Tuesday May 26 Ag News

NEBRASKA CROP PROGRESS AND CONDITION

For the week ending May 24, 2020, there were 4.5 days suitable for fieldwork, according to the USDA's National Agricultural Statistics Service. Topsoil moisture supplies rated 1 percent very short, 8 short, 78 adequate, and 13 surplus. Subsoil moisture supplies rated 1 percent very short, 10 short, 82 adequate, and 7 surplus.

Field Crops Report:
Corn condition rated 0 percent very poor, 1 poor, 17 fair, 65 good, and 17 excellent. Corn planted was 97 percent, ahead of 78 last year and 89 for the five-year average. Emerged was 77 percent, well ahead of 43 last year, and ahead of 61 average.

Soybean condition rated 0 percent very poor, 1 poor, 18 fair, 66 good, and 15 excellent. Soybeans planted was 89 percent, well ahead of 51 last year and 62 average. Emerged was 56 percent, well ahead of 18 last year and 25 average.

Winter wheat condition rated 1 percent very poor, 7 poor, 22 fair, 64 good, and 6 excellent. Winter wheat headed was 22 percent, ahead of 16 last year, but behind 40 average.

Sorghum planted was 56 percent, well ahead of 22 last year, and ahead of 37 average.

Oats condition rated 0 percent very poor, 7 poor, 31 fair, 58 good, and 4 excellent. Oats planted was 96 percent, near 93 last year and 97 average. Emerged was 91 percent, ahead of 75 last year, and near 90 average. Headed was 9 percent, ahead of 1 last year, and near 8 average.

Dry edible beans planted was 18 percent. Emerged was 1 percent.

Pasture and Range Report:
Pasture and range conditions rated 1 percent very poor, 1 poor, 16 fair, 75 good, and 7 excellent.



IOWA CROP PROGRESS & CONDITION REPORT

Rain throughout the week resulted in 2.5 days suitable for field work during the week ending May 24, 2020, according to the USDA, National Agricultural Statistics Service. Below normal temperatures have slowed crop growth.

Topsoil moisture levels rated 0% very short, 2% short, 76% adequate and 22% surplus. Subsoil moisture levels rated 1% very short, 3% short, 79% adequate and 17% surplus.

Iowa farmers have planted 97% of the expected corn crop, 3 weeks ahead of last year and almost 2 weeks ahead of the 5-year average. Corn emergence was at 82%, an improvement of 20 percentage points from the previous week. The first corn condition rating of the season was 0% very poor, 2% poor, 17% fair, 67% good and 14% excellent.

The soybean crop moved to 92% planted, nearly a month ahead of last year and over 2 weeks ahead of average. Farmers in Southwest Iowa have over 25% of their soybeans left to plant. Fifty-two percent of the soybean crop has emerged, doubling the amount of soybeans emerged from the previous week.

Ninety-five percent of the oat crop has emerged. Oat condition rated 81% good to excellent.

Hay condition rated 73% good to excellent.

Pasture condition improved to 66% good to excellent. There was little stress on livestock although feedlots remain muddy.



USDA:  U.S. Corn 88% Planted; Soybeans 65% Planted

Corn was 88% planted and 64% emerged, and soybeans were 65% planted and 35% emerged as of Sunday, May 24, according to this week's USDA NASS Crop Progress report.  Winter wheat condition was estimated at 54% good to excellent, up 2 percentage points from 52% the previous week.

National Crop Progress Summary
                                             This        Last        Last          5-Year
                                            Week      Week       Year          Avg.
Corn Planted                         88           80            55              82
Corn Emerged                       64          43             28             58
Corn Condition  (G+E)         70  (first rating for the year)

Soybeans Planted                 65          53             26              55
Soybeans Emerged               35         18               9               27

Winter Wheat Headed         68          56            63              72
WW Condition  (G+E)        54          52            61              --

Spring Wheat Planted         81          60            80              90
Spring Wheat Emerged       51          30           41               65

Sorghum Planted                 39           32           27               38

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Farmers and Ranchers in Nebraska Can Now Apply for Financial Assistance Through USDA’s Coronavirus Food Assistance Program

Agricultural producers can now apply for USDA’s Coronavirus Food Assistance Program (CFAP), which provides direct payments to offset impacts from the coronavirus pandemic. The application and a payment calculator are now available online, and USDA’s Farm Service Agency (FSA) staff members are available via phone, email, fax and online tools to help producers complete applications. The agency also set up a call center in order to assist with service to customers across the nation.

