Wednesday May 5 Ag News

Ricketts Proclaims “Beef Month” & Highlights Beef Passport Dining Program

This morning, Governor Pete Ricketts proclaimed May as “Beef Month” in Nebraska at Misty’s Steakhouse in downtown Lincoln.  He was joined by Nebraska Department of Agriculture (NDA) Director Steve Wellman, Nebraska Beef Council Chairman George Cooksley, and Nebraska Cattlemen President William Rhea III.  At the ceremony, the Governor encouraged Nebraskans to take part in the 2021 Good Life Good Steaks Beef Passport program organized by the Nebraska Beef Council.

“Nebraska has long been known as the Beef State,” said Gov. Ricketts.  “Our cattle industry grows Nebraska by generating over $10 billion in cash receipts each year.  The new Beef Passport program gives Nebraskans the opportunity to support our ranchers by dining on delicious cuts of Nebraska beef.”

Through the Beef Passport program, Nebraskans can qualify for prize drawings by dining at 41 participating restaurants across the state that serve premium Nebraska beef.  Diners will receive a stamp on their passport for each restaurant they visit.  Stamps can be collected now through September 7, 2021.  To order a passport, see a list of participating restaurants, and get information on program rules and prizes, go to www.goodlifegreatsteaks.org.

“The beef community is the heart of Nebraska,” said William H. Rhea III, President of the Nebraska Cattlemen.  “With a continued focus on conservation and care, Nebraska farmers and ranchers are laser focused on enriching the land and caring for their animals.  The Beef State is an unmatched leader in delivering high-quality beef to those who love it, with the best people in the business each step along the way.  On behalf of Nebraska Cattlemen members, we thank Governor Ricketts for once again declaring May as ‘Beef Month’ and hope everyone celebrates with beef today—and every day.”

Nebraska ranks first in the nation for commercial cattle slaughter, second for beef exports, and second for all cattle on feed.  In 2019, beef was Nebraska’s number two agricultural export behind soybeans.  Nebraska has 22 million acres of rangeland and pastureland, about half of which are in the Sandhills.



Quarterly webinar will cover cash rental rates, landlord-tenant issues and drought concerns across Nebraska

The University of Nebraska-Lincoln’s Department of Agricultural Economics will continue its live webinar series, Land Management Quarterly, on May 17 at noon.

Since 2019, the series has offered management advice and insight for Nebraska landowners, agricultural producers and others with interest in crop or grazing land along with related properties across the state.

The May 17 webinar will cover 2021 cash rental rates and land values in Nebraska, critical communication issues between landlords and tenants and address growing drought concerns across the state. The presentation will also include an “ask the experts” session, offering participants the chance to get live answers to their land or lease questions.

The webinars are led by Jim Jansen and Allan Vyhnalek, who are both in the Department of Agricultural Economics. Jansen focuses on agricultural finance and land economics, as well as the direction of the annual Nebraska Farm Real Estate Market Survey and Report. Vyhnalek is a farm succession and farmland management extension educator.

“Rising drought concerns and higher commodity prices over the last month have placed an immense amount of uncertainty on those involved with agricultural land,” Jansen said. “This webinar will address this uncertainty when developing equitable cash rents and considerations for developing an effective lease arrangement that accounts for drought conditions.”

2021 Land Management Quarterly webinar dates are:
    May 17, noon
    Aug. 16, noon
    Nov. 15, noon

Registration is free at https://agecon.unl.edu/landmanagement. Questions may be submitted on the site ahead of time. The recording will be available the following day, along with recordings from the entire series.



Smith, Fischbach Lead Over 130 House Colleagues In Opposing Stepped-Up Basis Repeal and Capital Gains Death Tax

Representatives Adrian Smith (R-NE) and Michelle Fischbach (R-MN) today led more than 130 of their House of Representatives colleagues in sending a letter to Speaker Nancy Pelosi and Republican Leader Kevin McCarthy opposing the Biden Administration’s proposal to repeal stepped-up basis from the tax code and require payment of capital gains taxes at death.

“Small businesses, farms, and ranches are the lifeblood of America, creating jobs and economic opportunity across our country,” said Rep. Smith. “Protecting stepped-up basis across generations and ensuring capital gains taxes are only collected upon the sale of an asset are vital to ensuring local, family-owned businesses remain local, family-owned businesses, supporting and creating jobs in their home communities. Our focus should be on tax policies which encourage small businesses to create jobs; not on punitive taxes which could force families out of business.”

