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Farm Progress America, July 26, 2019

Max Armstrong offers a look at the United Nations Food and Agriculture report that shows the trend in world hunger remained unchanged over the past 3 years. And the number of people suffering from hunger has risen with more than 800 million people still undernourished. Max shows the trends that have impacted hardest hit areas including Africa where conflict is a big part of the problem.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: RaihanaAsral/iStock/Getty Images Plus

7 ag stories you might have missed this week - July 26, 2019

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Need a quick catch up on the news? Here are seven ag stories you might have missed this week. 

1. USDA released the details of the 2019 Market Facilitation Program this week. The program has payments of $15 to $150 per acre for non-specialty crops. There are also payments for dairy and hog producers and specialty crop growers. – Farm Futures

2. High-tech firms are using artificial intelligence to help farmers decide when to plant, water, spray and harvest their crops. – Quartz

3. Farmers Union Enterprises claims the U.S. EPA has colluded with the petroleum industry to hold back ethanol. At the heart of the claim is a revolving door between the oil industry and EPA, Congress and other federal agencies. This has allowed the oil industry to write the rules and create the tests comparing ethanol and octane-boosting additives processed from crude oil. – Dakota Farmer

4. U.S. Trade Representative is set to hold face-to-face talks in Shanghai, China, beginning Monday. - Bloomberg

5. A University of Missouri weed scientist is looking for farmers with 60 to 80 acres of weedy soybeans within a 100-mile radius of Columbia, Mo., to test the Seed Terminator. The Australia-based Seed Terminator is a one-pass weed control system designed to reduce the amount of seed put back onto the ground at harvest. – Missouri Ruralist

6. The cows on the Floatingfarm aren’t seasick, those behind the farm say. The Floatingfarm is a Dutch effort to make dairy production and distribution more environmentally sustainable. People can pick up the milk from the Floatingfarm. It is powered by solar energy. Rooftop water is collected. Cows eat waste collected from the city, including grass clippings. – Travel and Leisure

7. New York has passed the Farmworker Fair Labor Practices Act. The new law grants farmworkers one day off a week and allows overtime if farmworkers work more than 60 hours a week. It does not apply to immediate family members. Farmworkers will also be allowed to organize and form unions, but they will not be allowed to strike. – American Agriculturalist

And your bonus.

For the last 13 years, Legacy Preservation has captured the family stories of prominent Nebraskans. The process to create a book might take anywhere from nine months to three years. Most featured families have been from Nebraska, but families from Iowa, North Dakota, Texas, Colorado and Arizona have been featured as well. – Nebraska Farmer

MIDDAY Midwest Digest, July 25, 2019

While it's felt cooler this week, the Upper Midwest will warm up this weekend.

The Big Boy locomotive is drawing crowds across the Midwest during its travels.

Administration officials are feeling more optimistic about the trade talks with China.

The EAA Air Venture in Osh Kosh, Wisconsin, offers more than just airplanes.

Photo: ktsimage/Getty Images

 

 

Cows stay on green pasture; more feeder cattle head to auction

Feeder cattle continue to come of the Flint Hills and Osage grazing areas and there was another good run of heavy weight feeder cattle with lots of steers over 800 lbs. and heifers over 700 lbs. Prices were mostly $2-3 lower but there was some improvement on heifers over 700 lbs., which were lower last week.

Slaughter cow prices improved even though the cow meat prices slipped down lower compared to last week. The price improvement was mostly because of the smaller numbers of cows at the auction barns which is normal this time of the year when pasture conditions are good.

New Zealand grazing systems – Finishing cattle on fodder beet forage

Jim Gibbs Cattle grazing beet fodder

By Jim Gibbs, B.VSC, PhD

In recent years there has been a steady increase in the grass-fed beef market in the U.S., and the premium prices have drawn more producers into this sector of the industry. This has led to a renewed interest in pasture and forage feeding approaches, and it has also led to an increasing awareness of the seasonal limitations of grazing and how this impacts farm productivity.

