DTN Ag Headlines

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Though ethanol margins continue to erode in the third week of May, one certified public accountant who works with a group of ethanol plants in Kansas said there are signs the tide may be turning soon.

Donna Funk, a certified public accountant with K-Coe Isom based in Lenexa, Kansas, said the upcoming start of the summer driving season is bringing optimism to ethanol plants.

"I'm starting the next round of client meetings this week, but generally I think folks are seeing a little improvement in margins," she said. "If the price at the pump in Kansas City is any reflection of things to come and the refiners capitalize on their profits, the ethanol plants should start to see some pretty good margins. Gas in KC is hovering around $2.80 and that is ahead of the holiday weekend or the real start of driving season."

Producers continue to pay close attention to the Renewable Fuel Standard happenings in Washington, where President Donald Trump's administration is expected to announce a series of changes to the law, Funk said. That may include attaching renewable identification numbers, or RINs, to ethanol exports, tightening rules on issuing small refinery waivers, among other proposals.

"I think the thing that everyone is watching and waiting to see the impact are the DC meetings and what that really means to as it relates to RINs and the impact on refiners' use of the domestic product in domestic gasoline versus exports, as well as all the trade talks that are currently in the works," Funk said.

Recent news from China that includes holding off on a variety of agriculture tariffs including sorghum, an ethanol feedstock, should be positive for the industry. "There is so much uncertainty right now it is hard to know how margins will react," Funk said.

According to the latest numbers on DTN's hypothetical 50-million-gallon ethanol plant in South Dakota, profitability remains weak ahead of the Memorial Day weekend.

DTN Ethanol Analyst Rick Kment said recent pressure in ethanol futures prices has added even more margin pressure to the market.

Ethanol prices have hovered within a 10-cent trading range from $1.40 to $1.50 per gallon, with current futures levels holding near $1.45 per gallon, as of this update.

Neeley Biofuels is currently reporting a net loss of 18.3 cents per gallon of ethanol produced. When not accounting for debt service or depreciation at the plant, the net profitability is currently at a 13-cent per-gallon gain.

Since March, the net loss with debt service included has widened by 6 cents per gallon of ethanol produced, the same for the margin without debt.

Kment said corn markets have eroded slightly during the past week, but support seen during late April and early May has caused some higher overall production costs.

Corn prices have recently moved below $4 per bushel, but are still in the upper range of the current short-term trading range between $3.85 and $4.05 per bushel in the spot month futures contracts.

DTN established Neeley Biofuels in DTN's ProphetX Ethanol Edition as a way of tracking ethanol industry profitability. Using the real-time, commodity price data that flows into the "corn crush" in ProphetX and some industry-average figures for interest costs, labor and overhead, DTN is able to track current profits. It also tracks how much Neeley Biofuels would make or lose under an infinite number of "what-if" scenarios.

DTN uses industry-average figures from Iowa State University economist David Swenson. Included in the figures are annual labor and management costs, transportation costs, debt-servicing costs, depreciation and maintenance costs. Even though Neeley Biofuels is paying debt-service and depreciation costs on its plant, many real plants are not in debt.

Also, it should be noted the calculations include all other costs such as chemicals and yeasts, electricity, denaturant and water. While DTN uses natural gas spot prices for these updates, many ethanol plants lock in prices on the futures market, so they are not as vulnerable to natural gas market volatility.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN


By Becky Mills
Progressive Farmer Contributing Editor

Researchers and cattle producers have known for years that fescue pastures containing a common toxic endophyte can hurt cow conception rates. That same endophyte can affect semen quality in bulls, as well.

Scott L. Pratt, Clemson University animal scientist, said researchers there first started exploring the connection in 2011. Rather than letting young bulls graze on fescue containing the endophyte, they fed them a concentrate grain ration containing fescue seed with the endophyte. The control group also got a concentrate ration with fescue seed, but in that case, the seed didn't have the toxic endophyte.

That first year there was not a lot of difference, Pratt reported. He said both groups gained weight, there was no rough hair coat and no difference in semen quality.

In 2012, Pratt and his research team started a series of grazing trials. Each year, 25 to 30 bulls, 12 to 13 months old, were divided into two groups after passing a Breeding Soundness Exam.

One group grazed Kentucky 31 fescue containing the toxic endophyte. The other group grazed MaxQ fescue and Texoma fescue. Both of those varieties have a novel endophyte that does not produce toxin.

The bulls were grazed from February through either June or August, depending on the year and forage availability.

Pratt said they collected semen from the bulls every 28 days, extended it to a commercial dose, froze it, then thawed it and assessed the motility of the sperm.

After 50 days of grazing, Pratt reported, the number of motile sperm from the control group was right where they wanted it. But the motile sperm number from the bulls that had grazed Kentucky 31 fescue was about four times lower and didn't freeze as well. He also noted the bulls grazing the Kentucky 31 fescue lost weight.

Since semen from the bulls cannot be frozen effectively, the researcher conducted fertility studies by extending fresh semen from the bulls and using timed artificial insemination (AI) to breed cows. Pratt reported lower conception rates in those cows bred with semen from bulls grazing Kentucky 31 fescue.

He noted their results were similar to those from a study done by University of Tennessee researcher Neal Schrick, although Schrick used in-vitro fertilization rather than AI.

"The trend indicates there are some fertility issues with semen from bulls grazing endophyte-infected fescue," Pratt said. He recommended, if given the option, producers not breed the herd while grazing it on spring fescue, as this is when endophyte levels tend to be at their highest.

With bulls, the endophyte may impact the ability to freeze semen and motility. On the cow side of the equation, there may be reduced pregnancy rates.

Pratt reported: "Data generated here at Clemson and from Arkansas shows approximately a 20 to 30% reduction in pregnancy rates if the cows are on toxic fescue."

The research team followed those first results with an additional report in spring 2017, "Effects of Grazing Tall Fescue Containing Ergot Alkaloids on Bull Sperm Cryopreservation." The paper noted among other things the Kentucky 31 group of bulls had lesser sperm counts, lesser sperm motility and lesser sperm motility concentration.


By DTN Staff

OMAHA (DTN) -- Corn planting progress reached 81% complete nationwide as of Sunday, May 20, equal to the five-year average, according to the USDA National Ag Statistics Service weekly Crop Progress report released Monday.