“We know Nebraska producers are facing a tough time, and we are making every effort to provide much needed support as quickly as possible,” said Nancy Johner, state executive director for FSA in Nebraska. “FSA is available over the phone and virtually to assist you through the application process, whether it’s the first time you’ve worked with FSA, or if you know us quite well. This will be an extremely busy time for our offices. We ask for our customers to have patience due to the volume of calls we will be receiving. We understand the importance of this program and will do our best to assist you.”

Applications will be accepted through August 28, 2020. Through CFAP, USDA is making available $16 billion for vital financial assistance to producers of agricultural commodities who have suffered a five-percent-or-greater price decline due to COVID-19 and face additional significant marketing costs as a result of lower demand, surplus production, and disruptions to shipping patterns and the orderly marketing of commodities.

“We also want to remind producers that the program is structured to ensure the availability of funding for all eligible producers who apply,” Johner said.

In order to do this, producers will receive 80 percent of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date nationwide, as funds remain available.

Producers can download the CFAP application and other eligibility forms from farmers.gov/cfap. Also, on that webpage, producers can find a payment calculator to help identify sales and inventory information and calculate potential payments.

Additionally, producers in search of one-on-one support with the CFAP application process can call 877-508-8364 to speak directly with a USDA employee ready to offer assistance. This is a good first step before a producer engages the team at the FSA county office at their local USDA Service Center.

Applying for Assistance
Producers of all eligible commodities will apply through their local FSA office.

“We encourage producers to visit the farmers.gov/cfap website as viewing the online application and calculator tool should help them understand the information necessary for a completed application,” Johner said. “They also have the option to complete the application online or schedule a phone appointment with county FSA office staff to do it.”

From the CFAP online calculator tool, producers can convert their responses into a completed application that they will then print and submit to their local FSA office. Producers also can apply for assistance by making a phone appointment with staff at their local FSA office. Completed and signed applications will need to be submitted to the local FSA office either electronically or via hand delivery. Producers are asked to contact their local office to determine the preferred method. Find contact information for county FSA offices at farmers.gov/cfap.

Documentation to support the producer’s application and certification may be requested after the application is filed, so producers should retain this information. FSA has streamlined the signup process to not require an acreage report at the time of application and a USDA farm number may not be immediately needed.

Additional Commodities
USDA is also establishing a process for the public to identify additional commodities for potential inclusion in CFAP. Specifically, USDA is looking for data on agricultural commodities, that are not currently eligible for CFAP, that the public believes to have either:
-    suffered a five percent-or-greater price decline between mid-January and mid-April as a result of the COVID-19 pandemic,
-    shipped but subsequently spoiled due to loss of marketing channel, or
-    not left the farm or remained unharvested as mature crops.

More information about this process is available on farmers.gov/cfap.

More Information
To find the latest information on CFAP, visit farmers.gov/cfap or call 877-508-8364.

Nebraska FSA is partnering with two stakeholders in the coming week to present “Coronavirus Food Assistance Program (CFAP) in Nebraska: What You Need to Know” to assist farmers and ranchers with understanding and applying for this important program. These information sessions are scheduled for:
-    Thursday, May 28, noon-1 p.m. CT: Facebook Live event hosted by Nebraska Farm Bureau. To access the event,visit the Nebraska Farm Bureau Facebook page. The session will be recorded and archived on Nebraska Farm Bureau’s Facebook page and the organization’s website.
-    Thursday, June 4, noon-1 p.m. CT: Webinar hosted by the University of Nebraska-Lincoln Agricultural Economics Department as part of its series, “COVID-19’s Impact on Nebraska Ag.” To register, type go.unl.edu/manage2020 into your internet browser. The session will be recorded and available on the website after the event.

USDA Service Centers are open for business by phone appointment only, and field work will continue with appropriate social distancing. While program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible. All Service Center visitors wishing to conduct business with the FSA, Natural Resources Conservation Service, or any other Service Center agency are required to call their Service Center to schedule a phone appointment. More information can be found at farmers.gov/coronavirus.



Coronavirus Food Assistance Program to be Discussed During May 29 Webinar

Financial help is available for producers impacted by the price declines and additional marketing costs associated with COVID-19.

