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Friday, April 29, 2022

Biden Administration Proposes to Spend $500 Million on Food Production

The Biden administration is calling on Congress for $33 billion in additional support for the people of Ukraine, who are still struggling under the Russian attack. Included in that proposal is $500 million in domestic food production assistance. The funds will support the increased production of U.S. food crops that are experiencing a global shortage due to the war in Ukraine, including wheat and soybeans. In a release from the White House, the administration says, “Through higher loan rates and crop insurance incentives, the request provides greater access to credit and lowers the risk for farmers growing these food commodities while lowering the cost for consumers.” Additional funding will also allow the use of the Defense Production Act to expand domestic production of critical minerals and materials disrupted by the war in Ukraine. The administration says these proposals help address economic disruptions and reduce price pressures at home and around the world.

Meatpacker CEOs Testify at House Hearing

CEOs of the four largest meatpacking companies in the U.S. appeared at a hearing held by the House Agriculture Committee. The Hagstrom Report says the committee called the hearing because of rancher complaints that meat industry consolidation and anti-competitive practices are making it hard to earn their living. They also say the concentration has led to a decline in the number of ranches across rural America. The four CEOs all say that market forces and circumstances in the overall economy are responsible for the ups and downs across the cattle markets. House Ag Committee Chair David Scott asked all four if they’ve ever worked together on supply or price issues, and each one said “no.” While Scott went back and forth with each CEO, he also said that the only way to resolve the challenges in the meat sector is to get a solution that works for both the ranchers and the meatpackers.

Proposed SEC Rule Could Hurt Every U.S. Farmer and Rancher

The American Farm Bureau and 119 other ag organizations sent a joint letter to the Securities and Exchange Commission regarding a proposed rule that may impact every American farmer and rancher. The groups want more time to comment on the proposed rule called “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” The SEC now wants to require public companies to report data on their entire supply chain. Almost every farmer’s and rancher’s products go through a publicly-traded company. That means farmers and ranchers could get forced to report personal information and business-related data. The new reporting requirements would create a heavy burden even for smaller farms having few or no employees. “Farmers and ranchers are already heavily regulated by multiple agencies at the local, state, and federal level,” says AFBF President Zippy Duvall. “The new requirements would make an already complicated patchwork of regulations even more cumbersome.”

CoBank: Rising Meat Prices Will Test Consumer Demand

U.S. consumer demand for meat at the retail level remains exceptionally strong despite rising prices caused by increased production costs and supply chain challenges. A new CoBank report says that may change soon. Once the full effect of increased costs of producer price inflation shows up in the retail meat case, demand will get tested. “Retail meat prices will remain high throughout 2022,” says Brian Earnest, lead animal protein economist with CoBank. “The sharply higher costs for feed, energy, and labor haven’t fully impacted wholesale and retail meat prices, but that will soon change.” He also says as consumers notice their dollar isn’t going as far as it once did, they may trade down at the meat case. Chicken could be the primary beneficiary. The combined cutout values of beef, pork, and chicken have climbed 22 percent year-over-year in the first quarter of this year, so consumers will see higher meat prices.

Purdue Study Shows Economic Impact of the RFS

A Purdue University study found that the Renewable Fuel Standard played a critical role in the economic health of rural America. The Purdue ag economist who led the study says this is the first comprehensive examination of market factors and policies affecting biofuels. The RFS played a critical role in reducing uncertainties in commodity markets, and its most significant impact was helping farmers use resources more efficiently. While producing more corn and soybeans as the years went by, U.S. farmers were able to bring fallow land that was previously unused back into production. U.S. annual farm incomes increased by $8.3 billion between 2004 and 2011, with an additional annual income of $2.3 billion between 2011 and 2016. The Purdue study looked at both short- and long-term price impacts of policies and other market forces on the expansion of the biofuels industry and accurately measured the impact of each market driver.

Climate-Smart Commodities Funding Deadline Approaching

The deadline for partners to apply for the first round of funding through the new Partnerships for Climate-Smart Commodities is Friday, May 6. USDA is committed to supporting a diverse set of farmers, ranchers, and forest owners through climate solutions that increase resilience, expand market opportunities, and strengthen rural America. This round of funding includes large-scale proposals from $5 million to $100 million that emphasize the greenhouse gas benefits of climate-smart commodity production. The proposals should also include direct, meaningful benefits to a representative cross-section of production agriculture, including small and/or historically underserved producers. “Don’t miss out on this opportunity,” says Robert Bonnie, USDA Undersecretary for Farm Production and Conservation. “We want a broad array of agriculture and forestry producers and landowners to see themselves in this effort.” A climate-smart commodity is defined as a commodity produced using agricultural practices that reduce greenhouse gas emissions or sequester carbon. More information is available at usda.gov.

Friday Watch List

At 7:30 a.m. CDT Friday, the U.S. Labor Department will release its employment cost index for the first quarter and the Commerce Department will publish personal income and spending statistics for March. The University of Michigan's index of consumer sentiment is out at 9 a.m. The Energy Department's monthly update of biodiesel plant capacity is also due out Friday.

Weather

A storm system emerging into the Plains will produce widespread showers for the North-Central U.S. on Friday. Showers will spread through a good portion of the country over the weekend. Bouts of severe weather will be possible with the system. Strong winds in the Plains will be yet another feature, bringing increased wildfire risks to areas that are very dry. The flood risk returns to the Red River Valley of the North with the increased precipitation amounts as well.

Thursday, April 28, 2022

Biden Administration Announces Global Food Aid

The Biden Administration Wednesday announced $670 million in food assistance in response to Russia’s invasion of Ukraine. The Department of Agriculture and U.S. Agency for International Development will draw down the full balance of the Bill Emerson Humanitarian Trust. USAID will use the $282 million from the trust to acquire U.S. food commodities for Ethiopia, Kenya, Somalia, Sudan, South Sudan, and Yemen. USDA will provide $388 million in additional funding through the Commodity Credit Corporation to cover transportation, shipping, handling, and other associated costs. Agriculture Secretary Tom Vilsack says, "America's farmers, ranchers and producers are uniquely positioned through their productivity, and through the Bill Emerson Humanitarian Trust to help.” The trust is a special authority renamed for Congressman Bill Emerson in 1998, that enables USAID’s Bureau for Humanitarian Assistance to respond to unanticipated food crises abroad when other resources are not available. This is the first time since 2014 the U.S. government has used the emergency funding authority.

Vilsack Authorizes Additional CCC Funds for HPAI Response

Agriculture Secretary Tom Vilsack Wednesday approved Commodity Credit Corporation funding to assist USDA’s Animal and Plant Health Inspection Service response to highly pathogenic avian influenza. The virus has been confirmed in 29 states, affecting more than 33 million domestic birds. APHIS is working closely with state animal health officials on joint incident responses in each affected state. To help ensure APHIS can continue to provide critical rapid response activities, Vilsack approved the transfer of nearly $263 million from the CCC to APHIS to directly support the response efforts. The funding allows APHIS to continue its work with state and local partners to quickly identify and address cases of HPAI in the United States. The Secretary is authorized to transfer funding from available resources to address emergency outbreaks of animal and plant pests and diseases. Secretary Vilsack previously approved the use of approximately $130 million in emergency funding in mid-March.

Strong Soybean Oil Demand Elevating Price

New data from USDA’s Economic Research Service shows demand for soybean oil increased its price in 2021 and so far in 2022. Soybean oil is the most widely used vegetable oil, and soybean oil use has typically accounted for over 50 percent of total domestic disappearance of all vegetable oil used in the United States. Given the versatility of soybean oil and the limited supplies of substitute oils, steady growth in food and industrial demand for soybean oil caused domestic prices to rise. In March 2022, USDA’s Agricultural Marketing Service reported that average monthly soybean oil prices in Decatur, Illinois, a leading indicator market for soybean oil, had reached 76 cents per pound, more than 40 percent higher than a year earlier. Rising monthly prices have contributed to increases in the 2021/22 U.S. season-average soybean oil price, currently projected at $0.70 per pound, an increase of 23 percent from the prior marketing year.

TFI Applauds STB Hearing on Freight Rail Service

The Fertilizer Institute President and CEO Corey Rosenbusch thanked the Surface Transportation Board for holding this week’s hearing on “Urgent Issues in Freight Rail Service.” Rosenbusch says, “We appreciate the opportunity to provide testimony on how rail service issues are negatively impacting the cost and timely delivery of fertilizer inputs to farmers.” TFI cited issues such as the implementation of precision scheduled railroading, a lack of competition, and a lack of structural and market-based incentives to be customer-oriented, leading to reduced rail service, high shipping rates, and poor cycle times. The STB also heard testimony from Department of Transportation Secretary Pete Buttigieg and Department of Agriculture Deputy Secretary Dr. Jewel Bronaugh (Bro-NAW), both of whom mentioned the importance and challenges facing fertilizer shippers, as well as other agriculture groups such as the American Farm Bureau Federation and the National Grain and Feed Association. Rosenbusch adds, “these issues are felt broadly, are having negative impacts, and must be addressed through modern reforms.”

CME Group to Launch Canadian Wheat Futures

CME Group Wednesday announced the launch of Canadian Wheat futures on June 13, pending regulatory review. The contract offers market participants a new tool to directly manage exposure to the Canadian wheat market. Tim Andriesen, Managing Director of Agricultural Products at CME Group, says, “Canada is the world's second largest producer of spring wheat and is one of the world's top wheat exporters, making it an increasingly important region for our global clients.” Other officials say the contract will bring great price transparency to the market. Canadian Wheat futures will be cash-settled and will closely track the shipment of grains from Vancouver, where the bulk of Canadian western red spring wheat is exported. The Canadian Wheat contract will be based on the Platts Canadian Western Red Spring Wheat for Number 2 CWRS 13.5 percent protein Vancouver daily price assessment. Canadian Wheat futures will be listed by and subject to the rules of the Chicago Board of Trade.

