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Argentina poised to ship corn to China for first time in 15 years... Argentina is preparing corn shipments to China that will be the first in 15 years, Bloomberg reports. Argentina completed steps a few weeks ago to get approval from Beijing to open the Chinese market for its corn, after striking an agreement on sanitary requirements last year. The head of CIARA-CEC, a national grain export group, said the cargoes are being arranged by Cofco International Ltd.
In January, Chinese customs authorities also authorized traders in Argentina to export wheat for the first time, though no shipments have yet been confirmed.
Ag economists: Biggest headwinds, opportunities ag economy... Ag economists are growing more negative regarding the financial health of the crops sector of agriculture, but their views on livestock are becoming more positive. The latest Ag Economists’ Monthly Monitor, a joint survey from the University of Missouri and Farm Journal of nearly 70 ag economists from across the U.S., shows the lack of exports, as well as the current crop prices, are eroding outlooks on the crops side. While strong beef demand and cheaper feed prices are creating more optimism in cattle. When asked what economists view as the most negative aspect of their outlook of the ag economy, economists said:
· Crop output prices retreating more rapidly than input costs
· Commodity prices below economic break-even production costs
· Export outlook from the U.S., specifically the lack of Chinese demand
· U.S. trade policy regardless of party affiliation with more international trade competition
· Constant challenges to demand and policy that adds barriers to existing and potential new demand streams
As for the most positive aspects for the outlook for U.S. agriculture, economists noted:
· Over the next couple of years, cow-calf operators should have good profitability, especially in areas of the country with good forage conditions
· Adverse world weather boosting U.S. exports
· The possibility of good yields that will help farmers hit their financial goals
· Discipline by producers to keep acreage expansion in check and U.S. prices being more competitive in the global market.
· Farmers eager to make adaptations necessary to stay in business
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Farmer sentiment drifts lower in June... The Purdue University/CME Group Ag Economy Barometer dropped three points (2.8%) in June to a reading of 105. That was 16 points (13.2%) lower than last year. The Index of Future Expectations fell five points, while the Current Conditions Index increased one point during June.
The impact of rising interest rates on their farm operations has become a bigger concern for producers in recent months. Interest rate risk and high breakeven levels combined with concerns that crop and livestock prices could weaken are holding back producer sentiment and making producers cautious about making large investments.
The Farm Financial Performance Index rose three points in June to a reading of 85. There’s been a tendency in recent years for producers’ financial performance expectations to bottom out in spring and improve as the spring crop growing season progresses. This year seems to be following that pattern as the index has risen nine points over the last two months.
Emerging economies will continue to drive global agricultural markets... Emerging economies have driven global agricultural market developments over the past 20 years and will continue to do so, with shifts due to changing demographics and economic affluence. The OECD-FAO Agricultural Outlook 2024-2033 highlights the increased roles of India, Southeast Asia and Sub-Saharan Africa, while China’s influence is expected to decline. China’s share of global agricultural and fisheries consumption growth will drop from 28% to 11% due to a declining population and stabilizing nutrition patterns. Conversely, India and Southeast Asia are projected to account for 31% of global consumption growth by 2033, driven by urbanization and increasing affluence. Sub-Saharan Africa will contribute 18% due to population growth.
Total agricultural and fisheries consumption is expected to grow 1.1% annually, mainly in low- and middle-income countries. Middle-income countries will see a 7% increase in food calorie intake, while low-income countries will see a 4% increase, insufficient to meet the Sustainable Development Goal of zero hunger by 2030.
Key projections include a shift toward productivity improvements rather than land expansion, leading to a decline in agriculture’s global greenhouse gas emissions intensity. However, significant productivity gaps will persist, particularly in Africa and Asia, challenging food security and farm incomes. Well-functioning international agricultural markets remain crucial for global food security, with 20% of calories traded globally.
The report also simulates the impact of halving food losses and waste by 2030, projecting a 4% reduction in global agricultural greenhouse gas emissions, lower food prices and reduced undernourishment. Commodity-specific highlights include continued growth in cereal grain demand for food and feed, yield challenges for oilseeds, dominance of poultry in meat consumption and significant growth in milk production in India and Pakistan. Aquaculture will drive fish production, accounting for 55% of global fish production by 2033.
Commodity highlights based on the dedicated chapters include:
· Cereal grain demand is projected to continue to be led by food use, closely followed by feed use. In 2033, 41% of all cereals will be directly consumed by humans, 36% will be used as animal feed, while the remainder will be processed into biofuel and other industrial products.
· Yield challenges are projected to persist for oilseeds, with major producers experiencing slow growth or declines in yield, notably in Indonesia and Malaysia for palm oil, and the European Union and Canada for rapeseeds.
· Poultry meat will dominate the growth of the meat sector, primarily due to its relative affordability and perceived nutritional advantages. It is projected to account for 43% of total meat proteins consumed by 2033.
· World milk production is projected to grow at 1.6% per year over the next decade, faster than most other important agricultural commodities. Most of the growth will occur in India and Pakistan.
· Over 85% of the additional projected fish production will stem from aquaculture, elevating its share in global fish production to 55% by 2033.
EPA defends 2023-25 RFS mandates... EPA defended its 2023-2025 biofuels mandates against challenges from both environmental and industry groups. EPA asserted that it set the volumes for cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel appropriately, in line with the Renewable Fuel Standard (RFS) program under the Clean Air Act. This program mandates a specific volume of renewable fuel to replace or reduce fossil fuels in transportation fuel, home heating oil, or jet fuel.
