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Articles from 2018 In June


This Week in Agribusiness, June 30, 2018

Part 1

Note: The video automatically plays through all show parts once you start.

Max Armstrong and Orion Samuelson are joined by American Farm Bureau Federation President Zippy Duvall to talk about all the agriculture news this week. Richard Brock of Brock Associates talks with Max and Orion about what he’s hearing from farmers out in the country.

Part 2

Richard Brock of Brock Associates rejoins Max and Orion to discuss ethanol exports and the Chinese market for corn, plus NAFTA. Chad Colby in the Colby Ag Tech segment visits Kinze to hear about crop progress in Iowa and their summer plans for new products. Agricultural Meteorologist Greg Soulje looks at weather for the Western United States. The segment ends with BASF “Plan Smart, Grow Smart.”

Part 3

Chad Colby rejoins the show to talk about camera technology beyond back-up cameras. Tim Craig, CEO of James Allen Insurance joins Max to talk about new insurance products to manage risk for livestock disease.

Part 4

Max and Orion get a report from Steve Bridge in Beijing, China where he’s learning all about tariffs and the complicated relationship between our two countries from Ambassador Terry Branstad. Agricultural Meteorologist Greg Soulje looks at weather for the Eastern United States. In Max’s Tractor Shed, Max introduces a 1973 Massey Ferguson 165 owned by Melanie Boone in Macon, Mo.

Part 5

In the farm broadcaster of the week segment Max and Orion chat with Ron Hays of the Radio Oklahoma Network in Oklahoma City, Oklahoma. The team also rolls through the numbers from the USDA and elsewhere.

Part 6

Orion Samuelson profiles Eastern Greene FFA in Bloomfield, Indiana., where they have a number of work to learn programs.  Member Mariah Lucas talks about the chapter’s fundraising efforts. Orion Samuelson is Orion Samuelson is disturbed by crimes in farm country and says you should watch your equipment and know how to recognize a scam. Greg Soulje offers his look at the weather for the week ahead.

Part 7

Max and Orion discuss a rally supporting pro-agriculture laws in North Carolina where farmers showed up, were polite, and got what they asked for.

Eastern Greene FFA

Orion Samuelson profiles Eastern Greene FFA in Bloomfield, Indiana., where they have a number of work to learn programs.  Member Mariah Lucas talks about the chapter’s fundraising efforts.

The weekly FFA Chapter Tribute is an opportunity to shine a spotlight on the good work of your local chapter. Tell us about what you're doing, give us some history from your group and tell our viewers of the work you do in the community. FFA chapters across the country deserve recognition for the work they do, make sure we include yours.

To have your chapter considered for this weekly feature, send along information about your group by e-mail to Orion Samuelson at orion@agbizweek.com or to Max Armstrong at max@agbizweek.com. They'll get your group on the list of those that will be covered in the future. It's a chance to share your story beyond the local community. Drop Orion or Max a "line" soon.

The National FFA Organization, formerly known as Future Farmers of America, is a national youth organization of about 650,000 student members as part of 7,757 local FFA chapters. The National FFA Organization remains committed to the individual student, providing a path to achievement in premier leadership, personal growth and career success through agricultural education. For more, visit the National FFA Organization online www.ffa.org, on Facebook at facebook.com/nationalffa, on Twitter at twitter.com/nationalffa.

Scams and Thieves

Orion says you should watch your equipment and know how to recognize a scam.  

Samuelson Sez is a special feature of This Week in Agribusiness where Orion Samuelson shares his insights and perspectives into key issues of the day. You can reach out to Orion at orion@agbizweek.com

1973 Massey Ferguson 165

In Max’s Tractor Shed, Max introduces a 1973 Massey Ferguson 165 owned by Melanie Boone in Macon, Mo. This tractor proves that history repeats itself.

Max's Tractor Shed is a regular feature of This Week in Agribusiness. Max Armstrong shares information about legacy machines, their stories and how they may still be at work today. If you have a tractor you want featured in Max's Tractor Shed, send a high-resolution digital picture, your contact information, and information about the tractor - what makes it special - to max@agbizweek.com.

Carl Eiche made Hoosier farm life come alive

Carl Eiche
INDIANA IKE: He may be a step slower today, but Carl Eiche, aka Indiana Ike, still has his sense of humor and the ability to spin a good yarn.

