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Articles from 2015 In December


Weekly grain movement - 12/29/15

Weather was again the main focus in Midwest grain markets this past week as rain caused flooding near creeks and streams, snow made road deliveries difficult and wind briefly delayed the loading of grain onto rail cars.

 “There has been snow, ice, rain and flooding,” said an Iowa dealer on the Mississippi River.

Three to four inches on snow fell there on Monday, but by Tuesday operations were back to normal. River traffic has shut down for the season, but the terminal still ships grain by truck.

The U.S. Coast Guard on Tuesday closed a section of the Mississippi River near St. Louis to all river traffic as high water made for hazardous conditions. The river was forecast to crest there on Thursday.

In central Illinois, the loading of corn on an 85-car train was halted on Monday as strong wind made it dangerous for workers to stand atop the rail cars. Loading resumed on Tuesday and the train will soon move to poultry farms in Georgia.

Six to seven inches of rain fell in central Illinois the past few days, the Illinois dealer said. About 10 inches of rain fell at the company’s elevator near St. Louis.

Northwest of Decatur, Illinois, heavy rain and flooding closed a few rural roads on Monday and raised concerns the water in the nearby Clinton Lake may overflow.

In Iowa, five to six inches of snow was reported in central part of the state near I-80, while seven inches fell near the western border.

Blowing snow, amid 30 mph wind, caused an Iowa elevator near Omaha to close early on Monday. By Tuesday, a dealer there said operations were back to normal with a truckload of soybeans loaded and dispatched to a nearby processor.

Farmer selling remained quiet as year-end grain prices failed to inspire them to open grain bins or let go of supplies in commercial elevators.

Basis bids for corn and soybeans were largely unchanged from a week ago, the exception being some processors raising corn bids in western Illinois. That left grain dealers to largely focus on shipping out previous sales or clean away snow or water from loading docks.

USDA’s latest grain transportation report said grain rail car loadings for the week ended Dec. 12 were down 6% from a year ago, while year-to-date loadings are up 4.4%. Year-to-date grain barge movement as of Dec. 19 on key waterways was up 1%.

USDA’s weekly export inspections on Monday showed soybean shipments at 51.5 million bushels, down slightly from last week and a year ago. China was again the largest recipient. Year-to-date shipments for the crop year are 906.3 million bushels, down about 12% from a year ago.

Corn export shipments of 22.5 million bushels were down 21% from a week ago and down 6% from a year ago. Mexico was the largest market followed by Japan. Year-to-date shipments for the crop year are about 359 million bushels, down 21% from a year ago.

Weekly wheat shipments of 11.2 million bushels were down 37% from a week ago but up from a year ago. Bangladesh and South Korea were the leading markets. Year-to-date shipments for the crop year that began June 1 are about 432 million bushels, down 13% from a year ago.  

USDA pesticide whistleblower case continues

A case involving an ongoing whistleblower claim from a scientist with the U.S. Department of Agriculture’s Agricultural Research Service (ARS) will be allowed to proceed.

Judge Patricia Miller, an administrative law judge with the Merit Systems Protection Board (MSPB), rejected USDA’s request to dismiss research entomologist Jonathan Lundgren’s complaint as “frivolous.” Lundgren said the agency tried to block his research looking at harmful effects of pesticides on bees and butterflies. Lundgren, a research entomologist at the North Central Agricultural Research Laboratory based on Brookings, S.D., claims that his supervisors tried to “deter and impede” his research.

Lundgren was suspended after publishing research about adverse effects on monarch butterflies from neonicotinoid insecticides. On Aug. 3, 2015, USDA imposed a 14-day suspension (reduced from 30 days) on Lundgren in connection with two events. The first was the publication of a manuscript by Lundgren on the non-target effects of clothianidin on monarch butterflies in the scientific peer-reviewed journal The Science of Nature. The other included an error in Lundgren’s travel authorization for his invited presentation to a panel of the National Academy of Sciences, as well as to a USDA stakeholder group.

Lundgren’s suspension came after he lodged a formal complaint last fall of violations of the agency’s Scientific Integrity policies. His complaint detailed attempts by USDA managers to block publication of new research, bar discussion of results with the media and disrupt his lab’s operations. The agency initially rejected his complaint as not meriting an investigation. His appeal of that decision is still pending.

An emailed statement from a USDA spokesman to Feedstuffs said the scientific integrity officer with ARS “previously determined that there was no merit to Dr. Lundgren’s claim of compromised scientific integrity.” The spokesman added that, in accordance with existing procedures, USDA is currently conducting a second level review of the claim and the determination through an independent process outside of ARS.

