Agricultural real estate values continued to increase at a rapid pace across farm country through the end of last year. The increase in the value of farmland has accelerated in recent quarters alongside elevated commodity prices that have boosted profit opportunities and supported broad strength in the U.S. farm economy. The Federal Reserve Bank of Kansas City says farm finances and credit conditions have improved dramatically in recent years and interest rates on farm loans remained near historic lows. That’s added support to agricultural real estate markets. Looking at the year ahead, the outlook for agricultural credit conditions remains strong. Elevated commodity prices and robust support from government aid programs due to COVID-19 supported rapid improvement in farm income and credit conditions. Despite concerns about higher input costs and intensifying drought in some regions, markets for most major commodities remained strong, and producers are looking at sound profit opportunities in 2022.
Welcome
Monday, February 28, 2022
Vilsack says Ag Outlook is “Strong”
Ag Secretary Tom Vilsack gave the keynote address last week at the USDA’s annual Agricultural Outlook Forum. The Hagstrom Report says that the secretary called the outlook for U.S. agriculture “bright, strong, and positive” despite the problems around the world. When asked about the impact of the battle in Ukraine, Vilsack said it’s too early to make projections about what impacts the war will have on fertilizer and food prices in the U.S. He also says the administration will be supportive of state attorneys general analyzing the history of fertilizer pricing. His biggest concern is that companies may be taking advantage of farmers. The secretary made his remarks after returning from a trade mission to Dubai, the first mission in two years. Vilsack says ag exports set a record last year, and exports will be even higher this year. He said the Dubai trip is part of an agency effort to diversify exports beyond China.
First Tariff-Free Load of Wheat Arrives in Vietnam
After productive talks with the U.S. in 2021, the Vietnamese government eliminated a three percent U.S. wheat import tariff on December 30. Earlier this month, the first shipment of U.S. wheat purchased without a tariff arrived at a Vietnam port. The shipment contained more than 68,300 metric tons of soft white and hard red spring wheat grown in the Pacific Northwest and Northern Plains. “With the import tariff reduced to zero, the Vietnamese buyer saved almost one million dollars on this vessel load of U.S. wheat,” says Robert Hanson, Agricultural Counselor with the Foreign Ag Service in Hanoi. Vince Peterson, President of U.S. Wheat Associates, says, “The Foreign Agricultural Service worked hard to cut this barrier and level the playing field for American wheat in Vietnam.” Vietnam imports an average of about four million metric tons of wheat every year. Peterson says the demand for U.S. wheat in Vietnam will keep growing in the future.
Grain Buyers Look for Alternative Grain Supplies
International grain buyers are looking for different places to buy wheat and corn as a Russian invasion cut off Ukrainian supplies. Reuters says European Union producers like Romania and France are being used to cover some nearby shipments. The conflict is rattling international grain markets. European wheat futures hit record highs last week as stalled shipments from Ukraine and Russia are likely. Those two countries and current adversaries account for nearly a third of world wheat exports and almost a fifth of global corn exports. The assault from Moscow led Ukraine to close its ports last week. Romania is a major grain supplier that exports through the Black Sea but outside the conflict zone, so buyers are looking there for backup purchases. Ukraine is a key wheat exporter to Middle Eastern and Mediterranean locations like Egypt, Turkey, Italy, and African countries. Ukraine’s corn customers include China, Spain, Iran, and South Korea.
NCGA Wins Ethanol Award from the Renewable Fuels Association
The Renewable Fuels Association presented its 2022 Ethanol Industry Award to the National Corn Growers Association. The award was given in recognition of the group’s dedicated and sustained efforts on behalf of the ethanol industry over the past four decades. The award is the RFA’s highest recognition and was presented during the recent National Ethanol Conference in New Orleans. “RFA and NCGA have worked together for decades on policy, market development, research, and promotional efforts aimed at growing our nation’s ethanol industry,” says RFA boss Geoff Cooper. “NCGA CEO Jon Doggett was personally involved in the very early negotiations with RFA, the oil industry, and other Ag groups in an effort that ultimately led to the passage of the Energy Policy Act of 2005.” He also said that NCGA has worked together with RFA on countless research and ethanol promotion efforts, such as technical work, market development, exports, and many other initiatives.
Consumers Want Food Made from American Crops
The United Soybean Board released results of a new survey highlighting consumer perceptions of U.S. soybeans, soybean farmers, and the American food supply chain. The survey shows consumer support of domestic agriculture continues to grow stronger, with 78 percent of consumers saying it’s important to buy U.S.-grown food, including soybeans. The 78 percent is an eight-percent increase from the last survey in December 2020. Other highlights from the study include U.S. farmers being the most trusted source when it comes to food safety, with 83 percent of consumers ranking them number one among members of the supply chain. The vast majority of consumers have a very/somewhat positive view of U.S. farmers who grow crops, including soybeans. Soy is seen as healthy by more than half of consumers, with 60 percent saying that soy-based food is somewhat/very healthy. 72 percent of respondents are more positive about soy because of its sustainability.
Monday Watch List
Markets
After a weekend of fighting in Ukraine, traders will be quick to catch up on events and check the latest weather forecasts. USDA's weekly report of grain export inspections is at 10 a.m. CST and USDA issues its monthly report of ag prices at 2 p.m. Later Monday afternoon, DTN will report on February price averages for crop insurance purposes and what that means for this year's coverage terms.
Weather
Waves of showers are moving into the Pacific Northwest for the week. While there will be some showers near the U.S.-Canada border and also around Florida, much of the country's growing regions will remain dry on Monday. Warmer air spreading across the bulk of the country will cause snowmelt and increase drought stress for hard red winter wheat areas.
Friday, February 25, 2022
USDA Commits $215 Million for Food Supply Chain
Ag Secretary Tom Vilsack announced that the USDA will make available $215 million in grants and other support to make America’s food supply chain more resilient. The financing will help expand meat and poultry processing options, strengthen the food supply chain, and create jobs and economic opportunities in rural areas. The National Cattlemen’s Beef Association appreciates the effort to diversify the nation’s processing capacity. “Investing in packing capacity is critically important for the cattle industry,” says NCBA Director of Government Affairs and Market Regulatory Policy Tanner Beymer. “The expansion of regional processing facilities will bolster resiliency within the beef supply chain and help return marketing leverage to cattle producers.” USDA Rural Development will make $150 million available through the Meat and Poultry Processing Expansion Program. Another $40 million is available from the National Institute of Food and Agriculture for workforce development, and an additional $25 million will go to technical assistance.
Ukraine Shuts Down Ports After Russian Attack
Ukraine’s military shut down commercial shipping operations at the country’s ports after Russia invaded Ukraine. Reuters said the announcement comes from an adviser to the Ukrainian president’s chief of staff and stoked fears of supply disruptions from one of the world’s top grain and oilseeds exporters. Ukraine is a major exporter of corn, much of which goes to China and the European Union. Ukraine also competes with Russia to ship wheat to major buyers like Turkey and Egypt. “The market is still trying to get a clearer picture of the actual military situation on the ground,” one European grain trader told Reuters. “According to the initial reports from shipping agencies, the ports in the Azov (A-zoff) and Black Seas don’t seem to have sustained much damage.” Egypt’s state grains buyer canceled an international purchase of wheat as the conflict led to reports that no offers of either Russian or Ukrainian wheat had been received
High Input Costs Cut Down U.S. Corn Acres
U.S. farmers will cut back on their corn acres this year by 1.5 percent and slightly increase their soybean acres this year because of the high cost of inputs. During the agency’s annual Ag Outlook Forum, USDA projected that high yields would bring in the biggest corn and soybean crops in history, which would likely pull down season-average prices for the two most widely planted crops in America. USDA says corn plantings will total 92 million acres, 1.4 million lower than in 2020. Soybean plantings will rise 88,000 acres to a total of 88 million this year. A corn crop of 181 bushels an acre would yield a record 15.24 billion bushels. Soybeans, with yields of 51.5 bushels per acre, would yield a record 4.49 billion bushels. Projected farm-gate prices were $5 a bushel for this year’s corn crop and $12.75 a bushel for soybeans. Wheat production will be 1.94 billion bushels at $6.80 a bushel
Deadline Extended for Spot Market Hog Pandemic Assistance
Pork producers who sold hogs through a spot market sale during COVID-19 now have until April 15 to submit applications for the USDA’s Spot Market Hog Pandemic Program. The original deadline to submit applications was February 25. The program assists pork producers who sold hogs through a spot market sale between April 16 and September 1 of 2020. During those months, producers faced the greatest reduction in market prices due to the pandemic. USDA is offering SMHPP in response to a reduction in packer production and supply chain issues due to COVID-19, which resulted in fewer negotiated hogs getting procured by processors and lower market prices. “In response to stakeholder feedback and our program analysis, we’ll be making adjustments to clarify the definition of a spot market sale and to hog eligibility while including documentation requirements to prevent erroneous payments,” says FSA Administrator Zach Ducheneaux. Visit farmers.gov/smhpp for more information.
