Farm Bureau Press | November 20

NOVEMBER 20, 2020 • VOLUME 23 • ISSUE 23

Farm Bureau Press A PEEK INSIDE

ArFB 2020 ANNUAL CONVENTION MOVES TO VIRTUAL EVENT The Arkansas Farm Bureau Board of Directors has made the difficult decision to change the district caucuses and annual meeting of voting delegates to a virtual format. Numerous county Farm Bureaus have expressed concern with an in-person meeting, and that concern is certainly understandable at this time. The virtual format will allow the organization to conduct its annual business while protecting the safety of its members. Given the current conditions and feedback we have received, it would be difficult to seat a quorum in person at this time.

We will proceed with the district caucuses and annual meeting virtually utilizing the previously announced schedule for Dec. 3. The caucuses will begin at 10 a.m. that day followed by the annual meeting of delegates at 11:30 a.m. We will utilize the ZOOM platform for these meetings. Additional information will be provided prior to the date of the meetings.

ArFB Women’s Leadership Announces Top Honors for 2020, page 2

We are recommending that voting delegates for each county convene at their county Farm Bureau office on Dec. 3. This will help ensure we can communicate well with all participants. In addition to the ZOOM format, we will be utilizing a secure online voting format called eBallot for any necessary votes that may occur.

It is very important that the delegate information be correct when it is submitted for certification. Please ensure all county delegates have a member number that is active on Dec. 3 and provide an email and cellphone number to allow state staff to contact delegates if needed to ensure all are able to participate.

The Farm Bureau staff has already begun the difficult task of converting these meetings to a virtual format. While we realize this is not a perfect solution, it will allow the organization to conduct its annual business in an orderly fashion. There may be problems along the way but please be assured that we will do everything necessary to make this work. This will most likely involve additional communication over the next two weeks, including direct contact with county Farm Bureaus and registered voting delegates. We appreciate your patience and willingness to work with us to make this work.

Certainty and Stability for AEWR, page 2

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A PUBLICATION OF THE ARKANSAS FARM BUREAU FEDERATION

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ArFB WOMEN’S LEADERSHIP ANNOUNCES TOP HONORS FOR 2020 Congratulations to all of the Women’s Leadership Committees placing in the top three of their membership categories. Announcements were made throughout the week on the ArFB Women’s Leadership Facebook page highlighting the work each of the county committees has done throughout the year.

Membership Category 1 Top Committee – Lee County Second Place – Calhoun County Third Place – Lafayette County Membership Category 2 Top Committee – Scott County Second Place – Stone County Third Place – Woodruff County Membership Category 3 Top Committee – Hempstead County Second Place – Van Buren County Third Place – Jackson County Membership Category 4 Top Committee – Boone County Second Place – Conway County Third Place – Independence County Membership Category 5 Top Committee – Benton County Second Place – Craighead County Third Place – White County “Each of these committees have worked hard this year promoting agriculture in their county. We are so proud of their dedication to Farm Bureau, and the agriculture industry,” said Amanda Williams, ArFB director of Women’s Leadership & Farm Bureau Foundation.

The 2020 Women’s Leadership Outstanding Committee and Diamond Award will be announced Dec. 3.

CERTAINTY AND STABILITY FOR A

On Monday, Market Intel reviews how the Department of Labor’s (DOL) final rule amending the methodology for determining the H-2A program’s adverse effect wage rate provides stability and predictability in labor costs and also ensures wage rates under the program continue to increase and keep pace with wage growth observed across the broader U.S. economy.

Significant increases and variability in wage rates for the DOL’s H-2A temporary agricultural guest worker program have long been a problem for farmers. For example, during 2019, wage rates under the H-2A program increased by more than 20% in Colorado, Nevada and Utah. In California, wage rates have increased by more than 30% since 2015, and in 32 states the wage rate has increased by more than 20% since 2015. The national average H-2A wage rate increased by 21.2% from 2015, and by nearly 6% in a single year from 2019 to 2020, e.g., 2019 H-2A Sets Records, While a 2020 AEWR Wage Increase Approaches.

Meanwhile, data from the Bureau of Labor Statistics indicates that since 2015 labor costs across the broader U.S. economy rose by 13.5%, and from 2019 to 2020 the Employment Cost Index rose by less than 3% – both well below the increase in wage rates in DOL’s H-2A program. For U.S. employers, including crop and livestock farmers, the volatility and rapid increase in H-2A wage rates has significantly increased labor costs.

