6 years, 8 months ago AFBF
USDA WASDE Report Released
Wheat: Projected 2017/18 U.S. wheat supplies are decreased this month on lower production, down 21 million bushels to just over 1.7 billion bushels. The August NASS production forecasts for durum and other spring wheat indicated a significant decline compared to last year, primarily due to continued severe drought conditions affecting the Northern Plains. Partially offsetting this decrease is higher winter wheat production. Global 2017/18 wheat supplies increased significantly, primarily on an 8.6-million-ton production increase in the Former Soviet Union (FSU). Russian production is a record 77.5 million tons, surpassing last year’s record by 5.0 million.
Coarse Grains: This month’s 2017/18 U.S. corn outlook is for lower supplies, reduced feed and residual use and exports, and a decline in ending stocks. Corn production is forecast at 14.2 billion bushels, down 102 million from the July projection. The season’s first survey-based corn yield forecast, at 169.5 bushels per acre, is 1.2 bushels lower than last month’s trend-based projection.
Sorghum production is forecast 13 million bushels higher with the forecast yield 2.6 bushels per acre above last month’s projection.
Exports are forecast down 25 million bushels, reflecting the increased competitiveness of supplies in Argentina and Brazil and the low level of new-crop outstanding sales. This month’s 2017/18 foreign coarse grain outlook is for virtually unchanged production, lower trade, and greater stocks relative to last month.
Soybeans: U.S. oilseed production for 2017/18 is projected at 130.9 million tons, up 3.9 million from last month mainly due to higher soybean production. Soybean production is forecast at 4,381 million bushels, up 121 million on higher yields. Harvested area is forecast at 88.7 million acres, unchanged from July. The first survey-based soybean yield forecast of 49.4 bushels per acre is 1.4 bushels above last month but 2.7 below last year’s record.
Global oilseed production for 2017/18 is projected at 576.7 million tons, up 2.8 million, mainly on a 2.3-million-ton increase for soybean production. Global soybean exports for 2017/18 are up 1.5 million tons as higher U.S. exports are partly offset by lower Argentina shipments.
Rice: Total U.S. rice supplies are lowered 5.0 million hundred weight from last month due to a smaller crop and a slight reduction in beginning stocks. The 2017/18 U.S. rice production forecast is lowered 4.8 million hundred weight to 186.5 million based on the first survey-based yield forecast of the 2017/18 season.
Sugar: U.S. beet sugar production for the 2017/18 August-July crop year is increased by 89,500 short tons, raw value to 5.131 million based on area and sugarbeet yield forecasts made by NASS in Crop Production report. Early-season production occurring in August and September is projected to constitute 10.7 percent of the total.
Cotton: The first survey of U.S. 2017 crop production indicates a crop of 20.5 million bales, 1.5 million above last month and the largest production in 11 years. The larger crop is partially offset by lower beginning stocks which are reduced 400,000 bales to 2.8 million due to an increase in final 2016/17 exports.
Livestock, Poultry, and Dairy: The forecast for total meat production in 2017 is raised from last month, as increases in commercial beef and broiler production more than offset declines in pork and turkey production. The increase in beef production reflects relatively large cattle placements in the second quarter which will likely impact fourth quarter cattle slaughter. Second quarter broiler production is raised slightly based on June production data, but no change is made to the outlying quarters. Pork production is reduced on lower expected slaughter in the third quarter. Forecast turkey production is reduced on a slower-than-expected recovery in demand and relatively poor returns to producers. Egg production is increased modestly on recent hatchery data.
The milk production forecasts for 2017 and 2018 are reduced from the previous month as slow growth in milk per cow more than offsets increases in dairy cow numbers.
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USDA Forecasts Record-High Soybean Production
U.S. farmers are expected to produce a record-high soybean crop this year, according to the Crop Production report issued today by the USDA’s National Agricultural Statistics Service. Up 2 percent from 2016, soybean production is forecast at 4.38 billion bushels, while corn growers are expected to decrease their production by 7 percent from last year, forecast at 14.2 billion bushels.
Up 7 percent from last year, area for soybean harvest is forecast at a record 88.7 million acres with planted area for the nation estimated at a record-high 89.5 million acres, unchanged from the June estimate. Soybean yields are expected to average 49.4 bushels per acre, down 2.7 bushels from last year. Record soybean yields are expected in Delaware, Georgia, Kentucky, Missouri, Mississippi, Pennsylvania, and South Carolina.
Average corn yield is forecast at 169.5 bushels per acre, down 5.1 bushels from last year. If realized, this will be the third highest yield and production on record for the United States. NASS forecasts record-high yields in Alabama, Louisiana, Michigan, Mississippi, New York, Pennsylvania, and South Carolina. Acres planted to corn, at 90.9 million, remain unchanged from NASS’ previous estimate. As of July 30, 61 percent of this year’s corn crop was reported in good or excellent condition, 15 percentage points below the same time last year.