In New Zealand, there is a long history of pasture and forage feeding as there is no grain production or feedlotting, and with a mild temperate climate, beef production is able to utilize all-season grazing. As a result, to push productivity, sophisticated methods of pasture management have been developed.

However, in any pasture system, seasonal feed quality and supply still impact beef production. In New Zealand, the lower pasture growth in both cold winters and dry summers acts to reduce annual stocking rates and increases the time to slaughter age.

Processor data from over 10 years has shown age at slaughter weight (1,200-1,300-plus pounds) for more than 90% of steers is 26-36 months. For processors, this brings challenges around variability in meat quality and also continuity of supply in low seasons for beef.

Jim GibbsGrazing beet fodder

Over the past decade, a joint project between Lincoln University and a South Island beef operation, Silverstream Beef, developed a novel solution to seasonal feed deficits on beef farms by grazing the forage crop fodder beet.

Fodder beet or mangels (Beta vulgaris subsp vulgaris var. Crassa) is an older cousin of sugar beet, but has different agronomy to drive the grazing requirement for lots of leaf and higher nitrogen content in the bulbs. Spring planted, it is grazed from mid-autumn through winter until late spring.

The forage is strip-grazed directly out of the ground at unrestricted intakes, so there are no harvesting costs nor a need for wide rows. As a result, New Zealand yields are unusually high (>15 U.S. tons dry matter per acre) which provides a low-cost feed (about U.S. $60 per ton dry matter). It is also high value feed, with an energy content similar to cereals and a protein content of 11-13%, which suits beef finishing.

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The Lincoln research, which took place prior to any cattle grazing applications being developed, was the driver for fodder beet use in New Zealand. The plant has been fed for centuries in Europe under a mistaken idea that it was toxic, so must be fed in small amounts. The Lincoln research demonstrated conclusively that the cause of stock illness was simply rumen acidosis as a result of the high sugar content and provided clear and simple guidelines for adaptation that enabled ad libitum intakes to be achieved without harm.

New Zealand systems

As a result, two fodder beet grazing systems are commonly used today for beef finishing. In the first, spring-born weaners at 600 pounds and 6-7 months old are strip-grazed on the forage crop exclusively for 130-150 days from mid-autumn, with weight gains of 2.2 pounds per day. The stocking rate is about 10 per acre on the crop.

Once the spring grass growth is strong, they are then grazed at 3 per acre on pasture for at least 90 days to a slaughter weight of 1,200-1,300 pounds at 14-16 months old, with a carcass yield of 56-58%.

The second beef grazing system uses 18-month-old cattle at 900 pounds, at 10 cattle per acre. They graze the beet crop from late autumn for 90-110 days, then are slaughtered directly off the crop at 1,200-1,300 pounds or above.

As this system only requires the crop acreage, it lends itself to large herds and extreme efficiency within the season, with per-acre carcass outputs of 7,300 pounds per year. As a result, there are now numerous operations with 2,500-5,000 cattle finished annually across New Zealand.

The primary benefit of beet grazing systems is to increase on-farm productivity by providing large yields of high energy feed in summer and autumn to be ‘banked’ for winter and early spring grazing, without seasonal decline in feed quality. This provides for high stocking rates at vulnerable points in the production cycle, while bringing forward the sale of slaughter stock to maintain high carcass quality.

Both these systems lift whole-farm stocking rates significantly, from 1 per acre rising to 4 per acre across the entire production cycle when comparing traditional pasture systems with integrated beet-pasture systems. 

Beet grazing systems have proved practical and profitable, and farmer uptake has been the fastest in New Zealand history for any forage, with 170,000 acres sown annually within 10 years of discovery.

Will it work in the U.S.?

I get asked frequently if beet grazing systems could be profitably used in the U.S. beef industry. In the forage fed sector, my answer is yes.

