Tag Archives: Nebraska Farm Bureau

Price movements and volatility over the past month for commodities have been striking. Figure 1, prepared by the Federal Reserve Bank in Kansas City, shows price changes and volatility indexes this year compared to last year for selected commodities and equity indexes. The COVID-19 pandemic, economic stoppage, consumer behavior, and underlying supply and demand conditions created a whirlwind of uncertainty and volatility in the markets. In order to get a sense of how the commodity price movements might impact Nebraska agricultural producers, estimates were calculated on how the changes in prices in March could impact revenues for Nebraska’s three largest agricultural sectors—beef cattle, corn, and soybeans.

FIGURE 1: CHANGES IN PRICES & VOLATILITY, SELECTED COMMODITIES
Source: From presentation by Nathan Kaufman, Federal Reserve Bank of Kansas City, on webinar sponsored by FarmDoc Daily at the University of Illinois, March 27, 2020.

 

Beef Cattle: Estimates of the potential impact to Nebraska’s cattle sector were calculated borrowing approaches used by Kansas State agricultural economist Glynn Tonsor. Tonsor calculated the price changes over the past few weeks could impact the nation’s cattle sector between $7.98-$9.4 billion. Estimating impacts to the cattle sector is complicated by the different sectors in the industry (cow/calf operators, stockers, backgrounders, and feeders) and the timing of cattle sales throughout the year.

 

Informal inquiries of persons in the industry suggested 95 percent of the cows in Nebraska calve in the spring. Of the calves born, 75 percent are weaned and sold in the fall, a few are kept and sold as yearlings the following year, and the remainder backgrounded and sold in winter or early next spring. Assuming 20 percent of last year’s calf crop was held and backgrounded for sale in April and using the April feeder cattle futures contract declines between March 2 and March 25 of $6.60/cwt., results in a $49.50 per head or $17.8 million impact to these producers. Assuming a calf crop of 1.77 million head this year, with 75 percent of the calves sold in the fall, and using the declines in the October feeder cattle futures contract, equates to a potential $71.9 million impact to the sector.

 

The USDA reported 2.5 million head of cattle in the state’s feedlots as of March 1. Estimates of the impacts to the feeding sector are complicated by the fact some of the cattle in the feedlots had already been marketed, or hedged, prior to March, but some not. Additionally, the price changes in March changed the economics of cattle placed in feedlots during the month and over the remainder of the year. So, using the average decline in the April and August feeder cattle futures contracts between March 2 and March 25 of $7.56/cwt., or $105.84 per head, and assessing it against the 2.5 million head on feed on March 1 suggests an impact of $264.6 million. In total, then, the price declines in the cattle markets between March 2 and March 25 might have a $354 million impact on the state’s cattle sector.

 

Corn/Soybeans: According to data provided by the Nebraska Corn Board, 43 percent of the corn marketed during the year is sold in the months of March-September, and 36 percent is sold between October-December. For these estimates, the assumption was made soybeans are marketed similarly. To calculate the price declines, changes in the appropriate futures contracts between March 2 and 25 were used, and changes in the basis were also considered using Kansas State University crop basis maps. Using last year’s crop production numbers, and the assumptions noted above, corn and soybean producers selling 2019 production this year could see an impact of $387 million. Using assumptions of crop production levels this year, and the share of new crop production which will be sold yet this year, equates to impacts on this year’s production of $280 million. So, the total potential impact to corn and soybean producers could amount to $667 million.

 

Summary: Compared to pre-COVID prices, Nebraska’s cattle, corn, and soybean producers might see a potential impact of $1.02 billion, or 5 percent of Nebraska’s annual agricultural receipts. These estimates are simplistic and do not account expense reductions which might occur which could offset the revenue impact. For these reasons, the estimates are intended to provide a sense of the magnitude of the impacts to Nebraska’s largest industry during these uncertain times and volatile prices and not an accurate accounting. Fortunately, for some in agriculture, there is flexibility regarding the timing of sales so they might be able to seize better market opportunities over the next few months.

LINCOLN, NEB. – Nebraska Farm Bureau is advising farmers, ranchers, and other rural Nebraskans to not underestimate the risk posed by the potential spread of COVID-19. While most of the confirmed and presumptive cases of COVID-19 have occurred in Eastern Nebraska, Nebraska Farm Bureau President Steve Nelson is urging all Nebraskans to take precautions to help minimize the potential for spread and encouraging farmers and ranchers to prepare for possible impacts to their rural communities and agricultural operations.

