“Concerns over Russia’s grain prospects deepened as SovEcon warned that the depreciating rouble threatened hopes of strong spring sowings offsetting losses in the dryness-tested winter crop.
The influential analysis group warned that total grains output may fall below 90m tonnes, from the level of 103m-105m tonnes achieved this year.
The wheat harvest, which this year hit 58m-59m tonnes, may drop below 50m tonnes, SovEcon said.
The caution reflected the “extremely weak condition” of autumn-sown grains, which the Moscow-based group rated at 62 points on an index drawn from NDVI (normalized difference vegetation index) data, and where 100 points is the long-term average.
That is by far the lowest figure on ratings going back five years – which had never before dropped below 80 – and well below that in 2009, preceding a 33% slump in wheat production at harvest the following year.
‘Risk of increased winterkill’
The poor condition rating reflects a dearth of moisture, which has left crops in a poor state heading into winter, raising the prospect of large rates of freeze damage.
“A lack of moisture resulted in a very weak development of winter grains,” SovEcon said.
“Weak plants are less resistant to low temperatures thus the risk of increased winterkill losses is quite significant.”
Winterkill rates for Russia have ranged in recent seasons from some 2.5% in a “good” crop year to 12.6% in the winter of 2009-10, preceding the poor 2010 crop.”
“Apple producers in England are enjoying an exceptional apple harvest. The previous winter gave trees proper rest, and plenty of rain in August produced large, full apples. A dry September also helped pickers get out into orchards for early picking. One apple producer who has grown for decades could not recall a better growing year.
It all sounds too good to be true.
The trouble lies in a change in consumer tastes and a closed Russian border to EU produce. In addition, the weather for apple crops all over Europe has been very agreeable and the apple market is flooded.”
“There’s no question that much of the progress that farmers have made in the past five years has come from the quality of advice they have received.
It’s impossible to weave an accurate statistical story of the progress agriculture has made since the bull market began in 2007, but I’m convinced that most farmers have made prudent decisions of how to handle the returns from those years.
Most farmers have positioned themselves as well to be even more efficient in future. I know that some farmers have overinvested in machinery, and that this may come to haunt them. There will be others who have ignored the opportunity to pay down debt and have paid too much for land.
But by and large, farmers have made wise decisions in areas where they have expertise, or where they know how to assess the expertise of the people they are listening to. Farmers aren’t investing in just any machinery. They’re investing in the machinery that aligns with what they’re learning from agronomists, soil scientists and a host of others. Plus, I’m continually impressed at the increasing sophistication of farmers’ commodity marketing, based on their careful evaluation of the advice that is available from a growing number of sources.”
“The death of the family farm is widely bemoaned. Activists ask, ‘What do we really know about these corporations that produce our food?’
As it turns out, it’s the same question that many farmers are asking themselves, although in a very different context. How can I be sure that my farm corporation is the best design for my farm and my family? Can I really be sure its fine print isn’t hiding a time bomb that we’re going to deeply regret in future?
Canada’s 2011 Census of Agriculture clearly showed that family farm corporations are on the rise at the expense of sole proprietorships. However, the census also found that the trend is linked to gross farm receipts; the higher the receipts, the higher the rate of incorporation.
Many farmers have turned their operations into corporations as the next step in a natural progression that had already seen them evolve from sole proprietorships into partnerships, says Robert Berry, partner in the Miller Thomson law firm at Guelph, Ont.
In the past 25 years too, the rate of incorporation has been hastened by taxes, Berry says. ‘And transfer driven… but that’s also affected by tax.’
That isn’t to say accountants and succession planners suddenly discovered corporate advantages overnight. Berry says he has been helping a steady stream of clients incorporate for the last 20 years, so it hasn’t really been tied to the boom and bust cycles that come with fluctuating commodity markets.”
5. Other Interesting Links:
“LONDON, U.K. (Reuters) — Record wheat yields were recorded in Britain this year following a summer of near perfect growing conditions.
