Showing posts from tagged with: agribusiness news

How the Digital Revolution Impacts Agribusiness

Posted December 13, 2016 by Administrator

tablet farmerTechnological advances are helping farmers increase resiliency, scale and sustainability. Technology is one of the most effective tools in our society for reducing poverty because more than a third of the global population relies on agriculture for a living. New digital applications are now making it easier for farmers to improve their productivity and are helping them scale their businesses at a much faster rate than in the past as it pertains to these three key constraints: 1) resilience, 2) scale, and 3) market incentives.

Traditionally, small farms without a safety net would suffer debilitating setbacks from bad weather, crop disease and low prices. Today, farmers can access mobile apps that help take the guess work out of planting, growing and harvesting crops by providing real-time weather information and agronomic tips. Emergent market insurance players are using mobile technology to bring life and crop insurance that protect small farmers from economic shocks.

Innovative products generate mobile payments and receipts whenever farmers sell to agribusiness using their platform. This provides them with a dashboard that gives them touch point financial history right from their phone. Better tracking and reports make them more attractive to a bank when they apply for credit, insurance and other financial tools that can help them withstand potential setbacks and prevents them from being taken advantage of by buyers. Market prices are easily accessible by phone which helps them make better decisions and maximize their profits by selling at precisely the right time.

In order to be successful, farmers need sizeable, stable markets. Mobile platforms are making it easier for farmers to manage their contracts, make and accept payments, and give them clarity about their business strategy by helping them identify patterns, efficiencies and best practices. Mobile supply chain management now makes working together vastly easier for buyers and small operators.

Digital technology makes this exciting times for agribusiness. Mobile innovations are changing the way dairies tend their cows, access micro-insurance to prevent bad weather risk, or determine the most scientifically optimal time to plant crops.

The demand for food in the global economy is expected to soar 70 percent by 2050. Digital technology may very well be the answer that will help to solve some of the most difficult agricultural challenges of our time. To learn more about protecting and growing your agribusiness, contact us today.

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Food Safety as an Emerging Risk for AgriBusiness in America

Posted November 29, 2016 by Administrator

qtq80-6zlLqVModern food production systems are vulnerable, as evidenced by food safety crises in America. Food borne illnesses strike 48 million Americans every year, many of whom are hospitalized or killed from deadly viruses and bacteria (i.e. salmonella, E. coli, and many more), parasites, allergens, mold, toxins and contaminants. These incidences have caused the public to express concern about the safety of the food they consume and the food supply chain.

Food safety risks can be reduced if food safety hazards are identified early and important information is exchanged properly between all parties involved in maintaining food safety. The Food and Drug Administration (FDA) works with a variety of public and private partners to ensure a healthy system of food safety oversight that uses the research-based knowledge to prevent food-related issues that make people sick.

In order to achieve the FDA’s goals for improving the safety and security of our nation’s food supply, the food system must be viewed as a whole. Everyone who participates in the food chain and supply system must be held accountable for preventing hazards and following the rules established. For example, the FDA has specific prevention-oriented standards for seafood, juice and eggs as does the U.S. Department of Agriculture for meat and poultry. All parties involved in the food supply chain need to follow best practices established by food safety pioneers and to recognize that any breakdown in the farm-to-table process can cause great harm to the health of consumers and extensive disruption and economic loss to the food industry as a whole.

Food processors need to evaluate their operations and make plans for reducing – or eliminating – hazards. Monitoring standards that prevent contamination are essential as are implementation of corrective measures when necessary. As food safety rules and standards are improved, the FDA needs to have more effective enforcement tools for ensuring prevention measures are adequately and effectively implemented, which may include mandatory recalls when needed to quickly remove contaminated food from the market.

Science-based research standards need to be taken into account when developing standards for the safe production of fruits and vegetables that will minimize or eliminate the risk of serious illness or death. Safety standards need to be set and followed for the transportation of all types of food.

Food safety is an emerging risk for America, one that can be improved with collaboration between all existing food safety agencies in the country, a focus on prevention, research-based policies, determination of best practices, rules and standards, and accountability for all aspects of the food production and supply chains. If these principles are adhered to, the future of food safety in American will achieve a dramatic and positive change.

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Feds to Hold Livestock Haulers Responsible for Inhumane Treatment of Animals

Posted October 12, 2016 by Administrator

livestock imageIn an unprecedented ruling, the U.S. Department of Agriculture’s Food Safety Inspection Service has announced a new proposed policy that would hold livestock transporters responsible for the mistreatment of the animals they carry. The new rule would allow civil or criminal action to be taken against instances of animal abuse related to animals with a connection to an official slaughterhouse establishment.

