A Weekly Update from the Red River Farm Network
Monday, January 11, 2021
Information is a Commodity – We are living in a fast-changing world. That is certainly the situation in politics today. With COVID, we’ve seen an acceleration in the adoption of technology. Markets are also extremely volatile. For information you can trust during this chaotic time, count on the Red River Farm Network. RRFN’s team of journalists provide accurate, timely information for the business of agriculture. You’ll find some of our latest stories in this edition of FarmNetNews.
Quality Loss Program Available for ’18 and ’19 Crop Years – Signup is underway for the USDA’s Quality Loss Adjustment Program. Farmers have been waiting for more than a year on this relief program, which is due to crop quality losses in 2018 and 2019. USDA Undersecretary Bill Northey said the amount of losses is still an unknown. “This is unique; it is a challenging program to put together and come up with a different way and kind of survey folks first to understand (the losses) rather than paying folks right out of the box.” Farm Service Agency Administrator Richard Fordyce said USDA has experience in dealing with yield losses, but it has been more difficult to evaluate quality losses. Enrollment for the Quality Loss Adjustment Program will continue through March 5.
Hoeven Responds to Quality Loss Adjustment Program – An additional $1.5 billion was included in the latest omnibus spending package to fund the remaining half of the WHIP+ program 2019 payments and the Quality Loss Adjustment Program. North Dakota Senator John Hoeven said lawmakers worked hard to pass the legislation. “We’re pleased the USDA is getting this out for sign-up. Producers will get 70 percent of their proven quality loss, very important assistance for our farmers.”
Formula Announced for QLA Payments – Payments for the Quality Loss Adjustment program are based on formulas for each crop and the loss documentation that farmers submit. Calculations are made based on a producer’s individual loss or on the county average loss. There are also payment limits for the program. “We are using the same limitation rules as we use for ARC and PLC and other disaster programs,” said Steve Peterson, associate administrator, FSA. “The payment limitation is $125,000 per year. If a farmer suffers a loss in 2018 and 2019, they could receive up to that amount, not to exceed $250,000 through the entire program.” All farmers receiving QLA payments must purchase crop insurance or NAP coverage for the next two available crop years. Click here for more payment formula details.
Patience Needed During Sign-Up Process – When North Dakota farmers apply for the Quality Loss Adjustment program, FSA State Executive Director Brad Thykeson says they should connect with their local FSA office via e-mail, if possible. “If there’s an e-mail, we’ll have a time, a date and we’ll get a list together. County offices need some grace time to get familiar with the software.” Thykeson says the program won’t fix all of the shortfalls from 2018 and 2019. “Work with county offices if you feel like you’ve been shorted on the marketplace. There are some commodities that don’t have an issue. I think a lot of soybeans in 2019 didn’t have a grade factor, but wheat, corn and sunflowers may. Work with your county offices to find out what the exact eligible crops are.” County FSA offices in North Dakota continue to process 2018 and 2019 WHIP+ program applications and will prioritize those before moving onto the QLA program.
Ag CEO Council Meets With Biden Transition Teams – The Ag CEO Council, which is made up of national farm organization leaders, has met with the Biden Administration’s EPA transition team. National Association of Wheat Growers CEO Chandler Goule says that included an opportunity to sit down with the incoming EPA Administrator Michael Regan. The importance of science-based decisions was emphasized. “We also talked about WOTUS, knowing that is a major issue for growers, especially for those in the Northern Plains,” said Goule. “We have been trying to meet with as many transition teams for each agency as possible. Not only to introduce ourselves, we want to make sure they can hit the ground running and agriculture can be part of the solution.”
A Change Up in the Political Landscape in Washington D.C. – For the first time in 10 years, one party controls the White House and both chambers of Congress. “Effectively, it’s a 50/50 situation on every vote in the Senate and in the House, Democrats have a five seat margin,” says Randy Russell, president, The Russell Group. “I think this will make things easier for the Biden administration to get cabinet officials approved.” With Democrats controling the agenda, climate change will be a big priority. “(Senate Agriculture Committee Chair Debbie) Stabenow will drive the progress and she’s an advocate of reauthorizing the child nutrition bill and school breakfast programs. I suspect we’ll see her move that bipartisan legislation early on.” Russell anticipates the Senate to start naming committees by early February. The House should be sooner, with agriculture committee members starting to be named this week.
What’s Hot, What’s Not in the Markets – Multi-year highs are being seen in the grain markets. Advance Trading Risk Management Advisor Tommy Grisafi offers insight into that bump with this week’s edition of What’s Hot, What’s Not in the Markets. A volatile political environment and interest rates are also addressed in this week’s update.
