Mexico appears to be moving ahead with its plan to ban GMO corn imports by 2024. Reuters says Mexico is considering the possibility of direct agreements with farmers in the U.S., Argentina, and Brazil. Mexico’s deputy agriculture minister says the 2024 ban on GM corn won’t be amended in any way. U.S. yellow corn imports are used primarily for livestock feed in Mexico. Victor Suarez (SWAH-rez) says Mexico will cut its imports of U.S. yellow corn by half when the ban takes effect via increasing domestic production. To fill any remaining gap, Mexico will try to make deals with farmers in other countries to grow non-GMO corn and sell it to Mexico. “There are many alternatives to importing non-GMO yellow corn from the United States,” Suarez says. These moves appear to go back on the promise from Mexico’s ag minister that Mexico wouldn’t limit imports of GMO yellow corn from the U.S.
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Monday, October 31, 2022
Drought Conditions Pushing Eastward
Roughly six of every ten acres of land in the U.S. is in some level of drought. The Weekly Drought Monitor says arid conditions now stretch from the Appalachian Mountains in the east to the Pacific Coast in the western U.S. Conditions grew worse in the Ohio Valley while warm weather combined with below-normal precipitation to further dry the Midwest. The University of Nebraska’s National Drought Mitigation Center says the extent of the dry conditions is on par with 2012 as drought expanded across more than half of the states, particularly in the Midwest and Southeast. Drought also deepened in the Central Plains, where stock ponds for cattle remain low to nonexistent. Pastures are providing marginal feed, and most producers have to supplement their cattle feed. While the growing season for field crops is done, drought still affects the winter wheat crop, which makes up most of America’s wheat production.
U.S. Diesel Supplies are Shrinking Rapidly
America has a shortage of diesel supplies on hand and it’s putting pressure on suppliers to get more into the fuel supply. The Start Magazine says a shortage is spreading in the eastern United States and has prompted at least one supplier to initiate emergency protocols. Mansfield Energy is a fuel supplier that says conditions are rapidly devolving, so they require a 72-hour notice for deliveries to secure fuel and freight. Diesel is the fuel that trucks, trains, and ships fill their tanks with to move goods around the country and across the globe. Supplies are tight partly because Russian diesel imports are banned in the U.S. Andrew Hunter, a senior economist with Capital Economics, says, “U.S. refining capacity has fallen over the past few years, which doesn’t help.” Diesel prices hit a record high of $5.81 per gallon in June, and prices could go higher if the winter is colder than expected.
Over 75 Percent of Soybean, Cotton, and Corn Acres are Genetically Engineered
USDA’s Economic Research Service says genetically engineered seeds were commercially introduced in the U.S. for major field crops in 1996, and adoption rates increased rapidly. By 2008, more than 50 percent of U.S. corn, cotton, and soybean acres were planted with genetically engineered seeds. The total acres with GE seeds has grown even further, with now more than 90 percent of U.S. corn, upland cotton, and soybeans produced using GE varieties. Genetically engineered crops are broadly classified as herbicide-tolerant (HT), insect-resistant (Bt), or a combination of the two. While other traits like virus and fungus resistance, drought tolerance, and enhanced protein oil or vitamin content have been developed, HT and Bt traits are the most commonly used in U.S. crop production. Herbicide-tolerant seeds are also widely used in alfalfa, canola, and sugar beet production, but most of the GE acres are planted to the three major field crops: corn, cotton, and soybeans.
Biodiesel Plays a Big Role in California’s GHG Drop
California released its Greenhouse Gas Inventory Report for 2020 which showed a 16 percent decrease in transportation carbon emissions. Clean Fuels Alliance America says that success was due in part to increasing the use of biodiesel and renewable diesel. The state’s analysis shows the percentage of biodiesel and renewable diesel in California’s fuel supply grew from 0.4 percent in 2011 to almost 21 percent in 2020 through the Low Carbon Fuel Standard. California Air Resources Board data says biodiesel and renewable diesel generated 44 percent of the LCFS credits in 2020. “As California works to continue reducing carbon emissions, it’s relying on increased production, import, and blending of biodiesel and renewable diesel,” says Clean Fuels’ CEO Donnell Rehagen (REE-hay-gen). Without biodiesel and renewable diesel, California’s tailpipe fossil CO2 would have been 15 million metric tons higher in 2020. The reduction equals taking 3.2 million cars off the road in 2020.
NPPC Promotes New VP of Domestic Policy
The National Pork Producers Council says Kelly Cushman is its new vice president of domestic policy. In the newly-created position, Cushman will oversee U.S. government engagement, advocacy, and lobbying efforts for the U.S. pork industry. “Kelly comes to NPPC with a proven track record as an effective leader and political strategist, developing and executing government affairs outreach programs,” says NPPC CEO Bryan Humphreys. Cushman is a public affairs and communications professional with over 25 years of experience. She has a blended background of political, government agency, and corporate experience. “I’m excited to support America’s pig farmers who prioritize the health and well-being of their animals to provide high-quality and affordable products,” Cushman says. “I look forward to expanding and integrating NPPC’s government affairs engagement in Washington, D.C., and across the country. Cushman has a bachelor’s degree in biological sciences from Clemson and a master’s in environmental science and policy from Johns Hopkins.
Monday Watch List
Markets
Back from the weekend, traders will check the latest weather forecasts and any news, especially from Ukraine. USDA's weekly report of export inspections at 10 a.m. CDT will give another indication of how soybeans are moving on the river. USDA's Crop Progress report at 3 p.m. will be watched for row crop harvest progress and winter wheat emergence. Financial traders are apt to be cautious with nearly everyone expecting another rate hike Wednesday.
Weather
Mild to very warm temperatures and mostly dry conditions for most areas on Monday will make for some good trick-or-treating weather. A few showers are going through the eastern Midwest and Southeast on Monday, but the coverage is rather low. Another system is moving into the Pacific Northwest, however, and will be the start of a battle in the middle of the country later this week.
Friday, October 28, 2022
Survey Shows Farmer Concerns About Carbon Markets
A new report from Farm Journal shows farmer perspectives and concerns on pathways and barriers to participating in carbon markets. A majority of farmers surveyed revealed significant concerns about overcoming technical and financial roadblocks to having success in the carbon markets. Producers worry that the benefits won’t be worth the cost, ongoing compliance regulations will be burdensome and that existing ag practices they already have in place on their operations won’t be fairly compensated. Farm Journal says the initial findings show that even the most “carbon-curious” farmers are saying that participating in current market conditions would require too much time, effort, and resources without fair returns on those investments. Farmers are also concerned about their data and whether it will get handled appropriately or will be difficult to collect. After several years, 97 percent of farmers aren’t ready to participate in carbon markets, but 93 percent are aware they exist.
USDA Providing $759 Million to Improve Rural Broadband Access
Ag Secretary Tom Vilsack says his agency is providing $759 million to improve internet access for people living and working in 24 states, Puerto Rico, Guam, and Palau. The investments include funding from the Bipartisan Infrastructure Law that provides $65 billion to help expand reliable, affordable, high-speed internet access to communities across the United States. “People living in rural towns across the nation need high-speed internet to run their businesses, go to school, and connect with their loved ones,” says Vilsack. “That’s how you grow the economy, not just for rural areas, but across the nation.” The $759 million in loans and grants comes from the third round of funding under the ReConnect Program. USDA is issuing a total of 49 awards in states like Alabama, Arizona, Kansas, Missouri, South Dakota, and many others. So far this year, USDA has announced $1.6 billion from the third round of ReConnect funding.
Bunge: Strong Demand Ahead for Soybean Oil
The U.S. soybean sector will continue to see support from rising global demand for biofuels. Oil giant Bunge says that support will stay in place for “some time to come.” The company’s chief financial officer says the demand for soybean oil is strong from both the food and energy-producing sectors. Industry Update Dot Com says Bunge also sees unusually high interest from buyers wanting to lock in their prices beyond the next quarter. “We’re very deliberate about price,” says Bunge CEO John Nappi (nap-PEE). “But the demand is there and continuing to grow steadily. And we haven’t seen any decline or lack of interest from either the energy producers or the food industry side of the equation at this point.” SP Global says demand for soybean oil from the U.S. biofuel industry has been rising quickly since 2020 as processors are more confident about the government’s commitment to an energy transition.
Poll Finds Rural Voters Pessimistic About the Future
A Daily Yonder poll of rural Americans shows they’re worried about the present, feeling pessimism about the future, and planning to vote the way they did in recent elections. The poll was commissioned by the Center for Rural Strategies and found that rural voters in highly-contested states hold negative views about the economy. For example, three-quarters of the respondents say the economy isn’t working for them. Just over half say they don’t expect their financial situations to get better in the next year. A little over three-quarters of the respondents say they think things will get worse, not better, for the next generation of Americans. The Daily Yonder survey also found nearly half of rural voters say the rising cost of living is one of their biggest concerns. The second-largest concern is government dysfunction. Other top issues included jobs and the economy, social security, rising crime, health care, and the rising cost of food and gas.
Inland Waterway System Still Struggling with Drought
The conditions along America’s inland waterway system remain concerning. Farmers are harvesting an overall strong crop, but the inland waterway system they use to ship commodities doesn’t have the ability to accommodate large amounts of new grains. It’s especially hard on the soybean industry because September through February accounts for 80 percent of U.S. soybean exports. Because over half of America’s soybeans are exported, barge transportation is essential. American Commercial Barge Lines says depth restrictions of no greater than nine feet have been instituted on the Lower Mississippi River, an almost 30 percent decrease. Barges are often loaded to 11-12 feet this time of year on the Mississippi River south of St. Louis. For every one foot of decreased water depth, that means 5,000 fewer bushels are loaded onto each barge. A maximum of 25 barges can be connected on the lower Mississippi compared to 30-40 barges in typical years.
USDA Launches Loan Assistant Tool to Enhance Customer Service
The USDA has launched a new online tool to help farmers and ranchers better navigate the farm loan application process. The now uniform application process will help make sure all farm loan applicants receive equal support and have a consistent customer service experience with USDA’s Farm Service Agency, regardless of individual circumstances. “USDA recognizes that more must be done to ensure all customers have equal access to our programs and services,” says FSA Administrator Zach Ducheneaux. “This tool will help loan applicants better understand the application process and gather the needed documents before the process even begins.” USDA experiences a high rate of incomplete or withdrawn applications, due in part to a challenging and lengthy paper-based application process. The new Loan Assistance Tool is available 24-7 and gives customers an online step-by-step guide that supplements the support applicants receive in person at an FSA office. For more information, go to farmers.gov.
