Wheat bulls were happy to see production down more than many in the trade had been anticipating. The 2015 U.S. winter wheat yield was reported at 42.5 bushels per acre, an 8 year low, while acres are at a 5 year low. Unfortunately, even with the larger than expected reductions in most all wheat classes, the USDA is still forecasting a total harvest of 2.051 billion bushels, a number that is slightly higher than last years 2.062 billion bushel harvest. On a global perspective, Russia is supposedly reducing its export tariff, but at the same time I’m hearing they are raising their domestic intervention price by an even larger amount. In other words, both the bulls and the bears can argue its a win. Below are few more interesting facts that were released by the USDA in the September 30 Small Grains Summary:
- On-farm wheat stocks are estimated at 647 million bushels, down 9 percent from last September. Off-farm stocks, at 1.44 billion bushels, are up 21 percent from a year ago.
- Wheat Feeding for the quarter seemed to be about 300 million bushel. Which is up by about 40 million bushels form last year.
- HRW stocks suggest 6/16 US dvancing over 100 mb vs. 6/15, HRW stocks stable at just over 200 mb. Planted acreage was down from 2014 in most of the major Hard Red Winter (HRW) growing States. Particularly large decreases occurred in Colorado, Kansas, Montana, and North Dakota. Harvested acres were up across the Southern HRW region, with large increases in Oklahoma and Texas compared with 2014. Nationally, HRW production totaled 827 million bushels, up 12 percent from 2014.
- SRW stocks down 25 mb to 125 mb area and white wheat stocks down over 50 mb to only 15 mb. In the Soft Red Winter (SRW) growing area, planted and harvested acreage decreases from 2014 were experienced throughout most of the region. SRW production totaled 359 million bushels, down 21 percent from 2014.
- White winter production totaled 184 million bushels, up slightly from the previous year. Harvested acreage in the Pacific Northwest (Idaho, Oregon, and Washington) was down three percent from 2014. Yields were up from last year in Idaho and Washington.
- Other spring wheat: Production for 2015 is estimated at 599 million bushels, up less than 1 percent from the 2014 total. Harvested area totaled 12.9 million acres, up 2 percent from 2014. The United States yield is estimated at 46.3 bushels per acre, down 0.4 bushel below the 2014 average yield. Of the total production, 564 million bushels are Hard Red Spring wheat, up 2 percent from 2014. Record high yields are estimated in North Dakota and Minnesota.
- Durum wheat: Production for 2015 is estimated at 82.5 million bushels, up 53 percent from the revised 2014 total. Grain area harvested totaled 1.90 million acres, up 41 percent from the previous year. The United States yield is estimated at 43.5 bushels per acre, up 3.3 bushels from 2014. Production in North Dakota, the largest Durum-producing State, is up 50 percent from 2014. Durum wheat production in Montana for 2015 represents a record high for the State. A record high yield is estimated in North Dakota for 2015.
A new poll from Chile-based Latinobarómetro finds that support for Latin American governments has been falling steadily since 2009. Over the past year, flailing economies, corruption charges and political scandals have caused citizens to become even more disillusioned leaving the region’s governments grappling with historically low approval ratings. Latin America’s economic rise a dozen years ago led to approval ratings that averaged 60% across the region in 2009. Now, the approval ratings for leaders is down to 47% on average, Latinobarómetro found. Brazil’s President Dilma Rousseff’s approval rating has slumped to just 7%, while in Chile, President Michelle Bachelet’s was at 24%. Peru’s president, Ollanta Humala, has an approval rating of 13%. Embattled Venezuela President Nicolás Madurohas seen his approval rating drop about 30 percentage points to the mid-20s in a little over two years in office. In Guatemala, former president Otto Pérez was forced to resign earlier this month to face corruption charges. Latin America’s economies are hamstrung by weaker Chinese demand for their resources. The region’s currencies have plummetted against the U.S. dollar and many economists expect the currencies to depreciate even further when the U.S. Federal Reserve begins increasing interest rates. Analysts say this has marked the return of political risk to the region. Capital Economics says in the near term, this will be yet another headwind for the region’s financial markets. But further out, it means that governments will find it more difficult to stabilize (and then reinvigorate) their economies in a world of low commodity prices. (Source: The Wall Street Journal, Capital Economics)
This story was e-mailed my direction the other day and I wanted to pass its long… Hope you enjoy, have a safe and happy weekend!
