Featured Agriculture News

06/19/2018 - Trans Fat Ban Begins

As a decades-long effort to get rid of trans fats officially concludes Monday, high oleic soybeans are poised to expand their market share.

06/19/2018 - USDA Crop Progress

The U.S. corn crop's good-to-excellent rating is the highest for this time of year in nearly two decades, according to the USDA National Ag Statistics Service's latest Crop Progress report.

06/19/2018 - Health Care by Association

Language in the House version of the farm bill would help farm associations start or promote health plans for their members. The language comes as the U.S. Department of Labor is expected to finalize language meant to expand Association Health Plans (AHPs) as a way to lower insurance costs for small employers.

06/18/2018 - Neb. Ranch Asks $34 Million

The Zeman Ranch in the Nebraska Sandhills is listed for $20 million more than the next most expensive ranch for sale in the state, and the hefty price tag highlights dueling philosophies in the farmland market.

06/18/2018 - Trump's Canadian Dairy Problem

U.S. dairy groups like the attention President Donald Trump is bringing to Canada's supply management system, but the international dispute over the president's tweets involves a minor overall part of U.S.-Canada trade.

06/18/2018 - Comeback Kids

In Nebraska, a small community finds new hope in the return of a FFA chapter.

06/15/2018 - Ag Groups Tweet #TradeNotTariffs

With the Trump administration expected to announce tariffs Friday against China, farm groups are worried about the expected Chinese response. On Thursday, groups went to social media to call on Congress and the Trump administration to avoid handing down the tariffs.

06/15/2018 - DTN Field Roundup

In much of the Midwest, rain-soaked crops contrast sharply with their parched counterparts in the south and west.

06/15/2018 - The Market's Fine Print

With U.S. packers and the meat industry in general feeling the pinch of a chronic labor shortage, politicians would be wise to follow the words of the hymn "Come, Labor On" in crafting immigration policy, suggests DTN Livestock Analyst John Harrington.
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06/19/2018 Trans Fat Ban Begins

By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- Monday marks the deadline for the American food industry to rid itself of trans fats, and it couldn't come at a better time for the high oleic soybean industry.

Trans fats are a type of unsaturated fat that are a major contributor to high cholesterol and heart disease. They are produced when vegetable oils -- such as soybean oil -- are partially hydrogenated, a process used to give oils desirable properties such as a longer shelf life.

That's where high oleic soybeans come in. These types of specialty soybeans have been bred to produce oil that has no trans fats and produces a more stable cooking oil, thus eliminating the need for hydrogenation.

Companies and universities have spent more than a decade creating high oleic varieties, some of which are genetically modified (GM). Those GM varieties -- Monsanto's Vistive Gold and Pioneer's Plenish soybeans (now owned by Corteva Agriscience) -- were held up for years by international regulations.

The final required international import approvals came through for Vistive Gold in June 2017 and for Plenish in January 2018 -- just in time for the Food and Drug Administration's ban on trans fats to officially begin. A handful of smaller companies are also commercializing non-GM high oleic soybean varieties this year.

"It's now full steam ahead," said John Motter, an Ohio farmer who has grown high oleic soybeans for eight years. He is also the chairman of the strategic management committee for the United Soybean Board (USB), which has worked to create a market for these beans. "We're just trying to find the end users to continue to grow the demand for the product," he said.

"THE HORSE IS BACK IN THE BARN"

The FDA's ban on trans fats begins Monday, June 18, but the movement against this class of fats started nearly 40 years ago, noted Walter Willett, a Harvard professor who did some of the earliest research showing that trans fats contributed to heart disease.

The first studies formally showing this link were published in the early 1990s, but it would take decades of replicated research and lobbying before the FDA took action, he noted. In 2006, the agency began requiring companies to label products with trans fats. By 2013, the FDA proposed removing trans fats from the category of food ingredients "generally regarded as safe," which would effectively ban the ingredient for American food manufacturers. In June of 2015, that measure was enacted, and the industry was given three years to rid itself of trans fats.

In some ways, Monday's official start to the ban is an anti-climax, Willet noted. The Grocery Manufacturer's Association has estimated trans fats use in the U.S. is already reduced by 98%.

"The horse is back in the barn already, but it is a really important day to solidify that consumers can now be confident that their food is not going to be loaded with trans fats anymore," Willet said on a conference call hosted by the Center for Science in the Public Interest on Monday.

SOYBEAN INDUSTRY RACES TO FILL THE VOID

Even before the FDA acted in 2013, trans fats had gained an unpopular reputation and the food industry was actively searching for oils that wouldn't require hydrogenation.

That led to growth in the use of alternative oils such as palm oil or high oleic canola oil -- which gutted soybean oil's market share by more than 20%, noted David Tegeder, senior marketing manager for Corteva Agriscience. The USB estimates that the industry lost 4 billion pounds of annual soybean demand once trans fat labeling went into effect in 2006.

The growth of the soybean biodiesel industry helped recover some of that lost soybean demand, but not all, Motter said. "There is a limit to how much oil we can use in biodiesel," he said. "If we saturate that market, what are our chances to win back the edible oil market? The game is high oleic."

The situation was initially a "catch-22" for farmers and companies, who could produce high oleic soybeans, but didn't immediately have a market ready and waiting, noted Willet.

But, slowly, processors came on board, acreage swelled and more high oleic varieties joined the market.

In addition to the GM high oleic varieties from Corteva and Monsanto, Schillinger Genetics, an Iowa-based seed company, has released two non-GM high oleic soybeans this year, after licensing the trait from the Missouri Soybean Merchandising Council. A Minnesota-based specialty-food ingredient company called Calyxt is targeting the upper Midwest for production of its non-GM high oleic soybean, created via gene editing.

