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Articles from 2014 In February


Corn+Soybean Digest

5 Common mistakes in grain marketing

Ed Usset spoke to a ballroom full of farmers at Commodity Classic in San Antonio about the five most common mistakes made in grain marketing. From reluctance toward pre-harvest pricing to lack of an exit strategy, Usset offered scenarios of those mistakes, as well as what they cost, and some advice for 2014.

"I'm looking for actions that pay off over time, not every time," said Usset.

He also said that if this year is similary to years past, $10-10.50 soybeans at harvest is a distinct possibility.

"You have to think about making a few preharvest sales for defensive reasons," Usset said.

View Usset's full presentation from the session. (pdf)

Corn+Soybean Digest
Agriculture Secretary thanks farmers, outlines farm bill programs

Agriculture Secretary thanks farmers, outlines farm bill programs

Secretary of Agriculture Tom Vilsack spoke to Commodity Classic attendees in San Antonio, Texas, on Friday and thanked the farmers for their hard work. Whether for helping get a farm bill passed, or feeding the world, Vilsack offered much appreciation to the farmers across the U.S.

“We unfortunately in this country do not thank you all enough or as frequently as we should,” he said. “We are a food secure nation because of your hard work. Our families don't have to worry about where the next meal is coming from. You produce it. We don't have to worry about whether we have to rely on someone else for our food. Virtually everything we need to feed our families is grown and raised in this great country.”

Vislack was also very proud to come to Commodity Classic and talk about passage of a farm bill, rather than needing to pass a farm bill.

With the passage of the farm bill, Vilsack said the USDA has three responsibilities.

“We need to continue the profitability of large-scale commercial sized operations. We need to continue to promote programs and policies that will ensure that profitability will remain,” he said. “At the same time, we have the responsibility to preserve and expand mid-sized operations coming up with new ways to create income opportunities so folks don't necessarily have to give up the farm.”

Other key farm bill highlights include:

  • Opportunity for promotion of biofuel products. “We think the world is ready for American biofuels,” says Vilsack.
  • Opportunity for credit programs. “We will work by the end of the year to institute the beginning farm provisions of greater credit opportunities to make credit more easily available for beginning farmers,” he says.
  • Make sure the market assistance loan program is ready and clarified.
  • There is currently a record enrollment in conservation programs, “and we want to build on that record. we are already taking applications under EQIP and the Management Assistance Program.”
  • The USDA is preparing to establish the educational and training materials that will be used to educate farmers and USDA field staff on new programs.
  • Work will begin this summer to establish research foundation to allow an additional $400 million in ag research.

Vilsack closed his speech by commending farmers for the value system they instill in their children and families, and how that is perceived in the community. He also thanked them again for their work, noting that providing for our families has changed; that “over the course of that 50 to 100 year time frame, most of us have shifted that responsibility to somebody else, to a relatively small group of somebody else, to American farmers and ranchers.

“It is because of you, every person in this country that does something other than farming and ranching owes you an enormous debt of gratitude for the freedom that you’ve given them to pursue their dream, to make this country strong and diverse as it is.”

Read the full transcript of what Secretary of Agriculture Vilsack said to the farmers at Commodity Classic, from more farm bill specifics, to recognizing U.S. farmers for feeding the world.

Southern Cotton Ginners honors Billy Dunavant Jr.

An emotional Billy Dunavant Jr. accepted to A.L. Vandergriff Pioneer Award during the Southern Cotton Ginners Association annual awards banquet Feb. 27.

Dunavant, who at one time headed the largest cotton merchandising firm in the world, said the friendships he made in the industry will endure.

Dunavant, who left the business three or four years ago, said he couldn’t predict the future of the industry, but the he believed those friendships will endure.

   RELATED: Meet your federal crop insurance agent, ‘your new best friend’

TIM PRICE left general manager of the MidSouth Farm and Gin Show and Robert Royal outgoing president of the Southern Cotton Ginners Association compare notes before Royal a ginner from Midnight Miss prepares to introduce the speakers at an educational seminar at the Gin Show in Memphis Tenn
<p><em><strong>TIM PRICE, left, general manager of the Mid-South Farm and Gin Show, and Robert Royal, outgoing president of the Southern Cotton Ginners Association, compare notes before Royal, a ginner from Midnight, Miss., prepares to introduce the speakers at an educational seminar at the Gin Show in Memphis, Tenn.</strong></em></p>

Day of reckoning nears for China’s cotton policy

China’s new agricultural policy could finally start a process everyone knew was coming — the unloading of China’s huge stockpile of cotton. The impact on world cotton trade could come as early as 2014-15, according to Joe Nicosia, executive vice president, Louis Dreyfus Commodities.

