Buffett to Discuss Ag Industry's Role in Global Food Security
According to Howard G. Buffett, "There's no reason we can't put hunger out of business." Buffett, a renowned philanthropist and author of 40 Chances: Finding Hope in a Hungry World, will be the keynote speaker at the U.S. Grains Council's 54th Annual Board of Delegates Meeting in Omaha, Nebraska, on July 28-30.
Buffett will delve into his foundation's commitment to agricultural improvement as a key means of improving the standard of living and global food security for the world's most impoverished and marginalized populations. The foundation focuses on three core areas related to agricultural production: food security, water security, and conflict mitigation.
"The growing global population challenges agricultural producers around the world to produce more with less," said USGC Chairman Julius Schaaf. "This population growth offers exciting opportunities but also comes with daunting challenges for our industry. Attendees should gain a refreshed perspective from Buffett on agriculture's role in the fight to end world hunger."
An Omaha native, Buffett has been active in agriculture, business, conservation, philanthropy, photography and politics. Currently, he spends the majority of his time managing his foundation.
He oversees a 1,500-acre family farm in central Illinois and farms in Nebraska with his son. He also manages three foundation-operated research farms: more than 1,525 acres in Arizona, 4,400 acres in Illinois, and 9,200 acres in South Africa.
"Buffett's background in agriculture and his foundation's work to develop agricultural resources in the most vulnerable and under-resourced communities gives him a unique perspective on global food security," Schaaf said. "His insights into improving global food security will be invaluable."
Register for the Council's annual meeting at www.grains.org/.
Aventine Starts Sugar Ethanol
Aventine Renewable Energy Inc. said in a news release Thursday it shipped its first railcar of ethanol produced at its Aurora West facility in Aurora, Neb., a 113 million gallon per year plant, using sugar-based only feedstock.
"This marks an important milestone in Aventine's continuing story of innovation and demonstrates our leadership in the ethanol industry," said Mark Beemer, Aventine's president and CEO.
The company has hired 52 employees to date, and expects to hire 18 more in the next two months, for an annualized payroll of $4.6 million.
"We have already injected $10.6 million into the local Aurora economy through expenditures on operational needs," said Beemer.
Aventine Renewable Energy, based in Pekin, Ill., is a producer and marketer of industrial and fuel ethanol and related co-products, including corn gluten feed and meal, corn germ, condensed corn distillers grain, corn oils and yeast.
NRCS and partners usher in a new era in conservation
Agriculture Secretary Tom Vilsack has announced the launch of what he calls “a new era in American conservation efforts” with a historic focus on public-private partnership.
“This is an entirely new approach to conservation,” Vilsack said. “We’re giving private companies, local communities and other non-government partners a way to invest in what are essentially clean water start-up operations.”
The new conservation program, called the Regional Conservation Partnership Program (RCPP), was authorized in the 2014 Farm Bill and will benefit areas all across the nation. The RCPP will competitively award funds to conservation projects designed by local partners specifically for their region.
Eligible partners include private companies, universities, non-profit organizations, local and tribal governments and others joining with agricultural and conservation organizations and producers to invest money, manpower and materials to their proposed initiatives. The USDA’s Natural Resources Conservation Service (NRCS) will be accepting pre-proposals from all eligible partners until July 14, and full proposals are due Sept. 26.
Craig Derickson, NRCS state conservationist in Nebraska said, “Local decision making is empowered through this program– bringing together conservation groups, cities and townships, sportsmen groups, universities, agricultural associations and others – to design conservation projects that are tailored to our needs here in Nebraska.”
With the help of participating partners, USDA’s $1.2 billion in funding over the life of the five-year program will leverage $2.4 billion for conservation. Through RCPP, partners propose conservation projects to improve soil health, water quality and water use efficiency, wildlife habitat, and other related natural resources on private lands.
“This is an example of government at its best - streamlining multiple programs into one more effective effort, providing flexible tools, and connecting local citizens and organizations with resources that best address their priorities, protect and improve their quality of life, and propel economic growth,” Vilsack said.
The RCPP has three funding pools:
35 percent of total program funding directed to critical conservation areas, chosen by the agriculture secretary;
40 percent directed to regional or multi-state projects through a national competitive process;
25 percent directed to state-level projects through a competitive process established by NRCS state leaders.
Vilsack named eight critical conservation areas, which received 35 percent of the program’s overall funding. All of Nebraska is included in one of these, called the Prairie Grasslands Critical Conservation area.