In the Courts to Challenge ‘Unreasonable’ EPA Delays – A coalition of biofuel and agricultural trade groups has filed a legal brief, saying EPA’s improper waiver of 500 million gallons of biofuels in the 2016 renewable volume obligation needs to be addressed. In 2017, the court ruled agency needed to reconsider the 2016 RVO and restore the lost RIN gallons. The coalition, which includes Growth Energy, the Renewable Fuels Association, National Corn Growers Association and the National Farmers Union, emphasizes the EPA’s delay has been “unreasonable.”
Climate Change Policy Debate Could Begin by Spring – Climate change will get attention in the first 100 days of the Biden presidency. “We fear a little bit what’s in front of us legislatively, but at the same time, we know when agriculture is collaborating things will come out OK for the American farmer,” said Chuck Conner, CEO, National Council of Farmer Cooperatives. “We’re anxious to get into the public policy debate coming as early as spring.” NCFC is part of the Food and Agriculture Climate Alliance, an organization of farm and environmental groups that put together climate change policy recommendations. Conner said there is support for farmers and retailers to work together on sustainability. Retailers may pay growers more for their products, but on-farm sustainability isn’t a one size fits all. Conner was part of a climate change panel at the Potato Expo.
Another Farmers to Family Food Box Program Begins Soon – USDA is launching its fifth Farmers to Families Food Box program. The agency will purchase $1.5 billion worth of food. With this round, seafood and cheeses, like Parmesan, Gouda and Romano are eligible. Funds for this food box program were allocated in the latest COVID relief bill. Deliveries will begin at the end of January.
PPP Enrollment Resumes – The Small Business Administration is now accepting applications for the next round of the Paycheck Protection Program. Farmers and small business owners can apply for these forgivable loans. There are differences in the eligibility requirements for this round.
Duvall Kicks Off AFBF Virtual Convention – During his address during the first general session, American Farm Bureau Federation President Zippy Duvall highlighted the policy wins over the past four years. Those achievements include tax reform and the rewrite of the Waters of the United States rule. Duvall said Farm Bureau is already working with the new Biden administration. “Farm Bureau has built strong, productive relationships with every administration and every Congress and we’re already building those relationships again.” Climate change is expected to get attention from the White House and the new Congress. Duvall says agriculture already has a good story to tell.
Changes Anticipated for Environmental Regulations – South Dakota Farm Bureau President Scott VanderWal says the new Biden Administration will likely take a different approach on environmental issues, including another whack at the Waters of the United States rule. “Another thing we started working on is changing some of the ways NRCS works as far as Swampbuster and wetlands determinations. That’s a huge issue for South Dakota, North Dakota and parts of Minnesota and there’s some question marks on where that will go.” VanderWal, who is the AFBF vice president, is keeping an eye on the changes in the administration. “I think President-elect Biden is pretty moderate, but he’s getting pushed from people on the far left and they have ideas like the Green New Deal which would be bad for agriculture.”
Minnesota Delegates Ready for Sessions at AFBF Convention – Minnesota Farm Bureau Federation President Kevin Paap is anxious for this week’s delegate session at the American Farm Bureau Federation annual convention. “There’s a lot of important issues in policy right now. We’re not that far away from a new farm bill. Trade and renewable fuels are always important and we’ll talk about that. We’ll also discuss what agriculture can do for the greenhouse gas reductions as we look at climate change. That’s what Minnesota is bringing to the table.” Regional caucus meetings will be held on Wednesday and the voting delegates meet on Thursday.
U.S. Potato Industry Gets China Phase One Trade Update – The U.S. and China phase one trade deal was the big news at the 2020 Potato Expo. One year later, Bryant Christie Vice President of Global Access Matthew Lantz said the relationship is even more challenging. “There will continue to be more aggressive confrontational relations with China on trade issues,” said Lantz. “During last year’s expo, there was a commitment to open the fresh potato market, which we succeeded at doing in March, though we haven’t shipped yet. Although there was no retaliatory tariff relief, the deal offered an option to get out of some of those tariffs. We were successful doing that.” Lantz said any new phases of a trade deal with China isn’t expected in the near-term. The Biden administration is prioritizing COVID-19. “The Trump tariffs will be also be left on while we figure this out.” Trade and potato exports were discussed during the virtual Potato Expo.
A Look at the U.S. and China Relationship Through a Bigger Lens – The Potato Business Summit kicked off with a look at the farm economy. The relationship between the U.S. and China is one focus for Rabobank Vice President of Food and Agribusiness Research Stephen Nicholson. The economist doesn’t expect China to reach the first-year purchasing goal, yet they continue to buy. “We need to be thinking about China in a longer lens than just the phase one trade deal. China needs a lot of stuff. They’re rebuilding stocks, hog herds and this is a multi-year event. Looking at this from the view of the commodity markets, this is positive. This is a two or three year event.”
