Evening Report | September 10, 2024

Top stories for Sept. 10, 2024

Pro Farmer's Evening Report
Pro Farmer’s Evening Report
(Pro Farmer)

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

USDA’s September crop reports coming Thursday... USDA will update its corn and soybean crop estimates on Thursday, which will include its first objective field (yield) data. Analysts expect little change to those crop estimates from the initial forecasts last month. Analysts expect slightly smaller corn and soybean ending stocks estimates for 2023-24. For 2024-25, projected ending stocks are expected to decline for corn and wheat, while a modest increase is anticipated for soybeans. The following pre-report estimates are from a Reuters poll; Bloomberg for cotton.

Expectations for U.S. Corn, Soybean and Cotton Production

Corn

Production (bil. bu.)

Yield(bu. per acre)

Harvested acres (mil.)

Average est.

15.076

182.4

82.650

Range

14.932 – 15.147

180.5 – 183.5

82.200 – 82.710

USDA August

15.147

183.1

82.710

Soybeans

Production (bil. bu.)

Yield(bu. per acre)

Harvested acres (mil.)

Average est.

4.589

53.2

86.259

Range

4.447 – 4.740

52.0 – 54.9

86.000 – 86.300

USDA August

4.589

53.2

86.271

Cotton

Production (mil. bales)

Yield(lbs. per acre)

Harvested acres (mil.)

Average est.

15.31

NA

NA

Range

14.88 – 16.10

NA

NA

USDA August

15.108

840

8.63


Expectations for U.S. Carryover

Corn – billion bushels

2023-24

2024-25

Average est.

1.856

2.007

Range

1.817 – 1.927

1.819 – 2.133

USDA August

1.867

2.073

Soybeans – million bushels

2023-24

2024-25

Average est.

341

565

Range

330 – 365

443 – 670

USDA August

345

560

Wheat – million bushels

2023-24

2024-25

Average est.

NA

823

Range

NA

800 – 842

USDA August

702

828

Cotton – million bales

2023-24

2024-25

Average est.

NA

4.68

Range

NA

4.10 – 5.25

USDA August

3.15

4.50


Expectations for Global Carryover

Corn – MMT

2023-24

2024-25

Average est.

NA

309.39

Range

NA

307.35 – 314.20

USDA August

308.52

310.17

Soybeans – MMT

2023-24

2024-25

Average est.

NA

133.86

Range

NA

132.40 – 135.00

USDA August

112.36

134.30

Wheat – MMT

2023-24

2024-25

Average est.

NA

255.31

Range

NA

250.48 – 258.00

USDA August

262.36

256.62

Cotton – million bales

2023-24

2024-25

Average est.

NA

77.46

Range

NA

76.50 – 78.40

USDA August

75.78

77.61

Vilsack confident Clean Fuels Tax Credit will be finalized by January... Reuters reported USDA Secretary Tom Vilsack is “confident” the clean fuels tax credit will be finalized by end of the Biden administration in January. “I’m confident that we’re going to get‘er done,” Vilsack said at a summit in Washington, D.C., hosted by the biofuels trade group Growth Energy. Vilsack indicated he’s hopeful the Department of Treasury can identify practices that result in guidance for the 45Z tax credit that works better for U.S. producers. He expressed hope that more crops and practices can be included in the guidance, compared to the current 40B credit. Vilsack suggested the timeline is focused on “end of the year, beginning of next year.” The 45Z Clean Fuel Production Credit is set to take effect on Jan. 1, 2025, replacing several expiring biofuel tax credits.

Industry stakeholders and lawmakers have been urging for timely guidance to provide certainty for producers and the biofuels supply chain. USDA is hoping to make more feedstocks and individual farming practices eligible for the credit and is in conversation with the energy and transportation departments about how to do so, Vilsack said. “We are acutely aware of the calendar. To the level it can be, it’s on a fast-track,” Vilsack said. The Treasury Department will ultimately issue the rule.

