NACD Releases 2023 Farm Bill Recommendations

The National Association of Conservation Districts released policy recommendations for the upcoming 2023 Farm Bill. The NACD’s Farm Bill Task Force has convened more than a dozen times to come up with recommendations that were recently approved by the NACD Board of Directors. Their most important priority is for Congress to keep conservation investments provided by the Inflation Reduction Act in the farm bill conservation programs. This request is critical to addressing the high unmet demand for NRCS conservation programs, which only serve about one in every three eligible producers. To support locally-led conservation efforts, the recommendations also push back against one-size-fits-all policies, the addition of national carve-outs within programs, and limitations on conservation practices. “We will continue to work with a wide range of stakeholders and lawmakers on both sides of the aisle to develop an inclusive farm bill that provides strong support for conservation,” says NACD President Kim LaFleur.

FCC Commissioner Speaks Out on the Importance of AM Radio in EVs

Nathan Simington, a Commissioner for the Federal Communications Commission, spoke out on the continued importance of AM radio to public safety. He says the issue of continuing to include AM radios in electric vehicles deserves urgent attention. “As electric vehicle adoption increases, we must not leave behind those in rural areas who depend on radio for their news and alerts,” Simington says. He points out that growing up in rural Saskatchewan was like living in a connectivity desert. “Back then, like now, radio was essential for staying connected,” he says. “While some things have changed, not enough has changed to eliminate the need for radio, and the situation is similar in the United States.” He also believes the FCC has a duty to make clear how valuable AM radio is to its listeners. “Further, we should be good stewards of the AM radio band,” he says. “That includes safeguarding AM radio reception.” 

Veterinarians Help Reignite Push to Strengthen Dog Import Standards

The American Veterinary Association-supported Healthy Dog Importation Act would help to prevent the introduction and spread of diseases impacting both animal and human health. The legislation has been reintroduced in both chambers of Congress and would improve importation standards to make sure dogs are in good health when brought into the U.S. “Strengthening our animal health infrastructure by improving the country’s dog import standards is essential to maintaining public health,” says Dr. Lori Teller, AVMA President. “There are over a million dogs imported into the country each year, and we must make sure they’re healthy and not a risk for spreading dangerous diseases.” Senator Tina Smith (D-MN), one of the bill’s sponsors in the Senate, says, “Mitigating the spread of foreign diseases in dogs helps keep domestic and wild animals safe. It will also prevent illnesses and disease outbreaks in people.” Smith also says she’ll continue pushing this bipartisan bill forward.

USDA Report Says Farmers Adopting Precision Ag at Different Rates

Farmers are adopting precision technologies at different rates. A USDA report says the largest farms are adopting auto-steer guidance technology at significantly higher rates. After sorting farms into five equally-sized groups, the agency found that among farmers who were growing corn in 2016, 73 percent of farms in the largest category adopted guidance at the highest rates. The rates were similar for the largest farms growing other commodities in later years: 82 percent of the largest winter wheat farms in 2017, 68 percent of the largest soybean farms in 2018, and 67 percent of the largest cotton farms in 2019. Adoption rates were smaller among the smallest farms in the country: 10 percent of the smallest corn farms in 2016, 11 percent of the smallest soybean farms in 2018, and seven percent of the smallest winter wheat farms in 2017. However, fifty percent of the smallest cotton farms have adopted the technology.

USDA Looking to Expand Conservation Assistance

The USDA is seeking applications for projects that will improve its outreach to underserved producers and underserved communities. The agency is looking to expand opportunities to participate in conservation programs and services and opportunities for students to pursue careers in agriculture, natural resources, and related sciences. USDA’s Natural Resources Conservation Service is offering up to $70 million in cooperative agreements with entities for two-year projects that encourage participation in NRCS programs, especially in underserved communities and among urban and small-scale producers. “USDA is committed to removing barriers for underserved producers to all USDA services,” says NRCS Chief Terry Cosby. “The projects funded through this opportunity will better ensure these producers receive the benefits our conservation programs deliver.” The projects should promote the benefits of the NRCS programs through education or demonstrations, develop community conservation partnerships that engage underserved producers, and meet other requirements too. For more information, go to grants.gov.

Corn Export Sales Drop Week-to-Week

The USDA says corn export sales for the week ending on February 16 dropped while wheat and bean sales rose. Corn sales that week hit 823,200 metric tons, 20 percent lower than the previous week and 30 percent under the previous four-week average. Japan was the biggest buyer at 312,000 metric tons, followed by Mexico and Taiwan. The total would have been higher, but China and Italy both canceled shipments. Exports for the week rose three percent to 687,400 tons. Wheat sales came in at 338,800 metric tons, 62 percent higher than the previous week and 39 percent above the four-week average. Exports hit 338,000 metric tons, a 32 percent drop. Soybean sales rose 20 percent over the prior week at almost 545,000 metric tons, 18 percent below the four-week average. China was the top buyer at 176,200 metric tons. Exports for the week dropped six percent to 1.74 million metric tons.

Tuesday Watch List

Markets

DTN's Ag Summit Series begins at 8:30 a.m. CST Tuesday, followed by the Conference Board's index of U.S. consumer confidence at 9 a.m. Traders will keep watch over the latest weather forecasts and pause at 8 a.m. to see if USDA has an export sale to announce, something not seen for the past 10 days.

Weather

A storm system continues to move through the Northeast with precipitation but the next in the series of storms for the week will exit the Rockies and move through the Northern Plains and Upper Midwest Tuesday and Tuesday night with scattered snow showers. A band of snow should set up along the North Dakota-South Dakota border which may be heavier. Breezy winds continue in West Texas, which continue to rob the region of any topsoil moisture.

U.S. Imposes Higher Tariffs on Russian Imports

The White House announced actions intended to hold Russia accountable for invading Ukraine. U.S. Trade Representative Katherine Tai says as part of that effort, President Biden announced additional tariff increases on a variety of goods from Russia worth approximately $2.8 billion. The president raised tariffs on most metal and metal products, doubling them from 35 to 70 percent and targeting a crucial revenue-generating sector of the Russian economy. He also increased tariffs on additional Russian products to 35 percent, including chemicals and minerals. These moves are complemented by tariff increases on Russian aluminum. “These actions are carefully calibrated to put economic pressure on Russia while minimizing costs to U.S. consumers,” says Tai. “As the president recently said in Poland, the United States and our Allies and partners will hold accountable those who are responsible for the war.” She also says those actions demonstrate the U.S. resolve in doing precisely that.  

Food-at-Home Price to Increase Almost Nine Percent

USDA’s Economic Research Service publishes its price forecasts in the monthly Food Price Outlook report. The FPO forecasts food-at-home prices will increase by 8.6 percent in 2023, with a prediction interval of 5.6 to 11 percent. Forecasts now include a midpoint and a prediction interval to represent the expected price change and range of likely prices. The prediction intervals vary. They begin wider due to uncertainty at the start of the year and then narrow as forecasts incorporate more months of observed data. In 2023, fresh fruit prices are predicted to experience little change at 0.1 percent with a prediction interval of  -5.6 to 6.4 percent. Overall, food prices are expected to grow more slowly in 2023 than they did in 2022 but remain above historical average rates. Food-at-home prices grew 11.4 percent in 2022, the largest annual increase since 1974, compared with a historical average increase of 2.5 percent from 2003-2022.

Egg Prices are Projected to Drop 30 Percent This Year

The price of eggs is projected to fall dramatically after reaching record-high levels over several months. The USDA says those prices should fall back to typical levels this year, provided the U.S. doesn’t see a rebound in highly pathogenic avian influenza cases in 2023. The Bureau of Labor Statistics says the price of eggs in January was $4.80 a dozen, 150 percent higher than in January of last year. USDA Chief Economist Seth Meyer told the Ag Outlook Forum attendees that wholesale egg prices will drop almost 27 percent in 2023. The agency says the high price of eggs is driven by the historic level of avian flu outbreaks that have killed more than 58 million backyard and commercial chickens and turkeys since last February. The agency says egg production will increase four percent this year to 9.4 billion dozen as the number of egg-laying chickens will also rebound from 2022.

Report Says Farm Bill Should Prioritize Ag Research

A report produced by the Farm Journal Foundation and the Chicago Council on Global Affairs says the U.S. needs to increase support for agricultural research and development in the next farm bill. The support would help make sure that farmers can keep feeding the world despite the challenges faced by agriculture. New innovations generated from agricultural research at land-grant universities and other public sector institutions can help increase farm productivity and economic growth. Despite that, public investment in agricultural R and D has declined in recent years. The report says the 2023 farm bill is an opportunity to increase funding for agricultural R and D and ensure the U.S. is prepared for the challenges ahead. The USDA’s Economic Research Service says ag research provides one of the highest returns of any public research investment, generating $20 on average for every $1 spent. Public investment is needed to complement private-sector spending. 

Ethanol Production Surges

The Energy Information Administration says ethanol output jumped to the highest level in more than two months while inventories again increased during the week ending on February 17. The EIA report says production rose to an average of 1.029 million barrels a day. That’s up from 1.014 million barrels, on average, during the previous week and is the highest output since December 16. The Midwest saw output increase to an average of 984,000 barrels a day, up from 965,000 barrels during the previous week. That was where all the gains took place. Production in the West Coast and East Coast regions was unchanged from the prior week. Production in the Rocky Mountain and Gulf Coast regions fell an average of 9,000 and 21,000 barrels a day, respectively. Ethanol stockpiles were up again, rising to 25.58 million barrels, up from 25.33 million during the prior week, and the highest level since April 1, 2022.

Give FFA Day Raises Record Amount of Support

The National FFA Organization was amazed at the amount of support shown during the National Give FFA Day event. They were excited to announce that with the generous support of the FFA community, they helped raise a record-breaking amount of money. A total of 721,506 dollars will go toward benefitting National FFA and 51 FFA associations. “To those who donated on Give FFA Day, we are so grateful for your support,” the organization said in a release. “Your generosity will impact FFA members and teachers across the country.” They also say because the support was so generous, FFA is able to build members’ leadership skills, instill a passion for service, and prepare the next generation for agriculture careers. “Thank you to everyone who stepped up to make the day such a rousing success,” the organization said. For those who didn’t get the chance, go to ffa.org to continue supporting the organization.

