NEBRASKA CROP PROGRESS AND CONDITION
For the week ending August 14, 2016, Nebraska experienced near normal temperatures, according to the USDA’s National Agricultural Statistics Service. Many areas received more than two inches of rain, while large pockets in the central and southwestern parts of the State remained dry. In these dry areas, there was concern about the lack of rainfall affecting dryland crop conditions. There were 5.9 days suitable for fieldwork. Topsoil moisture supplies rated 8 percent very short, 30 short, 59 adequate, and 3 surplus. Subsoil moisture supplies rated 6 percent very short, 29 short, 64 adequate, and 1 surplus.
Field Crops Report:
Corn condition rated 1 percent very poor, 5 poor, 18 fair, 59 good, and 17 excellent. Corn dough was 76 percent, ahead of 64 last year and the five-year average of 66. Dented was 17 percent, ahead of 11 last year, but near 19 average.
Sorghum condition rated 0 percent very poor, 0 poor, 15 fair, 68 good, and 17 excellent. Sorghum headed was 87 percent, near 91 last year, but ahead of 76 average. Coloring was 27 percent, ahead of 10 both last year and average.
Soybeans condition rated 1 percent very poor, 3 poor, 18 fair, 63 good, and 15 excellent. Soybeans blooming was 97 percent, equal to both last year and average. Setting pods was 81 percent, near 77 last year and 80 average.
Oats harvested was 89 percent, near 91 last year, and behind 96 average.
Alfalfa condition rated 4 percent very poor, 4 poor, 17 fair, 62 good, and 13 excellent. Alfalfa third cutting was 77 percent, ahead of 60 last year and 62 average. Fourth cutting was 17 percent, ahead of 11 last year.
Livestock, Pasture and Range Report:
Pasture and range conditions rated 2 percent very poor, 5 poor, 24 fair, 59 good, and 10 excellent. Stock water supplies rated 1 percent very short, 11 short, 86 adequate, and 2 surplus.
IOWA CROP PROGRESS & CONDITION REPORT
Above normal precipitation across much of Iowa limited fieldwork to 4.3 days suitable for the week ending August 14, 2016, according to the USDA, National Agricultural Statistics Service. Activities for the week included cutting hay and fungicide and insecticide applications. Spraying activities were wrapping up in some areas.
Topsoil moisture levels rated 1 percent very short, 7 percent short, 83 percent adequate and 9 percent surplus. Subsoil moisture levels rated 2 percent very short, 9 percent short, 83 percent adequate and 6 percent surplus.
Eighty percent of the corn crop was in or beyond the dough stage, 5 days ahead of last year and 10 days ahead of the 5-year average. Twenty-three percent of Iowa’s corn crop reached the dent stage, 3 days ahead of normal. Corn condition rated 83 percent good to excellent.
Soybeans blooming reached 97 percent, 8 days ahead of the previous year. Eighty-seven percent of soybeans were setting pods, with a few scattered reports of soybeans starting to turn color. Soybean condition rated 83 percent good to excellent, although there were scattered reports of Sudden Death Syndrome (SDS) across the State.
Ninety-five percent of the oat crop for grain or seed has been harvested, equal to last year’s pace.
The third cutting of alfalfa hay is 52 percent complete, 4 days ahead of average. Hay condition rated 73 percent good to excellent, while pasture condition rated 62 percent good to excellent. Livestock conditions were reported as normal.
IOWA PRELIMINARY WEATHER SUMMARY
Provided by Harry J. Hillaker, State Climatologist
Iowa Department of Agriculture & Land Stewardship
Dry weather prevailed across the state through Wednesday (10th) morning. Thunderstorms began developing Wednesday afternoon and continued increasing in coverage Wednesday night into Thursday. The heaviest rains came Thursday night into Friday morning when rain totals of three to five inches were common over large areas of central and east central Iowa, as well as over the far southwest corner of the state. Most of the weekend was dry excepting some isolated showers and thunderstorms in central Iowa Saturday (13th) night. Weekly rain totals varied from 0.62 inches at Dorchester in far northeast Iowa to 7.14 inches at Swisher in Johnson County. There was a statewide average of 2.20 inches of rain, or more than double the normal for the week of 0.98 inches. The past reporting week began mild with daytime highs mostly near 80 degrees on Monday (8th) while Estherville reported the lowest temperature of the week with a Monday morning minimum of 52 degrees. However, heat and humidity quickly returned on Tuesday with the hottest weather prevailing on Wednesday (10th) and Thursday (11th). Heat indices peaked at 110 degrees at Shenandoah on Wednesday and 113 at Mount Pleasant on Thursday. Actual air temperatures maxed out at 96 degrees at Sioux City on Wednesday and 97 at Lamoni on Thursday. Seasonal temperatures and humidity returned for the weekend. Temperatures for the week as a whole averaged 2.5 degrees above normal.
USDA Weekly Crop Progress
U.S. corn and soybeans continued to develop at an average to slightly ahead-of-average pace last week, while the condition of both crops held steady, according to USDA's latest Crop Progress report released Monday.
The nation's corn crop was 73% in the dough stage as of Sunday, ahead of 65% last year and ahead of the five-year average of 60%. Corn dented was 21%, ahead of 18% last year but even with the five-year average of 21%. Corn condition was unchanged from the previous week at 74% good to excellent.
Soybeans were 95% blooming, slightly ahead of last year's 92% and the five-year average of 93%. Eighty percent of soybeans were setting pods, also slightly ahead of 76% last year and 75% for the five-year average. Soybean conditions were also unchanged from the previous week at 72% good to excellent.
Winter wheat was 97% harvested as of Sunday, down from 99% a year ago, but above the five-year average of 95% harvested.
Spring wheat harvest was 48% complete, up from 46% a year ago and above the five-year average of 30%. Spring wheat condition was rated as 66% good to excellent, down two percentage points from the previous week.
Cotton setting bolls was reported at 88%, compared to 70% last week, 72% last year and an 83% average. Twelve percent of cotton bolls were opening, compared to 9% last year and a 10% average. Cotton condition held steady from the previous week at 48% good to excellent.
Rice was 94% headed, compared to 86% last week, 86% last year and an 80% average. Thirteen percent of the rice crop was harvested, compared to 12% last year and a 9% average. Rice condition was down 1 percentage point from the previous week at 65% good to excellent.
Sorghum was 83% headed, compared to 74% last week, 80% last year and 72% on average. Coloring was reported at 42%, compared to 31% last week, 37% last year and a 37% average. Twenty-three percent of sorghum was mature, equal to last year, but slightly behind the five-year average of 26%. Sorghum condition held steady from the previous week at 65% good to excellent.
Oats were 80% harvested as of Sunday, compared to 68% last week, 75% last year and a 71% average.
Barley harvest was reported at 55% complete, compared to 32% last week, 59% last year and a 34% average. Barley condition was down 1 percentage point from the previous week at 71% good to excellent.
LATE SUMMER PLANTING OF ALFALFA
Bruce Anderson, NE Extension Forage Specialist
Is planting alfalfa in you plans yet this year? This is a good time to plant and replace fields that have dried up or thinned out.
Alfalfa planted in late summer establishes well when moisture is available. Be sure to plant early enough, though, so alfalfa has six to eight weeks between emergence and freeze back to develop good cold tolerance. In northwest Nebraska or southern South Dakota, you probably need to plant right away. But only if you also have moisture present for seeds to germinate. Any delay is likely to cause poorer stands. In southeast Nebraska you can plant as late as Labor Day but earlier is better. In central Kansas alfalfa can be planted as late as mid-September.
Proper seedbed preparation is crucial for late summer plantings. Good seed-to-soil contact and weed control are critical, both when seeding into tilled, prepared seedbeds or into wheat stubble. Conserve soil moisture whenever possible, and put extra effort into getting a firm, firm seedbed.
Whenever seeding alfalfa in late summer, be especially wary of grasshoppers. They sometimes seem to come from nowhere, and they love to eat new alfalfa seedlings. Spray field margins with insecticides before planting if necessary.
One important caution — never plant into dry soil. In the Great Plains, August plantings into dry soil may lie dormant for several weeks until it rains. Too little time then will remain for seedlings to develop good cold tolerance. Many failures occur because fall rains come too late or not at all.
But if you have moisture, then plant. With help from Mother Nature, good hay is just a spring away.
ICON Concerned with Brand Committee’s Action
The State Auditor of Public Accounts recently completed an audit of the Nebraska Brand Committee with a number of resulting deficiencies which are of great concern to members of the Independent Cattlemen of Nebraska (ICON). Perhaps more alarming is the response of the Nebraska Brand Committee to the audit and the attitude of the committee which appears to ignore the spirit of the audit and the issues it raised.
The deficiencies noted in the audit cover a wide variety of topics, but indicate an overall sloppiness in the manner in which the brand committee has been operating under the direction of Shawn Harvey who leads the paid staff at the Committee. Although the Committee, at its most recent meeting, accepted Harvey's resignation, they then offered him another position at equal pay and asked him to continue to act as interim director, while Harvey's actions and his veracity as reported in the audit are questionable at best. The creation of this new position would appear to be in opposition to state statutes governing the brand committee.
The audit states that Mr. Harvey had used a state-provided vehicle for personal use, that Harvey had claimed to have attended a meeting in Cheyenne with the head of the Wyoming Brand Committee when, in fact, the Wyoming office has no record of Harvey's visit and denied that a meeting had taken place there. It should be apparent to the public and to the committee that honesty and truthfulness are essential to the job at hand and that the committee's actions do not indicate that they appreciate the seriousness of the accusations against Harvey which were revealed in the audit. Ironically, they did cast a unanimous ballot to accept the terms of the audit which would indicate that they recognize that the facts brought forward by the state auditor were legitimate.
Equally as troubling was a decision to release a check for cattle sold at a packing plant to the owner before the paperwork had cleared and before ownership was verified. This is clearly opposed to both state statute and common sense, since the purpose of the brand committee and the brand inspectors and staff is to be sure that cattle ownership is verified before money changes hands.
Brand inspection is an important tool for livestock owners to assure that the livestock being sold belong to the individual doing the selling. When funds are released ahead of that fundamental requirement being verified one has to wonder how many other actions like this have occurred prior to the state auditor catching this one.
Harvey also backdated an employee record which is a violation of law. Finally, thousands of dollars of checks were lost which required that they be reissued by Tyson Foods to the committee. In all, 18 items were highlighted by the State Auditor.
The Brand Committee is a public body. It is not the property of any trade group but is designed to serve cattlemen across the brand area. The committee has failed to do its duty. The assistant director recently resigned, a long-time inspector also quit, as did a Committee director. In addition, board members of ICON have received several calls from inspectors who are unhappy with the leadership of the organization. It was only a few years ago that some individuals now serving on the brand committee were lobbying to eliminate the brand inspection program.
Cattlemen across the brand area need to pay attention to what the committee is doing. Inspection is a valuable tool of law enforcement and certainly Cattlemen across the state of Nebraska don't want to lose it. The State Auditor has been in contact with Attorney General, Doug Peterson, and the ICON board encourages Mr. Peterson to take the Auditors report seriously in the investigation which it undertakes.
Branstad, Reynolds and Northey highlight water quality efforts underway statewide
At the Administration’s weekly press conference at the Iowa State Fair today, Iowa Governor Terry Branstad, Lt. Governor Kim Reynolds and Sec. of Agriculture Bill Northey announced that $3.8 million in cost share funds to help over 1,900 farmers install nutrient reduction practices have been obligated to farmers in 97 counties. The practices that were eligible for this funding are cover crops, no-till or strip till, or using a nitrification inhibitor when applying fall fertilizer.
“We understand the importance of improving our state’s water quality,” said Branstad. “This summer, we have been all over the state to see firsthand the more than 150 organizations and the thousands of farmers that have been collaborating to improve the state’s water quality through the science-based Nutrient Reduction Strategy. It’s evident that everyone has a role to play in improving our water quality and we look forward water quality funding being a focal point of discussion in the upcoming 2017 legislative session.”
Reynolds added, “Iowans in both urban and rural areas of our state face challenges when we talk about our state’s water quality. However, as we’ve seen all over the state in the past few months, many Iowans are already taking steps to prevent the nitrates and phosphorus from leaving our soil. I have no doubt that Iowans will continue to work together to find solutions to improve our water quality.”
The over 1,900 farmers includes 900 farmers using a practice for the first time and more than 1,000 past users that are trying cover crops again and are receiving a reduced-rate of cost share. As a result, the $3.8 million in state funds will be matched by nearly $6 million from Iowa farmers investing to try these water quality practices.
“Farmers continue to take on the challenge of improving water quality and invest in practices focused on limiting nutrient loss. Even in a challenging time economically in agriculture we have a record number farmers participating and willing to put their own money towards these practices. Farmers are committed to action and willing to invest in water quality,” Northey said.
The Iowa Department of Agriculture and Land Stewardship received applications covering over 200,000 acres from more than 1,900 different farmers seeking to participate in the program. Farmers in 98 of the 100 Soil and Water Conservation Districts across the state signed up to participate.
Participants include 900 farmers using a practice for the first time and more than 1,000 past users that are trying cover crops again and are receiving a reduced-rate of cost share. The first-time users cover 80,000 acres of cover crops, 4,800 acres of nitrification inhibitor, 6,600 acres of no-till and 1,900 acres of strip-till. The past users will use cover crops on nearly 110,000 acres.
Farmers not already utilizing the practice were eligible cost share rate for cover crops of $25 per acre, $10 per acre for trying no-till or strip till and $3 per acre for using a nitrapyrin nitrification inhibitor when applying fall fertilizer. Farmers that had used cover crops in the past were eligible for $15 per acre in cost share. Cost share was only available on up to 160 acres.
Farmers are encouraged to still reach out to their local Soil and Water Conservation District office as there may be other programs available to help them implement water quality practices on their farm.
The Iowa Department of Agriculture and Land Stewardship received $9.6 million for the Iowa Water Quality Initiative in fiscal 2017. These funds will allow the Iowa Department of Agriculture and Land Stewardship to continue to encourage the broad adoption of water quality practices through statewide cost share assistance as well as more intensive work in targeted watersheds.
Stopping the Spread of Palmer Amaranth, An Aggressive, Competitive Weed
Palmer amaranth is an invasive weed that is native to the southwestern United States. Over the last three years, however, the weed has made its way into Iowa and has been identified in at least nine counties, most recently in Madison, Clayton, Washington and Crawford counties.
Palmer AmaranthPalmer amaranth is related to waterhemp, a common weed found across Iowa. In addition to traditional weedy traits, the characteristic that makes those two weeds unique and hard to manage is their ability to evolve resistance to herbicides, according to Bob Hartzler, professor of agronomy and extension weed specialist at Iowa State University.
“Both weeds are adapted to a production system that relies on herbicides,” said Hartzler. “Waterhemp is a relatively non-competitive weed so many farmers have learned to accept lower levels of weed control. If Palmer amaranth spreads across the state and farmers try to manage it like they do waterhemp, it will have a huge negative economic impact.”
The known cases of Palmer amaranth in the state are isolated right now, and keeping it from spreading is the immediate need.
“Palmer amaranth built its reputation on how it devastated the cotton industry in the south after the near complete reliance on glyphosate in Roundup Ready cotton,” Hartzler said. “The best way to manage it is to slow its spread into and within the state. This is a highly competitive weed that has adapted to our current management system for corn and soybean crops.”
Potential Crop impact from Habitat Restoration Areas
The initial Palmer amaranth infestations in Iowa were found in crop fields associated with equipment and inputs from outside of the state. More recently, Palmer amaranth has been found on ground set aside for conservation practices. The weed most likely will not persist in these new locations being established for conservation habitat since the Palmer amaranth should be crowded out once native, perennial vegetation is established. The concern, however, is that until the perennial plants become established, Palmer amaranth may produce enough seed to begin moving into neighboring corn and soybean fields.
“With Palmer amaranth being so much more competitive than waterhemp it could have a significant economic impact due to higher weed management costs and greater yield losses,” said Hartzler.
Identifying Palmer Amaranth and Treatment
In the video below Hartzler describes Palmer amaranth and how to identify the weed. It can be viewed at https://vimeo.com/178360206.
Hartzler said Palmer amaranth needs to be identified early so it can be eradicated before it has an opportunity to establish itself. The difficulty arises because of how closely Palmer amaranth resembles waterhemp; the two weeds are virtually identical in their early growth stages.
The one consistent vegetative trait that can be used to differentiate Palmer amaranth from waterhemp is the relative length of the leaf petiole and leaf blade. After removing a leaf from the stem, bend the leaf backward so it lays over the leaf blade. If the petiole is longer than the blade, the weed in question is most likely Palmer amaranth. Not all leaves on a Palmer amaranth have this trait, but most plants will have some leaves with the long petiole.
Female Palmer amaranths have long bracts (modified leaves on the flower stem) that extend well beyond the other floral parts of the weed. As the plants mature these bracts become sharp and painful to the touch while waterhemp bracts remain soft. The flowering branches on Palmer amaranth are longer than those of waterhemp, and have a spiky appearance because of the large bracts.
Treatment
“The one thing we have going for us is that every corn and soybean field has waterhemp, so farmers have developed weed management programs targeting waterhemp,” said Hartzler.
“Programs that are effective on waterhemp should provide effective control of Palmer amaranth. That alone will make it hard for the weed to spread rapidly. However, Palmer amaranth is more aggressive and grows more rapidly than waterhemp so that reduces the window of opportunity to implement control tactics,” he said.
Much of the state’s waterhemp is already resistant to glyphosate (Roundup), and it is likely Palmer amaranth will carry that same resistance. Farmers need to develop diversified weed management programs that use multiple herbicide sites of action and include alternative management strategies to delay further selection of herbicide resistant weeds.