“President Biden’s plan to eliminate stepped-up basis and assess capital gains taxes at death would be devastating for the agricultural economy and would have a disproportionate effect on rural districts like the one I represent,” said Rep. Fischbach. “Without a step-up in basis, the next generation of farmers and ranchers will absorb massive tax increases just to continue their family farm. I cannot and will not support a tax plan that pads the federal coffers at the expense of America’s farmers, and I urge President Biden and House Democrats to reconsider his proposal.”

“America’s farmers and ranchers rely on the stepped-up basis tax provision to pass their farms on to their children,” said Zippy Duvall, President of the American Farm Bureau Federation. “Eliminating it could force families to take out costly loans or sell their land bit by bit just to pay the taxes. We urge Congress to leave the stepped-up basis tax provision untouched to ensure a lifetime of hard work and sacrifice helps the next generation of farmers to thrive.”

“Nebraska’s farm and ranch families truly appreciate the efforts of Congressman Smith, Congresswoman Fischbach, and the over 130 members of the House who signed onto this important letter clearly stating their support for continuing stepped-up basis,” said Mark McHargue, President of the Nebraska Farm Bureau Federation. “The elimination of this important tax provision is simply another attempt to make death a taxable event. No farmer, rancher, business owner, or family should be forced to sell parts of their business or any asset just to pay the federal government. We believe this sends a powerful message to all of those in Washington who are pushing for tax increases that will harm family farms, ranches, and businesses which provide jobs and support Nebraska communities.”

“Minnesota Farm Bureau greatly appreciates Representatives Fischbach and Smith’s leadership on raising concerns with any attempt to repeal stepped up basis and taxing capital gains at death,” said Kevin Paap, President of the Minnesota Farm Bureau. “Eliminating the stepped-up basis would lead to more consolidation of agriculture and several family-owned farms would be forced out of business because of the increased tax liability. Stepped-up basis helps pass family farms on to the next generation and should be preserved.”

“ASA has long advocated for needed improvements to infrastructure vital to agriculture’s success in the years ahead,” said Kevin Scott, President of the American Soybean Association and farmer from South Dakota. “Yet, progress cannot come at the very expense of those trying to abettor our American economy—the farmers who work every day to assure our crops stay competitive on the global market.  We have grave concerns over elimination of stepped up basis or any changes to the basis process that are not thoughtful as to the real repercussions on our U.S. farm families.”

“Repealing stepped-up basis is not a free lunch for those looking to generate tax revenue and would have significant consequences in the multifamily marketplace,” said Doug Bibby, President of the National Multifamily Housing Council. “Absent stepped-up basis, heirs could inherit an apartment property with a small amount basis and possibly sizeable debt. If they are taxed immediately, the resulting depreciation recapture and capital gains taxes could exceed their ability to pay without selling the asset. Even if funds to pay tax are available, heirs may have little left over to invest in and maintain the property, which could negatively impact the available affordable housing stock.”

Under current law, when a home, small business, or farm is passed on to the next generation, our tax code allows for stepped-up basis, ensuring the inheritor is only responsible for the increased value of an asset from the time they acquired it and not for gains which benefited a previous generation. The tax code also recognizes the only appropriate time to tax capital gains is upon the sale of an asset, as any effort to tax unrealized gains would necessitate the sale of assets which would otherwise continue to be utilized to create jobs and economic opportunity.



EFFICIENCY IS KEY TO PROFIT ON STOCKER CATTLE
Connor Biehler, Beef Systems Asst. Extension Educator

This spring as the grass continues to green up yearling cattle will find their way to the pastures of the great plains for summer grazing. Cattle are stocked on grass pasture this time of year due to its additional nutritive quality that equates to gains prior to entering the feedlot. One economically justifiable way to make stocker cattle more efficient on grass is by administering implants. Utilization of implants in stocker cattle can increase average daily gain by 5-20%, improve feed efficiency by 5-15%, and improve lean tissue deposition by 5-12%.

            Implants are natural or synthetic hormones released into the blood that increase growth hormone secretion in cattle. Naturally occurring hormones include estradiol, progesterone, and testosterone, whereas synthetic hormones are analogs of the natural hormones with greater activity. Depending upon brand and product, implants vary in dosage level and payout period (lifespan of active ingredient). The potency of an implant must correlate with the energy level of the diet. High potency implants should be used for cattle on high energy, feedlot diets. Stocker cattle on grass are not consuming the energy content that is equivalent to the greater dosages of high-potency implants, thus do not require high dosage implants.

