NPPC Releases Q3 Economic Update

The National Pork Producers Council released its third-quarter pork industry economic update covering the top pork industry issues, current trends, and marketing issues impacting U.S. farmers. Among the biggest takeaways, California’s Prop 12 creates significant challenges and market uncertainty for pig farmers across the country and has far-reaching implications beyond the pork industry. High production costs continue to be a major challenge to pig farmers’ profitability. The average cost and breakeven levels are nine percent higher than a year ago and have risen 60 percent in the last three years. Hog slaughter and pork production increased an estimated 1.2 percent and 0.3 percent respectively through mid-July 2023. USDA now says pork production will increase 1.4 percent this year, while domestic pork availability is expected to drop 2.5 percent to 49.8 pounds per capita for this year. “Despite the challenges, our pork industry is incredibly resilient,” says Scott Hays, NPPC President.  

Legislation Would Target Farm Payments Where Needed Most

Senators Chuck Grassley (R-IA) and Sherrod Brown (D-Ohio) introduced legislation to rein in abuse of the farm payment system and ensure support goes to those actively engaged in farming. The “Farm Program Integrity Act” would create a hard cap of $250,000 in total commodity support for any one farm operation and require beneficiaries of the system to spend at least 50 percent of each year engaged in farm labor or management. Currently, just ten percent of farm operations receive 70 percent of all yearly farm payment subsidies. “It isn’t right to send bloated farm payments to people who are more familiar with an office chair than a tractor seat,” says Grassley. “This bill brings honesty to the farm payment system and prioritizes farming families over mega-farms.” Brown also says, “Too often, farm program payments have gone to producers who don’t need support or to people who aren’t even involved in farming.”

Rabobank Issues Quarterly Hog and Pig Update

The latest Rabobank quarterly pork report shows global pork markets are being influenced by sluggish economic growth, weak consumption, and recurrent disease outbreaks. After a strong first half of 2023, global trade is expected to weaken in the months ahead. Despite lower food prices, production costs should remain above pre-COVID levels. The first-half strength was driven by an increase in Chinese imports. Sales in the Philippines saw a major decline. Japan, another major U.S. pork importer, saw flat trade, with a slight shift in sourcing pork from Europe to the U.S. The EU and United Kingdom pork supply dropped in the first four months of 2023, with some countries seeing declines at double-digit rates. Sluggish economic growth has been impacting pork consumption around the world. But pork is still cheaper than beef and premium seafood and more expensive than poultry, so it holds a relatively stable position on consumers’ palates.

Farmers, Ranchers Storm Capitol Hill Opposing EATS Act

The Organization for Competitive Markets and the Competitive Markets Action led several organizations on a trip to Capitol Hill to oppose the EATS Act. The groups say the Ending Agricultural Trade Suppression Act via the farm bill would eliminate hundreds of state agricultural laws, effectively paving the way for even more foreign intrusion without safety measures in place. The absence of these rules, especially those that support family farms and ranches, would mean Chinese corporations like Smithfield Foods could easily expand into all 50 states. The groups support the OFF Act, or “Opportunities for Fairness in Farming.” The OFF Act would create a system of checks and balances within USDA’s Commodity Checkoff Programs, prohibit checkoffs from utilizing taxpayer dollars to lobby against farmers’ best interests and prohibit disparagement of one product by another. The groups say that practice has long allowed the federal government to pick winners and losers in the marketplace.

CNH Industrial Net Income Jumps 35 Percent

CNH Industrial reported Q2 consolidated revenues of $6.57 billion, eight percent higher than the same quarter in 2022. The company’s net income totaled $710 million and Adjusted Net Income was $711 million. Net cash used by operating activities totaled $139 million and Industrial Free Cash Flow generation hit $386 million in the second quarter of this year. Net sales for industrial activities hit $5.95 billion, up $341 million compared to the second quarter of last year. The company saw significant improvements in Gross Profit Margin for the Agriculture and Construction segments. A release from the company says, “The CNH Industrial team delivered great results in Q2 as we capitalized on favorable market fundamentals and solid operational execution. Our Agriculture segment set margin records, and for the first quarter in the company’s history, Construction net sales surpassed $1 billion. We are transforming the business and expanding our technology investments to drive growth.”  

Export Sales of Corn, Soybeans, and Wheat Rise

A report says corn, soybean, and wheat export sales all rose week-to-week during the seven days ending on July 20. USDA data says corn sales during the week rose 33 percent from the previous week to 314,000 metric tons, 15 percent higher than the previous four-week average. Mexico was the biggest buyer at 175,900 metric tons. For the next marketing year beginning on September 1, sales hit 335,800 metric tons. Soybean sales were noticeably higher from the previous week and surged 73 percent higher than the previous four-week average. Sales totals for 2023-2024 totaled 544,6000 metric tons, with China as the biggest buyer at 275,000 metric tons, followed by Mexico’s 70,300 metric tons and Egypt at 63,000 metric tons. Wheat export sales of 233,200 metric tons for the 2023-2024 marketing year were up 37 percent from the previous week. However, that total was down 17 percent from the prior four-week average.

Top 5 Things to Watch - Temperatures Cool, Heat Effects Linger on Crops, Congress and Markets

OMAHA (DTN) -- Here are the Top 5 things the DTN Newsroom is tracking for the week of July 30. Watch for coverage of these and other topics through the week on our subscription platforms as well as on DTNPF.com.

1. Heat brings feedlot deaths: The weekend saw scattered reports of cattle deaths from feedlots in Nebraska and other sweltering states. Numbers, while devastating locally, seemed to not be at the level to move market prices. We'll monitor those areas.

2. Welcome cooling: Scattered rains late last week and into this week bring a slight cooling to major cropping areas. Monday's USDA weekly Crop Progress Report will give a look at crop condition going into those rains, we'll watch through the week for signs of improvement. For our latest thoughts on weather and markets, 

3. Ukraine watch: Markets so far have calmed following the crumbling of the Ukraine grain deal and subsequent shelling of the Odesa grain port. But at some point, the bushels missing in the global grain bin could regain traders' attention, noted DTN Lead Analyst Todd Hultman. 

4. Recess lights dumpster fire on House playground: With Congress taking summer recess without passing an appropriations bill, the scene is set for another government shutdown threat come September. It bears watching whether the time back home soothes divisions or whether hanging with the base simply throws gas on this smoldering dumpster fire. 

5. Reports to watch: In addition to Monday's Crop Progress report, there is a stream of business and economic news coming throughout the week. On Tuesday the latest world manufacturing indices come out at 9 a.m. CDT. Latest NASS Fats and Oils report hits at 2 p.m. that day. The Energy Department's weekly energy inventories is released at 9:30 a.m. on Wednesday. Thursday morning, we'll watch USDA's weekly export sales report, U.S. weekly jobless claims, second-quarter U.S. productivity and an update of the U.S. Drought Monitor, all due out at 7:30 a.m. The latest (June) report on U.S. factory orders is at 9 a.m.; the U.S. Energy Department natural gas storage numbers hit at 9:30 a.m. Then, Friday sees Labor Department reports on nonfarm payrolls and U.S. unemployment at 7:30. We'll also gear up for the sixth DTN Digital Yield Tour, powered by Gro Intelligence, which kicks off the week of Aug. 7. 

Monday Watch List

Markets

Back from the weekend, traders will remain focused on changes in weather and events from Ukraine. As usual, USDA's weekly report of export inspections is set for 10 a.m. CDT Monday, followed by the Crop Progress report at 3 p.m. Monday being the final day of July is also first notice day for August soybean and soy product futures.

Weather

A frontal boundary has stalled out from the Central Plains to the Tennessee Valley on Monday. South of the front, it remains hot with stressful conditions for both crops and animals. The front will be a focus for showers and thunderstorms throughout the day, as will a weak system sliding south along the Mississippi River. Yet another system moving through the Canadian Prairies will keep that area and the Northern Plains a bit active as well.

New Jersey Signs Gestation Crate Legislation

New Jersey Governor Phil Murphy signed a bill into law that bans crates used to confine mother pigs and calves. The bill requires the state’s Department of Agriculture to update humane standard regulations allowing the animals to move more freely and turn around. A coalition including the Humane Society of the U.S. and the Animal Legal Defense Fund included over 60 businesses, environmental organizations, and animal protection groups in pressing the case. They said this kind of measure enhances public health, promotes food safety, and reduces animal suffering on “factory farms.” They also point out that numerous scientists and a landmark United Nations report on pandemic risks have noted that the extreme confinement of farm animals is one of the top drivers of diseases transmitted from animals to humans and the spread. “Now, we can properly address both animal misery and public health risks,” says Elissa Frank, N.J. HSUS State Director.  

Partnership to Combat Misinformation on Animal Agriculture

The Animal Agriculture Alliance and the National Institute for Animal Agriculture have partnered to combat misinformation about animal ag. The combination will maximize their areas of expertise to ensure sound scientific information about animal agriculture is getting communicated effectively to key audiences. As part of the relationship, NIAA will serve as a resource for scientific research and educational expertise. The AAA will work to communicate this information to key audiences. “This partnership will give us greater access to technical experts to make sure we’re communicating accurate, science-backed, and expert-supported information to these audiences,” says Hannah Thompson-Weeman, Alliance President and CEO. JJ Jones, NIAA executive director, says, “Working alongside the AAA means we are positioned to better support the animal agriculture community in communicating science while combating misinformation.” The partnership will entail coordinating media responses on technical issues with third-party expertise and hosting regular issue updates with key stakeholders from each organization.

