As of March 1, there were 72.2 million hogs and pigs on U.S. farms, down two percent from March 2021 and down three percent from December 2021, according to the Quarterly Hogs and Pigs report. USDA’s National Agricultural Statistics Service released the report Wednesday. The report found that of the 72.2 million hogs and pigs, 66.1 million were market hogs, while 6.1 million were kept for breeding. Between December 2021 and February 2022, 31.7 million pigs were weaned on U.S. farms, down one percent from the same period one year earlier. For the quarter, U.S. hog and pig producers weaned an average of 10.95 pigs per litter. U.S. hog producers intend to have 2.99 million sows farrow between March and May 2022, and 3.03 million sows farrow between June and August 2022. Iowa hog producers accounted for the largest inventory among the states at 23.0 million head, and Minnesota had the second-largest inventory at 8.60 million head.
Welcome
Thursday, March 31, 2022
Lawmakers: New Legislation to Hold China Accountable, Level Playing Field
Farm state lawmakers Wednesday introduced the China Trade Cheating Restitution Act. Senate Democrat Jon Tester joined Republican Bill Cassidy, Chuck Grassley and John Thune to introduce the bill they say would level the playing field for U.S. farmers. The bill would ensure that the agricultural sectors most affected by China’s evasion on anti-dumping duties receive an estimated $38.5 million in accrued delinquency interest on duties wrongfully withheld by Customs and Border Patrol from 2000-2014. For nearly two decades, Chinese producers have exported honey, fresh garlic, crawfish, and mushrooms to the U.S. at a price below the cost of production to purposefully increase their market share– a practice called "dumping." The United States placed anti-dumping duties on Chinese producers in 2001 to protect domestic producers and condemn China's unfair actions. The bill would require CBP to distribute an estimated $38.5 million in accrued delinquency interest on the anti-dumping duties that CBP collected and wrongfully withheld.
EPA Expands Use of Enlist Products
The Environmental Protection Agency this week approved the use of Enlist One and Enlist Duo in 134 additional counties. Enlist One and Enlist Duo is approved in all counties of Arkansas, Kansas, Minnesota, Missouri, Nebraska, Ohio, Oklahoma, and South Dakota, and six counties in Texas. A coalition of farm and commodity groups welcomed the EPA action. American Soybean Association President Brad Doyle says, “We appreciate EPA hearing our concerns and working to quickly restore access in many counties where science and data support doing so.” In January, EPA issued new seven-year registrations for over-the-top use of herbicides Enlist and Enlist Duo on herbicide-tolerant corn, cotton, and soybeans. While the new registrations were welcome and worked for many growers across the country, producers in 217 counties were impacted by county-level bans. Grower groups have urged EPA to review additional data that may allow for lifting county-level bans and view the announcement this week as a significant step toward that outcome.
Soy Checkoff Releases 2021 Sustainability Overview Report
The soy checkoff released its inaugural U.S. Soy Sustainability Overview which outlines key environmental achievements made by soybean farmers. Developed by the soy checkoff, the report details the modern practices and advanced technologies deployed by farmers in recent years to conserve land, water, energy and other natural resources. The report shows that Between 1980 and 2020, conservation efforts by U.S. soybean farmers have improved land use efficiency by 48 percent per bushel, irrigation water use efficiency by 60 percent per bushel, and energy use efficiency by 46 percent per bushel. Growers also improvised greenhouse gas emissions efficiency by 43 percent per bushel, soil conservation by 34 percent per acre and soy production by 130 percent, using roughly the same amount of land. USB CEO Polly Ruhland says, “Our soybean farmers are committed to sharing the progress we have made and how we’re looking ahead to contribute in solving some of society’s biggest challenges, such as food security and sustainable energy.”
Large Dairy Operations Grow Faster than Small Operations
New data from USDA’s Economic Research Service shows the U.S. dairy sector has experienced a gradual shift in milk production toward larger dairy operations. The research indicates that the shift in production from small dairy herd-size farms to large dairy herd-size farms mirrors total factor productivity growth across the dairy sector. Total factor productivity, or TFP, is a broad measure of agricultural productivity that compares the total output to the total land, labor, capital, and material inputs used in farm production. Between 2000 and 2016, the largest dairy operations, those with more than 1,000 milk cows, experienced a TFP growth rate of 2.993 percent per year. Meanwhile, TFP growth for the smallest operations, those with fewer than 100 milk cows, increased at an annual rate of 0.639 percent. TFP growth across all operations was primarily driven by technological progress—growth associated with innovations in systems, processes, and techniques that convert inputs into milk output—and environmental effects that positively impacted feed availability.
Large Dairy Operations Grow Faster than Small Operations
New data from USDA’s Economic Research Service shows the U.S. dairy sector has experienced a gradual shift in milk production toward larger dairy operations. The research indicates that the shift in production from small dairy herd-size farms to large dairy herd-size farms mirrors total factor productivity growth across the dairy sector. Total factor productivity, or TFP, is a broad measure of agricultural productivity that compares the total output to the total land, labor, capital, and material inputs used in farm production. Between 2000 and 2016, the largest dairy operations, those with more than 1,000 milk cows, experienced a TFP growth rate of 2.993 percent per year. Meanwhile, TFP growth for the smallest operations, those with fewer than 100 milk cows, increased at an annual rate of 0.639 percent. TFP growth across all operations was primarily driven by technological progress—growth associated with innovations in systems, processes, and techniques that convert inputs into milk output—and environmental effects that positively impacted feed availability.
USA Rice Members Deliver to Ukraine
Last week, several USA Rice members worked together to deliver a shipment of U.S.-grown rice to help feed the people of Ukraine. The effort came together as the industry saw the urgent need facing Ukrainian people, who are experiencing unprecedented food insecurity as a result of the Russian invasion that began on February 24. Taking advantage of rice already on the European continent, three USA Rice members – Sun Valley Rice, Farmers' Rice Cooperative, and Kennedy Rice Mill –gifted 20 metric tons of U.S. Calrose rice. That rice is now on its way to help feed the Ukrainian people. In a joint statement, the three company leaders say, "We could not in good conscience watch as innocent people were being killed, starved, and driven from their homes.” The U.S. rice companies had rice in position, but destined for other customers. The statement continues, “though it was destined for other customers, we agreed it was urgently needed in Ukraine.”
Thursday Watch List
Markets
USDA's weekly export sales report is due out at 7:30 a.m. CDT, the same time as weekly U.S. jobless claims, U.S. personal income and an update of the U.S. Drought Monitor. The U.S. Energy Department's weekly report on natural gas storage is set for 9:30 a.m. At 11 a.m., USDA will release its Prospective Plantings survey and quarterly report of March 1 Grain Stocks.
Weather
A storm system that has brought heavy precipitation and severe weather this week will push its cold front through the East Coast on Thursday. Severe weather will remain a possibility for the East Coast while showers in the Midwest will wind down throughout the day. Colder air settling in behind the system could lead to some localized frost issues in some areas, though winter wheat is likely not advanced enough to be hurt too badly by the cold.
Wednesday, March 30, 2022
Rabo AgriFinance: High Prices Don’t Mean Big Profits
High prices for U.S. corn, soybeans and wheat are not expected to be a short-term shock, according to a new RaboResearch report, "The Grain Drain After Ukraine." While the sudden shutdown of trade in the Black Sea region has sent corn and wheat prices to their highest in a decade, the ten-year outlook for all major crops has shifted up to a new price level. The report cites transformative geopolitical changes, continued increases in demand and limited acreage availability as the shift's drivers. RaboResearch expects the U.S. to increase its exports to help fill the demand gap. For the 2022/23 crop marketing year, RaboResearch estimates the average on-farm price, which takes local basis into account, to be $5.77 for corn and $10.50 for wheat when their export sales increase by 200 million bushels. Higher prices, however, do not spell bigger profits. Costs for farm inputs such as seed, fertilizer and land will likely also rise, squeezing farmers' margins over the next decade.
USDA Publishes Origin of Livestock Final Rule for Organic Dairy
The Department of Agriculture Tuesday published the Origin of Livestock final rule for organic dairy. USDA says the change to the USDA organic regulations will promote a fairer and more competitive market for all organic dairy producers. The rule ensures that certified USDA organic dairy products are produced to the same consistent standard. Agriculture Secretary Tom Vilsack says, "The Origin of Livestock final rule provides clear and uniform standards about how and when livestock may be transitioned to organic dairy production, and how transitioned animals are managed within the organic dairy system." USDA's National Organic Program will oversee the new rule, which in general allows a dairy livestock operation transitioning to organic, or starting a new organic farm, to transition non-organic animals one time. The rule prohibits organic dairies from sourcing any transitioned animals. Once a dairy is certified organic, animals must be managed as organic from the last third of gestation. Small businesses may request variances for specific scenarios.
Grassley, Colleagues Unveil Updated Cattle Market Reform Bill
Iowa Republican Senator Chuck Grassley this week introduced an updated version of the Cattle Price Discovery and Transparency Act. First introduced in November, Senators Deb Fischer, a Nebraska Republican, Jon Tester, and Montana Democrat, and Ron Wyden, an Oregon Democrat, joined Grassley to introduce the update. The updated legislation allows for more regions, five to seven, encompassing the entire continental U.S. and then establishes minimum levels of fed cattle purchases made through approved pricing mechanisms. The update retains the cash trade mandates included in the previous version of the bill. U.S. Cattlemen’s Association President Brooke Miller says, “USCA stands with county, state, and national producer associations across the U.S. in supporting mandatory cash trade minimums.” National Farmers Union President Rob Larew says the legislation "would shed light on the market and bring about greater fairness.” The updated bill also Increases penalties for violations by packers, and requires that livestock mandatory reporting data be made consistently available.