The Coronavirus Food Assistance Program, a federal program offered through the United States Department of Agriculture’s Farm Service Agency, is accepting applications for funding from livestock and crop farmers.

To help explain how the program works, a pair of specialists with Iowa State University Extension and Outreach and specialists with the Farm Service Agency in Iowa will hold a public webinar May 29, from 11 a.m. to noon.

The webinar will walk producers through the details and definitions that are key to this program, and will help equip them for the application process. The presenters will also answer common questions. There is no fee, but participants must register in advance here.... https://register.gotowebinar.com/register/7420674751753805840. 

Of the $16 billion available, $9.6 billion is set aside for the livestock industry ($5.1 billion for cattle, $2.9 billion for dairy, and $1.6 billion for hogs). There is $3.9 billion for row crop producers, $2.1 billion for specialty crop producers, and $500 million for other crops.

To qualify for a payment, a commodity must have declined in price by at least 5% between January and April 2020. Other requirements and payment information will be discussed during the webinar.

Speakers will include Chad Hart, professor and extension grain markets specialist with Iowa State University; Kristine Tidgren, director of the Center for Agricultural Law and Taxation at Iowa State University, and holder of the Leonard Dolezal Professorship in Agricultural Law; and Katie Kramer and Justin Muir, agricultural program specialists with the Farm Service Agency in Iowa.

The program will be recorded and made available for replay on the Ag Decision Maker and the Center for Agricultural Law and Taxation websites.

For more information, contact the webinar presenters. Hart can be reached at 515-294-9911, or chart@iastate.edu. Tidgren can be reached at 515-294-6365, or ktidgren@iastate.edu.



NE Corn Board to Meet June 10-11, 2020, in York

The Nebraska Corn Board will hold its next meeting on Wednesday, June 10, 2020 and Thursday, June 11, 2020 at the Holthus Convention Center, 3130 Holen Ave., York, Nebraska.

The meeting is open to the public, providing the opportunity for public comment. The Board will conduct regular board business, consider funding requests and set the budget for fiscal year 2020-2021.

A copy of the agenda is available by writing the Nebraska Corn Board, PO Box 95107, Lincoln, NE 68509, sending an email to nikki.bentzinger@nebraska.gov or calling 402/471-2676.

The Nebraska Corn Board is funded through a producer checkoff investment of 1/2-cent-per-bushel checkoff on all corn marketed in the state and is managed by nine farmer directors. The mission of the Nebraska Corn Board is to promote the value of corn by creating opportunities.



UNL AgEcon Webinars on NE Ag + COVID-19 Continue Into June

UNL Ag Econ - Farm & Ranch Mgt Team webinar series on COVID-19's impact on agriculture in Nebraska continues.... the next one is set for Thursday, May 28, at Noon... the topic for Thurwsday's webinar is "Ethanol: Yesterday, Today, and Tomorrow", and it features Roger Berry, Administrator of the Nebraska Ethanol Board.

Future webinars are scheduled for the month of June, they include:
-    Tuesday, June 2, 7 p.m.: Risk Management and Livestock Risk Protection (collaboration with Nebraska Cattlemen)
-    Thursday, June 4, noon: Coronavirus Food Assistance Program (CFAP) in Nebraska: What You Need To Know (with Nebraska FSA).-
-    Thursday, June 11, noon: Grain Marketing Updates
-    Thursday, June 18: noon: Force Majeure: How Extraordinary Events Can Impact Ag Contracts

Visit farm.unl.edu to register for these upcoming webinars and to see the archive of past webinars.



Management Strategies for Minimizing Early Pregnancy Loss
Sydney O'Daniel, Nebraska Exension Beef Educator
Rick Funston, Nebraska Extension Beef Cattle Reproductive Physiologist

As we approach the breeding season, cows and heifers are faced with a variety of stressors from the metabolic pressure of providing for a calf to changes in environment. Stress during early pregnancy is well documented to cause embryonic death and loss of pregnancy. However, making strategic management decisions during the fragile 2 months after breeding can help minimize those losses. Key areas to review management practices to minimize early pregnancy loss are transportation, temperature while being worked or transported, method of pregnancy diagnosis, and nutrition from calving to breeding. 

