USDA Releases Updated Trade Projections for 2022, 2023

The Department of Agriculture Tuesday released updated trade projections for the remainder of fiscal year 2022 and the first projections for fiscal year 2022. The outlook follows the federal fiscal year, which begins on October 1 and ends on September 30. Agriculture exports for 2023 are projected at $193.5 billion, with imports at $197 billion. The export forecast is $2.5 billion below the revised 2022 forecast. The decrease is primarily driven by lower exports of cotton, beef, and sorghum that are partially offset by higher exports of soybeans and horticultural products. For 2022, the export estimate of a record $196.0 billion represents an increase of $5.0 billion from May's projection, mainly due to increases in livestock, poultry, and dairy exports. USDA cautions that the global economic outlook for 2022 and 2023 is growing more uncertain due to the continued materialization of downside risks. Previous growth projections are moderated due to ongoing trade disruptions, above-target inflation rates, and rising energy prices.

USDA Awards Funding to Strengthen Markets for Agricultural Products

The Department of Agriculture Tuesday awarded $11.2 million to 22 grant projects to strengthen and explore new market opportunities for U.S. food and agricultural products. The funding comes from USDA Agricultural Marketing Service programs. Jenny Lester Moffitt, USDA Undersecretary for Marketing and Regulatory Programs, says, “USDA is excited about funding projects that improve access to fresh, locally sourced food and strengthen market opportunities for local and regional producers.” Through the Acer Access and Development Program, USDA is awarding $5.9 million to fund 12 projects. Acer projects aim to improve consumer knowledge, awareness and understanding of the maple syrup industry and its products. Through the Federal State Marketing Improvement Program, USDA is awarding more than $1 million to five projects to explore new market opportunities for U.S. food and agriculture. And through the Micro-Grants for Food Security Program, USDA is awarding $4.4 million to agencies in Alaska, Hawaii, and other territories to increase the quantity and quality of locally grown food.

Major School Nutrition Program Spending Declined During Pandemic

USDA's National School Lunch Program and School Breakfast Program typically make up the largest share of child nutrition program expenditures. In fiscal year 2019, before the COVID-19 pandemic, spending on the two programs amounted to about $18.7 billion, nearly 80 percent of the $23.6 billion spent on all child nutrition programs that year. However, school disruptions during the pandemic led to a decline in spending, to $13.9 billion in 2020 and $12.4 billion in 2021. The declines were partly due to many schools transitioning to the Summer Food Service Program and creating the temporary Pandemic Electronic Benefit Transfer program. Spending on the summer food program increased from nearly $500 million in 2019 to $10.7 billion in 2021. P-EBT spending reached $10.7 billion in 2020 and $28.3 billion in 2021. Although spending on the Child and Adult Care Food Program was relatively stable across the three years, the program’s share of child nutrition program spending declined from about 16 percent in 2019 to seven percent in 2021 as overall expenditures increased.

NAWG Responds to Lower Snake River Dams Report

The National Association of Wheat Growers welcomes recommendations regarding dams along the Lower Snake River by Senator Patty Murray and Washington Governor Jay Inslee. The Democrats say in a joint statement, "it’s clear that breach is not an option right now.” NAWB CEO Chandler Goule responds, “We are glad the recommendations released by Senator Murray and Governor Inslee recognize the role these dams play in agriculture and acknowledge dam breaching is not feasible at present.” Goule adds, " However, we remain concerned and opposed to breaching as it would be detrimental to wheat growers across the region." NAWG says the dams play a vital role in providing a safe, efficient and affordable way for wheat farmers to get their product to market. Last month, NAWG filed a public comment outlining concern, whereby other modes of transportation cannot simply replace barging. Wheat farmers move grain most efficiently by using the waterway instead of rail or truck while reducing greenhouse gas emissions, according to the organization.

Western Ag Groups Seek Quick Action for IRA Water Conservation Funding

Western agriculture groups ask the Biden administration to quickly implement Inflation Reduction Act spending allocated to responding to the ongoing drought. The IRA includes $4 billion for drought response in the west. The seven agriculture groups made the request in a letter to the Interior Department and Bureau of Reclamation. The letter encourages the administration to quickly release a Notice of Funding Availability with guidance to water managers currently developing drought response proposals and quickly deploy that funding to address the most urgent needs. The letter states, "The ability of agricultural producers to participate in any voluntary, compensated water reduction program becomes much more difficult, if not impossible, if not initiated and implemented soon." The letter also urges the administration to unite stakeholders and ensure "agriculture has a place at the table." The letter is signed by the Arizona, California, Colorado and Oregon Farm Bureaus, the Agribusiness and Water Council of Arizona, Family Farm Alliance and Western Grower.

Bison Increase Plant Diversity, Drought Resilience in Grasslands

A Kansas State University-led study finds bison double plant diversity in a tallgrass prairie. The research involves more than 30 years of data collection and was recently published in the prestigious journal Proceedings of the National Academy of Science. The study found that plant communities also were resilient to the most extreme drought in four decades. These gains are now among the largest recorded increases in species richness because of grazing in grasslands globally, researchers said. The study occurred in the Flint Hills ecoregion, the largest remaining landscape of tallgrass prairie. Researchers examined plant community composition and diversity in three treatments that were designed to capture characteristic management regimes: no mega-grazers were present, bison were reintroduced and allowed to graze year-round, or domestic cattle were introduced and allowed to graze during the growing season. The study also found cattle have a positive impact on plant diversity, compared to having no large grazers present, although increases in plant species richness were significantly smaller than those caused by bison.

Wednesday Watch List

Markets

At 9:30 a.m. CDT, the U.S. Energy Department will issue its weekly inventory report, including ethanol production. Traders remain attentive to weather, the war in Ukraine and the skittish mood of outside markets, facing another interest rate hike in September and an OPEC+ meeting on Monday, September 5.

Weather

A front has dragged down to Texas and the Gulf Coast for Wednesday, where showers will continue, especially in Texas. A few more showers and thunderstorms could pop up around Nebraska this afternoon and evening, but most areas to the north will be dry with rising temperatures.

White House Announces Hunger Conference for September

The White House Monday announced the date for its Conference on Hunger, Nutrition, and Health. The Conference is set for September 28, 2022, in Washington, DC. As the President announced in May, this will be the first Conference of this kind in more than 50 years. Millions of Americans are afflicted with food insecurity and diet-related diseases—including heart disease, obesity, and type 2 diabetes—which are some of the leading causes of death and disability in the U.S. Lack of access to healthy and affordable foods is one of many factors impacting hunger and diet-related diseases. The COVID-19 pandemic has exacerbated these challenges further. The Conference will bring government leaders, academics and activists together to end hunger and reduce diet-related diseases in the U.S. by 2030. The White House will also announce a national strategy at the Conference that identifies actions the government will take to drive transformative change and address the intersections between food, hunger, nutrition, and health.

USDA Announces Details for Upcoming Census of Agriculture

America’s farmers and ranchers will soon have the opportunity to be represented in the nation's only comprehensive and impartial agriculture data for every state, county and territory. The Department of Agriculture will mail the 2022 Census of Agriculture to millions of agriculture producers across the 50 states and Puerto Rico this fall. The 2022 Census of Agriculture will be mailed in phases, starting with an invitation to respond online in November, followed by paper questionnaires in December. Farm operations of all sizes, urban and rural, which produced and sold, or normally would have sold, $1,000 or more of agricultural product in 2022 are included in the ag census. Collected in service to American agriculture since 1840 and now conducted every five years by USDA's National Agricultural Statistics Service, the Census of Agriculture tells the story and shows the value of U.S. agriculture. Changes to the 2022 questionnaire include new questions about the use of precision agriculture, hemp production, hair sheep, and updates to internet access questions.

Interest Expense Ratio for Agriculture Stays Even with 20-year Average

USDA’s Economic Research Service reports the interest expense ratio of farms was 0.04 in 2020, remaining in line with the long-term trend and initial forecasts, despite the pandemic. The COVID-19 pandemic reduced demand for agricultural commodities. The interest expense ratio is calculated by dividing interest expenses by the sum of the value of production and Government payments for a given year. Interest expenses are the costs incurred by farm operations when debt is used to finance farm activities. A USDA forecast in February 2020 predicted interest expenses for 2020 at $18.0 billion, with a predicted interest expense ratio of 0.04. By February 2022, interest expenses for 2020 were estimated to be slightly higher than predicted at $19.4 billion. The February 2022 estimates also showed that while the value of production was lower than initially forecast, government payments were higher. The interest expense ratio was highest at 0.06 in 2000 and trended downward to a low of 0.03 multiple times from 2000 to 2020.

Corteva Announces 2022 Climate Positive Leaders Program

Corteva Agriscience Monday announced that applications are available for its 2022 Climate Positive Leaders Program. The program recognizes farmers and ranchers who implement, scale and share climate-positive practices. The program will give the selected global and regional leaders tools and opportunities to broadly share their experiences and help accelerate the adoption of climate positive practices. Farmers and ranchers in Argentina, Australia, Brazil, Canada, France, India, Ireland, Kenya, New Zealand, Spain, the United Kingdom, and the United States are eligible to participate. Farmers can be nominated by local or regional grower groups, nonprofit organizations, universities, field or sales representatives, or other technology partners. The Global Leader recipients will receive a lifetime membership to Global Farmer Network, training and in-person participation in a Global Farmer Roundtable. Corteva will accept nominations for the program through November 30, 2022. You can find more information at Corteva.com.

EPA Issues Fuel Waiver for Four States Impacted by Bp Refinery Shutdown

The Environmental Protection Agency over the weekend issued an emergency fuel waiver to help alleviate fuel shortages in four states impacted by a refinery shutdown. A BP oil refinery in Whiting, Indiana, shut down because of a fire at the facility. EPA waived the federal regulations and federally enforceable State Implementation Plan requirements for fuel volatility on gasoline sold in Illinois, Indiana, Michigan, and Wisconsin. The waiver will continue through September 15, 2022. The Clean Air Act allows EPA Administrator Michael Regan, in consultation with the Department of Energy, to waive certain fuel requirements to address shortages. Administrator Regan determined that extreme and unusual fuel supply circumstances exist and has granted a temporary waiver to help ensure that an adequate gasoline supply is available in the affected areas. EPA and DOE are continuing to actively monitor the fuel supply situation resulting from the Bp refinery shutdown and considering additional measures to alleviate the impact.