Speaking at the Mid-South Farm and Gin Show, Nicosia said that China has “studied many of the U.S. government policies to help them decide what they want to do going forward. They seem to have settled on some form of target price or subsidy program going to their growers. This is going to be a big change. The policy is not finalized yet. We should expect to see more clarity in the months ahead.”

The policy would make China’s domestic cotton production available to China’s domestic mills, rather than stuck off the market in a reserve, as it has been for the last four years. “At first that would not be good for U.S. cotton exports, because China would import less cotton. But ultimately this is the beginning of the process of what has to happen to work through a 100-million-bale world carryover.”

Around 57 million bales of the world carryover are in China’s reserve program, and do not include cotton stored in the countryside or in textile mills.

 

RELATED: Meet your federal crop insurance agent, ‘your new best friend’

Great 2013 crop a positive harbinger for U.S. rice in 2014?

 

Nicosia says some lost export potential could be offset with higher consumption, starting with increasing the percentage of cotton in the cotton/polyester blend. The blend suffered as China’s textile’s mills increased the percentage of polyester to offset the high cost of its domestic cotton in the reserve. Nicosia estimates cotton loss at about 7 million bales of consumption annually.

To regain the higher blend percentage will depend largely on U.S. cotton price competitiveness with polyester.

But cotton customers have to respond as well, according to Nicosia. “The two most discernible consumers in the world are citizens of the United States and the European Union. We are the ones who are supposed to check the labels. We are the ones who are willing to pay for cotton. We are the ones who understand that polyester doesn’t breathe. In reality what we have found in the last four years, is that we buy what they make.”

The good news is that since 2011, cotton in the blend “is finally rising, and it’s rising higher than the trend line, at about 2.5 percent to 3 percent. But it’s going to take several years to recover.”

As a result of new ag policy, Nicosia estimates a decline in the Chinese cotton crop in 2014-15, to about 30.5 million bales. “With their consumption at 38 million bales, which is rising a little bit, the gap would be 7.5 million bales.”

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China’s imports could fall from an average of 16 million bales to around 7 million bales. “Currently USDA estimates that the world trade is going to drop from about 39 million bales to about 37 million bales in 2014-15. We estimate that could be as low as 33 million bales.”

Cotton profitability

Despite the uncertainty in the world, U.S. cotton profitability is looking better compared to corn, which had a bumper crop and record production in 2013, and is now dealing with significantly lower prices.

“Cottonseed revenues have been excellent, and when you add all of these other things to it, cotton actually pencils out to be the best crop to grow in the Delta, Texas and the Southeast.”

There is still bullishness in U.S. old crop fundamentals, Nicosia added. “USDA currently estimates the 2013-14 cotton crop with a carryout of 3 million bales. But we have three areas of doubt — crop size, our domestic use and exports.”

Nicosia noted that according to classing information from USDA’s Agricultural Marketing Service, “the 2013 crop looks like it’s going be about 300,000 bales short of previous estimates. That alone could cut our carryout to 2.7 million bales. We think domestic use is going up, and that could take us down to 2.6 million bales. Exports will be driven by U.S. price competitiveness and the amount of import quota issued by China.”

He estimates that ending stocks for 2013-14 could range between 1.5 million bales and 3.7 million bales. “The difference between 1.5 million bales and 3.7 million bales in carryout is about 25 cents a pound.”

With more trade competition, Nicosia said the United States has to be ready to ship cotton when called upon. “It’s crucial that the United States can ship its cotton when it’s needed and efficiently. China imported 2.8 million bales in December. We’re the largest exporter in the world, and we only got 300,000 bales of it. India alone took 1.6 million bales. If we had gotten an extra million, imagine what our carryout would be today and what our prices would be.”

Nicosia said the United States is helping its own cause somewhat with the recent resurgence in its domestic textile industry. “We think domestic consumption is going to move back toward 4 million bales within the next 12 to 18 months.”

Nicosia says sustaining new crop prices over 80 cents will be difficult unless China continues to hold cotton off the market, or there is a weather disaster in a major producing area.