Nationwide, corn planting progress jumped 19 percentage points last week, up from 62% the previous week. States showing the largest gaps behind their five-year averages were Pennsylvania, which was 29 points behind average; South Dakota, 15 points behind average; Michigan, 13 points behind average; Wisconsin, 10 points behind average; and Minnesota, 7 points behind average.

Corn emergence, at 50% nationwide as of Sunday, was slightly behind last year's 51% but ahead of the average pace of 47%.

Soybean planting remained ahead of average nationwide, except in the Northern states. Fifty-six percent of the crop was planted as of Sunday, according to NASS, 12 percentage points ahead of the average of 44%. Twenty-six percent of soybeans were emerged, ahead of 17% last year and also ahead of the average of 15%.

Winter wheat was 61% headed, behind last year's 71% and also behind the average of 64%. Winter wheat condition held steady last week at 36% good to excellent, still the crop's lowest rating since 2014-15. DTN's winter wheat condition rating of 58 points was also the lowest in four years.

Spring wheat was 79% planted as of Sunday, near the average pace of 80%. Thirty-seven percent of the crop was emerged, behind the five-year average of 52%.

Spring wheat planting was the furthest behind average in Montana, which, at 66% complete as of Sunday, was 20 points behind the five-year average of 86%. "I was around flooded areas of western Montana, but from the little I saw, I doubt the state will have trouble planting," said DTN Analyst Todd Hultman. "Weather was in 60s and 70s and fields were green."

Cotton was 52% planted as of Sunday, compared to 36% last week, 49% last year and 45% average. Rice was 93% planted, compared to 83% last week, 90% last year and 89% on average. Seventy-four percent of the crop was emerged, compared to 61% last week, 77% last year and a 74% average.

Sorghum was 39% planted as of Sunday, compared to 32% last week, 36% last year and a 38% average.

Barley was 81% planted, behind the average pace 84%. Forty-five percent of the crop was emerged as of Sunday, compared to an average of 58%. Oats were 86% planted, compared to 72% last week, 94% last year and a 91% average. Sixty-seven percent of oats were emerged, compared to 48% last week, 81% last year and a 77% average.

The following are highlights from weekly crop progress reports issued by National Ag Statistics Service offices in individual states. To view the full reports from each state, visit http://www.nass.usda.gov/…


Storm systems at week's end brought locally heavy rain to mostly northern and eastern counties, while conditions in western and southern counties continued to deteriorate due to drought. Statewide, topsoil moisture was rated 12% very short, 25% short, 60% adequate and 3% surplus. Subsoil moisture was rated 13% very short, 24% short and 63% adequate. Barley was 91% emerged, ahead of the average of 79%. Corn was 67% planted, behind the average of 71%, while 31% of corn was emerged, equal to the five-year average. Sorghum was 8% planted compared to the average of 13%. Spring wheat was 89% planted and 69% emerged. Winter wheat was 86% jointed, ahead of the average of 82%, and 34% of the crop was headed compared to the average of 32%. Winter wheat condition was rated 79% good to excellent.


There were 5.1 days suitable for fieldwork in Illinois last week. Statewide, the average temperature was 69.7 degrees, 5.7 degrees above normal. Precipitation averaged 1.06 inches, 0.13 inch above normal. Topsoil moisture supply was rated at 1% very short, 17% short, 75% adequate and 7% surplus. Subsoil moisture supply was rated at 1% very short, 17% short, 77% adequate and 5% surplus. Corn planted was at 96%, compared to 87% last year and the five-year average of 87%. Corn emerged was at 84%. Corn condition was rated at 88% good to excellent. Soybeans planted was at 81%, compared to the five-year average of 42%. Soybeans emerged was at 57%. Sorghum planted was at 30%. Winter wheat headed reached 74%, compared to the five-year average of 74%. Winter wheat condition was rated 66% good to excellent.


Warm temperatures and scattered showers aided crop emergence last week, while farmers continued to plant at every opportunity. Scattered rainfall in the north spurred emergence of planted fields while also slowing the progress of fieldwork. The central and southern portions of the state reported drier conditions that, while favorable for planting, hampered crop emergence and conditions in some fields. The average temperature for the week was 70.4 degrees, 7.3 degrees above normal for the state. The amounts of rainfall recorded at weather stations varied from zero to 3.42 inches over the week. The statewide average for precipitation was 0.95 inch, or 96% of normal. There were 5.0 days available for fieldwork. Planting progress continued last week, between reports of scattered rain, with both corn and soybeans planted ahead of last year and the five-year average. Winter wheat growth progressed over the week with the scattered rains, but remains slightly behind where it was last year. Hay and pasture are reported to be greening up in the areas with significant rainfall, though the first cutting of alfalfa lags behind last year. Other activities for the week include side-dressing corn where possible, completing tillage work, spreading fertilizer, installing tile, and moving grain to elevators. Corn were rated 84% in good-to-excellent condition. Winter wheat was rated 68% good to excellent.


Wet field conditions and scattered rains limited Iowa farmers to 3.9 days suitable for fieldwork last week. Topsoil moisture levels were rated 2% very short, 5% short, 78% adequate and 15% surplus. Subsoil moisture levels rated 4% very short, 10% short, 74% adequate and 12% surplus. South-central Iowa reported the lowest levels of subsoil moisture with over two-thirds short to very short. Iowa growers have planted 86% of the expected corn crop, five days behind last year. The north-central district planted nearly half of their expected corn crop this past week. Fifty-three percent of the crop has emerged, one day behind last year. Soybean growers have 58% of the expected crop planted, two days ahead of the five-year average. One-quarter of the expected soybean crop across Iowa was planted this past week. Northwest and north-central Iowa remain well behind the other districts with less than one-third of their soybean crop planted. Eighteen percent of soybeans have emerged, two days ahead of last year. Nearly all the expected oat crop has been planted, over one week behind last year and four days behind average. Eighty-six percent of the crop has emerged, five days behind last year.


