Thursday, May 23, 2019

Thursday May 23 Ag News

Peet's Feed of Fremont joined the Form-A-Feed Family

Peet’s Feeds has been a regional feed manufacturer since 1916, serving Eastern Nebraska, South Dakota, Western Iowa and Northeast Kansas. They have placed emphasis on providing high quality nutritional supplements for all phases of swine, beef and dairy production. They have always offered nutrition and management consulting including feed testing and ration formulation using an experienced and well trained team of feed professionals to help producers meet or exceed performance and profit objectives. In May, 2019, Peets Feeds joined the Form-A-Feed family.

Nebraska Farm Bureau Identifies Prevented Planting Options for Farmers, Reminds of May 25 Deadline for Corn Planting

Nebraska farmers struggling to get crops planted due to recent flooding and ongoing rainfall events may be eligible for a prevented planting payment if crop acres have not been planted due to an insured cause of loss. In Nebraska, the crop insurance final planting date for corn in all counties is May 25 and the final planting date for soybeans is June 10.

“We know many farmers are sorting through options as they deal with flood recovery and the continued rainfall events that have kept them from putting seed in the ground. We’ve identified some options that we hope will be helpful as they evaluate their situation, particularly corn producers who are bumping up against the May 25 deadline,” said Jay Rempe, Nebraska Farm Bureau senior economist.

United States Department of Agriculture’s (USDA) May 20 crop progress report shows 70 percent of Nebraska’s estimated corn acres and 40 percent of Nebraska’s estimated soybean acres have been planted. In comparison, the 5-year average is 86 percent for corn and 54 percent for soybeans.

“Farmers may be eligible for a prevented planting payment if acres have not been planted due to an insured cause of loss by the final planting date. Prevented planting will provide coverage equal to 55 percent of the original production guarantee in their policy. To qualify for prevented planting they must meet several qualifications,” said Rempe. “Acres must eligible for prevented planting due to an insured cause of loss; the tract must be at least 20 acres or represent 20 percent of the field; prevented planting must be general to the surrounding area; and the acres must have a history of being planted to corn or soybeans.”

According to Rempe, farmers can still plant a crop after the final planting date and receive crop insurance coverage. However, the coverage will be reduced one percent per-day after the planting final date during the late planting period. The late planting period runs until June 14 for corn and July 5 for soybeans. Crop insurance agents must be notified within 72 hours after the final date of the late planting period if acres are left unplanted to be eligible for prevented planting coverage.

“There are several options for farmers to consider on corn acres that don’t get planted by the May 25 final planting date,” said Rempe.

As noted, acres can still be planted to corn during the late planting period with the crop still being insured, but the coverage will decline by 1 percent each day. Acres planted are not eligible for prevented planting.

Acres could be planted to soybeans or another crops like grain sorghum. Crop insurance would still be available on the crop if coverage has already been purchased for the crop on other acres. Factors which could influence the decision on whether to plant an alternative crop: fertilizer or herbicide applications; crop rotations; potential trade aid; and underlying economics.

After the late planting period for corn ends June 14, the acres could still be planted to another crop, and a prevented planting payment of 35 percent of corn coverage received, but a premium of 35 percent of the corn premium must be paid. Taking this option also mean the acres will receive a 60 percent yield plug in the Average Production History.

Acres can be left unplanted and if eligible receive a prevented planting payment equal to 55 percent of the original production guarantee. These acres can be planted to a cover crop so long as the cover crop is not hayed or grazed prior to November 1 and cannot be harvested for grain or seed at any time. The Average Production History on the acres will not be affected.

“Farmers should contact their crop insurance agent to discuss options before making any decisions on corn acres that don’t get planted before the May 25 deadline,” said Rempe. “It’s also important farmers know that if they take prevented planting, they cannot qualify for the recently announced new round of trade related market facilitation program payments.”

Groundwater Level Rise 1.22 Feet on the Average in the Upper Big Blue NRD

During April-May 2019, the UBB-NRD measured 531 observation wells throughout the District and then averaged the data of all these wells.  Overall, the spring 2018 average measurement for the groundwater level change shows a rise of 1.22 feet from last spring.  The findings show that the spring 2019 average groundwater level is 5.11 feet above the “Allocation Trigger.”  As a result, there will be no allocation restrictions for the 2020 irrigation season.

The District goal is to hold the average groundwater level at, or above the 1978 level.  In 2005, the District Average groundwater level reached the “Reporting Trigger” initiating groundwater users to report annual groundwater use to the District and to certify their irrigated acres.  If the District average level falls below the 1978 level (“Allocation Trigger”), groundwater allocation will begin.

Observation wells are measured in the spring of each year, allowing the water table to rebound from the previous irrigation season.  The observation wells measured are uniformly distributed and represented geographically throughout the District to provide an accurate profile of the District average.  Each well measured is assigned an area of the District based on distances to other measured wells.  This method of averaging is called the Thiessen Polygon Method and give the average groundwater level change calculation a weighted average.  For more information, please visit or call (402) 362-6601.