Monday Watch List

Markets

Back from the weekend, traders will check the latest weather forecasts and any news. A report on U.S. durable goods orders for January is due out at 7:30 a.m. CST, followed by pending home sales at 9 a.m. and USDA's weekly grain inspections at 10 a.m.

Weather

A storm system going through the Midwest on Monday morning already produced a round of significant severe weather across the Central and Southern Plains on Sunday, with another round possible from Illinois to Ohio on Monday. In addition, colder temperatures across the northern Midwest and Northeast will create a mix of wintry weather Monday into Monday night, and breezy winds have developed for the middle of the country. Several additional storm systems are expected this week with myriad impacts.

USDA Releases Lower Ag Export Forecast for 2023

American agricultural exports in fiscal year 2023 are projected at $184.5 billion, down $5.5 billion from the November forecast. The export forecasts for all major commodity groups are down, with the largest drops projected for corn, sorghum, and soybeans. Corn exports are forecast $1.9 billion lower to $16.6 billion on lower volume. Soybean exports are projected to drop by $800 million to $32 billion on lower U.S. supplies and increased Brazilian competition. Livestock, poultry, and dairy exports are forecast to decrease by $900 million to $40.5 billion as declines in beef, poultry, and dairy exports offset increases in pork exports. U.S. cotton exports are forecast down $100 million to $5.9 billion on lower volumes. Ethanol exports are forecast at $3.6 billion, down $600 million on lower volumes and a reduced demand outlook. China is forecast to remain the largest market for U.S. agricultural exports at $34 billion, unchanged from November.

Study Shows Transition to Cage-Free Eggs Comes With Problems

A new study funded in part by United Egg Producers and the United Egg Association shows the transition to cage-free eggs will increase costs and reduce profits. It also shows that producers may not be able to make the 2026 deadline. The study says, “Conversion from conventional to cage-free housing is costly for both egg producers and final consumers.” There remains a lot of uncertainty about the extent to which egg producers will be willing and able to continue transitioning to cage-free housing at a rate commensurate with retailers’ cage-free pledges. Roughly 55 percent of consumers surveyed for the study are motivated by price and don’t discriminate between cage and cage-free eggs. Producers surveyed also reveal higher costs and labor requirements associated with cage-free production. Producers are also experiencing challenges in getting financing to convert or build cage-free facilities without longer-term commitments from retailers, particularly as interest rates continue climbing higher.

Cyberattack Temporarily Shuts Down Dole Production

Food giant Dole says it recently was hit by a cyberattack that was determined to be ransomware. Industrial Cyber says the attack disrupted the company’s operations and resulted in the temporary shutdown of production plants. It temporarily halted the company’s food shipments to stores. A company news release says upon learning of the incident, Dole moved quickly to contain the threat and engaged leading third-party cybersecurity experts who’ve been working with Dole’s internal teams to secure the company’s systems. An internal memo on February 10 told employees that “Dole Food Company is in the midst of a cyber-attack and has subsequently shut down our systems throughout North America.” Two grocery stores in Texas and Mexico contacted by CNN said they hadn’t been able to stock Dole salad kits on their shelves for days. Dole didn’t go into detail about the ransomware hackers’ attack methods but did say the company contacted law enforcement.

Mad Cow Disease Found in Brazil

Brazil’s agriculture and livestock ministry says beef exports to China are temporarily on hold after a case of mad cow disease was confirmed in one of the northern states called Para. Reuters says the suspension is part of an animal health agreement made between the two countries and likely won’t last long. However, it is a hit to the bottom line for the country’s farmers as China is the top destination for Brazil’s beef exports. Minister Carlos Favaro says, “All measures are being taken immediately at each stage of the investigation, and the matter is being handled with total transparency to guarantee Brazilian and global consumers the recognized quality of our meat.” The ag ministry also says, “The symptomology indicates that it is the atypical form of the disease, which appears spontaneously in nature, causing no risk of dissemination to the herd and human beings.” Para’s agricultural defense agency confirmed the disease case.  

2022 Annual Milk Production up 0.1 Percent From 2021

The annual production of milk in the United States during 2022 was 226 billion pounds, 0.1 percent above 2021. Revisions to 2021 production increased the annual total to 35 million pounds. Revised 2022 production was down 158 million pounds from the previous USDA publication. Annual total milk production has increased 12.5 percent since 2013. The average number of milk cows on farms in the United States during 2022 was 9.4 million head, 0.5 percent lower than last year. The average number of milk cows was revised down 2,000 head for 2022. The average annual number of milk cows has increased by 1.9 percent from 2013. In the meantime, milk production in the 24 major dairy-producing states totaled 18.5 billion pounds in January, 1.5 percent higher than in January 2022. Production per cow averaged 2,069 pounds for January, 18 pounds above January 2022. The number of milk cows on farms was 8.93 million head.

Biggest U.S. Farms Obtaining More Land

USDA’s annual Farms and Land in Farms Report shows the country’s largest farms with sales of $1 million or more operate nearly 26 percent of U.S. farmlands. The agency also says there were 2.003 million farms in the nation during 2022, a drop of 0.5 percentage points from 2012. Around 88,660 farms, or 3.9 percent of the total, had sales of at least $1 million. Ten years ago, three percent of farms made that category. The average size of the largest farms, by sales, was 2,927 acres or 4.6 square miles in 2022. In 2012, farms with $1 million in sales were an average of 2,481 acres in size. USDA says the average farm size for 2022 was 446 acres, up from 445 acres in 2021. The size of farms in the $1 million or more sales class increased. Farms in every other sales class either decreased or remained the same size.

Friday Watch List

Markets

USDA's weekly export sales report is set for 7:30 a.m. CST, the same time the Personal Consumption Expenditure index for January and U.S. personal income and consumer spending data will also be out, followed by U.S. new home sales for January and the University of Michigan's consumer sentiment index for February at 9 a.m. USDA's monthly cattle on-feed and cold storage reports are due out at 2 p.m.

Weather

There may be some showers floating around the Plains, Midwest, and Delta on Friday, but most areas will stay dry. Very cold air that has settled into the Northern Plains and Canadian Prairies continues Friday before moderating. The next storm system is moving through California with heavy precipitation and strong winds. This system will move through the Southwest over the next couple of days.

FACA Announces 2023 Farm Bill Priorities

The Food and Agriculture Climate Alliance Wednesday released policy recommendations for the 2023 farm bill. Further reducing emissions throughout agricultural and forestry supply chains will require a comprehensive effort involving financial and technical assistance, research investments, proactive response to innovation, public-private partnerships and a commitment to equitable opportunities for all producers. FACA's recommendations, developed by the 23-member steering committee, are divided into six categories: Conservation, risk management and credit, energy, food waste, forestry, livestock and dairy, and research, extension and innovation. FACA's past recommendations have provided guidance to members of Congress and administration officials and have been credited with shaping federal laws and programs. President of the American Farm Bureau Federation, Zippy Duvall, says, "We look forward to working with Congress to strengthen Title I programs, improve risk management tools, and utilize these FACA recommendations to advance our sustainability mission in a manner that respects farmers and ranchers as partners."

FDA Announces Draft Guidance for Plant-Based Dairy Imitators

The Food and Drug Administration Wednesday announced draft recommendations on the naming of plant-based foods that are marketed and sold as alternatives to milk. The guidance recommends that an alternative milk product that includes the term milk and has a nutrient composition different than milk, include a voluntary nutrient statement that conveys how the product compares with milk. Jim Mulhern, President and CEO of the National Milk Producers Federation, says the announcement "is a step toward labeling integrity for consumers of dairy products." Though Mulhern says the guidance "falls short of ending the decades-old problem of misleading plant-based labeling using dairy terminology." Senate Democrat Tammy Baldwin and Idaho Republican Jim Risch, in a joint statement, say, "This misguided rule will hurt America's dairy farmers and our rural communities." Baldwin and Risch announced their intention to reintroduce the DAIRY PRIDE Act, which would require the FDA to issue guidance for nationwide enforcement of mislabeled plant-based products within 90 of implementation.

NCGA Announces Caskey as CEO

The National Corn Growers Association Wednesday announced Neil Caskey as its new CEO. Caskey, who serves as NCGA's vice president of communications, will begin the role of CEO Monday, February 27. NCGA President Tom Haag says, "Neil's experience in agriculture is extensive, and he is well known as someone who gets the job done well." Caskey has served as NCGA's vice president of communications and industry relations for over four years and spent over a decade promoting agricultural issues as executive vice president at OBP Agency. His professional background also includes work for the American Soybean Association and as a legislative aide for a U.S. member of Congress. Caskey says, "It is quite an honor to lead an organization that I care so much about." Caskey holds a B.A. in political science from the University of Missouri-Columbia and an MBA from Webster University. Former CEO, Jon Doggett, left NCGA at the end of last year.

Consumers Expect to Pay More for Groceries

A new survey finds consumers expect to pay more for groceries this year. Progressive Grocer reports the 2023 KPMG Winter Consumer Pulse Survey shows consumers anticipate increased prices, but are looking for ways to save money. The Survey shows consumers expect a 15 percent increase in grocery spending this year. Meanwhile, 56 percent of consumers plan to spend more on groceries this year, while nine percent plan to spend less. Consumers cite inflation, an increased tendency to eat at home, larger household sizes and dietary changes as reasons for spending changes. KMPG research also finds 38 percent of consumers plan to pay more for restaurant meals this year, a two percent increase from last year. However, 35 percent of consumers say they plan to spend less on purchases made online this year, yet nearly half of the respondents reported an average increase in household income of 15 percent.

USDA Announces $59 Million Investment in Meat Processing Capacity

The Department of Agriculture this week announced a $59 million investment to increase independent meat and poultry processing capacity. The funding also seeks to expand market opportunities for farmers and create jobs in rural areas. The investment is part of the Biden administration's Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. The action plan dedicates resources to expand independent processing capacity. Agriculture Secretary Tom Vilsack says, "USDA will continue to work tirelessly to give farmers and ranchers a fair chance to compete in the marketplace, which in turn helps lower food costs for the American people." USDA is providing the $59 million in grants to five independent processors under the Meat and Poultry Processing Expansion Program. The funding will help build new processing plants, create hundreds of jobs, give local producers and entrepreneurs more options and business opportunities, and give consumers more options at the grocery store.