Altogether, USB estimates that around 650,000 acres were planted to high oleic soybeans last year, across 12 states, with maturity groups ranging from 2.0 to 4.2. Farmers send them to a handful of participating processors, namely ADM, Bunge, Perdue Agribusiness and Zeeland Farm Services, which crush the beans, refine the oil and market it to the food service industry, food manufacturers and even industrial users, such as motor oil manufacturers.

With international market approvals in hand, Corteva expects demand for Plenish oil to rise, Tegeder said. "In 2018, Plenish high oleic soybeans will be planted on about 350,000 acres in several states," he told DTN in an email. "We're expecting a significant increase in oil demand for 2018 and look to double acres for 2019 accordingly."

The industry's goal is 16 million high oleic acres by 2023, with maturity groups ranging from 0 to 5, Motter added.

Before that can happen, food processors, food industry end users and farmers will have to do a lot of coordinating, he said.

"While we have the global approvals for all high oleic soybeans now, it takes about a year for the end user to switch a formula to use it," he said. "So there is a constantly a year's drag on the market."

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow her on Twitter @Emily_Unglesbee

(PS/AG)

06/19/2018 USDA Crop Progress

By DTN Staff

OMAHA (DTN) -- The percentage of the U.S. corn crop rated in good-to-excellent condition improved slightly last week and is currently the highest in at least 20 years, according to the USDA National Ag Statistics Service's weekly Crop Progress report released Monday.

NASS estimated that 78% of corn was in good-to-excellent condition as of Sunday, June 17, up 1 percentage point from 77% the previous week.

"That's the highest rating for corn for this time of year in at least two decades," said DTN Analyst Todd Hultman. "The only notable problems were in Texas, where 23% of corn was rated either poor or very poor, and Missouri, where 15% of corn was rated poor to very poor."

Meanwhile, soybean condition slipped slightly from 74% the previous week to 73% last week.

"That's still a sign of good early conditions in most states, except Missouri, where 19% of soybeans were rated poor to very poor," Hultman said.

Soybean planting was nearly complete by the end of last week with 97% of the crop planted as of Sunday, ahead of the average pace of 91%. Ninety percent of soybeans were emerged, ahead of the five-year average of 81%.

NASS reported that 27% of winter wheat was harvested as of Sunday, ahead of the five-year average of 19%. Harvest in Arkansas was 90% complete, followed by Oklahoma at 73% and Texas at 65%.

Spring wheat was 97% emerged, near 98% last year but ahead of the average pace of 95%. Spring wheat headed was 9%, behind 14% last year and also behind the five-year average of 12%.

"USDA's good-to-excellent rating for spring wheat jumped up, from 70% a week ago, to 78% as of June 17," Hultman said. "The new rating is the highest for spring wheat since 2010."

Cotton was 96% planted as of Sunday, compared to 90% last week, 94% last year and 94% on average. Cotton squaring was 22%, ahead of the average pace of 17%.

Sorghum was 89% planted as of Sunday, compared to 80% last week, 84% last year and a five-year average of 82%. Sorghum headed was 18%, near the average of 17%.

Barley was 96% emerged as of Sunday, near the average of 95%, and headed was 8%, behind the average of 15%. Oats headed was 52%, near the average of 54%.

To view weekly crop progress reports issued by National Ag Statistics Service offices in individual states, visit http://www.nass.usda.gov. Look for the U.S. map in the "Find Data and Reports by" section and choose the state you wish to view in the drop-down menu. Then look for that state's "Crop Progress & Condition" report.

National Crop Progress Summary
This Last Last 5-Year
Week Week Year Avg.
Corn Emerged 98 94 97 97
Soybeans Planted 97 93 95 91
Soybeans Emerged 90 83 87 81
Cotton Planted 96 90 94 94
Cotton Squaring 22 15 21 17
Sorghum Planted 89 80 84 82
Sorghum Headed 18 16 17 17
Spring Wheat Emerged 97 94 98 95
Spring Wheat Headed 9 NA 14 12
Winter Wheat Headed 95 91 96 95
Winter Wheat Harvested 27 14 26 19
Rice Headed 3 NA 4 4
Barley Emerged 96 92 96 95
Barley Headed 8 NA 9 15
Oats Headed 52 39 58 54

**

National Crop Condition Summary
(VP=Very Poor; P=Poor; F=Fair; G=Good; E=Excellent)
This Week Last Week Last Year
VP P F G E VP P F G E VP P F G E
Corn 1 3 18 59 19 1 3 19 59 18 2 6 25 55 12
Soybeans 1 4 22 58 15 1 3 22 60 14 2 5 26 57 10
Winter Wheat 15 18 28 30 9 15 20 27 30 8 5 11 35 41 8
Spring Wheat 1 2 19 64 14 1 2 27 61 9 9 18 32 35 6
Sorghum 3 10 33 51 3 4 10 36 46 4 1 4 29 61 5
Cotton 5 21 36 33 5 3 18 37 38 4 1 5 33 51 10
Rice - 3 23 60 14 1 3 25 58 13 1 5 24 56 14
Oats 4 3 23 58 12 4 4 25 57 10 5 11 28 47 9
Barley 1 2 13 72 12 - 1 16 74 9 4 7 25 49 15

Please send comments to talk@dtn.com

(AG)

06/19/2018 Health Care by Association

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- The farm bill could be used next year to offer some relief for farmers from high healthcare insurance premiums they face.

Association Health Plans (AHPs) have become an avenue touted by the Trump administration to reduce health insurance costs for small employers. The U.S. Department of Labor has a proposal, which could become final any day, to expand the use of AHPs. The plans could provide a potentially cheaper insurance option for millions of people, including 6 million small-business employees and 3 million sole proprietors.

Under the proposed rule, AHPs would be allowed for businesses with a "commonality of interests," such a farmers. The Labor Department is dropping requirements that businesses must have at least one employee, which would broaden AHPs to sole proprietors. And the association doesn't have to exist solely to market health coverage, so farm groups and others can create plans.

