Tag Archives: Agriculture

Missouri Drought Alert 99% effected with 26% in an extreme state of drought

Missouri Drought Map 2023

Matthew 24:7 For nation will rise against nation, and kingdom against kingdom, and there will be famines and earthquakes in various places.

Important Takeaways:

  • A drought is a period of drier-than-normal conditions that results in water-related problems and other issues. When little or no rain falls, soils can dry out, plants can die and livestock can suffer. When dry weather persists, stream and river flows can decline, water levels in lakes and reservoirs can fall and water in wells and aquifers can decline. Drought can have a serious impact on health, agriculture, economies, energy and the environment.
  • Droughts can develop quickly or gradually over several weeks, months or even years, and worsened with extreme heat or wind. A drought can end just as quickly or gradually as it began, but more commonly persist for months. A single rainstorm may provide temporary relief, but its impact is short term. Thunderstorms often produce large amounts of rain in a very short time, causing the rain to run off into streams rather than soak into the ground. Several soaking rains may be required to recharge groundwater and break a drought.

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Chinese Interest in US Agriculture: Warning of weaponization of seeds and bio warfare

Revelations 6:3-4 “when he opened the second seal, I heard the second living creature say, “Come!” 4 And out came another horse, bright red. Its rider was permitted to take peace from the earth, so that people should slay one another, and he was given a great sword.

Important Takeaways:

  • Security Threat: China’s Interest in US Agriculture
  • The more US agricultural technology China acquires, especially through theft, in order to become dominant in the agritech field, the worse the US will fare when it comes to selling its own technology, whether to China or third countries.
  • China has been expanding its ownership of US land over the past decade from 13,720 acres in 2010 to 352,140 acres in 2020, according to the U.S. Department of Agriculture (USDA)
  • China’s largest purchase in the US agriculture sector so far has been Smithfield Foods in 2013, the largest pork producer in the US. China’s WH Group — a state-owned company, which began as a meatpacking business in China — owns it today. At the time of the sale, Smithfield had 25 U.S. plants, 460 farms, and contracts with 2,100 producers in 12 states and the ownership of Smithfield accounted for more than 146,000 acres of US land.
  • The potential weaponization of agricultural IP is possible,” the USSC warned. “… Similar to hacking a computer code, Beijing could easily hack the code or DNA of U.S. GM seeds and conduct bio warfare by creating some type of blight that could destroy U.S. crops… a virus or fungus engineered to kill a GM plant could wipe out an entire crop…”

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Agriculture research shows Food Prices the highest in the past 14 years

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Food prices will see biggest increase in 14 years, according to Missouri researchers
  • According to the Food and Agricultural Policy Research Institute, a think tank at the University of Missouri, food prices will be at least 5% higher in 2022 compared to last year. That’s the biggest single-year increase in 14 years.
  • While prices will be up across the board, Westhoff said some foods will see especially high costs.
  • “We have seen much larger increases year over year for meats, for fats and oils, and for fresh fruits than you did for most other products,” he said.

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Factbox: Healthcare, financial services, agriculture targeted in Biden order

(Reuters) – In an executive order on Friday, U.S. President Joe Biden aims to remove barriers to competition in such industries as healthcare, financial services and agriculture while boosting wages and lowering prices, the White House said.

The order:

* Encourages the leading antitrust agencies to focus enforcement efforts on problems in key markets and coordinates other agencies’ ongoing response to corporate consolidation.

* Calls on the leading antitrust agencies, the Department of Justice (DOJ) and Federal Trade Commission (FTC), to enforce the antitrust laws vigorously and recognizes that the law allows them to challenge bad mergers that past administrations did not previously challenge.

* Announces a policy that enforcement should focus in particular on labor markets, agricultural markets, healthcare markets (which includes prescription drugs, hospital consolidation and insurance), and the tech sector.

* Establishes a White House Competition Council, led by the Director of the National Economic Council, to monitor progress on finalizing the initiatives in the order and to coordinate the federal government’s response to the rising power of large corporations in the economy.

LABOR MARKETS

* Encourages the FTC to ban or limit non-compete agreements.

