Wednesday June 2 Ag News

 Small Grains Improvement Team releases two new winter wheat varieties  

The collaborative USDA-University of Nebraska Small Grains Improvement Team has developed two promising new winter wheat varieties: a hard white winter wheat (NW13493) and a hard red winter wheat (Epoch). Both new varieties could be available for planting in growers’ fields as early as fall 2021.

NW13493 was released primarily for its high-value white grain and broad adaptation to rainfed conventional and organic wheat production systems throughout Nebraska. NW13493 is sprouting- resistant and has a good disease resistance package and excellent milling and baking quality. NW13493 has been licensed to Bay State Milling Company and will be produced under contract with their agents. This critical partnership will maintain the necessary marketplace segregation for hard white winter wheat and protects growers.  

Epoch, a hard red winter wheat tested as NE15420, is ideally suited for irrigated production and intensive management in western Nebraska, where it has excelled for grain yield and test weight in the Nebraska State Variety Trial. Epoch is a short stature, semi-dwarf line with excellent straw strength to reduce lodging under irrigation.  It has a good disease resistance package with acceptable milling and baking quality.  

“These new-to-the-market wheat varieties have exceptional higher yield and stronger disease resistance package,” said Hector Santiago, assistant dean of the University of Nebraska-Lincoln’s Agricultural Research Division.

“These varieties represent a major achievement of the University of Nebraska Small Grains Breeding Program that without doubt will positively impact wheat production in Nebraska, as they were developed to suit stakeholders growing areas and conditions in Nebraska and the Midwest.”

Stephen Baenziger, a UNL wheat breeder who retired last month after 35 years with the University of Nebraska-Lincoln, was instrumental in the development of these varieties. During Baenziger’s tenure, he has released, co-released or is in the process of releasing 44 winter wheat, seven winter barley and 13 winter triticale cultivars. Katherine Frels was recently hired to be the new small grains breeder and continue the tradition of producing new varieties.

Both the NW13493 and Epoch varieties were developed with support from the Nebraska Wheat Board. The Husker Genetics Foundation Seed Program will maintain breeder and foundation seed of NW13493 and Epoch, and the Nebraska Wheat Board has requested a license to assist with the marketing of this variety. See your local Certified Seed Dealer for variety characteristics and more information on these varieties.



POET Acquires Flint Hills Resources’ Biofuel Business

POET, the world’s largest producer of biofuels, has acquired the bioethanol assets of Flint Hills Resources’ in their entirety, expanding the company’s production capacity by 40 percent.

POET is a world leader in green bioproducts, with an ever-growing suite of renewable solutions including bioethanol, renewable CO2, purified alcohol, high-protein animal feed, asphalt additives and corn oil used for renewable diesel.

The acquisition includes six bioprocessing facilities located in Iowa (Arthur - Fairbank - Iowa Falls - Menlo - Shell Rock) and Nebraska (Fairmont) and two terminals (Buda, Texas and Camilla, Georgia). POET will now operate 33 bioprocessing facilities across eight states with a combined annual capacity of 3 billion gallons.

“This acquisition will increase POET’s ability to bring even more high-quality, plant-based biofuels and bioproducts to the world—allowing us to have an even bigger impact on fighting climate change and cleaning our air,” said POET Founder and CEO Jeff Broin.

Recent studies demonstrate the ability of biofuels to immediately contribute to decarbonizing the transportation sector and lowering greenhouse gas (GHG) emissions.

“We’ve been a leader in the biofuels business for 33 years and have never wavered in our belief in the power of agriculture and biofuels to offer the most accessible, near-term solution to climate change. With this move, we’re demonstrating our commitment to the future of low-carbon, plant-based liquid fuels,” said Broin.

“These high-quality bioprocessing facilities have been well-maintained and strategically compliment POET’s current geographic footprint—allowing us new flexibility and greater market access,” said POET President and Chief Operating Officer Jeff Lautt. “We look forward to adding these new locations to our portfolio and to the many opportunities that lie ahead as a result of this significant addition to the POET network.”

“We are on the cusp of a new sustainable economy that will be powered by renewable energy. Bioethanol is critical to this new economy and will continue to be so for years to come,” said POET Chief Commercial Officer Bob Casper.



