The opening statement from the Executive Summary handed out by Cattlefax at their annual Outlook Seminar held yesterday morning here in San Diego spoke volumes about what happened to cattle prices in the middle of 2015- "The increase in US protein supplies was staggering in 2015. A variety of factors combined to increase U.S. per capita red meat and poultry supplies by nearly ten pounds per person compared to the previous year."  

As Randy Blach kicked off the session, he told attendees they had warned attendees last year that they were expecting about a six pound increase in that per capita number- and that would have been hard enough to absorb- but he says that the ten pound jump is key reason way the market crashed the way it did in the second half of the year.

Cattle producers and traders will get a good indicator of herd expansion in the U.S. this week. The U.S. Department of Agriculture will release the U.S. cattle inventory report on Friday, January 29th. I sat down with Rabobank Protein Analyst Don Close at the 2016 Cattle Industry Convention in San Diego, California. Close said this report will show there are a lot more beef cows as of January first, compared to one year ago. In his office, he said in talking with producers there has been strong indications of continued herd expansion. He expects a year from now there will be a lot of first calf heifers and cows in the market place.


The cattle market has seen wild volatility, especially in the second half of 2015. This has led to red ink for feedlots and it hasn't been a good year for margin operators and the stocker end of the business. While cow-calf operators haven't been as profitable as last year, Close said they are still profitable. Based on last week's USDA cattle on feed report, he said there are still a lot of intentions to hold back females. The report showed that heifers and heifer calves accounted for 3.41 million head, down seven percent from 2015. The January first heifers and heifer calves inventory was the lowest percent of total January inventory since the series began in 1996.


"While we expect to see it slow down tremendously from the last two years, but the first level of data on heifers in the feed yard mix suggest that retention is still going on, at least through the first of the year," Close said.

I featured Don Close on the Beef Buzz. Click or tap here to listen to today's Beef Buzz.

U.S. Agriculture Secretary Tom Vilsack Thursday announced the establishment of the Natural Resources Conservation Service (NRCS) Wetland Mitigation Banking Program, made possible by the 2014 Farm Bill. Through the program, NRCS will provide $9 million to help states, local governments or other qualified partners develop wetland mitigation banks that restore, create, or enhance wetland ecosystems, broadening the conservation options available to farmers and ranchers so they can maintain eligibility for other USDA programs.


"Over the past seven years, USDA has worked with private landowners to enroll a record number of acres in conservation practices, and we are seeing significant reductions in nutrient runoff and greenhouse gas emissions. Wetland Mitigation Banks will give farmers and ranchers more conservation options so they can find the best solution for their land and circumstances, and produce even more results," Vilsack said.


Wetland mitigation banking is a market-based approach that involves restoring, creating, or enhancing wetlands in one place to compensate for unavoidable impacts to wetlands at another location. Wetland mitigation banking is commonly used to compensate for wetland impacts from development, but can also be used to offset impacts from agriculture. A small number of banks have been developed in the U.S. specifically to assist agriculture, and the mitigation banks established under this program will be used to help agricultural producers who need to mitigate wetland losses to maintain eligibility for USDA programs. 

USDA is now accepting project proposals for this program.

Click or tap here to read more.

Oklahoma's budget shortfall will be the dominate factor of the 2016 Legislative session. The state's two largest industries, oil and agriculture, are dealing with a devastating blow of lower prices and economic revenue. The state is looking at a $1-billion shortfall. Oklahoma Farm Bureau believes it's time for the state to look at diversifying the state's economy. Oklahoma Farm Bureau Vice President of Public Policy John Collison said there is untapped potential in the state's water resources.


"We let 65-million acre feet of water out of the state of Oklahoma this year and the ag value of that water, at $65 an acre foot, that's $4.2 billion in revenue," Collison said.


Collison said the state needs to look at building the infrastructure necessary to capture, transport and sell water. Even during the drought, he said 20 million acre feet flowed out of the state. The excess water flows out of the Arkansas and Red Rivers into the Gulf of Mexico. Oklahoma Farm Bureau thinks it's time to start maximizing the benefits of these water resources. The Panhandle relies on ground water, so Collison said it's time to look at ways to capture that water and pump it back into the ground to recharge the Ogallala Aquifer.


Another top priority for the general farm group will be the eradication of feral or wild hogs.  I also talked with Collison about the proposed Oklahoma Department of Agriculture, Food and Forestry feral hog rule.  Click or tap here to listen to our conversation on the 2016 legislative/regulatory priorities of Oklahoma Farm Bureau. 


John will also join me for my weekly In the Field report on KWTV News9 in the Oklahoma City area on Saturday morning at 6:40 AM.

Wheat prices have been on a rollercoaster. On this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Kim Anderson addresses the rise and fall of wheat prices the last couple of weeks. The Kansas Wheat March futures contract increased about 15 cents. That pushed some farmers to sell their wheat, as prices reached near the resistance level at $4.80. Wheat prices will end the week near the support price at $4.60. With the winter wheat crop in dormancy, there won't be much news about crop condition until later on this spring.


U.S. wheat exports are coming in near or slightly below expectations. Anderson said there are some rumors that the U.S. could pull in additional demand, as competing countries have already exported their quality wheat. That could bring additional demand to the U.S.


Canada led the way in global wheat exports for the 2014-2015 marketing year. Anderson said Canada exported 886 million bushels, while the U.S. exported 854 million bushels. He said that was the first time that Canada out ranked the U.S. for wheat exports. Globally, Canada came in first, the U.S. ranked second, and Russia was third for wheat exports. In looking at the 2015-2016 export projections, he said Russia is projected to come in first in exporting 14.6 percent of the world's exports, followed by the United States at 13.5 percent and Canada at 12.7 percent. Anderson said that's a far different picture than in 1960 when the U.S. exported 41 percent of the world's wheat exports.

SUNUP host Lyndall Stout talks with Dr. Anderson for this weekend's show.  Click or tap here to listen to the full interview and take a look at the SUNUP show lineup for this weekend. 

Agricultural producers interested in learning how to maximize their canola production should register now to attend the February 18 Canola College in Enid.


"It's a great opportunity to learn from and speak with leading experts in the field, and interact with more than 300 new or veteran canola producers and industry members," said Ron Sholar, Great Plains Canola Association (GPCA) executive director. "This will be the premier canola education and training event in the region for 2016."


Canola College is a joint effort of GPCA, Oklahoma State University's Division of Agricultural Sciences and Natural Resources, Kansas State University, and cooperating partners in the canola industry.


Registration will begin at 8:00 a.m. with the program kicking off at 9:00 a.m. and finishing at 3:00 p.m. The conference will take place at the Chisholm Trail EXPO Center, located at 111 W. Purdue St. on the north side of Enid. There is no cost to attend. Registration is available online at http://www.canola.okstate.edu via the division website.  Click or tap here to read more about Canola College.