Author - jwasilewski

The Sudden Shift to Winter Weather May be Short-Lived

Harvest came to a halt in some areas seeing snow, while other farmers continued to roll on with corn. The early season October snow followed last week’s snowfall where more than 7 inches of snow fell in the Twin Cities, marking the snowiest October 20th on record for the area. “We'll still see a little bit of that as we head through this week, but I don't think a repeat of last week in most locations,” says Mike Hoffman, U.S. Farm Report meteorologist. The snow is welcome in some areas experiencing drought. That’s as Hoffman says as the weeks progress, dry pockets continue to get drier with new areas of drought starting to pop up. “Looking at the drought monitor, boy are we getting more and more color to this thing,” he says. “The western third of the country just keeps getting drier; we do actually have a system coming for the Southwest this week, but we're also seeing some of these pockets of drier conditions across the upper Midwest, central Mississippi Valley and on into parts of the Northeast.” Hoffman says portions of the central Mississippi Valley will see showers along the moving front this week, with snow hitting the northwestern area. He thinks New Mexico and surrounding areas will also see rain during the middle of the week. “Then, next weekend, we're still looking at kind of a zonal flow, which keeps the real cold air to the north, unlike this past week, and the warm air continues in the southern states under that scenario,” he says. As for Hoffman’s 30-day outlook, he thinks temperatures will warm up from what many areas are experiencing the first part of this week, but the northern tier of states may stay cold.
Read more...

Empirical Foods Building New Kansas Facility

A beef company that fought for years to clear its name in court has broken ground on a state-of-the-art ground beef production facility in Garden City, Kan. The empirical family of companies says the new operation will supplement its existing production at its South Sioux City, Neb., location and represents an investment of $250 million. Formerly Beef Products Inc. (BPI), the company changed its name to empirical in 2019. That was after BPI settled a landmark defamation suit with the Walt Disney Co., owner of ABC News, in June of 2017 for $1.9 billion. The lawsuit was the culmination of a five-year battle by BPI after an ABC News report on ground beef. In 2012, ABC Correspondent Jim Avila reported on BPI’s lean finely textured beef (LFTB) product processed from the trimmings from cattle carcasses. "Seventy percent of the ground beef we buy at the supermarket contains something he calls pink slime," Avila said in a clip from the original reporting – using the name for the substance that former USDA scientist microbiologist Gerald Zirnstein had given it: "pink slime." While ABC News noted in its stories that the addition of “pink slime” was common and not unsafe to eat, the sudden public awareness and the unappetizing name drove BPI to close three plants and cost 700 hundred workers their jobs. Following the ABC News reports, fast-food chains severed ties with the company, and hundreds of thousands of people signed petitions to keep “pink slime" out of school lunches. In a dramatic turnaround, the empirical company – still under the same family ownership – is now thriving again. “The increased demand for empirical’s lean ground beef requires us to significantly increase our processing capacity to meet the growing needs of our customers,” Craig Letch, president of empirical foods, said in a press release. “This presents a tremendous growth opportunity for empirical and we are excited about what it means for the future of our company and the communities where we live and work.” The facility is expected to be operational in 2023 and will increase empirical’s current ground beef capacity by 50%, and will employ 250 workers in the Garden City region. A phase two expansion would double production as demand allows. To ensure a strong pipeline of qualified staff able to operate empirical’s advanced machinery, empirical is committing to an investment of up to $300,000 in a new industrial maintenance program that will be established at Garden City Community College to train the next generation of facility operators and leaders.
Read more...

China’s Increased Appetite Drives Wheat to Multi-Year Highs, What’s Behind the Developing Demand?

