Monday, March 6, 2017
Weekly News Highlights
Reporting Agriculture’s Business What a week! The Red River Farm Network just wrapped up coverage of Commodity Classic in San Antonio. It was a chaotic week for ethanol. That story is highlighted in this edition of FarmNetNews along with news on the farm bill and trade. Check out extended coverage of these issues on our #Classic17 Facebook LIVE coverage. The National Farmers Union annual meeting continues in San Diego. RRFN will also be making a stop at the CHS Ag Services Ag Industry Day in Grand Forks and the Winter Farm Show in Valley City. RRFN is also launching our need Weed Management 101 series. Follow the agriculture news stories that are important to you on your RRFN radio affiliate. You can also find us on Facebook and Twitter. The RRFN team, Carah, Mike, Randy, Jay and Don are also on Twitter.
Perdue Confirmation Expected Before Month’s End The Russell Group President Randy Russell, a veteran of several farm bills, thinks Sonny Perdue could be on board as agriculture secretary by the end of the month. Were very hopeful well see Governor Perdue get a hearing in front of the Senate Ag Committee maybe as early as the second week of March. Hopefully, hell be confirmed by the end of the month. It may take the rest of the calendar year to get the rest of the team in place, which is unfortunate, but a fact of life. Russell thinks the leaders of both agriculture committees will have a document to put before their committees to start markup of the farm bill very early next year. There is cautious optimism the farm bill could be passed by the fall of 2018. Russell says crop insurance will once again be in the crosshairs of budget cutters. Russell was part of the Bayer CropScience AgVocacy Forum in San Antonio.
Peterson’s Farm Bill Wish List The House Ag Committee held a conservation subcommittee hearing last week addressing the Conservation Reserve Program. Ranking Member Collin Peterson says the full committee is ready to get things done. Peterson has hope the Senate will move the same speed. Roberts is also very focused in moving ahead on the Farm Bill. Hes made statements he wants to get things done this year. I believe him, but I think the problem with the Senate is actually getting down and working on the bill, because of the way the Senate operates, all of the individual Senators weighing in and changing things for their own purposes. That becomes the problem. Peterson has previously stated hed like to see more CRP acres in the upcoming farm bill.
Conaway’s Farm Bill Feedback In 2018, House Ag Committee Chairman Mike Conaway thinks well have a better backdrop to support a safety net and keep producers in business. I am asking folks if they have requests for more money, who will we take it away from? The budget is flat. That will require swapping around from where it is currently at. I anticipate there will be hard decisions to make. I raised my hand and lobbied to get this job and I want to be the guy that helps make decisions. Conway says cotton has to get back into Title I. In addition, ARC and PLC could be tweaked. The Texas congressman was featured in Friday’s general session at Commodity Classic.
Agriculture Has Already Provided Budget Savings With a $20 trillion dollar deficit and a directive to invest in more Defense spending, all other agencies will be asked to make cuts. National Corn Growers Association senior public policy director Sam Willett says this scenario will influence the Farm Bill debate. “The fact is the agriculture committees delivered on significant savings not only on this bill, but the one in 2008. We need to remind our members of Congress that agriculture sacrificed.” When considering the next farm bill, Willett expects certain provisions will be tweaked. That includes the ARC-County program.
The Farm Bill Continuation University of Missouri Food and Agricultural Policy Research Institute Director Pat Westhoff expects a 2018 Farm Bill to largely be a continuation of the current Farm Bill. Much like what they have. I would be shocked if the agriculture community voluntarily gave up on crop insurance. Westhoff does expect changed in the dairy and cotton programs, but the biggest challenge is getting congressional support. Theres not that many ag representing districts in this country. How do you get non-ag interests on your side?
Lots of Work To Do Minnesota Association of Wheat Growers First Vice President Jay Nord says theres lots of work to be done to get a Farm Bill completed on time. Overall, only minor changes are expected with the farm program. I think theres been discussions on the ARC-County payment problems and wed like some improvements and then, maybe more CRP acres, especially in Minnesota with the buffer thing. Nord admits funding will be the big issue in the farm bill debate.
Wheat Needs to be at the Table In an interview with the Red River Farm Network, Montana farmer and former president of the National Association of Wheat Growers, Gordon Stoner, said wheat needs to be at the table during the Farm Bill debate. Its concerning. This winter, we see winter wheat planting is the lowest in 108 years. In 1985, we planted about 85 million acres, today about 50 million. We are really looking at the Farm Bill to address some of the issues. NAWG is looking to the Farm Bill for additional research funding. That comes at a time when the Trump Administration is proposing significant budget cuts. “The USDA budget, if you take nutrition out, wouldnt even be a down payment in the increase in funding for defense that president Trump is proposing. I havent seen those details, but when it comes to Congress and the presidential budget, Congress kind of goes their own way. Weve been educating Congress about the importance of ag and the economy. Stoner is also looking at international markets as an important avenue in enhancing profitability in the wheat business.
