Wednesday September 23 Ag News

 Report Details Impacts of COVID-19 on Agriculture Economy

Today, the Platte Institute and the Nebraska Farm Bureau released a joint policy brief examining the economic disruptions from COVID-19 on Nebraska’s agriculture sector. The brief details the challenges the industry faced prior to and during the one-two punch brought on by the pandemic, as well as the ongoing uncertainties agriculture faces in its wake.

Authored by Platte Institute Policy Director Sarah Curry and Nebraska Farm Bureau Senior Economist Jay Rempe, the brief examines the complications for the agriculture economy caused by the pandemic but also the importance of Nebraska’s agriculture, business, education, and elected leaders working strategically to assure Nebraska’s agriculture sector is on the proper path for growth in a post-COVID-19 world.

The report, Disruptions from COVID-19 on Nebraska’s Agriculture, is available at PlatteInstitute.org and at nefb.org.

“Nebraska’s crop and livestock producers have been on a roller coaster ride over the past decade regarding farm income. The agriculture economy was already on the downside and weakened when COVID-19 hit,” said Curry.

The report details the first COVD-19 blow in mid-March with the shutdown of the hospitality, restaurant, and institutional food service sector and the stay-at-home orders. Almost overnight, demand for food in these sectors, which accounted for 54 percent of the food consumed pre-COVID-19, went missing. Supply chains were ill-equipped to deal with the shutdown leaving agriculture producers with diminished markets. The stay-at-home orders furthered the difficulties as less travel meant less fuel consumed leading to the idling and slowdown of ethanol production.

“The immediate impact was that corn producers lost a key ethanol market and livestock producers lost a key feed source in ethanol by-products. The chaos in supply chains, the destruction of demand, and general uncertainty caused commodity prices to spiral downward,” said Rempe.

The second punch came in April, with the disruptions of meat processing facilities due to employee health concerns. Between complete shutdowns, reduced operations, and slower speeds, the processing facilities were operating between 60-70 percent of capacity at one point. Livestock prices plunged. Analysis released in June by Nebraska Farm Bureau suggested Nebraska’s agriculture economy could face nearly $3.7 billion in losses in 2020 due to COVID-19 if economic conditions did not improve.

“Agriculture was among the hardest hit sectors of our economy and as a result was among the sectors eligible for federal assistance. The report takes a closer look at the programs and engagement of agriculture in the federal assistance programs through the passage of the CARES Act,” said Curry. “To understand the magnitude of COVID-19’s impact, estimates suggest as much as 35-50 percent of the state’s net farm income this year could come from federal assistance due to COVID-19.”

The report also explores the scope and role of regulations on agriculture’s ability to respond to the pandemic.

“Agriculture is one of the most heavily regulated industries, with more than 20,000 restrictions imposed on agriculture at the federal level and additional regulations at the state level. There were some positive and proactive regulatory changes to help reduce the regulatory burden during the pandemic. The flexibility and waiver of some of those regulations provides a perfect case study for the possibility of future permanent regulatory reforms,” said Curry.

“There’s a great deal of uncertainty surrounding Nebraska’s agriculture sector and what the future holds. A large variable will be the duration and magnitude of the effects of COVID-19 on the economy. Will economic growth affect world trade that is so critical to Nebraska? Will China abide by purchase agreements signed earlier this year? Will markets regain their strength to offset a future drop in federal assistance? Right now, there are a lot more questions than answers,” said Rempe.

With those uncertainties, the report points to opportunities for Nebraska to be the epicenter of global food production, including advantages in natural resources, infrastructure, educational systems, and people.

“Nebraska leaders should think strategically on how we can marshal these advantages in a post-COVID-19 world. That means a more thorough examination of our policies regarding regulations, infrastructure, tax policy, innovation, and others to assure Nebraska is on the proper path for growth,” said Rempe.



NDA DIRECTOR WELLMAN NAMED PRESIDENT OF MIDWEST AG ASSOCIATION

Nebraska Department of Agriculture (NDA) Director Steve Wellman has been selected to serve as the 2021-2022 President of the Midwest Association of State Departments of Agriculture (MASDA). Wellman accepted this position during the Association’s annual meeting held virtually earlier in September.

