Category Archives: Agricultural Exports News

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Finding the Blue Sky in Agriculture

Byline:

It’s not reported much, but there is blue sky in agriculture, and we want to explore it.

But first, have you heard of this saying?

The brain is like Velcro for negative experiences, but Teflon for positive ones. Rick Hanson, a psychologist and author, writes about taking in the good. “People will work much harder to avoid losing $100 than they will work to gain the same amount of money.” He adds, “Painful experiences are much more memorable than pleasurable ones.”

Farmers are no different. They can tell you exactly what year they grew their farm’s worst crop, the lowest price they ever took for corn or soybeans, or where they were when the broker called and asked for more margin money for their futures trading account.

There is hope for farmers in Hanson’s message. 

Here’s how to “take in the good” in three simple steps.

  1. Look for good facts and then turn them into good experiences.
  2. Really enjoy the experience. Stay with it for 30 seconds without getting distracted.
  3. Intend and sense that the good experience is sinking into you.

We want to help you take in the blue sky for agriculture in 2017.

After sinking prices in nearly every grain and livestock market in 2016, economists see a return to higher ground.

“The heavy red ink for cattle operations could be behind us, and profits are projected to return to the hog market this spring,” says Lee Schulz, Iowa State University Extension economist. 

Some grain analysts and market watchers see record global demand as poised to dwindle record supplies and to offer opportunities for farmers to sell at profitable levels in mid-2017.

There’s more blue sky. Now may be the time to buy good, used equipment. The outlook for fertilizer prices and cash rent rates point in favor of savings for farmers.

- Mike McGinnis

lower Cash rents

Growers looking for some positive news on the cost side can take heart knowing that, on average at least, cash rents are going down along with the price of commodities. 

Agricultural land rents – both irrigated and non-irrigated – are projected to fall 6% year over year in 2016, according to the U.S. Department of Agriculture. The average value of cropland in the U.S. will fall about 1% to $4,090 an acre, the first decline in seven years, the agency reports. 

The downturn is a marked reversal from gains the past decade when cropland values doubled and cash rents jumped 71%. The falling cost of land – among the only decliners since many other inputs including seed and fertilizer stand fast or rise – likely will continue until crop prices begin to rise, says Jeff Voeks, a market adviser at Stewart Peterson Brokerage Solutions. 

“Cash rent prices will edge lower,” Voeks tells Successful Farming magazine. “To say they’ll fall is overstating it a bit, but I think they’ll continue to eke a little bit lower.” 

While rents are down year over year, corn prices have tumbled about 10% and wheat futures are off by about 20%. Soybean prices are up from last year, but only because they rebounded in the first half of 2016 on weather worries that never materialized. 

Lower rents will help out younger farmers, especially small stakeholders who are trying to expand their holdings or to get started in the industry, says Larry Glenn, an analyst at Prime Ag in Quinter, Kansas. While conventional wisdom would say that now isn’t a good time for a young farmer to jump into the industry, it’s possible that getting in now when rents are low could pay dividends in the future. 

Even large bank- and corporation-owned farms will likely be forced to reduce rents due to extremely low crop prices, though probably not as drastically as small farmer- or family-owned landholders, he says. 

“Big corporate farms are going to want to stay up as high as they can,” Glenn says. “I wouldn’t be surprised,” however, if larger banks or corporations that own farms make adjustments based on the price of grains and soybeans, he says. 

Cash rent prices probably will continue to fall into next year. To offset declining or stagnant crop prices, growers are reportedly saying they’re going to cut back on corn and bean planting, Voeks says. This will only work if they hold true to their word, he says. 

Still, it will take a while to work through the glut of several years’ worth of high yields, which could mean an extended period of low rental prices. 

“Downward pressures likely are being placed on rents,” says Gary D. Schnitkey, a professor in the department of agricultural and consumer economics at the University of Illinois. “Therefore, it is likely that average rents in 2017 will be lower than those for 2016.”

Now is the time in agriculture when farmers should be looking for opportunities, according to Michael Boehlje, Purdue University economist. 

- Tony Dreibus

cheaper iron

 Certainly one of the biggest silver linings in the storm clouds of a depressed farm economy has been the significant savings being offered on late-model, and low-hour machinery. 

Values on high-horsepower tractors, four-wheel drives, combines, self-propelled sprayers, and grain carts are one quarter to one third less than in 2012. 

“I’ve never seen opportunities to buy large machinery at such competitive prices as exist today,” says Jeremy Knuth of Heritage Power, a John Deere dealership out of Baldwin City, Kansas. 

“We are looking to move out built-up inventories, and we are willing to work hard to make a transaction work for an individual farmer’s situation,” Knuth says.

Another hallmark of this massive inventory of late-model machinery is that most of the equipment for sale carries unprecedented low hours. It is not uncommon to uncover a 2014 model year 300-plus-hp. tractor for sale with fewer than 500 hours. 

"Our C-O-P is near $3 with seed down $15 and fertility down $25 per acre." – Central Indiana Farmer

In a recent price comparison of tractors available on dealers’ lots, Successful Farming magazine identified 42 high-horsepower tractors of various makes with fewer than 400 hours. It is not unusual to find 3-year-old machines with only 150 hours. This same situation is well stated in Class 7 and larger combines, as well. 

The poster child of like-new large machinery is the grain cart. A search of John Deere’s dealer website, machinefinder.com, finds 252 large (1,000-plus-bushel) grain carts for sale that are 3 years old or younger. Even more amazing is the number of brand-new carts that are 2, 3, and even 4 years old still sitting on dealers’ lots. For a detailed analysis of large machinery price trends, refer to the December issue of Successful Farming magazine on pages 32-36.

There is another aspect that accentuates the unprecedented value of large and late-model machinery. Manufacturers have armed dealers with an array of financing plans to entice buyers. 

“Whether it’s a certified preowned (CPO) program or low- or no-interest financing, dealers are in a position to reward farmers for buying in ways not available before,” observes Nate Weinkauf of Case IH. These programs commonly inspect used equipment, often making necessary repairs and improvements before going on used lots. In addition, a dealer can extend warranty coverage of a used machine for up to three years.

While it’s not necessarily new, you will find it far easier to lease large and late-model machinery than in the past. 

“It’s a financing option that appeals to certain farmers who are trying to minimize debt,” points out Brad Tolbert of John Deere.

