LIGHTHIZER WARNING: BUY GMOs OR EXPECT A FIGHT.

The Trump administration will attack overseas regulations that restrict the export of GMO crops and other products resulting from American technological innovation, said U.S. Trade Representative Robert Lighthizer at the first meeting of a newly created interdepartmental task force on rural America. “We are going to bring cases at the WTO and other venues, we’re going to insist that any barrier be science-based, and the United States will increase exports,” he said.

For decades, U.S. policy has called for international trade rules to be based on fact rather than prejudice. The agribusiness community often points to science-based regulation as a way of removing obstacles to the export of genetically engineered crops. While dozens of reviews have maintained that GE crops are safe to eat, they still face significant public opposition in Europe and other places.

President Trump’s executive order creating the task force directed it to look for legislative, regulatory, and policy changes that promote agriculture, including those that “advance the adoption of innovations and technology for agricultural production and long-term, sustainable rural development.” The order identified 13 areas for examination. First on the list is removing “barriers to economic prosperity and quality of life in rural America.” Second is the advancement of agricultural technology.

Lighthizer said one of the top priorities for his office is the removal of trade barriers that cannot be defended scientifically. Exports generate 20¢ of each dollar of U.S. farm income. If other countries unfairly block U.S. exports because of the technology behind them, he said, “there is a reluctance to incorporate that technology into our own production at home.”

U.S. officials routinely urge other nations to approve commercial sales of biotech crops. In the past couple of years, China has been accused of dragging its feet on the approval of new U.S. GE strains. Corn prices in this country fell when China rejected more than 1 million tonnes of U.S. corn earlier this decade because the cargoes included an unapproved GMO variety from Syngenta. In a class-action lawsuit currently under way in Kansas City, farmers have blamed Syngenta for selling the seed, approved by U.S. regulators, before it was cleared by China for import.

Agriculture Secretary Sonny Perdue, who chairs the task force, said rural America lags urban areas in recovering from the 2008–2009 recession. One in four rural children lives in poverty, the highest rate in three decades, he said. “The president understands that prosperity and recovery have not been uniform. … We’ve got technology issues, we’ve got infrastructure issues, we’ve got health issues.”
One in seven Americans lives in rural areas. “We understand that rural development is not urbanization,” said White House agriculture adviser Ray Starling. The task force, he said, will focus on “taking what we have in rural areas and making it more prosperous.”

Perdue announced that the task force will have four working groups and that its members will represent 22 federal departments and agencies. He gave the task force an October 22 deadline for a report. “It will be an operational plan,” he said, with proposals that can be put to work. “The president is very expectant of action.”

The task force plan “can be informative and consultative with going forward in the [2018] farm bill,” Perdue told reporters afterward. Energy Secretary Rick Perry, Housing Secretary Ben Carson, White House Budget Director Mick Mulvaney, and Lighthizer sat with Perdue at the head table for the task force’s first meeting, which took place in the glass-roofed “patio” of the USDA administration building. Deregulation was a common theme in their remarks. BY CHUCK ABBOTT.

PERDUE NAMES LEADERSHIP IN ACTING ROLES AS USDA REORGANIZATION TAKES SHAPE.

(Washington, DC, June 16, 2017) – Secretary of Agriculture Sonny Perdue today named three individuals who will take on leadership roles as the U.S. Department of Agriculture (USDA) continues the reorganization announced on May 11, 2017.  In accordance with a directive in the 2014 Farm Bill, USDA created a new Under Secretary of Trade and Foreign Agricultural Affairs as part of a realignment of several mission areas.  The reorganization also included a reconstituted mission area reporting to a newly-named Under Secretary for Farm Production and Conservation.  The U.S. Forest Service, given its size and importance, will be the only agency to report to the Under Secretary for National Resources and Environment.  For these three mission areas, Perdue has named Acting Deputy Under Secretaries, who will serve in their roles until the Senate confirms permanent presidentially-nominated appointees.

“Today we continue our progress of making USDA the most effective, the most efficient, and the best managed department in the U.S. government,” Perdue said.  “These three career USDA employees have already shown the leadership and expertise needed to deliver the highest quality service to our customers – the people of American agriculture.  I welcome them to the leadership team and I thank them for their dedication to agriculture.”

