DTN Ag Headlines

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- USDA is set to open sign-up for the Conservation Reserve Program on Dec. 9 to include both general and continuous enrollments, the Farm Service Agency announced in a press conference on Thursday.

There are 22 million acres enrolled in CRP. The 2018 farm bill raised the cap to 27 million acres. Bradley Karmen, FSA assistant deputy administrator for farm programs, said general sign-up will run through Feb. 28, 2020.

FSA Administrator Richard Fordyce said the agency will be flexible for farmers in terms of enrollment.

"I think that we'll look at the numbers and the offers," Fordyce said. "We want to be as accommodating as we can be to landowners. We want to be has helpful as we can to satisfy the desires of landowners. We have a lot of work ahead of us. We're going to see a number of acres come out with expiring acres and we know we've got room and lots of opportunities to get in."

FSA also recently posted updated soil rental rates for CRP. Soil rental rates are prorated at 90% for continuous sign-up and 85% for general sign-up. The rental rates will be reviewed annually. Under continuous sign-up, producers also receive incentives that include a sign-up incentive payment and a practice incentive payment.

The 2018 farm bill lowered rental rates and requires USDA to survey rental rates more frequently. Landowners were cashing out high CRP rates in the past and locking in 15-year contracts, and the changes are meant to stop that.

Karmen said the upcoming sign-up could be the largest the program has seen in a decade, considering the number of acres lost this past growing season to weather disasters.

DTN Lead Analyst Todd Hultman said the expanded CRP acres would help to ease some of the bearish pressure on new-crop prices and may help farmers in flood-prone areas.

As it currently stands, 2019 plantings of corn, soybeans and wheat totaled 211.6 million acres in 2019. That was down 14.5 million from last year's 226.1 million acres. USDA's early estimate is for 94.5 million acres of corn plantings in 2020.

Hultman said that adding acres to CRP "should help ease some of the bearish concern of new-crop plantings, but I would not expect it to have a significant impact on crop prices."

The National Sustainable Agriculture Coalition said in a statement it is hopeful the FSA keeps continuous sign-up open to landowners.

"It is our strong hope that the continuous sign-up will never again be shut down as it has been several times in recent years," the group said. "There is no reason that FSA cannot manage CCRP (continuous CRP) so that the continuous sign-up is just that -- continuous. While we are pleased that CCRP and CLEAR (Clean Lakes, Estuaries and Rivers) are restarting, we are disappointed that the new interim final rule addresses only the adjunct CLEAR 30 pilot project but not CLEAR itself. This surprising oversight must be corrected in the final version of the rule."

In addition, the coalition said it will be monitoring the sign-up to make sure farm bill sign-up incentive payments and practice incentive payments are "fully utilized and made available for all practices and at the maximum levels."

The CRP was initially authorized by the 1985 farm bill. The program provides financial compensation to landowners through an annual rental rate to voluntarily remove land from agricultural production for usually 10 to 15 years.

There are two types of enrollment through CRP: general and continuous. General enrollment allows landowners to enroll in a competitive bidding fashion for a specific period. Unlike general enrollment, farmers can enroll at any time in continuous enrollment not subject to competitive bidding.

According to an FSA news release, the CRP has prevented more than 9 billion tons of soil from eroding, has reduced nitrogen and phosphorous runoff relative to annually tilled cropland by 95% and 85%, respectively. The program has sequestered an annual average of 49 million tons of greenhouse gases, equal to taking 9 million cars off the road, according to the FSA.

In addition, the CRP has created more than 3 million acres of restored wetlands while protecting more than 175,000 stream miles with riparian forest and grass buffers.

Find more details about the program here: https://www.fsa.usda.gov/….

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(SK/AG)

By Jim Patrico
Progressive Farmer Contributor

When commodity prices are stuck in the little-to-no-profit zone, it just makes sense to search for new crops with higher return potential.

Five years ago, Annette and Bruce Wiles chose to be among the first Nebraskans to try growing hops. This year, they also planted hemp.

The decision to plant specialty crops came after a long career in which Bruce and his brothers grew 11,000 acres of corn and soybeans. Annette had worked in product development in the financial/credit card industry. Each was ready to try something new.

"I had a hard time understanding why people grow certain crops when they have no control over the price," Annette said. So, taking on specialty crops was a logical step, and their original research led them to hops.