Organic Trade Association Announces New CEO & Executive Director
The Organic Trade Association Tuesday announced the selection of its next CEO and Executive Director, Tom Chapman. The announcement was made during OTA’s 2022 Organic Week, which Chapman attended. Chapman’s hiring concludes a year-long planned succession process that began in 2021. Chapman will formally assume the position at the association on April 18. Outgoing OTA Executive Director and CEO Laura Batcha says, “I couldn’t imagine a better, more experienced person for this role than Tom.” Chapman is a proactive leader with a deep background in organic that spans the value chain. Over his many years in the industry, Chapman has helped to advance certification and compliance, successfully managed global supply chains and managed multi-million-dollar contracts, and worked closely with diverse brands, growers, and other organic stakeholders. Most recently, Chapman served as Senior Director, Supply Chain at Kinder’s Sauce and Seasoning. Before that, he worked with OTA members Clif Bar and Quality Assurance International.
Robb Fraley Joins Harpe Bioherbicide Solutions Board of Directors
Harpe Bioherbicide Solutions, Inc. Tuesday announced the appointment of Dr. Robb Fraley to its board of directors. Harpe is a pre-commercial stage agricultural technology company focused on providing natural and sustainable herbicide solutions. Fraley, who, for nearly 40 years, served as Executive Vice President and Chief Technology Officer at Monsanto Company, will help guide Harpe Bioherbicide Solutions as it further develops and strengthens its intellectual property portfolio. In addition to joining the board, Fraley has personally invested in the company. Fraley is widely recognized as a key contributor to the worldwide science and agriculture communities – most notably, for developing the first genetically modified crops as a solution for farmers battling pests and weeds that threatened yields and food production. Through wide spectrum control of broadleaf and grass seeds or weeds, the platform of Harpe products will deliver new opportunities for organic agriculture through a series of all-natural herbicide formulations for pre, post and desiccation use patterns.
Ag Groups Release Guide on Virtual Engagement for Women
An updated guide offers tips and tools for effective engagement for online education, including hybrid settings for farm and ranch women. American Farmland Trust and Sustainable Agriculture Research and Education announced "Reaching Women in Agriculture: A Guide to Virtual Engagement," Tuesday. The guide was originally developed through a partnership with AFT and the University of Vermont Extension and has recently been updated, enhanced and published by SARE earlier in 2022. The goal is to create a safe space for women to learn from each other and gain confidence, rather than excluding men. The guidance in Reaching Women is born out of AFT’s Women for the Land initiative and the Learning Circle model. Reaching Women incorporates the characteristics of high-quality programs for women in agriculture and the emerging best practices for adapting farmer education and networking events to virtual platforms. Find and print a free copy of the guide online at sare.org.
Wednesday Watch List
Markets
The U.S. Commerce Department will update its estimate of U.S. GDP for the fourth quarter of 2021 at 7:30 a.m. CDT. At 9:30 a.m., the U.S. Energy Department will release its weekly inventory report, including ethanol production. At 2 p.m., USDA quarterly Hogs and Pigs report will be issued. Traders will continue to monitor the latest weather forecasts and watch for any news pertaining to Ukraine.
Weather
A line of thunderstorms developed Tuesday evening across Texas and Oklahoma. The line will continue to move eastward Wednesday, likely strengthening and causing severe wind gusts and embedded tornadoes as it treks eastward. Outside of this thunderstorm risk, background winds will be strong across the South and Plains while a mix of ice and snow falls across the northern Midwest.
Tuesday, March 29, 2022
Biden Releases 2023 Budget: USDA Highlights
The Biden-Harris Administration Monday submitted to Congress the President’s budget for fiscal year 2023. Agriculture Secretary Tom Vilsack says the budget "provides USDA with the tools needed to support a vibrant, revitalized, and prosperous rural America." The budget proposes $1.1 billion in funding to address climate change across private, working agricultural land. Biden also proposes $1 billion to support agricultural producers and landowners to undertake conservation and climate-smart practices. The budget builds on the $618 million investment to protect and restore watersheds made in the Bipartisan Infrastructure Law by proposing an additional $135 million for these efforts. The budget proposes $111 billion for the Supplemental Nutrition Assistance Program and invests $935 million in rural America. It builds on the $65 billion investment made by the Bipartisan Infrastructure Law to make high-speed internet available to all Americans. The budget includes an additional $133 million over 2022 levels for Reconnect to provide rural residents broadband. Biden's budget also provides more than $10 million for oversight and enforcement of the Packers and Stockyards Act.
Supreme Court to Hear NPPC Case Against Prop. 12
The U.S. Supreme Court has agreed to hear a case brought by the National Pork Producers Council and the American Farm Bureau Federation against California’s Proposition 12. The law bans the sale of pork from hogs born to sows that weren’t raised according to the state’s “arbitrary” production standards. NPPC President Terry Wolters says, “We are extremely pleased that the Supreme Court will consider the constitutionality of Proposition 12.” NPPC has waged a legal battle against the ballot initiative since it was approved in November 2018, arguing at the U.S. district and appellate court levels that Prop. 12 violates the Constitution's Commerce Clause, which grants Congress the power to regulate trade among the states and limits the ability of states to regulate commerce outside their borders. The high court is taking up the case on appeal from the U.S. Court of Appeals for the 9th Circuit, which in July upheld a lower court ruling against the NPPC-AFBF lawsuit.
U.S. Plant-Based Protein Sales Reach $7.4 Billion
New data released by the Plant Based Foods Association and others shows U.S. retail sales of plant-based foods grew 6.2 percent in 2021 over a record year of growth in 2020. The total plant-based market value reached an all-time high of $7.4 billion. Overall, the Plant Based Foods Association says plant-based food retail sales grew three times faster than total food retail sales, with most plant-based categories outpacing their conventional counterparts. Plant-based milk imitation product dollar sales grew four percent and 33 percent in the past three years to reach $2.6 billion. After record growth in years prior, 2021 plant-based meat imitation product dollar sales remain strong, delivering a repeat year of $1.4 billion in sales, and growing 74 percent in the past three years. Plant-based burgers continue to lead the plant-based meat category as the top-selling product type. The fastest-growing plant-based meat product types in 2021 were plant-based meatballs, chicken nuggets, tenders, and cutlets, and deli slices.
Restaurant transactions fell 47 percent in April 2020
New data from USDA's Economic Research Service shows restaurant transactions fell 47 percent in 2020, compared to 2019. In March of 2020, the federal government declared a national emergency in response to the Coronavirus pandemic. In response, many state and local governments implemented social distancing measures, stay-at-home orders, and the mandatory closure of businesses in high-risk industries. Restaurants were often included in these mandates, which forced many to close their dining rooms, if not the entire business, sharply reducing restaurant visits across the country. During the first full week after the national emergency declaration, there were 37 percent fewer restaurant transactions than the same week in 2019. The largest year-to-year changes occurred three weeks later, with the 47 percent decline. By the end of the year, weekly transactions remained 11 percent lower than they had been in 2019. USDA’s Economic Research Service released the new data Monday as part of its COVID-19 Working Paper, examining food away from home spending.
USDA, Weed Science Society, Presenting Weed Science Webinar Series
USDA's Agricultural Research Service and Weed Science Society of America Monday announced the launch of a free webinar series focusing on current research and advancements in managing weeds and invasive plants. By collaborating with WSSA, ARS scientists aim to highlight the important research that has contributed to the development of sustainable practices to control weeds and invasive plants. Stanley Culpepper, WSSA president, says the organization is “excited to host a series of webinars to highlight the contribution of ARS scientists to our discipline." They have scheduled ten webinars from April through June with three themes: tactics, mechanisms and impacts. Presentations will be given by USDA-ARS weed science research experts starting April 5. The webinars will occur every Tuesday from 2-3p.m. ET and include an interactive Q&A session. To attend the webinar, please register in advance. The webinar is open to the public, and WSSA membership is not required. You can register and learn more on the WSSA website, wssa.memberclicks.net.
Fuel Prices Stabilize as Oil Prices Show Extreme Volatility
After a storm of surging prices followed by a week of decline, the national average is virtually unchanged from a week ago, declining just tenths of a penny to $4.23 per gallon. The national average is up 62.4 cents from a month ago and $1.38 per gallon higher than a year ago. The national average price of diesel has risen 8.2 cents in the last week and stands at $5.12 per gallon. GasBuddy’s Patrick De Hann says, “The decline we’ve seen in average gas prices has been slowing down, as oil prices have held above $100 after declining under that level as recently as a few weeks ago.” De Haan adds, “there’s no telling what’s around the corner, at least for now, as the volatility in oil prices persists.” With an OPEC+ meeting later this week, hopes are high that the group will again boost oil production by the same 400,000-barrel number they’ve agreed to every month since last July.
Tuesday Watch List
Markets
The U.S. consumer confidence index is set for Tuesday morning at 9 a.m. CDT. Traders will keep an eye on the latest weather forecasts and any news out of Ukraine or out of China where new cases of COVID-19 are on the rise.
Weather
A storm system will move out of the Rockies and into the Plains on Tuesday. Scattered showers in the west will spread through the Plains and Midwest throughout the day. Severe storms will be possible from Texas to Iowa with a mix of rain, snow, and potential for a little freezing rain for the Northern Plains and northern Midwest. Winds with the system will also be strong in spots but especially in the drought-stricken west Texas area where heat and winds will combine to further dry soils.
Monday, March 28, 2022
U.S., UK Reach New Section 232 Agreement
The U.S. and United Kingdom reached a new Section 232 agreement last week regarding steel and aluminum imports from the UK. That’s good news for America’s farmers because the 25 percent retaliatory tariff on U.S. corn was zeroed out, allowing U.S. corn farmers to renew their trading relationship with Britain. “This agreement will provide opportunities to expand free and fair trade and strengthen our relationship with a great ally,” says U.S. Grains Council President and CEO Ryan LeGrand. “This agreement lifts the retaliatory tariffs on more than $500 million of U.S. products, including corn.” USGC also says this is a great opportunity because the UK is the fifth-largest economy but produces less than 60 percent of its food needs. That makes it a potentially lucrative market for U.S. agriculture and feed grains in particular. “This is vital for global economic development and the profitability of U.S. agriculture,” LeGrand adds. The agreement is effective June 1.
Canada to Resume Exporting Potatoes into the U.S.
