Ethanol

USDA Trade Team Returns from Malaysia with a Focus on These Key Ag Products

Fri, 16 Jan 2026 13:39:25 GMT

As a follow up to the Oct. 26, 2025, trade deal announced by President Donald Trump, the USDA trade team just returned from a recent Trade Reciprocity for U.S. Manufacturers and Producers (TRUMP) mission.

Luke Lindberg, USDA undersecretary for trade and foreign agricultural affairs, says there were good, productive meetings toward elevating the relationship between the U.S. and Malaysia, which ranks as the 26^th largest ag trade market.

“These TRUMP missions were one of the aspects of [Agriculture] Secretary [Brooke] Rollins’ and my three-point plan to really ramp up U.S. agricultural exports. So, the president’s done a tremendous job of negotiating these new agreements around the world, and our job is to get on the ground with farmers, with U.S. agribusinesses, and start to make deals happen,” Lindberg says. “The analogy I’ve been using is the president is opening the door, and it’s our job to drive a bus through it.”

The trip to Malaysia had a delegation of 16 agribusinesses and trade associations. In recent years, the biggest U.S. agricultural exports to Malaysia have been soybeans, dairy products, cotton, vegetables and nuts.

“The whole barnyard kind of came with us this time around, because one of the things that the U.S. trade representative’s team and we did with USDA and the White House was we actually got Malaysia to agree that the U.S. food system is safe, and that’s in the language of the agreement,” he says.

Of the specific categories he shared, there was progress on many fronts including:

Soybeans — In 2024, Malaysia imported almost 452 metric tons of U.S. soybeans. Lindberg says U.S. leaders met with the largest soy crush facility, and he sees opportunities for growth.
Dairy — In total for 2024, Malaysia imported $118 million in dairy products. “We’ve seen a tremendous increase in dairy access and opportunities there, 23% growth this past year for dairy,” Lindberg says.
Ethanol — “We had a great conversation around ethanol opportunities,” Lindberg says. “Malaysia is a regional distributor of fuels, and so working ethanol into the fuel supply chain that can really spread throughout the ASEAN region, a lot of good opportunities out there.”
Beef — “We visited a very successful restaurant group in Malaysia that’s been begging for U.S. beef for a long time,” Lindberg says. “They’ve actually invested in a beef processing plant in the United States to get their beef halal certified so that they’re ready to go for when the actual duties shift and the regulations come into full force.”

Lindberg says a key tenant of the trade deal is to reduce or eliminate all tariffs.

“A lot of our producer groups haven’t been able to compete on a level playing field in Malaysia in the past, and now they have that access and that opportunity,” he explains. “When our groups can compete on a level playing field, I think we win more often than we lose.”

Next steps include a Malaysian delegation visiting Washington, D.C., next week.

“We’re marching forward here with a great opportunity on the horizon. I think it’s progressing nicely,” Lindberg says. “These rapid-response missions are largely driven by building these kind of new opportunities that really didn’t exist yesterday and exist today. In the next couple months, we’ll see full implementation of the deal, and that’ll really be the access-opening opportunity for our producers.”

Looking ahead this year, Lindberg says the USDA trade team is “hyperfocused” on fixing the agricultural trade deficit. With 2026 agribusiness trade missions announced for Indonesia, Philippines, Turkey, Australia and New Zealand, Saudi Arabia, and Vietnam, he highlights time spent in Southeast Asia is a strategy to build trade in a region with growing GDP and positive consumption trends for U.S. agricultural goods.

“It’s going to be a dynamic year for U.S. trade,” Lindberg says. “I keep saying to folks: Trade agreements are great, but sales are the goal.”

Exclusive Op-Ed: American Farmers and Ranchers Win With U.K. Trade Deal

Fri, 09 May 2025 17:22:16 GMT

By Brooke L. Rollins, 33rd Secretary of Agriculture

President Trump has done it again. Yesterday’s historic trade deal with the United Kingdom, announced on the 80th anniversary of Victory Day for World War II, is a major victory for American producers, consumers, and, above all, American farmers and ranchers.

What became an imbalanced trade relationship between us and the U.K. did not develop by accident. Before yesterday’s deal, the weakened position of American farmers emerged through a combination of three factors:

The average tariff imposed on American agricultural producers by the U.K. has been 9.2% while our average tariff has been 5%.
The U.K. imposed other non-tariff barriers that limited American access to British markets such as limited quota limits, geographical indicators, irregular inspections, and arbitrary health, animal welfare, or environmental concerns not backed by science or data.
The previous administration did our farmers and ranchers no favors by refusing to institute a new deal with any country, including the U.K.

Yesterday’s announcement reverses course and gives American farmers a fair shot at competing in British markets, creating a $5 billion opportunity for new exports for U.S. stakeholders, including U.S. farmers, ranchers, and producers.

While our team finalizes the trade deal, we are working hard to eliminate U.K. tariffs from all agricultural products. The deal secures a decrease from 19% to 0% in the U.K.’s ethanol tariff, offering an opportunity for corn farmers in states such as Iowa and Nebraska to further expand this important, second-largest market for U.S. ethanol. British energy users will likewise benefit from additional homegrown biofuel produced here in the U.S. This week’s trade deal offers our corn and ethanol producers the opportunity to export $700 million in product to a market that was previously closed to them.

Cattle ranchers also have cause for celebration. Beef produced by American ranchers in states like Texas, Oklahoma, and Kansas is the best in the world, and British consumers will now have access to a product that is the envy of the world. This trade deal creates the opportunity for our cattle ranchers to export millions more, which will end up in the pockets of American ranchers who saw a global trade surplus in beef during President Trump’s first term crash to a deficit under the previous administration.

Our rice farmers in states such as Arkansas and Louisiana will also see increased production because of this deal. Consumers in the U.K., which does not grow rice, will now have access to nutritious rice grown in American fields, creating a market potential of $100 million with free access.

We at USDA will not let this moment pass without energetic promotion of our products to British markets. My team and I are traveling to the U.K. next week to share the bounty of American agriculture to a market that is now open to our products. The trade deal announced yesterday commits our two countries to work together to enhance agricultural market access, closes loopholes, and fast-tracks customs procedures for U.S. exports.

The U.K. is the sixth-largest economy in the world and the fourth-largest to which we export. This week’s trade deal is a momentous step forward in our relationship with the U.K. and for the American agricultural industry. During my trip next week, I will stand ready to collaborate with our counterparts in the U.K. and ensure British consumers know American farmers and ranchers are open for business.

Trump Announces Win for Beef and Ethanol Trade With UK

Thu, 08 May 2025 21:07:22 GMT

On Thursday, President Donald Trump and United Kingdom Prime Minister Keir Starmer announced a historic trade deal, providing American companies unprecedented access to the UK markets while bolstering U.S. national security.

“The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers,” Trump explains.

With the agreement, the UK will reduce or eliminate numerous non-tariff barriers that unfairly discriminate against American products.

This trade deal will significantly expand U.S. market access in the UK, creating a $5 billion opportunity for new exports for U.S. farmers, ranchers and producers. This includes more than $700 million in ethanol exports and $250 million in other agricultural products, such as beef.

.@POTUS’ historic deal with the UK is a HUGE WIN for American farmers & ranchers. 🚜🇺🇸

Here in the United States, we produce the SAFEST and most ABUNDANT food supply in the world! 🌍 This deal puts our great American Agricultural Producers FIRST! 💪 pic.twitter.com/XSMZnwxV3s
— Secretary Brooke Rollins (@SecRollins) May 8, 2025

Secretary of Agriculture Brooke Rollins was at the press conference and shared how important the deal is and what it means to American farmers and ranchers.

“This is going to exponentially increase our beef exports,” she says. “And to be very clear, American beef is the safest, the best quality, and the crown jewel of American agriculture for the world.”

According to the U.S. Meat Export Federation (USMEF), last year the U.S. exported a little under 2,000 mt of beef to the UK (1,970 mt, to be exact), valued at about $32 million.

“Since Brexit, U.S. beef has not had any duty-free access to the UK,” explains Joe Schuele, USMEF senior vice president of communications. “All U.S. beef exported to the U.K. is currently subject to a 12% tariff, plus an additional duty of about 2.5 British pounds per kilogram.”

USMEF President and CEO Dan Halstrom says USMEF is excited about the potential due to the agreement.

“From a tariff standpoint, the fact that they would be creating a zero-duty country specific spot for U.S. beef in the UK, this is definitely encouraging,” he says. “That being said, there’s still work to be done from our viewpoint, because there’s quite a few issues around non-tariff trade barriers that concern us into the EU and to the UK around market access and restrictions approvals.”

These include hormone usage, residues and restrictions around beef carcass acid rinses.

“So while we’re optimistic, we hope that these other non-tariff issues are taken into account as well,” Halstrom says.

When Trump was asked by a British reporter if he expects the UK to accept all American beef and chicken products, Trump responded with reference to the work being lead by Secretary of Health and Human Services Robert F. Kennedy Jr.

“Bobby Kennedy is doing a tremendous job,” Trump explains. “He’s heading toward your system with no chemical, no this, no that.”

The National Cattlemen’s Beef Association (NCBA) released its support of Trump’s agreement and the market access it provides beef.

“With this trade deal, President Trump has delivered a tremendous win for American family farmers and ranchers,” says NCBA President Buck Wehrbein, a Nebraska cattleman. “For years, American cattle producers have seen the United Kingdom as an ideal partner for trade. Between our countries’ shared history, culture and their desire for high-quality American beef, securing a trade agreement is a natural step forward. Thank you President Trump for fighting for American cattle producers.”

🚨 The National Cattlemen’s Beef Association @BeefUSA releases a statement praising the trade deal with the UK:

“Thank you President Trump for fighting for America’s cattle producers.” pic.twitter.com/iJcE2YBCL5
— Rapid Response 47 (@RapidResponse47) May 8, 2025

In a release , NCBA says it has spent years advocating for expanded trade with the UK. When the UK left the European Union in 2020, that opened the door to secure trade agreements with countries like the U.S. British and American cattle producers share similar values, and British consumers also enjoy American beef.

NCBA members have participated in several meetings both domestically and abroad with senior British government officials to educate them on our production practices and the unique attributes of our product. NCBA also recently met with current British Ambassador Peter Mandelson.

Zero Ethanol Tariff

During the announcement, Trump officials indicated that tariffs on U.S. ethanol will be reduced to zero. According to the White House fact sheet , this covers $700 million worth of U.S. ethanol exports.

The National Corn Growers Association (NCGA) praised the trade agreement.

“This is great news,” says Illinois farmer and NCGA President Kenneth Hartman Jr. “We applaud President Trump and his administration for brokering this deal, and we encourage them to continue to include corn, corn ethanol and corn co-products in future bilateral agreements with other countries.”

NCGA had previously asked the Trump administration for increased ethanol access in the United Kingdom. The country is currently the second largest destination for U.S. ethanol exports, taking in 244 million gallons, which is 12.7% of the total U.S. ethanol exports for 2024. Ethanol exports to the UK have steadily increased since 2021.

“I think it’s a positive,” adds Arlan Suderman, chief commodities economist for StoneX Group. “Britain is not a big agricultural importer from the U.S. But what I think is significant is agriculture is included in it. And so there are some products that will benefit, but it starts the momentum going. And I look for other trade deals that come to also have agriculture. So I think that tells us more about where the Trump administration sees agriculture as playing a critical role.”

Optimistic About Possibilities for Pork

Halstrom says USMEF is excited about the potential for pork into the UK as well.

“They’re a large user of pork in the UK,” he explains. “They have large exports currently from the EU into the UK, and we know that there’s legitimate demand for U.S. pork into the UK as well as the EU.’

He admits pork has some of the same complicating factors regarding restrictions on the technical side.

“While no details are published on pork, yet, we’re hopeful pork is not only part of the agreement but the non-tarriff issues would be addressed as well,” he says.

Other Wins With U.S.-UK Trade Agreement

Other key points to the agreement, include:

It commits the countries to work together to enhance industrial and agricultural market access.
It closes loopholes and increases U.S. firms’ competitiveness in the UK’s procurement market.
It ensures streamlined customs procedures for U.S. exports.
It establishes high standard commitments in the areas of intellectual property, labor and environment.
It maximizes the competitiveness and secures the supply chain of U.S. aerospace manufacturers through preferential access to high-quality UK aerospace components.
It creates a secure supply chain for pharmaceutical products.

“The President’s trade strategy is working. We are working every day to increase American economic exceptionalism and that includes selling the bounty of American agriculture around the world,” says Secretary Rollins “I am traveling to the UK next week on my first foreign mission to meet with my counterparts and discuss the commitments of this deal. Our strong cultural and political ties between our countries have led to incredible economic prosperity. It is our goal to achieve even closer relations, and we are thankful for a deal that benefits both countries and gives American farmers, ranchers, foresters, and food processors better access to the UK market and the ability to compete for this business.”

