Monday September 13 Ag News

 NEBRASKA CROP PROGRESS AND CONDITION

For the week ending September 12, 2021, there were 6.4 days suitable for fieldwork, according to the USDA's National Agricultural Statistics Service. Topsoil moisture supplies rated 8% very short, 31% short, 60% adequate, and 1% surplus. Subsoil moisture supplies rated 13% very short, 44% short, 42% adequate, and 1% surplus.

Field Crops Report:
Corn condition rated 4% very poor, 9% poor, 21% fair, 43% good, and 23% excellent. Corn dented was 90%, near 93% last year and 87% for the five-year average. Mature was 35%, behind 45% last year, but ahead of 29% average. Harvested was 1%, near 4% last year and 2% average.

Soybean condition rated 2% very poor, 7% poor, 22% fair, 50% good, and 19% excellent. Soybeans dropping leaves was 47%, behind 58% last year, but ahead of 37% average. Harvested was 1%, near 3% last year, and equal to average.

Winter wheat planted was 17%, ahead of 8% last year, and near 13% average.

Sorghum condition rated 8% very poor, 15% poor, 29% fair, 36% good, and 12% excellent. Sorghum coloring was 94%, ahead of 83% last year and 85% average. Mature was 27%, near 24% last year, and ahead of 18% average. Harvested was 2%, near 1% last year.

Dry edible bean condition rated 2% very poor, 4% poor, 18% fair, 47% good, and 29% excellent. Dry edible beans dropping leaves was 78%, ahead of 71% last year. Harvested was 34%, ahead of 26% last year.

Pasture and Range Report:
Pasture and range conditions rated 12% very poor, 18% poor, 51% fair, 17% good, and 2% excellent.



IOWA CROP PROGRESS & CONDITION REPORT

 It was a very dry week across most of the State which allowed Iowa’s farmers 6.2 days suitable for fieldwork during the week ending September 12, 2021, according to the USDA, National Agricultural Statistics Service. Field activities included harvesting hay and corn silage. Some reports of old crop corn being moved to town prior to harvest were received.

Topsoil moisture levels rated 9% very short, 26% short, 63% adequate and 2% surplus. Subsoil moisture levels rated 14% very short, 37% short, 48% adequate and 1% surplus.

Crop maturity advanced across the State. Corn in or beyond the dent stage reached 87%, three days ahead of the 5-year average. Almost one-third of the corn crop has reached maturity, two days ahead of normal. Iowa’s corn condition rated 59% good to excellent. There were scattered reports of corn for grain being harvested.

Soybeans coloring or beyond reached 67%, three days ahead of the 5-year average. Soybeans dropping leaves reached 30%, also three days ahead of normal. Soybean condition was rated 62% good to excellent. There were also a few isolated reports of soybeans being harvested during the week.

The third cutting of alfalfa hay reached 92% complete, two days ahead of the 5-year average. In some areas of the State farmers were starting on the fourth cutting of hay.

Pasture condition was rated 35% good to excellent. In general, livestock has done well in spite of the heat. There were reports of low water levels in creeks and ponds for livestock use.



USDA Crop Progress Report - 4% of US Corn Crop Harvested

The U.S. corn crop has consistently developed at a near- to slightly ahead-of-average pace throughout this growing season, and, so far, harvest also appears to be kicking off at a near-average pace, USDA NASS' said in its weekly national Crop Progress report Monday. In its first national corn harvest report of the season, NASS estimated that 4% of the crop had been harvested as of Sunday, Sept. 12, 1 percentage point behind both last year's 5% and the five-year average of 5%. Meanwhile, the portion of the crop remaining in fields continued to reach maturity slightly ahead of normal. NASS estimated that 87% of corn was dented as of Sunday, 6 percentage points ahead of the five-year average of 81%, and 37% of the crop was mature, also 6 percentage points ahead of the average pace of 31%. The condition of corn still in fields slid again last week, dropping 1 percentage point from 59% good to excellent as of Sunday, Sept. 5, to 58% good to excellent on Sunday, Sept. 12.

As with corn, soybeans also continued to mature at a faster-than-average pace last week. NASS pegged soybeans dropping leaves at 38%, 3 percentage points ahead of last year and 9 percentage points ahead of the five-year average of 29%. Fifty-seven percent of the soybean crop was rated good to excellent, unchanged from the previous week.  