Debt-to-Asset Ratio is Increasing – Farm Credit Council CEO Todd Van Hoose told Potato Expo attendees farmer/borrower stress is starting to stabilize. “The rally in the commodity markets and getting past some of the worst parts of the pandemic are starting to show. In addition, a whole lot of government money went into farmer’s pockets,” said Van Hoose. “Right now, we’re in relatively good times, but farm leverage is increasing.” The average debt-to-asset ratio for U.S. farmers is climbing. “It’s been in a steady increase since 2012. We cracked 14 percent in 2020 and it will probably move higher in 2021, but that ratio is low compared to other industries. There’s still lots of agricultural assets out there not leveraged at all.” Van Hoose also discussed COVID, the new Congress and policy priorities for a new administration.
Consumers Gravitate Toward Potatoes During Pandemic – The shift from foodservice to retail during COVID had an impact on fresh potato demand. Consumers gravitated toward fresh potatoes due to ease and versatility. The vegetable could also be a source of comfort food. Now, Potatoes USA Chief Marketing Officer John Toaspern says consumers are circling back to focusing on health. “The new dietary guidelines are an opportunity for all of us to take advantage of those core recommendations to increase fruit and vegetable consumption. How do we get potatoes to get understood as a vegetable, healthy and increasing consumption?” As the pandemic continues, Fresh Center of Excellence Principal Jonna Parker says it will be important to communicate about enhancing qualities of the potato along with the continued ease of use.
Fresh Red Potato Prices and Supplies are Stable – U.S. fresh red potato supplies for 2020-2021 are forecast at 12.4 million hundredweight. The drier harvest in portions of the Red River Valley impacted supply. “The Red River Valley production is up five percent compared to last year and some may think this could be more following the 2019 disaster, but there were also challenges at the end of the 2020 harvest,” said Mark Klompien, CEO, United Potato Growers of America. “Big Lake, Minnesota production was up 30 percent.” Fresh red potato prices are stable. “We really believe there’s a higher use of marketing information out there. Grower collaboration happening in the red sector and all of those things are leading to a more stable pricing and supply situation,” said Klompien. “The current pricing using the 10/5 pound bale is in the $13 range and the Red River Valley may be slightly below that.” Watch the presentation.
A Variable Harvest for Potato Growers in Red River Valley – Fresh potato growers in the Red River Valley had a variable harvest in 2020. In the northern part of the valley, farmers had a good harvest and south of Grand Forks, North Dakota, potato growers struggled. “There were potatoes left in the ground not because of excess water this year, but too little water,” said Donavon Johnson, president, Northern Plains Potato Growers Association. “Overall, harvest was much better this year than last year. We estimate there’s about 1,700 acres left in the ground this year, significantly less than last year.” The variable harvest was part of the discussion at the virtual Potato Expo. Johnson attended the event and was closely watching the farm policy discussions.
A Shorter Potato Shipping Season in Red River Valley – Fresh potato packing sheds will be done shipping potatoes earlier than usual. For East Grand Forks, Minnesota-based Folson Farms, the season is expected to wrap up in early April; an average shipping season goes through May. “We definitely have less supplies for the market this year,” says Casey Folson, sales and marketing manager, Folson Farms. “I know there are other growers with similar circumstances. There are less red potatoes in the Red River Valley this year.” The demand for fresh red and yellow potatoes remain strong, but Folson says the marketing focus for this season has shifted. “Putting stuff in packages for retail seems to be where consumer demand is at right now with the lack of foodservice business.”
Burgum Reflects on Historic Challenges Faced by North Dakotans – North Dakota Governor Doug Burgum reflected on the substantial progress and historic challenges of the past year in the 2021 State of the State Address. While addressing a joint session of the 67th North Dakota Legislative Assembly, Governor Burgum called for bold action and investments in infrastructure to build a strong future for the 2021-23 biennium. “We have the opportunity today to take advantage of low interest rates,” said Burgum. “The beauty of the $1.25 billion bonding proposal is that it doesn’t raise taxes even one single dollar.” Specifically, Burgum cited the challenging conditions, both economically and environmentally, farmers and ranchers faced in 2020. A “flock of black swan events” including market crashes, flooding and drought tested their resiliency. To conclude the address, Burgum reminded North Dakotans that global pandemics, like COVID-19, aren’t all doom and gloom. “Yes, pandemics and global economics are extremely complex. But, there is one things we’ve always known. The power of love and forgiveness can disarm and disable the anger that has attempted to divide us.” Watch a video of the address and read the entire transcript.
