Tuesday November 26 Ag News

Nebraska Farm Bureau Pushes EPA to Keep Promise, Uphold RFS

The Nebraska Farm Bureau is pushing the Environmental Protection Agency (EPA) to keep its promise as it relates to protecting the integrity of the federal Renewable Fuels Standard (RFS). The RFS program was established by Congress in 2005 to help reduce greenhouse gas emissions and expand the nation’s renewable fuels sector to reduce U.S. reliance on imported oil. The boost to renewable fuels, farmers, and the renewable fuels sector from the RFS has been a tremendous success for the country and the rural economy, yet in recent years, the EPA has significantly expanded the amount of biofuel blend waivers issued to small oil refineries, undercutting the integrity of the RFS and significantly lowering the amount of biofuels blended into the U.S. fuel supply. The actions have subsequently diminished demand for corn and ethanol, contributing to the slowed agriculture economy.

“The amount of small refinery exemptions issued by EPA has skyrocketed since 2016, with EPA most recently announcing 31 waivers for the 2018 RFS compliance year alone. During that span, EPA exempted more than 4 billion gallons of renewable fuel obligations to the detriment of our farmers, renewable fuels partners, and consumers looking for a more affordable and environmentally friendly fuel alternative,” said Steve Nelson, Nebraska Farm Bureau president. “In October, EPA and the administration promised they would work to address the situation regarding the issuance of small oil refinery exemptions, yet EPA’s official proposal to remedy the situation falls short of what was promised.”

The EPA’s pending proposal does not change the proposed RFS blend volumes for 2020 or 2021, but instead proposes adjustments to the way annual renewable fuel percentages are calculated. EPA and the administration’s initial announcement hinted the agency would project the volume of gasoline and diesel that would be exempt in 2020 from small refinery exemptions based on a three-year rolling average of exemptions. While the three-year average would not totally reallocate lost gallons, it was viewed by Farm Bureau and many biofuel supporters as a step in the right direction. However, the actual EPA proposal is substantially different than what was promised, with the proposal designating the three-year rolling average be based on relief recommended by the Department of Energy, not on actual exemptions granted.

“This is a major point of contention, as there is often a disconnect between how many gallons are recommended by the Department of Energy to exempt through full or partial exemptions and what the actual exemptions end up being. Rather than simply making good on promises made by the president and the EPA that the RFS target of 15 billion gallons be met, it appears the EPA moved the goal post again, with this proposal leading the RFS to backslide to just 14.4 billion gallons of biofuel in 2020,” said Nelson. “To ensure accurate accounting for the waivers in 2020 and beyond, and to keep the promise, EPA must use the rolling average of actual exemption volumes from the three most recently completed compliance years.”

In pushing EPA to meet its promise, the organization thanked the agency and the administration for its work to make E-15 fuel available year-round.

“We recognize and appreciate the work of the agency and administration on biofuels in other areas, but this proposal fails to account for the real harm caused by the EPA from the excessive use of small refinery waivers. Expansion of markets for renewable fuels is a Nebraska Farm Bureau policy priority and critical to both farmers and consumers. It’s imperative EPA respect the original intent of Congress and provide certainty to the renewable fuels marketplace,” said Nelson.

EPA is accepting public comments on the proposal through November 29. Those looking to comment on EPA’s proposal can do so by visiting www.nefb.org and clicking the “Take Action” button.



HIGH QUALITY HAY STILL BRINGS TOP DOLLAR
Bruce Anderson, NE Extension Forage Specialist

               Market gurus say to make profits you must buy low and sell high.  What market gives you that opportunity today?  The stock market - no - it's the hay market!

               High rainfall in many areas produced high yields of both grass and alfalfa hay this year.  Combine that with high carryover from last year plus lots of crop residues available and you get an abundance of forage for this winter. And when winter forage is abundant, hay prices go down.

               All this rain also led to some poor hay making weather which has resulted in a shortage of really high quality alfalfa.  As a result, some alfalfa growers in Nebraska are receiving over 200 dollars per ton for superior quality dairy hay and over 150 dollars for good grass hay.

               But why should you care?  You don't have any extra alfalfa or grass hay.  You plan to use all your hay for your own cattle.

               Well, just think about this.  Suppose someone offered you 150 dollars per ton for your better alfalfa.  Could you find other hay nearby that you could make work for your animals that would only cost you around 100 dollars?  If you can, maybe you can sell high, buy low, and pocket the profits.