Boosting the Department of Labor plan, the House version of the farm bill has language allowing USDA to provide up to $65 million in grants to farm trade associations for support and technical assistance to create agricultural association health plans. The bill also allows up to $15 million annually in loans to establish health plans. The Senate farm bill, however, does not have comparable language included in its version.

Karen Pollitz, a senior fellow and expert on health reform at the Kaiser Family Foundation, has been watching the Department of Labor proposal on AHPs and told DTN expectations are that a final rule will come out "any day now." The labor secretary has also said the rule will come out sometime in June.

The AHPs basically allow small employers to pool together for health policies, though it's likely the rules coming out under the Department of Labor will not have all of the requirements demanded of health insurance policies under the Affordable Care Act. The Labor Department calls AHPs "an innovate option for expanding access to employer-sponsored coverage (especially for small businesses)."

SOME CRITICS

The plans have critics, though, because they might not provide the same kind of coverage as other insurance policies.

AHPs would largely look attractive to people who make too much income to qualify for subsidized insurance on the Affordable Care Act marketplace. About 40% of people buying insurance on the open market don't qualify for those Obamacare subsidies, and that's where a lot of farmers paying high premiums fall.

"There are certainly people who need relief, people who don't qualify for a subsidy under the ACA," Pollitz said. "The question is how to provide that."

A USDA-funded study of farmers released last summer found nearly three-quarters of farmers consider health insurance an important or very important risk-management strategy on their operations. But just over half of all farmers and ranchers are not confident they could cover the costs of a major illness or injury. Farmers are vulnerable to high premiums, partially because of age, and nearly two-thirds of those surveyed reported a pre-existing condition. For more on the study's findings, visit http://docs.wixstatic.com/….

Under the proposed rule, associations would not be required to provide the essential health benefits. There could be an option for self-employed people to buy a plan without prescription drug benefits, for instance. There also would be no restrictions on rating people based on age, gender or where they live. Still, the lower rates could entice younger people to buy a policy.

FOLLOWS MOVES IN STATES

The federal plan also follows moves in different states. Tennessee, long before ACA, enacted a law allowing the Tennessee Farm Bureau to sell health coverage and it would not be treated as insurance under state law. Since the ACA took effect, the Farm Bureau plan continues to sell coverage that is medically underwritten.

Minnesota changed its law last year to allow agricultural groups to offer group health plans. That led Land O'Lakes to create the MN Co-op Health Plan as well as 40 Square Cooperative Solutions. 40 Square enrolled just under 1,100 people, breaking down to 485 families. The plan expects to increase enrollment next fall.

Char Vrieze, executive director of 40 Square, said the group's enrollment is aligned to when farmers start looking for new policies on the open market.

"I can't tell how many times I heard as I went around the state last fall, 'We'll see if you're around next year.' I would akin it to people with a new car company coming out with its first car," Vrieze said. "But the plan is going very well."

In early April, Iowa Gov. Kim Reynolds signed similar legislation, championed by the Iowa Farm Bureau Federation. Iowa Farm Bureau said in a news release at the time that the group could begin offering policies as early as next January.

The North Carolina Legislature failed last week to approve a similar proposal championed by the North Carolina Farm Bureau. According to the Winston-Salem (N.C.) Journal, the bill failed in the North Carolina House over concerns it would negatively affect people with pre-existing conditions.

Under current law, states would regulate AHPs and apply their own insurance industry standards, including rules on insurance capital solvency and coverage requirements.

"There are a couple of strategies to pursue to provide an end result offering coverage that would not be required to meet all of the ACA standards," Pollitz said.

States are going both directions for now. Some are seeking to allow AHPs that don't require all of the insurance demands under the ACA, while others are taking action to ensure the ACA rules still apply and restrict the sale of products that do not meet all of the ACA policy requirements.

Leaders from the Nebraska Farm Bureau worked with Rep. Jeff Fortenberry, R-Neb., on the language promoting AHPs that made its way into the House farm bill.

LOOKING AT OPTIONS

"Even though farm bills aren't places you normally deal with health-insurance policy, we're looking at all kind of options because it's a terrible situation out there right now for farmers and ranchers in the individual insurance market," said Rob Robertson, chief administrator for the Nebraska Farm Bureau Federation.

Robertson said Nebraskans watched as Iowa adopted legislation and have been looking for similar ways to provide some relief to farmers dealing with out-of-pocket costs and high premiums. "It's incredibly sad for some of these farm and ranch families right now," Robertson said. "It's a big hardship."

Robertson added, "If you can pool individuals into a large group and get rated in price as a large group, why is that any different than a large hospital or a bank with 3,000 employees? It should be the same."

Yet, before Obamacare standardized insurance policies, AHPs came and went due to fly-by-night operations that enrolled people then collapsed. The Pew Charitable Trust said AHPs "proved to be magnets for scam artists." To read more by the Pew Trust on AHPs, visit http://www.pewtrusts.org/….

As Pollitz noted, it's easier to offer lower insurance rates if an insurer doesn't expect to collect enough money to cover the claims. A legitimate risk pool will charge what it costs to adequately cover the medical costs of the population. This is one of the concerns of skeptics of this model is whether they would eventually collapse by not being actuarially sound.

"A policy that will deliver a baby or cover cardiac surgery, you can't get that for $50 a month. You just can't unless it's heavily subsidized," Pollitz said.

It will remain to be seen whether the House provision to help farm groups create AHPs will make it into the final version of the farm bill.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/ES)

06/18/2018 Neb. Ranch Asks $34 Million

By Elizabeth Williams
DTN Special Correspondent

INDIANOLA, Iowa (DTN) -- Farmers and ranchers love accumulating assets, land in particular, but when markets are down and the outlook uncertain, sometimes there comes a point when it's time to see if you can cash out and move on.

That's the story behind Nebraska's most expensive farm real estate listing. Anthony Zeman of Bassett, Nebraska, is asking $34 million for his irrigated crop and beef operation in the north-central Sandhills -- $20 million more than the next highest value property on the market.

