Weekly News Highlights
Reporting Agriculture’s Business USDA anticipates South America will have a good crop this year. How does that translate to U.S. farmers? It’s all in this week’s FarmNetNews. You’ll also catch RRFN’s National Farmers Union annual meeting coverage from San Diego. RRFN also made a stop at the CHS Ag Services Ag Industry Day in Grand Forks and the Winter Farm Show in Valley City. This week, RRFN will keep you updated on policy discussions at the state and national levels. Don’t forget to listen to our Weed Management 101 series. Follow the agriculture news stories that are important to you on your RRFN radio affiliate. You can also find us on Facebook and Twitter. The RRFN team, Carah, Mike, Randy, Jay and Don are also on Twitter.
Surprise The March supply/demand report is typically a yawner, but Thursday’s update delivered some surprises. USDA forecast Brazilian soybean production at 108 million metric tons and Argentina at 55.5 million metric tons. Both numbers were above trade expectations. The new crop soybean carryout and ending stocks were increased at a time when most analysts predicted a small reduction. The next major USDA report will be the planting intentions and grain stocks report at the end of the month.
Attention Shifts to Prospective Plantings Report Bower Trading market analyst Doug Werling says Thursdays USDA report didn’t have much influence on the trade, as the market turns to the much-anticipated acreage report at the end of this month. In the upcoming acreage report, Werling expects a big shift to soybean acres, around four million acres or more, due to the price. We are also expecting a build in cotton acres, a reduction in corn and weve already seen the reduction in wheat. The big question mark is spring wheat. Like corn, its a high input crop, but it probably wont be as down as much as originally thought. We may actually have a gain in spring wheat acres.
Basis Levels Continue to Widen Basis levels for grains in the Northern Plains continue to be very wide. Van Ahn and Company CEO Jim Emter says weather conditions along the northern rail route have been causing major rail delays. Weve really bottlenecked the infrastructure out west right now. That flows back into our network. As we move from March to May, these elevators have widened out basis to compensate for the carry. Emter says a pullback in the grains may provide an opportunity to price basis levels at a more attractive level. My fear is with basic product not moving out of the PNW, were a little bit stuck in the Western Cornbelt with a lot of grain and not a lot of home for it to go to.
Farmers Need to Focus on Two Things When it comes to marketing, the focus should be on the futures trade and the basis level and the basis is very weak right now. Commodity Risk Management Group President Mike North says the weak basis is a signal. The basis represents the entire supply chains interest in your product. When the basis is really wide, what theyre telling you is they dont need to buy it right now. When basis is this weak, we expect some adjustment in the futures price. At the CHS Ag Services Ag Industry Day, North said farmers should manage the price and the basis separately. Take advantage of price when it comes and be prepared for opportunity on basis, but, dont just wait and hope things will magically get better.
Anticipating A Timely Start to the Planting Season Following a January thaw and a February thaw, IntelliFARM president Brian Voth is hopeful there will be a timely start to spring planting in the Northern Plains and Canada. The snow pack has really shrunk. Also, nothing froze here before it snowed. Water has been running under this all winter long. It will be interested to see what happens to that water.
A Wild Ride Getting to spring will be a wild ride as far as weather is concerned-at least in the Midwest. Agriable co-founder Eric Snodgrass says the remainder of March and beginning of April, well be backwards on temperatures. Right now, weve transitioned from an early spring back to winter-like conditions. Well be here about a week. For the long-range projections, I see up-down, up-down on temps. Thats typical of this time of the year. Snodgrass says the big February thaw helped get rid of the snow pack in the Northern Plains. Snodgrass is seeing some prevent plant issues. If we settle back into a cooler pattern and the snow pack rebounds and builds in March, there could be some challenges from farmers trying to get into their fields early. We need to watch that snowpack.
An Increase in Spring Acres Bayer field agronomist Justin Nielson says winter wheat acres are down, but he expects an increase in spring wheat acres. With the decline in winter wheat acres, I dont think farmers will have lots of options. There will be an increase in post crop acres.For farmers to spread out spring work, theyll have to put in spring wheat acres.
A Diverse Crop Mix The number of acres devoted to wheat are expected to be down again this year. Winfield United diverse crops marketing manager Mark Torno says that may be an opportunity for other crops. “Canola looks to be flat to up a little bit; there has been a lot of good success with growing canola. For sunflowers, we’ve had a tough time in some areas. In southwest North Dakota, we’ve done really well with flowers and in South Dakota, we have areas that hit 3,000-plus pounds per acre. For soybeans, it is pretty clear. It is going to be up and up quite a bit and corn will do well, too.” For those growing wheat, Torno sees success with intensive management. “If we’re going to grow wheat, we might as well make money doing it.”
