Wheat

Colorado’s Biggest Snow in 1,100 Days Raises a Bigger Question: Is the Plains Pattern Finally Changing?

Mon, 11 May 2026 18:09:03 GMT

After one of the driest stretches in recent memory, parts of Colorado finally caught a meaningful shot of moisture this week , and for many farmers and ranchers, it felt long overdue.

A spring snowstorm dropped more than a half foot of snow across portions of eastern Colorado, bringing measurable relief to drought-stricken areas that have spent months watching systems miss them to the north or south.

According to the U.S. Drought Monitor, roughly five million Colorado residents remain in drought conditions, with drought coverage increasing nearly 8% from the previous week. But for producers who finally saw gauges fill and snow pile up, the storm offered something equally valuable: optimism.

The latest U.S. Drought Monitor shows 60% of the U.S. is experiencing drought, up from 44% just three months prior.

(U.S. Drought Monitor )

Near Keenesburg, Colorado, farmer Mark Arnusch reported approximately six inches of snowfall after receiving about a half inch of rain before temperatures turned colder. By his measurement, it was the largest single storm event his farm has experienced in nearly 1,100 days.

That statistic alone underscores how unusual the recent dryness has been across the western Plains.

The Winter That Wasn’t Across the West and Plains

Meteorologist Brian Bledsoe, based in Colorado, says many areas have endured a winter that barely resembled winter at all.

“We’ve only had about 12 minutes of winter this year,” Bledsoe says after measuring 7.5 inches of snow at his home south of Denver in Castle Rock.

Bledsoe says he spoke with Arnish about the timing of the storm and realized the last comparable moisture event occurred during another major climate transition.

“He was telling me the date that he last saw that moisture — May 12th, May 13th of 2023 — and ironically enough that was the last time we did this whole La Niña to El Niño switch,” Bledsoe says.

Now, Bledsoe says another atmospheric transition may be developing, one that could eventually favor better precipitation opportunities across the Plains.

Pattern Shift Could Bring Better Rain Chances to the Plains

Through mid-May, upper-level weather patterns still favor ridging in the West and troughing farther east, a setup that typically limits widespread moisture across the central United States.

“This has been kind of a more March-like pattern,” Bledsoe says. “But the precipitation anomalies associated with this pattern are not that conducive to moisture in the middle part of the country.”

In the short term, Bledsoe says many areas of the Plains could remain drier than average through at least the middle of May.

However, forecast models suggest a notable shift later in the month.

“We have upper-level ridging moving east over the middle part of the country and the Midwest and a trough of low pressure out along the California coast,” Bledsoe says. “This traditionally means more active weather coming back to the Plains.”

That evolving setup could increase thunderstorm activity and improve rainfall opportunities from the western Plains into parts of Texas.

“We are going to start to see the Plains wake up,” Bledsoe says. “Not only with better rain chances, but also more chances for severe thunderstorms during that period of time.”

Seasonal Models Lean Wetter for the Western Plains

While seasonal forecasts always carry uncertainty, several major long-range models are beginning to align around a similar signal: the western Plains may trend wetter this summer.

Bledsoe says the latest European seasonal model for June through August favors above-normal precipitation across the western High Plains, portions of the Intermountain West and parts of the Southeast.

“You can’t derive a ton from these models, but you can pick up some signals,” Bledsoe says.

The North American Multi-Model Ensemble and Canadian seasonal guidance also point toward improved moisture potential farther west, without signaling widespread drought expansion across the middle of the country.

Bledsoe says historical analog years support the same general idea.

“If we do a little digging in terms of history and look at these analog years — 1957, 1965, 1972, 1982, 1991 and others, those precipitation anomalies also favor areas farther west,” he says.

That does not mean every region benefits equally.

Bledsoe says portions of central and southeast Texas could still trend drier, while some areas of the Midwest may continue to see uneven rainfall distribution.

Still, for producers in Colorado, western Kansas, eastern New Mexico and nearby areas, the recent storm may be an early indication that a more active moisture pattern is finally developing.

Relief Arrives at a Critical Time

The timing, though, matters.Many winter wheat acres across the western Plains entered spring under significant moisture stress, while ranchers have continued battling poor pasture conditions and limited stock water supplies.

One storm will not erase long-term drought concerns. Subsoil moisture deficits remain significant across many areas, and producers know meaningful recovery requires repeated events over time.

But after nearly three years without a storm of this magnitude in parts of eastern Colorado, the latest snowfall delivered a reminder of how quickly conditions can shift when atmospheric patterns cooperate.

“Some rain coming back to the Plains, especially the western Plains, would certainly be a good start,” Bledsoe says.

The next several weeks will determine whether this storm was simply an isolated event — or the first sign of a broader weather turnaround for the Plains.

Why Can't Soybeans Bottom With China Purchases? Are They Buying Corn?

Fri, 19 Dec 2025 19:39:25 GMT

Corn and wheat ended higher Tuesday with soybeans lower. Livestock futures saw a down day in cattle but higher in hogs.

Corn Rallies on China Buying?
Corn futures were up for a second day after seeing technical buying and with some talk of China buying corn out of the Pacific Northwest. Ted Seifried with Zaner Ag Hedge says rumors of China purchases circulate nearly every time the corn market rallies. However, he is not seeing evidence of those purchases and doubts China needs corn. “I don’t know why China would buy U.S. corn. It wasn’t part of the agreement, which is yet to be signed. So unless it was politically motivated, I would think China would want to go to Brazil. They have this new relationship with Brazil. When it comes to their corn, I think they want to protect their relationships with Brazil,” he says.

He admits port values in the PNW did kind of spike and so did basis. However, he doesn’t think that necessarily means China. “It could be one of our normal customers, like Japan, for example,” he says.

Corn Sees Short Covering
So Seifried thinks the bounce was technically inspired buying after the March contract bounced off the 100-day moving average support area on Wednesday. However, corn has been trading sideways between that support and overhead resistance up at the 200-day moving average. He says if corn could finally close above that level for more than a day, it could take out the $4.50 area and stage a bit of a breakout.

“We saved a breakdown below the neckline of what could potentially be a head and shoulders topping formation in corn. Now, if we were able to get up and over that 200-day moving average for the fourth time, close above it and then not break down the very next day like we have the previous three times. We could potentially break out to the upside and really negate this potential head and shoulders formation,” Seifried explains.

Corn Needs a Catalyst
However, corn will need a catalyst to get above that chart resistance because farmer selling picks up when corn gets to the top side of the trading range. The catalyst could come in the January WASDE if USDA would lower yield. It would take a sizable cut to get the bulls excited and get below 2 billion bu. carryout he says. “I do think if you cut two or three bushel an acre off of corn, we’ll get below a 2 billion bu. carryover, but I don’t know about significantly below 2 billion bushel because it will be offset by USDA lowering feed and residual,” he explains.

Wheat Follows Corn
Wheat futures got spillover support from the corn market but Seifried says soft red winter wheat also saw technical buying to relieve its oversold condition. “Chicago wheat hit new contract lows Tuesday and Wednesday so it was due for a correction,” he says. However, wheat will have a tough time rallying due to the big global production. “USDA has had to continue to raise the world production number. I think we’re, what, 30 MMT off of the original number they had a few months ago,” he states. China canceling two cargoes of white wheat from the U.S. was also bearish for the market. “Anytime China cancels anything, that really does not help the market psychology.”

Why Do Soybeans Continue Lower Despite China Purchases?
The soybean market continues to slide despite the confirmation of export sales and China soybean purchases. USDA reported another 4.2 million bu. flash sale of soybeans to unknown destinations on Thursday morning and adds to the string of recent purchases that have included China. Seifried says however, that business has not been enough to support the market because it’s half the soybean purchases China made last year.

“The problem is, is that I think the markets realized that 12 million metric tons probably isn’t enough to get us to the USDA full marketing year expectations for our exports, and that they’ll probably have to cut exports again if China doesn’t buy above and beyond that 12 million metric tons. And while the buying is good, the pace does not suggest necessarily that they’re going to outperform on that one,” he explains.

Seifried says South American weather is also favorable and soybean prices in Brazil are cheaper than the U.S. and so there’s no reason for China or any other countries to buy soybeans if it isn’t politically motivated.

Funds also got near record long in mid-November while the government was shut down and they are exiting those positions. “The analyst guesses were, were so far off they weren’t even half of what the funds actually accumulated as far as their long position. And the funds have just simply lost interest in the story. And so they’re getting out of that position,” he adds.

Soybeans Make New Lows for the Move
Soybean futures made new lows for the move on additional technical selling and fund liquidation. Seifried says the market confirmed the head and shoulders top, fell to fill the chart gap areas and then closed below that level which is bearish. Funds got near record long in soybeans in mid-November and then started to bail on those positions and take profits and they are still liquidating.

Profit Taking in Cattle
Live and feeder cattle futures were down for a second day with the market consolidating after several attempts to take out chart resistance areas. Seifried says in live cattle the market has been capped by the 100-day moving average. So, cattle are at a pivotal point and need to fill gap areas on the chart to keep moving higher.

“I mean, the good news there is that both cattle and feeders did close well off their lows. So, you know, we didn’t completely fall apart after running into the one hundred day moving average, major moving average pretty much five days in a row. Not being able to to to break through it and break out to the upside and fill the gap above us. The market finally just gave in a bit.” he says.

Cash trade will also be a key. Thursday some light trade developed in the North at mostly $358 dressed, up $4, with a range of $355 to $363 and live sales prices at $228.

Lean Hogs Finish Higher
Lean hog futures were higher on short covering and fund buying after a lower day on Wednesday. Seifried says the hog market is also getting support from a possible seasonal bottom in cash and cutouts.

Hogs Ease After Big Rally, Cattle Hit Record Highs and Soybeans Gain After Trump/Xi Call

Fri, 06 Jun 2025 13:20:39 GMT

Hogs ended mostly lower on Thursday, with all-time highs in cattle and grains mostly higher as well.

Lean Hogs Consolidate Thursday After Recent Rally

Jeff Hoogendoorn, with Professional Ag Marketing, says lean hogs ended mixed to lower on Thursday with August seeing some profit taking after making new highs for the move early in the session. August hogs have been on a big rally gaining nearly $7 in seven sessions.

The consolidation came despite a positive call between President Trump and Chinese President Xi earlier in the day and decent weekly pork exports at 36,400 MT, with a sale of 12,700 MT to China.

Hoogendoorn was at World Pork Expo and says there is optimism about the hog market with the recent rally which has been pushed by higher cash and cutouts.

The CME lean hog index is up another 82 cents to $97.57 as of June 4. Pork cutout firmed $1.50 to $108.12 on Thursday. Both are trading at their highest levels since August 2023.

Packers cut kills the last few weeks he says and cutouts responded moving above $107, but at the same time there’s not an excess supply of hogs.

The deferred lean hog contracts just made new contract highs with disease concerns in production areas like Iowa, mostly due to PEDV.

Hoogendoorn says these prices are offering some profitable levels for hog producers all the way down the futures board.

Cattle Futures Explode To All-Time Highs

Cattle futures made all time highs in both live and feeder cattle offerings.

Funds stepped back in to buy with the steep futures discount to more record cash cattle trade.

Cash broke in the South already Wednesday at $225 to $228, up $3 to $6 from last week and there were some trades at $230 in Kansas before the close on Thursday.

Later in the afternoon light cash cattle trade developed in Texas at $232, up $10 from last week’s weighted average.

Light trade was also reported in Nebraska with dressed sales at $380, up $13 from last week’s weighted averages. Live deals at $240, up $5.

Soybeans React to Positive Trump/Xi Call

Soybeans saw gains Thursday, supported by positive news that Trump and Xi’s conversation went well.

President Trump posted on Truth Social that he and President Xi had a “very good” phone call and “resulted in a very positive conclusion for both countries.” Next steps involve a meeting between the countries respective teams with Secretary of the Treasury Bessent leading the U.S. team.

The market also saw additional fund and technical buying but was stopped short running into resistance with several moving averages layered overhead on the charts.

Corn Bounces After July Hits New Lows

Corn was higher as well with spillover from higher soybeans and still adding some weather premium.

However, July made a new low for the move and hit a level not seen since October of 2024, before bouncing.

Bear spreading continued to be a feature in the corn market with December gaining on July.

Despite a tight 1.4 billion bu. carryover, Hoogendoorn says the market is telling farmers there is no concern about running out of corn.

He says some of that pressure is coming from the big crop and much lower corn prices in South America.

Chinese Scientist Accused Of Smuggling ‘Potential Agroterrorism Weapon’ Into the U.S.

Wed, 04 Jun 2025 23:10:37 GMT

Two Chinese nationals have been charged with trying to smuggle a fungus, Fusarium graminearum, into the United States.

Yunqing Jian, 33, and Zunyong Liu, 34, citizens of the People’s Republic of China, were charged in a criminal complaint with conspiracy, smuggling goods into the U.S., false statements and visa fraud.

The charges against the pair were unsealed in the U.S. Attorney’s Office for the Eastern District of Michigan, on Tuesday.

The U.S. Attorney’s Office references Fusarium graminearum online as a “dangerous biological pathogen … which scientific literature classifies as a potential agroterrorism weapon.”

Fusarium graminearum causes significant diseases in a number of U.S.-grown food crops, including corn, wheat, barley, soybeans and rice.

Diseases caused include Fusarium head blight (scab) in wheat, and two corn diseases Gibberella ear rot and Gibberella stalk rot , which can lower yield and feed quality of silage corn, according to the Crop Protection Network, a partnership of land grant universities.

Toxins the fungus produces can cause vomiting, liver damage, reproductive defects and mycotoxin-induced immunosuppression in humans and livestock, including cattle, hogs, horses and poultry.

One Scientist Arrested, One Returned To China
The 25-page criminal complaint alleges Liu tried to smuggle the fungus through the Detroit Metropolitan Airport (DMA) in July 2024, so he could study it at a University of Michigan laboratory where his girlfriend, Yunqing Jian, worked at the time.

Jian had been living in the U.S. and working at the university laboratory since 2022.

The roots of the case involving Yunqing Jian, 33, and her boyfriend, Zunyong Liu, 34, stretch back to March 2024. That is when Liu applied for a B2 tourist visa to enter the U.S.

(The Detroit News and Sanilac County Jail)

According to the criminal complaint, Jian and Liu had both previously conducted work on the fungus in China.

Officials further allege Jian received funding from the Chinese government for her research on the pathogen in China. They also claim she is a member of the Chinese Communist Party.

Jian, who was arrested by the FBI, remains in federal custody. On Thursday, her detention hearing was adjourned until 1 p.m. June 13 to allow time for a new defense attorney to get up to speed.

Liu was sent back to China last year after changing his story during an interrogation at the Detroit airport about red plant material discovered in a wad of tissues in his backpack, the FBI says.

The U.S. does not have an extradition treaty with China, which makes Liu’s arrest unlikely unless he returns.

In a statement released on June 3, the University of Michigan said it condemns “any actions that seek to cause harm, threaten national security or undermine the university’s critical public mission.”

“It is important to note that the university has received no funding from the Chinese government in relation to research conducted by the accused individuals,” the university added. “We have and will continue to cooperate with federal law enforcement in its ongoing investigation and prosecution.”

In a statement released on June 3, the University of Michigan said it condemns “any actions that seek to cause harm, threaten national security or undermine the university’s critical public mission.”

(Michigan News Source)

Boyfriend Spills Intentions To Investigators
An article in The Detroit News said Liu told investigators during an interrogation at the Detroit airport he planned to clone the different strains and make additional samples if the experiments on the reddish plant material failed, according to the government.

“Liu stated that he intentionally hid the samples in his backpack because he knew there were restrictions on the importation of the materials,” an FBI agent wrote. “Liu confirmed that he had intentionally put the samples in a wad of tissues so CBP officers would be less likely to find and confiscate them, and he could continue his research in the United States.”

Liu told investigators he planned on using UM’s Molecular Plant-Microbe Interaction Laboratory to research the biological materials, the FBI agent wrote.

“Liu stated that, while he was in the United States, he would have free access to the laboratory at the University of Michigan on some days, and that other days his girlfriend would give him access to the laboratory to conduct his research,” The Detroit News article reported.

Before preventing Liu from entering the U.S. and sending him back to China, the investigators found messages between the couple that indicate Jian previously smuggled biological material into the U.S., the FBI agent wrote.