Wellman will work with other state agricultural leaders in the Midwest to promote, support and advance ag producers, agribusinesses and the industry as a whole. MASDA is comprised of the Departments of Agriculture from 13 Midwestern states. In addition to Nebraska, MASDA includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, North Dakota, Ohio, Oklahoma, South Dakota and Wisconsin.

“MASDA is where state ag leaders come together to represent agriculture in the Midwest,” said Wellman. “Each of our states has unique ag specialties and challenges, but we also share common goals, like creating new markets for our ag products and building on existing ones. This group addresses those challenges and goals and gives a unified voice to ag producers and agribusinesses in the Midwest.”

Wellman became NDA’s 27th director in December 2017, after being appointed by Governor Pete Ricketts. Wellman brings a broad range of experience to the position having farmed in Nebraska for 35 years and also serving on various agricultural organizations and advisory committees at the federal, state and local level.

Wellman will host the annual MASDA meeting in Nebraska in June.

MASDA is the Midwest Regional Association of the National Association of State Departments of Agriculture (NASDA), a nonpartisan, nonprofit association that represents the elected and appointed commissioners, secretaries and directors in the United States.



Governor Signs Proclamation for Cooperative Month

A proclamation recognizing October as Cooperative Month was signed by Governor Pete Ricketts on September 10.

Cooperative Month has been celebrated nationwide and in Nebraska for many years to call attention to the economic benefits which come from cooperative businesses.

The proclamation signed by the Governor recognizes Nebraska’s farmer owned cooperatives and rural electric and telephone cooperatives and the important role that cooperatives play in the lives of many Nebraskans.

In 2019 agricultural cooperatives served the needs of approximately 64,000 Nebraskans in 404 rural communities across the state and directly employ over 5,300 people statewide. Last year, Nebraska’s agricultural cooperatives re-invested nearly $157 million in facilities and equipment to serve farmers and ranchers while also returning over $50.7 million in cash patronage and cash equity redemption payments to their farmer and rancher owners. In addition, Nebraska’s farmer owned cooperatives contributed $1.8 million to local fire departments, local school and youth organizations, local and statewide FFA and 4-H chapters and provided numerous scholarships to help rural Nebraska students continue their educations.

Rocky Weber, President & General Counsel of the Nebraska Cooperative Council, which is celebrating its 75th anniversary as the state’s only trade association devoted exclusively to advancing, protecting and promoting the cooperative business model, stated: “The Governor’s proclamation of October 2020 as Cooperative Month in Nebraska is a welcome acknowledgment of how important Nebraska’s cooperative system is to the economic fabric of all Nebraska, rural and urban. While grocery, value-added and financial services cooperatives are well known in urban areas of the state, the rural expansion of electrical and telephone utilities was made possible by rural residents forming cooperatives to build and own the services which they continue to maintain today. Farmer ownership of Nebraska’s farmer owned agricultural cooperatives have allowed generations of Nebraska farmers and ranchers to compete in both the national and global marketplace by pooling their business and their resources. The cooperative principles of member economic participation through democratic control, farmer governance and a focus on their members’ mutual benefits through local return of profits, local investment in facilities and equipment, and the support of rural communities are the cultural foundation of Nebraska’s cooperative system.  Even in the most challenging of times, Nebraska’s farmer owned agricultural and utility cooperatives remain steadfast in serving the needs of their owner/patrons and the communities they serve.”



Nebraska Beef Council October conference call meeting

The Nebraska Beef Council Board of Directors will have a conference call at the NBC office in Kearney, NE, located at 1319 Central Ave. on Monday October 5, 2020 beginning at 12:00 p.m. CDT. The NBC Board of Directors will finalize the 2019-2020 fiscal year. For more information, please contact Pam Esslinger at pam@nebeef.org.  



