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Yara to Buy Bunge Brazil Fertilizer Assets for $750 Million

Yara International ASA, the largest publicly traded nitrogen-fertilizer maker, agreed to purchase Bunge Ltd. operations in Brazil for $750 million as it pursues a 33 percent output increase in four years from 2010 levels.
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Demand soars in Japan for Canadian pork

Demand soars in Japan for Canadian pork | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

TOKYO — Japan’s imports of Canadian pork have been rising by 10 percent a year since 2010, says a representative for Canada Pork International.

When he became CPI’s first Japan marketing director in July 2010, only 4,500 tons of Canadian pork were coming here on average every month, Shoji Nomura said.

“This year, it is 8,000 tons,” Nomura said.

Demand is strong for chilled pork from Canada, which came in at a 66.4 percent ratio of total imports of Canadian pork in the first 10 months of the year. The main chilled cuts imported are shoulder roast, tenderloin and and belly, almost 90 percent of which is used as table meat.

Canadian roast ham also sells in 10,000-yen gift boxes, although there is no indication of Canadian origin because country-of-origin labelling is only compulsory for fresh meat. Canadian pork is also served in tonkatsu dishes (breaded, deep-fried pork cutlets) and tonkatsu sandwiches.

Canadian pork is gradually taking market share away from its U.S rival. In 2010, an average 16,000 tons of U.S. pork was coming here a month, almost four times as much as Canadian pork, whereas the ratio is now more about only 60-40 in favour of the U.S. product, Nomura said.

“It is not just because of the promotion that I am doing, but also because Canadian producers and packers are working hard to improve business,” he said.

Since being hired, Nomura has been working to raise recognition of Canadian pork. Instead of first doing so with consumers, he has been concentrating on the trade and people in the food service industry, reminding them of the advantages of Canadian pork. Among other efforts, he has done 19 trade seminars throughout the country.

Nomura worked as Japan market manager at the former Canadian Beef Export Federation’s Tokyo office in 2002-10. Previous to that, he worked for more than 20 years for trading houses, starting his career by cutting meat for a wholesaler.

Having worked in the meat business for more than 30 years, Nomura knows relevant people throughout Japan.

“So I contact them, telling them I will do a seminar, and they come,” he said.

At big seminars held in the Japanese capital or the city of Osaka, a traditionally commercial hub, all the importers based there came. However, people in the regions don’t come  much, so information does not go out there much.

Nomura held the first CPI seminar in November 2010 in Hiroshima and the last one up to now  in the same city exactly four years later. That last time, only 50 representatives came.

“It’s very difficult to get people in the regions to come, as they are busy and don’t know much about Canadian pork,” Nomura said.

Canadian pork’s advantages are three-fold, Nomura said.

First, Canadian producers mainly raise Landrace and Large White pigs, the same breeds as in Japan.

Second, fattening practices are the same.

Thirdly, in Canada as in Japan, pigs are fed corn and wheat, whereas in the United States, feed is basically corn and soybean based.

“With such feed, the fat is not of a bright white colour, its melting point is low, and the meat is not of the nice pink colour that Japanese people like,” Nomura said.

“So I point out that Canadian pork specifications are close to those for Japanese pork” when he does seminars, Nomura said.

As Canadian chilled pork imports having risen, its presence on supermarket shelves has consequently increased.

“So in the next fiscal year, we will do more promotions in supermarkets,” Nomura said.

“We will also make more contacts with pork companies, such as Nippon Ham and Itoham,” he said.

And for the first time, Canadian pork will be showcased Feb. 10-12 at the yearly Tokyo Supermarket Show.

Japan cannot be a big market like China, but if one has a good product at a reasonable price, one can have a chance in this market, Nomura said.

“I tell people that Canadian pork tastes good and its price is reasonable,” he said.”

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À l’approche de 2015, l’agriculture canadienne affiche une position solide

À l’approche de 2015, l’agriculture canadienne affiche une position solide | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Regina (Saskatchewan) – L’agriculture canadienne est plus résiliente et plus prête que jamais à saisir de nouvelles occasions, affirme Jean-Philippe Gervais, économiste agricole en chef à Financement agricole Canada (FAC).

« Après avoir parcouru le pays et entendu des milliers de producteurs en 2014, je suis persuadé que l’agriculture canadienne continuera de progresser », lance M. Gervais en présentant ses cinq principaux enjeux agroéconomiques à surveiller en 2015. « Bien que certains de ces enjeux soient plus connus des producteurs que d’autres, tous ont des répercussions sur l’agroindustrie et démontrent la complexité et l’interdépendance de l’industrie actuelle.

La main-d’œuvre qualifiée se fait de plus en plus rare
Le marché du travail agricole au Canada devrait rester difficile en 2015 alors que le nombre de travailleurs disponibles dans l’industrie poursuivra son déclin.

Le nombre de travailleurs nécessaires pour assurer la viabilité des exploitations agricoles augmente de 1 à 1,5 % par année.

Pour attirer la main-d’œuvre, les salaires du secteur agricole ont augmenté en moyenne de plus de 3 % par année durant la dernière décennie, ce qui dépasse les hausses salariales de la plupart des autres secteurs de l’économie. Cette tendance devrait vraisemblablement se poursuivre en 2015.

« Il demeurera difficile pour de nombreuses exploitations agricoles d’embaucher de la main-d’œuvre, et ce, malgré des salaires plus élevés, précise M. Gervais. Les producteurs devront prendre le temps d’élaborer une stratégie en matière de main-d’œuvre qui leur permettra de recruter et de maintenir en poste des travailleurs compétents. »

L’inflation du prix des aliments croît plus rapidement
Les prix des aliments en 2015 devraient augmenter plus vite que le taux d’inflation global pour une deuxième année consécutive, même si cela devrait se faire à un rythme plus modéré.

Le bœuf et le porc sont les principaux secteurs qui expliquent la hausse de 2014 – de bonnes nouvelles pour les producteurs, qui ont profité de prix élevés sans précédent pour leurs bovins et leurs porcs. Les marchés suggèrent que les prix des bovins seront légèrement plus élevés en 2015, alors que les prix du porc reviendront à des valeurs plus faibles.

Il en résulte que l’inflation du prix des aliments devrait se situer entre 2 à 4 %, comparativement au taux d’inflation estimé par la Banque du Canada, qui est de 1,6 % pour l’ensemble de l’économie.

« Il en coûte peut-être plus cher aux consommateurs, mais ils soutiennent aussi leur propre économie et obtiennent des aliments de qualité », estime M. Gervais.

Les prix des produits de base stimulent les ventes d’équipement
Les prix élevés du bétail ont dynamisé les ventes de petits tracteurs neufs en 2014, tandis que la baisse des prix des cultures a fait chuter les ventes de gros tracteurs à quatre roues motrices et de moissonneuses-batteuses d’environ 20 %. Le rapport entre le prix de divers produits de base et la vente d’équipement se poursuivra en 2015 et se répercutera vraisemblablement sur le marché de l’équipement d’occasion.

« Nous prévoyons une forte rentabilité dans le secteur du bétail, surtout celui du bœuf, ce qui entraînera une forte demande de tracteurs plus petits, ainsi que d’équipement de fenaison, ajoute M. Gervais. Par ailleurs, les marges plus faibles pour les producteurs de céréales et d’oléagineux réduiront la demande globale pour des tracteurs à quatre roues motrices, des moissonneuses-batteuses et d’autres machineries de grande culture. »

M. Gervais souligne que les fortes ventes d’équipement au cours des dernières années ont permis d’augmenter les stocks partout au pays, ce qui pourrait se traduire par des occasions d’achats dans le marché de l’équipement d’occasion.