The messages are from August 2022 and discuss smuggling seeds into the U.S.

Lawmakers Respond To The Criminal Complaint
Attorney General Pam Bondi said in a statement that the Justice Department “has no higher mission than keeping the American people safe and protecting our nation from hostile foreign actors who would do us harm.”

“Thanks to the hard work of our excellent DOJ attorneys, this defendant — who clandestinely attempted to bring a destructive substance into the United States — will face years behind bars,” the attorney general says.

“I can confirm that the FBI arrested a Chinese national within the United States who allegedly smuggled a dangerous biological pathogen into the country,” FBI Director Kash Patel said on Tuesday.

(FBI)

FBI Director Kash Patel addressed the arrest of Jian late Tuesday on X, formerly Twitter.

“This case is a sobering reminder that the CCP (Chinese Communist Party) is working around the clock to deploy operatives and researchers to infiltrate American institutions and target our food supply, which would have grave consequences … putting American lives and our economy at serious risk.”

U.S. Custom and Border Protection, Director of Field Operations Marty C. Raybon says the criminal charges against Jian and Liu are indicative of CBP’s critical role in protecting the American people from biological threats that could devastate its agricultural economy and cause harm to humans.

“This was a complex investigation involving CBP offices from across the country, alongside our federal partners,” says Raybon in a prepared statement. “I’m grateful for their tireless efforts, ensuring our borders remain secure from all types of threats while safeguarding America’s national security interests.”

Your next read: Surveillance State: Game Wardens Sued for Secret Private Land Intrusions in Alabama

Why Did the Ag Markets Fade China Trade Talk News?

Thu, 08 May 2025 15:02:00 GMT

Grain and livestock futures closed mostly lower on Friday.

It was a disappointing close considering the news that top trade officials from the U.S. and China were meeting in Geneva this weekend to de-escalate the trade war.

Dave Chatterton, Strategic Farm Marketing, says the markets faded the news as the realization set in that no major breakthroughs in the trade talks are expected and a long term trade deal with China could take quite some time.

President Donald Trump also said Wednesday he’s unwilling to preemptively lower tariffs on China in order to unlock more substantive negotiations with Beijing on trade.

Weather was also a headwind for the corn and soybean markets with fast planting pace and more rain in the forecast for dry areas of the hard red winter wheat belt.

The market is also positioning ahead of the May WASDE and USDA Chief Economist Seth Meyer has confirmed they will start to consider the impact of tariffs in the new crop balance sheets.

“That could make these early estimates look a bit too friendly,” says Chatterton.

July corn made new lows for the move hitting chart resistance, failing and then testing triple bottom support on the charts at $4.51.

“It was a big outside day lower,” explains Chatterton, “And so tomorrow’s action will be important to see if there is further technical breakdown.”

Wheat has been an anchor for the corn market with improving crop conditions tied to recent rain.

Lower prices relative to corn are pushing wheat into the feed ration.

The higher dollar and lower crude oil markets were also bearish for the grain complex.

The FOMC meeting concluded with the Fed holding interest rates steady at 4.25% to 4.50%, as widely expected.

However, Chatterton says Fed Chair Jerome Powell said the labor market was solid and inflation was still somewhat elevated, but the uncertainty in the economic outlook moving forward tied to tariffs.

Cattle futures saw a correction off of Tuesday’s new contract highs, despite higher cash trade.

So far business in the South, has ranged from $218 to $220, steady to $2 higher, with $219 paid on Wednesday.

So is this divergence a concern?

Chatterton calls it a healthy correction in a bull market that continues to be supported by cash and consumer demand with Choice beef values at two year highs.

Lean hogs also had a disappointing day, also fading at least slight progress on trade with China.

Tariff Delay Rallies Ag and Outside Markets, Trumps China Trade War

Wed, 09 Apr 2025 20:36:40 GMT

Grain, livestock and especially outside markets soared on Wednesday.

Arlan Suderman, StoneX Chief Commodities Economist says the markets reacted positively to the 90-day delay on reciprocal tariffs for countries that reached out to negotiate with the U.S. and did not retaliate.

A 10% universal tariff is still in place but over 75 countries have reached out to avert tariffs and were rewarded.

It was an unprecedented day in the stock market which reversed and surged in reaction.

“Its a smart move by the Trump Administration because it buys them time to negotiate deals with these 75 countries and the markets have time to absorb that news and calm down,” he explains.

Suderman says this also puts to rest the talk of global recession, which had tanked the stock market, the energy sector and even cattle futures.

“I think the market took it as a positive step forward. Now it’s up to the Trump administration to actually come through and turn those negotiations into something positive, meaning lower tariffs for everybody. And if they can do that, we can actually result to see greater global economic growth and greater demand for commodities,” he adds.

The grain and livestock futures also posted a relief rally despite the escalation of the trade war with China.

China announced retaliatory tariffs of 50% which drew a negative response from President Trump as he slapped another 125% tariff on Beijing.

Suderman says, “Ultimately containing China is one of Trump’s top goals and since they
led the way in retaliation, that’s another reason he said that if any country retaliates, we will keep adding to it. Since that’s what they’ve done, he doesn’t want to give any signal of rewarding that type of behavior,”

He says it took Trump three years to get a trade deal out of China in his first term and he is trying to get a quicker response this time around.

“With a weaker economy, he felt like he could do that. Now, I don’t know if we’re any closer to a trade agreement with China, Because right now they feel like they’re being bullied, so their pride is hurt, and so they’re backing off and they’re fighting.”

The Chinese are trying to buy time according to Suderman.

“Hoping that the consumer will turn on Trump, and therefore Congress will turn on Trump and limit his powers or ability to do this. But today’s move kind of cuts that strategy short,” he adds.

The total tariffs on U.S. pork imports into China, according to the U.S. Meat Export Federation, are at 131% and for beef at 106%.

The American Soybean Association confirmed China’s tariffs on U.S. soybeans are now at 114%.

At what point does China finally break down and negotiate?

Suderman says that’s hard to predict.

The grain markets were shrugging off the China news before the tariff delay as Chinese tariffs won’t impact the current soybean crop and the White House also said it was pausing the Section 301 fees on vessels of Chinese origin and is looking at restructuring those fees.

He thinks the markets can go back to trading their own fundamentals and in the case of the grains that includes Thursday’s WASDE.

Suderman anticipates a tightening of the balance sheets, at least for corn which is positive.

Grains Markets Absorb Tariff News, But Why Did Livestock Fail?

Tue, 08 Apr 2025 18:38:33 GMT

Grains end mostly higher on Monday, with livestock seeing triple digit losses.

Naomi Blohm, Total Farm Marketing, says old crop corn and soybeans rebound as well as the wheat market which have absorbed much of the tariff news.

Of course corn and wheat are USMCA compliant and so that leaves those commodities less impacted by tariffs than soybeans which have been hit by China retaliatory measures.

However, she says corn and wheat were also adding weather premium.

Flooding in the Ohio River Valley and mid-South will cause some replant and planting delays, which the corn market can’t afford with the push to plant 95.3 million acres.

Soft red winter wheat area also saw flooding and there was some freeze damage over the weekend in hard red winter wheat fields.

Wheat also saw some short covering as the funds are still largely short all three wheat classes.

Soybeans also saw some short covering off the lows but may still be vulnerable with possible China soybean cancellations of soybeans left unshipped.

Grains are also positioning ahead of Thursday’s WASDE Report with anticipation of lower old crop ending stocks for corn.

Blohm says demand has been strong for old crop corn and she thinks its possible the carryout could come in below the trade estimate of 1.5 billion bu., which would be bullish.

As far as South America crop adjustments, she isn’t expecting many changes by USDA in this report.

Livestock saw triple digit losses with additional fund liquidation despite a recovery off the lows in the stock market.

Blohm says cattle were due for a correction and have seen fund selling with the plunge in the stock market and recessionary fears.

So the lower close despite a recovery in financial markets off the lower was discouraging.

However, she says so far cattle futures are still holding uptrend lines on the charts.

Lean hog futures also ended lower after some early strength as President Trump renewed threats to increase Chinese tariffs another 50% if Beijing did not lower their retaliatory measures.

EXCLUSIVE: Ag Secretary Brooke Rollins Provides Timing Update on $10 Billion in Emergency Relief Payments

Thu, 27 Feb 2025 16:36:22 GMT

Time is running out for USDA to issue the nearly $10 billion of economic relief payments to farmers . Congress approved a 90-day window to release those payments, and in an exclusive interview with U.S. Secretary of Agriculture Brooke Rollins Thursday morning, we asked when exactly those payments will be released. Rollins confirmed to Farm Journal that those payments will be released before the current deadline.

“Congress gave us until March 21, that is the ideal deadline,” Rollins said. “It looks like we’re going to be able to beat that, so it should be just around the corner.”

As USDA works to release those payments within the next few weeks, according to some sources, producers are banking on the payments, even making business decisions based on projected payment calculations.

Pro Farmer Washington policy analyst Jim Wiesemeyer says the only issue that could impact that timing is a possible government shutdown. If the government shuts down beginning March 15, and those payments haven’t been released yet, that could impact the March 21 deadline.

Wiesemeyer also reports based on history, the initial payment will likely be around 85% of the projected total, with a supplemental payment likely coming in the summer. Most expect the per acre payment rates to be in line with what staffers on the House Ag Committee released last year, which are:

Corn: $43.80
Soybeans: $30.61
Wheat: $31.80
Cotton: $84.70
Rice: $71.37

Payment Cap
Like other recent disaster programs, the payment limit for farmers will depend on how much of a farmer’s income is derived from agriculture. However, this program is based on average gross income rather than adjusted gross income (AGI).

The payment cap will be:

If < 75% of average gross income from 2020 to 2022 is from agriculture, then the limit is $125,000
If 75% or more of average gross income from 2020 to 2022 is from agriculture, then the limit is $250,000
USDA says standard FSA “actively engaged in farming” requirements apply

While USDA will determine the finalized per acre payments, these are the estimated American Relief Act payments for farmers.

(Lindsey Pound )

Update on Timing of $1 Billion to Combat Avian Flu
Led by Rollins, USDA announced on Wednesday plans to invest up to $1 billion in new funding to combat impacts of highly pathogenic avian influenza (HPAI) and soaring egg prices.

“The important piece is not just this immediate short-term goal of getting the cost of eggs down and repopulating our layers and locking our barns down,” Rollins told Farm Journal on Thursday. “But much more importantly, perhaps, is figuring this out for the long term, so we’re not having the same conversation over and over and over again.”

The avian flu plan, which USDA rolled out on Wednesday, includes five major points:

Dedicate up to $500 million to help U.S. poultry producers implement “gold-standard” biosecurity measures. USDA has developed a successful pilot program, called Wildlife Biosecurity Assessments, to identify and implement more safety measures. USDA will pay up to 75% of the cost to address any identified biosecurity vulnerabilities at poultry farms.
Make up to $400 million of increased financial relief available to farmers whose flocks are affected by avian flu, and USDA will assist farmers in receiving faster approval to begin safe operations again after an outbreak.
USDA is exploring the use of vaccines and therapeutics for laying chickens. While vaccines aren’t a stand-alone solution, they will provide up to $100 million in research and development of vaccines and therapeutics, to improve their efficacy and efficiency. This should help reduce the need to depopulate flocks, which means killing chickens on a farm where there’s an outbreak. Note: USDA hasn’t yet authorized the use of a vaccine. Before making a determination, USDA will consult state leaders, poultry and dairy farmers, and public-health professionals. The agency will also work with trading partners to minimize potential negative trade effects for U.S. producers and to assess public-health concerns.
USDA will take other actions to lower the price of eggs. For starters, it will remove unnecessary regulatory burdens on egg producers where possible. This will include examining the best way to protect farmers from overly prescriptive state laws, such as California’s Proposition 12, which established minimum space requirements for egg-laying hens.
USDA will consider temporary import options to reduce egg costs in the short term. They will proceed with imports only if the eggs meet stringent U.S. safety standards and if they determine that doing so won’t jeopardize American farmers’ access to markets in the future.

As for the $500 million that will go toward beefing up biosecurity efforts, Rollins says that will happen immediately.

“The team is putting together right now the guardrails for that, but I think they’re almost finished, and that money should be moving out very quickly,” Rollins told Farm Journal. “That biosecurity money is based on a pilot program where 150 different egg laying farms were piloted on specific biosecurity measures. Of those 150, only one has seen the avian flu. Once they implemented, there’s a massive audit that USDA comes in. They help audit. We’re hiring a whole bunch of new folks to come on board to do that — and new epidemiologists to help us work through all of the science on this, and hopefully you see that immediately.”

Where is the $1 Billion Coming From?
At a time when the Trump administration is looking to save money, not spend, we asked Rollins where exactly is the $1 billion of funds going to be sourced.

“We’ve repurposed funds from other programs within USDA, so this is not spending new money,” Rollins said. “Clearly, we’re in an era where President Trump’s vision is to really streamline government, but this is not that. This is outside that lane. This is a really, really important issue. You know, it’s affecting every single American, not just our poultry producers. And so there’s short-term and long-term fixes here now.”

Some of that money, however, is coming from savings from the Department of Government Efficiency (DOGE).

“We are pulling it from multiple different pots. But yes, there’s no doubt that we’ve been able to find some serious savings in DOGE,” Rollins said. “We’ve canceled almost a thousand DEI trainings that were across USDA.... All of it adds up, and we’ve really pulled a lot of that money back. And now putting it where we think it really helps farmers and ranchers.”

What Will It Take for the Ag Economy to Recover

Rollins is set to give the keynote address at USDA’s Ag Outlook Forum on Friday. Rollins told Farm Journal there are a lot of farmers hurting in this economy, saying “it’s one of the worst for that industry that we’ve seen in decades.”

Considering 64% of ag economists think the row crop sector of agriculture is in a recession , we asked Rollins what it will take for the ag economy to recover.

“There’s no doubt, to your point, a lot of our producers in the different lanes are really hurting. Listen, we’ve got to get the cost of input down. We have got to get our export markets opened up around the world. I mean, we’re facing this year a $45 billion trade deficit,” said Rollins.

Rollins says when President Trump left the White House in 2020, there wasn’t a trade deficit. And she says the growign trade deficit is something President Trump wants to address.

“Just think about the amount of ag production that we were once moving out across the world that was keeping our farmers whole and making sure that they could make some kind of a profit,” said Rollins. “That’s not there anymore. Obviously, inflation, the cost of energy has absolutely decimated our producers. The input cost is up 30%. So when you’ve got all of these different factors that are basically piling on at one time, it’s it’s no surprise that sorghum, cotton and so many others are really hurting right now. And we’ve got to do something about that.”

As input prices remain elevated, and commodity prices are below break-even for some, Rollins says she and President Trump are aligned in what needs to happen to bring relief to farmers.

“My perspective, and the president’s perspective, is how do we achieve this through broader access to markets, broader access to capital, making sure that that the cost of inputs goes down. Hopefully with our energy plan, we see that happening almost immediately. And I think that will move into a different era for prosperity for ag, but there’s no doubt it is a dire, dire forecast right now without significant change.”

During the the first Cabinet meeting in President Trump’s second-term, which was held Wednesday, President Trump floated 25% tariffs on the European Union.

“Obviously, tariffs always come up. I’m always saying, ‘let’s be very, very careful and intentional how we move here,’” Rollins said about the first Cabinet meeting. “The border came up, immigration deportations came up. So all the things that the ag community is concerned about that came up, course, I’m at the table. My job is to ensure that that our community’s voice is heard, but also to help effectuate the president’s vision. And we’re moving forward on all fronts.”

You can listen to the complete interview with Secretary Rollins below.

Your Next Read:
EXCLUSIVE: As DOGE Works to Stop ‘Wasteful Spending,’ Ag Secretary Rollins Says Vital Farm Programs Aren’t at Risk

Feeding Wheat as a Cereal Source for Swine

Tue, 02 Jul 2024 10:18:00 GMT

By Joel DeRouchey, Ethan Stas, Mike Tokach, Jason Woodworth, Bob Goodband, Jordan Gebhardt and Katelyn Gaffield. Kansas State University

Wheat is a major cereal grain utilized in swine diets across the world. Wheat typically serves as a main cereal grain in Canadian, European and Australian swine diets. Wheat is used many parts of the U.S. and is incorporated more widely depending on availability and cost.

