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What Farmers Are Reading This Week, January 10-17

The USDA reports garnered some of the highest interest from farmers.

A week ago the USDA released a production report for U.S. corn and soybean production. The results caused markets to adjust and gained the attention of many farmers.

Last Friday also received a Phase One update from President Trump. The international interest carried into this week with interest around Brazil's corn and the country's relationship with Iran.

If you missed anything in last week's news, the Successful Farming staff has you covered, too. 

Read more: What Farmers Are Reading This Week, January 3-10

The USDA logo

1. USDA raises U.S. 2019 corn, soybean production

DES MOINES, Iowa —- The U.S. farmers grew a bigger 2019 corn crop than the trade and the government thought.

As a result, the CME Group’s farm markets fell hard and then recovered Friday, following the 11:00 a.m. CT release of the USDA’s January Crop Production, Supply/Demand, Quarterly Grain Stocks and WASDE Reports.

Read more here.

2. When USDA stops paying rent, idled land usually goes back into crops

A Reagan-era creation, the CRP is the largest U.S. land retirement program, paying landowners an annual rent if they idle environmentally fragile cropland for 10 to 15 years. But when the contracts expire, most of the land goes back into crop production, says a USDA report that examines the budgetary and land stewardship implications of land leaving the reserve.

The USDA paid $1.8 billion in rent to owners of the 22 million acres enrolled in the reserve in fiscal 2019. The 2018 farm law raised the ceiling on enrollments to 27 million acres and a “general” sign-up, allowing owners to offer large tracts for enrollment, runs until February 28. Contracts expire on 5.4 million acres on September 30, so there could be a large turnover in the reserve as well as an overall increase in the size of the CRP.

Read more here.

3. The new math of weed management

It’s based on estimates provided by Pat Tranel, a University of Illinois (U of I) weed scientist. Ready? 

In 2017, Illinois had 22 million acres of corn and soybeans, 75% of which — 16.5 million were infested with waterhemp. So how many waterhemp plants will take root and grow the next year?

Read more here.

4. Why Jay Hill Wears a Cap with His Name on It

“Are you doing this for your kids, so they can inherit your debt?” farmer Jay Hill asks a convention hall full of his peers at the recent Farmer 2 Farmer event in Omaha, Nebraska. If that’s not your goal, it’s time to think seriously about your farm’s future, he says. 

While many in agriculture are proud of their multigenerational heritage, farmers can no longer do things the way they always have. That’s why Hill has changed how he thinks about his own operation.

Read more here.

A corn field with an ethanol plant in the background.
iStock: photosbyjim

5. Ethanol industry's founding fathers look for buyers – again

Grain industry giant Archer-Daniels-Midland Co. (ADM) is negotiating with less than five possible purchasers or potential joint venture partners for all or a share of its three dry mill ethanol plants, according to a January 9 report from Bloomberg News that quoted ADM Chief Executive Officer Juan Luciano.

ADM’s desire to exit the industry, or play a much smaller role, has to be a bitter pill for the U.S. ethanol industry to swallow, given that ADM was the first large-scale ethanol producer in the U.S and dominated the U.S. ethanol industry in the late 1970s and 1980s, when it produced an estimated 70% of the ethanol made in the U.S. before the farmer-owned, cooperative ethanol plant movement took root in the Upper Midwest and diluted ADM’s market share.

Read more here.

6. Phase One With China is 'Pretty Much All For the Farmers,' Says Trump

With China confirming that it will sign a Phase One trade agreement next week, President Trump said on Thursday that the pact, with provisions for China to buy up to $50 billion a year in farm exports, “is pretty much all for the farmers.” Meanwhile, the outlook darkened for a twin Trump trade victory — final congressional approval of the new NAFTA  — next week.

“Phase One is a phenomenal deal. It could be up to $50 billion in farm product,” said the president at the White House. “That’s numerous times more than they were buying in the past.” Before the trade war, China was the largest customer for U.S. ag exports, with purchases averaging $21 billion a year. The USDA has forecast sales of $11 billion to China this year.

Read more here.

7. First Drought, Now Iran Retaliates Against Brazil's Corn Crop

RIO GRANDE DO SUL, Brazil -- Just as Brazilian farmers experience a drought with this year’s corn crop, global events this week bring even worse news.

Iran has announced it will no longer purchase corn from Brazil. On an annual basis, Iranians buy $2.2 billion worth of corn, soybeans, and beef from Brazil. That is a retaliation after Brazilian president Bolsonaro stood on U.S. President Donald Trump’s side following a recent killing of an Iranian military leader.

Read more here

8. Top 10 red flags for farmers using 1031 exchange

DES MOINES, Iowa — More and more farmers and landowners want to know how to use the Internal Revenue Code Section 1031 (known as section 1031 exchange) to defer taxes and build wealth on the purchase of replacement property.

While not widely understood, the details of transacting a 1031 exchange can be sifted through by use of a qualified intermediary.

Read more here.

9. Early signs of spring for the farm economy

Cautious lenders rarely make wild predictions of a boom ahead. But after five years of losses and tight margins for grain producers, one of them thinks that 2020 is likely to be a better than the year that just ended.

“We are guardedly optimistic as we look forward,” Jim Knuth, senior vice president at Farm Credit Services of America said Tuesday at the Land Expo 2020 in Des Moines, Iowa.

Read more here.

10. U.S. farmers expected to get third tranche of trade aid despite Phase 1 Deal – Perdue

WASHINGTON, Jan 16 (Reuters) - U.S. Agriculture Secretary Sonny Perdue said he expected U.S. farmers to receive a third and final tranche of trade-related payments even after a Phase 1 trade deal with China was signed, Bloomberg reported on Thursday.

Washington and Beijing signed the pact on Wednesday, setting trade tensions between the two economic giants on pause, though some major outstanding issues remain.

Read more here.

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