Weekly News Highlights
Reporting Agriculture’s Business In this edition of FarmNetNews, you’ll find the latest USDA supply/demand figures and agronomic information for the 2017 crop. State and federal policy news can also be found in this issue. Heading into this weekend, the Red River Farm Network will begin a special series that considers the benefits of agricultural education. This series will coincide with National FFA Week. That series will be found on your local RRFN radio affiliate. You can also find us on Facebook and Twitter. The RRFN team, Carah, Mike, Randy, Jay and Don, also have individual Twitter feeds.
USDA Updates Ending Stocks USDA raised wheat exports by 50 million bushels and lowered usage by 3 million in Thursdays Supply and Demand report. The net result is an ending stock draw-down of 47 million bushels. USDA raised the mid-point season average farm price by a nickel to $3.85 per bushel. USDA increased corn ethanol usage by 25 million bushels to 5.35 billion bushels and lowered corn ending stocks by 35 million bushels. USDA narrowed the range for the season average farm price by 10 cents on each end with the midpoint price unchanged at $3.40 per bushel. USDA left soybean ending stocks unchanged at 420 million bushels and left the season average price unchanged from last month with a midpoint of $9.90 per bushel.
Report Tells Us Two Important Things Zaner Ag Hedge market analyst Ted Seifried says Thursdays USDA report does two things. I think it continues to suggest the worst of the fundamental news is behind us in corn. It also may be suggesting the situation in Argentina isnt as bad as some of the trade has made it out to be. Maybe were going to be okay with the South American soybean crop at this point,” explains Seifried. Seifried sees the report as being a little negative for soybeans and the world numbers for corn as positive. “Going forward, the focus will go back to South American weather, acreage mix in the U.S. and outside markets.
The Next Big Story University of Minnesota Grain Marketing Specialist Ed Usset describes winter wheat as the most interesting story in the market right now. The 2017 planted winter wheat acres are the lowest level since 1909, when USDA first started to gather data on the crop. Weve never had this few acres. Im going to guess spring wheat and durum acres will also be down some. The net result will probably be the smallest number of planted acres in 100 years. Weve only had a couple of years with fewer planted acres than last year. Usset wouldnt be surprised if the wheat complex could be a market mover. Were going down this road of fewer acres. If you look worldwide, no one is going to be concerned about wheat. Im convincing myself the next big story in commodities will be wheat.
Possible Wheat Payments It wont be determined until 2016 marketing year average prices and county yields are known, but nearly eight months into the marketing year for wheat, the prospect of strong PLC and ARC-County payments is high. If a producer chose PLC wheat, thats a really strong payment,” said Andy Swenson, farm management specialist, North Dakota State University Extension. “Thats currently about $1.70 per bushel for PLC. Swenson also said he expects maximum ARC-County payments for 2016 wheat. PLC payments for canola in northeast North Dakota should again be substantial, likely between 2014 and 2015 payments. Swenson thinks the strong yields for corn and soybeans will eliminate ARC-County payments.
No Bin Birthdays Farmers are sitting on wheat, but that may not be an effective strategy. Bolt Marketing market analyst Duwayne Bosse says farmers shouldnt have multiple years of a crop in the grain bin. Your interest rates and costs of storage add up in time. Especially when you look at what Minneapolis wheat has done lately. We had a nice pop in the market recently. But that pop in the market was your opportunity to say lets reward the market and sell any of that wheat that has a birthday.
Growers Promote Soil Health Cover crop advocates shared the stage at the North Dakota Cornvention to discuss soil health. Delamare, North Dakota farmer Terry Wehlander highlighted a portion of his farm affected by high salinity. I thought tillage would fix the problem, but discovered that tillage made it worse, said Wehlander. It was just spreading the issue. Now, weve been going to no-till and keeping cover on it, which is helping with my salt issues. Centrol crop consultant Lee Briese, who is based at Edgeley, North Dakota, said soil health is the best way to make a difference on the farm. Briese likes to use cereal rye as the gateway into cover crops. These cover crops are also seen as a way to deal with weed resistance. Anything that has a good canopy and is going to compete with that weed at the time. There are lots of opportunities for weeds to grow in late season. If we have a cover crop competing with it, its reducing that weed pressure.
