P E R I O D I C A L S : T I M E VA L U E D
FEBRUARY 25, 2015 |
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West Coast labor slowdown is hurting Iowa farmers BY BETHANY BARATTA Labor contract negotiations at ports along the West Coast have stalled shipments of U.S. meat and goods to export markets, and that’s hitting Iowa farmers hard. At stake: millions of dollars’ worth of products and hard-won trade relationships with export partners throughout the world, they say. And the damage is getting worse each day, said Chad Hart, associate professor of economics at Iowa State University. “The longer this goes on, the more of an
impact it will have,” he said. Behind the port slowdown is an ongoing labor contract nego tiation between management representatives of the Pacific M a r i t i m e Association and the International L o n g s h o r e HART and Warehouse Union. The worker contracts ex pired in July 2014. For more than three months, the union mem
bers have engaged in a worker slowdown because they are work ing without a contract. Workers at all 29 ports from Bellingham, Washington, to San Diego have engaged in the worker slowdown; workers at the Long Beach, Calif., and Los Angeles ports resumed their day shifts last week after being partially closed for four days.
Backing up products
“The longer this goes on, the more meat we have to freeze to ship. Chilled cars get backed up,
containers get backed up, it backs the meat up on the marketplace,” Hart said. In 2014, about $8.4 billion of U.S. meat and poultry cleared West Coast ports, more than $160 million per week, according to the National Pork Producers Council (NPPC). “About 60 percent of our pork exports go by water (ocean freight). Eighty percent of that goes through ports on the West Coast,” said Dave Warner, director of communications for the NPPC. The U.S. pork industry is the
Deteriorating roads, bridges costing all Iowa drivers
top exporter of pork globally, exporting close to 30 percent of U.S. pork production valued at more than $6 billion per year, according to the NPPC. The cost of the West Coast port slowdown to the U.S. meat and poultry sector is estimated in excess of $40 million per week, Warner noted. Port slowdowns mean products in which export customers prefer chilled versus frozen are being frozen so they aren’t wasted. This PORTS PAGE 2
Germans view Iowa farm, talk trade
The delegation also spoke to Farm Bureau leaders about a proposed U.S.-Europe free trade agreement. STORY ON PAGE 4
BY DIRCK STEIMEL Badly deteriorating roads and bridges are costing all Iowans $935 million per year in vehi cle repair costs and tire wear, increased fuel consumption and accelerated vehicle depreciation, according to a new report released last week. In addition, poor transporta tion infrastructure is making Iowa roads more dangerous and is hampering the state’s economic development efforts, according to a report conducted by a nation al transportation research group called TRIP. The new report, which showed that Iowa needs to invest $215 each year to meet the most criti cal transportation needs, further underscores the urgent need to invest in repairing Iowa’s roads and bridges to provide safe trans portation, said Craig Hill, Iowa Farm Bureau Federation president.
Time for action
“We’ve gone through all of the logical arguments and the political arguments, and now is the time for action,” he said at a press confer ence in the Iowa Capitol announc ing the release of the TRIP study of Iowa roads and bridges. “We believe that providing a safe and efficient transportation infrastruc ture is one of the basic functions of government and is extremely important to agriculture.” The press conference to an nounce the TRIP results coincided with a visit to the Statehouse by some 200 Farm Bureau leaders to push for transportation funding and other key issues. The mem bers expressed support for bills in both the House and Senate that would provide an additional $215 ROADS PAGE 2
New drone rules to bring clarity for farmers After a long wait, farmers are closer to commercial use of unmanned aerial systems. STORY ON PAGE 5
Farm Bureau leaders, from left, Terry Murray, Richard Marshall and Kevin Jesse, all of Buena Vista County, and Mike Sibbel of Carroll County make their case on the need to fund repairs to Iowa’s roads and bridges and other key issues to Sen. Mark Segebart , far right, at the Iowa Capitol. PHOTO/GARY FANDEL
FB members push for road funding, other key issues BY DIRCK STEIMEL
S
ome 200 Farm Bureau leaders fanned out around the Iowa Capitol’s rotunda last week to stress to lawmakers the need for increased investment in the state’s deteriorating transpor
tation infrastructure and impor tance of increasing the fuel tax as the fairest and most equitable funding source for the needed repairs. “We really have to be here to have our voices heard on fund ing road and bridge repairs and let people here know that it just
can’t wait,” Kyle Brinkman, a Pocahontas County Farm Bureau member, said during the visit to the Statehouse in Des Moines. “I think it’s really important that the increased funding will be consti tutionally protected in the Road Use Tax Fund and we know exact CAPITOL VISIT PAGE 2
MONSANTO EXPANDING ITS HERBICIDE PLANT IN MUSCATINE Monsanto is expanding its Muscatine plant to handle the formulations and pack aging for the launch of the company’s dicamba-tolerant trait technologies: Roundup Ready 2 Xtend soybeans and Bollgard II XtendFlex cotton. Both products were deregulated by the U.S. Department of Agriculture on Jan. 20. Approval by the U.S. Environmental Protection Agency is still pending. Monsanto’s action follows the Iowa Department of Economic Development Authority’s (IEDA) decision to provide incentives for the expansion. The project is expected to cre ate additional full-time jobs in Muscatine with hiring to begin in spring to support the project. The Muscatine facility currently employs over 400 full-time workers. IEDA Director Debi Durham said: “Iowa is a leader in the ag-biotech space, and Monsanto’s project is a great example of why.”
Agency promises RFS rules by spring The EPA says it will soon set long-delayed 2014 biofuel requirements, as well as those for 2015 and 2016. STORY ON PAGE 6
New diet guidelines have livestock groups seeing red The guidelines are contradict ory and unfairly shun red meat, the groups say. STORY ON PAGE 7
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CHARGES FILED IN LIVESTOCK THEFTS Two people are facing charges following multiple livestock burglaries in southeast Iowa, according to a Radio Iowa report. The Mahaska County Sheriff’s office ended a six-week long investigation that involved approximately 22 burglaries and thefts from hog con finements in the rural Barnes City area and southern Poweshiek County. Around $25,000 in hogs and cattle were stolen, with the total value of all thefts exceeding $30,000. Officers seized tools and hog-related equipment during the inves tigation. The stolen livestock were sold in sale barns in two counties. Nineteen-year-old Bret Allen Doty of rural Malcom and a male juvenile are both charged with firstdegree theft and third-degree burglary.