Though it may be stating the obvious, leasing large and late-model machinery is far more affordable than in the past because the base value of the leased machine is lower.

However, as Rick Vacha of Ritchie Brothers Auctioneers warns, don’t wait to pull the trigger on such good deals. “We are already seeing once-large inventories of such combines as the Deere S680 dry up, which is driving up their auction values,” he says. “I certainly expect the same to happen to high-horsepower tractors this winter.”

- Dave Mowitz

Input costs Vary 

Good news: Seed prices have remained fairly steady from 2016 going into 2017.

Bad news: That steadiness doesn’t match the dip in corn and soybean prices from last summer’s spike.  

“The price of some products has gone up; some have gone down. Overall, we are pretty flat from where we were in the past year,” says Jeff Hartz, director of marketing for Wyffels Hybrids. 

The decline in commodity prices has prompted farmers to economy-shop for seed.  

“We have started to see growers become more sensitive to the price of seed and trade down,” says Chuck Lee, head of seed product marketing for Syngenta Seeds. “They are choosing hybrids that have a lower number of traits. Within the same trait class, we have also seen a trend of growers moving into picking the lowest-priced hybrids.”

Cutting traits is a way to save money. Remember, though, that pests such as corn rootworm and European corn borer (ECB) still lurk. 

“Farmers have to be careful that they don’t get into a situation that can backfire,” says Hartz. “We saw some non-GMO fields in eastern Iowa that had an issue with corn borer. We saw that in 2015, too, when corn borer cost farmers 30 to 40 bushels per acre in yield.”

Fertilizer

More good news is that prices for nitrogen (N), phosphorus (P), and potassium (K) plunged to their lowest since 2007 two to three months ago, says David Asbridge, president and senior economist for NPK Fertilizer Advisory Services. 

“We have had way too much capacity across the board with N, P, and K, but they (manufacturers) are beginning to manage it somewhat,” he says. 

"We marketed 1/3 of our 2016 corn production above $4 per bushel." – SW Kansas Farmer

Asbridge says prices will likely remain steady through winter and start rising in March through the end of spring. This coincides with heavy fertilizer use during and shortly after planting. Prices will then drift lower before rising again (albeit at a lower level than in spring) in the fall.  

“At this point, because of overwhelming capacity, we don’t see any big price hike,” he says.

Except . . .

One factor that’s changing the N market is the opening of three large-scale N plants, the first to be built in the U.S. since the 1960s. Last year, CF Industries Holdings, Inc. opened a urea/urea ammonium nitrate (UAN)/anhydrous ammonia plant in Donaldsonville, Louisiana. This firm has expanded a new ammonia plant, followed by a urea synthesis and granulation plant at Port Neal near Sergeant Bluff, Iowa. It wasn’t open at press time but is expected to open any day. Iowa Fertilizer is also building a new anhydrous ammonia/urea/UAN plant in Wever, Iowa, expected to open in mid-February, says Asbridge. 

“If for whatever reason that Wever plant doesn’t open up in mid-February, there could be issues with procurement, particularly urea and also UAN,” he says. That’s why Asbridge is recommending to clients they lock in about 40% to 45% of anticipated urea and UAN needs soon. Anhydrous ammonia supplies should be adequate, he says. 

K and P

Industry overexpansion has throttled down the potash market, with about one half of the Canadian industry shut down, says Asbridge. This – along with a fall run on potash – helped perk up K prices a bit. 

However, the fall run will take some of the pressure off the spring market, he says. 

Mosaic, the biggest U.S. phosphate producer, is reversing its latest slowdown in production. 

Thus, Asbridge is recommending his clients to lock up one third of their phosphate and potash needs by the end of January. 

- Gil Gullickson

Subheading

We may be facing stiff winds, but opportunities fly through agriculture in 2017.

Farmer Up! at the 2017 Commodity Classic

Byline:

Don’t miss your opportunity to learn about the latest developments in agriculture by attending the 2017 Commodity Classic in San Antonio, Texas. On March 2-4, you can hear about the newest innovations and ideas from industry experts. 

The 22nd Annual Commodity Classic is the largest farmer-led, farmer-focused convention and trade show in the nation. Last year, nearly 10,000 people attended this show produced by the National Corn Growers Association, American Soybean Association, National Association of Wheat Growers, National Sorghum Producers, and the Association of Equipment Manufacturers.  

This year, the AG CONNECT Main Stage, sponsored by Successful Farming magazine, will feature industry icons such as consultant Jolene Brown; radio and TV hosts, the Hefty Brothers; and Marji Guyler-Alaniz, the founder of FarmHer. The Main Stage is open to all and will host sessions starting in the afternoon on Thursday, March 2, through noon on Saturday, March 4. (See schedule below.) 

commodity-classic
Always a popular draw, Brown, a farmer, author, professional speaker, and champion for people in agriculture, will share about blazing a trail through agriculture’s “jungle.” “Opportunities abound for agriculture once we realize the pace, the people, the process and the products have all changed. It’s time we discover today’s top influencers on our customers,” says Brown.

Successful Farming magazine editors will host multiple sessions, where you’ll get to hear the latest from Dave Mowitz, executive machinery and technology editor; Laurie Bedord, advanced technology editor; and Jessie Scott, digital content editor; and others. 

Scott will share stories of three farmer veterans, including the Grand Prize Winner of the magazine’s Fighter to Farmer Contest, sponsored by Successful Farming® and Grasshopper Mowers. The contest received more than 120 entries from farmer veterans who served in almost every war and conflict since World War II. In this session, you will also learn about the ways the Farmer Veteran Coalition supports farmer veterans. 

Ray Bohacz, the SF Engine Man, will be a speaker on the AG CONNECT Main Stage, too. He’ll cover what you need to know about diesel fuel and why you should make fluid analysis part of your program. “It is time that we paid as much attention to the machinery as we do other parts of our operation,” says Bohacz. 

Covering two sessions at the AG CONNECT Main Stage is Al Kluis, Successful Farming marketing columnist. Kluis will provide price targets and critical change-of-trend weeks for 2017. Kluis has been a commodity adviser and broker since 1976, and he serves as the president and managing partner of Kluis Commodities in Minnesota. 

Surround yourself with an engaging environment at the convention and trade show. 

