January 28, 2015
The combination in the agricultural production complex involves crop and livestock production, agriculture-related manufacturing, agriculture-related transportation and wholesaling, agriculture-related research and education and agri-tourism. The jobs directly and indirectly involved in these production systems are great and have been growing in the past few years.
However, what does the agricultural economy look like for 2015?
In the latest long-term forecast released by the Bureau of Business Research at the University of Nebraska-Lincoln, Nebraska is depicted as a haven of steady growth in an uncertain world. Though the national economy likely will fluctuate, most Nebraskans can expect modest but steady economic growth during the next three years, economic forecasters say.
However, the state's grain farmers likely will see declining income as the agriculture sector rebalances from a record $8.4 billion income in 2013. Farm income dropped more than 36 percent in 2014, to about $5.3 billion, and is expected to continue to decline another 7 percent in 2015, leveling off at about $4.8 billion to $4.9 billion in 2016 and 2017.
On the other side, livestock producers recently have benefited from lower feed costs and record prices for their animals because of shortages caused by drought. Lower livestock prices will contribute to a 7 percent decline in farm income in 2015, thought the sector should stabilize at about $5 billion annual income in 2016 and 2017.
The state as a whole is predicted to add more than 32,000 jobs through 2017 -- a 1.1 percent annual increase. Many of the new jobs will come in the construction industry, with the forecasters predicting an upswing in new home construction, commercial construction and road construction – which do affect agriculture.
Nonfarm income is expected to grow by an average annual rate of about 3.9 percent, nearly double the rate of inflation. Recovery will be less robust in Nebraska, in part because declining farm income will limit rural job growth, but also because the state's small population creates less need and capacity for quick job growth. (Remember, Nebraska is one of the 10 states with ridiculously low unemployment.)
So where do you see Nebraska’s ag economy headed? Will it be a rocky road for grain farmers as prices remain low and supply high? Where will new markets lead us?
This is just one of the goals of the Nebraska Corn Board. We are committed to serving our industry in market development, research, education and promotion. We see the challenges that Nebraska corn farmers face. And we want to build more markets and expand on current ones to create more demand for our high quality corn and co-products. Learn more about what we are doing at NebraskaCorn.org.
January 22, 2015
LINCOLN, NEBRASKA. – Corn Board member and district two representative, John Greer from Edgar, Nebraska recently had the unique opportunity to experience a global market in South America from both the eyes of a customer and competitor.
Greer was a member of the U.S. Grains Council’s (USGC) Grain Export Mission (GEM) that travelled to South America to observe local conditions, learn about trade opportunities and constraints and also meet with foreign customers eager for insight into U.S. production and export systems. Greer and his group visited Colombia and Brazil while another GEM group visited Argentina and Mexico.
“Traveling to South America was an exceptional opportunity to see the global market place at work”, said Greer. “After spending some time with buyers and end-users in Colombia, we were pleased to hear that the U.S.-Colombia free trade agreement has created significant market opportunities for U.S. corn and corn co-products.”
Colombia is the second largest corn importer in the Latin American region and a country in which the United States traditionally captured more than 80 percent of the market, though there had been erosion in U.S. market share due to unfavorable tariff treatment.
This year, Colombian buyers returned to purchasing U.S. corn, driven by price and advantages from the implementation of the free trade agreement. In fact, the country exceeded its tariff rate quota (TRQ) in June but still continued to purchase U.S. corn.
Greer’s team also visited Brazil, a critical competitor for U.S agricultural exports but a market that faces many challenges with infrastructure. Understanding the current reality and the future prospects of Brazil’s agricultural production is vital for U.S. farmers as they continue to export their commodities into the global marketplace.
“Colombia and Brazil are emerging economies that have remarkable global potential,” said Greer. “As they continue to work to overcome their security and infrastructure problems, I predict their grain and livestock industries will develop into even greater market prospects for American exports.”
At the completion of the mission, the two GEM groups met with USGC leadership and staff in Panama to debrief about their experience. Alan Tiemann, farmer from Seward, NE and at-large director on the NCB and vice chairman of the USGC, led many discussions with the GEM participants during their time in Panama. The participants concluded their mission with a tour of the Panama Canal, which gave them an opportunity to see first-hand the progress of the Panama Canal’s expansion project.
“The purpose of the GEM is for participants to gain a clearer understanding of the challenges, opportunities and competition we face in the international marketplace, said Tiemann. “The opportunity for American producers to personally communicate and establish relationships with these key end-users and buyers is an essential piece to our global success. With 95 percent of the world’s population living outside our borders, global awareness and connections are increasingly vital for everyone involved in agriculture.”
