Friday January 17 Ag News

 Rural Mainstreet Economy Contracts Again

For the 16th time in the past 17 months, the overall Rural Mainstreet Index (RMI) sank below the 50.0 reading in January, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The region’s overall reading for January increased to a weak 42.3 from December’s 39.6. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

On average, bankers expect approximately one in five grain farmers to experience negative cash flow for 2025.

“Despite another one-year extension of the farm bill, and $20.8 billion in farm disaster relief, the farm (grain) economic outlook remained weak for the first half of 2025. However, grain prices have recently improved, but not enough for profitability for many producers. On the other hand, regional livestock producers continue to experience solid prices, thus maintaining profitability,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Farming and ranch land prices: For the 8th time in the past nine months, farmland prices sank below growth neutral. The region’s farmland price index rose slightly to 42.0 from 41.3 in December. “Elevated interest rates and higher input costs, along with below breakeven grain prices for some farmers in the region, have put downward pressure on ag land prices,” said Goss.

This month, bank CEOs were asked to project 2025 farmland rental rates for non-irrigated, non-pasture farmland. On average, bankers expect an annual rental rate per acre of $278.

According to trade data from the International Trade Association (ITA), regional exports of agriculture goods and livestock for the first 11 months of 2024 rose by $673.4 million to $11.6 billion from the same period in 2023 for a 6.2% gain. Mexico was the top destination for 2024 ag exports, accounting for 48.1% of total regional agriculture and livestock exports.

Farm equipment sales: The farm equipment sales index rose to a very weak 17.4 from December’s 14.3, which was the lowest reading since October 2016. “This is the 18th straight month that the index has fallen below growth neutral. High input prices, tighter credit conditions and weak farm grain prices are having a negative impact on the purchases of farm equipment,” said Goss.

Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The January confidence index rose to 42.3 from December’s 37.5. “Improving, but still weak agriculture commodity prices and negative farm cash flows, combined with downturns in farm equipment sales over the past several months, continued to push banker confidence below growth neutral,” said Goss.

Below are the state reports:
Nebraska: The Nebraska Rural Mainstreet Index for January increased to 39.2 from December’s 36.5. The state’s farmland price index for January increased slightly to 40.9 from December’s 40.0. Nebraska’s new hiring index rose to 45.9 from December’s 43.7. According to trade data from the ITA, Nebraska exports of agriculture goods and livestock for the first 11 months of 2024 rose by $81.3 million from the same period in 2023 for a 10.3% gain. Mexico was the number one destination for 2024 Nebraska ag exports, accounting for 68.3% of total Nebraska agriculture and livestock exports.

Iowa: January’s RMI for the state slumped to 40.7 from 41.7 in December. Iowa’s farmland price index for January dipped to 41.3 from 41.5 in December. Iowa’s new hiring index for January increased to 46.2 from 45.5 in December. According to trade data from the ITA, Iowa exports of agriculture goods and livestock for the first 11 months of 2024 sank by $25.1 million from the same period in 2023 for a 1.6% reduction. Mexico was the number one destination for Iowa’s 2024 ag exports, accounting for 65.2% of total state agriculture and livestock exports.

The survey represents an early snapshot of the economy of rural agriculturally- and energy-dependent portions of the nation. The Rural Mainstreet Index is a unique index that covers 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. The index provides the most current real-time analysis of the rural economy. Goss and the late Bill McQuillan, former Chairman of the Independent Community Banks of America, created the monthly economic survey and launched it in January 2006.



Four New Representatives on the Nebraska Beef Council Board

Nebraska Beef Council is pleased to announce the four new members that have been elected to its Board of Directors. The newly elected board members bring a wealth of expertise, commitment, and a shared vision for the future of the organization.

The newly elected members are:
District 1: Butch Schuler of Redington.
District 3: Keith Kreikemeier of West Point.
District 5: Shannon Peterson of Gothenburg.
District 9: John Schroeder of Cozad.

The election of these members reflects the organization's ongoing commitment to ensuring strong leadership and diverse perspectives at the decision-making table in beef promotion, education, and research. With varied backgrounds in cattle operations, the new board members will play a pivotal role in shaping the strategic direction of Nebraska Beef Council in the coming years.