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FEBRUARY 25, 2015 IOWA FARM BUREAU SPOKESMAN
CAPITOL VISIT FROM PAGE 1
ly where it will be used.” “This is really the grassroots part of Farm Bureau at work,” added Story County Farm Bureau member Nick Hermanson. “I think this is where we can really make a difference.” Last week’s legislative visit was part of Farm Bureau’s annual Policy Information Conference, where members gathered to em phasize current policy priorities and learn about issues for this year’s grassroots policy development process. The Farm Bureau members visited as the Iowa Legislature continued to make progress on
bills in both chambers that would provide an additional $215 million for road and bridge funding each year by raising the fuel tax by 10 cents per gallon. The bills passed key committees in both chambers last week.
Concern about debt
Members stressed to their legislators that providing safer, efficient infrastructure is a basic function of government. They also expressed concerns that many counties now are being forced to borrow and sell bonds for road and bridge repair, adding to the burden of property taxpayers. In contrast, they said a fuel tax is paid directly by users of the roads and bridges, including out-of-state drivers. As well as lobbying for in
creased road and bridge funding, members visiting the Capitol stressed support for the voluntary Iowa Nutrient Reduction Strategy as opposed to a regulatory approach pushed by some in the state. The Farm Bureau members also urged legislators to provide adequate funding for state cost-share programs, which are matched with private funds to help farmers to continue to make progress on water quality and soil conservation. While transportation funding efforts are making progress, Van Buren County Farm Bureau member Ben Koellner said it was important that members demonstrated their support for increased investment by traveling to Des Moines and taking time away
from their farms during bitter cold temperatures. “We see our legislators a lot on the weekends, but I think it sends a message of how strongly we feel if we are willing to come here all the way from southeast Iowa,” he said. Bridge improvements are vital in Van Buren County, Koellner said, because the county is bisected by the Des Moines River. “We need to make sure the bridges are kept up for our farm and for our school kids,” he said.
Personal meetings vital
Face-to-face meetings with lawmakers are very important, said Mike Sibbel, a Carroll County Farm Bureau member. “I really think that helps us get our position across,” he said. “And I think it helps that we’ve had a very consistent message on road and bridge funding for several years now. They know where we stand on it and that we are serious about it.” Robert Ritscher, a Benton County Farm Bureau member, said he tried to emphasize to legislators that Farm Bureau policies are developed and refined by
PORTS FROM PAGE 1
Craig Hill, Iowa Farm Bureau Federation president, speaks with reporters after the release of a new report saying that Iowa’s deteriorating roads and bridges are costing drivers $935 million per year. PHOTO/GARY FANDEL
ROADS FROM PAGE 1
million per year in constitutionally protected funding to the state’s Road Use Fund by increasing the fuel tax by 10 cents per gallon. Key committees in both the House and Senate passed the bills last week, and floor votes could be held as early as this week. For several years, Farm Bureau has advocated for an increase of the state’s fuel tax as the fairest and most equitable method of paying for the needed road and bridge repairs. Hill noted that the fuel tax would be directly paid by those who use the roads and bridges, including out-of-state drivers. “The fuel tax increase would also provide a funding source that is sustainable, predictable and would be constitutionally protected,” Hill said. “It’s the right thing
to do, and we have been solid on this for several years.”
Concern about debt
The Farm Bureau president also highlighted the disturbing trend of borrowing by Iowa counties to fund needed road and bridge repairs. “This practice is growing rapidly and will lead to higher property taxes as this debt has to be repaid,” Hill said. Currently, 30 counties have bonded for over $208 million specifically for county roads and bridges. The Iowa Bankers Association is also a supporter of investing more in transportation infrastructure in the state and increasing the fuel tax to fund the repairs, said Sharon Presnall, the organization’s senior vice president. Improved roads and bridges are critical for economic development in Iowa’s cities and rural areas, she said. “We understand that increas-
ing any tax is difficult, and it’s a decision we didn’t make lightly,” Presnall said. “But Iowa simply cannot afford to let our transportation system deteriorate any further.” The TRIP report, which comp iled federal and state data, showed that 13 percent of Iowa’s rural roads are in poor condition and 45 percent are in mediocre to fair shape. It also showed that 21 percent of the bridges in Iowa are structurally deficient, forcing closure or reduced weight limits. Another 5 percent of the state’s bridges are functionally obsolete. “Without additional funding, Iowa’s transportation system will continue to deteriorate, stifling economic growth and progress here in the state,” said Carolyn Bonifas Kelly of TRIP. “Making improvements to Iowa roads and bridges will create a lasting asset for future generations. It will also spur economic development and a higher quality of life.”
Road funding bills make progress
With Farm Bureau leaders making a strong case at the Iowa Statehouse, identical bipartisan transportation funding bills in the House and Senate made significant progress last week in each chamber. Senate File 257 passed the full Senate Transportation Committee and later the full Senate Ways and Means Committee. House File 351 passed the full House Transportation Committee and then the full House Ways and Means Committee. Both bills are expected to be debated this week on the floors of their respective chambers. The road and bridge funding bills would provide an additional $215 million of constitutionally protected funding to the Road Use Tax Fund annually.
