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Articles from 2018 In September


This Week in Agribusiness, Sept. 29, 2018

Part 1

Note: The video automatically plays through all show parts once you start.

Max Armstrong and Mike Adams are talking about harvest this week, with reports from Russell Nemetz on sugar beets and Chad Colby on corn. Jerry Gidel of Price Futures Group talks with Max and Mike about what’s happening as another big harvest rolls in amid trade challenges.

Part 2

Jerry Gidel of Price Futures Group rejoins Max and Mike and they turn their attention to dig deep on the trade war with Chinese. Chad Colby in the Colby Ag Tech segment takes a look at the new iPhone. Agricultural Meteorologist Greg Soulje looks at weather for the Western United States.  

Part 3

Max Armstrong and Mike Adams hear from Chad Colby again as he takes off with a report about aviation technology and agriculture. Max remembers listening to tractor radios and talks to a collector of antique tractor radios, Mike Hodupp of Marion, Indiana.

Part 4

Max Armstrong and Mike Adams are taking a look at novel safety programs. Max chats with some of the thinkers behind the project. Agricultural Meteorologist Greg Soulje looks at weather for the Eastern United States. In Max’s Tractor Shed, Max introduces a 1957 John Deere 520 that is owned by Russ Carpenter of Ithaca, New York. This tractor has been on this farm for a long time and has a big date coming up.

Part 5

Max Armstrong talks with Mark Betner of Mystik Lubricants about automatic transmission fluids

Part 6

Mike Adams profiles Morris Area FFA in Morris, Minnesota. Morris area claims one of the largest dairy milking operations in the state. Member Sam Greiner tells us how her project helped her reach out to kids in their community. In Samuelson Says, Orion says we are “attacking our food again.” Orion takes a look at Consumer Reports recent article about eating beef. Agricultural Meteorologist Greg Soulje looks at weather for the week ahead.

Part 7

Max and Mike talk about all the stressors on farmers right now and how they can seek help when things seem impossible to fix.

Morris Area FFA

Mike Adams profiles Morris Area FFA in Morris, Minnesota. Morris area claims one of the largest dairy milking operations in the state. Member Sam Greiner tells us how her project helped her reach out to the community.

The weekly FFA Chapter Tribute is an opportunity to shine a spotlight on the good work of your local chapter. Tell us about what you're doing, give us some history from your group and tell our viewers of the work you do in the community. FFA chapters across the country deserve recognition for the work they do, make sure we include yours.

To have your chapter considered for this weekly feature, send along information about your group by e-mail to Orion Samuelson at [email protected] or to Max Armstrong at [email protected]. They'll get your group on the list of those that will be covered in the future. It's a chance to share your story beyond the local community. Drop Orion or Max a "line" soon.

The National FFA Organization, formerly known as Future Farmers of America, is a national youth organization of about 650,000 student members as part of 7,757 local FFA chapters. The National FFA Organization remains committed to the individual student, providing a path to achievement in premier leadership, personal growth and career success through agricultural education. For more, visit the National FFA Organization online www.ffa.org, on Facebook at facebook.com/nationalffa, on Twitter at twitter.com/nationalffa.

 

1957 John Deere 520

In Max’s Tractor Shed, Max introduces a 1957 John Deere 520 that is owned by Russ Carpenter of Ithaca, New York. This tractor has been on this farm for a long time and has a big date coming up.

Max's Tractor Shed is a regular feature of This Week in Agribusiness. Max Armstrong shares information about legacy machines, their stories and how they may still be at work today. If you have a tractor you want featured in Max's Tractor Shed, send a high-resolution digital picture, your contact information, and information about the tractor - what makes it special - to [email protected].

Attacking our food again

In Samuelson Says, Orion says we are “attacking our food again.” Orion takes a look at Consumer Reports’ recent article about eating beef.

