Tuesday November 3 Ag News

 EXTENSION WEBINAR TO FOCUS ON LIVESTOCK RISK MANAGEMENT

A Nebraska Extension webinar on livestock risk management for agricultural producers and professionals will take place at 1 p.m. Nov. 12.

The webinar will start with an overview of current livestock market and risk-management issues from two U.S. Department of Agriculture undersecretaries: Greg Ibach, undersecretary for marketing and regulatory programs, and Bill Northey, undersecretary for farm production and conservation. The overview will be moderated by the University of Nebraska–Lincoln’s Brad Lubben, extension associate professor of agricultural economics and director of the North Central Extension Risk Management Education Center.

The presentation will then feature a panel discussion of livestock economics and marketing, as well as the role and use of insurance tools, including the Livestock Risk Protection policy. Panelists are Elliott Dennis, livestock marketing specialist at Nebraska, and Brandon Willis, a former USDA Risk Management Agency administrator who is now with Ranchers Insurance in Utah. Shannon Neibergs, with Washington State University and the Western Extension Risk Management Education Center, will moderate.

The webinar is presented as part of the weekly Agricultural Economics Extension Farm and Ranch Management series.

Registration, which is free, is available at https://farm.unl.edu/webinars.



Lower Elkhorn NRD invests $1.97 million in flood control project for City of Randolph

The City of Randolph will break ground this week on a flood control project that has been in the making for 18 years.

The groundbreaking ceremony will be this Friday, November 6 at 11:00 a.m. near the city’s RV parking area, west of Sholes Road and east of Nebraska Street.  Representatives from the U.S. Army Corp of Engineers (USACE), the City of Randolph, and the Lower Elkhorn Natural Resources District (LENRD) will be speaking at the ceremony.  All three governmental entities are partnering on this project, along with Pierce and Cedar Counties.

One of the LENRD’s 12 responsibilities is flood prevention and control.  LENRD Projects Manager, Curt Becker, said, “After looking into many alternatives with the USACE, the most cost-effective option was the widening of the Middle Logan Creek channel that runs through Randolph.  This project will allow for a large portion of the city to be taken out of the 100-year flood plain.”

In 2017, the LENRD board approved funding up to $1.97 million for 50% of the local costs of the channel enlargement and floodplain reduction project.  Becker, said, “We created a sinking fund for the project and budgeted money responsibly over the last several years to help protect the future of this community.”

The construction contract for Phase 1 of the flood risk management project was awarded to Shinn Kellogg of Albia, Iowa, for $5.78 million.  Phase 1 will include removing and replacing the Bridge Street and Sholes Road Bridges and widening the Middle Logan Creek channel from just downstream of the Jackson Street Bridge to upstream of the Sholes Road Bridge.

Becker, said, “This flood control project will prevent numerous homes and businesses from being placed in the flood plain.  He added, “We are not only working to protect the community from future flood events, but also to prevent the required annual flood insurance costs.  We are excited to get the project underway.”

Phase 2 work will include continuation of bridge removals and channel widening with contract award anticipated in the summer of 2021 and completion in the spring of 2024.



ALFLAFA SOIL SAMPLING
– Megan Taylor, NE Extension Educator, Platte Co.
 
Did your alfalfa not yield what you were expecting this year? Well fall is the perfect time to pull soil samples and see what’s going on underground.
 
Soil fertility is key to maintaining yield and alfalfa fields should ideally be sampled each year to check soil pH, potassium, and phosphorous levels across all soil textures. Note, if your field is sandy, eroded, or highly weathered, you may want to test for sulfur as well. It is important to remember that compared to row crop ground or grass hay, nitrate-nitrogen is not a concern since alfalfa can fix atmospheric nitrogen. However, digging a few plants up and checking nodulation will provide some insight to plant/soil health as well.
 
To collect soil samples this fall, you will need to collect soil cores to 8 inches, or if the field was previously sampled to 6 inches stay with the historic depth for comparison. It is very important to be at an accurate depth, because values change the deeper or shallower we go in the profile. You can use a file or a sharpie marker to measure 8 inches on your soil probe to make it easier, when pulling cores.
 