Senate Passes Disaster Bill with NE Flood Recovery Assistance

Today, the U.S. Senate passed a disaster supplemental bill that included funding for Nebraska flood recovery. U.S. Senator Deb Fischer (R-Neb.), who worked with her staff to include the state of Nebraska in the bill, applauded its passage and released the following statement:

“Today the U.S. Senate came together in a bipartisan manner and passed a disaster supplemental bill that includes significant relief for Nebraska.  Our families, ag producers, communities, and military installations affected by the catastrophic flooding need assistance and that’s why I fought hard for our state throughout this process." 
Senator Fischer fought to include the following provisions in the Senate-passed disaster bill that will help Nebraska:

·       $3,005,442,000 for crop losses
·       $435 million for the Emergency Watershed Protection Program in the Natural Resources Conservation Services
·       $558 million for the “Emergency Conservation Program”

Economic Development
·       $600 million for the Economic Development Assistance Program

Army Corps of Engineers
·       $1 billion for the Flood Control and Coastal Emergencies account in the Corps of Engineers

·       $670 million for the Air Force Operations and Maintenance in support of disaster relief and recovery
·       $1 billion for Air Force Military Construction
·       $42 million for National Guard Military Construction

Senator Fischer says, "What we passed today is a critical first step to help Nebraskans rebuild and move forward in a positive direction. I hope the House will follow suit and pass this bill without delay.”

Sasse Statement on Disaster Relief Vote

U.S. Senator Ben Sasse released the following statement after voting to pass disaster relief legislation.

“Nebraskans are tough. We’re working hard to rebuild, but we still have work to do. The legislation the Senate just passed is an important down payment to help us rebuild. The relief for our farmers and ranchers is critical. That’s a big deal for Nebraskans, and I'm glad Senate Democrats stopped playing games.”
Legislation background:

Expands payment for lost crops and livestock to include “on-farm stored commodities” and “crops prevented from planting in 2019.”

Adds emergency funding and technical assistance to farmers and ranchers for rehabilitating farmland damaged by natural disasters from $500 million to $558 million and expanded coverage to 2019 floods.

Increases funds for Air Force construction costs from $700 million to $1 billion and included 2019 flood damage.

Statement by Steve Nelson, President, Regarding Deal Between White House and Congress on Disaster Assistance Package

“Today’s announcement of an agreement between the leadership of the House, Senate, and White House on a disaster assistance package is welcomed news to Nebraska farmers and ranchers. The package will provide much needed aid to help with recovery from the March flooding and blizzards in our state.”

“With the Senate passing the package today, the House is expected to take it up as soon as tomorrow. It is our hope the President will sign this critical legislation shortly thereafter so farmers and ranchers who continue to work through recovery will soon receive targeted disaster funding.”

“The package includes about $3 billion to cover crop damage, including additional funding for farmers who were prevented from planting due to the floods, as well as payments for on-farm stored grain that was damaged. The bill also provides $558 million in funding for the Emergency Conservation Program, the primary program farmers and ranchers can utilize for fence repair and debris removal, including clearing sand from farm fields.”

“We want to thank the entire Nebraska Congressional delegation for all of their behind the scenes work in getting this package across the finish line.”

2018 Nebraska Poultry Production and Value

The value of egg production in Nebraska during 2018 was $198 million, up $67.3 million from $131 million in 2017, according to the USDA's National Agricultural Statistics Service.  Egg production in 2018 was estimated at 2.39 billion eggs, down 100 million from the previous year. Average number of layers for 2018 at 7.83 million was down 338,000.0 from 2017.

U.S. Value of Production and Sales Up 8 Percent

The combined value of production from broilers, eggs, turkeys, and the value of sales from chickens in 2018 was $46.3 billion, up 8 percent from $42.7 billion in 2017. Of the combined total, 69 percent was from broilers, 23 percent from eggs, 8 percent from turkeys, and less than 1 percent from chickens.

The value of broilers produced during 2018 was $31.7 billion, up 5 percent from 2017. The total number of broilers produced in 2018 was 9.04 billion, up 1 percent from 2017. The total amount of live weight broilers produced in 2018 was 56.8 billion pounds, up 2 percent from 2017.

The value of turkeys produced during 2018 was $3.88 billion, down 20 percent from the $4.87 billion the previous year. The total number of turkeys raised in 2018 was 245 million, down slightly from 2017. Turkey production in 2018 totaled 7.60 billion pounds, up 1 percent from the 7.54 billion pounds produced in 2017.

The value of sales from chickens (excluding broilers) in 2018 was $49.4 million, up 5 percent from $47.0 million a year ago. The number of chickens sold in 2018 totaled 190 million, down slightly from the total sold during the previous year.

Value of all egg production in 2018 was $10.6 billion, up 39 percent from $7.60 billion in 2017. Egg production totaled 109 billion eggs, up 2 percent from 107 billion eggs produced in 2017.