Trade and Foreign Agricultural Affairs

Jason Hafemeister, until now serving as the Acting Deputy Under Secretary for Farm and Foreign Agricultural Services, will now be Acting Deputy Under Secretary for Trade and Foreign Agricultural Affairs.  He has been involved in agricultural farm and trade policy for over 25 years, including almost 20 at USDA and with the Office of the U.S. Trade Representative.  Hafemeister’s responsibilities have included serving as the lead U.S. negotiator on agriculture in the World Trade Organization’s (WTO) Doha Round negotiations, the Central America Free Trade Agreement, and China’s accession to the WTO.  He was instrumental in finalizing the recent agreement to allow the importing of U.S. beef to China.  Hafemeister received a bachelor’s degree from the University of California at Berkeley, a master’s degree from the University of California at San Diego, and a law degree from Georgetown University.

Agricultural trade is critical for the U.S. farm sector and the American economy as a whole.  U.S. agricultural and food exports account for 20 percent of the value of production, and every dollar of these exports creates another $1.27 in business activity.  Additionally, every $1 billion in U.S. agricultural exports supports approximately 8,000 American jobs across the entire American economy.  As the global marketplace becomes even more competitive every day, the United States must position itself in the best way possible to retain its standing as a world leader.

Farm Production and Conservation

Dr. Robert Johansson will serve as the Acting Deputy Under Secretary for Farm Production and Conservation, while also concurrently remaining USDA’s Chief Economist, a position he has held since July 2015.  Since 2001, he has worked as an economist at USDA, in the Office of Information and Regulatory Affairs at the Office of Management and Budget, and at the Congressional Budget Office.  In 2011 he was appointed senior economist for energy, environment, and agriculture on the President’s Council of Economic Advisers where he also participated in the White House Rural Council and the President’s Council on Jobs and Competitiveness. Dr. Johansson served as Deputy Chief Economist at the USDA from 2012 to 2014.  He received B.A. in economics from Northwestern University and then served with the U.S. Peace Corps as an extension agent in several African countries from 1990 to 1995.  After returning to his home State of Minnesota, he entered the graduate program in Agricultural Economics at the University of Minnesota and received his M.S. in 1997 and Ph.D. in 2000. His research has spanned a wide range of issues, including biofuels policy, water quality and quantity policies, regulatory economics, food security, and regional modeling of agricultural systems.

The Farm Production and Conservation mission area will focus on domestic agricultural issues.  Locating the Farm Service Agency, the Risk Management Agency, and the Natural Resources Conservation Service under this domestically-oriented under secretary will provide a simplified one-stop shop for USDA’s primary customers, the men and women farming, ranching, and foresting across America.

Natural Resources and Environment

Dan Jiron will fill the role of Acting Deputy Under Secretary for Natural Resources and Environment.  With more than 29 years of public service and natural resources management, Jiron was appointed Associate Chief of the Forest Service in July 2016.  Prior to this appointment, Jiron served in many leadership positions, including Regional Forester of the Rocky Mountain Region; Deputy Regional Forester in the Pacific Southwest Region; Forest Supervisor of the Santa Fe National Forest; District Ranger on the Salt Lake Ranger District of the Uinta-Wasatch-Cache National Forest; District Ranger on the South Park Ranger District of the Pike and San Isabel National Forest, Comanche, and Cimarron National Grasslands; Director of Communications and Legislative Affairs of the Intermountain Region, National Press Officer in Washington, D.C.; and aide to United States Senator Ben Nighthorse Campbell of Colorado.  Jiron earned a bachelor’s degree from Colorado State University and a Master’s degree from Regis University of Denver.
Under the reorganization plan, the Under Secretary for Natural Resources and Environment will retain supervision of the U.S. Forest Service.

Rural Development

As previously announced, Perdue has named Anne Hazlett to lead the Rural Development agencies at the U.S. Department of Agriculture (USDA).  Hazlett, whose title will be Assistant to the Secretary for Rural Development, will oversee the Rural Utilities Service, the Rural Business Service, and the Rural Housing Service.  She most recently served as Chief Counsel to the Majority on the U.S. Senate Committee on Agriculture, Nutrition, and Forestry.

Hazlett’s position represents an elevation of Rural Development, which had previously been in the portfolio of an under secretary, who in turn reported to the deputy secretary of agriculture.  Instead, Rural Development will now report directly to the Secretary of Agriculture. BY SUCCESSFUL FARMING STAFF.