Grain Buyer Bill Being Heard in Bismarck – The North Dakota House Agriculture Committee is working on legislation to tweak the grain buyer legislation that was enacted two years ago. The new bill is designed to give the North Dakota Department of Agriculture more tools for its oversight of grain dealers and processers. Agriculture Commissioner Doug Goehring spoke in favor of the bill, saying it would put the focus on value rather than volume. “Going to this kind of system looks at the actual business that a company does annually. Whether they are an elevator with 50,000 bushels of capacity or an ethanol producer with 1.5 million bushels of capacity, it no longer matters.” In Thursday’s hearing, legislators also took testimony on a hemp regulatory oversight bill.
NDCGA Seeks an Investment in Roads and Bridges – A bonding bill is expected to come out of the new legislative session in Bismarck. North Dakota Corn Growers Association Executive Director Brenda Elmer says funds are needed for transportation infrastructure. “With the crazy year we had last year with harvest and planting often happening simultaneously, our roads really took a beating, especially the wettest areas.” Elmer says it makes economic sense to make this investment in roads and bridges. “With interest rates lower than inflation, if we delay this, it just makes fiscal sense to do this.”
Two MN Senate Ag Committees Become One – The Minnesota Senate has reconfigured its committees. For agriculture, that means the finance and policy committees have merged. Chairman Torrey Westrom says there were redundancies with the previous system. “A bill might have policy and finance in it and it would go to two different committees made up of mostly the same members, this is a little more efficient.” With the state’s budget deficit, all spending will be scrutinized. Westrom says it will be important to focus on agriculture’s priorities. “New development of market of opportunities for farmers and strong broadband have to be part of our core mission.”
‘Clean Car’ Rule Challenged in Federal Court – The Minnesota Automobile Dealers Association has filed a lawsuit in federal court, saying the Walz Administration does not have the authority to adopt California vehicle emissions standards. The Minnesota Pollution Control Agency is drafting a rule requiring carmakers to have more zero-emissions vehicles in the state, starting in 2025. MADA has asked the Walz Administration to compromise, but said it has no choice but to bring the issue to court.
SD Farmers Union Opposes State Ag Department Merger – The South Dakota Farmers Union opposes the merger of the state’s ag and environment departments. In an op ed, Farmers Union President Doug Sombke says agriculture deserves dedicated resources and a dedicated state department. State lobbyist Mitch Richter says Farmers Union isn’t the only organization opposed. “Dakota Rural Action and Friends of the Big Sioux River are opposed. There are some farm organizations that haven’t come out either way.” South Dakota Governor Kristi Noem will issue an executive order on the merger at the start of the state legislative session. If state lawmakers do not oppose the effort, the order takes effect within 90 days. “There’s only two other states that do this: Alaska and Rhode Island. Alaska has about $40 million in farm economy dollars and Rhode Island has $170 million. South Dakota has $10 billion and this shows it deserves to stand alone.” The South Dakota legislative session begins on Tuesday.
Dry Bean Scene – The Dry Bean Scene airs every Friday at 12:35 p.m. on the Red River Farm Network. This week, farmers were able to resume harvest across much of the dry edible bean growing region. Hope, North Dakota farmer Josh Ihry is working on wrapping up harvest and provides an update. Listen here.
Bullish Expectations for Tomorrow’s January USDA Report – Grain traders continue to position for the January crop report. Progressive Ag Marketing market analyst Brian Strommen says traders have bullish expectations. “On the USDA report day, there’s usually a curve ball somewhere to catch us by surprise. We’ll see what happens on Tuesday. There are lots of thoughts of smaller, tighter stocks and we’ll be watching the adjustments.” Strommen says the weather is also offering some support. “There’s the recent moisture in Russia along with dryness in Argentina and southern Brazil.” The USDA report will be released at 11 a.m. central time on Tuesday.
Funds Holding Long Positions for Corn and Soybean Markets – NAU Country Vice President of Farm Services Rich Morrison thinks the recent buying in the ag markets was all about money flow. “We looked at the Commitment of Traders Report and the funds are holding easily the largest long position they’ve ever held for the corn market this time of the year. For soybeans, they’re holding a bigger long position than they’ve ever held this time of the year. I guess they’re putting all of the chips on one side of the board going into the January USDA report.” Traders are looking for a friendly report. “We typically see major moves in this crop report, whether it’s final production numbers or a change in South America’s numbers. I don’t expect that to be overly bullish, but the demand side of the equation is a big deal.”
Begin Pushing the Pencil for 2021 Crop – As soybean futures get higher and corn futures reach new levels, AgResource Company President Dan Basse says farmers should begin pushing the pencil for the 2021 crop. “Things are starting to look relatively attractive on margins. I would encourage all farmers to push their pencils on costs, look at the opportunity ahead and maybe start making some sales to position themselves for profitability in 2021. The USDA won’t be sending out all of the ad hoc checks as they did in 2020.”
