Wednesday November 02 Ag News

LENRD Groundwater allocations approved for 2023

The Lower Elkhorn Natural Resources District (LENRD) drew a crowd for their October board meeting to hear discussions about possible groundwater use restrictions for next year.  Because the district continues to be in a D3 & D4 drought, as determined by the U.S. Drought Monitor, the board must make decisions by November 1st about any limited use of water for the following year, according to the LENRD’s drought management plan.

The board approved the recommendations presented at their October meeting, by the Ad-Hoc Drought Response Committee, to limit the amount of groundwater use in 2023.  The decision will limit municipal water supply wells to 250 gallons per day per capita for any city or town in a D3 or D4 designation, while irrigation wells (that do not already have an allocation) will be limited to 15 inches per acre for each certified irrigated acre, for any well located in a designated D3 or D4 area.  Municipalities will also be required to adopt a plan for water conservation practices and water use restrictions and provide a copy to the LENRD by March 1st, 2023.

Chad Korth, LENRD director from Meadow Grove, said, “We wanted everybody involved in our discussions, not just agriculture.  That’s why the municipalities are included, we’re all in this together.  The idea is to preserve this water for the next generation.”

Mike Sousek, LENRD general manager, said, “The decision from the board to impose allocations for next year is in response to the responsibility to protect the health and welfare of the public during a drought, but it’s also the first step in the plan to minimize negative impacts to groundwater supplies.  If it doesn’t rain, we have to be prepared, not only for next year, but for the year or two following.  We are being proactive.  We have to prepare for the worst and help producers plan for a possible shortage of water in year 2 or 3 of the drought.”  Sousek added, “Of course, if drought conditions are downgraded to a D2 designation for 14 consecutive days, all restrictions will be lifted.”

The district also made the decision to forego the consideration of requests for new uses of groundwater for irrigation.  Sousek said, “This will allow for the completion of previously approved projects and to monitor and assess impacts to groundwater supplies for all users.”

In other action, the board directed staff to contact producers whose irrigation wells have exceeded the annual allocation for groundwater uses for 2022, as outlined in the LENRD’s conditions for approval policy for new irrigation wells.  Violators could receive a penalty that would reduce their allocation for the next 2 years.  Public hearings will be held with the board on each individual case.

To learn more about the 12 responsibilities of Nebraska’s NRDs and how your local district can work with you and your community to protect your natural resources, visit lenrd.org and sign up for our monthly emails.  The next board of directors committee meeting will be Thursday, November 10th at the LENRD office in Norfolk at 7:00 p.m. and on Facebook Live.



Webinar: Hunting Leases and Legal Considerations
Jessica Groskopf, Extension Agricultural Economist, UNL
Dave Aiken, Ag Law and Water Law Specialist, UNL
Nov 3, 2022 12:00 PM Central Time

According to Nebraska Game and Parks, 97% of the land in Nebraska is privately owned. Therefore, obtaining access to private lands is one of the biggest challenges facing today’s hunters. Leasing the hunting rights of agricultural land can generate additional income for landowners. However, some landowners are hesitant given the potential liability. In this webinar, Extension Educator Jessica Groskopf and Ag Law Specialist Dave Aiken will cover Nebraska recreation and agrotourism laws and review ways to mitigate liability. They will also discuss working with multiple tenants and developing hunting lease agreements.

The webinar is presented by the Center for Agricultural Profitability at the University of Nebraska.  You can get more information and register at cap.unl.edu/webinars.  



Biden-Harris Administration Announces $20.6 Million to Increase and Expand Meat and Poultry Processing Capacity in Nebraska
Three grants approved for Iowa Companies

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack today announced that the Biden-Harris Administration is investing $20.6 million in 2 grant projects in Nebraska through the first round of the Meat and Poultry Processing Expansion Program (MPPEP). Today’s announcement delivers on President Biden’s commitments to expand meat and poultry processing capacity, which in turn increases competition, supports producer income, strengthens the food supply chain, and creates jobs and economic opportunities in rural areas.  These announcements support the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.

“Since President Biden laid out a commitment at the start of this year, USDA has worked tirelessly to give farmers and ranchers a fair chance to compete in the marketplace,” said Secretary of Agriculture Tom Vilsack. “By jumpstarting independent processing projects and increasing processing capacity, these investments create more opportunities for farmers and ranchers to get a fair price, while strengthening supply chains, delivering more food produced closer to home for families, expanding economic opportunity and creating jobs in rural America.”