Growers should be aware of the inverse between old crop and new crop futures. “It’s about 10 cents today. What inverses tell you is that cotton is worth less in the future. So be careful that you don’t hold any inventory this year through that inverse. That’s a surefire loss.”

 

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PEANUT YIELD CONTEST winners in the Mississippi Peanut Growers Association annual competition were from left Greg Norton first place 100400 acres Kyle Williams second place 401800 acres Bud Seward second place 801plus acres Van Hensarling first place 401800 acres and Joe Morgan Jr first place 801plus acres Awards were presented at the MPGA annual conference
<p><strong><em>PEANUT YIELD CONTEST winners in the Mississippi Peanut Growers Association annual competition were, from left, Greg Norton, first place, 100-400 acres; Kyle Williams, second place, 401-800 acres; Bud Seward, second place, 801-plus acres; Van Hensarling, first place, 401-800 acres; and Joe Morgan, Jr., first place, 801-plus acres. Awards were presented at the MPGA annual conference.</em></strong></p>

Mississippi peanut yield contest winners for 2013 announced

Winners in the yield contest sponsored by the Mississippi Peanut Growers Association were announced at the organization’s annual conference.

“Even with the late planting that affected many growers, and drought in some production areas, contest winners achieved outstanding yields,” says Malcolm Broome, who presented the awards.

Winning first place in the 100 acre to 400 acre category was Greg Norton, Norton Farms, Greenwood Springs, Miss., who had a 5,417.12 pound per acre yield.

Van Hensarling Red Oaks Farm, Richton, Miss., was winner in the 401 acre to 800 acre category, with a yield of 5,512.76 pounds per acre. Winning second place in the 401-800 acre category was Kyle Williams, Kyle’s Farm Service, Wayne County, Miss., with a 4,622.67 pound per acre yield.

Joe Morgan, Jr., M&M Farms, Hattiesburg, Miss., was winner in the 801 acre-plus category with a yield of 5,444.96 pounds per acre. Taking second place in the 801 acre-plus division was Bud Seward, Seward Farms, Lucedale, Miss., with a per acre yield of 5,237.89 pounds.

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“We have some outstanding growers in Mississippi, who produce consistently high yields of quality peanuts,” Broome says. “There are so many variables that can affect yield, such as variety, planting date, soil type, cultural practices, proper harvesting, and weather — just to name a few — and this competition helps to shine the spotlight on those who put together a top-notch production package.”

Winners received plaques and cash awards.

Secretary Vilsack says implementing farm bill will be challenging

Secretary Vilsack says implementing farm bill will be challenging

Secretary of Agriculture Tom Vilsack said USDA will have a busy year in 2014 as the agency begins to create rules and implement the Agriculture Act of 2014 with a diminished staff.

“But it is good to talk about passage of a farm bill than to talk about the need to pass a farm bill,” the secretary said during his keynote address to the general session at the Commodity Classic Friday morning in San Antonio, Texas.

Vilsack said the new farm law is “a good solid bill,” but its complexity demands a lot of attention and time to evaluate so farmers have information they need to make the best decisions.

He also said some temporary workers will be added to FSA staffs to help implement the law. “We will be able to bolster the staff on a temporary basis,” he said. “But these will not be permanent jobs.”

Timely implementation needed for farm bill

He said some re-design of FSA offices remain to be done to improve efficiency and take advantage of technology.

Vilsack also said the USDA will, by the end of the year, provide clarity to the definition of “actively engaged,” as directed by Congress. He said the actively engaged limits in the new law are “restrictive. We will comply with the restrictions,” he said.

He also noted that USDA will be engaged in making certain the programs that carried over from previous farm law and from which farmers and ranchers expect payments will be available. “Payments due will be made,” he said. That includes livestock producers who have been without assistance for the last two years.

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The new programs will require significant attention as USDA works to create the rules or guidelines through within the program will be implemented. “Farmers and ranchers will need information so they can make good decisions,” he said.

The Agricultural Risk Coverage and the Price Loss Coverage options are distinctly different and farmers will need to evaluate each carefully, Vilsack said, since once a program is elected it’s in play for five years. He said wheat farmers may be at some disadvantage since the final rules are not likely to be available until fall 2014. But they will have an opportunity to re-evaluate and select another program if they had to sign up before final rules were available and then find another program was best. Vilsack said they can switch within a defined period without penalty.