There were 5.1 days suitable for fieldwork in Kansas last week. Topsoil moisture supplies were rated 21% very short, 30% short, 47% adequate and 2% surplus. Subsoil moisture supplies were rated 21% very short, 37% short, 41% adequate and 1% surplus. Winter wheat condition was rated 15% good to excellent. Winter wheat jointed was 96%. Headed was 71%, well behind 93% last year, and behind 80% for the five-year average. Corn planted was 82%, ahead of 69% last year, and near 79% average. Emerged was 56%, ahead of 46% last year and 49% average. Soybeans planted was 50%, well ahead of 25% last year and 24% average. Emerged was 21%, ahead of 12% last year and 8% average. Sorghum planted was 8%, near 4% last year and 6% average. Cotton planted was 30%, well ahead of 7% last year, and ahead of 12% average.


There were 3.3 days suitable for fieldwork in Michigan last week. Warm and mostly dry weather in northern and some areas of central Michigan allowed producers to make good fieldwork progress. Many fields in southern Michigan were reportedly very wet from frequent rains, which slowed planting progress. Despite challenges due to wet conditions in some areas, corn and soybean planting progress advanced 16 and 11 percentage points, respectively. Corn planting reached the half-way point of completion. Oat and barley seeding made steady progress. Oat planting progress remained behind the previous year and five-year average, but emergence surpassed the previous year average. Winter wheat development was boosted by the warm temperatures, but the crop was showing signs of moisture stress in some areas of southern Michigan. Hay was showing growth after a slow start, but producers have yet to begin first cutting. Other activities during the week included applying herbicides and fertilizers, and performing spring tillage operations. Winter wheat rated 66% good to excellent. Oats rated 80% good to excellent.


Warm, dry weather prevailed across Minnesota allowing producers 5.7 days suitable for fieldwork last week. That was the most days suitable thus far this season, allowing farmers to make good planting progress. Topsoil moisture supplies were rated 4% very short, 10% short, 76% adequate and 10% surplus. Subsoil moisture supplies were rated 1% very short, 7% short, 83% adequate and 9% surplus. Minnesota's spring wheat was 85% planted, eight days behind last year but three days ahead of the five-year average. Forty percent of the spring wheat crop had emerged, five days behind last year and six days behind average. Oats were reported as 85% planted, five days behind last year, with 54% of the oat crop emerged, eight days behind both last year and average. The first oat condition rating of the season was 73% good to excellent. Planting of the barley crop was reported as 80% complete, one week behind last year. Thirty-five percent of the barley crop had emerged, five days behind last year and one week behind average. Corn planting was 77% completed, one week behind last year and three days behind average. Twenty-four percent of the corn crop had emerged, five days behind last year. Soybeans were 48% planted, five days behind last year and three days behind average.


Warmer temperatures and above-average precipitation for the week improved crop conditions. Temperatures last week averaged 71.5 degrees, 6.3 degrees above normal. Precipitation averaged 1.66 inches statewide, 0.56 inch above normal. There were 4.3 days suitable for fieldwork for the week. Topsoil moisture supply was rated 6% very short, 16% short, 67% adequate and 11% surplus. Subsoil moisture supply was rated 7% very short, 23% short, 65% adequate and 5% surplus. Corn planting progressed 5 percentage points to 96% complete, which is 9 percentage points ahead of the five-year average. Corn emerged progressed to 84%, 20 percentage points ahead of the previous week. Corn condition was rated at 71% good to excellent. Soybean planting was 61% complete with 33% emerged. Cotton planting progressed to 94%, 21 percentage points ahead of the five-year average. Rice planting progressed to 95% this week. Rice emerged progressed to 75%, 27 percentage points ahead of the previous week, but still 1 percentage point behind the five-year average. Sorghum planted is at 53%, 18 percentage points ahead of the five-year average. Winter wheat headed is at 84%, 13 percentage points behind last year. Winter wheat condition was rated 48% good to excellent.


There were 4.3 days suitable for fieldwork last week. Topsoil moisture supplies were rated 2% very short, 15% short, 72% adequate and 11% surplus. Subsoil moisture supplies were rated 4% very short, 22% short, 72% adequate and 2% surplus. Corn planted was 88%, near 86% last year, and equal to the five-year average. Emerged was 53%, near 49% last year, and ahead of 48 average. Soybeans planted was 68%, ahead of 50% last year and 51% average. Emerged was 25%, ahead of 12 both last year and average. Winter wheat condition was rated 62% good to excellent. Winter wheat headed was 4%, well behind 57% last year and 29% average. Sorghum planted was 31%, ahead of 17% last year, and near 27% average. Oats condition was rated 76% good to excellent. Oats planted was 95%, near 99% last year and 98% average. Emerged was 86%, behind 96% last year and 91% average. Headed was 1%, near 5% last year and 3% average.

North Dakota

There were 5.1 days suitable for fieldwork last week. Topsoil moisture supplies were rated 10% very short, 24% short, 63% adequate and 3% surplus. Subsoil moisture supplies were rated 14% very short, 34% short, 50% adequate and 2% surplus. Soybeans planted was 33%, well behind 53% last year, and behind 40% for the five-year average. Emerged was 1%, behind 9% last year and 7% average. Spring wheat planted was 78%, behind 86% last year, but ahead of 71% average. Emerged was 30%, well behind 52% last year, and behind 41% average. Durum wheat planted was 62%, behind 69% last year, but ahead of 57% average. Emerged was 17%, behind 33% last year and 27% average. Winter wheat condition rated 40% good to excellent. Winter wheat jointed was 28%, well behind 57% last year. Corn planted was 62%, behind 79% last year and 67% average. Emerged was 8%, well behind 34% last year, and behind 22% average. Canola planted was 52%, behind 68% last year, and near 55% average. Emerged was 7%, well behind 27% last year, and behind 22% average. Oats condition rated 55% good to excellent. Oats planted was 65%, well behind 85% last year, and behind 71% average. Emerged was 25%, well behind 51% last year, and behind 38% average. Jointed was 1%, behind 8% last year. Barley condition rated 62% good to excellent. Barley planted was 80%, behind 87% last year, but ahead of 68% average. Emerged was 32%, well behind 53% last year, and behind 39% average.