When sampling there are a few ways you can decide to pull the cores: by soil type, grid, or representative samples for every 40 acres. For alfalfa fields by soil type or representative samples for every 40 acres would be the most cost-effective choices. You will need to pull 10 to 15 random soil cores across your soil type or 40 acre area to be represented. Those soil cores need to be mixed together in a plastic bucket. From there, take about a pint of soil and place in a labelled bag to be analyzed. Repeat this process across the field for every 40 acres or by the soil types in your field and then package for submission.
 
Once you have your results reach out to your extension educator, fertilizer dealer, or agronomist for more information to help build a profitable alfalfa program.



Barchart Releases Final 2020 U.S. Production and Yield Forecasts for Corn and Soybeans

Barchart, a leading provider of data and technology services to the financial, media, and commodity industries, announces their final 2020 Production Forecasts at 15,324M bu for corn and 4,157M bu for soybeans in the U.S, which incorporates forecasts for end of season yield at 180.4 bu/ac for corn and 50.1 bu/ac for soybeans in the U.S. This represents an increase in expected production and yield for corn, relative to the October 6 report, which predicted end of season production at 15,119M bu and end of season yield at 178.2 bu/ac. Soybeans also saw expected production and yield decrease from 4,190M bu and 50.5 bu/ac, respectively.



Ag Economy Barometer rises to record high on improving financial conditions

The Purdue University/CME Group Ag Economy Barometer rose 27 points to a reading of 183 in October and set an all-time high for the index. Farmers were more optimistic about both the future and current financial situation on their farms as the Current Conditions Index rose 36 points to a reading of 178 and the Future Expectations Index rose 23 points to a reading of 186. The Ag Economy Barometer is based on survey responses from 400 U.S. agricultural producers and was conducted Oct. 19-23.

“Since bottoming out this summer, the ag economy has rebounded sharply, and the dramatic improvement in sentiment reflects the turnaround in the farm income picture,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Mintert was referring to a late summer/early fall rally in commodity prices combined with government program payments arising from the second round of the Coronavirus Food Assistance Program (CFAP 2), which provided a boost to many producers’ farm income. Corn and soybean prices continued to rally even though U.S. corn yields are expected to set a record high and the U.S. Department of Agriculture projects soybean yields to be the fourth highest on record.

“Together the combination of good yields, a rally in crop prices and CFAP 2 payments set the stage for an all-time high in the barometer and farmer sentiment,” Mintert said.

That optimism was reflected in many ways. Comparing their farm’s financial condition today to one year ago, 25% of survey respondents said their farm was better off financially now than at the same time last year. This was the most positive response from producers to this question in the history of the barometer survey.

The Farm Capital Investment Index also hit an all-time high in October, up 9 points from September to a reading 82. The percentage of producers expecting to increase their purchases of machinery in the upcoming year rose to 14% from 11% a month earlier, and up from just 4% back in May. Even more importantly, the percentage of respondents who plan to reduce their purchases in the next year was 33%, down from 40% in September.

The short-run outlook toward farmland values also improved. Respondents expecting land values to rise over the next 12 months rose to 27%, up from 23% in September. The percentage expecting lower farmland values declined to 9% from 12%. There was also a big shift in sentiment in the October survey regarding 2021 cash rental rates for farmland. Nearly four out of 10 (38%) respondents said they expect cash rental rates to increase in 2021. In September, just 8% of producers said they expected to see higher cash rental rates for farmland in 2021.

Producers also became more optimistic about trade with China this month. Nearly six out of 10 respondents (59%), said they expect to see China fulfill the food and agricultural import requirements outlined in the Phase One trade agreement with the U.S., compared with just 47% in September. When asked for their overall perspective on U.S. ag exports, the percentage of producers expecting exports to rise over the next five years increased to 65% in October, up from 58% in September.



K-State mourns loss of esteemed agricultural economics professor

Barry Flinchbaugh, whose remarkable career in agricultural policy at Kansas State University spanned nearly a half-century, died Nov. 2 at Stormont Vail Hospital in Topeka.  He was 78 years old.

The charismatic Flinchbaugh was well known as one of the United States' leading experts on agricultural policy and agricultural economics. For more than four decades, he was a top adviser to politicians of both major political parties, including secretaries of agriculture, chairs of the U.S. House and Senate Agriculture committees, and numerous senators and state governors.

