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Your Update from Ron Hays of RON
Wednesday, February 10, 2016
Final Obama Budget- The Good, The Bad
US Ag Secretary Tom Vilsack
met with reporters via teleconference about President Obama's final
budget as a sitting President, and pointed to several priorities that
he hopes that Congress will seriously consider as they work on agency
appropriations for Fiscal Year 2017. Those priorities include an
increase in Ag Research spending, an expansion of the Summer Feeding
Program, fixing the Fire Budget and giving USDA the authority to
expand their presence in Cuba.
At the same time, the administration wants to reduce the level of premium
subsidies for crop insurance- cuts that would total $18 Billion
Dollars over a ten year period. I participated in that USDA Budget
Briefing for reporters on Tuesday- and here are a few keys- taking
our headline above backwards-
This was not a part of the Vilsack pitch to reporters- but the $10
per barrel tax on crude oil certainly qualifies as being absurd,
according to several key lawmakers- including the Oklahoma
Word of the proposed tax was met with a denouncement from U.S. Sen. James Lankford.
"This is not only a higher tax, it is a new type of tax,"
said the Senator. "Creating yet another type of gas tax would
further complicate the tax code and raise prices on consumers."
Major Cut in Crop Insurance Funding.
One area that the USDA wants to cut funding in the coming fiscal year
comes in the Crop Insurance subsidies. A USDA
fact sheet says the budget contains two proposals to reform the
crop insurance program: "The first would reduce subsidies for
revenue insurance policies that insure the price at the time of
harvest. The second would reform prevented planting coverage,
including removing optional buy-up coverage. These proposals will
modify the structure of the crop insurance program so that it is less
costly to the taxpayer, yet still provides a safety net for farmers.
Collectively, these proposals are expected to save $18 billion over
10 years," including $1.26 billion in FY 2017 alone, according
to the fact sheet.
Both Chairmen of the Agriculture Committees, Senator
Pat Roberts and Congressman Mike
Conaway, blasted the attack on the Crop Insurance program. Click
on the name of each lawmaker to see their complete statements about
the proposals from the Administration.
Now, at least one group considers the cuts to Crop Insurance are
Good. The Environmental
Working Group released a statement- saying
the proposed cuts to crop insurance and other expensive farm
subsidy programs in the Obama administration's 2017 budget would be
good for taxpayers and the environment. Click
or tap here to read more from EWG.
One area that main stream ag groups as well as Conservation interests
were upbeat about was the Conservation parts of the Obama Budget- we
talk about those positives in Story Two.
Here in 2016, we
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NACD Says Obama Budget
Has Positive Movement in Conservation Spending
Association of Conservation Districts have offered
praise for a budget that does not propose to cut conservation
spending in the coming fiscal year, in contrast to the last several
budget proposals from President Obama that called for Conservation
Spending reductions. In particular, the Administration did not
propose cuts to the EQIP program- and USDA Secretary Tom Vilsack
talked about the importance of EQIP in helping achieve the
Administration's goals in dealing with Climate Change in his Media
Briefing on the USDA Budget on Tuesday- you can hear his comments on
EQIP by clicking here.
According to the statement from the NACD, "the President's
budget includes positive movement by the administration toward more
conservation-minded practices and acknowledges the success of
voluntary incentive-based conservation practices coupled with local
delivery and technical assistance."
"The President's proposed budget signals strong awareness in the
administration that conservation practices are the key to our future
as a nation and as a sustainable provider for the world's growing
population," said NACD President Lee McDaniel.
You can read
more on our website about conservation efforts included in the
Tuesday Supply Demand
Reports Have Little Encouraging News for Wheat, Corn or Soybeans- Tom
The U.S. continues to battle plentiful global wheat
supplies and the weakest export sales in more than 40 years. That's
according to Market Analyst Tom
Leffler of Leffler Commodities. On Tuesday, the U.S. Department of Agriculture
released the latest U.S. ending stocks and the World Agricultural Supply and
Demand Estimate (WASDE) reports. Leffler said the
latest domestic and global ending stocks reports offered nothing
price supportive for wheat, corn or soybeans.
The U.S. ending stocks report came in close to trade expectations.
Leffler said the report as a whole was slightly negative, as there
were changes in demand. U.S. corn ending stock came in at 1.837
billion bushels. That was 35 million bushels higher than the January
report. U.S. corn export sales were lowered by 50 million bushels.
