Farm Bill & Market Updates

Hello everyone!
Now that the Final Four and The Frozen Four are both set, and you're on your way to winning the pot in whatever 'pool' you participated in...Michigan is represented in both finals and the Big 10 has 3 of the four in St Paul...rock chalk jayhawk!

March 27th - Cathy McMorris Rodgers will be holding a Farm Bill / Market Access listening session at the Walla Walla Regional Airport Conference Room (WW Port). The meeting is scheduled from 8am - 9am on Tuesday morning. I encourage all to attend and voice your concerns and opinion.

March 29th - USDA will announce prospective plantings for 2018 and provide the quarterly stocks report. Expecting 90 million acres of corn and soybeans to be planted this spring in the US.

Farm Bill - Congressman Peterson has stated that the Farm Bill is already on 'life-support'. Representative Conaway may write a bipartisan bill so to get passed by the House. Senator Roberts has stated publicly that he will not follow the template of the House, as he too needs to get votes to for Senate approval. All of these are due to differing views are nutrition funding and reform, which accounts for roughly 80% of Farm Bill funding. It is hopeful that the next 2 week recess will allow for the House and Senate to come together and reach agreement. It is important to let our elected officials know what's important to their constituents.

Omnibus spending approved - The House and Senate both approved the 1.3 Trillion spending bill; President Trump then signed the bill on Friday, after threatening to veto earlier. The Section 199A 'grain glitch' fix is also contained in this bill.

Markets - As noted above, USDA will provide another monthly update which will include the prospective acres to be planted this spring. With favorable spring wheat prices, analysts are expecting 750k to 1m additional acres of spring wheat to be planted this year. If anticipated spring wheat acres are greater than this, expect some market pressure on the price. Corn acres are expected to be down slightly from last year's 90.2M acres; western corn belt acres are probably the most suspect to move to another crop. Soybean acres are a bit fluid, in that the cash flow is tight and beans are less expensive to plant than corn. Bean plantings are expected to be at least 90M acres and could reach 92M acres. Any delay in spring plantings will increase soybean acres for 2018. Cotton is expected to see as much as 1M more acres in 2018 than were planted to cotton last year.

Winter wheat conditions in the US Southern Plains continue to deteriorate. The latest crop conditions report is about a week in arrears, reflects the showers received last weekend (17th & 18th) across parts of KS. Know that the market's downward price action of March 16th and 19th, had rain accumulations in KS of .12" - .16" in central KS, .42" - 1.28" eastern KS. Please see the comments of a Western KS producer from Kearny County, KS below. Last week's crop ratings were: KS, 12% good to excellent; OK, 6% good to excellent; TX, 12% good to excellent. In each of these 3 states, the poor to very poor rating increased (crop conditions worsened), from 2% to 7% more, at least 55% of the acres across the 3 states are in very poor conditions. An updated of the current crop conditions for wheat will be updated later today.

Livestock - Are cattle futures pricing is showing us that our large supply will be cheapening the prices later this summer? June and August futures are currently at a discount to the nearby prices...the latest cattle on feed report has the largest increase since October of 2006, drought and lack of wheat to graze contributing factors.

Weather - The latest drought index map hasn't changed significantly in the past several weeks. The maps are updated every Tuesday and released the following Thursday...short term forecast remains warm and dry out west, cool and wet across the northern plains and eastern corn belt.

Crop Comments:

• Cattaraugus County, NY - Lots of standing corn, still. Pressure on the dairy industry is massive....Farm Credit says benchmark break even for milk is $21, the price is $19, less in other markets. Hauling is getting expensive for some producers. No money to pay the combine to come, so the corn rots in the field. Sad. USDA offering grant programs but no one has the money for the cost-share. It's got to be free!!
• Dallas County, IA - Need spring rains badly. Frost will be out of the ground after next weekend and it is dry. Tiles not running, creeks are at summer levels and the pond is 4 feet low.
• Howard County, NE - Had a really cold winter. Got .40 rain and expecting more this week. Agree it will be a late spring. Been reading that there is more anticipation of corn going higher. I am a fan of planting less corn and create a better market. We have all the power in the world but don't know how to use it. Good luck to everyone.
• Dawson County, NE - Had a couple inches of dry powdery snow every other week this winter. Had to supplement cows because of that moisture/snow. Had a warm spell a couple weeks ago and the snow melted and ran out of the end of the fields and into the road ditch. Because the ground was still froze. We got to spend extra money feeding cattle this winter because of moisture/snow we needed. Soil moisture would have been good if snow could have melted into cornfield instead of running into the road ditch.
• Kearny County, KS - Wow parts of Kansas receives rain and all the wheat belt is saved! We are at 166 days without any measurable rain now. We really don't have any chances in sight.

This past weekend we attended a memorial service of Cheryl's uncle in Boise. The quote that follows captures the person Uncle Ed was to everyone he met.

“You can preach a better sermon with your life than with your lips.” ~Oliver Goldsmith

Until next time, stay safe and Happy Easter
Curtis Evanenko
McGregor Risk Management Services, LLC
Cell - 509.540.2632
Office - 509.843.2599
Fax - 509.843.2583

Posted in Risk Management; Posted March 26, 2018 by Curtis Evanenko