At the recent Interconnectivity Conference, held June 26 and 27 in Altoona, IA, several important themes were discussed that will directly impact your business. While I am sure many of you are aware of these trends and needs, there were a few key aspects that need to be tied together.
First, your business as an ag retailer demands that you stay up to speed on all aspects of prescription farming and precision agriculture. Terry Panbecker, manager of Midwest Agronomic Professional Services at New Cooperative in Iowa, pointed out how not only are they providing more and more advanced technology support to their farm customers, they’re also providing technology to other co-ops wishing to grow their technology-as-a-service business.
Second, Carolyn McBeth, a farmer from south-central Iowa, pointed out that while their farm’s original goal was to add acres to build a future for their children to farm, that objective has switched to getting more from each acre, rather than adding acres. Dr. Mike Swanson, ag economist for Wells Fargo, urged attendees to grow bushels not acres.
Third, there will be volatility in weather and in transportation (as I’ve mentioned before), all of which can impact your costs and your customers’ ROI.
What’s it all mean? Feed & Grain magazine and FeedandGrain.com have always focused intensively on providing information about state-of-the-art construction, which you’ll see reflected by this issue’s cover story. We’ve talked about progressive remodeling efforts that make feed and grain facilities safer and more efficient. And I am bragging a bit here, but I think we’ve become a key resource to help you generate ideas and find products that offer solutions.
A B2B publication doesn’t stay relevant for 50+ years (like Feed & Grain has) without reacting quickly to the market it serves, so, recognizing that many of our ag retailer readers are relying heavily on technology today, we’re reacting with more coverage on how you can become what McBeth called “a trusted advisor” — referring to Jeff Graff, who provides integrated solutions (technology) in his role as her John Deere dealer.
With that preamble, please read about Cooperative Producers, Inc.'s CPI 300 program, an internet-based program that helps farmers grow more yield from the same field. And stay tuned for your copy of the August/September issue of Feed & Grain, where CPI-Lansing, a joint venture between Cooperative Producers, Inc. and Lansing Trade Group, is featured on the cover with its new shuttle loader facility in Fairmont, NE.
We’d like to know more about how you’re becoming a key part of your customers’ team(s) for profitably improving yields. You can reach me at firstname.lastname@example.org. Your feedback could end up in a future issue of Feed & Grain.
Steven Kilger explains the the new format, along with last week's federal goings-on
I’m going to start this blog by introducing myself. My name is Steven Kilger, the new assistant editor here at Feed & Grain. I'm also the guy who’s been putting together our Industry Watch newsletter for about a month or so. I read agricultural-related news for about half of my work day, until it’s almost bursting from me (seriously — it’s becoming all I talk about.) So, we figured that I should have a blog to share my thoughts, and so I can stop boring people.
My goal is to make this section of the site my own, starting with the update frequency. This is now a weekly blog. The goal here is to have a place where you can get caught up on the important news in agriculture in one convenient place. My goal is to have the blog out every Tuesday afternoon, a goal that I have already failed, but there’s always next week.
I’m also changing the format; from now on “Views” will cover the top news stories of the previous week along with my take on them. Much of that news can’t go into Industry Watch for space or context reasons, so I sometimes have some content that doesn’t make it to the newsletter. I also have all of the stories linked at the bottom in a convenient list format.
The top story of last week was once more the Farm Bill. The Republicans in the House of Representatives passed a bill without any nutrition programs attached to it, which they say will be taken up later. I say Republicans because the bill passed without a single Democrat’s vote, among warnings that the Senate won’t approve a bill without Nutrition Assistance attached, and a threat to veto from the president. I can’t see into the minds of our elected officials, but it seems like the House is doing something just to make it look like they’re doing something. Even when they go into negotiations with the Senate, the moment Nutrition Assistance gets added back in, The House will vote against it when it’s brought back for a final vote. The most likely outcome when this is said and done is another continuation of the 2008 Farm Bill.
The second most popular story was about the Food Safety Modernization Act beingimplemented. After the FDA was sued by theCenter for Food Safety, they have been forced to set a timeline for publishing all of the new rules required by the act. Everything should be published by June 30, 2015. As far as feed is concerned, those rules should be out late this year to early next year.
The federal government takes up the third slot as well, with the USDA getting sued by the meat packing industry over the new meat labeling rule. The new labels require packagers to note where the animal was born, raised and slaughtered. Like labeling for GM products, this is foreseen as a logistical nightmare. It will require much more in-depth record keeping for what the industry are calling a needless concern. It will also cost millions of dollars to design and implement the new labels, which will then be passed on to the consumer.
