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FOCUS ON AG

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    The “FOCUS ON AG” column is sent out weekly via e-mail to all interested parties. The column features timely information on farm management, marketing, farm programs, crop insurance, crop and livestock production, and other timely topics. Previous “FOCUS ON AG columns are available on the MinnStar Bank website at: https://www.minnstarbank.com/category/focus-on-ag/ or the MinnStar Bank Facebook page at: https://www.facebook.com/MinnStarBankNA/ Selected copies of the “FOCUS ON AG” column are also available on “The FARMER” magazine web site at: https://www.farmprogress.com/focus-ag
    For more information on items in the “FOCUS ON AG” column, feel free to contact me. Thanks and have a great day ! Kent Thiesse

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RIBBON  CUTTING  FOR  4-H  AUCTION  CHAMPION  ROW  ON  AUGUST 27

8/24/2022

 

​A ribbon cutting ceremony for the new “Champion Row” display at the Minnesota State Fair will be held on Saturday, August 27 at 12 pm in the center of the large cattle barn on the fairgrounds. The new and impressive Champion Row display will be on display throughout the Minnesota State Fair on August 25 through September 5. The Champion Row display will include the grand champion 4-H market livestock exhibits that are selected during the first weekend of the State Fair and will highlight the many supporters of the "4-H Purple Ribbon Livestock Auction" at the State Fair. The 4-H Purple Ribbon Auction will be held on Saturday, August 27, at 5:45 PM, in Compeer Arena on the State Fairgrounds. The premiums on 115 purple ribbon 4-H exhibits will be sold in the 4-H auction. In addition, 4-H Auction scholarships totaling over $115,000.00 will be presented to 53 outstanding junior leaders in the 4-H animal science program, beginning at 5 pm, just prior the 2022 4-H Purple Ribbon Auction. Twenty percent of the 4-H Auction proceeds are used to help fund the scholarships and for special 4-H livestock programs across Minnesota throughout the year. The Minnesota Livestock Breeders Association (MLBA) have sponsored the 4-H Auction since 1980. For more information on the “4-H Purple Ribbon 4-H Livestock Auction” and the 4-H scholarship program, please refer to the following web site:  https://www.mlbapurpleribbonauction.org/
 
Over 2,500 4-H members will be exhibiting beef, dairy, swine, sheep, poultry, rabbits, dairy goats, and llamas at the 2022 Minnesota State Fair on August 24-28. For a complete schedule of 4-H livestock show times and other special activities during the 4-H livestock shows, please refer to the State Fair 4-H web site at: https://extension.umn.edu/4-h-events/4-h-minnesota-state-fair
 
For More Information Contact:   Kent Thiesse                                Blaire Hueneke
                                                         4-H Auction Finance Chair        MN State Fair Communications Dept.
                                                         (507-381-7960)                             (651) 343-3060
 

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KEY  AG  POLICY  ISSUES  BEING  ANALYZED

8/24/2022

 

For several years, Farmfest has been a major event for discussing key issues affecting farm families, the ag industry and rural communities in Minnesota and the Midwest. Many of these same issues will likely frame the discussions on ag and rural policy issues in Washington, DC in the next couple of years. In addition to bringing together numerous ag and rural leaders, this year’s Farmfest also featured a Minnesota Governor Candidates Forum and two Congressional Candidate Forums, with all major candidates participating. This allowed for some lively discussion and perspectives on many of the key issues affecting agriculture and rural communities.
 