Getting the Crop Off to a Good Start It wont be long and the planting season will be here. West Central Ag Services territory sales manager Clyde Kringlen says there are still some flex acres out there. I think everyone has a plan now for the most part. Is it set in stone? Probably not. I just talked to a grower who thought he would switch some acres from wheat to soybeans, depending on how things go.” Farmers will be looking at ways to cut costs this spring, but Kringlen says that shouldnt be done at the expense of yield. “Sometimes we have to spend a little more to lose a little less so we can maximize that yield. Be really sure when you plant in the spring that you try to do it in the best possible conditions that you can. It is a big plus when we can get that crop off to a really good start.”
More Decisions to be Made for Spring CHS Ag Services Sales Manager Chris Kolstoe estimates 80 percent of the spring input decisions have been made. Overall, it has been a good pre-sale season for fertilizer and seed. Our growers will watch the markets going forward and look for market swings and opportunities. As farms have expanded, Kolstoe said the cooperative has kept pace by making significant capital investments in infrastructure, including fertilizer hubs. It is just amazing how many acres our guys can plant in a day and we feel we are positioned to take care of them.
Thin Urea Supplies for Spring With the entire acreage mix still up in the air, fertilizer demand remains a question mark. CHS Vice President of Farm Supply Gary Halvorson sees one safe bet, urea supplies will be razor thin this spring. Getting an early spring through most of the country will help us. That helps us rebalance supply to the north. Our positions are in good shape. Weve done a better job this year than the past when it comes to making sure trains are in place. We have less in-bound urea into our shops than in springs past, which should pay dividends. To address supply chain logistics, Halvorson says more hub fertilizer plants have been added throughout the Northern Cornbelt. Sizeable mergers are taking place in agriculture, including the Bayer-Monsanto deal and the Dow-DuPont deal. Halvorson believes the size and scale of these proposals will allow these companies to get an adequate return on their investment. “Those returns are the story needed to attract money from Wall Street on the stock side of the business. That’s what funds the balance sheets. Without that mechanism, ag will suffer. We need outside money to invest in R & D.” Up until two-and-a-half years ago, Halvorson was general manager of CHS Ag Services. He presented at the co-ops annual meeting Tuesday.
Difficult to Make Cash Flows Work Minnesota Farmers Union President Gary Wertish participated in his first National Farmers Union Convention as the leader of the MFU delegation. Wertish’s main concern is profitability on the farm. “In many cases, its hard to make cash flows work. We need higher prices. Farmers need to make a profit to pay their bills. Thats the biggest concern. Nebraska Farmers Union President John Hansen spoke at the NFU meeting, saying corn is at $3.30 a bushel at his local elevator, the same price he sold his corn for back in 1974. The Minnesota Farmers Union co-sponsored RRFN’s coverage of the NFU Convention.
Another Step Taken in Perdue Confirmation Process According to a Trump spokesperson, the Senate Agriculture Committee has all of the necessary paperwork to move forward on the confirmation process for Agriculture Secretary-designate Sonny Perdue. There is a limited congressional schedule this week. With that situation, it is likely the confirmation hearing wont happen until the week of March 20or later.
Debt Limit Needs to be Addressed Congress must deal with the U.S. debt limit this week or the government will eventually run out money. In 2015, Congress suspended the debt ceiling through Wednesday, March 15, 2017. With that deadline upon us, lawmakers must increase the current debt limit or suspend its implementation by midweek. Without that action, the U.S. Treasury will have no additional borrowing authority. The Trump Administration said it will use extraordinary measures to avoid default.
Lots at Stake Informa Economics Senior Vice President Jim Weisemeyer says the biggest concern that remains is trade and the future of the North American Free Trade Agreement. We had some progress on that on Friday, when U.S. Commerce Secretary Wilbur Ross met with his counterparts. They want to negotiate NAFTA. At least the two sides are talking right now. The NAFTA timeline is unfolding. Ross said negotiations will probably begin in the latter part of 2017. Political analysts also say the uncertainty of the agreement will likely linger over Mexicos 2018 election. Weisemeyer says theres lots of high anxiety in the meat and grains sector. The Trump administration is hopefully learning lessons here. Theres a lot at stake when it comes to U.S. trade aspects. Ag exports are becoming more important going into the cycle of lower prices. You dont want the direction to go the other way. We want to increase exports, not decrease.
