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Commodity Communicator Weekly

May 3, 2013


MAY SUPPLY/DEMAND REPORT WEBINAR. . . . .Friday, May 10 at 12:30 p.m. . . . .The USDA will release its new U.S. and Global Agriculture Situation and Outlook tomorrow.  Join Gene Martin, Farm Bureau Senior Market Analyst and Scott Stiles, UAEX Economist will break down the report and give insight into how the report will affect the markets.  

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Conference Call
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FARM BUREAU LEADERS TAKE VETERINARY SERVICES TOUR

The chairmen of Farm Bureau’s beef and equine divisions along with the chair of the animal care committee, UofA Animal Science Department Head, chair of Arkansas’ Veterinary Examining Board and staff coordinators for the beef, equine, dairy and poultry divisions visited the Colleges of Veterinary Medicine at Mississippi State University and Louisiana State University April 24-26.  The mission of this group was to gain insight and explore future avenues to address the availability of large animal veterinary services in rural areas.  

ARKANSAS BEEF COUNCIL SETS BUDGET FOR 2013-2014 FISCAL YEAR

The Arkansas Beef Council has set a preliminary budget for the upcoming fiscal year that is 15% lower than a year ago.  This reduced level of budgeting was necessary due to the decline in projected revenues (beef checkoff collections). Following the droughts of the past two years which resulted in a significant number of cows being liquidated, the number of cattle marketing in Arkansas has been declining over the past seven months and is expected to decline further throughout the balance of 2013 and into 2014.  A final budget will be determined in July.

SPRING LIVESTOCK SHOW
The state Spring Livestock Show is scheduled May 2-4 at the state fairgrounds in Little Rock. Arkansas Farm Bureau serves at the title sponsor for this event.

SOUTHERN ANIMAL HEALTH OFFICIALS TO MEET IN LITTLE ROCK

The Southern Section of the U.S. Animal Health Association will meet in Little Rock May 6-8.  This conference brings together animal health regulatory officials from across the South to address disease and other animal health-related issues.  Arkansas Farm Bureau is co-sponsoring this conference.

ARKANSAS WATER PLAN MEETINGS
Arkansas Natural Resources Commission will hold seven public meetings on existing and future water use and needs forecasting during June of 2013. The schedule for the public meetings on the Arkansas Water Plan is as follows:
  • June 3, Arkadelphia: Henderson State University- Garrison Center Auditorium, 6:30 p.m.
  • June 4, Fort Smith: Fort Smith Convention Center, 6:30 p.m.
  • June 6, Stuttgart: Phillips Community College- Grand Prairie Center, Salon B, 6:30 p.m.
  • June 6, Harrison: North Arkansas College- Durand Center, Durand B, 6:30 p.m.
  • June 17, Jonesboro: Arkansas State University Convocation Center, 6:30 p.m.
  • June 18, Forrest City: East Arkansas Community College Fine Arts Center Banquet Hall, 6:30 p.m.
  • June 20, Smackover: Arkansas Museum of Natural Resources, 6:30 p.m.
AMENDMENT IN CR TECHNICALLY POSTPONES SPCC ENFORCEMENT DATE
EPA’s Web site still lists the SPCC compliance date as May 10, 2013; however, the recently adopted Continuing Budget Resolution included an amendment by Sens. Mark Pryor and Jim Inhofe prohibiting EPA from using any funds for enforcement activities related to agriculture essentially postponing the SPCC compliance deadline until the end of FY13 or September 30, 2013.

The two senators also have legislation (S. 496) that would increase the threshold capacity for a single tank to 10,000 gallons and the cumulative storage volume to 42,000 gallons. The proposal would also place a greater degree of responsibility on the farmer or rancher to self-certify compliance if it exceeds the exemption level.

As a reminder, the compliance deadline only applies to new farms, i.e. those beginning operations after August 16, 2002. According to EPA, farms operating on or before August 16, 2002, should have already had an SPCC plan in place and should be updating their plans to conform with the new requirements.

For those Farm Bureau members who do not want to run the risk of a legislative solution failing, SPCC planning services can be arranged by contacting ECCI at 501-975-8100.

For more information, go to: EPA - SPCC for Agriculture.

2013 NATIONAL VALUE ADDED AGRICULTURE CONFERENCE MAY 19-21, 2013
In these trying economic times, growers and agribusinesses are actively seeking ways to maintain, increase profits, and/or diversify their operations.  The 2013 National Value Added Conference provides a wonderful opportunity to enhance understanding, identify resources, and to network with other service providers as well as innovative entrepreneurs.  

The theme of the 2013 Conference is "Local Economic Development Through Entrepreneurship".  Please make plans now to attend the 15th Annual National Value Added Conference to be held in Rogers, Arkansas (May 19-21) at the Embassy Suites Northwest Arkansas - Hotel, Spa & Convention Center.  Featured conference speakers include Joe Quinn, Wal-Mart Senior Director of Issue Management and Strategic Outreach, and Doug O'Brien, Deputy Under Secretary for Rural Development USDA.