If you’re 40 or older, you likely remember “Indiana Ike.” If you’re younger than 40, you’re about to learn why Carl Eiche, better known as Indiana Ike, was key in telling the story of Hoosier agriculture to two generations of farm families.

Eiche, retired, lives in Frankfort. In fact, he and his wife, Harriet, still live in the same house where they moved after he became an editor in February 1959, writing for the Indiana edition of Prairie Farmer. This year, he is the Honorary Master Farmer.

The following conversation between Indiana Prairie Farmer and Eiche illustrates both his sense of humor and his role in telling Indiana agriculture’s story.

Why did you decide to settle in Frankfort? I heard they had a good golf course!

Come on, Carl, you didn’t take up golf until much later. Why Frankfort? The editor told me to locate near the center of the state. Frankfort was about halfway between Purdue University and Indianapolis. We’ve really enjoyed the people here — that’s no joke.

You’re not from Indiana originally, right? No, I grew up in Atchison, Kan. I attended Kansas State University, majoring in ag economics. I took a required course in ag journalism, but I didn’t get a journalism degree. Before coming to Indiana, I had similar positions for Kansas Farmer and Missouri Ruralist. (Editor’s note: Both are Farm Progress publications today but were owned by a different company then.)

Where did the name “Indiana Ike” come from? I hadn’t been here too long and Jim Thomson, managing editor of Prairie Farmer, told me I should write a regular column. I asked him what I should call it. All my friends had called me “Ike” instead of Eiche for years. He said, “Just put ‘Indiana’ in front of your name and go with it.” So the column became “Indiana Ike.”

That column added personality to the magazine at a time when many magazines didn’t do those types of personal stories. What did you write about? My main task was to travel the state, interviewing farmers and key ag leaders and specialists. While doing those interviews, funny things would happen or I would find something interesting at a farm. That’s what I would write about. People liked reading about people they had heard of or knew personally.

In the early days, you did picture pages about individual counties. Where did you get your sources? I contacted the county Extension agent, and they were more than happy to help. It gave them a reason to go out and visit people in the community. I went along and took pictures, and wrote about what I saw to give readers a flavor for the county. I intended to do every county, but the editors stopped the feature before I finished.

Then there’s the Master Farmer program. What was your role? The editor decided to restart the program in 1968. I was involved from the beginning and wound up in charge of it until I retired in 1994. Then they talked me into being a judge, so I’ve had a hand in it since the modern era started. This year I said I was too old and didn’t judge.

And you’re still involved — congratulations on being named an Honorary Master Farmer!

Modern Master Farmer program turns 50

Carl Eiche
MR. MASTER FARMER: Carl Eiche has been connected with the Master Farmer program in one capacity or another since the modern era began 50 years ago in 1968.

The year was 1968. Jim Thomson of Prairie Farmer decided it was time to restart a program to honor farmers that had long since fallen by the way side. The Master Farmer program began in the 1920s in Indiana, but was discontinued during the Depression in the 1930s.

The challenge to restart the program in Indiana fell to Carl Eiche, better known as “Indiana Ike.” Ironically, Eiche was originally from Kansas. But by 1968, after arriving in Indiana in 1959, he was fast becoming a popular Hoosier ag writer.

“We recognized 10 farmers the first year, and then we backed off to recognizing seven or so,” Eiche says. “Someone joked we would run out of farmers if we honored 10 every year. The real reason was that it was just difficult to visit that many farmers and write up that many stories in a timely manner. I was the only editor in Indiana at the time.”

That first class had an all-star lineup, including the late Guy Beerbower, who was once president of the Indiana State Fair. Several Master Farmers in the first couple of decades had been state fair board presidents, Eiche recalls. The list also includes many people who have led state organizations, including commodity groups and Indiana Farm Bureau Inc.

Memorable moments

Here are a few memorable moments from Master Farmer award ceremonies through the years:

1968. From the start, the idea was to hold a banquet to honor those who had excelled in their field, Eiche says. The first Master Farmer banquet in the modern era in Indiana was held at the Airport Holiday Inn in Indianapolis. For the next 30 years, banquets would be held at hotels in the Indianapolis area, typically in March before spring fieldwork began.

1972. The late Francis Beck was one of five inducted as Master Farmers that year. Beck, Atlanta, started growing seed corn in the 1930s. His son, Sonny Beck, would be recognized in 1979 as a Master Farmer. His grandson, Scott, who is president of Beck’s today, was honored in 2007.