ISSUE UPDATE Approximately $72 million of the new revenue will go directly to county governments every year to maintain secondary and farm-tomarket roads and bridges. The primary source of funding is a 10-cent fuel tax increase which would go into effect immediately. Additionally, the bill creates an increase in fees for oversize and overweight loads, creates bonding limitations for county governments and provides incentives for biodiesel and ethanol. Both bills meet the critical
principles supported by Farm Bur eau: the funding is constitutionally protected, it is sustainable, it allows out-of-state drivers to contribute, and it would meet the critical needs. Iowa Gov. Terry Branstad last week signed Senate File 126, which couples the Iowa tax code with various federal tax provisions, recently extended by Congress for 2014, including Section 179 asset expensing. The Section 179 asset expense deduction increases to $500,000. However, this bill doesn’t couple Iowa’s tax code with the federal bonus depreciation provisions. Farm Bureau policy supports coupling state tax policies with federal tax policies that provide economic benefits for farmers.
cuts down on the value of the meat, said Kent Bacus, associate director of legislative affairs for the National Cattlemen’s Beef Association (NCBA). And the chilled meat is backing up in the ports, he said. “We are running out of places to store that product. Because of that, packing facilities are going to have to start slowing down some of their shifts, some of their processing, simply because they have nowhere to put it. When that happens, that means that they are going to be purchasing fewer cattle from our feedyards, from our producers, and that obviously has a trickle-down effect to the cow-calf level.” Iowa cattle farmer Ed Greiman has seen beef cutout prices lagging lately, but he’s not sure if the port disputes are to blame. “I don’t know how much of it to really blame on the exports, but it’s got to be affecting us b e c a u s e n ow all of the sudden we’ve got a little more domestic product we’ve got to get rid of,” G r e i m a n , a GREIMAN cattle farmer in Garner, said. Greiman is chair of the cattle marketing and international policy committee for the NCBA. He’s also a past president of the Iowa Cattlemen’s Association.
Other factors
The port disputes aren’t the only thing affecting market prices, said Lee Schulz, livestock market economist with Iowa State University (ISU) Extension and Outreach. The strength of the U.S. dollar, which makes beef and pork supplies more expensive to export partners, and increased supplies have also put downward pressure on prices, Schulz said. Crude oil prices are also a part of the equation, Hart said. However, the port disputes means U.S. products don’t make it to their intended destinations. Instead, they are forced back into
members working through their county organizations. “I think we have very sound policies because of that, and I want to make sure the legislators know that,” he said. The professionalism of Farm Bureau, along with a strong desire to make long-needed improvements on roads and bridges, provided a powerful combination at the Iowa Capitol, said Rusty Olson of the Hancock County Farm Bureau. “We are here meeting with legislators and making reasonable and strong arguments that are backed up with grassroots support. I think that’s really important,” he said. Marion County Farm Bureau member Mary Van Zante said that seeing some 200 members in the rotunda speaking with a unified message also a sends a strong message to all Iowa lawmakers. “I really think the number of people we are able to bring is always impressive,” she said. “I think it makes a good impression on our own representatives and all of the others, including those who may not always see things our way.”
the U.S. market at a lower price. “A great deal of this product is going in to the Asian market,” he said. “It’s worth about $300 a head as far as exports for us to keep this product moving.” The port slowdown means that international customers are starting to look to U.S. competitors, like Australia and Canada, for beef supplies.
Long-term damage
“What I worry about is the fact that this gives our competitors a chance to get a foothold with some consumers that we’ve done a really good job of taking care of,” Greiman said. Warner said the pork industry is concerned, too. “We have a lot of customers who aren’t getting orders filled and are going to other countries for their pork,” he said. “Once you lose a customer, it’s hard to get them back.” The port slowdown is also affecting imports of fresh and frozen beef from Australia and New Zealand, which the beef industry uses for commercial ground beef. Hart said shippers are looking at other ways to get products to their destined markets. Shipping products out of East Coast ports or sending products down the issippi River and through Miss the Panama Canal are just two options, but Hart said that adds costs to the process. “This not only delays shipments, but adds to the cost of each shipment,” he said. “It’s a doublewhammy. The value of the dollar is making our product expensive, but it’s more expensive because it costs more to ship.”
Pushing for resolution
An open letter to the White House, lawmakers, the Pacific Maritime Association and the International Longshore and Warehouse Union, signed by 93 groups, including the American Farm Bureau, NPPC and NCBA, urged the groups to resolve their differences. “The increase in food and agriculture products exported and imported has been extremely beneficial to the terminals and to the thousands of workers that handle shipments. The apparent indifference by parties in the dispute to the impact the slowdown is having on our sectors is disturbing.”
IOWA FARM BUREAU SPOKESMAN FEBRUARY 25, 2015
Editorial
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Consumers seek knowledge and are tiring of anti-GMO rhetoric BY BOB STALLMAN
C
onsumers are tiring of anti-GMO rhetoric: They want facts. You don’t have to put those claims under the microscope to see how shaky the anti-GMO platform is. That’s no surprise to those of us who know the benefits of genetically modified (GMO) products firsthand, of course. Now, more than ever, is a prime time for us to be sharing our stories STALLMAN about the environmental benefits of biotechnology and the safety of GMO foods we feed to our own families without hesitation. Research and common sense back up what farmers and ranchers have long known about GMOs, and others are taking notice. Last October, the Journal of Animal Science released the findings of a new trillion-meal study, the most comprehensive GMO study yet. Animal geneticist Dr. Alison Van Eenennaam analyzed about three decades of livestock data to compare the health of nearly 1 billion animals. Her goal: to see what effect feeding livestock GMOs for over a decade now has had. The answer? None. No difference in the health of the animals, and no effect on the humans who eat those animals. Although this isn’t news to agriculture, the size of the study makes it a game-changer.
Muddling the debate GMO opponents have used mis information for too long to muddle the conversation. And the push for mandatory labeling has only confused things more. The call for GMO labels sure isn’t coming from the Food and Drug Administration (FDA), the nation’s top authority on food safety. FDA officials have declared GMOs safe and are standing their ground. In fact, GM crops have long withstood intense scrutiny, with not one documented foodsafety case.
Spokesman Editor DIRCK STEIMEL News Coordinator TOM BLOCK Senior Features Writer TERESA BJORK Ag Commodities Writer BETHANY BARATTA Photographer/Writer GARY FANDEL
By planting biotech crops, like these soybeans in Benton County, farmers have been able to sustainably increase production and reduce their environmental impact. PHOTO/GARY FANDEL
Fortunately, this charged rhetoric isn’t enough to convince most voters. Ballot initiatives to require labeling in Colorado and Oregon both failed last fall. Policymakers on Capitol Hill are taking notice and starting to question the “need” for labels also. Former Rep. Henry Waxman, D-Calif., noted at a House hearing this fall that labeling would mislead the public and send the message that GMOs are dangerous.
