The farm on which I grew up has changed hands — probably more than once — since my parents passed away. My brother worked the land for a while, but the era of small dairy and hog farms with 120 acres of corn and alfalfa is a few decades behind us.
I enjoyed the farm — even with all the work we had in front of us every day. My siblings might argue that I enjoyed socializing with other farm kids even more so. Probably true. County fairs and showing livestock were great … and just happened to be where I met the guy who became my husband.
Working on Feed & Grain in my adult life has given me a different perspective on agribusiness. I have a better understanding of global demand and transportation infrastructure issues, of the challenges of high-efficiency throughput and top-flight feed manufacturing. But I also understand, because of my background, the foundation of agriculture: hard working men and women who think smart and work smart every day to feed the world. Those who help them to become more efficient are a key element of every farm’s success.
It’s fitting then, to note that in my hometown of Evansville, WI, Landmark Services expanded its grain shuttle facility, adding storage, a new grain dryer and improving receiving and load out in 2013. All part of a significant investment in helping their customers have more and better options serving the world’s food chain.
There are times when I shake my head in wonder at the technology, capacity and speed of today’s modern facilities. I
wonder what Mom and Dad would think to see agriculture, though it passed us by, growing and strengthening in that little corner of the world. I believe they’d be proud that, for a couple of generations, they laid the foundation for an ag community that continues to grow.
I’ve written recently about the changes in the world of media, and of our acquisition by the American Farm Bureau Federation. There is a link, I’ve realized, that we’d been missing at Feed & Grain. That link is agriculture. As part of a media company, we were one brand among many. As part of the Farm Bureau, we are as we were in Feed & Grain’s roots, surrounded by “aggies.” And it makes me feel at home again.
Perdue Farms has been accused of trying to profit off of the increased customer concern over where the foods they buy are coming from. Wendy Roy of Palm Bay, FL, who filed the lawsuit, claims that Perdue follows the same guidelines, set by the National Chicken Council, as most of its competitors, but tries to fool customers into believing that the chickens they raise are better treated. The lawsuit is attempting to be classified as class action so that other customers will be able to join in. The language in the lawsuit insinuates that current practices used by the industry are “a system of mechanized brutality,” which gives merit to Perdue Farms’ counter claim that the Humane Society of the United States is attempting to use this lawsuit in order to attack their brands. The company also claims that it goes further than NCC guidelines in ensuring that its chickens are humanly treated. A similar lawsuit against Perdue Farms from 2011 is still being played out in the court system after a judge threw out many of the claims.
A large fire broke out on Oct. 24 in Gordon, NE, at the Gordon grain elevator. The fire took teams of firefighters from the surrounding counties and North Dakota to contain. It was contained by noon the first day, but crews doused hot spots and flare-ups into the early hours of the next day, soaking the grain with an estimated 1,900 gallons/minute of water. The cause of the fire is unknown, but spontaneous combustion of grain is believed to be responsible.
The USDA reports fall into the category of things that you don’t miss until they’re gone. After the U.S. government shutdown of last month, it was nice to see a new USDA report. Corn jumped 20% with this week’s closing in on the five-year average. Soybeans jumped 14%, bringing it even with the five-year average. With the release of this week’s report, both corn and soybeans have climbed just above their five-year average.
While adjusted earnings were down $0.07/share from ADM’s third quarter last year, net earnings were up to $0.28/share. Other highlights included an increase in oilseeds processing profit of $25 million along with a $91 million increase in corn processing profit. Agricultural services profit did decline $122 million though, due to weak exports. ADM’s net debt is down to $3.4 billion.
This is a story that we’ve followed closely at Feed & Grain. Our south-central Wisconsin home in Fort Atkinson is a mere 20 minutes from Milton, WI, and the death of Jerad Guell deeply affected the community we live in. United Ethanol has been cited with 15 violations, 12 of which were classified as serious and one that was labeled willful. According to OSHA’s Field Inspection Reference Manual CPL 2.103, a violation is willful when “evidence shows either an intentional violation of the Act or plain indifference to its requirement.” The violation in question was the failure to lock out the conveyors that empty bins when an employee is inside. United Ethanol is being fined $140,000 and being placed within a program that requires inspections to make sure that the company is in compliance with regulations.
As always, I want to thank you for reading and remind you to email me if you have any story ideas, comments on what news you want to hear about or just to say hey. Subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.
