14 CapitalPress.com
December 15, 2017
Large stocks of wheat, State Department: Columbia River
corn keep prices down Treaty negotiations begin in early 2018
By CAROL RYAN DUMAS
By MATTHEW WEAVER
Capital Press
BURLEY, Idaho —
Large world stocks of corn
and wheat are keeping fu-
tures markets bearish, as
grain producers face a third
year of managed money
funds taking heavily short
positions.
That means there’s no
offsetting side in long posi-
tions to drive prices higher,
Kelly Olson, administrator
of the Idaho Barley Com-
mission, said during the
University of Idaho Ag Out-
look seminar.
There are big supplies of
wheat and corn around the
world. High prices in 2012
and 2013 fueled world pro-
duction. Favorable condi-
tions produced big crops and
rebuilt stocks, she said.
“Global grain stocks are
coming down a little but are
still quite burdensome,” she
said.
The global stocks-to-use
ratio in the latest World Ag-
ricultural Supply and De-
mand Estimates is 19 per-
cent on corn and 36 percent
on wheat.
The ratio indicates the
level of carryover stock for a
commodity as a percentage
of the total demand or use.
Most of the burdensome
grain stocks are on the
wheat side of the equation,
with world ending stocks for
wheat 5 percent higher than
a year ago. That’s despite a
slight decline in world pro-
duction and no change in
usage.
In the U.S., wheat pro-
duction was down 25 per-
cent and ending stocks are
down 21 percent. But that
hasn’t raised prices because
world stocks are still large,
she said.
The U.S. exports 47 per-
cent of domestic wheat pro-
duction, and there’s a lot of
cheaper wheat produced in
the Black Sea Region. In ad-
dition, a strong U.S. dollar
Capital Press
Sean Ellis/Capital Press
Kelly Olson, administrator of
the Idaho Barley Commission,
presents an outlook for grain
markets during the University
of Idaho Ag Outlook seminar
in Caldwell on Dec. 7.
continues to hammer grain
exports and is particularly
bad for wheat, which is so
dependent on exports, she
said.
Global corn and wheat
stocks wouldn’t look exces-
sive if not for China. The
country holds 39 percent of
global ending corn stocks
and 48 percent of global
ending wheat stocks.
China uses the wheat
for domestic food and corn
for domestic livestock, and
those stocks aren’t going
out on the world market. In
addition, a lot of the corn
stocks are old and not good
quality for feed and the
country is trying to bring
ethanol plants on line, she
said.
Nonetheless, stocks are
big and the price outlook for
2018 is “not great,” she said.
USDA is forecasting the
2018 corn price at $3.20 a
bushel, down 5 percent year
over year. The agency is ex-
pecting the all-wheat price to
increase 18 percent to $4.60
a bushel. But the all-wheat
price dropped 20 percent in
2016, so prices aren’t going
to be back where they were
two years ago, she said.
“This market is going to
continue to trade sideways.
There’s no big upside, but
there’s some,” she said.
Idaho ranchers encouraged
to claim stock watering
rights on federal land
By SEAN ELLIS
Farmers will want to pay
attention to flood control pro-
visions in the Columbia Riv-
er Treaty when the U.S. and
Canada begin to negotiate an
update early next year, several
experts say.
The U.S. and Canada will
begin negotiations to mod-
ernize the Columbia River
Treaty in early 2018, the U.S.
Department of State has an-
nounced.
Certain provisions of the
treaty, established in 1964 for
cooperative development and
operation of water resources
in the Columbia River Basin,
are set to expire in 2024.
Changes in the treaty will
affect how reservoirs such as
Lake Roosevelt are operated,
said Derek Sandison, director
of Washington’s Department
of Agriculture and former
director of the Office of the
Columbia River for the state’s
Department of Ecology.
In 2024, assured storage
converts to “called-upon” and
“effective use” storage. The
U.S. would first have to make
effective use of its reservoirs
for flood control before call-
ing on Canada to store snow-
Elaine Thompson/Associated Press
A U.S. flag flies near the Grand Coulee Dam on the Columbia River
in Washington state, with Lake Roosevelt shown at left. The U.S.
State Department has announced that negotiations to modernize
the Columbia River Treaty between the United States and Canada
will begin in early 2018.
She says it’s worth mod-
eling whether an additional
small drawdown of U.S. res-
ervoirs for flood control and
aquifer recharge may help
overall flood management
diversity while benefitting
farmers.