“USDA trusts this process and cannot discuss the claims while the case is before the MSPB,” the spokesman said.

Miller set a Jan. 6 status conference for the case and ordered both parties to come prepared to talk about a possible settlement.

The spokesman said Lundgren continues to work for USDA and to conduct pollinator research.  ARS scientists have published more than 22,000 peer-reviewed scientific journal articles, he added. “Over the past six years, ARS alone has invested more than $82 million in cutting-edge pollinator research and over the past decade has published nearly 200 journal articles about pollinators, including many breakthrough studies that explore the causes for bee and other pollinator death," he said. "There is no question that ARS scientists and USDA as a whole are leaders in the pollinator research space.”

USDA Export Sales: Soybeans tumble; corn and wheat sales down

Soybean export sales at 17.6 million bushels during the Christmas week were down sharply from the prior week, missed trade forecasts and were down about 22% when compared with Christmas week a year ago, USDA said on Thursday.

China was again the leading soybean buyer, while Germany and Spain took sizable amounts. Also, 3.7 million bushels of 2016/2017 soybeans were sold to unknown destinations and to Japan

In daily reporting on Thursday, USDA said China bought nearly 4.4 million bushels 2015/2016 soybeans. That sale will be included in the next weekly export report.

Corn export sales of nearly 27.8 million bushels were down 12% from a week ago, within trade forecasts and down 21% from the year ago Christmas week. Mexico, unknown destinations and Japan were the leading buyers.

Wheat sales of nearly 13.4 million bushels were about as expected, down 2% from a week ago, and up 2.6% from a year ago. Indonesia, Italy and Mexico were the leading buyers. There was small sale of about 694,000 of 2016/2017 wheat to Panama.

U.S. soybean futures dropped about 2 cents after the export numbers were released, while soft red winter wheat rose about a penny and corn barely moved.  Soybean futures in Chicago closed the overnight down 2-1/2 cents in January and down 4 in March. In corn, March was down 1 cent and May down ¾ cent, while March soft red winter wheat was up 1-1/2 cents. March hard red winter was up 3-1/2 and March spring wheat was up 2-1/2 cents.

Soymeal export sales of 78,900 metric tons were down from a week ago and missed trade forecasts with the Dominican Republic, Mexico and Italy the top buyers. Also, 200 tons of 2016/2017 soymeal were sold to Mexico.

Sorghum sales of 5.3 million bushels were down 59% from the previous week with China taking the most.

CP Holiday Train to raise more than $1.4m for food banks

The 17th year of the Canadian Pacific (CP) Holiday Train program saw tremendous crowds, generous donations and big smiles as it etched its way across Canada and the northern U.S.

With results continuing to roll in, the 2015 edition of the CP Holiday Train is on track to raise more than $1.4 million and more than 300,000 lb. of food for food banks and food shelves, CP announced. Since its start in 1999, the CP Holiday Train has now helped to raise more than $12 million (Canadian) and 3.9 million lb. of food for local food banks.

This year saw record crowds in many communities and estimated overall attendance of 450,000 people over the 23 days.

"The Holiday Train is all about neighbors helping neighbors, and this year saw remarkable support for this important cause," CP chief executive officer E. Hunter Harrison said. "Each year, we are humbled by the good work local food banks do in helping those in need in their communities. We are proud that we can help them deliver on that mission."

The Holiday Train's social media following, which now boasts more than 150,000 followers, was once again lively with thousands of event attendees sharing photos of how they captured the spirit.

To continue to support the Holiday Train and receive updates for next year's program, visit the train's presences Facebook, Twitter and Instagram. For additional information, photos, route map and downloadable pictures of the two trains, visit www.cpr.ca/holiday-train

CP's annual Holiday Train program is a rolling fundraising event that travels across Canada and the U.S. raising money, food and awareness for food banks and hunger issues, hosting free holiday concerts along the way. Each Holiday Train is about 1,000 ft. in length with 14 rail cars decorated with hundreds of thousands of technology-leading LED lights and a modified boxcar that has been turned into a traveling stage for performers.

Water conservation policy depends on farmer economics

Farming is a business, and the actions of farmers will be based on economics — even when it comes to water conservation, according to a recent study by Texas A&M AgriLife Research.

Extremely small recharge rates in the Ogallala Aquifer indicate depletion is inevitable, and that has policymakers scrambling to find ways to prolong its life and ensure a smooth transition to the dryland production to minimize impacts on the overall economy, said Dr. Seong Park, AgriLife Research economist in Vernon, Texas.

Park said, however, not all tools proposed or implemented by policymakers will be effective in working toward that goal.