Waxman made a good point. We should allow the FDA to continue doing its job setting standards for food safety and labeling.
Eager for knowledge Consumers are more and more interested in the story of their food. This is good news for farmers and ranchers. We’re proud of the work we do and are eager to share how food gets from the farm to the table.
Feeding a growing population is a popular topic now, and “sustainability” is the buzzword. GM crops will play a big role here. Farmers and ranchers have their work cut out for them, but they are ready for the challenge and to lead this conversation. The U.S. Farmers and Ranchers Alliance brought farmers and ranchers to the table for this discussion recently at the New York Times’ “Food for Tomorrow” event. While most of the conference pushed for administrative action, a few farmers and ranchers broadened the conversation to help attendees see what sustainability in action looks like. Julie Maschhoff, Bruce Rominger and Joan Ruskamp closed the event by explaining the hard work and careful planning that go into providing healthy food for our families and for generations to come. Panels like this are just a slice of the conversation that thousands of farmers and ranchers around the country are ready for. Consumers want to know the truth about what’s in their food — and who better to inform them than the very people who grow it? S t a l l m a n i s p re s i d e n t o f the American Farm Bureau Federation.
Congress’ late action on depreciation helped slow farm equipment sales LETTERS FROM MEMBERS
Late last month, the Spokesman ran a front page story about the recent layoffs of nearly 1,000 production workers at several John Deere factories in Iowa. The article indicated that these cut backs are due to “tighter margins” in the farm economy. There is no question that lower grain prices is a primary factor cooling the demand for farm equipment. However, as Paul Harvey once said, you missed “the rest of the story!” Another major reason that farmers cut their equipment purchases in 2014 was due to the anticipation of a serious reduction in the accelerated depreciation allowances by the federal government (for equipment purchases) from more than one-half million dollars annually to a miniscule $25,000. Unfortunately, Congress did not restore the larger allowance for the past year until the eleventh hour, in December, long after farmers had completed their
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To place a free exchange ad, contact your county office for information. The Iowa Farm Bureau Spokesman (ISSN 0021-051X) is published weekly by the Iowa Farm Bureau, 5400 University Avenue, West Des Moines, IA 50266. Subscription price of $2 per year for mailing in the continental USA included in the dues of Farm Bureau members in Iowa. Additional subscription fee required for mailing outside the continental USA. Periodical postage paid at Iowa Falls, Iowa. Members please send change of address to your county Farm Bureau office. Postmaster send address changes (POD FORM 3579) to Iowa Farm Bureau Spokesman, P.O. Box 670, Iowa Falls, Iowa 50126. Letters to the editor and statewide news articles should be sent to Editor, Iowa Farm Bureau Spokesman, 5400 University Avenue, West Des Moines, Iowa 50266. Reprinting of Spokesman articles and photographs is not allowed without permission.
equipment purchase plans for the year. This delay had a huge impact upon 2014 sales for John Deere and other major ag equipment manufacturers. With each passing year, the scale of the typical farm operation increases along with equipment needs. Twenty-five thousand dollars will barely buy an average pickup truck, let alone a tractor or combine. Depreciation schedules need to reflect those changes. Our government representatives must be reminded of the realities of today’s financial challenges in agriculture. This was a perfect opportunity for the Spokesman to inform our politicians that tax policy can and does affect the economy. In this case, their procrastination directly influenced these large cut backs in manufacturing. Jesse Denman Dallas County
Iowa Farm Bureau Federation: Craig Hill, President; Joe Heinrich, Vice President; Denny Presnall, Secretary-Treasurer and Executive Director; Edward G. Parker, General Counsel. Board of Directors: District 1 - Carlton Kjos, Decorah. District 2 - Charlie Norris, Mason City. District 3 - Phil Sundblad, Albert City. District 4 - Doug Gronau, Vail. District 5 - Mark Buskohl, Grundy Center. District 6 - Nick Podhajsky, Traer. District 7 - Andrew Hora, Riverside. District 8 - Calvin Rozenboom, Oskaloosa. District 9 - Will Frazee, Emerson.
FB grassroots approach shines at the Capitol BY DIRCK STEIMEL An interesting thing happened at the Iowa Capitol last week that really highlighted the strength and uniqueness of Farm Bureau’s grassroots approach. During a press conference detailing the need to invest more in repairing Iowa’s roads and bridges, Iowa Farm Bureau President Craig Hill mentioned that some 200 Farm Bureau members were visiting the statehouse that day. The farmers, Hill said, had taken time away from their operations to travel to Des Moines and meet with legislators. The members, he said, stressed to lawmakers the urgency of adequate funding and that the fairest and most equitable way to accomplish that was with a state fuel tax. It wasn’t easy for members to make the trip to Des Moines to participate in the annual Policy Information Conference and visit the Capitol. With temperatures well below freezing, many had to keep in close contact with people back home to make sure hog barns were heated or that newborn calves were off to a healthy start. But as one member said: “It’s important to take the ‘boots on the ground’ approach in getting our message to legislators.”
Launched by county FBs The coordinated push for transportation infrastructure funding, Hill explained, had been launched several years earlier by Farm Bureau members, who see firsthand every day how deteriorating road and bridges have reduced the efficiency in their operations and have compromised safety. The members worked through their county organizations to make in creased infrastructure funding a key statewide issue. “We have worked on this for several years, and we are solidly behind it,” Hill told the statehouse reporters. The reporters’ response was telling. They seemed surprised that Farm Bureau could muster that kind of grassroots support for roads and bridge funding. I think sometimes they underestimate the strength of Farm Bureau’s grassroots approach. We get used to the organization’s inclusive policy development process, which starts in the counties and works its way to the state and national levels. And we don’t think that having 200 or more farmers visiting with lawmakers on a single day is anything out of the ordinary. But both are remarkable, and sometimes it takes someone from the outside to help us get a clear vision of that.