In Nebraska, two projects are receiving funding from the Meat and Poultry Processing Expansion Program:
    The Greater Omaha Packing Company of Omaha, NE is receiving $19,982,400 from MPPEP. Greater Omaha Packing is a 3rd generation, privately owned company that procures cattle primarily from independent producers in IA and NE. They process 2,400 heads of cattle daily for customers across the country and to 70 nations worldwide. The company is taking a phased approach to increase slaughter and processing throughput from 2,400 cattle per day to 3,100 head per day, which equates to an additional annual production of 195,000 cattle per year, involving equipment purchases, automation systems, and facility improvements. The expansion will create 275 jobs.

    Lot 279, LLC of Wisner, NE is receiving $688,011 from MPPEP. Lot 279, LLC has been selling beef products in direct-to-consumer retail since 2016. In an effort to capitalize on the expanding interest in family farms building their own beef brands, Lot 279 intends to build a federal inspection portion cutting and further processing facility for use by at least three family-owned cattle producers who seek to create their own brands of value-added beef products. The company will provide fee based processing and other services; portioning and grinding services, processing, and manufacturing of meats for sale to wholesale or retail customers. Lot 279 will ensure that small and mid-sized kill facilities are fully utilized.

Iowa:
Cherokee Locker Investment Inc. - $542,425
Cherokee Locker Investment, Inc. is an existing meat processor located in Cherokee, IA located in a facility that is outdated. The company intends to build a new mixed species processing facility to significantly increase capacity and allow local producers to have their meat Federally inspected and sold in a local retail market and online. In addition to these Federal funds, part of this expansion effort is being financed, in part, through investments made by local livestock producers and community members.

Pure Prairie Farms Inc. - $6,963,725
Pure Prairie recently purchased a shuttered poultry plant in Charles City, Iowa, with the goal of returning hundreds of jobs to the small rural community and increasing poultry processing in the upper Midwest. The project sources directly from growers in Minnesota, Wisconsin, and Iowa, who are also shareholders and part owners in the company

Upper Iowa Beef LLC - $8,871,440
Upper Iowa Beef, an independently owned beef harvest and processing facility in Lime Springs, Iowa, opened in 2017. The growth in demand for our products nationwide and globally since we began operations has necessitated an aggressive, multi-phase expansion of our facility to keep up. Our USDA-MPPEP proposal is to support core projects that directly target our current bottlenecks, allowing us to expand our capacity by over 50% and create dozens of new jobs and millions of dollars in premium revenue for independent livestock producers

MPPEP was designed to support capacity expansion projects in concert with other private and public finance tools. Today’s announcement is the first round of funding made available through Phase I of MPEPP. Additional announcements are expected in the coming weeks. USDA will soon begin taking applications for a new phase to deploy an additional $225 million, for a total of up to $375 million, to provide gap financing for independent processing plant projects that fill a demonstrated need for more diversified processing capacity.



Bacon Announces Approval of Nearly $20 Million Grant to Omaha Packing Plant

Rep. Don Bacon (NE-02) today announced that the Greater Omaha Packing Co., Inc. has been awarded a $19,982,400 grant under the Meat and Poultry Expansion Program (MPPEP). As the Second District's Representative and a Member of the House Agriculture Committee (HAC), Bacon has long advocated for Nebraska’s food and agriculture community. He sent a strong letter in support urging approval of the grant to the USDA MPPEP Grant reviewers.

“This USDA-MPPEP grant will help the company process millions more pounds of meat every year – increasing their capacity by 25% over the next few years,” wrote Bacon, in the letter. “Their investments in cold storage, food processing equipment, and growing their labor force will have positive effects across our state and the entire region.”

He continued to tout the project’s benefits in the letter, by writing, “The potential Investment in Greater Omaha Packing’s expansion could help diversify opportunities for meat production in the United States, create new jobs, and expand opportunities for independent livestock producers.”

“Congratulations to Greater Omaha Packing, a key contributor to the meat processing supply chain,” said Bacon. “This is a great opportunity for them which is why I urged approval of the grant.”