Ann Marie Bosshamer, Executive Director at Nebraska Beef Council, stated, "We are thrilled to welcome these producers to our Board of Directors. Their unique insights, experience, and passion for our mission will be invaluable as we continue to focus on the future of beef. We look forward to the contributions they will make to strengthen and grow our organization."

Current board members are Rosemary Vinton Anderson of Whitman, Jim Ramm of Atkinson, Michele Cutler of Elsie, and Mark Goes of O'Dell. June Loseke of Columbus will begin her second term representing District 7. Board members may serve a maximum of two consecutive four-year terms.

Officers for the Nebraska Beef Council Board were also elected to serve in 2025 including: Rosemary Vinton Anderson of Whitman as Chair; June Loseke of Columbus as Vice Chair; Michele Cutler of Elsie as Treasurer; and Jim Ramm of Atkinson as Secretary.

For more information about the Nebraska Beef Council, visit www.nebeef.org.



University of Nebraska–Lincoln contributes $3.06B to state economy

Nebraska’s flagship university continues to serve as a cornerstone of the Cornhusker State’s economic success.

A new economic development report discussed during the Dec. 6 University of Nebraska Board of Regents meeting reported that the University of Nebraska–Lincoln has an annual economic impact of $3.06 billion on Nebraska. The total is a $200 million increase since 2021. The university also supports 25,121 jobs statewide and contributes $84 million in state taxes.

All three totals represent nearly half of the University of Nebraska system’s overall economic impact.

“The University of Nebraska–Lincoln continues to play a central role in shaping the economic landscape of our state,” said Chancellor Rodney D. Bennett. “We are not only advancing education and research, but also driving growth, job creation and economic stability for all Nebraskans.”

The report was part of preliminary findings shared by Paul Umbach, founder and president of the firm Tripp Umbach. A full version of the report will be available in early 2025.

Overall, the NU system provides an annual economic impact of $6.4 billion, a $600 million increase since a 2021 report produced by Tripp Umbach.

During the meeting, Umbach shared additional details on the NU system’s influence on job creation, research innovation and workforce development statewide. Other contributions of the NU system to the Nebraska economy are:
    For every $1 invested by the State of Nebraska in the NU system, $10 is returned to the state’s economy;
    When NU’s impact is combined with that of Nebraska Medicine, the total economic impact rises to $11.9 billion — a $1.6 billion increase since 2021; and
    The NU system supports 52,335 jobs statewide, up from 47,342 in 2021. This equates to one in every 20 jobs in Nebraska being directly or indirectly tied to the university.

“The University of Nebraska is a powerhouse for our state’s economic growth and competitiveness,” said Dr. Jeffrey P. Gold, president of the NU system. “The return on investment for Nebraskans is clear: The University of Nebraska creates opportunities, fuels innovation and creates ripples that positively impact communities and people all across the state.”

The NU system is one of about 50 organizations currently working with Tripp Umbach to quantify economic impact, Umbach said. While many other institutions of higher education have flatlined or even contracted in their economic impact since 2020, NU has seen broad and steady economic growth, he said.



Smith Statement on USTR's Announcement of Alterations to Trade Agreement with Colombia

Thursday, Congressman Adrian Smith (R-NE) released the following statement after the Office of the United States Trade Representative (USTR) announced new binding interpretations of key provisions within the U.S.-Colombia Trade Promotion Agreement (TPA).

"USTR did not conduct its due diligence before entering this binding agreement during the final moments of a lame duck presidency. Robust engagement over priorities for negotiating new or improved comprehensive trade agreements would have been welcome earlier in President Biden’s term. Instead, this rushed and performative action is indicative of the Biden administration's failures to consult Congress and American stakeholders while properly engaging on trade matters."

BACKGROUND:
In December 2024 Smith spoke out after it was reported USTR was attempting to renegotiate provisions of USMCA and the U.S.-Colombia TPA without consulting Congress or American stakeholders.

On January 10, 2025, Smith led several Ways and Means Committee colleagues sending a letter to USTR Ambassador Katherine Tai. The letter called on USTR to refrain from finalizing any new terms for the U.S.-Colombia TPA and instead use President Biden's remaining days in office to seek input from Congress and American stakeholders.