Trump Considering Visit to Iowa Ethanol Refinery

President Donald Trump is considering visiting an ethanol refinery in Iowa in the coming weeks, according to people familiar with the matter, a signal that the administration will fulfill a pledge to permit the year-round sale of high-ethanol gasoline sought by corn farmers in the state.

According to Bloomberg, Iowa Republican Senators Chuck Grassley and Joni Ernst, as well as Governor Kim Reynolds, will be invited, according to four people familiar with the matter who asked not to be named discussing the private deliberations.

Last fall, Trump visited Iowa and delivered a victory to corn farmers and biofuel producers when he said he signed a memo telling the U.S. Environmental Protection Agency to lift summertime fueling restrictions on E15 gasoline, which contains 15% ethanol. The corn-based fuel currently accounts for 10% of U.S. gasoline consumption and higher blends are restricted during the summer months in some areas.

Since then, agricultural groups have been pressing EPA to meet the June 1 deadline when the higher blends are restricted. Midwestern farmers, who helped propel Trump to the White House, have suffered a loss of sales due to Trump's trade war with China that has resulted in tariffs on American agricultural products.

The move to allow year-round E15 is opposed by oil refineries. The two sides have long been locked in battle over the Renewable Fuel Standard, the law that compels oil refiners to mix ethanol and biodiesel into petroleum.

Some 37% of U.S. corn production is consumed by ethanol plants. Iowa is the largest manufacturer of both commodities.

Record Total Red Meat, Beef, and Pork Production in April

Commercial red meat production for the United States totaled 4.55 billion pounds in April, up 6 percent from the 4.28 billion pounds produced in April 2018.

By State:       (million lbs.   -   % April '18) 

Nebraska ......:     664.9            105
Iowa .............:     711.5            113      
Kansas ..........:     493.1            109      

Beef production, at 2.26 billion pounds, was 7 percent above the previous year. Cattle slaughter totaled 2.83 million head, up 7 percent from April 2018. The average live weight was down 6 pounds from the previous year, at 1,328 pounds.

Veal production totaled 6.0 million pounds, 2 percent below April a year ago. Calf slaughter totaled 42,800 head, down slightly from April 2018. The average live weight was down 4 pounds from last year, at 241 pounds.

Pork production totaled 2.27 billion pounds, up 6 percent from the previous year. Hog slaughter totaled 10.6 million head, up 6 percent from April 2018. The average live weight was unchanged from the previous year, at 287 pounds.

Lamb and mutton production, at 15.2 million pounds, was up 22 percent from April 2018. Sheep slaughter totaled 235,900 head, 30 percent above last year. The average live weight was 129 pounds, down 8 pounds from April a year ago.

January to April 2019 commercial red meat production was 17.9 billion pounds, up 2 percent from 2018. Accumulated beef production was up 1 percent from last year, veal was down 1 percent, pork was up 4 percent from last year, and lamb and mutton production was up 2 percent.

June 12 Webinar Explores Different Cow-Calf Management Systems

Iowa Beef Center’s Cow Systems Project, a research project to characterize three cow-calf production management systems across Iowa, will be the focus of a June 12 webinar sponsored by Iowa Farm Bureau.

The webinar is set to begin at 1 p.m. and will include an overview of the project results. It was originally designed to identify costs, environmental impacts and best practices of three cow-calf systems: limited, traditional and extended grazed systems. Iowa State University Extension and Outreach beef specialists Denise Schwab and Erika Lundy will lead the webinar discussion.

“The traditional or conventional system consists of pasture grazing during the growing season and winter feeding of harvested or purchased feed in either a lot or open area,” Schwab said. “The second is an extensive grazing system, which aims to have cows grazing most of the year with little supplemental feeds. The third system is a limited grazing system where most of the feed is harvested and cows are confined in a building or drylot for much of the time.”

The research project included 28 Iowa producer cooperators with real data on production costs, forage quality, feeds and rations, as well as soil samples.

"In the webinar, we will focus on some of the research findings, best management practices, keys to profitability in each system, as well as opportunities and challenges of the systems,” Lundy said. "We encourage participants to ask questions during the webinar."

The full results of the project can be found as Iowa Cow-calf Production – Exploring Different Management Systems on the Extension Store, The publication can be downloaded at no cost as pdf documents in entirety and by individual chapter and appendix.

See all webinar details, including information on testing your computer's ability to access the webinar site and preregistering, on the Iowa Farm Bureau website at Preregistration is encouraged but not required. The webinar will be archived and available for later viewing on the Iowa Farm Bureau website. 

Long-Awaited Trade Breakthroughs Fuel Optimism at USMEF Spring Conference

U.S. Meat Export Federation (USMEF) members gathered in Kansas City Wednesday for Day 1 of the USMEF Spring Conference and Board of Directors Meeting, with recent trade developments lending an optimistic tone to the event. In his address to the USMEF membership, President and CEO Dan Halstrom reported on Mexico’s removal of retaliatory duties on U.S. pork, Canada’s elimination of a 10% duty on prepared beef products and Japan’s lifting of longstanding restrictions on U.S. beef exports.

