READ the NAFB’s National Ag News for Wednesday, May 27th

READ the NAFB’s National Ag News for Wednesday, May 27th

Sponsored by the American Farm Bureau Federation

Online Grocery Shopping a New Reality

The COVID-19 pandemic has changed the ways shoppers fill their grocery needs. Throughout the pandemic, the Food Marketing Institute has been tracking consumer trends and charting how shopping behaviors are changing. While it’s uncertain how the trends will continue, the pandemic will permanently change consumer habits. Pre-coronavirus, FMI projected that online food and beverage sales would equate to $143 billion by 2025, representing about 18 percent of an expected overall $800 billion in combined online and in-store spending for food and beverages at home. However, since the pandemic, about 21 percent of Americans have tried online shopping for the first time, eight percent have returned, and 19 percent are continuing to online shop. FMI President and CEO Leslie Sarasin says, “Online grocery shopping is a new reality for our retail and wholesale members.” Research by FMI suggests that not everyone will continue ordering online at the levels they were during the height of the pandemic, but they are likely to continue using it more.

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House Lawmakers Press USDA Over Food Box Contracts

House Agriculture Committee members want questions answered regarding the Department of Agriculture’s Families Food Box Program. Led by Democrat Marcia Fudge of Ohio, the group sent a letter to Agriculture Secretary Sonny Perdue. They say the letter comes amid reports of contracts under the program awarded to companies with little to no experience in agriculture and food distribution, and may have little or no capacity to meet the obligations set by USDA. The lawmakers are seeking information on what criteria were used to determine which applicants would be awarded contracts. They also want to know how USDA considered applicants’ financial standings, along with consideration of minority-owned businesses, and how USDA will ensure the contracts are fulfilled. How USDA evaluated applicants, and food safety concerns are also on the list. Representative Stacey Plaskett of the U.S. Virgin Islands and Representative Jim Costa of California joined Fudge in the letter. The three lawmakers chair separate House Agriculture subcommittees.

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Farmland Prices Continue Decline, Farm Borrowing Increasing

The latest Rural Mainstreet Index from Creighton University shows farmland prices are declining while farmer borrowing is growing. Released last week, the overall index for May increased to 12.5 from April’s record low 12.1, but down significantly from March’s weak 35.5. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. Farmland prices continue to slide as May’s reading fell to 39.7 from April’s 40.9. This is the 77th time in the past 78 months the index has been below growth neutral. The May farm equipment-sales index increased slightly to 21.9 from 20.0 in April. This marks the 80th straight month that the reading has remained below growth neutral 50.0. Borrowing by farmers expanded for May, but at a slower pace than in April. The borrowing index slipped to 72.2 from April’s 75.8. The checking-deposit index soared to 86.1 from April’s 65.6, while the index for certificates of deposit and other savings instruments increased to 48.6 from 48.4 in April.

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AEM Developing Health and Safety Guidelines for Events

The Association of Equipment Manufacturers will craft guidelines for industry exhibitions and events. The association recently formed a Health and Safety Task Force to guide its efforts in ensuring the well-being of exhibitors, attendees, industry peers, and AEM members and staff at association-run events. The task force will create a universal set of health and safety guidelines. The team will consider all touch points of every visitor group’s experience, vendor roles, implication to contracts, communication of practices to stakeholders, cost and revenue impact, as well as execution. The initial set of guidelines created by the Health and Safety Task Force will focus on the ongoing COVID-19 pandemic and minimizing the potential risk of infection for AEM staff and visitors. However, once the pandemic passes, the team will craft a revised set of guidelines for implementation at the appropriate time. The initial set of guidelines will be in place prior to AEM’s Product Safety & Compliance Seminar and Liability Seminar, scheduled this August in Illinois.

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Deere Earnings Beat Expectations

John Deere’s quarterly sales and profit estimates beat expectations. Net income fell 41 percent to $665.8 million, or $2.11 per share in the quarter, but beat analysts’ average estimate of $1.62 per share, according to Reuters. Equipment sales declined 20 percent to $8.22 billion, topping expectation of $7.69 billion. Agriculture and turf sales decreased for the quarter due to lower shipment volumes and the unfavorable effects of currency translation. The new forecast from the company expects farm and turf equipment sales to fall between 10 percent and 15 percent this year. Net income attributable to Deere and Company is forecast to be in a range of $1.6 billion to $2 billion for the full year. However, many uncertainties remain regarding the effects of the COVID-19 global pandemic that could negatively affect the company’s results and financial position in the future. A news release states, “Uncertainties related to the magnitude and duration of the COVID-19 pandemic may significantly adversely affect the company’s business and outlook.”

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Gas, Diesel Prices Continue Rising

For the fourth consecutive week, the national average price of gasoline increased, up 5.5 cents to $1.96 per gallon. The average price of diesel rose 0.2 cents to $2.41 per gallon. Patrick DeHaan with GasBuddy says as long as COVID-19 cases continue to drop over time and states reopen, average prices could hit the $2 per gallon mark as early as this week. Crude oil prices continued to rally over the last week, though the increase was smaller than previous weeks. The rally in crude oil comes as production continues to drop to meet reduced global demand, and while demand has begun to recover, pushing the needle of prices higher. Last week’s data from the Energy Information Administration pointed to yet another drop in crude oil inventories, which fell five million barrels, but remain a healthy ten percent above year-ago levels. Gasoline inventories saw a rebound of 2.8 million barrels, while distillate inventories perked up 3.8 million barrels.

SOURCE: NAFB News Service

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