The paper, "Will farmers save water? A theoretical analysis of groundwater conservation policies," was recently published in the Water Resources & Economics journal and provides a look at the alternatives being offered and their potential to conserve water.

The study was conducted by Park, Dr. Tong Wang, a former AgriLife Research post-doctoral researcher now in the South Dakota State University department of economics, and Dr. Hailong Jin with the Black Hills State University College of Business & Natural Sciences. Funding was provided through the U.S. Department of Agriculture-Agricultural Research Service Ogallala Aquifer Program.

Using the Ogallala Aquifer as an example, their paper analyzes whether current and potential groundwater conservation policies across the southern Great Plains provide profit-driven farmers with incentives to save water.

"We wanted to focus on the incentives provided by selected policy tools to ensure water savings on the farmer’s side and achieve the sustainability goal," Park said.

He said their theoretical study of the impacts of different policy options on groundwater conservation potential was conducted after previous studies determined voluntary and incentive-based water conservation programs may have "unintended or even perverse consequences."

"Very few attempts had been made to analyze the effectiveness of different policy alternatives in incentivizing an individual farmer to actually save water," Park said. "We also wanted to look at the effectiveness of the alternatives based on regional characteristics such as groundwater depth, satiation thickness and feasible crop patterns."

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He said a majority of existing literature modeled the future depletion rate of the Ogallala Aquifer from the perspective of a regulatory agency that can allocate water use effectively and in an efficient manner.

However, farmers tend to make short-term decisions in response to current output prices and input costs without considering long-term profit consequences, Park explained.

"What we found was that in order to achieve the water-saving goals in regions with high pumping cost, rather than providing a subsidy for the new technology installation or charging a unit water tax, policymakers should offer a unit subsidy for saved water and a subsidy for water-conservation crops," Wang said. "These are more promising to achieve water savings, as it directly rewards farmers for actual water saved."

Water rights retirement programs or water buyout programs are an example of providing compensation on a land basis for farmers willing to retire their water right, she said.

"However, our results show a fixed compensation rate tends to attract the land with low productivity and high water cost, thus compromising the program’s effectiveness because most of the enrolled land initially did not use much irrigation water."

Wang said conceptual models on farmer incentives rarely take these factors into account, so their study filled in those gaps.

"We studied farmer’s incentive-driven responses to the following policy tools: irrigation technology subsidies, increased water costs, unit subsidies for water savings and subsidies on water-conservative crops," she said.

Wang said they found in regions with high pumping costs, no water savings will occur after converting to a more efficient technology. Instead, farmers take advantage of the new technology to pursue increased profit.

"While the technology subsidy can be effective in the preventative stage, or before the water table declines too much, it is often unjustified when water depletion is already a serious problem," she said.

Similarly, they noted, an increase in water cost may serve its purpose if well pumping capacity is not a constraint. However, if well pumping capacity is limited due to falling groundwater levels, the cost increase may not be practical because water usage will not respond to the small price increase.

"To achieve the required water savings goal, it often takes a large price increase, which is detrimental to the farmers’ profit and is likely to be met with resistance on implementation," Wang said.

"We found that policy alternatives such as a subsidy for unit water saved and price subsidy for water-conservative crops is likely effective in achieving water conservation even in the case of high pumping costs," she said. "Therefore, in areas where groundwater is already a constraint, these direct rewards serve the conservation purpose better."

Compared to the subsidy of new technology, a subsidy for water saved discourages the farmer from using the saved water to gain additional profit, while a subsidy for water-conservative crops discourages farmers from switching to more water-intensive crops, Wang said.

Beyond the policy implications, the researchers questioned: Among the farmers who adopt more efficient technologies, is there any relationship between water-use adjustment and pumping cost? And, prior to the enrollment, is the average irrigation amount of the land enrolled in a water buyout program comparable to that of the land outside of the program?

Park said future studies should examine the relationship between water pumping cost, crop price and crop patterns to identify the proper price subsidy to more water-conservative crops to achieve the water conservation goal.

"Theoretical modeling from the farmer’s standpoint as well as empirical studies based on farm-level data in different regions could provide policymakers with more detailed information on the extent of water savings by the varied water-conservation policy tools," he said. "After all, it is the farmers who make the water-conservation decisions."

The full paper can be found at http://www.sciencedirect.com/science/article/pii/S2212428415300128.

Corn quality report reveals above average crop for 2015

The overall quality of the 2015 corn crop was better than the average of the previous four crop years on most attributes, according to the U.S. Grain Council’s (USGC) “2015/2016 Corn Harvest Quality Report.” In fact, USGC said 94% of the samples would grade U.S. No. 2 or better.