1982. Sylvan Ice, Vincennes, made the crowd crack up when he explained that when field editor Tom Bechman called him to tell him he was receiving the award, he thought Bechman was just someone trying to sell him insurance. At the time, Indiana Prairie Farmer sold insurance, and everyone laughed but the insurance salesmen. The company is no longer in the insurance business.

1988. The late Harry Armstrong, an authentic southern Indiana cowboy, had the crowd in stitches, Eiche recalls. Following several farmers with big grain operations on the program, when a picture of a 2,000-bushel bin popped up during his presentation, Armstrong deadpanned, “Well, there’s my grain operation.” Armstrong was all about cattle, not grain farming.

1999. This was the first year the event was not held at a hotel. Instead, it was held in a tent behind Pioneer Village during the Indiana State Fair. When a tractor returning from the daily parade nearly backed over one of the guests in the tent, Paul Queck, then editor, vowed it would be the last banquet on the fairgrounds!

2000. The banquet was still held in August, but was located across the street from the state fairgrounds at the Normandy Barn. It was held in the loft of the original barn, moved to the site by Mauri Williamson and others, until the barn was moved inside the fairgrounds several years later. The Master Farmer banquet then moved to the Beck Center at Purdue, and now travels the state with the Indiana Farm Management Tour.

Fund selling in crops accelerates ahead of reports

Green line across green market background maciek905/Thinkstock

Changing U.S. international policies came home to roost in the markets this week, affecting the flow of money in different ways. Protectionist trade policies caused investors to flee agriculture, but a shift in Middle East strategy sent money into energy.
 
Here’s what funds were up to through Tuesday, June 26, when the CFTC collected data for its latest Commitment of Traders put out on Friday.

Over and out
Big speculators turned bearish on agriculture for the first time since the end of January, moving from a net long to a net short position in crops and livestock this week by dumping more than 100,000 contracts. Investors using index funds to gain exposure to commodities also sold, but only about half a much.

Bears have their day
Corn led the way down for bears, as big speculators sold 43,045 contracts to turn net short on corn for the first time in nearly five months. But these hedge funds are net short only 8,042 contracts. In November that bearish bet was short 264,349 contracts.

$2 window
Big speculators sold soybeans again this week, extending their bearish bet by another 23,035 contracts. Index traders sold almost that much, helping futures break $2 off spring highs.

Up tick
Vegetable oil attracted a little short covering this week because weaker currency values supported competing palm oil. Big speculators are still short soybean oil but cut that bearish by 5,914 contracts though index traders were selling.

Running for cover
Big speculators are still long soybean meal, but their bullish bet fell again this week, dropping by 16,295 contracts.

Bottom feeders
Soft red winter wheat keeps trying to confirm a bottom, but traders aren’t so sure. Big speculators remained bearish this week, though they added only 2,944 contracts to their net short position.

Liquid asset
Big speculators kept on selling hard red winter this week as prices plunged, cutting another 13,629 contracts off their net long position. They’re still bullish, but only by 59,164 contracts.

Back seat
Bulls ceded control of the spring wheat market and bearish USDA reports didn’t help. Large traders sold again this week before the numbers came out, adding 1,353 contracts to their net short position.

Loose change
After dumping crude oil positions for most of 2018, money manager filled up their tanks again this week after the U.S. pressured allies to stop importing from Iran. The fast money bought $5.4 billion worth of crude oil futures and options as prices jumped to their highest level Since 2014.

Grow organic?

Conservation strips with grass and organic corn anchors soil and is another way to stripintercrop Some are experimenting with highvalue crops

I know organic can be a contentious topic, as conventional and organic farmers have long clashed over food safety and quality, spray drift, product value and much more—and I get negative email and letters whenever I broach the subject.

But hear me out, as farmers have forever said they would grow what the market wants. In these tougher economic times, diversification into higher returns can be a sound business strategy.

Organic food and feed is still a fast-growing segment in the U.S.

Organic food sales in the U.S. totaled approximately $43 billion in 2016, or 5.3% of total food sales. That is $3.3 billion higher than 2015, and research reports predict global growth around 14% per year between 2016 and 2021.

There continues to be movement on the production side. As of last October, there are 17,188 certified USDA organic farms, a 15% increase over 2016. Certified organic soybean farms grew by 27%, with bulk of growth occurring in Illinois, Iowa, Minnesota, Missouri, Ohio and Wisconsin. Certified organic corn farms grew 17% last year. With more certified farmers and more acres per farm, U.S. organic corn acres are estimated to have expanded nearly 51% from Mercaris’ 2016 estimate.

