Top 10 Ag Stories of 2023: No. 1 - 2023 Farm Bill Plans Disappear in a House Divided

OMAHA (DTN) -- The farm bill was never going to get done in 2023, but that doesn't mean there weren't great expectations.

The question now is whether there will be a new farm bill in 2024.

NO LIFTOFF IN 2023

Shortly after announcing she won't run for re-election in 2024, Sen. Debbie Stabenow, D-Mich., chairwoman of the Senate Agriculture Committee, went on NBC's Meet the Press last January to say she intended to get a farm bill done in 2023.

"The big issue that has bipartisan support to actually get done this next year is what we call the farm bill," she said.

Stabenow's interview, though, came just days after it took Rep. Kevin McCarthy, R-Calif., 15 ballots to win the House speakership he would lose less than nine months later. The interparty turmoil over McCarthy's speakership would end up as yet another "first time in history" moment for American government.

Plans to draft a new farm bill eventually failed to gain any traction this year as the House was in constant turmoil over government spending passed by the last Congress. Republicans were also committed to passing bills with only GOP lawmakers' votes. McCarthy erred by relying on Democrats in early summer to pass a debt-limit bill negotiated with President Joe Biden.

Throughout the year, McCarthy also repeatedly championed the push to get a farm bill done sooner rather than later.

If frequent-flyer miles could have helped pass a bill, then House Agriculture Committee Chairman Glenn "GT" Thompson, R-Pa., would have locked it down. Thompson spent the better part of the year holding bipartisan listening sessions and agricultural tours with congressmen across the country. Thompson typically hedged on the timing but made it clear he wanted to pass a bipartisan bill in the House.

Thompson explained a fall vote could happen. "Everything is dependent on when we get a week designated on the floor for running the bill." That became, "We're probably going to need an extension. I hope it's a very short one."

HOUSE SPEAKER CONFLICT

McCarthy then relied on Democrats to avoid a government shutdown at the end of September. That would prove to be McCarthy's last act as Speaker. Led by Rep. Matt Gaetz, R-Fla., eight Republicans voted to end McCarthy's leadership and locked up Congress the entire month of October trying to replace him.

Rep. Mike Johnson, R-La. is now House Speaker, but Congress still has a lot of unfinished business closing out the year, including the annual appropriations bill for USDA. Congress will come back in January staring at unfinished appropriations bills for a budget year that began Oct. 1.

The last short-term spending bill waved goodbye to the 2023 farm bill by extending the 2018 legislation until Sept. 30, 2024. That move appears to have given Congress some breathing room to get a new bill done during the next nine months.

IRA DOLLARS AND FARM BILL

Tied to the farm bill debate are the $19.5 billion passed in the Inflation Reduction Act, along with billions more for renewable energy and forestry. Rolling those dollars into the farm bill would boost the baseline. It might also help expand the safety net for farmers, but none of these issues have been worked out so far.

Despite their calls for cuts elsewhere in the budget, Republicans also are sticking to their guns that they want to raise reference prices for commodity programs. Yet, a 10% bump in reference prices adds $20 billion in costs over 10 years.

The legislation also is scored to cost $1.5 trillion over 10 years, nearly 43% more than the 2018 farm bill. The higher spending is driven heavily by a USDA adjustment to the "Thrifty Food Plan," which added $300 billion over 10 years to USDA's main food-aid program, the Supplemental Nutrition Assistance Program (SNAP) costs. That cost change raised a lot of questions about how USDA could make such an expensive cost adjustment without going to Congress first.

Republicans plan to continue focusing on SNAP costs. Sen. Chuck Grassley, R-Iowa, and Rep. Chip Roy, R-Texas, threw down a marker earlier this month with a letter to Congressional leadership looking to roll back SNAP spending to pre-pandemic levels. Grassley and Roy also want more restrictions on how USDA uses the Commodity Credit Corp., (CCC) "which has become a bureaucratic slush fund with little oversight." Vilsack used $3.1 billion out of the CCC to create the Partnership for Climate-Smart Commodities.

Lawmakers have forgotten the Trump administration had tapped the CCC for $23 billion in 2018 and 2019 to offset the costs of the trade dispute with China. At that time, it was Democrats questioning the use of those dollars.

Grassley's also among those wanting to increase reference prices, but the longest-serving member of the Senate Agriculture Committee is also in the camp of those who don't know where that money would come from.

PRESIDENTIAL POLITICS

Rolling into 2024, plans to get a farm bill undoubtedly will be mired by presidential politics. There have been times when Congress navigated through a farm bill during a presidential race. The 2008 farm bill was enacted in June that year overturning a veto by outgoing President George W. Bush -- the last time a farm bill was finalized. But that bill was completed with conference negotiations after the House and Senate had each passed their versions of the bill in 2007. Though less than two decades ago, 2008 also seems like a much more congenial time in Congress and presidential politics than now.

According to Politico, Thompson has said he wants to get a farm bill passed in the first quarter of 2024. Yet Politico also alleged in mid-December, "Privately, House Republicans increasingly don't believe House Democrats want to pass a farm bill this year, arguing that Democrats would rather push the bill into 2025 when they could retake the majority."

Still, Stabenow likely wants to walk into retirement having helped guide another five-year farm bill into law. Agricultural policy in 2024 also could be fueled or clouded by Thompson's health. Earlier this month, he announced he has prostate cancer and will be undergoing treatment.

This Week's Drought Summary (12/28)

A low pressure system developed over the central Plains in conjunction with an amplifying upper-level trough dipping into the northern Plains brought active weather across much of the central to eastern U.S. Warm and moist air from the Gulf of Mexico moved northward ahead of the developing low pressure, producing widespread moderate to heavy rainfall from Texas to Louisiana. Meanwhile, a cold air mass from Canada dipped into the northern portions of the U.S. brought blizzard conditions to portions of the Central Plains and Upper Midwest. Temperatures were above-normal across most of the U.S., by as much as 20+ degrees F above average in parts of the Upper Midwest and Northern Plains. The most widespread improvements were made to parts of central Texas, eastern Nebraska, eastern Kansas, southern Louisiana and from northern Alabama to western North Carolina, where above-normal precipitation was observed this past week. Dry conditions continued across the eastern portions of the Southern region, with degradations occurring across much of Mississippi and into Arkansas and Tennessee. Drought and abnormal dryness were also expanded or intensified in portions of the northern Rockies and in parts southern Illinois, southern Texas and in the Southeast. In Hawaii, heavy rainfall improved conditions over parts of Kauai, Oahu and the Big Island, while no changes occurred on Molokai, Lanai or Maui.

Northeast

Light precipitation fell over ¬a large portion of the Northeast this week, while precipitation totals were below-normal across much of the region this week, month-to-date totals were 150% to 400% above normal. Much of the region remains free of drought, while the above-normal precipitation has helped alleviate abnormal dryness in portions of western New York, central Pennsylvania and along parts of the Maryland-Pennsylvania border where improvements were seen in short-term indicators, streamflow and soil moisture levels. For the week, average temperatures were above normal across much of the region with departures ranging from 1 to 9+ degrees F above normal, while pockets of cooler-than-normal temperatures were observed in portions of Delaware and small parts of Maryland and West Virginia. According to the National Weather Service (NWS) National Operational Hydrologic Remote Sensing Center (NOHRSC) regional snow analysis (12/26) reports that the Northeast Region is 9.3% covered by snow with an average snow depth of 0.2 inch and with a maximum depth of 14.4 inches.

