Wednesday December 8 Ag News

New administrator to take the reins at Nebraska Ethanol Board beginning January 2022
 
Nebraska Ethanol Board (NEB) today announced the hiring of Reid Wagner as administrator of the agency. Wagner will join NEB on Jan. 3, 2022, and he replaces Roger Berry, whose last day will be Dec. 10, 2021.
 
Jan tenBensel, NEB chairman, commented on Berry’s departure and Wagner’s upcoming start: “Roger is a tremendous asset to the Nebraska ethanol industry, and we all benefited from his guidance and passion for agriculture and biofuels. He’s a great friend who will be missed. We look forward to Reid coming on board with our team, and we know his background and knowledge will take us, and the ethanol plants we work on behalf of, to new heights as the future of the biofuels industry evolves.”
 
Wagner graduated from the University of Nebraska-Lincoln where he earned his degree in chemical engineering. His professional experience thus far has led to positions at Evonik as a process engineer; ExxonMobil as a process design engineer; and Cargill as a production management engineering team member in the starches and sweeteners sector.
 
“I am thrilled to join a strong, cohesive team in the Nebraska Ethanol Board and use my diverse engineering background to foster growth and support innovation of an industry that is vital to my home state,” Wagner said.
 


DECIPHERING A HAY TEST – PROTEIN & ENERGY
– Ben Beckman, NE Extension Educator

All hay is not created equal.  Two major values we often judge hay quality on are protein and energy, both of which vary from year to year and between crops.  So how do we use these values when deciding what and how much hay to feed?

Protein values in hay tests are typically reported as percent Crude Protein (CP).  This measures the nitrogen portion of the hay.   Not only is this protein important for rumen microbes, it is also important for animal maintenance and growth.

When looking at hay energy values, one common measure often used is TDN or Total Digestible Nutrients.  TDN is the sum of the digestible fiber, protein, lipid, and carbohydrate components of a feedstuff.

Knowing TDN is useful especially for diets that are primarily forage.  Without consideration, diets may be lacking energy as much or more than crude protein.  Low energy diet can be as impactful to animal condition and performance as those lacking in protein.

Being familiar with how animal requirements for protein and energy change between animal class and with demands like pregnancy or lactation can help with decisions about how hay is fed. Keep in mind that in addition to these base demands, environmental conditions like temperature can impact animal needs in the short term as well. With this knowledge, we can feed lower quality hay to dry cows and save high quality hay for pairs at peak lactation or growing animals.  This not only ensures animals are properly fed but can also help control feed costs.

 

Feedlot Forum 2022 Returns Jan. 18 in Sioux Center

Feedlot Forum – the premier extension program for the cattle feeding industry – is back and in-person Jan. 18, 2022, at the Terrace View Event Center in Sioux Center.

Feedlot Forum will focus on the latest emerging trends in beef feedlots. Cattle feeders should come prepared to participate and discover how to stay competitive in the beef industry, according to Beth Doran, Iowa State University extension beef specialist.

"With a full lineup of nationally-known speakers, Feedlot Forum 2022 is designed to benefit the cattle feeder, and anyone involved or interested in beef feedlots and feeding cattle will find value in the program," Doran said. "It's a grassroots effort of the Lyon, Sioux and Plymouth County Cattlemen’s Associations, ISU Extension and Outreach and the Iowa Beef Center."

The forum will open with Marvin Hammond, Elanco technical specialist, providing a "hands-on" session featuring proper implanting. Hammond will watch participants place an implant in provided cattle ears and comment on how they might improve their technique.

Dan Thomson, Iowa State animal science faculty member and presenter on Doc Talk, is also on the morning schedule and will talk about the walk toward traceable beef and its importance to the beef industry.

"The afternoon session's topics and speakers will be just as powerful," Doran said.

Chase DeCoite, director of animal health with the National Cattlemen’s Beef Association, will lead the afternoon program by talking about the importance of the newly adopted U.S. Cattle Industry Feedyard Audit, and Lee Schulz, associate professor in economics and livestock economist at Iowa State, will round out the day with a beef market outlook.

Attendees also will have the opportunity to hear updates from the Iowa Beef Industry Council, Iowa Beef Center and Iowa Cattlemen’s Association, plus peruse a trade show featuring 24 agri-businesses with new services and products to support cattle feeding.  

The registration fee is $25 per adult or $10 per student and can be completed online at https://go.iastate.edu/ZKECIJ on or before Jan. 10.

For more information, contact Doran at 712-737-4230 or doranb@iastate.edu



Reynolds announces $100M investment in Water Infrastructure, Conservation Practices

Through a new grant program within Iowa Finance Authority, Gov. Reynolds is allocating $75M for the Water Infrastructure Fund. The funding will come through federal ARPA dollars and will support projects aimed at reducing excess nutrients, improving drought resiliency, reducing flood risks, improving public health, promoting reuse of water and wastewater and providing significant economic benefits to communities and the state. The grant application process will open December 15th.