Harris vs. Trump on key ag issues... A discussion was held Monday hosted by the Farm Foundation on key differences between the agricultural policies of Kamala Harris and Donald Trump. Rod Snyder, the director of the Environmental Protection Agency’s newly established Office of Agriculture and Rural Affairs until he resigned in August, represented Harris. Kip Tom, an Indiana farmer and Trump’s ambassador to the United Nations agencies in Rome who is the co-lead of the Farmers and Ranchers for Trump Coalition, a fundraising group, represented Trump. Both spoke for themselves and not as campaign representatives during the session. The debate highlighted stark contrasts between the candidates’ approaches to agricultural policy, with Harris’ camp emphasizing stability and Trump’s promising change and deregulation. Highlights:

Policy approaches

· Harris/Snyder: Emphasizes “certainty” and continuation of current policies.

· Trump/Tom: Promises “strong leadership” and reduced regulation.

Inflation/farm income

· Harris/Snyder: “I think it’s important to acknowledge that the farm economy is in a down cycle, which all of us should be concerned about,” said Snyder. “However, in terms of policies being advanced by Donald Trump, in my opinion, the cure is worse than the disease.”

· Trump/Tom: Harris bears the blame for inflation and declining farm income.

Trade policy

· Harris/Snyder: Criticized Trump’s trade wars as causing “chaos” and harming farmers. “His [Trump’s] most recent proposal of 10% to 20% across-the-board tariffs for all imported products would lead to further loss of global market share for U.S. agriculture, not to mention rapid inflation for consumers,” said Snyder. Trump has said tariffs could be as high as 60% on Chinese products.

· Trump/Tom: Defended tariffs on China, saying Trump would aid farmers if needed, referring to USDA payments of $23 billion to farmers in 2018 and 2019 to offset the impact of the trade war with China. Trump has a better record than Harris on trade policy, said Tom, describing the China/U.S. trade war as a U.S. victory that resulted in larger exports to China. “Donald Trump is clearly the leader in making sure that we have a strong ag economy and make sure we can continue to export our excess here in this country,” he said.

Taxes

· Trump/Tom: Twice as many farmers would face estate taxes under Harris’s proposals than now face liabilities, said Tom. “It could be the most undermining issue.”

· Harris/Snyder: Snyder said the estate taxes reaches only a few farmers now.

Of note: Federal estate tax exemption for 2024 is $13.61 million per individual or $27.22 million for married couples. Exemption amount established by the 2017 Tax Act (TCJA), which roughly doubled the previous exemption. Top federal estate tax rate currently 40%. If TCJA expires, the estate tax exemption would revert to pre-2018 levels, which would be approximately $5 million to $6 million per person (adjusted for inflation). This would effectively cut the current exemption amount in half.

Immigration and farm labor

• Harris/Snyder: Supports immigration reform to address farm labor needs.

• Trump/Tom: Claims deportations won’t affect agriculture due to H-2A program usage.

Regulation

· Harris/Snyder: Defends current regulatory approach.

· Trump/Tom: Promises to reduce “over regulation” of the Biden-Harris administration.

Renewable fuels

· Harris/Snyder: Criticized Trump’s inaction on the Renewable Fuel Standard.

· Trump/Tom: Did not directly address renewable fuel policies.

Project 2025

· Harris/Snyder: Expressed concern over agricultural proposals in Project 2025.

· Trump/Tom: Claimed Trump has no association with Project 2025.

Vice Presidential expertise

· Harris/Snyder: Highlighted Tim Walz’s experience on the House Agriculture Committee.

· Trump/Tom: JD Vance’s agricultural experience was not discussed.

NPPC highlights key challenges for hog industry... Brian Humphreys, CEO of the National Pork Producers Council, said: We’re here to find solutions, not just discuss challenges. We need a 2024 Farm Bill — not an extension. We need a legislative fix to California’s Prop 12, resolutions to the labor shortage, and an active trade agenda. NPPC says moving a new farm bill this year with language restricting state animal welfare rules is the group’s top priority.

· Need for new farm bill: “With all the stress on farmers now, it’s important that we get this moved now while we’ve got the opportunity,” Duane Stateler, president-elect of NPPC, said in the virtual briefing. “If the farm bill goes into next year, it starts all over. We have many good things in this farm bill which makes it imperative we get it done in 2024,” Lori Stevermer, NPPC president, said.

