USDA Confirms Record Corn Yields in Three States
(WASHINGTON, DC) The U.S. Department of Agriculture (USDA) delivered their first World Agricultural Supply and Demand Estimates (WASDE) report for 2018 on Friday, giving traders and analysts a closer glimpse into the final production numbers for 2017. Corn production is estimated at 14.6 billion bushels, up 26 million from last month as a record increase in yield (176.6 bushels per acre) is partially offset by a 400 thousand acre reduction in harvested area. Record high yields are expected in Illinois, Minnesota, and Ohio.
Soybean production is estimated at just under 4.4 billion bushels, down 33 million on lower yields. Harvested area is estimated at 89.5 million acres, up fractionally from the previous forecast. Yield is estimated at 49.1 bushels per acre, down 0.4 bushels, led by reductions for Kansas, North Dakota, and South Dakota.
Global wheat production for 2017/18 is raised 1.8 million tons led by a two million ton increase for Russia and an 800 thousand ton increase for Pakistan. Global use for 2017/18 is lowered fractionally and ending stocks are lowered 400 thousand tons to 268.0 million, which still remain record large.
This month’s 2017/18 U.S. cotton forecasts include slightly lower production and ending stocks. Production is reduced 177,000 bales due to small declines in regions outside the Delta. Ending stocks are reduced 100,000 bales, while domestic mill use and exports are unchanged.
U.S. Beef Exports Heading Toward Record
(DENVER, CO) U.S. pork exports recorded the highest-ever monthly value in November while U.S. beef export value took another step toward a likely full-year value record, according to export results released by the U.S. Department of Agriculture (USDA) and compiled by the U.S. Meat Export Federation (USMEF).
Beef exports reached 111,915 mt in November, down 3 percent from the large volume of November 2016 but still the second-highest monthly total of the year. Export value was also the second-largest of 2017 at $666.4 million, up 8 percent year-over-year. January-November export volume totaled 1.15 million mt, up 7 percent, while export value climbed to $6.6 billion – up 15 percent from a year ago and slightly above the record pace established in 2014.
Beef exports accounted for 13.1 percent of total production in November, the highest since July but down from 14.9 percent in November 2016. For muscle cuts only, the percentage exported was 10.9 percent – down from 11.7 percent a year ago. For January through November, beef exports accounted for 12.8 percent of total production (down from 13.5 percent in 2016) and 10.3 percent for muscle cuts (steady with 2016).
November beef export value averaged $306.63 per head of fed slaughter, up 4 percent from a year ago and the highest in nearly three years. January-November export value averaged $282.34 per head, up 9 percent.
Farm Policy Review and Outlook for the 2018 Farm Bill
(CHAMPAIGN, IL) The current Farm Bill (the Agriculture Act of 2014) is scheduled to expire with the 2018 crop and fiscal years. Congress is on the clock to reauthorize the programs by September 30, 2018 and has taken initial steps but the bill waits behind other legislative priorities. University of Illinois Farm Policy Expert Jonathan Coppess says the outlook for a farm bill in 2018 is complicated and there are at least six major issues likely to dominate the debate.
First and foremost is the Congressional Budget Office (CBO) Baseline. This is a ten-year forecast of spending under existing programs and it limits the funds available to the Agriculture Committees; increases in one area require offsets from others. Second is crop insurance, with approximately $6 billion per year in premium discount it is likely to remain a primary political target for any spending offsets or reductions. Others will look for reforms to the program that also reduce expenditures. Third and fourth are the commodity title issues. Commodity groups that supported ARC-CO in 2014 are likely to seek revisions to the program that improve the yields used (e.g., trend yields and RMA data), as well as potential changes in response to forecasts for lower prices. The cotton industry is seeking to have cottonseed added as a covered commodity, returning its base acres to the Title I payment programs. Dairy producers seek fixes to the Margin Protection Program. These raise significant issues, not the least of which is how any additional costs will be offset.
Some conservation interests are pushing to increase the CRP acreage cap which will have substantial costs in the CBO Baseline and require offsets. This is the fifth issue that Congress will need to resolve in the farm bill. Sixth, the Supplemental Nutrition Assistance Program (SNAP) remains the largest item for participation and expenditures. Coppess says partisan politics over this program resulted in the farm bill’s defeat in the House in 2013 and remains to be seen how Congress will deal with the program; history and vote counting counsel against efforts to make drastic changes to the program.
Read more here: http://farmdocdaily.illinois.edu/2018/01/ifes-2017-farm-policy-review-and-outlook-farm-bill.html
2017 Tractor and Combine Sales Top Previous Year
(MILWAUKEE, WI) According to the Association of Equipment Manufacturer’s (AEM) monthly “Flash Report,” tractor sold in the U.S. in December 2017, were up 18% compared to the same month last year. This builds on the 220,546 tractors sold during 2017 which represents a 5% year over year increase.
For the month, two-wheel drive smaller tractors (under 40 HP) were up 5% from last year, while 40 & under 100 HP were down 2%. Sales of 2-wheel drive 100+ HP were down 7%, while 4-wheel drive tractors climbed 18%. For the year, two-wheel drive smaller tractors (under 40 HP) sales increased 8% while under 100 HP tractor sales were even. Sales of 2-wheel drive 100+ HP fell 8%, while 4-wheel drive tractors increased 5%.
Combine sales are down 3% for the month while sales for 2017 total 4,112, an increase of 4% from 2016.
AEM Senior VP for AG Services Curt Blades explains that “for the larger ag tractor sales (100+ HP 2WD) we saw some real softening at the beginning of the year but some sizable reversals to end at a negative 8 percent, and 4WD drive tractors and combines ended on a positive note with modest gains.” Yet he remains optimistic about the new year. “So, while the downturn of 2016 carried over into 2017 it began to reverse as the year progressed. With tax reform passed, we are cautiously optimistic for continued overall improvement in 2018.”