Flinchbaugh was involved to some degree in every U.S. farm bill written since 1968, and served on many national boards, advisory groups and task forces, providing input on domestic food and agricultural policy.

He served as the chairman of the Commission on 21st Century Production Agriculture, which was authorized in the 1996 Federal Activities Inventory Reform, or FAIR, Act, also known as the Freedom to Farm Act.

"Barry Flinchbaugh will be deeply missed by many generations of the K-State family," said K-State President Richard Myers. "His expertise and vast contributions to the university, the state and agricultural economics will have a lasting impact on the world for years to come through those whom he taught and counseled. His experiences have touched the lives of many and his wonderfully feisty, thoughtful, helpful and kind personality will be his legacy forever."

"Agriculture has and always will be the backbone of Kansas’ economy," said Gov. Laura Kelly said. "Dr. Flinchbaugh helped shape agriculture policy for more than a half-century. While we will miss him and his enormous contributions to our state, he leaves behind a legacy as a Kansan who improved the livelihoods of Kansas farmers, ranchers, producers — and agriculture workers across the nation."

U.S. Sen. Pat Roberts, Kansas, who worked closely with Flinchbaugh on farm bill legislation, wrote his condolences on Twitter.

"Franki and I are deeply saddened by the news of Dr. Barry Flinchbaugh's passing earlier today," Roberts said. "Dr. Flinchbaugh was nothing short of a legend in his field. His expertise made him one of the most coveted and trusted advisers for agricultural policy for decades.

"Dr. Flinchbaugh's legacy as an educator and advocate will live on through his work at K-State and his lifetime of dedication to agriculture. I will not only miss his guidance, but I will also miss his friendship, wit and humor."

Flinchbaugh grew up in York, Pennsylvania, and earned bachelor's and master's degrees from Penn State University. He earned a doctoral degree in agricultural economics from Purdue University before joining the K-State faculty in 1971.

At the time of his death, he was professor emeritus in K-State's Department of Agricultural Economics, teaching a 400-level course in agricultural policy each fall. He also served several years as chair of the Landon Lecture Patrons, who support the university's prestigious Landon Lecture Series.

A dynamic speaker, it was reported that Flinchbaugh would receive as many as 100 speaking invitations per year. He authored more than 100 publications and co-authored a textbook on agricultural policy.

Flinchbaugh's no-nonsense style was both loved and cursed; he was known to lay out the facts of an issue whether it was politically correct or not. In a biographical sketch detailing his speaking qualifications, a farmer in Colby once said about Flinchbaugh: "I do not agree with a damn thing you said, but the next time you are in town making a speech, I will be here."

K-State honored Flinchbaugh with its prestigious Outstanding Teacher Award three times during his career. It is estimated that he taught agricultural policy to more than 4,000 undergraduate students. He connected the university to hundreds of thousands of people by giving presentations to farmers, agricultural business groups and more through its extension mission.

"Our students, faculty and staff are deeply saddened by the news of the passing of Dr. Barry Flinchbaugh, and our thoughts are with the Flinchbaugh family during this challenging time," said Ernie Minton, dean of the K-State College of Agriculture and director of K-State Research and Extension. "Barry was known as the absolute authority on agricultural policy for decades. Few faculty members have had the opportunity to impact so many students and at the same time affect national agricultural policy as Dr. Flinchbaugh.

"We are going to miss his presence on campus, his expertise, his direct talk, his friendship and his affable personality and wit," Minton said. "We will never forget the mischievous smile underneath his white beard and the bump of his walking cane on the floor following the delivery of a good one-liner."

Upon his retirement in 2004 as the state leader of agricultural economics, a news release from K-State Research and Extension quotes Flinchbaugh as saying he wants college students and experienced farmers alike to have fun while they're learning.

"But I also want them to be uncomfortable… to think outside the box. Occasionally you'll make somebody mad. That's one of the risks. But they'll remember what you said."

Flinchbaugh said one of his proudest professional moments came in 1971-1974 when he worked on a farm tax issue. During that time, he gave 300 presentations and visited all 105 counties in Kansas at least once.