Southeast

Precipitation fell across much of the Southeast this week with the heaviest amounts of rainfall being observed in areas from central Alabama to western North Carolina. These areas reported weekly precipitation amounts were up to 600% above normal and ranged between 2 to 8 inches of rainfall. Drought reduction and improvement were based on precipitation amounts, short-term SPI/SPEI, NDMC short-term blends, and improvements to streamflow and soil moisture data. Based on these short-term indicators, extreme drought (D3) was removed from northern Georgia and improved in northeast Alabama where precipitation amounts where up to 4 inches above normal for the month. Severe drought (D2) and moderate drought (D1) were reduced in parts of Alabama, Georgia, South Carolina and North Carolina, while a small portion of moderate drought in western Virginia was improved this week. Improvements in abnormal dryness (D0) occurred in parts of southern Alabama and along the coast of Georgia and South Carolina. On the dry side, abnormal dryness and moderate to severe drought categories were expanded across parts of Alabama and Georgia, where little precipitation fell. Based on precipitation deficits and short-term indicators, severe drought was expanded in the eastern part of Alabama where precipitation was up to 3 inches below normal for the month. Moderate drought was expanded in parts of central Alabama and central Georgia, while abnormal dryness was expanded into parts of southern Alabama and central Georgia.

South

Dry conditions continued across the eastern portions of the Southern region this week while heavy precipitation fell across much of Oklahoma and over parts of central and eastern Texas. Large portions of eastern Texas and Oklahoma received between 2 inches to 5 inches of rainfall (300% to 600% above normal) this week, resulting in improvement of exceptional drought (D4) in eastern Texas while extreme drought (D3) was removed from northeast Oklahoma and improved in parts of central and eastern Texas. Improvements were also made to moderate drought (D1) to severe drought (D2) conditions, along with abnormal dryness (D0), in this part of the region. Heavy rain was reported (2 to 4 inches of rainfall) over parts of southeastern Louisiana this week, resulting in the 1-category improvement across the area. Conversely, conditions continued to deteriorate in parts of Mississippi, Arkansas and Tennessee, where precipitation totals were 2 to 4 inches below normal this month. Exceptional drought was expanded in parts of central and northern Mississippi and was introduced into eastern Arkansas, while extreme drought was expanded into the northern portions of Tennessee and in parts of Mississippi and Arkansas this week. The expansion and intensification of drought categories were based on short-term SPI/SPEI, NDMC’s short-term blend, streamflow and soil moisture data.

Midwest

Average temperatures were well above normal across the Midwest, with temperatures ranging between 10 to 25 degrees F above normal this week. Much of the region also observed above-normal precipitation this week, especially along the western portions of the Midwest where the heaviest amounts totaled between 2 to 4 inches of rainfall and ranged between 1 to 3 inches (300% to 600%) above normal. Above-normal precipitation helped to alleviate longer-term precipitation deficits and improved soil moisture and streamflow impacts, resulting in improvements to abnormal dryness (D0) and all drought categories. A broad 1-category improvement was made across western Missouri, while additional improvements were made in parts of western Minnesota, northwest Iowa and western Illinois. Meanwhile, dry conditions continued to affect southern parts of Illinois this week, where precipitation is as low as 25% of normal for the month. Degradations were supported by precipitation deficits, short-term SPI/SPEI timescales, streamflow, soil moisture and groundwater data. The water table levels in Carbondale (Jackson County, IL) and near Rend Lake (Jefferson County, IL) are below normal, with both at or near record-low levels. Based on these short-term indicators, Moderate drought (D1) to severe drought (D2) was expanded in southern Illinois.

High Plains

Heavy precipitation fell over much of eastern portions of the region, where rainfall totals were greater than 600% of normal and ranged between 1 to 4 inches this week. Exceptional drought (D4) was improved in eastern Nebraska, while extreme drought (D3) was improved in eastern portions of Nebraska and Kansas where precipitation totals were up to 3 inches above normal for the week. Above-normal precipitation also led to improvements to severe drought (D2) and moderate drought (D1) over parts of eastern Kansas and northeast Nebraska. Abnormal dryness (D0) was improved along parts of the eastern border of the High Plains and in portions of western Kansas and eastern Colorado. Conversely, dry conditions persisted in portions of eastern Colorado and Wyoming where precipitation remains below normal this week. Deteriorating conditions shown in short-term SPI/SPEI, streamflow, soil moisture and snow water equivalent (SWE) data justified degradations across these states. Abnormal dryness was expanded in parts of northern Colorado and in eastern and southern Wyoming, while abnormal dryness was introduced in north-central and northeast Wyoming.

West

Much of the West remained as status quo this week. Precipitation fell across much of the region, which was enough to prevent further degradation but not enough to warrant large improvements. Heavier precipitation fell across the southern portions of Arizona and New Mexico, where rain totals were greater than 600% above normal this week. These beneficial rains, along with precipitation percentiles and short-term SPI/SPEI, soil moisture and streamflow data, resulted in abnormal dryness (D0) and moderate (D1) to extreme (D3) drought improvements along the southern border. Portions of La Paz and Yuma counties reported weekly rainfall totals up to 6 inches above normal. Conditions remained dry in northern parts of the Rockies, resulting in further deterioration across western Montana and eastern Idaho. Moderate drought and abnormal dryness were expanded in these areas based on short-term SPI/SPEI data, low snow water equivalent (SWE) percentiles and precipitation and soil moisture deficits. As for temperature this week, much of the region was above normal with well-above-normal temperatures were observed in parts of northeast Montana which were greater than 10 degrees F above normal.

Caribbean

Heavier rain fell across much of the northern half of Puerto Rico, but no improvements were made based on long-term precipitation deficits. Conditions continued to deteriorate along the southern half of the island, resulting in the slight expansion of abnormal dryness (D0) in southwest Puerto Rico.

The remnants of a cold front combined with other weather features to trigger scattered showers across the U.S. Virgin Islands (USVI) during this U.S. Drought Monitor (USDM) week (December 20-26). But precipitation amounts were low, due in part to a patch of dry air and Saharan dust that briefly filtered across the islands. Based on data available at the time of this report, weekly rainfall totals ranged from a tenth to a half inch on St. Thomas and from a tenth to three-fourths of an inch on St. Croix, with only a few hundredths of an inch reported on St. John. Weekly rainfall totals at the airport stations on St. Croix and St. Thomas were well below normal.

According to USGS well observations, the groundwater level on all 3 islands showed little change from last week – some up and down movement, with depth to water ending up a little deeper than last week. Depth to water on December 25: 5.57 feet on St. John, 7.35 feet on St. Thomas, and 33.16 feet on St. Croix. Satellite VHI showed a few areas of vegetative stress.

With December and year-to-date precipitation totals still well below normal, short- and long-term moderate drought (D1-SL) continued on St. Croix. December has been wet but long-term precipitation deficits remained, so long-term severe drought (D2-L) continued on St. Thomas, while St. John continued with a D-Nothing status (no drought or abnormal dryness).

Pacific

Below-normal precipitation was observed across much of Alaska this week, while precipitation was above normal in south-central Alaska and parts of the interior and Panhandle. Alaska remained free of drought and abnormal dryness this week.

Precipitation varied across the islands of Hawaii this week. Heavier precipitation fell on Kauai, Oahu and the Big Island, resulting in the improvements of drought and abnormal dryness on these islands, while no changes were made on Molokai, Lanai or Maui this week.

The weather conditions across the U.S.-Affiliated Pacific Islands (USAPI) during this U.S. Drought Monitor (USDM) week (December 20-26) consisted of heavy rains associated with a near-equatorial trough (NET) south of the main islands of Micronesia that extended south of the equator as the South Pacific Convergence Zone (SPCZ), and a dry trade-wind pattern north of the NET that dominated most of Micronesia. Some disturbances (troughs or a wind surge) moving in the trade-wind flow brought showers to some areas, but dry weather dominated and began drying out vegetation, especially in the Marianas, increasing fire danger. The SPCZ continued a wet pattern across the Samoan Islands. Based on data available at the time of this report, weekly rainfall totals were about an inch in the Marianas but ranged from no rain to a half inch at most other stations in Micronesia. More than 8 inches of rain was recorded in American Samoa.