2021 World Pork Expo Showcases the Pork Industry

The World Pork Expo makes its return to the Iowa State Fairgrounds in Des Moines, June 9-11. The Expo is presented by the National Pork Producers Council (NPPC) and this will mark the year’s 33rd annual event. Thousands of producers and industry professionals will gather to learn the latest technologies, innovations, enjoy free pork and more.

“We’re excited to gather for the first time since 2018. This year’s Expo has an outstanding lineup of seminars, networking opportunities, and more that aren’t to be missed,” said NPPC President Jen Sorenson, communications director for Iowa Select Farms in West Des Moines, Iowa.
 
Trade Show Spans More than 300,000 Square Feet
During the Expo, attendees are encouraged to visit the trade show. This year, more than 700 vendor booths representing companies from North America and around the world will be presenting and displaying products.

“Our trade show once again sets the stage for being the world’s largest pork-specific trade show,” said Doug Fricke, Expo director of trade show marketing for NPPC. “We can’t wait to learn from and experience new products that will be showcased.”

Outside of the trade show, more than 50 hospitality tents will be placed throughout the fairgrounds along Grand Avenue and the Ruan Plaza. These hospitality tents are great for networking and visiting with company representatives.
 
19 Educational Sessions
Also included with admission is the chance for attendees to take part in educational sessions. Thirteen business seminars will inform attendees about ecosystems, new production systems, climate neutrality and more. Additionally, six Pork Academy seminars will take place during the three days of the Expo where producers can learn more about nutrition, sustainability, data collection and more.

The full schedule of events, including seminars, can be found at www.worldpork.org.
 
Increased Biosecurity and Health Safety Measures
To carry out a successful event that is essential to our nation’s food security and the rural economy, World Pork Expo has placed additional biosecurity and health measures in place. Biosecurity measures include footbaths, hand washing stations and proper footwear will be required. To help mitigate the transmission of COVID-19, we ask that individuals stay home if they are exhibiting any symptoms including fever, chills, shortness of breath or loss of taste or smell.

The cooperation of all attendees and vendors is appreciated.
 
Online Registration Open Until June 3
There’s still time to join thousands of pork industry professionals at this year’s Expo. To register and for all the latest updates and details to plan your visit, including hotels, maps and exhibitors, visit the Expo’s website. Attendees can also register on-site during the show by visiting the Animal Learning Center. And don’t forget to follow us and use #WPX21 on Twitter, Facebook and Instagram to share your World Pork Expo experience.



MaxYield Co-op & NEW Co-op Merger Proposal to Proceed to Member Vote

MaxYield Cooperative’s board of directors recently announced that the merger proposal between MaxYield and NEW Cooperative, Inc., headquartered in Fort Dodge, IA, will proceed to a member vote in June.

Howard Haas, chairman of MaxYield’s board, said that directors of MaxYield and NEW Co-op met individually at the end of March and each board voted in favor of proceeding with the merger proposal.

Substantial income enhancements, cost savings, and broader service offerings generated from the combined and more diverse cooperative business platform were highlighted in the presentations at the board meetings. “The increase to patronage earnings available to our members using the combined cooperative, as well as greatly improved cash flow will accelerate the redemption and retirement of MaxYield allocated equity earned in prior years.  This has been a major focus of unification discussions and are just a few of the real benefits our members would see,” Haas said.

There are several other benefits to a potential merger with NEW Co-op the MaxYield board identified. “We’ve identified additional grain marketing and feed manufacturing opportunities and access to the Canadian National and Burlington Northern rail markets will enhance grain marketing and fertilizer sourcing opportunities for members. NEW’s Port of Blencoe project would also provide improved crop nutrient sourcing,” added Haas.

A combined organization will have the balance sheet and fiscal strength to capitalize on opportunities for members and have long-term staying power in the industry. It would also allow an accelerated schedule for facility, rolling stock and equipment upgrades across MaxYield’s trade area, he added.

NEW Co-op will continue to operate MaxYield’s Garner and Britt feed mills after the potential merger. NEW Co-op would also continue to offer MaxYield’s SciMax Solutions brand as the grower learning group platform alongside NEW’s MAPS brand. NEW would continue the harvest on-farm grain pick up program at least through the fall of 2021 and will be reevaluated prior to the fall of 2022.

“It’s also important to know that all full-time MaxYield team members will be offered jobs with NEW Co-op, so our members and clients will work with the same great team members that they do today,” Haas said.