POTUS Deals With WOTUS The controversial Waters of the United States is on the way out. President Donald Trump has signed an executive order directing the EPA and the Army Corps of Engineers to conduct a formal review of the WOTUS rule. This begins the process of repealing the WOTUS regulation. Trump invited North Dakota Senator Heidi Heitkamp to the Oval Office for the signing of the executive order. Heitkamp said she will continue to push Congress to pass legislation to undo WOTUS. A law of that kind would immediately repeal WOTUS, while the executive order needs to go through the rulemaking process.
Something That Makes Sense President Trump signed an executive order to rescind the Obama Administrations Waters of The U.S. Rule Tuesday. North Dakota Senator John Hoeven says the Presidents executive order starts the removal of the rule. WOTUS is a burdensome rule for our farmers, ranchers, small businesses and energy industry. We work hard through the appropriations process to actually stop the rule. Now the presidents action is important because it works to permanently rescind the rule and actually come up with something that makes sense.
WOTUS Reaction Many agriculture groups and lawmakers are applauding President Trumps executive order rescinding the Waters of The U.S. rule. North Dakota Stockmens Association President Warren Zenker calls the executive order a victory for farmers and ranchers. North Dakota Soybean Growers Association Vice President Ryan Richard says water issues are critically important. The president gave an executive order on WOTUS. Were trying to follow that and put together what wed like to see happen to make the farm better production-wise.
The Key to Profitability When it comes to profitability on the farm, Wells Fargo Chief Agricultural Economist Michael Swanson says its about a good marketing plan and a great yield. Swanson also says the land market is still broken. The land market is not fair. Bad ground gets rented out for almost as much as good ground because there is no discipline. Thats not the landlords problem. The biggest place to make your money is to say no to bad ground. It hasnt changed in the last two years. Its still on farmers to say no to bad ground.
Farm Economy Adjusts Lower Farm income has declined for four straight years. Federal Reserve Bank of Kansas City assistant vice president and regional economist Nate Kauffman spoke at the Bayer media event Tuesday, highlighting the economic challenges in agriculture. “Farm income from its peak in 2013 has projected to decline by 50 percent. You’re going from 2013 historic highs to where we are in 2017 and there is mounting financial pressure.” To provide some perspective, Kauffman said the current farm economy is similar to what was seen in 2002. “In a historical context, it’s not at a level that would be so low that it would be compared to the depths seen in the 1980s.”
Restructuring Debt With the downturn in the agriculture economy, farmers are burning through working capital. According to Purdue extension economist Jim Mintert, proactive farmers will be working closely with their lenders. There may be a need to restructure debt. During the upturn in agriculture, sometimes we acquired assets with relatively short loan terms. Those assets can be refinanced and payments stretched out over time to make sure you can get through these next two to three years. We think, over time, were going to pull cost of production back towards market price levels so when we get to 2019 and 2020, we should be back on a more favorable operating environment. To take advantage of that, you have to get through these next few years. There are farmers who remain well positioned. Mintert says there will be opportunities available to expand and acquire land. Be choosy about your opportunities, but be open-mided, too.
Farm Financial Stress Any delay in processing loan applications will add to an already stressful time for some farmers. Monica McConkey, a licensed professional counselor with Prairie St. Johns in Fargo, is seeing increased volume of patients. “Spring planting is just around the corner so I’m sure there is a lot of anxiety that comes with that. There are some important factors to recognize in friends, family members and neighbors to pinpoint potential problems.” McConkey has some tips on how we can all identify signs of stress. “If someone is isolating; experiencing weight gain or weight loss or going days without sleeping, any change from baseline functioning should be keyed in on.” Professional help is available if needed.
Dinneen Responds to Biofuels Controversy There was a lot of hallway talk and finger pointing taking place at Commodity Classic. It started when rumors surfaced the Trump Administration was considering an executive order which would impact the Renewable Fuels Standard. The RFS would reportedly continue, but the point of obligation would shift from refiners to fuel blenders. In return, the White House would also approve the year-round use of E15. Renewable Fuels Association President Bob Dinneen, who was at the heart of this story, told the Red River Farm Network his organization is focused on expanding the market opportunity for ethanol. There are concerns the compliance mechanism would be unworkable or damage the ethanol industry. “If, and only if, those two concerns can be addressed, we’d be okay with moving the point of obligation,” said Dinneen. “If we can secure additional opportunities of ethanol, which means additional corn grind, it would be malpractice of the industry not to pursue those opportunities.” The biofuels organization called Fueling America is upset with RFAs role in this possible change in energy policy and cut all times with the Renewable Fuels Association. “Division in the industry is never a good thing and I’m discouraged that some in the industry have tried to create a wedge in the industry before trying to figure out is going on. That has not yet occurred, but it will. It has been a crazy week.”
Market Hates Uncertainty Rumors surfaced Tuesday that the Trump administration would issue an executive order regarding its renewable fuels policy. That rally fell apart once the White House denied a change in the biofuel requirements. AgResource Company President Dan Basse says the market generally does not like uncertainty. “We hate uncertainty so whenever we get it, particularly, from a political standpoint, we just trade back-and-forth.” Beyond politics, Basse says the trade is focused on the March supply/demand report and the prospective plantings report. In 2016, above-trendline yields were seen, but that cant happen every year. “We’ve now had three years in a row of record soybean yields. In my database, going back to 1900, I’ve never found four.”
