Electricity Will Shape Future Farms

Advances in electricity technology seldom focus on agriculture. This is to be expected for our industry that contributes less than 1% of GDP. The actual impact on us of these seemingly unrelated developments, however, could be considerable. For example, large farm buildings cry out to be covered in photo-voltaic (PV) cells, which continue to plummet in price. At the same time, sheds offer room for large batteries to store energy. With or without sellback rules, we could be paying our electricity supplier less. Coupled with a serious generator, farms could lead grid exiting. Throw in ever more efficient electrical devices, such as LEDs, and the already flat electrical consumption curve will turn down. Despite the hype, the energy model marketed by Tesla is not all science fiction. Their enormous battery factory exists and is pumping out thousands of lithium-ion units this year. The greatest threat to the success of this venture is cheaper, better batteries from China. As prices for electric vehicles (EV) drop and battery range increases, the entire sun-to-road scheme is not just feasible but dominating. Meanwhile, John Deere rolled out an electric tractor to deserved skepticism. Like trucks, farm equipment poses adoption barriers orders of magnitude greater. Viewed with farmer myopia, the consequences of EVs are easily discounted. Power Players. The impact will be felt not in how farmers use this technology but in the actions of the rest of the global economy. For example, while farmers are unlikely to rush to buy electric vehicles, what happens when cars like the Tesla S make up even 10% of vehicle sales? Few Americans are faced with our distance and power needs. Commuters could be bypassing gas pumps more rapidly than we imagine. Switching from a car with about 10,000 moving parts to one with 150 means far less maintenance and repair. Electric vehicles are also more adaptable to autonomous operation, regardless of that timeline. The automobile infrastructure—including dealers, repair shops, gas stations, etc.—will all be slimmed down. Those of us who still need diesel power and maintenance could see fewer and more expensive sources. On the bright side, low demand for fuel could drop those prices. Which leads to another side-effect of solar-to-road: ethanol demand. How many Bolts would it take to make gasoline consumption curve down? The short answer: a lot. The better question is how fast we could get there. While currently only 0.1% of auto sales, the present growth rate of 60% per year suggests the upcoming decade of the ’20s will resolve forecast disputes. Trump energy policy reversals make it unlikely the U.S. will lead this change. In fact, watch China: It will shape the future of cars, not the U.S. Additionally, hardly a week passes without some government announcing a drop-dead date in internal combustion engine vehicles. Myriad Drivers. This forecast is accelerating on continuing declines in PV, battery and car costs, all of which seem to be bets investors are taking. Nor will domestic politics control this transition. Even the loss of alternative energy subsidies could conceivably be helpful long-term, forcing the industry to economic independence already within reach. Farmers have gone all in on mandated fuel for combustion-based vehicles as one of our largest corn markets. While we battle EPA on the Renewable Fuel Standard, any win could be short-lived if the gasoline market shrinks. In fact, consumers incensed by the ethanol mandate for any reason have a viable alternative to demonstrate their opposition: drive an EV. Politics, not probabilities, will prohibit many farmers from considering these possibilities. But as one car company after another devotes more resources to EVs, the direction of change is clear. And it points away from fossil fuels.

