National Ag Day Today!
Happy first day of spring everyone! But more importantly, today is National Agriculture Day - thank you to each and every producer for your contribution in making this world a better place, not the least of which is feeding the world! This year's theme, Agriculture: Food for life!
And speaking of "Food for Life", let's get to business:
Adequate stand - If you've planted fall barley or fall peas without the winter coverage endorsement, an inspection must be requested so determination can be made if an adequate plant stand exists and coverage attaches. Contact us immediately so we can notify the company and have an adjuster inspect the acreage in question.
The same is true for fall planted acres, if you are contemplating replanting or 'sweetening' any amount of fall seeded wheat or barley, you must have permission from the crop insurance company to do so. So, before turning a wheel or moving a clump of dirt, make sure a notice is filed so an adjuster can be dispatched to inspect and authorize your actions.
Autonomous auto - Realistically, an accident of some sort was inevitable. It is sad and very unfortunate that there was also loss of a life. Correspondingly, Uber has now suspended autonomous testing in their 4 metro testing markets.
Boris & Natasha - An election surprise to no one, Vlad wins in a landslide capturing 75% of the popular vote. Some say that 60% of the eligible voters participated, which some say is inflated by nearly 20%...or face the same demise as former Russian spies.
Farm Bill - It seems this subject has more on again, off again posturing than anything of late. Just a couple of weeks ago, the main authors and architects were indicating hearings and markups would soon begin and House Ag Committee leaders were ready to release the "chairman's draft" of the new Farm Bill. Last week, duck and cover was the theme. House Chairman Conaway is now delaying work on his committee's bill to see if he can negotiate changes to the food stamp provisions so to gain Democratic support for the bill. This means disagreement exists on how the nutrition title of the Farm Bill should be handled and implemented. Between now and then, there will be much posturing and rumors of proposed language; know that if action and support is needed, you will be advised accordingly and asked to help. That said, both Democrats and Republicans have a stake in getting this done timely for their respective constituents. Read a tid bit here...
Home (& shop) inventory - I've recommended this simple task to all I can, customers and non-customers alike: Please take the time to make a simple inventory of your stuff. Technology today allows for quick, easy photos and/or videos to help inventory your assets of any and all kinds. I liken this to a marketing plan, something is better than nothing at at all...
Kick the can - The ongoing game, budget resolution, of Congress is due to be resolved (or prolonged) with this Friday's looming deadline. The 'fix' for the Section 199A is widely expected to be part of the 2018 omnibus spending bill agreement. If approval is delayed until the return of Congress from their Easter recess, this provision being made retroactive to 1/1 is jeopardized. USDA undersecretary for marketing and regulatory programs, Greg Ibach, said "Federal tax policy should not be picking winners and loser in the marketplace."
Livestock - Heavier dressed weights of hogs are contributing to an expected increase in production for 2018, 5% more than in 2017.
Chinese hog prices have continued lower since mid-2016, suggesting the country's closure of pig farms to comply with stricter environmental regulations has not restricted supply...authorities indicate that hundreds of thousands of hog farms have been removed, a dozen companies have initiated aggressive expansion plans with manure collection and treatment facilities.
Drought conditions have slowed the beef herd expansion. January 1 total beef cow numbers reflected a 2% increase, the largest number since 2008. Yet cattle and calves counted on 1/1/18 had an increase of less than 1% when compared to year ago numbers.
Japan is expected to life a safeguard tariff by 50% to 38.5%, on frozen beef shipments by the end of this month.
I thought $800k for 80% interest in a bull was a steep price. The recent Houston Stock show just out did that - the grand champion and reserve champion steers sold for record amount of $776,000 for the two animals. Now that is an expensive cut of meat!
Grains - My goodness, what difference a little moisture in the forecast makes in the markets! I hope the recent fires and related fire danger across this region does subside. Rain across dry Argentina as well as the parched southern plains, in particular KS, has triggered over $.50 down for KCY, nearly $.40 for CGO, and MSP spring wheat market is down 2 bits in the past 3 days - painful to say the least. An interesting note to me, the value lost on the cash side has been replaced by an increased basis.