Galva, Illinois, may only have about 2,500 residents, but it has a whole lot of love. Carl Bates recently entered hospice care for an aggressive form of cancer. As you can imagine the Bates family became worried that his crops might not get out of the field. Through social media and word of mouth, the town heard about the Bates situation and decided they needed to help. Carl’s cousin and his neighbors put together a plan to harvest his farm. Local businesses, including a bank and a machinery company, showed support by donating food and drink to the workers. As you can see in the pictures below a team of area farmers showed up with 10 combines, 12 grain carts and 16 semis (with 12 donated by Rumbold & Kuhn). In about 10 hours they were able to harvest a 450 acre field of corn. The last of an estimated 100 semi-loads were delivered to a local elevator, that stayed open late to receive them all. Carl was able to spend a small amount of time seeing the spectacle before having to head back indoors but made it back out to personally thank each person who helped out. They not only donated their time, but their machines and fuel alongside a slew of local businesses some of which even donated food for the harvesters. If you want to more pictures or want to read the whole story go look at the album on Rumbold & Kuhn’s Facebook page.
>>>Photo’s Property of the Bates Family
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Sales of pumpkin products have grown 79% since 2011, hitting $361 million in 2014 — and analysts expect further growth this year. According to Nielsen, it’s not just pumpkin pie filling and pumpkin spice lattes that we’re spending the big bucks on. Americans spend $13 million on pumpkin dog food, $11 million on pumpkin yogurt and $5 million on pumpkin-flavored milk. “Pumpkin isn’t just for pie filling anymore — pumpkin flavored cream and coffee are two large growth drivers of pumpkin flavoring.” But to really illustrate how pumpkin-crazy we are, consider these figure – Americans spent over $1 million on pumpkin toothpaste and just under $1 million on both pumpkin pasta sauce and pumpkin gum last year! Apparently, we don’t want to make much of this stuff ourselves though. Fresh pumpkin sales have fallen from $48.1 million in 2011 to $39.5 million in 2014. (Source: Nielsen)
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The USDA recently released some interesting data about the state of the organic industry. It’s been well documented that demand has been rising over the past few years. Last year, more than 14,000 farms sold $5.5 billion in organic products, up +72% since the last survey conducted in 2008. Despite the seemingly booming demand though, both the number of farms and the amount of land dedicated to organic production has actually declined. There were 14,093 organic farms in the United States last year, accounting for 3.6 million acres, with another 122,175 acres in the process of becoming organic, according to the latest National Agriculture Statistics Survey. However, in 2008 there were 14,540 organic farms making up 4 million acres with another 128,476 acres going through transition. It’s not a huge reduction, but it’s definitely puzzling considering the growing size of the market. Organic sales are mostly concentrated in fruits and vegetables, along with milk and eggs. Meanwhile, producers of organic meats are struggling to boost production even as big retailers such as Target and Costco Wholesale seek to expand the number of products they offer. With about 90% of U.S. corn and soybeans production being genetically modified, those seeking organic feed are forced to turn to imports. Soybeans are the second-largest U.S. organic import following coffee, totaling $184 million last year, while organic corn imports totaled $35.7 million. Those total’s are pretty paltry in comparison to the combined $92.7 billion value of those crops grown in the U.S. last year, but there is obviously a huge supply and demand gap within our borders. The biggest problem for grain producers that may be considering switching to organic is the certification process – it’s a three year process to transition land from traditional to organic, meaning that land basically produces no revenue during that time. It will be interesting to see if falling commodity prices incentivize farmers to give organics a try. In some areas I hear organic corn has actually been trading for more than double the price of traditional corn. Whether that price incentive remains by the time you wrap up the three year transition is a big gamble. Full results of the USDA Organic Survey are available HERE.
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