NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION

National Ag News for July 18, 2022

CoBank Report Details Current and Future Ag Economic Conditions

A number of factors are sending up red flags about slowing economic activity and a potential oncoming recession. A CoBank report says inflation is the largest red flag, and the Fed is ready to raise rates until it believes inflation has been controlled. “Warehouse and inventory costs are still rising at near-peak levels, and transportation costs are rising at a much higher rate than before COVID-19,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange. “Grain rail car availability and prices were at multi-year lows and highs respectively, in the second quarter.” Shifting economic sentiments have brought ag and energy commodity prices down from their peaks. Grain prices in the second quarter remained volatile, but grain and oilseed prices should push higher because of tight global commodity supplies, especially wheat and soybeans. There are challenges ahead because of dry July weather, and Asian-made crop protection chemicals will continue in short supply.

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NMPF Supports the “Formula Act,” Wants Production Boost

The National Milk Producers Federation supports bipartisan House legislation that will encourage additional infant formula supply imports to temporarily ease short-term shortfalls in supplies. However, the organization says boosting longer-term domestic production to ensure safe and secure infant supplies in the future is necessary. The “Formula Act” in the House would waive U.S. tariffs on infant formula imports through the end of this year to ensure that the domestic market has the needed formula supplies. The tariff reduction would help the U.S. domestic market recover from an acute processing capacity crisis that created the national shortage of infant formula. “The U.S. has experienced a highly unusual shortage of infant formula for much of this year,” says Jim Mulhern, president and CEO of NMPF. “It’s a crisis that’s dragged on way too long but appears to be improving.” The legislation will address short-term challenges while not creating a permanent dependence on foreign supplies.

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NCGA Corn Congress Meeting Addresses Crop Input Costs, Availability

U.S. farmers are working to help feed the world and fill a void in food production left by the war in Ukraine. Corn grower leaders unanimously passed a measure calling on the White House to maintain grower access to inputs. The measure says the “ability to address the crises facing our world today in a sustainable manner cannot be achieved without fair access to the inputs necessary to raise a crop each year, including pesticides, fertilizer, and biotech seeds.” The unanimous vote comes after the Environmental Protection Agency revised its atrazine registration, a move that could limit access to a critical crop protection tool which has been tested and proven safe for use. The move also comes after the Supreme Court recently refused to hear a case from California regarding glyphosate, which leaves a ruling in place that says glyphosate causes cancer. Farmers worry about a state-by-state patchwork of regulations in the future.

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“Flash Drought” Emerging in Central, Eastern U.S.

While the western U.S. sees water getting scarcer every day, extremely dry conditions are getting worse in central and eastern states. The U.S. Drought Monitor says a “flash drought” has developed in parts of the South and Northeast, including Texas, Oklahoma, and Missouri. CNN says a flash drought is caused by the rapid intensification of a drought due to a combination of unusually high temperatures, sunshine, and wind. The National Oceanic and Atmospheric Administration says flash drought can cause extensive damage to agriculture, economies, and ecosystems. Extreme heat has covered the Southern Plains for a couple of weeks, and more is in the forecast. That’s made the ongoing drought much worse. Roughly 94 percent of Texas was in some form of drought last week, the largest area since 2013, and over 21 percent of the state is in exceptional drought. Oklahoma is also experiencing its hottest summer in several years.

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Removing Barriers to Meet Growing Demand for Food

The American Farm Bureau is calling on USDA to take steps to make sure American farmers continue to have access to crucial fertilizer supplies. The organization submitted comments on USDA’s “Request for Information on Access to Fertilizer.” AFBF says many factors are combining to create shortages and drive up fertilizer costs. “America’s farmers are getting called on to feed both America’s families and families overseas as war and shortages take their toll on international neighbors,” says AFBF President Zippy Duvall. “We need long-term solutions.” The organization’s recommendations include assistance for farmers to expand on-site farm fertilizer storage capacity to help them manage costs year-round. They want the EPA to reform its review processes that create barriers to domestic fertilizer production. AFB also wants modernized weight restrictions for trucks to help reduce the number that’s needed to transport goods and to enact rail reforms to help promote competition, fairer rates, and reliable service.

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Grain Exports Keeping Pace with Prior Marketing Year

U.S. grain exports in-all-forms totaled 96 million metric tons during the first nine months of the current marketing year. The exports to 145 countries are just under the total at the same point in the previous marketing year. Increased grain exports to Mexico, Canada, and Colombia helped to offset year-to-date losses in China and Japan. Those five markets account for almost 70 percent of the grains-in-all-forms commodity exports. “These five markets are very important to overall grain-in-all-forms exports,” says U.S. Grains Council Vice President Cary Sifferath. “Strong exports of corn, DDGS, and ethanol mean Canada is now the third-largest market after Mexico and China.” Mexico surpassed China month-over-month to become the top market for U.S. grains-in-all-forms exports totaling 21 million metric tons during the first nine months of the 2022-2023 marketing year. China is the second largest GIAF export market, with exports of 20 million metric tons during the same period.

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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.