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Advice for Expansion-Minded Cattle Producers

Finally, last month it happened: The beef cow herd expanded. The January 1 USDA cattle inventory report says cow numbers were up by 2% from the year before, to 29.7 million head. It breaks a streak that saw ranchers liquidate 4 million cows since 2006, mostly due to withering drought in the Plains and expensive feed.

A break in the drought and phenomenal calf prices turned the tide. The chase for limited feeder calves has grown so competitive that 550-pound steers straight off the ranch approached $3 a pound. Average profits are $550 per calf sold, according to CattleFax.

Texas, the leading cow-calf state with 4.2 million pairs, added 7% last year. Beef industry leaders, anxious to regain market share from pork and poultry, had plenty of advice for expansion-minded ranchers at the recent National Cattle Convention.

Squeeze tighter. Grazing land is in short supply, but you can make existing pastures work harder, says Texas A&M cattle specialist Ted McCollum. In research, they put GPS trackers on cows. They grazed only 39% of the pasture, mostly close to water. You can expand their range and stocking density by moving water and mineral sources, clearing brush, and cross-fencing into smaller paddocks, McCollum says. 

Confine in feedlots. Rabobank market analyst Don Close suggests adding cows in a confined or semi-confined system. Many feedlots are at only 60% of capacity, so pens and feed equipment are available. Confined cows could also work on landlocked Corn Belt crop farms, using underutilized farmstead facilities. It could add a revenue stream and value to homegrown feed, opening a door to a new generation on the farm.

Invest smart. Don’t think wild cattle prices will last forever. Over the past 25 years, a bred heifer has been worth 1.5 times the sales value of her calf, says CattleFax CEO Randy Blach. That’s $2,300 to $2,600, not the $3,500 of some sales. “Expand, but be smart and do your homework,” he says.

Celebrate 2015 National Ag Day!

March 18, 2015 is the 42nd anniversary of National Ag Day, celebrating agriculture and all those who feed our world, care for crops and livestock, and bring awareness to agricultural production.

The National Ag Day program aims to encourage Americans to:

• Understand how food and fiber products are produced.

• Value the essential role agriculture plays in providing safe, abundant, and affordable products.

• Appreciate the essential role of agriculture in maintaining a strong economy.

The Agriculture Council of America will bring more than 100 college students to Washington, D.C., to deliver the message of National Ag Day to the Hill. 

Producers, agricultural associations, corporations, students, and government organizations also are invited to participate. 

An Ag Day Planning Guide is available to streamline efforts at the local level. Events in local communities may include:

  • Ag Day breakfast
  • Library display
  • Field trip to a local farm
  • Farmer’s market display or demonstration
  • Mall exhibit
  • Pizza party
  • Adopt-a-Legislator
  • Adopt-a-Classroom

Here’s What You Can Do Today

To order your National Ag Day Poster, visit agday.org/store/index.php

You can download a social media kit, Ag Day logos, radio PSAs, and letters to the editor at agday.org.

Also at the site, you’ll find online materials for classroom teachers to use to recognize National Agriculture Week, along with many helpful ag-related websites for kids. Or, call 913/491-1895.


See more: About the 2015 National Ag Day Poster Contest Winner

Nat’l Ag Day Poster Winner: Sustaining Ag’s Future

Classrooms and communities are encouraged to participate in activities showcasing ag.

Clint Walker knew from a young age that he could express his ideas and interests more effectively with a simple drawing than by filling a page full of words. 

“I’ve been interested in art my whole life,” he says. “I used to draw dinosaurs all the time in elementary school, and I haven’t stopped drawing since,” he says. 

Today, his years of practice have paid dividends. Walker, a senior at the Kansas City Art Institute, is the winner of the third annual National Ag Day Poster Art Contest. His entry, created with ink line work and digital coloring, is a cornucopia spilling forth a bountiful harvest. It surrounds the earth to signify the feeding and sustaining of future generations, and it conveys the theme for this year’s National Agriculture Week, March 15-21: Agriculture: Sustaining Future Generations. 

“I usually do a lot of thumbnails first, and this one was one of the first ones I came up with,” Walker says. “It seemed to sell the message of agriculture helping to sustain our world.”

The first round of judging was conducted by a nine-member jury consisting of agribusiness leaders and art enthusiasts who have ties to agriculture.  The winner was chosen via online voting. 

Walker, who lives in Liberty, Missouri, will receive a $1,000 scholarship from Meredith Agrimedia. His original art will be displayed at the National Ag Day event in Washington, D.C.

National Ag Day is sponsored by the Agriculture Council of America.

The celebration kicks off on the afternoon of March 17 with “Farm to Fork Politics: Unleashing Innovation in Agriculture,” a panel discussion sponsored by Agri-Pulse at the Hart Senate Building. It’s followed by a reception.

On March 18, ag broadcaster Orion Samuelson will emcee a mix-and-mingle luncheon. Featured guests are the Outstanding Young Farmer honorees as well as members of Congress.

The Celebration of Agriculture Dinner that evening will showcase the winners of the Ag Day essay, video essay, and poster contest, as well as the Charles Eastin Outstanding Service Award for an advocate promoting better communications between farm and urban areas.


Des Moines Water Works Will Go to Court

Two months ago, the Des Moines Water Works gave 60 days' notice to 10 drainage districts in three northern Iowa counties that it intended to go to court over high levels of nitrates entering the city’s main water supply, the Raccoon River. Tuesday, the utility’s board of trustees voted unanimously to sue, with papers likely to be filed this Friday in federal court.

In those intervening 60 days, representatives of the Water Works met with state and local officials to see if a way could be found to avoid the lawsuit and meet some of the board’s concerns, its chairman, Graham Gillette told those gathered at the meeting.

Gillette said they met with Governor Terry Branstad’s staff, the head of the Department of Natural Resources (DNR), the agriculture secretary, the attorney general, state legislators. and county officials in the three counties where the drainage districts are located — Buena Vista, Calhoun, and Sac.

“We presented our case, if you will, and allowed an opportunity to ask questions,” Gillette said. The Water Works did seek more collaboration if it involved taking steps beyond the state’s current voluntary nutrient-reduction strategy, he said.

Later, after the vote, Gillette said one thing the water works sought was “regular monitoring and testing of the waterways that allows us to pinpoint the hot spots. I think that’s a great starting point.”

Gillette said he hoped for collaboration but “unfortunately, we did not find that common ground.” 

“Frankly, they did not acknowledge the significant threats faced by those we serve in any way,” Gillette said. 

After hearing public comments, all supportive of the lawsuit, the board went into closed session then returned to an open meeting to approve $250,000 for legal expenses, authorizing Water Works CEO Bill Stowe to request more as needed.

“We’ve actually received a few small checks in the $40 to $50 range to offset our legal expenses. We’ve been contacted by others. Those who are interested in doing so will be able to make such contributions to offset our Des Moines Water Works legal expenses,” Gillette said.

After the vote, Stowe said “this case is bigger than three counties and 10 drainage districts. They just happen to be the ones that we have intensive data on and believe we can make the case that they are groundwater dischargers into the waters of the U.S. that are amenable to lawsuit under both federal and state laws.”

If the Water Works succeeds in seeking remedy from those 10, “they may take action against other districts.”

“This case is bigger than three counties and 10 drainage districts,” Stowe said.

Stowe said the water works seeks two remedies. One is to hold the drainage districts accountable for the pollutants being discharged into the Raccoon River, probably through a permitting process under the Clean Water Act. In some states, the EPA issues permits; in Iowa, it’s the DNR under EPA authority.

Stowe said the water works is also seeking monetary damages. “We believe we have significant monetary loss to our customers that we’ve already incurred.”

The waters works has spent $400,000 from early December of last year to Tuesday to remove nitrates from river water to get the level below the 10 parts per million required to meet safe drinking water standards. The removal system was turned off Tuesday, Stowe said. The water works may also be facing a cost of about $150 million to replace its aging nitrate-removal system, believed to be the largest in the U.S.

Drake University agricultural law authority Neil Hamilton told Agriculture.com Tuesday that the lawsuit will be precedent setting and potentially affects about a fourth of Iowa’s land that is tiled, when that tile runs into drainage ditches controlled by a drainage district.

