Tony C. Dreibus reported in today’s Wall Street Journal that, “Corn and wheat futures tumbled to their lowest prices in nearly four years as favorable weather over the July Fourth holiday weekend upgraded prospects for U.S. crops.
“Soybeans fell, too, closing at their lowest level in more than four months.
“In the past week, up to six times the normal amount of precipitation fell in parts of Iowa and Illinois, the biggest U.S. growers of corn and soybeans, further improving growing conditions. About three-fourths of the nation’s corn and soybean crops were in good or excellent condition as of Sunday, according to the U.S. Agriculture Department [related graph].”
Bloomberg writer Jeff Wilson reported yesterday that, “The 8-foot (2.4-meter) corn stalks on Bill Long’s farm in southern Illinois are so big, green and healthy that he wishes he’d sold more of it sooner.
“Like many growers across the Midwest, Long expects a second straight record crop that will boost domestic stockpiles already at a four-year high. Output in the U.S. will jump 2.8 percent to 14.314 billion bushels, the most ever, researcher The Linn Group Inc. estimated in a July 1 report. Even after fewer acres were planted, the wettest June on record left fields in the best condition since 2003 and sent prices into a bear market two months before the harvest starts.
“‘There is a wall of grain coming at us,’ said Roy Huckabay, an executive vice president at Linn Group in Chicago, said in a telephone interview July 2.”
Robert Gebelhoff reported earlier this week at the Milwaukee Journal Sentinel Online that, “Schools across the nation are preparing to work with stricter standards for nutrition from the U.S. Department of Agriculture, as part of a nationwide campaign championed by first lady Michelle Obama to eliminate empty calories. The new standards took effect Tuesday for all schools that participate in the National School Lunch Program and will build off previously implemented standards that limited serving sizes and restricted what food was healthy enough for the program.
“What can students expect to find? Wheat bread, low-calorie drinks, meals with limited sugar, fat and salt.
“Some district officials are saying they’re all for healthy food, but they have to sell enough hot lunches to break even on their program — and that won’t work if the kids shun the food. They also are a little prickly about federal officials telling them what to do.”
Mr. Gebelhoff explained that, “Frustration by schools and parents across the country prompted Republicans in Congress to propose a waiver system that would allow schools strapped for cash the chance to receive federal subsidies from the government without having to comply with the USDA’s requirements. If it becomes law, schools that can demonstrate a net loss over a six-month period in their food service would be eligible to operate outside the standards.”
AP writer Kevin Burbach reported yesterday that, “The U.S Department of Agriculture will provide up to $50 million over the next five years for conservation programs in the Red River Basin in North Dakota, South Dakota and Minnesota, Agriculture Secretary Tom Vilsack and Democratic Minnesota U.S. Rep. Collin Petersonannounced Wednesday.
“The funding, which comes from the 2014 Farm Bill, will be distributed through the USDA’S Natural Resources Conservation Service and be used to minimize flooding, boost soil health, improve water quality and enhance wildlife habitat in the 25 million-acre watershed. The funding will provide financial incentives to landowners, ranchers and farmers who make conservation efforts, such as restoring and protecting wetlands and grasslands.
“[Rep. Peterson] and Vilsack announced the funding during a trip to Moorhead. They were joined by members of the North Dakota and Minnesota congressional delegations.”
Farm broadcaster Mike Hergert of the Red River Farm Network (RRFN), spoke with Rep. Peterson about the conservation funding yesterday. The audio report, which can be heard here (MP3- 2:08), was included on RRFN’s Agriculture Today program yesterday.
Daniel Finney reported on the front page of yesterday’s Des Moines Register that, “Punishing thunderstorms, tornadoes and hail assaulted Iowa for a second straight day Monday, killing at least one man and leaving a teenager missing, flooding streets, destroying property and battering weather-weary residents.”
The article noted that, “There were reports Tuesday of over 5 inches of rain falling on Monday alone.”
More specifically, Mr. Finney indicated that, “Hail and wind flattened corn crops and battered homes and buildings across the state [see photos here and here].
“Hail as large 4 inches in diameter — slightly larger than a softball — crashed to the ground in Rockwell City in Calhoun County.
“Six inches of rain clobbered Cedar Rapids from 10 p.m. Sunday through about noon Monday. Cedar Rapids rescuers evacuated some areas by boat.
“Another 5.6 inches of rain drenched Center Junction in Jones County in about 12 hours from late Sunday through Monday morning.”
Nonetheless, the Register article indicated that, “The crops that weren’t destroyed by storms could help return corn yields back to normal, [Elwynn Taylor, Iowa State University climatologist] said.”
A news release yesterday from USDA’s National Agricultural Statistics Service (NASS) stated that, “[NASS] estimated a record high 84.8 million acres of soybeans planted in the United States for 2014, up 11 percent from last year, according to the Acreage report released today. Corn acres planted is estimated at 91.6 million acres, down 4 percent from last year, representing the lowest planted acreage in the United States since 2010.”
“All cotton planted area for 2014 is estimated at 11.4 million acres, 9 percent above last year,” the NASS update added.