According to Derickson, one of the most threatened ecosystems in North America is the native prairie and grasslands contained within the Prairie Grasslands region.
“This area is essential habitat for a number of wild game and threatened species, including the lesser prairie chicken and sage grouse. The region also encompasses the Ogallala Aquifer – an area facing critical conservation needs on working lands due to prolonged drought and aquifer decline. With this Critical Conservation Area designation, USDA’s Natural Resources Conservation Service will build on existing strong partnerships to accelerate conservation efforts and address these water resource and habitat issues. For example, in the Ogallala, partners will accelerate irrigation efficiency and water conservation work,” Derickson said.
For proposals in Nebraska, priorities include: Air Quality Impacts, Degraded Plant Condition, Excessive/Inefficient water, Inefficient Energy Use, Livestock production limitation, Soil Erosion, Soil Quality degradation, Water Quality degradation. More information is available on the NRCS website.
“This program is a prime example of how government can serve as a catalyst for private investment in rural America,” Derickson said.
To learn about technical and financial assistance available through conservation programs, visit www.nrcs.usda.gov/GetStarted or a local USDA service center. For more on the 2014 Farm Bill, visit www.nrcs.usda.gov/FarmBill.
Regional Conservation Partnership Program delivers conservation assistance to Iowa farmers, landowners
Collaboration and innovation are at the heart of a new five-year, $2.4 billion program announced this week by the U.S. Department of Agriculture aimed at improving water and soil quality.
The Regional Conservation Partnership Program (RCPP), authorized in the latest Farm Bill, promotes coordination between the Natural Resources Conservation Service and its partners to deliver conservation assistance to farmers and landowners. American Soybean Association President Ray Gaesser of Corning said it will usher in a new era of more effective voluntary conservation that will benefit farmers and communities.
“This is not business as usual,” said Gaesser, a long-time soybean leader who farms with his son Chris in southwest Iowa. “It represents a new way of implementing the Farm Bill to target resources through public-private partnerships to priority watersheds where funding is most needed.”
These priority regions, known as Critical Conservation Areas, include the Mississippi River Basin, Great Lakes and Chesapeake Bay. The RCPP will help address resource challenges in those regions and over time, help improve water quality within those watersheds.
U.S. Ag Secretary Tom Vilsack said the department will invest $1.2 billion over the life of the five-year program, including $400 million in the first year, and leverage an additional $1.2 billion from participatory partners. Business, communities, universities, agricultural associations, conservation groups and other entities are eligible to participate.
Iowa farmers and communities stand to benefit from the program as a result of the Mississippi River basin’s priority status, said Roger Wolf, director of Environmental Programs and Services for the Iowa Soybean Association.
“Soil and water quality are the primary concerns addressed by this program, just as they are with the Iowa Nutrient Reduction Strategy implemented last year,” Wolf said. “This alignment is meaningful and timely, with the RCPP providing additional funding that will bolster not only the success of the RCPP, but local, state-based efforts like the strategy.”
The RCPP will competitively award funds to conservation projects designed by local partners to improve soil health, water quality and water use efficiency. Projects will be tailored for specific regions.
That’s appealing to Steve Hershner, utilities director for Cedar Rapids.
“We look forward to working with upstream partners in the Cedar River watershed to implement nitrate control projects that could improve source water quality for our 130,000 residential, commercial and industrial customers,” he said.
The USDA is accepting proposals for the program. Pre-proposals are due July 14 and full proposals due Sept. 26. For more information, go to www.nrcs.usda.gov and keyword search “Regional Conservation Partnership Program.”
Vilsack on Updated Forecast for U.S. Agricultural Exports
The U.S. Department of Agriculture today released its Outlook for U.S. Agricultural Trade report. USDA projects that Fiscal Year 2014 agricultural exports will reach $149.5 billion, an estimated $6.9 billion higher than previous estimates and, if realized, a new record for American agricultural exports. Today's report indicates that the record growth is due not just to rising prices, which have driven export numbers in the past, but also to an increase in the volume of U.S. agricultural exports, which is projected to increase by 31 percent between Fiscal Years 2013 and 2014.
Last Fiscal Year, agricultural exports reached $140.9 billion and supported nearly one million jobs here at home. Fiscal Years 2009 to 2013 represent the strongest five years in history for agricultural trade, with U.S. agricultural product exports totaling $619 billion over those five years.