The lawsuit seeks to have drainage tile treated as groundwater and a point source of pollution. It doesn’t affect nonpoint surface water or discharges from large concentrated animal feeding operations (CAFOs), which are already regulated under Clean Water Act permits. It doesn’t even affect all drainage tile.

“If you were just running your tile outlet into the Raccoon River, that’s not what’s involved here,” Hamilton said.

That won’t be much comfort to the 10 drainage districts soon to be dragged into court, however.

Colin McCullough, Sac County drainage district attorney, told Agriculture.com Tuesday that the issue of paying for the drainage district's legal defense hasn’t yet been resolved and would likely be paid by all 83 of the county’s drainage districts “because we all sink or swim together.”

“If they are successful in their litigation, it will affect every drainage district between here and New Orleans,” he said.

When asked if he thinks the litigation could last a decade, as Iowa Agriculture Secretary Bill Northey has said, he replied, “I agree with Bill.”

McCullough doesn’t believe drainage districts can be sued for damages, a legal position taken by the Iowa Supreme Court in several cases, he said.

Drainage districts are recognized in the state’s constitution and supported by state law. 

“That’s why we feel confident that what the Des Moines Water Works is up to is not founded on good law," he said.

“I think when the wheat is separated from the chaff, you’ll be able to see that the position of drainage districts is tenable, supportable, and winnable,” he said.

Stowe said he disagreed that drainage districts can’t be sued for damages, “but we’ll leave that, obviously, for the courts.”

To Iowa farmers, Stowe said that a number of farmers have done a great deal to reduce water pollution, but to those who haven’t, “we have every interest in allowing them to continue to contribute to the state and to contribute to their own self-interest but believe that accountability for the environmental impacts of those businesses has to be reconciled with downstream water users like us or those in the Mississippi Valley generally.” 

Meanwhile, voluntary efforts to clean Iowa’s water haven’t stopped. 

This week, Agriculture’s Clean Water Alliance, a group of 12 ag retailers and partners that includes the Iowa Soybean Association, announced a $713,000 demonstration project in the Elk Run Watershed in Sac, Calhoun, and Carroll counties.

ACWA has been sampling and testing water in the Raccoon River for 15 years, said Harry Ahrenholtz, the group’s chairman.

The watershed seems like an ideal location to improve water quality, he said, with an average nitrate level of 19.8 milligrams per liter (or parts per million), which is the second-highest of 64 sites. It’s 4 miles wide and 9 miles long, encompassing about 24,000 acres.

The state of Iowa is providing $354,000 in cost-sharing over three years, and the rest will come from farmers and project partners. Ahrenholtz said the project will try out both in-field and edge-of-field practices to see what’s the most effective. They’ll include no-till and reduced tillage, cover crops, bioreactors, saturated buffers, nitrification inhibitors, and drainage-water management. 

Ahrenholtz said the project has been concerned about the effect of the lawsuit.

“Any time you put a target on somebody, how willing are they to open up and participate and be transparent?” he asked. “I think we can overcome that, but, yes, that’s a concern we’ve got.”

Besides the Soybean Association, other partners in the project include the Iowa Farm Bureau Federation, Iowa Soybean Association, Iowa Corn Growers Association, Iowa Pork Producers Association, Iowa Cattlemen’s Association, Iowa Agriculture Water Alliance, Crop Production Services, Farmers Cooperative Company, West Central Cooperative, Iowa State University Extension, USDA-Natural Resource Conservation Service, Sac Soil and Water Conservation District, Carroll Soil and Water Conservation District, Calhoun Soil and Water Conservation District, and Practical Farmers of Iowa.

After the water works vote to sue, several of those groups issued a statement saying they are “unified in opposition” to the lawsuit.

“Nitrate levels in Iowa rivers are complex, fluctuating with weather and soil fertility but not significantly affected by fertilizer application rates or management. Our weather and nutrient-rich soils, which are ideal for growing plants, dominantly influence what happens in Iowa’s waters, said the group.

“Merely enacting regulation will do nothing to improve water quality. We will remain focused on empowering farmers and landowners to select and use scientifically proven practices that can have a real impact on water quality, which benefits all Iowans.”

The joint statement was issued by the Agribusiness Association of Iowa, Agriculture’s Clean Water Alliance, Iowa Agriculture Water Alliance, Iowa Cattlemen’s Association, Iowa Corn Growers Association, Iowa Farm Bureau Federation, Iowa Pork Producers Association, Iowa Poultry Association, Iowa Soybean Association, Iowa State Dairy Association, and the Iowa Turkey Federation.

The Des Moines Water Works board heard a different message from the public that attended the meeting. Kerry Bowen, a member of Iowa Citizens for Community Improvement, gave the board a box of petitions in support of the lawsuit that had been signed by 859 urban and rural Iowans.

David Hance, a retired Des Moines attorney whose parents farmed near Creston, Iowa, told Agriculture.com that the Raccoon River Watershed Association has worked with landowners to clean the watershed on a voluntary basis.

“We’ve been doing this for 15 years, and this is not something new for the watershed. It has not worked,” said Hance, who supports the lawsuit.  






First Look: Tuesday’s WASDE Report

Today's World Agricultural Supply and Demand Estimates (WASDE) aren't expected to draw much attention today. Some estimates are unchanged while big decreases are offset other numbers bumping up.

Quick overview of today's report:

Corn

U.S. ending stocks are projected at 50 million bushels lower, with corn exports landing 50 million bushels higher. According the Grain Crushings and Co-Products Production report, corn use in ethanol production is lowered 50 million bushels. However, that is offset by an increase in 50 million bushels for projected feed and residual use.

The report says, "The season-average farm price for corn is projected at $3.50 to $3.90 per bushel, up 5 cents at the midpoint."

Soybeans

U.S. soybeans supply and use projections are unchanged this month. Ending stocks are holding strong at an 8-year high of 385 million bushels. 

"The U.S. season-average soybean price range for 2014/15 is projected at $9.45 to $10.95 per bushel; soybean meal and soybean oil prices are projected at $350 to $390 per short ton and 30 to 34 cents per pound, respectively," says the report.

Wheat

Projected U.S. ending stocks for 2014-2015 have been reduced 1 million bushels due to increased seed use based on the 2015 planted acres projection. 


See the full WASDE here

USDA: Corn Stocks Tighten

DES MOINES, Iowa (Agriculture.com)—The U.S. corn stocks will keep getting tighter, heading towards the end of the marketing year, according to the USDA.

As a result, the CME Group corn market traded higher most of the session, but ended lower.

At the close, the May corn futures finished 3/4 of a cent lower at $3.88 per bushel. Dec. corn futures closed 1/2 of a cent lower at $4.12.
May soybean futures finished 8 3/4 cents lower at $9.84 1/2. The Nov. soybean futures clolsed 6 3/4 cents lower at $9.65 1/4. 

The May soyoil futures finished $0.04 lower at $30.96. The May soymeal futures closed $3.10 per short ton lower at $331.00. 

May wheat futures ended 3 1/4 cents higher at $4.93 1/4. 

In the outside markets, the Brent crude oil market is $1.54 lower per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 288 points lower.

U.S. REPORT DATA

In its March Supply/Demand Report, the government estimates the U.S. corn 2014-15 carryover at 1.77 billion bushels, compared to the expected 1.822 billion bushels, and the USDA’s February estimate of 1.827 billion bushels.

USDA pegged the U.S. soybean 2014-15 carryover at 385 million bushels, vs. the trade’s expectations of 379 million bushels, and the February estimate of 385 million bushels. 

The USDA pegged the U.S. wheat carryout at 691 million bushels, compared with the  trade’s expectation of 696 million.

Al Kluis, Kluis Commodities says the report is negative for soybeans, maybe a bit positive for corn. “I think the USDA raised the soybean carryout higher than expected. The government raised its soybean export estimate by 50 million bushels. But, the higher carryout number is negative.”

He adds, “A higher U.S. Dollar is weighing on the markets, possibly capping gains.”

