December 2016
Ag Insight

Ag Insight

GPS popularity growing rapidly


Recent figures show guidance systems using Global Positioning System coordinates to automatically steer farm equipment such as combines, tractors and self-propelled sprayers are rapidly gaining in popularity.

Guidance systems help reduce operator fatigue and pinpoint precise field locations, within a few inches. Freed from steering, operators can access timely coordinates from a screen, monitor other equipment systems more closely and correct problems more quickly.

Guidance systems also can reduce costs by improving the precision of sprays and the seeding of field crop rows. Between 2010 and 2013, these systems were adopted on 45-55 percent of planted acres for several major crops, including rice, peanuts and corn. Once adopted for a particular crop, the use of guidance systems tends to be rapidly adopted by other crop farmers.

The ease-of-use and functionality of these systems have also increased along with adoption rates.


$1.7 billion in CRP payments go to producers

This year, the U.S. Department of Agriculture will issue nearly $1.7 billion in payments to over half a million Americans who have contracts with the government to protect sensitive agricultural lands.

The payments, part of the voluntary USDA Conservation Reserve Program, will allow producers to protect almost 24 million acres of wetlands, grasslands and wildlife habitat in 2016. The current enrollment limit is 24 million acres.

CRP provides financial assistance to farmers and ranchers who remove environmentally sensitive land from production to be planted with certain grasses, shrubs and trees that improve water quality, prevent soil erosion and increase wildlife habitat. In return for enrolling in CRP, USDA, through the Farm Service Agency, provides participants with rental payments and cost-share assistance. Landowners enter into contracts that last 10-15 years.

Over 1.3 million acres were newly enrolled in CRP in fiscal year 2016 using the continuous enrollment authority – triple the pace of the previous year. In FY 2016, FSA also accepted 411,000 acres through its general enrollment authority, plus 101,000 acres in the new CRP-Grasslands program that balances conservation with working lands.

During its 30-year history, USDA estimates CRP has reduced nitrogen and phosphorous runoff by 95 and 85 percent, respectively. The program also has restored some 2.7 million acres of wetlands and protected over 170,000 stream miles with riparian buffers.


Record soybean harvest expected


USDA has raised its 2016/17 forecast of the U.S. average soybean yield to a record 51.4 bushels. Coupled with a harvested acreage estimate of 83 million acres, the higher yield boosts forecasted soybean production by 68 million bushels to 4.3 billion.

The 4.3 billion bushel forecast would be a record for U.S. production, while 2014/15 and 2015/16 productions would become the second and third highest harvests, respectively.

The largest production gains are due to higher acreage and yield indications for North Dakota, South Dakota and Illinois. These increases more than offset reductions in acreage and production for Minnesota, Iowa and Tennessee.

Much of the production gains are attributable to significant gains in yields that have increased from 38.1 bushels per acre in 2000/01 to 48 bushels per acre in the 2015/16 marketing year.

Growing conditions for soybeans this year were nearly ideal. Spring planting for soybeans proceeded without any major delays. During the summer growing season, the Midwest soybean-growing region benefited from much-above-average rainfall and there were no prolonged dry or hot spells to stress crops.

Gains in production are leading to higher forecasts for ending stocks and increases in exports, reducing downward pressure on domestic soybean prices.


Ag co-op income increased in 2015

Net income for the nation’s agricultural cooperatives soared by 14 percent last year, according to data released by USDA.

In its annual report on national cooperative business sales, they reported that the country’s farmer, rancher and fishery cooperatives posted a record net income of $7 billion in 2015.

"The latest data show cooperatives are a key to building stronger and more vital communities, particularly in rural areas," said Agriculture Secretary Tom Vilsack.

According to USDA data, total business volume fell for the Top 100 cooperatives, from $177 billion in 2014 to $149 billion in 2015. However, net income rose from $4.3 billion to $4.9 billion in 2015, an increase of 14 percent.

CHS Inc., a fuel, grain and food cooperative based in Inver Grove Heights, Minnesota, remains the nation’s largest cooperative in the United States, with $34.7 billion in total business volume for 2015. Dairy Farmers of America, a milk marketing cooperative based in Kansas City, Missouri, came in second place, with $13.9 billion in total revenue, and Land O’Lakes, a dairy foods and farm supply co-op, based in Saint Paul, Minnesota, was third, with $13.1 billion in sales.


Seafood availability shows variations


The supply of seafood available for consumption in the United States is up from 11.7 pounds per person in 1970, but down from a peak of 16.5 pounds in 2006, according to USDA’s Economic Research Service’s food availability data.

In 1970, fresh and frozen shellfish accounted for 21 percent of seafood availability. In 2014, by comparison, fresh and frozen shellfish (mostly shrimp) accounted for 34 percent of the 14.5 pounds per capita of seafood available for consumption.

New efficiencies in shrimp aquaculture beginning in the early 1980s sharply increased availability and reduced prices, and made shrimp a popular menu item at fast casual dining places across the United States.

A 35 percent decline in canned tuna availability since 2000 was largely offset by a surge in fresh and frozen fish availability from low-cost imports of farm-raised salmon and tilapia, and the increased use of wild-caught Alaska pollock in frozen fish sticks, imitation crabmeat and fast-food sandwiches.


Alabama electric co-ops receive government loans

USDA is providing $3.6 billion in loans to fund 82 electric projects in 31 states. These loans will finance infrastructure upgrades, create jobs and improve system operations for rural electric customers nationwide.

The $3.6 billion will build or improve 12,500 miles of transmission and distribution lines. It includes $216 million for smart grid technologies, $35 million for renewable energy, $26 million for environmental improvements and nearly $1.8 million for energy efficiency. The loans are being provided through the Electric Program of the Rural Utilities Service, the successor to the Rural Electrification Administration.

Recipients include:


Chinese fruit imports increasing but U.S. share lags

The rise in Chinese living standards has spurred demand for a more diverse and nutritious diet, leading to a surge in China’s fruit imports.

Fruit is a discretionary item consumed as a dessert, given as gifts, and distributed at meetings and banquets. With greater disposable income, demand for fruit (particularly fresh fruit) has grown rapidly.

In the most recent eight years, import volume grew more than three times to 3.8 million metric tons in 2015. The United States was a pioneer in opening China’s fruit market during the 1990s, but China’s recent surge of imports came mainly from tropical and Southern Hemisphere countries. The United States remains the predominant Northern-Hemisphere supplier, reflecting quality, extended seasonal availability and other competitive attributes; however, its share of total Chinese fruit imports has declined for most of the new millennium.

In 2015, there was a small uptick in the U.S. share moving from 2.6 percent to 3.5 percent, but that percentage is far below the peak share of 11.5 percent in 2001.