Friday July 26 Ag News

Failure to Modernize Farm Bill Has Measurable Consequences

The very real and damaging consequences of Congress’ failure to pass a modernized farm bill are brought to light in a new analysis by American Farm Bureau Federation economists. It provides a clearer picture of major impacts of relying on the antiquated 2018 farm bill, including the likely loss of more family farms in the U.S., all of which impact the country’s ability to produce the food, fuel and fiber America’s families rely on.

The Market Intel highlights five specific impacts of the failure to pass a new farm bill: a weakened farmer safety net, less future funding for sustainability efforts, a gap in coverage for dairy farmers, further erosion of U.S. leadership in public agricultural research as China takes the lead, and reduced overall economic and national security.

AFBF President Zippy Duvall said, “If Congress fails to pass a new and improved farm bill, they will be responsible for leaving farmers in a lurch at a time when we’ve lost more than 140,000 family farms in just five years. When the current farm bill was drafted in 2018, the agricultural landscape was drastically different. Policy that pre-dates a global pandemic, historic inflation, skyrocketing supply costs and geopolitical uncertainty just won’t cut it today or next year. Congress must not put farmers, ranchers and America’s families on the back burner. The House Agriculture Committee has done its part so far. It's now time for the Senate Agriculture Committee to move this process forward.”

Reference prices, the point at which federal programs compensate farmers when markets bottom out, need to be modernized. The Market Intel states that while a few commodities’ reference prices have increased due to a price escalator added in the 2018 law, all lag significantly behind increases in cost-of-production.

Once a global leader, America has fallen far behind China in publicly funded agricultural research. China spends more than $10 billion a year on agricultural research, double the spending in the U.S. In fact, China's research investments nearly match the combined investments by the U.S., India and Brazil. "Supporting the productivity of U.S. agriculture is critical to our competitiveness in the larger world market; it is fundamental to building our capacity to contribute to environmental sustainability; and it is absolutely necessary to supporting the health and nutrition of the world’s population."

The current farm bill extension will expire in September. The nearly seven-year-old law never anticipated a global pandemic, global unrest, record-high inflation and supply chain issues. The people who rely on crucial farm bill programs recognize the need for action now. Five hundred and thirty organizations, including the American Farm Bureau Federation, this week sent a letter to Congress urging lawmakers to come together and pass a bipartisan farm bill.



All-Time Record Low Veal Production in June

Commercial red meat production for the United States totaled 4.27 billion pounds in June, down 6 percent from the 4.55 billion pounds produced in June 2023.

Beef production, at 2.14 billion pounds, was 9 percent below the previous year. Cattle slaughter totaled 2.54 million head, down 12 percent from June 2023. The average live weight was up 44 pounds from the previous year, at 1,382 pounds.

Veal production totaled 3.1 million pounds, 21 percent below June a year ago. Calf slaughter totaled 15,800 head, down 33 percent from June 2023. The average live weight was up 48 pounds from last year, at 331 pounds.

Pork production totaled 2.12 billion pounds, down 4 percent from the previous year. Hog slaughter totaled 9.92 million head, down 5 percent from June 2023. The average live weight was up 3 pounds from the previous year, at 287 pounds.

Lamb and mutton production, at 10.4 million pounds, was down 6 percent from June 2023. Sheep slaughter totaled 176,700 head, 2 percent below last year. The average live weight was 116 pounds, down 5 pounds from June a year ago.

By State            (miillion lbs.  -  % of June '23)
Nebraska .........:     631.0             96       
Iowa ...............:     701.7            100       
Kansas ............:     468.1             93       

January to June 2024 commercial red meat production was 27.2 billion pounds, down slightly from 2023. Accumulated beef production was down 2 percent from last year, veal was down 12 percent, pork was up 1 percent from last year, and lamb and mutton production was up slightly.



NEW STUDY SHOWS IOWA AGRICULTURE EVEN STRONGER

Iowa’s 86,911 family farms continue to be a key driver of Iowa’s economy, contributing 32 percent more to the state economy than in 2017, according to a new study commissioned by the Coalition to Support Iowa’s Farmers (CSIF). The study shows that more than 22 percent of Iowa’s total economic output came from Iowa agriculture in 2022.

The study analyzed data from the 2022 UDSA Census of Agriculture, USDA/NASS datasets, the IMPLAN modeling system, and the 2022 IMPLAN dataset to determine the contributions of Iowa agriculture.

The agriculture industry goes beyond just impacting the total economic output of the state. Nearly one in every five Iowans are employed due to agriculture and ag-related industries, accounting for more than 385,000 jobs.

“This study underscores how productive and innovative farmers continue to be, despite some very challenging times during Covid,” said Spencer Parkinson; of Decision Innovation Solutions (DIS) who conducted the study. “Infact, since the first report of this nature was completed by DIS in 2009, the labor income finding its source in agriculture and related industries has more than doubled, increasing from $12.6 billion to $25.8 billion in 2024 – these earnings benefit more than just those in agriculture, they support all Iowans.”