To satisfy growing consumer desires for more organic, the supply chain continue to seek more organic sources. In March, for example, General Mills announced a deal with South Dakota’s Gunsmoke Farms to convert 34,000 acres from conventional to organic production by 2020. Plus, General Mills aims to cut greenhouse gas emissions 28% by 2025 throughout its supply chain—from farmers to consumers—because it believes climate change will be bad for business.

Smaller farmers can also get in on these programs, especially those willing to prove environmental advances like the use of regenerative practices – from waterway reestablishment and cover crops to no-till, efficient nutrient practices and more.

International markets continue to grow as well. A recent Rabobank report shows an increase in demand for organic, certified or plain non-GM soybeans in the EU, as consumers seek to verify sustainability and track origin. Of the 350 million metric tons of soybeans traded on an annual basis, only 11% is estimated to be kept separate from GM beans.

Organic livestock need food, too. There’s a growing domestic need for more organic feed grains. In the recent Mercaris annual organic commodity report, growing U.S. organic livestock production will need 35% more organic feed grain than last year, primarily for organic eggs and dairy products. Also, rapid expansion in organic broiler meat production is expected to increase the need for organic oilseed and meal by 42% during 2017/2018.

Yes, there are challenges, ranging from farmer mindset and conservative lenders to marketing, three-year transition period and certification red tape.

Fortunately, depending on your location, there are companies willing to help farmers with the transition period. For example, The Andersons offer professional support to reduce the frustration and missteps; Kashi offers help as they seek more grain; Clarkson Grain offers helps with premiums for grain sales during the transition period.

Granted, this transition to organic diversification venture isn’t for everyone, and those farmers with identity-preserved crop experience will likely be quicker to adopt.

I applaud your consideration, and your ability to remove emotion in favor of a greater professional farm management strategy—to see if there’s a fit.

Thank you for reading, for viewing more valuable content on csdigest.com, for subscribing to our newsletters, and for being willing to Think Different.

Grain market week in review - June 29, 2018

Yellow market chart. maciek905/Thinkstock

Missed some market news this week? Here’s a look back.

Monday, June 25, 2018

Markets around the world overnight sold off, including futures in Chicago, after trade tensions heated up again. The Trump administration reportedly is considering limiting investment by Chinese in the U.S., particularly in companies with important technology. Heavy rains could move through parts of the Corn Belt again this week, with some growers reporting flooding as forecasts hit at hot and perhaps drier weather for pollination.

Farmers reporting Feedback From the Field last week said corn crops over all improved, though conditions were not as strong as reported by USDA in its Monday progress updates. But growers voiced concerns about heavy rains in many areas, particularly on soybean fields that were only barely rated above average. 

Grain exports last week ended on a mild streak, with corn, soybean and wheat export inspections all landing slightly to moderately below the prior week’s totals.

The latest USDA Crop Progress report rates 77% of the 2018 U.S. corn crop in good-to-excellent condition, down from 78% a week ago. For soybeans, USDA reports that 95% of the crop is now emerged, up from 90% the week prior and slightly ahead of 2017’s pace (93%) as well as the five-year average (89%).

Tuesday, June 26, 2018

Futures tried to rebound overnight following Monday’s sell off but scored only limited success with that effort despite weaker crop ratings. Concerns about trade disputes with China and other countries show no signs of abating.

Wednesday, June 27, 2018

Grain markets headed higher across the board overnight after attempts to pressure prices lower fizzled. Money could be starting to flow back into commodities following a surge in crude oil Tuesday, spurred by U.S. efforts to get allies to stop importing oil from Iran. The latest Vegetation Health Index maps also showed that rain isn’t always good for crops, with deterioration noted in areas that received excessive coverage last week.

Production estimates are a moving target and can be frustrating at times. In Episode #3 of Deep Dive, Bryce and Ben walk through how USDA arrives at these numbers, why Farm Futures and other analysts often arrive at different estimates, and how satellite image analysis and other agtech continue to evolve the process. 