“When I was preparing my comments a week ago there were a lot of negative things to talk about, like the 20% duty on pork going into Mexico,” Halstrom explained. “But we received some great news with the U.S., Mexico and Canada reaching a resolution on steel and aluminum tariffs and removal of the retaliatory duties on U.S. products. So on Monday morning, the first loads of pork in nearly a year crossed the border into Mexico at zero duty.”

Halstrom said he is also encouraged by the recent launch of U.S.-Japan trade negotiations, noting that Japan’s new trade agreements with the European Union and countries participating in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have put U.S. pork and beef at a significant disadvantage in the leading value market for both products. He added that gaining access to Japan for U.S. beef from cattle of all ages, which was announced last week and took effect May 20, will provide immediate, added momentum for U.S. beef exports.

“Now that the 30-month cattle age limit has been lifted, we estimate that this will provide a $150 to $200 million per year incremental boost for beef exports to Japan,” Halstrom said. “This opens up new product lines such as mountain chain tripe and tongues on the variety meat side, and for primal cuts we’ll see demand for middle meats and chuck rolls. It’s very exciting news and I want to extend a great big thank you to USDA and USTR for their work on this issue.”

USMEF Chair Conley Nelson, a pork producer from Algona, Iowa, said resiliency and industry unity are key factors in gaining broader market access for U.S. agricultural exports.

“Obviously we are in a period of uncertainty and volatility, and that can sometimes lead to increased tension and division in U.S. agriculture,” Nelson explained. “That’s something we absolutely cannot afford, especially in these difficult times. So I’m excited to see such a high level of cooperation among all industry sectors.”

Wednesday’s keynote speaker was Peter Zeihan, a global trade expert and best-selling author who offered his perspective on how the current trade environment impacts U.S. agriculture and the red meat industry specifically. He noted that despite facing many challenges, the United States is remarkably well-positioned to have continued success as an agricultural exporter.

“Geographically, the U.S. has it made,” Zeihan explained. “The Greater Midwest is the single largest chunk of arable land in a temperate zone in the world, and it out-produces the next two largest agricultural zones put together. The Greater Mississippi, by itself, has more miles of naturally navigable waterway than the combined internal systems of the rest of the world. This chunk of North America is both the richest territory on the planet and the most securable. Decades of bipartisan effort have yet to screw this up, and this will not be the administration that cracks the code.”

When asked about the United States’ trade deficit, Zeihan acknowledged that the deficit has expanded under the Trump administration and that the administration’s approach to trade has been hard on U.S. agriculture. However, Zeihan feels strongly the U.S. has the upper hand in trade relations, especially with China.

“The United States holds all the cards here, and if the U.S. is willing to walk away from the game board and kick it over, it won’t be the one feeling the pain,” he said. “What you’re seeing right now with the trade deficit is a transitional period. In this moment, it looks like the United States doesn’t have as much leverage as it actually does. You feel that more than any other sector, because agriculture is the only thing that foreign governments can target. But this moment of transition isn’t going to last long. The title of my presentation was ‘At the Edge of Disorder,’ and we’re at the edge.”

The USMEF Spring Conference continues Thursday with an address (via teleconference) from Ted McKinney, USDA under secretary for trade and foreign agricultural affairs, and meetings of USMEF’s standing committees. The conference will conclude Friday with a panel discussion on the trade implications of African swine fever.

 Peterson, Johnson Introduce Bill to Stop the EPA from Undermining the RFS

Representatives Collin C. Peterson (D-MN) and Dusty Johnson (R-SD) and the co-chairs of the Congressional Biofuels Caucus introduced the Renewable Fuel Standard Integrity Act of 2019 which establishes an annual June 1st deadline for refineries to submit small refinery exemption (SRE) petitions from their RFS blending obligations each year and increases transparency in the process.

“It is clear to me that EPA is abusing its authority by recklessly handing out small refinery waivers and refusing to account for them,” said Peterson. “This is hurting farmers and agriculture communities at the worst time. This bill ends the gamesmanship in the waiver process and increases transparency along the way.” 

“The EPA has let oil refiners off the hook by circumventing congressional intent, putting ethanol producers at a disadvantage,” said Johnson. “The Renewable Fuel Standard Integrity Act makes sure that moving forward, the EPA’s waiver process will be fair, timely, and transparent.”

Since 2018, EPA granted 54 waivers to refineries for the 2016 and 2017 RFS compliance years totaling 2.61 billion ethanol-equivalent gallons being taken out of the market place. By law, the RFS requires that the EPA make adjustments when determining future biofuels targets to account for waivers to ensure that the overall biofuels targets are not reduced by waivers. However, the agency is not accounting for these waivers and the demand for biofuels is being undercut.

By setting a June 1st petition submission deadline each year, the EPA will have time to account for renewable fuel gallons stripped from the market due to these waivers. The bill also increases transparency in the process by making information with respect to a petition subject to public disclosure.

The bill is supported by Growth Energy, Fuels America, National Corn Growers Association, Renewable Fuels Association, National Biodiesel Board, MN Corn Growers Association and MN BioFuels Association.


