Tag: Agribusiness

Bill Increases Ag Promotion Funds

U.S. legislators are trying to help farmers keep an edge in the global marketplace.

This week, Iowa Senator Joni Ernst along with Senators King, Donnely, and Collins introduced bipartisan legislation increasing the funding for the USDA export promotion programs.

The Cultivating Revitalization by Expanding American Agricultural Trade and Exports (CREAATE) Act aims to revitalize the export promotion programs, which it claims have added $28 for every dollar invested in the last 40 years.

It specifically would help the Market Access Program (MAP) and Foreign Market Development (FMD) Program by doubling their funding over five years.

Senator Ernst says Iowa is a prime example of a state that relies on exports and one in five jobs here are tied to trade.

She says the bill promotes Iowa’s agriculture and will be effective in selling Iowan goods, “We just need to continue that, we really need to push that and right now we see that American farmers and ranchers are struggling with low commodity prices. So we do think that this will help us maintain those programs it will help us strengthen our trade relationships around the world.”

Ernst is hopeful the bill will get passed.

The Iowa Corn Growers applaud the bill saying funding for export promotion programs have not kept pace with inflation, marketplace growth, or investments by competing countries.

They estimate the MAP funding will go from $200 million to $400 million a year and the FMD Program will increase from $34.5 million to $69 million dollars a year.

Taiwan Buys $2 Billion In Iowa Grain

In the last ten years there have been many visits between Taiwan and Iowa on the topic of trade.

In a signing ceremony on September 15, Taiwanese delegates committed to buying Iowa corn and soybeans. The letter of intent signed says Taiwan will buy 5 million metric tons (200 million bushels) of corn and half a million metric tons of Distillers Dried Grains and Solubles between 2018 and 2019, worth combined $1.05 billion.

The country will also buy intends to purchase between 2.6 and 2.9 million metric tons (96 to 107 million bushels) of soybeans between 2018 and 2019. That value is estimated to be from $1.1 billion and $1.2 billion.

Iowa Lieutenant Governor Adam Gregg was at the signing ceremony. He says the deal outlines an important part of Iowa agriculture profitability: trade.

Gregg says, "We cannot consume all the corn and beans produced in this state and so it's important that we have markets all across the country and all around the world for those products. So it's one way that Governor Reynolds and I can work to make sure that Iowa farmers have the opportunity for prosperity here in our state."

Iowa Congressman Steve King was a witness at the signing ceremony and has spent time in Taiwan promoting Iowan products. He says he spoke to the Taiwanese president and other top officials about Iowa corn and soybeans.

He adds on trips away from the U.S., there's a lot of work that goes into making relationships work, "Our Iowa agriculture organizations, they are the team. I'm the support guy for them. And they are constantly sending people over, communicating with the Taiwanese and they've built a good network to promote foreign trade. Our Iowa corn growers, our soybean association, and it goes on and that's also true for the Taiwanese team."

Farm Bill Before Thanksgiving

There are several meetings left on the Senate level before the Agriculture Committee will sit down to write the newest farm bill.

For the last several months, committee leaders have been visiting states in forums to find out what is needed. And on Capitol Hill, senate staff have already been working on some of the less controversial parts.

Iowa Senator Chuck Grassley expects a bill to get out of committee before Thanksgiving, "We're going to have a debate before the entire public, within the agriculture committee on this. And I think we have the capability of voting a bill out of committee 20 to 0."

Grassley says he doesn't think the senate agriculture committee will go over ag worker immigration policy in the farm bill. Something like that would have to be added on the floor of the Senate.

Livestock Haulers Request Waiver For New Rule

In December, a regulation for truck drivers goes into place called the Electronic Logging Devices (ELD) Rule. In it, truckers have to install an ELD, which costs from $200 to $1,000 to keep records of travel, the rule limits them to 11 hours of driving per day, after 10 hours off duty.

However, the National Pork Producers Council asked for a waiver to that law. They are worried about trucks hauling live cattle and pigs.

In a letter to the Department of Transportation they say, "Livestock haulers are not, and will not be prepared to meet the December 18, 2017 compliance date."

Michael Formica, with the NPPC says at the end of 11 hours of driving, a driver is required to pull over and wait ten hours. If a semi is carrying live hogs, that could pose an animal welfare problem.