Fuel Prices Decline Again, Gas Down $1.20 From Peak

U.S. fuel prices continued their decline for the 11th straight week, with gasoline down five cents a gallon to a national average of $3.81. GasBuddy reports the national average is down 39.8 cents from a month ago but 69.1 cents higher than a year ago. The national average price of diesel has increased 7.3 cents in the last week and stands at $5.04 per gallon. GasBuddy’s Patrick De Haan says, “Gas prices are now $1.20 per gallon lower than mid-June with Americans spending $450 million less on gasoline every day as a result.” However, some issues could change the course of fuel prices moving forward, including the shutdown of BP’s refinery in the Midwest. De Haan says, “While that refinery may get back online sooner rather than later, it’s not impossible that down the road the situation could impact prices in the region." The rest of the country, however, will see prices moderate.

Tuesday Watch List

Markets

An index of U.S. home prices is due out at 8 a.m. CDT Tuesday, followed by an index of U.S. consumer confidence at 9 a.m. Traders will be watching the latest forecasts, checking the news from Ukraine and any clues from outside markets.

Weather

A cold front that produced widespread severe weather on Monday will continue to move south and east Tuesday. Though thunderstorms are not expected to be as strong as yesterday, there should be widespread coverage from Texas to the Northeast and points south of the front. Dryness and more seasonable temperatures are moving in behind the front, but readings still remain near or above normal for most areas.

Ag Credit Conditions Stay Strong As Risks Grow

The Kansas City Fed says agricultural credit conditions remained strong in the second quarter, but slower improvement is expected during the months ahead. Those bankers who responded to the Federal Reserve Survey of Agricultural Credit Conditions say farm income continued to increase. However, the pace of increase slowed in recent quarters, and further softening is expected going forward. Farm loan repayment rates continued to strengthen, but the pace of improvement also slowed. Following almost two years of acceleration, farmland values also showed signs of moderating as interest rates continued to increase. Strength in farm finances continued to support a positive outlook for agricultural credit conditions through the remainder of 2022, but risks to the farm economy are more noticeable. With a substantial increase in production costs over the past two years, profit margins for many producers could be squeezed by a sizeable decline in commodity prices. Balance sheets likely remain strong for 2022.

NCGA: New California Vehicle Requirements a Missed Opportunity

Last week, the California Air Resources Board approved standards for vehicles made in the model year 2026 and later. In response to the announcement, the National Corn Growers Association says California regulators “missed an opportunity” to allow for more innovation and broaden low- and zero-emission solutions, in addition to the proposed electric vehicles, to maximize emission reductions while improving equity for consumers. “As NCGA told regulators during the rule-making process, constraining the vision of a zero-emission future prevents the state from tapping into the immediate and affordable environmental solutions that come from replacing more gasoline with low-carbon and low-cost ethanol in both current and new vehicles, including the electric plug-in hybrids, ” the organization says in a release. “Ethanol is on a path to net zero emissions, and NCGA will continue to work with and urge California to use all the tools in its toolbox as it addresses climate change and cuts harmful tailpipe emissions.”

Whole Foods Sued Over Deception in Antibiotic-Free Meat

The nonprofit group Farm Forward joined a consumer class-action lawsuit against Whole Foods alleging that the retail giant is deceiving shoppers about beef products in its stores. Since 1981, Whole Foods has claimed that all of the animals within its supply chain are raised without antibiotics. However, an independent laboratory found antibiotic residue in “antibiotic-free” meat bought from a Whole Foods store in California. Antibiotic-free meat can cost as much as 20 percent or more than conventional meat, and surveys show 75 percent of consumers are willing to pay more for it. In April, Farm Forward released results of a program that tested Whole Foods meat for antibiotic residues. Among the findings, Farm Forward found residue of an antibiotic that can be used to promote growth in cattle in a meat product labeled “organic” and “antibiotic free.” Farm Forward says it has proof of deceptive marketing practices by Whole Foods.

Technical Difficulties for Weekly Export Sales Reporting

Last week, the USDA’s Foreign Agricultural Service launched a new Export Sales Reporting and Maintenance System. This is a system through which U.S. exporters are required by law to report any sales transactions with buyers outside the U.S. for many key commodities. The information collected through the system is aggregated and reported to the public each week by the FAS. During the launch, FAS encountered challenges that affected the physical dissemination of the data as well as the data quality. As a result, the agency took the system offline and retracted the weekly export sales information that was passed out last week. Data integrity, credibility, and transparency are top priorities for FAS, and the timely and accurate reporting of agricultural export sales data is vital to effectively-functioning markets. FAS recognized the disruption and took steps immediately to rectify the situation. FAS intends to resolve the problems as soon as possible.

Chinese Government Tells Farmers to Replant or Switch Crops After Drought

China’s record heatwave is beginning to disappear, and farmers are assessing the damage caused by the lengthy dry spell. Reuters says the Chinese government is urging its producers to replant or switch crops where they can. Over 70 days of extreme temperatures and low rainfall have hit the country’s crops hard. Rain is in the forecast over the next ten days, but farmers worry the heat has already done too much damage. In an emergency notice, the ag ministry called on the country’s farmers to harvest and store rice and take action to strengthen potential grain growth in the weeks ahead. In parts of the country where drought has already done damage, the government is asking its farmers to switch to late-fall crops like sweet potatoes. However, experts say that won’t be an easy task because nearby wells have been severely depleted of water, and some ponds have disappeared.

Glufosinate-Resistant Palmer Amaranth Found in Missouri

University of Missouri Extension researchers have confirmed the state’s first case of glufosinate-resistant Palmer Amaranth in the Bootheel Region of Missouri. Palmer Amaranth spreads and adapts quickly to herbicides. Each weed produces up to one million seeds, which heightens the spread of resistance. The confirmation of Glufosinate resistance is a big concern for the state’s farmers because that resistance seems to be evolving at a quicker pace. Extension researcher Jim Heiser says, “Every mode of action that Palmer becomes resistant to seems to come at a quicker pace than the previous one.” He also warns farmers not to solely rely on herbicides to control weeds. He says to consider cultural practices for weed control, such as narrow row spacing for crops, the use of cover crops, and harvest weed seed management techniques. Palmer’s spread likely comes from used farm equipment like combines, custom harvesting crews, and feed and seed from other regions of the country.

Monday Watch List

Markets

Traders will return from the weekend, checking the latest weather forecasts, any news from outside markets and will pause at 8 a.m. CDT to see if USDA has an export sale announcement. At 10 a.m., USDA's weekly grain export inspections will be released, followed by the Crop Progress report at 3 p.m.

Weather

A cold front that is working through the Corn Belt on Monday will spark scattered showers and thunderstorms from Kansas and Nebraska up into the central Great Lakes. Storms could be severe, with the greatest risk for severe weather across northern Illinois Monday afternoon and evening. Showers and thunderstorms may continue to develop in the hot and humid airmass south of the front as well but is not expected to be severe.

Fertilizer Institute Hopes for Quick Rail-Labor Union Contract Settlement

The Fertilizer Institute is grateful to members of the Presidential Emergency Board who listened to rail carriers and their labor unions amid their contract negotiations. The PEB offered measured recommendations on a pending contract agreement between the two. Both sides have until September 16 to evaluate the PEB’s recommendations during a mandated 30-day cooling-off period. The board’s recommendations include general wage increases and service recognition bonuses worth $1,000. “Uncertainty of this nature is yet another disruption in an already complex environment for farmers, so a speedy resolution is paramount,” says TFI President and CEO Corey Rosenbusch. “Over half of all fertilizer moves by rail every year throughout the United States, and the timeliness and reliability of fertilizer shipments are absolutely critical.” He also says if the farmers can’t get their fertilizer in a timely manner, it results in lower crop yields, higher food prices, and more inflation for America’s consumers.

Court Grants Coalition Intervention in Gray Wolf Lawsuit

The National Cattlemen’s Beef Association, the American Farm Bureau, and other members of a coalition applauded an appeals court decision allowing intervention in a case regarding gray wolves. The Ninth Circuit Court of Appeals will allow the coalition to intervene in the Defenders of Wildlife versus the U.S. Fish and Wildlife Service and defend the previous administration’s delisting of the gray wolf. “The decision to allow the coalition to intervene in the case demonstrates what we’ve always known: livestock producers deserve to have their voice heard on the delisting of the gray wolf,” says Kaitlynn Glover, executive director of the Public Lands Council. Farm Bureau President Zippy Duvall says when the gray wolf exceeded its recovery goals, it became an Endangered Species Act success story. “With thriving populations, management of species should now be the responsibility of the states, which can best determine appropriate management practices for the gray wolf,” Duvall says.

“Protecting Agriculture’s Future” is the theme for Farm Safety and Health Week

National Farm Safety and Health Week is September 19-23. Agriculture is known as one of the most dangerous industries in America. The National Institute for Occupational Safety and Health says about 100 agricultural workers suffer a lost worktime injury every day. In 2019, the agriculture industry had a fatality rate of 19 deaths per 100,000 workers. National Farm Safety and Health Week has been held the third week of September since it was established in 1944. The goal is to help bring attention to the risks of working in agriculture. To do that, AgriSafe has daily webinars for agricultural health and safety professionals, healthcare providers, extension agents, farmers, ranchers, and their employees. This year’s theme, “Protecting Agriculture’s Future,” reminds everyone in the industry that the cornerstone of sustainable agriculture is healthy and safe workers. Every day will have a different theme, such as “Tractor Safety and Rural Roadway Safety,” on Monday, September 19.

U.S. and Canadian Cattle Inventory Down Two Percent

The USDA says all cattle and calves in the U.S. and Canada combined to total 111 million head on July 1, 2022, a two percent drop from the 113 million head on July 1 of last year. All cows and heifers that have calved, at 44.5 million head, were down two percent from last year. All cattle and calves in the U.S. as of July 1, 2022, totaled 98.8 million head, down two percent from July 1 of last year. All cows and heifers that have calved came in at 39.8 million head, a drop of two percent from a year ago. All cattle and calves in Canada totaled 12.3 million head as of July 1, down three percent from the 12.6 million head on July 1, 2021. All cows and heifers that have calved hit 4.69 million head on July 1, a number that’s down one percent from a year ago.