The limitations to higher productivity of pasture-based beef production on-farm in the U.S. are similar to New Zealand. Therefore, it is likely that various regions in the U.S. could use these beet grazing systems as well. Where there are winters suitable for grazing, adequate water for the forage to achieve baseline yields, and a significant pasture-based beef industry, fodder beet grazing systems are suitable for use.

The use of beet grazing in the New Zealand manner has obvious synergies with the U.S. forage-fed beef market, and the Southeast and Northwest states with their milder winters may fit this application. Currently, there are early collaborative trials in these areas.

But there are also significant gains for farms using beet grazing with youngstock to radically lift whole farm stocking rates, and one unique U.S. application of this may be backgrounding for feedlot steers in regions where this sector is already strong.

Gibbs is a veterinarian and ruminant nutrition scientist at Lincoln University, New Zealand. His research focus is in pasture-based rumen function, and high production forage systems. From this work, he developed fodder beet grazing systems for accelerated finishing of cattle and sheep, and has overseen the extension of these to a dozen countries.

Corn futures contracts: Position changes over time

Nevil Speer July 2019 Corn Positions

Typically, the July World Agriculture Supply and Demand Estimates (WASDE) report turns out to be fairly uneventful for the grain markets. However, this year’s report didn’t follow along with those expectations

That’s because USDA surprised the market by revising ending stocks upwards from 1.675 billion bushels to 2.010 billion bushels. Accordingly, USDA revised the average farm price down from $3.80 per bushel to $3.70 per bushel. The average trade estimate was roughly right in line with the June WASDE number and even the highest trade estimates didn’t have carryover exceeding 2 billion bushels.  

That sort of upward revision would normally see the market trading into negative territory. However, the market seemingly ignored the USDA numbers and countered by working higher.

In the two days that followed, both the September and the December contracts added 19 cents on sizeable volume. That was followed by some moderation back the other way, but the market sent a clear message: Traders don’t have a lot of confidence in USDA’s July estimates.  

Therefore, the market is operating with a high degree of uncertainty. And as explained several weeks ago, relative positions in the market provide some indication about the general consensus around the market.  

Accordingly, this week’s graph depicts net positions (commercial versus non-commercial) for the Chicago Board of Trade’s Corn Futures contract. The positions are recorded through July 16 – the first assessment since the July WASDE report.  

Nevil SpeerJuly 2019 Corn Positions

As review, the net position is simply the sum of the short and long positions for each category of traders, commercial and non-commercial, respectively. What’s more, some basic definitions are helpful to better understand the graph:   

  • Long: An initial buy position (obligation to accept delivery)
  • Short: An initial sell position (obligation to make delivery)
  • Speculator: Entity assuming price to potentially profit from price change (non-commercial)
  • Hedger: Entity using futures/options market to manage price risk (commercial)

With that in mind, this week’s graph reveals the positioning that occurred because of concerns about the crop back in May. Speculators were net short 200,000 contracts at the end of April and are now net long 320,000 contracts. 

Meanwhile, on the other side, the commercial position (hedgers) were glad to begin making sales along the way; the commercials were net long approximately 140,000 contracts at the end of April and now net short nearly 380,000 contracts.  

That brings us back to the WASDE report. Following the report, USDA noted: “In July, USDA’s National Agricultural Statistics Service (NASS) will collect updated information on 2019 acres planted, and if the newly collected data justify any changes, NASS will publish updated acreage estimates in the August Crop Production report.” 

That statement underscores the broader uncertainty surrounding this year’s crop – it’s all subject to change. It’ll be important to monitor this positioning over the course of the next few months. Stay posted!

Speer serves as an industry consultant and is based in Bowling Green, Ky. Contact him at [email protected]

Better access to the European beef market within sight

USDA Beef exports to EU

By Joe Schuele

On June 14, the European Commission announced that it had reached an agreement with the United States to provide the U.S. beef industry with better access to the European market. Under this agreement, the U.S. will hold a country-specific share of the existing 45,000 metric ton (mt) duty-free quota for high-quality beef imports entering the European Union (EU).