Anne Frick, Sr. VP/Futures Research, Jefferies Bache, LLC, says that the soybean Supply/Demand numbers were “déjà vu all over again”, to quote Yogi Berra. "No significant change in world soybean or product numbers and no change in U.S. soybean or products supply/demand, except for change in 2013/14 soybean oil use in methyl ester (increase of 60 mil lbs from previously) to reflect Friday’s reported date from EIA.  That came out of other domestic.  

Frick ddd, "I don't see any change in price forecasts.  A real snoozer of a report. Attention will be on the survey based, and hence, more important reports, at the end of the month (Mar. 1 stocks and new crop planting intentions.)," Frick says.

WORLD NUMBERS

For Brazil, the USDA pegged the country’s 2014-15 soybean production at 94.5    million metric tons, compared with the trade’s expectation of 93.9 million metric tons, and its February estimate of 94.5 mmt. Argentina’s soybean output  was totaled at 56.0 mmt, vs. the trade’s expectations of 56.6 mmt, and the USDA’s February estimate of 56.0 mmt.

For corn, the Brazil 2014-5 crop size is expected at 75.0 mmt, vs. the trade’s expectation of 74.6 mmt, and the USDA’s February estimate of 75.0 mmt. Argentina’s corn output is pegged at 23.5 mmt, compared with the trade’s expectation of 23.3 mmt, and the USDA’s February estimate of 23.0 mmt.

Jack Scoville, PRICE Futures Group v-p, says it was not much of a report, but the market seems to want to buy grain and sell oilseeds, that was probably the message of the report both us and international.

"Corn ending stocks sown slightly, wheat and sbs ending stocks unchanged.  Negative beans, neutral to friendly corn and wheat,” Scoville says.
He sees the WASDE data slightly friendly to soybeans, as South America production left unchanged and ending stocks are lower.
 
“World Corn shows slight increase in production for Argentina as expected and lower for South Africa as expected.  Slightly friendly on lower world ending stocks. World wheat data shows slightly lower ending stocks but should be mostly neutral.”

Farm Bureau Seeks Fast Action from Congress

After its low-key convention in San Diego in January and the president’s mixed State of the Union message for agriculture, the American Farm Bureau Federation is urging members of Congress to act on EPA water regulations, speed up trade negotiations, and fund lock and dam repairs authorized by last year’s Water Resources Reform and Development Act (WRRDA).

“I think Congress is going to have to prioritize what it really wants to do in the next seven months,” says Farm Bureau lobbyist Mary Kay Thatcher. After next August’s recess, members will already be focused on 2016 election-year politics.

WRRDA, passed last year, is something like the Farm Bill, authorizing legislation that approves programs. It will still need funding this year for progress to be made on repairing locks and dams.

Bob Stallman, Farm Bureau president, sees President Barack Obama’s State of the Union message as both encouraging and worrisome. Obama’s recent move to ease trade restrictions with Cuba is backed  by Farm Bureau and commodity groups.

Obama’s call for Trade Promotion Authority (TPA) was also welcome.

“That was probably the most positive thing for agriculture in his speech,” Stallman says.

Stallman believes Congress could act on TPA within three months or sooner. The issue needs to be put on the agenda by the Republican leadership in Congress, and Obama needs to encourage members of his party to support it, Stallman says.

TPA gives the president authority to negotiate trade agreements that Congress can vote up or down but can’t amend.

Negotiations for a new Trans-Pacific Partnership (TPP) trade agreement have the potential to further open export markets to one of this nation’s best customers, Japan, as well as other nations in Asia and South America. If Japan phases out tariffs on ag imports under TPP, it could increase U.S. ag exports to that country by $2 billion by 2025, according to USDA estimates. The Obama administration is already negotiating the TPP, but Stallman believes progress in those talks might improve if Congress votes for TPA. Farm Bureau supports the negotiations but will withhold judgment on a treaty until seeing how it affects farmers and ranchers.

When Obama says he wants to “close the loopholes that lead to inequality by allowing the top 1% to avoid paying taxes on their accumulated wealth,” Stallman finds that message worrisome. Obama wants to raise capital gains taxes, which Stallman says is “of great concern for U.S. agriculture.

“What he’s talking about would put a really heavy tax load on U.S. farmers and ranchers when land is sold or traded,” Stallman says. “I’m not too worried about it because I don’t think the Republican Congress is going down that path.”

Other Farm Bureau goals include stopping EPA enforcement of its Waters of the U.S. rule, getting legal IDs for immigrant farmworkers along with a usable guestworker program, and having Country of Origin Labeling that meets World Trade Organization rules.

Making CFTC Rules Farmer-Friendly

Four years later, Congress is still mopping up from the collapse of MF Global, which exposed thousands of farmers and small businesses to potentially huge losses. A top priority for the House and Senate Agriculture committees is passage of a Commodity Futures Trading Commission (CFTC) reauthorization bill that includes customer protections.

Texas Representative Mike Conaway, newly installed as House Agriculture chairman, plans a quick start on the CFTC bill. His intention is to clear a bill for floor debate “as early in April as we can.” 

The new chairman of the Senate panel, Pat Roberts of Kansas, has told colleagues that CFTC is at the top of his list.

The starting point this year, says Conaway, will be a CFTC bill that he co-sponsored last year. It passed the House on a bipartisan 265-144 roll call, but it mired in an election-year morass in the Senate.

It included clawback language to allow customers to recover assets when a brokerage becomes insolvent – a mammoth problem when MF Global failed. In the early days, $1.6 billion in customer funds was reported missing. It took two years for bankruptcy trustee James Giddens to find the money and to restore it to customers. 

The problem hasn’t gone away. At the start of this year, customers who traded on U.S. futures exchanges through bankrupt Peregrine Financial had gotten back only 44% of their funds.

Besides recovery of funds, a common goal in the legislation is stronger rules to protect customer accounts from misuse. Many farmers and ranchers use futures accounts as a risk-management tool and cannot afford illicit manipulation of their funds.

The CFTC has moved on its own to improve customer protections. A sore point among lawmakers is a proposal that eventually would require customers to cover margin calls by the morning after a trade. 

CFTC chairman Timothy Massad says, in general, an earlier deadline “better protects customers from one another” by precluding brokerages from shifting funds among accounts. 

The National Grain and Feed Association says the morning deadline is too early. Customers will be forced to premargin their accounts and tie up money.

Roberts and North Dakota Senator Heidi Heitkamp filed a bill last year to give customers until the end of the day after a trade to cover their margins. It would ensure, Roberts said at the time, “that the CFTC rules work in the countryside as well as on paper.” 

The same provision was part of the House bill. 

CFTC commissioners voted last fall to keep the end-of-the-day deadline and to study whether an earlier deadline is practicable.

And the Ag Summit Winner Is….

Nine Republicans who are running or may run for president in 2016 showed up at the Iowa Ag Summit at the state fairgrounds in Des Moines Saturday to run a gauntlet of agricultural issues posed by the event organizer, agricultural businessman Bruce Rastetter. 

The clear winner of the event? GMOs. Support for ethanol and its blending mandate under the renewable fuel standard (RFS) was mixed, with Senator Ted Cruz saying he opposes it and former Texas Governor Rick Perry attempting a two-step to the side of that issue. Many candidates favor phasing out the tax credit for wind energy. The EPA’s proposed Waters of the U.S. rule to define navigable waters was repeatedly condemned as overreach by regulators.

To a man, the candidates’ love for biotechnology seems unconditional.

When Rastetter asked New Jersey Governor Chris Christie if foods containing GMOs should have that on the label, he replied simply, “No,” adding after the applause died down that sometimes you don’t need to say anything else.

Senator Lindsey Graham of South Carolina did elaborate. Efforts by activists to get state laws like one in Vermont requiring labeling are a back-door way to put farmers out of business, he said.

“I think we’re going to have to push for good science and not political agendas,” Graham said. “These people are on a crusade. They want to destroy your industry.”

All of the candidates view GMOs as safe. Several described biotechnology as needed for increasing food production sustainably as global population heads toward 9 billion.

“We should not be trying to make it harder for that kind of innovation to exist,” said former Florida Governor Jeb Bush. GMO labeling is “a solution for a problem that doesn’t exist.”

