EPA Proposes CWA Discharge Permit for Pesticide Spraying

A new general Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit for spraying pesticide on or near waters, once finalized, will replace the current five year-permit when it expires Oct. 31. The permit was proposed Jan. 26 by the Environmental Protection Agency, according to a notice published in the Federal Register.

The permit drafted by the EPA comes with the same conditions and requirements as the 2011 NPDES it will succeed. The permit requirement is effective in Idaho, Massachusetts, New Hampshire, New Mexico, Washington, D.C., U.S. territories except the Virgin Islands, all Indian lands except Maine, and at federal facilities in Delaware, Vermont, Colorado and Washington.

In the rest of the United States, states are free to adopt the general pesticide permit in final form from the EPA, or change it to meet their own needs. The EPA permit will apply to over 365,000 pesticide users across the country, and are intended to protect aquatic life which can be harmed by residual biological and chemical pesticides that make their way into waterways.

The EPA will seek comments on costs incurred by permit holders, but expects the burden to be minimal through March 11.

Legislation proposed in the House and Senate to ban this particular NPDES permit has the support of Republicans and some Democrats. In the Senate, the Senate Environment and Public Works Committee approved the Sensible Environmental Protection Act of 2015, which is awaiting full Senate consideration. A similar measure in the House, the Reducing Regulatory Burdens Act has been approved by the Agriculture Committee but is awaiting consideration by the Transportation and Infrastructure Committee which oversees EPA’s Clean Water Act programs.

US Ag Output Growth Driven By Productivity Gains

Rising U.S. agricultural total factor productivity (TFP) was seen between 1948 and 2013, as total agricultural output rose, while total agricultural inputs remained relatively flat, the Economic Research Service (ERS) reported.

TFP measures the difference between the aggregate total output of crop and livestock commodities relative to the total use of land, capital and material inputs. Growing TFP is indicative of efficiency gains due to new technology and improved management of farm resources.

U.S. farm sector output grew 170% between 1948 and 2013, while total farm inputs held steady during the same period, the gains resulted in a concurrent increase in TFP. Though inputs in the aggregate were mostly unchanged, but the composition of inputs has changed dramatically.

Labor use declined by 78% and land use dropped by 26% between 1948 and 2013, while the use of intermediate goods such as energy, chemicals and feed increased over the same period. Innovations in animal and crop genetics, chemicals, equipment and farm resource organization have been the primary driver of long-term agricultural productivity gains.

Beef Producers Continue to Support the Checkoff

The majority of beef producers say they approve of the Beef Checkoff Program. A recent survey found three out of four producers, or 76 percent, support the checkoff. The random survey of 1,200 beef and dairy producers nationwide was conducted by an independent firm in late December 2015 and early January 2016. The survey found an overwhelming majority of beef and dairy producers continue to say their beef checkoff has value for them in many ways. Results of the January 2016 producer attitude study shows support at the same level as a year ago, despite much more pessimism about what lies ahead for the live cattle market, according to the beef checkoff. A summary of the survey is available at My Beef Checkoff dot com (www.mybeefcheckoff.com).

Half of Nation’s Dairy Farmers Sign up for MPP

USDA says slightly more than half of the nation’s dairy farms have signed up for a second year in the Margin Protection Program, the USDA safety net for milk producers. Farm Service Agency data shows nearly 23,000 out of approximately 45,000 dairy farms nationwide have qualified for coverage. The program allows farmers to recoup money when the margin, or the difference between the price of milk and feed costs, falls below a coverage level selected by the farmer. Agri-Pulse reports that as with last year's signup, California farmers joined at a relatively high rate. Seventy-six percent of the state's more than1,400 licensed dairy operations signed up. The majority of farmers signed up at the $4 coverage level, which requires a flat $100 fee. Only about 23 percent of dairy farmers who signed up opted for coverage above the basic level.

Court Rules EPA Cannot Vacate Enlist Duo Label

A circuit court this week denied the Environmental Protection Agency’s motion to vacate the registration for Dow AgroScience’s Enlist Duo herbicide. The EPA filed a petition last fall to vacate the label, which contains both 2-4-D and glyphosate. The herbicide was developed to help farmers combat weed resistance. EPA claimed it was concerned that the combination of 2-4-D and glyphosate may be harmful to non-target plants. As a result, farmers can still use the product and ag retailers can still sell Enlist Duo for the upcoming growing season, according to AGProfessional. The Enlist Duo was never removed from the market following the EPA motion. Enlist Duo still needs import approval from China. However, the product is registered in 15 Midwestern states.

Taking a Vote on TPP is Critical to Its Ultimate Success

By Dalton Henry, USW Director of Policy 

Representatives from the 12 Trans-Pacific Partnership (TPP) negotiating countries are set to sign the agreement in New Zealand next week. Though signing the pact is primarily ceremonial, it marks another step forward in the long process of putting the world’s largest free trade agreement into action.   

In the months since the final agreement announcement, the TPP collected many new endorsements, particularly among business groups. The U.S. Chamber of Commerce announced its endorsement Jan. 6, while encouraging the Obama Administration to work with Congress and industry members on unresolved concerns. 

After the Feb. 4 signing attention will largely shift to the U.S. Congress, where leaders have so far hesitated to commit to any timing for a potential vote in part because much work is needed before a vote can even be considered. The International Trade Commission (ITC), which held a hearing on the agricultural portions of the agreement earlier this month, is accepting formal testimony on the merits of the agreement until Feb. 15. Their final report due May 18 will incorporate those comments, required by this past summer’s Trade Promotion Authority (TPA) bill. 

With that ITC report as an official “scorecard” of the TPP, the administration will work with Congressional leaders to find time for a vote. That is a critical point because according to the regulations set down by the TPA, after introducing the implementing legislation the appropriate committees must complete their reviews and hold a final up-or-down vote within 90 days. 

Many congressional watchers speculate that this final vote will not take place until after the U.S. elections in November. Some legislators fear trade agreements are too political to address prior to the election, while others may hope a new administration will place different priorities on the agreement’s portions that are more contentious. Unfortunately, any delays will mean U.S. wheat producers and their customers overseas must continue managing through inconsistencies in sanitary and phytosanitary standards and paying higher tariffs until the agreement is implemented. 

Conceived as much more than just another free trade agreement, TPP was to be the platform for expanded trade in an entire region. In fact, within a few weeks after negotiators struck an agreement, as many as 12 additional countries contacted U.S. Trade Representative officials to test the membership water. However, no other country may apply for membership until after the U.S. Congress and the governments of the 11 other countries ratify the agreement. For this positive momentum to continue and ultimately help reach that goal of lifting economic opportunity in the region, moving as quickly as possible toward the Congressional vote on TPP is critical. 

Cost Of Lamb Processing Plant Disclosed

A cooperative that agreed to acquire a JBS USA lamb processing plant in Greeley, Colo., last fall apparently paid $8.5 million for the facility, according to public records accessed by BizWest.com.

Mountain States Rosen Lamb Cooperative announced plans in November to buy the facility it had been leasing along with preserving more than 120 jobs at the plant. The deal would allow the multi-state, producer-owned cooperative in Douglas, Wyo., control all production stages including raising, harvesting, processing, packaging, marketing and distribution, Mountain States officials said when the transaction was announced. 

Mountain States officials said the 17.4-acre property and its five buildings eventually will employ a total of 250 workers.

