Agriculture | Field 2 Field

March 10, 2020March 10, 2020

Coronavirus headlines disrupt commodities

Here’s the complete conversation with Arlan Suderman of INTL FCStone on the commodity markets reaction to the coronavirus outbreak.

Coronavirus headlines and the commodity markets. It’s been a while since we’ve seen the commodity markets this reactive to news headlines on an almost daily basis. While it’s not unheard of, one commodity expert says it’s been over a decade since the markets have been hit this hard by the news. Arlan Suderman is the Chief Commodities Analyst for INTL FCStone, talks about why the news coronavirus headlines seem to be playing havoc in the commodity markets.

“I think that’s a question a lot of people have these days,” Suderman says. “It’s a valid point to discuss.

“I was initially downplaying the market reaction in January,” he recalled, “before doing some research at the end of that month. This is the type of virus that’s going to trigger a lot of fear in people. When you have that much fear, the fear of the coronavirus headlines will be worse than the threat of the virus itself.”

He points out that when people get afraid, they stay home, they don’t travel, and they don’t go out in public as much. That’s been the case in China as everywhere the disease has hotspot outbreaks, everybody stays home.

“Shanghai, a city of millions of people, is now a ghost town,” Suderman said. “Now we’re seeing pictures of that in lots of other places, including Italy.

“When people stay home and don’t go out, they tend to consume less food,” he added. “That includes consuming less meat and a lot more starches. Overall, it does tend to change consumption patterns a lot.”

People also consume less energy in these situations as they aren’t driving a lot while airlines are also canceling flights as people don’t want to travel. Less consumption in the energy markets hurts the biofuels markets as well.

Even things like shipping commodities get much more complicated as people are staying home, thanks to the coronavirus headlines. That’s been the case in China and is becoming prevalent in other countries too.

“People didn’t show up to work,” he said. “Ports become congested, ships don’t get unloaded, and shipping slows way down. That’s lost demand you likely don’t get back. You may get some of it back, but not all.

March 3, 2020March 3, 2020

Hemp license application deadline is March 31

Hemp is being called a “new tool” in farmers’ toolboxes. I’m curious to see what kind of production Minnesota will see during the 2020 growing season. Does anyone have any idea as far as what kind of production we’re looking at this year?

Anyway, those farmers wanting to grow or process the crop in Minnesota in 2020 must apply for a license with the Minnesota Department of Agriculture (MDA) by March 31.

This is the fifth year of the state’s Industrial Hemp Program. Last year, 550 people held licenses to grow or process hemp. Over 7,300 acres and 400,000 indoor square feet were planted in Minnesota.

“We believe in the potential of the developing industry,” said Assistant Agriculture Commissioner Whitney Place. “We want to ensure that everyone who would like to grow and process it in Minnesota is able to do so. They simply need to apply by March 31.”

The online application for growers and processors can be found on the MDA website at www.mda.state.mn.us/industrialhemp. Along with the online form, first-time applicants need to submit fingerprints and pass a criminal background check.

The 2018 Federal Farm Bill legalized hemp as an agricultural commodity. Last fall, the U.S. Department of Agriculture (USDA) released an interim final rule that outlined state and tribal plans for growing the crop. Minnesota is continuing under the existing pilot program in 2020.

Questions about the MDA’s Hemp Program should be sent to hemp.mda@state.mn.us or 651-201-6600.

February 21, 2020February 21, 2020

Grain bin safety hits home in South Dakota

Grain Bin safety. I know you as farmers get tired of the topic. We hit it hard once a year during National Grain Bin Safety Week. But, there’s a reason we in the farm media hit the topic hard. People still get hurt or killed every year, no matter how long they’ve been in the business of farming. Farming is a dangerous profession; the most dangerous in America.

Really, it only takes a moment for tragedy to happen. I can’t imagine what it’s like to know that a family member died by being crushed under a mountain of grain and not being able to breathe. But I know of someone who lived through the nightmare. She’s the current governor of South Dakota.