The 59-year-old beef producer spent 14 years accumulating and improving 10,343 acres of farm and ranchland, which includes 44 center pivots on 5,640 acres. On the remaining 4,700 acres, Zeman currently runs 2,300 cow/calf pairs and has a 2,500-head open-air feeding facility with 3,600 linear feet of concrete bunks and 24 feeding pens.

Irrigated corn yields average 180 to 230 bushels per acre and soybean yields average 60 to 70 bpa. Alfalfa ground produces about 7 tons per acre with four to five cuttings per season. The operation has 51 registered irrigation wells and four stock wells, and none of them are subject to water restrictions or pumping limits on the irrigation units.

"We've had a lot of interest. An operation this unique and large doesn't come up for sale very often," said Tom Metzger with Hall and Hall, an agricultural brokerage and mortgage firm handling the sale. "The seller wants to sell it all together and not split it up. However, if we find a couple of buyers with different interests, we could divide the farm, but we want to close the sale at one time."

Hall and Hall listed the ranch for sale in early April.

Metzger said Zeman's sons don't want to be involved with the ranch long term, and Zeman wants to slow down, quit working so hard, reduce risk and enjoy life more.

A recent report from Farmers National Company finds there's less land on the market -- particularly high-quality farmland -- than usual. Yet, after steady declines in farm income and rising interest rates, concern is growing that the farmland market may not be able to maintain its stability.

"Individual landowners and investors are both scratching their heads as to the current land market and where it might go," the report states. "It is as if there are two land markets: one that says it is a good time to sell and one that indicates that it is time to invest in land."

The report finds land values in the Southern Plains range from stable to down 10% compared to last year, with the variances occurring in quality and location.

Paul Schadegg, a Farmers' National sales manager for the region, said there's a mix of sellers in the market, but the most common type of seller is similar to the Zemans, selling to either retire or settle an estate. He expects a rising number of distressed farm sales later this year.

Zeman's asking price -- at $34 million -- is stratospheric compared to other ranches on the market. There are only about six other Nebraska farm and ranch listings that currently top $10 million, according to www.landsofamerica.com, an online database of rural property listings. There are another handful of Nebraska farm and ranch listings in the $6.5 million range, and those tend to be large grass and hunting ranches.

In Kansas, only three large ranches are listed for more than $10 million, topping out at $16.8 million, in Sharon Springs, Comanche and Morrowville.

South Dakota has six ranches for sale with price tags above $10 million. The most expensive is listed at $55.6 million for 3,800 deeded acres in Buffalo, with additional grazing permit land. An irrigated ranch near Mission with 5,583 acres is asking $32.9 million.

Expensive ranches are not unusual in the mountain west. Montana has 53 ranch listings costing more than $10 million. And, if you're not out of spare change yet, there is a 56,000-acre ranch in Routt County, Colorado (county seat: Steamboat Springs) that can be yours for $100 million.

For more information on the Zeman Ranch, visit https://hallhall.com/…

(KD/ES/AG)

06/18/2018 Trump's Canadian Dairy Problem

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- President Donald Trump's tirade on Twitter over the weekend aimed at Canadian Prime Minister Justin Trudeau has elevated dairy trade between the two countries to the top political issue in Canada.

Dairy was once considered a lower-rung issue in the North American Free Trade Agreement talks, but President Trump tied high Canadian dairy tariffs to his own push for steel and aluminum tariffs.

On Saturday, the president tweeted: "PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, 'U.S. Tariffs were kind of insulting' and he "will not be pushed around.' Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!"

The president followed up with another tweet on Sunday: "Fair Trade is now to be called Fool Trade if it is not Reciprocal. According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B. Tax Dairy from us at 270%. Then Justin acts hurt when called out!"

Trump and leaders of the other G-7 nations, including Trudeau, have been embroiled in arguments over the White House move at the beginning of June to implement 25% tariffs on steel and 10% tariffs on aluminum. Trudeau has called the steel and aluminum tariffs "insulting." But Trump went further, roaring on Twitter about fair trade and dairy tariffs.

The U.S. held a dairy trade surplus with Canada in 2017 that ran anywhere from $113 million to $521 million, depending on the math of different agencies and trade associations.

Canada and the U.S. both use tariff-rate quotas to allow trading partners to export a certain volume of cheese, butter fat, butter milk, dry milk, cream, yogurt, whey products and ice cream at lower tariffs. Then the tariff volumes spike once the quota limit is reached. In Canada, once those quotas are reached, tariffs can reach as high as 294% for some products. The 270% number President Trump uses comes from blended dairy powder over the tariff-rate quota, which is 3% for the U.S., according to Canada's customs tariffs schedule. https://goo.gl/…

Following the trade rhetoric over the weekend, the leaders of the National Farmers Union and Canadian Federation of Agriculture issued a joint statement noting the two countries have more than $40 billion in annual agricultural trade between them, a dollar figure that continues to climb. And farmers in both countries need the certainty that comes from that trade, the groups stated.

"No heated rhetoric nor inflammatory remark could possibly represent the positive sentiment that American and Canadian farmers share for each other's nation. We urge our respective officials to engage in positive discourse that protects the strong trade ties that benefit American and Canadian farmers alike."

The National Milk Producers Federation responded to DTN regarding comments from the president and his advisers.

"We appreciate President Donald Trump's acknowledgement that Canada has not treated our farmers fairly," NMPF stated. "However, we do not believe that some of the language used by some White House officials was appropriate to describe this strong disagreement with Canada on trade policy. We agree that we need to express to Canada that trade needs to be a two-way street, and we are prepared to do it respectfully, but forcefully and with determination."

