AgDay Daily Recap -December 18, 2014

December 18, 2014 02:57 AM
 

TODAY ON AGDAY
DECEMBER 18, 2014

OPEN HEADLINES:
COMING UP TODAY ON AGDAY THE U-S PREPARES TO OPEN DIPLOMATIC TIES WITH A 50 YEAR FOE. HOW WILL THAT IMPACT AMERICAN AGRICULTURE? PLUS FARMERS GET A CHRISTMAS GIFT FROM CONGRESS. IN AGRIBUSINESS...EXPECTATIONS FOR DAIRY IN 2015
THE STORY THAT IS THERE IS THAT OUR DEMAND HAS REALLY CUT OFF AND IT'S THE EXPORT DEMAND WHICH HAS FALLEN
PLUS, FEEDERS MAY BE FALLING BUT BEEF IS STILL ON THE RISE, AND TUNING UP MEMORIES WITH A PLAYER PIANO. AGDAY-BROUGHT TO YOU BY CHEVY SILVERADO 2014 NORTH AMERICAN TRUCK OF THE YEAR.
CUBA TRADE:
GOOD MORNING I'M CLINTON GRIFFITHS. CALLING IT THE MOST SIGNIFICANT CHANGE IN U-S-CUBA RELATIONS IN A HALF CENTURY, PRESIDENT OBAMA ANNOUNCES PLANS TO RE-ESTABLISH DIPLOMATIC TIES WITH CUBA. COULD IT HAVE AN IMPACT ON AMERICAN AGRICULTURE...AND THAT'S OUR TOP STORY ON AGDAY.
AFBF REAX:
DESPITE THE LONG-STANDING EMBARGO, THE UNITED STATES 'IS' THE BIGGEST SUPPLIERS OF FOOD TO CUBA. THE TRADE SANCTIONS REFORM AND EXPORT ENHANCEMENT ACT OF 2000 - SIGNED BY PRESIDENT CLINTON CREATED EXCEPTIONS. THE ACT PERMITS EXPORTS OF FOOD, MEDICINES AND SOME CHEMICALS INTO CUBA.
US AG PRODUCTS:
RIGHT NOW, US. FARMERS CAN EXPORT TO CUBA, BUT IT'S DONE IN CASH. EXPORTERS MUST DEAL WITH THIRD-PARTY BANKING REQUIREMENTS AND LIMITED CREDIT FINANCING.
TAX EXTENDERS:
THE U-S SENATE STARTED ITS CHRISTMAS VACATION AFTER APPROVING MORE THAN 50 EXPIRED TAX BREAKS. INCLUDED IN THE PACKAGE WAS THE SECTION 179 EXPENSING ALLOWANCE.  FOR SOME FARMERS, THE TAX EXTENDERS BILL IS LIKE A CHRISTMAS GIFT AS THEY'VE BEEN WAITING TO BUY NEW FARM EQUIPMENT TO GET THE TAX BREAK.
THE SECTION 179 PROVISION KEEPS THE EXPENSING LIMITATION AT 500-THOUSAND DOLLARS FOR THIS YEAR. WITHOUT THE EXTENSION IT REVERTS TO 25-THOUSAND. THE LEGISLATION ALSO REINSTATES A 50 PERCENT BONUS DEPRECIATION FOR THE PURCHASE OF NEW CAPITAL ASSETS.
BARGE FUEL TAX:
AS PART OF THE TAX EXTENDERS BILL, THE SENATE ALSO APPROVED A FUEL TAX INCREASE FOR BARGE OPERATORS. THE TAX WILL GO-UP FROM 20-CENTS A GALLON TO 29-CENTS A GALLON ON INLAND WATERWAYS, LIKE THE MISSISSIPPI. ACCORDING TO THE U-S WATERWAYS COUNCIL, THE ADDITIONAL REVENUE GOES TOWARDS THE INLAND WATERWAYS TRUST FUND TO HELP PAY FOR IMPROVEMENTS TO WATERWAYS, SUCH AS AGING LOCKS AND DAMS. THE FEE GOES INTO EFFECT IN APRIL.
PORT LABOR DISPUTE:
MEANWHILE GRIDLOCK AT U-S WEST COAST PORTS HAS FORCED MCDONALD'S TO RATION FRENCH FRIES AT ITS JAPANESE RESTAURANTS. AS WE'VE REPORTED, UNION DOCK WORKERS AND SHIPPERS ALONG THE WEST COAST ARE IN A LABOR DISPUTE. WHILE IT'S NOT A STRIKE, SHIPPERS SAY UNION WORKERS HAVE SLOWED SHIP TRAFFIC. MCDONALD'S IN JAPAN IS NOW LIMITING THE SERVING SIZE OF FRIES TO CHILDREN'S PORTIONS. JAPANESE CONSUME MORE THAN 300,000 TONS OF FRENCH FRIES A YEAR, MOSTLY AT FAST-FOOD RESTAURANTS, AND LARGELY MADE FROM IMPORTS OF FROZEN, PROCESSED POTATOES FROM AMERICA.
TEASE:
IT'S BEEN A GOOD YEAR FOR MANY DAIRY PRODUCERS, BUT IT APPEARS 2015 IS NOT AS PROMISING. WE'LL TAKE A CLOSER LOOK IN TODAY'S ANALYSIS. PLUS, WE HAVE OUR DAILY BRIEFING FROM THE FLOOR OF THE CHICAGO BOARD OF TRADE.
FED REPORT:
IN AGRIBUSINESS TODAY, STOCKS CLIMBING ON WEDNESDAY FOLLOWING COMMENTS FROM THE FEDERAL RESERVE REGARDING INTEREST RATES...THE CENTRAL BANK SAYING IT WOULD BE QUOTE PATIENT IN KEEPING RATES LOW FOR A CONSIDERABLE TIME LONGER.
LAST WEEK, COMMENTS FROM THE FED SEEMED TO INDICATE THE POSSIBLY OF RAISING SHORT TERM RATES IN THE NEAR FUTURE.
CME REPORT:
GRAINS SAW GREEN WEDNESDAY, BUT CATTLE SAW RED. DETAILS NOW FROM THE CME FLOOR...|