Former USDA Animal Inspector Pleads Guilty for Accepting Bribes

A 68-year-old Laredo, Texas, man has admitted to accepting bribes while employed by the Department of Agriculture. The U.S. Justice Department this week announced Roberto Adams pleaded guilty to accepting more than $40,000 in bribery payments while working as a USDA lead animal health technician. Adams inspected cattle entering the United States to determine if they met the necessary health requirements to enter the country. Over the course of at least 14 months, Mexican cattle brokers paid Adams to allow cattle into the country without proper quarantine or legitimate inspection.   Adams will be sentenced in August and faces up to 15 years in prison and a possible $250,000 maximum fine. The FBI conducted the investigation with the assistance of the USDA  Office of Inspector General. Assistant U.S. Attorney Heather Winter is prosecuting the case. Data shows that U.S. annual cattle imports from Mexico average more than 1.25 million head per year.

Thursday Watch List

USDA's weekly report of export sales is due out at 7:30 a.m. CDT Thursday, the same time as weekly U.S. jobless claims, first quarter U.S. GDP and an update of the U.S. Drought Monitor. The Energy Department's weekly report of natural gas storage is set for 9:30 a.m. Russia continues to keep traders on edge and the latest weather forecasts also remain important.

Weather

A weak disturbance will produce some scattered showers across the midsection of the country on Thursday. Some pockets of moderate to heavy rain will be possible but will be isolated in that regard. Another system moving into the Pacific Northwest will set up a stronger system for Friday and the weekend. Temperatures will remain cool across the north but are rising across the Central and Southern Plains.

Wednesday, April 27, 2022

NCBA: Opposition to Government Mandate Amplified Through Senate Hearing

Senate Agriculture Committee members heard from the beef industry Tuesday regarding the Cattle Price Discovery and Transparency Act. The hearing, proceeded by months of debate over the need for increased transparency in cattle marketing, highlighted the vehement opposition to government mandates by a majority of U.S. cattle producers. Ethan Lane, National Cattlemen’s Beef Association Vice President of Government Affairs, says, “What is being proposed right now concentrates on what works for one region, it simply doesn’t work for the rest of the country.” NCBA opposes a government mandate as it could potentially result in fewer marketing opportunities and less incentive for producers to invest in genetics and innovative production techniques that lead to higher-quality beef. NCBA “stands committed to turning the focus to solutions with broad industry support,” such as a cattle contract library, 14-day delivery, expedited carcass weight reporting, daily formula base price reporting, and incentives for expanding regional processing capacity.

Ranch Group Urges FTC, DOJ to Investigate Vertical Integration of Cattle Feedlots

As the beef sector focused on a congressional hearing Tuesday, one group urged the Federal Trade Commission and Department of Justice to investigate vertical integration in feedlots. R-CALF this week announced formal comments submitted to the federal government on the issue. The organization says that while beef packer concentration has plateaued since 2009 at the four-firm level of between 83 percent and 86 percent, it is now evident that major concentration and vertical integration efforts are underway in the feedlot sector of the live cattle industry. The group says the structure of the beef packing industry is now being pushed upstream into the live cattle supply chain. In its comments, the group urged the agencies to investigate to determine the degree of buyer power the concentrated beef packers exercise over those feedlots – in particular, the 77 largest feedlots. The agencies asked for public comments to help them improve enforcement of U.S. antitrust laws regarding both horizontal and vertical mergers.

USTR Tai Holds Trade Dialogue with United Kingdom

U.S. Trade Representative Katherine Tai met with her counterpart in the United Kingdom this week as part of the second U.S.-UK trade dialogue. While not official trade negotiations, the dialogues focus on the future of trade between the two countries. Ambassador Tai and UK Secretary of State Anne-Marie Trevelyan (trev-el-lynn) hosted a series of roundtable discussions with a group of stakeholders from the U.S. and UK business community. The trade officials agreed to build resilience in supply chains, address the global trade impacts of Russia's invasion of Ukraine, and promote environmental protection, among other topics. Drawing on the stakeholder discussions and bilateral talks, the duo directed their teams to work at pace over the next several weeks to develop an ambitious roadmap with economically meaningful outcomes in these areas. Other focus areas include labor and environmental standards, promoting innovation, and economic growth. Tai and Trevelyan previously held a similar trade dialogue in March.

Vilsack Highlights Investment in Watershed Infrastructure in North Carolina

Visiting North Carolina this week, Agriculture Secretary Tom Vilsack highlighted USDA’s investment of more than $39 million in six watershed infrastructure projects in the state. The six projects include rehabilitating dams, flood prevention, and watershed restoration projects, and are funded by President Biden’s Bipartisan Infrastructure Law. Making the stop Tuesday with Environmental Protection Agency Administer Michael Regan, Vilsack says, “These projects illustrate this administration’s commitment to investing in rural America.” Vilsack and Regan visited Franklin County, North Carolina, where they visited Franklin County Public Utilities as part of the Building A Better America Rural Infrastructure Tour to highlight infrastructure investments. USDA’s Natural Resources Conservation Service is assisting with projects in North Carolina. In total, NRCS received $918 million of funding to allocate through its watershed programs, which the agency began implementing earlier this year. A full list of projects is available on NRCS’ Bipartisan Infrastructure Law webpage.

USA Rice Raises Rail Shipping Concerns

USA Rice recently submitted comments to the Surface Transportation Board outlining several rail shipping issues impacting the industry. The comments urged STB to take lasting actions to resolve and prevent the issues from reoccurring. The comments highlighted the rice industry's predicament of low rice prices and ever-increasing input costs, record-high inflation, and lower production forecast for 2022. The rice industry has made a push over the last several years for customers to use rail over other methods of transportation, given its efficiency. However, ongoing issues, including rail congestion, labor shortages, marginal equipment, and the lack of box and hopper cars to ship rice is hampering the industry's ability to do so and causing shippers to resort to other, less efficient, and costly methods of transportation. The issues have resulted in crushing losses to not only rice shippers, but also rice end-users that have been forced to shut down production due to rice shortages.

USDA Opens Grants Application to Improve SNAP Customer Service

USDA’s Food and Nutrition Service Tuesday announced $5 million in competitive grants are available to enhance efficiency and access in the Supplemental Nutrition Assistance Program. The SNAP Process and Technology Improvement multi-year grants seek to improve the experience of SNAP participants by enabling grantees to update inefficient or ineffective processes or use technology to streamline operations. The application process also requires grant applicants to demonstrate how their initiatives will affect SNAP with respect to equity and inclusion. Stacy Dean, USDA’s deputy undersecretary for food, says, “FNS is deeply committed to improving SNAP so that all Americans can get the healthy food they need,” Previous grantees have used funding for SNAP improvements such as making mobile applications easier to use, implementing live call centers, or creating automated text messaging notifications to remind households of key actions required to maintain benefits. The application process is open now, and the three-year grants will be announced this fall.

Wednesday Watch List

A report on March U.S. pending home sales is due out at 9 a.m. CDT, followed by the Energy Department's weekly inventory report, including ethanol production at 9:30 a.m. Traders continue to monitor the latest weather forecasts, events in Ukraine and any export sales announcements.

Weather

A system moving through the Northern Rockies and western Canadian Prairies will produce some isolated to scattered showers on Wednesday. Another piece of that system will emerge into the Plains late on Wednesday night with some isolated showers and thunderstorms. A few may happen upon the drier southwestern Plains, but amounts will likely be trivial or absent for most areas. Eastern areas will see quieter and colder conditions. Morning frosts may cause some limited damage to advanced wheat.

Tuesday, April 26, 2022

African Swine Fever Vaccine Passes Tests Required for Regulatory Approval

Scientists with USDA’s Agriculture Research Service Monday announced that a vaccine candidate for African swine fever passed an important safety test required for regulatory approval. The successful safety test moves the vaccine one step closer to commercial availability. The new results show that USDA's vaccine candidate does not revert to its normal virulence, after being injected into swine. This "reversion to virulence" test is required to ensure that the vaccine's weakened form of the ASF virus does not revert to its original state. The safety studies are necessary to gain approval for use in Vietnam and eventually in other countries around the world. However, future commercial use will depend on approval from the department of animal health within each requesting country. Further development will continue once the vaccine candidate receives regulatory approval from Vietnam. Although the virus is causing profound economic losses to the swine industry, there have not been any outbreaks in the United States.

CoBank: Ukraine/Russia War Upending Grain and Energy markets

The Ukraine-Russia war has reignited speculation that globalization is coming to an end, and markets should prepare to turn inward to deal with disrupted supply lines and geopolitical challenges. The war will undoubtedly have long-lasting implications. However, according to a new Quarterly report from CoBank's Knowledge Exchange, an unwinding of global supply chains and world markets is unlikely to be one of them. Still, Russia's invasion of Ukraine agitated global grain trade and contributed to unprecedented price volatility in wheat, corn and soybeans. Grain markets could remain volatile for two or more years due to disruptions in planting, harvesting, input application and transportation. Prices for major fertilizers increased between eight percent and 13 percent during the first quarter of 2022, with the biggest spikes coming after Russia invaded Ukraine. While most U.S. ag retailers have adequate nutrient supplies this spring, the report says that may not be the case this fall and in spring 2023.

Growth Energy Holds EPA to RVO Deadline of June 3

A U.S. District Court Monday approved a consent decree agreement between Growth Energy and the Environmental Protection Agency that requires EPA to finalize its 2020-2022 Renewable Volume Obligations no later than June 3. The consent decree follows Growth Energy’s multiple notices of intent to sue and a complaint in federal district court in response to the agency’s extended delay in issuing the RVOs. Growth Energy CEO Emily Skor says, “We are encouraged by EPA’s commitment to this deadline, as it gives more credence to the agency’s stated intention to get the RFS back on track.” In December, Growth Energy submitted a notice of intent to sue regarding EPA’s failure to timely fulfill the agency’s statutory obligation under the RFS to issue the 2022 RVO and, in turn, the potentially multi-year "set" rulemaking process for renewable fuel volumes for 2023 and beyond. The RVOs for 2022 were due by November 30, 2021, an annual deadline set by Congress.

USDA Lets More Packing Plants Return to Faster Line Speeds

USDA’s Food Safety and Inspection Service last week announced it approved the Clemens Food Group pork packing plant in Coldwater, Michigan, to run faster line speeds under a one-year trial program. The agency now has let four plants operate with faster harvesting line speeds, which could increase packing capacity and alleviate supply issues in the face of strong pork demand. FSIS established the line speeds program last November, after a provision in USDA’s 2019 New Swine Inspection System was struck down by a U.S. District Court in March 2021. Nine pork packing plants that had adopted the program, six of which were operating with faster line speeds, were allowed to apply for the program, under which they need to collect data on the effects of the faster speeds on workers and share it with USDA. The National Pork Producers Council says the information could be used to formulate a new regulation for allowing plants to run faster line speeds.

