Iowa farmers snap up nutrient reduction funds

It took less than a week for Iowa farmers to snap up 1.4 million dollars in cost share funds to help install new nutrient reduction practices on their farms.

The Iowa Department of Agriculture and Land Stewardship received applications covering near 60-thousand acres from 597 different farmers seeking to participate in the program.  The vast majority of the applications were for cover crops with the rest seeking help with nitrification inhibitors, no-till and strip-till.

Iowa secretary of agriculture Bill Northey calls the response “tremendous”.  He says it shows once again that farmers are committed to using voluntary, science-based conservation practices to continue to improve water quality.

The cost-share program is part of the Iowa Water Quality Initiative.

Ag senators expressed concerns to McCarthy

Republicans on the Senate Agriculture Committee met this week with EPA administrator Gina McCarthy to express their concerns about the agency’s “Waters of the U.S.” proposal and other EPA actions that are many view as “anti-agriculture”.

Nebraska Senator Mike Johanns, who was in the meeting, describes McCarthy’s attitude as “determined”.

“She was polite and she listened to us, but at the end of the day I’m not certain that we moved the ball down the field at all,” Johanns says. “She’s determined to regulate.  I think she believes she has the power to do that and she’s going to do it.”

Johanns suggested to McCarthy that she scrap the rule and start over.  But he doubts that will happen.

“I do think what’s happening here is the Obama Administration recognizes that they only have a couple years left—and I just think you’re going to see a blizzard of regulations over the next two years and five months,” says Johanns. “So I just think this battle will continue.”

Iowa Senator Chuck Grassley, who was also in that meeting with McCarthy, says it did little to alleviate his concerns that the agency isn’t listening to the people its rules will directly impact.

AUDIO: Mike Johanns (7:17 MP3)

China issues new rule on U.S. DDGS imports

ddgs-usgcChina says it wants all imports of distiller’s dried grains (DDGS) from the U.S. to be officially certified free of the MIR 162 GMO trait. The new requirement is effective immediately.

But U.S. Grains Council (USGC) president and CEO Tom Sleight says China is asking for something that cannot be done.

“This certificate they’re asking for does not exist,” Sleight says. “It cannot be produced from a U.S. government authority.  They do not inspect for biotech traits.”

China stopped issuing import permits for U.S. DDGS in June on concerns it might contain the trait, which has not been approved for import by China’s agricultural ministry.

Grains Council chairman Julius Schaaf, a farmer from Randolph, Iowa, says it’s time for China to approve the MIR 162 trait.  But he’s not convinced it’s just about GMOs.

“If this is a supply issue and China has plenty of corn and they really don’t need our grain right now, let’s call it what it is—a supply issue,” Schaaf says. “Let’s don’t blame it on biotechnology, which is pushing back on an industry and a development area that grain farmers desperately need for the future to stay competitive and provide global food security.”

AUDIO: Julius Schaaf (2:25 MP3)

Trade issues with China are expected to be a big part of the discussion at next week’s summer annual meeting of the USGC in Omaha.

Another record Wisconsin cranberry crop

Its official, Wisconsin had another record cranberry crop in 2013.  The final numbers from USDA put the Badger State cranberry crop at 6.02 million barrels last year, a 25 percent increase over 2012.   Harvested acreage was up 400 to 21,100 while yield was just short of 283 barrels per acre compared to 245 last year.  Wisconsin cranberry acreage has increased 3,100 acres since 2011.

Wisconsin remains the number-1 cranberry-producing state in the nation providing 67 percent of total production.  Massachusetts was a distant second with 1.8 million barrels, down 14 percent from 2012.  Other major cranberry states: New Jersey 547,500 barrels down slightly from 2012; Oregon 390,000 barrels down 4 percent; Washington 152,000 barrels up nearly 11 percent from 2012.

The total U.S. crop was over 8.9 million barrels up 11 percent from the previous year.  Average yield was over 211 barrels per acre compared to 199 the previous year.  Total acreage harvested was 42,000 compared to 40,300 in 2012 and 38,500 in 2011.  That increase was all in Wisconsin.

Average price for fresh and processed berries was $32.30 per barrel compared to $47.90 in 2012.  Washington producers got $43 per barrel, Wisconsin $32, New Jersey $37.50, Massachusetts $31.60 and Oregon $30.60.

EPA’s PR campaign met with skepticism

The EPA’s public relations campaign on its proposed Clean Water Act rule is being met with skepticism from many politicians and agricultural groups.

EPA has been trumpeting its list of 56 farming activities that would be exempt from Clean Water Act permitting requirements under the rule.  But Kristen Hassebrook, director of legal and regulatory affairs for Nebraska Cattlemen, isn’t buying it.

“This ‘claimed’ exemption list that EPA says that they’ve created for agriculture is entirely false,” Hassebrook says. “That list is a list of practices that are just traditional farming practices that we do year round, day in and day out, all the time.”

Hassebrook says there’s already an exemption from those types of permits for normal farming and ranching practices.

“So by creating that list they’ve actually limited our options and taken things off the table versus creating anything new,” she says. “That’s a big piece that we want folks to know—don’t be fooled by this ‘it’s good for ag’ list—because that ‘good for ag’ list is literally a PR tool that they’re using to not tell the truth.”