Conservation Habitats
While new detections of Palmer amaranth have been found in ground reserved for non-crop habitat restoration, there are ways to manage the weed while also continuing to grow the vegetation needed to support water quality and game birds, pollinators and other wildlife populations.
“The standard management practices for establishing native planting habitat is to mow that area three or four times during the first year because the weeds will take off much quicker than native plants. Additional mowing may also be needed in the second year after planting,” Hartzler said. “There is no reason to fear establishing this type of habitat, but anyone who does should become familiar with Palmer amaranth so they can distinguish it from waterhemp or other weeds in the area. In many of the infested fields the number of Palmer amaranth plants was low enough to allow for the hand removal of the plants.”
Rabobank Expects Rental Prices to Fall and Land Values to Follow
A new report from the Rabobank Food & Agribusiness Research and Advisory group finds that order for U.S. ag commodity production activity to remain economically viable, land rent must decline. The report, “The Land Value Wave Dips: Land Values Set to Decline Further, Despite Sticky Rental Prices,” explores the impact of low commodity prices on land values and rent prices..
The report goes on to note that from 2006 to 2013, significant increases in commodity prices, due to surging demand, signaled the need for more land to be converted to row crop production. The subsequent steep increases in agricultural land values have pulled enough acres into row crop production to oversupply most commodities, both domestically and globally.
“The result of this oversupply has been to drive agri commodity price levels below breakeven. After two years of economic losses at the farm level – which resulted largely from the significant drop in commodity prices – the cost of renting land remains sticky and unsustainably high,” notes report author and Rabobank senior analyst Sterling Liddell.
According to Rabobank, in 2017/18 and moving forward, rent values need to begin dropping in order to balance with lower commodity prices over the long term.
“We believe this will lead to the valuation of land also adjusting lower,” notes Liddell. “If rental costs remain sticky at unsustainable levels through the 2017/18 growing period, individual land assets face the threat of much deeper devaluation, as nutrient and crop protection programs are cut and abandonment (usage changes) increases.”
CWT Assists with 1.5 Million Pounds of Cheese Export Sales
Cooperatives Working Together (CWT) has accepted 13 requests for export assistance from Dairy Farmers of America, Northwest Dairy Association (Darigold) and Tillamook County Creamery Association, who have contracts to sell 1.506 million pounds (683 metric tons) of Cheddar, Colby, Gouda and Monterey Jack cheese to customers in Asia, Central America, the Middle East and North Africa. The product has been contracted for delivery in the period from August through December 2016.
So far this year, CWT has assisted member cooperatives who have contracts to sell 32.161 million pounds of American-type cheeses, 8.373 million pounds of butter (82% milkfat) and 21.301 million pounds of whole milk powder to 21 countries on five continents. The sales are the equivalent of 640.740 million pounds of milk on a milkfat basis. Totals have been adjusted due to cancellations.
Assisting CWT members through the Export Assistance program in the long-term helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively affects all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.
Online Harvest Forms for NCGA Yield Contest Now Available
With harvest underway in some areas and soon to begin in others, the National Corn Growers Association announces that online harvest forms for the 2016 National Corn Yield Contest are now available. While the harvest information form deadline may seem distant, entrants are asked to report within seven business days of their final yield check or by Nov. 21, whichever comes first.
"While harvest has only begun in a few areas, we ask contest applicants to submit harvest forms within one week of their final yield check to allow NCGA staff adequate time to thoroughly review each form," said Production and Stewardship Action Team Chair Brent Hostetler. "The National Corn Yield Contest plays a significant role in recognizing excellence and finding new, more productive techniques. We hope that growers continue to support the contest by seeing their entry through and submitting their completed harvest data forms."
The online harvest form is available to both farmers and seed representatives using the same login process as the initial entry form. Login does require submission of the entrant's NCGA membership number.
NCGA moved to a solely online entry platform last year. This year, harvest entry documentation must also be submitted online. To complete the form, entrants will upload weight tickets and a form documenting row lengths. Prior to upload, both documents must be signed by the contest supervisor.
For half of a century, NCGA's National Corn Yield Contest has provided corn growers the opportunity to compete with their colleagues to grow the most corn per acre, helping feed and fuel the world. This has given participants not only the recognition they deserved, but the opportunity to learn from their peers.
Winners receive national recognition in publications such as the NCYC Corn Yield Guide, as well as cash trips or other awards from participating sponsoring seed, chemical and crop protection companies. The winners will be honored during Commodity Classic 2017 in San Antonio, Texas.
Farmers’ Almanac Releases Special 200th Collector’s Edition - And Forewarns of a Frigid Forecast
Farmers’ Almanac™ is once again proving that traditions never go out of style with the release of its 2017 anniversary edition on Monday, August 15, 2016. This expanded “throwback” edition features an eclectic mix of weather, astronomy, humor and everyday life-hacks, as well as the much-anticipated winter weather forecast.
The special collector’s edition takes a look back at 200 editions worth of clever, forward-thinking, and occasionally crazy “Almanackey” tips and advice, including Advice to Girls (1876) about playing hard to get; The Power of Sunshine (1869), which is relevant today; and How to Quiet a Fussy Child (1878) that involves molasses and feathers (really!).
“What's really fascinating is a look into how the world has changed, yet how it’s stayed the same,” says Managing Editor Sandi Duncan, Philom., “Some of the healthy tips are eerily appropriate – from warning off tobacco habits (1834), to limiting intake of sugary, greasy foods (1873). The 2017 Farmers’ Almanac truly rewards the curious reader.”
Winter Weather Freeze
Most well-known for its long-range weather predictions, the 2017 Farmers’ Almanac also contains a frigid forecast: “Return of the Ice Cold Winter” is how the Farmers’ Almanac describes the upcoming winter.
The Almanac, which bases its long-range forecasts on an almost 200 century-old formula, forewarns of a colder-than-normal winter for two-thirds of the nation. The exceptionally cold conditions will be most prevalent over the Northern Plains, Great Lakes, Midwest, Ohio Valley, Middle Atlantic, Northeast, and New England states. The West however, seems to be spared any extreme cold this winter, with the Almanac predicting milder than normal conditions for many western states.
“February is the month to really be ready for cold conditions,” warns Editor Peter Geiger, Philom., “according to our long-range outlook, many places will see downright frigid temperatures this month, some as low as 40 degrees below zero!”
As far as snow, the Farmers’ Almanac does contain a forecast that should keep many skiers happy in the East.
The Great American Eclipse
For the first time in 26 years a Total Solar Eclipse will be visible from the United States in August 2017. This edition of the Farmers’ Almanac shares useful details about where, when and how to view this eclipse safely and memorably.
Other stories that will appeal to readers who want to get back in touch with nature include how to raise chickens, ways to tap naturally into your own fountain of youth, a search for Farmers' Almanac Farmer of the Year, as well as Almanac staples, such as a gardening & fishing calendars, recipes (including last year’s Lemon Recipe Contest winners), life-hacks, and astronomical events that are sure to delight.
“Accurate long-range weather is what people associate with the Farmers’ Almanac, says Geiger. “Yet, from the start, it has grown into a manual of sorts that can help people live healthier lives. It has been a guide to good living no matter what is going in the outside world.
Welcome to the KTIC Agriculture Information blog!!! Check back here for the latest in ag news and information, from local events to international happenings and government reports that affect your operation. Please email with suggestions! -Chad Moyer, Farm Director, KTIC Radio
Tuesday, August 16, 2016
Saturday, August 13, 2016
Friday August 12 USDA Reports + Ag News
NEBRASKA CROP PRODUCTION REPORT
Based on August 1 conditions, Nebraska's 2016 corn production is forecast at a record high of 1.76 billion bushels, up 4 percent from last year, according to the USDA’s National Agricultural Statistics Service. Acreage harvested for grain is estimated at 9.40 million acres, up 3 percent from a year ago. Average yield is forecast at 187 bushels per acre, up 2 bushels from last year and the highest on record.
Soybean production in Nebraska is forecast at a record high of 310 million bushels, up 1 percent from last year. Area for harvest, at 5.25 million acres, is down slightly from 2015. Yield is forecast at a record high of 59 bushels per acre, up 1 bushel from last year.
Nebraska’s 2016 winter wheat crop is forecast at 63.6 million bushels, up 38 percent from last year. Harvested area for grain, at 1.20 million acres, is down 1 percent from a year ago. Average yield is forecast at a record high of 53 bushels per acre, up 15 bushels per acre from 2015.
Sorghum production of 14.0 million bushels is down 39 percent from a year ago. Area for grain harvest, at 150,000 acres, is down 38 percent from last year. Yield is forecast at 93 bushels per acre, down 3 bushels from last year.
Oat production is forecast at 2.52 million bushels, down 6 percent from last year. Harvested area for grain, at 40,000 acres, is unchanged from last year. Yield is forecast at 63 bushels per acre, down 4 bushels from 2015.
Alfalfa hay production is forecast at 3.04 million tons, down 11 percent from last year. Expected yield, at 3.80 tons per acre, is down 0.2 ton from last year. All other hay production is forecast at 3.06 million tons, up 3 percent from last year. Forecasted yield, at a record high of 1.70 tons per acre, is up 0.1 ton per acre from last year.
IOWA CROP PRODUCTION REPORT
Iowa corn production is forecast at 2.68 billion bushels according to the latest USDA, National Agricultural Statistics Service – Crop Production report. If realized, the production will be a new record high, topping last year’s 2.51 billion bushels. Based on conditions as of August 1, yields are expected to average 197 bushels per acre, an increase of 5 bushels per acre from last year. If realized, the yield will break last year’s previous record high for Iowa. Corn planted acreage is estimated at 14.0 million acres. An estimated 13.6 million of the acres planted will be harvested for grain.
Soybean production is forecast at 550 million bushels. If realized, this will be the second all-time high, behind last year’s 554 million bushels. The August 1 yield forecast is 57.0 bushels per acre, 0.5 bushels more than 2015. If realized, this will be a new record high yield, topping last year’s current record high. Soybean planted acreage is estimated at 9.80 million acres with 9.65 million acres to be harvested.
Oat production for grain is forecast at 3.60 million bushels. The expected yield is 68.0 bushels per acre, down 5.0 bushels from 2015, but up 3.0 bushels from the July forecast. An estimated 53,000 acres will be harvested for grain.
Iowa hay yield for alfalfa and alfalfa mixtures is expected to be 4.00 tons per acre with a total production of 3.00 million tons, virtually unchanged from the previous year. The projected yield for other hay is 2.20 tons per acre, with production at 770,000 tons, down 18 percent from 2015.
All crop forecasts in this report are based on August 1 conditions and do not reflect weather effects since that time. The next corn and soybean production forecasts, based on conditions as of September 1, will be released on September 12.
USDA Crop Production 2016 Estimate - Aug 12, 2016
Corn Production Up 11 Percent from 2015
Soybean Production Up 3 Percent from 2015
Winter Wheat Production Up 2 Percent from July Forecast
Corn production is forecast at 15.2 billion bushels, up 11 percent from last year. Based on conditions as of August 1, yields are expected to average 175.1 bushels per acre, up 6.7 bushels from 2015. If realized, this will be the highest yield and production on record for the United States. Area harvested for grain is forecast at 86.6 million acres, unchanged from the June forecast, but up 7 percent from 2015.
Soybean production is forecast at a record 4.06 billion bushels, up 3 percent from last year. Based on August 1 conditions, yields are expected to average a record 48.9 bushels per acre, up 0.9 bushel from last year. Area for harvest in the United States is forecast at a record 83.0 million acres, unchanged from the June forecast but up 1 percent from 2015. Planted area for the Nation is estimated at a record 83.7 million acres, also unchanged from June.
All cotton production is forecast at 15.9 million 480-pound bales, up 23 percent from last year. Yield is expected to average 800 pounds per harvested acre, up 34 pounds from last year. Upland cotton production is forecast at 15.3 million 480-pound bales, up 23 percent from 2015. Pima cotton production is forecast at 565,000 bales, up 30 percent from last year.
All wheat production, at 2.32 billion bushels, is up 3 percent from the July forecast and up 13 percent from 2015. Based on August 1 conditions, the United States yield is forecast at 52.6 bushels per acre, up 1.3 bushels from last month and up 9 bushels from last year.
Winter wheat production is forecast at 1.66 billion bushels, up 2 percent from the July 1 forecast and up 21 percent from 2015. Based on August 1 conditions, the United States yield is forecast at 54.9 bushels per acre, up 1 bushel from last month and up 12.4 bushels from last year. The area expected to be harvested for grain or seed totals 30.2 million acres, unchanged from last month but down 6 percent from last year. Hard Red Winter production, at 1.05 billion bushels, is up 1 percent from last month. Soft Red Winter, at 372 million bushels, is up less than 1 percent from the July forecast. White Winter, at 237 million bushels, is up 6 percent from last month. Of the White Winter production, 21.7 million bushels are Hard White and 216 million bushels are Soft White.
Durum wheat production is forecast at 91.7 million bushels, up 11 percent from both July and 2015. The United States yield is forecast at 44.1 bushels per acre, up 4.3 bushels from last month and 0.6 bushel from last year. Expected area to be harvested for grain totals 2.08 million acres, unchanged from last month but up 10 percent from last year.
Other spring wheat production is forecast at 571 million bushels, up 4 percent from the July 1 forecast but down 5 percent from last year. Area harvested for grain is expected to total 11.8 million acres, unchanged from last month but down 9 percent from last year. The United States yield is forecast at 48.3 bushels per acre, up 1.8 bushels from last month and up 2 bushels from last year. Of the total production, 531 million bushels are Hard Red Spring wheat, up 4 percent from the previous forecast but down 6 percent from last year.
World Ag Supply and Demand Estimate - Aug 12, 2016
COARSE GRAINS: Projected 2016/17 U.S. feed grain supplies are increased this month with higher forecast corn, sorghum, barley, and oats production. Corn production is forecast at a record 15.2 billion bushels, up 613 million from the July projection. The season’s first surveybased corn yield forecast, at 175.1 bushels per acre, is up 7.1 bushels from last month’s trendbased projection and above the record 171.0 bushels in 2014/15. The Crop Production report indicates that nearly all Corn Belt states, with the exception of Minnesota and South Dakota, are forecast to have yields above a year ago. Sorghum production is forecast 55 million bushels higher with the forecast yield 8.4 bushels per acre above last month’s projection.
U.S. corn supplies for 2016/17 are projected at a record 16.9 billion bushels, up 1.5 billion from the prior year with the larger crop and small increases in beginning stocks and imports. Ending stocks for 2015/16 are raised 5 million bushels reflecting a larger import projection and offsetting usage changes. Imports are raised as the pace of organic corn imports through June has been above expectations. Corn use for ethanol production in 2015/16 is lowered 25 million bushels, based on the latest indications from the Grain Crushings and Co-Products Production report. An offsetting 25-million-bushel increase is made to corn exports supported by the recent robust pace of shipments and sales.
Total U.S. corn use for 2016/17 is projected 300 million bushels higher at a record 14.5 billion. Feed and residual use is raised 175 million bushels with the larger crop and lower expected prices. Exports are projected 125 million bushels higher, reflecting the relative competitiveness of U.S. corn on the world market and large new-crop outstanding sales. Corn ending stocks for 2016/17 are projected 328 million bushels higher and, if realized, would be the highest since 1987/88. The projected range for the season-average corn price received by producers is lowered 25 cents on both ends to $2.85 to $3.45 per bushel. This would be down 45 cents at the midpoint from the $3.55 to $3.65 per bushel range now expected for 2015/16. The all barley price is raised this month based on early indications of prices received by farmers for malting barley.
Foreign coarse grain supplies for 2016/17 are projected 5.1 million tons higher this month with a 2.3-million-ton increase in beginning stocks and a 3.0-million-ton increase in production. Foreign corn carryin is up, mostly reflecting lower 2015/16 corn feeding in Indonesia, Canada, and Ukraine as 2015/16 corn production increases for the EU and South Africa offset a further reduction for Brazil. Foreign corn production for 2016/17 is raised 2.1 million tons with increases for Argentina, India, and Mexico more than offsetting reductions for the EU and Canada. Corn area is raised in Argentina on an expected reduction in planted area for wheat and small grains.
For India, corn area is increased as favorable rainfall has boosted plantings to date as reported in the latest government statistics. Abundant summer rainfall in Mexico boosts corn yield prospects, but persistent dryness in Ontario reduces the outlook for production in Canada. EU corn production is lowered mostly on reductions for Spain and France.
Global coarse grain consumption for 2016/17 is raised 8.9 million tons this month with higher corn use in the United States accounting for half of the increase. Outside the United States, corn feeding is raised for Mexico, India, and the EU. Partly offsetting is a 1.0-million-ton reduction in corn feeding for Indonesia, where government import licensing policy is expected to reduce corn imports. Global coarse grain trade is raised reflecting increases for corn and to a lesser extent barley. Global 2016/17 coarse grain ending stocks are projected 13.4 million tons higher reflecting larger corn and barley stocks. Global corn stocks are projected 12.4 million tons higher with the United States accounting for two-thirds of the increase.
OILSEEDS: U.S. oilseed production for 2016/17 is projected at 120.2 million tons, up 4.8 million from last month due to a higher soybean production forecast. Soybean production for 2016/17 is forecast at 4,060 million bushels, up 180 million due to increased yields. Harvested area is forecast at 83.0 million acres, unchanged from the July projection. The first survey-based soybean yield forecast of 48.9 bushels per acre is 2.2 bushels above last month and 0.9 bushels above last year’s record. With higher production only partly offset by lower beginning stocks, soybean supplies for 2016/17 are projected at a record 4,346 million bushels. Soybean crush is raised 15 million bushels based on expected higher domestic use and exports of soybean meal.
