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Articles from 2020 In November

Improved commodity prices, federal aid improve outlook

Improved commodity prices, federal aid improve outlook

Pandemic-relief aid along with mostly bountiful harvests and a slight recovery in prices have painted an optimistic picture for the end of 2020, according to the third-quarter (October) agricultural credit conditions survey by the Federal Reserve Bank of Minneapolis, Minn. Those results were also replicated in the Seventh Federal Reserve District of Chicago, Ill., and the 10th District in Kansas City, Mo.

Joe Mahon, direction of regional outreach in the Minneapolis-based district, said in a recent overview that the outlook for the fourth quarter is up slightly, with a mild improvement due to government relief, good production and small price increases.

Mahon said the latest survey of agricultural bankers in the region found that many were upbeat about agricultural incomes, but the overall outlook for farm finances was more modest.

“Across the district, a third of lenders expected farm income to increase in the fourth quarter, compared with just under a quarter who expected further decline. The forecast for capital spending was more moderate, with 31 percent of respondents expecting decreases, compared with 24 percent who expected increases. Two-thirds of lenders thought farm household spending would remain unchanged,” Mahon said.

Midwest states

The Seventh Federal Reserve District saw corn and soybean yields in 2020 come close to their historical highs, with some states reaching record levels. The U.S. Department of Agriculture forecasted the five district states – Iowa, Michigan and parts of Illinois, Indiana and Wisconsin – harvest of corn for grain in 2020 to increase by 9% from 2019. Likewise, USDA forecasted soybean production for the five district states to rise by 16% from 2019.

In his latest AgLetter report, economist David Oppendahl said the average price of corn in September 2020 was 9.3% higher than in August but still 10% lower than a year ago.

In October, the USDA raised its price forecasts for the 2020–21 crop year for both crops—to $3.60 per bushel for corn and $9.80 per bushel for soybeans. “When calculated with these price estimates, the projected revenues from the 2020 corn and soybean harvests for district states would increase from 2019 by 10% and 33%, respectively,” Oppendahl said.

Oppendahl shared that the Seventh Federal Reserve District’s agricultural credit conditions were mixed during the third quarter of 2020. The availability of funds for lending by agricultural banks was much higher in the third quarter than a year ago, but the demand for non-real estate farm loans was lower than a year earlier for the first time in seven years.

In the third quarter of 2020, livestock prices were generally recovering from the impacts of the Covid-19 pandemic. Compared with a year earlier, September average prices for hogs, cattle, and eggs were up 5%, 1% and 22%, respectively. While milk’s average price in September was down 7% from a year earlier, its average price for the third quarter of 2020 was up 1%. There was also a pickup in agricultural trade, which helped matters, Oppendahl explained.

Additionally, by the end of October, the Coronavirus Food Assistance Program (CFAP) had dispersed over $2.4 billion to farm operations in the five district states (24% of the $10.3 billion sent nationwide).

The AgLetter said: “As one Wisconsin respondent noted, ‘With higher prices and government payments, dairy and crop producers will end the year better than expected.’”

10th District outlook

Nathan Kauffman, vice president and Omaha, Neb., Branch executive, and Ty Kreitman, assistant economist at the Kansas City Federal Reserve Bank, in their latest Ag Credit Survey, also offered their improved outlook for the region’s farmers due to the increases in commodity prices and additional influx of government aid. The region includes Kansas, western Missouri, Nebraska, Oklahoma and the Mountain states of Colorado, northern New Mexico and Wyoming.

“After dropping sharply in the second quarter due to disruptions associated with the COVID-19 pandemic, the prices of most agricultural commodities began to recover in the summer months. Strengthening demand supported additional increases in crops prices through the third quarter and into October, expanding profit opportunities for many producers heading into harvest. As a result, credit conditions deteriorated at a notably slower pace and the share of bankers reporting declines in farm income and loan repayment rates dropped from the previous quarter,” Kauffman and Kreitman wrote.