Layoffs are always a topic that invokes passionate views. It’s easy to be empathic with an employee who gets laid off, not because of performance, but because their company was bought out. That’s what happened here. Conagra bought Ralcorp in January and the people being fired held duplicate positions. It’s hard to blame Conagra for this— it’s just business — but still sad for those getting let go. Feed & Grain wishes them the best of luck.
This story was a bit of a surprise for a two reasons: Plant openings aren’t usually very popular, and this is a foreign plant. We are an international publication, of course, but our main readership is in the United States and Canada. The big news with this plant is that it is now the United Kingdom’s largest single-source supplier of animal feed and can supply a third of its bioethonal demand. It goes show just how much the refining process has advanced; it can now get so much out of the raw materials they use.
With so many changes and uncertainty with regulations from the federal government, we’re all anxious about what will happen next. Here at Feed & Grain, we’ll do our best to keep you up-to-date on all of the important regulations being debated in Washington, D.C. In the meantime, feel free to email me anytime. Tell me what you think, what you would like to hear about, story ideas or just to say hi.
Old but good communication advice for feed and grain business managers
In flipping through old issues of Feed & Grain, I ran across a Manager's Notebook from 2007 that, although only six years old, had me nearly laughing at how archaic it sounded. It was about effective communication for feed and grain businesses, and had a section dedicated to email. The authors provided a definition for the term "spam" and suggested using filters to remove such unwanted content. They went on to advise creating folders to help organize and reduce clutter from the remaining messages. It even mentioned the "You've got mail!" reminder that AOL made famous in the 1990s. It's hard to imagine a time when this everyday knowledge was foreign to anyone.
Back then, email was one of the few applications feed and grain business managers used their computers for. Today, those same managers are likely receiving and replying to emails constantly via their smart phones and tablets and use computers for more complex tasks, such as running facility operations, accounting and customer service. A lot sure has changed since "Communicating in the Feed and Grain Business" was published.
However, tucked within this seemingly elementary email tutorial, there were a few nuggets of advice that still resonate today, including the tip to not read and answer emails all day long. Authors, John Foltz and Christine Wilson, wrote:
"For many people, email can almost become an addiction — where they feel a need to constantly check it ... but almost all emails do not need to be answered immediately. A good email management strategy is to set aside particular times each day when you will look at your email and answer it. Perhaps it is to read it three times a day (first thing in the morning, right after lunch, and right before you leave in the evening.)."
This advice is perhaps even more relevent today as we are literally tethered to devices that deliver emails instantly. Urgent messages are easy to identify, and can and should be replied to immediately, but otherwise, try to dedicate your time to managing your facility/business/firm — espeically early in the morning, the authors pointed out.
"Don't answer your email during your most productive time of day. Many people are most productive first thing in the morning, when they are wide awake and ready to face the day. Answering email is not typically a task that takes a lot of creativity, so you might consider leaving it until late in the day. This will free up time when you can be most efficient with things that need sharp mental prowess — such as management, personnel and finance decisions."
Their last tip worth noting is so simple it's easy to forget — use good ettiquette. Again, these may seem basic, but who couldn't use a brush up on their email ettiquette? Foltz and Wilson outlined eight key points:
"Be concise and to the point
Answer all questions so as to preempt further questions
Use proper spelling, grammar and punctuation
Make it personal
Don't attach any unneccessary files
Do not write in CAPITALS (it's considered shouting)
Read your e-mail before you send it
Do not overuse 'Reply to All'"
Please feel free to test your application of these e-mail tips by dropping me a message about yourself and your feed and grain operation. I am always looking for reader feedback and story ideas. Do you have any tips for better managing your time?
Both corn and soybean basis levels found strength this week as tight farmer selling and the prospects of a late harvest next fall push basis levels up. Spot corn basis was up 2 cents a bushel while soybean basis climbed nearly 4 cents a bushel for the week.
In corn, basis levels at ethanol plants were a key driver this week as 10 to 15 cent gains were fairly typical across NE, SD & IA this week. In addition, shipping along the flooded IL river last week seemed to ease this week which lifted river terminal basis levels by a dime or more at key terminals.
For soybeans, export business continues to slow which pushed basis levels down at most river facilities over the past week. On average, river terminals were off 3 cents a bushel. At domestic soybean crushing plants, basis levels were unchanged for the week, but Eastern Cornbelt soybean plants seemed to see some strength with 10-cent gains fairly typical in this region.
