Good morning.
U.S. Agriculture Secretary Tom Vilsack has plenty to worry about these days: inflation, war-related supply shortages, supply chain hang-ups, severe drought, and the list goes on.
But at least he’s not in jail.
Corners of the internet seemed to have been duped last week by a parody site that claims Vilsack was arrested (by the military?) for purposely destroying ag processing facilities. Now that’s a collection of words we never thought we’d have to write.
More of this week’s (actual) news on the scroll…
Stories:
- The CRP Predicament
- Solinftec Snags Substantial $$$
- What's New at Nutrien
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That was the attitude of many farmers who took advantage of the general Conservation Reserve Program (CRP) application process that closed on March 11.
Ag Secretary Tom Vilsack announced on Tuesday that the USDA accepted offers for 2.07M acres of CRP ground during this round of "general" sign-ups.
The USDA is stoked, yet they’re sending a clear message: "We’re not done yet."
Referring to the Grassland/Continuous CRP programs still rolling, Tommy V. had this to say: "We recognize the Conservation Reserve Program is an important tool in helping [to]… conserve natural resources, and this announcement is just the first opportunity for producers to take advantage of the program."
But… things could be better.
The total accepted acreage fell short of the amount needed to sustain current program acres, and of those 2M accepted, only 400K were "new." The rest were re-ups.
And according to some, USDA conservation programs have even more issues.
Feeling rejected: According to research by the Institute for Agriculture and Trade Policy (IATP), only 42% of CSP applicants and only 31% of EQIP applicants are granted contracts.
Why? Some cite program restrictions and large livestock "set-asides" that limit local program control.
And to rub salt in the wound, the IATP report shows most states aren’t meeting their 5% "socially disadvantaged producers" target.
Where this goes: More than half of the accepted acres were from three states: Texas, Colorado, and Kansas. And with climate change mitigation an administration priority, USDA is hopeful for more CRP contracts as the Grassland/Continuous programs move forward.
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→ More strikes. Upwards of 1,000 workers in CNH Industrial plants in Wisconsin and Iowa went on strike this week, calling for better wages and fair work rules from the agriculture and construction equipment manufacturer.
→ Milk them for all they’re worth. Despite $25 milk prices, farmers are still feeling the inflation squeeze, and will have to rely on more productive cows for increased profits, instead of expanding their herds.
→ Slow Train. After months of delayed rail shipments (including agricultural products, livestock, and fertilizer), the Surface Transportation Board will have a public hearing about the slow service.
→ Spill the tea. After a doomed ban on fertilizer imports, a continued inflation crisis, and the war in Ukraine limiting its export markets, Sri Lanka has seen its lowest tea export numbers in 23 years.
→ Corn court. Archer Daniels Midland is being sued for manipulating ethanol prices, and has been ordered to turn over info about its 2019 suspension of an employee, who said he did what the case alleges at the direction of his bosses.
→ Grain (management) growth. AgriDigital, the largest digital grain management platform in Australia, closed a $25M funding round, which they hope will spur product development and expansion in Australia and North America.
→ Dampened timelines. U.S. corn and soybeans have been slow to get in the ground—only 14% of corn (compared to a 33% average this time of year) and 8% of soybeans (down from 13%) are planted.
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Solinftec Snags Substantial $$$ |
A Brazillion dollars: Startup company Solinftec, which has headquarters in Brazil and the U.S., has raised $60M in an investment round to expand precision agriculture.
So precise: The company serves farmers and agribusinesses who grow crops ranging from sugarcane, citrus, and coffee to row crops. Its digital platform, ALICE.AI, connects sensors, computers and displays to give growers real-time, in-field crop data, plus information about weather conditions and inputs.
Solinftec’s goal is to help agriculture be more productive and sustainable with increased yields, fewer wasted inputs (like fuel), and lower negative environmental impacts (like carbon emissions). They also help ag retailers move to digital platforms, which increases productivity and efficiencies while optimizing inputs—both machine and human.
Did someone say carbon? The precision ag system manages more than 27M acres in Brazil, the U.S., and other parts of Latin America—and serves 85% of Brazilian sugarcane growers. With its customers, the company said it’s avoided more than 680K tons of C₀2 emissions between 2016-2021. Show me the carbon credits.
Their money don’t jiggle jiggle, it folds: The money is planned to be used for business expansion in North and South America, and to accelerate the launch of Solix, a robot that gathers even more agronomic data on farms.
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Grains: Wheat prices skyrocketed as more news rolls in that global production is on pace to fall very flat.
Livestock: Higher grain prices kept cattle contained while hogs moved up thanks to positive vibes for summer consumer demand.
*As of Market Close [5/5/22]
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Things are getting Nutrien-teresting.
As the world’s largest fertilizer company, Canada-based Nutrien is considering additional increases in potash production due to limited shipments from Russia and Belarus. Those limitations have been no small hit, since the two nations accounted for more than 40% of global potash exports last year.
In response to the uncertainty, Nutrien said it planned to increase output in 2022 by nearly 1M tonnes to about 15M.
Oh, and this: Already tight supplies, combined with sanctions in the Black Sea region, have caused crop nutrient prices to skyrocket to near-record levels. Compared to last year, all fertilizers are up at least 48%, with anhydrous showing the highest jump: it’s a whopping 116% more expensive.
The limited supply has also caused Nutrien profit to jump 10x in the first quarter. The company boosted its full-year earnings forecast past previous estimates, and stock prices followed with a 5% increase.
Zoom out: Nutrien interim CEO, Ken Seitz, said the fertilizer disruptions could extend into 2023 because of the Russian invasion of Ukraine, plus sanctions on Belarus. It will take time to rebuild the region’s export capacity.
In the meantime, supplies could be found from alternative sources—which could change the global trade patterns.
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We mentioned that Sri Lanka’s shrinking tea exports are just another sign of the times in today's Quick Hits.
But speaking of tea, Sri Lanka is the 4th largest producer globally behind China, India, and what African nation below?
- Kenya
- Morocco
- South Africa
Answer at the bottom of the email.
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Written & Edited by Kevin Cross, Sheridan Wimmer, Rachel Robinson, Ashley Scoby, and Travis Martin
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