Event with USDA Secretary Sonny Perdue and Nebraska Ag Entrepreneurs

Congressman Jeff Fortenberry (NE-01) today announced a Farm of the Future event he is hosting Friday, September 4, from 11:30 AM to 12:40 PM, with USDA Secretary Sonny Perdue and Nebraska Ag Entrepreneurs.  It will be held at the Great Plains Beef Building, 4851 N 84th St, in Lincoln, Nebraska.  Social distancing and mask-wearing are required.

"I invited USDA Secretary Sonny Perdue to Lincoln to learn how Nebraskans are pioneering the Farm of the Future––connecting the farmer to the family, the urban to the rural, and the farm to the table.  From farm-to-school leaders to direct-to-consumer pioneers, urban farms to precise ag, feedlot operators deploying advanced tech to track livestock health to dairy farmers using robotics to expand yield at lower cost, the Farm of the Future is nimble, fast, yet intimate, allowing persons to know and appreciate the provenance of their food,” Fortenberry said,.

"I am so honored that Secretary Perdue is taking took time out of his busy schedule to visit us here in the Heartland.  What we are doing in Farm Country is the very essence of America.  We are a community that cares, that works hard, that produces something intimate and elemental––our nation’s food,” Fortenberry added.

U.S. Secretary of Agriculture Sonny Perdue will join Nebraska Gov. Pete Ricketts, U.S. Rep. Jeff Fortenberry and University of Nebraska--Lincoln Chancellor Ronnie Green Sept. 4 for a panel discussion on agricultural innovation at Nebraska Innovation Campus.  Mike Boehm, NU vice president and Harlan Vice Chancellor of UNL's Institute of Agriculture and Natural Resources, will serve as moderator.

The event is invitation-only to ensure social distancing. The event will be open to the media and available for public viewing at www.unl.edu/live-stream. The panel discussion begins at 10:15 a.m.



Iowa Pork Industry a Critical Player in State's Economy

The work of Iowa's pig farmers is the core of a vital pork industry in the state, says a new study released by the Iowa Pork Producers Association (IPPA).
 
Providing Jobs, Economic Activity
Iowa's 5,418 pig farms generate work not only in pig production, but also in hog harvesting and pork processing. In all, there are 147,105 Iowa jobs created by the pork industry through direct, indirect and induced jobs. The jobs break out this way:
    pig production on the farms generates 46 percent of the jobs;
    the state's 14 commercial hog harvesting facilities create 45 percent of the jobs; and
    commercial pork processing contributes another 9 percent of jobs.

A study provided a year ago by the Coalition to Support Iowa Farmers showed that livestock production was the only agriculture sector that was increasing the number of jobs in Iowa.
 
In the three areas of the pork industry, labor income from those Iowa jobs is $6.84 billion, according to Decision Innovations Solutions (DIS), an economic research and analysis firm that conducted the study for IPPA. DIS used a 2018 Iowa dataset, data from the USDA 2017 Census of Agriculture and other USDA/NASS sources and used IMPLAN modeling to project data that would reflect 2019 numbers and dollars.
 
The three pork industry sectors generated $40.8 billion in sales. Pig production accounted for 34 percent of the total, or $13.9 billion in sales from Iowa's pig farms. Hog harvesting facilities had 55 percent of the sales, and pork processing accounted for 11 percent of sales.
 
Using Local Feedstuffs
There are several reasons that Iowa is the nation's number one producer of pork. The state's pig farmers not only have a proud heritage, they have built upon the experiences of that heritage and combine it with using new research and technology to become more efficient in producing nutritious, safe and delicious pork. Another reason is the availability of key feedstuffs for raising pigs.
 
A balanced pig diet contains energy and amino acids, which come from corn and soybean meal diets. From weaning to reaching market weight, an average pig eats 12 bushels of corn and 2.5 bushels of soybeans. Over the course of a year, Iowa pigs consume corn that is the equivalent of 22 percent of the state's corn production and 23 percent of the state's soybeans. That means nearly one-fourth of Iowa's row crops are marketed for near-by use, thus reducing the cost of grain transportation.
 
Pigs and Farms, Increasing and Decreasing
The number of pigs in Iowa in December 2019, was 24.8 million hogs. Ninety-five percent (23.79 million) of those hogs are market animals, which have increased by three percent annually for the past decade. Iowa holds 32 percent of the U.S. hog inventory.
 