AFA Acquires Magnetic Ag Digital Newsletter

Agriculture Future of America has acquired Magnetic Ag - an agriculture-focused digital newsletter distributed through email twice weekly - from Magnetic Ag founder and AFA alumnus, Travis Martin. Since its inception in 2020, Magnetic has grown to serve more than 12,000 active subscribers including agricultural business, technology and policy professionals, alongside agriculture educators, students and farmers. Magnetic is aimed at making agriculture industry news digestible by consolidating news from a variety of industry media into each newsletter edition, making the newsletter a hub for the latest agriculture news. With a casual and catchy writing style, Magnetic shares agricultural business, policy, technology and market news. AFA President and CEO Mark Stewart says, "Adding Magnetic to AFA's offerings helps us further serve the industry by developing transformational leaders who find themselves at various stages of their careers." AFA aims to double readership in the coming year by making the newsletter more accessible to its partners and students.

USDA Forecasts Bigger Crops, Lower Prices for 2023-24 Crops

ARLINGTON, Va. (DTN) -- U.S. farmers are forecast to plant 91 million acres of corn, up 2.4 million acres from last year, and produce a 15-billion-bushel crop while soybean acres will hold pat at 87.5 million acres and produce 4.5 billion bushels, according to USDA's initial Outlook on the 2023-24 crops.

USDA also forecasts lower corn and soybean prices as production increases as well.

USDA released its Grain and Oilseeds Outlook at the opening of its annual Outlook Forum on Thursday in Arlington, Va.

CORN

USDA forecasts higher corn production for the 2023-24 crop year with 91 million acres planted and a record yield of 181.5 bushels per acre, producing a projected 15.09-billion-bushel crop, about 10% larger than a year ago. If realized, it would be the second-largest crop on record behind the 2016-17 crop year.

The higher production is expected to bring down the average farmgate price $1.10 a bushel from last year to $5.60 a bushel.

Citing the 181.5 bpa, USDA said the record yield forecast is based on a "weather-adjusted trend assuming normal planting progress and summer growing season weather."

Total corn supplies are forecast at 16.38 billion bushels, up about 8% from the 2022-23 crop.

Looking at use, feed, seed and industrial use is unchanged at 6.69 billion bushels. Corn use for ethanol is projected at 5.25 billion bushels, "based on expectations of flat motor gasoline consumption."

Feed and residual use is projected to rise 6% to 5.6 billion bushels due to higher corn production and expected lower prices during the year.

Exports are expected to rise 275 million bushels to 2.2 billion bushels due to "reduced exportable supplies in Ukraine," and modest global trade growth.

Ending stocks are forecast to rise 620 million bushels to 1.887 billion bushels, resulting in a stocks-to-use ratio of 13%.

SOYBEANS

While planted acreage would remain unchanged at 87.5 million acres, USDA forecasts yields will rise 2.5 bushels per acre to 52 bpa. That would boost production 5% to 4.5 billion bushels, "assuming normal growing-season weather."

The average farmgate price for soybeans is projected at $12.90 a bushel, down $1.40 a bushel from the 2022-23 crop.

Domestic soybean crush is projected to rise to a record 2.31 billion bushels, "supported by meal demand growth and high prices for biofuel feedstocks in the United States." Soybean oil for biofuels is expected to grow 8% to 12.5 billion pounds in 2023-24.

USDA cited the driving increase for soybean oil in biofuels that has pushed up U.S. prices and driven down exports. "This trend is expected to continue under current state mandates and the Environmental Protection Agency's proposed rule for 2023 through 2025," citing the EPA Renewable Fuels Standard rules.

Soybean exports for 2023-24 are forecast at 2.03 billion bushels, up 35 million bushels from the 2022-23 crop year. With harvest underway in Brazil, USDA cites that South American supplies will be higher this year as the U.S. export season gets underway. "With another large South American harvest expected in early 2024, export competition will likely limit potential gains in U.S. exports in the second half of the marketing year."

Soybean ending stocks for 2023-24 are projected at 290 million bushels, up 65 million bushels from the 2023-24 forecast.

WHEAT

U.S. wheat production is projected to increase 14% for 2023-24 to 1.887 billion bushels on both higher acreage and yield. Total wheat planted acre is projected at 49.5 million acres, up nearly 3.8 million acres from the 2022-23 crop, and the highest since 2016-17.

The average farmgate price for wheat is forecast at $8.50 a bushel, down 50 cents a bushel from the 2022-23 crop.

The all-wheat yield is projected to increase 6% to 49.2 bpa. Total wheat supply will hit 2.575 billion bushels, up 107 million bushels from last year's crop.

Total domestic use is forecast at 1.142 billion bushels, up 17 million bushels. Exports are forecast at 825 million bushels, up 75 million bushels from 2022-23. That puts total use at 1.967 billion bushels, up 67 million bushels from a year ago. All-wheat ending stocks will come in at 608 million bushels, up 40 million bushels from a year ago.

Thursday Watch List

Markets

U.S. weekly jobless claims, an update of fourth-quarter U.S. GDP and an update of the U.S. Drought Monitor are all set for 7:30 a.m. CST Thursday. The U.S. Energy Department's natural gas storage report will be out at 9:30 a.m., followed by energy inventories at 10 a.m. Traders continue to keep a close watch on the latest weather forecasts.

Weather

A long-duration winter storm is winding down Thursday, though moderate snow will still occur across portions of the northern Midwest into the Northeast. Winds remain blustery in some areas where the snow fell, causing some blowing and drifting of the snow along with occasional blizzard conditions. Very cold temperatures have settled in briefly across portions of the Plains and Upper Midwest through Friday before moderating.

USDA: Ethanol Production Rebounds from Pandemic Lows

Production and consumption of ethanol as a transportation fuel grew significantly over the last three decades in the United States before plateauing in recent years. The ethanol share of finished motor gasoline has moved concurrently with consumption, leveling off near ten percent in 2022. Steps taken in the spring of 2020 to combat the spread of COVID-19, such as increased remote work and school, and other social distancing efforts, resulted in sharp declines in a variety of ethanol market metrics. For example, from 2017–19, U.S. ethanol production averaged 1.33 billion gallons per month, while consumption averaged 1.18 billion gallons per month. During the pandemic lows, these values fell by 46 percent and nearly 40 percent, respectively, causing the ethanol share of finished motor gasoline to decline to nine percent. More recently, estimates for all three figures have largely recovered and leveled off. However, adoption of hybrid and electric vehicles is expected to put downward pressure on gasoline consumption and dampen prospects for renewed growth in fuel ethanol demand.

USDA Invests More than $48.6 Million to Combat Climate Change

The Department of Agriculture will invest more than $48.6 million this year through the Joint Chiefs’ Landscape Restoration Partnership. The projects mitigate wildfire risk, improve water quality, restore forest ecosystems, and ultimately contribute to USDA’s efforts to combat climate change. This year, the Forest Service and Natural Resources Conservation Service will invest in projects. Forest Service Chief Randy Moore says, “The need for cross-boundary wildfire risk reduction work as part of our Wildfire Crisis Strategy is more urgent than ever.” The partnership enables the Forest Service and NRCS to collaborate with agricultural producers and forest landowners to invest in conservation and restoration at a large enough scale to make a difference. Working in partnership, and at this scale, helps reduce wildfire threats to communities and critical infrastructure, protect water quality and supply, and improve wildlife habitat for at-risk species. USDA is investing $31.2 million in 25 existing projects and more than $17 million in 14 new projects.

Ocean Freight Rates Revert to Pandemic Lows

Since the highs of 2021, freight prices have dropped to lows not seen since June 2020, according to a recent analysis by U.S. Wheat Associates. Coupled with a recent break in wheat prices, decreased ocean freight costs have helped turn the tides back in the importers' favor. The Baltic Index price chart of dry bulk freight rates shows the impact on rates from the Russian invasion of Ukraine. On February 6, the Baltic Dry Index hit 621, a level not seen since June 2020. The index has fallen 88 percent from its peak in October 2021. In recent years, dry bulk freight and Chinese economic growth have become interconnected. Vessel supply and demand, port congestion, oil prices, and the ongoing supply chain disruptions will continue to impact the market as economies normalize post-COVID. However, China remains in the driver's seat of global freight, according to U.S. Wheat Associates. The resilience of the Chinese economy will be put to the test as economic activity increases post-COVID.

Growth in Organic Market Slowing

The organic market has seen continued growth in retail sales in the past decade. However, the pace of growth has slowed, according to USD’s Economic Research Service. U.S. organic retail sales increased by an average of eight percent per year and surpassed $53 billion in 2020. In 2021, sales were $52 billion, which was a six percent annual decline when adjusted for inflation, but a slight increase when not inflation-adjusted. Additionally, the number of certified organic acres operated increased gradually from 3.6 million in 2011 to 4.9 million acres in 2021. The number of certified farms with operating organic acres in the United States nearly doubled over the past decade to 17,400 from about 8,900. Between 2019 and 2021, the number of certified organic farms in the United States increased five percent, while total organic land decreased by 11 percent, driven by a 36 percent decrease in pasture and rangeland.

FMI Encourages FDA to Refine Healthy Definition

The Food Industry Association recently submitted comments to the Food and Drug Administration regarding the agency's proposed rule to update the definition of the term "healthy." The FDA is seeking the update when the term is used as a nutrient content claim in labeling. FMI Chief Public Policy Officer Jennifer Hatcher says. "We are concerned the proposal is too restrictive in scope and could inadvertently lead to consumers avoiding certain foods that are otherwise part of a healthy eating pattern." The comments submitted to FDA explain some FMI members found that their portfolios have gone from 80-95 percent “healthy”-eligible foods, to between three and seven percent healthy eligible foods under the proposed rule. FMI predicts that when taking into account the entire food supply, fewer than five percent of products would qualify. Hatcher adds, “A definition that only allows an exceedingly small number of foods to bear a healthy claim would be counter-productive to the agency’s goal of improving public health.”

Swine Health Center Develops Standard Outbreak Investigation Instrument

The Swine Health Information Center this week announced a standardized outbreak investigation instrument. The new instrument is available for download and use from the SHIC website, and a web-based version will be launched this spring. The downloadable version is a fillable form that, upon completion, could be submitted to a program administrator at Iowa State University, the developer of the tool. Or the form could be used for farm/system outbreak investigations without submitting, but every submission will strengthen the confidential database that can help researchers find industry trends. The new, standardized outbreak investigation instrument was built from an existing investigation tool. Expert input and conversation led to changing some terms and creating additions. Dr. Derald Holtkamp of Iowa State University led the development of the instrument. Holtkamp says, “The reason for doing this remains trying to be better prepared to respond to the introduction of transboundary disease.” Visit swinehealth.org to learn more.