Wheat has several attributes that make it help it beneficial when formulating into a swine diet.

• Wheat contains higher levels of crude protein and amino acids compared to most other cereal grains. This allows for less soybean meal inclusion in the diet. Wheat’s standardized ileal digestibility (SID) of amino acids is similar to corn, but greater than barley and sorghum.

• Phosphorus content of wheat is 0.27% and has very high digestible P because it contains intrinsic phytase. The standardized total tract digestible P in wheat is 0.218%, whereas corn is only 0.088% (NRC, 2012).

• While historical data reported wheat had an energy value of 91 to 97% of corn, data generated from 2014 to 2020 suggests that wheat’s mean energy content is 99 and 98% of the energy of corn for DE and ME, respectively. Therefore, wheat can be utilized at a similar rate as corn without a major decrease in the diet energy density.

• Pelleted wheat diets have been found to have significantly greater pellet durability index by 33.1% units compared to corn-based diets. Even if wheat is not utilized as the main cereal grain, it can be incorporated into diets as a pelleting aid.

Off-Quality Wheat

Off-quality wheat that cannot be used by the flour milling industry can be utilized in swine diets. However, this type of wheat is often associated with physical abnormalities or contamination that affect its nutritional value compared to regular wheat.

Sprouted Wheat

Poor weather conditions can result in germination and sprouting of wheat kernels before they are able to be harvested and are not suitable for the flour milling industry. Activity of α-amylase, which is responsible for starch breakdown, increases in sprouted wheat. Therefore, the energy content of sprouted wheat may decrease depending on the severity of sprouting. There is very limited data with the growth effects of sprouted wheat in swine diets and it is recommended to blend sprouted wheat with non-sprouted wheat or other cereal grain.

Low Test Weight

Poor growing conditions, high moisture during the growing season, insect damage, and sprout damage can result in low test-weight wheat. Normal wheat test weight is typically around 58 to 60 lb./bu. depending on the class of wheat. Low test-weight wheat is characterized at or below 51 lb./bu. Data suggested that wheat’s energy content should be decreased by approximately 5% when bushel weight is 51 lb. or lower.

New factsheets that summarize modern data were recently developed for use of wheat, off-quality wheat and wheat co-products in swine diets.

WASDE: Season-Average Prices Unchanged

Thu, 13 Jun 2024 00:12:08 GMT

World Agricultural Supply and Demand Estimates as published by USDA

WHEAT

The outlook for 2018/19 U.S. wheat this month is larger supplies, reduced domestic use, unchanged exports, and higher ending stocks. Wheat production is raised 7 million bushels to 1,884 million from the NASS Small Grains Summary, issued on September 28. Projected imports increased 5 million bushels to 140 million on higherthan-expected imports of spring wheat and Durum in the first quarter (June-August). The NASS Grain Stocks report indicated a 21 percent year-to-year increase in implied disappearance for first quarter feed and residual. But record-large 2018/19 U.S. corn supplies are expected to restrain feed and residual use for the remainder of the year with the annual estimate reduced by 10 million bushels to 110 million. Wheat exports are unchanged at 1,025 million bushels but there are offsetting by-class changes with White higher and Hard Red Winter lower. Projected ending stocks are higher at 956 million bushels but still 13 percent below last year’s revised 1,099 million. The season-average farm price range is unchanged at the midpoint of $5.10 per bushel and the range is narrowed to $4.80 to $5.40.

Global 2018/19 wheat supplies are reduced, primarily on lower production forecasts for Australia and Russia. Australia’s production is decreased 1.5 million tons to 18.5 million on continued dry conditions and possible frost damage. This would be Australia’s smallest production since 2007/08. Russia’s wheat production is reduced 1.0 million tons to 70.0 million on lower-than-expected yields in some spring wheat areas. Projected global 2018/19 trade is lower, almost all on reduced Australian exports, which are down 1.0 million tons to 13.0 million. Global imports are decreased with Bangladesh, Azerbaijan, and Nigeria accounting for most of the reduction. Projected 2018/19 world consumption is fractionally lower, primarily on less use in Azerbaijan, Bangladesh, Nigeria, and the United States. Global ending stocks are reduced 1.1 million tons to 260.2 million, down 5 percent from last year’s record.

COARSE GRAINS

This month’s 2018/19 U.S. corn outlook is for lower production, increased exports, reduced feed and residual use and larger ending stocks. Corn production is forecast at 14.778 billion bushels, down 49 million on a reduced yield forecast. Harvested area is virtually unchanged from last month. Corn supplies are forecast record high, as a smaller crop is more than offset by an increase in beginning stocks based on the September 28 Grain Stocks report. Exports are raised 75 million bushels reflecting U.S. price competitiveness and reduced exports for Russia. Projected feed and residual use is lowered 25 million bushels based on a lower crop and indicated disappearance during 2017/18. Corn ending stocks for 2018/19 are raised 39 million bushels. The projected midpoint for the season-average corn price received by producers is unchanged at a range of $3.00 to $4.00 per bushel.

Grain sorghum production is forecast higher from last month, as a 3.9-bushel per acre increase in yield to 75.0 bushels per acre is partially offset by a reduction in harvested area. Barley and oat production estimates are updated based on the September 28 Small Grains Summary report.

Global coarse grain production for 2018/19 is forecast down 3.8 million tons to 1,343.4 million. The 2018/19 foreign coarse grain outlook is for lower production and consumption, and higher stocks relative to last month. Foreign corn production is forecast modestly higher reflecting projected increases for Egypt, Mali, Kenya, Canada, the EU, and Serbia that are partly offset by reductions for Russia and Malawi. The projected corn yield for Russia is lowered based on reported harvest results to date.

Corn exports are reduced for Russia, with more than offsetting increases for the United States, Serbia, and Canada. Corn imports are raised for Mexico and Israel, with the former based on lowered expected imports of sorghum. Foreign corn ending stocks are higher, mostly reflecting increases for Mexico, Egypt, and Iran that are partly offset by reductions for South Africa and Turkey. Global corn stocks, at 159.4 million tons, are up 2.3 million from last month.

RICE

The 2018/19 rice crop is reduced 0.7 million cwt to 218.8 million on lower yields. The average yield forecast is lowered 24 pounds per acre to 7,539 pounds. Decreases are in Texas and California. The long-grain crop is reduced 0.5 million cwt to 159.0 million. Medium- and short-grain production is lowered 0.2 million cwt to 59.8 million. All rice ending stocks are lowered 0.7 million cwt to 44.2 million as no other supply and demand changes are made this month. The all rice season-average farm price is unchanged at a range of $11.20 to $12.20 per cwt with the midpoint at $11.70.

Foreign rice supplies for 2018/19 are raised 0.9 million tons mainly on increased production. India’s crop is raised 1.0 million tons and Madagascar is raised 0.4 million, both on updated government data. Partly offsetting is a 0.5-million-ton reduction for Egypt on new government policies that restrict rice production. Global trade and consumption are only changed fractionally. With supplies rising more than use, global ending stocks are increased 0.8 million tons to 145.2 million.

OILSEEDS

U.S. oilseed production for 2018/19 is projected at 138.4 million tons, down 0.1 million from last month with lower soybean and sunflowerseed production only partly offset with higher canola production. Soybean production is forecast at 4,690 million bushels, down 3.5 million with higher yields offset by lower harvested area. The soybean yield is projected at 53.1 bushels per acre, up 0.3 bushels from the September forecast. Harvested area is reduced 0.6 million acres to 88.3 million. Increases for North Dakota, Nebraska, and Iowa are more than offset by reductions in many other states. Soybean supplies for 2018/19 are projected at a record 5,153 million bushels on higher beginning stocks. With soybean use unchanged, ending stocks are projected at 885 million bushels.

The 2018/19 U.S. season-average soybean price is forecast at $7.35 to $9.85, unchanged at the midpoint from last month. Soybean meal and soybean oil price projections are also unchanged at $290 to $330 per short ton and 28.0 to 32.0 cents per pound, respectively.

Global oilseed production for 2018/19 is projected at 603.9 million tons, down 0.7 million from last month as lower peanut production is partly offset by higher soybean and rapeseed production. Global soybean output is projected at a record 369.5 million tons, up 0.2 million with higher production for Canada partly offset by lower projections for India, the United States, and Mexico. The soybean and peanut crops for India are reduced on lower area harvested based on government reports. India’s peanut yield is also reduced due to below-normal and inconsistent rainfall in Gujarat where nearly half of the peanuts are produced. Despite lower global oilseed production, increased beginning stocks, mainly in the United States, results in a 2.0 million-ton increase to global oilseed ending stocks to 123.8 million. Global soybean ending stocks are increased 1.8 million tons to 110.0 million.

LIVESTOCK, POULTRY, AND DAIRY

The forecast for 2018 total red meat and poultry production is lowered from last month. Beef production is reduced from the previous month largely due to lower expected fourth-quarter fed cattle slaughter. Carcass weights are forecast lower on a higher expected proportion of cows in the slaughter mix. The pork production forecast is lowered on smaller second-half commercial hog slaughter and lighter carcass weights. The broiler and turkey production forecasts are reduced on expectations of slightly lower slaughter for the remainder of the year. The 2018 egg production forecast is raised from last month.

For 2019, the total red meat and poultry production forecast is raised from the previous month as higher expected beef production more than offsets lowered forecasts for pork and broiler production. Beef production is raised from last month as larger placements in late 2018 and early 2019 are marketed during 2019. However, carcass weights are lowered for the early part of the year. Pork production is forecast slightly lower from last month. Both hog slaughter and carcass weight forecasts are reduced. The 2019 broiler production forecast is reduced from last month while the turkey production forecast is unchanged.

Beef import forecasts are lowered for 2018 and 2019 while beef export forecasts remain unchanged. Pork import forecasts for 2018 and 2019 are reduced from last month. No change is made to the 2018 pork export forecast, but the 2019 export forecast is raised on strong global demand for competitively priced U.S. pork products. The 2018 and 2019 turkey export forecasts are reduced from last month on recent trade data and slower expected demand into next year. Annual broiler and egg export forecasts for 2018 and 2019 are unchanged from last month.

The 2018 cattle price for the fourth quarter is raised from last month, but no change is made to the 2019 price forecast. The hog price forecast is raised for the last quarter of 2018 and into 2019 on expected demand strength. Broiler and turkey price forecasts are unchanged at the midpoint for 2018 and 2019. The egg price forecast for fourth-quarter 2018 is raised on near-term demand strength, but no change is made to the 2019 price forecasts.

The milk production forecasts for 2018 and 2019 are raised from the previous month on a more rapid pace of growth in milk per cow. Cow numbers are raised for 2019. Fat basis imports for 2018 and 2019 are raised on continued strength in butterfat imports and slightly higher cheese imports. The 2018 and 2019 skim-solids basis import forecasts are lowered from the previous month. Exports on a fat basis are raised for 2018 on stronger cheese exports, but no change is made to the 2019 export forecast. Skim-solids basis exports for 2018 are raised, primarily on stronger nonfat dry milk (NDM) and whey product shipments.

For 2018 and 2019, butter and whey price forecasts are raised from the previous month on expected demand strength, but the cheese price forecasts are lowered on continued large supplies. The NDM price forecast is unchanged. The Class III price is lowered for 2018; but for 2019, higher whey prices are expected to more than offset the declines in cheese prices, and the Class III price forecast is raised. The Class IV price is raised for both years due to higher forecast butter prices. The 2018 all milk price forecast is unchanged at the midpoint at $16.35 to $16.45 per cwt, and the 2019 price is raised to $16.85 to $17.75 per cwt.

COTTON

The 2018/19 U.S. cotton supply and demand estimates show higher ending stocks, based on slightly larger production and lower exports relative to last month. Production is raised 81,000 bales, with higher production in Texas and Georgia largely offset by lower production in the Carolinas. Domestic mill use is unchanged from last month, but the export forecast is reduced 200,000 bales to 15.5 million, due to reduced world trade and consumption. Ending stocks are forecast at 5.0 million bales, and the resulting stocks-to-use ratio of 26 percent is slightly higher than the previous month’s forecast, and the highest since 2015/16. The forecast range for the marketing year average farm price is 69.0 to 77.0 cents per pound; the midpoint of 73.0 cents is down 2 cents from the previous month’s projection.

The 2018/19 global ending stocks forecast is lowered 4 percent this month as lower production and sharply lower beginning stocks offset marginally smaller consumption. Stocks are lowered mainly in India, as revisions are made to production, consumption, and loss over 2002/03-2013/14 to better reflect Indian government data (consumption) and the impact of shifting producers’ marketing patterns (see the October 2018 issue of the FAS Cotton: World Markets and Trade publication). Production forecasts are lowered for Australia, and raised for Greece and the United States. Consumption and imports are lowered for Turkey. Global beginning stocks are lowered 2.9 million bales and ending stocks are lowered 3.0 million bales. Ending stocks in 2018/19 are down 6.4 million bales from last year, largely reflecting an expected 8.2-million-bale decline in China.

Read the full report.

Are You Ready For the Polar Plunge? Some Areas Could See Temperatures Plummet to Negative 40 Degrees

Fri, 12 Jan 2024 20:12:40 GMT

There’s only one way to describe the cold taking hold of the U.S. right now.

“It’s going to be nasty,” says Drew Lerner, an agricultural meteorologist and founder of World Weather. “If you are out in the northwestern Great Plains, it is going to be unbearable.”

Lerner says as snow barrels across the upper Midwest, the cold is creeping into the picture. By this weekend, the frigid temperatures will blanket much of the U.S., but the western Great Plains will be in the bullseye of the cold.

“We are going to see temperatures drop to minus 47 in Montana. Temperatures in the negative 30s and negative 20s will occur in the rest of Montana, as well as in the western parts of the Dakotas, and southward into a part of Wyoming and also western Nebraska.

Those frigid temperatures are for the actual temperature, not even how cold it will be when the wind chill is factored in. Lerner says considering how cold it’s going to be, he thinks temperature records will be broken.

“Not only in the northern Great Plains, there may be a couple of spots in the Central Plains,” say Lerner. “But mostly the northern Plains and into Canada will see records. In western Canada’s prairies, we will probably see at least a couple of locations get down to minus 50 or minus 49, somewhere in there. So, yes, there will be record cold. Now, for the Midwest, probably not so much. But it’ll be cold enough it won’t matter.”

(Farm Journal)

Lerner says in parts of the upper Midwest and Red River Basin, temperatures will still drop into the negative teens.

Dangerous for Livestock

It’s Montana and portions of the northern Great Plains that are smashing records with this cold. With minus 30 to minus 40 degree forecasts in some areas, it’s the vicious swing in the temperatures that is what makes the weather such a threat to livestock.

“From a livestock perspective, some of these temperatures are just going to be brutal,” says Lerner. “The animals in Montana have not been adequately hardened against the winter weather because it’s been so warm. They’ve had 50- and even some 60-degree temperatures in the past couple of weeks.”

From 40 degrees above zero earlier this week to now a 40-degree below zero forecast for the coming days, Lerner says it’s dangerous for livestock.

“The situation is going to be stressful for the animals. There might be some reduction in milk production for the dairy areas, and then we’ve got a little potential for some weight-gain concerns in beef cattle country. That might be an issue,” says Lerner. “And of course, in the hogs’ area, we probably will have some stress. I just don’t think there’s going to be as much of a potential for a big issue there.”

Little Snow Cover Puts Winter Wheat at Risk

From cattle to crops, winter wheat may be exposed to the cold. Lerner doesn’t expect any major problems with damage, but he says what makes the wheat crop at such risk is the fact there’s little to no snow cover in that part of the Great Plains.

“I don’t think there’s going to be a widespread problem. But in some areas with what little snow is going to be on the ground, the potential is still there that there could be damage done to the crop,” says Lerner.

(Farm Journal)

Stratospheric Warming Causing the Polar Plunge

As much of the U.S. braces for the cold, the positive in the forecast is Lerner thinks the arctic air will be fairly short-lived.

“The whole reason for this event is due to stratospheric warming that took place in late December,” he says. “Stratospheric warming is literally warming that occurs in the stratosphere, that is outside of where we live and outside of where the weather lives.”