“We recognize the value and importance of water quality and what that means to families, businesses and economic prosperity for our state,” said Gov. Reynolds. “That’s why we remain committed to improving Iowa’s water quality and providing these historic investments to local communities, landowners and organizations that aim to protect, preserve and restore Iowa’s water resources.”

An additional $25M will be allocated to the Conservation Infrastructure Project at the Iowa Department of Agriculture and Land Stewardship.

The Iowa Conservation Infrastructure Project brings together both public and private resources to advance the mission of the Iowa Nutrient Reduction Strategy.  In doing so, improvements will be made in priority watersheds to improve water quality, habitat, recreation opportunities and carbon sequestration.

“We’re not done yet,” said Gov. Reynolds. “The first bill that I signed into law as Governor was Senate File 512—providing long-term dedicated funding for water quality; and since then, I’ve signed into law a 10-year extension to keep building on Iowa’s strong record of conservation. This additional funding will provide even more cost-share incentives for Iowa's farmers and landowners to accelerate construction of conservation practices and improve water quality.”

Naig Applauds Gov. Reynolds $100M Investment in Water Quality Efforts
Iowa Secretary of Agriculture Mike Naig issued the following statement today following Gov. Kim Reynolds’ announcement of a historic $100 million investment in water infrastructure and water quality efforts for the state of Iowa. Of this, $25 million will be allocated to the Conservation Infrastructure Project at the Iowa Department of Agriculture and Land Stewardship.

“Thank you to Governor Reynolds for her continued support for soil health and water quality practices in Iowa. These additional resources will build on the momentum that’s been achieved with dedicated funding from the Iowa Legislature and Governor Reynolds, and help even more farmers and landowners implement proven conservation practices. Working alongside public and private partners, the state has achieved important conservation milestones in 2021. There are now 110 known water quality wetlands in Iowa, with 40 more under construction. At least 47 saturated buffers and 18 bioreactors have been added to the landscape in 2021, and farmers are now planting more than 2 million acres of cover crops. This new funding will help farmers and landowners add even more conservation practices and continue to make measurable progress toward the goals outlined in the Iowa Nutrient Reduction Strategy.”



United Soybean Board Elects Ralph Lott as New Chair

Farmer-leaders of the soy checkoff elected Ralph Lott from Seneca Falls, New York, as 2022 Chair and 10 other farmer-leaders to serve on the Executive Committee at the United Soybean Board (USB) meeting Dec. 7-9 in St. Charles, Missouri.

“With a productive growing season, favorable soybean prices and increased demand in 2021, amid supply chain constraints, this is an exciting and pivotal time for U.S. Soy, both domestically and internationally. I appreciate the support of my fellow board members, and I am eager to work with them to identify initiatives that grow our markets and bring value back to the farm,” said USB Chair Ralph Lott. “I look forward to continuing the board’s success of making judicious soy checkoff investments in addressing both immediate and long-term supply and demand opportunities and driving resiliency for U.S. soybean farmers.”

The newly elected USB Executive Committee includes:
    Ralph Lott, Chair — New York
    Meagan Kaiser, Vice Chair — Missouri
    Ed Lammers, Secretary — Nebraska
    Steve Reinhard, Treasurer — Ohio
    Tom Oswald — Iowa
    Belinda Burrier — Maryland
    Philip Good — Mississippi
    Kevin Wilson — Indiana
    Gary Berg — Illinois
    Matt Gast — North Dakota
    Dan Farney, Past Chair (Ex Officio) — Illinois

Key successes from 2021 include U.S. soybeans being used as an ingredient in more than 1,000 different products; notably Goodyear Tire & Rubber Company announced a new sustainable soybean oil procurement policy increasing market potential for soybeans. In addition, a checkoff-funded rural broadband report led to 15 recommendations for delivering high-speed internet needed by farmers and rural communities. One hundred million metric tons of U.S. Soy Sustainability Assurance Protocol verified soy shipped internationally, and domestically, the USDA Dietary Guidelines highlighted the inclusion of soy products across the dairy, oils, vegetables and protein categories. This is on top of record export volume for the 2020/21 marketing year, as a result of strategic efforts to diversify international markets.

“Generations of U.S. soybean farmers will benefit from this progress and investment decisions made by the checkoff’s volunteer farmer-leaders,” said Polly Ruhland, USB CEO. “The foresight of this board is reflected in their collective efforts to continue mapping a production and delivery path for sustainable U.S. soybeans globally on behalf of over 515,000 U.S. soybean farmers.”

The mission of the soy checkoff is to create value for U.S. soybean farmers by investing in research, education and promotion of U.S. soybeans. Research and promotion projects are implemented by USB with oversight from USDA Agricultural Marketing Service.