Friday Watch List
Markets
The Labor Department's third-quarter employment cost index will be out at 7:30 a.m. CDT Friday, the same time as a report on U.S. personal incomes and consumer spending for September. The University of Michigan's consumer sentiment index for October is due out at 9 a.m., the same time as a U.S. index of pending home sales for September. Traders will keep an eye on the latest weather forecasts and on outside markets ahead of a likely rate hike on Wednesday, November 2.
Weather
A small storm system has moved into Texas where rains have spread into Oklahoma. The system will be a slow-mover with showers possibly getting into the Delta Friday night, but could wait until Saturday in some places. Some heavier rain will be possible as further drought reduction looks likely in this small area. But the rest of the country will largely be dry today with near- to above-normal temperatures, favoring harvest and other fieldwork.
Thursday, October 27, 2022
Bronaugh To Lead East Africa Agribusiness Trade Mission
Deputy Agriculture Secretary Jewel Bronaugh will lead a trade mission to Nairobi, Kenya, and Zanzibar, Tanzania, from October 31 through November 4. Representatives from 32 agribusiness and farm organizations will join Bronaugh on the trip. She says, "This trade mission will provide firsthand knowledge of market conditions and opportunities in East Africa and expand awareness about U.S. agricultural and food products in the region." Both Nairobi, Kenya and Zanzibar, Tanzania, serve as strategic ports in East Africa, attracting many U.S. exporters and investors. Last year, the United States exported more than $60 million worth of agriculture, fish, and forestry products to Kenya, and $6.9 million worth of agricultural products to Tanzania. During the week-long trade mission, participants will meet with potential importers, processors, and distributors from Kenya and Tanzania, as well as other East African nations. National agribusiness groups represented include the U.S. Grains Council, U.S. Meat Export Federation, and the U.S. Soybean Export Council, among others.
R-CALF Makes Post-Election Push for M-COOL
R-CALF USA, the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America, is making a push for Congress to consider mandatory country-of-origin labeling of beef. R-CALF is encouraging its members and others to show their support to lawmakers for the American Beef Labeling Act. The bill was introduced by Republican Senators John Thune and Mike Rounds, alongside Democrats Jon Tester and Cory Booker last month. The legislation would require the U.S. Trade Representative, in consultation with the U.S. Secretary of Agriculture, to develop a World Trade Organization-compliant means of reinstating MCOOL for beef within one year of enactment. USTR would have six months to develop a reinstatement plan, followed by a six-month implementation window. If USTR fails to reinstate MCOOL for beef within one year of enactment, it would automatically be reinstated for beef only. R-CALF points to a Morning Consult poll that claims 86 percent of U.S. voters support the bill.
Illinois Leads U.S. Pumpkin Production
Pumpkins are on full display across the United States as part of many fall traditions. The production of pumpkins, from classic orange Howdens to new varieties like Cinderella, is widely dispersed throughout the United States, with all states producing some pumpkins. However, USDA’s Economic Research Service reported Wednesday that about 40 percent of pumpkin acres are harvested in only six states. Illinois is consistently the nation's largest pumpkin producer by acreage and weight. In 2021, Illinois produced 652 million pounds, more than a quarter of total U.S. pumpkin production and more than the next five states combined. Unlike all other States, most of Illinois' pumpkins are used for pie filling and processed for other food uses. Pumpkins from other states are primarily intended for decorative, or carving, use. In 2021, Indiana produced 181 million pounds of pumpkins, California grew 157 million pounds, Texas grew 108 million pounds, Michigan grew 89 million pounds, and Virginia grew 82 million pounds.
Research: Rainfall Declines Increase Food Insecurity
Research by Penn State University published in ScienceDaily shows food insecurity increases when rainfall is below normal. The researchers focused on food insecurity in Tanzania, and found moving from a year with typical rainfall to a particularly dry year was associated with a 13-percentage-point increase in the risk of being food insecure. Tanzania has a high prevalence of food insecurity and is highly dependent on rain to grow its maize crops. Penn State assistant professor Heather Randell says, "Potential interventions could include providing drought-tolerant maize, increasing access to agricultural extension services, scaling up agricultural index insurance, improving uptake of soil and water conservation practices, and providing cash transfers based on drought early warning systems." Randell adds the findings also could apply to other low- and middle-income countries, especially those heavily dependent on maize production. The researchers say food insecurity affected about two billion people, or 26 percent of the global population, in 2019.
Clean School Bus Program Funding Primarily Supports Electric Busses
The nearly $1 billion investment from the Environmental Protection Agency’s Clean School Bus Program announced Wednesday is largely for electric busses. Through a lottery system, the agency has selected 389 applications totaling $913 million to support the purchase of 2,463 buses, 95 percent of which will be electric. EPA will distribute awards to school districts in all 50 states and Washington D.C., along with several federally recognized Tribes and U.S. territories. School districts identified as priority areas serving low-income, rural, and, or Tribal students make up 99 percent of the projects that were selected. More applications are under review, and the agency plans to select more to reach the full $965 million in the coming weeks. Funding for the effort comes from the Bipartisan Infrastructure law to “build a healthier future, reduce climate pollution, and ensure the clean, breathable air that all our children deserve,” according to EPA Administrator Michael Regan.
Oscar Mayer: Avoid Bacon on World Vegan Day
Oscar Mayer is calling on bacon enthusiasts to abstain from bacon delight of any kind on World Vegan Day, November 1. The company says, "Deliciously tempting bacon, smoked with real wood smoke for 12 hours, can be tough for those who wish to give up meat." According to a recent survey, more than half of vegans have abandoned their diet for bacon, making it the ultimate "gateway meat." Research shows that 63 percent of vegans wish they could eat bacon, and 56 percent admit bacon's delicious taste temps them. To show the brand's dedication on November 1, Oscar Mayer will reduce temptation by removing all bacon from paid media, and censoring, blurring and removing bacon from its social media. Oscar Mayer’s new campaign encourages fans to “BacOFF,” on social media, by pledging to give up bacon on World Vegan Day. Those who choose to do so could win a lifetime supply of bacon.
Thursday Watch List
Markets
Thursday promises to be a busy morning for new reports. USDA's weekly export sales report is due out at 7:30 a.m. CDT, the same time as weekly U.S. jobless claims, September durable goods and an update of the U.S. Drought Monitor. The U.S. Commerce Department will also issue its first estimate of third-quarter GDP at 7:30 a.m. and many are expecting positive growth. Meanwhile, the European Central Bank is expected to raise its interest rate Thursday morning and the Energy Department's weekly report of natural gas sales is due out at 9:30 a.m.
Weather
A system is exiting the Central Rockies into the Southern Plains on Thursday. Some scattered showers have been falling over Nebraska and South Dakota from the overnight but will spread south into Oklahoma and Texas later today. There is a small risk for severe weather over Texas, but mostly should be just rain. Other areas of the country will be dry with near-normal temperatures.
Wednesday, October 26, 2022
NMPF Unanimously Endorses Marketing Order Modernization Plan
National Milk Producers Federation leadership Tuesday unanimously endorsed a proposal to modernize the Federal Milk Marketing Order milk-pricing system. The plan includes returns to the "higher of" Class I mover, discontinuing including barrel cheese in the protein component price formula. It extends the current 30-day reporting limit to 45 days on forward-priced sales of Nonfat Dry Milk and dry whey to capture more export sales in the USDA product price reporting. Additionally, the plan updates milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas. The plan develops a process to ensure make-allowances are reviewed more frequently through legislation directing USDA to conduct mandatory plant-cost studies every two years, and updates dairy product manufacturing allowances contained in the USDA milk price formulas. Any final proposal will be reviewed by the organization before it’s submitted to USDA to be considered for a federal order hearing.
Tyson Foods, Washington State Settle Price Fixing Lawsuit
Washington state Attorney General Bob Ferguson announced this week the largest chicken producer in the nation, Tyson Foods, will pay $10.5 million because of a lawsuit over price-fixing on chicken products. The announcement is the third and largest resolution in Ferguson’s lawsuit against 19 broiler chicken producers. The claims against the remaining 16 companies continue. The conspiracy harmed an estimated 90 percent of Washington state residents, or approximately seven million individuals. Consequently, the scheme impacted virtually everyone who consumes chicken products. Tyson Foods is the largest chicken producer in the U.S., with approximately 20 percent of the national market share for broiler chickens. The Washington Attorney General’s Office asserts Tyson Foods and 18 other chicken producers drove up the price of chicken since at least 2008, causing consumers to overpay by millions of dollars. Two other states, Alaska and New Mexico, have similar antitrust cases against national chicken producers.
Legislation Introduced to Support Farmers Affected by PFAS
In a bipartisan, bicameral effort to provide vital assistance to farmers affected by PFAS, lawmakers recently introduced the Relief for Farmers Hit with PFAS Act. Led by Maine Republican Senator Susan Collins, the legislation would authorize grants for states to provide financial assistance to affected farmers. PFAS are man-made "forever" chemicals used in industry and consumer products and can lead to serious health effects. PFAS contamination has prevented some farms from selling their products, creating financial hardship for many family farmers. Collins says, "USDA needs to step up and provide support to farmers, who at no fault of their own, are at risk of losing their livelihoods." Specifically, the funds would increase PFAS testing for soil and water sources, provide relocation of a commercial farm if the land is no longer viable, and create research on soil and water remediation systems, and the viability of those systems for farms.
USDA: Conservation Tillage Increasing
The share of acreage for major cash crops—wheat, corn, soybeans, and cotton—that are planted using conservation tillage has increased over the past two decades in the United States. USDA’s Economic Research Service reported the data Tuesday. Farmers reported employing conservation tillage on the majority of acres of wheat at 68 percent, 76 percent of corn acres, and 74 percent of soybeans. Conservation tillage is less common on cotton fields at 43 percent of acres. Conservation tillage, which includes no-till and mulch till, reduces soil disturbance and preserves more crop residue relative to conventional tillage, in which a plow or other implement turns over most of the soil before planting. Additionally, no-till production, a type of conservation tillage in which farmers plant directly into remaining crop residue without tilling, has increased substantially for wheat and corn over the past two decades. Finally, mulch till has trended upward on each crop except for corn over the past two decades.