Cattle Industry Kicks off Annual Meeting and NCBA Trade Show in San Diego

SAN DIEGO, CALIF. (January 27, 2016) - More than 6,000 cattlemen and women from across the country are gathered in San Diego, Calif., this week for the 2016 Cattle Industry Convention and NCBA Trade Show. The convention, which will run through Jan. 29, is the largest annual gathering of the beef industry. “The convention and trade show is a great opportunity for cattle industry members to come together to network, create policy for the industry, and to have some fun,” said National Cattlemen’s Beef AssociationPresident Philip Ellis. “We will reflect on the many successes of the past year and discuss what lies ahead for 2016. If you’re in the cattle business, then you need to be in San Diego.” Cattlemen’s College kicked off yesterday, featuring sessions focused on profit-building, policy briefings and education. Hailed as the premier educational resource for cattlemen and women, Cattlemen’s College had an impressive lineup for its 23rd year. The convention officially kicked off this afternoon with the Opening General Session featuring Robert Irvine, celebrity chef who put on a theatrical demonstration. On Friday, Navy SEAL Rob O’Neill will share what he has learned during his more than 400 combat missions across four theaters of war. Through his moving and emotional stories drawn from lessons learned during some of the country’s most headline-stealing conflicts, O’Neill will show how the military’s best-of-the-best approach to strategic planning succeeds when mission failure is not an option. In addition to the excellent keynote speakers, Cattlemen’s College, a record-breaking Trade Show and industry trend discussions, convention-goers will have the opportunity to attend committee meetings and take part in the grassroots policy development. “NCBA is grounded in the grassroots policy process,” said Ellis. “It’s important for cattlemen and women to be involved and stay engaged. This week, we have the opportunity to set policy which will direct our policy initiatives in the following year.” With so many events taking place during the convention all attendees are encouraged to download the 2016 Cattle Industry Convention app to their smart phones to see the schedule of events, locations, maps and receive alerts before, during and after the event. Visit www.beefusa.org for more information about the convention, and follow NCBA on Facebook and Twitter.

Nevada Ranch Honored for Commitment to Environmental Stewardship

SAN DIEGO, CALIF. (January 27, 2016) – Maggie Creek Ranch and the Searle family of Elko, Nev. were named national winners of the 2015 Environmental Stewardship Award. The award recognizes ranchers for their commitment to outstanding land management practices which create healthy, balanced ecosystems.

“Maggie Creek Ranch exemplifies environmental stewardship in the beef community, illustrating how ranching families work every day with the land, natural resources and cattle to better the environment,” said Philip Ellis, President of the National Cattlemen’s Beef Association. “When cattlemen and women, like the Searle family, dedicate themselves to conservation efforts the entire industry benefits.”

Raising cattle in sage brush country since 1975, Maggie Creek Ranch operates on two-thirds owned land and one-third permitted federal land. Ranch manager Jon Griggs has worked for many years to build trust with various partners and collaborate on conservation projects. One of those key partners is the Bureau of Land Management.

“We have had a common vision of the watershed and what the land should look like,” said Carol Evans, Fisheries Biologist, BLM. “Never mind the land boundaries, we just get to work.”

The ranch works to improve habitat for wildlife, including threatened and endangered species. One project of particular success was the installation of irrigation diversions and a fish passage to protect the Lahontan cutthroat trout. Protective structures in the stream ensure the fish can move up and down the creek, spawn and access food sources. A healthy habitat at Maggie Creek Ranch is an ecosystem to support fish, wildlife and cattle in a sustainable manner which is part of a family tradition that started nearly 40 years ago with Sally Searle and her late husband, Bill.

“This award is such a personal thing for us with my grandfather being gone,” said Bekah Klarr, granddaughter of the Searles. “He really lives on through environmental stewardship and that heritage that he passed to us, which means a lot.”

Celebrating its 25th anniversary, the Environmental Stewardship Award Program was created to recognize beef producers who make environmental stewardship a priority on their farms and ranches while improving production and profitability.  The award is presented by the National Cattlemen’s Foundation and NCBA, and is sponsored by Dow AgroSciences, NRCS, and the U.S. Fish and Wildlife Service.

“The Searle family and each of our 2015 regional winners are examples of the best in American agriculture,” said Dave Owens, U.S. Range and Pasture Marketing manager for Dow AgroSciences. “These winners make a living from the land and leave it better than when they started. We are proud to honor these outstanding environmental stewards.”

BQA Free Certification Period Announced

The 2016 Beef Quality Assurance program free-certification period is open now until April 15th. The registration period announced at the 2016 Annual Cattle Industry Convention allows producers free-certification, funded by sponsors and the beef checkoff. The BQA program, according to the beef checkoff, allows farmers to tell their story to consumers regarding best practices to provide high-quality beef. The BQA training is customized to fit the specific needs of each segment of the cattle industry – cow-calf, stocker, feedyard and dairy operations. The beef checkoff says obtaining certification can be a useful tool in the changing landscape where consumers want to be assured they are receiving a product raised in ways that align with BQA. Find out more at BQA dot org (www.bqa.org).

El Niño Could Quickly Transition to La Niña This Year

The current El Niño weather pattern could be shifting quickly to the La Niña weather pattern later this year. Senior agriculture meteorologist for MDA Weather Services Kyle Tapley told AgWeb this week that weather models “now show full-fledged La Niña conditions by the summer.” Recent weather models show El Niño heading towards a “rapid decay” this spring with the La Niña weather event quickly following. The National Oceanic and Atmospheric Administration, or NOAA, says the chances of La Niña increase to 40 percent between August and October this year. La Niña typically brings hotter and dryer weather to North America during the summer months. That would mean potential crop development problems for corn, soybeans and wheat in the United States and dryer conditions for Argentina and Brazil’s corn and soybean crops.

Agriculture Absent from Cuba Regulation Release

While the Obama Administration announced a loosening of regulations designed to expand travel and commerce with Cuba, agriculture will not benefit from the announcement. The Administration lifted restrictions on payment and financing terms for exports, but that does not include agriculture and food exports to Cuba. That is because financing of food and agriculture products is prohibited by the Trade Sanctions Reform and Export Enhancement Act of 2000. Some agricultural exports are allowed under exceptions from the embargo, however they did fall 37 percent in 2015, largely because of falling commodity prices.

DuPont CEO See’s Little Concern in Dow Merger

The pending merger between DuPont and Dow Chemical provides “very little” concern to regulators, according to DuPont CEO Edward Breen. The DuPont CEO told Reuters this week the merger, expected to close later this year, was unlikely to have significant asset sales. The two companies announced the planned merger late last year that would form a giant in the chemical and seed production industry. The merged company would have a market value of an estimated $95 billion at current share prices. Once complete, the new company would split into three businesses focused in agriculture, materials and specialty products. However, some analyst say regulators are likely to be concerned with the combination of the two companies’ agricultural businesses. Meanwhile, DuPont on Tuesday announced the company was considering cutting cost by $730 million this year ahead of the merger with Dow.

2016 Dairy Margin Protection Program Announced

One hundred sixty three billion pounds of milk production history has been signed up for the 2016 Dairy Margin Protection Program,   the United States Department of Agriculture reported this afternoon.

This is a slight, 1.8% decline from last year, when 166 billion lb. of milk history was signed up. Nevertheless, the amount signed up will likely exceed 75% of U.S. milk production this year.