Wednesday Watch List

Markets

Minutes from the Fed's most recent Open Market Committee meeting will be released at 1 p.m. Wednesday, the only significant report on the docket. Due to this week's four-day schedule, the Energy Department's weekly inventory report is pushed to Thursday. Traders will keep close watch over the latest weather forecasts and any outside news, especially as the one-year anniversary of Russia's invasion of Ukraine approaches.

Weather

A long-duration winter storm event continues to produce widespread impacts for much of the country on Wednesday. Showers and thunderstorms are developing across the southeastern Plains through the Midwest, some of which may be severe. A narrow band of heavier snow continues in Wisconsin and Michigan this morning but will broaden out during the day, with a risk of freezing rain from Iowa to southern Michigan. The larger part of the storm is in the Rockies and will increase the snowfall across the Northern Plains into the Upper Midwest throughout today and tonight, leading to heavy snowfall amounts. Winds with the system are increasing and will be strong enough to produce blizzard conditions where the heavy snow falls.

Key Happenings the Newsroom is Tracking for the Week of Feb. 19-25

OMAHA (DTN) -- Here are the Top 5 things the DTN Newsroom is tracking for the week of Feb. 19. Watch for coverage of these and other topics through the week on our subscription platforms as well as on DTNPF.com.

1. USDA Outlook Conference: The annual USDA Ag Outlook Forum is Feb. 23-24. The event is packed with sessions covering major issues in the ag economy, capped by USDA's official economic prognostications early Friday morning.

2. Early week winter waves: Several storm systems will trek across the U.S. this week. DTN Ag Meteorologist John Baranick says the next round begins in the Pacific Northwest Monday night into Tuesday. It is expected to head into the Great Lakes through Tuesday and into Wednesday, bringing snow to the Northern Plains and Great Lakes areas.

3. Dark anniversary: Feb. 24 is, of course, the first anniversary of Russians invasion into Ukraine; the ongoing war continues to influence the global economy, particularly global food security. Look for both reflections on that anniversary mark, as well as the potential real-time market influences from additional fighting in Ukraine.

4. Latest cattle numbers: USDA will release its latest Cattle on Feed report Friday, and the market will watch closely for continued signs of tight supplies. Watch for our preview analysis on Feb. 23.

5. Presidential thoughts: Trading markets are closed today, Feb. 20, as is the DTN newsroom, to mark the President's Day holiday. This year, as we remember the birthday of George Washington as well as Abraham Lincoln and others, many thoughts are with our 39th president, James Earl Carter Jr. The former peanut farmer from Plains, Georgia, who at 98 is the longest-lived U.S. president, entered into hospice care Feb. 18.

Mexican Ban on Some Biotech Corn Underway

Last week, Mexican officials issued a decree calling for a ban on imports of some biotech corn used for certain purposes. That ban began last Friday. The Mexican government also decreed it would continue to allow imports of biotech corn used as animal feed while exploring substitutes. The National Corn Growers Association expressed serious concerns with the accelerated timeline, noting that the administration has been more than patient with Mexico. “Our U.S. officials are seeking to enforce a rules-based trading system and stand up for farmers,” says NCGA President Tom Haag (HAYG). “The integrity of the USMCA, signed by Mexican President Obrador himself, is at stake.” He also says singling out corn, the number one U.S. ag export to Mexico, and hastening an import ban on numerous food-grade uses makes USMCA a dead letter unless it’s enforced. NCGA says Mexico appears to be doubling down on its original intended ban in 2024.

EPA Proposes New Rule for Pesticide Exposure Protection

The Environmental Protection Agency announced a proposed rule that would improve and modernize the pesticide Application Exclusion Zone requirements. Those requirements are part of the 2015 Agricultural Worker Protection Standard, and the agency is proposing to reinstate several provisions from that standard. Among the changes, the revised standard includes a new provision requiring agricultural employers to keep workers and all others out of an area called the Application Exclusion Zone. The AEZ is an area surrounding an ongoing pesticide application. A previous rule change limited the AEZ to 25 feet in 2020. However, the proposed rule will change that to 100 feet for fine sprays. The distances will stay at 25 feet for medium or larger sprays when sprayed from a height greater than 12 inches from the soil surface. The rule change would also apply the AEZ beyond an establishment’s boundaries, and when individuals are within easements on a producer’s land.

EPA Changes Some Dicamba Cutoff Dates for This Spring

The Environmental Protection Agency proposed new restrictions on using over-the-top dicamba herbicides in Illinois, Iowa, Indiana, and South Dakota. The label changes say no spraying on dicamba-tolerant soybeans in Iowa, Illinois, and Indiana after June 12 or the V4 growth stage, whichever comes first. No spraying on DT cotton in Iowa, Illinois, or Indiana after June 12 or first square, whichever happens first. No spraying on DT crops after June 20 in South Dakota. The EPA also said Minnesota’s label requirements remain the same as in 2022. The reaction to the change has not been positive in the soybean industry. Aaron Hager, a University of Illinois weed scientist, told DTN the timing couldn’t have been worse for soybean growers who intend to plant certain varieties. “Most or all seed decisions have been made, and now we have to contend with new cutoffs in the largest soybean states in the U.S.,” he says.

State Attorneys General File Lawsuit Over WOTUS

Montana Attorney General Austin Knudsen (kuh-NOOD-sen) and attorneys general from 23 other states filed a lawsuit against the Biden administration’s Waters of the U.S. Rule. The group says the EPA’s WOTUS rule “goes beyond the power Congress delegated in the Clean Water Act, raises serious constitutional concerns, and runs roughshod over the Administrative Procedures Act.” Knudsen says, “The administration’s water rule limits the use of land and violates the law and U.S. Constitution. The EPA greatly overstepped its authority by trying to claim jurisdiction over land and water not connected to any navigable water.” The attorneys general say they’re fighting to protect farm and ranching operations, mining and energy workers, and infrastructure and housing projects across Montana and the entire country that will be harmed if this overreaching and unconstitutional rule takes effect. Montana and the other states will motion for a preliminary injunction to stop the rule while it’s under litigation.  

The Fertilizer Institute Releases Sustainability Report

The Fertilizer Institute released new data highlighting industry improvements in sustainability performance in key priority areas, including workforce safety, energy, the environment, and innovation. “The industry is continuously working towards more sustainable operations, including efforts to decarbonize and mitigate environmental impacts,” says TFI President and CEO Corey Rosenbusch. Report highlights include survey participants investing an average of more than $1 billion every year in capital investments to help the industry meet sustainability goals. In 2021, the industry captured 31 percent of all CO2 generated per ton of nutrient produced, an increase of 368 percent over emissions captured in 2013. To reduce the industry’s energy footprint, 39 percent of all energy consumed is generated using waste heat rather than pulling from the electrical grid. Nitrogen producers recycled enough water to fill 1.6 million Olympic-sized swimming pools. “Each step of the supply chain is focused on doing more with fewer resources,” Rosenbusch adds.

Growth in Farmland Values Continues

Growth in farm real estate values remained strong but showed some signs of easing alongside higher interest rates. The Kansas City Federal Reserve says the average interest rates on farm loans increased from record lows at the beginning of last year to decade highs by December of 2022. Despite the rapid rise in rates, the value of farmland continued to increase, but at a more tempered pace than earlier in the year. The growth in farmland values has softened most for lower-priced land and in states most heavily affected by drought. Looking ahead, a majority of bankers expect higher interest rates to have a negative effect on farm real estate, and some anticipate a decline in values. Farm finances and credit conditions were supported by strong commodity prices in 2022, and the outlook for 2023 remained positive despite some persistent risks. Higher expenses and adverse weather continue to be concerning.

Tuesday Watch List

Markets

Back from the three-day weekend, traders will be checking the latest weather forecasts and news. A report on U.S. existing home sales in January is due out at 9 a.m. CST, followed by USDA's weekly grain export inspections at 10 a.m.

Weather

A conglomeration of upper-level disturbances are combining to make for a long-duration winter storm across the country this week. The lead piece will create some moderate to heavy snow for the Northern Plains and Upper Midwest Tuesday while a piece in the Southwest moves into the Plains overnight with increasing showers and thunderstorms. Winds are on the increase Tuesday, especially in the southwestern Plains where they may gust over 50 mph and be even stronger Wednesday. Meanwhile, the West continues to be pummeled by heavy precipitation and strong winds as well. 

Partnership to Protect the U.S. from African Swine Fever

A new partnership was put in place at the National Association of State Departments of Agriculture Winter Policy Conference. NASDA, the USDA, the National Pork Board, and the National Pork Producers Council are working together to enhance coordination and preparedness to prevent and protect the United States from African swine fever. “When you bring together state, federal, and industry groups with different strengths to take on challenges, you see a united force of resilience on all fronts,” says NASDA CEO Ted McKinney. “This collaboration will lead to better response to outbreaks and better animal health and welfare across the country.” African swine fever hasn’t currently crossed into the U.S. but being prepared to respond and coordinate prevention methods at all levels better ensures the protection of America’s swine herds. “We all play an important role in keeping American agriculture safe and working together enhances our efforts,” says NPPC President Terry Wolters.

Positive Reaction to Torres Small Nomination

Senate Ag Chair Debbie Stabenow is pleased with the nomination of Xochitl (so-CHEEL) Torres Small to be the new Deputy Secretary of Agriculture at USDA. “As Undersecretary of Rural Development, she gave a voice to the 60 million people who call rural America their home,” she says. “I’ve been impressed with her commitment to addressing challenges in our food supply chain, fighting the climate crisis, and creating good paying jobs in rural America.” The American Farm Bureau Federation also congratulated Torres Small on her nomination. “Her experience with rural America and her time on the House Agriculture Committee give her important perspectives to address the issues facing America’s farmers and ranchers,” says AFB President Zippy Duvall. He also says the organization and its members look forward to working with her to ensure USDA continues to support America’s farmers and their mission to grow safe, affordable food for families across the nation.