National Corn Growers Association (NCGA) today applauded legislation introduced by House Agriculture Committee Chairman Collin Peterson, D-Minn., and Representative Dusty Johnson, R-S.D. The Renewable Fuel Standard Integrity Act of 2019 would set a deadline for refineries to apply for Renewable Fuel Standard (RFS) waivers and bring much-needed transparency to the waiver process.

Within the past year, EPA has granted 54 exemptions to refineries, waiving 2.61 billion ethanol-equivalent gallons of renewable fuel blending under the RFS. EPA has another 39 waiver petitions pending, with decisions from EPA expected in the coming weeks.

Currently, most refineries do not apply for a waiver until after EPA sets the RFS volumes for the coming year. This new legislation would set a June deadline for refineries to apply for RFS exemptions, allowing ample time for the Department of Energy (DOE) and the Environmental Protection Agency (EPA) to determine exemptions before the annual renewable volume obligations (RVOs) are finalized, allowing EPA to avoid retroactive waivers.

While NCGA has asked the EPA to use the annual volume-setting process to account for projected waivers, EPA has, to date, failed to do so. The bill’s deadline for applications means EPA would have no excuse to avoid incorporating waived gallons in the RVOs and the RFS would be kept whole. In addition, the legislation brings transparency to the waiver process by releasing basic information such as which refineries receive waivers.

Farmers are facing a sixth consecutive year of depressed income and commodity prices, with farm income for 2019 projected to be half of what it was in 2013. EPA’s refinery exemptions benefit big oil refiners at the expense of farmers, and waivers negatively impact farmers by undercutting the RFS and reducing corn demand.

NCGA thanks Representatives Peterson and Johnson and the co-chairs of the House Biofuels Caucus, Reps. Dave Loebsack, D-Iowa, Roger Marshall, R-Kansas and Rodney Davis, D-Ill.  for taking the lead on this legislation. NCGA supports this bill and will be asking House members to co-sponsor this legislation.

NBB Welcomes Proposed Limit on RFS Small Refinery Exemptions

The National Biodiesel Board (NBB) today thanked House Committee on Agriculture Chairman Collin Peterson (D-MN), and Reps. Dusty Johnson (R-SD), Dave Loebsack (D-IA), Rodney Davis (R-IL), and Roger Marshall (R-KS) for introducing the bipartisan Renewable Fuel Standard Integrity Act of 2019. The legislation would require small refineries to petition for Renewable Fuel Standard (RFS) hardship exemptions by June 1 each year. The change would ensure that the Environmental Protection Agency (EPA) properly accounts for exempted gallons in the annual Renewable Volume Obligations (RVOs) it sets each November.

“NBB and its members appreciate Representative Peterson’s legislative solution to EPA’s recent flood of small refinery exemptions. This is just one of the many things EPA could do on its own to ensure that the RFS volumes it sets each year are met and the market for biodiesel and renewable diesel remains open,” said Kurt Kovarik, NBB’s Vice President of Federal Affairs.

“EPA’s retroactive small refinery exemptions destroyed demand for more than 360 million gallons of biodiesel and renewable diesel over the past sixteen months. EPA is right now preparing to grant another flood of retroactive exemptions, which will further undercut use of advanced biofuels for the rest of 2019 and into the future. The legislation would prevent further economic harm to U.S. biodiesel producers and soybean growers. NBB and its members will continue to ask EPA to restore that lost demand and ensure that annual RFS volumes are met with actual renewable fuel use.”

Over the past two years, EPA retroactively granted RFS hardship exemptions to nearly every refiner that petitioned. The retroactive exemptions reduced RFS RVOs for 2015, 2016, and 2017. NBB conservatively estimates the demand destruction at 364 million gallons of biomass-based diesel. University of Illinois Economist Scott Irwin estimates the economic harm to U.S. biodiesel producers at $7.7 billion dollars.

RFA Statement on Renewable Fuel Standard Integrity Act of 2019

Today, House Agriculture Committee Chairman Collin Peterson (D-MN) and Representative Dusty Johnson (R-SD) introduced the Renewable Fuel Standard Integrity Act of 2019. The bill would require refineries seeking an exemption from the RFS to submit petitions in a timely manner so that any waivers granted would be prospectively reallocated to non-exempt obligated parties. The legislation also would enhance transparency by ensuring that key information surrounding small refinery exemptions is publicly disclosed. Renewable Fuels Association President and CEO Geoff Cooper issued the following statement in support:

“The ethanol industry thanks Chairman Peterson and Rep. Johnson for their leadership and proactive efforts to rein in EPA’s abuse of the small refiner exemption program. This bipartisan bill would prevent companies like ExxonMobil, Chevron, Holly Frontier, and CVR from further gaming the system and undercutting the Renewable Fuel Standard. For five years in a row, EPA has failed to enforce the RFS conventional biofuel volume requirements set forth by Congress, even though there has been ample supply available at a low cost to meet the statutory volumes. The consequences of EPA’s chronic mismanagement of the RFS have been economically devastating for ethanol producers, farmers, and consumers alike.

