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READ the NAFB’s National Ag News for Thursday, October 6th…

Monsanto Sales and Profits Lower in 2016

Monsanto reported net sales down ten percent and profits 42 percent lower in Fiscal Year 2016. Monsanto had net sales of $2.6 billion dollars in fiscal year 2016, with net sales for the full fiscal year at $13.5 billion. Full net sales were down year-over-year thanks to currency challenges and price declines in agricultural productivity. Seeds and genomic net sales were $1.6 billion in the fourth quarter, and totaled $10 billion for the year. Ag productivity sales were $997 million for the quarter and for the fiscal year were $3.5 billion. The company’s expenses were flat year-over-year on an as-reported basis. Expenses increased primarily due to $280 million in PCB litigation. Research and Development costs decreased slightly due to currency and transformation cost savings. Monsanto reported a net loss of $191 million in the fourth quarter of 2016 compared to a net loss of $495 million at the same time last year. Net income for 2016 was $1.3 billion, compared to $2.3 billion in income the year before.


Cargill Sales and Net Earnings Higher in 2016

Cargill’s largest contributor to adjusted operating earnings in the first quarter was the Animal Nutrition and Protein Division. The beef business led the way in profitability, which was helped by higher numbers of cattle in the supply chain as well as consumer demand for more beef. The poultry-based divisions, along with turkey and egg businesses, were more profitable than they were in the previous year. Animal nutrition product sales grew in Asia and North America, contributing to the strong growth as well. Aqua Feed sales were down in some countries due to weather-related incidents. The segment’s new aqua nutrition unit offset part of the impact with its overall sales strength. Cargill wants to grow its protein portfolio, so it purchased Five Star Custom Foods, which specializes in cooked protein products for food service and food manufacturing sectors.


Direct Sales Helps Beginning Farmers to Survive

The U.S. Department of Agriculture says beginning farmers are those who have managed farms for ten year or less. Beginning farmers are less likely to survive in business than those farmers who have more experience. Census of Agriculture data says 48 percent of beginning farmers with positive sales numbers in 2007 also had positive sales numbers in 2012. That number compares with a 55 percent rate in the number of other farms with more experienced operators. A USDA news release says running larger operations and selling directly to consumers through things like roadside stands and farmers’ markets may actually help beginning farmers stay in business. Beginning farms with direct-to-consumer sales had a survival rate of just over 53 percent while those without DTC sales survived at 47 percent. The difference in survival rates for different-sized farms was substantial, ranging from nine percent of the largest farms to four percent of the smaller farms. The USDA says farmers with direct-to-consumer sales can get a higher price for their product and reach a certain level of sales with less machinery and land. That can mean a more stable and higher source of income and a need to borrow less money, which can also mean a better chance of survival.


Food Policy Action Endorses Clinton

The advocacy group Food Policy Action is weighing in on the presidential election for the very first time. Politico’s Morning Agriculture Report says the group is endorsing Hillary Clinton for president, saying she has a record of supporting food policies that increase access to healthy foods, supports fair labor conditions for farm workers, and supports more sustainable agriculture practices. The group says, “Unlike Clinton, Republican nominee Donald Trump has been on record supporting policies that would hurt our food system, including his objections to consumer transparency, his objections to vital safety net programs for seniors and families, as well as his plans to dissolve the Food and Drug Administration.”


Pork Outlook Turns Sour

Hog prices have fallen far below breakeven levels and there are worries about the number of hogs headed to market in the fall. A Purdue University report says the numbers may exceed packer plant capacity and a recent USDA September Hog and Pig report didn’t help the situation as numbers are three percent higher this year. Animal numbers in the heaviest categories were up four percent. The number that brought the greatest concern in the September report was packer head counts were up by eight percent. Slaughter capacity is about two percent higher than the headcounts over the past couple of weeks, but the USDA expects slaughter numbers to ease by the end of the year. If those USDA predictions are correct, packers should have enough capacity. Two new processing operations are scheduled to open in Iowa and Michigan in 2017, increasing slaughter capacity by another six percent. The recent squeeze on slaughter capacity has meant stronger packer margins. The increased capacity next year should reduce packer margins and provide higher prices at the farm level. However, that doesn’t help this fall and winter as losses are expected to be as large as they’ve been since 2012. Experts say expected losses in 2017 may lead to ideas of shrinking the breeding herd, and that could lead to higher prices returning in 2018.  


Bees on Endangered List for the First Time

A species of bees in on the Endangered Species list for the first time in American history. A CNN report says seven bee species native to Hawaii are on the protected list as the U.S. Fish and Wildlife Service added yellow-faced bees to the list after years of research showed they are endangered. The rule is effective on October 31. Bees are crucial for the nation’s food industry as they pollinate fruits, nuts, and vegetables. Various factors have led to a decline in bee populations, which CNN cites as habitat loss, pesticides, and a loss of genetic diversity. The Xerces (Zehr-sees) Society, named after an extinct species of California monarch butterfly, was involved in filing petitions to get bees under protection. During the pollination period, insects, birds, and bats all transfer pollen between plants, allowing them to produce seeds and reproduce. Listing the bees on the Endangered Species List allows authorities to provide recovery programs and fund protection efforts.

SOURCE: NAFB News Service