September Soaker

Fri. Sep 23, 2016 12:45 PM


By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Jerry Demmer went to bed Wednesday evening hoping his home area of southern Minnesota would miss the heavy rains that had flooded areas south of him. But when the Clarks Grove, Minnesota, farmer awoke Thursday morning, he quickly learned they had not.

"I saw the (Twin) Cities and just to the south of us into northern Iowa had some really heavy rains, and I thought maybe we missed it, but then it hit us about midnight," Demmer told DTN.

The heavy rain fell in northern and northeastern Iowa through south-central and southeastern Minnesota into western and central Wisconsin, according to DTN Senior Ag Meteorologist Bryce Anderson. There was widespread coverage of 2 to 4 inches and up to 10 inches in several locales.

The storms occurred at the boundary between unseasonably hot weather in the central and southeastern Midwest, and cooler air out of the Canadian Prairies, Anderson said. "This, along with a consistent inflow of Gulf of Mexico moisture, led to a continuous conveyor belt of storms in this part of the Midwest," he said.

MOIST IN MINNESOTA

Demmer said he got 7.5 inches of rain Wednesday night into Thursday morning. He said his area of Freeborn County received more than 9 inches of rain in the past seven days and almost 13 inches over the past 30 days.

"We are certainly not short of moisture this fall," he said.

Demmer is hopeful the water standing in his fields will recede quickly and harvest will proceed as normal. He points to a wet September in the early 2000s when his region saw a wet September only to have the weather turn dry, allowing for a normal harvest that fall.

After a quick drive around his fields Thursday morning, he discovered a 40-acre field of soybeans was under water. An 18-acre field of potatoes, which were almost ready for harvest, was also flooded. While the soybeans could still be OK, depending on how long the water stays, he is fairly certain the field of potatoes is a complete loss.

Demmer said he estimates his soybeans under some standing water could see some yield loss of 5% as the bottom pods of the plants are submerged in standing water. Corn, however, should be OK, he said.

About 30 miles to the northwest, Tim Malterer saw even more rain in Waseca County. The Janesville, Minnesota, farmer said he had about 13 inches of rain in about 48 hours. Most of the lower-lying fields were under water, as were many of the region's roads.

"A number of the roads have been taken out, so I'm concerned about harvesting the low ground, and then the concern is how to get the crop from the fields to the farm without major trucking delays," Malterer said.

Some township and county roads are completely "blown out" while most of the highways in the county are still passable. It will be interesting to see how long it will take the county and townships to get their roads repaired or replaced, Malterer said.

Malterer said he had just begun to harvest both corn and soybeans on his farm, finishing only about 22 acres of corn and 60 acres of beans.

Another concern of Malterer will be the condition of the crop by the time harvest does restart. While he believes he will be able to harvest all of his acres, the condition of the crop may not be ideal.

"I think at this point the beans will make it through, but they will lodge and fall over, making them very difficult to pick up," he said. "We haven't had a frost yet, so we are lucky because the plants are still alive enough to make it through."

WET IN WISCONSIN

Farther east, farmers in southern Wisconsin have also seen significant rain in recent weeks, which has led to delays in harvesting corn silage or grain.

Justin Premo, who farms near Columbus, Wisconsin, said he has had about 3 inches of rain this week. But farther north in the south-central part of the state, some areas saw 4 to 6 inches. There was even an area that got 6 to 10 inches, he said.

Premo said one of his local TV stations said Wednesday evening that if his region did not get another drop of rain the rest of the year, they would still be above normal for the year.

"Best-case scenario, if it stopped raining today, we are several days to a week out from being able to chop again," Premo said. "Similar to last year, the corn silage is going from being at the perfect moisture to too dry in the course of a week."

Bill Halfman, a University of Wisconsin Extension agricultural agent for Monroe County located in Sparta in southwestern Wisconsin, said farmers in his county face the same situation as Premo. There is a narrow window for chopping silage with optimum moisture levels. Farmers with wet fields will be delayed, and thus their silage will be less than ideal, he said.

"In many cases, the farmer chopping silage still needs to have silage to feed so it will be chopped, but the quality is just lower," Halfman said. "Perhaps for some they will decided to not chop any or maybe not chop as much as they had planned."

Jason Willemarck, who farms near Baraboo, told DTN the last two months of the growing season has been extremely wet in the Badger State. He said he has received about 4 inches from late Wednesday into Thursday. The forecast is calling for even more rain.

"I think in August it was 9 to 10 inches above normal, and to date in September is 4 inches ahead," Willemarck said. "Seems that as soon as areas dry out for a day or two, we get more."

Willemarck said the crops in his area look fairly good despite all the late-summer rains, but there have been some reports of problems with mold found both in corn and soybeans. He is concerned about it being muddy during harvest this fall. If the wet weather continues, he said he thinks they may have to wait until the ground is frozen to harvest.

"That is, if the stalks can hold up over time," he said.

Russ Quinn can be reached at russ.quinn@dtn.com

Follow Russ Quinn on Twitter @RussQuinnDTN

(AG/SK)

Ag's HR Coach

Fri. Sep 23, 2016 12:01 PM

By Lori Culler
DTN HR Columnist

As labor recruiters searching to fill agricultural positions across the U.S., our team discusses the right level of pay with employers on a daily basis. I've pretty much heard and seen it all when it comes to compensation practices -- the good, the bad and the ugly. The best farms have a deliberate approach to their compensation structure, pay levels and open communication between employer and employee, which in return voids the window for awkward questions. They analyze the "why" behind their pay decisions and structures while working to stay competitive in the market.

