Jesse Newman reported in today’s Wall Street Journal that, “Two visitors on an annual Midwest crop tour here [McLean County, Il] this week quickly found themselves enveloped by 10-foot-high stalks of corn, an up-close view of what some think could be an even-larger U.S. crop than the record harvest projected by federal forecasters.”
The article noted that, “So far, estimates of corn yields from states on the closely watched Pro Farmer tour mostly have exceededU.S. Agriculture Department estimates [graph], adding further pressure to corn prices that have dropped 15% this year and are trading near four-year lows [graph]. Tour findings also indicate that much of the nation’s soybean crop, also expected to reach a record this year, is in good health as it undergoes its main growth stage.
“Corn futures for September delivery, the front-month contract, fell three cents, or 0.8%, to $3.595 a bushel Wednesday on the Chicago Board of Trade. Prices are off 1.7% so far this week.”
Jesse Newman reported yesterday at The Wall Street Journal Online that, “Indiana’s soybean crop will outpace last year’s production, according to an average of survey results collected in the state by scouts on a closely watched crop tour.
“Soybeans will come in at 1220.79 pods per 3-foot square, above the state’s three-year average of 1118.65 pods and 3% higher than the crop tour’s 2013 average of 1185.14 pods.”
Jesse Newman reported yesterday at The Wall Street Journal Online that, “The corn crop in Ohio, the nation’s seventh largest producer of the grain, will surpass projections made in the most recent federal estimates, according to an average of survey results collected by crop scouts on a closely watched crop tour.
“Corn yield potential across five regions of Ohio was estimated Monday at 182.11 bushels per acre, well above the state’s three-year average of 146.13, and greater than the U. S. Department of Agriculture’s Aug. 1 forecast for the state, which pegged yields at 177.0 bushels per acre.
“The new estimate is 3% higher than last year’s state record of 177.0 bushels per acre, reported by the USDA.”
Ms. Newman added that, “South Dakota’s three averaged regions are expected to yield an average 152.71 bushels per acre, almost 10% higher than the USDA’s prediction of 139.0 bushels made earlier this month.”
“The assessment, from Jeff Brown, 45 years old, a fifth-generation farmer outside Decatur, Ill., sums up the view of most people who grow, trade or process corn as they brace for another record U.S. harvest.
Sergio Silva is one of a growing number of Hispanics who own or operate farms in the United States. Video Credit By Channon Hodge, Tanzina Vega, Ben Laffin and Ashley Maas on Publish Date August 17, 2014.
Jesse Newman reported in today’s Wall Street Journal that, “Farmland values in the U.S. Midwest remained mostly stagnant in the second quarter, the latest sign of a slowdown in the market after a multiyear boom, according to Federal Reserve reports on Thursday.
“The average price of farmland in the Federal Reserve Bank of St. Louis’s district, which includes parts of Illinois, Indiana and Missouri, dropped 0.4% in the second quarter from the previous quarter, the bank said [related graph].”
DTN Executive Editor Marcia Zarley Taylor reported yesterday at the Minding Ag’s Business blog that, “Great Plains wheat growers were howling over USDA’s decision to postpone a big promise in the 2014 farm bill, as DTN’s Chris Clayton and Jerry Hagstrom reported last week (see ‘Vilsack Resists APH Update’).
“Growers victimized by years of severe Great Plains drought had fought for a provision to update their crop insurance Actual Production History, or APH, to exclude years in which county yields fell more than 50% below the 10-year average. Under such dire countywide conditions, growers were supposed to be able to delete their own low performance year from their APH history and divide their averages by nine. This was a way for grain producers with near zero yields to retain some semblance of insurance coverage, but prevent fraud since the county would need to suffer a disaster before an individual could erase low yields. Growers in adjacent counties would also be eligible for yield forgiveness.”
Yesterday’s Crop Production report from the USDA’s National Agricultural Statistics Service (NASS) noted that, “Corn production is forecast at 14.0 billion bushels, up 1 percent from 2013. Based on conditions as of August 1, yields are expected to average 167.4 bushels per acre, up 8.6 bushels from 2013. If realized, this will be the highest yield and production on record for the United States [related graph].”
