tv U.S. Farm Report ABC August 21, 2016 3:30am-4:31am CDT
farm report.> welcome to u.s. farm report. i'm tyne morgan, and here's what we're working on for you. rice hits a 5-yr high, but it's coming at the price of water logged crops. lower crop prices are creating a new normal for equipment dealers. < 3.50 dollar corn is probably here to stay for a while.> we're on the road with machinery pete to iowa to see why despite the rollercoaster year, local farmers and dealers are trade...
dependable, long lasting, chevy silverado.> now for the news that moved the markets this week, rice prices hitting a 5-year high this week, on news record breaking rainfall in louisiana and arkansas will put a major damper on yields. arkansas is the number one rice producer. harvest is just starting in that state. here's are some pictures of crops underwater from the university of arkansas' ag department. it's causing the rice to spourt prematurely, which means milling and yield loss when harvest starts. but in louisiana - the number three producer - it's peak harvest season and early illion dollars worht of hte state's rice crop. the u-s rice federation ays about 80 percent of rice in southwest louisiana had been harvested before the rains hit, but it's the remaining 20 percent is more than likely gone. those rains could also take their toll on louisiana's cotton crop. prior to the rain, the state had the highest usda condition ratings, with 71 percent good to excellent and a third of the crop had bolls
- percent is good to excellent. 80-percent is setting pods. and the corn also looks good, 74-percent good to excellent. the dryness in ohio is bringing down ratings there, with a three point decline in taht state. 21-percent of the crop is at dent stage....which is right on par with the five year average. soybeans and corn are sitting under water in southern illinois. that's as farmers deal with more recording breaking rainfall. in illinois, is started saturday, with close to ten inches falling in a couple days. i was in vergeens, illinois this week, and local farmer wayde allard says crops will be lost. we received six and half inches right here in vergenne's. but north north of us reports seven to over eleven inches of rain... which will be coming down this way. we're afraid we're were all lose close to three hundred acres at this point. > allard says his soybeans look exceptionally
or showing those record rains in louisina are too much of a good thing, with the drought pretty much disapearing in the state. no surprise there. the area called abormally dry seeing a 14 point improvement this week. and ohio farmers benefitting from recent rains. severe drought is now gone, and moderate drought is 20 points better. now it's not all good news, we did see dry conditions improve overall in texas, but new pockets showing up in the west texas area. and in the northeast, it's region is abnormally dry and more than 2 percent is now in the extreme drought category. while grains are expected to hit new records in 2016, usda also thinks alfalfa hay production will rise. its anticipating 61 and a half million tons this year--4 percent higher than 2015. other types of hay are also higher with 2016 on pace to see record high per acre average yields and the 3rd largest
talks of a possible freeze in production. oil prices rose for six straight days with brent hitting an eight week high. both west texas intermediate crude and brent crude have risen more than 20 percent since early august. those are the headlines...meteorologist cindi clawson is in for mike hoffman this week. cindi, from too dry to now too wet, many viewers could use a break from the rain. yet no kidding tyne it's been a i just kinda crazy know first we had marilyn then louisiana still trying to clean up from there in south bend earlier this week we had some very very heavy rain in some pretty bad flooding up here as well far as the drought monitor we've seen is some improvement in some not so much but where we've seen improvement over the last week is pretty much the western great lakes and all the way through much of the plain states the eastern part of the four corners region we have seen a the western parts of the gulf coast a theater part really haven't changed a whole lot and
drought monitor will have some improvement in the northeast it's been virtually unchanged along the west coast alright this is what it's been over the last of four weeks of the last month or so you see now it's been getting worse in parts of the northeast especially into the southeast also in parts of the planes that we've seen a decent amount of improvement over the past a week or so right so what we expect is we had through this week now as we start off your week it's going to be on the dry side for monday and actually fairly pleasant for much of the corn belt the wet weather scattered showers and thunderstorms in the southeast and also over to the four corners region now as we head into wednesday we're gonna see a front that's going be moving through the nation's midsection to look for showers and thunderstorms along their back towards the four corners region will keep it on the dry side in much of the northeastern united states down into the mid atlantic that is we had the friday that fight still continuing to push on off to the east so rain through much of the great lakes states down to the