"Barry Flinchbaugh was a man who loved his family, students, university and country," said Mark Gardiner, Gardiner Angus Ranch, Ashland. "He cared about all people, from the president of the United States to young people trying to learn. We all were better educated after learning from Barry, yet we were better people from experiencing his zest for life."

Flinchbaugh is survived in the family's Manhattan home by his wife, Cathy. Flinchbaugh’s family will conduct a private family burial and plans to host a public celebration of his life sometime after the pandemic. Contributions in honor of Flinchbaugh may be made to the Flinchbaugh Scholarship Fund, the Flinchbaugh Agricultural Policy Chair, or a charity of their choice in his name.

In a statement, U.S. Sen. Jerry Moran, Kansas, said the following:

"Dr. Barry Flinchbaugh was an icon of agricultural policy in Kansas and throughout the nation. Dr. Flinchbaugh was well known for his involvement in helping craft farm bills for nearly five decades, and his authority on agriculture issues made him a trusted advisor to me and many prominent federal officials of both parties throughout his lifetime.

"More importantly, Dr. Flinchbaugh was my friend. We met when I called him more than 30 years ago to ask a question about Kansas tax policy. Ever since, I've admired and respected (loved) him. He spoke his mind, told me what he thought and made me a better senator and person. His death is a huge loss to me and all of his many friends, and it is hard to find the words to capture a man revered by so many. There may be no Kansan whose company I enjoyed more.

“Each year I would make a surprise visit to his ag policy class at K-State. His trademark sarcasm, wit and quips that made him a talented professor and a sought-after speaker was always on full display at the front of the classroom. I saw he loved and cared about his students and these feelings were mutual.

"There is no doubt Dr. Flinchbaugh's presence in ag policy will be felt for generations to come through the thousands of students he taught and mentored during his decadeslong career as a professor at K-State. His loss will be felt deeply within the ag community, and Robba and I will be praying for Dr. Flinchbaugh's family and loved ones during this time."

Amy Button Renz, president and CEO of the K-State Alumni Association, said, "Barry Flinchbaugh was a wonderful member of the K-State family and a friend to not only the K-State Alumni Association but to me and many of our staff. He led multiple Traveling Wildcats tours for the association and had a very loyal following. His kindness, wit and infamous personality will truly be missed. My heartfelt sympathies are with Cathy and his children.

"Each year, the K-State Alumni Association presents the Flinchbaugh Family Wildcat Pride Award to a current or emeritus K-State faculty or staff member for his or her advocacy of alumni relations, with a special emphasis on support and participation in alumni programs that engage members of the Wildcat family. An original recipient of the award in 2011, Barry and Cathy endowed the award with a gift in 2015.

"Barry's family was very important to him and he loved to share stories about his children," Renz said. "We are honored to have an award named in honor of his family at the Association. Barry had unbelievable pride in Kansas State University and understood the important role that faculty and staff hold in strengthening the bond between alumni and their alma mater."



USTR Review of Indonesia Trade Arrangement Secures Benefits for U.S. Dairy

The U.S. dairy industry commended the U.S. Trade Representative (USTR) for using its review of Indonesia’s Generalized System of Preferences (GSP) status to hold Indonesia accountable for issues that had threatened the smooth flow of U.S. dairy exports. USTR announced yesterday the conclusion of its review of Indonesia’s eligibility to continue receiving preferential tariff access to the U.S. market under the GSP program.
 
“The U.S. dairy industry and all of its supplying dairy farmers rely on the enforcement of fair trade rules. We appreciate the work invested by the U.S. government to use the GSP review process to ensure that Indonesia complies with its trade obligations under the terms of the GSP program,” said Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF).  

 “This outcome demonstrates how the GSP review process can be utilized to scrutinize a country’s compliance with the program and to achieve improvements in U.S. market access where changes are needed. We look forward to working with both governments to ensure that all U.S. exporters eager to ship to Indonesia have the ability to do so smoothly.”   
 
NMPF and the U.S. Dairy Export Council (USDEC) were among the organizations that originally filed a complaint with USTR regarding Indonesia’s GSP compliance in 2018, citing its law mandating local partnership arrangements in order to secure import licenses. In response to dairy’s concerns raised through the GSP process, Indonesia removed that requirement.  
 