* Encourages the FTC to ban unnecessary occupational licensing restrictions that impede economic mobility.

* Encourages the FTC and DOJ to strengthen antitrust guidance to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefit information with one another.

HEALTHCARE

* Directs the Food and Drug Administration to work with states and tribes to safely import prescription drugs from Canada, pursuant to the Medicare Modernization Act of 2003.

* Directs the Health and Human Services Administration (HHS) to increase support for generic and biosimilar drugs, which provide low-cost options for patients.

* Directs HHS to issue a comprehensive plan within 45 days to combat high prescription drug prices and price gouging.

* Encourages the FTC to ban “pay for delay” and similar agreements by rule.

Hearing Aids

* Directs HHS to consider issuing proposed rules within 120 days for allowing hearing aids to be sold over the counter.

Hospitals

* Underscores that hospital mergers can be harmful to patients and encourages the Justice Department and FTC to review and revise their merger guidelines to ensure patients are not harmed by such mergers.

* Directs HHS to support existing hospital price transparency rules and to finish implementing bipartisan federal legislation to address surprise hospital billing.

Health Insurance

* Directs HHS to standardize plan options in the National Health Insurance Marketplace so people can comparison shop more easily.

TRANSPORTATION

Airlines

* Directs the Department of Transportation (DOT) to consider issuing clear rules requiring the refund of fees when baggage is delayed or when service isn’t actually provided, such as when a plane’s WiFi or in-flight entertainment system is broken.

* Directs the DOT to consider issuing rules that require baggage, change and cancellation fees to be clearly disclosed to the customer.

Rail

* Encourages the Surface Transportation Board to require railroad track owners to provide rights of way to passenger rail and to strengthen their obligations to treat other freight companies fairly.

Shipping

* Encourages the Federal Maritime Commission to ensure vigorous enforcement against shippers charging American exporters exorbitant charges.

AGRICULTURE

* Directs U.S. Department of Agriculture (USDA) to consider issuing new rules under the Packers and Stockyards Act making it easier for farmers to bring and win claims, stopping chicken processors from exploiting and underpaying chicken farmers, and adopting anti-retaliation protections for farmers who speak out about bad practices.

* Directs USDA to consider issuing new rules defining when meat can bear “Product of USA” labels, so that consumers have accurate, transparent labels that enable them to choose products made in the United States.

* Directs USDA to develop a plan to increase opportunities for farmers to access markets and receive a fair return, including supporting alternative food distribution systems like farmers’ markets and developing standards and labels so that consumers can choose to buy products that treat farmers fairly.

* Encourages the FTC to limit powerful equipment manufacturers from restricting others’ ability to use independent repair shops or do DIY repairs, such as when tractor companies block farmers from repairing their own tractors.

INTERNET SERVICE

* Encourages the Federal Communications Commission (FCC) to prevent ISPs from making deals with landlords that limit tenants’ choices.

* Encourages the FCC to revive the “Broadband Nutrition Label” and require providers to report prices and subscription rates to the FCC.

* Encourages the FCC to limit excessive early termination fees.

* Encourages the FCC to restore Net Neutrality rules undone by the prior administration.

TECHNOLOGY

* Announces an administration policy of greater scrutiny of mergers, especially by dominant internet platforms, with particular attention to the acquisition of nascent competitors, serial mergers, the accumulation of data, competition by “free” products, and the effect on user privacy.

* Encourages the FTC to establish rules on surveillance and the accumulation of data.

* Encourages the FTC to establish rules barring unfair methods of competition on internet marketplaces.

* Encourages the FTC to issue rules against anticompetitive restrictions on using independent repair shops or doing DIY repairs of one’s own devices and equipment.

BANKING AND CONSUMER FINANCE

* Encourages DOJ and the agencies responsible for banking (the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency) to update guidelines on banking mergers to provide more robust scrutiny of mergers.

* Encourages the Consumer Financial Protection Bureau (CFPB) to issue rules allowing customers to download their banking data and take it with them.