Transportation Stress
Transporting cows to summer pasture oftentimes coincides with the breeding season. Especially, if cows or heifers are artificially inseminated and need to be near working facilities during that time. It is important to plan transportation, or other stressors, strategically to prevent early pregnancy loss and reducing overall pregnancy rates. 

Research conducted at Colorado State University has found that transporting cattle between days 5 and 42 post insemination can result in a 10% reduction in pregnancy loss. This window of time is crucial for blastocyst formation, maternal recognition of pregnancy, and adhesion to the uterine wall. When cattle are loaded into a trailer and transported to a new place, they may become stressed and release a cascade of hormones that can alter the uterine environment making it less ideal for supporting a pregnancy. Prior to day 5, the embryo is still in the oviduct and protected from changes in the uterine environment. After day 42, the embryo has implanted into the uterine wall and is less susceptible to changes in environment. While transporting on days 5 to 42 pose the greatest risk, waiting to haul cows and heifers until a week or two after day 42 may help prevent late embryonic loss. Ultimately, stress during those critical time points may disturb important early embryonic processes and lead to embryonic mortality and increased pregnancy loss.

Some general guidelines for when to transport pregnant cows and heifers post breeding:
Recommended time to haul: Days 1 - 4 or after day 60
Risk of pregnancy loss: Days 5 - 55 or 60

Heat Stress
Another key to minimizing pregnancy loss when transportation is necessary, is to avoid hauling cows on excessively hot days (approximately 90° - 110° and 40% humidity or more). Research conducted at Oklahoma State University found that cows exposed to heat stress 8 – 16 days after breeding, had decreased progesterone concentration, increased prostaglandin concentrations, and reduced embryonic weights. A 2 - 2.5 degree increase in rectal temperature (representative measurement of body temperature) for as little as 9 hours has been found to reduce embryo development. Planning to haul cows on days with more moderate temperatures can help reduce stress on heifers and cows and ultimately prevent early pregnancy loss.

Pregnancy Diagnosis
Implementing a pregnancy diagnosis method is key for making sound managerial decisions regarding open females. However, some pregnancy diagnosis methods carry more risk than others regarding early pregnancy loss. Currently, there are 3 options available for pregnancy diagnosis: transrectal palpation, transrectal ultrasound, and a blood test. Obviously, a blood test is the least invasive method but results are not immediate and that may not be practical for producers wanting to sort females on pregnancy check day. Transrectal palpation and transrectal ultrasound allow for immediate results but pose a greater risk for early pregnancy loss and can vary greatly based on stage of pregnancy and skill of the technician. Additional research conducted at Colorado State University found that transrectal palpation between days 42 - 74 had greater fetal losses (2.68 vs 1.38%) than transrectal ultrasound, and that heifers evaluated by inexperienced technicians had greater fetal losses than those evaluated by experienced technicians (2.07 vs 1.06%). It was also found that heifers evaluated prior to 53 days had nearly a 3 fold increase in pregnancy loss than those evaluated after 53 days of pregnancy (3.46 vs 1.26%). While an experienced technician can determine pregnancy by transrectal ultrasound as early as 25 – 30 days or by transrectal palpation by 35 – 45 days, pregnancy diagnosis prior to 40-50 days of pregnancy carries an increased risk of disturbing those fragile early stages of development.

Nutrition at Breeding
It is well established that deficiencies in protein and energy at breeding time has detrimental effects on fertility. Traditionally, it is recommended that cows should be at a BCS of 5 and 1st calf heifers should be at a BCS of 6 at calving for optimal reproductive performance. Managing cows and heifers to be on a positive plane of nutrition at the time of breeding is essential for the establishment of pregnancy.     Studies at University of Nebraska have found that thin cows, that are on an increasing plane of nutrition and gaining weight, can have equivalent pregnancy rates as cows in moderate condition that are maintaining their body weight at breeding. However, thin cows that are determined to be losing condition can have a reduction in pregnancy rates up to 30% which may be a result of embryonic loss or anestrous at the time of breeding. Having a sound nutritional program is key to optimizing reproductive function during the breeding season.



Plenty of BEEF in Cold Storage – USA Does Not Need Any Beef Imports

The Independent Cattlemen of Nebraska, says the U.S. does not need any more beef imports. According to the United States Department of Agriculture’s May 2020 ‘Cold Storage’ report, the USA beef supply at the end of April 2020 was 490 million pounds.