Implant strategies should be selected based on potency – for terminal cattle on grass, only use implants that are approved for grazing cattle. Multiple brands and varieties that contain active ingredients either singularly or in various combinations are available on the market. The proper implant should be tailored to the production goals of the cattle. Spring green-up through the summer provides sufficient energy to support protein deposition for the increasing gains that would be expected from a moderately-potent implant. Meaning that a lower potency implant may not offer the best return on your dollar when forage quality is at its highest early in the summer. Adversely, later in the summer, or in years with moderate to severe drought conditions, nutrient intake may decline due to quality of forage, and a moderately-potent implant could lack the capability to function to its fullest abilities.

            The payout for common implants compatible for stocker cattle is usually around 100 days, although some can payout much longer. Summer grazing usually lasts around 120 days. If cattle are implanted when they are processed going onto summer pasture, there will be about a 20-day period where the implant is no longer paying out. Forage quality and quantity are decreasing at this time so one option for producers would be to not re-implant when quality and quantity of forage begin to dwindle because cattle are not going to meet the nutrient requirements for the implants to be as efficient as they possibly could be. The cost of implanting along with the time and effort it takes to gather the cattle might not be worthwhile when weighing the options.    

For more information on Nebraska Beef Extension or implanting cattle on grass pasture reach me at my office (402) 624-8007 or follow my twitter page @BigRedBeefTalk for more information on Nebraska Beef Extension.



Record-Breaking Performance for U.S. Beef and Pork Exports in March

U.S. red meat exports ended the first quarter on a very high note, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF), with March beef and pork exports each posting the highest monthly value on record. Pork exports and shipments of beef muscle cuts also set new volume records in March.

Beef exports totaled 124,808 metric tons (mt) in March, up 8% from a year ago and the second largest of the post-BSE era. Export value broke the $800 million mark for the first time at $801.9 million, up 14% year-over-year. Beef muscle cut exports set new monthly records for both volume (98,986 mt, up 13% from a year ago) and value ($718.3 million, up 17%). For the first quarter, beef exports pulled even with last year's pace at 333,348 mt, valued at $2.12 billion. For beef muscle cuts, first quarter exports increased 4% to 262,914 mt, valued at $1.9 billion (up 5%).

March highlights for U.S. beef included record exports to China, Honduras and the Philippines and strong results in South Korea, Chile and Colombia.

March pork exports were record-large at 294,724 mt, up 1% from last year's strong total, and set a new value record at $794.9 million (up 4%). Pork muscle cuts also set new monthly records for both volume (247,660 mt, up 2% from a year ago) and value $689.2 million (up 4%). For the first quarter, pork exports were 7% below last year's pace in both volume (782,620 mt) and value ($2.07 billion). Pork muscle cuts followed a similar trend at 659,420 mt (down 7%), valued at $1.79 billion (down 8%).

March pork exports were led by strong performances in Japan, Mexico, the Philippines and Central America, including new records in Honduras, Guatemala, Costa Rica, El Salvador and Nicaragua. Exports were also record-large to the Dominican Republic for the second consecutive month.

"It's very gratifying to see such an outstanding breakout month for U.S. beef and pork exports," said USMEF President and CEO Dan Halstrom. "Exports were off to a respectable start in 2021, considering the logistical and labor challenges the industry is facing and ongoing restrictions on the foodservice sector in many key markets. While these obstacles are not totally behind us, the March results show the situation is improving and the export totals better reflect the strong level of global demand for U.S. red meat."

While muscle cuts certainly drove March export growth, Halstrom was also encouraged by a rebound in shipments of beef and pork variety meat.

"The tight labor situation at the plant level has been especially hard on variety meat volumes," Halstrom said. "But March variety meat exports matched last year's performance for pork and were the largest of 2021 on the beef side. It's important that the capture rate for variety meat continues to improve, as this is a critical component of the export product mix."

March exports of U.S. lamb were up 54% from a year ago to 1,089 mt, valued at $1.5 million (up 22%). For the first quarter, export volume increased 64% from a year ago to 3,268 mt, but value was down 4% at $4.3 million. Lamb variety meat exports were led by strong demand in Mexico, while lamb muscle cuts increased to the Dominican Republic, Bermuda and Canada.



Lawmakers Seek Level Playing Field for U.S. Pork Producers in Vietnam

More than 70 U.S. lawmakers sent a letter today to U.S. Trade Representative Katherine Tai seeking her support for enhanced Vietnamese market access for U.S. pork. Vietnam represents a tremendous opportunity for U.S. pork exports, and the National Pork Producers Council (NPPC) appreciates the tremendous support for one of its top trade priorities.

“We thank the lawmakers, led by Reps. Ron Kind (D-Wis.), Darin LaHood (R-Ill.), Jim Costa (D-Calif.) and Dusty Johnson (R-S.D.), for their support in recognizing the importance of the Vietnamese market to U.S. pork producers,” said NPPC President Jen Sorenson, communications director for Iowa Select Farms in West Des Moines, Iowa. “Vietnam represents a significant opportunity for U.S. hog farmers, yet we’re hamstrung by unjustified tariff and non-tariff barriers, allowing global competitors to take advantage of the supply shortfall.”

