Friday December 27 Ag News

Increased Ag Trade Deals at the Top of Nebraska Corn’s Christmas List

As 2020 approaches, many farmers across the state are breathing a collective sigh of relief as one of the most challenging years in recent memory is drawing to a close. Extreme weather throughout 2019, stagnant farm incomes, EPA’s waivers to oil refiners and trade disputes have led to a year of uncertainty for the agricultural industry. Fortunately, as 2019 wraps up, there have been positive movements on the trade front, which corn farmers are hopeful will lead to a productive 2020.

Late last week, the U.S. House of Representatives overwhelmingly voted in favor of the United States-Mexico-Canada Agreement (USMCA) paving the way for increased market access to two of the largest customers of Nebraska’s corn and corn-related products. In fact, total Nebraska ag exports to Canada and Mexico equate to $1.46 billion, with corn exports totaling over $402 million, ethanol at $96 million and distillers grains at $27 million.

“We’re glad the House was able to work in a bipartisan way to do what was good for American agriculture,” said David Bruntz, chairman of the Nebraska Corn Board (NCB) and farmer from Friend. “We’ve been waiting for this agreement for a long time, so we’re looking forward to its rapid approval by the Senate in early-January.”

The NCB and the Nebraska Corn Growers Association (NeCGA) are pleased with the ratification of the U.S.-Japan Trade Agreement, which will take effect Jan. 1, 2020. Japan is the No. 2 buyer of U.S. corn, purchasing more than $2 billion in the most recent marketing year. The agreement reduces U.S. corn imports for all purposes to a zero-level tariff and includes a staged tariff reduction for U.S. ethanol and corn. U.S. feed and food corn, corn gluten feed and distillers grains will continue to receive duty-free market access.

Finally, Nebraska’s corn industry is encouraged by a potential trade agreement with China. The U.S. and China recently announced “Phase one” of an agreement that reduces some U.S. tariffs. In return, U.S. officials say China will purchase significantly more American agricultural products.

“The trade landscape has been perplexing for some time, but I think we’re beginning to see real progress,” said Dan Nerud, president of the NeCGA and farmer from Dorchester. “I’m hopeful recent agreements will all be positive for our ag industry in Nebraska and can also be used as templates for future agreements with other partners.”

NCB and NeCGA are thankful and appreciative for our state’s congressional delegation for their continued support of fair and free ag trade.



BACK TO THE FUTURE
Bruce Anderson, NE Extension Forage Specialist

               As the year ends, it helps to look back at the good and bad of this year’s production and learn what might be done better next year.

               For example, did you take an extra late cutting of alfalfa last fall because of good September and October growth?  I’ll bet that hay was super quality, so either sell it for a premium price or use it only for special feeding situations.  This coming spring, though, it may grow a little slower at first.  If so, let it start to bloom before cutting.

               Did your pastures or hay fields receive flood damage?  Many of these sites need reseeding.  Carefully consider what you will plant and then obtain the seed.  Then make sure you, your planting equipment, and the field is ready when planting time comes.

               Even without flooding, remember how wet and cool it was last spring?  Maybe you ran out of hay and damaged pastures by grazing muddy fields.  Extra hay, sacrifice pasture areas, or rapid movement through multiple paddocks may reduce problem damage if it happens again.    

               With all the rain last year, you may have had plenty of grazing available all season or even extra for winter grazing.  You probably could have had even more grazing available if you planned ahead.

               More likely this year, though, it will be drier.  Normally, when do your pastures run out?  Mid-summer?  Late summer?  Fall?  You have plenty of options among annual forages to fill any gaps – forages like sudangrass, pearl millet, oats, and turnips.  Plant, and use these temporary feeds when your other pastures are stressed so you have plenty of grazing for your cattle.  And maybe your regular pastures will bounce back quicker as well.

               We all can do better next year than we did this year.  One of the best ways to accomplish this goal is to look back to learn what we hope to do better in the future.  Have a Happy New Year.



2nd Annual Nebraska Cattlemen Gala

Nebraska Cattlemen (NC) invites everyone to attend our 2nd Annual NC Gala on January 11th, 2020 at Kirk’s Nebraskaland in Lexington, Nebraska beginning at 6:30pm CST. The evening will be filled with great food, entertainment and fundraising for the Nebraska Cattlemen Political Action Committee. Please consider sticking around after the program for the live band.

