Grains
11Dec

U.S. Beef Exports Remain at Record Pace

U.S. Beef Exports Still Red-Hot; Pork Exports Slightly Below Year-Ago Level; Lamb Exports Trend Higher U.S. beef exports remained on a record-shattering value pace in October, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). October pork exports trended seasonally higher compared to recent months but were still below the results posted in October 2017. Lamb export volume in October more than doubled year-over-year, while value increased nearly 50 percent. October beef exports totaled 117,838 metric tons (mt), up 6 percent from a year ago, valued at $727.4 million – up 10 percent and the second-highest monthly total on record. For January through October, beef exports totaled 1.13 million mt, up 9 percent year-over-year, while value was up 17 percent to $6.92 billion. For beef muscle cuts only, exports increased 12 percent in volume (867,714 mt) and 19 percent in value ($6.19 billion). Exports accounted for 13 percent of total beef production in October, which was steady with last year, and 11.6 percent for muscle cuts only (down slightly). For January through October, exports accounted for 13.5 percent of total production and 11.1 percent for muscle cuts – up from 12.8 percent and 10.2 percent, respectively, last year. Beef export value equated to $317.53 per head of fed slaughter in October, up 5 percent from a year ago. For January through October, the per-head average was up 15 percent to $320.50. “Demand for U.S. beef continues to climb in nearly every region of the world, with annual records already falling in some markets,” said Dan Halstrom, USMEF president and CEO. “Per-head export value will also easily set a new record in 2018, which illustrates the strong returns exports are delivering for cattle producers and for the entire supply chain.” Halstrom added that upcoming trade negotiations with Japan are critical for the U.S. pork and beef industries, as all major competitors in the Japanese market will soon benefit from significant tariff reductions. USMEF, along with producers, exporters and other industry organizations submitted comments to the Office of the U.S. Trade Representative (USTR) underscoring the importance and urgency of these negotiations and will convey these points again in USTR’s Dec. 10 public hearing. New value records for U.S. beef in Korea, Taiwan, the Philippines Beef exports to South Korea, which had already set a new annual value record through September, remained on a torrid pace as October exports reached 20,171 mt (up 17 percent from a year ago) valued at $153.1 million (up 25 percent). January-October exports were up 35 percent in volume (200,666 mt) and 47 percent in value ($1.44 billion). These results included a 21 percent increase in chilled beef exports to 44,440 mt, valued at $431 million (up 31 percent). While Korea’s imports from Australia and New Zealand have also edged higher in 2018, U.S. beef’s market share has increased sharply, jumping from 49 to 53 percent. October beef exports to leading market Japan were up 12 percent from a year ago in volume (26,954 mt) and 13 percent higher in value ($166.8 million). For January through October, exports to Japan were up 7 percent from a year ago in volume (279,825 mt) while value increased 10 percent to $1.76 billion. Chilled beef exports to Japan were down 1 percent to 123,712 mt, but value increased 8 percent to $990 million. For January through October, other highlights for U.S. beef exports include: Beef exports to Taiwan were up 34 percent from a year ago in volume (49,135 mt), while value reached $455.3 million – up 36 percent and already easily surpassing last year’s annual record of $409.7 million. Chilled exports to Taiwan were up 30 percent in volume (19,878 mt) and 35 percent in value ($249 million), as the United States captured more than 75 percent of Taiwan’s chilled beef market – the highest market share of any Asian destination. Exports to the Philippines soared 29 percent in volume to 14,751 mt and reached $72.4 million in value – up 35 percent and setting a new annual record. Solid growth in Vietnam also helped push beef exports to the ASEAN region 14 percent ahead of last year’s pace in volume (39,719 mt) and 26 percent higher in value ($218.1 million). Exports to Mexico were up 1 percent from a year ago in volume (199,003 mt) and 8 percent higher in value ($879.2 million). Beef muscle cut exports to Mexico have shown particularly strong momentum in 2018, increasing 8 percent in volume (118,177 mt) and 11 percent in value ($691.6 million). Although October volume trended lower, January-October exports to China/Hong Kong were still 4 percent ahead of last year’s pace in volume (102,545 mt) and 24 percent higher in value ($823.5 million). This included exports to China of 5,677 mt valued at $48.6 million. Growth in the Dominican Republic, Jamaica and the Bahamas contributed to a 9 percent increase in the Caribbean region as exports reached 21,455 mt. Value was up 4 percent to $135.4 million. Led by strong growth in Costa Rica, Guatemala, Panama, El Salvador and Nicaragua, beef exports to Central America increased 18 percent year-over-year in volume (11,923 mt) and 14 percent in value ($64.6 million).
By Grains, Livestock
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10Dec