Vietnam’s domestic pork production industry is struggling with African swine fever, yet unwarranted tariff and non-tariff barriers restrict the United States from supplying this major pork-consuming nation with affordable, high-quality pork, explained the letter to Tai. “Domestic pork producers need a level playing field to compete in this critical market, particularly after being devastated by trade retaliation and the global pandemic,” the letter noted.

Last year, Vietnam took an initial step forward in addressing the U.S. pork tariff disadvantage when, from July-December 2020, it temporarily reduced its Most Favored Nation tariff rates from 15 percent to 10 percent for frozen U.S. pork products. As a result, U.S. pork exports doubled during that timeframe, compared to the first half of the year. “The surge in exports during the tariff reprieve, coupled with Vietnam’s growing population and cultural preference for high-quality pork, demonstrates that the United States is barely scratching the surface of its export potential to Vietnam,” the letter added.



Premier Cattle Industry Education Experience Heading to Tennessee

Tune in to Tennessee for the 28th annual Cattlemen’s College, Aug. 9-10, which kicks off the 2021 Cattle Industry Convention & NCBA Trade Show in Nashville, Tenn. Cattlemen’s College, sponsored by Zoetis, brings thought-provoking, stimulating sessions that can help generate better returns for operations.

“We’ve designed Cattlemen’s College with the producer in mind and have created the best education experience available based on past attendee feedback,” said Josh White, executive director of producer education & sustainability with the National Cattlemen’s Beef Association. “Our goal is to offer a variety of topics and feature the best speakers, providing great value for producers.”

The event includes two days of learning, idea sharing and networking. In addition to Monday’s “producer’s choice” sessions which provide a preview of Tuesday’s educational experience, risk management is the headlining topic. Sessions will focus on the basics of business risk and tools and resources available for producers as well as a deep dive into Livestock Risk Protection and diversification.

The Zoetis Demonstration Arena features a live animal genomics demonstration where tradition collides with innovation and genetic insights are envisioned to help better inform decisions to enhance production efficiency throughout the beef supply chain. Monday concludes with an evening reception offering an opportunity for everyone to gather with friends and reconnect.

This year’s event features cutting-edge topics and top industry leaders such as Tuesday’s keynote speaker, Dr. Jayson Lusk from Purdue University who will discuss industry impacts from COVID-19 and keeping beef at the center of the plate. There will be 18 sessions and six educational tracks to choose from including making better decisions for better outcomes, cattle breeding & selection, maintaining a healthy herd, practical nutrition, sustainability and hot topics such as preparing for activist threats.

More than 1,000 people attend this popular event each year, but for those not attending the Cattle Industry Convention in person, a new virtual option of Cattlemen’s College will be available for 2021, combining selected live sessions and recordings for participants to view at home. Whether participating in person or experiencing the event virtually, all sessions will be recorded and available for registered attendees to watch at any time in the future.

Registration begins June 1, 2021. Look for the Education Package, which offers the best value. For more information, visit https://convention.ncba.org/.  

“Make plans to arrive early in Tennessee and kick off your convention experience with Cattlemen’s College, we can’t wait to see you there,” said White.



Fertilizer Prices Stall

While prices for all eight of the major fertilizers were higher at the end of April compared to a month earlier, none were significantly higher, which DTN designates as 5% or more. It's the second week in a row prices showed more muted moves higher after several months of rising sharply.

For the fourth week of April 2021, DAP had an average price of $629/ton, MAP $703/ton and potash $433/ton, about a 1% increase in prices. Urea, at $513/ton, and 10-34-0, at $613/ton, were each up 2%. The average retail price of UAN28 increased 3% to $350/ton, while anhydrous and UAN32 were each up 4%, at $710/ton and $391/ton, respectively.

On a price per pound of nitrogen basis, the average urea price was at $0.56/lb.N, anhydrous $0.43/lb.N, UAN28 $0.62/lb.N and UAN32 $0.61/lb.N.

With retail fertilizer prices moving higher over recent months, all fertilizers are now higher in price from a year ago.  Potash is now 17% more expensive, 10-34-0 is 31% higher, urea is 33% more expensive, UAN32 40% higher, anhydrous is 44% more expensive, UAN28 is 48% higher, DAP is 52% more expensive and MAP 62% is higher compared to last year.



