November 2015
Ag Insight

Ag Insight

Coalition endorses plan to reduce food waste

The U.S. Department of Agriculture and the Environmental Protection Agency have announced the United States’ first-ever national food waste reduction goal, calling for a 50 percent reduction by 2030.

As part of the effort, the federal government will lead a new partnership with charitable organizations, faith-based groups, the private sector, and local, state and tribal governments to reduce food loss and waste in order to improve overall food security and conserve the nation’s natural resources.

The announcement came just days before world leaders gathered at the United Nations General Assembly in New York to address sustainable development practices, including sustainable production and consumption.

 

Use of conservation practices varies

Some conservation practices to mitigate the environmental effects of agricultural production are more widely adopted than others, according to USDA statistics.

No conservation practice has been universally adopted by U.S. farmers, USDA stated. Variation in their adoption is due, at least in part, to differences in soil, climate, topography, crop/livestock mix, producer management skills and financial risk aversion.

These factors affect the on-farm cost and benefit of practice adoption. Presumably, farmers will adopt conservation practices only when the benefits exceed cost, although government programs can increase adoption rates by helping defray costs.

The potential environmental gain also varies. Ecosystem service benefits (such as improved water quality and enhanced wildlife habitat) depend both on the practice and on the location and physical characteristics of the land.

Farms with nontraditional activities on the rise

The number of farms engaged in non-traditional activities has increased significantly in recent years.

Nontraditional farm activities involve innovative uses of farm resources such as growing/selling value-added products (such as fruit jams, preserves, cider, wine, floral arrangements and beef jerky), selling directly to consumers, providing agritourism/recreational services and using renewable-energy-producing systems such as solar panels, wind turbines and biodiesel.

Showing the largest growth were farms with renewable-energy-producing systems. In 2012, about 57,000 U.S. farms produced renewable energy, more than double the number in 2007. By 2012, 63 percent of renewable-energy-producing farms had installed solar panels, which drives this increase.

The number of farms with income from agritourism/recreation increased over the five-year period by 42 percent, with the largest increase in smaller agritourism farms with annual receipts under $5,000.

Water quality trading efforts expanding

USDA and EPA are taking steps to expand markets for water quality benefits generated on farms, ranches and forest lands.

Water quality trading is an innovative approach to reduce pollution and efficiently achieve water quality goals. Trading is based on the fact that sources in a watershed can face very different costs to control the same pollutant. Trading programs allow facilities facing higher pollution control costs to meet their regulatory obligations by purchasing environmentally equivalent (or superior) pollution reductions from another source at lower cost, thus achieving the same water quality improvement at lower overall cost.

USDA and EPA signed a partnership agreement two years ago to advance water quality trading and other market-based approaches providing benefits to the environment and economy. A recent workshop attracted over 200 participants from across the nation involved in water quality trading.

Among other activities, USDA also has announced grants of more than $2 million designed to build and promote new water quality trading resources. Included was a grant to the National Association of Conservation Districts to develop guidance materials and engage in outreach and training to increase participation of soil and water conservation districts in nutrient trading programs.

Enrollment deadline extended for Margin Protection Program

The deadline to enroll for the dairy Margin Protection Program for coverage in 2016 has been extended until Nov. 20, 2015. The voluntary program, established by the 2014 Farm Bill, provides financial assistance to participating farmers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the farmer.

Producers can use the USDA’s Farm Agency Service online web resource, www.fsa.usda.gov/mpptool, to calculate the best levels of coverage for their dairy operation. The secure website can be accessed via computer, smartphone or tablet.

Producers enrolled in 2015 still need to make a coverage election for 2016 and pay the $100 administration fee. Although any unpaid premium balances for 2015 must be paid in full by the enrollment deadline to remain eligible for higher coverage levels in 2016, premiums for 2016 are not due until Sept. 1, 2016. Also, producers can work with milk marketing companies to remit premiums on their behalf.

To enroll in the Margin Protection Program, dairy farmers should contact their local FSA county office.

Fed steer prices fall from historic highs

Although 2015 fed steer supplies remain historically small, prices have recently fallen from the record-high levels reached during the first and second quarters of 2015.

Prices have been trending lower since April 2015, and in July and August fell below the levels of the same time a year ago.

The recent decline in fed steer prices is driven by negative margins faced by packers during the summer months. As a result, slaughter data suggests packers may have slowed the pace of slaughter to improve their margins, subsequently driving fed steer prices lower.

A continued reluctance of packers to expand their slaughter could put further downward pressure on the price of these cattle in the months ahead, especially if it creates a backlog of fed steer supplies into the fourth quarter, when demand typically shifts away from grilling items to traditional holiday items such as turkeys and hams.

Four Alabama organizations receive USDA grants

The USDA has announced grants totaling $8.4 million to support the work of 54 partner organizations in 35 states in providing training, outreach and technical assistance for socially disadvantaged, tribal and veteran farmers and ranchers.

Recipients and their grant amounts include Alabama A&M University, $180,791; Alabama State Association of Cooperatives, $200,000; Tuskegee University, $200,000; and the United Christian Community Association, $114,300.

The grants are administered through USDA’s Office of Advocacy and Outreach 2501 Program. Since 2010, more than $74 million has been invested through the 2501 Program to leverage the work of 304 local partners. The 2014 Farm Bill reauthorized the program and expanded assistance to include military veterans.

U.S. ranks as world’s largest ethanol exporter

The United States is the world’s largest producer and consumer of ethanol and also ranks as the world’s largest exporter of the product.

Between 2001 and 2014, global biofuel production and use grew rapidly, driven by a combination of rising gasoline prices, falling prices of biofuel inputs and policies mandating use of renewable fuels. These same factors also led to an expansion of global trade in biofuels.

Prior to 2010, the United States relied partly on imports to meet domestic demand. But, beginning in 2010, the nation emerged as a net exporter of ethanol, reflecting the blend wall that limits the ethanol content of gasoline used in most conventional vehicles to 10 percent. At the same time, demand for biofuels from other countries, particularly the European Union and Brazil, continued to grow.

The United States has remained a net exporter of ethanol each year since 2010, and since 2011 has been the world’s largest exporter.

In 2014, oil prices declined by more than half, pressuring U.S. ethanol consumption; however, the market remained strong due to U.S. government policies mandating ethanol use, the use of ethanol as an octane enhancer and the large export market.