Wednesday April 24 Ag News

Agriculture Leaders Urge Committees to Maintain Property Tax Credit Fund, Use Alternative Revenues to Fund New Property Tax Relief

Elected leaders of Nebraska’s agricultural organizations thanked members of the Legislature’s Revenue, Education, and Retirement Committees for their efforts to find a solution to high property taxes in Nebraska, but urged lawmakers to avoid repurposing dollars from the state’s Property Tax Credit Fund as a means to fund the Revenue Committee’s new property tax relief proposal. The request was made in testimony during an April 24 hearing on an amendment to the Revenue Committee’s LB 289.

Ken Herz, a rancher from Lawrence, provided testimony on behalf of the Agriculture Leaders Working Group representing the member-elected leaders from the Nebraska Cattlemen, Nebraska Corn Growers Association, Nebraska Farm Bureau, Nebraska Pork Producers Association, Nebraska Soybean Association, Nebraska State Dairy Association, and Nebraska Wheat Growers Association.

The Property Tax Credit Fund is a state fund that provides $224 million in property tax relief to Nebraska taxpayers on an annual basis. The amendment to LB 289 would take the $224 million from the Property Tax Credit Fund and use it to help pay for a new Revenue Committee proposal estimated to provide an additional $412 million in property tax relief above and beyond the $224 million delivered through the Property Tax Credit Fund.  The Revenue Committee’s amendment to LB 289 would lower valuations for commercial, residential, and agricultural lands, provide foundation aid to schools, provide for a minimum state aid guarantee based on a school’s needs in the state aid formula, and lower the local effort rate for schools, among other provisions.

In urging the committees to leave the Property Tax Credit Fund intact, the Agriculture Leaders asked the committees to look at alternative ways to fund the Revenue Committee’s new property tax relief proposal, noting the amendment already included provisions to increase the state’s sales tax rate and to broaden the state’s sales tax base by eliminating sales tax exemptions.

The Agriculture Leaders continues to offer support for both increasing the state sales tax rate and broadening the sales tax base as a way to offset property tax reductions and provide a means for the state to take on greater financial responsibility for providing state funding to all of Nebraska’s K-12 schools.



Ricketts, Concerned Nebraskans Oppose the Largest Tax Increase in State History

Today, Governor Pete Ricketts gave compelling reasons to reject LB 289, the Revenue Committee’s plan to enact the largest tax increase in state history.  Several concerned Nebraskans joined him to voice their opposition to the tax proposal. 

“The idea that you can tax and spend to get more property tax relief is false.  It has been tried in the past and failed,” said Governor Ricketts.  “We need to focus on budget control, making sure we live within our means just like every Nebraska family does.”

As amended, LB 289 would raise the sales tax rate to a record-high level.  It would also add new sales taxes, of up to 8.25%, on services essential to the well-being of Nebraska’s families.  These include plumbing repairs, work to fix AC units and furnaces, and basic veterinary care.  Additionally, it would raise the excise tax on cigarettes; impose taxes on bottled water, candy, and soda; and hike the real-estate transfer tax.  Worst of all, the bill would drain the Property Tax Credit Relief Fund to pay for increased spending.  This would deprive Nebraskans of $224 million in direct property tax relief.

“Instead of raising the sales tax, hurting those who can least afford it, we should address the underlying issue of our property tax woes—spending,” said Jessica Shelburn of Americans For Prosperity.

“Action should not be confused with progress,” said Trent Loos, a sixth-generation rancher from Litchfield.  “Nobody who really cares about the future of Nebraska thinks we can make a short-term little fix and cure the problem.”

Brad Beam of Lincoln spoke of the adverse effect the bill would have on pet shelters, along with the burden it would place on local governments.  “Nonprofit animal shelters and rescue groups are not exempt from paying sales tax like other nonprofits,” said Beam.  “Imposition of a sales tax will increase costs, resulting in fewer animals being served.  City and county governments will have to pick up the tab to meet community needs.”

“The increased real-estate transfer tax has a negative impact on our entire population but especially those seeking affordable workforce housing,” said Kim Zweiner, a local realtor.

Doug Kriefels—whose family owns Action Heating, Plumbing, & A/C in Lincoln—also testified that the bill would hurt Nebraskans in search of a home.  “A sales tax on home construction, maintenance, and repairs will make it even harder for working-class Nebraskans to achieve and sustain the dream of home ownership,” he said.