Agriculture Secretary Tom Vilsack made the following statement on this report:
"American farmers and ranchers are on track for another year of record exports, which builds on the past five years of the strongest agricultural trade in our history. This report indicates that the volume of U.S. agricultural exports has increased, which demonstrates an increasing global appetite for high-quality, American-grown products.
"USDA will continue to focus its efforts on tapping into new markets for what is grown and made in rural America. Today, only one percent of U.S. companies export, and yet 95 percent of the world's consumers live outside the borders of the United States, creating significant opportunities for U.S. food and agriculture. Thanks to resources in the 2014 Farm Bill, USDA is able to continue support for trade promotion and market expansion for U.S. agricultural products overseas—programs that return $35 in economic benefits for every dollar invested. In addition, the Administration's Made in Rural America initiative, launched by President Obama at the 2014 Farm Bill signing, will further these efforts by helping rural businesses and leaders access federal resources to help them connect with new customers and markets abroad.
"Collectively, these efforts will ensure that America's farmers and ranchers are well positioned to capitalize on emerging export markets and continue to drive economic growth in rural America."
Beef Checkoff’s Digital Marketing Campaign Gets Off to Solid Start
The new digital “Beef. It’s What’s For Dinner” (BIWFD) advertising campaign is off to a tremendous start, with exciting new creative elements and more information to reach the important millennial consumer.
The idea of “social” plays a big role in meal inspiration, instruction and sharing, with more than 300 million social media posts per month. That’s why the millennial influence and explosion of digital media led your beef checkoff to develop five new BIWFD recipe videos on the BeefItsWhatsForDinner.com website. These “no-recipe recipe” videos offer millennial consumers – who are just beginning to learn how to cook with beef – easy yet delicious ways to fit beef into their lifestyles. The website also features new tips and techniques for preparing winning beef meals and an update about beef’s “Power of 10” essential nutrients.
“No matter what incarnation beef takes – a lean burger, stir fry, within a salad, etc. – it ties the meal together," said Claire Thomas, video director. "These videos are all about simple meals, and the clever, easy strategies to make them great.”
Using digital media means customizing the right information at right time to the right consumers. For the older generation, that may feel like advertisers are intruding on their privacy. On the other hand, research indicates that the millennial generation, which is beef’s primary target for the new ad campaign, is asking that the information to be delivered to them, when they want it, how they want it. They actually feel that advertisers are making it more personal.
The integrated media strategy for the campaign, including Facebook and Twitter, generated about 65 million impressions during the campaign’s first three weeks. The BIWFD Facebook page now has more than 825,000 “fans,” providing a strong community for beef-loving consumers to share recipes and information.
Partnerships with other websites reaching millennials and interested in food have generated about 9 million high-quality impressions. These websites include Parents.com, Allrecipes.com, Myrecipes.com, FoodNetwork.com and others.
PEDv Outbreak Appears to be Slowing Down
The wild spread of Porcine Epidemic Diarrhea virus appears to be slowing.
The American Association of Swine Veterinarians announced 187 positive tests for the disease in the week ending May 17.
According to Pork Network, the latest figure brings the total number of confirmed cases to 6,804, but the weekly number of cases continues to decline--the lowest since early January.
Veterinarians have long expected accession numbers to fall this spring as temperatures rise and as the number of naïve herds continues to decline.
USDA Awarding $6 Million to Prepare Farmers for New Farm Bill Programs
Agriculture Secretary Tom Vilsack today announced that the U.S. Department of Agriculture (USDA) is awarding $6 million to universities and cooperative state extension services to develop online decision tools and other materials and train experts to educate producers about several key farm bill programs. The new Web tools will help farmers and ranchers determine what participation in programs established by the 2014 Farm Bill will mean for their businesses.
The University of Illinois (lead for the National Coalition for Producer Education [NCPE]), along with the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri and the Agricultural and Food Policy Center (AFPC) at Texas A&M (co-leads for the National Association of Agricultural and Food Policy [NAAFP]), will receive a total of $3 million to develop the new online tools and train state-based extension agents who can in turn help educate farmers.
"Helping farmers and ranchers understand new Farm Bill programs and what the programs mean for their families is one of USDA's top priorities," said Vilsack. "With the resources we're providing, university experts will help ensure farmers and ranchers are highly educated as they make critical decisions about new programs that impact their livelihoods. The new tools that will be developed will empower farmers and ranchers to select the plan that best fits their unique needs."