Yap reported 1.17 inches of rain this week and 2.84 inches so far in December. These values are far less than the 2-inch weekly minimum and 8-inch monthly minimum needed to meet most water needs. This week marked the fifth consecutive dry week. If no more rain falls this month, December 2023 will rank as the third driest December in a 73-year record, November-December 2023 will rank as the fifth driest November-December, and October-December as the seventh driest. As a result, moderate drought (D1-S) developed at Yap.

Only 0.79 inch of rain was reported at Ulithi this week, with 2.63 inches for December to date. This week marked the eighth consecutive dry week. If no more rain falls this month, December 2023 will rank as the fifth driest December in 41 years, November-December third driest in 40 years, and October-December tenth driest. Moderate drought was worsened to severe drought (D2-S) at Ulithi.

Moderate drought (D1-S) continued at Wotje, which had 0.22 inch of rain this week and 1.94 inches for December. Abnormal dryness (D0-S) continued at Ailinglaplap where only 1.17 inches of rain was reported this week and 5.46 inches for December. Lack of data prevented an analysis from being made at Fananu and Utirik. It was a wet week at Tutuila and most of the stations in the Marianas, so D-Nothing (no drought or abnormal dryness) continued there. For the rest of the stations, this week was dry but previous weeks and/or December have been wet, so D-Nothing continued.

Looking Ahead

During the next five days (December 26-30, 2023), An initial Plains/Midwest upper low will work to establish the eastern upper trough, and an associated surface system will spread rainfall of varying intensity over the East early-mid week along with the potential for lingering snow over the north-central Plains. Over the West, most precipitation should focus near the West Coast with a couple frontal systems tending to produce the highest totals over/near northern California. In terms of temperatures, expect unseasonably warm conditions in the East Tuesday and Wednesday ahead of the approaching frontal system. Morning lows should be particularly anomalous with readings 20-30 degrees above normal for much of the East and Upper Midwest. Warmer than normal temperatures will likely linger even longer in the Northeast through Thursday or Friday. Cooler air behind the system will initially still be on the mild side, with only slightly below normal readings over the central-southern Rockies/Plains on Tuesday. As upper troughing becomes established over the East later in the week, the Southeast and vicinity should trend cooler with temperatures dropping to 5-10 degrees or so below normal. Much of the West should see moderately above normal temperatures through the period.

The Climate Prediction Center’s 6-10 day outlook (valid December 31, 2023 – January 4, 2024) favors above-normal precipitation from California to Alabama, and across much of Alaska, with below-normal precipitation most likely from the northern Plains to the Northeast, in portions of the Northwest and Hawaii, and in parts of southern Florida and Alaska Panhandle. Increased probabilities for below-normal temperatures are forecast for much of southeastern U.S. and on the eastern islands of Hawaii, while above-normal temperatures over much of the West, along the northern tier and in parts of the southern Plains, as well as Alaska and western islands of Hawaii.

Top 10 Ag Stories of 2023: No. 2 - Interest Rates on Farm Loans Soar to 20-Year Highs as Fed Fights Inflation

MT. JULIET, Tenn. (DTN) -- The Federal Reserve's medicine for feverish inflation appears to be working. Inflation declined to 3.1% in November, much closer to the Fed's 2% target. Unemployment rates didn't flinch. The Fed appears poised for a soft landing.

But it's rarely that simple, Rabobank cross-asset strategist Christian Lawrence said. There's usually some form of collateral damage. "It's like shooting a mosquito with a shotgun."

The Federal Reserve changed its mosquito hunting strategy midway through 2023.

At first, it kept with 2022's aggressive schedule and raised rates four times. By the time of its last increase in July, the federal funds rate was in a range of 5.25% to 5.5%, the highest level in 22 years.

By midsummer, recession concerns roared. The stock market slumped. Tech companies announced layoffs. The Federal Reserve stopped shooting, and recently announced it's more likely to cut rates in 2024 than raise them.

FARM LOANS AVERAGE 8% INTEREST RATE

The Federal Reserve sets a range for the fed funds rate, which is the rate banks charge each other on what they borrow to meet their overnight capital requirements. The prime rate, a benchmark for business and consumer loans, is usually higher than the fed funds rate and reserved for only the strongest borrowers. Rates get higher as loan risk rises.

Rates on ag loans tend to be higher than prime, and the Federal Reserve Bank of Kansas City reports the average interest rate on all types of farm loans topped 8% in 2023, the highest in 20 years. Rates have climbed for eight consecutive quarters.

Farmers who rely on operating notes and those looking to finance equipment are feeling the sting of higher interest rates the most. After more than a decade of interest rates near zero, farmers had to manage the cost of money alongside running the farm and, in some cases, the interest on the operating line cost as much as seed in 2023.

Many are taking advantage of vendor financing offers, where an input supplier provides credit, often at a discounted interest rate. Others chose to forgo buying new equipment and wait for a better rate.

LAND MARKET STANDS GROUND

Higher interest rates have had a more nuanced role in the land markets. So much of the land is owned outright -- it's about 84% in Iowa -- or was financed at very low interest rates during the past decade that the impact of higher rates is only being felt in new loans.

Conventional wisdom would suggest higher interest rates would cool buying interest by making mortgages more expensive. However, a tight supply of land for sale means interested buyers need to act or potentially miss a once-in-a-generation chance. After several years of record farm incomes, farmers can usually rally resources and may be willing to take higher rate loans now with plans to refinance when they can.

Investors may not be as willing. With 5-year returns on CDs topping 5% this year, there were more lucrative ways to earn money than cash rent. But deposits don't appreciate, and as the adage says, God isn't making any more land.

While interest rates are only one factor influencing farmland values, most experts and surveys show prices continued to rise in 2023 and are likely to remain steady or decline in 2024.

 

Top 10 Ag Stories of 2023: No. 3 - The Crop Year of Surprises

DECATUR, Ill. (DTN) -- Pick one word to describe the 2023 crop year and most of the farmers would say resilient.

Early in the season, the U.S. Drought Monitor charts formed rickrack lines of red that spiked uncomfortably close to 2012 drought levels. By June 20, 90% of the corn acres were in a drought scenario of some magnitude. Still, farmers found bushels of surprises as they nosed combines into corn and soybean fields.

DTN Lead Analyst Todd Hultman said that except for producers in Nebraska, Kansas and northeastern Iowa, the nearly universal response he heard this year in the Western Corn Belt at harvest was: "The corn yields weren't records, but they were much better than we expected to get from such little rain."

Hultman noted, "In the Eastern Corn Belt, there were some dry patches, but many in Illinois and Indiana reported record crops, and even Wisconsin did better than expected after a long dry stretch in the early summer."

"The other comment that I heard from several areas of the Corn Belt was: 'In late June, we were one or two weeks away from losing our crop.' The demonstration of how rains in July and early August not only saved this year's U.S. corn and soybean crops, but led to a record corn harvest, is still a bit mind-boggling and offers strong proof of how valuable modern seed technology has become," Hultman said.

Purdue University agronomist Daniel Quinn said good planting conditions put farmers in Indiana on a good track to endure. "The soil temps were good. The air temps were good, and the crop got established well throughout most of the state," Quinn said, noting exceptions in northern Indiana.

"That's really what carried us when it got really dry in late May and into June. The root systems were great, and this year we were a little bit lower in average temperatures, and that helped at pollination. We didn't have a lot of moisture, but we got it when it needed it," Quinn added. He said adequate moisture and moderate temperatures during grain fill helped packed on the kernel weight.

IRRIGATION IS LIFE

Conditions were a bit tougher in much of Nebraska, but many areas made remarkable recovery when rains finally materialized, said LG Seeds sales agronomist Mark Grundmayer, whose territory covers the eastern side of the state. "In my area, dryland crops were nearly done on June 30," he said. He remembers dryland corn seedlings resembling brittle onions wavering in the breeze. Soybeans, if they had emerged, were small and very short, he said.

Then, on July 1, it began to rain. "Most areas picked up anywhere from 5 to 15 inches of rain between July and the first week of August," Grundmayer said. "That made a surprising difference in our irrigated (crop) as well, because we literally had no subsoil cushion between irrigation passes to buy us time.