January 21, 2015
The hope that researchers have is that the cattle will produce gallons of blood plasma that could be used to treat people with the deadly virus, which has infected more than 21,000 people in West Africa and killed 8,500 of them.
In the NBC News article, president and CEO of SAb Biotherapeutics, the company that developed the cattle, Eddie Sullivan said that the catte produce very high levels of human antibody.
The cattle have been genetically engineered with human DNA so that their bodies don't produce cattle antibodies but human antibodies. They're cloned to make a herd of genetically identical, part-human animals.
Then they are vaccinated against various deadly diseases such as Ebola. Their bodies produce antibodies in response to these vaccines, and the hope is these antibodies can be used to treat people with the diseases.
So why are they using cattle to fight Ebola?
Cattle make the project larger-scale. Each month, around 30 to 60 liters of plasma are collected per animal. That translates into something between 500 to 1,000 human doses per month per animal.
Read more here.
January 16, 2015
According to Chipotle, one of their pork suppliers has violated their housing agreement for pigs. The company demands that its suppliers raise pigs in “humane conditions with access to the outdoors, rather than in cramped pens.” So, because the supplier violated the pig housing agreement, Chipotle will not purchase their pork, which is resulting in a pork shortage in over 1700 locations in the U.S.
Wanda Patsche, author and pork farmer in Minnesota shared a picture of a pig pen in her barn. Do you think they look cramped?
In the past, Chipotle customers may have noticed signs stating when certain meats don’t meet the company’s “responsibly raised” standards, a substitution will take place. What is the substitution? Conventionally raised animals. But this time there will be no substitution for the pork.
Now it’s no secret that Chipotle is no friend to America’s farmers. This isn't the first time Chipotle has undermined farmers. Remember the Chipocrisy or "Food with integrity"? Wanda assures us that they take better care of our animals. Housing animals outside does not equate to better pork. Genetics, nutrition, health care and management do. The winter weather is downright cruel to pigs. And how do we know that? Because she has been there – years ago, Wanda's pigs were housed outside. And it’s bad. Frozen waterers, frostbitten ears, broken legs (from slipping on ice and snow) on pigs, and sick pigs from pneumonia are just a few of the difficulties they encountered housing their pigs outdoors.
Why doesn’t Chipotle want pigs housed indoors? Because our culture’s view of farming is nostalgic. Many farm organizations in Nebraska are sharing Nebraska farmers' stories of current modern farming and actual animal welfare - meaning how they really take care of their animals. The Alliance for the Future of Nebraska (AFAN), CommonGround and Nebraska Farm Bureau - along with the Nebraska Pork Producers and Nebraska Cattlemen are just a few examples. Read Nebraska Farm Bureau's blog about Chipotle's claim of pork shortage here.
Chipotle might have good burritos, but by throwing farmers under the bus, I'd rather eat at Qdoba anyday!
January 15, 2015
Food has become a hot topic in the media and around the dinner table. The production and politics of food are on the minds of policy makers, special interests groups and consumers in general. One of the most talked-about subjects is the advanced science used to produce new plants and organisms through the manipulation of genetic material. Today we will look at genetically modified organisms—GMOs—and provide answers to many of the questions you may have about them.
1.) What is a GMO?
When creating a GMO or genetically modified organism, researchers copy specific genetic information from one plant or organism and introduce it into another to improve or enhance a specific characteristic or trait, such as resistance to insects. Developing special traits in plants allows for more food to be grown in more places using fewer chemicals and fewer natural resources
2.) What’s the difference between GMOs and biotechnology?
While the two terms are frequently used interchangeably, biotechnology more closely refers to the process or technology used to create GMOs. You may also see the term “GM”, which of course means “genetically modified.” When you hear farmers talk about “biotech” hybrids or varieties, they are talking about the GM seeds they plant.
3.) What is a Bt crop?
These are crops genetically engineered to carry a gene from the soil bacterium Bacillus thuringiensis (Bt). This bacterium produces proteins toxic to certain pests—caterpillars, mosquitoes and corn rootworm–but do not affect humans and other mammals. The crops that contain the Bt gene can produce the toxin, thus shielding themselves from targeted pests— and reducing the need for pesticides.
4.) Is genetic modification a new thing?