Samuelson Sez is a special feature of This Week in Agribusiness where Orion Samuelson shares his insights and perspectives into key issues of the day. You can reach out to Orion at [email protected]

Cattle Market Weekly Audio Report for Saturday, Sept. 29, 2018

After early-week pressure from the monthly Cattle on Feed report, cattle markets firmed with a sense that fed cattle prices can increase over the next couple of months, supported by snugger harvest-ready supplies and strong consumer beef demand.

Nationally, steers and heifers traded from $2 per cwt lower to $2 higher, according to the Agricultural Marketing Service (AMS).

Analysts there note very good demand for the larger strings of yearling steers and heifers coming off grass in the Northern Plains. They add that “Herd health programs are becoming more of an issue earlier this year as temperature swings in the Midwest are ranging from lows in the 40s to highs in the mid 80s in a matter of a couple of days.”

Week to week on Friday, not counting expiring Sep and newly minted away Sep, Feeder Cattle futures closed 20 cents lower to 25 cents higher across the front half of the board and then an average of 74 cents higher.

Current calf and feeder cattle price support includes the promise of positive forage conditions for fall and winter grazing.

According to the most recent USDA Crop Progress report, 45% of pasture and range last week was in Good or Excellent condition, which was 1% more than a week earlier and 3% more than a year earlier. Conversely, 24% is rated as Poor or Very Poor, which is 1% less than last year.

And, 28% of Winter wheat was planted, which was 6% ahead of last year and 2% ahead of the five-year average.

As for fed cattle, Negotiated prices languished this week at mainly steady money of $110-$111 per cwt on a live basis and mostly $174 in the beef.

Week to week on Friday, Live Cattle futures closed an average of 44 cents higher (2 cents to 75 cents higher), helped along by growing open interest.

Listen to Wes Ishmael's Cattle Market Weekly Audio Repor every Saturday morning on the BEEF magazine website. This is your report for Saturday, Sept. 29, 2018.

Feeder cattle volume steady as prices continue even

Feeder cattle numbers at the test auctions were almost the same as last week and last year and prices were mostly steady to $5 higher with just a little weakness on some weights. Many more 6- and 7-weight calves continue to move that don't bring as high of prices as true yearlings.

Slaughter cow numbers at the test auctions increased which is typical during the fall runs. Prices were steady to $2 lower and cow meat prices took another big drop on Wednesday.


Cattle prices hover around steady

market outlook

After early-week pressure from the monthly Cattle on Feed report, cattle markets firmed with a sense that fed cattle prices can increase over the next couple of months, supported by snugger harvest-ready supplies and strong consumer beef demand.
 
Nationally, steers and heifers traded from $2 per cwt lower to $2 higher, according to the Agricultural Marketing Service (AMS).
 
“There was good to very good demand for the larger strings of yearling steers and heifers coming off grass in the Northern Plains,” say AMS analysts. “Herd health programs are becoming more of an issue earlier this year as temperature swings in the Midwest are ranging from lows in the 40s to highs in the mid 80s in a matter of a couple of days.” 
 
Week to week on Friday, not counting expiring Sep and newly minted away Sep, Feeder Cattle futures closed 20centslower to 25centshigher across the front half of the board and then an average of 74centshigher.
 
The CME Feeder Cattle Index reached its highest level this week since last November at $158.13 on Wednesday.
 
Forage conditions improve
 
Current calf and feeder cattle price support includes the promise of positive forage conditions for fall and winter grazing.
 
“Nationwide, the drought monitor improved again this week with 51.4% not affected by drought,” AMS analysts explain. “It has been two and a half months since 50% or more has been reported for that data series. For perspective, last year’s data plot was at 63.1% showing no drought effects. There are still areas of reported drought, however they have decreased significantly in the last month.” 
 
According to the most recent USDA Crop Progress report (week ending Sept. 23), 45% of pasture and range was in Good or Excellent condition, which was 1% more than a week earlier and 3% more than a year earlier. Conversely, 24% is rated as Poor or Very Poor, which is 1% less than last year.
 
Winter wheat planting was 6% ahead of last year at 28%. That was 2% ahead of the five-year average.
 