Conference registration

Conference Hotel

Conference Agenda


USDA ANNOUNCES SECOND SIGN-UP DEADLINE FOR BAYOU METO (MIDDLE) MISSISSIPPI RIVER BASIN INITIATIVE PROJECT
Farmers and landowners in portions of Arkansas, Jefferson, Lonoke and Prairie counties in Arkansas have until May 17, 2013, to submit applications to receive financial assistance to implement conservation practices through the Bayou Meto (Middle) Mississippi River Basin Healthy Watershed Initiative (MRBI) project.  The ranking process will be completed by May 31, 2013.
 
A complete list of approved practices, information about the project, and the project area map is available at www.ar.nrcs.usda.gov/programs/mrbi.html.

CATTLE GAIN MOST IN WEEK ON RISING US BEEF DEMAND; HOGS STEADY…..Cattle prices have responded recently on signs of climbing demand for U.S. beef.

Wholesale beef has surged to $1.9949, the highest since at least January 2004, U.S. Department of Agriculture data show.

“When you’ve got better meat prices, cash markets can follow that, and those fundamentals can help the futures rally too,” Paul Beere, a grain and livestock adviser at Prime Agricultural Consultants in Brookfield, Wisconsin, said in a telephone interview. “It’s the temperatures warming up, and you’re starting to see people grill out.”

    
COURT REFUSES TO DISMISS POULTRY FARMER'S SUIT AGAINST EPA…..Poultry and livestock farmers scored a win Monday when a federal court rejected efforts by the Environmental Protection Agency to dismiss a case brought by West Virginia poultry farmer Lois Alt, according to the American Farm Bureau Federation.

Alt had challenged an EPA order demanding that she obtain a Clean Water Act discharge permit for ordinary storm water runoff from her farmyard. Despite EPA's recent withdrawal of the Alt order, the U.S. District Court for the Northern District of West Virginia ruled that the case should go forward to clarify for the benefit of Alt and other farmers whether, as EPA contends, discharge permits are required for ''ordinary precipitation runoff from a typical farmyard.''

HORSE SLAUGHTER BILL IS REVAMPED, REINTRODUCED….U.S. Congressman Pat Meehan (R-Pa.) and U.S. Sen. Mary Landrieu (D-La.) introduced the Safeguard American Food Exports Act of 2013 (H.R. 1094, S. 541) on March 12. This legislation, known as the ''SAFE Act,'' is a new take on the issue of horse slaughter. It would amend the Federal Food, Drug, and Cosmetic Act to prohibit the sale, transport, import or export of equines, or their parts, to be slaughtered for human consumption.

The American Veterinary Medical Association along with other meat industry groups, including Farm Bureau,  are currently reviewing the SAFE Act, They have consistently been opposed to similar measures because they lack alternative options for long-term placement and care of the more than 100,000 horses that currently go to slaughter each year.  These industry groups believe that if the SAFE Act passes, the unintended consequences to the welfare of horses in the United States would be detrimental.

HOUSE ENERGY COMMITTEE HEARS FROM BIOFUELS STAKEHOLDERS
..…A biofuels coalition told the House Energy Committee the federal Renewable Fuel Standard “ensures that our nation will continue down the path of reducing our dependence on oil, produced at home or abroad, cutting greenhouse gas emissions and breaking the stranglehold that the global oil market has on the price that American families and businesses pay at the pump.” The assessment came in a statement Fuels America submitted in response to a second series of white papers issued by the committee as the first step in a review of the RFS.

Commenting on a committee paper that examined the impact of the RFS on the agriculture sector, Fuels America wrote, “The future of the biofuels sector lies in the cellulosic and advanced spaces where billions of dollars have been invested in research and development, testing, and commercialization of an entire industry that did not exist in 2007.”

GROUPS SEEK ENERGY TITLE SUPPORT FROM LEADERSHIP OF AG COMMITTEES…..More than 100 farm, renewable energy and rural advocacy groups signed off on a letter sent Monday to the House and Senate Agriculture Committee leadership calling for support and mandatory funding for an energy title in a new farm bill.

The letter was delivered in anticipation of both panels marking up a new farm bill later this month. Both committees are expected to draft legislation that delivers tens of billions of dollars in farm program spending cuts over the next 10 years, resulting in harsh competition among a variety of production and nutrition interests for remaining funds. The letter makes the case that continuing an investment in farm energy programs will help raise revenue by boosting rural economies.

Citing programs like the Rural Energy for America Program, Biomass Crop Assistance Program, Biorefinery Assistance Program and Biobased Markets Program, the letter says thousands of direct and indirect jobs have been created or saved in rural areas since 2009 and more than 12,000 rural small businesses, agricultural producers and advanced biofuel refineries have benefited.