The USDA’s Animal and Plant Health Inspection Service says Canada will soon resume exporting table stock potatoes from Prince Edward Island into the contiguous United States. The Hagstrom Report says the National Potato Council is unhappy with the news and worried about potato wart disease spreading from the island into the U.S., where it currently doesn’t exist. An APHIS news release says the agency determined PEI potatoes for consumption only may once again be exported to the U.S. under specified conditions that will pose little risk of introducing potato wart disease into the country. The potato council says, “We are dismayed to learn that USDA is allowing PEI potato shipments into the U.S. to resume before finishing soil tests for the destructive disease.” Ag Secretary Tom Vilsack says the decision is based on sound science, and the agency will put safeguards in place to protect the U.S. potato industry. There is no cure for potato wart disease.
Ukraine Farmers Have Planted Over 300,000 Acres of Crops
Farmers in Ukraine, a major exporter of grains, have planted the first 150,000 hectares (371,000 acres) of spring crops despite the Russian invasion that will likely cut down on the country’s available sowing area. The country’s deputy ag minister says farmers have planted corn, soybeans, sunflowers, millet, buckwheat, oats, and sugar beets. Reuters says Ukraine’s previous ag minister, who resigned for health reasons, noted that the 2022 spring crop area would likely drop by more than half the levels of 2021. Ukraine expected to plant 15 million hectares before the Russian invasion. The country has already suspended exports of multiple commodities, including rye, oats, buckwheat, millet, sugar, salt, meat, and livestock since the invasion began. Ukraine also implemented export licenses for wheat, corn, and sunflower oil. Officials noted that the Ukraine government is considering canceling export limits for corn and sunflower oil as it has high stocks of both commodities.
USDA Releasing More Help to Expand Processing Capacity
USDA launched the Meat and Poultry Processing Capacity Technical Assistance Program to assist meat and poultry grant applications and projects funded by grants. Processors and applicants involved with the Meat and Poultry Inspection Readiness Grant Program and the Meat and Poultry Processing Expansion Program can now access the technical assistance. “This is a true partnership to help meat and poultry processors and grant applicants diversify processing ownership throughout the country,” says Ag Secretary Tom Vilsack. “We’re trying to build capacity and increase economic opportunities for small and mid-sized meat and poultry processors and producers around the country.” USDA encourages grant applications that focus on improving meat and poultry slaughter and processing capacity and efficiency. Applications can also focus on developing new and existing markets, increasing capacity and better meeting consumer and producer demand, and help maintain strong inspection and food safety standards. For more information on the assistance and application deadlines, go to grants.gov.
Corn Growers Ask Administration for More Homegrown Fuels
Corn grower leaders from 19 states combined to send a letter to President Biden asking him to use existing emergency authorities to tap more homegrown fuels like ethanol. The goal is to help stabilize energy markets and lower the price of fuel for consumers. The letter asks the president to prevent consumers from losing the choice of E15, a higher ethanol blend that costs less at the pump and reduces emissions. A 2021 court decision resulting from oil industry efforts to limit the growth of higher ethanol blends ended year-round market access for E15. That ban will begin this summer without action from the administration or Congress. “We urge your administration to act to prevent consumers from losing access to a lower-cost fuel option on June 1,” the letter says. The Corn Growers say increasing the use of lower-cost and lower-emission E15 could easily replace oil imports from Russia.
Improving Child Nutrition Through Dairy
The National Milk Producers Federation and the International Dairy Foods Associated submitted comments to the USDA’s Food and Nutrition Service regarding dairy. The groups want the agency to improve nutrition security by updating school meal nutrition standards to encourage increased dairy consumption. That move would keep nutrition in line with the 2020-2025 Dietary Guidelines for Americans report and with the leading health organizations. In 2020, the federal Dietary Guidelines Advisory Committee report found that more than three-quarters of nine-to-13-year-olds are not meeting the recommended intake of dairy foods. School milk consumption has declined in recent years, particularly after whole milk and low-fat flavored milk options got removed from school meals ten years ago. “USDA can begin to reverse the trend through providing certainty for schools offering flavored milks, which provide the same micronutrients as white milk but with a flavor that many children prefer,” the groups say in their comments.
Monday Watch List
Markets
Back from the weekend, traders will look over the latest weather forecasts and check the news out of Ukraine. At 10 a.m. CDT, USDA will release its weekly report of grain export inspections.
Weather
Cool and dry weather continues across the Midwest Monday, but very warm temperatures continue in the Southern Plains ahead of the next system that is moving into the West. Heat and the development of breezy winds on Tuesday will continue to dry out soils where rains missed last week and create fire risks, especially in west Texas. Scattered showers will spread throughout the western states which are still in deep drought and will spread through the rest of the country later this week.
Friday, March 25, 2022
U.S., Japan Reach Agreement on American Beef Import Targets
U.S. Trade Representative Katherine Tai and Ag Secretary Tom Vilsack announced that the U.S. and Japan reached an agreement that will help keep more American beef flowing into Japan. The two countries agreed to increase the beef safeguard trigger level under the U.S.-Japan Trade Agreement. The Hagstrom Report says it’s now less likely that U.S. exports will reach the levels that trigger the safeguard provision allowing Japan to raise its tariffs. “This is a win-win for American ranchers and Japanese consumers,” says U.S. Ambassador to Japan Rahm Emanuel. “It ensures stability for U.S. exports in the years ahead and that American beef can compete and win anywhere, anytime.” The agreement includes a new three-trigger mechanism, and all three must get hit for Japan put the safeguard in place and raise the beef tariff. It’s unknown when the agreement goes into effect because the text must get published, and Japan’s parliament must approve the agreement.
Cattle Groups Applaud U.S.-Japan Agreement on Beef Imports
U.S. cattle groups applauded the announcement of an agreement between the U.S. and Japan on American beef imports. Both countries entered consultations after the beef tariff safeguard got triggered in March 2021. The National Cattlemen’s Beef Association strongly supports efforts to improve the beef tariff safeguard that benefits both Japanese consumers and American cattle producers. "NCBA is encouraged by the announcement," says Kent Bacus, NCBA Senior Director of International Trade and Market Access. "We continue taking necessary steps to secure long-term solutions that enable American cattle producers to continue providing Japanese consumers high-quality beef at competitive prices." If the Japanese parliament approves the agreement, it will add additional triggers before a tariff can get raised on beef. “Reducing tariffs and trade disruptions will further strengthen demand for U.S. beef and generate long-term benefit for cattle producers despite recent challenges,” says Hughes Abell, President of the Texas and Southwestern Cattle Raisers Association.
Agribusiness Association of Iowa Picks Northey as CEO
Bill Northey, a one-time Secretary of Agriculture for Iowa, is the new CEO of the Agribusiness Association of Iowa. Northey is well-known in state and federal agriculture. His involvement in the Iowa Corn Growers Association and the National Corn Growers Association culminated in his role as president of NCGA. He was elected three times as Iowa Secretary of Agriculture in 2006, 2010, and 2014. Most recently, Northey was Under Secretary for Farm Production and Conservation at the USDA, and his term ended in January of 2021. “I’m excited to get asked to serve AAI as its CEO,” Northey says. “AAI is made up of the leading agricultural companies in Iowa working to promote Iowa’s agricultural opportunities and to support Iowa farmer and agribusiness leadership on improving Iowa’s environment.” Kevin Drury, Chair of AAI’s Board of Directors, says Northey’s passion for agriculture and extensive breadth of experience in agriculture are unparalleled. Northey will replace the retiring Joel Brinkmeyer.
Farm Groups Pressure Washington to Open CRP for Planting
Several farm groups are pressuring the USDA to allow farmers to plant on Conservation Reserve Program acres. The groups say the move would help to fill the likely lack of corn, wheat, and sunflower oil coming from Ukraine because of the Russian invasion. Yahoo News says seven agriculture lobbying organizations fired off a letter to Ag Secretary Tom Vilsack this week asking the USDA for flexibility for farmers to plant crops on more than four million acres of “prime farmland” that’s currently enrolled in the Farm Service Agency’s CRP without penalty. “It remains to be seen if Ukraine’s farmers will be able to safely plant crops,” the letter says. “Time is of the essence. The planting window in the United States is already open.” The letter was signed by the American Farm Bureau, the National Grain and Feed Association, and several other groups. If the acres get planted, they could yield another 18.7 million tons of grain.
Europe Farms can Till Fallow Land
The European Commission approved a $550 million package for its farmers, who can now grow food and feed crops on fallowed land without losing they’re “greening payments.” Successful Farming says the move comes in response to Russia’s invasion of Ukraine. EU’s Ag Commissioner says the EU is an “agricultural superpower” that will ensure its farmers have the commission’s full support to respond to the world’s need for food. No immediate estimates were available on how much land would get put into crops under the new European initiative. EU members can use the $550 million (500 million Euros) in agricultural aid to help farmers boost global food security efforts. They can also use the funds to offset potential impacts of higher production costs or trade restrictions EU commodities may face overseas. The EU says Russia is intentionally targeting Ukraine’s food supply “to create hunger and use this as a method of aggression.”
Administration Continues Some Tariff Exclusions with China
The U.S.-China Business Council applauded the Biden administration for renewing tariff exclusions on 352 categories of Chinese imports. However, the group is disappointed that the administration didn’t approve the exclusions on the full list of 549 categories requested. The council says no reason was given for not approving them all. American companies have submitted 53,000 requests for tariff exclusions but fewer than 7,000 were granted. “We know that the tariffs are a tax on U.S. businesses and consumers, that they haven’t influenced China’s behavior, which was the justification for making the move, and they likely contribute to domestic inflation,” says Craig Allen, president of the USCBC. “They negatively affect U.S. companies of all sizes, especially many of the smaller ones still struggling to survive.” The council points out that then-presidential candidate Joe Biden was correct in calling former President Trump’s tariffs “disastrous,” acknowledging the trade war with China hurt U.S. farmers and families.
Friday Watch List
Markets
The University of Michigan's index of U.S. consumer sentiment is due out at 9 a.m. CDT Friday, the only significant report on the schedule until USDA's cattle on-feed report at 2 p.m. Traders continue to monitor the latest weather forecasts and events in Ukraine.
Weather
A strong cold front moving into the Upper Midwest will continue southeastward on Friday. Showers are very isolated with the system, but much colder air will fill in behind it later in the day and over the weekend. Breezy winds are accompanying the front.
