Smallest Wheat Crop Since 1957 in Oklahoma Just Got Smaller- 51 Million Bushels is July Estimate 

The 2014 Oklahoma Wheat Crop continues to shrink, with the July USDA Crop Production Report showing a 14% percent drop in the crop from the June first forecast of USDA. In June, Uncle Sam called it a 59.4 million bushel crop, but in the Friday July 11th report, NASS has dropped the production number down to 51 million bushels. Two factors came into play for the July first smaller figure. First, it was signaled at the end of June in the Acreage Report from USDA that final harvested acres are now predicted to be just three million acres, which was off 300,000 acres from the June forecast- more acres were abandoned than was first thought by USDA officials. That number was used in the computation for the July first estimate. The second factor that caused the more than eight million bushel reduction was the drop in bushels per acre to 17 bushels per acre, a bushel down from the June forecast.


The bushels per acre yield of 17 bushels matches the yield seen in 1967, while the overall production estimate is the smallest since Oklahoma raised just 43 million bushels in 1957.


It's not just Oklahoma that is seeing a reduction in wheat production- Kansas has also had their yield shaved by one bushel per acre- and that has resulted in the Sunflower State crop to be also shaved by 8.4 million bushels to 235.2 million bushels, based on a yield of 28 bushels per acre on 8.4 million acres harvested.


Texas actually improved on the size of their crop- with more acres to be harvested than was thought back in June- NASS now expects the Texas wheat harvest to have combines rolling across 2.2 million acres- up from 1.9 million acres predicted in June- the yield of 25 bushels per acre was left and that raised the Texas harvest to 55 million bushels. Click Here to read more on the national wheat production estimate from USDA.

Click Here for the full USDA Crop Production Report.

Numbers across the board where bearish for the commodity market in the monthly crop production report. That's according to analyst Rich Nelson of Allendale.   In the July 11 US Department of Agriculture report is a combination of new crop acreage and grain stocks, which is incorporated into full year balance sheet.


USDA raised its estimate of corn ending stocks from lat month's 1.146 billion bushels to now 1.246 billion bushels. Nelson says that was a little higher than trade estimates of 1.232. USDA also raised new crop ending stocks from 1.726 billion bushels to now 1.801 billion bushels. That was slightly higher than pre-report trade estimate.   


USDA left the average corn yield unchanged at 165.3 bushels. Nelson says the trade will assume yield will be increased on the August report, therefore ending stocks could increase to 1.9 billion bushels.


USDA raised ending stocks for both old and new crop soybeans. USDA raised ending stock from 125 million bushels last month to now 140 million bushels. That was higher than trade estimates. New crop soybean ending stocks were raised from last month's 325 million bushels to 415 million bushels. Nelson says that was close to trade estimates.  Click Here to read (or watch) Nelson's comments on the monthly crop production report from USDA.  

Wheat Grower Groups Ask RMA to Add Actual Production History Computation in 2015 Crop Year

It may be a tall order, but wheat growers in the southern Great Plains are asking Risk Management Agency Administrator Brandon Willis "to implement the actual production history (APH) adjustment provisions of the Agricultural Act of 2014 in time for the 2015 crop year. The 2015 Crop year for winter wheat is the one that will start going into the ground by the latter part of August.


The letter comes from the Oklahoma Wheat Growers Association, the Kansas Association of Wheat Growers, Texas Wheat Producers Association and the Colorado Association of Wheat Growers.


The grower groups explain the situation many wheat growers in the four states find themselves in- "Many of the changes contained in the Agricultural Act of 2014 recognized crop insurance as the center of our modern safety net. Unfortunately, many of our growers have been stuck in the worst drought since the dust bowl of the 1930's and have found their crop insurance coverage diminishing at an alarming pace. Back-to-back drought years have reduced producers' APHs to levels that no longer reflect even average production expectations, therefore reducing crop insurance guarantees. Additionally, producers across this region will suffer the effects of this drought for years to come as their APHs are continually punished because a one-in-eighty year drought is included in their 10-year production history."  Click Here to read more about the concerns of wheat growers from the southern Great Plains.

AND- it's not just the wheat growers that are asking USDA to man up on this issue- members of the House Ag Committee are clearly not happy with what they were hearing last week from Michael Scuse of USDA on the subject- basically, USDA saying the math is too hard and too overwhelming to recalculate anything in time for wheat growers for the upcoming planting season. We feature the give and take of Congress with USDA on this in our Monday morning farm radio news- click here to take a listen.