Dairy Checkoff Collaborating with Mayo Clinic
The dairy checkoff announced a five-year collaboration with Mayo Clinic to explore research and consumer outreach efforts to improve public health and advance dairy’s benefits. The memorandum of understanding with Mayo involves Dairy Management Inc., the National Dairy Council, and the Innovation Center for U.S. Dairy. “This is a milestone moment for dairy farmers who made this possible through their century-long commitment to research and dairy nutrition,” says DMI CEO Barbara O’Brien. The collaboration will research how dairy foods, particularly whole milk, impact cardiovascular health and metabolism. Other potential research areas include dairy’s impact on sleep, digestive health, and immunity. Content created by the collaboration will help debunk dairy myths and help consumers maintain confidence in dairy foods, farms, and businesses. “This collaboration illustrates the checkoff’s consumer-first focus and our commitment to leading with credible science,” says DMI Chair and Pennsylvania dairy farmer Marilyn Hershey. The collaboration will get incorporated across all four Mayo Clinic campuses.
Zoetis Support Program Benefits FFA
Zoetis (Zo-EH-tis) recently announced the 2021 results of its Zoetis Industry Support Program, which donated more than $392,000 to more than 1,500 FFA Chapters around the country. Estimates show that approximately 33,000 FFA students benefitted from the contributions. This donation is part of the more than $600,000 the company contributes every year to support FFA. “This year marks the 15th year of the Industry Support Program,” says Jared Shriver, senior vice president of U.S. cattle and pork with Zoetis. “As a company, we are committed to the growth and development of future leaders in agriculture.” Veterinarians and animal health dealers and distributors make the Industry Support Program work by designating a portion of sales from eligible Zoetis Cattle and Equine products to the FFA chapters of their choice. Chapter advisers say the money helps offset the costs of travel and event expenses, classroom equipment and resources, community projects, purchasing blue jackets, scholarships, and SAE funding.
Friday Watch List
Markets
Friday's reports start with January U.S. durable goods orders and U.S. personal incomes at 7:30 a.m. CST, followed by the University of Michigan's final reading of consumer sentiment in February at 9 a.m. USDA's cattle on-feed report for February 1 is due out at 2 p.m. Traders will remain focused on the latest weather forecasts and events in Ukraine.
Weather
The system that brought mixed precipitation to a good portion of middle America on Thursday continues to head east on Friday. Moderate to heavy mixed precipitation is expected in the Northeast, while the trailing cold front will bring some spotty showers to the Mid-Atlantic and Southeast. Snow is pulling east of Michigan Friday morning but some lake-effect snow may continue through the evening around the Great Lakes. Otherwise, cold and dry conditions continue to build west of the system.
Thursday, February 24, 2022
Biden Administration Announces Port Infrastructure Funding
The Biden Administration Wednesday announced $450 million in grant funding for port-related projects through the Port Infrastructure Development Program. The grants can help ports expand capacity and improve the movement of goods through U.S. supply chains. The Department of Transportation says the effort is the largest investment in the program ever, made possible by the Bipartisan Infrastructure Law, which will invest $17 billion in ports and waterways. Transportation Secretary Pete Buttigieg says, “We’re proud to announce this funding to help ports improve their infrastructure— to get goods moving more efficiently and help keep costs under control for American families.” The grants are awarded on a competitive basis to support projects that will improve the movement of goods to, through and around ports. Additionally, the Bipartisan Infrastructure Law calls upon applicants to explore ways to include projects that will improve goods movement while also strengthening resilience, reducing emissions and advancing environmental justice.
Food Prices Below Overall Inflation In 2021
Overall, food prices increased by an average of 3.9 percent in 2021 compared to 2020, the highest annual increase since 2008. USDA's Economic Research Service released new data Wednesday that shows food prices grew more slowly than "all items," but more quickly than all other of the "major groups" tracked by the U.S. Bureau of Labor Statistics. The Consumer Price Index for all items rose 4.7 percent in 2021. The food-away-from-home, restaurant purchases, increased 4.5 percent, compared with an increase of 3.5 percent for food-at-home - grocery stores or other purchases from food retailers. The highest price increases in food-at-home categories in 2021 were for beef and veal at 9.3 percent, pork at 8.6 percent, and fresh fruit 5.5 percent. Using the Consumer Price Index data, USDA researchers project overall food prices will increase between two and three percent in 2022. The Consumer Price Index for food increased 0.9 percent in January.
HPAI Found in Commercial Poultry Flock in Delaware
The Department of Agriculture Wednesday announced another confirmed case of highly pathogenic avian influenza, or HPAI. USDA’s Animal and Plant Health Inspection Service confirmed the HPAI outbreak in a commercial poultry flock in New Castle County, Delaware. APHIS and state officials have quarantined the flock and will depopulate the birds. The announcement follows the previous confirmation of HPAI in a non-commercial backyard flock in Maine and New York late last week. Other confirmed HPAI outbreaks include sites in Kentucky, Virginia, Indiana, and North and South Carolina. Earlier this month, APHIS expanded wild bird surveillance for avian influenza to include the Mississippi and Central Flyways. USDA says anyone involved with poultry should review their biosecurity plan and enhance their biosecurity practices to ensure the health of their birds. In addition to practicing good biosecurity, all bird owners should prevent contact between their birds and wild birds and report sick birds or unusual bird deaths to state and federal officials.
Ag Senators Call on Administration to Strengthen Support for U.S. Biobased Economy
Senate Agriculture Chair Debbie Stabenow this week called on the Biden administration to take steps to address the climate crisis by increasing federal investments in biobased products. The Michigan Democrat, joined by Minnesota Democrat Amy Klobuchar, made the request in a letter to Agriculture Secretary Tom Vilsack. The lawmakers say President Biden’s commitment to sustainable procurement is an opportunity to strengthen USDA’s BioPreferred program as the industry standard for sustainable procurement in government agencies. Stabenow and Klobuchar say renewable chemicals, biobased plastics, and other biobased products are effective tools in reducing the nation’s dependence on petroleum while creating markets for farmers. The lawmakers wrote,” Growing the biobased economy supports good paying jobs for American workers and positions American companies to continue to lead the world in biobased innovation.” They say growing the biobased economy also positions American companies to continue to lead the world in biobased innovation.
ASA Selects Gena Perry as WISHH Executive Director
The American Soybean Association Wednesday announced Gena Perry as executive director of ASA’s World Initiative for Soy in Human Health program. Perry, who currently serves as project director-global strategy, will assume the new role February 28. Perry joined WISHH in 2019 as project director of WISHH’s USDA-funded Food for Progress poultry project in Ghana. Before joining WISHH, she lived and worked in West Africa for AgriCorps and 4-H Ghana. She steps into the position following Liz Hare, who was in the role since 2018 and continues to serve as a consultant to WISHH during the transition. Perry says, "I look forward to expanding our activities with U.S. soybean growers and our U.S. and international partners." The 22-year-old WISHH organization is now working in a record 28 countries in Asia, sub-Saharan Africa and Latin America. WISHH has a strong record of implementing programs with the support of state soybean organizations, the United Soybean Board and the Department of Agriculture.
MacKenzie Scott Donates $50 Million to National 4-H Council
The National 4-H Council this week announced it received a $50 million gift from writer and philanthropist MacKenzie Scott. The gift from Scott, the ex-wife of Amazon founder Jeff Bezos, is the largest single donation ever to the National 4-H Council. Because of 4-H's expansive reach into every U.S. county, the investment will support youth development for millions of kids and families. Krysta Harden, National 4-H Council Board Chair, says, “This extraordinary gift is a rare and special occurrence,” adding, “With such a significant gift comes great responsibility.” Harden says 4-H will engage stakeholders to ensure the resources lift the diverse voices of young people. The gift builds upon the efforts of thousands of local Cooperative Extension 4-H educators, 500,000 volunteers, and millions of 4-H youth, alumni, and donors. The organization says the gift will sustain 4-H's commitment to ensuring all young people are empowered with the skills to lead for a lifetime.
Thursday Watch List
Markets
This week's holiday schedule pushed USDA's weekly export sales report to Friday, but weekly U.S. jobless claims, a report on fourth quarter U.S. GDP and an update of the U.S. Drought Monitor will all be out at 7:30 a.m. CST Thursday. The Energy Department's weekly natural gas storage report is due out at 9:30 a.m., followed by the weekly inventory report and January U.S. new home sales at 10 a.m. CST. Traders continue to put a lot of attention on Ukraine and the latest weather forecasts.
Weather
Snow, freezing precipitation and very cold conditions are in store for the central U.S. Thursday. Periods of snow will extend from the western Plains east through the Midwest. Meanwhile, a swath of freezing precipitation will produce a glaze of ice from the southeastern Plains to the southern Midwest. Northern areas have another day of harsh wind chill conditions, and the Mid-South is at risk for flooding from locally heavy rain.
Wednesday, February 23, 2022
Study: Ethanol Industry Strongly Rebounded in 2021
In 2021, the U.S. ethanol industry “recovered substantially” from pandemic conditions, with ethanol and gasoline use approaching pre-COVID-19 levels in the second half of the year. A study on the industry by ABF Economics for the Renewable Fuels Association was released this week. With higher demand and value, ethanol’s contribution to U.S. gross domestic product in 2021 was the second-highest ever. In 2021, more than 73,000 U.S. jobs were directly associated with the ethanol industry, which supported an additional 334,200 indirect and induced jobs across all sectors of the economy. The industry created $28.7 billion in household income and contributed just over $52 billion to gross domestic product. Compared to 2020, this represented a 55 percent increase in income generated and a 50 percent increase in the contribution to GDP. The new report also shows that the ethanol industry spent nearly $38 billion on raw materials and goods and services to produce ethanol during 2021, with corn purchases alone accounting for more than $30 billion.