Since 1991, when the soy checkoff began working on behalf of U.S. soybean farmers, it’s provided significant return on investment by leveraging partnerships that increase the value and preference for U.S. soybeans. The latest mandatory five-year independent economic evaluation, conducted in 2019, found that U.S. soybean farmers received an estimated $12.34 in added value for every dollar they invested in the checkoff.

“In reflecting over this past year, I’m proud to see our checkoff contributions giving U.S. farmers more opportunities to deliver high-quality soy to a growing base of customers here and abroad,” said USB Past Chair Dan Farney. “I am honored and humbled to have served as Chair, and I look forward to working with our new leadership.”

Visit unitedsoybean.org to learn about key investments made on behalf of soybean farmers.



USGC 2021 Corn Harvest Quality Report: Higher Average Test Weight, Lower Moisture And Damage

The U.S. Grains Council (USGC) released this week the 2021/2022 Corn Harvest Quality Report based on 610 samples taken from defined areas within 12 of the top corn-producing and exporting states that revealed this year’s U.S. corn crop has a higher average test weight and lower total damage and stress cracks compared with the previous five crops.

The 2021 crop was planted earlier than average and experienced a mostly warm growing season resulting in projections that it will be the second-largest U.S. corn crop on record at 281.49 million metric tons (15,019 million bushels). This ample supply allows the United States to remain the world’s leading corn exporter and accounts for an estimated 31.4 percent of global corn exports during the marketing year.

“The Council’s mission is one of developing markets, enabling trade and improving lives, and as part of our mission, we are pleased to offer this report as a service to our trading partners around the world,” said USGC Chairman Chad Willis. “We are confident in the quality of this year’s crop and hope this report provides timely insight into the specifics of it.”

The 11th edition of the report showed the 2021 crop was planted earlier than average and experienced a mostly warm growing season. Overall, 65 percent of the crop rated as good or excellent condition, nearing record high yields.

The average aggregate quality of the representative samples tested was better than the grade factor requirements for U.S. No. 1 grade. The report also showed that 90 percent of the samples met the grade factor requirements for U.S. No. 1 grade and 98 percent met the grade factor requirements for U.S. No. 2.

This year’s crop highlights lower average broken corn and foreign material (BCFM) than the five-year average; lower average total damage than the five-year average; and a similar average moisture content compared to the five-year average. The crop also showed lower-than-average protein concentration than the five-year average; lower average stress cracks than 2020 and the five-year average; and a similar average 100-kernel weight compared to the five-year average.

Nearly 99 percent of the samples tested below the U.S. Food and Drug Administration (FDA) action level for aflatoxins. A full 100 percent of the samples tested below the 5.0 parts per million FDA advisory level for deoxynivalenol (DON) or vomitoxin. Of the samples tested for fumonisin, 97.2 percent tested below the FDA’s strictest guidance level of 5.0 parts per million.

The 2021/2022 U.S. corn crop is expected to be the second largest (382.6 million metric tons/15,062 million bushels) on record and has the highest average yield on record (11.11 metric tons/hectare or 177 bushels per acre), according to the U.S. Department of Agriculture (USDA) World Agricultural Supply and Demand Estimate (WASDE).

Rollout events by Council representatives are set to showcase the quality of this year’s crop and answer questions from potential buyers – the first of which will take place virtually in North Asia and include buyers from Japan, Korea and Taiwan. Presentations of the report will continue through the beginning of 2022, aiming to offer participants clear expectations regarding the quality of corn for this marketing year.



Weekly Ethanol Production for 12/3/2021

According to EIA data analyzed by the Renewable Fuels Association for the week ending December 3, ethanol production accelerated by 55,000 barrels per day (b/d), or 5.3%, to a five-week high of 1.090 million b/d, equivalent to 45.78 million gallons daily. Production was 10.0% above the same week last year, which was affected by the pandemic, and 1.7% more than the same week in 2019. The four-week average ethanol production volume increased 1.2% to 1.066 million b/d, equivalent to an annualized rate of 16.34 billion gallons (bg).

Ethanol stocks climbed 0.8% to 20.5 million barrels, the largest reserves since August. Stocks were 7.3% below the year-ago level and 6.2% under the same week in 2019. Inventories built across all regions except the Midwest (PADD 2) and West Coast (PADD 5).
                                                                                                              
The volume of gasoline supplied to the U.S. market, a measure of implied demand, increased 1.9% to 8.96 million b/d (137.40 bg annualized). Gasoline demand was 17.9% above a year ago and 0.9% more than the same week in 2019.

Conversely, refiner/blender net inputs of ethanol slipped 2.4% to a 37-week low of 862,000 b/d, equivalent to 13.21 bg annualized. However, net inputs were 14.2% more than a year ago and 0.5% above the same week in 2019.

There were zero imports of ethanol recorded for the sixth consecutive week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of October 2021.)



