Despite dry conditions last summer in parts of Iowa, corn and soybean yields turned out better than expected in 2017 for most farmers. We now have the largest grain surpluses in recent years. Lots of corn piles dot the countryside this winter. With big crops adding to the national carryover, another year of low crop prices is forecast.
Livestock prices held firm despite rising supplies in 2017, as strong export demand for meat supported hog and cattle farmers, giving them a chance to capture a profit. Big crops also held feed costs low. Looking ahead to 2018, the ability to maintain strong meat exports depends a lot on whether trade agreements, particularly NAFTA, can be kept in place and not gutted. Mexico and Canada are big markets for Iowa and U.S. agriculture.
RFS, Bill Northey in limbo
What happens to the Renewable Fuel Standard in 2018 is also important. Iowa is our nation’s largest producer of ethanol and biodiesel. Oil state lawmakers are pushing the Environmental Protection Agency to alter RFS rules to give petroleum refineries relief on the renewable identification numbers (RINs), the tradeable credits used to show compliance with annual biofuel blending requirements.
Lawmakers from Iowa and other biofuel states continue to defend RFS rules and want to keep the RFS intact. Meanwhile, President Donald Trump’s appointment of Iowa Ag Secretary Bill Northey to a top federal post as a USDA undersecretary of agriculture continues to be blocked by Sen. Ted Cruz of Texas and other senators who want to kill the RFS.
Key issues in Iowa agriculture in 2017
Earlier this week, the Iowa Department of Agriculture and Land Stewardship released a summary highlighting some of the top ag issues in Iowa in 2017. Following is a review of that summary, prefaced with comments from Northey and from Mike Naig, Iowa deputy secretary of agriculture:
“While the challenging economic conditions on the farm continued in 2017, I was extremely encouraged to continue to see farmers experimenting and investing in water quality efforts on their farms,” Northey said. “We continue to see Iowans on the farm and in our communities taking on the challenge of improving water quality. It is encouraging to see growth by farmers in both infield practices, such as cover crops and no-till, but also edge-of-field practices, like wetlands and bioreactors, as we work to address this important issue.”
Naig added, “In many cases Iowa farmers saw surprisingly good yields this year, but with that large supply we continue to see low prices. It highlights again how important it is we continue to build demand for our ag products, both domestically and internationally. A strong livestock industry, expanding use of renewable fuels and promoting international trade are all vitally important.”
IDALS summary of year
Following is the summary released by IDALS looking at key issues Iowa agriculture faced in 2017:
• Yields. In general, Iowa farmers had pretty good yields despite some weather challenges. Parts of the state were in abnormally dry or drought conditions for significant parts of the growing season, with south-central and southeast Iowa the hardest hit areas.
Despite weather challenges, Iowa corn production for 2017 is forecast at 2.54 billion bushels, according to the latest USDA Crop Production report. This would be the second-largest Iowa crop on record, only beaten by last year’s record of 2.74 billion bushels. The statewide average yield is expected to be 197 bushels per acre.
Soybean production is forecast at 557 million bushels for Iowa, which would be the second-largest crop on record. The statewide yield forecast is 56 bushels per acre. USDA will update these 2017 forecasts for corn and soybeans with the release of its Jan. 12 Crop Production report.
• Supply, prices. Low crop prices the past few years have made it a challenging time on the farm economically as in many cases current prices are below cost of production for farmers. Average statewide corn prices continued to fall and the statewide average for November was $2.99, down from $3 in November 2016. Statewide average soybean prices for November were $9.04, down from $9.25 last year.
While still a challenging year economically for Iowa livestock farmers, they have seen some better prices and lower feed costs. Cattle prices were at $109 per hundredweight in October, up from $101 per cwt a year ago. Hog prices were at $47.30 in October, up from $41.70 a year earlier.
Iowa egg production in October was 1.33 billion eggs, up 4% from the previous month, and up 3% from last year, according to the latest Chickens and Eggs report from USDA. The average number of all layers on hand during October was 55.5 million, up 3% from 2016. Egg prices have recovered some from 2016 and were at 68 cents per dozen in October, up from just 21 cents per dozen a year ago.
