NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION

National Ag News for June 8, 2022

Farmer Sentiment Plummets as Production Costs Skyrocket

The Purdue University-CME Group Ag Economy Barometer plummeted in May to a reading of just 99, the weakest reading since April 2020. The May 2022 barometer reading marked just the ninth time since data collection began in fall 2015 that the overall measure of farmer sentiment fell below 100. Agricultural producers’ perceptions regarding current conditions on their farms, as well as their future expectations, both weakened this month. The Index of Current Conditions fell 26 points to a reading of 94, while the Index of Future Expectations declined 21 points to 101 in May. Notably, this month saw a rise in the percentage of respondents who feel their farm is worse off financially now than a year earlier, an indication that escalating production costs are troubling producers. The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from May 16-20, 2022.

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EIA Expects Continued High Energy Prices Through 2023

The U.S. Energy Information Administration forecasts that a variety of U.S. energy prices will remain historically high through 2023. The outlook includes oil, natural gas, coal, and electricity, as seen in EIA’s June 2022 Short-Term Energy Outlook Tuesday. EIA Administrator Joe DeCarolis says, “Although we expect the current upward pressure on energy prices to lessen, high energy prices will likely remain prevalent in the United States this year and next.” EIA forecasts that high natural gas and coal prices will result in an increased share of renewables in U.S. generation, largely offset by a decline in coal’s share. The natural gas share is forecast to decline over the next two years, although at a slower rate than coal. EIA says the Brent crude oil price will average $108 per barrel during the second half of 2022, as tight global inventories and significant geopolitical uncertainties continue to put upward pressure on crude oil prices despite an increase in production to pre-pandemic levels.

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Farmers National Company: Land Prices up 20%

The stronger land prices of late 2021 continued higher through the first half of 2022. After a calm period at the start of the year with prices steady, prices took another jump up as a result of the outbreak of war in Ukraine and ongoing inflation fears. Farmers saw higher commodity prices, and investors wanted a low-risk inflation hedging investment, which together propelled the competition for good cropland. Prices for good quality cropland are up 20 percent in some areas since the first of the year. Randy Dickhut of Farmers National Company says, “Good land that was selling for around $16,000 last fall sold for $19,000 to $21,500 per acre at company auctions in March.” The question of the moment is, will land prices go even higher? Dickhut adds, “With current land prices at heightened levels, most of the supporting factors remain in place at this time to keep values steady to firmer for the next six months.”

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Cattle Producers Share WOTUS Perspective at EPA Roundtable

Cattle producers voiced their concerns with the Environmental Protection Agency and Army Corps of Engineers’ ongoing Waters of the U.S. rulemaking this week. The Kansas Livestock Association hosted one of ten roundtable events for the EPA and Army Corps Monday. NCBA Environmental Counsel Mary-Thomas Hart says, “To be successful in their operations, cattle producers need a clear, limited WOTUS definition that finally provides much-needed certainty after years of shifting rules.” In July 2021, the EPA announced that rather than facilitate public engagement—the typical course of action for major rulemakings—the agency would instead ask private organizations to entirely plan and propose a roundtable with stakeholders. In addition to the roundtables, NCBA has engaged on WOTUS by submitting technical comments on the proposed phase one WOTUS rule and filing an amicus brief in the case Sackett v. EPA, a challenge to the EPA’s authority under the Clean Water Act. NCBA has called for the EPA to pause WOTUS rulemaking until the case is decided.

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General Mills Invests $3 Million to Scale Eco-Harvest by ESMC 

General Mills and Ecosystem Services Market Consortium Tuesday announced a multi-year roadmap to scale Eco-Harvest. The market program by ESMC recognizes and rewards farmers for beneficial environmental outcomes from regenerative agriculture. The roadmap focuses on priority regions in the U.S. and Canada where General Mills sources its key ingredients, like wheat, oat, corn, and dairy. The initial $3 million investment from General Mills includes an ESMC grant to support the launch and development of Eco-Harvest and funds to scale regional programs. Eco-Harvest is a voluntary market program that generates and sells credits for increased soil carbon, reduced greenhouse gases, and improved water quality. The credits represent verified environmental benefits created within agricultural value chains resulting from approved farm practice changes. Eco-Harvest supports General Mills’ commitments to advance regenerative agriculture on one million acres by 2030, reduce absolute greenhouse gas emissions across its value chain by 30 percent by 2030, and ultimately achieve net zero emissions by 2050.

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USDA: School Foods Offer Richest Source of Dairy in Children’s Diets

USDA’s Economic Research Service Tuesday released new data showing schools are the richest source of dairy in children’s diets. The data comes from 2017-2018, for children between two and 19 years old. These foods provided an average of 1.99 cups of dairy products per 1,000 calories consumed each day. Food sources are comprised of foods prepared at home and foods prepared away from home, including foods from restaurants, fast food establishments, and schools. The dairy foods group, as defined by USDA dietary guidance, is a major source of calcium and includes milk, cheese, yogurt, lactose-free milk, and fortified soy milk. The Dietary Guidelines for Americans, 2020–25, recommend individuals two years and older should consume two or three cups of dairy per day, depending on age and calorie level of dietary pattern. Although no age group meets this recommendation, children come the closest, with school foods making an important contribution.

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By Tucker Allmer - The BARN

Tucker 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.