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Tuesday, September 27th, 2022 Video and Audio Podcast


We saw a mostly “risk-on” type day in the grain trade on Tuesday although it was a bit of a see-saw type trade. The U.S. dollar started lower allowing all commodities to move higher but then as the dollar came off it’s lows, that put pressure back on the trade. We discuss the markets and get analysis with Brian Splitt of AgMarket.net on today’s show. Learn more online at https://www.agmarket.net.

Also, we talk about harvest and much more with Whitney Monin of AgriGold on the show today. Learn more about their new products at https://www.agrigold.com.


Senate Could Vote This Week on Key USDA Nominees


The Senate could vote this week on Biden nominees for key USDA posts, as it wraps up most pre-election business but for a week or so in October.

Senate Ag Republicans last week complained about how long it’s taken for President Biden to name candidates for top USDA posts, especially in trade. Iowa’s Chuck Grassley; “We’ve been waiting for 20 months to get agricultural policy at the head of this administration. And this ought to move along very quickly, and it really ought to move next week by UC.”

UC refers to ‘unanimous consent’ of all 100 senators, thus allowing expedited confirmation of Alexis Taylor for Undersecretary for Trade, Jose Emilio Esteban for Undersecretary for Food Safety, and Vincent Garfield Logan for a seat on the Farm Credit Board.

Senate Ag Chair Debbie Stabenow at last week’s hearing; “I hope next week, that we can get 100 percent of the Senate. In fact, what would be great, is to get a UC, Senator Grassley, on all three of these nominees that fill these positions. Hopefully, we can do that, we can work together.”

And, for good reason. Stabenow; “I strongly support each and every one of you in your nominations, moving forward. I know, as you can see from today, there’s strong bipartisan support from the committee, which speaks to each of you and the quality of your nomination.”

The Senate will likely go into a wrap-up session at the end of the week, where last-minute business is fast-tracked before the end of the fiscal year on Friday.

USDA Announces Action to Spur Competition, Protect Producers and Reduce Costs


The Biden administration Monday announced two new Department of Agriculture efforts to support fair and competitive meat and poultry markets. The efforts include publishing the proposed Inclusive Competition and Market Integrity Rules Under the Packers and Stockyards Act to protect farmers and ranchers from abuse, and a new $15 million Agricultural Competition Challenge to ramp up collaboration with the State Attorneys General on enforcement of competition laws, such as laws against price-fixing. The two efforts come from the White House Competition Council, which held a meeting Monday. Agriculture Secretary Tom Vilsack says, “USDA is focused on building new, fairer, and more resilient markets, protecting producers, and reducing food costs.” Earlier this year, USDA and the Department of Justice announced their commitment to work closely together to effectively enforce federal competition laws, including by launching the FarmerFairness.gov complaint portal for reporting suspected violations of federal competition law.

Mixed Week for Fuel Prices


Ending the 14-week stretch of gas prices declining, the nation’s average gas price posted a rise of 3.2 cents from a week ago to $3.67 per gallon. The national average is down 17.5 cents from a month ago but 49.3 cents higher than a year ago. The national average diesel price declined 5.1 cents the last week and stands at $4.88 per gallon. Refinery snags in some areas of the country contribute to wild fluctuations as areas of the West Coast, Pacific Northwest, Great Lakes and Plains have seen significant refinery issues leading to supply challenges. However, the Northeast and Gulf Coast continue to see normal activity at refineries and prices there have dropped. The disconnect between regions grows larger and will likely remain abnormal for the next few weeks. Gas Buddy’s Patrick De Haan says, “A slew of unexpected refinery disruptions, including fires and routine maintenance, have seemingly all happened in a short span of time.”

USMCA Partners Host Environmental Committee Meeting


Officials from the United States, Mexico and Canada met last week as part of the U.S.-Mexico-Canada Agreement’s Environment Committee. The committee was established as part of the USMCA to oversee the Environment Chapter’s implementation and provide a forum to discuss and review chapter implementation. At the meeting, the officials discussed progress and challenges faced in implementing the environmental obligations since the Agreement’s entry into force in 2020. The committee also discussed follow-up items from the first Committee meeting, including the findings of a mapping exercise to identify gaps and opportunities for trilateral collaboration for implementing Chapter 24 commitments, recognizing the need to ensure complementarity and avoid duplication with efforts already underway by the Commission for Environmental Cooperation. In addition, the committee held a public session to share information and hear from stakeholders from Canada, Mexico, and the United States regarding the implementation of Chapter 24.