Following are some of the main issues that were discussed during the Farmfest forums this year:
Developing the Next Farm Bill --- Congressional discussions on the next Farm Bill began earlier this year and will likely continue into 2023. The current Farm Bill expires on September 30, 2023, so the current farm programs will still be in place for the 2023 crop year. The key messages that surfaced related to the next Farm Bill from agricultural leaders, as well as from some of the candidates for Congress that were at Farmfest, included: Ø  Protect the Federal crop insurance program as the corner-stone risk management tool for farm operators, and do not make large adjustments to the program. Some key questions with the crop insurance program are how to provide insurance for newer crops and when utilizing cover crops. Some groups would like to limit crop insurance benefits based on farm size; however, most ag groups oppose this idea. There was also discussion of modernizing a risk management program for livestock producers that is similar to the crop insurance program.
Update the crop provisions (PLC and ARC-CO) in the Commodity Title of the Farm Bill to address the rising crop input costs, and to more closely match today’s market prices for various crops. This could involve increasing crop reference prices and loan rates, as well as making adjustments to the ARC-CO program payment formula. There was also some discussion about the need to make some adjustments in the Dairy Margin Protection program and the dairy support price formula.
It will be interesting how the proposed provisions for “climate-smart” agriculture that are included in the large “Inflation Reduction Act”, which was signed into law, get rolled into the next Farm Bill.  The legislation calls for a rather large expansion the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP), which are currently covered in the Farm Bill under the Conservation Title. There will also likely be considerable discussion regarding the expansion of the maximum Conservation Reserve Program (CRP) acres beyond the current maximum of 27 million acres, as well as increasing the maximum annual rental rates for CRP acres in order incentivize greater enrollment into the CRP program.
Some concern was raised about the overall cost of the wide range of programs covered by the Farm Bill legislation, especially the rapidly rising costs of programs under the Nutrition Title. However, most participants in the Farmfest forums felt that the Farm Bill should continue to be a “food and agriculture security program” and that the Nutrition Title should remain included in the legislation. 
 
In addition to farm programs, crop insurance, conservation programs, and the food assistance programs, the Farm Bill also provides provisions and funding for many rural development and low interest loan programs that benefit communities and small businesses, provides support for renewable energy, and provides funding for ag research and extension education efforts at land-grant universities. When a Farm Bill is passed by Congress, it is typically one of the most comprehensive pieces of legislation that is approved on a regular basis. Provisions contained in the Farm Bill affect every State in the U.S. and impact every congressional district in the U.S. Congress. 
Climate-Smart Agriculture --- The recently passed $739 billion “Inflation Reduction Act” was widely discussed at the candidate forums, with some panel members touting the benefits to farmers and residents of rural areas, while others on the panel questioned the “high price tag” of the legislation. The core spending in the legislation (approx. $369 billion) will be targeted toward enhancing electric vehicles, expanding renewable energy, and reducing carbon emissions by utilizing a series of tax incentives. The legislation would provide $20 billion for so-called “climate-smart agriculture” practices, by providing incentives to farm operators to implement farming practices through existing EQIP, CSP and regional conservation partnerships.  
Renewable Energy --- Future energy policy in the United States and in Minnesota received considerable discussion and debate during the forums, including the promotion of electric vehicles and the clean fuel standards that were adopted in California. The biggest issue affecting farmers and rural communities surrounded the role of ethanol and biodiesel in future energy policy. After passage of the Inflation Reduction Act, there is considerable anticipation around the development of renewable diesel from soybeans and the potential use of ethanol blends for sustainable aviation fuel (SAF), as well as for the added incentives to offer higher ethanol blends at gasoline pumps across the U.S.  
Rising Input Costs --- A major discussion item at Farmfest was the rapidly rising input costs for crop and livestock production. Production expenses for fertilizer, chemicals, fuel, labor, repairs, and livestock feed have risen sharply in the past twelve months, which has some producers and analysts concerned about profit margins as we look ahead to 2023. In addition, land rental rates went up significantly for 2022 and are expected to increase again in 2023 in most areas. Interest rates on farm operating loans have increased by 2-3 percent in the past six months in most locations, due to the increases in the prime lending rate by the U.S. Federal Reserve. Farm operators have had some favorable market prices in 2021 and 2022, which resulted in favorable profit levels. However, there is concern as to whether market prices will continue at a level to support the higher input costs for 2023, in order to maintain farm-level profitability  
Livestock Related Issues --- There were many issues affecting the livestock industry that were surfaced during the Farmfest forums. Efforts by the USDA, State Agriculture Departments, and the livestock industry to manage the outbreak of pandemic livestock diseases was a major discussion topic. Earlier this year, we have had the second major outbreak in recent years of avian influenza (HPAI) in the Upper Midwest, resulting in the loss of millions of birds and causing significant financial impact to poultry producers. The pork industry is very concerned about the presence of African Swine Fever (AFS) disease in the western Hemisphere and the protocols that are in place should AFS disease reach the U.S. border. Pork producers are also being challenged by the implementation of “Proposition 12”, which would require expensive updates to pork operations in order for the pork produced in the Midwest to be sold in California. Beef producers are concerned with the worsening drought situation in many cow/calf production areas of the U.S., as well as monitoring the Congressional and Department of Justice investigations into the beef processing industry. There was also a lot of discussion about providing the financial resources and necessary workforce for the expansion of local meat processing plants.  
There were numerous other issues and topics that impact farmers and rural residents of the Upper Midwest that were surfaced during the forums. These topics included carbon sequestration, rural health care, labor shortages, farm transitions, increasing broadband coverage, infrastructure needs, and expansion of ag education opportunities. These topics and more will likely lead to important policy discussions as we head into the mid-term elections this Fall and will drive future policy debates in Congress and at the State legislative level.