USDA goals with the new program include maintaining viability of large, commercial farm and ranch operations, he said. “We also want to expand and maintain mid-size operations and offer new income opportunities. And we will assist smaller operations and beginning farmers and ranchers, including returning veterans who want to reconnect with the land.” Improved insurance and credit opportunities will be available to beginning farmers through the new farm law.

He said the Supplemental Coverage Option and the cotton STAX program also need to be evaluated. STAX will be in place for 2015 with a transition payment available for the 214 crop.

“For SCO, we need to develop enough data to have accurate price options. We are beginning to look at information from an adequate number of farms to determine counties covered. We should have maps by summer or fall 2015 to show where SCO coverage is available.”

He said generating adequate data is essential for farmers since they cannot choose both SCO and ARC.

Vilsack said the new farm law provides funding for agricultural research that has been lacking in recent years. He also pledged continued support for the biofuels industry and said it is an important factor in rural economies for continued strength of grain prices, for national energy self-sufficiency and as a matter of national security.

He said USDA will continue to support biofuels regardless of what EPA decides on proposed reductions in the Renewable Fuels Standard.

The secretary also noted that Congress included education funds to help inform farmers abut options in the farm program. Those funds will go to land grant institutions to develop educational materials.

Record conservation program enrollment will also test the new streamlined conservation titles in the new farm law.

He said export promotions will expand and will now include a focus on biofuel export with key targets in Japan, India and China. “The world is ready for American bio-fuels,” he said.

Vilsack said the new farm act is complex and different from previous programs and will offer USDA challenges as they develop rules to implement the program. “We will keep it as simple as possible,” he said. “We will determine if we need a rule or if guidance will work. If we need a rule, we have to send it to the office of management and budget.” If guidance is acceptable, it’s much simpler matter.

Regardless of the challenge, he said this is what agriculture wanted. “We prefer this to talking about needing to pass a farm bill.”

 

For more on the Farm BIll changes:

NCC launches farm bill meetings

National Cotton Council launches regional farm bill educational meetings

Farm bill needs education updates

New EPA label requirements for neonicotinoid insecticides

Farmers and consultants who have beekeepers and their hives nearby will face a new EPA label requirement when the 2014 crop season begins. The new label says growers cannot spray neonicotinoid insecticides during the flowering period for their crops.

The exception occurs when pest populations exceed recognized threshold levels, as Dr. Jeff Gore explains in this interview.

Gore and other university entomologists discussed a number of issues during MANA’s sixth annual Consultants Conference in Memphis, Tenn., on Feb. 26.

Timely implementation needed for new farm programs

Grain and soybean farmers gathered in San Antonio this week for the annual Commodity Classic agree that implementation of the newly passed Agriculture Act of 2014 will determine how well the new program works.

The implementation process could be a tedious one, says Wade Cowan, a guar, wheat, grain sorghum, soybean and cotton farmer from Brownfield, Texas, and vice president of the American Soybean Association.

“Bottlenecks in West Texas are likely,” Cowan said during an ASA press conference. He said with trimmed-down Farm Service Agency (FSA) staffs, the agency “will be under a lot of pressure.” He hopes to see at least some temporary employees added to assist implementation of a farm program that will be significantly different from past legislation.

With farm program benefits tied to county-level yields, Cowan said it will be essential that FSA get those yield numbers right. “If not, the safety net can become a hammock or nothing. It is important that we implement the program right or it will be a mess.”

With a varied crop mix, Cowan may be looking at several options, including STAX for cotton, so he’s anxious to see the numbers for each alternative program.

NCC launches farm bill meetings

“It will be a complex issue for our farm,” he said. “We face a very difficult learning curve and it will be time-consuming. Our fear is that some decisions may be made by farm lenders and not farmers themselves. We have to maintain the flexibility to grow what the market says to grow, what the market needs and the people demand.”

He said he was pleased that the law includes a supplemental coverage Option (SCO) that improves a farm’s safety net. “Our biggest hope is that this will be implemented,” he said.

ASA President Ray Gaesser said the association is pleased “to see a farm bill passed and with a streamlined conservation program and a safety net. This program allows farmers to produce for the market,” he said, “and kept us clear of WTO challenges.”