“In recent years, the Congressionally required RFS volumes have been undermined by a surge in secretive small refiner exemptions and an abject failure on the part of EPA to reallocate those exempted volumes. This bill would put an end to EPA’s destructive practices by effectively requiring the reallocation of any waived volumes and ensuring the statutory volumes are fully enforced. We applaud Chairman Peterson and Rep. Johnson for their work to restore transparency and integrity to the RFS.”

Growth Energy Backs Bipartisan Renewable Fuel Standard Integrity Act of 2019

Today, Chairman of the U.S. House Committee on Agriculture Collin Peterson (D-MN), along with Reps. Dusty Johnson (SD-At Large), Dave Loebsack (IA-04), Rodney Davis (IL-13), and Roger Marshall (KS-01), introduced the bipartisan Renewable Fuel Standard Integrity Act of 2019, legislation that would bring much-needed transparency to the U.S. Environmental Protection Agency’s (EPA) secretive small refinery exemption (SRE) process and ensure refiners meet their biofuel blending requirements. Growth Energy CEO Emily Skor gave the following statement in support of the legislation:

“The real economic hardship is happening in our nation's farm belt, and not among its largest refiners,” said Skor. “In 2018, Big Oil saw record profits, while in America’s heartland, quarterly farm income has dropped $11.8 billion since December and ethanol consumption fell for the first time in 20 years - contributing to the steepest drop in farm income since 2016. The rapid escalation of small refinery exemptions compounds these factors, and makes an already-bleak economic environment even worse.

“We applaud Reps. Collin Peterson, Dusty Johnson, Dave Loebsack, and Rodney Davis for their steadfast commitment to supporting a fair and open process for small refinery exemptions. There is an urgent need to address the lack of transparency over small refinery exemptions, and reallocate the 2.6 billion lost gallons of biofuels demand as a result of these continued handouts to oil refineries.”

Currently, refiners have no deadline when submitting a request for a small refinery exemption, which allows them a secretive, backdoor way to avoid their legal obligations. The bipartisan Renewable Fuel Standard Integrity Act of 2019 sets the deadline for refineries to submit an application for an SRE by June 1st, as well as requires EPA to re-allocate exempted gallons so that biofuel targets are met in earnest. Additionally, the legislation prevents refineries from claiming submitted info as confidential business information, allowing the public greater insight into who is receiving these waivers and why.

ACE statement on Renewable Fuel Standard Integrity Act of 2019

Today, House Agriculture Committee Chairman Collin Peterson (D-MN) and Representative Dusty Johnson (R-SD) introduced the Renewable Fuel Standard Integrity Act of 2019, legislation that addresses the timing and transparency issues associated with the small refinery exemption (SRE) program under the RFS. The bill would set a deadline for refineries to submit petitions for RFS exemptions to ensure granted waivers are prospectively reallocated to non-exempt obligated parties, as well as require that key information surrounding the SREs is publicly available. American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following statement in support:

“ACE thanks Chairman Peterson and Rep. Johnson for bipartisan legislation to correct EPA’s brazen mismanagement of the RFS small refinery exemption provision. Under President Trump, EPA has retroactively granted more than 50 so-called hardship waivers for small refineries, erasing 2.61 billion gallons worth of the RFS blending obligations for 2016 and 2017 compliance years, and has 39 more requests pending for 2018.

“The uptick of waivers without reallocation as required by law has undermined Congressional intent of the RFS. This legislation would help ensure EPA’s abuse of small refinery exemptions is put to a stop by requiring timely reallocation of any granted waiver and ensuring the statutory RFS volumes are enforced. ACE is grateful for the leadership of Chairman Peterson and Rep. Johnson to help get the RFS back on track by following the rule of law.”

ACE revisits Tijuana to provide more in-depth ethanol information for returning and prospective retailers

This week, American Coalition for Ethanol (ACE) Senior Vice President Ron Lamberty returned to Tijuana, the western-most city in Mexico and largest city of Baja California State which borders Southern California. This trip marks his fourth time to the country this year to speak at ethanol technical information forums for Mexican petroleum equipment installers and retailers. The forums are a joint effort of the U.S. Grains Council (USGC) and the Mexican Association of Service Station Suppliers (AMPES), to inform Mexican petroleum marketers about opportunities in sourcing, marketing, and retailing ethanol-blended gasoline, as Mexico’s transportation fuel sector evolves.

“This is my eleventh marketer workshop with the U.S. Grains Council in the past year and a half, and the workshops, along with a multitude of other efforts in Mexico, are working,” Lamberty said. “More Mexican retailers are buying ethanol–mostly E10 purchased at U.S. terminals and delivered to stations in the northern states, like here in Baja California–and interest is increasing all over the country.”