               So, how do you find these buyers?  It may take some work.  You could post notices at truck stops, place ads in newspapers and magazines, or set up a sign by your driveway.  But, there are more effective ways to contact buyers.  One is to place your hay on a computer listing in the dairy states.  Maybe an even better way is to work with hay dealers or become a member of a marketing group, like the Nebraska Alfalfa Marketing Association, to take advantage of all their market connections.

               You may need some luck and do some work to be able to buy low and sell high.  Smart operators look for these opportunities.



U.S. Pork Can Reduce Overall U.S. Trade Deficit with China by Nearly Six Percent

Securing zero-tariff access to China for U.S. pork would be an economic boon for American agriculture and the country, according to the National Pork Producers Council (NPPC). Based on an analysis by Iowa State University (ISU) Economist Dermot Hayes, NPPC says unrestricted access to the Chinese chilled and frozen market would reduce the overall trade deficit with China by nearly six percent and generate 184,000 new U.S. jobs in the next decade. NPPC today launched a digital campaign to spotlight the importance of opening the Chinese market to U.S. pork as trade negotiations continue.

"Were it not for China's tariffs that are severely limiting access to American goods and other restrictions, including customs clearance delays, U.S. pork could be an economic powerhouse, creating thousands of new jobs, expanding sales and dramatically slashing our nation's trade deficit. China's actions would unleash tremendous benefits to U.S. pork producers, our nation and Chinese consumers who rely on this essential protein," said Hayes.

According to Dr. Hayes' analysis, U.S. pork sales would generate $24.5 billion in sales if U.S. pork gained unrestricted access to the world's largest pork-producing nation over 10 years.

"The U.S. pork industry is missing out on an unprecedented sales opportunity in China when it most needs an affordable, safe and reliable supply of its favored protein," said NPPC President David Herring, a hog farmer from Lillington, N.C. "The United States is the lowest-cost producer of pork in the world, but with 72 percent tariffs we are not nearly as competitive as Europe, Brazil, Canada and other nations."

Pork is a staple of the Chinese diet and a major element of the country's consumer price index. China's swine herd has been devastated by African swine fever, a disease affecting only pigs with no human health or food safety risks, reducing domestic production by more than 50 percent and resulting in a mounting food price inflation challenge for the country.

NPPC has launched a digital communications campaign to broaden awareness for the unique opportunity for U.S. pork in China.



2020 ALFALFA VARIETY RATINGS – HOT OFF THE PRESS

The National Alfalfa & Forage Alliance (NAFA) released the 2020 edition of its popular “Alfalfa Variety Ratings - Winter Survival, Fall Dormancy & Pest Resistant Ratings for Alfalfa Varieties” - a useful tool for hay and dairy farmers, extension specialists, agri-business personnel or anyone involved in the production of alfalfa.    

NAFA’s Alfalfa Variety Ratings is a publication unlike any other in providing an extensive listing of alfalfa varieties and their corresponding ratings for fall dormancy, winter survival, bacterial wilt, aphanomyces, leafhopper, and a host of other pests. The publication also includes other ratings such as grazing tolerance and standability to provide you the information you need to make educated decisions about the alfalfa varieties which will perform best in a given environment. All varieties listed in the Alfalfa Variety Ratings publication can be purchased in the United States for the 2020 production year.

     The 2020 edition of NAFA’s Alfalfa Variety Ratings features 182 alfalfa varieties from 17 marketers and has been verified with the Association of Official Seed Certifying Agencies (AOSCA) and the National Alfalfa Variety Review Board (NAVRB).

     If you’d prefer an electronic option, try NAFA’s searchable, online Alfalfa Variety Ratings database where you can make the process of narrowing alfalfa varietal choices even easier. Available at alfalfa.org/varietyratings.php, NAFA’s searchable database allows you to search for varieties using up to 23 different parameters like variety name, marketer, fall dormancy, winter survival, disease resistance, and insect resistance. NAFA has made finding the perfect variety as effortless as possible.

NAFA’s Alfalfa Variety Ratings publication is available in the November issue of Hay & Forage Grower magazine or by visiting NAFA’s website at alfalfa.org.

NAFA’s Alfalfa Variety Ratings is a must-have for anyone involved in the production of alfalfa – be sure to get yours today!



