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September 11, 2019September 11, 2019

Dairy Margin Coverage Program Signup Deadline Sept. 20

The U.S. Department of Agriculture’s Farm Service Agency (FSA) reminds dairy producers that the deadline to enroll in the Dairy Margin Coverage (DMC) program for 2019 is Sept. 20, 2019.

Authorized by the 2018 Farm Bill, the program offers reasonably priced protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

“Over 19,100 operations have signed up for DMC since the new program opened enrollment on June 17,” said FSA Administrator Richard Fordyce. “DMC is a great risk management tool that protects against narrowing margins caused by down turns in the market and increased feed costs. I encourage farmers who have not yet enrolled to sign up as soon as possible.”

As the 2019 enrollment period draws to a close, FSA estimates over $257.7 million in payments to producers who are currently registered. Also, nearly half of the producers are taking advantage of the 25 percent premium discount by locking in for five years of margin protection coverage. FSA has launched a new web visualization of the Dairy Margin Coverage Program data, which is available here.

Margin payments have triggered for each month from January through July. Dairy producers who elect higher coverage levels could be eligible for payments for all seven months. Under certain levels, the amount paid to dairy farmers will exceed the cost of the premium.

For example, a dairy operation that chooses to enroll for 2019 an established production history of 3 million pounds (30,000 cwt.) and elects the $9.50 coverage level on 95 percent of production will pay $4,275 in total premium payments for all of 2019 and receive $15,437.50 in DMC payments for all margin payments announced to date. Additional payments will be made if calculated margins remain below the $9.50/cwt level for any remaining months of 2019.

Enrollment for 2020

For 2020, dairy producers can sign up for coverage under DMC beginning Oct. 7 through Dec. 13, 2019. At the time of signup, dairy producers can choose between the $4.00 to $9.50 coverage levels.

DMC offers catastrophic coverage at no cost to the producer, other than an annual $100 administrative fee. Producers can opt for greater coverage levels for a premium in addition to the administrative fee. Operations owned by limited resource, beginning, socially disadvantaged or veteran farmers and ranchers may be eligible for a waiver on administrative fees. Producers have the choice to lock in coverage levels until 2023 and receive a 25-percent discount on their DMC premiums.

Producers who locked in coverage in the 2019 sign-up must certify the operation is producing and commercially marketing milk and pay the annual administrative fee during the 2020 enrollment period.

To assist producers in making coverage elections, USDA partnered with the University of Wisconsin to develop a DMC decision support tool, which can be used to evaluate various scenarios using different coverage levels through DMC.

2019 Retroactive Intergenerational Transfers

Participating dairy operations who had an intergenerational transfer between 2014 and 2019 will a have a one-time opportunity to increase their established production history during the 2019 and 2020 annual coverage election periods. Retroactive payments based on the increased production history will apply for 2019 and not prior years.

A dairy operation may add to their approved production history for an intergenerational transfer when a spouse, child or grandchild join a participating dairy operation. Non-lineal relatives, such as siblings, cousins, nieces or nephews, that join the operation will not be eligible for a production history increase.

The increase to the established production history of the participating dairy operation will be determined based on multiplying both the national rolling herd average data for the current year in effect at the time of the intergenerational transfer and the quantity of cows purchased by the joining family member within 60 days of joining the dairy operation. For an intergenerational transfer to be recognized by FSA, the requesting dairy operation will meet all eligibility requirements including an ownership provision for those entering the business.

Applications for an intergenerational transfer must be submitted by Dec. 6, 2019, for approval by the local FSA county committee, to be eligible for the increased production history effective on January 1, 2019.

More Information

On December 20, 2018, President Trump signed into law the 2018 Farm Bill, which provides support, certainty and stability to our nation’s farmers, ranchers and land stewards by enhancing farm support programs, improving crop insurance, maintaining disaster programs and promoting and supporting voluntary conservation. FSA is committed to implementing these changes as quickly and effectively as possible, and today’s updates are part of meeting that goal.

For more information, visit farmers.gov DMC webpage or contact your local USDA service center. To locate your local FSA office, visit farmers.gov/service-locator.

Refresher on the DMC Program:

https://www.youtube.com/watch?v=d1J7SJsyXZ0

September 11, 2019September 11, 2019

IFYE – the International Farm Youth Exchange Program

The International Farm Youth Exchange Program recently signed a Memorandum of Understanding with the U.S. Department of Agriculture. USDA and IFYE (iffy) will work together to promote cultural understanding between the U.S. and overseas countries. The MOU commends IFYE for its past and continuing contribution to international cultural understanding of rural areas across the world. Victoria Warren is President of IFYE. She says the MOU also means the USDA and her group will work together to continue the IFYE mission into the future.