The current law holds farm owners and slaughterhouses solely responsible for the care of animals in conjunction with slaughter. This policy proposal is the first time that carriers will be held accountable for the handling of the livestock they are hired to transport. This is significant because many of the truck carriers are not employed by either the farmers or the slaughterhouses and are therefore exempt from the current law. Policymakers hope that the new policy will improve the welfare of livestock during transport.

One major change policymakers have explicitly included in the proposed rule is that speeding while transporting livestock will be considered inhumane treatment. Speeding while hauling animals bound for slaughter has been known to result in the animals slipping and becoming injured due to falls. Under the proposed new ruling, FSIS can investigate and find the transportation professional liable. The FSIS believes the new ruling will improve conditions for livestock bound for slaughter by making sure the proper procedures for hauling will be enforced.

The official notice will be published in the Federal Register. The proposed policy will go into effect in 90 days unless public comment calls for a revision of the ruling. At Cline Wood we represent top agribusiness insurance carriers across the country with access to all types of insurance programs. We treat your company as if it were our own. Our goal is to go beyond simply providing you with affordable insurance. Contact us today to find out how we can help you manage your risk, which directly contributes to your bottom line.

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Are U.S. Farmers Moving Away from Commodity to Niche Markets?

Posted September 27, 2016 by Administrator

Today’s farmers are re-evaluating their crops and enterprise centers by considering whether it makes sense to continue producing commodities or to expand their customer base.

In the past, U.S. farmers primarily produced lower-priced commodity yields. Contracts for major commodity suppliers, such as canning and seed processors, were lucrative and there was little incentive to expand their markets. More and more farmers are looking to establish their reputations as top-tier suppliers who provide high-quality yields and who can charge accordingly.

But in the 1980’s there were massive consolidation of processor industry companies, which resulted in giant corporations that monopolized the industry. These corporate giants have imposed a single price-driven tier structure on their growers in many enterprise sectors, which forces farmers to lower their standards in order to keep renewing their contracts and stay in business.

Niche markets open up many new market possibilities for today’s farmers. Examples of this might include:

  • Roadside stands that offer local, fresh products
  • Specialized grains for local microbreweries and distilleries
  • Pre-selling meat to local buyers such as pastured pigs, grass-fed beef, free-range poultry, etc.
  • Organic grain for local millers and bakeries
  • Minimally processed dairy products to local outlets
  • Organic vegetables sold to consumers who want food grown without pesticides
  • Pasteurized goat milk for consumers who are allergic to cow milk

shutterstock_3008334There are thousands of niche markets open to innovative farmers. There are many factors that influence the development of the niche market, including transportation costs and the growing demand for locally grown and organic products. Farming to niche markets is limited only by the imagination and willingness of the farmer to think creatively along with the courage to test new markets and find ways to make them profitable.

Here at Cline Wood we represent top agribusiness insurance carriers across the country with access to all types of insurance programs. We treat your company as if it were our own. Our goal is to go beyond simply providing you with affordable insurance. Contact us today to find out how we can help you manage your risk, which directly contributes to your bottom line.

Our dedicated agribusiness staff of professionals are committed to giving you the best service at an affordable price. Click here to learn more.

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USDA Announces Climate-Change Initiative to Support Farmers, Ranchers and Forest Land Owners

Posted August 25, 2016 by Administrator

The U.S. Department of Agriculture (USDA) has announced a new climate change initiative aimed at supporting the nation’s farmers, ranchers and forest land owners. The initiative, Building Blocks for Climate Smart Agriculture & Forestry, is a comprehensive and detailed approach to issues related to climate change in the U.S. The goal of the initiative is to reduce greenhouse gas emissions, increase carbon storage and generate clean renewable energy. The USDA’s strategy is to implement best practices that are designed for working production systems that provide multiple economic and environmental benefits. The strategy will also help support resilience to extreme weather, which is a vital consideration for agribusiness.

The USDA expects to reduce net emissions and enhance carbon sequestration by over 120 million metric tons of CO2 equivalent per year by 2026. This equals about 2% of economy-wide net greenhouse emissions, the equivalent of taking 25 million cars off the road.