Growth Energy, EPA Reach Settlement on Deadline for Issuing 2021, 2022 RVO
The Environmental Protection Agency agreed to file a notice in the Federal Register seeking comment on a proposed judicial consent decree that would require EPA to finalize the 2021 and 2022 Renewable Volume Obligations. The RVO’s are the subject of pending rulemaking due no later than June 3, 2022. The announcement is part of settlement discussions with Growth Energy, which filed multiple notices of intent to sue and a complaint in federal district court in response to the agency’s extended delay in issuing the RVOs. Growth Energy contends the delays are a direct violation of the deadlines established by Congress for the Renewable Fuel Standard program. Growth Energy CEO Emily Skor says, “This agreement is a significant milestone for the biofuels industry and reflects Growth Energy’s persistent efforts to hold EPA accountable.” The EPA Federal Register notice scheduled for publication Wednesday (today) provides 30 days for public comment from the date of publication.
Cattlemen’s Beef Board Releases 2021 Annual Report
The Cattlemen’s Beef Board Tuesday released its 2021 Annual Report. The 2021 report includes information about projects and results within each of the organization's program areas, including promotion, foreign marketing, consumer information, industry information, research and producer communications. The report also contains a financial statement of assets, liabilities and net assets from September 30, 2020, to September 30, 2021. CBB CEO Greg Hanes says the annual report is “another example of the Checkoff’s ongoing efforts to be more transparent with the producers who invest in our programs.” Highlights in the report include 15 million views of the Beef in the Early Years educational content encouraging parents to consider beef as a first food for their children. The report also shows a 20 percent increase in export value compared to the previous record pace established in 2018. For more information about the Cattlemen’s Beef Board and the Beef Checkoff and to find the report, visit DrivingDemandForBeef.com.
USDA Finds Avian Influenza in Maine
USDA’s Animal and Plant Health Inspection Service recently confirmed the presence of highly pathogenic avian influenza, or HPAI, in a non-commercial backyard flock in Maine. Samples from the flock were tested at the Cornell University Animal Health Diagnostic Center, part of the National Animal Health Laboratory Network, and confirmed at the APHIS National Veterinary Services Laboratories in Ames, Iowa. APHIS is working closely with state animal health officials in Maine on a joint incident response. State officials quarantined the affected premises, and birds on the properties will be depopulated to prevent the spread of the disease. Birds from the flock will not enter the food system. The Maine confirmation is the latest in several confirmed cases of HPAI in the United States. According to the U.S. Centers for Disease Control and Prevention, the recent HPAI detections in birds do not present an immediate public health concern. Additional information on biosecurity for non-commercial backyard flocks can be found at healthybirds.aphis.usda.gov.
Organic Dairy Farms See Slower Productivity Growth Than Conventional
Organic dairy farm production growth is slower than conventional operations, according to new data from USDA’s Economic Research Service. Productivity is measured as total factor productivity, the ratio of the total amount of goods produced relative to all the inputs—such as labor, fertilizer, and other costs—used to produce those goods. USDA researchers studied the difference in total factor productivity growth between organic and conventional farms using data from organic dairy farms between 2005–16 and from conventional dairy farms between 2000–2016. Total factor productivity grew at an annual rate of 0.66 percent for organic dairy farms compared with 2.51 percent among conventional dairy operations. Both organic and conventional farms saw productivity growth due to technological progress such as advanced equipment and improved genetics. While weather-related feed factors reduced productivity for organic farms, they contributed to a productivity growth for conventional dairy farms. Technical efficiency increased productivity slightly on organic farms, but reduced productivity on conventional farms, while scale-and-mix efficiency reduced productivity for both types of farms.
Former Ag Secretary Perdue Sole Finalist for University System of Georgia Chancellor
Former Agriculture Secretary Sonny Perdue is the sole finalist in the search for the next chancellor of the University System of Georgia. The decision follows a national search over the past year to lead the university system. USG's 26 public colleges and universities enroll more than 340,000 students and employ more than 48,000 faculty and staff to fulfill the system's teaching, research and service mission across the state. Board Chair Harold Reynolds says, “Perdue stood out for his impressive experience and leadership in public service as well as a vast understanding not only of Georgia and its communities.” Perdue adds, “I consider being named the finalist as the Chancellor of the University System of Georgia to be a wonderful capstone to a career of public service.” The Board began its national search in January 2021 and take action on the Chancellor position at a future board meeting, no sooner than 14 days from naming a finalist.
Wednesday Watch List
Markets
There are no official reports on Wednesday's docket. The Energy Department's weekly inventory report is set for 10 a.m. CST Thursday as part of this week's holiday schedule. Traders will continue to keep a close watch on the latest weather forecasts and events in Ukraine.
Weather
A strong Arctic cold wave will cover the entire central U.S. Wednesday. We'll also see periods of snow from the southern Rockies east through the southern Plains, northern Delta and the southeastern Midwest with travel and safety hazards. Northern and central crop areas will have additional stress to transportation, safety and livestock conditions due to well below normal temperatures and moderate to strong winds.
Tuesday, February 22, 2022
2021 U.S. Hemp Production Worth $824 Million
India Makes Record U.S Soy oil Purchase
USDA Extends Application Deadline for ReConnect Program
USDA’s Rural Development Undersecretary Xochitl (So-CHEEL) Torres Small says the agency is extending the application deadline for funding under the ReConnect Program to March 9. The funds are intended to expand high-speed internet access to millions of people across rural America. “Today’s extension of the ReConnect Program deadline will help ensure that all applicants have the time they need to secure this critical funding,” Torres Small says. “I encourage all eligible parties to apply for this assistance.” USDA is making $200 million available in ReConnect Program loans, $250 million in loan/grant combinations, $350 million in grants with a 25 percent matching requirement, and $350 million in grants with no matching requirements for tribes and projects in socially vulnerable communities. In the coming months, USDA plans to begin making available an additional $2 billion in rural broadband funding allocated to USDA by the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law.
Deere Revenues Up While Net Income Drops in the First Quarter
Deere and Company reported a net income of $903 million during the company’s first quarter that ended on January 30, or about $2.92 a share. That compares to a net income of $1.224 billion or $3.87 a share for the same time last year. Worldwide net sales and revenues increased five percent in the first quarter to $9.56 billion. Equipment operations and net sales were $8.53 billion for the quarter, compared with $8.05 billion in 2021. “Deere’s performance in the first quarter was impressive given production issues surrounding the delayed ratification of our UAW contract as well as persistent challenges posed by the supply chain and pandemic,” says Deere Chairman and CEO John C. May. “Those factors led to higher production costs during the quarter.” May also says the company will continue to work closely with key suppliers to manage the situation. Net income for Deere and Company is forecast between $6.7 and $7.1 billion.
Bayer Moving Forward on Short-Corn System
Bayer recently announced it’s moving ahead on a short-stature corn project which will see test plantings on selected farmer fields in 2023. DTN says short-stature hybrids stand about a third to half the height of standard corn hybrids with an ear that sets about knee-high. The hybrids initially debuted in Mexico, and the company is now advancing the concept through their U.S. pipeline in three separate versions, which are traditional breeding, genetically engineered, and gene-edited. The company is making plans for U.S. farmers to get a look at the product in 2023 as Bayer works with a limited number of farmers. A broad commercial rollout is set for 2024. The idea behind creating the hybrids is plants that ideally use fewer resources and are easier to negotiate when in-crop applications of inputs are necessary. Shrinking the corn plant should improve stability and help it withstand extreme weather like high winds.
CDC says Extension Service Helping Rural America Get Vaccinated
The Centers for Disease Control is expressing gratitude to the nation’s Cooperative Extension Service for helping address COVID-19 vaccine hesitancy in rural America. Extension educators have worked to raise awareness about the importance of getting vaccinated against COVID-19. “Rural America continues to get hit hard by COVID, and the lives of families and communities continue to feel the impacts,” says Dr. Carrie Castille, director of the National Institute of Food and Agriculture. “Because our communities are faced with making important decisions about vaccinations, having a trusted, independent community agent to aid in decision making is essential.” Cooperative Extension agents and educators are well placed to have that discussion and provide objective educational information. Through an interagency agreement with the CDC and NIFA, Cooperative Extension units at land-grant universities across the nation received funding to launch the Cooperative Extension Immunization Teaching and Engagement initiative to address health disparities among rural and underserved communities.
Tuesday Watch List
Markets
Traders will return from the three-day weekend with new attention on the latest weather forecasts and keen to any news related to Ukraine. At 9 a.m. CST Tuesday, there is a report on U.S. consumer confidence in February, followed by USDA's weekly report of grain export inspections at 10 a.m. USDA's monthly cold storage report is set for 2 p.m.
Weather
A winter storm that started Sunday night across the Northern Plains expanded its scope a bit on Monday and will continue to do so on Tuesday. While the heaviest snows have already fallen, bands of moderate snow continue from the Northern Plains to the northern Midwest and a band of wintry mix will fill in this morning just to its south from northeastern Iowa through Lower Michigan. And farther south than that, widespread heavy rain and thunderstorms which may be severe across the Midsouth and Delta will expand the reach of the system farther. Flash flooding will also be a concern in those saturated soils across the Ohio and Tennessee Valleys.
