Ag Headlines, Thursday March 17, 2016

Farm Headlines today: CHS says more struggles ahead, Feds signaled interest rate hikes and Chipotle considering a rollback of new food safety changes.

Largest Farm Co-op Says More Struggles Ahead

The largest agriculture cooperative predicts more pain ahead for the industry. Carl Casale, CEO of CHS, Inc. says net farm income is falling faster than cash receipts indicating that fixed costs are too high. During the National Grain and Feed Association convention in San Diego, he told attendees the U.S. farm economy is not at the bottom yet, according to Bloomberg. CHS is planning to cut expenses this year and will freeze cost over the next two years to avoid trimming its workforce. USDA estimates farmers will see a net farm income decline for the third straight year to $53.8 billion in 2016, down more than 50 percent from its recent high of $123.3 billion in 2013

Interest Rate Hikes set to Resume Later this Year

The Federal Reserve Wednesday signaled interest rate increases are likely later this year. As expected, the Fed chose to leave interest rates at current levels for now, following a two-day meeting this week. The Federal Open Market Committee of the central bank said economic activity has been expanding at a moderate pace. Federal Reserve officials said resuming its rate hikes too soon however could slow growth or rattle investors again. They now predict just two rate hikes this year instead of four. The Fed's decision was approved nine to one, with Esther George, president of the Fed's Kansas City regional branch against the move. A Statement by the Fed said George favored a quarter-point rate hike now.

Chipotle Considering Rolling Back New Food Safety Changes

Just a month after Chipotle had pushed for new food safety changes, The Wall Street Journal reports the restaurant chain is considering stepping back from those protocols. The changes came amid a series of disease outbreaks. Chipotle food scares included two E.coli outbreaks as well as separate outbreaks of norovirus. Chipotle said last month it was conducting high-resolution DNA-based testing of many ingredients, but now some company officials say they are considering dialing back or eliminating pathogen testing on some ingredients. Chipotle appears to be banking on comments from its CEO earlier this year. Steve Ells in mid-January told attendees at an investment conference the public would quickly forget about the outbreaks and that profits would be bigger than ever. A Chipotle spokesperson told Fortune Magazine the restaurant remains committed to establishing itself as a leader in food safety, adding that “any changes we may make to our initial plans will be to strengthen what we are doing.” The company this week named food safety expert Jim Marsden to the newly created position of executive director of food safety. Meatingplace reports the company also said it expects a loss of $1 a share or more in the first quarter, which would represent its first-ever quarterly loss as a public company

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