Anuvia Secures $65.5 Million to Scale U.S. Production of Sustainable Fertilizer

Anuvia Plant Nutrients Monday announced it has raised $65.5 million in Series D funding to increase production capacity at its U.S.-based eco-friendly manufacturing facility. The funding will also expand commercialization of its line of field-ready bio-based fertilizers for large-scale agriculture. The funding announcement comes at a time when the Department of Agriculture has pledged $250 million to support "innovative American-made fertilizers," underscoring the need to reduce dependence on traditional fertilizers sourced internationally. Anuvia CEO Amy Yoder says, “Anuvia's production is entirely U.S. based, ensuring supply-chain security for North American growers." Recently, Anuvia completed the expansion of its facility in Plant City, Florida. The facility has the capacity to expand to 1.2 million tons per year, enough to service over 20 million acres. According to an environmental audit, for every million acres of crops that use Anuvia's products, the reduction of greenhouse gases is the equivalent of removing up to 30,000 cars from the roads.

Weekly Fuel Prices Increase

Fuel prices increased last week for the first time in more than a month. The price of gas climbed 4.4 cents from a week ago to a national average of $4.11 per gallon. The national average is down 13.3 cents from a month ago and $1.24 per gallon higher than a year ago. Meanwhile, the national average price of diesel increased 4.6 cents in the last week and stands at $5.07 per gallon. GasBuddy’s Patrick De Haan warns prices could be headed higher in the short term. De Haan says that “with the French election now behind us, there is risk that the EU could pursue harsher sanctions on Russia’s energy, which could cause oil prices to rise if it happens.” In addition, U.S. oil inventories continue to decline, putting additional pressure on prices. U.S. retail gasoline demand saw a slight dip last week. Nationally, weekly gasoline demand fell 0.7 percent from the prior week.

Tuesday Watch List

A report on March U.S. durable goods orders is set for 7:30 a.m. CDT Tuesday, followed by March U.S. new home sales and an index of U.S. consumer confidence for April at 9 a.m. As usual, traders will keep up on the latest weather forecasts and pause at 8 a.m. CDT, in case USDA has an export sale announcement.

Weather

A frontal boundary continues to slide eastward with scattered showers on the East Coast for Tuesday. Additional showers will move through the Pacific Northwest and western Canadian Prairies throughout the day as well. The rest of the country will be mostly dry. Northern areas continue to be colder while the southwestern Plains will start to see temperatures rising. Cold morning temperatures in portions of the Plains may lead to some frost damage in limited areas Tuesday morning as well.

Monday, April 25, 2022

Farm Lending Activity Accelerates in Early 2022

The Federal Reserve Bank of Kansas City says farm lending activity at commercial banks increased during the first quarter of 2022 due to a significant increase in the size of operating loans. With some input costs surging in recent months, the volume of operating loans increased sharply from a year ago, and non-real estate lending increased on a rolling four-quarter basis for the first time since mid-2019. While the outlook for the U.S. ag economy in 2022 remains strong alongside higher commodity prices, rising input costs are raising concerns about future profitability. The escalation of the conflict in Ukraine and associated market disruptions are pushing commodity prices even higher. The turmoil is also causing rapid increases in the price of major inputs like fuel and fertilizer sourced from Russia and Ukraine. Concerns about the cost and availability of agricultural inputs intensified, and higher feed prices could also put pressure on profit margins for livestock producers.  

Dairy Industry Seeking Additional Export Supply Chain Help

The U.S. Dairy Export Council and the National Milk Producers Federation sent a letter to the White House regarding specific recommendations to help solve supply chain issues. The top recommendation calls for USDA’s Agriculture Marketing Service to restart its Ocean Shipping Container Availability Report. “Shipping containers for U.S. dairy exports continue to be in short supply at coastal ports and even more so at inland locations,” says Jim Mulhern, President and CEO of NMPF. “These essential links in the global supply chain must be available to exporters.” Other recommendations include setting up pop-up terminal yards in inland locations like Minneapolis and Chicago. That would make it easier to secure shipping containers. They also want to see trucking “fast lanes” dedicated to delivering perishable agricultural goods as quickly as possible at port terminals. Krysta Harden, president and CEO of USDEC, says supply chain issues have cost dairy exporters over $1.5 billion last year alone.

Veterinarians Heading to Capitol Hill

On April 27, 200 veterinarians will head to Capitol Hill to meet with senators and representatives to talk about legislation that will increase access to veterinary services in rural areas. They also want to talk about legislation to help in reducing the spread of diseases that pose a threat to animal and public health. The American Veterinary Medical Association’s annual fly-in will feature attendees from 48 states and 20 veterinary schools. They’ll talk to officials about passing the Veterinary Medicine Loan Repayment Program and the Healthy Dog Importation Act. The AVMA says it’s united in asking Congress for help alleviating a shortage of veterinarians by assisting with the significant obstacle of student debt. The group also says strengthening dog importation standards will decrease the chances of future disease outbreaks from the 1.2 million dogs imported every year into the U.S. The goal is to maintain vibrant rural communities while keeping animals and people safe.

USDA Announces $800 Million Investment on Earth Day

In honor of Earth Day, Ag Secretary Tom Vilsack announced that the USDA is investing nearly $800 million in climate-smart infrastructure in 20 states and Puerto Rico. These investments are designed to strengthen the health and livelihoods of people across rural America. They include funding for 165 projects for expanding access to safe water and clean energy for people living in disadvantaged communities. “People in rural America are experiencing the increasing impacts of climate change in many ways,” says Vilsack. “This includes more severe droughts, more frequent wildfires, and more destructive and life-threatening storms.” He also says investing in infrastructure in rural communities is investing in the planet and the peace of mind that children will drink clean and safe water in their homes. The agency will take steps to improve clean energy infrastructure, energy-efficiency improvements, improve infrastructure in communities hit by severe weather, and advance equity in rural communities.

Corn, Ethanol Groups Celebrate Earth Day

Ag groups like the National Corn Growers Association celebrated Earth Day last week by reminding its members to commit to improving the environment. “Leaving the world in better shape than we found it” is a part of policy upheld by U.S. corn farmers. The group encouraged corn farmers to review their best-management practices, consider planting a pollinator habitat, fill their gas tanks with cleaner-burning ethanol blends, and maximize their nutrient applications. Growth Energy says Earth Day is especially important given the administration lifted the restrictions on summertime E15 sales. “We can’t get to net-zero emissions without biofuels,” says Growth Energy CEO Emily Skor. “Biofuels like ethanol reduce greenhouse gas emissions by 46 percent compared to gasoline. They’re an accessible, plant-based fuel source that can immediately help improve air quality alongside other clean energy solutions.” The group says a nationwide E15 standard could reduce carbon emissions by more than 17.6 million tons.

Nebraska Legislature Passes E15 Sales Credit

One week after the Biden administration decided to allow for the summertime sale of E15, Nebraska’s lawmakers passed a bill that will provide incentives for retailers who sell the biofuel. KNSB in Nebraska says LB596 allows for a credit of five cents on each gallon of E15 retailers sell and eight cents per gallon of E25 or higher blends sold. The goal is to make ethanol more affordable for retailers who are helping keep fuel prices down for consumers. “At the retail level, E15 is a better fuel, and it costs less,” says Randy Gard, Nebraska Ethanol Board Secretary. “We are excited the bill got passed and to see what it can do for customers.” Gard also says Nebraska retailers have nothing standing in their way to making the transition from E10 and joining the conversion to E15. “The incentives are there, consumer demand is there, and it’s a win for everyone,” Gard adds.

Monday Watch List

Back from the weekend, traders will check the latest weather forecasts assess snow cover in the northern Plains, monitor events out of Ukraine and watch for a possible export sales announcement at 8 a.m. CDT. At 10 a.m. CDT, USDA will release its weekly export inspections report, followed by Crop Progress at 3 p.m.

Weather

A storm over the weekend brought more heavy precipitation to the Plains and Midwest along with falling temperatures. The front to the system is situated from the Southern Plains to the eastern Midwest and will push southeast throughout the day. Scattered showers will follow the front, which may be heavy at times. Cold air settling behind the front is not ideal for planting, especially when combined with wetter soils across a good portion of the Corn Belt. Drought continues to have negative impacts in the southwestern Plains.

Friday, April 22, 2022

FBI Warns Ag Cooperatives About Possible Cyberattacks

The Federal Bureau of Investigation’s cyber division is warning agricultural cooperatives across the country to be wary of possible cyberattacks. The division wants cooperatives to take all possible precautions to keep their operations safe. The FBI says ransomware attacks typically happen on ag cooperatives during the critical planting and harvest seasons. The attackers hope to disrupt operations, cause financial loss, and damage the food supply chain. 2021 saw several attacks on ag cooperatives during the harvest. So far, DTN says two ag cooperatives have been hit by cyberattacks this year, one in February, and the other in March. One company is a feed mill, and the other is a multi-state grain company providing seed, fertilizer, and logistical services. The FBI didn’t share the name of either company or any additional information. Cyberattacks have recently hit 14 of 16 critical infrastructure sectors in the U.S., including food and agriculture, the defense industry, and others.

IGC Prediction Calls for Lower Global Corn and Wheat Production

The International Grains Council is forecasting global corn production will drop by 13 million tons in the 2022-2023 season. Reuters says the council’s prediction is 1.197 billion tons because of smaller crops in Ukraine and the United States. The first full assessment forecasts Ukraine’s corn crop to drop from 41.9 million tons last season to 18.6 billion. The IGC says the Black Sea region’s conflict makes its current forecast “especially tentative.” The United States, the world’s leading corn producer, will harvest 376.6 million tons, down from last year’s 383.9 million. The council also forecasts a decline of one million tons in global wheat production. The 2022-2023 total will be 780 million tons, due in large part to a smaller crop in Ukraine, which will be 19.4 million tons compared to 33 million last year. The drop will be mostly offset by larger crops in other countries, including Russia and Canada.

