The Federal Reserve Bank of St. Louis reports a continued slide in farm income across areas of the Midwest and Mid South. In its Ag Finance report, the average value of ranchland, pastureland and quality farmland also declined in the fourth quarter of 2015.
The survey was done in the last two weeks of December of 33 ag banks in the St. Louis district.
A Kentucky lender said even though crop and cattle prices are down input costs are rising at a slower pace.
More than 75% of the lenders surveyed say they expect a slightly positive return on farmland for landowners of up to five-percent this year.
More than half the farmland sold was bought by farmers in 2015.
The St. Louis Fed district covers Illinois, Indiana, Missouri, Arkansas, Kentucky, Mississippi, and Tennessee.
EPA Chief Administrator Gina McCarthy testified Thursday that the EPA has no intention of withdrawing its proposed Clean Water Rule also known as the Waters of the US (WOTUS). McCarthy testified at a House Agriculture Committee hearing Thursday where she also said the EPA has a collaborative spirit with federal agencies associated with farming.
EPA is working every day with the USDA and the NRCS (Natural Resources Conservation Service) to see how we can advance their mission as a way to advance our own, McCarthy told committee members during questioning.
McCarthy tried to reassure committee members about the increased jurisdiction in the controversial water rule. She said its a necessary part of the rule to explain which waters are covered and which are not.
So is there is not significant amount of time wasted asking in areas where there is no jurisdiction or where we well know that from our history there is a direct hydrologic connection that is significant enough to warrant protection, said McCarthy. But in terms of the agriculture community, there is no added permit burden.
Minnesota Democrat Tim Walz said that the EPA has used what he calls regulatory humility. But, Pennsylvania Republican Glenn Thompson disagreed.
I havent seen a lot of regulatory humility, said Thompson. At least since Ive been here its more like regulatory arrogance.
There is nearly unanimous opposition in agriculture to the water rule which many say is a regulatory overreach. The rule remains on temporary hold under a federal court ruling.
AUDIO: House Agriculture Committee hearing w/Gina McCarthy (2 hrs. 53 min. MP3)
The Missouri Rural Crisis Center is suing the Missouri Department of Agriculture over the current referendum process for a proposed $1 per head state Beef checkoff.
Rhonda Perry is the Centers program director who says there are numerous problems with the process. She says the process disenfranchises some voters and discourages producers from registering and voting. Plus she says the department has refused to hold public rulemaking for determining how to conduct the election, We were forced to file a lawsuit requesting that they start this process over and that they abide by the law when they do so.
The Crisis Center is opposed to a state beef checkoff in Missouri. Perry tells Brownfield there is a lack of trust among many producers about how the money will be spent. And, she says the timing is wrong, Particularly at this time when were facing a significant drop in cattle prices with no real change predicted in the coming months. None of us believe this is the time to add another tax to beef producers.
The lawsuit, filed in Cole County Circuit Court in Jefferson City, is seeking an injunction to stop the state beef checkoff referendum process. Producers vote on the proposal in April.
The Missouri Agriculture Department says it cannot comment on pending litigation.
USDA chief meteorologist Brad Rippey says stormy weather in many parts of the countryin part driven by a strong El Ninohas significantly reduced drought coverage since last fall.
Since we reached a late summer-early autumn peak of about 35 percent of the country in droughtthat being back in mid-Octoberweve seen a drop of almost 20 percentage points in that drought coverage, Rippey says.
Rippey says that represents the smallest areal coverage of U.S. drought in more than five years. He says most of the remaining drought is in the far West.
If you look at the eleven western states, we still see more than one-third covered by droughtbut that is down from 57 percent in early October, which is the beginning of the western water year, he says.
Ninety-five percent of California remains in drought. However, the percentage of the state in the exceptional and extreme drought categories has declined from 71 to 61 percent since last fall.
Soybeans were modestly lower on fund and technical selling. Crop conditions in South America look good, with mostly clear weather in Brazil and rain in the forecast for Argentina. South America is on pace for a bumper crop this year and Brazilian supplies are reportedly much cheaper than U.S. beans. Markets are closed Monday for Presidents Day. Soybean meal was lower and oil was higher on the adjustment of product spreads.
Corn was modestly lower on fund and technical selling. Corns also watching conditions in South America, especially the forecasted rain in Argentina. Most production estimates have increased and could go up further of the rainfall materializes as expected. Losses were limited by solid domestic commercial demand. Ethanol futures were mixed.
The wheat complex was mixed, with Chicago and Minneapolis down and Kansas City steady to fractionally higher. The fundamentals are bearish, with a large world supply and slow export demand for U.S. wheat. Domestic demand is good, limiting losses or providing support. Egypt issued a tender for an unspecified amount of milling wheat. Russias wheat export duty could be eliminated, according to wire reports.