That is 13.9% higher than last year, which is 6% higher than 5 years ago. With this amount of beef in cold storage, beef supplies should not be limited nor should retail beef prices be high during this Covid-19 crisis.

With plenty of beef in ‘cold storage’ and ample cattle here in the USA ready to be harvested on a regular basis; the USA has no need to import any beef. The chart below shows the facts:

USA cattle ranches, producers and feeders continue to be in a crisis with grossly low cattle market prices resulting in hundreds of dollars of losses per animal, and no Mandatory Country of Origin Labeling (M-COOL) and large quantities of beef imports.

According to USDA, the U.S. was the largest importer of Mexican beef. Without M-COOL, most Americans are unaware of the source of their beef and what they are feeding their families. Also according to the USDA, total live cattle imports from 2019 were just over 2 million head, over 7% higher than in 2018. In addition, the U.S. has imported more than a quarter-million head of cattle from Canada so far this year.

Jim Dinklage, President of ICON reiterates that America must reinstate Mandatory Country of Origin Labeling (M-COOL), markedly reduce beef imports, and prevent large packers from controlling and manipulating the beef market so there is no longer a gross disparity in profits between the controlling packers and the producers of beef in the United States of America.



R-CALF: NCBA’s Claim of Low Import Volumes Contradicted by USDA Study

In response to President Donald J. Trump’s suggestion last week that the United States should end cattle imports, the National Cattlemen’s Beef Association (NCBA) issued a news release defending cattle imports and claiming that only about 12 percent of beef consumed in the U.S. is imported product.

But R-CALF USA says that number understates the actual percentage of imported beef consumed in the United States on an annual basis. R-CALF USA CEO Bill Bullard cited a study published by the U.S. Department of Agriculture (USDA) Economic Research Service (ERS) in 2012 titled “US red meat production from foreign-born animals” that shows that during the decade prior to the study, imports of beef into the United States and beef produced from imported livestock accounted for roughly 18 percent of U.S. beef supplies.

Bullard says that imports derived from imported cattle and beef have been trending upward since 2011 and spiked in 2014 and 2015, which coincided with the drastic collapse of U.S. cattle prices beginning in 2015.

“Based on the USDA study and today’s import data, we estimate that imports continue to comprise about 18 to 20 percent of U.S. beef supplies,” said Bullard.

He also said it is important that the industry be informed of factual data regarding imports and that for far too long the meatpacking lobby has tried to downplay both the volume of and impact from the increasing volumes of imported beef and beef derived from imported cattle.

“We find it unconscionable that while America’s independent cattle producers are unable to sell all their slaughter-ready cattle to U.S.-based beef packers, those same beef packers are importing thousands of head of slaughter-ready cattle from Canada, thus depriving America’s cattle producers of access to their own domestic market in this time of crisis,” Bullard concluded.



Most Recent USDA Data Projects Imports to Remain at 11 Percent of U.S. Consumption

Discussions about beef imports were put in the spotlight this week. NCBA agrees that the industry should have a conversation about imports and where we’re sourcing beef, but it’s important that the conversation be rooted in facts, not back of the envelope estimates using data from nearly a decade prior.

In response to R-CALF’s May 22, press release on trade levels, NCBA would suggest that it’s important that any reasonable discussion on trade include the most recent information available. Global beef trade is dynamic and trade levels rise and fall based on factors such as changes in currency valuation, areas of drought or moisture, global consumer demand, and many other variables, so utilizing old trade data is just the latest demonstration of R-CALF’s willingness to cherry-pick the facts to drive their agendas.

Current USDA data available here,  projects current U.S. beef import numbers for 2020 at 1.334 million metric tons, while domestic consumption is estimated at 12.389 million metric tons, amounting to imports totaling 11 percent of U.S. beef consumption during 2020. In 2019, the most current full-year data available shows imports of 1.387 million metric tons, versus consumption of 12.407 million metric tons, with U.S. imports again totaling 11 percent of total consumption.



IDALS Launches Disposal Assistance Program for Pork Producers Affected by COVID-19

Iowa Secretary of Agriculture Mike Naig announced today that the Iowa Department of Agriculture and Land Stewardship is launching a disposal assistance program to help pork producers who are unable to harvest pigs due to COVID-19 supply chain disruptions.