USDA to Make Up to $800 Million Available to Provide Economic Relief to Biofuel Producers and Restore Renewable Fuel Markets Hit by the Pandemic

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack today announced that USDA will make up to $800 million available to support biofuel producers and infrastructure. Today’s announcement includes $700 million to provide economic relief to biofuel producers and restore renewable fuel markets affected by the pandemic. The Department will make the funds available through the new Biofuel Producer Program authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Additionally, in the coming months, the Department will make $100 million available to increase significantly the sales and use of higher blends of bioethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products. The Biden-Harris Administration is committed to further growth of the biofuels industry, and the House-passed Build Back Better Act commits additional funding that will provide better market access for farmers and more affordable and cleaner fuels for consumers.

“Under the leadership of President Biden and Vice President Harris, USDA is providing direct relief to the people of rural America who are still reeling from the economic impacts of the pandemic,” Vilsack said. “As we continue to rebuild the nation’s economy, USDA is targeting resources and investments to improve the strength and resiliency of America’s sustainable fuel markets. The relief we’re announcing today will pave the way to economic recovery for America’s biofuel producers, stimulate a critical market for U.S. farmers and ranchers and move the country closer to President Biden’s goal of net-zero carbon emissions by 2050.”

Background on the Biofuel Producer Program
Through the Biofuel Producer Program, USDA will make up to $700 million in direct payments available for biofuel producers who faced unexpected market losses due to the pandemic. USDA will announce the official application window for this program within the coming week.

By making payments to biofuels producers, the program will help agricultural producers maintain and create more viable markets for products that supply biofuel production, such as corn, soybeans, or biomass. Payments will be based on the producer’s market loss volume in 2020, which is calculated by the amount of fuel produced in 2020 in comparison to 2019.

Background on Grants for Biofuels Infrastructure
USDA intends to make up to $100 million available in new funds for grants for biofuels infrastructure, such as blender pumps which ensure biofuels have greater availability in the retail market. The funding will provide grants to refueling and distribution facilities for cost of installation, retrofitting or otherwise upgrading of infrastructure required at a location to ensure the environmentally safe availability of fuel containing bioethanol blends of E-15 and greater or fuel containing biodiesel blends B-20 and greater. USDA will announce the official application window for grants within the coming months.



Nitrogen Fertilizers Lead Pack of Retail Fertilizer Prices Higher at Start of December 2021

Average retail prices for most fertilizers continued to rise at a good clip the first partial week of December 2021, according to sellers surveyed by DTN. Once again, the nitrogen fertilizers maintained their spot as the clear leaders.

Five of the eight major fertilizers recorded a sizable move higher compared to last month. DTN designates a substantial move as anything 5% or more.

Leading the way higher, as it has for several weeks now, was anhydrous, which was up 18% from a month prior. The nitrogen fertilizer's average price was at $1,313 per ton, which continues to be all-time high in the DTN data set.

UAN32 was 9% more expensive compared to last month with the average price at $661/ton, this is also an all-time high. Both UAN28 and urea were 6% higher looking back a month, with UAN28 having an average price of $575/ton and urea at $873/ton, both all-time highs.

10-34-0 was 8% more expensive than it was a month ago. The starter fertilizer had an average price of $756/ton.

Three fertilizers had just slight price increases compared to the prior month. DAP had an average price of $836/ton, MAP $918/ton and potash $777/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.95/lb.N, anhydrous $0.80/lb.N, UAN28 $1.03/lb.N and UAN32 $1.03/lb.N.

Retail fertilizer prices compared to a year ago show all fertilizers have increased significantly, with several fertilizers having well over 100% price increases.  10-34-0 is now 65% more expensive, DAP is 84% higher, MAP is also 84% more expensive, potash is 129% higher, urea is 143% more expensive, UAN32 is 166% higher, UAN28 177% is more expensive and anhydrous is 208% higher compared to last year.



Beef Export Value Shatters Annual Record; Pork Exports Still on Record Pace

October was another strong month for U.S. red meat exports as beef export value continued to soar, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). October pork exports were below last year's large total but year-to-date shipments remained slightly above the record pace of 2020.

"USMEF has always prioritized market diversification, and this is more critical than ever now that the red meat industry faces unprecedented transportation challenges and rising input costs," said President and CEO Dan Halstrom. "Exports will likely reach about $18 billion in 2021, which is a remarkable achievement. While global demand is tremendous and we are cautiously optimistic about further growth in 2022, supply chain pressures are not easy to overcome and are a growing concern for exporters and their international customers."

Broad-based growth puts beef exports on $10 billion pace
Beef exports reached 115,709 metric tons (mt) in October, up 7.5% from a year ago, while export value climbed 48% to $956.9 million – the second-highest total on record, behind August 2021. Through the first 10 months of the year, beef exports totaled 1.19 million mt, up 17% from a year ago. Export value increased 38% to $8.53 billion, surpassing the 2018 record ($8.33 billion) with two months to spare.