If local measures could ad-
dress local flooding, and the
U.S. and Canada could agree
to a higher flood flow target, it
would decrease flood control
constraints on dams and pro-
vide flexibility for other uses,
Cosens said.
Sandison said the U.S. and
melt, drawing down the dams
to make as much flood vol-
ume as possible.
U.S. officials would have
to make decisions based on
early water forecasts, and
hope that irrigation water is
available later in the season.
The U.S. wants a flood risk
management process similar
to the current one, Sandison
said.
The negotiations are an
opportunity for farmers, said
Barbara Cosens, a University
of Idaho law professor who
teaches water law.
Canada have similar objec-
tives for the treaty.
“There’s certain areas
where both sides of the bor-
der have agreed these are
major issues that need to be
addressed, and my sense is
there’s a strong willingness
to get to a good outcome,” he
said.
The differences between
recommendations from the
two countries are not insur-
mountable, Cosens agreed.
Both countries have the op-
portunity for adjustments that
better align joint management
of the river with current con-
ditions, including changes in
energy markets, snowpack,
flow timing and temperature
and fisheries, she said.
The State Department an-
nounced Jill Smail as the U.S.
lead negotiator in October.
Cosens said Canada has
not yet identified its lead ne-
gotiator, a decision that likely
took “considerable” negotia-
tion between Canada’s federal
government and the province
of British Columbia.
“Appointment of a negoti-
ator agreed upon by those two
levels of government will be a
good sign that they are on the
same page and move forward
productively,” she said.
Carol Ryan Dumas/Capital Press File
Alfalfa is swathed in this field near Jerome Idaho, last summer. Low milk prices continue to depress Idaho hay prices.
Low milk prices depress Idaho hay market
Capital Press
By CAROL RYAN DUMAS
FORT HALL, Idaho
— Ranchers are being en-
couraged to file for stock
watering rights on federal
grazing allotments, after
a bill passed by the Leg-
islature earlier this year
paved the way for them to
do that.
The legislation codified
into state law a landmark
Idaho Supreme Court de-
cision on who owns stock
watering rights on federally
administered land.
It paves the way for po-
tentially thousands of stock
watering right claims to be
filed by ranchers in areas
that have undergone or are
going through water adjudi-
cations.
Since the legislation be-
came effective July 1, only
four claims have been filed.
Water rights attorney
Norm Semanko told sever-
al dozen ranchers attending
a presentation during Idaho
Farm Bureau Federation’s
annual meeting last week
that they should take advan-
tage of the opportunity.
“If you (know you) have
a water right, what are you
waiting for?” he said. “The
door’s wide open. Whoever
puts out the effort is the one
who’s going to be reward-
ed.”
During the Snake River
Basin Adjudication, which
decreed 160,000 water
rights in Southern Idaho,
the federal government filed
claims to tens of thousands
of de minimis or “minor”
water right claims and the
court granted those claims.
Many ranchers, however,
chose not to file overlap-
ping claims to those rights
because the court ruled
they were deferrable, which
means there is no time limit
to file for them.
Until the SRBA court
decides otherwise, “There’s
Capital Press
Sean Ellis/Capital Press
Water rights attorney Norm
Semanko speaks to Idaho
ranchers Dec. 5 and encour-
ages them to file claims on
stock watering rights they
have on federal grazing
allotments. A bill passed by
the legislature this year paves
the way for ranchers in areas
that have undergone or are
undergoing water right adjudi-
cations to file those claims.
no deadline to filing these
claims,” said Michael Holl-
iday, a senior water resource
agent for the Idaho Depart-
ment of Water Resources.
In a 2007 decision, the
state’s top court agreed with
Owyhee County ranchers
Paul Nettleton and Tim
Lowry when it ruled the
U.S. Bureau of Land Man-
agement can’t own stock
watering rights on federal
land because it doesn’t own
cattle and can’t put the water
to beneficial use.
The legislation passed
this year now paves the way
for those ranchers to file for
those deferrable claims, Se-
manko said.
“There are hoops you
need to jump through to
prove your right but you
know it’s there,” he said.
Because of the court deci-
sion, “you have a great prec-
edent and a great opportuni-
ty to prevail.”
Semanko said a lot of
ranchers didn’t file for those
so-called minor claims be-
cause they were trying to
save money.
BURLEY, Idaho — Am-
ple hay supplies, plentiful al-
ternative feeds and sour milk
prices are teaming up to create
a bleak outlook for Idaho hay
prices.
Premium alfalfa hay in
Idaho sold for $125 a ton
last week, compared to $187
in the Columbia Basin and
$210 in northern California,
according to USDA Market
News Service.