“COVID-19 has caused unprecedented, ongoing disruptions to the food supply chain,” said Secretary Naig. “Pork producers are going to extraordinary lengths to donate pork to food banks and identify other markets for their animals but, in many cases, it’s not enough to make up for the backlog happening on farms. Producers are being forced to make very difficult decisions and this is one way the state is working to support them during these extremely challenging times.”

COVID-19-related worker shortages are causing meat processing facilities to drastically reduce production. Iowa State University estimates that, as of mid-May, approximately 600,000 pigs in Iowa were unable to be harvested.

Producers are working with the Resource Coordination Center, operated by the Department, Iowa Pork Producers Association, Iowa Pork Industry Center and Iowa State University Extension and Outreach, to explore every option to harvest livestock. This includes changing the animals’ diets to slow the rate of growth, contacting other meat lockers, and making donations to the Pass the Pork program.

When producers are unable to harvest their livestock, they may be forced to humanely euthanize their animals to prevent welfare issues. The Iowa Disposal Assistance Program will provide financial resources to help cover the cost of disposing of animals in an environmentally-sound way.

“I want to thank Gov. Reynolds for allocating funding for this program to provide support for our livestock producers as they deal with this unprecedented market disruption,” said Naig.

The Department is offering producers $40 per approved animal to help cover some of the disposal costs for market-ready hogs (weighing at least 225 pounds). Producers must provide documentation, including proof of proper disposal, and an affidavit from their herd veterinarian confirming impending welfare issues, to receive funding.

The disposal assistance funding will be made available to Iowa producers in at least three rounds. Each approved applicant will receive funding for at least 1,000 animals and up to 30,000 animals per round, depending on the number of applicants.

To qualify for the first round of funding, producers must submit their applications to the Iowa Department of Agriculture between May 26-29. The first round of applicants will be notified of approval on June 1. The first round of approved applicants must properly dispose of their animals by June 5. Disposal claims must be received by the Iowa Department of Agriculture by June 8.

The Department will begin accepting applications for the second and third rounds of disposal assistance on June 1 and June 9, respectively. The Department is also exploring options to assist producers who have conducted euthanasia and disposal between May 1-26, 2020.

To apply for the disposal assistance program, visit iowaagriculture.gov/idap. Questions about the program can be directed to (515) 281-5321 or IDAP@iowaagriculture.gov.



Pizza Hut Giving Free Pizza to Class of 2020 Grads

America's dairy farmers and Pizza Hut are joining forces to help bring some much-needed joy to the graduating class of 2020. Together, they are honoring high school grads by giving away half a million pizzas to graduates and their families.

"Our brand has a long history of celebrating moments that matter - like graduations - and Pizza Hut takes pride in being a part of our customers' big days. So, it's only natural that we'd be there for students and their families to help celebrate the accomplishments of the graduating class of 2020," said George Felix, chief marketing officer, Pizza Hut. "We're proud to partner with America's hard-working dairy farmers to bring students who are missing out on their chance to cross the stage with their diploma, an opportunity to celebrate with their favorite Pizza Hut pizza."

"We are so excited to partner with Pizza Hut to help high school seniors and their families celebrate this special milestone in their lives," said Marilyn Hershey, a Pennsylvania dairy farmer and chair of Dairy Management Inc., a dairy promotion organization funded by America's dairy farmers and importers. "America's dairy farmers have great appreciation and respect for the hard work that graduating students have put in and nothing celebrates that better than cheese and pizza enjoyed with family and friends."

With half a million free pies up for grabs, graduates can score big for their grad parties. To claim a free pizza, visit www.pizzahut.com/gradparty, sign into your Hut Rewards account, and a digital coupon for a free one-topping Medium Pizza will be deposited into your account while supplies last.

Those ordering can select their preferred method when ordering over the phone, through the official Pizza Hut app or on the Pizza Hut website.



RFA Calls on EPA to Deny Secretive “Gap Year” Refinery Waiver Requests

The Renewable Fuels Association on Friday urged the U.S. Environmental Protection Agency to deny new petitions submitted by refiners for past-year waivers from their renewable volume obligations. In a letter to EPA Administrator Andrew Wheeler, RFA President and CEO Geoff Cooper argued that granting such waivers would be unlawful, inconsistent with the statute, and contrary to EPA’s own policies and regulations. According to the letter, the petitions are nothing more than a “thinly veiled attempt to circumvent” the Tenth Circuit’s decision in January, in the case of Renewable Fuels Association et al. v. EPA, that struck down a number of exemptions granted by the agency.

