BECK’S PFR INSIGHT MEETINGS
2020 STRATEGIES FOR SUCCESS December 27, 2019
A family affair on the farm
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USMC a boost to trade
2020 OUTLOOK: CORN
Families run 98% of farms in U.S.
Deal a positive signal to our trading partners
By Martha Blum
AGRINEWS PUBLICATIONS
KANSAS CITY, Mo. — Family farms represent 98% of all farms and 88% of production in the United States. Those numbers are included in the America’s Diverse Family Farms — 2019 Edition report which describes characteristics of the 2 million farms. “The report includes what the farms produce, farm profitability, receipts of government payments and participation in agricultural federal programs which is important to understanding the farm sector,” said Christine Whitt, agricultural economist for the U.S. Department of Agriculture’s Economic Research Service. The data included in this report was collected in the 2018 Agricultural Resource Management Survey. “ARMS is USDA’s primary source of information on farm businesses and associated household principle operators,” Whitt said. “Principle operators are those who are most responsible for running the farm.” USDA defines a farm as anyplace that sold at least $1,000 worth of farm products in a given year. “The farm sector consists of a wide variety of farms — very small farms with little sales, mid-size farms with hundreds of thousands of dollars worth of sales and large farms with millions of dollars of sales,” Whitt said. “A family farm is any farm where more than 50% of the business is owned and operated by an operator and individuals related to one operator,” Whitt said. “The majority of farms are small family farms, but largescale farms have the largest share of the value of production,” Whitt said. “Small farms represent 90% of all farms, 48% of acres operated and 21% of production where as large-scale family farms represent 2.7% of farms, but account for the largest share of production at 45.4% on 19.5% total acres operated.” See FAMILY, Page A4
SEE SECTION B
INSIDE
IFB president urges no vote on tax issue A3 Healthy solution to New Year’s resolution C5 Analyst: Time to be bold in markets D6 AgriTrucker D1
Farms For Sale C1
Antiques C4
Gardening B6
Auction Calendar B1
Health C5 Kitchen Diva C5
Business D5
Livestock D2
Calendar B8
Opinion D7
Classifieds C3
Weather A6
Vol. 42 No. 44
CONTACT AGRINEWS: 800-426-9438
By Jeannine Otto
AGRINEWS PUBLICATIONS
AGRINEWS PHOTO/TOM C. DORAN
Long days turned to long nights as farmers tried to harvest their 2019 crops during small windows of opportunities. This photo was taken recently from the cab of a combine.
Growth in demand as exports rebound By Tom C. Doran
AGRINEWS PUBLICATIONS
EAST PEORIA, Ill. — A University of Illinois agricultural economist foresees lower yields and a bit stronger demand on his corn balance sheet for the current marketing year. Todd Hubbs compared his estimates during the Illinois Farm Economics Summit Dec. 18 to those released early this month by the U.S. Department of Agriculture. “A big uncertainty is the size of the 2019 corn crop. Right now, USDA has yield at 167 bushels per acre which is slightly below long-term trend. If we actually did 167, that’s quite impressive considering the year we had. I’m still lower than 165.3. There’s still a lot of corn standing out there in the Dakotas,” Hubbs said. “From what I’ve heard, corn planted in early June was slightly better than what most people expected. A significant amount of corn was
planted after June 10 and I’ve only heard a couple of reports and it was not pretty — low test weight, high moisture, high damage. So, that stuff coming out of the Dakotas may be No. 3 corn and we’re going to have to blend that stuff. The market for good quality corn here in the eastern Corn Belt and across the Corn Belt could be pretty good. So, we’ll see what this yield ends up being.” EXPORT OPTIMISM Hubbs is optimistic on feed and residual, “and I’m a little bit more optimistic on exports and that’s before any China deal,” he said. USDA has feed and residual at 5.275 billion bushels, and Hubbs’ estimate came in at 5.3 billon bushels. The USDA projects corn exports at 1.85 billion bushels, while Hubbs pegs it at 1.865 billion bushels. “There are a lot of cattle in lots. There are a lot of hogs on the ground. We’ve seen broiler
production running up week over week, all in expectation of these China markets. On top of that, we had weak ethanol production through the first two months of the marketing year, so you figure there is less distillers’ grain out there to move into the ration,” Hubbs said. “So, I think we might see a pretty strong corn use for feed in the first quarter. The only problem is we had so much corn still out in the field when they started doing the tabulations that they have to make an estimate of bin-worthy corn. So, we might not actually see this feed and residual number until later in the marketing year. We may see another surprise.” Corn exports got off to a poor start early in the 20192020 marketing year, including some of the lowest September and October exports numbers in a decade. It has since picked up. See GROWTH, Page A4
EAST PEORIA, Ill. — A decline in soybean production due to delayed or canceled planting came at just the right time from a balance sheet perspective. “Thankfully, we had a 12 million harvested soybean acres drop because we didn’t need it,” Todd Hubbs, University of Illinois agricultural economist, said at the Dec. 18 Illinois Farm Economics Summit. U.S. soybean ending stocks continued a five-year pattern of growth from a low of 191 million bushels in the 20142015 marketing year to 913 million estimated for 20182019. “Luckily, we didn’t end up with over 1 billion bushels ending stocks. What we’re looking at right now is a really strong crush, good export numbers, and we’re still open on these production numbers,” Hubbs added. On the 2019-2020 production side, the U.S. Department of Agriculture earlier this month plugged in a 46.9 bushels per acre national yield average for projected production of 3.55 billion bushels.