"There were a lot of growers that pumped more water by July 1 this year than they ever have in their careers," he recalled. "Had July not been as cool and that rain had not arrived, it would have pretty much been a train wreck." Those that missed the restorative rains stand as proof that drought remains a real threat to crop producers, he said.

INPUTS PAID OFF

"A lot of people have said the corn hybrids are different today than they were 30 years ago. And, they are," Grundmayer agreed. "But almost everyone had fertilized for a decent crop. Although some growers talked about cutting back on inputs or not spraying because they weren't sure the crop was there early on, most went ahead and took the chance and were glad they did because it paid off," he said.

Grundmayer remembers thinking ears could be 12 to 14 kernel rows around this year since that development is mostly determined between what was a stressful V5-to-V7 growth stages. Instead, he was surprised to find many 16- to 18-row ears.

"I think what we learned this year is to pay attention to making sure we place products that we know do well in dryland or stressful situations," he said. The importance of spreading risk by planting different maturities and genetics was also apparent, he added.

NOT AS FAVORABLE FOR SOYBEANS

Soybeans, on the other hand, didn't respond as favorably to those tough early conditions in his area. White mold took a toll. Plus, that early dry period stacked the first 5 to 6 nodes of the plant tight, Grundmayer said. "Plants took off and grew fast after those July rains, but it wasn't all productive growth," he noted. "You could pull up plants and see where the rain caused it to begin to stretch out. But a lot of energy went to the foliage instead of yield."

PLANTING DATE THOUGHTS

DeKalb/Asgrow technical agronomist Lance Tarochione, who is based in Illinois, would love to take all the credit for the remarkable recovery the crop made in his territory. "There's definitely a message that relates to the work that's been done to make corn and soybeans more able to handle stress.

"But we can't overlook the weather message. We were super dry (in Illinois) in May and June. July and August were above average rainfall for much of my territory. And it rained just in time," Tarochione said.

"It's not that the plant ever really benefits from stress," he said. "But there are times stress doesn't hurt it." He observed that plants in vegetative stages have a built-in safety mechanism that allows them to slow growth and delay reproduction. That defensive move worked to the benefit of some corn this year by pushing pollination into a rainfall pocket, he explained.

Not every region prospered the same. Nor did every region prosper. There were pockets in northeastern Missouri, for example, where corn yields suffered, but had best-ever soybean yields.

Some of those areas were also quick to get corn in the ground this year -- another trend that's worth discussing, he noted. It's generally accepted that early planting of soybeans boosts yields, but Tarochione said the rush to plant corn may be overstated.

"Obviously, no farmer is going to wait to plant corn if they have perfect planting conditions in mid-to-late April. However, corn yields are telling us that farmers should quit living in fear of not being done planting corn by mid-May," he said.

Another thing that is changing, in Tarochione's view, is the number most growers (and agronomists) consider a yield failure. "I would argue that 100 (bushels per acre) is the new zero if you consider the cost of land, equipment and inputs it takes to raise corn today," said Tarochione.

And, the influence weather has on the crop should never be discounted, he added. "If we had 5 inches of rain in June and a half an inch in July, it could have whacked quite a chunk off the state average corn yield," Tarochione observed about Illinois.

"I don't think people appreciate fully how fortunate we were -- how close we were to the edge. Our good central prairie soils can hold about half of what it takes to raise a good crop, but we still need rain in the right time slots," he said.

Top 10 Ag Stories of 2023: No. 4 - 2023 Wild Weather Caused by Quick Change in La Nina to El Nino Ocean Temperatures

This year's weather felt unprecedented in terms of dramatic changes and long-term pattern shifts across wide areas of the country, especially in America's Heartland. A quick change from La Nina to El Nino and its associated effects led to extremes in the weather that drew comparisons to the drought of 2012, causing panic in markets, only to see those concerns be alleviated for much of the country and then swing back the other way with a hot and dry finish to the year.

Weather is always a big topic in a growing season but this year just felt different.

LA NINA START

We started the year with La Nina conditions in the tropical Pacific Ocean (sea-surface temperatures well below the long-term average) but quickly changed to an El Nino state (above-normal sea-surface temperatures) by June. Sea-surface temperatures continued to rise through the end of the year and the developing El Nino certainly made a big change to the weather across North America.

However, La Nina which had been in place since late 2020 had a lagging effect on those changes, and the U.S. and Canadian Prairies routinely became stuck in weather patterns that they could not get out of.

FLOODING, HEAVY SNOWPACK

Early in the year, even while still under La Nina, a pattern more typical of El Nino showed up, bringing flooding rain and heavy snowpack to the Southwest. 

That continued into the spring and included parts of the Plains and Ohio Valley where rainfall deficits were eroded, sometimes dramatically. 

Winter wheat conditions in the southwestern Plains improved dramatically from two years prior, though it was hard to shake off the drought that had occurred the previous few years. Eastern areas of the Corn Belt had delays in planting because of the extended wetness.

DRYNESS PATTERN, WILDFIRES

But from late April through most of June, a different pattern took shape, one of consistent dryness. It was not particularly hot most of the time, but the lack of precipitation induced flash drought across much of the Midwest up through the Canadian Prairies.

For Canada, that meant an extreme wildfire season and frequent, if not constant, smoke that also seeped into the United States. Eastern Canada probably saw the worst of it and reports of thick smoke affecting the Northeast U.S. canceled events in New York City.

Drought first came up on the U.S. Drought Monitor in early June and expanded quickly throughout the month. Producers were worried that their crops would be seriously harmed and comparisons to the 2012 drought permeated social media. 

CORN BELT RAIN, DERECHO

Then, suddenly, it felt like Mother Nature turned on the spigot and sent rounds of rain through much of the Corn Belt, but at a cost. It came with a strong derecho across the southern Corn Belt and some areas did not get the same sorts of rain that others received -- Minnesota, Wisconsin and much of Iowa were particularly hit hard by continued dry weather -- but a true turnaround in crop conditions was noticeable from late June through early August.

The weather pattern was much more favorable for crop development and the comparisons to 2012 were over. 

But concerns over crop production lingered and opinions about how much the early drought hurt both corn and soybeans were still in the air as the weather from mid-August through the end of the growing season was particularly dry yet again and also very hot.

FALL RAIN IN NORTH, EXTREME DROUGHT IN SOUTH

The fall season was more variable as northern areas saw much more rainfall, and even early snow across the Dakotas and Minnesota in October, but much of the Corn Belt kept up a drier stretch of weather, which was even worse farther south.

Increasing drought became extreme down toward the Gulf Coast and D3-D4 drought covered Louisiana and the surrounding areas in eastern Texas to the southern Appalachians. That made for low water levels on the Lower Mississippi River, breaking records for a second consecutive year. 

Rain has helped recently, since November, but water levels continue to be low and limiting to barge traffic.

The bookend of poor growing conditions surrounded by a time of good weather was a season that many saw as wild and unprecedented. Some saw higher yields than they were expecting given the conditions; others did not. It was not a season many of us will forget any time soon.

Idaho And Western United States SNOTEL Water Year (Oct 1) to Date Precipitation % of Normal (12/26)

 

Bureau of Reclamation, Pacific Northwest Region - Storage Reservoirs in the Upper Snake River (12/26)

Average daily streamflows indicated in cubic feet per second.

Reservoir levels current as of midnight on date indicated.

Upper Snake River system is at 64 % of capacity.
(Jackson Lake,Palisades, Grassy Lake,Island Park,Ririe,American Falls,LakeWalcott)
Total space available:	1442873 AF
Total storage capacity:	4045695 AF

Top 10 Ag Stories of 2023: No. 5 - King Corn Gives Up Its Crown as US Export Share Remains in Decline

Less than a decade after the end of World War II, President Dwight D. Eisenhower and the United States Congress passed the Agricultural Trade Development and Assistance Act of 1954 in an attempt expand U.S. trade with "friendly nations," meaning noncommunist countries and definitely not the Soviet Union. The act, Public Law 480, later become known as Food for Peace and successfully relieved the U.S. of surplus ag commodities, while also expanding mutually beneficial markets abroad. When needed, the president was also authorized to use the ag surplus to help in times of overseas famine.