Secretary Rollins will meet with senior UK government officials, visit facilities importing U.S. agricultural products, and hear from U.S. cooperators and UK importers on how the administration can best position U.S. agricultural products in the UK market.

Your Next Read: Rollins Says USDA Will Announce Application Process for $21 Billion in Disaster Aid Within Days

USDA's Rollins: 'Let's Go Barnstorm The World And Find New Partners' For Trade

Tue, 18 Feb 2025 18:48:49 GMT

On Brooke Rollins’ first full week on the job as Secretary of Agriculture, she addressed the 600 farmers, ranchers and industry leaders in Kansas City for the 2025 Top Producer Summit.

High on Rollins’ list of priorities was the topic of trade and President Donald Trump’s vision for U.S. agriculture moving forward.

While Rollins did not shy away from addressing the administration’s decision to implement trade tariffs, noting “farmer and rancher concerns are legitimate,” she focused on what she sees as her role ahead.

“My job is to ensure that as President Trump and our trade representatives are making their decisions that I am in the room and advocating on behalf of our people, on behalf of all of you,” she told Top Producer Summit attendees.

One of her key objectives, she says, is to find and expand market access for U.S. agricultural products domestically and abroad.

“Let’s go barnstorm the world, and let’s go find some more trade partners and access [to market opportunities],” she says.

Rollins says her goals for trade are a reflection of Trump’s vision and his determination to make agriculture part of the “golden age” he sees ahead for the U.S.

Trump is the consummate deal maker, Rollins notes, able to side-step bureaucracy and red tape in the process to work with world leaders.

“I don’t know that in the last 250 years, we’ve had anyone in office like President Trump,” she says. “He is a very unusual, remarkable and fearless man, and he wants to make a deal, and in the best way, and put America first.”

Agriculture Secretary Brooke Rollins spoke to a crowd of 600 farmers, ranchers and industry leaders at the 2025 Top Producer Summit.

(Jim Barcus)

Making Headway With Trade
Sen. Roger Marshall of Kansas, who moderated the conversation with Rollins, highlighted Trump’s work to build trade during his first term.

“He redid USMCA, and now that’s our largest ag partnership, with Mexico and Canada,” Marshall says. “He gave us South Korea and Japan, which has been so important to Kansas and our cattle industry, as well as trade 1.0 with China.”

Marshall then mentioned the headway he believes Trump and team have made with India.

“I see India replacing China as our major trade partner, as well that China is growing right now,” Marshall says. “I think there’s huge opportunities in India.”

U.S. ethanol, cotton and tree nuts are three of the top agricultural exports to India, a country that has in the past impeded agricultural trade with tariffs and non-tariff barriers alike. Trump called out the barriers to trade following recent conversations with India’s Prime Minster Modi.

A joint statement after the Trump-Modi meeting said Washington welcomed New Delhi’s recent steps to lower tariffs on select U.S. products and increase market access to U.S. farm products, while seeking to negotiate the initial segments of a trade deal by the fall of 2025.

Rollins says the progress underway with India was just one step forward to address what she described as a trade crisis for the U.S.

“Our exports are down $37 billion this year and likely to be down $42 billion in the months to come. This is a crisis, and this is something that I understand inherently,” Rollins says.

“We have a tremendous amount of work to do,” she adds. “But my promise to you is this, and my commitment will never waver, that every minute of every day for the next four years, I will do everything within my power with hopefully God’s hand on all of us and our work to ensure that we are not just entering the golden age for America, as my boss, President Trump, likes to say, but that we are entering the golden age for agriculture.”

Secretary Rollins joined Chip Flory on AgriTalk. Listen to their discussion about trade policy and tariffs; avian flu; and disaster and economic aid.

Your next read: Senate Overwhelmingly Confirms Brooke Rollins as 33rd Secretary of Agriculture

RFK Jr. and Zeldin Comment on How They Would Implement Trump Policy

Thu, 30 Jan 2025 22:46:07 GMT

Robert F. Kennedy Jr.'s confirmation hearing for Secretary of Health and Human Services (HHS) on Wednesday (Jan. 29) before the Senate Finance Committee lasted over three hours, revealing key points:

Vaccine stance: Kennedy attempted to soften his past anti-vaccine rhetoric, stating support for vaccines but struggling to explain previous controversial statements.
Health policy priorities: He emphasized addressing chronic diseases, promoting safe food, removing conflicts of interest in health agencies, and using “gold-standard science.” Kennedy said that federal dollars spent on SNAP and school lunch programs could be one place to start, “helping kids” avoid obesity and chronic illness by cutting out sugary drinks and “ultra-processed foods.” He would also fund federal research into the link between food additives and chronic illnesses, though he didn’t specify which ingredients sparked the most concern. “I don’t want to take food away from anybody,” Kennedy said.
Kennedy emphasized his support for American farmers, stating:
- “American farms are the bedrock of our culture, of our politics, [and] of our national security.”
- He was a “4-H kid” and spent summers working on ranches.
- He wants to work with farmers and food producers to remove burdensome regulations and unleash American ingenuity.
Agricultural practices and health. Kennedy expressed concerns about current agricultural practices:
- He criticized the use of certain chemicals in farming, stating they destroy soil microbiomes and cause erosion.
- He linked chemical-intensive agriculture to health problems, mentioning clusters of cancers, autoimmune diseases, and obesity in farming communities.
- He called for incentivizing transitions to regenerative agriculture and less chemically intensive practices.Kennedy told Sen. Roger Marshall (R-Kan.) that farmers are affected by cancers and autoimmune illnesses that he believes are caused by ingredients like food dyes. “We need to fix our food supply,” Kennedy said, noting that “seeds and chemicals” used by U.S. farmers are “destroying our soil” in the long term. When asked about Kennedy’s “seeds and chemicals” comment, Grassley told Politico: “I’ll have someone from Iowa State University talk to him.”
Collaboration with USDA. Kennedy emphasized his intention to work closely with the Department of Agriculture:
- He stated that MAHA (Make America Healthy Again) “simply cannot succeed without a partnership a full Partnership of American farmers.”
- He committed to working collaboratively with USDA and other federal agencies before implementing policies affecting food supplies.
- Kennedy mentioned that President Trump instructed him to work with Brooke Rollins at USDA to ensure policies support farmers. Rollins told reporters last week that she was supportive of Kennedy’s “Make America Healthy Again” movement. “But what is important and, if confirmed, what my role will be, will be to strike a balance between defending our farmers and our ranchers but also working with Bobby Kennedy, who I adore, to effectuate the president’s vision on all of the above,” Rollins said
Regulatory approach. Kennedy outlined his approach to agricultural regulations:
- He promised to work with farmers to remove burdensome regulations.
- Kennedy acknowledged the “very thin margins” farmers operate on and stated he doesn’t want any farmer to leave their farm for economic or regulatory reasons.
- He agreed that agricultural practice regulations should primarily be left to USDA and EPA.
- “I expect you to leave agricultural practice and regulation to the proper agencies,” Sen. Chuck Grassley (R-Iowa) told Kennedy. That means, for the most part, leaving policies that impact farmers to USDA and EPA, Grassley clarified.
Future of agriculture. Kennedy shared his vision for the future of American agriculture:
- He called for fixing the food supply as a top priority. Sen. James Lankford (R-Okla.) told Kennedy that he was happy the nominee addressed the “social media rumors” about agriculture.
- “You made it very very clear you’re not going to tell Americans what to eat, but you do want Americans to know what they’re eating,” Lankford said, calling that a “pretty fair perspective” on food policy.
- Kennedy advocated for supporting the transition to regenerative and sustainable farming practices.
- He mentioned plans to rewrite regulations to give smaller operators “a break.”
- Throughout the hearing, Kennedy attempted to position himself as an ally to farmers while also advocating for changes in agricultural practices to address health and environmental concerns.
Controversial past: Democrats challenged his history of health misinformation and grasp of Medicare and Medicaid.
Republican support: Some GOP senators backed Kennedy, with Sen. Ron Johnson (R-Wis.) calling him “awesome,” though the final vote remains uncertain.
Financial concerns: His financial ties to lawsuits against Merck raised conflict-of-interest questions.
Abortion stance: Kennedy sidestepped direct answers but aligned with Trump’s anti-abortion policies, shifting from his previous pro-choice stance.

Bottom line: With strong opposition and divided support, Kennedy’s confirmation vote is expected to be closely contested. Today he attends another confirmation hearing before the Senate Health, Education, Labor, and Pensions Committee. The Senate Finance Committee expects to hold its RFK Jr. vote next week.

Zeldin Confirmed as EPA Administrator

On Wednesday (Jan. 29), the Republican-led Senate confirmed former Congressman Lee Zeldin as the new administrator of the Environmental Protection Agency (EPA) in a 56-42 vote. A staunch Trump ally, Zeldin is expected to steer the agency in alignment with the former president’s environmental policies.

Vote breakdown: All 53 Republicans backed Zeldin, joined by three Democrats — Sens. Ruben Gallego (Ariz.), Mark Kelly (Ariz.), and John Fetterman (Pa.).
Policy direction: Zeldin is expected to roll back environmental regulations, emphasizing economic growth and private-sector collaboration.
Biofuel policy. Zeldin has raised concerns among ethanol and biofuel advocates due to his past opposition to the Renewable Fuel Standard (RFS) and ethanol. However, during his confirmation process, Zeldin made some commitments that suggest a potential shift in his stance. As a congressman, Zeldin had a history of opposing biofuels and the RFS. He signed letters expressing concern about proposed RFS volume increases, citing issues with the “E10 blend wall.” In 2017, Zeldin cosponsored an unsuccessful bill to repeal the RFS. He raised concerns about the validity and practicality of higher ethanol blends like E15 and E85. But during his confirmation process, Zeldin made several statements that indicate a potential change in his approach:
- He committed to giving producers and the industry certainty in the marketplace regarding Renewable Volume Obligations (RVOs).
- Zeldin acknowledged the importance of the RFS issue to President Trump and certain senators.
- He stated that no person or industry has any special influence over his decision-making, addressing concerns about his past connections to the oil industry.
Biofuel industry representatives have expressed cautious optimism:
- The Renewable Fuels Association (RFA) looks forward to working with Zeldin on keeping the RFS on track and addressing other priorities like E15 availability.
- The Iowa Renewable Fuels Association (IRFA) encouraged Zeldin to pursue the role biofuels can play in U.S. energy dominance.
- The American Coalition for Ethanol (ACE) appreciated Zeldin’s commitments to follow the law regarding RVO rulemakings and supporting year-round E15 nationwide.

Of note: While Zeldin’s past positions raised initial concerns, his recent statements during the confirmation process suggest he may be open to working with the biofuels industry in his new role as EPA Administrator.

Climate stance: Critics warn his leadership could weaken climate initiatives, favoring fossil fuel interests.
Reactions: Republicans praise his “common-sense regulation” approach, while environmental groups call his confirmation a serious setback for public health and environmental justice.

Bottom line. As Zeldin assumes leadership, his tenure is likely to reshape the EPA’s role in U.S. environmental policy for years to come.

Cassidy Casts Doubt on RFK Jr.’s HHS Nomination

Senate HELP Committee Chair Bill Cassidy (R-La.) delivered a blunt message to Robert F. Kennedy Jr. during Thursday’s hearing, signaling serious concerns about his nomination for Health and Human Services (HHS) secretary.

“I’ve been struggling with your nomination,” Cassidy stated in his closing remarks, a potential roadblock for Kennedy, given Cassidy’s influential position on the Senate Finance Committee. If Cassidy votes against Kennedy in the panel’s decision, the nomination may not advance.

The Louisiana senator expressed deep skepticism about Kennedy’s stance on vaccines, questioning whether he could be trusted to uphold sound public health policy. Cassidy specifically criticized Kennedy’s history of vaccine skepticism, warning that such views could erode trust in essential immunizations.

“A worthy movement, called MAHA, to improve the health of Americans?” Cassidy asked. “Or will it undermine it, always asking for more evidence and never accepting the evidence that is there?”

He also recounted a recent case of two children dying in a Baton Rouge ICU from vaccine-preventable diseases. “My concern is that if there’s any false note, any undermining of a mama’s trust in vaccines, another person will die from a vaccine-preventable disease,” Cassidy warned.

Beyond his own reservations, Cassidy’s remarks signal broader challenges for Kennedy’s nomination. Senate Minority Leader Mitch McConnell (R-Ky.), a childhood polio survivor, is unlikely to back a nominee with anti-vaccine ties. Sens. Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska) also remain key votes to watch, with both urging Kennedy to support vaccinations.