Friday, February 18, 2022
ARC/PLC Signup Deadline is March 15
Producers who have yet to enroll in the Agriculture Risk Management or Price Loss Coverage programs for the 2022 crop year must do so by March 15. The USDA programs provide vital income support to farmers experiencing a substantial decline in crop prices or revenues. “The ARC and PLC programs provide critical financial protections to many American farmers,” says Zach Ducheneaux (DOO-shah-know), administrator of the Farm Service Agency. “As producers continue to weather a pandemic and new climate-induced disasters, these programs are even more important.” Producers can elect coverage and enroll in ARC-County or PLC, which are crop-by-crop, or ARC-individual, which is for the entire farm. Although election changes for 2022 are optional, producers must enroll through a signed contract each year. If producers miss the deadline, the election remains the same as the 2021 election for crops on the farm. Farmers have completed 54 percent of the expected 1.8 million contracts so far.
U.S. Biofuel Stresses Biofuel Successes in Testimony
U.S. biofuel industry backers told lawmakers that the nation’s renewable fuel mandates are good for farmers, national security, and the environment. The supporters defended the Renewable Fuel Standard as the Biden administration considers changes to the program. The program is good for the nation’s farmers, but the oil industry says the mandates are too expensive. “The RFS remains the nation’s most successful clean energy policy,” said Growth Energy CEO Emily Skor during the congressional hearing. “Let me be clear on this. There is no path to net-zero emissions by 2050 without biofuels.” Reuters says other advocates called the RFS “crucial support” for American farmers and it reduces the need for energy imports. The Environmental Protection Agency is reviewing the RFS and intends to announce potential changes to the program by May. “As much as the Biden administration dreams of all-electric vehicles, the reality is liquid fuels are here to stay,” says Senator Joni Ernst of Iowa.
Students Celebrate Agriculture and Leadership During FFA Week
More than 735,000 FFA members across the country will share the story of agriculture as part of National FFA Week. The week starts on Saturday, February 19, and culminates on Saturday, February 26. “National FFA Week is an important week for members across the country, as not only do we celebrate the organization, but we share the message of FFA and agriculture,” says National FFA Advisor Dr. James Woodard. “FFA chapters across the country celebrate agriculture while thanking their supporters.” Woodard also says FFA and agricultural education continue to play a key role in not only developing the next generation of leaders but also developing those who will be filling the ever-growing need in the talent pipeline. FFA members will share agriculture with fellow students and their communities while also giving back to their communities through service projects. The six national officers will also connect with chapters around the country.
U of Minnesota Building Precision Ag Research Complex
The University of Minnesota is planning a $220 million research complex near Austin, Minnesota, to study precision agriculture. The university says the goal is to put the state on the cutting edge of farm and food technology. Plans for the Future of Advanced Agricultural Research Minnesota (FAARM) center includes fields, research and innovation space, and workforce development efforts. “This will expand our vision and scope for the work we already do,” says Brian Buhr, Dean of the College of Food, Agricultural, and Natural Resources. Research at the complex will pursue scientific solutions to adapt and delve into artificial intelligence, robotics, and other technologies alongside a focus on “health intersections between people, animals, crops, plants, soil, water, and the environment.” The project already has a $60 million funding commitment from Hormel Foods and will look for a combination of state, public, and private funds to cover the rest of the cost. Development is expected to take five years.
Registration Information for the 2022 World Pork Expo
The World Pork Expo is back at the Iowa State Fairgrounds in Des Moines, June 8-10. The event’s 34th year is presented by the National Pork Producers Council. The World Pork Expo will draw thousands of producers and industry professionals for three days of networking, education, innovation, and free pork as well. “We’re delighted to welcome everyone back to World Pork Expo,” says NPPC President Jen Sorenson. “This year’s Expo has an exceptional lineup of programming, including educational seminars and luncheons.” People at the World Pork Expo venue will get the chance to explore more than 360,000 square feet of exhibition space. In previous years, over 700 vendor booths presented and displayed products in the trade show space. “We continue to be the world’s largest pork-specific trade show,” says Doug Fricke, Expo director of trade show marketing for NPPC. Registration information will soon be available online for those who plan to attend.
USDA Announces Reopening Schedule
Senior leadership in the USDA will be back in their offices on February 28. Keith Gray, associate administrator of the Risk Management Agency made the announcement during the Crop Insurance Industry’s Annual Convention. The Hagstrom Report says mid-level staff will be expected to return by March 28, and all staff will be moved in by May 27. “But we aren’t coming back in the traditional sense,” Gray says. “We’re going to be hybrid, largely remote.” How much time RMA employees spend in the office will also depend on local conditions. The office has been 100 percent telework, but Gray says working that way hasn’t slowed them down. “In some cases, remote work has improved our response time,” Gray says. “We are going to hold everyone accountable.” Ag Secretary Tom Vilsack says USDA will have a policy of maximum telework, which means they can work remotely eight out of every ten days.
Friday Watch List
Markets
A report on U.S. existing home sales in January is due out at 9 a.m. CST Friday, the same time as the January report of U.S. leading indicators. Traders will keep an eye on the latest weather forecasts and don't be surprised if trading in grains is a little jumpy Friday, ahead of the three-day weekend, while Russia's military remains a threat to Ukraine.
Weather
With the big winter storm almost out of the country this morning, the focus turns to a clipper system moving across the U.S.-Canada border. Precipitation with it is overall fairly light, but the winds with the system are strong. Even with the lighter snowfall amounts, everything will be blowing around, causing travel hazards and potential blizzard conditions. While most areas of the country have seen temperatures fall from where they were 24 hours ago, the clipper system is bringing along some warmer temperatures to portions of the Northern Plains.
Thursday, February 17, 2022
USTR Releases Annual Report on China's WTO Compliance
China failed to reach the Phase One Agreement commitments to purchase U.S. goods and services, including agricultural commodities. The U.S. Trade Representative's office revealed the data in a more than 70-page report Wednesday. The annual review states, "The reality is that this Agreement did not meaningfully address the more fundamental concerns that the United States has with China's state-led, non-market policies and practices and their harmful impact on the U.S. economy." While the report focused on China's World Trade Organization compliance, it covered agricultural trade. USTR says China's implementation of the agricultural commitments in the Phase One Agreement has been generally positive, however, there has been a notable lack of meaningful action in other areas, including agricultural biotechnology and a required risk assessment for the use of ractopamine in the production of beef and pork. And the report finds China remains a difficult and unpredictable market for U.S. agricultural exporters, largely because of inconsistent enforcement of regulations and selective intervention in the market by China’s regulatory authorities.
Dairy Groups: New FDA Commissioner Needs to Address Misuse of Dairy Labels
Dairy industry organizations urge the new Food and Drug Administration Commissioner to stop the mislabeling of imitation dairy foods. Edge Dairy Cooperative, The International Dairy Foods Association and the National Milk Producers Federation, all congratulated Dr. Robert Califf’s (kay-liff) on his confirmation this week. Califf is a cardiologist who served as the FDA commissioner in the last year of the Obama administration. During his nomination hearing, when asked about plant-based foods using dairy terms, Califf responded, “There is almost nothing more fundamental about safety than people understanding exactly what they're ingesting.” Edge Dairy Cooperative President Brody Stapel says, “The simple fact that the new commissioner has acknowledged that, is a big step in the right direction.” NMPF President and CEO Jim Mulhern stated, “We look forward to working with Dr. Califf as he resolves this long-standing, and growing, concern.” IDFA President and CEO Michael Dykes added, “IDFA and our member companies are hopeful for a more collaborative relationship with FDA on matters of food safety, food standards, labeling, and nutrition and health.”
NASDA Announces Priorities for the 2023 Farm Bill
State agriculture officials this week announced their priorities for the upcoming 2023 Farm Bill discussion. The National Association of State Departments of Agriculture will direct its policy advocacy efforts regarding the bill towards ten specific policy areas. At the hybrid 2022 NASDA Winter Policy Conference this week, members laid the foundation for those priorities. NASDA wants to focus its attention on agriculture research, animal disease, conservation and climate resiliency, cyber security and food safety. Other priorities include hemp, invasive species, local food systems, Specialty Crop Block Grants and trade promotion. NASDA CEO Ted McKinney says, “The next Farm Bill must remain unified, securing a commitment to American agriculture and the critical food and nutritional assistance programs for those who need it most.” McKinney adds that NASDA members are often the officials closest to farmers themselves. As co-regulators with the federal government, they are uniquely positioned to lead impact and direct policymaking solutions for the 2023 Farm Bill.
USDA: Ag Productivity Increased as Hours Worked Declined
Agricultural output in the United States nearly tripled between 1948 and 2017 even as the amount of labor hours-worked declined by more than 80 percent. USDA’s Economic Research Service says the opposing trends resulted in an increase in labor productivity growth in the U.S. farm sector. Labor productivity, calculated as average output per unit of labor input, is a popular measure for understanding economic growth. ERS estimates agricultural output per worker grew by 16 times from 1948 through 2017. At the same time, agricultural output per hour worked grew even faster, by 17 times, implying that average hours worked per worker declined. Labor productivity estimates can vary based on different ways labor is measured. One factor in the increased labor productivity is the quality of labor, measured by attributes such as age, gender, and the highest level of education a worker has reached. ERS researchers estimate that changes to farmworker attributes accounted for about 13 percent of growth in hourly-based annual labor productivity during the time studied.
Oceans May Rise One Foot By 2050 Along U.S. Coasts
The United States is expected to experience as much sea-level rise by the year 2050 as it witnessed in the previous hundred years. That's according to a NOAA-led report updating sea level increases for the United States. The Sea Level Rise Technical Report provides the most up-to-date projections for all U.S. states and territories by decade for the next 100 years and beyond. The report projects sea levels along the coastline will rise an additional 10-12 inches by 2050, with specific amounts varying regionally. At least two feet of sea-level rise is likely by 2100, but NOAA says reducing emissions now can lower future risk. NOAA Administrator Rick Spinrad says, “This is a global wake-up call and gives Americans the information needed to act now to best position ourselves for the future.” The report also finds that the sea level rise expected by 2050 will create a profound increase in the frequency of coastal flooding, even in the absence of storms or heavy rainfall.