Florida Ag Department Releases Hurricane Ian Damage Assessment
The Florida Department of Agriculture this week released a preliminary damage assessment for agriculture following Hurricane Ian. The assessment considered that losses to agriculture production and infrastructure are estimated to be between $1.1 billion and $ 1.8 billion. Florida Agriculture Commissioner Nikki Fried says, "While today's assessment is a preliminary snapshot of the losses to Florida agriculture, it is a critical first step in the process of securing federal disaster aid for our hard-working producers." The report estimated citrus damages between $400 million and $675 million, other fruits and vegetables between $153 million and $230 million, and field crops between $86 million and $160 million. Horticulture damages are estimated up to $297 million, livestock at $492 million and forestry at $32 million. Hurricane Ian made landfall on September 28 near Fort Myers and Cape Coral as a category-four hurricane. The report says Ian is among the strongest hurricanes to make direct landfall in the United States.
Applications Sought for Renewed Effort to Assist Farmers
American Farmland Trust will accept applications starting November 1 to help farmers nationwide improve farm viability, access, transfer or permanently protect farmland or adopt regenerative agricultural practices. The last day to submit applications is November 14. AFT’s Brighter Future Fund provides grants of up to $5,000 per project. A project may involve one or more individual farmers or farm families, and projects will be awarded on a one-per-farm basis. In 2022, the fund will uplift, support, and amplify historically underserved farmers. AFT Vice President of Programs David Haight says, “The Brighter Future Fund makes small investments that have big impacts with participating farmers – particularly those who face barriers in accessing other types of support.” The Brighter Future Fund was launched in 2020 to help farmers launch, grow, and sustain farms in the face of forces impacting the food and agricultural system. Farmers should submit a completed electronic Brighter Future Fund Application to AFT at farmland.org to apply.
Wednesday Watch List
Markets
A report on U.S. new home sales in September is due out at 9 a.m. CDT Wednesday, followed by the Energy Department's weekly inventory report at 9:30 a.m., including ethanol production. The Bank of Canada is expected to increase its interest rate by 0.75% to 4.0% Wednesday, followed by a rate hike in Europe on Thursday. Traders will continue to watch the latest weather forecasts and news from abroad, especially Ukraine.
Weather
As a storm system finally pushes east on Wednesday, quieter weather conditions are expected for most areas east of the Rockies. To the west, a system continues to move through the Rockies, setting up another storm for the late-week period across southern areas.
Tuesday, October 25, 2022
NCGA Calls on USTR to Act on Mexico’s Pending Decree on Corn Imports
Calls from corn grower leaders are growing louder for the United States Trade Representative to intervene in a trade dispute with Mexico over corn imports. The response from corn growers comes as Mexican President Andrés Manuel López Obrador’s promises to enact a decree that would end imports of corn grown using biotech and certain herbicides by 2024. Biotech corn makes up over 90 percent of U.S. corn crops. An opinion piece by National Corn Growers Association President Tom Haag was published over the weekend in The Hill, a newspaper widely read by Congress and other Washington decision-makers. The editorial calls on USTR to file a settlement dispute under the U.S.-Mexico-Canada Agreement over the matter. Haag says, "If the decree is enacted, the negative impact will be felt by farmers in the U.S. and by the people of Mexico." NCGA has been at the forefront of this issue, and says a U.S.-Mexico-Canada Agreement dispute settlement would allow for extensive debate and mediation.
USTR, USDA to Assist Seasonal Produce Industry
The Office of the United States Trade Representative will pursue avenues to assist the Southeast seasonal produce industry in coordination with the United States Department of Agriculture. The announcement comes after members of Congress requested an examination of certain issues in a September 8, 2022, Section 301 petition. The 301 statute requires that USTR make a decision on whether to move forward with an investigation within 45 days. The statute also includes a private-sector advisory panel as a specific response to export targeting. Although USTR could not conclude in the 45-day statutory period that a formal 301 investigation would be effective and is not opening an investigation at this time, USTR is moving forward with an advisory panel. USTR and USDA will work with the petitioners and producers to examine the issues raised in the petition and to consider any further actions that may be appropriate as a result.
Bill Seeks Excise Tax on Foreign Water-Intensive Crops in the U.S.
Legislation introduced last week seeks an excise tax on the sale and export of water-intensive crops grown in the U.S. by foreign governments. Arizona Representative Ruben Gallego introduced the Water Protection Act of 2022, as Arizona and other states face prolonged drought. Gallego says, "While Arizona experiences the driest conditions in centuries, our water is being given away in a sweetheart deal with Saudi Arabia." The Democrat adds, "Arizona's aquifers are meant to serve Arizonans, and this bill will make that happen." The excise tax would be imposed at 300 percent, reflecting the unjustifiable disparity in land lease rates between domestic and foreign producers in Arizona. Arizona is leasing farmland to Fondomonte, a Saudi company which uses Arizona groundwater to grow alfalfa exported to feed cows in the Middle East. The state reports that the company uses enough water annually to supply 54,000 homes, at an estimated cost to the state of more than $3 million a year.
EWG: Climate Change Increases Crop Insurance Costs
A new Environmental Working Group analysis found the majority of Midwestern counties with increased precipitation between 2001 and 2020 also had growing crop insurance costs. The report alleges the increased crop insurance costs were due to wetter weather linked to climate change. Between 2001 and 2020, farmers in the eight Midwest states received almost $14.5 billion in crop insurance indemnity payments for reduced crop yields or revenue due to excess moisture and precipitation. In all, 661 counties got a crop insurance indemnity payment for excess moisture at some point during that period, adding up to $12.9 billion. EWG claims the Crop Insurance Program undermines the adoption of conservation practices like cover crops that can help farmers adapt to the effects of climate change, such as extreme precipitation events that are expected to continue occurring more frequently. The organization is using the study in a call to make several reforms to the structure of crop insurance.
2012 Nutrition Standards Change Increased Fruits and Vegetables in School Meals
A 2012 change in school meal nutrition standards drove changes in the type of foods schools purchased. USDA's Economic Research Service released data Monday that shows following the change in standards, schools obtained more fruits and vegetables through USDA Foods and especially through USDA’s Department of Defense Fresh Fruit and Vegetable Program. While there was no clear change in the types of foods chosen from 2006 to 2012, the percent of USDA Foods entitlement funds used for purchasing fruits and vegetables from DoD Fresh rose sharply from 6.7 percent of total USDA Foods in 2012 to 15 percent in 2017. Fruit obtained through AMS—mainly canned and frozen—rose from 9.4 percent of total USDA Foods spending in 2012 to 15.4 percent in 2017. Vegetables obtained from USDA's AMS slightly rose from 2012 to 2017. As the spending on fruits and vegetables increased, the percentage spent on meat, poultry, and cheese dropped from nearly 74 percent in 2012 to 61 percent in 2017.
Gas Prices Down Again, Diesel Higher
The nation's average gas price declined for the second straight week, falling 9.3 cents from a week ago to $3.77 per gallon. The national average is up 10.2 cents from a month ago and 41.2 cents per gallon higher than a year ago. The national average diesel price increased 4.0 cents in the last week and stands at $5.30 per gallon. GasBuddy's Patrick De Haan says, “While gasoline prices have seen a large drop, diesel prices have been somewhat mixed, with prices heading higher in the Northeast as inventories drop to extremely tight levels ahead of the heating oil season.” Rising risk of economic downturn, weak Chinese imports and a stronger U.S. dollar were factors pushing oil prices lower in the last week. That comes as OPEC+’s recently decided to cut oil production. De Haan adds that the decline in gasoline prices is seasonal and should continue into the fall, and is unrelated to the coming election.
Tuesday Watch List
Markets
An index of U.S. consumer confidence for October is due out at 9 a.m. CDT Tuesday, the only report of the day. Traders will continue to watch the latest weather forecasts and any reports from the Mississippi River. Outside market news will also get market attention with the Federal Reserve expected to raise interest rates again next week.
Weather
A cold front saw a low-pressure center form along it across Texas Monday and that low and front will continue northeast through the country Tuesday. Areas of rain and thunderstorms are exiting the Plains but will continue for the Delta, Southeast, and Midwest. Rain will disrupt the remaining harvest and there is a risk of severe storms across the Gulf Coast states. Cooler, drier air is filling in behind the front while another system is moving into the Pacific Northwest.
Monday, October 24, 2022
Farm Financing Demand Edges Higher
Strong agricultural prices continue to support the farm economy, but the rapid rise in production expenses could pressure profit margins. That’s pushing the demand for farm financing higher. Larger-sized operating loans are continuing to boost farm lending activity. The Kansas City Fed says the volume of non-real estate farm loans increased by more than 10 percent for the third-consecutive quarter. Operating loans accounted for nearly all the growth, driven by an almost 25 percent increase in the average loan size. Besides a continued growth in lending, interest rates rose sharply and pushed financing expenses to their highest level since 2019. Prices of most major commodities remained elevated alongside favorable market conditions and supported a positive outlook for farm finances through the end of this year. Uncertain demand for farm products in the coming year has led to more volatility, while drought continues to impact large parts of U.S. farm country.
NOAA Winter Weather Outlook Shows More Drought Ahead
The National Oceanic and Atmospheric Administration released its U.S. Winter Outlook. Beginning in December and running through February 2023, NOAA predicts drier-than-average conditions in the South with wetter-than-average conditions in the Ohio Valley, Great Lakes, northern Rockies, and the Pacific Northwest. The agency says widespread extreme drought continues in much of the West, the Great Basin, and the central-to-southern Great Plains. Drought will impact the middle and lower Mississippi Valley this winter. Drought will also develop in the South-Central and Southeastern U.S., while drought conditions should improve across the Northwest U.S. in the months ahead. This year, La Niña returns for a third-consecutive winter, which will drive warmer-than-normal temps in the Southwest, along the Gulf Coast, and through the Eastern Seaboard. NOAA says drought conditions are now present in 59 percent of the country, and parts of the Western U.S. and southern Great Plains will get hit hardest this winter.
U.S. Grain Exports Hit Near-Record Total in 2021-2022
U.S. grains in all forms (GIAF) exports for the 2021-2022 marketing year topped 122 million metric tons, the second-highest total on record. That total trails the 129 million metric tons in 2020-2021. The U.S. Grains Council analyzed USDA data to find near-record exports of ethanol helped offset losses from corn, barley, and barley products. Mexico is the top GIAF destination. Record exports of ethanol, corn, DDGS, and pork and pork products, combined with fewer imports from China, made Mexico the biggest U.S. market in 2021-2022. Mexico imported over 27 million metric tons worth $11 billion. China was the second-largest export market for U.S. GIAF, with exports totaling 26 million metric tons worth more than $11 billion. Canada was in third place, taking in U.S. GIAF totaling more than 13 million metric tons worth $6 billion. In the current 2022-2023 marketing year, the U.S. Grains Council continues promoting U.S. grains around the world.