Planting proceeded across the state despite continued wet weather last week. Statewide, there were 3.5 days suitable for fieldwork. Topsoil moisture supplies were rated 9% short, 69% adequate and 22% surplus. Subsoil moisture was rated 5% short, 71% adequate and 24% surplus. Corn planting was 71% complete as of Sunday, ahead of the five-year average of 66%. Corn was 45% emerged, also ahead of the average pace of 34%. Soybeans were 50% planted, ahead of the average pace of 37%, and 22% of the crop was emerged, also ahead of the average of 11%. Winter wheat was 28% headed, behind the average of 36%. Winter wheat condition was rated 76% good to excellent. Oats were 89% planted and 73% emerged.


The statewide average rainfall total for the week was 1.41 inches, with the southwest district recording the highest precipitation at 2.06 inches. Statewide, temperatures averaged in the low 70s. Topsoil and subsoil moisture conditions were rated mostly very short to adequate. There were 5.1 days suitable for fieldwork. Canola coloring reached 28%, down 49 points from the previous year. Oats headed reached 45%, down 4 points from normal. Corn planted reached 80%, up 4 points from the previous year, and emerged reached 60%, down 8 points from the previous year. Sorghum planted reached 30%, down 7 points from the previous year. Soybeans planted reached 36%, up 11 points from the previous year, and emerged reached 7%, down 1 point from the previous year. Cotton planted reached 40%, up 14 points from normal.

South Dakota

There were 5.1 days suitable for fieldwork in South Dakota last week. Topsoil moisture supplies were rated 1% very short, 11% short, 81% adequate and 7% surplus. Subsoil moisture supplies were rated 2% very short, 20% short, 74% adequate and 4% surplus. Corn planted was 66%, behind 81% for the five-year average, and emerged was 15%, behind 35% average. Soybeans planted was 24%, behind 44% average. Emerged was 2%, behind 8% average. Winter wheat condition was rated 46% good to excellent. Spring wheat planted was 94%, equal to average, and emerged was 63%, behind 73% average. Oats condition was rated 46% good to excellent. Oats planted was 92%, near 94% average, and emerged was 70%, behind 79% average. Sorghum planted was 28%, ahead of 16% average.


Weather conditions were mostly dry and warm through the early part of the week; however, thunderstorms arrived late week, bringing much-needed precipitation. Most of the state received between 0.2 inch and 1.5 inches of rain. Areas of south-central Texas, the Edwards Plateau, the Cross Timbers, the Upper Coast and Low Plains averaged between 2 and 3 inches of rain, with isolated areas getting more than 5 inches. However, the Trans-Pecos received little to no precipitation during the week. There were 6.2 days suitable for fieldwork. Statewide, topsoil moisture was rated 32% very short, 31% short, 36% adequate and 1% surplus. Subsoil moisture was rated 26% very short, 40% short, 33% adequate and 1% surplus. Corn was 88% planted, 81% emerged and 24% silked. Cotton was 43% planted and 8% squaring. Rice was 99% planted and 87% emerged. Sorghum was 90% planted and 20% headed. Soybeans were 75% planted and 63% emerged. Winter wheat was 12% harvested as of Sunday, ahead of the average of 7%. Oats were 30% harvested, also ahead of the average of 16%.


There were 5.2 days suitable for fieldwork statewide last week. Reporters in northern, and especially northwestern Wisconsin, noted a full seven days of sunshine, allowing excellent progress with planting and tillage. Meanwhile, producers in southern Wisconsin were able to get lots of seeds in the ground before another rainy weekend slowed fieldwork. Statewide, topsoil moisture supplies were rated 6% short, 78% adequate and 16% surplus. Subsoil moisture supplies were rated 5% short, 83% adequate and 12% surplus. Corn planting was 56% complete, four days behind the average. Corn emerged was at 21%, one day behind the average. Thirty-three percent of the state's expected soybean acres have been planted, one day behind the average. Seven percent of the state's soybeans have emerged, even with the average. Winter wheat was 81% in good-to-excellent condition statewide, up 4 percentage points from last week.


Editor's Note: Consider entering our DTN/The Progressive Farmer #MyPlanting18 Photo Contest from now until May 25 for a chance to win some great prizes.

Entering is easy, but please limit yourself to one entry per month. For all the details, visit: https://www.dtn.com/…

National Crop Progress Summary
This Last Last 5-Year
Week Week Year Avg.
Corn Planted 81 62 82 81
Corn Emerged 50 28 51 47
Soybeans Planted 56 35 50 44
Soybeans Emerged 26 10 17 15
Cotton Planted 52 36 49 45
Sorghum Planted 39 32 36 38
Spring Wheat Planted 79 58 88 80
Spring Wheat Emerged 37 14 59 52
Winter Wheat Headed 61 45 71 64
Barley Planted 81 62 87 84
Barley Emerged 45 21 57 58
Oats Planted 86 72 94 91
Oats Emerged 67 48 81 77
Oats Headed 25 NA 22 25
Rice Planted 93 83 90 89
Rice Emerged 74 61 77 74


National Crop Condition Summary
(VP=Very Poor; P=Poor; F=Fair; G=Good; E=Excellent)
This Week Last Week Last Year
Winter Wheat 15 20 29 29 7 14 22 28 29 7 4 11 33 44 8
Rice - 3 24 62 11 NA NA NA NA NA 5 6 24 49 16
Oats 5 7 30 52 6 NA NA NA NA NA 1 5 31 55 8

Please send comments to talk@dtn.com


By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- The Trump administration on Monday pumped up the prospects of increased agricultural exports to China while expecting to see announcements on Chinese tariffs against U.S. agricultural products lifted following a joint statement issued by the two countries this past weekend.

Agriculture was highlighted in the joint statement issued by the U.S. and China on Saturday following trade talks between the two countries last week. "Both sides agreed on meaningful increases in United States agriculture and energy exports," the two countries said in the joint statement. "The United States will send a team to China to work out the details."

President Donald Trump tweeted out Monday morning, "Under our potential deal with China, they will purchase from our Great American Farmers practically as much as our Farmers can produce."

Ted McKinney, USDA undersecretary of trade and foreign agriculture, spoke Monday to reporters from China, repeating multiple times he was "very cautiously optimistic" on the talks with China. "I don't want people to get overly excited. I think we should be very cautiously optimistic," McKinney said when told of Trump's tweet. "I do like the tweet, though."