SOYROY: MY DADS FARM REMAINS SUSTAINABLE.

My parents bought the farm, where I now live, in the late 1940s.

Having just survived the Great Depression and the greatest drought in 100 years, my dad was understandably conservative in many ways.

The farm he bought was quite hilly with many erosion problems that made farming difficult. However, my dad was anxious to make improvements as soon as the finances would allow. It was not long before government programs started, so it was possible for my dad and others in his situation to get cost-sharing on erosive land to implement needed improvements.

I jokingly tell people that I farm in a place where 7% slope is considered flat. That is not too far from the truth.

Dad was aggressive in getting his conservation practices under way. He was the first in the area to install terraces on the hilly fields. He did the work himself with a borrowed disk plow behind his Oliver 70.

It was not many years until neighboring farmers saw the advantage of terraces drained by grass waterways. Ditches disappeared. Runoff from fields was virtually reduced to an acceptable level. The improvements worked notwithstanding the cost of installation and upkeep. Distances between terraces were not enough to be an issue when farming the odd-shape fields.

The first fields were planted using two-row equipment. That machinery was gradually replaced with four-row planters and cultivators.

Finally, a switch was made to six-row, 30-inch production equipment. This worked well for a long time, because there was just enough room between terraces to plant two rounds or 12 rows between the shortest terrace channels.

Some time later, there was a major switch to no-till, which also changed the row-spacing issue. For a long time, most farmers were content with the old planting patterns.

This changed in the decade 2000. Planting equipment, several times as large, made it possible to cover considerably more land in the same amount of time.

By this time, tillage equipment had almost disappeared from the scene in many locales. However, the environment in the fields did not necessarily mature along with the other crop inputs and production machinery. The larger machinery made it possible to cover up the erosion damage caused by the farmers who were planting and spraying erodible land. Modern application equipment made it possible to replace nutrients lost to erosion.

Sadly, many of the recent innovations have been neutralized by planting too much too fast. At some point, the farming business is going to pay for being in too much of a hurry.

But for now, when a quick thunderstorm went through Cass County, Nebraksa, on Thursday and dropped 1.3 inches of rain, the value of conservation structures and practices was again illustrated in a big way. BY ROY SMITH.

RECENT CATTLE MARKET MOVES SUPPORT TAKING ACTION, ANALYST SAYS.

The cattle market has been entrenched in an uptrend since last October, accelerating upward in recent months.

Cash prices remain active and demand strong. The U.S. dollar is trending lower, and there is renewed optimism that export activity will stay strong. This is due, in part, to exports to China (something that has not occurred since 2003). At the same time, recent technical activity suggests futures may have topped.

Chart activity shows upward price acceleration and a key reversal. A bearish key reversal is when the market trades to a new high, exceeds the previous day’s trading range, and finishes below the previous day’s close. In other words, a wider trading range and a negative finish.

August live cattle futures recently posted a very prominent bearish key reversal. In addition, a double-top is also in place. A double-top is when a market establishes a contract high, corrects downward, rallies back to the previous high, and then fails.

August futures peaked at $127.50 on May 4, dropped to under $117.00 by late May, only to rally back to $127.65 on June 6, the day prices peaked and posted the bearish key reversal. Since then, August futures has dropped and is trading under $118.00.

It may be difficult to execute strategy with current future prices well below the current cash market. Current cash prices may be as much as $15.00 or $20.00 higher than deferred futures.

Keep in mind that futures contracts reflect future price expectations, and not today’s cash market. Price charts can often aid in the decision to move forward with strategy. The recent signals are really nothing more than the reflection of market participants anticipating future price expectations. Heed the chart warnings.

Two strategies come to mind: Sell futures and purchase a call option. Or, purchase a put, which provides a price-flooring mechanism and leaves the upside open for price appreciation. These two strategies accomplish the same basic task of shifting risk, should prices move lower.

While no strategy is perfect, doing nothing works extremely well as long as prices trend higher. However, when prices trend lower, doing nothing can be an extreme strategy that allows for the absolute worst outcome.

The key is a balanced approach, shifting risk with the right tools at the right time. Recent technical signals in the cattle market suggest it is time to take action.
 
Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results.
 
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson. Stewart-Peterson refers to Stewart-Peterson Group Inc. and Stewart-Peterson Inc. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with both companies. Accordingly this email is sent on behalf of the company or companies providing the services discussed in the email. BY BRYAN DOHERTY.

