~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Oklahoma's latest farm and ranch news
Your Update from Ron Hays of RON for Friday August 15, 2008!A service of Producers Cooperative Oil Mill, Farm Credit Associations of Oklahoma and Midwest Farm Shows!
-- ACRE Program in New Farm Law May Not Be a Good Fit for Most Wheat and Cotton Farms in Southern Plains
-- Exports of Pork HUGE in 2008- and Rapidly Recovering for Beef as Well- USMEF
-- Lift a Prayer.
-- A Need to Know Number- the Value of Added Gain.
-- Margins Raised by the Kansas City Board of Trade
-- The Billion Bushel Addition by Subtraction.
-- The Big Event is Set for Monday, September First!
-- Let's Check the Markets!
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ACRE Program in New Farm Law May Not Be a Good Fit for Most Wheat and Cotton Farms in Southern Plains
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The USDA continues to work on implementing the 2008 Farm Law- and they say they will have the ACRE program up and in place for the 2009 crop year. ACRE stands for Average Crop Revenue Election. Some of the very best work on interpreting what ACRE could mean for farmers in the southern plains has been done by a north central Oklahoma farmer and policy analyst for the American Farmers and Ranchers, Francie Tolle.
Tolle has done extensive work in dissecting the ACRE component of the 2008 Farm Law- and she believes it is not the ideal fit for southern plains wheat and cotton farms. Tolle thinks that you lose too much as you have to give up 20% of the Direct Payment as established in Title One- and if you should elect to go with the Revenue based ACRE plan, you are gambling that you will suffer significant loss with the table stakes that you offer being the reduction in Direct Payments.And, once you elect to go to the ACRE program, there is no turning back- you have to stay with that election for the balance of the Farm Law's life.
We have two things linked on our website that relates back to ACRE this morning. First, we talked at length with Francie about not just ACRE, but also the need for farmers to sign up for either CAT or NAP insurance coverage by September 16 to preserve their eligibility for the new Permanent Disaster Program that is a part of the farm law. We also talked with her about some of the twists and turns of Mandatory COOL which is due to be implemented as of September 30.
We also have a six page analysis that Francie has put together for AFR about ACRE and how it may impact producers here in the southern plains. The link to our Top Story below will take you to both of those items. ACRE is first generation revenue based farm policy- Francie suggests that now is the time to really start to get to know how it works and how it will affect your government support. Check out both our conversation with Tolle as well as her excellent work on ACRE.
Exports of Pork HUGE in 2008- and Rapidly Recovering for Beef as Well- USMEF
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The outlook for U.S. livestock producers has received a big boost from meat sales in overseas markets of both pork and beef in recent months.
June pork exports were double the volume of last year's June exports. The 192,667 metric tons valued at $451 million pushed the six month total of 2008 to 1,018,467 metric tons valued at $2.3 billion, which is 67% more than 2007 in terms of volume and 58% more in terms of value. China and Russia had the most growth as far as imports of U.S. pork but Mexico, Japan and Korea also saw an increase in imports.
The top export markets for U.S. beef continue to be Mexico and Canada, although rebuilding of market share in Japan continues and a major breakthrough was made with the resumption of exports to South Korea. Japan and South Korea were first and third respectively in terms of the largest markets of U.S. beef prior to the 2003 BSE case in the U.S. and the subsequent ban.
Daley said that while this year's beef exports won't be able to match the peak levels achieved earlier in this decade, the beef industry is getting close to reaching the same level of value. While beef exports exceeded $3.8 billion in 2003, she forecasts that assuming no major disruptions of trade this year's exports could total as high as $3.5 billion.
Lift a Prayer.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Reports we have received are encouraging from Sam Knipp, Vice President of Communications for the Oklahoma Farm Bureau. Sam underwent surgery on Wednesday in Oklahoma City, is recovering well but will be out of the office for the next eight weeks.
Sam has been on the scene here in Oklahoma since the mid 1990s- coming from Kansas. He and his Communications team have been honored multiple times for their work on behalf of Oklahoma Farm Bureau members by AFBF.