Cassidy, up for re-election in 2026, has already drawn a Trump-aligned challenger, State Treasurer John Fleming. Though Cassidy emphasized his desire for Trump’s policies to succeed, he warned that anti-vaccine rhetoric could tarnish Trump’s legacy.

“I want President Trump’s policies to succeed,” Cassidy said. “But if there’s someone that is not vaccinated because of policies, of attitudes we bring to the department, and there’s another 18-year-old who dies of a vaccine-preventable disease… The greatest tragedy will be her death. I can also tell you an associated tragedy will be that it will cast a shadow over President Trump’s legacy, which I want to be the absolute best legacy.”

Bottom line: With Cassidy’s support in doubt and broader Senate skepticism, Kennedy’s path to confirmation remains steep.

Key Takeaways from Brooke Rollins' Confirmation Hearing for Agriculture Secretary

Thu, 23 Jan 2025 17:19:54 GMT

Brooke Rollins, President Trump’s nominee for Agriculture Secretary , addressed several issues during her confirmation hearing on Jan. 23 in an attempt to position herself as a supporter of diverse agricultural interests and commit to protecting producers.

In her opening statement, Rollins outlined several key priorities for USDA if confirmed, as is expected:

Rapid deployment of disaster and economic assistance authorized by Congress.
Addressing current animal disease outbreaks.
Modernizing and realigning USDA.
Ensuring long-term prosperity for rural communities.

Ethanol and Renewable Fuel Standard (RFS)

Rollins clarified her stance on ethanol and RFS, distancing herself from past positions of the Texas Public Policy Foundation:

She stated the Foundation’s position on ethanol/RFS was written a decade ago and was one of 900 to 1,000 papers produced annually.
Rollins emphasized she did not author those papers.
While admitting to being a defender of fossil fuels, she insisted she would be “a secretary for all of agriculture” and a “champion for all fuels.”

When asked again on biofuel policy, Rollins said, “Everyone knows where the president is on this.”

The regulatory effort under the first Trump administration to make sales of E15 available year-round, Rollins noted, was not developed by the domestic policy office that she headed but she still said she looked forward to working on the issue ahead. She also committed to working with Treasury secretary-designate Scott Bessent on the 45Z Clean Fuels Production Credit. And she will make sure Bessent has the “data and the voices around him to make the right decisions.”

Tariff Impact Aid for Farmers

During questioning, Committee Chairman John Boozman (R-Ark.) asked Rollins about her approach to working with President Trump’s trade agenda. Rollins responded that she would prioritize working with the White House to address any challenges farmers and ranchers might face under potential tariff implementations.

Rollins committed to supporting farmers in case of tariff-related harm:

She pledged to undertake efforts like the Market Facilitation Program (MFP) via payments from the first Trump administration. MFP was part of a broader effort by USDA to assist farmers impacted by retaliatory tariffs and trade disruptions.
Rollins has consulted with former USDA Secretary Sonny Perdue about the implementation of such programs.

On trade, Rollins committed to using USDA programs and policies to bring the trade deficit in agriculture down to zero. But Sen. Michael Bennet (D-Colo.) countered that things like a stronger dollar and other factors were bigger components of the agriculture trade deficit rather than a failure of USDA policy.

Proposition 12

Rollins committed to working with Sen. Joni Ernst (R-Iowa) and others on addressing Prop 12 as it is affecting several states.

Commitment to Agriculture and Public Service

Rollins emphasized her dedication to the agricultural sector.

“My role is to defend, honor and elevate our entire ag community in the oval office ... to ensure that every decision made has that front of mind,” she states.

Rollins shared a personal detail about her family. She revealed her mother was the oldest freshman in the Texas legislature, highlighting her family’s history of public service.

Bottom line: These statements demonstrate Rollins’ attempt to position herself as a supporter of diverse agricultural interests, including both traditional and renewable fuels, while also showing her commitment to protecting farmers from potential trade-related challenges.

Your Next Read: Trump Taps Texas Native Brooke Rollins for Secretary of Agriculture

Continuing Resolution Includes $31 Billion in Aid for Producers

Wed, 18 Dec 2024 16:12:05 GMT

Farm groups and farm-state lawmakers had to first sell Congress on the need for substantial aid via the Continuing Resolution (CR) , now congressional leaders must sell others to pass it.

While the measure still needs to pass both the House and Senate, the stopgap deal to avoid a government shutdown includes $10 billion in direct payments for farmers, $21 bllion in ag disaster aid, a one-year extension of the 2018 farm bill and year-round E15.

Passage of CR Now in Question

Congress actually passing the stopgap spending measure is far from a done deal. Washington insiders were confident Wednesday morning Congress would pass the measure with bipartisan support, but strong opposition from the incoming Trump administration later in the day on Wednesday is now throwing that into question.

A statement from President Donald J. Trump and Vice President-Elect JD Vance:

The most foolish and inept thing ever done by Congressional Republicans was allowing our country to hit the debt ceiling in 2025. It was a mistake and is now something that must be addressed.…
— JD Vance (@JDVance) December 18, 2024

President-elect Donald Trump has asked to keep certain measures House Speaker Mike Johnson (R-La.) supports in the continuing resolution (CR), like aid for farmers and natural disaster survivors, but also demanded the House ditch items that Democrats negotiated.

Trump has also requested that Republicans extend the suspension of the debt ceiling, a limit on how much the U.S. government can borrow, which is set to expire early in his new term next year.

Johnson’s legislative strategy has sparked significant discontent among Republicans, casting doubt on his ability to retain the gavel in the next Congress. On Tuesday, Johnson introduced a sprawling bill to extend federal funding until March 14, allocating $110.4 billion for natural disaster relief ($21 billion in ag disaster funding) and incorporating a range of unrelated policy provisions. Late-stage negotiations added $10 billion in aid for farmers, opening the floodgates to additional Democratic demands, including the transfer of RFK Stadium to D.C., a congressional pay raise, health plan regulations, and funds to rebuild Baltimore’s Francis Scott Key Bridge.

The concessions enraged GOP lawmakers across the party’s ideological spectrum, with members voicing concerns about Johnson’s leadership. Rep. Thomas Massie (R-Ky.) has already pledged not to support Johnson in future leadership elections, and private discussions among Republicans suggest Johnson may face insurmountable opposition come Jan. 3. The Freedom Caucus and moderates alike criticized his handling of the bill, while high-profile figures like Elon Musk, now a Trump adviser, lambasted the legislation as “criminal.”

Sen. John Cornyn (R-Texas) warned of potential Senate resistance, labeling the bill a “cramnibus.” Johnson defended the compromise as a necessary measure under a divided government, framing it as a preparatory step for Republicans to advance Trump’s “America First” agenda in the next Congress. However, with a slim three-seat majority and growing fractures within the party, Johnson’s future as speaker hangs in the balance.

Breaking Down the Proposed CR

While the fate of the stopgap spending measure is now in question, if passed, the funding would last through March 14 for fiscal year 2025 that began Oct. 1.

Highlights of the bill that will impact agriculture includes:

One-year extension of the 2018 Farm Bill, including provisions that don’t have “baseline,” or cost money to extend. Negotiators found $143 million in unspent agricultural funds to rescind to offset those extensions. GOP leaders said they would push to consider a new bill the first quarter of 2025.
$10 billion in farmer financial aid along the lines of a bill introduced by Rep. Trent Kelly (R-Miss.).
$21 billion in ag disaster aid for farmers and ranchers as part of an overall $100.4 billion disaster package. The measure sets aside $2 billion of the disaster aid specifically for livestock producers, with much of the rest available via block grants to states and territories and direct aid to farmers and ranchers. It includes $3 million specifically for regular testing of procedures in place for inspections of molasses imports at the Canadian border, a provision sought by U.S. sugar producers.
Year-round E15, including other biofuel provisions detailed below.
SNAP provision. Language extending authorization of a program that replenishes stolen Supplemental Nutrition Assistance Program (SNAP/food stamp) benefits, which Democrats said would prevent a $1.5 billion cut to those benefits.

Disaster Aid

The disaster crop loss program will likely operate similarly to the 2021 program without any of the 2022 quirks that made it into a debacle. The livestock program will likely operate similar to the 2022 livestock program where the Biden administration actually managed to get it right. The economic aid program is very similar to Kelly farm act with a factor applied to keep it within budget.

Direct Payments to Farmers

Paul Neiffer’s analysis of the $10 billion in financial aid included in the CR calculates what the possible payments could be, including $43 per acre for corn, $30 for soybeans, $31.80 for wheat, $85 for cotton and $70 for long-grain rice.

Possible payment calculations

(Paul Neiffer )

When will payments be received by farmers? Economic aid will come 90 days after enactment. As for ag disaster, the push is on to use the 2020 approach where most payments came out of USDA’s Kansas City office.

Here are the key details and the differences from the original FARM Act:

The same 8 crops are specifically identified (corn, wheat, soybeans, cotton, rice, peanuts, oats and barley).
You will be paid on total 2024 planted acres by crop plus 50% of prevent planted acres by crop.

How Ag Financial Aid Will be Determined

The calculation uses national avg payment yield for PLC. Regarding the legislative language on the minimum payment rate calculation for economic assistance, we previously used 8% of the reference price multiplied by the national average yield. The legislative calculation uses the national average payment yield for PLC instead.
The payment limit is lowered from $175,000 to $125,000 and if your Farm AGI exceeds 75% of total AGI, then this is doubled to $250,000. Definition of AGI remains the same and this limit is per entity/ per person. This means an LLC has one payment no matter the number of owners. AGI is based on a three-year average of 2020-2022 tax years.

Here is a table of Neiffer’s estimated per acre payment amounts based on his knowledge of the provisions:

Year-Round E15

CR package includes nationwide year-round sales of 15% ethanol gasoline (E15) and offers short-term biofuel blending relief to small refiners.

Previously, E15 was restricted during summer months, though eight Midwestern states had already been granted year-round sales earlier this year. The inclusion of the E15 language, based on a bill by Sen. Deb Fischer (R-Neb.), marks a major win for ethanol producers and farm state lawmakers who have spent years lobbying to permanently allow year-round E15 sales.

The bill would also provide short-term relief to some small refiners under the Renewable Fuel Standard (RFS) that retired renewable identification numbers (RINs) in 2016-18 in cases when their requests for “hardship” waivers remained pending for years. The bill would return some of those RINs to the small refiners and make them eligible for compliance in future years.

Enacting the stopgap funding bill would also make it unnecessary for eight states to follow through with a costly gasoline blendstock reformulation — set to begin as early as next summer — they had requested to retain year-round E15 sales in the midcontinent. Oil industry groups last month petitioned EPA to delay the fuel reformulation until after the 2025 summer driving season, citing concerns about inadequate fuel supply and the prospects that a legislative fix would make required infrastructure changes unnecessary.

Ethanol Groups React

Ethanol groups say the E15 legislative change could pave the way for retailers to more widely offer the high-ethanol fuel blend, which is currently available at 3,400 retail stations and last summer was about 10-30¢/USG cheaper than 10% ethanol gasoline (E10).

Offering the fuel year-round would be “an early Christmas present to American drivers,” ethanol industry group Growth Energy chief executive Emily Skor said.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said biofuels “champions” are fighting for the provision allowing the sale of E15 year-around. “We have been working to get a year-round E15 solution for over 10 years,” he said in a statement. “It would be monumental for ethanol demand to support rural farmers and would save drivers 10 to 20 cents at the pump.”

Calculating What It Means for Corn Demand

The potential increase in ethanol consumption and corn use due to year-round E15 sales is relatively modest based on the available information. The additional ethanol consumption from year-round E15 sales is estimated to be approximately 15 million gallons. This represents a small fraction of the total U.S. ethanol production. The 15-million-gallon increase in ethanol consumption would translate to an additional corn use of about 5.6 million bushels. It’s important to note that the impact of year-round E15 sales is limited by several factors:

Distribution network: E15 has a small distribution network, available at only a fraction of gas stations.
Consumer adoption: The shift to E15 may be gradual and dependent on factors such as price differentials and consumer awareness.
Seasonal demand: While year-round sales are now permitted, demand may still fluctuate seasonally.

Looking ahead, maintaining current corn use levels for ethanol (around 5.5 billion bushels) would require increasing the national average ethanol blend rate to 15-17% by 2042, given projected declines in gasoline consumption. This suggests that year-round E15 sales alone may not be sufficient to significantly boost corn use for ethanol in the long term. However, others note the quickest way to get consumer attention is with price and E15 is the cheapest option for most cars… in many markets it’s cheap enough that consumers seek it out. Also, some think it’s not even a question for new facilities to include E15 … it’s the easiest way to be competitive in a market. Either way, year-round E15 sales represent a symbolic victory for corn ethanol advocates, the immediate impact on ethanol consumption and corn use is expected to be minimal in the short run, but differences of opinion are in place regarding long-term impacts.

