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Articles from 2017 In March


USDA confirms it: Big increase in soybean acres

chas53/ThinkstockPhotos Red tractor and blue planter planting corn.

USDA on Friday delivered a double-dose of bearish news for soybeans when it forecast that farmers will plant more soybeans this year at a time when there are 200 million more bushels of soybeans in storage than a year ago.

The grain trade expected more soybean acres, but USDA’s forecast of 89.5 million was even larger than trade estimates. That increase of 7%, or 6 million more than a year ago, will draw acres from corn and wheat, both of which will have smaller areas this year.

Also bearish for soybean prices was the quarterly stocks report, which showed 1.735 billion bushels of soybeans in storage, which topped the average forecast and was up from the 1.53 billion a year ago. Corn and wheat stocks of 8.62 billion and 1.66 billion, respectively, were above trade averages and greater than a year ago.

“USDA’s March 31 reports have a well-deserved reputation for surprises, and they proved why again today,” said Bryce Knorr, Farm Futures senior grain analyst. “Soybeans got a double dose of bearish news. Farmers as expected said they want to plant record acres, and their intentions were even more than we found in our survey."

Knorr said growers across the country are moving to soybeans and cutting back on other crops, including spring wheat, sorghum and corn. This was especially true in North Dakota, where soybean acreage is up 14% from 2016, while spring wheat seedings should be down 10%.

USDA said soybean acreage intentions are up or unchanged in 27 of the 31 states it surveys.

“CBOT May soybeans traded to six-month lows before the report. The market is oversold, but next downside support is $9.3725. A test of that level could trigger short covering, but growers shouldn’t expect any real rallies until we’re well into the growing season,” said Knorr.

Near midday on Friday and after the report, May soybeans were down 17 cents at $9.46 and new-crop November was down 8-1/2 at $9.54-3/4. May corn was up 6 at $3.63-1/2 and December up 6-1/4 at $3.87-1/4.

Total wheat acreage was expected to be down this year as a drop in winter wheat’s area had been known for months. Friday’s report was the season’s first for spring and durum wheat and it showed spring wheat down 3% at 11.31 million acres and durum down 17% at 2 million. North Dakota, the biggest durum and spring wheat producer, is expected to see a 10% drop in spring wheat acreage and a 21% drop in durum.

“The acreage numbers are slightly supportive for corn. Corn was trending higher just ahead of the report, so there may be fund money deciding to get long today for a weather rally on end-of-the-quarter positioning,” said Knorr. “The stocks number would appear to indicate lower feed usage due to the fairly mild winter and abundant supplies of competing rations.”

USDA’s estimate is “only 68 million bushels above our projection”, less than 1%, which is within the range of sampling error, said Knorr.

“May (corn) futures rallied up to the moving average resistance I suggested in this morning’s report on FarmFutures.com,” he said.

MIDDAY-MidwestDigest-03-31-17

Birthday wishes to Orion Samuelson who is celebrating his 83rd birthday today in Arizona. 

One traffic safety expert says pedestrian deaths are climbing faster than motorist deaths.

The Senate Agriculture Committee voted to recommend Sonny Perdue as agriculture secretary with one no vote and one senator abstaining.

Wildfire relief - two very good ways to channel money to those victims are the websites: ashlandcf.com and the other is kla.org.

MORNING-MidwestDigest-03-31-17

Distractions - it just doesn't involve driving distractions, pedestrian deaths reaching nearly 6,000 last year. We're driving more because of improved economy and lower gas prices and more people are walking for exercise. There was an 11% spike in pedestrian deaths last year. More drivers and walkers are distracted by cell phones.

Hogs and Pigs report confirmed expansion in the nation's hog herd. Talking about higher production of pork down the road. Trade was bracing for bearish report, which it really didn't get. Breeding herd expansion of 1%. Exports and slaughter capacity forecast to increase by 8%.

Chicago-based McDonalds said it will offer fresh beef quarter pounders beginning next year. It will be cooked to order. Also allow customer to customize with choice of bun and toppings.

Farm Progress America, March 31, 2017

Max Armstrong offers some insight on farm safety issues that happen during busy times, like planting. For example, 40% of farm deaths are caused by tractor rollovers. Max offers other tips as well.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Perdue confirmation awaits full Senate consideration

Getty Images/Drew Angerer Sonny Perdue being sworn in during his confirmation hearing to be Donald Trump's secretary of agriculture.