Even with this growth, Iowa’s farmers maintain their roots. More than 96 percent of farms in Iowa are family owned and operated with farm size averaging 345 acres.

“The agriculture industry remains a vital part of Iowa communities,” said Brian Waddingham, CSIF Executive Director. “We see this every time we host an open house with livestock farmers. It’s common to see hundreds of community members attend to celebrate what a new barn means to their community: jobs, kids in school and a boon to local businesses.”

Waddingham noted that livestock farming, and related industries account for $20.4 billion in value-added contributions for the state, up nearly $5 billion from 2017. It also accounts for nearly 170,000 jobs across Iowa.

“It’s a testament to the tenacity of livestock farmers, in particular, who have persevered through a global pandemic, low commodity prices, tariffs and Mother Nature to actually see an increase in economic output related to livestock in the state. There’s no question that the livestock industry is a critical piece to Iowa’s overall economy,” said Waddingham. “It’s also key to keeping farm families living and working on the land.”

“In the 20 years since the Coalition was formed, we’ve assisted more than 5,300 farm families wanting to responsibly grow their farms and bring young people back to rural Iowa. Diversification seems to be a key component to Iowa’s thriving livestock industry, from established livestock farmers to crop farmers adding livestock for the first time. Calls to CSIF for assistance remain high as farmers want to discuss which options are best for their farms. Whether it’s a new and beginning farmer or an existing and well-established farmer calling us, there is a great deal of optimism about adding livestock to the farm,” he added.

Waddingham noted that the calls for assistance include concerns over DNR and EPA inspections, neighbor relations, siting new livestock and poultry barns as well as raising shrimp. There are many opportunities in Iowa’s livestock industry today which will continue to evolve to provide farmers additional opportunities in the future. “As agriculture evolves so will CSIF and the services we provide to ensure the success of livestock agriculture in our state,” he said.

The study also noted that crop farming and processing account for 99,271 jobs, and $16.2 billion in value-added contributions to Iowa, up from $11.1 billion dollars in 2017.

For more information on the study and a county-by-county break out, visit http://www.supportfarmers.com/resources/county-map/

The Coalition to Support Iowa’s Farmers was created by farmers to help farmers raise livestock successfully and responsibly. It’s a joint partnership involving the Iowa Beef Industry Council, Iowa Cattlemen’s Association, Iowa Corn Growers Association, Iowa Farm Bureau Federation, Iowa Pork Producers Association, Iowa Soybean Association, Iowa Turkey Federation, Midwest Dairy and the NC Poultry Association.



USDA Cold Storage June 2024 Highlights

Total red meat supplies in freezers were down 2 percent from the previous month and down 2 percent from last year. Total pounds of beef in freezers were down 3 percent from the previous month and down slightly from last year. Frozen pork supplies were down 2 percent from the previous month and down 3 percent from last year. Stocks of pork bellies were down 16 percent from last month and down 14 percent from last year.

Total frozen poultry supplies on June 30, 2024 were up 2 percent from the previous month but down 8 percent from a year ago. Total stocks of chicken were up 1 percent from the previous month but down 13 percent from last year. Total pounds of turkey in freezers were up 5 percent from last month and up 2 percent from June 30, 2023.

Total natural cheese stocks in refrigerated warehouses on June 30, 2024 were down 1 percent from the previous month and down 6 percent from June 30, 2023. Butter stocks were down 2 percent from last month but up 7 percent from a year ago.

Total frozen fruit stocks were up 12 percent from last month and up 17 percent from a year ago. Total frozen vegetable stocks were down slightly from last month and down 2 percent from a year ago.



IRFA Urges USDA to Decouple Climate Smart Agriculture Carbon Credits from Physical Grain

Thursday, the Iowa Renewable Fuels Association (IRFA) submitted comments to the United States Department of Agriculture (USDA) in response to a request for information on potential future rulemakings to facilitate climate smart agriculture practices (CSA). IRFA urged that any rulemaking should decouple CSA carbon credits from physical bushels of grain in order to unleash the full potential of clean fuels in current and future markets.

“Requiring full supply chain traceability for every bushel produced using CSA practices is impractical, costly, and counter-productive to the goals of 45Z [the new clean fuel production tax credit],” IRFA stated in the comments. “Decoupling the CSA carbon credits from the physical bushel through a book and claim system unlocks numerous benefits for both farmers and clean fuel producers – and maximizes the carbon reductions made possible by 45Z tax credits.”

IRFA also agreed with other groups in asking the USDA to recognize several more CSA farming practices, less “one size fits all” mandatory bundling and ensuring farmers receive full credit for the carbon reduction of each practice.