U.S. Farm Exports to Drop by 12 Percent Over Three Years

The USDA projected America’s food and agricultural exports will drop by 12 percent through fiscal year 2026. The erosion will be caused by a global economic slowdown, inflation, higher interest rates, and the strong U.S. dollar. Overall economic conditions are projected to slow U.S. exports quicker than imports, leading to a trade deficit. USDA projections show that exports will drop across the board, but grains and soybeans will get hit the hardest. Reduced export volumes will also mean lower commodity prices. But 2027 is expected to show a rebound in exports. Farm exports were forecast at $190 billion this year, dropping to $166.3 billion in 2026, and then rising to $182.2 billion by 2032, the last year of the ten-year baseline. Imports will also slow down but are expected to recover by 2032. Food and ag imports were forecast at $199.1 billion this year and grow to $200 billion by 2032. 

USDA Invests $63 Million in High-Speed Internet for Rural Americans

Ag Secretary Tom Vilsack says USDA is investing $63 million to bring high-speed internet access to people living and working in rural areas of Illinois, Minnesota, Michigan, and Mississippi. “Investing in high-speed internet is a fundamental part of our partnership with rural communities,” he says. “Connecting rural Americans with reliable internet brings new and innovative ideas to the rest of our country.” The $63 million in grants comes from the third round of funding under the ReConnect Program, in which USDA has invested a total of $1.7 billion. Since the program’s beginning, the agency has invested $3.2 billion to bring high-speed internet access to people in rural communities. The funds will be used for one project in each of the four states. To be eligible for ReConnect Program funding, an applicant must serve an area that lacks access to service speeds of 100 megabits per second downloads and 20 Mbps for uploads.

House Ag Chair Comments on CBO Baseline Projections

The House Agriculture Committee completed an analysis of the Congressional Budget Office’s farm bill baseline spending estimates. The analysis shows that compared to anticipated mandatory spending under the 2018 Farm Bill, commodity support program support is expected to decrease by 12 percent, while spending on conservation, nutrition, and federal crop insurance are projected to increase by 19 percent, 82 percent, and 26 percent, respectively. Following the projections, House Ag Chair Glenn “GT” Thompson said the CBO baseline underscores what he’s been consistently hearing from producers around the country. “In light of the record-high input costs and volatile markets and weather, improvements to farm policy are necessary and warranted," he says. "Additionally, the roughly 80 percent increase to the baseline for nutrition programs since the last farm bill was enacted, namely due to the Biden Administration’s careless update to the Thrifty Food Plan, furthers the Committee’s obligation to oversight and accountability.”

John Deere Continues 80-Year Partnership with FFA

John Deere announced a donation of $1 million to the National FFA Organization. The donation will get used to support the growth of future leaders, feed agriculture’s talent pipeline, and honor the organization’s community service efforts. It also builds on the 80-year partnership between John Deere and National FFA. “We are thrilled to continue our partnership with John Deere,” says Molly Ball, president of the National FFA Foundation. “They’ve been unwavering in their support for more than 80 years and continue to see the potential leaders in each one of our members and advisors.” FFA will also be raising funds during Give FFA Day on Thursday, February 23. A donation of any amount from the public will support FFA and agricultural education. It’s a chance to open doors for members to explore their interests and discover fulfilling careers. To get involved or to donate, go to FFA.org on February 23.

Friday Watch List

Markets

There are few government reports other than the Index of Leading Economic Indicators. We will also be watching for any change in South American weather, and any new corn or soybean export sales announced at 8 a.m. We continue to wait for the long-delayed CFTC Commitment of Traders report.

Weather

A system continues to push off the East Coast on Friday. Much of the hazards associated with the system have ended across the primary growing areas and a quieter day is in store. Temperatures behind the system are largely below-normal though some warmth is returning to the Northern Plains and Canadian Prairies.

Biden to Nominate Xochitl Torres Small as USDA Deputy Secretary

President Joe Biden Wednesday announced his intent to nominate Xochitl (So-CHEEL) Torres Small to serve as Deputy Secretary of Agriculture at the Department of Agriculture. The Senate confirmed Torres Small to serve as the Under Secretary for Rural Development on October 7, 2021. Before serving as Undersecretary, Torres Small was a Representative for New Mexico's second congressional district, the fifth largest district in the country. As a United States Representative, Torres Small served as a member of the House Agriculture Committee. Agriculture Secretary Tom Vilsack says of the announcement, "Her expertise will further USDA's mission to advance equity and opportunity in and for rural America," adding, "I am fully confident in Under Secretary Torres Small's ability to excel in this essential role at the Department." Upon the conclusion of Deputy Secretary Jewel Bronaugh’s service with USDA, Kevin Shea, APHIS Administrator and a career public servant with more than 40 years at USDA, will serve as Acting Deputy Secretary. 

Still time to respond to the 2022 Census of Agriculture

Farmers and ranchers still have time to be counted in the 2022 Census of Agriculture, according to USDA’s National Agricultural Statistics Service. Although the deadline for submitting the ag census just passed, NASS will continue to accept completed census questionnaires through the spring to ensure all farmers and ranchers take advantage of the opportunity to be represented in the widely used data. NASS Administrator Hubert Hamer says, "We want all producers to use their voices to help shape the future of American agriculture." NASS will continue to follow up with producers through the spring with mailings, phone calls, and personal visits. Farmers and ranchers are encouraged to complete their ag census online at agcounts.usda.gov or by mail as soon as possible. Federal law mandates that everyone who received the 2022 Census of Agriculture questionnaire complete and return it. The same law requires NASS to keep all submissions confidential. NASS will release the results of the ag census in early 2024.

Wheat Product Inflation Outpaced Food Price Inflation in 2022

Consumer prices for wheat-based products were up substantially in 2022 compared to 2021, as indicated by the Consumer Price Index. USDA's Economic Research Service reports that the prices of various wheat products were up more than ten percent from 2021. The increase outpaced the inflation rate in the broader "all food" category, which was up 9.9 percent, more than double the average increase of the previous decade. The average price level across the cereals and bakery products category was up 13 percent in 2022, well above the previous year's increase of 2.3 percent and more than three times as large as any year in the past decade. Flour prices and prepared flour mixes were nearly 19 percent higher in 2022, far exceeding the average from the previous decade. Commodity prices for wheat were elevated in 2021 and 2022, but the increase in prices for wheat-based consumer products did not fully appear until 2022.

USGC Launches Corn Sustainability Assurance Protocol

The U.S. Grains Council formally launched its Corn Sustainability Assurance Protocol and Sustainable Corn Exports web platform Wednesday. The launch is part of the 20th International Marketing Conference and 63rd Annual Membership Meeting in Savannah, Georgia. The CSAP is a way for U.S. corn producers to provide insights into their sustainable farming practices, continuing to strengthen global sales by highlighting their alignment with increasingly climate-focused markets. The Sustainable Corn Exports web platform complements the CSAP by making it operational. Through the SCE, U.S. corn buyers can issue shipment-specific “Records of Sustainability” to allow overseas corn importers to easily determine and document the compliance of U.S. corn shipments with local sustainability requirements. USGC President and CEO Ryan LeGrand says, “The CSAP is a recognition of farmers’ extraordinary socioeconomic importance, and a way to further improve the appeal of their products with end-users around the world.”

Pork Checkoff Reports 2022 Exports

Exports of pork and pork products surpassed $7.6 billion and 2.6 million metric tons last year. Those exports added $61.26 to the value of each hog marketed and represented 27.5 percent of production, according to the Pork Checkoff. Pork exports finished 2022 on a decidedly upward trajectory as December shipments reached 244,718 metric tons, up 13 percent year-over-year and the second largest of 2022, slightly below November. The year-end export data was a decrease compared to 2021, which was a record year, of 8.5 percent in volume and five percent in value. December exports also trended higher year-over-year to China/Hong Kong, the Dominican Republic, the Philippines and Australia, and set a value record in Central America. The Mexican market is the shining star and leading volume and value destination for U.S. Pork in 2022, with a volume increase of ten percent at 959.7 metric tons and a value increase of 21 percent at $2,034 billion.

John Deere Continues 80-year FFA Partnership with $1 Million Donation

Building on 80 years of partnership, John Deere announced a donation of $1 million to the National FFA Organization. The donation will support the growth of future leaders, feed agriculture's talent pipeline, and honor the organization's community service efforts. John Deere is the longest-running sponsor of the National FFA Organization and continues to advocate for FFA, its members, and advisors. National FFA Foundation President Molly Ball says, "For more than  80 years, they've been unwavering in their support and continue to see the potential leaders in each one of our members and our advisors.” In addition to supporting the organization financially, John Deere also has many employees who are former FFA members or supporters of the organization. As a result, they have one of the country's largest FFA Alumni & Supporters chapters. The chapter will be involved during FFA Week, offering members opportunities to participate in activities promoting FFA and supporting local chapters.

Thursday Watch List

Markets

DTN will be watching the initial and continuing jobless claims, producer price index and housing starts, as well as export sales for corn and soybeans, and any weather changes for South America.

Weather

A system continues to push northeast near the Ohio River on Thursday. A band of snow continues from Nebraska to Michigan while periods of thunderstorms develop near and east of the Mississippi River. Some of these storms could be severe with tornadoes and strong winds.

Consumer Price Index Increases

The Consumer Price Index rose 0.5 percent in January on a seasonally adjusted basis, after increasing 0.1 percent in December, the U.S. Bureau of Labor Statistics reported Tuesday. Over the last 12 months, the all-items index increased 6.4 percent before seasonal adjustment. The food index increased 0.5 percent in January, and the food at home index rose 0.4 percent over the month. Four of the six major grocery store food group indexes increased over the month. The index for other food at home rose 0.7 percent in January. The index for meats, poultry, fish, and eggs increased 0.7 percent over the month, as the index for eggs rose 8.5 percent. The index for cereals and bakery products rose 1.0 percent over the month, while the index for nonalcoholic beverages increased 0.4 percent in January. In contrast, the fruits and vegetables index fell 0.5 percent over the month, with the fresh vegetables index declining 2.3 percent. The index for dairy and related products was unchanged in January.

New Decree by Mexico Allows for Some GM Corn Imports

Mexico officials issued a new decree this week calling for a ban on imports of biotech corn used for certain purposes, effective immediately. The decree also indicated the Mexican government would continue to allow imports of biotech corn used as animal feed while exploring substitutes. Once substitutes are established to satisfy supply needs, all GM corn will be banned. The National Corn Growers Association expressed serious concern with the accelerated implementation timeline. NCGA President Tom Haag says, "Singling out corn – our number one ag export to Mexico – and hastening an import ban on numerous food-grade uses makes USMCA a dead letter unless it's enforced." NCGA continues to call on the Biden administration to initiate a U.S.-Mexico-Canada Agreement dispute settlement panel regarding the issue. The ban, according to NCGA, would be catastrophic for American corn growers as well as the Mexican people, who depend on corn as a major staple of their food supply.

