Tuesday December 21 Ag News

Nebraska Farm Income and Farm Policy Directions
Brad Lubben, NE Extension Policy Specialist

Projections prepared earlier this fall and published in December as part of the University of Nebraska-Lincoln’s Bureau of Business Research report, “Business in Nebraska,” pegged Nebraska farm income for 2021 at a little over $8 billion. That would be a record in nominal terms, surpassing the previous highs of around $7.5 billion in 2011 and in 2013.

While the results for 2021 are built on good production and strong prices for most commodities along with reduced, but still substantial government payments, the expectations going forward are quickly tempered by an expected pullback in commodity prices, rising costs, and reduced government supports. A brief analysis of farm income and federal farm income safety net programs provides some insight on current conditions and on potential future directions for ag policy and farm programs.

Farm Income
Using official state-level farm income data published by USDA’s Economic Research Service through 2020 and my projections for 2021-2024, net farm income in Nebraska is currently projected to be $8.1 billion in 2021, a sharp rise from the $5.3 billion estimate for 2020, which itself was up substantially from the $3.5 billion average over the 2015-2019 downturn (see Figure 1). Stronger commodity prices since late 2020 coupled with reduced, but still substantial government payments led to the record income estimates.

The record farm income levels may not last however, as forecasts through 2024 based on longer-term baseline projections from USDA and the Food and Agricultural Policy Center (FAPRI) at the University of Missouri pull Nebraska farm income back to the $5 billion to $6 billion range. An expected pullback in some commodity prices, a sharp rise in input costs, and a dramatic decline in government payments account for the drop in projected farm income.

Safety Net
Looking closer at government payments provides insight on the role of the federal safety net as well as management decisions ahead for producers. Relying again on data from USDA’s Economic Research Service through 2020 and my projections for 2021-2024, the analysis shows government payments dropping from unprecedented levels in 2020 to minimal levels over the coming years.

Government payments in Nebraska peaked at nearly $2.5 billion in 2020 as ad hoc COVID-19 relief rolled out primarily in the form of Paycheck Projection Program support and Coronavirus Food Assistance Program payments. That was more than double the payments of 2019, which itself was high due to the ad hoc relief in the form of Market Facilitation Program payments to combat losses related to on-going trade conflicts. Government payments dropped dramatically in 2021 as COVID-19 relief scaled back and they look to virtually disappear by 2022 except for the stable, predictable conservation payments of around $150 million per year.

Amid the massive ad hoc payments over the past four years (trade assistance payments in 2018-2020 and COVID-19 relief payments in 2020-2021), the core part of the farm income safety net, namely commodity programs, have largely disappeared in relevance.

Commodity program payments were substantial in 2015-2017 as Nebraska producers received more than $600 million per year in Agriculture Risk Coverage payments for the 2014-2016 crop years. Those payments were based on moving average revenue guarantees that were built on strong prices prior to the 2014 Farm Bill sign-up that encouraged enrollment in ARC. As market prices fell, ARC payments were substantial, but the drop in market prices also meant the moving average guarantees also fell over time. By the 2017 crop year, the moving averages had fallen to the point that the guarantees were smaller and paid little to producers even as market prices remained lower.

Under the 2018 Farm Bill, producers had an opportunity to change their enrollment for 2019 and beyond and largely shifted toward PLC given the price projections at the time and the relative support of the ARC program versus the Price Loss Coverage (PLC) program. ARC and PLC payments in 2020 for the 2019 crop were substantial at more than $240 million (almost all PLC) but have dropped to around $50 million for 2021 and are projected at minimal levels going forward given current price levels and projections.

Future Directions
The future for farm programs will be impacted by the strength and stamina of the current commodity price cycle as well as the 2023 Farm Bill debate expected to begin in earnest in 2022. The debate will begin with baseline forecasts for commodity prices and farm program spending that will be updated in early 2022. Recent projections from FAPRI still show commodity program spending in the coming years. While my projections for farm program payments going forward are based on higher point estimates for market prices that would translate into little to no commodity program payments, FAPRI’s baseline estimates and those of the Congressional Budget Office that are used to estimate the cost of legislation both rely on stochastic or probability-based analysis, meaning that, despite higher projected prices, there could also be outcomes with lower prices and, thus, government payments. After simulating hundreds of possible scenarios and averaging the results, the analysis will show projected payments even as it also shows average projected prices above the program trigger levels.