USDA also reported 23,328 farms signed up for the 2016 program, or 51% of the nation’s licensed dairy farmers. Last year, 24,748 farmers enrolled.

Wisconsin had the largest number of farms signing up for 2016 coverage, with 5,797 enrolling.  Other leading states included Minnesota, 2,586; New York, 2,237; Pennsylvania, 1,955; California, 1,137, and Michigan, 1,037.

The vast majority of farms, 18,013 or 77%, signed up for the minimum level of $4 of margin protection. The next popular level of coverage was $6.50, with 9% of farmers signing up. Eight percent of those farms signing up opted for $6 coverage.

U.S. agricultural trade going in opposite directions

By Luis Ribera, Associate Professor and Extension Economist, Texas A&M AgriLife Extension Service, Department of Agricultural Economics and Larry D. Sanders, Professor, Oklahoma State University

After reaching a record peak in 2014, agricultural exports dropped slightly in 2015, and seem to be stuck in neutral for 2016. On the other hand, agricultural imports are expected to reach an all-time high.

The USDA forecasts exports to be slightly lower than 2015, reaching $138.5 billion in 2016. Agricultural imports will be up from $115.5 billion in 2015 (a record) to a new record of $122.5 billion in 2016.

The decline in agricultural exports is related to lower expected soybean and soybean meal prices and also reduced export volumes. Cotton exports will also experience a decline due to a smaller U.S. crop. But, grain and feed exports are forecasted to increase, largely due to higher expected wheat shipments. 

Moreover, exports of livestock, poultry, and dairy products are up, as higher export volumes for a number of livestock products more than offset a decline in price. Horticultural exports are expected to increase, with higher export values for fruits, vegetables and tree nuts.

The main commodities contributing to record agricultural imports are horticultural products, sugar, and tropical products. Nearly two-thirds of agricultural imports consists of the commodities above, about a 175 percent increase from 2000. This trend will likely continue as consumption away from home continues to increase.

ECONOMIC CHALLENGES

The U.S. economy is expecting slow but steady growth. However a strong dollar and economic challenges abroad weigh on trade.

China is slowing considerably, with the lowest growth rates since 1990. Emerging countries are experiencing low growth as well, while European economies are mixed. China and other emerging countries such as Brazil and Argentina are devaluing their currencies, making it harder for U.S. exports to be competitive.

One key factor that can affect the expected steady growth in the U.S. Economy is low oil prices. As the largest oil producer, low oil prices will have mixed outcomes in the U.S. economy, especially with oil and gas-producing states experiencing sluggishness.

Trade Promotion Authority (fast track) was finally given to President Obama, and the administration continues to move forward with regional trade agreements. Negotiations are complete for the TransPacific Partnership (TPP), while negotiations continue on the TransAtlantic Trade and Investment Partnership (TTIP).

The TPP was approved by the administration, but is facing stiff opposition from both parties in Congress, while GMOs and animal hormones are issues on which TTIP members have not yet found common ground.

Officially Congress has 90 legislative days from early November to ratify TPP. However, GOP leadership may attempt to stall the vote until summer, or even post-November elections.

Global Beef Production Increasingly Competitive And Complex

OMAHA (DTN) -- While the U.S. beef industry remains the global standard for quality and supply stability, will its reputation for producing a safe and nutritious product be enough to compete with global markets?

The new report on global beef production, recently released by Rabobank, stresses that global beef production is increasingly competitive and complex. Beef producers and processors across the globe are keeping a close watch to see whether consumption will be keeping up with growth in production. Another challenge for the beef industry is competition from the pork and poultry industries.

Rabobank's report points out that the U.S. beef industry faces an increasingly competitive global beef market and suggests the U.S. must engage in discussions to develop a competitive strategy. Such discussions should include three steps that Rabobank predicts will create trade opportunities and help the U.S. secure a future competitive strategy:

1. Increasing exports and embracing trade opportunities by encouraging the successful conclusion of the Trans-Pacific Partnership, which will help the U.S. become more competition in supplying the world's growing protein demand.

2. Adapting to changing markets and changing production to meet evolving consumer preferences both domestically and internationally, such as requests for beef produced under conventional production practices, beef with specific attributes, beef produced without implants and with ractopamine, a feed additive used to promote growth.

3. Instituting a voluntary, industry-driven traceability program that would build into an industry-wide program. Rabobank said such a program would boost the trust of customers and shorten how long animals would need to be isolated in the event of an animal health issue.

U.S. beef production will likely increase between 3% and 4% in 2016, with a larger rate increase in 2017, Rabobank stated. Competition for U.S. domestic retail market shares will be intense in coming years due to increases in pork and broiler production in 2015. Rabobank also projected that a decreased quantity of beef coming into the U.S. from Australia and New Zealand will likely be offset by increased shipments from South America.

GLOBAL RESPONSE TO SIGNS OF ESSENTIAL PRODUCTION INCREASES

Many major beef-producing export countries have experienced challenging weather conditions in recent years that resulted in heavy liquidation of cattle. The global market has responded to these strong price signals by increasing production. Such signals, particularly strong in the U.S. market, gave cattle producers worldwide an inflated signal to increase production. An example is expectations of an increase in Chinese beef demand seemed to be an opportunity for such expansion, the report said.

Rabobank predicts that in the next three years, global beef production will likely experience a great deal of growth in both North and South America in response to such price signals, as well as new trade agreements, low feed costs and increased beef production and domestic policy reforms in some markets. However, the report questions whether the increased production will cause a supply glut, especially in countries like Australia and New Zealand where production is expected to decrease in the next few years.

RABOBANK BEEF PRODUCTION PREDICTIONS

Rabobank listed some predictions for some of the major beef-producing countries:

United States: Rabobank expects continuation of the herd expansion in the past two years to continue to 2020, but warns that heifer retention will likely slow down from levels of the past two years. Competition for retail protein has been challenging, especially as recovery from avian influenza and PEDv has caused growth in pork and broiler industries. However, feed grain supplies expanded cattle feeders to produce all-time record carcass weights. The report also said that the strength of the U.S. dollar could limit export sales in the near future.

Mexico: Mexico has had impressive growth in cattle feeding and fed beef production, and Rabobank predicts that growth to continue. While drought conditions in 2011 and 2012 led to aggressive herd liquidation and exports, Mexico has been able to sustain annual exports of cattle to the U.S. while retaining enough cattle for domestic feeding and herd rebuilding.

Canada: Canada experienced a long decline in its domestic herd due to the BSE event in 1993 and effects from county-of-origin labeling. Rabobank said the cow herd liquidation appears to have stopped in the last six months of 2015 and predicts that Canada may finally be in a position to engage in serious herd rebuilding.

Brazil: The report predicts that Brazil will have an increase of 1 million tons of beef in world export markets by 2023, which will give it a 25% share in the international beef market. Still, its structure and beef value chain is less developed that other major beef exporters, which limits it production potential and increases costs and risks along the chain.

Argentina: After decreased production and exports in recent years, Argentina's new president, Mauricio Macri, is touting a pro-business agenda that may boost the country's beef industry. However, Rabobank predicts it will be two to three years before those changes will have any effect on global markets. The report also predicts that the removal of Argentina's export tax may affect the country's domestic beef prices in 2016 and reduce local consumption.

Uruguay: Rabobank expects Uruguay's total cattle numbers to decline slightly in 2016 because of excess cow-calf production, but will continue to function as a sold beef producer, with an expected increase in grain-fed cattle numbers.