National FFA and Syngenta partner for inaugural Executive in Residence
The National FFA Organization is partnering with Syngenta to lay the foundation for a national equity, diversity and inclusion strategy. The strategy will impact members, staff, leadership and directly influence the organization’s programs, services and events. Recognizing the importance of an Equity, Diversity & Inclusion strategy, National FFA partnered with Syngenta to develop the inaugural Executive in Residence program. Syngenta’s North America Diversity and Inclusion Lead Brandon Bell will serve as the executive in residence for organizational development and culture as a part of the partnership. Bell will help FFA create a framework to implement and measure the organization's ED&I goals. Bell has partnered with leaders to design, deliver, and implement equity, diversity, and inclusion interventions for a decade. National FFA CEO Scott Stump says, “We want to ensure our current and future members feel welcomed, and FFA is indeed a place for all to feel valued and contribute to our mission."
Thursday Watch List
Markets
USDA's weekly export sales report is due out at 7:30 a.m. CST Thursday, along with weekly jobless claims, January housing starts and an update of the U.S. Drought Monitor. The Energy Department's report on natural gas storage is due out at 9:30 a.m. The latest weather forecasts and any news regarding Ukraine continue to get traders' attention.
Weather
A strong storm system in the southeastern Plains will move northeast throughout the day on Thursday. Very warm and moist air ahead of the system will feed heavy rainfall rates that could induce flooding near and just north of the Ohio River and colder temperatures will turn the northern edge of that band into a mix of freezing rain, sleet, and snow. To the south of the storm track, conditions will favor potential for severe storms with the greatest threat centered around Mississippi and western Tennessee that includes strong wind gusts and tornadoes.
Wednesday, February 16, 2022
USDA Trade Mission Underway in Dubai
Grain Dust Explosion Incidents Decreased in 2021
The annual report recording nationwide grain dust bin explosions reported seven incidents in 2021, down from eight in 2020. Kingsly Ambrose, Purdue University associate professor and author of the report, says that despite the decrease in explosions from the previous year, one fatality and five injuries were reported. The ten-year average for explosions stands at 8.0, down from 8.1 in 2020. The explosions occurred in one feed mill, one ethanol plant, one grain mill and four grain elevators. The probable ignition sources were identified as one case of a fire, two incidences of smoldering grain, while four cases were from unknown sources. The dust explosions occurred in six different states, with two occurring in Minnesota, one in Georgia, one in Idaho, one in Indiana, one in Iowa and one in Oregon. Ambrose says keeping good maintenance of equipment to ensure proper working order and properly training workers are measures to help eliminate grain dust explosions.
Center for Rural Affairs Applauds Recent Crop Insurance Improvements
The Center for Rural Affairs applauds expansions to federal crop insurance recently announced by USDA’s Risk Management Agency. The changes signal encouraging opportunities for farmers practicing conservation on their operations, according to the organization. This month, RMA announced it will be offering the Pandemic Cover Crop Program for a second year. The program offers a $5 per acre discount on a producer’s crop insurance premium if they planted a qualifying cover crop ahead of their 2022 crop. If a cover crop variety is reportable to the Farm Service Agency, it is eligible for the program. To receive the benefit, producers must have a Report of Acreage form filed for their cover crops by March 15, also the crop insurance sales closing date for most spring crops. Kate Hansen with the Center for Rural Affairs says, "Producers across the country are implementing new conservation practices to better steward their land,” adding, “These recent developments from RMA to support these efforts are encouraging.”
USDA extends due date for National Agricultural Classification Survey
USDA’s National Agricultural Statistics Service wants recipients of the National Agricultural Classification Survey to know that there is still time to respond. Mailed last December to more than a million potential U.S. agricultural producers, the survey collects data on agricultural activity and basic farm information. The data will be used to build a survey recipient list for the 2022 Census of Agriculture. Response to the survey is required by federal law for all who receive the questionnaire, even if the recipient is not an active farmer or rancher. Questionnaires can be completed securely online at agcounts.usda.gov, by mail or phone. This week, USDA NASS extended the response deadline to March 7. Filling out the NACS is one of the most important steps to determining who should receive the Census of Agriculture questionnaire this fall, according to USDA. All information reported to USDA NASS is kept confidential, protected by federal law.
Southwest Megadrought Region’s Driest in at 1,200
Culvers Celebrates National FFA Week with Essay Contest
As National FFA Week approaches, Culver’s is celebrating its relationship with the organization of future agriculture leaders by launching its eighth annual FFA Essay Contest. Culver's longstanding relationship with FFA is part of its Thank You Farmers Project, an initiative that aims to celebrate and advocate for the role of farming in creating a more resilient and sustainable world. Three winners will be selected, earning prizes of $7,500, $5,000 and $2,500 for their FFA chapters to pursue additional educational projects and initiatives. Culver's has awarded over $100,000 in prizes to contest finalists since 2015. This year's prompt is: Agriculture impacts the world in so many ways, Share three ways the industry is making a positive difference that you want people to know about. Written essays, 1,000 words or less, and videos, five minutes or less, will be accepted at culvers.com/essaycontest until the deadline of April 11, 2022. National FFA Week begins this Saturday.
Wednesday Watch List
Markets
A report on January U.S. retail sales is due out at 7:30 a.m. CST Wednesday, followed by the Federal Reserve's report on industrial production at 8:15 a.m. At 9:30 a.m., the U.S. Energy Department will update its weekly inventory report, including ethanol production. At 1:30 p.m., the Federal Reserve releases its minutes from the latest FOMC meeting. Traders will continue to watch over the latest weather forecasts and show interest in any news regarding Ukraine.
Weather
A frontal boundary draped from the Southern Plains into the Midwest is going to become active later on Wednesday with rain showers popping up. Colder air working in behind the front will change the northern edge of the showers to a wintry mix of freezing rain, sleet, and snow. Moderate to heavy rain continues through Thursday and could cause some flooding in spots, mostly across the southern Midwest into the eastern Great Lakes. Bouts of severe weather will also be possible over the next couple of days across the Southern Plains, Midsouth, and Gulf Coast regions
Tuesday, February 15, 2022
USDA Releases Resource Guide for Rural Entrepreneurs
The Department of Agriculture Monday unveiled a resource guide to help rural businesses grow and expand the rural economy. The guide features information on how rural entrepreneurs can use USDA and other federal programs to access financing and other assistance to help start and expand their businesses. Rural Development Undersecretary Xochitl (SOH-cheel) Torres Small says the guide will "enhance American competitiveness around the world to meet the challenges of the 21st century by equipping rural entrepreneurs with the tools they need to succeed." The guide includes tools to help rural businesses expand access to capital, create value-added agriculture products, access high-speed internet and cut energy costs. The guide also includes sources on access to health care resources, workforce development and training opportunities. Finally, the guide features firsthand stories from Rural Development customers on ways USDA programs and services have helped them start or expand businesses. The guide is available on USDA’s Rural Development website, rd.usda.gov.
Ag Bankers Optimistic For 2022
Farmland values continued to increase rapidly through the end of 2021. Alongside sustained strength in farm income and credit conditions, the value of all types of farmland in the Tenth Federal Reserve Bank District was more than 20 percent higher than a year ago. Lenders reported a mostly favorable outlook for agriculture in the district but cited the rise in input costs as a risk to the sector. Even with uncertainty around input costs, lenders expect favorable economic conditions to support farm finances and lead to further gains in farmland values in 2022. The possibility of weaker agricultural income and higher interest rates remain risks for farmland markets. Despite the risks, the agricultural sector appears to be well-positioned for the year ahead, supported by strong balance sheets, high commodity prices and sharp gains in farmland values. The Tenth District includes parts of Missouri and New Mexico, and all of Colorado, Kansas, Nebraska, Oklahoma and Wyoming.
Survey Suggests U.S. Producers to Plant 12 Million Acres of Cotton in 2022
U.S. cotton producers intend to plant 12 million cotton acres this spring, up 7.3 percent from 2021, according to the National Cotton Council. NCC’s Annual Early Season Planting Intentions Survey shows upland cotton intentions are 11.9 million acres, up 7.1 percent from 2021. Extra-long staple cotton intentions of 158,000 acres represent a 24.8 percent increase. The NCC questionnaire, mailed in mid-December 2021 to producers across the 17-state Cotton Belt, asked producers for the number of acres devoted to cotton and other crops in 2021 and the acres planned for the coming season. Survey responses were collected through mid-January. The detailed survey results were announced during the 2022 National Cotton Council Annual Meeting. Although cotton prices are higher than in recent years, higher input prices and supply chain disruptions have resulted in significant increases in production costs for 2022. As a result, many producers continue to face difficult economic conditions heading into 2022.