Winter wheat planting also continued ahead of normal last week, with NASS estimating 12% of the crop had been planted as of Sunday, 7 percentage points ahead of last year and 4 percentage points ahead of the five-year average of 8%.

Sorghum coloring was pegged at 83%, 3 percentage points ahead of the average. Sorghum mature was 39%, 1 percentage point ahead of average. Sorghum harvested was 21%, 4 percentage points behind average.

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Saunders Co Lvst Assoc Outlook Meeting is Sept 20

Saunders County Livestock Ass'n  annual outlook meeting is set for Monday Sept. 20th, at the Saunders county fair grounds in Wahoo. The social starts at 6:00 p.m., with the meal at 7:00. Speaker for the evening will be Jeff Peterson with Heartland Farm Partners based in Lincoln.  Hope to see members and prospective new members there on Monday night!



Husker Harvest Days Brings Big Crowds to Hall County

After a year off, Husker Harvest Days is ready to go for another show in Hall County this week, and the Nebraska State Patrol has some reminders for those planning to attend.

During the event, which runs from September 14-16, troopers will provide traffic control in the areas around the event and maintain an increased presence in an effort to reduce the potential for crashes. As in previous years, there will be times when Husker Highway will become one-way in and out of the event.

“It’s great to have Husker Harvest Days back this year,” said Captain Jeff Roby, Commander of Troop C. “This is a major event for our partners in the agriculture industry and we’re happy to support it by working with a number of other agencies to keep the crowds safe as they travel to and from the show.”

Motorists are asked to maintain adequate following distance to allow themselves plenty of time to react to changing traffic conditions and to remain alert for law enforcement personnel.

Traffic enforcement assistance will be provided by the Nebraska State Patrol, Nebraska Department of Transportation, Hall County Roads Department, Hall County Sheriff’s Office, Hall County Sheriff’s Posse, and the Husker Harvest Days Staff.



WINTER ANNUAL FORAGES
– Jerry Volesky, NE Extension

Are you planting or at least thinking about planting wheat, rye, or triticale for forage next spring?  Which of these small grains should you plant this fall?  Let’s look at some of their characteristics to help you select.

Cereal rye is your best choice for the earliest grazing possible.  Because it’s early, it also may be the best match for double cropping.  Some varieties provide quite a bit of fall growth, too, if planted early.  Rye also may be the most reliable when planted under stressful conditions.  But it has some drawbacks.  It turns stemmy and matures much earlier than wheat or triticale, losing feed value and palatability earlier in the spring.  Plus, wheat grain producers don’t want it contaminating fields next year.

Triticale holds on to its feed value best into late spring.  This makes it well suited for hay and silage, or for stretching grazing well into June if you don’t mind starting two or three weeks later compared to rye.  But triticale tends to be a bit more susceptible to winter injury.

Winter wheat has been the small grain of choice for winter and spring grazing in the southern plains where higher winter temperatures allow growth to continue, although slowly.  Up here where wheat goes dormant, though, its carrying capacity is not as high as triticale or rye.  But it is top quality before stems develop.  And it’s the clear choice if you want the double use as early pasture and then for grain.

So there it is.  Rye for early pasture, triticale for hay, silage, or later grazing, and wheat for grazing plus grain.  You may have other factors affecting your choice, but in general, these guidelines work well.   



NASDA to honor public servants to agriculture at 2021 annual meeting

At the annual meeting of the National Association of State Departments of Agriculture in Louisville, Kentucky, next week, top employees of three state departments of agriculture will be honored for their service, communication and administration on behalf of their state.
 
“Congratulations to our 2021 Honor Awards recipients! Our state departments of agriculture are homes to incredibly talented, servant-hearted individuals who often go unrecognized in the world of public service,” said NASDA President Ryan Quarles. “The Honor Awards Program provides NASDA members the opportunity to recognize our staff for their work on a national stage, and this year, their service came at an unprecedented time of need for so many in our country.”
 
In addition, two special awards will be given to highlight NASDA’s external ambassadors and public-private partnerships that advance NASDA’s work in the states.
 
Ambassador’s Circle Award
John Bode, President & CEO of the Corn Refiners Association
USDA Animal and Plant Health Inspection Service Administrator Kevin Shea

Forging new partnerships for sound agriculture policy relies on generous stakeholders. The Ambassador’s Circle Award recognizes external stakeholders to NASDA who have provided exemplary dedication to advancing NASDA’s mission. This year, NASDA elected to recognize two distinguished individuals to received Ambassador’s Circle Awards, John Bode, President & CEO of the Corn Refiners Association, and USDA Animal and Plant Health Inspection Service Administrator Kevin Shea. Bode and Shae were both nominated for the award by the NASDA Executive Committee.
 