The expansion of U.S. ag markets to the far corners of the world was so successful that American farmers were applauded for helping feed the world. Just a few decades ago, U.S. farmers supplied roughly 60% to 70% of the world's corn and soybean exports and over 30% of the world's wheat exports.

However, in 2023-24, the world share of U.S. corn and soybean exports are under 30% and wheat exports account for less than 10%.

The world is changing. We received painful reminders in 2023. For the first time ever, Brazil exported 2.24 billion bushels (bb) of corn, surpassing the U.S., and is holding a slight lead in 2023-24. The U.S. and Brazil were neck and neck in soybean exports in 2014-15, but Brazil has pulled far ahead since and is expected to produce 43% more soybeans than the U.S. in 2023-24.

The last time the the U.S. was the world's top wheat exporter was 2016-17. Russia has dominated wheat exports in six of the past seven years and in 2023-24, the U.S. is expected to export 725 million bushels (mb) of wheat, the lowest total in more than 50 years.

A year ago at this time, we were still highly concerned about Russia's invasion of Ukraine and the difficulty Ukraine's farmers would have operating in wartime conditions. In 2023, those conditions became even worse after Russia pulled out of the Black Sea grain deal in July and commenced attacking Ukraine's ports and grain facilities. Ukraine's exports of corn and wheat are moving at a slower pace since July and farming has become more difficult in the second year of war.

Sad to say, Russia's 2012 plan to aggressively expand wheat production has worked so well that Russia was able to increase its dominance of world exports in 2023 while keeping wheat prices cheap. The wheat market is now in unprecedented territory with Russia using cheap wheat to extend its strategic influence around the world, while simultaneously taking market share from the rest of the world's traditional wheat producers, including Ukraine and the U.S.

Heading into 2024, the outlook for U.S. exports of the big three crops remains under attack with no end in sight for Brazil's ability to keep converting pasture into cropland at a consistent pace. Russia also has made it a national priority to keep increasing wheat production and will likely continue to do so, as long as weather cooperates. Unlike the opportunity President Eisenhower had to expand U.S. markets abroad in the 1950s, future presidents will have to find new uses for U.S. production as the world is showing more ability to feed itself.

Heading into 2024, the brave new world for agriculture is looking at the promise of new biofuels as the most practical way of restoring lost market share in the world. Who knows? The next generation may find other uses, as well.

Top 10 Ag Stories of 2023: No. 6 - Ongoing Drought Slows Cowherd Expansion During Year

OMAHA (DTN) -- The No. 6 story of the year is cow-calf producers are slow to rebuild the nation's beef cowherd because of continuing drought, despite sharply higher cattle prices.

Issues with forage and feed availability slowed the growth of the nation's herd. In addition, declining cattle prices into the last quarter of the year presented another challenge.

The High Plains region saw more drought in 2023 after many areas saw dry conditions in 2022. The 2022 drought limited cowherd expansion in these areas with reduced grass and forage production, which lingered into 2023 in the form of high-priced hay. Read about that here:

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Then, more drought in the 2023 growing season again caused many High Plains cow-calf producers to cull a portion of their herds due to a lack of grass.

The good news is many locations did see some moisture in midsummer and hay production appears to be better in 2023 than it was in 2022.

Areas of the Great Plains remain dry with different drought designations as 2023 wraps up. What this means for forage availability and price into 2024 is not fully known.

CATTLE PRICES SOARED

As for cattle prices, things were soaring until Oct. 20, 2023. This is when USDA surprised markets with a higher-than-expected 2.206 million head of September cattle placements.

Futures prices kept rising into 2023 as it became obvious available cattle numbers were scarce and packers were having to bid up to secure their weekly needs. In April, the negotiated price of live cattle broke above the previous record high from 2014 and kept rising, reaching a new peak above $190 in June.

At the same time, the price of choice boxed beef hit a new high of $343 per hundredweight (cwt) as it looked like retail demand was tolerating beef's higher prices. After the June peaks, cattle prices held roughly steady through summer, while choice boxed beef prices slipped back near $300/cwt.

Cattle producers received more good news as widespread rains in July brought down expensive corn prices. Seeing cattle's rising prices, specs were lured into the market, holding almost 100,000 contracts net long in mid-September. CFTC data also suggests selling put options on feeder contracts became a popular way to profit from cattle's rising prices.

When USDA's bearish report came out on Oct. 20, it was not a surprise the news of higher placements was greeted by selling, but the extent of the selling became a bearish shock in the weeks following the report.

From a close of $187.72 in February live cattle on Oct. 20, prices fell to a low of $162.40 on Dec. 7, a drop of roughly $25 in 48 days versus a drop of $17 in the cash price of negotiated live cattle. No one can guarantee the low is in, but a lot of damage has been done in a market that will eventually need more calves to rebuild the herd in the years ahead.

Top 10 Ag Stories of 2023: No. 7 - The High Cost of Some Inputs Fall, But So Does Farm Income

OMAHA (DTN) -- There was good news and bad news for crop producers in 2023. The good news was that some major crop inputs, like fertilizer, saw large price declines during 2023. The bad news was that farm income is projected to be down considerably for 2023 as well.

First the good news.

Fertilizer represents about a quarter of total crop input costs for corn producers. In 2023, nutrients saw steady price declines.

According to retail fertilizer prices tracked by DTN, the eight major fertilizers have weakened anywhere from 14% to 42% from year-ago levels.

There were several reasons given for the fall in fertilizer prices during 2023, according to fertilizer retailers and analysts.

Several supply issues across the world lessened nutrient supplies in 2021 and 2022. These included: high input prices for fertilizer manufacturers, weather challenges, import tariff fights and the Russia-Ukraine war. All these issues then combined to cause global fertilizer prices to skyrocket higher in 2022. World fertilizer usage was cut as farmers struggled with nutrient affordability.

By the end of 2022 into 2023, many of these various supply issues started to work themselves out. More fertilizer made it to market, leading fertilizer prices to finally decline.

The outlook for fertilizer in 2024 is for continued better affordability levels which will allow farmers to ramp up their usage.

THE BAD NEWS: FARM INCOME LOWER

Now the bad news. Farm income will end up lower in 2023 than in 2022.

USDA estimates farmers will earn $151.1 billion in net farm income in 2023, 17% below last year.

The above-average total tastes a little bitter, especially considering corn and soybean crops were the most expensive growers had ever planted.

"When grouped by commodity specialization, all farm business specializations, except cattle/calves, wheat and specialty crops, are forecast to see lower average net cash income in 2023. Farms specializing in dairy are expected to see the largest decline relative to 2022," the USDA report stated.

Yet, USDA's forecast at the end of November was higher than previous estimates, reflecting higher-than-expected yields after this summer's drought conditions and commodity prices that gave farmers many profitable opportunities to sell.

The farm income story -- lower than last year, but higher than average -- reflects difficulties mounting in today's environment. Many economists suggest the overall farm economy is moving into another plateau, similar to the aftermath of the ethanol boom in 2013, with commodity prices remaining around the break-even level.

One thing USDA does not consider in its income forecasting is crop insurance payments, which are likely to be higher than in recent years, given the spring crop insurance prices of $5.91 per bushel of corn and $13.76 per bushel of soybeans. Analysis from the University of Illinois shows farmers with 85% revenue protection policies will likely get a payment without having to show any yield loss, reflecting the magnitude of price changes over the growing season.

But many with lower levels of coverage will receive payments, too, especially in the hardest-hit drought areas.

