READ the NAFB’s National Ag News for Monday, September 19th…

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Farm Groups Want December Action on FSA Loans

Farm and banking groups spoke with congressional appropriators this week about using upcoming appropriations bills to give authority and funding for Farm Service Agency Loans to farmers. The Hagstrom Report said the 15 farm and banking groups feel a continuing resolution should be used to solve short term funding issues, while the upcoming omnibus appropriations bill could be used to help clear up a backlog of funding requests from fiscal year 2016. The appropriations bill could also be used to prepare for the expected rise in the number of loan applications next year because of the economic downturn in agriculture. “We realize time is short and the demands on appropriators are many, but there’s a crisis in farm country,” said Ferd Hoefner, Policy Director for the National Sustainable Agriculture Coalition. He said it should be easily fixed by giving FSA increased flexibility in the short term and a moderate increase in funding in the medium term to allow the agency to meet the growing credit demands from farmers. It will also allow the FSA to continue focusing on the needs of the next generation of agriculture as well.


WRDA Bill Clears Senate with On-Farm Storage Exemption

The Senate overwhelmingly approved the Water Resources Development Act this week by a 95-3 vote. Agri Pulse said the bill will pay for waterway improvement projects in 30 states, as well as projects to improve delivery systems for drinking water. The bill also includes an exemption for some farmers with above-ground fuel storage tanks from Environmental Protection Agency requirements to prepare spill-control plans. Nebraska Republican Deb Fischer inserted the storage tank provision in the bill to give farmers some relief from the EPA’s Spill, Prevention, Control, and Countermeasures requirements. Fuel storage tanks of 1,000 gallons or less, or an aggregate capacity of not more than 2,000 gallons would be exempt from the rules. Containers that hold animal feed ingredients would also be exempt. Fischer said, “Most agricultural producers live miles away from the nearest source of fuel, so they have to rely on on-farm fuel storage to have access to the fuel when they need it. This ensures that they can maintain their on-farm storage and bring reasonable exemptions for small and medium sized farms as well as livestock producers.”


Bayer Investors React to the Monsanto Acquisition

A Dow Jones Report says investors generally seem positive about the deal struck by Bayer CEO Werner Baumann to acquire Monsanto. The head of a global equities asset management company in Paris that invests in Bayer said, “So far, he’s proven to be quite a good negotiator. He’s been very efficient.” Markus Manns, a portfolio investor at Union Investment, another Bayer shareholder, said Baumann has shown that he won’t spend money recklessly just to get the deal done. “I’m a little more optimistic,” he added. Investors are particularly pleased with how the financing worked out. Baumann took advantage of access to debt at very low interest rates to largely pay for the deal, which would allow the new company to quickly grow its earning potential. There is some uncertainty that the deal will get regulatory approval from roughly 30 agencies around the world, and the fact that Bayer will pay Monsanto $2 billion if the deal falls through. A professor at the Frankfurt School of Finance and Management said just closing the deal is not a sign of success. “It’s going to depend on whether or not he can turn this acquisition into reality,” said Professor Nils Stieglitz.


Farm Equipment Sales Mixed in 2016

Retail sales of tractors under 40 horsepower and between 40-100 horsepower rebounded in August. However, sales of larger tractors and combines continued their double-digit declines in the newest data available from the Association of Equipment Manufacturers (AEM). U.S. retail sales for two-wheel drive tractors under 40 horsepower gained 21 percent in August, and are 11 percent higher on the year-to-date. August four-wheel drive tractor sales declined 48 percent year over year, and combine sales declined 22 percent for August. “Growth in the under-40 horsepower segment was strong during August and farm tractors in the 40-100 horsepower range reversed a lower recent monthly trend,” said Charlie O’Brien, AEM Senior Vice President. He said the over 100 horsepower two and four-wheel drive tractors are underperforming their five-year average. “Earlier in the year, we felt the market was stabilizing,” said O’Brien. “As we passed the middle of 2016, we continue to see smaller equipment sales thriving and the larger equipment sales remain depressed.”


Soybean Planting in Brazil Arrives with Concerns

Soybean planting in Brazil starts on September 15, but the Agri Money Dot Com website said it’s starting this year under pressure from prices, tight credit, and dry weather. There’s a few worries about the quality of available seeds as well. Crops are not actually allowed in fields before September 15 as the country tries to cut down on the chance of disease and pest pressures. A U.S. Department of Agriculture forecast of a 1-million-hectare increase in soybean plantings was almost cut in half recently, as the USDA now forecasts a rise of 600,000 hectares. The USDA downgraded the forecast because even though soybean prices are higher in Brazil than last year, they’re not as strong as the surge corn prices right now, which takes away some incentive to plant soybeans. The USDA’s comments follow a recent report from FCStone regarding tight credit conditions amid Brazil’s worst recession in decades. Reports say the farmers in Brazil are in a troubling financial spot right now after a bad growing season last year. Many farmers are having trouble repaying their production loans and filling forward grain contracts.


Talk of a 2017 Farm Bill?

Should the farm crisis continue or even worsen, there are some in Washington D.C. who say it may be necessary to do a farm bill a year early, with the regular deadline for a new Farm Bill set for September of 2018. House Ag Committee ranking member Collin Peterson said it’s something that may have to happen. Peterson said if there’s a real crisis this winter with farmers unable to get financing and bankers up in arms, “Does it make sense to do a Band-Aid or admit that the safety net in the 2014 bill is inadequate and try to fix it?” He said it depends on how bad things actually get. While Peterson readies for the worst, other farm state lawmakers are hoping the safety net programs in the 2014 farm bill can help carry producers through low prices, soaring production domestically and abroad, and weak global demand. Politico’s Morning Agriculture Report said interviews with key lawmakers showed skepticism about even getting the 2018 bill done on time as the last one took an extra year to get approved.

SOURCE: NAFB News Service