For more information about the Farmer Up! 2017 Commodity Classic, visit commodityclassic.com

Farmland Values Continue to Slide Downward

Byline:

Midwest farmland values are in the longest and sharpest decline since the mid-1980s agricultural recession. Lenders and analysts expect the slide to continue a year or two. “This is consistent with stagnant corn and soybean futures prices and a potential rise in interest rates,” says Iowa State University’s Wendong Zhang in releasing a survey showing land values in Iowa are down by 17.5% in three years.

The Chicago Federal Reserve Bank says the value of good-quality farmland fell by 3% in the year ending last October 1, according to its survey of farm bankers, who expected a further decline this winter. In the Chicago Fed’s district, land values fell the furthest in Michigan, Iowa, and Illinois. The drop in land values during the third quarter of 2016 “marked the fourth straight quarter of year-over-year declines ... the first time for such a streak since 1986-1987,” it says.

In the Central and Southern Plains, farmland values are 6% lower than a year ago, says the Kansas City Fed, and the year-on-year decline in autumn 2016 was the sharpest since the mid-1980s. In a regional Fed survey, ag lenders say they expect farm income, land values, and loan repayment rates to fall in coming months. “If these expectations hold, the slow but steady increase in farm financial stress appears likely to continue,” says the Kansas City Fed.

While Farm Belt land values reacted almost immediately to the 2013 collapse of the ag boom, the national average has been slower to respond. U.S. cropland values peaked at $3,020 an acre in 2015 and declined marginally to $3,010 an acre last year, according to USDA.

This article was produced in collaboration with the Food & Environment Reporting Network, an independent, nonprofit news organization producing investigative reporting on food, agriculture, and environmental health.

FERNlogo

Top 10 Stories From 2016

Byline:

From an anti-regulation, anti-establishment President-elect to mega mergers to murder prompted by chemical drift, 2016 has been an unprecedented one for the ag community. Here are the top stories from this past year, compiled by the Successful Farming team.

1. President-Elect Trump

With promises of lower taxes and less regulation, President-elect Trump swept the farm states during the 45th presidential election. While his attacks on overregulation, including the Waters of the United States rule, are viewed favorably by most of the ag community, it’s less clear how his stance on trade, immigration, and ethanol will affect farmers.

The agriculture community is also waiting on another indicator of this administration’s farming policies: the pick for secretary of ag. Trump has named almost all of his cabinet picks besides the top position for the USDA, which will most likely be announced in the next few days.

2. Ag Mergers

2016 has been the year of the mergers for the ag industry.

On the chemical and seed side, the action started in February when ChemChina offered to buy Syngenta for a value of over $43 billion. This was on the heels of Dow and DuPont’s plan to merge in December 2015. The new firm with a combined market capitalization of approximately $130 billion will be known as DowDuPont. Meanwhile, Monsanto shareholders just approved a $66 billion merger with Bayer this month.

It’s important to note that negotiations for all of these deals are still occurring, and none has been finalized. For example, the European Commission announced in November that it will delay making a decision on ChemChina’s acquisition of Syngenta. U.S. regulators and regulators in other nations where these companies do business may also require divestures of businesses they deem to be anti-competitive. This will be a continuing story in 2017.

Equipment and technology companies have also seen their fair share of merger activity this past year.

The John Deere-Precision Planting merger hit a roadblock this year when the Department of Justice (DOJ) sued to stop the acquisition. Following this announcement, Deere entered into an agreement with Ag Leader, allowing the competitor to sell Precision Planting products. This prompted Dawn Equipment to put Precision Planting and Ag Leader on notice, defending Dawn’s hydraulic down-pressure technology. Continuing the drama, Kinze has sued to block access to internal documents requested by the DOJ to examine the proposed Deere-Precision Planting mashup. 

Other merger activity this year included Deere’s acquisition of Hagie Manufacturing and Kubota’s purchase of Great Plains.

3. Net Farm Income Drops 17%

A continued drop in commodity prices resulted in sharply lower net farm income for 2016. The USDA’s 2016 Farm Income Forecast Report showed that net farm income is down 17% to the lowest level since 2009.

4. Record Yields Lead to Large Inventories

U.S. producers harvested massive corn and soybean crops this year with average yields of 175.3 and 52.5 bushels per acre, respectively. With these large crops, world inventories for corn will rise to 222.3 million tons, up from 209, and the carryout for soybeans will soar past last year’s 77.3 million tons to 82.9. This increased output and the inventories globally will keep a lid on prices next year, says market adviser Chad Henderson.

5. Off-Target Dicamba Movement

Off-target movement of dicamba has damaged thousands of soybean acres in Missouri, Arkansas, and Tennessee during the 2016 growing season. (It also prompted an Arkansas shooting.) The damage is linked to Monsanto’s Roundup Ready 2 Xtend soybeans that tolerate dicamba. Monsanto released the Xtend varieties for planting in 2016 before there was approval of the herbicide component. In late 2016, the EPA approved Xtendimax with Vapor Grip Technology for use on Roundup Ready Xtend soybeans in 2017. BASF also had Engenia, a stand-alone dicamba herbicide, approved in late December for Roundup Ready 2 Xtend Crop System. These approvals will add additional tools available to farmers to manage weeds – but they’ll also require increased management. 

5. Hurricane Matthew Brings Devastating Damage to North Carolina Farms

When Hurricane Matthew hit North Carolina in October, it brought widespread loss to farmers. Crop farmers who had been unable to harvest crops before Matthew arrived were further delayed when rain drenched already saturated soils. In addition, up to 5 million poultry birds were killed as a result of the hurricane.

6. Commercial Approval for UAS

On August 29, the Part 107 rule for commercial use of small, unmanned aircraft (UAS) took effect. This long-awaited rule was a significant step forward for the industry. It outlines safety regulations that will pave the way toward fully integrating UAS into the nation’s airspace.

Part 107 is a great first step, Thomas Haun, executive vice president of PrecisionHawk says. “The new rule allows for a much broader access to drone technology that can be used by a wider audience. Up until now, you needed a special exemption from the FAA. With this new rule, as long as you meet a few pretty minimal requirements and operate safely, you can legally operate drones in agriculture. What I think you’re going to see is a movement from a few very select companies operating drones to a broad community of farmers having access to the technology.”

7. Pork Powerhouses Report Shows Glut of Pigs

Successful Farming’s annual Pork Powerhouses ranking showed that the largest 35 producers in the U.S. showed an increase of 123,000 sows from one year ago.