Company Developing AI to Accelerate Global Soil Restoration
Biome Makers, a global ag tech leader in soil health analysis, received a $1.6 million grant from the European Union. The grant will help answer the need for strong solutions around soil biology in agriculture. The EU recognizes the importance of BeCrop®, the company’s soil intelligence technology, and the environmental and socioeconomic impact it has on farmers. The grant will help fast-track the development of BeCrop® AI and machine learning. That will help accelerate Biome Makers’ global mission of recovering soil health. The AI currently has the world’s largest database of taxonomic references and has analyzed more than 415,000 hectares of soil. BeCrop® technology decodes soil biology to help farmers improve food production while improving the sustainability of their farmland. The industry will no longer have to develop agricultural products or apply inputs without verifying their impact. BeCrop® is the first step to making that happen. Companies like Syngenta already utilize the AI.
New Zealand is the Latest Country to Tax Cow Burps
New Zealand farmers recently gathered in towns and cities across the country to protest against the government’s plan to tax “agricultural emissions.” Reuters says the government confirmed plans to price agricultural gases and biogenic methane, which it says come from cow and sheep burps. Farmers drove tractors and carried signs protesting the proposed plan. Farm groups wonder how the proposal accounts for on-farm forestry and what can offset such emissions. They also worry about how the emissions will be priced and how the program will be governed. One of the protestors told state-owned Radio New Zealand that they aren’t necessarily wanting exemptions. The farmers want to work out how it's going to be best for them and the country. New Zealand’s prime minister told reporters they wanted feedback from the agricultural community, and the plan is in a consultation phase. The government wants to work with producers to find a solution.
Export Sales of Corn and Beans Surge Higher
Sales of corn and soybeans to overseas buyers jumped week-to-week, while wheat sales declined during the week ending on October 13. USDA data says corn sales hit 408,300 metric tons, more than double the 200,000 tons sold a week earlier. Mexico was the big buyer at 183,700 metric tons, followed by Japan’s 77,600 tons. Soybean sales surged to 2.34 million metric tons, a significant jump over the 724,000 metric tons sold a week earlier. China swooped in to buy 1.98 million metric tons, far and away the top soybean buyer, with the Netherlands in second with 82,800 tons. The soybean total could have been higher, but the United Kingdom canceled a sale that week of 60,000 tons. Wheat sales dropped to 163,100 metric tons, down from almost 212,000 the previous week. Mexico was the top wheat buyer at 93,500 metric tons. USDA says Italy canceled wheat sales of 60,000 tons.
Monday Watch List
Markets
Back from the weekend, traders will pore over the latest weather forecasts, keep up on the interest rate debate and check the latest news from the Mississippi River and Ukraine. USDA's weekly export inspections report at 10 a.m. CDT gets extra attention these days as a new gauge of river problems. USDA's monthly Cold Storage report is set for 2 p.m., followed by harvest progress and winter wheat planting updates in the Crop Progress report at 3 p.m.
Weather
A strong fall storm system is wound up in eastern North Dakota early Monday morning and heading northeast toward Hudson Bay. Scattered showers across the Northern Plains are a mix of rain and accumulating snows. The cold front to the system extends south through the Plains. Across the south, the system is ingesting the remnants of hurricane Roslyn, which is helping increase precipitation across Texas and Oklahoma. The heavier rain will spread northeast into the central Midwest throughout the day while a low pressure center will develop on the front across Texas later in the day, a feature that will move northeast through the Midwest later this week. Strong winds that have been felt across the middle of the country over the weekend are winding down throughout the day. Temperatures behind the front are dropping significantly from the heat seen over the weekend.
Friday, October 21, 2022
Enrollment is Open for ARC, PLC Programs
Ag producers can now change their 2023 crop year elections and enroll in the Agricultural Risk Coverage and Price Loss Coverage Programs for 2023. Signup for the two key safety net programs began Monday, and the enrollment deadline is March 15, 2023. Producers can choose coverage and enroll in ARC-County or PLC, which provides crop-by-crop protection, or ARC-Individual, which protects the entire farm. Although election changes for 2023 are optional, producers must enroll through a signed contract each year. Also, if a producer has a multi-year contract on the farm and makes an election change for 2023, they must sign a new contract. If producers don’t submit their election by the March 15 deadline, their elections remain the same as their 2022 election for crops on the farm. “It’s that time of year for producers to consider all their risk management options,” says Farm Service Agency Administrator Zach Ducheneaux.
October Fed Beige Book Updates Ag Economy Conditions
The Federal Reserve Board released its October 2022 Beige Book, which provides as update on current conditions in the agricultural economy. Ag conditions in the sixth district near Atlanta were mixed as cotton growers noted softening demand, while row crop production remained sold. In Chicago’s seventh district, income expectations for producers were unchanged as most operations should be profitable despite rising input costs. Production forecasts in the eighth district of St. Louis declined for corn, rice, and soybeans. In Minneapolis’s eighth district, financial conditions remained strong even as higher input costs bite into profit margins. The tenth district of Kansas City shows strong financial conditions despite adverse developments tied to drought and input costs. The eleventh district of Dallas showed significant rainfall greatly improved drought conditions across much of the district, though it began to dry out again after the rainfall. Many eleventh-district areas had little-to-no crop production because of the drought.
Inflation Boosting Prices of Organic Products
Ongoing inflation resulted in higher retail prices of organic fresh produce during the third quarter of this year. The Organic Produce Network says that generated a 4.1 percent increase in total organic dollars but also contributed to a decline of 4.5 percent in organic volume compared to the same period last year. Overall, organic fresh produce pricing per pound increased by 8.9 percent during the third quarter compared to the same time in 2021. Sales during the third quarter topped $2.4 billion this year. At the same time, conventional produce’s average price per pound increased by more than 10 percent, with total sales of almost $18 billion. Tomatoes were the bright spot for organic sales in the third quarter, thanks to a 19 percent increase in volume and a hefty 30 percent increase in dollars. Fourteen of the top categories posted year-over-year increases in dollars, led by potatoes, onions, and peaches.
EDF Report says Crop Yields will Slow by 2030
The Environmental Defense Fund says extreme heat, changing rainfall, and other climate change impacts will make it harder to grow U.S. staple crops as soon as 2030. The group says future food supplies and farmer livelihoods will be at stake without adaptation efforts getting underway immediately. The EDF report uses an ensemble of 20 computer models to analyze how climate change will alter the yields of staple crops in Iowa, Minnesota, and Kansas by 2030 and 2050. By 2030, nearly all counties in Iowa will see corn yields more than five percent lower than they would have been without climate change. More than half will see declines of 10 percent or more. Over half of Minnesota’s counties will see soybean yields drop by over five percent. Seventeen percent will see drops of more than 10 percent. Eight percent of Kansas counties will see winter wheat yields drop by over five percent by 2030.
Winners Announced in National Wheat Yield Contest
The National Wheat Yield Contest announced the 2022 winners. Rylee Reynolds of Twin Falls County, Idaho, set a contest yield record of 231.37 bushels an acre. That tops the previous record of 211 bushels per acre set in 2019. Rylee and his dad Gary both placed as national winners in the winter wheat irrigated category. In other results, the Pacific Northwest had some excellent yields this year as all four Bin Buster Award winners are from that region of the country. The contest encourages wheat growers to strive for high yield, quality, and profit while trying out new and innovative strategies for managing their wheat crop. The National Wheat Foundation, which puts on the contest, says there was exceptional participation from all over the nation’s top wheat-growing states. State winners are announced in 27 states, and six of those winners had never won at the national level before this year.
Educational Opportunities Ahead at the Cattle Industry Convention
The 30th annual Cattlemen’s College will precede the 2023 Cattle Industry Convention and Trade Show on February 1-3 in New Orleans, Louisiana. The educational opportunity draws more than 1,000 attendees every year and includes two days of learning, idea sharing, and networking. The college begins on Tuesday, January 31, with some of the biggest topics in the industry, including the latest in grazing and live cattle handling demonstrations. There are 18 sessions and six educational tracks to choose from on Wednesday, including reproduction technology, herd health, practical nutrition management, better beef business, sustainable grazing, and the latest in genetics. The event concludes with a keynote presentation from Ray Starling of Aimpoint Research. There’s a lot of information at the event, and it’s likely not possible to attend everything in person. To make it easier to access the content, all sessions will be recorded and available for registered attendees. Go to convention.ncba.org for information.
Friday Watch List
Markets
Traders continue to keep an eye on the latest weather forecasts, developments along the Mississippi River and outside market news, especially concerning Ukraine. USDA's Cattle on Feed report for Oct. 1 is due out at 2 p.m. CDT Friday and is expected to show 11.45 million head on feed, down nearly 1% from a year ago.
Weather
A pattern change is underway with a storm system set to drop down into the western states later today and through the weekend, bringing scattered showers to the Pacific Northwest. East of the Rockies it is quickly getting warmer than where we were just a couple of days ago. It is also very dry and increasing winds will lead to higher risks of fires in areas of drought, which are widespread in the country.
Thursday, October 20, 2022
USDA, USAID Announce Global Food Security Research Strategy
Agriculture Secretary Tom Vilsack and USAID Administrator Samantha Power Wednesday released the U.S. government's Global Food Security Research Strategy. The strategy underscores the U.S. government's commitment to ending hunger and malnutrition and building medium to long-term sustainable, resilient food systems, according to USDA. The new research strategy emphasizes priority objectives and the use of data to help strengthen the impact of U.S. food security assistance and, with America's leadership, generate sustainable solutions for addressing the root causes of hunger and malnutrition, which are both inextricably linked to entrenched, extreme poverty. The research strategy will underpin the United States Government Global Food Security Strategy. Secretary Vilsack says, "Investment in, and support for, agricultural research and development is imperative so that the world's farmers have access to innovations that enhance productivity and efficiency." The strategy focuses on climate-smart agricultural innovations, improved nutrition through high-quality, affordable diets, and genetic improvement of resilient crops and livestock.
