USDA Reports Summary

Fri. Oct 09, 2015 3:26 PM

By Katie Micik
DTN Markets Editor

WASHINGTON (DTN) -- USDA lowered its forecasts for corn and soybean production to 13.56 billion bushels and 3.89 bb respectively.

On corn, USDA estimated the national average yield at 168 bushels per acre, up 0.5 bpa from last month. Harvested acreage was trimmed by about 500,000 acres to 80.7 ma, toward the low end of pre-report estimates.

Soybean yield came in at 47.2 bpa, up 0.1 bpa from last month. USDA also lowered harvested acreage by 1.1 million acres to 82.4 ma.

USDA's ending stocks estimates all fell within the range of pre-report expectations.

Crop Production:…

World Agricultural Supply and Demand Estimates (WASDE):…


USDA's Crop Production forecasts incorporated certified acreage data from the Farm Services Agency. Farmers planted a total of 88.4 million acres of corn, but will only harvest 80.7 million acres for grain.

USDA is forecasting the crop will be the third largest on record.

Corn ending stocks for the 2015-16 marketing year are estimated at 1.561 bb, down 31 million bushels from last month's estimate. USDA made no changes to demand, and the drop is a result of the smaller production forecast.

The ending stocks-to-use ratio dropped slightly to 11.3%. The season average farm price was expected to range from $3.50 to $4.10, also higher than last month.

Globally, stocks were estimated at 187.83 million metric tons, down 1.9 mmt from last month. USDA lowered beginning stocks by 1.2 mmt to reflect higher feeding in the EU and Ukrainian exports. USDA lowered its 2015-16 production forecasts for Ukraine, Argentina, India, Philippines and several sub-Saharan African countries.

The global stocks-to-use ratio was unchanged at 19.2%.


USDA's production estimates for soybeans were within the range of pre-report estimates.

USDA made numerous changes to its soybean supply and demand estimates for 2015-16.

USDA incorporated the lower beginning stocks estimate from the last Grain Stocks report and its lower production forecast, resulting in a 66 mb decline in supplies. USDA increased its forecast for crush by 10 mb and cut its forecast for exports by 50 mb.

USDA also made some revisions to its 2014-15 supply and demand estimates, including increasing soybean crush by 30 mb and increasing exports by 18 mb.

Ending stocks for 2015-16 declined by 25 mb to 425 mb, and the stocks-to-use ratio dropped to 11.5%. The national average farm price range was left unchanged at $8.40 to $9.90.

Globally, USDA slightly increased stocks to 85.14 mmt. USDA increased Brazilian 2015-16 soybean production to 100 mmt from its previous estimate of 97 mmt. It also increased Brazil's production for 2014-15 to 96.2 mb.

Global stocks-to-use was unchanged at 27.4%.


USDA incorporated its smaller production estimate into the supply and demand estimates, lowering production by 84 mb to 2.052 bb. Feed and residual use declined 20 mb and exports dropped 50 mb, resulting in a 14 mb decline in ending stocks. Ending stocks are forecast at 861 mb.

The ending stocks-to-use ratio climbed to 41.6%. The national average farm gate price range was narrowed by a dime at both the high and low ends, ranging from $4.75 to $5.25.

USDA boosted global ending stocks by 1.93 mmt to 228.5 mmt on increased production and beginning stocks. USDA increased production in Australia and Canada by 1 mmt and EU production by 1.1 mmt.

Global ending stocks-to-use increased to 31.9%.


On the domestic side, USDA's October WASDE estimate of U.S. corn ending stocks for 2015-16 is 1.561 billion bushels, based on 13.555 billion bushels of estimated production with a yield of 168 bushels an acre. The 2015-16 ending stocks estimate is down from 1.731 billion bushels for 2014-15 and is more than expected, said DTN Analyst Todd Hultman. "Friday's report should be viewed as neutral-to-bearish for corn," Hultman said.

USDA's estimate of U.S. soybean ending in 2015-16 is 425 million bushels, based on 3.888 billion bushels of production and a yield of 47.2 bushels an acre. The 2015-16 estimate of ending stocks is up from 191 million bushels for 2014-15. "New-crop stocks were more than expected, and Friday's report should be viewed as neutral-to-bearish for soybeans," Hultman said.

USDA's estimate of U.S. ending wheat stocks for 2015-16 is 861 million bushels, based on 2.052 billion bushels of production and more than expected. "Friday's U.S. report should be viewed as neutral-to-bearish for wheat," Hultman said.

On the global side, USDA's estimate of global ending corn stocks for 2015-16 was reduced from 189.69 million metric tons to 187.83 mmt and is less than expected. The 2014-15 corn production estimate for Brazil was increased from 84.0 to 85.0 mmt.

USDA's world ending soybean stocks estimate for 2015-16 was increased from 84.98 to 85.14 mmt and is more than expected. The 2014-15 production estimate for Brazil was increased from 94.5 to 96.2 mmt.

USDA's estimate of world ending wheat stocks for 2015-16 was increased from 226.56 to 228.49 mmt and is more than expected. Production estimates showed increases for Australia, Canada, Europe and Ukraine.

"Friday's world estimates from USDA are slightly bullish for corn, but slightly bearish for soybeans and wheat," Hultman said.

Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT on Friday for a discussion on the latest USDA reports. Sign up now at:….

U.S. CROP PRODUCTION (Million Bushels) 2015-16
Oct Avg High Low Sep 2014-15
Corn 13,555 13,461 13,798 13,050 13,585 14,216
Soybeans 3,888 3,884 3,989 3,590 3,935 3,927
Grain Sorghum 574 569 578 560 574 433
U.S. AVERAGE YIELD (Bushels Per Acre) 2014-15
Oct Avg High Low Sep 2014-15
Corn 168 166.4 169.6 161 167.5 171
Soybeans 47.2 46.9 48 43 47.1 47.5
U.S. HARVESTED ACRES (Million Acres) 2014-15
Oct Avg High Low Sep 2014-15
Corn 80.7 80.9 81.4 80.5 81.1 83.1
Soybeans 82.4 82.9 84 82.2 83.5 82.6
U.S. ENDING STOCKS (Million Bushels) 2015-16 Sep*
Oct Avg High Low Sep 2014-15 2013-14
Corn 1,561 1,498 1,750 1,130 1,592 1,731 1,236
Soybeans 425 398 511 125 450 191 92
Grain Sorghum 42 39 42 36 41 18 34
Wheat 861 821 896 765 875 753
WORLD ENDING STOCKS (Million Metric Tons) 2015-2016
Oct Avg High Low Sep 2014-15
Corn 187.8 189.2 193.0 181.7 189.7 197.2
Soybeans 85.1 84.6 86.5 82.0 85.0 78.7
Wheat 228.5 224.7 226.5 221.5 226.6 211.3
WORLD PRODUCTION (Million Metric Tons)
2015-16 2014-15
Oct Sep Oct Sep
FSU - 12 wheat 117.5 117.0 112.7 112.7
European Union wheat 155.3 154.1 156.5 156.5
China corn 225.0 225.0 215.7 215.7
Brazil corn 80.0 79.0 85.0 84.0
Brazil soybeans 100.0 97.0 96.2 94.5
Argentine soybeans 57.0 57.0 60.8 60.8