The weather lives in the troposphere, which is the layer below the stratosphere. Lerner explains that when the stratosphere turns warmer, it expands that layer in the atmosphere and puts pressure on the troposphere.

“That forces cold air that’s aloft down to the surface. And then it gets spread out from the Arctic,” Lerner explains.

(Farm Journal)

At the same time, El Nino is helping drive moisture up from the South, which is causing the severe storms the U.S. saw in areas from the Southwest to the East Coast this week.

As Lerner looks ahead, he’s not only concerned about this week’s cold in the Great Plains, but the fact the northern Great Plains may not see much moisture this winter.

“We will continue to perpetuate storms periodically across the southern U.S. into maybe the lower part of the Midwest and into the Southeast,” says Lerner. “But as far as getting big storms occurring in the western Corn Belt of the northern Great Plains or even the Central Plains that’s going to be a little bit harder to come by.”

Now Is the Time to Pay Attention to the Weather Forecast: Severe Snowstorm Forecasted to Dump Multiple Feet of Snow

Fri, 05 Jan 2024 21:08:28 GMT

As the calendar flipped to the new year, Mother Nature unleashed the potential for back-to-back blasts of winter weather. From the possibility of blizzard conditions early next week, to flooding in the southeast, the impact on agriculture could be two-fold: a possible cure for drought conditions in parts of the Plains and South, but stressful for livestock.

USDA meteorologist Brad Rippey says the forecast is pointing to a very active weather winter pattern in January, which is a hallmark of El Niño.

“There’s no question about it. As I always say, you can’t blame an individual or a single storm and El Niño, but you start looking at the overall patterns, and there’s absolutely no question that when you start seeing a pattern setting up like this, a storm pipeline from the Pacific coming across the Southwest and into the Midwest or east, that is El Niño,” Rippey says.

Eric Snodgrass is a well-known ag meteorologist who’s also watching the change in potential winter weather this month. He says El Niño reached its peak at the end of December.

“It has plateaued. And what that typically means is we tend to have what we call a back-half weighted winter, which means December is usually pretty mild, not a whole lot to talk about, but once we get going into this new year, that jet stream is really going to start to become quite a bit more active,” Snodgrass says.

Active Jet Stream Set to Bring Multiple Winter Storms

The active jet stream is exactly what the U.S. is now seeing, with multiple storms lined up for the start of the year. Rippey says it’s an active storm track that starts in the South, eventually ending up along the East Coast.

“The storm that’s coming out late this week, it’s going to be a decent storm system - a decent winter storm. But it’s going to pale in comparison to the blockbuster storm that we see coming for early next week,” he says.

High Plains with current storm 53% covered in shallow layer of snow. Feet of snow on the way? pic.twitter.com/fAZzWeHurr
— Allen Motew (@QTweather) January 5, 2024

Snowfall reports from the National Weather Service (NWS) Albuquerque, New Mexico station shows impressive snowfall already falling in the Rocky Mountains. As of midday Friday, January 5, NWS reports 10 to 18 inch snowfall totals in the southern Rockies before it made its way across Kansas.

Eye-Popping Snowfall Totals Possible

However, Rippey says this first snow system isn’t the headline. Early to mid-week next week, a different significant storm will emerge from the Southwest and Four Corners region, which could bring monstrous snowfall totals.

“That storm will be going across the Central and Southern Plains Monday and reach the lower Great Lakes region by Wednesday,” Rippey says. “That system really has the potential to create a wide degree of disarray across the country.”

(Farm Journal)

The storm early next week will pack a punch with high winds, but it will also bring much needed drought relief. NOAA is warning of weather impacts that will span from Coast to Coast. They report heavy snow is likely in the higher elevation with blizzard conditions possible. The high winds are expected to hit much of the Central and Eastern U.S., with some winds exceeding 50 MPH.

“Some of them can be big snow makers through parts of the Midwest and some of them are putting down some heavy rains across the South,” Snodgrass says. “And the big picture here is that our U.S. Drought Monitor, which still shows about 50% to 55% of the land area in some form of drought, about one-third of it in the drought categories, that could really change a lot in the coming weeks.”

Let it snow, let it snow, let it snow. Winter arrives finally. 10 days from now mountains, West, Plains, North BURIED! pic.twitter.com/EbPLLFlB74
— Allen Motew (@QTweather) January 5, 2024

The winter storm is forecasted to bring heavy snow, which could provide relief for winter wheat country.

“We’ve already chipped away at the drought across the Great Plains,” Rippey says. “If you look at USDA’s winter wheat condition, we saw improvement from the end of November to the end of December. Kansas winter wheat jumped from 32% good to excellent at the end of November to 43% in December. Oklahoma saw a big jump from 53% to 67% good to excellent. So more moisture, more snow - that’ll be good news for winter wheat.

(Farm Journal)

While the storm system will bring much needed relief, it could also pose problems for livestock producers.

“As the storm crosses the southern Great Plains and moves into the Midwest, we’re going to have a big wind-driven snow event. So certainly, some livestock stress. And then for the Southeast, those folks where it’s not a drought situation, they could be dealing with flooding and flash flooding, as well as our first significant severe weather outbreak of the season early next week,” Rippey says.

Euro model... 😳❄️🌨️ pic.twitter.com/PqZKmP7G0W
— Darin D. Fessler ✝️ (@DDFalpha) January 5, 2024

Much Need Moisture in Areas

As the south braces for impacts of the forecasted storms, Snodgrass says that moisture is desperately needed.

“The South has been, in my opinion, on the wildest ride with moisture in the last 24 months compared to any other place on the planet at this point,” he says.

And as this El Niño pattern takes hold, Snodgrass thinks cotton country could final see some relief this winter.

“I think the best chance for recovery and moisture is going to be across the South, pockets of the Mid-South, the Southeast and in the East Coast,” Snodgrass says. “That track from Texas to South Carolina to Maine, I like it. That area is going to be getting some good moisture.”

It’s not just snow that producers will need to brace for, but temperatures are forecast to plunge with a possible Artic blast. Weather models are pointing to extremely cold and extreme Arctic air also moving in.

Still watching historic climate emergency risk from Arctic blast 📉❄️🌡️

Overnight weather model [ECMWF HRES 00Z] still shows historic Arctic blast into the Pacific Northwest and Western U.S. in 6-7 days.

Extremely cold w/potential for snowfall along California coast including… pic.twitter.com/PsNLPAccdj
— Ryan Maue (@RyanMaue) January 5, 2024

The Duration of El Niño

Snodgrass says the question is how long until El Niño fades, and the impact it could have on the spring.

“If El Niño peaks right now and begins to fade throughout the rest of winter and into spring, I’ve looked at every event since 1960, and most times when that happens, we tend to do okay in the Midwest the following year in terms of precipitation. That’s not a guarantee, but you look at historically, we tend to go out of ridge riding storms, which are often the types of storms that save crops,” he says.

That scenario, however, spells trouble for key growing areas of the South this spring and summer.

“The only way you can get a ridge riding storm system, though, is to put heat and drought across the South. That’s the Cotton Belt that could be impacted negatively by that,” Snodgrass says. “That’s all speculative. But that’s all you got this time of years to base it off of those bigger picture things.”

Areas of the Country Could Still Be Dry This Spring

With the active storms to start the year, there are still pockets of the country that need much more moisture to replenish dry soils before spring.

“I’m worried about the Northern Plains,” Snodgrass says. “I’m worried about the Canadian Prairie on drought. I’m worried about the lack of snowfall we’ve had so far in parts of the upper Midwest. We need to be piling a whole lot more snow there.”

The debate of just how long El Niño will last is heating up. There’s even talk of La Nina making a return this year. There’s no certainty either way, but for now, Snodgrass says a strong shot of winter weather isn’t a bad thing.

“I’ll just tell you this, the nastiest winters we’ve ever had, have almost always given us fantastic springs and summers,” he says. “So, I hate to say it, but I’m wishing for just a terrible second half of winter so that I can talk to you next spring summer and say, ‘Hey wasn’t that terrible? But now look what we got out of it.’”

Related News:

What impact did El Nino have on the weather in 2023?

High Production Costs Could Weigh on the Ag Economy Through 2024, New Survey of Economists Finds

Wed, 28 Jun 2023 19:15:23 GMT

Stronger cattle prices combined with the recent run-up in crop prices aren’t enough to outweigh concerns about the impact high input prices will have on farmers this year and into 2024. While most economists agree the next 12 months could produce more financial challenges for agriculture, views vary on how much financial pressure producers will see and offer differing opinions on the U.S. crop production picture and commodity/feed prices.

The results are part of the June Ag Economists’ Monthly Monitor, a new survey of nearly 50 agricultural economists from across the country. It’s the first survey of its kind, collecting insights from economists who represent both the private and public sectors. The economists represent the ag sector across a wide geography and also have expertise in grains, livestock and policy.

The survey is conducted anonymously to allow the highly respected agricultural economists to speak more openly about their economic and production forecasts since their responses won’t be attributed to the university, company or organization they represent. The Ag Economists’ Monthly Monitor is a joint effort between the University of Missouri and Farm Journal . The university conducts the survey, collects and crunches the data while Farm Journal distributes the results.

Main Takeaways from the June Survey

Highlights from the first Ag Economists’ Monthly Monitor include:

The perceived financial health of U.S. agriculture is trending lower and is expected to continue to decline over the next 12 months.
Production costs, global competition, geopolitical risks, drought and demand headwinds are among the main drivers.
The majority of agricultural economists expect farm income to drift lower, with some expecting levels to land closer to the five-year average in 2024.
High production expenses are the biggest obstacle in 2023.
2023 crop yield estimates vary widely among the economists surveyed.
Economists expect crop prices to drift lower in 2023 and 2024.
Beef cow supplies are forecast to continue to decline this year.

A Current and Future Snapshot of the Agriculture Economy

The monitor shows the perceived financial health of U.S. agriculture has moved slightly lower over the past year, and economists expect that trend to continue over the next 12 months.

(Farm Journal)

The main drivers of the waning outlook include production costs, global competition, geopolitical risks, drought and domestic demand for agricultural commodities.

“I think what’s most surprising is that, on average, those more than 40 economists are in alignment with the more general perception of where agriculture is heading,” says Scott Brown, an agricultural economist with the University of Missouri, who helps author the survey. “What surprised me is the amount of volatility around that average estimate. It just reminds me there’s so many issues at play today, and when trying to predict or suggest the future, even these economists have a wide opinion in terms of where we’re headed in different commodities.”

Falling Net Farm Income

The Monthly Monitor shows all respondents expect farm income to decline from the record level of 2022 for 2023 and 2024. The range of survey responses is what produced the most volatility, with responses varying by as much as $51 billion from the highest to the lowest estimate.

Some economists are projecting farm income levels to return to the 2017-21 average in 2024. The main driver for 2023 forecasts is the expectation for higher production expenses. The biggest factor for the waning outlook in 2024 is the outlook for lower commodity prices.

“It seemed like cattle was the most optimistic commodity out of the mix,” Brown says. “I think there was still some expectation that corn and soybean prices could stay on the higher end, but generally there’s less optimism than coming off the records we would have seen back in 2022. That’s when farm income was a little north of $160 billion, and when you look at some of the forecasts for 2024 in our survey, it’s closer to $120 billion on average. Some are even suggesting farm income levels could fall back to where we were pre-2020, so pre-COVID.”

(Farm Journal)

Wide Range of Yield Estimates

Ahead of USDA’s updated look at planted acres in the June acreage report set to be released Friday, economists don’t see many big changes compared with what farmers intended to plant in March. According to the June Ag Economists’ Monthly Monitor, the average survey result was 92.05 million planted acres for corn, which is up slightly from the 92 million acres reported by USDA’s farmer survey in March. The range included 90.5 million acres on the low end and 93 million acres on the high end.

Economists think farmers planted 87.98 million acres of soybeans this spring, slightly higher than the 87.5 million acres reported in March. The highest estimate was 89 million acres of soybeans, with the lowest estimate of 87 million acres.

In March, USDA reported farmers intended to plant 11.26 million acres of cotton. The survey showed economists think with the weather challenges in areas such as Texas, cotton farmers actually planted 11.24 million acres, with the maximum response of 11.9 million and 10.95 million on the low end.

Brown points out the yield variation largely depends on upcoming weather, but the dry weather is creating a wide range of yield estimates this year. According to respondents in June, the average estimate for yield includes:

Corn: 178.68 bu. per acre versus 181.5 bu. per acre (USDA’s current estimate)
Soybeans: 51.06 bu. per acre versus 52 bu. per acre
Wheat: 44.47 bu. per acre versus 44.9 bu. per acre
Sorghum: 68.17 bu. per acre versus 69.2 bu. per acre
Cotton: 855.18 pounds versus 841 pounds

“I think when you look at both corn and soybean acres, there wasn’t a lot of deviation from the Prospective Plantings report USDA came out with a few months ago, so we didn’t see a big change there,” Brown says. “On the yield side, there are certainly some differences. The average yield estimate, on the corn side from the survey was a little more than 178 bu. per acre, with a downside of 175 bu. Likewise on soybeans, that came in at about 51 bu. per acre. Both corn and soybeans are below where USDA currently sees yields. I will say those are going to change quickly as we look at weather and what’s occurred since the survey would have gone out roughly a week ago now.”

(Farm Journal)

Economists also expect crop prices to decline this year and next; however, there is a wide range in estimates signaling volatility will continue.

The average corn price is estimated to hit $4.99 per bushel for the current crop year and $4.74 for 2024/2025. The high range of the estimate for this year is $6 per bushel, with a low of $4.25 per bushel. Soybeans are also expected to trend lower, with an average estimate of $12.52 per bushel this year. The high came in at $14 per bushel. The low estimate was $10.85 per bushel. The average estimate for 2024/2025 is $11.90 per bushel.

Wheat prices are estimated to average $7.63 per bushel this year, with a low of $7 and a high of $8.49. The average estimate for wheat prices in 2024/2025 is $7.10 per bushel, with a high of $8 and a low of $6.49.

(Farm Journal)

Mixed Outlook on Livestock

The June Ag Economists’ Monthly Monitor also asked economists to provide estimates about beef cow inventory as of July 1, which is a report USDA will release on July 21. Economists who responded expect cow inventory to fall to 30 million head, which represents a decline of 1.2%.

Respondents also see fed cattle prices in 2024 trending to over $181 per hundredweight. But responses also produced high volatility, with one economist even thinking fed cattle prices will average above $195 per hundredweight in 2024.

Most everyone expects a contraction,” Brown says. “With the dry weather we’ve had in cattle country, Oklahoma, Kansas, Nebraska, Missouri, to name a few, I think we will continue to see fewer beef cows when we get that report out in mid-July. There were some who are even calling for larger declines than the nearly 30 million head. It reminds me we’re going to get tighter, and we’re not done talking about record cattle prices if these forecasts hold true.”

(Farm Journal)

Economists are less optimistic about hog prices and milk prices producers will receive this year.

Ahead of the next Hogs and Pigs report from USDA later this week, economists think the breeding hog inventory will be 99.27%, compared to 100.5% one year ago. Economists are more bullish when it comes to exports, but not enough to improve their outlook on hog prices.

“They weren’t as optimistic on cattle or dairy,” says Brown. “When you look at what they were saying for 2024 hog prices, still, the average was below $61. Which if costs stay where they are today, that means red ink continues into 2024. Likewise, the projected all milk price for 2024 is $20.50 in our survey. That probably also makes red ink in 2024.”

The Likelihood of a U.S. Recession

Another major economic indicator for livestock producers is the general economy, as it historically has a direct impact on domestic demand. Of those surveyed, economists expect interest rates to move up 2% over the next six months.

“Although there was a wide range of responses, most economists felt the U.S. economy is not currently in a recession and will not enter one during 2023,” Brown says. “I will point out, though, there appears to be continued uncertainty about the expected general economy health for 2023, given survey responses.”

The majority of economists “somewhat disagree” the U.S. will enter into a recession this year. While at least eight economists say they “somewhat agree” a recession is looming yet this year.

(Farm Journal)

Looking Ahead to July

The June Ag Economists’ Monthly Monitor survey is a current snapshot of economists’ views. The survey will be sent to participating economists just days after USDA releases its WASDE report each month. Less than two weeks later, the results will be released.

