A recent update at AgriBank stated that, “In some industries, new professionals might sit in a cubicle, draw a salary and let others figure out how to run a profitable business. In farming, however, new producers must figure out why they want to work long hours in fields, pastures or feedlots, how they can turn that effort into a steady income, and what type of farm operation they can successfully operate from one year to the next.

“Not surprisingly, that type of grit and determination can make a big difference with agricultural lenders.

“‘If a beginning farmer doesn’t show a high level of excitement for life on the farm, that will make it hard for a loan officer to say ‘yes’ to financing,’ said Gary Matteson, vice president for Young, Beginning, Small Farmer Programs and Outreach at the Farm Credit Council in Washington, D.C.”

The AgriBank update noted that, “Business plans are a routine part of the financing process for virtually any business. However, 63 percent of current producers who participated in a recent Sustainable Agriculture Research and Education (SARE) survey said they had no formal business plan when they started farming. That lapse may help explain why a majority of respondents also said they were ‘not very successful’ at maintaining profitability, managing expenses, and insuring their operations.

“In essence, the business plan outlines a strategic overview of what a beginning or young producer wants to accomplish, and why they are a good candidate for achieving those goals.”

The AgriBank update added that, “Building a solid case for operating loans or other financing can be a daunting challenge, particularly for younger producers who have little or no experience with the process. Fortunately, an array of online resources are available to help jump start the task. For example, the AgPlan tool developed by the University of Minnesota allows users to customize business plans by type of operation, and share drafts for feedback from select advisers or farm educators. The U.S. Department of Agriculture (USDA) also provides a substantial library of farm business planning resources through its New Farmers and Start2Farm websites.”

Gregory Meyer reported yesterday at The Financial Times Online that, “The world’s biggest agricultural commodities trader is taking steps to ‘de-commoditise.’

“That was the term invoked by a Cargill senior executive as he described how shifting food preferences were changing the Minneapolis-based company.”

Mr. Meyer explained that, “The term was jarring because Cargill for a century and a half has been known as a quintessential commodity merchant, handling rivers of grain, oilseeds, sugar and other foodstuffs.

“But as a growing bloc of consumers demand natural food, which lacks certain traits such as bioengineered genes, or food grown according to certain social or environmental standards, Cargill has tweaked aspects of its bulk supply chain.

“The company created a GMO-free corn syrup in response to changes at a confectionery customer, its annual report said. Marcel Smits, Cargill’s chief financial officer, explained in New York last week that to do so Cargill dedicated one plant to make it, representing 10 per cent of its volume in the sweetener. He also cited customer demand for yoghurt that was non-GMO, which reaches into the supply of grain used for cow feed.”

The FT article added that, “Cargill is one of the biggest cattle processors in North America, producing almost 8bn pounds of boxed beef and byproducts a year, according to its website. Now the company is able to ‘keep the meat of 20 animals separate all the way through, to the box that it ultimately goes into.'”

A news release on Tuesday from the House Agriculture Committee indicated that, “Today, Rep. David Rouzer (NC-7), Chairman of the House Agriculture Committee’s Subcommittee on Livestock and Foreign Agriculture, held a hearing on the market outlook for the livestock, dairy and poultry sectors. This was the final hearing in the Focus on the Farm Economy series, where each of the six subcommittees examined the growing pressures in rural America from the perspective of their subcommittee [note that a summary of the first five hearings can be found here]. Members heard from a panel of witnesses who highlighted the current conditions farmers and ranchers are facing as well as their concerns with recent and proposed regulations.

“‘Many farmers and ranchers across rural America are facing significant financial challenges. Producers are experiencing a decrease in commodity prices with no relief in sight, markets are weak, and over the past three years, net farm income has fallen by 56 percent. Farmers are facing razor tight margins, making them even more vulnerable to any additional regulatory burdens.’ said Subcommittee Chairman Rouzer.

Dr. Scott Brown, a Professor at the University of Missouri, noted at Tuesday’s hearing that, “Extreme livestock market volatility has become expected by all. Long-term survival may depend critically on risk management plans adopted by individual operations. Marketing livestock or milk using a cash market strategy is a risk management strategy that works well in rising markets but provides little help in declining markets.