Bode’s commitment to food production, processing, safety and continued advocacy for regulatory policy is evidenced in his decades of service to agriculture. He has been involved in every significant change in federal food law since the 1981 Farm Bill, and every step of the way he has been an advocate and trusted advisor for state departments of agriculture.
 
Bode served in three presidential appointments at USDA, including Assistant Secretary of Agriculture for Food and Consumer Services. Before joining USDA in 1981, he was on the staff of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry.
 
Kevin Shea was appointed Administrator of the USDA’s Animal and Plant Health Inspection Service on June 18, 2013, after serving as Acting Administrator since June 2012.
 
In his role as the APHIS Administrator, Shea carries out the agency’s multiple missions of protecting the health and value of American agriculture; mitigating the impact of human-wildlife conflict to protect agriculture, the environment and human health and safety. He ensures the safe and timely availability of new genetically engineered technologies and administers the Animal Welfare and Horse Protection Acts.

James A. Graham Award
Frank Friar, Financial Consulting & Farm Transition Specialist for the Wisconsin Department of Agriculture, Trade and Consumer Protection
The purpose of the James A. Graham Award is to recognize an individual for outstanding work in providing service to agricultural producers.
 
The 2021 NASDA James A. Graham Award is awarded to Frank Friar, Financial Consulting & Farm Transition Specialist for the Wisconsin Department of Agriculture, Trade and Consumer Protection.

Since joining the agency in 2007, Friar’s experience and knowledge have proven invaluable in his second career as a financial consulting and farm succession planning specialist for the Wisconsin Farm Center. At a time in his life when most people would have retired decades earlier, Friar’s passion to help those in agriculture continues to serve farm families each day.
 
Growing up on a small family farm in Grant County, Wisconsin, Friar has a deep appreciation for the farmers he works with. He ensures not only the best interest of their farms, but he has great concern for their personal well-being. For some producers, Friar helps them understand their options with a fresh set of eyes. For others, the consequences are dire, and the prospect of losing their farm brings them to extreme distress. Whatever their needs, they always find a compassionate, insightful, patient and knowledgeable consultant in Friar.
 
 Communications Award
Christin Kamm, Communications Director for the Nebraska Department of Agriculture
The purpose of the NASDA Communications Award is to recognize an individual for outstanding work in media and public communications within a state agency resulting in improved understanding of agriculture and agricultural programs.
 
The 2021 NASDA Honor Award for Communications is awarded to Christin Kamm, Communications Director for the Nebraska Department of Agriculture. Kamm has an inherent passion for Nebraska agriculture and has worked for the department for over 15 years. Her passion, knowledge and experience make her an excellent communicator on behalf of the Nebraska. During an extreme flooding event in 2019, and again during the COVID-19 pandemic, Kamm coordinated exemplary emergency communications for the department that informed Nebraska's farmers, ranchers and communities on state services available through NDA.
 
Kamm also responds to NDA’s hundreds of public information requests each year. Clear communication is essential for retaining public trust, and Kamm’s skills have been vital to the success of NDA. Also bringing value to the Nebraska’s agriculture industry, Kamm organizes the annual Governor’s Ag Conference that gives Nebraska farmers the opportunity to consult with the state’s top leadership.
 
Douglass-Irvin Administration Award
Kenny Naylor, Consumer Protection Services Division Director for the Oklahoma Department of Agriculture
 
The purpose of the Douglass-Irvin Administration Award is to recognize an individual for outstanding contributions within a state agency resulting in improved efficiency and impact.
 
The recipient of the 2021 NASDA Douglass – Irvin Administration Award is Kenny Naylor, Consumer Protection Services Division Director for the Oklahoma Department of Agriculture.
 
Naylor has served the agency for 21 years and oversees almost 20 regulatory programs and issuance of thousands of licenses with the mission of providing Oklahomans with the highest level of service. This includes ensuring and enforcing quality standards for agricultural products, regulating pesticide use and providing information and technical assistance to consumers. Naylor’s key contribution to the agency has been his ability to streamline and modernize multiple processes. With his initiative and direction, the agency has transitioned most licensing and reporting programs from paper to digital. Oklahoma registers over 18,000 pesticide products each year, and the majority of these registrations have been made available online in the last few years. Eighty-eight percent of the agency’s renewal notices are now sent electronically, and over 50 percent of all licenses and permits are renewed online across all Consumer Protection Services programs. The modernized processes drastically reduces costs of paperwork, data entry and mailing in addition to improving customer service.