Thus, the baseline for farm program spending doesn’t completely disappear even as it appears to be a fraction of what it was in previous farm bill cycles. That raises the possibility that farm programs could simply be extended in the next farm bill, given the baseline budget exists to pay for them, but is large enough to make substantial changes. There could be a push to strengthen the safety net and there have been calls for expanding the standing authority for disaster assistance programs such as the WHIP and WHIP+ programs (Wildfire and Hurricanes Indemnity Program) of the past few years. There will also likely be calls to reform or reduce spending on the commodity program and the broader safety net, including the federally subsidized crop insurance program. While not discussed here, the crop insurance program is considered the top safety net priority in many ag circles and is the largest component of the federal safety net at present given the higher market prices and reduced commodity program spending.

There will also be other competing priorities for farm bill spending, either limiting the amount of funding available for safety net priorities or challenging the current support for the safety net (with crop insurance as a primary target). Conservation spending has grown steadily over time before leveling off in the 2018 Farm Bill. The proposed Build Back Better legislation now mired in Congress would add billions to conservation spending targeted to climate practices and incentives. If the bill were to proceed through Congress in some form, the proposed conservation spending could effectively double the size of the conservation programs. If the current bill were to fail, the same ideas would likely be priorities for new or reshuffled farm bill spending during the overall farm bill debate. Add a continued focus on food assistance, rural development and broadband, and equity and socially disadvantaged producers, and there will be ample priorities battling for attention and funding during the coming debate.



Farmers Tax Guide Now Available

Farmers can better understand their 2021 tax returns with help from a guide available through the IRS. The 2021 Farmers Tax Guide has illustrated examples, a sample return, and explains how the federal tax laws apply to farming.

The tax guides are in and are free to local producers. They can be picked up at the Cuming County Extension office, area tax preparers or any Cuming County bank.



Webinar to cover finding a tax advisor for farm and ranch businesses

The University of Nebraska-Lincoln’s Center for Agricultural Profitability will host a webinar on best practices for hiring a tax professional for a farm or ranch business at noon on Jan. 6.

With evolving tax laws and ever-increasing complexity, it’s more important than ever to find the right tax advisor that understands the special rules to apply to farmers and ranchers to help these businesses stay in compliance and minimize tax obligations.

The webinar will be presented by Tina Barrett, director of Nebraska Farm Business, Inc., which provides financial and management assistance to agricultural producers across the state.

It is part of a monthly series of webinars designed to benefit applicants in the Nebraska Land Link program, which works to match farmers or ranchers seeking land with landowners who are looking to find successors. Prospective landowners and land seekers can apply to the program for free at https://cap.unl.edu/landlink. Applications are then matched with compatible counterparts so that a mutually beneficial partnership can be forged over the course of a transition plan, with facilitation by Nebraska Extension professionals.

To register for the webinar, visit the Center for Agricultural Profitability’s website at https://cap.unl.edu/webinars.

 

PASTURE FERTILITY MANAGEMENT
- Todd Whitney, NE Extension
 
High fertilizer prices have livestock managers questioning potential returns regarding pasture fertilizer investments. And, positive economic returns will depend on final fertilizer cost; value of pasture or hay; grass growth response; and risk.
 
For pasture management, the highest risk regarding paying for fertilizer is possible lack of water or rainfall after applying the nutrients. Risk is lowered when irrigation is available and/or when grass meadows have supplemental sub-surface water.
 
Our UNL NebGuide, “Fertilizing Grass Pastures and Hayland,” G1977, provides fertilizer rate recommendations. Overall, Nebraska research indicates that for each one pound of nitrogen fertilizer applied, there is about one pound of additional calf or yearling body weight gain. This guideline assumes adequate harvest efficiency where either grazing animals consume increased forage produced by the fertilizer and/or extra biomass is hayed. Remember that native grasses naturally respond less to fertilizer than cool-season grasses such as brome, orchard grass or wheatgrasses.

So, this may be a time to redirect your fertilizer investment dollars. If moisture becomes more available during winter, prescribed burning patches or entire pastures to stimulate improved growth and grazing may be a good option. Also, adding cross-fences and watering sites to subdivide pastures will allow more grass rest periods to increase forage production.
 