Crop Insurance Deadline Extended Due To Delayed Harvest

Farmers across the country have struggled with delayed harvest. This week USDA announced the Risk Management Agency (RMA) will provide flexibility for farmers who have been unable to complete harvest prior to December 10, the end date for insurance policies covering most spring-planted crops like including corn and soybeans. Sen. John Hoeven ( X – N.D.), chairman of the Senate Agriculture Appropriations Committee and a member of the Senate Agriculture Committee spoke with Agriculture Secretary Sonny Perdue last month and then sent a letter to the RMA, “urging them to issue guidance to farmers, insurance companies and loss adjustors on properly processing delayed crops and filing claims as harvest continues past the deadline.” “Our farmers need to know that their insurance policies will cover them when facing long delays in harvest,” said Hoeven. “We appreciate Secretary Perdue, Under Secretary (Bill) Northey and RMA Administrator (Martin) Barbre for working with us to issue this guidance prior to the December 10th deadline. Doing so provides much-needed certainty for our agriculture producers as they work through bad weather and difficult conditions to bring this year’s crop out of the field.” North Dakota is one of many states where farmers have abandoned harvest for the time being due to excessive moisture and snowy conditions. Hoeven’s office says that at the end of November there were 1 million acres of corn and 500,000 acres of soybeans left unharvested in North Dakota alone. “I appreciate Chairman Hoeven’s focus on the needs of our farmers and his efforts to get this guidance to them so they can continue to farm even after bad weather hurts their operations,” said USDA Farm Production and Conservation Under Secretary Bill Northey. Under RMA’s guidance, approved insurance providers may allow additional time to harvest when the following conditions are met: Farmers give timely notice of loss to their crop insurance agent; The approved insurance provider determines and documents that the delay in harvest was due to an insured cause of loss; Farmers demonstrate that harvest was not possible due to insured causes; and The delay in harvest was not due to a lack of sufficient equipment or manpower to harvest the crop by the end of the insurance period.
By Grains, Livestock, Weather
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07Dec

After-Harvest Questions

Now is the time to grade your financial success and start planning for the next crop cycle “Just as the combine gives you absolute production yield, an office-centric mind will give you absolute profitability yield,” explains Chris Barron, president of Carson and Barron Farms in Rowley, Iowa. Start planning for a profitable 2019. Were you on budget for the year? If not, why? Calculate each expense in terms of cost per bushel, says Barron, also a financial consultant for Ag View Solutions. “This helps you understand the value of incremental changes. You might assume an expense is significantly higher this year when it only represents a difference of 2¢ or 3¢ per bushel.” How close were your income and yield projections? Were variances from your income expectations attributed to prices or yields? Analyze and document the reasons, Arrington says. If the answer is yields, was it a one-time event or the start of a new yield trend? What is my cost of storing grain? Many farmers are holding more grain than an average year, says Kala Jenkins, agriculture consultant with K•Coe Isom. “Know what your cost is to carry that grain,” she says. “Then you can make sure you are truly earning more money by storing it.” Know your break-even costs and have a grain marketing plan in place. Can you pay off your annual operating lines, annual debt payments and other loans? If not, how short will you be? “It is probably best to address this with your primary banker sooner rather than later,” Arrington says. “If addressed quickly you can probably work hand in hand with your banker to create a workable restructuring deal.” Did all components of my operation make money? Analyze the expenses and income for each profit center, Barron suggests. “This is critical to determine which parts of your business are performing and which ones are lagging.” Where can I shave production costs? We’ve been encouraging farmers to look at making a 5% cut on all expenses, Jenkins says. “Even small cuts can really help your bottom line. Look closely at all of your variable costs. Just be sure you’re identifying places to trim that don’t reduce your productivity.” How will next year be different? Will you need to change some aspects of your operation to be on top of your game for next year? “If you know you will need to make land improvements, replace equipment or make large but essential repairs, go ahead and talk to your banker about it,” Arrington says. “Start running the numbers on how the changes could possibly positively impact your operation and decide if the changes will pay for themselves.” Also, use this time to explore diversifying your operation. “What can you change today to match the marketplace?” Jenkins says. A few options to consider are solar projects, conservation easements, a livestock enterprise or food-grade commodities. “Evaluate if a new enterprise makes sense and money,” she adds.
By Grains
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07Dec