Smith was has actively supported robust trade engagement with Colombia on the Ways and Means Committee's Subcommittee on Trade since 2011.



Over 420 Ag Groups Back Brooke Rollins for Secretary of Agriculture

The American Soybean Association and numerous state soybean affiliates, along with more than 420 agricultural organizations, are urging the swift confirmation of Brooke Rollins as the next USDA Secretary.

In a letter led by the Ag CEO Council and sent to Senate Agriculture Committee Chair John Boozman and Ranking Member Amy Klobuchar, the groups emphasize the urgent need for strong leadership at USDA to tackle critical challenges facing American agriculture, including the farm bill, economic pressures, and food security.

A prompt confirmation of Rollins is essential to ensure USDA can begin addressing these issues and continue supporting farmers, ranchers, and rural communities nationwide.

Rollins' confirmation hearing is scheduled for Thursday, Jan. 23.

ASA Congratulates Fordyce, Hoskins and Lindberg on Nominations to USDA Posts
ASA applauds the nominations of Richard Fordyce to serve as the Under Secretary for Farm Production and Conservation (FPAC), Dudley Hoskins to serve as the USDA Under Secretary for Marketing and Regulatory Programs (MRP) and Luke Lindberg to serve as the Under Secretary for Trade and Foreign Agricultural Affairs (TFAA).

Steve Censky, ASA Chief Executive Officer, said in a media release, “As a fourth-generation farmer himself, Richard understands the importance of farm, risk management, and conservation programs to farmers. He has been a leader not only within the soybean industry, but also for the State of Missouri and then all of the United States during his time as Administrator of USDA’s Farm Service Agency. I know from working with him in all these roles that he will do an incredible job for American agriculture, and I’m thrilled by his nomination.

Likewise, I’m so pleased with the nomination of Dudley Hoskins. Dudley has been a longstanding friend of U.S. soybean farmers. Having the opportunity to work closely with him during my time as Deputy Secretary at USDA, he has a deep background in agriculture policy and understands how the work of the MRP mission area impacts U.S. farmers and ranchers.

I also want to congratulate and welcome Luke Lindberg to the USDA family. From his work leading South Dakota’s trade expansion efforts, Luke understands the importance of trade to farmers, ranchers, and rural America. ASA looks forward to continuing our work with the TFAA mission area on trade issues, including the continued development of new markets and the expansion of existing markets for U.S. soy.”



ACE Statement on EPW Committee Hearing with EPA Chief Nominee Zeldin

The Senate Committee on Environment and Public Works (EPW) held its hearing today to consider the nomination of Lee Zeldin to serve as the Administrator of the U.S. Environmental Protection Agency (EPA). American Coalition for Ethanol (ACE) CEO Brian Jennings issued the statement below following Mr. Zeldin’s nomination hearing:
 
"If confirmed as EPA Administrator, Mr. Zeldin will be tasked with overseeing the Renewable Fuel Standard (RFS) and E15 — two critical issues for the biofuels industry that he has previously opposed. We are grateful for Senators Pete Ricketts (R-NE), Jerry Moran (R-KS), Joni Ernst (R-IA), Chuck Grassley (R-IA), Deb Fischer (R-NE), John Thune (R-SD) and others for raising these priorities and additional issues like sustainable aviation fuel during their discussions with Mr. Zeldin today and leading up to his nomination hearing. We appreciate his commitments to follow the law as it relates to timely and appropriate RVO rulemakings and doing his part to ensure year-round E15 nationwide, building on the momentum of E15 legislation initially included in the year-end funding package.”



USDA Issues Final Rule on Amendments to the Federal Milk Marketing Orders

Thursday, the U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) announced a final rule amending the uniform pricing formulas applicable in all 11 Federal milk marketing orders (FMMOs). The final rule was made available for viewing on Jan. 16, 2025, in the Federal Register and on AMS’s National Federal Milk Marketing Order Pricing Formula Hearing webpage. It will be published in the Federal Register on Jan. 17.