Lawmakers Urge FTC to Investigate Kroger-Albertsons Merger
Senate Democrats urge the Federal Trade Commission to investigate the proposed merger between Kroger and Albertsons. The two are concerned about the transaction's potential implications for consumers. The group of lawmakers includes Minnesota's Amy Klobuchar, Connecticut's Richard Blumenthal and New Jersey's Cory Booker. In a letter to the FTC, the lawmakers say, "The grocery industry is essential to daily life, and Americans need the benefits that robust competition brings, namely lower prices, higher quality, and innovation." The lawmakers say the merger comes as food prices are elevated, and "too many American families are struggling to put food on the table." When Albertson’s merged with Safeway in 2015, the FTC found that the merger was likely to harm competition in 130 separate markets and required the company to sell more than 150 stores. Additionally, Klobuchar announced the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, will hold a hearing in November to examine the proposed transaction.
Grassley, Ernst Urge EPA to Set Robust RFS Blending Volumes
Iowa Senators Chuck Grassley and Joni Ernst Wednesday urged the Environmental Protection Agency to establish expanded renewable volume obligations in the upcoming "set" rule under the Renewable Fuel Standard. The Iowa Republicans Join South Dakota Republican John Thune and Illinois Democrat Dick Durbin to encourage the agency to increase blending obligations for all renewable fuel types. In a letter to the EPA, the lawmakers say, "Through this rulemaking, EPA has a historic opportunity to not only reinforce its efforts to restore integrity to the RFS, but chart a new course for biofuels that will help meet America's diverse energy demands." Additionally, the lawmakers urge EPA to take other actions to maximize uses for biofuels, including updating lifecycle analysis for biofuel emissions and approving additional fuel registrations under the RFS. Other Senators from Kansas, Minnesota, Nebraska, Ohio and Wisconsin also signed the letter to the EPA.
Florida Ag Losses Estimated at $1.5 Billion
The University of Florida Institute of Food and Agriculture Sciences this week released a preliminary assessment of the agricultural production losses associated with Hurricane Ian. The report, which considered crops, livestock, and animal products, estimates a potential loss of up to $1.56 billion for Florida producers. The Economic Impact Analysis Program conducts assessments after any event that disrupts Florida's agriculture industry, with assessments for Hurricane Ian initiated on September 29, 2022, through a survey to producers. Florida Agriculture Commissioner Nikki Fried says, "The impact on Florida's affected commodities cannot be understated, especially the heartbreaking damage to Florida citrus, an industry already facing significant challenges." The preliminary assessment may not account for damage in inaccessible areas or flood areas that cannot be evaluated until fields have dried out. The Florida Department of Agriculture and Consumers Services is expected to release its own findings later this week.
Third-Party Use High for Employer H-2A Applications
U.S. farmers who want to hire temporary foreign workers through the H-2A visa program usually work with a third party, according to USDA's Economic Research Service. The new data announced this week indicated third parties, such as agents, associations or a lawyer, to make the applications. Employers themselves filed applications for only 15 percent of all jobs requested. Across the U.S., agents filed applications for 45 percent of all H-2A jobs, an association of farm enterprises filed for 21 percent of jobs, and 19 percent came from a lawyer representing the farmer. However, the usage rates for third parties differ across states. For instance, lawyers tend to file for most of the jobs in California, while agents and associations account for almost two-thirds of the job filings in Florida. The H-2A program allows farm operators who foresee a shortage of domestic workers to bring nonimmigrant foreign workers to the U.S. temporarily to perform agricultural labor or services.
Student Leaders Prepare for the 95th National FFA Convention
FFA members and supporters from across the country will celebrate agriculture and agricultural education next week during the 95h National FFA Convention & Expo in Indianapolis. More than 60,000 FFA members from the U.S., Puerto Rico and U.S. Virgin Islands are expected to participate in the event. Those attending will participate in general convention sessions hosted at Lucas Oil Stadium, be inspired by their peers as they are recognized for their accomplishments, and hear from keynote speakers. Convention attendees will also explore various career paths at the National FFA Expo, located in the Indiana Convention Center, participate in career success tours, and more. There are several entertainment opportunities, including a Wednesday night concert featuring Lauren Alaina and Jimmie Allen and a Thursday night concert with Mickey Guyton and Russell Dickerson, and rodeos on Wednesday, Thursday and Friday nights. General convention sessions will be aired live on RFD-TV and The Cowboy Channel. FFA members and supporters can tune in and watch gavel-to-gavel coverage of the event.
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 and an update of the U.S. Drought Monitor. A report on U.S. existing home sales in September and the Conference Board's index of U.S. leading indicators are due out at 9 a.m., followed by the Energy Department's weekly natural gas storage report at 9:30 a.m. Traders will keep an eye on weather and outside market news.
Weather
Ahead of a change in the upper-level pattern, temperatures are rising east of the Rockies from the cold conditions we have seen the last few days there. It will continue to be fairly dry outside of Michigan where some lake-effect showers will shut off later Thursday. The dryness will promote harvest and fieldwork, but increasing winds could be concerning for fires, especially in the Plains.
Wednesday, October 19, 2022
Inflation Reduction Act Payments to Distressed Farmers Reaches $800 Million
Agriculture Secretary Tom Vilsack Tuesday announced distressed farmers with qualifying USDA farm loans have already received nearly $800 million in assistance from the Inflation Reduction Act. The $3.1 billion in assistance for distressed farm loan borrowers stems from section 220006 of the Inflation Reduction Act. The legislation directed USDA to expedite assistance to distressed borrowers of direct or guaranteed loans administered by USDA's Farm Service Agency, whose operations face financial risk. Secretary Vilsack says the funding "helps keep our farmers farming and provides a fresh start for producers in challenging positions." The announcement kicks off a process to assist distressed farm loan borrowers using several complementary approaches, with the goal of keeping them farming, removing obstacles, and improving how USDA approaches borrowing and servicing. Work has already started to bring some relief to distressed farmers. As of today, more than 13,000 borrowers have already benefited from the resources provided under the Inflation Reduction Act, according to USDA.
Avian Flu Poultry Deaths Near U.S. Record
Avian influenza losses are nearing a record in the United States this year, as the virus has infected more wild birds that transmit the disease. A new report from Reuters shows more than 47 million birds have died from infections and culling. The outbreak sparked export bans and lowered egg and turkey production, leading to tight supplies and higher prices as the Thanksgiving Day shopping period nears. The 47 million deaths are near the deadliest U.S. outbreak in 2015, where 50.5 million birds died or were culled. Rosemary Sifford, chief veterinary officer for the Department of Agriculture, says, "Unfortunately, what we've done probably hasn't been enough to protect us from this high load of virus in the wild bird population." Officials are finding the virus in a wide range of wild birds, and it seems to live longer in the birds. Since February, USDA reports the outbreak has infected flocks in 42 states.
Online Grocery Baskets Shrinking
Online grocery buyers are spending more but buying less, according to a new report this week. The Grocery Doppio Performance Report shows digital sales improved in the third quarter of 2022, albeit lower than 2021 levels. The report shows 13.7 percent of all grocery sales in 2022 are digital, worth $87 billion. There was a 14.4 percent increase in digital sales in the third quarter of 2022 compared to the second quarter of the year. However, inflation is impacting what buyers are purchasing. The report shows shoppers' basket size declined by 5-6 items in the third quarter. Shoppers are faced with a 21 percent increase in price per item in 2022, and 73 percent of shoppers have moved to lower-priced brands in response to the increased prices. Meanwhile, grocery retailers face $2 billion in lost sales due to canceled online orders this year, and a $7.5 billion loss for items not in stock.
Online SNAP, P-EBT Totaled $9.7 Billion During Pandemic
Online nutrition assistance recipients redeemed $9.4 billion in benefits during the first two years of the COVID-19 pandemic. USDA’s Economic Research reported Tuesday the redemptions came from the Supplemental Nutrition Assistance Program, or SNAP, along with the Pandemic Electronic Benefit Transfer benefits, or P-EBT. The programs allowed users to buy groceries online from authorized retailers. The pilot launched with several retailers in 2019 and early 2020 before the onset of the COVID-19 pandemic. The pilot opened to additional states and retailers in response to the pandemic. The number of participating retailers expanded significantly in the first two years of the pandemic. By December 2020, USDA authorized 13 retailers, growing to 116 in December 2021 and to 148 in March 2022. In 2020, SNAP and P-EBT recipients redeemed $1.5 billion in benefits online. In 2021, this amount more than quadrupled to $6.2 billion. Online redemptions in the first quarter of 2022 totaled $1.9 billion.
Florida Lawmakers Seek USDA Disaster Declaration
A group of bipartisan lawmakers from Florida wants the Department of Agriculture to declare a disaster area for Florida counties impacted by Hurricane Ian. The lawmakers made the request last week in a letter to Agriculture Secretary Tom Vilsack. The letter also asked Vilsack to make assistance available to growers whose crops were damaged or destroyed. The letter states, "to ensure that they can recover from losses and continue their important service of feeding America, the expeditious approval of a disaster declaration is warranted and necessary in order to have a successful winter and spring harvest season." The lawmakers say Florida's growers have a unique role in the American food economy, as one of the only locations in the United States where major agricultural production can occur in the winter and spring months. Also last week, USDA's Economic Research Service reported Florida accounted for 1.7 percent of U.S. farm sector cash receipts in 2021.
Purdue, USDA, Release Online Freeze-date Tool
A new interactive online tool for visualizing and exploring freeze-date trends and other climate patterns is available, thanks to Purdue University and the Department of Agriculture. Purdue’s Midwestern Regional Climate Center partnered with USDA’s Midwest climate hub to create the digital tool, which covers 25 states in the upper Midwest, the Northeast and Appalachia. The tool may interest producers of tree fruits, grapes and row crops such as corn and soybeans to help them take advantage of longer growing seasons. Agricultural advisors, weather forecasters, university Extension staffers and state climatologists also have expressed interest in the tool. While many think of a freeze at 32 degrees, farmers are interested in values that are colder or warmer. Corn and soybeans, for example, can survive 28 degrees, while fruit trees are more sensitive to freezing or near-freezing temperatures. And the freeze-date tool allows users to query their desired temperatures. You can find the Freeze Date tool on the Purdue website.