Efforts will now move forward to finalize the terms of a merger agreement between the two cooperatives. Haas said member informational meetings will be held in early June. A membership vote will occur with merger plans and ballots sent out to all eligible MaxYield voting members by mid-June with a planned final vote count of July 2, 2021.  If approved, the merger would become effective August 1, 2021.

More detailed information about the merger proposal will be sent to MaxYield’s members soon, Haas added. “We look forward to discussing this opportunity with our members at the informational meetings across our trade area in June.”

Member Informational Meetings
JUNE 3 - 9:00 AM - Britt - City Hall Meeting Room, 170 Main Ave S, Britt, IA
JUNE 3 - 2:00 PM - Belmond - Cattleman’s Restaurant (Country Club), 1608 3rd St NE, Belmond, IA
JUNE 4 - 9:00 AM - West Bend - MaxYield’s Tire & Auto Service Center, 310 4th Ave NE, West Bend, IA
JUNE 4 - 2:00 PM - Algona - Knights of Columbus Hall, 1501 E. Walnut St, Algona, IA
JUNE 7 - 9:00 AM - Emmetsburg - The Shores (Golf & Country Club), 14 N. Lawler St, Emmetsburg, IA
JUNE 8 - 9:00 AM - Spencer - Clay County Regional Events Center, 800 W. 18th St, Spencer, IA
JUNE 8 - 2:00 PM - Superior - Softail Saloon, 811 1st Ave, Superior, IA

For more information, MaxYield members should contact their local MaxYield director, nearest MaxYield location or visit www.maxyieldcoop.com/merger.

About MaxYield Cooperative
MaxYield Cooperative is a member-owned, diversified agricultural cooperative founded in 1915 and is headquartered in West Bend, IA. The cooperative has 25 locations and three Cenex convenience stores in Iowa. MaxYield also provides grain origination and accounting services for three Iowa feed mills. For more information, visit MaxYield online at www.maxyieldcoop.com.

About NEW Cooperative
Formed in 1973, NEW Cooperative, Inc., with headquarters in Fort Dodge, IA, is a farmer-owned grain, agronomy, feed and energy cooperative with 39 locations serving 5,500 member-owners throughout western and northwest Iowa. In addition to grain services, NEW Cooperative also provides feed manufacturing, crop inputs and energy products.



IFBF roundtable: "Carbon Credit Markets: What Farmers Need to Know"

The Iowa Farm Bureau Federation (IFBF) opened registration today for its upcoming virtual roundtable diving into key considerations for farmers seeking to adopt climate-friendly carbon sequestration and other practices with the hope of increasing their on-farm income.

IFBF’s “Carbon Credit Markets: What Farmers Need to Know” virtual roundtable will help answer questions and provide valuable insight as farmers seek to reduce their carbon footprint and navigate the ever-changing agriculture environment as private-sector companies present new opportunities and federal programs are developed.

“This first-of-its-kind webinar will bring together scientific, business, association and private-sector climate program stakeholders to help our members build a better  understanding of future carbon credit markets and economic and environmental opportunities presented,” said Sam Funk, IFBF director of ag analytics and research. “We know that not all climate programs are carbon-only initiatives, so our speakers will provide our members the key data they need to know to make informed decisions on their farm.”

The virtual roundtable will answer farmers’ questions including: What do carbon credit programs mean for farmers in terms of cost and commitment? What does a farmer need to share, and how long is a farmer locked into an arrangement, if new Federal programs arise? What are some of the burdens or challenges involved, and what practices or measured outcomes are required to be met to enroll in a program?

The roundtable will take place Wednesday, July 14, from Noon- 2:30 p.m. (CST) and is free for Farm Bureau members and $50 for non-members.  Info at www.iowafarmbureau.com. 

The virtual event will kick off with an overview from American Farm Bureau Federation (AFBF) economist, Shelby Myers, and Dr. Joe Outlaw, professor and extension economist at Texas A&M University.  The topic overview will be followed by a roundtable discussion with representatives from companies currently offering carbon credit programs including Bayer and Corteva.  Participants will also have an opportunity to directly engage with the panel speakers by submitting questions prior to the webinar and/or using the Zoom Q&A feature during the live webinar.

“As farmers explore considerations for private-sector carbon sequestration programs, we know there are myriad questions regarding these program commitments,” said Funk.  “Farmers wonder about the limitations of certain farming practices, such as tillage to control resistant weeds, if enrolled in a carbon credit program; the farm landowner/renter relationship in regards to program participation; and concerns about early adopters being placed at a financial disadvantage for new programs.  This webinar will provide farmers the insight needed to make informed decisions on the potential consequences of engaging or withholding from participating in available climate market programs.”