States Considering Grocery Tax Relief

Lawmakers in several states are considering tax relief for consumers at the grocery store. Progressive Grocer reports many starts that charge a grocery tax are working to extend, end or change the charges as a form of inflation relief. Mississippi, home to the highest grocery tax in the nation of seven percent, recently proposed a bill to slash the tax rate in half. A poll of Mississippi consumers found 68 percent favor suspending the grocery tax. Meanwhile, Tennessee Governor Bill Lee has considered another grocery tax holiday following a four-week suspension last year. Lee says, "We should do that again this year, but let's extend it to three consecutive months." Earlier this month, Oklahoma Governor Kevin Stitt proposed to halt the state grocery tax of 4.5 percent. Meanwhile, Missouri lawmakers are considering removal of the one percent grocery tax in the state. Progressive Grocery reports other states are looking at pushing the decision back to municipal governments.

Deliveries of Caloric Sweeteners Rising

Total caloric sweetener deliveries—an indicator of sweetener consumption in the United States—rose by one percent in 2021 to 127.4 pounds per capita, according to USDA’s Economic Research Service. Annual growth in per capita sweetener deliveries had not been observed since 2014 amid the backdrop of a long-term declining trend that started after peaking at 153.7 pounds in 1999. Growth in 2021 was driven by an increase in refined sugar deliveries per capita, the largest component, which were up 1.9 percent in 2021 at 69.8 pounds and the highest since 1995. The growth countered the 1.2 percent decrease in per capita high-fructose corn syrup deliveries to 39.5 pounds. High-fructose corn syrup deliveries, the other major component, have been steadily decreasing since topping out at 65.9 pounds in 1999, driving the long-term decline in total sweetener deliveries. While per capita deliveries of other caloric sweeteners increased by 2.4 percent in 2021, the volumes have been relatively small, historically hovering at 20 pounds.

US Tractor Sales Start 2023 Lower

U.S. ag tractor sales finished January 2023 in the negative, while all segments of ag equipment grew in Canada, according to the latest data from the Association of Equipment Manufacturers. Total U.S. ag tractor unit sales fell for January in all segments except one, with 100-plus horsepower two-wheel-drive tractors growing 22.8 percent. U.S. combine sales, however, continued its growth streak, climbing 132.7 percent year-over-year. In Canada, combine harvesters led sales again, up 179.6 percent, moving 137 units in January. Overall unit sales in tractors finished the month up seven percent. Curt Blades of AEM says, "Most of the trends we're seeing in this month's report continue what we saw throughout most of 2022." Blades adds, "However, the industry-wide growth we see in Canada this month is a pleasant sight, and we hope that trends continue and expands to the U.S. market."

USDA: Al Gore to Keynote Agriculture Innovation Mission for Climate Summit

The Department of Agriculture Tuesday announced Former Vice Preside Al Gore as the opening keynote speaker for the Agriculture Innovation Mission for Climate Summit. The AIM for Climate Summit is scheduled for May 8-10 this year, in Washington, D.C. USDA says the summit will bring together partners to increase and accelerate investment in and support for climate-smart agriculture and food systems innovation. Agriculture Secretary Tom Vilsack says of Gore, "He has been on the forefront of the climate crisis for more than 40 years and is a leader in the international response to combating climate change." Launched at COP26 in 2021, AIM for Climate is an initiative co-led by the United Arab Emirates and the United States that seeks to enable global partnerships and solutions at the intersection of agriculture and climate change. The deadline to submit proposals for these activities is Thursday, February 24. For more details on how to apply, visit the AIM for Climate Summit website.

Wednesday Watch List

Markets

The U.S. Commerce Department's retail sales report for January is due out at 7:30 a.m. CST, followed by the Federal Reserve's report of industrial production in January at 8:15 a.m. The U.S. Energy Department's weekly report of energy inventories will be released at 9:30 a.m. and includes ethanol production. Traders continue to monitor the latest weather forecasts.

Weather

Showers continue to move through the northern Midwest on Wednesday with some stronger winds across the region that are producing blowing snow and some blizzard conditions in the Upper Midwest. A storm system in the Four Corners area will move through the Southern Plains throughout the day. On the northern side of the track, moderate to heavy snow will develop from Colorado through much of Kansas and southern Nebraska. Strong to severe thunderstorms will develop over southern Texas into the Lower Mississippi Valley later in the day.

USDA Unveils Investments for Addressing Water Supply Challenges for Producers in the West

The Department of Agriculture Monday announced new investments and strategies to help farmers and ranchers conserve water, address climate change and build drought resilience in the West. The effort is through the Western Water and Working Lands Framework for Conservation Action to address key water and land management challenges across 17 Western States. The framework includes guidelines for identifying vulnerable agricultural landscapes and 13 strategies to help NRCS state leaders, water resource managers, and producers respond to priority challenges. Guided by this new framework, the WaterSMART Initiative will invest $25 million in three new priority areas and 37 existing priority areas, assisting communities and producers in the West. NRCS Chief Terry Cosby says, “USDA is utilizing this framework and all available tools to deliver assistance that the severity of the water supply challenges in the West demand.” From 2020 to 2022, more than $410 million of annual conservation assistance NRCS provided to producers helped address drought in the West.

Biden Administration Announces IRA Funding for Climate-Smart Agriculture

Agriculture Secretary Tom Vilsack Monday announced funding for agricultural producers and forest landowners to participate in voluntary conservation programs and adopt climate-smart practices. The Inflation Reduction Act provided an additional $19.5 billion over five years for climate-smart agriculture through several USDA Natural Resources Conservation Service programs. NRCS is making available $850 million in fiscal year 2023 for its oversubscribed conservation programs: the Environmental Quality Incentives Program, Conservation Stewardship Program, Agricultural Conservation Easement Program and Regional Conservation Partnership Program. Secretary Vilsack says, "We know that agriculture plays a critical role in the nation's effort to address climate change."  The Inflation Reduction Act funding includes an additional $8.45 billion for EQIP, $4.95 billion for RCPP, $3.25 billion for CSP, and $1.4 billion for ACEP. The increased funding levels begin in fiscal year 2023 and rapidly build over four years. The additional investments are estimated to help hundreds of thousands of farmers and ranchers apply conservation to millions of acres of land.

USDA Accepting Applications for Trade Mission to Japan

USDA’s Foreign Agricultural Service is accepting applications from exporters of U.S. farm and food products for a two-city trade mission to Japan, June 5-8. The trade mission offers U.S. agribusinesses the potential to increase or expand their sales to Japan, one of the United States’ top five agricultural export markets. U.S. exports of agricultural products to Japan exceeded $14.6 billion in 2022. FAS Administrator Daniel B. Whitley says, “This trade mission will help many U.S. agribusinesses establish new business connections with their Japanese counterparts and further expand U.S. agricultural exports to this key Asian market.” Trade mission participants will travel to Tokyo and Osaka, connecting with potential customers and learning first-hand from government and industry leaders about local market conditions. Participants will also visit local retail stores and food manufacturers to round out the program. Applications are due by February 27. Those interested in participating in the trade mission should visit USDA’s FAS website, fas.usda.gov.

NCGA: Higher Renewable Fuel Volumes Good Security, Economy and Environment

The National Corn Growers Association says higher renewable fuel volumes over the next three years would go a long way in improving energy security. Additionally, NCGA says higher volumes would help lower gas prices and reduce greenhouse gas emissions, according to recent comments submitted by NCGA to the Environmental Protection Agency. The Renewable Fuel Standard requires that U.S. transportation fuel contain a minimum volume of renewable fuel each year. NCGA’s comments were in response to EPA’s proposed volume requirements for 2023, 2024 and 2025. NCGA President Tom Haag says, “NCGA supports EPA’s proposal of annual increases in volumes, including an implied conventional biofuel volume of 15.25 billion gallons, and recognition that ethanol plays a critical role in cutting GHG emissions and our energy security.” NCGA also noted that renewable fuel adds more than 20 billion gallons to the nation’s fuel supply annually, lowering consumer costs, creating rural jobs and reducing greenhouse gas emissions by more than 1 billion metric tons since the RFS was enacted.

New Report Predicts Crop Pest and Pathogen Risks

Patter Ag Monday released its new Predictive Ag Report. The report can help corn and soybean farmers make better-informed decisions about managing impactful pests and pathogens, according to the company. Specifically, the report provides information about corn rootworm and sudden death syndrome. Pattern Ag operates the world's largest soil metagenomics database, with more than 200 billion DNA reads. The Predictive Ag Report is an anonymized, aggregated analysis of the Pattern Ag data. Available in print or digital form, the report predicts pest and pathogen risks 12 months in advance with more than 90 percent accuracy. This information can help agronomists and farmers make better-informed pest management decisions when selecting seed varieties or crop protection inputs. Pattern Ag plans to make the Predictive Ag Report available annually to help corn and soybean farmers offset economic losses caused by yield-impacting diseases. Farmers can receive a copy of the report by visiting Pattern.ag.

Fuel Prices Decline Again, Demand Increases

The nation's average gas declined for the second straight week, dropping 7.3 cents from a week ago to $3.37 per gallon. The national average is up 10.9 cents from a month ago and 10.2 cents per gallon lower than a year ago. The national average diesel price fell 7.3 cents last week and stands at $4.52 per gallon. GasBuddy's Patrick De Haan says, “While diesel prices likely have a long way to fall as inventories continue to improve, gasoline prices in some areas have gone up in the last weeks as the transition to summer gasoline is just around the corner.” GasBuddy data shows that gasoline demand has risen for the third straight week, a trend that will likely continue as spring arrives. Also, refinery maintenance season will soon be in full force, likely putting upward pressure on prices. On average, gasoline prices rise between 35 and 85 cents per gallon between March and Memorial Day.

Tuesday Watch List

Markets

The U.S. Labor Department's consumer price index for January is set for 7:30 a.m. CST Tuesday, putting attention back on the likelihood of more rate hikes ahead. Traders will check the latest weather forecasts and pause for a possible export sale announcement at 8 a.m. USDA's Livestock, Dairy and Poultry outlook will be out at 2 p.m.