There are two questions to ask yourself: What is the reason behind paying each employee the way I am currently paying them; and how do my pay practices affect performance and productivity?

Compensation plans (as long as you are staying in compliance) do not have to be cookie cutter. One size does not fit for all positions or farms. This also stays true for each individual on your farm in the same position. Do not be shy about compensating your all-star accordingly.

Let's review common pay questions and dilemmas.

SHOULD I PAY A FARM OPERATOR SALARY OR HOURLY?

Hourly is typically the best structure for this type of role. It's safe to say that during peak season some operators may be the first ones on the farm in the morning and the last ones to go home at night. They want to feel accurately compensated for long hours, and paychecks should reflect the extra effort. This type of structure will be more motivating as they put in the longer hours during harvest.

I've heard concerns over employees "milking" the clock and employers have moved to salary pay, but a better approach would be to put in a system that reduces the opportunity for inaccurate time. There are phone apps that make time tracking easy, with daily approvals so managers can stay on top of time worked.

HOW OFTEN SHOULD I GIVE PAY RAISES?

If it's been more than two years since you have reviewed and given pay raises, it's time! Don't hesitate or question yourself on giving your employees the raises they have been patiently waiting for. Outside of agriculture, it is common practice to give raises annually, typically somewhere between 1%-2% above cost-of-living increases.

The mentality of the annual raise is slowly being replaced by the practice of aligning pay increases to increases in job responsibility and/or performance. I'm a big supporter of this approach. If you hired an operator at $15/hour and they worked their way into a field lead position playing an important part of your organization, pay should be adjusted as that responsibility has increased. Ask the question: If I was hiring for this exact role now, what would be a reasonable wage? Employees don't always speak up if they are underpaid and may begin to search for other opportunities. Don't lose a key player over poor practices.

HOW MUCH IS A COMPETITIVE WAGE?

Location, location, location! How competitive your wage truly is highly depends on your location along with local factors such as competitors in your area. For instance, if a large construction company swoops in and is continually hiring those all-star operators, do some digging on what is attracting that pool of qualified candidates to that company. What are they offering their operators?

There are also lots of online resources such as payscale.com. Strong agriculture compensation data is not as prevalent in the market; however, we are competing for talent and competing against ag candidates leaving to go into other industries for better wages. You're not necessarily up against your neighbor farmer for wages, you are up against other companies that have interest in the same type of talent. We need to be savvy on what those other industries are paying.

SHOULD I GIVE BONUSES?

The best approach is a well-designed incentive pay structure supporting the behavior(s) that successfully drive your business and incentive pay earned by employees. There is nothing more detrimental than an undefined bonus structure; communication is key here. Lack of communication can leave employees at some point disappointed when the payout is not there or lower than expected.

If they get a strong bonus, is it really a motivator of performance? I see many farms fall into the trap of thinking, "it's a good season" and giving a discretionary bonus, and if it's a bad season, they don't. Does that increase the productivity of employees or change future behavior to better impact the business? I would argue that it doesn't. Given our tight times in agriculture right now, pay increases might not be an option. However, you could opt for implementing an incentive pay program. We are currently working with an ag operation in Colorado implementing an incentive program rewarding their Service Technicians for minimizing a second trip to a customer site within "X" amount of days of the initial service call.

DO I NEED TO PAY OVERTIME FOR THE OFFICE?

Overtime rules are regulated by the Fair Labor Standards Act (FLSA). With the new changes effective this coming December, farms need to take a good look at their pay practices for positions that are not directly doing work on the farm. Office administrators, bookkeepers, custom applicators, etc. will need to follow the overtime compliance. (For details, see https://www.dtnpf.com/…).

Although farms are not required to pay overtime for their operators and technicians working directly on the farm, some farms are choosing to pay overtime on their own. A large grain farm in Indiana pays OT for farm employees as they feel it keeps them competitive when hiring and attracting talent. I have another farm that pays OT for hours over 12 in a day to reward the late-night hours of harvest. Even if your workers are exempt, look at pay practices that might align well with motivating your team to hang in there on long days and perform to their highest standards.

Harvest is a busy season, but take some time once at year-end to review how you are paying each employee. Evaluate if your pay structures truly support productivity and align with where you are taking your business.

**

Editor's note: Lori Culler grew up on a vegetable and grain farm and is the founder of AgHires (https://aghires.com/…), a national employment recruiting service and online ag job board based in Temperance, Michigan. Email lori@aghires.com and find other labor management tips under Resources at www.dtnpf.com

(MZT/AG)

The Market's Fine Print

Thu. Sep 22, 2016 2:28 PM


By John Harrington
DTN Livestock Analyst

"Never give a sword to a man who can't dance."

Confucius, you took the words right out of my month. Well, maybe I would have put it a bit differently, just to promote a few grains of comprehensible rice. But who can deny it has a nice, cryptic ring, worthy of only the best fortune cookies in Chinatown.

Puzzled by the wisdom of the ancient sage? Believe me, you're not alone. Ever seen Marco Polo returned with a wallet full of paper money and scuttles full of coal, the Western mind has been struggling to understand what seem to be the inscrutable ways of the Far East.