Demand underpins stronger prices
 
From a cyclical standpoint, Glynn Tonsor, agricultural economist at Kansas State University, points out the majority of beef supply growth is in the rearview mirror. At last week’s annual KSU Beef Stocker Field Day, Tonsor explained beef production increased by 6.4% in 2016 (year over year) and 3.8% last year. He anticipates production this year being about 3.3% more and then declining to 1.7% next year and 0.8% in 2020.
 
Projected beef production in the third quarter this year is 2% more than the same quarter last year, according to Tonsor. For the year to date, cumulative beef production is 2.9% higher, according to this week’s USDA estimate.
 
Yet, Tonsor says yearling feeder cattle prices are projected to be 1% higher with calf prices up 2%.
 
“Year-over-year increases in feeder cattle prices can only be explained by strong beef demand,” Tonsor explains. “Prices are notably higher than they would be without demand growth (domestic and international).”
 
For the second quarter this year, the All-Fresh Beef Retail Demand Index was 0.4% more than the same time last year.
 
The Livestock Marketing Information Center (LMIC) projects steer calf prices (500-600 pounds) in the Southern Plains at $168-$169 per cwt in the third quarter and at $162-$166 in the fourth. Next year’s projected calf price is $169-$174.
 
Similarly, LMIC estimated feeder steers (700-800 pounds) in the Southern Plains at $154-$155 per cwt in the third quarter and at $148-$151 in the fourth. Next year’s projected feeder steer price is $147-$151.
 
Fed cattle trade mostly steady
 
Negotiated cash fed cattle prices languished this week at mainly steady money of $110-$111 per cwt on a live basis and mostly $174 in the beef.
 
“Last week's large harvest of 657,000 head, if realized, will be the second largest harvest since July 1 and has packers well supplied,” say AMS analysts. “Coupled with this week's 650,000-head harvest, it would be the largest two-week total since mid-June.” 
 
Week to week on Friday, Live Cattle futures closed an average of 44 cents higher (2centsto 75 cents higher), helped along by growing open interest.
 
“Lightweight placements since May will result in lighter and later fed cattle marketings and may contribute to relatively tighter fed cattle supplies for the remainder of the year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.
 
August placements in feedlots with more than 1,000 head capacity were 7.36% more than the previous year at 2.07 million head, according to last week’s Cattle on Feed report.
 
However, Peel points out that placements were mostly cattle weighing less than 700 pounds. Specifically, he says placements weighing less than 600 pounds were 19.4% more year over year, while placements weighing 600-700 pounds were 17.5% more.
 
“In the last four months, placements of cattle under 700 pounds have been up 13.2% year over year, while placements weighing over 700 pounds were down 1.0% year over year,” Peel says.  “Lightweight feedlot placements likely include lighter-weight steer placements, as well as continued high proportions of heifers in the feedlot total. Heifers are typically placed 50-100 pounds lighter in weight compared to steers.”
 
“Despite more cattle on feed, the market price of finished cattle remains strong and continues to outperform year-ago prices,” explained Andrew P. Griffith, agricultural economist at the University of Tennessee, two weeks ago. “It would appear cattle feeders are expecting finished cattle prices to remain strong in the near term and escalate moving into 2019. This thought process may not be as wild as many think it is as beef demand remains strong, which supports prices…”
 
For demand perspective, Griffith notes the retail value for Choice beef in August was the highest since July of last year at 608.2 cents per pound. 
 
Wholesale beef values continued seasonally lower. Week to week, Choice boxed beef cutout value was 92centslower Friday afternoon at $203.88 per cwt. Select was $1.27 lower at $193.44.
 
“It is difficult to imagine live cattle prices moving lower in the fourth quarter, with a target as high as $120 before the end of the year,” Griffith says in his market comments this week. “It may be difficult to reach the $120 price point, but cattle feeders will do their best to force prices higher.
 
“December Live Cattle futures are just shy of $119 to end the week, with plenty of time to push higher. Cattle feeders are looking beyond December as they continue to pay strong prices for feeder cattle, which means prices will have to strengthen significantly for positive margins.”
 