Renewable Diesel to Overtake Biodiesel Production

The U.S. Energy Information Administration says renewable diesel production will surpass biodiesel production in the country in October. The EIA’s team lead for petroleum and natural gas modeling says they’re seeing continued growth on the renewable diesel side and stagnation to slight shrinking on the biodiesel side. Western Producer says renewable diesel capacity was estimated at 1.92 billion gallons per year in May, up from 1.75 billion gallons in January. Biodiesel capacity was estimated at 2.22 billion gallons, down from 2.26 billion. Many of the traditional oil refineries in the U.S. are being converted to renewable diesel plants. The EIA estimates that 440,000 barrels per day were converted to renewable diesel in 2020. Expectations are that another 660,000 barrels a day will be converted to renewable diesel in 2022. The agency says it’s already prepared an article for when renewable diesel surpasses biodiesel production, which it expects to publish in October.

NPPC Hires New Director of Food Policy

Dr. Ashley Johnson has joined the National Pork Producers Council as director of food policy. In her new role, she’ll focus on developing and implementing post-harvest food safety and human nutrition programs and addressing animal care issues in market channels. “Her wealth of knowledge is a tremendous asset as we help set the direction of the country’s food policies and weigh in on issues that could affect producers’ ability to produce safe, nutritious pork for consumers around the world,” says NPPC CEO Bryan Humphreys. Johnson comes to NPPC from Zoetis (zo-EH-tis), where she was a technical service veterinarian for more than five years. Among her many duties, she worked with the animal health company’s public affairs department to disseminate information to its pork team and customers on legislation and regulatory actions that could affect the pork industry. Johnson earned her Doctor of Veterinary Medicine from the Virginia-Maryland Regional College of Veterinary Medicine.

Friday Watch List

Markets

At 7:30 a.m. CDT, reports on U.S. personal incomes and consumer spending for July will be released, followed by the University of Michigan's index of U.S. consumer sentiment at 9 a.m. Federal Reserve Chairman Jerome Powell will speak in Jackson Hole, Wyoming Friday morning and is expected to support another rate hike when the Fed meets in September.

Weather

A front stalled across the Gulf Coast will continue to produce scattered showers on Friday while another system moving through Canada will bring some to the eastern Midwest and Northeast. Another trailing behind it will continue to bring some showers to the Northern and Central Plains as well. Overall, showers will be pretty isolated outside of the Northeast and Gulf Coast, offering only limited help for filling corn and soybeans in a few spots.

Vilsack Announces New Program for Underserved, Minority Farmers

A new $550 million program from the Department of Agriculture seeks to support projects that help underserved producers. The program supports projects that enable producers access to land, capital, and markets, and train the next diverse generation of agricultural professionals. The investments are made through funding provided in the American Rescue Plan Act, as amended by the Inflation Reduction Act. The provisions fund and direct USDA to take action to help ensure underserved producers have the resources, tools, programs, and technical support they need to succeed. Agriculture Secretary Tom Vilsack says the funding is part of “USDA’s unwavering commitment to advancing equity for all, including people who have been underserved, marginalized, and adversely affected by persistent poverty and inequality.” The program includes Up to $300 million for “Increasing Land, Capital and Market Access” Projects aimed at helping underserved producers. An additional $250 million goes to the “From Learning to Leading: Cultivating the Next Generation of Diverse Food and Agriculture Professionals” program.

USDA Invests $121 Million in Infrastructure to Combat Climate Change

The Department of Agriculture Wednesday announced $121 million in funding for critical infrastructure to combat climate change in rural America. The investments include $111 million for 289 projects to help people living in socially vulnerable communities. USDA Deputy Secretary Dr. Jewel Bronaugh says the investments will  “strengthen our energy security, create good-paying jobs and save Americans money on their energy costs.” The funding will help people in 49 states, Guam and Puerto Rico. It reflects the many ways USDA Rural Development helps rural residents, businesses and communities address economic development, infrastructure and social service needs, according to USDA. Bronaugh highlighted a total of 415 investments that USDA is making through three programs designed to help people and businesses in rural areas. The programs are Community Facilities Disaster Grants, Rural Energy for America Program Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loans and Grants, and Rural Energy for America Program Energy Audits and Renewable Energy Development Grants.

USDA Extends Infant Formula Waivers, Supports WIC State Agencies

The federal government this week extended a series of waivers to provide WIC families with additional infant formula options through the end of the year. The Department of Agriculture extended the waivers to December 31, 2022, or 60 days after the expiration of the state’s COVID-19 major disaster declaration. The waivers were previously set to expire at the end of September. Agriculture Secretary Tom Vilsack says, “We will continue to work all hands on deck to ensure families can access infant formula.” The waivers extended allow WIC state agencies, with the necessary agreements from their infant formula contract manufacturers, to offer participants additional infant formula options, such as alternate sizes, forms and brands. USDA began offering waivers immediately after the February voluntary recall of certain Abbott powder infant formulas, which exacerbated existing supply chain issues caused by the COVID-19 pandemic. Since then, USDA has granted nearly 500 waivers to WIC state agencies.

AFIA Releases State of the U.S. Feed Industry Report

The American Feed Industry Association released its annual "Our Industry, Our Promise," report Wednesday. The report details the challenges the U.S. feed and pet food industry faced over the past year, and the steps the AFIA took to address member priorities. The report provides an overview of the segment's impact on the U.S. economy, its efforts to promote animal food safety and worker health and safety, and its initiatives to enhance global competitiveness and industry environmental sustainability programs. AFIA President and Chief Executive Officer Constance Cullman says, "turmoil continued throughout 2021 and into 2022, but through it all, our industry stayed strong." The report offers a look at the business climate for U.S. animal food manufacturers, state issues and regulations, management of food safety, and trade. The report also provides an update on AFIA's educational offerings over the past year. Find the report on the AFIA website, afia.org.

Rural Homes with Persistent Poverty Have Less Access to Internet

Households in rural persistently poor counties were the least likely to have home internet in 2015-19, according to USDA’s Economic Research Service. The data released Wednesday shows more than three in ten households lack internet access at home. In comparison, only two in ten households in rural counties that were not persistently poor had no internet access at home. A similar pattern was observed in urban areas, with two in ten households in persistently poor counties lacking home internet access. Only a little more than one in ten households in urban counties that were not persistently poor had no internet access at home. For households with internet access at home, service was mainly through a subscription, which includes a range of access from dial-up to broadband to cellular data plans. USDA syas the gaps in at-home internet access and subscriptions suggest that households in persistently poor counties—and more specifically, households in rural persistently poor counties—had additional barriers to internet adoption.

Cattle Industry Convention Looking for New Talent

The National Cattlemen's Beef Association seeks new talent to perform during the 2023 Cattle Industry Convention and NCBA Trade Show in New Orleans next year. Applications for the National Anthem Contest and the Talent Round-Up are now being accepted. The 10th annual NCBA National Anthem Contest will accept entries through October 15, 2022. The contest winner will perform the "Star-Spangled Banner" at the convention's Opening General Session as well as the Friday night NCBA event. The winner will also receive round-trip airfare to New Orleans, a hotel room for three nights and free convention registration. Solo singers, bands and others with unique talents are also encouraged to enter the Talent Round-Up by November 11, 2022. Selected acts will receive complimentary registration, be invited to perform on the Beef's Got Talent stage during convention, and be recognized through social media. For more information and to enter, visit convention.ncba.org.

Thursday Watch List

Markets

USDA's weekly export sales report is due out at 7:30 a.m. CDT Thursday, the same time as weekly U.S. jobless claims, a revision of second quarter U.S. GDP and an update of the U.S. Drought Monitor. The U.S. Energy Department reports on weekly natural gas storage levels at 9:30 a.m. Traders will continue to keep an eye on the rain forecast for winter wheat areas and monitor world drought conditions as well as any news from Ukraine.

Weather

Rain showers with mostly light amounts will move across the northern Midwest and portions of the Northern Plains Thursday. Meanwhile, heavy rain and flooding are in store for the Gulf Coast and Deep South along with the northern Rockies. Dry conditions will be in place elsewhere.

USDA Accepting Applications for Biofuel Infrastructure Grants

The Department of Agriculture Tuesday opened the application window for grants to increase the sale and use of biofuels. USDA has $100 million in funding available through the Higher Blends Infrastructure Incentive Program, funded by the Inflation Reduction Act. The program seeks to market higher blends of ethanol and biodiesel by sharing the costs to build and retrofit biofuel-related infrastructure such as pumps, dispensers and storage tanks. Agriculture Secretary Tom Vilsack says, “Expanding the availability of higher-blend fuels is a win for American farmers, the rural economy and hardworking Americans.” The additional funding follows an April investment of $5.6 million to increase the availability of biofuels by 59.5 million gallons per year in California, Delaware, Illinois, Maryland, New Jersey, New York and South Dakota. In June, USDA also announced that it had provided $700 million in relief funding to more than 100 biofuel producers in 25 states who experienced market losses due to the pandemic.

U.S., Chile, Convene Environmental Affairs Council, Plans Indo Pacific Meeting

Officials from the U.S. and Chile met this week as part of the Environmental Affairs council under the U.S.-Chile Free Trade Agreement. The council is chaired by Assistant United States Trade Representative for Environment and Natural Resources Kelly Milton. The officials reviewed the progress of implementation obligations under the environmental chapter of the free trade agreement. The talks focused on climate, illegal fishing and strengthening ocean conservation. Meanwhile, the U.S. Trade Representative's Office Tuesday also announced an upcoming Indo-Pacific Economic Framework Ministerial meeting. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo will co-host the meeting September 8-9 in Los Angeles, California. Tai and Raimondo held a virtual Ministerial in July, reaffirming their goal to pursue ongoing and intensified engagements with Indo-Pacific partner countries. They held the first virtual Ministerial in May, shortly after the official launch in Japan. Ambassador Tai also held an informal meeting with the partners in June.

Organic Initiative Includes Grower Assistance Program

USDA’s Organic Transition Initiative announced this week includes a new program from the Risk Management Agency. The Transitional and Organic Grower Assistance, or TOGA Program, reduces a producer’s overall crop insurance premium bills, and helps them continue to use organic agricultural systems. Premium benefits for TOGA include ten percentage points of premium subsidy for all crops in transition, a $5 per acre premium benefit for certified organic grain and feed crops, and ten percentage points of premium subsidy for all Whole-Farm Revenue Protection policies for organic or transitioning to organic crops. Producers can receive both RMA’s TOGA and premium assistance from other premium subsidy programs. The TOGA program is part of the Organic Transition Initiative, which additionally offers farmer-to-farmer mentoring and direct support through conservation financial assistance. Meanwhile, USDA’s Farm Service Agency is currently accepting applications for both the Organic and Transitional Education and Certification Program and Organic Certification Cost Share Program.