In the letter, Cooper cited May 20 testimony by U.S. Department of Energy Under Secretary Mark Menezes, who described these new petitions as “gap filings” intended to establish, without regard to merit, a continuous string of exemptions “to be consistent with the Tenth Circuit decision.” In January, the court found that refiners may only receive an exemption if it is an extension of a previously existing exemption. In light of the court’s ruling, some small refineries are now seeking retroactive exemptions for previous years to “fill the gaps” so that they may argue they had a continuously extended exemption.

According to RFA, some refiners are trying to “…pretend there could have been a hardship years ago that could justify the granting of an exemption today, years after the compliance deadline had passed for the year the exemption is sought. It is utterly preposterous that EPA would even consider requests for prior-year exemptions from refineries who readily complied with that year’s RFS obligations and who did not originally seek exemptions during the year of purported ‘hardship.’ Now, these refiners are attempting to re-write history in a cynical attempt to maintain an illegally exploited compliance loophole.”

In his letter, Cooper also noted that these prior-year petitions are not being counted on the EPA’s online small refinery exemption “dashboard,” significantly undermining the promise of increased transparency made by EPA following the secretive issuance of 54 exemptions from the 2016-2017 RFS compliance years. “Clearly, only refiners applying for past-year petitions know what is going on at EPA, while biofuel producers and the general public are again being kept in the dark.”

“We urge EPA to clarify that small refinery exemption extension petitions for past compliance years are inconsistent with the RFS and will not be entertained by the Agency,” Cooper concluded. “We also urge that EPA expeditiously deny any petitions that have already been received, or that are received going forward, for past compliance years.”



Market Disruptions
Matthew Diersen, Risk & Business Management Specialist, South Dakota State University

The May Cattle on Feed report released last week showed a lower level on feed compared to a year earlier. Despite wide ranges of trade estimates for placements and marketings, once averaged together they were close to the actual numbers for April 2020. Marketings were 76 percent of the level from last April, while placements were 78 percent of last April. The lower marketings were COVID-driven. The disruptions have also lead to an increase in slaughter weights. The estimates of cattle on feed for more than 90 and 120 days increased sharply at a time of year they would usually begin a seasonal decline.

After a low level of placements during March, placements were again lower during April. There has not been a clear pattern in placement weights; most categories have just been lower for a couple of months. For some perspective, an examination of feeder sales showed the largest slowdown during March. Using the LMIC's compilation, Sales of Feeder and Stocker Cattle, the total volume of such cattle sold direct and through auctions was down 12 percent from a year earlier in April and down 47 percent from a year earlier in March. A rough estimation suggests about 0.5 million head fewer than normal did not trade in March and may not have yet traded. Some of the discrepancies may be due to AMS reporting challenges. However, the main takeaway is that there are a variety of weights of feeders that need to move to feedlots.

One marketing channel that has been disrupted is the forward contract segment. Producers, generally speaking, use forward contracts to assure an outlet for cattle. In past conversations, feedlots have considered forward sales if they were concerned about slaughter capacity at a given time of year or for a given location. Contract volume slowed dramatically in March and April. The AMS tracks such volume in a Direct Slaughter Cattle report, LM_CT153. Typical forward volume, new signings, are 30,000 to 50,000 head a week across delivery months. That volume dropped below 9,000 head in early April and is starting to return to more normal levels. However, for specific months, June 2020 for example, the cumulative volume has not changed much since the COVID-related disruptions began. A trade-off when using a contract is relationship risk. Will the buyer fulfill the terms of the agreement? Will the seller give up a better opportunity?

Relationship risk is less of a concern when using futures contracts. There is either an unknown counter-party wanting to own cattle or a nameless speculator willing to risk capital in the market. Live cattle can be delivered to settle a futures contract. In late April (with the most-recent contract to expire) there were very few tenders for delivery. However, as the contract settled, tenders increased. In an AMS report on May 12, there were 40 contracts delivered and 13 still scheduled for mid-May delivery. The futures prices, at settlement, would thus reflect the cost of holding cattle until slaughter.