USDA Announces Funds to Expand Processing Capacity Following NCBA Advocacy

Today, the National Cattlemen’s Beef Association commended the U.S. Department of Agriculture (USDA) following Secretary Tom Vilsack’s announcement of over $223 million in grants and loans to support small to mid-sized processing facilities.

“NCBA has long advocated for expanded processing capacity to provide cattle producers with additional options for turning their cattle into high-quality beef. Today, the cattle industry needs more targeted capacity in high-need areas, and we look forward to these facilities launching and expanding operations,” said NCBA Senior Director of Government Affairs Tanner Beymer. “We appreciate USDA working with NCBA to strengthen the marketplace and support America’s cattle producers.”

Today’s announcement is the first round of investments in additional meat processing capacity totaling $73 million across 21 grant projects. NCBA has advocated for funds in the form of grants and low-interest loans to help small and mid-sized processing facilities open their doors and expand existing capabilities, all to increase competition and strengthen the beef supply chain. In total, the federal government has announced a combined investment of $1 billion allocated to the Meat and Poultry Processing Expansion Program, workforce development, and technical assistance.



NFU Applauds Rollout of USDA Funds for Local Meat Processing

National Farmers Union (NFU) President Rob Larew released the following statement in response to the United States Department of Agriculture (USDA) announcing major investments in local and regional meat and poultry processing around the country.

“For decades, consolidation in meat processing has put the squeeze on farmers, ranchers, and consumers while corporate monopolies rake in record profits. Today’s announcement is another step toward putting control and profitability back in the hands of farmers, ranchers, and our communities,” said NFU President Rob Larew. “More competition across the ag economy is a good thing and it’s great to see Secretary Vilsack and the administration making diversified, local and regional food systems a priority.”

NFU has advocated for fairer, more competitive markets for farmers and ranchers, and more access to local and regional processing has been a key piece in the Fairness for Farmers campaign that was launched in 2021.  



Farm Equipment Manufacturers Elect New Leaders

The Board of Directors of the Farm Equipment Manufacturers Association elected officers at a meeting in Orlando, FL on Wednesday.

Leading the Association as president will be Ben Hellbusch, Co-Owner of Duo Lift Manufacturing in Columbus, Neb. The company designs and manufactures trailers and running gears for agricultural, commercial, and industrial markets in a number of standard and custom models. Hellbusch is the second executive from the company to be elected president.

The Board elected Hellbusch to a one-year term beginning immediately. He succeeds Tim Burenga of Worksaver Inc. in Litchfield, Ill. Serving with Hellbusch will be:

First Vice President Randy Reinke, CEO of Custom Products of Litchfield, Inc., in Litchfield, Minn.

Second Vice President, Craig Harthoorn, President of H&S Manufacturing in Marshfield, Wis.

Treasurer Paul Jeffrey, General Manager at Mac Don Industries, Ltd. In Kansas City, Mo.

Secretary, Mark Ivey, Vice President at Dirt Dog Manufacturers in Selma, Ala.

The officers will lead a 16-member Board of Directors. The Association serves as voice, advocate, and resource for companies from each link in the farm implement supply chain.



Rotational Grazing Adoption by Cow-Calf Operations

A report issued by USDA’s Economic Research Service, Rotational Grazing Adoption by Cow-Calf Operations, presents one of the first nationally representative datasets that describes rotational grazing systems and variation in the adoption of rotational grazing for cow-calf operations.

Rotational grazing is a management practice in which livestock are cycled through multiple fenced grazing areas (paddocks) in order to manage forage production, forage quality, animal health, and environmental quality. Despite the breadth of support for rotational grazing, only limited information is available on its prevalence and the variation in how producers implement the practice.

Key findings include:
    About 40 percent of cow-calf operations use rotational grazing, but less than half of those are under intensive systems.
    Rotational grazing is most common in the Northern Plains/Western Corn Belt and Appalachian regions.
    Most basic rotational grazing systems are relatively simple, with five or fewer paddocks, an average paddock size of 40 acres or more and use permanent fencing.

This study fills this information gap by providing details on how frequently or “intensively” grazing operations rotate livestock between paddocks, key system characteristics such as average paddock size, and how outcomes such as stocking density and cost relate to system characteristics.



CHS Reports Strong Fiscal Year 2022 Earnings

CHS Inc., the nation's leading agribusiness cooperative, today reported net income of $1.7 billion for the fiscal year ended Aug. 31, 2022, compared to $554.0 million for fiscal year 2021.