Of course, it would be wrong to blame this historical disconnect on either Occidental or Oriental weirdness (though both camps could stage quite a parade in this regard). Cultural differences simply compound the fundamental challenge of communication. And whenever diplomats and politicians attempt to bridge the gap, their own mind-numbing style of rhetoric can turn muddy waters into the smelliest of slurries.

Which brings me to the exciting market news just announced about China's apparent decision to accept shipments of U.S. beef. At least, that's what I think it means. The details and context immediately on the table may require a greater knowledge of Confucius and his ilk than I currently possess. See what you think.

Speaking on Tuesday night to U.S. business groups meeting at the Chinese-owned Waldorf Astoria in New York, Premier Li Keqiang said China would "soon" allow imports of U.S. beef.

China has had a ban in place on U.S. beef imports since 2003, allegedly due to concerns over the spread of bovine spongiform encephalopathy (BSE) after a cow with the disease was found in Washington state. Never mind that the World Organization for Animal Health (OIE) upgraded its BSE risk rating for U.S. beef to "negligible" in May 2013. Never mind that China started accepting Canadian beef (still rated "controlled," riskier than U.S. product) more than two years ago.

Before moving on to more general remarks concerning future economic ties between China and the U.S., Mr. Li dared to make the following assertion, presumably without blushing: "We also recognize that the United States has very good beef, so why should we deny Chinese customers this choice?"

The announcement was short and sweet and hopefully decisive. Yet, for now, I'm left with at least two questions, head-scratchers that might even stump Confucius himself.

First of all, what did the Premier mean by "soon"? Weeks? Months? Quarters? Frankly, he wouldn't be the first spokesperson on either side of the fence to cry "wolf" in front of the beef industry. Furthermore, ancient Chinese wisdom concerning time doesn't exactly make you start your stopwatch:

"It does not matter how slowly you go, as long as you do not stop."

But Master Po, my inner "Grasshopper" cannot tell whether the glass is half full or half empty. Please, in plain cowboy English, how soon is "soon"?

I'm not the only one who's choked over this indefinite timeframe. Soon after I posted the news on Twitter Wednesday morning, a follower well-schooled in either skepticism or foreign languages (possibly both) made the following reply: "'Soon' in Mandarin roughly translates to 'when hell freezes over.'"

For what it's worth, several respected trade sources on our side of the field tell me that "soon" should be no later than the end of the year.

My second brain freeze was iced by Premier Li's disingenuous comment that denying Chinese consumers the choice of unquestionably good beef was nothing short of unthinkable. Really? Why has it been altogether thinkable by your government for that last dozen years?

Honorable Teacher? Sir, if you don't mind, I'd like to take a stab at this eternal conundrum.

The real quality and wholesomeness of U.S. beef has NEVER been held in serious question by Beijing. It has been banned from reasons on protectionism, control over the South China Sea, issues of currency manipulation, disputes over intellectual property, TPP negotiations, and other sundry topics tied to global power. But health and welfare of the Chinese consumer has been nothing more than a stalking horse through this long and expensive period of trade disruption.

Positively, the fact the Chinese feel free to float such a statement (i.e., both solicitous of U.S. beef and transparently embarrassing vis-a-vis their own behavior) may mean that this time they really do intend to put their money where their mouth is. And given why China's beef appetite is growing, my guess is that the reopening of this market could cause U.S. exports to surge 20% or more over the next five years.

If so, Confucius will justifiably deserve to have the final word: "The superior man is modest in his speech, but exceeds in his actions."

John Harrington can be reached harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

(AG)

Dr. Dan Talks Agronomy

Thu. Sep 22, 2016 8:39 AM

By Dan Davidson
DTN contributing agronomist

World records don't just happen at home. Globally, soybean growers are using contests to break yield barriers and that's evident in Brazil.

The Brazilians launched a national yield contest in 2008-09 that encompasses five regions and more than 1,000 entrants annually. In the contest, a farmer and agronomist team work together on a set of management practices to improve yield. One yield winner is selected from each of five regions.

Brazilian farmers measure yield in bags per hectare and 112 bags equates to about 100 bushels. If a yield contest team believes they have a yield of at least 90 bags, it is reported and officials audit practices and witness the harvest. When the contest started in 2009, no one broke 100 bags per hectare. Since then, nearly every winner is breaking the 100 bags per hectare mark, which means today, many contest winners are routinely producing 100 bushels per acre or more. The record yield was 126 bushels per acre in 2015 and 107 bushels per acre this year.

One thing these yield contestants have in common with U.S. yield winners is they are willing to experiment with inputs. The main thing that generally sets Brazilian growers apart is they manage soybeans up through R6 while in the U.S. we routinely stop at R3.

KEYS TO SUCCESS

We tend to think of Brazil as having a hot and humid tropical environment that is prone to heat stress, soybean rust and insect pressures such as the invasive Old World bollworm.

Henry Sako, agronomist and technical coordinator for the Strategic Committee over Soybean Development in Brazil (Comite Estrategico Soja Brasil) says winners in Brazil generally use the best genetics, plant in narrow rows and apply foliar products.

"The varieties being planted are good, but are also commonly grown by all farmers," said Sako. "It means everybody has the same (genetic) potential, but to reach those high yields depends on how the farmers deal with their environments."

