Where is the corn going?

Yesterday, the WASDE (World Agricultural Supply & Demand Estimates) report came out and reported that U.S. feed grain ending stocks for 2014/15 are projected lower with reductions for corn. Corn use in ethanol production is projected 50 million bushels lower, yet the reduction in corn use for ethanol is offset by a 50-million-bushel increase in projected feed and residual use. Thus, expected total domestic disappearance is unchanged. Corn exports are projected 50 million bushels higher based on commitments to date and higher projected global demand. Projected ending stocks are lowered 50 million bushels. The season-average farm price for corn is projected at $3.50 to $3.90 per bushel, up 5 cents at the midpoint.

So after learning a little more about the current corn market situation, what markets do we see Nebraska corn going to?

Biobased Products.

With the help of research supported by corn checkoff dollars, corn-based materials like bioplastics and fabrics are a reality today. In fact, they are turning up in more and more places – compostable tableware, food containers, drink cups, gift cards, snack chip bags, bedding, carpet, shirts and more. All of these products are made from renewable corn and directly replace products made from petroleum.

NatureWorks LLC, based in Blair, Nebraska, is one of the companies that makes raw materials for all these products. Others include Mirel Bioplastics (owned by ADM and Metabolix) and DuPont Tate & Lyle BioProducts.

Biofuels.

Over the last three decades, ethanol made from corn has become an important fuel in Nebraska and across the country. Biofuels like corn-based ethanol directly replace petroleum-based fuels – and they’re renewable. Ethanol is better for the environment, helps keep fuel dollars here at home and it supports rural communities because that’s where most ethanol is produced.

Nebraska ethanol plants have a capacity of more than 2.0 billion gallons – making Nebraska the second-largest ethanol producing state in the country.  They use about 700 million bushels of corn annually – and directly provide and support thousands of jobs. Since ethanol is made only from the starch in a kernel of corn, these corn ethanol plants also produce more than 6 million tons of distillers grains, a nutritious livestock feed from the remaining parts of the kernel, including protein and fat.

 

Co-Products.

Corn is a very versatile grain – and when processed in ethanol plants, “wet” mills or “dry” mills, its components can be made into many kinds of feed ingredients for livestock, with the corn and livestock industry calls “co-products.”

When ethanol for fuel is made, only the starch portion of the kernel is used. Other co-products include distillers grains, feed-grade corn oil, corn gluten meal, corn gluten feed, corn oil and corn germ meal.

 

Corn Exports.

Corn exports out of Nebraska are divided into two categories: foreign and domestic. “Foreign exports” involve corn sales to countries around the world. “Domestic exports” includes any corn that is shipped from Nebraska to another state in the U.S., with California being the largest market for Nebraska corn, taking about 145 million bushels of Nebraska corn mostly for livestock and poultry last year. Foreign sales make up about 6 percent of corn usage, with Mexico (via rail) being a top market.

Livestock.

Livestock is one of the corn grower’s most important customers, consuming more than 41 percent of all U.S. corn, including the supply of distillers grains, which are produced by corn ethanol plants.

In Nebraska, livestock production is the engine that powers state’s economy. It is a more than $7.5 billion industry that is fundamental to the well-being of Nebraska – and contributes in some way to the financial health of every Nebraskan.

About 16 percent of the Nebraska’s corn crop is fed to livestock within Nebraska, with the bulk of that (more than 70 percent) going to beef cattle. See complete breakdown.

In total, though, about 40 percent of the corn grown in Nebraska is fed to livestock somewhere in the United States or around the world.

Value-based marketing for feeder cattle...what's corn's role?

"Next time you drive by a corn farm, salute the corn farmer!"

I heard this saying from Tom Brink of Top Dollar Angus recently when I attended a symposium for cattlemen that talked about the cattle markets and what the key drivers for 2015 and beyond look like.  2014 was obviously a banner year for cattlemen with unprecedented prices and all segments of the cattle market remaining strong.