IOWA FARM BUREAU SPOKESMAN FEBRUARY 25, 2015 5
Proposed rule brings UAS closer to commercial farm uses BY TOM BLOCK Farmers finally have a set of proposed rules for using unmanned aircraft systems (UAS) on their farms, a major step forward for an industry eager to use the machines to check on their crops and livestock. The Federal Aviation Administration (FAA) last week proposed a set of safety regulations that would allow routine use of UAS, or drones, for commercial operations. Until now, UAS have been allowed to fly only for recreational purposes or with a permit. “The agriculture industry is very, very interested in unmanned aircraft,� Eric Parker, FAA aviation safety inspector, said last week at the Iowa Farm Bureau’s Policy Information Conference in Des Moines. “The FAA understands this.�
Ensuring safe operations
The Federal Aviation Administration (FAA) is working to ensure the safe integration of unmanned aircraft systems into the national airspace, FAA Aviation Safety Inspector Eric Parker said last week at the Iowa Farm Bureau’s Policy Information Conference. PHOTO/GARY FANDEL
The rules have been in the works for about five years as es,� he said. “These near-miss epithe FAA gathered information on sodes are the kind of thing we’re how to safely integrate commer- trying to avoid.� The proposed UAS rule, which cial drones into the national aircovers drones weighing less than space, Parker said. “We have been a little slow in 55 pounds, would limit flights to getting some rules out,� he con- daylight hours and require operaceded. “Five years ago, we didn’t tors to maintain a visual line of sight of the aircraft. Flights would have data.� The agency studied a number be limited to 500 feet altitude and of UAS accidents and near misses no faster than 100 miles per hour. Operators would have to be at as it developed the proposed rule, least 17 years old and pass an Parker said. “There are a lot of people who aeronautical knowledge test every will have access to the national two years to maintain certification. airspace who never did before. There are also restrictions on flyMorton_IFB_Spokesman_2.25.15_Layout 1 2/13/15 3:43 PM Page 1 That’s been one of the challeng- ing near airports and over crowds.
However, the rules don’t require UAS operators to obtain a pilot’s license or certified medical training, which had been under consideration. The FAA is also considering more flexible rules for “micro� UAS under 4.4 pounds. “We are glad to see this action, and we look forward to additional details,� said R.J. Karney, American Farm Bureau Congressional relations director. “It is our hope that farmers and ranchers are able to secure the rights through this process to use drones as part of their precision agricultural systems.� While the proposed rules were welcomed by ag interests, it will still be a while before it’s legal to fly the remote-controlled aircraft for commercial purposes, Parker said. The FAA will accept comments on the proposed UAS rules for 60 days. The agency will then review the comments and potentially issue a revised rule. In the meantime, farmers or crop consultants who want to fly UAS for commercial purposes must apply for a Section 333 permit. The FAA has issued a handful of such permits to real estate and agricultural operators, but has more than 400 applications on file, Parker said. The FAA’s long-term goal is to develop rules so that commercial UAS operations will be routine and won’t require special permits, Parker said.
of the emerging technology are immense for agriculture and other industries. An industry study predicts UAS could produce some 100,000 new jobs and add $82 billion in economic activity over the next 10 years. The largest part of that would come from agriculture, according to Kevin Price, director of research and development for RoboFlight. “This is a technology that will revolutionize the way we work with agriculture,� said Price, who estimates that 80 percent of the
initial applications for UAS will be in agriculture. The primary value from UAS will come in how the aerial imagery is processed and analyzed, said Mark Lanning, RoboFlight’s chief technology officer. In fact, he said, RoboFlight is changing its name to AgPixel to more accurately reflect its data-processing services. “It’s all about the data and having it in a timely manner,� said Lanning. “You need to get past the ‘shiny new toy’ part and get down to what is it good for; what is it doing for (your farm).�
Woodbury County FB reaches membership goal The Woodbury County Farm Bureau last week became the fourth county in the state to reach its 2015 membership gain goal. The county signed 269 new members to reach its goal of 1,884 members. Greg Jochum of Salix is the county president. The top region so far in this year’s membership campaign is Region 1 in northwest Iowa at 96.09 percent of goal. Counties
in the region are Lyon, Dickinson, O’Brien, Sioux, Plymouth and Osceola. Region 17 in southeast Iowa is second at 96.08 percent of goal. The 2015 membership JOCHUM campaign continues through the end of March.
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6 FEBRUARY 25, 2015 IOWA FARM BUREAU SPOKESMAN
Feedlot cattle numbers higher, USDA report says
C
attle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.7 million head on Feb. 1, 2015, the U.S. Department of Agriculture said in its report last week. The inventory was 1 percent higher than the February 2014 estimate. There were 660,000 head of cattle and calves on feed in Iowa feedlots with a capacity of 1,000 or more head on Feb. 1, the report said. This was up 20,000 head from Jan. 1, 2015, but unchanged from Feb. 1, 2014. Placements in U.S. feedlots during January totaled 1.79 million, 11 percent below 2014, the report said. There were 100,000 head placed in Iowa feedlots during January. This was down 1,000 head from December and down 14,000 head from January 2014 placements, according to the report. Marketings of U.S. fed cattle during January totaled 1.63 million, 9 percent below 2014. January marketings were the lowest since the series began in 1996, the USDA noted. There were 78,000 head marketed from Iowa feedlots during January, down 2,000 head from December, but up 7,000 head from January 2014.
Livestock expansion seen After declining 1.2 percent in 2014, livestock and poultry production is expected to expand by 3.2 percent in 2015, the U.S. Department of Agriculture (USDA) said at its Agricultural Outlook Forum held last week in Virginia. The USDA said it expects to see increased pork, broiler and turkey production offset lower expected beef supplies. If realized, the USDA said the 3.2 percent increase in production would be the highest year-overyear livestock and poultry production increase since 2002. “Conditions support greater pork production, while producers appear to be adapting to PEDV via improved biological security and other management practices including vaccines,” the USDA said in its published report. “Broiler and turkey production are
expected to grow by 3.6 and 5.6 percent, respectively, as producers respond to favorable returns.”