FY 2020 U.S. Exports Forecast Up $2.0 Billion to $139.0 Billion; Imports at $132.0 Billion
USDA Economic Research Service

U.S. agricultural exports in Fiscal Year (FY) 2020 are projected at $139.0 billion, up $2.0 billion from the August forecast, driven by higher soybean, pork, and dairy export forecasts. Soybean exports are up $1.2 billion to $18.0 billion as a result of higher unit values. Pork exports are raised $400 million, largely due to demand from China. Dairy product exports are up $300 million to $5.8 billion as volumes and unit values are expected to strengthen. The beef export forecast is reduced $200 million, reflecting lower unit values. Overall livestock, poultry, and dairy exports are forecast at $31.9 billion, $500 million higher than the August projection. Cotton exports are raised by $300 million to $6.1 billion from higher unit values. The grain and feed export forecast is lowered $600 million to $29.5 billion due to strong competition facing wheat and corn. Horticultural exports are unchanged at $35.5 billion. Agricultural exports to China are forecast at $11.0 billion, an increase of $3.5 billion from August, on higher expected soybean, and pork sales.

U.S. agricultural imports in FY 2020 are forecast at $132.0 billion, up $3.0 billion from the August forecast, primarily due to expected increases in fresh fruits and grain products. Fresh fruit imports are raised $1.7 billion to $15 billion, largely due to increased deliveries of avocados, berries, and melons from Mexico.



RFA Review of 2020 Vehicle Models Reveals Good News for E15, Bad News for Flex Fuels

A new analysis of vehicle owner's manuals and warranty statements by the Renewable Fuels Association reveals that nearly all new 2020 automobiles are explicitly approved by the manufacturer to use gasoline containing 15 percent ethanol (E15). However, RFA’s annual review also shows automakers are offering far fewer model year 2020 flex fuel vehicles (FFVs) capable of running on blends containing up to 85 percent ethanol (E85).

According to the RFA analysis, manufacturers responsible for 95 percent of U.S. light-duty vehicle sales unequivocally approve the use of E15 in their model year 2020 automobiles. For the first time ever, BMW models will carry the manufacturer’s approval to use E15; in fact, the BMW Group approves the use of up to E25 in its 2020 models, including its line of Mini automobiles.

“As this analysis shows, virtually all new cars, SUVs, and pickups are approved by their manufacturers to use E15, a lower-cost, higher-octane, cleaner-burning fuel available today at more than 1,900 retail stations in 30 states,” said RFA President and CEO Geoff Cooper. “RFA has worked diligently with the automakers over the past decade to ensure a smooth market transition to E15, and we are thrilled that each year more manufacturers recognize the benefits of E15 to their customers. We are especially pleased that beginning with the 2020 model year, BMW now approves not just E15—but up to E25—in its new vehicle offerings.”

For the ninth consecutive year, all new General Motors vehicles are clearly approved to use E15, while Ford has explicitly endorsed E15 in eight straight model years. Among major manufacturers, only Mercedes-Benz, Mazda, Mitsubishi, and Volvo—representing less than 5 percent of U.S. sales collectively—do not include E15 as an approved fuel in their owner's manuals.

RFA estimates that nearly 97 percent of the registered vehicles on the road today are legally approved by the U.S. Environmental Protection Agency to use E15, and almost half of those vehicles also carry the manufacturer’s endorsement to use E15. In 2011, the EPA approved the use of E15 in cars and light-duty trucks built in 2001 or later. However, automakers did not start including E15 as an approved fuel in owner's manuals and warranty statements until 2012, the year E15 was first sold commercially.

Meanwhile, automakers continue to dramatically curtail production of FFVs. Only two automakers—Ford and General Motors—are offering FFVs in model year 2020. Just 16 models will be available as FFVs in 2020, with six of those models available only to fleet purchasers. That’s down from more than 80 different models from eight manufacturers being available to consumers as recently as 2015.

“It is frustrating and disappointing to see automakers hitting the brakes on FFVs, especially at a time when more consumers are actively seeking out E85 and other low-carbon flex fuels,” said Cooper, pointing out that E85 sales in California have quadrupled since 2013 and doubled in just the last two years. “EPA has failed to maintain meaningful incentives for FFV production, and the auto industry has responded by abandoning this low-cost, high-impact technology. Not only do flex fuels like E85 save drivers money at the pump, but they also significantly reduce greenhouse gas emissions and harmful tailpipe pollution. Rather than encouraging more petroleum use, our lawmakers, regulatory officials, and automakers should be taking definitive actions to put more—not fewer—FFVs on the road.”