Applications now being accepted for Iowa Farm Bureau's "Grow Your Future" Award

From edible crickets and customized meat packages to amplifying efforts in sustainability, today’s young farmers are putting forth unique ideas that enhance Iowa’s diverse agricultural portfolio and boost rural communities. To help elevate these businesses, Iowa Farm Bureau Federation (IFBF) is seeking applications for their “Grow Your Future” Award for farmer members, ages 18-35, who have created a niche or specialty business. The top three contest winners will receive cash prizes to grow their business with first place taking home $7,500, second place $5,000 and third place $2,500.

“Young farmers continue to ask questions and seek innovation to create new businesses that solve a problem, fill a need or consumer demand. In Iowa agriculture, new ideas are welcome, and there are creative minds out there willing to put them to work to grow Iowa agriculture and rural communities,” said Craig Hill, president of IFBF. “The Grow Your Future Award not only provides a significant monetary prize to help these entrepreneurs expand their business, but the contest is an experience, giving contestants an opportunity to uniquely promote their business and gain valuable skills.”

Online applications are due by Sept. 1, 2021, along with a short contestant-created video about the business, its impact on the local community and future goals. To learn more about eligibility for the Grow Your Future Award and how to enter, visit www.iowafarmbureau.com/growyourfuture.

Ten finalists will be selected from the submitted applications. A public vote will launch on Dec. 6 during the IFBF annual meeting and run through Dec. 12 to narrow the playing field. The top six “favorite” entrepreneurs that emerge from the voting ring will compete in a pitch-off during the 2022 Young Farmer Conference on Sat., Jan. 29, and the prize-winning top three will be announced.

“The Grow Your Future Award and IFBF’s Young Farmer program presented us a great opportunity to showcase our business and network with other young farmer entrepreneurs with the same passion for rural vitality,” says James Holz whose business, Iowa Cover Crop, was the top finalist in 2021. “The experience and connections made were truly valuable, both personally and professionally, and I highly encourage other young farmers with a business vision to enter the competition.”



Phosphorus Loss from Surface Runoff Is Focus of Webinar

Phosphorus loss with surface runoff from corn and soybean fields will be the topic of the Iowa Learning Farms webinar at noon on Wednesday, June 9.

Research from Iowa State University Extension and Outreach has demonstrated that no-tillage and cover crops are very effective conservation practices to reduce soil erosion and sediment-bound phosphorus (P) loss from agricultural fields. However, research in other states has shown that these practices may not reduce and may even increase loss of dissolved P with surface runoff compared with tillage or no use of cover crops.

Although dissolved P is often a minor proportion of the total P in runoff when compared to the sediment-bound P fraction, it is the most effective P fraction at causing water quality impairment. Antonio Mallarino, professor in agronomy and extension specialist at Iowa State University, will share Iowa field research results that evaluated the effects of these management practices on soil, total P and dissolved P with surface runoff.

Mallarino’s research focuses on soil fertility, nutrient management and impacts of management practices on phosphorus loss from crop fields and water quality.
Webinar Access Instructions

To participate in the live webinar, shortly before noon on June 9:
    Click this URL, or type this web address into your internet browser: https://iastate.zoom.us/j/364284172.
    Or, go to https://iastate.zoom.us/join and enter meeting ID 364 284 172.
    Or, join from a dial-in phone line by dialing +1 312 626 6799 or +1 646 876 9923; meeting ID 364 284 172.
    The webinar will also be recorded and archived on the ILF website, so that it can be watched at any time. Archived webinars are available at https://www.iowalearningfarms.org/page/webinars.

A Certified Crop Adviser board-approved continuing education unit has been applied for, for those who are able to participate in the live webinar. Information about how to apply to receive the CEU will be provided at the end of the live webinar.



Barchart Forecasts Cut to USDA Corn Yield and Production Figures in Initial 2021 Production Estimates

Barchart, a leading provider of data services, software and technology to global commodity buyers, agriculture, and the food supply chain, announces their initial 2021 Yield and Production forecasts for U.S. corn and soybeans - which both indicate downside risk to the USDA’s projected figures from May’s WASDE report.