Because it’s only minutes from San Diego’s fuel terminal, some Tijuana retailers are already selling E10, and the city is expected to be a top destination for U.S. ethanol in the short-run. Tijuana is also a major gateway to the interior of Mexico for road transportation, and by sea via the port of Ensenada. Fuel ethanol consumption in Mexico is still low, with its use as a transportation fuel not permitted until 2017 and lack of private infrastructure, but over 30 fuel terminals are currently under construction in Mexico. Mexico’s refineries operate far below capacity, with 70 percent of the fuel sold in the country imported.

“Recent workshops in Mexico have included discussions with state and federal ag and energy officials, and in addition to ethanol’s low cost for retailers and consumers, one of the messages hitting home with them is ethanol’s ability to reduce refinery operating costs,” Lamberty added. “While I’ve railed against U.S. refineries “stealing” octane by switching the U.S. base gasoline to 84-octane v-grade, older refineries like the ones owned by the Mexican government could last longer by making lower octane base fuels and using ethanol for octane. We’re making it clear that it’s not ethanol versus gasoline, it’s ethanol to add octane, lower emissions, and bring down the cost of gasoline.”

Last month, Lamberty spoke at an ethanol technical forum in Tuxtla Gutiérrez. Other cities he’s visited include Monterrey, Mérida, Mexico City, Xalapa, Chihuahua, León, and Guadalajara. Interest increases at each event and ACE will continue to work with USGC to provide information to retailers and others.

CME Group Reaches New Open Interest Record of 140.5 Million Contracts

CME Group, the world's leading and most diverse derivatives marketplace, announced total open interest (OI) reached a record 140,537,653 contracts on May 21, 2019. Since the end of 2018, overall OI has grown 22%.

Interest Rate futures and options OI surpassed 100 million contracts for the first time yesterday, reaching 100,035,345 contracts. Interest Rate OI has been climbing steadily in 2019, increasing 30% since 2018 yearend. Additionally, options complex OI reached a record 85,509,328 contracts, growing 36% since the end of 2018.

OI represents the number of active positions that market participants are holding open without taking delivery or offsetting, a measure that typically increases during times of market uncertainty. 

NGFA urges STB to develop principles, guidance governing rail demurrage and accessorial charges and practices

The National Grain and Feed Association (NGFA) urged the federal Surface Transportation Board (STB) to develop policy principles or guidance to discipline Class I rail carrier demurrage and accessorial charges and practices during a two-day public hearing conducted by the agency that concludes today.

The NGFA said an outcome of the oversight hearing should be the agency directing the Class I railroads to modify their tariffs and practices to comply with policy principles or guidance that ensure rail carrier tariffs implementing demurrage and accessorial charges are commercially fair, commercially practicable and reciprocal in nature, imposing comparable penalties on railroads if they fail to perform. The NGFA also urged the STB to retain oversight to monitor changes in railroads’ tariffs in accordance with the agency’s directives.

“We believe that in far too many cases, current demurrage and accessorial charges and practices are egregious and merely exemplify the market power of today’s Class I railroads, reflecting their ability to unilaterally impose one-sided terms and conditions on their customers,” testified NGFA President and Chief Executive Officer Randy Gordon. “Frankly, NGFA members in some segments of our industry believe they are at a ‘tipping point’ in their relationship with Class I rail carriers” because of these and other practices, particularly with the increased adoption of the so-called precision scheduled railroad operating model.

NGFA’s testimony, as well as a 43-page written statement submitted previously to the agency, highlighted numerous specific examples of railroad demurrage and accessorial tariffs that are not commercially fair, practicable or reciprocal, and result in individual rail customers incurring millions of dollars in charges even when operating efficiently. Data submitted to the STB by the seven U.S. Class I railroads showed that they generated more than $1.43 billion in demurrage and accessorial charges from rail customers in 2018 alone, and are on a pace to exceed that level in 2019 based upon first-quarter filings.

“At a minimum, to be reasonable, demurrage and accessorial tariff provisions should clearly establish the conditions for when a rail customer is not liable for such charges, either because the carrier is at fault or because of other circumstances beyond the rail customer’s control,” the NGFA said. “But true reciprocity and commercial fairness goes a step beyond waiver or non-payment of charges because the harm to rail customers extends beyond the amount of the charge to the harm to their investment in railcars and other facility assets, as well as disruptions to their business operations, including plant shutdowns or slowdowns, the need to use alternative transportation modes, the need to source commodities on an emergency basis and disruptions to their supply chains and customers.”

Demurrage historically has referred to charges imposed by railroads that are intended to encourage the efficient utilization of rail assets, including railcars and locomotives. Meanwhile, accessorial charges are not defined by any statute or regulation, but generally refer to a wide array of rail services and activities not included in demurrage or the line-haul freight charge.

The NGFA said the majority of complaints received from its members about commercially unfair and non-reciprocal demurrage and accessorial charges were associated with the Union Pacific (UP) and Norfolk Southern (NS) Railways. But NGFA noted it also received multiple complaints involving the BNSF, Canadian Pacific (CP), Canadian National and CSX railroads.