Environmental Group Wants Changes to Crop Insurance Program

The Natural Resources Defense Council released a report that calls for changing the Federal Crop Insurance Program. They’re particularly interested in finding ways to incentivize practices that reduce risk and lower the cost of taxpayer-subsidized payouts. As a first step, the report says the crop insurance program should include good stewardship or performance-based discounts that reward farmers who use good soil health practices with a higher premium subsidy or an adjusted insurance premium rate. Rate adjustments could increase the adoption of regenerative practices that improve soil health and mitigate damage to crops, which would lower the cost of crop insurance over time. They recommend that Congress authorize long-term funding for a crop insurance savings program for soil health practices that are modeled on the Pandemic Cover Crop Program. They also want the Risk Management Agency to adopt insurance premium formulas that account for risk mitigation of soil health management practices.

USDA Investing $420 Million in Infrastructure Projects

The USDA announced it will invest $420 million in 132 infrastructure projects in 31 states. The funds will get used for projects like rehabilitating dams, flood prevention, and watershed restoration projects. The investments are funded through the Bipartisan Infrastructure Law and build on an earlier $166 billion investment earlier this year. “The infrastructure law is a once-in-a-generation opportunity to rebuild our infrastructure, create good-paying jobs, and build new economic opportunity,” says Ag Secretary Tom Vilsack. “Our watershed programs help communities rebuild after natural disasters and prepare for future events.” He also says that includes typically underserved communities. The administration intends to grow the economy from the bottom up and middle out, and it will occur in partnership with rural communities. The funding comes from the Watershed and Flood Prevention Operations Program, which provides technical financial assistance for new watershed infrastructure, and the Watershed Rehabilitation Program, which upgrades existing NRCS dams.

What to Know About U.S. Dairy on Earth Day

Earth Day is Friday, April 22, and the U.S. dairy industry always has reasons to celebrate the event. The National Milk Producers Federation says it’s an opportunity to refocus on its environmental and climate leadership within agriculture in the U.S. and around the world. Due to innovative farming and feed practices, a gallon of milk in 2017 required 30 percent less water, 21 percent less land, and a 19 percent smaller carbon footprint than in 2007. The UN Food and Agriculture Organization says North America was the only region in the world to reduce its greenhouse gas emissions since 2005 even as it increased milk production. That means the greenhouse gas intensity for dairy products is the lowest in the world. Dairy farms help guard against food waste by taking byproducts from other industries, such as almond hulls and brewer’s grains, and using them as feed. U.S. dairy intends to be GHG-neutral by 2050.

Ethanol Output Nears Seven-Month Low

The Energy Information Administration says ethanol output plunged to its lowest level in almost seven months during the week ending on April 15. Ethanol inventories also dropped to multi-month lows. Ethanol production fell to an average of 947,000 barrels a day during the week. The EIA report says that’s down significantly from the 995,000 barrels a day produced during the previous week. It’s also the lowest production level since the seven days ending on September 24. In the Midwest, the biggest-producing region of the country, output hit 889,000 barrels a day, down from 935,000 barrels a week earlier and the lowest level since late September. Gulf Coast and West Coast production levels dropped by 1,000 barrels a day, while output on the East Coast and in the Rocky Mountain region stayed steady with the previous week. Ethanol inventories fell to 24.34 million barrels, the lowest level since the week ending on January 14.

Friday Watch List

Friday is a quiet day as far as reports are concerned, but USDA's Cattle On-Feed report for April 1 will be released at 2 p.m. CDT. Traders will watch for a possible export sale announcement at 8 a.m. CDT, check the latest weather forecasts and keep an eye out for any news regarding Ukraine.

Weather

A storm system in the Rockies will eventually move out into the Plains late on Friday. Ahead of its arrival, showers moving across the Upper Midwest will spread northeast while additional strong to severe storms will be possible this afternoon and evening across the western Plains. That includes the driest areas of wheat country, but showers should be spotty until they get into the eastern Plains overnight. Winds are also increasing and will be quite strong in the Plains, reducing soil moisture further. Temperatures are also on the increase in these areas, which will only increase soil moisture losses.

Thursday, April 21, 2022

Biden Administration Launches Rural Partners Network

The Department of Agriculture Wednesday announced the launch of the Biden administration's Rural Partners Network. Led by USDA, the network will help rural communities access government resources and funding to create jobs, build infrastructure and support long-term economic stability. Agriculture Secretary Tom Vilsack says, "The Rural Partners Network will help communities get funding for investments that create long-lasting benefits for their communities, especially those that have been overlooked in the past." The Rural Partners Network is a first-of-its-kind collaboration between federal agencies and local leaders and residents. The network is focused on improving social and economic well-being bolstered by existing local partnerships and assets, according to USDA. The network will launch in selected communities in Georgia, Kentucky, Mississippi, New Mexico, as well as certain Tribes within Arizona. Community networks within these states will receive individualized support with the expertise to navigate federal programs, build relationships and identify additional resources to promote community-driven solutions.

Lawmakers Urging Supreme Court to Adopt Limited WOTUS Rule

A group of lawmakers jointly filed an amicus brief supporting the petitioners in the pending U.S. Supreme Court case Sackett v. Environmental Protection Agency. The decision in the case will clarify what waterways are considered "waters of the United States," or WOTUS, which will determine the scope of the federal government’s authority in regulating private citizens and businesses under the Clean Water Act. Specifically, the brief argues that the Supreme Court should adopt a longstanding, limited-scope definition of WOTUS proposed by Justice Antonin Scalia in a 2006 case. Senate Republican Chuck Grassley of Iowa helped lead the effort. Grassley and the lawmakers say, “we support policies that protect the environment while also ensuring that States retain their traditional role as the primary regulators of land and water resources.” Grassley adds, “This case presents an opportunity for the Court to finally put the genie back in the bottle.” More than 100 U.S. Representatives also signed the brief.

AFBF: NEPA Changes Signal Return to Outdated, Cumbersome Regulations

American Farm Bureau Federation President Zippy Duvall commented Wednesday on the final phase 1 revisions to the National Environmental Policy Act, known as NEPA. Duvall says, “AFBF is disappointed that the Biden administration has decided to reverse commonsense reforms to the National Environmental Policy Act.” AFBF says farmers and ranchers share the goal of caring for the natural resources they’ve been entrusted with and were pleased that the updated 2020 regulations allowed them to protect the environment while meeting the demands of a growing nation. However, continued challenges from the pandemic, supply chain issues and the drought in the West are impacting farmers and the American public with increased food and fuel prices. Duvall says, “The situation will now be made worse by the return to a slow and cumbersome NEPA review process that, in many cases, takes years to complete.” The National Cattlemen’s Beef Association and Public Lands Council expressed similar disappointment over the action earlier this week.

FFAR & NPB Focus on Continuous Air Quality Improvement Efforts

The Foundation for Food and Agriculture Research, partnering with the National Pork Board, announced the Improving Swine Production Air Quality Program Wednesday. The program dedicates $1 million in grant funding to develop objective measures for key air quality components and concentrations in and within 500 meters of swine production facilities. Using objective methods and metrics assessing air quality is critical for understanding the source of swine production particulates and developing continuous improvement efforts. However, existing air quality measurements are subject to bias, preventing the development of effective strategies to improve air quality. Swine production air quality studies reveal that researchers unintentionally introduce bias in a variety of ways, clouding efforts to understand the challenges and opportunities. This new research program aims to develop a scientifically valid assessment of particulate levels inside and immediately outside of swine facilities. NPB’s Heather Fowler says, “Projects such as this will allow us to continue to measure where we are today and look for areas of continuous improvement in the future.” 

USGC Releases 2021/2022 Corn Export Cargo Quality Report

The U.S. Grains Council Wednesday released its 2021/2022 Corn Export Cargo Quality Report. The report shows the average aggregate quality of U.S. corn samples tested was better than or equal to U.S. No. 2 on all grade factors. The report is based on 430 export cargo samples collected from corn shipments undergoing federal inspection and grading processes at export terminals. It also provides information on grading, handling and how U.S. corn is moved and controlled through export channels. Average test weight found by the analysis was higher than in 2020/2021 and the five-year average, with nearly 99.8 percent of samples at or above the minimum requirements for U.S. No. 1 grade corn, indicating overall good quality. Chemical composition indicated protein concentration higher than 2020/2021 and the five-year average with lower starch and higher oil concentrations than the previous year. All but two export samples tested below the U.S. Food and Drug Administration action level for aflatoxins.

Illinois Governor Signs Biodiesel Use Bill into Law

Illinois Governor J.B. Pritzker this week signed into law a bill that incentivizes increasing blends of biodiesel. The bill extends the current B10 sales tax exemption until 2023 and then increases the biodiesel blend level subject to the tax exemption to B13 in 2024, B15 in 2025 and B19 in 2026 in the state. Clean Fuels CEO Donnell Rehagen applauded the effort, saying the legislation "will expand that demand and solidify Illinois as a leading source and user of better, cleaner biodiesel." Illinois is currently fourth among all states in biodiesel production and third in consumption, with 160 million gallons consumed annually. The legislation was spearheaded and guided through the legislative process by the Illinois Soybean Association with support from Clean Fuels Alliance America and several of its member companies, including REG and ADM. The organizations cite a recent study that found in Chicago, switching to B100 would decrease diesel particular matter-related cancer risks by up to nearly 1,600 cases.

Thursday Watch List

USDA's weekly export sales report is due out at 7:30 a.m. CDT Thursday, along with weekly U.S. jobless claims and an update of the U.S. Drought Monitor. At 9:30 a.m., the Department of Energy will release its weekly report of natural gas storage. The latest weather forecasts and any news from the war in Ukraine will continue to be closely watched.

Weather

A system continues to push showers through the Eastern Corn Belt and Northeast on Thursday. Its cold front remains draped across the middle of the country and more showers and thunderstorms are expected to develop later today, especially over Kansas and Missouri before heading north overnight. Some of those storms could be severe with a large hail threat. A system moving through the West will produce widespread showers before moving into the Plains on Friday.

Wednesday, April 20, 2022

NCBA: Biden NEPA Framework Compromises Environmental, Economic Goals

The National Cattlemen’s Beef Association and the Public Lands Council Tuesday expressed concern over the Biden administration’s National Environmental Policy Act, or NEPA rule. NCBA and PLC say the rule undermines progress made over the last several years when efficient regulatory processes are critical to environmental and economic sustainability. PLC Executive Director Kaitlynn Glover says, “When it comes to federal regulations, ranchers are often caught in the middle of political whiplash, and this process is no exception.” In addition to their role in water, transportation, and conservation projects nationwide, NEPA regulations play a role in all activities on federal lands. NCBA and PLC say that NEPA processes have become inefficient over the past several decades and the source of an immense amount of regulatory red tape and uncertainty as producers renew grazing permits, improve rangeland, and participate in USDA conservation programs. NCBA and PLC, along with the American Sheep Industry Association, previously advocated for a NEPA process that is targeted, concise, and timely.

