Julie VerHage reported on Friday at FoxBusiness Online that, “A sharp decline in corn prices is leading to job cuts at big agricultural corporations, and pain on the family farm… . While the massive production might be good for consumers, lowering prices on a range of consumer staples, it has had a devastating impact on corn producers. Large agricultural companies and farm equipment makers are slashing jobs.”
The article noted that, “‘There will be farmers that are in bad shape this year with … input costs being high,’ Mark Breneman, a crop insurance agent and farmer in Central Indiana, said. ‘I can’t see anybody going under after one bad year, but many operations will be feeling pinched after this year and margins are going to be pretty tight next year.'”
Jesse Newman and Tony C. Dreibus reported on Friday at The Wall Street Journal Online that, “U.S. corn and soybean crops are likely to top records this year, reflecting favorable U.S. weather during most of the growing season, advisory firm Pro Farmer said Friday.”Cedar Falls, Iowa-based Pro Farmer projected a U.S. corn crop of 14.093 billion bushels, with an average yield of 169.3 bushels per acre, both records. The estimates topped the U.S. Department of Agriculture’s forecasts earlier this month for output of 14.03 billion bushels on an average yield of 167.4 bushels an acre [related graph].
“Pro Farmer estimated the soybean crop at 3.812 billion bushels on yields of 45.35 bushels per acre, also both records, but slightly below the USDA’s most recent estimates of 3.82 billion and 45.4 bushels per acre.”
The Journal writers added that, “U.S. stockpiles for corn are expected to jump 53% [related graph] and soybean inventories are projected to more than triple in the 2014-15 season after the harvest this autumn.”
Reuters writer Naveen Thukral reported today that, “Chicago corn fell around 1 percent on Monday to snap a two-session rising streak while new-crop soybeans slid to a contract low as forecasts of near-record production in the United States continued to drag prices lower.”
And Bloomberg writer Phoebe Sedgman reported today that, “Soybeans slumped to the lowest level since 2010, extending a second weekly loss, on expectations farmers in the U.S. will harvest a record crop.”
Meanwhile, on the front page of the Business section in Friday’s Los Angeles Times, Brianna Sacks reported that, “The country’s love affair with bacon is coming at an increasing cost. The price of the popular cured meat has risen at more than three times the rate of inflation since 2008, the most of any meat, according to government price trackers [related graph].
“Contributing to soaring bacon prices is California’s three-year drought, which made feed for pigs more expensive. In addition, an unprecedented virus has killed about 7 million piglets since 2013, trimming the nation’s pork supply by almost 12%, said John Green, director of marketing for the National Pork Board.”
Joe Taschler reported on Friday at the Milwaukee Journal Sentinel Online that, “The price for a pound of butter hit an all-time high Friday on the Chicago Mercantile Exchange, the latest in a line of dairy products to see soaring prices this year.”
And Christopher Doering reported on Friday at The Des Moines Register Online that, “Cattle entering feedlots in July were at their lowest level on record as livestock owners held animals instead of sending them to slaughter, the government said Friday.
“The Agriculture Department said animals entering feedlots during the month totaled 1.56 million, the lowest level for the month since the current data series started in 1996 [related graph].”
A separate report last week from USDA’s National Agricultural Statistics Service (NASS) indicated that, “Beef production, at 2.09 billion pounds, was 9 percent below the previous year. Cattle slaughter totaled 2.60 million head, down 10 percent from July 2013…[and]…Pork production totaled 1.80 billion pounds, down 2 percent from the previous year. Hog slaughter totaled 8.46 million head, down 7 percent from July 2013.”
NASS also noted on Friday that, “United States egg production totaled 8.29 billion during July 2014, up 4 percent from last year [related graph].”
Alexandra Wexler reported on Friday at The Wall Street Journal Online that, “Sugar prices posted their biggest one-day loss in nearly two months on Friday, as the market resumed its recent decline amid a global glut of the sweetener.”
