AG NEWS 02/07/2017

Bipartisan Health-Care Legislation for Agriculture

A recently introduced bill to help lower health insurance costs for small business owners has the backing of farmers and ranchers. Offered by Reps. Kristi Noem (R-S.D.) and Krysten Sinema (D-Ariz.), the legislation (H.R. 246) would repeal the annual fee on health insurance providers enacted as part of Affordable Care Act.

“The bill addresses one of the major concerns that farmers and ranchers have related to health insurance – cost. The health insurance tax (HIT) has increased health insurance costs for farmers, ranchers and other small businesses by imposing a levy on the net premiums of health insurance companies, which is passed on to consumers. During 2014, $8 billion of excise taxes were levied, and $11 billion were collected in 2015 and 2016 each,” American Farm Bureau Federation President Zippy Duvall said in a letter to House members urging them to support the bill.

While a one-year moratorium on the tax is in effect for 2017, the HIT, which increases year-over-year, will be back in 2018. “Providing one year of relief from the HIT was a welcome and critical first step, but Americans need the certainty of a full repeal,” Duvall said.
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Farmers Union Sets Policy Positions

National Farmers Organization members voted in favor of agricultural policy positions at its 2017 Convention in Springfield, Mo. Jan. 26. From funding for crop insurance and grain loan rates to organic grain import issues, dairy supply management and the renewable fuel standards, members voted in favor of the following policy positions:

Crop Insurance
·Affordable crop insurance is an integral part of overall ag policy
·Members support current funding levels
·Crop insurance is effective in protecting farm incomes and securing operating loans
·Organic producers increasingly rely on crop insurance protection
·National Farmers supports premium rates commensurate with organic payments available for losses incurred

Grain Policy
·Price support levels for major storable commodities based at 85 percent of production costs
·USDA corn loan rates of $4 per bu., wheat $6 per bu., soybeans $9 per bu.
·Supports re-enactment of a farmer-owned grain reserve
·Reserve isolated from the market  and supply of last resort
·Only released at 120 percent of the above proposed loan rates
·Full investigation by Senate and House Agriculture committees of fraudulent organic grain imports

Dairy Policy
·Implementation of a growth management  program that uses price as  an  incentive to  manage production (a form of two-tier pricing)

Energy
·National Farmers Organization opposes any changes to the Renewable Fuels Act (RFA)
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Online Grocery Shopping to Expand

According to a new study from NPD group, the already popular trend of online grocery shopping is expected to grow by nearly 50 percent by summer 2017. NPD reports that approximately 52 million consumers currently utilize online grocery shopping services and that 20 million current, lapsed or new shoppers will increase their online grocery purchases over the next six months.

Consumers are shifting to this method of shopping for its convenience with an overwhelming rate of user satisfaction. NPD found that 60 percent of online grocery shoppers were “completely satisfied” with the services they were using, and only 6 percent reported being either neutral or dissatisfied with the services
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M-COOL Coming to South Dakota

A group of South Dakota state senators introduced a bill this week that would require mandatory country-of-origin labeling on retail beef products sold in the state with the exception of prepared, ready-to-eat foods. The South Dakota Stock Growers Association stated that they supported the bill because consumers want it.
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Cattle Like Candy Too

News circulated early in 2017 about a truck hauling Skittles to a producer in Wisconsin, where it was to be mixed into feed for cattle. Social media was abuzz with the strange thought of cattle tasting the rainbow. Apparently, however, the novelty of this story is not so unique.

“For cattle, other than a taste difference, candy is not any different than including corn in the diet. They serve as an energy source for the cattle,” said Chris Richards, Oklahoma State University Cooperative Extension beef cattle nutrition specialist. “The bacteria in the rumen of the cattle break down the candy into the same materials it would the starch in the corn they are fed.”

It is not just candy, either.

“Cattle are well equipped to utilize feed and forage resources that are not suitable for human consumption or use,” said Dave Lalman, OSU Cooperative Extension beef cattle specialist. “Restaurant grease, grocery store unsold produce, outdated bread, water-damaged flour or cereal and on and on. And, of course…grass.”

With compartmentalized stomachs, cattle can utilize a wide range of forage quality. The first compartment, the rumen, is where much of the magic happens. Carbohydrates, sugar in particular, are rapidly fermented in the rumen. This process transforms the sugar into volatile fatty acids.

“These acids are then absorbed into the blood stream and used for energy by different tissues,” Lalman said. “Consequently, blood sugar does not vary dramatically in ruminants compared to humans. It is highly regulated in ruminants.”

While the stomachs of cattle are impressive, they can only do so much. A diet strictly comprised of candy, doughnuts or restaurant grease, for example, is not a good idea.
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Tough Times Ahead for Cattle Industry

USDA estimated the January 1, 2017 all cattle and calves inventory to be 93.6 million head, 1.8% larger than a year earlier. The all cattle and calves inventory bottomed out on January 1, 2014 at 88.5 million head so this year’s inventory estimate is nearly 6 percent larger than it was at the bottom of the inventory cycle.

Unlike prior years, USDA did not provide a preliminary estimate of the 2016 calf crop back in July since the mid-year Cattle report was dropped from USDA’s line-up of inventory reports. As a result, last week’s report provided the first estimate of the 2016 calf crop, estimated at 35.1 million head, 2.9 percent larger than in 2015. The smallest calf crop of this cycle occurred in 2013 and the 2016 calf crop was nearly 5 percent larger than in 2013.

Larger supplies imply lower prices are ahead. Prices for slaughter cattle in the Southern Plains averaged approximately $121 per cwt. (live weight) during 2016, which was 19 percent lower than during 2015. During 2017, slaughter cattle prices could decline another 6 to 8 percent as a result of the expected supply increase.
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