SHIP IT Act Addresses Supply Chain Backlog

A pair of House lawmakers this week introduced the SHIP IT Act, seeking to address the supply chain backlog in the freight network at U.S. ports. Introduced by Republican Representatives Michelle Fischbach of Minnesota and Byron Donalds of Florida, the legislation builds on the STOP the GRINCH Act introduced last fall. The STOP the GRINCH Act, a Christmas-themed bill, was introduced in November 2021 to ease supply-chain and inflation pressures by streamlining or suspending certain federal regulations on ports, ships, and trucks. Notable items included in the SHIP IT Act would temporarily suspend the hours-of-service requirements for truckers transporting goods directly to ports, allow 18-year-olds to drive commercial trucks to U.S. ports, and identify federal lands that can be used for temporary storage of freight. Fischbach says, “Congress should seize any opportunity to ease supply-chain tensions,” adding, “The SHIP IT Act would do this by targeting specific needs in ports, shipping, and trucking.”

Farmland Prices up 20% in 2022

The stronger land prices of late 2021 continued in the first months of 2022. Farmers National Company reports sale prices took another jump higher because of the war in Ukraine and ongoing inflation fears. Farmers saw higher commodity prices, and investors wanted a low-risk inflation hedging investment, which propelled the competition for good cropland. Farmland values are roughly 20 percent higher than a year ago. Recent Farmers National Company auction sales demonstrate the strength in the land market so far in 2022. In February, Farmers National Company sold six tracts of Western Indiana land comprising 550 acres for $16,600 per acre. In early March, four tracts of Eastern Illinois land totaling 320 acres sold between $19,100 to $19,700 per acre. At the end of March, a company auction saw three tracts of Central Illinois land sell for $20,500 to $21,500 per acre. In the fall of 2021, prime Illinois farmland was selling in the range of $16,000 plus per acre.

Ag Aviation Group Cautions Drone Operators on Ag Operations

The National Agricultural Aviation Association is asking drone operators to be mindful of low altitude manned agricultural aircraft operations. With the growing season getting underway, those operations will increase across the nation. Agricultural aviators treat 127 million acres of cropland in the United States each year and perform a variety of services that help farmers increase productivity and protect their crops. NAAA CEO Andrew Moore says agricultural aviators' "work cannot be delayed because of an unmanned aircraft not yielding to them, as is required by law." Agricultural aviators fly as low as ten feet off the ground, meaning they share airspace with drones that are restricted to flying no more than 400 feet above ground level. The organization urges drone operators to do everything they can to avoid ag aircraft doing low-altitude work. Small drones can be virtually invisible-and potentially lethal-to agricultural aviators, air ambulance helicopters, law enforcement and other low-flying manned aircraft operating in the same airspace.

NPB Seeks Applicants for Inaugural Pork Innovation Challenge

The National Pork Board is launching the first-ever Pork Industry Innovation Challenge to encourage individuals and companies to help solve some of the biggest challenges facing the U.S. pork industry. NPB is accepting submissions for the inaugural Challenge through July 31. The focus of the challenge is pig mortality disposal. Producers and innovators are challenged to think of new methods of carcass disposal beyond the existing methods of burial, incineration, composting and landfills. These methods could be used on farms if there were a foreign animal disease outbreak, such as African swine fever. The challenge is open to all U.S. companies, students and residents, including producers. NPB encourages folks to submit an overview of how their idea works in about 500 words or less by July 31 for a chance to win up to $46,000. Multiple awards will be granted if more than one project is successful. Find more details and learn how to submit your application online at porkcheckoff.org.

USDA Farmers Market Reopens for 25th Market Season

The USDA Farmers Market returns next month for its 25th market season. The annual Friday market will reopen on Friday, May 6, 2022, and run through October. Deputy Agriculture Secretary Jewel Bronaugh (Bro-NAW), says the reopening “is an opportunity to celebrate the important role that farmers markets continue to play in meeting the growing demand for local fresh and healthy food.” Located outside the USDA Headquarters in Washington, DC, the market serves as USDA’s own “living laboratory” for farmers market operations across the country. The market supports the local economy, increases marketing opportunities for farmers and small businesses, provides access to an assortment of local and regional sourced products, and increases access to healthy, affordable fresh food. The USDA Farmers Market promotes the incorporation of healthy fresh produce in consumers food choices through its unique educational style program, VegU. The commodity-centered education program partners with USDA to market and promote the consumption of commodities through short educational sessions and in-market recipe demonstrations.

Wednesday Watch List

A report on U.S. existing home sales in March is set for 9 a.m. CDT Wednesday, followed by the Energy Department's weekly inventory report, including ethanol production at 9:30 a.m. Traders will continue to monitor the latest weather forecasts and any news regarding the war in Ukraine.

Weather

A system moving across the northern tier of the country will bring lines and clusters of showers through the Corn Belt and Delta on Wednesday. The country continues to be on a warming trend through the rest of the week, but the warmth is temporary. Heat and dryness in the Southern Plains continues to be unfavorable for all crops.

Tuesday, April 19, 2022

USDA Announces Changes to WASDE Reports Starting in May

The Department of Agriculture Monday announced changes to the World Agricultural Supply and Demand Estimates report starting next month. The changes impact how USDA presents data for sugar and dairy in the monthly report. The sugar WASDE table will have a separate line listing under "Imports" for High-tier tariff imports. The new line will appear directly below the line for imports from Mexico. Footnote 5, which once referenced imports from Mexico, and high-tier tariff sugar and syrups not otherwise specified, will be eliminated. The U.S. Dairy Supply and Use table will remove CCC Donations as a separate category and include all donations as part of domestic use. As such, stocks, imports, exports, and use will reflect total rather than commercial use, and the headings will be adjusted accordingly. The monthly WASDE report provides annual forecasts for supply and use of U.S. and world wheat, rice, coarse grains, oilseeds, and cotton, and U.S. supply of sugar, meat, poultry eggs and milk.

U.S. Canola Growers Welcome EPA Proposal for Biofuels

Canola growers welcome the Environmental Protection Agency's proposed determination that canola oil-derived renewable diesel and other newer biofuels qualify as advanced biofuels. The EPA last week, as part of the announcement of summertime E15 sales this year, proposed using canola oil-derived fuels under the Renewable Fuel Standard. The U.S. Canola Association says based on its greenhouse gas lifecycle evaluation described in the proposed rulemaking, the EPA finds that renewable diesel, jet fuel, liquified petroleum gas and heating oil produced from canola oil reduce GHG emissions by at least 50 percent compared to petroleum. U.S. Canola Association President Andrew Moore says, "The EPA's rulemaking would level the playing field between canola and other oilseed crops in the biofuel market." The organization petitioned the EPA in 2020 to approve canola oil as a feedstock for renewable diesel. Moore adds, "New canola channels would also help farmers diversify and expand their markets."

Feinstein, Padilla, Booker, Stabenow to Secretary Vilsack: Support California Prop 12

Senate Democrats, including the Senate Ag Committee Chair, urge Agriculture Secretary Tom Vilsack to support California's Proposition 12 before the Supreme Court. Senators Dianne Feinstein and Alex Padilla of California, along with New Jersey's Cory Booker and Senate Ag Chair Debbie Stabenow from Michigan, made the request in a letter to Vilsack. In 2018, California voters passed Proposition 12, which set humane standards for farm animal products sold in California. Last month, the Supreme Court agreed to hear National Pork Producers Council v. Ross, a lawsuit challenging Proposition 12. The lawmakers write, "States should not be stripped of their authority to mitigate the harm that inhumane farm animal confinement poses to animals, people, and the environment.” NPPC and the American Farm Bureau Federation call the law unconstitutional, adding Proposition 12 “sets arbitrary animal housing standards that lack any scientific, technical or agricultural basis and that will only inflict economic harm on U.S. hog farmers and consumers.”

Groups to USTR, USDA: Panama Must Fully Implement Trade Pact

Agriculture groups late last week urged the Biden administration to oppose changes to the tariff elimination terms of the U.S.-Panama Trade Promotion Agreement. The National Pork Producers Council and other groups made the request to the Department of Agriculture and the U.S. Trade Representative’s office. The agreement, which went into effect in October 2012, is still in the process of being fully implemented, with gradual annual tariff reductions and increases in tariff rate quotas, or TRQs. Panama’s TRQs for pork, chicken, dairy, corn and several other commodities have been in place for ten years, and several have another ten years to go before free trade with Panama is achieved. Under the agreement, the country can also impose temporary safeguards on certain import-sensitive agricultural products as it transitions to a more open market. In March, the Panamanian government submitted a formal request to revise the agricultural tariff elimination terms of the TPA. The agriculture groups urge the administration to oppose any changes to agricultural tariffs, TRQs or safeguards.

Feeding America Seeks Additional Support from Congress

The Department of Labor last week reported year-over-year inflation of 8.5 percent, levels not seen since 1981. At the same time, the latest Feeding America food bank pulse survey data shows that more food banks report seeing demand for food assistance increase or stay the same for February compared to the previous month. Food banks are purchasing nearly as much food as they did in 2021 but are now paying 40 percent more for those purchases. Feeding America projects that the food bank network will experience a 20 percent decrease in manufacturing donations and a 45 percent decrease in federal commodities in fiscal year 2022. Feeding America says Congress should ensure that food banks have the critical resources and program flexibilities necessary to address the need for food assistance by providing $900 million for The Emergency Food Assistance Program and extending child nutrition waivers. Feeding America also calls on USDA to use the Commodity Credit Corporation to provide funds for food purchases.