ANALYSIS INTRO:
AS WE WRAP-UP THE YEAR, DAIRY PRODUCERS CAN LOOK BACK AT 2014 AS A YEAR TO MAKE-UP FOR LOSSES FROM 2009. BUT 2015 ISN'T AS PROMISING. FARM DIRECTOR AL PELL HAS DETAILS IN ANALYSIS…
ANALYSIS:
OUR GUEST HERE AT THE AGRIBUSINESS DESK IS NAOMI BLOHM FROM STEWART PETERSON NAOMI STEWART PETERSON DOES A LOT WITH THE MILK INDUSTRY AND KIND OF KEEPING TRACK OF WHAT'S GOING ON SO KIND OF GIVE ME A SUMMARY OF WHAT'S HAPPENING RIGHT NOW TO THE MILK INDUSTRY. SURE RIGHT NOW IN THE MILK INDUSTRY THE MILK FUTURES HAVE DROPPED TREMENDOUSLY LOWER THEY'RE DOWN AROUND THE 16 DOLLAR VALUE LEVEL WHERE JUST A COUPLE MONTHS AGO THEY WERE IN THE LOW 20S AND THE STORY THAT IS THERE IS THAT OUR DEMAND HAS REALLY CUT OFF AND IT'S THE EXPORT DEMAND WHICH HAS FALLEN WE'VE AN ABUNDANCE OF SUPPLY BOTH IN MILK AND BOTH IN PRODUCT. RIGHT. BUT OUR EXPORTS HAD BEEN JUST GOING OVER SEAS SO STRONG THAT THAT'S WHAT'S WAS KEEPING OUR MILK PRICE. SO WHY ARE THE EXPORTS GOING DOWN THEN.  WELL WHAT'S HAPPENING IS THAT IN NEW ZEALAND THEY HAVE BEEN ABLE TO INCREASE THEIR SUPPLY AND NOW THEY ARE VERY COMPETITIVE AGAINST US ON THE WORLD WHERE JUST A COUPLE YEARS AGO THEY HAD A DROUGHT WHICH REALLY AFFECTED THEIR HERD SO THAT'S WHY WE WERE THE BIGGEST GAME IN TOWN SO NOW IT'S ALL FLIP FLOPPED AND SO OUR WAY PRICES OUR BUTTER PRICES OUR CHEESE PRICES ARE STILL TO HIGH PRICED AGAINST THE REST OF THE WORLD BECAUSE DOWN IN NEW ZEALAND THEY'RE ABLE TO JUST SELL IT FOR A LOT CHEAPER AND SO THAT'S WHY OUR MILK PRICES HAVE DROPPED BUT FOR EXAMPLE LIKE BUTTER NOT TO LONG AGO WAS THREE DOLLARS A POUND NOW IT'S CLOSER TO TWO DOLLARS A POUND BUT THE REST OF THE WORLD IS AT 1.20 A POUND.  WOW.  SO WE STILL HAVE A LONG WAY TO GO THERE TO CHEDDAR CHEESE PRICES NORMALLY WE SEE THAT MARKET HAVE AN INCREASE IN DEMAND FOR THE HOLIDAYS AND WE'RE NOT SEEING IT THIS YEAR WE CAN'T FIGURE OUT WHY WE AREN'T SEEING IT SO THAT'S KEEPING THE MARKET A LITTLE BIT CONCERNED AS WELL AND IN NOVEMBER THE CHEDDAR CHEESE PRICE HAD A 46 CENT DROP IN A MONTH WHICH IS HISTORICALLY THE LARGEST DROP THAT THAT HAS HAD FOR THAT MONTH