Cattle Producers Direct Action on Cell-Cultured Products

Members of the National Cattlemen’s Beef Association passed a directive to continue advocating for transparent labeling and inspection of cell-cultured protein products. While NCBA President Todd Wilkinson says cattle producers aren’t afraid of competition, he knows that consumers will continue choosing real high-quality beef over cell-cultured imitations. “Our priority is ensuring that consumers know the difference between real beef and cell-cultured products through transparent and accurate labeling,” Wilkinson says. “We have already been successful at encouraging the USDA to conduct robust inspections and oversight to protect food safety.” The directive was brought forward by the Tennessee Cattlemen’s Association, California Cattlemen’s Association, and the Florida Cattlemen’s Association and passed during the NCBA’s summer business meeting. All policies passed at the meeting get forwarded to NCBA’s general membership for a full vote this fall. Earlier this year, the USDA’s Food Safety and Inspection Service issued two grants of inspection to cell-cultured chicken imitation products.

NCGA Videos Tell Farm Bill Stories

The National Corn Growers Association released a video series featuring corn growers from around the nation telling their stories about how the farm bill affects each of their operations. The videos were unveiled at Corn Congress, which was recently held in Washington, D.C. The series features four farmers from Pennsylvania, Texas, Kansas, and Ohio. These NCGA members shared the importance of crop insurance, trade, farm safety net programs, and USDA’s conservation programming. Brooke Appleton, NCGA vice president of public policy, says the project’s goal is to help directly communicate with policymakers and their staff about the importance of the farm bill to corn growers and their families. “Nearly half of all House members weren’t around during the 2018 Farm Bill debate,” Appleton says. “We’ve known for some time that new member education would be key to our comprehensive advocacy efforts on the farm bill.” Check out the videos at ncga.com.

Biotechnology Organization Lists Farm Bill Priorities

The Biotechnology Innovation Organization says the next farm bill offers opportunities to invest in long-term food security, climate resiliency, and growing the national bio-economy. The group has submitted recommendations to the agriculture committees in both chambers of Congress as they work on writing the new legislation. “A farm bill centered on innovation stands to incentivize the adoption of cutting-edge technologies and practices, resulting in benefits to the environment and rural economies,” says Beth Ellikidis, BIO’s vice president of agriculture and environment. Among their recommendations, they say they’d like increased funding for the Biobased Markets or BioPreferred Program, which directs federal agencies to increase their biobased and renewable product purchases. They’d like to see Congress increase funding and make administrative improvements to the federal program to help build or retrofit facilities to produce advanced biofuels, renewable chemicals, and other biobased products. Among several other recommendations, BIO wants streamlined regulations for biotechnologies.

House Bill Would Help Farmers and Ranchers Combat Drought

Congresswoman Yadira (Yah-DEER-ah) Caraveo (Care-ah-VEY-oh) (D-CO) introduced a bill that would help family farmers and ranchers fight drought. The Voluntary Groundwater Conservation Act gives farmers and ranchers the flexibility they need to protect groundwater sources while also keeping agricultural lands in production under a new voluntary groundwater easement program. The legislation comes as aquifers in the Western U.S., a crucial source of water for rural communities and farmers, are in decline. The bill creates a new Groundwater Conservation Easement Program at USDA to encourage voluntary, compensated reductions in groundwater consumption on agricultural land and advance local, regional, or state groundwater management goals. Additionally, it will guarantee long-term management flexibility for a producer to continue farming and choose how they reduce water use, as long as they conserve the amount they’ve committed to reducing. Producers would also get paid based on the market value for the water right instead of per acre.

Friday Watch List

Markets

The U.S. index of personal consumption expenditures, an inflation gauge for June, is due out at 7:30 a.m. CDT Friday, the same time as U.S. personal incomes and consumer spending for June and the Labor Department's employment cost index for the second quarter. The University of Michigan's final index of consumer sentiment for July follows at 9 a.m. For grain traders, weather and events in Ukraine remain high on the list of interest.

Weather

Heat continues to envelop most of the U.S. on Friday, stressing areas with inadequate moisture. But the northern edge of the heat continues to be a good place to produce showers and thunderstorms. That is especially true with a cold front across the Northern Plains and Upper Midwest slowly sagging southward. Strong to severe thunderstorms are expected this afternoon and evening in and around Iowa and extending east through the southern Great Lakes in a couple of waves. Any rainfall will be welcome to limit the effects of the heat during a critical time for corn and soybean development.

USDA: Food Inflation Mostly Lower in 2023 Compared to 2022

Retail food prices increased 4.8 percent in the first six months of 2023, lower than the rate of midyear inflation in 2022, of 8.2 percent. USDA’s Economic Research Service reports the 20-year average for midyear inflation from 2002 to 2021 was 1.6 percent. All food categories except for sugar and sweets experienced smaller price increases through the first half of 2023 compared with the same period in 2022. Prices for eggs increased the most, 13.7 percent, so far in 2023, followed by fats and oils and cereals and bakery products. All food categories increased in price in the first six months of 2023 compared with 2022, but the increases for meats, fresh fruits, fish and seafood, and fresh vegetables, were below their historical average price increases. Inflationary pressures and trends differ by food category. Prices will continue to change during the remainder of 2023, according to USDA, and may affect the annual inflation rate.

Global Shocks Disproportionately Hurt Farmers

Global shocks over the past few years have created an unprecedented “polycrisis” that has disproportionately hurt small-scale farmers and people living in food-deficit countries. The data comes from a new report commissioned by Farm Journal Foundation. The COVID-19 pandemic, conflicts including the Russia-Ukraine war, and climate change have created far-reaching impacts across global food systems, affecting food, fertilizer, feed, fuel, and financing available to producers. The resulting polycrisis has left humanity vulnerable to future “black swan” moments that could have even more severe and far-reaching consequences for global food supplies. One of the researchers says, “Already, millions of smallholder farmers and their families were teetering on the edge of survival due to long-term structural challenges, and this polycrisis has pushed countless into disaster.” To alleviate global food insecurity, the report says the U.S. should invest more in international agricultural research and innovation. More research is needed across climate change adaptation and mitigation, soil health and nutrient management, crop diversity and nutrition, access to markets and finance, supply chain infrastructure, and local capacity building.

Ag Groups Reject Anti-checkoff Legislation

Agriculture checkoff groups jointly announced opposition to legislation they say attacks commodity checkoff programs. An Amendment by Representative Victoria Sparts, a Republican from Indiana, would prohibit USDA from using any tax dollars to administer commodity Checkoff programs. The National Cattlemen's Beef Association, American Soybean Association, National Pork Producers Council, and National Milk Producers Federation, along with the Indiana Beef Cattle Association, jointly voiced opposition to the effort. NCBA Policy Division Vice Chair Tim Schwab, an Indiana cattle producer, says, "Representative Spartz's amendment targets programs like the Beef Checkoff and is a direct attack on America's farmers and ranchers." The groups say the legislation is "frivolous" as "no taxpayer dollars are being used to administer Checkoff programs." USDA oversees 22 commodity Checkoff programs that boost demand for products like beef, eggs, lamb, cotton, blueberries, honey, mangos, peanuts, mushrooms, watermelons, dairy, cotton, popcorn, and even Christmas trees. Farmers and ranchers invest in these programs, and that funding supports agricultural research and promotional efforts.

Growth Energy Sides with EPA in Lawsuit

Growth Energy recently filed an amicus brief in the U.S. Court of Appeals for the District of Columbia Circuit in The San Antonio Refinery, LLC, v. U.S. Environmental Protection Agency. The case pertains to a group of refineries seeking to avoid complying with the Renewable Fuel Standard, which requires oil refiners to blend a specific amount of biofuels into their fuel each year. The petitioning refineries allege that the EPA's "Alternative RIN Retirement Schedule for Small Refineries"--an adjustment made to allow refineries to meet their RFS obligations over an extended period of time--did not go far enough and should have allowed the refineries not to comply with the RFS at all. Growth Energy's amicus brief reiterates the fact that the oil industry continues to look for ways to avoid complying with the RFS. Growth Energy CEO Emily Skor says, "The oil industry should stop playing the victim and get on board with the most successful climate policy enacted to date."

USDA Continues Field Evaluation of Oral Rabies Vaccine

USDA’s Animal and Plant Health Inspection Service Wednesday announced it will continue field evaluation of the oral rabies vaccine bait ONRAB in eight states. The effort is part of a larger-scale rabies prevention effort and will assess distribution methods and effectiveness in raccoons, skunks, and other wildlife. Beginning in late July, APHIS and cooperators will distribute approximately 3.5 million vaccine baits in parts of Vermont, New Hampshire, Maine, New York, Ohio, Pennsylvania, and West Virginia to test the immune effects in targeted wildlife. During October, APHIS also will distribute vaccine baits in parts of Tennessee. The vaccine bait is a blister pack filled with the vaccine and coated with a sweet attractant. When an animal bites into one of the baits, it will release the vaccine into their mouth and, with an adequate dose, develop immunity to rabies. Humans and pets cannot get rabies from contact with the bait but are asked to leave the bait undisturbed if they encounter it.