Soybean exports are raised 30 million bushels to 1,950 million. Despite higher use, soybean ending stocks are projected at 330 million bushels, up 40 million from last month.
The U.S. season-average soybean price for 2016/17 is forecast at $8.35 to $9.85 per bushel, down 40 cents on both ends of the range. Soybean meal prices are forecast at $305 to $345 per short ton, down 20 dollars at the midpoint. The soybean oil price forecast is unchanged at 29.5 to 32.5 cents per pound.
U.S. changes for 2015/16 include increased soybean crush and exports, and lower ending stocks. The soybean crush is raised 10 million bushels to 1,900 million reflecting increased domestic use and exports of soybean meal. Soybean exports are raised 85 million bushels to 1,880 million as unusually large outstanding old-crop sales are confirmed by the latest shipment data. With increased use, 2015/16 ending stocks are projected at 255 million bushels, down 95 million from last month.
Global oilseed production for 2016/17 is projected at 543.5 million tons, up 7.0 million from last month. Global soybean production is projected at a record 330.4 million tons, up 4.5 million. The U.S. production increase is partly offset by reductions for both India and Ukraine with the latest planting data for both countries indicating lower forecasts for harvested area. Rapeseed production is raised for Canada where abundant moisture and favorable temperatures in July helped to boost yield prospects. Partly offsetting is a reduction for EU rapeseed production on excessive moisture in key growing areas, particularly in France. Other changes include increased sunflowerseed production for Russia and Ukraine, increased peanut production for India and Senegal, increased cottonseed production for China, and reduced cottonseed production for India. For 2015/16, global vegetable oil trade is expected to decline 1.5 million tons from last month due to lower palm oil production in Indonesia and Malaysia.
Global oilseed supplies for 2016/17 are raised 8.1 million tons with increased production and higher beginning stocks. With larger supplies only partly offset by increased crush, 2016/17 global oilseed stocks are projected at 80.6 million tons, up 4.5 million from last month.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for total red meat and poultry production for 2016 is reduced from last month as increased beef and turkey production is more than offset by lower forecast pork and broiler production. Beef production is forecast higher on higher expected third quarter steer and heifer slaughter. However, second quarter production is adjusted lower to reflect June production data. Pork production for 2016 is lowered on expectations of slightly lighter carcass weights for the remainder of the year. Broiler production is lowered on slower expected growth in the fourth quarter. Turkey production is raised for 2016, largely on June production data. Production forecasts for 2017 red meat and poultry are raised as lower forecast feed prices are expected to encourage increased production. Table egg production is raised for 2016 on June production data; the 2017 forecast is unchanged.
The beef import forecasts for 2016 and 2017 are raised in part due to expectations of increased imports from Brazil beginning in the later part of 2016. Beef exports for 2016 are lowered based on June trade data; no change is made to the 2017 forecast. Small adjustments are made to pork trade based on June data; no change is made to the forecasts. Broiler exports for 2016 are lowered due to a slower pace of exports in June; no change is made to 2017. No change is made to turkey exports.
Cattle, hog, and broiler prices for second-half 2016 are reduced from last month on weakness in current prices. Prices for cattle, hogs and broilers for 2017 are reduced from last month as production is forecast higher; however, the annual price range for cattle is unchanged. Turkey prices are raised for the third quarter of 2016 but are unchanged for 2017. Egg prices are lowered for 2016 and 2017.
The milk production forecast for 2016 is lowered from last month as growth in milk per cow is reduced. However, the production forecast for 2017 is raised as higher forecast milk prices and lower feed costs in late 2016 and 2017 are expected to lead to a modest expansion in the cow inventory and more rapid growth in milk per cow. Fat basis exports are raised for 2016 on continued strength in whole milk powder (WMP) exports. The forecast for 2017 is unchanged.
On a skim-solids basis, the export forecasts for 2016 and 2017 are raised on higher sales of WMP and whey products. Imports are raised for 2016 and 2017 as imports of fat-containing products has increased. Fat basis stocks are forecast higher as stocks of butter remain high, but on a skim-solids basis, stocks are reduced.
Cheese, nonfat dry milk (NDM) and whey prices for 2016 are forecast higher as demand remains firm, but the forecast for butter price is reduced as stocks remain larger than expected. The Class III price is raised, reflecting higher cheese and whey prices, but the Class IV price is lowered as the lower butter price more than offsets the higher NDM price. For 2017, prices of cheese, butter, and whey are increased, but NDM is unchanged from last month. The Class III and Class IV price forecasts are raised on the stronger component prices. The all milk prices are forecast higher at $16.25 to $16.45 per cwt for 2016 and $16.15 to $17.15 per cwt for 2017.
Nebraska Brand Committee Taking Action to Improve
Nebraska Cattlemen (NC) as an organization has a keen interest in the conduct of the Nebraska Brand Committee (NBC). Prior to the inception of the state agency, Nebraska Stock Growers, the predecessor to the Nebraska Cattlemen ran the program. Because of this interest the meetings of the NBC are observed.
The current NBC members have three new members and two longer term members who have been proactive in nature, not merely accepting the status quo but looking for ways to improve the processes of the NBC and have more accountability while improving services.
NBC, on their own, identified many of the things that were found in the Auditor's report and had begun on a path to address the deficiencies.
Large scale changes take time to implement and NBC is working in a systematic, thoughtful manner to implement the right changes in the right order.
They accepted the resignation of the Executive Director this week. Since the Assistant Director position has not been filled Mr. Harvey was appointed to continue in a lesser capacity with NBC in the interim until the hiring of a new Executive Director and Assistant Director can take place.
NC recognizes that the NBC members are volunteers who are cattlemen just as each of us. We applaud their work to take positive, corrective measures.
Program Connects U.S. Soybean Farmers to Breadth of Industry
The U.S. soybean industry is a multi-faceted, global business, and 10 U.S. soybean farmers just got a closer look at how their soy checkoff works in that marketplace to all U.S. soybean farmers’ benefit. Sponsored by the United Soybean Board’s Audit and Evaluation (A&E) Committee, the See for Yourself program connected these farmers with their checkoff investment, providing transparency into the soy checkoff and allowing farmers to find out more about the many end uses for U.S. soy.
“The See for Yourself program was an eye-opening experience,” said Sam Showalter, an Iowa soybean farmer and See for Yourself participant. “To see how the checkoff works around the world and how the world looks up to us for some of our practices was incredible.”
The program concludes today in Costa Rica, a country that imported 100 percent of its soy from the United States in the 2014/2015 marketing year, a true checkoff success story. Participants heard from INOLASA, the sole soybean-crushing plant in Central America. The checkoff, through the United States Soybean Export Council (USSEC), partnered with INOLASA to increase U.S. soybean consumption in Costa Rica, taking it from 33 percent of its imports in 2014 to 100 percent in 2015.
While in Costa Rica, the participants also learned about the soy-fed fish industry from Martec Industries, a company dedicated to the production, processing and marketing of seafood, especially red snapper. The checkoff invests in marketing and promotion of soy in fish feed and helped Martec incorporate soybean meal into its rations. The fish are raised in cages in the Pacific Ocean and their feed includes roughly 18 percent soy, all of which comes from the U.S.
The program also made stops in St. Louis and Panama. In St. Louis at the USB headquarters, participants learned more about the checkoff’s work to maximize farmer profit opportunities through investments in infrastructure research, new industrial uses and high oleic soybeans. The checkoff is focused on key strategies around soybean oil, meal and sustainability – ensuring U.S. soybean farmers remain competitive in the future.
Infrastructure discussions continued as the participants went through the newly expanded Panama Canal. The canal’s recent expansion doubled the waterway’s capacity, helping to ship U.S. soy to foreign markets faster. Foreign soy buyers often pay as much attention to the timeliness of deliveries as they do the price, so the canal’s expansion increased U.S. soy’s competitiveness on the global scale. “It’s incredible the amount of soybeans that move through the canal and the time saved because of this new expansion,” said Adam Hendricks, Kentucky soybean farmer and See for Yourself participant. “In discussing the Panama Canal, we learned that about 44 percent of our exported soybeans from the U.S. pass through the Panama Canal, so it plays an important role in meeting global demands.”
While they knew little of the checkoff’s role prior to the program, the farmer-participants dove right in to better understand the checkoff and the uses of soybeans around the world.
“The farmers on this program really got their eyes opened to what the soy checkoff does for them as a farmer and marketer of soybeans,” says Keith Tapp, Kentucky soybean farmer and A&E Committee chair. “In all of our locations, I think the participants saw a wide range of activities demonstrating how the checkoff works for them and all U.S. soybean farmers.”
WEST COAST DOCK WORKERS VOTE FOR EARLY CONTRACT NEGOTIATIONS
The International Longshore and Warehouse Union (ILWU), which represents about 20,000 dock workers at 29 West Coast ports, this week voted to begin talks now on an extension of its contract with the Pacific Maritime Association (PMA), which represents West Coast port facilities owners. The PMA and ILWU signed a five-year contract in early 2015 – retroactive to July 1, 2014 – after protracted labor talks and a nearly four-month work slowdown that negatively affected U.S. exporters. The U.S. meat and poultry sectors lost an estimated $40 million a week during the slowdown, which went from November 2014 to February 2015.
One-hundred-thirteen trade associations in March 2016 sent a letter to the ILWU and the PMA, urging them to begin early discussions on a contract extension or a new contract. The groups, representing manufacturers, farmers and agribusinesses, wholesalers, retailers, importers, exporters, distributors, transportation and logistics providers and other supply chain stakeholders, also suggested the two sides develop a new model, including early and continuous dialogue between the parties, for future negotiations and called on the union and the port association “to avoid actions that would slow, stop, or disrupt cargo movement during negotiations.”
In a related matter, the International Longshoremen’s Association, representing East Coast and Gulf Coast dock workers, put a hold on its early contact talks with the United States Maritime Alliance. That contract expires in September 2018.
VEGAN MAYO MAKER ACCUSED OF BUYING PRODUCT TO INFLATE SALES FIGURES
A Bloomberg News investigation of Hampton Creek, a vegan company co-founded and co-owned by Humane Society of the United States (HSUS) farm animal activist Josh Balk, uncovered a controversial program to buy back its vegan mayonnaise from retail shelves. Bloomberg alleges this was done to inflate retail sales figures of the eggless mayonnaise, called Just Mayo, as the company sought investor financing.
At least eight months before Hampton Creek sought funding, executives quietly launched an initiative to purchase mass quantities of Just Mayo from stores, according to five former workers and more than 250 receipts, expense reports, cash advances and e-mails reviewed by Bloomberg. Employees were encouraged to make multiple transactions through store self-checkout lanes to avoid looking suspicious. Former employees said they were told to do whatever they wanted with the product after finishing the job. According to Bloomberg, most employees said they threw the product in the trash. Employees also were instructed to conceal their identities, pretending they were customers, and to call store managers of Whole Foods, Safeway and Kroger locations to stoke demand.
Hampton Creek officials said the main purpose of the purchases by company contractors was to check the quality of the mayo. But, said Kurt Jetta of consumer data company Tabs Analytics, “there’s no legitimate explanation for a manufacturer buying significant quantities of their own product from the shelf.”
Earlier this year, Hampton Creek sought additional funds to launch as many as 560 new plant-based products.
In late October 2014 the parent company of Hellmann’s mayonnaise, Unilever, filed a lawsuit against Hampton Creek for false advertising, arguing that Just Mayo couldn’t be marketed as mayonnaise because it doesn’t meet the U.S. Food and Drug Administration definition of the product: 65 percent vegetable oil and at least one egg yolk-containing ingredient. Unilever dropped the suit in December 2014, and the FDA in August 2015 warned Hampton Creek that Just Mayo’s labeling was misleading because the product did not meet the standards for “mayonnaise.”
NMPF Asks USDA to Provide Assistance to Dairy Farmers Struggling from Global Milk Price Depression
As America’s dairy farmers endure the lowest milk prices since the Great Recession of 2009, the National Milk Producers Federation today asked the U.S. Department of Agriculture to provide a measure of relief by purchasing at least $100 million worth of cheese products for donation to the needy – a measure that would help both farmers, and food insecure Americans who patronize food banks.
In a letter sent Friday to Agriculture Secretary Tom Vilsack, National Milk urged the department to use all of its available authorities to purchase $100 to $150 million of cheese. NMPF asked USDA to utilize its Section 32 program, as well as additional authorities through the Farm Service Agency, the Food and Nutrition Service, and the Commodity Credit Corporation.
“Dairy producers here in the United States need assistance to help endure this 18-month depression in milk prices,” said Jim Mulhern, NMPF President and CEO. “This type of assistance would both help economically-strapped farmers, and also help those without ready access to nutritious dairy products.”
A cheese buying program of up to $150 million would allow for the distribution of as much as 90 million pounds of cheese to nonprofit food banks. Donating this quantity of cheese would remove the equivalent of almost 900 million pounds of milk from the domestic commercial market and strengthen farm-level prices by about $0.16 per hundredweight over the course of a year, increasing the incomes of all U.S. dairy farmers by approximately $380 million.
Global dairy demand has sagged in the past two years, due primarily to a reduction in purchases by China and Russia. Meanwhile, a global rise in milk production – particularly in Europe, where production quotas were removed last year – has led to a worldwide imbalance between supply and demand, pushing prices down for farmers around the world. U.S. dairy exports have slumped, leading to a large domestic buildup of American-type cheese (between 2014 and 2016, U.S. cheese exports dropped by almost 20 percent).
The current national price for farmers’ milk is $14.50 per hundredweight, or $1.25 per gallon, the lowest price since October 2009, NMPF’s letter said. The cost of purchased feed has risen recently, producing a Margin Protection Program (MPP) margin of $5.76 per hundredweight for the May-June period, the lowest bimonthly margin since MPP began.
Also in the letter, NMPF once again reiterated its desire to work with USDA to make necessary improvements to MPP, the dairy safety net program created out of the 2014 farm bill. Limitations of the program approved by Congress have caused few producers to sign up for coverage at levels that will provide sufficient support this year, and NMPF hopes to work with Congress and USDA in the future to alleviate the issue.
Based on August 1 conditions, Nebraska's 2016 corn production is forecast at a record high of 1.76 billion bushels, up 4 percent from last year, according to the USDA’s National Agricultural Statistics Service. Acreage harvested for grain is estimated at 9.40 million acres, up 3 percent from a year ago. Average yield is forecast at 187 bushels per acre, up 2 bushels from last year and the highest on record.
Soybean production in Nebraska is forecast at a record high of 310 million bushels, up 1 percent from last year. Area for harvest, at 5.25 million acres, is down slightly from 2015. Yield is forecast at a record high of 59 bushels per acre, up 1 bushel from last year.
Nebraska’s 2016 winter wheat crop is forecast at 63.6 million bushels, up 38 percent from last year. Harvested area for grain, at 1.20 million acres, is down 1 percent from a year ago. Average yield is forecast at a record high of 53 bushels per acre, up 15 bushels per acre from 2015.
Sorghum production of 14.0 million bushels is down 39 percent from a year ago. Area for grain harvest, at 150,000 acres, is down 38 percent from last year. Yield is forecast at 93 bushels per acre, down 3 bushels from last year.
Oat production is forecast at 2.52 million bushels, down 6 percent from last year. Harvested area for grain, at 40,000 acres, is unchanged from last year. Yield is forecast at 63 bushels per acre, down 4 bushels from 2015.
Alfalfa hay production is forecast at 3.04 million tons, down 11 percent from last year. Expected yield, at 3.80 tons per acre, is down 0.2 ton from last year. All other hay production is forecast at 3.06 million tons, up 3 percent from last year. Forecasted yield, at a record high of 1.70 tons per acre, is up 0.1 ton per acre from last year.
IOWA CROP PRODUCTION REPORT
Iowa corn production is forecast at 2.68 billion bushels according to the latest USDA, National Agricultural Statistics Service – Crop Production report. If realized, the production will be a new record high, topping last year’s 2.51 billion bushels. Based on conditions as of August 1, yields are expected to average 197 bushels per acre, an increase of 5 bushels per acre from last year. If realized, the yield will break last year’s previous record high for Iowa. Corn planted acreage is estimated at 14.0 million acres. An estimated 13.6 million of the acres planted will be harvested for grain.
Soybean production is forecast at 550 million bushels. If realized, this will be the second all-time high, behind last year’s 554 million bushels. The August 1 yield forecast is 57.0 bushels per acre, 0.5 bushels more than 2015. If realized, this will be a new record high yield, topping last year’s current record high. Soybean planted acreage is estimated at 9.80 million acres with 9.65 million acres to be harvested.
Oat production for grain is forecast at 3.60 million bushels. The expected yield is 68.0 bushels per acre, down 5.0 bushels from 2015, but up 3.0 bushels from the July forecast. An estimated 53,000 acres will be harvested for grain.
Iowa hay yield for alfalfa and alfalfa mixtures is expected to be 4.00 tons per acre with a total production of 3.00 million tons, virtually unchanged from the previous year. The projected yield for other hay is 2.20 tons per acre, with production at 770,000 tons, down 18 percent from 2015.
All crop forecasts in this report are based on August 1 conditions and do not reflect weather effects since that time. The next corn and soybean production forecasts, based on conditions as of September 1, will be released on September 12.