Top 10 Ag Stories of 2023: No. 8 - EPA's Plan to Protect Endangered Species From Herbicides Draws Criticism

JEFFERSON CITY, Mo. (DTN) -- Ever hear of Attwater's prairie chicken, Mead's milkweed, Okeechobee gourd or the rusty patched bumblebee? These are just four of nearly 1,700 plants and animals listed as threatened or endangered under the Endangered Species Act (ESA). In 2023, federal proposals to protect these species from pesticides -- and the increased cost to farmers to do so -- came in at No. 8 on DTN's list of the Top 10 Ag Stories of 2023.

Back in late January, I attended the Weed Science Society of America's annual meeting in Arlington, Virginia. Sitting there near the banks of the Potomac River, just a stone's throw from our nation's capital, I listened as Jake Li, EPA deputy assistant administrator for pesticide programs, outlined the issue. He acknowledged the agency had registered and reregistered pesticides without fulfilling its ESA obligations for decades.

That's right. Decades. Under administrations led by both Democrats and Republicans. Essentially this editor's entire lifetime.

But, like a driver scared to know what's causing the banging noise under the hood, EPA cranked up the proverbial volume on the radio.

Noise? What noise?

"We believe that over 95% of past pesticide decisions that should have complied with ESA never did," said Li during that WSSA meeting.

Eventually, though, that banging noise -- in the form of a near-constant barrage of lawsuits from environmental groups and others -- grew too loud to be ignored. In January 2022, EPA finally turned off the radio and opened the hood.

It began with the adoption of a new EPA policy: The agency would no longer register new conventional pesticide active ingredients without ensuring ESA compliance. In April 2022, EPA released a work plan detailing which actions it would prioritize for ESA compliance under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). The agency published an updated work plan in November 2022, highlighting a "pick list" of 16 interim ecological mitigation measures intended to reduce spray drift and surface water runoff, minimizing pesticide exposure to endangered species.

DRAFT FRAMEWORK RELEASED

Fast-forward to late July 2023. EPA released its Draft Herbicide Strategy Framework, a 96-page proposal outlining how the agency plans to protect listed species and their "designated critical habitats" from agricultural uses of conventional herbicides.

"(The strategy) is really our first attempt to identify protections for hundreds of endangered species at once and to do so much earlier in the pesticide regulatory process using an approach that's much more efficient for EPA to implement," said Li during an August webinar. "By doing all of those things, we think we can provide more certainty to growers about what mitigations they should expect in the future and how we intend to bring herbicides that they use into full compliance with the law."

EPA'S POSITION

Essentially, EPA's position is this: The agency doesn't have the time or resources to comply with the ESA using a traditional pesticide-by-pesticide, species-by-species approach. To meet court-mandated deadlines, it's going to throw blanket protections over everything -- whether they're needed or not -- at a potentially exorbitant cost to farmers.

Criticism of the EPA proposal was universal from those representing agriculture. More than 200 groups -- including the Agricultural Retailers Association, American Farm Bureau Federation and nearly every commodity association -- co-signed a letter submitted in October during the public comment period. The letter stated that the "complex, unworkable proposal would result in significant new, costly regulatory burdens for millions of U.S. agricultural producers."

"We understand EPA has legal obligations related to the Endangered Species Act and support the agency meeting its statutory requirements," the groups wrote. "However, if implemented as proposed, the herbicide strategy would be disastrous for U.S. farmers and our rural communities."

NASDA TROUBLED BY PARTS OF PLAN

The National Association of State Departments of Agriculture (NASDA), which represents the commissioners, secretaries and directors of the state departments of agriculture in all 50 states and four U.S. territories, also commented on EPA's proposal. While voicing support for ESA compliance, the association noted that it remained "very troubled by numerous elements" of the plan.

"State departments of agriculture are troubled by the impacts that the draft herbicide strategy will have on state lead agencies if this effort were to move forward without significant modification," wrote NASDA CEO Ted McKinney. "Our concerns include a lack of sufficient resources, lack of transparency in mitigation measure selection, the complexity of compliance and the enforceability of these measures."

State agencies weren't the only government entities that chimed in during the comment period.

USDA VOICES CONCERNS

"USDA has substantial concerns about the Herbicide Strategy Framework insofar as it proposes complex, and potentially restrictive, mitigations for all outdoor uses of conventional herbicides before full consultation," the agency stated in a letter signed by Kimberly Nesci, director of the USDA Office of Pest Management Policy.

"The proposed spray-drift, runoff and soil erosion mitigations will be an obstacle to the continuing production of agricultural crops in some areas of the U.S., particularly when considering the cumulative mitigations that would be required when growers apply multiple herbicides at the same time, as is commonly done," stated USDA.

MORE SHORTCOMINGS POINTED OUT

Even the Center for Biological Diversity (CBD), one of the original plaintiffs that sued EPA regarding its lack of ESA compliance, pointed out "shortcomings" in the Draft Herbicide Strategy.

"Combined with existing label requirements and other EPA efforts, labels will be very challenging to fully follow," the CBD commented. "In a few years, there will be an herbicide, fungicide and insecticide strategy in place and multiple other programmatic frameworks in place as well. What happens when a farmer wants to apply an herbicide, fungicide and insecticide at the same time? It's just going to start to get really complicated really quickly."

We'll learn just how complicated things will become sometime before May 30, 2024. That's the date by which EPA agreed to issue a final Herbicide Strategy in the settlement of longstanding litigation -- that banging under the hood that's no longer being ignored.

How costly will EPA's repair bill be for agriculture? While we await the mechanic's estimate, it's a safe bet that there will be new requirements that make applying herbicides more expensive, perhaps to the point of being cost-prohibitive in some cases. Other strategies for insecticides and fungicides are expected in the coming years, and those will likely increase the cost, too.

As agriculture enters 2024, a year when farm income is expected to decline, those who rely on herbicides in their cropping systems to control weeds should pay close attention to how these EPA proposals unfold.

Top 10 Ag Stories of 2023: No. 9 - Supreme Court Rules on Two Major Ag Cases

LINCOLN, Neb. (DTN) -- The Supreme Court rarely weighs in on one agriculture case in a given year, let alone two cases of major significance.

In 2023, the Supreme Court handed down May rulings in Sackett v. EPA and National Pork Producers Council v. Ross, and both cases have affected and are expected to continue to affect agriculture in big ways in the coming years.

Perhaps the most consequential of the decisions came when the court sided with two Idaho property owners in an ongoing wetlands dispute with EPA, in Sackett v. EPA.

The court ruled the agency's use of the significant nexus test when making Clean Water Act determinations was too broad, essentially throwing into question the Biden administration's recently finalized waters of the United States (WOTUS) rule.

As a result, the EPA issued an updated final rule in September 2023, removing the test from the text. That led to new lawsuits by ag groups and others who say the EPA broke the law in finalizing the latest rule.

In writing the 5-4 majority opinion, Justice Samuel Alito said EPA misinterpreted the Clean Water Act's reach on property owned by Michael and Chantell Sackett and illegally had been using the significant nexus test in making determinations.

"In sum, we hold that the CWA extends to only those 'wetlands with a continuous surface connection to bodies that are 'waters of the United States' in their own right,' so that they are 'indistinguishable' from those waters," Alito said in his opinion.

"This holding compels reversal here. The wetlands on the Sacketts' property are distinguishable from any possibly covered waters."

As has been the case for many years, the waters of the U.S. rule continues to be mired in controversy.

CONTROVERSIAL PROPOSITION 12

That same month, the Supreme Court also upheld California's controversial Proposition 12 -- an animal-welfare law approved by voters in the state.

Prop 12 makes it a criminal offense and civil violation to sell whole pork meat in California unless the pig it comes from is born to a sow that was housed within 24 square feet of space and in conditions that allow a sow to turn around without touching an enclosure.

The law essentially requires farmers from across the country to adapt their confinement operations if their pork is sold in the state.

It remains to be seen how Proposition 12 affects the U.S. hog industry as a whole.

A Rabobank study estimates at least 15% of U.S. producers would face "considerable cost" to convert their operations.

In addition, in the early implementation of Proposition 12 consumers in California are facing higher prices and restaurants and grocery stores face increasing challenges in finding compliant pork supplies.