Key financial drivers for fiscal year 2022 results include:
    Consolidated revenues of $47.8 billion for fiscal year 2022 compared to $38.4 billion for fiscal year 2021, a year-over-year increase of 24%.
    Refining margins in our Energy segment were higher and drove improved earnings due to the tightening global supply and demand landscape.
    The CHS global grain and processing and wholesale agronomy businesses within our Ag segment benefited from strong global demand and increased margins.
    Our equity method investments performed well, with increased CF Nitrogen earnings resulting from strong global demand for urea and urea ammonium nitrate (UAN), coupled with decreased global supply.

"We appreciate the support of our member cooperatives and farmer-owners, which enabled us to deliver a substantial increase in earnings for the fiscal year, while also helping feed people around the world," said Jay Debertin, president and CEO of CHS Inc. "Additionally, our employees demonstrated their dedication to helping our owners and customers succeed in a turbulent year for agriculture. As a result of these collective efforts, CHS intends to return $1 billion in cash patronage and equity redemptions to our member cooperatives and farmer-owners in fiscal year 2023, reflecting the company's financial strength and demonstrating the value of cooperative ownership.

"We are proud of our role in the cooperative system. We will continue to make investments that strengthen rural America and help our farmer-owners and customers meet the growing demand for agricultural products. Our investments in infrastructure, supply chain capabilities, people and innovation are driving operational and efficiency gains throughout our expansive network," Debertin added. "Although economic uncertainty, logistical challenges and inflationary pressures remain, CHS is well-positioned to maximize value for our member cooperatives and farmer-owners."

Fiscal Year 2022 Business Segment Results

Energy
Pretax earnings of $616.6 million represent a $627.1 million increase versus the prior year and reflect:
    Higher refining margins and increased discounts on heavy Canadian crude oil processed by our refineries contributed to a significant increase in our refined fuels business income; these increases were partially offset by higher renewable energy credit costs and higher natural gas costs, as well as lower margins in our propane business.

Ag
Pretax earnings of $657.6 million represent a $359.5 million increase versus the prior year and reflect:
    Increased margins across all our Ag segment product categories, due to strong global market demand and global supply disruptions
    Continued favorable markets for oilseed processing, which were bolstered by robust meal and oil demand
    Increased revenues from feed and farm supplies, despite less favorable weather during spring planting and application season

Nitrogen Production
Pretax earnings of $478.0 million represent a $357.0 million increase versus the prior year and reflect:
    Increased earnings from our strategic investment in CF Nitrogen, primarily due to market conditions and strong demand for urea and UAN, factors that were partially offset by higher natural gas costs

Corporate and Other
Pretax earnings of $57.9 million represent a $48.9 million decrease versus the prior year and reflect:
    Lower earnings primarily from our Ventura Foods joint venture, which experienced less favorable market conditions for edible oils

CHS Inc. (www.chsinc.com) is a leading global agribusiness owned by farmers, ranchers and cooperatives across the United States. Diversified in energy, agronomy, grains and foods, CHS is committed to creating connections to empower agriculture, helping its farmer-owners, customers and other stakeholders grow their businesses through its domestic and global operations. CHS supplies energy, crop nutrients, seed, crop protection products, grain marketing services, production and agricultural services, animal nutrition products, foods and food ingredients, and risk management services. The company operates petroleum refineries and pipelines and manufactures, markets and distributes Cenex® brand refined fuels, lubricants, propane and renewable energy products.



Most Fertilizer Prices Continue Lower

Retail fertilizer prices continued their lower trend as five of the eight major products are cheaper compared to last month, according to locations tracked by DTN for the fourth week of October 2022.

Similar to last week, the only fertilizer up or down significantly was 10-34-0. DTN designates a significant move as anything 5% or more. 10-34-0 was 12% lower compared to the prior month, and the starter fertilizer had an average price of $759 per ton. Four other fertilizers were just slightly lower. DAP had an average price of $930/ton, MAP $986/ton, potash $862/ton and UAN28 $580/ton.

The remaining three fertilizers were slightly more expensive looking back to last month. Urea had an average price of $827/ton, anhydrous $1,422/ton and UAN32 $678/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.90/lb.N, anhydrous $0.87/lb.N, UAN28 $1.04/lb.N and UAN32 $1.06/lb.N.