If possible, divide pastures into at least three or four separate grazing paddocks. Then, move cattle through the pastures based on growth rates. When plants are growing more rapid, rotate cattle to the next pasture every 3 weeks. Then, when hotter temperatures stall grass growth, slow down the rotation such as moving the cattle every 6 weeks until favorable weather conditions promote rapid growth again.



Recovery Continues Following Devastating Wildfires and Storm in Kansas

On Monday, Secretary of Agriculture Mike Beam and Animal Health Commissioner Dr. Justin Smith visited local officials, farmers and ranchers in several of the Kansas communities which are working to recover from the wildfires and storm that raged through the area last week.

There has been an outpouring of support from near and far, offering everything from clothing and food to labor and use of large equipment for recovery efforts.

Local services — including local emergency management offices, extension offices, veterinarians, churches and others — have been instrumental in providing the help that the families in that area need right now. They know the communities and the people involved, and have been able to work on specific needs of the individual families who were impacted, ensuring that they have safe places to stay and support as they move forward.

“Kansans — and farmers and ranchers in particular — are resilient,” said Secretary Beam. “Even in the best of times, they endure under forces they can’t control and keep working day-in and day-out to care for their livestock and to harvest their crops.” He noted that many of the ranchers focused their most immediate attention, after the fires were extinguished, to care for their livestock and help their neighbors, even before considering their own personal needs. “This disaster will certainly test that resilience to the limit, but the communities which surround these individuals will continue to support them and will help them persevere.”

The total impact of last week’s storm is difficult to quantify, partly due to the many layers of the disaster. Clearly, the Four County Fire which burned over a hundred thousand acres in northwest Kansas, had the largest immediate impact. But there were several other smaller fires across the state as well, which affected Kansans in other communities. The extreme high winds caused damage to many agricultural entities statewide, especially those with greenhouses and high tunnel growing systems. In addition, the wind, dust and ash may have caused damage to crops that were in the ground, like the winter wheat crop, and we may not know the extent of that damage for several months.

What we do know is that dozens of homes were reported to be destroyed or heavily damaged, over a thousand cattle were lost as a result of the wildfire, and thousands more cattle survived the fire but are being displaced because of the loss of grassland to sustain them.

“Ranchers are now focused on the health and welfare of the cattle who have survived,” said Dr. Smith. “They may still see health decline due to exposure to smoke and heat, but most should recover. The majority of those cattle will need to move to other locations, though, because the grazing land destroyed in the fire won’t grow back for several months.”

This recovery can take a significant physical and emotional toll on the individuals who have experienced these losses. Resources are available to help those who need this support and can be found at KansasAgStress.org.

Other information about recovery efforts and lists of resources available to those who have suffered damage from the storm can be found at KDA’s Recovery Resources webpage at agriculture.ks.gov/Recovery. That page also includes ways to make a donation to help with recovery efforts.



Request for help for those affected by Kansas wildfires
NE Cattlemen

Last week, wildfires in several Kansas counties prompted our neighbors in Kansas to begin coordinating donations of feed, fencing supplies, and cash for affected ranchers. The bulk of the acres burned are within the counties of Russell, Osborne, Rooks, and Ellis. Ranchers in the hardest hit areas lost fence, livestock, and feed resources. Ranch homes and outbuildings also were among the losses.

Heartland Regional Stockyards at Plainville, KS serves as a collection and distribution point for hay and supplies. Contact the auction market at (785) 688-4080, Landon Schneider at (785) 259-3234 or Brandon Hamel at (785) 434-6280. Russell Livestock also is taking hay donations. Stock water tanks are a need, as well. An additional drop-off point is the Russell County Fairgrounds. Call extension agent Marcia Geir at (785) 483-3157 with questions.

A supply donation site for those impacted by fire in southwestern Lane County and surrounding counties has been set up at 3 E Rd 120, Dighton, KS. To coordinate a drop-off, call Erik Steffens at (620) 397-1687.   

Cash donations can be made through the Kansas Livestock Foundation (KLF), KLA’s charitable arm, by sending a check, with “wildfire relief” written in the memo line, to:
6031 S.W. 37th
Topeka, KS 66614.

All proceeds will be used to help those affected by the recent weather event.

For additional information please call KLA at (785) 273-5115.

If you are able to help our friends in Kansas, any donation would be greatly appreciated.