USDA to Provide up to $20 Million for Construction of On-Farm Grain Storage Facilities in Areas Impacted by Recent Natural Disasters


WASHINGTON, Sept. 26, 2022 – Agriculture Secretary Tom Vilsack announced the U.S. Department of Agriculture (USDA) will make available $20 million in cost-share assistance to help agricultural producers in Kentucky, Minnesota, South Dakota and surrounding areas to rebuild storage facilities damaged by devastating natural disaster events in 2021 and 2022. This assistance will help producers who were hard-hit by disasters and are currently struggling with a lack of available grain storage have the resources they need as they head into the 2022 crop harvest.

“Over the past two years, weather events in several states caused catastrophic losses to grain storage facilities on family farms as well as a large, commercial grain elevator, leaving stored grain exposed to the elements and affecting commodity marketing options for many producers. USDA heard from congressional leaders, including Minority Leader McConnell, who identified a gap in our disaster assistance toolkit, and we went to work designing a new program to deliver direct assistance to producers who are struggling to meet their on-farm storage capacity needs in the wake of disasters,” Secretary Vilsack said. “Congress has provided USDA with important flexibility through the Commodity Credit Corporation, which gives us the tools to be nimble as we work to support the production and marketing of agricultural commodities and quickly respond to agricultural producers’ needs.”

This assistance from USDA’s Farm Service Agency (FSA) will be designed to help producers affected by the December 2021 tornadoes that passed through eleven counties in Kentucky, as well as producers in Minnesota and South Dakota affected by the derechos (severe thunderstorms and straight-line winds) that swept through these states in May 2022 and July 2022.

Similar to other USDA cost-share programs, USDA anticipates that the funds announced today will cover 75% of the eligible expenses associated with building grain storage capacity or purchasing equipment such as grain baggers for a producer’s own use or for a shared-cost arrangement among a group of producers who want to use a common facility. The program will be primarily focused on supporting producers or groups of producers in their efforts to build new storage capacity in eligible areas where there is a shortage of local grain storage.  Details on the program and the process to seek cost share will be available in a future Federal Register notice, but USDA also has an existing Farm Storage Facility Loan Program that can immediately provide low-interest financing.  Producers should contact their local service center for details or to ensure they are on a list for updates.

To determine locations where producers may be eligible for emergency grain storage facility assistance, state impact area maps for Kentucky, Minnesota, South Dakota and surrounding areas are now available online. These maps depict damaged storage facility locations and counties within a 30-mile radius of these facilities where producers may be eligible for this new program. If a producer believes their county should also qualify for this program, there will be a procedure to consider and add additional counties.

Through proactive communications and outreach, USDA will keep producers and stakeholders informed as program eligibility, application and implementation details are made available in the coming weeks.

More Information

Additional USDA disaster assistance information can be found on farmers.gov, including the USDA Disaster Assistance Discovery ToolDisaster-at-a-Glance fact sheet, and Farm Loan Discovery Tool. For FSA and Natural Resources Conservation Service programs, producers should contact their local USDA Service Center. For assistance with a crop insurance claim, producers and landowners should contact their crop insurance agent.

USDA touches the lives of all Americans each day in so many positive ways. Under the Biden-Harris administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit usda.gov.

USDA is an equal opportunity provider, employer and lender.

Insured Acreages Vary Widely Across Fruit and Nut Specialty Crops


USDA’s Economic Research Service Monday reported insured acres of specialty crops vary widely across specific crop types. USDA’s Risk Management Agency offers Federal Crop Insurance Program products to cover specialty crops in counties with enough data available to offer a sound insurance product. Using cherries as an example, crop insurance is available for cherry growers who operate in counties with a high number of cherry acres. Because of this, farmers used federal crop insurance to cover about 65 percent of all cherry acres. Cherry growers outside of those counties used the USDA Farm Noninsured Crop Disaster Assistance Program to cover about 20 percent of all cherry acres, leaving only 15 percent of acres not covered by any risk management program. For some crops, however, federal risk management programs covered only a small portion of acres. Kiwifruits and strawberries, for example, had less than 15 percent of acres covered, while hazelnuts had less than one percent.