Todd Hubbs, University of Illinois agricultural economist, speaks at the Illinois Farm Economics Summit. Hubbs’ balance sheet used an average yield of 45.8 bushels per acre resulting in production of 3.453 billion bushels. “Much like corn, I hear the same kind of stuff for soybeans. We planted a lot of soybeans so late. They were a little bit better in Illinois than I think a lot of people thought we were going to get on yields. We’ll see what happens out in the western Corn Belt. Acreage was down significantly,” Hubbs said.
‘We’ve got to take the aid’: farmer By Jeannine Otto
AGRINEWS PUBLICATIONS
RISING CRUSH On the usage side of the soybean balance sheet, crush is forecast to continue on a rising trend. The forecast was also strengthened by the move by U.S. legislators last week to amend the government spending bill to extend a tax credit for the biodiesel industry through 2022 retroactively to its 2018 expiration date. Crush has increased by 1.873 billion bushels in 20142015 to an estimated 2.092 billion in 2018-2019. “We have really strong soy oil prices. Soybean meal prices have gotten a little bit stronger. Meal prices had been quite weak considering the amount of livestock we were doing,” Hubbs said. “Crush is estimated at 2.105 billion bushels for 2019-2020. The November crush report was a little bit lower than the trade expected, but still we only need to do about 165 million bushels a month to hit 2.105 billion and that’s the pace we’re on. I think this number is pretty safe, 5 or 10 million one way or the other.” The ongoing problem in the soybean complex is exports. See WAR, Page A4
See FARMER, Page A4
Trade war creates uncertainty AGRINEWS PUBLICATIONS
See USMCA, Page A4
CHICAGO — In addition to his self-described roles as a cash grain and livestock farmer, Cass County farmer Steve Turner can add “poet.” Turner stood to address Steve Censky, the U.S. deputy secretary of agriculture, at the Illinois Farm Bureau annual meeting in Chicago, during a question-and-answer session following Censky’s address to the IFB delegates. Censky discussed the progress made on a trade deal with China that would hopefully end or start to end the trade war that has cost U.S. farmers money. “Illinois farmers have been the top recipients, the top state of the MFP payments of all the states. That is owing to the rich, productive history that you have, the value that you have of production and the fact that your commodities have been very much targeted by China for unfair retaliation,” Censky said. To alleviate the financial hardships, the U.S. Department of Agriculture announced in August 2018 the details of the relief package for U.S. farmers impacted by the reduction of agricultural trade to China. One major part of that aid package has been the Market Facilitation Program. The second round of payments for 2019 was mailed shortly before Thanksgiving. Turner emphasized the need to continue the MFP payments, even if an agreement is reached with China.
2020 OUTLOOK: SOYBEANS
By Tom C. Doran
CHICAGO — Even though he didn’t plan it that way, Steve Censky’s timing was perfect. The U.S. deputy secretary of agriculture walked into the hall at the Palmer House Hilton hotel i n Ch icago w it h go o d news on the trade front. Just hours before Censky spoke to delegates from the Illinois Farm Bureau gathered for their annual meet- Censky ing, Richard Trumka, president of the AFLCIO, confirmed that a deal was reached on the United StatesMexico-Canada Agreement. Trumka’s announcement signaled that U.S. labor groups had given the thumbs up to the agreement that, once passed by the House and Senate and signed by President Donald Trump, will replace the North American Free Trade Agreement. “I think that is very good news for agriculture that we get this passed. We need to keep up the pressure. We’re not done yet, so let’s keep it up and let’s get that over the hump,” Censky said.