Crop acreage cutbacks Corn farmers in the United States are expected to plant 89 million acres in 2015, the USDA said in its report. This is down 1.6 million acres from the 2014 final estimate. “The 8.3-million-acre decline from 2012’s 78-year high reflects a continued erosion in expected returns over the past three years,” the USDA said. Large U.S. and global corn supplies will push new-crop prices lower, the report said. Lower prices reduce expected market returns and crop insurance revenue coverage levels for corn again in 2015, the USDA said in the report. The USDA expects 83.5 million acres will be planted with soybeans in 2015, fewer acres than last year. A year ago, U.S. farmers planted a record 83.7 million acres of soybeans as new-crop futures prices and bids for fall delivery exceeded $12 per bushel and delivery prices reached 2.8 times that of corn during May.
Reuters last week. The agency will address all three years at once and plans to look at broader changes to address longterm issues of demand as well as arguments from refiners that ethanol blending capacity has hit its peak, Christopher Grundler, a director at the EPA’s Office of Air Quality and Transportation, told Reuters.
Milk production higher Milk production in the 23 major milk-producing states during January totaled 16.5 billion pounds, up 2.1 percent from January 2014, the USDA said in its milk production report last week. Milk production in Iowa during January totaled 410 million
CME Class III Milk Futures Closing prices Feb. 20, 2015 Contract February 2015 March 2015 April 2015 May 2015 Spot Prices Block Cheese Barrel Cheese Butter NFDM Grade A
Settle Last Week $15.54 $15.73 $15.53 $15.52 $15.32 $15.20 $15.66 $15.44
RFS rules by spring The U.S. Environmental Pro tection Agency (EPA) plans to offer a proposal for Renewable Fuels Standards (RFS) for 2014, 2015, and 2016 by June 22 this year and will use actual production levels to determine last year’s mandated volumes, an official told
Weekly Average Price Comparison Sheet Price comparisons: Week ending: 02/20/2015 01/23/2015 02/21/2014 Cattle - National 5 Area Confirmed Sales 25,931 46,254 2,192 5 Area 65-80% Choice Steers: Wtd Avg. $159.80 $160.00 NA Average Weights (Estimate) Cattle 1360 1368 1338 Boxed Beef Choice 600-750 (5 day avg.) $240.31 $253.74 $213.75 Boxed Beef Select 600-750 (5 day avg.) $237.79 $247.23 $210.88 Five Day Average Hide and Offal Value $14.13 $15.32 $15.23 Cattle - Interior Iowa – Minnesota Supply: 5,121 9,486 1,868 Average Price Choice Steer: Live Basis $160.42 $159.67 NA Average Price Choice Steer: Dressed Basis $258.00 $256.62 NA Feeder Steers at River Markets (Neb. Feedlots) #1 Muscle Thickness 500-600# $277.09 $304.35 $216.70 #1 Muscle Thickness 700-800# $221.18 $226.53 $176.04 Hogs -- Interior Iowa – Minnesota ISM Friday Weighted Average Carcass Price $59.57 $69.04 $93.69 Average Weights (Estimate) Hogs 285.8 287.1 281.2 Sows 1-3 300# and up: Average Price $35.09 $46.65 $62.03 Pork Loins 1/4” trimmed 13 - 19 pound $100.48 $106.88 $133.13 51-52% 200 pound Pork Carcass (5 day avg.) $71.63 $84.81 $95.54 Feeder Pigs: National Direct Delivered Feeder Pigs 10 Pounds Basis - Wtd Avg. $47.60 $63.61 $82.31 Feeder Pigs 40 Pounds Basis -- Wtd Avg. $72.66 $85.29 $108.26 Sheep -- National Slaughter Lambs Negotiated Sales 5,200 3,900 5,600 Choice & Prime Wooled and Shorn 130 -150 lbs No Test $139.00 $161.75 Iowa Large Eggs (cents per dozen) $1.08 $1.01 $1.34 Young Hen Turkeys: 8 -16# -- Eastern Region $99.25 $98.55 $98.75 *Iowa Ethanol Prices $/gal $1.33 $1.28 $1.98 Futures: Corn $3.85 $3.87 $4.53 State Average Cash Corn Price $3.65 $3.63 $4.39 Basis -$0.20 -$0.24 -$0.14 Futures: Soybean $9.99 $9.73 $13.71 State Average Cash Soybean Price $9.56 $9.23 $13.21 Basis: -$0.43 -$0.50 -$0.50 Slaughter Under Federal Inspection Estimates Estimates Actuals Hogs: 2,105,000 2,121,000 2,048,000 Cattle: 519,000 541,000 535,000 Sheep: 35,000 39,000 38,000 Estimated Numbers through Saturday. Cash Corn and Soybean prices are the Iowa Average Prices as reported by IDALS. NA-No report at time of publication. ***Confidentiality of data prohibits publication of this report under Livestock Mandatory Reporting. The report will be published when and if enough data is aggregated to meet the 3/70/20 guideline.*** Source: USDA Livestock and Grain Market News
pounds, up 4.9 percent from January 2014, the report said. Production per cow in the 23 major states averaged 1,918 pounds for January, 17 pounds above January 2014, the report said. This is the highest production per cow for the month of January since the 23 state series began in 2003. Production per cow in Iowa averaged 1,950 pounds for January, 45 pounds above January 2014. The number of milk cows on farms in the 23 major states was 8.62 million head, 103,000 head more than January 2014, the USDA said. There were 210,000 milk cows in Iowa during January, up 5,000 cows from January 2014.
$1.5450 $1.4850 $1.7225 $1.1100
Contract June 2015 July 2015 August 2015 September 2015
Settle Last Week $16.28 $15.97 $16.74 $16.67 $17.15 $17.16 $17.22 $17.22
Milk Prices Feb. Class III Feb. Class IV
$15.54 $14.02
Iowa Hay Auctions Dyersville, Feb. 18
Hay, large squares, supreme, $252.50; premium, $95-145; good, $80-110; fair, $70-80; utility, $60-70; large rounds, good, $80-135; fair, $65-80; utility, $55-70. New seeding, large rounds, good, $70. Straw, large squares, good, $25-44. Mixed, large squares, good, $80-115; large rounds, good, $70-105. Grass, large squares, fair, $80-95; large rounds, good, $95-100. Corn stalks, large rounds, good, $39.