LPS, UNL LAUNCH EARLY STEM PROGRAM AT LINCOLN NORTHEAST

Lincoln Public Schools and the University of Nebraska–Lincoln’s College of Agricultural Sciences and Natural Resources are joining together to launch the LPS-UNL Early College and Career STEM Program at Lincoln Northeast High School. LPS and the university celebrated the launch of the program during an event at Lincoln Northeast on Tuesday.

Through hands-on, immersive experiences and early college pathways, the program will prepare Northeast students in the areas of food, energy, water and societal systems, which are collectively known as FEWS2. Pathways are designed for students who wish to pursue a two- or four-year college degree, as well as students who plan to enter the workforce after graduating high school.

LPS and CASNR will also work with ag- and natural resources-based businesses, commodity groups and other partners to build internships and other experiences to enhance the program.

“This is an exciting new opportunity for our students and aligns our goals of empowering our students to find academic success through authentic learning opportunities, rigorous standards and individualized learning,” LPS Superintendent Steve Joel said. “We have had many successful partnerships with the university, and this is just another example of the great collaboration between our two institutions that will benefit our students and community.”

The program is designed to provide pathways for learners at Northeast High School that are interested in FEWS2. Examples include:

> Students who plan to enter the workforce after high school graduation can earn non-credit competencies in certain areas that will give them an edge as they look for employment.

> Students will be able to earn college credit for classes that will transfer to Nebraska and other post-secondary institutions.

> Students who earn a certain number of credits can earn a certificate of college credit, which they can use to seek work after high school or can put toward a four-year degree.

Most importantly, students will be able to explore careers in agriculture and natural resources.

A summer enrichment program built around FEWS2 concepts will take place in summer 2021. Beginning in fall 2021, FEWS2 concepts will be integrated into Lincoln Northeast’s ninth- and 10th-grade math and science curriculums. In fall 2022, 11th- and 12th-graders will begin to enroll in early college credit classes and explore non-credit pathways. On- and off-ramps are built into the program for students who decide it’s not for them, enroll later in their high school career or drop out of the program and rejoin.

“As a first-generation college student who pursued an education and career in agriculture and life sciences, I know I would have benefited greatly from a program like this,” said Nebraska Chancellor Ronnie Green. “I am personally so excited for the Lincoln Northeast students whose career options are going to expand because of this partnership between the university and LPS.”

The program is designed to be affordable and accessible to students and their families. Non-credit experiences will be available to students for free. Student who opt to take classes for college credit will receive reduced tuition.

Lincoln Public Schools and CASNR have a long history of collaborating to create enriching, hands-on programming related to agriculture, life sciences and natural resources.

Nearly 20 years ago, LPS, CASNR and the Lincoln Children’s Zoo joined together to launch the Our Zoo to You program, in which animals from the zoo lived in LPS elementary classrooms for six weeks and were incorporated into reading, writing, science and math curriculum. Other successful programs, including Bug Bash and the Summer Soybean Institute, followed.

Tiffany Heng-Moss, dean of agricultural sciences and natural resources, said all of these programs challenged LPS students to use design thinking and scientific inquiry and have prepared them to meet the challenges of a changing world. The Early STEM program is no different.

We built this program to meet students where they are at and help prepare them for future careers in the growing areas of food, energy, water and societal systems,” Heng-Moss said. “In Nebraska, one in four jobs is related to agriculture and natural resources, and a prepared workforce with highly developed problem-solving and critical-thinking skills will be essential to Nebraska’s future success. I am so proud of this partnership and the opportunities it will bring for students and for Nebraska. CASNR is excited to partner with LPS and the agriculture and natural resources industries, commodities and other stakeholders in Nebraska and work together to prepare the next generation of change-makers.”

For more information, visit https://casnr.unl.edu/early-college-and-career-stem-program.



Pennsylvania farmer to lead OCM

The Lincoln, NE-based Organization for Competitive Markets (OCM) is pleased to announce that it has hired Pennsylvania farmer Mike Eby as its new executive director.

Eby is a seventh-generation farmer whose family has been on their land for 206 years.  In 1999, Eby purchased his father’s purebred Holstein herd and milked cows with his wife and four children for 17 years.  After selling the dairy cows, Mike and his family transitioned to a red Angus cow/calf operation and also grows corn, beans and wheat.