Wednesday Watch List
Markets
A report on U.S. housing starts for September is due out at 7:30 a.m. CDT Wednesday, followed by the Energy Department's weekly inventory report at 9:30 a.m. CDT, including ethanol production. Traders will continue to watch the latest weather forecasts and any news that develops, especially regarding Russia's grain deal with Ukraine. The Federal Reserve's Beige Book will be out at 1 p.m., offering its latest assessment of the U.S. economy.
Weather
Widespread near-record cold conditions east of the Rockies have led to sub-freezing temperatures close to the Gulf of Mexico Wednesday morning. In the cold air, lake-effect rain and snow showers continue over eastern areas of the Lakes, annoying those with fieldwork to do. Otherwise, the drier conditions elsewhere are favorable. While still cold on Thursday, temperatures will be gradually rising for the rest of the week and weekend, starting in the Plains this afternoon.
Tuesday, October 18, 2022
USDA Opens 2023 Dairy Margin Coverage Program Enrollment
Dairy producers can now enroll for 2023 coverage through the Dairy Margin Coverage Program. The program helps dairy farmers manage changes in milk and feed prices. Enrollment for the program began Monday and runs through December 7. Last year, USDA’s Farm Service Agency took steps to improve coverage, especially for small- and mid-sized dairies, including offering a new Supplemental DMC program and updating its feed cost formula to better address retroactive, current and future feed costs. DMC is a voluntary risk management program that protects dairy producers when the difference between the all-milk price and the average feed price—the margin—falls below a certain dollar amount selected by the producer. National Milk Producers Federation President and CEO Jim Mulhern encouraged dairy producers to consider the maximum coverage under the program. Mulhern says, "The current combination of high prices with costs that can be even higher illustrates the basic value of DMC for producers who can benefit from the program."
Federal Milk Marketing Order Forum Successfully Brings Sector Together
The American Farm Bureau Federation is celebrating a successful Federal Milk Marketing Order Forum held over the weekend in Kansas City, Missouri. The National Milk Producers Federation, dairy cooperatives, processors, state dairy associations and dairy farmers joined AFBF for the event. The three-day event provided a platform for farmers’ voices to be heard while also answering the call from Agriculture Secretary Tom Vilsack to bring the dairy producer community together to discuss FMMO modernization. Discussions at the forum focused on Class price formulas and de-pooling, among other topics. The American Farm Bureau Federation and the National Milk Producers Federation agreed on a joint statement regarding the need for FMMO improvements. A number of dairy organizations attending the event also supported the joint AFBF-NMPF statement. The AFBF-NMPF statement reads: “With the last major update to the FMMO system occurring in 2000, we believe it is time to consider improvements that better reflect today’s milk markets.”
16,000 Farmers, Ag Organizations, Submit Comments on EPA Atrazine Proposal
More than 16,000 farmers and agricultural organizations recently united against EPA's proposed revision to its 2020 atrazine registration review decision. The farmers and agricultural organizations representing corn, citrus, grain sorghum, sugar cane, and other crops, submitted comments calling for the agency to base decisions on credible scientific evidence. Efforts to help farmers speak out against the proposal were coordinated by the Triazine Network, a diverse coalition of state and national agricultural groups that rely on atrazine and other triazine herbicides to control weeds. The atrazine comment period ended on October 7. In their comments, growers expressed frustration with the EPA's lack of transparency and its repeated efforts to implement measures that would end effective use of atrazine for weed control. In addition to the ultra-low 3.4 ppb level, EPA doubled and tripled down by creating an over-predictive model that predicted 72 percent of U.S. corn acres would be in violation.
Growth Energy: Access to E15 Would Save Drivers more than $20 Billion
A new study from Growth Energy found nationwide access to E15 could save drivers billions in annual fuel costs, create new jobs, and return billions to the U.S. economy. The study, conducted by ABF Economics, follows months of record-high gas prices across the country and President Joe Biden's emergency waiver to allow the sale of E15 for the 2022 summer driving season. The study says a nationwide transition to E15 would also put an additional $36.3 billion in income into the pockets of American households, support an additional 188,000 jobs, and generate $66.3 billion for the U.S. Gross Domestic Product. Growth Energy CEO Emily Skor responds, “Today's study shows that expanded, year-round access of this higher biofuel blend can provide a much-needed boost to the farm economy and even greater savings to American families." E15 is currently sold at over 2,700 stations across 31 states, and drivers have chosen the biofuel blend to fuel 35 billion miles total.
U.S. Durum Production Increasing, Food Use Remains Stable
U.S. durum wheat production is expected to increase in the 2022/23 marketing year after last year’s drought reduced production to its lowest in 60 years. USDA’s Economic Research Service reported Monday production in 2022/23 is forecast at 64 million bushels, up 70 percent from the previous marketing year, but below the average of the previous five years. Durum wheat is the primary class of wheat used to produce pasta. Food use of durum was elevated in marketing years 2019/20 and 2020/21, fueled by surging consumer demand during the COVID-19 pandemic, when shoppers stocked up on pasta while in quarantine. While the surge in demand has since subsided, consumer prices for wheat-based products, including pasta, are up substantially in 2022. This year's larger durum crop, along with larger Canadian production, has eased some supply pressure. However, high commodity prices in general and elevated input, labor, and energy costs have each contributed to higher prices for the manufactured products of wheat, including pasta.
Weekly Gas Prices Reverse, Diesel Higher
The nation's average gas price declined for the first time in four weeks, falling 5.4 cents from a week ago to $3.86 per gallon. The national average is up 20.6 cents from a month ago and 56.6 cents per gallon higher than a year ago. The national average diesel price increased 18.7 cents in the last week and stands at $5.26 per gallon. GasBuddy's Patrick De Haan says, “We’ve seen an abrupt, yet expected decline as refinery issues have eased in the West and Great Lakes, overpowering some increases elsewhere.” In addition, oil prices have cooled off slightly after OPEC+’s decision to cut production, and that should slow increases elsewhere. Diesel and heating oil prices will likely continue to rise as extremely low inventories of middle of the barrel products like these two push prices higher. According to data from the Energy Information Administration, oil supplies last week surged nearly 10 million barrels.
Tuesday Watch List
Markets
The Federal Reserve's report of U.S. industrial production in September is the only significant report for Tuesday, due out at 8:15 a.m. CDT. Traders will keep close attention on the latest weather forecasts, news from Ukraine and at 1 p.m., some will take a look at USDA's monthly Livestock, Dairy and Poultry outlook.
Weather
Cold air that has drifted southward is resulting in widespread frosts and freezes Tuesday morning for much of the country east of the Rockies. This is record cold for some areas. The cold air is pretty dry outside of the Great Lakes where lake-effect showers continue as a mix of rain and snow, which will be an annoyance for those still looking to complete some fieldwork and harvest.
Monday, October 17, 2022
USDA Releases Proposed Regulatory Framework on Reducing Salmonella
The USDA’s Food Safety and Inspection Service released a proposed regulatory framework for a new strategy to control Salmonella contamination and reduce illnesses from poultry products. The agency will host a virtual public meeting on November 3 to get input from stakeholders on the framework. The proposed framework has three components: requiring that incoming flocks be tested for Salmonella before entering an establishment; enhancing establishment process control monitoring and FSIS verification; last is implementing an enforceable final product standard. “We know that Salmonella in poultry is a complex problem with no single solution,” says USDA Deputy Undersecretary Sandra Eskin. “We have identified a series of strategic actions FSIS could take that are likely to drive down Salmonella infections linked to poultry product consumption, and we are pressing those in this proposed framework.” For more information on the virtual meeting, go to the Meetings and Events page on the FSIS website.
NCC Says New FSIS Salmonella Framework Lacks Data, Research
The USDA announced its new regulatory framework in an effort it says would help reduce Salmonella illnesses associated with poultry products. “We support the need to develop science-based approaches that will impact public health, but this is being done backward,” says Dr. Ashley Peterson, National Chicken Council senior vice president of scientific and regulatory affairs. “The agency is formulating regulatory policies and drawing conclusions before gathering data, much less analyzing it, which is called speculation.” The NCC says the facts show that the Centers for Disease Control and FSIS’s own data demonstrate progress and clear reductions in Salmonella in U.S. chicken products. “Increased consumer education about proper handling and cooking of raw meat must be part of any framework going forward,” Peterson says. “Proper handling and cooking of poultry is the last step, not the first, that will help eliminate any risk of foodborne illness. We’ll do our part to promote safety.”
Land O’ Lakes Launches “Farmers are Incredible” Campaign
Land O’ Lakes is celebrating National Farmers Day by raising consumer awareness of the critical role that farmers play in society by launching the “State of the American Farmer” survey. The survey revealed some of the misconceptions that Americans have about the state of farming. On average, Americans believe that less than half of all farms are family-owned and operated and that just 43 percent of what they buy comes from family farms. Despite some misconceptions, most Americans are interested in the source of their food. Nearly all of the survey respondents say it’s at least somewhat important that their groceries be sourced sustainably. To show support for farmers, Land O’ Lakes launched “Farmers are Incredible,” a multiplatform creative campaign rooted in celebrating National Farmers Day. The goal is to emphasize the year-round importance of farmers and the agriculture industry. The campaign features the co-op’s farmer members and their work.
Corn Belt Farmland Price Sets New Record
A recent farmland sale in Iowa set a new record for the Corn Belt. In Plymouth County, Iowa, farmland was sold for $26,250 per acre. Ag Web Dot Com says Brock Auction Company brokered the sale, which included 55 acres of high-quality farmland. That put the total bill at $1.44 million. The bidding began at $17,000 per acre, and three bidders each topped $25,000 per acre, with a local farmer getting the winning bid. This sale now holds a record high for farmland prices. It’s bigger than the last number one sale price from August, when a farm in Sioux County, Iowa, sold for $26,000 per acre. A Plymouth County, Iowa farm recently sold for $25,000 per acre. Numbers in Iowa appear to be up across the board. The Iowa Chapter of the Realtors Land Institute says the value of high-quality cropland is $14,472 per acre, up almost 17 percent from September 2021.
Farm Bureau Announces Farm Bill Priorities
The American Farm Bureau released its top priorities for the 2023 Farm Bill, easily the most consequential legislation for agriculture next year. The overarching priorities include continuing the current farm bill program funding levels and maintaining a unified farm bill that includes nutrition programs and farm programs together. Farm Bureau also favors prioritizing risk management tools that include federal crop insurance and commodity programs and ensuring adequate USDA staffing and resources to provide technical assistance. “Since the farm bill was enacted in 2018, farmers have faced significant challenges from market volatility, increased input costs, and devastating natural disasters,” says AFB President Zippy Duvall. “We need long-term stability.” Their priorities include more than 60 recommendations over multiple farm bill titles. Other recommendations include reference price increases for commodities, more transparency for milk checks, funding for conservation programs, rural development, and streamlining of nutrition programs to get food to those who need it most.