AG YOUTH COUNCIL CONNECTS URBAN YOUTH TO LIFE ON FARM

The Nebraska Agricultural Youth Council’s (NAYC’s) annual Urban Youth Farm Tour connects urban youth with life on the farm so they can experience agriculture up close and learn firsthand how food is produced. More than 150 Lincoln elementary-school students and their teachers joined the NAYC members as they visited beef, dairy and grain farm operations near Wahoo last week.

“By visiting these farms in person, the children are able to see for themselves where their food comes from and what agriculture is all about,” said NDA Director Steve Wellman. “The tours also give NAYC members a chance to teach young students not only about farm animals, but also the responsibility of caring for those animals and the land.”

NAYC consists of 21 college students who have been selected by NDA based on their enthusiasm, interest and leadership in agriculture.

“The Urban Youth Farm Tour is always an enjoyable event,” said Wellman. “I’d like to personally thank the farmers and ranchers in the Wahoo area who take time out of their busy schedules to host these tours and share the story of Nebraska agriculture. I’d also like to thank the Nebraska Corn Board for sponsoring the transportation costs for students to attend the tours.”



Producer Education Team from NCBA, a Beef Checkoff Contractor, to Offer Handling Techniques, Stewardship Information at Four Locations

Registration is now open to cattle producers for four events on the Stockmanship & Stewardship Regional Tour, with the next stop in Ames, Iowa. Events will also be held in Colorado, Kansas and Louisiana.

Stockmanship & Stewardship is a unique two-day educational experience featuring low-stress cattle handling demonstrations, Beef Quality Assurance (BQA) educational sessions, facility design sessions to fit your operation and industry updates. The program is sponsored by the National Cattlemen’s Beef Association (NCBA), a contractor to the Beef Checkoff, Merck Animal Health, and the Beef Checkoff-funded National Beef Quality Assurance program.

The tour locations and dates are:
  - Ames, Iowa, June 28-29
  - Fort Collins, Colo., August 9-10
  - Manhattan, Kan., September 20-21
  - West Monroe, La., October 4-5

The tour features events to be led by stockmanship experts Curt Pate, Ron Gill and Dean Fish. By attending a Stockmanship & Stewardship event, producers may also become BQA certified, network with fellow producers, be involved in hands-on demonstrations from the stockmanship experts and learn cutting-edge operation techniques.

 “These events allow producers to network with one another and learn from industry experts about real world solutions to everyday problems they encounter on their operations,” said Chase DeCoite, the director of Beef Quality Assurance for NCBA. “Beyond animal handling, each of these events incorporates valuable information about animal health, environmental stewardship, and much more.”

“Merck Animal Health is honored to be the premier sponsor of this initiative, which very much complements our efforts to promote proper animal handling, animal welfare and beef quality assurance,” according to Kevin Mobley, executive director U.S. Cattle Sales and Marketing for Merck Animal Health. “Working with the NCBA and state cattle associations is another way that Merck Animal Health works for our beef producing customers.”

To learn more about Stockmanship & Stewardship event, including seeing videos and photos from previous events, or to register for an upcoming event. visit www.StockmanshipAndStewardship.org.



Total Red Meat and Pork Production at Record Highs in 2018

Total red meat production for the United States totaled 53.5 billion pounds in 2018, 3 percent higher than the previous year. Red meat includes beef, veal, pork, and lamb and mutton. Red meat production in commercial plants totaled 53.4 billion pounds. On-farm slaughter totaled 90.2 million pounds.

By State  (million lbs    -    2018    -    2017)
Nebraska .............:         8,106.4        8,113.0
Iowa ....................:         7,700.5        7,229.5
Kansas .................:         5,875.3        5,691.3

Beef production totaled 26.9 billion pounds, up 3 percent from the previous year. Veal production totaled 80.9 million pounds, up 1 percent from last year. Pork production, at 26.3 billion pounds, was 3 percent above the previous year. Lamb and mutton production totaled 158.2 million pounds, up 5 percent from 2017.

Commercial cattle slaughter during 2018 totaled 33.0 million head, up 3 percent from 2017, with federal inspection comprising 98.5 percent of the total. The average live weight was 1,350 pounds, up 1 pound from a year ago. Steers comprised 51.2 percent of the total federally inspected cattle slaughter, heifers 28.2 percent, dairy cows 9.7 percent, other cows 9.3 percent, and bulls 1.7 percent.

Commercial calf slaughter totaled 580,300 head, 13 percent higher than a year ago with 98.5 percent under federal inspection. The average live weight was 226 pounds, down 24 pounds from a year earlier.