 “We appreciate USTR ensuring that Indonesia meet its market access obligations under the GSP review process. Through that process, USTR helped address Indonesian policies that had endangered U.S. dairy exports to Indonesia, one of our largest markets. The government of Indonesia has been responsive to these concerns, and we look forward to building further upon this positive development,” said Tom Vilsack, president and CEO of USDEC.  
 
The U.S. dairy industry exported $238 million in dairy products to Indonesia in 2019, making it the seventh largest market for U.S. dairy exports. That represents an increase of 80% percent by value from 2017. With a potential for even greater growth for U.S. dairy in this key market, it’s important that U.S. products can flow smoothly.



NGFA supports increasing revenue threshold for Class II RRs, but urges STB to consider enabling rail customers to bring regulatory challenges        

In a statement submitted this week, the National Grain and Feed Association (NGFA) supported the federal Surface Transportation Board’s (STB) proposal to increase to $900 million the revenue threshold used to determine whether a freight railroad continues to be classified as a Class II carrier.

But in so doing, NGFA urged the agency to be cognizant of the increasing size, revenues and regional dominance of Class II railroads when determining whether and when to subject such carriers to prudent regulation to protect the interests of rail customers.

The STB proposal, also supported by NGFA’s Montana affiliate – the Montana Grain Elevator Association, was triggered by a petition submitted to the agency by Montana Rail Link Inc. (MRL), a regional Class II railroad, which sought the increase from the $504,803,294 revenue threshold at which a carrier currently is deemed to be a Class I railroad.

MRL said it anticipated reaching the current Class I threshold by 2022, at which time it would be required to submit accounting, financial and other regulatory reports to the STB. In its petition, the railroad estimated these additional regulatory requirements would cost “at least an additional $150,000 annually,” plus the costs associated with converting its accounting system, training employees, and maintaining and recording the reports. Further, it said, being classified as a Class I railroad would make it ineligible for shortline rehabilitation tax credits – the carrier said it currently receives $3 million annually from this tax credit to invest in its infrastructure. NGFA further noted MRL also no longer would qualify for the Federal Railroad Transportation Administration’s Railroad Rehabilitation and Infrastructure Express Program that provides funds to Class II and III carriers to repair tracks, many located in rural areas.

NGFA said it generally agrees with the STB’s statement, that after reviewing MRL’s petition, “it does appear that regional railroads, such as MRL, even with revenues approaching the current threshold, function more like significant Class II carriers and do not possess the comparative attributes (e.g., operational characteristics) of Class I carriers.” NGFA also concurred with the STB’s statement that, “[m]oreover, MRL provides a persuasive argument that the benefits of certain Class II carriers becoming Class I carriers under the Board’s existing revenue thresholds would not outweigh the burdens that would be imposed on the newly classified carriers.”

But NGFA noted that Class II railroads are becoming increasingly large and market dominant in the regions in which they operate.  For instance, NGFA said the STB should allow rail customers to challenge Class II rail rates they believe are unreasonable under simplified procedures currently being developed by the agency, as well as to direct that Class II railroads provide competitive switching to alternative carriers to enhance rail competition if the STB reexamines such rules in the future.  

“…[A]s with many Class II railroads, MRL is a significant regional carrier that has a virtual monopoly on all rail traffic in Montana, and it often exercises that market power with its customers in a manner not dissimilar from Class I carriers,” NGFA said.  “As Class II carriers continue to increase their size, geographic reach and revenues, the latter of which would be permitted under the (rulemaking), NGFA believes the STB should be vigilant to also adjust its regulatory oversight and standards that apply to the practices and rates established by such railroads.”  

MRL is one of the largest U.S. Class II railroads, operating more than 900 route miles of track in Montana and Idaho, and interchanges with the BNSF Railway Co. More than 23 percent of MRL’s traffic volume is grain.

The STB’s proposal would retain the current revenue threshold for Class III carriers as being $40.4 million or less. The new thresholds would be calculated in 2019 dollars and indexed for inflation.



ADM Reports Third Quarter Earnings of $0.40 per Share, $0.89 per Share on an Adjusted Basis
• Net earnings of $225 million; adjusted net earnings of $499 million
• Outstanding results, great execution in all three businesses
• Continued focus on Readiness to drive growth, innovation, sustainability

ADM (NYSE: ADM) today reported financial results for the quarter ended September 30, 2020.