Work Goes on For USMCA

Negotiations are still going on over the new USMCA agreement. United States Trade Representative Robert Lighthizer confirmed talks with Mexico and Canada about United States metal tariffs were not going to pause. He said they were continuing this week in an effort to "come to a conclusion before long". President Trump, along with Canadian Prime Minister Justin Trudeau and outgoing Mexican President Enrique Pena Nieto signed the U.S.-Mexico-Canada Agreement at the G20 Summit in Buenos Aires last week. It will replace the North American Free Trade Agreement. It still must be approved by the legislatures of all three countries. House Democratic leader Nancy Pelosi was set to meet with Lighthizer on Thursday to talk about the deal. Pelosi said while the plan has good features, she said they don't matter without enforcement. She wants to make sure there are labor and environmental provisions in the plan. She did not say if she thought the deal could get passed yet.
By Grains
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29Nov

President Trump Expects to Put More Tariffs on Imports From China

The President says he expects to put more tariffs on imports from China. The President also told "The Wall Street Journal" in an interview that is was "highly unlikely" that he would accept Bejing's request to hold off on boosting tariff levels on $200 billion worth of Chinese goods up to 25%. President Trump and Chinese President Xi Jinping are scheduled to meet at the G20 Summit in Argentina later this week. The President says he still feels that a deal could happen, but says China has to treat the U.S. fairly, which he says they haven't been. China said on Tuesday it hopes to work with the U.S. towards a "positive outcome" at the meetings that will take place Friday and Saturday in Buenos Aires. China's foreign ministry spokesperson says the economic working groups from the two sides are in communication ahead of those meetings.
By Grains, Livestock
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29Nov

Breaking News: Statement Released on Farm Bill

House and Senate Agriculture Committee Chairmen Mike Conaway (R-Texas) and Pat Roberts (R- Kan.) and Ranking Members Collin Peterson (D-Minn.) and Debbie Stabenow (D-Mich.) made the following announcement today on the state of 2018 Farm Bill negotiations: “We’re pleased to announce that we’ve reached an agreement in principle on the 2018 Farm Bill. We are working to finalize legal and report language as well as CBO scores, but we still have more work to do. We are committed to delivering a new farm bill to America as quickly as possible.”
By Grains, Livestock
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28Nov

Trump's Tariff Threats Strike a Tone Before Meeting with Xi Jinping

President Donald Trump says he’ll likely push forward with plans to increase tariffs on $200 billion of Chinese goods, reports Jim Wiesemeyer of ProFarmer. In addition, President Trump indicated he would also slap duties on all remaining imports from the Asian nation if negotiations with China’s leader Xi Jinping fail to produce a trade deal later this week at the Group of 20 meeting in Argentina that starts Nov. 30. In an interview with the Wall Street Journal, Trump says he’s prepared to impose tariffs on a final batch of $267 billion of Chinese shipments if he can’t make a deal with Jinping. The rate could be either 10% or 25%, Trump says. “The only deal would be China has to open up their country to competition from the United States,” President Trump says. “As far as other countries are concerned, that’s up to them.” Wiesemeyer reports that late Monday while departing for a campaign-style rally in Mississippi, President Trump says a China deal "could happen." But any deal would have to address key issues, he notes. Duties could be placed on imports of Apple products, Wiesemeyer reports. President Trump indicated that a level of 10 percent on such items is a mark "people could stand very easily." CNBC reports that Apple stock was down nearly 2% in after-hours trading. "Trump's comments strike a less-than-positive tone for the session with China's Xi Jinping and would suggest that hopes for an agreement could be dashed," Wiesemeyer says. "However, few have expected an overall agreement would be reached between the two leaders, but rather some accord on a framework deal that would pave the way for additional negotiations on key trade issues.”
By Grains, Livestock
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28Nov