Thursday, March 24, 2022
University of Missouri Releases U.S. Agricultural Market Outlook
The University of Missouri Food and Agricultural Policy Institute Wednesday released its Agricultural Markets Outlook. In recent years, unexpected events have caused great uncertainty and volatility in agricultural markets. Trade disputes, the COVID-19 pandemic and now the war in Ukraine have added to the natural uncertainty caused by weather and other factors. The report summarizes baseline projections for agricultural and biofuel markets prepared using market information available in January 2022. Major crop prices have been pushed higher by the global economic recovery, increased demand from China, some weather-induced reductions in crop supplies, and the war in Ukraine. Based on information available in January 2022, the projection was for lower prices for most crops in the 2022/23 marketing year. A weather-reduced soybean crop in South America and the war in Ukraine have both pushed oilseed and grain prices higher, at least in the near term. Projected cattle and milk prices increase sharply in 2022, and prices for hogs and poultry remain well above the 2020 pandemic levels.
Canadian Pacific Railway and Union Reach Agreement, Return to Work
Canadian Pacific Railway this week announced an agreement with the Teamsters Canada Rail Conference - Train and Engine Negotiating Committee to enter into a binding arbitration. The move ended a work stoppage. The work stoppage began Saturday and ended Tuesday afternoon. In the announcement, Canadian Pacific said it will immediately begin working with customers to resume normal train operations across Canada as soon as possible. The union represents approximately 3,000 locomotive engineers, conductors, train and yard workers across Canada. The Western Grain Elevator Association in Canada had called on the two sides to reach an agreement and end the work stoppage quickly. Rail service is essential to get grain off the Prairies to customers and ports across North America and globally. The association says serious challenges with rail service have already resulted in irreparable damage to Canada's reputation with its customers, and are adding to inflationary pressures on food prices abroad.
Brazil’s Suspension of Ethanol Tariff Welcomed as Opportunity
Brazil has temporarily lifted its 18 percent tariff on all U.S. ethanol as of Wednesday, March 23 and running through the end of the year to decrease inflationary pressures. Ryan LeGrand, President and CEO of the U.S. Grains Council; Emily Skor, CEO of Growth Energy; and Geoff Cooper, President and CEO of the Renewable Fuels Association, released a joint statement regarding the tariff. The leaders say, “We are pleased to see the temporary elimination of the 18 percent tariff, which should improve access for Brazil’s ethanol consumers as well as help meet its own decarbonization goals.” Brazil sources an estimated 60 percent of its ethanol imports from the United States. World-Grain reports most cars in the country are flex-fuel, which means they can either use gasoline or hydrated ethanol. Brazil also has a mandatory blend of 25 percent to 27 percent anhydrous ethanol in gasoline.
Growth Energy Ad Campaign Presses E15 Fix to Deliver Relief at the Pump
Growth Energy Wednesday launched a new ad campaign calling on President Biden to direct his administration to lift restrictions on the year-round sale of E15. Growth Energy says the action would boost energy security and combat the surge in fuel costs accelerated by the conflict in Ukraine. The campaign will air on FOX, MSNBC, and CNN in the Washington, D.C. area. It will run until June 1, when many retailers will be forced to pull E15 from the market due to oil companies’ successful challenge in court to eliminate this fuel choice. Growth Energy CEO Emily Skor says, “The White House says all options are on the table to ease surging gas prices, and E15 is a common-sense solution that can deliver immediate relief at the pump.” In some markets, E15 is already saving drivers 50 to 60 cents per gallon, but that option could vanish on June 1 unless the Biden EPA takes swift action, according to Growth Energy.
NMPF, USDEC Commend Congressional Progress on Ocean Shipping Reform Act
The National Milk Producers Federation and the U.S. Dairy Export Council lauded passage by the Senate Commerce Committee of the Ocean Shipping Reform Act. The approval Tuesday establishes Senate committee support for action to address shipping supply chain challenges as Congress prepares to begin conference procedures on the Senate-passed U.S. Innovation & Competition Act and the House-passed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act in the coming weeks. Jim Mulhern, President and CEO of NMPF, says, “Export supply chain issues continue to pose immense challenges to dairy exporters, which is why this legislation remains so critical as part of a broad-based approach to tackling those problems.” In the House, Representative Dusty Johnson, a South Dakota Republican, says, “Getting this bill across the finish line and signed by the President is crucial to begin easing the costly problems created by foreign carriers’ unfair shipping practices.
Value of U.S. Dairy Exports to Canada Grew by Nearly 50% Over a Decade
New Data from USDA’s Economic Research Service shows total dairy exports from the United States to Canada, adjusted for inflation, rose 48 percent from $466.4 million in 2010 to $691.5 million in 2021. Canada is an important market for U.S. dairy products, second only to Mexico. Canada’s proximity to the United States favors imports such as fluid milk, cheese, and infant formula, among others. Supplemental imports of fluid milk, butter, and butterfat in addition to cheese and cream from the United States often meet the shortfall in Canada’s production. By value, infant formula has been the top U.S. dairy product exported to Canada, accounting for $151.3 million in 2021 and representing 22 percent of the total. Coming in second, the combined export value of fluid milk, cream, and milk-based drinks reached $128.5 million in 2021—an inflation-adjusted increase of $85.2 million from 2010. U.S. exports of cheese to Canada have grown by 12 percent to $68.1 million in 2021.
Thursday Watch List
Markets
USDA's weekly report of export sales is set for 7:30 a.m. CDT, the same time as weekly jobless claims, U.S. durable goods orders for February and an update of the U.S. Drought Monitor. At 9:30 a.m., the Energy Department reports on natural gas storage. Grain prices remain potentially volatile and are sensitive to news out of Ukraine.
Weather
A system that has been affecting the country over the last several days will slowly depart the country on Thursday. Behind it, a cold front will move through the Northern Plains later today and tonight, bringing in some colder air. Areas along and east of the Mississippi River continue to deal with flooding and wet soils, which will hamper fieldwork.
Wednesday, March 23, 2022
Farm Groups Release Feeding the Economy Report
U.S. food and agriculture groups Tuesday released the sixth annual Feeding the Economy report. The report's findings show that seven percent of the nation's economy and 29 percent of American jobs are linked to the food and agriculture sectors, either directly or indirectly. Amidst the global supply chain and inflation crises, these sectors also exported $182.91 billion worth of goods, helping the U.S. maintain its position as a leading player in global agriculture. In 2021 these sectors contributed a total of $3 trillion to the U.S. economy. The report shows the total food and industry economic impact at $7.43 trillion. John Bode, President & CEO of the Corn Refiners Association, says the report "highlights how food and agriculture overcame pandemic disruptions to continue to serve as a bedrock of the U.S. economy." Other groups involved in the effort include the American Farm Bureau Federation, The Food Industry Association, and the National Restaurant Association.
Farm share of U.S. food dollar rose one cent in 2020
The farm share of the food dollar increased one cent in 2020, according to new data from USDA's Economic Research Service. On average, U.S. farmers received 16.0 cents for farm commodity sales from each consumer dollar spent on domestically produced food in 2020, up from a revised 15 cents in 2019. Known as the farm share, the one-cent rise is the largest increase in nearly a decade. On the other hand, the marketing share goes to food-supply-chain industries that move domestically produced food from farms to points of purchase, including costs related to packaging, transporting, processing, and selling to consumers at grocery stores and eating-out places. In the first year of the Coronavirus pandemic, households redirected a substantial amount of their eating-out dollars, or food-away-from-home spending, toward food-at-home markets such as grocery stores. Generally, farmers receive a smaller share from eating-out dollars because a larger portion is spent on preparing and serving meals at restaurants, cafeterias, and other food-service establishments.
Ecosystem Services Market Consortium Announces Partnership with SustainCERT
Ecosystem Services Market Consortium and SustainCERT announced a new partnership this week. The effort seeks to accelerate the deployment of a digital solution for corporate reporting on the carbon intensity of agriculture commodities. ESMC says the result will unlock scalability and credibility for climate action in agriculture supply chains, such as carbon markets. ESMC and SustainCERT have partnered to accelerate the deployment of SustainCERT’s Scope 3 software and digital verification capabilities for agriculture. ESMC will help pilot test and improve the solution, allowing for better alignment with user needs and civil society quality requirements, including the Greenhouse Gas Protocol. Ecosystem Services Market Consortium is a non-profit collective action program dedicated to scaling quantified and verified sustainable ecosystem services from agriculture. It is a public-private partnership of the agricultural supply chain and value chain – including agricultural producer groups and co-ops, major corporate food and beverage companies, agribusiness, conservation NGO's, ag-tech companies, land grant universities, and others.
Deere Expands Access to Self-Repair Resources
John Deere announced this week it will enhance the capabilities of existing diagnostic tools and expand their availability. In 2023, the company will roll out an enhanced customer solution that includes a mobile device interface, and the ability to download secure software updates directly to embedded controllers on select John Deere equipment with 4G connections. Luke Gakstatter of Deere says, "We recognize our customers' desire for more autonomy in managing their equipment." In addition, John Deere announced that coming this May it will expand its offerings by giving customers and independent repair shops in the U.S. the ability to purchase Customer Service ADVISOR directly through JohnDeereStore.com. However, the United States Public Interest Research Group, which has criticized equipment manufacturers for restricting customer access to resources to repair their machines, called for more. A U.S. PIRG Spokesperson says, "Farmers don’t have time to wait for another half-step, only to learn several years down the line that they are still not allowed to perform critical repairs on their equipment.”
Cover Crops Goal to Benefit Pig Farm Sustainability
A new partnership between USDA’s Natural Resource Conservation Service and Farmers for Soil Health was awarded a $1 million grant to advance adoption of soil conservation practices on farms. FSH is a farmer-led, farmer-funded initiative that will help producers plant cover crops on 30 million acres of soybeans and corn by 2030 to improve overall soil health. FSH is a joint effort of National Pork Board, National Corn Growers Association and the United Soybean Board. Pork producers can measure their cover crop adoption by using On-Farm Sustainability Reports, which are available at no additional cost to them to help document and improve on-farm sustainability efforts. Steve Rommereim, past president of NPB, says, “Nearly one-half of pork’s environmental footprint comes from the corn and soybeans that are fed to pigs.” Rommereim adds sustainable pork production begins with sustainably grown feed. NPB says the initiative will support the environmental stewardship on row-crop acres, ultimately helping pork producers meet their sustainability goals.