The credit survey stated better profit opportunities for both crop and livestock producers, as well as additional government support across the sector, created more favorable conditions for farm finances in 2020 than earlier in the year. “Farm income and credit conditions remained weak, but the pace of deterioration slowed from the last quarter and demand for farm loans was more subdued. Amid improvement to cash flows and repayment capacity, bankers were monitoring a smaller share of loans for problems.”

Kauffman and Kreitnman noted that bankers continued to express concerns, however, about the potential for renewed pressure in the months ahead, depending on the path of agricultural commodity prices and government support programs.

Danone, AFT partnering with dairy farms to enhance soil health

(Greg Urquiaga/UC Davis) Two Holstein cows at the Dairy Barn at UC-Davis.

Together, American Farmland Trust (AFT) will collaborate with Danone North America, Sustainable Environmental Consultants, USDA Natural Resource Conservation Service, Soil and Water Conservation Districts (SWCD) and others in the private sector to help farmers in the dairy supply chain provide feed grain to Danone North America’s (Danone NA) dairy farmers to build holistic soil health management systems. Work will be completed across both Danone NA’s currently enrolled farms as well as other farms in the proposed project area and is made possible through the funding of The National Fish and Wildlife Foundation.

Direct corporate engagement with farms in supply chains offers a unique opportunity to involve more farms and deliver more conservation on the ground, AFT stated. AFT will work with farmers that are part of the dairy supply chain in a seven-county area in west-central Ohio and farmers that are part of the supply chain in western Kansas to conduct effective one-on-one farmer engagement, benchmarking of farm practices, development of continuous improvement plans and implementation of improved soil health management practices.

“We are excited to partner with these forward-thinking companies and organizations in providing one-on-one assistance to farmers and helping them reap the many benefits that result from implementing soil health systems. We also appreciate the funding provided by the National Fish and Wildlife Foundation that makes this critical work possible,” expresses Brian Brandt, AFT agriculture conservation innovations director.

AFT will conduct two primary activities leading to positive outcomes in the target areas of the two states. These activities include: 1) targeted technical assistance and support for farm operators; and 2) evaluation and assessment of farm management practices including existing benchmarked practices and new soil health management practices. In addition, AFT will act as a central hub of communication between NRCS, project partners and farm operators in seeking federal, state and other cost-share opportunities to assist in implementing identified practices.

Healthier soils can result in increased agricultural profitability, reduced sediment and nutrient losses and making agriculture communities more resilient to extreme weather conditions. Through AFT’s farmer outreach and education events, AFT has learned that farmers believe the scientific evidence that soil health practices improve soil and water quality. AFT will work closely with project partners to assess what soil health practices will most benefit farmers in the two project areas and to connect with farmers that are ready to begin implementation.

“Together, we hope to better understand the impact of combinations of conservation practices within farm management systems on overall soil health as well as on water quality and greenhouse emissions,” AFT said.

Hormel Foods reports fourth-quarter results

Hormel Foods reports fourth-quarter results

Hormel Foods Corp. recently reported results for the fourth quarter of fiscal 2020. Despite “multiple challenges,” Jim Snee, chairman of the board, president and chief executive officer, said Hormel grew sales in all four of its segments, which speaks to the strategic balance built into the company.

“In several of our domestic businesses, strong demand for our products exceeded the available supply,” he said. “From a bottom-line perspective, our experienced leadership team managed through the incremental supply chain costs we incurred related to the pandemic, which was the largest driver of our earnings decline.”

Growth in the international segment was also incredibly strong, particularly in China, where the company drove balanced growth between the retail and foodservice channels, Snee added. Consistent with industry trends, Hormel’s foodservice business showed declines in the past quarter. Snee said the company will continue to support the distributor and operator community during the challenging economic environment.