How do hops and hemp stack up to more traditional commodities for profits? It's probably too early to tell.

The couple's sales of hops to brewers in Iowa, Missouri and Nebraska have increased each year. These are brewers who value regionally sourced hops and the distinct flavors they impart. Working in conjunction with the University of Nebraska, the Wiles also are breeding new varieties of hops they intend to sell as plants to other farmers wanting to give the crop a try.

The Midwest market for hops is strong, especially in this era of booming local and home breweries, Annette said. The main obstacle is cost of production.

Hops are "very labor-intensive," and expensive equipment added to startup costs, she said. Economies of scale indicate it takes 30 to 50 or more acres to be profitable. She and Bruce currently have 32 acres of hops in the ground.

Another obstacle is time. Hops plants take up to four years to reach full production. In their first year, the Wiles' hops produced 20 to 25% of their potential.

Washington State University said average dry-matter production in mature plants in the Pacific Northwest can vary from 1,800 to 2,800 pounds per acre, depending on variety. Prices also vary by variety and by year. A 2015 Michigan State University study predicted the first four years of hops production would yield losses for a 20-acre farm. In the fifth year, the study showed a $13,000 profit.

HEMP LICENSES

Growing hemp has been a similar -- but different -- experience for the Wiles.

First, they had to obtain one of only 10 licenses from the state of Nebraska to grow hemp. That tells you that Nebraska (like many other states) is just now exploring the crop.

Hemp, grown for CBD (cannabidiol) oil extracted from seeds and for fiber from the plants, is a crop with a fraught history based on confusion with its cannabinoid cousin, marijuana. Entrepreneurial farmers like the Wiles will have to contend with regulations that, in many states, are just now being written and interpreted.

The Wileses have four varieties of hemp, 72 plants of each in two greenhouses. They are experimenting to learn the best varieties to produce CBD oil.

Like everyone else in this new cropping frontier, they are unsure of the profit potential. One University of Nebraska researcher estimated net income of as much as $100,000 per acre. A study in Pennsylvania suggested the profit potential at only $l,200 per acre. In other words, who knows?

All of which leads Annette to say of both hops and hemp: "There are opportunities for farmers. But, if you don't have the infrastructures and markets lined up for what you grow, farmers can spend a lot of money on the front end" ... and not be rewarded.

GIANT MISCANTHUS TRIAL

When John Atkinson, of Kingdom City, Missouri, first started growing the tall grassy plant named Giant Miscanthus six years ago, it was part of an experiment.

MFA Inc., a Midwest farm and marketing cooperative, wanted contract growers because it planned to pelletize dried Giant Miscanthus fiber to burn in steam generators as an energy alternative to coal and oil. A few years into the experiment, MFA sold its interest in the operation to Renew Biomass, a southwest Missouri company that processes Giant Miscanthus fiber (branded M-Fiber) for pet food and supplement manufacturers.

Atkinson's Giant Miscanthus contract passed from MFA to Renew Biomass.

"Your next question is: 'Are you glad you're in it?'" Atkinson asked. "And, I am."

Here are his reasons:

-- He had to buy no new planting or harvesting machinery. MFA planted 60 acres of Giant Miscanthus on marginal ground that Atkinson had slated for brome hay. The crop has a life expectancy of 15 to 30 years. Come harvest in late winter, Renew Biomass sends a crew, which harvests and bales the crop.

-- Giant Miscanthus is low maintenance. It took a couple of years to get established and grew 8 to 10 feet tall. "Now, it's doing well ... All I have to do is fertilize occasionally -- every two to three years -- and keep a border cleared around it," Atkinson said.

-- It produces twice as much biomass per acre as switchgrass or corn.

-- Giant Miscanthus -- which arrived here from Asia 100 years ago -- seems to have few natural enemies, so pest control is minimal to none. What's more, since it propagates from rhizomes, not seeds, it is noninvasive.

-- It has deep roots to hold soil in place. It is heaven on earth for wildlife, and it traps more carbon than most crops.

-- The income is steady. Atkinson recently signed a seven-year contract with Renew Biomass for $40 per ton. He doesn't have exact yield numbers for his fields, but nationwide averages are 7 to 10 tons per acre.

Like anything, there are some downsides to Giant Miscanthus. Most notably, markets for the niche crop are spotty and not well-established.