The other supplying countries currently eligible to ship under the quota are Australia, Argentina, Uruguay, New Zealand and Canada. The U.S.-specific share will begin at 18,500 mt and will increase over seven years until reaching a final level of 35,000 mt. The other suppliers listed above will share the remainder of the quota volume.

When will this agreement be implemented?

Important steps remain in the EU’s approval process, but progress is being made as the European Council adopted a decision confirming the agreement on July 15. European Parliament consent is still required, and this step is expected to begin in September.

Why is this necessary?

The duty-free quota traces its roots back to the United States’ successful challenge of the EU’s ban on beef from hormone treated cattle. Despite a World Trade Organization (WTO) finding that the ban has no scientific basis, the EU kept it in place and still only accepts U.S. beef derived from cattle enrolled in USDA’s Non-Hormone Treated Cattle (NHTC) program.

For many years, the U.S. retaliated by imposing tariffs on certain products imported from the EU valued at about $117 million, but this didn’t help the U.S. beef industry move any more product into the European market, nor did it help European customers secure a product they clearly wanted. U.S. beef could still enter the EU under the existing 11,500 mt U.S./Canada Hilton Quota, which carries a 20% duty. But with the extra cost of NHTC production and a 20% duty, business was limited.

In 2009, a memorandum of understanding between the U.S. and the EU created the new duty-free high-quality beef (HQB) quota in exchange for the U.S. lifting its retaliation on imports of European products. When it was first created, the duty-free quota worked well, and was phased in from an initial 20,000 mt to 48,200 mt, including the 3,200 mt that were awarded in Canada’s separate agreement with the EU.

U.S. beef was commanding a solid price and starting to gain a foothold in Europe. But in order for the duty-free quota to be WTO-compliant, it could not completely exclude other suppliers. As other countries developed systems to meet the high-quality beef definition and gained access to the quota, U.S. share was crowded out.

The HQB quota is administered on a quarterly basis, with 11,250 mt available at the beginning of each quarter. So every three months, the race is on to move duty-free beef into the EU, and within two to three weeks, the available capacity is exhausted.

So importers seeking high-quality chilled U.S. beef have to wait more than two months before they can secure more product without being saddled with a 20% duty. Obviously, this makes it very difficult for these importers to offer chilled U.S. beef to their customers on a regular basis, causing shelf life and availability challenges for these customers and limiting their ability to feature U.S. beef in restaurants and supermarket meat cases. 

Is a U.S.-specific share of the quota a good solution?

While it still needs to be approved and implemented, allocating a country-specific share of the quota to the U.S. definitely holds promise for revitalizing U.S. beef exports to the EU. It could also give U.S. producers and processors who have invested in NHTC production greater confidence that their product has a bright future in Europe.

“Annual U.S. exports to the EU have been in the $200 million range for several years without any recent growth, due in large part to the bottleneck created by lack of capacity in the duty-free quota,” explained Erin Borror, U.S. Meat Export Federation (USMEF) economist.

“With more reliable and consistent access to the EU market, we could see that figure double by the time the U.S.-specific share of the quota expands to 35,000 mt. This would send a very positive signal to producers who are interested in expanding their NHTC business but have grown frustrated as they struggled to recover the additional production costs.”

USMEF President Dan Halstrom added that as negotiations between the Office of the U.S. Trade Representative (USTR) and the European Commission made progress toward an agreement, interest heightened on both sides of the Atlantic.

“USMEF greatly appreciates the tireless efforts of USTR and USDA to secure better access to this very high-value beef market,” Halstrom said. “These improvements to the duty-free quota will be a tremendous boost for both the U.S. industry and for customers in Europe who see a very bright future for U.S. beef.”

Schuele is vice president, communications, with the U.S. Meat Export Federation in Denver, Colo.