USDA Crop Production 2016 Estimate - Aug 12, 2016
Corn Production Up 11 Percent from 2015
Soybean Production Up 3 Percent from 2015
Winter Wheat Production Up 2 Percent from July Forecast
Corn production is forecast at 15.2 billion bushels, up 11 percent from last year. Based on conditions as of August 1, yields are expected to average 175.1 bushels per acre, up 6.7 bushels from 2015. If realized, this will be the highest yield and production on record for the United States. Area harvested for grain is forecast at 86.6 million acres, unchanged from the June forecast, but up 7 percent from 2015.
Soybean production is forecast at a record 4.06 billion bushels, up 3 percent from last year. Based on August 1 conditions, yields are expected to average a record 48.9 bushels per acre, up 0.9 bushel from last year. Area for harvest in the United States is forecast at a record 83.0 million acres, unchanged from the June forecast but up 1 percent from 2015. Planted area for the Nation is estimated at a record 83.7 million acres, also unchanged from June.
All cotton production is forecast at 15.9 million 480-pound bales, up 23 percent from last year. Yield is expected to average 800 pounds per harvested acre, up 34 pounds from last year. Upland cotton production is forecast at 15.3 million 480-pound bales, up 23 percent from 2015. Pima cotton production is forecast at 565,000 bales, up 30 percent from last year.
All wheat production, at 2.32 billion bushels, is up 3 percent from the July forecast and up 13 percent from 2015. Based on August 1 conditions, the United States yield is forecast at 52.6 bushels per acre, up 1.3 bushels from last month and up 9 bushels from last year.
Winter wheat production is forecast at 1.66 billion bushels, up 2 percent from the July 1 forecast and up 21 percent from 2015. Based on August 1 conditions, the United States yield is forecast at 54.9 bushels per acre, up 1 bushel from last month and up 12.4 bushels from last year. The area expected to be harvested for grain or seed totals 30.2 million acres, unchanged from last month but down 6 percent from last year. Hard Red Winter production, at 1.05 billion bushels, is up 1 percent from last month. Soft Red Winter, at 372 million bushels, is up less than 1 percent from the July forecast. White Winter, at 237 million bushels, is up 6 percent from last month. Of the White Winter production, 21.7 million bushels are Hard White and 216 million bushels are Soft White.
Durum wheat production is forecast at 91.7 million bushels, up 11 percent from both July and 2015. The United States yield is forecast at 44.1 bushels per acre, up 4.3 bushels from last month and 0.6 bushel from last year. Expected area to be harvested for grain totals 2.08 million acres, unchanged from last month but up 10 percent from last year.
Other spring wheat production is forecast at 571 million bushels, up 4 percent from the July 1 forecast but down 5 percent from last year. Area harvested for grain is expected to total 11.8 million acres, unchanged from last month but down 9 percent from last year. The United States yield is forecast at 48.3 bushels per acre, up 1.8 bushels from last month and up 2 bushels from last year. Of the total production, 531 million bushels are Hard Red Spring wheat, up 4 percent from the previous forecast but down 6 percent from last year.
World Ag Supply and Demand Estimate - Aug 12, 2016
COARSE GRAINS: Projected 2016/17 U.S. feed grain supplies are increased this month with higher forecast corn, sorghum, barley, and oats production. Corn production is forecast at a record 15.2 billion bushels, up 613 million from the July projection. The season’s first surveybased corn yield forecast, at 175.1 bushels per acre, is up 7.1 bushels from last month’s trendbased projection and above the record 171.0 bushels in 2014/15. The Crop Production report indicates that nearly all Corn Belt states, with the exception of Minnesota and South Dakota, are forecast to have yields above a year ago. Sorghum production is forecast 55 million bushels higher with the forecast yield 8.4 bushels per acre above last month’s projection.
U.S. corn supplies for 2016/17 are projected at a record 16.9 billion bushels, up 1.5 billion from the prior year with the larger crop and small increases in beginning stocks and imports. Ending stocks for 2015/16 are raised 5 million bushels reflecting a larger import projection and offsetting usage changes. Imports are raised as the pace of organic corn imports through June has been above expectations. Corn use for ethanol production in 2015/16 is lowered 25 million bushels, based on the latest indications from the Grain Crushings and Co-Products Production report. An offsetting 25-million-bushel increase is made to corn exports supported by the recent robust pace of shipments and sales.
Total U.S. corn use for 2016/17 is projected 300 million bushels higher at a record 14.5 billion. Feed and residual use is raised 175 million bushels with the larger crop and lower expected prices. Exports are projected 125 million bushels higher, reflecting the relative competitiveness of U.S. corn on the world market and large new-crop outstanding sales. Corn ending stocks for 2016/17 are projected 328 million bushels higher and, if realized, would be the highest since 1987/88. The projected range for the season-average corn price received by producers is lowered 25 cents on both ends to $2.85 to $3.45 per bushel. This would be down 45 cents at the midpoint from the $3.55 to $3.65 per bushel range now expected for 2015/16. The all barley price is raised this month based on early indications of prices received by farmers for malting barley.
Foreign coarse grain supplies for 2016/17 are projected 5.1 million tons higher this month with a 2.3-million-ton increase in beginning stocks and a 3.0-million-ton increase in production. Foreign corn carryin is up, mostly reflecting lower 2015/16 corn feeding in Indonesia, Canada, and Ukraine as 2015/16 corn production increases for the EU and South Africa offset a further reduction for Brazil. Foreign corn production for 2016/17 is raised 2.1 million tons with increases for Argentina, India, and Mexico more than offsetting reductions for the EU and Canada. Corn area is raised in Argentina on an expected reduction in planted area for wheat and small grains.
For India, corn area is increased as favorable rainfall has boosted plantings to date as reported in the latest government statistics. Abundant summer rainfall in Mexico boosts corn yield prospects, but persistent dryness in Ontario reduces the outlook for production in Canada. EU corn production is lowered mostly on reductions for Spain and France.
Global coarse grain consumption for 2016/17 is raised 8.9 million tons this month with higher corn use in the United States accounting for half of the increase. Outside the United States, corn feeding is raised for Mexico, India, and the EU. Partly offsetting is a 1.0-million-ton reduction in corn feeding for Indonesia, where government import licensing policy is expected to reduce corn imports. Global coarse grain trade is raised reflecting increases for corn and to a lesser extent barley. Global 2016/17 coarse grain ending stocks are projected 13.4 million tons higher reflecting larger corn and barley stocks. Global corn stocks are projected 12.4 million tons higher with the United States accounting for two-thirds of the increase.
OILSEEDS: U.S. oilseed production for 2016/17 is projected at 120.2 million tons, up 4.8 million from last month due to a higher soybean production forecast. Soybean production for 2016/17 is forecast at 4,060 million bushels, up 180 million due to increased yields. Harvested area is forecast at 83.0 million acres, unchanged from the July projection. The first survey-based soybean yield forecast of 48.9 bushels per acre is 2.2 bushels above last month and 0.9 bushels above last year’s record. With higher production only partly offset by lower beginning stocks, soybean supplies for 2016/17 are projected at a record 4,346 million bushels. Soybean crush is raised 15 million bushels based on expected higher domestic use and exports of soybean meal.
Soybean exports are raised 30 million bushels to 1,950 million. Despite higher use, soybean ending stocks are projected at 330 million bushels, up 40 million from last month.
The U.S. season-average soybean price for 2016/17 is forecast at $8.35 to $9.85 per bushel, down 40 cents on both ends of the range. Soybean meal prices are forecast at $305 to $345 per short ton, down 20 dollars at the midpoint. The soybean oil price forecast is unchanged at 29.5 to 32.5 cents per pound.
U.S. changes for 2015/16 include increased soybean crush and exports, and lower ending stocks. The soybean crush is raised 10 million bushels to 1,900 million reflecting increased domestic use and exports of soybean meal. Soybean exports are raised 85 million bushels to 1,880 million as unusually large outstanding old-crop sales are confirmed by the latest shipment data. With increased use, 2015/16 ending stocks are projected at 255 million bushels, down 95 million from last month.
Global oilseed production for 2016/17 is projected at 543.5 million tons, up 7.0 million from last month. Global soybean production is projected at a record 330.4 million tons, up 4.5 million. The U.S. production increase is partly offset by reductions for both India and Ukraine with the latest planting data for both countries indicating lower forecasts for harvested area. Rapeseed production is raised for Canada where abundant moisture and favorable temperatures in July helped to boost yield prospects. Partly offsetting is a reduction for EU rapeseed production on excessive moisture in key growing areas, particularly in France. Other changes include increased sunflowerseed production for Russia and Ukraine, increased peanut production for India and Senegal, increased cottonseed production for China, and reduced cottonseed production for India. For 2015/16, global vegetable oil trade is expected to decline 1.5 million tons from last month due to lower palm oil production in Indonesia and Malaysia.
Global oilseed supplies for 2016/17 are raised 8.1 million tons with increased production and higher beginning stocks. With larger supplies only partly offset by increased crush, 2016/17 global oilseed stocks are projected at 80.6 million tons, up 4.5 million from last month.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for total red meat and poultry production for 2016 is reduced from last month as increased beef and turkey production is more than offset by lower forecast pork and broiler production. Beef production is forecast higher on higher expected third quarter steer and heifer slaughter. However, second quarter production is adjusted lower to reflect June production data. Pork production for 2016 is lowered on expectations of slightly lighter carcass weights for the remainder of the year. Broiler production is lowered on slower expected growth in the fourth quarter. Turkey production is raised for 2016, largely on June production data. Production forecasts for 2017 red meat and poultry are raised as lower forecast feed prices are expected to encourage increased production. Table egg production is raised for 2016 on June production data; the 2017 forecast is unchanged.
The beef import forecasts for 2016 and 2017 are raised in part due to expectations of increased imports from Brazil beginning in the later part of 2016. Beef exports for 2016 are lowered based on June trade data; no change is made to the 2017 forecast. Small adjustments are made to pork trade based on June data; no change is made to the forecasts. Broiler exports for 2016 are lowered due to a slower pace of exports in June; no change is made to 2017. No change is made to turkey exports.
Cattle, hog, and broiler prices for second-half 2016 are reduced from last month on weakness in current prices. Prices for cattle, hogs and broilers for 2017 are reduced from last month as production is forecast higher; however, the annual price range for cattle is unchanged. Turkey prices are raised for the third quarter of 2016 but are unchanged for 2017. Egg prices are lowered for 2016 and 2017.
The milk production forecast for 2016 is lowered from last month as growth in milk per cow is reduced. However, the production forecast for 2017 is raised as higher forecast milk prices and lower feed costs in late 2016 and 2017 are expected to lead to a modest expansion in the cow inventory and more rapid growth in milk per cow. Fat basis exports are raised for 2016 on continued strength in whole milk powder (WMP) exports. The forecast for 2017 is unchanged.
On a skim-solids basis, the export forecasts for 2016 and 2017 are raised on higher sales of WMP and whey products. Imports are raised for 2016 and 2017 as imports of fat-containing products has increased. Fat basis stocks are forecast higher as stocks of butter remain high, but on a skim-solids basis, stocks are reduced.
Cheese, nonfat dry milk (NDM) and whey prices for 2016 are forecast higher as demand remains firm, but the forecast for butter price is reduced as stocks remain larger than expected. The Class III price is raised, reflecting higher cheese and whey prices, but the Class IV price is lowered as the lower butter price more than offsets the higher NDM price. For 2017, prices of cheese, butter, and whey are increased, but NDM is unchanged from last month. The Class III and Class IV price forecasts are raised on the stronger component prices. The all milk prices are forecast higher at $16.25 to $16.45 per cwt for 2016 and $16.15 to $17.15 per cwt for 2017.
Nebraska Brand Committee Taking Action to Improve
Nebraska Cattlemen (NC) as an organization has a keen interest in the conduct of the Nebraska Brand Committee (NBC). Prior to the inception of the state agency, Nebraska Stock Growers, the predecessor to the Nebraska Cattlemen ran the program. Because of this interest the meetings of the NBC are observed.
The current NBC members have three new members and two longer term members who have been proactive in nature, not merely accepting the status quo but looking for ways to improve the processes of the NBC and have more accountability while improving services.
NBC, on their own, identified many of the things that were found in the Auditor's report and had begun on a path to address the deficiencies.
Large scale changes take time to implement and NBC is working in a systematic, thoughtful manner to implement the right changes in the right order.
They accepted the resignation of the Executive Director this week. Since the Assistant Director position has not been filled Mr. Harvey was appointed to continue in a lesser capacity with NBC in the interim until the hiring of a new Executive Director and Assistant Director can take place.
NC recognizes that the NBC members are volunteers who are cattlemen just as each of us. We applaud their work to take positive, corrective measures.
Program Connects U.S. Soybean Farmers to Breadth of Industry
The U.S. soybean industry is a multi-faceted, global business, and 10 U.S. soybean farmers just got a closer look at how their soy checkoff works in that marketplace to all U.S. soybean farmers’ benefit. Sponsored by the United Soybean Board’s Audit and Evaluation (A&E) Committee, the See for Yourself program connected these farmers with their checkoff investment, providing transparency into the soy checkoff and allowing farmers to find out more about the many end uses for U.S. soy.
“The See for Yourself program was an eye-opening experience,” said Sam Showalter, an Iowa soybean farmer and See for Yourself participant. “To see how the checkoff works around the world and how the world looks up to us for some of our practices was incredible.”
The program concludes today in Costa Rica, a country that imported 100 percent of its soy from the United States in the 2014/2015 marketing year, a true checkoff success story. Participants heard from INOLASA, the sole soybean-crushing plant in Central America. The checkoff, through the United States Soybean Export Council (USSEC), partnered with INOLASA to increase U.S. soybean consumption in Costa Rica, taking it from 33 percent of its imports in 2014 to 100 percent in 2015.
While in Costa Rica, the participants also learned about the soy-fed fish industry from Martec Industries, a company dedicated to the production, processing and marketing of seafood, especially red snapper. The checkoff invests in marketing and promotion of soy in fish feed and helped Martec incorporate soybean meal into its rations. The fish are raised in cages in the Pacific Ocean and their feed includes roughly 18 percent soy, all of which comes from the U.S.
The program also made stops in St. Louis and Panama. In St. Louis at the USB headquarters, participants learned more about the checkoff’s work to maximize farmer profit opportunities through investments in infrastructure research, new industrial uses and high oleic soybeans. The checkoff is focused on key strategies around soybean oil, meal and sustainability – ensuring U.S. soybean farmers remain competitive in the future.
Infrastructure discussions continued as the participants went through the newly expanded Panama Canal. The canal’s recent expansion doubled the waterway’s capacity, helping to ship U.S. soy to foreign markets faster. Foreign soy buyers often pay as much attention to the timeliness of deliveries as they do the price, so the canal’s expansion increased U.S. soy’s competitiveness on the global scale. “It’s incredible the amount of soybeans that move through the canal and the time saved because of this new expansion,” said Adam Hendricks, Kentucky soybean farmer and See for Yourself participant. “In discussing the Panama Canal, we learned that about 44 percent of our exported soybeans from the U.S. pass through the Panama Canal, so it plays an important role in meeting global demands.”
While they knew little of the checkoff’s role prior to the program, the farmer-participants dove right in to better understand the checkoff and the uses of soybeans around the world.
“The farmers on this program really got their eyes opened to what the soy checkoff does for them as a farmer and marketer of soybeans,” says Keith Tapp, Kentucky soybean farmer and A&E Committee chair. “In all of our locations, I think the participants saw a wide range of activities demonstrating how the checkoff works for them and all U.S. soybean farmers.”
WEST COAST DOCK WORKERS VOTE FOR EARLY CONTRACT NEGOTIATIONS
The International Longshore and Warehouse Union (ILWU), which represents about 20,000 dock workers at 29 West Coast ports, this week voted to begin talks now on an extension of its contract with the Pacific Maritime Association (PMA), which represents West Coast port facilities owners. The PMA and ILWU signed a five-year contract in early 2015 – retroactive to July 1, 2014 – after protracted labor talks and a nearly four-month work slowdown that negatively affected U.S. exporters. The U.S. meat and poultry sectors lost an estimated $40 million a week during the slowdown, which went from November 2014 to February 2015.
One-hundred-thirteen trade associations in March 2016 sent a letter to the ILWU and the PMA, urging them to begin early discussions on a contract extension or a new contract. The groups, representing manufacturers, farmers and agribusinesses, wholesalers, retailers, importers, exporters, distributors, transportation and logistics providers and other supply chain stakeholders, also suggested the two sides develop a new model, including early and continuous dialogue between the parties, for future negotiations and called on the union and the port association “to avoid actions that would slow, stop, or disrupt cargo movement during negotiations.”
In a related matter, the International Longshoremen’s Association, representing East Coast and Gulf Coast dock workers, put a hold on its early contact talks with the United States Maritime Alliance. That contract expires in September 2018.
VEGAN MAYO MAKER ACCUSED OF BUYING PRODUCT TO INFLATE SALES FIGURES
A Bloomberg News investigation of Hampton Creek, a vegan company co-founded and co-owned by Humane Society of the United States (HSUS) farm animal activist Josh Balk, uncovered a controversial program to buy back its vegan mayonnaise from retail shelves. Bloomberg alleges this was done to inflate retail sales figures of the eggless mayonnaise, called Just Mayo, as the company sought investor financing.
At least eight months before Hampton Creek sought funding, executives quietly launched an initiative to purchase mass quantities of Just Mayo from stores, according to five former workers and more than 250 receipts, expense reports, cash advances and e-mails reviewed by Bloomberg. Employees were encouraged to make multiple transactions through store self-checkout lanes to avoid looking suspicious. Former employees said they were told to do whatever they wanted with the product after finishing the job. According to Bloomberg, most employees said they threw the product in the trash. Employees also were instructed to conceal their identities, pretending they were customers, and to call store managers of Whole Foods, Safeway and Kroger locations to stoke demand.