Canadian dairy producers dug in. Pierre Lampron, president of Dairy Farmers of Canada, said his group and all Canadians reject the White House's personal attacks on Trudeau. Lampron maintains the U.S. has a 5-to-1 dairy trade surplus with the U.S., and based on market studies, 10% of the Canadian dairy market is open tariff-free while only 3% of the U.S. market is open, Lampron said.

Canadian dairy farmers, who are politically influential in the country, "are concerned by the sustained attacks by President Trump with an aim to wiping out dairy farmers here at home," Lampron said.

"The root of the U.S.' problem is that they are producing too much milk in an oversaturated world market," he said. "Canada already produces enough milk to fill Canadian demand. As Canada has less population than the state of California, and that Wisconsin alone produces more milk than all Canadian farms combined, clearly, the Canadian market is too small to make a dent in U.S. overproduction."

It's hard to get a handle on actual dairy trade between the two countries. A Bloomberg article states that the U.S. exported $227 million in dairy products to Canada last year while Canadian dairy producers exported $114 million to the U.S., according to Statistics Canada. https://goo.gl/…

The U.S. Dairy Export Council cites that Canada was the third-largest market for U.S. dairy products in 2017, buying $636 million in products, up 1% from 2017.

But the U.S. Dairy Export Council also says people cannot just rely on the numbers posted on its website. That's because the Canadians demand most of the dairy products exported to Canada from the U.S. are required to be processed and re-exported, rather than used on the domestic market. So the real "export" volume to Canada is not actually known. https://goo.gl/…

After pointing out that the USDA export charts on the USDEC website don't tell the whole story, Jaime Castaneda, senior vice president of trade policy for USDEC, said, "We want to have the same fair trade that 99% of agriculture has with Canada."

Trump's continued focus on Canadian dairy tariffs comes as overall U.S. dairy exports are surging as well. March and April were record months for U.S. dairy exports, according to the U.S. Dairy Export Council. Much of the export growth is driven by higher product exports to China, Mexico, Southeast Asia and South Korea. https://goo.gl/…

Canada's Dairy Information Centre states Canada exported 137.1 million pounds of dairy products to the U.S. in 2017, a 32% increase from 2016, driven mainly by a spike in yogurt and whey products. Those sales were valued at $115 million in U.S. dollars, up from $86.7 million in 2016.

Comparatively, dairy trade ranging somewhere from $341 million to $751 million between the two countries still comes down to one-tenth of 1% of trade volume between the U.S. and Canada last year. U.S. exports to Canada were $341.2 billion in 2017 while Canadian exports to the U.S. were $332.8 billion.

Canada's dairy production with 941,800 milking cows would make it the third-largest dairy state in the U.S., behind California with 1.8 million head and Wisconsin with 1.28 million milking cows. Nationally, the U.S. has about 9 million milking cows. To keep Canada's dairy producers operating and largely profitable, Canada has a supply management system that it is increasingly determined to defend in the NAFTA talks.

The U.S. operates with programs such as the Margin Protection Program, which was revamped this spring because farmers and lawmakers determined the safety net wasn't strong enough. Based on the latest enrollment figures, USDA expected to issue roughly $90 million in checks this week to more than 20,000 dairy farmers because of MPP prices for the months of February, March and April.

The debate over Canadian dairy and its supply management system comes as Wisconsin Gov. Scott Walker announced last week that his state is creating a new dairy task force to make recommendation that would help the viability and profitability of dairy in his state. Walker modeled the proposal after a similar task force created in Wisconsin in 1985.

"Dairy farmers are facing challenges due to an extended period of low milk prices and market uncertainty," Walker said. "By creating this task force, industry experts can work together to create real solutions that can help our farmers, processors, and allied organizations, and to ensure that our dairy industry is not only our past, but our future."

Meanwhile, dairy farmers in states such as Wisconsin and Michigan are actually learning more about how the Canadian supply management works and asking why the U.S. can't look at a comparable model. Michigan Farmers Union will host meetings later this week in Michigan with Canadian dairy farmers.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/ES/SK)

06/18/2018 Comeback Kids

By Russ Quinn
DTN Staff Reporter

NELIGH, Neb. (DTN) -- There's no reason to be blue about FFA. In fact, it appears the national student organization, along with its iconic blue corduroy jacket, is making a comeback.

The nation's largest student-led organization in the nation is getting bigger. School districts are adding agriculture and FFA back into the curriculum again. In some cases, they work closely with the community with the long-term goal of showing that there's still opportunity in rural areas.

Neligh-Oakdale Public School is an example of the revival. The rural school district of 383 students, located 150 miles northwest of Omaha, relaunched its FFA chapter this year after a 13-year hiatus. The program was discontinued in the 2003-2004 school year because of funding issues.

Scott Gregory, superintendent of the Neligh-Oakdale Public Schools, told DTN the community had "a desire to restart" the FFA chapter as the district was in a better financial situation than when the program was dropped. The Board of Education began to explore the possibility in the fall of 2016 and after much consideration, hired Kali Bohling as agriculture teacher and FFA advisor for the 2017-2018 school year.

Local farmer Kenny Reinke is an alumnus of the Neligh-Oakdale FFA program. While not everyone favored rekindling the dormant chapter with roots back to 1931, Reinke said he, as well as many others of the community, pushed hard for a return.

Reinke said even the older women in his church would quiz him on the subject. "They definitely had a passion about it," he said.

For Reinke, he said the skills the kids learn in FFA could help them find a career and allow them to live and work in the community. Like many small towns across the Midwest, a shrinking population has been a major issue, especially in rural school districts with fewer children attending class.

NEW CHALLENGES

Bohling, the teacher hired by the district, graduated from the University of Nebraska-Lincoln (UNL) in May 2017 with a degree in agricultural education. The first-year teacher had the challenge of being a new teacher, in a new area and restarting FFA all in the same school year.

"It certainly has been a learning opportunity for me, but I have great support here," Bohling said.

The first year, she had 16 students join FFA, with membership made up of a few seniors and juniors, but mainly sophomores.