8. Slow Progress for Data Solutions

As an industry, agriculture is still wrestling with how to make farm data tangible. Many companies, like AGCO, John Deere, Farmers Edge, Farmobile, and Farmers Business Network, worked to push the industry forward in 2016. Yet, progress has been slow. As we look ahead to 2017, continued movement in this area will mean companies will have to come together to offer a seamless solution.

There is a plethora of FMIS point solutions that address a single, often tiny, aspect of an operation, notes Douglas Hackney, president of Enterprise Group, Ltd. “The resulting data is not integrated, and custom data integration solutions are required to build a meaningful, valuable, overall view of the data from these systems,” he says.

Data will continue to make headlines in the coming year. “Data visualization will continue to be a big theme, but what's exciting about that is that there will be more data to cross-analyze than ever before, revealing the hidden correlations between key performance factors, such as weather and seed variety, for example. And once these advantages are discovered, the market will all compete to be the most data-driven. Think moneyball, but for farming. We think this tipping point will come in 2017,” says Jason Tatge, Farmobile.

9. Young and Beginning Farmers Face Challenges

There were a number of concerns for young and beginning farmers in 2016, including access to land, weed control, and not enough help from USDA.

10. Record Number of Ag Tech Investments

Although investment dollars are projected to be down this year, the ag tech sector still saw a record number of investments.

“The number of deals grew 7% year-over-year, as we recorded 307 deals this half compared to 286 during the first half of 2015,” says Rob Leclerc, Ag Funder. “The number of investors coming into the sector climbed 52% from 280 in the first half of 2015 compared with 425 in the first half of 2016, which suggests that investors are getting more comfortable with the sector.”

Aaron Magenheim, Ag Tech Insight, says, “We saw investments trend more toward smaller and earlier stage investments without the expectation of every one being a billion dollar company but rather a profitable $100 million company that provides great solutions for farmers and is sustainable.”

Experts anticipate that funding will continue as this market matures. “Ultimately, it will be the innovations that emerge over the next five to 10 years that will make this sector more investable to investors,” says Leclerc.

Laurie Bedord, Gil Gullickson, and Kacey Birchmier contributed to this report.

Will La Niña Take on Winter Forecasts This Year?

Byline:

There’s a 55% chance that La Niña will stir up winter forecasts in the Midwest and Corn Belt this year, according to Illinois climatologist Dr. Jim Angel. 

For the upper part of the Midwest – meaning North Dakota, South Dakota, Minnesota, and Wisconsin – this means colder-than-normal air coming from Canada. 

“It’s not a slam dunk that we’re going to have a La Niña,” says Angel. “It’s actually a little bit of a question mark.”

For everywhere else, warmer temperatures and increased precipitation should be expected if the La Niña makes an appearance. Typically, active weather patterns are the norm, which means more snowfall but not necessarily bitter cold temperatures.

What Does This Mean For Growers?

Warmer winter temperatures decrease the likelihood of thoroughly freezing the soil, which has a few consequences:

  1. Unlikely winter kill
    “Pests and invasive species are more likely to survive in milder winters,” Angel says. “So this isn’t good news if you’re trying to freeze off over-wintering pests.”
  2. Less loose soil
    “We get a lot of freezing and thawing, which helps loosen up soils to break down compaction, which is another benefit we might lose out on,” says Angel.
  3. Fertilizer movement
    “The odds of fall-applied fertilizer staying in place are much lower with warmer winters,” Angel says. “Especially with warmer, wet winters, which is the worst combination.”

Conditions Coming Soon

As November continues, Angel is confident that temperatures will remain warmer than normal.

According to Kenny Miller of MDA Weather Services, freeze threats should be low for wheat because temperatures will stay warmer than average in the central Plains and Midwest. December will likely be wetter across the central and southern Plains, western Midwest, and the southeast.

“The wetter pattern across the central Plains would help improve moisture there for hard red wheat,” says Miller. 

The southeastern part of the U.S. is experiencing a fairly severe drought, though, which is important to note. Angel says that drought is knocking on his state of Illinois’ door as some southern Illinois counties are starting to struggle with dryness. 

“I wouldn’t be surprised if that starts to bleed into the southern part of the Corn Belt,” says Angel of the drought-like conditions. He predicts that Kentucky and southern parts of Illinois, Indiana, and Missouri may be affected short-term.

The Elephant In the Forecast

Even though Angel hesitates before using the words, he can’t deny that global warming has significantly increased the likelihood that winter temperatures will continue trending toward the warmer side. 

“That doesn’t mean that every winter is going to be warm, but it increases the odds of that happening,” Angel says. “That’s the underlying trend, but there are other factors in play, too.”

This comes on the heels of yesterday’s release of a global climate report by the World Meteorological Organization. The warmest five-year period on global records occurred from 2011 to 2015, which the organization attributes heavily to the rise of greenhouse gases.

Angel says that the chances of the Midwest experiencing another winter like 2014 is less likely to happen. “It’s hard to get those really cold winters anymore,” he says. 

Which of the New Diesel Engine Oils Do You Need?

Byline:

Earlier this year, the American Petroleum Institute (API) approved two new diesel engine oil standards, API Service Categories CK-4 and FA-4. These new categories resulted from several years of collaborating between engine manufacturers, oil marketers, and additive suppliers. When the categories launch on December 1, 2016, it will be the first time since 1994 that there will be two different diesel engine oil categories, says Kevin Ferrick of API.

The new engine oil standards have been developed to protect engines, meet new government regulations, and ensure engine oil performance, he adds. “The new service categories improve upon existing standards by providing enhanced protection against oil oxidation and protection against engine wear, particulate filter blocking, piston deposits, and degradation of low- and high-temperature properties,” Ferrick points out.

API CK-4 oils will replace current API CJ-4 engine oils and will be backward-compatible with current diesel vehicles and will feature improved shear stability, oxidation resistance, and aeration control, Ferrick explains. API CK-4 oils will have similar viscosity grades to current API CJ-4 oils. “They have been created to easily replace oils used with current engine technologies and will have a minimum high-temperature, high-shear (HTHS) viscosity,” he adds.