Sako also believes good seed vigor, bigger seed sizes and seed treatments are important factors to get the crop off to a good start. Even planting is also as important in soybeans as corn, he added. Brazilian farmers also plant in narrow rows of about 15 to 20 centimeters (6 to 10 inches) to capture more sunlight. Still, they generally hold populations to the equivalent of about 120,000 to 140,000 seeds per acre.

PROTECT THE PLANT

"Air temperature and relative humidity during the crop season are highly favorable conditions for diseases development and proliferation. Fungicide spraying, starting at vegetative stages, when the pressure diseases is still low, has become a standard practice among all Brazilian soybean farmers," Sako said.

The use of biostimulants and foliar nutrition is more inconsistent. "Use is based on individual preferences based on a variety of different reasons. But it's a common practice," he said.

Building fertility deep in the soil profile is also key. "High soybean yields are mostly explained by the soil fertility available below the 40 cm (1.3 foot) depth. Soybean yield above 120 bags/ha (7.2 t/ha or 107 bu/A) correlates well to soil base saturation in the lower profile," Sako said.

"Oxygen supply, water movement and low soil resistance to penetration are essential to soybean root growth and yields. The less the resistance, the better the yield performance.

"Fields with a competition history have higher potential. Soils have been built up over the growing seasons, involving remediating soil acidity and making fertility corrections and including crop rotations," he said.

Dan Davidson can be reached at AskDrDan@dtn.com

(PS/AG)

WOTUS Reform Urged

Wed. Sep 21, 2016 1:49 PM


By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- The time may have come to reform the Clean Water Act, a leading Senate Republican said Tuesday following the release of a report that outlines what Republicans say is evidence the U.S. Environmental Protection Agency already is enforcing the waters of the United States rule.

Sen. James Inhofe, R-Okla., chairman of the Environment and Public Works Committee, called on a group of 11 Democratic senators to join reform efforts in what Inhofe said would create a veto-proof 69-vote majority in the Senate.

Inhofe's committee released a 38-page report Tuesday that outlines examples the committee collected of how the WOTUS rule already is being implemented despite a national injunction in place preventing the rule's enforcement.

"This new majority committee report demonstrates in detail that the EPA and the Army Corps of Engineers, under the Obama administration, are running rogue," Inhofe said in a statement. "... Congress shouldn't wait on the Supreme Court to make the inevitable decision that this agency overreach is illegal. This report should be evidence enough that it's time for Democrats and Republicans to work together to rein in EPA and the Corps."

The Senate committee's report outlines a number of instances showing Clean Water Act exemptions that farmers and ranchers rely on to run their operations. Those exemptions may be in jeopardy under the new rule.

The report said "case studies" collected by the Senate committee show the federal agencies already are enforcing the rule that will "codify many of the most extreme overreaches of federal authority asserted by these agencies."

In one example, in 2014, an Indiana farmer cleared trees from his property to expand his farming operation. The Corps claimed the farmer's activity destroyed an ephemeral drainage characterized as a regulated tributary.

"The Corps claimed jurisdiction based on a soil survey (although the Corps did not claim wetlands were present), Google Earth aerial photographs taken before the trees were cleared, and speculation that a drainage existed beneath the tree canopy," the report said.

In another example from the report, in 2015, the Corps told a landowner that changing the use of a field from alfalfa to orchards would "constitute a land-use change and that Corps regulators could pursue an enforcement action against the landowner if they thought plowing the field to plant trees involved a discharge to wetlands."

The report said the agency told the landowner that despite an "extensive farming history, orchards were never planted on the ranch so they are not the same kind of farming and might not be considered a normal farming activity."

In a Nov. 3, 2015, letter to EPA Administrator Gina McCarthy and Jo-Ellen Darcy, assistant secretary of the Army for Civil Works, a group of one Independent and 10 Senate Democrats said they would pursue reforms to the water of the U.S. rule if the agencies didn't provide clarity to farmers, ranchers and others. That letter was signed by Independent Sen. Angus King of Maine; Democratic Sens. Bill Nelson, Fla.; Tim Kaine, Va.; Mark Warner, Va.; Dianne Feinstein, Calif.; Brian Schatz, Hawaii; Chris Coons, Del.; Tom Carper, Del.; Jon Tester, Mont.; Michael Bennet, Colo.; and Amy Klobuchar, Minn.

In a letter to those senators this week, Inhofe said he believes the report should serve as a basis for pursuing reform.

"Given the facts set forth in the attached report, it is clear to me that the test set forth in your Nov. 3 letter has been met," Inhofe said in the letter. "There is no certainty or clarity regarding CWA jurisdiction and EPA and the Corps have eroded traditional exemptions ... I hope that you live up to the commitment you made last November and work with me on tailored legislation to end the abuses identified in the case studies presented ..."

When contacted by DTN Tuesday, EPA said, "We will review and respond" to the Senate report.

The fate of the WOTUS rule remains tied up in the U.S. District Court for the Sixth District in Cincinnati. According to court documents, the legal battle will continue on into 2017.

Earlier this month, the American Farm Bureau Federation petitioned the U.S. Supreme Court to consider whether the WOTUS cases should be heard by an appeals court or a district court.

"The case studies presented in the report reflect the serious concerns we have raised for more than two years now: the new 'Waters of the U.S.' rule takes the EPA's and Corps' longstanding regulatory overreach and gives it a new name," AFBF President Zippy Duvall said in a statement.

"The agencies have persistently and unlawfully stretched the limited authority Congress gave them, even to the point of regulating ordinary plowing, a normal farming activity exempted by Congress. They have even claimed authority to regulate tire ruts and puddles found on the farm."

