READ the NAFB’s National Ag News for Tuesday, April 13th

Sponsored by the American Farm Bureau Federation

CoBank: U.S. Economy Gaining Momentum

The U.S. economy continues to outperform expectations as stimulus funds are fueling robust consumer spending. Forecasts point to seven percent GDP growth for 2021, the fastest rate of expansion since 1984, according to CoBank. The transition to a less COVID-restricted world has begun. But for the economy and rural industries, CoBank says there will be no going back to pre-COVID conditions. Researchers say the focus in Washington is shifting from crisis management to building for the future, and the outcomes will reshape rural economies. Meanwhile, CoBank reports the cyclical turn in grain pricing continued during the first quarter of 2021 and has picked up further gains ahead of spring planting. Farm supply retailers are positioned to benefit from an exceptionally strong spring agronomy season, outpacing fall and spring 2020. The U.S. fuel ethanol sector has recovered, with production running near 90 percent of pre-COVID levels. And chicken, beef and pork all see strong demand and profitability. However, dairy exports are struggling, mainly due to shipping-related issues.

Farm Credit System Reviews Current Ag Economy

Record agricultural exports are contributing to favorable economic conditions for the U.S. farm sector. Exports to China have risen to record levels, with increases in soybeans, corn, wheat, and cotton. High crop prices and strong producer margins are expected to bring more acreage into production, but continuing drought in much of the western United States is a concern. The Farm Credit Administration says farm sector income is expected to remain above average in 2021. Stronger market prices and receipts are expected to mostly offset the decline in government payments. Strong farmland values, especially in the Midwest, reflect current income prospects, increased interest from both farmers and investors, and low interest rates. The data was presented to the Farm Credit System last week. Despite the pandemic’s shock to the U.S. economy and agriculture, the system remained safe and financially sound in 2020. The system reported strong results for the year, including robust loan growth driven by real estate lending, higher earnings, and increased capital.

Brazil Lowering Biodiesel Blend from B13 to B10

Brazil last week announced it will lower the percentage of vegetable oil blended into petroleum diesel. Brazil will reduce the blend from 13 percent, or B13, to ten percent, or B10. Brazil’s government claims the change is the result of the high cost of biodiesel, citing the elevated price of domestic soybeans and soybean oil. Michael Cordonnier of Soybean and Corn Advisor Inc. writes, “The industry feels this will throw the biodiesel sector into disarray because they had already made the investments needed to increase the blend percentage to 15 percent by the year 2023, which was the stated goal of the government.” Biofuel proponents in Brazil criticized the action and asked it to be rescinded. Industry experts in Brazil estimate the announcement will reduce the use of soybean oil by 650,000 tons per year, and soybean crushing would decline by 3.25 million tons per year. Brazil has previously lowered biodiesel blends citing an insufficient supply of soybeans.

Average Hurricane Season to Feature More Storms

The average hurricane season will feature more predicted storms, according to the National Oceanic and Atmospheric Administration. Beginning with this year’s hurricane season outlooks, NOAA’s Climate Prediction Center will use 1991-2020 as the new 30-year period of record. The updated averages for the Atlantic hurricane season have increased with 14 named storms and seven hurricanes. The average for major hurricanes, Category 3, 4 or 5, remains unchanged at three. The previous Atlantic storm averages, based on the period from 1981 to 2010, were 12 named storms, six hurricanes, and three major hurricanes. NOAA is updating the set of statistics used to determine when hurricane seasons are above-, near-, or below-average relative to the climate record. This update process occurs once every decade. The increase in the averages may be attributed to the overall improvement in observing platforms, including NOAA’s fleet of next-generation environmental satellites and continued hurricane reconnaissance. NOAA says it may also be due to the warming ocean and atmosphere, which are influenced by climate change.

Tyson Foods Unveils $425 Million Poultry Facility in Tennessee

Tyson Foods last week opened the company’s new poultry complex in Humboldt, Tennessee. The $425 million project, which includes a processing plant, feed mill and hatchery, represents Tyson’s biggest investment in Tennessee. Several hundred workers have been hired so far and are being trained for the start of production later this month. The processing plant, which is expected to employ more than 1,500 people by 2023, will produce pre-packaged trays of fresh chicken for retail grocery stores nationwide beginning in late April. The payroll and payments to farmers from the new operation, along with the purchase of grain and utilities, is expected to generate an annual economic benefit to Tennessee of $150 million. The company’s Humboldt feed mill, which will supply feed for approximately 56 local poultry farmers, will employ 30 people and produce 14,000 tons of finished feed a week when production reaches full capacity. The Humboldt hatchery employs 30 workers and provides chicks for local poultry farmers who supply broiler chickens to Tyson.

Gas, Diesel Prices, Decline Slightly

For the fourth straight week, the national average price of gasoline has dropped, declining 2.1 cents to $2.85 per gallon. The national average now stands 0.5 cents lower than a month ago and $1.02 per gallon higher than a year ago. The national average price of diesel has fallen 1.1 cents in the last week and stands at $3.07 per gallon. Gas Buddy’s Patrick De Haan says, “It has been a fairly tame last few weeks at the pump for most areas after a particularly active February and March when prices were screaming higher.” De Haan adds, for now, the risk of seeing the national average climb to $3 per gallon has been delayed by a recent surge in COVID-19 cases, limiting the upside to gasoline demand. However, as the outlook improves, we still have potential to see summer gas prices at their highest levels in years. U.S. gasoline demand fell for the first time in seven weeks after a healthy Easter travel holiday boosted demand, down just shy of one percent.

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.