Hampton Creek officials said the main purpose of the purchases by company contractors was to check the quality of the mayo. But, said Kurt Jetta of consumer data company Tabs Analytics, “there’s no legitimate explanation for a manufacturer buying significant quantities of their own product from the shelf.”
Earlier this year, Hampton Creek sought additional funds to launch as many as 560 new plant-based products.
In late October 2014 the parent company of Hellmann’s mayonnaise, Unilever, filed a lawsuit against Hampton Creek for false advertising, arguing that Just Mayo couldn’t be marketed as mayonnaise because it doesn’t meet the U.S. Food and Drug Administration definition of the product: 65 percent vegetable oil and at least one egg yolk-containing ingredient. Unilever dropped the suit in December 2014, and the FDA in August 2015 warned Hampton Creek that Just Mayo’s labeling was misleading because the product did not meet the standards for “mayonnaise.”
NMPF Asks USDA to Provide Assistance to Dairy Farmers Struggling from Global Milk Price Depression
As America’s dairy farmers endure the lowest milk prices since the Great Recession of 2009, the National Milk Producers Federation today asked the U.S. Department of Agriculture to provide a measure of relief by purchasing at least $100 million worth of cheese products for donation to the needy – a measure that would help both farmers, and food insecure Americans who patronize food banks.
In a letter sent Friday to Agriculture Secretary Tom Vilsack, National Milk urged the department to use all of its available authorities to purchase $100 to $150 million of cheese. NMPF asked USDA to utilize its Section 32 program, as well as additional authorities through the Farm Service Agency, the Food and Nutrition Service, and the Commodity Credit Corporation.
“Dairy producers here in the United States need assistance to help endure this 18-month depression in milk prices,” said Jim Mulhern, NMPF President and CEO. “This type of assistance would both help economically-strapped farmers, and also help those without ready access to nutritious dairy products.”
A cheese buying program of up to $150 million would allow for the distribution of as much as 90 million pounds of cheese to nonprofit food banks. Donating this quantity of cheese would remove the equivalent of almost 900 million pounds of milk from the domestic commercial market and strengthen farm-level prices by about $0.16 per hundredweight over the course of a year, increasing the incomes of all U.S. dairy farmers by approximately $380 million.
Global dairy demand has sagged in the past two years, due primarily to a reduction in purchases by China and Russia. Meanwhile, a global rise in milk production – particularly in Europe, where production quotas were removed last year – has led to a worldwide imbalance between supply and demand, pushing prices down for farmers around the world. U.S. dairy exports have slumped, leading to a large domestic buildup of American-type cheese (between 2014 and 2016, U.S. cheese exports dropped by almost 20 percent).
The current national price for farmers’ milk is $14.50 per hundredweight, or $1.25 per gallon, the lowest price since October 2009, NMPF’s letter said. The cost of purchased feed has risen recently, producing a Margin Protection Program (MPP) margin of $5.76 per hundredweight for the May-June period, the lowest bimonthly margin since MPP began.
Also in the letter, NMPF once again reiterated its desire to work with USDA to make necessary improvements to MPP, the dairy safety net program created out of the 2014 farm bill. Limitations of the program approved by Congress have caused few producers to sign up for coverage at levels that will provide sufficient support this year, and NMPF hopes to work with Congress and USDA in the future to alleviate the issue.
Thursday, August 11, 2016
Thursday August 11 Ag News
NEBRASKA EXTENSION OFFERS CROP DIAGNOSTIC CLINIC, CORN AND SOYBEAN SCHOOL
Nebraska Extension is providing a late-season crop diagnostic clinic Aug. 24 and a corn and soybean production school Aug. 25. Both sessions will be at the Agricultural Research and Development Center, 1071 County Road G, near Mead.
Aug. 24 topics include corn and soybean disease analysis; crop scene investigation; end-of-season pivot checkup; field to market – quantifying sustainability in crop production; hail damage in soybeans; and summer forages for silage and hay. Nine Certified Crop Adviser credits are available.
Aug. 25 topics include implications of growth and development on corn management; hail injury and corn recovery; cover crops in corn; tradeoffs associated with planting early-maturing corn hybrids; and how not to be a "you don't know Jack" soybean agronomist. Six and a half Certified Crop Adviser credits are available.
"In-season crop management practices will be covered at both clinics," said Nebraska Extension Educator Keith Glewen. "We will take a look at how to best manage what has been taking place in Nebraska fields this year, as well as potential situations that could still arise."
During the Aug. 25 corn and soybean production school, participants will compare multiple maturities in the same field, Glewen said. The various growth and development stages will be used to demonstrate the impact that management practices could have on final yield.
Registration for both clinics begins at 7:15 a.m. The Aug. 24 training runs from 8 a.m. to 5 p.m., and the Aug. 25 session is from 8 a.m. to 3:15 p.m. Participants will meet at the August N. Christenson Research and Education Building.
Early registration is recommended to reserve a seat and resource materials. Cost for the Aug. 24 session is $170 for those registering one week in advance and $195 afterward. Cost for the Aug. 25 session is $100 for those registering one week in advance and $125 afterward.
For more information or to register, contact Nebraska Extension CMDC Programs, 1071 County Road G, Ithaca, NE 68033, call (800) 529-8030, fax (402) 624-8010, email cdunbar2@unl.edu or visit http://ardc.unl.edu/training.shtml.
Ag Credit Conditions Deteriorate Further
Nathan Kauffman, Assistant Vice President and KC Fed - Omaha Branch Executive
Matt Clark, Assistant Economist
Agricultural credit conditions throughout the Tenth Federal Reserve District continued to deteriorate in the second quarter of 2016 as farm income remained subdued. Repayment rates for farm loans softened again and bankers reported a modest increase in both loan repayment problems and the number of loan applications that were denied. Weak farm income and worsening credit conditions also continued to trim farmland values, and respondents in general indicated they expect farmland values to trend lower in the months ahead.
Farm Income
Respondents to the Tenth District Survey of Agricultural Credit Conditions indicated farm income in the quarter continued to tighten. Nearly 75 percent of surveyed bankers reported farm income was less than a year ago, although the percent of bankers that reported weaker farm income declined slightly from the first quarter. Respondents also noted that agricultural producers continued to reduce capital and household spending as profit margins generally remained weak.
Bankers also indicated they expect farm income to remain weak in the third quarter. Similar to last year, a significant number of bankers in each District state expect farm income in the third quarter to be less than a year earlier. They also expect the rate of decline to be sharpest in the Mountain States and Oklahoma, which are relatively more dependent on income from wheat, cattle and energy production than other parts of the District. As the outlook in these three sectors has become increasingly downbeat, more bankers in those regions expect farm income to decline further.
Low commodity prices continued to be the primary driver of reduced farm income. Prices for most of the top commodities produced in the Tenth District have fallen from a year ago and are well below prices of recent years. For example, at the end of July 2016, corn and soybean prices were 47 percent and 24 percent less, respectively, than the same period in 2013. Cattle and hog prices also were lower than a year ago and remained lower than in 2013.
Weaker farm income has continued to have an adverse effect on the District’s Main Street businesses. Almost 85 percent of bankers noted that the weakening farm economy has reduced Main Street business activity, up from about 60 percent last year and just under 40 percent in 2014. The change in spillover effects from the farm economy to Main Street businesses was most significant in the Mountain States and Oklahoma, regions with a stronger relative dependence on the livestock and energy sectors. However, a large number of bankers in Nebraska also continued to report that a weaker farm economy was affecting businesses in their region at a pace similar to last year.
Farm Loan Demand and Credit Conditions
Persistent declines in farm income in the District have continued to affect agricultural credit conditions. Demand for non-real estate farm loans and loan renewals continued to climb in the second quarter with additional increases expected in the third quarter. As noted in the Kansas City Fed’s most recent Agricultural Finance Databook, the rising demand for farm loans has been driven primarily by the need to finance short-term operating expenses as profit margins have remained weak.
Slimmer profit margins also have pulled down the rate of loan repayments. Almost half of all respondents reported that loan repayment rates in the second quarter were lower than a year ago. In addition, the severity of repayment rate problems has increased slightly over the past year. In 2016, more than 7 percent of farm loans had major or severe repayment problems, a relatively large increase from the 2011-13 average of less than 3 percent. The share of farm loans with at least minor repayment problems was approximately 22 percent in the second quarter, and has trended up since 2014.
Evidence of repayment problems also has surfaced at the state level. The share of farm loans with identified repayment problems has increased to at least 18 percent in all states. In the Mountain States, more than 30 percent of farm loans had some type of repayment problem, a jump of 17 percentage points from the 2011-13 average. Loan repayment problems also increased in other District states from the 2011-13 average, reflecting the effects of prolonged weakness in farm income throughout the District.
In response to a weakening farm economy and increased problems with loan repayments, bankers reported an increase in the share of loan applications that were denied in the second quarter. In 2016, almost 15 percent of bankers reported that they denied more than 10 percent of applications for farm operating loans. By comparison, only 5 percent of bankers indicated they had denied loan applications at this rate in 2015. Although District bankers continued to report that ample credit was available for borrowers who are in a strong financial position, the higher rate of loan denials suggests the number of farm borrowers who are less creditworthy has increased over the past year.
Farmland Values
Weakening farm income and deteriorating credit conditions continued to pressure farmland values lower. Values of nonirrigated and irrigated cropland declined 3 percent and 5 percent, respectively, from a year ago. Ranchland values also declined 3 percent, continuing the downward trend of recent quarters. From 2002 to 2014, the value of both irrigated and nonirrigated cropland declined in only one quarter (the third quarter of 2009). As of the second quarter, however, irrigated cropland values have declined in each of the past six quarters and nonirrigated cropland values have declined in four of the past six quarters.
In general, cropland values also have trended lower in each District state. Declines in cropland values were most significant in Kansas and Oklahoma, likely due to sustained weakness in profit margins associated with wheat and cattle production and potential spillover effects from difficulties in the energy sector. The declines in Kansas cropland values were, in fact, the largest year-over-year declines in any state during the downturn of the past two years. Cropland values in Nebraska fell for an eighth consecutive quarter, and the 5 percent decrease in irrigated cropland values for the District was the largest decrease in 29 years.
Many bankers continued to anticipate further declines in farmland values in the months ahead. Specifically, more than 30 percent of bankers expect the values of all types of farmland to decline in the next quarter while less than 2 percent expect an increase. When asked to rank factors contributing to the changes in farmland values, the majority of bankers continued to rank the overall level of farm wealth as the most significant. However, bankers also expect farm income to have a more significant effect this year in the adjustment of farmland values than in previous years, suggesting that reductions in cash flow may continue to weigh on farmland values.
Looking Ahead
Low commodity prices have continued to drag down farm income and weaken agricultural credit conditions. At the end of the second quarter, crop prices appeared poised to remain low alongside growing expectations of a strong fall harvest. Borrowers without sufficient liquidity, substantial net worth or large borrowing bases may find it increasingly more difficult to attain financing if their creditworthiness continues to decline. Moderating farmland values may also add pressure to borrowers and banks that rely on highly leveraged farmland as collateral. Despite these concerns, farm loans in the second quarter that were significantly past due or non-accruing remained slightly below recent averages amid a general, gradual downturn in the farm economy.
Small Grains County Agricultural Production Survey
Many Nebraska producers recently received a survey to collect data that will be used to determine small grain county level acreage, yield, and production estimates for 2016. The USDA’s National Agricultural Statistics Service (NASS) mailed these surveys in late July to producers.
“County-level yields have a direct impact on farmers around the State. USDA’s Farm Service Agency uses the data in administering producer programs such as the Agricultural Risk Coverage (ARC) included in the 2014 Farm Bill, and in determining disaster assistance program calculations,” said Dean Groskurth, Director of NASS’s Northern Plains Region. “NASS cannot publish a county yield unless it receives enough reports from producers in that county to make a statistically defensible estimate. So, it is very important that producers respond to this survey. In 2015, we were unable to publish several large producing counties because we lacked a sufficient number of responses.”
“As required by Federal law, all responses are completely confidential,” Groskurth continued. “We safeguard the privacy of all respondents, ensuring that no individual operation or producer can be identified. Individual responses are also exempt from the Freedom of Information Act.”
“Many producers respond by mail or on our secure website. If not enough responses are received from a county, we will begin contacting producers by phone or in person. County-level data for winter wheat and oats will be published in December.”
Farmers National Company Land Value Update - Nebraska
While farmland prices set records in 2012-2013 and enjoyed double-digit increase in the past 10 years, 2016 has seen a plateau in farmland values. From June 2015 to June 2016, high quality land is selling for $1,500 less per acre on average.
“And they continue to tail off,” said JD Maxson, area sales manager for Farmers National Company in North Platte, Neb. “This decline in farmland values in Nebraska denotes the first decline in recent years. It’s a result of a weak commodity market, soft cash rents and continued stress on livestock producers’ bottom line profit. Corn prices are at the lowest level in three years, affecting profit margins. Producers are waiting for an upward bump in prices, which explains the 'glut' of corn in on-site corn storage, and lower commodity prices have forced investors and owner/operators to rethink their strategies for calendar year 2016.”
Furthermore, as the demand for tillable cropland acres has dropped off, grazing pasture acres paralleled this downward trend as ranchers and livestock producers became more prudent and cautious, Maxson said.
“Livestock producers experienced a record-setting cattle market in 2014 and throughout 2015, only to see cattle numbers increase (heifers to feedlots and not held back for breeding). Livestock producers (cow/calf and cattle on feed) have experienced a sharp decline in bottom line profitability, which has a direct impact on pastureland/grazing acres. With cattle numbers up, one would automatically expect additional pressure on grazing acres; however short line profits have seemingly depressed the pastureland market. Purchasing additional grazing acres, while realizing lower profits at market time, has had a direct reflection on prices paid per acre. Buyers are more cautious and have been forced to be more selective with their long-term farmland investments.”
However, Maxson noted that specific pockets of Nebraska farmland have seen land pricing steady to strong. For example, a March 24 land auction in Milford, Neb., for 260 acres in Seward County sold in three tracts for $10,500-10,700, proving high quality land with improvements like tiling, center pivot irrigation, abundant water and good access to grain markets is still in demand, he said.
On the flipside, dryland cropland is showing a stronger rate of decline,15 to 25 percent location specific, compared to pivot and gravity irrigated cropland. Then in other areas of the state, cropland values vary with the biggest adjustments found in central and western Nebraska. Maxson said he anticipates lower grain prices will persist throughout the rest of 2016, which will continue to have a negative impact on cash rental rates for early 2017.
“With the double digit appreciations over the past almost 10 years, these recent small declines in land values basically just bring us back to normalcy,” he said.
Current National Drought Summary - The Plains and Midwest
Moderate to heavy rain fell in a band from northern New Mexico northeastward through much of northern Oklahoma, Kansas, and the southern and northern reaches of Missouri, and adjacent Iowa last week, with amounts of 3 to 5 inches recorded in a few spots in north-central Missouri and adjacent Iowa, northern and southern Kansas, and northeasternmost New Mexico. Farther north, moderate to heavy rain was also observed in a smaller swath covering south-central to southeastern Nebraska. Light to moderate totals were observed in the central High Plains and eastern Iowa, and only a few tenths of an inch at best fell elsewhere. This pattern of variable precipitation amounts prompted numerous changes of relatively small scale. For instance, patches of deterioration were noted in South Dakota, western Iowa, and south-central Oklahoma while improvements were introduced in southern Nebraska, southeast Oklahoma, southern Kansas, and areas near the Iowa/Missouri border.
Looking Ahead
During the next 5 days (August 11 – 15), heavy precipitation (more than 1.5 inches) is expected in a broad swath from the Big Bend region in Texas eastward through upper central Texas, most of the Mississippi Valley, the adjacent central Gulf Coast, the Ohio Valley, the western Great Lakes region, and interior sections of the Northeast and New England. Amounts may reach 4 to 8 inches in the eastern half of Louisiana and adjacent locations, 3 to 6 inches in the Big Bend, 2 to 5 inches in the upper Midwest (centered near the Wisconsin/Iowa/Minnesota triple point), and 2 to 5 inches along and just north of the Ohio River. Moderate amounts are anticipated in the Southwest, eastern Colorado, most of Florida, the central Plains, and the southern reaches of the Northeast and New England. A few tenths of an inch at best are expected in most other areas, although amounts may approach an inch in the southern Appalachians. High temperatures will average a few degrees above normal in the Great Lakes region, mid-Atlantic, and Northeast, as well as the West Coast states away from the immediate coastline. Near- or below-normal temperatures seem likely elsewhere.
During August 16 – 20, the odds favor wetter than normal weather in a broad swath from the southern Rockies eastward through the southern Plains, lower Mississippi Valley, mid-Atlantic region, and Southeast (outside the Florida Peninsula). The odds also favor wet weather in the northern Great Plains. However, enhanced chances for drier than normal weather exist in the Northwest, the Intermountain West, central sections of the Rockies and Plains, and southern and eastern portions of the Great Lakes region. The odds favor warm weather from the Rockies westward, from the Appalachians eastward, and along the northern one-third of the Nation. In contrast, cooler than normal weather is favored from the Southwest eastward through the lower Mississippi Valley away from the immediate Gulf Coast.
Iowa State University Agronomist Hired to Create Cropping Systems Management Program
A 15-year veteran of helping Iowa farmers improve their cropping practices has joined Iowa State University’s agronomy faculty.
Mark LichtOn Aug. 1, Mark Licht began his new role as an assistant professor in the Department of Agronomy, focused on integrated cropping systems extension. His work will aim to improve crop productivity, profitability and the stewardship of natural resources.