L’histoire de deux marchés d’exportation importants
Les deux plus grands marchés d’exportation agricole du Canada, soit les États-Unis et la Chine, semblent connaître des destins opposés.

Alors que la Banque du Canada prévoit que le produit intérieur brut (PIB) des États-Unis augmentera de 2,2 % en 2014 à 2,9 % en 2015, la croissance du PIB de la Chine devrait ralentir pour passer de 7,4 % en 2014 à 7% en 2015.

« Il importe de comprendre l’arrière-scène économique des deux pays, avance M. Gervais. Le PIB peut être trompeur. Malgré une amélioration du nombre d’emplois et de la confiance des consommateurs aux États-Unis, le salaire moyen demeure stable. À l’inverse, l’économie chinoise ralentit sans que cela ait nécessairement une incidence marquée sur la consommation d’aliments. »

M. Gervais croit que le Canada continuera d’exporter davantage d’oléagineux et de viande rouge vers la Chine, et que la faiblesse du huard canadien permettra aux producteurs d’augmenter leurs exportations vers les États‑Unis. Il prédit que les faibles prix du pétrole continueront d’exercer une pression à la baisse sur le dollar canadien, ce qui signifie que les producteurs peuvent s’attendre à de forts rendements pendant toute l’année 2015.

Un atterrissage en douceur pour la valeur des terres agricoles
Après plusieurs années de hausses marquées, tous les signes laissent présager un ralentissement de l’augmentation de la valeur des terres agricoles en 2015.

Si l’on se fie aux bas prix des produits de base, le rapport du printemps de FAC sur la valeur des terres agricoles devrait présenter des hausses moins spectaculaires partout au pays, à quelques exceptions près.

« Les faibles taux d’intérêt et les recettes élevées des récoltes ont été les deux facteurs expliquant l’envolée récente de la valeur des terres agricoles, explique M. Gervais. Mais nous savons déjà que les prix des produits de base ne sont plus à des niveaux records. Même si aucune hausse des taux d’intérêt n’est prévue avant la fin de 2015, certains signes laissent pressentir une augmentation graduelle. »

Cependant, M. Gervais prédit un « atterrissage en douceur », et non une chute abrupte de la valeur des terres agricoles, puisque le terrain est encore un actif de grande valeur partout au Canada.

En diffusant ses prévisions et ses connaissances économiques en agriculture, FAC offre une perspective et une expertise solides afin d’aider les gens qui œuvrent en agriculture à atteindre leurs objectifs. Vous pourrez trouver plus d’information et d’observations à ce sujet dans le numéro du 2 janvier de FAC Express. Pour vous y abonner gratuitement, visitez le www.fac.ca/express.

FAC, qui est le plus important prêteur à l’industrie agricole canadienne, possède un portefeuille de première qualité de 27,3 milliards de dollars et vient de connaître une vingt et unième année consécutive de croissance. FAC est solide et stable; elle s’est engagée à servir l’industrie, peu importe le cycle économique, et à faire preuve de responsabilité sur les plans social et environnemental. FAC offre du financement, de l’assurance, des logiciels, des programmes d’apprentissage ainsi que d’autres services commerciaux aux producteurs agricoles, aux agroentrepreneurs et aux entreprises agroalimentaires. Le personnel de FAC comprend l’agriculture et est voué à la réussite de la clientèle et de l’industrie. La présence de FAC sur le marché profite aux producteurs, à l’agriculture, au secteur rural canadien et par le fait même à l’ensemble de la population canadienne. Pour obtenir de plus amples renseignements, consultez www.fac.ca. Suivez Financement agricole Canada sur Facebook, sur LinkedIn et sur Twitter à @FACagriculture.

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Russia Stops Shipping Grain Overseas, Union President Says

Russia stopped exporting grain last week, suspending shipments to customers including Egypt, the nation’s grain union said.

“Exports came to a complete and utter halt,” Arkady Zlochevsky, president of the union, told reporters in Moscow today. “Nothing is being shipped. No boats are putting to sea.”

Traders have contracts to deliver worldwide more than 3 million metric tons of Russian grain through January, according to Zlochevsky. Grain shipments stopped Dec. 18, he said. Egypt, the world’s biggest buyer, has 180,000 tons of wheat due to be shipped from Russia in January, data compiled by Bloomberg show.

Russia said Dec. 22 that it plans to introduce grain export duties, the latest step in an effort to reduce overseas shipments after the ruble plunged and food prices increased. While the country has said it won’t stop exports, the government has blocked cargoes by denying certificates that grain sellers and buyers need after sanitary inspections, and state-owned Russian Railways Co. halted deliveries to ports for exports last week.

Wheat for March delivery slid 0.2 percent in Chicago to $6.34 a bushel as of 7:16 a.m. local time. Prices have jumped more than 20 percent in the past two months.

Aliya Samigullina, spokeswoman for Deputy Prime Minister Arkady Dvorkovich, who is in charge of agriculture, didn’t immediately return a phone call or text message seeking comment.

Egypt Purchases

The General Authority for Supply Commodities, the Egyptian state grain buyer, agreed to buy 60,000 tons of Russian wheat in a Dec. 20 tender for shipment next month, along with 240,000 tons of French wheat. On Dec. 11, GASC bought 120,000 tons of Russian wheat for Jan. 11-20 shipping.

Traders should honor contracts to ship Russian wheat in January, Mamdouh Abdel Fattah, vice chairman of GASC, said by phone today.

“This is not a decision by the Russian government, and there are contracts between the authority and the traders which they will abide by,” he said.

The new restrictions on Russian grain follow export duties in 2004 to limit shipments, a jump in the rates in 2008 and an outright ban in 2010, when drought caused crop failure. Chicago wheat prices soared 47 percent that year.

“This has happened several times now,” Michel Portier, the head of Paris-based farm adviser Agritel SA, said in a phone interview. “Russia doesn’t gain in credibility as a reliable supplier.” 

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China allows imports of Agrisure Viptera GMO corn from Argentina

China allows imports of Agrisure Viptera GMO corn from Argentina | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

(Reuters) - China has approved imports of one of Argentina's genetically modified (GMO) varieties of corn, Syngenta's Agrisure Viptera, Argentina's agriculture ministry said on Tuesday.

The Argentine government had been negotiating access to the Chinese market for the corn strain for several years. The South American country is the world's fourth-biggest exporter of corn.

A source in the agriculture ministry said that China had previously authorized the import of other varieties of GMO corn, but that there had been few shipments to the Asian powerhouse.

 
 

In its statement, the ministry also said China had cleared the import of Bayer CropScience's A5547-127 strain of soybean, which has local regulatory approval for production in Argentina.

Argentina is a leading global exporter of soybeans and the top supplier of soymeal

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U.S. Grains Council Applauds Chinese Approval of MIR 162

U.S. Grains Council Applauds Chinese Approval of MIR 162 | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

The U.S. Grains Council (USGC) applauds the decision by the Chinese government to finalize the pending approval of the MIR 162 biotech corn trait. 

MIR 162 has been approved in 19 countries since 2011 and is a valuable tool for U.S. farmers who are working to address pest problems and increase yields. 
This decision is a positive but incomplete step towards the objective of normalizing agriculture trade with China. We continue to encourage U.S. and Chinese government officials to work together to create a synchronous and predictable approval process that will facilitate market access and promote trade to increase global food security.

For Syngenta's full statement on this development, please visit http://www.syngenta.com/global/corporate/en/news-center/news-releases/Pages/141222.aspx

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Russia's grain exports stop

Russia's grain exports stop | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

MOSCOW/ABU DHABI, Dec 24 (Reuters) - Russia's grain exports have stopped due to curbs brought in to protect domestic supply, putting big deals at risk, an influential farm lobby group said on Wednesday.