 Brink gave four key drivers for 2015 & beyond:

• Corn
• Continued tight cattle numbers
• Relatively strong beef demand
• Larger competing meat supplies

Corn. We've seen an obvious downturn in corn prices the past year because of large supplies. Cattle feeders are taking advantage of this and feeding Nebraska high-quality corn. This might sound like a disadvantage for corn producers - while some are producing at the cost of production - but without corn, we would not have the markets, quality and prices for cattle and beef, said Brink.

Continued tight cattle numbers. The U.S. cowherd is growing. But slowly, as we've recently seen from the U.S. cattle inventory report. In Nebraska, total cows and calves are up 1% from last year to 6.3 million head. But that doesn't grow overnight. Producers are trying to keep back more replacement heifers, but the cattle prices being high are tempting them to sell.

Relatively strong beef demand. Thanks to the U.S. Meat Export Federation, and support from state checkoffs like the Nebraska Corn Board, international beef demand is soaring. Beef demand continues to rise, especially has more countries, like India and China, have a rising middle class. Domestically, beef demand isn't as high with strong competition from poultry and pork. But the beef checkoff continues to promote beef as a healthy protein.

Larger competing meat supplies.  While cattle numbers are growing slowly, pork output this past year increased 5.4% and poultry increased 3.9%. This drives prices for competing meats down.

What are the results of these key drivers? More opportunities for cow-calf producers. Which will hopefully equal expansion, more head of feeders to consume more high-quality Nebraska corn!

Major Markets for US Ethanol Exports

Kim Clark, director of biofuels development for the Nebraska Corn Board, submits this post from the recent U.S. Grains Council meeting in Costa Rica:

Recently I attended my first U.S. Grains Council (USGC) meeting as a member of an action team.  Honestly, this was only my second USGC meeting that I have attended since being on staff with the Nebraska Corn Board and I was a bit nervous not knowing what to expect.

The first meeting I attended was in July in Omaha, Nebraska where they announced they would be forming an Ethanol Action Team to review our current ethanol export markets and look at areas to expand ethanol exports.  I was very interested right away in serving on the action team and a couple months later was appointed to serve on the USGC Ethanol Action Team. 

Our first in-person meeting was at this USGC meeting in Costa Rica. The A-team is composed of 22 ethanol plants, corn staff and executives, and ethanol financial groups.  As a first time A-team member on any action team and the first time meeting as an Ethanol Action Team, the agenda was all the information I was armed with.

Let me back up a bit.  Prior to our first in-person meeting, there had been a lot of work done by a steering committee comprised of Renewable Fuels Association, Growth Energy, USGC, and United States Department of Agriculture Foreign Agriculture Services evaluating foreign markets to expand US ethanol exports. This steering committee has been visiting with key officials in select foreign markets and learning about mandates, hurdles for ethanol imports into those markets, and environmental issues related to low fuel quality for the past year. The USGC Ethanol Action Team was formed to review these evaluations and other potential foreign markets with the goal to expand US ethanol exports worldwide.

We closed a large gap from where the USGC ethanol A-team started discussions in Costa Rica to where we wrapped up our discussions.  In the end, we evaluated key foreign markets for ethanol imports using the following criteria:

• Current ethanol imports
• Potential ethanol imports
• Key changes needed to increase ethanol imports
• The strategy of the US Grains Council
• Potential for success
• Priority ranking

After a couple hours of evaluating each potential foreign market, the Ethanol A-team voted these countries as the major markets for US ethanol imports.  The highest priority is Canada, followed by Japan, Mexico, Philippines, European Union, Colombia, and China.  These recommendations will then be sent to the steering committee. 

There is some work that needs to be done to expand US ethanol export markets, but with a unified effort between the USGC Ethanol Action Team and steering committee, we are sure to expand US ethanol exports.

U.S. cattle inventory up slightly from last year

89.9 million head of cattle and calves in the U.S. That's up 1 percent from 2014.