Corn use for ethanol was increased by 25 million bushels. U.S.
soybean ending stocks came in at 450 million bushels. That was ten
million bushels higher than the January estimate. USDA lowered the
bean crush in the U.S. by ten million bushels, while export sales
were left unchanged. Leffler said there was no good news for the
wheat market, as USDA increased ending stocks to 966 million bushels.
That was 17 million bushels higher than what the trade expected and
25 million bushels higher than the January estimate. He said this was
the highest U.S. ending stocks since the 2009-2010 marketing year.
Export sales came in 25 million bushels lower than last month.
Leffler said that was the lowest export sales for wheat since the
1971-1972 marketing year.
Negative news also came out of the monthly WASDE report. Leffler said
world is looking at record large world wheat ending stocks and world
wheat production. World wheat ending stocks were increased by almost
seven million metric tons. He said adjustments made by China
accounted for about four million tons. Global corn ending stocks were
adjusted lower by 130,000 metric ton. Leffler said Argentina's corn
production was raised by 1.4 million metric ton and Brazil's corn
production was increased by 2.5 million metric ton. World soybean
ending stocks were increased by over one million metric tons. He said
Brazil's bean crop estimate was left unchanged from the January
estimate of 100 million metric tons and Argentina's bean production
was increased by 1.5 million metric tons to 58.5 million metric tons.
Leslie Smith interviewed Leffler and discussed both USDA reports. Click
or tap here to hear the full interview.
for the U.S. ending stocks report.
for the World Agricultural Supply and Demand Estimate report.
USDA Expects Net
Farm Income to Fall Modestly in 2016- After Huge Drops in 2014
Farm sector profitability is forecast to decline for
the third straight year, despite increased receipts for several
commodities. That's according to the Farm Income and Financial
Forecasts for 2015 and 2016, released by the U.S. Department of
Agriculture's Economic Research Service. U.S. Agriculture Secretary Tom
Vilsack said the farm income forecast showed
improvement from recent years.
"Overall, net farm income for all producers is forecast down
slightly, three percent, relative to 2015," Vilsack said.
"This is an improvement from the double digit declines seen in
2014 and 2015, and it reflects a more competitive trade environment,
softening projection for global demand and a continuation of the dip
in agricultural commodity prices. While agricultural exports climbed
more than 45 percent in value, totaling $911.4 billion over the past
five years and besting all previous records in terms of value and
volume and acting as an engine for America's farm economy, today's
forecast shows how weaker foreign demand can weigh on farm
Net cash farm income is forecast at $90.9 billion, down about 2.5
percent from the 2015 forecast levels. Net farm income is forecast to
be $54.8 billion in 2016, down three percent. If realized, 2016 net
farm income would be the lowest since 2002 and a drop of 56 percent
from its recent high of $123.3 billion in 2013.
Cash receipts are forecast to fall $9.6 billion, about 2.5 percent in
2016, led by a $7.9-billion or 4.3 percent drop in animal/animal
product receipts and a $1.6-billion (0.9 percent) decline in crop
receipts. Nearly all major animal specialties-including dairy, meat
animals, and poultry/eggs- are forecast to have lower receipts, as
are vegetables/melons and feed crops. While overall cash receipts are
declining, receipts for several commodities are expected to increase
by at least one percent relative to 2015 forecast levels. Direct
government farm program payments are projected to rise $3.3 billion
(31.4 percent) to $13.9 billion in 2016 in response to the expected
here to read more about median income of farm households and
the full forecast.
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Value and Volume of US Beef Exports Fell in 2015- But
USMEF's Phil Seng Says Several Countries Were Bright Spots
export numbers for 2015 have been released by the U.S. Department of Agriculture
and compiled by the U.S.
Meat Export Federation (USMEF). December U.S. beef
exports totaled over 94,000 mt, off six percent from a year ago and
slightly lower than November. Export value fell 21 percent compared
to a year ago. For 2015, beef exports were down 11 percent from a
year ago in volume to 1.07 million mt. Export value was $6.3 billion,
12 percent below the 2014 record of $7.14 billion. USMEF President
and CEO Phil Seng said there's no question 2015 was a very
challenging year for U.S. beef exports.
One of the bright spots for beef exports was the South Korean market.
Seng credits the Korean Free Trade agreement that was put together
four years ago. The U.S. now has a duty advantage over its
competitors in that market. U.S beef exports to South Korea were up
seven percent and that comes at a time with a limited supply of
cattle and a strong U.S. dollar.