USDA Launches Pilot to Increase Affordable Homeownership on Tribal Lands

USDA Wednesday announced it is launching two pilot programs to increase affordable homeownership opportunities for people on Tribal lands. USDA Rural Development Acting Under Secretary Roger Glendenning says, "The assistance I'm announcing today will help people across this nation have the resources they need to build, purchase or repair homes in Tribal communities." USDA is launching the Tribal Property Valuation Pilot Program. It provides approved lenders the opportunity to obtain desktop appraisals for mortgage transactions on Tribal land. This program will help decrease the cost and eliminate potential inaccuracies of appraisal reports completed on properties located on Tribal land. The Department is also launching the Tribal Rehabilitation Pilot Program to help people remain in safe and improved housing on Tribal lands and improve their quality of life. Many homes on Tribal lands have been passed on from one generation to the next and need renovations to make them safe and bring them up to current codes. Funds under this program may be used to finance repairs to these homes.

Thursday Watch List

Markets

USDA's weekly export sales will be released at 7:30 a.m. CDT Thursday, the same time as weekly jobless claims, U.S. durable goods orders for June, a report on second-quarter U.S. GDP and an update of the U.S. Drought Monitor. The Energy Department's weekly report of natural gas storage follows at 9:30 a.m.

Weather

A hot ridge continues to dominate the U.S. with widespread heat and humidity causing stress to anything living outside. The northern edge of the ridge continues to be an active place with thunderstorms expected to develop across the Corn Belt, some of which may be significantly severe across the Upper Midwest Thursday afternoon and evening. A cold front has worked itself through Canada and will bring relieving temperatures from north to south in the coming days.

USDA Introduces Data to Show Crop Rotation Patterns

The Department of Agriculture Tuesday unveiled a geospatial product called Crop Sequence Boundaries that offers national-scale visual crop rotation data for the first time. Crop Sequence Boundaries, or CSB technology, is a cutting-edge map of agricultural fields that provides crop acreage estimates and historical planting decisions across the contiguous United States. The open-source product uses satellite imagery and other public data to allow users to analyze planted U.S. commodities, enhancing agricultural science and research and providing producers an innovative resource to help make farming decisions. The new tool was developed by USDA's National Agricultural Statistics Service and Economic Research Service, two of the department's statistical scientific research agencies. CSB incorporates technological advances in satellite imagery and high-performance cloud computing with Google Earth Engine. It is one of several tools that NASS and its partners have developed to support agricultural analyses and make data more accessible and valuable to the public. Access CSB at nass.usda.gov.

USDA Announces Emergency Rural Health Care Grants

The Department of Agriculture Tuesday announced Emergency Rural Health Care Grant recipients. Deputy Secretary Xochitl Torres Small made the announcement in Charlottesville, Virginia. The funds will expand access to health care for more than five million people living in 39 states and Puerto Rico. Torres Small says, "USDA's Emergency Rural Health Care Grants are helping strengthen rural America's health care infrastructure to build for the future." USDA is awarding $129 million to improve healthcare facilities in rural towns nationwide. These grants will help 172 rural healthcare organizations expand critical services. The investments will help regional partnerships, public bodies, nonprofits and Tribes solve regional rural healthcare challenges. For example, in the Midwest, Southern Illinois Hospital Services is partnering with local healthcare organizations to build an in-patient psychiatric unit to address a regional need to expand access to mental healthcare services for people in Southern Illinois. Find a list of grant recipients at USDA.gov.

U.S. Egg Production Increased in June

United States egg production totaled 9.08 billion during June 2023, up four percent from the same time last year. USDA’s monthly Chicken and Eggs report shows production included 7.78 billion table eggs, and 1.3 billion hatching eggs, of which 1.2 billion were broiler-type and 95.8 million were egg-type. The average number of layers during June 2023 totaled 387 million, up five percent from last year. June egg production per 100 layers was 2,348 eggs, down one percent from June 2022. Total layers in the United States on July 1, 2023, were 386 million, up five percent from last year. The 386 million layers consisted of 317 million layers producing table or market-type eggs, 65.0 million layers producing broiler-type hatching eggs, and 3.69 million layers producing egg-type hatching eggs. Rate of lay per day on July 1, 2023, averaged 78.5 eggs per 100 layers, down one percent from July 1, 2022.

Bayer Lowers Outlook on Reduced Glyphosate Sales

The Bayer Group adjusted its full-year outlook for 2023 downward this week, mainly due to a significant further decline in sales of glyphosate-based products. For full-year 2023, Bayer now anticipates sales of between 48.5 billion and 49.5 billion euros, or roughly $54 billion in U.S. funds. The company also adjusted its forecast for core earnings per share to between 6.20 and 6.40 euros, which was previously forecasted at 7.20 to 7.40 euros. Bayer already guided towards the lower end of its Group sales and earnings forecast for this year. Further price declines and lower volumes due to channel de-stocking, especially for glyphosate-based products, as well as adverse weather conditions, have increased pressure. Based on the anticipated market development, in particular with respect to the glyphosate business, Bayer also expects to record a goodwill impairment of approximately 2.5 billion euros. This will result in negative Group net income of approximately two billion euros for the second quarter of 2023.

AFIA Accepting Nominations for Friend of Pet Food Award

The American Feed Industry Association is now accepting nominations through August 28 for its annual Friend of Pet Food Award. Launched in 2019, the award recognizes individuals who have made significant contributions to support the growth of the pet food industry. Louise Calderwood, AFIA director of regulatory affairs, says the award “recognizes the tireless efforts of those committed to ensuring the well-being and happiness of our furry friends through cutting-edge nutritional discoveries.” An ideal nominee will be currently employed and active in the pet food industry or an associated area, such as new product development, transportation, regulatory, academia, media or promotion. There is no restriction by company or industry affiliation, or the function performed by the nominee. The award winner will be invited to attend the 2024 AFIA Pet Food Conference , which is being held in conjunction with the International Production & Processing Expo in Atlanta, Georgia, in January. To nominate someone, visit afia.org.

RFA Safety Programs Win National Awards

The Renewable Fuels Association’s nationally recognized safety programs have been honored with their 11th consecutive National Achievement Award from the Transportation Community Awareness and Emergency Response, a national hazardous materials safety coalition. RFA's Director of Safety and Technical Programs, Missy Ruff, received an Individual Recognition Award for her efforts. More than 12 years ago, RFA created comprehensive training programs for first responders and other stakeholders on the topics of ethanol safety and emergency management. RFA President and CEO Geoff Cooper says, "The ethanol industry continues to maintain an impeccable safety record, which is a direct result of RFA's ongoing safety efforts." In 2022, more than 1,200 attendees were trained via 37 training opportunities supported by RFA. Since its inception in 2010, RFA's safety program has been responsible for training over 15,000 individuals and conducting over 400 training sessions and events. RFA has trained individuals from all 50 U.S. states and 40 other countries.

Wednesday Watch List

Markets

U.S. new homes sales will be out at 9 a.m. CDT Wednesday, followed by the Energy Department's weekly energy inventories at 9:30 a.m. The Federal Reserve announcement is scheduled at 1 p.m., followed by a press conference with Fed Chairman Powell. Traders remain focused on the latest weather forecasts and on Russia's attacks on Ukraine.

Weather

A system moving through Canada is providing enough energy across the northern Corn Belt for thunderstorm development early Wednesday from Minnesota into Wisconsin. A little disturbance with these thunderstorms will continue eastward Wednesday, which may turn into more severe clusters across the Great Lakes later in the day. Additional storms may develop in the Northern Plains and Canadian Prairies as well. All of this activity is coming on the northern end of a ridge of heat that continues to spread throughout the U.S. with significantly hot temperatures.

Legislation Would Exempt Farms From Emission Reporting

A group of lawmakers last week introduced legislation to exclude reporting of routine emissions from livestock farms to state and local emergency response authorities. The National Pork Producers Council supports the legislation. Pork producers and other livestock industries have engaged with federal and state regulators for decades over permitting and reporting of air emissions. This engagement has included both the air consent agreements that many producers signed, exempting them from having to file emergency reports to first responders. In 2018, Congress permanently exempted livestock farmers from having to report emissions under the Superfund law to the U.S. Coast Guard’s National Response Center. At the same time, EPA exempted those same farms from making similar reports to state and local first responders. Following litigation, the Biden Administration agreed to re-open that rulemaking to reconsider the exemption from the emergency release reporting rule. The new legislation would clarify that the 2018 Farms Act, and EPA’s prior regulations, were correct and that livestock farms should not be required to inundate local fire departments with emission reports.