EYE ON AGRICULTURE: FRESH FOOD FOR ALL AT STICK AND STONE FARM.

For farmers Chaw Chang and his wife and business partner, Lucy Garrison, not only does the term describe the Full Plate Farm Collective they’re a key part of, it’s also an accurate snapshot of their daily lives. With four children ranging in age from infancy to ten years old, the two are continuously working, both on the agricultural and the home front.

Stick and Stone did not start out looking the way it does today, Chang recalled. When he and Garrison purchased the land on Route 96, between Jacksonville and Ithaca, it was brushland that hadn’t been farmed in years. Today, certified organic vegetables like green beans, winter squash (including butternut, acorn, spaghetti and delicata), beets, carrots and cooking greens (such as kale and collards), along with a selection of Asian vegetables and greens, are raised on the Ulysses farm and acreage in the neighboring community of Enfield.

“We grow a lot of things that people haven’t tried before or might not have even heard of,” Chang said. “We’re a conduit for people to feel like they have a connection with farming.”

Chang asserted that Stick and Stone, with the various ways they market their crops, is one of the most diversified farms in the area. For example, rather than operating as an individual CSA (Community Supported Agriculture), the farm is a key part of Full Plate Farm Collective, a multi-farm collaboration. This works well for the farms involved because it lets them each focus on a specific set of crops, rather than needing to grow everything themselves, and share other resources like equipment.

Additionally, having a CSA allows Chang and Garrison to acquire more capital in the beginning of the growing season. Having this cash flow has allowed them to take more risks and increase the scale of their farming.

“I’m not sure I could, or would have, gotten a loan for that amount of money from a bank,” he elaborated.

Stick and Stone sells their produce wholesale too. Chang was one of the first farmers to reach out to local restaurants, encouraging them to include fresh, local vegetables on their menus. Since then, Stick and Stone has expanded their wholesale market to include Wegmans and GreenStar Natural Foods Market.

Their third vegetable venue is the Ithaca Farmers Market, during both summer and winter.
“The Farmer’s Market gives us another outlet for our products,” Chang said. “Having multiple outlets ensures that we will sell all the vegetables we grow.”

Because vegetables are highly perishable, they have to be sold quickly for a farmer to make money. Unfortunately, he observed, lots of vegetable farmers go out of business because they grow more than they can sell.

Keeping their main focus on the Tompkins County area was a mission-driven decision for the couple.
“We like having the CSA so we can feed the people in our community directly,” Chang noted.
Chang and Garrison also try to keep the emphasis on face-to-face, or phone, interaction with their consumers and buyers. They purposely chose not to have an individual website for the farm (though Full Plate Farm Collective has one), are minimally involved with Facebook, and don’t feel a need to increase their presence on social media.

“Maintaining and paying for these doesn’t interest us,” Chang said. “We want to engage with the community in a real, personable way rather than a virtual one.”

In another value-driven decision, Full Plate Farm Collective has partnered with Cornell Cooperative Extension in a non-profit program called Healthy Food for All. The program enables WIC and Food Stamp-eligible households to purchase a farm share at half the regular cost and receive fresh, quality vegetables each week. HFFA participants can take advantage of free cooking classes to gain skills and learn how to prepare the variety of produce in their share.

Chang is a strong advocate for land stewardship, serving on the Tompkins County Farm Bureau and the Agriculture Committee for the Town of Ulysses. The town is updating their zoning laws and he wants to ensure that the new laws are ag-friendly and that local farmers are represented fairly.

Another issue that is on his mind is climate change, which has led to more extreme weather in recent years and has had a significant impact on farming as a whole. Climate change has already resulted in huge, unpredictable losses for farmers, he said.

“We’ve had two 100-year floods and one of the worst droughts on record,” Chang said. “What should have happened in 500 years, has happened in three to four years.”

Rain is the biggest problem, he contended, both in terms of crops and the surrounding environment. More rain requires farmers to do more cover cropping and use more drain tiles in their fields. This converts what would have been ground water into surface water, resulting in more water in the surrounding ditches which then overflow and cause damage to the roads. Other problems include more leaching of nutrients from the soil and increased insect and disease pressures on the crops.