As of January 1, the semiannual cattle report published by USDA’s National Agricultural Statistics Service (NASS) reported that this is the first increase in U.S. herd inventory since 2007.

Other key findings in the report were:

To obtain an accurate measurement of the current state of the U.S. cattle industry, NASS surveyed more than 38,200 operators across the nation during the first half of January. NASS interviewers collected the data by mail, telephone, internet, and through face-to-face personal interviews. NASS asked all participating producers to report their cattle inventories as of January 1, 2015.

"Take a Second for Safety" is the Message During Grain Bin Safety Week

Record Number of Grain Entrapment Deaths in 2014

With on-farm grain storage on the rise—and a record number of grain engulfment deaths across the nation last year—agricultural leaders in Nebraska are placing special emphasis on grain handling safety during Grain Bin Safety Week, February 22-28, 2015. In observance of the week, the Nebraska Corn Board and Nebraska Corn Growers Association are encouraging farmers, grain elevators and other grain handlers to slow down — and take a second for safety while working with grain.

“We feel it is increasingly important to promote grain bin safety awareness and remind all grain handlers of the hazards of working around grain,” said Larry Mussack, farmer from Decatur and president of the Nebraska Corn Growers Association. “With just one misstep or just a moment of distraction, you could find yourself or someone you know in a grain entrapment emergency.”

National statistics show that farming is one of the most dangerous occupations in America. Over the past 50 years, more than 900 cases of grain engulfment have been reported—and the fatality rate is 62 percent. With a 10-inch auger, it takes just 25 seconds for a 6-foot person to be completely buried in grain.

Now in its second year, Grain Bin Safety Week is an annual observance dedicated to increasing the awareness of grain bin safety on farms and commercial grain-handling facilities. The goal of this event is to educate the agricultural community on safe work practices and procedures to help reduce the number of preventable injuries and deaths associated with grain handling and storage.

Here are a few grain bin safety tips to keep in mind when you are working with stored grain:

• Use inspection holes or grain level markers to understand what's happening inside the bin. Use a pole from outside the bin to break up grain bridges.
• You should enter a grain bin only if absolutely necessary. If you must get into the bin, use a body harness secured to the outside of the bin. Have at least two people watching over you as you enter and work inside the bin.
• Use hand signals to communicate—and make sure everyone you're working with knows what those signals are.

These safety tips and more will be emphasized not only during Grain Bin Safety Week, but throughout the year by the Nebraska Corn organizations.  A record high yield, combined with an upward trend in on-farm grain storage capacity has experts projecting an even larger number of grain engulfment accidents in 2015.

“Now, more than ever, it is important to take the extra second and follow the safety rules when it comes to working with grain stored in bins,” said Kelly Brunkhorst, executive director of the Nebraska Corn Board. “With on-farm safety being a continued effort at Nebraska Corn, we want both farmers and emergency responders to understand how to avoid grain bin accidents—and how to help someone who does end up in trouble in a grain bin. There is no better time than the present to work together as an agricultural community and help prevent these tragic accidents from occurring.”

Seasons of Farming - Winter

What do corn farmers do in the winter? Most people probably have asked or thought this as it's obvious crops are neither planted or harvested in the cold, winter months.

But that doesn't mean farmers aren't doing anything.

First, farmers have to keep their machinery in great shape, so they work on cleaning and repairs, from combines to tractors to semis, farmers try to do as much preventative maintenance as possible to ensure their busy season goes uninterrupted. The more our equipment is repaired during the winter, the less work to be done in the growing season, where finding time for preventative maintenance and repairs is almost impossible.

Hauling grain is next on the list. In years like the last couple with record crops and large volumes to move, crops were stored on-the-farm in bins, bags, and even on large piles on the ground while some grain was hauled to the local elevator. Farmers try to market their grain to their advantage, so that may mean storing as much as they can on-farm and moving it throughout the following winter and summer, and for some growers, even longer than that. Hauling grain can be a real project during the winter months, with cold, snow, and winds wreaking havoc on moving highway semi trucks around on back roads and in and out of bin yards.