Getting Ducks-in-a-Row Monsanto is offering XtendiMax informational seminars around North Dakota. Dr Eric Nelson says the agriculture industry needs to have its ducks-in-a-row to use the XtendiMax system. We need to make sure we kill the weeds we intended to kill and we do not kill something unintended,” says Nelson. “We know dicamba is an effective herbicide. That also means if it doesnt stay where we put it on purpose, we could kill some off-target crops. Nelson says understanding the product label and using some common sense will be critical for proper application.
Heitkamp Supports Perdue, May Bring Farm Bill Hearing to ND Agriculture Secretary-designate Sonny Perdue has the support of North Dakota Senator Heidi Heitkamp. Heitkamp is the first Democratic senator to endorse Perdues nomination. I liked him a lot. I cant imagine anyones not going to like him. He knows agriculture frontwards and backwards,” says Heitkamp. “We tease him, because hes south of the Mason-Dixon. He assures me he knows corn and wheat. For me, my questions were: will you get engaged in the process of rewriting the Farm Bill and implementing the Farm Bill? And will you have our back on trade issues in the administration? Heitkamp said her meeting with Perdue was more of a strategy session than an interview. Senate Agriculture Committee Chairman Pat Roberts has scheduled a Farm Bill field hearing for February 23 in Kansas. A similar hearing may be coming to the region. Were looking at the schedule. I havent talked to Senator Hoeven, but Id love to do a field hearing in North Dakota. Were going to offer everyone an opportunity to spend time analyzing this. Heitkamp said the budget will be an ongoing part of the Farm Bill debate, but she hopes agriculture will get credit for the sacrifices it has already made.
MN Farm Bureau Legislative Minute Here’s the latest from the Minnesota Farm Bureau. In this report, MFBF Director of Public Policy, Amber Hanson, talks about Cabinet confirmations.
Cutting Costs? There will likely to be proposals to cut costs in the 2018 Farm Bill. during the next round of negotiations. The political likelihood is that it will be level-funded at best and could face more cuts,” said Ferd Hoefner, senior strategic advisor, National Sustainable Agriculture Coalition. “We are going to be ready if that happens. Hoefner sees a number of concerns for agriculture, ranging from trade to immigration reform. “If they start doing major damage to the safety net, agriculture could really be reeling at the beginning of this administration.
Crop Insurance Safety Net Does Work House Agriculture Committee Ranking Member Collin Peterson told the crop insurance industrys annual conference crop insurance is a safety net that really works for producers. Peterson praised private-sector delivery as one of the main reasons for crop insurances success over the years. In a video message to the group, Agriculture Committee Chairman Mike Conaway said private industry and a motivated agent workforce on the ground have helped increase crop insurance participation over the years. Conaway said that has reduced taxpayer risk exposure and virtually eliminated the need for costly ad hoc disaster bills in agriculture.
Promoting Trade Nearly 90 agriculture groups and companies have sent a letter to President Donald Trump to stress the importance of trade in the Asia-Pacific region. Eric Trachtenberg, who is with McLarty Associates, says the letter was prompted by President Trumps decision to withdraw from the Trans-Pacific Partnership. Trachtenberg, who spent 15 years with USDAs Foreign Agricultural Service and almost nine years in Asia, says he is cautiously optimistic because Trump is not tearing up NAFTA and is willing to renegotiate it. I think theres some hope people in the administration will listen to U.S. agriculture, because farmers overwhelmingly supported the election of President Trump,” says Trachtenberg. “We want to improve our trade negotiations and I think its a spirit of collaboration in mind when we are approaching the administration. I think people are worried, but I think theres hope we can get a better deal.
Executive Order Challenged The Natural Resource Defense Council, Public Citizen and the Communications Workers of America are suing the Trump Administration over an executive order to reduce federal regulations. With this order, for every new regulation implemented, two others would need to be eliminated. The lawsuit claims this order threatens the ability to protect healthy, safety and the environment.
