US corn growers could sink deeper into red on downturn
A more than 10pc drop in new-crop corn futures since early May has chipped away at early-season sales revenue estimates, potentially pushing domestic growers deeper into the red amid another season of elevated expenses.
US corn farmers face a $1.77bn cut in projected sales revenue based onpreliminary estimates for the 2024-25 crop as growers vie to liquidate old-crop inventories — pressuring new-crop 2025 futures values to the lowest level within the last two years.
The incremental dip in projected revenue has outpaced lower expenses and steepened projected losses for domestic corn growers, with estimated losses on a per-acre basis primed to slump to -$111.86/acre before considering government assistance, according to an Argus analysis of US Department of Agriculture (USDA) data.
Current conditions mark a reversal from the prior three seasons for corn growers and has sparked concern for another lengthy downturn in grain markets, according to Purdue University's Ag Economy Barometer survey.
Farmers surveyed in August "expect this year's farm income downturn to last for an extended period" after enjoying multiple seasons of above-$200/acre profits from 2021-22 — which were preceded by seven consecutive years of double-digit losses from 2014-20, according to the USDA.
"Over the last several months, farmers' concerns about weakening commodity prices have become more evident," Purdue reported today. "In the August survey, producers' concerns about commodity prices nearly eclipsed what has consistently been their top concern: high input prices."
Growers this year have grappled with the weakening grains market by extending and taking out new non-real-estate loans. Demand for new operating loans was above normal, outpaced real estate loan demand through the first half of the year and is expected to remain strong through the third quarter, according to the Federal Reserve Bank of Chicago — which represents growers from Iowa, Illinois, Indiana, Michigan and Wisconsin.
Corn prices will continue to face above-average inventories and record yield estimates, which has forced growers to liquidate inventory to clear space for this season's crop.
A silver lining, though, is lower acreage from other major corn producing countries, which could stem the current downtrend in corn values.
Argentina, which is the third-largest exporter of corn, could slash planted acreage by up to 50pc on price and pest concerns, while Brazilian farmers face worsening weather conditions that could erode planted area for the upcoming season.
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Norfolk Southern replaces CEO with CFO
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Washington, 12 September (Argus) — Eastern Class I railroad Norfolk Southern (NS) has appointed a new chief executive, replacing former executive Alan Shaw after determining he violated company policies by having a consensual relationship with the company's chief legal officer. NS' board announced late Wednesday that it had promoted chief financial officer Mark George to replace Shaw. The board said Monday it was investigating Shaw for potential misconduct in actions not consistent with NS' code of ethics and policies, but did not provide details. The railroad yesterday clarified that Shaw's departure was not related to the railroad's "performance, financial reporting and results of operations". Instead, the board voted unanimously to terminate Shaw with cause, effective immediately, for violating policies by engaging in a consensual relationship chief legal officer Nabanita Nag. She was also dismissed by NS. Shaw worked at NS for 30 years and was appointed chief executive in May 2021, following six years as chief marketing officer. Earlier this year he led NS through a proxy fight with a group of activist investors that sought his replacement. The overall effort failed but the challengers secured three seats on the board . The investors had been displeased with the railroad's financial performance and "tone deaf response" to the February 2023 derailment in East Palestine, Ohio . New chief executive George had served as NS' chief financial officer since 2019. Prior to that, he held roles at several companies including United Technologies Corporation and its subsidiaries. "The board has full confidence in Mark and his ability to continue delivering on our commitments to shareholders and other stakeholders," NS chairman and former Canadian National chief executive Claude Mongeau said. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Port of NOLA to close prior to TS Francine
Port of NOLA to close prior to TS Francine
Houston, 10 September (Argus) — The port of New Orleans (Nola) in Louisiana and terminal operators there are limiting operations today in preparation for a full closure Wednesday as tropical storm Francine passes. Terminal operators are expected to reopen on 12 September after damages are assessed. United Bulk Terminals (UBT) issued a force majeure this morning from the Davant terminal on concerns for employee safety. The company did not disclose a timeline for reopening. UBT specializes in coal and petcoke along with other commodities. Associated Terminals will suspend operations 11-12 September and will assess damages on 13 September. The National Weather Service forecasts Francine to make landfall tomorrow on the Louisiana coast as a hurricane. Commodities including petcoke, coal, agriculture and fertilizer are likely to be affected by the port closure. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Export demand lifts Australian beef export values
Export demand lifts Australian beef export values
Dalby, 10 September (Argus) — The Australian Bureau of Agricultural and Resource Economics and Sciences (Abares) has projected record-breaking exports valued at A$14bn ($9.3bn) for beef, veal and live cattle in the 2024-25 fiscal year ending 30 June, fuelled by increasing global demand. Reduced global beef supplies are anticipated as major exporters, mainly the US and Brazil, undergo destocking phases because of prolonged droughts. This is coupled with a robust Australian cattle herd size, which is expected to bolster domestic slaughter rates. Beef and veal export values are forecast by Abares to rise by 4pc from a year earlier to A$12.9bn in 2024-25, driven primarily by rising demand from the US where domestic production is falling. Australian beef exports to the US have increased by 69pc during January-August compared with the same period last year to 96,265t, according to Australia's Department of Agriculture, Forestry and Fisheries (DAFF). Live cattle export values are also projected by Abares to increase, with an expected rise of 25pc from 2023-24 to A$1.1bn. This growth is attributed to a higher volume of cattle being offered for feeder, slaughter and breeder exports. Australia during January-August exported 512,700 head of cattle to key markets, such as Indonesia and Vietnam, a significant increase from the 413,681 exported during the same period last year, according to DAFF data. The Australian dollar is expected to average $0.67 against the US dollar in 2024–25, slightly up from $0.66 in 2023–24 but 5pc below the previous five-year average, according to Abares. This slight increase in the exchange rate is likely to enhance the competitiveness of Australian exports in international markets. Input costs for the beef supply chain are also anticipated to ease. Labour shortages, which have been a significant issue for processors in recent years, are expected to improve with an increase in overseas workers and a weaker economy, Abares said. Global freight prices are also projected to fall heading into 2025, driven by weaker global demand and increased shipping capacity, which should help reduce container freight costs. By Amy Phillips Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia sees large chickpea exports in Oct-Dec
Australia sees large chickpea exports in Oct-Dec
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