National Grain Bin Safety week is February 16-22 this year. National Grain Bin Safety Week is a subject that hits home for South Dakota Governor Kristi Noem, who grew up on a farm in Hamlin County and lost her father in a grain bin accident…tape

She says farmers and ranchers work with dangerous equipment every day…tape

While you may not think you have time to slow down, Noem reminds producers theirs aren’t the only lives affected if something tragic happens…tape

Noem encourages producers to evaluate safety procedures and equipment on their farms and ranches and to make adjustments when needed.

Older farmers aren’t the only ones hurt in accidents. Twitter was recently ablaze with sadness over the loss of a young man who’d barely lived around twenty years. It only takes a second for life to change forever. It’s worth taking a few extra minutes to be safe. I know how the grind of farming wears on patience. It’s worth it to your family members to have you come home a few minutes later, especially if it’s the difference between life and death, which it certainly can be.

February 21, 2020February 21, 2020

Water quality awards given out to two Minnesota farmers

Water quality is a hot topic of conversation in Minnesota right now, with the state’s farmers at the forefront of the discussion in award-winning fashion.

Two Minnesota farmers are being recognized for their commitment to agriculture, water quality, and wildlife. Randy Schmiesing of Stevens County, as well as Tom Cotter of Mower County, were recently given the new Minnesota Agricultural Water Quality Certification Program (MAWQCP) wildlife endorsement at the Pheasants Forever National Pheasant Fest in Minneapolis. Schmiesing and Cotter are the first farmers in the state to receive the endorsement.

“Conserving our natural resources for future generations to enjoy has been a lifelong goal and commitment,” said Randy Schmiesing. “We are proud to be one of the first farms to be certified by the Minnesota Department of Agriculture for the wildlife endorsement through the Minnesota Agricultural Water Quality Certification Program and encourage other farmers to pursue this wildlife endorsement and reap the many benefits it achieves.”

Agriculture Commissioner Thom Petersen presents Tom Cotter of Mower County with his Minnesota Agricultural Water Quality Certification Program wildlife endorsement. (Contributed photo)

Agriculture Commissioner Thom Petersen presents Randy Schmiesing of Stevens County with his Minnesota Agricultural Water Quality Certification Program wildlife endorsement (Contributed photo)

MAWQCP launched the wildlife, soil health, and integrated pest-management endorsements in December as additions to the 10-year certification a farmer or landowner receives in the program. The certification program partnered with various non-profit organizations like Pheasants Forever and the Minnesota Soil Health Coalition, as well as state agencies, to develop the endorsements.

“Many conservation practices targeting water quality also have benefits for other conservation goals, such as wildlife,” said Agriculture Commissioner Thom Petersen. “With the help of organizations like Pheasants Forever, we want to recognize farmers who are making efforts to protect our numerous natural resources in Minnesota.”

“Pheasants Forever appreciates the opportunity to work alongside the Minnesota Department of Agriculture and other partners in highlighting the new wildlife endorsement through the MAWQCP at Pheasant Fest,” said Tanner Bruse, Agriculture and Conservation Programs Manager, Pheasants Forever. “It’s our honor to be a part of the recognition of those implementing conservation practices that represent a win-win scenario for their operation, soil, water and wildlife. We congratulate them and thank them for their stewardship.”

Certified producers who achieve an endorsement will receive an additional sign for their farm and recognition for their conservation excellence.

Certified farmers and landowners interested in an endorsement, or those interested in in earning a certification in water quality, can contact their local Soil and Water Conservation District. They can also visit MyLandMyLegacy.com.

About the Minnesota Agricultural Water Quality Certification Program

The Minnesota Agricultural Water Quality Certification Program is a voluntary opportunity for farmers and agricultural landowners to take the lead in implementing conservation practices that protect our water. Those who implement and maintain approved farm management practices will be certified and in turn obtain regulatory certainty for a period of ten years. The program is available to farmers and landowners statewide. To date, the program has certified 832 farms totaling 566,862 acres.