WOTUS Delayed Nationally

Fri. Oct 09, 2015 12:04 PM

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- The waters of the United States rule will be put on hold nationally after the U.S. Sixth Circuit Court of Appeals ruled Friday it must first resolve pending legal questions, including whether the court has jurisdiction to hear multiple lawsuits against the federal government on the rule.

In a 2-1 ruling, the three-judge panel determined the court has no other choice but to issue a stay, as the court raised questions about the scientific justification for how key parts of the rule were created.

Some 30 states have sued the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers to stop the rule's enforcement. A federal court in North Dakota recently issued an injunction preventing the rule's implementation in 13 states.

In the majority opinion, the Sixth Circuit Court said it believes the plaintiffs have demonstrated their legal claims could be successful.

Exactly how long the stay will last is not known. The court said in its order it may render a decision on jurisdictional questions "in a matter of weeks."

The states and other plaintiffs have argued the federal government arbitrarily set distance limitations when determining adjacent waters, tributaries and "significant nexus" in the final rule, providing no basis in science. Internal memos from the Army Corps of Engineers shows Corps personnel raised concerns about those distances being legally defensible in the weeks before the final rule was issued in August.

"Meanwhile, we conclude that petitioners have demonstrated a substantial possibility of success on the merits of their claims," the court said in its order. "... Moreover, the rulemaking process by which the distance limitations were adopted is facially suspect. Petitioners contend the proposed rule that was published, on which interested persons were invited to comment, did not include any proposed distance limitations in its use of terms like 'adjacent waters' and 'significant nexus.' Consequently, petitioners contend, the final rule cannot be considered a 'logical outgrowth' of the rule proposed, as required to satisfy the notice-and-comment requirements of the APA (Administrative Procedures Act).

The court said EPA and the Corps of Engineers failed to identify "specific scientific support substantiating the reasonableness of the bright-line standards they ultimately chose."

The court said "considering the pervasive nationwide impact of the new rule on state and federal regulation of the nation's waters, and the still open question whether, under the Clean Water Act, this litigation is properly pursued in this court or in the district courts, we conclude that petitioners have acted without undue delay and that the status quo at issue is the pre-rule regime of federal-state collaboration that has been in place for several years."

While the order to stay the rule is a victory for the states, agriculture, other interest groups, the court said "there is no compelling showing that any of the petitioners will suffer immediate irreparable harm in the form of interference with state sovereignty, or in unrecoverable expenditure of resources as they endeavor to comply with the new regime -- if a stay is not issued pending determination of this court's jurisdiction.

"But neither is there any indication that the integrity of the nation's waters will suffer imminent injury if the new scheme is not immediately implemented and enforced."

American Farm Bureau Federation President Bob Stallman said in a statement Friday the plaintiffs would ultimately win in court. Despite the court's decision, Stallman called on Congress to pass legislation to change the rule.

"The American Farm Bureau Federation is pleased the Sixth Circuit recognizes that this rule has serious flaws and cannot go forward until the courts have had an opportunity to understand its effect on farmers, ranchers and landowners of all kinds," he said.

"The judges expressed deep concerns over the basic legality of this rule. We're not in the least surprised: This is the worst EPA order we have seen since the agency was established more than 40 years ago. The court clearly understood our arguments.

"We are confident that the courts will strike down this rule. Unfortunately, we also know stays don't last forever, and cases like this almost always take years to win. So we again ask the Senate to pass legislation to nullify this rule just as the House has already done. Farmers and ranchers cannot afford to wait."

Philip Ellis, National Cattlemen's Beef Association president, said the court's action was good news for farmers and ranchers.

"This is great news for cattlemen and women and all land users who have been at a loss as to how to interpret this rule," he said in a statement. "A stay by the court has the same effect as an injunction, and this action prevents the EPA and Army Corps from implementing this disastrous rule across the country. In granting the stay, the majority of the court sided with the states that the rule likely fails on both substantive and procedural grounds."

Sen. Jim Inhofe, R-Okla., and chairman of the U.S. Senate Environment and Public Works Committee, said in a statement Friday he believes the court ultimately will strike down the rule.

"The EPA and Army Corps admitted in February before Congress that the proposed rule was flawed and ambiguous, yet the agencies continued forward and finalized the rule in May," he said.

"Instead of fixing the overreach, EPA made it broader. In issuing the stay, the court determined that 'petitioners have demonstrated a substantial possibility of success on the merits of their claims.' This means that the court is likely to overturn the rule."

Todd Neeley can be reached at

Follow him on Twitter @ToddNeeleyDTN


DTN Distillers Grain Weekly Update

Fri. Oct 09, 2015 7:45 AM

By Cheryl Anderson
DTN Staff Reporter

OMAHA (DTN) -- The Food Safety Modernization Act is described by the U.S. Food and Drug Administration as "the most sweeping reform of our food safety laws in more than 70 years." With a lengthy list of new rules and regulations, FSMA has many implications for the feed and grains industry as well as ethanol producers.

The rules were recently finalized by FDA and will apply to any domestic or foreign facilities that manufacture, process, pack or store human food, animal feed or pet food.

The final rule, published in the federal register on Sept. 17, contains current good manufacturing practices for all eligible facilities, as well as preventive controls for both human food and animal feed. Two additional rules -- the Foreign Supplier Verification Program rule and the Sanitary Transportation of Food and Feed Rule -- will be issued by Oct. 31 of this year, and by March 31, 2016, respectively.