The new resources will help farmers and ranchers make an educated choice between the new Agriculture Risk Coverage (ARC) program and the Price Loss Coverage (PLC) program. Using the new online tools, producers will be able to use data unique to their specific farming operations combined with factors like the geographical diversity of crops, soils, weather and climates across the country to test a variety of financial scenarios before officially signing up for the new program options later this year. Once a producer enrolls in the ARC or PLC program, he or she must remain in the program through the 2018 crop year.
New tools will be provided for other programs as well. Sign-up for the newly established Margin Protection Program for Dairy (MPP) begins late this summer and enrollment for "buy-up" provisions under the Noninsured Crop Disaster Assistance Program (NAP) will begin early next year. An online MPP tool will be available when sign up begins and the NAP buy-up provision resource will become available to producers in the fall for the 2015 crop year.
The University of Illinois, as well as FAPRI and AFPC will develop ARC and PLC Web tools. The University of Illinois will also develop the online resources for the MPP and NAP programs.
USDA will also award $3 million to state cooperative extension services—a nationwide network of experts based at land-grant universities—for outreach and education on the new Farm Bill programs. Funds will be used to conduct public education outreach meetings where producers can speak with local extension agents and Farm Service Agency (FSA) staff. Outreach meetings will begin late this summer to help farmers and ranchers understand the new programs and their options.
While universities work to create new online tools, producers now have access to a preliminary website that gives them a chance to begin familiarizing themselves with the new programs and the type of information they will need to consider when deciding which program options work better for them. At this site, farmers and ranchers can view ARC and PLC projected payments, ARC guarantees, and PLC payment rate projections. These tables are available on the FSA website.
Today's announcement was made possible through the 2014 Farm Bill, which builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America. For more information, visit www.usda.gov/farmbill.
Partners to Develop Web-based Decision Tools:
For the NCPE, University of Illinois as lead: Michigan State University, Montana State University, Watts & Associates, Delaware State University, University of Arkansas at Pine Bluff, North Carolina A&T University, University of Wisconsin, Cornell University, Pennsylvania State University, Ohio State University, and University of Minnesota.
For the NAAFP, FAPRI and AFPC as co-leads: Texas Tech University, University of Missouri, Iowa State University, University of Nebraska, Kansas State University, Mississippi State University, Oklahoma State University, Tennessee State University, University of Georgia, and Fresno State University.
Implementation Time Line for Selected Farm Bill Programs
Mid-Summer - 2014 - Producers receive letters notifying them of current bases and yields and 2009 to 2012 planting history.
Late Summer - 2014 - MPP, ARC and PLC online tools become available. MPP enrollment for 2014 and 2015 begins. MPP owners have opportunity to update yields and reallocate bases for ARC/PLC purposes.
Fall 2014 - NAP buy-up online tools become available NAP buy-up sign-up starts..
Winter 2014 - ARC/PLC one-time selections occur.
Early 2015 - ARC/PLC sign-up for 2014 and 2015 starts.
Visit www.fsa.usda.gov or the local FSA office for information about FSA and the 2014 Farm Bill programs.
ASA Welcomes USDA Announcement of Funds for Web Resources on Farm Bill Program Options
The American Soybean Association welcomed today’s announcement from the U.S. Department of Agriculture that the agency will award $6 million to universities and state cooperative extension services for the development of web-based tools to assist farmers in choosing new programs within the Agricultural Act of 2014. ASA President and Iowa farmer Ray Gaesser issued the following statement on USDA’s announcement:
“As farmers in many parts of the country move ahead with planting soybeans, our minds are on the many different options we have under the new farm bill. The investment by USDA today will help farmers establish which of the new and complex program options will work for their operations. These programs will be in effect through the life of this farm bill—at least through 2018—so it is imperative that farmers have all the information available to make informed decisions.
“It’s important that farmers in geographically-diverse parts of the country have analysis from experts in their region to help them decide on the appropriate program, and the diverse institutions represented by the two consortia that will receive the funding will accomplish just that. This approach will provide farmers with tools developed by economists familiar with their specific crops, practices and growing regions. ASA supported this approach, and we are heartened to see that approach taken in today’s announcement.
“Moreover, while the bill’s Price Loss Coverage option will be familiar to many growers due to its similarity to the expired Counter Cyclical Payment program, the Agricultural Risk Coverage option is entirely new.
