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.”
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.
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.”
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.”
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.”
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.”
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.”
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.”
“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.”
Marcia Zarley Taylor reported yesterday at DTN that, “Producers of bulk commodities like corn, soybeans and wheat have made crop insurance a staple of their risk management plans, insuring about 85% of eligible acres nationwide. Unfortunately, specialty crops like fresh sweet corn lag far behind at a mere 21% of planted acres and fresh green beans at 3%. Now the Risk Management Agency hopes attractive new features in a Whole-Farm Revenue Protection policy will aid risk management for diversified specialty crop and livestock producers [related graph].
“‘Crop insurance provides a tremendous safety net for core crops,’ Risk Management Agency Administrator Brandon Willis told DTN. ‘This is just another example if someone wants crop insurance, we have something for them.’
“The new program combines elements of the existing Adjusted Gross Revenue (AGR) and Adjusted Gross Revenue-Lite (AGR-Lite) programs targeting farms selling two to five commodities. It also expands eligibility to new counties and states starting in 2015. In 2014, only 802 of those policies had been sold nationwide, a participation rate Willis hopes to significantly improve.”
“The CFTC fares better than in the past in that the GOP allows for a modest $3 million increase for information technology investments. But the $218 million budget is still $62 million less than President Barack Obama’s request and continues a pattern that has frustrated the administration’s ability to implement Wall Street reforms called for under the Dodd-Frank law enacted in July 2010.
“In the case of nutrition programs, the House bill seeks to open the door for starchy, white potatoes to be added to the list of qualified vegetables under the WIC supplemental feeding program for pregnant women and their young children. The Agriculture Department would also be required to establish a waiver process for local school districts which have found it too costly to comply with tougher nutrition standards for school lunch and breakfast programs.”
A recent update at fibre2fashion.com reported that, “Members of the Federal Senate, the Upper House of the National Congress of Brazil, have sought strong measures against the protectionism of cotton producers, adopted by the US Government under its new Farm Act, according to the senators who participated in a joint public hearing on the issue at the Committees on Agriculture and Agrarian Reform and on External Relations and National Defense.
“The new Farm Act, with wider subsidies, assures revenues to the American cotton producer even if nothing is produced, the senators said, according to the information on Federal Senate website.
“At the meeting, Senator Ricardo Ferraco said, ‘The new American farm act is, in a rather disguised way, trying to violate a competitive international trade.’”
Steve Everly reported earlier this week at the Kansas City Star Online that, “It’s shaping up as another summer of discontent for Gary Millershaski.
“The Kansas wheat farmer is in his third year of drought and things are not looking good this time around for his 3,500 acres of wheat. The question is not if but how much his harvest is going to get slammed. By one estimate, his harvest will be about half of his best ones.”
Mr. Everly pointed out that, “His concerns were confirmed Friday when the federal government said it expects the Kansas winter wheat crop will be the worst since 1996.”
“Daniel O’Brien, extension agricultural economist for Kansas State University, calculates this year’s winter wheat crop could bring in $900 million less compared with good years. That figure doesn’t include any proceeds from crop insurance.”
Yesterday, the Food and Agriculture Organization of the United Nations (FAO) released its biannual report on global food markets.
Titled, Food Outlook, the report stated that, “Early prospects for 2014 cereal crops point to a decline from the previous year’s record level, but output is nevertheless expected to be the second largest ever. Based on conditions of crops already in the ground and planting intentions for those to be sown later this year and assuming normal weather for the remainder of the season, FAO’s first forecast puts world cereal production in 2014 at around 2 458 million tonnes (including rice in milled terms), some 2.4 percent down from 2013. Wheat and coarse grains would account for the reduction. Total cereal utilization in the new season (2014/15) is forecast to increase by 1.9 percent, which compares with a 4.0 percent rise in 2013/14 [related graph].”
The UN update noted that, “Global wheat production in 2014 is forecast at some 702 million tonnes, 1.9 percent below last year’s record, but still the second largest ever. Much of the reduction is anticipated to be concentrated in Canada, but smaller harvests are also expected in Australia, Morocco, the Syrian Arab Republic, the Russian Federation, Ukraine and the United States, which would more than offset larger outputs in Argentina, Brazil, India, Mexico and Pakistan [related graph].”