9 Candidates Vie for Iowa Pork Youth Leadership Team
    
Nine young women and men are competing for three positions on the 2022 Iowa Pork Producers Association (IPPA) Youth Leadership Team. The competition is Jan. 25 and 26 in Des Moines. Winners will be named at an evening banquet Jan. 26.

The Youth Leadership Team is designed for those who are passionate about the pork industry.

Contestants are seniors in high school or college students up to age 21 as of Jan. 1. Candidates will be judged on their knowledge about pork and pig production as shown in a speech presentation, personal interview, media interview, experience, and written test about the topics.

The female contestant with the highest score will be crowned Iowa Pork Queen, and receives a $4,000 scholarship, plaque, crown and sash. Two other applicants will become Iowa Pork Ambassadors; they each receive a $4,000 scholarship and plaque. All three will assist with state pork promotional and educational activities throughout 2022.

Listed alphabetically by county, contestants and their hometowns are:
    Buchanan — Kirby Cook, Winthrop
    Clinton — Brooklyn Kucera, Bryant
    Delaware — Gracee Brooks, Manchester
    Emmet — Hallie Ayers, Estherville
    Emmet — Lynzie Burton, Estherville
    Harrison — Zoe Reffitt, Dunlap
    Plymouth — Kiley Allan, Le Mars
    Story — Jackson Sterle, Roland
    Warren — Maggie Staudacher, Indianola

Current members of the Youth Leadership Team are Leah Marek, Riverside; Paige Dagel, Sanborn; and Reagan Gibson, Panora.



NEBRASKA CHICKENS AND EGGS

All layers in Nebraska during November 2021 totaled 8.21 million, up from 7.85 million the previous year, according to the USDA's National Agricultural Statistics Service. Nebraska egg production during November totaled 198 million eggs, down from 199 million in 2020. November egg production per 100 layers was 2,416 eggs, compared to 2,535 eggs in 2020.

IOWA: Iowa egg production during November 2021 was 1.26 billion eggs, down 2 percent from last month but up 3 percent from last year, according to the latest Chickens and Eggs report from the USDA's National Agricultural Statistics Service. The average number of all layers on hand during November 2021 was 49.4 million, up 1 percent from last month and up 3 percent from the same month last year. Eggs per 100 layersfor November were 2,548, down 3 percent from last month and down slightly from last November.

US November Egg Production Up Slightly
United States egg production totaled 9.37 billion during November 2021, up slightly from last year. Production included 8.13 billion table eggs, and 1.24 billion hatching eggs, of which 1.17 billion were broiler-type and 73.8 million were egg-type. The average number of layers during November 2021 totaled 392 million, up 1 percent from last year. November egg production per 100 layers was 2,390 eggs, down slightly from November 2020.
                                    
Total layers in the United States on December 1, 2021 totaled 393 million, up slightly from last year. The 393 million layers consisted of 328 million layers producing table or market type eggs, 61.9 million layers producing broiler-type hatching eggs, and 2.97 million layers producing egg-type hatching eggs. Rate of lay per day on December 1, 2021, averaged 79.8 eggs per 100 layers, down slightly from December 1, 2020.



I-29 Moo University to Present Feeding Higher Forage Rations Webinar

The I-29 Moo University 2022 Dairy Webinar Series continues Wednesday, Jan. 5 from noon to 1 p.m. with a focus on feeding higher forage rations.

Dairy producers and allied industry reps are invited to join Gail Carpenter as she explains how to increase forage content of rations and increase margins for dairy producers. She will discuss increasing solids, maintaining animal health and achieving peak production levels in this era of increasing feed costs.

“With rising ration costs, producers are working with nutritionists to lower feed costs, while maintaining profits,” said Fred Hall, dairy specialist with Iowa State University Extension and Outreach. “Dr. Carpenter’s program will address this important topic.”

Carpenter joined Iowa State in January 2021 as an assistant teaching professor in dairy production. Her background includes experience in research, teaching and outreach in applied dairy cattle nutrition and management. Most recently, Carpenter was a dairy nutritionist for CSA Animal Nutrition in Dayton, Ohio. Prior to her work at CSA, Carpenter served as an assistant professor at the University of Guelph, Ridgetown Campus, in the Department of Animal Biosciences, where her research program focused on using alternative forages in dairy rations.

Carpenter currently teaches undergraduate courses on lactation and applied dairy farm evaluation.

There is no fee to participate in the webinar; however, preregistration is required at least one hour before the webinar. Preregister online at https://go.iastate.edu/NV8R0J.

