READ the NAFB’s National Ag News for Wednesday, April 8th

Sponsored by the American Farm Bureau Federation

Dairy Groups Unite to Ask Federal Government for Help

The National Milk Producers Federation, the largest dairy organization in the U.S., as well as the International Dairy Foods Association, came together to ask for help. They sent a request for assistance to Ag Secretary Sonny Perdue. Jim Mulhern, President and CEO of NMPF, says, “As most of the country shelters in place and large swaths of the foodservice sector come to a standstill, dairy sales outside the retail channels have plummeted. Market prices have dropped rapidly, which has created a crushing economic outlook for producers of nutritious and necessary milk and dairy products.” The groups say no plan will fully remedy the losses; however, dairy is responding with a united plan that can help mitigate the damage caused by COVID-19. “Dairy industry discussions have led to a comprehensive action plan to address many of the key marketplace challenges created by the pandemic and we will present it to USDA,” Mulhern adds. “We understand the demands that USDA is under, but after five straight years of poor milk prices, they were just starting to rebound when the pandemic hit.” He says immediate actions by USDA are critical to helping people survive the market devastation that has occurred.

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Ethanol Industry in “Free-Fall”

The ethanol industry is in an economic free-fall as fuel demand drops because of the COVID-19 outbreak. Governments around the world are urging or requiring their citizens to stay home as a means to help control the spread of the coronavirus. The Capital-Journal says as more and more individuals stay home, the demand for ethanol-blended gasoline continues to drop. The pandemic hit the ethanol industry at a time when it was already struggling because of poor market conditions. The industry had already endured a trade war with China, a glut of oil production that sent ethanol prices tumbling, as well as waivers from the Environmental Protection Agency that helped refineries use less ethanol. “The important context here is that a lot of the ethanol industry was hanging on by a string before the coronavirus hit,” says Brian Jennings, CEO of the American Coalition for Ethanol. “We’re seeing unprecedented demand destruction and 2020 is likely going to be a bloodbath for the industry.” The market upheaval has put thousands of ethanol jobs in jeopardy. It’s also hurt the pocketbooks of the tens of thousands of farmers who provide the corn that ethanol plants use to make the biofuel and its byproducts like dried distillers grains. The per-gallon price paid to ethanol producers dropped 37 percent from February to March.

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Farmer Sentiment Takes a Hit in March

The Purdue University/CME Group Ag Economy Barometer took a dive in March, dropping 47 points from the previous month to a reading of 121. This was the biggest one-month drop in the history of the index, which dates back to late 2015. Declining agricultural commodity prices and the coronavirus impact on the U.S. economy and ag sector are what took down farmers’ previous optimism. This month’s decline in the index wipes out the improved sentiment that took place last fall and winter, leaving the index at the same reading it was in September of 2019. The Index of Current Conditions dropped 43 points, while the Index of Future Expectations went down 49 points during March. Both measures dropped by their largest amounts since the survey began collecting data back in 2015. The biggest reason for the drop is producers’ worry over what kind of impact the coronavirus outbreak will have on their farms in 2020. Coinciding with the coronavirus impact, a growing number of producers say they expect their farm’s financial performance in the upcoming year to be worse than last year. The weaker economic outlook also made farmers less optimistic about investing in their operations.

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Trump says China will Meet Its Obligations

President Donald Trump gave what could be called a “qualified endorsement” of China’s attempts to meet its purchasing obligations under the Phase One Trade Deal. While commenting on the measures that the government is taking to protect the U.S. economy, agriculture came up in the conversation. The South China Morning Post quotes Trump as saying American farmers could expect some support from agricultural purchases that China will make as part of the agreement. “As of April 1, it seems like China is buying,” the president says. “We’ll let you know how that’s going, but they’re buying anywhere from $40 – $50 billion worth of our agricultural products, which will have a huge impact on our farmers.” Trump is confident that China will follow through because “I know and respect President Xi (ZHEE), and I think he’ll honor the deal that China made with us.” Without specifying who he talked to, Trump added, “In fact, I called up a while ago and asked how farmers are doing concerning China. Are they buying as anticipated?” Trump says the answer was “yeah, I think so.” He told reporters that the answer wasn’t the “most positive,” but it was at least starting.

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USDA Working on Aid for Livestock, Dairy, Specialty Crops

Ag Secretary Sonny Perdue is working on developing aid programs for livestock, dairy, and specialty crop producers ahead of any aid to traditional commodity producers in the wake of the coronavirus outbreak. The Hagstrom Report says House Ag Committee Chair Collin Peterson spoke with Perdue, who told the chairman that he’s trying to develop systems to provide aid specifically for livestock, dairy, and specialty crop growers. Perdue also told Peterson he’ll “hold off” on any aid to commodity growers because they received significant payments earlier this year. Peterson also says the secretary told him he’s going to wait and see if crop producers will eventually need more aid. Perdue is currently having the chief economist and staff look across the different segments of the agricultural economy and try to determine which of the commodities have been hit hardest by the coronavirus. “They’re also looking at which ones will likely have the most damage going forward from here,” Peterson says. “USDA may come up with an aid system like last time, but the formula will be different. Facilitation payments won’t be based on trade, rather on the damage done by COVID-19.” Peterson is also concerned about the dairy industry, saying he supports reopening signup for the Dairy Margin Coverage Program.

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NASS to Re-Survey Producers with Previously Unharvested Corn, Soybeans

The USDA’s National Agricultural Statistics Service will once again have follow-up work to do on the 2019 harvest. NASS will be contacting survey respondents in Michigan, Minnesota, South Dakota, and Wisconsin, who had previously reported unharvested corn and/or soybean acres. If the newly collected data make any changes necessary, NASS will update the January 10th estimates in the May 12th Crop Production Report. Stocks estimates are also subject to review since unharvested production is included in the estimate of on-farm stocks. When NASS originally surveyed producers in December for the Crop Production 2019 summary, there were significant unharvested acres of corn in Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin; and there were unharvested soybean acres in Michigan, North Dakota, and Wisconsin. The unharvested acres were included in the January 10th report. NASS had originally said it would resurvey producers in January. However, because it wasn’t clear when producers would be able to get back into the field to finish harvest, the agency couldn’t set a re-survey date until now. Since there is still significant acreage left for harvest in North Dakota, producers there will be contacted at a later date.

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.