“I know some may view the COVID-19 outbreak as only a concern to our state’s high-density population centers, but make no mistake, the potential for the spread of COVID-19 to rural areas is real. It’s especially serious considering the unique challenges rural hospitals and health care providers may face in treating and containing the virus. It’s imperative we all do our part to try and slow the spread of this highly contagious disease. It’s also critical we make sure our farm and ranch operators are ready to deal with possible ramifications in the event of expanded spread,” said Steve Nelson, Nebraska Farm Bureau president.

To aid agriculture producers in preparing for potential COVID-19 expansion, Nebraska Farm Bureau developed a list of things for farmers and ranchers to consider, covering topics from personal health to operational preparedness.

“There’s no reason for panic, but every reason to plan ahead and be prepared,” said Nelson.

The preparedness list includes:

Protect personal health of farm/ranch owner/operators and employees.

  • Personal health is an important first step. Washing hands frequently, disinfecting shared surfaces, and making sure soap and other sanitization supplies are available to employees is a key first step. Strengthening immune systems by taking vitamins and making good food choices is another way to stay healthy. For example, beef is good source of zinc that keeps immune systems strong. Doing business over the phone or online when possible can help limit in-person visits and potential exposure.

Plan for possible labor shortages.

  • Ask yourself – what is my plan if my farm help can only work limited hours due to school closings or other events? Are there things my employees can do remotely via technology if they can’t be there in person? Do I have others who can help if my current labor force is unavailable?

Plan for possible supply/input shortages.

  • Do I have a backup for feed, fuel, and other inputs in the event my normal channels or supply lines are disrupted? Do I have enough supplies on-hand to weather short-term disruptions? Do I have enough on-farm storage capacity for fuel and other inputs if there is an extended shortage?

Communicate with those with whom you do business.

  • Stay in close contact with your business partners – including both input suppliers and those to whom you sell commodities and products. Doing so will give you the best information to make decisions. Are processors, co-ops, etc., accepting delivery? Are they running normal schedules and hours?

Communicate any disruptions.

  • If you experience or hear of disruptions in supply chains alert Nebraska Farm Bureau immediately via email at information@nefb.org. Nebraska Farm Bureau will continue to exchange information with state and federal officials focused on addressing disruptions and maintaining a safe food supply.

“Farmers and ranchers play a critical role in assuring the safety and abundance of our nation’s food supply. In the face of COVID-19, it is imperative we as agricultural producers do our part to help maintain our food system. That means being prepared on our operations and taking personal responsibility and precautions to help slow the potential spread of the virus. By protecting ourselves, our communities, and our farms and ranches, Nebraska farmers and ranchers can play a positive role in working with Nebraskans to collectively address the challenges posed by COVID-19,” said Nelson.

LINCOLN, NEB. – It is the one-year anniversary (March 13-14) of one of the most disastrous storms to ravage the state in recent history, causing unprecedented flooding for farmers, ranchers, and rural communities. Nebraska Farm Bureau was there to help, creating the Nebraska Farm Bureau Disaster Relief Fund and collecting $3.4 million to help restore health and safety to individuals and livestock on farms and ranches and in rural communities. One hundred percent of the donations have been distributed, with zero administrative fees charged.

“My calves were surrounded by water, standing there bawling for help. I felt helpless. But Farm Bureau got us hay for two and a half months. They lined up hay, feed, fencing supplies, veterinary supplies to help my sick calves. It was unbelievable what they did for us! I can’t say enough thanks to Farm Bureau for that,” said Tom Geisler who farms with his wife Fran outside of Hooper.

In Spencer, ice chunks 10 to 12 feet high, some the size of cars, took out the Spencer Dam and caused catastrophic damage to the Ruzicka farm, where Willard and his son Anthony, raise cattle near Verdigre. It also took out the water lines in Boyd County where half to two-thirds of county residents were served by the Boyd County Rural Water District. The Nebraska Farm Bureau Disaster Relief Fund helped Ruzicka’s to rebuild, brought water to residents of Spencer and Verdigre, and helped restore the water lines in Boyd County. These are some of the people and places that were able to receive help from the money collected by the Nebraska Farm Bureau Disaster Relief Fund.

“Our regional managers worked side-by-side with Nebraska farmers and ranchers and rural communities to help aid those affected by the challenging weather season. The generosity of people who wanted to help financially or just volunteer their time for clean-up was overwhelming. More than 6,000 individuals and companies donated to the fund. Volunteers have given countless hours of time transporting hay, feed, and veterinary supplies for Nebraska farmers and ranchers who had nowhere else to turn. While we hope this fund will not be needed in the future, we are glad to have a mechanism in place at Nebraska Farm Bureau to provide help to farmers and ranchers when it is needed the most. We stand ready and thank those who supported the flood relief efforts. You truly made a difference for so many individuals,” said Steve Nelson, Nebraska Farm Bureau, president.