“While we recognize that there is uncertainty in some CSA modeling, we urge the Department to adopt the best available science and to update any regulations as better science becomes available in a continuous cycle of improvement...The only thing that is certain is that if adopting a CSA practice does not provide a return-on-investment to the farmer, adoption will be much slower than if it did,” stated the comments.

 

RFA to USDA: Embrace Book-and-Claim Accounting for Climate Smart Agriculture Feedstocks

The Renewable Fuels Association yesterday submitted comments urging the U.S. Department of Agriculture to implement the use of a “book-and-claim” accounting framework for tracking and transferring the greenhouse gas benefits of climate-smart agriculture (CSA) practices through the biofuels supply chain.

The comments were filed in response to USDA’s request for information (RFI) on procedures for quantifying, reporting, and verifying the GHG benefits of CSA practices. The RFI is expected to inform the U.S. Treasury’s upcoming proposed rule for implementation of the Inflation Reduction Act’s clean fuel production credit, otherwise known as the “45Z credit.”

“Clean fuel tax credits established under the Inflation Reduction Act of 2022 provide an unprecedented opportunity to position U.S. agriculture and crop-derived biofuels as immediate solutions for reducing emissions and combatting climate change,” RFA President and CEO Geoff Cooper said. “But in order to capture this extraordinary decarbonization opportunity, regulators must allow for flexible supply chain management approaches. Our goal is to maximize CSA adoption and minimize market disruptions.”

According to RFA’s comments, “Decoupling CSA attributes from the physical feedstock and allowing the renewable fuel producer to use book-and-claim accounting would encourage widespread adoption of CSA practices by growers and broad incorporation of CSA emissions improvements into biofuel lifecycle carbon intensity values. At the same time, book-and-claim accounting will allow the grain market to continue operating rationally and efficiently for all participants.”

The benefits of adopting a book-and-claim system for CSA are many, according to RFA. Such an approach:
    Allows farmers who are not in close physical proximity to ethanol, SAF, or other biofuel facilities to be rewarded for adopting CSA practices;
    Allows the grain market to continue operating rationally and efficiently by facilitating the flow of grain to natural buyers based on location, logistics and other market factors; and
    Allows farmers and producers of ethanol, SAF, and other biofuels to better manage market and weather risk.

RFA also encouraged USDA to analyze and quantify a much broader range of “unbundled” CSA practices, rather than relying on the one-size-fits-all approach taken to CSA under the 40B sustainable aviation fuel tax credit.



ACE Urges USDA to Rely on its Established Expertise and GREET for Climate-Smart Agriculture Credits

Thursday, American Coalition for Ethanol (ACE) CEO Brian Jennings submitted feedback to the U.S. Department of Agriculture (USDA) request for information on procedures for quantifying, reporting and verifying the effect of climate-smart farming practices on the greenhouse gas (GHG) emissions associated with U.S.-grown biofuel feedstock crops.
 
“We strongly support USDA requesting information which can lay the foundation for policies to bring economic benefits to rural and farm communities while also combating climate change, and we are grateful to Secretary Vilsack for his leadership in working to create opportunities for biofuel policies to reward biofuel producers and farmers for so-called climate-smart agriculture (CSA) practices,” Jennings stated in the comments.
 
ACE’s comments begin by documenting the progress ACE has been making to monetize CSA practices and ensure corn ethanol is part of the climate solution through its USDA-funded Regional Conservation Partnership Program (RCPP) projects, followed by responding to five topical areas addressed in the request for information, with an emphasis on not re-inventing the wheel in developing procedures for quantifying GHG reductions from biofuel feedstocks.
 
Selected priorities from ACE’s overall comments are summarized below:
     USDA and other federal agencies should rely on the Department of Energy’s Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model to quantify emissions and greenhouse gas (GHG) credits associated with the production of agricultural commodities used as biofuel feedstocks. While no model can fully replicate real-world activities, GREET is considered the global gold standard and represents the best available science.

    GHG credit values for climate-smart agriculture (CSA) practices should routinely be updated by incorporating the best available science and results from real-world activities such as the two USDA-Natural Resource Conservation Service (NRCS) Regional Conservation Partnership Programs (RCPPs) currently being led by ACE. These projects are specifically designed to address the perceived need for more empirical data on the GHG benefits of CSA practices and help improve the accuracy of the GREET model.

    USDA has a long track record of stewarding federal taxpayer funds for commodity and conservation programs, ensuring that participating farmers meet necessary requirements to receive federal funds. If existing USDA protocols are sufficient for verifying distribution of billions of taxpayer dollars for commodity and conservation programs, USDA protocols are equally sufficient for verifying the same practices for federal tax incentives such as 45Z. The Treasury Department should rely on existing USDA assets in the reporting and verification for the 45Z tax credit, and we encourage USDA to directly engage Treasury with respect to its expertise and experience in this area.
 
ACE additionally submitted soil organic carbon studies and a carbon intensity calculator tool to further expand upon and demonstrate points made in the comments.