“ASA looks forward to helping our land grant partners and the state cooperative extension services providing our farmers with the tools they need to make these very big decisions in the months ahead.”
Nearly 120 Companies Ask Obama to Boost Biodiesel Standard
One hundred seventeen biodiesel companies and affiliated businesses from 41 states called on President Obama Wednesday to stand behind his past support for the U.S. biodiesel industry by continuing sustainable growth under the Renewable Fuel Standard (RFS).
Highlighting Obama’s strong position on biodiesel going back to his days as a U.S. senator and as a candidate for president, the companies and organizations sent Obama a letter outlining the extensive damage that would result from the EPA’s current RFS proposal, which would set a biodiesel standard of 1.28 billion gallons – far below actual 2013 production of nearly 1.8 billion gallons. The letter can be found here.
“As entrepreneurs and business leaders representing thousands of employees, we have followed signals from this Administration and invested billions of dollars in developing a U.S. biodiesel industry that has successfully delivered more than 5 billion gallons of EPA-designated Advanced Biofuel under the RFS since you took office,” the letter states. “We are extremely concerned that you could be retreating on your previously unwavering support for biodiesel in a way that would have severe consequences for the industry’s future.”
The companies and other organizations signing the letter represent thousands of employees in states across the country, from California to Minnesota to Rhode Island. They specifically referenced legislation introduced by then-Sen. Obama in 2006 (“The American Fuels Act”) that called for an ambitious standard of 2 billion gallons of alternative diesel fuels by 2015.
“Thanks to American innovation, the hard work of our employees, and strong, consistent federal policy under the RFS, the biodiesel industry almost reached that goal last year by producing nearly 1.8 billion gallons under the RFS. With stable policy, it is very likely that the industry will – a mere decade later – indeed reach your stated goal of 2 billion gallons by 2015,” the letter states. “This is a success story of which you and your Administration should be proud: A clean, renewable energy industry meeting a challenging goal that you envisioned 10 years ago. Yet with this EPA proposal, this Administration is retreating. We urge you not to.”
Biodiesel – made from a variety of resources including soybean oil, recycled cooking oil and animal fats – is the first EPA-designated Advanced Biofuel to reach commercial-scale production nationwide. With plants in nearly every state in the country, the industry had a record U.S. market last year of nearly 1.8 billion gallons supporting more than 62,200 jobs.
The EPA’s RFS proposal remains pending, with the Administration planning to finalize it in June.
A recent survey of biodiesel producers conducted by National Biodiesel Board found that nearly 80 percent of U.S. biodiesel producers have scaled back production this year and more than half have idled production at a plant altogether. Additionally, two-thirds of producers said they have already reduced or anticipate reducing their workforce as a result of the downturn, which they attribute to the weak RFS proposal and the expiration of the biodiesel tax incentive.
Ethanol Stocks Hit 13-Month High
U.S. ethanol inventories rebounded last week from a four-week low and spiked to a 13-month high as production increased slightly, the Energy Information Administration reported Thursday.
The EIA's data showed total inventories increased nearly 500,000 barrels (bbl), or 2.9%, to 17.5 million bbl for the week-ended May 23, the highest since early April 2013, boosting the year-over-year surplus to 1.4 million bbl, or 9.0%.
EIA showed ethanol production at U.S. plants rose for the second week straight, up 2,000 barrels per day (bpd) to 927,000 bpd last week while 7.4% higher than a year earlier. Four-week average production at 917,000 bpd was up 6.7% from a year earlier.
Blender inputs, a proxy for ethanol demand, increased 9,000 bpd or 1.0% to 895,000 bpd for the week profiled, while also up 3.7% from a year earlier. Four-week average inputs were up 3.2% from a year earlier.
Expressed as a percentage of daily gasoline demand, daily ethanol production was 9.96%.
EIA reported no foreign ethanol came into the country last week after 11,000 bpd were imported the prior week, received along the East Coast.
On the co-products side, ethanol producers were using 14.056 million bushels of corn to produce ethanol and 103,456 metric tons of livestock feed, 92,232 metric tons of which were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. Additionally, ethanol producers were providing 4.83 million pounds of corn distillers oil daily.
Latest anti-ethanol claims are as real as Godzilla
Ron Lamberty, Senior Vice President for the American Coalition for Ethanol called a new anti-ethanol study released today “ridiculous.”