February 2, 2020February 2, 2020

Coronavirus and Possible Effects on Commodity Markets

Coronavirus. As it continues to make headlines, commodity experts are wondering what kind of effect the spread of the virus will have on markets. Joe Vaclavik, President of Standard Grains in Chicago, says the outbreak will have some effect, but it’s hard to tell what kind or for how long.

“It’s not a positive. I don’t know that it’s the biggest negative in the world. It could be, and that’s why you’re seeing liquidation in some of these markets, like the stock market, and that’s why you’re seeing the grain markets soften up. Nobody wants to be long in this stuff. The Coronavirus probably goes the way of SARS, or some of these other similar types of outbreaks that we’ve last a month, maybe two months, maybe the better part of a year. Then, it probably makes its way out of the headline.”

He says the possibility of a significant impact on markets has likely grown over the past couple of weeks.

“There’s always that risk that it turns into something much bigger. It could eventually disrupt the flow of trade. Maybe there’s a country out there that decides to throw up trade barriers and says ‘hey, we don’t want corn from the U.S. because they’ve got too much of that virus going around. There’s always that sort of risk on the table.”

Mike Zuzolo, President of Global Commodity Analytics in Kansas, says the virus will likely have a significant impact on China’s poultry flocks. Separate reports have millions of chickens “on the edge of death.” But they aren’t necessarily sick with Coronavirus.

“Animal feed suppliers cannot get their shipments through, raw materials can’t get through, and this also corresponds with another article from the South China Morning Post that said hedging is not being done, soy meal is not being hedged, so soybeans are not being bought. I think what you’re looking at is probably pent-up demand for the livestock industry and that 300-million chickens die because of not being fed because of Coronavirus. That number of pounds of protein, you’re going to have to replace, eventually.”

There is a long-term buying potential for commodities, but only if the virus outbreak doesn’t last longer than reports are suggesting.

“If China and the scientists are correct and we see a peak in the maximum pressure of this virus, outbreaks of this virus, and, in the next 7-10 days, the price action we’re seeing right now will not last. It will set up a long-term buying potential for commodities.”

Again, that’s Mike Zuzolo of Global Commodity Analytics, as well as Joe Vaclavik of Standard Grains.

January 4, 2020January 4, 2020

Grain Markets put 2019 in the rearview mirror

Here’s the full conversation with Joe Vaclavik of Standard Grain in Chicago. You can download it on your computer by clicking on the three dots on the right side of the player. Play it here on your mobile device.

Grain Markets officially bid 2019 a not-so-fond adieu. Like most other segments of American agriculture, grain farmers are more than happy to put 2019 in the past. Joe Vaclavik, founder and president of Standard Grains in Chicago, says last year didn’t start off well in the grain markets and it just kept going for the next 12 months.

“We had a pretty comfortable, if not burdensome supply situation entering the calendar year, so, the calendar year kind of began similar to what we’ve seen the last two, three, four years, a comfortable supply-demand situation, not anything terribly tight. Low prices, farmers not making a ton of money, you got the trade war going on, a lot of overall negative factors I would say to start the year.”

He says the spring is when things began to get “interesting.”

“Both in the markets and the weather. We basically sold the markets off until about that May time frame, that I think traders started to realize that we had some serious weather problems. Wet weather, cold weather, planting delays continued, and typically we are always told the crop’s always going to be planted, and planting delays are not a cause for concern.”

However, as the spring continued, things turned more serious in the markets.

“Planting delays turned into a major concern. There was a point in time in late May into maybe the mid part of June where we just had no clue what type of production was possible, and out of that, we had a very significant crop scare rally in the corn market and in the soybean market, to a lesser extent.”

Farmers continued to plant corn long past what would be a normal planting date. Vaclavik says the market was rallying as farmers continued to plant, even into early July in a few locations. He says the market peaked in June because it bought a “whole bunch of corn acres” that wouldn’t have been there otherwise.

Vaclavik says farmers faced challenges from a weather standpoint, logistics, and from a demand standpoint with trade challenges in 2019. With all that stacked against them, the question is how much grain U.S. farmers produced last year. Vaclavik says the answer depends on who you ask.