“It is fairly current, but I’ll just say weather matters a lot, as we talked about, especially with yields. We’ll see how this changes, being able to now come back to the same group and ask what they expect corn and soybean yields to be in another few weeks. We’ll also have the first survey under our belt, and it will be interesting to watch those changes,” Brown says.

Looking to the second survey, Brown says he’s interested in watching changes to the crop-yield side of the equation. Longer-term, he thinks the monthly monitor will reveal bigger trends about the general economic health across all of agriculture and how those forecasts change from month to month.

“I’m really curious to watch [the general economic health] as we get more observations, and see what July looks like relative to June in terms of overall economic health,” he says. “I’m curious to watch as this group of experts continues to digest what’s happening in agriculture.”

Ag Trade Between Russia and China Increased to 153% in April

Tue, 30 May 2023 15:01:20 GMT

Russia and China are looking to increase their trade in ag goods, with Russian Prime Minister Mikhail Mishustin stating that Russian farmers are prepared to significantly increase exports to China.

Chinese Vice Premier He Lifeng also expressed China’s interest in enhancing industrial and agricultural cooperation with Russia. These comments were made during a bilateral business forum held in Shanghai.

Boom in Ag Trade Between Russia and China

Amid growing international isolation over the war in Ukraine, Russia is seeking to deepen its trade ties with China, which has refrained from joining the U.S.-led sanctions against Russia. This situation has led to a boom in trade between the two nations, with Beijing’s purchases of energy and aluminum surging due to sanctions restricting supplies to the West. Furthermore, China’s exports to Russia reached a record high in April, amounting to $9.6 billion, a 153% increase from a year earlier.

Related story: Why is China Suddenly Canceling Purchases of U.S. Corn?

While the western sanctions do not directly target food and fertilizers, there is considerable potential in these sectors. During the forum, wheat and meat shipments were reportedly on the agenda. This comes at a time when China is aiming to reduce its import reliance on crops like soybeans, primarily sourced from Brazil and the US, and needed to feed its substantial pork herds.

China’s Slow Transition to Russian Ag

Over the past year, China has increased its purchases of food items from Russia. For instance, Russian edible oils, primarily sunflower and rapeseed oils, constituted a quarter of China’s total imports in the first four months of the year, up from 13% a year earlier.

Related story: 5 Fundamentals That Could Still Rally Wheat Prices

However, wheat is an exception to China’s increased buying from Russia, Bloomberg points out. Despite a surge in wheat imports by over 60% to about 6 million tons in the first four months of the year, Russia only supplied 30,000 tons. Despite Beijing’s announcement last year that it would allow wheat imports from all parts of Russia, trade has been impeded by issues like phytosanitary regulations, transportation challenges, and geographic constraints. The primary wheat-growing area in Russia is located in the south, near the Black Sea, a considerable distance from China.

5 Crop and Livestock Charts to Ponder from USDA’s 10-Year Outlook

Wed, 15 Feb 2023 21:49:34 GMT

What will the next decade hold for your farm? What factors should you use to weigh investments or crop planning?

Each year USDA provides a 10-year outlook for major crop and livestock commodities. Known as the Agricultural Baseline Projections , this report guides agricultural investments in Washington, D.C., and is helpful for farmers as it shines a light on current and future trends.

The latest baselined is built on the years 2023/24 to 2032/33. Here are five trends and data sets to ponder.

U.S. Crop Acres Stay Steady

High commodity prices typically expand total planted acres for the eight major field crops (barley, corn, cotton, oats, rice, sorghum, soybeans, and wheat). But total acres dipped to 249.5 million in 2022/23 from 253.4 million in 2021/22 largely because weather prevented plantings last crop season.

Did You Know? Corn, soybeans, wheat and upland cotton comprised more than 94% of the eight-crop total in 2022/23.

For 2023/24, USDA projects corn acres to rise by 3.4 million to 92 million. In a decade, USDA predicts corn acres to taper down to 89 million.

For soybeans, acres this year are projected at 87 million. By 2023/24, soybean acres are projected to be 86.5 million.

For wheat, acres are projected to jump 4% and hit 47.5 million this year. In the next decade, USDA projects wheat acres to decline to 46 million.

Cotton acres are expected to drop to 9.5 million in 2023/24, down from 13.6 million in 2022/23 (and among the lowest since 1960).

Higher yields are expected to more than compensate for reduced planted acreage, resulting in record-high production for corn and soybeans and increased wheat production.

The national average corn yield is projected at 181.5 bu. per acre in 2023/24, up from 171.9 bu. in 2022/23, when drought zapped yields.

Did You Know? USDA projects the national average corn yield to hit just under 200 bu. by 2032/33.

Soybean yields are expected to recover from a four-year low of 49.8 bu. per acre in 2022/23. For this season, soybean yields are expected to average 52 bu. per acre and hit 56.5 bu. by 2032/33.

Wheat yields are expected to return to more typical levels this year — 49.2 bu. per acre, and to continue rising through the projection period, ending at 52.7 bushels per acre in 2032/33.

Domestic and International Crop Demand Are Expected to Grow

In the next decade, domestic demand for corn, soybeans, wheat, and cotton are all expected to grow over the next decade. Also, exports of the four crops are expected to increase over the next decade, reaching record highs for upland cotton and near record levels for corn and soybeans.

Corn:

Driven by growth in pork, chicken and beef sectors, domestic corn use is expected to grow from 12.5 billion bushels in 2023/24 to 13.4 billion bushels by 2032/33. Use of corn for food, seed and in industrial applications, including ethanol, is projected to decline slightly over the same period.
U.S. corn exports are expected to rise nearly 20% from 2023/24 to 2032/33, ending at 2.7 billion bushels, which would be the second-highest corn export volume on record.

Soybeans

Soybean crush is expected to rise from 2.3 billion bushels in 2023/24 to 2.5 billion bushels in 2032/33.
Soybean exports are expected to rise 8% over the projection period.

Wheat

Domestic use of wheat is projected to remain relatively steady, rising 2.4% through 2032/33.
U.S. wheat exports are projected to jump 15% in the next decade.

Crop Prices Go Down, then Stabilize

After hitting near-record highs last year, corn, soybean and wheat prices are all expected to decline in the short term.

Corn prices are expected to drift down to $5.70 per bushel this year and continue drifting down before stabilizing at $4.30.

Soybean prices follow a similar trend, falling to $13 a bushel this year and continue dropping until prices stabilize at around $10.30 per bushel.

Wheat prices are expected to drop from a record $9.20 a bushel in 2022/23 to $8 in 2023/24. By 2032/33, prices are projected to settle near $5.70 per bushel.

Livestock Production Set to Expand

Beef production is projected to grow through 2032, after contracting in 2023 and 2024. Commercial slaughter volumes and weights are expected to increase, expanding production to record levels by 2032. Beginning at 26 billion pounds in 2024, production is estimated to grow to 28.1 billion pounds in 2032.

Pork production is also projected to increase over the 10-year projection period, driven by rising hog inventories as producers increase supply to meet processor demand. Total commercial production of pork is projected to grow from 27.6 billion pounds in 2024 to a record 30.9 billion pounds in 2032 — a 12% increase.

Chicken production is expected to follow a similar pattern, growing 10% over the projection period to a record 52 billion pounds in 2032.

Did You Know? The U.S. sends a surplus of higher value cuts of feedlot-finished beef to Europe and Asia and imports lower value lean beef to supplement the domestic production of ground beef.

A Mixed Bag for Livestock Prices

In the near term, farm prices for all animals and animal products are projected to fall from recent record or near-record levels set in 2022.

Cattle: After an initial decline, cattle prices are expected to rise steadily after 2026.
Pork: Hog prices are expected to decline through most of the projection period, with the farm price for hogs in 2032 almost 5% lower than in 2024.
Chicken: By the end of the projection period, chicken prices are expected to approach record levels, with farm prices for broilers (young chickens) rising 19%.

Removing China's Domestic Price Trade Barriers: How Would it Impact Ag?

Wed, 30 Nov 2022 15:34:54 GMT

Although China imported more than $205 billion worth of agricultural products in 2021, including more than $37 billion from the U.S., trade barriers deterred China’s imports from reaching even higher levels.

“China’s import barriers create what are called “price wedges,” in which domestic prices for agricultural commodities including beef, corn, pork and wheat are higher than the world price,” explains the USDA Economic Research Service (ERS).

Economic theory suggests that a country would import products when foreign prices are lower than domestic prices, decreasing domestic prices and narrowing the “wedge” between domestic and international prices. ERS researchers recently found that removing these price wedges would lead to increases in agricultural imports for the four commodities over the subsequent 5 to 10 years.

Removal of the corn and wheat price wedges was estimated to increase China’s imports by 91% and 249%, respectively.
Both of these commodities are subject to a tariff-rate quota which could constrain additional imports.
Removal of the beef price wedge was estimated to increase China’s beef imports by 46%.
Removal of the pork price wedge was estimated to increase China’s pork imports by 402%.
By far, this is the largest increase among the commodities considered.

Overall, the benefits of removing these trade barriers would be widespread, increasing sales for producers in the U.S. and other exporting countries and yielding lower food prices for China’s consumers, ERS notes .

This chart is drawn from the ERS report China’s Import Potential for Beef, Corn, Pork and Wheat , published in August 2022.

More from Farm Journal’s PORK:

The Wild Wild West of Carbon Markets: Where Do Swine Genetics Fit?

When the Reality of the Hunger Problem Hits Close to Home

With Age, I’ve Gained A Little Perspective

World Ag Expo Names Top 10 New Products

Wed, 21 Sep 2022 07:44:11 GMT

The notable new products that have been named the Top 10 for the 2011 World Ag Expo range from clothing, to equipment, to hydraulic fluid, to technology.

The 44th annual World Ag Expo 2011 will take place Feb. 8 to 10 at the International Agri-Center show grounds in Tulare, Calif. The expo is the largest annual agricultural show of its kind with 1,600 exhibitors on 2.6 million square feet of show grounds.

2011 Top-10 New Products:

Air Filter Blaster, Salmon River Innovations, LLC, Idaho
A new device that cleans the element of an engine’s canister air filter in seconds helps cut fuel and maintenance costs while improving engine performance and increasing engine life.

Ag Flag, Flag-R-Mon Flag Products/Ag Flag, Atwater, CA
A new water-activated flag saves money, water and effort by eliminating the guesswork in determining when flood irrigation water has advanced to a pre-determined point in a block, check, ditch furrow, row or open field.

AMSOIL Biodegradable Hydraulic Oil, American Synthetic Lubricants, Inc., Superior, WI
A new, biodegradable hydraulic oil from AMSOIL that combines low-toxicity with high lubricity properties offers farmers and ranchers an environmentally friendly alternative to conventional petroleum-based products.

Trimble Connected Farm, Trimble Agriculture, Westminster, CO
Connected Farm, a new system of software and communication services from Trimble takes farm management efficiency to the next level by combining precision farming information collected in the field with data management software and cell phone technology.

T-HEXX Dragonhyde HBC, Hydromer, Inc., Branchburg, NJ
An innovative hoof care product for use in hoof baths offers a nonhazardous, biodegradable alternative to traditional copper sulfate or formaldehyde products. When mixed with water, T-HEXX Dragonhyde Hoof Bath Concentrate creates a long-lasting, highly visible environmental barrier that helps to promote normal hoof health for dairy cows.

EZY-Lift Hydraulic Lift System, Ezy-Lift of California, Inc., Valley Center, CA
In less than 90 seconds, with the push of a button, one person can load up to 2,000 pounds of cargo in the back of a pickup or flatbed truck, using the new model 2000-8.0PT Ezy-Lift.

Jacket With Thumb Hole Sleeve, Udder Tech, Inc., Lakeville, MN
A jacket made of waterproof nylon puts an end to wet, irritated wrists and arms when milking cows

NOx Blue Diesel Exhaust Fluid, Core Fluids, LLC, Arroyo Grande, CA
NOxBlue brand of Diesel Exhaust Fluid (DEF), made by Core-Fluids, LLC, exceeds the purity and quality standards established by the American Petroleum Institute (API).

Push Away Grapple, Fritsch Equipment Corp., De Pere, WI
Designed for feeding bagged silage, the Push Away grapple saves time and minimizes ground disturbance when removing feed from the bag. The patent-pending tool has the power to penetrate tightly packed haylage and grasses to completely fill the bucket of a skid-steer or other type of front-end loader in less than 10 seconds.

Yuma Rugged Tablet Computer, Trimble, Corvallis, OR
Built to meet tough military standards for withstanding drops, vibration, immersion and temperature extremes, the new Trimble Yuma rugged tablet computer weighs less than three pounds and is designed to work where farmers and ranchers work.

In addition to the Top-10 New Products, ten Honorable Mention Products have been selected.

A panel of farmers, ranchers and industry professionals from across the U.S. selected the Top 10 and 10 Honorable Mention products from more than 90 entries. The Top 10 New Products will be showcased inside the New Product Pavilion on Expo Lane and R Street.

Information on all 20 of the products can be found at worldagexpo.com .

The notable new products that have been named the Top 10 for the 2011 World Ag Expo range from clothing, to equipment, to hydraulic fluid, to technology.

The 44th annual World Ag Expo 2011 will take place Feb. 8 to 10 at the International Agri-Center show grounds in Tulare, Calif. The expo is the largest annual agricultural show of its kind with 1,600 exhibitors on 2.6 million square feet of show grounds.

2011 Top-10 New Products:

Air Filter Blaster, Salmon River Innovations, LLC, Idaho
A new device that cleans the element of an engine’s canister air filter in seconds helps cut fuel and maintenance costs while improving engine performance and increasing engine life.

Ag Flag, Flag-R-Mon Flag Products/Ag Flag, Atwater, CA
A new water-activated flag saves money, water and effort by eliminating the guesswork in determining when flood irrigation water has advanced to a pre-determined point in a block, check, ditch furrow, row or open field.

AMSOIL Biodegradable Hydraulic Oil, American Synthetic Lubricants, Inc., Superior, WI
A new, biodegradable hydraulic oil from AMSOIL that combines low-toxicity with high lubricity properties offers farmers and ranchers an environmentally friendly alternative to conventional petroleum-based products.

Trimble Connected Farm, Trimble Agriculture, Westminster, CO
Connected Farm, a new system of software and communication services from Trimble takes farm management efficiency to the next level by combining precision farming information collected in the field with data management software and cell phone technology.

T-HEXX Dragonhyde HBC, Hydromer, Inc., Branchburg, NJ
An innovative hoof care product for use in hoof baths offers a nonhazardous, biodegradable alternative to traditional copper sulfate or formaldehyde products. When mixed with water, T-HEXX Dragonhyde Hoof Bath Concentrate creates a long-lasting, highly visible environmental barrier that helps to promote normal hoof health for dairy cows.

EZY-Lift Hydraulic Lift System, Ezy-Lift of California, Inc., Valley Center, CA
In less than 90 seconds, with the push of a button, one person can load up to 2,000 pounds of cargo in the back of a pickup or flatbed truck, using the new model 2000-8.0PT Ezy-Lift.

Jacket With Thumb Hole Sleeve, Udder Tech, Inc., Lakeville, MN
A jacket made of waterproof nylon puts an end to wet, irritated wrists and arms when milking cows

NOx Blue Diesel Exhaust Fluid, Core Fluids, LLC, Arroyo Grande, CA
NOxBlue brand of Diesel Exhaust Fluid (DEF), made by Core-Fluids, LLC, exceeds the purity and quality standards established by the American Petroleum Institute (API).

Push Away Grapple, Fritsch Equipment Corp., De Pere, WI
Designed for feeding bagged silage, the Push Away grapple saves time and minimizes ground disturbance when removing feed from the bag. The patent-pending tool has the power to penetrate tightly packed haylage and grasses to completely fill the bucket of a skid-steer or other type of front-end loader in less than 10 seconds.

Yuma Rugged Tablet Computer, Trimble, Corvallis, OR
Built to meet tough military standards for withstanding drops, vibration, immersion and temperature extremes, the new Trimble Yuma rugged tablet computer weighs less than three pounds and is designed to work where farmers and ranchers work.

In addition to the Top-10 New Products, ten Honorable Mention Products have been selected.