Recall that Vermont is set to implement a GMO labeling requirement that goes into effect on July 1.

The U.S. House, last summer, passed a bill that would preempt existing state mandatory labeling laws, such as the labeling law passed in Vermont, but so far, the U.S. Senate has failed to pass a similar measure.

House Agriculture Committee ranking member Collin Peterson (D., Minn.) has indicated that, “[T]he biggest problem we have in agriculture is all of this labeling,” while Senate Ag Committee ranking member Debbie Stabenow (D., Mich.) has noted that finding the right balance on the labeling issue has been very difficult.

Meanwhile, more companies have moved to label products that contain GMO materials as July 1 fast approaches.

And the Los Angeles Times editorial board pointed out on Sunday that, “A sweeping new study of genetically engineered crops released this week has found no evidence that they are unsafe for human consumption. They don’t cause diabetes, cancer, obesity or food allergies, and are safe for livestock as well, researchers for the National Academies of Sciences, Engineering, and Medicine concluded.

“That should offer some relief to Americans, since an estimated 70% of packaged food contains some genetically modified organisms. The findings from the venerable National Academies also should put a damper on the growing efforts to force foodmakers to slap labels on food containing GMOs. Beginning this summer, Vermont will be the first state to require labels; other states are considering similar measures.”

Nicole Heslip reportd on Friday at Brownfield that, “Ranking Member Debbie Stabenow says she and Senate Ag Committee Chairman Pat Roberts have finally sat down to talk about GMO labeling.

“‘I’ve been putting together various proposals and working with the Chairman.’ She says, ‘Five weeks ago I gave him complete legislation and this week he finally wanted to sit down and talk about it and see what we could work out.’

“She tells Brownfield whatever legislation goes to the Senate will need a supermajority of 60 votes to pass- and pass the House — before Vermont’s law goes into effect July 1st. A previous attempt by Roberts for a voluntary system failed a Senate vote in March.”

A news release yesterday from the Organic Trade Association indicated that, “The booming U.S. organic industry posted new records in 2015, with total organic product sales hitting a new benchmark of $43.3 billion, up a robust 11 percent from the previous year’s record level and far outstripping the overall food market’s growth rate of 3 percent, according to the Organic Trade Association’s 2016 Organic Industry Survey.

“The industry saw its largest annual dollar gain ever in 2015, adding $4.2 billion in sales, up from the $3.9 billion in new sales recorded in 2014. Of the $43.3 billion in total organic sales, $39.7 billion were organic food sales, up 11 percent from the previous year, and non-food organic products accounted for $3.6 billion, up 13 percent. Nearly 5 percent of all the food sold in the U.S. in 2015 was organic.”

Secretary of Agriculture Tom Vilsak stated yesterday that, “America’s organic industry is booming, creating important opportunities for farmers and ranchers and adding to the vibrancy of rural America. Under the Obama Administration, we’ve made transformative investments to help the organic sector thrive by making certification more attainable, providing more support for organic operations, and expanding international markets. As consumer demand continues to grow, USDA is here to support producers and help them access the hunger for American-grown organic products.”

Recall that the House Agriculture Committee is conducting a Focus on the Farm Economy series where each of the Committee’s six subcommittees are examining the growing pressure in rural America; a link to brief summaries of the first five of these hearings is available here.

Meanwhile, a news release from the Senate Agriculture Committee yesterday indicated that, “U.S. Senator Pat Roberts, R-Kan., Chairman of the Senate Committee on Agriculture, Nutrition and Forestry, today held a hearing on the Farm Credit System.

“The hearing, titled ‘The Farm Credit System: Oversight and Outlook of the Current Economic Climate,’ had two panels. For witness info, testimony, and to watch the hearing, click here.

“‘Farmers and ranchers all across the country are experiencing difficult economic conditions as farm sector profitability is forecast to decline for the third straight year,’ said Chairman Roberts. ‘Over the past three years alone, net farm income is expected to decline by 56 percent.'”

At yesterday’s hearing, Chairman Roberts pointed out that, “As our nation’s farmers and rural communities continue to deal with low commodity prices and elevated input costs, access to affordable credit in rural America is as important today as ever.