SENATE REPORT

In its report, the Environment and Public Works Committee said it was drawing a number of conclusions about how the EPA and the Army Corps of Engineers may be treating ag exemptions based on the case studies it collected.

"EPA and the Corps have and will continue to advance very broad claims of jurisdiction based on discretionary authority to define their own jurisdiction.

"The WOTUS rule would codify the agencies' broadest theories of jurisdiction ... Landowners will not be able to rely on current statutory exemptions or the new regulatory exemptions because the agencies have narrowed the exemptions in practice and simply regulate under another name."

In particular, the Republican majority on the EPW Committee express concern about the loss of exemptions for plowing, crop-switching and puddles.

"If Congress does not act, the newly won ability to challenge Corps jurisdictional determinations and claim exemptions will be moot because the WOTUS rule establishes jurisdiction by rule that will extend to all the activities described in the case studies," the committee report said.

National Cattlemen's Beef Association President Tracy Brunner said the EPW report was "conclusive evidence" of EPA's efforts to expand jurisdiction.

"While the courts have temporarily suspended enforcement and implementation of the rule, the EPA continues to exercise federal control over private land in a way that erodes the agricultural exemptions in the Clean Water Act," Brunner said in a news release.

"While EPA has consistently claimed that the WOTUS rule preserves the exemptions for normal farming and ranching activities, their regulatory track record proves the exact opposite," Brunner said.

Read the Senate report here: http://bit.ly/…

Read the Senate Democrats' letter to EPA and the Corps of Engineers here: http://bit.ly/…

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

Follow him on Twitter @toddneeleyDTN

(SK/AG)

DTN Retail Fertilizer Trends

Wed. Sep 21, 2016 1:43 PM


By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Retail fertilizer prices continued their steep decline the second week of September 2016, according to fertilizer retailers surveyed by DTN. For the sixth week in a row, prices for fertilizers are considerably lower with all but one of the fertilizers having sizeable prices drops.

Leading the way lower this week is 10-34-0. The starter fertilizer is 10% lower compared to month earlier and had an average price of $474 per ton. UAN32 is 9% less expensive and has an average price of $272/ton. Potash is down 7% and has an average price of $320/ton.

Both urea and UAN28 were down 6% compared to the previous month. Urea had an average price of $324/ton and UAN28 $233/ton.

Both MAP and anhydrous were 5% less expensive, looking back to a month earlier. MAP had an average price of $458/ton and anhydrous $496/ton.

The one fertilizer with just a slight price decline compared to last month was DAP. The phosphorus fertilizer had an average price of $444/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.35/lb.N, anhydrous $0.30/lb.N, UAN28 $0.42/lb.N and UAN32 $0.42/lb.N.

Last week, the boards of directors of Agrium, Inc. and Potash Corporation of Saskatchewan Inc. (PotashCorp) unanimously agreed to merge the two companies. This merger will create the largest crop nutrient company in the world, according to press releases from both companies.

A new parent company will be formed to own both companies, and the new company will be named prior to the transaction's closing. The new company will have 20,000 employees, operations and investments in 18 countries and have a pro forma enterprise value of $36 billion.

In addition, the new company would have net revenue of approximately $20.6 billion.

"Our merger creates a new premier Canadian-headquartered company that reflects our shared commitment to creating value and unlocking growth potential for shareholders," said PotashCorp President and Chief Executive Officer Jochen Tilk.

"This is a transformational merger that creates benefits and growth opportunities that neither company could achieve alone," Agrium President and Chief Executive Officer Chuck Magro said. "Combining our complementary assets will enable us to serve our customers more efficiently, deliver significant operating synergies and improve our cash flows to provide capital returns and invest in growth."

The new company will be led by Tilk, who will serve as executive chairman and Magro, who will serve as chief executive officer. Both will report to a new board of directors.

Following the closing of the transaction, the new company will have its registered head office in Saskatoon, with Canadian corporate offices in both Calgary and Saskatoon. The transaction is expected to be closed during mid-2017, subject to several different company and Canadian court approvals.

Retail fertilizer prices are lower compared to a year earlier. All fertilizers are now double-digits lower.

10-34-0 is now down 20% while DAP, MAP and UAN32 are all 21% lower. UAN28 is now 22% lower, anhydrous is 24% less expensive, urea is down 25% and potash is 31% lower compared to a year prior.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to November 2008 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DTN's average of retail fertilizer prices from a month earlier ($ per ton):

DRY
Date Range DAP MAP POTASH UREA
Sept 14-18 2015 563 579 462 432
Oct 12-16 2015 547 564 440 418
Nov 9-13 2015 547 561 426 405
Dec 7-11 2015 534 555 417 397
Jan 4-8 2016 495 521 392 381
Feb 1-5 2016 488 502 381 370
Feb 29-Mar 4 2016 476 492 373 374
Mar 28-Apr 1 2016 478 501 370 386
Apr 25-29 2016 476 502 366 386
May 23-27 2016 476 501 365 381
June 20-24 2016 470 495 358 366
July 18-22 2016 464 493 357 357
Aug 15-19 2016 452 471 333 337
Sept 12-16 2016 444 458 320 324
LIQUID
Date Range 10-34-0 ANHYD UAN28 UAN32
Sept 14-18 2015 593 653 300 345
Oct 12-16 2015 584 640 295 338
Nov 9-13 2015 581 631 289 332
Dec 7-11 2015 575 625 284 330
Jan 4-8 2016 572 582 273 316
Feb 1-5 2016 549 555 263 305
Feb 29-Mar 4 2016 566 537 260 309
Mar 28-Apr 1 2016 561 580 268 315
Apr 25-29 2016 560 587 274 321
May 23-27 2016 560 587 274 321
June 20-24 2016 554 567 265 305
July 18-22 2016 546 546 260 304
Aug 15-19 2016 513 516 238 285
Sept 12-16 2016 474 496 233 272