For more information, contact: in Iowa, Fred M. Hall, 712-737-4230; in Minnesota, Jim Salfer, 320-203-6093; or in South Dakota, Heidi Carroll, 605-688-6623.

I-29 Moo University is a consortium of extension dairy specialists from the land-grant universities in Iowa, Minnesota, Nebraska, North Dakota and South Dakota. The I-29 Moo University is a multi-state learning collaboration and connects extension dairy staff with the dairy community to share research, information and management practices through workshops, webinars, e-newsletters, podcasts and on-farm tours. More information about the I-29 Moo University is available online https://dairy.unl.edu/i-29-moo-university.



Report: Higher Wages, Rising Input Costs and Supply Chain Problems Pushing Up Pork Prices but Not Profits

In a report issued today on retail pork prices economists with Iowa State University, North Carolina State University and the National Pork Producers Council found that pork prices, not industry profits, are rising. Prices are rising due to increased transportation costs, supply bottlenecks and delays and increased labor costs throughout the pork chain. Those factors, said Iowa State’s Dermot Hayes, NC State’s Barry Goodwin and NPPC’s Holly Cook, were either caused or exacerbated by the COVID-19 pandemic.

Other factors that have affected prices up and down the pork chain over the past 18 months, the report noted, include a 2.5 percent loss in pork packing capacity that resulted from a federal court order stopping faster harvesting line speeds, higher energy costs, rising feed costs and, most importantly, a shortage of workers, which has hindered productivity and caused wages to increase.

“This report shows there are numerous issues affecting pork prices, but increased profits, whether at the retail, wholesale, or farm level, are likely not a significant contributor to the rising prices,” said NPPC President Jen Sorenson. “Pork producers, for their part, are continuing to produce hogs to meet the strong demand for pork the industry has seen despite the pandemic.”

The report also found the farm-to-wholesale price spread – the difference between what producers receive for hogs from packers and what packers receive for pork from retailers – has remained relatively constant over the past two years aside from a spike in May 2020 when some packing plants shut down because of COVID illnesses among their workforce. (With fewer places to send their hogs, producers were paid less for them.) The wholesale-to-retail spread, however, has significantly widened over the past few months as the farm-to-wholesale price spread has declined. That likely is the result of higher costs for transporting pork to retail outlets, of labor in retail stores and distribution centers and from delays and bottlenecks in the supply chain. Retailers likely are passing along some of those extra costs to consumers.

“Although there are significant food production, processing and distribution challenges,” said Iowa State’s Hayes, “there are likely no permanent, structural barriers in the way of getting back to cheaper food. It is unclear whether the same can be said about energy prices, wage inflation and other current challenges.”

The long-term outlook for labor, which according to the report is a critical factor in easing supply chain challenges and high prices, is dependent on future immigration policy and agricultural labor reform and, if not addressed, “will continue to be a limiting factor in food and pork production for the foreseeable future,” the report concluded.

NPPC has been urging lawmakers to address the agricultural labor shortage by expanding the existing H-2A visa, which allows temporary seasonal foreign farmers workers into the country, to year-round agricultural laborers.



North American Meat Institute Statement on Massachusetts' Delay of Consumer Price Hikes on Pork

The North American Meat Institute (Meat Institute) today released a statement on a bill approved by the Massachusetts Legislature to delay enforcement of rules called for in Question 3, the Commonwealth’s animal confinement voter initiative. The bill now goes to the Governor to be signed into law.

“We appreciate the actions of Governor Charlie Baker and the Legislature to put Massachusetts consumers first and avoid further price hikes for pork,” said Meat Institute President and CEO Julie Anna Potts. “We welcome the expertise of the Department of Agriculture Resources in promulgating new rules and urge the Department to consider changes to provisions that are unworkable or overly burdensome.”

At issue is Question 3’s January 1, 2022, deadline prohibiting the sale of meat in Massachusetts from sows or the offspring of sows housed in a gestation crate.

In August, the Meat Institute submitted comments to the Massachusetts Attorney General calling for changes to the then proposed rules. Provisions related to the certification and record keeping of every transaction of hogs or pork products by packer processors are burdensome and costly.



Organic Corn, Soybeans and Wheat Expected to Face Very Different Market Conditions in the Coming Year
 
Mercaris, the nation’s leading market data service and online trading platform for organic and non-GMO certified agricultural commodities, released its latest Mercaris Commodity Outlook last month.