U.S. beef exports also showed support from the North American Free
Trade Agreement countries. Seng said exports in 2015 to the NAFTA
neighbors were slightly lower, but still showed consistency from year
to year. He was thankful there's nothing else impeding exports,
because these two countries account for about 40 percent of the
nation's beef exports. In December, repeal of the nation's mandatory
Country of Origin Labeling (COOL) was signed into law by President
Obama. That kept the U.S. from $1.01 billion in tariffs on U.S. goods
in retaliation. Seng said repeal of COOL also helped the relationship
between the three countries and will help build trust longer term.
I caught up with him at the recent Cattle Industry Convention in San
or tap here to listen to this Beef Buzz. Earlier, we had posted
our full conversation with Seng as a part of our coverage from San
Diego- it's available
to Have the Latest Energy News Delivered to Your Inbox Daily?
broadcast journalist Jerry
Bohnen has spent years learning and understanding how
to cover the energy business here in the southern plains- Click here to
subscribe to his daily update of top Energy News.
Ethanol Exports Surge in December;
DDGS Exports Set New Annual Record
U.S. ethanol exports finished the year on a high note,
with 81.7 million gallons (mg) of product shipping out to both
emerging and longtime markets. Canada was the top destination in
December, receiving 21.3 mg. Oman (13.4 mg), China (10.6 mg), the
Philippines (8.8 mg), and the Netherlands (8.8 mg) were other leading
importers of U.S. ethanol. December ethanol exports were up 39% over
November, reaching their highest monthly level since March. As
documented in a new statistical report released by the Renewable Fuels Association
last week, U.S. ethanol exports totaled 836 mg in 2015-identical to
the 2014 final tally. The RFA report provides details on top export
destinations, shifts in the marketplace, ethanol import volumes, the
value of exports, and other key data regarding U.S. ethanol trade in
Denatured fuel ethanol exports totaled 50.3 mg in December, the
highest monthly total of the year and up 57% from November. At 19.3
mg, Canada was once again the leading importer of denatured product.
Meanwhile, Oman imported sizeable volumes (13.4 mg) of denatured fuel
ethanol for just the third time on record. Relative newcomer China
(10.6 mg), the Netherlands (4.3 mg), and Peru (2.6 mg) were other top
spots for denatured fuel ethanol exports. December exports of
undenatured fuel ethanol tallied at 28.6 mg, up 18% from November.
The Philippines (8.8 mg), Brazil (6.4 mg), the Netherlands (4.5 mg),
Belgium-Luxembourg (2.6 mg), and Mexico (2.2 mg) were the top five
markets for undenatured product in December. Exports of denatured and
undenatured ethanol for non-fuel, non-beverage purposes were 2.8 mg,
with Canada receiving 2.0 mg.
U.S. fuel ethanol imports fell to 9.4 mg in December, less than half
of the November import volume. Total imports of fuel ethanol finished
the year at 93.2 mg, up slightly from 2014. More than 99% of December
imports originated in Brazil, with the remaining imports coming from
or tap here to read about the exports of U.S. distillers dried
This N That -Fire Danger
at Critical Point, Big Iron Wednesday and Poultry Star Power- Von
Fire Danger is really high this week- much of Oklahoma
has a lot of dry "ready to burn" grass and rangeland- and
rising temps and strong winds add up to a dangerous situation across
much of western Oklahoma.
Here's the map from the Oklahoma Mesonet as of early this morning-
not a pretty sight.
here for details from the National Weather Service on what they
are calling critical fire danger in the counties affected.
It's Wednesday- and that means the Big Iron folks will be busy
closing out this week's auction items - all 360 items
consigned. Bidding will start at 10 AM central
Click Here for the complete rundown
of what is being sold on this no reserve online sale this week.
If you'd like more information on buying and selling
with Big Iron, call District Manager Mike Wolfe at 580-320-2718 and he
can give you the full scoop. You can also reach Mike via email
by clicking or tapping here.
Before becoming a national champion with the Broncos
over the weekend and before his professional career in football,
Broncos linebacker Von
Miller majored in poultry science at Texas A&M
University. Now, Miller Farms, his backyard operations with a small chicken
coop, along with roughly 3,000 square feet of backyard space and 40
to 50 chickens, represents his "humble beginnings" as a
The story was originally reported by Yahoo Sports last year and
started circulating the internet again this week following the
Broncos Super Bowl win over the Panthers. Miller said he dreams of
retiring to be a chicken farmer, but on a much larger scale.
Following his career, Miller says he wants to expand when he's done
playing football, adding he'd like to build relationships with
chicken farmers across the world.
One of several stories on Miller and his days at TAMU can be read by jumping
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& Ranchers, Stillwater Milling Company, Oklahoma
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