Fruits, Vegetables, Top Local Foods Purchased by Schools

Many U.S. school food authorities purchase local foods such as fruits, vegetables, dairy, and proteins for their district’s cafeterias. In addition to buying locally produced foods, many school districts participate in other farm to school activities, such as product-specific promotions, taste tests of local foods, onsite edible gardens, and field trips to farms. Approximately two-thirds of U.S. school districts participated in farm to school activities during the 2018-19 school year, according to research from USDA. Of the school districts that participated, 78 percent reported purchasing any local foods during the school year. Fruits and vegetables topped the list of local foods purchased in 2018-19, at 85 percent and 82 percent of school districts, respectively. Further, 68 percent of school districts reported buying locally produced milk, and 29 percent reported buying local grains, including baked goods. Approximately a third of school districts reported purchasing other local dairy products, and about a quarter purchased locally produced proteins.

July Egg Production Down, Broiler Hatch Up

United States egg production totaled nine billion during July, down three percent from last year. The Department of Agriculture says production included 7.69 billion table eggs, and 1.31 billion hatching eggs, of which 1.22 billion were broiler-type, and 90.7 million were egg type. The average number of layers during July totaled 368 million, down four percent from last year. Total layers in the United States totaled 369 million, down four percent from last year. Egg-type chicks hatched during July totaled 50.1 million, down two percent from July 2021, while eggs in incubators totaled 49.9 million, up 11 percent from a year ago. Domestic placements of egg-type pullet chicks for future hatchery supply flocks by leading breeders totaled 166,000 during July 2022, down 17 percent from July 2021. Broiler-type chicks hatched during July 2022 totaled 859 million, up two percent from July 2021. Eggs in incubators totaled 727 million, up two percent from a year ago.

Register Now for the Second USDA Innovation Fair

Registration is open for the Second USDA Food Loss and Waste Innovation Fair on September 14. The virtual event showcases the latest food loss and waste mitigation technologies, innovations and programs developed by USDA, academic institutions, local governments, and businesses. The Innovation Fair is designed for everyone – from food scientists and industry experts to community gardeners and those curious about food loss and waste efforts. The fair includes presentations by 12 food loss and waste reduction experts and will feature 36 exhibit booths. Attendees are invited to visit the virtual booths, and text or video chat with representatives in real-time. Attendees can also interact with other participants in a virtual networking lounge. Also participating in this year's fair are U.S. Food Loss and Waste 2030 Champions—businesses and organizations that have committed to reducing food loss and waste in their own operations in the United States by 50 percent by the year 2030. Registration is free at www.usda.gov/foodlossandwaste.

Wednesday Watch List

Markets

A report on U.S. durable goods orders will be out at 7:30 a.m. CDT Wednesday, followed by the Energy Department's weekly inventory report at 9:30 a.m., including an update of ethanol production. Traders remain interested in the latest weather forecasts, events in Ukraine and growing evidence of global drought.

Weather

Wednesday features continued dry and warm across most central crop areas. Rainfall will focus on the Northern Plains and northern Midwest with light to moderate amounts, the Delta with locally heavy totals, and in the northern Rockies and Desert Southwest with potential flash flooding.

USDA to Invest up to $300 million in New Organic Transition Initiative

The Department of Agriculture Monday announced the details of a $300 million investment for a new Organic Transition Initiative. Funded in part by the American Rescue Plan, the initiative will help build new and better markets and income streams for farmers, according to USDA. Agriculture Secretary Tom Vilsack says, “we are expanding USDA’s support of organic farmers to help them with every step of their transition.” The number of non-certified organic farms actively transitioning to organic production dropped by nearly 71 percent since 2008. Through the comprehensive support provided by this initiative, USDA hopes to reverse the trend, opening opportunities for new and beginning farmers and expanding direct consumer access to organic foods through increased production. The initiative will deliver wrap-around technical assistance, including farmer-to-farmer mentoring, provide direct support through conservation financial assistance and additional crop insurance assistance, and support market development projects in targeted markets.

Farmland Prices, Equipment Sales, Decline in Monthly Index

Farmland prices and farm equipment sales declined in the August Creighton University Rural Mainstreet Index. The overall index fell for the fifth straight month, for August slumped to 44.0 from 46.0 in July. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. The region’s farmland price index for August declined to 60.0 from July’s 66.0, marking the 23rd straight month that the index has moved above growth neutral. August’s solid reading was the lowest index since February 2021. The August farm equipment-sales index sank to 45.9 from 56.5 in July. After 20 straight months of advancing above growth neutral, the index unexpectedly dropped below the threshold to its lowest level since November 2020. Index organizer Ernie Goss says, “Farmers and bankers are bracing for escalating interest rates and falling farm commodity prices.” However, bankers expect to record a 1.7 percent decline in farm loan delinquencies over the next 12 months.

Busy Week for USTR Officials

Officials from the U.S. Trade Representative's Office have a busy schedule this week. Assistant United States Trade Representative for Central and South Asian Affairs, Christopher Wilson, and Assistant United States Trade Representative for Agricultural Affairs, Julie Callahan, started the week in New Delhi. The officials held consultations under the framework of the U.S.-India Trade Policy Forum. Those talks continue through Wednesday, then Wilson will travel to Bangladesh for discussions on a range of bilateral trade issues on Thursday. Meanwhile, today, (Tuesday), Ambassador Jayme White meets with officials from Mexico to follow up on the July U.S.-Mexico-Canada Free Trade Commission meeting. Assistant United States Trade Representative for Environment and Natural Resources Kelly Milton will take part in the public session of the United States-Chile EAC-ECC meeting. The travels this week follow last week’s announcement that the U.S. and Taiwan reached a consensus on the negotiating mandate for the U.S.-Taiwan Initiative on 21st-Century Trade announced, with negotiations planned for this fall.

Pro Farmer Crop Tour Underway

Pro Farmer scouts are measuring the corn and soybean crop yield potential during this week’s Pro Farmer Crop Tour. Farmer-scouts and industry experts will cover corn and soybean fields across Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio and South Dakota during Crop Tour. Pro Farmer Editor Brian Grete says, “We know there are some trouble spots out there, areas that were dry in June and remained that way through pollination, but also many good areas where yields will be impressive.” Pro Farmer Crop Tour is the most thorough and most followed inspection of yield potential during a critical time in the growing season. Crop industry stakeholders watch results closely for insights around projected grain supplies and the effects on commodity markets. Daily results are presented during nightly meetings. Registration is required to attend the meetings or access live-streaming results. You can register at profarmer.com. Pro Farmer will release the final results of the tour Friday afternoon.

Adult Obesity Increased During First Year of COVID-19 Pandemic

New data from USDA's Economic Research Service shows that U.S. adults ages 20 and older reported a three percent higher prevalence of obesity during the first year of the COVID-19 pandemic. The study analyzed data from the Centers for Disease Control and Prevention's Behavioral Risk Factor Surveillance System from March 13, 2020, to March 18, 2021, compared to a pre-pandemic baseline period of January 1, 2019, to March 12, 2020. Four behaviors that can influence the risk of obesity—exercise, hours of sleep, alcohol use, and cigarette smoking—were also examined to help explain the change in the adult obesity rate during the pandemic. Participation in exercise rose 4.4 percent over the period, and people slept 1.5 percent longer, both associated with reducing obesity. Meanwhile, the number of days in the period of a month in which alcohol was consumed was 2.7 percent higher, and cigarette smoking dropped by four percent.

Fuel Price Decline Enters 10th Straight Week

The decline in fuel prices has extended to the 10th straight week. Gasoline prices fell 5.1 cents in the last week to $3.86 a gallon, while diesel prices fell 6.3 cents to $4.97 a gallon. The national average gas price is down 51.3 cents from a month ago but 72.2 cents higher than a year ago. GasBuddy’s Patrick D Haan says diesel prices are below $5 a gallon for the first time since March, “likely helping to cool off aggressive inflation numbers.” However, De Hann adds, “The pace of declines is certainly slowing down as oil prices have bounced up slightly.” Thus far, Mother Nature has spared markets from disruptions from hurricanes, but that remains a wildcard as we head into the peak of hurricane season. Oil markets rallied last week as global oil supply continues to tighten, but balancing concerns of an economic slowdown in many major developed countries.

Tuesday Watch List

Markets

A report on U.S. new home sales for July is due out at 9 a.m. CDT Tuesday, the only official report on the docket. Traders will continue to watch the latest weather forecasts, any news from Ukraine and for more specifics from the drought in China.

Weather

Warm and dry conditions will cover most primary crop areas Tuesday. This combination keeps pushing corn and soybeans in the latter stages of production. Rainfall will focus on the Delta with heavy amounts and a flood threat.

USDA Announces Another Phase of Disaster Assistance

The USDA announced another phase of assistance will be forthcoming to commodity and specialty crop producers impacted by natural disasters in 2020 and 2021. Over 18,000 producers will soon be mailed new or updated pre-filled disaster applications to offset eligible crop losses. About $6.4 billion has already reached 165,000 producers through the Farm Service Agency’s Emergency Relief Program. “We knew when we announced ERP in May that we would have additional applications to send near the end of the summer as we received new information and found producers left out of the first data set we used,” says USDA Undersecretary for Farm Production and Conservation Robert Bonnie. FSA will mail those pre-filled applications in late August to producers who have potentially eligible losses. Bonnie says he's proud of his team’s continued efforts to help over 18,000 producers who need the assistance. Contact your local FSA office for additional information on eligibility requirements.

Drought Conditions Improve Slightly in the Western Corn Belt

The U.S. Drought Monitor says the amount of land facing drought eased a little in the western Corn Belt but was largely unchanged in the Midwest. In a six-state region, including Wyoming, Colorado, Kansas, Nebraska, North Dakota, and South Dakota, approximately 51 percent of the land suffered under drought conditions. That’s down from 53 percent during the previous week and 72 percent only three months ago. In the eastern part of the Midwest, including Minnesota, Iowa, Missouri, Illinois, Wisconsin, Michigan, Indiana, Ohio, and Kentucky, about 14.5 percent of the area was in drought. That’s down slightly from 15 percent the prior week but up from less than one percent three months ago. Iowa, the nation’s biggest corn producer, has 39 percent of its land in a drought, up 6.9 percent from May. Illinois, the second-largest producer of corn and soybeans, only has five percent of its area in a drought.

