Friday 27th January 2012

Another disappointing week for dairy producers

And so ends another tough week for dairy producers. While the cash cheese blocks moved three-quarters of a cent higher on Friday, the first move since May 13th, Class IIIfutures continued to slide. Since May 1st, the June 2009 contract has lost 65-cents, July is $1.28 lower and August is down $1.13.

USDA Ag Market News says milk production across the country is at or near seasonal peak. Cheese plants are running pretty close to fullcapacity and additional milk is expected over the long holiday weekend. The one exception is California where milk production is running below year ago levels and plants are keeping pace. Remember a year ago milk from the Golden State was being shipped to processing plants across the country.Production in Arizona has backed off a bit as well, the result of two weeks of 100-degree-plus temperatures. Commodity Credit did purchase another 2.37 million pounds of Western nonfat dry milk during the week. Since October 1, 238.4 million pounds of nonfat dry milk and 4.6 million pounds ofbutter have been purchased by CCC.

Dairy cow slaughter in April was 215,000, 4,000 less than April of last year and down 23,000 head below March. Of the 215,000 sent to market, 68,600 were from the Midwest and 58,800 from the West. For the January through April period,978,000 dairy cows were sent to slaughter, 94,000 more than the same period in 2008.

Fluid milk sales in March totaled 4.8 billion pounds, 2.6% more than March of last year. There were increased sales of flavored whole, organic whole, 2%, 1%, skim, flavored fat-reduced,organic fat-reduced and buttermilk. Sales were lower than a year ago for whole milk.

Cattle on feed numbers about as expected

USDA's monthly cattle on feed update came out near pre-report expectations. According to Iowa State University Extension Livestock Economist John Lawrence, the real surprise came from the weight breakdowns in the placement category, “We saw an increase in the lighter weightplacements…so I think what that may indicate is that we're going to postpone some of those marketings, they won't be as front end loaded as they were.”

When trade resumes Tuesday, Lawrence expects cattle futures to have a neutral to bullish reaction to thenumbers, adding that he sees futures prices weakening during the summer before bouncing back in the fall.

The total amount of cattle on feed on May 1 was down 3% from a year ago at 10.822 million head, placements during April were up 4% at 1.600 million head and Aprilmarketings were 7% below a year ago at 1.871 million head.

Where will all this listening lead the USDA on NAIS?

At the end of a daylong NAIS listening session held by USDA officials, the question was, ‘where will all this input lead the USDA?’ Texas Farm Bureau director of organization, Joe Maley, told Brownfield he’s not sure, “I wish I knew that answer. It’s been brought up in thislistening session – we’ve been dealing with this, like, seven and eight years. It (NAIS) is a go, start, stop, stop, start, go. It’s been a little frustrating for us.”

Whatever is done, Maley says the underpinnings of NAIS should not be food safety-focused, “Itshould focus on disease control and eradication. This particular program is not designed as a food safety mechanism. This is a disease control.”

And, Maley says any animal id system should remain voluntary. Unless it’s voluntary, market driven, cost effective,confidential with limited liability to producers, he says the Texas Farm Bureau will NOT support it. Maley participated in the group discussions on record at the NAIS listening session in Austin, Texas.

Congress trying to complete Panama trade deal

The Senate Finance Committee held a hearing Thursday on the U.S.-Panama free trade agreement.

Assistant U.S. Trade Representative Everett Eissenstattold the committee the administration has been working with Panama to address labor law concerns, and that he expects those issues to resolved fairly soon.

Committee member Chuck Grassley of Iowa says implementation of the Panama agreement—as well as those with Colombiaand South Korea—is long overdue.

Using watermelons to make ethanol?

Agricultural Research Service studies conducted in Oklahoma have shown that simple sugars in watermelon juice can be madeinto ethanol.

It’s estimated that watermelon growers leave about 20 percent of their crop in the fields each year because of external blemishes or deformities. Now, instead of being plowed under, those melons could get an economic-new lease on life as ethanol.

Nutraceutical compounds in the melons, such as lycopene and citruline are thought to promote cardiovascular and other health benefits. Studies indicate that after these compounds are extracted from the watermelon, ethanol can be fermented from the glucose, fructose and sucrose inwaste-stream juices.

Researchers says making ethanol offers the potential benefits of helping to defray sewage treatment costs and providing watermelon growers with a new market for their crop.