Grain Price Boost Gives Farmers Market Opportunity – The run up in grain prices is giving farmers a chance to market next year’s crop at profitable levels. Utterback Marketing President Bob Utterback says this is the type of market you have to sell into as it’s rising. “Once this thing turns, it could be a sharp correction. It will be difficult for the market to sell on the downside. Seasonally, I have farmers getting started on 2021 sales, but we aren’t going nuts.” The market continues to add weather premium to build a cushion. “It all depends on your assumption of yield and acres. I think the USDA’s seven million soybean acres and corn at 1.7 million acres are sharply growing, but it will be about the yield. All they need is one good rain.”
Snodgrass Closely Watching Dry Conditions – More than 60 percent of the United States is currently covered in some form of drought, including potato growing areas in North Dakota and Minnesota. Nutrien Ag Solutions Atmospheric Scientist Eric Snodgrass says at this point, there’s no solid evidence drought will persist and worsen in the spring. Snowfall is being monitored. “One of the concerns I’ll have moving forward will be to see how much of that drought we eat away this winter. What do the soil moisture values look like through spring in the upper Midwest to understand what conditions to expect in 2021.” Snodgrass was part of the virtual Potato Expo.
Rains in South America Stabilizing the Crop – Brazilian ag consultant Kory Melby says recent rains in Brazil stabilized the soybean crop. “In the last three weeks, we received beneficial rains throughout the country. I’m thinking of increasing my crop estimate a little bit. At the end of the day, it will depend on Rio Grande do Sul.” Conditions in Argentina are complex. “Cordoba did get two to three inches of rain. I see rains on the radar for southern Buenos Aires. There are pockets in western Buenos Aires province and southern Santa Fe province that are in dire need of rain. That is an important pocket. Crop potentials are slipping, I’m hearing a low as 46 or 47 million tons for soy. We started in the low 50s and we’ll see how the next few months play out.”
Beet Stock Snapshot – Last week, 70 American Crystal Sugar Company shares were brokered at an average price just under $3,700 per share. “As share inventory has shrunk, prices on smaller sales have crept up,” said Jayson Menke, broker, Acres & Shares.Stay up to date on the latest numbers here.
Cargill Executive Expects an Exciting Year for Soybeans – In an interview with U.S. Soybean Export Council CEO Jim Sutter, Cargill’s Ag Supply Chain Division Head Joe Stone said he expects an exciting 2021 for soybeans. “I don’t think we’ve hit the top for market prices yet, because of rationing. If the function of the market today is to continue to ration, then prices will likely move higher,” said Stone. “If the La Nina pattern continues and we get into late January and early February dry, the markets may take another step higher.” Stone is eager to see 2021 soybean production. “We’re fortunate we’ll see prices that help farmers be profitable, pay off debt and recapitalize. It’s been a choppy four to five years.” Sutter and Stone were part of a Soy-Suite webinar, presented by USSEC.
Wheat Export Pace Ahead of Last Year and the 5-Year Average – Seven months into the current marketing year, USDA is forecasting U.S. wheat exports will reach 26.8 million metric tons. If realized, it would be two percent more than last year and seven percent more than the five-year average. U.S. Wheat Associates is reporting Hard Red Spring Wheat export sales are approaching 5.8 million metric tons, nine percent ahead of this time last year. The Philippines and Japan are the top two markets for U.S. spring wheat. Durum exports total 590,000 metric tons. That’s 25 percent behind last year’s pace, but 20 percent ahead of the five-year average. Italy is the number one market for U.S. durum.
Wheat to Compete for Acres in Spring – Daniels Trading broker John Payne is expecting wheat to compete for acres next spring. “In my opinion, the big one to watch is Minneapolis spring wheat. That has the potential to really go given the need for acreage. If we have a demand for hard red wheat in this country, that spring wheat price should be higher to get folks to plant wheat instead of soybeans.” A weaker dollar will help spring wheat. “When I started in this business in 2007, Minneapolis was king. It was the strongest high protein contract on the books. The U.S. dollar got stronger, but now that’s starting to change.”
Ethanol and DDG Exports Decline, But Above Year-Ago Levels – U.S. ethanol exports for November decreased ten percent to 113 million gallons. However, this is six percent above year-ago levels for the same time frame. Global year-to-date exports of U.S. ethanol totals 1.2 billion gallons. Shipments to Canada were fractionally lower at 35 million gallons, securing one-third of total U.S. ethanol exports. Brazil re-entered the market with 13 million gallons in sales, the country’s largest U.S. ethanol purchase in seven months. Eight million gallons were exported to China, which is the largest volume seen since March 2018. U.S. exports of dried distillers grains decreased three percent in November to 927,000 metric tons. Total global U.S. exports are 10.1 million metric tons, one percent ahead of last year. Sales in Mexico, Vietnam and South Korea moderated, but increased 151 percent to Turkey with a four-month high of 119,000 metric tons. The bulk of remaining DDGs export sales went to 30 other countries including Canada, Ireland, Colombia and China.