welcome back to u s farm report on the marketing round table with me this week brian bastin gof advance trading and brad matthews of roach ag alright last friday we had this usda report were still talking about ple want to know with this one seventy five point one corn yield how did prices not drop and just bottom out. what is helping prices right now? why are we seeing the bottom fall outthat's the question i think the initial reaction from the marketplace was a huge yield that we just saw they sold it down almost ten cents a day after report but the trade was also looking for pretty big number so once they got i think they said ok kind of sell the rumor buy the fact and
is what the yield is going ot be yeah so brian you think the trade maybe thinks this one seventy five that's probably not going to materialize materialize this year. yeah brad makes a great point tyne the fact that we had seen the market take a negative stance goingin the report probably enouraged some short covering and really we've seen really good export demand here recently so maybe there's some export buying down there too so next week pro farmer crop tour we'll ground truth some of these initial numbers that came out of usda corn yield do you think it needs to come down i can't say that i i know that it needs to come down because we really don't know until we get out there and harvest this but i do believe to me it seems like it's going be difficult to beat the two thousand fourteen record by that much conditions in two thousand fourteen we didn't have the heat thousand fourteen there's a lot more heat this yearand i know you hear stuff about it tip back some aborted kernels
you going with right now very lowest of one sixty six and somwhere i have a hard time seeing it was above one seventy twookay bloomington illinois area and brad asked you before we started i started this discussion he said ""is it better than twenty fourteen in the bloomington area?""what do you think well we've done some crop toours tyne and it's no secret teh crop tours have been showing yields very close to in some cases maybe even touch about fourteen but this field is still being determined i think when you look at things like how many kernels is going to take to make a bushel than the ninety thousand kernels to make a bushel this year if we had ninety thousand and were probably not going to top that fourteen level but i think it certainly has a potential challenge fourteen so what yield are you thinking right now?we're a littl ebit lower than usda" we're at one seventy two point seven right now. so what if usda comes out this next report and does reduce yield do you think we're going to have much of an impact on price or that so hard to predict after
viewers tyne" we do have a harvest coming up here albeit with a price that low levels we don't know how this pressure that we typically might see will materialize but harvest this harvest never last in september october so you know in a one seventy two one seventy three yeild is still a record so i would just caution your viewers that that even the number comes down this still could be a record crop by far they brad for this report some analysts said hey if it's really bearish we could possibly put this harvest low in early we actually ended lower or no sinse then i saw what you think do you think we have maybe already put a low in or is there room to go down well i think we actually had been up every day since the report including a report day i would say in my humble opinion is fifty to sixty percent chance that we do have a low end and if we don't that i think the harvest law only goes about ten or fifteen cents at most below the current price to this point
this was put in another season a low sometime in october the question is is the harvest slow going to be lower than the low which is put in and something to think about is the they the old theory is lows are made in the most bearish news and i'm not sure that you and throw anything more bearish know we saw last thats a realy good point on the soybean side of that equation i'm hearing some really big possible soybean yield out there i know it's really hard detailed tell this early but do you think usda is going to raise that soybean yield in comingi would think that that with the september report i would say no i think typically the usda said particularly for soybeans wait until we have more information which means the way to october when he gets more their early harvest done but i'm forty eight point nine is certainly a great yield and i think for their september report anyway not against a range of things happen by then they might be the top and for this report brad what do you thinki'll surprise they raised it as much in teh last
welcome back well and i and our news block you heard about some of the flooding that's going on in louisiana and further south a southern illinois we had flooding up here in indiana is it proof that there still a lot of crop year left at yeah there is in soybeans and they say that beans are made in august in theres a lot of august left and even part of early september the thing is that usually whats gonna threaten the crop in the heat and we haven't seen that so we are losing some yield on the delta area from all this flooding at the same time in a lot of other areas the rain's been very beneficial now so the biggest thing to the crop