According to the report, organic corn, soybeans and wheat each are expected to face very different market conditions during Marketing Year 2021/22.  

“The U.S. organic corn market is starting 2021/22 with prices that have recovered from the prior year. Production is expected to achieve a 9% year-over-year increase ultimately reaching 49.5 million bu. With this harvest, imports are likely to push lower again over 2021/22 potentially lowering prices by the summer of 2022 depending on how much the pace of imports slows,” says Ryan Koory, Vice President of Economics for Mercaris. “Organic soybean markets are similar beginning 2021/22 with higher prices and a harvest that is expected to reach a record setting 9.4 million bu. However, the large soybean harvest is not expected to lead to a reduction in imports or lower prices over 2021/22.”

Following multiple actions against India in 2021, the ability of U.S. importers to source organic soybean meal from the country is expected to become limited over the next year. As a result, the U.S. is expected to become more reliant on domestically produced organic soybean meal, which in turn is likely to keep organic soybean prices supported and drive an increase in imports.

U.S. organic wheat production did not experience the year-over-year boost seen in organic corn and soybeans. Following significant drought conditions across the High Plains that reduced organic spring wheat production this year, U.S. organic wheat production is expected to fall 4% year-over-year to 19.6 million.

Other key findings from the report include:
-    U.S. organic corn production is expected to expand following a 4% increase in harvested area which is projected to reach nearly 392,000 acres with a 5% year-over-year increase in yields.
-    Organic soybean yields are expected to increase 5% year-over-year, reaching 37.45 bu./acre. Harvested area increased a remarkable 10% year-over-year, reaching 252,000 acres.
-    Organic spring wheat yields are expected to fall by an astounding 32% year-over-year as drought created disastrous growing conditions across the High Plains region of the U.S.

The latest report includes additional data and commentary on yield estimates, use, prices and more for organic commodities. For more information and to purchase a copy, visit www.mercaris.com.



Greater Clarity Is Needed on Data Tied to Complaints

Grower groups including the American Soybean Association, National Cotton Council and American Farm Bureau Federation are raising questions about data released Dec. 21 by EPA regarding reported dicamba off-target complaints during the 2021 growing season. Growers are concerned with the potential of significant gaps in the data provided by the agency.

For example:
-    It is not clear whether complaints were submitted to multiple sources/regulators and were therefore double-counted.
-    It is unclear if EPA, state regulators, or others investigated complaints to verify injury or assess potential causes.

Alan Meadows, a soybean grower from Halls, Tennessee, and ASA director said, “The agricultural community expects regulators to be clear with the data on which they are making decisions. It is concerning the information released provides an incomplete picture. Data that is not present in this EPA release may tell as much or more about the story than what the agency has included.”

NCC Chairman Kent Fountain, a Georgia cotton producer, said, “EPA's report doesn't align with what the U.S. cotton industry has seen and heard in the field. The data needs to be analyzed carefully to ensure accuracy because dicamba is too important to our industry for decisions to be made on incomplete or faulty data.”

AFBF President Zippy Duvall said, “The decisions EPA makes regarding herbicides have wide-ranging consequences for America’s farmers and ranchers, so they should be made after careful review and consideration of peer-reviewed science. The stakes are simply too high to make major label changes without due diligence from EPA to learn all the facts surrounding reported incidents. America’s farmers deserve a fair process as they work to use climate-smart practices to produce food, fuel and fiber for our nation.”

The groups will continue to review today’s release for additional insights or information that may require clarity.



SfL Statement on EPA Rule Finalizing GHG Standards for Passenger Vehicles

The following statement was issued by SfL Board Member Bart Ruth, a Nebraska corn and soybean producer; a former president of the American Soybean Association and Chair of the 25x’25 Renewable Energy Alliance.

On Monday, the EPA acted to further tighten the federal standards for greenhouse gas (GHG) emissions in the nation’s passenger vehicle fleet. While the decision to strengthen the stringency rule proposed in August was not unexpected, SfL was disappointed that the final rule did not include provisions to improve fuel quality by reducing the aromatic content of gasoline. Aromatics are base components derived from fossil fuels that blenders use to increase gasoline’s octane rating, a measure of the fuel’s effectiveness. However, aromatics also have been deemed threats to public health, damaging respiratory and cardiovascular systems.