The IFYE program sends young adults 19 and over to farms and rural areas in other countries and helps them learn to understand different cultures and ways of doing things. Warren says the experience isn’t just for young adults in rural America either.

Program participants should be interested in things like agriculture, foods, nutrition, or family consumer science to get the best possible program experience. Warren talks about what the participants will do when they’re overseas with exchange families.

Warren says IFYE isn’t like other exchange programs because participants aren’t there to go to school. However, that doesn’t mean the young adults don’t learn anything.

Warren participated in the program too. She made an overseas trip back in the late-1970s.

For more information about the program, go to www.ifyeusa.org.

September 1, 2019September 10, 2019

Weather turns cool but won’t last in Ag country

Here is the full podcast with Bryce Anderson. You can download for later if you like. Just click on the three dots on the right and hit the download box.

Weather and agriculture go together like husband and wife, hand in glove, or ball and chain. I caught up to a guy who knows a lot about agriculture and weather. He’s Bryce Anderson, Senior Ag Meteorologist with DTN.

Temperatures have turned cool in the Midwest recently and it has some farmers concerned about a potential impact on crop development. Anderson says that cool trend is going to continue for several more days.

He says the cooler-than-normal temps cover most of the Corn Belt. In some cases, certain locations in the Corn Belt have been double-digits below where they normally are in late August-early September.

Cool high pressure dropped down from Canada and took control of the weather in the Corn Belt. However, Anderson says that high pressure will begin to move away soon.

Because much of the crops in the ground went in late, all eyes are on the weather forecast and trying to anticipate when that first frost will be. While Anderson says an early frost doesn’t look likely, that may not be good enough for this year’s crops…tape

He says the weather during harvest should be good enough to help farmers get their crops into the bins quicker than last fall. Anderson says the bigger question will be how good the condition of those crops are when they’re taken out of the fields across farm country.

August 30, 2019August 30, 2019

Agricultural trade opportunities are still out there

Here’s the podcast with Jeremy Miller. If you want to download it for later, go ahead and click on the three dots on the right side of the player and hit download.

Agricultural Trade is a sore topic of conversation these days. The agricultural sector in Minnesota and around the country has been struggling for more than a year due in large part to trade disputes with other nations, including the biggest one with China. However, there is some good news out there in international market opportunities for Minnesota farmers. District 28 Republican Senator Jeremy Miller recently took part in an overseas trade mission to Taiwan July 21-26 and says there are opportunities out there for Minnesota farmers to find markets for their commodities.

“A representative from the Taipei Economic and Cultural Office in Chicago reached out to me earlier this year about leading a multi-state, bipartisan legislative leaders’ delegation to Taiwan,” he recalled. “Before we go any further, people have asked who paid for the trip. I want to make it clear that the trip was paid for by Taiwan’s Ministry of Foreign Affairs. The whole purpose of the trip was to develop relationships between the United States of America, specifically Minnesota, and partners in Taiwan.”

It was the second trip Miller has taken overseas, with the first one taking place in South Korea back in 2011. He said the number one focus of these trips is to “meet people,” with the number two focus of “looking at opportunities.” The third and most important focus of the trip is “developing relationships” to see what kinds of business dealings can evolve in the future.

“The potential is there for a lot of different relationships between Minnesota and Taiwan,” he said. “By far, the biggest opportunity I see in Taiwan is for agricultural trade. Minnesota already exports a good number of crops, especially soybeans, to Taiwan. I think there’s even more opportunity there, whether it be for corn, more soybeans, and especially for pork.”

Miller looked into the numbers and found that Minnesota exported about $413 million worth of goods to Taiwan in 2018. However, that number is likely to go higher. “Last year, there was a agricultural trade mission to Taiwan that both Minnesota and Iowa took part in,” he recalled. “On that trip, Taiwan signed a $1.5 billion-dollar deal to buy 3.9 million metric tons of soybeans from both Minnesota and Iowa before 2021.

“What I’m driving at is there are even more opportunities for Minnesota and Taiwan to increase the amount of business done,” Miller said. “But, it comes down to keep lines of communication open and building on those relationships once they’re established.”

August 12, 2019August 12, 2019

Trade dispute puts U.S. agriculture right in the middle

Trade is important to agriculture. There, I said it. American agriculture is the best in the world. When you produce goods at the rate we do, there has to be somewhere to sell it overseas. However, thanks to the trade dispute with China, as well as recent disputes with some of our top trading partners, trade isn’t happening with the regularity it needs to.

In turn, when trade doesn’t happen the way it should, prices drop and farmers can’t make a living. I wanted to find out more about the trade dispute and what’s really going on. When you want to learn something like that, you find someone with skin in the game that can teach you the ins and outs.