AEM Hosts Record-breaking DC Fly-in


The Association of Equipment Manufacturers Monday reported a record attendance for its Washington, D.C. fly-in last week. Representing equipment manufacturers and suppliers from across the country, participants met with 70 lawmakers. The group advocated for pro-manufacturing policies that will help equipment manufacturers succeed in the United States and around the world. AEM’s Kip Eideberg says, “As Congress continues its legislative business through the end of the year, we will continue to remind lawmakers that they need to reach across the aisle and work to move our country forward.” AEM members advocated for domestic supply chain investments, precision agriculture incentives to support climate-smart practices, and a grant program that supports workforce development. AEM says tariffs continue to hurt the equipment manufacturing industry. AEM asked lawmakers to establish a permanent Section 301 tariff exclusion process so American manufacturers can petition the Office of the U.S. Trade Representative to remove tariffs needed for domestic manufacturing and the national economy.

Merck Animal Health to Acquire Virtual Fencing Developer


Merck Animal Health recently announced an agreement to acquire Vence, an innovator in virtual fencing for rotational grazing and livestock management. Vence provides enhanced technology for producers and ranchers to track, monitor and manage the movement of cattle through a high-tech platform of virtual fencing solutions. Using a computer or smartphone, customers can manage cattle movement and facilitate rotational grazing. Vence’s virtual fencing technology can reduce the need for fencing to subdivide pastures and allows producers and ranchers to manage their cattle and grass inventory, while reducing costs of labor and fencing materials. Merck Animal Health president Rick DeLuca says, “Vence is a natural fit with Merck Animal Health’s growing portfolio of animal intelligence products that include identification, traceability and monitoring products.” The acquisition is expected to be completed in the third quarter of 2022, subject to closing conditions. Vence is available in the United States and parts of Australia.

Analyst: Bullish Factors Ahead in the Wheat Market?


There’s a long way to go, but commodity markets are watching U.S. harvest results. Mike Zuzolo, founder and president of Global Commodity Analytics, talks about the markets’ reaction to early harvest results.

“Early yield reports I’m getting, coupled with the cash basis, is the market, and I are both thinking that USDA has got a low enough yield in these corn and bean numbers at this point. And with export demand going down and the Federal Reserve going ballistic, they don’t need to put premium in this market unless, I think, something like a wheat rally would happen.”

There is a good chance of a rally in the wheat market in the months ahead because of a couple of key factors.

“It wasn’t long ago we were dealing with $14 wheat, and I think that’s where getting to $14.25 and then falling to $7.50 in a matter of roughly 70 days, you could make the argument with this mobilization of troops that we’ve taken way too much premium out of the wheat market, especially given the timing of this mobilization (by Russia in Ukraine) when you’re A, trying to get corn off the fields and B, trying to plant wheat in both of these countries. But I think, be that as it may, you have, I think, a weather bull developing or continuing in the wheat market, not just here in the U.S. southern plains, in the hard red wheat belt. But we still have a major issue and a major drought in Argentina, so much so that Argentine farmers in some areas are not planting corn at this point until they get a rain.”

Drought in North and South America could make things hard on upcoming wheat crops.

“You think about their wheat being in the middle of their crop season right now, you think about us in Kansas and Nebraska wanting to plant wheat but going very slow pace because of no rain and worries about it even sprouting, and then you throw on top of that the Russian risk premium question mark. And then, you throw on top of that the commitment of traders data saying that the funds, the managed money positions, are net short wheat and net long on a bunch of corn, and you have to wonder if they’re out of position at this point because we’re going into corn harvest now.”

Reports are coming out that some farmers in the Plains States are literally “dusting” their winter wheat crops into the ground.

“I can confirm that with you because I just talked to a colleague of ours that runs a radio station, farms, and, also, is the state legislator for Kansas. And those were his exact words, that his neighbors in his area were dusting it in, hoping and praying for rain that it would sprout. But there are some areas of Kansas and Nebraska when you look at a 90- or 100-Day precip total versus normal, and they’re 12 to 15 inches below normal right now.”