Flooding along the Illinois river continued to negatively impact basis across the U.S this week.
Cash grain markets felt pressure this week from river flooding and the inverse carry in the futures market. For the week, US average corn basis slipped 3 cents a bushel while average spot soybean basis was off 2 cents a bushel.
Flooding along the Illinois River left many grain elevators shut down at the beginning of the week which caused bids to ease in these areas. However, the Ohio river was largely unaffected so basis levels from Southern Ohio to Southern Illinois found some strength. At the Gulf export market, corn basis was up 4 cents a bushel as limited supplies were able to move to the Gulf. For ethanol plants, average corn basis was off 3 cents a bushel with Eastern Cornbelt plants showing more weakness this week than Western Cornbelt plants.
For soybeans, Gulf basis lost 3 cents a bushel as soybean exports continue to decline along normal seasonal lines. Export sales hit a marketing year low this week with net reductions reported of 206,300 MT on the old crop. River terminals were off 4 cents a bushel for the week while soybean crushing facilities bid up soybean basis by 4 cents a bushel.
As GMOs face the court of public opinion, are you doing your part to educate the public on agriculture
The 117th edition of the National Grain and Feed Association’s (NGFA) Annual Convention, held in San Francisco in mid-March, drove this sentiment home in its general sessions: While agriculture is one of the greatest growth industries, the coming years will be filled with the unique challenge of restoring the public’s trust in the food system. For those working and living agriculture, it should come as no surprise that much of the content presented by the event’s diverse set of speakers focused on the anti-biotechnology battle being waged in this country — specifically the one against genetically modified (GM) grains and food stuffs.
Largely driven by emotion and misinformation, the vitriolic arguments presented by biotech’s opponents run contrary to the extensive scientific research backing the legitimacy and safety of GM foods. Why then does this movement have such momentum? According to Chuck Policinski, Land O’ Lakes president and CEO, agriculture has failed to manage the public’s opinions on the food supply by not effectively telling its productivity story, the one only made possible through the use of biotechnology.
Let’s face it, the public has been conditioned to be suspicious of big business (often rightfully so) — and agriculture surely is not exempt from this scrutiny. Big is bad — and the consumers intrinsically question whether or not greed-driven corporations (and politicians) have their interests and well-being in mind.
California’s Proposition 37 (also known as “The California Right to Know Genetically Engineered Food Act”) highlights this movement. The statute would have called for the mandatory labeling of genetically modified consumer food products at the grocery store. While Prop 37 was defeated during the 2012 election by a narrow margin, the push certainly didn’t end in California. In fact, many states have proposed legislation and pending ballot initiatives in motion.
Do consumers deserve to know where their food comes from and how it is sourced? Absolutely. Should the industry be more transparent? I think so; however, acknowledging that the tide has shifted, perhaps it’s time to take the initiative and address the matter on its own terms.
Earlier this month, Whole Foods became the first major retailer requiring products containing GMOs to be labeled by 2018 — and, in time, other major retailers are likely to follow suit. Not knowing where the consumer’s interest in the supply chain will end, grain handling and feed manufacturing industries should keep a keen eye on this issue because we are, after all, ultimately one industry.
Policinski urges individuals and agribusinesses to actively engage with the public in real time via social media and that they reach out to their local and state politicians to tell the story about an industry revving up to feed a growing global population.
Panama Canal expansion bodes well for U.S. grain, while weather, aging infrastructure holds us back
After attending presentations at the 2013 GEAPS Exchange, three elements stood out that I’d like to tie together for you to think about:
Weather woes will continue
Dr. Elwynn Taylor from Iowa State University made some projections about our current drought situation. Here’s my take: Don’t expect magic this year. Or, as he put it, “A year as extreme as 2012 is seldom followed by a full return to normal.”
Perhaps even more intriguing is his data that shows corn belt weather shows an 18-year/25-year cycle; 18 years of somewhat stable weather and yields, then 25-years of less stable weather and volatile yields. “I don’t know why,” he said.
That point is important because the Mississippi River likely will remain low and there is at least the potential for another high-value grain year. What if we can’t move it efficiently? And if we are in a period of volatility, how will restricted transportation options affect your merchandising strategies?
2. Panama Canal good for U.S. grain
Maria Sanchez of the Panama Canal Authority showed how the new Panama Canal will provide improved efficiency for U.S. grain shippers. Larger cargo ships, less delays and, by the way, grain accounts for about 35% of the traffic through the canal, she pointed out. Will we be ready to take advantage of that improvement? That’s the question – well, perhaps more of a statement – Rich Calhoun, President of Cargo Carriers posed to attendees.