“This study takes a couple of real things, connects them in an imaginary scenario, and then multiplies over time, to create a big, scary conclusion. A couple of weeks ago, that same “study” process was featured in the release of the latest “Godzilla” movie,” Lamberty said. “The truth is, there is no Godzilla, and there is no way that burning more oil is better for the environment than replacing it with more ethanol – even after you add some of the fictitious elements that have been added to the ethanol story over time.”
“This latest ethanol hit-piece says ‘more than eight million acres of grassland and wetlands were converted for corn alone,’ while the latest USDA Census of Agriculture shows farm acreage dropping by nearly eight million acres from 2007 to 2012, the first five years of the Renewable Fuel Standard. These people expect us to believe farmers were spending time and money to drain wetlands and plow marginal land while they quit farming productive cropland. That’s ridiculous. Not only that, the law they want to overturn specifically outlaws that practice,” said Lamberty.
The Energy Independence and Security Act, which authorized the RFS, required that corn and other feedstocks used to produce renewable fuels may only be sourced from land that was actively engaged in agricultural production in 2007, the year of the bill’s enactment. Under the law, feedstocks grown on land converted to cropland after 2007 do not qualify as “renewable biomass,” and therefore biofuels produced from these feedstocks would not generate credits for the RFS. Also, the Environmental Protection Agency (EPA) is required to annually evaluate whether the RFS is causing U.S. cropland to expand beyond the 2007 level of 402 million acres (the year the RFS was expanded). Each and every year since then, the EPA has found that cropland has been below the 2007 baseline; and the 2012 cropland total was at its lowest point (384 million acres) since the EPA began this annual analysis.
EWG Ethanol Study Seriously Flawed
National Farmers Union (NFU) President Roger Johnson issued the following statement on the Environmental Working Group’s (EWG) recent publication, “Ethanol’s Broken Promise: Using Less Corn Ethanol Reduces Greenhouse Gas Emissions”:
“EWG’s finding that corn ethanol creates more greenhouse gas (GHG) emissions than regular gasoline is simply wrong. This publication is more of a political statement than a scientific analysis.
“The U.S. Department of Energy’s Argonne National Laboratory found that corn ethanol reduces GHG emissions by 34 percent compared to gasoline. This includes a robust lifecycle analysis taking hypothetical indirect land use change emissions into account.
“Unfortunately, EWG bills itself as an environmental organization but is advocating for policies that will do more harm to the environment. It is laughable to claim that gasoline that is derived from petroleum is more environmentally friendly than ethanol produced from a renewable resource.”
Strong Renewable Fuel Standard Means Strong Advanced Biofuels Industry
The Fuels America coalition sponsored Politico’s Morning Energy for the second week in a row this week, underscoring that gutting the Renewable Fuel Standard (RFS) would pose an enormous threat to America’s emerging cellulosic ethanol and advanced biofuel industry.
“Caving to oil industry pressure and reducing the market for renewable fuels would undercut the industry’s ability to make investments in advanced biofuels,” Fuels America’s text pointed out. “Especially if the administration’s rationale for the reduction is the fact that the oil industry is refusing to provide the infrastructure to sell renewable fuels in spite of a law requiring them to do so.”
Fuels America’s Morning Energy sponsorship follows a May 15 letter from DuPont, Abengoa, Novozymes, Poet DSM and 30 other advanced biofuel leaders to President Obama explaining that they had invested “billions of dollars in the development and commercial deployment of ultra-low carbon biofuels … based on the expectation that when [they] succeed, the RFS will be maintained as a mechanism to open the market for our fuels.” They went on to warn that the "current proposal would break that promise by allowing incumbent fuel producers, who want to see the program fail, to limit the distribution of renewable fuels and thereby define future RFS blending obligations.” Fuel’s America’s text concluded with a link to that letter.
The sponsorship by the Fuels America coalition comes as a final 2014 RFS rule draws closer and just on the heels of significant announcements from President Obama regarding the regulation of greenhouse gas emissions. The Administration’s proposal to weaken the bipartisan RFS, however, would represent an increase in carbon emissions worse than cancelling every wind farm now under development in the United States. And as Fuels America explains in this week’s Morning Energy, a weakened RFS will seriously undercut investments in America’s low carbon advanced biofuels, which represent reductions in lifecycle CO2 emissions of 88-108%.