U.S. beef exports will top $2 billion this year in each of three key Asian markets – South Korea, Japan and China/Hong Kong. Exports have already surpassed previous annual records in China/Hong Kong and Central America and October exports to Colombia were record-large.

Record shipments to Mexico and Colombia bolster October pork exports
Pork exports totaled 226,206 mt in October, down 7% from a year ago, while export value slipped 3.5% to $618.8 million. For January through October, pork exports were up slightly from a year ago in volume (2.47 million mt) and increased 8% in value ($6.84 billion). Exports to Mexico continued to strengthen in October as shipments reached a new monthly high of 83,929 mt, up 38% from a year ago. January-October exports to Mexico are ahead of the record pace established in 2017, when full-year shipments exceeded 800,000 mt and topped $1.5 billion in value.

Pork exports to Central America and the Dominican Republic continued to shine in October and have already set annual records, while exports to Colombia have rebounded to pre-COVID levels. Although China's demand for pork muscle cuts has softened significantly, it remains a critical, value-adding destination for U.S. pork variety meat.

October lamb export value highest in nearly two years
Fueled by growth in leading market Mexico, as well as in the Caribbean and Singapore, October exports of U.S. lamb totaled 1,075 mt (up 56% from a year ago) and reached $1.95 million in value – also up 56% and the highest since January 2020. Through October, lamb exports increased 8% to 11,020 mt valued at $15.9 million (up 15%).



Four Bills from House Agriculture Committee Pass in the House

Today, four bipartisan bills drafted and moved out of the House Agriculture Committee, H.R. 5290; H.R. 5608; H.R. 5609; and H.R 4489, passed in the House of Representatives.

H.R. 5290 - This bill extends the authorization for Livestock Mandatory Reporting (LMR) through September 30, 2022. It will provide American livestock producers with the certainty that USDA will continue to issue market reports that provide transparency and price discovery.
Lead Sponsor: Chairman David Scott

H.R. 5608- This bill authorizes $70 million annually for FY22-28 for research and management of chronic wasting disease, with the money to be split evenly between research and management, administered by USDA’s Animal and Plant Health Inspection Service (APHIS).
Lead Sponsors: Rep. Ron Kind and Ranking Member Glenn Thompson

H.R. 5609 - This bill directs USDA’s Agricultural Marketing Service (AMS) to establish a contract library for cattle contracts. This will provide cattle producers with more market transparency, by requiring USDA to publish reports on contracts between producers and packers for the sale of fed cattle.
Lead Sponsor: Rep. Dusty Johnson

H.R 4489 - This bill would allow the U.S. Forest Service to retain interest on settlement funds and apply those additional resources to complete necessary restoration work on lands damaged by mining activities and wildfires.
Lead Sponsors: Rep. Kim Schrier and Rep. Doug LaMalfa



Smith Sponsored Bills Pass House

Congressman Adrian Smith (R-NE) released the following statement after the House of Representatives passed the Ocean Shipping Reform Act of 2021 (H.R. 4996) and Cattle Contract Library Act of 2021 (H.R. 5609) today. Smith championed both pieces of legislation.

“The Ocean Shipping Reform Act and Cattle Contract Library Act are crucial to farmers, ranchers, and consumers all across Nebraska,” said Smith. “I applaud the passage of both bills today as they will benefit not only the Third District, but the agriculture industry, and its exports, nationwide. I encourage swift passage as the bills move to the Senate.”

The Cattle Contract Library Act of 2021 offers more transparency to the complex beef market by establishing a library for cattle contracts within the U.S. Department of Agriculture’s Agricultural Marketing Service. Similar to the existing Swine Contract Library, this library would provide cattle producers with useful information from meat packers.

Following the letter Congressman Smith led to the Federal Maritime Commission (FMC) in March that raised the alarm about foreign ocean carriers leaving U.S. ports with empty containers, the Ocean Shipping Reform Act of 2021 would update regulations enforced by the FMC and prohibit ocean carriers from “unreasonably” refusing U.S. exports.



House Passes Two NCBA-Backed Bills on Market Transparency

Today, the U.S. House voted to pass two NCBA-supported pieces of legislation that are critical to providing producers with greater transparency in the cattle markets.

The House voted 418-9 to advance H.R. 5290, introduced by House Agriculture Committee Chairman David Scott (D-GA). This legislation, which was supported by Ranking Member Glenn "G.T." Thompson (R-PA) and unanimously approved by the Committee, would extend authorization for livestock mandatory reporting (LMR) through September 30, 2022.

The authorization for LMR — the most important tool cattle producers have for understanding transactions and trends in the cattle markets — is currently set to expire along with federal funding on February 18, 2022.