The National Farmers Union said its annual harvest survey indicated a wheat yield of 3.5 tonnes per acre, the highest ever and 16 percent higher than the previous season.
A crop of 16.67 million tonnes was projected based on area estimates for England, Scotland and Wales by Britain’s farm ministry and the Home-Grown Cereals Authority.
The crop estimate also assumes an unchanged area in Northern Ireland.
It would be the largest wheat crop since 2008, when Britain harvested a record 17.2 million tonnes.”
“Dry, warm weather has facilitated harvest progress during the past week with the exception of the Peace Region, where cool and damp weather continued to delay crop harvest. Provincially, 93 per cent of the crop is already in the bin, compared to 81 per cent a week ago (see Table 1), while five per cent is still in swath, and two per cent remain standing. Crop harvest is virtually complete in most areas, but lags behind in the Central and North West Regions, with 86 per cent and 89 per cent complete, respectively. Harvest in the Southern Region is 98 per cent complete, with one per cent in swath. The North East Region has 94 per cent of crops harvested and four per cent in swath. The Peace Region reported 92 per cent harvested and five per cent in swath.
Crops still in the field are mostly spring wheat, oats and barley. In most years, harvest in Alberta is complete by mid-October.
The condition of fall seeded crops are rated as 65 per cent good to excellent, while pasture is rated as 42 per cent good to excellent, both up two per cent from a week ago.
Provincially, soil moisture reserves overall have decreased eight per cent from last week and are rated as 60 per cent good to excellent, while sub-surface soil moisture reserves remain unchanged, and are rated as 58 per cent good to excellent (see Table 2).”
“October 16, 2014 – OMAFRA’s Mike Cowbrough, weed management field crops program lead, discusses what can be done to combat fleabane, which is popping up with glyphosate resistance in several Ontario counties.
If you traveled in southern Ontario this growing season it has not been hard to spot significant patches of Canada fleabane in soybean fields. Unfortunately there are 12 counties in Ontario with populations of this weed that are resistant to glyphosate.
To make matters worse the seed is highly mobile with a dispersal pattern similar to dandelion. How are we going to manage this? Below is a game plan wheat, soybean and corn based on the most recent Ontario research.
Quick biology facts
Recent research by Eric Tozzi and Rene Van Acker at the University of Guelph have shown that the majority of Canada fleabane plants germinate from mid August to mid November while a second germination window occurs from mid-May to mid-June. Fall emerging plants will rosette before overwintering, whereas spring germinated plants typically by-pass the formation of a rosette and go straight to bolting. Spring germinated plants will flower earlier than fall germinated plants. Seed can germinate in soils as low as 8 degrees Celsius but prefers soil temperatures at 14-15 degrees Celsius.
Control fall germinated rosettes either pre-plant or pre- wheat emergence with Eragon + Merge (glyphosate can be tank-mixed when applied pre-plant). In the spring, if fleabane rosettes have overwintered or spring seedlings have germinated then post -emergent applications of either 2,4-D Ester, Infinity or dichlorprop/2,4-D have all provided good control of Canada fleabane.Soybeans: Pre-plant control of this weed is critical since there is only one post-emergent herbicide option (FirstRate) and its control can be variable. The addition of either Eragon + Merge, Integrity + Merge, Amitrol 240, Broadstrike RC or 2,4D Ester to glyphosate has provided good control of Canada fleabane.Corn: Banvel II, Marksman and Distinct have been the most consistent herbicides at controlling heavy populations. Pardner + Aatrex 480, Peak Plus and Callisto + Aatrex 480 can provide control/suppression but have been less consistent. Most primary tillage operations ahead of planting corn will do a good job of eliminate seedling plants.
The use of cover crops, especially after wheat harvest will significantly reduce seed production of emerged plants and inhibit new seeds from germinating.”
“CropLine Podcast – Field crop specialists respond to current questions that grain and oilseed producers ask on crop management tips, herbicide recommendations and pest alerts. Click the link below to listen online.
