The News & What it Means – Trying to Fish COOL Out of the Ashes & The Latest Soy Crop Condition Ratings

By John DePutter & Dave Milne – June 20, 2017

 

The news:

“Ranchers on Monday sued the U.S. Department of Agriculture, seeking to force meat to again be labeled if it’s produced in other countries and imported to the United States.”

– The Canadian press, June 19, 2017

 

What it means:

If it feels like we’ve been down this road before, it’s because we have.

 

Hopefully, and most likely, this is a last gasp attempt to bring back country of origin labelling (COOL), a controversial a US law that was regulated to the trash bin after the World Trade Organization ruled a number of times that it unfairly discriminated against foreign livestock.

 

Although some US producer groups – including Montana-based R-CALF, one of the groups behind the latest lawsuit – contend that American consumers should be given the opportunity to distinguish between domestic and imported beef by the label on the package – the fact is COOL simply made things worse for everyone after it was implemented in 2008.

 

Canadian producers were hurt because the added cost of segregating animals from this side of the border meant American packers paid less or avoided buying Canadian cattle altogether. In the US, it meant costly and cumbersome regulations that ultimately left the American economy vulnerable to WTO-sanctioned retaliatory trade action from both Canada and Mexico.

 

Canada has fought the COOL battle many times at the WTO and won every single time. Even in the US, a study by Kansas State University found that in the six years COOL was place, country of origin labelling had no real impact on demand for American beef, nor the price US producers got for their animals.

 

In the end, COOL was a failed experiment. As the Kansas State University concluded, consumers shop for beef based on price and appearance – not by what label it sports.

 

Ag-Alert covers cattle market developments daily. Click below for a free trial.

Try a FREE 3 week trial

Ag-Alert

Ag-Alert

Like a full-time professional marketing consultant for your
farm.

 

The news:

“The US soybean crop was rated 67% good to excellent as of Sunday, up a modest 1 point from a week earlier.  Last year at this time, 73% of the crop was rated good to excellent.”

– USDA, June 20 2017

 

What it means:

It means very little, this early in the season.

 

Crop ratings for soybeans in June don’t say a lot about the final average yield.

 

The condition rating found lots of interest among commodity market reporters because it came in below pre-report trade guesses for a 2-point improvement from a week ago.

 

Granted, if the rating was really high, such as 80% or so, you might reasonably slightly raise your yield expectations and lower your price ideas. Or, if the crop rating right now were to be ranked absolutely terribly, you might legitimately suspect the crop would have trouble reaching a record-smashing average yield and boost your selling price ideas.

 

But at 67% good to excellent, the US crop is in what might be called middle-of-the-road condition. It could go either way from here. As a comparison, the soybean crop condition for the past five years at this time works out to 66.2% – almost exactly where the crop stands today.

 

Of note, only 7% of the nationwide soybean crop was rated as poor to very poor, so almost nowhere is this crop being totally written off. Besides, about 11% of intended soybean acreage of the US wasn’t even planted when this USDA crop condition rating was put together.

 

Soybean yields are determined later in the season. You can have a bushy, green plant seemingly rich with yield potential in early July, only to end up with low pod counts and poor pod set due to hot, dry conditions during the flowering and podding process.

 

On the other hand, you can have a short, small plant in early July that becomes laden with multiple pods with good-sized beans, with well-timed rains in mid- or late July and August.

 

Right now, we just can’t read too much into the soybean crop ratings. This weekly soybean crop condition report got lots of press and the reports the next couple weeks will too. In reality though, the size of this year’s US soybean crop will be largely determined by the weather and crop condition from mid-July onwards.

 

Need to keep on all the latest soybean news? E-Morning Ontario and/or Good Morning Prairies have you covered!

 

Try a FREE 3 week trial

E-Morning Ontario

E-Morning Ontario

Your five minute information manager.

 

Try a FREE 3 week trial

Good Morning Prairies

Good Morning Prairies

Your five minute information manager.