American Ag Today- 11/6/24

And welcome into a brand new episode of American Ag Today, produced by the American Ag Radio Network. I'm your host, Jesse Allen. Thanks for joining us. While the October Rural Main Street Index didn't contain a lot of good news for the farm economy, Dr. Ernie Goss of Creighton University conducts the survey and talks about the results.

Well, our survey of bank CEOs from rural areas at 10 states in the midsection of the country, the overall index, which ranges between 0 and 100, has been below growth neutral now for 14 straight months, has a lot to do with on the grain side very weak, on the livestock side, not so weak. So it's a tale of two areas of agricultural economy.

In terms of grain, we're talking about in a recession. Most farmers out there, whether it's corn soy being a wheat, prices are below the breakeven point.

Lower grain prices are helping the livestock markets stay steady for now.

Very heavy in debt and they'll have to be cutting back on some of those beef purchases and moving down to chicken or some other less expensive meat product.

He says interest rates are still a challenge for the ag economy. The interest rates are still too high on the long end especially. Now the Fed did reduce interest rates about the third week of September and that brought down the short term rates and that would be of course for the farmer that would not include mortgages and farm land purchases on the short end for operating loans. Those are lower by 50 basis ones or quarter percent.

But they're still running between over 8% in terms of operating loans. But when the Fed cut interest rates on the short end, the long-term interest rates, for example, the 10-year treasury moved up and farmland interest rates on the purchase of farmland moved up.

The other indicators that the index monitors are down as well. Farm equipment sales decline for the 15th straight month. Of course, that may improve with lower interest rates, but we have to wait and see that hasn't turned up yet. And the numbers we're getting from most server indicators are down to a four-year low. Farm land prices, not as tough there. We're seeing for the fifth time in the past six months, farm land prices sank. But even there, not as much as farm income, farm land prices are holding up reasonably well.

And of course, exports doing fairly well there on export of agricultural products. Again, that's Dr. Ernie Goss from Creighton University. Well, sugarbeat growers are seeing good harvest results in the central plain states, Jack Breedenbach, president of the Colorado Sugarbeat Growers Association, says they're keeping some different hours than a typical harvest.

Conditions have been real good. A little bit on the warm side. We've had some harvest delays because of the heat. We need to have the beat temp below 50 degrees. So we've been starting like it for in the morning. A lot of mornings and going only till noon is the beat temp has to be below 50 degrees. Yields in Colorado and Nebraska look good.

Nebraska is estimated to have a 31 ton breaker crop with an 18.9 sugar, which is an excellent crop. And Colorado estimated yield is 32.5 tons per acre with an 18.3 sugar content, which is an excellent crop.

Other states appear to be having a good harvest. On our western sugar co-op, on our north growing areas in Billings, Montana, they've got a good crop going up there with about a 32-10 crop with an 18-7 sugar, and on other growing area up in northeast Wyoming, not too far from Billings, and they've got a good crop going 49 and a half-ton with a 19-2 sugar, which is a real good crop too.

And once again, that is Jack Breenbock of the Colorado Sugarbeat Growers Association. Well, in Aberdeen, South Dakota based agriculture cooperative has received a $3 million grant from the U.S. Department of Agriculture to help offset the cost of expanding its fertilizer production capabilities. Agtegra cooperative CEO Jason Klothweich says the expansion will benefit their more than 7,000 farmer and rancher owners across South Dakota and North Dakota.

And we have a network of over 70 locations, and a dedicated team of about 900 employees. And we're focused on servicing our member owners and rural communities. At Integra, we specialize in agronomy, energy, feed and grain products and services. And our mission is to prioritize superior service, relentless innovation in that space, and the success of our members and everything we do. Safety is at the heart of our operations, and we're deeply committed

the supporting the communities that we live and work in for generations to come. USDA Rural Development State Director for South Dakota, Nikki Gronely says the fertilizer production expansion program dollars enable ag tegra to increase the manufacturing and processing of fertilizer and nutrient alternatives for local farmers.

This grant will increase independent domestic fertilizer production. It will spur competition and combat price hikes caused by unstable markets around the world. It will increase fertilizer production and jobs in South Dakota. It will promote competition and support American goods and services. Clothwike says Aktegra is matching the grant dollars to make a $6 million investment at each of their South Dakota locations. To expand our prescription agronomics business,

which is located right next door here in Ipswich, South Dakota. Our annual manufacturing output as a result is expected to double, or more than double, from 26,000 tons of starter fertilizers to well over 53,000 tons. We'll be able to do this by upgrading our Ipswich facility, which includes a new container packaging line we're excited about and increase our storage capacity. In addition to the upgrades at Ipswich,

I will also be upgrading the facilities, as you mentioned, at Kimball and Maguoflin by adding 500,000 gallons of liquid fertilizer storage at each location. And he says nearly a dozen groups supported their efforts to get this USDA Rural Development Grant. The South Dakota Value Added Agricultural Development Center worked really hard to figure on this for this grant. And then obviously the letters of support from the Ipswich Development Corporation, the mayor of Ipswich,

The South Dakota Department of Ag played a huge role. South Dakota Agar Business Association, the South Dakota Association of Co-ops, South Dakota Corn Utilization Council, the South Dakota Soybean Checkoff, and then last the South Dakota Soybean Association all signed on and supported the project. So without their support, this would have been really hard to do.

And clothes like ads that the projects will more than double Agtegra's fertilizer production, creating improved access to a major input cost for many farmers and ranchers. He says Agtegra plans to break ground for the expansions in the spring and have the projects finished before the end of 2025.

Now in total, this round of USDA Rural Development announcements included more than $120 million in grants to fund six fertilizer production projects. Other states where grants were awarded in this round were Arkansas, California, Illinois, Washington and Wisconsin.

Well, that is a look at Agnew's headlines here on this episode of American Ag today. Thank you for joining us. If you have a story for the program, send it to me via email Jesse Allen, J E S S E A L L E N and American Ag Network.com. I'm your host Jesse Allen. Have a great rest of your day.