USDA Invests in Research, Extension and Education at 1890 Land-grant Universities

The Department of Agriculture announced Monday an investment of more than $33 million to support capacity-building efforts at 1890 Land-grant Universities. The investment, administered through USDA’s National Institute of Food and Agriculture, will support 82 research, Extension, and education projects across the nation’s 19 Historically Black Colleges and Universities designated as 1890 Land-grant Universities. The projects are part of NIFA’s 1890 Capacity Building Grants Program, which is designed to build capacity for teaching, research, and Extension activities. Eligible institutions are receiving funding for a range of activities, including curriculum design, materials development, faculty development, student recruitment and retention, and Extension program development support. Research investments will strengthen the quality and diversity of the nation’s higher-education workforce, bolster research and knowledge delivery systems, and equip 1890 Land-grant Universities with resources needed to better address emerging challenges and create new opportunities. All 19 eligible 1890 Land-grant Universities will receive funding through the program.

NCGA Elects Corn Board Delegates

Delegates attending the National Corn Growers Association’s Corn Congress last week elected four farmers to serve on the organization’s Corn Board. The leaders will take office October 1, the start of NCGA’s 2024 fiscal year. The new board members are Troy Schneider of Colorado, Kelly Nieuwenhuis (new-in-house) of Iowa and Bill Leigh of Illinois. Current board member Jed Bower of Ohio was re-elected. All four candidates were elected to three-year terms. NCGA Nominating Committee Chairman Chris Edgington says, “This year’s Corn Board candidates brought impressive records of service to their fellow farmers." The NCGA Corn Board represents the organization while directing policy and supervising day-to-day operations. Board members represent the federation of state organizations, supervise the affairs and activities of NCGA in partnership with the chief executive officer and implement NCGA policy established by the Corn Congress. Members also act as spokesmen for the NCGA and enhance the organization's public standing on all organizational and policy issues.

Farmers Mostly Use Manure Sources from Their Own Operations

Farmers who utilize manure as a fertilizer mostly get the aromatic livestock byproduct from their own operations. New data from USDA's Economic Research Service shows most manure applied to U.S. cropland, 78 percent, comes from animals raised on the same operation. Meanwhile, 14 percent is purchased, and eight percent is obtained at no cost from other animal operations. In 2020, manure was applied to about 8 percent of the 240.9 million acres planted to 7 major U.S. field crops. For most crops, farmers use manure that either comes from their own farm or at no cost from other farms. However, cotton and peanut producers are the most likely to purchase manure, typically from poultry growers. Among all animal manure types, poultry litter has the highest nutrient content, making it less costly to transport. Animal producers who apply their operations’ manure to their own crops account for a high proportion of manure used on oats, corn, and barley crops, followed by soybean and wheat.

California Consumes Nearly All U.S. Renewable Diesel

California accounts for nearly all renewable diesel consumption in the United States, according to data released last week by the U.S. Energy Information Administration. California's consumption of renewable diesel was more than eight times the amount produced there in 2021. Instead, most of California’s renewable diesel was produced in other states or was imported. California’s renewable diesel consumption grew substantially after its Low Carbon Fuel Standard went into effect in 2011. Between 2011 and 2021, consumption grew from one million barrels to 28 million barrels per year, over 18 times its original volume. Six states—Louisiana, North Dakota, California, Wyoming, Washington, and Kansas—accounted for all renewable diesel production in the United States in 2021. Many of the plants in the other states have exclusive agreements to send all of the renewable diesel they produce to distributors in California. U.S. renewable diesel production capacity could more than double by 2025, boosting domestic production.

Gasoline Supply at Lowest Level Since 2015

The nation's average price of gasoline increased 2.1 cents last week to $3.55 per gallon. The national average diesel price increased 2.7 cents in the last week and stands at $3.83 per gallon. GasBuddy's Patrick De Haan says, "It's been a remarkably quiet summer for gas prices, which have been far less active than normal." The national average gas price has remained in the same ten-cent range since April. The rally in oil prices has been sustained into a fourth straight week, with refined products joining in with oil to show impressive strength, with the last week seeing a sharper upside than previous weeks. U.S. retail gasoline demand saw a 0.6 percent rise last week as demand pushed higher into late July, typically when summer demand peaks. Diesel prices at the top ten percent of stations in the country average $4.90 per gallon, while the bottom ten percent average $3.30 per gallon.

Tuesday Watch List

Markets

An index of U.S. consumer confidence in July is set for 9 a.m. CDT Tuesday. The Federal Reserve begins a two-day meeting Tuesday that is expected to result in a quarter-percent increase on Wednesday afternoon. USDA's monthly cold storage report will be out at 2 p.m. CDT. Traders remain fixated on the latest weather developments and events from Ukraine.

Weather

A dome of high temperatures continues to expand and intensify across the U.S. on Tuesday. On the northern edge of the heat, a system going through Canada will make for some showers across the Northern Plains and into the Upper Midwest, some of which may be severe and lessen the impact of the increasing heat.

Milk Producers React to USDA Announcement on FMMO

U.S. dairy farmers applaud the USDA for moving forward by including the full scope of the National Milk Producers Federation proposal on the Federal Milk Marketing Order system, which the agency is in the process of modernizing. The recognition of National Milk’s consensus-based leadership allows the industry to continue the momentum for the changes achieved so far. Each piece of the proposal - from returning to the “higher-of” Class One mover as soon as possible to updating both Class One price differentials and manufacturing cost allowances - has been crucial toward building that consensus. “All the components of our plan are critical to a successful update to this important program,” says NMPF Board chair Randy Mooney. “There is still a long journey ahead toward a modernized federal order system that works better for farmers, but NMPF is ready.” The Federation is excited to help lead the industry toward solutions that work for everyone.

Senate Bill Would Bring Transparency to Foreign Land Purchases

Senators Tammy Baldwin (D-WI) and Chuck Grassley (R-IA) introduced bipartisan legislation to increase the transparency and oversight of foreign ownership in America’s agricultural industry. The “Farmland Security Act of 2023” builds on the “Farmland Security Act of 2022” by ensuring that all foreign investors, including “shell companies,” who buy American agricultural land report their holdings and strengthens the penalties for those who evade the required filing. It also invests in research to better understand the impact foreign ownership of American farmland and agricultural production capacity has on our domestic food supply, family farms, and rural communities. Current reporting shows that foreign-owned agricultural acreage has increased in recent years. However, the data that’s been collected is incomplete or inaccurate. The new legislation will direct USDA to conduct an annual compliance audit to ensure accuracy and provide annual training to state and county-level USDA staff on identifying non-reporting of foreign-owned agricultural land.

CBO Director Responds to Complaints on Farm Bill Numbers

House and Senate Agriculture Committee leaders recently sent a letter to the Congressional Budget Office complaining about the slow response to their requests for scores on farm bill provisions. CBO Director Phillip Swagel said in a letter that they have already responded to more than 1,000 requests, and they expect to respond to hundreds more in the weeks ahead. The Fencepost says the leaders’ letter strongly encouraged the Budget Committees in both Chambers of Congress to use all their available resources to reorganize the CBO staff to prioritize farm bill requests. They also encouraged the office to hire or contract additional staff or find qualified professionals outside the agency to help. However, Swagel says, “Securing additional personnel from outside the agency isn’t practical at this point as it would delay work on the current legislation. It would take too much time to bring them up to speed on CBO’s procedures.”

U.S. Providing $250 Million to Ukraine Farmers

U.S. Agency for International Development Administrator Samantha Power says the U.S. will provide another $250 million in aid to Ukraine’s agricultural producers. Feedstuffs says the money will get distributed through AGRI-Ukraine, an initiative that began in 2022 to help support Ukraine’s agricultural exports and to combat global food security issues made worse by Russia’s invasion of Ukraine. Power says multiple groups are working together to keep Ukraine farming and producing commodities. USAID has already been helping Ukraine’s farmers store the grain they can’t sell. It’s also working with private sector partners to provide financing, seed, and fertilizer. Power says the additional investments should help Ukraine’s producers to plant new crops even if they can’t sell grain from their previous harvests. “These investments that the U.S. and partners are making will not only help Ukraine win the war but also help them to build a much more resilient future,” Power adds.

Students Hit Capitol Hill

A select group of nine college students from around the nation completed the Ag Voices of the Future Program July 10-13 while in Washington, D.C. The program, sponsored by the American Soybean Association and Valent, U.S.A., gives students an inside look at how agricultural policies are made in the nation’s capital. The class was held in conjunction with ASA’s summer board meeting and other soy events. “It’s important that young people have an understanding of the significant policy issues that directly impact the productivity and economic well-being of our farms and the soybean industry,” says ASA President Daryl Cates. “ASA appreciates Valent’s support of this valuable program that helps to cultivate future voices for agriculture in D.C." The three-day program was busy with multiple activities and networking opportunities. Students heard from ASA and Valent’s industry and government affairs representatives and a House member about their current position and past career experience.

USDA Investing in Urban Agriculture, Food, and Market Access

USDA announced a series of investments that will increase market access and revenue streams for producers while strengthening the food system. The investments will also give consumers better access to locally-grown foods and healthier choices. Ag Secretary Tom Vilsack and Deputy Secretary Xochitl (So-CHEEL) Torres Small made the announcement in Philadelphia. “The USDA announced 17 new Urban Service Centers and ten new urban county committees, as well as approximately $10.7 million in investments in Farm to School and an expansion of the Healthy Food Financing Initiative,” Vilsack says. “It also includes $30 million in funding availability for the new Local and Regional Healthy Food Financing Partnerships Initiative.” The secretary also says these investments will allow families and farmers alike to benefit from healthier food produced close to home. “Families should have access to locally grown food wherever they live, and farmers should have profitable markets regardless of zip code,” says Torres Small.  