Note --- For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,
              MinnStar Bank, Lake Crystal, MN.  (Phone --- (507) 381-7960) 
              E-mail --- kent.thiesse@minnstarbank.com)  Web Site --- http://www.minnstarbank.com/

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2022 MN State Fair 4-H Purple Ribbon auction, State Fair 4-H Beef Show

8/17/2022

 
STATE  FAIR  PURPLE  RIBBON  4-H  AUCTION  ON  AUGUST 27
2022 will mark the 43rd anniversary of the "4-H Purple Ribbon Livestock Auction" at the Minnesota State Fair. The 4-H Purple Ribbon Auction and Scholarship program will be held on Saturday, August 27, at 5:00 PM, in Compeer Arena at the State Fairgrounds. The premiums on approximately 115 purple ribbon 4-H exhibits will be sold in the livestock auction. 4-H Auction scholarships totaling over $115,000.00 will be presented to 53 outstanding junior leaders in the 4-H animal science program during the 2022 4-H Purple Ribbon Auction. Twenty percent of the 4-H Auction proceeds are used to help fund the scholarships and for special 4-H livestock programs across Minnesota throughout the year. The 4-H Auction is sponsored by the Minnesota Livestock Breeders Association (MLBA). For more information on the “4-H Purple Ribbon 4-H Livestock Auction” and the 4-H scholarship program, please refer to the following web site:  https://www.mlbapurpleribbonauction.org/

4-H  BEEF  CHAMPIONSHIP  SCHEDULED  FOR  AUGUST 26
The "4-H Beef Championship Event" will be held at the Minnesota State Fair on Friday, August 26, at 2:00 PM in the Coliseum, at the State Fairgrounds in St. Paul. The Championship Event this year will include the selection of the Grand and Reserve Champion Market Beef, Dairy Steer, Breeding Heifer, Cow/ Calf Pair, and Prospect Market Calf from the 4-H beef exhibits at the 2022 State Fair. The event will also include the selection of the “Top 5” Overall Breeding Heifers, “Top 5 Market Beef”, “Top 3 Cow/Calf Pairs”, and “Top 3 Dairy Steers”. 4-H Beef Interview Champions and MN State Fair Youth Scholarship recipients will also be recognized during this event. The Championship Event will represent the "best of the best" from the nearly 600 4-H members that will be exhibiting 4-H beef projects at the 2022 Minnesota State Fair, according to Kent Thiesse, 4-H Beef Show Coordinator.
Over 2,500 4-H members will be exhibiting beef, dairy, swine, sheep, poultry, rabbits, dairy goats, and llamas at the 2022 Minnesota State Fair on August 24-28. For a complete schedule of 4-H livestock show times and other special activities during the 4-H livestock shows, please refer to the State Fair 4-H web site at: https://extension.umn.edu/4-h-events/4-h-minnesota-state-fair​

Kent Thiesse
MN State Fair 4-H Beef Show Coordinator
and MN State Fair 4-H Auction Finance Chair
(507-381-7960)
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USDA Report Updates 2022 Corn and Soybean Estimates

8/17/2022

 
T
he August 12 USDA Crop Report projected a decreased average U.S. corn yield in 2022 compared to last year; however, USDA is estimating an increased 2022 national average soybean yield compared to 2021. The projected 2022 national average corn yield levels was reduced from the July USDA estimates, while the soybean yield estimate was increased slightly from a month earlier. The August yield and production projections were based on a National Ag Statistics Service (NASS) survey of over 15,000 crop producers in early August on crop conditions as of August 1. The August USDA corn yield projection was very close to the average estimates by grain marketing analysts, while USDA soybean yield projections were slightly above grain industry estimates.
The August 12 USDA Crop Report estimated the 2022 total U.S. corn production at 14.36 billion bushels, which would be a decrease of 5 percent from the 2021 production level of just over 15.1 billion bushels. The 2022 projected U.S. corn production also compares to 14.1 billion bushels in 2020, 13.6 billion bushels in 2019, 14.4 billion bushels in both 2018 and 2017 and the current record U.S. corn production of 15.2 billion bushels in 2016. USDA is estimating 2022 total U.S. corn acreage harvested for grain at 81.8 million acres, which compares to 85.4 million acres in 2021.