The Hebei province, China, inked 20 separate deals with Iowa companies, for an estimated total of $1 billion. This continues the Hebei province’s long standing relationship with Iowa that stretches back to 1983. China has made recent deals with U.S. soybean organizations and the Ukraine, as it looks for ways to provide for its growing middle class. Though the details of individual agreements have not been made public, the deal will provide new jobs, economic investment and a continued relationship and access to a giant emerging market.
Alex Rall, an electrician, died in an accident at the Prairie Towers Elevator in Harvey, ND. During the installation of a distributor, a grain chute came loose while being moved. The chute was between 250 to 300 pounds and fell 120 feet before hitting Rall, who was leaving for the day. The accident is still under investigation by OSHA at the time of this writing.
The Water Resources Reform and Development Act did the seemingly impossible; it passed through the U.S. House of Representatives with overwhelming bipartisan support. While the Farm Bill seems to be moving at a snail’s pace, with significant obstacles to overcome on the SNAP nutrition portion, the WRRDA flew through the House with a 417-3 vote and will soon go to a conference with the Senate. The bill was passed by playing up its job making potential and that it affects almost every state. The bill will make moves to allocate money in order to finance a much needed upgrade of the nation’s waterways. Some of the infrastructure being used are approaching their 100th birthdays, and the question of if they will fail has been replaced with when they will fail. Because other nations that are in direct competition with the United States are upgrading their infrastructure, the United States’ upgrades are a must in order to stay competitive in the global marketplace.
After going dark for two and a half weeks due to the government shutdown, the USDA released its first crop report of October. Wet conditions are slowing down the harvest in much of the Corn Belt, and the crop report reflects this. Corn harvested is 14 percentage points behind the five-year average and 46 points behind last year. Luckily, the maturity of the corn crop has grown to 94%, just about the five-year average. Soybeans are at 63% harvested, a 50 point rise from the last report in September and close to its five-year average.
Cargill’s new horse feed plant in Strathroy, Ontario, opened on Oct. 23. The facility will produce its Purina® equine feed and supplements and Loyall® dog and cat food. The facility cost around $11 million to build and equip and was necessary for Cargill’s goal of meeting the increasing quality demands of its customer.
It’s hard to believe, but this week’s Views marks our fourth month with the new format. As always, I want to thank you for reading and remind you to email me if you have any story ideas, comments on what news you want to hear about or just to say hey. Subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.
It’s a refreshing change of pace to be able to report a happy ending to a grain entrapment incident. Initially, three men were trapped inside a 125,000-bushel silo; the other two became trapped when they went in to try and save them. By the time they were rescued, one man was covered up to his neck in the grain, another up to his chest and the rest up to their knees. The fire department vacuumed out the grain around the workers and cut holes in the tank to drain it. Rescue tubes were also used, but it is unclear how effective they were. This year’s wet conditions make grain engulfment more likely to occur, so make sure to stay safe.
The scaled back blending mandates that this report suggests may have an impact on the availability of corn for feed next year, but its effects may be felt far into the future. In it, the EPA not only acknowledges the blend wall, but also notes that it is an important factor to consider. This report confirms what oil advocates have been saying for years and may lend credence for requests for individual mandates by refineries. The report also goes against increasing the amount of fuel blended with higher 10% ethanol, mirroring statements made by refineries. It says “Few retailers are able to sell ethanol blends beyond the 10 per cent maximum, or willing to take the legal risk that comes with it.” Although the future of the Renewable Fuel Standard is still uncertain, both sides seem prepared to take their issues with the EPA’s blending requirements to court, with oil groups suing over the 2013 mandate and biofuel groups getting ready to do the same for 2014.
Part of the system that was moving grain between silos in Huron County, Ohio, became clogged and caught fire. It took 12 firefighters to put out the blaze. Even though the fire took only a few hundred gallons of water to extinguish, it was a challenge for the local firefighters due its location about 150 feet in the air. No one was hurt during the incident, and other than the lost grain, the damage was minor.
Due to the events covered in the No. 1 news story (Five Men Rescued from a Grain Bin), The North Carolina Department of Labor is looking into the operations of George Wood Farms. The investigation is making sure that the employees were properly trained and that all safety regulations were followed. They will also look for past incidents.Though the company was cited once for missing safety signs, it has never been fined.
While the Corn Belt had a wet spring that delayed planting, followed by a dry summer and then a wet fall, the South has dealt with only one weather condition, an omnipresent drought. Going into its fourth year, the extreme drought that is plaguing the region has claimed another victim, the Lockney, TX, cattle feed yard. The yard will be closed next summer due to dwindling supplies. The area’s ranchers have been forced to cull herds due to lack of pasture lands and the high cost of feed in recent years.