A bewildering assessment of the year-round E15 impact came from some traders, based on a Reuters article.

The concern expressed by traders regards a potential shift in demand from biodiesel to ethanol due to year-round E15 sales. That is a questionable conclusion. Consider:

Separate products with different applications. Ethanol and biodiesel are distinct biofuels with different uses and markets: Ethanol is primarily blended with gasoline for use in standard gasoline engines. Biodiesel is typically blended with petroleum diesel for use in diesel engines. This fundamental difference makes a direct substitution between the two unlikely in most applications.
Potential market impacts. While the products aren’t directly interchangeable, there are some potential indirect effects to consider:
- Fuel blending choices: Refiners and fuel blenders might adjust their overall biofuel strategy, potentially favoring increased ethanol blending if E15 becomes more widely available year-round.
- Feedstock competition: Both ethanol (from corn) and biodiesel (often from soybean oil) compete for agricultural resources. Increased demand for corn-based ethanol could impact crop planting decisions and prices.
- Policy uncertainty: The combination of year-round E15 approval and the upcoming change in administration adds complexity to the biofuels policy landscape, which could affect investment decisions in both ethanol and biodiesel sectors.
- Market reaction may be premature. The sharp drop in soybean oil prices mentioned in the Reuters story likely reflects short-term market uncertainty rather than a definitive shift in demand. Several factors suggest this reaction may be overblown:
  - Infrastructure limitations: Widespread adoption of E15 will take time due to the need for compatible fuel pumps and consumer education.
  - Separate mandates: The RFS has separate volume requirements for different biofuel categories, including biodiesel.
  - Diesel market stability: Demand for biodiesel is also driven by the diesel fuel market, which has different dynamics than the gasoline market.

Additional Details From the Bill

Democrats celebrated inclusion of priorities like funding for childcare and 9/11 survivors’ health care benefits; restrictions on China-related investments; legislation intended to crack down on publication of artificial intelligence-generated “deepfakes,” and on “junk” fees charged for hotel stays and concert tickets; new safety standards for lithium-ion batteries; and more.

Taxpayers would recoup some of the bridge rebuilding cost through proceeds from insurance and litigation payouts by the owner of the cargo ship Dali, which crashed into the bridge in March.

Also included is $25.6 million for residential security and protection of Supreme Court justices.

Negotiators also agreed to a 100% federal cost-share for Francis Scott Key Bridge reconstruction in Baltimore, a key demand of the Maryland delegation — who elsewhere in the bill had to accept language paving the way for a new Washington Commanders stadium on the old Robert F. Kennedy Memorial Stadium, while transferring a D.C. National Guard fighter squadron to Maryland.

Appropriators threw in an unrequested $300 million for fisheries disaster aid, which Sen. Lisa Murkowski (R-Alaska) and others sought.

The deal omits language that Democrats were seeking to unfreeze $20 billion in IRS enforcement funding.

What’s Next?

House Speaker Mike Johnson (R-La.) is expected to turn to Democrats to supply the bulk of votes needed to get the bill to the Senate. It appears lawmakers would have at least a day to review the package. It looks like Johnson will bring the CR up under suspension of the rules, which requires a two-thirds majority for passage.

A floor vote has yet to be scheduled, but the initial assessment is that the House will take it up as early as Thursday or more likely on Friday. That leaves the Senate little time to clear the measure before Friday’s midnight deadline. But even if the final action does not occur Friday, there is wiggle room on the weekend to get it done.

House Ag Panel Says Ag Economic Aid in Current CR Would Improve Ending Cash Position by 20% By End of 2025

The following is a quick fact sheet released by the House Ag Committee on the economic assistance that is provided in the current Continuing Resolution (CR), modeled off of Rept. Trent Kelly’s (R-Miss.) FARM Act (HR 10045). There is a background portion, a list of eligible commodities, a payment formula, administrative provisions, and estimated payment rates.

House Ag panel staffers say keep in mind that the payment rates in this document are estimates and “almost certain to change slightly once implemented. These rates are the best approximation based on the data cited in text. This does incorporate the minimum payment rate provision. You’ll see that those crops receiving payments via the minimum payment provision have an asterisk.”

The House Ag panel had the Agricultural and Food Policy Center at Texas A&M analyze the impact of the economic assistance provided through this provision. Their findings suggest that the funds will improve ending cash position on their Representative Farm system by nearly 20% by the end of 2025.

Additional Analysis on Potential Aid for Producers

The following is what Combest-Sell and crew put out about the ag financial aid and disaster aid:

Crop Loss Assistance

For crop loss disaster assistance for the 2023 and 2024 calendar years, the measure makes provision for nearly $21 billion.

The language is pretty wide open with slight refinements of prior years’ disaster bills. There are some carve-outs including: $2 billion of the total amount is provided for livestock losses in 2023 or 2024 due to drought, wildfires, or floods; block grant authority to compensate producers with timber losses, citrus, pecan, and poultry losses (including poultry infrastructure losses); and a special provision for agricultural producers who suffered losses due to Mexico’s failure to adhere to its water rights treaty with the U.S.

For the bulk of the disaster program, the eligible causes of loss are the same as those under the 2022 program, including losses of revenue, quality or production losses of crops (including milk, on-farm stored commodities, crops prevented from planting, and harvested adulterated wine grapes), trees, bushes, and vines, as a consequence of droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, freeze, including a polar vortex, smoke exposure, and excessive moisture occurring in 2023 and 2024.

Please note that while the 2022 statute was used again as base text (and it used 2020 which used 2019, etc.), that is not an endorsement of the badly flawed implementation used by the Vilsack USDA. We would say that the disaster program from 2020 and 2021 is more of the standard bearer to think back to.

Losses are to be covered under terms and conditions determined by the Secretary but subject to previous requirements that: (1) smoke tainted wine grapes due to wildfires are covered; (2) losses due to drought are eligible if in a county with a D2 drought for 8 consecutive weeks or D3 drought or higher at any time during the calendar year but excessive heat as a cause of loss can cover lesser drought if it meets STC parameters; (3) sugar beet and sugar cane disaster be implemented through processors that elect to deliver aid to their producers; (4) not more than 1 percent of funds may be used for implementation; (5) payment limitations required under previous ERP programs apply (i.e., $125,000 per entity, or $250,000 if not less than 75% of AGI is derived from farming); (5) higher pay limits for specialty crops and high valued crops under previous ERP programs apply (i.e., $125,000 per entity, or $900,000 if not less than 75% of AGI is derived from farming) (Note: there is *no* AGI means testing for disaster aid; the portion of AGI derived from agriculture is just used as a measure to determine eligibility for the higher pay limit)] ; (6) prescribed pay limits are separate for each of the 2023 and 2024 calendar years; (7) payments under the program plus crop insurance and/or NAP (less premiums or fees paid) cannot exceed 90% of the loss; and (8) the same future crop insurance purchase requirements under previous ERP programs apply. In addition, to the extent that any factor must be applied to stay within budget, one single factor must be applied to the eligible benefit of each producer (i.e., no progressive factor).

No gender or race-based components are expected to be applied either in light of the federal court’s injunction.

The Secretary may use $30 million to provide equitable relief for specialty crop A&O for 2022 and 2023 reinsurance years.

The Secretary shall use $3 million to test product coming into the country under the molasses tariff line to ensure that it is molasses.

USDA is required to report to Appropriations Committees on progress of implementation within 120 days of enactment and quarterly until all payments are made. We will be pushing with the new Administration at USDA to get the FSA back on track with a quick and clear implementation that treats a loss as a loss regardless of the gender or race of the producer. Federal courts will also be ensuring this.

Economic Loss Assistance

For economic loss assistance for the 2024 crop year, the measure provides $10 billion in relief.

The program is not as robust as the Rep. Trent Kelly (R-MISS.) bill (the “FARM Act”) that was introduced this fall and spread in popularity like wildfire. But it is still generous, and we hope that when coupled with disaster relief it will go a long way in helping producers until Congress reauthorizes a new Farm Bill next year with a strong, meaningful safety net.

The measure uses the Kelly model, with a 26% factor to keep overall costs within budget, and another factor (8% of reference price) that creates minimums that improve the payment rates for certain crops (barley, rice, peanuts, minor crops).

Eligible commodities are commodities eligible for a marketing loan, except wool, mohair, and honey.

Under the program, if the Secretary determines that the expected gross return per acre for an eligible commodity is less than the expected cost of production per acre for that eligible commodity, the Secretary shall make a 1-time economic assistance payment to each producer of that commodity within 90 days of enactment of the supplemental.

The expected gross return per acre for an eligible commodity is equal to the following:

For wheat, corn, grain sorghum, barley, oats, cotton, rice, and soybeans, [the projected average farm price for the commodity for the 2024–2025 marketing year contained in the most recent World Agricultural Supply and Demand Estimates published before the date of enactment of the Supplemental by the World Agricultural Outlook Board] X [the national average harvested yield per acre for the commodity for the most recent 10 crop years, as determined by the Secretary].

For other loan eligible commodities, a comparable estimate of gross returns, as determined by the Secretary.

The expected cost of production per acre for an eligible commodity is equal to—

For wheat, corn, grain sorghum, barley, oats, cotton, rice, and soybeans, the total costs listed for the 2024 crop year with respect to the commodity contained in the most recent data product entitled “national average cost-of-production forecasts for major U.S. field crops” published by the Economic Research Service.

For other loan eligible commodities, a comparable total estimated cost-of-production, as determined by the Secretary.

The amount of an economic assistance payment to a producer for a commodity is equal to [the economic loss for the commodity] X [the eligible acres of the commodity on the farm] X [26%].

The economic loss for a commodity is equal to the difference between the expected cost of production per acre for the commodity and the expected gross return per acre for the commodity.

Eligible acres of a commodity on a farm is equal to the sum of the acreage planted on the farm to the commodity for harvest, grazing, haying, silage, or other similar purposes for the 2024 crop year and an amount equal to 50% of the acreage on the farm that was prevented from being planted during the 2024 crop year to the commodity because of drought, flood, or other natural disaster, or other condition beyond the control of the producers on the farm, as determined by the Secretary.

The Secretary shall consider acreage planted to include any land devoted to planted acres for accepted skip-row planting patterns, as determined by the Secretary.

In determining the payment rate for a crop for which there is no sufficient available data, the Secretary shall use the data related to a similarly situated crop to establish a comparable rate.

In no case shall the amount of an economic assistance payment to a producer for an eligible commodity be equal to less than [8% of the PLC/ARC reference price for the commodity] X [the national average payment yield for the eligible commodity] X [the number of eligible acres for the commodity].

As for pay limits and means tests, the total amount of payments received, directly or indirectly, by a person or legal entity (except a joint venture or general partnership) under this section may not exceed —

(A) $125,000, if less than 75% of the average gross income of the person or legal entity for the 2020, 2021, and 2022 tax years is derived from farming, ranching, or silviculture activities; and
(B) $250,000, if not less than 75% of the average gross income of the person or legal entity for the 2020, 2021, and 2022 tax years is derived from farming, ranching, or silviculture activities.

Please note the “average” is different from “adjusted.” Recall the scenario where a farmer grosses $1 million on the farm but had expenses that exceeded this, so his AGI (adjusted gross income) was negative. He or his wife also had a job teaching history and science at the local school creating a situation where his non-farm income was more than 75% of his AGI and he was therefore not eligible for the higher limit to address the losses. Using “average” gross is meant to correct that problem.

The pay limits for economic assistance are separate from the pay limits for crop loss assistance described above. And, just like the crop loss portions, this economic assistance is not subject to the AGI means test to determine eligibility that traditional farm bill benefits are subject to.

We are sure that you have seen estimated payment rates floated in various publications. These are certainly within the range, but it is important to note that final numbers have not yet been determined.

Beyond Crop Loss/Economic Assistance

Besides the aforementioned economic and disaster aid, the CR/Supplemental also includes other priorities for agriculture, including year-round E15.

The package also extends the current authorities in the farm bill for one year; makes investments in the FFAR research program; provides scholarships to 1890 universities; and addresses problems with fraudulent skimming of food stamp benefits from EBT cards.

Ag Sector Could Score Big in Stopgap Spending

Tue, 17 Dec 2024 19:53:55 GMT

The House of Representatives released its Continuing Resolution (CR) text today, which includes:

A one-year extension of the 2018 farm bill
Around $10 billion in farmer economic aid
$21 billion in ag disaster funding for 2023 and 2024, which is part of the $100.4 billion to help the hurricane-stricken Southeast
Year-round E15 sales, which is a major victory for the corn and ethanol industries

The plan will offer credits to small refiners that petitioned for exemptions from the Renewable Fuel Standard (RFS) mandates (2016 to 2018 compliance years) but were denied or had pending petitions as of Dec. 1, 2022. The RFS requires refiners to blend biofuels such as ethanol into gasoline or purchase compliance credits.