The latest Crop Report projects the national average corn yield in 2022 at175.4 bushels per acre, which is a decline of 1.6 bushels per acre from the NASS yield estimate in July. This compares to the record U.S. corn yield of 177 bushels per acre in 2021, 172 bushels per acre in 2020, 167.4 bushels per acre in 2019, 176.4 bushels per acre in 2018, and 176.6 bushels in 2017. There is a large diversity in 2022 corn yield estimates across the U.S., with much lower yield projections in many of the drought-stricken States.

USDA is estimating a record 2022 corn yield in four States, including Iowa and Wisconsin. USDA is projecting Iowa’s 2022 average corn yield at 205 bushel per acre. Which is the same as the record statewide yield of 205 bushels per acre in 2021. The 2022 projected corn yield would be well above the final 2020 corn yield of 178 bushels per acre that was greatly reduced by derecho windstorm that swept across Iowa that year. The Wisconsin corn yield for 2022 is projected at the record level of 185 bushels per acre, which compares to 180 bushels per acre in 2021.

USDA projects Minnesota’s 2022 average corn yield at 193 bushels per acre, which would represent an 8 percent increase from the average corn yield of 178 bushels per acre in 2021. The 2022 statewide average corn yield compares to previous statewide corn yields of 192 bushels per acre in 2020, and 173 bushels per acre in 2019. The State record corn yield remains at 197 bushels per acre in 2017. There is a wide range of expected corn yields depending on timely planting, favorable growing conditions, and developing drought conditions in portions of the State in early August.
Other 2022 corn yield estimate are Illinois at 203 bushels per acre, compared to 202 bushels per acre in 2021, Indiana at 189 bushels per acre, compared to 195 bushels per acre in 2021; and Ohio at 190 bushels per acre, compared to 193 bushels per acre in 2021. Nebraska is projected at 181 bushels per acre in 2022, which would be a 7 percent decline from 194 bushels per acre in 2021. North Dakota is estimated to have a 38 percent increase in the average statewide corn yield in 2022 at 145 bushels per acre, up from the drought-reduced yield of 105 bushels per acre in 2021. The 2022 corn yield in South Dakota is estimated at 147 bushels per acre, compared to 135 bushels per acre in 2021. 2022 projected corn yields were greatly reduced in the drought-stricken States of Kansas, Missouri, Oklahoma and Texas.

The USDA Report on August 12 estimated total 2022 U.S. soybean production at 4.53 billion bushels, which would be up slightly from the 2021 production of slightly over 4.43 billion bushels and would be near the current record production level of 4.54 billion bushels in 2018.  USDA is now estimating total 2022 harvested soybean acreage at 87.2 million acres, which compares to 86.3 million acres in 2021. USDA is projecting the 2022 U.S. average soybean yield at 51.9 bushels per acre, which is an increase from the 2021 national average yield of 51.4 bushels per acre, and would potentially tie the record U.S. soybean yield of 51.9 bushels per acre in 2016. The 2022 estimated soybean yield compares to other recent national average soybean yields of 50.5 bushels per acre in 2020, 47.4 bushels per acre in 2019, 51.6 bushels per acre in 2018, and 49.1 bushels per acre in 2017.
The recent USDA report lists seven States that are likely to have a record statewide soybean yield in 2022, including the important production States of Illinois, Indiana, and Ohio. The estimated 2022 soybean yield in Illinois is 66 bushels per acre, compared to 64 bushels per acre in 2021; Indiana at 60 bushels per acre, compared to 59.5 bushels per acre in 2021; and Ohio at 57 bushels per acre, compared to 56.5 bushels per acre in 2021. Iowa’s 2022 soybean yield is projected to decline to 58 bushels per acre, down from the statewide record yield of 62 bushels per acre in 2021, Other recent Iowa soybean yields include 53 bushels per acre in 2020, 55 bushels per acre in 2019, and 57 bushels per acre in 2018. Soybean yield estimates for 2022 are also reduced in Nebraska soybean at 55 bushels per acre, compared to 63 bushels per acre in 2021, and Wisconsin at 52 bushels per acre, compared to 55 bushels per acre in 2021.
Minnesota’s 2022 average soybean yield is estimated at 50 bushels per acre, which compares to 47 bushels per acre in 2021, 49 bushels per acre in 2020, 44 bushels per acre in 2019, 48 bushels per acre in 2018,  and the record State soybean yield of 52.5 bushels per acre in 2016. North Dakota is projected to have 37 percent increase in soybean yield in 2022 at 35 bushels per acre, compared to 25.5 bushels per acre in 2021. South Dakota’s yield is expected to increase to 43 bushels per acre in 2022, compared to 40 bushels per acre in 2021.