Idaho has carried over a
lot of hay in recent years,
and there’s a lot stacked up in
southern Idaho, Steve Hines,
University of Idaho Extension
educator for Jerome County,
told growers at the universi-
ty’s annual Idaho Ag Outlook.
Last winter’s extreme
weather had growers thinking
a lot of the excess hay would
be fed to livestock “and the
sun is going to shine again,”
he said.
But that didn’t happen. A
lot got fed, but there’s still a
lot of hay, he said.
Stocks of all hay in Ida-
ho on May 1 were 510,000
tons, down significantly from
a year earlier, when they had
U.S. alfalfa hay balance sheet
May 1
stocks
Production
6.1
57.2
63.3
2014-15
8.1
61.5
2015-16
10.8
59
2016-17*
11
2017-18*
10.5
Year
2013-14
Ending
stocks
Avg. price
($dollars/ton)
55.2
8.1
199
69.6
58.8
10.8
202
69.7
58.7
11
156.57
58.3
69.3
58.7
10.5
136.50
56
66.6
58.3
8.3
150
Source: Livestock Marketing Information Center
been much higher. May 1
stocks were 950,000 tons in
2016 and 900,000 tons in
2015, compared to 320,000
tons in 2014.
“I don’t see pricing going
up ’til some of these stocks go
out,” Hines said.
Despite declining prices
the last couple of years, there
was only a slight decline in
Idaho’s alfalfa acres in 2017,
and production of alfalfa hay
was up 9 percent year over
year.
Production-wise “2017
was a pretty good year for
alfalfa growers. There were a
few less seeded acres, but in
a lot of situations more was
produced on those acres,” he
said.
Idaho is a livestock state,
(Millions of tons)
Supply
Disappearance
*Projections
and that’s good for hay grow-
ers, but they aren’t the ones
who set the price, he said.
“Dairies get to set the
price on hay,” he said.
The hay market isn’t go-
ing to come back until the
dairy market comes back, he
said.
“We’ve still got a lot of
hay in the stack, and pricing
is going to stay low as long as
milk is low,” he said.
Dairymen can and do sub-
stitute straw, corn, barley,
corn silage, hay from other
states and pasture for Idaho
alfalfa. Corn silage acres in
Idaho have increased greatly
over the last 25 years, about
440 percent, he said.
Substitute feed stocks are
showing high carryover and
Capital Press graphic
lower prices for 2018. The
total supply of U.S. corn,
for example, is near a re-
cord high at close to 17 bil-
lion bushels, with an average
price of about $3.25 a bushel
in September.
The average low U.S. price
for alfalfa hay for the 2011-
2015 crops was $180 a ton.
The average low for the 2016
crop was $129. So far, the av-
erage price for the 2017 crop
is in the $140-$150 range.
That’s a long way from
$180, and the market is not
going to get back there until
the dairy market improves, he
said.
“We’ve still got a lot of
hay in the stack, and pricing
is going to stay low as long as
milk is low,” he said.
OSU professor named dean at S. Dakota State University
Killefer will begin
in late March 2018
By GEORGE PLAVEN
Capital Press
An Oregon State Universi-
ty professor and department
head has been named dean
of the College of Agriculture
and Biological Sciences at
South Dakota State Univer-
sity.
John Killefer, who creat-
ed the Department of Ani-
mal and Rangeland Sciences
at OSU by
merging the
departments
of
animal
sciences and
rangeland,
ecology and
John Killefer management,
will
begin
working at South Dakota
State in late March 2018.
“I am truly appreciative
of the many opportunities
that have been provided me
at Oregon State Universi-
ty,” Killefer said in a state-
ment. “I am honored to have
worked with so many out-
standing professionals and
colleagues that have allowed
us to make tremendous prog-
ress within our programs.”
As a researcher into pro-
duction animals and beef
products, Killefer’s pro-
grams have secured more
than $6.3 million from fed-
eral and industry sources.
He was inducted into the
Oregon Beef Council Hall
of Fame in 2014 and served
as a fellow from 2013-15 for
the Food Systems Leader-
ship Institute.
“It has been exciting to
see the individual and pro-
grammatic growth through-
out our department and I
anticipate a bright future
moving forward,” Killefer
said. “I thank the many col-
leagues that I am now able to
call friends.”
Killefer came to OSU in
2011 after working at the
University of Illinois at Ur-
bana-Champagne and West
Virginia University. He has
a doctorate in animal science
with an emphasis in growth
and development from OSU.