The final rule is more than 600 pages long; however, David Fairfield, vice president of feed services for the National Grain and Feed Association, summarized some of the implications for the feed industry in a recent webinar hosted by the National Grain and Feed Association.

The rule mandates new training and qualification requirements for employees in human food and animal feed facilities, such as adequate education and training necessary for duties, as well as training in animal feed hygiene and safety, employee health and personal hygiene. Training must be given before employees can work in production operations, and must include periodic refresher training. Training records must be maintained for two years.

Eligible facilities must meet requirements for maintenance, cleanliness and pest control. Also, water supply, plumbing design and garbage control/disposal must be adequate for the facility's operation and safety.

Raw materials not used in animal feed (such as fertilizers and pesticides) must be stored in an area separate from where feed is manufactured, processed or exposed. Also, raw materials must be examined before processing to prevent contamination and minimize deterioration.

A number of regulations regarding holding and distribution include requirements that shipping containers and bulk vehicles must be examined prior to use to prevent contamination. Feed returned from distribution must be identified and segregated until assessed for safety.

Exemptions from current good manufacturing practices include operations solely engaged in holding and/or transporting raw agricultural commodities (such as grain elevators); establishments solely engaged in holding, processing or packing of nuts and hulls; or establishments solely engaged in ginning of cotton. "Holding" includes any activities involved with storage or distribution of food, such as drying, treating, weighing, blending, sampling or grading grain.

Hazard analysis and risk-based preventive controls require development and implementation of a written animal feed safety plan, including a written hazard identification and analysis for all "known or reasonably foreseeable hazards." The new rule details management activities for hazards requiring a preventive control, such as monitoring, time frames for corrective actions, recall plans, etc.

Animal feed safety plans must be developed and overseen by a qualified employee who has completed training equivalent to standardized curriculum recognized by FDA or is qualified through job experience to develop and apply a feed safety system.

Exempted from the preventive controls rule are farms, facilities solely engaged in the storage of raw agricultural commodities (other than fruits and vegetables) intended for further distribution or processing, and facilities solely engaged in storage of packaged animal food that does not require time/temperature controls.

The supply-chain program rule applies to any covered facility that has identified a hazard requiring a preventive control that relies on its suppliers to control the hazard. Such facility must have written procedures for such activities as receiving raw materials or ingredients only from approved suppliers, audits, sampling and testing, etc.

The list of who is exempt from the supply-chain program is similar to the exemptions for Preventive Controls, with the addition of facilities that do not identify a hazard requiring a preventive control, and facilities that do identify a hazard requiring a preventive control, but choose not to rely on the supplier to control the hazard.


A second webinar was held recently to address the implications of the FSMA rules on ethanol plants. Since FSMA rules apply to any facility that handles domestic or imported feed for animals, ethanol plants that process dried, wet or modified distillers grains or corn distillers oil must comply.

Many of the same rules that govern grain and feed operations also apply to ethanol plants. However, of particular concern for ethanol plants are the rules regarding chemical, microbial or other testing used to detect mycotoxins, such as aflatoxin, deoxynivalenol, fumonsin and zearalenone that can appear in corn and are concentrated in the resulting distillers grains.

Richard Coulter, senior vice president, scientific and regulatory affairs for Phibro Animal Health Corp., said that FSMA will not affect the legal requirements for processing aids in ethanol production, for generally recognized as safe (GRAS) feed ingredients such as yeast, enzymes, water treatment and anti-microbials.

Ethanol plants must have infection control programs, as well as plans for assessing and managing residues from control products such as antibiotics. Even though no management or hazard classification strategy is being mandated by FDA, Coulter said plants must have a strategy for mycotoxins for incoming grain, including anticipating risks such as weather, testing new crop more frequently and retaining DDGS samples.

He added that preventive controls for mycotoxins should include a monitoring program for incoming grain and a validation program for outgoing products, and that all strategies, protocols and test results should be documented and readily available.


The compliance dates for current good manufacturing practices and preventive controls for small businesses (fewer than 500 full-time employees) are Sept. 18, 2017, for CGMP and Sept. 17, 2018, for preventive controls. The compliance dates for very small businesses (generating less than $250,000 for the previous three years) are Sept. 17, 2018, for CGMPs and Sept. 17, 2019, for preventive controls. Compliance dates for all other businesses are Sept. 19, 2016, for CGMPs and Sept. 18, 2017, for preventive controls.

For the supply-chain program, the receiving facility's supplier is required to comply with the CGMP requirements by Sept. 18, 2017, or six months after the receiving facility's supplier of that raw material or other ingredient is required to comply with the applicable rule, whichever is later.


The U.S. Food and Drug Administration has created the Food Safety Preventive Controls Alliance to develop training courses and technical information to help small- and medium-sized companies comply with the new preventive controls rules mandated by FSMA.

The FSPCA consists of government officials, academic and industry representatives that will develop standardized hazard analysis and preventive controls training and education modules, as well as assisting FDA in developing industry specific guidelines.

For more information, visit the FSPCA section of the FDA website:…

To read the NGFA summary of the final rule, visit the NGFA's website:…

Cheryl Anderson can be reached at



CoBank Report: Ethanol Margins Dependent on Distillers, Ethanol Prices

A recent report by CoBank predicts that the U.S. ethanol industry may experience only thin profit margins in 2015-2016, and that those profits may depend on prices of ethanol and distillers grains, according to a news release on the CoBank website (…).

The report, titled "Ethanol Industry Rebalances," examined the changing dynamics in the ethanol marketplace. After ethanol prices and plant margins plummeted in the last half of 2014, the industry rebalanced itself in 2015, keeping ethanol supply and demand well-balanced with positive earnings.

In the coming year, plants will likely experience positive and negative shifts, but should have thin profits, according to the report.

Corn prices are predicted to be fairly stable, but the prices of ethanol and distillers grain will dictate profits, according to Dan Kowalski, author of the report and director of CoBank's Knowledge Exchange Division.

Prices of distillers grains have been on a downward trend since mid-July, due largely to sluggish export demand, as well as slow domestic demand. However, the falling prices have resulted in improving the value of distillers grains relative to corn, which is prompting livestock producers to increase the inclusion rate of distillers in their rations.

"Ethanol profitability will largely hinge on two key factors: the volatility of energy prices and the industry's ability to maintain strong export sales," said Kowalski.

The report also warns that foreign markets could pose a risk, as China is expected to change policies which would discourage imports of corn-alternative feed grains such as distillers grains. China has been the largest buyer of U.S. distillers grains, so a cut in exports to China could present significant challenges to ethanol profits.