Factors Influencing Global Grain Production

More than ever before, producers live in a global marketplace. South America came off a record soybean crop, which pressured U.S. prices, and Russia picked up the slack in planted wheat acres. Tracking global grain production and weather lets producers see factors that could affect future cash receipts. Here are several to monitor. United States: Keep Eyes Peeled For Jet Stream Activity The U.S. is in a period of limited grain market activity. “Anything that [affects] the grain markets during winter is anything that could inhibit the transportation of grains to other markets,” says Eric Snodgrass, professor of atmospheric science at the University of Illinois. Domestic corn demand is set to increase in 2017/18, boosted by ethanol production and feed use, USDA says. Lower prices are expected to support more corn for feed and residual use. Exports are forecast to fall nearly 20% from 2016/17 due to competition from Brazil and Argentina. The big thing U.S. farmers should be watching this winter is how much recharge the soil gets. “Over winter, unlike the last couple of winters, we’re starting to see more dominant factors that are really going to set up our jet stream,” Snodgrass says. “If we start to see decent pockets of cold air set up in the Bering Sea, that could signal the Corn Belt would have an average or cooler-than-average winter.” South America: Follow the Effects of Dry Planting Conditions Soybeans will be planted first in South America, but the issue as of late October was a planting delay. “They are a little behind last year, but remember last year was a record year,” Snodgrass explains. “Mato Grosso had some trouble along its northern and eastern region getting the rains they need to germinate the soybeans.” The eastern growing region in Brazil had a dry season, which will lower soybean yield potential, he adds. Argentina is expected to increase corn and soybean area, according to USDA. Changes to soybean export taxes could help Argentinian farmers. South America’s farmers are watching a weak La Niña pattern developing, Snodgrass says. “Big La Niñas tend to produce a lot of drought in almost all of the growing regions in South America,” he says. “Don’t forget that even if they take a bit of a hit to their yields, [South America] will still have one of their largest crops on record because they are planting more soybeans, roughly 6,000 new hectares of land every year.” USDA expects Brazil and Argentina will boost exports for 2017/18, thus potentially decreasing the U.S. share of global corn trade. European Union: Monitor How Wheat Acres Shift Global Trade Exports from the EU, Russia and Ukraine are growing, adding competition to global wheat markets, USDA says. It’s now harder for U.S. wheat to export to countries in Africa and the Middle East. The EU has expanded its share of trade and, combined with Russia, has surpassed U.S. wheat export volume. Australia: Track Path Of Old-Crop Supplies Amid Production Drop Grain production in Australia is down substantially from a year ago, USDA says. Yet Australia has large stocks from the previous record crop, which is expected to be exported as the new crop enters the market. The country’s wheat production forecast fell 1 million tons to a level of 21.5 million tons on persistent dry conditions in most of eastern Australia, according to USDA’s World Agricultural Supply and Demand Estimates published in October. This could be Australia’s lowest wheat output since the 2008/09 crop year, according to Howard Tyllas, a commodity broker and member of the Chicago Board of Trade. China: Chart Soybean Acreage Growth Yet Steady Import Demand China is the world’s second-largest producer of corn, and it is increasing its soybean footprint. In 2017/18, China’s corn area declined and soybean area increased as farmers reacted to local prices, USDA says. But growing soybean production in China is not likely to affect imports because domestically produced soybeans are mainly used to produce soy-based foods such as tofu, while imported soybeans are crushed for animal feed. “Their primary growing regions are north and west of Beijing,” Snodgrass explains. “I pay attention to their weather about the same time I watch the U.S. for trouble.” The latitude of Beijing is roughly the same as that of Illinois, so weather conditions at crucial times in the Corn Belt are also essential for Chinese producers. Although it was hot and dry in China this year, Snodgrass says, U.S. producers didn’t see a major move in grain prices because China tapped into a lot of old grain in storage. The country remains the top global producer of pork and, according to USDA, holds over half of the world’s pork supply. Growing demand for soybean meal to feed hogs and other livestock continues to positivelyaffect the global soybean trade and creates opportunities for U.S. producers and exporters. Russia: Watch How Prices Respond To Booming Wheat Supplies The country produced a robust wheat crop in 2017/18, according to USDA. “They didn’t have any major heat or drought stress,” Snodgrass says. “Their wheat crop came in fantastic. Russia picked up the slack for the rest of the world” this year, and consequently, “markets never really made a recovery in terms of price.” Although it’s too soon to know what will happen during the next growing season, Snodgrass says, the development of drought in Russia would be something for the wheat market to watch.