3. U.S. infrastructure needs improving
While roads and bridges need work, Calhoun focused attention on our aging river-system lock. He said “when” not if a failure occurs, we’ll see transportation costs jump overnight. We won’t be able to leverage the value of the new canal the way we should.
Efficient transportation is a competitive advantage. In the face of what could be more yield and price volatility – or even if that doesn’t happen – wouldn’t it be nice to maintain transportation efficiencies to help alleviate risk? Support our industry associations and their efforts to keep this issue in front of budget-makers.
For more of Feed & Grain's insights on the GEAPS Exchange education programs, read other articles and blogs on our site and in the issue.
Average soybean basis across the US was down 1 cent on account of declining river markets, while corn basis remained unchanged on the week.
Average soybean basis across the US was down 1 cent on account of declining river markets, while corn basis remained unchanged on the week.
Soybean plants gained one cent on the week but weakness along the river pulled basis lower throughout the country. Soybean basis at the gulf dropped 3 cents which negatively impacted terminals along the river. Terminals along the Ohio River were affected most and declined by an average of 4 cents since last Thursday.
This week’s average U.S corn basis remained unchanged despite the gulf moving 2 cents lower and the rest of the river declining by an average of ¾ of a cent. The rally in the futures market since last Thursdays lows helped improve farm selling and capped basis from advancing higher.
Survey seeks industry insight to determine demand for a captive insurance company
The U.S. Commodity Futures Trading Commission (CFTC) is analyzing its proposed customer protections, i.e. segregated funds, after receiving a lot of criticism for its recent rulings. Customers and trade organizations have voiced concern over proposed protections they deem harmful to small to mid-sized futures commission merchants (FCM), which account for the bulk of agribusiness hedging activity.
Insurance, one form of protection for segregated funds, was excluded from the CFTC’s proposal. The Commodity Customer Coalition (CCC), a non-profit organization formed in response to the bankruptcy of MF Global, headed by co-founders John Roe, president of Roe Capital Management Inc., and James Koutoulas, CEO TyphonCapital Management LLC, is advocating creation of insurance policies for futures customers and has been working on reform initiatives such as an account insurance mechanism and testing alternative forms of collateral segregation, i.e. margining positions though bank account rather than futures broker.
The CCC’s currently pushing a captive insurance company model. To test the validity of that model, the CCC needs to determine if there is a sufficient market interest for an insurance product; what customers seeking that insurance would be willing to pay; what kind of coverage they would be looking for; and collect account-level data in order to formulate the actuarial model to make sure it’s feasible to create an insurance product.
Roe explains: “We’re talking about a small market here — very few people have a commodity trading account so we’re talking about limited exposure here. It’s not possible for an insurance company to produce such policies so we’d have to create a new company. The survey will measure demand, the actuarial ability to produce the product — and then hopefully we’ll have the data we need to roll up our sleeves and let the actuaries go to work.”
The CCC is conducting two surveys to determine the feasibility of customer account insurance. One survey is tailored to the needs of public customers of commodity firms; the other, to National Futures Association’s (NFA) member or member firms.
If the market demand is there, the CCC will develop its own captive insurance company and begin offering insurance policies to commodity customers.
To take the Commodity Insurance Survey, clickhereif you are the customer of a commodity firm or click here if you are an NFA member or member firm.
Corn and soybean basis was mixed across the United States this week with some river terminals showing positive basis gains while others terminals declined
Corn and bean basis were stagnate this week showing no change on average across the country over the past week.
At the Gulf, corn basis found modest strength of 4 cents a bushel but river terminals along the river were mixed. Areas south of St Louis have seen basis retreat while areas along the Mississippi river in Iowa and Illinois saw some limited positive gains. In the ethanol market, basis levels were unchanged on average although some buyers were noticeably weaker as basis levels fell 5 to 10 cents on the week.
For soybeans, river markets showed large variability with some terminals increasing basis 10 cents or more while others dropped by a similar amount. Strong export demand keeps underpinning river basis, but a negative carry in the futures market will keep buyers from wanting to hold inventory for long. For soybean plants, they showed a modest one-cent gain on average as crush margins continue to hold firm helping keep domestic demand strong for beans.
Corn, soybeans and wheat have continued to move higher following yesterday’s technical breakout for soybeans. Coming into the morning trade break soybeans is up 15 cents, wheat is up 7 cents, and corn is up. A surging spot soymeal market as contributed to strength out of soybeans. Just in...