Additionally, USGC said the 2015 U.S. corn crop is entering the market channel with an average moisture content below the four-year average, percent of stress cracks lower than the four-year average, and starch and oil concentrations and whole kernels higher than the four-year average (Figure).

“The higher quality was largely the result of a favorable corn growing season with earlier than normal planting, a cool, wet summer, and a warm, dry fall,” USGC noted in the report. “U.S. corn producers experienced record high yields in 2015, resulting in the third largest U.S. corn crop on record.”

Total U.S. corn production for 2015 is projected to be 346.8 million metric tons (13.65 million bushels), a 4% decrease in production over the 2014 corn crop, USGC said.

USGC said corn quality observed by buyers will be further affected by subsequent handling, blending and storage conditions. As such, it will release in early 2016 a second Council report, “2015/2016 Corn Export Cargo Quality Report”, which measures corn quality at export terminals at the point of loading for international shipment.

The U.S. is currently the top exporter of corn, with an estimated 38% of global corn exports during the 2015/2016 marketing year.

Grain & ingredient cash market comparisons, January 2016

Major feed ingredients

Dec. 22

Dec. 30

Jan. 6

Jan. 13

Year ago

Corn No. 2, Chicago, bu.

 

 

 

 

 

Processor bid*

3.73A

3.71A

 

 

 

Terminal bid*

3.56A

3.49A

 

 

 

Milo, Kansas City, cwt.

6.53

6.37

 

 

 

Soybeans, Chicago, bu., processor bid

8.83A

8.75A

 

 

 

Soybean Meal, 48% Decatur Bid

290.90A

278.30A

 

 

 

Cottonseed Meal, Memphis, ton

255.00

255.00

 

 

 

Canola meal, Minneapolis, ton

204.00

204.00

 

 

 

Linseed Meal, Solvent, Minneapolis

200.00

200.00

 

 

 

Meat and Bone Meal, Chicago, ton

225.00

245.00

 

 

 

Fish Meal, Menhaden, Atlanta, ton

N/A

N/A

 

 

 

Corn Gluten Meal, 60%, Chicago, ton

500.00

470.00

 

 

 

Distillers Dried Grains, Chicago, ton

125.00

125.00

 

 

 

17% Dehy. Alfalfa Pellets, KC, ton

280.00

280.00

 

 

 

Millfeeds, Midds, Minneapolis, ton

85.00

90.00

 

 

 

Molasses, Cane, Houston, ton

145.00

142.50

 

 

 

Dried Citrus Pulp, Atlanta, ton

190.00

190.00

 

 

 

Whey, Whole, Chicago, cwt.

21.63

21.13

 

 

 

Rolled Oats, Minneapolis, ton

453.00

453.00

 

 

 

Barley, Los Angeles, cwt.

10.25

10.14

 

 

 

Feeding Wheat, Kansas City, bu.

4.96

4.96

 

 

 

 

* Chicago corn and soybean prices for latest and previous week are the middle of the range of to-arrive bids; soybean meal prices are midrange of processor quotes. Chicago corn and soybean prices provided by USDA Market News. Six months, year ago comparisons are all spot cash. Based on prices reported by Feedstuffs' market reporters.

A: average

N/A: not available

Southwest dairies hit hard by Goliath

Winter Storm Goliath packed a powerful punch to the heart of the Texas dairy industry that will be felt well into the future, from a reduction in the state’s milk supply to dairy financial losses to the emotional impact on farmers of losing their animals, according to Darren Turley, executive director of the Texas Association of Dairymen (TAD).

New Mexico dairies were also hit hard but specific losses were still in the process of being determined.

“Like all agriculture, dairy producers always operate at the mercy of Mother Nature,” Turley said. “With Goliath, she dealt a particularly harsh and costly blow to the area’s dairy producers, from the death of thousands of livestock they spend so much time caring for to a loss of milk production both over the weekend and in the future.”

It wasn’t until this past Tuesday that many dairy producers in the primary impact area – from Lubbock west to Muleshoe and north to Friona (roughly areas south of Interstate 40) – were able to safely walk among their cows and survey the situation, said Turley, who has talked to many of the producers in the region.

Turley estimates the region – which includes half of the state’s top 10 milk producing counties – is home to about 36% of the state’s dairy cows, or an estimated 142,800 cows. He estimates that the blizzard killed about 5% of mature dairy cows and an as-yet unknown number of calves and heifers. As producers are able to fully examine their herds, Turley estimates losses will continue to climb.