During 2020, according to USDA’s Farm Income and Wealth Statistics, farmers and ranchers are expected to spend more than $36 billion on labor expenses – the second-highest labor expenditure on record. Now consider that in many labor-

USDA FOREST SERVICE ANNOUNC KEY CHANGES TO NEPA PROCED

The USDA Forest Service today announced the publication of a final rule implementing key changes to its National Environmental Policy Act (NEPA) regulations. The changes include new tools and flexibilities to tackle critical land management challenges as part of a broader agency effort to better serve the American people through timely, high-quality management decisions affecting infrastructure, permitting and restoration of natural resources on their national forests and grasslands.

“These changes will ensure we do the appropriate level of environmental analysis to fit the work, locations and conditions,” said U.S. Secretary of Agriculture Sonny Perdue. “The new categorical exclusions will ultimately improve our ability to maintain and repair the infrastructure people depend on to use and enjoy their national forests – such as roads, trails, campgrounds and other facilities.”

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A PUBLICATION OF THE ARKANSAS FARM BUREAU FEDERATION

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intensive specialty crop farming areas, such as in California, Florida and Washington, and many portions of the Northeast, labor expenses represent more than 20% of total production costs. For farmers in these states, a rapid and unforeseen increase in labor costs cannot be easily absorbed, given that farmers are price takers and cannot pass higher costs down the supply chain to retailers or consumers.

Background The H-2A program allows U.S. employers, such as farmers and ranchers, to bring foreign nationals into the United States to fill temporary agricultural jobs. Wage rates under the H-2A program are based on the higher of the following: federal or state minimum wage; the prevailing wage as determined by the Department of Labor using a special methodology to conduct wage surveys for each particular task in very local areas; or the adverse effect wage rate, defined as the regional weighted average hourly wage rate for crop and livestock workers reported in USDA-National Agricultural Statistics Service’s annual Farm Labor Survey of Non-Supervisory Farm and Ranch Workers.

Hog Trap | The Pope County Farm Bureau recently partnered with ArFB to purchase a portable hog trap to combat feral hog problems. The trap will be available for use to county members after the beginning of the new year. Interested county members should contact the Pope County Farm Bureau office for more information.

Since 2015, the nationwide monthly wage rate under the H-2A program has increased nationally by more than 20%. Areas with the highest increase in wage rates, on a percentage basis, include California at more than 30%, the Pacific Northwest at nearly 28% and portions of the Northeast at nearly 27%. The wage rate in Western states such as Colorado, Nevada and Utah, the Great Lakes region and the Corn Belt have all jumped more than 25% in the past five years. The slowest wage growth since 2015, 10%, occurred in the northern Plains.

CES DURES

Categorical exclusions are a type of analysis for certain activities that typically do not have significant environmental effects.

The rule establishes new or revised categorical exclusions that eliminate redundant efforts, allowing for previous environmental analyses to be used to support new decisions under certain circumstances, among other efficiencies.

The Forest Service finalized the regulations following its review of extensive public engagement and decades of experience complying with NEPA, one of the nation’s foundational environmental laws. The changes will allow Forest Service officials to concentrate resources on projects that are potentially more complex or have greater public interest, while also meeting NEPA requirements and fully honoring the agency’s environmental stewardship and public engagement responsibilities.

Homegrown by Heroes | ArFB’s Jason Smedley, assistant director of local affairs/rural development, was presented a Arkansas Grown/Homegrown by Heroes sign for Smedley Family Farm by Arkansas Secretary of Agriculture Wes Ward.

DEADLINE REMINDER The deadline to sign up for CFAP 2 is Dec. 11.

Agriculture producers of row crops, livestock, specialty crops, dairy, aquaculture and others may be eligible for financial assistance through the Coronavirus Food Assistance Program.

The program is designed to assist agriculture producers in overcoming increased marketing costs and price weakness due to COVID-19.

For more information, producers should go to www.farmers.gov/cfap.

A PUBLICATION OF THE ARKANSAS FARM BUREAU FEDERATION

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MARKET NEWS as of November 18, 2020 Contact Brandy Carroll 501-228-1268 brandy.carroll@arfb.com

Red Meat, Poultry and Dairy In the November Supply/Demand report, USDA raised their 2020 red meat and poultry production estimate from last month, with increases seen in beef, pork and broiler production. Turkey and egg production estimates were both lowered.