Among other things, the NGFA cited several railroads’ practice of reducing the so-called “free-time” for loading and unloading cars to as little as zero days from the previous 48 to 72 hours. “Such tariffs should be ruled to be presumptively unreasonable,” the NGFA said, with a minimum of 24 to 48 hours of free time provided to a rail customer to load or unload railcars once the train actually is placed at the customer’s facility.

NGFA also referenced the absence of language in railroad tariffs regarding equitable reciprocal penalties that should apply to railroads if they are the cause for delays in loading or unloading railcars or efficient utilization of rail assets. One such example involves a UP tariff that imposes a “not-prepared for service” charge on rail customers but does not adequately address commensurate penalties when the UP does not deliver trains on schedule or does not provide adequate notification time to customers. Another UP tariff imposes a $10,000-per-occurrence charge on a unit train customer if it cancels the order within 48 hours of the forecasted date of release of the train. But there is no reciprocal penalty on UP when its locomotives and crews do not arrive to pick up a loaded train within that same timeframe, which can congest a facility’s track space and prevent it from receiving or shipping other trains. 

NGFA also cited the NS for having a flawed and commercially unfair demurrage debit-and-credit system – including providing zero credits for loading or unloading privately owned or leased cars and unfair storage charges for railcars sitting in its serving yards, yet not committing to serve the facility within a specific time frame. NGFA also informed the STB of numerous unfair and unreasonable CP tariff provisions, including those that impose a $500-per-car fee on rail customers for diverting a car, even if CP is responsible; a $125-per-mile charge for special train service even if CP is at fault, and a $110 fee assessed on rail customers that successfully challenge the accuracy of a CP invoice.

In this regard, NGFA also expressed concerns about the Class I railroads’ generally cumbersome and tedious processes for resolving disputes when rail customers challenge an inaccurate demurrage or accessorial charge invoice. In essence, Class I railroads have placed the entire burden on their customers to prove the charges are not valid, and given themselves sole discretion to reject or modify an invoice that is subject to a rail customer challenge, NGFA said.

NGFA also called out the phenomenon of “bunching” of railcars at a customer’s facility, i.e., when railroads deliver more cars for loading or unloading than the shipper or receiver has ordered or whose facility can handle, while still imposing demurrage or accessorial charges on the customer for those cars. Railroad tariffs should be required to contain language that specifically states when charges will be waived because of bunching, NGFA said, as well as whether penalties should apply to the railroad if bunching results in congestion at the rail customer’s facility.

NGFA stressed that the lack of reciprocity in railroad tariffs – imposing the same penalties on railroads for failure to perform as those imposed on their customers – is particularly important now that more than 70 percent of the nation’s railcar fleet is owned or leased by rail customers, rather than the railroads, a marked departure over the last several decades. In the agricultural sector, rail shippers and receivers now own or lease 100 percent of the tank cars and nearly 80 percent of grain hopper cars. 

In addition, NGFA said, many rail customers have invested tens of millions of dollars at individual facilities to acquire, expand, operate and maintain track and other physical loading and unloading assets, as well as hired additional personnel to perform tasks previously done by the railroads. These activities include loading and unloading cars, inspecting cars and trains prior to departure, switching cars between tracks within a plant, assembling unit and manifest trains, and building side tracks for railcar storage.

“NGFA believes it is very clear that the STB needs to step in and take action to provide policy and guidance to restore balance to demurrage and accessorial practices, and it has the authority to do so as an outcome of this proceeding,” NGFA concluded.

Sentera FieldAgent™ Delivers Advanced Analytics and Field Insights to More Farmers Through the Climate FieldView™ Platform

Today, Sentera announced an expanded platform partnership with The Climate Corporation (Climate), a subsidiary of Bayer, that will provide advanced plant population and weed pressure analytics from Sentera to the Climate FieldView™ digital agriculture platform. Through this continued partnership, both companies are further delivering the value of data-driven, digital tools  for mutual farmer customers throughout the growing season.

"Sentera and Climate are committed to providing farmers and their agronomic partners accurate, relevant data insights that are easy to access," said Eric Taipale, CEO of Sentera. "Through the new integration of our stand count and weed pressure analytics in FieldView, we're giving more farmers the ability to easily visualize their field data, detect issues fast and quickly make more informed management decisions, within one digital ecosystem. Users don't have to manage multiple apps, log-ins, and passwords to make use of Sentera's analytics in FieldView, and we can focus on gathering data and delivering insights."

Once the connection is established, FieldAgent will automatically sync with each customer's FieldView account, providing new data insights to better inform economic and agronomic decisions.

"FieldAgent's integration with the Climate FieldView platform provides our customers with real time, AI-driven-analytics throughout the growing season," said Mark Young, CTO and Head of Product for The Climate Corporation. "Together we provide farmers with valuable tools and the data insights they need to efficiently manage their farming operations and improve profitability. "

The integration between FieldAgent and Climate FieldView is active and available today. For a limited time, any FieldView customer who integrates selected Sentera analytics solutions with an eligible FieldView account will receive 12-months of unlimited stand count analysis. These users can also add 12 months of unlimited weed pressure mapping for $500 (a $1,000 value).

No comments:

Post a Comment