Ft. Atkinson, Feb. 18
Hay, small squares, 1st crop, $110-165; 2nd crop, $125-250; large squares, 2nd crop, $55-135; 3rd crop, $95-165; large rounds, 1st crop, $45-115; 2nd crop, $50115; 3rd crop, $85-145. Grass, large rounds, $60-85. Oat hay, large rounds, $70-75. Straw: large squares, $110; large rounds, $75-85. Corn stalks: large rounds, $35.
Perry**, Feb. 14
Alfalfa, small squares, premium, $6.50-7; good, $4.50-5; large squares, premium, $70; good, $60; large rounds, premium, $115; good, $85.
Grass, small squares, premium, $4.50; good, $3.50; fair, $2; large rounds, premium, $60; good, $50; large squares, good, $55; fair, $40. Straw, large squares, $55; small squares, $5.50. Corn stalks, large rounds, $25.
Rock Valley, Feb. 19
Alfalfa, large squares, premium, $140155; good, $115-125; fair, $97.50-110; large rounds, premium, $130-160; good, $115-125; fair, $90-110. Grass, large rounds, premium, $125-130; good, $95-110; fair, $90-92.50; utility, $85; large squares, fair, $95-110. Mixed hay: large rounds, fair, $95-110. Straw: large squares, $85-110; large rounds, 70-105. Corn stalks: large rounds, $50-57.50.
Yoder**/Frytown, Feb. 18
Alfalfa, large rounds, $30-120; large squares, $57.50; small squares, $3-4.20. Grass, large rounds, $25-62.50. Corn stalks, large rounds, $20-36. Straw, small squares, $2.80-3.50.
**Perry and Yoder hay auction prices are per bale. All other prices are per ton. Contacts: Dyersville, 563-588-0657; Ft. Atkinson, 563-534-7513; Perry, 515-321-5765; Rock Valley, 712-476-5541; Yoder, 319-936-0126
Last week, the graph illustrated estimates of 2015 corn costs and revenues. This week, the graph shifts focus to 2015 soybean estimated costs and revenues. The estimated total cost of production for herbicide-tolerant soybeans following corn at a target yield of 50 bushels per acre (from Iowa State University’s 2015 Estimated Costs of Crop Production in Iowa) is the red dashed line. Also illustrated is an estimate of gross revenue using November soybean futures prices less an estimated 45-cent basis multiplied by 50 bushels per acre. Given these assumptions, new-crop soybean prices need to rally more than $1 per bushel to cover all estimated costs; 2015 crops could face slim or no margin above costs.
IOWA FARM BUREAU SPOKESMAN
USDA soybean acreage estimates are a surprise
U
.S. Department of Agriculture’s (USDA) analysts countered the popular trade wisdom that lower corn and winter wheat plantings would lead to larger soybean plantings. The plantings of the other major crops were not much of a surprise to the trade. It must be remembered none of the data released at their annual outlook forum is survey-based. That leaves the door open for a different set of forecasts on the March 31 prospective plantings report. Even then, spring weather and price shifts can create a different mix of plantings by the time the USDA surveys for the June acreage report. Statistically, the June survey is a stronger report than the March 31 report. But the soybean planting number forecast by the USDA, 83.5 million acres (down 0.2 from last year), implies the USDA may be picking up features the trade has been overlooking. Although it’s not readily apparent from what we learned from the forum, we suspect analysts are looking at some anecdotal evidence suggesting more marginal acres won’t be “actively” cropped this year. Expected plantings for the eight major crops is expected to decline by 3.3 million acres this year to 254.6 million acres. Because the USDA doesn’t forecast all crops, it’s difficult to discern the total impact, but the decline is consistent with the 1.8 million acre decline in plantings of all crops in major corn areas in 2014. Including CRP acres, the total crop area in major corn areas dropped 2.9 million acres last year. The impact of the smaller soybean plantings is seen in the supply/ demand forecasts the USDA released at the conference. The initial ending stocks estimate for the 2015 marketing year was 430 million. That’s a dramatically smaller scenario than the mid-500 numbers the trade has been thinking the last few months. USDA analysts increased usage sharply to get ending stocks down to that level. But their demand forecasts are consistent with their long range models and ongoing world protein demand.
Report serves as a starting point Corn plantings, at 89 million acres (down 1.6 million from last year), were close to trade expectations, so were the accompanying supply/demand numbers. Nevertheless, the 1.687 billion bushel stocks projection represents a potential tightening of long-term supplies, not expansion. Wheat numbers were by far the most negative. Plantings, at 55.5 million acres, are forecast to drop 1.3 million acres from last year. That implies a possible increase in spring wheat acres. Ending stocks were forecast to increase 71 million bushels to 763 million. But the USDA used a relatively high yield to achieve the mix. With a crop that’s in moderately poor condition, and poor moisture conditions dominating the Southern Plains, a high yield and output are far from certain. In the end, these represent a starting point from which to work. And we don’t have any early world scenarios to work with either. But they do hint the persistent bearish scenario that’s been popular since last fall is far from a slam dunk.
800
Central IL Daily Cash Corn 700
2014 CROP: The corn market
2015 CROP: Technical aspects continue to build the case for higher prices. We see no reason to price new crop at these levels. Consider buying out-of-the-money new-crop call options; you can make cash sales against later this
83.5 million acre planting number, along with the supply/demand forecast, surprised many in the indus-
$4.96 - 38% retracement $4.61 $3.90 $1.11
400 300
11/5/13
$2.79
6/30/14
spring or summer.
$3.50
$1.11
A move over the December high confirms prices have established potential to $4.61 or the first important resistance at $4.96.
200 3/18/13
2/20/15
10/7/15
10 0
FUNDAMENTALS: USDA’s forecast for the 2015 crop didn’t contain any huge surprises. Still, the smaller ending stocks forecast is somewhat supportive, especially with prices near the lower end of the modern range. Export demand remains on track to reach the USDA
-10 -20 -30
-40 Basis Chicago Futures
-50 3/10/14
6/4/14
8/28/14
11/21/14
2/20/15
forecast, if not exceed it. Weather and livestock numbers still hint feed demand may be underestimated.