Many people seem to think life is easy for today’s farmers, Chang observed. However, this simply isn’t true. He and Garrison have to deal with all sorts of modern-day work problems, including taxes, regulations and workers’ compensation. A farmer needs to be well-versed in all aspects of business, technology, science and human resource management, along with having a complex understanding of plants and animals.

“We’re not specialized like other professions,” he said. “We need a broad knowledge base. Most people don’t have this complexity of knowledge.”

Chang has clearly put a lot of thought into why farming is such a good fit for him personally.
“I’m production, rather than service-oriented,” he said. “I’m independent. I like to feel like I’m being productive every minute I’m working.” BY SUE HENNINGER.

TRUMP CONSIDERS ALLOWING IN ARGENTINE BIODIESEL, BEEF.

PORTO ALEGRE, Brazil -- President Trump has conditioned the entrance of Argentinian biodiesel and beef into the American market.

In May, the U.S. officially announced that it suspected antidumping of Argentinian biodiesel, and it would suspend those biodiesel imports until it ends an investigation.

Separately, Argentina’s beef had a prior allowance for imports set by the Obama administration, but it is now under revision by Trump’s White House.

In the meantime, as the Argentinian authorities pressure to get the biodiesel barrier lifted, U.S. officials have come up with a trade compromise.

The U.S. is willing to reopen its borders to Argentina’s biodiesel if that South American country approved seed developed by U.S. companies on a quicker time frame.

The deals that could theoretically hurt domestic sales for U.S. meat producers and impact the U.S. biodiesel market are seen as two very differrent cases, according to Don Roose, president of US Commodities Inc. (West Des Moines, Iowa).

The trade practice is seen as unfair on biodiesel imports, as the U.S. program was to be a program to use oil products – not end products – to meet the standards. Thus, the imports of U.S. vegoil will probably need to increase to satisfy the biodiesel mandate. The beef imports from Argentina are a completely different situation. For now, the U.S. believes the trade practices are fair, explains Roose in an email to Agriculture.com.

The conditions, confirmed by U.S. Trade Secretary Wilbur Ross, are the faster approvals of seed and changing the criteria for the releases. The result of those negotiations would be known after a meeting between Ross and Argentina Production Minister Francisco Cabrera.

The government of Argentina already sent a bill to Congress last year with a new seed law that would get faster releases and would enforce payments of royalties. Currently, Argentinian farmers are not used to paying royalties when they do personal use of the seeds they grew. The new law would impose fines.

Regarding the biodiesel dispute, Cargill and Louis Dreyfus, the same companies that have biofuel plants in Argentina and the U.S., have issued arguments in favor of the imports, testifying in the case at the U.S. Department of Commerce.

For both companies, the American biodiesel market grows because of the official mandate of incorporating biofuels and the imports are in line to follow U.S. legislation. They do not see any “unfair competition.”

Nearly 90% of Argentina's biodiesel exports go to the U.S. with a value of $ 1.2 billion in 2016. The sales had grown 150% in that year compared with 2015.
“The biodiesel industry in Argentina would be seriously hurt if the U.S. decides to cut biodiesel imports,” analyzed Pablo Adreani, a market expert from AgriPac, a consultancy in the city of Córdoba, for Agriculture.com. Even with the investigation, the imports continued this year with a volume of 504,000 metric tons. For Adreani, the imports would continue until a decision is made and would reach 608,840 tons by the end of June.

Argentinian beef was banned in the U.S. in 2001 because of a mad cow disease outbreak of that time.The average volume exported annually was 35,000 tons with a quota of 20,000 tons duty-free. The beef was then used for hamburgers, but experts now see a possibility of exporting higher value and niche products, like kosher. BY LUIS VIEIRA.

THE U.S DOLLAR IS LOWER, HELPING AG COMMODITIES PUSH HIGHER.

DES MOINES, Iowa -- The CME Group’s farm futures finish off the daily highs, but still stronger, as extreme heat forecasts heat up risk premium talk.

At the close, the July corn futures finished 4 1/4¢ higher at $3.77 1/4, while December futures closed 3 3/4¢ higher at $3.95 3/4.

July soybean futures settled 1 1/2¢ higher at $9.23, November soybean futures closed 3 3/4¢ higher at $9.31.

July wheat futures finished 6 1/4¢ higher at $4.35 3/4.

July soy meal futures finished $0.50 per short ton higher at $301.10. July soy oil futures closed $0.08 higher at 31.39¢ per pound.