Weekly Ethanol Production for 4/30/2021

According to EIA data analyzed by the Renewable Fuels Association for the week ending April 30, ethanol production expanded 0.7%, or 7,000 barrels per day (b/d), to 952,000 b/d, equivalent to 39.98 million gallons daily. Production was 59.2% above the same week last year when the effects of the pandemic were reflected but was 8.1% below the same week in 2019. The four-week average ethanol production rate declined 0.6% to 945,000 b/d, equivalent to an annualized rate of 14.49 billion gallons (bg).

Ethanol stocks saw the first upturn in seven weeks, growing 3.6% to 20.4 million barrels. However, this is 20.2% below a year-ago and 9.0% below this time in 2019. Inventories built across all regions.

The volume of gasoline supplied to the U.S. market, a measure of implied demand, ticked down 0.1% to 8.86 million b/d (135.89 bg annualized). Gasoline demand was 33.0% above a year ago but was 3.9% below the same week in 2019.

Conversely, refiner/blender net inputs of ethanol increased 0.8% to 887,000 b/d, equivalent to 13.60 bg annualized. This was 49.1% above a year ago but was 3.5% below 2019.

There were zero imports of ethanol recorded for the twentieth consecutive week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of March 2021.)



New Analysis from DOE Researchers Confirms Ethanol’s Low-Carbon Benefits

The carbon footprint of corn ethanol shrunk by 23% between 2005 and 2019 as farmers and ethanol producers adopted new technologies and improved efficiency, according to a new analysis published in the academic journal Biofuels Bioproducts and Biorefining by scientists at the Department of Energy’s Argonne National Laboratory. By 2019, the researchers found, corn ethanol was reducing lifecycle greenhouse gas emissions by 44-52% compared to gasoline.

The researchers also determined that corn ethanol alone reduced transportation-related GHG emissions by nearly 550 million metric tons between 2005 and 2019. These findings are consistent with other research published earlier this year, which found corn ethanol offers an average GHG savings of 46% and the use of all biofuels (i.e., ethanol, renewable diesel, biodiesel, biogas, etc.) between 2008 and 2020 reduced GHG emissions by 980 million metric tons.

“Our study shows that while the corn ethanol industry has experienced significant volume expansion, it has reduced the GHG intensity of corn ethanol through improved US corn farming and ethanol biorefinery operations. Corn yield has increased, and chemical and energy use intensities of corn farming have decreased. In ethanol biorefineries, ethanol yield has increased, and energy use has decreased significantly,” according to the researchers. “Biofuels, including corn ethanol, can play a critical role in the U.S. desire for deep decarbonization of its economy.”

Commenting on the new research, RFA President and CEO Geoff Cooper said, “This new study from the experts at Argonne National Laboratory adds to a growing body of scientific evidence that proves today’s corn ethanol is playing a major role in decarbonizing our nation’s transportation fuels and combatting climate change. The researchers found that modern corn ethanol cuts GHG emissions by half compared to gasoline and underscored that the contribution of land-use change to total emissions is estimated to be relatively small, based on real-world experience and empirical data, compared to the levels that had been theorized toward the beginning of the timeframe examined. Continuous improvements in farming and biofuel production technology have helped establish ethanol as a true low-carbon fuel that is available here and now to clean up our nation’s liquid fuels. And, as acknowledged by these researchers, those improvements will continue; with the adoption of new and emerging technologies, we expect corn ethanol can be a net carbon-neutral or carbon-negative fuel by the end of this decade.

"We encourage the White House and Environmental Protection Agency to consider the findings of this study as they examine policy and regulatory opportunities for reducing carbon pollution. We also urge EPA to incorporate the Argonne results and other recent research as the agency considers updating its 12-year old GHG analysis of ethanol and other renewable fuels.”

The Argonne researchers attribute the improvement in corn ethanol’s GHG performance to efficiency gains in every phase of the fuel’s production lifecycle between 2005 and 2019, including:
    A 15% increase in corn yield per acre;
    A 7% reduction in nitrogen fertilizer use per bushel of corn;
    An 18% reduction in potash fertilizer user per bushel of corn;
    A 14% reduction per bushel in farming energy use;
    A 6.5% increase in ethanol yield; and
    A 24% reduction in ethanol plant energy use.

“The reduction in the 58 gCO2e/MJ CI of corn ethanol in 2005 to 45 g/MJ in 2019 (plus the LUC value of 7.4 g/MJ) provides significant GHG emission reductions compared to the CI of 93 gCO2e/MJ for the US average petroleum gasoline blendstock,” the study concludes.