“The immediate challenge is how to handle these sudden, massive losses of animals,” Turley said. “The ordinary methods for disposal cannot handle the volume of deaths we are seeing from this storm. The TAD is working with the Texas Commission on Environmental Quality and other agencies to determine how the animals can be disposed of both quickly and safely.”

In addition, TAD is working with the Texas Governor’s Office, the Texas Department of Agriculture and other state and federal agencies to determine whether financial assistance is available for impacted dairy producers.

Turley warned that the storm will have a lingering effect on the state’s milk supply. During the storm, weather conditions and road closures both kept dairy employees, who normally milk the animals twice a day, and tanker trucks, which transport the milk from dairy to processor, from reaching farms. Not only were hundreds of loads of milk ready for processing wasted, but, on some farms, cows went almost two days without being milked, Turley said.

“When a dairy cow goes that long without being milked, her milk supply starts to dry up,” Turley said. “That means the dairy cows in this region will give less milk for months to come. Less milk going to market will be felt by consumers, as well as by dairy farmers.”

Dairy farmers in Clovis, N.M., also were hit hard. Authorities estimate thousands of cows will be lost there because of the storm. Robert Hagevoort, a dairy extension agent in the area, said that while hard to quantify, he estimates about 5% death loss on milking cows and double that on young stock.

Outlook for 2016 promising

The overall economic outlook for 2016 is promising although some challenges might still be ahead, says an expert in the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.

“We are entering our 79th month of economic expansion in the U.S., which is the fifth longest period on record,” said Mark Partridge, the C. William Swank Chair in Rural-Urban Policy in the college. “I remain optimistic on national growth.

“Back to back, 2015 and 2016 look to be the best years of the 21st century yet.”

Consistent growth

Partridge said the U.S. stands out among advanced economies as one of the most consistent in the past few years in regard to economic growth.

“As of the October employment report released in November, 2015 U.S. job growth is on track to be good by post-2000 standards, but not as good as 2014, which was the best since 1999,” he said.

However, Partridge noted that though 2016 looks to be another good year, there are numerous risks that could easily slow growth. Some of the risks, he said, include the stalled U.S. Congress, which did not have agreement to enact any kind of fiscal policy for the country.

“Additionally, policy institutions such as the International Monetary Fund have also highlighted the need for the U.S. to make large investments in infrastructure as a long-term growth strategy, which is not currently underway,” Partridge said. “These same institutions have also raised the alarm on the possible impact of climate change and the risks of not investing in climate change management strategies.”

Poised to prosper

Finally, with growth in China slowing down, there is a broader trade slowdown on the horizon, which will impact the global economy, he said.

Partridge also highlighted some surprising trends that reflect the larger economic picture.

“Today, 25% of young adults live with their parents,” he said. “This is a big change in recent years. In 1980, this figure was only 5%.

“These young people are also not married, either, which again is a major shift. Data shows that married men tend to be much more productive. These unmarried young adults are also choosing not to buy houses, they are instead living in apartments.”

Bacterial species linked to chicken lameness identified

Researchers at the University of Arkansas have identified a species of bacteria that had never before been associated with lameness in broiler chickens, bringing scientists closer to finding a way to prevent infections.

Using genetic tools and chickens raised on wire flooring as is used in commercial production, the research team determined the bacterium Staphylococcus agnetis is significantly involved with a condition leading to lameness in those broiler chickens, said Douglas Rhoads, university professor of biological sciences and director of the cell and molecular biology interdisciplinary graduate program at the university.

The bacteria had been associated with inflammation of the mammary gland in cattle but not in the legs of broiler chickens, Rhoads said. Lameness causes the chickens to suffer and the diseased birds are not fit for human consumption. Rough estimates are that lameness just in the Arkansas poultry industry could cost growers about $20 million a year due the loss of birds, he added.

The team published its findings on Nov. 25 in PLOS ONE, the online, open-access journal from the Public Library of Science.

"Lameness in broiler chickens is a significant animal welfare and financial issue," Rhoads said. "This is the first report of this poorly described pathogen in chickens."

University of Arkansas professor of poultry science Bob Wideman had shown that growing young broilers on wire flooring is a contributing factor to lameness in broiler chickens. The new study, which included Wideman, shows that S. agnetis is also a contributing factor for lameness in those chickens, Rhoads said.

The study arose from the doctoral dissertation work of Adnan A.K. Al-Rubaye, now an instructor and associate director of the cell and molecular biology graduate program, with contributions from Sohita Ojha, a doctoral student in the program; and Joseph Koon, an undergraduate student at Ouachita Baptist University.