Australia and New Zealand: Both countries face significant reductions in beef production, due to severe herd liquidation because of drought in 2013. That reduction is expected to continue into 2016 before settling at around 25.7 million head in 2017, the lowest level since 1994.

India: India does not produce prime beef, but rather "carabeef" from its buffalo dairy production. Rabobank states there will be a sizeable market for the product as incomes rise in emerging economies and consumers want more protein in their diets.

Drone Sales On Upward Trajectory

While most farm equipment sales languish in a line-chart valley, sales of unmanned aerial vehicles (drones) are on an upward trajectory.

"Farmers have gobbled up UAVs left and right," Robert Blair, an Idaho farmer who has been a pioneer in UAV applications for agriculture, recently told DTN/The Progressive Farmer. "2016 will be the year of the UAV."

A multitude of manufacturers have launched a variety of aircraft in the past few years -- from hover crafts not much more sophisticated than toys to $50,000 fixed-wing air craft that can buzz along at 50 miles per hour and take near-infrared photos.

New product introductions will continue, but the weeding out process for manufacturers has begun. Some manufacturers have already closed their hangar doors. "It's like the early days of the automobile industry when you had lots of people getting into it," Blair said. "Now we've reached a point where there will be some attrition."

He expects to see consolidation among manufacturers this year and in the near future. Weak manufacturers will stumble out of the marketplace. Strong manufacturers will survive, and their products will improve as they consume technologies from companies that have crashed and burned.

The Federal Aviation Administration will play a key part in how much UAVs advance in agriculture. The agency has struggled to formulate regulations for an industry that has expanded exponentially over the last years. Indications are that the FAA finally will post rules for commercial UAV operators this summer.

In December, the agency created a stir when it ruled that hobbyist UAV owners must register their vehicles. But it's clear to observers that commercial users can expect more stringent rules. Some in the industry forecast that commercial UAV operators -- including farmers -- would have to undergo training and be licensed.

The first set of regulations will be for those who use UAVs only for taking photos and videos, insiders speculate. Later regulations will cover other UAV applications -- spraying crops, for instance. These are likely to be tight and require yet more training.

Some companies and individuals already have FAA Section 333 exemptions, which allow them to fly UAVs for some commercial purposes. But along with exemptions comes bookwork. Anyone with an exemption has to file a Notice to Airmen (NOTAM) with the FAA at least 72 hours before a flight. The NOTAM must specify when, where and why the UAV will fly. If for some reason the flight does not happen when planned -- say the weather doesn't cooperate -- a new NOTAM is required.

Blair questioned whether many farmers really would be able to justify the personal time and effort necessary to get the most benefit from UAV technology. He gave three reasons farmers probably will hire someone to implement drone technology for them:

1. Do you want another job that takes time away from other farming activities?

2. Crunching data takes experience.

3. Do you want to do all the paperwork the FAA will require?

"They [farmers] would almost need to be a GIS specialist," Blair said.

Then there is the expense. For a commercially viable UAV operation, Blair said, farmers should expect to pay $20,000 or more for a vehicle, sensors and software. He expects fixed-wing configurations will be the choice of professionals because they can carry a bigger payload and can stay aloft longer. "It's all about covering more acres quickly," he said.

Blair has an interest in farmers hiring others to do UAV work for them. He heads the ag division for the UAV technology company Measure, which provides UAV services to a variety of industries. It offers introductory and turnkey operations to customers who want to fly UAVs, collect data and process that data into useable information.

As the UAV industry booms, Measure might be the tip of a new service sector. Look for more such companies to emerge in 2016.

ERS: US Ag Trade Surplus Falling

A narrowing of the U.S. agricultural trade surplus was seen last year and is forecast to continue this year, as US agricultural imports continue to grow and U.S. agricultural exports continue to decline, according to the Economic Research Service (ERS).

U.S. ag imports and exports have grown each year from Fiscal 2009 through Fiscal 2014, propelling the U.S. ag trade surplus to a record $43.1 billion for Fiscal 2014. The value of ag exports then declined by 8.3% in Fiscal 2015, while U.S. ag imports continued to grow by 4.5%, reducing the trade surplus to $25.7 billion.

U.S. ag exports are forecast to decline again in 2016 and ag imports are expected to continue growing, leading to an expected trade surplus of under $10 billion for the first time since 2006. Lower commodity prices and a stronger dollar are the primary driver in the decline in the value of US ag exports, while the strong dollar is also a driver in the increase in US ag imports thanks to increased American purchasing power.

ARS Organizing National Bee Genebank

The Agriculture Resource Service is organizing a national bee genebank as part of the agency's response to ongoing problems facing the country's beekeepers. The genebank will be located in Fort Collins, Colorado and ARS says the genebank will help preserve the genetic diversity of honey bees, especially for traits such as resistance to pests or diseases and pollination efficiency. USDA says average losses of managed honey bee colonies have increased to more than 30 percent per year. The increased losses are threatening the business sustainability of commercial beekeepers. Included in the new research,ARS researchers are developing better long-term storage techniques for honey bees. Another component needed to create the new genebank is a species committee, which will decide which species and subspecies to collect and preserve.

Canada Unsure on Ratifying TPP

The 12 member nations included in the Trans-Pacific Partnership will sign the trade deal next week, in what Canadian officials call a “technical step,” according to Reuters. While Canada will sign the trade pact, Canada’s Trade Minister Chrystia Freeland said this week the country’s government has not decided yet whether or not to formally ratify the agreement. The problem for Canada is that the former government negotiated the trade deal, representing a separate political party than what’s in office now. Trade Minister Freeland did say in an open letter that Canada needed to stay at the table, but added “signing does not equal ratifying.” Once all 12 nations have signed, each will then have two years to ratify the deal. Reuters reported last month that Canada was most likely to sign the trade deal, but would hold off on ratification until the country could judge possible resistance in the U.S. Congress that could stop the trade deal entirely.

Last Month’s COOL Repeal Means More Live Hog Imports

USDA’s January Livestock, Dairy and Poultry Outlook suggests a slow ramp-up of live hog imports into the United States. Meatingplace reports that’s because the U.S. repealed its mandatory Country-of-Origin Labeling law in December. Since Congress repealed COOL, U.S. pork processors do not have to differentiate between U.S. and Canadian hogs. The recent report shows imports of Canadian live hogs are expected to increase nine percent this year, to 6.2 million head. Just two years before COOL legislation was enacted, live hog imports peaked at near 10 million head in 2007. However, a surge of imports is not expected since Canadian hog inventories have declined and the country is dealing with increased packer demand.

Farm Equipment Dealers Turning More to Leasing

While equipment sales are down, DTN reports some farm machinery dealers are turning to leasing equipment to fill the sales gap. Dealership inventories of new equipment remains high with 37 percent of dealers reporting used inventory too high as well in November, according to Farm Equipment Magazine. Prices for used tractors in the same month dropped eight percent. Creighton University’s Ernie Goss, who surveys the Midwest economy, notes that the current year-end machinery sales in his recent farm equipment sales survey landed at seven on a 100 point scale, down from last year’s 29.5. While his survey does not include leasing, he told DTN “I can't say it will bankrupt them, but the direction is definitely going the wrong way.” However, since his survey does not include leasing, it may be undercounting transactions. A new estimate suggests that farm machinery leases now account for 30 to 40 percent of business at a growing number of dealerships.