Dan Ujczo (YOOT-zoh) is an international trade lawyer with the Dickinson-Wright Law Firm of Columbus, Ohio. I’ve known him for over a year now, ever since the dispute began. In typical Chad Smith fashion, my first question is “what the hell is going on here?” How’s that for direct and to the point?

“There was never going to be a deal in which things would go back to the way they were prior to January of 2017, when President Trump was inaugurated,” Ujczo said. “When Trump met with President Xi last December, they both thought we’d have a deal inside of 90 days. Then we heard they would make a deal in May.

“We never thought there would be a deal in which tariffs were completely rolled back,” he said. “Certainly not on the items from List One and List Two, which were an initial 25 percent duty on $50 billion worth of goods.”

When it comes to the items on List One and List Two, Ujczo says the U.S. government talked with industry and looked at the future of manufacturing, deciding then that these are the items we don’t want China taking the lead on. “Tariffs probably weren’t ever coming off those items,” he said.

Here’s the full conversation:

August 8, 2019August 8, 2019

Markets Expert Talks Trade War, USDA reports

Markets occasionally confuse me. However, one part of a career in journalism/broadcasting that I really enjoy is calling people who can educate me on things I really don’t have much expertise in. The older I get, the more fun it is to learn (and try) new things, but I digress. I was working on an assignment with the National Association of Farm Broadcasting the other day and had to find out how the trade dispute between the U.S. and China is affecting commodity markets.

Well, here’s the thing. Commodity markets are not my area of expertise, so I called up Mike Zuzolo of Global Commodity Analytics and Consulting in Atchison, Kansas. He’s been in the markets for 2.5 decades so if you have a question, he’s the guy that can answer it.

As a farm broadcaster/editor, I was curious about how the China announcement that they wouldn’t be buying any American farm products right now was affecting the markets. Obviously, the effect wouldn’t be a positive one. However, as you’ll hear in the conversation, it could have been even worse.

And believe me, before we progress any further I need to stress that no one is saying things aren’t bad right now in the agricultural sector. I wanted to find out what the market reaction was to the announcement from China. Mike said the key reaction market reaction took place in the currency and stock markets.

“Quite frankly, Chad, I think this is maybe one of the few glimmers of good news, or potentially supportive news, for the commodity markets,” he said. “I think we’ve done a fairly good job in the markets of pricing in a good portion of the end result of these trade frictions turning into the beginnings of a trade war. It’s going to be playing out in the currency markets as we go forward.

“The net result is the commodity markets didn’t react as negatively as they could, simply because the strength of the U.S. dollar was dropping,” Zuzolo said. “When the dollar goes down, it makes our goods cheaper to export. At the same time when we had the news out of China, the gold market was making fresh, 6.5-year highs. That too is commodity supportive.”

Here’s the full conversation with Mike Zuzolo.

July 11, 2019July 11, 2019

July WASDE is nothing more than a “placeholder”

The July World Ag Supply and Demand Estimate Report (WASDE) didn’t make many changes from the previous month. In fact, it wasn’t worth much at all to a lot of the industry. USDA admitted it will have a better picture of planted acres in the U.S. after resurveying producers this month and releasing the updated numbers in August.

Joe Vaclavik, founder and president of Standard Grain in Chicago, says this month’s WASDE report was considered by many to be a “placeholder.”

He’s not surprised that the number didn’t change a great deal from the last report…tape

There weren’t a lot of surprises on the demand side of the WASDE report…tape

Vaclavik says the grain stocks numbers likely aren’t accurate…tape

With this round of WADE reports done, Vaclavik says the markets are very much locked in on two things. He tells agweb.com that markets will be watching weather and the August report. “Because of the variability in both crop conditions and crop progress, it’s very, very difficult for anyone to look at a weather forecast or pattern and say if it’s bullish or bearish,” Vaclavik says.

He says a lot of farmers might be looking for a rise in prices because this year’s crop is anticipated to be very small. “Just because the crop is light doesn’t mean it’s guaranteed to go higher,” Vaclavik says. “You don’t want to completely abandon any semblance of a marketing plan. We’ve been hoping to get to these corn prices, and it took five or six years to finally get back here.

“Be ready for volatility,” he added. “The environment will continue to be volatile until we learn more about the crop in August.”

Again, Joe Vaclavik is President and Founder of Standard Grains.

July 11, 2019July 11, 2019

Dairy Margin Coverage Program already helping producers

The U.S. Department of Agriculture’s Farm Service Agency (FSA) opened enrollment for the Dairy Margin Coverage (DMC) program on June 17 and has started issuing payments to producers who purchased coverage. Producers can enroll through Sept. 20, 2019.