“We delivered an outstanding quarter, and I am proud of our team’s continued great performance,” said Chairman and CEO Juan Luciano.

“Across the enterprise, ADM colleagues are doing what it takes to help our customers and our company succeed and grow. Our strategic initiatives, combined with exceptional execution, are driving strong results across all of our businesses. Readiness is enhancing our performance, accelerating our work in areas ranging from operations to sales. Our strong cash generation is allowing us to retire higher-cost debt while retaining balance sheet flexibility. And Nutrition continues its impressive upward trajectory, delivering a fifth consecutive quarter of 20-plus percent year-over-year operating profit growth.

“From our Strive 35 sustainability goals, to our partnership with Spiber to produce plant-based polymers, to the announcement of a significant expansion in probiotics with our new state-of-the art facility in Valencia, we’re advancing our work to enrich the quality of life around the globe. We’re excited about our future as we look ahead to another strong quarter, with positive momentum continuing through 2021.”

Results of Operations
Ag Services & Oilseeds results were higher than the third quarter of 2019. Both Ag Services and Crushing saw expanding margins during the quarter, resulting in approximately $155 million in total negative timing effects, which are expected to reverse in the coming quarters.

    Ag Services executed extremely well to capitalize on strong North American industry export margins and volumes. Results were lower in South America, as the pace of Brazilian farmer selling slowed as expected following the aggressive selling in the first half of the year. Global Trade’s continued focus on serving customers contributed significantly to results, as did a $54 million settlement related to 2019 U.S. high water insurance claims. Negative timing impacts of almost $80 million led to lower overall results versus the prior year.

    In Crushing, strong execution in an environment of tighter soybean supplies and solid global demand for meal and oil supported improved execution margins in North and South America, partially offset by lower year-over-year margins in EMEAI. Negative timing impacts of approximately $75 million versus a gain of approximately $50 million recognized in the prior-year quarter led to lower year-over-year results.

    Refined Products and Other delivered significantly higher year-over-year results, driven by improved biodiesel margins around the globe. Packaged oils in South America also contributed.

    Equity earnings from Wilmar were substantially higher versus the prior-year period.

Carbohydrate Solutions results were significantly higher year over year.
    Starches and Sweeteners subsegment results were substantially higher versus the third quarter of 2019. In North America, balanced ethanol industry supply and demand drove improved wet mill ethanol margins versus the prior year. Demand for starches in North America was substantially stronger than earlier in the year, and higher than the prior-year quarter. Reduced food service demand affected sweetener and flour volumes, though retail demand for flour remained solid. Strong risk management and improved net corn costs contributed positively to results. EMEAI delivered improved results on higher demand and reduced manufacturing and raw material costs.

    In Vantage Corn Processors, distribution gains on wet mill ethanol, in addition to significantly improved year-over-year industry ethanol margins, helped to offset fixed costs from the two temporarily idled dry mills, driving higher year-over-year results. Increased volumes and margins of USP-grade industrial alcohol for hand sanitizer also supported improved performance.

Nutrition delivered its fifth consecutive quarter of 20-plus percent year-over-year profit growth.
    Human Nutrition results were substantially higher versus the prior-year quarter, with improved results across the business portfolio. Flavors delivered another exceptional quarter, driven by increased revenue globally and improved mix and margins. Plant-based proteins helped drive a solid performance in Specialty Ingredients. Sales growth in probiotics, along with income from the Spiber fermentation agreement, contributed to strong results in Health & Wellness.

    Animal Nutrition was higher year over year. Continued delivery of Neovia synergies, strength in livestock feed and year-over-year improvement in amino acids were partially offset by softer aquaculture feed demand as well as negative foreign currency impacts.

Other Business results were lower, driven by lower ADM Investor Services earnings and captive insurance underwriting losses, including a $17 million settlement impact for the high water claim with Ag Services & Oilseeds.