It's also a time to keep up with paperwork and business planning. Winter is the time to crunch numbers; determining the profit (or loss) from the previous year, and compiling a budget for next year’s crop to decide which crops to grow and in what amount. Part of this planning is spent on booking and purchasing inputs. Once they have an idea of what crops to grow, many farmers pre-purchase and book the inputs they need, such as seed, fertilizer, and some chemicals.

They also take time for meeting with others in the industry. For many farmers, winter is "Meeting Season". This is typically when agricultural organizations hold their annual meetings. For farmers, meetings are the place to learn new agronomic, marketing and business trends, upcoming and innovative farming techniques, latest equipment, agricultural policy updates, media training and agvocacy messaging, community involvement, and professional development. Especially for organization and farm policy meetings, it's important for farmers to stay engaged to make sure that policies being decided on are good for them and their farm.

One such upcoming meeting that is important to famers from all across the U.S. is the Commodity Classic, Feb 26-28. It is America's largest farmer-led, farmer-focused convention and trade show held this year in Phoenix, AZ.

Many corn farmers also have livestock. Breaking ice out of water tanks, adding straw bedding, feeding hay, transporting to new barns/pastures and the start of calving means 24/7 care which keeps farmers very busy in the winter.

Last but certainly not least on corn farmer's mind in the winter is marketing. For the farm to stay in business, this is the most important job of the winter and ties together the other winter tasks.  The more accurate their budget is, the better they know what price to sell at to achieve a profit. They also need to know what their cash flow needs are to ensure they can sell grain at the right times to get the bills paid. Furthermore, they have to be able to actually get the grain moved to get their contracts filled, so keeping an eye on trucking capabilities is vital as well. Finally, after all these needs are met, they try to sell grain at the right times to capture a good price.

As you can see, winter is definitely not a "slow" time of the year for farmers!

Top 5 highest paying careers in 2015...is agriculture one of them?

A recent article in USAToday.com shared that as more and more people are earning college degrees, not just "any" degree will suffice.

People are starting to see that if they're going to invest all of that hard-earned money, not to mention time and energy, into obtaining a degree, it should be into one that will likely lead to ample job opportunities and higher earnings power. The Census Bureau reports that a bachelor's degree holder typically earns $2.4 million over his or her lifetime. Some degrees, like those in education, typically result in lower lifetime earnings than this benchmark. Other degrees, however, generally allow graduates to earn more than this lifetime benchmark.

Using Census data, coupled with an employer survey analysis by the National Association of Colleges and Employers(NACE), we've made a list of college majors that will likely lead to the highest earnings for 2015 grads. The list starts with: 1. Engineering, 2. Computer Science, 3. Math and Sciences, 4. Business and.....

5. Agriculture and natural resources

The 2015 projected average starting salary is $51,220 where the average lifetime earnings is $2.6 million.

These grads can earn much more than the average grad, raking in an average starting salary of over $51,000. Again, those who work their way up to management positions generally earn the highest earnings over a lifetime — around $800,000 more than the typical college grad.

This shows the amplitude that agriculture is continuing to make in our society and work culture.  We are seeing the challenges before us to raise more food and resources for our growing population. And agribusiness will pay a pretty penny for a well-educated employee.

Looks like they are putting their money where their mouth is. Now we need more students to enroll in agricultural degrees - start sharing with your friends, children, neighbor's children, and family about ALL of the jobs in agriculture. It's not just plows and cows, folks. Engineering, food science, communications, economics, business, etc. are all facets in agricultural that could lead to some great jobs!