The provision would override a previous U.S. government decision allowing year-round E15 sales only in eight Midwestern states (set to begin in 2025).

Extension of Orphan Programs in 2018 Farm Bill
There also appears to be an extension of orphan programs in the 2018 farm bill extension and a permanent 1890s scholarship program. The icing on the cake is a four-year extension of SNAP fraud via the skimming reimbursement language.

Orphan programs are ones that were authorized in the 2018 farm bill but did not have funding beyond a specified year. The extension provides $177 million of new mandatory funding for programs that did not have a budget baseline. This ensures these programs can continue to operate during the extension period.

The 1890s scholarship program provides scholarships for students attending 1890 land-grant universities, which are historically Black colleges and universities that were established under the Second Morrill Act of 1890.

The SNAP Fraud Reimbursement extension is the continuation of reimbursements for stolen Supplemental Nutrition Assistance Program (SNAP) benefits. This provision protects SNAP recipients from losses due to benefit theft via card skimming, cloning and other similar methods. States will continue to be required to replace stolen benefits under this measure.

One source said, “Good policy would be emphasizing the need for states to transition to more secure measures for SNAP recipients, including stronger identity verification practices.”

Of Note
Senate Ag Chairwoman Debbie Stabenow (D-Mich.) did not get her wish to move conservation/climate funding into a one-year extension of the 2018 farm bill. That discussion will occur next year.

Economic Aid and Disaster Funding
Disaster aid for crop losses due to natural disasters for 2023 and 2024 will total $21 billion.

The discussions for economic aid centered on a $10 billion package to help farmers cope with price declines and rising input costs. House Agriculture Chairman GT Thompson (R-Pa.) indicated that $10 billion is the minimum he would accept. He mentioned Republican support for reallocating conservation program funds from the 2022 legislation into the farm bill baseline, but that Republicans are disputing the “guardrails” that require funds to support “climate-smart” projects.

Thompson also noted concerns that some critics want to ensure President-elect Donald Trump would have access to funds to compensate farmers for potential retaliation stemming from new Trump import tariffs.

Year-Round E-15
Year-round sales of E15 ethanol has been a long-standing goal for corn growers and ethanol producers, particularly in states such as Iowa, Illinois and Minnesota where a significant portion of corn production goes into ethanol.

Currently, E15 is available at more than 3,200 gas stations in the U.S., indicating room for growth (there are more than 196,000 fuel stations in the U.S.). About 95% of model year 2024 vehicles are explicitly approved for E15 use by manufacturers.

The actual increase in ethanol usage would likely be gradual as E15 adoption expands. While the theoretical maximum ethanol usage through year-round E15 sales could reach 20,586 million gallons annually, the actual increase would depend on factors such as consumer adoption and infrastructure development — separate fuel handling and storage for E15.

Now What?
A vote in the House won’t happen until at least Thursday night if House Speaker Mike Johnson (R-La.) sticks to his plan to honor the rule giving members 72 hours to review the bill.

Other House Happenings
House Democrats removed Rep. David Scott (D-Ga.) as their senior Agriculture Committee leader after he received just 5 votes in Monday’s influential steering panel vote. Rep. Angie Craig (D-Minn.) emerged as the frontrunner with 34 votes, while Rep. Jim Costa (D-Calif.) trailed with 22 votes. Craig now heads into Tuesday’s full caucus vote, seeking additional support. Craig plans to rally House colleagues for the final vote. Meanwhile, Costa vowed to keep pushing and will try to supplant Craig in the full caucus. Lawmakers had anticipated Scott’s ouster amid growing skepticism of his leadership — Scott has dropped out of the race.

Craig indicated part of her pitch to the panel was that there are no other Ranking Members for Democrats from the U.S. Midwest.

“There’s not a single ranking member from the middle of the country right now, and that was certainly part of my pitch to my colleagues, is that if we want to represent this whole country, then we need ranking members and leaders in the Democratic Party who are from the whole country,” she stated.

Craig came into Congress in 2019 while Costa and Scott were elected in the early 2000s.

GOP Eyes Strategic Appointment to Boost House Majority
Republicans may have found a way to temporarily expand their narrow House majority: appointing a Democrat to the Trump administration. Rep. Jared Moskowitz (D-Fla.) is reportedly being considered to lead the Federal Emergency Management Agency (FEMA) next year. The move would leave Democrats short a vote for weeks, bolster the GOP’s edge, and possibly help Republicans flip Moskowitz’s seat. Moskowitz, who previously served as Florida’s emergency management director under Gov. Ron DeSantis, could gain significant recognition if he pursues a 2026 gubernatorial bid. While his office and House Democratic leadership declined to comment, the appointment’s political ramifications are being closely watched ahead of Monday’s internal party elections.

Take our Poll: Do you think Congress should pass emergency relief for farmers in the CR? You can voice your opinion in our AgWeb poll.

4 Items EPA Discussed this Week that Will Impact Producers

Thu, 20 Apr 2023 18:36:19 GMT

Michael Regan, EPA administrator, appeared before the House Ag Committee on Wednesday to discuss everything from WOTUS to the farm bill. Here are the highlights that will directly impact producers:

1. Year-Round E15

EPA is not yet ready to issue an emergency declaration to allow E15 fuel to be sold during the summer months as they did in 2022. While Regan said that many of the conditions are still in place that prompted the 2022 emergency waiver, he said EPA staff has not yet brought him enough evidence to issue an emergency waiver.

He cautioned that administrative moves by the Trump administration to allow year-round E15 sales did not survive court challenges. But he said no options are off the table as of yet and that EPA was continuing to work with the Department of Energy and others on the situation.

2. Biodiesel Blending Levels

Proposed 2023, 2024 and 2025 Renewable Fuel Standard volumes for biomass-based diesel and advanced volumes do not match the industry’s current production. Regan explained:

“Let me just say that in 2022 we set the highest volumes ever in EPA’s history. So we’re proud of that and what we plan to do is continue that trajectory. As you know we proposed a rule and we’re in that proposal phase and there aren’t too many things that I can comment during this time of comment but what I can say is that 2023, 2024, and 2025 will continue that positive trajectory.”

According to Regan, his team is taking comments from industry stakeholders and have been offered “a lot” of data that Regan believes will be “reflected in the final rule.”

3. The Future of Biofuels

Rep. David Scott (D-Ga.), asked Regan the role he sees biofuels playing in the future. Last week, EPA announced emission standards for new cars. That announcement led to concerns from the biofuels industry and farmers in regard to the administration’s view on the role biofuels have been playing and can continue to play in reducing emissions and powering our cars and trucks.

Regan was asked what he would you say to our farmers and our domestic biofuels industry – the role he sees biofuels playing in the future. His response:

“Well, I think we see a significant role. It’s called walking and chewing gum at the same time. I think that when you look at the policies of this EPA, and the investments that we’re making in biofuels and advanced biofuels, just by the last RVO volumes we set and the ones we’re anticipating setting, and then the partnership that I have with Secretary Vilsack and Secretary Buttigieg as we look at the role of biofuels with aviation fuels, we see a tremendous market for biofuels that is complimentary to the EV fuels future. And so we think that we can do both – we see a balance here. And in both cases, we’re trying to follow the markets, follow technology, and follow the science as well.”

As for the recent EPA proposal which would tighten tailpipe emissions and force more electric vehicles (EVs) to be used, Regan said the plans do not work against biofuels. EPA is working to implement complimentary policies on that front. “We see a tremendous market for biofuels that is complementary to the EV fuels future,” he said.

4. Waters of the U.S. (WOTUS)

Rep. Don Bacon (R-Neb.) said the Waters of the U.S. (WOTUS) rule on wetlands protections and declared, “Any goodwill the administration has built with farmers and ranchers is gone.”

House Ag Chair G.T. Thompson (R-Pa.) mirrored Bacon’s comments.

“Historically, EPA has over-regulated the agriculture industry,” criticizing agency actions on pesticides, electric vehicles, and WOTUS.

The Supreme Court is expected to rule soon on an Idaho case that would restrict federally recognized wetlands to territory with a direct surface connection to a waterway.

Regan said the EPA issued its WOTUS rule last December in the face of “looming litigation” over not having a regulation. Courts have put on hold the recent Biden/EPA rule in 26 states.

Despite “enduring” 4.5 hours in the committee hearing, Regan shows promise in working more in favor of rural America, according to Thompson. He says Regan called him following the meeting to “emphasize how much he wants to do a better job” of working with the House Ag Committee.

Vilsack Focuses on Farm Bill Possibilities with National Sustainable Ag Coalition

Tue, 31 Jan 2023 20:27:48 GMT

USDA Secretary Tom Vilsack on Monday addressed the winter meeting of the NASC, telling members that USDA’s focus has been on developing sustainable food systems through areas like funding an organic transition program and helping farmers turn waste into biofuels.

Vilsack said USDA believes there are more options for farmers other than “get big or get out. There’s got to be a system in which the many and most have a fair shot.”

Read more: Ag Groups File Lawsuit to Challenge EPA’s “Vague” New WOTUS Definition

Vilsack noted the administration’s focus on a “true local regional food system” that he said would be more resilient and less susceptible to foreign conflicts, international trade and production in other countries. He specifically urged state leaders to get more involved.

“Why can’t they invest in value-added opportunities? What’s preventing them from encouraging ecosystem markets in their state? Why aren’t they investing in bio-based product manufacturing and creating opportunities for agricultural waste? How about using some of that money to support local and regional food systems? Maybe they can help with input costs,” Vilsack said.

Read more: Policy and Payments: What Producers Can Expect in 2023

He urged the NSAC members to focus their efforts on educating lawmakers and urged them to push lawmakers to keep expanded funding in place.

“There’s historic money invested in this and there are some people who want to take it away,” he stressed.

Tax Reform Losers From Biofuels to Coal to Get Second Chance

Thu, 22 Sep 2022 04:52:32 GMT

Energy lobbyists, who failed to get a range of expired breaks for biofuels to coal-fired power plants into the $1.5 trillion tax overhaul bill making its way through Congress, may get a second chance before the end of the year.

The Senate plans to act on a slate of expired tax credits before month’s end, according to John Thune, the Senate’s No. 3 ranking Republican who serves on the Finance Committee. Lobbyists have been told the package of “tax extenders” -- renewing tens of billions of dollars in expired tax incentives -- could be hitched to must-pass government funding legislation expected in coming weeks.

“I would say the discussion of the extenders package is a golden opportunity,” said Scott Segal, a Bracewell LLP lobbyist seeking tax credits for small wind projects, geothermal heat pumps, and fuel cells.

Representatives of the House and Senate tax writing committees didn’t respond to requests seeking comment on the timing.

In addition to the expiring benefits, the American Coalition for Clean Coal Electricity, which represents companies such as American Electric Power Co. and Peabody Energy Corp., is seeking a new tax credit for existing coal-fired power plants that would total $65 billion over 10 years.

“We think we have a good case to make,” said Paul Bailey, the group’s president. “We’ve had a lot of retirements and there is a lot of concern about reliability and grid resilience so we think that is a good reason to have a tax credit that would prevent some coal retirements.”

The proposal, which would allow nearly every U.S. coal plant to qualify, comes as the Federal Energy Regulatory Commission is also moving forward with a rule to help coal plants that would apply to about 40,000 megawatts of coal out of a fleet of about 260,000 megawatts, Bailey said.

Meanwhile, the nuclear industry, which is retiring plants in the face of competition from electricity sources such as cheap natural gas and renewable power, is also seeking a tax credit, said David Brown, senior vice president of federal affairs for Exelon Corp., the largest operator of nuclear plants in the U.S.

The 30 percent investment tax credit, which as envisioned would phase down over time and then become a 10 percent permanent tax credit, is estimated to cost $5 billion, Brown said.

Nuclear Credits

While the FERC proposal would also help nuclear plants, Brown said it wouldn’t become effective soon enough to help the nuclear fleet. The tax credit, he said, would be “a bridge until the markets can appropriately value the attributes that nuclear can bring to the table.”

A separate measure extending a production tax credit for nuclear power could also find a home in the Senate’s tax extenders bill. It’s been championed by Republican Senator Johnny Isakson, and could benefit Southern Co., which is building new nuclear reactors in his home state of Georgia.

Other tax credits sought for the package include the reinstatement and multiyear extension of a $1.01 a gallon tax credit for the production of cellulosic ethanol -- which, unlike traditional corn ethanol, is made from garbage, algae and corn stover -- and a $1 per gallon credit for biodiesel. Both of which have been championed by Iowa Republican Senator Chuck Grassley.

The legislation could also provide an opportunity to tweak language in the Senate’s tax reform bill that would stifle the tax equity market used as a key source of financing for the renewable energy industry and has caused the stock price of companies such as First Solar Inc and SunPower Corp. to slump. Grassley, who serves on the Finance Committee, sought to modify those provisions in the Senate bill so that tax equity from credits for wind and solar would be protected.