Emily Heaton, associate professor of agronomy, biomass specialist, biomass crops production at Iowa State University, has studied the plant for most of a decade and at first thought the crop would thrive as a source for cellulosic ethanol plants.

"No company was able to figure out how to do that in today's energy and policy environment," she said.

Even so, the biomass content of Giant Miscanthus is enticing other potential users. Its biggest current Iowa market is bedding for poultry growers, Heaton said. Construction companies in Iowa and Wisconsin use Giant Miscanthus straw to hold soil in place during road and work site projects.

Heaton estimated 15,000 to 20,000 acres of Giant Miscanthus already have found markets in hot spots such as Georgia, Illinois, Iowa, Maryland, Mississippi, Missouri, North Carolina, Ohio, Pennsylvania and Wisconsin. She advises interested farmers to keep their antennae up.

"If there is a market you hear about, I would check it out," she said. "It [Giant Miscanthus] is not going to make you a ton of money the way row crops did from 2010 to 2013. But it can be stable and provide income for you in a steady way while protecting your soil and water."

THE NON-GMO ROUTE

It didn't take much to convince Gary Hughes to plant non-GMO soybeans for the Japanese tofu market.

Specialty crops are Hughes' thing. The Rosendale, Missouri, corn and soybean producer has long planted his 2,500 acres to both waxy corn and non-GMO soybeans. Five years ago, when a company named Lathrop Feed and Grain (now Lathrop FSG) told him he could get a premium on the variety of non-GMO soybeans he was already planting, it was kind of a no-brainer. "It all comes down to profit," Hughes said.

He had long been a believer in non-GMO beans, which do well on his "average" soils. Two years ago, he switched all of his bean acres to non-GMO because he questioned the cost efficiency of GMO beans now that weed resistance is rampant.

"Do the math," Hughes said. With extra applications and expensive chemistry, "I'm paying the same for weed control with non-GMO beans [as with GMO beans]." Besides, he said, non-GMO seed is less expensive.

Hughes is the type of grower Stacey Evans loves. Evans is the general manager of Lathrop FSG (based in Lathrop, Missouri), which started cleaning non-GMO soybeans in 2008 for sale to Japanese tofu manufacturers. The first couple of years, the company shipped 50,000 to 100,000 bushels in containers that were backhauls from Japanese shipments to Kansas City of electronics, toys and other goods. Today, Lathrop FSG ships 400,000 to 500,000 bushels to Japan in those same kinds of containers. To attract growers, Lathrop FSG offers a $2-per-bushel premium over local commodity prices. By contract, a grower can lock in the price whenever he feels the market is right.

The catch is that the Japanese are extremely particular about bean quality. "What we look at as commodity, they view as their food," Evans explained. His company and his growers have to make that mental transition when dealing with the Japanese. "You go from being a handler of commodities to being a food manufacturer."

So, special care is needed with tofu beans. At harvest, for example, farmers shouldn't cut non-GMO beans if their hulls are wet with dew or rain. Dust from harvesting can leave speckles on the beans, and tofu makers do not like dirty-looking beans.

Hughes employs special procedures when he harvests non-GMO beans. "I run them like seed beans," he said. "You want very high quality and a low number of splits. It makes you fine-tune your combine. I also handle them with conveyors rather than augers" to prevent damage to the beans.

Would he recommend a non-GMO contract to others? "I would, but not without reservations," Hughes said. "It is not for everyone."

Weed-control timing is key. "If you miss, you're done. There is not an effective rescue treatment," Hughes said. There is also the matter of non-GMO varieties typically having lower yields than some of the hot GMO varieties.

But, in Hughes' world, the lower costs of non-GMOs -- and $2 premiums -- outweigh lower yields. "It's just a matter of knowing the genetics of what you are planting."

(ES/)

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- The state of Iowa cannot enforce a new ag trespass law signed by Gov. Kim Reynolds last March, after a federal judge granted a preliminary injunction this week in a lawsuit brought against the law by animal rights groups.

The order issued Monday in the U.S. District Court for the Southern District of Iowa in Des Moines is the latest in a series of legal defeats for the state in its attempts to stop undercover investigations at agriculture facilities.

Animal rights groups filed the lawsuit on April 22, 2019, to stop Iowa's new law. Reynolds signed the law just months after a federal court ruled the state's previous ag fraud law was unconstitutional.

"The public interest also weighs in favor of granting a preliminary injunction," the court said in its order on Monday.