Cheryl Anderson can be reached at



COMPANY STATE 10/9/2015 10/2/2015 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $135 $148 -$13
Modified $65 $65 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $128 $130 -$2
Indiana Dry $115 $115 $0
Iowa Dry $110 $110 $0
Michigan Dry $122 $120 $2
Minnesota Dry $115 $115 $0
North Dakota Dry $115 $115 $0
New York Dry $160 $160 $0
South Dakota Dry $115 $115 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $125 $125 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $120 $125 -$5
Iowa Dry $110 $115 -$5
Michigan Dry $125 $130 -$5
Minnesota Dry $108 $110 -$2
Missouri Dry $125 $130 -$5
Ohio Dry $125 $130 -$5
South Dakota Dry $108 $110 -$2
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $130 $130 $0
Wet $50 $50 $0
Illinois Dry $136 $136 $0
Nebraska Dry $130 $130 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $120 $120 $0
Indiana Dry $115 $115 $0
Iowa Dry $105 $105 $0
Michigan Dry $115 $115 $0
Minnesota Dry $100 $100 $0
Nebraska Dry $115 $115 $0
New York Dry $140 $140 $0
North Dakota Dry $115 $110 $5
Ohio Dry $115 $115 $0
South Dakota Dry $105 $105 $0
Wisconsin Dry $115 $120 -$5
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $115 $110 $5
Iowa Dry $100 $105 -$5
Minnesota Dry $100 $105 -$5
Nebraska Dry $115 $110 $5
Ohio Dry $125 $125 $0
South Dakota Dry $100 $100 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $180 $180 $0
*Prices listed per ton.
Weekly Average $116 $118 -$2
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.

If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail


Settlement Price: Quote Date Bushel Short Ton
Corn 10/8/2015 $3.9125 $139.73
Soybean Meal 10/8/2015 $303.80
DDG Weekly Average Spot Price $116.00
DDG Value Relative to: 10/9 10/2 9/27
Corn 83.02% 84.99% 89.54%
Soybean Meal 38.18% 39.00% 40.34%
Cost Per Unit of Protein:
DDG $4.64 $4.72 $4.88
Soybean Meal $6.40 $6.37 $6.37
Corn and soybean prices taken from DTN Market Quotes. DDG
price represents the average spot price from Midwest
companies collected on Thursday afternoons. Soybean meal
cost per unit of protein is cost per ton divided by 47.5.
DDG cost per unit of protein is cost per ton divided by 25.




Dried Modified Wet
Iowa 105.00-120.00 45.00-65.00 35.00-40.00
Minnesota 110.00-125.00 60.00 34.00-40.00
Nebraska 115.00-135.00 62.00-70.00 45.00-55.00
South Dakota 108.00-115.00 55.00-66.00 38.00-43.00
Wisconsin 120.00-145.00 53.00-60.00 NQ
Eastern Corn Belt 117.00-145.00 55.00-62.00 NQ
Kansas 135.00-160.00 NQ 45.00-65.00
Northern Missouri 125.00-140.00 NQ 40.00-42.00
CIF NOLA 154.00-161.00
Pacific Northwest 168.00-175.00
California 165.00-172.00
Texas Border (metric ton) 185.00-200.00
Lethbridge AB 145.00
Chicago 128.00-140.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture


Distillers Dry Grains

  Rail to California Points        172.00           dn 2.00
  FOB Truck to California Points   175.00-186.00    unch-up 11.00


Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were steady to 2.00 lower from 169.00-180.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady to 2.00 lower from 187.00-195.00.

*All prices quoted per ton unless otherwise noted.



Dry and Wet Mill, Co-products and Products Produced - United States

June 2015 - August 2015

Sep 1, 2015


Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.94 million tons during August 2015, down 3 percent from July 2015 and down 2 percent from June 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.15 million tons in August 2015, up 1 percent from July 2015 and up 1 percent from June 2015.

Wet mill corn gluten feed production was 343.5 thousand tons during August 2015, up 3 percent from July 2015 and up 7 percent from June 2015. Wet corn gluten feed 40 to 60 percent moisture was 290.7 thousand tons in August 2015, down 8 percent from July 2015 and down 5 percent from June 2015.

Co-products and Products May 2015 Jun 2015 Jul 2015
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 145,244 149,927 155,218
Corn oil 120,582 125,497 121,810
Distillers dried grains (DDG) 407,259 450,829 452,969
Distillers dried grains with solubles (DDGS) 1,976,508 2,000,851 1,943,205
Modified distillers wet grains (DWG) <65% moisture 1,136,491 1,137,600 1,151,047
Modified distillers wet grains (DWG) 40-64% moisture 367,092 350,460 341,837
Wet Mill
Corn germ meal 63,188 68,528 66,563
Corn gluten feed 321,209 333,828 343,476
Corn gluten meal 92,237 97,130 96,072
Corn oil 51,281 53,364 52,514
Wet corn gluten feed 40-60% moisture 214,995 225,675 217,778



CO-PRODUCT OUTPUTS (metric tons)
Week Ending Distillers Grains Corn Gluten Feed Corn Gluten Meal Total Feed Corn Oil (lbs.)
9/04/15 94671 9787 1812 106270 5635945
9/11/15 94967 9818 1818 106603 5653594
9/18/15 92695 9583 1775 104052 5518284
9/30/15 93189 9634 1784 104606 5547700

*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (…)




*Distillers Grains Technology Council

*National Corn Growers Association Corn Distillers Grains Brochure…

*Iowa Corn…

Nebraska Corn Board…

*Renewable Fuels Association - Ethanol Co-Products…

*American Coalition for Ethanol…

*U.S. Grains Council…

*South Dakota Corn Utilization Council

Government Sites

*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts

University Sites

*University of Minnesota - Distillers Grains By-Products in Livestock

and Poultry Feed

*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site…

*University of Nebraska - Beef Cattle Production By-Product Feeds site…

*University of Nebraska Extension…

*Iowa Beef Center - Iowa State University…

*University of Missouri - Byproducts Resource Page…

*South Dakota State University - Dairy Science Department - Dairy cattle research…

(select "Distillers Grains" from the topic menu)

*Purdue University Renewable Energy Web Site…

(select "Biofuels Co-Products from the menu)



If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).


