Farm Bureau Press for August 28

AUGUST 28, 2020 • VOLUME 23 • ISSUE 17

Farm Bureau Press A PEEK INSIDE

FARM BUREAU LAUDS $5 MILLION MEAT PROCESSING GRANT Arkansas Farm Bureau on Friday praised Gov. Asa Hutchinson and members of the General Assembly after the body allocated $5 million from the federal CARES Act to create a grant program that will allow custom meat processors in Arkansas to expand and upgrade facilities.

Visit the Arkansas Department of Agriculture website here for guidelines and the official application, bit.ly/MeatProcessingGrant.

The Arkansas Agriculture Department will administer the program. Grant applications must be submitted by Sept. 30.

Hurricane Laura May Affect Arkansas Harvest Efforts, page 2

Arkansas currently has three meat processing facilities that are USDA inspected, enabling product from those facilities to be sold to the general Continued on page 2

Market News, page 4

Cattle Producers Roundtable | Arkansas cattle producers & stakeholders participated in a roundtable discussion Aug. 14 with USDA Under Secretary Greg Ibach about the importance of managing risk when marketing cattle. Ahead of the meeting, Ibach toured the new Delta Peanut facility and joined ArFB leadership for lunch at the Craighead County Farm Bureau office.

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MEAT PROCESSING GRANTS Continued from page 1

public. Arkansas has more than 50 custom slaughter facilities, though retail products from these processors are not USDA inspected and are ineligible for sale to consumers.

2020 Summer Virtual Workshops | Jason Kaufman (right), ArFB Education Coordinator, presented Marsha Masters, Associate Director of Economics Arkansas, with materials for the 120 teachers from around the state who attended summer virtual workshops. Virtual attendees learned about the resources, grants, and awards they are eligible for and the importance of agriculture to our food supply, economy, and employment in our state. Each teacher received a book and teacher packet with various materials. For more information, visit bit.ly/ArFBAgEducation.

The COVID-19 epidemic has exposed food supply chain weaknesses, with certain items unavailable in some grocery stores. Beef, pork and poultry products were among those food items that were limited. The grant program will enable meat processors to build new facilities or upgrade existing infrastructure to state food safety standards and support the demand for locally produced protein.

“These funds will provide economic benefits to local businesses that otherwise would not be able to afford to upgrade their facilities,” said Rich Hillman, president of Arkansas Farm Bureau.

“This will result in long-term benefits for consumers, local communities and the beef producers of Arkansas.

“We want to thank Gov. Hutchinson, members of the General Assembly and Sec. of Agriculture Wes Ward for their leadership in putting together this grant program.”

Michael Lee of Conway, chairman of the Arkansas Farm Bureau

HURRICANE LAURA MAY AFFECT A

High winds and heavy rainfall from hurricane Laura swept through Arkansas Thursday and Friday, just as harvest nears for several major crops across the state.

Terrible timing While the rice harvest is set to begin in northern Arkansas, the corn harvest throughout the state has already begun for producers with grain drying capabilities.

As of Aug. 23, the U.S. Department of Agriculture reported about five percent of the state’s approximately 640,000 acres had been harvested. Jason Kelley, extension wheat and feed grains agronomist for the University of Arkansas System Division of Agriculture, said much of the state’s corn crop is in a vulnerable state.

“The timing is terrible, to be honest,” Kelley said.

Tossed | Brenda Patton (above), chairperson of the Benton County Farm Bureau Women’s Leadership Committee judges farm art done by youths who participate in the TOSSED program. Created by county Extension agent Linda Simpson, TOSSED has students use recycled trash to make ag-related art sculptures. The women’s committee helps promote the program throughout the county to help tell the ag story.

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While some corn producers in the state began harvesting as early as Aug. 1, Kelley said that those first three weeks of harvest were mainly limited to producers who have access to grain dryers.

Even lodged corn plants that can be recovered may suffer significant yield and grain quality loss, he said. The situation can be even more dire for grain sorghum, which, although not currently grown on substantial acreage in Arkansas, is ready for harvest this week.

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Beef Commodity Division, echoed the benefits of the grant program, which has a cost-share provision which provides up to 90 percent of approved expenses.

“During COVID-19, we have experienced an unprecedented increase in demand for our beef products,” said Lee, who manages Flying C Ranch, which markets its products through a farm-to-consumer business model. “In fact, given this increase in demand, we have had to limit the amount of ground beef our customers could purchase.

“Right now, because Arkansas does not have enough inspected packing facilities, I am forced to book cattle to be slaughtered through 2021 and 2022. As a cattle producer, this is extremely frustrating because those calves have not even been born yet.

How can I plan and manage my risk operating in such a fashion?

A lack of certified processing facilities is the source of that frustration.

“This program will help local processors and livestock producers meet the demand for local protein and help eliminate some of the uncertainty surrounding access to local food products. This is good for the state of Arkansas.”

ARKANSAS HARVEST EFFORTS

Even lodged corn plants that can be recovered may suffer significant yield and grain quality loss, he said. The situation can be even more dire for grain sorghum, which, although not currently grown on substantial acreage in Arkansas, is ready for harvest this week.