Fuel Prices Decline Again, Slide Could Stall

The nation's average gas price declined for the fourth straight week, falling 3.8 cents from a week ago to $4.06 per gallon. The national average is down 21.1 cents from a month ago and $1.21 per gallon higher than a year ago. The national average price of diesel fell 1.2 cents in the last week and stands at $5.02 per gallon. GasBuddy's Patrick De Haan calls the decline "a feat we most likely would not have expected ahead of summer and given the continued turns in Russia's war on Ukraine." However, he warns the downturn could slow or reverse in the days ahead if the rally in oil prices continues. The price of a barrel of West Texas Intermediate crude oil surged from its week-ago level as the EU signaled it may move forward with sanctions on Russian energy, and China worked to reopen some cities shut down due to COVID. De Haan adds, “The path forward at the pump remains murky, with many possible outcomes.”

Tuesday Watch List

A report on March housing starts is due out at 7:30 a.m. CDT and is the only official report on Tuesday's docket. Traders will continue to monitor the latest weather forecasts and any news regarding Ukraine.

Weather

A system is still leaving the Northeast and some wrap-around showers will continue in the eastern Midwest on Tuesday. But the larger story is the system crossing the West. Ahead of it, winds will increase in the Plains and may cause more wildfire threats. But there may be some showers developing from west-central Texas into the southern Midwest later in the day and tonight. Showers are likely to be spotty, but would be the first showers in a while for some areas of Texas and Oklahoma.

Monday, April 18, 2022

Bird Flu Driving Egg Processing Costs Higher

Processed eggs go into items ranging from salad dressings to cake mix. Bloomberg says the prices for those eggs intended for processing are soaring to record highs because of the avian influenza outbreak. The rapid spread of influenza could make this one of the biggest outbreaks in history. Twenty million birds have been culled from the nation’s flocks, which is hitting the market for breaker eggs hard. These eggs, many of which come from Iowa, are processed into liquid or powder form, and then go into manufactured foods. The high price for those breaker eggs is driving production costs higher for food makers, which, in turn, will push inflation higher. Many food manufacturers have shut down plants for sterilization and can’t fill orders. The price of eggs that get cracked and sold in liquid form hit a record high of $2.37 a pound last week. Dried eggs and powdered egg products are also at their highest-ever prices.

Four Meatpacker CEOs To Testify at Congressional Hearing

The four CEOs of Cargill, Tyson Foods, JBS, and National Beef Packing have agreed to testify before Congress. Reuters says the meatpacker bosses will discuss cattle markets and price increases for consumers. House Ag Committee Chair David Scott says it’s important to find out why prices have dropped for ranchers and risen for consumers. “In addition to the CEO panel, we’ll also bring together a panel of ranchers to hear what industry consolidation has done to their bottom lines and viability,” Scott says. Rising prices and profits for meatpacking companies are likely to draw more scrutiny from lawmakers in Washington, D.C. The Biden administration announced a plan in January for new rules that will increase competition in the industry and stop “exploitation” within the sector. The concern is that a small group of meatpackers can dictate beef, pork, and poultry prices, which will add to inflation pressure caused by rising production costs.

First 2023 Farm Bill Hearing Scheduled for Michigan

Michigan’s Debbie Stabenow, Chair of the Senate Ag Committee, and Ranking Member John Boozman (BOZE-man) of Arkansas announced the first 2023 Farm Bill listening session. The hearing will include input from a diverse range of agricultural producers and stakeholders about the next bill. The first hearing will be on Friday, April 29, at Michigan State University. Stabenow says the farm bill’s tradition of bipartisanship will continue with the next version. “We’ll be hearing from farmers and others impacted by the farm bill,” Stabenow says. “We’ll talk about how we can strengthen this important legislation, grow the economy, and strengthen the supply chain.” Boozman also says that crafting a farm bill that can become law is a delicate balance. “The needs of each region and each commodity must be balanced, which is why we must hear directly from stakeholders from across the country,” he says. Stream it live at ag.senate.gov.

Study Shows What Consumers Want in a New Farm Bill

As the House Agriculture Committee plans for the next farm bill, consumers shared their opinions on food and agriculture policy in a new survey from Purdue University. The third Consumer Food Insights report offers a significant look into the popularity of specific policies and how opinions differ depending on a consumer’s income. One of the most popular policy choices was increased funding for research to create crops more resistant to heat, drought, and flooding. Another popular policy choice is paying farmers and ranchers to adopt climate-smart practices. Over 80 percent of consumer respondents supported those policies. Food safety and inspection ranked as the most important USDA budget category. The survey-based report comes from Purdue’s Center for Food Demand Analysis and Sustainability assesses food security and spending, consumer satisfaction and values, support for agriculture and food policies, and trust in information sources. Other supported policies include regulating environmental claims and expanding SNAP benefits.

Ethanol Production, Inventories Drop

The Energy Information Administration says ethanol output declined week to week, and inventories dropped during the week ending April 8. The EIA report shows biofuel production fell to an average of 995,000 barrels a day, down from just over one million barrels a day during the prior week. In the Midwest, far and away, the largest-producing area in the country, output dropped to an average of 935,000 barrels a day, down from 946,000 one week earlier. Gulf Coast production rose to 24,000 barrels a day, on average, from 23,000 barrels the previous week. West Coast output also rose to an average of 9,000 barrels a day, up 2,000 barrels a day from the prior week. Rocky Mountain output stayed steady at 15,000 barrels a day, while East Coast production was also steady compared to the previous week at 12,000 barrels a day. Stockpiles dropped to 24.8 million barrels during the week ending on April 8.

USDA Releases Equity Action Plan

The USDA made its Equity Action Plan available last week. The plan outlines actions the agency will take to advance equity among its programs to improve access to the programs and services for underserved stakeholders and communities. In its announcement, the USDA says past USDA programs and services were designed to benefit those with land, experience, money, or education while leaving behind those without the means and resources of one kind or another. Over several decades, congressional reports, internal data, civil rights investigations, court actions, and stakeholder testimony have documented the history of inequity and discrimination. “We are acknowledging USDA’s storied history and charting a new path forward,” says Ag Secretary Tom Vilsack. “Today’s USDA is committed to rooting out systemic racism and advancing justice, equity, and opportunity for all.” He also says the agency has to be responsive to the unique needs of underserved communities. For more information, go to usda.gov/equity.

Monday Watch List

Back from a three-day weekend, traders will pore over the latest weather maps and any news regarding Ukraine. USDA's weekly grain export inspections will be released at 10 a.m. CDT Monday, followed by a new Crop Progress update at 3 p.m.

Weather

A system continues to bring scattered showers from the weekend through eastern areas of the country on Monday. A mix of rain and snow is found over the Midwest into the Northeast while scattered thunderstorms develop across the Southeast. Some breezy winds will continue on the backside of the system across the Upper Midwest while colder air is a feature for many areas, especially over the heavy snowpack in the Northern Plains.

Thursday, April 14, 2022

Avian Influenza Cases Outpacing 2014/2015 Outbreak

The number of highly pathogenic avian influenza cases in the United States are outpacing the 2014/2015 outbreak. However, the American Farm Bureau Federation says the higher numbers might be attributed to improvements in detection and reporting protocols. Farm Bureau economists found as of April 7, there have been more than 600 detections of HPAI in wild birds across 31 states, and 158 detections in commercial and backyard flocks across 25 states. The 2014/2015 outbreak prompted revisions to the National HPAI Surveillance Plan, which has led to heightened annual surveillance plans, providing poultry producers earlier notice to increase their biosecurity measures. AFBF economists analyzed HPAI detections in commercial flocks and found the Mississippi flyway is the most impacted, with 49 percent of detections. While HPAI has affected the laying hen population, inventory of eggs is actually 38 percent higher in 2022 than during the same time in 2015. Eggs should be found easily in the grocery store for Easter and Passover celebrations, but prices will be higher.

National Sorghum Producers Calls on USAID to Consider Grain Sorghum Offers

National Sorghum Producers requests the U.S. Agency for International Development, USAID, to consider sorghum for aid programs. The organization sent a letter to USAID this week encouraging the department to proactively tender grain offers to provide crucial aid to the world’s hungry. The letter is in response to a worsening situation from the war in Ukraine and its impact on global food prices. NSP CEO Tim Lust says, “In Sub-Saharan Africa in particular, where sorghum is a staple food in many countries, the situation is exacerbated by severe drought and conflict.” The NSP letter encourages USAID, in coordination with the Department of Agriculture, to consider grain sorghum offers for food aid as action plans are formulated to address the worsening situation. Lust adds urgency is needed as grain traders are emptying stocks from the 2021 crop year. Sorghum is the fifth most important cereal crop in the world and ranks second, closely behind wheat, in total food aid purchases.

EPA Announces Plan to Protect Endangered Species and Support Sustainable Agriculture

The Environmental Protection Agency this week released its first-ever comprehensive workplan to address the challenge of protecting endangered species from pesticides. The plan establishes four overall strategies and dozens of actions to adopt protections while providing farmers, public health authorities, and others with access to pesticides. EPA has an opportunity and an obligation to improve how it meets its duties under the Endangered Species Act when it registers pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act. For most of EPA's history, the agency has met these duties for less than five percent of its FIFRA decisions. This has resulted in over 20 ESA lawsuits against the agency, which have increased in frequency in recent years, creating uncertainty for farmers. Through the workplan, EPA is describing its future directions in the hope of collaborating on implementation. Over the coming months, EPA will engage with a wide range of stakeholders to identify opportunities for collaboration and will continue seeking input on more effective and efficient ways to meet its ESA obligations.

Quick-Service Restaurants Recovered Faster Than Full-Service Following 2020

New data from USDA’s Economic Research Service shows quick-service restaurants recovered faster than full-service restaurants from the initial impacts of the COVID-19 pandemic. Consumer spending at both full-service and quick-service restaurants initially fell following the onset of the Coronavirus, with noteworthy differences between the two. Before the pandemic, consumer spending at both quick-service and full-service restaurants was near or slightly above previous year levels. As of March–May 2020, spending at quick-service restaurants had dropped to about $20.1 billion, 15.4 percent lower than average spending a year earlier. Full-service restaurants experienced a more severe drop during this period, likely related to the mandates limiting in-person dining across much of the country. Spending fell to $7 billion, 51.7 percent lower than the year before. Quick-service restaurants recovered faster than full-service restaurants, with spending surpassing previous year levels for the last four months of 2020. In contrast, by the end of 2020, full-service restaurants retained a 24.8 percent drop in year-to-year spending.