Russia's main wheat buyers are Turkey, Iran and, very vulnerable to supply disruption, Egypt.

Moscow imposed informal grain export controls with tougher quality monitoring and limits on railroad loadings earlier this month, as it tackles a financial crisis linked to plunging oil and Western sanctions.

"Since last Thursday not a single vessel, which had been due to sail under contracts, has left," Arkady Zlochevsky, the head of Russia's Grain Union, the farmers lobby group, said.

Officials also plan to impose duty on grain exports. Zlochevsky said its exact level was an unimportant detail, as he was sure it would be prohibitive.

"All loadings are suspended, there is only a need to legally formalise it," Zlochevsky said. Global wheat futures rose after his comments.

A spokeswoman for Russian Deputy Prime Minister Arkady Dvorkovich, who had promised to prepare the proposal for an export duty, was not available for comment.

REPEATED RESTRICTIONS

Zlochevsky criticised the decision to impose restrictions for the third time in six years.

Russia imposed a duty on wheat exports in 2008 and an official ban in 2010 when a drought hit its crop.

The 2010 ban was partially responsible for triggering social unrest and a revolution in Egypt as more than 500,000 tonnes were not supplied and global prices rose damaging Egypt's state bread subsidy programme, Zlochevsky said.

About 3 million tonnes of grain due for export until the end of January were now stuck, Zlochevsky said.

As a result, Russia may fail to supply wheat to Egypt's General Authority for Supply Commodities (GASC), the state buyer of the world's largest wheat importer, in January, he added.

"Of course, it includes supplies to GASC. How would we be able to supply it?" He said shipments would only be possible if and when the government makes an exception for Egypt.

Mamdouh Abdel Fattah, GASC's vice chairman told Reuters on Wednesday that trading companies were obliged to abide by their contracts to ship Russian wheat to Egypt.

GASC purchased 180,000 tonnes of wheat for January shipment, of which 120,000 tonnes for Jan 11-20 shipment purchased on Dec 11 and 60,000 tonnes for Jan 21-31, bought on Saturday.

"If there will be no Russian wheat available for Egypt by a government decision then the firms can proceed to negotiate with GASC to change the origin in the contract," a Cairo-based trading source said.

Russia, expected to be the world's fourth-largest exporter this year, had been exporting record volumes from a large grain crop of 105 million tonnes.

"What's clear is that they won't sell anything anymore," a European trader said. "Now the market wants to have more details on what the government will do concretely."

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December 23 Mid-Day Grains Commentary: Alexandra Lively - YouTube

December 23 Mid-Day Grains Commentary: Alexandra Lively
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Bryan Smith on Twitter : Had a customer show me what his Kids spent the day making. Gotta love it @Case_IH

Bryan Smith on Twitter : Had a customer show me what his Kids spent the day making. Gotta love it @Case_IH | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it
Had a customer show me what his Kids spent the day making. Gotta love it @Case_IH pic.twitter.com/r2t59ZfvGC
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Pre-report survey confirms most are expecting growth in hog numbers in report

Pre-report survey confirms most are expecting growth in hog numbers in report | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Please accept our best wishes for a Merry Christmas! We hope you have a great holiday with family and friends and take time to reflect on the true meaning of the season.

The U.S. Department of Agriculture’s (USDA) quarterly Hogs and Pigs report will be released Dec. 23 at 2 p.m. CT. This is the first time in memory that the report has been released before Christmas. The December report has hardly ever been released on a Friday as customarily are the other three quarterly reports. The USDA has normally timed the December report to leave at least one full trading day before the end of the year so market participants can adjust positions per the report before the end of the calendar year. This year’s early release doesn’t seem to me to harm that goal and it certainly leaves the USDA personnel free to enjoy the holiday knowing they don’t have to return and finish the report next week.

Urner Barry’s pre-report survey of market analysts confirms that most are expecting growth in hog numbers in this report.


Some highlights and implications of the numbers are:

  • The breeding herd is expected to grow by 3% relative to last year. If accurate, that would be the largest year-on-year growth for this key number since March 1998. Does that send a chill down your spine? That growth rate would fit sow slaughter prior to Dec. 1 pretty well, but would not fit the University of Missouri’s gilt slaughter percentage data which has run higher than one year ago so far this year and was a full 2% of slaughter higher in October. These three data series have been difficult to reconcile all year as producers saw extra value in immune sows and gilt supplies were impacted by porcine epidemic diarrhea virus (PEDV) losses.
  • Farrowing intentions for the September-to-November quarter are expected to come in 3.8% higher than last year. That is in line with the numbers we saw in September and with the historical productivity levels of the Sept. 1 breeding herd. Intentions for December-to-February are +3.8% from one year ago and would imply the highest farrowing rate on record for the Dec. 1 breeding herd. The +3.8% for the March-to-May intentions would imply litters per Dec. 1 breeding animal slightly higher than the past two years but still below the levels of 2009 through 2012. Sow productivity is a lingering concern from the PEDV epidemic as a number of farms are reporting disappointing farrowing rates post-PEDV.
  • The September-to-November pig crop is pegged at 3.3% higher than one year ago which would imply 29.185 million pigs save during the quarter. That number is still slightly smaller than the September-to-November 2013 pig crop of 29.319 million. It would imply March-to-May farrowings over 3% larger than last year. We had pegged that quarter at +4.2% after the September report so this might represent a slight reduction in our supply forecasts if the average estimate turns out to be accurate. We expect weights to be reducing pork supplies relative to one year earlier by that time as stocking rates increase and thus push pigs to market faster.
  • The 99.9% average estimate for litter size would put the September-to-November figure at 10.15, down 0.01 pigs per litter from one year ago and even with the figure for September-to-November 2013. In other words, a return to “normal” litter sizes. Those, of course, were growing at a rate of roughly 2% per year prior to that time, of course, so even steady litter sizes represent a significant slowing of productivity growth. This number would be back to familiar levels after being severely impacted by PEDV. I still think the USDA has over-estimated litter sizes this past year due to its practice of revising past pig crops to match slaughter and revising past farrowings by the same percentage. Those might be OK under normal circumstances but in the face of a disease that kills pre-weaned pigs, it strikes us as overestimating litter sizes. It wasn’t farrowings that dropped; it was pigs weaned per litter.

I will summarize the report and its implications in my next column.

Merry Christmas!

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Iowa Farmland Values Show Biggest Decline in 28 Years

Iowa Farmland Values Show Biggest Decline in 28 Years | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

The scales have tipped for Iowa farmland values. After several years of dramatic increases, this year marks a drop in value.

For 2014, the average value of an acre of Iowa farmland is $7,943—a drop in value of $773, or nearly 9%, per acre from 2013.


“This the sharpest decline since 1986,” says Mike Walsten, editor of LandOwner newsletter. 


But, Walsten says, you should keep these numbers in perspective. “The value of Iowa farmland is still double what it was 10 years ago,” he says.

While this year marks the largest decline in farmland values in 28 years, it is only the second year since 1999 that the survey has shown a decline in farmland values. After hitting a historic peak in 2013, values have returned to a mid-point between 2011 and 2012 values. In spite of the decrease, farmland values remain 81% higher than 2009 values, and 18% higher than 2011 values.

“I think we have seen a peak for the time being,” said Michael Duffy, said in a release about the survey. “Commodity prices and farm income are settling back to more expected levels, and I think land values will probably move sideways for a while.”