Wheat futures rallied this week to levels U.S. farmers haven’t seen in six years. According to Pro Farmer, wheat prices jumped Friday on rumors China was shopping for French and U.S. wheat. The added interest from China continues to help major commodity prices, including soybeans and lean hogs, trend higher. The question many want to know is “why is China buying so much from the U.S.?" One University of Nebraska economist says the answer isn't simple. “Clearly, they've been strong buyers in the market,” says Brad Lubben, policy and extension specialist, University of Nebraska “There was hope back in January with a Phase One agreement that purchases were going to go way up. Well, you don't ever fundamentally know from a commitment to buy, whether it translates into actual purchases.” Lubben says COVID-19 slowed China’s appetite, however, as the economy is rebounding, China is returning to the market in a big way. “The rate they're buying now is certainly supportive of the positive market prices, but whether we can determine exactly what their policy is, we'll know after the fact, and we'll assess how much they really bought.” Lubben says China could be buying to help rebuild its domestic reserves, or possibly to feed the growing hog herd in the country as Chinese pork producers try to recover from ASF. He says no matter what the answer is, it won't known until after the fact. “It's always difficult to know what a closed economy system or a state-run economy system is doing,” he says. “It's difficult to know what's happening in the market until we come out after the fact and find out what really happened.” The increased appetite from China is coming at a time when farmers are seeing impressive harvest pace. What seems to be a quick harvest may typically add pressure to commodity prices, however 2020 is proving that’s not always the case. “This is something that shows how marketing works,” says Cory Walters of the University of Nebraska. “It's very random. You can't predict it. And you never know when those things are going to come.” The marketing plans that seemed to pay off this year are the ones who held on to their crop and waited to sell. Walters says that may not be the case next year. “There are always strategies that win,” adds Walters. “But you never know at the beginning of the year what's going to happen; you still have to take that survival point of view.” While Walters thinks these prices should entice more farmers to sell grain, he says leaving some bushels unpriced could help farmers who fear they will miss out on higher prices. Walter says those unpriced bushels will help farmers sell into potential future rallies.
Read more...

Put the Crop Mix Puzzle Together Before 2021

Are your crop plans rock solid, immoveable and destined to never change? Or do you respond to market and cost-saving opportunities? When it comes to selecting your crop mix, how flexible are you? “Every field needs to have some type of budget so that at the end you can put all of those fields together to get your operation budget,” says Andrew Phillips, Channel seedsman. “That budget allows you to look at your management scheme and know where you can be more aggressive in savings or more aggressive in input purchases.” If you have flexibility, market opportunities, cost savings and agronomic factors could, and probably should, come into play as you make a game plan for next year’s crop on each field. Examine your situation, understand your budget and make decisions on a field-by-field basis. Balance budgets and markets Take a look at your bottom line—and understand how yield and  profit potential varies by crop. In addition, pay attention to what the markets are doing now and if you can lock in any prices even before seed hits the soil. “I’m in a heavier corn-on-corn area and it’s often hard to break that cycle,” says Adam Mayer, Golden Harvest agronomist. “A lot of times the economics don’t allow that, but this year it looks like the soybean crop could provide good opportunities.” Switching crops comes with new considerations. If you’re switching from continuous corn to soybeans, there could be savings in terms of fungicides and insecticides, though herbicides will likely be the same or slightly higher cost than in corn, Mayer explains. However, if either corn or soybean markets or opportunities seem appealing enough that you repeat the same crop two years in a row, you could see new pressures. Plan for potential for increased insect pressures such as corn rootworm and the potential for higher rates of diseases such Sudden Death Syndrome and Brown Stem Rot. Consider the environment In many cases, the weather and fertility situation in which you find yourself can go hand-in-hand with the agronomic factors that weigh on your crop decision. If you’re low on moisture, you might need to look for seed genetics with moisture flexibility. At the same time, you need to consider disease and trait packages. “Try to build a plan that covers every single base from fertility to seed selection,” says Phillips. “For example, in some areas we know we’re headed into a season that we don’t have adequate soil moisture—you can make revisions based on that.” If you have heavy insect pressures in corn, or high weed pressure in soybeans, be sure to consider those factors when making your rotation decisions. Everything – weather, markets, budget, field history and input prices – all work together to inform your annual crop decision.
Read more...