Eby will continue his role as the chairman of the National Dairy Producers Organization (NDPO), a farmer member nonprofit that works to ensure dairy marketing cooperatives operate for the mutual benefit of producer-members.

Eby has initiated antitrust litigation with fellow dairy farmers against Dairy Farmers of America (DFA), the U.S.’s largest dairy cooperative, alleging that DFA, Dean Foods, and Dairy Marketing Services engaged in anti-competitive milk marketing practices for 12 years that harmed the farmer-members of the cooperative. The suit is pending in U.S. District Court in Vermont and has brought forth an amicus brief from the U.S. Department of Justice, which argued in favor of the dairy farmers.

“As OCM’s executive director, I am looking forward to working with like-minded organizations to restore competition within the agriculture marketplace,” Eby said.



Weekly Ethanol Production for 9/18/2020

According to EIA data analyzed by the Renewable Fuels Association for the week ending September 18, ethanol production slowed, shifting 2.2% lower, or 21,000 barrels per day (b/d), to 906,000 b/d—equivalent to 38.05 million gallons daily and the smallest output since June. The four-week average ethanol production rate declined 0.6% to 924,000 b/d, equivalent to an annualized rate of 14.16 billion gallons (bg).

Ethanol stocks expanded by 1.0% to 20.0 million barrels, which was 11.1% below year-ago volumes. Inventories increased across all regions except the Midwest (PADD 2) and Rocky Mountains (PADD 4).

The volume of gasoline supplied to the U.S. market, a measure of implied demand, ticked up 0.4% to 8.52 million b/d (130.53 bg annualized). Gasoline demand remained 8.9% lower than a year ago.

Refiner/blender net inputs of ethanol slipped 0.7% to 839,000 b/d, equivalent to 12.86 bg annualized. This was 10.3% below the year-earlier level as a result of the continuing effects of the COVID-19 pandemic.

Imports of ethanol arriving into the West Coast were 11,000 b/d, or 3.23 million gallons for the week. This marks the seventh time in nine weeks that imports were reported. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of July 2020.)



Equipment Companies Continue March Toward Increasing Biodiesel in Heating Industry

The home heating industry continues its march toward a low carbon liquid future this week as momentum in the technical space drives ahead. Key advancements in research and development continue to bring all parts of the industry into a unified direction -- increased Bioheat® use industry wide.

Leading up to this week's 2020 Heating & Energizing America Trade Show (HEAT Show), industry leaders from all segments were abuzz on the latest activity. One such announcement came this week from R.W. Beckett Corp., one of the industry’s leading heating oil burner manufacturers, unveiling a new B20-certified-burner.

“We are extremely happy to see equipment companies stepping up to the table to support higher biodiesel blends in home heating oil after the years of research conducted to make that move possible,” said Scott Fenwick, Technical Director for the National Biodiesel Board. "Last year's Providence Resolution has served as a catalyst and we are pleased to see all segments of the industry continuing to pull toward those extremely important carbon reduction goals."

During the 2019 HEAT Show, the heating oil industry launched an initiative, dubbed ‘The Providence Resolution’, to reduce greenhouse gas emissions (GHG) from heating oil 15 percent by 2023, 40 percent by 2030, and become net-zero by 2050. These emissions reduction goals approximately equate to biodiesel blends of B20 by 2023, B50 by 2030, and B100 industry-wide by 2050. These goals will put low carbon liquid home heating fuels ahead of costly, wholesale system changes being discussed to reduce emissions in the sector, with the added benefit of making immediate emissions reductions available.

“Given the compounding impacts of the effect of carbon dioxide in the atmosphere over time, doing B20 today and moving to B50 and net zero carbon B100 in the future provides significantly more GHG reductions than waiting for future wind and solar—without the capital costs of heat pumps, solar panels, wind turbines and updating the electrical grid,” said Fenwick. "An all of the above strategy is important, but the nearly 5.5 billion homes in the Northeast who currently use heating oil systems can make a significant impact with biodiesel, almost immediately."