For the second year in a row, Scott and Decatur counties reported the highest and lowest farmland values, respectively. Scott County’s farmland is valued at $11,618 per acre, while Decatur County reported a value per acre of $3,587.

“Scott County typically has the highest value primarily due to the location on the (Mississippi) river and good soil,” says Duffy, a retired ISU economics professor and extension farm management economist.

The value of all grades of farmland fell, with high-grade farmland taking the largest hit and losing a full 9% ($974 per acre) of its value.

“The reason high-grade farmland fell in value faster than low- or medium-grade farmland is because it had increased in value faster over the past few years,” Duffy says. Medium- and low-grade farmland fared slightly better, losing 8.5% ($688 per acre) and 7.9% ($420 per acre), of their values, respectively.

The only crop reporting district to show an increase in values was southeast Iowa, which reported values at 3.2% higher than last year.

Corn and soybean prices started falling in 2013, and as a result farm income dropped. The most recent USDA net farm income estimate showed a record high income in 2013, but a 23% drop in net farm income for 2014. Falling commodity prices, along with a drop in farmland value, could make problems for some farmers.

“The drop in farmland value is due to the drop in commodity prices,” Duffy says. “Pressure could come if farmers incurred debt in anticipation that commodity prices would continue. I think all farmers will have a cash flow problem for the next 18 months or so. If farmers still have equity in their land they should be able to refinance, but farmers who got over extended will be in trouble.”

The survey is based on reports by 428 licensed real estate brokers and selected individuals considered to be knowledgeable of land market conditions. Since 1941, Iowa State University has conducted an annual land value survey to collect and analyze information on land values in each of Iowa’s 99 counties. 

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Farmland Partners secures firepower for 2015 land purchases

Farmland Partners, announcing extra firepower for borrowing, signalled an appetite for further land purchases in 2015, even as farm prices have been shown by some surveys to be in retreat.

The Colorado-based farmland investment group, which buys land in a bid to exploit returns from rents and capital growth, revealed it had doubled to $150m a bond purchase facility agreed with Federal Agricultural Mortgage Corporation.

Farmland Partners unveiled an extra $30.9m in bonds issued under the facility from the corporation - better known as Farmer Mac, which was created by the US government to provide a secondary market in agricultural mortgage borrowings.

Even so, at a total of $81.1m, Farmland Partners total issuance under the Farmer Mac programme leaves significant headroom for further borrowings.

'Increased acquisition capacity'

Indeed, the expansion of the loans programme gives Farmland Partners "increased acquisition capacity heading into next year", said Luca Fabbri, the group's chief financial officer said.

The comments came even as the company revealed it had completed the $27.5m purchase of seven row crop farms in South Carolina, totalling 6,819 acres, plus the $3.3m acquisition of a 1,300-acre farm in Arkansas.

Farmland Partners has now spent $128m acquiring 39,000 acres of land since it was listed in April, of which $92m have been spent in the October-to-December quarter, on 22,000 acres.

"The successful closing of the South Carolina acquisition caps a busy fourth quarter," said Paul Pittman, the group's chief executive.

Land prices fall

The purchases also come at a time when some surveys show a retreat in US farmland prices, with Iowa State University estimating that average farm prices in Iowa, the top corn and soybean producing state, fell by 8.9% to $7,943 an acre this year – the biggest drop in 28 years.

However, Farmland Partners quotes data from US real estate professionals' group Ncreif that land returns have not proved negative for any year on records going back to 1992.

Separately, Gladstone Land Corp, a smaller buyer of agricultural land, with a portfolio of some 8,000 acres, last week unveiled the $17m purchase of a 331-acre strawberry farm in California, after itself securing a $75m agreement with Farmer Mac over borrowings.

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CME pursues EU wheat plan as Euronext dogged by harvest fallout

* French grain coops ask CME to hone EU wheat futures plan

* Coops also push Euronext for more changes to its futures

* Operators want no repeat of 2014 harvest quality confusion

By Valerie Parent and Gus Trompiz

PARIS, Dec 22 (Reuters) - CME Group is moving forward with plans for an alternative European wheat futures market, encouraged by French producers who say incumbent provider Euronext has not fixed shortcomings exposed by poor harvest quality in 2014.

 
 
 

Chicago-based CME, the world's biggest derivatives exchange, has met with the French agricultural cooperatives this month to discuss its project and indicated it could launch its wheat futures as soon as March, with September 2015 as a first delivery position, sources familiar with the discussions said.

CME is due to hold more discussions with French operators in January, according to the sources. The talks are an indication of its continued interest despite its low profile since it confirmed in June it was considering wheat as part of a push into Europe.

At the same time, the cooperatives are also talking with Euronext about further changes to its Paris-based wheat futures <0#BL2:>. Operators are reluctant to ditch a proven price benchmark whose liquidity continues to grow, the sources said.

Cooperatives handle most of the grain grown in France, the European Union's top producer, and so are key market actors.

InVivo, a grouping of some 200 cooperatives, confirmed it had participated in discussions with both Euronext and CME.

"Euronext and CME have each proposed solutions that make sense," Stephane Bernhard, head of trading at InVivo, said, declining to give details. "I think there will be some announcements very soon."

A spokeswoman for CME reiterated that the group was exploring a European wheat contract in response to requests from customers, without commenting further.

Euronext's Head of Commodities, Olivier Raevel, said the exchange was in ongoing discussions with market participants. Issues included delivery points and how the market would operate until new quality specifications are introduced in 2017, he said, declining to give further details.


SILOS AND QUALITY TERMS

Heavy rain turned much of the 2014 French crop into lower-grade wheat and prompted the two Rouen port silos that take delivery of wheat traded on Euronext to impose higher quality standards to protect export sales.

Euronext's later decision to toughen its own quality criteria sought to end confusion about whether it was pricing milling wheat or cheaper animal-feed wheat, but the changes will not apply until 2017.

"We had to put up a lot of money this summer to cover ourselves against the lack of clarity about what Euronext prices represented," one source involved in the discussions with CME said. "The problem has not been fixed for 2015 and 2016."

Euronext's reliance on the Rouen export hub for delivery is seen by some as the root of the problem. CME is proposing a wider network of delivery points in France and this has won support from cooperatives active in inland zones, sources said.

However, French operators fear complications if a CME contract traded in dollars and fell under non-French law, they said.

CME is proposing less strict quality terms than in Euronext's 2017 revamp, such as a minimum 180 for Hagberg falling numbers, a measure of bread quality, compared with the relatively high 220 minimum set by Euronext, sources said.

This has led some operators to call for Euronext to add another contract that reverts to a basic milling standard.

Others argue that there is no room for new wheat contracts in Europe, and that the CME should join forces with Euronext. Both exchanges declined to comment on this.

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USDA report says pesticide residues in food nothing to fear

USDA report says pesticide residues in food nothing to fear | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

(Reuters) — More than half of food tested by the U.S. government for pesticide residues last year showed detectable levels of pesticides, though most were within levels the government considers to be safe, according to a report issued Friday by the U.S. Department of Agriculture.

The USDA looked at fresh and processed fruits and vegetables as well as infant formula, apple juice, and other products.

Before allowing a pesticide to be used on a food commodity, the Environmental Protection Agency sets “tolerance levels,” for how much of a pesticide can remain in the food that reaches the consumer. The USDA’s sampling is designed to help ensure that pesticide residues are kept within those tolerance levels.

As has been the case with past analyses, the USDA said it did not test this past year for residues of glyphosate, the active ingredient in Roundup herbicide and the world’s most widely used herbicide.

A USDA spokesman who asked not to be quoted said that the test measures required for glyphosate are “extremely expensive… to do on an regular basis.”