New API FA-4 oils will include lower viscosity grades to meet the needs of next-generation diesel engines built beginning in 2017, Ferrick explains. “They are intended to help increase fuel economy while providing strong engine protection. These oils will have limited backward compatibility because some older engines were not designed to operate with lower viscosity grades. API FA-4 oils were intentionally named FA-4 to prevent their confusion with CK-4 oils, but FA-4 oils have to provide the same level of protection except with a lower HTHS viscosity,” he details. “Engines designed to operate at the lower HTHS viscosity may see a fuel economy benefit compared with oils having higher HTHS viscosities.”

API has introduced a special Service Symbol Donut to help technicians and consumers easily identify the API FA-4 diesel engine oil and distinguish it from CK-4 oils. The new API FA-4 donut features a shaded section, and the API CK-4 Service Symbol Donut will look the same as the current CJ-4 Donut.

To find out if you need either the new CK-4 or FA-4 lubricants, check with your owner’s manual, your engine manufacturer, or go to DieselOilMatters.com.

Auction Action: Ultimate All-Terrain Truck

Byline:

Are you looking for the ultimate all-terrain truck capable of running across the wettest fields while still being able to roll down the highway? Then this 2013 Cossack 6×6-bed truck is what you are looking for.

The truck sold earlier this month for $265,533 ($350,000 Canadian dollars) at a Ritchie Bros. auction in Edmonton, Alberta, that lasted three days and featured 6,100 sale items.
To see that Cossack in action, go to https://www.rbauction.com/blog/video-cossack-6x6-cruises-around-edmonton-auction-yard. The bed truck runs with a 700-hp. Cummins model QSK19 diesel paired to a hydrostatic transmission that drives 36-inch tracks set on a 416-inch wheel base. Other features include a 9½×26-foot bed, 80-ton hydraulic winch, and 100,000-lb. planetraries.

For more information, go to rbauction.com.

 

Auction Action: Ultimate All-Terrain Truck

Byline:

Are you looking for the ultimate all-terrain truck capable of running across the wettest field while still being able to roll down the highway? Then this 2013 Cossack 6×6 bed truck is what you are looking for. The truck sold earlier this month for $265,533 ($350,000 Canadian dollars) at a Ritchie Bros. auction in Edmonton, Alberta, auction that lasted three days featuring 6,100 sale items.

To see that Cossack in action go to: https://www.rbauction.com/blog/video-cossack-6x6-cruises-around-edmonton-auction-yard.

The bed truck runs with a 700-hp. Cummins model QSK19 diesel paired to a hydrostatic transmission that drives 36-inch tracks set on a 416-inch wheelbase. Other features include a 9½×26-foot bed, 80-ton hydraulic winch, and 100,000-pound planetaries.
For more information, go to www.rbauction.com.

 

Tough Competition for CRP Contracts

Byline:

At the end of September, contracts for nearly 1.7 million acres of land enrolled in the CRP will expire. Getting land into the CRP is more competitive than ever with low commodity prices and fewer CRP acres available because of the 2014 Farm Bill CRP reduction of 8 million acres.

Of the expiring acres, 211,000 were accepted into the program again through CRP General Sign-Up 49, but the 500,000 expiring continuous acres will have to wait until October 1 to see what’s available. Around 900,000 of the expiring acres were rejected from reentering the CRP because the land no longer had a high enough environmental benefit index (EBI) score.

This year’s qualifying EBI score was 292, which is much higher than the 2013 qualifying EBI score that was closer to 220. Only 411,000 acres of the more than 1.85 million acres offered were accepted in CRP General Sign-Up 49 that ended in March. The state of South Dakota’s CRP acceptance rate was only .02%.

CRP16Chart
Val Dolcini, FSA administrator, has seen interest in continuous practices grow over the past five to six years. Programs that are geared toward a specific cause, like the State Acres for Wildlife Enhancement (SAFE) program and the wetlands initiatives, are becoming more popular among producers and landowners. Targeted acres have doubled in the past 10 years, according to the FSA. 

“I think over the last three to five years, you’ve seen landowners more sensitive to the pollinator piece, the habitat piece, and the specific food source piece,” says Kirk Weih of Hertz Farm Management in Mount Vernon, Iowa.

In 2007, there were 36.7 million acres in the CRP with only 3 million of those in the continuous program. Today, there are only 24 million CRP acres, and nearly 7 million of those are continuous program acres.


Landowners Looking to CRP

With cash rents declining, it isn’t a huge surprise that landowners are scrounging to stay profitable. One of the ways they are doing that is by trying to get land, even whole farms, into the CRP.

“It makes financial sense for some landowners to do that in light of lower grain prices and forecasts for cash rental rates to continue to decline,” says Randy Dickhut, Farmers National Company senior vice president. 

Weih estimates that roughly 5% to 10% of the landowners he’s in touch with are considering enrolling in CRP or have done so. 

Jason Tronbak, Millborn Seeds conservation specialist in Brookings, South Dakota, saw a spike in interest in the CRP when the program’s rental rates were raised in 2016. With commodity prices in a slump, interest was already high, but it was the perfect storm for throwing land into the profitable CRP.

"Landowners are willing to sign up everything they have if that’s more than what they can make in cash rent,” says Jason Tronbak. 

“Iowa has the biggest increase of demand, but there’s definitely been an increase in demand in every state,” says Tronbak. “For us, it has been a pretty significant increase in interest and purchases.”

Jon Peterson, a Farmers National Company real estate agent, can think of several Iowa landowners who have enrolled big tracks of ground in continuous CRP rather than renting to farmers this year. 

“Some of the continuous CRP rates offer $25 to $75 more than what the cash rent rate would be this year,” says Peterson, who recently enrolled 100 acres of his own Iowa farmland in CRP that was previously cash-rented ground. Peterson says landowners can make more on continuous CRP payments than cash rent on most lesser-quality farmland.

“Farmers who actually own the land are putting really marginal amounts in CRP, but the landowners are willing to sign up everything they have if that’s more than they can make in cash rent,” says Tronbak. 

A southern Minnesota farm manager has clients who are profiting more from buffer strip payments than they are from cash rents. However, he and his colleagues don’t encourage clients to put whole farms in the CRP.

Farmers Looking for Higher Returns

Jamie Diebal, Illinois FSA program specialist, has seen a lot of producers putting land into the CRP and not farming it. Although Illinois had an alarmingly low acreage acceptance rate during the CRP General Sign-Up 49, Diebal saw more offers than she’d seen in Illinois in the past.