Ag Champions contest announced for Nebraska FFA chapters

LINCOLN, NEBRASKA – Championing for a cause is as important to Olympian Curt Tomasevicz as preparing for a bobsled race.  But this cause is agriculture. The Nebraska Corn Board (NCB) and Nebraska FFA, with the help of Curt Tomasevicz, spokesman for NCB, are partnering on a new program and contest for Nebraska FFA students called “Ag Champions”.

The purpose of the Ag Champions program is to build up FFA students to become “agvocates” (agricultural advocates) in their communities and amongst their peers. The program will provide a toolbox of resources and a contest to allow FFA chapters to submit a plan which would earn the top three winning chapters grants, based off of the budget in their agvocacy proposal. The Grand Champion winning chapter will earn the opportunity for Tomasevicz to be involved with their program.

“Through this project, we want to engage FFA members by developing a lasting impact through direct community involvement, as well as encouraging grassroots agvocacy,” said Anita Wollenburg, interim Nebraska FFA state advisor. “Through this plan, FFA chapters will determine an issue in their community, the audience they want to reach and expand on an agvocacy plan of defending agriculture along with education and communication.”

While this contest only provides three winning grants, the goal of the Ag Champions program is to create agvocates in the state’s communities and help put a realistic plan in place that can be used by the FFA chapters and students in any situation.

“As issues affecting agriculture appear too often, we are encouraging local FFA chapters to have a plan in place to defend their industry, while also putting agriculture on the offense,” said Kelly Brunkhorst, NCB executive director. “Education is key to important issues and could dispel many issues that arise when the foundation and basic understanding of an issue is in place.”

Tomasevicz is helping to spread the message about the Ag Champions program with a shout-out to FFA students on his YouTube channel, see his video below. All Nebraska FFA chapters will be receiving information about the contest details from the Nebraska State FFA Officers on their chapter visits, but more information can be obtained on www.NebraskaCorn.org.

Deadline for the Ag Champions plans to be submitted to NCB is May 15, 2015.

Podcast: Flex Fuels provide options at the pump

 In this podcast, Dennis Gengenbach, director on the Nebraska Corn Board and farmer from Smithfield, Nebraska, shares about the choices consumers have at the pump. When you drive a flex fuel vehicle - as one in seven Nebraskans do - you have the choice to use flex fuels with ethanol at the pump and will not be held hostage by the oil company monopoly. You can fuel up with E85 when the price is right or you can choose E10, E15 or E30 when it makes sense to do so. In addition to these choices at the pump, flex fuels with ethanol also provide huge health benefits for our nation as they help reduce toxic particles in exhaust that have been linked to many serious respiratory diseases. To learn about the health benefits of ethanol, be sure to watch the new movie PUMP, which is now available for download on iTunes.

Now, click here to listen to the podcast.

Podcasts are also available on iTunes! Click here to subscribe.

Food trends & maps....where is our food grown?

Could you identify the food you eat just by where it's grown?

Today, there is a fun quiz on the Washington Post Web site. I just may give one answer away....

...which you should get anyway, right?

Click here to take your quiz.

This has me thinking about how our consumer friends would do on this quiz and where our 2015 food trends are going which influences consumers.

An intriguing trend on the Better Homes & Gardens blog was "grocery store changes".  Day-of delivery services offered by mega retailers have quieted grocery stores. But while online shoppers click their way through aisles, superstores are finding ways to lure them back in -- with dine-in restaurants, food demonstrations, and wine tastings. Grocery stores might just be the next hangout by the end of 2015. This is great news for CommonGround and other ag groups who like to talk to consumers in-store.

According to BBC Good Food's Top 2015 Trends, all kinds of burgers are going to be trending. Duck, lobster, pork belly, scallops and squid burgers are just a few to name that could compete with the ever-popular beef burger. But beef producers shouldn't be too worried because the value of ground beef is increasing. It's the economical, delicious and convenient choice for consumers, where we're seeing more demand for high-value and variety meats overseas.

What do you see as Food Trends for this year? And share with us how you did on your quiz!