Downloadable Audio (MP3 format)
Click Here To Listen To the Podcast October 21, 2014 – 16.6 MB
“Canola rose along with U.S. soybeans and corn on Thursday, supported by larger than expected U.S. soybean weekly exports.
U.S. soybeans were a better-than-expected 2.167 million tonnes. Corn export sales were 1.031 million tonnes, also above market expectations.
Canola showed signs of technical strength, prompting additional buying, but farmer selling held gains in check.
The Saskatchewan crop report said the province’s canola harvest is 97 percent complete.
Canola lagged the gains in soybeans, which rose more than three percent, with gains accelerating after it pushed past the 50 day-moving average.
Canola was up about one percent. Nearby soy oil rose 1.65 percent while soy meal rose 4.35 percent.
Soybean’s strength helped pull corn higher, climbing 1.9 percent in the nearby contract and corn’s rise helped nudge wheat higher, with all three U.S. contracts rising less than one percent.
Grains in wheat were limited by word from Argentina that the government has authorized additional exports of 400,000 tonnes. The expanded quota might be in response to ideas that neighbouring Brazil will need to import more wheat because of quality problems.”
“Soybeans regained $10 a bushel, temporarily, as grain and oilseed futures looked to end a strong week on a firm note.
The early part of the market’s October rally was largely about corn, fuelled by the slow US harvest, which has limited pressure from ramped-up supplies, and its entrance into areas where yields have just been strong rather than the outstanding initial results further south.
And corn, up a further 0.4% to $3.61 a bushel for December delivery, as of 09:25 UK time (03:25 Chicago time) remains the biggest gainer of the month, at nearly 13%.
But soybeans, which for November touched $10.00 ¼ a bushel earlier, getting to $10 a bushel for the first time for the contract in seven weeks, are catching up.
Even after a retreat back to $9.95 a bushel, limiting their gains for Friday to 0.2%, they are up 9% for the month.”
“CNS Canada — Soybean and corn futures at the Chicago Board of Trade (CBOT) moved higher during the week ended Wednesday, as rainfall over parts of the U.S. Midwest caused harvest delays.
‘The lows were put in at the beginning of October, and we’ve seen a nice rally off of that,’ said market analyst Bryan Strommen of Progressive Ag at Fargo, N.D. He said the slow harvest pace was a primary driver for the move higher in the futures.
The U.S. corn harvest was only 33 per cent complete as of Sunday, well below the five-year average of just over half done by this time of year. Meanwhile, the soybean harvest would normally be 66 per cent complete, but was only 53 per cent done in the latest weekly report.
Most of the soybeans and corn that have been harvested are going into farmer bins, rather than to the commercial pipeline, Strommen added.
That lack of farmer selling contributed to nearby firmness in futures, but he cautioned that grain will soon start moving as the harvest moves forward and farmers run out of room.
Warmer and drier conditions are in the forecasts through to the end of October, which should allow the harvest pressure to pick up, he said.”
“Chicago | Reuters — U.S. soybean futures rallied more than three per cent to a five-week high on Thursday on robust export demand and tight cash market supplies, with late-session technical buying adding to gains.
Corn futures gained nearly two per cent and wheat climbed to a 1-1/2 month high on spillover strength from soybeans.
‘There’s some renewed excitement in soybeans after the weekly sales report. There’s also some building concern that USDA may be lowering ending stocks in next month’s report, raising exports and crush,’ said Rich Nelson, chief strategist with consultancy Allendale Inc.
Gains were kept somewhat in check by forecasts for mostly dry weather across the U.S. Midwest that will allow for a pickup in the harvest pace of both corn and soybeans and flood cash market dealers with much-needed supplies.
Both corn and soybeans had drawn support earlier in the week after the U.S. Department of Agriculture (USDA) confirmed that the progress of the harvest was behind previous years.”
5. MARKET CHARTS
• Country Guide – Markets
- ICE – Canola breaks above resistance
“As the main grains producer of Brazil, Mato Grosso state topped the application of agrochemicals on soybeans, corn, sugarcane, citrus, cotton, and rice. According to Sindiveg, the volume of agrochemicals sold in the state was 167,000 tons, totaling $2.15 billion.