Markets on Monday responded quickly to the enthusiasm about increased trade and the freeze on new tariffs. Most soybean contracts, including the November contract, were up 14.6 cents to 16 cents a bushel, in early trading Monday. The Dow Jones Industrial Average also started out strong Monday, jumping up 340 points in early trading as well.

McKinney said he understood that Secretary of Commerce Wilbur Ross would lead a delegation back to Beijing next week "and, among other things, ag will be one of the focal points."

In April, China announced proposed 25% tariffs on as much as $16.4 billion in U.S. agricultural commodities, the most notable being soybeans. The U.S. exported $14 billion in soybeans to China last year. Even though the tariff was proposed and not implemented, it led to a sharp decline in soybean sales to China.

China also has imposed a 25% tariff on 128 other products, including pork. Pork tariffs in China jumped in early April from 12%-20% to as high as 45%, depending on the specific product.

While Chinese officials indicated there would be a freeze on new tariffs, as of Monday, Chinese officials have not announced whether the country was rescinding tariffs already imposed.

"Well, the specifics are not clear yet," McKinney said. "I think that's what next week is about, but the reason I'm very cautiously optimistic is that I think is set for more concrete solutions next week. I'm not aware that any specific commodity has been discussed ... I don't know that specific commodities or issues have been discussed, but I think the door is wide open for those to be picked up next week, and for that I am grateful and excited."

McKinney noted a key focus of last week's talks in Washington, D.C., was to substantially reduce the U.S. trade deficit with China. "We are told ag is very much in that mix," he said.

The overall U.S. trade deficit with China continues to grow. It was $375 billion in 2017, which was 7.5% higher than 2016. For the first quarter of this year, the deficit was 13.4% higher than it was in the first quarter of 2018, according to the U.S. Census Bureau.

The U.S. has an agricultural trade surplus with China, shipping $19.6 billion in agricultural commodities to China in 2017 while receiving $11.4 billion in return, according to USDA.

McKinney noted he was in southern China already for an agricultural trade mission. He toured a major food show in China and met with chefs and restaurant owners as well. McKinney said the object of the mission was to build trust, and he believes that was successful.

"There is still very keen interest in U.S. agricultural and fiber products," McKinney said. "I shouldn't be surprised, but given the issues we are facing on trade, it was so wonderful to see the incredible receptivity to U.S. products," he said, citing the emphasis on quality, safety and volume of U.S. agricultural commodities. "And it continues to bear out in this case as well."

China already announced last week it was dropping the 178.6% anti-dumping tariff slapped on U.S. sorghum products. Chinese officials cited demand and need in the aquaculture and pork industries for dropping its tariffs and trade investigation.

McKinney said there were crops that Chinese buyers were enthused about, including sorghum, and that were having problems with exports in recent months.

"What I detected from several buyers is there is quite a lot of excitement about sorghum," McKinney said. "If that's the shape of things to come, I think it bodes well. But that's the only commodity where we found enthusiasm and excitement, but that's just because I didn't get a chance to visit with every single one in depth. At least I hope that bodes well."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN


By Mary Kennedy
DTN Cash Grains Analyst

Alvaro Cordero, manager of global trade for the U.S. Grains Council (USGC), told attendees at the 22nd Annual Distillers Symposium on May 16 that one of the biggest challenges facing distillers dried grain with solubles (DDGS) has been China. Go back to January 2017 when China's Ministry of Commerce (in a final ruling following a year-long trade probe) slapped harsh anti-dumping duties and tariffs on U.S. DDGS imports. Anti-dumping duties were set at a range from 42.2% to 53.7%, while anti-subsidy tariffs will be between 11.2% and 12%.

Preliminary penalties assessed in late September 2016 of an anti-dumping penalty of 33.8% and an anti-subsidy tariff of 10% to 10.7% had already shut off most DDGS exports to China. However, the final ruling of an increase to those penalties pretty much signaled an end to DDGS heading to China. Those penalties, applied to both U.S. distillers dried grains with or without solubles, caused U.S. exports to China to fall from 5.4 million metric tons (mmt) in 2015 to 3.3 mmt in 2016.

On November 9, 2017, China’s Ministry of Foreign Affairs announced it would allow U.S. DDGS to be imported without charging an 11% value-added tax (VAT). However, the fact that penalties imposed earlier in the year remained in force, dampened any prospect of increased exports to China. At the time the VAT was removed, DDGS exports to China totaled a mere 739,000 metric tons (mt) for 2017.

The U.S. Census Bureau said on May 3, 2018, that U.S. exports of DDGS totaled 905,558 mt in March, down 12% from a year ago. Mexico was the top export destination again in March, accounting for 17% of the total, followed by Vietnam, South Korea, Thailand and Indonesia. The first three months of the year, DDGS exports were down 13% in 2018 from a year ago. As you can see, China's absence is obvious.

Cordero said there is still uncertainty facing U.S. DDGS exports. "In 2018, the U.S. faces additional challenges both on tariff and non-tariff barriers," said Cordero. Another challenge he noted are restrictive government policies abroad such as fumigation, GMO and other trade barriers that affect both bulk and container exports. However, Codero noted that domestic consumption is higher and that has kept prices firm for quite some time.

USGC has been tireless in its pursuit of other buyers for U.S. DDGS and has been successful in educating other countries as to the value of U.S. DDGS in their feed rations. USGC has said that the success of their efforts is the result of identifying leading companies in the market, learning the unique concerns and barriers to greater DDGS use, extensive technical preparation, and effective communication with existing and potential customers all over the world.

One example is the increase of DDGS to South Korea. South Korea currently ranks as the second largest market for U.S. DDGS in the current marketing year (September 2017-March 2018), purchasing 639,000 mt, a 6% increase year-over-year, according to a recent report by USGC. South Korea was the third largest market for U.S. DDGS in 2016-17, setting a new record for the fifth year in a row at 979,000 mt. Following significant work by USGC to introduce and advocate for it in South Korea, DDGS is now considered an established and superior feed ingredient there, with 96% of local feed producers using it in their rations.

USGC has said it will continue working to increase U.S. DDGS exports to South Korea and other countries through additional educational programs aimed at protecting existing market share, increasing the inclusion rates in animal diets, and expanding business opportunities between U.S. suppliers and other buyers.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn


By Jerry Hagstrom
DTN Political Correspondent
Chris Clayton
DTN Ag Policy Editor

WASHINGTON (DTN) -- The cheers and jeers were all over the spectrum Friday after the House of Representatives failed to pass its version of the farm bill following a raucous debate this week.