Benefits of Early Calving Are Increasing Due to Late Winter Warming
A study from USDA's Agricultural Research Service finds on rangelands of the Western U.S., calving in late winter instead of spring maximizes calf growth. The study finds that late winter calving instead of spring supplies high-quality forage when it's most needed. There is high value in utilizing rangelands to lower the cost of beef production. Selecting the right calving time, when calves are born, is one factor ranchers can adjust to affect the efficiency of beef production. However, with climate conditions shifting, the costs and benefits of calving at different times are changing. The research team observed that calves born early March, late winter, averaged about 13 percent heavier at 180 days of age than those born early May, spring. This is because calves born in March are older and larger and can therefore better utilize the high-quality forage that is available in summer, whereas May calves reach 180 days of age in early November, long after forage quality has typically declined.
Wednesday Watch List
Markets
A report on February U.S. new home sales is due out at 9 a.m. CDT Wednesday. The Energy Department's weekly energy inventory report follows at 9:30 a.m. and includes ethanol production. Traders will continue to monitor the latest weather forecasts and keep track of events in Ukraine.
Weather
A storm system has moved into the Midwest on Wednesday. While it has become much weaker than over the last two days, scattered showers will continue in the Midwest with a line of slow-moving thunderstorms working across the Southeast. Those storms could still be severe with a couple of tornadoes and damaging wind gusts. Farther north, there is some potential for severe storms in the eastern Midwest as well as the low pressure center has another burst this afternoon and evening. Hail is the main threat with these storms but a tornado or damaging wind gust cannot be ruled out either.
Tuesday, March 22, 2022
America Celebrates National Ag Day
Today (Tuesday) is National Ag Day, celebrating American agriculture. In his proclamation of National Ag Day, President Joe Biden writes, "I call upon all Americans to join me in recognizing and reaffirming our commitment to and appreciation” of American agriculture. The Association of Equipment Manufacturers is highlighting the technology and innovation in agriculture on the National Mall, with a half-mile of farm equipment and booths to educate the public and lawmakers. Also, student leaders from FFA, 4-H, Agriculture Future of America, and Minorities in Agriculture, Natural Resources and Related Sciences are sharing information on the critical role agriculture plays in our culture and economy. A National FFA spokesperson says, “National Ag Day gives students from agriculture youth organizations the chance to work together and share the importance of agriculture and agricultural education with our national government leaders.” This year marks the 49th anniversary of National Ag Day, celebrated in classrooms and communities across the country.
USDA Urges Communities, Farmers, Ranchers to be Prepared for Severe Weather
The Department of Agriculture Monday urged those in the path of the severe weather forecast for the Southeast this week to take steps now to keep their food safe, and for farmers and ranchers to take proactive steps to protect their livestock. The weather system is forecast to bring severe storms, including damaging winds, severe rain, potential flooding, hail and even tornadoes to parts of the Southern Plains and Gulf Coast. Meanwhile, USDA offers several risk management and disaster assistance options to help producers recover after disasters. Farmers who suffer losses and whose crops are covered for the 2021 crop year by the Federal Crop Insurance Program, or the Noninsured Crop Disaster Assistance Program are asked to report crop damage to their crop insurance agent or local FSA office. Livestock and perennial crop producers often have more limited risk management options available, so there are several disaster programs for them. USDA encourages farmers to look for disaster tools, such as the Disaster Assistance Discovery Tool, on farmers.gov.
Growth Energy Applauds U.S. House Action to Expand E15
Growth Energy CEO Emily Skor Monday applauded members of the House of Representatives for introducing the Home Front Energy Independence Act. In response to rising gas prices and the global energy crisis due to the war in Ukraine, the legislation would make the sale of E15 year-round permanent, create a tax credit for higher biofuel blends, streamline E15 labeling, provide funding for E15 infrastructure, extend the biodiesel tax credit for three more years, and ban imports of Russian petroleum products. Skor says, “The Home Front Energy Independence Act would boost U.S. energy security by increasing the supply of lower-cost, homegrown biofuels available to drivers.” Iowa Republican Representatives Randy Feenstra and Ashley Hinson were joined by Democrats Cheri Bustos of Illinois and Angie Craig of Minnesota to introduce the bill. The House bill is companion legislation to a Senate bill introduced by Iowa Republican Senator Joni Ernst and Senate Democrat Amy Klobuchar.
Smithfield Foods Contributes $2 Million to Ukraine Crisis Relief Efforts
Smithfield Foods Monday announced cash and in-kind donations totaling $2 million to crisis relief efforts aiding the citizens of Ukraine and those seeking refuge in surrounding areas. Smithfield will expand ongoing refugee relocation and aid assistance underway through its operations in Central Europe with $250,000 donations to each the Global Red Cross Network, Mercy Chefs, Save the Children and World Central Kitchen. Smithfield President and CEO Shane Smith says, "We are deeply proud of the decisive action our Smithfield Family has taken near the border and are committed to supporting and amplifying their good work." Smithfield's global footprint is comprised of operations in seven countries around the world, including the United States, Hungary, Poland, Romania, Slovakia, the U.K. and Mexico. Since the outset of violence in late February, Smithfield Europe operations have provided dedicated support for Ukrainian team members and refugees. Additionally, Smithfield Europe has engaged in regular donations of shelf-stable and other protein to food banks and temporary shelters across the region.
Former U.S. President to Headline Texas & Southwestern Cattle Raisers Association
George W. Bush, 43rd President of the United States, is set to headline the 2022 Cattle Raisers Convention & Expo, hosted annually by the Texas & Southwestern Cattle Raisers Association. The event takes place at the Fort Worth Convention Center in downtown Fort Worth on March 25-27. President Bush will be joined by legendary singer/songwriter/actor Red Steagall, who will sit down with him for a special conversation about his time in the White House, the challenges facing our nation in the 21st century, and his current work at the George W. Bush Presidential Center. TSCRA CEO Jason Skaggs says, “He’s spoken all over the world, but on March 26, the 43rd President of the United States will address a group of cattle raisers in Fort Worth, and we couldn’t be more honored.” The event is the largest cattle and ranching industry event in the Southwest, with more than 4,000 attendees expected. Open-to-the-public, more information can be found at cattleraisersconvention.com.
Fuel Prices Fall for First Time in 12 Weeks
For the first time in twelve weeks, the national average price of gasoline declined, down nine cents from a week ago. The national average gas price Monday was $4.24 a gallon, and the average diesel price fell 10 cents to $5.03 per gallon. The national average gas price is up 71.5 cents from a month ago and $1.37 per gallon higher than a year ago. GasBuddy’s Patrick De Haan says, “While the decline is still subject to changes in global supply and demand, COVID and Russia’s war on Ukraine, we are poised to see additional downdrafts at the pump this week.” However, not everyone will see the relief, as West Coast gas prices keep rising. Oil markets have seen a dramatic rise in volatility due to lower liquidity prompted by exchanges raising margin requirements to ensure liquidity as oil prices trade wildly. U.S. retail gasoline demand saw a rise last week as national weekly gasoline demand rose 2.9 percent from the prior week.
Tuesday Watch List
Markets
Traders will check the latest weather forecasts and any news out of Ukraine, pausing at 8 a.m. CDT to see if USDA announces an export sale. There are no official reports lined up for Tuesday.
WeatherA system will continue to bring moderate to heavy rain from eastern Texas northeast into the Ohio Valley on Tuesday. That will include very good chances for severe weather toward the Gulf of Mexico. A band of more moderate rain mixed with snow continues from west-central Kansas up into the Upper Midwest as well. Along with the precipitation, winds remain elevated in the Plains while temperatures drop below normal.
Monday, March 21, 2022
Drought Will Continue in the Western U.S.
A severe drought has gripped western parts of the U.S. since the middle of 2020. The National Oceanic and Atmospheric Administration says drought will likely persist or worsen in the spring due to above-normal temperatures and below-normal precipitation. NOAA’s spring outlook says dry conditions will likely heighten the risk of wildfires across the Southwest and Southern Plains and will stress farms across California. The National Drought Mitigation Center says over 60 percent of the continental U.S. is under a minor drought or worse, the widest drought coverage since 2013. NOAA’s Climate Prediction Center says, “Prolonged, persistent drought will continue to impact much of the West, and drought will develop during April through June in the Southwest and the Central and Southern Plains.” Water levels in many western lakes are at record-low levels. But drought conditions are expected to lessen or end in the Upper Midwest and the coastal areas of the Southwest.
USDA Announces Partnership with Northwest Seaport Alliance
Ag Secretary Tom Vilsack announced plans for improving shipping in the Seattle area. The agency will preposition containers of agricultural goods near port terminals to help improve service for shippers that carry U.S.-grown agricultural commodities. The USDA is partnering with Northwest Seaport Alliance to enhance access to a 49-acre pop-up site to accept either dry agricultural or refrigerated containers for temporary storage at NWSA in Seattle. The goal is to reduce operational hurdles and costs, making it so they can be loaded more quickly onto ships at the export terminals. The alliance includes the marine cargo operations of the ports of Seattle and Tacoma, Washington, which is the fourth-largest container gateway in the U.S. The Northwest Seaport Alliance saw a nearly 30 percent decline in exporting agricultural commodities in the last six months of 2021. The ratio of loaded versus empty container exports shifted to predominantly empty containers since May of last year.
Production Costs Outpacing Commodity Prices
The cost of growing crops could outpace revenue for many farmers this year, making it more difficult to break even despite rising commodity prices and increasing domestic and global demand. An American Farm Bureau Market Intel Report says that farm production costs are likely to rise six percent in 2022, which follows a 12 percent rise in 2021. This continues a trend stretching back several years, as farmers have seen almost all production expenses rise since 2013. Production cost increases include rising fertilizer, seed, and chemical prices that now make up 17.5 percent of on-farm expenditures; rising fuel and energy prices that are made worse by the Russia-Ukraine conflict; increasing costs of labor for both farmers and agribusinesses; COVID-19 disruptions of labor markets and production. “Right now, there are serious concerns about whether farmers will be able to access the supplies they need to put a crop in the ground,” says AFBF President Zippy Duvall.