Throughout Brazil, 884,138 tons of commercial products were traded in 2013, totaling $11.4 billion. The state of São Paulo accounted for 14.5% of the total consumption, followed by Paraná (14.3%), Rio Grande do Sul (10.8%) and Goiás (8.8%). The application of these products of the productive chain already represents 15 to 30% of the total production cost.
According to projections of the Ministry of Agriculture for the 2020/2021 crop season, the commodities production for exports should increase in proportions of 55% for soybeans, 56.5% for corn and 45.8% for sugar. As they are chemical-dependent monoculture, the current trend of consumption should increase.”
“INDIANAPOLIS, Ind. – Earlier this morning, Oct. 22, 2014, The Dow Chemical Company, parent company of Dow AgroSciences, announced its third quarter (Q3) 2014 earnings. Below you will see information on Dow AgroSciences (referred to as Agricultural Sciences). The entire Dow earnings release can be found here:
Agricultural Sciences reported third quarter sales of $1.4 billion, flat versus the year-ago period. On a year-to-date basis, the segment reported record sales of $5.4 billion.
Crop Protection sales declined 1 percent versus the same quarter last year, due to softening market conditions in North America. Year to date, sales of new crop protection products were up 18 percent, led by Isoclast active insecticide.
Seeds delivered 5 percent sales gains versus the year-ago period, representing a record third quarter, led by soybeans and sunflower growth in North America and Latin America.
Equity earnings for the segment were $1 million. This compares with $3 million in the year-ago period. The segment reported EBITDA of $5 million, down from $18 million in the same quarter last year. Third quarter EBITDA margins reflect the impact of softer market conditions in a seasonally weak quarter weighing down Crop Protection results, coupled with increased spending on growth initiatives.
Source: Dow AgroSciences”
“(Yuma, Arizona – October 21, 2014) Gowan Company, LLC and Azul Natural SA de CV signed a distribution agreement whereby Azul Natural assigns Gowan and its affiliates as their exclusive worldwide partner for development, registration, marketing and distribution.
Gowan’s partnership with Azul Natural is one more step in the evolution of Gowan’s product portfolio and continuing efforts to provide crop protection solutions that are both efficacious and meet market and regulatory demands. ‘Our goal is to take advantage of the creativity and in-depth research capabilities demonstrated by Azul Natural in the development of microbiological and biochemical based products. Azul Natural’s existing products as well as their well-populated pipeline will enrich our portfolio and enhance our efforts towards more effective offerings to farmers around the world’ Sandra Alcaraz, Disruptive Technology Manager said.
‘The alliance with Gowan is a big step for our company as we share the same philosophy of service, solutions and commitment to the field. This is a great opportunity to get our products to a worldwide level taking full advantage of the broad dealer network and exceptional customer service that characterizes Gowan’ said Jesus Alejandro Dominguez, Owner and CEO of Azul Natural”
“Reuters — A coalition of U.S. farmer and environmental groups filed a lawsuit Wednesday seeking to overturn regulatory approval granted last week for an herbicide developed by Dow AgroSciences.
The lawsuit, filed in the U.S. Court of Appeals for the Ninth Circuit in California, argues that the Environmental Protection Agency (EPA) did not adequately analyze the impact of one of the new herbicide’s active ingredients, 2,4-D, before granting approval on Oct. 15 to Dow’s Enlist Duo herbicide.
The groups are asking the court to set aside the EPA’s approval.
Widespread use of 2,4-D carries a range of risks to human health, animals, and the environment, the groups allege. They claim the EPA’s approval violated both the Endangered Species Act and the Federal Insecticide, Fungicide, and Rodenticide Act.”
The legal buzzards are circling over at EPA. Not good.