Ethanol Industry May Get Help From Climate Law

President Biden’s new climate law offers a major expansion in tax credits for companies that capture and store carbon emissions. Reuters says that could give the ethanol industry a significant boost toward achieving its climate goals. The ethanol industry intends to use carbon capture and storage technology to reach its goal of net-zero emissions by 2050. A group of projects that could benefit from the expanded credits is a series of pipeline proposals in the Midwest that could capture and transport ethanol plant emissions. Three companies intend to put up over 3,600 miles of pipelines from ethanol plants in six states to underground carbon storage sites. The three companies say the projects have the potential of capturing up to 39 million tons of carbon every year. That could potentially mean more than $3.3 billion in tax credits for the businesses. The pipelines are currently in the permitting stages in each state.

There is Still Time to Apply for ASA Conservation Legacy Awards

There is still time for farmers to share how conservation is a part of their operation and maybe win a Conservation Legacy Award. The award recognizes farm management practices of U.S. soybean farmers that are both environmentally friendly and profitable. Reduced tillage, cover crops, and improving water quality are just a few of the conservation practices that are eligible for the reward. Different regions of the country have their unique challenges and ways to approach conservation and sustainability. All U.S. soybean farmers are eligible for a Conservation Legacy Award. Entries are judged on soil management, water management, input management, conservation, environmental management, and sustainability. The selection process for the awards is divided into four regions, which are the Midwest, Upper Midwest, Northeast, and South. One farmer from each region will get recognized at the 2023 Commodity Classic in Orlando, Florida, and one will be the overall winner. The registration deadline is September 1.

Improving Photosynthesis Means a 20 Percent Boost in Soybean Yields

For the first time, researchers have proven that multigene bioengineering of photosynthesis increases major food crop yields in field trials. A collaborative team led by the University of Illinois has worked on this project for more than ten years. Project researchers have transgenically altered soybean plants to increase the efficiency of photosynthesis, resulting in greater yields without a loss of quality. These results come at an important time. A recent United Nations report shows that nearly 10 percent of the world’s population was hungry in 2021. By 2030, UNICEF says more than 660 million people will likely face food scarcity and malnutrition. Photosynthesis is the natural process all plants use to convert sunlight into energy and yield. Project researchers say the 100-plus step photosynthesis process is surprisingly inefficient, so they’ve been working to improve it. The lead scientist says data shows the food supply level needs to grow significantly to meet the demand.

USDA Livestock, Dairy, and Poultry Outlook for August

U.S. export numbers of eggs, turkey, and pork in the first half of 2022 were all down compared to the first half of last year, but exports of broiler meat and beef were higher. Egg and turkey exports, down 38 and 20 percent, respectively, were hurt by the outbreak of Highly Pathogenic Avian Influenza. Egg exports to Canada were flat, but there were significant decreases in major markets like Mexico, Japan, and Hong Kong. Exports of turkey to Mexico, one of the top destinations, were down 18 percent year over year. Pork exports were down 18 percent year over year due to weaker demand in the Asian markets. Broiler exports were up three percent, with exports to Taiwan increasing over 64 percent from last year. That helped to offset decreases in major markets like Mexico and Cuba. U.S. animal products may continue facing headwinds like a strong U.S. dollar making American exports more expensive.

Monday Watch List

Markets

Back from the weekend, traders are keeping close track of the latest weather forecasts, events from Ukraine and growing evidence of global drought. USDA's weekly report of grain inspections is due out at 10:00 a.m. CDT Monday, followed by Crop Progress at 3 p.m.

Weather

Dry and seasonally warm conditions will cover most primary crop areas Monday. This combination is favorable for filling crops. Some beneficial rain moved across the Midwest during the past week. Meanwhile, portions of the Southern Plains and Delta will have moderate to heavy rain, notably in northern and northeastern Texas.

U.S. and Taiwan Start Negotiations on Formal 21st Century Trade Initiative

The United States and Taiwan reached an agreement on the negotiating mandate for the U.S.-Taiwan Initiative on 21st Century trade that was announced on June 1. The negotiating mandate sets out the broad objectives shared by both countries for the upcoming negotiations. The first round of talks will likely take place in the early fall. “Today, we begin negotiations with Taiwan that will deepen our trade and investment relationship, advance mutual trade priorities based on shared values, and promote innovation and inclusive economic growth for our workers and businesses,” says Deputy U.S. Trade Representative Sarah Bianchi. The U.S. and Taiwan have set a robust agenda for negotiations on trade facilitation, good regulatory practices, strong anti-corruption standards, and enhancing trade between small and medium enterprises in both countries. “We plan to pursue an ambitious schedule for achieving high-standard commitments and meaningful outcomes to help build a prosperous 21st-century economy,” Bianchi adds.

Western Farmers to be Impacted by Emergency Water Usage Cuts

Seven western states that rely on Colorado River water were told by government officials to develop a plan to dramatically reduce water usage by as much as four million acre-feet. The L.A. Times says those negotiations didn’t result in an agreement, so the U.S. Bureau of Reclamation announced new emergency water cuts for states like Arizona and Nevada and in Mexico as the nation’s two biggest reservoirs are at historically low levels. “In order to avoid a catastrophic collapse of the Colorado River System and a future of uncertainty and conflict, water use in the basin must get reduced,” says Tanya Trujillo (True-HEE-yoh), assistant secretary for water and science with the Interior Department. Under the Tier 2 Shortage Declaration, Arizona’s yearly water allotment is reduced by 21 percent, Nevada’s by eight percent, and Mexico’s by seven percent. “Every sector state has a responsibility to ensure water gets used with maximum efficiency,” Trujillo adds.

Dairy Groups Tout Nutrition as Schools Reopen

Almost 50 million children are returning to public schools, and a group of dairy and nutrition advocates encourages parents and policymakers to remember dairy. The dairy advocates say when it comes to the health of students, milk and dairy product options need to be more accessible during the school year. The group released a fact sheet pointing out that milk is the top source of calcium, potassium, phosphorous, and vitamin D in kids ages 2-18. Unfortunately, the USDA and the Department of Health and Human Services say children over four and adolescents aren’t getting enough dairy to meet the recommendations in the federal Dietary Guidelines, missing out on several nutrients they need to grow. Michael Dykes of the International Dairy Foods Association says, “School meals are an important opportunity for children to get the nutrients they need. Now is when we need to work together to encourage nutritious milk consumption every day.”

Taco Bell Ventures Into Plant-Based Meat Market

Taco Bell is getting into the plant-based meat market. The company says it’s testing a proprietary product in the market around Birmingham, Alabama. The Wall Street Journal says the company has been working on the soy and pea-based product for three years. It’s debuting in a Crispy Melt Taco that’s made with a white corn shell tortilla. Taco Bell’s Chief Innovation Officer Liz Matthews says the product will cost $2.49 and that price affordability was critical to an accurate market test. The cost has been a challenge in testing other plant-based products as they typically cost 40 percent more than animal-based products. “It was important not to have an upcharge,” Matthews says. “We wanted to ensure that this product is as affordable and accessible as our seasoned beef.” The company wanted to get the taste and consistency right so that customers couldn’t tell the difference between the plant-based and animal-based offerings.

Lamb Board Studying the Industry’s Environmental Footprint

The American Lamb Board’s benchmark research on the environmental footprint of America’s lamb industry is within months of wrapping up. The research is funded by the mandatory American Lamb Checkoff and focuses on collecting data from representative U.S. sheep farms, ranches, and feedlots related to greenhouse gas emissions. The study will cover four types of operations, including intensive production, intensive grazing, extensive grazing, and range. From the data, Michigan State University researchers will compare the amount of greenhouse gasses required to produce one kilogram of lamb from each production type. “We must have solid, actual data on American lamb production’s environmental footprint,” says ALB Chair Peter Camino (Kah-MEE-no). “We need to have science to accurately tell our U.S. lamb story instead of assumptive data that doesn’t paint a realistic picture of the industry.” ALB also says it’s time to establish some benchmark data to work on weaknesses and build on industry strengths.

Iowa Steer Show Raises Over $400,000 for Ronald McDonald House

A list of Iowa VIPs helped raise a record-breaking amount of money for those in need. The Iowa Governor’s Charity Steer Show is an Iowa tradition that pairs famous people together with steer exhibitors to benefit charity. The Des Moines Register says this year’s event raised over $440,000 for the Ronald McDonald House Charities of Iowa, surpassing last year’s total of $375,000. “It’s hard to comprehend what kind of impact that much money can have for Iowa families,” say co-chairs Tanner Lawton and Casey Anderson. “The compassion shown by all of our participants is what makes this such a special event.” This was the 40th annual event, which has raised more than $5 million since starting in 1983. The Ronald McDonald House organization supports families with children experiencing a critical illness. The Iowa Beef Industry Council, Iowa Cattlemen’s Association, and the office of Governor Kim Reynolds co-hosted the event this year.

Friday Watch List

Markets

Events at the Europe's largest nuclear plant in Zaporizhzhia, Ukraine, are getting increased attention as Russia's attack has put the plant at risk of leaking radiation or possibly, experiencing a meltdown. Otherwise, traders will pay attention to weather and the only significant report of the day, USDA's Cattle on Feed report for Aug. 1, due out at 2 p.m. CDT.

Weather

Showers and thunderstorms are in store for the northern Midwest Friday. The rain will expand into more of the Midwest during the weekend with favorable late-season crop moisture. We'll also see periods of rainfall in the southeastern and southwestern U.S. with expansion across the far Southern Plains indicated over the next few days. The Far West and Northwest heat wave continues but with less intensity than earlier this week.