Forage: Create the Future

The well-known saying is something along the lines of “You never know what the future holds.” We all know what that means. It is saying that you don't know what will happen tomorrow, often encouraging us to not worry about what will happen because we can't control it.  And in some ways, the saying is correct. Certain things are out of my control, so I shouldn't spend a lot of time fretting or worrying about things I can't control. Let's just see what happens and we will figure out what to do when the time gets here. When it comes to our forage program, we don't always have to wait to see what is going to happen, however. In fact, it is best to have exactly the opposite attitude. Think about what you want out of your forage program in the future, then put practices in place that will get you there. We can have a huge influence on what occurs in the future based on things we can do today. Here are a couple of examples of choices you may make over the next few months that can dramatically affect your forage future. Which forage species you use. There may not be a more important choice in your operation than the species of forage crops you use. Using red and white clover in tall fescue will dramatically affect your fertilizer needs and your animal production. Choosing a warm-season forage to supplement tall fescue will impact your grazing management and possibly how long your tall fescue stands survive. Scouting fields for weeds. A perfect of example of doing something now to impact future production is weed control. If you don't scout fields now for weeds, then you may not realize you have a weed issue until it is too late to spray and the fields are blooming with weeds. A few minutes walking over your fields can help you determine if a timely application of herbicides now can improve your forage program in several months. Forage testing your hay. Everyone knows that all hay is not equal in nutrient content. Early cut has is better than late cut hay. But without taking a sample of your hay and testing it for nutrient content, there is no way to know if you are meeting the nutrient needs of your animals during the winter. You shouldn't wait until the last minute to get a forage test run. Do it now so that you can plan your winter feeding strategy. There are plenty of things that happen on the farm that can't be predicted. The name of the game is being flexible and adaptable. I guess that is one of the things that makes agriculture such an interesting field. But if you have the opportunity to change the future for the better, why not go ahead and do that. A little work now can make things much easier in the future.

Does Residue Grazing Affect Later Crop Yields?

Stalk grazing appears to have no negative effect on subsequent corn or soybean yields. Grazing on harvested corn fields provides a fall and winter management option for cattle owners and an income opportunity for landowners. Baling corn residue also provides an option for farmers to sell bales for feed or bedding.  Either process does, however, remove nutrients and organic material from a field, while grazing also recycles some nutrients and organic material in manure. Grazing or baling practices could affect subsequent crop-management decisions, and thus influence equitable lease rates for stalk grazing or bale prices. University of Nebraska researchers recently conducted a two-year study to evaluate the effects of grazing on subsequent yields and nutrient removal from baling at five locations in Nebraska. Their report, titled "Effect of Corn residue Grazing or Baling on Subsequent Crop Yield and Nutrient Removal," is published in the 2017 Nebraska Research Report. The researchers compared three treatments on each site:
  • Control fields with no grazing or baling
  • Grazing residue, with a target of removing 50% of husk and leaf components, with stocking rates determined using the University's Corn Stalk Grazing Calculator.
  • Baling residue following harvest, with bales sampled and analyzed for nutrient content.
Corn and soybean yields varied widely between sites, based on weather, soil types and management systems, the researchers note. Yields between treatments at each site however, did not differ significantly. The researchers did find a difference in residue cover following each treatment, with control fields averaging 88.7% cover, grazed fields averaging 77.5% and baled fields averaging 45.8% cover. They note that baled fields in this test had a slight numeric yield advantage over control fields. They speculate that baling might have resulted in better nitrogen availability in the short term, and possibly allowed the soil surface to warm up more quickly in the spring. The amount of nutrients removed by baling residue varied between sites, but averaged 42 pounds of nitrogen per acre, 60 pounds of calcium expressed as CaCO3 equivalent and 4.3 pounds of phosphorus (P2O3). Potassium (K2O) removal varied widely, from 22 to 285 pounds per acre. The researchers conclude that grazing or baling corn residue provides a feed resource without negatively affecting subsequent corn or soybean yields. Baling does, however, remove nutrients, and the amount varies widely. Farmers should weigh and sample bales to create an estimate of nutrient removal and fertilizer requirements in the long term.  