A panel of farmers, ranchers and industry professionals from across the U.S. selected the Top 10 and 10 Honorable Mention products from more than 90 entries. The Top 10 New Products will be showcased inside the New Product Pavilion on Expo Lane and R Street.

Information on all 20 of the products can be found at worldagexpo.com .

Ukrainian Farmers Destroy Harvest Equipment to Keep Russians from Taking Crops

Tue, 12 Jul 2022 20:33:32 GMT

Few things are more important to a farmer than harvesting his crops, yet farmers in the Ukraine are taking measures to prevent that very action. Many are now destroying harvest equipment to keep the Russian army from confiscating the wheat currently ripening in fields.

“Some of our clients in the Ukraine have been actually damaging their combines, so the Russians can’t combine the wheat,” says Dan Basse, president of AgResource Company.

“It’s a war zone. It’s messy. It’s a shame, and our hearts bleed for the Ukrainians who are being harmed,” Basse told AgriTalk host Chip Flory on Monday.

Little Fuel To Be Had

In recent days, the Russian army has bombed refineries, seaports and many other parts of the country’s infrastructure, crippling it and turning it into rubble. Basse estimates that at least three, maybe four, of the seven major export terminals out of the Ukraine have sustained such major damage months of work would be required to repair them.

The destruction means that even if farmers have kept their equipment intact, many are unable to access much needed diesel to fuel the harvest.

“If you were to place a diesel order today in the wheat areas, which is really central and western Ukraine, you would find that it’s probably four to six weeks to get delivery on it,” Basse says.

The delay means some of the crop will likely remain in fields too long, damaging its quality and viability, and some of the crop won’t be harvested at all.

That reality would mean supplies of wheat would take a significant hit in the global marketplace. It’s also why Basse challenges the USDA’s current prediction that Russia will export 40 million metric tons (mmt) of wheat this year and somehow compensate for the shortfall from the Ukraine.

“A lot of the people I talked to in Europe have that number closer to 30 mmt, which would leave the world short 10 mmt of wheat,” he says. “As Russia begins its harvest, we’ll start to understand that it is not going to have a big export campaign. I’m afraid it’s a pipe dream, if you will, I just don’t think logistics will allow it.”

What countries will be shorted of wheat and, potentially, other grains? Basse says he is still working to figure that out. For now, he believes the shortfall is likely to occur in countries such as Bangladesh, Pakistan and/or parts of Southeast Asia. He doesn’t believe the U.S. will be in that mix.

“There will be some shortages, and it seems to me that if I’m an end user, I probably should be taking some forward coverage,” he says. “We think (demand destruction) will be shifted forward, because people are still eating about the same amount of calories as it sits today at these current prices.”

Seasons Of Loss

As for Ukranian farmers, Basse is worried what will happen to some of them if crops can’t be harvested and sold.

“Financing is running out. I will tell you that as I talk to my friends and clients, we will have farmers that go bankrupt. And then of course, as that happens, we will really have issues with the next wheat crop and the next corn crop. So, I’m actually more concerned about 2023 production than I am about 2022.”

In the meantime, he believes Putin will continue to wage war, inflicting as much “pain and harm and psychological damage on Ukrainians as possible.”

“Ukrainians are such a proud people, as long as we keep sending them weapons, they will fight to the last man standing. That is how angry and riled up they are,” Basse adds. “So that’s why when we talk about this war going on, as long as the West keeps sending weapons, the war will go on.”

Listen to the complete discussion on AgriTalk between Basse and Flory here:

Markets Make Historic Open Sunday as Wheat Tops $13, Soybeans Soar Past $17, Corn Closes in on $8

Mon, 07 Mar 2022 04:06:12 GMT

Commodity markets made historic moves Sunday night as c rude oil topped $130 a barrel , hitting the highest price in 13 years, and wheat topped a 14-year high trading above $13. March soybeans soared past the $17 mark, with March corn just 20 cents from $8. And as the Ukraine-Russia crisis continues, the bull run may not be over yet, as food and fuel inflation fears are also heating up.

“11 days ago when this conflict and war started in Ukraine, crude oil was in a range of $90 to $95,” says Tommy Grisafi of Advance Trading . “We were trading there for over two weeks. This conflict started, and we’ve done nothing but move up. There’s a lot of chatter out in the markets about inflation, you’d have to wonder do we start to bring up the word hyperinflation.”

The volatility in the commodity markets was on full display last week, with wheat making new highs. And the theme continued Sunday night as Chicago wheat futures rose more than 7% with prices climbing to a 14-year high over concerns about global supplies amid an escalating Russia-Ukraine war.

“Wheat had its largest move in history last week,” says Grisafi. “And as we trade tonight, wheat has new extended limits. May wheat is trading up 85 cents close to $13.”

Kansas City wheat and Minneapolis wheat both traded higher Sunday night, with both corn and soybeans also climbing more than 20 cents.

“May beans almost have a $17 in front of them,” he adds. “November soybeans are trading at a phenomenal price, historically. But we’ll see how that ends up.”

Wheat could have even higher limits this week. While commodity prices continue the bull-run, Grisafi points out other commodities are in uncharted territory with gold hitting $2,000 per ounce overnight. And as crude and gold surged, Dow Jones futures fell.

“What’s this mean to you? Well, if you’re a farmer, you’re probably rooting for high prices unless you sold it a long time ago. If you’re growing crops, you’re probably loving high prices except for one thing. How are you going to get fertilizer moving forward,” asks Grisafi.

Food and Fuel Inflation Fears

On CNN Sunday, Secretary of State Antony Blinken said the U.S. is considering a ban on Russian oil imports in coordination with European and NATO allies. The news comes as bipartisan members of Congress are asking for a full embargo.

“We’re still importing crude oil from Russia, and if we stop importing crude oil from Russia, What’s that mean? It means that gas price that I just filled up my car for today at $4 a gallon, now with today’s $13 rise in crude oil, that would put gasoline at about $4.50. So as crude goes up, of course it’s a tax to the consumer. All these things add up to you: food inflation, fuel inflation, fiber inflation, big dynamic moves, and of course while all this is happening, the Fed is talking about raising rates.”

Wheat Prices Shoot to 14-Year High on Concerns over Conflict Between Russia and Ukraine

Wed, 02 Mar 2022 19:55:31 GMT

Wheat futures were fueled by the ongoing Russia-Ukraine crisis on Wednesday. As a result, front-month wheat contracts hit daily trading limits and soared to a 14-year high.

“May and July, both Hard Red Winter (HRW) and Soft Red Winter (SRF) contracts, are limit up at the moment at 75 cents, so expanded trading limits today because we closed 50 cents higher yesterday,” Brian Grete told Davis Michaelsen on AgriTalk Wednesday. “It’s more fallout from the the Russia-Ukraine impacts to global grain trade, and that’s really what’s driving this morning to new contract highs.”

Grete says spring wheat futures hadn’t hit limit up yet, as those contracts were more of a follower.

(Farm Journal)

So, why are wheat prices seeing such momentum? Both Ukraine and Russia account for nearly 30% of the world’s wheat exports. It’s not just uncertainty about the crisis causing wheat prices to climb, but there’s also worries about infrastructure damage in Ukraine and whether it will hinder the country’s ability to export in the near future.

(Farm Journal)

Also this week, officials in Egypt announced the plan to source wheat from other regions despite Russia and Urkaine. Reuters reports there are currently 14 countries approved for imports into Egypt.

As grains continue to see climbing prices, it’s also spurring concerns about the impact higher feed costs could have on livestock producers.

Drought Eating Into Wheat Outlooks

The U.S. was already facing shorter supplies due to a decline in both acreage and yields. The drought in the West caused yields to decline 41%, according to USDA. Drought is still a concern for the Wheat Belt in 2022 as drought remains parked over much of the West.

“By far, the wheat belt is the biggest concern,” says Brad Rippey, USDA meteorologist. “If you look at crop conditions in areas where the crops are starting to actively grow, it’s absolutely terrible. In Texas, you’ve got three-quarters of the winter wheat crop rated in very poor condition. Almost that much of the rangeland and pasture land 69% currently rated very poor to poor and soil moisture in Kansas, Oklahoma and Texas.”

Rippey says when considering the moisture outlook over the next few months, much of the West isn’t projected to see much moisture. But the need for moisture is now.

“We are into Showtime in the South and Texas as wheat is already heading out in the far South,” Rippey adds. “Statewide I think about one-eighth of the crop is reporting heading, and so it is time for growth. Plants are demanding moisture. Despite a couple of winter storms recently, a little bit of ice and snow in Texas, it is so critically dry. Without any big change in the pattern, that will quickly spread northward into Kansas, Nebraska, and eventually the western Dakotas and Montana here over the next few weeks, unless something changes dramatically.”

Here's Why the Russia-Ukraine Crisis Creates a Realignment of World Trade

Fri, 25 Feb 2022 13:19:03 GMT

The war of words turned into an escalating situation Thursday as Russia invaded Ukraine . The news sent wheat prices skyrocketing 50 cents higher, with corn up 30 cents at one point Thursday. Crude oil also soared above $100 per barrel, hitting the highest level since 2014.

Dan Basse of AgResource Company says the situation fueled commodities, as two major grain producers were thrown into chaos and uncertainty. And as that happened, it elevated the U.S.

“It’s really a realignment of world trade,” says Basse. “What we don’t know about, of course, is the sanctions. The Russians have also threatened that if another country were to blockade the Bosphorus (the Strait of Istanbul), which is the feeder of all the grain coming down, that they would take actions against that country. So there’s a lot we don’t know yet. But when you think about 31% of world wheat trade being domiciled in Ukraine and Russia, 30% of world barley trade, and then somewhere around 29% of ‘sunoil’ trade, it’s a really big deal.”

President Joe Biden addressed the U.S. on Thursday, saying new economic measures would “limit Russia’s ability to do business in dollars, euros, pounds and yen and be part of the global economy.”

Basse says even with the uncertainty, more demand could flow to the U.S.

“The U.S. farmer’s prominence has really stepped forward today regarding his position to feed the world. And a Chicago Board of Trade is reflecting that with new rally highs. But if we looked at China, a new record high last night in corn and soy meal, palm oil has shot up to new record highs. So all of this is occurring at a time when the world is already looking at tight stocks, and this just exacerbates it,” Basse adds.

Basse says a worst-case scenario would be an extended conflict that lasts months. He says if that happens, it could hinder Ukraine’s ability to plant the upcoming crop.

“This would be the worst-case scenario in a world where stock use ratio of the major exporters are sitting at record lows,” says Basse. “The best-case scenario would be, let’s say, that the Russians have gone in, and in a matter of a week, they kind of tidy things up, and the Ukrainians say, ‘Okay, we’ve done this before, you know, it’s only some 20 years ago that you were our leaders, and we’ll kind of accept you for now.’ But I think there will still be these skirmishes, but that would be the best case. And then at that point, you know, the Russians may come back and say, ‘Okay, to get back our customers in the world, we’re really going to drop our corn, wheat and soy prices, such that we buy back demand.’ That would have a very big impact on the market.”

Basse points out the geopolitical back and forth will be at the forefront, which is why the situation fueled commodity prices overnight.

So, what’s Basse’s advice for farmers right now who are experiencing the extreme price volatility?

“I want them to take an exhale for the moment and just kind of breathe normally,” says Basse. “And then I want them to look at their revenue insurance price, which will be calculated as of Monday. And that will be a baseline that will give you comfort to the downside. We’re hoping that revenue insurance for corn and soybeans in particular will be record high. So you know, participate in that probably to the fullest degree. Then, I want to look at maybe marketing strategies like buying puts or something that gives you some opportunity to still command the upside. Because sometimes in the farming business, we need to maximize profits. And this appears, as I said, to be one of those years where the American farmer’s profile has just taken a big leap on the world stage. We need to feed the world.”

Basse says producers can protect the downside through revenue insurance, as well as put options. He says the key is to not limit the upside potential. The veteran market analyst says the markets are navigating uncharted waters with the situation at hand.

“When I go back and think about the collective farming system in Russia back when it collapsed in the ‘70s, and they came forward with their gold bars, that’s the closest I can find to where we are today,” says Basse. “And then American farmers, you know, really leapt into prominence during that time frame. Now remember, back then soybeans rallied almost to the teens, and back in the ‘70s that was like seen as unbelievable. The same in corn, making it to $4 and wheat up close to $9. So, if there was a U.S. weather problem this year, I don’t know how high is high. But at the same point we as farmers have to manage our risk and manage profitability, and so I’m trying to find marketing tools that will allow us to do that without limiting our upside risk. Because if we do have a U.S. weather problem, these markets are gonna stay very heated. This is not a one and done.”

Related Stories:

BREAKING: Russia Launches Invasion Into Ukraine

Russia-Ukraine Crisis Shakes U.S. Markets, Gas and Oil Prices Surge

Russian Invasion is Bad News for U.S. Meat Consumers, Steiner Says

Putin Just Cost You $35 Per Head

USDA Projects Soybean Supply Dip, Corn Flat

Fri, 20 Nov 2020 05:49:02 GMT

Corn

This month’s 2017/18 U.S. corn outlook is for larger production, increased feed and residual use, and nearly unchanged ending stocks. Corn production is forecast at 14.280 billion bushels, up 96 million from last month. Corn supplies are higher, as a larger crop more than offsets a reduction in beginning stocks based on the Grain Stocks report. Projected feed and residual use is increased 25 million bushels. With supply and use changes essentially offsetting, corn ending stocks are up 5 million bushels from last month. The projected range for the season-average corn price received by producers is unchanged at $2.80 to $3.60 per bushel.

Corn exports are raised for Mexico and Argentina, with largely offsetting reductions for Russia and Ukraine. Argentina’s 2016/17 exports are lowered for the local marketing year beginning March 2017 reflecting a slower-than-expected pace of exports to date. Projected 2017/18 food, seed and industrial use for corn in China is raised based on recent trade data indicating a higher-than-expected level of corn product exports. Foreign corn ending stocks for 2017/18 are down from last month, mostly reflecting declines for China and Mexico that are only partially offset by increases for Argentina and Turkey. Global corn stocks, at 201.0 million, are down 1.5 million from last month.

Soybeans and Other Oilseeds

U.S. oilseed production for 2017/18 is projected at 132.3 million tons, down 0.5 million from last month mainly on lower sunflowerseed, canola, and cottonseed production. Soybean production is forecast at 4,431 million bushels, nearly unchanged from last month with higher harvested area offsetting lower yields. Harvested area is projected at a record 89.5 million acres, up 0.8 million. The soybean yield is forecast at 49.5 bushels per acre, down 0.4 bushels. With lower beginning stocks, soybean supplies for 2017/18 are projected down 44 million bushels. With use projections unchanged, ending stocks are projected at 430 million bushels. If realized, ending stocks relative to use would be the highest since 2006/07.

The 2017/18 U.S. season-average soybean price is forecast at $8.35 to $10.05 per bushel, unchanged from last month. Soybean meal and soybean oil price projections are also unchanged at $290 to $330 per short ton and 32.5 to 36.5 cents per pound, respectively. Global oilseed production for 2017/18 is projected at 577.0 million tons, down 1.6 million as reductions for soybeans, rapeseed, and sunflowerseed are partly offset by increases for cottonseed and peanuts. Global soybean production is projected down 0.6 million tons to 347.9 million on lower forecasts for Russia and Ukraine. Higher production for China and Mexico is partly offsetting. Sunflowerseed production is also lower for Russia and Ukraine on lower yields. Rapeseed production is lowered for Australia where yields are impacted by below-normal rainfall.

Global oilseed exports for 2017/18 are down 0.4 million tons to 173.9 million on lower soybean and sunflowerseed exports. Soybean exports are lowered for Ukraine while sunflowerseed exports are lowered for Ukraine and Russia. Lower rapeseed exports for Australia are offset by higher exports for Ukraine. Global oilseed ending stocks for 2017/18 are projected down 1.6 million tons from last month to 107.9 million mainly reflecting backyear adjustments that reduced soybean carrying for Brazil and the United States.