57% Of Growers Are Storing Their Grain Unpriced. But There's A Reason.

While 2018 corn and soybean crops are being harvested at record high yields, prices are still stuck in the basement. That fact is weighing on farmers and reflected in the latest Farm Journal Pulse Survey, conducted earlier this week. In the survey, Farm Journal asked farmers what their primary marketing plan is for this year’s crops. Of the 672 farmers who responded, 44% of them (294) say they plan to store their crop unpriced on the farm. An additional 13% is storing grain unpriced, off the farm. Basically, farmers are deciding to do nothing for now, says Chip Flory, Farm Journal Economist and Host of AgriTalk and AgriTalk After the Bell. “That’s not always a bad decision, as long as they’re consciously not doing anything with the crop--that they’re not simply procrastinating,” he says. Recent improvements in trade agreements between the U.S., Mexico and Canada, and also South Korea, are main drivers for farmers’ decisions to delay marketing. Plus, there is the potential for more trade agreements, Flory notes. “We’re also going to be negotiating a trade agreement with Japan,” he predicts. “The goal, Sonny Perdue told me, is to have a TPP-plus (Trans Pacific Partnership) type agreement. India could be next. These could be good templates for trade agreements moving forward.” The recent trade momentum means many farmers are hoping they can wait out sluggish prices until they improve. “There’s going to be some of that ‘bin it and forget it’ mentality this year, because farmers anticipate this market is going to recover, that we’ll see some price improvement in the months ahead, and they’ll be able to market for a profit in 2019,” he says. “They’re waiting on prices to get back to break-even.”
By Grains
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19Nov

War of Words Over U.S.-China Trade Issues

China's foreign ministry is blaming the U.S. for ruining the "harmonious atmosphere" at a meeting of world leaders in Papua New Guinea. For the first time in its 29 years of summits, leaders at the Asia-Pacific Economic Cooperation meeting failed to agree on a joint statement. A spokesperson for the Chinese government said the U.S. was "in a blaze of anger" at the meeting. He said comments made by Vice President Mike Pence, were "unhelpful for all parties to reach consensuses." Pence and China's President Xi Jinping traded barbs in speeches. Pence accused China of intellectual property theft, forced technology transfers, and unfair trading practices. The mood was different on Friday. That's when President Trump said at the White House that China wants to make a deal. He said he had received a response from China to his demands that was largely complete, but the President also said if there isn't a deal he said the U.S. is doing very well, just the way it is right now.
By Grains
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14Nov

U.S. Looks to Expand Trade With Cuba

Cuban and U.S. trade representatives held a conference to explore expanding American agricultural exports to the island nation. Top officials from Cuba's Agricultural Ministry met with a combined U.S. delegation of businessmen and members of Congress to discuss ways to open the Cuban market to exports of American farm products. A potential $1.5 billion market opportunity has been shrinking under the pressure of strained relations between the Trump administration and Cuba. There are also financial restrictions imposed by an American trade embargo. U.S. Republican Congressman Rick Crawford, who was part of the delegation, said the mid-term election results could lead to an opening for the U.S., but only if the new House, with Democrats in charge, takes a bipartisan approach to easing trade restrictions. U.S. businesses once exported hundreds of millions of dollars of soybeans, pork, chicken and other products a year to the island, but have seen their share of agriculture exports shrink to a trickle over the last few years.
By Grains
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