Top 5 Things to Watch - Heat Domes, Missiles and Wheat Tour Lead Stories This Week

OMAHA (DTN) -- Here are the Top 5 things the DTN Newsroom is tracking for the week of July 23. Watch for coverage of these and other topics through the week on our subscription platforms as well as on DTNPF.com.

1. Missiles Fall, Temperatures Climb: The drivers in grain markets short-term are the oncoming heat (see below) and Vladimir Putin's ongoing onslaught of Ukraine grain ports. That puts pressure on overland movement of grain out of Ukraine through neighboring countries, and the storage backlog will eventually influence how much farmers there can plant. .

2. Weather Patterns Quiet, Hot: Recent rain systems, and the active weather pattern that spawned them, have improved soil moisture conditions in a lot of areas. But the patterns, they are a changing, says our Ag Meteorologist John Baranick. A high-pressure dome and less active patterns will bring heat and dryness. The critical question is did rains bring enough soil moisture reserves to help crops get through the coming heat, which could generally last through the end of July and into August? There is a lot of pollination, grain fill and pod set going on as things heat up. Baranick notes the predicted conditions are pushing the boundaries of current weather models; some have spit out temperature possibilities above 110 Fahrenheit in the western and central Corn Belt. It's unlikely temps will get that high in any sustained way, Baranick adds, but it will be unpleasant. Stay hydrated, take breaks out of the sun and heat, and pay special attention to livestock and those that can't take care of themselves

3. Spring Wheat Tour: We'll have daily coverage of the 2023 Hard Spring Wheat and Durum Tour. DTN Crops Editor Jason Jenkins will be on the tour, with his reports starting Tuesday evening. This year's tour, sponsored by the Wheat Quality Council, will cover North Dakota and Western Minnesota. It will not include South Dakota due to low wheat acres there. Final yield predictions will be out mid-day Thursday.

4. Preparing for 2023 DTN Digital Yield Tour: The sixth DTN Digital Yield Tour, powered by Gro Intelligence, kicks off Aug. 7. In the weeks ahead, DTN reporters and editors will be out gathering on-the-ground information on crop conditions as we prepare to learn where Gro's satellite-driven yield models put the 2023 crop. This year we'll also get additional dirty-boots data from our friends at Farmers Independent Research of Seed Technologies, or FIRST. 

5. Economic News This Week: We'll cover the latest USDA Crop Progress reports, hitting Monday afternoon. Wednesday will see news on latest U.S. new homes sales out at 9 a.m. CDT, followed by the Energy Department's weekly energy inventories at 9:30 a.m. The latest Federal Reserve announcement is scheduled at 1 p.m., followed by a press conference with Fed Chairman Jerome Powell. Thursday sees USDA's weekly export sales report, U.S. weekly jobless claims, durable goods orders for June and an update of the U.S. Drought Monitor, all due at 7:30 a.m. The U.S. Energy Department's natural gas report follows at 9:30 a.m. Friday brings a collection of reports to help gauge inflation: At 7:30 a.m. we'll see the U.S. index of personal consumption expenditures for June, the report on U.S. personal incomes and consumer spending for June and the Labor Department's employment cost index for the second quarter. The University of Michigan's index of consumer sentiment for July hits at 9 a.m.

Monday Watch List

Markets

Back from the weekend, traders will be paying close attention to the latest weather reports and any news from the Black Sea region. USDA's weekly inspections report is set for 10 a.m. CDT and will be followed by the Crop Progress report at 3 p.m.

Weather

A cluster of thunderstorms is moving down the Missouri Valley early Monday and some additional showers and thunderstorms are expected in the Midwest Monday as a ridge of heat over the West spreads eastward. Heat will be stressful this week, but some areas are going to see rain and potential severe weather.

USDA Accepts Almost 2.7 Million Acres in CRP

The USDA is accepting offers for nearly 2.7 million acres from agricultural producers and private landowners in this year’s Grassland Conservation Reserve Program signup. The program received a record-setting signup of 4.6 million acres in offers. The working lands program allows producers and landowners to continue grazing and haying practices while protecting grasslands and furthering the CRP’s impacts. “This year’s Grassland CRP signup demonstrates the continued popularity and success in voluntary, producer-led, working lands conservation programs,” says Zach Ducheneaux, Farm Service Agency Administrator. “Grassland CRP clearly demonstrates that conservation priorities and agricultural productivity can coexist, complement, and enhance one another.” USDA had to accept fewer acres and a lower percentage of offers than in 2022 because the program has reached its acreage cap. “With the low number of future expiring acres, getting closer to the statutory cap of 27 million acres would hinder the ability to conduct future signups,” Ducheneaux adds.

USB Sets Fiscal Year 2024 Budget

The 77 people serving on the United Soybean Board approved $191.5 million for the 2024 fiscal year budget. The budget supports research, promotion, and education investment portfolios selected through USB’s Portfolio Development Process. These investments help drive demand for U.S. soy and return value to all U.S. soybean farmers. The total budget also includes execution, oversight, and program support. “I hope U.S. soybean farmers are proud of their checkoff as we pool our resources to improve our reliability and sustainability in delivering our crop to the global marketplace,” says Meagan Kaiser, USB Chair and Missouri farmer. “As we look to next year, we know that soy delivers solutions, and in many cases, it serves as a drop-in replacement to improve our carbon footprint across thousands of products.” She also says it’s important to make significant gains and drive return on investment back to farmers. “The future is bright,” she adds.

Animal Ag Alliance Releases Extremism Report

The Animal Agriculture Alliance released reports detailing the interconnectedness of the animal rights movement and their tactics targeting animal agriculture. “No matter the animal rights extremist group or the tactics used, they all share the same goal of eliminating animal agriculture and taking meat, dairy, poultry, eggs, and seafood off grocery store shelves and family tables,” says Abby Kornegay, AAA manager of issues and engagement. Almost one-third of all animal rights extremist attacks documented in 2022 targeted farmers and food workers, putting them and the animals in danger. Some of their documented actions against animal ag include 95 vandalism incidents, 70 stolen animals, 60 criminal trespasses, ten arson cases, and nine harassment and intimidation incidents. “Extremists are getting ever bolder in their efforts against animal agriculture, and direct actions at the farm, processing facility, and retail store continue rising,” Kornegay adds. For information about proactive security measures, go to animalalliance.org.

Legislation Introduced to Improve Credit for Critical Rural Facilities

The Investing in Rural America Act was introduced in the House of Representatives, and the Farm Credit Council reacted positively. “We thank those who introduced the legislation for their commitment to rural communities,” says FCC President and CEO Todd Van Hoose. “This legislation will spur the development of critical facilities in rural communities, such as hospitals, childcare centers, schools, and more.” He also says the bill will facilitate partnerships between Farm Credit, community banks, and other lenders to provide much-needed capital to build, renovate, and modernize rural community facilities. “Those kinds of facilities are critical to the viability of rural communities because they play key roles in improving the quality of life for rural families,” Van Hoose adds. “Yet, many communities lack these essential facilities, while many other facilities need modernization.” Minnesota Rep Michelle Fischbach says one way Congress can support rural communities is by eliminating unnecessary barriers to capital investment.  

USDA: Cotton Ending Stocks Set to Increase

The USDA cotton projections for August-July indicate that global cotton ending stocks will increase by 570,000 bales (0.6 percent) to 94.5 million bales. That’s the second-highest level since 2014-2015. As production exceeds mill use for a second year in a row, world cotton prices are forecast lower than the $1.01 per pound estimated for 2022-2023 and the recent high in 2021-2022 of almost $1.32 per pound. Although the world harvested area is projected to increase two percent, or 600,000 hectares, a projected decrease in the global yield reduces the production estimate year-over-year. Global cotton production is forecast to decrease by 1.1 million bales, or one percent, from 2022-2023 to 116.8 million bales in 2023-2024. The largest gains in the world are expected to come from Pakistan and India. World trade expectations (43.5 million bales) show a considerable increase from 2022-2023, rising with the projected rebound in 2023-2024 global cotton mill use.

MN Rep Wins NCGA President’s Award

Minnesota Representative Angie Craig is the winner of the National Corn Growers Association’s 2023 President’s Award. She was honored during the organization’s annual Corn Congress summer meeting in Washington, D.C. Tom Haag (HAYG), NCGA President and a Minnesota corn grower, had high praise for the congresswoman. “Whether it’s ensuring that consumers have access to higher levels of ethanol or it’s working to advance corn grower priorities in the farm bill, Craig has been a tireless advocate for growers and is one of our biggest Congressional allies.” Craig, Minnesota’s Second District Representative, says, “My district is home to so many of the corn growers who get food on our tables and fuel in our vehicles. I’m honored to represent them.” Craig has championed many issues important to corn growers. Earlier this year, she joined a bipartisan group of House members in re-introducing a bill that would allow year-round access to E15.