Manipulating genes in plants is an approach that has been used for centuries to make bread, cheese, wine and beer. Today, nearly every food on grocery store shelves has been modified by human hands at the genetic level. The foods we eat are modified using various breeding methods. Breeding alters a plant’s genes so that it expresses new traits. That’s how we get those desirable family favorites such as, seedless watermelons and grapes, red grapefruit, peanuts, honey crisp apples and other foods. GMOs and biotechnology simply accelerate this process. “Everything about science is learning new ways to speed up evolution so that we can come up with crops faster than Mother Nature ordinarily would,” said Dr. Sally Mackenzie, Ralph and Alice Raikes Professor of Plant Science at the University of Nebraska–Lincoln. “Genetically modified is a part of our future. If we want to eat with climate change, we will need technologies or we simply won’t survive, and that’s just a reality.”
5.) Are GMOs safe for humans?
To date, more than 2,000 peer-reviewed studies have confirmed that GMOs are safe for human consumption. While there have been a handful of studies that state otherwise, these studies have been roundly debunked by scientists around the world. With over 25 years of independent research, there is no documented evidence of harm to human health or deaths from consumption of GM foods. (National Research Council, European Commission)
6.) Are there GMO-free foods?
Genetically modified wheat is not grown in the United States. Genetically modified corn, soybeans and other commodities are approved for production in the U.S. As a result, trace amounts of GM products are found in many processed foods in the form of corn, soybean or canola oils—even when those foods may be labeled “GMO-free.”
7.) Is it safe to eat meat and milk from animals that were fed GMO crops?
Absolutely. A 2012 review of 24 long-term or multigenerational studies found that genetically modified corn, soy, potato, and rice had no ill effects on the rats, cows, mice, quails, chickens, pigs and sheep that ate them. Growth, development, blood, tissue structure, urine chemistry and organ and body weights were normal.
8.) How does genetic modification affect nutrition?
There is no difference. Exhaustive testing and FDA review has confirmed that GMOs are nutritionally the same as their non-GM counterparts. They have the same levels of key nutrients such as amino acids, proteins, fiber, minerals and vitamins.
9.) Do GMOs cause allergies?
No. GMOs do not create new allergens that are not already present due to other unrelated factors. If a person is allergic to a non-GMO plant, they will be allergic to the GMO variety since the two are nutritionally the same.
10.) Do GMOs cause gluten intolerance?
There is absolutely no relationship because there is no GMO wheat on the market today. If such a product were to come on the market, it could not cause new allergies because standard GM testing and FDA review ensure that GMOs are not introducing new potential allergens
January 6, 2015
I filled up my vehicle in Kansas over the weekend for $1.86 per gallon and was ecstatic. Today, the Nebraska state gas price average is $2.04. We haven't seen prices this low in several years.
Why are gas prices so low? We are seeing a glut of oil, both domestically and globally, that is pushing prices lower. Hydraulic fracturing in Texas, the Dakotas and Alberta, Canada, have boosted oil supplies.
So how is that affecting the corn and ethanol industries?
University of Illinois Extension ag economists Scott Irwin and Darrel Good emphasize that it's important not to look only at the price ratio between ethanol and CBOB gasoline, but "the marginal value of ethanol to blenders." Lately, that's been a bright spot in the ethanol market considering the surplus the industry's produced. As long as that remains the case moving forward, demand will likely continue to be strong.
Another scenario that could play out, Irwin and Good say, is if fuel prices fall enough to push ethanol above the breakeven point. Two things could happen in this scenario; first, if blending slows down, demand could fall, ultimately having a negative impact on the ethanol and, in turn, corn market. But, there's still the chance that the margin between the two fuel costs could widen beyond the breakeven point with no response, meaning the market would recover.
Will ethanol supply be affected? Bruce Babcock, an Iowa State University economist said that while the economy doesn't follow the ethanol plants' up-and-down profits, ethanol production helps support corn prices, jobs and communities. "When they turn plants on, they run pretty much at a constant level, whether margins are good or bad," he said. "So as long as ethanol plants are running, the jobs are there, the support and demand for corn is there, and supply of distillers grains is there." This is good for livestock producers as well who utilize the high-protein value distillers grains feed.
Even with lower fuel and corn prices, we can't forget that the ethanol industry directly generates jobs, increases Nebraska’s annual economic base and gives back in local and state tax revenues each year. It also:
- Gives consumers a choice
- Is renewable
- Reduces greenhouse gases
- And is still homegrown
Don't forget to check out our blog on the 10 reasons to use ethanol-blended fuel.