That’s it for this week. I want to remind you to email me if you have any story ideas, comments on what news you want to hear about, or just to say hey. Subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.
Basis levels tapered their decline this week with corn basis off 2 cents on the week and soybean basis unchanged
Grain basis levels were mostly steady to weaker over the last week as harvest continues to add supplies to the pipeline. For the week, US average corn basis was down 2 cents a bushel while soybean basis was unchanged.
For corn, much of the weakness this week was confined to the Northern Plains and Western Cornbelt as corn supplies start to ease the premium offered at key end users. Ethanol plants as a group were off 5 cents this week across the US, but losses of 10 cents or ore were fairly typical in the Western Cornbelt. However, in far reaches of Northern Wisconsin, some grain buyers continue to hold strong with +50Z still being offered for fresh supplies. At river terminals, basis levels held mostly stable as strong export demand continues to underpin river markets.
In soybeans, basis levels were not as well defined with southern stretches of the country starting to show basis strength as harvest concludes while northern markets were generally steady to weaker for the week. At soybean plants, Eastern Cornbelt plants were generally steady to slightly higher on the week, while plants in the West were generally weaker. River markets were generally weaker for the week with losses of a nickel on basis being fairly commonplace.
The longstanding lockout of International Longshore and Warehouse Union workers by United Grain and Columbia Grain had a rollercoaster week. The two sides have agreed to resume negotiations for the first time since last spring, with the Port of Vancouver even offering to pay for a mediator to try to get the two sides to settle their disagreements. But with that came news of a lawsuit filed by Tidewater Barge Lines over some of the picket lines set up by the union. Tidewater Barge Lines claims that the water bound picket lines have negatively affected their business even though they are a neutral third party. Tidewater cited instances where their unionized workers refused shipments from Columbia Grain in a show of support, along with instances of impeding barges and tug boats. International Longshore and Warehouse Union stated that they are well within their rights to free speech. Disrupting the business of a neutral third party is illegal under the National Labor Relations Act.
Dakota Plains Cooperative, a Valley City, ND-based organization, voted to merge with CHS Inc. The deal now only has to make it past the CHS board of directors before being made final. Dakota Plains had $135 million in sales during its last fiscal year and offers agronomy, seed, feed and energy services and products to its members. Dakota Plains cited three main reasons for the merger: the desire to keep up with its members’ needs,, CHS’ ability to keep up with new technology and CHS’ ability to offer members a wider range of services.
The dispute between the U.S. Environmental Protection Agency and the oil industry over the Renewable Fuel Standard escalated on Oct. 10 when the American Petroleum Institute filed a lawsuit with the Washington, D.C. Circuit Court. The American Petroleum Institute is a lobbying organization that represents the oil industry and has been one of the leading organizations pushing for the repeal or delay of the RFS. This lawsuit pertains to the 2013 requirements for the national fuel volume mandate, the level of biomass-based diesel, advanced biofuel and cellulosic biofuel that must be blended with oil-based fuels. The AIP’s reason for filing the suit is the late issuing of the mandate (nine months after the deadline) and a cellulosic biofuel requirement that is well above what is currently being produced. The Renewable Fuel Association claims that the lawsuit is frivolous and is searching for a problem before one emerges.
A Salmonella outbreak has emerged in the midst of the U.S. government shutdown, with the USDA and CDC working with a diminutive staff. There have been at least 300 cases of Salmonella related sickness since the outbreak began with 42% of those of those with symptoms needing to be hospitalized — twice the normal rate. Several strands detected are resistant to antibiotics. The outbreak has been linked to Foster Farms, whose facilities were under threat of shutdown at the time of this article’s posting, but have been allowed to stay open under government supervision.
The debate over Genetically Modified foods continues to plague Monsanto across the globe. Though more journalists and scientists are coming out for GM crops, citing the lack of evidence that they are harmful to humans when consumed and that the few studies that show signs of them being so are flawed, the opposing side tends to drown out their opposition. Monsanto has been forced to delay their corn processing facility in Argentina due to protests by the Argentine Malvinas Assembly over the company’s GM crops.
Well, those are the top five. I want to remind you to email me if you have any story ideas, comments on what news you want to hear about, or just to say hey. Subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.
Corn basis dropped 11 cents amid harvest pressure while soybean basis also lost ground, falling 3 cents for the week ending Oct. 3
Corn basis slid for the sixth consecutive week falling another 11 cents this week amid harvest pressure, while Soybean basis lost 3 cents for the week ending October 3rd.