Concerns about glyphosate and other pesticide residues on food have been a hot topic of debate in the United States recently, and contributed to the passage of the country’s first mandatory labelling law for foods that are genetically modified in Vermont earlier this year. Many states are pursuing similar labelling laws. Some local governments have also been trying to rein in pesticide use on food due to health concerns.

Many genetically modified crops can be sprayed directly with glyphosate, and some consumer and health groups fear glyphosate residues in foods are harmful to human health, even though the government says the pesticide is considered safe.

Last year, Monsanto Co., the developer of Roundup, requested and received EPA approval for increased tolerance levels for glyphosate.

The USDA said that for the pesticides that it did test for, 99 percent of the samples showed residue levels within tolerance levels. It said “over 40 percent” showed no detectable pesticide residue, and residues exceeding tolerance levels were seen in a mere 23 samples out of 9,990.

Additionally, residues of pesticides with no established tolerances were found in 301 samples, USDA said.

Of the total samples analyzed, there were 8,526 fresh and processed fruit and vegetable samples, 356 infant formula samples, 756 butter samples, and 352 salmon samples. There were also 14 groundwater samples and 100 drinking water samples, taken, USDA said.

The complete study can be found online here: http://1.usa.gov/1x47ZMG

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China's bean exports to Brazil to soar (kidney beans)

China's bean exports to Brazil to soar (kidney beans) | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Not all Brazil's agricultural trade with China is as an exporter.

Sure, Brazil is the top origin for Chinese imports of the likes of sugar (1.92m tonnes in the first 11 months of 2014) and soybeans (31.8m tonnes up to November, ahead of the 22.2m tonnes sourced from the US).

But for kidney beans, the cargos are moving in the opposite direction.

Brazil, for which, like many other Latin American countries, beans and rise is a staple, relies on China, besides Argentina and the US, to maintain its kidney bean supplies.

Beans vs corn

That looks like being especially true in 2014-15, after the drought better known for curtailing Brazil's coffee and sugar production hurt its kidney bean output too.

Conversely, China has had a bumper harvest, up 20% at 950,000 tonnes, after high prices, lifted by a poor 2013 crop, encouraged a rise in plantings, the US Department of Agriculture bureau in Beijing said.

"Fluctuating corn prices also encouraged some Chinese farmers to choose planting pulses over corn," the bureau said, also noting benign weather which boosted kidney bean yields in north eastern China, a major producing area.

 Exports surge, prices fall

The increased output in a pulse which is relatively unpopular in China itself, coupled with stronger Brazilian demand, looks like fuelling a jump to 500,000 tonnes in China's kidney bean exports in 2014-15.

That would represent a 60% recovery from last season's levels, which were depressed by weak production.

India, Italy and Venezuela are other major buyers of Chinese kidney beans.

The downside for Chinese growers is that they will receive less for their crop this year – with prices for some varieties halving.

"As of the end of November, the price for black beans was around 4,000-4,100 remninbi ($643-659) per tonne, compared to 5,000 remninbi per tonne during the same period in last year," the bureau said.

"The price for speckled kidney bean is currently around 4,300 remninbi per tonne, while reaching as high as 8,500 remninbi per tonne last year."

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Monster Haul: Georgia Grower Grabs 503 bu. Per Acre

Monster Haul: Georgia Grower Grabs 503 bu. Per Acre | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

The National Corn Growers Association has announced its 50th annual yield contest results, and it celebrated its Golden Anniversary with several record-breaking yields. Randy Dowdy, a Georgia farmer, submitted an all-time high of 503 bu. per acre, and a record six other entries surpassed 400 bu. per acre.

  •  

"While this contest provides individual growers a chance for good-natured competition with their peers, it also advances farming as a whole," says Don Glenn, chairman of NCGA's Production and Stewardship Action Team. "The techniques and practices contest winners develop provide the basis for widely used advances that help farmers across the country excel in a variety of situations, including drought.  This contest highlights how innovation, from both growers and technology providers, allows us to meet the growing demand for food, feed, fuel and fiber."

The 18 winners in six production categories had verified yields averaging more than 383.6 bushels per acre, compared to the projected national average of 173.4 bushels per acre in 2014. While there is no overall contest winner, yields from first, second and third place farmers overall production categories topped out at 503.7190.

"Many of our members first joined NCGA so that they could participate in the National Corn Yield Contest and test their skills as a farmer," says Tom Haag, chairman of NCGA's Grower Services Action Team. "While they join to gain entry, their view of the organization, and corresponding level of participation, evolves.  Once a contest participant looks at our activities and achievements on behalf of all American growers, they see the value in a grassroots approach that unites the voices of corn farmers across the country to affect change.  Reluctant joiners turn into vital members, spokespeople for their industry and active advocates of NCGA membership."

Monsanto sent Dowdy a note of congratulations. The Georgia farmer used DeKalb hybrid DKC62-08 as the foundation for his record-breaking run.

“This accomplishment puts a spotlight on the important role that farmers all around the world play in society, and it showcases the valuable role that agriculture advancements can play in helping farmers achieve optimum and consistent corn performance so they can get the most from their land, wherever they are,” says Monsanto Chief Technology Officer Robert Fraley.


Dowdy says hybrid selection is important, but so is in-season management – and a little help from Mother Nature.

“I was confident DeKalb could deliver and it did,” he says. “From there, I tried to make all the right choices to capture that potential and remove stress.”

Dowdy and other winners receive national recognition in publications such as the NCYC Corn Yield Guide, as well as cash trips or other awards from participating sponsoring seed, chemical and crop protection companies. In Phoenix during the 2015 Commodity Classic, winners will be honored during the NCGA Awards Banquet and the NCYC State Winners Breakfast.

This year saw 8,129 total entries received. A complete list of state and winners is available at http://www.ncga.com/for-farmers/national-corn-yield-contest.

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Palm Oil Production in Malaysia Seen Falling 11% in December

Palm Oil Production in Malaysia Seen Falling 11% in December | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Palm oil output in Malaysia, the biggest producer after Indonesia, will probably drop the most in 10 months in December amid a seasonal decline in yields. Prices climbed to the highest in almost a month.

Production is set to fall 11 percent to 1.56 million tons from 1.75 million tons in November, according to the median of five analyst and trader estimates compiled by Bloomberg. That would be the lowest for December since 2011 and 6.6 percent less than a year earlier, Malaysian Palm Oil Board data show.

Futures in Kuala Lumpur are heading for the third annual loss in four years as global cooking oil supplies expand and a plunge in crude to the lowest since 2009 reduces demand for alternative fuels. Indonesia and Malaysia have scrapped export taxes to help cut reserves. Output typically declines from November through February because of the low-production season and as rains disrupt harvesting.

“It’s highly dependent on the weather,” Ivy Ng, an analyst at CIMB Investment Bank Bhd. in Kuala Lumpur, said by phone on Dec. 19. “We have a bit of flooding here and there, but we don’t know how long it will last, and which areas are affected, and whether it has affected harvesting. More clarity will be seen at the end of the month.”

Futures rose as much as 1.2 percent to 2,236 ringgit ($639) a metric ton on Bursa Malaysia Derivatives today, the highest level since Nov. 27, before trading at 2,235 ringgit by 4:49 p.m. local time. Prices have declined 16 percent this year.

Rain Ahead

The northeast monsoon brings widespread, continuous rains which often cause floods along the east coast states of Peninsula Malaysia from mid-November to early January, the Malaysian Meteorological Department said in its monthly report. The precipitation usually reaches Sabah and Sarawak from late this month until early February, it said. The two states are the largest producers of palm oil.