"Although this court seriously considers the public's interest in seeing the enforcement of criminal laws, defendants have done little to show that (the law) responds to ongoing issues of public concern unrelated to the suppression of free speech," the court said in its ruling. "By contrast, the public benefits from people and organizations exercising First Amendment rights and educating the public about important issues relating to animal abuse and safety at agricultural production facilities. The public interest weighs in favor of granting a preliminary injunction."

The court has scheduled a hearing on the case for Dec. 23, 2019.

In January 2019, the same court ruled the 2012 law was a violation of free speech. The groups, led by the Animal Legal Defense Fund, filed the new lawsuit in the same court.

The 2012 law came about after at least a couple of widely publicized investigations into hog operations. The law made it illegal to enter a livestock facility under false pretenses or lie on a job application to work for a livestock operation. It was meant to effectively criminalize undercover investigations on livestock farms.

In the new lawsuit, the animal rights groups compared the new law with the previous law, calling them "substantially similar" and outlining how the new law is overbroad. Further, the groups provided details of planned investigations into agriculture operations that would be thwarted by the new law.

The new law prohibits what it calls "agricultural production facility trespass." It makes it illegal for a person to gain access to an ag facility through deception if the intent is to cause an "injury" to the "business interest" of the facility.

The 2012 law used similar language as the new law, prohibiting what it called "agricultural production facility fraud." That was defined as obtaining access to an ag facility through false pretenses and making false statements or representations on applications for employment with ag facilities.

The new law also prohibits access to an ag facility by using deception "on a matter that would reasonably result in a denial of access to an agricultural production facility that is not open to the public." The new law was designed, essentially, to prevent "economic harm" or "other injury" to the facilities, equipment, employees and even customers.

The animal rights groups who file the lawsuit have alleged the new law also impedes on the free speech of other groups, including members of labor unions, and has put a chill on potential future undercover investigations.

The groups said they have identified Iowa ag facilities where they would like to conduct "undercover, employment-based investigations, but it has not pursued such investigations due to its reasonable fear of prosecution" under the new law.

Iowa joined several states in adopting what opponents call "ag-gag" laws because of videos generated by such investigations showing what is perceived by some as abusive behavior toward animals.

Similar cases have overturned laws in Idaho and Utah in recent years, but a Wyoming law has been upheld in court. Similar cases are still working their way through courts in North Carolina.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(AG/ES)

By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- The ugly trifecta of 2019 -- late planting, high-moisture corn and plentiful rain and snow -- has left many farmers facing unharvested cornfields into December and possibly beyond.

Of all the agronomic sins this year has forced onto the landscape, cornfields left standing deep into the winter is perhaps the one farmers dread the most.

"Nobody in my part of Ontario, and, I presume, the rest of the province, wants to leave corn out for the winter, especially this year," said Dan Petker, who farms in southern Ontario, Canada. "Surrounded by the Great Lakes means lots of moisture-laden air, lots of snowfall and lots of wind."

Even farther south, the idea strikes fear in the heart of north-central Missouri farmer Kyle Samp, who was forced to harvest some fields in January last year due to overly wet conditions. "Even that long makes me so nervous," he said. "You had better have some pretty good stalks and good-quality grain to start with."

Farmers facing standing cornfields should know their risks. Winter temperatures allow for limited drying in the field, and yield loss from lodging, ear drop and wildlife feeding is a likely risk. Finally, depending on your policy, crop insurance may not follow your crop through the winter months.

THE REALITIES OF DRYING OVER WINTER

In Wisconsin, farmers have up to a third of the corn crop left to harvest, and high-moisture corn is very common, noted University of Wisconsin Extension corn agronomist Joe Lauer.

The costs of drying that corn down mechanically to the desired 15% for storage are significant, he noted. The research suggests drying costs for a single point of moisture range from 3 cents per bushel for on-farm drying to 6 cents per bushel for commercial drying.

"If you have 30% moisture corn and you multiply that out, you're looking at 45 to 90 cents in extra costs, which takes the profit out pretty quickly," Lauer noted.

As such, the possibility of letting Mother Nature do the job in the field may seem attractive, but growers should be aware that drying rates plummet in the winter months, especially in the northern Corn Belt, he added.

