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NDFC  NEWSLETTER  Bob  Gray,  Editor  

Contact Bob Here:Bgray15452@aol.com and Mike Here: Mike@grayandoscar.com  Phone: 703 751 0204, FAX: 703 751 5735

   

     

In the August 19th, 2016 Edition

• Focus Is On MPP's Recent Dairy Payments • USDA Announces Record Corn and Soybean

Crops for 2016 • Whole Milk Sales On Upswing • Double Trouble • August 30, 2016

• U.S. And Mexican Dairy Industry Leaders Pledge Renewed Cooperation

• Ag Progress Days • MARCELLUS SHALE UPDATE

Baseball Quiz: Last week's question: Alex Rodriguez of the Yankees will play his last game on Friday, August 12th. He has 2,084 career RBI's, which places him third on the all time list. There are two baseball Hall of Fame icons who have more RBI's than A-Rod. Name one of the two! Answer: A number of you got this correct. Hank Aaron and Babe Ruth as well as Barry Bonds have more career RBI's than A-Rods 2,086. Lou Gehrig was a good guess as he ended his career with 1,995 and if his illness had not shortened his playing days, he likely might have had the top spot in total RBI's. This week's question: For many years baseball players were often given nicknames. That is not as true as much any more but many former players were known more for their nicknames. Name two of the following players who were called "Country, the Scooter and Doc" --Contact Bob here: bgray15452@aol.com Baseball stories: Pitchers often don't like to be taken out of ball games by the manager. Pitcher Tug McGraw objected when manager Casey Stengel came out to pull him. "Come on, Casey," he said. "I can get this guy. I got him last time." "Yeah, I know," said Casey, "but the last time you got him was this same inning."

Focus Is On MPP's Recent Payments

By Bob Gray

When USDA announced last week that $11.2 million in Margin Protection Program (MPP) payments were being made to U.S. dairy producers for the months of May and June, there has been greater scrutiny given to the effectiveness of the program. This article is a follow up to last week's report on MPP payments in the Northeast. As you know, the Department makes MPP payments when the dairy margin, which is the difference between farm milk prices and feed costs, falls below the margin level selected by a dairy producer for two consecutive months. Although as many as 25,000 dairy producers out of the approximately 45,000 in the U.S. signed up for the MPP last year, and despite low milk prices just $700,000 were paid back in insurance payments as compared to $73 million in premiums that were paid into the program as mentioned in last week's newsletter. In 2015, 55% of U.S. dairy farmers who enrolled in the MPP purchased insurance above the basic $4.00 level. Since almost no payments were made last year, very few producers bought up insurance above the $4.00 catastrophic margin level in 2016. The cost of the $4.00 level is a $100 administrative fee only.

Therefore MPP sign ups nationally mirrored the low participation rate in the Northeast. A very small percentage of dairy farmers in the U.S. bought up insurance above the $4.00 margin, which is why the $11.2 million payments for May and June was so small. The chart shows MPP-Dairy Bimonthly Margins since the passage of the 2014 Farm Bill. Margins have slipped considerably

since historic high milk prices in 2014. Changes will need to be made in the MPP in the 2018 Farm Bill in order to make it more responsive to low margins in the future. If not, participation rates among dairy farmers will remain low.

USDA Announces Record Corn and Soybean Crops for 2016 By Bob Gray

If the weather holds and the harvest season is uneventful, then total corn and soybean production for 2016 will be at record levels. Here are some of the numbers:

• Corn yields were pegged at 175.1 bushels per acre, well above the 170.6 bushel level. • Total corn production was estimated at 15.153 billion bushels as compared to earlier estimates of 14.757

billion bushels. • Soybean yields were estimated at 48.9 bushels per acre, above the 47.5 projected level. • This would push total production for 2016 to 4.06 billion bushels above the 3.941 earlier estimates.

If these final numbers are correct it will mean world ending stocks of both corn and soybeans will be well above beginning stock levels for 2016 as illustrated by the bar chart. Wheat production has remained at previous average levels.

USDA's crop yield estimates caused corn prices to drop to $3.12 per bushel before rebounding slightly to $3.22. On the other hand, soybean exports to countries like China will likely keep prices in the $10.00 per bushel range or above. But beginning and ending stocks for soybeans could temper that.

Whole Milk Sales On Upswing By Bob Gray

The enclosed chart shows that whole milk sales are rebounding as they were up 4.5 percent in 2015. At the same time, fat free milk dropped by 12.3 percent. The rise of whole milk sales combined with increases in other dairy products such as yogurt and butter reflect the clinical findings that milk fat is good for you. Milk fat is not linked to other saturated fats that increase cholesterol levels, which contribute to heart disease.

Someone should tell USDA that as federal dietary guidelines still recommend the consumption of low or fat free milk, yogurt and cheese. It is going to take a lot of work to turn the ship in the right direction as we have been told for so many years -- and incorrectly so -- that milk fat increased your risk of cardiovascular disease. Not true at all!!!

Double Trouble

The Beagle Report By Bonnie and Willow Gray

It wasn't all that long ago we told you about some action that would be good for canines at that place daddy calls Congress. We promised then we would follow up on what happened. The Fairness to Pet Owners (FPO) Act of 2015 has a number, S. 1200. This was sent to the Committee on Commerce, Science and Transportation. The Puppies Assisting Wounded Servicemembers (PAWS) Act of 2016 was also given a number, H.R. 4764, and then sent to the Committee on Veterans Affairs. That is where they

will stay until the House and the Senate people come back to town on September 7th. Honestly, we wouldn't know a committee from a bowling ball! Us Beagles have never seen or even sniffed a committee. We tried hard to find out what a committee is. What we found makes us think of doggy day care! We are hoping with our own Beagle paws crossed that FPO and PAWS will make it safely out of the committees! We heard that is very important. Whatever happens, The Beagle Report will let you know!