Washington Cattleman Tells Congress EPA’s Land Grab will Kill Conservation Participation
The EPA and the Army Corps of Engineers’ proposed definition of “Waters of the U.S.” has raised grave concern from cattle producers across the country. Today, Jack Field, cattle rancher and Washington Cattlemen’s Association executive vice president, testified before the House of Representatives Small Business Committee to discuss the overregulation and impeding impacts of the rule for rural America.
“First and foremost, the cattle industry prides itself on being good stewards of our country’s natural resources,” said Field, who owns and operates a cattle operation in Washington. “We maintain open spaces, healthy rangelands, preserve wildlife habitat, and provide the country with the juicy ribeyes we all love to throw on the grill. However, to provide all these important functions, cattlemen must be able to operate without excessive federal burdens.”
The National Cattlemen’s Beef Association believes the proposed definition of “waters of the United States” expands the federal jurisdiction to include essentially all waters across the country, subjecting landowners to increased regulation and fines of up to $37,500 per day.
The increase in liability will chill landowner participation in conservation activities by making the Natural Resources Conservation Service a regulatory compliance agency. Field testified that the EPA and the Corps' interpretive rule would make NRCS standards mandatory for all conservation activities, despite whether they are voluntary or cost-shared.
“This didn’t have to be the result,” said Field. “All the agencies had to do was engage stakeholders early on in the process, incorporate our suggestions and we would be much farther along in crafting a rule that actually clarifies the scope of Clean Water Act jurisdiction. There was zero outreach to the agriculture community before the rule was proposed and before the interpretive rule went into effect. We are now left with a proposal that doesn’t work for small businesses, doesn’t work for cattle ranchers, and doesn’t work for the environment.”
NCBA strongly opposes EPA and the Corps’ definition and encourages producers and small business owners to submit comments to the EPA. The comment deadline is July 21, 2014.
Brazilian Wheat Importers Set to Examine SRW, HRW Crops
Five executives representing the largest flour mills in Brazil will be in the United States June 1 to 7 to learn more about the condition of the U.S. soft red winter (SRW) and hard red winter (HRW) wheat crops as well as the wheat supply system. The team is well timed as Brazilian millers, including the companies represented on this team, are the second largest importers of U.S. wheat this marketing year, purchasing nearly 158 million bushels (4.3 million metric tons).
The trade team visit is sponsored by U.S. Wheat Associates (USW), the Maryland Grain Producers Utilization Board, the Virginia Small Grains Board and Kansas Wheat.
“We are very pleased to bring these millers to the United States because we have a unique window of opportunity to build demand for U.S. wheat in this market,” said Osvaldo Seco, USW assistant regional director for South America, who will travel with the team.
Argentina normally supplies most of Brazil’s imported wheat but could not supply enough to Brazil in 2012 and 2013. These millers have now had success milling HRW and SRW, so this trade team visit was planned to demonstrate why they should continue importing more U.S. wheat in the future.
Brazil imports on average around 260 million bushels (7.1 million metric tons) of wheat, putting Brazil in the list of the world’s top wheat buyers. Before the early 1990s, Brazil originated most of that wheat from the United States. However, the Mercosur free trade agreement allowed millers to import Argentine wheat duty free and established a 10 percent tariff on wheat from non-Mercosur countries like the United States. When Argentina severely restricted wheat export licenses in 2013, USW helped Brazilian millers successfully petition their government to temporarily suspend that tariff. That opened a big opportunity for USW to promote the value of U.S. wheat.
By visiting farms in Maryland and Kansas, meeting with commercial elevator managers and seeing the USDA grain inspection system, these executives will go back to their mills with a greater knowledge of how to specify for the best quality and value from the U.S. HRW and SRW supply, Seco said. In turn, he added, they will have the confidence to consider buying more U.S. wheat even when more Argentine wheat is available, in part because the demand for higher quality wheat foods, including whole wheat products, is growing in Brazil.
USW is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by FAS. USW maintains 17 offices strategically located around the world to help wheat buyers, millers, bakers, wheat food processors and government officials understand the quality, value and reliability of all six classes of U.S. wheat.
RABOBANK REPORT GLOBAL FERTILIZER OUTLOOK REMAINS BEARISH
Rabobank has published a new report on the global fertilizer industry, continuing its bearish outlook through Q2 2014. In the report, the Rabobank Food & Agribusiness Research and Advisory group looks at supply, demand and pricing for urea, phosphate, and potash in key international markets.