Formica says these rules were not made for livestock truck drivers because it's such a small part of the industry, "We're not asking for a permanent exemption for this. We realize there's a reason to have these. We're just seeking more time and then the ability to work with the Department of Transportation. To develop rules that are geared for the livestock industry."

That would look at both safety for drivers as well as special rules for trucks carrying live animals.

Formica says they have spoken to the Department of Transportation and he is hopeful they have understood live animal driver's concerns.

Iowa Farm Bureau Sets New Year Policy

The 2017 Iowa Farm Bureau Federation (IFBF) Summer Policy Conference is all wrapped up and they have state policy goals set.

In four points for the state, IFBF wants to:
1. Improve the deer depredation program by improving awareness or making it more flexible, they also want to add deer to the DNR nuisance program.

2. Maintain federal deductibility while calculating Iowa tax liability, they want tax reform to protect federal tax deduction benefits.

3. Weed control by certifying all Conservation Reserve Program seed mixes as "noxious weed free."

4. County zoning boards to only include residence within the jurisdiction of the zoning ordinance.

In addition to state policy, Iowa farmers have set goals to send off to the federal level. Specifically focusing on updating Section 179 business expenses, making CRP rental rates fair, easing restrictions on CRP grasslands, and fixing emergency response reporting over manure air emissions.

Vietnam Resumes Distillers Dried Grains Imports

Vietnam is resuming imports of American distillers dried grains (DDGS).

Vietnam was the third largest market for DDGS before they suspended imports last year when they reportedly found quarantine pests in U.S. shipments. In 2016, the country bought nearly $230 million dollars worth of the grain.

DDGS are a co-product of ethanol production and are essentially concentrated grain. U.S. exports have increased in value to $2 billion dollars a year, nearly five times what it was ten years ago.

After the suspension, the USDA began technical discussions with Vietnam to allow exports to continue.

Trade Ambassador Robert Lighthizer welcomes the decision to reopen markets, saying it will help the efforts to balance trade relations.

USDA Secretary Sonny Perdue agrees, he says, “This is great news and I am pleased that the U.S. exporters will once again be able to ship DDGS to Vietnam, which is one of the fastest-growing global markets for U.S. agriculture.”

Transportation Infrastructure Hurt By Hurricane

David: Welcome to the Agribusiness Report, I'm David Geiger. With me is executive director for the Soy Transportation Coalition, Mike Steenhoek, Mike thanks so much for being here.

 

Mike: Always good to be with you.

 

David: Now, Mike, first thing I want to get off to is we have a hurricane that is down south, how is that affecting the infrastructure there?

 

Mike: Well, Hurricane Harvey has really imposed its fury on the Texas Gulf and the consequences are felt in a host of areas including our infrastructure. The Texas Gulf is very important to agriculture. It accounts for 24 percent of wheat exports and of course it's also important for other commodities that are grown in that area like cotton, like sorghum, to a lesser extent, corn and soybeans. When you look further to the east, that's really the launching point for U.S. corn and soybean exports. The Mississippi Gulf Region, which is the area near around New Orleans, that accounts for 60 percent of U.S. soybean exports, 59 percent of corn exports. So, thus far, Hurricane Harvey hasn't really significantly damaged that area."

 

David: Now, when we have big weather events like this that really damage transportation, it's not just delays, it's also infrastructure that we're dealing with. What are some of the long lasting impacts of this that you see?

 

Mike: Certainly, with a storm like this, with high winds it can really damage the actual export terminals themselves. You can have these large bins, storage bins, get punctured then all of a sudden moisture gets in and contaminates the crop. With storm surges, it can result in the need to dredge the shipping channel with prolonged rainfall, it can really wash out rail track, we've seen a lot of examples with that in Texas, Burlington, Northern Santa Fe, Union Pacific, Kansas City Southern, all of these railroads have reported significant damage to their networks, and certainly, prolonged rainfall can have an impact on rural roads and bridges. Having that kind of water levels, having that kind of current can really impair the structural integrity of some of these bridges. I think as we assess the damage from Hurricane Harvey, unfortunately, we're not going to like what we see.

 

David: Moving forward, what does storms like this, and ones we've had in the past, teach us about having fallbacks, ways to continue to transport things?