Canola Acreage Steady for ND in 2020 – CHS Lake Region Agriculture Specialist Ron Beneda reviewed the 2020 canola crop for the virtual Lake Region Extension Roundup. Canola acreage remained fairly steady in 2020. “Canola acres in the northwest increased this year and we leveled off acres throughout northeast North Dakota due to the unharvested crop in the spring. As far as the state, the only five counties that didn’t grow canola were in the southeast. Canola has a good presence in North Dakota.” Beneda says there are new insects to be watching for in 2021, along with the usual suspects. “The diamondback moth came into the picture in 2019 and had a large impact in Cavalier county. Armyworm has been an issue. The canola flower midge is new and they found in two years ago in Canada. We don’t know much about it, but there were some found around Langdon.”
Land Values Hold Strong into 2021 – According to the latest Land Values Report from Farmers National Company, sale volumes were up 49 percent during October and November compared to the previous year. Northern Plains farmers are currently buying 90 percent of top-quality farmland coming up for sale. Prices for lower quality cropland are flat. A regional report cites government payments, crop insurance, low interested rates and rising grain prices were all factors in strengthening land values in the last quarter of 2020. Investor interest and farmer demand will continue to drive the land market in 2021.
Ag Economy Barometer Has Slight Increase in December 2020 – Farmer sentiment climbed in December according to the latest Purdue University/CME Group Ag Economy Barometer. Purdue University Ag Economist Jim Mintert says farmer sentiment increased seven points to an index of 174, mainly on the perception that higher grain prices will lead to higher profitability. “If you look underneath the hood, the index of current conditions was up sharply. The rally in crop prices tells you why the index increased so much.” Mintert says there is still a lot of uncertainty about future trade with China. “At the beginning of 2020, roughly 80 percent of the people on the survey said we think it will be resolved in a way that’s beneficial for agriculture. In December, it was only 47 percent. That’s surprising given the strength we’ve seen in exports to China last few months, but I think it indicates uncertainty.” Here’s more barometer results.
Stronger Grain Prices Keep Machinery Costs Firm – The optimism over grain prices is expected to keep machinery costs firm. In a virtual Lake Region Extension Roundup presentation, NDSU Extension agriculture finance specialist Bryon Parman said equipment dealers are expecting steady to firm equipment prices. “About 79 percent are saying a modest one to three percent increase in equipment prices,” said Parman. Land values and rental rates are expected to remain steady. “Land values are an investment decision, whereas cash rents are a cash flow decision. Folks are more reluctant to pay higher dollars for cash rent, but overall, it’s been pretty flat. That was expected.”
Managing Feed Input Costs – The rally in corn and soybeans is putting pressure on the livestock and poultry industries. National Pork Board CEO Bill Even said demand for meat protein will need to be strong to offset the higher feed bill. “Certainly, the folks on the grain side of the equation are pleased to see the higher corn and soybean prices, but it is putting quite a bit of pressure on the feed input costs.”
Biofuels Issue Goes to the Highest Court in the Land – The U.S. Supreme Court will take on a case dealing with the Renewable Fuel Standard and the small refinery waivers. A lower court ruled one year ago the EPA can only grant the small refinery exemptions to facilities that received them continuously since 2010. This issue now comes to the high court. The case is expected to be heard in April.
General CRP Sign-Up Open – General sign-up for the Conservation Reserve Program is open. The program, administered through the Farm Service Agency, provides annual rental rates for land used for conservation. Sign-up is open through February 12.
Weed Seed Could be Introduced by Imported Feed – Palmer amaranth continues to be a threat across the Northern Plains. NDSU Extension Weed Specialist Joe Ikley previously worked at Purdue University. During his presentation on the Lake Region Extension Roundup video series, Ikley showed aggressive Palmer amaranth issues in Indiana hay fields. That could be another way the weed is spread. “We’re pretty dry right now and who knows what it will look like next year. If drought persists and we have to import hay from areas of the country with Palmer amaranth, that is another source of introduction.”
Gowan USA: A Focus on Niche Markets – Dry conditions continue to be a worry for the regional potato industry. “I’d like to see some moisture come through to increase our subsoil moisture,” said Gowan USA Marketing Director Eric McEwen. Gowan’s potato portfolio includes the Badge brand, which is copper-based. “We’re trying to manage the longevity of these products so we don’t get resistance. By throwing Badge in there, it tends to sharpen your fungicide program a little bit so it adds some nice extra protection.” While many companies focus on seed traits, McEwen says Gowan USA focuses on niche markets. Much of that energy is on the major crops outside of the row crops, including potatoes, dry beans and sugarbeets. Gowan USA is a sponsor of the Red River Farm Network coverage of this week’s Potato Expo.