By an overwhelming vote of 411-13, the House also passed the Cattle Contract Library Act of 2021. NCBA secured the introduction of this bipartisan legislation in October, led by Rep. Dusty Johnson (R-SD) and Rep. Henry Cuellar (D-TX).

“The fact that House Agriculture Committee Chairman Scott and Ranking Member Thompson have both been vocal champions for LMR reauthorization is yet another indication of the broad-base support this measure has among producers across the country. LMR is absolutely essential to fair, competitive, and transparent cattle markets. We appreciate Chairman Scott's leadership, and the heavy engagement we have seen from both sides of the committee on this issue. We also thank Rep. Johnson and Rep. Cuellar for their work to equip producers with vital market data through a cattle contract library,” said NCBA President Jerry Bohn.

The creation of a cattle contract library and the reauthorization of LMR are both widely supported across the cattle and beef industry. When livestock groups met in Phoenix earlier this year to identify common goals and priorities, those two measures were agreed upon as urgent.

NCBA left that meeting and immediately set to work advancing these proposals. We upheld our commitment to the industry, even when R-CALF changed their tune and refused to support these viable, popular solutions.



Dairy Industry Commends House Passage of Ocean Shipping Reform Act on Wide Bipartisan Vote

Proactive efforts throughout this year led by the U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) to alleviate dairy supply chain disruptions took a significant step forward today with the U.S. House of Representatives passing the bipartisan Ocean Shipping Reform Act of 2021 (OSRA) on an overwhelming bipartisan vote of 364 – 60.

If passed by the Senate and signed into law, the legislation will help alleviate delays and disruptions at U.S. ports that have cost the U.S. dairy industry well over $1 billion this year. American dairy exporters since late 2020 have faced unprecedented challenges in securing shipping container accommodations on ocean vessels while contending with record-high fees and shipping access volatility, most of which has been driven by foreign-owned ocean carriers.

With input from their newly formed Supply Chain Working Group of dairy exporters, USDEC, jointly with NMPF, worked closely with Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), as well as other agricultural partners, in helping to shape the legislation. In addition, a letter from 78 dairy cooperatives, companies and associations sent today reiterated the importance of OSRA to the continued success of U.S. dairy exports.

As the letter noted, “Ocean carriers are shipping empty containers across the Pacific Ocean at record rates of over 70%. Put simply, this is wreaking havoc on U.S. dairy exports, which are important ingredients in supply chains that help feed consumers in Asia and elsewhere. Unfortunately, our global competitors in the European Union and New Zealand are not facing the same level of volatility in supplying those markets which puts U.S. dairy exports at high risk of being displaced for more reliable suppliers… It is critical that Congress pass the Ocean Shipping Reform Act to address this crisis and deliver relief from the supply chain snarls and market failures that are bogging down the export of American-made dairy products.”

USDEC and NMPF were among the first contributors to drafting OSRA. The bill supports key steps to resolve supply-chain obstacles by amending the U.S. Shipping Act to provide new oversight and enforcement authority to the Federal Maritime Commission, expand opportunities for shippers to seek redress from ocean carriers, and increase transparency and accountability among ocean carriers and other parties. The bill specifically would restrain carriers’ ability to deny export shipments, increase the availability of containers, improve protections against retaliation, and better address unfair detention and demurrage charges.

To help ensure that an effective revision to current law can be swiftly enacted, the organizations will continue working to secure a strong Senate version as well. Congressional reform of the Shipping Act is one vital piece to the broader set of steps NMPF and USDEC continue to promote to alleviate the shipping crisis impacting U.S. dairy exporters.

“While dairy exports are on track for a record year in 2021, it is important to consider how much more the United States could have exported without the onslaught of shipping challenges and fees this year has brought,” said Krysta Harden, president and CEO of USDEC. “We worked from the beginning of this year on generating the broad bipartisan support demonstrated today for the Ocean Shipping Reform Act, which shows the urgency of the issue and the need for reform, both to alleviate the short-term congestion and to ensure that the reputation of the United States as a reliable supplier is not further jeopardized. We commend House leadership for taking this critical step to tackle these challenges.”

“NMPF thanks Representatives Garamendi and Johnson for their leadership in working to address the challenges dairy and other agricultural exporters have struggled with for the most of this year,” said Jim Mulhern, president and CEO of NMPF. “The Ocean Shipping Reform Act is an important move toward ensuring the international competitiveness of our dairy producers is not unfairly limited by abuses from ocean carriers. We look forward to working with the Senate to carry this momentum forward. Given the complexity of the export shipping crisis, we also encourage the Administration to continue to take steps within its existing authority to alleviate the challenges facing dairy exporters.”  

USDEC, together with NMPF and their joint Supply Chain Working Group launched in early 2021, continues to urge the importance of strong Senate companion legislation and additional measures to address the challenges plaguing U.S. food and agricultural exporters quickly and fully.