Ethanol Output Jumps to Highest Level in a Month
The Energy Information Administration says U.S. ethanol production jumped to its highest level in almost a month during the week ending on October 7. Ethanol output rose to an average of 932,000 barrels per day, the largest production level since the week ending on September 9 and up from the 889,000 produced during the prior week. The Midwest is the biggest ethanol-producing area in the country, and output surged to an average of 881,000 barrels a day, the highest level in a month and up from 840,000 a week earlier. East Coast production jumped to 10,000 barrels a day, up from 3,000 barrels the week before. Rocky Mountain output was unchanged, while production dropped on the Gulf Coast by 7,000 barrels a day and 1,000 on the West Coast. Ethanol inventories rose to 21.86 million barrels in the seven days ending on October 7, up from 21.68 million barrels a week earlier.
Monday Watch List
Markets
Back from the weekend, traders will stay on top of the latest weather forecasts and news developments, especially from Ukraine after Russia's President Putin suggested Friday missile attacks were no longer needed. USDA's weekly report of export inspections has become on way of tracking problems on the Mississippi River and is due out at 10 a.m. CDT, followed by Crop Progress at 3 p.m. Also, the National Oilseeds Processors Association will release its estimate of members' soybean crush late Monday morning.
Weather
A strong cold front pushed south through the country over the weekend. It will continue its journey into the Gulf of Mexico Monday, bringing scattered showers to parts of Texas. But the bigger story is the very cold air filling in behind the front. Widespread frosts and freezes will occur over the next few nights, getting down to Oklahoma, northern Mississippi and Alabama tonight. The cold pushes closer to the Gulf of Mexico for later this week. Cold air moving over the Great Lakes is causing a mix of lake-effect rain and snows that continues the next couple of days, annoying those with fieldwork to do.
Friday, October 14, 2022
Consumer Price Index Summary
The Consumer Price Index rose 0.4 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported Thursday. The food index increased 0.8 percent in September, the same increase as August. The food at home index rose 0.7 percent in September as all six major grocery store food group indexes increased. The index for fruits and vegetables rose 1.6 percent, while the index for cereals and bakery products rose 0.9 percent. The index for meats, poultry, fish, and eggs rose 0.4 percent, while the index for nonalcoholic beverages increased 0.6 percent in September. The dairy index rose 0.3 percent in September, the same increase as the previous month. The food away from home index rose 0.9 percent in September, as it did in August. The food at home index rose 13.0 percent over the last 12 months, and the index for food away from home rose 8.5 percent over the last year.
MacKenzie Scott Gift to 4-H to Strengthen Workforce
The National 4-H Council Thursday shared details of the $50 million unrestricted gift from writer and philanthropist MacKenzie Scott, announced in February. The gift will help close the opportunity gap for America's youth. Over the next five years, National 4-H Council will allocate $10 million to strengthen the 4-H workforce and optimize 4-H youth programming. The investment will accelerate 4-H's ability to meet the needs of young people today and tomorrow while providing the professional development and training required to deliver quality, relevant and impactful programming. The Board will preserve the remainder of the gift for the long term to ensure that National 4-H Council can sustain programs and activities that have the greatest benefits for 4-H youth development in the future and to ensure the gift's enduring impact. The National 4-H Council Board made its investment decisions based on an inclusive process undertaken over six months with extensive input from Cooperative Extension and land-grant university leaders.
USDA Seeks Comment on Program Assisting Producers Who Have Experienced Discrimination
The Department of Agriculture seeks public comment on how it should implement Section 22007 of the Inflation Reduction Act. The provision aims to assist the nation’s farmers, ranchers, and forest landowners who experienced discrimination in USDA’s farm lending programs. Section 22007 provides a transformative opportunity for USDA to help farmers, ranchers, and forest landowners impacted by discrimination in USDA farm lending programs. IRA Section 22007 directs USDA to provide financial assistance to producers who have experienced discrimination in USDA’s farm lending programs and has appropriated $2.2 billion for this purpose. Agriculture Secretary Tom Vilsack says, “These actions further build on USDA’s commitment to use all the tools it has available to help farmers.” The request for information in the Federal Register asks several questions on how USDA should design and administer the program. The 30-day comment period opens Friday, October 14, and closes on November 14, 2022. USDA values your input and welcomes all comments.
Grains Council Holds Export Exchange in Minneapolis
More than 200 international buyers and end-users of coarse grains and co-products from more than 50 countries are gathering in Minneapolis for Export Exchange 2022 to end the week. The event is co-sponsored by the U.S. Grains Council, Growth Energy and the Renewable Fuels Association. Export Exchange offers attendees an unparalleled opportunity to meet and build relationships with domestic suppliers of corn, distiller's dried grains with solubles, sorghum, barley and other commodities. U.S. Grains Council president and CEO Ryan LeGrand says, “It is essential for us to strengthen the bonds between suppliers and partner countries, and the connections made this week will not only help propel our industry this year, but for years to come.” The global buyers were grouped into 20 trade teams that have either been in the U.S. ahead of Export Exchange or will continue their visits after the event to explore American agriculture practices and tour facilities.
Florida Accounted for 1.7 Percent of U.S. Farm Sector Cash Receipts in 2021
New data from the Department of Agriculture shows Florida accounted for 1.7 percent of U.S. farm sector cash receipts in 2021. USDA's Economic Research Service estimates the previous year's farm sector cash receipts—the cash income received from agricultural commodity sales. The data includes state-level estimates, which offer background information about states subject to unexpected events that affect the agricultural sector, such as Hurricane Ian. In 2021, commodities produced in Florida contributed about $7.5 billion, or 1.7 percent, of the $434 billion in total U.S. cash receipts. Floriculture, the cultivation of flowers, accounted for the largest share of Florida's cash receipts, valued at $1.1 billion. The next largest commodities in Florida in terms of cash receipts were oranges, at $670 million, sugarcane at $553 million, cattle and calves at $546 million, and milk $470 million. Florida led the nation in cash receipts for sugarcane, cabbage, cucumbers, watermelon, sweet corn, and snap beans.
Taziki's Doubles Down with American Lamb
Taziki's Mediterranean Café and the American Lamb Board teamed up this summer to promote a new Mediterranean Lamb Burger, made with two patties of 100% American Lamb. The promotion ran from June through September. Dan Simpson, CEO of Taziki’s, says, “Our guests loved the Mediterranean flair added to comfort food and sales surpassed our expectations.” Headquartered in Birmingham, Alabama, Taziki’s Mediterranean Café has 90 locations spanning across 16 states nationally, with most locations in the Southeast. Because of its popularity, about 50 percent of the Taziki’s locations continued to offer the lamb burger for an additional month beyond the promotion period. A similar promotion was featured last year with great results, which led to a repeat feature in 2022. American Lamb Board chairman Peter Camino says, “We thank Taziki’s for their commitment to using American Lamb in their lamb burgers. Serving local lamb supports the nation's shepherds and their families.”
Friday Watch List
Markets
USDA's weekly export sales report is set for 7:30 a.m. CDT Friday and expectations remain low, while barge traffic is restricted along the Mississippi River. A report on U.S. retail sales for September is also out at 7:30 a.m., followed by the University of Michigan's early consumer sentiment index for October at 9 a.m. Traders will continue to keep an eye on the latest weather forecasts and outside market news, especially anything pertaining to Ukraine and the grain deal with Russia.
Weather
A storm system continues to spin around Ontario, Canada on Friday. In the cold air wrapping around the system, some isolated showers continue in the Upper Midwest and Great Lakes, including a few snowflakes. Breezy winds also continue across a good chunk of the country as well. In drier areas, there is an increased fire risk.
Thursday, October 13, 2022
Combine Sales Grow, Tractor Sales Drop in September
Combine harvester sales rose during September in both the U.S. and Canada, while total tractor sales fell in both countries. Data from the Association of Equipment Manufacturers says total U.S. ag equipment unit sales stayed above the five-year average for the second month since April. Total farm tractor sales fell 12.8 percent in September compared to last year, while U.S. self-propelled combine sales for the month rose 6.6 percent, slowing gains made in August. The 100-plus horsepower two-wheel-drive tractor segment was once again the only positive segment in the U.S., up 9.6 percent from August. In Canada, growth was led by combine harvesters, up 105 percent. Overall unit sales for tractors were down one percent. “The ag equipment market, as with most markets for manufactured goods, is turbulent,” says Curt Blades, senior vice president of industry sectors and product leadership with AEM. “Supply chain difficulties continue to weigh on manufacturers’ deliveries.”
Soy Checkoff Supports Research to Expand Export Infrastructure
The United Soybean Board announced it is investing $400,000 to help provide efficient access and bolster international trade markets for U.S. soybean meal. The money will be used for the research, analysis, and design costs of the Port of Grays Harbor’s Terminal Four Expansion and Redevelopment Project. The terminal in Aberdeen, Washington, plays an important role in international exports. “The Port of Grays Harbor is critical in expanding high-value soybean meal exports,” says Tony Johanson, USB director and Soy Transportation Coalition board member. “Our farmers remain committed to enhancing and maintaining U.S. infrastructure to help sustain our competitive advantage over global competitors.” Scheduled to be operational in 2025, the upgrades will allow the terminal to increase soybean meal exports from three to six million metric tons. To accommodate the growth, the Port of Grays Harbor will expand the rail infrastructure, allowing the terminal to handle the volume and mitigate traffic congestion.
USDA Investing $110 Million to Improve Rural Healthcare
USDA Rural Development Undersecretary Xochitl (zo-CHEEL) Torres Small announced that the agency is awarding $110 million in grants to improve healthcare facilities in rural towns across America. These grants will help 208 rural healthcare organizations expand critical services for five million people in 43 states and Guam. “Access to modern and sustainable healthcare infrastructure is critical to the health, well-being, and prosperity for the millions of people who live in rural and tribal communities,” she says. “That’s why we are committed to making sure that the people who need it most, no matter where they live, have access to high-quality and reliable health services like urgent care, primary care, and dental care.” Torres Small also says through the Emergency Rural Health Care Grants, USDA is being a ”strong partner” to people across 43 states and Guam. The investments will help build, renovate, and equip rural hospitals and clinics.