We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183, or e-mail


USDA Reports Preview

Thu. Oct 08, 2015 5:28 PM

By Darin Newsom
DTN Senior Analyst

OMAHA (DTN) -- The most shocking thing about the October Crop Production and Supply and Demand reports would be if USDA's numbers are outside pre-report ranges.

USDA will release the two reports at 11 a.m. CDT Friday.


Let's start this preview by looking at soybeans, not because the world will be paying attention but because those providing pre-report estimates had a hard time guessing where USDA might go next with its always fluid view of soybean production and supply and demand. Notice that the range for 2015-2016 ending stocks runs from a high of 511 million bushels to 125 mb as compared to USDA's September estimate of 450 mb. Forget Pin The Tail On The Donkey, this is a game of Pin The Tail On The Continent, most notably Asia. If USDA misses this range, some sort of investigation should be immediate in coming.

If we just go with the average pre-report estimate of 398 mb, analysts would be looking for a 52 mb decrease from USDA's September guesstimate. Notice that this is roughly equivalent to the expected change in production from September's 3.935 billion bushels to the pre-report average of 3.884 bb. What then of USDA's reduced beginning stocks (old-crop ending stocks) of 19 mb, the difference between USDA's September estimate (210 mb) and its expected surprise reduction to 191 mb quarterly stocks figure from Sept. 30? Either pre-report guessers forgot about this adjustment, or another reduction in total demand is expected. Recall that the July report pegged total demand at 3.745 bb, the August report at 3.717 bb, and the September at 3.725 bb.

World ending stocks are also expected to dip slightly, most likely a reflection of the slight reduction in U.S. production. The bottom line in soybeans is, as usual, nobody knows what move USDA is going to make with domestic numbers.


Though USDA's corn numbers are rarely as entertaining as its soybean guesses, King Corn usually gets the headlines. Truth be told, it's probably fair given that there at least seems to be an attempt at realistic numbers from USDA regarding corn, usually. With that in mind, pre-report estimates for U.S. ending stocks averaged 1.498 bb, down 94 mb from USDA's September estimate of 1.592 bb. With production expected to decrease 124 mb, an average pre-report estimate of 13.461 bb compared to September's 13.585 bb, a decrease in total domestic demand would be implied.

However, attention should still be paid to old-crop ending stocks. Though USDA's quarterly stocks figure came in at 1.731 bb, nearly unchanged from its September estimate of 1.732 bb, further adjustments could be made in old-crop exports that appeared (according to USDA's own weekly export sales totals) to come up short of the projected 1.875 bb.

As for world ending stocks numbers, pre-report estimates averaged 189.2 million metric tons, down slightly from September's WASDE figure of 189.7 mmt. As with soybeans, this adjustment would most likely be due to the slight revision in U.S. production, with the world's other two largest producers (China and Brazil) expected to see unchanged figures.


Wheat always seems to take a backseat to corn and soybeans, particularly this time of year. However, this month's new-crop ending stocks guess from USDA could prove to be interesting, given the wide range from 896 mb to 765 mb as compared to the September figure of 875 mb. The pre-report average came in at 821 mb, leading to the question of where those 54 mb went. Could it be larger exports? Unlikely, though a continued downtrend in the U.S. dollar index and Russia's activity in the Middle East might raise hopes (there's that word again) of increased interest in U.S. supplies.

The safest bet is that pre-report estimators are anticipating USDA to incorporate its own reduction of 84 mb of production from the August monthly report to the Sept. 30 small grains summary. If so, then the implication would be that demand is expected to be reduced by about 30 mb, a likely scenario given the pace set over the first third of the 2015-2016 marketing year (USDA's total shipments are running 18% behind last year as opposed to USDA's September estimate of a 5% year-to-year increase).

World ending stocks for 2015-2016 are also expected to be reduced, the average pre-report estimate coming in at 224.7 mmt compared to the September WASDE figure of 226.6 mmt. While most of this is expected to come from the reduction in U.S. production, keep an eye on the estimates for the world's other two largest wheat producers, the European Union and the 12 nations of the former Soviet Union. Both saw increased production estimates from August to September, most notably the 6.31 mmt for the European Union.

Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT on Friday for a discussion on the latest USDA reports. Sign up now at:….

U.S. CROP PRODUCTION (Million Bushels) 2015-16
Oct Avg High Low Sep 2014-15
Corn 13,461 13,798 13,050 13,585 14,216
Soybeans 3,884 3,989 3,590 3,935 3,927
Grain Sorghum 569 578 560 574 433
U.S. AVERAGE YIELD (Bushels Per Acre) 2014-15
Oct Avg High Low Sep 2014-15
Corn 166.4 169.6 161.0 167.5 171.0
Soybeans 46.9 48.0 43.0 47.1 47.5
U.S. HARVESTED ACRES (Million Acres) 2014-15
Oct Avg High Low Sep 2014-15
Corn 80.9 81.4 80.5 81.1 83.1
Soybeans 82.9 84.0 82.2 83.5 82.6
U.S. ENDING STOCKS (Million Bushels) 2015-16
Oct Avg High Low Sep 2014-15
Corn 1,498 1,750 1,130 1,592 1,731
Soybeans 398 511 125 450 191
Grain Sorghum 39 42 36 41 18
Wheat 821 896 765 875 753
WORLD ENDING STOCKS (Million Metric Tons) 2015-2016
Oct Avg High Low Sep 2014-15
Corn 189.2 193.0 181.7 189.7 197.2
Soybeans 84.6 86.5 82.0 85.0 78.7
Wheat 224.7 226.5 221.5 226.6 211.3
WORLD PRODUCTION (Million Metric Tons)
2015-16 2014-15
Oct Sep Oct Sep
FSU - 12 wheat 117.0 112.7
European Union wheat 154.1 156.5
China corn 225.0 215.7
Brazil corn 79.0 84.0
Brazil soybeans 97.0 94.5
Argentine soybeans 57.0 60.8

Darin Newsom can be reached at


RFS Doubt Stifles Farms

Thu. Oct 08, 2015 5:27 PM

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- If there's any question about what the Renewable Fuel Standard means to the rural economy, just wait a few weeks from now when the U.S. Environmental Protection Agency is expected to announce final volumes for three years.

That announcement could yield almost immediate market effects, Chip Bowling, president of the National Corn Growers Association, told reporters Thursday during a conference call.

"If the EPA raises numbers a little (compared to proposed numbers), you will see an increase in commodity prices," he said. "The uncertainty put in by a lack of annual volumes was critical in determining how the U.S. ag economy will fair."