 

Meat Market Update | Steady boxed beef cutout continues

The daily spot Choice box beef cutout ended the week last Friday at $213.42, which was just slightly higher compared to previous Friday. The same day last year it was $204.17, so it's year over year gains continue.

Deep diving in, the daily Choice rib primal was almost $3 higher and the loin primal was about $2 higher. The Choice rib primal ended the week $32 per cwt higher than the same day last year which has also helped to keep the Choice-Select spread much higher than 2018.

The weekly average Choice cutout, which includes all types of sales, including the daily Choice cutout was $211.09 which was $1.39  lower, even though the daily cutout was 62 cents higher. The daily sales numbers only included 719 loads. There were 7,151 total loads sold for the week which was a high number and 233 loads higher than the previous week. 

Cattle producers take on black vultures

Cattle producers take on black vultures

Missouri Cattlemen's Assn. (MCA) executive vice president Mike Deering said countless members have contacted the association about the growing difficulty with black vultures.  

Leaders from MCA traveled to Washington, D.C., July 16, 2019, to meet with officials from the U.S. Fish & Wildlife Service (FWS), the U.S. Department of Agriculture’s Animal Plant & Health Inspection Service (APHIS), Rep. Jason Smith (R., Mo.) and congressmen from three other states about problems producers are facing with the increasing presence of black vultures, often referred to as black headed buzzards. MCA Region 3 vice president Charlie Besher, who attended the meeting, said the problem is becoming a crisis.

APHIS attributes around $5 million in losses to the vultures, but that number is likely much higher, according to Deering, given that many deaths go unreported. The bird has become a problem in recent years as a result of an exploding population and a drastic change in their migratory pattern. Many argue that the birds have all but stopped migrating because they see the birds year-round.

We've had calves killed on our farm and know many producers from my area who have been battling these birds for a few years now," said Besher, who lives in southeast Missouri. "We need commonsense solutions to deal with this predator that is killing cattle not only in my region but throughout the state. We want to be partners with the agencies when it comes to cattle producers protecting their private property and their livelihood."

MCA was alongside leaders of the Arkansas Cattlemen's Assn. and the Mississippi Cattlemen's Assn. in asking officials to work with them on a solution. The difficult hurdle is that these birds are protected by the Migratory Bird Treaty Act of 1918, making it a crime for farm and ranch families to protect their livestock without a permit that takes weeks to months to obtain, since producers are required to count birds and first try non-lethal means of discouraging the birds.

"It's bizarre and almost unbelievable to many who aren't directly impacted by these birds that have transformed from scavengers into violent predators," Deering said. "The black vultures hang out primarily during calving season and swoop down after the baby calf, poking the calf's eyes out to disable it and then going in for the kill usually starting on the backside of the calf. It's a vicious attack and a painful death for the animal. Reports have been made of the birds also attacking full-grown cows and older calves as well."

Leaders from APHIS and FWS acknowledged the problem and expressed a desire to address it. Mike Oetker, FWS deputy regional director in the Southeast Region, reported the bird's population to be around 4.3 million, with only 4,700 permits being issued in12 states. Deering said the number of kills is not making a dent in the population.

"We stated clearly that legislation is not necessary, and many changes could be made quickly by USFWS with policy changes or possibly rule-making. Oetker and other USFWS officials agreed," Deering said. "The meeting was positive with USFWS and USDA-APHIS agreeing to communicate clearly with stakeholders and pursue changes to allow for a quicker permitting process without unnecessary bureaucracy. They also noted it is highly likely they can proactively issue permits before there are dead calves."

Deering said the association appreciates the candid dialogue but will not settle until commitments become reality.

MORNING Midwest Digest, July 25, 2019

Young people aren't the only distracted drivers.

The Osh Kosh Air Show had a muddy start, but is going well, and is busier than an international airport during the show.

Today is the final day of Farm Tech Days in Wisconsin.

Good sound systems are important, as was evident in the Mueller testimony yesterday.

 

Photo: Gligatron/Getty Images