October WASDE Report Shows Lower Corn, Soybean Production
USDA’s October World Ag Supply and Demand Estimates and Crop Production Reports call for lower U.S. corn and soybean production. The corn outlook is for reduced supplies, greater feed and residual use, lower exports and corn used for ethanol, and smaller ending stocks. Corn production is forecast at 13.8 billion bushels, down 49 million on a reduction in yield to 171.9 bushels per acre. Corn supplies are forecast at 15.32 billion bushels, with the season-average corn price up five cents to $6.80. U.S. oilseed production is forecasted at 126.9 million tons, down 1.6 million from September. Soybean production is forecast at 4.3 billion bushels, down 65 million on lower yields now projected at 49.8 bushels. Supplies dropped by 31 million bushels, with the season-average soybean price down 35 cents to $14.00. The wheat outlook is for lower supplies, domestic use, exports, and stocks. The season-average farm price rose 20 cents to $9.20.
NCBA Says Google Feature Misrepresents Beef
The National Cattlemen’s Beef Association denounced Google’s decision to bias consumers against beef through their new sustainability search feature. NCBA says that feature provides inaccurate climate information about cattle production. “Google is using its billions of dollars of resources to target cattle producers and ignore the science that demonstrates beef’s sustainability and value to the environment,” says NCBA President Don Schiefelbein (SHEEF-ell-byne). “Cattle producers have a record of continuous improvement, which has led to the U.S. recording the lowest global greenhouse gas emissions from beef while contributing to the world’s food security.” NCBA also says cattle production protects green space, upcycles grass and forages, and provides consumers with a lean source of protein packed with essential nutrients. “Google should seriously reconsider this feature,” Schiefelbein adds. NCBA points out that livestock play an important role in protecting open spaces and accounts for only a very small portion of greenhouse gas emissions.
Railroad Union Votes Down Labor Contract, Strike Looming
The Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters rejected a tentative labor contract brokered between rail carriers and workers’ union reps. The third-largest rail workers union in the country was the first union to say no to a deal brokered in part by the Biden administration. The union voted the deal down 6,646 to 5,100. President Tony Cardwell told Politico that workers “resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness.” Negotiations will restart, resetting the countdown on a potential strike. The union says it will delay any strike until five days after Congress reconvenes. Four other unions approved the tentative agreement. However, every one of the 12 unions representing employees must ratify their contracts to prevent a strike. Voting will be finished by mid-November.
Thursday Watch List
Markets
Thursday morning's reports will start at 7:30 a.m. CDT with attention on the Labor Department's consumer price index for September, following a producer price report that came in higher than expected Wednesday. U.S. weekly jobless claims and an update of the U.S. Drought Monitor will also be out at the same time. The Energy Department's natural gas storage report will be out at 9:30 a.m., followed by the weekly energy inventory report at 10:00 a.m. The Treasury's budget report for September is due out at 2 p.m. USDA's weekly export sales report is set for Friday morning, due to this week's federal holiday.
Weather
A cold front continues to press eastward through the country on Thursday with scattered showers. Cold air continues to funnel in behind the front across most of the country east of the Rockies. Breezy winds continue Thursday, especially in the Plains, which increases the fire risk.
Wednesday, October 12, 2022
Ag Groups Argue Against Prop 12 in Supreme Court
Agriculture groups argued against California's Proposition 12 to the Supreme Court Tuesday. The American Farm Bureau Federation and National Pork Producers Council challenged the ability of one state to set agricultural production standards for the entire country. California's Proposition 12 law bans the sale of pork from hogs that don't meet the state's arbitrary production standards, even if the hogs were raised outside of California. AFBF President Zippy Duvall says, "Proposition 12's misguided approach will ultimately cost every family through higher food prices." The National Cattlemen's Beef Association also supports AFBF and NPPC. NCBA Vice President of Government Affairs Ethan Lane says, "While this case is not focused on cattle producers, the precedent set by the court will determine all producers' ability to engage in interstate commerce." Earlier this year, NCBA filed an amicus brief before the court arguing that California's mandates on livestock production methods violated the dormant commerce clause of the Constitution.
Biden Administration Invests $80 Million to Improve Nutrition in School Meals
The Biden Administration Tuesday provided $50 million in grants for schools to invest in new food service equipment that will allow them to continue serving nutritious meals. The funding adds to the $30 million equipment grants the administration gave schools earlier this year. The announcement comes during National School Lunch Week, as designated by President Joe Biden. The added support for school meals and child nutrition builds on the momentum from last month's White House Conference on Hunger, Nutrition and Health, where the administration unveiled a national strategy to end hunger and reduce diet-related disease by 2030. Agriculture Secretary Tom Vilsack says, "Ensuring access to nutritious school meals is one of the best investments we can make in our fight to end child hunger and improve health." USDA provides grant funds to states, which use a competitive application process to award them to school districts participating in the National School Lunch Program.
Global Food Insecurity Increased Nearly 10 Percent in 2022
New research from USDA’s Economic Research Service announced Tuesday shows global food insecurity increased by nearly ten percent in fiscal year 2022. USDA’s International Food Security Assessment model estimates how food prices and incomes affect food demand and access in 77 low- and middle-income countries. Food security is then evaluated by estimating the population unable to access sufficient calories to sustain a healthy, active lifestyle. Of the people in countries included in the 2022 assessment, almost 119 million more people are estimated to be food insecure compared to 2021. The upward trend in international prices for wheat, coarse grains, and vegetable oils during the 2021/22 marketing year has been further exacerbated by Russia's military invasion of Ukraine, which reduced exports of the commodities from the Black Sea region. Domestic prices of major grains in 2022 are projected to rise in 70 of the 77 countries included in the assessment, with the North Africa region being the most affected.
RIPE Urges Equitable Payments Above Costs for Conservation in Farm Bill Platform
Rural Investment to Protect our Environment, or RIPE, announced its 2023 Farm Bill platform Tuesday. Shaped by farmers and ranchers across the country who lead RIPE, the platform urges organizations to include a resolution, based on RIPE100 principles, in their farm bill platform. The resolution states, “A portion of new funds appropriated by Congress for climate-smart agriculture should be invested in a new conservation program offering a simple enrollment process that enables producers — including early adopters — to earn equitable payments above implementation costs, economic losses during transition to new practices and future climate policy costs.” The recommendation comes as Congress considers how to best encourage climate-smart agriculture through the farm bill, including how to allocate $18 billion in new funds from the Inflation Reduction Act. RIPE is a producer-led organization advancing RIPE100 — a conservation program that would pay producers $100 per acre or animal unit for stewardship, offering equitable payments above costs associated with practice implementation.
University Of Illinois to Develop Corn for Diverse Organic Systems
Decades of corn breeding efforts emphasizing yield have contributed to modern hybrids with shallower and less complex root systems than their predecessors. Because the breeding and selection of most modern hybrids has taken place in environments with high nutrient concentrations, optimal weed control, and soil moisture conditions, hybrids perform best under high input systems. With help from a new four-year, $1.5 million grant from USDA's National Institute for Food and Agriculture, a team of researchers at the University of Illinois plans to study overlooked attributes of corn roots. The new grant investigates maize roots for organic/regenerative systems and explores ways to manipulate the agroecosystem to optimize carbon storage, resource use efficiency, and productivity. The researchers will work with farmers to learn how they use information about crop and soil conditions to balance management goals. In addition to optimizing yield, the team will work to develop corn roots that respond to changing soil conditions that are driven by management, like rotation length and diversity.
USDA Invests $14M to Strengthen Hispanic-serving Higher Education Programs
In recognition of National Hispanic Heritage Month, the Department of Agriculture Tuesday announced an investment of $14 million to Hispanic-serving higher education institutions. The funding supports Hispanic student learning experiences in the agricultural and human science sectors. The investment will help attract, retain and graduate outstanding students from underrepresented communities. USDA Deputy Secretary Jewel Bronaugh says Hispanic-serving higher education institutions “are our trusted partners in preparing the next generation of agriculture leaders that more fully represent the many diverse populations and voices in America.” The funding is part of the National Institute of Food and Agriculture's Hispanic-serving Institutions Education Grants Program. The grant program aligns the education institutes' efforts to support the academic development and career attainment of underrepresented groups. As part of the program, USDA awarded funding to New Mexico State University – Las Cruces, Northern Arizona University – Flagstaff, and University of Puerto Rico – Carolina, among other Hispanic-serving higher education institutions.
Wednesday Watch List
Markets
Outside markets will be interested in the Labor Department's 7:30 a.m. CDT report on U.S. producer prices Wednesday, followed by minutes from the latest Federal Reserve meeting at 1 p.m. Grain traders are anticipating USDA's next WASDE and Crop Production reports, both due out at 11 a.m. CDT with updates on row crop harvest estimates and USDA's views on several other hot topics. Weather also remains a prime area of interest with rain needed in many areas.
Weather
A strong cold front is moving through the middle of the country early Wednesday and producing a broken line of showers from northern Oklahoma into Wisconsin. Additional showers are forming ahead of the front from Alabama up to the Great Lakes. The front will continue to sweep southeast throughout the day with light to moderate rainfall. Some thunderstorms could be stronger in the Delta region Wednesday afternoon. A secondary front moving just behind this first one by about 12 to 18 hours is making for more isolated showers across the Western Corn Belt. Breezy conditions behind this front continue to create an increased fire risk, but it will generally be breezy most places today.
Tuesday, October 11, 2022
National School Lunch Week: USDA Serves 224 Billion Since 1971
President Joe Biden recently declared this week as National School Lunch Week. The annual declaration highlights how school meals remain a vital lifeline, supplying well-balanced, free or low-cost meals to kids across the country since the program began in 1946. USDA’s Economic Research Service also released a report analyzing data on school lunch meals served. USDA found that between 1971 and 2021, the National School Lunch Program served about 224 billion meals. Of these meals, 126.4 billion were served for free or at a reduced price. The onset of the COVID-19 pandemic in March 2020 interrupted the operations of many schools through fiscal years 2020 and 2021. As a result, about 3.2 billion lunches were served through the program in 2020 and 2.2 billion in 2021, fewer than the 4.9 billion in 2019. The drop reflects the use of a USDA pandemic waiver allowing schools to serve meals through the Summer Food Service Program and the creation of the temporary Pandemic Electronic Benefit Transfer program.