“With CRP, farmers are guaranteed a rate for the life of their contract, which could be 10 to 15 years,” says Diebal. “It’s appealing for some producers to do that.”

According to Dolcini, the Conservation Reserve Enhancement Program (CREP), which is considered part of the continuous CRP, has also become quite popular over the years. CREP initiatives are partly funded by individual states and also by the federal government (there are currently 40 to 45 nationwide). Driven by local interest, CREP proposals are currently being prepared with states like Nebraska and Minnesota.

Diebal is hopeful that the one CREP opportunity in Illinois will be funded by the state’s budget again in November or December, because the program has not accepted any new acres since August 2015 due to a lack of state funding. The program can only accept 250,000 acres and has over 200,000 currently enrolled. 

“Over the years, the CRP has shown to be an effective way of providing an economic safety net for farmers and also a good way to preserve America’s landscape,” says Dolcini. 

This year, 101,000 acres were accepted into the grasslands CRP initiative. The program pays less in rent, but it benefits livestock producers who can use sections of the land at certain times to graze livestock and to cut feeding costs. 

Lots of Interest, High Demand for Seed Mixes 

An increased interest in the CRP has left the companies offering specialty seed mixes scrambling at times, according to Tronbak.

In the spring, the demand for the specific grasses and flowers some state programs require went up so quickly that a widespread shortage was experienced. Prices went up swiftly for seed used in specialty CRP plots.

However, farmer and landowner interest in the CRP is known to cycle with economic factors. When commodity prices were high in 2012, the FSA saw farmers looking to pull acres out of the program to make more money farming the land. When some saw the penalty cost, though, they reconsidered and ended up sticking with the program. According to the FSA, it is quite rare when a landowner or producer pulls acres out. 

The FSA is under pressure to dedicate more acres to the continuous program, but the incoming secretary of agriculture will likely be the one deciding to have another general sign-up or to bump up continuous acres in 2017. Until then, the FSA will stay choosy with the few CRP acres it has left to allot. 

Subheading

High cash rents and low commodity prices are driving producers and landowners to well-paying CRP ground.

Bayer Ups Its Offer for Monsanto

Byline:

Germany-based Bayer confirmed advanced negotiations with Monsanto concerning a proposed transaction, according to a company statement. Key terms and conditions have not yet been agreed, but Bayer would be prepared to provide a transaction consideration of $127.50 per Monsanto share only in connection with a negotiated transaction.

Bayer previously offered to pay $125 a share for Monsanto, up from $122 a share offered in May. There is no assurance that the parties will enter into an agreement, according to Bayer.
 
The proposed transaction would be subject to regulatory approval and other customary closing conditions. The key conditions of a definitive transaction agreement must be approved by the Supervisory Board of Bayer AG.

 

Subheading

Bayer confirms advanced negotiations with Monsanto.

USDA: Net Farm Income to Hit Lowest Since 2009

Byline:

Farm sector profitability is forecast to decline for the third straight year, according to the USDA’s latest forecast Tuesday.

Net cash farm income for 2016 is forecast at $94.1 billion, down 13.3% from the 2015 estimate. Net farm income is forecast to be $71.5 billion in 2016, down 11.5%. If realized, 2016 net farm income would be the lowest since 2009.

Cash receipts are forecast to fall $25.7 billion (6.8%) in 2016, led by an $18.7 billion (9.8%) drop in animal/animal product receipts and a $7.1 billion (3.7%) decline in crop receipts.

Nearly all major animal specialties — including dairy, meat animals, and poultry/eggs — are forecast to have lower receipts, as are feed crops and vegetables/melons, down $3.2 billion (5.5%) and $1.5 billion (7.5%), respectively.

While overall cash receipts are declining, receipts for several commodities are expected to increase by at least 1% above 2015 estimates, including cotton, up $0.6 billion (12.5%). Direct government farm program payments are projected to rise $2.7 billion (24.8%) to $13.5 billion in 2016, in part due to the expected price environment, according to the USDA’s Economic Research Service’s press release.

For the second year in a row, production expenses are down. Total production expenses are forecast down $10.1 billion (2.8%) over 2015, led by declines in farm-origin inputs (feed, livestock/poultry, seed) and fuel/oils.

Asset Values

Farm asset values are forecast to decline by 2.2% in 2016, and farm debt is forecast to decrease by 0.8%. Farm sector equity, the net measure of assets and debt, is forecast down by $61.2 billion (2.4%) in 2016. The decline in assets reflects a 1.5% drop in the value of farm real estate, as well as declines in animal/animal product inventories, financial assets, and machinery/vehicles.

The decline in farm debt is driven by lower nonreal estate debt (down 4.6%), reflecting a change in farmers’ management decisions (such as reducing input expenditures) but also an increase in short-term commercial bank loan rates, which make debt more expensive.

Median Income

The median income of farm households increased steadily over 2010-14, reaching an estimated $81,637 in 2014. After dipping in 2015 to $76,538, median household income is forecast to fall slightly in 2016 to an expected $76,282. Median farm income earned by farm households is estimated to be -$765 in 2015 and forecast to be -$1,353 in 2016. Most farm households earn all of their income from off-farm sources—median off-farm income is forecast to increase 2.5%, from $67,500 in 2015 to $69,159 in 2016. (Because farm and off-farm income are not distributed identically for every farm, median total income will generally not equal the sum of median off-farm and median farm income.)

 

Subheading

Farm debt seen declining

U.S. Ethanol Industry Finds Sweet Deals in Brazil as Sugar Prices Soar

Byline:

U.S. ethanol plants and traders are rushing to sell biofuel to Brazil as tightening supplies and logistics in the South American market give the world’s top producer a rare opportunity to ship south during the peak sugarcane harvest, sources said.

U.S. ethanol plants are pumping out a record 1 million barrels per day taking advantage of cheap and plentiful corn feedstock, pushing domestic prices to three-month lows.

But they are finding unexpected demand in rival Brazil, where production is falling short of expectations as skyrocketing sugar prices have spurred mills to crush more cane into sweetener rather than make ethanol.

That has opened an arbitrage window at an unusual time of the year, highlighting the diverging market conditions between the world’s two top ethanol producing nations.