Oil companies, ethanol producers, labor unions and environmental groups are also working to persuade lawmakers to renew -- and expand -- a tax credit that rewards businesses for every ton of carbon dioxide they capture. Under current policy, the credit for that captured gas -- worth $10 or $20 per ton, depending on how it is stored -- runs out once 75 million tons worth of credits are used.

Supporters of that 45Q tax credit, as it is known, argue it helps encourage companies to clean up emissions from ethanol plants, refineries and power plants, while ensuring the oil industry has enough carbon dioxide to pump underground and boost crude extraction.

Other credits sought for the extenders bill include the ones for small wind projects, geothermal heat pumps, fuel cells and other energy sources, known as “orphans” because they were left out of 2015 omnibus spending legislation that extended credits for wind and solar.

“Most observers thought this issue was going to be taken care of a long time ago and should have been part of the 2015 compromise,” said Segal, the Bracewell lobbyist.

EPA Faces Lawsuit for Ethanol’s Impacts on Endangered Species

Fri, 22 Jul 2022 02:18:22 GMT

EPA officially issued an emergency waiver in May to allow year-round E15, offering Americans the opportunity to purchase ethanol during summer months for the first time since the renewable fuel standard’s inception under the Energy Policy Act in 2005.

Pump prices quickly dropped following the waiver, with gas currently selling for an average of $4.44 per gallon. However, some are concerned with the environmental impacts tied to increased ethanol production.

The Center for Biological Diversity (CBD) filed a lawsuit on Wednesday to “challenge the EPA’s fuel volume requirements for corn ethanol and other biofuels” for 2020, 2021 and 2022, according to CBD’s press release.

This lawsuit follows the EPA’s release of the 2022 blending requirements earlier this month, with roughly 15 billion gallons of corn ethanol and 5.63 billion gallons of advanced biofuels.

According to the lawsuit, CBD is challenging the EPA’s effort to “fully assess” the potential impacts increased corn production will have on endangered species, including:
1. Land conversion
2. Additional fertilizer use
3. Increased pesticide use

Brett Hartl, government affairs director at CBD, says the “ever-increasing” amounts of corn will be detrimental to oceans, water and endangered species.

“The renewable fuel program is a colossal boondoggle that gobbles up millions of acres of land. It’s a false solution to the climate crisis, delaying the urgent need to transition to electric vehicles,” he said. “The EPA should have ratcheted back the renewable fuel program instead of increasing the volumes of biofuels required to be produced.”

The Renewable Fuel Association (RFA) passed off the suit and comments, with Troy Bredenkamp, senior vice president for government and public affairs, sharing a rebuttal.

“It is not surprising that an organization with a long history of disdain for beneficial, ag-based biofuels, would base their attack on the RFS citing research that has been substantially discredited by numerous researchers including Department of Energy Argonne National Laboratory and Purdue University among others,” he said.

CBD maintains the root issue in corn grown for fuel is that the crop is subject to fewer restrictions on pesticides and fertilizers.

More on ethanol:
EPA Officially Announces the Sale of Year-Round E15
EPA Proposes New Rules on RFS, Finalizes Biofuel Blending Requirements
New E15 Pump Availability Marks a “Clear Path Forward” in Sales

Ethanol Outlooks Stable, Westhoff Says Export Demand Optimistic

Fri, 24 Sep 2021 14:50:10 GMT

University of Missouri Director and Howard Cowden Professor Patrick Westhoff joined AgriTalk host Chip Flory to share economic insights heading into the fall.

With crops in the Midwest transitioning from their vibrant, summer green to the long-awaited dull, harvest brown, Westhoff weighs in on what to expect in the markets following the crop season.

“Crop receipts for corn, soybeans, any number of other crops and even the livestock side as well is up sharply in 2021, offsetting that drop in payments and the increasing production costs this year,” says Westhoff.

Trade agreements, according to Westhoff, are in part to thank for current markets when comparing numbers from last week to a year ago.

“The number one difference is that we’ve got steadily higher imports from China projected now than they would have sent back then. That is a huge factor in the market. That’s why we’re talking about over $4 corn average prices for the next five years,” says Westhoff.

The ethanol boom seems to be nearing an end, but Westhoff says it shouldn’t be considered phased out just yet.

“We don’t show any big change in overall ethanol consumption in this country in the next decade. Even if electric cars expand, that’s not going to replace the fleet overnight,” says Westhoff. As long as we have continued use of 10% blends in at least some expansion of the higher-level blend markets, we think we could probably sustain something like current levels of domestic consumption for a number of years in the future of export demand, perhaps even a little bit more optimistic.”

Livestock outlooks are promising in Westhoff’s data. While he says decreasing cattle numbers over the next few years will mean a tighter supply-demand balance, pork tells a different story.

“We were surprised by how high hog prices have gone this year. It’s been a combination of strong demand from China, less supplies than we would have anticipated at these kinds of prices. Of course, higher feed costs have all come into play there. Looking forward, if we were to have a little more normal situation of the feed front, and if the growth in import and export demand is not as strong in 2022 as it’s been this past year, we could see some softening of higher prices in 2022,” says Westhoff.

Net farm income this year will reflect previous records, according to the University of Missouri Professor. However, he doesn’t predict they will stay that way.

“We’re looking at an annual number this year that’s almost at the 2013 record. Then falling off to about $100 billion dollars next year. In nominal terms that will leave the average farm income in the projection period a little bit above the recent average. But once you factor in inflation, it’s more comparable to want we’ve spent in the last five to seven years,” says Westhoff.

To hear more from Dr. Pat Westhoff, listen here.

Coalition Requests Hearing on the RFS’s Impact on Economy

Fri, 20 Nov 2020 05:34:33 GMT

In a letter to the Senate Environment and Public Works (EPW) Committee, a coalition of the U.S. livestock and poultry industry associations, including the National Cattlemen’s Beef Association , the American Meat Institute , the National Chicken Council , the National Meat Association , the National Pork Producers Council and the National Turkey Federation , requested a hearing to discuss the Renewable Fuel Standard’s (RFS) impact on the economy. The groups cited ongoing pressure on domestic feed grain supplies and a discovery of $9 million of fraudulent renewable identification numbers as justifications for a hearing.

“In light of the ongoing pressures that the RFS is placing on the domestic feed grain supplies, something must be done to protect livestock and poultry producers from excessively high corn prices because of the rigid RFS compliance system,” the groups told Committee Chair Barbara Boxer (D- Calif.) and Ranking Member James Inhofe (R-Okla.).

“Therefore, we request that the Senate hold a hearing to examine the continued pressure on grain supplies and the impact that it is having on the bottom line of livestock and poultry producers.”

The letter noted that a 2011 National Academy of Sciences study found that since 2007, the diversion of portions of the corn crop to ethanol production has been a contributing factor to the increased strain on livestock and poultry producers. While other factors play a role, the RFS mandate is the sole area the U.S. government can control, the groups said.

“Not only are the meat and poultry industries asking the Senate committee to make an attempt to understand the impact on farmers and ranchers, but we also are asking the committee to consider the impact on the American consumer,” the groups said. “The livestock and meat and poultry coalition thinks an EPW committee hearing to examine the continued merits and impact of this broad reaching policy would be timely and relevant.”

Biofuels Provisions Now Part of Tax Cut Plan

Fri, 20 Nov 2020 05:32:34 GMT

Biofuels backers probably have a little spring in their step today as provisions have now been tucked into the tax package worked out between President Obama and Republican congressional leaders which would extend ethanol and biodiesel incentives.

Here’s where things stand as the Senate launches into consideration of the package:

Ethanol: The volumetric ethanol excise tax credit (VEETC) or blenders’ credit, would also known as the blenders’ credit – will continue at its current level of 45 cents through Dec. 31, 2011. The tariff on imported ethanol will continue at its current level of 54 cents. The “Section 1603" grant program, a program from the 2009 economic stimulus law which allows companies to claim a grant instead of an existing investment tax credit, would be extended for a year. The VEETC and the import duty had been scheduled expire at the end of 2010. Biodiesel: The $1 per gallon biodiesel tax credit would be made retroactive to Jan. 1, 2010, and would continue through 2011. The plan would also continue the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2011 the $1.00 per gallon production tax credit for diesel fuel created from biomass. The biodiesel tax credit lapsed at the end of 2009 and lawmakers could not agree on a plan during 2010 to revive it. Alternative fuels credit. The bill would extend the $0.50 per gallon alternative fuel tax credit through 2011. The bill does not extend this credit any liquid fuel derived from a pulp or paper manufacturing process (i.e., black liquor).

And folks like the Renewable Fuels Association (RFA)are pretty happy this morning. “Continuing to invest in our domestic ethanol industry is a proven method to create jobs and spur innovation and economic opportunity all across America,” said RFA President and CEO Bob Dinneen. “While this legislation is not as long as we had hoped, it is a common sense approach that will ensure American ethanol production continues to evolve and new technologies commercialized. We urge Congress to move expeditiously to pass the legislation. Then, honest and good faith discussions about how we reform all energy tax policy -- including for all oil and ethanol technologies -- can occur.”

Meanwhile, House Democrats opted Thursday to vote as a caucus against the tax package that President Obama worked out with Republican congressional leaders. But House Speaker Nancy Pelosi (D-Calif.) signaled they would continue to work on the plan before it came up for a vote in the House.

“In the caucus Thursday, House Democrats supported a resolution to reject the Senate Republican tax provisions as currently written,” according to a statement released from Pelosi. “We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote.” One of the main provisions irking House Democrats are details of the estate tax plan in the package. The agreement included a setting the estate tax at 35% on estates beyond $5 million per person ($10 million per couple) for two years. Democrats say that’s too generous and want the provision scaled back to the marks that were in effect for 2009 -- a 45% rate on estates beyond $3.5 million per person ($7 million per couple). Should they be successful in getting the estate tax details changed, key will be whether Republicans would go along with any such shift. So next week looms large once again for the fate of the 2001 and 2003 tax cuts that were to expire at the end of this year. And now, biofuels incentives are part of the package as many had expected to be the eventual case.

EPA Slashes Cellulosic Ethanol Target

Fri, 20 Nov 2020 05:32:26 GMT

The Environmental Protection Agency has lowered the amount of renewable fuels from cellulose in the new Renewable Fuels Standard (RFS2) requirement for 2011 by a whopping 97%. The RFS2 requirement will require 13.95 billion gallons total, with 6.6 million gallons to come from cellulosic biofuel; the EPA’s original goal for cellulosic ethanol was 250 million gallons.

While the overall renewable fuel requirement mandated by the RFS2 remains the same, the 240 million gallon shortfall of cellulosic biofuels was simply added onto the 1.15 billion gallons of advanced biofuels in 2011. This sends a strong signal to obligated parties that they need to start building plants now if they want to meet the 2015 mandate of 5.5 billion gallons of total advanced, and 21 billion gallons in 2022.

Renewable Fuels Association President and CEO Bob Dinneen says EPA’s decision to reduce the mandate on cellulosic ethanol is a good move, “accurately reflecting the difficulties cellulosic biofuel technologies have encountered in obtaining the capital needed to fully commercialize.” However, he cautioned EPA must keep the cellulosic targets ambitious to stimulate advancement of the technology.

The RFA urges EPA to keep the overall RFS target at 13.95 billion gallons and allow other renewable fuels to make up the cellulosic biofuel shortfall in 2011.

November Elections Loom with Republicans Poised for Gains

Fri, 20 Nov 2020 05:32:07 GMT

Two weeks from today on Nov. 2, voters head to the polls in a midterm election with a backdrop of economic pain, job worries and a low level of approval for many politicians individually and politicians in general. How will this translate into the world we’ll see when Nov. 3 arrives? It could transform things significantly from their current status.

Current expectations are for Republicans to pick up the 39 seats they need to regain control of the House, with some political watchers putting those Republican gains in the neighborhood of 50 seats. Control of the Senate, however, may be a more-difficult task as the consensus now is centering on GOP gains of seven to nine seats.

And history is on the side of Republicans. The party in control of the White House has typically lost ground in mid-term elections. A sitting president’s party usually loses seats in a first mid-term election, with the most-recent exception being President George W. Bush in 2002, when the GOP picked up two seats and held steady in the House.

Since 1978, the incumbent party in the White House has lost seats in one if not both chambers. Going back further, since World War II, control of the U.S. House of Representatives has changed six times -- 1946, 1948, 1952, 1954, 1994, and 2006 -- and each time, the Senate has also shifted. Also, there are a number of Democratic lawmakers elected in either 2006 or 2008 that were in congressional districts that backed Sen. John McCain (R-Ariz.) for president.