(Editing by Howard Goller)

‘Big risk’: California farmers hit by drought change planting plans

By Norma Galeana and Christopher Walljasper

FIREBAUGH, Calif. (Reuters) – Joe Del Bosque is leaving a third of his 2,000-acre farm near Firebaugh, California, unseeded this year due to extreme drought. Yet, he hopes to access enough water to produce a marketable melon crop.

Farmers across California say they expect to receive little water from state and federal agencies that regulate the state’s reservoirs and canals, leading many to leave fields barren, plant more drought-tolerant crops or seek new income sources all-together.

“We’re taking a big risk in planting crops and hoping the water gets here in time,” said Del Bosque, 72.

Agriculture is an important part of California’s economy and the state is a top producer of vegetables, berries, nuts and dairy products. The last major drought from 2012 to 2017 reduced irrigation supplies to farmers, forced strict household conservation measures and stoked deadly wildfires.

California farmers are allocated water from the state based on seniority and need, but farmers say water needs of cities and environmental restrictions reduce agricultural access.

Nearly 40% of California’s 24.6 million acres of farmland are irrigated, with crops like almonds and grapes in some regions needing more water to thrive.

“I’m going to be reducing some of our almond acreage. I may be increasing some of our row crops, like tomatoes,” said Stuart Woolf, who operates 30,000 acres, most of it in Western Fresno County. He may fallow 30% of his land.

Del Bosque, who grows melons, asparagus, sweet corn, almonds and cherries, said his operation could lose more than half a million dollars in income, and put many of his 700 workers out of work. He and other farmers say drought has been exacerbated by California’s lack of investment in water storage infrastructure over the last 40 years.

“Fundamentally, a storage project is paid for by the people who want the water,” said Jeanine Jones, drought manager for California’s Department of Water Resources. “All we can do is deliver what mother nature provides.”

New dams face environmental restrictions meant to protect endangered fish and other wildlife, and don’t solve near-term water needs, said Ernest Conant, regional director of the Bureau of Reclamation, California-Great Basin region, the federal agency that overseas dams, canals and water allocations in the Western United States.

“We simply don’t have enough water to supply our agricultural users,” said Conant. “We’re hopeful some water can be moved sooner than October, but there’s no guarantees.”

Water scarcity threatens Del Bosque’s watermelon crop, which is due to be harvested in August. But it also has dire consequences for those planting it.

“If there is no water, there is no work. And for us farm workers, how are we going to support the family?” said 57-year-old Pablo Barrera, who was planting watermelons for Del Bosque.

Woolf said as the state continues to restrict water access, he’s exploring ways to generate income off the land he can no longer irrigate, including installing solar arrays and planting Agave, normally grown in Mexico to make tequila.

“You’ve got to absorb all of your farming costs on the few acres that you’re farming,” he said. “How do we maximize the value of the land that we are not farming?”

(Reporting by Norma Galeana in Firebaugh, California and Christopher Walljasper; Editing by Caroline Stauffer and Diane Craft)

Brazil on drought alert as country faces worst dry spell in 91 years

cracked ground in Brazil

By Roberto Samora and Ana Mano

SAO PAULO (Reuters) – Brazilian government agencies warned of droughts across the country this week as the nation faces its worst dry spell in 91 years, hurting hydroelectric power generation and agriculture while raising the risk of fires in the Amazon rainforest.

Late on Thursday, an agency linked to Brazil’s Mines and Energy Ministry recommended that the country’s water regulator ANA recognize a state of “water scarcity,” after a prolonged drought hit Central and Southern parts of Brazil along the Paraná river basin.

Separately, a weather monitoring agency linked to the Agriculture Ministry issued its first “emergency drought alert” for June to September, saying rains are likely to remain scarce in five Brazilian states during that period.

The lack of rain across much of Brazil has negative implications for grain cultivation, livestock and electricity generation, as Brazil relies heavily on hydro dams for its power. Dry weather this year also raises the risk of severe fires in Brazil’s Amazon rainforest and Pantanal wetlands, scientists say.

Drier-than-normal weather has hurt production of sugar and coffee in Brazil, the world’s largest supplier of those products, pushing up futures prices for the commodities.

Coffee futures touched a fresh 4-1/2 year high on Friday with traders worried that critical soil moisture in Minas Gerais could affect the 2022 coffee crop as well.