Conversely, Iowa's breeding herd (1.01 million head) has been declining slowly despite growth (1.2 percent) in the national breeding herd (6.46 million).
 
The size of pig farms is increasing, 69 percent of Iowa's hog inventory is now on farms with 5,000 or more pigs (20 percent of all pig farms). However, the most common commercial-size hog farm (32 percent) in Iowa is in the category of 2,000-4,999 head. Farms with 1,000-1,999 pigs are 13 percent of Iowa's pig farms.
 
The top five counties in pig inventory are Washington, Sioux, Lyon, Hamilton and Plymouth counties. Each of these counties has more than 1 million pigs.
 
In addition to analyzing state data on the impact of Iowa's pork industry, additional analysis was conducted on 35 counties in Iowa to review local economic contributions. (The data from these counties will be released soon.)
 
Adding Barns is a Jobs Benefit to Counties
The DIS study also included information about the economic activity in a community when a new 2,400-head finishing barn is built. This part of the study considered the construction and first year operations of a barn this size, which is typical for Iowa. Building the barn would create 12 jobs (half in construction and half in operations) and sales activities of $2.5 million.
 
A new pig barn sources about 35 percent of inputs locally. The construction of a new pig barn requires several purchases such as steel, concrete and equipment. Once construction is completed, pig farms purchase feed, veterinary and other professional services, and many other inputs to produce market hogs for sale.



Grain Quality Concerns Abound Following Extreme Weather in Iowa

The combination of drought, derecho and hot weather has Iowa crops maturing earlier than usual, and with a host of grain quality concerns.

“Storm damaged corn is on the ground and it is quickly becoming moldy which creates food safety hazards,” said Charles Hurburgh, professor and grain quality specialist in agricultural and biosystems engineering at Iowa State University. “The whole idea here is to get the producer and the crop insurance and the grain market together on determining value for the severely damaged grain, and how can we either take that as a total loss or direct it to another use, but not put it into the grain market.”

The droughted corn, on the other hand, is drying rapidly in the field. The key is monitoring for mold growth and toxin production during the drydown and harvesting quickly if scouting shows signs.

Hurburgh said there is a need for communication across the board, so that solutions can be reached without causing further problems down the line.

Hurburgh and the Iowa Grain Quality Initiative at Iowa State University Extension and Outreach offer the following key points of advice for growers in both the drought and storm damage area:
-    Maintain contact with your crop insurance adjuster. We recommend having a conversation about how grain quality will be handled in your individual policy. It's important to ask about the specific quality factors (test weight, damage) and feed safety factors (mycotoxins) that will be considered.
-    Call your elevator to ask how or if different qualities of grain will be accepted. Ask them what factors they will look at and if there will be acceptance limits.
-    Continue to scout grain in the field for quality issues (primarily mold development). Continue reporting what you find to your crop adjuster, even if there has been one visit for quantity loss determination. This could change acceptance, use and valuation. Again, ask about special markets for severely damaged corn and about the process for zero valuing if quality continues to deteriorate before harvest.
-    Test the grain being fed to livestock. The key factors to consider are test weight, protein and mycotoxins. A veterinarian can access testing from Iowa State on these factors and help interpret data.



With Brazilian Export Market in Jeopardy, Trump Should Immediately Restore Domestic Market by Denying Unjustified RFS Exemptions

While no official announcement from Brazil has been made, the deadline for Brazil to extend the small, tariff-free quota for U.S. ethanol has passed, and Brazil has also not readopted its former position that ethanol trade between the two countries should be totally tariff-free. Instead of restoring free trade, Brazil is reverting to a 20 percent tariff on ethanol from the United States. Brazil has been the largest export market for U.S. ethanol.

In response, Iowa Renewable Fuels Association Executive Director Monte Shaw made the following statement:

“The news from Brazil is the worst possible outcome for U.S. ethanol producers and comes at the worst possible time. The hypocrisy of Brazil to preach about free trade for ethanol and to enjoy that right when they send product to the United States, while simultaneously putting a 20 percent barrier on our product is indefensible.