“Sometimes to get the best fit for a position, you have to grow your own,” said John Lawrence, associate dean in the College of Agriculture and Life Sciences and director for Agriculture and Natural Resources Extension and Outreach. “Mark excelled as an extension field agronomist in west central and central Iowa before starting his doctorate program. He understands Iowa fields and has worked closely with Iowa farmers and their crop advisers.”
Licht worked in ISU Extension and Outreach programs for nearly 15 years, serving as an extension program specialist, an extension field agronomist and most recently as an extension cropping systems agronomist.
As a faculty member, Licht’s extension and research responsibilities will address current and emerging issues of agronomic production systems in Iowa, enhancing cropping system performance by promoting practices such as integrating diverse cropping systems and precision agricultural technologies. He also will teach agronomy classes.
Licht earned a bachelor’s degree in agronomy and agricultural extension education in 2000; a master’s degree in soil science in 2003; and a doctorate in crop production and physiology in 2015; all from Iowa State.
Leadership At Its Best Sharpens Skills in Greensboro
Growers gathered in Greensboro, N.C. this week for the first session of the National Corn Growers Assoc. Leadership Academy, co-sponsored by Syngenta. This year's class includes 18 aspiring leaders from 11 states. Upon completion of the program in January, the participants will join more than 500 colleagues who have graduated from this program in the past 30 years.
At the meeting, participants got an up-close look at NCGA from First Vice President Wesley Spurlock, a Leadership Academy alumnus. Spurlock also provided an insightful examination of the main issues facing the association, and the nation's corn farmers, today.
The farmers attending took part in media training and public speaking exercises as well as association management skill building. In addition, the class enjoyed a look at the future trends that will impact the industry and a comprehensive economic forecast given by futurist Bob Treadway. Including presentations focused on communicating in today's ADD world and a deep dive into how personalities impact interactions, the training provided not only tools but insight into how they can be applied most effectively.
"As a Leadership Academy graduate, I have a deep appreciation for the confidence and skills attendees develop in such a short time," Spurlock said. "The Syngenta speakers, as well as the many outside experts brought in, have an incredible ability to hone in on precisely what will be most beneficial for our participants.
"As NCGA's First Vice President, I am excited to see new leaders who want to take on an active role in the association. When these volunteers come together, you can feel their commitment to the industry. It is heartening to know that such strong farmer leaders will carry on our mission well into the future."
This year's Leadership at Its Best Class includes: Duane Aistrope (Iowa); Jayne Dalton (Wis.); Sarah Delbecq (Ind.); Deb Gangwish (Neb.); Patricia Geerdes (Minn.); Jeff Gormong (Ind.); Brent Hoerr (Mo.); Mike Lefever (Colo.); William Leigh (Ill.); Stacy Mayo (Kan.); Lawrence Onweller (Ohio); Mark Recker (Iowa.); Betty Skunes (N.D); Randall Small (Kan.); Clint Stephens (Mo.); Roger Sy (Ill.); Scott Winslow (Minn.); and Josh Yoder (Ohio).
High Oleic Leaps from Field to Fryer
Collaboration is instrumental to change. When the U.S. soybean industry rolled out high oleic soybean varieties more than five years ago, it knew it would take an industrywide effort to bring solutions to the market.
“The success of high oleic soy depends on the collaboration of many partners – from end users all the way back to the seed companies and the farmers,” says John Motter, soybean farmer from Jenera, Ohio who grows high oleic soybeans and also serves as United Soybean Board vice chair. “For us to see growth – in acres and demand – it will take a continuation of these efforts to bring profitability to soybean farmers.”
Enter the town of Findlay, Ohio. Motter and other farmers around Findlay were some of the first to grow high oleic soybeans in 2011. Today, the town of 40,000 was the site of a high oleic takeover of sorts. Farmers gathered to learn from their peers about growing high oleic soybean varieties and passers-by were able to sample goodies cooked in high oleic soybean oil.
For farmers, these varieties perform right along with other varieties in their fields and pack a premium to add to farmer profitability. For food companies, high oleic soybean oil offers a familiar taste with lower saturated fats and without unnecessary trans fats.
“I’m proud to bring a domestic oil back to the food industry,” adds Motter. “So much of our soybean oil demand has been lost to imported oils and that affects my bottom line.”
High oleic soybeans are expected to top one million acres in 2017 – a milestone for the crop. But, the soy industry estimates the demand for high oleic will top 18 million acres by 2023. Farmers are encouraged to seek out local contracts and join their peers in growing high oleic soybeans. To find out more information, visit soyinnovation.com or talk to your local seed representative.
STB Addresses Competitive Switching, Other Rail Oversight Issues
Last week the Surface Transportation Board (STB) proposed new regulations regarding competitive switching on railroads, which if adopted would give shippers who are served by only one major railroad the option to seek competing bids for access to a second Class I railroad nearby without facing hefty fees.
Railroads play an important role in moving soy products in the U.S.
The Proposed Rule responds to a petition for rulemaking submitted by the National Industrial Transportation League (NITL) in July of 2011. The STB initiated a proceeding (EP-711) to consider NITL’s proposal, and received public comments. In March 2014, the STB held a two-day public hearing to receive live testimony from stakeholders. The STB is now granting, in-part, the NITL’s petition for new regulations and setting out proposed regulations for comments, which are due on September 26th. The American Soybean Association (ASA) will be working with agricultural industry partners to analyze the Proposed Rule and potentially submit joint comments.
In addition to the Proposed Rule on competitive switching, the STB is working on separate action to expedite consideration of rail rate dispute cases and implementation of the STB reform and reauthorization bill enacted by Congress.
This week, the Senate Commerce Committee is holding a field hearing on rail shipper issues in Sioux Falls, S.D. that will focus on implementation of the STB reform and reauthorization bill. STB Board Members Dan Elliot and Deb Miller and a representative of CHS, on behalf of The Fertilizer Institute, will testify at the hearing.
Tractor Sales Rose in July, Combines Fell
According to the Association of Equipment Manufacturer's monthly "Flash Report," the sale of all tractors in the U.S. in July 2016, were down 14% compared to the same month last year.
For the seven months in 2016, a total of 128,122 tractors were sold which compares to 1027,975 sold thru July 2015 representing a 0.8% increase year to date.
For the month, two-wheel drive smaller tractors (under 40 HP) were down 6% from last year, while 40 & under 100 HP were down 23%. Sales of 2-wheel drive 100+ HP were down 25%, while 4-wheel drive tractors were down 48%.
For the seven months, two-wheel drive smaller tractors (under 40 HP) are up 10% over last year, while 40 & under 100 HP are down 6%. Sales of 2-wheel drive 100+ HP are down 24%, while 4-wheel drive tractors are down 34%.
Combine sales were down 16% for the month. Sales of combines for the first seven months totaled 1,212, a decrease of 22% over the same period in 2015.
Cargill reports fiscal 2016 fourth-quarter and full-year results
Cargill today reported financial results for the fourth quarter and full fiscal year ended May 31, 2016. The company is on a transformative path to strengthen financial performance, move in step with changing consumer values, and become the most trusted source of sustainable products and services for customers.
Full-year results
- Adjusted operating earnings were $1.64 billion, a 15 percent decrease from the prior year. On a U.S. GAAP basis, net earnings totaled $2.38 billion, up 50 percent from fiscal 2015.
- The variance between adjusted and net earnings included gains on sales of businesses and other assets, asset impairment charges and a LIFO inventory adjustment.
- Revenues totaled $107.2 billion, an 11 percent decline that reflected lower commodity prices, a strong U.S. dollar and divestitures.
- Cash flow from operations equaled $3.41 billion.
Fourth-quarter results
- The company recorded an adjusted operating loss of $19 million compared with a $230 million profit in the prior period. On a U.S. GAAP basis, net earnings were $15 million against a $51 million loss in last year’s fourth quarter.
- Revenues dipped 5 percent to $27.1 billion.
“We are looking ahead as we position our company for higher performance and sustained growth,” said David MacLennan, Cargill’s chairman and chief executive officer. “We have more work to do, but where we have already made changes we are seeing improved results.”
MacLennan cited the broad earnings improvement in food ingredients and the reshaping of the company’s portfolio. “We made important changes, adding capabilities essential to our customers’ success. This includes more than $3 billion in strategic acquisitions and new or expanded facilities, as well as nearly $2.4 billion in divestitures. These moves are making us more competitive in sectors where we intend to lead.”
Cargill delivered strong performance in global animal nutrition, value-added protein and poultry in many regions. In addition, the company posted good results in grain and oilseeds in South America and China, and in food ingredients such as salt, starches, sweeteners and texturizers. Trading activities yielded mixed results, in part due to low volatility in agricultural commodity markets for most of the fiscal year. Stalled growth in several emerging economies also affected earnings.
In recapping the year, MacLennan noted Cargill realized more than $425 million from innovation, primarily new products and services. It saved more than $200 million by increasing efficiency in its plants and supply chains, and by scaling up global shared services.
Throughout the year, Cargill brought together thought leaders and partners to address the linked challenges of food security, sustainability and nutrition. As part of its pledge to end deforestation, the company released a new forest policy and action plans to safeguard resources in critical supply chains. It joined with World Resources Institute to advance thinking on how global agriculture uses water and forest resources. Cargill also led Food Chain Reaction, a global food security simulation that gathered more than 60 leaders from different countries and organizations to explore solutions for the food systems of tomorrow.
This June, Cargill awarded more than $13 million in grants that will improve the lives of more than 1 million people in 15 countries. Among the implementing partners are CARE USA, The Nature Conservancy, Heifer International, Feeding America and Second Harvest Heartland.
“Working with customers and partners around the world, our Cargill team of 150,000 people in 70 countries is helping create the tomorrow we all want to see: one, where together, we thrive.”
Segment results
The Food Ingredients & Applications segment was the largest contributor to adjusted operating earnings in the fourth quarter and full year, with results up substantially from a weak comparative period. The focus on improving performance lifted earnings broadly across edible oils, malt, starches, sweeteners and texturizers, as did the first-quarter acquisition of a chocolate business. Salt for food and other applications posted outstanding results. NatureWax®, a natural vegetable-based wax business, was acquired in the fourth quarter; it is now part of the segment’s bioindustrial products group.
Adjusted operating earnings in Animal Nutrition & Protein rose significantly in the fourth quarter. Full-year results edged below the prior year due to difficult market conditions globally in beef through the first three quarters, with some improvement in North America in the fourth quarter. Elsewhere, segment performance was strong, including in global animal nutrition, turkey and value-added protein in North America, and global poultry with the exception of China. Over the course of the fiscal year, Cargill acquired salmon nutrition leader EWOS; announced about $500 million in acquisitions and investments to grow its North American protein business; and partnered with Jollibee Foods, Asia’s largest foodservice company, to build a supply chain for specialty poultry products in the Philippines.
Full-year earnings in Origination & Processing decreased significantly from a year ago. Three years of good weather in major growing regions and sluggish global demand led to large stocks, weak prices and low volatility, all of which limited trading opportunities. Even so, the segment had strong performance in South America and China. The fourth quarter was not profitable, with results negatively affected by trading and timing effects in oilseed processing. Performance in South America and China, however, continued strong in the fourth quarter. Among the year’s investments, Cargill completed a new oilseed crush, refining and port complex in northeastern China and formed a joint venture to build a grain export terminal in Ukraine on the Black Sea. It also is undertaking significant expansions of its oilseed processing facilities in Três Lagoas, Brazil, and Wichita, Kansas. The company sold its crop insurance agency in the U.S., and exited from crop inputs in Central and Eastern Europe. In the fiscal 2017 first quarter, it agreed to sell its U.S. crop inputs business to Crop Production Services, a subsidiary of Agrium.
Industrial & Financial Services recorded losses for both the quarter and the year, largely due to a fourth-quarter adjustment taken for counterparty risk in ocean shipping. The energy businesses generated operating profits for the full year, despite a small loss in the fourth quarter; metals was profitable in both periods. In the third quarter, subsidiary Black River Asset Management was spun off into three independent firms.
U.S., Mexican Dairy Industry Leaders Pledge Renewed Cooperation at Conclusion of Successful Dairy Summit
Concluding a successful two-day summit here, leaders of U.S. and Mexican dairy industry organizations yesterday pledged to work together to boost trade between the two countries, address mutual challenges and increase dairy consumption while also promoting milk production on both sides of the border.
The dairy leaders signed a memorandum creating a US-Mexico Dairy Alliance that will meet annually to exchange information, review industry trends, and identify and seek solutions for problems affecting either side.
Also in the plan going forward will be ways to further reduce trade barriers between the two countries and defend against efforts to capture generic cheese names like parmesan, asiago and feta for the exclusive use of some European producers.
Signing the memorandum for the United States were Jim Mulhern, president and CEO of the National Milk Producers Federation, and Tom Suber, president of the U.S. Dairy Export Council. Signing for Mexico were Salvador Álvarez Morán, president of the Mexico Livestock Association (CNOG) and Juan Carlos Pardo, president of the National Chamber of Industrial Milk (CANILEC).
Mulhern and Suber characterized the summit as re-energizing a relationship forged under the North American Free Trade Agreement (NAFTA), which came into force in 1994. Mulhern described NAFTA as an example of a trade agreement that substantially benefits both countries.
“Since NAFTA, our markets have converged seeing both U.S. and Mexican dairy farmers growing. U.S. dairy exports to Mexico have increased significantly, while Mexico’s internal milk production has also seen expansion.”
“At the same time,” added Suber, “volatile markets, increased imports from third countries and consumer misinformation about dairy products pose challenges for the dairy industries in both countries that can be best solved through both industries working together.”
Formal goals of the U.S.-Mexico Dairy Alliance include unifying efforts of dairy producers and industries in both countries, maintaining a communication channel between the industry organizations, and analyzing and seeking mutually beneficial solutions to problems affecting the dairy industry in both countries.
EU Watchdog Probes Dow, DuPont Merger
The European Union's antitrust authority on Thursday opened a full-blown investigation into plans by Dow Chemical Co. and DuPont Co. to merge, on concerns the deal would reduce competition in the global agricultural sector.
The European Commission said it would investigate whether the deal may reduce competition in areas such as crop protection, seeds and certain petrochemicals. Announced in December, the proposed merger aims to create an American industry giant with a combined market cap of about $122 billion.
In-depth antitrust inquiries are common for large merger reviews in Brussels and don't necessarily mean a deal will be blocked. If the EU confirms its concerns, the companies can decide to offer concessions, such as selling assets, to assuage the regulator. If those aren't deemed sufficient, Brussels can block the deal.
"The livelihood of farmers depends on access to seeds and crop protection at competitive prices. We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products," said European competition commissioner Margrethe Vestager.
Dow and DuPont on July 20 sought to address some of the concerns raised by the EU, the commission said. However, the commission found their commitments "insufficient to clearly dismiss its serious doubts" about the merger being in line with EU rules.
Given the scale of the two companies, the commission said it was "cooperating closely" with other competition authorities in the U.S., Brazil and Canada, which are also scrutinizing the deal.
DuPont and Dow on Thursday said they had expected "a thorough review" by regulators, but were still confident about the deal closing by the end of the year.
A final EU decision is expected by Dec. 20.
Janet Donlin named executive vice president/CEO of the American Veterinary Medical Association
Dr. Janet Donlin has been named executive vice president/chief executive officer of the American Veterinary Medical Association (AVMA). Donlin will succeed Dr. Ron DeHaven, who is retiring after nine years of service to the AVMA.
Donlin has served as chief executive officer of the AVMA Professional Liability Insurance Trust (AVMA PLIT) since April 2013. The AVMA PLIT is now in its 54th year of dedicated service to AVMA members, providing a wide variety of insurance-related products to veterinarians, veterinary practices and veterinary students.
AVMA President Dr. Tom Meyer cited Donlin’s decades-long service to the veterinary profession and her extensive professional achievements as key factors to her being named the lead executive of a national veterinary association that is approaching a total membership of 90,000 veterinarians from all walks of professional life.
“Dr. Donlin is one of the true champions of veterinary medicine and all it stands for,” Meyer said. “She has an outstanding record of success in both the veterinary association arena and in the animal health industry. She is a skilled strategist with a proven background of diverse AVMA experience and a known reputation for working with leaders from all segments of the veterinary profession, key stakeholders and staff members to drive innovation, growth and success.
“Janet is highly skilled at building teams that can identify member needs and drive programs that deliver the products and services our members want, need and expect,” Meyer continued. “The AVMA is fortunate to welcome Janet to the helm of our national association. She understands the importance of working collaboratively to achieve our shared objectives. She is uniquely qualified to take the role of AVMA executive vice president and chief executive officer.”
Donlin’s hiring marks her return to an association for which she first started working in 1991 as an assistant director in what was then the AVMA Scientific Activities Division. Over the course of the next 17 years, she served as an interim division director, associate executive vice president and assistant executive vice president. Her role as assistant executive vice president required her to work hand-in-hand with the executive vice president to drive execution of the objectives established by the AVMA Board. From 2000-2001, Donlin’s role at the AVMA also included serving as interim CEO of the National Commission on Veterinary Economic Issues, where she oversaw the establishment of the commission as a nonprofit organization.
“My time at the AVMA and my experiences across the profession have reinforced for me time and again that our membership is very diverse, our needs are constantly evolving and our profession continues to face new challenges and opportunities,” Donlin said. “That’s why I’m committed to making certain we continue to build on the AVMA’s core strengths so that we are even more responsive to the needs of our members, and that we advocate with a strong, clear voice on behalf of our entire profession.
