Daily Ag News Summary 02/16/2017

House Ag Committee Holds First Farm Bill Hearing

The House Agriculture Committee held a hearing to review the economic challenges facing rural America on Wednesday. Members heard from several witnesses who highlighted these factors, including low farm commodity prices, declining net farm income, tightening credit conditions, a strong dollar, and unfair trade practices by foreign competitors.

“There is real potential for a crisis in rural America,” said Chairman Mike Conaway (TX-R). “Net farm income for America’s farmers and ranchers has fallen 50 percent over the past four years with the collapse in commodity prices. As we begin the farm bill process, these economic realities must be front and center. The farm bill serves as a safety net for producers, helping manage risk in difficult times. We are in those times now, and we must deliver solutions that work for our nation’s farmers and ranchers.”

USDA’s RMA in Price Discovery Mode

With USDA’s Risk Management Agency (RMA) now in the midst of base price discovery for crop insurance, growers will be watching price ratios closely. Currently, the 20-day average of the November soybean to December corn price ratio for 2017 is 2.59 says Dr. Mark Welch, Texas A&M AgriLife Extension Economist in College Station. “That is a level that favors soybean returns over corn returns in many mid-west crop budgets” he adds. Last year the price ratio of the RMA base prices was 2.29; the ratio during the survey period for the Planting Intentions report was 2.35.

When it comes to marketing plans, Welch says he has priced the first 20% of the 2017 feed grain crop at $3.90¾.  Later this month, USDA will release updates to its long-range supply and demand tables for grain. While not official projections for the 2017/18 marketing year, these reports will provide insight as to the degree USDA expects acres to be revised in the coming year and important early season demand estimates. These numbers will be used to assess whether the current level of futures prices are in line with fundamental market forces.

Another Record Year for Exports to Mexico

U.S. pork exports set a new volume record in 2016, reaching 2.31 million metric tons, thanks in part to a fifth consecutive record year for exports to Mexico. Dan Halstrom, U.S. Meat Export Federation (USMEF) senior vice president for marketing, explains that Mexico is an especially strong destination for hams, but the U.S. industry ships a wide range of pork cuts to Mexico.

Halstrom adds that other Western Hemisphere markets also made important contributions to U.S. pork export growth in 2016. Exports to Canada were higher year-over-year, shipments to Central America were record-large and after a slow start, exports to Colombia came on very strong late in the year

Building Stronger Relationships Between Consumers and Ag

While February has long been celebrated as a month of romance, the relationship between consumers and the U.S. food industry isn’t always smooth sailing. A growing curiosity and skepticism about how food is produced and who’s producing it leaves some consumers with cold feet, wondering if they can trust that the people producing their food are doing what’s in their best interest.

But the latest consumer trust research from The Center for Food Integrity (CFI), “Inside the Minds of Influencers: The Truth About Trust,” shows five positive trends that point to a blossoming relationship.

1. “Is the food system headed in the right direction or down the wrong track?” Fifty-five percent said right track. That’s up 15 percent from the previous year – a significant upward trend. It was just 34 percent in 2013. “While we didn’t ask why they believe it’s headed in the right direction, we assume that today’s consumer is pleased with the food industry and its willingness to provide the foods they’re looking for – from high-protein and gluten-free products to organic foods and “clean” ingredients,” said JJ Jones, director of development for CFI. Each year, CFI surveys consumers on more than 30 trends in food and agriculture, asking them to rate statements on a scale of 1 to 10 where 1 to 3 is low agreement, 4 to 7 is moderate agreement and 8 to 10 is strong agreement.

2. “I have access to all of the information I want about where my food comes from, how it’s produced and its safety.” Forty percent strongly agree. That’s a significant jump from just 17 percent when the survey began in 2008. It shows the food industry has stepped up to engage and provide consumers access to the information that’s feeding their curiosity.

3. “I am confident in the safety of the food I eat.” Nearly half strongly agree, a big jump from the 35 percent seen the year before.

4. “I trust food produced in the U.S. more than I trust food produced outside the U.S.” A significant majority, 59 percent, strongly agree. That’s up from 51 percent from the previous survey.

5. “U.S food is among the most affordable in the world today.” Forty-four percent strongly agree. This is the strongest level of agreement with this statement since it was first posed in 2007. Strong agreement rose 14 percent from the previous survey.

The numbers are promising, but it’s certainly not a green light for the food industry to take its relationship with consumers for granted. There’s always room for improvement. “They also want the ability to engage, to be heard and acknowledged, and get straight answers to their questions,” said Jones. “And consumers want to know they can trust the food industry, and earning trust starts with consumers knowing that you share their values when it comes to important issues like food safety, health, animal well-being and the environment.”

The CFI trust model demonstrates that communicating with shared values is three-to-five times more important to building trust than simply sharing facts and science.

USDA Conducting Annual Organic Survey

USDA’s National Agricultural Statistics Service (NASS) is conducting the 2016 Certified Organic Survey to gather new data on certified organic crops and livestock commodities in the United States. This effort is critical to help determine the economic impact of certified organic agriculture production in the United States.

NASS is mailing the survey to all known certified organic farms and ranches within the 50 states. The form asks producers to provide information on acreage, production, and sales, as well as production and marketing practices. The agency asks all participants to respond by February 19 and says they can return their forms by mail or complete the survey online at www.agcounts.usda.gov.

“In recent years, U.S. farms and ranches have experienced tremendous growth in certified organic agriculture sales. Last year, NASS reported that U.S. certified organic producers sold a total of $6.2 billion in products in 2015, up 13 percent since 2014,” said Adam Cline, NASS Census Section Head and member of the USDA Organic Working Group. “As sales from certified organic agriculture products increase, demand for accurate statistics about certified organic farming grows. This survey will be another step forward by USDA in its commitment to helping certified organic agriculture thrive and will ensure that future decisions impacting the industry stem from factual information.”