early frost in i don't think anybody about rhyme our agree with that i think anytime you get into late august or september we have to respect the frost variable typically we don't see that very often the line takes one incident to happen to really change the balance she quite a bit so yes i think they respect the fact we got several weeks left of the growing season for me and you cant predict mother nature any with any year but especially not that not this year he thrown some surprises at us so right now brad do you think there's more risk in corn or soybeans moving for that's a great be that there's more risk and soybeans but with that being said i also think that the greater upside in soybeans see the funds have a large position and and soybeans were they don't have a large long position in corn their short corn so that's where the risk is in soybeans if you were to go ahead and and say the yield is getting bigger the funds pull out they end up taken at short they can drive prices lower than what makes sense simply because a money at the same time the balance sheet gets much tighter much quicker with
have way more upside brian what do you think has the bigger risk i think both crops have downside risk tyne i think at this point i'll take the other side the corn a corn just because of the fact that the demand for soybeans right now is historically strong with the demand away from china but also on the other asian countries and the fact that the new brazilian argentine crops were not quite as big as we expected and just to respect that this corn crop could be could be underline a record and the fact of the demand is not quite strong as it is for for beans. brian you mentioned the funds what's the fund's position in corn right now is it surprising to youit's close to one hundred forty thousand contracts in that short and that's not a record but it is on the larger side of how short the day typically get i'm not surprised we're talking one hundred seven five bushel yield but i think with the trade needs to realize that if the usda happens to be wrong if they have to backpedal on the sealed and at this point a bean and his is better but corn demand is also
side start to shrink the funds have to backpedal on pullout that's where you get an over exaggerated move to the upside brian have you been following this oil or oil prices much i mean we look we've seen a pretty nice up tick in in prices because of talks of the potential production freeze is that really all there is to this story or is there more"it has been a trader's market if you will i think over last several weeks time ago quite weak and now it's bouncing back a bit the think that it's a volitale market and the time being i might be looking at that house a buyer of oil needs fuel needed by blocking an opportunity getting coverage on the yen it's a point cattle market brad do you think we can retest some of the lows retest some of the lows that we've seen in cattle i think we're going to be typically you have september and november are usually weak months this time of year is not really a great time you usually get you're better rallies in cattle market after the first of the year typically seasonal highs in february so i think we'll retest the lows and i i really think we trade some kind of arranged for the next say two months what
contracts not in not pretty either but where we think we're heading there while the challenges is a move into a seasonal time period where slaughter increases substantially and we may challenge the slaughter capacity of the u s this fall so how much that's built in the market is the question everyone is struggling with right now but i think that the slaughter numbers so far relative to the june hogs and pigs report seemed to imply that we do have a chance to challenge record slaughter numbers for this fall on the flip side feed users you know you talk possibly there is more downside risk in corn but should these feed users still be locking in some of these prices if they have not already yes i think definitely with the fact that that this demand is so strong not only for beans and a but i also would agree with brad that the corn demand a snuck under the radar a bit were seen
low level why not take advantage of it. brad do you think so too?i absolutly agree if you don't do in the cash market you at least gotta do something on the board and if youre not comfortable with futures you know where you buy a call and sell a put underneath at least a call option the i think not only one years but potentially looking at two years worth of at least price risk protection all right well we want to get your
welcome back to markets now 's hear your closing thoughts this week the biggest thing for producers after the size of the down move that was seen in corn and soybeans a lot of people are fearful that they missed it and a lot of guys talking about selling corn down here my biggest thing is if you're going to be needing to sell corn because you don't have the storage in even guys who might have not sold all their whole crop i believe that you have to attach upside here something that has a lot of time