“While the Trump administration cannot control the decisions of the Brazilian government, they can control the decisions of the EPA. With our largest export market now in jeopardy, there is no time to delay in restoring sanity to domestic biofuels markets. President Trump should immediately order the EPA to deny all pending RFS refinery exemption requests for being both unjustifiable and illegal. Farmers and biofuels producers need this action now, not uncertainty until after the election.

“Further, on August 10, President Trump stated his Administration would pursue an equalization of tariffs if Brazil took this step. We look forward to quick action on this front as Brazil continues to flood the California market with duty-free ethanol while at the same time penalizing U.S. producers. Farmers need markets during this difficult time, and President Trump can quickly take these two steps to expand domestic markets for ethanol.”



Weekly Ethanol Production for 8/28/2020

According to EIA data analyzed by the Renewable Fuels Association for the week ending August 28, ethanol production eased 1.0%, or 9,000 barrels per day (b/d), to 922,000 b/d—equivalent to 38.72 million gallons daily. Production remained 9.0% below the same week in 2019 as a result of the continuing effects of the COVID-19 pandemic. The four-week average ethanol production rate declined 0.2% to 924,000 b/d, equivalent to an annualized rate of 14.16 billion gallons.

Ethanol stocks grew 2.3% to 20.9 million barrels, which was 12.3% below year-ago volumes. Inventories increased across all regions except the Gulf Coast (PADD 3).

The volume of gasoline supplied to the U.S. market, a measure of implied demand, contracted by 4.1% to 8.79 million b/d (134.69 annualized). Gasoline demand remained 7.2% lower than a year ago.

Conversely, refiner/blender net inputs of ethanol ticked up 0.8% to 861,000 b/d, equivalent to 13.20 bg annualized, which was 9.6% below the year-earlier level.

The U.S. imported 36,000 b/d of ethanol, or 10.58 million gallons for the week, which is believed to have originated in Brazil. This marks the fifth time over the last six weeks that imports were reported. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of June 2020.)



Farm Sector Profits Forecast to Increase in 2020
USDA Economic Research Service

Net farm income, a broad measure of profits, is forecast to increase $19.0 billion (22.7 percent) to $102.7 billion in 2020, after increasing in both 2018 and 2019. In inflation-adjusted 2020 dollars, net farm income is forecast to increase $18.3 billion (21.7 percent) from 2019. If realized, in inflation-adjusted terms, net farm income in 2020 would be 25.4 percent below its peak of $137.6 billion in 2013, but 13.8 percent above its 2000-19 average ($90.2 billion).

Net cash farm income is forecast to increase $4.9 billion (4.5 percent) to $115.2 billion in 2020. Inflation-adjusted net cash farm income is forecast to increase $4.0 billion (3.6 percent) from 2019, which would be 5.7 percent above its 2000-19 average ($109.0 billion). Net cash farm income encompasses cash receipts from farming as well as farm-related income, including government payments, minus cash expenses. It does not include noncash items—including changes in inventories, economic depreciation, and gross imputed rental income of operator dwellings—reflected in the net farm income measure above.

Cash receipts for all commodities are forecast to decrease $12.3 billion (3.3 percent) to $358.3 billion (in nominal terms) in 2020. Total animal/animal product receipts are expected to decrease $14.3 billion (8.1 percent) with declines in receipts for broilers, cattle/calves, hogs, and milk. Total crop receipts are expected to increase $2.0 billion or 1.0 percent from 2019 levels. Higher receipts for fruit/nuts are expected to more than offset lower receipts for corn, wheat, cotton, and soybeans. Direct government farm payments are forecast at $37.2 billion in 2020, an increase of $14.7 billion (65.7 percent, in nominal terms). The expected increase is because of supplemental and ad hoc disaster assistance for COVID-19 relief.

Total production expenses (including operator dwelling expenses) are forecast to decrease $4.6 billion (1.3 percent) to $344.2 billion (in nominal terms) in 2020. Interest expenses and livestock/poultry purchases are expected to decrease, but fertilizer and cash labor expenses are expected to increase.

Farm business average net cash farm income is forecast to increase $3,800 (4.8 percent) to $82,600 per farm in 2020. All resource regions, except the Heartland and Prairie Gateway, are forecast to see farm business average net cash farm income increase. Farm businesses specializing in crops are expected to see average net cash farm income increase in 2020, while those specializing in cattle/calves, hogs, poultry, and dairy are expected to see average net cash farm income decrease in 2020.