The report added that, “Soybean production is forecast at a record 3.82 billion bushels, up 16 percent from last year. Based on August 1 conditions, yields are expected to average a record high 45.4 bushels per acre, up 2.1 bushels from last year. Area for harvest in the United States is forecast at a record 84.1 million acres, unchanged from June but up 11 percent from last year [related graph].”
A summary of key variables for corn from yesterday’s WASDE report is available here, while a soybean summary can be found here.
The WASDE update noted that, “The projected season-average farm price for corn is lowered 10 cents at both ends of the range to $3.55 to $4.25 per bushel…[and]… The U.S. season-average soybean price for 2014/15 is forecast at $9.35 to $11.35 per bushel, down 15 cents on both ends.”
“Analysts surveyed by The Wall Street Journal said the U.S. Department of Agriculture will peg corn production at 14.2 billion bushels on yields of 170 bushels an acre, both records, in a monthly supply-and-demand report set for release at noon on Tuesday.
“About three-fourths of the U.S. corn crop was in good or excellent shape as of Sunday, according to the USDA, due to rainy, cool weather through most of the growing season.”
Today’s article noted that, “Corn futures for September delivery, the front-month contract, gained five cents, or 1.4%, to $3.56 ¾ a bushel on the Chicago Board of Trade, the first increase in three sessions. December futures, the most-active by volume, rose 4¾ cents, or 1.3%, to $3.68¼ a bushel on the CBOT.”
AP writer David Pitt reported on Friday that, “A mild summer across much of the nation’s heartland has provided optimum growing conditions for the nation’s corn and soybean crops. Pair that with high-yield seeds and other new farming technologies, and the U.S. is looking at busting records come harvest time.
“The U.S. Department of Agriculture already has predicted a record soybean crop of 3.8 billion bushels. And the corn crop, it said in July, would be large but not bigger than last year’s record of 13.9 billion bushels. However, many market analysts and some farmers expect the USDA to revise expectations upward in a report based on field surveys that’s due out Tuesday.”
The article noted that, “‘Illinois has largely been dealt to date pretty close to a royal flush on weather and I’m sure that the yields are going to be very high here,’ said Scott Irwin, a University of Illinois professor of agricultural and consumer economics.
“The expected large harvest has driven corn and soybean prices significantly lower, but it isn’t expected to make much of a short-time difference in consumer food prices. However, since the grains are staples in livestock feed, lower prices could eventually lead to a decline in the cost of beef, pork, chicken and milk.”
The Wall Street Journal reported in Friday’s paper that, “Russia banned imports of a wide range of U.S. and European foods on Thursday in response to Western sanctions.”
See also this short New York Times video from August 7- Dmitri A. Medvedev, the Russian prime minister, and Frédéric Vincent, a spokesman for the European Commission, discussed Russia’s ban on food imports from the United States and other countries. (Image CreditDmitry Astakhov/RIA Novosti Russian Government, via Associated Press).
Below are some recent graphs depicting several economic variables with respect to Russia’s action (click on graphs for larger view).
Paul Sonne and Anton Troianovski reported in today’s Wall Street Journal that, “Russia banned imports of a wide range of U.S. and European foods on Thursday in response to Western sanctions, confronting Russians with a type of economic isolation largely unseen since the Soviet era.
“Prime Minister Dmitry Medvedev outlined the products subject to the one-year ban—beef, pork, poultry, fish, fruit, vegetables, cheese, milk and other dairy products from the U.S., Canada, the European Union, Norway and Australia—in a radical response to penalties imposed on Russia over the crisis in Ukraine.”
Gregory L. White and Laurence Norman reported in today’s Wall Street Journal that, “Russian President Vladimir Putin fired back at Western sanctions on Wednesday, ordering bans on imports of food and other products from the nations that imposed the restrictions, in the latest sign of Kremlin defiance of efforts to force an end to its support for separatists fighting in Ukraine.”