The ’25 by 25′ Plan Minnesota Governor Mark Dayton announced a 25 by 25 goal for the state last week. The goal seeks to improve Minnesota’s water quality 25 percent by 2025. I think Governor Dayton is correct in saying lets all sit down at the table and see what we can come up with collectively as a group to reduce any problem areas by 25 percent in the aggregate,” said Minnesota Agriculture Commissioner Dave Frederickson. “There are a variety of things we can do. We may have areas of the state that need to work on nitrates or phosphates. Minnesota Soybean Growers Association President Theresia Gillie met with Dayton to talk about water quality. We talked about different incentives and to start focusing on the successes that have happened.”
Seeking Alternative Practices Within Buffer Law Minnesotas buffer law has resulted in questions and criticism from the agriculture sector. There is a provision in the buffer law that allows for alternative practices. The University of Minnesota, the Board of Water and Soil Resources and the Minnesota Corn Growers Association are collaborating on those possible alternative practices. If a farmer is looking at an area where they need a buffer, this would be a suite of practices that may include everything from a split nitrogen application on their farm to conservation tillage practices,” said Paul Meints, research director, MCGA. “Grouping those things together that would have the same or better benefit than the buffer would. Meints said the effort has an aggressive timeline. We just started the project in January. Its a quick turnaround. We hope for it to be officially recognizable by early April.
Lower Farmland Values The Federal Reserve Banks are reporting lower farmland values for the fourth quarter. The Kansas City Fed says land values fell six percent and the St. Louis Fed says quality land in their district fell eight percent during the quarter. The Fed Banks say continued low commodity prices and an ongoing slump in farm incomes is pushing land prices lower. In response to weakening credit conditions, 30 percent of bankers are reporting an increase in collateral requirements.
Farmland Credit Boost for Brazilian Farmers The Brazilian governments plan to permit foreign investors to own farmland in Brazil should boost credit availability for farmers. Brazil Ag Minister Blairo Maggi says the plan will also allow foreign banks to start taking the land as collateral when making loans. On another topic, Maggi thinks Bayers takeover of Monsanto, and the other multi-billion dollar deals sweeping the crops chemical industry, could squeeze farmers in Brazil. Maggi thinks the deals may lead to an excessive concentration in the supply of seeds and pesticides, undermining competition and trimming farmers profits.
Commodity Price Projections Available North Dakota State University Extension has commodity price projections available. Farm economist Ron Haugen says the price projections are available to help farmers prepare cash flow statements. Every year about this time, we come up with our short-term prices and long-term price projections. Theres nothing really earth shaking here. We just try our best and hope farmers will use these for short-term cash flow projections. Haugen says long term projections are available, too. Contact Haugen for details
Corn and Soybean Growers Plan Joint Expo In 2018, a joint North Dakota Corn and Soybean Expo will be held in Fargo. This will bring the Northern Soybean Expo and the North Dakota Cornvention into one program. North Dakota Corn Council Chairman Scott German explains. Our staff, along with the Soybean Council and Soybean Growers Association staff has been working together for two years on collaborating for a joint Soybean Expo and Cornvention. Next year, it will be at the Fargodome and a one day event.” The new event will also feature a larger trade show.
More Voices Needed The American Farm Bureau Federation FUSION Conference wraps up today in Pittsburgh. FUSION stands for farmers united with skills, inspiration, outreach and network. Rachel Arneson of Halstad, Minnesota said this conference highlights the importance of advocacy. “For every negative or false message about agriculture, it takes four or five positive to true messages to balance the scales so we need more voices to tell the story.” Arneson is a member of the Minnesota Farm Bureau Promotion and Education Committee.
Farm Background Provides an Advantage in NFL Minnesota Vikings linebacker Chad Greenway began his career playing nine-man football in Mount Vernon, South Dakota. At a meeting sponsored by DuPont Pioneer, Greenway said his background as a farm kid helped him succeed in the NFL. I feel like growing up with an agriculture background really gave me a huge advantage. I had the mindset, work ethic, mentality, drive and motivation. There were so many factors that helped propel my career. Greenway has participated in a number of projects connected to agriculture, supporting everything from Pioneer seed to ethanol to the dairy checkoff. Its rare for ag groups to have an ambassador they can look to and say this guy really lived it. My moms sister and uncle still live back on and run the family farm. Its the real deal. Im still somewhat involved in farming. I do some custom farming and some cash rent stuff with my mom.” More than 600 people participated in Wednesdays Pioneer Growing Point meeting in Fargo.