• Livestock, poultry. There were 2.1 million turkeys raised in Iowa in 2017. Iowa ranks seventh in U.S. turkey production. Tyson Foods in Storm Lake and West Liberty Foods in West Liberty process 15.5 million turkeys annually. Subway and Jimmy John’s both serve Iowa turkey, but you can also find it in your grocery store via Jimmy Dean and private label sliced turkey.
Milk production in Iowa during October totaled 437 million pounds, up 4% from the previous October. Iowa was home to 219,000 milk cows in October; 4,000 more than last year. Monthly production per cow averaged 1,995 pounds, up 40 pounds from October 2016. The October all-milk price of $17.90 per cwt is 10 cents higher than September and $1.20 higher than October 2016.
Iowa also continues to see growth in new areas as well, including 242 goat dairies and approximately 60 aquaculture producers.
• Land prices. The farm economy remains challenged by low crop prices, but land prices for 2017 have stabilized and increased by 2% on average over the previous year, according to Iowa State University’s annual land value survey released Dec. 12.
In addition, exports remain strong and critically important to the state’s ag industry. Iowa leads the nation in exports of pork ($1.98 billion), corn ($1.39 billion) and feed grains ($1.50 billion). It’s second in soybean exports ($2.51 billion) and second in the nation for overall value of agricultural exports. To help continue to grow exports, Northey participated in trade missions to China and Kosovo and Naig participated in a trade mission to Mexico.
• Iowa Water Quality Initiative. IDALS is continuing to expand efforts to work with all Iowans to make water quality improvements, says Northey. The department announced an innovative new program aimed at increasing acres of cover crops in the state. Iowa farmers who planted cover crops in fall may be eligible for a $5-per-acre premium reduction on their crop insurance in 2018. IDALS worked with USDA’s Risk Management Agency, which oversees the federal crop insurance program, to establish this three-year demonstration project.
IDALS also had more than 2,600 farmers signed up for cost-share funding in 2017 to try cover crops, no-till and strip-till, or nitrification inhibitors on more than 270,000 acres in 98 counties. The state will provide nearly $4.8 million in cost-share funds to match the $8.7 million investment by Iowa farmers. This record participation in the program includes more than 1,000 first-time participants.
• Cover crops. Iowa farmers planted more than 353,000 acres of cover crops with financial assistance from state and federal conservation programs in the fall of 2016 — nearly 18% more than the previous year. Based on statewide surveys and aerial imagery completed by conservation groups this spring, it is estimated Iowa farmers planted at least 600,000 cover crop acres last fall.
There are also 56 demonstration projects located across the state to help implement and demonstrate water quality practices through the initiative. More than 220 organizations are participating in these projects. These partners will provide $32.3 million to go with over $21.7 million in state funding for these projects.
More information about the Iowa Water Quality Initiative can be found at cleanwateriowa.org.
• Animal disease. IDALS continues efforts to update response plans for a potential animal disease emergency — to be ready in case such an outbreak occurs. The department hosted a tabletop exercise designed to help test response capabilities and review IDALS’ updated Foot-and-Mouth Disease Response Plan that was completed last spring. More than 60 federal, state and local agencies, academic and industry professionals participated in the exercise.
IDALS announced the hiring of Dr. Judith LaBounty as the new emergency management veterinarian for Iowa. The department received an additional $100,000 from the Iowa Legislature to support preparations for a foreign animal disease outbreak and a portion of that funding is being used for this position. LaBounty will support IDALS’ efforts to ensure emergency response plans are up to date, organize disease response exercises and work with industry partners. A portion of her time will also be dedicated to working in the field as a district veterinarian.
• Drift Watch. In 2017, IDALS partnered with the nonprofit company FieldWatch Inc. to improve the online registry tools available to promote communication between producers of pesticide-sensitive (i.e. specialty) crops, beekeepers and pesticide applicators. The new registry offers two online platforms that provide state-of-the-art mapping features. DriftWatch is a registry site for use by producers of commercial crops sensitive to pesticides and includes the online capacity to map boundaries around production fields. BeeCheck is a registry site for beekeepers that designates 1-mile radius boundaries around apiaries.
Producers of sensitive crops with apiaries may enter hive locations using either the DriftWatch or BeeCheck registries. Pesticide applicators can also register in a separate FieldWatch registry for detailed crop and beehive site location data in their spray areas. Information for farmers and beekeepers interested in registering sensitive sites is online.