FarmPolicy

August 28, 2014

Ag Economy; Policy Issues; Biotech; Regs; and, Immigration

Agricultural Economy

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 exceeded U.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.”

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Ag Economy; Regulations; and, Immigration

Agricultural Economy

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.”

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Ag Economy; Farm Bill; Regulations; Immigration; and, Africa Issues

Agricultural Economy

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.”

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Ag Economy; Farm Bill; Biofuels; and, Immigration

Agricultural Economy

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.”

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Ag Economy; Regs; Farm Bill; Biofuels; and, Immigration

Agricultural Economy

Joseph Serna reported yesterday at the Los Angeles Times Online that, “More than half of California is now under the most severe level of drought for the first time since the federal government began issuing regular drought reports in the late 1990s, according to new data released Thursday.

“According to the U.S. Drought Monitor report, in July roughly 58% of California was considered to be experiencing an ‘exceptional’ drought — the harshest on a five-level scale.

“This is the first year that any part of California has seen that level of drought, let alone more than half of it, said Mark Svoboda, a climatologist with the National Drought Mitigation Center, which issued the report.”

See also this graphical sequence of the three year California drought from Bloomberg News, as well as this excellent series of graphs from The New York Times, “Mapping the Spread of Drought Across the U.S.

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Ag Economy; Farm Bill; Regulations; and, Immigration

Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “The prospect of a colossal 1bn-tonne global corn crop has sent the price of the grain below $4 per bushel for the first time in almost four years.

“Reports of near-perfect conditions in the US corn belt and favourable weather from Ukraine to China have pounded bulls in agricultural markets in recent weeks. Farmers’ incomes, tractor sales and land prices could be hit.

“Analysts expect the US Department of Agriculture to raise its forecast of how much corn the average US farmer will harvest per acre when it updates official estimates on Friday. The agency’s current estimate, of 165.3 bushels per acre, would already be a record.”

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Regulations; Biotech Hearing; Ag Econ; Farm Bill; and, Immigration

Regulatory Issues

Tim Devaney reported yesterday at The Hill Online that, “House Republicans clashed with Environmental Protection Agency (EPA) officials Wednesday over the agency’s controversial plan to regulate small bodies of water, which the GOP says could hurt American farmers.

“Republicans fear the EPA’s proposed Waters of the U.S. rule would expand the agency’s authority to include small rivers, streams and ponds around the country, which they say could hurt farmers whose lands are strategically surrounded by water.

“‘I own a farm, I have a few ponds, the last place I would put a farm is where there is no water,’ Rep. Thomas Massie (R-Ky.) said during a House Science Committee hearing.

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Ag Economy; Farm Bill (Nutrition Issues); Regulations; and, Immigration

Agricultural Economy

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.”

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Ag Economy; Immigration; Farm Bill; Regulations; and, Calif. Fuel Law

Agricultural Economy

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.”

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Farm Bill, CFTC Issues; Ag Economy; Biofuels; and, Immigration

Farm Bill, CFTC Issues

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.com transcript of the conversation with Ron Hays and Chairman Lucas is available here.

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Ag Economy; Biotech; Regulations; Policy Issues; and, Immigration

Agricultural Economy

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.”

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Ag Economy; Climate; CFTC; Data; Immigration; and, Policy Issues

Agricultural Economy

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.”

Cheri Zagurski reported yesterday at DTN (link requires subscription) that, “Corn and soybean conditions worsened slightly and winter wheat harvest more than doubled to 33% complete in the week ended June 22, according to USDA’s latest Crop Progress report.

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.”

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Ag Economy; Biofuels; Farm Bill; Regulations; and, Immigration

Agricultural Economy

A news release yesterday from Cargill indicated that, “Cargill, one of the largest pork producers in the U.S., is continuing its commitment of moving to group housing for its sows that produce hogs for pork. Company owned facilities will be 100 percent group housing by the end of calendar 2015. Contract hog farms that contain Cargill-owned sows will transition to 100 percent group housing by the end of calendar 2017. The hogs produced by Cargill-owned sows represent approximately 30 percent of the total hogs harvested annually at the company’s two pork processing facilities in Illinois and Iowa.”

The update noted that, “Based upon the timetable Cargill has set up for completing the transition to group housing for gestating sows, the company will be prepared to support ‘early adopter’ customers seeking pork products from alternative sow housing in the next few years.”

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Appropriations- Nutrition; Ag Economy; Farm Bill; Biofuels; Regs; and, Immigration

Appropriations- Nutrition Issues

The House Appropriations Committee will markup the FY15 Agriculture spending bill this morning, the bill is available here, while the Committee draft report can be found here.

In part, the draft report states that, “The Committee is concerned about the challenges and costs that local schools face in implementing the various regulations from the Healthy, Hunger-Free Kids Act of 2010. Schools from across the Nation have expressed concern with increased food costs and plate waste coupled with decreased participation in the National School Lunch Program (NSLP), all of which is resulting in at least half of all school food authorities to experience a decline in revenue. A February 27, 2014, GAO report found that student participation in the NSLP declined by 1.2 million students from school year 2010–11 through school year 2012–13. Additional meal requirements are scheduled to be implemented in the 2014–15 school year as well as the ‘Smart Snacks in School’ interim final rule.

“To address the concerns of local schools, the FY 2014 conference report directed the Secretary to establish a waiver process for schools incurring costs to provide more time to comply with some of these regulations. On March 14, 2014, the Secretary responded he did not have the statutory authority to grant such waivers. Therefore, the Committee includes bill language that provides schools with flexibility by allowing schools experiencing a financial loss for at least a six-month period to seek a waiver from compliance with the final regulations. The Committee directs USDA to implement this provision in a timely and streamlined manner. Schools receiving a waiver under this provision shall, at a minimum, implement the nutrition standards in effect prior to the final rule issued on January 26, 2012. The bill language does not provide for a change in reimbursement rates and only applies to the 2014–15 school year.”

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Farm Bill; Nutrition Issues; Ag Economy; Regs; and, Immigration

Farm Bill- Conservation

AP writer John Flesher reported yesterday that, “The U.S. Department of Agriculture is teaming with businesses, nonprofits and others on a five-year, $2.4 billion program that will fund locally designed soil and water conservation projects nationwide, Secretary Tom Vilsack said Tuesday.

“Authorized by the new farm law enacted earlier this year, the Regional Conservation Partnership Program is intended to involve the private sector more directly in planning and funding environmental protection initiatives tied to agriculture [see related USDA video].

“‘It’s a new approach to conservation that is really going to encourage people to think in very innovative and creative ways,’ Vilsack said.”

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Senate Ag Appropriations; Farm Bill; Ag Economy; ESA; Water Bill; CFTC; Immigration; and, Food Safety- Friday

Senate Ag Appropriations

David Rogers reported yesterday at Politico that, “Veterans, farm and food safety spending bills cleared the Senate Appropriations Committee Thursday even as Republicans charged Democrats with overstepping last December’s budget accord to fund domestic priorities.

“From white potatoes to Pacific salmon and even cigars, the nearly three-hour meeting had a bit of everything. And behind the scenes, first lady Michelle Obama pushed — with some success — for last-day compromises protecting nutrition standards for children.”

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