Sorghum

Grain sorghum production is forecast down from last month, as a 2.4-bushel per acre increase in yield to 72.2 bushels per acre is more than offset by a reduction in harvested area. Barley and oat production estimates are updated based on the Small Grains report. Global coarse grain production for 2017/18 is forecast up 2.8 million tons to 1,319.4 million. The 2017/18 foreign coarse grain outlook is for greater production, consumption, and reduced stocks relative to last month. Foreign corn production is forecast higher, with the largest reductions for Russia, Ukraine, Ethiopia, and Tanzania more than offset by increases for a number of countries including Nigeria, Turkey, and Mozambique. The projected corn yields for Russia and Ukraine are reduced based on reported harvest results to date. Historical revisions are made to Nigeria’s corn, sorghum, and millet production estimates to better reflect statistics published by the government.

WHEAT

Projected 2017/18 U.S. wheat supplies are decreased modestly this month as reduced beginning stocks are partially offset by slightly higher wheat production. Beginning stocks were revised downward in the latest NASS Grain Stocks report while wheat production increased in the NASS Small Grains Annual Summary to 1,741 million bushels. Although all wheat production increased minimally from last month, the by-class changes are relatively more significant as larger Durum and Hard Red Spring production more than offset declines in Hard Red Winter and Soft Red Winter. Projected 2017/18 feed and residual is reduced 30 million bushels this month to 120 million as the NASS Grain Stocks report indicated lower-than-expected June-August disappearance. Additionally, projected 2017/18 U.S. corn supplies are the second highest on record, which is expected to dampen wheat feed and residual use for the rest of 2017/18. The other wheat use categories are unchanged this month and projected 2017/18 ending stocks are higher at 960 million bushels but still well below last year’s 1,181 million. The projected 2017/18 season-average farm price is unchanged this month at the midpoint of $4.60 per bushel but the range is narrowed 10 cents on each end to $4.40 to $4.80.

Global 2017/18 wheat supplies are increased, primarily on higher production forecasts for Russia, EU, and India more than offsetting a decline in Australia. Based mainly on harvest results to date, Russia’s 2017/18 wheat production is increased 1.0 million tons to a new record of 82.0 million tons. This is well above last year’s previous record of 72.5 million tons. EU wheat production is raised 2.2 million tons to 151.0 million, largely on higher production in France. Australia’s wheat production is reduced 1.0 million tons to 21.5 million on persistent dry conditions in most of eastern Australia. This would be Australia’s lowest wheat output since the 2008/09 crop year.

Foreign 2017/18 trade is fractionally higher this month as reduced exports by Australia are offset by increased exports from Canada. Projected imports are lowered for India and Turkey as increased 2017/18 production for both countries is expected to reduce import needs. Total world consumption is projected higher, primarily on greater usage by India, EU, and Russia on their increased supplies. Projected global ending stocks are nearly 5.0 million tons higher this month at 268.1 million, which is a new record.

Livestock, Poultry and Dairy

The forecast for 2017 total red meat and poultry production is raised from last month as higher broiler and turkey production more than offset fractionally lower beef and pork production. Beef production is reduced from the previous month largely due to lower expected fourth-quarter carcass weights. The pork production forecast is lowered on smaller-than-expected third-quarter commercial hog slaughter which more than offset higher expected second-half carcass weights. The broiler production forecast is raised on expectations of increased slaughter later in the year based on hatchery data. The turkey forecast is increased as higher third-quarter slaughter more than offsets expected declines in fourth-quarter slaughter. The 2017 egg production forecast is raised from last month on higher hatching egg production.

For 2018, the total red meat and poultry forecast is raised from the previous month as higher expected beef and pork production more than offset declines in turkey production. Beef production is little changed from last month although first half production is lowered as pasture conditions are expected to slow the pace of placements in the latter part of 2017. However, heavier carcass weights are expected to offset a portion of the decline. Pork production is raised from last month on higher slaughter. In the Quarterly Hogs and Pigs report, released September 28, producers indicated they farrowed about 2 percent more sows in June-August and intend to farrow approximately 1 percent more sows over each of the next two quarters. With larger pig crops in the second half of 2017 and into 2018, pork production is forecast higher. The 2018 broiler and egg production forecasts are unchanged from the previous month. Turkey production forecasts for 2018 are lowered on slow recovery in demand which is expected to dampen the pace of expansion.

Beef import forecasts are raised in 2017 and 2018 on increased shipments of processing beef from Oceania. The 2017 and 2018 beef export forecasts are raised on strong demand in a number of key trading partners. Pork imports for 2017 and 2018 are raised from last month. The 2017 pork export forecast is lowered from the previous month on recent trade data, but no change is made to the 2018 export forecast. Annual broiler, turkey, and egg export forecasts are unchanged.

Cattle price forecasts are unchanged for 2017 and 2018. Hog price forecasts are lowered for the last quarter of 2017 and into 2018 on larger supplies and pressure from abundant supplies of red meat and poultry. The annual broiler price is forecast slightly lower for 2017 but is unchanged for 2018. Turkey price forecasts are lowered in 2017 and 2018 on slow recovery in demand. Egg price forecasts are raised on near-term demand strength which is expected to carry over into next year.

The milk production forecast for 2017 and 2018 is raised on a slightly more rapid pace of growth in milk per cow. However, forecast cow numbers for late 2017 and 2018 are slightly lower. Fat basis imports for 2017 and 2018 are raised on strength in butter imports but skimsolids imports are lowered for 2017 and unchanged for 2018. Exports on a fat basis are raised for 2017 on stronger butter and cheese exports, and increased sales of butter and anhydrous milkfat are expected to support higher fat basis exports in 2018. Skim-solids exports for 2017 and 2018 are raised, primarily on stronger expected shipments of whey products.

For 2017, butter and nonfat dry milk (NDM) prices are lowered on large supplies, but the whey price is unchanged at the midpoint and the cheese price forecast is raised on current demand strength. For 2018, continued demand strength for cheese is reflected in a higher price forecast, while butter, NDM, and whey prices are lowered on larger supplies and pressure from international prices. The Class III price is raised for 2017 on stronger cheese prices, but for 2018, lower whey prices are expected to more than offset the increases in cheese prices, and the price forecast is lowered. The Class IV price is lowered for both years due to lower forecast butter and NDM prices. The 2017 all milk price forecast range is $17.75 to $17.85 per cwt, unchanged at the midpoint, but the 2018 price is lowered to $17.45 to $18.35 per cwt.

Cotton

The 2017/18 U.S. cotton supply and demand estimates show lower production, exports, and ending stocks relative to last month. Production is reduced 643,000 bales, largely in Texas and Georgia. Domestic mill use is unchanged from last month, but the export forecast is reduced 400,000 bales to 14.5 million, due to reduced U.S. production and strong competitor shipments. Ending stocks are forecast 200,000 bales below the previous month’s forecast. The resulting stocks-to-use ratio of 32.5 percent is virtually unchanged from the previous month’s forecast, and the highest since 2008/09. The forecast range for the marketing year average farm price is 55.0 to 65.0 cents per pound; the midpoint of 60.0 cents is unchanged from the previous month’s projection.

The global cotton supply and demand forecasts for 2017/18 include relatively small increases from the previous month for production, consumption, and trade. Production is raised about 100,000 bales as larger expected crops in Argentina, Brazil, and Greece more than offset the reduction in the forecast for the United States. Vietnam is the primary driver behind a 250,000-bale increase in projected world consumption, while a 440,000-bale increase in projected 2017/18 world cotton trade reflects increases in India, Australia, and Brazil that more than offset lower expected U.S. exports.

Read the full report.

Commodity Forecasts

Fri, 20 Nov 2020 05:38:06 GMT

This year is definitely one that’s going to require a plan that drives your marketing moves. In addition to structure, flexibility is key to capture a run up in prices along the way. A little luck doesn’t hurt, either. The tables are turned, as the livestock sector looks forward to profitable days ahead while crop prices take a hit. The following is a snapshot from leading experts on how 2014 is shaping up for the major commodities.

Prices, Exports Stay Rosy for Beef Cattle

Beef cattle fundamentals are shaping up to deliver a profitable and possibly record-breaking 2014. It’s no coincidence that as corn prices declined, cattle prices rallied. Stocker and feeder cattle have posted 25% to 30% price gains since May, boosting the feeder cattle index price for 750-lb. steers to more than $165 per cwt. Falling corn prices also provided a much-needed boost for feedlot operators. After two years of negative margins, cattle feeders are back in the black.
According to Sterling Marketing Inc. of Vale, Ore., feedyards saw profits of nearly $123 per head in early November.

Analysts point to declining supplies of cattle as the foundation of a strong market. The Jan. 1, 2013, inventory of beef cows was the lowest in 60 years, and number crunchers say cow inventories will be smaller again in early 2014.

Feedyards and stockers will aggressively seek cattle of all sizes, which will support higher calf and feeder cattle prices.

Robust beef exports add to a bright outlook. The U.S. Meat Export Federation says in the first eight months of 2013, beef exports are up 1% in volume and 10% in value to 767,017 metric tons valued at $4.01 billion. The export value per head of fed slaughter beef in August averaged $253.87, up $46.16 from 2012.

Can anything derail a booming cattle market in 2014? Analysts are nervous about ever-increasing retail beef prices and the effect on demand. Average retail beef prices in August 2013, the latest data available, was a record $5.39 per pound, according to USDA’s Economic Research Service.

Exports Dominate U.S. Dairy Forecast

Dairy economists are pointing to exports as the brightest constellation in 2014—with good reason: U.S. dairy exports in 2013 mark a fourth consecutive record year, as well as a new high for the ninth time in 10 years. U.S. dairy exports rose nearly 30% in value to $6.6 billion, compared with year-earlier levels, says Alan Levitt with the U.S. Dairy Export Council. In volume, exports of milk solids climbed by about 18% to 3.9 billion pounds.

U.S. dairy exports are on track to account for an impressive 15.4% of the nation’s 2013 milk output. “Five years ago, we exported just 5% of our milk production,” Levitt says.

Adding to 2014’s optimistic outlook are improving margins for producers fueled by strong milk prices and lower feed costs. “Income over feed costs this year look to be the best since 2007,” Levitt says.

Despite these factors, market watchers see a few clouds ahead. One feed source not expected to get any cheaper is alfalfa hay. Top-quality hay is $280 to $300 per ton.

Sluggish domestic consumption and high product inventories also remain concerns. Even so, analysts expect to see a surge in milk production as dairies seek to boost profits. That’s likely to pressure milk prices.

“Milk prices won’t collapse, but they may drop to $16.70 per cwt. by February,” says Robert Cropp, professor emeritus at the University of Wisconsin-Madison.

Jerry Dryer, editor of the Dairy & Food Market Analyst newsletter, expects Class III prices to dip to $16 per cwt. in the third quarter of 2014 before rising to $16.75 in the fourth quarter. Class IV, which represent dairy powder products, will see strong demand overseas, just as Dairy Farmers of America’s new powder plant comes online in Nevada.

Pork Industry Ready to Hog More Corn

This past year was a turnaround time for cash-strapped hog producers. Low herd numbers and much lower corn prices has returned profitability to the industry. Chris Hurt, a Purdue Extension ag economist, says during the first half of 2014, hog producers should see profits of approximately $30 a head.

“While that sounds like a lot, producers are really just offsetting drought losses and doing a little better,” Hurt says. “These are good returns. By next spring and summer, we should see extraordinary returns—maybe $40 per head.”

Ron Plain, University of Missouri Extension livestock marketing economist, says producers are finally able to start rebuilding breeding herds.

“History says it takes five months of profits before we start to see herd expansion,” he says. “October 2013 was the fifth month of profits, so we’re expecting producers to start expanding breeding herds; that will give us more hogs on the market starting in the fourth quarter of 2014.”

By next summer, Hurt predicts the U.S. breeding herd will have expanded by 2% to 3%.

Higher retail costs have resulted from higher production costs. The retail price of pork in August 2013 was at a record high of $3.75 per pound, and it has affected consumption. Since 2007, the average American has reduced yearly pork consumption by about 5 lb.

Even though prices have been high, one pork cut is still in high demand—bacon. “We go through food fads,” Plain says. “Bacon is an ‘in’ food right now.”

Additionally, U.S. pork is in a great position to increase exports. “That’s three home runs,” Hurt says. “If pork producers made it through to this point, they are survivors.”

Prepare for a Stagnant Corn Market

Even after numerous production challenges in 2013, USDA still predicted a record corn crop, causing corn prices to tumble to $4 to $5. With corn prices still struggling, will farmers stick with corn this year? Current talk in the trade suggests more than 4 million corn acres will be lost, but Farm Journal columnist Bob Utterback thinks closer to 3 million acres will take a hit, but in lower-production regions.

Greg Wagner, president of GWX-Ag Advisors and an AgWeb market analyst, agrees. “There’s widespread expectations that there will be a reduction in corn acreage and an increase in soybean acreage,” he says, “but it will not be nearly as dramatic as some are forecasting.” He predicts a reduction of just 1 million to 1.5 million acres.

“We’ve had a surge in global corn production,” Wagner says, citing areas such as South America and Ukraine that have boosted their production levels in recent years. “But the biggest wild card might be China,” he says.

The first half of 2014 looks quiet. Utterback predicts that through May, corn might only have a 50¢ to $2 trading range, depending on the weather. From June through September, though, he forecasts that the market will become violent as crop conditions are reported.

“In light of the global demand side, the demographics of the world, the number of people moving up the food chain and production capacity, agriculture and producers as a whole have prospect for higher prices,” Wagner says. “But not necessarily $8 corn and $15 beans.”

With corn prices what they are, soybeans look more enticing. “If it’s good enough for you to shift acres, then prices are good enough to sell,” Utterback says. “The real danger is not what the flat price does; it’s what the margin does.”

Price Soybeans Early

If you didn’t sell soybeans right off the combine this fall, you might want to empty your bins soon. Prices could easily tumble toward spring and early summer. “Nearby futures of $12.75 have come down, but they’re still at a good place for producers—more than $1 above average production costs,” says Chad Hart, ag economist at Iowa State University.

“The market is saying to sell,” he says. Expect gradual price deterioration through 2014, he adds, noting that old-crop soybeans are an inverted market with little upside potential. Because of that, he doesn’t expect current levels to hold; deferred months are deeply discounted.

“The bulk of Chinese buying is now behind us,” says Darrel Good, University of Illinois ag economist.

Brazil and Argentina have planted a record number of soybean acres, and the crop is off to a good start. It makes sense to price at least some 2014 sales on rallies, “but I would not be aggressively sold,” Good says. “The South American crop is not made yet.”

Producers can wait until crop insurance level guarantees are announced in February, based off November 2014 futures. “Crop insurance may allow producers to have a significant amount of downside risk covered,” Good says.

The positive news for soybeans is on the demand side. USDA forecasts exports of 1.45 billion bushels for the current marketing year.

Domestic soybean crush has also marched higher, but “supplies are going up faster than demand,” Good explains.

Two bearish factors are rationing demand. One is production of other oils, particularly palm oil. The second is the reduction of biodiesel targets in the Renewable Fuels Standard proposed by the Environmental Protection Agency.

Big Wheat Crop, Mildly Bearish Prices

While prices will be somewhat bearish thanks to a large corn supply for feed and strong wheat production globally, experts say 2014 will be a good year for U.S. wheat.

July 2014 wheat futures have been declining for several months, says Brian Williams, economist for Mississippi State University Extension Service. USDA has not published its 2014 acreage estimates, but private estimates indicate the crop will be larger than in 2013.

The international market will be an important factor for U.S. wheat prices in 2014, experts say. Harvests in Australia and Argentina, and the quality of those crops, will be key.

Prices in hard red winter wheat country have averaged about $7 per bushel this year. While prices are likely to be slightly lower for the 2014/15 marketing year, strong protein and milling characteristics coupled with tight ending stocks should keep prices favorable.

“I think it’s safe to say that right now, if you were projecting to June of 2014, that we will have a 1 billion bushel hard red winter wheat crop,” says Kim Anderson, Oklahoma State Extension economist. If that’s the case, then in 2014/15, “we will rebuild the hard red winter wheat stocks.”

There are several other significant international stories playing out, says Ed Usset at University of Minnesota Extension. China imports large amounts of wheat, while Canada is experiencing logistical problems in hauling off its blockbuster wheat crop. Basis levels also are reportedly wide.

That, coupled with the fact that 15% of wheat production worldwide goes to feed, makes it difficult to imagine how wheat could mount a great upward price surge. In general, wheat experiences about three major market highs: once during planting in the fall, once early in the year and once in May right before harvest, explains David Reinbott, University of Missouri Extension.