The setback adds to the possibility of an extension that could complicate farmers' ability to switch commodity programs next fall for their base acres. Declining revenue guarantees for the Agricultural Revenue Coverage (ARC) have led to the likelihood that farmers enrolled in ARC are looking for the chance to switch at least some farms to Price Loss Coverage (PLC) for their safety net.

House Agriculture Committee Chairman Michael Conaway, R-Texas, had said the vote on the farm bill would tell farmers and ranchers if Congress stands with them or not. But other elements of the bill, and desire among some Republicans for an immigration vote, got in the way of passage.

"We experienced a setback today after a streak of victories all week," Conaway said after fending off several amendments in the Rules Committee and on the House floor. "We may be down, but we are not out. We will deliver a strong, new farm bill on time as the president of the United States has called on us to do. Our nation's farmers and ranchers and rural America deserve nothing less."

The bill went down to defeat with 198 members voting for the legislation and 213 voting against it. Conaway had sought to pass a bill with just GOP support because of SNAP changes. But the strategy failed, as 30 Republicans joined all 183 Democrats voting against it. The bill fell 17 votes short in a 198-213 vote.

The entire Democratic caucus opposes the farm bill because of tougher job-and-training requirements for people who receive food aid under the Supplemental Nutrition Assistance Program, or SNAP. Other changes would have restricted the ability of states to expand the income eligibility for people to receive SNAP aid.

Rep. Collin Peterson, D-Minn., ranking member of the House Ag Committee, told reporters after the vote that he has ideas to fix the SNAP section of the bill so that enough Democrats would support it to pass the bill. But Conaway, as the committee chairman, will need to ask for Peterson's help.

"I'm willing to go back to the table to help them fix this. If they will listen to me, I can deliver a lot of Democratic votes," Peterson told reporters in the Capitol, while Conaway canceled a scheduled media availability event Friday.

While Freedom Caucus members who want a vote on immigration claimed to have brought the bill down, Peterson noted that moderate Republicans considered the work requirements and tougher access standards in SNAP too harsh. The record shows that the Republicans who voted against it included House Appropriations Committee Chairman Rodney Frelinghuysen, R-N.J.; Rep. Peter King, R-N.Y.; and Ileana Ros-Lehtinen, R-Fla., all of whom are considered moderate Republicans.

As some farm groups expressed disappointment, Chuck Conner, president of the National Council of Farmer Cooperatives, called the bill's defeat "only a bump in the road on the way to passing the farm bill that America's farmers and ranchers so urgently need."

National Farmers Union President Roger Johnson said the farm bill needed to fail because it did not necessarily improve the safety net for farmers while eliminating conservation programs his members support. "Major changes need to be made to this bill. Farmers Union urges the House to send it back to committee to make significant improvements worthy of the men and woman who feed, fuel and clothe our nation," Johnson said.

Countering NFU was American Farm Bureau Federation President Zippy Duvall, who called the vote a blow to farmers and ranchers. "We are already starting to hear from farmers across the nation, many of whom are perplexed and outraged at this morning's vote," Duvall said. "They are facing very real financial challenges. We call on all members of Congress not to use farmers and ranchers as pawns in a political game. The risk-management tools of the farm bill are too important, particularly at a time of depressed farm prices. We urge the House to pass HR 2 as soon as possible."

Lindsey Lusher Shute, co-founder and executive director of the National Young Farmer Coalition, said Friday's vote should prove that Congress can't pass a farm bill by dividing the two parties or dividing farmers from those who use food-aid programs.

"We need a farm bill that works for, and includes, all of us. One that supports farmers and ranchers struggling through an economic downturn or growing amidst a drought, and one that can sustain farming as a viable livelihood for future generations," Lusher-Shute said. "We cannot wait another farm bill to address the structural barriers holding our generation back. The House farm bill presented today didn't heed that call. The House was right to defeat it, and let's hope it's back to the drawing board."

Others pointed to the decline in farm incomes, especially since 2013, as reason Congress needs to pass a bill. "Plain and simple: the farm bill matters," said John Heisdorffer, an Iowa farmer and president of the American Soybean Association. "U.S. soybean growers and everyone involved in agriculture depend on this vital piece of legislation. This bill provides a farm safety net, improves conservation, places value on exports and feeds our nation."

Under House rules, the House could introduce a motion to reconsider the bill within two legislative days. There was an attempt to introduce that motion Friday, but it stopped midway. It's not clear how exactly reconsideration could take place -- whether it would have to be exactly the same bill or one with some changes.

Peterson said that the bill can still get done this year, but an extension would have only two problems: farmers' inability to change from the Agricultural Risk Coverage to the Price Loss Coverage program, and no increase in acreage under the Conservation Reserve Program. The dairy program has already been fixed, he said.

Peterson also said he would prefer to finish the bill this year because it will be harder to pass next year whether the Republicans or the Democrats control the House. In the latter case, Peterson would be chairman.

Peterson noted that he decided to oppose the GOP on SNAP changes even though "this is not popular in my district." He added, however, that his position had helped attract Democratic votes to defeat the sugar amendment, which would have hurt his farmers who produce more sugar beets than any other district in the country.

The GOP nutrition title is based on stricter work requirements, but Peterson said that his biggest objection is the creation of a bureaucracy that is supposed to train people who do not have jobs. The bill would save money because some SNAP beneficiaries would drop out of the program and the money would go toward training programs that critics say would amount to only $30 per month per trainee.

The cost of training two million people adequately "would be $50 billion," Peterson said.

Peterson has been regarded as a conservative Democrat, but Friday he vigorously defended the SNAP program. "Everybody gets down on their luck some time or other," Peterson said, noting that most SNAP participants are on the program for less than a year.

"There is less fraud in food stamps than in crop insurance," he said.


Editor's note: Jerry Hagstrom reported from Washington, D.C., and Chris Clayton reported from Omaha, Neb.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN


By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- Corteva Agriscience, the newly formed agriculture division of DowDuPont, will license two insect traits from Monsanto, an aboveground Bt protein stack and Corn Rootworm III, which contains an RNAi rootworm trait.