Chinese Corn Imports May Drop 50 Percent in 2016

Commodity traders say Chinese corn and corn substitute imports may drop 50 percent this year, following a record volume of imports in 2015. Pro Farmer’s First Thing Today reported the drop was expected for multiple reasons. For one, China's year-long investigation into U.S. dried distillers grains imports is expected to drastically curb the country's purchases. Second, China plans to reform its state corn purchase pricing so that the market determines domestic corn prices. This is aimed at curbing both its imports and large state reserves. Other analysts point out that government control over import permits could cut imports, noting that China has been slow to issue import permits for other commodities since September.

Ahead: Several years of tighter credit?

By Danny Klinefelter, Professor and Extension Economist, Texas A&M AgriLife Extension Service, Department of Agricultural Economics and Rodney Jones, Associate Professor, Oklahoma State University

Credit problems are increasing due to tighter margins, weather problems in some regions of the country, reductions in the level of farm program payments, and a softening of the land market in many areas. In addition, beef and dairy, which have been bright spots, are also seeing income declines.

U.S. net farm income is expected to be $58.3 billion in 2015, down from $91.1 in 2014 and $123.7 billion in 2013. With increases in operating debt and asset value declines, the debt-to-income ratio for the farm sector is approaching 6-to-1, and anything over 4-to-1 tends to be a leading indicator of credit problems.

Decreases in land values (more than 80 percent of average farm assets), combined with lower revenues and an increase in the amount of operating debt that is carried over, will drive the debt-to-income ratio higher.

The overall solvency position of U.S. farms is strong (low overall debt-to-equity, etc.), and interest rates remain at low levels, but the current farm financial situation is driven by liquidity. An uptick in the number of farm bankruptcies is causing some nervousness in the lending community.

INFLUENCES ON LENDERS

From a lender perspective, monitoring deteriorating liquidity (and profitability) issues can be difficult because too many farmers and lenders are still using cash basis tax accounting measures to assess and monitor business performance. It is widely known that cash accounting measures can lag true management accrual accounting by two years to three years going into a downturn.

Cash measures can look fine for a time, as managers reduce the level of inventory carryover and reduce the level of pre-paids and equipment purchases, while the business is actually losing money.

Overall farm lending risk is also impacted by the fact that many farms have debt levels that exceed FSA’s credit guarantee limit of $1,399,999, eliminating that risk mitigation tool for many situations. Finally, there is the multiplier effect on the farm supply sector, which spreads the negative impact of the downturn in the farm economy to the rest of the lender’s loan portfolios.

In addition, both commercial banks and the Farm Credit system are facing the implementation of Basel III rules. Regulators may require lenders not only to have more capital in general, but for it to be risk based, depending upon the quality of their loan portfolio. An increase in poor quality loans will give lenders less flexibility in dealing with troubled borrowers.

STRICTER STANDARDS

New regulations continue to flow out of the Dodd-Frank Act. Bank and Farm Credit examiners are also becoming aggressively proactive and are requiring stricter standards on underwriting, credit analysis, risk rating, and justifying why a troubled borrower’s loan is being extended or modified. The Office of the Comptroller of the Currency for banks and Farm Credit Administration for Farm Credit are expanding this tougher set of examination policies nationwide. All of these factors make the lending process both slower and more costly.

With commodity prices, land, and used equipment prices not showing any signs of a near term turn around, lenders will have to be forward-looking, and they will have to become more conservative in deciding how long they can continue financing troubled borrowers. Individual lenders may need to shock-test portfolios at a more extreme level to reflect both potential declines in income levels and asset values.

Increasingly, lenders will likely be asking for interim budget performance reports, i.e., actual versus budgeted performance throughout the year, with an explanation of any plans for corrective action or modifications to the budget for the remainder of the year, if negative variances are occurring. Problem loans will also need to provide evidence of compliance with the terms of loan agreements.

More farms are being required to provide their lender with a more formalized business and succession plan. With the increasing complexity and rate of change in agriculture, the division of responsibilities and strength of the management team becomes more critical, and lenders may require information on them, their tenure, and their expertise.

RISK MANAGEMENT PLAN

Evidence of and understanding of an integrated risk management plan and a description of counter parties on whom the operation is dependent will also need to be provided. Finally, farmers will increasingly be required to provide evidence of compliance with sustainability and environmental requirements.

Given all these factors, we may be looking at several years of tighter credit.

If a lending institution fails or gets in trouble and is acquired by another lender, farmers who finance with the former lender are almost always subject to higher credit standards — not because the new lender is tougher, but because the former lender was too lax.

In a case where a farmer’s loans were too large to be handled by the originating lender, a pull-out by one of the participating lender(s) can be even more devastating, because there will be fewer, if any, lenders willing to take their place, and it could become a house of cards if the lender can’t find a replacement participating lender.

Danny Klinefelter is a professor and Extension economist at Texas A&M University. Rodney Jones is an associate professor and Extension economist at Oklahoma State University.

WATERS OF THE U.S. — The unending saga of one of EPA’s most controversial rules

By Shannon L. Ferrell, Associate Professor, Oklahoma State University and Tiffany Dowell Lashmet, Assistant Professor and Extension Specialist, Texas A&M AgriLife Extension Service Department of Agricultural Economics

In many cases, state laws likely have the most impact on which agricultural practices may trigger water pollution regulations; still, a number of federal programs hinge on compliance with federal environmental law.

Last year’s agricultural law outlook article foresaw the final version of a “Waters of the United States (WOTUS) Rule” being released by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) in early- to mid-2015 to address a significant gap in those federal laws. Although a final rule was indeed released, the fate of that rule is far from final.

The federal Clean Water Act (CWA) prohibits the “discharge” of any “pollutant” to a water of the United States without a permit. However, the CWA does not define “waters of the United States.” The WOTUS rule was meant to provide an updated definition of the term and to add more clarity to what was and was not considered a water of the United States.

Before it was ever issued, though, the WOTUS rule was the subject of immense controversy. Numerous farm groups led campaigns against the proposed rule, including American Farm Bureau Federation’s “Ditch the Rule” campaign.

The EPA responded with the rather unusual step of launching its own social media campaign in support of the rule, entitled “Ditch the Myth,” and changed the name of the rule to “the Clean Water Rule.” The controversy generated significant interest in the rule, with over 1.1 million official written comments submitted on the rule.

Despite continuing pressure from Congress to reconsider the rule entirely, the EPA and Corps of Engineers released their final rule in the Federal Register June 29, 2015, with an effective date of August 28, 2015.

CHALLENGED IN COURT

The rule was immediately contested in a number of court cases. On August 27, 2015 (a day before implementation), the North Dakota federal district court issued an injunction blocking implementation of the rule, though the EPA took the position that the case applied only to the 13 states joined in that particular case.

The issue was soon rendered moot, with an opinion October 9, 2015, from the U.S. Court of Appeals for the Sixth Circuit blocking the rule nationwide.

While the courts continue to determine whether the current rule can survive, the controversy over the rule’s development continues to grow. Documents released August 2, 2015, by the House Committee on Oversight and Government Reform, revealed sharp divides among the EPA and Corps of Engineers staff about the analysis that went into the rule development.

Schedules obtained by the media under a Freedom of Information Act request also reveal numerous conversations between Secretary of Agriculture Tom Vilsack and EPA Administrator Gina McCarthy, which has added to the controversy over the rule’s development process.