Traders are monitoring output in December to see if the country can reach its full-year target, according to Chandran Sinnasamy, executive director at LT International Futures Sdn. in Kuala Lumpur.

Malaysia may produce a record 19.5 million tons this year from 19.2 million tons in 2013 on higher yields from fresh fruit bunches, the Finance Ministry said Oct. 10. Adding the survey estimate to Palm Oil Board data for the first 11 months gives output of 19.86 million tons.

Inventories may decline 4 percent to 2.19 million tons by the end of the year from a month earlier, according to Alan Lim, an analyst at Kenanga Investment Bank Bhd. He expects output to drop 11 percent in December from November and to extend the decline in January, keeping prices above 2,100 ringgit, he said. Production, which reached a record 2.03 million tons in August, should recover in April, Lim said. 

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U.S. Market Share in Egypt Regains Footing Following 2013

U.S. Market Share in Egypt Regains Footing Following 2013 | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

This week’s U.S. Grains Council’s (USGC) Chart of Note illustrates the significant market share that U.S. corn has regained in the Egyptian market compared to last year.

Following the United States’ record 2013 corn production of 355.3 million metric tons (13.9 billion bushels), U.S. corn sales to Egypt rebounded to more than 3 million tons (118 million bushels) from January to November 2014, compared to almost nothing during the 2013 calendar year. As the chart shows, this has made the United States the largest supplier of corn to the Egyptian market this year.

U.S. corn has been arriving in Egypt regularly each month in the 2014 calendar year, with no Ukrainian corn or other Black Sea-origin corn coming in during the summer months. However, Black Sea-origin corn did come in this fall as new crop Ukrainian corn became ready for export.

The Council will work to carry this momentum into 2015 as the predicted record 2014 U.S. corn crop of more than 365 million tons (14.4 billion bushels) hits the export channels. 

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Chinese Policy Hard on Soy Farmer Chinese Farmers Will Plant Less Soybean Because of New Target Price Subsidy

Chinese Policy Hard on Soy Farmer Chinese Farmers Will Plant Less Soybean Because of New Target Price Subsidy | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

BEIJING (DTN) -- Dewen Sun is not sure whether he should sell his soybeans or keep them for a while. First, he does not know the price trend in the following months, and second, he does not know whether he will still be qualified to receive the government subsidy if he sells his soybeans now.

"I have about 3.5 tons (128 bushels) of beans to sell this year. But, I may keep it for a while and see how the regulation goes," said Sun, a farmer in Jilin province. Sun is also a small seed dealer in his town.

China's government announced in January that the country will stop the floor price purchase program of soybeans this year and will change to a target price subsidy policy for new-crop beans in 2014. Five months later, the National Development and Reform Committee (NDRC) said the target price would be 4,800 yuan per ton (U.S. $21.07 per bushel).

"This price is 200 yuan per ton ($0.87 per bushel) higher than last year's floor price. But, the detail of how to implement the regulation has not been released yet," said Yan Fang, deputy director of the Rural Economic Bureau of NDRC.

Though $21 per bushel is already a high price, the local farmers and provincial government officials were requesting an even higher target price. "Requests from different provinces for target price was between 5,200 to 5,600 yuan per ton ($22.82 to $24.58 per bushel)," said Zhonghua Wang, a market analyst in Beijing.

The market price of domestic beans in northeast China is around 4,000 yuan per ton ($17.55 per bushel) in December, while the price for imported soybeans in east China ports is $14.83 per bushel.

"After the price is set, farmers want to know when and how they can get their subsidy," said Wang.

"The subsidy will be based on the market price from October 2014 to March 2015. Government will observe the local market price of each region to find the average market price," said Wang, "and then, the progress may look like this: The central government will wire the subsidy funds to provincial government accounts at the end of April 2014 according to the difference between the target price and the average market price; provincial governments will release the funds to the county level governments in the middle of May, according to the statistics of soybean acreage (or tonnage); farmers will finally get the subsidy at the end of May, after they finish planting the soybean crop in 2015."

Farmers believe that even with the target price subsidy, soybeans are not a profitable crop compared to corn and rice. "The profit of one hectare of soybeans is only 700 yuan ($45 per acre), but the profit of the corn crop per hectare will be 3,500 yuan ($228 per acre). They are all lower than last year, but the differences are the same. This is why the local farmers want to plant less beans," said Sun.

Practically, the application of the new policy will also discourage the farmers from planting soybeans. "If farmers sell their beans to local dealers, they will not be able to get an official receipt. This will make it difficult to pay the price difference to the farmers if the government

Another worry is about the progress of the subsidy. Farmers normally prepare next year's crop in the winter and spring, then plant corn and beans in April and May. "If farmers only get their subsidy at the end of May, that means that the farmers will not be able to get their subsidy before they plant next year's crop. This will greatly affect farmer interest in planting soybeans," said Wang.

The confusion and delay of the policy, plus the slow process of the subsidy may lead farmers to plant more corn and rice and less soybeans in 2015.  

wants to make the subsidy on their production," said Wang, "But, if the government wants to base the subsidy on acreage, it is hard to measure the acreage after harvest." The realities make the application of the policy difficult. 

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United States Drought Monitor December 23, 2014

United States Drought Monitor  December 23, 2014 | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

(Note: The weather summary covers the full 7-day period – to 12Z Dec. 23; some product tools only cover the first 6-day period – to 12Z Dec. 22 due to the holiday-shortened, 1-day early release time constraints). Early in the week, another in a series of Pacific storm systems (since after Thanksgiving) impacted the West Coast, with the bulk of the heaviest precipitation (4 to 8 inches, locally to 12 inches) shifted a bit farther north into western Oregon instead of north-central California as observed during the previous two weeks. Still, decent precipitation (more than 2 inches) fell as far south as central coastal California and on the northern Sierra Nevada Mountains, with lower amounts (an inch or less) to the south. To the east, as a storm system and associated cold front departed the Atlantic Coast, the southern section of the front became stationary in the Gulf Coast. Waves of low pressure developed along the stationary front and tracked northeastward, triggering showers and thunderstorms along parts of the Gulf Coast region. Moderate to heavy rains (more than 2 inches) fell on southeastern Texas, southern sections of Louisiana, Mississippi, and Alabama, and north-central Florida. Toward the end of the period, a change in the upper-air pattern over the West (ridging) brought drier and colder conditions to the region, while a storm in the Nation’s mid-section generated light to occasionally moderate precipitation to most of the eastern half of the U.S. In Hawaii, light showers were generally limited to windward locations except toward the end of the period (Sunday into Monday) when more widespread, heavier rains fell across the western islands of Kauai and Oahu. In Puerto Rico, moderate to heavy (1-4 inches) rains fell across northeastern and central sections, enough to deter the spread of the small D0 area northward. Weekly temperatures averaged well above-normal in most of the West, Plains, upper Midwest, New England, and Alaska, and near- to slightly above-normal in the southeastern quarter of the Nation.

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Monsanto and DuPont drop patent lawsuits against each other

Monsanto and DuPont drop patent lawsuits against each other | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Monsanto Co. and DuPont Co. have reached a settlement over patent infringement lawsuits that will end, for now anyway, a years-long battle which saw dueling litigation between the two seed sellers.

The companies announced Tuesday they had settled and agreed to dismiss their patent infringement lawsuits against each other in U.S. District Court in St. Louis. Upon dismissal, Monsanto and DuPont will have no other litigation pending against each other, the companies said.

Monsanto's lawsuit against DuPont alleged that the latter had infringed on Monsanto's seed chipping technology. That technology allows Monsanto to extract small pieces of seeds for genetic analysis without killing the seed embryo. The innovation sped up the pace of research for Monsanto by allowing scientists to perform analysis without having to wait through a plant's life cycle to take genetic samples from the plant itself.