AUGUST 12  WASDE REPORT
The updated USDA World Supply and Demand Estimates (WASDE) Report was also released on August 12. This report included the 2022 estimated U.S. corn production of 14.36 billion bushels and harvested corn acreage of 81.8 million acres, along with the latest USDA corn yield projection of 175.4 bushels per acre. The 2022-23 corn ending stocks are now projected at 1.39 billion bushels, which was a decline of 82 million bushels from the July report. The corn ending stocks for 2021-22 were adjusted to just over 1.53 billion bushels, which was increased by 20 million bushels from the July estimate. The projected corn carryout levels compare to 2020-21 corn ending stocks of 1.23 billion bushels.

USDA is projecting an average on-farm corn price for the 2022-23 marketing year, which extends from September 1, 2022, through August 31, 2023, at $6.65 per bushel, which is unchanged from the July estimate. The 2021-22 national average corn price, which will be finalized on September 30, 2022, is now estimated at $5.95 per bushel. These estimates compare to recent national average prices of $4.53 per bushel for 2020-21, $3.56 per bushel for 2019-20, $3.61 per bushel for both 2018-19 and $3.36 per bushel for 2017-18.
The recent WASDE report projected the 2022 U.S. soybean production level of 4.53 billion bushels, based on 87.2 million harvested acres and an estimated U.S. soybean yield of 51.9 bushels per acre. The 2022-23 soybean ending stocks are now estimated at 245 million bushels, which an increase of 15 million bushels from the July WASDE report. The 2021-22 soybean ending stocks are projected at 225 million bushels. USDA is now projecting an average on-farm soybean price for the 2022-23 marketing year at $14.40 per bushel and at $13.30 per bushel for the 2021-22 marketing year. This compares to national average prices of $10.80 per bushel for 2020-21, $8.57 per bushel in 2019-20, $8.47 per bushel in 2018-19, and $9.33 in 2017-18.​

For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,
MinnStar Bank, Lake Crystal, MN. (Phone  -  (507) 381-7960)
E-mail - kent.thiesse@minnstarbank.com)  Web Site - http://www.minnstarbank.com/
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HISTORICAL  PERSPECTIVE  OF  THE  NEW  FARM  BILL

8/10/2022

 

