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Targeting the Middle of the Chain

Secretary Vilsack has identified strengthening local and regional food systems as one of the four pillars of USDA’s commitment to rural economic development. Part of this focus in on the middle of the supply chain. Todd Gleason reports USDA is helping to make investments in this space.

USDA Toolkit Designed to help Pitch Local Foods

The United States Department of Agriculture has been moving to support local food production throughout the nation. The agency is focusing on bringing new farmers and businesses into rural and urban areas. To that end, it has developed an online toolkit entrepreneurs can use to help pitch their ideas to lenders and local governments.

John Deere Sought Hagie

Amber Kohlhass, Communications Manager - Hagie Manufacturing

John Deere News Release

MOLINE, ILLINOIS (March 29, 2016) - Deere & Company (NYSE: DE) has entered a joint venture with Hagie Manufacturing, the U.S. market leader in high-clearance sprayers. In the agreement, Deere acquires majority ownership of Hagie Manufacturing, which will continue producing sprayers in its current Clarion, Iowa location.

Equipment made by the joint venture will continue to carry the Hagie brand while sales and service for Hagie equipment will be integrated into Deere’s global distribution channel over the next 15 months.

“Hagie Manufacturing is known for innovation and its strong customer understanding in high-clearance spraying equipment,” said John May, president, Agricultural Solutions and Chief Information Officer at Deere. “High-clearance spraying equipment is a new market for Deere. The expertise at Hagie allows John Deere to immediately serve customers who need precision solutions that extend their window for applying nutrients.”

Alan Hagie, chief executive officer at Hagie Manufacturing, said, “We have great products at Hagie that help producers be more profitable but we need a business model that helps us reach more customers. This partnership with Deere allows our solutions to reach customers on a global scale and ensure they are supported with the world-class Deere dealer organization.”

May said the joint venture investment allows John Deere to provide a broader range of sprayer options and integrate Deere’s precision technology into the Hagie equipment to help customers reduce costs and improve yields.

Deere & Company (www.JohnDeere.com) is a world leader in providing advanced products and services and is committed to the success of customers whose work is linked to the land – those who cultivate, harvest, transform, enrich and build upon the land to meet the world’s dramatically increasing need for food, fuel, shelter and infrastructure.

Hagie Manufacturing (www.hagie.com) provides innovative crop protection solutions that are purposeful tools to drive economic benefits, while also performing responsible stewardship and best agricultural practices. Hagie was advised by NCP, Inc. as its exclusive financial advisor on the transaction.

Fewer Hogs and Higher Prices

The last Hogs and Pigs report is good news for pork producers. Todd Gleason reports it showed fewer hogs are being raised in the United States and that, in turn, should boost prices.

Pork producers say they’ll reduce the size of their breeding herds. Or at least that’s what the latest Hogs and Pigs report showed. Purdue Extension Agricultural Economist Chris Hurt says farrowing should begin slow this spring and summer. However, right now, the breeding herd is as big as it was at this same time last year. Still, it’s a pattern of change and reduction says Hurt.

Quote Summary - The herd had been in an expansion phase from the last half of 2014 through 2015. That expansion was largely because of record high profits due to baby pig losses from PED. That expansion phase seemingly has now ended.

This ‘ending’ is a bit uneven geographically. For the 16 states USDA surveys for the March report, the breeding herd is up nine percent in Oklahoma and 10 percent in Texas. Some of the primary Midwestern states reported a decrease in their breeding herds over the past year; Iowa down five percent, Missouri down four percent, and Minnesota down two percent. In Indiana, where corn yields were reduced by summer flooding, the breeding herd was down seven percent. Those are all the current breeding herd numbers. It’s the forward looking projections that provide hope for higher pork prices.

Pork supplies in the first quarter of 2017 will come from the three percent smaller summer farrowings. However, with more pigs per litter and heavier weights, pork production is expected to be only about one percent smaller.

Chris Hurt’s price forecast for market hogs then is in a range of $49 to $54 for all of 2016, about $1 higher than last year. He expects prices to rise to the $55 to $58 range for averages in the second and third quarters, normally the grill-out seasonal highs, and then to finish the year in the mid-to-higher $40s.