For now, agricultural producers are left with the rules that were in place prior to August 28, 2015, which still leave considerable questions about what is, and is not, a “water of the United States.”

Washington Insider: TPP Fight Begins

Both sides in the debate over approval of the Trans-Pacific Partnership (TPP) agreement are hard at work now and an early view of potential economic impacts by a respected think tank is ready on the street. It concludes that the expansive Asia-Pacific deal would boost the paychecks of US workers, increase exports and grow the economy.

The well-known and respected Peterson Institute for International Economics published a report last week that estimates that implementation of the Trans-Pacific Partnership deal will raise U.S. annual incomes by $131 billion and annual exports by $357 billion, 9.1%, in 2030, with similar gains to follow. Estimates for the U.S. growth under TPP are 35% higher than those reported by Peterson in 2012, primarily because of the inclusion of new data such as the effects of non-tariff barriers on trade in existing agreements.

Officials were quick to point to these results. “This independent analysis shows that TPP will raise wages for American workers, grow our economy, and help farmers and businesses export more American products, according to US Trade Representative Michael Froman. The new economic report was described and discussed by The Hill last week.

In addition, the report says that delaying enactment one year from the expected implementation date of 2017 would mean a damaging blow to the economy to the tune of an estimated one-time loss of $77 billion, or about a $600 loss on average for every household.

Froman said the analysis “offers clear evidence that TPP is an answer to challenges on how middle-class workers will compete at home and how our nation’s economy will compete abroad. Importantly, it also shows that sitting on the sideline and delaying TPP, even for a short time, will cost us dearly,” he said.

President Obama says he wants Congress to pass the agreement this year but is encountering pushback on the deal from members of his own party. Many congressional Democrats argue that the deal hurts U.S. workers and lowers their wages.

The Peterson report disputes such claims and concluded that, “while the TPP is not likely to affect overall employment in the United States, it will involve adjustment costs as U.S. workers and capital move from less to more productive firms and industries,” the report said.

The report estimates are that 53,700 U.S. jobs will be affected each year during implementation of the TPP. In 2014, 55.5 million American workers changed jobs in that manner “so the transition effects of the TPP would represent less than 0.1% increase in labor market churn in a typical year,” it said.

But the report notes that “some workers may face more difficult transitions” and that the costs to them could be higher than for others, so U.S. policymakers would need to step in to make sure programs are available to help them during the process.

Overall, the report concludes that the TPP appears to have met its two most important negotiating objectives: it will substantially benefit the 12 trading partners and it sets out an ambitious set of global trade rules that have “raced far ahead of the WTO rulebook, including services, investment, telecommunications, the digital economy and other critical industries.”

“If the TPP is ratified and implemented smoothly, these rules will renew progress, now stalled for more than two decades, in strengthening the world trading system,” the report said.

D.C. Blizzard Postpones House Ag Committee Hearings

With Washington D.C. shut down following a massive snow storm, the House Agriculture Committee canceled a hearing regarding the Environmental Protection Agency. The House will not be in session at all this week as the Office of the Majority Leader announced over the weekend that the next votes are scheduled for February first. A House Agriculture Committee hearing planned for Tuesday on the impacts of the Environmental Protection Agency’s actions on the rural economy has been postponed. No new date has been announced, according to the Hagstrom Report. EPA Administrator Gina McCarthy had been expected to testify at the hearing. The Senate was still supposed to be in session Tuesday morning.

2015 Biodiesel Consumption Reaches Record Level

US consumers used a record of nearly 2.1 billion gallons of biodiesel in 2015, according to the National Biodiesel Board. Kicking off the 2016 Biodiesel Conference and Expo in Tampa, Florida, Monday, industry leaders released the production data compiled by the Environmental Protection Agency. Biodiesel industry leaders said the year-end figures demonstrate biodiesel’s rising popularity and its continued success as America’s first and only EPA-designated Advanced Biofuel to reach commercial-scale production nationwide. The data shows fuel companies reported producing 2.09 billion gallons of biodiesel last year, up from 1.97 billion gallons in 2014. The National Biodiesel Board did say however the figures show what it called a troubling trend in which imports are flooding the U.S. market and undercutting U.S. production. Domestic production remained mostly flat while imports jumped more than 25 percent in 2015 to 670 million gallons.

Exxon Predicts Energy Demand to Increase 25 Percent by 2040

Exxon Mobil Monday announced energy projections that show a 25 percent increase in demand by the year 2040. The predicted increase is equivalent to all the power and fuel consumed currently in the Americas, according to the company. Exxon expects crude oil demand to increase by 20 percent to 112 million barrels a day. The predictions came from the Exxon annual long-term outlook which also predicted demand for natural gas to account for 40 percent of the overall increase. China and India will account for half of the global increase in demand, according to Exxon, who says another 30 percent of the overall growth will come from just ten countries.

Expect little change in input costs as tough times continue

by Steven L. Klose, Professor and Extension Economist Texas A&M AgriLife Extension Service, Department of Agricultural Economics and Phil Kenkel, Professor, Oklahoma State University

After the dramatic volatility experienced over the last 7 years to 8 years in prices for agricultural commodities and inputs, the current outlook may be suggesting some stability. With few exceptions, there is little in the fundamental supply and demand conditions across the board to suggest 2016 will be much different than 2015.

Of course, that’s not very good news. Producer profit margins are extremely tight, and most analysts expect them to remain that way in 2016 and for the next few years. The current market situation indeed has some discussing whether the industry is headed toward a 1980s-type crisis.

At a minimum, there is a younger segment of producers who have never seen market conditions characterized by 2015 and the outlook for the next 3 years to 4 years. Generating profits and maintaining cash flow will be a challenge that requires an intense management of crop input needs and very efficient use of input dollars.

Lower crop prices create a very meager demand for fertilizers, chemicals, and other ag inputs. With no major supply disruptions, this played out in 2015 with fertilizer prices falling roughly 10 percent from the previous year.

CONTINUED DOWNWARD PRESSURE

Should we expect more of the same for 2016? Several factors point to continued downward pressure. Nothing in the commodity price outlook would suggest crop fertilizer demand will be anything but steady to weak. Supply inventories have not been pressured in the last year, and increased global supply capacity has come online for all three fertilizer components.

Fertilizer prices could edge slightly lower for 2016, but don’t expect another 10 percent reduction. While new supply capacity is available, major fertilizer suppliers would rather slow production and sit on some inventory than push excess supplies into a weak low margin market.

A big unknown in the market is the potential impact of new safety regulations on the storage of anhydrous ammonia. Anhydrous retailers have previously been exempt, but the new requirements could lead to significant facility investment or the decision to eliminate the product in some markets. Either would push prices higher.

BOTTOM FOR FUEL PRICES?

Fuel prices have also provided some cost of production relief recently, and we saw continued declines this fall, but analysts suggest we may have found the bottom of the price decline. Absent a global political disruption in the oil market, most expect stable to only slight increases in fuel costs for 2016.

Other input chemicals and seed costs appear to continue on a slight trend increase. Overall, cost of production is expected to be mostly flat relative to 2015, but those levels are still high enough to create a very challenging profit margin squeeze on most budgets.

When it comes to pricing inputs, a tempting strategy in this market is to simply wait. But keep in mind that price improvements, if they occur, will be minimal at best, while non-market impacts (politics, regulation, warring nations, etc.) can run prices up quickly.