“I’m excited to work closely with AVMA leadership and staff, and our colleagues and strategic partners, to advance the AVMA’s mission ‘to lead the profession by advocating for our members and advancing the science and practice of veterinary medicine to improve animal and human health.’ ”
Retiring CEO DeHaven said Donlin’s hiring will bring skilled leadership, as well as sound foundational knowledge, to an association that continues to evolve in order to best meet its members’ needs.
“Dr. Donlin is an experienced association professional with an exceptional amount of knowledge of, and experience with, the AVMA and our membership,” DeHaven said. “She is exactly the right person to continue what we are doing to meet member needs and to take us to the next level.”
Donlin served as chief veterinary officer in the Global Veterinary Business Channel of Hill’s Pet Nutrition from August 2007 to March 2013, where she provided veterinary insights to drive development of innovative products and services to meet the evolving needs of the veterinary profession and pet owners.
She received both her DVM and her Bachelor of Science degree in medical technology from the University of Minnesota. She is also a graduate of the veterinary technician program at the Medical Institute of Minnesota. She is a licensed veterinarian in Illinois, Minnesota and Wisconsin, and has professional membership in several associations, including the AVMA, the American Animal Hospital Association, the American Association of Bovine Practitioners, the American Association of Equine Practitioners, the American Association of Swine Veterinarians, the Illinois State Veterinary Medical Association, the American Society of Association Executives, and the American Association of Corporate and Public Practice Veterinarians.
Donlin is the first veterinarian to earn the Certified Association Executive credential from the American Society of Association Executives. She is a former trustee of the AVMA’s Group Health Life Insurance Trust (now known as AVMA Life), and she is a former board member of the American Association of Corporate and Public Service Veterinarians.
Donlin will begin her employment at the AVMA September 12.
“I’m passionate about member service, and I am honored and humbled to be entrusted with what I consider to be one of the most important positions in veterinary medicine,” Donlin said.
Nebraska Extension is providing a late-season crop diagnostic clinic Aug. 24 and a corn and soybean production school Aug. 25. Both sessions will be at the Agricultural Research and Development Center, 1071 County Road G, near Mead.
Aug. 24 topics include corn and soybean disease analysis; crop scene investigation; end-of-season pivot checkup; field to market – quantifying sustainability in crop production; hail damage in soybeans; and summer forages for silage and hay. Nine Certified Crop Adviser credits are available.
Aug. 25 topics include implications of growth and development on corn management; hail injury and corn recovery; cover crops in corn; tradeoffs associated with planting early-maturing corn hybrids; and how not to be a "you don't know Jack" soybean agronomist. Six and a half Certified Crop Adviser credits are available.
"In-season crop management practices will be covered at both clinics," said Nebraska Extension Educator Keith Glewen. "We will take a look at how to best manage what has been taking place in Nebraska fields this year, as well as potential situations that could still arise."
During the Aug. 25 corn and soybean production school, participants will compare multiple maturities in the same field, Glewen said. The various growth and development stages will be used to demonstrate the impact that management practices could have on final yield.
Registration for both clinics begins at 7:15 a.m. The Aug. 24 training runs from 8 a.m. to 5 p.m., and the Aug. 25 session is from 8 a.m. to 3:15 p.m. Participants will meet at the August N. Christenson Research and Education Building.
Early registration is recommended to reserve a seat and resource materials. Cost for the Aug. 24 session is $170 for those registering one week in advance and $195 afterward. Cost for the Aug. 25 session is $100 for those registering one week in advance and $125 afterward.
For more information or to register, contact Nebraska Extension CMDC Programs, 1071 County Road G, Ithaca, NE 68033, call (800) 529-8030, fax (402) 624-8010, email cdunbar2@unl.edu or visit http://ardc.unl.edu/training.shtml.
Ag Credit Conditions Deteriorate Further
Nathan Kauffman, Assistant Vice President and KC Fed - Omaha Branch Executive
Matt Clark, Assistant Economist
Agricultural credit conditions throughout the Tenth Federal Reserve District continued to deteriorate in the second quarter of 2016 as farm income remained subdued. Repayment rates for farm loans softened again and bankers reported a modest increase in both loan repayment problems and the number of loan applications that were denied. Weak farm income and worsening credit conditions also continued to trim farmland values, and respondents in general indicated they expect farmland values to trend lower in the months ahead.
Farm Income
Respondents to the Tenth District Survey of Agricultural Credit Conditions indicated farm income in the quarter continued to tighten. Nearly 75 percent of surveyed bankers reported farm income was less than a year ago, although the percent of bankers that reported weaker farm income declined slightly from the first quarter. Respondents also noted that agricultural producers continued to reduce capital and household spending as profit margins generally remained weak.
Bankers also indicated they expect farm income to remain weak in the third quarter. Similar to last year, a significant number of bankers in each District state expect farm income in the third quarter to be less than a year earlier. They also expect the rate of decline to be sharpest in the Mountain States and Oklahoma, which are relatively more dependent on income from wheat, cattle and energy production than other parts of the District. As the outlook in these three sectors has become increasingly downbeat, more bankers in those regions expect farm income to decline further.
Low commodity prices continued to be the primary driver of reduced farm income. Prices for most of the top commodities produced in the Tenth District have fallen from a year ago and are well below prices of recent years. For example, at the end of July 2016, corn and soybean prices were 47 percent and 24 percent less, respectively, than the same period in 2013. Cattle and hog prices also were lower than a year ago and remained lower than in 2013.
Weaker farm income has continued to have an adverse effect on the District’s Main Street businesses. Almost 85 percent of bankers noted that the weakening farm economy has reduced Main Street business activity, up from about 60 percent last year and just under 40 percent in 2014. The change in spillover effects from the farm economy to Main Street businesses was most significant in the Mountain States and Oklahoma, regions with a stronger relative dependence on the livestock and energy sectors. However, a large number of bankers in Nebraska also continued to report that a weaker farm economy was affecting businesses in their region at a pace similar to last year.
Farm Loan Demand and Credit Conditions
Persistent declines in farm income in the District have continued to affect agricultural credit conditions. Demand for non-real estate farm loans and loan renewals continued to climb in the second quarter with additional increases expected in the third quarter. As noted in the Kansas City Fed’s most recent Agricultural Finance Databook, the rising demand for farm loans has been driven primarily by the need to finance short-term operating expenses as profit margins have remained weak.
Slimmer profit margins also have pulled down the rate of loan repayments. Almost half of all respondents reported that loan repayment rates in the second quarter were lower than a year ago. In addition, the severity of repayment rate problems has increased slightly over the past year. In 2016, more than 7 percent of farm loans had major or severe repayment problems, a relatively large increase from the 2011-13 average of less than 3 percent. The share of farm loans with at least minor repayment problems was approximately 22 percent in the second quarter, and has trended up since 2014.
Evidence of repayment problems also has surfaced at the state level. The share of farm loans with identified repayment problems has increased to at least 18 percent in all states. In the Mountain States, more than 30 percent of farm loans had some type of repayment problem, a jump of 17 percentage points from the 2011-13 average. Loan repayment problems also increased in other District states from the 2011-13 average, reflecting the effects of prolonged weakness in farm income throughout the District.
In response to a weakening farm economy and increased problems with loan repayments, bankers reported an increase in the share of loan applications that were denied in the second quarter. In 2016, almost 15 percent of bankers reported that they denied more than 10 percent of applications for farm operating loans. By comparison, only 5 percent of bankers indicated they had denied loan applications at this rate in 2015. Although District bankers continued to report that ample credit was available for borrowers who are in a strong financial position, the higher rate of loan denials suggests the number of farm borrowers who are less creditworthy has increased over the past year.
Farmland Values
Weakening farm income and deteriorating credit conditions continued to pressure farmland values lower. Values of nonirrigated and irrigated cropland declined 3 percent and 5 percent, respectively, from a year ago. Ranchland values also declined 3 percent, continuing the downward trend of recent quarters. From 2002 to 2014, the value of both irrigated and nonirrigated cropland declined in only one quarter (the third quarter of 2009). As of the second quarter, however, irrigated cropland values have declined in each of the past six quarters and nonirrigated cropland values have declined in four of the past six quarters.
In general, cropland values also have trended lower in each District state. Declines in cropland values were most significant in Kansas and Oklahoma, likely due to sustained weakness in profit margins associated with wheat and cattle production and potential spillover effects from difficulties in the energy sector. The declines in Kansas cropland values were, in fact, the largest year-over-year declines in any state during the downturn of the past two years. Cropland values in Nebraska fell for an eighth consecutive quarter, and the 5 percent decrease in irrigated cropland values for the District was the largest decrease in 29 years.
Many bankers continued to anticipate further declines in farmland values in the months ahead. Specifically, more than 30 percent of bankers expect the values of all types of farmland to decline in the next quarter while less than 2 percent expect an increase. When asked to rank factors contributing to the changes in farmland values, the majority of bankers continued to rank the overall level of farm wealth as the most significant. However, bankers also expect farm income to have a more significant effect this year in the adjustment of farmland values than in previous years, suggesting that reductions in cash flow may continue to weigh on farmland values.
Looking Ahead
Low commodity prices have continued to drag down farm income and weaken agricultural credit conditions. At the end of the second quarter, crop prices appeared poised to remain low alongside growing expectations of a strong fall harvest. Borrowers without sufficient liquidity, substantial net worth or large borrowing bases may find it increasingly more difficult to attain financing if their creditworthiness continues to decline. Moderating farmland values may also add pressure to borrowers and banks that rely on highly leveraged farmland as collateral. Despite these concerns, farm loans in the second quarter that were significantly past due or non-accruing remained slightly below recent averages amid a general, gradual downturn in the farm economy.
Small Grains County Agricultural Production Survey
Many Nebraska producers recently received a survey to collect data that will be used to determine small grain county level acreage, yield, and production estimates for 2016. The USDA’s National Agricultural Statistics Service (NASS) mailed these surveys in late July to producers.
“County-level yields have a direct impact on farmers around the State. USDA’s Farm Service Agency uses the data in administering producer programs such as the Agricultural Risk Coverage (ARC) included in the 2014 Farm Bill, and in determining disaster assistance program calculations,” said Dean Groskurth, Director of NASS’s Northern Plains Region. “NASS cannot publish a county yield unless it receives enough reports from producers in that county to make a statistically defensible estimate. So, it is very important that producers respond to this survey. In 2015, we were unable to publish several large producing counties because we lacked a sufficient number of responses.”
“As required by Federal law, all responses are completely confidential,” Groskurth continued. “We safeguard the privacy of all respondents, ensuring that no individual operation or producer can be identified. Individual responses are also exempt from the Freedom of Information Act.”
“Many producers respond by mail or on our secure website. If not enough responses are received from a county, we will begin contacting producers by phone or in person. County-level data for winter wheat and oats will be published in December.”
Farmers National Company Land Value Update - Nebraska
While farmland prices set records in 2012-2013 and enjoyed double-digit increase in the past 10 years, 2016 has seen a plateau in farmland values. From June 2015 to June 2016, high quality land is selling for $1,500 less per acre on average.
“And they continue to tail off,” said JD Maxson, area sales manager for Farmers National Company in North Platte, Neb. “This decline in farmland values in Nebraska denotes the first decline in recent years. It’s a result of a weak commodity market, soft cash rents and continued stress on livestock producers’ bottom line profit. Corn prices are at the lowest level in three years, affecting profit margins. Producers are waiting for an upward bump in prices, which explains the 'glut' of corn in on-site corn storage, and lower commodity prices have forced investors and owner/operators to rethink their strategies for calendar year 2016.”
Furthermore, as the demand for tillable cropland acres has dropped off, grazing pasture acres paralleled this downward trend as ranchers and livestock producers became more prudent and cautious, Maxson said.
“Livestock producers experienced a record-setting cattle market in 2014 and throughout 2015, only to see cattle numbers increase (heifers to feedlots and not held back for breeding). Livestock producers (cow/calf and cattle on feed) have experienced a sharp decline in bottom line profitability, which has a direct impact on pastureland/grazing acres. With cattle numbers up, one would automatically expect additional pressure on grazing acres; however short line profits have seemingly depressed the pastureland market. Purchasing additional grazing acres, while realizing lower profits at market time, has had a direct reflection on prices paid per acre. Buyers are more cautious and have been forced to be more selective with their long-term farmland investments.”
However, Maxson noted that specific pockets of Nebraska farmland have seen land pricing steady to strong. For example, a March 24 land auction in Milford, Neb., for 260 acres in Seward County sold in three tracts for $10,500-10,700, proving high quality land with improvements like tiling, center pivot irrigation, abundant water and good access to grain markets is still in demand, he said.
On the flipside, dryland cropland is showing a stronger rate of decline,15 to 25 percent location specific, compared to pivot and gravity irrigated cropland. Then in other areas of the state, cropland values vary with the biggest adjustments found in central and western Nebraska. Maxson said he anticipates lower grain prices will persist throughout the rest of 2016, which will continue to have a negative impact on cash rental rates for early 2017.
“With the double digit appreciations over the past almost 10 years, these recent small declines in land values basically just bring us back to normalcy,” he said.
Current National Drought Summary - The Plains and Midwest
Moderate to heavy rain fell in a band from northern New Mexico northeastward through much of northern Oklahoma, Kansas, and the southern and northern reaches of Missouri, and adjacent Iowa last week, with amounts of 3 to 5 inches recorded in a few spots in north-central Missouri and adjacent Iowa, northern and southern Kansas, and northeasternmost New Mexico. Farther north, moderate to heavy rain was also observed in a smaller swath covering south-central to southeastern Nebraska. Light to moderate totals were observed in the central High Plains and eastern Iowa, and only a few tenths of an inch at best fell elsewhere. This pattern of variable precipitation amounts prompted numerous changes of relatively small scale. For instance, patches of deterioration were noted in South Dakota, western Iowa, and south-central Oklahoma while improvements were introduced in southern Nebraska, southeast Oklahoma, southern Kansas, and areas near the Iowa/Missouri border.
Looking Ahead
During the next 5 days (August 11 – 15), heavy precipitation (more than 1.5 inches) is expected in a broad swath from the Big Bend region in Texas eastward through upper central Texas, most of the Mississippi Valley, the adjacent central Gulf Coast, the Ohio Valley, the western Great Lakes region, and interior sections of the Northeast and New England. Amounts may reach 4 to 8 inches in the eastern half of Louisiana and adjacent locations, 3 to 6 inches in the Big Bend, 2 to 5 inches in the upper Midwest (centered near the Wisconsin/Iowa/Minnesota triple point), and 2 to 5 inches along and just north of the Ohio River. Moderate amounts are anticipated in the Southwest, eastern Colorado, most of Florida, the central Plains, and the southern reaches of the Northeast and New England. A few tenths of an inch at best are expected in most other areas, although amounts may approach an inch in the southern Appalachians. High temperatures will average a few degrees above normal in the Great Lakes region, mid-Atlantic, and Northeast, as well as the West Coast states away from the immediate coastline. Near- or below-normal temperatures seem likely elsewhere.
During August 16 – 20, the odds favor wetter than normal weather in a broad swath from the southern Rockies eastward through the southern Plains, lower Mississippi Valley, mid-Atlantic region, and Southeast (outside the Florida Peninsula). The odds also favor wet weather in the northern Great Plains. However, enhanced chances for drier than normal weather exist in the Northwest, the Intermountain West, central sections of the Rockies and Plains, and southern and eastern portions of the Great Lakes region. The odds favor warm weather from the Rockies westward, from the Appalachians eastward, and along the northern one-third of the Nation. In contrast, cooler than normal weather is favored from the Southwest eastward through the lower Mississippi Valley away from the immediate Gulf Coast.
Iowa State University Agronomist Hired to Create Cropping Systems Management Program
A 15-year veteran of helping Iowa farmers improve their cropping practices has joined Iowa State University’s agronomy faculty.
Mark LichtOn Aug. 1, Mark Licht began his new role as an assistant professor in the Department of Agronomy, focused on integrated cropping systems extension. His work will aim to improve crop productivity, profitability and the stewardship of natural resources.
“Sometimes to get the best fit for a position, you have to grow your own,” said John Lawrence, associate dean in the College of Agriculture and Life Sciences and director for Agriculture and Natural Resources Extension and Outreach. “Mark excelled as an extension field agronomist in west central and central Iowa before starting his doctorate program. He understands Iowa fields and has worked closely with Iowa farmers and their crop advisers.”
Licht worked in ISU Extension and Outreach programs for nearly 15 years, serving as an extension program specialist, an extension field agronomist and most recently as an extension cropping systems agronomist.
As a faculty member, Licht’s extension and research responsibilities will address current and emerging issues of agronomic production systems in Iowa, enhancing cropping system performance by promoting practices such as integrating diverse cropping systems and precision agricultural technologies. He also will teach agronomy classes.
Licht earned a bachelor’s degree in agronomy and agricultural extension education in 2000; a master’s degree in soil science in 2003; and a doctorate in crop production and physiology in 2015; all from Iowa State.
Leadership At Its Best Sharpens Skills in Greensboro
Growers gathered in Greensboro, N.C. this week for the first session of the National Corn Growers Assoc. Leadership Academy, co-sponsored by Syngenta. This year's class includes 18 aspiring leaders from 11 states. Upon completion of the program in January, the participants will join more than 500 colleagues who have graduated from this program in the past 30 years.
At the meeting, participants got an up-close look at NCGA from First Vice President Wesley Spurlock, a Leadership Academy alumnus. Spurlock also provided an insightful examination of the main issues facing the association, and the nation's corn farmers, today.
The farmers attending took part in media training and public speaking exercises as well as association management skill building. In addition, the class enjoyed a look at the future trends that will impact the industry and a comprehensive economic forecast given by futurist Bob Treadway. Including presentations focused on communicating in today's ADD world and a deep dive into how personalities impact interactions, the training provided not only tools but insight into how they can be applied most effectively.