AURI Update In the weekly update from the Agricultural Utilization Research Institute. Learn more about the New Uses Forum.
New AgriGrowth Job Exchange The Minnesota AgriGrowth Council, along with RealTime Talent, has launched the AgriGrowth Job Exchange. The Exchange uses technology to transform a candidate recruitment process and streamline how employers and candidates connect with each other during the job/internship search process. AgriGrowth says the Exchange is the first of its kind technology solution that matches optimal candidates to jobs or internships, which will reduce potential turnover and overall hiring costs and bring a new efficiency to finding and hiring employees.
Used Equipment Prices Steady Greg Peterson, who is known as Machinery Pete, says the prices for good used machinery are holding steady. That trend is happening despite a slowdown in the number of auctions in January. The good condition used stuff showing up at auctions still has solid pricing and buyer demand. If its average condition equipment, the auction prices are sliding softer. Regional differences are being seen. “In wheat country, they arent quite as optimistic. Auction models on late-model equipment may be off. In the strong, record soybean yield areas across the U.S., you will see equipment go a little higher.
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Titan Machinery to Close 14 Dealerships Faced with a difficult economy, Titan Machinery plans to close 14 agricultural dealerships by the end of July. Titan Machinery now operates 89 locations in 11 states, including North Dakota, Minnesota and South Dakota. At this point, it is not known which dealerships will close. With this restructuring, Titan Machinery Chairman and CEO David Meyer said the company will cut expenses by $25 million. Titan Machinery is headquartered in West Fargo.
Syngenta Lawsuit Trial to Begin The first class-action trial in the litigation involving Syngentas release of Viptera corn has been scheduled to begin June 5. Syngenta released the trait before securing Chinese approval and the plaintiffs claim that resulted in significant losses to U.S. corn farmers. Progressive Ag Law attorney Ray Grabanski says the class action was certified last year. “Then, they set the opt-out procedure for those who dont want to be in the class action. That will finish up about the end of March. Anyone who doesnt opt-out of the class action will be part of the class action. Its more than likely, more than half of the nations 90 million acres of corn will be in the class action. As they start litigating that class-action, its going to be very important the kind of settlement that class action gets. Grabanski is liaison counsel for one of the law firms pursuing individual action against Syngenta. In the class action lawsuits, farmers can only sue for market damages for the bushels of corn grown. Grabanski said consequential damages could be paid to those who opt out of the class action. Grabanski says farmers who sued for consequential damages in a 2010 GMO rice case received 15 percent more than those in the class action case. Again, Grabanski emphasizes a decision to opt out of the class action lawsuit must happen before the end of March.
Dow-DuPont Merger Update Dow Chemical and DuPont have offered to sell spin off a portion of their agricultural portfolio to win approval from the European regulators. To avoid antitrust concerns, certain aspects of DuPonts crop protection business would be sold. Dow will sell its polymer division. The European Commission has until April 4 to finish its review of this merger. The deal is expected to be finalized within the next five months.
Progress Made on ChemChina-Syngenta Deal Syngenta is reporting 2016 net income of $1.18 billion. That compares to $1.3 billion in 2015. With the release of the financials, Syngenta CEO Erik Fyrwald said good progress is being made for the regulatory approvals of the proposed deal with ChemChina. Fyrwald expects the deal to close in the second quarter.
Arysta Collaborates with DuPont Arysta LifeScience is collaborating with DuPont Crop Protection to develop new foliar insecticides based on DuPonts Rynaxpyr. The long-term agreement between the two companies will allow Arysta LifeScience to combine Rynaxpyr insect control in premixes with acetamiprid. Combining Rynaxpyr with acetamiprid will help broaden the spectrum control of Rynaxpyr, fit with a broad range of crop segments, including row and specialty crops, offer flexible application timing and control pests that have become resistant to other products.
Agriculture Hall of Fame to Honor Bergman and Tilton Two farm leaders will be inducted into the North Dakota Agriculture Hall of Fame next month. Alan Bergman, who farms at Jud, was president of the North Dakota Farmers Union from 1986-to-1996. James Tilton, who lives in Fargo, is retired as an animal sciences professor at North Dakota State University. The induction ceremony will be held March 11 at the North Dakota Winter Show in Valley City.
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Source: Red River Farm Network