The report finds there is a deteriorating trend in the price of fertilizers, and Rabobank expects this to continue in the coming quarter. China has exported significant volumes in its high tax season, and phosphate and urea prices will feel downward pressure as China exports even more in its low tax season. Fertilizer prices in the U.S. will be under downward price pressure from fading demand; prices in Q1 were elevated due to supply chain bottlenecks and a compressed application window. For urea, there could be a limited upside originating from Ukraine if market sentiment is impacted by a rationed supply from the country.
• United States: Increased side-dressing demand and supply chain filling ahead of the autumn application will not be enough to provide significant upside to global fertilizer prices in Q2. While demand could induce producers to direct volumes to the domestic market, impact on exports is likely to be limited.
• EU: Nitrate and urea prices have found price support in recent weeks due to supply bottlenecks and early demand, but as demand enters its lull season, prices are set for downward correction.
• Brazil: Even out of season, Brazil has a role to play in the global fertilizer arena. Potash producers are keen to secure volumes in the country. Higher prices in Brazil are supported by the expectation of ongoing depreciation of the Brazilian Real and high demand coming from farmers incentivized to increase yields.
• India: Indian demand remains under pressure with the Ministry of Chemicals and Fertilizers struggling to pay out subsidies. A potentially weakening rupee and disappointing monsoons could impact fertilizer demand further.
• China: With the domestic application season mostly finished in China, the demand for phosphates and potassium fertilizers is weakening going into Q2. An upside in prices appears limited, despite the export window opening in mid-May for phosphates and in July for urea.
• Ukraine: The future of Ukrainian production remains uncertain, as potentially increased gas prices, political instability and especially lower world prices could force the country to halt production. To date, the impact mainly been felt in the already tight ammonia markets.
Tyson Offers $6.1B for Hillshire Brands
Tyson Foods Inc. offered $6.1 billion to buy Hillshire Brands Co., setting up a battle between meatpacking heavyweights for the maker of Jimmy Dean sausage and Ballpark hot dogs.
The offer of $50 a share comes just two days after rival Pilgrim's Pride Corp., owned by Brazilian meat processor JBS SA, unveiled an unsolicited bid for Hillshire worth about $5.5 billion, or $45 a share.
Both offers aim to top Chicago-based Hillshire's planned $4.3 billion purchase of packaged-foods company Pinnacle Foods Inc., announced less than three weeks ago.
All the companies involved are trying to diversify the breadth of their supermarket products. Hillshire's portfolio includes its brand-name prepared meats, like its namesake lunch meats and Aidells sausages, as well as Sara Lee desserts.
Acquiring Hillshire would enable Tyson, the largest U.S. meat processor by sales, to bolster its lineup of branded packaged foods, which carry higher profit margins than fresh or minimally processed meats.
It would also deny JBS, among Tyson's biggest global rivals, a beachhead in U.S. supermarkets. Winning Hillshire would provide Pilgrim's Pride and JBS a range of branded food products neither company currently has, and a base from which to expand further into grocery-store aisles.
Ardent Mills Now Operating
Ardent Mills, a joint venture by ConAgra Mills, Cargill and CHS, began operating as the nation's largest flour milling company on Thursday, following approval by the U.S. Justice Department.
Ardent Mills, which will be based in the Denver area, combines the resources and facilities of ConAgra Mills and Horizon Milling, a previous joint venture of Cargill and CHS. It has 40 flour mills, three bakery mix facilities and a specialty bakery in the United States, Puerto Rico and Canada. It will also have satellite offices in Omaha and Minneapolis.
Some watchdog groups opposed the venture fearing it could lower prices paid to wheat farmers and raise prices for consumers. Last week, anti-trust regulators at the Justice Department said it would require Ardent Mills' parent companies to sell four mills to keep prices competitive for customers, including industrial bakers and food service companies, in the Los Angeles, Dallas, Minneapolis and San Francisco areas.
Ardent Mills CEO Dan Dye, formerly the president of Horizon Milling, said the sales to Minneapolis-based Miller Milling, a subsidiary of Japan's Nisshin Seifun Group, have been completed.
Despite the size of the new venture, Dye said it will have to offer competitive prices to succeed both with consumers and farmers. Ardent Mills can now provide products more efficiently and it can offer growers of wheat and other grains growing in popularity like ancient grains and rye better access to the market, he said. Ultimately, he said the company needs to make sure farmers are paid enough to keep planting those crops.
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