The update noted that, “NASS today also released the quarterly Grain Stocks report to provide estimates of on-farm and off-farm stocks as of June 1. Key findings in that report include:
“Soybeans stored totaled 405 million bushels, down 7 percent from June 1, 2013. On-farm soybean stocks were down 36 percent from a year ago, while off-farm stocks were up 12 percent.
“Corn stocks totaled 3.85 billion bushels, up 39 percent from the same time last year. On-farm corn stocks were up 48 percent from a year ago, and off-farm stocks were up 32 percent.”
Abbie Fentress Swanson reported on Friday at National Public Radio (NPR) Online that, “If you’re bringing home the bacon, you may have noticed a price tag inching upward.
“Consumers are paying nearly 13 percent more for pork at the supermarket than they were this time last year, according to the U.S. Department of Agriculture. A deadly pig disease is partially to blame.
“Porcine epidemic diarrhea virus, or PEDv, has killed more than 7 million piglets in the past year, and the number of cases is on the rise. Many hog producers are worried about how to keep their farms immune from a disease that has no proven cure.”
The NPR update noted that, “Meanwhile, economists predict that farmers will reduce the size of their herds this year to minimize costs should PEDv infect their operations. Consumers can also expect pork prices, which now average almost $4 a pound, to continue to rise during the second half of 2014.”
Ron Hays, of The Oklahoma Farm Report and Radio Oklahoma Network, spoke earlier this week with House Ag Committee Chairman Frank Lucas (R., Okla.) about Farm Bill issues, as well as the Commodity Futures Trading Commission (CFTC) reauthorization measure that recently passed the House of Representatives.
An audio replay and summary of the Chairman’s remarks from this week can be found here, while an unofficial FarmPolicy.comtranscript of the conversation with Ron Hays and Chairman Lucas is available here.
Gregory Meyer reported yesterday at The Financial Times Online that, “The chances of finding a bull in a maize field are near zero right now. With each passing week, a blockbuster harvest of corn in the US – the world’s largest producer – is looking more and more likely.
“Spot corn prices have responded. They are down a third in the past year and weighing on commodity indices. On Monday the market for the most widely traded grain will face a further test when the government issues a pair of crucial supply and demand reports.”
The FT article noted that, “It is too early to make precise harvest forecasts with confidence. Two years ago, a complacent market caught fire as extreme heat descended on the Midwest and lingered throughout corn’s sensitive pollination stage. The end result: a decimated crop and prices above $8 per bushel.
“Joel Widenor, meteorologist at Commodity Weather Group, says a similar heatwave this year would cause problems. But soils now are more moist than in 2012, making plants more resilient and damping the hottest daytime temperatures, he adds. For now, excessive heat is not predicted.”
University of Illinois agricultural economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Prospects for Grain Farm Incomes in 2014”) that, “Average grain farm incomes in 2014 likely will be much lower than 2013 incomes. Corn prices near $4.20 per bushel combined with above average yields could result in average incomes on grain farms in Illinois around $45,000 per farm, slightly below the average for the years from 1996 through 2005. A scenario that would result in average incomes near $134,000 per farm, the 2013 level of average income, would be above average yields combined with corn prices near $4.80 per bushel. This is a large range ($45,000 to $134,000), and it represents the likely range of average grain farm incomes over the next several years, with lower incomes possible if low commodity prices occur [related graph].”
Yesterday’s update noted that, “While grain prices and yields are far from certain, most current projections of prices and yields result in much lower incomes for 2014.”
In conclusion, yesterday’s farmdoc update indicated that, “Corn prices in the low $4.00 range likely will result in incomes below $50,000. Corn prices in the high $4.00 range will result in average incomes above $100,000. If corn prices average around $4.50 over the next several years, average incomes likely will be in the above range for the next several years. Lower incomes are possible with corn prices below $4.00 per bushel.”
Donnelle Eller reported yesterday at The Des Moines Register Online that, “Storms over the past week have damaged thousands of crop acres in northwest Iowa, officials say, leaving farmers uncertain whether they’ll be able to replant.
“‘I don’t ever remember seeing this much standing water,’ said Joel DeJong, an Iowa State University field agronomist in northwest Iowa for over two decades. ‘There’s a lot of standing water.’
“Hail and wind also damaged Iowa corn and soybeans. And farmers on the western state border have rising river waters.”
The article noted that, “Farmers will assess over the coming days whether crops can be replanted.”
“Seventy-four percent of the nation’s corn crop is rated good to excellent, compared to 76% last week…Seventy-two percent of the soybeans are rated good to excellent, compared to 73% percent last week.”
The DTN article added that, “Winter wheat harvest is at 33%, compared to 16% last week and a five-year average of 31%. Winter wheat condition is holding steady at 44% poor to very poor and 25% good to excellent.”