U.N. Says Ukraine War Impacting World’s Food Security
The United Nations says the war in Ukraine is already resulting in higher food prices and a shortage of staple crops in central Asia, the Middle East, and North Africa. The Russian invasion of Ukraine has severely cut down on shipments from the two countries, which combine to ship 25 percent of the world’s wheat exports and 16 percent of global corn exports. Reuters says the surging grain prices are starting to pressure retail food prices in some of the world’s poorest countries. The U.N.’s International Fund for Agricultural Development says, “The conflict in Ukraine is already a tragedy for the world’s poorest people living in rural areas, where we are already seeing price hikes.” Those price hikes are going to drive up the number of hungry people living in poverty, and that could have dire implications for global stability. Wheat prices are close to the levels seen during the last food crisis in 2007 and 2008.
USDA Tackling Nutrition Insecurity
The U.S. Department of Agriculture is taking specific actions to improve America’s nutrition security. The USDA’s nutrition security efforts build on the work the agency and its partners are doing to improve food security by increasing the Department’s focus on diet-related chronic diseases. Studies show that diet-related diseases are a leading cause of death in the country. “COVID-19 brought food insecurity to the forefront of the national conversation and shined a new light on the devastating toll of chronic disease,” Vilsack says. “As many as two-thirds of COVID hospitalizations in the country are related to diet-related diseases.” The strategies for improving nutrition security include providing nutrition support through all life stages, connecting all Americans with healthy and affordable food sources, developing and enacting nutrition science through partnerships, and prioritizing equity every step of the way. Poor diet increases the risks of heart disease, diabetes, obesity, and more. Modernizing the WIC program is among the agency’s first objectives.
Chlorpyrifos Ban Will Stand
Agriculture groups had two requests for a stay of the Environmental Protection Agency’s ban on chlorpyrifos turned down by a federal court. DTN says the court will allow the groups’ latest suit against the agency to go forward. Farmers still can’t use the insecticide on food or feed crops because its food residue tolerances got revoked. The leading groups of the ag coalition include the American Soybean Association, American Farm Bureau Federation, American Sugarbeet Growers Association, and the Cherry Marketing Institute. Together with 16 other groups, they say the EPA’s decision to revoke the food tolerances for the insecticide causes major harm to their industries, which use it to control pests like aphids, stink bugs, and more. A coalition statement says, “We are disappointed with the court’s decision to deny the motion to stay the rule while the case is heard and are discussing what will be our next steps in the process.”
Monday Watch List
Markets
Traders will return from the weekend, checking weather forecasts and the latest reports from Ukraine. USDA's weekly report of grain inspections at 10 a.m. CDT is the only official report on Monday's docket.
Weather
A system will move out of the Rockies and into the Southern Plains Monday. Widespread showers are anticipated for the Central and Southern Plains moving into the Midwest and Delta overnight. This system will bring scattered thunderstorms to the southeastern Plains which could end up being severe, but moderate showers in drought areas of the Plains will provide at least some soil moisture for winter wheat that is coming out of dormancy in drought. The system will not eliminate the drought, however.
Friday, March 18, 2022
U.S., Britain to Start Trade Talks Next Week
CP Railroad to Lock Out Workers on Sunday
Canadian Pacific, one of the largest railroad companies in Canada, will bring operations to a halt this weekend after the company didn’t reach a labor deal with its workers. The company issued a notice to the Teamsters Canada Rail Conference that it will lock out employees early Sunday if the two sides can’t agree to a settlement or binding arbitration. Bloomberg says the two sides are discussing a new agreement but “remain far apart.” A disruption would create even more uncertainty in fertilizer markets just as farmers need nutrients for spring planting. Canada is one of the world’s biggest suppliers of potash that’s used in crop nutrients. Sanctions on Belarus and Russia after the Ukraine invasion have already caused a shortage in supplies and a rapid rise in prices. CP is the primary rail transportation provider for delivering potash mined in Saskatchewan to overseas markets, according to the provincial government.
U.S. Ethanol Stocks Hit Pandemic High Numbers
America’s inventories of ethanol are at their highest level since the early days of the pandemic. The U.S. hasn’t had this much ethanol on hand since April 2020. In its latest report, the Energy Information Administration says ethanol inventories totaled 25.95 million barrels during the week ending on March 11. Market Watch says that’s up from 25.27 million barrels reported during the prior week. The EIA says inventories of more than 26 million barrels back in April of 2020 were the previous high-water mark. The stockpiles are well above the forecasts of industry analysts surveyed by the Dow Jones during the week. Their forecasts predicted stocks would be between 25.25 to 25.5 million barrels. Meanwhile, daily production only dropped off slightly, averaging 1.026 million barrels a day, down from 1.028 million a day during the prior week. The Midwest, which produces the most barrels of any region in the country, dropped output to 971,000 barrels a day.
Prohibited Pork, Poultry Seized at Border
Over 120 pounds of prohibited pork and poultry meat were found in a minivan trying to cross the border from Mexico into Texas. The Kansas City Star says federal officials and agricultural specialists at the border seized the prohibited meat at the Laredo (Lah-RAY-dough) Port of Entry. A news release from U.S. Customs and Border Protection says pork and pork products are always banned from entering the U.S. through Mexico, and other meats are either prohibited or restricted. The regulations are in place to make sure that harmful pests or diseases don’t make it into the country through imported food products. Authorities say the driver didn’t declare having any meats when arriving at the border. “This significant seizure shows the importance of CBP’s agricultural mission to prevent the spread of potential animal diseases that could risk public safety and inflict harm on the nation’s agricultural economy,” says Alberto Flores, Director of the Laredo Port.
USDA Updates Eligibility for Spot Market Hog Pandemic Program
The USDA clarified the definition of a spot market sale and hog eligibility under the Spot Market Hog Pandemic Program. SMHPP is designed to help producers who sold hogs through a spot market sale from April 16, 2020, through September 1, 2020. Hog producers will also now be required to submit documentation to support information provided on their application, including the number of hogs sold through a spot market sale and how the price was determined. The only direct to packer sales eligible for the program are those moved through a negotiated sale. The payments will get calculated by multiplying the number of eligible hogs, not to exceed 10,000 head, by the payment rate of $54. USDA will distribute payments after the application period to help ensure the funding is distributed equitably to all eligible producers. Producers can go to farmers.gov/smhpp for examples of supporting documentation, information on applicant eligibility, and more information on how to apply.
Clean Water Act Not Strong Enough
A new report from the Environmental Integrity Project calls for eliminating agricultural exemptions for the Clean Water Act. They want the Act fixed because it’s missed the original goal of getting 100 percent of American waters fishable and swimmable by 1983. DTN says farmers and ranchers have had many of their practices exempted from the CWA, basically assessing ag runoff as non-point sources of pollution. “Congress should strengthen the Clean Water Act by closing its loophole for agricultural runoff and other non-point sources of pollution,” the EIP report says, “which are by far the largest sources of impairments in U.S. waterways." The report also says “factory-style animal production” should get regulated like other industries because of its “massive waste disposal problem,” and that government agencies should get more power to enforce total maximum daily loads or TMDLs. The Biden administration is currently rewriting the definitions of the “Waters of the U.S. Rule.”
Friday Watch List
Markets
A report on U.S. existing home sales for February is set for 9 a.m. CDT Friday, the same time as the Conference Board's U.S. index of leading indicators. Traders will check the latest weather forecasts and continue to monitor news from Ukraine.
Weather
A storm system will continue to move northeastward from the Ozarks up the Ohio River Valley on Friday. A batch of thunderstorms across Mississippi and Alabama will eventually outrun its forcing this afternoon, but another band or isolated showers may form behind this initial band later in the day, bringing risks of severe weather from the Ohio River to the Gulf Coast. Moderate showers will fall north of the severe threat from the Ozarks through the Midwest. Snow will mix in on the northern side of the band with some light accumulations from northeast Kansas through northern Michigan.
Thursday, March 17, 2022
FACA Discusses USDA’s Role in Climate Initiatives at House Ag Hearing
As the process to write the 2023 farm bill begins, the agriculture committees should address climate policy in a producer-focused way, according to the Food and Agriculture Climate Alliance. Chuck Conner of the National Council of Farmer Cooperatives is co-chair of the alliance. Conner told Congress Wednesday, “We believe that policies should be voluntary, and market- and incentive-based.” The comments were part of the House Agriculture Committee hearing to review the Department of Agriculture program’s role in addressing climate change. Conner noted that FACA released a comprehensive list of recommendations related to agriculture and climate in November 2020. Several of these, he said, should be considered during the farm bill process. Conner also noted that FACA is beginning a process to develop an expanded set of more farm bill focused recommendations in the coming months. FACA represents a diverse group of farm and environmental groups, including the American Farm Bureau Federation and the Environmental Defense Fund.
USDA NASS to Livestream Agricultural Data Briefings
Trevino Withdraws from USTR Chief Ag Negotiator Nomination
Elaine Trevino, the Biden Administration nominee to serve as Chief Ag Negotiator, will take a non-political appointment in the administration. As a result, the White House withdrew her nomination to the trade post at the U.S. Trade Representative’s Office. Senate Finance Committee Chair Ron Wyden, an Oregon Democrat, says, “I’m glad to see Ms. Trevino will be serving the American people,” adding, “I urge the White House to quickly announce a new nominee.” Farm groups welcomed her nomination last year, noting the work needed in agriculture trade. At the time, American Farm Bureau Federation President Zippy Duvall said, “Opportunities to create new trade agreements with the European Union and Great Britain as well as expanding the China Phase 1 agreement make filling this position with the most qualified person extremely important.” Trevino recently served as President of the Almond Alliance of California, and previously served as Deputy Secretary at the California Department of Food and Agriculture.
