Illinois Grain and Feed Association

News

FarmDoc Daily August 22, 2017

Negative Cash Rent Farmland Returns Since 2014 Reduced Farmer Net Incomes

August 22, 2017

Gary Schnitkey

In recent years, many farmers have had positive incomes. However, cash rented farmland may not have been contributing to those positive net incomes. At average cash rent levels, cash rented farmland has reduced farmer net incomes in 2014 and 2015. Often, positive returns from owned and share rented farmland offset negative returns from cash rented farmland. Herein, returns to owned, share rented, and cash rented farmland are quantified after background information is presented.

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FarmDoc Weekly Outlook 8/7/2017

 

Corn and Soybean Exports Update

August 7, 2017

Todd Hubbs

 

While market observers focus on the changing outlook for corn and soybean yields brought on by the shift in weather patterns over the last few weeks, export markets continue to reveal consumption information relevant to price formation during the current and subsequent marketing years.  Exports will play a significant role in determining prices in both corn and soybean markets moving forward.

 

 

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NGFA, NAEGA outline trade priorities for Trump administration

 

 

 

WASHINGTON, Aug. 1, 2017 – The National Grain and Feed Association (NGFA) and the North American Export Grain Association (NAEGA) submitted a joint statement to the Trump administration this week regarding the performance of free trade agreements.

In response to a solicitation for comments from the Office of the U.S. Trade Representative (USTR) and the U.S. Department of Commerce (DOC) regarding the administration’s assessment of free trade agreements and the nation’s trade relations with other members of the World Trade Organization, the NGFA and NAEGA identified opportunities to update and modernize U.S. free trade agreements and highlighted the urgency in initiating trade negotiations with key Asia-Pacific markets.

Withdrawing from the Trans-Pacific Partnership trade agreement “has created a void that foreign export competitors are aggressively exploiting to the detriment of U.S. agricultural exports and our nation’s economy,” stated the NGFA and NAEGA.

The two groups said key areas that would preserve and enhance U.S. agricultural competitiveness and facilitate trade include not only expanded market access and tariff concessions, but also:

  • improved regulatory consistency and cooperation;
  • removal of non-tariff barriers that lack scientific merit;
  • enabling innovation of information technologies;
  • recognizing comparable regulatory systems for assessing the safety of plant breeding technologies;
  • developing a consistent approach for managing low-level presence (LLP) of biotechnology-enhanced products that have undergone a safety assessment and are approved for use in a third country, but not yet approved for import by a U.S. free trade agreement-member country; and
  • ensuring safe and orderly passage for rail and truck freight transportation.

The organizations also noted their concern about the trading relationship between the United States and the European Union (EU), given the “many unscientifically based and unjustified barriers” erected by the EU to block U.S. grain and other agricultural products from entering its market. “NGFA and NAEGA urge the administration to work with the European Union to remove the barriers and promote a better trading relationship,” the comments stated.

The NGFA and NAEGA concluded by noting they are eager “to work actively, constructively and expeditiously with President Trump and the administration’s trade team” to develop strategies that will “preserve, improve and build upon existing and new trade relationships to benefit U.S. and world consumers.”

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The NGFA, established in 1896, consists of more than 1,050 grain, feed, processing, exporting and other grain-related companies that operate more than 7,000 facilities and handle more than 70 percent of all U.S. grains and oilseeds. Its membership includes grain elevators; feed and feed ingredient manufacturers; biofuels companies; grain and oilseed processors and millers; exporters; livestock and poultry integrators; and associated firms that provide goods and services to the nation’s grain, feed and processing industry. The NGFA also consists of 29 affiliated State and Regional Grain and Feed Associations, and has strategic alliances with Pet Food Institute and North American Export Grain Association.

NAEGA, established in 1912, consists of private and publicly owned companies and farmer-owned cooperatives that are involved in and provide services to the bulk grain and oilseed exporting industry.  NAEGA-member companies ship and support the vast majority of the highly competitive and fungible U.S. grain export supply.  NAEGA is dedicated to providing for efficient, predictable, reliable and expanded trade via responsible commercial and official practices.  Through a reliance on member action and support, NAEGA acts to accomplish its mission from its office in Washington D.C., and in markets throughout the world.

 

Davis to Host Agriculture Committee Leaders at Farm Progress Show

 

Washington, D.C. – U.S. Rep. Rodney Davis (R-Ill.) today announced that he will host House Agriculture Committee Chairman K. Michael Conaway (R-Texas), Ranking Member Collin Peterson (D-Minn.), and other committee members at this year’s Farm Progress Show in Decatur on August 30, 2017. The committee announced today that it will hold a listening session, “The Next Farm Bill, Conversations in the Field,” to gather input from local farmers and agriculture leaders.”The Farm Progress Show is the nation’s largest outdoor farm event and I’m excited to host Chairman Conaway, Ranking Member Peterson, and other members of the House Agriculture Committee at this year’s event in Decatur,” said Davis. “Agriculture policies set in Washington have a major impact on Illinois’ economy. This listening session will give the committee an opportunity to hear from local farmers and agriculture leaders as they gather input for the next farm bill. My goal has always been to give farmers in the 13th District a seat at the table when Washington debates policies that directly impact them and this will be a great opportunity. As chairman of the House Agriculture Subcommittee on Biotechnology, Horticulture, and Research, I look forward to playing an integral part of crafting the next farm bill.”

“As our committee travels across the country gathering input from farmers and ranchers, the Farm Progress Show – in the center of the country – seems like the natural next stop. Thanks to Rep. Davis and the folks at Farm Progress for hosting us. I’m looking forward to a productive conversation in Illinois and encourage area stakeholders to attend and share their ideas for improvements to our next farm bill,” said Conaway.