Bradley Lubben and James Pease indicated recently at Choices Magazine Online (“Conservation and the Agricultural Act of 2014”) that, “While overall conservation spending is projected to decline from baseline levels under the new Act [The Agricultural Act of 2014 (the Act), or commonly the 2014 Farm Bill], the allocation of spending among conservation programs provides insights into the changing focus of conservation efforts. Analysis from the U.S. Department of Agriculture (USDA) Economic Research Service illustrates the changing conservation priorities since the 1996 Farm Bill (USDA Economic Research Service, 2014). Figure 1 shows the share of conservation spending by 2014 Farm Bill major program area (and their predecessors). Reduced spending for the conservation title primarily comes from reductions in CRP funding resulting from a lower enrollment acreage cap. While the CRP has been the largest single component of conservation spending since its creation in 1985, working lands programs (EQIP and CSP) are projected to comprise the majority of spending over the fiscal and program years 2014-2018. Working lands program funding is projected to continue its growth throughout 2014-2018, but at slower rates than the pre-Act baseline. And ACEP easement programs are expected to receive less funding under the 2014 Farm Bill than their predecessor programs received under the 2008 Farm Bill.
“Reduced conservation program funding could reduce conservation efforts nationally, although the extension of conservation compliance requirements to crop insurance program participants should expand the requirements for maintaining at least minimal conservation practices on agricultural land across the country.”
House Ag Subcommittee Hearing– Impact of EPA Water Rule on Agricultural Producers
DTN Ag Policy Editor Chris Clayton reported yesterday that, “The controversial waters of the United States rule continues to reflect a lack of clarity when it comes to agricultural exemptions and the relationship USDA will play in helping producers avoid needing permits and other regulatory demands.
“Robert Bonnie, USDA’s undersecretary for Natural Resources and Environment, testified Thursday before the House Agriculture Subcommittee on Conservation, Energy and Forestry in a contentious hearing in which House members from both parties criticized the perceived federal ‘land grab.’”
Mr. Clayton pointed out that, “The hearing came as legislation was introduced by 30 Republican senators on Thursday specifically to block EPA and the Army Corps from finalizing the water of the U.S. rule.”
A news release yesterday from Sen. Mark Pryor (D., Ark.) indicated that, “Chairman Mark Pryor today spoke on the Senate floor in support of the Agriculture Appropriations Bill, bipartisan legislation he crafted to help grow our agricultural industry, support our rural communities, and improve the quality of life for families. Pryor is the Chairman of the Agriculture Appropriations Subcommittee.
“The bill passed unanimously out of the Appropriations Committee in May and will now be voted on by the full Senate as part of the bipartisan appropriations package.”
In part, Sen. Pryor stated that, “Mr. President, today I rise in support of the FY15 Agriculture Appropriations Bill. Ranking Member Blunt and I worked tirelessly to craft this common-sense, bipartisan bill. It passed unanimously out of the Appropriations Committee last month, and I’m confident my colleagues will support it this week on the Senate floor.
“Agriculture is something America does better than anyone else. In Arkansas alone, agriculture contributes $17 billion in economic activity annually. It supports 25% of my state’s economy and it is responsible for 1 in 6 jobs.”
Reuters writer Lucia Mutikani reported yesterday that, “U.S. consumer prices recorded their largest increase in more than a year in May as costs for a range of goods and services rose, likely easing the Federal Reserve’s concerns that inflation was running too low.
“The Labor Department said on Tuesday its Consumer Price Index increased 0.4 percent last month, with food prices posting their biggest rise since August 2011.”
The article noted that, “Food prices increased 0.5 percent in May, the fifth consecutive monthly increase.”
More specifically, the CPI report indicated that, “The index for meats, poultry, fish, and eggs rose 1.4 percent in May after a 1.5 percent increase in April, with virtually all its major components increasing.”
Bloomberg writer Megan Durisin reported yesterday that, “U.S. ground-beef prices are up 76 percent since 2009 to the highest on record, after a seven-year decline in the herd left the fewest cattle in at least six decades, government data show. Meat costs are rising faster than any other food group, eroding profit margins at Hormel Foods Corp. and forcing Costco Wholesale Corp. and Chipotle Mexican Grill Inc. to raise prices.
“Supply probably will remain tight. It can take three years to expand the herd, and a prolonged drought in Texas, the top producer, parched pastures needed to raise young animals. The government says the U.S. will become a net beef importer in 2015. Cattle futures already up 22 percent in the past year in Chicago may rally 8.3 percent to $1.578 a pound by the end of December, a Bloomberg survey of five analysts showed.”
Justin Sink reported yesterday at The Hill Online that, “First lady Michelle Obama on Monday blasted back at critics of her school lunch program, arguing parents should ensure their children eat healthy meals.
“Obama said parents and school leaders can’t let children make the call to eat pizza and burgers for lunch every day.
“‘If I let my kids dictate what we have for dinner every day, it would be French fries, chips and candy, but we don’t run our households like that, and we can’t run our schools like that,’ the first lady said in an interview with MSN.”
Yesterday’s update noted that, “House Republicans are expected to hold a floor vote this week on a bill that would waive tougher nutritional standards on school lunches if the school shows it has operated at a net loss over six months.”
“The White House has backed a compromise agreement adopted by the Senate Appropriations Committee. Under that deal, tougher requirements on sodium levels would not be implemented, although requirements for schools to offer fruits and vegetables would be kept,” the Hill article said.