“A lot of people think that the numbers USDA has put out are just not achievable given the late planting, the wet spring, the late harvest, so there’s still some debate out there. I’m not one to tell you with any degree of certainty that we know for sure what the crop is, and we’ve got this big report on January 10, which is the final crop production report, and I suppose if USDA is going to make any sort of sweeping adjustment, it probably comes on that date.”

Again, Joe Vaclavik is the president of Standard Grains in Chicago.

December 28, 2019December 28, 2019

Meat Sector Looking for 2020 Rebound

Here’s the complete podcast with Mike Zuzolo. You can play it here or download it by clicking on the three dots on the right side of the player.

“Meat, the redder, the better.” Words of wisdom from the grill master (me). However, those folks who raise that red meat (which includes all types of the protein products in the meat case at your local grocery store), for the most part, had a difficult year.

The U.S. ag sector has to be happy to see the end of the calendar year 2019. It was rough, which might be the understatement of the century so far. I’ve been doing a series of interviews for the National Association of Farm Broadcasting News Service (I’m the assistant editor/reporter) that looks back at 2019 and peeks ahead to next year. I caught up with Mike Zuzolo, President of Global Commodity Analytics in Atchison, Kansas.

2019 was not good for most sectors of the U.S. ag economy, including the protein sector. “No, it wasn’t,” Zuzolo says. “Given the packer break-evens being in the hundreds of dollars for much of the year in cattle, and given the cash prices of hogs struggling to get above $50 live prices, as well as seeing that African Swine Fever was decimating half of the world’s hog herd, I’d say 2019 was a very big disappointment to the cattle and hog industry.”

He said the challenges didn’t just include the trade troubles that dominated headlines throughout the year, they also included a major fire at a Cargill plant in Holcomb, Kansas. Zuzolo said that shot cattle prices sharply lower.

“Prices went below break-evens and they didn’t recover for several weeks,” he recalled. “In my opinion as a livestock analyst, it really shouldn’t have hit the markets quite that hard. The market saw cash prices for cattle collapse from around $120 to $100 for several weeks. At the same time, ground beef and boxed beef prices shot sharply higher because of expectations for tighter supplies.”

Cattle producers took a major hit at that time. The good news is I want to leave you is that Zuzolo sees potential for several bright spots ahead for the protein sector in 2020.

You can find Mike’s website at https://globalanalytics.wpcomstaging.com/

December 18, 2019December 18, 2019

Dairy Assistance Program Enrollment Reopened

The Minnesota Department of Agriculture (MDA) is reopening enrollment in its Dairy Assistance, Investment, and Relief Initiative (DAIRI) program for eligible milk producers through the end of the year.

Producers who have locked in five years of coverage through the USDA Farm Service Agency’s Dairy Margin Coverage (DMC) program and who have not already successfully enrolled in the Dairy Assistance program can apply.

The MDA has already issued $3.4 million to about 1,800 producers representing more than 1,550 farms in Minnesota through the program in its first round of payments.

Producers not yet successfully enrolled will not receive the first round of payment, but may receive a check for the second round of dairy assistance, which will be determined after all new enrollments have been received.

In order to qualify, farmers must have produced less than 160,000 cwt (hundredweight) of milk in 2018. They will be paid based on production levels, up to 50,000 cwt of milk produced in 2018.

An application form, an IRS Form W-9, a copy of their DMC enrollment form, and a statement from their processor(s) detailing the amount of milk produced in 2018 are required to complete an application. All materials must be postmarked by December 31, 2019.

Producers who are already successfully enrolled and have received their first check do not need to take any action. They will automatically receive a second payment. However, producers who submitted incomplete applications and have not received a check must return any requested information by December 31, 2019, to be eligible for the second payment.

For additional information and the application form, visit the DAIRI program page of the MDA website.