AGCO Reports Third Quarter Results, Raises Full-Year Guidance

AGCO, Your Agriculture Company (NYSE: AGCO), a worldwide manufacturer and distributor of agricultural equipment and solutions, reported its results for the third quarter ended September 30, 2020. Net sales for the third quarter were approximately $2.5 billion, an increase of approximately 18.4% compared to the third quarter of 2019. Reported and adjusted net income was $2.09 per share for the third quarter of 2020. These results compare to reported net income of $0.10 per share, and adjusted net income, excluding a non-cash deferred income tax adjustment and restructuring expenses, of $0.82 per share for the third quarter of 2019. Excluding unfavorable currency translation impacts of approximately 1.6%, net sales in the third quarter of 2020 increased approximately 20.0% compared to the third quarter of 2019.

Net sales for the first nine months of 2020 were approximately $6.4 billion, a decrease of approximately 1.5% compared to the same period in 2019. Excluding unfavorable currency translation impacts of approximately 3.1%, net sales for the first nine months of 2020 increased approximately 1.6% compared to the same period in 2019. For the first nine months of 2020, reported net income was $3.86 per share, and adjusted net income, excluding a non-cash impairment charge and restructuring expenses was $4.06 per share. These results compare to reported net income of $2.77 per share, and adjusted net income, excluding a non-cash deferred income tax adjustment and restructuring expenses, of $3.50 per share for the first nine months of 2019.

Third Quarter Highlights
    Reported regional sales results: Europe/Middle East (“EME”) 22.7%, North America 8.6%, South America 14.4%, Asia/Pacific/Africa (“APA”) 25.2%
    Constant currency regional sales results : EME 18.9%, North America 9.1%, South America 48.5%, APA 21.3%
    Regional operating margin performance: EME 13.3%, North America 10.0%, South America 6.1%, APA 10.1%
    Year-to-date free cash flow increased over $309 million from the first nine months of 2019
    Funding position improved with net debt below September 2019 levels
    Raised full-year outlook for net sales and net income per share

“AGCO’s third quarter results were highlighted by sales growth and margin expansion across all regions,” stated Martin Richenhagen, AGCO’s Chairman, President and Chief Executive Officer. "Our focused operational performance allowed us to ramp up production and recover from supply chain interruptions experienced in the second quarter. During the third quarter, we made significant progress towards fulfilling our strong order board while reducing dealer and company inventory levels. We have strong order boards heading into the fourth quarter, however, we still face a demanding environment to manage our manufacturing, supply chain and aftermarket operations. I would like to thank all our employees again for their extraordinary efforts to support our dealers and customers under these challenging conditions. AGCO is also maintaining its planned funding levels supporting premium technology, smart farming solutions and enhanced digital capabilities in 2020. These investments are delivering new features and functionality across our product portfolio which positions us to improve our global market position and profitably grow our business.”

“Harvests are progressing ahead of schedule in the northern hemisphere and global crop production is on track for a record year despite the ongoing COVID-19 pandemic,” continued Mr. Richenhagen. “Global grain consumption is recovering, consistent with improving economic activities and increased grain exports to China. Following reduced forecasts for ending grain inventories, soft commodity prices have risen in the third quarter, which is positive for farm economics.”

“Global industry demand for farm equipment is now expected to be relatively flat in 2020 versus 2019 with improved demand in North and South America offsetting lower demand in Europe,” continued Mr. Richenhagen. “Industry retail tractor sales in North America increased in the first nine months of 2020 compared to the same period in 2019. Growth in the sales of low horsepower tractors was partially offset by weaker industry demand for high horsepower tractors. The fleet age for large equipment remains extended as replacement demand continues to be deferred in the North American market. Industry retail sales in Western Europe decreased in the first nine months of 2020 due primarily to COVID-19 related production constraints. Market demand was weakest in the United Kingdom, France and Spain, and was partially offset by growth in Germany which has benefited from tax incentives during 2020. The negative impact of lower wheat harvests across most of Western Europe was mostly offset by stronger grain export demand and supportive wheat prices. European dairy and livestock fundamentals have stabilized after weakening earlier in the year. South America industry retail tractor sales increased during the first nine months of 2020, with growth in Brazil and Argentina partially offset by weaker demand in the smaller South America markets. Strong crop production in Brazil and Argentina, as well as favorable exchange rates are supporting positive economics. Farmers are replacing their aged fleet following years of soft demand due to economic weakness and challenging political environments.”