Top 10 Ag Stories of 2023: No. - 10 Livestock Producers Lean Into USDA's Livestock Risk Protection Coverage (LRP)

OMAHA (DTN) -- One of the biggest underlying stories of 2023 was how livestock producers embraced Livestock Risk Protection policies.

Livestock Risk Protection (LRP) has become a popular risk-management option for producers. The policies are set up to reduce losses from price declines. As prices were dropping in the fall, the policies appear to have been salvation for producers.

LRP policies go back 20 years: USDA's Risk Management Agency (RMA) increased the premium subsidies in 2019 and continued to adjust them in 2020, creating tiered rates based on coverage levels. Policies can range from 70% to 100% with the premium subsidies at 55% for policies up to 79% protection levels, and subsidies declining to 25% for the 95%-and-higher coverage levels.

Producers can cover up to 12,000 head a year, and they can purchase LRP contracts for both feeder cattle and fed cattle. Coverage periods can stretch from as little as 13 weeks to as long as 52 weeks. Producers also must indicate their ownership interests in the cattle that are covered.

LRP operates like hedging, so producers need a handle on how that works. Unlike crop insurance, contracts actually change daily. Prices for new contracts are posted in the late afternoons on weekdays and available until 8:25 a.m. Central Time the next day.

At the end of a policy, an indemnity is generated if the regional/national cash price average is below the insured coverage price. If the cattle are sold more than 60 days before the end of the contract date, producers cannot collect an indemnity or get their premium back unless their share of the cattle is properly transferred.

USDA Risk Management Agency (RMA) data on livestock policies isn't as detailed as crop insurance, but RMA shows livestock policies have jumped from 7,000 policies in 2021 and $14 billion in liability, to more than 16,300 for this year with liability covered at $26.45 billion.

Producers in 2023 focused more heavily on feeder cattle contracts than fed cattle:

-- Feeder cattle insurance contracts: 19,249 policies covering 4.2 million head through Dec. 15, more than twice the total number of feeder cattle covered in 2022.

-- Fed cattle insurance contracts: 6,760 fed cattle policies involving 858,165 cattle, through Dec. 15, up more than 263,400 head from 2022.

Already, producers are lining up in even greater volumes for 2024 policies.

More than 21,000 feeder cattle policies are sold for 2024 covering nearly 2 million head.

More than 8,850 fed cattle policies are sold for 2024 covering 736,600 cattle.

SWINE

Despite all the focus on cattle, swine producers also use LRP, though in smaller volumes. Still, 1,555 policies in 2023 covered 36.5 million hogs. They generated $346 million in indemnity payments, 219% higher than the payout in 2022.

Expect to see more focus on LRP and other livestock insurance policies in the coming years.

FALLING PRICES LED TO QUESTIONS

As DTN Lead Analyst Todd Hultman explained, as live and feeder cattle prices fell on the CME, questions were raised about the role of LRP. "So far, there has been no evidence of a cash flow problem among LRP providers, and it may help to know the LRP program falls under the jurisdiction of the Federal Crop Insurance Corporation and premiums are subsidized by USDA's Risk Management Agency," Hultman explained.

WEANED CALF RISK PROTECTION

RMA also is setting up more policy options for producers. Weaned Calf Risk Protection will be available to livestock producers in four states beginning in 2024.

The policy is part of the USDA's Risk Management Agency (RMA) program that offers Actual Production History (APH) coverage for beef producers to insure revenue from spring calving operations.

This program becomes available to cow-calf producers in the states of Colorado, Nebraska, South Dakota and Texas. Coverage levels between 50% and 85% will be available, as well as catastrophic coverage. The sales closing date for these policies is Jan. 31, 2024.

Prices under Weaned Calf Risk Protection will be set using: (1) USDA Agricultural Marketing Service (AMS) auction price data for the 23 price-determining states to produce a regional-weighted average price series for cattle between 200 and 750 pounds; and (2) Chicago Mercantile Exchange prices for feeder cattle.

The AMS price will consist of daily auction data compiled into weighted average monthly prices for the two respective regions included in this new coverage.

Texas falls into the South-Central region. Colorado, Nebraska and South Dakota fall into the North-Central region.

This Week's Drought Summary (12/21)

Moderate or heavy precipitation amounts fell in three main areas this week: central and northern California, parts of the southwestern Great Plains (especially southwest Kansas through the Oklahoma and Texas Panhandles), and along the East Coast. Warmer-than-normal temperatures occurred this week across much of the central and northern contiguous United States. For areas in drought or abnormal dryness that received heavy precipitation amounts, improvements occurred locally due to lessening precipitation deficits and increased streamflow and/or soil moisture. In areas between the southern Great Plains heavy rain and the East Coast heavy rain, deficits in streamflow, soil moisture, and precipitation worsened, leading to widespread degrading conditions. Heavier rains fell on the northeast half of Puerto Rico this week, and scattered moderate drought and abnormal dryness continued on the island. A mix of degradations and improvements occurred in Hawaii this week, with a wet trade wind pattern bringing needed rainfall to windward slopes of Oahu and Molokai. Alaska remained free of drought and abnormal dryness this week.

Northeast

Heavy rains and some mountain snows fell in the Northeast region this week, especially in the eastern two-thirds of the region. Two-inch precipitation amounts were common, and according to radar estimates, amounts locally exceeded 5 inches. From Pennsylvania northward, temperatures were mostly above normal for the week, with most spots checking in from 4 to 12 degrees warmer than normal.

While much of the region went into the week free of drought, this week’s rains brought widespread improvements to drought or abnormal dryness in Maryland, southeast Pennsylvania, and New Jersey, where precipitation deficits were alleviated. In western New York, where precipitation amounts were lighter, a combination of improvements and degradation occurred, depending on changes in soil moisture, groundwater, and streamflow. Likewise, in Nantucket and Martha’s Vineyard, short-term moderate drought developed where precipitation deficits grew and groundwater lowered.

Southeast

Heavy rains fell this week in eastern parts of Virginia, the Carolinas, Georgia, and central and eastern Florida. At least one location in coastal South Carolina received over 14 inches of rain, resulting in a two-category improvement from moderate drought to no dryness this week. West of these areas, precipitation amounts were either very little or nothing, with a tight gradient between this and the heavier rain amounts.

Due to improving streamflow and lessening precipitation shortfalls, improvements to the drought and dryness picture were widespread in the eastern Carolinas and Virginia, with improvements also occurring locally in Georgia and the Big Bend of Florida. Meanwhile, in Georgia and Alabama, deficits in soil moisture and precipitation worsened, leading to degrading conditions. Temperatures this week were mostly within 4 degrees of normal, with below-normal temperatures most common in areas that received heavier rainfall.

South

A soaking rain event occurred this week in parts of the western Great Plains, especially in the Texas and Oklahoma Panhandles and adjacent western Oklahoma and western north Texas. In these areas, precipitation deficits and soil moisture improved enough for widespread improvement to abnormal dryness or drought. Recent rains from before this week led to a reassessment of conditions and some localized improvements in eastern Tennessee. Drier weather occurred in between these locations, with the exception of some rain across Louisiana (which did little to improve the situation but prevented worsening of conditions). Deficits in soil moisture, streamflow, and short- and long-term precipitation continued to locally worsen in northeast Texas, Arkansas, northern Mississippi, and western Tennessee, leading to degrading conditions in some of these areas. Other than parts of Mississippi and Louisiana, most of the region experienced warmer-than-normal temperatures this week, with western Oklahoma and parts of western north Texas and the Texas Panhandle coming in at 4 to 8 degrees above normal.