Biofuel Groups Welcome President’s Signature on IRA

Biofuel groups welcome signage of the Inflation Adjustment Act this week. The sweeping legislation includes key priorities for the biofuels industry. The legislation signed by the president earlier this week includes an extension for tax credits for carbon oxide sequestration and utilization, the Clean Fuel Production Credit starting in 2025 and expiring at the end of 2027 to produce low-carbon fuels, and five tears of sustainable aviation fuel credits. Additionally, the legislation includes $500 million for biofuels infrastructure through the end of 2031, an extension of the Biomass-Based Diesel Blenders Credit, and a $300 million grant program to increase domestic production and deployment of sustainable aviation fuel. Renewable Fuels Association President and CEO Geoff Cooper says, "This bill puts ethanol on a sustainable path for growth and investment.” Growth Energy CEO Emily Skor adds, “Biofuels are critical to meeting climate goals, and this law will help maximize our industry's contributions to a cleaner future. “

RIPE Responds to IRA, Urges Change in Payment Model to Producers

Rural Investment to Protect our Environment, or RIPE, applauds the inclusion of $20 billion for climate-smart agricultural practices in the Inflation Reduction Act. However, RIPE urges lawmakers to shift funds away from the cost-share model in favor of payments that provide producers with a reasonable return for conservation. RIPE Executive Director Aliza Drewes says, “We believe that new funds intended for climate-smart agriculture should set payment levels to cover the full cost of practice implementation.” While the IRA offers significant funding, the group claims most producers will not seek to use them because the payment terms are limited to cost-share requirements. RIPE is a producer-led nonprofit advancing a unique climate policy plan for farmers, ranchers and the public, and advocates for the implementation of the RIPE100 policy. The policy would allow farmers and ranchers to earn payments that reflect the benefits they deliver with a price floor above implementation cost, economic risks and future climate policy costs.

USAID Purchasing Ukrainian Wheat for UN Food Program

The U.S. Agency for International Development, known as USAID, is providing more than $68 million in additional funding to the UN World Food Program. The funding supports the purchase, movement and storage of up to 150,000 metric tons of Ukrainian wheat to help respond to the world’s worst food crises. Before Russia's invasion, Ukraine was one of the World Food Program's top grain suppliers and the fourth largest commercial wheat exporter. Opening the Ukrainian market is a vital step forward in the emergency response, according to USAID, which says the world is facing its most severe food crisis in decades. USAID supported the first humanitarian grain shipment to leave the Black Sea this week. The shipment will support the humanitarian response in the Horn of Africa. The United States has provided nearly $7.6 billion in assistance to respond to the global food security crisis since the beginning of Russia’s war against Ukraine.

Farmers Receive 15-18% of Retail Price for Fresh Potatoes

USDA’s Economic Research Service reports the farm share of the retail price of potatoes fluctuated between 15 percent and 18 percent in recent years. The farm share of the retail price is the ratio of what farmers receive to what consumers pay per pound in grocery stores. The national monthly average price of fresh potatoes was $0.78 per pound at grocery stores in 2021, and the monthly average price received by farmers was $0.12 per pound. As part of the farm share calculation, the USDA Economic Research Service assumes that farmers supply a little more than 1.04 pounds of fresh potatoes for each pound sold at retail to account for the roughly four percent of fresh potatoes that is lost through spoilage or damage. Therefore, at an average farm price of $0.12 per pound, the farm receipt was 12.5 cents for each pound of potatoes sold in 2021, about 16 percent of the retail price.

Former House Ag Lawmaker Faces Fraud Charges

A former member of the House Agriculture Committee faces fraud charges. The Department of Justice this week released a 28-count indictment against TJ Cox, a Democrat who represented California’s 21st District between 2019-2021. According to the indictment, Cox perpetrated multiple fraud schemes targeting companies he was affiliated with and their clients and vendors. Cox created unauthorized off-the-books bank accounts and diverted client and company money into those accounts through false representations. From 2013 to 2018, Cox obtained over $1.7 million in diverted client payments and company loans and investments across two different fraud schemes. According to allegations in the indictment, when Cox was a candidate for the U.S. House of Representatives in the 2018 election, he perpetrated a scheme to fund and reimburse family members and associates for donations to his campaign. During his time on the Agriculture Committee, Cox sat on the Livestock and Foreign Agriculture Subcommittee, along with the Biotechnology, Horticulture and Research Subcommittee.

Scholarships to Help Producers Attend Cattle Industry Convention

The 2023 Cattle Industry Convention and NCBA Trade Show is headed to New Orleans next year, and funding is available to offset some costs for producers. The National Cattlemen’s Beef Association offers a variety of scholarships and grants to help producers attend CattleCon23, February 1-3, 2023, in New Orleans. NCBA President Don Schiefelbein says, “These scholarships are perfect for youth, first-timers and others looking to expand their network at the largest event in the beef cattle business.” Scholarship recipients receive a complimentary Education Package registration and discounted housing accommodations for three nights. Scholarships will be awarded to up to five beef cattle industry members, up to three young beef producers, and up to three students in the industry. Applications for all scholarship categories are due by September 23, 2022, and will be evaluated based on eligibility and answers to application questions. For more information about the scholarship program, visit convention.ncba.org.

Thursday Watch List

Markets

USDA's weekly export sales report is set for 7:30 a.m. CDT, the same time as weekly U.S. jobless claims and an update of the U.S. Drought Monitor. A 9 a.m., a report on U.S. existing home sales in July and the Conference Board's index of U.S. leading indicators will be released, followed by the Energy Department's weekly natural gas storage at 9:30 a.m. Not surprising, the latest weather forecasts remain an important trader topic.

Weather

Dry conditions with seasonally warm temperatures are in store across the central U.S. Thursday. Showers and thunderstorms will cross the northern tier, and a broad swath of light to moderate rain is in store for the southern tier. Meanwhile, the Far West and Northwest will have another day of excessive stressful heat. The Southwest is in line for flooding monsoon rain during the balance of this week.

Biden Signs Inflation Adjustment Act

President Joe Biden Tuesday signed the Inflation Adjustment Act, a bill that includes billions for USDA conservation programs. Brooke S. Appleton, National Corn Growers Association vice president of public policy, says, “Through this legislation, Congress and the administration recognize that farmers’ voluntary climate-smart agricultural practices are an important part of addressing climate change.” The law allocates $19.9 billion in funding for USDA's conservation programs and $1 billion for additional conservation technical assistance. To advance biofuels, the legislation includes $500 million for infrastructure for greater market deployment of higher blends of biofuels, and new tax credits based on carbon reduction to incentivize clean fuels such as biofuels like ethanol and new sustainable aviation fuel. Senate Agriculture Committee Chair Debbie Stabenow, a Michigan Democrat, welcomed the president's signature on the bill. Stabenow says, "we are equipping farmers, foresters, and rural communities with the tools they need to be a part of the climate solution, while boosting their economic success at the same time."

Ukraine Ag Exports Down Roughly 50%

Ag exports from Ukraine are down 46 percent this year, compared to 2021, according to Ukraine’s agriculture ministry. So far, Ukraine has exported 2.65 million metric tons of grain during the 2022-23 growing season. Grain exports for the 2021-22 season ending June 30 rose 8.5 percent to 48.5 million metric tons, driven by strong shipments before Russia invaded Ukraine, according to Reuters. Since, exports have stalled because the Black Sea ports were closed off, driving fears of higher food prices and even shortages. However, those ports we unblocked last month, and Ukraine began exporting products. Ukraine's Ministry of Agrarian Policy reports the country exported 2.66 million metric tons of grains and oilseeds in July 2022, 22.7 percent more than June. Exports of wheat increased more than three times in July to about 412,000 tons compared to 138,400 tons shipped for export in June. Ukraine could harvest up to 50 million metric tons of grain this year, compared to 86 million in 2021.

USDA Releases Latest Wheat Outlook Report

The August Wheat Outlook Report from the Department of Agriculture shows Russia, Canada and the United States are all expected to recover from their production issues last year. The report shows Global 2022-23 wheat production is pegged at a record 779.6 million metric tons. Production for Russia is expected at a record 88.0 million metric tons. The Canadian Prairies have received ample rains to recover from the devasting drought in 2021-22. The U.S. Northern Plains and Pacific Northwest have recovered from a major drought last year, but year-to-year growth in production is constrained by drought in the Southern Plains. U.S. wheat production is forecast at 1.783 billion bushels, up two million bushels from the July forecast. On the other hand, Argentina and Australia are projected down from their record production in 2021-22. A major heat wave has limited the European Union's yield potential. And the ongoing conflict in Ukraine creates a challenge for producers to harvest, and growing conditions have been below average, which has limited yield potential.

Soy-Based Asphalt Installed at Farm Progress Show Site

Soybean farmers attending the 2022 Farm Progress Show will have the opportunity to experience the value of their soy checkoff investments in research and development firsthand. An installation of more than 42,000 square feet of soy-based asphalt, sponsored by the Iowa Soybean Association, has been completed at the Central Iowa Expo Grounds near Boone, Iowa, just in time for the event. As high oleic soybean acres continue to increase, more end users are realizing the value of this soybean variety and the corresponding added value it brings to a range of products, including asphalt. April Hemmes, United Soybean Board member from Iowa, says, “Our goal in funding this project is to highlight the diversity of high oleic soybean oil and its potential for use in pavement, coverings and coatings.” The binding agent, developed with high oleic soybean oil, increases asphalt durability and offers a more environmentally sustainable alternative to traditional binding agents.

USCA Announces Independent Beef Producer and Processor's Online Directory

The U.S. Cattlemen's Association Tuesday announced the Independent Beef Producer and Processor's online directory. The network is intended to be a resource for those seeking new connections within the industry. The directory is for producers looking for regional processors, processors seeking local producers and consumers interested in sourcing local beef. USCA Independent Processors Committee Chairman Patrick Robinette says, “This directory has been a priority for the USCA processing committee as consumers continue to seek out local beef options and producers continue to explore efficient and affordable ways to get it to them.” To register as a producer or processor, head to uscattlemen.org to find more information and the application link. You must be a U.S. Cattlemen's Association member to post to the directory. In January, the Biden administration unveiled its Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. USCA supports the Action Plan, which included a $1 billion investment in independent processing capacity.

Membership in National FFA Organization Reaches All-Time High

The National FFA Organization Tuesday announced a record-high student membership number of 850,823, an increase of 15 percent from last year. In addition, chapter numbers increased by 178, resulting in 8,995 chapters in the United States, Puerto Rico and the U.S. Virgin Islands. Interest in FFA and agricultural education continues to grow as membership and the number of chapters increase. The top five student membership states are Texas, California, Georgia, North Carolina and Tennessee. This year, the organization has more than 132,700 Latino members, more than 47,000 Black members and more than 13,000 American Indian and Alaska Native members. Further, 43 percent of the membership is female, and 50 percent is male, with .5 percent reporting as nonbinary, 4.7 percent undisclosed, and 1.2 percent unreported. National FFA CEO Scott Stump adds, “As we continue to grow, we see the enthusiasm for agricultural education and FFA reflected in our membership.”