In the outside markets, the Brent crude oil market is $0.74 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 24 points lower.

Michael Rusch, Sales Director- Ag/Commercial | Stewart-Peterson, says that the corn futures are staging a rally, sending contracts through their range highs that served as a resistance barrier since early March.

"Dec corn is making the biggest technical move, up 6 cents to 3.98, above its double top at 3.95-3/4. Jul corn is up 6-3/4 cents to 3.79-3/4, eclipsing that contract’s range high of 3.79-1/2,” Rusch says.
Rusch adds, "Dryness in ND and SD supporting spring wheat, funds heavily short, dollar index making new lows, above normal temps in the forecast for the next 2 weeks. Our advisors were a bit surprised expecting corn to be lower due to better than expected crop conditions yesterday.Double digit gains in wheat and soybeans are also noted."

“We believe that this is a sign of long-awaited short-covering by the funds as weather forecasts begin to warrant weather premium across the grain and oilseed complex,” Rusch says.

Crop progress is adequate, but widely variable following a delayed planting program in the eastern Corn Belt, and now drying conditions in the central and northern Corn Belt, Rusch says.

Soybean futures jumped higher in early trade, as contracts attempt to climb back to their previous trading ranges following a price fallout to end the month of May, Rusch says.

Jul beans peaked at 9.34-1/4 on gains of 9-3/4 cents; Nov got to 9.39-3/4 on gains of 11-3/4 cents before stalling.

“High heat forecast for the Dakotas and depleted top soil moisture being reported in NE and IA where emergence in some counties is already questionable, is supporting today’s market strength. The revival precedes Friday’s USDA monthly Supply/Demand reports,” Rusch says.

Monday’s Grain Market Review

On Monday, the CME Group’s farm markets close up slightly.
At the close, the July corn futures settled ¼¢ higher at $3.73, and December futures finished 1¢ higher at $3.92.

July soybean futures finished ¾¢ higher at $9.22; soybean futures settled 2½¢ higher at $9.28.
July wheat futures finished unchanged at $4.29.
July soy meal futures closed $1.30 per short ton lower at $300.60. July soy oil futures closed 0.30¢ higher at 31.31¢ per pound.

In the outside markets, the Brent crude oil market is 36¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 7 points lower.
Pete Meyer, PIRA Energy grain analyst, says the markets seem to be struggling for new information at the moment.

“Additionally, the heavy supplies from South America continue to limit any upside, despite concerns over eastern Belt wetness and dryness in the Plains,” Meyer says.

On Monday, private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 60,000 metric tons is for delivery during the 2016/2017 marketing year, and 60,000 metric tons is for delivery during the 2017/2018 marketing year.

The marketing year for soybeans began September 1. BY  MIKE MCGINNIS.

FARMLAND SALES HARD TO FIND AS GROWERS HOLD TIGHT, KEEPING LAND VALUE FAIRLY STABLE.

Four years ago there wasn’t enough farmland to go around. Growers were looking to expand their holdings, outside investors who’d never set foot in the state of Iowa much less in a cornfield, and people looking to bolster their retirement funds were snapping up land as fast as aging farmers hoping to spend their retirement on a Florida beach could sell it.

It was a perfect storm for both sellers and buyers.

Things are much different today, brokers told Successful Farming. Demand is still strong, but nobody’s selling as land values have declined amid falling crop prices, leading to what dealers are saying is the fewest available farms for sale in a generation. That, in turn, has kept prices afloat despite declining crop futures.

“We don’t have very much for sale,” said Sam Kain, the national sales manager for Farmers National in West Des Moines, Iowa. “I’ve been doing this for 30 years and this is as few as I’ve ever seen. Farmers had a few good years, the conservative ones anyway, were able to put money aside and now there’s no pressure to sell, at least not for the time being. All we’re seeing selling is estates.”

The lack of available land has kept the price of farms up despite corn prices being down by more than half from their peaks in 2012. The average per-acre value of farmland in the U.S. in 2016 was $3,010 an acre, down from only $3,010 an acre the prior year.

In Iowa and Illinois, the biggest producers of both corn and soybeans, the average price of farmland was $7,850 and $7,400, respectively. The value in Iowa fell 1.9% year-over-year while Illinois prices declined 1.3%. Missouri and Wisconsin land values rose while those in Minnesota and Indiana were unchanged.