CROP PROGRESS REPORT…..Monday’s Crop progress report showed planting across the U.S. continues lag well behind the 5-year average.   The snow storm that pounded much of the Midwest this week is expected to postpone plantings even more.  It is unclear how this will affect the crop mix this year.  It should be noted the prevented planting date for corn in Iowa is May 31, and soybeans is June 15.

Planted as of April 29
                                   2012    2013    5-year Average
Corn                 U.S.    49%       5%             31%
Sorghum          U.S.    29%      27%            27%
                Arkansas    92%     37%            59%
Cotton              U.S.    25%     14%             20%
                Arkansas    46%      2%             20%
Rice                 U.S.    72%      44%            57%
                Arkansas    91%     40%            62%


SORGHUM GAINING INTERNATIONAL MOMENTUM..…Given corn's quantitative dominance in most markets, some buyers unfamiliar with sorghum have traditionally considered it a "substitution" energy feedstock, in place of corn, for animal rations. But increasingly, international buyers are standing up and taking notice. Traditionally, as much as three out of every 10 bushels of U.S. sorghum would get shipped to Mexico alone. With aggressive promotion programs developed by the U.S. Grains Council, other countries are starting to take note of sorghum's value. This year, Italy and China have bought U.S. sorghum for the first time on a large scale.

"The Council is also getting requests from Latin America wanting samples of U.S. sorghum and containerized shipments," added Alvaro Cordero, the Council's lead for sorghum programs. "Traditionally, sorghum is only shipped in bulk via rail or vessel, but recent market conditions prove the industry must evolve to meet the demands of a diversifying customer profile."

ENERGY EFFICIENCY REAP GRANTS AVAILABLE…..On Tuesday, the USDA announced additional funding for the Rural Energy for America Program or REAP for short.  Previously, the program was expected to have around $21 million, with around $200,000 of that allocated to Arkansas; now the USDA has announced the program will have $60 million nationally, which means Arkansas should have more than $500,000 available to producers.  May 31 is the deadline for applications, however information for the grant and energy auditor will need to be turned in next week.
        
REAP provides a 25 percent cost share for implementing energy efficient or renewable energy projects on a farm.  REAP can be used to cover virtually any energy upgrades on your operation:
Irrigation Upgrades – Replace Power units, Pivot renozzleing, replacing a well
Poultry House Upgrades – Ventilation, Heaters, Insulation
Renewable Energy - Windmills, Solar Panels, and Biomass Generators

POULTRY INDUSTRY WILL BE LOOKING FOR WHEAT..…Given the short corn supplies in the US, poultry companies are going to be buying wheat to feed their birds.  There are a number of brokers that have been looking to source wheat for the mills.  Producers are encouraged to look beyond traditional elevators for delivering their grain as prices and basis to the feed mills may be more advantageous.  

POTENTIAL NEW CORN MARKET COMING TO ARKANSAS
…..There is interest in starting a new coop in Arkansas.  One producer meeting has already been held, and more are being scheduled to discuss potential of a “next generation” marketing cooperative in Arkansas.  The hopes of this type of coop would be to give producers additional selling power in the market.  Initially the coop would help corn producers capture additional premiums in the poultry market.  More information will be available in the coming weeks as the steering committee is formed.


US WHEAT & BARLEY SCAB INITIATIVE TO LOOSE FUNDING…..The President’s FY2014 budget terminates $4.71 million (post-FY13 Sequester) in USDA Agricultural Research Service (ARS) funding for the US Wheat & Barley Scab Initiative.   Impact of funding terminations:
 
Elimination of the effective federal/state/grower/industry partnership, with its substantial leveraging of state and federal research infrastructures to address scab through a coordinated national program

Closure of four laboratories in three states (ND, MN, VA) that analyze 62,578 barley and wheat grain samples a year for mycotoxin content for state and federal scientists throughout the US

Elimination of warning systems that forecast when weather conditions favor scab and provide on-line, text messages, and email scab alerts to growers and industry personnel, allowing preventative measures to be taken.

ENROLLMENT IN SNAP CONTINUES TO INCREASE…..Spending on the program in fiscal year 2012 was $78.3 billion, a record amount, and fed more than 47 million people, also a record. Since the economic collapse in 2008, SNAP enrollment has increased an average of 15.4% a year. The 2009 stimulus bill also raised the maximum amount of SNAP benefits; that will end Oct. 31 this year.

The Congressional Budget Office projects SNAP is at its peak. The CBO estimates that in 2022 the program will have 9 million fewer participants than now and will spend $60 billion less over that decade. However, those lower cost projections aren't credited as budget savings like they would be in other programs.


FARM BUREAU BANK. . . . . Farm Bureau Bank offers credit cards, deposit accounts, vehicle loans, mortgage loans, business services, and student loans.  Visit the website at www.farmbureaubank.com or call 1-800-492-3276 for more information.

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