Even though there is still over a year remaining on the current Farm Bill, discussions have already been ongoing since earlier this year on developing the next Farm Bill. The current Farm Bill, known as the “Agriculture Improvement Act of 2018”, expires on September 30, 2023, and will include coverage of the 2023 crop year. Some members of Congress are hoping to move toward finalizing a new Farm Bill by the end of 2022 or early 2023 to allow adequate time for USDA to implement a new Farm Bill. However, reaching that goal may be difficult, given the mid-term elections later this year and potential changes in the U.S. House and Senate Agriculture Committees in the 2023 session of Congress.
Currently, both the U.S. House and U.S. Senate Ag Committees are seeking input on the 2023 Farm Bill through a series of Congressional hearings and listening sessions, both in Washington DC and in Committee members States or Districts. In addition, the House Ag Committee is offering an opportunity to submit feedback and ideas for the next Farm Bill through an “Online Farm Bill Feedback Form”, which is available on the following link:  https://agriculture.house.gov/news/documentsingle.aspx?DocumentID=2561
 When most people hear of a “Farm Bill”, they think of the commodity programs and payments that affect crop producers. Some people may be aware that crop insurance and conservation programs are included under the Farm Bill, and some are knowledgeable that Supplemental Nutrition Assistance Program (SNAP) and food stamps are part of the Farm Bill legislation. However, very few people outside of government officials and policy experts are aware that the Farm Bill also covers funding for rural fire trucks and ambulances, export promotion, international food aid, forestry programs, ag research and extension education at land-grant universities, and school lunch programs. The current Farm Bill passed in 2018 was over 1,000 pages in length, and contains 12 separate Titles, which cover a multitude of programs that are administered by USDA.
Farm Bills date back to Great Depression era of the 1930’s, with the first Farm Bill having just two Titles, and being only 54 pages in length. The “Agricultural Adjustment Act of 1933” established the crop loan program, which is still in existence today. Under the crop loan program, producers can take out a low interest loan with USDA, using the crop as collateral before it is sold. The producer can either repay the loan principal plus interest when the crop is sold or can forfeit the crop to USDA. Over the past several decades, the crop loan program has been used extensively by farm operators to get needed working capital for purchasing crop inputs for the following crop year. Most national crop loan rates were increased as part of the 2018 Farm Bill, and some groups are pushing for further increases in the commodity loan rates in the next Farm Bill.
Land set aside and conservation programs were added to Farm Bills in the 1950’s, with the establishment of the “Soil Bank Program”. While the Soil Bank Program no longer exists, there have been many other set-aside and conservation programs, including the popular “Conservation Reserve Program” (CRP) that was added in the 1985 Farm Bill.  The 2014 Farm Bill reduced the maximum CRP acreage from 32 million acres to 24 million acres, which was the lowest level since the initiation of the CRP program. The 2018 Farm Bill gradually increased the maximum CRP acres back to 27 million acres. There will be slightly over 23 million acres in the CRP program by the end of 2022. There will likely be strong efforts by some members of Congress, as well as agricultural and environmental organizations, to increase the CRP participation and acreage in the next Farm Bill to enhance carbon sequestration efforts. There are also several other conservation programs that are part of the current Farm Bill, including the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP), and the Agricultural Conservation Easement Program (ACEP). These programs will receive additional funding from the new “Inflation Reduction Act” that will likely be signed into law in the coming weeks.
Food stamps were added to Farm Bill in 1973, with the food stamp program being administered by USDA. Slightly over 80 percent of the proposed funding for the next Farm Bill will go to SNAP related programs, which includes the food stamp program, the women, infants, and children (WIC) program, and the school lunch program. The Federal budget outlay for the SNAP program more than doubled from 2008 to 2013, then declined briefly before increasing again in 2020 and 2021, due to the economic challenges caused by the COVID pandemic. Some members of Congress and other groups would like to see the Nutrition Title and SNAP programs removed from the Farm Bill. However, the Nutrition Title programs are important to nearly every member of Congress, including those in urban areas, which keeps them engaged in Farm Bill discussions. Most major farm organizations support keeping the Nutrition Title as a USDA program in the Farm Bill.
About 10-15 percent of the funding in the proposed Farm Bill will be targeted for farm commodity programs and crop insurance programs. The current Farm Bill provides eligible crop producers the choice between the county revenue based “Ag Risk Coverage” (ARC-CO) program, or the price-only “Price Loss Coverage” (PLC) program, for corn, soybeans, wheat, and other eligible commodity crops. The ARC-CO program is based on actual county crop yields and national average crop prices for a given crop year, compared to 5-year average benchmark yields and prices. The PLC program payments are based on national average crop prices for a given year compared to present crop reference prices. Some farm organizations are pushing for higher crop reference prices in the 2023 Farm Bill, given the much higher crop input costs that have occurred in the past couple of years. The current Farm Bill does allow for small gradual increases in the crop reference prices during extended periods of higher commodity prices. The dairy margin protection program and sugar support programs are also included under the commodity title of the Farm Bill.
Most crop producers and ag lenders will highlight a sound working crop insurance program as the “centerpiece” for a solid risk management plan in a farm operation. Over 95 percent of the corn and soybean acres in the Upper Midwest are typically insured by some type of crop insurance coverage. Most crop insurance premiums are subsidized at a rate of 60-65 percent by the federal government, as part of the Farm Bill. Some members of Congress and some organizations are calling for some changes and modifications to the current Federal Crop Insurance program, while most farm organizations are lobbying to keep the current program. Some livestock producer organizations would like to see enhancements to risk management programs for livestock production.
Since the first Farm Bill in 1933, there have been 17 different Farm Bills in the past 80-plus years. New Farm Bills are usually written about every five years, with the longest period between new Farm Bills being nine years from 1956 to 1965, and the shortest period being one year from 1948 to 1949. The “Agricultural Act of 1949”, which is also known as the “permanent farm legislation”, was never repealed or allowed to expire, and becomes the Farm Bill legislation for many commodity programs if a new Farm Bill is not enacted when the previous Farm Bill expires. Many provisions in the 1949 legislation are very outdated and did not include the SNAP program, the current crop insurance program, or the CRP program. The existence of the fallback to the 1949 legislation gives Congress extra incentive to complete Farm Bills in a timely manner.  
Passage of a new Farm Bill is very complex, with programs ranging from farm commodity programs to food and nutrition programs, from conservation programs to rural development programs, and many more. In many cases, finalizing a Farm Bill in Congress can be quite controversial, and not necessarily by political party lines. The various Farm Bill programs become quite geographical, with members of Congress wanting to protect the farm, food, conservation, and economic interests of their State or congressional district. The very large federal budget deficit in recent years has added a new element to successful passage of a large Farm Bill. The last Farm Bill was written in 2018, to cover federal fiscal years from 2019-2023; however, Congress has been known to extend Farm Bills beyond the expiration date until a compromise is reached on a new 5-year Farm Bill.
Note --- For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,
              MinnStar Bank, Lake Crystal, MN. Phone - (507) 381-7960) 
              E-mail - kent.thiesse@minnstarbank.com)  Web Site - http://www.minnstarbank.com/