ADM to Increase Alternative Protein Production

ADM announced this week it will invest approximately $300 million to significantly expand its Decatur, Illinois, alternative protein production. ADM also plans to open a new, state-of-the-art Protein Innovation Center, also in Decatur. An ADM spokesperson says, “The global trends of food security and sustainability are driving structural changes in the food industry, including strong growth in alternative proteins.” Alternative meat and dairy sales alone expected to grow by 14 percent a year and reach $125 billion in 2030. The production increase represents a significant expansion of ADM's alternative protein capabilities. The project, expected to be completed in the first quarter of 2025, will significantly strengthen ADM's ability to meet growing global demand by increasing soy protein concentrate capacity and nearly doubling extrusion capacity at ADM's Decatur complex. The Protein Innovation Center will further expand ADM's Decatur-based innovation complex. The new Decatur Innovation Center will bring together labs, test kitchens, and pilot-scale production capabilities to power innovation.

New Veterinary Debt Solutions Program Launches

Farm Journal Foundation is partnering with the Zoetis Foundation to launch a new program to find solutions for relieving student debt in the veterinary industry. The effort’s long-term goal seeks to address shortages of veterinarians to work with farmers in rural areas. The new Veterinary Debt Solutions Program will convene leaders from across the livestock, academic, nonprofit, and veterinary sectors to address barriers that veterinarians face in building long-term careers in rural areas. High levels of student debt, combined with comparatively lower rural salaries and demanding workloads, discourage many young and diverse professionals from specializing in large animal veterinary science and entering the workforce, particularly in underserved rural areas. The veterinary profession is currently experiencing an urban-rural divide, with only about ten percent of final-year veterinary students expressing an interest in working with livestock after graduation, according to survey data from the American Veterinary Medical Association. As a result, about 500 counties across the U.S. now face shortages of veterinarians.

Thursday Watch List

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. retail sales in March and an update of the U.S. Drought Monitor. The University of Michigan's index of consumer sentiment is set for 9 a.m., followed by the Energy Department's weekly report on natural gas storage at 9:30 a.m. At 2 p.m., USDA releases its monthly Livestock, Dairy and Poultry outlook.

Weather

The system that has dumped significant snowfall in the Northern Plains this week continues to wrap up on Thursday before pushing north into Canada. Some snow showers will remain across northern locations while the cold front pushes showers off the East Coast later in the day. Winds continue to be strong, especially across the north where blizzard conditions continue in North Dakota and wind gusts of 50 to 60 mph will be felt from the Dakotas through the northern half of the Midwest. Cold weather flowing into the Plains and Midwest are causing some late frosts as far south as Oklahoma and Arkansas Thursday morning.

Wednesday, April 13, 2022

Biden Announces Summertime E15 Sales

President Joe Biden Tuesday announced the Environmental Protection Agency is taking steps to allow for summertime E15 sales. Biden made the announcement during a visit to a POET ethanol facility in Iowa. To make E15 available in the summer, EPA is planning to issue a national emergency waiver. Without a waiver, E15 cannot be used in most of the country from June 1 to September 15, and the EPA plans to take final action to issue the emergency waiver closer to June 1. The White House says the EPA is also considering additional action to facilitate the use of E15 year-round. The EPA also Tuesday announced efforts to expand supply and choices for other forms of fuel, such as diesel and jet fuel. The EPA is proposing a new approval for canola oil that will add new pathways for fuels to participate in the Renewable Fuel Standard program to provide renewable diesel, jet fuel and other fuels.

Consumer Price Index Rises Again

The Consumer Price Index increased 1.2 percent in March, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 8.5 percent before seasonal adjustment. Increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all items increase. The food index increased one percent in March as the food at home index increased 1.5 percent over the month. All six major grocery store food group indexes increased in March. The largest increase was for other food at home, which increased two percent over the month. The index for fruits and vegetables rose 1.5 percent following a 2.3 percent increase in February. The index for meats, poultry, fish, and eggs increased one percent in March, while the index for cereals and bakery products rose 1.5 percent, and the index for nonalcoholic beverages increased 1.2 percent over the month. The dairy and related products index also increased 1.2 percent in March.

NCBA Renews Call for Suspension of Brazilian Beef Imports

Following a USDA report highlighting an increase in Brazilian beef imports, the National Cattlemen's Beef Association renewed its call to immediately suspend fresh beef imports from Brazil. NCBA has repeatedly called for a thorough audit of Brazil's animal health and food safety system, to ensure the safety of the U.S. cattle herd. In 2021, Brazilian exports to the United States increased by 131 percent. In the first three months of 2022, Brazil has already shipped more than 50,000 metric tons of fresh beef to the United States. The surge of imports triggered a temporary tariff safeguard of 26.4 percent that will apply to Brazilian beef imports for the rest of 2022. While a temporary tariff increase may discourage further imports, NCBA says it does not address the underlying concern over Brazil's repeated failure to adhere to international animal health and food safety standards. NCBA believes restricting Brazilian imports is essential until Brazil proves it can adhere to U.S. standards.

Argentina and Brazil Could Expand Wheat Production

The war in Ukraine is expected to expand wheat production in Argentina and Brazil, the primary wheat-producing nations in South America. Agriculture and consumer economics experts from the University of Illinois say both nations will likely already increase wheat planting this season, which begins in May 2022. The high price of wheat after a significant shock to agricultural commodity markets caused by the Russian invasion of Ukraine is an incentive for increased planting of wheat in Argentina and Brazil, as well in the United States. Argentina is the primary South American producer and exporter of wheat, accounting for about seven percent of the global exports. Brazil, in contrast, is a prominent importer, mainly from Argentina. The ongoing conflict in Ukraine has caused wheat supply and food security concerns for many major wheat importers that depend on Black Sea supplies. In this case, the University of Illinois experts say South American producers may increase supply to African countries.

Tractor and Combine Sales Make First Decline Since July 2021

Ag tractor and combine sales posted their first decline in March since July 2021, according to the Association of Equipment Manufacturers. U.S. total farm tractor sales fell 21.1 percent for the month of March compared to 2021. U.S. combine sales for the month dropped 10.2 percent to 343 units sold. Total farm tractor sales are now down 7.9 percent year-to-date, while combines sales are down 19.2 percent. In Canada, sales fell in all segments for a 5.1 percent decline in total farm tractor sales. Combine sales were down as well in Canada, falling 36.8 percent to 60 units sold. Year-to-date farm tractor unit sales are down a slight 0.7 percent in Canada, while harvesters are down 36.2 percent. AEM’s Curt Blades says they expected the declines, adding, “Inventory levels are down more than ten percent in both the U.S. and Canada, and this is the result of supply chain difficulties catching up with this segment of the manufacturing industry.”

Fall Seasonal Effects Connected to E. coli Outbreaks in Bagged Romaine

USDA Agricultural Research Service scientists are researching an underlying pattern of seasonal E. coli outbreaks linked to bagged romaine lettuce. Although contamination of lettuce products is rare, between 1998 and 2019, 36 outbreaks that traced back to lettuce were recorded by the Centers for Disease Control and Prevention. Most of the outbreaks involved romaine lettuce harvested in the fall on the California Central Coast and late winter in Southern California and Arizona. One of the most significant findings of the study is that E. coli survived on average 5.6 times better in cold-stored packaged romaine harvested in the fall than on the same varieties harvested in late spring. The research also found the bacterial community present on bagged romaine differed by season, lettuce deterioration state, and whether survival of E. coli on the lettuce was high or low. An ARS Researcher says, “Our observations definitely open an entire new branch of inquiry about outbreak seasonality.”

Wednesday Watch List

At 7:30 a.m. CDT Wednesday, the U.S. Labor Department will release its producer price index for March with big increases, similar to Tuesday's consumer price index expected. At 9:30 a.m. CDT, the Energy Department will release its weekly energy inventories, including ethanol production. Traders will continue to keep an eye on this week's storms and news regarding Ukraine.

Weather

A system continues to spin up across the Upper Midwest on Wednesday. Heavy snow that has been falling since Tuesday in North Dakota continues Wednesday. The cold front to the system will move through the Mississippi Valley this afternoon, sparking widespread showers and thunderstorms, which are expected to be severe with all hazards being possible. The storms will push toward the Appalachians overnight and weaken. Colder air settling in across northern zones is significantly below normal and will lead to slower planting progress for the coming week.

Tuesday, April 12, 2022

Biden Announces Rural Playbook, Infrastructure Tour

The White House released its Bipartisan Infrastructure Law Rural Playbook. It will help local, state, tribal, and territorial governments in rural areas unlock the benefits of investments in the national infrastructure. The president and other senior administration officials will also launch an infrastructure tour to directly-engage rural communities across the country. The Rural Playbook provides rural communities with information on the “what, when, where, and how to apply” for funding under the law, so no lobbying is necessary to access it. The Playbook also identifies over 100 programs funded under the law with federal cost-share flexibilities and matching requirement waivers. “Building a better America requires that these funds reach rural areas that have been left behind for way too long,” says Mitch Landrieu (LAN-drew), Senior Advisor and Infrastructure Implementation Coordinator. “We see you, and major investments are on the way.” The goal is to make sure all Americans benefit from the historic investments.

Investigators Solve a $40 Million Crop Insurance Fraud Case

A crop insurance fraud case totaling 40 million dollars led to 23 people getting charged with a crime and 17 other people paying civil fines or penalties. DTN says the case began in 2014 at the USDA’s Inspector General Office when it received a phone tip about alleged fraud at Clay’s Tobacco Warehouse in Mount Sterling, Kentucky. The defendants are accused of cheating the crop insurance program out of anywhere from under $10,000 to many millions of dollars. The most common scheme centered around farmers that raised a good tobacco crop. But, they worked together with insurance agents and adjusters to claim the crop got damaged by storms or pests. After the farmer filed an insurance claim and received payment, the insurance agents and adjusters got kickback payments. FBI investigators say farmers had help from several employees at Clay’s Tobacco House, including one employee who was also a crop insurance agent.

U.S. Cattlemen Applaud Bill Updating the Packers and Stockyards Act

The bipartisan Amplifying Processing of Livestock in the United States Act, or A-PLUS Act, got introduced into the House last week. The U.S. Cattlemen’s Association says it’s a long-overdue idea that will help spur more processing capacity in the U.S. if it gets enacted. It would allow livestock auction markets to hold an ownership interest in, finance, or participate in the management or operation of a packing facility with a slaughter capacity of fewer than 1,000 animals per day or 250,000 a year. “The Packers and Stockyards Act is over 100 years old, and it’s time to modernize parts of this historic legislation that no longer make sense in the modern world,” says USCA President Brooke Miller. “If a family-owned and regionally-based livestock auction wants to invest in a local processing facility to increase processing capacity for producers in their area, there shouldn’t be an outdated regulation holding them back from doing so.”