 

Mike: Well, a vivid example for us within the soybean and corn industry was Hurricane Katrina in 2005 and all of a sudden, you saw an event that happen in the New Orleans area have dramatic impact on the profitability of farmers in Iowa and other parts of the Midwest. And essentially the farmer delivers to the elevator, and the elevator in turn delivers to the export terminal in a very simplistic manner, and what occurred with Hurricane Katrina is because the elevators located in the Midwest couldn't move product out their back door due to their export terminals being down, they could not receive grain via their front door. And so what they did is they would drop the price they were offering to farmers. And so all of a sudden, farmer profitability was compromised not due to anything bad that they did, or not due to demand changing, but simply due to the fact that we had a choke point in our logistics system. So, it really is a lesson for farmers that we have to make sure that we care about our transportation system and we have to make sure that there's resiliency to it and redundancy to it so we can't put all of our eggs in one basket.

 

David: Definitely, Mike thank you so much for joining and speaking to me.

 

Mike: Always good to be with you. Thank you.

Agriculture Supports Tax Reform

There are only a few details on President Donald Trump's proposal for tax reform, although he did offer broad ideas this last week.

However, Secretary of Agriculture Sonny Perdue offered support to the agenda, "Just as he has done with excessive and costly regulations, President Trump has focused on the problem of onerous and burdensome taxes. Most agricultural operations are, in fact, small businesses."

He says the time and costs associated with just complying with the tax code are hard for agriculture.

Iowa Farm Bureau President Craig Hill agrees, he says there is an immediate need for general tax reform particularly is simplifying it.

Hill says, "We need tax reform that lowers rates in general but also improves the opportunity for people to take normal business deductions. For example, in agriculture, it might be an interest expense as a normal business deduction. Maintaining some of the accommodation for stepped up basis would be important for agriculture."

Hill and Perdue both add that the Estate Tax needs to be worked on because it makes it hard for farmers to pass their land off to the next generation.

Hurricane Hits Texas Agriculture

Hurricane Harvey hit Texas agriculture hard last week, cotton harvest was underway with bales called modules sitting in the field. The South Texas Cotton and Grain Association are estimating damages as high as $150 million.

That cost could go higher as the flood waters recede, one concern is fuel contamination or damage.

Texas Ag Commissioner Sid Miller says most of the corn was harvested before the storm, but farmers are going to take heavy losses.

He says, "Most of the corn was in the bins. Most of the rice, about 75 percent of the rice was harvested, but it's in the bins. We do have some bins that were damaged. We do have some cotton gins that were destroyed and some were damaged, so it's going to be a long time before we finish up. Think about it, it was a bumper crop, good crop, they had some money made in the crop, but until it gets ginned you don't get payed for it."

Miller says anyone who wants to help out farmers can go to the Texas Ag Department website. They have also set up a hay hotline to help get livestock producers hay, that number is 512-463-9360.

The USDA also announced they are ready to help.

Secretary of Agriculture Sonny Perdue tweeted, "Scenes from Harvey's fury. Texas hit hard, including ag community. These are strong folk, but USDA ready to help."

He posted a link to more information on the USDA website: https://www.usda.gov/media/press-releases/2017/08/25/usda-prepares-hurricane-harvey

RFS Proposal Comment Period Ends

The Renewable Fuel Standard proposal comment period ends today.

Iowa Renewable Fuel Executive Director Monte Shaw says he is happy about the corn ethanol requirements, but not pleased about the unmoved biodiesel and cut cellulosic levels. Numbers for ethanol are maintained at a 15 billion gallon cap for 2018. But the biodiesel number stayed the same at 2.1 billion gallons for 2019, below the industry request of 2.75 billion gallons.

Shaw says some of the reasons for lower numbers relied on an argument over what "supply" means in the law, which a circuit court has now ruled on.

When the proposal was released EPA Administrator Scot Pruitt said in a statement, “We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace."

Shaw thinks there's some bias in the rule and they want to remind the EPA on their role, "When going through the confirmation process, Administrator Pruitt promised to follow the letter of the RFS and the intent of congress when they passed the RFS. There's a whole bunch of quotes to that effect. And this rule falls short of that."

Shaw says, unchanged, this would be the first time RFS numbers have been drawn down by the EPA.