JBS Parent Company Pleads Guilty to U.S. FCPA Violations, to Pay $256 Million Fine

Brazil's J&F Investimentos, parent company of the world's largest meatpacker JBS pleaded guilty to violations of the U.S. Foreign Corruption Practices Act (FCPA) and agreed to pay $256 million in criminal fines, prosecutors said on Monday. The amount of the bribes paid by J&F officials to high-level government officials exceeded $150 million and the company made $178 million in profit, U.S. prosecutors said in open court. Lucio Martins, J&F’s director of compliance, pleaded guilty on behalf of the company in a video conference proceeding before U.S. District Judge Margo Brodie in Brooklyn. Between 2005 and 2017, the company conspired to bribe officials to get the Brazilian government and other entities to arrange financing and equity transactions benefiting J&F, according to a U.S. charging document.
Read more...

U.S. Indicts Six More Chicken Executives Over Alleged Price Fixing

The U.S. government has indicted six more chicken-industry executives over alleged price-fixing, expanding antitrust prosecutions in its probe of the $65 billion poultry sector, according to court documents. In June, the Justice Department indicted Pilgrim's Pride Chief Executive Jayson Penn and three others in its first charges in the criminal probe involving broiler birds, which account for most U.S. chicken meat. Court documents filed on Tuesday show that former Pilgrim's Pride CEO William Lovette has also been indicted. Lovette could not immediately be reached for comment on Wednesday, and a company spokesman did not immediately respond to a request for comment.   Pilgrim's Pride, mostly owned by Brazil-based meatpacker JBS SA, last month said Penn was exiting the company and would be replaced by Chief Financial Officer Fabio Sandri. Penn succeeded Lovette as CEO in 2019. The documents allege that industry executives conspired to fix prices from 2012 through 2019. Also indicted was a sales executive named Timothy Mulrenin, court documents show. Mulrenin's LinkedIn page says he is Perdue Farms' director of national account sales and was formerly Tyson Foods' director of sales. He did not immediately respond to a message sent through LinkedIn. A Perdue spokeswoman had no immediate comment. A Tyson spokesman did not immediately respond to a request for comment. Tyson in June said it was cooperating with the Justice Department's investigation under a program that could protect the company from criminal prosecution. The indictments come after grocers, retailers and consumers filed a lawsuit accusing Pilgrim's Pride, Tyson and other poultry processors of conspiring to inflate prices for broiler chickens. The companies have denied the allegations.
Read more...

Big Supplies Lower Prices

By mid-September, steady improvement in cattle harvest levels over the summer had nearly erased the backlog of cattle created at the onset of the COVID-19 pandemic. With beef packers finding steady profit margins north of $300 per head, cattle prices rallied for seven weeks in July and August. Increasing production, however, brought the eventual pressure on prices. In September, USDA revised its projections for beef production up 23 million pounds compared with August. That would leave total 2020 beef production at just 0.4% lower than 2019 — despite the disruption. Smaller 2020 slaughter numbers have been offset by heavier carcass weights, a lingering effect of the cattle stranded in feed yards. The final week of August saw steer carcass weights average 916 lb., up 32 lb. from the same week in 2019. USDA projects per-capita beef consumption to be 58.2 lb. in 2020, up slightly. But the supply pressure will tend to subside throughout the fall. Seasonally, beef demand improves approaching the holidays, which will support prices in the $110 to $117 per cwt range.
Read more...