Former Georgia Gov. Sonny Perdue is one step closer to being the next secretary of agriculture. The Senate Agriculture Committee approved his nomination yesterday. His nomination now goes before the full Senate for consideration. No announcements have been made yet regarding timing for floor consideration in the Senate, but the goal is to have Perdue confirmed by the Congressional Easter recess which begins April 10.

If the Senate does not vote on Perdue’s nomination next week it could be the end of April or early May before he is confirmed. Perdue has received wide spread support from the agriculture community. Six former secretaries of agriculture who served in the Reagan, Clinton, Bush and Obama administrations sent a letter of support to the Senate.

GAO says USDA and HHS need to do more on antibiotic resistance
USDA and the Food and Drug Administration need to develop more specific guidelines and increase data collection on the use of medically important antibiotics in food animals according to the latest Government Accountability Office’s report. GAO says progress had been made since 2011 but there are still gaps in the FDA’s oversight and USDA’s data collection.

According to the GAO, the agencies lack farm-specific data, do not have metrics to assess their actions to manage antibiotics use, and have not conducted on-farm investigations during foodborne illness outbreaks.

The GAO recommends the USDA and the Department of Health and Human Services:

• Develop a process which may include timeframes to establish appropriate durations of use for medically important antibiotics in food animals.
• Establish steps to increase veterinary oversight of medically important antibiotics administered in routes other than feed and water, such as injections and tablets.
• Develop performance measures and target for actions to manage use of antibiotics, such as revising the veterinary feed directive and developing guidance documents on judicious use.
• Develop performance targets for collecting farm-specific data on antibiotic use and antibiotic-resistant bacteria in food animals.
• Develop a framework for deciding when on-farm investigations are warranted during outbreaks.

The issue of use antibiotics in food animals will continue to be an issue during the 115th Congress.

Heritage Foundation calls for cuts in USDA programs
The Heritage Foundation released its “Blueprint for Balance — A Federal Budget for Fiscal Year 2018” in which it makes recommendations to eliminate, reduce funding or make changes to various federal programs.

Heritage recommends a number of USDA programs be eliminated or repealed. They include:

• Eliminate revenue-based crop insurance policies
• Eliminate the Market Access Program
• Eliminate the sugar program
• Repeal the USDA catfish inspection program
• Repeal the Agricultural Risk Coverage and Price Loss Coverage programs
• Eliminate the Natural Resources Conservation Service’s Conservation Technical Assistance Program

The administration’s earlier proposal to cut various discretionary spending programs reflected many of the Heritage Foundation’s recommendations. The administration will be sending to Congress its proposed cuts for mandatory programs in May and the agriculture community will be watching closely to see if any of Heritage’s recommendations are contained in the budget.

Ag needs strong safety net
With U.S. agriculture currently in a “severe economic slump” with no end in sight, farmers and ranchers need a strong farm safety net in the next farm bill is the message a coalition of farm organizations sent to Congress.

In a letter to the Senate and House Budget and Appropriations committees, the coalition asks Congress to increase funding for farm programs in the 2018 farm bill. The group says, “While we do not yet have a full-fledged financial crisis in rural America, a good many farmers and ranchers are not going to be able to cash-flow in 2017. With USDA projecting continued low prices in 2018 and beyond, this situation threatens to quickly and vastly expand with each and every crop year.”

A strong safety net in the next farm bill will help producers until market conditions improve. The coalition reminded the committees that agriculture contributed to deficit reduction with the 2014 farm bill, which was estimated to reduce the deficit by $23 billion over 10 years.

Those signing the letter include the American Farm Bureau Federation, American Soybean Association, National Association of Wheat Growers, National Milk Producers Federation, National Corn Growers Association, National Cotton Council, National Farmers Union, and USA Rice Federation.

MIDDAY-MidwestDigest-03-30-17

It's a very different investigation for sheriff's deputies in Nebraska. They are going through angry emails after NCAA game. Reviewing more than 3,000 voicemails after Kentucky's loss to North Carolina. After he served as the referee for the game, bad reviews started flooding his company website. 

Most analysts would agree March planting report due out Friday is one of most volatile market days. Quarterly grain stocks report is released at same time. Wheat acreage is released at same time. Wheat acreage at lowest level in this county since World War 1.