While we recognize that increasing emissions standards is an important pathway to addressing climate change, so too is increasing the stringency of standards for fuel quality. While the proposal includes incentives for the production of vehicles with zero or near-zero emissions technology, it does not include any provisions that could significantly reduce GHG emissions from gasoline powered vehicles, an enormous, missed opportunity. Research shows that greenhouse gas cuts that could be achieved by using higher-octane midlevel blends with ethanol would equal those that EPA thinks are available from electrifying the vehicle fleet. Fortunately, in its announcement today EPA did acknowledge the need for additional rulemaking to make further improvements in GHG and particulate matter emissions. SfL stands ready to share research and other information with policy makers to maximize the benefits that can be gained from high-octane, low-emission fuels.



2022 National Ethanol Conference Agenda Announced

The Renewable Fuels Association recently unveiled the agenda for its 27th annual National Ethanol Conference, taking place February 21-23, 2022, in New Orleans. Themed “Zeroing in on New Opportunities,” the upcoming conference will feature a diverse lineup of thought-leaders and experts focused on emerging ethanol markets, innovative new uses, and the role of renewable fuels in achieving net-zero carbon emissions.

The slate of confirmed speakers presently includes a top Volkswagen executive speaking about the automaker’s vision for how ethanol can help achieve net-zero carbon emissions by 2050 or sooner, as well as other leading innovators in sustainable aviation fuels, pioneers in carbon capture and sequestration efforts, and renowned experts focused on the future of energy and transportation markets.

“The drive to a net-zero-carbon economy worldwide is beginning to pick up speed and there is a lot of conversation happening about the role renewable liquid fuels like ethanol can play in that transition,” said Renewable Fuels Association President and CEO Geoff Cooper. “By bringing together so many visionary leaders and influencers, the National Ethanol Conference promises to be a focal point for the industry’s efforts to leverage 40 years of experience into a bright future full of new opportunities.”

NEC panels and presentations include:
    To Net-Zero … and Beyond
    Retailer Roundtable: the Future of Fueling
    Partnerships and Progress: A Dialogue with Key Stakeholders
    Exploring Opportunities for New Uses
    Post-COVID Global Energy Markets: Where Does Ethanol Fit?
    Revolution or Evolution? The Future of Mobility and Energy Markets

Also included at the NEC, for the first time, is a discussion of “Ethanol’s Next Generation: Developing an Effective Workforce,” where members of the RFA Young Professionals Network and seasoned industry executives will discuss recent surveys identifying knowledge gaps and strategies to best prepare the industry’s future leaders for success.

For more information and to register, visit www.NationalEthanolConference.com.



Opinion: Biden trade strategy must unlock new access for U.S. dairy
Brody Stapel, President of Edge Dairy Farmer Cooperative

In early October, we finally got a glimpse into the Biden administration’s approach to trade when USTR Ambassador Katherine Tai outlined a “New Approach to the U.S.-China Trade Relationship.” Tai made clear the intention to maintain several policies from the previous administration, including keeping hold of tariffs and zeroing in on enforcement. The stated difference in the new approach is to simultaneously build out more collaborative efforts with our allies.

This all sounded fine. But when pressed on whether the U.S. will move toward engaging in comprehensive trade negotiations, whether through a China Phase 2 agreement or with other partners, disappointingly there was no firm commitment. This has been reiterated time and again through the administration’s actions with trading partners over the past several months. Most recently, the administration has been engaging with partners throughout the Indo-Pacific region, structuring what has been touted as an “economic framework.” While that might appear to be an approach to re-engage with our former Trans-Pacific Partnership partners, it has been made clear that the end goal is not a trade deal.

This is disheartening, to say the least, for the U.S. dairy industry and farmers like me who are hoping for sustainable farm businesses that survive and thrive long-term for our families. Engagement in the global market has long been recognized as key for the health and vitality of our industry and rural communities. According to the U.S. Department of Agriculture, each dollar of exports stimulates another $1.14 in economic activity. In 2020, Wisconsin alone exported more than $490 million worth of dairy products, contributing another $560 million in economic activity across the U.S.

But this isn’t just about dollars and cents. Good, comprehensive trade deals make markets fairer and more competitive. For U.S. dairy, this means ensuring that our partners don’t put in place restrictive barriers that reduce competition and aren’t based on science.