Waning federal support for the RFS is a key reason why farm income in the United States is expected to hit its lowest level in about a decade and investment in advanced biofuels is slowing, according to a new white paper released Thursday by NCGA and the National Farmers Union.

The groups point to EPA's retreat from the federal mandate requiring a certain volume of biofuels to be blended in the nation's gasoline supply as one major reason the farm economy is struggling.

"The U.S. Renewable Fuel Standard, which has driven sustainable growth in renewable fuel for a decade and is the only federal law on the books directly targeting climate change, is under dire threat by the Environmental Protection Agency," the white paper said.

The groups point to new USDA data forecasting a decline in 2015 net cash income for American farmers.

"That devastating forecast is worse than originally projected, and it represents the lowest farm income levels in nearly a decade, and it could get worse," the groups said in their analysis.

"This year started off bad enough for farmers. In February, the Congressional Research Service called the 'lack of annual renewable fuel volume percentage standards for 2014 and 2015' by the Obama administration a 'key uncertainty' that was 'crucial in determining how the U.S. agricultural economy will fare.' Now, we see the results of that uncertainty."

NFU President Roger Johnson said during the press conference the RFS isn't the only reason for lower commodity prices and farm incomes.

"Obviously, stocks are hanging over the market," he said, "but the RFS is the principal factor that has driven demand."


The boom years of the past decade featured expanded markets for corn, mostly created by increased demand for corn for ethanol. USDA projects 2015 net cash income will decline by $35 billion from the 2013 peak. Net farm income for 2015 is projected at $58.3 billion compared to the record level of $123.7 billion in 2013, according to the group's analysis. That would place net farm income at its lowest since 2006.

The white paper said the enactment of the RFS in 2005 and its expansion in 2007 sparked innovation by U.S. corn farmers.

"The result encouraged the rapid growth of the U.S. ethanol industry, and produced both an increased supply of renewable transportation fuel and co-products to add to America's livestock feed supply," the groups said. "However, the current level of uncertainty in this market threatens these valuable investments in innovation and growth."


USDA projects 2015 cash corn receipts will be off by more than $25 billion from a record 2012 showing, including more than a $7 billion decline from 2014.

"Considering all U.S. crop cash receipts are projected to be down about $34 billion since 2012 and nearly $13 billion compared to 2014, it is easy to see why so many farmers so strongly support the RFS," the white paper said. "It has been the most significant growth factor for agriculture since its inception in 2005."

The analysis touts how the expansion of corn and ethanol production has benefitted other sectors of the agriculture economy.

The analysis said about one-third of each 56-pound bushel of grain used to produce ethanol returns to the animal feed market through dried distillers grains, corn gluten feed and gluten meal.

According to the analysis, in 2014 the renewable fuels sector became "one of the top animal feed processing segments in the country. It produced about 39 million metric tons of feed, or the equivalent would provide every American with a normal-sized chicken breast every day for a year.

"The agricultural economic revolution spawned by the renewable fuel industry helped raise farm incomes across nearly all agricultural sectors while creating jobs in rural communities," the white paper said.

"...Unfortunately, the EPA is failing farmers, rural communities, our environment, and economic security by refusing to fulfill its responsibilities to administer the RFS consistent with its statutory obligations."

The groups said EPA's proposal to reduce RFS volumes not only hurts farm income, but has "frozen investment in rural communities and new income streams for farmers related to advanced and cellulosic biofuels just as these products are finding their footing.

"The enhanced greenhouse gas and economic benefits of advanced biofuels cannot be realized without strong policy support. This new industry has experienced a $13.7 billion shortfall in investment due to uncertainty around the RFS. That means new plants and jobs won't be created in rural communities and lost markets for crop residues and other feedstocks, cutting off long-term potential for supplemental farm income.

"The EPA is causing uncertainty throughout the whole renewable fuel and agriculture value chains putting American jobs, innovation and investments at risk, and undermining the social and economic fabric of rural America."

Todd Neeley can be reached at

Follow him on Twitter @ToddNeeleyDTN


Ag, Forestry Want Webinar Info

Thu. Oct 08, 2015 2:59 PM

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Despite public claims by the U.S. Environmental Protection Agency that it reached out to agriculture groups on the new waters of the United States rule, a number of groups continue to seek information about how the new rule will affect farmers and ranchers.

This week a number of ag and forestry groups asked EPA and the U.S. Army Corps of Engineers to share information generated from a non-public webinar for state regulators. In that Sept. 17, 2015, webinar, the federal agencies answered more than 20 different questions about how state regulators are to interpret the new rule in the field.

So far, the answers to those questions have not been made public, according to a letter sent Tuesday to EPA Administrator Gina McCarthy and Secretary of the Army John M. McHugh.

The groups, including the American Farm Bureau Federation, National Corn Growers Association and others, tell McCarthy and McHugh the industries still are trying to sort out what the rule will mean to their members. Some 30 states have sued the federal government, attempting to stop the rule in numerous cases pending in several federal courts. Right now the rule doesn't apply to 13 states where a court injunction is in effect.

"The undersigned organizations represent or work with farmers, ranchers and foresters who are struggling to understand the practical implications of the final rule defining 'Waters of the United States' (WOTUS) under the Clean Water Act," the groups write in a letter.

"Non-state agency personnel were not invited to participate. For the reasons cited below we ask that you promptly release publicly the answer that your agencies provided at the webinar to these and any other questions that were addressed. Furthermore, as additional webinars on other final rule implementation topics are held, we ask that your agencies' answers to those questions also be made public immediately.

"Not just the regulators, but the regulated public, have a need to know how your agencies interpret the rule. Our members are deeply concerned that as a result of this final rulemaking, effective today in 37 states, they now have drainage and water features on their properties that are categorically WOTUS. If this is the case, our members know that they are subject to serious civil and even criminal federal liabilities for point source discharges into those features."

DTN filed a Freedom of Information Act request with EPA in May asking for a variety of materials documenting communications between EPA and agriculture interest groups and farmers. The request still is pending.

Other ag and forestry groups asking for the webinar information include the American Forest and Paper Association, American Soybean Association, American Sugar Beet Growers Association, American Sugar Cane League, CropLife America, Forest Landowners Association, Forest Resources Association, Hardwood Federation, National Alliance of Forest Owners, National Cattlemen's Beef Association, National Cotton Council, National Council of Farmer Cooperatives, National Pork Producers Council, and the Virginia Agribusiness Council.