SO THAT'S JUST GOING TO KEEP THAT PRESSURE ON THAT MARKET FOR A LITTLE WHILE LONGER YET AND UNFORTUNATELY WE'RE NOT QUITE FINISHED BECAUSE IF YOU LOOK AT SOME LONGER TERM CHARTS OF JUST THE MILK FUTURES IF YOU DO LIKE A 36 OR 38% RETRACEMENT IT'S STILL IS POINT TO CLOSER TO 14.50 FOR MILK FUTURES AND THAT ACTUALLY WOULD KIND OF COINCIDE WITH THE CURRENT PRICES GLOBALLY SO LOOK FOR A LITTLE BIT LOWER PRICES FOR MILK YET FOR A SUCH A TIME LONGER. OKAY THANK YOU VERY MUCH WE'VE BEEN TALKING WITH NAOMI BLOHM HERE ON AGDAY BACK WITH MORE IN A MOMENT.
PROFIT BRIEFING PROMO:
WELL RUSSIA'S IN THE NEWS. WE KNOW HOW'S IMPACTING WHEAT MARKETS. WE'LL LOOK AT HOW IT IMPACTS FERTILIZER THIS FRIDAY IN PROFARMERS PROFIT BRIEFING, ON AGDAY.
TEASE:
UP NEXT, IT'S BEEN A ROUGH WEEK FOR CATTLE PRICES. DETAILS IN OUR BEEF TODAY REPORT...
BTR GROUND BEEF:
MEANWHILE ON THE RETAIL SIDE, GROUND BEEF CLIMBING TO ANOTHER RECORD HIGH...NOW 4-20 PER POUND...A NEW ALL TIME RECORD. THAT NOVEMBER AVERAGE COMING FROM THE BUREAU OF LABOR STATISTICS…RETAIL PRICES FIRST TOPPED FOUR BUCKS BACK IN AUGUST. JUST FIVE YEARS AGO, THE PRICE OF GROUND BEEF WAS ROUGHLY HALF--AT 2-06 PER POUND.
BTR CATTLE THEFT:
MEANWHILE THESE HIGHER CATTLE PRICES, ARE ENTICING MORE THEFT ACROSS THE COUNTRY. IN KANSAS, THE STATE ATTORNEY GENERAL AND THE KANSAS DEPARTMENT OF AG JUST SIGNED A JOINT AGREEMENT TO FIGHT BACK. THE SUNFLOWER STATE FORMING A NEW LIVESTOCK AND BRAND INVESTIGATION UNIT...THE DIVISION WILL RESPOND TO REQUESTS FROM LOCAL LAW ENFORCEMENT FOR HELP SOLVING THEFTS OF IMPROPER SALES. LONG TIME LAW MAN KENDAL LOTHMAN HAS BEEN HIRED TO LEAD THE UNIT.
XMAS IN COUNTRY:
AND SPEAKING OF CHRISTMAS, WE ARE GEARING-UP FOR OUR ANNUAL HOLIDAY SPECIAL - CHRISTMAS IN THE COUNTRY. WE'VE BEEN GATHERING STORIES WHICH HELP REFLECT THE TRUE MEAING OF CHRISTMAS. IT'S A PROGRAM THAT THE ENTIRE FAMILY CAN ENJOY.
BE SURE TO JOIN US CHRISTMAS MORNING FOR CHRISTMAS IN THE COUNTRY RIGHT HERE ON AGDAY.
CLOSE:
THAT'S ALL THE TIME WE HAVE THIS MORNING. WE'RE GLAD YOU TUNED IN.

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