“U.S. corn prices are cheap and the dollar has weakened creating a window of opportunity for ethanol shipments to Brazil’s Northeast,” said Tarcilo Rodrigues, the lead ethanol specialist at Bio Agencia brokerage and consultants.

Rodrigues said mills in the main center-south cane region, which is in the peak of harvesting, typically ship ethanol to the northeast, which is unable to produce sufficient biofuel for demand in the region.

But tank capacity at the main southern ports is currently occupied by diesel imports by the state-run oil company Petrobras, blocking intercoastal shipments of ethanol, he said.

Brazil’s northeast cane crushing season is still some weeks off from ramping up its own ethanol mills, which accounts for only 10% of Brazil's cane output, as the region winds down its interharvest period leaving biofuel supplies tight.

Raizen, the world’s largest sugar and ethanol producer, has booked 55 million liters (14.5 million gallons) of biofuel from U.S. origin to Brazil to set sail in late July to early August, according to three U.S. traders.

That amount alone is the highest for any July-August period since 2012, according to U.S. Department of Agriculture data.

Despite recent reductions in forecasts for ethanol production in Brazil due to soaring sugar prices, imports of the biofuel into the main center-south market are unlikely as most of the demand has already been met by mills in the region.

But the North/Northeast region, with a 3 billion-liter (790 million-gallon) annual demand, will only produce around 1 billion liters. BioAgencia is forecasting imports of U.S. ethanol to meet 500 million liters of that unmet demand. The rest should come from the center-south.

Raizen declined to comment when contacted by Reuters. The Furuholmen and Ardmore Chinook ships are waiting to unload ethanol for Raizen in the northeastern port of Itaqui, in Maranhao, according to the port’s website and shipping agents there.

Analysts expect regular shipments from the U.S. Gulf to Brazil’s Northeast to continue through early 2017.

For the beleaguered U.S. ethanol industry, the exports to Brazil have helped boost profits. Margins are at their highest since late 2014. Returns over operating costs are averaging 37¢ per gallon this month, Iowa State University data show.

In January, average margins were negative, leaving U.S. producers like Pacific Ethanol Inc. with hefty losses.

“Several years ago if you had suggested to a room full of ethanol producers, ‘we’re going to have $45 crude oil and you guys are going to still make money,’ you’d have found some doubters,” said Geoff Cooper, senior vice president at the Renewable Fuels Association. “These are decent margins.”

Ethanol futures in Chicago are trading around $1.41 per gallon, the lowest since March, and cash prices too have fallen, stirring demand from foreign buyers.

Meanwhile, sugar prices fresh off three-year highs are compelling Brazilian mills to favor production of the sweetener over ethanol, and dry weather since March has unexpectedly shrunk the size of Brazil’s cane crop.

Cane analyst Datagro shaved 3% off its May forecast for Brazil’s center-south ethanol output to 28 billion liters due to firm sugar prices and the shrinking cane crop, which it slashed by 4% to a forecast of 597 million tonnes.

Brazil sugar exports from January through July are flowing gangbusters through the ports. Raw sugar shipments reached a record 12.72 million tonnes over the first seven months, up 30% from last year and up 18% from the previous record for the period in 2010, Trade Ministry data showed.

“With sugar exports moving as fast as they are, we are going to have a complicated interharvest period ahead (January-March) finding ethanol for the domestic market,” lead sugar analyst at Archer Consulting, Arnoldo Correa said.

This story was written by Chris Prentice and Reese Ewing, and edited by Marguerita Choy for Reuters.

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FS4JK Disbands; Farm Safety Work Continues

Byline:

After three decades of service, the board of directors of Farm Safety For Just Kids (FS4JK) announced this week that the organization will be dissolved at the end of 2016. The group’s mission of education, research, and outreach on farm safety issues will continue through the Progressive Agriculture Foundation (PAF), an organization with a similar mission, based in Birmingham, Alabama.

“We are proud of the work we have done to promote farm safety for the youngest members of farm families,” says Farm Safety For Just Kids founder and president Marilyn Adams. “We believe this move will further the mission of keeping farms safe for youth. That was the goal 30 years ago, and that remains the goal today. We feel the organization has accomplished what we set out to do almost 30 years ago: To support farm safety education in the U.S. and around the world. I believe that this move will further the mission we all have worked hard to accomplish.”

According to the announcement, FS4JK will donate $5,000 to both the National 4-H Council and National FFA Organization in recognition of their advocacy of youth safety in agriculture, and it will donate its library of educational materials and the balance of its assets to PAF.

Management of FS4JK’s 2016 Outreach Program will also be transferred to PAF. The program consists of a team of coordinators who travel across the country conducting free farm safety presentations and demonstrations at county fairs, festivals, schools, safety days, 4-H and FFA meetings, and other gatherings.

Three Decades of Service

Adams founded FS4JK in 1988, a year after her 11-year-old son, Keith, suffocated in a gravity flow grain wagon. Read more about Adams’s story, and how her grief fueled her to form the group in order to help other families avoid unnecessary tragedies, in the Successful Farming article, Keeping Kids Safe

Over the years, Adams worked tirelessly to bring the message of farm safety to the masses, and she even convinced First Lady Barbara Bush to serve as the organization’s honorary chairperson. Adams retired from her position as FS4JK founding president in 2012 but remained on the board of directors and continued public speaking on a more limited basis.

Today, more than 110 FS4JK chapters serve 27 states and four Canadian provinces. Volunteers spend thousands of hours each year teaching children and families about farm safety, and millions of children have attended FS4JK day camps, programs, and seminars.

While even one child’s death or injury is too many, it is clear that progress is being made. In the period from 1998 (the year FS4JK was founded) to 2011, a USDA study showed the rate of childhood injuries for children living on farms decreased by 48%. From 1998 to 2009, the rate of injuries to farm youth fell from 16.6 to 6.8 per 1,000 farms.

Proud to Partner

Successful Farming magazine has been proud to partner with FS4JK over the years, making financial contributions to support the organization’s volunteer chapter network, and keeping readers informed about FS4JK and farm safety though numerous articles.

FS4JK and Successful Farming also partnered for two decades on the Farm Family Safety Incentive Grant, which provided the financial means for hundreds of families to make their farms a safer place and for rural communities to improve safety efforts. Recipients used the grants for items like equestrian and ATV helmets, safe play areas for kids, manure pit covers, ROPS for tractors, first aid kits, safer electrical systems, fire extinguishers, fencing for dangerous areas, filling abandoned wells, and more.