The milk production forecasts for 2020 and 2021 were both raised from the previous month on stronger growth in milk per cow and a higher expected dairy cow inventory. The 2020 fat basis import forecast was raised on recent trade data and higher expected imports of cheese and butterfat products in the fourth quarter. This strength is expected to carry into 2021 supporting a higher 2021 fat basis import forecast. The fat basis export forecast for 2020 is raised on higher expected exports of cheese and butterfat; no change is made to the 2021 fat basis export forecast.

Cheese, nonfat dry milk, and whey prices forecast for 2020 are raised from last month on strength in demand. The butter price forecast for 2020 is reduced on current and expected continued weakness in prices. The 2020 Class III price forecast is raised on higher prices for cheese and whey. The Class IV price forecast is unchanged from last month as the higher NDM price offsets the lower butter price. The 2020 all-milk price forecast is raised to $18.25/cwt.

For 2021, cheese, NDM and whey price forecasts are raised on continued strength in demand. The butter price forecast is reduced on lower expected prices through the first part of the year.

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The 2021 Class III price forecast is raised on higher forecast prices for cheese and whey. The Class IV price forecast is reduced as the lowered butter price more than offsets the increase in NDM. The all-milk price forecast for 2021 is raised to $17.70/cwt.

Cattle Cattle futures have lost ground this week. February has found resistance at $115.50, which could be the top of the recent rally. Last Friday, the market violated the uptrend and closed a sizable chart gap before finding support near $112. January feeders have also retraced last week’s big gains after finding resistance at $141.50.

Hogs Hog futures sold off hard last Friday, retracing the week’s gains. However, we have seen little follow-through weakness. Expectations for lower production in the near term are cited as supportive, although the cash hog market remains soft. The February contract has found resistance just below $68, with support at $64.

Corn The November production and supply/ demand reports held bullish news for corn prices. USDA cut 215 million bushels off their production estimate, bringing the total to 14.5 bushels, down 1% from the previous report.

Yields are projected to average 175.8 bushels/acre, down 2.6 bushels from the October report. Adding to the positive was an increase in the export projection of 325 million bushels. The net result of the reports was a projected U.S. stocks/use ratio for 20/21 of 11.5%, the lowest in 8 years. December corn set new highs in reaction to the report, finding resistance at $4.28. The market has backed off that level for now, but selling pressure has been limited.

Support is now $4.16-$4.17. December 2021 charted a new high close of $4.07½ on Tuesday, and has support between $4 and $4.02.

Soybeans Soybean futures exploded higher in reaction to the November reports.

A PUBLICATION OF THE ARKANSAS FARM BUREAU FEDERATION

USDA now estimates the crop at 4.170 billion bushels. That is well below even the lowest trade estimates. The ending stocks estimate was lowered to only 190 million bushels, leaving the stocks to use ratio at 4.2%–the lowest since 2013-2014. Uncertainty about South American crop prospects are also providing support. We are beginning to see indications of profit-taking, which could limit the up side. January futures hit at a new 4-year high this week at $11.78¼. Deferred contracts are also trending sharply higher, but over $1 discount to current crop contracts, as these higher prices will certainly impact farmer planting decisions this spring.

Cotton The cotton market was caught offguard by the USDA reports, which showed few changes for cotton. USDA raised production by 40,000 bales while the industry was expecting a cut of nearly half a million bales. USDA left the ending stocks estimate at 7.2 million bales. They did raise the projected onfarm average price by 3 cent/lb. to 64 cents. The harvest was reportedly 69% as of Sunday. That is slightly ahead of the 5-year average of 64%. December futures are trading in a mostly sideways pattern between support at 68 cents and resistance at 71 cents.

Rice The USDA reports didn’t hold much news for rice, with the production report cut by a seven pound/acre reduction in the average yield. The all-rice carryout forecast was increased by 1.8 million cwt, which resulted in an ending stocks estimate of 20.8 million cwt. from last year. USDA did increase their average on-farm price by 10 cents to $12.90. January is building support at $12.23, and longer-term support is found at the spike low of $12.05.

EDITOR Ashley Wallace ashley.wallace@arfb.com