Commercial hog slaughter totaled 124.4 million head, 3 percent higher than 2017 with 99.4 percent of the hogs slaughtered under federal inspection. The average live weight was up 1 pound from last year, at 283 pounds. Barrows and gilts comprised 97.3 percent of the total federally inspected hog slaughter.

Commercial sheep and lamb slaughter, at 2.26 million head, was up 4 percent from the previous year with federal inspection comprising 88.3 percent of the total. The average live weight was up 2 pounds from 2017 at 135 pounds. Lambs and yearlings comprised 94.7 percent of the total federally inspected sheep slaughter.

There were 837 plants slaughtering under federal inspection on January 1, 2019 compared with 834 last year. Of these, 663 plants slaughtered at least one head of cattle during 2018 with the 13 largest plants slaughtering 57 percent of the total cattle killed. Hogs were slaughtered at 630 plants, with the 13 largest plants accounting for 57 percent of the total. For calves, 5 of the 179 plants accounted for 76 percent of the total and 3 of the 536 plants that slaughtered sheep or lambs in 2018 comprised 50 percent of the total head.   

Nebraska, Iowa, Kansas, and Texas accounted for 49 percent of the United States commercial red meat production in 2018, unchanged from 2017.



Fertilizers Continue Trend of Mixed Prices

Retail fertilizer prices continue to be fairly mixed, according to prices tracked by DTN for the third week of April 2019. This trend has been in place for several weeks.

Half of the eight major fertilizers' prices were higher compared to last month. As has been the case in recent weeks, the move higher was slight. Potash had an average price of $388/ton, urea $404/ton, 10-34-0 $481/ton and UAN28 $270/ton.

The remaining four fertilizers were lower compared to the prior month, but again the falling price was insignificant. DAP had an average price of $504/ton, MAP $531/ton, anhydrous $594/ton and UAN32 $317/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.44/lb.N, anhydrous $0.36/lb.N, UAN28 $0.48/lb.N and UAN32 $0.50/lb.N.

All eight of the major fertilizers are now higher compared to last year, with prices shifting higher. MAP is 4% more expensive, DAP is 6% higher, both urea and potash are 10% more expensive, both 10-34-0 and UAN28 are 12% higher, UAN32 is 15% more expensive and anhydrous is 17% higher compared to last year.



Weekly Ethanol Production for 4/19/2019

According to EIA data analyzed by the Renewable Fuels Association for the week ending April 19, ethanol production increased 31,000 barrels per day (b/d), a 3.1% gain, at an average of 1.048 million barrels per day (b/d), equivalent to 44.02 million gallons daily. This is 6.4% higher than year ago volumes and reflects the largest output in fourteen weeks. The four-week average ethanol production rate moved 1.8% higher to 1.016 million b/d—equivalent to an annualized rate of 15.58 billion gallons.

Stocks of ethanol ticked up slightly (0.3%) to 22.7 million barrels following the prior week’s drop. Stocks built in the East Coast (PADD 1) but were steady to fractionally lower in other regions.

There were no imports reported by EIA for the 23rd week in a row. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of February 2019.)

The volume of gasoline supplied to the market eased 0.1% to 9.409 million b/d (395.2 million gallons per day, or 144.24 billion gallons annualized). Refiner/ blender net inputs of ethanol edged 0.4% higher to 928,000 b/d—equivalent to 14.23 billion gallons annualized. This was the highest utilization rate since mid-December, and the four-week average was 1.2% above the comparable period in 2018.

Expressed as a percentage of daily gasoline demand, daily ethanol production increased to 11.14%.



Renewable Fuels Association Joins Field to Market

The Renewable Fuels Association (RFA) announced today that it has joined Field to Market: The Alliance for Sustainable Agriculture, a leading multi-stakeholder initiative working to unite the agricultural supply chain in defining, measuring and advancing the sustainability of food, fiber and fuel production in the United States.

“As communities around the world celebrate Earth Day this week, RFA is pleased to announce it is joining Field to Market,” said RFA President and CEO Geoff Cooper. As an active member of Field to Market, RFA will collaborate with the Alliance’s diverse membership—including farmers, conservation groups, leading companies, academia and other stakeholders—to promote and advance continued efficiency improvements and sustainable development throughout the renewable fuel supply chain.