December 31, 2014
After a few years of record corn prices, this year we saw the markets pull back to prices that are very close to the cost of production. It's times such as these that your corn checkoff matters most. When it gets cold outside, you don't turn down the furnace. You keep the heat on—and that's what your corn checkoff investment is doing. We're staying the course with research, market development, promotion and educational initiatives focused on building demand for the corn you grow.
With 2014 coming to an end and the new year upon us, there is no better time to reflect on a few highlights of Nebraska Corn Board activity over the last year…
Standing up for the RFS: Part of our job is keeping you apprised of the opportunity and necessity to make your voice heard. At the beginning of 2014, some 6,000 Nebraska farmers and ethanol advocates submitted comment on the EPA's proposed changes in the Renewable Fuel Standard—and, while the EPA has currently decided to not decide on the 2014 Renewable Fuel Standard (RFS) Renewable Volume Obligation (RVO) until 2015, it's pretty clear that they are reconsidering their position. Similar comment has been solicited for EPA's proposed Waters of the U.S rule (WOTUS).
Education and Outreach: The Nebraska Corn Board was the first group to step up with funding for the Raising Nebraska experience at the Nebraska State Fair. Raising Nebraska is an interactive experience like no other. From science and innovation, to community and culture, and even the global economy, Nebraska’s agricultural experience touches everyone. Through this incredible 25,000-foot interactive exhibit, you actually become part of it – in ways you never imagined and that you’ll never forget. Recently, this outstanding consumer education exhibit took top honors in two categories at the International Association of Fairs & Exhibits awards competition. We've also funded ethanol pump promotions, published our consumer-focused Cornstalk insert in Nebraska newspapers, and helped Nebraskans understand the value of flex fuel vehicles.
Corn Research at the University of Nebraska-Lincoln: The Nebraska Corn Board has made a $2.0 million commitment to the University of Nebraska Foundation to establish the permanently endowed Nebraska Corn Checkoff Presidential Chair faculty position. The endowment will provide annual support to the Institute of Agriculture and Natural Resources (IANR) for research and development related to enhancing the value of Nebraska corn. This is a significant investment focused on the long-term future for Nebraska corn farmers.
Nebraska Corn: We have done a lot of work this last year to strengthen and better align the two organizations that represent Nebraska Corn Farmers. Leaders from the Nebraska Corn Growers Association (NeCGA) and the Nebraska Corn Board (NCB ) have been working together to bring even greater strength, efficiency and effectiveness to benefit Nebraska's leading grain commodity and the farmers who grow it. Improved communication, collaboration and joint coordination are expected outcomes as we work to bring the two corn organizations even closer together. It's important to note, however, that each organization has a distinct mission and purpose and those will remain intact. We expect that this collaboration will make both organizations stronger and increase their positive impact on behalf of Nebraska’s 23,000 corn farmers. Looking forward, NeCGA and NCB leadership will continue to explore new opportunities to join forces for the betterment of Nebraska’s corn industry.
Joint Collaboration: The Nebraska Corn Board collaborated with a number of state and national organizations to amplify the impact of its efforts. In Nebraska, we work closely with the Nebraska Soybean Board, A-FAN, and other livestock and commodity groups to create consumer education programs and improve the position of agriculture in our state. Outside the state, your corn checkoff dollars are supporting the American Ethanol initiative with NASCAR, CommonGround, the U.S. Farmers & Ranchers Alliance, the Corn Farmers Coalition and other consumer outreach efforts. You're also helping fund the international market development activities of the U.S. Grains Council and U.S. Meat Export Federation to promote Nebraska corn, ethanol, distillers grains, beef and pork around the world.
Thank you again to all the Nebraska Corn Kernel Readers for your continued support of the Nebraska corn industry. We hope you will join us in 2015 as we continue in our efforts to educate and inform everyone about important agriculture-related news, events and issues taking place in our state, nation and world.
Have a very Happy and Prosperous New Year!
See you in 2015!
Here are the Top 12 posts of 2014 - if you missed one, now's your time to check it out!
January - January 15 by Curt Tomasevicz
February - Attack of the Killer Tomatoes: A GMO story
March - Brazil Biofuels Mission – Every gallon of gas includes ethanol.
April - FARMLAND Documentary in theaters May 1
May - Geography of U.S. Agriculture
June - 10 reasons to use ethanol-blended fuel this summer
July - U.S. Grains meets in Nebraska this week; still covering issues with China, DDGS
August - Water: Making every drop count
September - What are the uses of corn?