How does agriculture figure into the mix? In the House, CQ Politics rates around 40 House races as “toss ups” at this stage. And nearly a quarter of those are members of the House Ag Committee. The 2008 election did see some members of the panel sent home, but this year could see a bigger shift on the panel.

Key impact with new members? Fewer and fewer lawmakers that have experience in work on a farm bill. While new omnibus farm legislation isn’t due to be completed until 2012, House Ag Committee Chairman Collin Peterson (D-Minn.) has pledged to push ahead for completion of a bill in 2011 as he believes the budget picture will be less favorable the longer a new bill waits. That means a major education effort to bring expected new lawmakers “up to speed” on the bill. But some are starting to suggest that even Peterson could be vulnerable as he seeks another term in office. If Republicans do retake the House, it would put Rep. Frank Lucas (R-Okla.) in charge of the committee. That may bring a slight change in focus for the panel, but he’s still expected by most to continue the reputation that ag policy is mostly a bipartisan issue.

In the Senate, the main race most in ag circles are concentrating on is that involving Senate Ag Committee Chair Blanche Lincoln (D-Ark.). She emerged from a tough primary campaign victorious after being forced into a runoff to secure the Democratic spot on the ballot. She has been shown to be consistently trailing her challenger Rep. John Boozman (R-Ark.).

If Lincoln loses, that puts the chairmanship of the panel at play, with the most likely lawmaker to gain the top Ag Committee spot would be Sen. Debbie Stabenow (D-Mich.). While down the seniority ladder, those above her are not expected to exit their current chair roles on other committees -- Senate Judiciary Committee Chairman Pat Leahy (D-Vt., who has headed the panel before), Senate Health, Education, Labor and Pensions Chairman Tom Harkin (D-Ia., who chaired the panel during the 2008 Farm Bill process), Senate Budget Committee Chairman Kent Conrad (D-N.D.) and Senate Finance Committee Chairman Max Baucus (D-Mont.). Other members of the panel seeking another term include Leahy, Sen. John Thune (R-S.D.), Chuck Grassley (R-Iowa) and Michael Bennet (D-Colo.). Bennet appears to be facing a strong challenge from Ken Buck (R), and is neck-and-neck in polls, while the others appear poised to return for another six years in the Senate. But even some expected to easily return to Washington aren’t taking many changes. Sen. Grassley’s campaign ads in Iowa have far outnumbered those of his opponent Roxanne Conlin (D).

With Republicans expected to make big gains in the Nov. elections, the focus will be on how they react if they indeed return to the majority in the House. If they dig in their heels and have a showdown with Democrats and little gets done, their time in the majority could be short-lived. But if they can find a way to put aside the partisan bickering that kept action minimal in the latter days of the current Congress, that could bode well for their party in 2012.

Lawmakers to EPA: You Have A Problem in Farm Country

Fri, 20 Nov 2020 05:32:00 GMT

If Thursday’s Senate Ag Committee hearing on EPA regulations was any indications, the agency has a major public relations campaign it needs to undertake in farm country. EPA Administrator Lisa Jackson was greeted with lawmaker charges of “regulations run amok” or the perception of regulations run amok in the U.S. ag community. And those complaints didn’t come just from Republicans -- Democrats were equally as critical of the agency’s regulatory bent.

Senate Ag Committee Chair Blanche Lincoln (D-Ark.) expressed disappointment to Jackson over “vague, overreaching and unnecessarily burdensome EPA regulation” on agriculture in her opening remarks. “Right now, at a time when every American feels anxious about his or her own economic future and the economic future of the country, our farmers, ranchers, and foresters are facing, as I count them, at least 10 new regulatory requirements,” Lincoln stated. “Each of which will add to their cost, making it harder for them to compete in a world that is marked by stiff and usually unfair competition. And most, if not all, of these regulations rely on dubious rationales and, as a consequence, will be of questionable benefit to the goal of conservation and environmental protection.”

Lincoln called on Jackson and EPA to use “common-sense goals, instead of using the command and control, top-down approach that this Administration has relied on thus far.” Further, she urged Jackson to “work together with the agriculture community to set these common-sense goals, instead of using the command and control, top-down approach that this Administration has relied on thus far.”

And Lincoln wasn’t alone. the panel’s ranking Republican Saxby Chambliss (R-Ga.) also raised regulatory concerns with the EPA chief, noting examples of the more than 20 different efforts underway at EPA that affect agriculture. “No one disputes the need or desire for clean air and water, bountiful habitat and healthy landscapes,” he noted. “But at some point, which I believe we are getting dangerously close to, regulatory burdens on farmers and ranchers will hinder rather than help them become better stewards of the land and more bountiful producers of food, fiber and fuel.”

Other lawmakers raised several specific examples of EPA regulations that are creating concern in farm country like rules or proposals on dust, spray drift and more, imploring Jackson and her agency to step back and really consider the impact of their decisions on agriculture.

For her part, Jackson sought to reassure lawmakers that her agency wasn’t “targeting” farmers with their regulatory plans, nor did she have an “agenda” she was pursuing. And each lawmaker concern was met with assurances from Jackson that EPA would work with the ag industry and farm-state lawmakers when it came to the various regulatory issues raised at the hearing.

Still, given the bipartisan concerns expressed during the hearing, it is clear that EPA has got a major perception problem in farm country -- one that will take action, not just promises, to help ease these concerns.

Another issue lawmakers focused on in the hearing is the still-awaited decision by EPA on whether to allow up to 15% ethanol (E15) in the nation’s fuel supply.

Jackson told lawmakers that the Dept. of Energy (DOE) was going to deliver results of engine tests to EPA by the end of this month and that EPA would then announce a decision on E15 being allowed in cars 2007 and newer within two weeks after receiving that data. As for 2001-2006 cars, Jackson informed the tests were still ongoing and that DOE was not expecting to deliver the results to EPA until the end of 2010. However, DOE Secretary Stephen Chu said at a separate Washington event that his agency would deliver the test results to EPA by the end of November.

But no matter which official is right, a decision on the “older” cars -- those made in 2001-2006 -- won’t be made until late-2010 or early 2011. And Jackson also said that there are no tests underway on vehicles older than 2001.

Company Makes Dry Cattle Feed Pellets From Ethanol Byproduct

Fri, 13 Nov 2020 02:18:42 GMT

A Nebraska company has found a way to make dry cattle feed pellets from an ethanol byproduct without adding any binding ingredients.

Platte Valley Distillers says it has secured the rights to a patented technique that will allow it to make feed pellets in Lexington that can be easily transported for possible export.

Ethanol plants routinely sell distillers grain as a livestock feed, but their market tends to be limited to the area near their plants because wet distillers grain can be costly to ship and the dry version of the feed tends to fall apart or spoil.

Tom Kruml is one of the co-owners of Platte Valley Distillers. He says the company can make distillers grain more dense, so it can be formed into a pellet or cube.

Specialized equipment will be used to press distillers grain into a cube and apply heat to form a protective outer layer. Kruml said the corn oil in the feed helps seal the cube.

In addition to making the feed pellets, the company will also sell the equipment to other firms that want to make the feed pellets.

The project recently an investment from CEI Capital Management in Maine that also promised to help the Nebraska operation secure tax credits. That investment will allow Platte Valley Distillers to get its plant running and hire about 12 people.

CEI Capital CEO Charlie Spies said this project will help the economy in rural western Nebraska and help make an innovative idea happen.

“Platte Valley Distillers is converting a byproduct into treasure for employees, its community, the agri-business industry, and ultimately, consumers who benefit with foodstuff having better nutritional value,” Spies said.

Global Feed Production to Contract in 2013

Fri, 13 Nov 2020 01:54:38 GMT

Next year for the first time ever, global feed production is expected to contract. Vice President Aidan Connolly of Alltech , an international animal health and nutrition company, presented the prediction to the Food and Agriculture Organization of the United Nations in mid-October.

Last year, the Lexington, Ky.-based company’s feed production survey showed China surpassed the United States as the world’s largest producer of feed. This year’s survey, which be released in late 2012 or early 2013, covers 130 countries and will show that global feed production grew this year.

For 2013, though, Connolly predicts a contraction of 3-5 percent.

“FAO’s concern is feeding the 1 billion people who don’t have enough food to eat,” Connolly said this week in an interview. “Our offices expect an overall reduction in consumption of food next year, which will have a direct impact on production of feed.”

A weak global economy is depressing protein consumption.

“It’s a function of meat, milk and egg consumption,” Connolly said.

The continued use of feedstocks and materials for biofuels will also cut into feed production next year. The European Union, United States and Brazil will continue to use a large portion of their feed crops for biofuels, and China and Russia are also considering converting feed into biofuels. The renewable fuel standard in the United States, which mandates that gasoline be blended with ethanol, is an ongoing concern to the feed industry.

“It has caused a lot of problems for feed prices in general,” Connolly said.

The feed industry, though, argues that byproducts of biofuel industries, such as distillers’ grains, make up for the loss of raw product.

Contaminated feed

The U.S. drought will play a significant role in next year’s reduced feed supply. Alltech also conducted a survey that looked at the level of 37 mycotoxins in 97 U.S. feed, grain and forage samples. Connolly said that mycotoxins will be a major issue for the U.S. feed industry for the next year.

The mycotoxin survey showed that 100% of the samples tested contained one or more mycotoxins. Fumonisins and DON-group mycotoxins were the predominant mycotoxins followed by the T-2 toxin group, zearalenone and silage mycotoxins. Nearly half, 48 percent, of the samples had two to five mycotoxins, while 44% had between six and 10.

At low levels, a single mycotoxin might not be a cause for concern where animal health and productivity are concerned. But if feed is contaminated with several mycotoxins, they can reduce productivity and compromise animal health.

The challenge for the world’s agricultural producers and food manufacturers in 2013 will be whether they can pass the additional cost of a reduced feed supply to consumers without severely reducing world demand for proteins.

“We are facing a completely new era for the agriculture industry, where for the first time in history, feed production for 2013 will be lower than for 2012, and it is clear that efficiency in converting feed into food will be more critical to food companies than ever,” Connolly said.

Beef Production Down; More Cattle, Just Less of Them

Fri, 13 Nov 2020 01:52:13 GMT

Small changes are made to the 2011 forecast of total red meat and poultry production. Beef production is reduced slightly. Although fed cattle slaughter is raised to reflect the large number of cattle placed in feedlots during the second quarter due to drought in the Southern Plains, second-half carcass weights have been reduced. The pork production forecast is lowered due to the expected short-term effect of recent hot, humid weather on third-quarter hog weights.

For the year, broiler production is unchanged from last month. Production in June was higher than expected which offsets a sharper expected decline in second-half production. Turkey production is raised as higher forecast turkey prices are expected to moderate the expected decline in second-half production. The egg production forecast is reduced slightly from last month.

For 2012, beef production is reduced due to slower carcass weight growth and slightly lower later year slaughter. Higher feed prices are expected to slow the pace of later year marketings as cattle are kept on forage longer. Pork production is lowered as tight feed supplies pressure hog weights. Broiler production is forecast lower as the stronger second-half production declines carry into the first part of 2012. Turkey production is expected to grow more slowly as higher feed prices partly offset higher turkey prices. Egg production is reduced from last month on higher feed prices.

Beef imports are forecast higher in 2011 as demand for processing meat remains relatively strong. Beef exports are raised for both 2011 and 2012. A favorable exchange rate is expected to support exports to a number of countries. Likewise, pork export forecasts are raised for both 2011 and 2012. A favorable exchange rate and relatively strong demand for pork in Asia are expected to boost exports. U.S. pork imports are reduced slightly in both years. No change is made to broiler exports for either 2011 or 2012 but turkey exports in 2011 are expected to be slightly stronger.

Cattle prices are forecast slightly lower for the third quarter but subsequent forecasts are unchanged.

Hog prices are forecast higher for both 2011 and 2012 as stronger export demand in both years support prices. Broiler prices are lowered in both 2011 and in the first part of 2012 as supplies remain relatively large.

The milk production forecast for 2011 is reduced. Although the July Cattle report indicated that producers are holding relatively large numbers of dairy replacement heifers which supports a higher forecast dairy herd, recent hot, humid weather and relatively high priced feed may constrain the growth in milk per cow.

Milk production is forecast higher for 2012, reflecting a larger herd in the first part of 2012 but slightly slower growth in milk per cow. Commercial exports for 2011 are forecast higher on the strength of butterfat exports. Imports are lowered reflecting lower imports of cheese and milk proteins.

Trade forecasts for 2012 are unchanged.

