USDA Provides $1.8 Billion to Offset Market Fluctuations

The Department of Agriculture is in the process of issuing $1.8 billion in payments to agricultural producers. The funds are for farmers enrolled in the Agriculture Risk Coverage and Price Loss Coverage programs for the 2020 crop year. The payments provide support to help mitigate fluctuations in either revenue or prices for certain crops. These two USDA safety-net programs help producers of certain crops after facing the impacts of COVID-19 and other challenges.  FSA Administrator Zach Ducheneaux (DOO-shah-no) says, “these programs provide stability when markets are volatile, making a big difference in the lives of farm families across the country.” Additionally, USDA's Farm Service Agency encourages producers to contact their local USDA Service Centers to make or change elections and enroll for 2022 ARC or PLC. The election and enrollment period runs through March 15, 2022. If an election is not submitted by the deadline, the election remains the same as the 2021 election.

Tariff Agreement with EU Reopens Doors for US Agriculture Exports

The United States and European Union Sunday announced an end to the trade conflict of steel and aluminum tariffs, welcome news for agriculture. The United States will not apply section 232 duties and will allow duty-free importation of steel and aluminum from the EU at a historical-based volume, and the EU will suspend related tariffs on U.S. products. They will also consider reducing carbon in the steel and aluminum supply chain as part of the agreement, including greater incentives to reduce carbon across steel and aluminum production. The U.S. Trade Representative's Office states the global arrangement reflects a joint commitment to use trade policy to confront the threats of climate change and global market distortion. American Farm Bureau Federation President Zippy Duvall called the agreement welcome news, adding, "farmers were swept up in the turmoil as the EU clamped down on U.S. agricultural exports like orange juice, butter, cheese, pork, nuts and many more."

Deere, UAW, Reach Tentative Agreement

Deere & Co and United Auto Workers International reached a tentative new contract. The agreement could lead to the end of a worker strike. The deal was announced over the weekend, but needs to be approved by UAW members first. Chuck Browning, UAW Vice President and Director of the Agricultural Implement Department, says the agreement contains enhanced economic gains and provides the highest quality healthcare benefits in the industry.  Browning adds, "The negotiators focused on improving the areas of concern identified by our members during our last ratification process." The UAW will not release details of the tentative agreement until members at all John Deere locations have an opportunity to meet and review the terms of their proposed contract. It's unclear when the vote will be completed, and the more than 10,000 Deere employees will remain on strike until the vote is concluded. UAW members overwhelmingly rejected the first tentative agreement announced last month.

Dairy Producers Asked to Participate in FMMO Class I Pricing Method Poll

American Dairy Coalition invites dairy producers to participate in a short poll on the Federal Milk Marketing Order Class I pricing method. Coalition CEO Laurie Fisher says, "This poll gives dairy producers the opportunity to show how the Class I pricing change affects them in terms of planning and risk management and to give their preference." The ADC board, along with several state and regional dairy organizations, have publicly supported the idea of asking Congress to legislatively return to the previous Class I skim pricing method of using the 'higher of' Class III or IV advance skim pricing factors until an FMMO hearing process thoroughly evaluates proposals. The Upside benefit of the new method is 74 cents on Class I, which is around 20 cents on the blend price nationally, but at the same time, there is no limit to the downside risk if market disruptions push Class III and IV apart by more than $1.48 per hundredweight. Find the pole online.

Frozen Turkey Inventories 24% Below 3-year Average

Remembering to defrost the turkey might not be the only challenge families face as they try to get that perennial centerpiece onto the Thanksgiving table this year. As of August 31, 2021, inventories of frozen whole turkeys and turkey parts were 24 percent lower than three-year average volumes, according to USDA’s Economic Research Service. Stocks of frozen turkey meat typically follow a seasonal pattern, building throughout the year until the fall, when retailers prepare to meet holiday demand. In 2021, the seasonal build-up was less pronounced than usual, and stock volumes appear to have peaked before starting an earlier-than-normal decline. At the end of August 2021, 428.1 million pounds of turkey meat were in cold storage, a 19-percent decrease from the same month last year, and a decline of about seven million pounds from the end of July 2021. Stocks are lower partly because production of turkeys is lower than average this year.

New Promotional Opportunity for Agritourism Venues

The American Farm Bureau Foundation for Agriculture is looking for orchards, pumpkin patches, corn mazes and more to showcase on a new app. The American Farm trail app is dedicated to connecting consumers with agritourism venues. Created by the Farm Bureau Foundation and sponsored by Corteva, the app allows farmers, ranchers and farm attraction managers to sign up for free to showcase their agritourism venues. Farms and attractions can create a profile promoting their business, history, available products and more. Consumers using the app will be able to connect directly with local farms by searching area, type of attraction, or products for sale. The Foundation plans to launch the app in the spring of 2022.  Resources are available to farmers interested in listing their farm on the app, including a video overview of the app and a how-to guide for filling out the attraction listing information. Learn more at agfoundation.org.

Tuesday Watch List

Markets

There are no official reports on Tuesday's docket. Traders will consider the findings from Monday afternoon's Crop Progress report, check the latest forecasts and watch for any sign of an export sale. The Federal Reserve starts a two-day meeting and will have an announcement out Wednesday afternoon.

Weather

A frontal boundary continues to sag south through the country on Tuesday. A system forming along the front will bring scattered showers to the Southern Plains through Wednesday, while continuing to bring down the coldest temperatures of the season so far. Widespread frosts and freezes will continue to impact a majority of the country's growing regions, slowing growth on winter wheat.