Farm sector equity is forecast up by $18.5 billion (0.7 percent) in nominal terms to $2.68 trillion in 2020. Farm assets are forecast to increase by $33.7 billion (1.1 percent) to $3.11 trillion in 2020, reflecting an anticipated 1.1-percent rise in farm sector real estate value. Farm debt in nominal terms is forecast to increase by $15.2 billion (3.6 percent) to $433.8 billion, led by an expected 5.5-percent rise in real estate debt. The farm sector debt-to-asset ratio is expected to rise from 13.61 percent in 2019 to 13.95 percent in 2020. Working capital, which measures the amount of cash available to fund operating expenses after paying off debt due within 12 months, is forecast to decline 12.8 percent from 2019. When adjusted for inflation, farm sector equity is forecast to decline slightly in 2020, while assets and debt are forecast to increase.

Median Income of Farm Operator Households Forecast to Rise in 2019 and 2020
Total median farm household income is forecast to increase to $83,111 in 2019 and continue to increase in 2020, reaching $89,674. In percentage terms, that is a nominal increase of 14.7 percent (a 12.6 percent increase after inflation) between 2018 and 2019 and a subsequent rise of 7.9 percent (a 5.9 percent increase after inflation) in 2020. The forecast rises in 2019 and 2020 are notable because they follow a trend from 2015 through 2018 of declining median farm household income.

Farm households typically receive income from both farm and off-farm sources. Median farm income earned by farm households is forecast to increase in 2019 to $296 from -$1,735 in 2018 and is expected to continue to increase to $934 in 2020. Median farm income earned by farm households was negative each year from 1996 to 2018. The increase in median farm income in 2019 and 2020 is largely because of increases in government payments to farm operations. In 2019, the Market Facilitation Program provided financial assistance in response to trade disruptions. In 2020, supplemental and ad hoc disaster assistance programs—such as the Paycheck Protection Program (PPP) and Coronavirus Food Assistance Program (CFAP)—provided financial relief to those affected by the global COVID-19 pandemic.

As in previous years, many farm households rely on off-farm income. The median off-farm income is forecast to increase each year, up 6.3 percent to $70,000 in 2019 and up 3.1 percent to reach $72,187 in 2020. Like the median farm income forecast, the rise in median off-farm income is primarily because of COVID-19 relief distributed to most U.S. households through the Economic Impact Payments. Because farm and off-farm income are not distributed identically for every farm, median total income will generally not equal the sum of median off-farm and median farm income.  



Reaching our Animal Ag Customers Through the Cattlemen’s Education Series

The National Corn Growers Association (NCGA) is the sole sponsor of the National Cattlemen’s Beef Association (NCBA) Cattlemen’s Education Series (CES), engaging with cattle producers on production efficiency, profitability and sustainability. Due to the COVID-19 pandemic, many grant-funded in-person events have been canceled, but fortunately, corn and cattle have been able to innovate new solutions aimed at connecting agriculturalists with the latest industry information.

“With many beef industry meetings being canceled due to Covid-19, producers like me are missing out on many of the educational opportunities presented at those meetings,” said former Nebraska corn producer and beef feeder Scott Schaneman. “However, the Cattlemen’s Webinar Series allows me to still be in the know with information that can help make my operation more profitable and sustainable. We appreciate the National Corn Growers for sponsoring events like these!”

So far this year, there have been 14 CES sessions, with four more planned for the remainder of the year. NCGA has reached more than 4,000 cattle producers through these sessions.

“The beef cattle industry consumes more than 1.2 billion bushels of corn, making it our largest animal agriculture customer,” said Market Development Action Team Chair Dan Wesely of Morse Bluff, Nebraska. “It is important for us to collaborate and support the cattle industry. This series is an opportunity to share research on the value of corn and corn-based feed ingredients provide within feed rations.”

NCGA staff and grower leaders participated in one of the recent webinars on health issues in mid to late fed cattle. You can view it here... https://www.youtube.com/watch?v=4b7YSjHDqRs&feature=youtu.be.