August 30, 2016 By Maggie McHugh

That date, now just 11 calendar days away from this newsletter's publication, marks the end of the temporary suspension of Judge Andrew Hanen's order to the Justice Department to submit a list of DACA beneficiaries. Of special interest to the judge are those DACA recipients with three-year work authorization gained prior to the injunction he instituted a while ago. Judge Hanen stated that he would keep this information under a judicial seal but if any state offered "a showing of good cause", a portion or all of it would be released to the requesting state. The order concerned the following: • Names, addresses and personal information on these recipients. • Particularly those that live in the 26 states that are plaintiffs in U.S. v. Texas. • The date their approval or three-year renewal was granted.

• Also, although DACA recipients cannot vote they can serve as volunteers on political campaigns and there is some real concern that this information, if discovered as a result of the release, will be of specific interest to the requesting states.

This is a real "I told you so" situation feared by many eligible people who passed on applying or re-applying. There had been great hopes that all the people eligible for DACA would apply and with their green cards bolster the employment rate across the board, including in agriculture. However, as indicated by the lawsuits and Judge Hanen's discretion on possibly releasing data, anti-DACA resistance from opponents is strong. The Department of Justice has appealed Judge Hanen's order to the Fifth Circuit Court. The newsletter is keeping an eye on this development and will let readers know the outcome as soon as possible. The Migration Policy Institute table gives some idea of the breadth of the current DACA population that could possibly face scrutiny from states successful in the request for all data.

As you may recall, this all goes back to U.S. v. Texas, the case concerning both DACA and DAPA, heard by the eight-member Supreme Court a few months ago. The case is in a judicial limbo as the court split four to four in its decision. The DOJ has appealed for another hearing in the upcoming Court session, which starts the first Monday of October this year. The hope is that the Court will soon have that critical ninth member fully sworn in before the end of that session in May, 2017. For more info on the DACA situation, Judge Hanen and the suing states, here is the MPI link: www.migrationpolicy.org.

U.S. And Mexican Dairy Industry Leaders Pledge Renewed Cooperation By Mike Oscar

On August 10, 2016, at the conclusion of a two-day summit, leaders of the U.S. Dairy Export Council and Mexican dairy industry organizations pledged to work together to boost trade between the two countries, address mutual challenges and increase dairy consumption while also promoting milk production on both sides of the border. The dairy leaders signed a memorandum creating a US-Mexico Dairy Alliance that will meet annually to exchange information, review industry trends, and identify and seek solutions for problems affecting either side. Additionally, the plan will initiate ways to further reduce trade barriers between the two countries and defend against efforts to capture generic cheese names like parmesan, asiago and feta for the exclusive use of some European producers.

Ag Progress Days By Mike Oscar

For the 16th year, I attended Ag Progress Days (APD), Pennsylvania's largest outdoor agricultural exposition, which was held August 16-18, 2016. Ag Progress Days features the latest technology and research exhibits, educational programs, and guided tours. Sponsored by Penn State's College of Agricultural Sciences, it’s one of only three agricultural exhibitions in the country sponsored by a major university and their exhibits showcase the latest in Penn State research as well as information on best management practices and changing regulations in the agricultural industry. APD includes 500 exhibitors from 34 states and 4 provinces of Canada and of the 45,000 expected attendees, over 60 percent are actively engaged in agriculture or related professions.

MARCELLUS SHALE UPDATE

By Mike Oscar

Agriculture and Natural Gas Pipelines: Without question, agriculture is an energy intensive industry and natural gas pipelines are critical to supplying the Northeast region with clean, affordable, domestic energy. Plus, keeping energy prices low is vital to ensuring a stable, productive, profitable farm economy, and that is possible by expanding America’s domestic energy resources available for consumption. Per the IHS Global Insight, Inc., “the decrease in natural gas prices resulting from shale gas production will result in an average reduction of 10 percent in electricity costs nationwide over the next 25 years.”

Additionally, agriculture is reliant on products that require natural gas like fertilizer; natural gas is a feedstock for all nitrogen based fertilizer products and in 2015, 59 percent of the 20.84 million tons of chemical fertilizers were nitrogen based.

Finally, as we continue to expand natural gas pipeline development in the Northeast, this development will assist farmers’ access to reliable supplies of affordable energy for a litany of reasons from powering their operations, to drying crops, and much more. Pennsylvania Severance Tax? During his campaign for governor in 2014, Tom Wolf vowed he would impose a severance tax on the natural gas industry that was booming across Pennsylvania at that point, and the revenue would be used to support the commonwealth’s public schools. However, two years later, the possibility of a severance tax being levied in Pennsylvania has diminished. In a budget address earlier this year, Wolf proposed a 6.5 percent tax on natural gas drillers, but it was not included in the state’s 2016-17 budget. Instead, gaps in the budget were filled by new taxes on downloads of movies and music, cigarettes, and online gaming. During his first year as governor, Wolf also proposed a 5 percent severance tax, which would bring $1 billion to Pennsylvania, but the precipitous dip in the natural gas industry would have collected only a projected $217.8 million in 2016, which is about what the state collected from the already imposed impact-fee money that is disbursed to communities where drilling has taken place. Shale Oil Will Reduce Oil Imports by 2020: Per the U.S. Energy Information Administration, in 2005, the U.S. relied on imports to meet 65 percent of daily oil demand. This figure decreased to 55 percent in 2010, and as low as 28 percent in 2015, as surging domestic oil production hit a 43-year high. By 2020, Raymond James believes the U.S. will import just 11 percent of its daily oil needs. At that point, net imports could be met entirely by supply from Canada and Mexico.☐

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