Evening Report (VIP) -- March 18, 2013

March 18, 2013 10:05 AM

MINOR CROP DAMAGE LIKELY IN CENTRAL ARGENTINA... Areas of Buenos Aires province in Argentina were hit with temps that dipped into the mid- to low 30s over the weekend. While this wasn't low enough to produce a killing freeze, some soybeans-- especially later maturing plants -- were nipped by the cold temps. Crop watchers in the region signal the extent of damage won't be fully known for a week to 10 days.

Last Friday, Argentine Ag Minister Norberto Yauhar said the country should produce a soybean crop of 51 MMT to 52 MMT this year, which is higher than most private estimates.



SENS. PRYOR, BLUNT PUSH MEAT INSPECTOR AMENDMENT TO STYMIE SEQUESTER FURLOUGHS... Senate Agriculture Appropriations leaders support a push by Sen. Mark Pryor (D-Ark.) and Roy Blunt (R-MO.) to keep federal meat inspectors on the job and allow slaughterhouses to remain open despite automatic, sequester-related across-the-board cuts to the nation's food safety budget. The provision would shift $55 million from Agriculture Department accounts to pay inspectors' salaries through Oct. 1, when a new fiscal year begins. Money for the inspectors would come from a new grant program for school cafeteria equipment and building maintenance funding.

Importantly, Pryor and Blunt are waiting to see if their amendment to the Senate continuing resolution (HR 933) will get a vote. Pryor, up for reelection in 2014, represents a top poultry producing state that is headquarters for beef, pork and poultry processor Tyson Foods. Blunt's state is among the top 10 beef producing states.

During a recent hearing with the House Agriculture Subcommittee, USDA Undersecretary for Food Safety Elisabeth Hagen said the 11 furlough days, from mid-July to Sept. 20, will be for no more than 1 day a week and no more than 2 days per pay period. Because beef, poultry, and pork businesses can operate only when federal inspectors are present, however, this could mean an industry shutdown on those days. Hagen added that furlough days will be required of all 9,212 employees of the USDA's Food Safety and Inspection Service (FSIS), including 8,136 meat inspectors. FSIS will likely take a $52.8 million sequester cut, or 5% of its budget, she said. All FSIS offices in the U.S. would close on those days.



BEST CHANCE FOR BUDGET-DEFICIT-DEBT AGREEMENT LIKELY TIED TO DEBT LIMIT HIKE... The White House has said it won't negotiate a fiscal deal tied to an increase in the debt ceiling, like it did in 2011. However, lawmakers from both political parties see the coming debt-ceiling debate as the most likely action on a broad fiscal agreement.

"It could be in the context of that conversation and the possibility of a debt-ceiling vote coming later in the year that we'll start talking about the larger issue here," said Sen. Dick Durbin (D-Ill.), the chamber's second-ranking Democrat, about coming budget talks. "I think that's what the president is trying to prepare us for with these visits."

The U.S. has accumulated a total of $16.7 trillion in debt. Federal law allows the government to continue borrowing money to pay its bills through May 18; the Treasury Department can use emergency steps to continue paying bills into July or perhaps August.

PF PERSPECTIVE: The July-August timeframe is when we could finally get congressional leaders to agree on the same number for new farm bill savings. If so, that is when the two Ag panels could then finalize the lengthy debate -- but even that could take a few months.



VALUE OF N. PLAINS AND UPPER MIDWEST FARMLAND SPIKED IN 2012... Farmland values in the Northern Plains and Minnesota spiked higher in 2012, according to preliminary data from the Federal Reserve Bank of Minneapolis. The bank serves Minnesota, Montana, the Dakotas, the Upper Peninsula of Michigan and northwestern Wisconsin.

The value of non-irrigated cropland rose 29% gain, according to the survey, while irrigated cropland rose 18% and ranch/pastureland increased 19%.

The Dakotas saw the strongest percentage increases. Bankers in North Dakota report the value of non-irrigated cropland rocketed 37% higher while irrigated cropland rose 14% and ranch/pastureland increased 21%. South Dakota bankers list a 34% rise in the value of non-irrigated cropland and a 38% boost in the value of irrigated cropland. Ranch/pastureland values rose a similar 36%, they report.

Minnesota trails with a 27% rise in the value of non-irrigated cropland, an 18% increase in the value of irrigated cropland and a 16% gain in the value of ranch/pastureland. Northwest Wisconsin reports a 25% burst in the value of non-irrigated cropland, a 16% boost in the value of irrigated cropland but a 2% decline in the value of pastureland, reflecting continuing financial pressures in the dairy industry. Montana cropland values rose a more modest 5% and ranchland gained 3%.

As usual, Minnesota reports the highest land values, with non-irrigated cropland pegged at $7,373 an acre.



STRONG LAND DEMAND CONTINUES... Here are two auction reports from our associate publication LandOwner which really give life to strength in farmland.

From Ron L. Shultz, AFM, Pathfinder Co., Fremont, Nebraska.: "Had an auction Monday March 11 the morning after an 11-inch blizzard. I started getting calls at 7:10 a.m. from people wanting to know if we were going to hold the auction. I drove 40 miles an hour on a 100% snow-packed highway to get to Oakland (Burt Co.) for the auction. We had 70 people in attendance with seven active bidders and three still in at above $10,000 an acre." Details: 200 acres with 198 acres tillable sold for $10,850 an acre to a nearby farmer who has two sons in the operation. Soils are Class 1 and nearly level.

From Rich Vander Werff, Sanborn, Iowa: March 14 auction of 120 acres east of Bronson in Woodbury County. "All tillable acres had been enrolled in the CRP program since 1994. The contracts expired and the owners decided to sell. The last time it was farmed it had 86.4 crop acres. CSR is 37.3 on the crop acres. Balance of the farm was grass and trees. Most acres of the CRP had small trees and brush, which would need to be removed before farming it. Adjacent landowner bought it for $7,100 an acre in really active bidding."

If the ground will grow corn, farmers will drive through blizzards and dig out trees to get control of the cropland.


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