Cheese, butter, and whey prices are forecast higher for 2011, but nonfat dry milk (NDM) is forecast lower. Tighter milk supplies are expected to support higher product prices but softening international prices will likely weigh on U.S. NDM markets. The Class III price is raised, based on higher forecast cheese and whey prices, but lower forecast NDM prices will outweigh higher butter prices and the Class IV price forecast is reduced. For 2012, NDM prices are forecast lower on expected weaker early-year demand but cheese prices are forecast slightly higher. Forecast butter and whey prices are unchanged from last month. The Class III price is raised reflecting higher forecast cheese prices but lower NDM prices result in a reduced forecast for the Class IV price. The all milk price forecast is raised to $20.30 to $20.50 per cwt for 2011 and $17.80 to $18.80 per cwt for 2012.

U.S. Ag Registers Record Export Value for 2010

Fri, 13 Nov 2020 01:51:22 GMT

U.S. agriculture continues to pile up positive trade data, finishing calendar year 2010 with a record export value and continuing to build an impressive export surplus for fiscal year (FY) 2011 which started Oct. 1

According to trade data for December, USDA said exports for calendar 2010 were a record $115.809 billion, up from $98.453 billion registered in 2009 and the prior record of $114.8 billion in 2008. The value of imports for calendar 2010 at $81.856 billion resulted in a trade surplus of $33.953 billion. That is still behind, however, the surplus of $34.273 billion in 2008. For FY 2011, the $12.496 billion in exports for December pushed the FY-to-date export value to $37.308 billion, up from $30.163 billion tallied the same period in FY 2010. The trade surplus so far is at $16.250 billion, compared to just over $12 billion a year ago.

USDA Secretary Tom Vilsack also hailed the export tally for calendar year 2010, noting it showed the positive contribution the sector makes to the U.S. economy. “U.S. farmers and ranchers had a record-breaking export year, surpassing the previous high of $114.8 billion, set in calendar year 2008, by nearly $1 billion,” Vilsack said. “We saw a rise in both the value and volume of U.S. agricultural exports worldwide.”

In addition, Vilsack said the data show “demand for U.S. food and agricultural products is soaring worldwide. This is good news for all Americans in these trying economic times. Every $1 billion in agricultural exports supports 8,000 American jobs, which means agricultural exports supported nearly 1 million jobs in 2010.”

Lame Ducks Flock Back to Washington

Fri, 13 Nov 2020 01:50:41 GMT

Lame-duck lawmakers have returned to Washington, with a host of potential issues for them to consider in a session that will be split by Thanksgiving.

About the only known at this juncture is they will be in this week and exit Friday for a week-long break for Thanksgiving, aiming to return the week of Nov. 29. But beyond that, nothing is assured in terms of what they will -- or won’t --accomplish yet this calendar year.

Why the uncertainty? Because there are several issues they could either vote on or leave for the new Congress which is seated in January.

President Obama meets with congressional leaders from both parties Thursday to discuss one of the potential action issues -- the expiring 2001 and 2003 tax cuts. President Obama and White House officials have made it clear they won’t back a permanent extension of the tax cuts for the wealthiest Americans. They back extending the cuts for individuals making under $200,000 and couples under $250,000 and have signaled a willingness to discuss the breaks for those above those thresholds, but obviously not a permanent extension.

How the session Thursday unfolds could have a big say in what lawmakers will attempt to do before they exit in December.

Other items of interest to agriculture that could potentially be considered:

Biofuels: The biodiesel incentive program lapsed at the end of 2009 and lawmakers were unable during the course of 2010 to get it restarted (retroactive to Jan. 1, 2010). The ethanol production incentive (VEETC) and import tariff program are set to expire at the end of this year.

If lame ducks don’t take action to extend these items, it’s not clear how they might fare in the 112th Congress where Republican control of the House is expected to focus on spending and budget cuts. One factor that helped keep lawmakers from coming to terms with resurrecting the biodiesel credit was finding budget offsets.

Estate taxes: For 2010, there is no estate tax but it will spring back to life in 2011 with a $1 million per-person exemption and a 55% rate for estates beyond that mark. Many observers expect lame ducks will punt this one to the next Congress to hash out, unless they include it in a package of tax extenders that could be considered. The focus on this issue is centering around the levels that were in place for 2009 -- a $3.5 per-person exemption and 45% rate for estates beyond that mark.

Child nutrition: The House failed to act on the Senate-approved child nutrition reauthorization package before the existed Washington in October. The hold up there has been on how to pay for the extra spending in the bill. The Senate used $2.2 billion in cuts to the food stamp program in the future to pay for a portion of the extra spending. But some Democrats in the House balked at that approach.

EPA Clears E15 for 2007 & Newer Cars & Light Trucks

Fri, 13 Nov 2020 01:50:25 GMT

The initial step in getting more ethanol in the nation’s fuel supply was officially announced today, with the Environmental Protection Agency (EPA) announcing they are approving gasoline containing 15% ethanol (E15) for 2007 and newer cars and light trucks.

The “official” decision is that EPA has “waived a limitation on selling fuel that is more than 10% ethanol for model year 2007 and newer cars and light trucks. The waiver applies to fuel that contains up to 15% ethanol – known as E15 – and only to model year 2007 and newer cars and light trucks.” The decision announced today came after a review of the Department of Energy’s (DOE’s) “extensive testing and other available data on E15’s impact on engine durability and emissions,” EPA said in a release.

But there are still more ethanol decisions to come. EPA said that whether to allow E15 in model year 2001 to 2006 vehicles “will be made after EPA receives the results of additional DOE testing, which is expected to be completed in November.”

But one set of engines you won’t be able to use E15 in is those model year 2000 and older cars and light trucks. And, EPA has not approved (and said they wouldn’t approve this year) E15 for “any motorcycles, heavy-duty vehicles, or non-road engines.”

One of the biggest issues for this decision is whether consumers will put the right fuel in their vehicle. EPA said they are proposing E15 pump labeling requirements, including a requirement that the fuel industry specify the ethanol content of gasoline sold to retailers. There would also be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled.

So do you have to use E15? No, according to Gina McCarthy, EPA Assistant Administrator for Air and Radiation. “EPA is not requiring the use of E15,” McCarthy stressed. “EPA does not have the authority to require its use.” But the decision will allow use of E15 “where and when that is available.”

Approving E15 for 2007 and newer cars and light trucks “was an appropriate decision for the agency to make under our jurisdiction under the Clean Air Act,” McCarthy said.

Actions on biofuels in individual states is another reason why EPA moved ahead with today’s announcement, McCarthy said. “The federal government is not the only entity to make these decisions. One of the signals we’re trying to send is that while we made the waiver decision, others will need to be made at the individual state level.” Some states like Minnesota has set their own requirements relative to the percentage of ethanol allowed in the fuel supply.

What’s the reaction? Predictable in most cases.

USDA Secretary Tom Vilsack: “Today’s announcement from EPA is an important step toward making America more energy independent and creating much-needed jobs in rural America. The announcement will help get existing ethanol capacity into the market. Increasing the use of ethanol in automobiles and light trucks not only provides biomass and biofuel producers with additional revenue enhancing opportunities, it will help us reach the Obama Administration’s goal of increasing renewable fuels usage in the U.S. marketplace to 36 billion gallons by 2022. Today’s action by Administrator Jackson and the EPA provides assurance to farmers, ranchers and the renewable fuels industry that the government backs the use of home grown energy in our cars and trucks. At the same time, more work is needed and we hope EPA and the Department of Energy complete an evaluation of 2001-2006 models soon.” National Pork Producers Council (NPPC) Ethanol Task Force Chairman Randy Spronk: “The National Pork Producers Council is very concerned with the effect on America’s pork producers of raising to 15 percent the amount of corn ethanol that can be blended into gasoline, a decision the U.S. Environmental Protection Agency announced today. NPPC is withholding comment on raising the blend rate to E15 from its current E10 until we can consult with our economists. But any upward pressure on corn prices will have a negative effect on producers. Given that the U.S. Department of Agriculture’s Oct. 8 crop report revised down the expected yield and ending stocks of corn, we’re already seeing corn prices and the cost of raising a hog heading up.” National Farmers Union (NFU) President Roger Johnson: “We are pleased that the EPA has finally reached a decision regarding the E15 waiver and will permit 2007 model year and newer vehicles to run on a 15 percent ethanol blend. This decision means 18 percent of the fleet, or 43 million vehicles, will be able to use a cleaner fuel blend. America’s farmers and ranchers continue to provide real energy solutions to help us achieve greater energy independence and economic security. NFU policy supports safe and sustainable production and use of biofuels, and the use of ethanol as a fuel additive for gasoline.” Renewable Fuels Association (RFA) President Bob Dinneen: “EPA’s scientifically unjustified bifurcation of the U.S. car market will do little to move the needle and expand ethanol use today. Limiting E15 use to 2007 and newer vehicles only creates confusion for retailers and consumers alike. America’s ethanol producers are hitting an artificial blend wall today. The goals of Congress to reduce our addiction to oil captured in the Renewable Fuels Standard cannot be met with this decision.”

Here’s a link to EPA’s site on E15 , where you can access all the information related to today’s announcement.

Demand to Set Another Record

Fri, 13 Nov 2020 01:50:13 GMT

In less than two months, as Russia burned literally and figuratively in its worst drought in history, we transitioned from an ample world supply situation to one in which supply and demand are much more in balance. “The U.S. is an island of supply in a world that needs supplies,” says Dan Basse of AgResource. “With crops being trimmed worldwide, we will be the reliable supplier.”

Domestic demand for corn promises to be firm, pegged at 50 million bushels above this past year and carryover equaling less than 10% of use. The soybean outlook isn’t quite as rosy, with ending stocks climbing from this past year and equal to 11% of demand. However, “soybeans and meal could be the bigger story in the long term,” says Jerry Gulke of the Gulke Group. “USDA has China’s bean imports at 49.5 million metric tons [mmt]. Some say the total could be as much as 58 to 60 mmt. They’d have to import roughly a million tons a week.”

Corn ethanol use, pegged at 4.7 billion bushels, is up 200 million bushels, just about offsetting feed use, which fell 175 million bushels. Total grain-consuming animal units are up a touch from 2009. Both dairy and beef cattle are down for the third year in a row, squeezed by red ink. Hogs, on the other hand, are up, and poultry is up modestly.

The July 1 cattle and calves inventory fell 1% from this past year. With the smallest calf crop in 50 years, the question is, “When will herd rebuilding start?” Traditionally, the cycle includes six to eight years of increasing numbers followed by three or four years of liquidation.

Cattle ranchers in the southern Great Plains lost about $34 on every breeding cow they owned this past year, following losses of $18 a head in 2008, according to Jim Robb, director of the Livestock Marketing Information Center in Denver. “There are some encouraging signs this year,” says Tim Petry, livestock economist at North Dakota State University. “Most regions have the best pasture and range conditions in the past decade. Export demand for U.S. beef is improving, with sales up 25% compared with 2009. Cow, bull and feeder prices are better, so it’s possible we’ll see herd growth begin.”

The recent corn price run-up will dampen expansion in hog breeding. Live hog prices surpassed $60 per cwt. this past spring, providing profits of $30 per head. But, based on a survey of 19 economists, pork production will be up only 1% this year, says Ron Plain, University of Missouri livestock economist. Through 2011, they predict quarterly live hog prices at $52.57 to $57.83.

USDA reports the broiler breeding flock is up nearly 2% this summer. Given the continued soft economy, any rapid increase is unlikely.

Exports. Export sales of new-crop soybeans are 35% ahead of 2009’s strong pace, Gulke says. “And last year, we knew South America didn’t have a big crop.”

With USDA showing a net increase of 450 million bushels of corn, wheat and soybeans headed outside the country for the 2010 crop, our ports may be jammed as sales on the books are loaded and shipped out. “Big commercial elevators tell me their loading capacity is booked through December,” Basse says. “Everything needs to move smoothly to avoid backlogs.”

Jay O’Neil, senior economist at the International Grains Program at Kansas State University, says it will get done; the question is at what cost. “Heavy fall sales aren’t particularly unusual,” he says.

“If ports are congested, money will talk. Loading facilities can add shifts and work weekends. Some loads can be shifted to a different port. I haven’t witnessed anyone turn away business.”

Outside Market Factors. There are economic headwinds that may have a dampening effect on demand, however. “We saw major sell signals in equities,” Gulke says. After some improvement, unemployment in July dipped to 9.5%. That doesn’t spell a return to luxury dining.

A final question mark is where crude oil is headed, given the relationship between oil and corn. The Energy Information Administration (EIA) expects world oil prices to slowly rise as demand increases because of projected global economic growth, slower growth in non-OPEC oil supply and continued production restraint by OPEC members. A gradual reduction in global oil inventories is expected to lend support to firming oil prices.

EIA projects that the West Texas Intermediate spot price, which ended July at more than $78 per barrel, will average $81per barrel in the fourth quarter and $84 per barrel in 2011. This could lend support to corn prices. —Linda H. Smith

Top Producer, September 2010