READ the NAFB’s National Ag News for Thursday, December 29th

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READ the NAFB’s National Ag News for Thursday, December 29th

Net Farm Income Down for Third Straight Year

Net cash farm income and net farm income are two popular ways to measure farm sector profitability, but they aren’t the same thing. Net cash farm income tracks cash receipts and cash expenses, while net farm income includes non-cash transactions, including inventory changes, capital replacements costs, and others. Both measures have headed lower since 2013 after several years of higher income. The U.S. Department of Agriculture is forecasting that net cash farm and net farm income for 2016 will be $90.9 billion and $54.8 billion, respectively. Both amounts fall below the ten-year averages. Before the recent drops, both income measures largely trended upwards. Between 2010 and 2013, rising crop and animal receipts helped to push net cash farm income and net farm income higher. However, prices declined for a large group of commodities in 2015 and fell further in 2016. Production expenses were forecast to contract in 2016 but not enough to offset the drop in commodity prices.

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Former Face of Farming Winner Named MO Ag Director

Missouri Governor-elect Eric Greitens says the message he heard from farmers during the campaign was ‘let us farm,’ and ‘keep activists, lawyers, and government off our backs.’ To that end, the Governor-elect has chosen an outsider and advocate for agriculture, Chris Chinn, as the next Director of the Missouri Department of Agriculture. Chinn was chosen as a U.S. Farmers and Ranchers Alliance “Faces of Farming and Ranching” award winner back in 2013. The award is given to only four outstanding farmers from around the country. Chris and her husband are fifth-generation farmers who raise hogs, cattle, corn, soybeans, and hay on their farm in northeast Missouri. Chinn has given hundreds of speeches around Missouri and across the country defending farm families and sharing the values that make farming a vital profession. Greitens says, “Her new mission is clear: to protect and promote Missouri agriculture so that her kids can grow up to be the sixth-generation of farmers on their land.” He added that agriculture has to double world food production in the next generation and Missouri farmers can help lead the way.   

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Report Projects Global Beef Demand Up Through 2020

The global beef market is projected to reach $2.1 trillion by 2020. That number is in a new study just released by Grand View Research of San Francisco. Meating Place Dot Com says beef is the third-most consumed meat around the globe. More and more consumers around the globe are turning to meat as a major source of protein and that will drive increasing demand for beef over the next several years. Increasing disposable incomes in expanding markets around the globe are also driving demand for more beef, especially compared to pork and poultry. Ground beef is the most in-demand product, with demand exceeding 29.5 million tons in 2013. The fastest growing segment of beef demand is expected to be for beef steaks as markets like North America are demanding more high-quality beef products. Global beef demand was 67.4 million tons in 2012 and is predicted to reach 72.9 million tons in 2020. The Asian-Pacific region is expected to be the largest regional market for beef. Growing disposable incomes in China and increasing demand for beef should be a key driver in that market during the next several years.

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National Alfalfa Checkoff Launches on January 1st

The National Alfalfa and Forage Alliance will launch its first ever alfalfa checkoff on January first. The initiative is called the U.S. Alfalfa Farmer Research Initiative, designed to help offset a shortfall in alfalfa research funding. An article on Western Farm Press Dot Com says the Alliance Board of Directors voted to start a national checkoff program to help get a farmer-funded research program off the ground and advance industry research. The initiative, which is implemented voluntarily by seed brand, will be assessed at the rate of $1 per bag of alfalfa seed. National Alfalfa and Forage Alliance President Beth Nelson says there’s a definite need for more research. “Alfalfa is the nation’s third most valuable field crop behind corn and soybeans. A lot of people don’t realize that.” She says alfalfa acres have been declining recently and they credit at least some of that to a lack of research. Nelson adds, “There isn’t the same public commitment to research that you see in corn, beans, and wheat.”

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U.S. Dairy Exports Quadruple in Value Over 10 years

USDA’s Economic Research Service reports the value of U.S. dairy exports more than quadrupled between 2004-2014. Farm Futures magazine says that makes the U.S. the third largest dairy exporter in the world. The recently released “Growth of U.S. Dairy Exports” report says 2015 wasn’t quite as good. The U.S. began adding to an already large amount of dairy exports in the early 2000s. Dairy export values grew from $1.6 billion to roughly $6.8 billion in 2014. The increase was fueled by increasing incomes in overseas markets like east and southeast Asia as well as Latin America. Free trade agreements also opened world markets, such as the North American Free Trade Agreement providing greater access to Mexico. Reforms in China made it more open to American dairy exports as well. U.S. global exports fell in 2015 to $4.9 billion thanks to changing global conditions. That drop was a 28 percent decrease from 2014, a larger drop than the 11 percent decrease in total ag exports. Several reasons for the decline in dairy exports include weak or slower growth in global demand, especially in China, and a Russian ban on dairy imports. Other factors include a stronger U.S. dollar and the discontinuation of milk supply quotas in the European Union.

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Administration Still Fighting for Beef Producers

While the Obama Administration’s time in office is rapidly winding down, it’s taking up a battle for U.S. beef producers regarding hormones and the European Union. The U.S. Trade Representative’s Office announced this week that it will take a shot at the European Union regarding its ban on hormones in American beef exports. The World Trade Organization has said in the past that the ban on hormones is not based on science and in violation of international trade laws and obligations. The dispute goes all the way back to the 1980s when Europe banned American beef imports that were treated with growth hormones. The E.U. lost the case when it went before the World Trade Organization in 1998. The European Commission said the dispute would be settled through a pending trade agreement knowns as the TTIP, but that trade deal wasn’t finished. The USTR says it’s going to relaunch the fight, starting with possible tariffs on European products.

SOURCE: NAFB News Service

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