 

MORNING-MidwestDigest-03-30-17

The NAFTA agreement that has regulated trade with Canada and Mexico the past 24 years may not get thrown out by Trump. There might just be modest changes. The document taken by Trump trade team appears to be compromise.

Rains in Plains state generally welcome, coming at good time for wheat crop. In the 6-10 day forecast there is rain too.

The Independence, Mo., police officer shot in the head remains in critical condition this morning.

Not all the cities in our region are growing. Some continue to lose population. Nashville, however, continues to boom. Nashville metro area added 36,000 people in a  year. That means Nashville region grew by 100 people a day.

Farm Progress America, March 30, 2017

FarmProgressAmerica_FeatureIMG

Max Armstrong notes that rising worries about theft have more farmers putting cameras on their farms to keep track of grain and equipment. He cites one farm that found the need to install a motion sensitive security camera system, which they claim is a theft deterrent.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Inbox purge presents tidbits missed

National Hog Farmer Email Inbox

Technology is supposed to make people’s lives easier. Yes, technology had helped the print media improve our news gathering and dissemination. This same technology has also inundated us with an endless supply of information at our fingertips, sometimes an almost suffocating amount of information.

My email Inbox is a daily reminder of the good and bad that this technology has brought us. Keying in content of days past has been replaced by the copy and paste convenience of today. That convenience needs to be supplemented with an auto-purge function so the Inbox does not max out.

My apologies, but here is my attempt to purge my emails, but yet share with you some snippets that maybe weren’t on your radar screen.

1. Swine Health Information Center Disease Matrix
SHIC’s Swine Disease Matrix was developed last year to evaluate transboundary and emerging diseases, and was recently reviewed and updated by the SHIC Monitoring and Analysis Working Group. The objective of the Matrix review is to facilitate a swine health reporting and communication network among the international contacts of the working group.

SHIC Executive Director, Paul Sundberg, says the Matrix is a living document demanding periodic updates and the working group reviews each disease listed and its impact in three different categories: economic impact (impact on the farm level); market impact — domestic and international; and the chances of introduction and emergence in the U.S. herd. The overall score assigned in the Matrix is the average of the three categories. As a result of the review, scores on diseases in the Matrix were changed to reflect current conditions in the industry.

The Matrix is available online, as are facts sheets on diseases included in the Matrix.

It’s good to be aware of what might be knocking on the door of the U.S. swine industry.

2. Food security leads to peace
A well-fed population is a content population.

Conflict, globally and locally, is often caused when one hungers for what they don’t have – those hungers may be figurative or real. On March 30, the Chicago Council on Global Affairs issued “Stability in the 21st Century: Global Food Security for Peace and Prosperity,” a report on how U.S. efforts to fight food insecurity around the world can provide increased security and economic vitality at home, particularly in rural areas.

“The discussion of food security as a driver of stability is an urgent one as Congress and the administration consider the future security of the United States,” says Council president Ivo H. Daalder. “It is vital that the United States sustain successful investments, such as those in international agricultural development that have contributed to decades of human progress — especially as famines are emerging on multiple fronts, populations are booming and the effects of climate change are making farming more difficult.”

“The complex new food security challenges we face call for bold U.S. leadership but also present new opportunities for America,” says Dan Glickman, former U.S. secretary of agriculture and co-chair of the report task force. “Agriculture must become more productive in low-income countries, not just to feed rapidly growing populations but also to generate economic opportunity in the food system as hundreds of millions of young people enter the workforce in the coming decades. In addition, as agriculture abroad intensifies, incomes rise, translating into attractive new markets for American farmers and the broader agribusiness sector. Active U.S. leadership would help accelerate this.”

Specifically, the report calls for the Trump administration and Congress, in close collaboration with the private sector, civil society, universities, multilateral institutions and other national governments, to take urgent action in four key areas.

• Make global food and nutrition security a pillar of U.S. diplomatic and national security engagement and strengthen the integration and coordination of activities both within the United States and around the world;

• Prioritize public research investments to unlock innovation and harness new technologies for the agriculture, food and nutrition sectors;

• Productively partner with committed companies to amplify the power of the private sector to transform food and nutrition security, from individual entrepreneurs to multinational businesses;

• In strategic alignment with foreign policy goals, ensure that U.S. agriculture and nutrition assistance programs are efficient and support low-income countries’ capacity to implement responsible and effective policies.