"This most recent surge of COVID-19 cases in communities does create a level of uncertainty in a number of areas, notably labor availability, customer demand and raw material markets. Our company has adjusted to these conditions and will continue to invest to meet the needs of our team members, customers, consumers and operators," he said.

Looking ahead to 2021, Snee said he is optimistic about generating sales and earnings growth in fiscal 2021.

“Our One Supply Chain team delivered steady production improvements throughout the quarter, and our production capacity for key product lines is structurally higher as we move into next year. The balance we have across the retail, deli, foodservice and international channels gives us confidence in our ability to perform well in many different economic scenarios.”

Executive summary – Q4 2020

  • Volume of 1.2 billion lb., down 2%; organic volume down 3%
  • Net sales of $2.4 billion, down 3%; organic net sales down 4%
  • Operating margin of 11.4% compared to 12.8% last year
  • Effective tax rate of 15.9% compared to 21.0% last year
  • Diluted earnings per share of 43 cents, down 9% from 47 cents

Executive summary - Fiscal 2020

  • Volume of 4.8 billion lbs., up 1%; organic volume up 2%
  • Net sales of $9.6 billion, up 1%; organic net sales up 2%
  • Operating income of $1.1 billion, down 8%
  • Operating margin of 11.5% compared to 12.6% last year
  • Diluted earnings per share of $1.66, down 8%; down 2% to adjusted diluted earnings per share last year
  • Cash flow from operations of $1.1 billion, up 22%
  • Operating free cash flow of $800 million, up 21%

COVID-19 response
"As we enter fiscal 2021, we are witnessing another dramatic increase in COVID-19 cases across the nation," Snee said. "Employee safety remains our top priority, and we are doubling down on our awareness initiative, KEEP COVID OUT!, which reinforces the importance of taking preventive measures at our production facilities and in our communities where we work and live."

For the full year, Hormel reported that it absorbed more than $80 million in incremental supply chain costs primarily related to lower production volumes, employee bonuses and enhanced safety measures in its production facilities. The company estimates that most of the incremental supply chain costs are temporary and can be minimized after the pandemic subsides.

New test for Johne’s disease could be game changer

stefbennett/iStock/Getty Images dairy cow eyes closeup_stefbennett_iStock_Getty Images-646927608.jpg

A promising new test for Johne’s disease in dairy cattle has been developed at the Institute for Global Food Security (IGFS) and School of Biological Sciences at Queen’s University Belfast.

The new test promises to be both more rapid and sensitive in detecting the Johne's disease infectious agent -- Mycobacterium avium subspecies paratuberculosis (MAP) -- in veterinary specimens and is showing greater detection capability than the milk enzyme-linked immunosorbant assay (ELISA) test that is currently used. Crucially, it detects live infectious agent, not just antibodies against MAP, as the milk-ELISA does, the university said in an announcement.

In a recent study, the new test was able to detect more infected animals by milk testing than milk-ELISA and could potentially facilitate control of Johne's disease faster, the university said. As well as bovine milk, the new test can also be applied to feces and blood from livestock.

The test was developed by professor Irene Grant and her post-doctoral researcher Dr. Antonio Foddai at IGFS, and their research was published in the open-access journal Applied Microbiology & Biotechnology. They hope to now move to the applied stage of the science with further development and validation of their test for MAP infection at the farm level.

"I hope our test will offer more accurate, rapid and quantitative results and, therefore, help farmers and vets make more informed decisions about the infection status of animals in order to control the disease more effectively within herds," Grant said.

The new test for Johne’s disease was developed as part of an Agri-Food Quest Competence Centre project and was a collaboration among IGFS, AgriSearch, Biorex Food Diagnostics and Dale Farm.

Feedstuffs Precision Pork: Special Report - Mycotoxin risks when using byproducts?

In this special episode of Feedstuffs Precision Pork, we explore the benefits and risks associated with the use of corn distillers dried grains (DDGS) in pig diets.