Illinois seed plant marks a century

A Pekin, Illinois-based seed business was recognized this week for crossing a milestone. The former Sommer Brothers Seed Company began operations in 1909 and has been doingbusiness ever since.

“My great-grandfather and his brother were farmers and very interested in increasing production and trying to find ways to make their yields better and wound up in the seed business,” said Mark Sommer, who represents the fourth generation atthe seed plant, which was acquired by Syngenta five years ago.

The first crop processed by the company was 20 bushels, but the current plant manager, Tim Hufnagle, says the facility has grown to a much greater capacity.

“The facility used to putout about 250,000 units of soybeans a year and now we’re at 1.5 million in very modern facility that’s done some capital improvements to improve the quality of the seed that we produce here,” said Hufnagle.

The recognition is the Peoria Historical Society Centenarianaward.

Water level up in Nebraska’s Lake McConaughy

Lake McConaughy in western Nebraska—the state’s largest reservoir—continues its recovery from a years-longdrought in the region.

McConaughy’s water level is five feet above levels recorded last year at this time—and the highest since 2003. It is now back to 50 percent capacity.

Central Nebraska Public Power and Irrigation District, which operates thelake, says irrigators can expect to receive eight-point-four inches of water this summer. That compares to the six-point-seven inches they’ve received in recent years. And the district hopes to be able to deliver a full 15 inches to irrigators by 2011.

Hog producer atlistening session wants NAIS

Animal disease identification as a means of protecting the hog industry is becoming more of a priority for many pork producers. Takingpart in the group discussion at USDA’s recent NAIS listening session in Austin, Texas was Ken Horton, executive vice president of the Texas Pork Producers Association. He says his state is struggling to get out from under the cloud of brucellosis even though there has not been known a case ofbrucellosis in his state in more than three decades. Horton says there’s a group of east Texas hog farmers who are letting feral hogs interact with their herds affecting the perception in other states about the safety of the Texas domestic herd. Horton says premise identification is crucial andhis group is pressing for it, “And we think that they need to be identified and it has to do with notifying people about disease problems. And I could tell you that for the last four weeks we have been through hell over a virus that had nothing to do with pigs in the United States.”

Horton says technology tags for hogs are “not worth a flip” and the government needs to pay for any tags that are used. His group is also against recording all the movement of animals as part of a national id system.

Rural bankers more optimistic about rural Midwest economy

A monthly survey of rural bankers in the Midwest indicates growing optimism about the rural economy.

According to Creighton University economist Ernie Goss, the Rural Mainstreet Survey’s confidence index, which tracks expectations for the rural economy sixmonths out, rose significantly from April to May. Goss says bankers are clearly getting more optimistic in their economic outlook.

Goss says the overall index for the rural mainstreet economy also increased for the third straight month. But he says other parts of thesurvey continue to point to economic weakness. Both the farmland-price index and the farm-equipment sales index showed declines from April. The farm equipment sales rating hit a record low since the monthly survey started in 2005.

However, bankers with an eye to the1980’s said the conditions for buying machinery are not as bad as they could be. Jim Brown, CEO of Hardin Country Savings Bank in Eldora, Iowa remembers the 80’s, when he says there were no sales and no bottom to the market for a long period of time.

Johanns wants Vilsack to be a strong advocate for agriculture

Since he took office, Agriculture Secretary Tom Vilsack has made it clear that the USDA is not just about farming and ranching. He has repeatedly said that the department’snumber one priority is nutrition—especially for children. In an article in Thursday’s Washington Post, Vilsack calls the USDA “an everyday, every-way department”. In his words, “It’s an opportunity for us to sort of emphasize that new brand.”

Formeragriculture secretary Mike Johanns, now a U.S. Senator from Nebraska—says he has great confidence in Vilsack and hopes he will be a strong advocate for agriculture in the Obama administration.

“My hope is that, in that Oval Office, sitting there with the President—or inthat meeting in the Roosevelt Room with the President in attendance,” Johanns says, “that Tom is there, he’s at the table, and able to make the case as to why this policy is very important for agriculture.”

Johanns says he was fortunate to work for a presidentwho was very supportive of agriculture. “Having been there on the Cabinet, though—if you do not have a President who is supportive of policies that move agriculture forward, you can be a rock star and won’t get anything done,” he says.

Johanns’ says he hasconcerns about the administration’s stance on several issues of importance to agriculture—including climate change legislation and trade.