The Mines and Energy Ministry said dry conditions will persist in coming months, particularly in the Southeast and Center West regions.

As it tries to deal with the situation, the ministry announced measures aimed at adjusting water levels that supply the country’s hydro dams in a bid to avoid power shortages.

(Reporting by Roberto Samora, Ana Mano in São Paulo; Additional reporting by Marcelo Teixeira in New York; Editing by Richard Chang)

North American farmers profit as consumers pressure food business to go green

By Karl Plume and Rod Nickel

CHICAGO/WINNIPEG, Manitoba (Reuters) – Beer made from rice grown with less water, rye planted in the off-season and the sale of carbon credits to tech firms are just a few of the changes North American farmers are making as the food industry strives to go green.

The changes are enabling some farmers to earn extra money from industry giants like Cargill, Nutrien and Anheuser-Busch. Consumers are pressuring food producers to support farms that use less water and fertilizer, reduce greenhouse gas emissions and use more natural techniques to maintain soil quality.

Investments in sustainability remain a tiny part of overall spending by the agriculture sector, which enjoyed healthy profits in 2020.

Some companies, like farm retailer and fertilizer producer Nutrien, are also opening new revenue potential for farmers by monetizing the carbon their fields soak up. The companies say technology is improving measurement and tracking of carbon capture, although some environmental activists question the benefit of such programs and how sequestered greenhouse gas volumes can be verified.

Sustainable techniques farmers are adopting include refraining from tilling soil at times to preserve carbon. Some are adding an off-season cover crop of rye or grass to restore soil nutrients instead of applying heavy fertilizer loads over the winter that can contaminate local water supplies.

A study conducted by agriculture technology company Indigo Ag estimated that if U.S. corn, soy and wheat farmers employed no-till and cover crops on 15% of fields, they would generate an additional $600 million by reducing costs, bolstering soil productivity or selling carbon credits.

Indigo has a partnership with brewer Anheuser-Busch Inbev NV, which plans to buy 2.6 million bushels of rice this year grown with less water and nitrogen fertilizer than conventional rice. Anheuser-Busch said that is up from 2.2 million bushels last year and accounts for 10% of its U.S. rice supplies.

Bill Jones, the brewer’s manager of raw materials, said farmers voluntarily growing rice with a lower environmental impact along the sensitive Mississippi River would be less disruptive to supplies than having local authorities require such practices by legislating changes to water and nitrogen use.

“We look at supply chain security. I see this gaining traction,” he said, noting that Minnesota and other U.S. states and conservation districts worried about polluting the Mississippi are already introducing limits on how much manure farmers can spread on fields. Arkansas farmer Carson Stewart used the program for the first time this year, earmarking his entire 340-acre rice crop to Anheuser-Busch. Depending on milling quality, his rice may earn up to $1.50 a bushel more than conventional rice, a premium of about 27%, he said.

10 MILLION ACRE SHIFT

While companies expect Washington and Ottawa to grow more committed to funding and regulating sustainable farming, industry sources and activists said widespread adoption remains far off.

“They come with high up-front costs,” said Giana Amador, managing director at climate-focused NGO Carbon180. “We’re seeing a huge differentiation in quality among all these corporate commitments .” In September, privately held Cargill Inc said it would help North American farmers shift 10 million acres to regenerative practices during the next 10 years by offering them financial support and training.

Pushed by demand for greener foods from food companies that buy its products, Cargill has already signed up 750 farmers to green programs, representing 300,000 acres, said Ryan Sirolli, Cargill’s director of row crop sustainability. With projects like one that pays Iowa farmers to leave soils untilled or to create field buffers to prevent fertilizer runoff, Cargill hopes to cut 30% of its supply chain greenhouse gas emissions over the next decade.

“We’ve done a lot to stop soil erosion. And we’ve had a reduction of 538 tons of CO2, which is the equivalent of taking 104 passenger cars off the road,” said Iowa farmer Lance Lillibridge, who estimates he will earn about $37 an acre in a Cargill pilot project this year.