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2022 FarmFest Educational Forums

8/3/2022

 
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FOCUS   ON   AG 8-3-22

8/3/2022

 
MIXED  CROP  CONDITIONS  ACROSS  THE  U.S.
In the national news we continue to hear about the drought and extreme heat in the southern plains and western States, while the focus has been excess rain and flooding in in places like Kentucky and the St. Louis area. Even in the Upper Midwest, there is a wide range of soil moisture and crop conditions across the region, with some areas getting very dry and approaching drought conditions, while other locations actually having received excessive rainfall. Portions of the Upper Midwest States received some much-needed rainfall this past weekend, ranging from a few hundredths of an inch to near two inches in some locations. Most areas received fairly small amounts of precipitation; however, the rainfall provided some much-needed temporary relief to crop deterioration in very dry areas.
 
The southern half of Minnesota provides a great example of the variability in rainfall during June and July. The University of Minnesota Research and Outreach Center at Waseca in eastern south-central Minnesota received 4.36 inches of rainfall in June and 4.6 inches in July, for a two-month total of nearly 9 inches, which is less than an inch below the long-term average June and July precipitation for that site. By contrast, the U of M research site at Lamberton in southwest Minnesota received only 1.07 inches of rainfall in June and 1.59 inches in July, for a two-month total of only 2.62 inches, which is well below the long-term average of 7.73 inches for the two-month period. The available stored soil moisture at the Lamberton site is well-below normal and is comparable to late July in 2021.
 
There is a growing area of Minnesota extending from the south edge of the Twin Cities into South Central Minnesota, as well as into portions of West Central Wisconsin, that is categorized in either “moderate drought” (D1) or “severe drought” (D2) category in the latest “U.S. Drought Monitor” on July 26. A large portion of the southern half of the State and the north half of Wisconsin, except for Minnesota counties near the Iowa border, were listed as “abnormally dry” in the latest Drought Monitor. Nearly all of North Dakota and the northern half of Minnesota, as well as northern and eastern South Dakota, are not listed in any drought category or as being abnormally dry in 2022. A year ago in late July, nearly all of these same areas were in the “extreme drought” (D3) or the D2 drought category in late July and early August.
 
According to the latest Drought Monitor” map, the areas categorized by some level of “drought” in the Drought Monitor have been expanding further into the portions of the Midwest in recent weeks. Much of Nebraska, as well as portions of southern South Dakota, and northwest Iowa are now categorized to be in either the moderate drought (D1) or severe drought (D2) category, with a small portion of northeast Nebraska and northwest Iowa categorized in the extreme drought (D3) category. Nearly the entire western third of the United States is in either severe, extreme, or exceptional drought, with a majority of the region in the two top-level drought categories. About the only exception to being under the intense drought pressure are the northern tier of States near the Canadian border. Areas that are in the extreme or exceptional drought areas are likely seeing significant crop loss and limited forage production, as well as longer term effects on lakes, rivers, streams, and ground water supplies.
 