Feedstuffs editor Sarah Muirhead talks with  Erin Holmes, technical swine nutritionist with Provimi, and Don Giesting, micro nutrition innovation lead for Provimi, about the economics of feeding corn DDGS and what can be done to minimize the risk of mycotoxin contamination and its negative influence on performance and the bottom line. Take a listen.

Use this link to sign up for Provimi’s Mycotoxin Minutes: http://cloud.info.cargill.com/SignUp_For_Mycotoxin_Minutes

Follow Feedstuffs Precision Pork each week on your favorite podcast platform or find it on www.Feedstuffs.com and www.NationalHogFarmer.com

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Smithfield provides update on leadership changes

Smithfield Foods smithfield foods logo

Smithfield Foods Inc. recently provided an update on its succession progress after announcements last month. Kenneth Sullivan, president and chief executive officer (CEO), is retiring from the company, and Dennis Organ, chief operating officer of U.S. operations, was chosen to succeed him.

“Transition activities are moving forward approximately one month ahead of schedule, facilitated by the close working relationship and shared strategies of Mr. Sullivan and Mr. Organ,” the company said. “Mr. Organ has moved swiftly to install a new leadership team and assume the responsibilities of the office.”

The prompt transition resulted in the board determining that Organ could assume the position of president and CEO on Nov. 27.

Sullivan intends to spend the balance of his time as an advisor to Organ, advocating for vaccine prioritization and visiting with the company’s heroic and essential frontline workers in its facilities across the country. Sullivan will remain an employee of Smithfield through Jan. 3, 2021.

During his five years as president and CEO, Sullivan delivered record results and led Smithfield through a monumental transformation. Several years of his CEO tenure were devoted to the ultimate realization of "One Smithfield," the initiative that unified all of Smithfield's operations, brands and more than 55,000 employees globally under one corporate umbrella.

Sullivan championed Smithfield's many industry-leading sustainability initiatives and has been an ardent supporter of the company's social purpose to improve food security and end hunger by donating high-quality, nutritious food and its philanthropic efforts that honor the service and sacrifice of American veterans and their families, among others.

Organ joined Smithfield in 2010 and assumed his current position as chief operating officer of U.S. operations, in 2019. For the past two years, he has overseen the day-to-day operations of the company's entire vertically integrated domestic business, including its more than 40,000 team members across 32 states.

November 2020 issue of Feedstuffs available online

The November 2020 issue of Feedstuffs is now available online. Among the top stories are:

  • CoBank: Fragile rural recovery to be tested
  • Cattle market seeks more price transparency
  • Report explores expanding U.S. beef packing capacity
  • Judge denies NAMI's challenge to California's Prop 12
  • Cattle industry comments on RFID transition
  • JBS parent, Pilgrim's reach plea deals
  • CFTC finalizes position limits rule
  • Extensive animal Nutrition & Health section
  • Monthly Ingredient Market prices
  • And more.

Access the November 2020 issue at: https://editions.mydigitalpublication.com/publication/?i=685005

December 2020 issue of Feedstuffs available online

The December 2020 issue of Feedstuffs is now available online. Among the top stories are:

  • Food chain unites on climate policy path
  • Announcing new FEEDSTUFFS 365 online community
  • Plant-based proteins go from niche to norm
  • Supreme Court to hear ag trespassing case
  • Food supply chain still has some kinks to work out
  • JBS USA reaches settlement in pork price-fixing suit
  • Opportunities exist for farm supply co-ops
  • Extensive animal Nutrition & Health section
  • Monthly Ingredient Market prices
  • And more.

Access the December 2020 issue at: https://editions.mydigitalpublication.com/publication/?i=684962

This Week in Agribusiness, Nov. 28, 2020

Max and Mike talk about what farmers are thankful for this year, as well as tax planning strategies.

Matt Roberts, The Kernmantle Group, joins Mike to talk about grain markets, including ethanol, China's corn crop and imports, impact of the U.S. dollar, interest rates.