More broadly, David Pierson reported on the front page of yesterday’s Los Angeles Times that, “Until a few years ago, no one would have considered exporting much rice to China, the world’s largest producer and consumer of the grain… . But starting in 2012, China went on a spree, scooping up millions of tons of the grain from countries such as Vietnam, Pakistan and India. China is now on pace to import a record 3.4 million tons of rice this year — six times more than it did in 2011, according to the U.S. Department of Agriculture [related graph].”
Mr. Pierson explained that, “Other food exporters have overcome challenges gaining access to the China market. Before Chinese buyers purchased Smithfield Foods last year, the Virginia pork giant began ramping up production of meat free of ractopamine, a feed additive used to promote lean muscle that’s banned in China.
“Dairy farmers in Nevada also built a first-of-its-kind milk powder plant to meet China’s preference for whole milk powder rather than the skim milk powder standard in the U.S.
“Other industries remain shut out. The U.S. beef industry is still trying to overturn a 2003 ban on American cattle over mad cow disease. Starting late last year, nearly a million tons of U.S. corn have been rejected at Chinese ports because of inclusion of an unapproved genetically modified strain. And some American pork imports were halted this month over fears they contained traces of ractopamine.”
The L.A. Times article added that, “While other products struggle to win access, the U.S. rice growers are hopeful that officials in Washington and Beijing can come to terms as early as next year. If they do, analysts estimate, U.S. rice exports to China could reach several hundred million dollars a year. That would make China a top buyer of the American grain, on par with Mexico and Japan.”
In other news, Rong-Gong Lin II reported on the front page of Friday’s Los Angeles Times that, “A year and a half of drought has depleted 63 trillion gallons of water across the Western United States, according to a new study that documents how the parched conditions are altering the landscape.
“The loss of groundwater, as well as surface water such as reservoirs, has been so extreme that it lifted the West an average of one-sixth of an inch since 2013, according to researchers from UC San Diego’s Scripps Institution of Oceanography and the U.S. Geological Survey [related graph].”
Also on climate issues, The Washington Post editorial board stated in today’s paper that, “In the coming days we aim to contribute to that debate with a brief series of editorials. We will review the need to act; defend the EPA’s efforts but explain why they are not ideal; highlight several strategies that would work better; and show why it makes sense for the United States to take steps even though other nations have yet to do enough on climate change.
“Action of some kind, at some point, is inevitable. Our proposition is that it should come sooner rather than later and be smart rather than clumsy.”
AP writer David Pitt reported on Saturday that, “In an interview Friday with The Associated Press, U.S Secretary of Agriculture Tom Vilsack gave his views on topics ranging from low commodity prices this year to dysfunction in Washington and his future.
“Vilsack spoke after touring Iowa Choice Harvest, a Marshalltown company that processes Iowa-grown food.”
Excerpts from the AP “Q and A” article included: “With corn and soybean prices largely below the cost of production are you concerned about farm profitability?
“Many farmers throughout the United States have forward contracts where they’re going to get paid maybe $4 or $5 for a bushel of corn, maybe $13 or $14 for a bushel of soybeans so I think you have to be careful not to conclude that because prices have come down that there isn’t going to be profitability in agriculture.
“You also have to recognize as these prices have come down it has created opportunities for other producers, livestock producers in particular, who have been challenged over the course of the last many years with high feed costs now see their cost of doing business coming down. They’re looking at record prices for beef and for pork and we’re also seeing an expanded export market.
“Also, that’s precisely the reason we have a farm bill. It creates the safety net that if the prices come down below the price of doing business we have mechanisms in place to ensure that folks can still stay in business.”
Mr. Pitt indicated that, “It has been increasingly difficult to get the last several farm bills passed through Congress, which is focused on budget cutting. Do you worry about the survival of farm bill programs?
“When I look at the farm bill I don’t refer to it as the farm bill. I refer to it as a food, farm and jobs bill because that’s what it is. First and foremost the challenge is to the make sure that people have a better understanding of the breadth and the comprehensive nature of what this bill does and how it generally impacts every single American. It impacts every American in terms of making sure we continue to have accessible, affordable, available and safe food. It impacts Americans because it ties to job creation whether it’s through the export of agricultural goods, whether it’s through the bio-manufacturing, or bio-chemicals.