A Need to Know Number- the Value of Added Gain.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~As you add weight to your cattle this year, the costs of doing so are higher than ever before. Dr. Glen Selk of Oklahoma State University says that it's very important to know exactly how much it costs to add those pounds- and to understand that while you may be getting more than a dollar a pound on those animals- even yearlings approaching nine hundred pounds- the value of the added gain from a four or five hundred pound animal up to that yearling weight is significantly less than a dollar per pound.
We talk about that with Dr. Selk today on our Beef Buzz as he urges producers to sharpen their pencils and understand this principle- or else you will be wondering at the end of the cycle how could I get such good prices for those animals- yet it looks like I made almost nothing.
We have our Friday Beef Buzz up on our website- and linked below as well for you from www.OklahomaFarmReport.com- in this day and age of high input costs- understanding this number won't save your life- but it sure could help you make money in the cattle business.
Margins Raised by the Kansas City Board of Trade
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Effective close of business yesterday, the Kansas City Board of Trade has raised the margins for trading in Hard Red Winter Wheat.
The Board has jumpled the hedge trades from $2000 as the initial margin to $2500, with maintenance "margin calls" to also be in increments of $2500, up from $2000.
For a speculator in the wheat market in KC, the initial margin requirement was $2500- the KCBT has now made it $3125. Margin Calls will be the same for speculators as it is for the hedge accounts, $2500, which is up from the previous $2000.
The Billion Bushel Addition by Subtraction.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Actually, it might be more accurate to say its the billion bushel addition by distilling. The National Corn Growers Association says Tuesday's crop production report actually shows how livestock benefit from ethanol. The group notes USDA not only increased its corn production forecast - but also corn demand for ethanol use and livestock feed. The amount projected for ethanol use is up to 4.1-billion bushels. USDA boosted corn for livestock feed to 5.3-billion bushels. What's missing - NCGA says - is the amount of livestock feed that will be produced from the same corn that goes into ethanol. Actually - if the latest projection holds true - NCGA says the equivalent of an additional one-billion bushels of livestock feed will be derived from the corn for ethanol in the form of distiller grains, corn gluten feed and corn gluten meal. Litterer - says distillers grains offer a high-protein feed for livestock and help growers meet all needs.
The group's president - Iowa corn grower Ron Litterer - notes each bushel of corn can produce approximately 2.8-gallons of ethanol through dry milling or wet milling. Through dry milling - each bushel of corn produces 17.5-pounds of distillers dried grains with solubles. That's in addition to the ethanol. Litterer says distillers grains offer a high-protein feed for livestock and help growers meet all needs.
Through wet milling - 13.5-pounds of gluten feed are produced from each bushel of corn. The process also results in 2.6-pounds of gluten meal and 1.5-ounds of corn oil. If you take the use of coproducts into account and shift a billion bushels of corn from the ethanol to the feed category - Litterer says you get a better sense of where the corn is really going. As projected by the USDA for 2008 - he says ethanol production will consume about 22-percent of the total 2008-09 corn supply.
The Big Event is Set for Monday, September First!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~The folks at Express Ranch in Yukon call their annual Angus Production Sale "The Big Event" and the 2008 edition is their sixth annual renewal of this Labor Day Classic. Some 600 lots of Registered Angus cattle will be offered on September first, beginning at 10:00 AM- the sale to be held at the Express Ranch facilities just north of Yukon.
The offering that day will include:
We have the link for the catalog that is now on line at the Express
Ranch website- click below to check out this outstanding offering that
will be sold on September first.
Our thanks to Midwest Farm Shows, Farm Credit Associations of Oklahoma and Producers Cooperative Oil Mill for their support of our daily Farm News Update. For your convenience, we have our sponsors' websites linked at the top of the email- check them out and let these folks know you appreciate the support of this daily email, as their sponsorship helps us keep this arriving in your inbox on a regular basis!
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Let's Check the Markets!
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