READ the NAFB’s National Ag News for Wednesday, March 4th

Sponsored by the American Farm Bureau Federation

Crop Insurance Guarantees Drop Ahead of Spring Planting Season

Corn and soybean crop insurance guarantees have dropped, just in time for the spring planting season that’s right around the corner. A DTN report says that means farmers get less protection against low prices in their revenue policies this year. Guarantees are $3.88 a bushel for corn and $9.17 for soybeans. Those are down 12 and 37 cents respectively from last year. Officials come up with the spring guarantee by averaging the daily close of the December 2020 corn and the November 2020 soybean futures contracts through the month of February. It was poor timing as commodity prices dropped during the final week of February as global markets responded negatively to the spread of the coronavirus. “You’ve got a lower benchmark, a lower revenue guarantee, so you’ll have less coverage than you would have otherwise,” says Jim Mintert, director of the Center for Commercial Agriculture at Purdue University. “From a farmer’s perspective, it’s a huge downer that the market collapsed at the end of February rather than early March.” Depending on the volatility of some factors included in the price guarantee calculations, lower guarantees could lead to lower premiums.

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U.K. won’t Budge on Agriculture in Upcoming Negotiations with the U.S.

The United Kingdom officially published its objectives for the upcoming trade negotiations with the U.S. The announcement included an uncompromising stand on agriculture and food standards, two big sticking points that have slowed momentum for talks getting underway. Politico says the U.K. won’t compromise on its “high environmental protection, animal welfare, and food standards,” along with the drug pricing provisions that are all central to the negotiations. U.S. agriculture and trade officials had hoped that the U.K. would loosen up some of their strictest requirements after officially leaving the European Union in January. The National Association of State Departments of Agriculture says it’s all for high standards for food safety and animal welfare and says U.S. producers already do so. NASDA CEO Barb Glenn says, “American farmers and ranchers produce the safest and highest-quality food that’s enjoyed by consumers across the world. We’re also doing it with fewer resources than ever.” U.S. Trade Representative Robert Lighthizer says the two biggest sticking points, which are agriculture and health care, shouldn’t stand in the way of reaching a deal in 2020.

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Protein Exports Piling up in U.S. Due to Coronavirus

The spread of coronavirus is causing a glut of protein in U.S. cold-storage facilities. The Wall Street Journal says the protein backup includes pork, chicken, and beef intended for export to overseas markets that have been hit by the outbreak. The quantity of breasts, thigh meat, and drumsticks has grown by 12 percent through the first month of 2020, climbing to 957.5 million pounds, which is the highest level ever during January. The amount of pork in storage climbed 11 percent higher in January 2020 than it was at a year ago at the same time. Joe Sanderson of Sanderson Farms, Incorporated, says, “The cold storage facilities we deal with are all busting at the seams.” U.S. meatpackers have been counting on big orders coming in from China as trade tensions between the two countries eased. However, the coronavirus outbreak has put an unexpected dent in that hope. Huge numbers of people across China aren’t eating out, but rather are staying home, which in turn is slowing down meat consumption in China. That hurts the amount of demand for U.S. protein products. Government-mandated quarantines have created logistical snarls in transportation across China. “The ports are basically backed up,” says Tyson CEO Noel White.

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Ag Economy Barometer Hits All-Time High

Producers’ perceptions of improved current conditions in the agricultural economy pushed the Purdue University/CME Group Ag Economy Barometer to a record high. The index rose to 168 in February, an increase of one point from January, and was 18 points higher than in December of 2019. This month’s increase came about largely because of the improvement in the Index of Current Conditions, which jumped 12 points higher in February to 154. The Index of Future Expectations dropped four points from January to finish at 175 in February. Producers who responded to the survey say they are more optimistic about current conditions on their farms and in U.S. agriculture. They retained most of the improvement in their future expectations we saw during January. The optimism is because of events like signing the U.S.-Mexico-Canada Agreement, as well as the Phase One trade deal with China. More than three-fourths of the respondents said signing those two agreements either “somewhat” or “completely” relieved their concerns about the effects of tariffs on their income. Just 17 percent of the respondents said, “not at all.”

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Administration will Defend CCC if Needed

Retiring National Farmers Union President Roger Johnson said over the weekend that he’s worried about the future of the Commodity Credit Corporation. Because of the Trump Administration’s unprecedented use of the CCC to provide trade aid to farmers, Johnson worries that conservative and left-leaning critics of farm bills will work together during the next farm bill debate to end the CCC. The administration says it will defend the Commodity Credit Corporation if there are future attempts to abolish it because of the administration’s use of it to provide trade aid to farmers. The Hagstrom Report asked Ag Secretary Sonny Perdue about Johnson’s fears, to which Perdue replied, “I would hope that’s not the case.” He says the administration used the CCC for a valid reason. “We are hopeful it won’t lead to that,” Perdue said after speaking to NFU members. “We will be willing to defend that.” The Trump Administration provided $28 billion in trade aid for farmers over two years, with the president tweeting recently that they would provide another round of aid if it becomes necessary this year. While Perdue says farmers shouldn’t plan on another round of trade aid, he also said the president is committed to getting farmers through this period.

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Study Shows Meat Demand Will Remain Strong in 2020

The Food Industry Association and the Foundation for Meat and Poultry Research, along with the North American Meat Institute Foundation, combined to produce their 15th-annual in-depth study of meat and poultry from the consumer’s perspective. “The Power of Meat 2020” takes a deep dive into consumption trends, sales growth, and consumer demand. The study finds demand for meat is accelerating with $50.5 billion worth of sales in 2019. The survey looked into consumer interest in topics like production claims and sustainability. 49 percent of the respondents believe animal agriculture doesn’t have negative effects on the environment if done properly. However, the younger generation does believe it has negative impacts, which means consumer education is vital. Meat department sales are strong in both dollars and volume, driven by beef and chicken along with increased household spending. 83 percent of the shoppers who responded say they purchase specific cuts of meat and they are eating smaller portions. However, with total volume sales up slightly, they’re actually eating less meat on a more regular basis.

SOURCE: NAFB News Service

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By Brian Allmer - The BARN

Brian Allmer & the BARN are members of the National Association of Farm Broadcasting (NAFB), the Colorado FFA Foundation, the Colorado 4H Foundation, the Colorado Farm Show Marketing Committee, 1867 Club Board Member, Denver Ag & Livestock Club Member, the Weld County Fair Board, the Briggsdale FFA Advisory Council, Briggsdale 4H Club Beef Leader & Founder / Coordinator of the Briggsdale Classic Open Jackpot Show.