Russ Quinn can be reached at russ.quinn@dtn.com

Follow Russ Quinn on Twitter @RussQuinnDTN

(AG/BAS)

Ag Consolidation Hearing

Wed. Sep 21, 2016 1:37 PM


By Emily Unglesbee
DTN Staff Reporter

WASHINGTON (DTN) -- Senators zoomed in on questions of market competition and fairness in the light of the three major mergers underway during a Senate Judiciary Committee hearing on consolidation in the U.S. seed and agrochemical industry.

The hearing held on Tuesday focused on three proposed mergers -- Bayer's $66 billion purchase of Monsanto, ChemChina's $43 billion acquisition of Syngenta and the marriage of Dow AgroSciences and DuPont. If realized, these deals would drop the number of major biotech seed companies from six to four, noted Sen. Charles Grassley, R-Iowa, who organized the hearing.

"There's a lot of interest in how these transactions will recalibrate the seed and chemical world, and whether they'll pass regulatory muster," he said in his opening remarks. "It's absolutely crucial that competition is preserved in this important sector of our economy. Iowans -- including farmers, company employees and regular consumers -- are interested in hearing how these deals will impact price, choice and jobs."

Company executives from Dow, DuPont, Monsanto, Bayer and Syngenta spoke in defense of the proposed deals, stressing their improved efficiencies and research capabilities. (ChemChina declined the committee's invitation to the hearing, Grassley said.) Representatives from the American Antitrust Institution and the National Farmers Union countered with concerns of rising seed costs and dwindling product options for farmers in an already struggling farm economy.

The ChemChina and Syngenta deal drew special scrutiny, as did the possibility of a "duopoly" of just two major seed companies in the U.S. that would control the seed supply and edge out smaller competitors.

CHINESE WORRIES

Despite having already passed review by a U.S. governmental body known as the Committee on Foreign Investment in the United States (CFIUS), ChemChina's proposed purchase of Syngenta drew a large proportion of the scrutiny from senators and witnesses, who zoomed in on the dangers of a Chinese state-led company owning Syngenta.

ChemChina "could potentially shape or control what Syngenta does in terms of competition, how it collaborates with rivals, the types of products that it innovates, not for benefit of the American farmer or consumer, but for the benefit of the Chinese farmer or consumer," said Diana Moss, president of the American Antitrust Institution, in response to Grassley's questions.

A number of witnesses highlighted the potential preferential treatment Syngenta could receive in the approval of traits and other products in China. National Farmers Union President Roger Johnson said "slow tracking of competing products from other companies into China" would be an equal and even more likely concern.

Syngenta CEO Erik Fyrwald told Grassley and the committee that the company hopes that giving China an active investment in the ag biotech sector will push the country to streamline and improve its import-approval process and make it more transparent.

Senator Mike Lee, R-Utah, noted that when Smithfield was bought by a Chinese company, it eventually gained control of 97% of U.S. pork exports to China. Fyrwald insisted that because seed traits are often cross-licensed among biotech companies, no such monopoly on exports could occur in the seed industry.

"You can import pork from one company, but you cannot import grain from one seed company," he said.

One senator, Richard Blumenthal, D-Conn., even attempted (mostly unsuccessfully) to extract a promise from Fyrwald that the ChemChina-owned Syngenta would never use the foreign sovereign immunities defense if it were sued by American parties.

THE U.S. SEED QUESTION

The term "duopoly" was used on multiple occasions to refer to the possibility of two newly merged companies -- Monsanto-Bayer and Dow-DuPont -- controlling the bulk of corn, soybean and cotton seed (as well as smaller crops such as canola) in the U.S.

In 2007, the Department of Justice required Monsanto to divest itself of Stoneville Cotton Seeds before it could buy Deltapine. Monsanto did so by selling Stoneville Cotton to Bayer, the very company now buying Monsanto.

When pressed by Sen. David Perdue, R-Ga., Monsanto Vice President Robb Fraley said the company would be open to more divestitures such as this one if necessary. That concession was echoed by a number of the companies, but rang hollow for some senators and witnesses.

"Who is left to buy them?" Sen. Lee fretted at one point. Moss added that insect and weed resistance has driven companies to increasingly stack biotech traits together in seed offerings. "If that's the name of the game in biotech innovation, we need more competitors making traits, not fewer," she said. "With the elimination of two of six competitors, we eliminate opportunities for competitive stacking."

Sen. Ted Cruz, R-Texas, introduced a newly minted study from Texas A&M's Agricultural and Food Policy Center showing that the Monsanto-Bayer and Dow-DuPont mergers would increase corn, soybean and cotton seed prices, with cotton prices rising by as much as 20%. In contrast, another study submitted by National Corn Growers Association CEO Chris Novak showed that the Dow-DuPont merger was unlikely to hurt competition for herbicides, insecticides or soybean seed, and that the resulting increased consolidation in the corn seed market would not be harmful.