Ambassador Tai has also said that part of the administration’s new approach to trade would not be in the traditional sense, that is, not necessarily focused on market access. In the dairy industry, we understand fully the importance of taking new approaches; our product innovation has been a success story, particularly in the global marketplace. But, at the same time, the U.S. should not overlook what is currently working and consider how we can maintain momentum.

Greater market access for dairy exports means more to the industry now than ever. Exports are essential for balance of the U.S. milk supply and demand, growth of the industry and, at the end of the day, dairy farmers’ milk checks. The expanding global demand for dairy products, notably across Asia, makes an exports push even more opportune.

While we understand the administration’s focus remains on the domestic industry as we emerge from the pandemic — stating that the key to our global competitiveness begins at home — we must also recognize that new trade agreements can support those efforts. When done right, such agreements not only help open new markets for U.S. products, but they also create a business-friendly environment that attracts greater investment, fosters innovation and stimulates economic growth.

So as the Biden administration continues to engage in economic dialogue with our partners, it is the hope of our dairy farmers and processors — for the sake of the industry and rural America — that the administration embraces the value of expanding market access and finally begins real, good-faith negotiations.



Deadline Extended to Apply for Pandemic Support for Certified Organic and Transitioning Operations

The U.S. Department of Agriculture (USDA) has extended the deadline for agricultural producers who are certified organic, or transitioning to organic, to apply for the Organic and Transitional Education and Certification Program (OTECP). This program provides pandemic assistance to cover certification and education expenses. The deadline to apply for 2020 and 2021 eligible expenses is now Feb. 4, 2022, rather than the original deadline of Jan. 7, 2022.  

“We listened to feedback from our stakeholders and are happy to provide organic producers, and those transitioning their operations, enough time to learn about the program and complete the application,” said Zach Ducheneaux, FSA Administrator.  

Signup for OTECP, administered by USDA’s Farm Service Agency (FSA), began Nov. 8.  

Program Background  
Certified operations and transitional operations may apply for OTECP for eligible expenses paid during the 2020, 2021 and 2022 fiscal years. Signup for the 2022 fiscal year will be announced at a later date.

For each year, OTECP covers 25% of a certified operation’s eligible certification expenses, up to $250 per certification category (crop, livestock, wild crop, handling and State Organic Program fee). This includes application fees, inspection fees, USDA organic certification costs, state organic program fees and more.    

Crop and livestock operations transitioning to organic production may be eligible for 75% of a transitional operation’s eligible expenses, up to $750, for each year. This includes fees charged by a certifying agent or consultant for pre-certification inspections and development of an organic system plan.     

For both certified operations and transitional operations, OTECP covers 75% of the registration fees, up to $200, per year, for educational events that include content related to organic production and handling in order to assist operations in increasing their knowledge of production and marketing practices that can improve their operations, increase resilience and expand available marketing opportunities. Additionally, both certified and transitional operations may be eligible for 75% of the expense of soil testing required under the National Organic Program (NOP) to document micronutrient deficiency, not to exceed $100 per year.   

Producers apply through their local FSA office and can also obtain one-on-one support with applications by calling 877-508-8364. The program application and additional information can be found at farmers.gov/otecp.   



AGCO Agrees to Acquire Appareo Systems

AGCO, a worldwide manufacturer and distributor of agricultural machinery and precision ag technology, announced an agreement to acquire Appareo Systems, LLC (“Appareo”), a leader in software engineering, hardware development and electronic manufacturing. The acquisition is expected to close in January 2022.

Appareo, based in Fargo, North Dakota, specializes in the research, development, design, and manufacture of tangible technology that utilizes A.I., mechatronics, and innovative electronics designed to deliver exceptional customer value. The solutions Appareo has delivered are focused on communication, monitoring, sensing, tracking and controlling devices and systems used in the agricultural and aviation industries as well as other off-road businesses.

"Appareo has developed a world-class organization with exceptional capabilities to solve highly complex customer problems in emerging technology areas,” said Eric Hansotia, AGCO’s Chairman, President and Chief Executive Officer. “We see Appareo as a great addition to support delivering high quality, smart solutions to our farmers to maximize both their user experience and profitability. The addition of Appareo enhances our portfolio and talent as we execute our strategy to provide advanced technology solutions to farmers around the world.”

AGCO intends to retain the Appareo team and maintain its operations in Fargo, North Dakota and Paris, France.