An article on wheat fundamentals for your reading pleasure...
If you've not already heard the recent interview of NAWG CEO Chandler Goule, by Tyne Morgan...
In 2017 Mexico imported 583,000mt of corn from Brazil, a mere 1000 percent increase from prior years. NAFTA hedge bet perhaps?!?
Three major firms - Allendale, FCStone, Gulke Group are suggesting corn acres to be 1 million to 1.5 million acres less than last year and soybeans acres to be up 2 million in 2018. Yet corn was down and soybeans were up for the week.
Oil - US continued production of shale oil is a significant threat to OPEC on two fronts: according to a Bloomberg article, Asia favors US shale oil;
and a WSJ article predicts the US will overtake Russia as the worlds largest producer of oil in 5 short years.
Equipment - Caterpillar has been investing heavily in China. Read this article that reports on their growth in this market.
Seed vault - Did you know or realize that seed vault is 10 years old? Is trouble brewing in Norway?
Tariff retaliation - The EU has provided a list of targeted agricultural products supplied by the US - cranberries, sweet corn, rice, orange juice, kidney beans, peanut butter, tobacco and whiskey...cranberries account for about 12% of US production, 62% of US production comes from WI. The US is the 3rd largest foreign supplier of orange juice, but just 2.5% of its volume is imported from Brazil.
Weather - Although rain across KS this past weekend sent the markets in virtual free fall, the long term forecast is more of the same, with expectations of the drought to continue...the 105 counties of KS has had drought declaration declared by its Governor Colyer.
NOAA is reporting that weather models suggest a late spring (cool and wet) for the upper Midwest through the eastern corn belt region - La Nina given credit.
In related news, DTN has recently purchased Spensa Technologies, which has Purdue think-tank roots; the company will provide modeling and pest detection technology.
- Dickey County, ND - Wake up folks 96% of North Dakota is in some stage of drought, 80% of South Dakota and large parts of Kansas, Montana, Oklahoma and Texas are also in the same shape. We will all be fine if we get timely rainfall otherwise crop insurance will get a workout.
- Brown County, SD - Weatherman said we'd get over an 1" of rain with the current storm, so far we have .15" and a little snow, it's dry,dry & dry. We have had 8.40 inches of rain in the past 12 months, average would be 19". The local electric co-op was putting in a couple power poles and said the soil is bone dry for 15 feet. Maybe this weather event will help change the tide.
- Nobles County, MN - Record yields again in fall 2017,corn/soy,went to elevator to find out what it would cost me for them to take it,on corn about $1.00 bu.
- 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 home pond is 4 ft low. Now I know that it is early and things can change in a heartbeat, but it was a very dry fall with minimal snow during the winter months, so the trend needs to change. Planning on cutting back about 10 % in planted acres. There are enough marginal acres where the yields vs inputs may, may break even. I can easily forego these and not risk the expense. Why trade dollars and add to the surplus?
- Banner County, NE - Western Nebraska is receiving some much needed moisture. Wheat crop may be OK but have to see after such a cold and dry winter. Price of wheat dropped despite dry conditions in Texas, Oklahoma, Kansas, North Dakota. Buyers gambling on spring moisture?
- Dawson County, NE - Most of our snow gone now. Colder this winter than we have seen in along time, with more snow also. Going into spring with good moisture. More coming this weekend maybe. Seen alfalfa being broke out yesterday, guys are anxious to start strip tilling in the corn fields. Volunteer corn will be a big issue with all the corn that blew off last fall.
Until next time...I wish all a safe spring season.
“The farmer is the only man in our economy who buys everything at retail,
sells everything at wholesale, and pays the freight both ways” ~President John F. Kennedy
McGregor Risk Management Services, LLC
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