An Energetic Outlook
I felt energetic in this afternoon's mild weather and slayed a couple of trees that have been my watch list for a couple of years; I'm home alone and baching makes forgiveness easier than permission. I was surprised to find how swollen the buds were - I realize the first of February is in a couple of days, yet after the cold temps of December and early January, I had expected spring to be at least a few more weeks off...Punxsutawney Phil, you're up next!
2018 Farm Bill - The first of many field hearings has been scheduled to take place in Manhattan, KS, on February 23rd. Manhattan is home to K-State, America's first land grant university. K-State is also the alma mater of Senator Roberts, whom just happens to serve as Chairman for the Committee on Agricultural, Nutrition and Forestry.
CRP land transfer - Earlier this month, USDA announced it will again offer early termination opportunity for some CRP contracts, making transfer to the next generation of farmers and ranchers easier, including family members. The land that is eligible for the early termination is among the least environmentally sensitive land enrolled in CRP. Please contact your local FSA office for more details.
Criminals - Proof positive that bad guys and crooks are not Rhodes Scholars...I recently read a story about cyber-criminal mastermind that successfully pirated bank funds, however the system he used had an IP address that was registered to his home, making his discovery and corresponding arrest relatively easy for local authorities - note to self...
Dollar strength - Increased interest rates again this year, perhaps multiple times? This would be opposite of President Trump's stated objective for the US dollar...with the financial uncertainty surrounding financial markets especially the Euro, current dollar index is near 14 year highs. Be skeptical of the Fed's rate signals
Dry Peas - RMA has made a change in the release date of the Harvest Price for Revenue Protection. Effective for the 2017 crop year, the final harvest price will be announced no later than 1/15 of the following crop year, which is an additional 30 days from prior years. What this means to you is that any revenue claims will delayed in their payment from the current calendar year to the following calendar year. If not already received, insureds with the revenue endorsement will soon be receiving new policy language directly from the crop company.
Financials/Housing - A recent WSJ article about the housing market and the fact that banks have retreated from issuing FHA-backed loans. A chart and 1000 less words from me...first time in history that this bond segment has surpassed $1 trillion mark. Wall Street Journal:Mortgage watch
Iowa runoff - In one of several forthcoming rulings on the Racoon River watershed district northwest of Des Moines, the Iowa Supreme Court ruled on Friday that Des Moines Water Works would not be able to collect/receive damages in a lawsuit filed in 2015. Des Moines Ruling
- Mexico is upset, creating worries in the corn market about purchases, yet ethanol production continues to increase and is at or near weekly record output. Chinese continue their robust corn purchases (as a reminder, 50% of world stocks according to USDA), and USDA projects the lowest corn prices in 10 years.
- Crude oil is currently at its highest price since July of '15. OPEC trying to stabilize prices with production caps but having limited success herding the cats.
- Although the livestock market was down this past week, it has shown some strength. Cattle feeders have had positive margins for 2 months. Feeder cattle prices have strengthened since late October...is it time to protect these prices?
- Soybeans had a record yield in the US, yet the price has rallied since harvest due to demand that doesn't seem to wane. South American beans will be online soon, and that normally shifts buying from US to Brazil.
- The US has planted the smallest winter wheat crop since William Taft was President. Bushels abound, Chinese continue with US wheat purchases (USDA maintains half the worlds inventory resides there). The US has sold more than 80% of the USDA expectations for the marketing year, sales are 26% ahead of prior year and that includes USDA's projected demand increase of an additional 26%. Rumors of a Russian troubled wheat deal with Syria - Russia having difficulty finding enough wheat, because the price was set too low compared to current prices! Boris Badenov and the Syrians in quandary over a sale agreement, oh my! Has anyone seen or know the whereabouts of Natasha Fatale?!?
Practical to replant - RMA has added additional language to the definition of practical to replant. The definition now contains the following sentence: "It will be considered to be practical to replant within or prior to the late planting period, or on or prior to the final planting date if no late planting period is applicable..." What this new language means is that the policyholder must replant into the late planting period, if the insured crop has previously sustained damage or a loss.
Property Casualty Insurance - This article provides some amusing reading and the "...I can't believe someone actually did that." Here's what not to do if found in similar circumstances, especially if you have deer targets that are currently not being used. By the way, we do write farm packages and in some cases have been able to save the customer up to 30% in premium for equal or better coverage. Coverage for Dummies Hall of Fame
Weather - Siberian cold over Russian wheat acres could impact 1.7 - 2.2 million acres of winter wheat as very little snow cover exists. South American weather has turned favorable, after heavy rains and areas of flooding earlier. Favorable conditions exist for developing soybeans in Brazil. Soil moisture conditions are very good for second crop planting, the earlier planting of the initial crop that's corresponding to an earlier harvest. Short term forecast for our region suggests mild temperatures for the near future, whereas moisture is to above normal for the next week.
WFRP - Whole Farm Revenue Protection deadline of 3/15 is fast approaching. If you've experienced discounts on your wheat due to falling numbers and protein in the past two years, or growing alfalfa w/o any protection for quality, this may be a product that fits your operation. Please don't delay as there is much paperwork associated with the proper set-up of this policy.
I hope to chat with you at one of the upcoming grower meetings this month. Until then...
One man with courage makes a majority...
McGregor Risk Management Services, LLC
Cell - 509.540.2632
Office - 509.843.2599
Fax - 509.843.2583