The final rule follows a 49-day national hearing held from Aug. 23, 2023, to Jan. 30, 2024, in Carmel, Indiana, where AMS heard testimony and received evidence on 21 proposals from the dairy industry. AMS issued a recommended decision on July 1, 2024, followed by its publication in the Federal Register on July 15, 2024, which began a 60-day public comment period.

A total of 128 comments were received, analysis of which was included in a final decision that was issued on November 12, 2024, and published in the Federal Register on December 2, 2024.

Following publication of the final decision, AMS administered and oversaw 11 referenda whereby producers whose milk was pooled on an FMMO in the selected representative month of January 2024 had the opportunity to vote in favor of or opposition to the FMMOs proposed to be amended.

This final rule announces that producers in each of the 11 FMMOs approved the following pricing formula amendments:
    Updating the skim milk composition factors to 3.3 percent true protein, 6.0 percent other solids and 9.3 percent nonfat solids, with a six-month delayed implementation.
    Removing 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program survey.
    Updating the Class III and Class IV manufacturing allowances to $0.2519 for cheese, $0.2272 for butter, $0.2393 for nonfat dry milk and $0.2668 for dry whey, all on a per pound basis, and the butterfat recovery factor to 91 percent.
    Returning the base Class I skim milk price formula to the higher-of the advanced Class III or Class IV skim milk prices for the month. In addition, adoption of a Class I extended shelf life (ESL) adjustment for all ESL products equal to the average-of mover plus a 24-month rolling average adjuster with a 12-month lag.
    Updating the Class I differential values to reflect the increased cost of servicing the Class I market.

The rule will be effective June 1, 2025, for all changes, except for changes to the skim milk composition factors. The amendments to skim milk composition factors will be implemented Dec. 1, 2025. These changes will apply to milk marketed on and after these dates, as applicable, and those changes will be reflected in both the advanced prices and pricing factors released before the start of the month and the class and component prices announced after the close of the month.



NMPF Thanks Members, USDA for FMMO Leadership

NMPF thanked USDA and the dozens of farmers and cooperative leaders who successfully steered Federal Milk Marketing Order modernization to a successful conclusion.

“Dairy farmers and cooperatives have done what they do best – lead their industry for the benefit of all,” said Gregg Doud, president and CEO of NMPF. “This final plan will provide a firmer footing and fairer milk pricing, which will help the dairy industry thrive for years to come. We appreciate the monumental contributions across government and the dairy industry that made this happen. The industry, and all dairy consumers, owe all of you a debt of gratitude.”

The new FMMO comes after more than 200 NMPF-led meetings to formulate the proposal that contributed heavily to USDA’s final decision, as well as a record-length 49-day federal order hearing and approval from the farmers who are covered under all federal milk marketing orders.

The new federal milk-pricing system, which officially will be published in the Federal Register tomorrow, will mostly take effect June 1 – coincidentally, World Milk Day – and is closely aligned with the principles of NMPF’s member-led recommendations, a process that began nearly four years ago.

Highlights include:
    Returning the base Class I skim milk price formula to the higher-of the advanced Class III or Class IV skim milk prices for the month. In addition, adoption of a Class I extended shelf life (ESL) adjustment for all ESL products equal to the average-of mover plus a 24-month rolling average adjuster with a 12-month lag.
    Updating the Class III and IV manufacturing allowances for cheese, butter, nonfat dry milk and dry whey, and the butterfat recovery factor.
    Updating the Class I differential values to reflect the increased cost of servicing the Class I market.
    Updating skim milk composition factors, with implementation delayed six months until Dec. 1.
    Removing 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program survey.

NMPF has more resources to understand FMMO modernization and the road taken to get there. Farmers and cooperatives will have opportunities to learn more about the new system through webinars and other materials offered in coming weeks. NMPF will also continue pushing for elements of its proposal that require congressional authorization, including mandatory dairy manufacturing cost reporting to provide accurate, transparent data to inform future milk pricing discussions.



Needed FMMO Reform Undermined by Make Allowance Giveaway

USDA recently announced that a final Federal Milk Marketing Order decision was approved by dairy farmers and cooperatives across all 11 orders through separate referenda conducted within each order. AFBF has called for changes to the Federal Milk Marketing Orders dating back to 2019.