Today’s article explained that, “Several waves of Western sanctions, including last week’s that affected entire sectors such as finance, oil and defense, have helped tip Russia’s slowing economy toward recession and fueled capital flight. But the Kremlin has shown no sign of changing direction. Russian officials said Wednesday they planned to step up food imports from Brazil and other countries that hadn’t joined the sanctions.
“Mr. Putin spelled out his retaliatory measures on Wednesday in a presidential decree ordering partial or complete bans lasting one year on a range of food and farm products, as well as raw materials, from countries that imposed sanctions, including the U.S., the European Union, Japan and Australia. RIA Novosti, the state news agency, quoted a Russian official saying all U.S. agricultural imports and that all EU fruits and vegetables would be banned.
“A final list of banned products is expected to be released in coming days. A Russian official familiar with the plans said they would cover some fruits, vegetables, dairy products and cheese, as well as liquor, meat and poultry.”
The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “House Agriculture Chairman Frank Lucas, R-Okla., continues to complain that USDA is not implementing a provision in the 2014 farm bill that would give drought-stricken Southern Plains farmers a break on their crop insurance. This is important for winter wheat producers in Oklahoma who will begin planting the 2015 crop in earnest in September.
“The farm bill, signed into law in February, would allow farmers to boost their actual production history, or APH, by excluding years in which their yields are more than 50 percent below the 10-year average for their county. While USDA officials earlier notified Lucas they will delay implementation due to other pressing matters, Lucas said he has urged them to allow the APH adjustments on a regional basis or for a single crop.”
Purdue University agricultural economist Chris Hurt indicated yesterday at the farmdoc daily blog (“Where Will Beef Cows Expand?”) that, “It is getting to be a well repeated story. Beef cow numbers are at their lowest level since 1962. Cattle and feeder cattle prices are at record highs and feed prices have dropped. Beef consumers continue to eat beef and are rewarding the beef industry with very profitable returns. So when are beef producers going to expand the breeding herd and in what regions of the country will that occur?
“To answer those questions we first look at the areas of the country that had the biggest reductions in beef cow numbers due to drought, high feed prices, and financial losses. Since 2007, beef cow numbers dropped by 12 percent totaling 3.8 million head. The biggest declines were in the region with the most cows-the Southern Plains- which accounted for 1.6 million of the decline. Texas, the big beef cow state, had a reduction of 1.4 million head, an astonishing 36 percent of the nation’s total decline. That region’s expansion opportunities are very mixed due to lingering drought. About one-third of Texas remains in the three highest drought categories, D2-D4. Importantly, parts of cow-dense eastern Texas are now out of drought and the National Weather Service is forecasting some continued drought abatement by this fall for the region. In conclusion, lingering drought in the Southern Plains will tend to mean a slow expansion there.
“The second most important region for beef cows is the Southeast, which had an 822,000 head beef cow reduction since 2007, or 21 percent of the nation’s total. The biggest reductions were in Tennessee and Kentucky and accounted for 59 percent of the region’s decline. The Southeast is generally in good shape for pastures as the impacts of the 2012 drought have passed.”
A news release on Friday from USDA’s National Agricultural Statistics Service (NASS) indicated that, “U.S. farmers spent $367.3 billion on agricultural production in 2013, a 2.0 percent increase from 2012, according to the Farm Production Expenditures report, published today by [NASS].
“Per farm, the average expenditures total $175,270 compared with $171,309 in 2012, up 2.3 percent [related graph]. Crop farms account for the majority of production expenditures in 2013. The average expenditure per crop farm totals $211,659 compared to $143,521 per livestock farm.”
Donnelle Eller reported on Friday at The Des Moines Register Online that, “The cost to farm last year climbed, with Iowa growers spending nearly $30 billion on expenses such as rents, feed, livestock and fuel, the U.S. Department of Agriculture said today.
“It was a 3 percent increase, or $835 million more than 2012, the federal government data showed.
“U.S. farmers spent $7.2 billion more last year, with expenses rising 2 percent to $367.3 billion.”