· Proposition 12: The 2024 Farm Bill is a golden opportunity to address a top issue for pork producers across the country – California Prop 12,” Stevermer said. Proposition 12, a 2018 California ballot initiative, prohibits the sale of uncooked whole pork meat not produced according to the state’s arbitrary housing dimensions. The initiative places the cost and compliance burden on pork producers, who are nearly all located outside of California, and puts the industry at risk of significant consolidation, NPPC argues. The Supreme Court of the United States said this is an issue for Congress to solve, and NPPC has been urging passage of the farm bill which includes a federal solution to Prop 12. “We cannot continue down a path of unscientific rules and regulations,” Humphreys said. “It’s not a question about what has happened, but it’s a question of how do we move forward and protect the U.S. from this patchwork of regulations? We appreciate the bipartisan solution in the farm bill to make that happen.”

· Stevermer said Prop 12 impacts extend beyond producers as it has also resulted in higher prices for consumers. “Pork prices are up on average 20% since Prop 12 went into place, and the supply is down about 20% so that’s not good for consumers, and it’s not good for farmers either,” she said.

· Labor issues remain a concern, with the group pressing for improvements to the TN skilled guestworker visa program. NPPC said policy concerns include addressing the persistent ag labor shortage and contending with inflationary impacts on production costs. While ag labor discussions often focus on the H-2A ag guestworker program for low-skilled farm laborers, pork industry officials said they also face difficulty using the TN visa program, which allows businesses to procure skilled workers from Mexico and Canada. The State Department recently made changes to the program aimed at streamlining it, but NPPC officials said they have effectively closed off the ability to use TN visas by the pork sector. “It just seems like every day there’s less and less TNs approved,” said NPPC Vice President Rob Brenneman. He explained that the program has become more important in helping producers secure the workers skilled in utilizing new production technologies that are difficult to find in the domestic labor market. “I think it’s absolutely absurd that we just keep getting TNs denied … we’ve been to the State Department, and we’ve been to the White House and had conversations, and it just seems like they’re doing everything in their power to do the opposite of what we’re asking because nothing’s changed,” Brenneman said.

· Cost of production. NPPC officials said that besides labor shortages, producers also continue to grapple with higher production costs, though the growth in costs has slowed in areas like feed. Other fixed costs like transport, labor and utility bills mean overall production costs remain roughly 25% higher than they were three years ago, officials stressed. “While we’re getting a little relief on the feed side, we’re still seeing elevated costs of production,” said NPPC board member Scott Hays.

· CAFOs: Officials were asked to weigh in on a lawsuit from environmental groups seeking to compel EPA to act on their petition seeking an overhaul of how the agency regulates concentrated animal feeding operations (CAFOs). NPPC and other livestock and poultry interests are backing EPA’s decision to deny the petition, as the question heads to federal court later this week. Calling the CAFO lawsuit “an attack on ag by activist groups,” NPPC’s Statler said, noting EPA was right to deny the petition. “What they’ve asked EPA to do was illegal.” Stateler praised EPA for engaging with stakeholders including NPPC on the issue to gather information before considering any additional action. “They decided to take a look and look at the facts, and they turned it over to explore the issues that are really involving all CAFOs and the ag groups, including NPPC, are participating in that process,” he added, saying the group looks forward to finding a solution that works for all involved.

· Trade policy: NPPC continues to urge new trade agreements, but acknowledges new FTAs are unlikely. “We know that’s not how things are being done — in the manner that maybe they were, you know, 10 or 15 years ago,” Stevermer said regarding new FTAs, but she added that such agreements are not an end all be all for trade. Trade programs like the Generalized System of Preferences (GSP) and African Growth and Opportunity Act (AGOA), both pending renewal, are also important for the sector, she said.

Argentina’s Bioceres says HB4 wheat launch in U.S. will take at least two years... The head of Argentine biotech firm Bioceres said it will take at least two years for the firm to start marketing its genetically modified wheat variety HB4 to buyers in the U.S., following a U.S. government approval. Speaking on a company earnings call, Bioceres CEO Federico Trucco said that before the launch of U.S. sales, HB4 wheat must be developed with wheat genetics used in the U.S. and approved by countries that import U.S. wheat.

Bioceres is working with the U.S. Wheat Associates and the National Association of Wheat Growers, two U.S. farmer groups that require that new varieties like HB4 wheat win approval from U.S. export markets prior to their use.