Midway through the nearly day-long event, one of its sponsors, America’s Renewable Future, fired off a press release criticizing Cruz and Perry for not supporting the law. The bipartisan group invited Cruz to learn more about the state’s $5 billion renewable fuel industry when he returns next month. And it said Perry “refused to answer when asked whether he supported the RFS, cryptically replying that it is more of a ‘state issue.’ ”

Perry did remind the audience that in 2011 he petitioned the EPA to waive RFS, which feedlots in his state blamed for high corn prices.

“I made the right decision for beef producers at that particular period of time," Perry said.

Perry said he doesn’t think the RFS should be ended when other subsidies are in place, but he also said he doesn’t like picking winners and losers among ag products.

Rastetter, who at one time had an investment in an ethanol plant, said that the fuel’s producers want access to the market. How do they get that without the RFS, he asked Perry. That’s when Perry said, “I think this is substantially more a state issue than it is a federal issue.”

The other candidates appear to support the RFS.

“The fact is that the law requires the president to establish the RFS, and he should,” said Christie.

Former Arkansas Governor Mike Huckabee supports the RFS but sees it as one component of “the broadest possible energy portfolio.”

Bush supports the RFS because “as we move forward there should be certainty to invest.” But he also said at some point we’ll see a reduction in the need for the RFS and that for the future of any renewable fuel, “the market’s going to have to decide this.”

Graham, who said he voted for the RFS, sees ethanol as a national security issue and asked the audience to imagine a world where the U.S. didn’t buy fossil fuels “from people who hate our guts.”

Former New York Governor George Pataki pointed out that during his administration, New York state adopted a law that prevents oil company gasoline suppliers from forcing retailers to avoid biofuels through contracts. 

“Ethanol is a good thing for America and the world,” Pataki said. “…we should push it, but not by forcing people to buy it.”

A mandate goes agains his own philosophy. "I honestly don’t think the federal government should require anybody to buy anything,” Pataki said.

Rick Santorum, a former senator from Pennsylvania, said he supports the RFS for several reasons. Having a supply of liquid fuels is a national security issue, he said. Making biofuels puts people to work. The key to having a strong manufacturing industry is a reliable, affordable energy supply. And ethanol is a product that, over the years, has become energy-efficient.

When asked about the RFS, Wisconsin governor Scott Walker said that “In general, on any issue, I’m someone who believes in a free and open market.”

Walker sees ethanol facing barriers to its sales.

“It’s an access issue,” he said. “It’s something I’m willing to go forward on and pressing the EPA to make sure there’s certainty and knowing what the [blending] levels are.”

He also said his goal would be to address issues in the marketplace, “so eventually you don’t need to have these standards.”








 




“Bird Flu” Confirmed in MN Commercial Turkey Flock

According to the United States Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS), a serious strain of avian influenza, more commonly known as “bird flu,” has been confirmed by in a western Minnesota commercial turkey farm where it has killed 15,000 birds since February 26. 

Out of four barns on the farm, only one has experienced loss and tested positive for avian flu. The farm is being quarantined, and some birds will be euthanized to stop the spread of the virus. This is the only farm in Minnesota confirmed with the flu.

After noticing increased mortality, the turkey breeder sent samples from the replacement flock to the University of Minnesota Veterinary Diagnostic Laboratory and the APHIS National Veterinary Services Laboratories in Ames, Iowa to be tested, which then confirmed the presence of avian influenza. 

“APHIS is partnering closely with the Minnesota Board of Animal Health on a joint incident response,” says an APHIS report. “State officials quarantined the affected premises and the remaining birds on the property will be depopulated to prevent the spread of the disease.”

This “highly pathogenic” H5N2 avian influenza strain has killed wild and backyard birds in Washington, Oregon, and Idaho (part of the Pacific flyway), but this is the first finding in the Mississippi flyway, which includes Minnesota. 

Although APHIS and the Minnesota Board of Animal Health are following all protocol to keep the disease contained, U.S. poultry exports have halted, especially to China, says Minnesota Agriculture Commissioner Dave Frederickson. 

“The United States has the strongest AI surveillance program in the world, and USDA is working with its partners to actively look for the disease in commercial poultry operations, live bird markets, and in migratory wild bird populations,” says the report. “USDA will be informing OIE (the World Organization for Animal Health) and international trading partners of this finding.”

According to a news report released from the University of Minnesota, in recent months 2.7 million birds have been killed by the disease or destroyed to prevent spreading an outbreak of avian flu in South Korea and Taiwan.

The Center for Disease Control (CDC) considers the risk to people as low. Workers handling the birds are the only ones at risk of infection. The Minnesota Department of Health (MDH) is monitoring the four workers who directly came in contact with the birds, and there have been no signs of illness thus far.

The MDH is also working with the other workers and the facility to make sure that proper precautions are being taken as to not spread the AI strain.

However, remember that the proper handling and cooking of poultry and eggs to an internal temperature of 165 degrees Fahrenheit kills bacteria and viruses.

Minnesota produces more turkeys than any other state ($750 million a year with $92 million in exports in 2013.)

3 Things to Watch This Morning, Friday, March 6

Grains lower heading into Friday's session.

Though corn traded higher during much of the overnight session, grain prices are entering Friday's open outcry session lower across the board, with soybeans and wheat facing the most bearish pressure. For soybeans, rumblings Thursday that overseas demand is sliding drove prices lower, while wheat "continues to find no support," says Cory Bratland, market analyst with Kluis Commodities. For Friday's trade, look for lower prices to continue, while higher livestock prices are likely. The lower wheat market may have implications further down the road beyond this weekend.

"I think with the recent price action in wheat, we will have a tough time incenting producers to plant any spring wheat this year. Protein premiums could be very good if we get very few spring wheat acres seeded," Bratland says. "I am watching the beef demand. With the recent bad weather on the East Coast behind us and grilling season fast approaching, I think beef demand will see a larger-than-normal uptick this spring as energy prices continue to be under pressure."


Hot Topic: Ethanol's critical role to corn prices.

A chart illustrating how much corn is being used for ethanol right now shows that in late January and early February, the number of bushels used may have peaked. Though production right now is higher than it was a year ago (and a lot higher than two years ago at this time), farmers say a downturn in ethanol output could make things tough for corn prices, even if demand continues from other sectors.

"God bless ethanol, or we would be sub-$2.00 corn," says one Agriculture.com Marketing Talk contributor. Adds another: "I had a talk with a local banker today about crude price perspective, and he said the same. We have to expect that oil will not go that low even if it has a hard time finding storage. If crude can go to 20, what keeps grain from going back to $2 or $2.50?"

What do you think? Will ethanol demand continue at or near current levels?


Weekend read: The 'largest construction project in human history' will affect your farm.

It's been in the works for a long time, and leaders have been talking about doing it for centuries. Now, a canal crossing Nicaragua -- one that would eclipse the Panama Canal just to the south in size and its ability to move today's most modern barges -- is in the works, though there's a lot of speculation as to whether the project that will take $50 billion and five years to build will even get built. If it is constructed, though, the 170-mile canal will be able to handle the world's largest vessels, many of which will carry U.S. grain to ports around the world. "This will be one of the most important concentrations of shipping in the world," according to a report from the Chinese company leading the canal's construction.

So, what do you think? Will it get built? If so, will it mean anything to your grain marketplace?

3 Things to Watch This Morning, Thursday, March 5

Watch the funds and the dollar Thursday and beyond.

The markets have stabilized after Wednesday's massive losses in the grain pits, with soybeans trading back in the black in overnight trading and wheat and corn well off their lows from yesterday. Is this part of the sideways pattern that analysts say is likely to persist through the remainder of winter to spring planting season, or are there other outside fundamentals weighing into the grains? The former is likely, though one new dynamic may be inserting itself into the grain price equation, says Kluis Commodities market analyst Bob Linneman.

"I am watching the grain options for any unusual activity. When the funds take a sizable position in the option market, it is most often because they have a strong conviction on future price movement. We can try to read between the lines as they position themselves ahead of spring planting," he says. "The new multi-year high for the U.S. dollar will cause exports of U.S. goods to decline at some point. When will this influence the market? Only time can tell."