Environmental groups and consumer activists are skeptical about such corporate sustainability pledges, noting that Cargill has not made good on its promise to eliminate deforestation from supply chains by 2020.

As more premium-paying buyers emerge, more farmers will be enticed into sustainable growing, said Devin Lammers, CEO of Gradable. The unit of input dealer Farmers Business Network matches farmers using sustainable practices with buyers such as Unilever, Tyson Foods and ethanol producer POET.

CARBON CREDITS

Some farmers are making money by verifying the amount of climate-warming emissions their fields soak up and selling carbon credits to polluting companies seeking to reduce their net emissions. Agribusiness companies call that a double win for farmers as their fields become healthier and they earn extra cash.

This week, Saskatchewan-based Nutrien said it was launching a sustainable agriculture program on 100,000 acres in the United States and Canada, with expansion planned later in South America and Australia.

Nutrien Chief Executive Chuck Magro estimated that farmers will earn an additional $50 per acre in profits under the program – $20 per acre for carbon credits and $30 per acre worth of higher crop yields.

The announcement followed Nutrien’s 2018 purchase of digital farming company Agrible, which helps farmers log reduced emissions and water use. Magro said in an interview that the aim is to enable farmers to use that data to sell carbon credits. He noted that previous efforts produced meagre returns that were not worth the effort for farmers who had to wade through hundreds of pages of documents.

Agriculture accounts for 3% of the global carbon credit market, but that looks to grow to 30% by 2050, Magro said. “We see carbon being the next big agricultural revolution,” he said.

Matt Coutts, chief investment officer of 100,000-acre Coutts Agro in Saskatchewan, plans to sell carbon credits through Nutrien for up to 10,000 acres per year of canola, lentils and spring wheat. He expects they could eventually generate at least C$75,000 in annual additional revenue. Ohio-based start-up Locus Agricultural Solutions helped Iowa farmer Kelly Garrett create 22,400 tonnes in carbon credits by verifying his fields locked in about 1.4 tonnes per acre from 2015 to 2019. Garrett received a check for 5,000 of those credits in November, after e-commerce platform Shopify bought them on the carbon trading marketplace Nori for $75,000.

“The ability to sell our carbon credits through the Nori system and help the rest of the world be more green is a wonderful benefit to our economy and our finances,” Garrett said.

Still, Nori noted that Microsoft Corp passed on a deal to buy most of Garrett’s remaining credits because they were not verified by on-farm soil tests. Nori deems individual soil tests too costly, and instead verifies its credits based on soil type, crops planted and other data, said Alexsandra Guerra, the company’s director of corporate development.

Microsoft declined to comment. Few North American farmers have gone through the vetting process Garrett underwent, which also limits supplies of the high-quality carbon credits that some buyers seek. Some critics say carbon saved from no-till farming can easily escape if the soil is tilled again. “Statements that soils can sequester all of our emissions and more are overstated … There’s no way we could make that shift fast enough to address the climate crisis,” said Tara Ritter, senior program associate with the Institute for Agriculture and Trade Policy.

PAYING UP FRONT

Despite those doubts, food companies are banking more on carbon capture and regenerative agriculture. General Mills offers farmers technical advice while other companies pay growers up front to adopt greener practices. PepsiCo, maker of Quaker Oats and Frito-Lay chips, pays farmers $10 an acre to plant cover crops over winter, which can reduce erosion and control weeds and insects.

This helps PepsiCo meet its sustainability targets and secure its food supply, said director of sustainable agriculture Margaret Henry. PepsiCo subsidized cover crops such as rye and radish last year across 50,000 Midwest acres and plans to grow the program further.

Henry pointed to an added benefit: Cover crops soak up excess moisture, making many fields ready for spring planting two weeks earlier than fields that lay fallow. “We want this to be a win win for the long term,” she said.

(Reporting by Karl Plume in Chicago and Rod Nickel in Winnipeg, Manitoba; Editing by Caroline Stauffer)

U.S. House pauses vote on bill to fund government and avoid shutdown

WASHINGTON (Reuters) – The U.S. House of Representatives put on hold an expected Tuesday vote on a bill to fund the government through Dec. 11, while bipartisan congressional leaders discussed whether to include farm aid sought by President Donald Trump, lawmakers and aides said.