Climate change is the greatest challenge facing our future generations according to President Obama. The effects of climate change can no longer be ignored or denied. The planet’s warmest year on record was last year, and 14 of the 15 hottest years on record have happened since the year 2000. America’s ranchers and farmers have already been experiencing the devastating effects of impacts of climate change, such as severe flooding, extreme heat, drought, wildfires, disease and pests. These frightening climate-change related changes are driving the historic actions of the President to cut the carbon pollution that drives climate change and protect America from the impacts.

The 2014 Farm Bill gives the USDA the authority to provide incentives and technical assistance to farmers, ranchers and forest land owners. The initiative will address soil health, improve nutrient management, conserve and enhance forest resources on private and public lands. In addition, the USDA will increase efforts to improve energy efficiency, develop renewable energy and use biomass both as a liquid fuel and to contribute to heating, cooling and electric needs.

The Climate-Change Initiative consists of the following 10 strategies:

  1. Soil Healthlivestock image
  2. Nitrogen Stewardship
  3. Livestock Partnerships
  4. Conservation of Sensitive Lands
  5. Grazing and Pasture Lands
  6. Private Forest Growth and Retention
  7. Stewardship of Federal Forests
  8. Promotion of Wood Products
  9. Urban Forests
  10. Energy Generation and Efficiency

For more information about the Building Blocks for Climate Smart Agriculture and Forestry Initiative click here.

To learn more about agribusiness news, coverages, and educational webinars, contact us.

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Rural Communities Receive Agricultural Benefits

Posted May 16, 2016 by Administrator

The USDA announced that the Agriculture and Food Research Initiative Foundational program will be issuing over $15 million in grants to improve sustainability and support agricultural growth.

livestock imageThe goal of the funding is to benefit rural communities with:

  • Economic growth
  • Rural community development
  • Education
  • Research
  • Extension programs
  • Sustainability

The grants will be awarded to many projects, including:

  • Small and Medium-sized Farm Program
  • Agricultural Economics, Markets and Trade
  • Agricultural Environment and Natural Resources
  • Innovations for Rural Entrepreneurs and Communities

These projects are being conducted by Universities throughout the US, as well as non-profits, community groups, foundations, associations and businesses.

The projects will help:

  • Protect the environment
  • Enhance quality of life
  • Alleviate poverty
  • Educate consumers
  • Influence consumer behavior
  • Support local and regional food systems

The funding for these projects will help rural communities and agribusinesses understand how markets perform, reduce their impact on the environment and learn about demographic changes.

The small and medium-sized farms program helps:

  • Improve management strategies
  • Improve competitiveness
  • Improve viability
  • Improve commodity operations

For small and medium farms in several industries:

  • Dairy
  • Livestock
  • Crop
  • Forestry
  • Poultry

To learn more about the latest industry news, trends and innovations, contact the experts at Cline Wood.

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Soy Meal to Boost Soybean Market

Posted May 2, 2016 by Administrator

shutterstock_273948848Some experts believe that soy meal may be the boost the soybean market needs to finally pull away from its below cost-of-production trend. And the US is in position to become the place where the world turns to meet its soy meal needs.

Trouble in South America

Recent issues in Brazil and Argentina have caused experts to lower their soybean production estimates for 2015-2016. Argentina’s inclement weather has cause the worst harvest in a decade. It also fulfilled experts’ calculation that it would take a weather event to drive the price of soybeans up from its record lows.

With Argentina struggling with its poor harvest, the US is next in line to meet global and domestic soy meal needs. US currently has 300 million bushels of soybeans and with demand growing, the price per bushel is expected to rise.

Not all trade experts are convinced that soy meal will be able to save the soybean market. While other experts say that what happens in the soy meal market in May and June will set the tone for how soybean futures will perform.

To help understand the ambiguous future of the soybean market and other important agribusiness news, contact the experts at Cline Wood.

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Consumer Comfort Good News for Agribusiness

Posted March 16, 2016 by Administrator

shutterstock_129868538The Bloomberg News Consumer Comfort Index has been remaining steady for the last two months and is approaching a three month high. This is good news for agribusinesses as consumers feel more confident in food and energy prices.

Eight Weeks with Little Change

The Consumer Comfort Index has varied only slightly over the last eight weeks. In January and February, the index has remained in the 44 range with only a .6 change week to week. This is the best index the US has seen since the second quarter of 2013.

Jobs and Gas Main Factors
The two main factors that are said to contribute to the consumer comfort index are gas and jobs. The decrease in the jobless rate and cheaper gas make consumers more comfortable in making certain purchase decisions. These decisions include food and other consumer goods.