Wednesday Watch List

Markets

A report on U.S. retail sales in July is due out at 7:30 a.m. CDT Wednesday, followed by the U.S. Energy Department's weekly inventory report at 9:30 a.m. Monday's report from USDA showed a slightly lower value for corn products so last week's ethanol production is expected to come in steady to lower than the previous week. At 1 p.m., the Fed will release minutes from the latest Open Market Committee meeting. Weather and Ukraine remain high on the list of traders' attention.

Weather

Dry and mild conditions will cover most primary crop areas Wednesday, favorable for filling row crops along with wheat harvest. Rain will focus on the Southern Plains and Delta in the form of light to locally moderate showers and thunderstorms. Meanwhile, stressful hot and dry conditions are in store for the Far West and Northwest.

Tai, Vilsack, to Visit Iowa This Week

U.S. Trade Representative Katherine Tai and Agriculture Secretary Tom Vilsack head to Iowa this week. The duo from the Biden administration will join Representative Cindy Axne, an Iowa Democrat, for a series of events focused on trade. Specifically, they will promote the administration's work to expand market access for U.S. farmers and help them bring their goods to customers worldwide. Ambassador Tai and Secretary Vilsack will also promote the recently passed Inflation Reduction Act, along with the CHIPS and Science Act, which they say will lower costs for Iowa families, reduce inflation, and help the United States maintain its global competitive edge. Because of the Inflation Reduction Act, the CHIPS and Science Act, and the Bipartisan Infrastructure Law, Tai says, “the United States is in a stronger position to maintain our global competitive edge for years to come." Meanwhile, Vilsack will also travel to Colorado this week for similar events promoting the Inflation Adjustment Act.

Republicans Concerned Over Inflation Adjustment Act

House Democrats passed the Inflation Adjustment Act last week following action in the Senate. President Joe Biden is expected to sign the legislation this week. However, the partisan bill has Republicans concerned about the upcoming farm bill. Glen GT Thompson of Pennsylvania is the ranking Republican on the House Agriculture Committee. Following passage of the Inflation Adjustment Act in the House, Thompson stated, "My Democrat colleagues are either politically deaf or blinded by ideology as they ignore 40-year high inflation, exorbitant food and fertilizer prices, severe labor shortages, and relentless overregulation from the Biden Administration." Thompson contends the legislation "only complicates the pathway to a Farm Bill and creates even greater uncertainty for farmers." However, House Agriculture Committee Chair David Scott, A Georgia Democrat, says, "My colleagues may complain about the steps we had to take to ensure this additional funding,” but adds that Republicans have taken similar actions with the Farm Bill.

USDA Touts Inflation Reduction Act Funding for Conservation

The Department of Agriculture Monday promoted the funding included in the Inflation Reduction Act for USDA conservation programs. The legislation will deliver $19.5 billion in new conservation funding to support climate-smart agriculture. Agriculture Secretary Tom Vilsack says, "President Biden and Congress have taken an important, historic step towards easing the burden of inflation on the American public and meeting the moment on climate." The funding will bolster the new steps that USDA's Natural Resources Conservation Service announced Monday to improve opportunities for nutrient management. NRCS will target funding, increase program flexibilities, and launch a new outreach campaign to promote nutrient management's economic benefits and expand partnerships to develop nutrient management plans. This is part of USDA's broader effort to address future fertilizer availability and cost challenges for U.S. producers. Through USDA’s conservation programs, farmers will have streamlined opportunities to improve their nutrient management planning, which provides conservation benefits while mitigating the impacts of supply chain disruptions and increased input costs.

USDA: Beef Producers Face Higher Inputs

U.S. beef producers face higher input costs this year, predicted up seven percent compared to 2021. USDA’s Economic Research Service reported Monday the farmer’s share of the retail value of beef also increased year over year, but rising input costs, especially for cattle feed, may limit farmers’ ability to benefit from higher cattle prices. Feed expenses are the largest operating cost for cow-calf producers, comprising 75 percent of these costs in 2021. Prices for beef cattle feed were up 16 percent in May 2022 relative to May 2021. High fertilizer prices have contributed to increased feed costs, while drought conditions have squeezed feed grain and hay supplies. The 2021/22 season-average farm price for corn—the primary grain fed to cattle—is currently projected at $5.95 per bushel, the highest since the 2012/13 marketing year. Other feed grains, including sorghum, oats, and barley, are projected to increase in 2021/22 relative to 2020/21.

NACD Announces $15 Million in 2022 Technical Assistance Grants

The National Association of Conservation Districts Monday announced $15 million in technical assistance grants. The grants continue funding to nearly 500 conservation districts in 49 states and territories. Funded by USDA's Natural Resources Conservation Service, the grant program is in its fifth year. The program allows NACD to accelerate on-the-ground conservation by increasing the capacity available to conduct outreach and deliver technical assistance. Grant funding supports over 490 positions, including technicians, conservation planners, program support specialists and technical specialists. All these employees will provide conservation technical assistance to help customers carry out their conservation plans. Over the life of the program, grantees have delivered services in 50 states and three territories. Conservation districts have awarded more than 30,000 Farm Bill conservation contracts and assisted with over 55,000 additional EQIP contracts. Their work has benefitted over 2.5 million acres, improving soil health, forest and woodland conditions, wildlife habitat, and water quality.

USDA Recommends Adding Food Safety Items to Your Back-to-School List

With August being back-to-school season, the Department of Agriculture reminds parents to include food safety items on their shopping list. Sandra Eskin, USDA Deputy Undersecretary for Food Safety, says, “Because children are particularly at risk for serious foodborne illness, food safety must be at the top of the list when preparing lunches for school and field trips.” When preparing school lunches, or food for children at any time for that matter, USDA provides a few tips to enhance food safety. First, USDA suggests that you clean and sanitize surfaces and utensils to prevent cross-contamination during food prep. Additionally, different colored cutting boards can help keep meat and poultry separate from ready-to-eat foods, such as fruits and vegetables. Using food thermometers can help determine whether cooked foods reach a safe temperature to kill any harmful bacteria. Also, to keep perishable food safe in a lunch box, use cold gel packs combined with a frozen juice box or bottle of water.

Tuesday Watch List

Markets

U.S. housing starts for July are set to be released at 7:30 a.m. CDT Tuesday, followed by the Federal Reserve's July report on U.S. industrial production at 9:15 a.m. Traders will continue to examine the latest weather forecasts and news out of Ukraine and China.

Weather

A front continues its trek southward, bringing much more seasonable temperatures to the country. This is resulting in moderate to locally heavy precipitation in and around Missouri throughout the day. Other isolated showers will be possible west to Colorado, in the Upper Midwest, and across the East, but the rains in the middle of the country are coming to drought areas in desperate need. Heat will unfortunately continue south of the front and across the West.

USDA Forecasts Lower Corn Production and Higher Soybean Production Than Last Year

The USDA’s National Ag Statistics Service forecasted U.S. corn production down from 2021 and soybean production up from last year. The corn production forecast is 14.4 billion bushels, down five percent from last year. Soybean production is forecast at 4.53 billion bushels, up two percent from 2021. Average corn yield is forecast at 175.4 bushels an acre, down 1.6 bushels from 2021. USDA says soybean yields will average a record-high of 51.9 bushels an acre, a half-bushel higher than last year. Wheat production is predicted at 1.78 billion bushels, eight percent higher than in 2021. Growers will likely produce 1.20 billion bushels of winter wheat, down six percent from last year. Spring wheat forecast is 55 percent higher this year at 512 million bushels. NASS forecasts all cotton production at 12.6 million 480-pound bales, 28 percent lower than last year. Yield will average 846 pounds per harvested acre, up 27 pounds from 2021.

WASDE Calls for Lower Corn, Higher Soybean Ending Stocks

The World Ag Supply and Demand Estimates Report predicted lower 2022-2023 U.S. corn supplies, reduced feed and residual use, slightly higher food, seed, and industrial use, smaller exports, and lower ending stocks. With supply falling more than usage, stocks dropped 82 million bushels to 1.4 billion. The season-average corn price is unchanged at $6.65 a bushel. U.S. soybean supplies are projected to be 4.8 billion bushels, 36 million higher than last month. Soybean exports are up by 20 million bushels to 2.16 billion on increased supplies. Ending stocks are forecast higher at 245 million bushels, and the season-average soybean price is down slightly to $14.35 a bushel. The wheat outlook shows higher supplies, higher domestic use and exports, and reduced stocks. The projected ending stocks dropped to 610 million bushels. Even though it dropped by $1.25, the season-average farm price is still projected at a record $9.25 a bushel.

Solid Farm Economy Shows Signs of Slowing

The Kansas City Federal Reserve says financial conditions in its district remained solid in the second quarter, but survey respondents say signs of slowing growth are likely in the months ahead. Farm real estate values grew rapidly in recent quarters, but those valuations moderated in the second quarter alongside recent drops in agricultural commodity prices. Farm income remained stronger than last year, but an increase in farm loan interest rates, drought, higher input costs, and the pullback in commodity prices likely contributed to a slightly less optimistic outlook for the farm economy than the previous quarter. While this year’s outlook is still positive, lenders reported growing concerns about 2023. A larger share of lenders reported significant increases in production expenses for producers compared to 2021. Severe drought has reduced hay and forage for livestock and contributed to higher feed costs. Despite concerns, loan repayment problems dropped to the lowest level in seven years.

New England Residents Can Still Have Pork on the Table

New England residents who love pork caught a break. A Massachusetts federal court judge signed a court order approving an agreement to delay enforcement of a state law banning the sale of pork that comes from animals not raised under the state’s housing standards. A coalition led by the National Pork Producers Council filed suit seeking to stop the law’s impending implementation. The suit also asks the court to find the law unconstitutional. “This is a significant outcome as NPPC continues to push to preserve the rights of America’s pig farmers to raise hogs in the way that’s best for their animals and maintains a reliable supply of pork,” says Terry Wolters, president of the NPPC. “The impact would have been especially hard on producers in surrounding states who didn’t have a vote in the Massachusetts referendum.” The agreement ends 30 days after the Supreme Court decides on a suit against California’s Prop 12.

Gas Prices Drop Below Four Dollars a Gallon

The American Automobile Association says the national average price of regular gasoline fell below four dollars a gallon. The national average was $3.99 a gallon last week, a sharp drop from the record high of five dollars a gallon in mid-June. Prices haven’t been below four dollars since March. Oil prices worldwide have dropped amid rising concern about the global economy, which has taken gas prices lower as well. Brent, the global benchmark for oil prices, has fallen under $100 per barrel, down from more than $120 in June. NPR says industry analysts expect prices will continue falling but how long that will continue depends on what happens to oil prices in the future. Global economic concerns, especially as food and energy prices climb, will continue to determine the amount of oil demand. Oil producers in the U.S. and around the world worry about overproducing oil given the world’s economic fears.