Friday Watch List

Markets

USDA's monthly cattle on-feed inventory and U.S. cattle inventory reports, both for July 1 are due out at 2 p.m. CDT, the only significant reports on Friday. Traders continue to keep close watch on the latest weather developments and happenings in Ukraine.

Weather

A cold front pressing south through the country will continue to produce areas of showers and thunderstorms, some possibly severe with heavy rain. Fairly comfortable temperatures remain north of the front with largely drier conditions. Some isolated showers may be possible farther north in the Plains.

USDA Partnership to Reduce Anticompetitive Barriers

USDA launched a partnership with bipartisan attorneys general in 31 states and the District of Columbia to enhance competition and protect consumers in food and agricultural markets. Through the agreement, this partnership will assist the state attorneys general in tackling anticompetitive market structures in agriculture and related industries that are raising prices and limiting choices for consumers and producers. “Through these cooperative agreements, we can ensure a more robust and competitive agricultural sector,” says Ag Secretary Tom Vilsack. “I’m happy to see that a bipartisan group of states is committed to joining USDA in better protecting the fair and competitive markets that are a critical cornerstone of the American economy.” Areas of focus for the Agricultural Competition Partnership include anti-competitive market structures and practices, as well as price gouging and other anti-consumer practices in food, retail, meat, and poultry processing. Others include a lack of choices for consumers and producers.

Methane Emissions Reduction for Beef Cattle

Cargill recently partnered with TREES Consulting to develop a new Gold Standard-approved methodology giving beef producers a way to measure methane emissions reductions. The methodology uses feed supplements incorporated into beef cattle diets. The new methodology defines a set of parameters that beef producers can adopt to quantify reductions in methane emissions, a greenhouse gas derived from the digestion process in cattle as well as manure handling. It’s now available for beef producers to quantify, audit, and verify methane reductions, enabling them to register their GHG mitigation projects for Gold Standard Certification. Those verified emissions reductions can be traded in carbon markets, allowing credit purchasers to directly support the projects. “We are committed to finding ways to ensure that producers can get recognized and rewarded for their emissions reduction efforts,” says Margaret Kim, CEO of Gold Standard. For more information about the new methodology, go to Cargill’s “Feeding Intelligence” site.

Newhouse Launches ESA Working Group

Washington Representative Dan Newhouse, the Congressional Western Caucus, and the House Committee on Natural Resources launched the Endangered Species Act Working Group. The new group will look into how the Endangered Species Act is being implemented by federal agencies, the practical impacts on the American people, how litigation is driving ESA decision-making, and how success is currently defined under the act. The group intends to publish a series of policy recommendations that reform the ESA to the benefit of the American people and species conservation. “It’s clear the ESA desperately needs reform,” Newhouse says. “Not just for the sake of our species, but for the people who are negatively impacted because of its land-use restrictions, impact on property values, and costly permitting requirements.” Hundreds of species are listed under the act, but only three percent have been delisted. “Clearly, something is not working,” says Natural Resources Chair Bruce Westerman of Arkansas.

NACD 2023 Summer Conservation Forum Held This Week in ND

The National Association of Conservation Districts held the 2023 Summer Conservation Forum and Tours in Bismarck, North Dakota. This summer’s meeting brought together conservation leaders from across the country to discuss emerging natural resource concerns and innovative solutions. The meeting included a grassland conservation and grazing management panel, as well as remarks from Natural Resources Conservation Service Chief Terry Cosby and Farm Service Agency Administrator Zach Ducheneaux. North Dakota Senator John Hoeven spoke about the importance of locally-led conservation, partnerships, and an approach that isn’t one size fits all. “Make the approach fit farmers and ranchers,” he said. NACD President Kim LaFleur emphasized the importance of developing next-generation leaders at all levels and engaging new audiences and partners. The event also gave attendees the opportunity to see conservation in action, including a tour of the Black Leg Ranch. Several other conservation leaders addressed changing natural resource challenges in their regions. 

Applications Open for Southeast Asia Trade Mission

USDA Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor will lead an agribusiness trade mission to Malaysia and Singapore from October 30-November 3. The Foreign Ag Service is accepting applications from U.S. exporters wanting to take part in the trade mission. “Malaysia and Singapore are important markets in our efforts to diversify prospects for U.S. food and agricultural exports in Southeast Asia,” Taylor says. “These markets provide both a source of stability for American exports and a tremendous opportunity to further expand U.S. trade in the region.” She also says consumer demand for American products in both countries is on the rise, making this agribusiness trade mission extremely timely. America’s agricultural and related product exports to Malaysia reached $1.13 billion in 2022. U.S. agricultural exports to Singapore grew 190 percent between 2012 and 2022, reaching a record $1.4 billion in 2022. For more information or to apply, go to usda.gov.

National FFA Organization Names American Star Finalists

The National FFA Organization has announced the 16 finalists for its 2023 top achievement awards. The awards include the American Star Farmer, American Star in Agribusiness, American Star in Agricultural Placement, and the American Star in Agriscience. The American Star Awards represent the best of the best among thousands of American FFA Degree recipients. The award recognizes FFA members who have developed outstanding agricultural skills and competencies by completing a Supervised Agricultural Experience (SAE) program. A required activity, the SAE allows members to learn by doing. Members can own and operate an agricultural business, intern at an agricultural business, or conduct an agriculture-based scientific experience and report the results. Other requirements for receiving an award include demonstrating top management skills, completing key agricultural education, scholastic, and leadership requirements, and earning an American FFA Degree, the organization’s highest level of student accomplishment. For more information about the American Star Awards, go to FFA.org/Stars.

Thursday Watch List

Markets

USDA's weekly export sales report, U.S. jobless claims and an update of the U.S. Drought Monitor are all due out at 7:30 a.m. CDT Thursday. U.S. existing home sales and U.S. leading indicators, both for June are out at 9 a.m. The U.S. Energy Department's report on natural gas storage follows at 9:30 a.m. Traders will continue to pay close attention to the weather and latest events out of Ukraine.

Weather

A system moving through the eastern Midwest will continue to produce areas of showers and thunderstorms on Thursday, some of which may be severe with wind and hail. The front to the system will be an area to watch for significant severe storms Thursday afternoon and evening across Colorado and Kansas with a significant severe wind threat and heavy rain potential. To the south of the front, heat and humidity continue to be intense.

Russia Attacks Ukraine Grain Port

One day after Russia terminated the Black Sea Grain Initiative, the country attacked Ukraine grain facilities at the Odesa port. Russia terminated the deal following an attack by Ukraine on a bridge in the Crimean Peninsula. The port attacks were in retaliation to the Ukraine attack. The Black Sea grain export deal allowed for the safe transport of grain through the Black Sea by Ukraine. Reuters reports that any attempt to reopen Ukrainian grain shipments without Russia's participation would depend on insurance companies agreeing to provide coverage. Russia could return to the grain deal, but only if its demands are met for rules to be eased for its own exports of food and fertilizer. The country, for now, has not guaranteed the safety of ships in the Black Sea carrying products from Ukraine. Ukraine has invested in other ports, and could shift grain to those, but at a reduced shipping capacity.

Ad Hoc Government Payments Caused Farmers to Store More Grain

University research shows ad hoc payments result in farmers holding more grain in storage. Published by the University of Illinois’ FarmdocDAILY, the research estimated the impact of the unprecedented surge in ad hoc farm payments from 2018 to 2020 on grain inventories held by farmers. Under the Market Facilitation Program, U.S. farmers received approximately $23 billion during the 2018-19 and 2019-20 marketing years. While USDA designed MFP to avoid distorting farmer planting and production decisions, these payments may still have affected farm decision-making, in particular, the decision to store production after harvest. However, the research estimates the impact of MFP payments on the market-level inventories was modest. Even in the case of soybeans in December 2018, the market and quarter where with the largest impact, U.S. soybean stocks were only 226 million bushels or six percent higher than they would have been in the absence of MFP payments. The conclusion: MFP did impact outcomes relevant to commodity price levels, though any potential market distortion was likely small.

U.S. Again a Top Beef Supplier to Japan

The United States is again a top supplier of beef to Japan, according to USDA’s Economic Research Service. U.S. market share collapsed in 2004 after a single case of bovine spongiform encephalopathy, commonly referred to as “mad cow disease,” was detected in a cow shipped from Canada to the United States. In response, Japan placed an embargo on all U.S. and Canadian beef products. In 2006, Japan began phasing out the ban on U.S. beef and fully lifted it in May 2019. Over this period, U.S. beef imports rebounded nearly to pre-ban levels, shipping 233,000 metric tons to Japan in 2021. The U.S. is now the second largest supplier of beef to Japan, behind Australia. Recently ratified trade agreements between Japan and these partner countries are expected to contribute to changes in Japan’s market for imported beef. Researchers estimate that by 2033, annual scheduled reductions in Japan’s import tariffs will increase imports of U.S. beef by 27 percent, or $413.8 million, from 2018 levels.