Weather

A system that developed across the Central and Southern Plains during the overnight will lift northeast today, providing widespread rainfall from northern Texas into Wisconsin. Rainfall with this system could approach up to one inch in areas. Meanwhile, above average temperatures will persist across the Upper Midwest, Great Lakes, and Upper Mississippi Valley today, with temperatures 10-20 degrees above normal.

Key Happenings the Newsroom is Tracking for the Week of Feb. 12-18

Here are the Top 5 things the DTN Newsroom is tracking for the week of Feb. 12. Watch for coverage of these and other topics throughout the week on our subscription platforms as well as on DTNPF.com.

1. Loading up for Louisville: DTN will have several team members at the National Farm Machinery Show in Louisville. Watch for equipment and other updates from the show floor by our Progressive Farmer Senior Editor Dan Miller. We'll also be hosting a series of workshops on site. Ag Meteorologist John Baranick will discuss the latest spring and summer forecast, and Lead Analyst Todd Hultman will give his long-range outlook on the markets. 

Also, next week Progressive Farmer Senior Editor Joel Reichenberger will be reporting from the World Ag Expo in Tulare, California.

2. Tale of two storms: We'll be watching a pair of storm systems rolling across the U.S. during the week, each bringing the chance of snow and hazardous conditions, as well as short-lived cold snaps in northern areas.

3. Summit Series kick-off: DTN followers are familiar with our industry-leading DTN Ag Summit, historically held in December. They'll also likely know we moved to a totally virtual event in 2022 to allow more access to the thought-provoking speakers and presentations. The next step in that is our Ag Summit Series, which will feature several one-day virtual events throughout the year, culminating in the multi-day DTN Ag Summit in December. Our initial Series event, scheduled for Feb. 28, is "Get Set for Spring." 

4. Reports to watch: DTN's commodity analysts team will be watching for further market reaction to crop conditions in South America as well as the potential for yet more escalation in the war in Ukraine. We're also tracking USDA grain export inspections reports on Monday, Tuesday's Consumer Price Index tallies, and Friday's release of the U.S. index of leading economic indicators.

5. And a birthday to note: We're marking the 137th anniversary of Progressive Farmer Magazine, which was Feb. 10 -- a feat we're all pretty proud of around here. If you haven't seen February's "The Art of Planting" issue, with a focus on getting that planter ready for spring.

Another Record Year for Farm Exports

The American agriculture sector posted its best export year ever in 2022. USDA says international sales of America’s farm and food products reached $196 billion. Final trade data from the U.S. Commerce Department showed U.S. ag exports increased 11 percent, or $19.5 billion, from the previous record set in 2021. The value of sales increased in all of America’s top ten ag export markets, including China, Mexico, Canada, Japan, the European Union, South Korea, Taiwan, the Philippines, Columbia, and Vietnam. Sales in seven of the ten countries set new records. The top U.S. commodity exports in 2022 were soybeans, corn, beef, dairy, cotton, and tree nuts. International sales of many products, including soybeans, cotton, dairy, beef, ethanol, poultry, soybean meal, distilled spirits, and distillers’ grains, all reached record values. “Overall, there were 30 markets where U.S. exports exceeded $1 billion in 2022, up from 27 in 2021,” says Ag Secretary Tom Vilsack.

Chicago Fed: 2022 Farmland Values Jumped 12 Percent

The Federal Reserve Bank of Chicago released its quarterly “Ag Letter,” showing that the district saw a strong annual increase of 12 percent in farmland values during 2022. The Fed says although the result may seem like a letdown after the even larger increase in 2021, last year’s annual gain was the second-largest in the past ten years. During the final quarter of 2022, Illinois, Indiana, Iowa, and Wisconsin still had double-digit year-over-year increases in their agricultural land values. But Indiana was the only District state to have an increase larger than the fourth quarter of 2021. Stronger agricultural credit conditions for the District also contributed to farmers’ optimism. The share of the District’s farm loan portfolio assessed as having “major” or “severe” repayment problems was 1.2 percent in the fourth quarter of last year, lower than the share reported in any final quarter since data collection began in 1998.

Senators Ask President Biden to Address Brazil’s Tariff on U.S. Ethanol

Senators Amy Klobuchar of Minnesota and Chuck Grassley of Iowa sent a letter to President Biden urging him to use an upcoming meeting with Brazil’s president to discuss the country’s tax on U.S. ethanol imports. The letter comes after Brazil’s Foreign Trade Chamber reinstated an import tariff on American ethanol shipped to Brazil. The new 16 percent tariff rate, which will increase to 18 percent in 2024, is a sharp departure from the zero percent tariff rate previously shared between the two nations. “Our American ethanol industry should not be subject to prohibitive tariff and non-tariff barriers while Brazilian ethanol producers enjoy duty-free access to our market and biodiesel programs,” the senators said in the letter. “We believe this imbalance in tariffs and access to Brazil’s biofuels program is unwarranted and unfair, and we urge you to discuss this issue with the president directly.” Eight other senators signed on to the letter.

Hurricane Ian Caused Over $1 billion in Damages

A University of Florida report says Hurricane Ian caused just over $1 billion in agricultural production losses. The biggest hits were to the citrus industry, vegetable growers, and melon producers. The new report from the Institute of Food and Agricultural Sciences set the estimated overall production losses at $1.03 billion. That number includes $247.1 million in damages for citrus growers, $204.6 million for vegetable and melon growers, and $195.4 million for the nursery and greenhouse industries. “The main takeaway is that there was a very significant production loss,” says Christa Court, the director of the IFAS Economic Impact Analysis Program. “These are estimates, but some of the crops aren’t at their final harvest stage.” As a result, she also says it remains to be seen what actually happens when they get to that final harvest. The report also estimates that field and row crops sustained $130.2 million in production losses from the hurricane.

The University of Minnesota Progressing on ASF Research

University of Minnesota researchers are at the forefront of successful efforts to work on the African Swine Fever virus. They’re developing and validating a surrogate virus for ASF that will help develop effective mitigation strategies to control the virus and keep it from entering North America. African Swine Fever has devastated pig populations and pork production in countries around the world. The lab is one of only a handful of facilities in the U.S. to have access to the highly contagious ASF virus, and its work represents a major breakthrough in research efforts. In addition to working directly on the African Swine Fever Virus, the surrogate virus is strikingly similar to ASF in terms of its structure and stability. It can be safely used in field studies to help scientists understand more about how the virus is transmitted in real-world conditions and what strategies are effective to prevent its spread.

U.S. Wants Science From Mexico on GMO Corn Ban

Doug McKalip, the new agriculture trade boss in the U.S. Trade Representative’s Office, says he’s given Mexico until February 14 to explain the science behind the country’s planned ban on GMO corn imports. Market Screener says the response will help the agency decide the next steps to resolve the long-running disagreement over Mexico’s biotechnology policies when it comes to agriculture. The next steps could include escalating the dispute settlement process under the USMCA. If it continues, the dispute threatens to disrupt the billions of dollars worth of corn trade between the United States and Mexico. McKalip says Mexico rejected 14 agricultural product traits that were submitted to them, and they didn’t provide any justification. “We want to make sure that they do the science, show their work, and make decisions based upon risk assessments,” he says. U.S. officials recently warned Mexican officials that America may take formal steps under USMCA.

Monday Watch List

Markets

Back from the weekend, traders will follow up news concerning Friday's close call of Russian missiles near NATO territory and any related events in Ukraine, as well as take a look at the latest weather forecasts. USDA's weekly report of grain export inspections is due at 10 a.m. CST. Financial markets may turn quiet Monday afternoon, ahead of Tuesday consumer price index for January.

Weather

A system will develop across the Central and Southern Plains Monday into Monday night, providing widespread rainfall from northern Texas into southern Nebraska. Rainfall with this system will generally remain light, but isolated areas across north-central Texas and south-central Oklahoma could see up to a half inch of rain through Monday night. Meanwhile, above average temperatures will persist across the Northern Plains and Upper Midwest today, with temperatures 10-15 degrees above normal.

Senators Reintroduce Bill to Defend Cattle Producers

Senators Jon Tester, Chuck Grassley, and Mike Rounds reintroduced their “Meat Packing Special Investigator Act” to fight consolidation and enforce the national anti-trust laws. The bill would create the “Office of the Special Investigator for Competition Matters” within the USDA. The office would be made up of a team of investigators that have subpoena power and would be responsible for targeting and preventing anti-competitive practices among large players in the meat and poultry industries. “Anti-competitive behavior in the meat packing industry hurts both consumers and producers,” Rounds says. “Unfortunately, packer concentration in the beef industry today is more consolidated than it was when the Packers and Stockyards Act was first signed into law over 100 years ago.” Only four companies operate 18 of the top 20 beef slaughter facilities in the country. “It’s time we beef up the available tools to protect farm families and folks at the meat counter,” said Grassley.  

Beef Exports Set Records in 2022, Pork Finishes Strong

American beef exports set records for both volume and value in 2022. Despite slowing toward the end of the year, beef exports reached 1.47 million metric tons, two percent above the previous high in 2021. Export value climbed to a record $11.68 billion, 10 percent higher than in 2021 and 40 percent above the previous five-year average. “Last year was a groundbreaking year for American beef’s international presence, with global demand stronger than I’ve seen in all my years,” says Dan Halstrom, President and CEO of the U.S. Meat Export Federation. Pork exports finished lower year-over-year, but the export value was the third-largest on-record. Pork exports were trending higher as December shipments reached 244,718 metric tons, up 13 percent year-over-year and the second-largest of 2022. Higher December numbers pushed 2022 exports to 2.67 million metric tons, 8.5 percent below the previous year. Export value dropped five percent to $7.68 billion.

AFBF Responds to Falling Farm Income Report

While American families are dealing with record-high grocery prices, farm families can expect to see a drop in income during 2023. American Farm Bureau Federation economists analyzed the Farm Income Forecast in their latest Market Intel Report, noting that income will fall 16 percent this year while costs will rise over four percent. “The farm income forecast is a stark reminder that American farmers and ranchers aren’t reaping benefits from higher grocery store prices,” says AFBF President Zippy Duvall. “While some commodity prices are rising, farmers are being hit by circumstances beyond their control, which is why the farm bill is so important and must get passed this year.” Adding to the challenges are rising interest rates and farm-sector debt that will increase by $31.9 billion to a record $535 billion. “Farm bill programs enable farmers to manage the risk and weather the challenges to continue feeding America’s families,” Duvall adds.