FBN Releases 2022 Corn and Soybean Yield Report

Farmer Business Network released its 2022 U.S. Corn and Soybean Yield Report. According to a recent survey, analysts expect the U.S. corn yield to be 175.9 bushels per acre, and soybeans will average 51.1 bushels per acre. FBN’s latest model-based yield forecast is 170 bushels per acre for U.S. corn and 50.7 for soybeans. Among their key findings for corn, yields in Iowa and Nebraska are expected to be significantly below the strong yields of 2021. Yield expectations decreased in Missouri and the Dakotas while Indiana and Ohio have the strongest yield improvements. Soybean findings show most states are set to have smaller yields compared with last year, with the exception of the Northern Plains. Missouri, Nebraska, and South Dakota have lower yield outlooks accounting for the majority of this year’s expected decrease. FBN’s current prediction of lower U.S. yields puts the balance sheet in a position to have declining stocks.

Monday Watch List

Markets

Back from the weekend, traders will still be considering USDA's new estimates from Friday, keeping close track of the latest weather forecasts and watching for any news from Ukraine. USDA's weekly report of grain export inspections is due out at 10 a.m. CDT Monday, followed by NOPA's monthly soybean crush report at 11 a.m. and USDA's Crop Progress report at 3 p.m.

Weather

A system setting up a cold front across the Central Plains into the Ohio Valley is active Monday morning with moderate to heavy rain in southern South Dakota and Nebraska and will get into southwest Iowa later today. All of these areas are in desperate need of rainfall and look to get it. Heat continues south of here with triple-digit temperatures yet again for the Central and Southern Plains and perhaps the Delta as well. Cool temperatures through the rest of the Corn Belt are easing stress for filling corn and soybeans 

Congressional Research Office Details Ag Provision in Inflation Reduction Act

The Congressional Research Service this week published details of the Inflation Reduction Act regarding agriculture. The Senate passed the bill, which is considered a substitute to the House-passed Build Back Better Act, on August 7, and the House will consider the bill Friday (today). The legislation provides $19.5 billion for agricultural conservation. It would add over $18 billion in additional funding for existing farm bill conservation programs. The bill also provides debt relief for distressed farm borrowers and assistance for underserved farmers and ranchers. These provisions would replace similar provisions from the American Rescue Plan Act that were blocked by the courts because the relief was found to be race-based and not narrowly tailored to meet a compelling state interest. The legislation would support renewable energy initiatives, primarily by providing $13.3 billion for farm bill energy title programs, and provide $5 billion in funding for forest management, planning and restoration.

U.S. Harvesters and Heavy-Duty Tractors Gain in July, Smaller Units Continue Decline

U.S. and Canadian ag tractor monthly unit sales in July 2022 fell, while combine sales grew in the U.S., according to the latest data from the Association of Equipment Manufacturers. U.S. total farm tractor sales fell 21 percent for the month of July compared to 2021, while combine sales for the month grew 9.2 percent to 715 units sold. That’s the second straight month of gains in combine harvesters so far this year. Heavy-duty ag tractors were positive, but total farm tractor sales are down 14.8 percent year-to-date, while combine sales are approaching even, now down only 2.2 percent on the year. In Canada, overall unit sales in tractors were down 10.7 percent, while harvesters are down 22.1 percent, reversing the previous month’s improvement. AEM’s Curt Blades says, “Right now, the trends we’re seeing in farm equipment unit sales tracks with trends we’re seeing in the overall economy.”

USDA Awards $74 Million to Improve Rural Health Care

The Biden administration Thursday announced a $74 million effort to improve health care facilities in rural communities. The USDA Rural Development grants will help 143 rural health care organizations expand critical services for 3 million people in 37 states, Guam and Puerto Rico. The investments include $32 million for 67 rural health care organizations to help more than one million people living in socially vulnerable communities. The Biden administration made the funds available in the Emergency Rural Health Care Grants Programs through its historic legislative package, the American Rescue Plan Act. The investments will help rural hospitals and health care providers implement telehealth and nutrition assistance programs, increase staffing to administer COVID-19 vaccines and testing, build or renovate facilities, and purchase medical supplies. They also will help regional partnerships, public bodies, nonprofits and Tribes solve regional rural health care problems and build a stronger, more sustainable rural health care system in response to the pandemic.

USDA to Invest $15 Million in Innovative Projects for Climate-Smart Agriculture

The Department of Agriculture this week announced a $15 million investment for the Conservation Innovation Grants Classic program. Through the program, grantees work to address water quantity, air quality, soil health and wildlife habitat challenges, all while supporting agricultural production. This year's funding priorities are climate-smart agriculture, addressing invasive species and conservation in urban agricultural systems. USDA’s Natural Resources Conservation Service Chief Terry Cosby says, “We’re eager to help our nation’s farmers and ranchers address these challenges and opportunities, and science and innovation will help get us there.” For the fiscal 2022 award process, at least ten percent of the total funds available are set aside for proposals that entirely benefit historically underserved producers. Applications are being accepted now through October 11, 2022. Private entities whose primary business is related to agriculture, nongovernmental organizations with experience working with agricultural producers and non-federal government agencies are eligible to apply. For more information and to apply, visit grants.gov

USDA Invests $2.2 Million to Help Underserved Producers, Small Farms

The Department of Agriculture Thursday announced a $2.2 million award to 16 organizations to educate historically underserved producers, small-scale farmers and others. The award from USDA's Risk Management Agency funds farm risk management and climate-smart farm practices. USDA says the funding provides the resources for organizations, such as nonprofits and universities, to develop training and resources for producers on risk management options. RMA Administrator Marcia Bunger says, "This funding and these partnerships help us reach communities that have historically lacked access to training and resources." This $2.2 million investment for 2022 builds on a nearly $1 million investment in 2021. RMA advertised available funding in January 2022, and more than 50 organizations applied. Successful applicants provided comprehensive summary of work statements and budgets, and proposals that demonstrated an ability to partner with other entities to deliver training. Organizations receiving funding this year include nonprofits, historically black colleges and universities, and university extensions, among others. 

National Farmers Union Schedules Washington Fly-in

National Farmers Union members will head to Washington, DC, next month for the organization’s Fall Legislative Fly-In Sunday, September 11th through Wednesday, September 14. During the four-day gathering, Farmers Union members from across the country will meet with Members of Congress, of Agriculture officials, and representatives from other federal agencies. Throughout the meetings, Farmers Union members will share their legislative and policy priorities for the final months of 2022.  Farmers Union members will highlight the need for Fairness for Farmers policies, which include placing a special investigator for meat and poultry at USDA, strengthening the Packers and Stockyards Act, bringing more openness to the cattle market, re-establishing Country Of Origin Labeling for beef, and ensuring that farmers have the right to repair their own equipment. Discussions will also be held to outline NFU’s priorities for the upcoming 2023 Farm Bill and how the Inflation Reduction Act can best help family farmers and ranchers address the climate crisis.

Friday Watch List

Markets

The University of Michigan's index of U.S. consumer sentiment is set of 9 a.m. CDT Friday, followed by USDA's WASDE and Crop Production reports at 11 a.m. CDT. One hour later, the Farm Service Agency will release its first estimate of prevented plantings in 2022. Traders will keep their usual habits and stay close to the weather forecast.

Weather

A disturbance moving through the Upper Midwest is bringing scattered showers and thunderstorms to Minnesota and Wisconsin Friday morning and will continue to press a bit eastward throughout the day. Some moderate to heavy rain will be possible in spots. Other scattered showers remain possible across the Southeast as a front continues to slip south through the region. Meanwhile, heat continues to be widespread through the majority of the Plains, stressing filling crops.

Consumer Price Index: Inflation Continues for Food Prices

The latest Consumer Price Index released Wednesday shows a continued increase in the cost of food in the United States. The food index increased 1.1 percent in July, the seventh consecutive monthly increase of 0.9 percent or more. The food at home index rose 1.3 percent in July as all six major grocery store food group indexes increased. The index for nonalcoholic beverages rose the most, up 2.3 percent, as the index for coffee rose 3.5 percent. The index for other food at home rose 1.8 percent, as did the index for cereals and bakery products. The index for dairy products increased 1.7 percent, and the index for meats, poultry, fish, and eggs rose 0.5 percent in July after declining in June. The index for fruits and vegetables also increased 0.5 percent over the month. The overall Consumer Price Index was unchanged in July after rising 1.3 percent in June, and the gasoline index fell 7.7 percent in July.

Ukraine Reports 2.66 Million Metric tons of Ag Exports in July

Ukraine's Ministry of Agrarian Policy reports the country exported 2.66 million metric tons of grains and oilseeds in July 2022, 22.7 percent more than June. Exports of wheat increased more than three times in July to about 412,000 tons compared to 138,400 tons that were shipped for export in June. At the same time, this is significantly less than the 960,000 tons of wheat exported from Ukraine in July 2021 through the working seaports of the country, but the impact of the new crop is noticeable. Ukraine shipped 183,000 tons of barley, higher than the 26,000 tons of barley exported a month earlier. However, this is less than the 1.1 million tons of barley shipped in July last year. Corn exports increased in July by 84.7 thousand tons compared to June and amounted to 1.1 million tons. For comparison, in July 2021, corn exports were at the level of 960,000 tons, because traditionally, at this time, the Ukrainian corn season was coming to an end.

Growth in Number of Farmers Markets Slows

New data released Wednesday from USDA’s Economic Research Service shows the growth in the number of farmers markets is slowing. According to USDA’s Agricultural Marketing Service, from 1994 to 2019, the number of farmers markets rose from 1,755 to 8,771 in 2019, averaging growth of nearly seven percent per year. Expansion began to slow in 2011 before eventually falling below a one-percent per year increase between 2016 and 2017. Since then, growth in the number of farmers markets has remained modest and stable. A USDA ERS report found that shares of local food sales have increased at intermediate market outlets, such as grocery stores, restaurants, and distributors. Increased availability of local products at these outlets corresponds with a plateau in purchases at direct-to-consumer outlets such as farmers markets and contributes to the observed slower growth relative to the prior two decades. According to the 2019 National Farmers Market Manager Survey, about two-thirds of farmers market vendors reported an increase in overall production.