Surprisingly good quarter for Deere

It was a surprisingly profitable first quarter for Deere & Company. The Moline, Illinois-based equipment giant posted a 19 percent jump in earnings for the quarter ending January 31. Net profit for the quarter came in at $243 million or 57 cents per share compared to $204 million and 48 cents per share a year ago.

Overall revenue dropped 6 percent to $4.84 billion and net equipment sales were down 7.1 percent to $4.24 billion. The increase in profit came from a combination of lower raw material costs, higher selling prices and favorable currency fluctuation. In fact, the company says currency fluctuations increased sales 5 percent.

Deere also boosted its fiscal 2010 forecast projecting earnings of $1.3 billion on 6 to 8 percent sales growth. The previous prediction was $900 million in earnings and a 1 percent decline in sales. The company says it expects farm equipment sales in the U.S. and Canada to be flat compared to 2009. Previously they had predicted a 10 percent decline. Sales in Western Europe are projected to fall 10 to 15 percent while sales in South America are expected to increase 10 to 15 percent for the year.

Read more from Deere & Company here:

A very good fourth-quarter for Kraft

Turned out to be a pretty good fourth-quarter for Kraft. The food giant says net profit almost quadrupled compared to a year ago thanks in part to the completion of a three-year restructuring. The company got rid of some less-profitable brands, discontinued product lines and closed plants.

For the quarter, Net income was $710 million, or 48 cents a share, compared to net income of $178 million, or 12 cents a share, in the year-earlier quarter. Sales rose 3.2% to $11 billion. Gross profit margin increased to 37.5% of sales from 31.6%.

In particular, the company highlighted strong quarterly sales of Capri Sun and Crystal Light drinks, Oscar Mayer deli fresh meats, its namesake macaroni and cheese, DiGiorno and Tombstone pizzas.

Ironically, Kraft is selling its U.S. pizza business to Nestle to help fund its $19 billion acquisition of Cadbury.

For the year, Kraft reports net revenue declined 3.7% to $40.4 billion but the diluted earnings per share was up 7% to $2.03.

Read more here:

Wisconsin ethanol plant sale still not settled?

The sale of the Renew Energy ethanol plant in Jefferson, Wisconsin is back in the news. The bankruptcy sale of the plant in December was disputed when Iowa-based All Fuels and Energy claimed they had bid more than the declared winning bid submitted by Texas-based Valero Energy. All Fuels sought to halt the sale but their claim was rejected and Valero’s $72 million bid prevailed.

All Fuels says they still want the plant and offered Valero $82 million in January, Valero countered with a $100 million price tag and All Fuels agreed. Valero says the discussion was casual and they never really had a deal. Spokesman Bill Day tells the Milwaukee Journal-Sentinel Valero plans to close on its purchase of Renew soon and operate the plant.

A closer look at organic production

USDA has released the results of their first-ever survey of organic farms in the country.

The survey counted 14,540 U.S. farms and ranches that were either USDA certified organic or were exempt from certification because their sales totaled less than $5,000. The farms utilized 4.1 million acres of land, of which 1.6 million acres were harvested cropland and 1.8 million acres were pasture or rangeland.

While there were organic farms or ranches in all 50 states, nearly 20 percent of the operations, 2,714, were in California. Wisconsin was a distant second with 1,222 farms. California also led the nation in organic sales, with $1.15 billion, 36 percent of all U.S. sales. Nationwide, 2008 organic sales totaled $3.16 billion, including $1.94 billion in crops sales and $1.22 billion in sales of livestock, poultry and their products.

Most U.S. organic producers sold their products locally, with 44 percent of sales taking place less than 100 miles from the farm. Nearly 83 percent of organic sales were to wholesale channels. Just over 10 percent of sales were direct to retail operations like supermarkets and 7 percent of sales were direct to consumers through farm stands, farmers’ markets, community supported agriculture and other arrangements.

The survey also found more than 78 percent of the organic producers plan to maintain or increase organic production over the next five years.

The full report is available here:

IL ag groups to solicit public’s view of farmers

Leading Illinois ag groups are working with a public relations and a research firm to determine how the public views farmers. Illinois Farm Bureau says they want to find out what the public perception of the farmer is so they can communicate more effectively with non-farmers.

Illinois Farm Bureau says project is in the early stages but the results will be made public for all commodity groups to use.

Illinois Farm Bureau

MU soybean scientist honored by AAAS

The world’s largest scientific society has honored a University of Missouri soybean scientist with a fellowship. The American Association of the Advancement of Science (AAAS), which publishes the journal Science, elected Henry Nguyen director of the National Center for Soybean Biotechnology at M-U. It honored Nguyen for his “distinguished research contributions in plant genetics and genomics” and in drought tolerance research.