Midwest

A mix of dry and wet weather occurred across the Midwest region this week. Temperatures were mostly above- or well-above-normal, except for eastern Kentucky. Temperatures in parts of Minnesota soared to at least 12 degrees above normal for this week. Mostly drier-than-normal weather in Missouri led to degrading conditions northwest of St. Louis and in south-central Missouri, where deficits in streamflow, soil moisture, and precipitation grew. The same occurred in central and southwest Iowa, western Kentucky, parts of Indiana, northwest Ohio, southern Lower Michigan, and along the Ohio-Kentucky-West Virginia border area. In the Kansas City area, recent rains improved streamflow and soil moisture enough for improvements in drought and abnormal dryness, which extended into Kansas just east of Emporia.

High Plains

In parts of southern Colorado, south-central and eastern Nebraska, and much of Kansas, moderate to heavy precipitation amounts fell this week. Improvements to ongoing drought and abnormal dryness occurred in a north-to-south band across central and western Kansas, where this week’s precipitation lessened precipitation deficits and improved soil moisture. Localized improvements to drought also occurred in south-central Nebraska, where this week’s rain was enough to alleviate precipitation and soil moisture deficits somewhat. Low snowpack and dry conditions for the past few months continued in northern Colorado, leading to a southward expansion of moderate drought and abnormal dryness in high elevations.

The wet weather in southern Colorado led to some improvements to drought conditions. Dryness from the past couple of months increased in eastern South Dakota and in the Black Hills, leading to abnormal dryness expanding or developing in both areas. Temperatures in Nebraska, Colorado, and Kansas were mostly 3 to 9 degrees above normal, with a few local cooler exceptions. In the Dakotas, temperatures ranging from 6 to locally 15 degrees warmer than normal were common.

West

Coastal central and northern California, and parts of the northern Central Valley and northern Sierra Nevada, received heavier precipitation this week, exceeding 2 inches in some places. Lighter precipitation amounts fell in coastal portions of Oregon and Washington. In parts of northern and southeast New Mexico, precipitation this week was enough to improve streamflow, soil moisture and precipitation deficits sufficiently for localized improvements to drought conditions. Short-term drying in parts of east-central Utah led to a small expansion of abnormal dryness. In southwest and south-central Montana, low snowpack amounts, short-term precipitation deficits, and soil moisture deficits led to localized expansion in drought and abnormal dryness. A reassessment of short- and long-term conditions in northwest Montana, the northern Idaho Panhandle, and parts of central and western Washington led to localized improvements to ongoing drought and abnormal dryness.

Caribbean

Heavier rain amounts of 1.5 to 3 inches fell across the northeast half of Puerto Rico this week, while the southwest half of the island was drier. A couple sites recorded below-normal temperatures for the week, while most others came in either near normal or 2 to 5 degrees above normal. Drought and abnormal dryness remained unchanged this week.

Beneficial rain fell across the U.S. Virgin Islands (USVI) during this U.S. Drought Monitor (USDM) week (December 13-19), the result of the remnants of a frontal boundary combined with trade-wind showers. Weekly rainfall totals ranged from 1 to 1.5 inches on St. Thomas, half an inch to 2 inches on St. John, and a fourth to two-thirds of an inch on St. Croix. According to USGS well data, groundwater responded favorably with rising levels this week on St. Thomas and St. John, while groundwater levels rose at first then began falling again on St. Croix. The depth to water level was 5.00 feet on St. John and 6.74 feet on St. Thomas, both of which are in the top third of the recent historical record, but 32.83 feet on St. Croix, which is in the lowest third of the historical record. Satellite observations (VHI) showed little stressed vegetation on the three USVI islands.

With year-to-date precipitation totals still well below normal, and December rainfall totals below normal, long-term moderate drought (D1-L) was changed to short- and long-term moderate drought (D1-SL) on St. Croix. A wet (so far) December has reduced short-term dryness on St. Thomas, but long-term precipitation deficits continue, so short- and long-term severe drought (D2-SL) was changed to long-term severe drought (D2-L) on St. Thomas. St. John continued with a D-Nothing status (no drought or abnormal dryness).

Pacific

Temperatures from 2 to 8 degrees above normal occurred in southeast Alaska and on the Arctic Coast. Near-normal or colder-than-normal temperatures occurred in other parts of the state. Generally, east-central and southeast Alaska were wetter than normal this week, while the North Slope and northwest Alaska were drier than normal. The state remained free of drought and abnormal dryness this week.

Temperatures across Hawaii this week were mostly a degree or two below normal, with a few local exceptions. Abnormal dryness expanded across the rest of southern Kauai this week after dry weather in the Lihue area continued. On Oahu, a wet trade wind pattern continued, leading to improving conditions in the northeast facing half of the island. On Molokai, improvements occurred in the west owing to the wet trade wind pattern. On Maui, recent rainfall led to lessening severe drought coverage in the central valley area. Elsewhere, conditions remained the same. On the Big Island, conditions locally improved or degraded, based on stock pond reports and recent rainfall.

In the U.S.-Affiliated Pacific Islands (USAPI), a near-equatorial trough, with circulations moving through it, brought rain to southern portions of Micronesia during this U.S. Drought Monitor (USDM) week (December 13-19), while a dry trade-wind pattern dominated northern portions, except for a shear line/cold front that eventually reached the Marianas. South of the equator, the South Pacific Convergence Zone (SPCZ) moved over American Samoa, bringing heavy rains that ended the abnormally dry conditions on Tutuila.

Weekly rainfall totals were above the 1- or 2-inch weekly minimum needed to meet most water needs in southern portions of the Federated States of Micronesia (FSM), in central and northern parts of the Marianas, in Palau, and in most of the Marshall Islands. They were below the weekly minimum in Guam, western and eastern parts of the FSM, and parts of the Marshalls. In American Samoa, the heavy rains inundated Tutuila and caused flash flood conditions, with Pago Pago reporting over 13 inches of rain for the week and the automated station at Siufaga Ridge recording over 14 inches. Most locations in the USAPI, that were dry this week, were wet (above corresponding mins) either for December so far this month or during previous weeks.

In the FSM, abnormally dry (D0-S) conditions developed at Yap where the last 4 weeks have been dry (below the weekly minimum) and November and December were dry. Based on data available at the time of this report, less than an inch (0.86 inch) of rain was reported at Yap for this week and only 1.67 inches has fallen so far in December. Moderate drought (D1-S) continued at Ulithi, where the last 7 weeks, and November and December, have been dry. Ulithi reported only 0.25 inch of rain this week and 1.76 inches for so far this month.

In the Marshall Islands, moderate drought (D1-S) continued at Wotje, where the last 5 weeks, November, and December have been dry, while abnormal dryness (D0-S) developed at Ailinglaplap, where the last 4 weeks and December to date have been below corresponding minimums.

The remaining reporting locations in the USAPI had no drought or abnormal dryness issues.

Looking Ahead

From Wednesday, December 20 to Christmas evening, the National Weather Service Weather Prediction Center is forecasting three areas of heavier precipitation accumulations. The first, where amounts are likely to be between 0.75 to 3 inches of precipitation, is forecast for far western Oregon and Washington. In the Southwest, 0.75 to 2 inches of precipitation is forecast from Arizona into southern California, with higher amounts possible near and northwest of Los Angeles. From the central Gulf Coast northward to the middle Missouri and Mississippi River Valleys, precipitation amounts are forecast to range from a half inch to 2 inches, with locally higher amounts possible from northeast Texas into western Arkansas, and along the Louisiana, Mississippi, and Alabama coasts.

From December 26-30, the NWS Climate Prediction Center forecast favors below-normal precipitation for most of the region from the Mississippi River and Great Lakes west to the Great Basin. Above-normal precipitation is favored along the West and East Coasts and in deep south Texas. Below-normal temperatures are favored in areas near the Louisiana and Texas coasts. Elsewhere, near- or warmer-than-normal temperatures are forecast for much of the rest of the contiguous United States. Except for southwest Alaska, above-normal precipitation is favored for much of the state. Colder-than-normal temperatures are more likely in the western third of Alaska, while the eastern third is more likely to see warmer-than-normal weather. Drier-than-normal weather is favored across Hawaii, and cooler-than-normal temperatures are favored on the Big Island and the eastern half of Maui.