USDA Opens 2022 Signup for Dairy Margin Coverage, Expands Program for Supplemental Production
Program Enhancements Improve Feed Cost Calculations

As part of the Biden-Harris Administration’s ongoing efforts to support dairy farmers and rural communities, today the U.S. Department of Agriculture (USDA) opened signup for the Dairy Margin Coverage (DMC) program and expanded the program to allow dairy producers to better protect their operations by enrolling supplemental production. This signup period – which runs from Dec. 13, 2021 to Feb. 18, 2022 – enables producers to get coverage through this important safety-net program for another year as well as get additional assistance through the new Supplemental DMC.

Supplemental DMC will provide $580 million to better help small- and mid-sized dairy operations that have increased production over the years but were not able to enroll the additional production. Now, they will be able to retroactively receive payments for that supplemental production. Additionally, USDA’s Farm Service Agency (FSA) updated how feed costs are calculated, which will make the program more reflective of actual dairy producer expenses.

“Dairy Margin Coverage is a critical safety-net for producers, and catastrophic coverage is free. These DMC updates build on other efforts of the Biden-Harris Administration to improve DMC and other key USDA dairy programs,” Under Secretary for Farm Production and Conservation Robert Bonnie said. “We encourage dairy producers to make use of the support provided by enrolling in supplemental coverage and enroll in DMC for the 2022 program year.”

Supplemental DMC Enrollment
Eligible dairy operations with less than 5 million pounds of established production history may enroll supplemental pounds based upon a formula using 2019 actual milk marketings, which will result in additional payments. Producers will be required to provide FSA with their 2019 Milk Marketing Statement.

Supplemental DMC coverage is applicable to calendar years 2021, 2022 and 2023. Participating dairy operations with supplemental production may receive retroactive supplemental payments for 2021 in addition to payments based on their established production history.

Supplemental DMC will require a revision to a producer’s 2021 DMC contract and must occur before enrollment in DMC for the 2022 program year. Producers will be able to revise 2021 DMC contracts and then apply for 2022 DMC by contacting their local USDA Service Center.

DMC 2022 Enrollment
After making any revisions to 2021 DMC contracts for Supplemental DMC, producers can sign up for 2022 coverage. DMC provides eligible dairy producers with risk management coverage that pays producers when the difference between the price of milk and the cost of feed falls below a certain level. So far in 2021, DMC payments have triggered for January through October for more than $1.0 billion.

For DMC enrollment, producers must certify with FSA that the operation is commercially marketing milk, sign all required forms and pay the $100 administrative fee. The fee is waived for farmers who are considered limited resource, beginning, socially disadvantaged, or a military veteran. To determine the appropriate level of DMC coverage for a specific dairy operation, producers can use the online dairy decision tool.

Updates to Feed Costs
USDA is also changing the DMC feed cost formula to better reflect the actual cost dairy farmers pay for high-quality alfalfa hay. FSA will calculate payments using 100% premium alfalfa hay rather than 50%. The amended feed cost formula will make DMC payments more reflective of actual dairy producer expenses.

Additional Dairy Assistance
Today’s announcement is part of a broader package to help the dairy industry respond to the pandemic and other challenges. USDA is also amending Dairy Indemnity Payment Program (DIPP) regulations to add provisions for the indemnification of cows that are likely to be not marketable for longer durations, as a result, for example, of per- and polyfluoroalkyl substances. FSA also worked closely with USDA's Natural Resources Conservation Service to target assistance through the Environmental Quality Incentives Program ) and other conservation programs to help producers safely dispose of and address resource concerns created by affected cows. Other recent dairy announcements include $350 million through the Pandemic Market Volatility Assistance Program and $400 million for the Dairy Donation Program.



DMC Signup to Begin; USDA, Congress Thanked for NMPF-Backed Improvements

The National Milk Producers Federation (NMPF) is urging farmers to sign up for maximum coverage in 2022 under the Dairy Margin Coverage (DMC) program, which USDA today announced will open for enrollment from Monday, Dec. 13, through Feb. 18. This year’s DMC signup is accompanied by new enhancements that make the program even more valuable for producers seeking protection against unforeseen market risks.
 
“Signing up for DMC, which offers cost-effective margin protection for small and medium-sized producers as well as inexpensive catastrophic coverage for larger dairies, is a no-brainer for 2022, especially considering the improvements we fought for in Congress and advocated for at USDA,” said Jim Mulhern, president and CEO of NMPF. “This year has illustrated just how valuable this program is for those producers that can take advantage of it, and DMC will once again be an essential part of many farmers’ risk management in the coming year. We thank Congress and USDA for making the program stronger and helping dairy farmers in challenging times.”

