October 6, 2022

A five-minute summary of AAI, regulation, and industry activities for members of the largest state agribusiness association in the nation.

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• Shipping rates are at record highs on the Mississippi | Interest rates are lowering farmer sentiment

• No rain led to drydown and a good start to harvest

• Latest grain reports | Harvest proclamation extended

• Nitrogen initiative in Iowa is looking for farmers to work with

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A logjam of more than 100 ships, tugboats and their convoys of barges in the shrinking Mississippi River is threatening to grind trade of grains, fertilizer, metals and petroleum to a halt.

The largest U.S. barge operator warned customers it won’t be able to make good on deliveries. Ingram Barge Co. declared force majeure in a letter to customers due to “near-historic” low water conditions on the Mississippi, the top route to get U.S. grains and soybeans to the world market.

Drought has reduced water levels along the biggest U.S. waterway by so much that vessels are running aground. The Coast Guard is responding to grounded vessels in at least two places, near Stack Island between Louisiana and Mississippi, and upriver near Memphis, according to a statement. American Commercial Barge Line, another shipping company, said on in a post on its website that it’s the most severe impact to navigation since 1988.

Covered barges full of grain and soy float from U.S. farm country to terminals in the Gulf of Mexico, while crude oil, refined products and imported steel also travel through sections of the waterway. Some 60% of all grain exported from the U.S. is shipped on the Mississippi River through the Port of New Orleans and the Port of South Louisiana, according to the National Park Service.

[...] Read Full Story

Pesticide manufacturers Syngenta Crop Protection and Corteva Inc. allegedly paid distributors to block competitors from selling less-expensive generic products to farmers, according to a federal complaint filed on Thursday by the Federal Trade Commission and 10 state attorneys general.

The complaint, filed in the U.S. District Court for the District of Middle North Carolina, alleges the two companies run so-called "loyalty programs" in which distributors only get paid if they limit business with competing manufacturers.

"Cutting off competition has allowed the defendants to inflate their prices and force American farmers to spend millions of dollars more for their products," the FTC said in a news release.

Syngenta and Corteva are two of the largest pesticide manufacturers operating in the United States. Syngenta, based in Switzerland, is a subsidiary of a Chinese state-owned company. Corteva, headquartered in Indianapolis, is the company formed as part of a merger between DuPont and Dow Chemical Company.

The FTC was joined in the complaint by attorneys general in California, Colorado, Illinois, Iowa, Indiana, Minnesota, Nebraska, Oregon, Texas and Wisconsin.

The complaint alleges Syngenta and Corteva take "illegal" steps to stop generic pesticides from eating into their profits. The loyalty programs include making payments to distributors -- as long as the distributors keep their purchases of competing generic pesticides beneath a certain threshold.

"Under this scheme, Syngenta and Corteva make more money than they would if they had to compete fairly with generics," the FTC said in a news release.

[...] Read Full Story

Global agricultural productivity growth is in steep decline and current efforts to expand sustainable agriculture production to feed a swelling global population are inadequate to deal with the challenges that the world faces, according to the 2022 Global Agricultural Productivity Report (GAP Report).

Without swift action and long-term resolve, the systems will remain vulnerable to environmental, economic, and societal shockwaves, the data from the 2022 GAP Report, titled "Troublesome Trends and System Shocks," show. The GAP report is produced by the College of Agriculture and Life Sciences at Virginia Tech.

To sustainably produce food and agricultural products for more than 9 billion people in 2050, agricultural productivity must increase an average of 1.73% annually. From 2011-2020, global agricultural productivity grew at an average of just 1.12% per year, a significant drop from the average growth rate of 1.99% from 2001-2010 (USDA ERS).

Current efforts to accelerate productivity growth are inadequate, the climate is going to have a significant impact on production, and regional inequities around the world exacerbate the problem, the report said.

“When agricultural productivity grows, it means we’re producing more with fewer inputs and resources; this increases agricultural sustainability,” said Tom Thompson, an associate dean and director of Global Programs in the college. “Data presented in the 2022 GAP Report shows that global agricultural productivity growth has slowed dramatically, and in the world’s poorer countries it is even shrinking. We urgently need to reverse this trend so that we can improve food and nutrition security, sustainability, and resilience.”

[...] Read Full Story

The Purdue University-CME Group Ag Economy Barometer index declined 5 points to 112 from September which was 5 points lower than a month earlier. Weaker sentiment regarding current conditions was the primary driver of this month’s decline in the barometer — Current Conditions Index declined to 109, 9 points lower than in August. The Index of Future Expectations also weakened slightly, declining 3 points from a month earlier to a reading of 113. Compared to a year earlier, the barometer this month was 10 percent lower while producers’ assessment of current conditions was down 22%.

These results stand in contrast with future expectations in September which was only 2 percent weaker than a year ago. The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from September 19-23, 2022, a week or more following USDA’s September Crop Production and World Agricultural Supply and Demand Estimates (WASDE).

Higher input costs are still the number one concern among survey respondents with the shift in U.S. monetary policy rising to the forefront as an issue among U.S. producers. This month 44 percent of respondents chose “higher input costs” as their number one concern, down from 53 percent last month.

Second on the list of producers’ concerns for the upcoming year was “rising interest rates”, chosen by 23 percent of respondents, up from 14 percent in August. Third on the list of concerns was the “availability of inputs” chosen by 14 percent of producers in the survey. The percentage of producers with concerns about input availability has been relatively stable over the last 3 months, ranging from a low of 12 percent to a high of 15 percent suggesting this issue is not going away.

[...] Read Full Story

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