“We’re grateful that USDA listened to not only our calls but also calls from the broader dairy industry to switch back to the ‘higher of’ Class I milk formula, increase Class I differentials, improve cheese price discovery and update milk composition factors,” said AFBF President Zippy Duvall. “However, the positive changes that will come as a result of these reforms will not be uniform for dairy farmers across the country and will be greatly offset by large, unjustified increases in make allowances.”

In October 2022, AFBF brought together representatives from a broad swath of the dairy sector, including dairy cooperatives, proprietary processors, state dairy associations and dairy farmers from across the country, for a successful first-of-its-kind industry-wide Federal Milk Marketing Order Forum, where industry consensus was reached on a variety of issues.

In addition to the consensus reached at that forum, a thorough grassroots policy process led by AFBF dairy farmer members has resulted in AFBF advocacy for a mandatory, audited survey of milk processing costs that are used to help establish make allowances. USDA instead bases make allowances on an unscientific, voluntary survey that allows processors to opt out, skewing the results in a direction that results in lower milk prices for farmers.

In fact, AFBF analysis has shown that changing the make allowance without a mandatory, audited survey could lead to unjust penalties for dairy farmers, which directly defies the intended purpose of the FMMO system.

All 11 orders approved the final decision with the required two-thirds majority. Under USDA’s interpretation of the amendment process, a “no” vote would have eliminated all existing milk pricing regulations in an order, leaving farmers with a stark choice between losing federal order protections or accepting the proposed changes.

“The FMMO system relies on fairness and transparency, and without a mandatory, audited survey of processing costs, dairy farmers’ checks will be reduced based on flawed and incomplete data,” Duvall added. “We now call on Congress to help restore the balance of fairness in the federal order system. Legislation can and should direct USDA to collect a more accurate survey of processing costs, which will level the playing field for all.”

AFBF representatives were present throughout the entire months-long hearing process and testified on a number of proposals. At the conclusion of the hearing, Duvall sent a letter to Agriculture Secretary Tom Vilsack relaying AFBF’s concerns with the proposed increases in make allowances.



Council Rolls Out 2024/2025 Corn Harvest Quality Report Around The World

In support of its 2024/2025 Corn Harvest Quality Report, released last month, the U.S. Grains Council (USGC) is conducting a series of promotional programs to present data from the study to international buyers and end-users and inform them about the quality of the 2024/2025 U.S. corn crop.

The Council is holding in-person and virtual events in India, Japan, Korea, Latin America, Mexico, Southeast Asia and Taiwan across the month of January, allowing global agricultural stakeholders to start the year equipped with the latest information on U.S corn quality.

“Transparency is a vital part of any relationship, and that includes business and trade,” said Verity Ulibarri, USGC chairwoman. “This report provides clear and honest data to international buyers to highlight the quality of U.S. corn and how it can make a difference to end-users everywhere.”

The 2024/2025 Corn Harvest Quality Report is the 14th annual study sponsored by the Council and shows U.S. corn experienced limited stress throughout its development due to favorable growing season conditions. Those factors contributed to the highest projected average yield on record and promoted good grain quality and relatively warm, dry conditions during September and October permitted an effective dry-down and timely harvest.

The average aggregate quality of the representative samples tested was better than the grade factor requirements for U.S. No. 1 grade. The report also showed 89.2% of the samples met the grade factor requirements for U.S. No. 1 grade, and 96.2% met the grade factor requirements for U.S. No. 2.

Relative to each quality factor’s average from the previous five crops, the 2024 U.S. corn crop boasts higher test weight, lower broken corn and foreign material (BCFM), lower total damage and lower moisture. The crop also had the highest 100-kernel weight in the history of the report and tied for the highest kernel volume, indicative of the near-ideal growing season.

“These rollout events communicate to buyers that they can trust U.S. producers and the Council is a reliable partner to facilitate trade in international markets,” Ulibarri said. “International customers recognize and appreciate the commitment made by U.S. farmers to produce the highest quality crops and the Council’s efforts to offer precise data so they can understand the product before they buy it.”