READ the NAFB’s National Ag News for Tuesday, June 1st
Sponsored by the American Farm Bureau Federation
Regional Farm Credit Conditions Improving
Further strengthening of the U.S. ag economy bolstered farm credit conditions in the first quarter of 2021. A Federal Reserve survey of agriculture credit conditions shows farm loan repayment rates continue to improve rapidly. After many years of growing financial stress and weakness in the ag economy, bankers reported that farm income was higher than a year ago for the second consecutive quarter, and demand for farm loans weakened. Interest rates on farm loans remained at historic lows during the quarter. Along with the better financial conditions, the lower interest rates helped to support widespread increases in farmland values. Stronger markets for most of the major commodities have led to higher prices and expanding profit opportunities across the sector in recent months. With the help of robust government support due to COVID-19, ag sector conditions have led to a rapid improvement in farm finances. While prospects aren’t as strong in the cattle industry, and drought continues to stress producers in many areas of rural America, the overall outlook for farm income and credit conditions remained significantly improved from recent years.
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Brazil Drought Worst in 91 years
Brazil faces its worst drought in 91 years, causing the government to issue a drought alert. Late last week, an agency that’s a part of the Brazil Mines and Energy Ministry recommended the country’s water regulator to recognize a state of “water scarcity” after a prolonged drought-hit central and southern parts of the Parana (Pah-RAHN-yah) River basin. Financial Post Dot Com says a weather monitoring agency that’s part of the Agriculture Ministry issued its first “emergency drought alert” for June through September, saying that rains are likely to remain scarce in five Brazilian states during that period. The lack of rain across Brazil is hurting their agricultural commodities, livestock, and electricity generation as Brazil relies heavily on hydro dams for power. Drier-than-normal weather is especially hard on the second-corn crop, sugar, and coffee. Coffee futures recently hit a four-year high as traders are concerned that drought could even affect the 2022 crop. As they try to deal with the trouble, the Mines and Energy Ministry announced measures aimed at adjusting water levels that supply the country’s hydro dams to try and prevent power shortages.
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Corn Exports Sales Jump While Bean and Wheat Sales Fall
Corn sales to overseas buyers rose while beans and wheat sales dropped during the seven days ending on May 20. The USDA says corn sales totaled 555,900 metric tons, up from almost 278,000 metric tons a week prior. Mexico was the big buyer at just over 378,000 metric tons, while China bought 168,000. The USDA report says unnamed countries canceled shipments worth 70,500 metric tons. Sales for the 2021-2022 marketing year that begins on September 1 were reported at 5.69 million metric tons. China bought 5.64 million tons, followed by Panama at just shy of 132,000 tons. But the agency says large cancellations expected during the week ending on May 20 didn’t materialize. Exports for the week hit 529,000 tons, down seven percent from the prior week. Soybean sales dropped 34 percent from the previous week, coming in at 55,900 metric tons. That number was 65 percent lower than the previous four-week average. Indonesia was the top buyer at 74,900 metric tons. For the 2021-22 marketing year, sales totaled 248,300 tons as Mexico bought 162,500. Exports totaled 294,600 tons, down 12 percent from the previous week. Wheat sales for delivery in the 2020-2021 marketing year that ended on May 31 fell 76 percent to 29,500 metric tons.
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Argentina Cattle Producers Ban on Sales Continues
Argentina ranchers are protesting the government’s decision to suspend beef exports by halting their sales of cattle. One of the country’s beef producer associations announced the halt will continue through Wednesday, June 2. The sales strike began several days ago when the country said it will ban beef exports for 30 days because high food inflation has caught the attention of officials ahead of the mid-term elections in Argentina. Groups protesting the decision issued a statement saying, “The policy path chosen by the government will not achieve the stated goal of lowering domestic meat prices.” Reuters says the export ban pushed agriculture groups to halt the trading of livestock as tensions continue between the country’s farm sector and government, which is dealing with a forecast of consumer price inflation at 50 percent this year. Farm groups in Argentina are asking the government to address inflation by printing fewer pesos. A source from the Argentina Meat Exporters Consortium tells Reuters that, “There is a permanent dialogue with the government. The problem is we can’t find a solution.” Argentina exported over 897,000 tons of beef in 2020, which was worth 2.7 billion dollars.
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EPA Opens Application Period for Grants Dedicated to Sustainable Pest Control
The Environmental Protection Agency is accepting applications for a 1-million-dollar grant initiative through the Pesticide Environmental Stewardship Program. The program, according to the EPA, encourages smart, sensible, and sustainable pest control in agriculture. Through the grants, EPA will support projects that explore innovative practices, technologies, education, and non-regulatory solutions that adopt integrated pest management strategies. While traditional pest control involves the routine application of pesticides, IPM focuses on pest prevention and only using pesticides as needed. EPA’s Michal Freedhoff says, “The work done under these grants supports the agency’s goal of providing a cleaner and healthier environment for all Americans.” EPA anticipates awarding approximately $1 million in total federal funding to support ten projects – one from each EPA region. Applications must be submitted by July 9, 2021, to get considered. The partnership program has previously invested nearly $4 million annually. Awarded projects will start in the fourth quarter of 2021. Grant applications can be sent online at www.grants.gov.
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NCBA/PLC Disappointed with Prairie Chicken Ruling
The National Cattlemen’s Beef Association and the Public Lands Council expressed their disappointment in the U.S. Fish and Wildlife Service. The agency decided to move forward with the Endangered Species Act Designation for the Lesser Prairie Chicken. The decision designates two Distinct Population Segments of the species. The Northern DPS is southeastern Colorado, Kansas, Oklahoma, and the northeast Texas Panhandle, where the birds will be listed as “threatened.” The Southern DPS that covers New Mexico and the southwest Texas Panhandle will now list the species as “endangered.” NCBA and the PLC say the decision to implement restrictive ESA protections for the species after decades-long conservation partnerships directly cuts the incentive to continue effective public-private partnerships. “The scientific data supports our belief that voluntary conservation work led by producers is the most effective way to provide stability for the birds and their habitat,” says Kaitlynn Glover, NCBA Executive Director of Natural Resources and Executive Director of the Public Lands Council. “After years of successful voluntary conservation efforts and the development of meaningful partnerships, the ESA designation of the Lesser Prairie Chicken is severely disappointing.”