Nguyen was also recently chosen as a visiting professor of biotechnology at the Vietnam National University-Ho Chi Minh City (VNU), in Vietnam.  The University of Missouri and VNU have an agreement to cooperate on education and research.

A Great Lakes Asian carp summit

The Chair of the White House Council on Environmental Quality says she will sit down with governors of the Great Lakes states to talk about the Asian carp. In response to a request from Michigan Governor Jennifer Granholm and Wisconsin Governor Jim Doyle, Nancy Sutley said she would “like to suggest a meeting during the first week of February, either in the Midwest or in Washington D.C., with you and your fellow Great Lakes Governors or your designees, to discuss the strategy to combat the spread of Asian carp and ensure coordination and the most effective response across all levels of government to respond to this threat.”

Earlier this week the U.S. Supreme Court refused to take up a request by Governors Granholm, Doyle and others to close a couple of shipping canals in Chicago in an effort to keep the Asian carp out of Lake Michigan. The City of Chicago, State of Illinois and the White House opposed the idea.

Asian carp are voracious eaters and fears are they will destroy the food supply for native fish in the Great Lakes.

Green diesel plant to be built in Wisconsin

Flambeau River Biofuels has executed a letter of intent to engineer, procure and construct the largest second-generation “green diesel” plant in the United States. The $250 million facility will be part of an existing pulp and paper mill in Park Falls, Wisconsin. It will use a patented process to convert 1,000 dry tons per day of woody biomass from bark, sawdust, wood and forest residue into heat, steam and electricity for the paper mill. This will make the Flambeau River Paper Mill the first in North America to run on fossil-free energy. The process will also create green diesel fuel and wax for the domestic market.

Green diesel is renewable sulfur-free diesel made from forest and agricultural by-products and can be used as a blending agent for trucking and aviation fuel. Green wax can replace petroleum-based waxes used in candles and for waterproofing cardboard.

Partial funding for the project comes from a U.S. Department of Energy grant. The facility should be fully operational by 2013.

Tyson reaches chicken labeling settlement

Tyson Foods has reached a settlement in its “Raised without antibiotics” class action lawsuit. The case originated when Tyson labeled and sold chicken as “Raised without antibiotics”. Competitors Perdue Farms and Sanderson Farms brought suit charging Tyson was using ionophores which are classified as antibiotics by USDA even though, as Tyson claims, they do not contribute to antibiotic resistance in humans.

Tyson was ordered to remove the claim in April of 2008. The suit by Perdue and Sanderson was settled but a wave of consumer suits followed which were then consolidated into the class action.

Under the $5 million agreement filed in U.S. District Court in Baltimore this week, Tyson will pay $600,000 in administrative costs and $4.4 million in payments of up to $50 to people who purchased Tyson chicken, fresh or frozen, whole or breaded pieces, Cornish hens or deli, between specified dates in 2007 and 2009. There are three levels of reimbursement in the deal.

If Tyson does not pay out the entire $5 million, they must make up the difference by donating food products to food banks.

We are paying less at the grocery store

It costs even less at the grocery store these days. The American Farm Bureau reports retail food prices decreased for the fifth consecutive quarter and are significantly lower than a year ago. AFBF says the total cost of the 16 items in their Market Basket Survey which can be used to prepare a meal was $42.90, down $3.13 from the third-quarter of 2009 and $7.31 below a year ago.

Compared to the third quarter, prices were lower deli ham, bacon, sirloin tip roast, boneless chicken breasts, shredded cheese, flour, potatoes, apples, orange juice, bagged salad and vegetable oil. Quarterly prices were a little higher for milk, eggs, white bread and ground chuck. Toasted oat cereal was unchanged.

All items were cheaper than a year ago with 20-percent-or-larger declines in milk, vegetable oil, chicken breasts, cheddar cheese and potatoes.

AFBF says Americans today spend just under 10 percent of their disposable annual income for food, the lowest average of any country in the world. Meanwhile, the farmer’s share of that food dollar continues to decline from roughly 33 percent in the mid-1970’s to 19 percent today. In other words, of the $42.90 spent on the Market Basket items, the farmer gets $8.15.

Some interesting notes on retail milk sales. The AFBF found the average price for a gallon of whole milk was about 25 percent cheaper in gallon containers compared to half-gallon containers. The average price for a half-gallon of rBST-free milk was about 55 percent higher than a half-gallon of regular milk. The average price for a half-gallon of organic milk was about 80 percent higher than the price for a half-gallon of regular milk.

Consumers also paid about 80 percent more for “cage-free” eggs compared to regular eggs.

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