Report: Organic Grower Challenges and Seed Needs Loom Large
The organic industry’s State of Organic Seeds report shows no meaningful improvement in organic producers using more organic seed compared to five years ago. The report, announced this week along with the National Organic Research Agenda, concludes the lack of progress puts at risk the viability of the organic seed industry and the integrity of the organic label. Released by the Organic Farming Research Foundation and Organic Seed Alliance, the reports are published every five years to examine organic farming challenges across the United States. In 2019, the organizations were jointly awarded funding from the USDA’s National Institute of Food and Agriculture's Organic Research and Extension Initiative for the research projects. The organic food market experienced incredible growth in 2020, with sales surpassing $56 billion, a 12 percent increase from 2019. The organic seed market has also grown in recent years due to demand for organic food, as well as a dramatic rise in gardening during the COVID-19 pandemic.
EPA Further Restricts Over-the-top Dicamba use in Minnesota and Iowa
The Environmental Protection Agency this week announced further label restrictions on over-the-top use of Dicamba in Minnesota and Iowa. The changes, requested by pesticide registrants in consultation with those states, are intended to reduce risks from the use of over-the-top dicamba, an herbicide used to control certain types of broadleaf weeds. The revised labeling prohibits over-the-top dicamba application on dicamba-tolerant crops after June 20 in Iowa, and on dicamba-tolerant crops south of Interstate 94 after June 12 in Minnesota. The cut-off date for land north of Interstate 94 remains June 30. The revisions also prohibit the practice when the air temperature is over 85 degrees at the time of application or if the forecasted high temperature of the nearest available location exceeds 85 degrees in Minnesota. These restrictions are intended to reduce the likelihood of volatility and offsite movement of over-the-top dicamba by avoiding application on days with high temperatures, according to the EPA.
Equipment Dealer Groups Agree to Merger
The joint membership of four equipment dealer associations voted overwhelmingly in favor of moving forward with a merger to create the new North American Equipment Dealers Association. The organizations include the Midwest-SouthEastern Equipment Dealers Association, the United Equipment Dealers Association, the Western Equipment Dealers Association and the Equipment Dealers Association. The member vote was the final step in the merger process to create the new association of equipment dealers. A spokesperson for the working group overseeing the vote states, “A major reason for proceeding with this merger is our members will benefit from a larger, financially strong association that will provide more services.” The newly formed North American Equipment Dealers Association will continue to represent dealers on a national basis with manufacturer relations and in federal government affairs in Ottawa and Washington, D.C. The organization will also continue to represent dealers in their 24 U.S. state capitals and nine Canadian provinces.
Thursday Watch List
Markets
Top of the morning, USDA's weekly export sales report will be released Thursday at 7:30 a.m. CDT, along with weekly U.S. jobless claims, February U.S. housing starts and an update of the U.S. Drought Monitor. The Federal Reserve's report on industrial production in February is out at 8:15 a.m., followed by the Energy Department's weekly report of natural gas storage at 9:30 a.m. Traders will be watching for anything new out of Ukraine and will be wearing various shades of green.
Weather
A system moving out of the Rockies and into the Southern Plains has started to develop some moderate to heavy snow in eastern Colorado on Thursday. Additional showers will develop across the eastern half of the Southern Plains throughout the day. Showers on the northern edge of the system will turn into snow in Kansas while severe weather will be possible across eastern Texas and Oklahoma into Louisiana this evening. West Texas will be mostly bypassed by this system while drought continues in this area and only slight reductions are likely elsewhere.
Wednesday, March 16, 2022
Lawmakers Seek Biden Action on Fertilizer Prices
Lawmakers are raising their concern to President Joe Biden regarding record increases in fertilizer prices approaching the spring planting season. Senator Bill Hagerty, a Tennessee Republican joined by 18 senate colleagues, penned a letter to President Biden urging the administration to “immediately take all necessary steps to curtail the rising costs impacting American farmers and consumers.” Fertilizer is a primary input and major expense for farmers, and price increases will significantly affect farm profitability and the prices of food and consumer products, the senators wrote. Considering Russia's role as a key producer of fertilizer and necessary inputs of fertilizer, its invasion of Ukraine and sanctions imposed on the country are likely to cause shortages and price increases of fertilizer. The potential disruptions, coupled with skyrocketing energy prices, will harm American farmers, according to the lawmakers. The letter states, "We are therefore urging your administration to review all available options to lower the cost of fertilizer."
Study Highlights Benefits of Contract Nature of Chicken Industry
The National Chicken Council Tuesday released a study that presents the results of a recent broiler industry survey designed to capture key live chicken production statistics. In addition, the study summarizes several key trends in broiler production efficiency, returns and loan quality data. According to the most recent USDA data available, the $68,455 median income for chicken farmers was significantly higher than both all farm households and all U.S. households. Sixty percent of chicken farmers earned household incomes that exceeded the U.S.-wide median. The top 20 percent of contract chicken farmers earn on average $142,000, significantly higher than the top 20 percent of all farm households. In terms of broiler farm loan performance, data show significantly lower charge off and deficiency percentages for chicken farmers compared to all agricultural loans. In 2021, only six percent of respondent’s farmers left their company, including retirements. Of those, only 0.7 percent of farmers left due to contract termination.
Growth Energy Calls on DOE to Set the Record Straight on Anti-Ethanol Study
Growth Energy is urging the Department of Energy to address a recent “inaccurate and misleading” study about ethanol that claims to be partially funded by the department. Growth Energy CEO Emily Skor made the request in a letter to DOE Secretary Jennifer Granholm. Growth Energy says the study directly contradicts conclusions from the Department of Energy’s own Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies model, which has been tracking the impacts of corn-ethanol's lifecycle emissions since 1996. The study by University of Wisconsin–Madison researcher Tyler Lark claims carbon emissions from using land to grow corn can negate or even reverse any climate advantages of corn ethanol relative to gasoline. Skor of Growth Energy says, “Failing to address this research’s inconsistencies and departure from mainstream science could have negative consequences in our nation’s quest to decarbonize the transportation sector—both on the ground and in the air.”
2021/22 Sorghum Quality Report Released by U.S. Grains Council
The U.S. Grains Council just published its 2021/2022 Sorghum Quality Report. For the third year in a row, U.S. sorghum was, on average, graded above necessary requirements for U.S. No. 1, according to the report. Protein content in sorghum was up eight percent year over year, at 11.3 percent, up slightly from last year’s crop. Paige Stevenson, USGC manager of global trade, says, “In a market environment where protein demand is high, every percentage point counts in animal diets.” The report, funded through the Department of Agriculture’s Foreign Agricultural Service Agricultural Trade Promotion program, provides international customers and others accurate, unbiased information about the 2021 U.S. sorghum crop. To generate the report’s findings, a total of 97 samples were collected from 13 participating elevators located in Texas, Kansas, Nebraska and South Dakota between September 20, 2021, and February 16, 2022. The samples were analyzed by the Amarillo Grain Exchange and the Cereal Quality Lab at Texas A&M University.
Bayer Issues Statement on Operations in Ukraine
In a statement this week, Bayer says it is supporting colleagues impacted by Russia’s invasion of Ukraine. The company is prioritizing the safety of 700 colleagues in Ukraine and will continue to provide them and their families with financial aid, shelter, and evacuation assistance. Bayer is stopping all non-essential business in Russia and Belarus, while ensuring continued access to health and agriculture products. This includes suspending all advertising and other promotional activities, halting capital investment projects indefinitely, and not pursuing any new business opportunities. However, for essential health and agriculture products, Bayer says, “As a Life Science company, we have an ethical obligation - in every country we operate in.” Withholding essential health and agriculture products from the civilian populations - like cancer or cardiovascular treatments, health products for pregnant women and children, as well as seeds to grow food - would only multiply the war's ongoing toll on human life, according to Bayer.
Organic Valley Cooperative Launches Carbon Program
Organic Valley cooperative recently announced admissions of reaching carbon neutrality through a new carbon insetting program. The cooperative of small, organic family farms plans to work towards a carbon-neutral food system through a carbon insetting program. The program will incentivize and assist Organic Valley farmers with implementing regenerative, climate-smart farming practices. The CCIP, or CROPP Carbon Insetting Program, is designed to help Organic Valley reach carbon neutrality through real-world, deep emission reductions and carbon sequestration on member farms. This program will help Organic Valley become the first major dairy brand to reduce farm emissions without reliance on carbon offsets. Practices being considered for the 2022 CCIP pilot include tree plantings, improved manure management, renewable energy, energy efficiency, and enhanced grazing and cropland practices. Carbon insetting continues to gain traction among companies seeking an earth-centered approach to supply chains and carbon impact. Organic Valley aims to become the first major dairy brand to achieve carbon-neutral farm emissions without relying on carbon offsets.
Wednesday Watch List
Markets
At 7:30 a.m. CDT Wednesday, a report on U.S. retail sales for February will be released, followed by the Energy Department's weekly inventory report at 9:30 a.m. The Federal Reserve will conclude its two-day meeting and is expected to announce an increase in the federal funds target at 1 p.m., followed by a news conference with Chairman Powell. Traders continue to watch for the latest news from Ukraine.
Weather
An upper-level system will continue to bring scattered showers to the Southeast on Wednesday. Additional showers will continue to fall in the Pacific Northwest as well. But most areas will be mild and dry for the day. Hard red winter wheat continues to wake out of dormancy, but is finding dry soils in the Southern Plains. There is some hope for showers there on Thursday. Wetter soils along and east of the Mississippi River are making it difficult for some producers to get into their fields.
Tuesday, March 15, 2022
Strong Momentum Continues for U.S. Beef Exports; Pork Exports Trend Lower
Coming off a record-breaking performance in 2021, U.S. beef exports remained red-hot in January, according to the U.S. Meat Export Federation. Pork exports continued to trend lower in January, despite another outstanding month for exports to leading market Mexico. Beef exports totaled 119,066 metric tons, up 13 percent from a year ago, while value soared 57 percent to $1.03 billion. This was the third-highest value total on record – trailing only August and November of last year – and export value per head of fed slaughter set a new record, exceeding $500 for the first time. January pork exports totaled 208,808 metric tons, down 16 percent from a year ago, while export value fell 14 percent to $555.6 million. Exports to Mexico were up 36 percent from a year ago to more than 87,000 metric tons. January exports of U.S. lamb totaled 1,533 mt, up 49 percent from a year ago, while export value climbed 59 percent to $1.9 million.