Top Talk: Market scenarios vary widely heading into spring.

Say the crude oil market settles into a $45- to $55-per-barrel range, the stock market loses a quarter of its value, and interest rates start to move higher. Does this take the wind out of the U.S. dollar's sails? Will grain demand continue at healthy levels? Some say demand would stay about where it is, while other farmers say the pressure this combination would apply to the economy would cause prices for grains -- and everything else -- to tank. Still others say factors at home and abroad are quietly waiting in the wings to become part of the equation, probably not in the best way for grain prices. "There are many paradoxes in this mix," one Agriculture.com Marketing Talk adviser says. See what those paradoxes are, get a feel for the wide range of potential outcomes, and add your thoughts on this hot topic.


Smaller seed corn this spring?

As you get ready to roll this spring, here's something that might be different this time around: smaller seed corn. In a lot of places where seed corn was produced last year, growing conditions were close to ideal. That means the likely quality of the seed you'll get this spring will be high, but there may be a big difference: The seed itself will possibly be smaller than you expect, leading to bags as much as 30 pounds lighter than the typical weight. The seed industry says it's not a bad thing, and that the seed itself comes from "one of the best quality seed crops we've ever had." The downside: It may take some planter adjustments to things like down pressure and plate size to get that seed in the ground the right way. 

While your seed corn may be smaller, soybean seed may be at the opposite end of the spectrum -- larger than normal -- though seed industry folks say neither small corn nor big beans will pose a long-term threat to crop potential. What do you think?

Massive Canal Project Seeks to Streamline Global Trade

It's been referred to as the largest construction project in the history of mankind, and it has a lot to do with the grain that passes through your augers on its way to destinations around the world.

A Chinese company has broken ground on the Nicaragua Canal, a 170-mile-plus waterway that could take five years and $50 billion to complete. It would accommodate the world's largest barges and create a new, more efficient way for grain to make it through the Americas to ports on either the Pacific or Atlantic Ocean. Amid immediate questions that the project could even be finished, officials broke ground on the canal that would cross Lake Nicaragua earlier this year.

A canal crossing the nation just north of the current Panama Canal has a long history. Napoleon III proposed such a waterway in the 1800s, though any thoughts of developing the area for commercial traffic was halted when the U.S. built the Panama Canal in the 1910s.

A century later, though, times have changed immensely; the Panama Canal, which itself is nearing the end of a decade-long renovation that will make it better able to accommodate barges common in long-distance commercial transportation, still falls short, proponents of the Nicaragua Canal say. It takes a lot of time for a large vessel to cross the 48-mile canal, and those backing the new waterway to the north say that's a growing impediment to the global movement of freight like corn and soybeans. In the last four decades alone, the amount of freight traversing the world's oceans has quadrupled, according to a National Academy of Engineering (NAE) report, with more than 50,000 vessels moving freight worldwide.


The 30,000-foot view

  • Aging canal infrastructure, vessel technology, and growth is driving new canal's construction.

  • Shorter shipping distances and greater efficiency can save as much as $1 million per trip.

  • As many as 50,000 vessels are moving goods and commodities at sea at any given time.

  • The Nicaragua Canal could take five years and $50 billion to construct.


So, in stepped the Beijing, China-based infrastructure-development firm HKND Group, whose CEO Wang Jing, a 43-year-old billionaire, has backed "major infrastructure, mining, aviation, and telecommunications" projects in 35 countries. The company cites World Trade Organization data that shows world trade accounts for more than $18 trillion in annual global revenue, with 90% of the world's "total global commerce" hinging on the world's transportation system, including infrastructure like the Suez, Panama, and potential Nicaragua canals. These numbers, coupled with general economic growth in China and elsewhere in the world, make up just part of the force behind the canal's construction, according to HKND Group.

"The first decade of the 21st century saw unprecedented changes in global maritime trade. Volume of global trade increased rapidly prior to the 2008-09 financial crisis, with one of the drivers being China’s own growth and the fact that China became a main trading partner of many developed and developing economies alike. Post-financial crisis, China and many other countries in the global economy have faced lower economic growth trajectories. Yet after some consolidation, China should be expected to again accelerate its own economic growth in the coming decades, while many other countries will reestablish more respectable growth rates than those experienced in recent years," according to an HKND Group report. "At the same time, from the mid-'90s onward, container vessel sizes have increased some threefold, contributing not only to the rapid growth of maritime trade and containerization but also to continued revolutions in the lowering of transportation costs per unit and, as a result, lower costs for consumer goods around the world."

Infrastructure improvements badly needed

Though some see the canal's construction as a shot by China to simply get more for less on the global market via cheaper and more efficient global transportation, it's not the only development going on in the Americas to upgrade overall shipping facilities. Improvements have been underway at ports on both East and West Coasts of the U.S. to allow more efficient movement of barges of increasing size, according to NAE.

"Port infrastructure is being continuously adapted to increases in ship size. Port planning is driven by pressures to increase productivity and throughput and reduce air emissions from the terminal equipment, as well as from the ships, trains, and trucks entering and leaving the port," according to an NAE report by Keith Michel, chairman of Herbert Engineering Corporation, and Peter Noble, chief naval architect at ConocoPhillips. "The ports of Los Angeles and Long Beach, the largest container ports in the United States, have been in the forefront of these changes. For example, new cranes with greater vertical clearance and outreach that require less power are highly automated to improve productivity."

Size matters

In the realm of international shipping, size definitely matters. The largest barges on the water today can carry as much as 14,000 20-foot equivalent units (TEU, a common measure for maritime transport capacity). Yet the Panama Canal, once improvements are completed (expected next year), can only handle barges up to 13,000 TEU. So, HKND Group officials say that makes the Nicaragua Canal a vital piece of the future of global trade.

"Currently, some of the largest global trade lanes remain to the U.S. West Coast and the U.S. East Coast. The majority of container shipping volumes to the U.S. East Coast rely on a Panama Canal transit. At the same time, a substantial portion of containers unloaded on the U.S. West Coast transit further eastward, with some traveling to the same destinations as containers unloaded on the U.S. East Coast. The fact that the U.S. can receive more and more larger vessels is itself already a big leap for U.S. ports. But this shift-up in vessel sizes has been in the works for about the last decade. We believe, partly also because of the recent further acceleration in vessel sizes, that further North America infrastructure upsizing will likely take place post-2020," according to HKND Group. "Due to the drive for continued trade globalization and the further enhancement of growth in developing economies, international container shipment volume will continue to grow.

"With the rapid increase in East-West trade volume and increasing ship sizes, there is a sufficient justification for a second Interoceanic Canal spanning Central America. The trend of increasing ship size alone demonstrates there is a huge market potential for the Nicaragua Canal. This market belongs to the Nicaragua canal," an HKND Group report continues. "We believe, in 2030, 16 years from now, the combined value of goods passing through the Nicaragua Canal and Panama Canal will surpass 1.4 trillion dollars. This will be one of the most important concentrations of shipping in the world. In addition, the fuel savings will be considerable for Super Post Panamax ships passing through Nicaragua Canal. For example, from Shanghai to Baltimore, the Nicaragua canal route is shorter than Suez Canal route and Cape of Good Hope route by 4,000 km, and 7,500 km, respectively. Based on current fuel cost and average scale container ships, this results in round trip savings of $0.5m and $1m, respectively."

Scientists question rush to build Nicaragua canal
Published: 3/4/2015
An international consortium of environmental scientists -- featuring leading researchers from 18 institutions in the United States and Central and South America -- have voiced their opposition to the Nicaragua Interoceanic Grand Canal and the haste with which the project has been initiated. "The ...


Panama Canal CEO: Nicaragua Canal isn't a 'feasible investment'
Published: 3/3/2015
LONG BEACH, California - Panama Canal Authority CEO Jorge L. Quijano said that it's possible for Nicaragua and its Hong Kong backer to build a rival canal in five years, but it's not a "feasible investment from a private investment standpoint." Considering it would have to "share" traffic with the Panama.