and we've already priced in right ninety percent of all the negative news so what can change the next twelve months is a lot once again my opinion is you have to attach upside to any sales. some good advice brian i think it is producing approach harvest here in the fall time get control of u two thousand sixteen bushels by that we mean in a floor in this market believe the upside open flexibility in your marketinglook for an opportunity to set a floor with his cash sale in a call option purchases or a put option purchase but give yourself exibility is there's a whole growing season ahead of us good advice from both of you thank you so much stay with us john phipps joins us when we come back to receive a free trial of the daily market letter and gain knowledge about current market conditions from the professionals and bauer trading
about last week's usda crop protection report, including from john phipps. more than a few of us were surprised by the august crop report, and even more surprised by the market reaction - or lack of reaction - to the seemingly huge numbers. as i tried to salvage my own marketing strategy for this crop in the aftermath, i was reminded of a negotiation technique i learned years ago. the editor of top producer magazine sent me to a three-day short course on negotiation at northwestern university which was conducted by two leading experts in the field. i managed to grasp and remember a couple of key tactics, one of which is when you are at an impasse, make a bet. in other words, instead of wasting time yelling "is not" and "is too" at each other, put your money where your mouth is. this can only be done when the outcome is clearly defined, like
of real money makes us far more critical of our own thinking. farmers who are now debating just how big the crop is, and whether the usda is correct should consider this technique. if we think there is something wrong with the usda number, instead of railing about the government, bet against them. keep in mind that in fact, all of us actually already have a bet on, in the form of owning a crop in the field, not to mention a crop next year and beyond. if all we do nothing else, we are betting the value of that crop will increase somehow. this could be the smart move - or not. but the lesson is that coming up with sound reasons why prices should be different won't change either the market or our own situation. what it can do is distract us from the fact we have a real
it all has to do with geographical indicators. we'll explain in our farm journal report. farmers and equipment dealers are cautiously optimistic in iowa. we're off to winterset as we head on the road with machinery pete. and in customer support, why so much talk about cash rents when we discuss cutting expenses? john explains. now for the headlines, america's rural bankers are e caution flag on farm incomes for the end of 2016 and 2017, as creighton university's rural mainstreet index fell again in july the rmi is a monthly survey of bank ceos in rural areas of a 10-state region is out for july. the index fell again last month--dropping below 40. you may remember 50 is considered growth neutral. as a
almost one in five crop farmers, or nearly 20 (19.5) percent, to suffer negative cash flows in 2016.. i on average, farm loan defaults are expected to rise by more than 5 percent over the next year. 2017 - if we don't see an adjustment in inputs, we don't see an adjustment in cash rents as a whole. and we see commodity prices stay flat with where it appears they're going to be, no question there's going to be red ink. to what level will that red ink going to be? on a per acre basis, obviously it's going to vary from producer to producer, but i don't think 50-100 dollars an acre would be out of the question."> hoskins says having a good relationship with your banker and continuing to have open conversations can help during these tight times. the epa is putting farmers and ag professional on notice, it's investigating the alleged misuse of dicamba in farm fields. it says extension experts continue to report damage from what
adjacent to dicamba resistant cotton and soybeans. the epa stresses it has not registed any dicamba herbicides for application over the top during the season for cotton or soybeans. soybeans are really sensitive to dicamba, they always have been and always will be proper techniques, timing, etc etc become very important because the symptoms of dicamba these fields where virtually every soybean plant has a misshape because some form or another dicamba exposure is taken place. 09> in missouri alone, the state is reporting 117 instances of misuse and a negative impact on some 42-thousand acres. if you're planning on attending the farm progress show in boone iowa this year, you may want to pencil us
be at the channel booth from 11:30 to one. i have an impressive line-up of analysts, including joe vaclavik, matt bennett and angie setzer. we'll break down these crazy market prices. we will be serving lunch, but it's first come first serve. then on wednesday, join us at the asgrow dekalb booth. chip flory and machinery pete will join me to discuss yields and equipment. plus, we're giving away a yeti cooler to one lucky visitor. we hope to see you there! that's it for news.. let's check back in with cindi clawson. cindi, well we're going to be seeing some interesting changes in our forecast was first look at the week ahead and start off with the jet stream we've had a little system that pushed through bouts of wet weather to the corn belt over the weekend we're going to se a bit of a warm up as we get into the middle part of the weak but notice another trough with another storm system that will move through later on in the week too much of the nation's mid section and that will keep it though the temperature still