Mike talks to Chad Colby about some tech gift ideas, including a tripod, paint markers and a Bluetooth radio and a new drone.

Jamie Johansen reports from Wisconsin about cranberries and harvest.

Max shares a visit with Randy Bodine, Auburn, Alabama, talking about old International Harvester equipment, including a cotton picker.

Collin Miller, Pivot Bio, talks to Max about plant and yield differences when using Pivot Bio Proven.

Greg Soulje is in with the weather forecast for the week, and the upcoming month.

What's in Max's Tractor Shed? A 1947 Allis-Chalmers WD.

Mark Stock shares what's coming to the block for Big Iron Auctions.

The FFA Chapter Tribute continues to spotlight the national officer team, as Mike talks to Artha Jonassaint, VP of the southern region.

Orion thanks farmers, ranchers and food producers across the nation.

Enjoy a look at the Great Plains Terra Max tillage implement, featured at FPVX (www.fpvexp.com).


This Week in Agribusiness features market news, ag technology, weather and farm management and equipment information and opinions. This leading ag news program airs weekly on RFD-TV, and can be found each week on FarmProgress.com

USGC programs help Tanzanian poultry, egg producers expand

Credit: buhanovskiy/iStock/Thinkstock. broiler chickens

In 2015, Jaffar Mohamed Hashim's Mitobo Farm, a broiler processing company in Tanzania, had a stock density of 1,000 broilers per month. Today, following his participation in numerous U.S. Grains Council (USGC) programs, those numbers exceed 30,000, and Mitobo Farm is producing its own feed for this stock, with a feed conversion ratio of 2:1.

After investing in its own facility, the company can also process its broilers. That processed chicken, branded as Kuku Halisi, is sold predominately in supermarkets and restaurants in Dar es Salaam, one of the top poultry- and egg-consuming areas of Tanzania.

“Realizing the untapped potential in the Tanzanian market, the council has been supporting poultry and feed producers like Hashim as they develop and expand their operations,” Katy Wyatt, USGC manager of global strategies, said. “By equipping producers with the knowledge necessary to improve their operations, our programs are helping ensure Tanzanian consumers have access to affordable, good-quality poultry meat and eggs and establishing future customers for U.S. coarse grains and co-products.”

According to USGC, Tanzania is one of the fastest-growing countries in East Africa, with an estimated population of nearly 60 million, which is expected to nearly double by 2050. In addition to rising numbers, more middle-income Tanzanians are shifting consumption patterns from vegetable-based proteins to more animal-based diets richer in protein. Poultry and eggs are the protein of choice for many African consumers because they are generally more affordable and more widely available.

This increased demand for animal protein is putting pressure on local industries, which the council's programs aim to help expand. Hashim, for example, attended several of the USGC programs, including a broiler management program at Kwazulu-Natal Poultry Institute (KZNPI) outside of Durban, South Africa, under the council’s Food for Progress project in Tanzania. Hashim has continued working with USGC's Tanzanian consultants to further enhance his business, with programs funded by the U.S. Department of Agriculture’s Market Access Program.

USGC relayed that Grace Urasa has used knowledge gained through its poultry management and farming best practices program in Tanzania in her broiler and layer operations. Three years ago, she had 1,000 birds in her broiler and layer stocks. Today, she is managing a 12,000-bird operation (6,000 broilers and 6,000 layers) and selling broilers and eggs to local markets. Urasa, who is always looking for opportunities to expand and grow her operations, has plans to build an on-farm poultry processing facility to position herself to sell directly to customers.

 She is also an active member of the Tanzania Broiler Farmers Assn. and the Tanzania Layer Farmers Assn. Through these organizations, Urasa shares what she has learned through the USGC programs with her industry peers, further supporting her industry.

“The focus on technical assistance and long-term capacity building is solidifying relationships in the Tanzanian food chain,” Wyatt said. “This work truly embodies the council’s mission of developing markets, enabling trade and improving lives.”