"Generally, once you hit Dec. 1, there isn't a lot of moisture loss occurring until March or April of the following year," he said. A 2009 study by Lauer and former Wisconsin Extension agent Nick Schneider found that, in Wisconsin, 22%-moisture corn stayed at that level through December and January and only dropped to 16% and 10% in March and April, respectively.

For other options on air-drying corn in the bin during winter months, see this University of Nebraska article: https://cropwatch.unl.edu/….

THE YIELD LOSS RISKS OF WINTER MONTHS

A lot can happen between December and April. Wind, snow and ice are a significant possibility for most growers in the Corn Belt, as are foraging wildlife such as deer. A wide range of lodging, ear drop and kernel shattering are possible each winter, which makes predicting yield loss almost impossible, Lauer noted.

Lauer and Schneider tried to conduct research on this by measuring yield loss in standing cornfields in Wisconsin in 2000 and 2001. The results varied widely. In the snow-heavy year of 2000, the researchers measured yield losses ranging from 38% to 65%, depending on which month the corn was harvested. In the milder winter of 2001, yield losses ranged from 5% to 18%.

"The spread of what can happen is really wide, and the bottom line is the longer the corn is in the field, the more risk you take on," Lauer said.

Keep in mind that late, wet planting and disease has left many fields with serious quality issues this year.

"Stalk integrity this year is terrible, and most corn would not be standing by spring harvest time -- mid to late April," Petker said of his Ontario region.

Ear molds and other quality issues could also create problems. Mold development can continue until outside temperatures drop below 40 degrees Fahrenheit or moisture drops below 20%, according to North Dakota State University Extension agricultural engineer Ken Hellevang. See more here: https://www.ag.ndsu.edu/….

University of Minnesota Extension educator Angie Peltier and North Dakota State University Extension agronomist Joel Ransom cautioned growers of another potential victim of overwintering corn: your 2020 crop.

"When deciding on keeping corn over the winter, remember that dealing with corn residues after a spring harvest will likely delay any spring land preparation and planting, (and) that could put your 2020 (crop) at a disadvantage," they wrote in a joint university newsletter. Volunteer corn could also complicate weed control in the following crop.

CROP INSURANCE MAY NOT COVER YOU

Don't assume crop insurance will follow your corn crop through the winter months. According to USDA's Risk Management Agency, basic crop insurance policies end their coverage period when any one of the following scenario occurs first:

-- Total destruction of the insured crop.

-- Harvest of the insured crop.

-- Final crop loss adjustment.

-- The calendar date contained in the Crop Provisions or Special Provisions for the end of the insurance period (Dec. 10 for corn as a grain crop).

-- Abandonment of the insured crop.

USDA defines "abandonment" as: "Failure to continue to care for the crop, providing care so insignificant as to provide no benefit to the crop, or failure to harvest in a timely manner, unless an insured cause of loss prevents you from properly caring for or harvesting the crop or causes damage to it to the extent that most producers of the crop on acreage with similar characteristics in the area would not normally further care for or harvest it."

Growers with standing cornfields should check with their individual crop insurance agent, Peltier and Ransom stressed. "Please keep in touch with your crop insurance agent should either you suspect an insured loss or the Dec. 10 deadline approaches," they wrote.

For more details on standing corn risks and drying costs and breakevens, see this article from the Minnesota scientists here: https://blog-nwcrops.extension.umn.edu/… and Lauer and Schneider's work here: http://corn.agronomy.wisc.edu/….

Emily Unglesbee can be reached at Emily.unglesbee@dtn.com

Follow her on Twitter @Emily_Unglesbee

(PS/AG)

By Elaine Kub
DTN Contributing Analyst

Farmers have had a hard time in 2019. From late, wet and sometimes outright-prevented planting in the spring, to the late, wet harvest and profit-eroding drying expenses this fall, their struggles have been well-covered. Approximately 9 million acres of corn is still needed to be harvested at the start of December, when winter storms barreled across the continent, burying crops in fields. And while we're saying a prayer for the resilience of the grain producers who are still struggling to get grain dried down and harvested out of those fields, perhaps we should also spare a thought for the grain-buying organizations that work with them. These are not all big, faceless corporations -- some are family-owned businesses and all have employees who count on a stable business to provide their paychecks.

