NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION
National Ag News for April 11, 2023
World Food Price Index Continues Decline
The Food and Agriculture Organization of the United Nations Food Price Index averaged 126.9 points in March 2023, down 2.8 points or 2.1 percent from February. The average marks the twelfth consecutive monthly decline since reaching its peak one year ago. During the past twelve months since March 2022, the index has declined 20.5 percent. The Cereal Price Index averaged 138.6 points in March, down 5.6 percent from February and 18 percent below its one year ago. The Vegetable Oil Price Index averaged 131.8 points in March, down three percent from February and 47.7 percent below its level a year ago. The Dairy Price Index averaged 130.3 points in March, down 1.1 points from February and 10.7 percent lower for the year. The Meat Price Index averaged 113.0 points, up slightly in March, but 5.3 percent lower than a year ago. Finally, the Sugar Price Index averaged 127.0 points in March, up 1.5 percent from February, the second consecutive monthly increase, reaching its highest level since October 2016.
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Coalition Asks Lawmakers to Fund Export Promotion Programs
The Coalition to Promote U.S. Agricultural Exports urges congressional appropriators to continue mandatory funding for Market Access and Foreign Market Development programs. The Coalition also asked the Senate agriculture committee to include a provision that would double the dollars for those programs in the next Farm Bill. In letters sent to the chairs and ranking members of the Senate and House agriculture appropriations subcommittees, the Coalition asked that the MAP get at least $200 million and FMD receive a minimum of $34.5 million in fiscal 2024. The Coalition also called on House and Senate Agriculture Committee leaders to include the Expanding Agricultural Exports Act of 2023 in the 2023 farm bill. The legislation would double the annual funding for MAP and FMD over the five years of the new Farm Bill. The Coalition says the outlook for agricultural trade is “uncertain due to continuing supply chain disruptions, surging international competition and the absence of new, near-term trade agreements.” The group includes more than 120 agricultural organizations.
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Academics Predict USMCA Dispute Panel Would Favor U.S. over Mexico
Ag economists at The Ohio State University predict a U.S.-Mexico-Canada Agreement dispute settlement panel over biotech corn would rule in favor of the United States. The U.S. Trade Representative’s Office recently requested technical consultations with Mexico under the Sanitary and Phytosanitary Measures Chapter of USMCA. The dispute has its origins in a decree issued by Mexico calling for GM corn for human consumption to be phased out by the end of January 2024. Given Mexico is the second-largest export market for U.S. corn totaling $4.792 billion in 2022, the original decree ratcheted up trade tensions between the two countries. Following U.S. pressure, Mexico scrapped the 2024 deadline banning GM corn for animal feed and industrial use on February 13, 2023, while retaining the ban on its use for human consumption. The experts say that “if a panel investigation goes ahead, “our expectation is that it will rule in favor of the United States.”
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Beginning Farm Operations Tend to be in the South and West
beginning farms tend to be more concentrated in Southern and Western States than in other areas of the United States, according to USDA’s Economic Research Service. Data published Monday by ERS shows that in some counties in California and Texas, the proportion of beginning farms is more than one-third of the total farms. As of 2017, there were about 340,000 farms—with almost 900,000 operators—on which all operators were beginning farmers with ten or fewer years of farm management experience. Most beginning farms are small-scale operations, about 67 percent of beginning farms produce less than $10,000 worth of output. Less than two percent of beginning farms achieve an annual production value of more than $1 million. Among farms with at least $10,000 in production, principal operators of beginning farms were 43 years old on average. In contrast, the age of operators of established farms averaged 63 years old. USDA offers numerous resources for beginning farmers.
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Missouri River Runoff Forecast Improves
The latest 2023 calendar year runoff forecast for the Missouri River Basin above Sioux City, Iowa, is showing improvement. Spring precipitation, including increased mountain snowpack and late-season plains snow, has provided improved runoff conditions. The 2023 calendar year runoff forecast above Sioux City is 26.4 million acre-feet, 103 percent of average. The runoff forecast is based on current soil moisture conditions, plains snowpack, mountain snowpack, and long-term precipitation and temperature outlooks. March runoff in the Missouri River Basin above Sioux City was 1.7 million acre-feet, 57 percent of average. System storage is currently 46.8 million acre-feet, 9.3 million below the top of the carryover multiple-use zone. Beginning in mid-March, releases from Gavins Point Dam were adjusted to provide flow support for Missouri River navigation. Navigation flow support for the Missouri River is at minimum service for the first half of the 2023 season, which began April 1 at the mouth of the river near St. Louis, Missouri.
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Gas Prices Inch Higher, Diesel Lower
For the second straight week, the nation’s average price of gasoline has increased, up 8.8 cents from a week ago to $3.57 per gallon. The national average is up 13.0 cents from a month ago but 52.6 cents per gallon lower than a year ago. The national average diesel price fell 1.6 cents last week and stands at $4.15 per gallon, 88.9 cents lower than one year ago. GasBuddy’s Patrick De Haan says, “Expect the upward trend to continue through much of the rest of spring.” However, once the transition to summer gasoline is complete, prices may slump in June. Over the last few weeks, the price of West Texas Intermediate crude rallied by over 20 percent from a low of $65 per barrel to back over $80 last week after OPEC+’s surprise decision to piece together a 1.15 million barrel per day production cut, and as the banking crisis has eased.
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