Is Venezuela financing the Nicaragua Canal?
Published: 2/28/2015
According to source from within Albanisa, the company that handles Venezuelan aid and investment to Nicaragua, “We are hoping they will release the money to compensate landowners in the canal route, but so far they have only made excuses and want the government to provide the funds.” The source ...


Managing Risk and Uncertainty in a Volatile Industry
Published: 2/17/2015
Risk and uncertainty in agriculture are as old as agriculture itself. Whether dealing with unexpected equipment issues, taking a hit in profitability due to lower crop prices, or coping with yield-threatening problems like droughts and pests, few growers are immune from the many unpredictable and potentially devastating factors that can impact their operations.


Opposition Grows To Nicaragua Canal Connecting Atlantic And Pacific
Published: 2/26/2015
Audio for this story from All Things Considered will be available at approximately 7:00 p.m. Copyright © 2015 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required. No quotes from the materials contained herein may be used in any media without attribution to NPR.


The fiasco that is the Nicaragua Canal, explained
Published: 2/26/2015
People protest burning tires against the inauguration of the works of an inter-oceanic canal in Rivas, Nicaragua on December 22, 2014. In its description, HKND says it will need more than 2,000 pieces of major construction equipment, four billion liters of diesel fuel, one billion liters of bunker fuel for the dredgers, 400,000 tons of explosives, and untold millions of tons of cement and steel.


Opposition Grows To Nicaragua Canal Connecting Atlantic And Pacific
Published: 2/26/2015
The day’s biggest stories, plus commentary, arts and life, music and entertainment, the quirky and the mainstream.


Intro: Nicaragua canal
Published: 1/20/2015
Bill Wild, chief project advisor of HKND; Manuel Coronel, chairman of the Grand Canal Authority; and Jorge Huerte of the Nicaragua Academy of Science discuss the impact of the Nicaragua transoceanic canal, the biggest construction project in the world. The 178-mile long waterway will stretch across the country from the Pacific to the Atlantic Continue reading.


Nicaragua Canal Project: US Embassy Expresses Worry Over Lack Of Transparency
Published: 1/8/2015
The list of skeptics on Nicaragua’s massive interoceanic canal project grew by at least one more this week. The canal, which the Nicaraguan government has touted as a rival to the Panama Canal and a way to pull millions of citizens out of poverty, has been the source of increasing anger for ...


3 Things to Watch This Morning, Wednesday, March 4

The dollar is skyrocketing, and the grains are lower.

After Tuesday's trade that saw corn and wheat futures move higher (soybeans closed lower, but 10 cents off the day's lows), things turned around in the overnight trade.

There is one big outside fundamental factor in the driver's seat heading into today's trade that's likely to start in the red: the dollar. It's flirting with major highs, and if it moves a little higher today, it could be a while before it turns around. Meanwhile, traders are seemingly looking ahead to spring planting just as much as farmers are, and weather progress toward planting is front and center in traders' minds, says Kluis Commodities market analyst Bob Linneman.

"The U.S. dollar is dangerously close to scoring new multiyear highs again. If the U.S. dollar pushes through the January high of 95.85, then we should see a quick move to 96.17, which is the 50% retracement of the 2001 high and the 2008 low. If the market does not slow down there, then it will likely take a run at 102.10, which is the 62% retracement," he says. "Is it too early to start watching U.S. weather? NO, it is not! I want to keep a close eye on the drought map and long-range forecasts.  Most people would agree that long-range forecasting is far from perfected, but funds will still buy or sell based on this information. Thus, we need to pay attention to what those forecasts are saying."


Speaking of spring planting weather . . . 

Temperatures are still in the basement in much of the Midwest Wednesday, and it will remain on the cool side through the rest of this week, forecasters say. It won't last, though: By midmonth, temperatures should be into the 40s and 50s as far north as the Dakotas. The spring warm-up is on the way, but a good stretch of warmer temps will be critical to waking up soils that have gone through one of the coldest months of February in decades. This could mean a slow start to planting, but it won't feature major delays, forecasters say.

"January and February featured very cold weather across the eastern U.S., including most of the major corn and soybean production areas in the Midwest. This cold weather has also led to very low soil temperatures relative to normal," says MDA Weather Services senior ag meteorologist Kyle Tapley. "Given this very cold starting point for soil temperatures, it will likely take longer than normal for soil temperatures to reach a point where planting of corn is possible, leading to a delayed start to planting."


Watch Plains wheat conditions heading into spring.

The winter wheat crop in the Plains has had a tough winter, too. As the crop is poised to break out of dormancy and start on its latter half of growth toward maturity, a few issues are popping up in spots around the Wheat Belt. Leaf rust is starting to show up in Texas, while stripe rust worries have farmers applying fungicides in Oklahoma. Hessian fly is the issue in Kansas, having been found in fields planted to varieties that are supposed to have a high resistance to the pest. Despite it all, USDA is rating the crop in mostly good shape as the spring thaw approaches. Watch wheat conditions for market direction in that pit. If you're a wheat farmer, how's your crop looking?

Are We Seeing the “Greatest Collapse of Hog Prices Ever”?

Prices are rapidly rolling from record-high prices in 2014 –- driven by massive PEDv death rumors-turned-reality –- down to five-year lows near $45 per hundredweight, landing the hog markets in what may be the greatest collapse of hog prices ever. 

Even while PEDv was killing millions of pigs, 2014 pork production was only down 2%; now it's skyrocketing past hog supply projections in 2015. Chris Hurt, professor of agricultural economics at Purdue University, calls it a “classic boom-and bust-price pattern.” The looming question: Did prices overshoot to the downside and will they soon recover, or does the larger-than-expected pork supply justify the current low prices?

February pork supplies were anticipated to increase around 3%. Actual supplies? Up 7%

February pork supplies were expected to be up about 3%, while actual supplies have been up 7% due to 4% more hogs reaching the market than anticipated. 

Based on USDA’s December farrowing intentions and sow numbers survey, pork supplies are looking to boost 6% to 7% in the last half of 2015. Since we saw a full 4% more hogs reaching the market in February alone, imagine what we could see come year’s end.

Using 2015 prices thus far and futures forecast for the remainder of the year, Hurt predicts an average price around $55 per live hundredweight, an improvement from recent $45 prices.

Hold Onto the 2014 Profits; 2015 is Much More Modest

Let’s be honest, 2014 was a year for the books. Pork producers raked in huge profits in lieu of PEDv tormenting the nation’s hog supply and meager crop prices. As you may have guessed, a bust in hog prices also means modest profits, especially when you put the figures next to last year’s estimated profits of $53 a hog. The previous annual record profit was $39 per head in 2005.

“Given current anticipated hog prices and costs, modest losses are expected in the first and fourth quarters this year with about $19 per head of profits in the second and third quarters,” explains Hurt. “For the year, a modest profit of $8 per head is anticipated.”

… Luckily, Production Costs Are Lower

Lessening the strain and worry for pork producers are the low costs of production – a five-year low, in fact. Production costs are estimated to be $52.25 per live hundredweight in 2015 compared to about $57 in 2014. Much of the credit goes to the struggling grain prices for helping feed prices take the plunge.

“The biggest decrease in feed costs in 2015 is expected to come from soybean meal which may be $120 a ton lower ($360 per ton this year vs. $478 in 2014 based on Decatur high-protein prices),” says Hurt. 

Average corn costs (based on U.S. farm prices) are expected to land at around $3.83 per bushel this calendar year, down from $4.09 in 2014. 

Yes, feed prices are to be the lowest we’ve seen since 2010, but remember that yield variability has been high in those years. However, fewer corn acres plus lower yields could push prices up. 

Don't Expand the Herd Just Yet

Hurt lays out two questions to be answered before producers dive head first into expanding their herds.

1. How important will PED losses be to hog numbers this year?

2. Has the industry already expanded more than USDA picked up in the December Hogs and Pigs report? 

On March 27, the March Hogs and Pigs report will give information regarding the degree of herd expansion. As previously mentioned, December’s report showed expectations far short of the actual number of hogs.

“If the industry has already expanded sufficiently to drive prices down near costs of production, further expansion could push the industry into losses,” says Hurt. 