Despite lower prices in recent months, all fertilizers continue to be considerably higher in price than one year earlier. Urea is 10% higher, MAP is 13% more expensive, 10-34-0 is 14% higher, DAP is 15% more expensive, potash is 18% higher, UAN28 is 27% more expensive, UAN32 is 30% higher and anhydrous is 45% more expensive compared to last year.



Weekly Ethanol Production for 10/28/2022

According to EIA data analyzed by the Renewable Fuels Association for the week ending October 28, ethanol production rose 0.7% to a 13-week high of 1.040 million b/d, equivalent to 43.68 million gallons daily. However, production was 6.1% less than the same week last year and 0.1% below the five-year average for the week. The four-week average ethanol production volume increased 3.9% to 1.005 million b/d, equivalent to an annualized rate of 15.41 billion gallons (bg).

Ethanol stocks tapered by 0.3% to 22.2 million barrels. Yet, stocks were 10.4% higher than a year ago and 4.7% above the five-year average. Inventories thinned in the East Coast (PADD 1) and Gulf Coast (PADD 3) but built across the other regions.

The volume of gasoline supplied to the U.S. market, a measure of implied demand, shrank 3.0% to 8.66 million b/d (132.76 bg annualized). Demand was 8.9% less than a year ago and 5.0% below the five-year average.

Refiner/blender net inputs of ethanol declined 1.1% to 905,000 b/d, equivalent to 13.87 bg annualized. Net inputs were 0.3% higher than a year ago and 0.8% above the five-year average.

There were no imports of ethanol for the second consecutive week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of August 2022.)



Biofuel & Ag Leaders Praise EPA’s Decision to Reverse Refinery Exemptions

Yesterday, the Renewable Fuels Association, Growth Energy, the American Coalition for Ethanol and National Farmers Union filed a motion to intervene in the D.C. Circuit Court of Appeals in support of the U.S. Environmental Protection Agency’s decision to deny 69 petitions from refineries seeking small refinery exemptions (SREs) from the Renewable Fuel Standard (RFS) program for one or more of the compliance years between 2016 and 2021.

“EPA’s decision in June to deny 69 SRE petitions helped strengthen U.S. energy security, protect the climate, and deliver relief at the pump during a period of record high gas prices,” the biofuel and ag coalition said. “Now, certain refiners want to reverse this process and turn back the clock to an era of gross mismanagement and abuse of the SRE provisions of the RFS program. For far too long, many refiners got away with dodging their obligations to blend lower-carbon biofuel into the fuel supply. EPA’s denial of these SRE petitions provides a clean slate to get the RFS back on track as we head into a new era for this important program. Holding refiners accountable will ensure lower prices and cleaner options at the pump for American families.”

Background
On June 3, 2022, concurrent with its final rulemaking to set the volumes for the 2020, 2021 and 2022 renewable volume obligations, EPA announced the denial of 69 petitions from refineries seeking exemptions from the RFS program for one or more compliance years between 2016 and 2021. Along with the April 2022 denial of petitions for RFS SREs, these denials apply EPA’s current interpretation of the Clean Air Act SRE provisions, consistent with a U.S. Court of Appeals for the Tenth Circuit holding in Renewable Fuels Association et al. v. EPA.



USDA Announces United Sorghum Checkoff Program Board Appointments

The U.S. Department of Agriculture (USDA) announced the appointment of four members to serve on the United Sorghum Checkoff Program’s Board of Directors. All four appointees will serve three-year terms starting December 2022 and ending December 2025.

According to the USDA press release, the sorghum farmers appointed to the board are:
    Jeffry D. Zortman, Fowler, Kansas, Kansas Member
    Kendall Hodgson, Little River, Kansas, Kansas Member
    Joshua Birdwell, Malone, Texas, Texas Member
    Zachary Rendel, Miami, Oklahoma, Oklahoma Member

The 13-member United Sorghum Checkoff Program Board is composed of nine sorghum farmers who represent the three states with the largest sorghum production – Kansas, Oklahoma, and Texas – and four at-large national representatives. More information about the board is available on the Agricultural Marketing Service (AMS) United Sorghum Checkoff Program webpage and on the board’s website, sorghumcheckoff.com.