The challenged standards include volumes and percentage targets for 2023-2025, addressing previous court remands regarding the 2014-16 standards. EPA also mandated refiners and importers generate 500 million gallons in supplemental volume, split between 2022 and 2023. EPA claims these volumes were set lawfully and reasonably, using analyses upheld by the court in a previous decision.
Challenges also include the 2023 supplemental volume requirement for an additional 250 million gallons and recordkeeping provisions for food waste used as feedstock. EPA argued these requirements are consistent with previous court decisions and necessary for ensuring compliance with the RFS.
EPA, along with the National Marine Fisheries Service and the U.S. Fish and Wildlife Service, also determined the rule would not likely negatively affect any Endangered Species Act-listed species or their habitats.
The case, Am. Fuel & Petrochemical Mfrs. v. EPA, is being heard by the U.S. Court of Appeals for the D.C. Circuit, with various petitioners represented by multiple law firms.
Hong Kong requires FSIS-certified list of eligible exporters of raw meat, poultry... USDA’s Food Safety and Inspection Service (FSIS) provided an initial list to Hong Kong on July 1. Once notified by Hong Kong, these establishments will be added to the FSIS Eligible Plant List for shipment. FSIS noted that Hong Kong has not specified its requirements for new U.S. certified establishment lists after July 1 and will provide updates when available. The potential impact on U.S. raw meat and poultry exports to Hong Kong remains uncertain and needs monitoring.
USDA plans to amend FMMOs... USDA plans to amend Federal Milk Marketing Orders (FMMOs), updating pricing formulas for all 11 orders based on a 49-day national hearing. Key changes include:
· Updating Milk Consumption Factors to 3.3% true protein, 6.0% other solids, and 9.3% nonfat solids.
· Removing 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program survey, using only 40-pound block cheddar cheese prices for monthly average cheese price determination.
· Updating manufacturing allowances to Cheese: $0.2504; Butter: $0.2257; NFDM: $0.2268; and Dry Whey: $0.2653.
· Proposing a butterfat recovery factor update to 91%.
· Setting Base Class I Skim Milk prices at the higher of the advanced Class III or Class IV skim milk prices for the month.
· Adopting a rolling monthly Class I extended shelf life (ESL) adjustment for better price equity for ESL products.
· Updating Class I differential values to reflect increased servicing costs, with county-specific Class I differentials specified.
A 60-day comment period will follow the plan’s publication in the Federal Register in early July.
National Milk Producers Federation (NMPF) President & CEO Gregg Doud said: “Based on our initial reading, NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended Federal Milk Marketing Order modernization plan. Crafting an effective milk-pricing system for farmers is complex and requires a careful balance. USDA’s plan acknowledges that complexity and, while not matching our proposal in every detail, looks largely in keeping with the comprehensive approach painstakingly determined by the work of dairy farmers and their cooperatives over the past three years.”
USDA analysts said if the “higher of” formula had been in use from 2019-23, farmers would have received $4 billion, or 10%, more for fluid milk than they actually were paid. When all the amendments are weighed, the total pool value of milk over the five years would have been $2 billion, or 1.6%, higher than it was. The pool is the combined value of the four classes of milk.
Shippers brace for Canadian rail strike... Shippers are preparing for supply-chain disruptions as Canadian rail workers, affiliated with the Teamsters Canada Rail Conference (TCRC), voted overwhelmingly to reauthorize strike action. Over the weekend, 10,000 workers at rail operators Canadian Northern (CN) and Canadian Pacific Kansas City (CPKC) voted, with 98.6% in favor of strike authorization, valid for 60 days. Previously authorized for May 22, the strike was delayed by a government request to determine if rail services were essential, which expired today. The union stated that due to the delay, they had to reauthorize strike action. If the Canada Industrial Relations Board (CIRB) decides the service is not essential, a strike could happen with just 72 hours’ notice. Both rail operators and the union claim rail services are not essential. One large shipper is planning for supply-chain disruptions from mid-July.
Negotiations continue, but the parties have not reached an agreement, with the union defending against company demands on crew scheduling, hours of work, and fatigue management. TCRC called for industrial action after five months of unsuccessful negotiations following the expiration of the previous agreement in December. The union criticizes CN and CPKC for trying to squeeze more availability out of train crews amid labor shortages and calls for improved working conditions. A strike could cause widespread disruptions to rail and ocean shipping, impacting ports including Vancouver, Prince Rupert, Montreal and Halifax, and exacerbating port congestion across Canada.
Moderna secures funds for pandemic flu vaccine... The Department of Health and Human Services awarded $176 million to Moderna for late-stage clinical trials of influenza vaccines starting in 2025, aiming to target multiple strains, including the current H5N1.
Results from Moderna’s early bird flu studies are expected soon. The U.S. government contract, facilitated through the Biomedical Advanced Research and Development Authority, includes options for purchasing vaccine supplies, ensuring fair pricing for taxpayers. Additional contracts with other pharmaceutical companies for mRNA vaccines are anticipated, though details on negotiations with Pfizer were not disclosed.
Traditional pandemic flu vaccines are also in development. The U.S. has two candidates tailored to H5N1, with pre-filled syringes ready and plans for CSL to produce 4.8 million more doses by mid-July.