DuPont's suit accused Monsanto of infringing on Dupont patents related to seed processing.

Monsanto president and chief operating officer Brett Begemann and DuPont Pioneer president Paul Schickler said in a statement that the agreement will allow the two companies to focus on new solutions for farmers. Terms of the settlement were not disclosed.

In March 2013, the two companies agreed to drop their respective antitrust and soybean patent lawsuits against each other and enter into licensing agreements for genetically modified crops.

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Pork industry could feel strain of herd expansion

Pork industry could feel strain of herd expansion | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Could an increase in hog production challenge existing packing capacity? That’s a question some analysts are asking as the industry moves forward with breeding-herd expansion.

“Excellent profits in 2014 and corn prices in the $4 range are expected to further bolster hog numbers in 2015 and 2016,” say Steve Meyer and Len Steiner with the CME Group. “The question is whether at some point in the fall of 2016 the industry once again bumps against slaughter capacity constraints.”

Some of those questions will be answered when the USDA releases its quarterly Hogs and Pigs Report Dec. 23. Meyer and Steiner say breeding-herd numbers should provide a good indication regarding the size of herd expansion.

Meyer estimates the nation’s weekly slaughter capacity at 2.438 million head per week.

“Based on current projections, we will likely have about 5 percent of spare capacity in the fourth quarter of 2015, but that forecast reflects estimates from the September report,” he says.

“There is a good chance that the slaughter numbers for next fall may be revised higher to reflect the improvement in the pig crop and a larger breeding stock as of Dec. 1.

The industry has seen reduced PEDV death loss compared to winter a year ago, which Meyer and Steiner say should result in more market hogs.

“Is it possible that we may run out of hog processing capacity, similar to what happened in 1998?” they asked. “This is always a risk that hog producers need to be aware of.”

The opening of a new packing plant in Coldwater, Mich., could help with slaughter capacity. The new plant is owned by the Clemons Food Group, based in Hatfield, Pa. The plant is expected to process roughly 10,000 hogs per day, and is scheduled to open in the fall of 2017. It will add 0.4 of a percent to U.S. capacity.

“The last survey indicated a notable improvement in gilt retention, and it is likely we will see this trend continue,” Meyer and Steiner said.

“A lower sow slaughter during September-November and a modest 4 percent increase in gilt 

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U.S. 2015 farmland rents soften with grain prices, but still high

Dec 23 (Reuters) - U.S. farmland rents for 2015 are on track to be down 5 to 10 percent from the top fees of a year ago due to lower grain prices, but landowners remain stubborn about deeper cuts and some are adding clauses to boost revenue if grain prices bounce back.

More than half the 230 million acres of corn, soybean and wheat land in the United States are rented. Rents, the biggest cost in growing crops, doubled during the farm boom of the past six years.

"Most of the bankers I've talked to indicate the market is more flat than what we thought. We are still seeing 5-10 percent down from the extreme tops in the really strong markets where cash rents had been above $400 an acre," said Jim Farrell, chief executive of Farmers National in Omaha, Nebraska, the largest U.S. farm management company.

Farrell, who expects most 2015 leases to be signed by year-end, said there has been less deterioration in fringes of the Corn Belt where rents are lower than in Iowa and Illinois.

"It's been holding fairly steady in response in part to the increase in grain prices that happened since the end of September."

Corn prices fell to a five-year low of $3.18-1/4 a bushel in October on abundant harvests. Prices are up $1 since then. Soybeans and wheat, which follow corn in acreage numbers, saw similar bounces.

Paul Taylor, Illinois Corn Growers Association director, said he has been able to cut his rents slightly but if a farmer was paying close to the average rate, the rent will change little.

Rent reductions remain subject to local relationships between farmers and landowners, and to farmer competition for land.

"Some land owners just don't want to" cut rents. Their logic is, 'Hey, you don't want to do it I've got five other guys who will pay what I'm asking," Taylor said.

Landowners must guess on any boost to farmer incomes due next October when farmers receive 2014 crop payments tied to the new federal farm bill.

But volatile grain prices have prompted landowners to get creative, with many adding "variable" clauses to 2015 leases. If prices bounce back, they will share the good fortune.

"Well over 50 percent of our cash rent leases for next year will have a variable rate component. It will be based on price or yield or combination of both," Farrell said

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Despite Aches and Pains, U.S. Deliver Aging Transport Network Moves Record Exports

CHICAGO (DTN) -- Grain industry consultants are calling it a "November to remember."

Barge freight rates peaked in September as oil tankers, fracking sand and soybeans competed for space on the Mississippi system. (Chart courtesy of Informa Economics)

Ag customers may give North American railroads a failing grade for most of 2014. Backlogs cost Dakota and Minnesota growers hundreds of millions of dollars. Shippers screamed when barge surcharges soared to record levels in September. But at a critical hour during the 2014 harvest, the U.S. transport system eked out a major win for U.S. agriculture.

Long term, that signals to U.S. export customers that North American farmers can deliver timely shipments even under duress, trade consultants contend.

"The railroads actually did a good job despite the backlogs we saw for the first half of the year," said DTN Cash Grains Analyst Mary Kennedy. "More significant is that the river was able to handle the extra volume despite the flooding in June and the late start to the shipping season this spring."

One lesson is that when buyers demand just-in-time delivery, "we can attract the resources to move it," said Ken Eriksen, Informa Economic's senior vice president for transportation. That achievement is even more remarkable, considering that Eriksen said the nation's aging infrastructure is "not just showing wrinkles and gray hair, but broken hips and a need for knee replacements."

It also supports a recent study by HighQuest Consultants that found the U.S. far more punctual as a supplier than our major export competitors. In calendar 2009-2013, soybean shipments from Brazil averaged 15-day delays from their expected arrival date, HighQuest said. Argentina averaged delays of seven days and the U.S. averaged three-day delays. Even with widespread 2014 railroad backlogs in the U.S., HighQuest's Managing Director Bill Devens doubted that scenario has changed much.

LOVE-HATE RELATIONS

No one claims the U.S. transport system is perfect. Small shippers requiring less than 100-car unit trains have cried foul for most of the past year. Some are still experiencing an average of 30-day past dues on their service schedules. However, now about half of the nation's rail delays are localized in North Dakota and Nebraska, Eriksen said. Those states are running about 10,000 cars behind, but there are better track records in the rest of the country. Railroads are also spending about $20 billion in upgrades this year alone to address congestion.

The transportation system "had to do something phenomenal" to move record exports -- more than 500 million bushels of grain -- in both October and November 2014, Eriksen emphasized. Approximately 60% to 70% of that volume was soybeans and 70% of that was shipped to a single destination -- China.

The issue for both North and South America is that when China wants all of its needs in a very narrow window, Eriksen said, "We've demonstrated we can do it."

EXPRESS DELIVERY

Moving the volume of grain needed to meet global food demand over the next few years is critical. Informa expects the U.S. to shatter the 2007-08 record volume of ag exports in 2016-17, when it sees corn shipments again topping 2 billion bu. Longer term, the

At the moment, the export surge is causing a head-on collision with demand for rail tankers from the Bakken and other North American oil fields. Due to a lack of pipelines in the right positions, Americans are shipping about 16,000 tankers of oil per week, up from about 6,000 per week in 2009, Eriksen said. The recent crude oil price collapse won't stem that volume, it will just slow the rate of growth, he added.

