READ the NAFB’s National Ag News for Monday, October 19th…

Sponsored by the American Farm Bureau Federation

Farm Bureau Reviews State-Level Farm Income

The most recent Farm Income Forecast from USDA in early September provided an update on 2020 farm income projections, as well as the first estimates of state-level financial conditions in 2019. Farm cash receipts are forecast to hit a ten-year low in 2020. In 2019, gross farm income from selling crops and livestock, federal support, and other income combined were estimated at $432 billion, rising two percent from the prior year. However, that was down $52 billion from the record-high in 2013. At the state level, farm income was highest in California at $54 billion, two percent higher than the previous year. After California, farm income was highest in parts of the western Corn Belt and Texas. Those areas have high concentrations of feed grain, oilseed, and cotton production, as well as livestock feeding operations. Farm income in Iowa rose four percent in 2019 to almost $32 billion. After accounting for production expenses, state-level net farm income again highest once again in California at $11 billion, a nearly 30 percent drop from 2018, and 27 percent lower than the ten-year average. Similar to gross cash receipts, net farm income was highest in the western Corn Belt and the Southwest states. Ad hoc disaster assistance in 2019 totaled $22.4 billion, up 64 percent from the previous year.

CFTC Finalizes Position Limits Rule

The Commodity Futures Trading Commission approved three final rules recently, including one regarding positions limits for derivatives. That completed the Commission’s rulemakings related to the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Commission adopted new and amended federal spot-month position limits for derivatives contracts associated with 25 physical commodities and amended single-month and all-months-combined federal limits for most of the agricultural contracts currently subject to federal position limits. Under the final rule, federal non-spot month position limits were not extended to the 16 new physical commodities. Senate Ag Committee Chair Pat Roberts says he appreciates the Commission’s careful review and consideration of stakeholders’ input, particularly from the nation’s agricultural end-users, as they put the final rule in place. “This rule contains a clear definition of what practices constitute a bona fide hedge and therefore are not subject to position limits,” Roberts says. “This is critical to ensure all commercial end-users can effectively hedge commercial risk.” He thanked Commission Chair Talbert for keeping his word to both Roberts and American agriculture in finalizing the rule.


ASA #SeeSoyHarvest Campaign Highlighting America’s Soybean Industry

The American Soybean Association’s #SeeSoyHarvest campaign is in full swing and taking Congressional members on a virtual trip to soybean-producing states across the country. In a news release, ASA says, “If farmers can’t come to the Hill, then the hill must go to the field.” The first two videos in the campaign talked about topics like the value of U.S. soy in creating American jobs, the importance of access to overseas markets for U.S. soy, and how a robust infrastructure keeps transportation costs competitive. The latest video, “Biodiesel for the Future,” talks about biodiesel’s benefits, which include creating a new market for soy oil, diversifying the domestic fuel supply, and reducing greenhouse gas emissions. Videos will continue to be released Tuesdays and Thursdays through October. Bill Gordon, ASA President, says being able to travel to Washington. D.C., and advocate for top soy issues is a big deal to soybean farmers. “We love that the #SeeSoyHarvest Campaign is a workaround during the pandemic to continue sharing priority issues with our legislators, remind them that we are a resource as they make critical agricultural policy decisions, and offer a passenger seat inside our world to see what soy harvest is like on the farm,” Gordon says. More information about the videos can be found on the ASA’s social media pages.


The U.K. Says Trade Talks with EU Are “Over”

Talks on a Brexit trade deal between the United Kingdom and the European Union are over. Reuters says that’s the opinion of British Prime Minister Boris Johnson, who feels there is no point in carrying on any conversations unless the EU fundamentally changes its stance on several issues. Johnson’s spokesman says, “The trade talks are over. The EU has effectively ended them by saying that they do not want to change their negotiating position. The only way it will be worth continuing the talks is if the EU makes fundamental changes to its negotiating stance.” The EU had said its negotiators would travel to London for further talks this week as planned. Johnson’s spokesman says the Prime Minister feels there is no reason for the EU negotiator to make the trip unless “he’s prepared to discuss all of the issues based on legal texts in an accelerated way, without the UK being required to make all of the moves.” The UK is also asking the EU to be more willing to discuss some of the practical aspects of trade, such as “travel and haulage.”


U.S.  Ethanol Production Hits Five-Week High

The Energy Information Administration says U.S. ethanol production hit its highest level in five weeks, while inventories reached the largest number seen since the end of August. Ethanol output in the seven days before October ninth averaged 937,000 barrels a day, up from 923,000 the previous week. The EIA says it’s also the most ethanol production since September fourth. The Midwest, which far and away produces the most ethanol in the country, reached an output of 900,000 barrels of ethanol a day, up from an average of 881,000 barrels, and was the region’s highest output since late July. East coast production jumped to an average of 10,000 barrels a day, up from 6,000 the previous week. Rocky Mountain output was unchanged from the prior week, producing an average of 10,000 barrels a day. Gulf Coast production took the biggest dive from the previous week, coming in at an average of 9,000 barrels per day after averaging 17,000 barrels a day, with the drop likely due to the effects of Hurricane Delta. The EIA also says inventories increased last week to 20 million barrels. That’s up from 19.6 million barrels the week prior and the largest amount of ethanol in storage since late August.


China Leading U.S. Corn Buyer Early in Marketing Year

A recent buying spree means China is running away with the top spot on the U.S. corn buyer list six weeks into the marketing year. China has purchased 10.4 million tons for delivery during 2020-2021, twice as large as the sales to date for Mexico, which is usually the number one U.S. corn purchaser. “Our top customer for the current crop year is off to a very rapid start,” says Ryan LeGrand, CEO of the U.S. Grains Council. “The phase one trade agreement is a factor, but Chinese importers are also practical and will buy what they need when they need it, and the price is right for them.” The USDA says 1.1 million tons of the corn purchases have shipped to China, and the rest of the 10.4 million tons remains on order. Exporters have sold 4.7 million tons of corn to Mexico for delivery this marketing year, and 941,000 of those tons are in Mexican hands. Mexico has been the top market for U.S. corn for several years now. During the last marketing year, Mexico imported about 14.5 million tons, while China brought in about 2.3 million tons.

SOURCE: NAFB News Service

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.