California agricultural tech company Fodderworks – a division of Simply Country Inc. has created a fully automated robotic fodder-growing system that can produce daily quantities of fresh, non-genetically-modified food for livestock. With the goal being to save time, space, money and natural resources the system uses vertical farming techniques to produce sprouts – known as fodder when fed to livestock. Vertical farming is nothing new for the production of food for human consumption but the California based company believes along with the almost 10 billion humans to be fed by the year 2050, there will be many more livestock to feed as well and possibly less usable land. The process used to grow the fodder is simple, cheap and highly efficient. Grains are spread out on trays, the trays are stacked on shelves, and the trays washed in light and water from overhead lamps and sprayers. By the sixth day, the trays are each filled with a mat of bright green sprouts. The mats are then hauled off straight to the feedlot . No extra fertilizers. No pesticides. Barley seems to be the sprout of choice to replace or at a minimum be served alongside the traditional dry feed. Barley is not only deemed one of the highest in nutritional value but is readily available being that it is used in the brewing of beer. The innovation will allow farms choosing to adopt the Robotic method to save thousands of dollars over time when compared to the large labor force required to grow and deliver the sprouts. Critics of automation which puts humans out of work feel this is another example of the after effect of innovation. Fodderworks General Manager Kyle Chittock does not agree with this assessment as he states this type of production has never been done before. He believes the automated robot allows their customers to focus more on growing their businesses instead of being concerned about making feed. “The largest system we’ve installed, that’s manually operated, is out there producing five tons a day , but at that scale there’s a lot of labor involved. If you take the average dairy in California, they have over a thousand cows, and they don’t want to have to hire a bunch of people just to produce feed. That’s not what they want to focus their time and energy on.” Chittock goes on to say that by using their automated system of vertical farming, many jobs are created as a result of the resourcing and production of their equipment. As I have stated many times, you don’t have to use all the latest technology making its way into the ag space, but you better know it’s coming and determine if it can make your operation more efficient! Watch a video of Fodderworks in action by clicking HERE. (Source: Motherboard).
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According to a new summary of ethanol co-products from the Renewable Fuels Association (RFA) U.S. exports of distillers grains set a new record of 12.56 million metric tons in 2015. That puts last year’s DG export number +11% higher than in 2014 and more than double the amount we were exporting back in 2009. The report finds that U.S. DG exports were shipped to 45 countries on five continents. Between ethanol and distillers grains, it’s reported that the industry exported the equivalent of 800 million bushels of corn last year. If that amount of corn had been exported in raw form it would have been worth $3.6 billion, but in the form of ethanol and distillers grains it was worth $4.8 billion. This is value-added agriculture at its best! Below are more highlights from the recent report. If you would like to see early-2016 data click HERE. (Source: Renewable Fuels Association).
34% of U.S. distiller’s grains production was estimated to be exported in 2015, meaning one out of every three tons produced was shipped to foreign markets.
China, Mexico, Vietnam, South Korea, and Canada represented the top five markets in 2015 for DG exports. China received 50% of DG exports, while Mexico received 13%.
Imports of DDGs into the U.S. was lead by Canada, who shipped 401,554 metric tons into our borders. China and Brazil were the only other exporters of DDGs to the U.S. market in 2015.
The North American Meat Institute has released a “Media MythCrusher” that they hope will help clarify the role of sodium nitrite in cured meats. From what I understand the substance prevents the growth of botulism bacteria. It also contributes to the characteristic pink color of meats like ham and salami. In some circles, sodium nitrite has long been vilified as a “known carcinogen”, despite the fact that numerous scientific panels have evaluated its safety and concluded it’s not only safe, it’s an essential public health tool due to its bacteria inhibiting properties. The National Toxicology Program, an agency within the U.S. Department of Health & Human Services, conducted a multi-year study to evaluate sodium nitrite’s safety and found that the substance was safe at all of the current levels used. It’s not entirely incorrect to say it can be deadly though. Without a doubt, nitrite can be poisonous, but only when consumed in huge quantities. Massive doses of it can lead to a condition called methemoglobinemia. Most common in infants, the condition occurs when nitrite in the blood deactivates hemoglobin, which allows red blood cells to carry oxygen. Under certain conditions, small amounts of nitrite can form nitrosamines, which have been shown to cause cancer in lab animals. In an effort to minimize nitrosamine formation, the USDA limits sodium nitrite to a ratio of 200 parts per million. Keep in mind, this comes despite the fact that nitrite sodium used as a preservative has been found to be completely safe, and actually no different than the nitrite found in vegetables. Yes, nitrite is a naturally occurring substance in vegetables, which in some even exceeds the USDA’s limits. Scientists say that 93 percent of human nitrite intake comes from vegetables, particularly root vegetables such as celery, beets, carrots, spinach and lettuce. Humans also get regular doses from their own saliva, thanks to the bodies own natural nitrogen cycle. On average, less than 5% of human nitrite intake comes from cured meats. In the NAMI’s release, they are asking professionals that write about food issues to be mindful of those statistics and how key words are used when describing nitrite so as not to further perpetuate confusion or outright misinformation. You can read their full press releaseHERE.