All junior high students are required to take a nine-week exploratory agriculture class in both seventh and eighth grades. Bohling's hopes this first taste will encourage students to continue sampling agriculture and FFA once they reach high school.

Bohling said most of her FFA students live in town and have a limited ag background. While a few are from farms, a majority are town kids getting an introduction into agriculture.

JOINING THE RANKS

Kristen Snodgrass and Hannah Schrader joined the FFA ranks. Snodgrass, who will be a senior this fall, will be president of FFA in the 2018-2019 school year. Schrader will be a junior and will be the FFA secretary.

Snodgrass said her family operates a corn and soybean farm, but has no livestock. After taking some animal science classes, she has decided she'd like to become a vet tech.

"I was always kind of jealous of schools who had FFA as it always appealed to me," Snodgrass said. "I have two older brothers who went to school here and they didn't get to take part in FFA."

Schrader said her experience in FFA has led her to believe she would like to be an agriculture teacher. The legacy is important too, as her father was an FFA member at this high school.

THE FUTURE

Bohling said her vision for the future of FFA at Neligh-Oakdale is not defined by how many students join the organization.

She hopes to increase the number of competitions the chapter attends in future school years after limiting the number during this first year. The group did attend the state FFA convention, held in Lincoln. This event was eye-opening for the kids as they saw how many kids in the state are involved with FFA.

The Nebraska Agricultural Education website (http://www.neaged.org/…) listed the Nebraska FFA Association with a membership of more than 8,000 members in 184 chapters across the state. Bohling said the state actually has 189 chapters at this time.

More than 4,500 FFA members attend the state convention each year. Roughly 7,000 members, advisors, parents and guests participate in the event each spring.

"One thing I really hope happens in the future here is these students have an opportunity to perhaps find viable careers from joining FFA," Bohling said.

A National FFA Organization (http://www.ffa.org/…) factsheet stated the group has 649,355 student members in grades seven through 12 who belong to 7,859 local chapter throughout the U.S., Puerto Rico and the Virgin Islands

Russ Quinn can be reached at russ.quinn@dtn.com

Follow him on Twitter @RussQuinnDTN


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06/15/2018 Ag Groups Tweet #TradeNotTariffs

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- Farm groups took to social media on Thursday as part of a last-ditch effort to get the Trump administration to back off trade tariffs the administration is expected to implement against China on Friday. The groups fear China could bounce right back with tariffs against U.S. agricultural commodities.

The farm groups, led by the American Soybean Association, started tweeting out with other business groups under the hashtag #TradeNotTariffs. Tweets with that hashtag started coming from ASA, the National Association of Wheat Growers, National Corn Growers Association, the Corn Refiners Association, the American Farm Bureau Federation and the Agricultural Equipment Manufacturers, as well as state affiliates of these groups and the U.S. Chamber of Commerce.

"ASA is kind of leading the charge here," said the group's spokeswoman, Jessica Wharton. "We need everybody on board to know, including Congress and the president, that we need trade, not tariffs."

The Trump administration is using Section 301 of the Trade Act of 1974 to implement tariffs against China, mainly over Chinese theft of intellectual property. The end game for these tariffs was for China to come to the trade table and allow more U.S. investment in China, reduce import restrictions and address intellectual property theft. Little, though, has advanced since initial trade talks late last month in China.

Friday was a date set by the Trump administration to announce specific tariffs and restrictions against China, which include a 25% tariff on $50 billion in products that involve "industrially significant technology." The actual list of products to be targeted is pegged to be released Friday, and the tariffs, according to the White House, "will be imposed on those imports shortly thereafter."

Along with the tariffs, the Trump administration will restrict investment by China in specific industries and technologies, but those restrictions may not be fully detailed until the end of the month.

Further, the U.S. will continue pressing against China in the World Trade Organization regarding theft and abuse of intellectual property rights.

The counterpunch from China is directly targeting agricultural exports from the U.S. with a 25% tariff on $50 billion in U.S. products, which includes soybeans at the top of the list. Soybean exports to China accounted for roughly $14 billion last year. Another roughly $2.5 billion in U.S. products would see a 25% tariff increase, including corn and corn products, wheat, sorghum, cotton, beef and beef products, cranberries, orange juice, and tobacco and tobacco products, according to the USDA Foreign Agricultural Service.

China, though, when it announced its tariff response, did not specify when it would implement any of its tariffs.

Further, this tariff dispute is separate from the ones that the Trump administration announced against countries for steel and aluminum imports that have upset Canada, Mexico and European Union trading partners. Those tariffs have gone into effect and are leading to retaliation at various U.S. exports, including Mexican tariffs on U.S. pork.

Back in April when the tariff salvos began between the U.S. and China, President Donald Trump also gave orders to Agriculture Secretary Sonny Perdue "to use his broad authority to implement a plan to protect our farmers and agricultural interests." Congress set up USDA to increase emergency spending in March by removing restrictions on the Agriculture secretary's ability to use emergency funds in a federal spending bill.

DTN Grains Analyst Todd Hultman noted that soybeans are facing a number of bearish hurdles in June, starting with the Chinese trade dispute. The trade dispute comes as Brazil's record soybean harvest in early 2018 limited the bullish potential of Argentina's drought and is helping China avoid buying U.S. soybeans this summer. Favorable Midwest weather since late April has given the new U.S. soybean crop a good start and may have allowed more acres to be planted than the 89.0 million USDA estimated in March. On top of all that, noncommercial traders that have been heavily net long in soybeans early in 2018 are now having to liquidate positions that are losing money rapidly.

The trade dispute has already affected U.S. soybean exports to China. Accumulated sales for the marketing year are down 7 million metric tons, or 257 million bushels, from this time last year, according to USDA. Some of the slack has been picked up by sales elsewhere, but U.S. soybean exports overall are 174 mb behind last year's pace.

