Evening report (VIP) -- March 25, 2013

March 25, 2013 09:44 AM

MARTELL: MARCH COLD THREATENS SPRING PLANTING... Gail Martell of MartellCropProjections.com says snow and below-normal temps in March have kept field conditions frozen over a broad area of the northern U.S., which is unusual for this time of year and increases the likelihood of spring planting delays.

Meanwhile, Martell notes heavy snow across areas of the Central Plains should put a dent in the drought area, but notes it's a "drop in the bucket when melted rapidly. But she says another round of heavy precipitation is forecast for the Southern Plains this week that should boost wheat crop potential. Click here for related maps.



USDA: UKRAINE AND RUSSIAN WINTER GRAINS IN GOOD CONDITION... USDA's Foreign Ag Service (FAS) says winter grains in Ukraine and Russia are generally in good condition as they begin to break dormancy in southern territories. Crop losses to fall dryness and frost damage are not expected to be extensive. The report states that subsurface moisture reserves are adequate in most regions of these countries.

FAS says spring planting is underway in southern Ukraine and is about two weeks ahead of last year's pace. About 10% of early spring grains have been planted, which includes barley, wheat, oats and pulses, while corn planting will begin in April. In Russia, spring planting has only just begun (1% complete) in southern areas and planting won't begin on a wide scale until April.



NEBRASKA FARMLAND POSTS 25% ANNUAL GAIN... According to preliminary data from the 2013 University of Nebraska-Lincoln Nebraska Farm Real Estate Market Developments Survey, the value of Nebraska farmland rose 25% over the 12-month period ending February 1. This follows increases each of the previous two years of 22% and 32%, respectively. The 2013 all-land value of $3,040 per acre is more than double the value of just three years prior. Click here for more from LandOwner Editor Mike Walsten.



ERS: CONSUMERS ARE FEELING THE EFFECTS OF THE 2012 DROUGHT... The Consumer Price Index (CPI) for all food was flat from January to February 2013, keeping the index at 1.6% above February 2012. The food-at-home (grocery store) CPI declined 0.1% in February to stand 1.2% above the year prior. The food-away-from home (restaurant) index rose 0.1% in February to stand 2.3% above year-ago. The all-items CPI rose 1.8% in February, putting it at 2.3% above year-ago levels. ERS left its inflation forecast for both all food and food-at-home prices in 2013 at a 3% to 4% increase.

The Economic Research Service (ERS) noted that "while seasonality may be a factor, it appears that the effects of the Midwest drought are being reflected in retail food prices, and consumers are feeling the effects (despite mixed food price directions between January and February)." ERS continues, "Prices for all meats and animal-based products have increased more than overall food prices since October 2012, with the exception of pork."

ERS expects inflation to remain strong, "especially in the first half of 2013, for most animal-based food products due to higher feed prices." Inflation will likely top the historical average for "food categories such as cereals and bakery products as well as other foods," ERS elaborates. Get more details.



MORE INDUSTRY REACTION TO HIGH RIN PRICES... Marked volatility in renewable identification number (RIN) prices tied to hitting mandate levels of the renewable fuels standard (RFS) are gaining increasing attention from involved industries as well as lawmakers. Analysis at the Renewable Fuels Association says it would be more cost effective for the petroleum industry to invest in higher ethanol blends than to purchase RINs to comply with the RFS, according to Geoff Cooper, vice president for research and analysis at the RFA. Installing the blender pumps and storage tanks at retail stations necessary to sell gasoline containing E15 and E85 would only cost 6 cents per gallon in comparison, Cooper said, adding that the petroleum industry has exaggerated the impact rising RIN prices will have on retail gasoline prices, arguing the credits will raise prices by less than a cent per gallon. Get more perspective on the issue.


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