AEM Releases January 2022 Equipment Sales Numbers
Overall ag tractor sales in the U.S. and Canada continued rising into January 2022, while sales of combine harvesters slowed for the month. The Association of Equipment Manufacturers recently released its monthly sales report for farm equipment. The report shows U.S. total farm tractor sales gained 1.5 percent for the month of January compared to 2021, while U.S. combine sales for the month fell 41.4 percent to 205 units sold. In Canada, sales of tractors for the month of January were up 6.3 percent overall. Combine harvesters were also down in Canada, falling 30 percent to 49 units sold. The data continues the sales trend that started in June of 202 and reliably remained above the five-year average since. AEM’s Curt Blades says, “The strength of ag markets and farmers seeing the value in the new technologies on offer is driving demand.” However, Blades adds, lingering effects of the supply chain remain a concern
US Annual Cocoa and Choleate Imports Valued at $5 billion
The United States annually imports more than $5 billion worth of cocoa and chocolate products, according to new data from USDA's Economic Research Service. With cocoa beans only grown abroad, trade is critical to meet the U.S. consumer’s fondness for cocoa-based treats. Imported shipments of chocolate and other food preparations containing cocoa were the largest share of imports and were valued at almost $2.8 billion a year between 2017 and 2021. The import value of cocoa beans averaged more than $1.1 billion annually over the five-year period. Cocoa butter shipments, principally supplied by Indonesia and Malaysia, were valued at $576 million annually, while supplies of cocoa paste averaged about $293 million a year. Cocoa beans, the raw seeds from the cacao tree that are processed into derivative products, were imported mostly from the Ivory Coast, Ecuador, and Ghana. The United States also exports chocolate and cocoa products to Canada and Mexico.
Russia-Ukraine Issue Driving Fuel Prices Higher
For the seventh straight week, the nation's average gas price climbed, up 4.6 cents from a week ago to $3.47 per gallon. The national average is up 16.5 cents from a month ago and 97.2 cents per gallon higher than a year ago. The national average price of diesel increased 8.9 cents in the last week to $3.87 per gallon, the highest since July 2014. The jump in gasoline prices continues as oil prices continue to push higher, reaching $94 per barrel last week on continued concern over the possible imminent threat that Russia may invade Ukraine. GasBuddy’s Patrick De Haan says, “I see no other potentials in the short term but additional price increases unless Russia does an about-face on Ukraine.” Beyond that, seasonal issues will push prices further higher, including the multi-month transition to summer gasoline. U.S. retail gasoline demand rose last week as stations refueled after major winter storms boosted demand.
Tuesday Watch List
Markets
The U.S. Labor Department's January reading of producer prices will be out at 7:30 a.m. CST Tuesday and will probably repeat inflation concerns. The National Oilseeds Processors Association will have its soybean crush report for January later Tuesday morning and another big total is expected. USDA's Livestock, Dairy and Poultry Outlook is also due out Tuesday. Traders will keep an eye on the latest weather forecasts and any news regarding Ukraine.
Weather
A clipper system will move through Canada Tuesday, bringing its cold front through much of the Plains and into the Midwest while a storm system builds in the Southwest. But before the weather turns nasty on Wednesday, winds will increase across the Plains and portions of the Midwest. The increased winds pose a fire risk for areas that remain rather dry.
Monday, February 14, 2022
Ag Groups Disappointed in Gray Wolf Decision
Economist Sees Good Things Ahead for Farm Economy
A Wells Fargo economist predicted a rosy future ahead for American commodities during the next several years. Michael Swanson says the only thing that could seriously derail that prediction is the weather. The Hagstrom Report says Swanson spoke at the Crop Insurance and Reinsurance Bureau’s annual meeting. He says, “Life is good now, and the prices should remain high up to 2025.” Swanson did say that fertilizer prices aren’t sustainable at their current highs. The economist also says that farmers have to be disciplined in what they’re paying to rent land and not agree to rents so high that they can’t make a profit. The value of U.S. farmland has risen from $1 trillion in 2020 to $2.7 trillion this year. As far as the overall economy, Swanson says it’s “very, very strong.” If interest rates rise to 3.5 percent and inflation drops, businesses should be able to make adjustments.
Ag Groups Sue EPA Over Chlorpyrifos
A group of U.S. agricultural organizations had filed a lawsuit against the Environmental Protection Agency over chlorpyrifos (Klor-PEER-ah-fahs). DTN says the 21 groups want the agency’s pending ban on the product to be halted and eventually revoked. The lawsuit was filed as the EPA will finalize its rule revoking the food tolerances for the insecticide on February 28. That will effectively ban U.S. farmers from legally using the product. The rule was issued by the Biden EPA in August 2021. The ag groups filed a series of petitions asking the judge to issue a stay halting the EPA’s pending ban until the lawsuit can be reviewed. The lawsuit itself asks the judge to vacate the EPA’s rule revoking food residue tolerances based on the harm to agriculture and the EPA’s history of re-registering and approving the insecticide. This is the second attempt by ag groups to halt the EPA’s final rule banning chlorpyrifos.
Crop Insurance Premium Benefit Available for Cover Crops
Producers who have coverage under most crop insurance policies are eligible for a premium benefit from the USDA if they planted cover crops during the 2022 crop year. Producers must report their cover crop acreage by March 15 if they want to receive the benefit from this year’s Pandemic Cover Crop Program. PCCP helps farmers maintain their cover crop systems despite the financial challenges posed by COVID-19. “Cultivating cover crops requires a sustained, long-term investment, and the economic challenges of the pandemic made it financially challenging for many producers to maintain cover crop systems,” says RMA Administrator Marcia Bunger. “Producers use cover crops for a variety of agronomic benefits, and this program will reduce producers’ overall premium bill to help ensure they can continue this climate-smart agricultural practice.” PCCP was first offered in 2021, and producers with crop insurance received $59.5 million in premium subsidies for 12.2 million acres of cover crops.
American Lamb Industry Evaluating Carbon Footprint
The American Lamb Board is working with Michigan State University to evaluate the environmental footprint of the U.S. sheep industry. The goal is to get accurate and robust data to contribute to this important issue. The initial focus of the study defines a comprehensive model of greenhouse gas emissions for the diverse array of U.S. sheep production systems, including range, farm flock, pasture, intensive, and feedlot. MSU will conduct a partial life cycle analysis of lamb production in these types of operations to quantify GHG emissions. The American lamb industry entered the spotlight when a 2011 Environmental Working Group Study said lamb is one of the largest contributors of GHG emissions. “It is extremely important for our industry to identify and evaluate our role in GHG emissions,” says Lamb Board Chair Peter Comino of Wyoming. “Accurate data is the basis for improvement strategies and providing factual information to consumers and the media.”
Wheat and Soybean Export Sales Rise
The USDA says export sales of wheat and soybeans rose while corn sales declined during the week ending on February 3. Wheat sales that week totaled 84,800 metric tons, up 48 percent compared to the previous week. That number was still down 75 percent from the prior four-week average. The Philippines was the top buyer at 34,600 metric tons, while Mexico finished second at 33,100 tons. Weekly exports hit almost 381,000 tons, which was one percent lower than the prior week. Soybean sales rose 46 percent to 1.6 million metric tons during the week, a gain of 81 percent from the previous four-week average. Unknown countries bought 804,000 metric tons and China purchased 298,000 tons. Weekly exports dropped one percent to 1.3 million tons. Corn sales dropped to 589,000 metric tons, 50 percent lower than the previous week and 43 percent under the average. Mexico bought 370,000 metric tons and Japan purchased 347,500 tons.
Monday Watch List
Markets
Traders will be watching for any change in the Ukrainian situation over the weekend and early Monday, along with the latest weather forecasts. USDA's weekly grain export inspections report is due out at 10 a.m. CST and is the only official report on Valentine's Day.
Weather
Areas east of the Rockies will find rather quiet conditions Monday but a storm moving into the Pacific Northwest will make for some big changes throughout the week. Most notably, heavier precipitation will develop across the Southeastern Plains up through the Northeast later this week.
Friday, February 11, 2022
2021 Beef Exports Shatter Records
American beef exports shattered previous volume and value records in 2021, surpassing $10 billion for the first time. Analysis from the U.S. Meat Export Federation shows pork exports finishing slightly below the record level of 2020 but setting a new value record, surpassing $8 billion for the first time. December beef exports totaled almost 125,000 metric tons, up one percent from last year, while value jumped 33 percent higher to $992 million. These results pushed the 2021 total to 1.44 million metric tons. Beef exports to Korea, Japan, China, and Hong Kong each exceeded $2 billion, setting new volume and value records. December pork exports dropped 17 percent from 2020, finishing at 215,900 metric tons. The value was 12 percent lower at $604 million. For the year, pork export volume hit 2.92 million metric tons, two percent lower than the 2020 record. However, the export value did rise five percent higher to a record $8.11 billion.
Administration Considering New Tariffs on China Over Phase One Deal
The Biden administration is looking at the possibility of new tariffs on China if they can’t persuade Beijing to live up to its failed commitments under the Phase One trade deal. Reuters says the administration is looking at other possibilities, including a closer working relationship with allies to present a united front against China. Myron Brilliant, the U.S. Chamber of Commerce’s head of international affairs, says the goal would be to find ways to level the playing field for international firms that deal with China. U.S. trade data shows that China came up well short of its required purchases under the phase one deal, meeting only 60 percent of its total purchasing goals. China’s Commerce Ministry says the U.S. should “cancel tariffs on China to create a favorable environment for trade.” Brilliant says the Chamber supports talks with China but also says there are vehicles the administration can use to take action.