The fund was established at the Nebraska Farm Bureau Foundation, a nonprofit organization with the ability to manage donations and relief distributions. The number of requests coming into the Disaster Relief Fund were overwhelming.

“We received a total of $35 million in unmet need requests to the Nebraska Farm Bureau Disaster Relief Fund. Private gifts were critical to meeting the needs of those affected by the storms, especially the necessities needed immediately following the storms. We sent out our final disaster checks early this month to close the fund. We’re pleased to have worked with so many generous people and organizations in Nebraska and across the county who donated to the Nebraska Farm Bureau Disaster Relief Fund,” said Megahn Schafer, executive director of the Nebraska Farm Bureau Foundation.

Needs reported from relief applicants included debris removal; repair of personal property, including homes; fencing and feed for livestock; veterinary expenses; farm equipment and increased transportation costs due destruction of roads and bridges.

For Tom and Fran Geisler, Nebraska Farm Bureau helped them get through this difficult time.

“I don’t know if Tom would have made it through without Farm Bureau. They were right there on our doorstep after this disaster. They just came through for us,” Fran Geisler said.

LINCOLN, NEB. – Nebraska Farm Bureau (NEFB) leaders stressed four key issues facing Nebraska farmers and ranchers, international trade, protecting livestock production, rural broadband, and continued estate tax reform, during an annual National Legislative Fly-In to the nation’s capital March 1-4.

“It’s important for us to travel to Washington, D.C. to express our views to Nebraska’s Congressional delegation in order to put a face and a voice to policy issues and have Nebraska farmers and ranchers tell their stories,” Steve Nelson, NEFB president said, March 6.

NEFB board members, who are all active farmers and ranchers, expressed gratitude to Nebraska’s delegation and the Trump administration for successfully passing the U.S.-Mexico- Canada Agreement (USMCA) and for securing deals with Japan and China. But with the farm economy still struggling, the need to expand agricultural markets continues.

“We urged our delegation and the Trump administration to work to expand market access for U.S. agriculture products in other areas of the world, including the European Union, the United Kingdom, India, and Africa, as exports will likely remain the main avenue to grow U.S. farm and ranch income. We spoke with a trade representative at the Kenya Embassy and talked about expanding our trading relationship including exporting more wheat, which would be a plus for western Nebraska farmers,” Nelson said.

Estate taxes was another discussion point during the fly-in. Nebraska farm and ranch families shouldn’t be forced to pay a substantial tax bill simply due to the death of a family member. The tax code reform package passed a few years ago temporarily doubled the federal estate tax exemption from $5.5 million to $11 million through 2025. This exemption increase however, loses its value if farmland isn’t fairly assessed for tax purposes.

“Sections of the tax code, which allow farmers and ranchers to reduce the land’s valuation to its productive rather than its development value, have not kept up with current trends in the price of farmland. We asked our delegation to permanently increase this valuation reduction, which would help farmers and ranchers avoid paying estate taxes which have the ability to cause financial harm on multigenerational farms and ranches,” Nelson said.

Animal agriculture continues to be in the crosshairs of radical environmentalists, and animal rights activists. Opponents of the livestock industry continue to push to eliminate meat from the diet of Americans and consumers. NEFB board members praised Nebraska Sen. Deb Fischer’s introduction of the Real MEAT Act, which clarifies the definition of beef for labeling purposes and eliminates consumer confusion.

“The protection of Nebraska’s livestock sector has and will always be a priority for Nebraska Farm Bureau. This includes support for Sen. Fischer’s bill and support for the new science of genetically editing livestock and plants, which shows great promise for the future of agriculture,” Nelson said.

Nebraska Farm Bureau leaders also talked about the need to improve broadband coverage in rural Nebraska. Farm Bureau supports the Federal Communications Commission’s (FCC) efforts to roll out their Rural Digital Opportunity Fund and a concept introduced by Microsoft to open TV white space so that it can be utilized to provide expanded broadband coverage throughout the U.S.

“Farmers and ranchers rely on broadband access to manage and run successful businesses and will be left behind if they are without affordable high-speed internet,” Nelson said.

Those attending the Washington, D.C. Fly-In were:

Steve Nelson, president, Nebraska Farm Bureau-Kearney/Franklin County

Bill Baldwin, second vice president, Nebraska Farm Bureau-Scotts Bluff County

Dennis Beethe, southeast region, NEFB representative-Johnson County

David Grimes, south central region, NEFB representative-Kearney/Franklin County

Dave Nielsen, at-large, NEFB representative-Lancaster County

Marty Stewart, northeast region, NEFB representative-Dixon County