Harvest 2020: Some Homeruns, Some Swing and Miss

It’s all hands on deck across the Midwest as farmers race to gather crops before bad weather descends and crop integrity deteriorates. Yield reports and crop conditions are coming in all over the board, with weather, planting dates and other factors coming into play. “It’s definitely a case of the ‘haves’ and ‘have nots,’ and everything in between,” says Ken Ferrie, Farm Journal Field Agronomist. “Many guys are harvesting drought damaged crops where the beans and the corn died prematurity. With corn, moisture tells the story.” Drought areas that died early are coming in at 18% with the rest of the field around 25%, he says. And if there are replant spots in that same field, they’re coming in at 35%. It’s a nightmare for anyone trying to manage corn driers. Corn yields are every bit as variable as moisture content. Ferrie is hearing reports from drought-stricken farmers that range from 120 to 170 bu. per acre and non-moisture stressed fields showing major swings from 120 to 270 across the field for a whole-field average around 200, 210 bu. per acre. “Early soybeans that died have wide swings as well,” Ferries as. “Field averages are as low as 25 bu. up to the mid-50s. Areas that picked up August rains are seeing big dividends there, with bean yields from the 70s to the 80s and corn yields in the 250 to 300 bu. range.” The big corn yields are coming from the fields you’d expect—the ones with picture perfect finishes, green from top to bottom and bright colored ears. Ferrie says this will be a learning year for sure. “We’ll see some interesting differences between bean maturities and planting dates when this is all done,” he says. “This year is a good example of why you don’t put all your eggs in one basket—you never know what Mother Nature will throw at you.” In terms of field conditions, he is still seeing and getting reports of Tar Spot, corn rootworm resistance—even in fields planted with traited products and crown rot. Just because it’s harvest, doesn’t mean you shouldn’t be out scouting and taking notes for next year. Mind harvest loss Two kernels per square foot is one bushel lost, and four soybeans per square foot is a bushel lost.  Check every field and every hybrid or variety as grain size changes and conditions change. “A good target to shoot for is less than 2% loss in corn and less than 3% loss in the beans,” Ferrie says. “Check loss when you swing hard like they are in fields in dry areas. If there’s a 100 bu. swing in the corn, stop and check harvest loss. We might have to readjust strippers and speed in those areas.”
Read more...

Bayer Resolves More Roundup Cases, Judge Keeps Pause On Litigation

Attorneys for Bayer AG and consumers suing the company over allegations its Roundup weed killer caused cancer told a judge on Thursday they are continuing to resolve thousands more cases, improving prospects for its $11 billion deal to end the litigation. The hearing was a contrast to the contentious tone among the parties last month that raised concerns the framework deal might unravel. Ken Feinberg, who is mediating talks, said his "optimism knows no bounds," and that he expected the next set of cases scheduled for trial to soon settle. U.S. District Judge Vince Chhabria in San Francisco kept a stay on litigation until Nov. 2 and asked the parties for a status update at that time. The parties have binding deals to resolve about 45,000 of the 125,000 filed and unfiled claims, according to attorneys involved. Settlements have been reached with each of the lawyers who took cases to trial. Bayer, which acquired Roundup with its purchase of Monsanto for $63 billion in 2018, agreed in June to pay around $11 billion to settle the lawsuits, which have pummeled the company's share price. Bayer's stock closed down 1% on Thursday at 54.41 euros. Shares have slumped from a high of around 73 euros since the June settlement announcement. Chhabria had questioned the fairness of the settlement plan, which proposed using an independent scientific panel to assess whether glyphosate-based weed killers such as Roundup caused cancer. Days later, Bayer said it would revise that part of the proposal. Bayer has said Roundup is safe and important to farmers who use the herbicide in combination with the company's genetically modified seeds. In 2015, the World Health Organization's cancer research arm determined the herbicide to be a "probable carcinogen." U.S. and the European regulators have determined glyphosate to be non-carcinogenic.
Read more...

ASF Numbers in Germany Grow; U.S. Hog Futures Rise

U.S. hog futures rose on Tuesday after more cases of African swine fever (ASF) were discovered in wild boars in Germany. Government officials in Germany warn more cases of ASF in wild boars are to be expected because they move in groups and the virus is easily transmitted. Europe’s largest pork producer reported its first outbreak of ASF in a wild boar on Sept. 9. The total is up to 32 since the first case was discovered. To date, the cases have been located close to the first one in the east German state of Brandenburg. Nine cases were confirmed in Brandenburg on Sept. 23 and three more cases on Sept. 24, Reuters reports. “Prices for weaner piglets in Germany have fallen sharply in past weeks following the discovery of ASF in the country,” AgDay’s Clinton Griffiths reports. Christine McCracken, executive director – animal protein for Rabobank, said in the short run, the announcement gave a little life to the market. “For the U.S., for example, we might pick up some of that,” McCracken said on AgDay TV. “The challenge though, is that there are lot of other European countries, Denmark or Spain, that process a lot of the same product that Germany does.” Other European countries may be a better fit than imports from the Americas. “It doesn't mean we can't see a benefit. It’s still a global meat block. You have to think about when somebody loses, somebody else gains. But it's probably not the huge opportunity that the market initially thought," McCracken explains.
Read more...