The biodiesel and heating oil industries, through a cooperative effort led by NBB and The National Oilheat Research Alliance initiated in 2008, conducted the lab scale, bench scale, and field testing needed to secure industry consensus ASTM fuel quality standards for blends up to B20 in 2015.

“NBB and NORA have since been focused on the data needed to secure industry consensus ASTM quality standards for blends up to B100, as well as updated third party certification procedures for B100,” said Steve Howell of M4 Consulting who Chairs the ASTM Biodiesel Task Force at ASTM International. “These continuing R&D efforts were instrumental in providing a foundation for the Providence Resolution, which in turn helped provide the impetus to the equipment companies to invest in their own future by supporting higher biodiesel blends.”



Conaway Commends Congressional Republican Leadership for Stopping Democrats’ Proposal to Defund Key Agricultural Programs
 
Rep. K. Michael Conaway, Ranking Member of the House Agriculture Committee, issued the following statement upon passage of the Continuing Resolution (CR) which funds the U.S. government into December and includes funding for the U.S. Department of Agriculture (USDA) to help rural America, farmers, ranchers, and dairy producers:

"Last Friday, there was a bipartisan agreement to fund ALL of the U.S. government, including USDA so they could help rural America and our farmers, ranchers, and dairy producers through some very, very difficult times.

"But, then, that deal was rescinded by Democratic leaders in Congress. Under yesterday’s House Democratic plan, rural America, farmers, ranchers, and dairy producers were excluded from help under COVID-19 relief and even from basic Farm Bill support. As the Ranking Member of the House Agriculture Committee, I strongly opposed this deliberate, unconscionable snubbing of rural America.

“Thanks to President Trump and Republican Leaders in Congress who also strongly opposed this reckless stunt, the Democrats finally modified their funding bill to include the Department of Agriculture.

"Had Congressional Republican leadership not stepped in, USDA would have been forced to shut down critical Farm Bill programs supported by wide, bipartisan margins in both the House and the Senate. This would have hurt millions and helped nobody.

"I’m pleased that cooler heads prevailed and that USDA will now have the funds it needs to help our farmers, ranchers, and dairy producers get back on their feet.”



Fortenberry Statement on House Vote to Fund the Government

Congressman Jeff Fortenberry (NE-01) issued the following statement tonight after the U.S. House of Representatives voted to the fund the federal government through December 11.

"Tonight, the House voted overwhelmingly to fund the government through December 11––protecting farmers and providing nutrition assistance to millions of Americans facing food insecurity due to coronavirus, while also keeping U.S. Citizenship and Immigration Services whole and working,” Fortenberry said.

“Now the bill moves to the Senate, where it is expected to obtain swift passage,” Fortenberry added.



Lawmakers Show Support for Farmers

The decision by House lawmakers to include a reimbursement of the Commodity Credit Corporation (CCC) in the continuing resolution demonstrates their support for America’s farmers. The measure passed tonight and will now go to the Senate. Funds from the CCC support farm programs ranging from conservation to risk management. The CCC was dangerously close to running out of funds, which would have effectively shut down the farm safety net.

American Farm Bureau President Zippy Duvall says:

“We applaud Chairman Peterson and Ranking Member Conaway for their leadership, and House lawmakers for putting aside their differences to address the hardships being felt by America’s farmers and ranchers. For years, funding the CCC has been a bipartisan commitment. While we were disappointed it recently became a political flashpoint, we are pleased lawmakers on both sides of the aisle recognize that these funds help to sustain conservation programs and stock America’s pantry. I would be remiss if I did not also thank the Farm Bureau members across the country who let their elected leaders know how important the farm safety net is to the future of U.S. agriculture. We are grateful farmers’ voices were heard.”



Ranch Group Appreciates the Introduction of New Legislation to Address Dysfunctional Cattle Markets

Today, Senator Deb Fischer (R-NE) introduced the Cattle Market Transparency Act of 2020 in response to packer concentration and the lack of competition in U.S. cattle markets, an ultra-thin price discovery market for fed cattle, and the U.S. Department of Agriculture’s (USDA’s) non-disclosure of pricing information in regions with too few fed cattle buyers.