The possibility of too much vertical integration -- when one company controls multiple parts of crop production, such as seeds and chemicals -- was also raised. Moss said if both the Monsanto-Bayer deal and Dow-DuPont go through, farmers could get locked into single crop production systems, required to use one company's seed and matching chemicals indefinitely.

The American Farm Bureau's chief economist Bob Young agreed, but added that: "Once one firm merges in those particular areas, the rest of the industry probably operates at a disadvantage until a similarly structured firm is created. In other words, we are probably better served as an industry with at least two of these chemical-genetic firms, rather than one."

POINTING THE FINGER AT REGULATION

A number of company executives and senators blamed the current merger "tsunami" in agriculture on the growing complexity of the regulatory system and the cost of bringing a new ag product to market.

Syngenta's Fyrwald noted that a number of recent studies estimate that the average cost to bring a new trait to market stands at $13.6 million over 13 years.

"I have long argued that consolidation is the inevitable answer to an increasing regulatory system for every industry squeezing all but the largest competitors out of marketplace," said Sen. Orrin Hatch, R-Utah.

You can access full written statements from all the witnesses at the hearing, as well as a video of the entire 2.5-hour event here: http://bit.ly/….

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

Follow Emily Unglesbee on Twitter @Emily_Unglesbee

(SK/AG)

Todd's Take

Tue. Sep 20, 2016 2:57 PM


By Todd Hultman
DTN Analyst

If you want to talk about corn crop estimates this fall -- as many do -- we can go on and on about USDA's estimate of 15.09 billion bushels based on a yield of 174.4 bushels per acre. And we can also point out that this record crop is supposed to result in 2.38 billion bushels of ending stocks in 2016-17 which, if true, would be the highest ending stocks-to-use ratio in 11 years.

Or we can talk about how anecdotal reports are suggesting that USDA's estimates are too high, and the actual corn yield may be closer to 171 bushels, pointing to a slightly lower record crop of 14.8 bb. However, even 14.8 bb is likely to add to ending supplies in 2016-17 and is considered bearish for prices.

But as I've mentioned before, too often these exercises of spending so much time and effort in guessing at answers, which none of us know, become distractions from what's more important -- understanding the concrete clues the market is giving us.

If my suspicions are correct, this appears to be one of those times when corn prices are behaving more bullish than we would normally expect from all this talk of record harvest. Let others argue about yield. If December corn can close and sustain trading above the August high of $3.44 1/4, we may soon be able to say that this summer's three-month downtrend is over.

If that seems a little hard to believe, consider the evidence. First, the notion that the U.S. is going to have a record corn crop in 2016 is not exactly fresh news. The bearish writing was on the wall as early as March 31 when USDA estimated 93.6 million acres of corn plantings, which turned into 94.1 million acres on June 30.

The second bearish blow came in July as wave after wave of rain crossed the Midwest and temperatures turned milder than they had been in June. When USDA's first field-based crop estimate predicted 15.15 bb on Aug. 12, the immediate reaction was bearish, even though December corn finished slightly higher on the day. Corn futures went on to finish the month of August at their lowest spot price in seven years while DTN's National Corn Index dipped to $2.73, which was below the reversal low of $2.81 1/2 seen early in October 2014.

As bearish as market action looked in August, corn has behaved much differently in September. USDA is still looking for a record harvest of 15.09 bb, and there has been no bullish news to point to, but there are concerns that the northern Midwest may be in for a wet fall.

I find it potentially bullish, however, that DTN's National Corn Index has rejected the attempt to trade below its October 2014 low and is now at $2.97. December corn has only traded higher in 12 of the past 36 Septembers and yet, as bearish as all the talk is this year, December corn is up over 20 cents on the month and just 7 cents shy of the August high. The weekly stochastic indicator has also signaled a bullish change in price momentum.

The trend indicator that I respect most is the five-week rule, which I wrote about in August. The last time December corn closed above its five-week high was on April 18, not long after USDA predicted a bearish planting estimate of 93.6 ma. You may recall that prices went from closing above $3.90 to an eventual high of $4.49 on June 17 -- even though it was difficult to find a bullish reason in April.

Similarly, I don't have a good fundamental reason for turning bullish in corn yet, and I don't know what USDA's final yield estimate will be, but I do like it that commercials are currently net-long. A December close clearly above $3.44 1/4 would be a bullish change in the ebb and flow of the price discovery process, which is where the more important news for corn is typically found.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(BAS/CZ )

View From the Cab

Tue. Sep 20, 2016 2:46 PM

By Richard Oswald
DTN Special Correspondent

LANGDON, Mo. (DTN) -- Since Aug. 17, DTN View From the Cab farmer Jim Hoover of Newport, Pennsylvania, has seen only a half inch of rain on his fields, but casual observers couldn't tell it from his soybean yields. "I am really amazed at how well the soybeans are doing in spite of the amount of rain they've had," he said.

His first 125 acres of regular-crop soybeans harvested last week averaged 55.8 bushels per acre.

Jim's soybeans may be peaking early, though. That's because of conditions across dry parts of Pennsylvania where the Susquehanna River is near record-low levels. "Our double-crop won't do so well unless they get rain," Jim told DTN late Sunday evening.