“The spring 2016 Agricultural Lender Survey released by Kansas State University’s Department of Agricultural Economics expects the credit environment for farmers to remain difficult for at least a few more years.”

Kenneth A. Spearman, the Chairman and Chief Executive Officer at the Farm Credit Administration, stated at yesterday’s hearing that, “U.S. farmers and ranchers are in the midst of serious belt tightening. Commodity prices have declined sharply while input costs have been slow to adjust downward. Many crop and livestock producers are operating with narrow, or even negative, profit margins.

“An extended downturn in the farm sector would be a major challenge for U.S. agriculture. Over the past two years, many farmers have been coping with a declining market by using working capital generated during the previous period of strong earnings. As a result, the System has recorded relatively low loan losses and maintains a strong financial position to date. However, if commodity prices continue to be weak for another year or two, we expect significant financial stress on borrowers as working capital erodes further and as farmers make additional cuts to capital expenditures, household spending, and operating costs.”

And Donnelle Eller and Christopher Doering reported on the front page of today’s Des Moines Register that, “Depressed commodity prices and plunging farm income across the Corn Belt are reshaping the Iowa and the U.S. agricultural landscape.

“It is forcing mergers of ag giants such as Dow, DuPont, Monsanto and Syngenta; squeezing local and regional elevators, implement dealerships and manufacturers into consolidating; and winnowing the number of farmers dotting rural America.”

The Register writers explained that, “The farm downturn is being driven by three years of lower commodity prices, combined with stubbornly high costs for seed, chemicals and other inputs needed to grow corn and soybeans.”

Today’s article stated that, “Moline, Ill.-based Deere & Co. is buying majority interest in Hagie Manufacturing, a Clarion-based maker of high-clearance sprayers, and purchased Bauer Built, the Paton, Ia., maker of ultra-wide planters. Land O’Lakes purchased Ames-based United Suppliers, a customer-owned crop seed, fertilizer and herbicide retailer, to fold into its Winfield U.S. division.

“And several local farm equipment dealers and cooperatives are making deals.”

More specifically, Forbes writer Antoine Gara reported yesterday that, “German healthcare and agricultural giant Bayer confirmed on Thursday morning it is in preliminary discussions on a takeover of Monsanto one of the biggest seed and agricultural firms in the United States.”

And Bloomberg writer Mario Parker reported today that, “Deere & Co., the world’s biggest agricultural equipment manufacturer, cut its fiscal full-year earnings outlook as lower commodity prices hurt farmers’ income and a glut of unsold machinery continues to pile up at dealerships.”

A news release last Thursday from USDA stated that, “The U.S. Department of Agriculture’s National Agriculture Statistics Service (NASS) released the results of its first ever Honey Bee Colony Loss survey today. The survey queried more than 20,000 honey beekeepers about the number of colonies, colonies lost, colonies added, and colonies affected by certain stressors and gleans state-level estimates on key honey bee health topics. The survey was developed as part of the ‘National Strategy to Promote the Health of Honey Bees and Other Pollinators‘ released last summer, and gleans state-level estimates on key pollinator health topics.

“Results from the survey will provide statistically strong baseline information about honey bee losses and can help guide honey bee management decisions in the United States. NASS created the survey questions with input from beekeepers and researchers, and other stakeholders. The results will allow USDA and other federal departments and agencies to create a more unified and complementary approach to implementing the National Strategy, which was unveiled in May 2015.”

The release added that, “According to the survey released today, there were 2.59 million or 8% fewer honey bee colonies on January 1, 2016 than the 2.82 million present a year earlier on January 1, 2015 for operations with five or more colonies. New quarterly colony data allow new levels of analysis. For example, there was an 18% loss of colonies in the January-March quarter in 2015 and a 17% loss in the same quarter in 2016. Honey beekeepers with five or more colonies reported Varroa mites as the leading stressor affecting colonies. They also reported more colonies with symptoms of Colony Collapse Disorder lost in the first quarter of 2016 with 113,930 than the 92,250 lost in the same quarter in 2015.”