A Fresh Beginning for Potato Growers in 2021 – Many in the potato industry are approaching the new year as a fresh beginning. “COVID impacted the industry so much,” said John Martin, sales representative, Bayer. “A lot of things were learned, acreage was cut back all across the country and we’re hoping to rebound and see brighter things for 2021. We’re cautiously optimistic for the new year.” As growers think ahead for spring, Martin said it’s important to have a good management plan. “Understand what pests or problems you may have and be thinking of that ahead of time. Picking the right seed treatments, insecticides and the early season plant development, all the way through to the tuber initiation. Be it from Velum Prime that goes down at planting time to the early post products.” Hear the story.
Crop Protection Options Available for Potato Growers – Corteva Agriscience Nematicide Leader Matt Garrett attended the virtual Potato Expo last week. “I’ve always been impressed with the learning opportunities available to everyone at the expo,” said Garrett. “The potato industry is very resilient and those farmers are the best of the bunch.” As potato growers prepare for 2021, Garrett asks them to keep in mind the Corteva portfolio of fungicides, insecticides and nematicides. “We have a broad range of fungicides like Dithane. We have insecticides like Transform and Delegate and nematicides like Vydate. Hopefully, later this year, we’ll also have a new nematicide,” said Garrett. “Now more than ever, the quality of the potatoes growing is important. Farmers need good quality to stay in the game and make the most of the opportunities presented.” Hear the story.
Two GMO Corn and Soybean Varieties Approved in China – China is giving its approval to new biotech corn and soybean varieties for import. These varieties are produced by Bayer Crop Science and Syngenta. At this point, China does now allow GMO corn or soybean varieties to be planted, but they can be imported for feed usage.
CropLife Releases Top 100 Ranking – CropLife magazine has released its top 100 ranking of the largest ag retailers in the country. Nutrien Ag Solutions is at the top of the list with more than $1 billion in revenues. Helena Agri-Enterprises and Simplot Grower Solutions are ranked second and third. Wilbur-Ellis, CHS and Agtegra Cooperative are also included in the top ten.
1Q Income Reported by CHS – CHS is reporting net income of nearly $70 million for the first quarter of the fiscal year. That’s down from $178 million in the same quarter last year. The cooperative got a boost from good harvest weather, increasing volumes and margins across its agriculture segment. The global grain sector and feed business also experienced growth. Propane demand was down due to the warm, dry fall. COVID-19 also hurt the CHS refined fuels business.
CN on a Record Shipping Pace – The Canadian National Railway set shipping records for Canadian grain in the first ten months of the year. For the first ten months of the crop year, CN moved 14.5 million tons of grain. That’s up 15 percent from the previous record pace. CN attributes the increase to its investment in track, locomotives and railcars, including 1,500 new high-capacity grain hopper cars.
Virtual Small Grains Update Meeting to Be Held Tomorrow – On Tuesday, there will be a virtual 2021 Small Grains Update Meeting. The meeting will focus on farm policy, wheat variety selection and a look at the grain markets. Minnesota Wheat Executive Director Charlie Vogel says farm profitability is top of mind right now for local producers. “Producers are looking at the markets, trying to take advantage of marketing strategies and risk management. They’re putting pencil to paper in figuring out what to grow next year that will give them the best chance at farm profitability. There will be great information in this meeting on how wheat may fit into that portfolio.” The meeting begins at 8:30 a.m. and wraps up at noon. Register for the event.
SD Pork Congress Starts on Wednesday – The South Dakota Pork Congress will be held this week in Sioux Falls. Executive Director Glenn Muller says parts of the event will also be live-streamed on Facebook and meetings will be available on Zoom. “If members want input in our board meeting and they don’t feel comfortable attending in person, call our office and we’ll make sure you get that information.” Presenters in the two-day event will look at COVID’s impact on the pork industry and foreign animal disease preparedness. “(Market analyst) Steve Meyer will give us an economic update and perspective on how the pork industry could bounce back from COVID and a look at economics for the upcoming year.” Download the schedule.
A Strategic Partnership for Two Grand Forks Ag Firms – The owners of Resource Auction and The Farm Agency have announced a strategic partnership. Resource Auction is run by Dennis Biliske and specializes in sales of agriculture and construction equipment. The Farm Agency is owned and managed by David Gorder and Annie Gorder and focuses on farmland sales and management. In addition to their office in Grand Forks, the two companies plan to open an office in Cavalier, North Dakota later this year.