The cattle industry has been upset by what they feel is unnecessary volatility in the CME Group’s live cattle futures market, something they blame on several different factors including high frequency traders and the demise of the cash market. Last Friday, Terry Duffy, Chairman of the CME Group, met with cattlemen to discuss the issues. One problem that industry experts have identified is the shrinking cash market, which many feel is partly to blame for the extreme volatility the last part of 2015. Because producers have increasingly been locking in prices months in advance, cash sales have greatly been reduced, leaving futures markets one less cue to gauge where contracts should be trading. Duffy says the loss of the cash benchmark is something the futures market cannot address. In order to mitigate the declining cash trade and improve price transparency, the idea for an online auction has emerged. A trial run of this online auction was conducted earlier in January, organized by Arcadia Asset Management and with the participation of the four major meat packers – JBS, Cargill Inc, Tyson Foods Inc and National Beef Packing Company. The auction should allow for improved pricing models as it would allow for more participants from an expanded geographical area. Arcadia says they are aiming to host an official live auction within 60 days. Meanwhile, the CME is implementing some changes in an effort to curb volatility. One change that went into effect Monday, February 1st, was to add live cattle futures to an existing CME system that puts a cap on how many order updates traders can send in relation to the number of trades they actually execute. The exchange is also examining five-to-six second trading delays designed to act as circuit-breakers. At last week’s presentation, Duffy also expressed his opinion that the trading hours for Cattle Futures are too long and the CME will look at shortening trading sessions. As for high-frequency traders, Duffy denies that they are to blame for the erratic price swings saying HFT only accounts for about 10% of cattle futures trading. From my perspective, technology is rapidly changing our world and has become much more disruptive in all of our industries. In the wake of this technological boom, the CME is going to have an extremely tough time trying to keep everyone happy, but they seem to be taking all of the necessary steps and understand exactly what is needed to provide the best in risk-management tools. I have confidence in the fact they will get it all ironed out. We just have to remember how large the “technology” wave is that is hitting our shores and disrupting how we have traditionally conducted business. (Source: Reuters, OK Farm Report)
Cattle Inventory is expanding faster than the trade had expected! Cattle inventory numbers released after the close last-Friday by the USDA were much larger than the trade was expecting, in fact the largest in five-years. Looking inside the numbers we can see U.S. Cattle Inventory on January 1, 2016 reported at 91,988,000 head, which is about +3% above last year. Below are some specifics… Look for lower prices!
- Beef cows, at 30.3 million head, are up 4 percent from a year ago.
- Milk cows, at 9.32 million head, are up slightly from the previous year.
- Heifers 500 pounds and over as of January 1, 2016 totaled 19.8 million head. This is 3 percent above the 19.3 million head on January 1, 2015.
- Steers weighing 500 pounds and over totaled 16.3 million head, up 4 percent from one year ago. Bulls weighing 500 pounds and over totaled 2.14 million head, up 2 percent from the previous year.
- Calves under 500 pounds in the United States as of January 1, 2016 totaled 14.1 million head. This is 4 percent above the 13.5 million head on January 1, 2015. The 2015 calf crop in the United States was estimated at 34.3 million head, up 2 percent from last year’s calf crop. Calves born during the first half of 2015 were estimated at 24.8 million head. This is up 2 percent from the first half of 2014. The calves born during the second half of 2015 were estimated at 9.50 million head, 28 percent of the total 2015 calf crop.