3. Soybeans are incredible
Hog producers know just how amazing soybeans are, as soybean meal has been a pig-diet staple for decades. Soybean producers also know how amazing the bean is with hundreds of products that have been realized from this legume. Now, the amazing bean may make one of the swine industry’s byproducts more, er, palatable. It long has been argued that if livestock didn’t smell, neighbor relations would be a lot more smooth.

Since 1994, the Indiana Soybean Alliance has funded the Student Soybean Product Innovation Competition at Purdue University. This year, 16 teams participated to find innovative new uses for soybeans that meet a market need and ultimately increase demand for soybeans.

Though they came in second, a team of two Purdue juniors studying food science earned a $10,000 prize for Soy Poo-fession, a technology using soybean oil and soy lecithin to emulsify the water in a toilet bowl, eliminating the odors rather than simply masking odors as usual air fresheners. Kuan-Ting Lee, from Taiwan, and Yudi Wen, from China, foresee Soy Poo-fession possibly being used to mitigate or eliminate livestock manure smells.

I’ve got a long way to go to purge all superfluous emails, but a guy as to start somewhere.

3 pivotal points producers need to navigate this year

National Hog Farmer Sows in a gestation room

Modern expansion is the pathway America’s pig farmers continue to tread and the sow intention numbers in the USDA March Quarterly Hogs and Pigs report carve that pathway for pork production this year. “The switch is turned toward expansion mode by default,” notes Kevin Bost, president of Procurement Strategies Inc.

He continues, “Hogs numbers are still growing. As a trader, it is hard for hog prices to increase until you see a cut in numbers.”

From a price standpoint, 2014 was an extremely good year for the hog farmer. “The hog producers in 2014 made so much money that they still have it their pockets. The bankers are not controlling the expansion as much as the hog farmers are,” explains Len Steiner, president of Steiner Consulting Group.

Furthermore, Daniel Bluntzer, partner at New Frontier Capital, says the new packing plants are still the driving force behind the expansion. “If you spend that much money building a few plants you are going to make sure those hogs are there. The incentive was there and pushed by the packers.”

Currently, U.S. packing capacity stands at 2.453 million head for weekly slaughter under the assumption of 5.4 work days. Three new processing plants are anticipated to be in operation in the fall of 2017, boosting weekly slaughter capacity by 137,000 head. That is 2% larger than the largest weekly slaughter in the fall of 2016.

Market watch list
Moving forward there are three main pivotal points to watch, Steiner stresses.

Exports: For 2017, U.S. pork exports are forecast at 21.7% of total production. That is up slightly from a year ago. “We have to expand this not only per pound but as a percentage of total production because more is coming at us,” Steiner states.

Per capita consumption: Despite an increase in exports, pork per capita consumption is anticipated to be up 1.27% this year. “If exports or per capita consumption does not increase then you will have some problems on prices,” he warns.

New packing plants: According to Steiner, the U.S. slaughtered 91,000 more head than estimated capacity for the week last year. Steiner says, “If these three plants are operational in October or November, we are only going to be 49,000 over the theoretical capacity. However, if you run into construction delays then the number gets a lot bigger than 91,000 over capacity.”

He further explains, “Slaughter capacity in this country only lasts about eight weeks but it is the same eight weeks we saw in 1998 that came a debacle at that point in time. We just ran out of capacity.”

By the numbers
The estimated numbers in the quarterly report fell in line with pre-report expectations of market analysts. U.S. pig inventory stands at 71 million head on March 1, up 4% from the previous year but fell 1% from last quarter.

USDA

• Breeding inventory, at 6.07 million head, was up 1% from last year, but down slightly from the previous quarter.

• Market hog inventory, at 64.9 million head, was up 4% from last year, but down 1% from last quarter.

• U.S. hog producers intend to have 3.01 million sows farrow between March and May of this year, and 3.05 million sows farrow between June and August.

• The December 2016-to-February 2017 pig crop, at 31.4 million head, was up 4% from 2016. Sows farrowing during this period totaled 3.01 million head, up 3% from 2016. The sows farrowed during this quarter represented 49% of the breeding herd.

• The average pigs saved per litter was a record high of 10.43 for the December-to-February period, compared to 10.30 last year. Pigs saved per litter by size of operation ranged from 8.00 for operations with 1-99 hogs and pigs to 10.50 for operations with more than 5,000 hogs and pigs.

USDA

The entire report can be found here.