“The lack of supply is keeping farmland values fairly stable,” said David Klein, the vice president and managing broker of Soy Capital in Bloomington, Illinois.

Land values are holding steady likely because farmers who saw they could get $12,000 an acre for less-than-stellar land in 2012 or 2013 are now only being offered $8,000 to $10,000. While that would’ve been a pretty penny prior to the boom five years ago, it doesn’t carry the same luster it once did.

The good news for farmers looking to purchase more land is that their competitors – investors – aren’t in the market right now because the rate of return on the land isn’t strong like it was in 2012 when corn and soybean prices were high, Klein said.

That means some farms, though many with marginal land, can be had for a decent price. Also popular is land on which wind farms can be built, especially in Iowa, Illinois, and Indiana, said Klein.
“The biggest price decreases have been in the farmland that’s kind of like a fixer-upper house, which can use some cleaning up and has drainage issues or needs conservation work to give it some curb appeal,” he said. “The I-states have a lot of expansion projects going on right now. If you took a flight to central Illinois just north of Decatur, there are wind turbine foundations being built.”

Companies are building wind farms in northwestern Iowa, and more are on the way, Klein said.
Real estate industry professionals said the best bet for growers who want to expand their holdings by purchasing land close to their current farms is getting to know their neighbors in case something comes available. Hiring a broker also doesn’t hurt because they have resources most people don’t.
It’s unlikely, however, that growers will find many good deals in the current environment of strong demand and little availability, said Ernie Goss, an economics professor at Creighton University in Omaha, Nebraska.

Goss said surveys conducted by his department are showing that farmland prices will hold up better than income as commodity futures likely won’t rise much for at least a couple of years unless there’s a significant weather event. Foreclosures haven’t increased to an alarming degree, so those waiting for their neighbors to throw in the towel might have to wait a long time.

It’s likely those who want to buy farms and have a chance to do so know they aren’t getting the best deal in the history of land transactions, but many are willing to spend the money to get what they want as long as the land is close to their current holdings and decent quality.

Demand for land likely will stay strong for a while as long as interest rate are still low and consolidation within the industry continues, Klein said. That means those hoping to expand will have to keep a keen eye out for anything in their area that becomes available since their neighbors are holding tight to their farms.

“Overall, farmland values have remained stable through the first half of the year,” Klein said. “Stabilizing crop prices, limited supply, and low interest rates are contributing to land prices stabilizing, as are areas that have alternate uses rather than just agricultural. The highest quality square tillable farms are selling very well, but there are so few available.” BY TONY DREIBUS.

WITH NAFTA ON THE HORIZON, U.S DEALS WITH CANADA AND MEXICO AG ISSUES.

Agriculture Secretary Sonny Perdue went north and Commerce Secretary Wilbur Ross looked south as the Trump administration focused on North American food and farm trade issues. Based on “quite meaningful” progress, Ross allowed an additional 24 hours to complete a deal on sugar imports from Mexico, while Perdue discussed the future of two-way farm trade with Canadian Agriculture Minister Lawrence Macaulay.

The two North American countries are the heart of U.S. agricultural trade. They account for one third of all U.S. imports and exports of food and ag products, a combined $83.7 billion of the estimated $251.5 billion in U.S. ag trade this fiscal year. While China is the No. 1 market for U.S. farm exports, Canada is the largest U.S. food and ag trade partner, Canadian officials noted in a statement about the Macaulay-Perdue meeting in Toronto.

Food and ag trade with Canada is forecast for a total of $42.7 billion, with the U.S. sending $21 billion to its northern neighbor and importing $21.7 billion of Canadian goods. Mexico-U.S. trade is estimated at $41 billion, some $18.5 billion of it being U.S. goods shipped south and $22.5 billion in Mexican food and ag going to U.S. buyers. Mexico is the second-largest U.S. ag trade partner, followed by the EU and China.

A month ago, Ross threatened to collect antidumping and countervailing duties on sugar from Mexico beginning on June 5 unless the country agreed to limit its shipments. “The two sides have come together in quite meaningful ways, but there remain a few technical details to work out,” said Ross in extending the deadline for agreement to Tuesday. “We are quite optimistic that our two nations are on the precipice of an agreement we can all support, and so have decided that a short extension of the deadline is in everyone’s best interest.”