5. Valent U.S.A. Corporation and MGK Enter Into Marketing Agreement to Grow Sustainable Agriculture Brands Across U.S.
“WALNUT CREEK, CALIF., October 23, 2014 – Valent U.S.A. Corporation (Valent) announced today an agreement with Minneapolis-based MGK to manage the marketing and sales of MGK’s crop protection line of insect control products within the United States beginning April 1, 2015.
The addition of the innovative organic and sustainable product line from MGK into the Valent portfolio will create an unprecedented mix of unique and valuable chemistries for managing both organic and sustainable agriculture.
‘We are pleased to bring this line of quality products into our rapidly expanding agricultural portfolio’ said Valent Executive Vice President and Chief Operating Officer Matt Plitt. ‘The addition of MGK’s crop protection products will enhance the scope of the value-based solutions Valent currently provides our customers in organic production, as well as growth opportunities in our conventional crop solutions category. MGK insect control products are complementary and will be sold in an integrated approach along with Valent’s existing crop protection portfolio.’
MGK products control a broad spectrum of insects on a wide variety of agricultural crops. Key OMRI listed brands include PyGanic®, one of the most widely-used botanical-based insecticides in the agriculture market; Azera®, a premium product for organic control of hard- and soft-bodied insects; and Veratran D®, the only EPA-registered product with sabadilla as an active ingredient. The MGK portfolio also includes sustainable brands such as Tersus™, a unique solution for pre-harvest use on export specialty crops and EverGreen® 60-6, a fast-killing insecticide with no pre-harvest interval.
MGK President Steve Gullickson said, ‘This agreement with Valent will capture synergies between MGK and the Sumitomo Chemical Company, which includes Valent U.S.A, Valent BioSciences Corporation, and the world-wide Sumitomo Chemical affiliates.’
MGK, an insect control product development company in business since 1902, became a consolidated subsidiary of Sumitomo Chemical in December 2012, when Sumitomo acquired a majority stake in MGK. MGK and Sumitomo have enjoyed a strong relationship in the US market for many years and a formal relationship through a distribution agreement since 1989. This agreement with Valent is the first collaboration in the crop protection market.
MGK will continue to manufacture their products, provide regulatory support for the active ingredients and collaborate with Valent on developmental projects. The companies are working together to ensure a smooth business transition for customers, as well as to build upon the outstanding customer service model of Valent, with seamless integration.”
“Heavy rains in Florida and an early end to California deals should keep tomato markets very strong heading into the holidays.
Prices for rounds, vine-ripes and romas should stay high into November, said Joe Bernardi, president of Nogales, Ariz.-based Bernardi & Associates.
‘The deal is strong across the board,’ Bernardi said Oct. 14.
Bob Spencer, vice president and sales manager of Palmetto, Fla.-based West Coast Tomato Inc., agreed. He said he expected brisk movement when the Palmetto/Ruskin area begins shipping about Oct. 28.
‘Demand should be great. Some other deals around the country have been light, some have ended early and on some quality has been a little bit of a problem. It should be a good market to start.’”
“Pennsylvania apple volumes were above preseason predictions as of early October, but New York volumes were lower than expected.
As of Oct. 9, volumes were running about 10-15% higher than both preseason estimates and last year’s numbers for Rice Fruit Co., Gardners, Pa., said John Rice, the company’s vice president.
If that holds true for the balance of harvest, Rice Fruit will ship record volumes this year, Rice said. “It’s put us under a little pressure to find extra storage space. Fortunately, we had record movement for the month of September. I think we’ll get through harvest in good shape.”
In New York, however, as of Oct. 9 it wasn’t looking like volumes would reach pre-season predictions, said Jim Allen, president of the Fishers-based New York Apple Association. Part of that can be traced to a typical decline following a big year, which New York saw in 2013-14, with about 33 million cartons shipped, Allen said.
The other reason is likely extreme cold last winter that caused bud damage. When growers made pre-season estimates, he said, they may have underestimated the effect of the cold.
“The first official season forecast for Florida citrus shows slight declines in navel oranges, grapefruit and tangerines, but valencias are expected to increase the Sunshine State’s total orange production.