Another consequence of the rule, Hassebrook says, is that it would put USDA’s Natural Resources Conservation Service (NRCS) in the unprecedented position of enforcing farmers’ compliance with the Clean Water Act.

AUDIO: Kristen Hassebrook (2:47 MP3)

Northey: Plan ahead for propane needs

Iowa Secretary of Agriculture Bill Northey is encouraging farmers, rural residents and other Iowans to plan ahead for their propane needs for this fall and winter.

Last winter the price of propane jumped sharply, to more than five dollars per gallon in some locations, as a number of events severely tested the capacity of the current propane delivery system and infrastructure.  Northey says that while such a dramatic price increase seems unlikely this year, it is important for propane users to be prepared.

Northey says with the potential for large corn and soybean crops in Iowa, the demand for propane use for grain drying could be significant again this year. Fortunately, he says, crop maturity is significantly ahead of last year and slightly ahead of the five year average, which could limit some of the need for propane.

Northey recommends that farmers fill propane tanks for grain drying, livestock facilities, homes and machine sheds ahead of the busy fall season. He also suggests early and regular communication with propane suppliers.

Ag’s economic landscape is changing

oppedahl_davidDeclining grain and soybean prices will change the economic landscape for agriculture.

“We’re going to have a lot of yield this year and that’s going to help somewhat with the lower prices—and insurance this year will help to buffer the downturn,” says David Oppedahl, senior business economist with the Federal Reserve Bank of Chicago. “It’s really more next year that the crop farmers are going to feel the full weight of these lower prices, unless something else changes.”

But Oppedahl says most farmers are in good shape financially, with very positive balance sheets.

“Of course, there will be certain operations that maybe expanded a little too quickly and are in a tighter situation,” he says, “and, going forward, working capital is an issue because a lot of farmers have used that up in purchase of either land or equipment—so that’s going to be a key issue, how much working capital you can have.”

Brownfield visited with Oppedahl at the Iowa Farm Bureau Economic Summit in Ames.

AUDIO: David Oppedahl (4:10 MP3)

Managing risk also means lowering cost

When it comes to managing risk, an agriculture economist says the first thing farmers need to figure is how much it costs them to raise their crop.  Purdue’s Mike Boehlje says farmers need to have a tighter handle on their cost structure.  “We need to know how much of cost is fertilizer, seed, and chemical,” he says.  “We need to figure our cost not per acre in my judgment – but per bushel.”  And farmers figure up cost per bushel, he says, because that’s how they market grain.

In this type of economic environment Boehlje tells Brownfield farmers have to look at ways of lowering their input costs.

One of which, is evaluating cash rents.  “They are sticky moving downward,” he says. “It’s really hard, but we shouldn’t put it off the list of costs we need to think about lowering.  Farmers need to explain to the landlord why we can’t pay the rents that we paid in the past.  Maybe negotiate an arrangement that says if prices go back up – ‘I’m willing to pay more’ in form of a flexible cash rent.”

Boehlje says the most important marketing decision farmers make isn’t the price at which they sell their crops, it’s actually what they pay for their inputs.  Because, he says, what farmers pay for their inputs sets cost structure for the operation.

AUDIO: Mike Boehlje, Purdue Ag Economist (1:00mp3)

Pressure mounting for farm bill implementation

Pressure is growing on the USDA to step up its implementation of the 2014 farm bill.  Iowa Farm Bureau president Craig Hill says farmers will need some time to study their options when it comes to new crop commodity programs.

“When will farmers go in and sign up? What tools will they have to be able to evaluate the commodity title in the farm programs?  There are lots of decisions to be made and USDA is about 20 percent of the way through discovering what these new decisions should look like—so we’ve got a ways to go there,” Hill says.

“But by next year, hopefully, farmers will be signed up and know the rules of the game in farm programs.”

At a recent Congressional hearing, Minnesota Representative Collin Peterson criticized USDA for not doing enough to educate dairy farmers about the new Margin Protection Plan. Lawmakers also expressed concerns over implementation of the farm bill’s crop insurance and conservation compliance provisions.

For its part, USDA says it has made “significant progress” on farm bill implementation.

AUDIO: Craig Hill-interview at Iowa Farm Bureau’s economic summit (5:40 MP3)

Young farmer concerned with water rule

The EPA’s “Waters of the U.S.” rule dominated the discussion on the Nebraska Farm Bureau’s Young Farmers and Ranchers National Affairs Trip to Washington, D.C.

One of the participants, Dustin Fairley, wonders if the EPA hasn’t already set the wheels in motion.

“I serve on our local FSA board and just since the first of the year we’ve had six new rulings on wetland classifications,” Fairley says. “We haven’t had six in the last six years.  So all of a sudden to have six in one year, it kind of makes you a little nervous about how EPA is going about this.

“They have this new proposed ruling, but I kind of think they’re already starting to push that ruling through other routes.”

Fairley says over-regulation of agriculture and regulatory uncertainty are major concerns.

“As a young farmer, these rules will impact everything we do in the future of ag,” he says.

Fairley farms near Fairbury.  He also has a custom farming business.

AUDIO: Dustin Fairley (8:59 MP3)