Farm Bill Discussions Continue The House Agriculture Committee has scheduled a series of hearings to prepare for the 2018 Farm Bill debate. Priorities Ive discussed with Chairman Conaway include reforming some of our commodity programs to provide a better safety net for producers, but also strengthening conservation programs and practices,” said South Dakota Representative Kristi Noem. “The EQIP program is also important to South Dakota farmers and ranchers.
Educating Consumers About Farm Policy House Agriculture Committee Chair Mike Conaway says the nation’s agriculture sector needs to educate consumers on why this country needs a farm safety net. Im not worried about the top 50 percent of people, but the bottom half is different. Telling folks from non-ag backgrounds why this Farm Bill and this safety net is important; its their pocket book. Conaway also says there are those who want the nutrition title of the Farm Bill included in any welfare reform package. Im not going to allow that to stop us from getting it done on time. Paul Ryans boat is loaded right now. The welfare thing is a vision for 2018. We are going to move this thing forward.
Conservation Still Important in Farm Bill The Farm Bill received lots of attention during the National Farmers Union meeting. A big part of the Farm Bill is conservation. Former NRCS Chief Jason Weller says working lands programs are as important as set-aside programs like CRP. CRP is an important program, providing good benefits to rural America, but its also important to not overlook working lands programs as well. The working lands programs will help farmers improve soil health, optimize fertilizer usage and begin experimenting with precision ag technologies. Weller says the best form of conservation is one that has an economic cash benefit to the farm or ranch.
NFU Delegates Adopt New Policy Book At its just-completed convention, the National Farmers Union has adopted its new policy book and special orders of business. Regarding the drop in farm income, the NFU is urging Congress and the administration to take action to support farmers and ranchers. In the 2018 farm bill, Farmers Union delegates wants an income safety net that is based on the cost of production, an increase in reference prices for all commodities and a strong competition title to allow U.S. farmers to compete on a global scale.
Expanding Membership Minnesota Farmers Union vice president and Mahnomen farmer Bryan Klabunde says expanding membership in northwest Minnesota is one of his personal priorities. I like the message they fight for all different kinds of farms. They give a voice to everyone and I think thats important.
The RFS Challenge Theres been lots of confusion on the future of the Renewable Fuel Standard in the past two weeks. That includes a public squabble between Growth Energy and the Renewable Fuels Association. Growth Energy CEO Emily Skor says there have been sidebar conversations on the point of obligation. Growth Energy isnt in support of that change. Skor says the challenge ahead will be continuing to maintain strength in protecting the RFS.That is a challenge weve lived with for some time. We know what its like to have people who try to undermine something thats beneficial for rural America and consumers. We keep up the fight.
Consolidation is a Threat to Agriculture In his State of the Farmers Union Address, National Farmers Union President Roger Johnson talked about several bigger issues that may get in the way of the next Farm Bill. One of those issues is consolidation. Johnson doesnt want any of the proposed big mergers in agribusiness to be approved. Our economy is becoming very concentrated. Its a function that has very few people with lots of wealth and lots of people with little wealth. Our view is we need the most robust competition possible in the marketplace. Thats when we get the fairest price for what we have to sell and thats where we will pay the fairest cost for the things we have to buy. The North Dakota Farmers Union sponsored, in part, RRFN’s coverage of the NFU Convention.
Broadband Cited as an Important Infrastructure Need In a House Agriculture subcommittee hearing, broadband was highlighted as a critical need for Rural America. Minnesota farmer Bob Fox chairs the Renville County Board of Commissioners and testified on behalf of the National Association of Counties. Fox said roads, freight access and broadband are all important infrastructure needs for rural development.
Petition Filed with EPA Over CAFO Rules A coalition of 35 activist groups, including Food & Water Watch, Dakota Rural Action and the Land Stewardship Project, have filed a formal request with the Environmental Protection Agency. These groups want EPA to revamp its rules for how concentrated animal feeding operations, or CAFOs, are regulated under the Clean Water Act. With this legal petition, these groups are demanding more oversight and stronger permitting standards for large scale livestock farms.
New Buffer Maps Released The Minnesota Department of Natural Resources has updated its buffer maps. This map is designed to help landowners determine where buffers or alternative water quality practices are needed and the width requirements for those buffers. The buffer maps are a byproduct of Governor Mark Daytons 2015 buffer initiative.
Buffer Clarification A bill to clarify language in the Minnesota buffer bill is moving throught the House. Minnesota Farm Bureau Federation President Kevin Paap says his top concern is the private ditches that have been determined to be public waters. “We believe if it looks like a ditch, built like a ditch and acts like a ditch, it should be buffered like a ditch.