Purchasing when you can pencil out a profit still makes sense. A more important strategy in this thin margin environment is to focus on efficient input use. Due diligence on soil fertility testing, closely monitoring crop needs, and targeting production costs to the highest return per dollar will be time well spent.

Unfortunately, the answer to “How tight can you tighten your belt?” may determine which producers will be able to navigate the difficult times ahead.

Monsanto Files Lawsuit against California’s Prop 65

Monsanto is taking legal action to prevent what the company calls a flawed listing of the herbicide glyphosate under California’s Proposition 65. Prop 65 requires the state to maintain a “list of chemicals known to the state of California to cause cancer.” The listing of glyphosate, according to Monsanto, would be flawed and baseless because glyphosate does not cause cancer, as determined by the U.S. Environmental Protection Agency, the European Food Safety Authority and pesticide regulators around the world. Monsanto claims the listing would violate the California and U.S. Constitutions because the state would be ceding the basis of its regulatory authority to an unelected and non-transparent foreign body that is not under the oversight or control of any federal or state government entity.  Monsanto filed the suit against the California Office of Environmental Health Hazard Assessment Thursday in California’s Fresno Superior Court. 

New Taiwanese President Wants to Join TPP, May Lift Ractopamine Ban

Taiwan’s new president, Tsai Ing-wen,(TY-eng-win) says she is in favor of joining the Trans-Pacific Partnership. A number of countries, in addition to Taiwan, including the Philippines and South Korea, have expressed interest in joining the regional trade deal if and when the agreement is expanded, according to the National Pork Producers Council. Tsai also said Taiwan must resolve issues related to imports of U.S. pork products, specifically the country’s ban on pork from hogs given the feed additive ractopamine. NPPC has been pressing the Obama administration to urge Taiwan to lift the ban, which the Council says is not based on science. Ractopamine has been determined to be safe by the U.S. Food and Drug Administration and is approved for use in pork production in 26 countries, with 75 additional nations allowing the importation of pork from hogs fed ractopamine.

Weed Blasting Offers New Control Method for Organic Farmers

Organic growers now have a new tool to control weeds: abrasive weeding, or “weed blasting,” which uses an air compressor to blast organic grit at weed seedlings during vulnerable growth stages. The method, recently field-tested at the University of Illinois, is surprisingly effective, according to the University.  In conjunction with plastic mulch, abrasive weeding reduced final weed biomass by 69 to 97 percent compared to non-weeded control plots.  Abrasive weeding involves blasting weed seedlings with tiny fragments of organic grit, using an air compressor. Researchers say blasted grit does not discriminate between weed and crop seedlings, which makes it important to use this method in transplanted crops that are substantially larger than weed seedlings at the time of grit application. Although some visible damage occurred on stems and leaves of both tomato and pepper crops, the damage did not affect marketable fruit yield. Studies are ongoing to determine whether abrasions on crop tissues could result in increased susceptibility to disease, but early results show little effect. An additional benefit of weed blasting is the potential for growers to use organic fertilizers, such as soybean meal, as blasting material. The method is now being tested in different horticultural crops, including broccoli and kale, with and without additional weed control methods.

Global Grain Hoard Increasing with Less Used for Animal Feed

Slowing demand for animal feed this season will leave the world with a bigger hoard of grains than previously thought, according to the International Grains Council. Bloomberg reports that while production from bumper harvests will be slightly less than predicted in November, carryover stockpiles of grains excluding rice will increase 1.9 percent to 455 million metric tons in 2015-16, the highest in almost three decades. That is one million tons more than the previous forecast.  Wheat and corn futures declined for a third year in 2015. That is because large harvests around the world led to ample supplies of many different grains. The International Grains Council cut its estimate for total grains demand by just under a one-half percent.

U.S. Textile Manufacturers Endorse Trans-Pacific Partnership

On Jan. 20, the National Council of Textile Organizations voted to formally support the Trans-Pacific Partnership free trade agreement. The decision to support TPP came after an exhaustive analysis determined that NCTO's principle objectives were met as part of the finalized terms of the agreement. These objectives include:

• A strong yarn forward rule of origin for the vast majority of textile and apparel products.
• Reasonable, multi-year tariff phase-outs for sensitive textile and apparel products.
• Terms that provided for the stability of the Western Hemisphere textile and apparel production chain.

"Due to the inclusion of Vietnam and other major textile and apparel exporting countries, the TPP agreement is the most significant trade policy initiative to confront the U.S. textile sector over the past 25 years," stated Jeff Price, NCTO chairman and president of the Specialty Fabrics Division at Milliken and Company. "As such, it was critical for our government to produce a final agreement that appropriately reflected the needs of U.S. textile manufacturers and the hundreds of thousands of workers we employ nationwide. We believe that the agreement concluded late last year in Atlanta meets our core objectives and is worthy of our full support." 

"No agreement is perfect, and certainly that is the case with TPP," Price continued. "There were difficult trade-offs that we, as U.S. manufacturers, had to consider during this process, as is the case with any complicated negotiation. Nonetheless, this agreement is very sound in the essential elements that govern textile trade. We stated throughout the entire negotiating process that if our key objectives were met, NCTO would support the final agreement. Today, we are making good on that commitment to the U.S. government by pledging our support of TPP." 

The U.S. textile and apparel industry is a significant contributor to the U.S. economy, producing more than $70 billion in annual output and employing nearly 500,000 workers nationwide. In addition, the U.S. textile and apparel sector exported more than $24 billion in goods in 2014.  

Export Sales Report Bearish

OMAHA (DTN) -- This week's export sales report should be viewed as bearish for wheat and corn, neutral-to-bearish for soybeans, and neutral for sorghum, according to DTN Senior Analyst Darin Newsom.

Weekly export sales for all wheat showed a total of 16.1 mb (437,200 mt) with 13.3 mb (362,000 mt) for the 2015-2016 marketing year. Total sales for 2015-2016 were 603.2 mb, or 15% behind last year's 712.6 mb for the same week. USDA is projecting a year-to-year decrease of only 6%. Weekly shipments of 9.5 mb (257,700 mt) put the marketing year total at 448.1 mb, or 15% behind last year's 514.3 mb. Marketing year totals could continue to be viewed as bearish, Newsom said.

Weekly export sales of corn showed a total of 53.0 mb (1,346,700 mt) with 45.6 mb (1,157,700 mt) for the 2015-2016 marketing year. Total sales for 2015-2016 were 877.1 mb, 27% behind last year's 1.195 bb for the same week. USDA's is projecting a year-to-year decrease of 9%. Weekly shipments of 22.5 mb (571,600 mt) put the marketing year total at 417.7 mb, or 23% behind last year's 542.4 mb. Marketing year totals remain bearish, Newsom said.

Weekly export sales of grain sorghum (milo) showed a total of 8.3 mb (210,700 mt) with all for the 2015-2016 marketing year. Total sales for 2015-2016 were 223.5 mb, 14% behind last year's 260.4 mb for the same week. USDA is projecting a year-to-year decrease of 8%. Weekly shipments of 4.2 mb (105,700 mt) put the marketing year total at 150.6 mb, or 35% ahead of last year's 111.9 mb. Marketing year totals could be viewed as neutral, Newsom said.

Weekly export sales of soybeans showed a total of 37.2 mb (1,012,200 mt) with 36.2 mb (985,100 mt) for the 2015-2016 marketing year. Total sales for 2015-2016 were 1.475 bb, or 9% behind last year's 1.624 bb for the same week. USDA is projecting a year-to-year decrease of 8%. Weekly shipments of 57.9 mb (1,575,100 mt) put the marketing year total at 1.104 bb, or 9% behind last year's 1.208 bb. Marketing year totals could be viewed as neutral-to-bearish, Newsom said.