AEM Study Shows Environmental Benefits of Precision Agriculture

A new study for the Association of Equipment Manufacturers shows the environmental benefits of precision agriculture. The study examined the impact of various technologies on the production of row crops, broad acre crops, roots and tubers, as well as forage. The data overwhelmingly shows that precision agriculture can have a positive environmental impact in all of these areas. Precision agriculture leverages technologies to enhance sustainability through more efficient use of land, water, fuel, fertilizer and pesticides. Essentially, farmers who use precision agriculture technologies use less to grow more, reducing both cost and environmental impact. In consultation with several environmental groups, AEM identified five areas with the most potential to impact the environment. Precision agriculture results in a four percent increase in crop production, seven percent increase in fertilizer placement efficiency, a nine percent reduction in pesticide use, a six percent reduction in fossil fuel use and a four percent reduction in water use.

USTR Announces Fiscal Year 2024 WTO Sugar Tariff-Rate Quota Allocations

The U.S. Trade Representative’s office Tuesday announced the country-specific and first-come, first-served in-quota allocations of the tariff-rate quotas for imported sugar. The tariff-rate quotas, or TRQs, apply to raw sugar, refined and specialty sugar, and sugar-containing products, for fiscal year 2024, that begins October 1. TRQs allow countries to export specified quantities of a product to the United States at a relatively low tariff, but subject all imports of the product above a pre-determined threshold to a higher tariff. Earlier this month, the Department of Agriculture announced the establishment of the in-quota quantity for raw cane sugar for FY 2024. The in-quota quantity for the TRQ on raw cane sugar for FY 2024 is 1,117,195 metric tons raw value, which is the minimum amount to which the United States is committed under the World Trade Organization Agreement. USTR is allocating the raw cane sugar TRQ of 1,117,195 metric tons raw value, to a set of countries included in the announcement.

Hot Summer Means More Natural Gas Consumption

The U.S. Energy Information Administration forecasts record-high natural gas consumption in the United States for electricity generation in July and August. The forecast comes as another hot summer increases demand for air conditioning. In its July Short-Term Energy Outlook, EIA expects about four percent more U.S. electricity generation from natural gas in July and August 2023 than in 2022. Natural gas will provide about 46 percent of U.S. electricity for those two months and provide 41 percent of U.S. electricity for the year, according to EIA's forecast. EIA also expects a six percent increase in electricity generation from renewables and a two percent increase in generation from nuclear energy. Also, EIA reduced its forecast for growth in U.S. renewable diesel production from previous forecasts. An EIA spokesperson says, "We still expect significant growth in renewable diesel production, but changes to the Renewable Fuel Standard slightly lower the growth rate in the short term.” EIA expects the United States to produce about 161,000 barrels per day of renewable diesel in 2023, which is a 66 percent increase from 2022.

Wednesday Watch List

Markets

A report on U.S. housing starts for June will be out at 7:30 a.m. CDT Wednesday, followed by the Energy Department's weekly energy inventories at 9:30 a.m. Traders continue to pay close attention to the latest weather developments in a summer of volatile pricing for corn and soybeans. Events in Ukraine are also getting attention as summer fighting escalates.

Weather

A front across the Tennessee Valley and a system moving through the Upper Midwest are producing areas of showers and thunderstorms for Wednesday, under mainly mild temperatures for the Corn Belt. Some stronger storms may be possible from Nebraska into Minnesota and Wisconsin. Heat continues to be in place across the Southern Plains and across the Southeast.

EPA Denies 26 RFS Small Refinery Exemptions

The Environmental Protection Agency has denied 26 Small Refinery Exemption petitions for the Renewable Fuel Standard spanning compliance years 2016-2018 and 2021-2023. The action demonstrates the agency’s continued commitment to ending the backlog of pending SREs. The American Soybean Association welcomed the continued transparent and fair assessment of SREs through more stringent hardship and economic impact requirements. Historically, significant SRE approvals without clear and consistent metrics for evaluation created vast market uncertainty and undermined the intent of the RFS, creating a challenging environment for continued growth in the biomass-based diesel industry. EPA has worked in recent years to develop new parameters for petition approvals that have proven effective at strengthening the RFS. ASA is pleased with this progress and hopes EPA will continue to work with the biofuels industry to implement the RFS as intended. With the finalization of these 26 SRE petition denials, EPA has cut down SRE backlogs significantly, with only two outstanding petitions remaining from compliance year 2018.

Lawmakers Introduce Women in Agriculture Bill

Lawmakers recently introduced the Women in Agriculture Act. The legislation would establish a research priority for agriculture machinery and equipment designed to be used by women, and create a funding set aside for childcare facilities in rural areas. The bill also creates a Women Farmers and Ranchers Liaison position at the Department of Agriculture. Although the number of women in the agriculture industry is growing, the majority of tools are designed and manufactured the height, strength and body type of a man. Representative Chellie Pingree, a Democrat from Maine, led the introduction of the bill. She says, “The Women in Agriculture Act provides resources specifically for women farmers and ranchers to level the playing field and work towards a fairer agriculture industry." In 2019, women accounted for 26 percent of the farm labor workforce, a 19 percent increase since 2009. However, farms operated by women earn 40 percent less income compared to male-dominated farms.

Deadline July 26 to Apply for Organic Dairy Marketing Assistance

Organic Dairy producers have a few days left to apply for Organic Dairy Marketing Assistance from the Department of Agriculture. The Organic Dairy Marketing Assistance Program assists certified organic dairy producers facing unique challenges in recent years, including higher costs attributed to the pandemic and drought conditions across the country. USDA's Farm Service Agency provides financial assistance for a producer's projected marketing costs in 2023 based on 2022 costs. The program provides a one-time cost-share payment, based on marketing costs, on pounds of organic milk marketed in the 2022 calendar year. The financial assistance provides immediate support to certified organic dairy operations during 2023, keeping organic dairy operations sustainable until the markets return to more normal conditions. SDA will invest $104 million in financial assistance to certified organic dairy producers. Organic dairy producers should apply by July 26, 2023, at their local USDA Service Center.

U.S. Consumers’ Food Spending Hit Record High in 2022

New data from USDA’s Economic Research Service shows consumer spending on food reached a record in 2022. Real, or inflation-adjusted, annual food spending in the United States increased steadily from 1997 to 2022, except in 2008 and 2009 during the Great Recession and in 2020 during the Coronavirus pandemic. Food spending includes food at home, described as food intended for off-premises consumption from retailers such as grocery stores, and food away from home, described as food purchased at outlets such as restaurants or cafeterias. Total food spending increased 70 percent from 1997 to 2022. During this period, food at home spending increased at a slower rate, 53 percent, than for food away from home at 89 percent. Total food spending increased on an annual basis by 7.2 percent in 2021 and 4.5 percent in 2022. Food away from home spending increases, 19 percent in 2021 and eight percent in 2022, drove overall increases in food spending.

MGP Ingredients to Close Industrial Alcohol Distillery

MGP Ingredients last week announced the planned closure of its industrial alcohol distillery expected in January 2024. The facility in Atchison, Kansas, produces grain neutral spirits, industrial alcohol products and related co-products. The decision to close this distillery is consistent with the company’s plan to address profitability headwinds associated within the sector. MGP Ingredients will continue to operate and invest in its Ingredient Solutions business located in Atchison, Kansas, including the previously announced $16.7 million-dollar texturized protein facility scheduled to be completed by the end of the year. The company will also continue to operate and invest in its Lawrenceburg, Indiana, distillery operations. MGP President and CEO David Colo says, “The additional supply of grain neutral spirits and industrial alcohol that has entered the market during the past few years has had a meaningful and structural impact on the market.” The company also cited the increase in local corn basis costs that reduced profitability.

Tuesday Watch List

Markets

A report on U.S. retail sales in June is set for 7:30 a.m. CDT Tuesday, followed by U.S. industrial production at 8:15 a.m. USDA's Livestock, Dairy and Poultry outlook is due out at 2 p.m. Traders will keep a close watch on the latest weather forecasts.

Weather

Remnants of a storm complex from western South Dakota Monday night will continue across eastern Nebraska and Missouri Tuesday morning. By Tuesday afternoon, storms will expand into the Tennessee Valley and Ohio Valley. More scattered storms will also form across the eastern Dakotas, Minnesota, and northern Iowa by Tuesday evening. The strongest storms are expected across Missouri, southern Illinois, eastern Kentucky and Tennessee, as well as eastern North Dakota. Damaging winds and isolated, large hail will be the main threats with thunderstorms Tuesday.

CoBank: U.S. economic slowdown likely ahead

Full impact of monetary policy actions have yet to be felt.

The U.S. economy continues to defy gravity and remains strong despite lingering inflationary pressures, higher borrowing costs and a barrage of other headwinds. Consumers continue to spend aggressively on services, businesses are still investing and the labor market remains incredibly strong. Secure jobs are the most important element in consumer spending and well-employed Americans have powered the economic recovery for three years.

However, looming risks to the economy are increasing in number and size. According to a new quarterly report from CoBank’s Knowledge Exchange, the full impact of monetary policy actions—raising interest rates, quantitative easing and contracting the money supply—have yet to be felt. Those policy actions, combined with depleted consumer savings, tighter commercial bank lending standards and the persistently inverted yield curve are likely to result in a mild recession by the fourth quarter of 2023.