The webinar in question covered a variety of topics such as what is the difference between ditches and canals, how to know if ditches were constructed in dry land, what definitions of 'ephemeral,' 'intermittent,' and 'perennial flow regime' will be used in determining ditch exclusions, and whether there is guidance for onsite determinations of that nature, according to the letter.

Other questions addressed in the webinar are how the agencies will determine whether ditches that have been in place for decades are relocated tributaries or are excavated in tributaries, and whether permitted discharges into these ditches must be designed to meet water quality standards in the ditch or in the receiving water.

"Liability may be imposed even if the landowner does not know that the features involved are WOTUS," the groups write. "There is a fundamental fairness problem with communicating to the regulators but not to the regulated community that will bear the liabilities on the finer points of how to identify WOTUS under the rule."

The groups said answers provided to the state regulators would "be vitally helpful to our members to help reduce their confusion and uncertainty and make informed business decisions about whether and how their operations need to change to avoid discharges in violation of the Clean Water Act.

"We believe your agencies have an obligation to provide this information to the public. Whatever answers and guidance have been provided to assist state agency personnel would be equally useful to the regulated community and should be easy to share."

The letter to McCarthy and McHugh:…

Todd Neeley can be contacted at

Follow him on Twitter @ToddNeeleyDTN


Cash Market Moves

Wed. Oct 07, 2015 3:35 PM

By Mary Kennedy
DTN Cash Grains Analyst

A variety of quality issues in the U.S. soft red winter crop -- including low falling numbers and vomitoxin -- have led to a wide basis spread in cash prices available at domestic mills versus export terminals or feed users.

Soft red winter wheat (SRW) accounts for 15% to 20% of total U.S. production and is grown primarily in the eastern U.S. and in states along the Mississippi River, according to USDA. Flour produced from milling SRW is used in the United States for cakes, cookies, and crackers. China, Brazil and Egypt are among the countries that favor SRW.

SRW is a versatile weak-gluten wheat with excellent milling and baking characteristics, but the U.S. crop this year was not milling quality on average due to poor weather during the growing season and at harvest. The final grade for the 2015 crop reported by U.S. Wheat Associates (USW) was #3 SRW, 11.3% protein, with test weight of 56.9, 3.4% damage and 4.1% total defects. One of the biggest issues with the new crop is pockets of vomitoxin (DON) and poor falling numbers. Falling number indicates how much sprouting or pre-harvest germination was happening in the wheat being tested.

Vomitoxin (DON), is a mycotoxin that infects grain heads when wet weather occurs during the flowering and grain-filling stages of plant development. The FDA advisory for finished wheat products, such as flour, bran and germ that potentially may be consumed by humans, is set at 1 part per million, which makes it more strict for mills when buying.

"Commercial millers are expressing concerns about long-term sourcing of this year's crop with acceptable falling number values and DON results," USW noted. "Blending with old-crop wheat is resulting in wheat with acceptable falling number value currently, but as we move through the crop year, low falling number values could present challenges. The new crop appears to be milling satisfactorily to date for those millers contacted, and they have been able to meet customers' specifications with little negative feedback regarding flour functionality."

Helen Pound, commodity specialist and vice president for Wedbush Securities Inc., Futures Division told DTN via email, "There is a multi-tier market for soft red winter wheat due to large quality differences for SRW grown in different regions. Mills that are not able to source 'milling quality' in their traditional drawing area are forced to pay a high basis 'transportation premium' to draw SRW from great distances. This creates a dramatic difference in prices paid for soft red winter wheat for mills versus for export or for feed. For example, in St Louis the highest bid by a mill is +45 WZ [45 over the Chicago December contract] while the bid by elevators is 85 cents less at -40 WZ. This situation is also apparent in the +30 WZ Toledo mill bid as compared to the Cincinnati elevator bid at -30 WZ."

Another issue is the mixed quality of the SRW delivery stocks. "There is variable quality in SRW stocks located in Toledo futures delivery terminals," said Pound. "Note that there have been WU [Chicago September] futures deliveries in Toledo even though the mill basis is well over futures delivery value (plus load-out and transportation costs). This suggests the quality of this grain is above 'delivery grade' but below 'milling quality.' This could be due to any grading factor, but may be due to small amounts of vomitoxin."

According to Pound, there are also regions where there are large inventories of "deliverable" as well as "non-deliverable" SRW along the Ohio River and the Lower Mississippi River. "Note that there have been Chicago September wheat futures deliveries in these regions that have not yet been moved out. This would seem to indicate that these stocks will remain in storage until after the row-crop harvest is complete and barge transportation into the export market is cheaper. It would seem that the non-deliverable SRW stocks will stay in storage until they can be priced into the feed market."

Mary Kennedy can be reached at

Follow her on Twitter @MaryCKenn


Harnessing Drones

Wed. Oct 07, 2015 2:03 PM

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Congress recently has focused on the need to secure airports from unmanned aerial vehicles as reported near-misses with commercial airliners have been growing in frequency. But a House committee Wednesday grilled a Federal Aviation Administration official on continued delays in implementing UAV regulations and exemptions.

In particular, some representatives from rural areas raised questions about the state of exemptions granted to companies that wish to operate drones before federal regulations are completed. The FAA was required by law to set regulations by September 2015. A federal official testified that the FAA now is on target to complete regulations for UAVs 55 pounds and lighter by June 2016.

A number of companies wish to launch a variety of commercial UAV applications in agriculture in particular and have been allowed to do so through exemptions.

The House Transportation and Infrastructure Committee questioned a panel of experts Wednesday on how to protect manned aircraft from UAVs operating around airports. Rep. John Garamendi, D-Calif., has offered legislation that would restrict the use of UAVs within 2 miles of airports.

In addition, with harvest well underway in some parts of the country, Rep. Todd Rokita, R-Ind., said he was concerned current FAA exemptions for using drones allow for only daytime operations.

"Farmers may want to be in the field soon," he said. "In a farm field they (drones) can be used around the clock."

Michael G. Whitaker, deputy administrator of the Federal Aviation Administration, said farmers who use drone technology at night during harvest "could be allowed by exemption" to do so.

Rep. Rodney Davis, R-Ill., said while the FAA's exemption process has allowed companies to proceed with the commercial use of UAVs, the exemption process hasn't been fast enough.

