Pro Farmer Evening Report: March 22, 2022
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Russia/Ukraine update... Fighting continued as Ukrainian troops forced Russian troops out of a strategically important Kyiv neighborhood. However, Russian forces took partial control of three suburbs northwest of Kyiv, where there’s been fighting for weeks. Russian ground troops remained mostly stalled out of Kyiv. Russia is attacking Mariupol from ships in the Sea of Azov. There was no firing on Odesa as there was over the weekend. U.S. officials say there is no sign an escalation of fighting is imminent.
There are indications that Russia has used a significant number of its precision-guided weapons and is looking for ways to resupply. U.S. officials say Russia has trouble getting food and fuel to its troops. Some troops don’t have proper cold-weather gear and are suffering frostbite.
Talks between Ukraine and Russia continue. However, there does not seem to be any news of significant progress.
Farmers start planting in parts of Ukraine... Ukrainian farmers have started to plant crops in southern and northwestern parts of the country, according to its ag ministry. In the southern region, Odessa farmers had planted 30,000 hectares of barley out of the planned 750,000 hectares. Farmers had 80% of the seed, 62% of crop protection products and 46% of their needed fuel. Farmers in Mykolaiv have been applying fertilizer for their winter crops and planting peas. Mykolaiv farmers reported they have 70% of their needed seed. Governor Vitaliy Koval said farmers in Ukraine’s northwestern Rivne region have started planting spring wheat, oats and sugar beets. Two-thirds of the winter crops in the area are fertilized. Farmers are expected to plant 420,000 hectares, including spring grains, sunflowers and soybeans.
Ukraine cuts 2022 spring crop acreage projection... Ukraine Agriculture Minister Roman Leshchenko says only about half of last year’s spring crop acreage will get planted this year. Total planted crop area is expected to reach 7 million hectares, compared to 15 million hectares last year. Farmers are predicted to plant 3.3 million hectares of corn, down from 5.4 million hectares in 2021. He noted the country has a large amount of corn in storage. Ukraine’s government has urged farmers to plant more spring wheat, buckwheat, oats, millet and spring barley. Last year, farmers planted 176,000 hectares of spring wheat. They planted 6.5 million hectares of winter wheat. However, they are only expected to harvest 4 million hectares of it. Leshchenko noted dry conditions can still affect what gets planted.
CP Rail and union end work stoppage... Canadian Pacific Railway (CP) and the union agreed to final and binding arbitration that returned workers to the job on Tuesday afternoon, CBC reported. The railway will resume normal train operations as soon as possible. Federal mediators have been meeting with both sides in the labor dispute.
Brazil suspends import taxes on some food items and ethanol... To curb inflation, Brazil’s Economy Ministry announced coffee, margarine, cheese, pasta, sugar, soyoil and ethanol import taxes are suspended until the end of the year. The ethanol import tax suspension will lower gas prices by 4.1 cents per liter, according to the Brazilian government. Import taxes on capital goods, computer and telecommunication products will be permanently reduced by 10%. The tax cut is expected to cost $202.8 million.
However, Reuters reported some analysts were skeptical of the practical effect of the cuts and said it was more political than business. Luiz Fernando Roque, an analyst for Safras & Mercado, explained soyoil demand has already dropped and the country could reduce exports. Brazil already purchases soyoil from Argentina with no taxes. He noted it would have been more interesting if soymeal was on the list. Imported ethanol prices with no taxes still would be 8% to 10% higher than locally produced fuel. Locally-produced ethanol prices will likely drop when sugarcane crush starts in April. Brazil is also the top exporter of sugar and has the lowest sugar price globally.
IHS Markit lowers 2022 corn, wheat and cotton acres... In the latest projections, IHS Markit expects U.S. farmers to plant more beans and less corn, wheat and cotton acres than its January forecast. Based on an early March survey, the firm estimates farmers will plant 91.4 million acres of corn, 70,000 acres lower than its January forecast and 1.9 million less than last year. Projected soybean acreage was increased 775,000 acres from the January forecast and 1.4 million acres from last year to 88.6 million acres. All wheat acres are estimated at 47.5 million acres, 690,000 acres lower than the January prediction but 764,000 acres more than 2021. The firm expects all cotton acres to be 11.7 million, down 95,000 acres from January but a 520,000-acre increase from last year. The firm expects farmers to plant more acres to oats, barley and sunflowers than in 2021. Grain sorghum and rice acres are predicted to be less than last year.
IHS Markit is projecting total crop acres to be up slightly and combined corn and soybean acres to total 180.0 million acres, close to the Pro Farmer/Doane survey of 179.7 million acres. Some traders expect 2022 corn and soybean acres to be more than the 180.6 million acres planted last year. The firm noted that with higher commodity prices, planted acres might increase.
Discord on House Agriculture Committee over meat packer hearing... A hearing scheduled for April 27 on the meat packing industry announced by House Agriculture Committee Chairman David Scott (D-Ga.) has revealed another friction point with the panel’s Ranking Member GT Thompson (R-Pa.). “It is well known that among the four companies that dominate this market, there have been a number of allegations and investigations,” Scott said in announcing the hearing. “It is critical that we find out if industry concentration and anti-competitive behavior is playing a role in inflating prices for consumers and preventing ranchers from receiving a fair price.” He noted the four companies have been “enjoying record profits” and said it was “time for the Agriculture Committee to address this very important issue.”
Rep. Thompson said Republicans on the panel were not consulted at all on the coming hearing... “If there has been manipulation or wrongdoing by packers, then the law needs to be enforced under the existing authorities at both USDA and DOJ [Department of Justice],” Scott said in a statement given to some news outlets, including Pro Farmer. “Unfortunately, this hearing — scheduled with zero input from Republicans — has the appearance of a political charade designed to further this administration’s narrative of blaming industry executives, instead of the Democratic party’s own reckless spending, for skyrocketing inflation.” He also chided Scott for setting the hearing on other issues are hitting agriculture, including the Russian invasion of Ukraine, rising input prices and increasing global hunger. “While I remain committed to working on bipartisan commonsense solutions, I am very disappointed in this Committee’s direction,” Thompson said. Scott said he invited the CEOs of the four largest U.S. meat packers to testify at the session. The situation continues what has been deteriorating bipartisanship in the House Agriculture Committee and that could become another hurdle for lawmakers to grapple with as they seek to write the next farm bill.
New Nebraska beef plant one step closer... A new beef slaughtering plant in western Nebraska is one step closer after a $21.5 million redevelopment contract for Sustainable Beef, LLC was approved by the Community Redevelopment Authority. It is the second to last step before groundbreaking for the $325 million plant near North Platte, Nebraska. Sustainable Beef, LLC plans to break ground later this spring. Located right off Interstate 80, officials say cattle producers within a 200-mile radius will have easy access to the plant that is projected to have a daily kill capacity of 1,500 head.