Officials to Reintroduce Bill to Expand and Strengthen Local Meat Processing

Representatives Chellie Pingree of Maine and Jim Baird of Indiana, along with Senators John Thune of South Dakota and Sherrod Brown of Ohio, plan to reintroduce legislation to support small meat and poultry processors. The “Strengthening Local Processors Act” will diversify and make U.S. meat processing more resilient by giving local livestock producers more options. “One of the top concerns from livestock producers is difficulty in accessing USDA processing facilities,” Pingree says. “Their livelihoods depend on having somewhere to take their animals, but their options are severely limited in the current system.” The legislation would create a competitive grant program for small and very small establishments, state-inspected facilities, custom-exempt facilities, or new small-scale slaughter facilities to help increase processing capacity and grow resiliency. It will also create two new grant programs for meat processing workforce training. “This legislation will bolster local production and provide education and training,” Brown says.

Brazil Ties U.S. as Top Corn Exporter

The USDA’s Foreign Agricultural Service says Brazil’s 2022-2023 corn exports from October through September of last year are forecast to equal those of the U.S. at 51 million tons. Brazil has seen expanding production and strong exports in the second half of its 2021-2022 marketing year. Brazil’s corn exports have exceeded those of the U.S. only one time, in the drought year of 20112-2013. Since October 2022, Brazil has exported about 25 million tons of corn, far more than the same period in any previous year. U.S. corn exports are off to a slow start. Production in 2022-2023 was smaller than initially expected, and logistical concerns on the Mississippi River made things difficult. In the last several months, Brazil has stepped in to fill some of the gap left by Argentina and Ukraine in supplying the world’s corn. But current export bids for U.S. corn are lower than Argentina and Brazil.

NFU Hosting College Conference on Cooperatives

The National Farmers Union will host the College Conference on Cooperatives in Minneapolis, Minnesota, February 16-19. During the three days, participants will hear from experts in the field of cooperatives, participate in interactive learning activities and workshops, and tour co-ops in the Twin Cities. The event attracts students from across the country and is beneficial to those new to co-ops, as well as those with some previous co-op education. “NFU history is rooted in the cooperative movement, and our future is too,” says NFU President Rob Larew. “The college is a glowing example of the value Farmers Union provides to our members and their communities.” Participants will hear from a variety of speakers from local and national co-ops. The keynote luncheon will feature an address from Megan Rock, the Chief Sustainability Officer and Vice President of Sustainability and Innovation with CHS Inc. Interested students can find out more at nfu.org.

Friday Watch List

Markets

The University of Michigan's index of U.S. consumer sentiment is set for 9 a.m. CST Friday, followed by the U.S. Treasury's report on the January federal budget. Traders will continue to monitor the latest weather forecasts and pay attention to news from outside markets.

Weather

The cold front to a system this week has hung up in the Southeast and will continue to produce showers on Friday. Outside of some spotty showers going through the Northeast, the rest of the country will be dry. It is a little colder than in previous days, but still rather mild for most areas of the country for mid-February.

USDA Releases February WASDE Report

The Department of Agriculture Released the February World Agricultural Supply and Demand Report Wednesday. This month's 2022/23 U.S. corn outlook is for lower corn used for ethanol and larger ending stocks. Corn used for ethanol is reduced 25 million bushels. The season-average corn price received by producers was unchanged at $6.70 per bushel. The soybean outlook projects lower soybean crush and higher ending stocks. Soybean crush is forecast at 2.23 billion bushels, down 15 million from last month on lower domestic soybean meal disappearance and a higher soybean meal extraction rate. The season-average soybean price for 2022/23 is forecast at $14.30 per bushel, up 10 cents from last month. The supply and demand outlook for wheat is largely unchanged this month, with minor revisions to domestic use and ending stocks. The season-average farm price is forecast $0.10 per bushel lower at $9.00, based on prices received to date and expectations for cash prices for the remainder of 2022/23.

USDA: Electric Vehicles Force Ethanol Demand Lower

A new report from USDA's Economic Research Service suggests ethanol demand may decline with the rise of electric vehicles. The Global Demand for Fuel Ethanol Through 2030 report suggests that global gasoline demand is expected to stagnate over the next decade, leaving changes in blend rates as the main determinant for future changes in fuel ethanol demand. After seeing strong growth for several years, U.S. ethanol-based demand for corn has plateaued over the last decade at about 5 billion bushels, or roughly 40 percent of U.S. corn production. Recently, demand for transportation fuels was reduced by the COVID-19 pandemic. Though these markets largely recovered, moving forward, increased adoption of hybrid or electric vehicles and continued fuel efficiency gains will decrease domestic gasoline consumption, which could decrease domestic fuel ethanol demand. These impacts could result in additional unutilized U.S. ethanol production capacity. The 114-page study is available on the Economic Research Service website, ers.usda.gov.

Below Average Runoff Continues for Upper Missouri River Basin

The updated 2023 calendar year runoff forecast for the Missouri River Basin above Sioux City, Iowa, continues to be below average. January runoff in the Missouri River Basin above Sioux City was 1.1 million acre-feet, 134 percent of average. Runoff was above average due to warmer-than-normal temperatures in the upper basin resulting in some snowmelt runoff. Precipitation in January was below normal for most of the upper basin except for southern South Dakota, which saw above-normal precipitation. The 2023 calendar year runoff forecast above Sioux City is 21.1-million-acre feet, 82 percent of average. The runoff forecast is based on current soil moisture conditions, plains snowpack, mountain snowpack, and long-term precipitation and temperature outlooks. At the start of the 2023 runoff season, which typically begins around March 1, the total volume of water stored in the Missouri River Mainstem Reservoir System is expected to be 46.0 million-acre-feet, 10.1 million below the top of the carryover multiple-use zone.

NAEDA Launches Membership Engagement Platform

The North American Equipment Dealers Association recently announced the launch of its new members-only dealer engagement platform, NAEDA Community. The social and communications platform will provide a central place for dealers to connect, collaborate, learn, and share. NAEDA was formed in 2022 with the recent merger of the Equipment Dealers Association, the Midwest-SouthEastern Equipment Dealers Association, the United Equipment Dealers Association and the Western Equipment Dealers Association. With this merger now firmly in place, NAEDA is looking to enhance its communications efforts with its 4000+ dealer members across North America. NAEDA CEO Kim Rominger says, “We are confident this exciting communications tool will drive engagement, help us promote our programs and services and improve the member experience with our association." NAEDA members can find the community at www.naedacommunity.com. Dealers are encouraged to share the NAEDA community with the rest of their organization so they can have the opportunity to sign up and stay connected.

ARS Scientists Improve Nutrients and add Value to Rice Crop

Rice, already the primary staple for half the world’s population, is getting a makeover from a research team in New Orleans, Louisiana. The results are a more healthful grain and many potential new products. The team, based in the Agricultural Research Service’s Southern Regional Research Center, is making rice a more valuable commodity by developing new technologies that capitalize on the grain’s natural health benefits. Research chemist Stephen Boue says, "We're interested in processing treatments that enhance resistant starch and other bioactive components." Studies are underway to determine Bioactive compound's role in the prevention of cancer, heart disease, and other diseases. One such development is a rice variety that is more beneficial to human health. Rice contains 76–78 percent starch, and cooked rice typically contains one or two percent of starch that resists digestion, but the newer rice varieties have eight to ten percent resistant starch, or more. Resistant starch is not digested in the small intestine; rather, it passes through to the large intestine, where it ferments and produces beneficial metabolites.

Price of Chicken Wings Easing in Time for the Big Games

Retail prices for chicken wings have been trending lower in recent months and in time for national sporting events such as the upcoming Super Bowl and the college basketball championship tournaments. Previously, a combination of limited supplies and strong demand led to a historic runup in wholesale and retail prices. Wholesale chicken wing prices reached a peak of $3.25 per pound in late May 2021, but retail prices continued to climb. At the start of the 2022 March Madness basketball tournament, the national average retail feature price was estimated at $4.29 per pound. Nearly a year later and just ahead of the 2023 Super Bowl and basketball tournament, the national average feature price is down nearly $1.70 per pound to $2.62, according to USDA’s Economic Research Service. The average wholesale price in December 2022 was 89 cents per pound, down more than $2.50 per pound from the 2021 peak.

Thursday Watch List

Markets

USDA's weekly export sales report will be out at 7:30 a.m. CST Thursday, the same time as weekly U.S. jobless claims and an update of the U.S. Drought Monitor. At 9:30 a.m., the U.S. Energy Department will release its weekly report of natural gas storage. Traders will continue to keep an eye on South American weather and will pause at 8 a.m. to see if USDA has a new export sale. Outside markets continue to monitor corporate earnings season.

Weather

A storm system moving through the Midwest is bringing a wide band of precipitation through the region on Thursday, including a wintry mix on the backside that will lead to some moderate snow accumulation from northern Missouri through southern Wisconsin. Winds are increasing around the system as well as out in the Plains where an upper-level trough is moving in behind the system, bringing somewhat cooler air. Southeastern areas will see a cold front hang up with more showers continuing there as well.

Farm Sector Profits Forecast to Fall in 2023

USDA's Economic Research Service released the February Farm Income Forecast Tuesday. Net farm income, a broad measure of profits, is forecast at $136.9 billion in calendar year 2023, a decrease of $25.9 billion, or 15.9 percent, relative to 2022. After adjusting for inflation, net farm income is forecast to decrease $30.5 billion, or 18.2 percent, in 2023. Despite the expected decline, net farm income in 2023 would be 26.6 percent above its 20-year average of $108.1 billion in inflation-adjusted dollars. Net cash farm income is forecast at $150.6 billion in 2023, a decrease of $39.4 billion, or 20.7 percent, relative to 2022. Cash receipts from the sale of agricultural commodities are forecast to decrease by $23.6 billion from a forecast record high of $543.4 billion in 2022 to $519.9 billion in 2023. Also contributing to the forecast of lower income in 2023 are lower direct Government payments and higher production expenses. Average net cash farm income for farm businesses is forecast to decrease 17.7 percent from 2022 to $92,400 per farm in 2023.