Further details will be announced in the coming days.

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Springfield District Office
2833 S Grand Ave East
Springfield, IL 62703
P: 217.791.6224
F: 217.791.6168
Champaign District Office
2004 Fox Drive
Champaign, IL 61820
P: 217.403.4690
F: 217.403.4691
Decatur District Office
243 S Water Street
Suite 100,
Decatur, IL 62523
P: 217.791.6224
F: 217.791.6168
Maryville District Office
915 Professional Park Drive
Maryville, IL 62624
P: 618.205.8660
F: 618.205.8662
Normal District Office
104 W. North Street
Normal, IL 61761
P: 309.252.8834
Taylorville District Office
108 W. Market St.
Taylorville, IL 62568
P: 217.824.5117
F: 217.824.5121

 

Washington, DC Office | 1740 Longworth HOB | Washington, DC 20515 | P: 202.225.2371 | F: 202.225.0791

FarmDoc Daily July 20, 2017

Interest Rates and the Cost of Short-Term Borrowing

July 20, 2017

Todd Kuethe and Todd Hubbs

In June, the Federal Reserve’s Open Market Committee (FOMC) raised the interest rate on overnight deposits (the discount rate) 25 basis points to 1.75%, mirroring similar rate increases in March 2017 and December 2016. The long-run expectations of FOMC members suggest that future rate hikes are expected. As interest rates move higher, farmers may see rising interest expenses on their operations. This article examines the relationship between the discount rate and the interest on farm operating loans.

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FarmDoc Daily Update

Daily Update

June 15, 2017

The Role of Weather in the Pattern of Corn Prices over Time

June 14, 2017

Scott Irwin, Darrel Good, and Todd Hubbs

In the farmdoc daily article of June 7, 2017, we examined the long-term pattern of corn prices during the era spanning from 1973 through November 2006 and the new era that began in December 2006. We concluded that: (1) there is a long-run average nominal price of corn for different eras that tends to emerge fairly early in each era; (2) corn prices revert to the average within each era; and (3) the deviations and reversions to the average price do not occur in a predictable cycle in terms of either magnitude of deviations or duration of the deviations. In other words, we argue that long-run crop prices have a stable average within a defined era and adjust to supply and demand shocks in a classic cobweb fashion. However, the price adjustments do not follow the repetitive cyclical pattern of the classical cobweb model, but rather are highly volatile and difficult to forecast due to the substantial variation in supply and demand shocks over time and the exact market reaction to those shocks.

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New ADM Flour Mill for Illinois

 

From world-grain.com

CHICAGO, ILLINOIS, U.S. —Archer Daniels Midland Co. (ADM) announced it is constructing a new flour mill in Mendota, Illinois, U.S. The high-capacity, modern facility will allow the company to continue to meet growing demand for flour throughout the Midwest.

Mark L. Kolkhorst president of ADM Milling
Mark L. Kolkhorst, president of ADM Milling.

“ADM’s new facility in Mendota will help us provide additional capabilities to meet ongoing demand growth in the Midwest, where we are seeing bakers expand their production capabilities,” said Mark L. Kolkhorst, president of ADM Milling. “In addition, our new mill will enable us to drive efficiencies, thanks to the use of new technologies and equipment, and the ability to leverage capabilities of ADM’s existing grain facility in Mendota — such as unloading 110-car shuttle trains. We are pleased to expand our presence in Mendota and continue investing in Illinois.”

During the last two years, ADM has announced projects totaling more than $250 million in the state of Illinois, including the Mendota flour mill, new Animal Nutrition production facilities in Effingham and Quincy, and the company’s partnership with DuPont Industrial Biosciences to produce furan dicarboxylic methyl ester (FDME) from fructose.

The new facility will have a daily milling capacity of 30,000 cwts, and the ability to grind soft and hard wheat varieties. It is targeted to begin operations in mid-2019. When it is fully operational, ADM intends to end production at its current wheat mill in Chicago, Illinois.

According to the 2017 Grain & Milling Annual, ADM Milling’s Chicago, Illinois, mill has a capacity of 13,700 cwts. The company’s total U.S. wheat flour capacity is 286,900 cwts and it currently has 23 mills in the United States.

“We are continuing to create shareholder value by expanding strategically and driving operational efficiencies,” Kolkhorst said. “We are excited about this important investment, and committed to meeting our goals to deliver value for customers and shareholders alike.”

ADM Milling is one of the world’s largest flour millers, with multiple wheat flour mills in the United States as well as in Canada, the Caribbean, Central America and the United Kingdom.

The announcement is the latest in a series of expansions for ADM in the past few months.  In May, the company finished a series of expansions at its export terminal in Santos, in the Brazilian state of São Paulo.  The project added a second ship loading line and a fourth truck unloading station, allowing for more efficient operations.

Also in May, the company reached an agreement to purchase a controlling interest in Industries Centers, an Israeli company specializing in the import and distribution of agricultural feed products. The transaction is subject to regulatory approval in Israel. ADM anticipates completing the deal in the coming months.

In late March, the company began talks to acquire Chamtor, a French producer of wheat-based sweeteners and starches. The transaction is expected to close by this summer.

The company also has been focusing on its pet food and animal nutrition services in the past few months. In mid-January, ADM signed an agreement to acquire Crosswind Industries, Inc., a Kansas, U.S.-based producer of dry-expanded, dual-texture, semi-dry and semi-moist treat products for pets.

Farm Policy News June 1, 2017

Update

June 1, 2017

Latest News Summary

Federal Reserve: Observations on the Ag Economy- May ’17

June 01, 2017

On Wednesday, the Federal Reserve Board released its May 2017 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.

Read This News Summary