Ronald McDonald Donation | The State Women’s Leadership Committee donated $2,000 Aug. 27 to the Ronald McDonald House Charities of Arkansas on Aug. 26. This donation will provide 400 individual meals to those served by the house. Amanda Williams, Director of Women’s Leadership & Foundation, presented the check on behalf of the state committee to Mrs. Peggy Todd.

Lodging in rice, soybeans Jeremy Ross, extension soybean agronomist for the Division of Agriculture, said storm-related lodging also poses a potential problem for the state’s number one crop.

“Most of the soybean crop is in mid- to late-reproduction,” Ross said. “At these growth stages, the crop can withstand some ‘lean’ to the plants, but we don’t want to see plants completely flat on the ground. Most of the state is dry, so we could use some rainfall to help finish out some of the early planted crop.

Rain may help cotton Cotton, which is slightly ahead of the five-year average for crop progress with bolls open on 25 percent of the state’s 500,000 planted acres, still has more than a month before most harvesting efforts will begin. Bill Robertson, extension cotton agronomist for the Division of Agriculture, said a thorough wetting this week will, if nothing else, help cotton growers struggling with decisions regarding termination dates for irrigation.

President’s Leadership Council | ArFB hosted the third and final session of the 2020 President’s Leadership Council virtually on Aug. 21. The focus was government in Arkansas and featured conversations with ArFB Public Affairs and Government Relations department, Sen. Bruce Maloch and Rep. DeAnn Vaught, ArFB President Rich Hillman, Congressman Rick Crawford and several others.

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MARKET NEWS as of August 27, 2020 Contact Brandy Carroll 501-228-1268 brandy.carroll@arfb.com

Cattle Live cattle futures are showing signs of topping. The October contract hasn’t been able to hold above resistance at $110 since March, when COVID was declared a pandemic.

The long-term uptrend, which was around $108, was broken on Monday as the market gapped lower.

The cash market was softer than expected this week, and packers have a lot of next week’s slaughter needs covered. Demand is expected to decline due to seasonal factors after Labor Day, the last big grilling holiday of the summer. The Aug. 1 Cattle on Feed report pegged the feedlot inventory at 101.5% of a year earlier, which was higher than the top end of trade expectations.

The October feeder chart has also taken on a negative appearance as the long-term uptrend has been broken. The market failed to close resistance in the form of a downward gap charted in February between $151.17 and $150.25, and that has resulted in technical selling.

Hogs After trading to new four-month highs early in the week, October futures charted a bearish reversal on Wednesday. Profit taking and weaker cutout values have added pressure this week. A seasonal up-tick in hog supplies in the fall is on the horizon and could keep a lid on prices as well. October could head lower to close the gap left between $52.82 and $53.55 last week.

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Rice After showing signs of topping out on Monday, rice futures have begun to bounce back. The surge is in reaction to concerns about the upcoming harvest as Hurricane Laura bears down on Louisiana and Arkansas. Wind and heavy rains pose a dire threat to the rice crop. In the August reports, the rice production estimate was down slightly from the previous forecast due to a decrease in the expected yield.

The expected yield is forecasted at 7,600 pounds per acre, down 89 pounds from the previous estimate.

Projected ending stocks for 20/21 were raised to 44.3 million cwt, 44% higher than ending stocks for 2019-20. The average all rice seasonaverage price is unchanged from the previous report, and pegged at $12.70, down from $13.10 in 201920. Technically, Monday’s high of $12.49 for September and $12.45 ½ for November will be the first level of resistance on the rebound.

Corn Corn futures have moved to their highest levels in two months on concerns about the yield potential for the crop. In the August report, USDA projected U.S. average yields to set a record of 181.8 bushels per acre, and total production to also set a record of 15.3 billion bushels, up 12% from 2019. Since that report, however, a devastating derecho had destroyed millions of acres of corn in Iowa and Illinois, drought is threatening the crop in parts of the corn belt, and Hurricane Laura will likely impact the crop in parts of the south. The market is technically overbought and will have tough resistance at the July high of $3.63.

Soybeans Soybeans continue to push higher. In the August report, USDA pegged the average yield at a record-setting 53.3 bushels per acre. Since that time,

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though, a derecho has devastated millions of acres in Iowa and Illinois, drought threatens portions of the corn belt and Hurricane Laura looks set to impact parts of the crop in the South. Given the sharp increase in prices this week, it appears traders are not expecting that yield to materialize. Weekly exports were 70.8 million bushels, within trade expectations but still generally supportive.

Cotton December cotton has moved to its highest level since February.

Support from demand from China and optimism it will become more active in the market moving forward has provided support. There is concern about Hurricane Laura and its impact on the cotton crop in states like Louisiana, Arkansas and Mississippi. Heavy wind and rains could significantly impact the yield potential of the crop. In the August report, USDA projected a record setting yield of 938 pounds per acre. The current record yield is 904.7 lbs/acre. If realized, this will push production above 18 million bales, down 9% from 2019. The supply/demand report lowered the domestic use of cotton by 300,000 bales to a record low of 2.7 million bales, which pushed 2019 ending stocks up to 7.2 million bales, despite an increase of 200,000 bales in exports. The resulting carryout means the cotton supply for 202021 is projected to be 25.28 million bales, the largest domestic cotton supply since 2007. The average onfarm price is projected at 59 cents per pound, unchanged from the July report.

EDITOR Ashley Wallace ashley.wallace@arfb.com