Harvest pressure has already been affecting basis for a few weeks, so when will basis bottom? Figure 1 illustrates that in more normal harvest year’s spot basis tends to bottom around the first week of October, but with some northern crops still behind in development this year basis lows may still be a week or two away. As of September 30th the USDA reported 12% of U.S corn is harvested compared to the five year average of 23% harvested. Soybeans were 11% harvested compared to the five year average of 20% harvested. Though the rate of basis decline seems to be letting up a bit, we still expect basis to fall more in the weeks to come Soybeans basis lost 3 cents this week, with parts of western Missouri losing as much as 8 cents. Soybean plants dropped their basis by an average of 5 cents this week while river markets bucked the trend and improved 2 cents on the week.On average, corn basis fell 11 cents this week with the largest losses seen in Iowa which fell as much as 20 cents. Ethanol basis contributed to the decline falling 14 cents as new crop grain comes onto the market. Basis in the southern part of the U.S and along the river remained mostly unchanged for corn.
Key Midwestern cities have already started to court ADM after the company announced that it would be moving is world headquarters from Decatur, IL, a relatively small city of 75,000. ADM will only be moving the top level corporate part of their presence in Decatur, amounting to about 100 jobs, while leaving more than 4,000. Though this move may knock Decatur off the map, it is a very big opportunity for whatever city lands No. 27 on the Fortune 500 list. Chicago is considered the front runner, but Minneapolis, St. Louis and Indianapolis all plan to make aggressive pushes for the company.
ADM announced its plans to move its headquarters mere days after it opened a new intermodal rail hub that will give its products better access to the world. The new hub is located in Decatur, IL, in ADM’s processing complex. This rail hub gives ADM direct access to Canadian National, Norfolk Southern Corp. and CSX rail lines. This opening is being lauded for having major potential for other Decatur businesses, as well, giving them unprecedented access to shipment by rail. Craig Coil, president of the Economic Development Corporation of Decatur and Macon County, stated that this was the city’s first step in becoming a Midwest inland port.
CHS announced that it will give a total of $3 million in an effort to make agriculture safer for the next generation. The initiative will be focused on young adults, and have a total of $1 million for a competitive grants program supporting rural safety projects and the remaining $2 million in grants to partner associations. The Agricultural Health and Safety Council (ASHCA), the AgriSafe Network, the GEAPS Foundation, the National AgrAbility and the Propane and Education Research Council (PERC) will be receiving portions of the $2 million in grants to further their safety initiatives. CHS has also promised to work with the organizations in order to gather further donations.
This story is a holdover from last week, showing just how much the coming harvest is on everyone’s minds. The USDA lowered its estimated soybean levels by 70 million bushels in September over its August estimate. This shouldn’t be much of a surprise due to the late planting season for soybeans and the drought re-emerging in key states during a key developmental period. The big surprise is the increase in estimated corn yields, increasing the estimated total harvest by 80 million bushels. As with soybeans, a late planting along with the drought in the Corn Belt during key times makes many experts skeptical of the corn numbers, but more accurate numbers should come in as harvest moves forward.
Cargill continued its string of facility updates, completing a $50 million upgrade of a North Dakota facility that processes canola and sunflower seed into oil used in food processing. The facility has been in operation for 30 years and was modernized with this upgrade along with having its capacity enlarged, keeping it competitive against other products and facilities.
Well, those are the top five. I want to remind you to email me if you have any story ideas, comments on what news you want to hear about, or just to say hey. Subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.
Surprising crop reports, a disease report and two lawsuits top last week
Harvest is ramping up here in Wisconsin as the weather cools and producers want to beat the first frost to the field. Things are also ramping up here at the Feed & Grain office as the press date for our Oct./Nov. issue gets closer. So, if you missed some of last week’s biggest news (there were some big developments) in all of your pre-harvest preparations — here it is handy shortened form.
The top news stories for the week of Sept. 16 are …
The USDA lowered its estimated soybean levels by 70 million bushels over last month. This shouldn’t be much of a surprise due to the late planting season for soybeans and the drought reemerging in key states during a key developmental period. What is a surprise is the increase in estimated corn yields, increasing the estimated total harvest by 80 million over last month. As with soybeans, a late planting along with the drought in the Corn Belt during key times makes many experts skeptical of the corn numbers, but more accurate numbers should come in as harvest moves forward.