Rabobank issued a brief report Thursday citing that the U.S.-China trade dispute, coupled with Argentina's drought, increased Brazil's soybean prices during harvest, though prices have backed off in recent weeks. The risk of tariffs on U.S. soybeans, however, still makes higher-priced Brazilian soybeans look more attractive to Chinese buyers.

Ohio State University released a report Wednesday stating farmers in that state "could lose more than half of his or her annual net income" if China imposes its tariffs. "There are farmers who are struggling across the state," said Ben Brown, who runs the farm management program at Ohio State University's College of Food, Agricultural and Environmental Sciences. "If the proposed tariffs go into effect, we're going to have farmers who will have to exit the industry."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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06/15/2018 DTN Field Roundup

By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- This season is setting up to be a tale of two summers.

A wide swath of the Midwest is swimming in water. Ohio farmer Keith Peters' biggest concern is the swollen Columbus River, while Indiana grower Scott Wallis has heard of neighbors erecting levies.

But more southern and western regions are parched -- irrigation pumps are working overtime where Reed Storey farms in east-central Arkansas, and Oklahoma grower Zack Rendel's corn and soybeans are baking.

This pattern isn't budging any time soon, noted DTN Senior Ag Meteorologist Bryce Anderson. "I think we are going to see this pattern continue through probably the end of June and most of July," he said. "That means a big disparity in crop yield prospects -- favorable in the north, central and east, and not as promising south and west."

DTN periodically surveys a group of producers known as DTN Agronomy Advisers throughout the season for details on fieldwork, crop conditions and other issues facing agriculture. This month, these farmers highlighted the widely varying conditions facing growers this June.

THE RAINS CAME... AND KEPT ON COMING

"We have a widely variable pattern going across the central part of the country right now -- with the northern, central and eastern Midwest getting good rains, and the southwestern Midwest through the Southern Plains taking in much less moisture," explained Anderson.

Those good rains have kept most crops happy in Indiana, Illinois, Iowa and Ohio, farmers told DTN.

"Our corn is from knee tall to head tall and growing at an unreal rate," said Wallis, who farms in southwestern Indiana. John Werries noted that, in central Illinois, good emergence and a small planting window have produced lush, uniform fields of corn and soybeans.

Those same rains stalled planting and forced crop changes farther north, however.

In southeast Michigan, Raymond Simpkins switched half his corn acres to beans, as endless rains kept him out of the field in May. His crops are finally coming up and they look good, but small, he said. In Minnesota, Jeff Littrell and his son, Rhett, had to leave 40 acres of corn and 38 acres of soybeans unplanted.

"We threw in the towel and decided to use prevent plant," Jeff said. "Rhett went five days past the final plant date on corn and the final plant date for soybeans was June 10th. I planted corn until June 26th in 2013, and I told myself never again."

Even within this region of heavy rains, small flash droughts have popped up and left some growers frustrated. Where Josh Miller farms deep in southern Illinois, temperatures soared over 100 this week, and rain has been scarce. "Some corn is starting to twist pretty badly," he noted. "The corn is variable ... from really good to fairly crappy."

After an extremely soggy May in Michigan, "We went from mud to dust in a matter of a week," after strong winds and high temperatures combined to crust over flooded soils, added Simpkins.

"THE SPIGOT TURNED OFF AND THE OVEN KICKED ON"

The U.S. Drought Monitor currently shows a wide arc of plentiful moisture swooping across the Corn Belt. Those outside that well-watered arc are hurting. (See the monitor here: http://droughtmonitor.unl.edu/….)

"Western Illinois, southern Iowa, Missouri and onward west and southwest are left out," Anderson said. "This corresponds with the edge of an upper-level high-pressure ridge that has kept things hot and dry in the Southern Plains and bubbled into the southwestern Midwest."

With nothing coming from the sky, Arkansas growers are looking underground for their moisture, Storey said.

"Here in east-central Arkansas, we're wide-open irrigating corn, laying poly pipe in the cotton and soybeans, and cranking the pivots up in the cotton and soybeans," he said. "Needless to say, we're praying for some of the Good Lord's irrigation."

Irrigation is not an option for Zack Rendel, who farms corn, soybeans, sorghum, canola and wheat in northeastern Oklahoma. This month, "The spigot turned off and the oven kicked on, and now we have a bunch of pineapple plants out there," he said. A timely one-inch rain mid-week may have saved some of his cornfields from becoming silage, but the area is still very dry.

Wheat harvest has started, and many growers are holding off on double cropping soybeans, Rendel said. "Where it's dry, guys just won't plant anything until we get a rain because the ground is so hard and dry that we have to sink 2.5 to 3 inches to get moisture," he said.

Ever the optimist, though, he noted that the heat has helped canola and wheat dry down quickly and may push wheat protein levels high enough to collect decent premiums after harvest this year.

Until then, you'll find Rendel trying every rain trick in the book.

"We washed all the trucks -- a good $12 wash -- we left all the car windows open, even left a pallet of beans out!" he said. "It didn't rain that time. But we're still trying."

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow her on Twitter @Emily_Unglesbee

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06/15/2018 The Market's Fine Print

By John Harrington
DTN Livestock Analyst

Not to get too churchy and possibly spoil happy hour, but "Come, Labor On" is one of my favorite hymns. As a young boy, I can remember gleefully seeing it on the program of the early service (i.e., pre guitars, keyboards and praise choirs) and singing the old standard with great gusto:

"Come, labor on!
Who dares stand idle, on the harvest plain
While all around him waves the golden grain?
And to each servant does the Master say,
Go work today."

The work-inspiring lyrics were written by a Scottish spinster named Jane Borthwick, and growing up around a bunch of diligent farmers and ranchers, I thought she had expressed our calling and purpose just about right.

Later in life, my impression was reinforced by stories of cattle pioneers from Scotland, giants like Murdo Mackenzie, the hard-driving manager of the legendary Matador Ranch whom Theodore Roosevelt once called "the most influential cattleman in America."