ACE Commends Argonne Scientists for Providing Further Evidence Demonstrating Why Ethanol Must Be Part of the Climate Solution

Today, the American Coalition for Ethanol (ACE) welcomed more scientifically credible evidence provided by Department of Energy Argonne National Lab scientists that explicitly states, “Corn ethanol plays an important role in enhancing energy security and the rural economy while contributing to decarbonizing the transportation sector in the USA.”

The new study shows a significant decrease in carbon intensity (CI) from 58 to 45 gCO2e/MJ of corn ethanol (a 23 percent reduction) over the past 15 years — from 2005 to 2019 — thanks to improvements occurring in corn farming and within ethanol facilities. The displacement of gasoline by corn ethanol on an energy‐equivalent basis from 2005 to 2019 has resulted in a cumulative greenhouse gas (GHG) emissions reduction of 544 MMT CO2e, according to the researchers. The analysis finds that “ethanol plants have reduced ethanol production emissions by 30 percent (or 11 gCO2e/MJ) over the 15‐year period, mainly by reducing the energy inputs per unit of ethanol produced. Corn farming reduced chemical and energy input intensities, which contributes to a 17 percent reduction in farming‐related emissions (4.9 gCO2e/MJ).”

Further, the study authors note that “there has been a growing interest in further reducing the overall CI of crop‐based biofuels by cutting down the GHG emissions of biofuel feedstock, which correlates significantly with agronomic practices and chemical and energy inputs in individual farms. Proposals are being made about incentivizing low‐carbon biofuel feedstocks in U.S. fuel regulatory programs to promote sustainable farming practices. This will offer further opportunities to advance the sustainability of farming and reduce biofuel CIs.”

ACE CEO Brian Jennings responded to the study findings in the following statement:

“ACE commends the scientists who contributed to this important research regarding the low carbon benefits of corn ethanol. The evidence is mounting that agriculture and ethanol can and should be part of the solution to significantly reduce GHG emissions, both in the immediate future and long term.

“When modelers provide credit for soil carbon sequestration, corn ethanol will approach net-negative emissions territory. Further, with the adoption of carbon capture and sequestration, ethanol will be the only transportation energy source that can credibly say it has the ability to reach net-negative carbon intensity in the future.”



RFA Hails EPA’s Decision to Cooperate with GAO on Small Refinery Exemption Investigation

The Renewable Fuels Association today praised the U.S. Environmental Protection Agency for its decision to provide requested information to the Government Accountability Office related to small refinery exemptions under the Renewable Fuel Standard. In today’s Federal Register, EPA announced it will provide the GAO with “…all documents, information, and data related to all small refinery exemption petitions received by EPA from the start of the RFS program through the present.”

In 2019, then-Rep. Abby Finkenauer (D-IA) and 11 other members of the House Biofuels Caucus formally requested that GAO investigate the previous administration’s secretive process for reviewing and deciding small refinery exemption petitions. GAO announced in January 2020 that it would conduct the requested investigation, and in May 2020 the organization asked EPA to provide information related to small refinery exemptions. However, EPA under the previous administration refused to turn over the requested information to GAO, despite three separate requests.

“Today’s announcement that EPA will cooperate with the GAO investigation is a win for transparency and accountability,” said RFA President and CEO Geoff Cooper. “We applaud the new leadership at EPA for providing the requested information to GAO, and we thank Administrator Regan for taking another important step toward restoring the integrity of the RFS program. RFA also is grateful to the bipartisan group of lawmakers, led by former Rep. Abby Finkenauer and Rep. Cindy Axne, who requested this investigation nearly two years ago and wouldn’t take ‘no’ for an answer. Ethanol producers look forward to the results of GAO’s investigation and believe it will shine much-needed light on the previous EPA’s dark and secretive management of the exemption program.”

Cooper also noted that RFA sued the previous administration’s EPA for its failure to properly respond to Freedom of Information Act requests filed by RFA and others. RFA’s FOIA requests sought agency records regarding small refinery exemptions—similar to those now being provided to GAO.

On the legislative front this year, the RFS Integrity Act, H.R. 1113, sponsored by Rep. Angie Craig (D-MN) and the CLEAN Future Act, H.R. 1512, sponsored by Rep. Frank Pallone (D-NJ), each includes provisions that set a deadline for annual submission of petitions to extend small refinery exemptions and increase transparency by making certain information from those petitions subject to public disclosure.  



During Days of Advocacy, Farmers Union Members Advocate Immediate Climate Action

As climate change poses an increasingly serious threat to farmers’ livelihoods and global food security, a group of National Farmers Union (NFU) members will be discussing meaningful legislative solutions with their elected representatives.