Public-Private Partnership Award
The purpose of the NASDA Public-Private Partnership Award is to recognize NASDA Partners Program organizations that have partnered with a state to implement a program, project or service that positively impacts the state.
 
The 2021 recipient of the NASDA Public-Private Partnership Award is Ulupono, an advocacy organization serving Hawaii. Ulupono is a member of one of our longstanding partners, the Sustainable Agriculture and Food Systems Funders. In 2020, Ulupono partnered with HDOA in support of two programs, both created in response to the devastating effects of COVID-19 on Hawaii’s agricultural producers and the state’s food supply chain.
 
When Ulupono’s Jesse Cooke recognized that COVID-19 would halt tourism and the food waste the industry sells to farmers for hog feed, Cooke acted to ensure farmers’ hogs survived and partnered with the Hawaii Department of Agriculture to purchase grain for feed. This was a first step by Ulupono in raising thousands of dollars for the state’s Emergency Farmer Relief Program. Together with Ulupono’s contribution, the department provided a total of $470,000 in cash grants to over 200 farmers and organizations, mitigating the immediate impacts of the shutdown during spring of 2020.
 
In addition, a second partnership between the Hawaii Department of Agriculture and Ulupono in response to the pandemic organized a coalition of philanthropists to provide $500,000 in funding to The Food Basket, the Hawaii island’s food bank. The department matched the $500,000 with CARES Act funding, totaling $1 million for SNAP participants to purchase locally grown fruits and vegetables, ground beef, eggs and seafood. By December 2020, HDOA’s program had resulted in over 120,000 redemptions by SNAP participants statewide thanks to the public-private partnership. The award will be accepted by Jesse Cooke.



Potential Impacts of Brazilian BSE on the U.S. Meat Complex
Elliott Dennis, Livestock Extension Economist, University of Nebraska - Lincoln

Last week the Brazilian government announced the discovery of several atypical cases of bovine spongiform encephalopathy (BSE), commonly referred to as “mad-cow” disease. The potential trade impacts due to this announcement remains to be seen. The US and Canada have experienced the impact that such an announcement can have on beef exports. Pre-BSE, the U.S. exported 0.9 million tons to 112 countries. Post-BSE beef exports were 0.3 million tons. It was not until the mid-2010’s that beef export volume equaled pre-BSE levels.
 
Atypical vs. Classical
Brazil is not the first country to identify an atypical case of BSE. As of 2017, the U.S. had detected six BSE cases – one classical case from a cow imported from Canada in 2003 and five other “atypical” cases. So, defining the case as “atypical BSE” has important market distinctions relative to a “classical BSE” case. BSE is classified as either classical or atypical. Atypical BSE is thought to arise spontaneously in all cattle populations, particularly cattle greater than six years old. Most importantly, there are no known human health diseases associated with “atypical BSE”. Classical BSE is primarily the result of contaminated feed, such as meat-and-bone meal containing protein derived from rendered infected cattle and is linked to the variant Creutzfeldt-Jakob disease (vCJD) in people. As such, human health precautions prescribe the limiting of exported/imported until classical BSE cases can be identified and resolved.
 
Brazilian Traceability Program
If the Brazilian beef export market does shutdown, their animal ID and traceability program could impact the length of the shutdown (Murphy et al. 2008). Systems that can accurately identify and isolate problematic cases and verify that cases have not spread throughout the system can reducing the long run impacts and restore confidence in the export system. Brazil has an animal traceability system, first introduced in 2002, that it mandatory for all export animals and provides national individual animal ID, is able to trace animals back to their origin, tracks animal movements, verifies age and diet, and tracks animal health records (Schroder and Tonsor 2012). While the system was originally designed as a better way to monitor and control food-and-month disease, a major issue in some parts of Brazil, cases such as these and overall better food safety are also benefits.
 