Keeping Wheat Viable Wheat growers meeting at the Commodity Classic were buzzing with interest on crop selection for the year ahead. With lower wheat acres predicted, North Dakota Grain Growers President John Weinand says its important for the wheat industry to stay viable. Its been challenging, but I think theres optimism. The National Wheat Foundation, an arm of NAWG, has been working on a National Wheat Yield Contest, a new thing this year. Thats drawing interest back on wheat. Price is the biggest factor hurting us, but everyones in that game at the moment. Weinand thinks increasing technology and working to improve business can help boost yield. Weinand has winter wheat right now and shares an update on the crop. What was exposed in the last week or two, which is uncommon for us in February, was totally green. So far, we dont know how this goes moving forward. Wheat isnt too susceptible until it gets quite a bit bigger than it is now. Theres a low number of winter wheat acres, which is a concern yet. Weinand finished fourth place in the National Wheat Yield Contest in the dryland winter wheat category.
ND Farmer Recognized Nationally for Wheat Yields A Washburn, North Dakota farmer is the national yield winner in the dryland spring wheat category. Kent Pfaff had a yield of 104.3 bushels per acre with 14 percent protein. “We did the soil tests; we analyzed the data; we used variable rate technology and fertilized according to the soil test and we were able to come up with a formula that produced these high yields.” Wheat acres are down, but Pfaff says it can be a profitable crop. “Wheat has been on the backburner, but it can make you some money if you manage it intensively, like we did.” Pfaff planted a CROPLAN variety, 3530. The national wheat yield awards were presented last night.
Weed of the Week Winter annual weeds emerge in fall and develop basal rosettes that manage to survive our winters before resuming growth in late winter and early spring. Winter annuals are most commonly found in undisturbed soils or in no-tillage fields. Our most common winter annual weeds are field pennycress, shepherds purse, tansy mustard, and horseweed. Horseweed or marestail has either a winter or summer annual life cycle. The goal is a weed management program to control horseweed before planting. Soybean planted before mid-May will require a PRE herbicide for summer annual biotypes. POST herbicides are limited in their effectiveness. Herbicide mixtures should include 2,4-D ester in corn and soybean and be applied before horseweed is four-to-six inches tall. Thanks to Tom Peters of North Dakota State University/University of Minnesota and Richard Zollinger of NDSU for assisting with this project.
Bills Move Through Minnesota Legislature This past week, the Minnesota House Agriculture Finance Committee heard several bills dealing with the battle against Palmer amaranth and other weeds. All of those bills were held over and will likely be included in the committees omnibus finance bill. The House and Senate environment committees passed legislation to modify the environmental permitting process and eliminate the Environmental Quality Board.
Property Tax Reform-Work in Progress Minnesota State Senator Paul Utke told the KKCQ Farm Forum Saturday that property tax reform is a work in progress. We need property tax reform. On the ag side, it usually goes hand-in-hand with our commercial property tax. Its something that needs attention. Weve been looking at lots of ag bills, including one that looks at the homestead credit for beginning farmers.
Kiel Meets with Farmers at Fosston Event Minnesota State Representative Deb Kiel says health care is a concern, but, tax reform is a priority. Things like the school tax break for farmers to reduce property taxes. That would be one the items well look at. I expect to see that come through. We also have to focus on transportation issues, having enough money to keep roads and bridges maintained so farmers can get their crop to market.
Budget Surplus Grows The State of Minnesota is now projecting a budget surplus of $1.65 billion. That forecast is $250 million more than the previous forecast. Minnesota lawmakers will now use this figure as it works on their two-year budget. Governor Mark Dayton credits the surplus to the states strong and growing economy.
ND Revenue Forecast to be Released This Week In Bismarck, all eyes are on the new state revenue forecast, which will be released on Thursday. Meanwhile, the House Appropriations Committee will hear the funding bill for North Dakota State University agriculture research and extension. The Senate bill cuts spending by 13.5 percent from the current biennium. The hearing in the House will be held Tuesday afternoon. On Friday, the North Dakota Senate Agriculture Committee will hear a bill dealing with subsurface drainage and water management.
Using Data on Your Farm Commodity Classic is known for bringing new ideas to growers. This year, Farmers Edge launched a stronger farm management platform called Farm Command. Global Head of Sales and Operations Mike DiPaola says this the platform allows growers to make better decisions and help them understand their yield. It gives you a full dashboard to manage your imagery, soil, weather and fleet management. We have a crop stage model monitor, nitrogen management, things like that. It gives you power at your fingertips to understand what youre doing on your farm and how to do it better. Farmers Edge Regional Sales Manager Jon Labine says data is the buzzword at Commodity Classic. Growers have been told to save this data for so many years. Were finally at the stage where we will use the data to make big decisions on the farm, better financial decisions, to get a better ROI.
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Source: Red River Farm Network