Barge freight rates peaked in September as oil tankers, fracking sand and soybeans competed for space on the Mississippi system. (Chart courtesy of Informa Economics)

Once drillers get a hole in the ground and extraction equipment in place, the variable cost for Bakken production is only $5 to $10 per barrel, Informa estimates. Given the complexity of attracting labor to western North Dakota, Eriksen and others believe oil companies will want to keep their crews employed through the temporary oil bust, so oil will continue to flow.

A bigger concern for Eriksen is the status of the river system. Overflow from rail congestion triggered a spike in tariff rates for barges this fall. At peak, prices hit 1,100% above tariff (see chart). Not only are barges handling more crude shipments, but fracking sand from Minnesota and Wisconsin competes with grain for shipments south on the Mississippi. The crew to move two-tanker barges requires the same size crew as a 35 to 40 barge grain shipment, Eriksen pointed out.

Once the Panama Canal expansion opens for business in 2016, larger ships will be able to handle 45% more grain capacity than they currently handle today. That has potential to draw corn and soybeans from as far as 160 miles from the Mississippi and its tributaries, up from the traditional 70-mile range. Whether the barge industry can acquire enough grain crews and covered hoppers to accommodate that volume is another question.

The tax package signed by President Barack Obama this week includes a measure to increase the user fuel tax, effectively raising about $40 million a year for inland waterway improvements, but Illinois waterways alone need about $600 million in deferred maintenance, he said.

"With mountains of grain sitting out there, transportation is your friend," Eriksen tells U.S. farm audiences, "but it's not always friendly

World Food Organization believes developing countries will need to more than double their imports of cereal grains between 2008-09 and 2050. That's the equivalent of another 6.6 billion bushels of corn demand, grain exporter CHS Inc. says.

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In Depth: Chicago ag markets summit

I was in Chicago in early December attending DTN’s Ag Summit 2014. I have been covering the event since 2011 and it is always takes place in Chicago, which has become my favorite city in the United States.

At this year’s event Darin Newsom provided a bullish outlook for old crop corn, soybean and wheat prices, Bryce Anderson said we’re already experiencing El Nino weather, which should result in big crops in the western hemisphere in 2015 and Brian Schouvieller said North America will add six million tonnes of annual urea fertilizer production capacity by 2018.

You can read about those topics and more in the articles listed below.

Video: Views of a market contrarian:

Grain market fundamentals are ugly, but the technical charts paint a completely different picture, says a leading analyst.

That’s what prompted Darin Newsom to title his annual grain industry outlook, “Here Comes the Sun.”

“My way of looking at things is in complete contrast to everything that we think we know about the markets at this point,” DTN’s senior analyst told the 770 delegates attending the company’s annual summit. (Full story)

Video: New U.S. fertilizer plants may spark cheaper prices in Canada:

New nitrogen fertilizer plants will put a dent in North American imports starting next year, says one of the companies building a facility.

A dozen plants either under construction or nearing the construction phase will add six million tonnes to North America’s annual nitrogen fertilizer production from 2015-18.

That should put downward pressure on fertilizer prices because of cheap North American natural gas and reduced transportation fees. (Full story)

Canal expansion good for U.S. trade:

One of the world’s most efficient grain shippers is about to get better.

The third lock of the Panama Canal will transform the way U.S. corn, soybeans and wheat moves to export markets when it opens for business.
 (Full story)

Argentine presidential candidate pledges to overhaul export taxes:

One of the frontrunners in Argentina’s presidential election campaign is promising to reform the country’s export tax on crops.

Sergio Massa, head of the Front for Renewal party, says he would eliminate taxes on wheat, reduce the duty on corn and sunflowers and gradually decrease the tax on soybeans.

It would have a profound impact on the competitiveness of Argentina’s grain and oilseed exports, said an expert in the field.
 (Full story)

Trouble brewing for U.S. transportation system:

The U.S. grain transportation system that has been the envy of the world for decades is suddenly in trouble, according to two experts.

“It’s very vital to the agriculture industry that this transportation system works smoothly, and most years it does,” said Brian Schouvieller, senior vice-president for agricultural business with CHS, the largest agricultural co-operative in the United States.
 (Full story)

Russian agriculture doing fine despite global sanctions:

Economic sanctions do not appear to be hurting Russian agriculture, says a John Deere official.

“They’re planting, they’re producing and we don’t see a decline right now,” Derek Boudreau, country manager for John Deere Russia, told the DTN Ag Summit 2014.

A number of countries imposed sanctions on Russia this spring after it annexed Crimea.
 (Full story)

15% ethanol mandate puts cart before horse:

E15 blends will not break down the ethanol blending wall, says an energy analyst.

The wall was erected last year when the U.S. Renewable Fuel Standard required oil companies for the first time to blend more ethanol than could be consumed in 10 percent (E10) blends.

Blenders bought Renewable Identification Number paper credits instead of actual ethanol to comply with the federal mandate.
 (Full story)

Video: El Nino’s warming expected to bring mild winter, ease drought:

There is a growing consensus that El Nino has finally arrived, which means another good year for crop production.

“We think El Nino has been in place probably since August,” said Bryce Anderson, DTN’s agricultural meteorologist. (Full story)

Rainfall forecast looks good for South American producers:

South America’s corn, soybean and wheat crops should benefit from a weak El Nino that is already in place, says a meteorologist.

“There is an 86 percent correlation between El Nino and above average rainfall in southern Brazil and Argentina,” said Bryce Anderson, DTN agricultural meteorologist.
 

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China approves imports of GMO Syngenta corn, Pioneer soy

China approves imports of GMO Syngenta corn, Pioneer soy | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

BEIJING/CHICAGO (Reuters) — China has officially approved imports of a type of genetically modified corn at the centre of a string of lawsuits over U.S. grain shipments, seed maker Syngenta AG said on Monday, ending uncertainty after a five-year review.

China, the world’s largest soybean importer and fastest-growing corn market, also cleared imports of a DuPont Pioneer soybean variety, confirming the last of three expected approvals of GMO crops from different seed companies.

Beijing has been taking longer than in the past to approve new biotech crops amidst growing consumer sentiment against GMO food in China and concerns amongst some government officials about excessive dependence on U.S. food supplies. The delay upset global corn trading in the past year and cast doubt over the future of seed companies’ heavy investments in research of GMO seeds, which can take up to 10 years and US$150 million to develop.

“It’s positive we’re seeing movement” in China’s regulatory system, Pioneer spokeswoman Jane Slusark said.

Syngenta’s Viptera corn has been under scrutiny since late last year, when China began rejecting U.S. corn shipments after detecting traces of the unapproved strain, known as MIR 162. The strain has been approved for planting in the United States since 2010 but lacked Chinese import approval.

The rejections, which later extended to distillers’ dried grains, a byproduct of corn, roiled global prices and led farmers and traders Cargill Inc. and Archer Daniels Midland Co. to sue Syngenta for hundreds of millions of dollars in damages.

China’s approval of MIR 162 corn, engineered to fight pests, covers grain and distillers’ dried grains for food and animal feed use, according to Syngenta.

Several large importers in China said they were unhappy over what they saw as a lack of transparency in Beijing’s handling of the approval, which likely gave state-owned buyer COFCO an unfair trading advantage. The government’s decision also reignited debates on the safety of GMO food on China’s lively micro-blogging sphere.

The Pioneer product China approved combines a trait, known as Plenish, designed to produce healthier oil with a trait designed to control weeds. Beijing had previously approved the Plenish trait and did not officially require approval for the combined, or stacked, product, according to the company.

Pioneer sought approval as “a proactive measure in case China changed its regulatory rules,” said Slusark, the company spokeswoman.

Bayer CropScience on Friday received Chinese import approval for a GMO soybean variety seven years after applying for acceptance.

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