"As a Leadership Academy graduate, I have a deep appreciation for the confidence and skills attendees develop in such a short time," Spurlock said. "The Syngenta speakers, as well as the many outside experts brought in, have an incredible ability to hone in on precisely what will be most beneficial for our participants.
"As NCGA's First Vice President, I am excited to see new leaders who want to take on an active role in the association. When these volunteers come together, you can feel their commitment to the industry. It is heartening to know that such strong farmer leaders will carry on our mission well into the future."
This year's Leadership at Its Best Class includes: Duane Aistrope (Iowa); Jayne Dalton (Wis.); Sarah Delbecq (Ind.); Deb Gangwish (Neb.); Patricia Geerdes (Minn.); Jeff Gormong (Ind.); Brent Hoerr (Mo.); Mike Lefever (Colo.); William Leigh (Ill.); Stacy Mayo (Kan.); Lawrence Onweller (Ohio); Mark Recker (Iowa.); Betty Skunes (N.D); Randall Small (Kan.); Clint Stephens (Mo.); Roger Sy (Ill.); Scott Winslow (Minn.); and Josh Yoder (Ohio).
High Oleic Leaps from Field to Fryer
Collaboration is instrumental to change. When the U.S. soybean industry rolled out high oleic soybean varieties more than five years ago, it knew it would take an industrywide effort to bring solutions to the market.
“The success of high oleic soy depends on the collaboration of many partners – from end users all the way back to the seed companies and the farmers,” says John Motter, soybean farmer from Jenera, Ohio who grows high oleic soybeans and also serves as United Soybean Board vice chair. “For us to see growth – in acres and demand – it will take a continuation of these efforts to bring profitability to soybean farmers.”
Enter the town of Findlay, Ohio. Motter and other farmers around Findlay were some of the first to grow high oleic soybeans in 2011. Today, the town of 40,000 was the site of a high oleic takeover of sorts. Farmers gathered to learn from their peers about growing high oleic soybean varieties and passers-by were able to sample goodies cooked in high oleic soybean oil.
For farmers, these varieties perform right along with other varieties in their fields and pack a premium to add to farmer profitability. For food companies, high oleic soybean oil offers a familiar taste with lower saturated fats and without unnecessary trans fats.
“I’m proud to bring a domestic oil back to the food industry,” adds Motter. “So much of our soybean oil demand has been lost to imported oils and that affects my bottom line.”
High oleic soybeans are expected to top one million acres in 2017 – a milestone for the crop. But, the soy industry estimates the demand for high oleic will top 18 million acres by 2023. Farmers are encouraged to seek out local contracts and join their peers in growing high oleic soybeans. To find out more information, visit soyinnovation.com or talk to your local seed representative.
STB Addresses Competitive Switching, Other Rail Oversight Issues
Last week the Surface Transportation Board (STB) proposed new regulations regarding competitive switching on railroads, which if adopted would give shippers who are served by only one major railroad the option to seek competing bids for access to a second Class I railroad nearby without facing hefty fees.
Railroads play an important role in moving soy products in the U.S.
The Proposed Rule responds to a petition for rulemaking submitted by the National Industrial Transportation League (NITL) in July of 2011. The STB initiated a proceeding (EP-711) to consider NITL’s proposal, and received public comments. In March 2014, the STB held a two-day public hearing to receive live testimony from stakeholders. The STB is now granting, in-part, the NITL’s petition for new regulations and setting out proposed regulations for comments, which are due on September 26th. The American Soybean Association (ASA) will be working with agricultural industry partners to analyze the Proposed Rule and potentially submit joint comments.
In addition to the Proposed Rule on competitive switching, the STB is working on separate action to expedite consideration of rail rate dispute cases and implementation of the STB reform and reauthorization bill enacted by Congress.
This week, the Senate Commerce Committee is holding a field hearing on rail shipper issues in Sioux Falls, S.D. that will focus on implementation of the STB reform and reauthorization bill. STB Board Members Dan Elliot and Deb Miller and a representative of CHS, on behalf of The Fertilizer Institute, will testify at the hearing.
Tractor Sales Rose in July, Combines Fell
According to the Association of Equipment Manufacturer's monthly "Flash Report," the sale of all tractors in the U.S. in July 2016, were down 14% compared to the same month last year.
For the seven months in 2016, a total of 128,122 tractors were sold which compares to 1027,975 sold thru July 2015 representing a 0.8% increase year to date.
For the month, two-wheel drive smaller tractors (under 40 HP) were down 6% from last year, while 40 & under 100 HP were down 23%. Sales of 2-wheel drive 100+ HP were down 25%, while 4-wheel drive tractors were down 48%.
For the seven months, two-wheel drive smaller tractors (under 40 HP) are up 10% over last year, while 40 & under 100 HP are down 6%. Sales of 2-wheel drive 100+ HP are down 24%, while 4-wheel drive tractors are down 34%.
Combine sales were down 16% for the month. Sales of combines for the first seven months totaled 1,212, a decrease of 22% over the same period in 2015.
Cargill reports fiscal 2016 fourth-quarter and full-year results
Cargill today reported financial results for the fourth quarter and full fiscal year ended May 31, 2016. The company is on a transformative path to strengthen financial performance, move in step with changing consumer values, and become the most trusted source of sustainable products and services for customers.
Full-year results
- Adjusted operating earnings were $1.64 billion, a 15 percent decrease from the prior year. On a U.S. GAAP basis, net earnings totaled $2.38 billion, up 50 percent from fiscal 2015.
- The variance between adjusted and net earnings included gains on sales of businesses and other assets, asset impairment charges and a LIFO inventory adjustment.
- Revenues totaled $107.2 billion, an 11 percent decline that reflected lower commodity prices, a strong U.S. dollar and divestitures.
- Cash flow from operations equaled $3.41 billion.
Fourth-quarter results
- The company recorded an adjusted operating loss of $19 million compared with a $230 million profit in the prior period. On a U.S. GAAP basis, net earnings were $15 million against a $51 million loss in last year’s fourth quarter.
- Revenues dipped 5 percent to $27.1 billion.
“We are looking ahead as we position our company for higher performance and sustained growth,” said David MacLennan, Cargill’s chairman and chief executive officer. “We have more work to do, but where we have already made changes we are seeing improved results.”
MacLennan cited the broad earnings improvement in food ingredients and the reshaping of the company’s portfolio. “We made important changes, adding capabilities essential to our customers’ success. This includes more than $3 billion in strategic acquisitions and new or expanded facilities, as well as nearly $2.4 billion in divestitures. These moves are making us more competitive in sectors where we intend to lead.”
Cargill delivered strong performance in global animal nutrition, value-added protein and poultry in many regions. In addition, the company posted good results in grain and oilseeds in South America and China, and in food ingredients such as salt, starches, sweeteners and texturizers. Trading activities yielded mixed results, in part due to low volatility in agricultural commodity markets for most of the fiscal year. Stalled growth in several emerging economies also affected earnings.
In recapping the year, MacLennan noted Cargill realized more than $425 million from innovation, primarily new products and services. It saved more than $200 million by increasing efficiency in its plants and supply chains, and by scaling up global shared services.
Throughout the year, Cargill brought together thought leaders and partners to address the linked challenges of food security, sustainability and nutrition. As part of its pledge to end deforestation, the company released a new forest policy and action plans to safeguard resources in critical supply chains. It joined with World Resources Institute to advance thinking on how global agriculture uses water and forest resources. Cargill also led Food Chain Reaction, a global food security simulation that gathered more than 60 leaders from different countries and organizations to explore solutions for the food systems of tomorrow.
This June, Cargill awarded more than $13 million in grants that will improve the lives of more than 1 million people in 15 countries. Among the implementing partners are CARE USA, The Nature Conservancy, Heifer International, Feeding America and Second Harvest Heartland.
“Working with customers and partners around the world, our Cargill team of 150,000 people in 70 countries is helping create the tomorrow we all want to see: one, where together, we thrive.”
Segment results
The Food Ingredients & Applications segment was the largest contributor to adjusted operating earnings in the fourth quarter and full year, with results up substantially from a weak comparative period. The focus on improving performance lifted earnings broadly across edible oils, malt, starches, sweeteners and texturizers, as did the first-quarter acquisition of a chocolate business. Salt for food and other applications posted outstanding results. NatureWax®, a natural vegetable-based wax business, was acquired in the fourth quarter; it is now part of the segment’s bioindustrial products group.
Adjusted operating earnings in Animal Nutrition & Protein rose significantly in the fourth quarter. Full-year results edged below the prior year due to difficult market conditions globally in beef through the first three quarters, with some improvement in North America in the fourth quarter. Elsewhere, segment performance was strong, including in global animal nutrition, turkey and value-added protein in North America, and global poultry with the exception of China. Over the course of the fiscal year, Cargill acquired salmon nutrition leader EWOS; announced about $500 million in acquisitions and investments to grow its North American protein business; and partnered with Jollibee Foods, Asia’s largest foodservice company, to build a supply chain for specialty poultry products in the Philippines.
Full-year earnings in Origination & Processing decreased significantly from a year ago. Three years of good weather in major growing regions and sluggish global demand led to large stocks, weak prices and low volatility, all of which limited trading opportunities. Even so, the segment had strong performance in South America and China. The fourth quarter was not profitable, with results negatively affected by trading and timing effects in oilseed processing. Performance in South America and China, however, continued strong in the fourth quarter. Among the year’s investments, Cargill completed a new oilseed crush, refining and port complex in northeastern China and formed a joint venture to build a grain export terminal in Ukraine on the Black Sea. It also is undertaking significant expansions of its oilseed processing facilities in Três Lagoas, Brazil, and Wichita, Kansas. The company sold its crop insurance agency in the U.S., and exited from crop inputs in Central and Eastern Europe. In the fiscal 2017 first quarter, it agreed to sell its U.S. crop inputs business to Crop Production Services, a subsidiary of Agrium.
Industrial & Financial Services recorded losses for both the quarter and the year, largely due to a fourth-quarter adjustment taken for counterparty risk in ocean shipping. The energy businesses generated operating profits for the full year, despite a small loss in the fourth quarter; metals was profitable in both periods. In the third quarter, subsidiary Black River Asset Management was spun off into three independent firms.
U.S., Mexican Dairy Industry Leaders Pledge Renewed Cooperation at Conclusion of Successful Dairy Summit
Concluding a successful two-day summit here, leaders of U.S. and Mexican dairy industry organizations yesterday pledged to work together to boost trade between the two countries, address mutual challenges and increase dairy consumption while also promoting milk production on both sides of the border.
The dairy leaders signed a memorandum creating a US-Mexico Dairy Alliance that will meet annually to exchange information, review industry trends, and identify and seek solutions for problems affecting either side.
Also in the plan going forward will be ways to further reduce trade barriers between the two countries and defend against efforts to capture generic cheese names like parmesan, asiago and feta for the exclusive use of some European producers.
Signing the memorandum for the United States were Jim Mulhern, president and CEO of the National Milk Producers Federation, and Tom Suber, president of the U.S. Dairy Export Council. Signing for Mexico were Salvador Álvarez Morán, president of the Mexico Livestock Association (CNOG) and Juan Carlos Pardo, president of the National Chamber of Industrial Milk (CANILEC).
Mulhern and Suber characterized the summit as re-energizing a relationship forged under the North American Free Trade Agreement (NAFTA), which came into force in 1994. Mulhern described NAFTA as an example of a trade agreement that substantially benefits both countries.
“Since NAFTA, our markets have converged seeing both U.S. and Mexican dairy farmers growing. U.S. dairy exports to Mexico have increased significantly, while Mexico’s internal milk production has also seen expansion.”
“At the same time,” added Suber, “volatile markets, increased imports from third countries and consumer misinformation about dairy products pose challenges for the dairy industries in both countries that can be best solved through both industries working together.”
Formal goals of the U.S.-Mexico Dairy Alliance include unifying efforts of dairy producers and industries in both countries, maintaining a communication channel between the industry organizations, and analyzing and seeking mutually beneficial solutions to problems affecting the dairy industry in both countries.
EU Watchdog Probes Dow, DuPont Merger
The European Union's antitrust authority on Thursday opened a full-blown investigation into plans by Dow Chemical Co. and DuPont Co. to merge, on concerns the deal would reduce competition in the global agricultural sector.
The European Commission said it would investigate whether the deal may reduce competition in areas such as crop protection, seeds and certain petrochemicals. Announced in December, the proposed merger aims to create an American industry giant with a combined market cap of about $122 billion.
In-depth antitrust inquiries are common for large merger reviews in Brussels and don't necessarily mean a deal will be blocked. If the EU confirms its concerns, the companies can decide to offer concessions, such as selling assets, to assuage the regulator. If those aren't deemed sufficient, Brussels can block the deal.
"The livelihood of farmers depends on access to seeds and crop protection at competitive prices. We need to make sure that the proposed merger does not lead to higher prices or less innovation for these products," said European competition commissioner Margrethe Vestager.
Dow and DuPont on July 20 sought to address some of the concerns raised by the EU, the commission said. However, the commission found their commitments "insufficient to clearly dismiss its serious doubts" about the merger being in line with EU rules.
Given the scale of the two companies, the commission said it was "cooperating closely" with other competition authorities in the U.S., Brazil and Canada, which are also scrutinizing the deal.
DuPont and Dow on Thursday said they had expected "a thorough review" by regulators, but were still confident about the deal closing by the end of the year.
A final EU decision is expected by Dec. 20.
Janet Donlin named executive vice president/CEO of the American Veterinary Medical Association
Dr. Janet Donlin has been named executive vice president/chief executive officer of the American Veterinary Medical Association (AVMA). Donlin will succeed Dr. Ron DeHaven, who is retiring after nine years of service to the AVMA.
Donlin has served as chief executive officer of the AVMA Professional Liability Insurance Trust (AVMA PLIT) since April 2013. The AVMA PLIT is now in its 54th year of dedicated service to AVMA members, providing a wide variety of insurance-related products to veterinarians, veterinary practices and veterinary students.
AVMA President Dr. Tom Meyer cited Donlin’s decades-long service to the veterinary profession and her extensive professional achievements as key factors to her being named the lead executive of a national veterinary association that is approaching a total membership of 90,000 veterinarians from all walks of professional life.
“Dr. Donlin is one of the true champions of veterinary medicine and all it stands for,” Meyer said. “She has an outstanding record of success in both the veterinary association arena and in the animal health industry. She is a skilled strategist with a proven background of diverse AVMA experience and a known reputation for working with leaders from all segments of the veterinary profession, key stakeholders and staff members to drive innovation, growth and success.
“Janet is highly skilled at building teams that can identify member needs and drive programs that deliver the products and services our members want, need and expect,” Meyer continued. “The AVMA is fortunate to welcome Janet to the helm of our national association. She understands the importance of working collaboratively to achieve our shared objectives. She is uniquely qualified to take the role of AVMA executive vice president and chief executive officer.”
Donlin’s hiring marks her return to an association for which she first started working in 1991 as an assistant director in what was then the AVMA Scientific Activities Division. Over the course of the next 17 years, she served as an interim division director, associate executive vice president and assistant executive vice president. Her role as assistant executive vice president required her to work hand-in-hand with the executive vice president to drive execution of the objectives established by the AVMA Board. From 2000-2001, Donlin’s role at the AVMA also included serving as interim CEO of the National Commission on Veterinary Economic Issues, where she oversaw the establishment of the commission as a nonprofit organization.
“My time at the AVMA and my experiences across the profession have reinforced for me time and again that our membership is very diverse, our needs are constantly evolving and our profession continues to face new challenges and opportunities,” Donlin said. “That’s why I’m committed to making certain we continue to build on the AVMA’s core strengths so that we are even more responsive to the needs of our members, and that we advocate with a strong, clear voice on behalf of our entire profession.
“I’m excited to work closely with AVMA leadership and staff, and our colleagues and strategic partners, to advance the AVMA’s mission ‘to lead the profession by advocating for our members and advancing the science and practice of veterinary medicine to improve animal and human health.’ ”
Retiring CEO DeHaven said Donlin’s hiring will bring skilled leadership, as well as sound foundational knowledge, to an association that continues to evolve in order to best meet its members’ needs.
“Dr. Donlin is an experienced association professional with an exceptional amount of knowledge of, and experience with, the AVMA and our membership,” DeHaven said. “She is exactly the right person to continue what we are doing to meet member needs and to take us to the next level.”
Donlin served as chief veterinary officer in the Global Veterinary Business Channel of Hill’s Pet Nutrition from August 2007 to March 2013, where she provided veterinary insights to drive development of innovative products and services to meet the evolving needs of the veterinary profession and pet owners.
She received both her DVM and her Bachelor of Science degree in medical technology from the University of Minnesota. She is also a graduate of the veterinary technician program at the Medical Institute of Minnesota. She is a licensed veterinarian in Illinois, Minnesota and Wisconsin, and has professional membership in several associations, including the AVMA, the American Animal Hospital Association, the American Association of Bovine Practitioners, the American Association of Equine Practitioners, the American Association of Swine Veterinarians, the Illinois State Veterinary Medical Association, the American Society of Association Executives, and the American Association of Corporate and Public Practice Veterinarians.
Donlin is the first veterinarian to earn the Certified Association Executive credential from the American Society of Association Executives. She is a former trustee of the AVMA’s Group Health Life Insurance Trust (now known as AVMA Life), and she is a former board member of the American Association of Corporate and Public Service Veterinarians.
Donlin will begin her employment at the AVMA September 12.
“I’m passionate about member service, and I am honored and humbled to be entrusted with what I consider to be one of the most important positions in veterinary medicine,” Donlin said.
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