thirty day temperatures in much red normal area but were looking to see above normal along the east coast in much of the gulf coast as long as as well as the west and then a little bit on the cool side in parts of the upper midwest and into the northern plains taking a look at the precipitation for the next thirty days on the what side along the east coast along the gulf coast as well and part of the four corners region but we think it's gonna be just a bit on the dry side in the upper northwest tyne thanks, cindi. global trade has been a hot talking point this presidential campaign season. but for american agriculture, trade is not just a political talking point, it's an economic issue...directly related to exports of u-s grown farm products. one issue - in particular - is a major stumbling block in negotiating a trade deal with the european union - and that's geographical
gorgonzola cheese from italy. in this farm journal report, clinton griffiths tells us why protecting those products is matter of national identity... "europe is getting other countries to say if the name of the cheese has a european name on it you can only buy it from europe, you can't buy it from america."> house speaker paul ryan represents a portion of wisconsin's famed dairy industry and it's 43- billion dollar economic impact to the state. .yan says europe's protection of barrier. . inside this butcher shoppe in the town of melton mow-bray, stephen hallam carefully crafts the town's signature dish - the melton mowbray pork pie. it's a
and pork jelly. it's sealed in baked crust pastry. to the people of this town, this named dish is a source of regional pride....and economics. right now the product is protected by a certificate of regional authenticity from the e- u. but after the voters of the u-k decided to break- off from the european union, they now risk losing the protection of their "geographical indictor" < if european protection is lost en we need in this country to tabulate or formulate some legislation that picks up where pgi (protected geographical indication) has always been for us to protect the pork pie, the melton mowbray pork pie and other food products, for perpetuity."> mathew o'callaghan is chairman of the united kingdom protected food names association. he says the u-k has 72 protected food names - and
ybody in the uk can copy a melton mowbray pork pie for example. it's not been thought through, unfortunately."> and that could mean a loss of big bucks to the community. o'callagahn says sales of the melton mowbray pork pies bring 60 million pounds - or about 78 million u-s dollars to the area. and double that amount when you include tourism. for u-s farm report, i'm clinton griffiths. thanks, clinton. american farm bureau told me this week for every billion dollars of trade created for the u-s, it's means 75 hundred jobs here at home. when we come back, john phipps.
farmer wants to know why so much buzz is about rental rates. and to answer, here's john phipps. doug northrup from letcher, south dakota chimes in on a big topic in farmer circles: cash rents. "can you tell me why rent is the only option to go down? i know rent is high, but we have been told that we must pay more for 1. fertilizer, 2. tires, 3. seed corn, 4. trucking 5. steel, urance, corn now cheap. the cost can and should come down from all areas." doug, thanks for writing. your mug is on the way. this topic is all over the farm media and dominates farmer conversations, for good reason: we're exhausting our working capital by growing crops below breakeven. while cash rents have been singled out as the target for reduction, it's because
inputs that are absolutely needed to grow a crop like corn: seed, nitrogen, pesticides, and fuel are non- negotiable. all other inputs can be skipped, although with significant potential yield loss. this also values your labor as zero. if you add those numbers up, estimate crop income, you can arrive at a maximum you can pay for rent, without paying to farm. while it's far more accurate to include fixed version will tell you if you simply can come out of the field with any gross profit. the point is rents can't come out of income first, because you can't skip the other costs. right now this bare bones model indicates many rents are too high to be paid. that said, all input costs, including rents are not determined as much by this type of arithmetic, but by competition. if you don't have competitors for seed and
get their price forcing cash rents lower. if there are competing farmers who will pay more than your maximum rent, regardless of whether it generates profit, you have a very hard decision. i will talk much more about this process on upcoming shows, but having been through it in the eighties, my guess is we are all underestimating our abilities to make these drastic adjustments. thanks, john. if you have questions or comments just send those to john by email or on me back, if 3.50 is the new normal for corn prices, how are equipment dealers adjusting? we're on the road with machinery pete to winterset iowa after the break.