During the program there will be an auction. A few of the items being auctioned off are listed below:
    UNL Basketball Tickets
    Party Package
    BBQ Package
    Bruning Farms Sale Packet
    4 Tickets to NCAA World Series
    Gourmet Beef Dinner for Six in Friend
    Wall Hanging
    1 ton Alfalfa Pellets
    $100 Gift Card to the Fort – Columbus
    Cookie Package
    Wine Bottle Holder (includes 3 bottles of wine)

A huge thank you to all those who have donated to our NC Gala auction. You won’t want to miss this fun event, please mark your calendars for January 11th! Tickets can be purchased by calling (402) 475-2333 or at any Bruning Bank Location. You may also purchase tickets online at: https://nebraskacattlemen.org/event/nc-gala/.

The NC State PAC helps ensure the interests of beef producers are maintained in Nebraska. The aim of the NC State PAC is to support candidates who champion the beef industry by making decisions about laws and regulations that enhance the business climate for profitable beef production in Nebraska and foster opportunities for expansion. NC will always be judicious with our contributions to support the strongest candidates regardless of party.

This event is sponsored by Neogen and the beef meal donated by Lone Creek Cattle.



USMEF Looks to Expand Pork Opportunities in Hong Kong

The U.S Meat Export Federation is planning to fill the fresh pork supply shortfall in Hong Kong with U.S. chilled pork. The African Swine Fever Virus caused the number of live hogs coming into Hong Kong from China to drop by fifty percent, with the numbers running below 2,000 head per day. “This has caused a shortage of local, fresh pork, and the fresh pork product that is available is being sold at much higher prices,” says Joel Haggard, USMEF senior vice president for the Asia Pacific. He says the opportunity could benefit the U.S. industry in both the short and long term, as more Asian consumers get used to chilled pork. “The opportunity for more pork supplies has never been better,” Haggard adds. It does take a bit more time shipping to Hong Kong than it does to Japan and Korea. Also, the wet market vendors in the country will need to be taught the proper way to handle the vacuum-packaged chilled product. “The product will initially be sold in supermarket chains,” Haggard says. “More than 100 supermarkets in Hong Kong are selling U.S. chilled pork, along with some of the city’s traditional wet markets.” Haggard says this is the largest chilled pork distribution that USMEF has ever seen, calling it, “satisfying to see it finally come to fruition.”



Iowa Cattlemen's Association Sets 2020 Policy

In December, Iowa cattlemen from across the state gathered at the Iowa Cattle Industry Leadership Summit to determine policy priorities for 2020. This annual event is where the Association’s grassroot policy development takes place and policy for the following year is set to guide the direction and priorities of ICA.

ICA’s three policy committees (Business Issues, Cattle Production, and Beef Products) each met to take up interim policies, discuss new policy ideas, and review resolutions and directives that were scheduled to sunset this year. Together we reviewed, amended, and enacted more than 40 policies! The recommendations from the policy committees were presented and ratified the following day at the Iowa Cattlemen’s Association Annual Meeting.

The Policy Committee Meeting was led by Policy Committee Chairs: Mark Putney (Business Issues), Mike Schwarck (Cattle Production), and Tom Hiler (Beef Products), with the support and input from Vice-Chairs Bob Butcher (Business Issues), Matt Winters (Cattle Production), and Will Longinaker (Beef Products).

A big thank you to Mark and Bob as they finish their time as Chair and Vice-Chair of the Business Issues Committee. Your efforts to help guide policy development, inform membership, and lead ICA are appreciated.

Business Issues
In the Business Issues Committee discussion, members supported new policy focused on amending the U.S. Army Corps of Engineers Master Manual to restore flood prevention and protection of property as top priorities. This policy specifically addressed concerns related to the regulation and management of the Missouri River, which remains top-of-mind for many of our producers who experienced flooding in the western part of the state earlier this year.

Much of the Business Issues Committee discussion was centered on anaerobic digestion and manure management best practices. These innovative policy recommendations, brought forth by ICA member Bryan Sievers, support the research and development of anaerobic digestion systems and similar technology, equitable monetization of dairy and beef cattle manure, and stewardship of our resources.

Cattle Production
The Cattle Production discussion began by reinstating current policy, including support for continuation of the 2019 Green/Gold Tag Task Force. This task force includes representation from the Iowa Veterinary Medical Association (IVMA), the Livestock Marketing Association (LMA), and producers. The purpose of this task force is to assess the efficacy of the current preconditioned, green tag, and gold tag programs, while considering potential improvements. We look forward to continuing this important discussion on into the new year.