Highlights:
    End of season U.S. corn production is forecast at 14.4B bu with a yield of 173.2 bu/ac.  This compares to the USDA’s 15.0B bu of production and 179.5 bu/ac yield.
    End of season U.S. soybean production is forecast at 4.3B bu with a yield of 49.3 bu/ac.  This compares to the USDA’s 4.4B bu of production and 50.8 bu/ac yield.

Released for free to the public on the first Tuesday of each month during the growing season, and available to clients through daily updates, Barchart’s Crop Production and Yield Forecasts provide users with decision support for crop marketing and ingredient purchasing ahead of traditional forecasts from the USDA.

“Throughout the 2020 growing season, we provided commodity buyers, ag lenders, and crop marketers with timely U.S. production and yield forecasts before each official USDA crop production forecast each month,” says Barchart CEO Mark Haraburda. “Our initial 2021 forecasts suggest potential downside for both corn and soybean production relative to USDA numbers, and we’re pleased to provide these insights to the public.”



Retail Fertilizer Prices Inch Higher  

Retail fertilizer prices tracked by DTN for the fourth week of May 2021 show continued slightly higher prices, a trend that has been in place over the last two weeks.  No fertilizer prices were significantly higher, which DTN designates as 5% or more.

UAN32 and DAP prices increased 4% compared to last month at $407/ton and $652/ton, respectively.  The average price of UAN28 was 3% higher than last month at $361/ton.  Urea prices gained 2%, with an average retail price of $523/ton.  Three fertilizers' prices increased 1%. MAP was up to $709/ton, 10-34-0 had an average price of $619/ton while anhydrous was $719/ton.  Potash prices increased by less than 1% to $443/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.57/lb.N, anhydrous $0.44/lb.N, UAN28 $0.65/lb.N and UAN32 $0.64/lb.N.

With retail fertilizer prices moving higher over recent months, all fertilizers are now higher in price from a year ago.  Potash is now 21% more expensive, 10-34-0 is 32% higher, urea is 39% more expensive, UAN32 46% higher, anhydrous is 50% more expensive, UAN28 is 53% higher, DAP is 59% more expensive and MAP 64% is higher compared to last year.



DMC Payment Falls in April as Milk Prices Improve

The April payment under the Dairy Margin Coverage program fell $0.48/cwt from March to $2.56/cwt for $9.50/cwt coverage, as higher milk prices that easily outstripped rising corn costs boosted margins. The April U.S. average all-milk price rose a full dollar per hundredweight from a month earlier to $18.40/cwt, while the April DMC feed cost calculation was $0.52/cwt higher, due almost entirely to a higher corn price.

Current futures prices indicate that the DMC program margins will continue to rise at a moderate pace, thus reducing monthly payments, and surpass $9.50/cwt by late summer. USDA reported last week that as of May 24, estimated DMC payments for this year have exceeded $344 million.



CWT-Assisted Export Sales Top Six Million Pounds

The 58 contracts Cooperatives Working Together member cooperatives secured in May added 3.4 million pounds of American-type cheeses, 524,700 pounds of butter, 908,305 pounds of whole milk powder, 1.6 million pounds of cream cheese, and 4,409 pounds of anhydrous milkfat to CWT-assisted sales in 2021. These products will go customers in Asia, the Middle East, Oceania, and South America, and are being shipped May through October.

CWT-assisted 2021 dairy product sales contracts total 17.9 million pounds of cheese, 10.4 million pounds of butter, 7.1 million pounds of anhydrous milkfat (AMF), 6.9 million pounds of cream cheese and 16.6 million pounds of whole milk powder. This brings the total milk equivalent for the year to over three-quarters of a billion pounds on a milkfat basis. All these products are scheduled to ship in the first ten months of 2021.



FARM Animal Care Certified by PAACO

The Professional Animal Auditor Certification Organization (PAACO) has certified the National Dairy Farmers Assuring Responsible Management (FARM) Animal Care Program as an approved animal welfare evaluation. PAACO provides training and certification credentials for animal welfare auditors and audits for all sectors of food animal production.

“PAACO’s certification of FARM Animal Care affirms our commitment to the highest standards of animal welfare,” says Emily Yeiser Stepp, Vice President of the FARM Program. “This provides another layer of assurance to the supply chain that FARM is a comprehensive and rigorous tool that ensures dairy products are produced responsibly.”

