Evening Report (VIP) -- January 7, 2014

January 7, 2014 09:32 AM
 

Good yields on early harvested Brazilian beans... Soybean harvest is underway in Brazil's top soybean production state of Mato Grosso and early yield reports are strong, according to Pro Farmer South American consultant Dr. Michael Cordonnier. He reports approximately 1% of the state's soybeans have been harvested and the pace will quicken, though the peak of harvest will be at the end of this month and early February. Dr. Cordonnier says early yields are averaging 47.8 bu. per acre, compared to normal yields for early maturing soybeans in the state of around 40 bu. per acre.

While early yield results are strong and growing conditions are generally favorable, Dr. Cordonnier left his Brazilian bean crop estimate at 90 MMT. The one situation he'll watch closely is a drier forecast for central Brazil, where most of the soybeans are filling pods.

 

Consultant lowers Argentine corn estimate... Dr. Cordonnier says hot and dry conditions across Argentina's grain belt in December and last week likely hurt the corn crop. He's also concerned about some of the late-planted corn in Argentina, as at least 650,000 hectares (1.606 million acres) of corn will be planted this month and that corn will have lower yield potential (if it even gets planted). Therefore, he lowered his Argentine corn peg 1 MMT to 23 MMT.

Meanwhile, Dr. Cordonnier says the condition of the Argentine soybean crop is "somewhat of a mixed bag." Early planted soybeans are starting to flower and much of the crop is rated "good" to "very good." But there were germination problems that resulted in reduced stands and slow early growth with later-planted soybeans. Dr. Cordonnier left his Argentine soybean production estimate unchanged at 56 MMT.

 

CSP signup deadline extended... USDA's Natural Resources Conservation Service (NRCS) extended the deadline for new enrollments in the Conservation Stewardship Program (CSP) today. Producers can now apply for program participation through Feb. 7, 2014 to be eligible for Fiscal Year 2014. For more details and a CSP self-screening check list, click here.

 

Smithfield recommends group housing for pregnant sows... Smithfield Foods and its hog production subsidiary, Murphy-Brown LLC, are recommending all of their contract sow growers join the company in converting their facilities to group housing systems for pregnant sows. The company is asking contract sow growers to convert by 2022, with a sliding scale of incentives to accelerate that timetable. Growers who commit to the plan will receive contract extensions upon completion of the conversion. The company says if growers choose not to participate, their current contracts with Murphy-Brown will remain unchanged, although extensions are less likely.

Murphy-Brown had reportedly transitioned 54% of pregnant sows on its company-owned farms in the U.S. to group housing systems by the end of 2013.

 

Farm bill conferees may meet Thursday; dairy policy & COOL still contentious... Sources signal a farm bill meeting of the entire farm bill conferees is possible Thursday, with the next 36 hours important for deciding final dairy and country-of-origin labeling (COOL) language. Ironically, these issues are the most contentious end-of-process issues, not food stamp funding. Sources continue to say an agreement has been reached to cut $8.8 billion from program funding over 10 years, with some language included dealing with "able-bodied worker requirements."

Having dairy policy as a stumbling block is nothing new in farm policy, as it has been a thorny issue in the past. But during this farm bill, House Speaker John Boehner (R-Ohio) has drawn a line on milk policy. Boehner continues to insist that no supply management language be in the final conference package.

Sources say Sen. Patrick Leahy (D-Vt.), whom has frequently entered last-minute negotiations to strike a compromise in the past, is currently discussing various dairy policy options designed to reach a compromise. One of them would alter the Milk Income Loss Contract (MILC) program to make it an optional program alongside a likely dairy gross margin (revenue protection) program, but changed to attract larger dairy producers.

As for COOL, sources are at a loss as to what will be decided, so this is an issue that could be decided via vote among all conference panel members as soon as Thursday. Get more details.

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