See the full report from Farm Doc Daily: http://farmdocdaily.illinois.edu/2015/03/porks-boom-and-bust-price-pattern.html

Weather Ramping Up to Slow, Cool Start to Spring Planting

A slow start . . . but not too slow.

Right now, that's the outlook for corn and soybean planting the next few weeks in the U.S., as winter slowly loosens its grip over the central portion of the country. After a record-cold February (at least in some spots), spring thaw may take a little more time than usual, meaning corn and soybean planting could be held up by Mother Nature . . . just not too long.

Keep your eye on the forecast for the middle third of this month, forecasters say. In the 11- to 15-day forecast, temperatures are expected to remain higher than normal with less-than-normal precipitation, two trends that could help the Midwestern soils wake up from winter and lay the groundwork for this spring's planting window. Don't look for that window to get thrown wide open just yet, though, especially considering the conditions that will have preceded that warm-up.

"As is well known by this point, January and February featured very cold weather across the eastern U.S., including most of the major corn and soybean production areas in the Midwest. This cold weather has also led to very low soil temperatures relative to normal," says MDA Weather Services senior ag meteorologist Kyle Tapley. "Given this very cold starting point for soil temperatures, it will likely take longer than normal for soil temperatures to reach a point where planting of corn is possible, leading to a delayed start to planting. While snow cover is above normal across the central and southern Midwest, the snow pack is actually thinner than normal across the northern Plains and far northwestern Midwest."

A good example of this lower-than-normal starting point for temperature accumulation is the state of Nebraska. As of early March, all of that state's soil is below the normal temperature, some spots by as much as 8 degrees F., a deficiency that can be tough to make up on the normal time frame for a spring thaw, forecasters say.

After the mid-March warm-up, what does the "normal" corn-planting window look like for the Corn Belt? Temperatures will likely remain on the cooler side, emphasizing the importance of just how much things thaw out later this month. If temperatures snap higher earlier on, the cooler -- and possibly wetter -- conditions later on won't be as big of an issue. If the opposite is true for mid-March, it could become a slog, Tapley says. A lot depends on how much rain falls, too.

"During April, seasonal to slightly-below-normal temperatures are expected, with the coolest temperatures relative to normal expected across the southwestern Midwest and Delta. These cool temperatures, combined with the colder-than-normal soil temperatures currently seen across the central U.S., will likely act to delay the start of planting," he says. "However, precipitation is expected to be below normal across much of the Corn Belt, which should lower the probability of major delays in planting due to excessive wetness or flooding."

If the first half of planting season keeps progress at a snail's pace on your farm, don't throw in the towel just yet. May looks better, Tapley says, with warmer temperatures helping kick things back on schedule in general.

"By May, temperatures are expected to be normal or even above normal across the Corn Belt, which should favor planting of corn and soybeans. Normal rainfall is expected across most of the Midwest, although some wetter-than-normal conditions will be possible across Minnesota," he says. "Bottom line: A delayed start to spring planting is likely across the U.S. Corn Belt due to cold winter weather, but our current spring forecast would argue against major delays in planting."

Beyond May, though, forecasts don't show much direction yet; farmers expect conditions to turn hot and dry as summer unfolds. And even now, just as the winter homestrech rolls around, farmers say they may start making grain marketing decisions based on the fact that prices could go higher if a drought hits this year.

"A hot, dry 2015 summer would be a game-changer, and there are a lot of bears on one side of the boat," says Agriculture.com Marketing Talk senior adviser BA Deere. "I honestly don't know, but if a guy can gamble or buy a 'call' to leave your topside open, it would be a contrarian move."


See all the latest spring planting & grain market chat

Pricing 2015 Corn
Published: 2/26/2015
It's time to start guessing what the corn yield will be for 2015 so you can factor that into your marketing plan. Their number crunching is that the long term yield trend line is as accurate as any (admitting that when all lis said and done it won't be all that accurate, either). from 1960 through 2014 results in a trend yield projection for 2015 of 164 bushels per acre.

Planting Weather Forecast
Published: 2/25/2015
The weather outlook for this spring's planting season is looking wet for the South, normal for Midwest, according to MDA Weather folks. In their own words: "The latest ENSO projections keep around a weak El Nino, through most of summer and into early next fall. The biggest risks this spring, I think, will be the likelihood of a cool, wet spring in the Delta and Southeast which may delay plantings there.

Weather conditions report
Published: 2/26/2015
It sure would be nice for ALL posters to tell us where they are located when they report their local weather or crop conditions.  Knowing that there are still snow banks around in May, without knowing where they are,  is of little value to this forum.  

Managing Risk and Uncertainty in a Volatile Industry
Published: 2/17/2015
Risk and uncertainty in agriculture are as old as agriculture itself. Whether dealing with unexpected equipment issues, taking a hit in profitability due to lower crop prices, or coping with yield-threatening problems like droughts and pests, few growers are immune from the many unpredictable and potentially devastating factors that can impact their operations.

how many?
Published: 2/27/2015
'I wonder how many have no clue what if any what kind of budget they are going to be operating with. Talked to two farmers in this area that haven't bought one seed yet. Unlike me the other two farmers farm thousands of acres each. With no real farm giveaway and cost structures to raise a crop what it is how many are still up in the air.

let the decisions begin
Published: 3/3/2015
60% of the time, it works every time. "Political correctness is a doctrine, fostered by a delusional, illogical minority, and promoted by mainstream media, which holds forth the proposition that it is entirely possible to pick up a piece of dung by the clean end."

Market Scenarios
Published: 3/4/2015
Would love to hear opinions on this scenario which seems more likely with each day that pases by. Oil finds a trading range between 45-55 the next 2 years. The stock market loses a big part of it's value (25-35% ) sometime in the next 6-12 months. If one or all of these play out where do you think the dollar goes. And more importantly how do commodity prices react in this environment.


3 Things to Watch This Morning, Tuesday, March 3

Turnaround Tuesday for the grains again?

Soybean futures led the way down for the grains on Monday, ending the day double-digits lower. Yet, prices rebounded in the overnight trade and are slightly higher heading into today's trade. The same factors -- namely the trucker strike and rainfall in Brazil -- remain in play today, though talk that the strike could be ending soon could curtail any price support for soybeans. The trade is also watching the rain there: While it's not the best thing in the world for harvest underway in Brazil, Kluis Commodities market analyst and grain broker Al Kluis says it seems the market is following the old adage that "rain makes grain." Heading into Tuesday, there are a few domestic issues that could be taking over the Brazilian factors as market-movers today.

"Early gains faded as it appears the Brazilian trucker strike is getting worked out, and it is hard to sustain a market rally on wet weather forecasts even when damage is occurring," Kluis says of price action on Monday. "The current soybean-to-corn ratio of 2.38-to-1 will reduce corn-on-corn acres and increase soybean acres in the big USDA Prospective Plantings report at the end of March. I am watching the extended forecasts for the northern Plains, where it now looks warm and dry through the end of March."


Spring weather nerves already?

Longer-term weather outlooks on Monday showed that a warm-up is on the way in the nation's center around the middle of this month, and that could open the door to the spring planting season after a month of February that featured below-normal temperatures that kept snowmelt at a minimum in most of the Corn Belt. What are the market implications of an early warm-up this spring?

"Today's extended forecast is starting to hint at a warm-up in mid-March that could finally end the bitterly cold winter that has the U.S. gripped in its clutches. Temps could warm into the 40s and 50s as far north as the Dakotas, a perfect time to start a warm-up for spring. If the weather does change, it could impact just how early crops are planted across the Corn Belt and northern Plains," says Agriculture.com market analyst Ray Grabanski. 

"So hope springs eternal in spring, not just in farmers' minds but also in market bulls everywhere," continues Grabanski. "One can speculate on any type of crop problem fueled by weather, and the possibility undeniably exists for a 2012-type crop (a major drought which impacts production) as well as a 2014-type crop (record-shattering yields for corn and soybeans).  Which of these two possibilities actually emerges in 2015 will dictate what crop prices do in the next few months as well as the year 2015. In which of these camps are you in starting 2015?  Are you finding yourself excited about the new year, as you feel a drought will be in the offing in 2015?  Or are you imagining a big crop again in 2015 somewhat like the record-shattering yields of 2014?  Either way, beware of a bias toward one or the other."