Trade talks progress
 
Going forward, Tonsor says, “Supply fundamentals are well established. Demand strength will dictate calf and feeder cattle prices.”
 
This week, the U.S. and Korea reached a new bilateral trade agreement (KORUS). 
 
“U.S. red meat exports to Korea set a record last year of $1.7 billion, up 19% year-over-year and up 69% from 2012, when KORUS entered into force,” explains Dan Halstrom, president and CEO of the U.S. Meat Export Federation. “This trend continues in 2018, with both U.S. beef and pork export value increasing more than 50% compared to a year ago. Korea is now the second-largest value market for U.S. beef (after Japan) and fourth largest for U.S. pork.”
 
Under the revised KORUS, Halstrom explains the duty rate on U.S. beef is reduced from 40% to 21.3%. It will decline each year until it is eliminated by 2026.
 
Also this week, the U.S. began negotiating a bilateral trade pact with Japan.
 
"This is welcome news, since we know that export income is critical to the financial health of agriculture and is a key contributor to rural prosperity," said Agriculture Secretary Sonny Perdue. "Japan is an important customer for our agricultural products and we look forward to the great potential this breakthrough represents."
 
Earlier, President Trump withdrew the U.S. from the Tran Pacific Partnership (TPP), which includes Japan.
 
According to a joint statement made by the two nations, the U.S. and Japanese economies represent approximately 30% of global Gross Domestic Product.

MIDDAY Midwest Digest, September 28, 2018

Thank goodness for high school and college football. Many people might need that after a rough week. 

A guest on this weekend's This Week in Agribusiness talks with Max about where people turn during difficult times. 

Retailers looking toward artificial intelligence to improve customer service

Retailers recognize the value of using artificial intelligence (AI) to enhance customer service, as 55% plan to leverage this technology within three years. According to the 2018 Customer Experience/Unified Commerce Survey, 7% of retailers are currently using AI as digital assistants and chatbots, and another 48% plan to implement this capability within three years.

Artificial intelligence is a method of data analysis that automates analytical model building to learn from data, identify patterns and make decisions with minimal human intervention. Some retailers are experimenting with AI to offer purchasing suggestions based on customer responses to a series of questions or to pinpoint the most convenient time of day to reach out to consumers with products they would be willing to purchase based on past clicks and website visit data.

"The convergence of AI with traditional customer service has the ability to transform the shopping experience," said Perry Kramer, senior vice president and practice lead, BRP. "AI offers the ability to exploit the vast amounts of customer preference and transaction data gathered and reach a much larger group of consumers on a personal level to enhance the customer experience."

Amazon and other multi-channel retailers are currently experimenting with AI to offer purchasing suggestions based on responses to a series of questions and past purchase history. Sephora, using a Kik chatbot, offers customers "conversational commerce" by offering a one-on-one mobile chat experience to offer ideas on new makeup looks and identify products in tutorials to offer customers a better shopping experience. In-store, the chatbot is becoming a personal shopping assistant by offering product recommendations, reviews and ratings.

While chatbots can be a useful customer service tool, some consumers may not know if they are talking to a real person or a bot until they've already entered the interaction. That lack of clarity may turn off some consumers, which can negatively impact your brand.

"Transparency is a big discussion for AI. Do you want the customer to think they're speaking with a real human being or should you disclose that this is a conversation with Watson or some other AI technology," said Jeffrey Neville, senior vice president and practice lead, BRP. "That's a decision retailers have to make right now, as AI using voice is probably going to mess up the conversation at some point, and the customer is going to realize that they're talking to a computer."

BRP is an innovative retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants' deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions.

MORNING Midwest Digest, September 28, 2018

What was your reaction to the Blasey-Ford and Kavanaugh testimonies yesterday? Will it impact the midterm election? Iowa Senator Charles Grassley seems to be doing just fine.

It'll be a lame duck farm bill, apparently. The current one expires Saturday.