USDA releases 2015 annual crop summary

The US Department of Agriculture released a report this week detailing 2015 crops, which in Montana pointed downwards compared to 2014.

All wheat production in Montana, estimated at 185.42 million bushels, is down 11 percent from 2014. All wheat yield was 35.2 bushels per acre, down 1.9 bushels per acre from a year ago.

Winter wheat producers seeded 2.35 million acres in the fall of 2014 for harvest in 2015, down from 2.50 million acres seeded for the previous year’s crop. Area harvested for grain decreased 20,000 acres from last year to 2.22 million acres in 2015. Winter wheat production is estimated at 91.02 million bushels, down 1 percent from last year. Winter wheat yield, at 41 bushels per acre, is unchanged from last year.

Spring wheat seedings, at 2.55 million acres, are down 500,000 acres from last year. Area harvested totaled 2.44 million acres, down from 2.98 million acres harvested last year. Spring wheat production is estimated at 75.64 million bushels, down 27 percent from last year. Spring wheat yield, at 31 bushels per acre, is down 4.0 bushels per acre from last year.

Durum wheat seedings, at 620,000 acres, are up 185,000 acres from last year. Area harvested totaled 605,000 acres, up from 430,000 acres harvested last year. Durum wheat production is estimated at 18.76 million bushels, up 41 percent from last year. Durum wheat yield, at 31 bushels per acre, is unchanged from last year.

Winter wheat seedings last fall for the 2016 crop year are estimated at 2.25 million acres, down 4 percent from last year.

Montana’s barley seeded area, at 970,000 acres, is up 50,000 acres from last year. Harvested area, at 850,000 acres, is up 80,000 acres from 2014. Barley yield, at 52 bushels per acre, is down 6.0 bushels per acre from last year. Barley production in 2015 is estimated at 44.20 million bushels, down 1 percent from the previous year.

All hay production for 2015 in Montana is estimated at 4.68 million tons, down 13 percent from the 2014 total.

Alfalfa hay production was estimated at 3.4 million tons from 1.7 million acres harvested, down 485,000 tons from 2014. Average yield for the 2015 crop was 2 tons per acre, 0.10 ton per acre below last year.

All other hay production totaled 1.28 million tons from 800,000 acres harvested, down 216,000 tons from 2014. The average yield of 1.60 tons per acre was down 0.10 ton per acre from last year. New seedings of alfalfa and alfalfa mixtures in Montana were estimated at 100,000 acres, unchanged from 2014.

Montana potato growers produced 3.49 million hundredweight of potatoes this year, down 4 percent from last year’s crop. Average yield at 320 hundredweight per acre, was unchanged from last year’s yield. Harvested area of 10,900 acres this year was 400 acres less than last year’s harvested area.

As of December 1, producers in Montana were storing 3.7 million tons of all hay, down 20 percent from the 4.6 million tons stored last year.

United states highlights

All wheat production totaled 2.05 billion bushels in 2015, up 1 percent from the 2014 total. Area harvested for grain totaled 47.1 million acres, up 2 percent from the previous year. The United States yield is estimated at 43.6 bushels per acre, down 0.1 bushel from the previous year.

Winter wheat production for 2015 totaled 1.37 billion bushels, down less than 1 percent from the 2014 total. The United States yield, at 42.5 bushels per acre, is down 0.1 bushel from 2014. Area harvested for grain is estimated at 32.3 million acres, down slightly from the previous year.

Other spring wheat production for 2015 is estimated at 599 million bushels, up less than 1 percent from the 2014 total. Harvested area totaled 12.9 million acres, up 2 percent from 2014. The United States yield is estimated at 46.3 bushels per acre, down 0.4 bushel below the 2014 average yield. Of the total production, 564 million bushels are Hard Red Spring wheat, up 2 percent from 2014.

Durum wheat production for 2015 is estimated at 82.5 million bushels, up 53 percent from the 2014 total. Grain area harvested totaled 1.9 million acres, up 41 percent from the previous year. The United States yield is estimated at 43.5 bushels per acre, up 3.3 bushels from 2014.

Winter Winter wheat seeded area for 2016 is expected to total 36.6 million acres, down 7 percent from 2015. Approximate class acreage breakdowns are: Hard Red Winter, 26.5 million; Soft Red Winter, 6.72 million; and White Winter, 3.43 million.

Barley production is estimated at 214 million bushels, up 18 percent from the revised 2014 total. Average yield per acre, at 68.9 bushels, is down 3.8 bushels from the previous year. Producers seeded 3.56 million acres in 2015, up 17 percent from last year. Harvested area, at 3.11 million acres, is up 25 percent from 2014.

Production of fall potatoes for 2015 is estimated at 405 million cwt, down 1 percent from the November forecast but up slightly from last year. Area harvested, at 937,700 acres, is down 1 percent from the November forecast but up 1 percent from last year. The average yield is estimated at 431 cwt per acre, down 1 cwt from the November forecast and down 3 cwt from last year’s yield.

Production of all dry hay for 2015 is estimated at 134 million tons, down 6 percent from the October 1 forecast and down 4 percent from the revised 2014 total. Area harvested is estimated at 54.4 million acres, down 4 percent from the October 1 forecast and down 5 percent from 2014. The average yield, at 2.47 tons per acre, is down .05 ton from the October 1 forecast but up .02 ton from the previous year.

Production of alfalfa and alfalfa mixtures in 2015 is estimated at 59.0 million tons, down 7 percent from the October 1 forecast and down 4 percent from the revised 2014 total. Harvested area, at 17.8 million acres, is down 3 percent from the October 1 forecast and down 3 percent below the previous year. Average yield is estimated at 3.32 tons per acre, 0.13 ton below the October 1forecast and down .02 ton from 2014.

Production of all other hay in 2015 totaled 75.4 million tons, down 5 percent from the October forecast and down 4 percent from the revised 2014 total. Harvested area, at 36.7 million acres, is down 4 percent from the October 1 forecast and down 5 percent from last year. Average yield is estimated at a record 2.06 tons per acre, down 0.01 ton from the October 1 forecast but up 0.03 ton from the previous year. Growers seeded 2.54 million acres of alfalfa and alfalfa mixtures during 2015, down slightly from 2014.

All hay stored on United States farms as of December 1, 2015 totaled 95.0 million tons, up 3 percent from the previous December. Disappearance from May 1, 2015 - December 1, 2015 totaled 63.9 million tons, compared with 67.0 million tons for the same period a year earlier.

Corn for grain production is estimated at 13.6 billion bushels, down slightly from the November forecast and down 4 percent from the 2014 estimate. The average yield in the United States is estimated at 168.4 bushels per acre. This is down .9 bushel from the November forecast and 2.6 bushels below the 2014 average yield of 171.0 bushels per acre. Area harvested for grain is estimated at 80.7 million acres, up slightly from the November forecast but down 3 percent from the 2014 acreage. Corn silage production is estimated at 127 million tons for 2015, down less than 1 percent from 2014. The United States silage yield is estimated at 20.4 tons per acre, up 0.3 ton from 2014. Area harvested for silage is estimated at 6.22 million acres, down 2 percent from a year ago.

–USDA