Just like last year’s battle in California over GMO labeling, things are turning ugly. In just the last few weeks, the pro-labeling side of the debate has gone from a position of dominance in donations, to being vastly outspent. That’s because of large multi-million dollar donations by companies like Monsanto and DuPont, along with the advocacy group the Grocery Manufacturers Association. The Grocery Manufacturers Association is being sued over its $2.2 million donation by the pro-labeling group Moms for Labeling. The lawsuit claims that the group needs to disclose who donated the money used to fight labeling and to register as a political committee if they wish to donate to specific ballot measures.
For the first time ever, the Centers for Disease Control has reported a connection to antibiotics used in livestock to increasing bacterial resistance that is the estimated result in the deaths of over 23,000 people a year. CDC Director Thomas Frieden is calling for a scale back in antibiotic use and to start regulating their use across all uses. The low but constant dosing in the animal agriculture sector are said to be ideal breading grounds for these super bacteria, though overuse in the medical field is also a problem. The Animal Health Institute states that the problem is being overblown, and that livestock antibiotics can only be linked to two of the 18 noted threats.
There was a fire at Cargill’s Soybean processing plant in Raleigh, NC, on Friday the 13th. The sprinkler system in the facility was effective in subduing the initial blaze, and the fire was under control by 10 p.m. Even so, firefighters stayed on the scene as the soybean smoldered due to the risk of explosion.
In what is being called the "largest tax and securities fraud scheme in Indiana history," Craig Ducey, Chad Ducey, Chris Ducey, Brian Carmichael, Jeff Wilson, Joseph Furando and Evelyn Katirina Pattison are being charged with fraud from knowingly selling lesser biodiesel. The defendants sold 35 million gallons of the biodiesel B99 as B100. The Renewable Identification Numbers they received where worth about $2 more than B99. Not only were they claiming that the fuel was more valuable than it was, but they were relabeling fuel that they had purchased not produced. This means that the RINs had already been claimed for that fuel by the company that manufactured it, and the defendants were claiming again. Prosecutors say that the defendants cheated their customers out of $55 million and the IRS out of $35 million.
Well those are the top five. I want to remind you to email me if you have any story ideas, comments on what news you want to hear about, or just to say hey. Subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.
A grain barge that was reported missing on Sept. 6 was luckily found by a passing tug boat. When found, it was floating down the Columbia River with no lights and no crew. The barge was found before it sustained or caused any damage, which would have been an easy feat for an unmanned but loaded 252-foot-barge. The workers at the dock where the barge was released say that the moorings that held it in place seemed to have been loosened. The barge was headed to one of the ports who have locked out the International Longshore and Warehouse Union since last spring. The union denies having any knowledge of the potential sabotage, but notes that private security and the strikebreaking firm should be examined just as closely during the investigation.
Cargill has named its current president, David Maclennan, as its next chief executive officer. Maclennan has been with the company since 1991 and has held a variety of top executive positions over the last five years. The current CEO, Greg Page, will still be active in the company as the new executive chairman.
It seems that the state of Washington’s legal battle for GMO labeling is where Monsanto and DuPont have decided to stand their ground. Both companies made multimillion dollar donations this past week, propelling the funds of the anti-labeling side of the debate well above those of the pro-labeling side. This is a similar to the California vote that took place last year, where the anti-labeling campaign raised almost five times as much as the pro-labeling side. The California vote was only won by 4%, and with over twenty states bringing similar legislation, two have already passed the measures, it’s unclear if these new donations will be enough.
Iowa’s late season heat wave may have been responsible for a feed ingredient to combust and start to smolder. When the employees at the Gilbert office of Key Cooperative were notified of smoke coming from the bin, they called in local firefighters. The smoldering grain was quickly doused by the firefighters. Luckily, there were only three tons of feed in the bin at the time and though that feed is lost, there is only minor clean-up and water damage to deal with.
A group of organic farmers, seed companies and public advocacy groups sued Monsanto in 2011, to stop Monsanto from suing farmers who have their fields accidently contaminated with Monsanto’s patented genetically engineered crops. The first judge to hear the case issued a ruling that the lawsuit was preemptive, and cited Monsanto’s public stance that it wouldn’t sue farmers in the case of accidental exposure. This June the U.S. Court of Appeals for the Federal Circuit upheld the ruling. That same coalition is now appealing to the United States Supreme Court, hoping for a different outcome. Monsanto released a statement accusing these groups of trying to stir up nonexistent controversy.
Check out the digital issue for Aug/Sept. here. I want to remind you to email me if you have any story ideas, comments on what news you want to hear about, or just to say hey. Subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.