To receive PACCO certification, the FARM Program went through a thorough review process of its Animal Care Version 4 standards, resources and evaluator training materials as compared to standards set by the PAACO Board of Directors. The review ensured that the FARM Program evaluation includes all the key components required for evaluation of livestock animal welfare and is committed to continuous improvement.

“The FARM program has met requirements for audit structure, auditor expectations, and oversight and measurement of animal outcomes, facilities, and documentation,” says Collette Kaster, PAACO Executive Director.

FARM staff will also participate as members of the instruction team for PAACO dairy welfare auditor trainings. PAACO auditor certifications provide professional development opportunities for those looking to grow their animal welfare evaluating skillset.

PAACO was developed in 2004 in response to the growing use of animal welfare audits by the retail and food service sectors. This created the need for training, certification, and continuing education. Since its creation, PAACO’s vision is to be the trusted authority on animal welfare auditing, providing consistency and science-based training of auditors as well as rigorous, science-based audit standards.



USDA Celebrates MyPlate’s Decade of Support for Healthy Habits

The U.S. Department of Agriculture (USDA) today kicks off a month-long celebration marking 10 years since the introduction of the MyPlate nutrition guidance symbol, which helps consumers make healthy food choices. Throughout June, USDA will offer a collection of activities and resources, including a Start Simple with MyPlate app challenge.

“Good nutrition provides a solid foundation for health and wellbeing,” said Stacy Dean, USDA’s deputy undersecretary for food, nutrition, and consumer services. “MyPlate makes science-based food guidance accessible to consumers from all walks of life.”

Launched on June 2, 2011, the widely-used MyPlate symbol, and the materials provided through MyPlate.gov, help Americans of all backgrounds make healthy food choices by translating the Dietary Guidelines for Americans – co-developed every five years by USDA and the U.S. Department of Health and Human Services – into consumer-friendly language. The simple, practical icon – downloadable in 22 different languages – illustrates appropriate amounts from each of the five food groups (fruits, vegetables, grains, proteins, and dairy or fortified soy alternatives) with a familiar mealtime visual: a dinner plate and drinking glass.

MyPlate features a suite of resources to help Americans enjoy the benefits of a healthy diet. Consumers can develop personalized food plans based on their age, sex, height, weight, and physical activity level, with recommendations on what and how much to eat from each of the targeted food groups. They can also access over a thousand healthy, budget-friendly recipes through the MyPlate Kitchen available in English and Spanish.

USDA’s Food and Nutrition Service (FNS) leverages its 15 nutrition assistance programs to ensure that children, low-income individuals, and families have opportunities for a better future through equitable access to safe, healthy, and nutritious food, while building a more resilient food system. Under the leadership of Secretary Tom Vilsack, FNS is fighting to end food and nutrition insecurity for all through programs such as SNAP, school meals, and WIC. FNS also provides science-based nutrition recommendations through the co-development of the Dietary Guidelines for Americans. To learn more, visit www.fns.usda.gov.



LRP Considerations
Matthew Diersen, Risk & Business Management Specialist, SDSU

In early 2021 the Risk Management Agency implemented a subtle change to Livestock Risk Protection (LRP) insurance. LRP covers the price risk or the risk of cattle prices moving lower while owned by those raising cattle. The policy was changed to allow those with coverage to collect indemnity payments if they dispose of (think sell) insured cattle within the last 60 days of coverage. Without such a clause people without cattle would have an incentive to purchase the subsidized coverage. Prior to the change, the limit was the last 30 days of coverage. Cattle could be (and still can be) owned past the end of coverage and remain insured.

Does this change matter? In short, yes, as it makes an LRP policy more flexible and therefore more attractive for cattle producers. LRP is sold with fixed end dates from 13 to 52 weeks out in 4-week intervals; basically, these are monthly end dates. Producers generally want insurance coverage to span the timeframe they own the cattle. Once any such cattle are sold there would be no more price risk so producers would not want to pay for a longer coverage period than needed. LRP cannot be exercised nor offset prior to the end date, but coverage can be transferred to another party such as the buyer of the cattle. In contrast, with futures and options any hedge position can be lifted or offset when the cattle are sold.