October - FARMLAND film available for digital download
November - What's with this 'Factory Farm' business?
December - 95 reasons to support U.S. grain & red meat exports
Happy New Year and cheers to new "seeds" of opportunity in 2015!
December 30, 2014
Looking back on year 2014, there are many highlights, extremes and moments that will go down as a big year with shifting winds for U.S. agriculture. Changing economics for both crop and livestock producers, a new farm bill and policy shifts, and the growth of big data are a few to mention.
Brent Gloy, a well-known ag economist formerly with Purdue University who became a full-time Nebraska farmer this year, provided his list to AgWeb of 20 key events impacting agriculture in 2014.
Lower Incomes in 2014. USDA called for a 25% decline in net farm income. Reports began suggesting that the great farm boom was over and times were rapidly changing. While some talked of a bubble that might burst and the income hit was notable, others noted that the farm sector remained in relatively good condition.
Farmland Values and Cash Rents Stop Rising. This year may be recalled as the year that land values and cash rents stopped shooting higher. While USDA and some other surveys reported that prices were going up, other surveys observed that prices were flat to lower. The confusion was due to the timing of the surveys and values/rents being measured. Overall, it appears values did peak and began to head lower. Some are saying a major correction could be in the works.
EPA Delays RFS Decision. Ethanol demand mandated by the renewable fuel standard (RFS) has been a big driver of the great agricultural boom. The RFS has come under repeated scrutiny since its implementation, but the EPA’s late 2013 decision to reconsider aspects of the RFS was big news in 2014. After initially proposing to reduce the amount of ethanol blended into gasoline, the EPA postponed its decision until 2015. Many analysts are suggesting that big changes in the RFS are now unlikely. Keep watch in 2015 as big changes would be a surprise to the market.
Ethanol Profits Climb. With lower corn prices and strong domestic and export demand, 2014 was a great year for ethanol producers, but the crash in oil prices raises questions for 2015.
California Drought. As California felt the grip of a powerful drought, the impacts have been staggering, with some estimates pointing to losses in excess of $2 billion. Even today, 99% of California remains in drought and 55% in the most severe category.
The El Nino That Never Came. In early June, forecasts called for an El Nino to occur, with 70% estimates for summer arrival, 80% by fall. But El Nino never came. Today, the forecast places odds at 65%.
Transport and Basis Issues Hammer Northern Plains and Corn Belt. No question but that the development of shale oil resources in the Northern Plains contributed to transportation challenges, but the amount of grain production also has grown substantially in recent years. Corn plantings in this region will be under pressure in 2015.
Concern Over Margin Squeeze. The cost/price squeeze won’t likely be alleviated until fixed costs, such as land prices, cash rents, equipment costs, labor costs, family living expenses adjust, prices rebound, or some combination of these.
Early 2015 Budgets Show Big Losses. In late fall, universities started putting out 2015 crop budgets and the numbers weren’t pretty. Many showed budgeted losses of $100 per acre
Livestock Profits Surge. While row crop incomes were under pressure in 2014, the livestock sector experienced outstanding levels of profitability, and the outlook for 2015 is bright.
Porcine Epidemic Diarrhea Virus. PEDv rocked the hog and pork markets. PEDv left the industry with fewer hogs to market, thus driving up prices and producers worrying about their herd health and financial losses. A second wave of cases is likely this winter.
Machinery Dealers Start to Feel the Pain. As commodity prices fell, many believed equipment would be one of the first purchases farmers would cut back on. Recent data suggests that combines have experienced the softest sales, with November sales off more than 50% from a year ago.
Ag Manufacturers Cut Jobs. John Deere led the scale-back in August, announcing a cut in its workforce, mainly from the agricultural equipment division. Syngenta announced in late November that it was reducing its global workforce as well.
Interest Rates Stay Low. Farmers have benefitted from low interest rates and they stayed very low in 2014. While many have been arguing that rates can’t go much lower, 2015 may be the year that changes that, given recent signals from the Federal Reserve Board.
GMOs on the Ballot. While measures to require labeling of foods containing GMOs failed to pass in Oregon and Colorado this fall, a ban on growing GMO crops passed in one Hawaii county. Attention and focus on GMOs has been growing.
Gloy also mentions other noteworthy issues in 2014, which include: Ebola causes U.S. scare; big data and big ambition; China’s ban on corn and DDG imports over GMOs; the Russia-Ukraine conflict and embargo; and the crash in oil prices.