Fischer’s bill follows the introduction of a bipartisan bill introduced in mid-May by Senators Chuck Grassley (R-IA) and Jon Tester (D-MT), and subsequent introduction of a companion bill in the U.S. House by Representative Cindy Axne (R-IA). The earlier Senate bill (S. 3693) and earlier House bill (H.R. 7501) were efforts to administer triage to the cattle market by restoring robust competition in the ultra-thin fed cattle cash market. The bills would accomplish this by requiring the largest beef packers to purchase at least 50% of their cattle needs from the fed cattle cash market and to slaughter those cattle within 14 days.

The earlier introduced bills, however, were never scheduled for a hearing by the U.S. Senate agriculture committee and have languished for months without any action while the dysfunctional cattle market persisted – a market marked by historically high prices for beef while cattle prices remain seriously depressed.

“We are pleased that Congress is taking the dysfunctional cattle market seriously as evidenced by the bill introduced today by Senator Fischer,” commented R-CALF USA CEO Bill Bullard.

Fischer’s bill differs from the earlier Senate and House bills by proposing that minimum purchase volumes in the fed cattle cash market be established not on a national level by Congress; but rather, on a regional level to be established sometime in the future by the USDA.

In addition, the Fischer bill goes beyond addressing the ultra-thin cash market by borrowing a concept first raised in the 2010 proposed rule that R-CALF USA supported and that would have required packers to submit a sample copy of each unique type of cattle purchasing contract or agreement to the USDA. The Fischer bill adopts this concept through its requirement that packers submit their various contracts to the USDA, which would then maintain a library of those submitted contracts.

The Fischer bill also addresses the USDA’s current non-disclosure of pricing information in states and regions where the USDA believes there are too few buyers. It does this by requiring the USDA to disclose to the public all pricing information that it collects under the Livestock Mandatory Reporting Act.

Another provision of the Fischer bill will mandate that packers report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.

“We appreciate and welcome Senator Fischer’s bill and hope that even more bills will be introduced so our industry can choose from among the very best solutions to restore robust competition to our shrinking U.S. cattle industry,” Bullard said adding, “And one of those new bills must include the requirement that all beef sold in the U.S. be labeled with its country of origin.”



Cargill, McDonald's, Others Launch Million Acre Grazing Initiative

Cross-industry collaboration is crucial to meeting the global demand for protein while also addressing the urgency of climate change and nature loss. Responding to this challenge, today the Walmart Foundation, Cargill and McDonald's are investing over $6 million in an initiative led by World Wildlife Fund that aims to make lasting improvements to the grasslands of the Northern Great Plains.

The new program, known as the Ranch Systems and Viability Planning (RSVP) network, will support ranchers across the ecoregion-focusing primarily on Montana, Nebraska and South Dakota-with technical expertise, training and tools to help advance grazing practices that improve the health of the land. By improving management of one million acres over five years and avoiding conversion, this effort will result in increased carbon storage and sequestration, improved water infiltration and better outcomes for biodiversity.

This program supports the Walmart Foundation's focus to bring more sustainable, regenerative practices to the beef industry. The Foundation aims to build connections that can accelerate systems change and form communities of practice with grantees and leaders to share learnings, advance best practices, foster collaboration and scale collective impact. Investing in conservation activities in the Northern Great Plains supports the stewards of those lands and contributes to climate resilience efforts.

This partnership also supports McDonald's ambition to use its scale and many relationships from the farm to the restaurant to help significantly reduce greenhouse gas emissions and evolve the food system for a resilient and sustainable future. As the first restaurant company in the world to set an approved science-based target on climate action, McDonald's is partnering across the supply chain to employ a diverse set of strategies, which scale-up action across the industry.

The project is also part of Cargill's BeefUp Sustainability initiative, which seeks to reduce greenhouse gas emissions throughout the company's beef supply chain by 30 percent by 2030, measured on a per pound of beef basis against a 2017 baseline. Earlier this year, Cargill launched two other programs to support this goal, including a grassland restoration effort and an initiative to implement proven soil health practices in cattle feed.