Consider a feedlot in early June expecting a pen of cattle to finish in mid-October. The feedlot buys LRP at a high coverage level with an end date in late October. Assume the cattle gain well and finish early in mid-September. If prices remain steady or increase the cattle can be sold and the LRP premium paid. However, if prices fall the feedlot would be expecting an indemnity payment. Under the prior policy, selling the cattle earlier than 30 days before the end date either meant foregoing any indemnity (because the coverage stopped) or transferring the coverage to the buyer. Regardless, the premium still needed to be paid.

Under the current policy, the window is now 60 days before the end date. Using recent market conditions (futures prices and implied volatility), the difference in time value between 60 and 30 days from expiration is about $1.00 per cwt for an at-the-money live cattle put option (or 100% coverage LRP on fed cattle). That value could have been foregone in the past if not captured when transferring the coverage. In other words, being able to keep LRP coverage for the wider window is worth $1.00 per cwt (for the fraction of the time that cattle are sold early). If the likely end value is much higher than the original expected end value, then the remaining value of the LRP coverage is very small regardless of the window. If the likely end value is much lower, then the situation is more interesting. The expected indemnity is analogous to the intrinsic value of a put option, and it would serve as a lower bound if considering transferring the coverage. With the wider 60-day window, there is less of an incentive to transfer the coverage to capture its value, which can be quite large. Regardless, the premium still needs to be paid.



Ranch Group Applauds 28 Congressional Members Calling for Cattle and Beef Market Reform

Yesterday, 28 congressional members, including 16 U.S. senators and 12 U.S. representatives from both the Republican and Democrat parties, along with an Independent joined the letter authored by U.S. Senator Mike Rounds (R-SD) and U.S. Senator Tina Smith (D-MN) calling for reform of government policies impacting U.S. cattle and beef markets.

The congressional signers represent 23 states, including many with stronger consumer-oriented constituencies than traditional cattle-related constituencies. Together they are calling upon U.S. Attorney General Merrick Garland to take action to protect the nation’s cattle farmers and ranchers from going broke due to inexplicably low cattle prices and protect American consumers from paying over-inflated beef prices at their grocery stores.

The letter identifies several factors the government needs to address that includes but goes beyond traditional antitrust concerns. Specifically, the letter asks the government to determine:
    The impacts of concentration and consolidation in the beef market.
    The impacts from the lack of country-of-origin labeling (COOL) on beef.
    Antitrust concerns in consumer beef markets and cattle markets.
    The impacts of imports on the domestic beef supply chain.
    Impacts caused by an insufficient number of beef processing plants.

The letter raises concerns that U.S. antitrust laws are either not being properly enforced “or they are not capable of addressing the apparent oligopoly that so plainly exists” in cattle and beef markets. The letter states that this is where the congressional signers and Garland need to work together.

“We are grateful to the 28 congressional signers on the Rounds/Smith letter who have identified the key factors hindering cattle farmers and ranchers’ ability to continue providing America’s consumers with an abundant, safe, and affordable supply of beef,” said R-CALF USA President Gerald Schreiber who added, “Identifying these serious problems is the first step in resolving them.”



Innovative Seed Trait Delivers on Consumer Preference and Farmers' Bottom Line

The U.S. soy industry continues to drive demand through innovation for soybean farmers and end users. With funding and partnership support from the soy checkoff, the Missouri Soybean Merchandising Council is leading the effort to build momentum for SOYLEIC™, a non-GMO soybean variety containing high oleic trait technology. The variety offers opportunities for farmers to meet end-user high oleic oil needs for specific markets.

“SOYLEIC is the latest example of the value the checkoff brings to soybean farmers, by providing research funding investments that result in innovations farmers can put to work right now to maximize profit opportunities,” said Meagan Kaiser, United Soybean Board Treasurer and farmer-leader from Bowling Green, Missouri. “The reliability that U.S. soybean farmers provide can meet end-user demand, expand and strengthen market share in the food industry, and diversify their acres, furthering profitability on the farm.”

The SOYLEIC trait technology was developed after over a decade of research. Seeds carrying SOYLEIC are going into approximately 40,000 acres across 14 states from Georgia to Minnesota this growing season. In addition, a new website, soyleic.com, is now available as a one-stop shop for information for farmers, researchers, chefs and health-conscious consumers.

High oleic soybean oil provides increased functionality and contains zero trans fat. It is an ideal oil for frying, baking and many other uses in restaurants and home kitchens. It creates nutritious food for humans and feed for animal diets while offering a diversified and value-added planting option for soy farmers.