Wheat production is forecast at 1.74 billion bushels, down 25 percent from 2016. Growers are expected to produce 1.29 billion bushels of winter wheat this year, down 23 percent from last year. Durum wheat production is forecast at 50.5 million bushels, down 51 percent from last year. All other spring wheat production is forecast at 402 million bushels, down 25 percent from 2016. Based on August 1 conditions, the U.S. all wheat yield is forecast at 45.6 bushels per acre, down 7 bushels from last year. Today’s report also included the first production forecast for U.S. cotton. NASS forecasts all cotton production at 20.5 million 480-pound bales, up 20 percent from last year. Yield is expected to average a record-high 892 pounds per harvested acre, up 25 pounds from last year.
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Farm Economy May Be Starting to Stabilize
The prolonged downturn in the farm economy continued in the second quarter of 2017. However, data from the Kansas City Fed’s Survey on Agricultural Credit Conditions shows the farm economy may finally be starting to stabilize. While economic conditions did continue to weaken in the second quarter, the pace of that deterioration has slowed. While the farm loan repayment rate continued to decrease, the change from a year ago wasn’t as sharp as it’s been in recent years. 37 percent of bankers surveyed in the Tenth District reported a decrease in repayment rates from a year ago, which is the lowest rate since mid-2015. In a similar situation to credit conditions, farm sector income continued to weaken but not as rapidly as in recent years. Most Tenth District bankers expect the decline in farm income to be slower this year than in 2016. 85 percent of those same bankers say the decline in farm income continues to pressure economic activity in rural areas. Farmland values also continue to trend lower along with the decline in farm income. The value of cropland and ranch land continued to drop in the Tenth District for the sixth straight year.
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Farm Labor Shortage May Drive Produce Prices Higher
Adding guacamole to your favorite foods may soon become more expensive. Food and Wine Dot Com says a package of almonds may become pricier as well. As California farmers welcomed the end of a serious drought this spring, a serious labor shortage is becoming another issue to deal with. California is where the bulk of the nation’s produce is grown and there aren’t enough workers to harvest those crops. Immigrant labor makes up 90 percent of the nation’s workforce that picks American crops. The immigrant population has gotten smaller in recent years as the government deported three million undocumented immigrants between 2009 and 2016. A loss of enough potential employees could force farmers to leave between 15 and 20 percent of their crops in the ground. This means lower farm income as well as lower numbers of produce on grocery store shelves. Produce is more sensitive to price changes than other crops because it’s much harder to preserve, especially compared to commodities like corn and grain. California lettuce farmers were actually hit hard by those spring rains that ended the drought, accidentally drowning their lettuce crops. The only silver lining is vegetable prices haven’t risen significantly yet, even though fruit prices have.
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Farmers Still Support Trump but Worry Over Farm Bill
While some polls say President Trump’s support base has begun to slip, a new Farm Futures survey shows a majority of farmers (55 percent) would give Trump an A or B if they were to assign a grade to him on domestic issues. 26 percent would give him a C. The survey found that farmers seem to be mostly okay with Trump’s work on domestic issues. A slightly smaller number at 49 percent would give Trump an A or B on agricultural issues. The survey found producers seriously worried about the new farm bill. 76 percent are worried the new farm bill won’t provide an adequate safety net for their farms. 39 percent of farmers surveyed listed the new farm bill as their number one business priority. 23 percent listed tax reform as their number one priority while 12 percent listed cutting back on government spending, eight percent selected increasing infrastructure spending as their top priority, and regulatory reform was chosen by five percent of respondents. 58 percent of farmers don’t expect Congress to approve spending money for infrastructure improvements over the next year. 86 percent of farmers say the president’s attempts to decrease regulations are a good thing for their farms.
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SNAP Battle Top Obstacle for Farm Bill
House Ag Committee Ranking Member Collin Peterson says the biggest problem facing legislators as they write the new Farm Bill isn’t just funding. Peterson told sugar producers and processors this week that the biggest battle is over what to do with the Supplemental Nutrition Assistance Program. Peterson spoke to the International Sweetener Symposium in San Diego, pointing out that the Heritage Foundation is attacking SNAP, not just as a way to save money but a way to kill the farm bill. The Heritage Foundation says the farm bill is excessive government intervention. “They tell their members they’re trying to kill SNAP,” Peterson told the audience, “which they’ve been trying to do for twenty years. They’re really doing it to get rid of the Farm Bill.” Peterson adds that farm bill negotiators are going to have to work out new ways to support both the dairy and cotton industries. Peterson says, “Cotton farmers are going to have a new program or we won’t have a new Farm Bill.” He adds that the program will need significant money put into it.