Growth Energy Asks STB to Address Rail Supply Chain Disruptions

Last week, Growth Energy sent a letter to the Surface Transportation Board to talk about their concerns over significant delays in rail service. Those delays impacting the biofuel industry include empty car arrivals and extreme delays in the manifest and unit train traffic across the rail supply chain.. Growth Energy’s members ship nearly 70 percent of ethanol by rail through many key distribution points throughout North America. The organization says this disruption affects not only businesses but American drivers as it can ultimately mean less biofuel is available for blending. “While we certainly understand that a variety of factors have contributed to the rail disruptions, the nation's railroads must do everything they can to ensure that critical fuel supplies reach markets as quickly as possible,” says Growth Energy CEO Emily Skor. “It’s essential that ethanol reach its destination to benefit American drivers facing high gas prices.”

Applications Open for Lamb Feeders Leadership School

The National Lamb Feeders Association is accepting applications for the Howard Wyman Sheep Industry Leadership School, which is from June 19-22 in Colorado. The school starts on Sunday, June 19, with a meet-and-greet at the hotel in Greely before the busy week kicks off. Monday, the students will travel to Brush, Colorado, to tour the Colorado Lamb Processors facility, followed by multiple feedlot tours. The day ends with a tour of the Eldon Mars Dairy and a lamb dinner at the Eaton Country Club. Tuesday will be more in the classroom, with presentations on marketing options for lambs, American Sheep Industry Association programs, and plenty of time for group discussion on issues and challenges of marketing options. The school finishes up on Wednesday morning and offers a time to ask questions to sheep industry leaders and school presenters. The deadline to apply is April 29, and for more information, go to lambfeedersusa.org.

World Crop Acres Grow by 73 million in Two Years

The total number of global crop acres rose by 73 million during the last two years. Agricultural Economic Insights first observed an uptick in global acreage in 2020. The number of acres had trended sideways because of sluggish commodity prices and profitability from 2014 through 2019. After acres began increasing in 2020, another increase was observed and a record 2.43 billion acres got harvested in 2021. From 2019 to 2021, the total number of acres grew by 3.7 percent, or 73 million acres. As far as which crops contributed the most to the recent expansion, AEI says look no farther than oilseeds. From 2016 to 2021, soybean production grew by 25 million acres, which accounted for 40 percent of the total acreage increase. By way of comparison, corn acreage expanded by only 15 million acres. AEI says profitability was behind the surge in planted acres. When profits are strong, producers always find ways to bring more acres online.

Tuesday Watch List

The U.S. Labor Department will release the consumer price index for March at 7:30 a.m. CDT Tuesday. Traders will examine the weather forecasts and watch for the latest news regarding Ukraine. A Treasury report on the federal budget is set for 1 p.m.

Weather

Though scattered showers and thunderstorms linger in the Tennessee Valley on Tuesday, the focus is farther west. A large storm system is moving into the Plains. Heavy snow is beginning to form in Montana and North Dakota. Strong winds picking up throughout the day will create blizzard conditions for these areas. Strong to severe storms are expected to develop later this afternoon and evening across the eastern Plains, moving toward the Mississippi River overnight. Stronger winds in the rest of the Plains could cause an increased risk for wildfires as well.

Monday, April 11, 2022

Food Prices Set a Record During March

The United Nation’s Food and Agriculture Organization says its Food Price Index set a record in March. The index averaged 159.3 points, up almost 18 points from February. The 12 percent jump in the index during March sent it to the highest level since the index began in 1990. The latest increase reflects all-time highs for vegetable oils, cereals, and meat sub-indices, while sugar and dairy products also rose significantly. The Cereal Price Index averaged 170 points in March, up 25 points from February. The 17 percent increase reflected a surge in world wheat and coarse grain prices, largely caused by export disruptions from Ukraine. The Vegetable Oil Price Index averaged 248 points in March, up 47 points from February. The Dairy Price Index averaged 145.2 points in March, up almost four points and the seventh-consecutive monthly increase. The Meat Price Index rose by 5.5 points and the Sugar Price Index was 7.4 points higher.

EPA Denies Biofuel Waivers, Offers Alternative Relief

The Environmental Protection Agency denied 36 petitions from oil refiners seeking exemptions from the national biofuel blending laws for the compliance year 2018. However, the agency said last week that it will provide 31 of the refineries with another avenue to get relief. A 2020 court decision narrowed the criteria for exemptions under the Renewable Fuel Standard’s blending quotas, and the EPA says the denial follows the law and recent court decisions. The agency added that the alternative relief it plans to grant to 31 of the refineries will allow them to meet their 2018 compliance requirements without having to purchase blending credits. The EPA says that decision comes from the “extenuating circumstances,” including the fact that the plants had already been granted waivers. Reuters says the agency is taking this approach because the amount of renewable fuel used in 2018 will be unchanged regardless of any action refiners take now.

Biofuel, Ag Groups Respond To EPA Refinery Exemption Decisions

Top farm and biofuel groups reacted to the Environmental Protection Agency’s decision to reverse 31 controversial small refinery exemptions granted in August 2019. They’re disappointed that the agency is allowing the refineries with previously-granted SREs to not have to take additional steps to meet obligations under the RFS. Groups like Growth Energy, the Renewable Fuels Association, National Corn Growers Association, and others say the denial is an important step in reversing past refinery exemption abuses. “However, the decision fails to remedy the economic harms that the improperly granted 2018 SREs have already caused,” the groups say in their statement. “The agency’s readiness to excuse individual refineries from their obligations to comply with the 2018 blending requirements comes at the expense of our biofuel producers, farmers, and American consumers.” The groups say that low-carbon biofuels are the single best tool to deliver immediate relief at the pump, strengthen U.S. energy security, and protect the climate.

USDA Releases April WASDE Report

The USDA’s April World Ag Supply and Demand Estimates report says the Russian military action in Ukraine significantly increased the uncertainty of global supply and demand conditions. The corn outlook is for offsetting changes to feed and residual use and corn used for ethanol production. Corn ending stocks are unchanged at 1.44 billion bushels, and the season-average farm price rose 15 cents to $5.80 a bushel. U.S. soybean supply and use changes for 2021-2022 include increased exports and seed use and lower ending stocks. Soybean ending stocks are projected at 260 million bushels, down 25 million due to a corresponding 25 million bushel increase in exports. The season-average soybean price is unchanged at $13.25 per bushel. The wheat outlook calls for stable supplies, lower domestic use, reduced exports, and higher ending stocks. Exports were lowered by 15 million bushels to the lowest export numbers since 2015-2016. The season-average farm price rose 10 cents to $7.60 a bushel.

Surface Transportation Board to Deal with Rail Issues

The Surface Transportation Board says it will hold public hearings on April 26 and 27 on recent rail service problems and recovery efforts involving several Class One carriers. The Board plans to direct several executive-level officials from many major railways to appear during the hearing. Rail network reliability is essential to the nation’s economy and is a big priority of the Board. Ag Secretary Tom Vilsack and other stakeholders have filed reports about the serious impact of the service trends on rail users, especially those who ship agricultural and energy products. “During my time on the Board, I’ve been concerned about the priority that Class One railroads have placed on cutting costs and satisfying shareholders even at the cost of consumers,” says Board Chair Martin Oberman. “That strategy has led to collectively reducing their workforce by 29 percent.” He also says the Board will ask the executives what they’ll do to fix the issues.

Chinese National Sentenced in Agricultural Espionage Conspiracy

A Chinese national formerly residing in Missouri was sentenced to 29 months in prison and a $150,000 fine for conspiring to commit economic espionage. Xiang (she-AHNG) Haitao pled guilty to the charge in January.  Court documents say Xiang conspired to steal a trade secret from the Climate Corporation, a subsidiary of Monsanto, to benefit a foreign government. “Xiang conspired to steal an important trade secret to gain an unfair advantage for himself and the Chinese government,” says Assistant Attorney General Matthew Olson of the Justice Department’s National Security Division. “The victim companies invested significant time and resources to develop this intellectual property.” Olsen also says espionage is a serious offense that can threaten U.S. companies’ competitive advantage. After leaving Monsanto, Xiang attempted to take Monsanto’s computer algorithm called the Nutrient Optimizer on an electronic device back to China. He was arrested and returned to the U.S. in November 2019.

Monday Watch List

Traders will return from the weekend, checking the latest weather forecasts and any news regarding Ukraine or Russia. At 10 a.m. CDT, USDA weekly grain export inspections will be released, followed by the second Crop Progress report of 2022 at 3 p.m. At 2 p.m., USDA's Historical Track Records of Crop Production will be available, an annual reference source.

Weather

Scattered showers and thunderstorms are developing along a weak system moving through the Midwest and Delta Monday. Some of these thunderstorms could be strong to severe from northeast Texas into the northern Delta. But the main story for the week is the storm system moving through the West that will bring blizzard conditions to the Northern Plains and multiple rounds of severe weather elsewhere, along with heavy rains. However, the southwestern Plains hard red winter wheat areas are looking to be bypassed yet again as soils continue to be very dry. Cold air following the system will slow down agricultural progress.

Friday, April 8, 2022

Global Beef Demand Continues to Soar

U.S. beef exports turned in another strong performance in February. USDA data compiled by the U.S. Meat Export Federation says the strong month for beef was led by excellent value growth in key Asian and Latin American markets. Beef exports hit 108,500 metric tons in February, five percent higher than last year. Beef’s export value rose 35 percent to over $904 million. “Broad-based growth has become a recurring theme for U.S. beef exports as international demand has never been higher and global supplies remain tight,” says USMEF President and CEO Dan Halstrom. Pork exports trended lower as larger shipments to Mexico and Japan didn’t offset a decline in Chinese and Hong Kong demand. February pork exports totaled 198,530 metric tons: 17 percent lower than a year ago. Pork export value fell 14 percent from last year to $541 million. USMEF says logistical challenges were compounded in February by lower-priced pork offered by competitors.