The Touchy Issue of Pesticide Drift

It’s been 20 years since the RoundUp Ready soybean revolutionized crop production, providing farmers with a powerful tool to control yield-robbing weeds and usher in widespread adoption of conservation tillage methods. However, nature has caught up with the herbicide-resistant technology. Glyphosate-resistant weeds now pose a major challenge for producers, especially in the Southeast. Dicamba has been heralded as the solution to add to farmer’s repertoire to combat RoundUp resistance. Studies have demonstrated dicamba is effective used in conjunction with RoundUp, killing glyphosate-resistant broadleaf weeds. However, dicamba’s relatively high volatility has proven challenging since dicamba-resistant soybeans hit the marketplace. The extent of the dicamba drift incidents caught regulators, pesticide companies and producers off guard. Now, they are all scrambling to ensure the same incidents don’t hamper the 2018 growing season. While label changes and application limits will hopefully reduce future dicamba drift incidents, the damage caused in 2017 cannot be ignored. Many operators now seek options to compensate their damages. Fortunately, farmers have options to combat pesticide drift and receive compensation for their damages. Most of these remedies are available through state law, as drift is considered a local matter. As is the case with state laws, these can vary substantially from jurisdiction to jurisdiction. If you are a victim of pesticide drift and desire to receive compensation for your damages, or prevent future drifts, hiring a lawyer can be helpful in providing an assessment of your legal options, such as trespass or negligence claims. Some worthwhile things to consider include: Crop insurance. The federal crop insurance program does not insure losses attributed to chemical damage, such as pesticide drift. EPA reporting. EPA is the federal agency responsible for regulating pesticides. Injured parties can report pesticide misuse incidents via phone. This will not result in direct compensation for the producer, but it could lead to enforcement and penalties that deter future violations. State reporting. State pesticide regulatory agencies play a primary role in enforcing against unlawful pesticide drift. Calls to state agencies can prompt investigations that result in enforcement against violating applicators, including fines and injunctions. The enforcement authority of state regulatory agencies varies by state. National Pesticide Information Center (NPIC). A cooperative program operated by EPA and Oregon State University, NPIC serves as a clearinghouse for information on each state’s pesticide regulations and the state agency with pesticide oversight authority. Applicator versus manufacturer liability. Many plaintiffs are tempted to sue manufacturers for damage resulting from pesticide drift. However, the prevailing case law typically assigns liability to the applicator as opposed to the manufacturer. This is because many drift incidents can be traced to misuse of the pesticide and the applicator’s failure to abide by the product’s label. Class actions. Despite this presumption, a number of attorneys have filed lawsuits against dicamba manufacturers on behalf of purported classes of plaintiffs, on the basis the manufacturers’ sales representatives urged farmers and applicators to engage in off-label uses.

TPP-11 Agreement Heightens Concerns about Market Access

The 11 remaining members of the Trans-Pacific Partnership (TPP)* recently announced plans to move forward with a modified trade agreement. U.S. Meat Exporter Federation (USMEF) Economist Erin Borror explains that if the agreement, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is implemented without the United States as a participant, it will create significant tariff rate advantages for competitors of U.S. beef and pork. The U.S. has free trade agreements in place with several CPTPP countries, but the major exceptions are Japan and Vietnam. Borror notes that Australia, Mexico and Chile already have economic partnership agreements with Japan, but the CPTPP would provide even more tariff relief for beef imported from these countries, and would lower tariff rates on Japan's imports of Canadian and New Zealand beef. Japan's beef import safeguards, which are administered on a quarterly basis for countries that do not have trade agreements with Japan, would shift to annual safeguards for beef imports from CPTPP countries, making them less likely to be triggered. Under Japan's frozen beef safeguard, the tariff rate on U.S., Canadian and New Zealand beef was recently increased from 38.5 percent to 50 percent, where it will remain through March 31, 2018. CPTPP would provide tariff relief for Canadian pork, the United States' largest competitor, in Japan's imported chilled pork market. Pork from Mexico and Chile would also make market access beyond their current economic partnership agreements with Japan. Perhaps the largest breakthrough in the CPTPP's pork provisions is Japan's gradual elimination of tariffs on processed pork products  something Japan has never previously included in a trade agreement. Borror adds that while the European Union is not included in CPTPP, the EU and Japan are expected to finalize an economic partnership agreement in the next few months, which includes similar terms. This would leave the United States as the only major pork supplier to Japan without a trade agreement in place. *The full list of CPTPP participants is: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.