A program in Illinois designed to get more farmers engaged in conservation practices has been awarded a $5.3 million grant from the USDA. The program helps farmers adopt best management practices that protect water quality and prevent nutrient loss.
The funding announcement was made at the Illinois Corn Growers office Friday by USDA Undersecretary Robert Bonnie.
These projects harness innovation and they bring everyone together to protect water, to protect wildlife, to protect habitat and other natural resources, said Bonnie, during the presentation.
The program promotes adoption of conservation practices and encourages participation by providing help with paperwork to meet the requirements of Natural Resources Conservation Service.
Farm Bureau has concerns about President Obamas capital gains rate increase in his fiscal year 2017 budget proposal.
AFBF director of public policy Dale Moore says this tax continues to be burdensome for many farm families.
Whether theyre passing on their operations to the next generation or just something going on in the way that they are managing their enterprises.
A capital gain is when the sale price of an asset is higher than the initial purchase price, and the federal tax takes a percentage of all realized gains.
The Presidents proposed budget calls for raising the top tax rate on capital gains eight percent from the current 20 percent.
Those are the kinds of things that dont readily pop up when youre writing about the ag news, but can have a profound effect on farm and ranch families all across the country.
Moore says there are other proposed tax increases in the bill that could also be harmful to farmers and ranchers and Farm Bureau will be working with Congressional leadership to ensure the final budget is fair to agriculture.
The South Dakota Beef Industry Council (SDBIC) quarterly meeting is February 29, at the Red Rossa Italian Grille in Pierre. In addition to the organizations full board of directors quarterly meeting, separate committee meetings will also be held, according to a news release issued by the SDBIC.
The councils Promotion Committee and Research Committee will meet Sunday evening prior to the Monday board meeting. The SDBIC Board of Directors meet beginning at 10:00 am on Monday, February 29, followed by Issues Management/Advocate training. Board members will also receive an update on the SDBIC audit, committee reports from the recent Winter Cattle Industry Convention, and SDBIC committee reports.
All beef producers are welcome to attend SDBIC committee and board meetings and are asked to RSVP by February 19 to Executive Director, Suzy Geppert at 605-224-4722 or firstname.lastname@example.org so that lunch accommodations can be made.
The SDBIC collects and administers the $1 per head beef checkoff on cattle sold in South Dakota. Checkoff dollars are utilized strictly for promotion, education or research programs. Fifty cents of every dollar is directed to the Cattlemens Beef Board for programs on the national level. The SDBIC retains 50 cents, which is invested in additional national programs or in-state programs. The SDBIC is comprised of three representatives from eight agricultural organizations: SD Beef Breeds Council, SD Cattlemens Association, SD Cattlemens Auxiliary, SD CattleWomen, SD Farm Bureau, SD Farmers Union, SD Livestock Auction Markets Association and SD Stockgrowers Association.
In Class III trade at the Chicago Mercantile Exchange, milk futures were mixed, mostly higher, ahead of the long holiday weekend. February was down $.01 at $13.87 and March was up $.05 at $14.06, April was $.05 higher at $14.11 and May was up $.03 at $14.19.
In the spot market, cash cheese was unchanged. Barrels were steady at $1.48. Blocks held at $1.49 with the last bid unfilled on three loads at that price.
Butter was $.02 lower at $2.11. There were six loads sold, including five at the closing price.
Grade A nonfat dry milk was down $.0225 at $.7375. There were seven loads sold, five at $.75 and two at $.7375. The last bid unfilled was on one load at $.735.
Cash and futures trade Monday will be closed for Presidents Day.
For the week ending February 12th, the USDA reports butter production is seasonally strong with readily available cream supplies and a number of processors close to capacity. Retail interest is increasing, but food service requests are steady to lower.
Cheese production is reportedly active on the East and West, steady in the Central region. In the Eastern region, cheese sales are good with building supplies, but in central areas, packaging demand is slower and inventories are increasing. Western cheese demand is reported as mostly steady.
Farm level milk production is said to vary around the U.S., with steady to increasing volume in the Central region. Demand for Class II products are good and ice cream manufacturers are getting ready for summer.
Prices for low/medium heat nonfat dry milk were mixed, maybe a little weaker, with light demand. Dry whey prices are steady to higher, with good domestic demand and questionable global demand.
Conventional dairy ads were down 6% on the week while organic ads dropped 20%.
The feedlot trade was quiet on Friday afternoon with business completed for the week. USDA Mandatory reported cattle trading was moderate in Kansas and light in the Texas Panhandle on Thursday on light to moderate demand. Live sales were 1.00 lower than last week at 133.00. Trading and demand was light to moderate in Nebraska and Iowa. Live sales in Central Nebraska traded at 132.00, with dressed sales 4.00 lower than last week at 206.00. In Iowa live sales were 1.00 to 2.00 lower at 130.00, dressed sales were 4.00 lower at 206.00.