The delay “relates to numerous agriculture provisions” in the bill, one Democratic aide said. With government funding lapsing on Sept. 30, House Democrats announced Monday they had filed the stopgap funding legislation, but they angered Republicans by leaving out some farm money that Trump wanted.

The bill generally continues current spending levels, avoiding a government shutdown when funding runs out on Sept. 30. It would give lawmakers more time to work out spending through September 2021, including budgets for military operations, healthcare, national parks, space programs, and airport and border security.

“At some point in the next day or two, we expect that there will be a continuing resolution on the floor that will continue the current spending agreement until December,” said Representative Hakeem Jeffries, chairman of the House Democratic caucus, who have the majority. He said he hoped it would be “bipartisan in nature.”

The version that House Democrats filed on Monday did not include $21.1 billion that the White House sought to replenish the Commodity Credit Corporation, a program to stabilize farm incomes, because Democrats considered it a blank check for political favors. Trump had promised more farm aid during a rally in Wisconsin last week.

Republicans protested the omission, with Senate Majority Leader Mitch McConnell arguing that farmers need the help.

“The talks continue, and hopefully we’ll reach an agreement,” McConnell told reporters on Tuesday.

A House Republican aide said Democrats had earlier walked away from an agreement that included the farm aid.

“Republicans will continue to fight for these provisions to be included,” he said.

Leaders of both parties say they are not interested in a standoff that could lead to a government shutdown, amid a pandemic and just weeks before the Nov. 3 elections.

(Reporting by Susan Cornwell; additional reporting by Richard Cowan and David Morgan; Editing by Steve Orlofsky and Bernadette Baum)

Iowa says derecho storm destroyed grain storage bins as Trump heads to state

CHICAGO (Reuters) – A severe windstorm last week destroyed or seriously damaged more than 57 million bushels of commercial grain storage capacity in Iowa and a similar amount on farms, the state’s agriculture department estimated on Tuesday, raising concerns ahead of the autumn harvest.

Fresh estimates of the damage from the Aug. 10 derecho emerged as U.S. President Donald Trump prepared to visit Iowa, the top U.S. corn producing state, the day after approving disaster aid for the state.

The storm crumpled steel storage bins, flattened corn fields, caused widespread damage in towns and left thousands of people without power.

The destruction compounded troubles for a U.S. agricultural economy already battered by extreme weather, the U.S.-China trade war and disruptions to labor and food consumption from the COVID-19 pandemic.

Iowa’s agriculture department said it will cost more than $300 million to remove, replace or repair the damaged grain storage bins.

(Reporting by Tom Polansek; Editing by Chizu Nomiyama and Grant McCool)

Major grain traders face one-two punch from U.S. floods, trade war

Water stands next to a field of crops near Putnam County, Illinois, U.S. July 5, 2019. Picture taken July 5, 2019. REUTERS/Stephanie Kelly

By Karl Plume

CHICAGO (Reuters) – Severe U.S. weather likely dented earnings for large grain companies including Archer Daniels Midland Co and Bunge Ltd for a second straight quarter, adding to headwinds from a still-unresolved U.S.-China trade war, analysts and economists said.

ADM and Bunge, as well as peers Cargill Inc and Louis Dreyfus Co, known as the ABCD quartet of global grain trading giants, faced processing-plant downtime, rail, and barge shipping delays and other supply uncertainty this spring as historic floods ravaged the central United States.

The weather woes are heaping more pain on the battered U.S. agricultural sector already hard-hit by a years-long crop supply glut and the U.S.-China trade war now entering its second year. The tariffs China imposed on soybean exports from the United States in retaliation for U.S. duties on Chinese goods curbed shipments of the most valuable U.S. export crop.

The excessive rains and flooding could also have a lasting impact on the grain merchants, whose latest round of quarterly earnings will start this week. ADM and Cargill are viewed as particularly vulnerable due to their outsized U.S. footprints. Reduced U.S. corn and soybean plantings will likely cut available crop supplies in the United States, potentially driving up raw material costs and squeezing margins.