According to the U.S. Department of Agriculture’s Oct. 10 report, Florida growers expect to harvest 1.5 million equivalent cartons of navels, down 22% from 1.9 million cartons last season. If realized, the navel forecast could be the lowest since the USDA began forecasting navels as a separate variety.
Production of valencias, which ship 97% processed, is up 9% while overall Florida citrus production is expected to increase 3% from the 2013-14 season’s 104.8 million cartons to 108 million cartons expected for 2014-15.
For grapefruit, total Florida production is forecast at 15 million cartons, down 4% from 15.7 million cartons last year.
Both white and red varieties saw 4% declines from the previous season.
4. FarmPolicy » Blog Archives » Regulations; Policy Issues; Ag Economy; Biotech; and, Political Notes- Friday
“Tim Devaney reported yesterday at The Hill Online that, ‘The Environmental Protection Agency’s (EPA) water rule passed a crucial test Thursday, gaining the approval of the agency’s internal review board.
‘The EPA’s Science Advisory Board noted in a peer review of the rule that there is ‘strong scientific support’ for the agency’s proposed Waters of the U.S. regulation.’
The Hill article noted that, ‘The EPA is proposing to expand its jurisdiction to include small rivers and streams that flow into larger sources of water.”
Chris Clayton reported yesterday at DTN (link requires subscription) that, “Supporters of country-of-origin labeling for meat called on the Obama administration to appeal this week’s World Trade Organization ruling as advocates for the law argue public support is there to keep it.
“Roger Johnson, president of the National Farmer Union, stressed Thursday that COOL has been an important issue for his members going back decades. NFU was instrumental in getting COOL in the 2002 farm bill and has carried the flag for COOL ever since.”
The DTN article noted that, “The WTO ruling reiterated that the U.S. can have a country-of-origin labeling law, but the USDA rule still treats imported Canadian and Mexican livestock less favorably than domestic livestock and actually increases the ‘detrimental impact on the competitive opportunities’ for both Canadian and Mexican livestock.
Jacob Bunge and Don Curren reported yesterday at The Wall Street Journal Online that, “Potash Corp. of Saskatchewan Inc. expects global demand for potash fertilizer to hold steady with this year’s level, despite sliding crop prices that are expected to crimp farmers’ incomes, executives said Thursday.
“Growing demand in Asian countries such as China and India will offset flat to lower sales in North and South America and Europe, helping insulate the fertilizer industry from declining agricultural commodity markets, said Potash Corp. Chief Executive Jochen Tilk.”
Andrew C. Revkin indicated yesterday at The New York Times Online (“Can Genetics and Breeding Do for Cassava What They’ve Done For Corn?”) that, “Bill Gates spends a lot of his time probing the minds and work of researchers and analysts trying to solve the world’s biggest problems. The results often end up on his GatesNotes blog. His new post focuses on the plant genetics research of Edward S. Buckler, a U.S. Department of Agriculture researcher at Cornell.”
Yesterday’s update added that, “Gates’s post focuses on efforts by Buckler and others to do for cassava, a keystone crop in tropical Africa, what’s been done for corn. (Cassava, originally from Brazil, is also known as manioc and tapioca.)”
“Emma Dumain and Matt Fuller reported yesterday at Roll Call Online that, “Every two years, after the Election Day dust settles, members return to Capitol Hill for a lame-duck session that includes the selection of colleagues to serve as senior lawmakers on the chamber’s standing committees during the new Congress.”
With respect to the Ag Committee, the article noted that, “With [Frank Lucas] of Oklahoma ending his six-year run as chairman, lawmakers and aides expect K. Michael Conaway of Texas to be his replacement. Conaway isn’t the most senior member on the panel, but he’s the biggest team player of the four members ahead of him (plus, Robert W. Goodlatte of Virginia is already the chairman on Judiciary). Conaway will likely have backing from Boehner, who appointed Conaway in 2012 to lead the Ethics Committee.”