Producers of corn, soybeans, and wheat—the three largest crops produced in the United States—are the largest consumers of Federal crop insurance, although producers of other crops are a growing share of program enrollment. In 1997, corn, soybeans, and wheat crops accounted for 80 percent of all acres enrolled in the program; including cotton and sorghum raised the share to nearly 90 percent of all acres enrolled. Over the last 15 years, with new types of policies being offered and more crops added to the program, the share of enrolled acres attributed to these major crops fell as participation in the Federal crop insurance program continued to rise. Pasture, forage and range land have accounted for the bulk of recent gains in enrolled acres, expanding from zero in 1997 to 48 million acres in 2012. By 2012, corn, soybeans, and wheat made up roughly 68 percent of all acres enrolled, with cotton and sorghum accounting for an additional 7 percent. The share of acres enrolled in crop insurance varies by crop and region, but these differences decreased between 1990 and 2012 as coverage rates increased. For more data and analysis, see The Effects of Premium Subsidies on Demand for Crop Insurance, released July 2014.
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.
From PostTV (The Washington Post)- “New York City’s Schatzie the Butcher says meat prices are ‘really insane,’ as drought has driven up the cost of beef and veal while a virus in piglets is causing pork prices to soar. (Reuters)”
DTN writer Todd Neeley reported yesterday that, “If nothing else, EPA Administrator Gina McCarthy hopes a trip to Missouri this week to talk to farmers and agribusiness representatives will help to dispel what she said are ‘myths’ about the agency’s proposed Clean Water Act rule.
“During a conference call with reporters Tuesday ahead of a farm tour in the Columbia, Mo., area Wednesday and a speech before the Agricultural Business Council of Kansas City Thursday, McCarthy wasted little time tackling claims made by agriculture interest groups and others about the proposed rule.
“‘Unfortunately there is a growing list of misunderstandings going around and we’re trying to clarify the issues,’ she said. ‘Hopefully it is an opportunity to set the record straight. This is not about restricting farmers, but protecting waters downstream. While there are legitimate concerns, we’re hearing some concerns that, to put frankly, are ludicrous.’”
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.”