“They thrive on volumes and margins and both of those are going to be depressed in the coming year with the bushels being smaller and the margins likely not being there,” said Kevin McNew, chief economist with Farmers Business Network. “Export business is just going to fall off the cliff, especially for corn.”

The U.S. corn crop was more affected by floods than soybeans because soy can be planted later in the season.

FILE PHOTO: A flooded parcel of land along the Platte River is pictured in this aerial photograph at La Platte, south of Omaha, Nebraska, U.S. March 19, 2019. REUTERS/Drone Base/File Photo

FILE PHOTO: A flooded parcel of land along the Platte River is pictured in this aerial photograph at La Platte, south of Omaha, Nebraska, U.S. March 19, 2019. REUTERS/Drone Base/File Photo

WEAKER RESULTS

The first of the companies scheduled to report is privately held Cargill, which announces fiscal fourth-quarter earnings on Thursday.

The results will cover the March-to-May period, when flooding disrupted grain movement, including export shipments, and the year’s second “bomb cyclone” blizzard temporarily shuttered at least six Cargill grain handling facilities and a beef processing plant.

Cargill and ADM both own barge companies that haul grain and other products on the Mississippi River and its tributaries. Grain barge movement so far this year is down about 37% from a year ago, according to U.S. Army Corps of Engineers data, due largely to prolonged river closures triggered by floods.

Cargill is expected to report weaker results compared with the very strong earnings of the year-ago quarter, due partly to expected lower profit in its origination and processing unit, said Bill Densmore, senior director of corporate ratings at Fitch Ratings.

Bunge and ADM will follow, with second-quarter results covering April, May and June scheduled for release on July 31 and Aug. 1, respectively. Privately held Louis Dreyfus is expected to issue interim first-half results in the autumn.

Shares of publicly traded ADM and Bunge are hovering just above three-year lows notched this spring as mounting concerns about U.S. plantings and trade fueled investor nervousness.

FILE PHOTO: Flooded farm fields are seen from an aerial photo taken while Nebraska Army National Guard Soldiers used a CH-47 Chinook helicopter to deliver multiple bales of hay to cattle isolated by historic flooding in Richland, Nebraska, U.S., March 20, 2019. Picture taken on March 20, 2019. Courtesy Lisa Crawford/Nebraska National Guard/Handout via REUTERS

FILE PHOTO: Flooded farm fields are seen from an aerial photo taken while Nebraska Army National Guard Soldiers used a CH-47 Chinook helicopter to deliver multiple bales of hay to cattle isolated by historic flooding in Richland, Nebraska, U.S., March 20, 2019. Picture taken on March 20, 2019. Courtesy Lisa Crawford/Nebraska National Guard/Handout via REUTERS

UNEVEN IMPACTS

With its concentration of assets in the United States and its large U.S. ethanol business, ADM was likely hit harder by adverse U.S. weather than Bunge, analysts said.

ADM cited poor U.S. weather for a nearly $60 million drop in operating profit in its first quarter and warned in April that lingering weather impacts would cut second-quarter earnings by $20 million to $30 million. Some analysts expect ADM to post as large a hit to second-quarter earnings as in the first quarter as adverse weather stretched through the spring season.

“ADM’s first-quarter estimate of $50-60 million seems like a good starting point” for the second-quarter impact, said Seth Goldstein, analyst with Morningstar.

ADM’s soy processing, ethanol and sweeteners and starches units may post lower margins, and smaller corn and soybean crops will hurt its grain origination business, said Heather Jones, founder and senior analyst with Heather Jones Research LLC.

The price of corn, the most common feedstock for U.S. ethanol makers, has surged as U.S. farmers struggled to plant the 2019 crop due to a historically soggy spring. Cash corn premiums in parts of the eastern Midwest, where planting delays were most acute, are at a six-year high. Soybean prices hit a one-year top last week.

“Bunge is less exposed, but higher bean costs would squeeze soy crush margins in the U.S.,” Jones said. Bunge is the world’s largest soybean processor.

(Reporting by Karl Plume in Chicago; Editing by Caroline Stauffer and Matthew Lewis)