The RNAi rootworm trait will prove especially valuable to Corteva, as it is the only novel mode of action against western corn rootworm, which has shown varying levels of resistance to every Bt protein on the market targeting it.

Corteva will stack both of the licensed Monsanto insect traits with its own Bt proteins and Enlist technology, which allows corn plants to tolerate 2,4-D choline, FOP herbicides and glyphosate. That means by the early 2020s, farmers in the U.S. and Canada should have access to the RNAi rootworm trait from two major seed companies, Corteva and Bayer-Monsanto.

This is good news for corngrowers, said Texas A&M Extension entomologist Pat Porter.

"This will help delay resistance to the traditional Cry toxins that are still working, and the Cry toxins that are still working will help delay resistance to the RNAi," he told DTN.


Bt corn works by expressing Bt proteins that, when ingested by the rootworm, target receptors in its gut and kill it.

Monsanto's RNAi trait works differently. When ingested by a corn rootworm, it switches off a gene in the rootworm's DNA, which halts the production of a key protein, killing the insect.

"The nice thing about it is that, unlike Bt proteins, it's able to control even larger [rootworm] larvae as well small ones," said Tom Clark, Monsanto's global corn insect platform lead. "It's a very different mode of action than any Bt technology out there today."

However, like Bt, the RNAi trait could face insect resistance in the field someday. In fact, Monsanto researchers have already generated rootworm resistance to the trait, in order to study it.

See that research here: http://journals.plos.org/…

"Bugs always seem to win, so that's a constant challenge for us as an industry," said Tony Klemm, global corn portfolio leader for Corteva. He said Corteva will use 5% refuge-in-a-bag in its future use of the RNAi trait, as well as stacking it with multiple Bt proteins, to slow the development of resistance.


Monsanto's Corn Rootworm III event expresses both the RNAi trait and Cry3Bb1, the oldest rootworm Bt protein on the market. The other event Monsanto licensed to Corteva is a molecular stack of aboveground Bt proteins, Cry1A.105 + Cry2Ab2, already in use in Bt corn and Bt cotton varieties.

With these traits in hand, pending regulatory approvals, both Corteva and Monsanto will release SmartStax PRO corn hybrids in the early 2020s that express all of the following traits.

-- The RNAi rootworm trait, DvSnf7

-- Cry3Bb1, a rootworm Bt protein

-- Cry34/35Ab1, a rootworm Bt protein

-- Cry1A.105 x Cry2Ab2, an aboveground molecular Bt protein stack, targeting lepidopteran pests

--Cry1F, an aboveground Bt protein, targeting lepidopteran pests

Corteva will add the Enlist trait to these and market that as a separate product, unnamed for now.

That may look like a lot of insect protection -- and it is. However, scientists have documented insect resistance in either corn or cotton to all the Bt proteins listed.

See DTN reporting on western corn rootworm resistance to the Bt rootworm proteins here: https://www.dtnpf.com/…

See DTN reporting on western bean cutworm resistance to Cry1F, the Herculex trait, here: https://www.dtnpf.com/…

And finally, see DTN reporting on problems with Cry1A.105 x Cry2Ab2 here: https://www.dtnpf.com/…

That means growers will need to be careful stewards of the current Bt protein offerings now and after the RNAi-stacked hybrids come to market, Clark said.

"One thing we do at Monsanto is recommend using best management practices, where we encourage growers to use crop rotation, rotating out of Bt traits, and not utilizing the same Bt traits over and over," he said. "We're going to continue to keep that message going forward. But if best management practices are not adhered to, of course there will be the risk for more [insect resistance]."

See EPA's registration docket on Monsanto's RNAi trait technology here: https://www.regulations.gov/…

See Monsanto and Corteva's joint press release on this license agreement here: https://monsanto.com/…

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow her on Twitter @Emily_Unglesbee


By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- In the race to plant the 2018 crop, the month of May has seen a lot of winners.

Gerald Gauck of east-central Indiana crossed the finish line on May 12. To his west, John Werries parked the planters on May 2, and is admiring the view in central Illinois.

"The corn all came up very evenly and looks beautiful," he told DTN. "The planters farmers have now do an amazing job of spacing. The stands truly look like a picket fence."

Their experience echoes USDA NASS' Monday Crop Progress report, which put Indiana and Illinois corn planting 21% and 20% ahead of normal, respectively.

But Mother Nature has trapped farmers from more northern Midwest regions in a cool, wet holding pattern.

"We are probably three weeks behind planting from when we wanted to get planted," Jay Magnussen reported from the damp fields of northwest Iowa. "Time and summer weather will tell if this is an issue for us this year."

These farmers are among a group of producers whom DTN periodically surveys throughout the season for its Fieldwork Roundup stories. Known as DTN Agronomy Advisers, these farmers and ranchers report on fieldwork, crop conditions and other issues facing agriculture.


Good weather and a second planter purchased last fall helped Josh Miller speed through corn and soybean planting well ahead of schedule in southern Illinois.

Where he farms in southwest Indiana, Scott Wallis was wrapping up planting, as well. "The area is probably 75% to 80% done in corn 50% to 60% done with beans," he told DTN.

Planting isn't the only game in town, of course. A cool, wet April pushed many fertilizer and herbicide applications deeper into May, leading to a crush of work for local co-ops, retailers and commercial applicators. The backlog is especially acute in Minnesota, where USDA estimated farmers planted nearly a third of the corn crop last week alone.

"Corn is 25% done [and] could be more if fertilizer would get here," said Justin Honebrink, who farms in central Minnesota. "The co-op is busy, so I am assuming everyone else in the area is also."


The frenzy of planting and fieldwork in surrounding states makes the stalled progress in parts of the northern Midwest even more frustrating for farmers there.

In north-central Iowa, snow kept farmers out of the field in April, and May hasn't been much kinder, with spotty deluges keeping fields too damp to work, said Jim Cronk. "I suspect, as a whole, only 20% done with corn, no soybeans planted, and not much for pre-emerge put on either," he said of the region's progress.