Ethanol Production Hits Four-Month Low
The Energy Information Administration says ethanol production plunged to its lowest level in four months during the week ending February 4. Production dropped under one million barrels a day, finishing the week with an average of 994,000 barrels. That’s down from 1.041 million barrels a day during the previous week and the lowest level since the week ending on October 1, 2021. The nation’s largest-producing region is the Midwest, where output dropped to an average of 939,000 barrels a day from the 981,000 during the prior week. That’s the lowest production level in the Midwest since last October. Gulf Coast production declined by 20,000 barrels a day, while the Rocky Mountain region stayed steady at 15,000 barrels a day. The East Coast region was the only one to increase, averaging 12,000 barrels a day, up from 11,000 the previous week. Ethanol inventories during the week ending on February 4 declined to 24.79 million barrels.
Applications Open for the Voices of the Future Program
The American Soybean Association is accepting applications for the Valent Ag Voices of the Future Program. The program is July 11-14 and runs in conjunction with the summer ASA Board Meeting and Soy Issues Forum in Washington, D.C. The Ag Voices of the Future Program is for students interested in improving their understanding of major agricultural policy issues, the importance of advocacy, and careers that can impact agricultural policy. The class size is limited, and students must be at least 18 years old by July 11 to apply. Two students from this year’s program will also have an opportunity for a $1,600 academic scholarship, complimentary registration, including the hotel stay, to the Agriculture Future of America Leadership Conference, and up to $500 reimbursement for travel expenses to the AFA. To apply for the program and be considered for a scholarship to the AFA Leaders Conference, visit the ASA website for information.
RIPE Opportunity for Farmers on Climate Change
The conversation is growing about American agriculture’s role in mitigating climate change. The nonprofit Rural Investment to Protect our Environment offers producers a way to lead on environmental sustainability while boosting their bottom line. Rather than waiting to see what takes place, farmers and ranchers can take part in developing and advancing the RIPE 100 program. It’s a proposed bipartisan climate policy that would benefit producers and the public. “There’s a lot of talk about how to get farmers and ranchers involved in climate change mitigation,” says RIPE Board President and farmer Curt Mether. “I support RIPE because it offers a voluntary solution with a good incentive for participating.” The research-backed RIPE 100 plan will fairly compensate producers for the environmental value they provide through stewardship practices. RIPE 100 includes $100 per acre or animal unit payments for carbon sequestration and several other environmental practices. More information is at RIPEroadmap.org.
Deadline Extended for Dairy Sustainability Awards Nominations
For over ten years, the U.S. Dairy Sustainability Awards program has celebrated dairy farms, businesses, and partnerships for their dedication to advancing sustainability across the industry. The nominations period for the 2022 U.S. Dairy Sustainability Awards has been extended to March 4. The farmer-founded Innovation Center for U.S. Dairy launched the awards to honor exceptional farms, businesses, and partnerships for their socially responsible, economically viable, and environmentally sound practices and technologies that have a broad and positive impact. “The Sustainability Award winners epitomize the best of dairy sustainability and ingenuity, providing useful case studies for the dairy community as it moves forward to meet industrywide commitments,” says Barbara O’Brien, President and CEO of Dairy Management Inc. and the Innovation Center for U.S. Dairy. Award submissions can be made at usdairy.com, and there is no fee to enter. All farms, companies, and organizations involved in the dairy industry are eligible to submit nominations.
Friday Watch List
Markets
At 9 a.m. CST Friday, the University of Michigan's early index of consumer sentiment for February will be posted, the only official report of the day. Traders continue to monitor the latest weather forecasts, watch for any news of export sales and keep an eye on events surrounding Ukraine.
Weather
A clipper system moving along the U.S.-Canada border Friday has its cold front dropping south through the Northern Plains and Upper Midwest Friday morning. The front will continue southeast throughout the day with falling temperatures in the Plains and rest of the Midwest. Showers will remain fairly spotty with the system and a mix of rain and snow. Some breezy winds have developed behind the front as well and continue across the Northern Plains and Upper Midwest through the afternoon.
Thursday, February 10, 2022
USDA Released February WASDE Report
The latest World Agriculture Supply and Demand report largely focused on global market conditions. The Department of Agriculture noted weather concerns in South America with lower soybean harvest projections for Argentina and Brazil. This month’s U.S. soybean outlook projects increased soybean crush and lower ending stocks. Soybean crush is forecast at 2.2 billion bushels, up 25 million from last month on favorable crush margins. The U.S. season-average soybean price for 2021/22 is forecast at $13.00 per bushel, up 40 cents from last month, partly reflecting the impact of drought in South America. This month’s U.S. corn outlook is for higher production, greater food, seed, and industrial use, lower exports, and larger ending stocks. The season-average corn price received by producers was unchanged at $5.45 per bushel. The outlook for U.S. wheat this month is for stable supplies, lower domestic use, reduced exports, and higher ending stocks. The projected season-average farm price increased $0.15 per bushel to $7.30.
APHIS Announces Final Strategic Framework for Enhancing Surveillance for SARS-CoV-2
USDA’s Animal and Plant Health Inspection Service Wednesday announced the final Strategic Framework outlining how the Agency will advance surveillance of SARS-CoV-2. USDA says early detection and response to pathogens with zoonotic potential while still in animals is essential in limiting or preventing human outbreaks. Additionally, the Agency has launched a new website to help stakeholders and the public stay up to date on the Agency’s broad array of ongoing One Health initiatives and COVID-19 surveillance projects. These projects are funded by the $300 million provided by the American Rescue Plan Act. In August 2021, APHIS announced its proposed Strategic Framework to guide surveillance for emerging and zoonotic diseases in susceptible animals and build an early warning system to alert public health partners to potential threats. APHIS Administrator Kevin Shea says, “The final Strategic Framework builds on APHIS’ proven expertise preparing for and responding to foreign animal disease outbreaks.”
USDA Data Tracks Fertilizer Price Increases
Farm Bankruptcies Down Dramatically in 2021
A new Market Intel analysis from the American Farm Bureau Federation finds Chapter 12 farm bankruptcy filings were down 50 percent in 2021. The number of Chapter 12 filings in 2021 is the lowest in the last decade, and this is the first time in at least ten years that there were fewer than 300 filings. For 2021, 276 Chapter 12 bankruptcies were filed across the nation. The decrease in bankruptcy filings is a noteworthy shift, according to Farm Bureau, given the significant increases in the number of bankruptcies over the previous three years. However, the analysis notes that returns to farm operators have been incredibly volatile over the last decade, ranging from $58.6 billion to $134.5 billion between 2012 and 2021. USDA projects 2022 returns at $95.2 billion. And, while the last year has brought higher commodity prices for some, it has certainly brought higher input costs for all.
Growth Energy to White House: “Maximize Biofuels to Ease the Pain at the Pump”
Growth Energy CEO Emily Skor sent a letter to President Biden this week urging him to turn to higher biofuel blends to combat high gas prices. At a February 4th press conference, White House Press Secretary Jen Psaki said that the administration “will continue to look at options that can be done to lower gas prices for the American people.” Skor urged the president to “maximize biofuels to ease the pain at the pump” by working with his administration to restore the year-round sale of E15. Skor writes, “Biofuels like ethanol should be an essential part of our nation’s solution to reduce our dependence on foreign oil.” The Supreme Court refused to hear an appeal from biofuel groups last month to reinstate year-round E-15. Available at more than 2,500 gas stations across 31 states, E15 is approved for more than 96 percent of light-duty vehicles on the road and sells for upwards of $0.10 less per gallon compared to conventional gasoline.
EIA Forecast: Brent Crude at $88 per barrel First Half of 2022
The U.S. Energy Information Administration forecasts that the Brent crude oil price will average $90 per barrel in February and nearly $88 per barrel for the first half of this year. In its February Short-Term Energy Outlook, EIA estimates that commercial oil inventories fell to their lowest levels since mid-2014, contributing to current high prices. There are several factors at play. EIA Acting Administrator Steve Nalley says, “Market concerns about oil production disruptions, supply chain vulnerabilities, and uncertainties around how central banks may react to combat inflation all contribute to a highly unpredictable environment for oil and petroleum product prices.” The average price for regular-grade gasoline was $3.31 per gallon in January, nearly a dollar higher than one year ago, largely because of higher oil prices. EIA expects gasoline prices will average $3.24 per gallon in 2022, before dropping below $3.00 per gallon in the last quarter of the year.
Thursday Watch List
Markets
USDA's weekly exports sales report is due out at 7:30 a.m. CST, the same time as weekly jobless claims, the Labor Department's consumer price index for January and an update of the U.S. Drought Monitor. The Energy Department's weekly report of natural gas storage is set for 9:30 a.m., followed by a Treasury report on the federal budget for January at 1 p.m. Traders continue to keep tabs on the latest weather forecasts.
Weather
A clipper system will bring a band of moderate to heavy snow across the northern stretches of the country Thursday and Thursday night with more isolated to scattered showers to the rest of the Northern Plains and Corn Belt. The cold front to the system will push south through the northern tier of the country overnight, with much colder temperatures setting up in the Midwest over the weekend. Some showers will develop behind this boundary across the High Plains late tonight and Friday, but amounts will be light. Winds will be strong at times across the Northern Plains as well.
Wednesday, February 9, 2022
Agricultural Exports Shattered Records in 2021
U.S. Agriculture posted its highest annual export levels ever recorded in 2021. The final 2021 trade data published by the Department of Commerce Tuesday shows that exports of U.S. farm and food products totaled $177 billion. The total beat the 2020 figure by 18 percent and eclipsed the previous record set in 2014, by 14.6 percent. Agriculture Secretary Tom Vilsack says, "These record-breaking trade numbers demonstrate that U.S. agriculture is incredibly resilient." The United States' top ten export markets saw gains in 2021, with six of the ten – China, Mexico, Canada, South Korea, the Philippines and Colombia – setting new records. Worldwide exports of many U.S. products, including soybeans, corn, beef, pork, dairy, distillers grains and pet food, also reached all-time highs. China remained the top export destination, with a record $33 billion in purchases, up 25 percent from 2020, while Mexico inched ahead of Canada to capture the number two position with a record $25.5 billion, up 39 percent from last year.