Planted with a drill, recently harvested soybeans were a Pioneer variety Jim is especially fond of for its reliable production. "It's always treated me well. The stems are green, but they don't make the combine grunt. They're (the beans) not small, but they vary in size. I guess that's because of the drought," he said.

So far, corn yields seem more affected by Pennsylvania's dry conditions. "I haven't done any corn that's been over 22% or 23%. Most is 19% to 21%. The average yield is about 130 bpa right now, but I think that's a little unfair, because I think there's some fields that will take that down," Jim speculated.

That could be partly due to wildlife pressure in some fields.

"We picked one 30-acre field with two small five-acre fields attached to it. The 30-acre field yielded 115 or 116 bpa. But one of the small fields went 14 bpa while the other one was about 30 bpa" Jim said.

Manure spreading from Jim's turkey feeding operation at Hoover's Turkey Farm is ongoing on summer-harvested triticale ground. As if there isn't enough to do -- two combines in the field, manure spreading and deliveries of seed wheat to Jim's buyer -- hen turkeys will be picked up this week at lighter-than-usual weights.

"It puts an extra amount of stress on us because someone has to be there all night while they're loading." Why slaughter lightweight birds? It's consumer demand." Housewives haven't learned yet that a 10- to 12-pound bird doesn't have the finish on it, it should." While housewives see birds that are $3 cheaper, Jim sees his profits cut short as consumers settle for a less succulent product. "Fourteen to 16 and 18 to 20 (pounds) are the best finished hens," he said.

Cover crops are gaining in popularity. But at Hoover's Turkey Farm, as quickly as corn fields are picked, Jim's grandson Mason brings up the rear with the minimum-tillage vertical tiller. "With about 125 acres out so far, he's maybe 15 or 20 acres behind us. If we leave most of the stubble intact, then that's our cover crop. I'm kind of glad I never got into that, mostly because of the high cost of cover crop seed." DTN asked whether N-fixing cover crops pay for themselves. "That's why I'm a great one for manure. I don't buy N except for a little (urea)," Jim explained.

With harvest underway, newly exposed fields will soon be planted to seed fields of wheat and triticale. If planted today, Jim told DTN, those crops might not germinate. "Right now, when Mason gets in with the vertical tiller, he says 'Grandpa, I can't see where I'm going.' It's that dusty, and there's a lot of corn stalks there."

But Jim knows that, eventually, the weather will change. "I'm not worried about the moisture for the crops we have to plant. The old-timers say just get it in the ground," he said.

In Decatur, Illinois, DTN View From the Cab farmer Chase Brown had a "good, productive" week. "We got to picking corn. So did everyone else. A lot of corn came out this week." Those fields don't rest for long. "Guys are chasing combines with chisels," Chase told DTN late Sunday.

Chase described early yield results with one disclaimer: "I never want to be that guy who says he has corn better than everyone else." That said, early results from one field of 108-day corn that did not have a fungicide applied came close to averaging 240 bpa. "We're having 200 bpa to 270 bpa and everything in between," he said.

Moisture levels on the first field of 108-day corn were 19% to 20%. The field of 113-day corn where fungicide was applied tested 23% to 24%. "We've got two 10,000-bushel dryer-(bins) and we filled those up. Then we went to some rented ground ... and filled up the bottoms of some bins," Chase explained.

In the past, Chase has viewed fungicide applications as something to prevent corn from becoming too dry in the field. His belief was that healthier stalks prevented yield loss mostly by keeping grain moisture levels higher, longer. This year is different.

"In another field planted just a mile away, we're seeing a 20 bpa to 30 bpa yield increase on the same hybrid just for using fungicide." Chase told DTN that where scouting found no need for fungicide applications, even those fields are showing yield increases when fungicide was applied. "Technically, he shouldn't have needed it, but a neighbor said he could see to the exact row where he sprayed and didn't spray. I wish we'd sprayed everything. If we'd thought it would make us 10 bpa or even 15 bpa, we would have. Eight bushels would have paid for it," he said.

Chase reports no soybeans are harvested in his area where maturity has come on slowly. "We had a rain on Friday that really knocked a lot of leaves off. I think someone will probably be harvesting here by the end of the week."

Chase weaned his purebred Hereford calf crop on Monday. Farmers Almanac pegged the Saturday before as "the perfect time." Though his timing was a little off, Chase said it went pretty well. "I believe in following the moon signs," he said.

Chase sells seed, including cover crop seed. Business has been good. "It's about two weeks later than I'd like because of the logistics (of harvest time)." That's because Chase delivers seed as a service to his customers, to the aerial applicator and loads it on the airplane. "It's kind of nerve-wracking. He lets the engine run because he wants to get back into the air as soon as possible. I have to back the seed tender in to the plane. It's loud. And you don't want to hit the plane," he said.

Reports of damaged corn are coming out of western Illinois, with some fields having up to 70% losses. "Thirty percent is not uncommon." Chase said some are calling the culprit severe Diplodia. "Fungicide won't prevent that, but a healthier plant resists it better. I've heard it's worse in a couple of specific hybrids ... one elevator is bidding 13 cents under for good corn (to blend with damaged corn for a higher grade)." That may be a good price for an interior Illinois grain elevator, but it doesn't offer Chase an incentive.

"Decatur bids are 3 cents over," he said.

Richard Oswald can be reached at Talk@dtn.com

Follow Richard Oswald on Twitter @RRoswald

(SK/BAS/AG)

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