baur says while he seems more consistent yields today, the boost to his bottomline didn't happen overnight i think some people go into with a misconception that you'll see this huge savings immediately,the savings you get is taking your technology and making your operation better from that> that need for more technology is driving equipment trends across the country right now. machinery pete says potential buyers were worried prices would continue to fall the past couple years, but values continue to find footing and hold strong.
tractor tales with machinery pete. the most trusted name in farm equipment. welcome back to tractor tales folks! we're off to northeastern illinois to meet the owner of an international 350. this collector is not only a veteran in service, but also a veteran in restoring classic tractors. allen kline-ert remodeled most of this 1957
them and i was kind of shoppin around and this come for sale in local clifton here and but it brought it home it took me five months the restor her and i drive it i tractor pull it i do everything we got what we call a farm class here if you can't plow with it you can't pull and there's about sixty five of us together and the county fairs though local plowing days and stuff like that we get together and we love playing with our toys. the flag i was in the service and i'm dedicated to the flag i worked with the army in vietnam and i'm very happy in a serve that flag and i will till a day i die that's why i have flags on my tractors i take him to the local overpass here and said i did that happen with the
grill or the dash but i did everything else did it my garage the i took it out to the man cave and painted there that's where the work is done out there i got a couple more to do this year if i want that i don't know yet but i got a friend go help me give it to my sons when i pass away i guess her we can't sell it it's our tractor i am very proud of it very proud i did all the work myself for you know i painted it myself except for the hood and that but when i sit on that i'm just as proud as can say when you get on him i did it it's mine and iwouldn't trade the experience for nothing everybody ought to do it thanks so much. today's country church salute goes to st john lutheran church of charter oak iowa, celebrating their 135th anniversary this year. the church that stands today is 90 years old. and an interesting fact, the church is actually 10 years older than the town, as
chigan. last week, he received 2 inches of rain in the west central portion of the state. he says other areas had anywhere from 3 to 5 inhces. and as a result, the crops are happy. well, this is what the te fair looked like last friday night. five inches of rain fell in 12 hours. .matt burgener was at the fair and shared these photos. the happy hollow campgrounds - on state fair property - was especially hard-hit as run-off drained into the gulley. exhibitors park their campers there. state fair officials say 54 campers were un-inhabitable. scott sent us this pciture of his son will spraying tobacco. apparently, we
show off his skills. and we shared this one on our facebook page. meet 9 yr- old trey kimbrell. he just can't get enough of farming... when most boys his age would be playing video games, he's in the field from morning to night, running the combine solo. and if he's not combining, he's running the grain cart. so impressive and proof that hard work really can start at a young age. and in agriculture, it's almost like farm kids have a hard working gene. impressive. and here's a sunset shot my parnter in crme mike byers shot. he's a videographer. he took this near champaign, illioni.s thanks, mike. if you have any photos to share, you can send those to us at mailbag-at-u-s-farm-report-dot- com or check us out on facebook and twitter. for all of us at u-s farm report, i'm tyne morgan. thank you for watching u-s farm report. be sure to join us right here again next week, as we work to build on our tradition. have a great weekend, everyone. high strength steel fo rhigh stregth durabillity. the
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