“Times have been especially tough for dairy farmers, and while we hope producers’ margins will increase, the Dairy Margin Coverage program is providing support at a critical time for many in the industry,” said Bill Northey, USDA Under Secretary for Farm Production and Conservation. “With lower premiums and higher levels of assistance than previous programs, DMC is already proving to be a good option for a lot of dairy producers across the country. USDA is committed to efficiently implementing the safety net programs in the 2018 Farm Bill and helping producers deal with the challenges of the ever-changing farm economy.”

Authorized by the 2018 Farm Bill, DMC replaces the Margin Protection Program for Dairy (MPP-Dairy). The program offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. To date, nearly 10,000 operations have signed up for the new program, and FSA has begun paying approximately $100 million to producers for January through May.

May Margin Payment

DMC provides coverage retroactive to January 1, 2019, with applicable payments following soon after enrollment.

The May 2019 income over feed cost margin was $9.00 per hundredweight (cwt.), triggering the fifth payment for eligible dairy producers who purchase the $9.50 level of coverage under DMC. Payments for January, February, March and April also were triggered.

With the 50 percent hay blend, FSA’s revised April 2019 income over feed cost margin is $8.82 per cwt. The revised margins for January, February and March are, respectively, $7.71, $7.91 and $8.66.

Coverage Levels and MPP Reimbursements

Dairy producers can choose coverage levels from $4 up to $9.50 at the time of signup. More than 98 percent of the producers currently enrolled have elected $9.50 coverage on up to 95 percent of their production history.

More Information

For more information, visit farmers.gov DMC webpage or contact your local USDA service center. To locate your local FSA office, visit farmers.gov/service-locator.

July 10, 2019July 10, 2019

Acreage reporting deadline extended in 12 states

The U.S. Department of Agriculture (USDA) extended the acreage reporting deadline for farmers in states impacted by flooding and heavy moisture. The new deadline is July 22 for producers to report spring-seeded crops to USDA’s Farm Service Agency (FSA) county offices and crop insurance agents. The new deadline applies to producers in Arkansas, Illinois, Indiana, Iowa, Kentucky, Michigan, Missouri, Minnesota, North Dakota, Ohio, Tennessee and Wisconsin.

“These are challenging times and we are here to help,” said Bill Northey, USDA Under Secretary for Farm Production and Conservation. “This deadline extension is part of our broader effort to increase program flexibility and reduce overall regulatory burden for producers who are having to make some tough choices for their operations.”

Producers not in the selected states must file reports or be added to a county register by the original July 15 deadline.

“Producers in many parts of the country are experiencing a challenging spring and early summer. However, producers in these states are struggling with large delays and are unable to complete their other fieldwork,” Northey said.

Filing a timely crop acreage report helps farmers maintain eligibility for USDA conservation, disaster assistance, safety net, crop insurance, and farm loan programs. A crop acreage report documents all crops and their intended uses. It’s also an important part of record-keeping for your farm or ranch.

FSA offices are asking producers to set up appointments ahead of time before they come in to file a report. Producers who schedule appointments before the deadline will be on time, even if the appointment is after July 22.

Likewise, reports from producers in non-affected states who set up appointments before July 15 will be considered timely filed.

“We encourage you to contact your FSA county office today to set up an appointment,” Northey said. “Our team is standing by to help you complete this important process that keeps you eligible for key USDA programs.”

Other USDA Efforts to Help Producers

USDA is taking additional steps to help producers across the country, including:

Updating the haying and grazing date for producers who have planted cover crops on prevented plant acres;
Offering special sign-ups through the Environmental Quality Incentives Program for assistance to plant cover crops; and
Extending the deadline to report prevented plant acres in certain places.

For more information, visit our Prevented or Delayed Planting webpage.

More Information

To learn more, contact your FSA county office or visit fsa.usda.gov or farmers.gov/prevented-planting.

June 20, 2019June 20, 2019

Flooding Problems Ongoing in Farm Country

Farmers in different parts of rural America are still dealing with flooding. Bryce Anderson, Senior Ag Meteorologist from DTN, says those struggles are continuing in some areas, while other parts of farm country are continuing to show some improvement.

Other parts of the Midwest are still dealing with flood stage and don’t have an immediate end in sight.

The rainfall isn’t over for parts of the country still dealing with saturated soils.

Anderson says the last time farm country had flooding problems that covered such a large area at the same time was back in 1993. He says the wet pattern will likely stick around at least through the end of June and possibly early July…

Bryce Anderson is Senior Ag Meteorologist with DTN.

For some perspective on how bad the flooding has been, an article on the Pacific Standard Magazine website says the Mississippi River has received rain and snow levels at a staggering 200 percent above normal.

And, it’s not just farmers who are suffering because of the flooding. The flooding has wrecked homes, contaminated drinking water, and done billions of dollars in damages. Unfortunately, industry experts are warning that it may take years for agriculture and rural America to recover from the extensive damages.