“If you missed that October sale, I’d probably hold off ‘til January or February,” he says. “Once you get past the first of March, it really starts to go down pretty hard.”

China Holds All the Cotton Cards

Cotton producers could be in for another wild ride in 2014 as the Chinese government sells its stockpile and announces new policies for the 2014/15 growing season.

O.A. Cleveland, an agricultural economist at Mississippi State University, expects prices to return to 80¢ or 90¢, with the usual rallies early in the year and during planting season. He thinks the Chinese government will refrain from dumping its reserves on the market for fear of undercutting the value of its reserve and hurting its domestic producers.

Jon Devine, a senior economist for Cotton Incorporated, isn’t quite as bullish about crop prices as Cleveland. Devine expects the market to go sideways until spring, when China will announce its reforms for the growing season. The rumor, Devine says, is that the Chinese will move away from making stockpile purchases and toward direct payments.

Cleveland forecasts the 2014 cotton crop to be a little smaller, but the high yields of recent years are here to stay, he says. To take out options for downside protection, John Robinson, agricultural economist at Texas A&M University, recommends farmers buy “near-the-money” put options and sell a “deep out-of-the money option” as a way to buffer a decline from revenue insurance policies.

The International Cotton Advisory Committee projects world cotton production will outpace consumption by roughly 2 million tons during the 2013/14 season. Supply and demand will come back into alignment during the 2014/15 season, which would bolster prices.

You can e-mail Sara Schafer at sschafer@farmjournal.com .

Read extended commentary for each of the featured commodities at www.agweb.com/2014_outlooks

New Tariff Aid Plan Offers Single Payment for All Non-Specialty Crops

Fri, 20 Nov 2020 05:25:31 GMT

As USDA worked to craft a second year of tariff aid payments under the Market Facilitation Program (MFP) they faced two significant challenges: a significant pushback from corn growers who feel they were shortchanged by the penny per bushel payment they received in 2018 and a desire to not skew planting intentions with a 2019 crop that is largely still in seed bags. USDA offered up its solution to both problems on Thursday with a second year MFP plan that will deliver payments at a single rate for all covered commodities.

Each county will be assigned an MFP payment rate based on historical production. All growers in a county will receive the same rate, regardless of the eligible crop grown. Payments will be based on reported planted acres for 2019 which cannot exceed 2018 plantings.

USDA did not release information on payment rates in a call with reporters announcing the program.

“Unfortunately, when the Chinese decided late in the game, after several visits to, to renege on many the (trade) commitments they’d already made, to his credit, President Trump immediately directed me to again create a program,” USDA Secretary Sonny Perdue said in a call with press to announce details of the program. “Because he knew that farmers would bear the brunt of this lack of a trade deal with China once again. So he has demonstrated his great affection and affinity for America’s, farmers and ranchers and he does know that because of the agricultural trade surplus, our farmers and producers, ranchers are going to bear the brunt of these trade disputes disproportionately.”

Program payments will be split into three tranches, the first coming as soon as late July. Second and third payments would come in late fall and early 2020 respectively, according to Perdue. The later two rounds of payments could be cancelled if the U.S. and China can resolve the trade dispute, Perdue said.

Covered crops are: alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton, and wheat.

Dairy producers will receive a per hundredweight payment based on production history similar to the 2018 program while hog producers will receive payment based on inventory in a specific time frame. USDA indicated that rates and the time frame for determining hog inventories will be announced at a later date.

Tree nut producers, fresh sweet cherry producers, cranberry producers, and fresh grape producers will receive a payment based on 2019 acres of production.

The overall scope of tariff aid has expanded from $12 billion in 2018 to $16 billion this year. That expansion comes because USDA took a broader look at trade distorting practices according to USDA Chief Economist Robert Johansson.

“We account for some other variables such as repeated distortionary trade policies by China and other countries that have contributed to the slow pace of market adjustment and trade that we’ve seen for agricultural production,” Johansson said. “So that brings us to the $16 billion level.”

Of that $16 billion, the bulk, $14.5 billion is targeted for direct payments to farmers. Of the remainder, $1.4 billion is slated for commodity purchases through the Food Purchase and Distribution Program and $100 million is to be issued through the Agricultural Trade Promotion Program to assist market development.

Trump Readies New Round of Aid to Farmers Hit by China Trade War

Fri, 20 Nov 2020 05:25:26 GMT

(Bloomberg) -- The Trump administration is preparing to announce another round of aid to farmers hurt by the trade war with China as soon as Thursday, people familiar with the plan said, a package of assistance that could exceed $15 billion.

The aid plan is largely modeled on the program the administration put in place last year after China slapped retaliatory tariffs on U.S. agricultural products, though the payments will be more generous.

The administration is considering payments of about $2 per bushel to soybean growers, 63 cents per bushel to wheat growers and 4 cents per bushel to corn growers to compensate for losses from the trade war, according to two people familiar with the payment levels, who asked not to be identified because the aid plan hasn’t been made public.

The administration last year paid $1.65 per bushel for soybeans, 14 cents per bushel for wheat and 1 cent per bushel for corn.

Other commodities also will receive payments in this year’s aid package, as they did last year, said the people, who didn’t provide the rates.

The outlines of the plan still could change since President Donald Trump can make adjustments any time before it’s officially announced. The White House referred questions to the Agriculture Department. A USDA spokeswoman, Michawn Rich, declined to comment, saying the support package will be released at a later date.

The standoff with China over trade is compounding the financial strain of five years of falling commodity prices and losses from spring flooding. American farm income dropped 16% last year to $63 billion, about half the level it was as recently as 2013. It’s directly hitting a key part of Trump’s political base: the rural voters that he won by a wide margin in 2016 and who are key to his re-election campaign.

Payments to Farmers

The current plans call for some direct purchase of food by the government, as Trump indicated when he first announced the new round of trade aid, but payments to farmers would be the main element of the assistance.

Agriculture Secretary Sonny Perdue said last week that the aid package could go as high as $20 billion, more than the $15 billion Trump announced earlier this month.

Corn growers argued they were short-changed in last year’s $12 billion trade assistance plan and campaigned for better treatment in the new round of aid. The National Corn Growers Association sent out a call to action last week urging farmers to call the White House to seek a higher payment for corn.

While the payments last year were based on farmers’ current production, the basis will be modified, the people familiar with the plan said. The administration is considering basing payments on the acreage farmers plant this year and their historic yield of crops per acre, the people said.

Former Agriculture Department officials and economists have warned that a decision to base payments on current acres planted risks skewing farm production decisions and adding to the rising stockpiles of crops, particularly soybeans. That risks depressing commodity prices even after the current trade dispute is resolved.

The combination of a disparity in payments favoring soybeans over corn and rainy weather in the Midwest could encourage farmers to change plans and decide to plant soybeans rather than corn. Soybeans have a shorter growing season, so they can be planted later.

As of Sunday, farmers nationwide had planted only 49% of the corn they had said they intended to plant, according to the U.S. Department of Agriculture, the slowest progress in data going back to 1980. On average over the past five years, farmers had planted 80% of their intended crop at this point in the year.

Since Congress passed the Freedom to Farm Act in 1996, U.S. farm subsidies had moved away from payments based on current crop production in an effort to avoid distortions in agriculture markets. Instead, subsidy payments are based on an average of how many acres a farmer has planted of an individual crop in previous years and crop yields for the area.

The payments last year were made through the Commodity Credit Corporation, a New Deal-era entity administered by the U.S. Department of Agriculture. The trade aid last year also included some food purchases.

©2019 Bloomberg L.P.

Farm Loan Delinquencies Highest in 9 Years as Prices Slump

Fri, 20 Nov 2020 05:22:17 GMT

The nation’s farmers are struggling to pay back loans after years of low crop prices and a backlash from foreign buyers over President Donald Trump’s tariffs, with a key government program showing the highest default rate in at least nine years.

Many agricultural loans come due around Jan. 1, in part to give producers enough time to sell crops and livestock and to give them more flexibility in timing interest payments for tax filing purposes.

“It is beginning to become a serious situation nationwide at least in the grain crops — those that produce corn, soybeans, wheat,” said Allen Featherstone, head of the Department of Agricultural Economics at Kansas State University.

While the federal government shutdown delayed reporting, January figures show an overall rise in delinquencies for those producers with direct loans from the Agriculture Department’s Farm Service Agency.

Nationwide, 19.4 percent of FSA direct loans were delinquent in January, compared to 16.5 percent for the same month a year ago, said David Schemm, executive director of the Farm Service Agency in Kansas. During the past nine years, the agency’s January delinquency rate hit a high of 18.8 percent in 2011 and fell to a low of 16.1 percent when crop prices were significantly better in 2015.

While those FSA direct loan delinquencies are high, the agency is a lender of last resort for riskier agricultural borrowers who don’t qualify for commercial loans. Its delinquency rates typically drop in subsequent months as more farmers pay off overdue notes and refinance debt.

With today’s low crop prices, it takes high yields to mitigate some of the losses and even a normal harvest or a crop failure could devastate a farm’s bottom line. The high delinquency rates are caused by back-to-back years of low prices, with those producers who are in more financial trouble being ones who also had low yields, Featherstone said.

The situation now is not as bad as the farm credit crisis of the 1980s — a time of high interest rates and falling land prices that was marked by widespread farm foreclosures. At the height of that crisis in 1987, U.S. farmers filed 5,788 Chapter 12 bankruptcies. There were 498 in 2018.

Some fears are also surfacing in reports such as one this month from the Federal Reserve Bank of Minneapolis, which said the outlook is pessimistic for the start of this year with respondents predicting a further decline in farm income. About 36 percent of farm lenders who responded said they had a lower rate of loan repayment from a year earlier.

Tom Giessel said he borrowed some operating money from his local bank last year and paid it off. Giessel, who raises wheat and corn on some 2,500 acres in western Kansas, said the only thing that kept the farm economy afloat in his area was that people had pretty good fall crop yields. Giessel, 66, said he had once gotten to the point where he didn’t have to borrow his working capital and had a relatively new set of equipment, but he has had to borrow money for the last three years just to put in a crop.

“A lot of people are in denial about what is going on, but reality is going to set in or has set in already,” Giessel said.

The February survey of rural bankers in parts of 10 Plains and Western states showed that nearly two-thirds of banks in the region raised loan collateral requirements on fears of a weakening farm income. The Rural Mainstreet survey showed nearly one-third of banks reported they rejected more farm loan applications for that reason.

Grain prices are down because farmers around the world have had above-average production for several years. But some nations’ economies are not doing as well, decreasing demand for those crops, Featherstone said. Grain prices peaked in 2012 and prices have roughly fallen 36 percent since then for soybeans, 50 percent for corn and 48 percent for wheat.

When Trump imposed tariffs, China retaliated by stopping soybean purchases, closing the biggest U.S. market. While trade negotiations with China continue, many farmers fear it will take years for markets to recover — as it did when President Jimmy Carter imposed a grain embargo on the then-Soviet Union in 1980.

“The tariffs Trump is messing around with are not helpful at all — I don’t think anybody knows the true effect,” said Steve Morris, who farms near Hugoton in southwest Kansas.

Morris, who has been cutting back acreage in an effort to avoid borrowing money, said drought conditions last year in his area devastated his wheat yields. Trump has offered farmers subsidies to compensate for the tariffs but they are based on harvested bushels. Morris, 73, received a subsidy payment last year for his wheat crop of only $268.

Many farmers are now scrambling to borrow money as spring planting nears.

Matt Ubel, a 36-year-old Kansas farmer who bought out his parents’ farm in December 2016, said they have not been delinquent on their FSA loans, but acknowledged the payment was “a challenge to make last year.”

“We have had trouble for several years getting operating loans,” he said. “This year doesn’t look any better.”

A key factor in whether farmers receive loans is the value of their land.

Farmland values in parts of the Midwest and Plains regions largely held steady at the end of last year, according to the Federal Reserve Bank of Kansas City. But slightly higher interest rates and an uptick in the pace of farmland sales in states with higher concentrations of crop production could drive those land values down, it said.

“The big key in terms of whether or not we enter a financial crisis would be what would happen to land values,” Featherstone said. “So far land values have gradually declined, so that has kind of prevented us from maybe entering a situation like we did in the 1980s.”

Trump's China Focus Imperils $14 Billion in Japan Farm Sales

Fri, 20 Nov 2020 05:22:00 GMT

(Bloomberg) -- Bill Flory sends about a quarter of the wheat he grows in Idaho to Japan, a country so key to the fourth-generation farmer that he’s visited there three times in five years.

Now he’s worried. While Canada, Australia and the European Union have all recently secured new or adjusted trade deals with Japan, the U.S. has not. That could give rivals an edge on prices with a customer that regularly imports about $14 billion a year in U.S. agriculture and farm-related products.

Flory, who supports President Donald Trump politically, said he believes the U.S. will eventually finalize a deal with Japan, but he’s concerned about the interim. Meanwhile, the Trump administration instead appears laser focused on trade talks with China, risking the 50 percent market share now controlled by American wheat supplies in Japan.

“How much market share will we lose until these trade issues are settled?” Flory asked. “My biggest fear is we lose market share not because of quality, but because of a lack of trade negotiations being settled.”

While Trump and Japanese Prime Minister Shinzo Abe have long signaled the intention to reach a trade deal, the administration has been engulfed in negotiating with China before a March 1 deadline, which could trigger a new increase in tariffs.

“Our competitive position is right now starting to be whittled away and we need to address that with all deliberate speed,” said Tom Halverson, chief executive officer of CoBank, a $125 billion lender to the agriculture industry. “We have built up our market share in Japan over decades. It would be profoundly unhelpful to the rural economy and to the agricultural economy to see those relationships and that market access to start to atrophy.”

At the U.S. Department of Agriculture’s annual outlook forum in Arlington, Virginia, on Thursday, Gregg Doud, the chief agricultural negotiator for the Office of the U.S. Trade Representative, said the U.S. needs to make a trade pact with Japan an “extraordinary” priority.

Here are a few of the most impacted markets:

Wheat

As of April 1, grain shipped by American farmers will face a disadvantage of $14 a metric ton to Australia and Canada, a gap that will grow to $70 a ton after nine years, said Vince Peterson, president of U.S. Wheat Associates. By then, he said, “most of the market will be long gone.”

“Japanese food processors are looking for ways to reduce their exposure to U.S. wheat right now,” Peterson said at a Dec. 10 hearing by the U.S. Trade Representative. “They will reformulate products to adapt to wheat from different origins.”

The price disadvantage means Japanese millers are expected to cut average annual imports of U.S. western white, dark northern spring and hard red winter wheat by more than half to 1.35 million tons or less, the National Feed and Grain Association said in its Nov. 26 feedback to USTR.

Beef and Pork

Japan is the top market for American beef, with the U.S. enjoying a 48 percent market share. While a previous agreement already gave Australian beef an advantage, that will widen even further. It’s a “huge roadblock,” said Don Close, a senior analyst of animal protein at Rabobank. Canada is also looking to gain market share.

American pork exporters will also see more competition, especially from the EU. The U.S. was the top supplier of pork to Japan in 2018. But with the new trade agreements implemented and the absence of a U.S. deal by April 1, American export losses would amount to more than $600 million by 2023 and $1.06 billion by 2028, the U.S. Meat Export Federation estimates.

“It is critically important that the U.S. get that long-term agreement with Japan,” Close said. “I think a lot of the heavy lifting with those negotiations has already been done, it’s just that we’re so occupied with China and all of these other fracases, that they haven’t had time to ‘okay let’s sit down and get this done’.”

Dairy

Japan is the fourth-biggest market for American dairy and the industry stands to lose $5.4 billion in the 21 years through 2038, the U.S. Dairy Export Council estimates. By 2027, almost half of American shipments to Japan will have been replaced without an agreement.

The cheese market would feel the “most significant overall impact,” according to the lobby group, which estimates the U.S.’s market share in Japan could grow to 24 percent by 2027 from 13 percent a decade earlier.

“Beef has been hurt, and pork has been hurt, wheat has been hurt,” said former Agriculture Secretary Tom Vilsack, who now heads the Dairy Export Council. It’s the responsibility of the administration “not to forget about agriculture generally, and dairy specifically, because the losses can mount pretty quickly at a time when prices are low.”

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