MN Farm Bureau Legislative Minute Here’s the latest from the Minnesota Farm Bureau. In this report, get an update on what’s happening in the Minnesota legislature.
Road Ditch Mowing Bill Would Stall MnDOT Plan The Minnesota Department of Transportations road ditch haying rule would be sidelined for one year in a bill that is moving through the State Legislature. This bill would prevent MnDOT from issuing any permits until April 30, 2018. It has passed the Minnesota Senate and is awaiting a vote by the full House.
MFU Legislative Minute Check out this update from the Minnesota Farmers Union on Minnesota’s current legislative session.
Healthcare Reforms Sought Minnesota Farmers Union government relations director Thom Petersen sees healthcare as a big topic in the Minnesota Legislature. One of the ideas Minnesota Farmers Union has been working on is a public option. Wed like farmers to be able to buy into Minnesota Care. For lots of farmers, that could be a good option. Petersen says property tax reform is also a focus.
Palmer Amaranth Footprint Stretches North Weed resistance problems have marched north. Palmer amaranth is seen as one of the biggest weed threats and it was identified in Minnesota this past year. Valent field development manager Dawn Refsell says the footprint for this weed continues to grow. Thats being facilitated by lots of different things. We saw it within CRP seed and moving equipment. It will be interesting to see the survivability through winter. Well see what happens going into this next year. The Minnesota Department of Agriculture has an eradication plan in place for Palmer amaranth. Refsell says total eradication will be a challenge. “To eradicate a weed you have to completely control what is in the seed bank and those seeds are so small, it is difficult. I think eradication will not going to be 100 percent, but we have management strategies that can make it managable.” Valent is introducing a new formulation of Valor herbicide called Valor EZ. This liquid formulation has been approved for use in the Xtend system.
Farm Credit Merger Goes to a Vote Three major farm credit organizations have received preliminary approval for their merger from the Farm Credit Administration. This merger will include AgStar Financial Services, which is now based in Mankato; 1st Farm Credit Services, with headquarters in Normal, Illinois and Badgerland Financial, based in Prairie du Sac, Wisconsin. The three lenders will now hold a stockholder vote. If approved, the merger will take effect July 1. The headquarters for the new entity will be in Sun Prairie, Wisconsin. Rod Hebrink, who now leads AgStar Financial Services, will be president/CEO for the new organization. Another merger has been proposed involving AgCountry Farm Credit Services and United FCS. This merger, which is also expected to take effect this summer, is still awaiting approval from the Farm Credit Administration.
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FarmersEdge Launches New Product FarmersEdge has launched a new product. Were launching our new generation of farm tools called Farm Command,” explains CEO Wade Barnes. “People like our approach toward precision ag and decision ag. They like that we can provide solutions not tied to a seed company or fertilizer company. Barnes says being able to use the data that is collected is the future of high-tech farming.
ND SLN Registration Expands for Flexstar The North Dakota Department of Agriculture has expanded the number of counties in the state that are included in a special local needs registration for Flexstar. This Syngenta product is used on soybeans and this decision adds select counties west of Highway 281 in North Dakota.
AURI Update In the weekly update from the Agricultural Utilization Research Institute. Learn more about the New Uses Forum.
Wastweet to Take Over as Midwest Dairy Association COO The Midwest Dairy Association has named a new chief operating officer. Trudy Wastweet will begin duties with the dairy checkoff group on March 27. Wastweet is now the director of congressional relations for the American Farm Bureau Federation. Previously, Wastweet was the deputy secretary of the South Dakota Department of Agriculture, served as a national policy advisor for Iowa Farm Bureau and was the assistant executive director for the Minnesota Pork Producers Association.
Wilbur-Ellis Acquires MN Retailer Wilbur-Ellis Agribusiness has acquired the assets of Innovative Seed and Consulting in Claremont, Minnesota. Dean Schrom, who was the owner of Innovative Seed and Consulting, will take over as a branch manager for Wilbur-Ellis.
FFA Foundation Board of Trustees Leadership Team Announced The Minnesota FFA Foundation Board of Trustees has elected leadership for 2017. Donna Moenning of Hayfield is the chair. The chair-elect is Kyle Petersen of Murdock. The secretary is Veronica Bruckhoff of Minnesota Lake and the treasurer is Pat Dingels of Redwood Falls. Kevin Paap of Garden City is chairman of the executive sponsors board.
Recognition for UM’s Krishona Martinson University of Minnesota Equine Specialist Krishona Martinson has received the Merit Award from the American Forage and Grassland Council. This award is presented to an individual who has made superior contributions to forage and grassland agriculture.
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Source: Red River Farm Network