NDFB
North Dakota Farm Bureau news.
- 2008 holds many promises for agriculture
New Year's Day is every man's birthday, someone once said. It holds the promise of better days ahead, and it fills us with possibilities to shed the old and start anew.
At this time, I always I find myself reflecting on the previous year, extrapolating what worked well and disposing of what didn't. I also take the opportunity to think about what may be in store for the coming year. And frankly, my thoughts are that the possibilities for 2008 are fantastic.
Blazing Star
Farmers and ranchers have just come off one of the best years in a long time for U.S. agriculture. We set new records for the value of exports. Further, the value of the asset base that American agriculture works from now totals more than $2 trillion. As a sector, our financial measures are the strongest they have been since we started keeping records on such things. In short, 2007 overall was a great year.
And in my opinion, many of those same great forces -- along with others -- are going to come into play in 2008.
The ethanol industry started 2007 as a blazing hot star. The demand created by new biofuel plants, the investment opportunities, the returns that were generated for many rural residents, were all positive. And while the industry went through some real shifts, painful shifts in some cases, these adjustments are going to be drivers of what is indicative of a bright future for this industry. I am convinced ethanol and the entire biofuels issue will remain a bright star for agriculture.
Our export markets also have been outstanding, not just for the bulk commodities of corn, soybeans and wheat, but also for higher valued products such as pork and beef. While we still have a long way to go, I remain positive that this year we will see the major markets reopen for our beef and that we'll be able to hold onto many of the gains we've had in the pork markets. I am also optimistic that through pending free trade agreements, we will see even more financial gains for U.S. agriculture.
Cheers to a New Year
Commodity prices look good. While there are gaps between futures and cash markets in some places, prices for many crops look promising even out to 2009. Our livestock markets also should stay fairly solid through 2008. Further, dairy producers have come through an amazing year. The price improvement we saw was not so much due to lower milk production as it was to explosive export markets.
My outlook for 2008 is not viewed through rose-colored glasses. There are still challenges ahead. Many Farm Bureau members have faced tough weather issues that could take years to overcome. Farmers still struggle with labor costs and availability, and the timing and implementation of a new farm bill is uncertain. The potential of greater regulatory oversight of water could also mean more expense for farmers.
To meet these challenges, we should take our wins and what we learned in 2007, apply it toward these issues and ring in 2008 with that go-get-'em attitude characteristic of farmers and ranchers.
My words to you this New Year, as Benjamin Franklin said, be always at war with your vices, at peace with your neighbors, and let each New Year find you a better man or woman. Or, in other words, cheers to a new year and another chance for us to get it right. - AFBF seeking an intern
The American Farm Bureau Federation is seeking one student for a 2008 summer internship with the Economic Analysis Team in its Washington, D.C. office.
Intererested applicants should have completed at least their sophomore year of undergraduate coursework, with a major in agricultural economics or a related field.
To view more of the internship criteria, clikc here
The deadline for application is February 8, 2008. - Costs and grain prices explode in 2008 crop budgets
Farming in 2008 is looking to be one for the history books.
"Never have both costs and grain prices been this high," says Andrew Swenson, NDSU Exension Service Farm Management Specialist. "Costs and grain prices are competing forces when it comes to profit. Fortunately, grain prices should prevail."
Swenson says that prior to 2007, it was difficult to project a positive return to labor and management for most crops. It was not uncommon to project a loss for spring wheat, North Dakota's largest crop, in nearly every region of the state.
Despite higher costs, this changed in 2007 because of better crop prices and most crops projected positive returns across the state.
"It looks even better for 2008. Projected returns are the best that I have seen in 17 years of preparing crop budgets. All crops should be profitable, except for oats and rye."
Swenson says there is a negative, however. Costs have increased at a strong pace each year since 2002.
"Record high per-acre costs have been set every year since 2003. For 2008, the increase in costs is stunning. Total direct cash costs per acre will increase, on average, by about 30 percent. The increase in total direct and fixed costs will average about 20 percent per acre."
Soybeans and dry edible beans will have the smallest increase in total costs, about 10 percent, while durum will have the largest at more than 30 percent. For example, total costs, excluding any labor and management, of spring wheat production in the east- central region (Foster and adjacent counties) was projected at about $190 per acre for 2008, compared with $150 per acre in 2007.
Fertilizer, seed, crop insurance and fuel lead the cost hit parade. Fertilizer prices are about 50 percent higher.
"To make things worse, soil tests are lower, so more of the expensive fertilizer is needed to meet similar yield goals. Seed costs, particularly for small grains, are higher. The price of barley and spring wheat seed is 50 percent to 75 percent higher, flax is double and durum has nearly tripled in cost. Corn seed is about 15 percent higher. Sunflower and soybean seed costs increased 5 percent to 10 percent. Increases in crop insurance premiums typically will range from 20 percent to 50 percent because crops are insured at a higher price."
High costs hurt corn relative to soybeans. In the eastern half of the state, the per-acre return to labor and management ranged from $0 to $50 for corn, compared with $50 to $100 for soybeans.
Swenson says 2008 provides an opportunity for producers to generate strong returns to make up for lean years they may have experienced in the past. The downside is that more dollars will be invested in a crop than ever before and the financial risk is greater if projected prices and yields do not materialize.
Swenson encourages producers to develop their own budgets. Commodity prices and yields are extremely difficult to predict.
"It is critical to evaluate crop insurance and consider the financial downside risk, as well as the upside potential, of the crop rotation," he says.
The budgets are available on the Web at www.ext.nodak.edu/extpubs/ecguides.htm and your local county Extension office. - Tips to reduce home heating costs
Ken Hellevang, North Dakota State University Extension Service engineer, has a few tips for reducing heating costs this winter.
Zone heating involves keeping some areas of the home warmer and some cooler. That can reduce heating costs because heat loss is related to the temperature difference between indoors and outdoors. Therefore, if the house temperature is kept at 60 F rather than 70 F when the outside temperature is 0 F, the heat loss will be reduced by 14 percent, Hellevang says. The savings might be 50 percent if the house is at 50 F rather than 70 F when the outside temperature is 30 F.
Reduce the house thermostat setting and use space heating in portions of the house. In homes with a central heating system, close heat vents or dampers and doors to reduce the amount of heat supplied to a room or area.
However, high humidity and mold growth can be problems in cooler parts of a home. A 20 degree drop in temperature will double the relative humidity. For example, if the relative humidity is 35 percent in a portion of the house at 70 F, the relative humidity will be about 70 percent in a room or area at 50 F. The potential exists for mold growth at relative humidity levels exceeding about 70 percent. Monitor the levels using an electronic humidity meter available at most hardware and general stores.
Hellevang urges consumers to investigate advertizing claims before purchasing heaters to provide supplemental heat.
An electric space heater provides 3.4 British thermal units (Btu) per watt of electricity used. Therefore, a 1,000-watt (1 kilowatt) heater will produce 3,400 Btu of heat each hour and a 1,500-watt heater will produce 5,100 Btu per hour. An electric heater is 100 percent efficient, converting all the energy coming into the unit to heat. The amount of heat produced is the same regardless of whether it is from an electric resistance eleme