READ the NAFB’s National Ag News for Monday, October 17th…

CLICK HERE to listen to TODAY's BARN Morning Ag News with Brian Allmer...

CLICK HERE to listen to TODAY’s BARN Morning Ag News with Brian Allmer…

Sponsored by the American Farm Bureau Federation

CME Considering Cash Settlement for Cattle Markets

CME Group officials last week indicated the group is considering switching to a cash settlement process for its live cattle futures. Traders continue to complain to CME regarding the extreme volatility in the live cattle futures, and are looking to CME group to bring some control back to the market. Sharp declines in price last fall led to the scrutiny. If implemented, the change would be a major attempt to restore confidence in the market by adjusting the way it operates. CME’s Dave Lehman says discussions about the new settlement procedure were part of an all-encompassing review of the market by CME. He told Reuters “it’s on the table,” adding that CME was also looking at potential modifications to the physical delivery process. Feeder cattle and lean hog futures are already cash-settled, leaving live cattle as the remaining physical delivery settled market. Lehman says volatility is getting worse and farmers have been selling cattle to packer’s months in advance, rather than negotiating shortly before slaughter. Producers say that has led to questionable pricing systems and price discovery for the market.


Japan to Consider TPP Approval

Lawmakers in Japan are starting to discuss legislation to implement and ratify the Trans-Pacific Partnership. DTN reports the current administration in Japan wants to approve the trade agreement before the U.S. presidential election next month. Japanese lawmakers have paved the way to consider TPP, after approving a supplementary Fiscal 2016 budget that was standing ahead in line of TPP. That leaves TPP related legislation as the next and effectively only remaining legislation to be debated by lawmakers. Deliberations began Friday as Japan’s government urged the nation’s parliament to quickly pass the deal to pressure the U.S. into approving TPP. Japan says there is “absolutely no intention” of renegotiating the trade deal. However, Japan must overcome its own opposition, as an opposition group cites the U.S. presidential candidates opposition as a reason to not support the trade agreement.


USDA China Office Expects Record Soybean Imports

The U.S. Department of Agriculture’s office in China expects the nation will likely import a record 86 million metric tons of soybeans during the current marketing year, up 3.5 million metric tons from last year. Pro Farmer’s First Thing Today reports a recovery in swine production and steady growth in the poultry sector has boosted demand for feed and protein meal in China. However, USDA expects the rate of growth for soybean imports to slow as the country’s soybean production recovers and China unloads soybean and oilseed product reserves. Meanwhile, lower imports of distillers dried grains due to China’s antidumping duties should boost soymeal demand and thus soybean imports, according to USDA. That’s welcome news for U.S. soybean farmers as a recent USDA report forecasted another record soybean harvest for the current growing season.


USDA Cheese Purchases May Fall Short

Politico reports there is no guarantee the U.S. Department of Agriculture will spend all $20 million pledged last week to buy cheddar cheese surplus supplies. That’s because the first cheese purchase announced earlier this year fell short. USDA had pledged $20 million in purchases in August to offset lower global dairy markets. However, USDA only spent $7 million on those purchases of surplus cheese. Politico says a USDA spokesperson explained that the window of opportunity to make purchases — August 23rd until September 30th — was shorter than normal because the department had to obligate the funds before the end of the fiscal year, and it happened to be a busy time for dairy processors. So USDA evaluated the market’s status and announced additional purchases werenecessary. Dairy producers are desperate for short-term relief as revenue has dropped 35 percent over the past two years amid a global oversupply.

Deere Says DOJ Unfairly Accusing of Monopoly

Deere & Co. says the Department of Justice is unfairly accusing the company of trying to monopolize a market that does not exist. Deere responded last week to a DOJ challenge to the companies planned purchase of Monsanto’s seed planting equipment line, Precision Planting. The Wall Street Journal reports the government aims to block Deere from buying Precision Planting on grounds the deal would suppress competition for technology that allows farmers to plant crops at accelerated rates. Deere already offers high-speed components for its own planters. Deere denied that the purchase would give the company 86 percent of all precision-plating system sales in the United States. The DOJ filed a lawsuit against the deal at the end of August. Deere responded last week and repeatedly challenged the government’s attempts to distinguish high-speed planting systems from slower, conventional planting equipment. Deere also says products from Precision Planting would be widely available for non-Deere equipment after the deal is finalized. Precision Planting’s U.S. sales were about $100 million in 2015, while Deere’s U.S. sales of planter-related equipment last was near $900 million.


Florida Citrus Harvest Expected to Decline

Florida citrus growers are expected to harvest 14 percent less product this year compared to last year, but the Department of Agriculture says that is not because of Hurricane Matthew. USDA expects the 2016-2017 season harvest to total 70 million boxes, compared to last season’s 81.6 million boxes. The forecast is less than half the 170 million boxes harvested in 2008. USDA attributes the declines in production to citrus greening disease, which has infected more than 90 percent of the state’s groves. The total harvest estimate includes 34.0 million boxes of non-Valencia oranges, or early, midseason, and Navel varieties, and 36.0 million boxes of Valencia oranges. The Navel orange forecast, at one million boxes, accounts for three percent of the non-Valencia total, according to USDA. Industry officials note citrus greening in Florida has forced a citrus production decline of 70 percent in the last 20 years.

SOURCE: NAFB News Service