Sometimes the “Drought Monitor” is somewhat misunderstood. It is meant to measure the overall long-term impacts of extended drought conditions, as compared to representing current crop conditions. This is why some areas that are listed in “moderate” or “severe” drought may still have fairly good crop potential with below average rainfall, provided that these areas have received some timely rainfall. Some portions of the Midwest also benefitted from starting the 2022 growing season with average or above levels of stored soil moisture, which has also helped maintain crop development through some very dry periods during the Summer months. However, it should be noted that the stored soil moisture levels have been rapidly depleted in many locations, with some areas now near zero available stored moisture.
 
The 2022 growing season started out with later-than-normal corn and soybean planting in many areas of the Upper Midwest, with especially delayed planting in North Dakota and portions of western and northern Minnesota, as well as eastern South Dakota. In addition, temperatures were cooler than normal during most of May, which got the planted crop off to a slow start in many areas. The good news is that the warm temperatures in June and July have allowed for rapid development of the crop and have all but eliminated the impacts of the later planting dates, except in those areas on North Dakota and Northern Minnesota that had the extremely late planting dates. In late May the crop “growing degree units” (GDU’s) were nearly 10 percent behind normal at many locations in Southern Minnesota; however, by the end of July, the GDU accumulation since May 1 had actually improved to 5-10 percent above normal in many portions of the region.
 
The weekly USDA Crop Report released on July 25 listed the condition rating of the corn in the U.S. at 61 percent “good-to-excellent”, which declined from 64 percent a week earlier. However, there is a wide variation in the “good-to-excellent” crop ratings across the major corn and soybean producing States. The highest “good-to-excellent” corn rating was 80 percent in Iowa, which is the largest corn producing States in the U.S.  Some of the other higher crop ratings included “good-to-excellent” ratings were 79 percent in Wisconsin, 74 percent, in North Dakota, 71 percent in Illinois, and 65 percent in South Dakota. This compares to the much lower “good-to-excellent” corn ratings of 39 percent in Kansas, 46 percent in Indiana, 53 percent in Missouri, 55 percent in Ohio and 57 percent in Nebraska. Minnesota was at 63 percent, slightly above the national average.  
 
The latest USDA Crop Report listed 59 percent of the U.S. soybean crop as “good-to-excellent”, which also declined by 2 percentage points from a week earlier. Wisconsin had the highest “good-to-excellent” soybean rating in the Midwest at 79 percent, followed closely by Iowa at 75 percent.  By contrast, the “good-to-excellent” soybean ratings were 46 percent in Missouri, 48 percent in Indiana, 51 percent in Kansas and 54 percent in Ohio. The following States were between 60-64 percent “good-to-excellent”, which is just above the national average rating: Nebraska at 60 percent, Illinois at 61 percent, Minnesota and North Dakota at 62 percent, and South Dakota at 64 percent.
 
There is not a lot of historical correlation between weekly crop ratings in early August and final corn and soybean yields. Timely August rainfalls and favorable growing conditions can enhance final yield levels in areas that are not in extreme drought conditions; however, lack of late season rain events can reduce final crop yields in the very dry areas. The latter situation occurred in most of North Dakota, as well as a large portions of South Dakota and western Minnesota in 2021 when very dry conditions from late June until early September greatly reduced final corn and soybean yields. Farmers at many locations in this area experienced their lowest corn and soybean yields since the drought year of 2012. On the other hand, timely rainfall and favorable growing conditions in August and early September enhanced the final 2021 corn and soybean yields in much of southern Minnesota and Iowa, as compared to yield expectations in early August.
 
Some private companies will have Midwest crop tours later in August which may provide some indicators regarding 2022 corn and soybean yield trends in the region and allow for some early projections for total U.S. corn and soybean production in 2022. These crop tours tend to concentrate on the core areas of the Corn Belt in Illinois, Iowa, Eastern Nebraska, Southern Minnesota, and Southeast South Dakota, which account for a large percentage of the U.S. corn and soybean production each year. These crop tours will give us some guidance on anticipated 2022 U.S. corn and soybean production; however, given the wide variation in crop conditions across the Midwest, we will likely not have solid U.S. yield and production estimates until well into the harvest season.
 
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Note --- For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,
              MinnStar Bank, Lake Crystal, MN.  (Phone --- (507) 381-7960) 
              E-mail --- kent.thiesse@minnstarbank.com)  Web Site --- http://www.minnstarbank.com/
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