November 14, 2019November 14, 2019

Dairy Industry is “Optimistic” at #NAFB19

Dairy industry officials know firsthand that the industry has struggled in recent years, and there’s no question about it. Former Ag Secretary Tom Vilsack, who spoke to broadcasters during the National Association of Farm Broadcasting’s annual convention in Kansas City. Vilsack, is the current President and CEO of the U.S. Dairy Export Council. He says in spite of some tough years for the American dairy industry, there are reasons for optimism.

News broke this week that Dean Foods, America’s largest milk producing company in the dairy industry, filed for bankruptcy. I had a chance for some one-on-one comments with the former Ag Secretary, who preferred to talk more about the positive signs ahead in the dairy industry than the bad news about Dean Foods.

He took a lot of questions from farm broadcasters on a variety of topics in the dairy industry. One of the biggest topics in recent months is the growing market for plant-based “milks.” He and the rest of the dairy industry aren’t happy with these companies referring to themselves as “milk.” The question came from Orien Samuelson, the dean of farm broadcasters and a good friend of Vilsack.

https://www.youtube.com/watch?v=CbopKYObCAs&feature=youtu.be

He says the US-Mexico-Canada Trade Agreement making its way through the House of Representatives, all be it slowly because of Democratic concerns, is another reason to be optimistic. He’s confident that the agreement will get done.

https://www.youtube.com/watch?v=FCURYBZ6IIo&feature=youtu.be

It’s hard to believe that folks in Washington, D.C. are already talking about the next Farm Bill. The reason for that is House Ag Committee Chair Collin Peterson, a Minnesota Democrat, isn’t sure yet if he’ll be running for re-election in 2020. He’s said publicly that decision will be coming in either January or February. Vilsack said even if Peterson doesn’t run again, the next farm bill will get done.

https://www.youtube.com/watch?v=BHU9-7w_CVU&feature=youtu.be

Lastly, as President of the Dairy Export Council, he pays close attention to the country’s export situation, which hasn’t been great at all thanks to trade disputes. In spite of that, with agreements pending in Japan, as well as in North America, exports are another reason to be optimistic.

October 31, 2019October 31, 2019

Wolf help available for Minnesota livestock farmers

New money is available to Minnesota livestock producers to help prevent wolf attacks. A total of $60,000 will be awarded through the Wolf-Livestock Conflict Prevention Grants. Applications are due January 31, 2020, to the Minnesota Department of Agriculture (MDA).

The grants provide reimbursement for costs of approved practices to prevent wolf-livestock conflicts. Eligible expenses for the grant program will include any or all of the following items:

Purchase of guard animals
Veterinary costs for guard animals
Installation of barriers which may include pens, fladry, and fencing
Installation of wolf-deterring lights and alarms
Calving or lambing shelters
Other measures demonstrated to effectively reduce wolf-livestock conflicts

“We’re fortunate to be able to offer this assistance again to Minnesota farmers and ranchers thanks to a grant from the US Fish and Wildlife Service,” said Assistant Agriculture Commissioner Whitney Place. “Livestock owners can get additional resources to protect their animals and livelihood, and I encourage producers to examine ways they can decrease the chances of wolf attacks and apply for this funding.”

Producers must live within Minnesota’s wolf range, as designated by the Minnesota Department of Natural Resources, or on property determined by the Commissioner of Agriculture to be affected by wolf-livestock conflicts. Any animal species produced for profit and documented to have been killed by wolves in Minnesota in the past is eligible. This includes bison, cattle, chicken, deer, donkey, duck, geese, goat, horse, llama, mule, sheep, swine, and turkey.

The grant application must be emailed or postmarked by 5 p.m. on January 31, 2020. Work for this grant must be done and expenses reported by August 31, 2020. The application and more information can be found at www.mda.state.mn.us/wolfgrants.

The grant from the US Fish and Wildlife Service is funding the third round of Wolf-Livestock Conflict Prevention Grants. The first two rounds were funded by the Minnesota Legislature in 2017. Those grants awarded $240,000 between July 1, 2017 and June 30, 2019. Grantees used the money for items like fencing, guard animals, and motion lights – all deterrents to wolves.