Never mind the apparent conflict in stereotypes, the strange tension between penny-pinching frugality on one hand and the riskiest business model this side of Vegas. When it came to taming the West (a quest not without its shameful chapters, to be sure), few proved more successful in spurring cows and cowboys to "labor on" than the focused highlanders of Scotland.

But I digress.

When we sang this hymn at an old friend's funeral several weeks ago, the profound lyrics sorted my thoughts in a direction that was not altogether proper given the solemn occasion. With due respect to the beloved deceased (who was not a stranger to the challenges of beef and pork production), I found myself wondering about the intensifying labor shortage within the meat industry.

Come, labor on, indeed. Please!

While virtually all meat production sectors have aggressively kicked into high expansion gear over the last several years, the pool of packing house workers has clearly ebbed more than flowed. Despite the ongoing march of robotics through kill floors and cutting rooms, slaughter and processing needs seem to be steadily surpassing plant capacities.

Professional headhunters may be seen as lifesavers by HR directors at Tyson and Hormel looking for top executives and managers, but they're not very helpful in identifying a dependable source of line workers. The realities of tough physical demands, potentially dangerous chores and relatively low pay largely explain this dilemma in necessary recruitment.

In fact, the long-standing nature of this general job description explains why packers have historically relied upon unskilled immigrants who typically find it necessary to start at the bottom of the work ladder in hopes of building a more promising resume. Meat processors have always known that U.S. immigration policy is too important to be exclusively left to politicians and academics.

Hold that thought.

Last week, signs of this chronic labor shortage one again stormed into view when the new Sioux City pork plant owned by Seaboard Triumph Foods (STF) announced that the launching of a second shift (potentially adding 10,000 head per day to the facility's total capacity) would not be unveiled this summer as previously advertised, but would rather be "indefinitely" postponed. Why? STF simply can't find, train and retain enough workers.

Indeed, the scuttlebutt among well-placed chain-speed monitors has long been that labor problems at times make it difficult for both STF and the Clemens Food Group (operating a relatively new facility in Coldwater, Michigan) to even fully staff first shifts.

Don't think for a minute that beef processors are free from worry when it comes to mating labor resources with slaughter needs and plant capacity. Anxiety in their sector has been awkwardly building through the decade.

On one hand, the number of cattle slaughter facilities has been falling away faster than friendly U.S. trading partners. No fewer than nine processing plants have closed since the start of 2013, representing a daily slaughter capacity of 14,850 head.

On the other hand, herd size has been ambitiously growing over the last four years with the total cattle population surging from 88.5 million to 94.4 million.

Slaughtering more with less daily shackle space has only been accomplished through the managerial finesse of scheduling and manning large Saturday kills. But how long can packers demand so many weekly hours from workers without accelerating the already breakneck pace of turnover? I think it's a legitimate question.

None of these headlines and windshield surveys can be playing very well in the front office of Prestage Farms where executives are trying to put the final touches on yet another new pork plant scheduled to open this fall near Eagle Grove, Iowa. On paper, this additional facility is designed to process 10,000 finished hogs daily and employ as many 1,000 people.

Unless some mad but brilliant embryologist at Iowa State quickly perfects the cloning of line workers, Prestage stands to be the latest victim of idle capacity, limited not by inadequate hog numbers but by the industry's chronic dearth of labor.

Dr. Ron Prestage, company president and professional veterinarian, doesn't have to be told that a trained and reliable workforce won't just bubble from a test tube or suddenly appear out of thin air. Realistically, he has indicated that his new plant may simply have to be prepared to raise wages (e.g., maybe from a standard base of $10-$12 per hour for line workers to $14-$15 per hour) to attract the right quantity and quality of employees.

In other words, Prestage Farms is already considering the likelihood of being forced to steal from the already short payrolls of their competitors. And there's nothing wrong with that. In fact, given the realities of the situation, it's just good business.

Yet what may solve Prestage's labor problems could easily compound worker shortages at Tyson and STF and JBS. In truth, the spark of higher wages could spread like a flash fire throughout the entire meat processing sector

Such a scenario seems like it fell right out of my Econ 101 textbook: "Tight labor supplies ultimately trigger higher wages necessary to motivate more would-be workers into the job market." I don't have to turn the page to know what follows. Higher wages stoke the general furnace of inflation, which in turn forces interest rates higher.

Needless to say, all of this goes far in explaining why the Federal Reserve increased a key interest rate again Wednesday, boosting the federal funds rate for the second time this year (i.e., into a range between 1.75% and 2%), which will trigger higher rates on credit cards, home equity lines and other kinds of borrowing.

So, not only will meat processors keep struggling to assemble and maintain an efficient workforce for the unforeseeable future, operating costs will relentlessly plow higher, both in terms of wages and interest.

But even more frustrating, some of the basic lessons of Econ 101 may be fraught with exceptions and contingencies. For example, many U.S. citizens may simply be beyond recruitment for such work, almost regardless of the hour wage. A host of other conditions such as location, qualify of life, job safety and career advancement may simply be seen as deal-breakers.

Successfully growing the labor to keep pace with expanding numbers of cattle, chicken and hogs virtually mandates that packers and the meat industry in general (i.e., higher labor and interest charges will eventually be passed on to consumers, negatively affecting the potential of both domestic and export demand for all meat products) play a critical role in reforming the thorny and emotional challenge of immigration and foreign workers.

While President Donald Trump and his closest supporters still love to talk about a Mexican-funded "wall," even the president has expressed desire for a "beautiful door" in the wall, one that would allow much-needed workers and help fill certain labor pools that are dangerously dry. We need to help lower the unhelpful rhetoric and move the immigration mess in the direction of a "come-labor-on" solution.

Agriculture can no longer afford to pretend that it doesn't have a dime in this critical game. Truth is, it's got a sackful.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow him on Twitter @feelofthemarket

(AG)