“Innovations like the SOYLEIC non-GMO high oleic soybeans are exactly the opportunities we’re focused on in bringing new soybean varieties to farmers and introducing new soy products to the market through the soy checkoff,” said Kyle Durham, a farmer from Norborne and chair of the Missouri Soybean Merchandising Council. “We’re proud to bring growers this technology that stands to empower farmers to improve their bottom line through new varieties and value-added markets and meet the food industry’s need for high-performing soybean oil.”

In addition to farmers planting soybeans with the SOYLEIC non-GMO high oleic, soybean breeders are working to develop new varieties with the technology tailored to the growing conditions in their regions. Led by the Missouri Soybean Merchandising Council and funded through the soy checkoff, a group of land-grant universities and private organizations are working to expand the trait to maturity groups 00 to VII.

To learn more about the non-GMO high oleic soybean trait technology and opportunities to try SOYLEIC, visit soyleic.com.  



New Reports Correct the Record on Faulty Land Use Change Assertions

A pair of recent studies examining purported cropland expansion in the Midwest are based on a flawed methodology that “suffers from accuracy and certainty issues,” according to a new review of the studies by researchers at Southern Illinois University Edwardsville. In reviewing studies by Zhang et al. and Lark et al., the SIUE authors found that the inherent defects in their methodology “severely hinder its use for estimating land use change over time.”
 
In their paper, Joshua Pritsolas and Randall Pearson of SIUE’s GeoSpatial Mapping, Applications, and Research Center pointed out that both studies relied on the U.S. Department of Agriculture’s Cropland Data Layer (CDL) tool to estimate the conversion of grassland to cropland, a use for which the tool was not intended and is poorly suited. As the USDA itself has noted, “Unfortunately, the pasture and grass-related land cover categories have traditionally had very low classification accuracy in the CDL,” meaning grassland is often confused with cropland in the CDL dataset.

The reliance of Zhang et al. and Lark et al. on USDA’s CDL tool renders the results of both studies highly questionable. “Given these issues, policymakers should exercise caution in referencing studies that have performed or integrated land cover/use change analysis that relies on the CDL,” according to Pritsolas and Pearson.

According to the SIUE analysis, it is likely that Zhang et al. and Lark et al. grossly overstated the amount of cropland expansion between 2008 and 2016 because the CDL tool frequently misclassified cropland as grassland in the early part of this time period. “The cropland expansion claimed by Lark et al. (2020) and adopted by Zhang et al. (2021) has a high potential of being false change due to poor classification certainty in the earlier CDL,” the authors found.

Meanwhile, researchers from Purdue University, the University of Illinois—Chicago, and the Department of Energy’s Argonne National Laboratory earlier this month responded to unfounded criticism from a British consulting group about the land use change modeling framework developed by Purdue and the DOE. In a point-by-point rebuttal, the Purdue, UIC, and DOE authors corrected the record regarding their methodology for estimating land use change emissions. “The existing literature has reached the conclusion that early research in this area significantly overstated the land use implications of biofuels,” they wrote. “As the conversation continues, it is important for the community to remain focused on the big picture regarding agriculture’s role as a very effective GHG mitigation tool that can shape the new policies to govern production and consumption of biofuels.”

Renewable Fuels Association President and CEO Geoff Cooper commented on the importance of the new reports from both SIUE and Purdue, UIC, and DOE.

“As part of the process to propose Renewable Fuel Standard volumes for 2023 and beyond, the Environmental Protection Agency is currently analyzing the environmental impacts of the RFS to date,” Cooper said. “At the same time, the National Academy of Sciences is examining the state of the science regarding lifecycle analysis of low-carbon transportation fuels like ethanol. Therefore, it is crucial that the scientific and regulatory communities have access to current, reliable data and robust methodologies for assessing the climate impacts of a broad array of transportation fuel options. Important decisions regarding the future of the RFS should be based on sound science—not political science. We applaud the experts at SIUE, Purdue, UIC, and DOE for defending their good work and scrutinizing questionable studies that misrepresent the lifecycle impacts of biofuels.”

RFA Chief Economist Scott Richman testified at a NAS hearing Monday and stressed the fact that historical predictions about land use/cover change have turned out to be greatly exaggerated. “There has not been a significant increase in U.S. cropland since the Renewable Fuel Standard was expanded in 2007,” Richman said. “Given the clarity of statistics on this fact, opponents have turned to contorting satellite-based imagery to try to find land cover and land use change.”