“There is still a lot of wind at the back of this economy, and we don’t believe a severe contraction is coming,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange. “But we do believe it is important to not misinterpret delayed impacts for minimal impacts. Monetary effects can be slow in developing, and history tells us that the economy can seem just fine right before a recession hits.”

The labor market remains relatively tight, but the situation has improved significantly as female and non-native workers have stormed back into the work force. The labor force participation rate for women between the ages of 25-54 now stands at an all-time high, up more than 4% from the low in April 2020.

Foreign-born employment has increased at roughly double the pace of native-born employment since April 2020. The successes in these two groups have been critical so far in the economic recovery. But looking forward, it raises the question of how many more workers are available to be coaxed in off the sidelines. Ultimately, the U.S. labor force challenges are far from over.

Grains, farm supply & biofuels

With the corn and soybean growing season in full swing, drought across the Central U.S. is driving heightened seasonal market volatility. Markets are balancing the quickly deteriorating crop conditions against the potential for El Nino to bring wetter conditions later in the growing season. Wheat harvest is advancing northward in the U.S. and is revealing high variability in crop quality. USDA expects the U.S. hard red winter wheat crop to be the smallest since 1957 on substantially higher abandonments and lower yields.

Ag retailers faced a more challenging environment in the second quarter as fertilizer prices continued to fall. Prices were weighed down by reduced demand, as farmers took advantage of pre-payment programs last fall to purchase fertilizer in advance. Despite an overall slowdown in inflation, ag retailers continued to face rising costs, especially for property insurance. Grain and farm supply cooperatives paid about 50% more for property and casualty insurance coverage during the January and April 2023 renewal seasons.

The ethanol complex delivered strong second quarter results with steady production and above-average profitability. Operating margins averaged 45 cents per gallon, nearly double the long-term average. While the finalized blending requirements under the Renewable Fuel Standard (RFS) were somewhat disappointing for ethanol, they were incrementally positive for biomass-based diesel. The new rules call for 2.82 billion gallons of biodiesel and renewable diesel in 2023 and 3.35 billion gallons in 2025.

Animal protein & dairy

As the summer grilling season kicked off, beef demand remained incredibly resilient despite elevated prices for consumers. Retail beef prices averaged $7.50 per pound in May, a record high for the period, and an increase of 2% year-over-year. Robust demand combined with tighter cattle supplies spurred market momentum for cattle. Fed cattle values reached record levels, above $180 per cwt. and feeder cattle shot above $240 per cwt. While consumers have yet to balk at higher beef prices, things could quickly change when seasonal support wanes.

Excess hog supply and weak pork demand put hog prices in jeopardy this spring. After a steady start to the year, the CME lean hog index tumbled about $10/cwt., to $72 from mid-March to late April. However, more favorable market conditions across the animal protein segment drove lean hog values up 30% through May and June. While still down about $15 year-over-year, the pork cutout landed in the upper $90s, gaining about $20 per cwt. through the quarter.

Domestic chicken consumption was up about 4% year-over-year through June 1, which has helped chip away at elevated cold storage holdings. Wholesale broiler meat prices have largely rebounded to pre-pandemic levels, following significant declines in late 2022 and early 2023. Feed costs have come down about 10% from last year but remain well above their historic averages. For broiler integrators, increased feed costs coupled with higher operational expenses have crimped profitability.

U.S. milk producers continue to struggle in the current price environment. The national all-in mailbox milk price has dropped below the $20/cwt. mark after averaging $25.34/cwt. in 2022. While several factors are to blame for this year’s milk price decline, the sharp drop in American/cheddar-style cheese prices is the most significant. Prices for the category have dropped by one-third since the beginning of the year. Milk and feed futures suggest producer profitability should improve considerably by October when Class III milk prices are anticipated to increase by about $3.00/cwt.

Cotton, rice & specialty crops

U.S. cotton production is rebounding from last year’s crop that was devastated by extreme drought across the southwest. Recent rainfall in top-producing Texas is expected to reduce abandonment following three years of severe drought. The U.S. cotton crop is now estimated at 16.5 million bales, up 14% from last year. Price inflation for clothing and apparel in the U.S. continues to ease with the moderation of cotton prices, which may work to draw in new consumer demand.

U.S. rice production is expected to recover from last year’s small crop, although concerns over dryness and worsening conditions in the mid-South have led to increased volatility of rough rice prices. With improved water availability this year, California medium grain rice production is also expected to rebound with planted acreage at 465,000 acres. That’s a substantial increase from last year’s planted acreage of 220,000 acres that were restricted by historic drought conditions.

Sugar prices remain historically high as markets ration tight global supplies. USDA currently calls for a rebound in world sugar production for 2023-2024, but concerns are growing that El Nino will result in smaller harvests in 2023-2024. In the U.S., there is no relief in sight for high prices as wet weather delayed planting across northern states this spring, which resulted in a smaller U.S. sugarbeet crop.

The tight farm labor market continues to be especially challenging for U.S. specialty crop producers. The Federal Reserve Bank of San Francisco reported that weekly median wages for farm workers swelled to a record high $915 in April, a 24% increase from the year earlier. In June, the House Agriculture Committee created a bipartisan working group, tasked with evaluating the H-2A program and finding solutions for the labor supply challenges facing farmers.

Food & beverage

While food manufacturers generally indicate they are back to business as usual in the post-pandemic era, many consumers continue to harbor a crisis-management mentality when it comes to food costs. Rising food prices are challenging both at-home and away-from-home food spending. The Consumer Price Index for all food in May was 6.7% higher than May 2022, while food away-from-home prices were up 8.3%. To offset higher prices, consumers are continuing behaviors initially seen during the pandemic, namely eating more meals at home. Foot traffic in restaurants remains well below pre-pandemic levels.

High Production Costs Won’t Ease Next Year

USDA’s first cost of production forecast for major field crops like corn, soybeans, wheat, cotton, rice, and others shows that input costs are expected to remain elevated into the next growing season. The costs will likely be at the third-highest level of all time and only slightly lower than the record high in 2022. While some input costs like fertilizer and chemicals are expected to decline from 2023 to 2024, other expenses like seed costs, labor, machinery and equipment, taxes, and insurance are expected to rise. Since 2020, the total costs paid by farmers to raise crops and care for livestock have increased by more than $100 billion, or 28 percent, to an all-time high of $460 billion this year. Based on USDA’s current input cost projections, trend yields, and commodity price trends, several major field crops may experience marketing year average prices below breakeven levels this year and possibly into 2024.

White House Hosts Event on Competition in the Farm Bill

The USDA and White House co-hosted a meeting to discuss competition priorities in the farm bill. National Farmers Union President Rob Larew took part, saying that the U.S. needs a farm bill that prioritizes fair and competitive markets. “Today’s event shows the need for this issue to be addressed in the 2023 Farm Bill,” Larew says. “Our Fairness for Farmers Campaign has sounded the alarm on monopolies, and this meeting is a sign our concerns are being heard by our decision-makers.” The U.S. Cattlemen’s Association also took part in the event. USCA Vice President Lia Biondo says the discussion marked progress toward a fairer, more competitive marketplace. “A Texas A & M study shows that without the Cattle Price Discovery and Transparency Act, negotiated trade in Texas, Oklahoma, and New Mexico is expected to fall to zero by 2026,” she says. “Zero percent negotiated trade is a wholly vertically-consolidated industry.”

Minnesota Company Launches Relief Effort for Ukrainian Farmers

The United Nations Food and Agriculture Organization says Ukraine’s farmers have suffered $3.9 billion in losses since Russia invaded in February 2022. A U.N. study says cultivated area has decreased nine percent since last year, and 12 percent of Ukraine’s farms report unexploded ordinances in their fields. EarthDaily Agro of Maple Grove, Minnesota, launched ‘Farmerhood,’ a fund-raising initiative to help farmers impacted by war. A Twin Cities TV station says the group’s fundraising goal is $1 million, enough to help 200 farmers. Dave Gebhart of EarthDaily says they’ve reached about $300,000 thanks to corporate sponsors. The group has received 300 requests for help from farmers in Ukraine. The farmers must have 1,200 acres or less to be eligible for assistance. The group says there is a thorough audit of the farmer’s property and location to make sure they can help those who suffer the most. For information, go to Farmerhood.org.

Cattle Producers Praise Congressional Support of Beef Checkoff

Cattle industry leaders praised the introduction of a bipartisan congressional resolution recognizing the importance of commodity checkoff programs, including the Beef Checkoff. As a cattle producer who invests in the checkoff, National Cattlemen’s Beef Association President Todd Wilkinson says he knows how important the program is to the industry’s success. “The Beef Checkoff was created by cattle producers and provides immense benefits to those producers,” he says. “I’m grateful for the resolution and the fact that lawmakers are standing with cattle producers to recognize the importance of checkoff programs.” He’s also hopeful that more members of Congress will listen to farmers and ranchers and reject animal rights activist-led proposals like the OFF Act that undermine producer control of checkoffs. “Checkoff-funded programs have led to the development of new cuts of beef and strengthened consumer trust in the cattle industry’s animal welfare and sustainability,” says NCBA Policy Division Chair Gene Copenhaver.