"Part of my concerns have to do with the exemption process moving slowly," he said. "Now that it has sped up, the older requests are limited versus the new requests, based on technology improvements. There might be some concern that older exemptions should have flexibility similar to newer."

As of Sept. 30, 2015, FAA had granted 1,742 petitions for what is known as a FAA Modernization and Reform Act of 2012, Section 333 exemption, according to data from FAA's website.

By law, aircraft operation in national airspace requires certified and registered aircraft, a pilot license and operational approval.

According to FAA (…) a number of companies including agriculture precision and scouting companies already have been granted Section 333 exemptions.

Much of the committee hearing focused on what aviation officials said Wednesday is a growing number of close calls airliners and other planes have had with UAVs. The hearing comes just one day after the FAA fined a company in New York about $2 million for improperly flying drones in restricted airspace.

Rep. Michael E. Capuano, D-Mass., said the FAA needs to take steps to protect airspace before it's too late.

"Doing nothing is not an excuse," he said. "I see a reluctance to do something, especially the FAA. Do something before someone loses their life. Just get it done. Something is always better than nothing in the face of a known danger."

Whitaker said FAA is attempting to provide much-needed education about the safe use of drones in two recently launched public campaigns.

FAA developed the "Know Before You Fly" and "No Drone Zone" programs. The first is a public-relations campaign aimed at what Whitaker said is conveying "commonsense advice" including don't fly near airports, don't fly in adverse weather, don't fly under the influence of alcohol or drugs, and don't fly over people or sensitive infrastructure such as power plants.

The second campaign launched during the most recent Super Bowl game earlier in 2015 includes a video posted on YouTube that received more than 59,000 hits.

"Most importantly, we received no reports of unauthorized activity in the restricted airspace around the stadium," Whitaker said in his written testimony.

"We want people to enjoy their hobby, but we want to make sure they fly safely. Education, such as the programs noted above, has been our preferred method for successfully integrating UAS operators. We can never let an educational opportunity slip by. We need to be creative and collaborative in our approach to reaching the public."

Todd Neeley can be reached at

Follow him on Twitter @ToddNeeleyDTN


Disparity in ARC Payments

Wed. Oct 07, 2015 9:54 AM

By Marcia Zarley Taylor
DTN Executive Editor

LOUISVILLE, Ky. (DTN) -- When USDA issues an estimated $3.5 billion in farm program checks for the 2014 crop to corn growers later this month, policymakers should brace for a torrent of complaints between the have nots and the haves.

Growers were warned that payments would vary based on county revenue formulas, but the disparity may catch some off guard. In parts of Texas, for example, growers in one county will collect about $109 per base corn acre, while those in a county next door will collect nothing. In Nebraska, some checks will run $20 an acre, others closer to $80 an acre. Similar situations are cropping up in Kansas, Iowa and Illinois, in large part because of the local variation in 2014 yields, policy experts report. In parts of Oklahoma, USDA may have had difficulty establishing county wheat yields, since farmers often graze fields rather than completing harvest, others theorize.

"In the past, Loan Deficiency Payments were the only farm program payment I can think of where checks varied by counties," said Dee Vaughan, a former National Corn Grower Association president and Dumas, Texas, grower. "But that amount varied by only a few dollars per acre, not by $100 an acre."

The shift to county-based calculations for the new farm safety net highlights how aid is supposed to be targeted to those in need. For most producers, it means bumper 2014 county yields offset the decline in prices, so they won't meet the threshold for farm payments. But for farmers who operate in more than one county, this bureaucratic technicality has become a sore point.

At issue is that program payments will be determined by your "administrative" county Farm Service Agency (FSA) office. For growers with farms in multiple counties, that rule means Agricultural Risk Coverage-County checks will not be paid at county rates where the ground is located but where records are housed.

All of Nebraska farmer John Oehlerking's 1,600-acre Nebraska farmland will be paid at the Otoe County rate even though half of his land is located in Cass County where other farmers are being paid at a much higher rate. The difference could be up to 50% more, although FSA has not released final calculations yet, he said.

"It is perplexing to me why my Cass County ground should be penalized, just because of where I sign my papers," Oehlerking told DTN. "Had I chosen to do all my paperwork in Cass County, I would have had a windfall."

Payments in Cass County are projected to be close to $50 an acre for corn while projected payments in Otoe County are projected at $18 an acre.

Underpaying some land and overpaying others makes little sense. But when Oehlerking contacted his FSA office "they were polite but they basically said, 'We don't like it either, but there is nothing we can do about it, so contact your elected officials,'" he said.

Iowa corn growers first noticed the discrepancy last winter, but the last-minute remedy they were able to secure in the FSA handbook only allowed farmers to change administrative offices due to a county FSA office closure or consolidation. Even then, farmers were required to designate a new office by Sept. 25 for 2014 payment purposes.

"FSA communicated this change in April. However, I am not aware of any direct outreach to individual farmers as they did on other farm program changes," said National Corn Growers Association's Sam Willett, who calls the experience one of the more frustrating issues encountered with implementation of the farm bill. FSA argued that paying farmers based on where the land was located, rather than where records were housed, would create an administrative nightmare.

"My understanding is that the complexity of their information and record systems made it very difficult for FSA to alter their procedures," Willett added.

Congress gave FSA enough flexibility to pay farmers based on the counties where their land is located, a House Agriculture Committee staffer told a group of agricultural economists this week in Louisville. Hopefully, there's a pathway there, he said. As a last resort, a farmer hurt by an FSA action has the right to ask for "equitable" relief.

Brad Lubben, a University of Nebraska economist who specializes in farm policy, said a formula for blending irrigated and non-irrigated acres may also contribute to some payment disparities. FSA determined that counties needed at least 25% irrigated production and 25% non-irrigated production to break irrigated and non-irrigated fields into separate county yields by farm practice.

Nebraska counties with high percentages of irrigated corn acres were much more likely to trigger 2014 ARC payments than dryland corn acres, Lubben said. That's because the non-irrigated farmers in 2014 had higher overall yields than their average yield used in the ARC formula. In situations where the 25% irrigation rule wasn't met, FSA blended irrigated yields and non-irrigated yields into a single county average, which may also skew results.

For growers with multiple county locations and underpaid due to the administrative ruling, Lubben said "an administrative appeal may be in order."

Marcia Taylor can be reached at

Follow her on Twitter @MarciaZTaylor


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