Farmers in his area are preparing to switch to earlier-maturing hybrids, Cronk said. "I think there is going to be a shortage, though, in my area of 100-day-and-less corn -- some people will be forced to plant late maturities," he said. The delayed season will push many farmers to plant around wet holes in the field, he added. "We'll have a lot of patchwork fields to harvest this fall, I believe."

In southeastern Michigan, Raymond Simpkins has received 6.2 inches of rain since May 4 and is bracing to switch out corn for soybeans soon. "Little to no corn is planted in the lower two tiers of counties in Michigan," he said. "I have not turned a wheel as of May 16th. June 1st we will be switching to soybeans regardless."

DTN Senior Ag Meteorologist Bryce Anderson had some good news for these stalled farmers.

"The weather pattern over the next couple weeks is looking favorable for most crop areas, even the Northern Plains and northern Midwest where planting progress has been the slowest," he said. "A big feature is that south-central Canada upper-level low pressure is moving east and northeast, and away from influencing conditions over the north-central U.S. This change in the upper-air pattern will allow for a warmer trend to form, with heavy rain systems also less likely to occur."


In northern Iowa, dry weather has been so scarce that some growers have abandoned their weed control plan and prioritized planting, Cronk noted. "A lot of guys planted when it was dry before fertilizer or pre-emerge herbicide was put on," he said.

Weed control is a top concern for Magnussen in northwest Iowa as well. "Marestail continues to get worse and worse every year in our no-till fields," he said. "Hopefully, our 2,4-D and early season dicamba applications do a good job of getting things cleaned up."

Even in parts of the Midwest where growers had time to spray their burndown and pre-emergence herbicides, weeds are a top concern this year, Indiana's Wallis noted. "Waterhemp and dicamba moving off target will be in my thoughts all season," he said.

In Illinois, Werries has staved off problem weeds with a yearly commitment to residuals, a weed program with three modes of action and long-term use of cover crops.

Cover crops are on the mind of central Ohio farmer Keith Peters this spring, too, after torrential rainstorms in his region.

"This is the worst erosion I've ever seen, due to the extreme storms," he said. "These storm events are pushing me even more toward cover crops to hold soil against erosion."

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow her on Twitter @Emily_Unglesbee


By Jerry Hagstrom
DTN Political Correspondent

WASHINGTON (DTN) -- Crop insurance and overall farm subsidies will face a challenge from one amendment on the House floor after proposed amendments to the bill were thinned out Wednesday evening.

The amendment affecting crop insurance that was made in order was a broad one introduced by Rep. Tom McClintock, R-Calif., that would phase out agricultural subsidies. Yet another amendment will seek to overhaul the sugar program.

The Crop Insurance and Reinsurance Bureau late Wednesday sent out a letter signed by 418 organizations asking Congress to do no harm to crop insurance. The CIRB petition "asks Members of Congress to oppose harmful amendments to crop insurance, including those that would reduce participation in crop insurance, make insurance more expensive for farmers during a time of economic downturn in agriculture, or harm private-sector delivery."

The House is expected to resume debate on the farm bill and its amendments at about noon Thursday and to vote on final passage of the bill on Friday.

On Wednesday evening, the House Rules Committee agreed to a list of amendments that will be considered in addition to the 20 relatively noncontroversial amendments that were approved Tuesday.

On Wednesday, the House began general debate on the bill and considered and passed several relatively noncontroversial amendments by voice vote.

The House Republican leadership and House Agriculture Committee Chairman Michael Conaway, R-Texas, still appear to be trying to round up enough Republican votes to pass the bill. No Democrat is expected to vote for the bill, while a few Republican moderates are expected to oppose it due to changes to the Supplemental Nutrition Assistance Program (SNAP). Hard-line conservatives say the SNAP changes are not strict enough and the bill is too generous to farmers, particularly big farmers.

Conaway enthusiastically introduced the bill on the floor while ranking member Collin Peterson, D-Minn., rose in opposition, saying the bill fails both farmers and consumers.

The rules and the amendments and whether they have been made in order may be found on the House Rules Committee website.

The most controversial amendment to be considered is likely to be the one sponsored by Reps. Virginia Foxx, R-N.C., and Danny Davis, D-Ill., to make changes to the sugar program. Foxx told reporters she believes she has the support to pass the amendment, Politico reported.

The Alliance for Fair Sugar Policy, backed by candy companies and other industrial-scale users of sugar, said, "We are encouraged by the groundswell of bipartisan support in Congress and among a broad coalition of small businesses and organizations of all stripes for modernizing the outdated sugar program. This level of support for sugar reform is unprecedented. Now it's time for the House to say yes to fairness, yes to competitiveness, and yes to protecting and creating American jobs."

But the battle with the sugar growers continued.

Phillip Hayes, a spokesman for the American Sugar Alliance, said in an email, "It is unfortunate that an elected official of the United States of America would ever feel enthusiasm about the prospect of bankrupting U.S. farmers and sending U.S. workers to the unemployment line. Of course, the authors of the five failed sugar amendments during the last farm bill expressed their 'enthusiasm' on the eve of votes, too, and their colleagues defeated those amendments in bipartisan manner. We are hopeful that Rep. Foxx's scheme to outsource U.S. sugar jobs to subsidized foreign industries will be likewise rejected. The choice for lawmakers is easy: If you support America's farmers, you will vote no on Foxx's anti-farmer amendment."

The Rules Committee did not agree to allow consideration of some of the more controversial amendments, such as forbidding the use of SNAP benefits to buy sweetened beverages or removing the classification of hemp as marijuana.

An amendment to restrict commodity checkoff programs offered by Reps. Dave Brat, R-Va., and Earl Blumenauer, D-Ore., was made in order, and a large coalition of farm groups issued a letter opposing it.

An amendment by Rep. Mike Rogers, R-Ga., would keep the Conservation Reserve Program cap at 24 million acres. The bill coming out of committee raises the cap to 29 million acres.

An amendment co-signed by several Republicans would again repeal the 2015 waters of the U.S. rule by EPA and the Army Corps of Engineers. The rule is being repealed by EPA, but facing litigation from environmental groups and states that defend the 2015 rule.

Another amendment that will be up for a vote would prohibit federal interference with interstate traffic of unpasteurized milk and milk products between states.

DTN Ag Policy Editor Chris Clayton contributed to this report.

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow Jerry Hagstrom on Twitter @hagstromreport


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