Boxed beef cutout values closed lower on light to moderate demand and offerings. Choice beef was down .94 at 216.06, select 1.74 lower at 212.53.
The weekly cattle slaughter was estimated at 544,000 heard, 10,000 more than last week, and 4,000 greater than 2015.
Live cattle contracts on the Chicago Mercantile Exchange settled 17 to 70 points in the red. Follow-through pressure developed as early buyer support quickly eroded on Friday morning. The concern that the pressure in the cash markets will continue to add pressure through the rest of the month despite tightening beef supplies created additional underlying concerns in the nearby and deferred contracts.
Feeder cattle ended the session unchanged to 65 points lower. The inability to hold early market support through the feeder contracts sparked additional pressure in the summer contracts, but ended off the days lows. The lack of support in cash markets as well as lackluster interest in live cattle markets has limited buyer interest across the entire feeder market.
Feeder cattle receipts at Missouri auctions totaled 27,546 head. Compared to last week, feeder steers sold steady to 5.00 lower, although there were some instances of 5.00 to 10.00 lower were noted especially on fleshy and/or un-weaned calves. Feeder heifers sold mostly steady although quality heifers suitable to return to the farm were firm to 2.00 higher. 1556 head of feeder steers averaging 672 pounds traded at 166.70 per hundredweight. 446 heifers weighing 669 brought 148.97.
Lean hogs settled from 92 points higher to 20 lower. Light trade volume at the end of the week limited overall direction through the entire lean complex. February through July contracts were able to hold moderate gains, firming buyer interest at the end of the week.
Barrows and gilts in the Iowa/Minnesota direct trade closed .02 lower at 63.61 weighted average on a carcass basis, the West was down .04 at 63.58, and National the market was .65 lower at 62.31. Missouri direct base carcass meat price was steady from 51.00 to 57.00.
The pork carcass cutout value was up .56 at 76.08 FOB plant.
The feeder pig market this week was mostly steady on light receipts. Demand was moderate for moderate offerings. Early weaned pigs, 10 to 12 pound basis averaged 62.26 per hundredweight. 40 pound pigs at 74.48.
The weekly hog kill was estimated by USDA at 2,281,000 head, 105,000 more than last week, and 52,000 greater than last year.
The struggling cotton industry wants Agriculture Secretary Tom Vilsack to make cottonseed eligible for the main safety net programs that crops like corn and soybeans have.
Vilsack says he wants to help, but he doesnt have the authority. He told a Congressional budget panel this week that his decision is based partly on a 2013 Supreme Court ruling.
And that is, if Congress knowingly omits somethings from an act, then the provision cannot be reasonably interpreted to allow the omitted act, Vilsack said.
Congress knew what it was doing, Vilsack said, when it took cotton out of the basic farm program in the 2014 Farm Bill and put it into a separate program called the STAX program.
Basically, Congress was fully aware of the oilseed of cotton and made the decision to remove it and place it in a separate program, he said. So you take the Supreme Court case, you combine it with the actions of Congress, and you have a circumstance where we dont believe we have the authority.
Vilsack said Congress will have to act if it wants cottonseed designated as an other oilseed.
The National Cotton Council says it will continue to pursue the cottonseed designation. Jody Campiche, an economic analyst with the council, says many cotton farmers are in dire financial straits. She tells Brownfield some producers, in fact, will find it very difficult to obtain production financing for the current year.
I think its very likely that we have some producers who are not going to be able to meet their obligations on their 2015 loans, which means they likely will not be able to get financing for the 2016 crop, Campiche says.
The Cotton Council believes Vilsack does have the authority to designate cottonseed as an other oilseed, Campiche says.
Mar. corn closed at $3.58 and 3/4, down 1 and 1/2 cents
Mar. soybeans closed at $8.72 and 3/4, down 3/4 cent
Mar. soybean meal closed at $262.00, down $1.70
Mar. soybean oil closed at 31.80, up 21 points
Mar. wheat closed at $4.57 and 1/2, down 3/4 cent
Feb. live cattle closed at $129.95, down 17 cents
Feb. lean hogs closed at $65.95, up 42 cents
Mar. crude oil closed at $29.44, up $3.23
Mar. cotton closed at 58.90, up 48 points
Mar. rice closed at $10.76 and 1/2, down 25 cents
Feb. Class III milk closed at $13.87, down 1 cent
Apr. gold closed at $1,239.40, down $8.40
Dow Jones Industrial Average: 15,973.84, up 313.66 points
The department says grants are available to enhance the competitiveness of Michigans specialty crop industries. Funds up to $100,000 will be awarded to projects that help provide additional access to specialty crops, improve quality and availability, and ensure the industry remains competitive.