Next, the discussion shifted to traceability. Per a directive, ICA has established a Traceability Task Force to list and weigh the pros and cons related to an animal disease traceability (ADT) system. Many members representing various sectors of the beef cattle industry have been actively engaged in this task force. The main focus of this task force is ADT, but other value-added opportunities have been discussed. Questions about technology, implementation, information management, and cost have been raised by members. The work of this task force will remain a priority for ICA due to rising concern surrounding foreign animal disease and potential for outbreaks.

Most of the Cattle Production Committee meeting was focused on cattle marketing, and more specifically, market transparency and negotiated cash trade. The Feedlot Council, comprised of 9 active producer-members from across the state, have held numerous meetings this fall to address cattle marketing concerns of Iowa cattlemen. ICA staff have diligently worked to provide members with access to information and opportunities for grassroots input. In October, ICA held five listening sessions throughout the state. These listening sessions were focused on market transparency and negotiated cash trade. ICA staff provided historical context, current policy, and potential policy solutions to participants. Most importantly, we dedicated time to hear your thoughts.

The listening sessions, in conjunction with an online survey to all members, helped inform the Feedlot Council meeting discussion on Dec. 4. Members discussed current cattle marketing issues, and reviewed a variety of policy proposals. The Council came to a consensus on a few new policy proposals, which were ultimately introduced to membership at Leadership Summit.

The first significant change included the introduction of a new directive to “examine programs that would provide an economic incentive for cash negotiated fed cattle sales.” Current ICA policy encourages membership as well as NCBA to require all major cattle feeding regions to market 50 percent of more of their cattle on negotiated cash trade, with the ultimate goal of increasing price discovery. While the Iowa/Minnesota region consistently trades over 50 percent negotiated cash, other regions, such as Texas/New Mexico/Oklahoma rarely exceed 10%.

The second policy change focused on increasing transparency in formula transactions, specifically by changing Livestock Mandatory Reporting requirements.

A third policy proposal supported adjustment of reporting regions that are utilized by the U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS). The Livestock Mandatory Reporting Act of 1999 requires USDA AMS to publish mandatory data on meat and livestock price trends, contracts, and supply and demand conditions to provide market transparency to the public, all while protecting the identity and transactions of reporting entities. In order to maintain confidentiality for said entities, the Livestock Mandatory Reporting program uses a confidentiality rule, also known as the 3/70/20 rule.

According to USDA AMS, the rule is as follows:
-  At least three reporting entities need to provide data at least 50 percent of the time over the most recent 60‐day time period;
-  No single reporting entity may provide more than 70 percent of the data for a report over the most recent 60‐day time period; and
-  No single reporting entity may be the sole reporting entity for an individual report more than 20 percent of the time over the most recent 60‐day time period.

Some states/regions do not meet these parameters, and therefore do not report out to the public. To help address this issue and improve market transparency, ICA supports combining Colorado and Wyoming for price reporting, and adding South Dakota and Illinois to the Iowa/Minnesota regional market.

The fourth policy proposal supports an 11:00 am daily report from USDA-AMS providing the average carcass weight of cattle harvested the previous day. This policy reflects current reporting that occurs in the swine industry, with a much greater volume of harvests in any given day.

Beef Products
The Beef Products Committee meeting, led by Tom Hiler, began by reinstating policies focused on food safety and consumer education.

When the opportunity presented for additional feedback from membership, engaged members brought forth discussion focused on Mandatory Country of Origin Labeling (MCOOL). ICA staff provided brief context regarding MCOOL and current ICA policy, which supports the repeal of MCOOL that occurred in 2015. This lively discussion ultimately led to a proposal to establish a directive for the ICA Board of Directors to develop a task force to assess the potential market impact of MCOOL.



Former Co-Op Managers in IA Indicted for Blending Oats & Soybeans

Two former co-op officers in Sioux Center, Iowa, were indicted on federal charges of conspiracy to commit fraud for blending oats and soybeans, then making false statements to USDA officials.

According to an indictment filed on December 19 in the U.S. District Court in Sioux City, Kenneth Ehrp and Calvin Diehl both worked at a cooperative in Sioux Center, with Ehrp serving as the general manager and Diehl as the assistant general manager.

The two are accused of knowingly blending oats into soybeans and then hiding the fact from USDA inspectors from 2011 to April 2017. The practice of mixing grains is prohibited unless the grain is marked as “mixed grain” or unless the administrator of the Grain Inspection, Packers, and Stockyards Administration grants an exemption. During the times relevant to the indictment, soybeans were more valuable than oats, with soybeans worth $9.69 and oats worth $2.39 on March 31, 2017, as an example.