Thursday, June 28, 2018

Export sales data out this morning will show if end users are taking advantage of lower prices to scoop up U.S. soybeans, fearful that China will ultimately be forced to buy from the U.S. this fall. Acreage and grain stocks reports out Friday could also produce surprises, just as heat bakes the Midwest for end-of-the-month trading. Prices are a little lower so far this morning as trade tensions still dominate sentiment.

Wheat export sales had the best results so far of its young 2018/19 marketing year for the week ending June 21, with corn and soybean sales rebounding from tepid results the prior week, while also beating out trade expectations.

Friday, June 29, 2018

Markets around the world are in a better mood today, lifting everything from stocks to soybeans as trading for June and the second quarter of 2018 comes to an end. 

Grain futures are posting modest gains this morning ahead of a very busy Friday. USDA releases June 1 grain stocks and updated plantings data at 11 a.m. CST time, when temperatures many places in the Corn Belt will be on their way towards 100 degrees. End-of-the-month and quarter positioning could also come into play with some traders heading for the exit ahead of the Independence Day holiday next week. 

There were two export sales reported this week. Mexico and unknown destinations bought soybeans. 

Corn and soybean acres are estimated to be 1% lower compared to a year ago, according to USDA’s hotly anticipated acreage report. In contrast, all wheat acres are up 4%, with cotton acres up 7% over last year, the agency reports. Grain prices saw a moderate boost immediately following the report.

Grain markets found a late morning boost Friday after USDA released some generally favorable data in its latest grain stocks and acreage reports. As the session wore on, however, corn and wheat held on to their gains, but soybeans trended slightly lower once more as some prevailing concerns (trade, weather) reestablished themselves. 

Changing U.S. international policies came home to roost in the markets this week, affecting the flow of money in different ways. Protectionist trade policies caused investors to flee agriculture, but a shift in Middle East strategy sent money into energy. Check what funds were up to through Tuesday, June 26, when the CFTC collected data for its latest Commitment of Traders put out on Friday.

Market outlooks

Basis Outlook — Basis firmed again last week as futures plunged to new lows. But gains were modest in the cash market due to rising transportation costs, burdensome supplies and the beginning of deliveries against July futures at the end of the week.

Fertilizer Outlook – Growers who didn’t move fast to secure fertilizer for 2019 likely will pay more for not seizing the day. Price increases rumbled through the market last week just as retailers started posting prices again.

Canada finalizes tariffs on U.S. goods

Shopping bags - one in U.S. flag and one in Canadian flag. wildpixel/ThinkstockPhotos

by Josh Wingrove and Greg Quinn

Justin Trudeau’s government finalized tariffs on C$16.6 billion ($12.6 billion) of American goods and pledged money to support companies and workers hurt by U.S. levies on Canadian steel and aluminum exports. 

Foreign Minister Chrystia Freeland announced final measures Friday that take effect on Canada’s July 1 national holiday. Products like beer kegs, mustard and certain jams were removed from the final list, which otherwise doesn’t stray far from an earlier proposal.

The tariffs mirror the value of those imposed by President Donald Trump’s administration. Canada will apply a 25% tariff on steel products, and 10% on aluminum and consumer goods. The levies will remain in effect until the U.S. eliminates its tariffs on Canadian steel and aluminum.

“We will not escalate, and we will not back down,” Freeland told reporters at a steel mill in Hamilton, Ontario. “We are acting in very close collaboration with our like-minded partners in the European Union and Mexico.” She also reiterated the U.S. measures are “illegal” and America has a trade surplus with Canada on iron and steel.

Canada will provide as much as C$2 billion in assistance for affected workers, including plans to expand a work-sharing program and enhancements to a corporate innovation fund, similar to steps the government took to cushion the impact of a softwood lumber spat.

Quotas Coming?

The country is also said to be preparing a further set of quotas and tariffs on steel from other countries, to prevent dumping or diversion after the U.S. tariffs kicked in. Innovation Minister Navdeep Bains said Friday alongside Freeland that he will act soon on that file, while declining to provide details of how it would work. 

The tariff response it the latest development in an escalating spat between the two countries, which trade more than $500 billion in goods annually. The U.S. and Canada are also in talks to update the North American Free Trade Agreement, which includes Mexico.

The Americans have applied tariffs to Canadian softwood lumber, and are threatening to do so on autos. The latter move is seen as a major threat to Canadian growth and to the North American auto sector, since U.S. carmakers rely heavily on supply chains that include its two neighbors.

To contact the reporters on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net ;Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net

Chris Fournier, Stephen Wicary

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