“Farmers are no stranger to big challenges, but climate change is the biggest, most complex test the agriculture sector has ever confronted. We all need to work swiftly, boldly, and cooperatively to rein in this crisis – a fact that an ever-growing contingent of legislators and administration officials is coming to realize,” said NFU President Rob Larew. “While we’re really encouraged by the strong, bipartisan support for climate action, we want to ensure these efforts take farmers’ unique needs and interests into account. That’s why these meetings are so critical; after hearing directly from farmers about their experiences, our lawmakers will be better positioned to develop effective climate policy.”

During virtual meetings with members of the Senate and House Agriculture Committees this week and next, participating Farmers Union members will push for voluntary, incentive-based programs and market initiatives that help operations of all types and sizes implement climate-friendly practices and install on-farm renewable energy systems. To ensure such programs are executed smoothly, they will also promote robust funding for technical assistance. Read the full list of policy recommendations here. Additionally, participants and other Farmers Union members will sit down with U.S. Department of Agriculture (USDA) officials to learn more about the administration’s climate initiatives.

“Between sequestering carbon in the soil, reducing on-farm greenhouse gas emissions, and producing renewable energy, there is a lot that farmers are already doing to mitigate and adapt to climate change,” Larew said. “There’s even more they could be doing, but these practices are often time, money, and skill intensive. The policies we’re advocating this week are intended to help eliminate those barriers and make climate-smart agriculture as accessible as possible.”

The attendees of these days of advocacy sit on NFU’s Climate Change Policy Advisory Panel (CCPAP), through which they advise the organization’s climate-related legislative work, educational programming, outreach, and communications. Other Farmers Union members will have an opportunity to contribute by calling or writing letters to their legislators.



DMC Margin Rises in March
NMPF

The March margin under the federal Dairy Margin Coverage Program rose $0.24/cwt above February’s to $6.46/cwt, with forecast for future margin’s indicating that February may have been the year’s low.

The March U.S. average all-milk price was $17.40/cwt, $0.30/cwt higher than in February, while the DMC March calculated feed cost was just $0.06/cwt higher than February’s. On a per hundredweight of milk basis, a higher corn price in March was almost entirely offset by a lower cost of soybean meal. The March payment for $9.50/cwt DMC program coverage is $3.04/cwt. On an annualized basis, the DMC program will have already paid the equivalent of $2.17/cwt for coverage at $9.50/cwt during the first quarter of 2021 alone.

Current futures prices indicate that the DMC program margins going forward may remain below $9.50/cwt until late summer, as rising milk prices compete with higher costs for corn and hay. USDA reported that 164.7 billion pounds of production history, or 79.4 percent of the total, was enrolled in the 2021 DMC program, with an estimated $223 million in payments for disbursement as of April 19.

CWT-Assisted Dairy Product Export Sales Top 10 Million Pounds in April
In April, CWT members secured 46 contracts to sell 2.7 million pounds of American-type cheese, 1.1 million pounds of butter, 3.4 million pounds of anhydrous milkfat (AMF), 2.3 million pounds of whole milk powder (WMP), and 1.1 million pounds of cream cheese. These products are going to customers in Asia, Central and South America, the Middle East, North Africa, and Oceania. They will be shipped April through September 2021.

These sales bring the total 2021 CWT-assisted dairy product exports to 14.5 million pounds of cheese, 9.9 million pounds of butter, 7.1 million pounds of anhydrous milkfat, 15.7 million pounds of whole milk powder, and 5.5 million pounds of cream cheese. Member cooperatives have captured sales contracts that will move overseas the equivalent of 706.8 million pounds of milk in 2021.

As dairy farmers work to recover from a challenging 2020, doing what is necessary to strengthen and maintain milk prices is a must. The key for both dairy farmers and dairy cooperatives in 2021 is dairy exports. CWT provides a means to move domestic dairy products to overseas markets by helping to overcome certain disadvantages such as the domestic/global price gap and shipping costs.



Dairy Farmers to Seek Emergency USDA Hearing on Class I Mover Reform

NMPF’s Board of Directors voted April 23 to request an emergency USDA hearing on a Federal Milk Marketing Order proposal to restore fairness for farmers in the Class I fluid milk price mover. The endorsement of the board, which represents dairy farmers and cooperatives nationwide, followed approval April 16 from the organization’s Executive Committee.

The NMPF plan would ensure that farmers recover lost revenue and establish more equitable distribution of risk among dairy farmers and processors. The current mover, adopted in the 2018 farm bill, was intended to be revenue neutral while facilitating increased price risk management by fluid milk bottlers. But the new Class I mover contributed to disorderly marketing conditions last year during the height of the COVID-19 pandemic and cost dairy farmers over $725 million in lost income.

NMPF’s proposal would help recoup the lost revenue and ensure that neither farmers nor processors are disproportionately impacted by future significant price disruptions.