1750
Central IL Daily Cash Soybeans Strength this past week lifted prices above the initial upward surge enhancing the odds prices put in a 16- to 18-week cycle low at the beginning of February.
1550
16- to 18-week cycle lows
1350
crop talk keeps the soybean market acting somewhat defensive, but demand remains robust. Technical features still suggest better selling opportunities should be ahead.
FUNDAMENTALS: USDA’s
Cycle Lows 20-week 40-week
500
2014 CROP: South American
age forecast should have taken away bearish talk for now, enhancing the possibility prices are in the lower end of the major trading range. We have no interest in pricing 2015 crop at these levels.
The move up out of the down trending channel that has been in place since the December high suggests the market is turning up out of the 20- and 40-week lows.
600
SOYBEAN STRATEGY
2015 CROP: The USDA acre-
7
Cash Strategist Hotline: 1-309-557-2274
CORN STRATEGY
continues to follow its historical precedents for having choppy, sideways markets during winter. Better opportunities to make sales will come; only make needed sales. If you need to sell, we’d recommend a basis contract to secure cash, leaving pricing open into spring. Continue to hold 2013 crop for expected long-term improvement.
FEBRUARY 25, 2015
1150
$11.04
If cash prices overcome the $10.40 winter high, price measuring tools point to a move to $11.04. But any move to a new high, would thrust prices into a range with little significant resistance until $12-$12.29.
950
750 3/18/13
$10.40 $1.58 $9.46
$1.58 $8.82 3-year low
11/5/13
6/30/14
try. The forecasts countered those expecting another big increase in supply next year. Brazilian harvest continues to move forward, but supplies are still slow getting to port, keeping a lid on the entrance of their crop into the pipeline. Harvest results still hint the size of their crop may be revised slightly lower yet. Argentine crops remain in good condition. Some private
2/20/15
10/7/15
400 300 200 100 0 Basis Chicago Futures
-100 3/10/14
6/4/14
8/28/14
11/21/14
2/20/15
analysts are projecting output to reach 57 million to 58 million metric tons.
Iowa Corn & Soybean Basis CORN: (basis vs. March futures, 2/18/15)
SOYBEANS: (basis vs. March futures, 2/18/15)
NW $3.64 -0.20 SW $3.58 -0.26
SW
NC $3.65 -0.19 SC $3.61 -0.23
NE $3.68 -0.16 SE $3.62 -0.22
NW
$9.50 -0.46 $9.56 -0.40
NC SC
$9.49 -0.47 $9.50 -0.46
NE $9.52 -0.44 SE $9.64 -0.32
Neither AgriVisor LLC nor the Iowa Farm Bureau Federation is liable for any damages that anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendation or advice or any other act of omission. This publication is owned by the Iowa Farm Bureau Federation with advice provided by and copyrighted by AgriVisor Services LLC, 1701 Towanda Avenue, Bloomington, Ill., 61701. No reproduction of any material in whole or in part of this page may be made without written consent.
Industry wants to see beef in dietary guidelines Cash Strategist Positions CORN
2014
3-10-14 — 10% sold @ $4.82
at a glance 2015
100% unsold
3-10-14 — 15% sold @ $4.78 3-31-14 — 10% sold @ $4.95 65% unsold
BEANS
2014
2015
12-23-13 —10% sold @ $11.72 12-31-13 — 10% sold @ $11.35 2-18-14 — 10% sold @ $11.38 3-3-14
5-27-14 — 15% sold @ $12.07 85% unsold
— 10% sold @ $11.72
5-12-14 — 10% sold @ $12.23 6-2-14
— 10% sold @ $12.24
6-23-14 — 15% sold @ $12.07 25% unsold
Iowa Farm Bureau members have free 24/7 access to AgriVisor daily updates through the Members portion of the IFBF website: www. iowafarmbureau.com. The AgriVisor link is on the homepage under the Daily Market chart.
BY BETHANY BARATTA The beef industry is fighting for its place on the dinner plate after a federal government report last week left lean meat out of what is considered to be a healthy dietary pattern. The advisory committee report from the U.S. Department of Agriculture (USDA) and U.S. Health and Human Services (HHS) is inconsistent, and if adopted, will lead to conflicting dietary advice, the National Cattlemen’s Beef Association (NCBA) said. According to the report, “Dietary patterns with positive health benefits are described as high in vegetables, fruit, whole grains, seafood, legumes, and nuts; moderate in low- and non-fat dairy products; lower in red and processed meat; and low in sugar-sweetened foods and beverages and refined grains.” The statement disregards the positive role of lean meat, the NCBA said.
“Lean meat is red meat. Today’s beef supply is leaner than ever before with more than 30 cuts of beef recognized as lean by government standards,” said Dr. Shalene McNeill, registered dietitian and nutrition scientist with the NCBA. Lean beef is one of the most nutrient rich foods, providing high levels of essential nutrients such as zinc, iron and protein, the NCBA said. Dr. Richard Thorpe, a Texas medical doctor and cattle producer, said the key to a healthy lifestyle is building a balanced diet around healthy foods coupled with physical activity. “It is absurd for the advisory committee to suggest that Americans should eat less red meat and focus so heavily on plant-based diets,” said Thorpe. “The advisory committee got it wrong in the 80s advising a diet high in carbs, and look at what that got us — an obesity problem. My colleagues and
I commonly encourage people to include lean beef more often for their health, not less.” The Iowa Cattlemen’s Association (ICA) says it will be encouraging its members to comment on the report during the 45-day comment period that is now open. “We’re going to ask the secretaries of both USDA and Health and Human Services to reject the advisory committee’s recommendations on topics that are outside of the diet and health,” said Dal Grooms, director of communications for the ICA. For example, she said, the group mentions sustainability in its report. “We think dietary guidelines need to focus on diet and health and not worry about other issues,” she said. Grooms said ICA will also ask the secretaries to reject the idea that a healthy diet be lower in red meats and insist they include lean meats in their final guidelines issued later this year.
8
FEBRUARY 25, 2015
IOWA FARM BUREAU SPOKESMAN
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