The location of the “Atypical BSE” case matters
Where the “atypical BSE” case occurred is also of importance because it could directly explain why China chose to temporarily stop imports from Brazil. Figure 1 shows origin of live cattle, source of processing, and the Brazilian state beef was exported from. Most of the beef imports into China from Brazil come from the Sao Paulo and Minas Gerais area and nearly all of it leaves through the port of Santos, SP (Erasmus 2020). The “atypical BSE” cases were found in Minas Gerais and Mato Grosso. Given that the beef exports to Mainland China are much more consolidated in these areas relative to beef exports to Hong Kong, there is some explanation on why China temporarily discontinued beef exports from Brazil.
 
Resulting Impacts on U.S. Beef Complex
As noted in the OIE guidelines for determining disease free status, an “atypical BSE” case does not impact its official BSE risk status since recognition as this form of the disease is believed to occur spontaneously in all cattle populations at a very low rate. Thus, while there are current trade stops between the Brazil and China, it is unlikely to become a major trade issue in the coming weeks. As such, additional pounds of beef would not leave the U.S., thus not significantly benefiting the U.S. beef complex in either the short- or long-run.
 
Chinese Beef Imports vs. Brazilian Beef Exports
This situation has elevated the discussion on how sensitive China beef imports are to trade distributions. The Herfindahl-Hirschman Index (HHI) is one way we can measure market concentration or how much another country relies on another. The lower the value, the less concentrated an industry segment is whereas higher values indicate more concentration. A value of 1 reflects that a country solely relies upon another country. While a heavy reliance on another country is in some cases acceptable, it does expose the relying country to increased risks due to market shocks.

In the case of beef exports between China and Brazil, it is important to appreciate how Brazil and China have grown to rely upon each over time – China through beef imports from Brazil and Brazil through exports to China. The HHI for Brazilian beef exports is derived here by squaring the market share of each country importing Brazilian fresh, chilled, or frozen beef and summing the squares. The HHI for Chinese beef imports is derived here by squaring the market share of each country exporting fresh, chilled, or frozen beef to China and summing the squares. Figure 2 illustrates the HHI for both Brazilian beef exports and Chinese (Mainland China excluding Hong Kong) beef imports since 1990. It indicates that Brazil has been increasing its reliance on China. However, China has been steadily increasing its diversity of countries it trades with while exponentially increasing the amount of fresh, chilled, or frozen beef it imports. For example, in 2005 China had an HHI of 0.95 to import 1,142,916 kg. of beef whereas in 2020 they had an HHI of 0.25 to import 2,118,293,343 kg. of beef.

Since 2014, China has exponentially increased the amount of beef it imports and at the same time Brazil has increased the beef it exports. Figure 3 shows Brazil share of China imports HHI and China’s share of Brazil’s export HHI. This shows that Brazil relies more on exporting its beef to China then China relies on importing beef from Brazil suggesting that Brazil has a greater incentive to keep the export relationship going after a “atypical BSE” announcement.



2020 Iowa Dairy Industry Survey Results Now Available

In 2020, the Center for Survey Statistics and Methodology – Survey Research Services at Iowa State University was contracted to conduct an online/mail survey with dairy farmers in Iowa to learn about their current operations, needs and expectations for the future.

The survey consisted of 903 Grade A and B dairy producers in Iowa and was part of a research effort coordinated by Jennifer Bentley, Fred Hall and Larry Tranel, dairy specialists with Iowa State University Extension and Outreach, who served as principal investigators on this project.

Results provide insight on the current state of the dairy industry in Iowa and will be summarized through reports for educators, industry collaborators, elected officials and the general public.

“This information will help educators and industry collaborators determine educational programming areas in the short and long term,” Bentley said. “Additionally, results will help all audiences better understand the demographic of dairy farms, management practices used and the future of the industry.”

ISU Extension and Outreach received generous support from industry collaborators who helped make this project a success, including the Iowa Area Development Group, Iowa Corn Growers Association, Iowa Farm Bureau Federation, Iowa Soybean Association, Iowa State Dairy Association and the Midwest Dairy Association.

Key findings include:
    The typical dairy herd in Iowa has less than 250, predominately Holstein cows with a rolling herd average between 18,000-26,000 pounds.
    A growing number of operations have parlors, predominately parallel, with an increased installation of robotic milking systems.
    Herds are maximizing overall herd health, longevity and profitability by using sexed and beef semen strategically.
    The dairy industry continues to see operations retire or discontinue milking, yet the number of cows will likely be maintained or increase, indicating expansion of existing dairies.
    Farmer mental health has become more of an issue over the past five years, with over half the respondents indicating high personal stress, with instances that prompted them to take action or intervention.