House Passes Bonus Depreciation Bill

This past Friday, the U.S. House of Representatives voted 258 to 160 to pass H.R. 4718, legislation that will make permanent the fifty percent bonus depreciation of new capital purchases that was created in the American Taxpayer Relief Act of 2012. This bill addresses a section of the tax code that expired at the end of 2013 and is one of the provisions that has traditionally been addressed in tax extenders packages. It was also considered as part of the tax reform proposals in the House and Senate.


"NCBA strongly supports the permanent extension of fifty percent bonus depreciation because it will help provide farmers and ranchers with predictable pro-growth tax code that allows us to make long-term investments in our businesses," said Bob McCan, NCBA President and Victoria, Texas, cattleman. "Bonus depreciation coupled with Section 179 expensing are effective tools allowing farmers and ranchers to make the necessary investments needed to remain competitive in the global market place and create jobs in America."


Bonus depreciation allows businesses that purchase new equipment to depreciate 50 percent of the cost in the first year, plus the percentage of the remaining basis in the equipment that would ordinarily be depreciable under the Modified Accelerated Cost Recovery System.  Click Here to read more about the progress of the Bonus Depreciation Bill.  

Quality Angus Genetics = Premiums, Profit

When Neal Haverkamp started his purebred Angus business in 1993 he saw the Certified Angus Beef Brand already driving demand and assembled the best genetics. Now with the CAB licensed feedlot and 450 registered cows near Bern, Kansas, Nemaha Valley Angus provides breeding stock and feeds with a focus on carcass quality and helping customers.


"We didn't want to just produce black bulls and leave our customer hanging after we deliver the bull," Haverkamp said.   "We want to help them all the way through and keep them coming back to us for seedstock too."


"If we can show what they are producing is worth more and then give them a premium for the calves when they sell them their selling I think that benefits everyone," Haverkamp said.   


Genetic selection should advance the whole industry, he says. To help customers join in that effort, he offers to buy their cattle, then return individual data to improve their aim for carcass quality.  Click Here to read (or watch) Haverkamp's view on how quality breeding creates premium beef.   

USDA Modernizes Poultry Inspection to Prevent 5,200 Annual Foodborne Illnesses

The U.S. Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS) has sent its proposed rule to modernize the U.S. poultry inspection system to the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) for review.


"I commend USDA for taking the next step in an effort to modernize the way the agency inspects chicken," said NCC President Mike Brown. "In an effort to continue our progress towards reducing foodborne illnesses, we believe, along with food safety experts, that the poultry inspection system should be modernized and transitioned to a model that is more science and risk-based. Not only will this system build on our food safety progress, if fully implemented, it will create jobs.


"We look forward to reviewing the final rule in its entirety once it is published in the Federal Register. After a successful 15-year pilot program, I urge OIRA to perform an expeditious review."


At facilities that process chickens for meat, FSIS is the public health agency within USDA that is responsible for inspecting every chicken. The U.S. meat and poultry inspection system complements efforts by chicken processors to ensure that the nation's supply of poultry products is safe, wholesome and correctly labeled and packaged.  Click Here to read how these measures would prevent 5,200 food borne illnesses annually.  

This N That-  EPA's Smackdown of Ditch the Rule and Fall Arrives for a Quick Stay This Week 

The Environmental Protection Agency is taking on the personality of their Administrator, Gina McCarthy, who is irritated over the furor raised by agriculture over the Waters of the US proposed rule.  For example, in response to the Ditch the Rule campaign initiated by Farm Bureau and picked up by groups like the National Cattlemen's Beef Association, EPA has pushed back with their own campaign they are calling Ditch the Myth.   

McCarthy has disparaged charges brought by ag groups, lawmakers and others that call WOTUS a land grab and one that puts EPA in a position to control most if not every stream of water and every body of water in the US.  She traveled to Missouri last week to defend the rule- and she told reporters in front of that meeting "I'm hoping this trip helps us ditch the myths and misinformation" about the rule" adding that many of the claims raised by farm groups are "silly" and "ludicrous."

McCarthy's view of the farm community has translated into an EPA campaign they are calling Ditch the Myth.  Specifically, EPA's site says that there is no expansion of federal authority in this proposal- "The proposal does not protect any waters that have not historically been covered under the Clean Water Act. The proposed rule specifically reflects the more narrow reading of jurisdiction established by the Supreme Court and the rule protects fewer waters than prior to the Supreme Court cases."

Click here to see the main page of Ditch the Myth which has lots of links to more on the EPA's view of the rule.

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The forecast is close to unbelievable this week- our colleague Jed Castles has constructed a nine day forecast which shows a couple of days just in the 70s this week- good chances of rain and then an eventual return to summer by the latter part of the upcoming weekend.