Is your planter ready to roll?

So, temperatures are going to start warming soon, and spring planting will be here before we know it. Right? So, is your planter ready to go, too? Even if you have the most high-tech planter in the world rolling out in your fields this spring, you're still going to want to conduct a good, comprehensive preseason inspection and any maintenance -- no matter how small -- before you hit the field this spring.

Are your seed meters in shape? How about your closing wheels, air bags, and seed tubes? They're all critical pieces and warrant a close look before you plant. Check out these tips from our Planter Doctor, Kevin Kimberley. He's an old pro when it comes to taking care of planters and offers his tips here. Don't let a broken-down planter stand between you and getting your crop in the ground this spring!

3 Things to Watch This Morning, Monday, March 2

Brazilian rain delays could fuel higher soybean prices today.

It's been bone-dry in much of Brazil and Argentina as those nations' farmers work to get the corn and soybean crops harvested. Now, the opposite condition is causing delays. It was a really wet weekend throughout much of South America, and there's more rain on the way. That could keep harvest action in the next few days slowed to a crawl, and that could be bullish for soybeans, says Kluis Commodities market analyst and grain broker Al Kluis.

"The weekend weather in South America was very wet, and there is more rain in the extended forecasts. In the US grain markets overnight, prices are mostly higher," he says. "I think that the wet weather in South America will delay the soybean harvest and also the planting of double crop corn."

Meanwhile, truckers are still on strike in Brazil, though some roads and ports have been opened. Sources said late last week that truckers are "starting to go broke" and may need to get back to work soon. Watch the weather and progress -- or lack thereof -- on the trucker strike in Brazil for market direction from South America this week.


Most U.S. corn yield projections 'doable but aggressive.'

Now that March is here, the market's done watching the key month of February (for establishing crop insurance coverage levels) and is now looking ahead to see how the "battle for acres" will shake out this spring. With planting now just weeks away, most see soybeans coming out ahead in that fight. That's not good for soybean price potential, but the potential fallout from resulting prices isn't something farmers can't handle with the right marketing approach, one analyst says.

"The next 60 days will likely provide the time window and catalyst for farmer decision-making. We're not convinced that insurance levels, as they are discovered the rest of February, are a major factor this year that will contribute to an acreage decision," says Agriculture.com Market Analyst Bryan Doherty. "After visiting with numerous producers throughout the Midwest over the last two weeks, it still appears to us that farmers were leaning toward planting more soybeans than corn. At a minimum, soybean acres could increase 2 to 3 million, which would suggest carryout could rise toward 500 million. This is negative for beans in the long run and would suggest November beans (should there be an average to above-average crop) could see prices drop to the $8.50 price level or lower. A reduction in corn acres would provide less of a margin for error producing this year's crop. Most analysts are penciling a new crop corn yield of 165 bushels or higher. From a historical perspective, this high yield is doable but aggressive.

"Weather will be the biggest factor after acreage to determine price direction. Good weather, and corn could drop to below $3.50; beans to under $8.50 by harvest. You need to be prepared for any scenario. A combination of forward contracting and using put options to establish a price floor on all of your expected production is recommended for both crops. In addition, look to cover forward sales through the use of call options," he adds.


ICYMI: Farm program sign-up's been extended.

If you weren't at last week's Commodity Classic in Phoenix, you may have missed an announcement that could take some pressure off as you head into spring. Ag Secretary Tom Vilsack said USDA extended the deadline for sign-up for some farm programs, namely crop insurance options of ARC and PLC. The original deadline's now passed, but farmers and landowners now have until the end of this month to certify and reallocate base acres for application to either one of those programs for which sign-up deadline is also March 31. He didn't say whether that deadline will be moved back, but added he estimates about 4 out of every 10 farmers has yet to reallocate base acres and just about 1/3 of farmers have already signed up for ARC or PLC.

ASA Backs Trade, Biodiesel

Soybean farmers repeated their support for trade promotion authority (TPA) for the president at Saturday’s Commodity Classic voting delegates session. It was just a day after Agriculture Secretary Tom Vilsack urged farmers who back TPA to write Congress. Vilsack also said that every living former ag secretary of both parties, from the Carter Administration on, supports it. 

“Our immediate priority right now is trade promotion authority” says Richard Wilkins, first vice president of the American Soybean Association and head of the ASA policy committee.

TPA is considered essential to finish trade talks over the Trans-Pacific Partnership, a twelve nation trading bloc that includes one of America’s best export customers, Japan. TPA, which every president since Gerald Ford has had, speeds the process of approving or voting down proposed trade agreements in Congress. Nearly all ag groups, including most commodity groups and American Farm Bureau Federation already back TPA.

Asked if the TPP agreement with Asian and South American nations would pass Congress this year if the president has TPA, Wilkins says, “It’s got to happen this year.” That’s because China is also trying to negotiation its own bilateral trade agreements with nations that would be in the TPP. That could put the U.S. at a disadvantage.

ASA also wants low level presence (LLP) allowed for transgenic crops that aren’t approved by U.S. export customers.

“Zero tolerance is not attainable. It’s not practical in a commodity handling system” says Wilkins, who farms near Greenwood, Delaware.

Like most farm and commodity groups, ASA wants the EPA to announce blending obligations under the Renewable Fuel Standard “in a timely manner as established by Congress.” The current delay likely has hurt biodiesel even more than corn ethanol. 

ASA also favors switching the biodiesel tax credit from blenders to biodiesel makers, to  “promote and support domestic biodiesel  production.” 



More Ethanol Pumps Are Top NCGA Goal

Farmers wrapped up policy debates at the Commodity Classic in Phoenix, Arizona Saturday, tackling trade issues, defense of crop insurance, environmental regulations and issues that seem as evergreen as perennial crops. But something new is growing out of fertile frustration with a federal government that seems broken.

At the Corn Congress, voting delegates from the National Corn Growers Association voted digitally for their top priorities, giving the most points to ways to build demand for corn. They picked their favorites, letting a computer program sort it out. It’s not the sometimes slow debate over resolutions, but a faster process that the group’s leaders and staff will use in budgeting and planning for the coming year, according to NCGA president Chip Bowling, who farms near Newburg, Maryland, and Chris Novak, who took over as the group’s CEO last fall. 

The result of the vote: bread and butter issues that could build markets for a crop currently valued at or below break even for many producers.

Delegates picked their main goals from three lists, called tiers. Leading tier A was building infrastructure to sell higher blends of ethanol. The top goal for tier B. was increasing exports. Topping a third, tier C list, was trade policy support, including defending USDA programs that help promote exports and were used last year for the first time for ethanol and distillers grains marketing overseas.

Novak said the list of goals was taken from more than 30 ideas sent to NCGA by state Corn Grower groups.

The emphasis on support for more ethanol sales follows a new program that NCGA quietly started within the past year called Prime the Pump.

So far Prime the Pump has raised about $26 million to buy blender pumps for retail fuel chains that agree to sell E15 (15% ethanol blends) for five years, Bowling said.

“We’re not doing this on our own. We’re doing this with the ethanol industry,” Bowling told Agriculture.com after the Corn Congress So far, Prime the Pump is working with five chains in the Midwest and one, Sheetz, that serves populous East Coast states.

“It has been remarkably well received and it's working,” said Bowling.

NCGA has invested in a project to promote E15 with NASCAR, which uses the fuel in its races.

But that soft-sell market promotion ranked much lower in the priority voting. Continuing to work with NASCAR ranked sixth among the Tier B list of goals.

Bowling said that many NCGA members still like the NASCAR program and that NCGA likely will work with the racing organization through 2016. But later it will have to weigh how that compares with more direct investment in selling a product that now rivals livestock feed as the largest market for corn.

Corn Congress delegates approved waiting until their summer meeting in Washington next July to decide on language for a resolution offered by the Iowa delegation that would have made prevented planting insurance slightly less attractive. Some members have argued that prevented planting coverage is being abused. Others argued that a requirement to plant a field at least once very four years discourages excessive reliance on prevented planting.