As RFA advocates for more FFVs on the policy and regulatory front (such as with this correspondence to EPA on its recent FFV credit guidance to automakers), it also encourages drivers to make their voices heard—not just with political officials, but with the auto industry itself. One way to do that is by signing this online grassroots petition asking automakers to offer more models designed to run on “high-octane, low-carbon ethanol blends such as E20, E30 and E85.”

At present, there are more than 4,800 gas stations selling E85 and other flex fuels, and more than 1,900 selling E15.



 ACE urges EPA to get RFS back on track

The American Coalition for Ethanol (ACE) submitted comments today to the Environmental Protection Agency (EPA) on its proposed supplemental rulemaking to the 2020 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS).

ACE CEO Brian Jennings detailed three areas in which the proposal falls short in ACE’s written comments, including the proposed rule (1) does nothing to reallocate the 85 Small Refinery Exemptions (SREs) from 2016 through 2018 which eroded more than 4 billion gallons from statutory levels, (2) represents a missed opportunity to restore 500 million gallons unlawfully waived from the 2016 compliance year, and (3) betrays the deal on how to ensure at least 15 billion gallons in the RFS for 2020 and beyond.

ACE’s comments underscore that this proposal does not reflect the original deal, and rather, “in a classic bait and switch, EPA’s proposal brazenly attempts to paper over the fact that actual waived SRE volumes from 2016 through 2018 were double what the Agency is proposing to reallocate for 2020.”

This is another example of EPA’s double-standard with the RFS. “…when it came to helping refineries escape RFS obligations, EPA rejected Department of Energy (DoE) recommendations to exercise restraint, but now that EPA must restore volume to the RFS, the Agency is suddenly embracing DoE recommendations because the result will keep a lid on refinery blending obligations going forward.”

The written comments reinforce this point by referencing direct quotes from interagency review documents posted on regulations.gov which reveal email exchanges between Trump administration officials about the deal reached with the President. An October 11 interagency reviewer commented to EPA that “the alternative is inconsistent with the WH decision last week to ensure that more than 15 billion gallons of conventional ethanol be blended into the nation’s fuel supply beginning in 2020…”

In addition to ACE’s specific comments about the 2020 volume and accounting for future waivers, Jennings’ remarks highlight the radical changes made to the EPA’s handling of SREs with explicit evidence that the Trump administration acknowledges this departure from the norm. The comments also provide data on how the issuance of numerous retroactive SREs impacts the RIN marketplace, and mentions ACE and its allies court challenges to the mismanagement of the SRE provision. The comments conclude by urging EPA to finalize a rule that reallocates the actual average volume waived from 2016 through 2018 and ensures at least 15 billion gallons for the 2020 compliance year.



Growth Energy Welcomes The Andersons as Newest Producer Plant Member

Growth Energy, the world’s largest ethanol trade association, announced the addition of The Andersons, Inc. as its newest producer plant member. This addition brings Growth Energy’s membership to a total of 103 producer plant members and 8.7 billion gallons represented out of the total U.S. annual ethanol production.

Founded in Maumee, Ohio, in 1947, The Andersons is a diversified company rooted in agriculture, conducting business across North America in the grain, ethanol, plant nutrient, and rail sectors. It co-owns ethanol plants in Albion, Michigan; Logansport, Indiana; Greenville, Ohio; Denison, Iowa; and Colwich, Kansas, which have a combined production capacity of more than 545 million gallons a year. The company’s Colwich facility, which operates under the entity ELEMENT, LLC, and is a partnership with ICM, Inc., opened in August 2019 and is expected to be the most efficient dry mill ethanol plant in the U.S.

In her statement, Growth Energy CEO Emily Skor welcomed The Andersons to the association:

“We are extremely proud to now represent The Andersons among our growing and diverse membership,” said Skor. “The story of The Andersons is a familiar one to many across the heartland — where innovation, hard work, and enduring relationships serve as the foundation of the company’s success. As the U.S. ethanol industry has grown, The Andersons has been a pivotal player for nearly 20 years, working to expand homegrown ethanol and increase its accessibility at the pump. We look forward to continuing our work with The Andersons and utilizing its diverse agricultural expertise as part of our association.”

Jim Pirolli, president of The Andersons Ethanol Group, emphasized the company’s excitement in joining Growth Energy:

“The Andersons is excited to join Growth Energy and its other members in supporting policy for a pro-ethanol market environment and boosting the accessibility of high-ethanol blends at the pump,” said Pirolli.