CLAAS Leader Passes – The longtime managing director and chairman at CLAAS has passed away. Helmet Claas was 94 years old and considered a global leader in the ag machinery business.
Ethington Begins New Year at Corteva Agriscience – Corteva Agriscience has named Sam Ethington as its senior vice president and chief technology officer. Most recently, Ethington was the chief science officer for The Climate Corporation. Ethington succeeds Neal Gutterson, who retired at the end of 2020.
Transitioning from One Administration to Another – Agriculture Secretary Sonny Perdue has named the individuals at USDA who will serve in the acting capacity after January 20 and until a successor is appointed by the Biden Administration. Trade counsel Jason Hafemeister has been appointed as the Acting Deputy Under Secretary for Trade and Foreign Agricultural Affairs. The current acting chief for NRCS, Kevin Norton, becomes the Acting Deputy Under Secretary for Farm Production and Conservation. FSA Associate Administrator Steve Peterson will serve as the Acting Administrator for the same agency. Risk Management Agency Associate Administrator Richard Flournoy will oversee RMA during the interim. The complete list can be found online.
Minnesota Beef Update – It’s a new year, and the Minnesota Beef Council is letting beef producers know how checkoff dollars are being put to work. Find out more from Director of Industry Relations Royalee Rhoads in the latest Minnesota Beef Update.
Rowe Joins COVID-19 Response Team – Courtney Rowe has been named to President-elect Biden’s White House COVID-19 Response team, serving as the director of strategic communications and engagement. Rowe previously served as a special assistant and director of message planning in the Obama White House. Rowe also spent time as Ag Secretary Tom Vilsack’s press secretary and as the communications director for the Senate Agriculture Committee.
Fischbach Fills Key Staff Positions – Minnesota Representative Michelle Fischbach has named the staff for her Washington, D.C. office. Emily Hytha will be the deputy chief of staff. Hytha previously worked as the communications director for the House Agriculture Committee Ranking Member Mike Conaway. Nick Lunneborg previously was on Minnesota Representative Tom Emmer’s staff and will be Fischbach’s new legislative director. Jake Schneider will be the press secretary. Schneider was the deputy director of rapid response for the Trump campaign.
A New Hire for NDSA – Medina, North Dakota native Cierra Dockter has been named the special projects director for the North Dakota Stockmen’s Association. Dockter is a graduate of North Dakota State University and previously worked as a marketing and communications intern for the North Dakota Soybean Growers Association and as a veterinary assistant for the Steele Veterinary Clinic.
Visser Speaks for North Dakota in YF&R Contest – Reeder, North Dakota farmer Sheridan Visser is representing NDFB in the American Farm Bureau Federation Discussion Meet. “It is very special to me to have this opportunity to speak for rural North Dakota on a national platform. Our agriculture looks so much different than the rest of the United States and I think we have a unique perspective to bring to the table.” The topics being addressed in the Discussion Meet competition include international trade and broadband access.
ND Farmer Selected for AFBF P&E Committee – Sterling, North Dakota farmer Heather Lang has been appointed to the American Farm Bureau Federation Promotion and Education Committee. Lang is one of ten individuals appointed to the P&E Committee.
Last Week’s Trivia- Kennebec, Yukon Gold and Norlan are potato varieties. Fingerlings are a type of potato. Hannah Barrett of Central Lakes College Ag and Energy Center tops the spud trivia contest. Keith Rekow of Dairyland Seed, Ramsey County farmer Paul Becker, former University of Minnesota Animal Sciences Department head Jim Linn and Mandy Kvale of Farm Credit Services of Mandan earn runner-up honors. The ‘first 20’ rounds out with Al Wimpfeimer of Simplot Grower Solutions, Brian Rydlund of CHS Hedging, Randy Knudsvig of First State Bank, Ray Albrecht of Cargill, Stephanie Larson of Rose-Oak British Whites, Jim Altringer of CHS Dakota Plains Ag, Martin Hochhalter of Meridian Seeds, Pete Carson of Carson Farms, David Stewart of United Valley Bank, Dave Gehrtz of Proseed, Kevin Praska of Stone’s Mobile Radio, Pisek farmer Ernie Barta, Steve Rommereim of the South Dakota Pork Producers Council, Mark Haugland of Bayer, potato farmer extraordinaire Justin Dagen and Crookston farmer Ron Lanctot.
This Week’s Trivia- Garth Brooks has a song that begins with the lyrics ‘blame it on my roots, I showed up in boots and ruined your black tie affair.’ What is the name of that 1990 song? Send your answer to firstname.lastname@example.org.
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FarmNetNews is a production of the Red River Farm Network. RRFN is based in Grand Forks, North Dakota and provides news to farmers and ranchers across Minnesota, North Dakota and South Dakota.