American Ag Today- 11/12/24

And thanks for joining us here for a new episode of American Ag Today produced by the American Ag Radio Network. I'm your host Jesse Allen. Well, University of Illinois analysts looked into the future of renewable diesel production in the US and saw some headwinds, renewable diesel production capacity has exploded in recent years, increasing by more than three billion gallons. This substantially impacted fats and oils, feedstock markets,

However, the profitability of renewable diesel is taking a hit in the last year. The industry began to produce at levels greater than the demand ceiling set by the annual renewable volume obligations under the renewable fuel standard. Now, Farm Doc Daily says the bloom is off the

Renewable diesel boom that began in 2021. There's a list of announced building projects that could add substantial production capacity in the future. However, none of these projects have broken ground and started construction. Farm doc experts said, quote, until there is confirmation of actual construction activity, it's prudent to exclude the announced projects in projecting renewable diesel production capacity for 2027 or later.

While there's a bumper soybean crop being harvested right now, and more than ever, that soy is going in many different ways to many different uses. Matt Amick is director of market development with the Missouri Soybean Association and Missouri Soybean Merchandising Council. We had a great growing season, especially early on.

A lot of parts of the traditional soybean growing areas had good conditions. I think in a lot of areas it got a little dry in August, early September, so those late planted beans or maybe the double crop beans may have got a little bit of the yield taken off. But in general, we're predicted to have a very large crop, which means we're going to need a lot of new markets to take those soybeans too.

Amy says the necessity of market expansion is a matter of simple economics. When we have a larger crop, we have larger, you know, across the world, we have new competition or growing competition from South America. They're growing more soybeans. There's more soybeans on the world supply, which is great for consumers and for those folks that are

They're utilizing soybeans because it presents some good buying opportunities. So it's just a function of trying to catch up that demand with this supply of soybeans, whether it be soybean meal or soybean oil that's on the world market.

And he says the first major new market explored by soy was biodiesel, but it hasn't stopped there. Recently, we've really put a lot of research and efforts into new innovative uses using soy and meal and industrial products or consumer products like soy tires, roofing products, asphalt and concrete products, sketchers shoes. There's a variety of things that are happening.

And, you know, now with our demand situation, a lot of our soybean oil is being utilized for biofuels. We've actually transitioned a lot of that to the protein portion, the soybean meal, the soy flour portion, and we're looking for new uses with that product.

And now soy is looking for more market expansion. So we're really focused on trying to build out more domestic livestock utilization here in the Midwest and across the country and also developing new export markets. We had a record soybean meal export last year. We're probably going to have a new soybean meal export record this year and it's looking at markets like Southeast Asia.

Latin America. So there's a lot of new opportunities for growth with the soybean meal. Trying to use as much of it domestically, but then also I'm looking at international markets as well. That's Matt Aimek, director of market development with the Missouri Soybean Association. Well, from natural disasters to high input costs and low prices for certain commodities, farmers and ranchers are seeing a lot of red on their financial ledgers. American Ag Networks, Kaleo Mang has more in this report.

A trifecta of natural disasters, high input costs, and poor economic conditions has made the last year difficult for farmers and ranchers. Betty Resnick, an economist for the American Farm Bureau Federation, says there is some relief on the way but more is needed.

As prices are still quite elevated in the 2023 crop year, areas receiving our county payments that have pretty substantial declines in yields compared to benchmark to trigger a payment. The price loss coverage program had only one crop trigger a payment and that's rape seed.

For the 2024 crop year looking forward, that will be paid out until October of 2025, but there should be higher levels of both ARK and PLC payments. While passing a new modernized farm bill would be a good step-topping farmers, Resnick says it's only the first step. A new updated farm bill needs to be a priority, but it's a lot likely enough to help farmers who've been experiencing multiple years of losses at this point unless Congress gets created.

Economic disaster relief and a catch-up in natural disaster relief also need to be on the table.

Natural disasters going back to 2022 have led to huge losses in farm country. While there was some 2022 ad-wap disaster funding provided by Congress, it only covered about a third of those losses. 2023 is on additional 10 billion losses and preliminary 24 losses are at $4 billion before hurricanes built in Helene. So those are destined to skyrocket as well. For more information, keep an eye on the market and tell page at fp.org. I'm Kayle O'Mang reporting.

And thanks, Kaylee, for that report. Meantime, in another special report, Australia has struck a new trade deal with the United Arab Emirates. What could that mean for potential global wheat trade? American Ag networks Corinne LaRue shares more in this report.

The day after a U.S. presidential election usually has all eyes on America, but some news from down under Australia and the United Arab Emirates signed the comprehensive economic partnership agreement Wednesday marking Australia's first free trade agreement with a Middle Eastern nation. This agreement aims to eliminate tariffs on over 99% of Australian exports to the UAE

including key act products like meat, dairy, grains, oil seeds, chickpeas, lentils, nuts, horticulture, and honey. The deal is expected to generate an additional $50 million annually for Australian farmers. The trade deal is anticipated to boost bilateral trade, which was valued at $9.9 billion in 2023, and enhance two-way investment, which stood at $20.6 billion.

This development is significant for Australian agriculture as it opens new markets and reduces trade barriers, providing a substantial boost to the sector. The agreement also includes provisions for sustainable agriculture and food systems, recognizing AG's essential role in ensuring food security and driving climate resilience.

The signing of the CEPA represents a strategic move to strengthen economic ties between Australia and the UAE, offering new avenues for trade and investment in the Middle East. The UAE is a significant importer of ag products and the removal of tariffs on Australian goods may make them more price competitive.

This could challenge US ag exports to the UAE as American products might become relatively more expensive, and with Australian products gaining a competitive edge due to tariff eliminations, US farmers may face difficulties maintaining or expanding their market share in the UAE. This is particularly relevant for the commodities where both of these countries compete such as beef, lamb, and certain grains.

If Australian exports to the UAE increased significantly, Australia might reduce its supply to other markets, potentially opening new opportunities for U.S. farmers elsewhere.