Documents said the two would instruct employees to layer soybeans on top of oats in storage bins and in trucks. Furthermore, Diehl reportedly told a worker on April 10, 2017, to “blend oats at all times.” He also said to a warehouse examiner that he didn’t know why a pile of oats was next to a pile of soybeans at a satellite facility.

Around March 22, 2017, Ehrp and Diehl supervised workers who buried oats at the bottom of delivered truckloads only for the customer to discover and then reject the grain, according to the indictment.

Around March 30, 2017, Diehl is also said to have said the co-op only had 5,007 bushels of oats when they actually had more.

On two separate occasions around April 25, 2017, and March 31, 2017, Ehrp caused the cooperative’s controller to make a false statement, reporting that the property was overvalued. The indictments said this was done to influence the actions of a lender on a revolving operating loan.

Ehrp was charged with conspiracy to defraud the U.S. and two counts of making false statements. Diehl was charged with conspiracy to defraud the U.S. and one count of making false statements.

Ehrp served as the CEO and general manager of Farmer’s Cooperative Society of Sioux Center until April 28, 2017. He then sued the co-op on in March 2019 for $634,458.41 in past wages and to maintain his life insurance policies. The lawsuit is ongoing.



Weekly Ethanol Production for 12/20/2019

According to EIA data analyzed by the Renewable Fuels Association for the week ending Dec. 20, ethanol production expanded by 19,000 barrels per day (b/d), or 1.8%, to 1.083 million b/d—equivalent to 45.49 million gallons daily and a 28-week high. The four-week average ethanol production rate continued its rise for the tenth consecutive week, up 0.6% to a five-month high of 1.070 million b/d, equivalent to an annualized rate of 16.40 billion gallons.

Ethanol stocks narrowed by 1.5% to 21.5 million barrels. Inventories were 7.2% lower than the same week last year. Stocks declined in all regions except the Midwest (PADD 2). Gulf Coast (PADD 3) stocks are the lowest in six months.

There were zero imports of ethanol recorded for the second straight week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of October 2019.)

The volume of gasoline supplied to the U.S. market settled 1.1% lower to 9.303 million b/d (390.73 million gallons per day, or 142.61 bg annualized). Refiner/blender net inputs of ethanol scaled up 2.9% to 938,000 b/d—equivalent to 14.38 bg annualized.

Expressed as a percentage of daily gasoline demand, daily ethanol production increased to 11.64%.



EPA Announces $1.5 Million to Reduce Diesel Engine Emissions

The U.S. Environmental Protection Agency (EPA) Midwest Region (Region 7) will accept diesel emissions reduction proposals requesting up to $1.5 million from eligible applicants in Iowa, Kansas, Missouri and Nebraska. EPA anticipates awarding approximately $44 million across the country in Diesel Emission Reduction Program (DERA) grant funding to eligible applicants.

DERA funding implements projects aimed at reducing emissions from the nation's existing fleet of older diesel engines.

"Modernizing our nation's aging fleet of diesel-powered vehicles is an important part of the Trump Administration's plan to further reduce harmful emissions and guide counties and states from nonattainment into attainment," said EPA Administrator Andrew Wheeler. "Our hope is that through these upgrades and ongoing efforts, communities will continue to see improved health outcomes for their residents, ensuring all Americans breathe cleaner air."

Diesel-powered engines move approximately 90% of the nation's freight tonnage, and today nearly all highway freight trucks, locomotives, and commercial marine vessels are powered by diesel engines.

EPA is soliciting applications nationwide for projects that significantly reduce diesel emissions and exposure, especially from fleets operating at goods movements facilities in areas designated as having poor air quality. Those applicants in Iowa, Kansas, Missouri and Nebraska can contact Greg Crable, Region 7 air program, at (913) 551-7391 or crable.gregory@epa.gov.

Applicants may request funding to upgrade or replace diesel-powered buses, trucks, marine engines, locomotives, and nonroad equipment with newer, cleaner technologies. Priority for funding will also be given to projects that engage and benefit local communities and applicants that demonstrate their ability to promote and continue efforts to reduce emissions after the project has ended.

EPA anticipates releasing a separate Tribal DERA grant funding opportunity in early 2020.

For more information, visit: www.epa.gov/cleandiesel.