“One out of every 12 jobs in this country is connected to agriculture one way or another. When people begin to understand the breadth of the legislation and the impact it has on people, I think hopefully over time our education effort will be more successful in making sure we don’t have a repeat of what we’ve seen in the last couple of times.”
With respect to U.S. farm income, USDA’s Economic Research Service (ERS) has indicated that, “[ERS] will release a new forecast for calendar year 2014 income, assets, debt, farm business performance and the outlook for farm operator households on August 26, 2014 at 11:00 AM. This is the second forecast for 2014, and it will incorporate new information on production expenses, land values, and the outlook for commodities.
“ERS Economist, Mitch Morehart, will present ‘Farm Sector and Household Income Forecasts’ and take questions from the audience in this exclusive USDA webinar on Tuesday, August 26 at 1 PM. The presentation will last approximately 30 minutes with questions and answers immediately after.”
Just click here to sign up for the ERS webinar.
Chris Clayton provided an update on Friday at the DTN Ag Policy Blog titled, “Looking at Base Acre Decisions Facing Farmers,” which can be found here.
And Marcia Zarley Taylor penned an update on Friday at the Minding’s Ag Business Blog (DTN) titled, “Help for Farm Program Homework,” which is available here.
Kate Bachelder noted in Saturday’s Wall Street Journal (“Meet Mr. Frankenfood“) that, “The use of biotechnology has skyrocketed since GM crops were first commercialized in 1996, and more than 90% of all acres planted with corn and soybeans are now GM crops. These crops, typically fed to livestock and used as ingredients in other foods, are in nearly 80% of the products on grocery-store shelves.
“The switch to GM crops happened so rapidly because farmers favored the new technology over the traditional. ‘The seeds that were available back then are still available today,’ [Monsanto’s COO Brett Begemann] says. ‘Farmers just choose not to buy them.’ In 2011 farmers earned $19.8 billion added economic benefit from GM crops, according to a 2013 report by the U.K.-based PG Economics. Genetically modified seeds are more resilient, yield more crops on less land and require less labor. A July Thomson Reuters report said by 2025 ‘price fluctuations and food shortages will become things of the past,’ as GM technology proliferates.”
Ms. Bachelder stated that, “Research shows that GM crops are just as safe. ‘Every regulatory agency–I’m not talking U.S.; I’m talking the world, including Europe–has said these things are as nutritious and healthy as anything else,’ Mr. Begemann points out. That includes the FDA, the World Health Organization and the British Royal Society, all of which have declared GM crops as safe as conventional crops.”
DTN writer Todd Neeley reported on Friday that, “The Environmental Protection Agency sent the final Renewable Fuel Standard to the Office of Management and Budget on Friday, triggering a broader review of the proposal that could trim as much as 3 billion gallons of mandated biofuels production from the RFS.
“The EPA received hundreds of thousands of comments on the proposal and during the past year there has been ongoing speculation about whether the agency would back off its proposed cut. EPA Administrator Gina McCarthy indicated in recent months that public outcry led the agency to take a closer look at its proposal. Some members of Congress, including Sen. Al Franken, D-Minn., said agency officials likely would not cut the RFS as deeply as proposed.
“An EPA spokeswoman confirmed to DTN Friday that EPA forwarded the proposal to the White House Office of Management and Budget.”
Timothy Cama reported on Saturday at The Hill Online that, “A potential move by federal regulators to list a small bird as endangered has ignited debate over changes to the Endangered Species Act.
“The greater sage grouse, whose habitat covers 165 million acres in 11 western states, is at the center of one of the most controversial species designations in years. The fight has drawn comparisons to the spotted owl, which critics turned into a symbol of the law’s excess in the 1990s.”
The article explained that, “The sage grouse was one of the top reasons that Republicans in the House Natural Resources undertook an effort this year to reform the Endangered Species Act (ESA), resulting in a law passed out of the House aimed at improving transparency and scientific integrity in the listing process overseen by the Fish and Wildlife Service.”