USDA Extends Dairy Margin Coverage Program Deadline
The Department of Agriculture Tuesday extended the deadline to enroll in Dairy Margin Coverage and Supplemental Dairy Margin Coverage for 2022. The deadline to apply for coverage is now March 25, 2022. USDA’s Farm Service Agency opened signup in December 2021 to help producers manage economic risk brought on by milk price and feed cost disparities. FSA Administrator Zach Ducheneaux (DOO-shu-know) says, “We are encouraging dairy operations to take advantage of the extended deadline and join the 8,900 operations that have already enrolled for 2022 coverage.” Enrollment for 2022 DMC is currently at 55 percent of the 2021 program year enrollment. Producers who enrolled in DMC for 2021 received margin payments each month, January through November, for a total of $1.2 billion, with an average payment of $60,275 per operation. Supplemental DMC coverage is applicable to calendar years 2021, 2022 and 2023. For more information, dairy producers should contact their local USDA Service Center.
Senator Marshall Expresses Concerns Over USDA Climate Initiative
Bipartisan Legislation to Increase Access to Rural Broadband
USDA Seeks Nominations for Members to Science and Research Advisory Board
Nation's Largest Trout Producer to Feed Benson Hill Soybeans
Benson Hill recently announced a partnership with Riverence, the largest land-based producer of steelhead and rainbow trout in the U.S., to feed the fish with Benson Hill soy ingredients. Benson Hill says the move will enhance the sustainability of aquaculture supply chains. The company's proprietary soybean varieties expressing Ultra-High Protein and low anti-nutrient levels reduce the need for processing steps to concentrate protein levels. The ingredients derived from Ultra-High Protein varieties demonstrate equivalent performance to a Soy Protein Concentrate-based diet in salmon and trout, as measured by Feed Conversion Ratio. Benson Hill's proprietary ingredients will be incorporated into the aquaculture diets manufactured by Riverence's preferred supplier Rangen, a brand of Wilbur-Ellis Nutrition. Aquaculture provides over half of the seafood for human consumption globally and is the fastest-growing food production sector. According to the Food and Agriculture Organization, aquaculture is expected to overtake capture production in 2027 and account for 52 percent of all fish production for all uses by 2030.
Wednesday Watch List
Markets
The U.S. Energy Department's weekly inventory report is due out at 9:30 a.m. CST with attention on ethanol production and an inventory level that has been rising lately. At 11 a.m., USDA releases its February WASDE report and traders will be eager to see new estimates of South American crops. If there are no big surprises, traders will likely go back to watching the latest weather forecasts.
Weather
A clipper moving through Canada will be close enough to produce some isolated showers across the Midwest on Wednesday. Another disturbance will do the same going through the Northern then Central Plains. Precipitation amounts will be light in both cases while temperatures remain warm for this time of year.
Tuesday, February 8, 2022
USDA to Invest $1 Billion in Climate Smart Commodities
The Department of Agriculture Monday announced $1 billion in partnerships to support America’s climate-smart farmers, ranchers and forest landowners. The new Partnerships for Climate-Smart Commodities opportunity will finance pilot projects that create market opportunities for U.S. agricultural and forestry products that use climate-smart practices and include innovative, cost-effective ways to measure and verify greenhouse gas benefits. Agriculture Secretary Tom Vilsack made the announcement during a stop at Lincoln University in Jefferson City, Missouri. Vilsack says, “USDA will provide targeted funding to meet national and global demand and expand market opportunities for climate-smart commodities to increase the competitive advantage of American producers.” Funding will be provided to partners through USDA’s Commodity Credit Corporation for pilot projects to provide incentives. USDA is accepting project applications for fiscal year 2022. A range of public and private entities may apply, and the primary applicant must be an entity, not an individual. More information is available at USDA.gov.
FACA Applauds USDA Investment in Climate-Smart Pilot Projects
The Food and Agriculture Climate Alliance strongly commends USDA for advancing a voluntary, incentive-based approach to deploy climate-smart practices on working lands through its Partnership for Climate-Smart Commodities. Announced Monday, members of the Alliance welcome USDA’s plan to partner with farmers, ranchers, forest owners and nongovernmental organizations through pilot projects. The alliance stressed in previous comments submitted to USDA the importance of building flexibility into the initiative to acknowledge that agriculture and forestry look very different in different regions, and USDA’s plan appears to welcome a diversity of practices and approaches. The plan also includes other priorities of the alliance, including an effort for engaging and enrolling Black, Indigenous, People of Color and small farmers, ranchers, and forest owners in the project. The alliance says in a news release, “We share Secretary Tom Vilsack’s optimism that this approach will support climate-smart commodities while unlocking new market opportunities.” The Food and Agriculture Climate Alliance is comprised of more than 80 member organizations.
NASDA Asks EPA to Suspend Action on WOTUS Rulemaking
As many farm and agriculture groups submitted comments on the EPA's proposed changes to the Waters of the U.S. rule, The National Association of State Departments of Agriculture asked the EPA to suspend the rule-making process. The comment period on the proposal by the Environmental Protection Agency closed Monday. In NASDA’s comments sent to EPA, CEO Ted McKinney urged the EPA and the Army Corps to suspend further action until guidance from the Supreme Court is provided. McKinney stated, "Unfortunately, the proposed rule will return us to the ambiguity of past regulation as well as the federal overreach that ignored the role and expertise of state partners.” NASDA calls the change “unacceptable,” and urges the EPA and the Corps to reconsider the clarity and the undeniably appropriate level of protection offered by the Navigable Waters Protection Rule. In addition to the submitted comments, NASDA members, farmers, ranchers and the agriculture industry have repeatedly advocated for clarity and reasonableness in the regulatory definition of WOTUS.
Imported Seafood Products have the Most Pathogen/Toxin Violations
USDA’s Economic Research Service says about 70 percent of pathogen violations came from two sources over the last 20 years. Food imported into the United States from other countries may contain pathogens such as bacteria or toxins, which are mostly produced by microorganisms. From 2002 to 2019, a total of 22,350 pathogen violations occurred from imported foods, and a majority from fishery and seafood products and the spices industry. Fishery and seafood products had 9,857 pathogen violations over this period, accounting for 44.1 percent of the total refused imports. This category was followed by spices, flavors, and salts, which had 5,886 violations, or 26.3 percent of the total. Cheese and cheese products accounted for 7.1 percent of the total, followed by fruits and fruit products with 6.2 percent, nuts and edible seeds with 5.1 percent, and vegetable products with 4.1 percent. In total, the top six food industries accounted for 93 percent of the total pathogen violations over the period.
USDA Announces Four New Members of the National Organic Standards Board
The Department of Agriculture last week announced the appointment of four new members to the National Organic Standards Board. The board includes 15 volunteer members representing the organic community. The new members will serve five-year terms, through January 2027. Organic farmer Elizabeth Graznak (Graze-nack) of Missouri joins the board on the environmental protection and resource conservation seat. USDA Appointed Allison Johnson of the Natural Resources Defense Council to a public interest or consumer interest group seat. Meanwhile, Dr. Dilip Nandwana (nand-wand-dee) of Tennessee State University will serve on the scientist seat of the board, and Javier Zamora of California’s JSM Organics takes a seat on the board as an organic farmer. The National Organic Standards Board is a Federal Advisory Board established under the Organic Foods Production Act of 1990. The board assists in developing standards for substances used in organic production and advises the Secretary on aspects of the National Organic Program.
Fuel Prices Spike as Oil Surge Continues
For the sixth straight week, the nation’s average gas price is up, rising eight cents from a week ago and stands at $3.42 per gallon. The national average is up 12.3 cents from a month ago and 97.5 cents per gallon higher than a year ago. The national average price of diesel increased 8.3 cents in the last week and stands at $3.78 per gallon, the highest since September 2014. Gas prices saw their sharpest rise in months last week as oil surged to $93 per barrel, on continued concerns over Russia invading Ukraine and that there won’t be enough supply to meet demand come this summer. GasBuddy’s Patrick De Haan says, “Motorists should expect even more price increases, with the larger jumps coming later this spring as a confluence of seasonal factors and the potential flare up in geopolitical tensions.” De Haan adds the national average could be pushed to record territory by the start of the summer driving season.
Monday, February 7, 2022
Ocean Shipping Reform Act Introduced in Senate
Minnesota Democrat Amy Klobuchar and South Dakota Republican John Thune introduced the Ocean Shipping Reform Act into the Senate last week. It’s the Senate’s response to the House version that passed by a wide bipartisan vote in December. Farm groups and other industry stakeholders are complaining that ships coming to the West Coast from Asia are going back to China and its neighbors empty. Those ships are heading back to Asia to bring more goods to get sold in the U.S and not picking up products they would normally take to Asian customers. A trade association executive told the Hagstrom Report that the Senate bill in some instances is stronger than the House bill. However, some aspects are weaker, but if it gets passed, it will help improve the overall supply chain situation. Klobuchar says the bill would “prohibit ocean carriers from unreasonably declining opportunities for U.S. exports, as determined by the Federal Maritime Commission in a new required rulemaking.”