An agreement would resolve the dispute before negotiations begin later this year, possibly in mid-August, to revamp the 1994 North American Free Trade Agreement. U.S. farm groups hope the talks result in larger sales but fear disruptions in trade with two leading countries.

Mexico is the largest U.S. sugar supplier, estimated by USDA to provide 37% of imports this year. NAFTA called for gradual liberalization in sweetener trade between the countries. In 2014, U.S. growers and processors accused Mexico of dumping sugar at unfairly low prices. The U.S.

government agreed, which led to an agreement to limit shipments in exchange for suspension of the tariffs. The Commerce Department decided last December that the 2014 agreement was not working.
Citing two unnamed sources, Reuters said said the two countries “were working on final details of a deal.”

After meeting his Canadian counterpart, Perdue said the session was “very frank, like family members discussing some things that are not necessarily comfortable. We laid out a great framework to begin renegotiating NAFTA.” U.S. issues included Canada’s dairy support system, which restricts U.S. imports, and a wheat grading system that U.S. farmers say effectively prevents imports by giving them too low a value. “And also certain provincial wine issues, where wines are not displayed out in front where other Canadian wine is,” said Perdue. The recent spat over ultrafiltered milk is not a NAFTA issue, said the secretary, adding, “While we didn’t try to negotiate back and forth, I think it was clearly understood that we consider all options on the table, and we’ll pursue them in the best interests of U.S. producers.”

In a statement, Macaulay said both sides want to strengthen the agricultural trade relationship. “I’m confident that we can reinforce this relationship in a balanced manner, allowing us to boost farmers’ bottom lines and create good, middle-class jobs on both sides of the border,” he said.

On Twitter, Perdue said he had “friendly but frank talk w/Minister @L_MacAulay about U.S. exports to Canada. Foundation for future negotiations w/our friend to the north.” Macaulay tweeted, “Productive discussions today with our key trading partner and friends. @USDA @SecretarySonny, looking forward to working with you.” Perdue replied, “Very productive, I agree. Great discussion and we look forward to more of them.” BY CHUCK ABBOTT.

CORN PRICES WILL FOLLOW SUMMER WEATHER, SAYS ANALYST.

This year's corn planting has been a struggle for many, as wet conditions and cool temperatures have either delayed planting or growth. Stand count could be an issue, and this may have been relayed in this week's Crop Progress report released by the USDA on Tuesday, May 30.

Perhaps what stood out on the report was the corn crop condition numbers, even more so than the planting progress numbers (at 91% for the top 18 producing states versus a 5-year average of 93%). Corn rated poor to very poor: 15% in Illinois, 17% in Indiana, 9% in Wisconsin and 12% in Ohio. Yes, it's early in the season. Yet, with a start like this, one can't help but wonder if trend-line yield expectations of 171 bushels are even possible.

If the last decade has taught us anything, it’s that the resilience of farmers, the technologies involved with growing a crop, and cooperative weather all suggest that yield potential is on the rise, and a large and dependable crop will be at hand. Still, Mother Nature does hold the final say. With a prevent plant date for some northern states of June 1, the combination of less-than-ideal spring conditions and the reality that some acres of corn will be switched to soybeans (or not planted at all) could set the stage for a smaller crop.

As summer weather goes, so will prices. If conditions improve, expect little rally potential in corn. At the same time, be prepared for downside potential, as projected carryout will still be viewed as adequate, despite lower acreage. Last year's low in December corn was 3.15. A drop from current levels to the 3.25 area shouldn't be a shock to anyone this year. However, if weather becomes more of a factor, look for the possibility of corn prices rallying faster and further than most expect.

A quick view of the cattle market over the last 3 months is certainly reflective of how a market can change from a very bearish oversupply concern to not enough inventory and a raging bull market. With record demand, corn futures could rapidly move higher, as managed money (which is significantly short the market) switches from short to long, and traders factor in weather issues. Buy stops will likely get triggered, and those that are holding corn in storage could become reluctant sellers, looking for higher value.

For you, as a corn producer, the key is a balanced approach to handle this. Reward rallies and buy calls to protect sales. Our suggestion is to purchase out-of-the-money call options now. If summer weather becomes an issue and prices rally, be disciplined and make sales at designated points. The call options will retain ownership.

If you have questions or comments contact Top Farmer at 1-800-TOPFARM, ext. 129.
Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results. BY BRYAN DOHERTY.