Additionally, the Market Development Action Team approved funding for a taping of the Cattlemen to Cattlemen segment on RFD-TV. The focus of the segment will be Beef and Corn, Working Together in a Sustainable Food System. Panelists will discuss the entire value chain from corn in cattle rations, ethanol DDG production, next-generation DDGS, production practices and how sustainability plays a role.

Details on the air date will be released soon.



Barchart Releases September U.S. Yield Forecasts for Corn and Soybeans

Barchart, a leading provider of data and technology services to the financial, media, and commodity industries, announces their September cmdty Yield Forecast for end of season yield at 178.4 bu/ac for corn and 50.5 bu/ac for soybeans in the U.S. This represents an increase in forecasted yield relative to the August 4 report, which forecasted end of season yield for corn 174.8 bu/ac and end of season yield for soybeans 49.2 bu/ac.

Released for free to the public on the first Tuesday of each month during the growing season, and available to clients through daily updates, the Yield Forecasts from cmdty allow users to get insights to guide their business decisions ahead of the USDA’s WASDE report.

“We continue to provide strong and accurate yield forecasts for Corn and Soybeans, keeping our users ahead of the curve and allowing them to build robust pricing models,” says Barchart's Head of Strategy Keith Petersen. “In addition to our reliable yield forecasts, users will soon be able to receive access to production forecasts, giving them insight to even more data and equipping them with the information they need to make more efficient and smart decisions.”

cmdty Yield Forecast Indexes provide users with daily insights on over 3,000 individual growing areas in the United States. Subscribers to cmdtyView Pro will have access to these changing expectations and will be well positioned to anticipate possible changes in localized basis conditions. With better information on supply and demand, grain professionals can market their grain smarter and more confidently.



Most Fertilizer Prices Decline, While DAP and MAP Move Higher

Retail fertilizer prices continue to be mostly lower, although DAP and MAP prices are notable exceptions, according to prices tracked by DTN for the fourth week of August 2020.

As has been the case for the last couple of weeks, six fertilizers were lower in price compared to last month. None were down a significant amount, which DTN designates as 5% or more. Potash has an average price of $352/ton, down $6; urea $355/ton, down less than $1; 10-34-0 $464/ton, down $1; anhydrous $442/ton, down $12; UAN28 $219/ton, down $4; and UAN32 $258/ton, down $4.

Two fertilizers, DAP and MAP, were higher in price than last month. DAP was up significantly, or 5%, with an average price of $430/ton. That's an increase of $20 per ton. MAP was up $6/ton with an average price of $435/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.39/lb.N, anhydrous $0.27/lb.N, UAN28 $0.39/lb.N and UAN32 $0.40/lb.N.

Retail fertilizer prices continue to be considerably lower in price from a year ago. Anhydrous is 16% lower, both urea and UAN28 are 14% less expensive, DAP is 13% lower, MAP is 12% less expensive, UAN32 is 11% lower, potash is 9% less expensive and 10-34-0 is 1% lower from last year at this time.



Dairy Economy Roller Coaster Continuing Through Summer

The monthly margin under the Dairy Margin Coverage (DMC) program for July was $12.41 per cwt. This was an increase of $2.42 per cwt. from the June margin. The milk price increased by $2.40 per cwt., from $18.10 per cwt. in June to $20.50 per cwt. in July. The feed cost calculation for July was just $0.02 per cwt. lower than in June.

Since March, the milk price has been by far the most volatile component of the DMC margin, showing month-to month changes, either down or up, that have averaged $2.83 per cwt. By contrast, the monthly changes in the feed cost component have averaged just $0.19 per cwt., and have been all declines, during that same period. Even the individual items in the feed cost formula have been relatively stable, with monthly price changes since March averaging, on a per hundredweight of milk basis, $0.15 for corn, $0.05 for soybean meal, $0.04 for all alfalfa, and $0.06 for dairy-quality alfalfa.

The pandemic is not yet through gyrating the milk price. Current dairy futures anticipatie a drop of well over $3 per hundredweight in the U.S. average all-milk price during the two months from July to September. The milk price outlook for the fall months has weakened in recent weeks as the second wave of Covid-19 infections continues, darkening the outlook for dairy use in food service and schools, and doing the same for the overall economic outlook. The current delay by Congress in agreeing to another pandemic relief package has added to this uncertainty as well.