The full publication can be downloaded for free from the Iowa State Extension Store.



Corn Growers React to Proposed Tax Changes

The House Ways and Means Committee today released its draft bill, which includes tax provisions that would pay for portions of the proposed $3.5 trillion budget reconciliation legislative package. While the bill would preserve stepped-up basis, there are several provisions impacting family farms, including lowering the current estate tax exemption. Stepped-up basis and the estate tax in the current tax code help protect family farms that are passed down from generation to generation.

In response to these developments, NCGA President John Linder released the following statement:

“We are very pleased to see that the House Committee did not include the elimination of stepped-up basis within its initial text. However, we are concerned with the provisions on the estate tax in the Committee draft that could impact family farms. NCGA will continue to work to preserve stepped-up basis and the current estate tax exemption as this process moves forward.

“Family farms produce crops that feed Americans and provide consumers with affordable and environmentally friendly fuel. We are grateful to the House Agriculture Committee for including funding for biofuels infrastructure in its bill and thank Representatives Cindy Axne, Angie Craig and Cheri Bustos, along with Chairman Scott, for their leadership. Greater market access for higher blends of ethanol deploys more low-carbon fuels while supporting rural economies. As the country works to meet the President’s ambitious climate goals, ethanol is the solution we need now.”



Secretary Vilsack to Attend G20 Agriculture Ministerial in Italy

Secretary of Agriculture Tom Vilsack will travel to the G20 Agriculture Ministers’ Meeting in Florence, Italy, this week, where he will reaffirm the United States’ commitment to international engagement on agriculture and make the case for joint action on climate, food security, agricultural innovation, and closer global integration through trade.
 
Vilsack and his ministerial counterparts will work to build consensus around shared concerns and specific deliverables in advance of the G20 Leaders’ Summit 2021, which will be held in Rome Oct. 30-31. The G20’s membership, which includes 19 countries and the European Union, comprises 60 percent of the world’s population, 80 percent of global GDP and 75 percent of global exports.
 
Thurs., Sept. 16
Secretary Vilsack will meet one-on-one with European Commissioner for Agriculture Janusz Wojciechowski; Brazil’s Minister of Agriculture, Livestock, and Food Supply Tereza Cristina; and Italy’s Minister of Agriculture, Food and Forestry Policies Stefano Patuanelli.  He will also deliver remarks at the G20 Open Forum on Sustainable Agriculture.
 
Fri., Sept. 17
During the G20 Agriculture Ministers’ Meeting, Secretary Vilsack will deliver remarks focused on balancing the three dimensions of sustainability in food systems.
 
Sat., Sept. 18
During the G20 Agriculture Ministers’ Meeting, the Secretary will deliver remarks focusing on the G20’s contributions to the United Nations’ upcoming Food Systems Summit and Climate Change Conference (COP26).   He will also meet one-on-one with Luis Planas, Spain’s Minister of Agriculture, Fisheries, and Food.



AFBF Welcomes Nomination of Elaine Trevino for Chief Agricultural Negotiator

American Farm Bureau Federation President Zippy Duvall commented today on the nomination of Elaine Trevino for chief agricultural trade negotiator at the United States Trade Representative.

“AFBF is encouraged by President Biden’s nomination of Elaine Trevino as chief agricultural trade negotiator. Her strong roots in agriculture and her experience in America’s largest exporting state have prepared her for the challenges of representing the nation on trade issues.

“Opportunities to create new trade agreements with the European Union and Great Britain as well as expanding the China Phase 1 agreement make filling this position with the most qualified person extremely important. We look forward to working with Ms. Trevino to help ensure a level playing field and to create new avenues for farmers and ranchers to feed the world.”



Dairy Associations Urge Additional White House Action on Ports Crisis

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) joined several other organizations urging the Biden administration to take additional steps to alleviate the ongoing ports crisis in a letter sent today to the White House from a coalition of 77 agriculture and food associations.
 
Since early 2021, dairy and other agriculture exporters have been facing unprecedented challenges in securing shipping container space on ocean vessels while contending with an accumulation of exorbitant detention and demurrage fees. Foreign owned and operated ocean carriers have been driving this crisis by providing unpredictable and unreasonable timelines for exporters to load agricultural goods and by exacerbating pressure on supply chains by opting to return empty containers rather than allowing time for them to be loaded with Asian-bound goods for the vessel’s return journey. As a result, over 70% of containers are leaving West Coast ports empty, an all-time record.
 