NPB Adjusts Pork Checkoff Rate
National Pork Board delegates approved a change in the mandatory Pork Checkoff rate during the Pork Industry Forum last week. The current rate of $0.40 per $100 value per live animal will change to $0.35 per $100 effective January 1, 2023. The change represents a 12.5 percent reduction in the checkoff rate. The resolution – offered initially by Minnesota, Indiana and Ohio, but joined in support by Iowa, Nebraska, Illinois, Montana and South Dakota – passed the delegate body with 94 percent of shares voting in favor. The resolution reflects a recommendation of the Pork Industry Vision Task Force – a group of 19 industry leaders from the National Pork Board, the National Pork Producers Council and various states that reviewed the current structure and resource needs of the U.S. pork industry. The Task Force offered several recommendations to the Pork Act Delegate Body, which came before and were approved by delegates last week.
Bill Seeks to Coordinate Federal Programs for Rural Communities
Iowa’s Senators, Republicans Chuck Grassley and Joni Ernst, are promoting a bill to streamline federal resources available to rural communities. The legislation would create an Office of Rural Prosperity in the White House to coordinate the federal government’s programs supporting rural communities. Currently, there are more than 400 federal programs dedicated to helping rural communities. 13 different federal agencies have jurisdiction over the various programs, which includes over 50 offices and sub-agencies. The Rural Prosperity Act also requires the office to produce an annual comprehensive strategy for rural economic development, a Rural Prosperity Action Plan. Senator Grassley says, “I frequently hear from Iowans in rural communities who are having trouble navigating federal bureaucracy, making it more difficult to receive the assistance they need,” citing a need for the legislation. Ernst adds the legislation will “make sure we always have a voice and a seat at the decision-making table in our nation’s capital.”
Fischbach Introduces Landowner Easement Rights Act
Register Open for 2022 Stockmanship & Stewardship Events
Registration is open for three Stockmanship & Stewardship regional events from the National Cattlemen's Beef Association. During each event, producers can become BQA certified, network with fellow ranchers, participate in hands-on demonstrations, and learn cutting-edge operation techniques. The first event is planned for May 20-21 at Virginia Tech in Blacksburg, Virginia, the second June 16-18 in Leavenworth, Kansas, and the third August 12-13 at Auburn University in Auburn, Alabama. Stockmanship & Stewardship is a unique experience for cattle producers featuring low-stress cattle handling demonstrations, Beef Quality Assurance educational sessions, facility design sessions and industry updates. The program is sponsored by NCBA, Merck Animal Health, and the Beef Checkoff-funded National Beef Quality Assurance program. For more information about the events and to register, visit StockmanshipAndStewardship.org. Cattle producers attending a Stockmanship & Stewardship event are eligible for reimbursement through the Rancher Resilience Grant. To apply for a grant to cover registration costs and two nights hotel, visit ncba.org.
Apply by April 29 for Farm Bureau Ag Innovation Challenge
The American Farm Bureau Federation, in partnership with Farm Credit, is seeking entrepreneurs to apply online for the 2023 Farm Bureau Ag Innovation Challenge. Now in its ninth year, the national business competition showcases U.S. startup companies developing innovative solutions to challenges faced by America’s farmers, ranchers and rural communities. Farm Bureau is offering $165,000 in startup funds throughout the course of the competition, which will culminate in the top ten semi-finalists competing in a live pitch competition in front of Farm Bureau members, investors and industry representatives at the AFBF Convention in January 2023 in San Juan, Puerto Rico. AFBF President Zippy Duvall says, “The Ag Innovation Challenge is an outstanding avenue for identifying and supporting startup businesses striving to solve the problems facing rural America.” Applications remain open through April 29, and the ten semi-finalist teams will be announced on September 13. Eligibility guidelines and the competition timeline can be found at fb.org/challenge.
Tuesday Watch List
Markets
In addition to checking the latest weather forecasts, traders will watch for any sign of progress for a peace deal between Russia and Ukraine. At 7:30 a.m. CDT, the U.S. Labor Department will release its producer price index for February. The National Oilseeds Processors Association will have its soybean crush estimate for February later Tuesday morning and NASS is set to release its monthly Livestock, Dairy and Poultry outlook at 2 p.m.
Weather
An upper-level disturbance continues to create showers and thunderstorms near the Gulf Coast Tuesday morning. Moderate to heavy rain and some severe weather will be possible out of this system as it continues to spread eastward throughout the day. Rains will continue to improve conditions for drought scattered about the area. Warmer air will continue to spread across the rest of the country.
Monday, March 14, 2022
U.N. Food Agency Says Prices Could Rise 20 Percent
The United Nations Food Agency says international food and feed prices could jump by as much as 20 percent because of the war in Ukraine. The Food and Agriculture Organization says that would trigger a jump in global malnourishment. The agency says it’s not a sure thing that Ukraine will be able to harvest any crops if the war drags on, which would also impact the prospects for Russian exports this year. Russia and Ukraine combine to provide 19 percent of the world’s barley supply, 14 percent of the wheat, and four percent of the maize, which Reuters says makes up more than one-third of the global cereal exports. Russia is also a world leader in fertilizer exports. FAO’s Director-General says, “The likely disruptions to agricultural activities of these two major exporters of staple commodities could seriously escalate food insecurity globally.” The food price index already hit a record high in February.
More International Trade Missions in 2022
As part of USDA’s commitment to expanding and diversifying global market opportunities for U.S. agriculture, the agency will sponsor an additional four overseas trade missions this year. Ag Secretary Tom Vilsack announced it at Commodity Classic in New Orleans. He recently returned from a trade mission to Saudi Arabia, the agency’s first overseas trip since the start of COVID-19. “Each year, the Foreign Agriculture Service’s international team of marketing and trade experts pinpoint new and growing global markets that offer top-notch prospects for U.S. exports,” Vilsack says. While the final dates are yet to be confirmed, the trade missions will be in London, Manilla, the Philippines, Nairobi, Kenya, and Madrid, Spain. “The events of the last few years have certainly underscored the importance of diversifying our agricultural export markets,” Vilsack adds. Ag exports hit an all-time high in 2021, topping $177 billion. 28 markets around the globe each brought in $1 billion in U.S. exports.
USDA Investing in American-Made Fertilizer
The USDA announced it will support developing additional fertilizer production in the U.S. to address rising costs and spur competition. The agency will make $250 million available this summer through a new grant program to support independent, innovative, and sustainable American fertilizer production to help supply American farmers. To address growing concerns about competition in the agricultural supply chain, USDA will also launch a public inquiry seeking information regarding seeds and agricultural inputs, fertilizer, and retail markets. “Recent supply chain disruptions from COVID-19 to the war in Ukraine have shown us how important it is to invest in this crucial link in the agricultural supply chain here at home,” says Ag Secretary Tom Vilsack. Fertilizer prices have more than doubled since last year due to many factors. The top producers of the major components in fertilizer include China, Russia, Canada, and Morocco. Belarus also provides a significant share of the world’s potash exports.
Cattle Producers Welcome Contract Library Pilot Program
The recently-passed Fiscal Year 2022 Omnibus Appropriations Package funds several programs important to cattle producers. It also maintains key provisions that the National Cattlemen’s Beef Association has advocated for, including the Electronic Logging Device Exemption for livestock haulers, important EPA regulatory relief, and an extension of the Livestock Mandatory Reporting Program. The Cattle Contract Library Pilot Program is a critical tool as NCBA works to increase market transparency for cattle producers. NCBA says the pilot program marks a “win” for the U.S. cattle industry as it equips producers with the market data they need to make informed business decisions and capture more value for producing the highest-quality beef in the world. “The program allows USDA to work on the model for a contract library that works for everyone in the supply chain while Congress and industry continue to work on the details of a permanent library,” says NBCA VP of Government Affairs Ethan Lane.
Commodity Partnership Sets a Big Goal for Cover Crops
More and more customers of American agriculture want to source environmentally sustainable food and ingredients. That means manufacturers have to reevaluate their supply chains. Sustainability and continuous improvement on today’s farms form the foundation for meeting those needs. To make that happen at the farm level, the United Soybean Board, National Corn Growers Association, and the National Pork Board signed a partnership agreement with the USDA’s Natural Resources Conservation Service. That agreement led to a $1 million grant to the new Farmers for Soil Health Initiative. “As front-line environmental stewards, this effort will only increase sustainability advancements that farmers have implemented for generations while increasing carbon storage in soils sequestered by cover crops,” says Ralph Lott, USB Chair. The soil health initiative will use the grant to support farmers as they increase the use of cover crops and other conservation practices in a sustainable energy and protein system that meets the needs of customers.
U.S. Ag Tractor Sales Positive Across the Board
U.S. ag tractor and combine unit sales returned to positive numbers across all segments. Canada’s harvesters and four-wheel-drive units fell according to the latest data from the Association of Equipment Manufacturers. America’s total farm tractor sales grew 9.2 percent in February compared to 2021, while U.S. self-propelled combine sales for the month inched up 3.1 percent to 200 units sold. The 100+ horsepower two-wheel-drive segment once again led all of the segments with a 27.9 percent jump, followed by the sub-40 horsepower 2WD segment up 8.1 percent. Mid-range tractors between 40 and 100 horsepower climbed 7.1 percent, reversing the previous month’s decline. “This is another positive month for ag tractor and combine sales, up overall in both North American markets,” says Curt Blades, senior vice president of industry sectors and product leadership with AEM. “Strength in the commodity markets is continuing to drive a lot of the sales growth we are seeing.”
Monday Watch List
Markets
Back from the weekend with clocks correctly adjusted, traders will check the latest weather forecasts and any new developments from Ukraine before pausing at 8 a.m. CDT to see if USDA has an export sale announcement. USDA's weekly report of grain export inspections will be released at 10 a.m. Monday is also the final day of trading for March U.S. grain futures.
Weather
Coming off a very cold weekend, temperatures are quickly flipping to mild and the country will find these milder temperatures through the week as most places will feel like spring has finally arrived and it's here to stay. There will be some showers, however. A weak system will move out of the Rockies and into the Southern Plains on Monday, bringing scattered showers to eastern Oklahoma and Texas into the southern Delta, which may include some severe storms.