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December 2013 Archive for PFA Pioneer Blog

RSS By: Chip Flory, Pro Farmer

This is a private blog for Pioneer.

Pro Farmer's Ag Story of the Year

Dec 20, 2013

Pro Farmer Extra

- From the Editors of Pro Farmer newsletter -

December 20, 2013

Today's perspective is provided by Pro Farmer Sr. Market Analyst and Managing Editor Brian Grete.

Pro Farmer selects 2013 Ag Story of the Year

The Pro Farmer 2013 ag story of the year was fairly obvious. While there were many other key stories that garnered consideration, top billing goes to the ability of the 2013 corn and soybean crops to rebound after record-late plantings. This year’s planting season stretched into June for most and July for some, and left wide swaths of prevented-plant acres across usually highly fertile ground in northern Iowa and southern Minnesota. Still, this year’s growing season produced the largest corn crop and the third largest soybean crop on record. This year proved that big yields and crops can be grown in years with late plantings if weather is favorable the second half of the season and crops are given time to finish. Impacts from this year’s amazing crop recovery will be felt in the year(s) ahead.

The record corn crop this past growing season completely changed the fundamental makeup of the market. That shift in fundamentals will be felt for at least the remainder of the 2013-14 marketing year... and likely for more years to come. Instead of a supply crunch and historically high prices, corn prices are now on the decline as the demand base is rebuilt.

While the 2013 soybean crop didn’t have as dramatic or immediate of an impact on market fundamentals as the corn crop did, there is an influence. Even with the third largest soybean crop on record, carryover is projected to rise just marginally during 2013-14. Without the big soybean crop this year, the soybean market could have found itself without enough supplies to meet growing demand needs, which would have forced prices higher to slow use. Because of the big crop this year, the soybean demand base can continue to expand.

Honorable mentions for story of the year

Proposed RFS cut: On Nov. 15, the Environmental Protection Agency proposed cutting the Renewable Fuel Standard for 2014. The implied reduction to corn-based ethanol would be around 13 billion gallons, down from 14.4 billion gallons in the legislation and the mandate of 13.8 billion gallons this year. While this cuts the floor not the ceiling, fear of reduced corn-for-ethanol demand has kept corn futures under pressure.

Gov’t shutdown: The inability of Congress to reach a deal to keep the government open led to a 16-day shutdown. The shutdown caused USDA to cancel its October Crop Production and Supply & Demand Reports. Because USDA enumerators were unable to collect samples as harvest continued, some of their objective yield data was lost.

Still no farm bill: The process continues... however, the moment of the year was the June defeat of the initial House farm bill — the first time ever a farm bill was rejected on the floor.

MIR 162: China’s rejection of U.S. corn shipments since mid-November due to the presence of MIR 162 (Syngenta’s Agrisure Viptera) is a developing story. While this appears political, it’s a “wet blanket” on corn prices, making it hard for futures to put in a low.

PEDV: The discovery of porcine epidemic diarrhea virus (PEDV) sparked fear of reduced hog numbers. That hasn’t been the case so far, but some impact is expected by early in the new year.

Fed stimulus: Tapering was a buzz word in the investment world throughout 2013, with investors expecting action mid-year. The tapering will begin in January.

‘So God Made A Farmer:’ Uplifting moment of the year was the airing of Dodge’s commercial during the Super Bowl.
 


 



 

Follow Pro Farmer Editor Chip Flory on Twitter: @ChipFlory


To see more of what Pro Farmer has to offer, be sure to visit www.profarmer.com.

Farm bill slipping into 2014

Dec 06, 2013

Pro Farmer Extra

- From the Editors of Pro Farmer newsletter -

December 6, 2013

Pro Farmer Associate Editor Meghan Pedersen was in Washington D.C. last week at the Farm Journal Forum and filed this report:

Farm bill end zone slipping into 2014

Representative Mike Conaway (R-Texas), farm bill conferee and chair of the House Ag Subcommittee on General Farm Commodities and Risk Management, kicked off the 2013 Farm Journal Forum with an optimistic tone. Conaway joked that he scrapped a previous, fiery version of his speech after the four farm bill principal negotiators made progress at a mid-week meeting. Conaway also expects more progress this weekend, but warns there are many issues still being negotiated.

There has been very little partisanship during the farmer safety net negotiations, according to Conaway, though this was less the case when it came to food stamp negotiations. In an AgriTalk interview following the event, Conaway noted that Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) budgeting is still the No. 1 hurdle and that Title I farm program safety net issues remain a contentious area.

Regarding the timeline, Conaway agrees with Conference Chairman Frank Lucas (R-Okla.) who says the farm bill will likely be completed in January due to the mechanics of the process, including scoring, paperwork and getting the bill passed in both the House and the Senate.

Conaway is optimistic the compromises made by the conference committee will be enough to attract the votes needed to pass the farm bill in the House, especially since the leadership in the chamber backs its passage. Conaway says Lucas has been “bending over backward” to accommodate the Senate counterparts. He also says the House has not drawn hard lines on contentious issues such as shallow-loss programs or nutrition spending cuts and remains open to compromise. Also, sources signal agreement has been reached to base safety net payments on base acres rather than planted acres.

In reference to the food stamp cuts, Conaway says focusing so much on the numbers in terms of cuts is like trying to fit a “square peg in a round hole,” especially since the Congressional Budget Office is essentially making an educated guess on projected spending.

Conaway stands firm on the need for a work requirement to gain food stamp eligibility and says the success of food stamps should be gauged by how quickly people get off the support program, rather than the reverse.

Addressing talk that some Democrats are willing to “blow up” the entire farm bill rather than make cuts to food stamps, Conaway says that makes little sense for rural America and production agriculture and therefore would make little political sense for lawmakers who represent those parts of the country.

Regarding crop insurance, Conaway says he personally opposes adjusted gross income (AGI) limits on payments and will continue to fight against them. He says AGI limits to crop insurance eligibility artificially restrain this risk management tool and punishes farmers based on size. In addition, with massive tax reform efforts underway, there is much uncertainty as to what impact this will have on farm income.

Conaway also opposes conservation compliance to be eligible for crop insurance and says the farm bill principals are working to keep crop insurance as strong as possible.

Conaway fielded a number of questions about dairy policy and a possible reversion to the permanent 1949 law. Conaway says he does not support an extension of the 2008 Farm Bill to avert a reversion to permanent law as he feels this threat keeps pressure on lawmakers to complete a farm bill.



 

Follow Pro Farmer Editor Chip Flory on Twitter: @ChipFlory


To see more of what Pro Farmer has to offer, be sure to visit www.profarmer.com.

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