Delays and an intentional lack of transparency and flexibility from ocean carriers have cost American dairy exporters over $300 million dollars through just the first half of the year, or 12% of total export value. In addition to this added cost, continued delays put at risk critical trading relationships with Asian importers as the U.S. increasingly risks becoming viewed as an unreliable supplier.
 
“We thank the Biden administration for the initial actions taken to address the extraordinary challenges dairy exporters are facing when exporting their products,” said Krysta Harden, USDEC president and CEO. “Unfortunately, the shipping crisis only continues to grow as container availability becomes scarcer with the ocean carriers’ increasing refusal to export American-made products. To further its goals of supporting the workers and companies producing Made-In-America products, we are urging the White House to take a more active role in ensuring that foreign carriers are not permitted to dictate U.S. export flows and put our established trading relationships in jeopardy. Right now, imports seem to be enjoying the equivalent of an eight-lane highway while our exports have been relegated to narrow country roads; that’s not right and we know that Congress and the Administration can take steps to create fairer trading practices.”
 
“Without question, ocean carriers are abusing a unique situation created by the pandemic and the lack of sufficient regulatory action to enforce reasonable shipping practices,” said Jim Mulhern, NMPF president and CEO. “We recognize that increased import demand has driven higher rates for shipping, but it does not warrant the cancellations, refusal to load U.S. dairy and agriculture products, and unreasonable detention and demurrage practices that ocean carriers have turned into an additional revenue stream. It is imperative that the Administration takes immediate steps to work with Congress and the FMC to limit these unfair practices and ensure our exporters can reach their customers around the world.”



RFA Analysis: Retail Gas Prices Not Affected by Renewable Fuel Standard Credits

The Renewable Fuel Standard’s compliance credit market mechanism does not have any impact on retail gasoline prices, according to a new analysis released today by the Renewable Fuels Association. The analysis finds that while RFS compliance credits—known as RINs, or Renewable Identification Numbers—are a factor in wholesale gasoline prices, there is no evidence that RIN costs have any measurable effect on the retail prices paid by consumers.

RFA Chief Economist Scott Richman found that, not surprisingly, the main driver of recent higher retail gas prices is higher crude oil prices. He calculates that retail gasoline prices have had a correlation of 0.96 with West Texas Intermediate crude oil prices on a monthly basis from January 2013 to July 2021 (with 1.00 representing a perfect correlation and 0.00 representing no correlation whatsoever). Meanwhile, there has been essentially zero correlation (-0.05) between gasoline prices and the prices of RINs. The new analysis is consistent with similar studies conducted by Informa in 2015 and 2017.

“Higher gasoline prices this summer were caused primarily by OPEC+ oil production cutbacks and an increase in gasoline demand,” writes Richman. “Additionally, supply issues such as the Colonial Pipeline shutdown and refinery closures due to Hurricane Ida accentuated price pressures at times. RINs are a convenient target for accusations since they are not widely understood, but as the analysis confirms, RINs do not contribute to higher retail gasoline prices.”

RFA President and CEO Geoff Cooper put the report’s findings into context: “The topic of RFS compliance and RINs can be complex and confusing, and oil refiners have used that complexity to their advantage in their relentless campaign against the RFS. One minute the refiners claim RIN prices cause higher retail gas prices, implying that they somehow fully pass RIN costs on to consumers. Then the next minute they claim RINs are eating into their bottom line because they can’t pass costs along to the pump. Neither of those arguments holds water, as this new analysis shows. The truth is, merchant refiners fully recoup RIN costs by passing them along to wholesale buyers at the terminal; then the RIN value is fully offset when ethanol is blended with gasoline.  There is no impact to the consumer.”

Cooper also stressed that the debate over RINs wouldn’t even exist today if refiners had appropriately reacted to the investment signals sent when the RFS was expanded nearly 15 years ago. Refiners who acquire and blend physical volumes of renewable fuel—the original intent and purpose of the RFS—secure RINs free of charge.

When it comes to retail fuel prices, the U.S. Energy Information Administration has stated that crude oil prices and gasoline supply and demand are the main drivers. The EIA estimates that the cost of crude oil accounted for more than half of what consumers paid for gasoline from 2011 to 2020, and crude oil and taxes together represented nearly three-quarters of the total.