Proposals must be submitted to the department by March 31st.
The Director of the Michigan Department of Agriculture says Governor Rick Snyders proposed budget recommendations include a $5 million increase for agriculture.
Jamie Clover Adams tells Brownfield the Governor has recommended almost $1.2 million to be earmarked for technical education and outreach on the Food Safety Modernization Act. We will be working with MSU Extension, conservation districts, and fruit and vegetable farmers on how they can start to bring their farms up and into compliance.
She says the Governor has also proposed enhancing the Farmland Preservation Program. This will help us, along with efficiencies that weve found in the program, get back on track and provide the service that farmers expect.
Clover Adams tells Brownfield $2 million will be set aside for the Rural Development Fund to support rural infrastructure.
The proposed budget for the department will be $91.6 million in fiscal year 2017, if approved by the Michigan legislature.
The president of the Ohio Farmers Union(OFU) says proposed farmland tax reform is one of the top policy priorities for the group this year.
Joe Logan tells Brownfield they support bills in the Ohio House and Senate that would update the Current Agricultural Use Valuation (CAUV) formula.
Our members across the state have received tax increases in the two, three, four hundred percent range over the last several years, said Logan. That is just something we cannot tolerate in an era when commodity prices have absolutely collapsed.
The Ohio Farmers Union is also calling on the Kasich Administration to change state regulations on disposal of fracking waste. OFU policy recommends any new fracking waste disposal wells be built and regulated under the more stringent Class-One standards.
Canadian egg farms will transition away from conventional housing.
Roger Pelissero, an egg producer and 1st Vice Chair of Egg Farmers of Canada says the industry-wide agreement establishes a time-line for moving to other production methods.
So the timeline is that there will be no new installation of conventional cages and that within 20 years, all conventional housing will be phased out, Pelissero said.
Pelissero anticipates a majority of egg farmers will switch to enriched housing, with the rest transitioning to a cage-free system. Currently about 90 percent of egg production in Canada is conventional housing.
Audio: Roger Pelissero, 1st Vice Chair, Egg Farmers of Canada
The USDA is evaluating how it calculates the value of poultry in its indemnity program.
Incoming deputy chief economist Dr. Warren Preston says in the wake of the avian influenza outbreak last year, finding a fair price for lost birds proved to be quite challenging.
We dont have market prices for the animals. With a turkey we have meat prices, but for a live bird price; thats not available. And for egg layers, there just arent really any transaction prices available.
He tells Brownfield there is a federal law stating that the Ag Secretary shall compensate producers for the fair market value of any animals destroyed, and USDAs Animal and Plant Health Inspection Service has been assessing its indemnity calculator to see if appropriate values are being formulated.
Preston says with turkeys its fairly straightforward using current meat prices, but for layers the calculations are more complicated.
You can obviously look at historical egg prices and historical data on the cost of production. But how does that translate back into the value of the bird? Weve been involved in some discussions with the industry, because they have raised questions about the calculations.
An estimated 500 million birds were affected by the avian flu outbreak in 2015 and Preston says total indemnity payments totaled nearly $270 million dollars.
A veterinarian with Elanco Animal Health says its not too early for livestock producers to get ready for new antibiotic regulations in animal feed that go into effect in 2017.
Kerry Keffaber says there are four steps that can be done, on the farm, to prepare for the Veterinary Feed Directive (VFD).
One, make sure you have a valid client-patient relationship, check with your suppliers of these products, make sure how that system is going to work, third, training, I think we can all be better trained in all aspects of how to do it better and fourth, lets review our health program, Keffaber said. Lets look at ways we can reduce the need for antibiotics and make sure everything were using is appropriate and a responsible use.
Keffaber says its important animal agriculture demonstrates it is doing it right.
The Veterinary Feed Directive takes effect January first of next year.
The Minnesota Department of Agriculture (MDA) is offering research funds to specialty crop organizations.
Non-profits, government agencies, universities and other entities involved in fruit and vegetable research and development within the state are encouraged to apply for up to $100,000 as part of the Specialty Crop Block Grant program.
The MDA says the more than $1 million dollars in federal funding will help the industry identify opportunities and barriers to growing and marketing these crops.
In addition to fruits and vegetables, specialty crops are also identified as tree nuts, dried fruits and certain nursery plants.
Applications are to be submitted to the department by April 29th and projects will be reviewed by an independent panel with experience in specialty crops.
Trent Janssen is a vice president of insurance with Farm Credit Services of America at their Columbus, Nebraska office. In this interview with Brownfield, Janssen talks about how this year is shaping up in terms of risk management needs for crop producers, changes in crop insurance, this years important deadlines, and steps producers should take to get the best coverage for their farming enterprise.