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National Association of Wheat Growers (NAWG) past President Bing Von Bergen said the Agricultural Risk Coverage (ARC) probably fits most wheat growers better than the Price Loss coverage (PLC) option. “But if wheat drops to $4 a bushel, that might change. It may also be different for wheat growers in the Southern states who graze cattle.”

Paul Penner, NAWG president, said the new farm law offers farmers more options than did previous legislation. “We can tailor coverage to the crop or farm unit. Decisions may depend on the price of corn, the Renewable Fuel Standard, weather, interest rates, or the value of the dollar.”

The key, he said, is that farmers have choices.

Martin Barbre, National Corn Growers Association president, also believes ARC will be the best option for most corn producers. “ARC seems to be the most workable program. But we still need to see the details. It was wise,” he added,” that Congress included some farmer education funds in the bill.”

Those funds will allow NCGA and other associations to develop educational materials for their growers when details are made available.

J.B. Stewart, Chairman, Board of Directors, National Sorghum Producers, said the farm law “is a long way from implementation. But we want to make sure the rule-making reflects the intent of Congress. We’re appointing committees to work with implementation.” He said committees on commodity title, conservation and energy and crop insurance will begin to look at the farm program and work to get rules in place that reflect what legislators intended.”

Stewart said it is important to keep things moving, “but not too fast. We don’t expect sign-up until August or September. We want to make certain we understand all the caveats in the program before we sign up. Once we sign, we are in that specific program for five years.”

He said the farm program is overall a good one. “It’s adequate and fiscally responsible, but it is not simple.”

Barbre said other legislative matters also bear scrutiny, including a barge fuel tax the industry needs and is willing to pay for but that Congress seems unwilling to pass. “The word ‘tax’ is an issue,” he said. “Some sections of Congress don’t want to tax anything.”

He also said the association is watching for details on a new Clean Water Act clarification that would define “Waters of the United States.” “We believe the term navigable should stay in the language,” he said. “We hope to keep that in.”

He also noted that the Coalition for Safe and Affordable Foods would be a benefit to the industry by establishing, by federal law, how foods would be labeled. “That will be better than a patchwork of state laws.”

The proposal would add commonsense, he said, to the potential for genetically modified food labeling. “GMO is a hot button for the industry and for consumers.”

It’s also a trade issue, said Cowan, especially in Europe where biotechnology remains a problem for trade. “We need to convince Europe to follow scientific principles,” he said.

The annual Commodity Classic broke attendance records with more than 7,000 attendees, Gaesser said.

 

For more on the Farm BIll changes:

NCC launches farm bill meetings

National Cotton Council launches regional farm bill educational meetings

Farm bill needs education updates

Telling Your Story
3 Ways To Bring Agriculture&#039;s Story To Your Community

3 Ways To Bring Agriculture's Story To Your Community

While traveling last fall through a rural area, every several miles along the highway, there were temporary signs that said, "Harvest in Progress, Watch for Slow Moving Vehicles."  What a good reminder for our non-farming neighbors that there are farms in the area and what to expect.

While community signs are a nice touch, several farms have created a blog or Facebook page to communicate about what they are doing on their farm.  Spring planting will soon be upon many farms.  Why not use this type of communication to keep your local community informed of day-to-day busy season activities?

Instead of a plain field, why not include a sign to tell neighbors that it's farmed by a family?

Trucks with a farm logo are another way to communicate about your farm being in the area.  With all the trucks and other big equipment on the road, a farm logo on your trucks helps set you apart from everyone else.

During the growing season we'll see seed plots in highly visible areas promoting which seed is planted. Non-farm people often think that the land that has a test plot with a row of seed signs is farmed or even owned by that seed company.  Rather than only promoting the seed company, how about signage around your farm or fields - something to the effect of "Proudly Grown by Smith Farm"?

Ultimately, outward communication with our neighbors is about helping non-farm people to recognize how visible farms are right around them.  Many people drive around their communities and don't fully understand the impact that agriculture has on them.  We know that the farmer's dollar turns over about seven times in his local community, so there is significant economic impact and most of us raise crops with the idea of feeding others. 

These are both very important aspects of agriculture's impact.  However, many farmers will say that their neighbors likely don't fully understand what a modern farm does.  It's up to us to help raise the visibility of our farms, and help the community to understand how we fit in to the community, what we do, and why it's important to them.

Many farmers agree that their neighbors may not know what they do on their farm, so why not over-communicate what activities you're doing on your farm that might impact others?