    “As the COVID-19 experience has shown, market stresses can shift the mover in ways that affect dairy farmers much more than processors. This was not the intent of the Class I mover formula negotiated within the industry,” said Randy Mooney, the dairy farmer chairman of NMPF’s Board of Directors. “The current mover was explicitly developed to be a revenue-neutral solution to the concerns of fluid milk processors about hedging their price risk, with equity among market participants a stated goal.

    “Dairy farmers were pleased with the previous method of determining Class I prices and had no need to change it, but we tried to accommodate the concerns of fluid processors for better risk management. Unfortunately, the severe imbalances we’ve seen in the past year plainly show that a modified approach is necessary. We will urge USDA to adopt our plan to restore equity and create more orderly marketing conditions,” Mooney said.

While the current Class I mover was designed to improve the ability of fluid milk handlers to hedge milk prices using the futures market, it was also expected to be revenue-neutral compared to the formula it replaced. But that has not been the case. The significant gaps between Class III and IV prices that developed during the pandemic exposed dairy farmers to losses that were not experienced by processors, showing the need for a formula that better accounts for disorderly market conditions.

NMPF’s proposal would modify the current Class I mover, which adds $0.74/cwt to the monthly average of Classes III and IV, by adjusting this amount every two years based on conditions over the prior 24 months, with the current mover remaining the floor. NMPF’s request will be to limit the hearing specifically to proposed changes to the mover, after which USDA would have 30 days to issue an action plan that would determine whether USDA would act on an emergency basis​. NMPF plans to formally submit its proposal to USDA this month.



FFAR Grant Builds Supply Chains for Environmentally Beneficial Crops

Summer crops such as wheat, rice and corn can be profitable for farmers, but post-harvest farmland is unproductive for several months during the off season. This farmland can accumulate a variety of water-related challenges, including soil nutrient loss and erosion and precipitation runoff. However, continuous living cover crops can prevent these challenges. The Foundation for Food & Agriculture Research (FFAR) is awarding a $1,997,454 grant to the University of Minnesota to develop models for sustainable supply chains that create markets for crops farmers can grow between seasons.

“While popular cover crops can be used as food or as inputs in other products, there may not be large markets for these crops,” explained FFAR Executive Director Dr. Sally Rockey. “FFAR hopes to increase the use of cover crops – and reap the environmental benefits – by creating a sustainable market with consistent buyers for these crops.”

Planting continuous living cover crops, such as intermediate wheatgrass, winter camelina, pennycress, winter barley and hybrid hazelnut, has several environmental benefits. These perennials—which do not require replanting—and winter-hardy annual crops decrease fertilizer runoff to surface and groundwater and increase farmland’s ability to absorb and hold rainfall. Croplands that better retain water can reduce soil erosion and prevent downstream flooding of cities and infrastructure. However, farmers are often hesitant to plant these crops because most are not widely used commercially, making farming and supply chain logistics risky or cost prohibitive.

“By preserving soil health and improving water management, continuous living cover crops are already valuable to growers,” said Dr. Jeff Rosichan, director of FFAR’s Crops of the Future Collaborative. “In addition to these environmental benefits, this research will provide growers with greater financial incentives to use continuous living cover crops.”

University of Minnesota researchers, led by Dr. Nicholas Jordan, are working with cross-sector partners to develop and scale sustainable supply chains for several cover crops. Sustainable supply chains link on-farm crop production to end-use markets in economically, environmentally and socially beneficial ways. Researchers are running six regional pilot projects to determine appropriate crops for various sites and growing conditions. This research is examining potential markets, water management needs and other environmental and social benefits of perennials and cover crops. The multilevel strategy will lead to larger supply and demand systems for a wider adoption of the crops.

The project involves engagement between growers, end-user companies, water-management and environmental stakeholders and others. The planning process is identifying how to integrate production with post-production supply chain infrastructure and will connect farmers with private-sector firms interested in purchasing continuous living cover crops for commercial use.

“Robust supply chains that link supply to demand are key to farmers’ adoption of continuous living cover crops and to realizing the environmental and economic benefits that these crops offer,” said Dr. Jordan. “We are deeply grateful for the opportunity to research new supply-chain development strategies for these crops.”

Matching funds are being provided by Agricultural Utilization Research Institute, Cargill, Friends of the Mississippi River, Minnesota Environment and Natural Resources Trust Fund as recommended by the Legislative-Citizen Commission on Minnesota Resources, McKnight Foundation, Minnesota Department of Agriculture, NORI, Pipeline Foods, The Land Institute and Walton Family Foundation for a total $3,997,423 investment.