“Successful Farming has truly cherished our long-term relationship with Marilyn Adams and Farm Safety 4 Just Kids, led for many years by editor Cheryl Tevis,” says Dave Kurns, editorial content director for Successful Farming. “We are glad that the group’s work will live on because it truly is needed on the farm today and every day.”

Ask This Old House features special segment on Idaho potatoes

uipc

Ask This Old House, a popular home-improvement show on PBS, recently aired a six-minute segment exploring how Idaho potatoes are grown and thoroughly explaining how potatoes from Idaho differ from potatoes grown in other states.

Landscape contractor Roger Cook, a veteran of the show for over 30 years, traveled to Idaho Falls to meet fourth-generation potato farmer and Idaho Potato Commissioner James Hoff. With Hoff’s help, Cook showed millions of his loyal viewers how Idaho potatoes are harvested and stored and offered a few tips on growing potatoes in home gardens. 

“We continually look for new and different venues to tell the Idaho potato story to our target audience, which includes both men and women,” Frank Muir, president and chief executive officer of the Idaho Potato Commission, said in a press release. “James’s deep knowledge of and passion for Idaho potatoes, paired with Roger’s enthusiasm and curiosity, created a very informative and entertaining segment.”

The segment was filmed in October of 2015 during the end of the harvest season and aired the following spring.

The Produce News | Today’s Headlines – The Produce News – Covering fresh produce around the globe since 1897.

Local Farmers Market program helps retailer boost produce sales

Summer is peak produce season, and Associated Retail Operations banners — Macey’s, Lin’s, Dan’s, Dick’s Market and Fresh Market — are adding Utah love to the produce department with its Local Farmers Markets program, which launched July 1 and has been successful in increasing produce sales and guest count in each store

The in-store program includes signage highlighting Utah-grown produce and the farmers who supply them, as well as parking lot tent sales on Saturdays.

“Buying from Utah farmers and growers allows us to offer our guests the freshest produce at great prices, since it doesn’t have to travel as far,” Danni Barnhart, produce manager for Associated Retail Operations, said in a press release. “As locally owned retailers, it is important for us to support other local businesses, especially our farmers and growers. Our guests love that we offer a wide variety of Utah grown products.”

The Local Farmers Market program is made possible through a partnership between Associated Retail Operations and 33 Utah farmers and growers, including Bangerter Farms, Houwelings Tomatoes and Hartley’s Best Onions.

Each of the farmers is GAP certified or in the final stages of achieving the certification, which was set by the U.S. Department of Agriculture as part of the new food-safety regulations. The program aligns with industry trends that show local is the new organic according to consumer preferences.

The Produce News | Today’s Headlines – The Produce News – Covering fresh produce around the globe since 1897.

Roundup Ready 2 Xtend Soybeans Gain EU Import Approval

Byline:

If you’ve been waiting to plant the dicamba-tolerant Roundup Ready 2 Xtend soybeans with no worries about whether your elevator will take them, you’re much closer than ever.

This morning, Monsanto announced that the European Commission has granted import approval for Roundup Ready 2 Xtend soybeans. Company officials say this allows for import and food/feed use of Roundup Ready 2 Xtend soybeans into the European Union.

The European Commission’s approval follows Monsanto’s February announcement of Chinese import approval. With both the EU and Chinese import approvals and the U.S. EPA in the final stages of review for over-the-top use, Monsanto said in a press release it will have a full system launch in the U.S. in 2017. It anticipates it will be able to supply around 15 million U.S. soybean acres when the selling season arrives.

A full-system launch also is planned for Canadian soybean growers in 2017, given the previous Canadian regulatory approval for Roundup Xtend with VaporGrip Technology and XtendiMax herbicide with VaporGrip Technology.

Roundup Ready 2 Xtend is Monsanto’s newest soybean platform that includes tolerance to dicamba. This new dicamba-tolerant trait is stacked with the current Genuity Roundup Ready 2 Yield soybean trait technology.

Herbicide Approvals Still Needed

It’s important to note, though, that there are still no dicamba formulations registered for in-crop use Roundup Ready 2 Xtend Soybeans in the U.S. Besides the Monsanto Xtend and XtendiMax formulations, BASF also has a herbicide for this system called Engenia. All are designed to reduce the potential for off-target movement associated with older formulations of dicamba.

“The approvals for in-crop use of dicamba are in the late stages of review by the EPA and are tracking for a late summer, early fall approval,” said Miriam Paris, Monsanto U.S. soybean marketing manager in a press release.

 

Subheading

Monsanto plans full-scale launch in the U.S. in 2017.

U.S. Mushroom Council enters partnership with Cabot Creamery

The mushroom organization will cross-promote the company’s cheeses in its recipes, and vice versa.

The Mushroom Council expects a co-marketing partnership with Cabot Creamery Cooperative will build awareness of its Blend model, which promotes the use of finely diced mushrooms into proteins to improve health and flavor.

At the same time, the council will also promote Cabot’s cheese varieties including naturally-aged Cheddar, Muenster, Monterey Jack and more in bars, shreds, slices and spreads.

“We are excited to work with the Mushroom Council,” explains Cabot Creamery retail promotions and events manager Ian Ormon.

“It is great to be able to provide our consumers with new usage ideas like The Blend.”

The Council is equally pleased with the partnership.

“The Blend and Cabot’s cheese varieties add more flavor and nutrients to meals,” says Mushroom Council president Bart Minor.

“By cross marketing our products, we can reach new consumer groups that gain exposure to The Blend and many cheese varieties. It will help drive consumers to the dairy, meat and produce departments.

Retailers can use or modify Blend recipes for their meat, foodservice and deli departments, enabling consumers to enjoy  their favorite foods while reducing their intake of fats, sodium, cholesterol and calories, while adding a portion of produce.

To promote The Blend, the Mushroom Council will feature Cabot’s Portobello Alpine Beef Burger. A Grilled Cheesy Portobello Caps with Turkey Sage recipe will also be featured on the council’s consumer site, with links to Cabot’s website.

Cabot Creamery will include the Council’s Blended Lasagna Roll Ups recipe using Cabot Legacy Alpine Cheddar and a Cheeseburger Pizza using Cabot Vermont Sharp cheese on their website, with links to the council’s site.

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