The entire ethanol production process has seen remarkable progress and innovation over the past few decades, and emerging technologies promise to further improve the industry’s environmental and economic performance. “Ethanol is already making our transportation fuels market more sustainable by significantly reducing greenhouse gas emissions and cutting toxic tailpipe pollution,” says Cooper. “We look forward to building upon that record of success and working with Field to Market to measure and document our progress using metrics and approaches grounded in science and agreed upon across the value chain.”

Field to Market engages in broad communication and collaboration with stakeholders to ensure a coordinated approach to sustainable agriculture that is grounded in science. By providing useful measurement tools and resources, Field to Market helps growers and the supply chain track and promote continuous improvement at the field and landscape levels.

“We are excited to welcome the Renewable Fuels Association as a new member of the Alliance,” said Rod Snyder, president of Field to Market. “As the first biofuel organization to join Field to Market, the Renewable Fuels Association is acting as a leader to drive continuous improvement in the ethanol supply chain. We look forward to collaborating with them to advance sustainable outcomes in this space.”

Representing all facets of the U.S. agricultural supply chain, Field to Market provides an unparalleled platform that helps the food and agricultural supply chain benchmark sustainability performance, catalyze continuous improvement and enable supply chain sustainability claims. For more information, visit www.fieldtomarket.org.



Ranchers File Historic Lawsuit Against Beef Packing Conspiracy

Scott+Scott Attorneys at Law LLP ("Scott+Scott"), a national antitrust and securities litigation firm, along with Cafferty Clobes Meriwether & Sprengel LLP ("Cafferty Clobes"), have filed a class action lawsuit in federal district court in Chicago on behalf of R-CALF USA and four cattle-feeding ranchers from Iowa, Nebraska, Kansas, and Wyoming. The suit alleges the nation's four largest beef packers violated U.S. antitrust laws, the Packers and Stockyards Act, and the Commodity Exchange Act by unlawfully depressing the prices paid to American ranchers.

The complaint was filed against Tyson Foods, Inc., JBS S.A., Cargill, Inc., and National Beef Packing Company, LLC, and certain of their affiliates (the "Big 4"), who collectively purchase and process over 80% of the U.S.'s fed cattle-that is, cattle raised specifically for beef production-annually. It alleges that from at least January 1, 2015 through the present, the Big 4 packers conspired to depress the price of fed cattle they purchased from American ranchers, thereby inflating their own margins and profits.

The class action lawsuit seeks to recover the losses suffered by two classes believed harmed by the Big 4's alleged conduct. The first class includes cattle producers who sold fed cattle to any one of the Big 4 from January 2015 to the present. The second class consists of traders who transacted live cattle futures or options contracts on the Chicago Mercantile Exchange ("CME") from January 2015 to the present. The complaint, which is supported by witness accounts, including a former employee of one of the Big 4, trade records, and economic evidence, alleges that the Big 4 conspired to artificially depress fed cattle prices through various means, including:
-    collectively reducing their slaughter volumes and purchases of cattle sold on the cash market in order to create a glut of slaughter-weight fed cattle;
-    manipulating the cash cattle trade to reduce price competition amongst themselves, including by enforcing an antiquated queuing convention through threats of boycott and agreeing to conduct substantially all their weekly cash market purchases during a narrow 30-minute window on Fridays;
-    transporting cattle over uneconomically long distances, including from Canada and Mexico, in order to depress U.S. fed cattle prices; and
-    deliberating closing slaughter plants to ensure the underutilization of available U.S. beef packing capacity.

These alleged practices are estimated to have depressed fed cattle prices by an average of 7.9% since January 2015, causing significant harm to U.S. ranchers.

"R-CALF USA is taking this historic action to fulfill its promise to its members to prevent the Big 4 packers from capturing the U.S. cattle market from independent U.S. cattle producers," said R-CALF USA CEO Bill Bullard, adding "we have exhausted all other remedies but now, with the expert help of Scott+Scott and Cafferty Clobes, our members' concerns will be addressed and we hope U.S. cattle ranchers can be compensated for years of significant losses."

"The impact of the packers' conduct on American cattle ranchers has been catastrophic," said David Scott, managing partner, Scott+Scott. "The health and integrity of the American cattle industry is being permanently and irrevocably damaged, independent ranchers are systematically being driven out of business, and consumers are losing the ability to buy high-quality American beef with confidence."

"The packers' alleged conduct has had a direct and significant impact on the commodities underlying CME live cattle futures and options contracts," said Anthony Fata, partner, Cafferty Clobes. "It is imperative for investors to maintain confidence in this vital financial market, relied upon by ranchers, traders and others to manage the risks associated with their businesses."