Good News for Agribusiness

Consumer confidence and increased spending in food and other agriculture-based products is good news for agribusinesses that have been hit hard by the rocky economy. Farms that were struggling before may be able to look forward to increased revenues as this trend continues and more people visit their local grocery stores.

For more industry news and agribusiness tips, contact us today.

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Agribusiness Feels the Burden of Weight Limits

Posted February 25, 2016 by Administrator

State and feshutterstock_3008334deral laws control the weight of the cargo commercial trucks carry over roads and bridges. These limits often have loopholes some freight can slip through. For agribusiness, however, the weight limits are stricter and increase the cost of transporting crops across the state and across the country.

Protecting Roads and Bridges

The main reason for weight limits is to reduce the wear and tear on roadways and bridges. The federal government has laws in place to control the gross weight of commercial trucks and the cargo they carry. The Federal Highway Administration (FHWA) ensures that states comply with the federal guidelines.

Some States Changing the Laws

Some states are looking at changing state weight limit laws. In the state of Georgia, trucks can haul up to 80,000 pounds of cargo. There are ways to circumvent this law, however, and some trucks can haul as much as 100,000 pounds.

Agribusinesses in Georgia struggle with the weight limit law because this exemption doesn’t extend to agriculture products. The new bill that is under review in the House Transportation Committee would increase weight limits to between 84,000 and 88,000 pounds.

Supporters of the bill say that the funding that states will receive from the passage of the SAFE Act would help Georgia repair existing roads and bridges so that they could withstand the weight from the extra cargo. The bill also allows some leeway for agriculture products that are being transported from the field. It is difficult to weigh products accurately in the field, so some trucks may be over the weight limit and not realize it. The new bill would give agribusinesses some breathing room so that they aren’t fined when transporting crops for processing.

With the passage of the SAFE Act, more states may increase weight limits due to the fact that the infrastructure will receive long overdue maintenance. If that is the case, agribusinesses across the country may be able to reduce agriculture costs.

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Agriculture Act Not A Complete Safety Net

Posted February 4, 2016 by Administrator

Agribusiness Insurance CoverageARC-County was created as part of the 2014 Agriculture Act to help protect agribusinesses who had below average crop yields. Many farmers and others in the agriculture industry believe that with this safety net in place, crop insurance isn’t necessary. That isn’t the case. ARC-County offers limited protection and figures are based on lower levels as part of the county average. Because farm yields are variable, the coverage received from ARC-County wouldn’t be enough to offset losses for most agribusinesses.

In a recent study comparing ARC-County with different types of policies and coverage levels, agribusinesses would need ARC-County and crop insurance to help offset loses. And since 2016 is expected to be a tough year for crop yields, you may want to consider keeping your existing crop insurance coverage. A quick refresher from the USDA/FSA is below:

County ARC: Payments are issued when the actual county crop revenue of a covered commodity is less than the ARC county guarantee for the covered commodity and are based on county data, not farm data. The ARC county guarantee equals 86 percent of the previous 5-year average national farm price, excluding the years with the highest and lowest price (the ARC guarantee price), times the 5-year average county yield, excluding the years with the highest and lowest yield (the ARC county guarantee yield). Both the guarantee and actual revenue are computed using base acres, not planted acres. The payment is equal to 85 percent of the base acres of the covered commodity times the difference between the county guarantee and the actual county crop revenue for the covered commodity. Payments may not exceed 10 percent of the benchmark county revenue (the ARC guarantee price times the ARC county guarantee yield).

Individual ARC: Payments are issued when the actual individual crop revenues, summed across all covered commodities on the farm, are less than ARC individual guarantees summed across those covered commodities on the farm. The farm for individual ARC purposes is the sum of the producer’s interest in all ARC farms in the State. The farm’s ARC individual guarantee equals 86 percent of the farm’s individual benchmark guarantee, which is defined as the ARC guarantee price times the 5-year average individual yield, excluding the years with the highest and lowest yields, and summing across all crops on the farm. The actual revenue is computed in a similar fashion, with both the guarantee and actual revenue computed using planted acreage on the farm. The individual ARC payment equals: (a) 65 percent of the sum of the base acres of all covered commodities on the farm, times (b) the difference between the individual guarantee revenue and the actual individual crop revenue across all covered commodities planted on the farm. Payments may not exceed 10 percent of the individual benchmark revenue.

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