The USDA-sponsored DMC Decision Tool is currently anticipating a drop in the margin of $3.30 per cwt. from July to September, with small payments for $9.50 per cwt. coverage occurring in both September and October.  

CWT Assisted Dairy Product Export Sales Reach 8.9 Million Pounds in August
Cooperatives Working Together in August assisted member cooperatives in securing 48 contracts to sell 2.4 million pounds of American-type cheeses, 645,955 pounds of butter (82%), 518,086 pounds of anhydrous milkfat, 4.7 million pounds of whole milk powder, and 641,545 pounds of cream cheese. The product is going to customers in 16 countries in Asia, Central America, the Middle East, Oceania, and South America. The product will be shipped during the months of August 2020 through February 2021.

These contracts bring the 2020 total of the CWT-assisted product sales contracts to 74.255 million pounds of cheese, 6.934 million pounds of butter, 1.982 million pounds of anhydrous milkfat, 5.023 million pounds of cream cheese and 36.019 million pounds of whole milk powder. These transactions bring the total milk equivalent CWT will assist member cooperatives moving overseas to 736.3 million pounds of milk on a milkfat basis overseas.



Economists Expect Expansion of U.S. Soy Exports

One might question how COVID-19 and U.S. Soy exports are related. For many, this might be a far stretch, but not for Tanner Ehmke, an economist with CoBank Knowledge Exchange.

While coronavirus continues to grow around the world, especially in the United States, some areas of the world appear to have gotten it contained.

While those economic forecasts look much brighter, unfortunately, we can not say that for the United States, Ehmke said during his presentation that was part of the opening session of the U.S. Soy Global Trade Exchange and Specialty Grains Conference.

"This has a huge impact on the outlook for the economic recovery for the United States," Ehmke said. "This means many areas will remain closed, or are reclosing ... severely clouds the outlook."

Going forward, Ehmke said this means we can expect a struggling U.S. economy until a vaccine is developed and deployed across the masses.

As such, the U.S. Federal Reserve has injected an unprecedented amount of liquidity into the world economy, he explained, noting that the Fed has led the world in its quantitative easing.

"All of this added together (gloomy economic outlook, increase in liquidity, political gridlock, 2020 election) -- all this uncertainty has created a depressing outlook for the U.S. dollar," he said. "Some economists even have a 30% drop in the value of the U.S. dollar.

"Therefore, it stands to reason if we have a weakening of the U.S. dollar, it means we could have a more bullish outlook on soybean exports and soybean prices."

Outside of the United States, Ehmke pointed to the Baltic Dry Index (BDI), which has been recovering and is a positive signal of global economic expansion. Ehmke believes the world economy outside of the U.S. has seen the worst of COVID.

He said the Brazilian Real has been strengthening; whereas, in Argentina, the Peso has been weakening along with Paraguay's Guarani.

"The fact that the Brazilian Real is strengthening while the U.S. dollar is weakening, this is an advantage to U.S. exports and a headwind to Brazilian exports going forward," Ehmke said.

According to the U.S. Department of Agriculture's most recent report, it expects record high soybean production around the world and unprecedented availability.



Investigation is Positive Step Toward Fixing Trade Imbalances

The USDA, United States Trade Representative’s (USTR) office and the U.S. Department of Commerce are taking action to remedy damage  caused to America’s produce farmers by increased imports from other countries. USTR is requesting the International Trade Commission focus on blueberries. Imports of fresh fruits and vegetables have increased dramatically over the past 25 years, driving down prices for domestically grown produce.

American Farm Bureau Federation President Zippy Duvall testified about the concerns of produce farmers at a USTR hearing in August.

AFBF President Zippy Duvall says:
“We appreciate the work that has been done in recent trade deals to level the playing field for America’s farmers and ranchers, but this investigation demonstrates there are still imbalances that must be addressed.

“Ambassador Lighthizer, Secretary Ross and Secretary Perdue listened to our concerns that seasonal fruit and vegetable growers face unfair competition from foreign growers, and their decision to open an investigation is a positive step forward. We will be following this investigation and we stand ready to help find a solution that will strengthen relationships with our trading partners while giving America’s farmers a fair price for the food they grow.”

Imports of fresh fruits and vegetables from Mexico have increased from approximately $1.2 billion in 1993 to $13.5 billion in 2019.