DMC is part of a suite of federally backed risk-management tools, including the Dairy Revenue Protection (DRP) program and the Livestock Gross Margin for Dairy Producers (LGM-Dairy) program, which were revamped in the 2018 Farm Bill at NMPF’s urging. DMC resulted from NMPF’s effort to improve inadequate federal margin-protection insurance. LGM-Dairy and DRP were made workable via NMPF’s efforts to remove spending caps and a ban on enrollment in multiple programs, which previously limited their usefulness.

More than $1.1 billion – a record – in DMC payments are expected to be distributed to dairy producers under the 2021 program, according to USDA data as of Dec. 6.

While DMC in 2022 will fully incorporate the premium-quality alfalfa price into the DMC feed cost formula, an improvement from the current structure that uses a 50-50 blend between the premium-quality price and the regular price, USDA will make retroactive payments to producers to January 2020. Meanwhile, the new Supplemental Dairy Margin Coverage program will enable some producers who are also enrolled in DMC to receive additional payments reflecting increases in their production since 2014 retroactively to January 2021.



Bayer to launch Project Carbonview, an industry-first digital carbon footprint measurement solution for agriculture

Today, Bayer, Bushel and Amazon Web Services (AWS) unveiled Project Carbonview. This has been conceptualized by Bayer and developed in collaboration with Bushel and AWS. It is a first-of-its-kind technology solution that will help farmers in the United States drive more sustainable supply chains and mitigate the impact agriculture has on the environment by aggregating the carbon footprint of end products. Project Carbonview is the latest example of Bayer’s unique focus on connecting the farmer more deeply into the value chain to better capture their carbon contribution and drive the entire value chain to net-zero carbon emissions. Through this solution, farmers are empowered to connect to more sustainable supply chains that benefit their farming operations while minimizing carbon emissions.

Beginning as a pilot program, Project Carbonview is focused on creating awareness and acceptance for low-carbon fuel markets. Eligible farmers who enroll in the pilot will receive compensation for participation. Ultimately, once these markets are broadly established, we anticipate growers will be compensated based on the implementation of sustainable farming practices and will share in the financial incentives created by low-carbon fuel markets.

Project Carbonview focused on the United States will initially enable U.S. ethanol producers (corn is a key ingredient in ethanol production) to track carbon emissions across the entire supply chain – from planting through production – and implement more sustainable business practices by providing the data needed to make more informed purchasing decisions and reduce their carbon emissions. For farmers who opt into the program, Project Carbonview streamlines on-farm data collection with Bayer's Climate FieldView™ application and connects it with delivery and transportation data captured from the 54,000 U.S. active users of Bushel's platform. Through the Climate FieldView™ platform, farmers continue to own their data and choose who to share their data with.

Project Carbonview, which is built on AWS, allows permissioned access to on-demand product transaction and crop exchange market data from the ethanol production facilities through the Bushel platform to evaluate the carbon impact of sourcing and purchasing decisions.

“We are very excited to launch a solution to help transform the food and agriculture value chain by paving the way for a more resilient, regenerative and net-zero carbon future,” said Leo Bastos, Global Commercial Ecosystems Lead, Bayer Crop Science. “While FieldView™ helps farmers make more informed decisions on their own operations, Project Carbonview will make it possible for them to drive sustainability improvements across the entire value chain. The integration of our leading digital and data science under Project Carbonview will give farmers greater choice and resources to be compensated for more productive and sustainable decisions on-farm.”

As part of a recent pilot, Project Carbonview identified opportunities to optimize supply chain partners to reduce Scope 3 - or downstream supply chain - emissions in a single year. For farmers, Project Carbonview provides another option for them to participate in and capture value from these evolving markets. This new solution marks the latest development by Bayer – who is working to build a portfolio of farmer-facing programs to complement its existing Bayer Carbon Initiative, a program which incentivizes the adoption of climate-smart practices, creating new revenue streams for growers who use technology to keep carbon in the soil – and out of the atmosphere.

“Project Carbonview gives grain buyers and producers visibility into the carbon impact of production so they can evaluate the impact of different agronomic practices, make sustainability improvements and help their customers make better purchasing decisions,” said Elizabeth Fastiggi, Head of Worldwide Business Development for Agriculture, AWS. “We supported Bayer by working backwards from their vision, to ensure Project Carbonview has the potential to be successfully adopted at scale within the current business operations of producers.”

“Project Carbonview makes it easy for producers and processors to share information. Through our relationship with Bayer and support of AWS, we can empower and incentivize sustainable behavior across the agricultural value chain and build a scalable digital solution that can be deployed anywhere,” said Jake Joraanstad, co-founder and CEO of Bushel.

The team behind Project Carbonview is piloting the solution with U.S. corn producers during the 2022 season and plans to expand the program in the future to other global regions and other feed grains, food grains and oilseeds such as soybeans. Within the pilot, the team is exploring how Project Carbonview can assist ethanol producers to capture the impact of corn production within their emissions reporting, as well as opportunities for users to share best practices for achieving emissions benchmarks within a dedicated community.