Initially, we might think that local elevators across the Corn Belt are experiencing highly profitable opportunities right now -- buying harvested grain at steep discounts due to high moisture and low test weights, then planning to mix and blend those factors away to resell their entire inventory without such discounts. However, if an entire region is plagued by high moisture and low test-weight corn, then the local elevator may not have enough No. 1 or No. 2 corn in-house to blend away the discount factors. They may end up with an inventory that isn't able to be delivered according to the contracts they've made with buyers farther down the supply chain. A train-load of U.S. No. 2 yellow corn, for instance, must have a maximum of 15% moisture, a minimum test weight of 54 pounds per bushel, no more than 0.2% heat damaged kernels, no more than 5% damage overall, and no more than 3% broken corn and foreign material. Usually in the modern U.S. grain-handling industry, that's no problem. This year? A struggle for some.

Local elevators are usually also involved in retailing inputs to farmers. Propane demand has been, shall we say, "robust" this fall. One might think there's money being made in that market, but honestly, I haven't heard of any price gouging. It might be going on and I just haven't heard those reports, but for the most part, the farmers I've spoken to across the Corn Belt have been buying propane from their suppliers in the slow trickle available at relatively normal prices.

Meanwhile, there are myriad ways that grain elevators' and input retailers' profits have been threatened in 2019. I've made a short list, which I'm sure isn't exhaustive:

STORAGE RISKS: Any elevator that accepts wet grain from farmers and piles it outside risks future quality problems and discounts on that grain if it deteriorates in storage and can't later be blended off.

LIMITED BASIS TRADING OPPORTUNITIES: Basis trading margins are being squeezed from both sides in late 2019; basis levels are strong at the local elevator and weak at the export terminals. For example, a grain trading firm might typically buy "cheap" harvested corn at a local elevator in, say, Missouri at 30 cents under the nearby futures contract. The trader might store and transport that grain and eventually sell it for export in Louisiana in March at 55 cents over the nearby futures contract. In contrast, this year the opportunity is diminished. The grain trader is likely to be paying 15 cents under the March futures contract for the local corn and later may still only receive the 55-cent over-futures basis price at the Gulf (highly dependent on the trade war scenario). Obviously, changes in transportation costs, among other market changes, make it impossible to do an apples-to-apples comparison of generalized year-by-year basis trading opportunities. Nevertheless, the inability to buy "cheap" grain at harvest (in basis terms) is undoubtedly a stone around the neck of grain traders' profitability this year to match the cement boots they were already wearing since the trade war has limited export sales opportunities at the ports.

LOST FERTILIZER SALES: To the extent that farmers were unable to plant as many high-input corn acres this spring as they otherwise would have liked, it's likely that fertilizer sales were diminished last spring. And now, the extremely late harvest and wet or frozen ground conditions have prevented much fall fertilizer application.

LOST SEED SALES: There were unquestionably fewer soybean acres planted in 2019 than the industry originally planned to see. The seed that was returned or never purchased in the first place was a loss to retailers.

LOST PERSONNEL: In the regions where prevented planting and production losses are most severe, there are fewer bushels to handle, which not only means there will be less profit, but it also means there's just less to do. The manager of a co-op in northwestern Ohio told me earlier this fall that agricultural businesses in that area were cutting staff numbers by as much as 15%, and of course there's risk that once good employees have been lost and moved on to other opportunities, it will be challenging to re-staff once things get back to "normal."

Fortunately, most grain trading companies are diversified. Some large cooperatives now derive significant portions of their income from processing activities and the energy sector. In their Annual Report released in September, CHS Inc., for instance, detailed "generally decreased margins and decreased or flat volumes across most of our ag segment during fiscal 2019," offset by increases in certain agronomy products and by significant increases in the cooperative's energy segment. But this is a worrying time for companies whose primary focus is agricultural commodity trading. Louis Dreyfus Company, in a staff memo last week reported by Reuters, announced cost cuts amid dwindling profits: their net income from continuing operations in the first half of 2019 was down almost 20% compared to same six-month period from 2018. Meanwhile, share prices for Archer-Daniels Midland are down 7.7% from year-ago levels, and share prices for Bunge have dropped 9.6%.

Most agricultural company reports these days seem to include the same predictable platitudes about conditions likely improving sometime in 2020. Much of that optimism seems to be dependent on a shift in the ongoing trade war conditions, so take it for what that's worth. But I think we can all agree that a return to "normal" (normal weather, normal planting, normal trade) would be helpful not only for grain farmers, but also for the thousands of businesses that depend on high volumes of grain and inputs to pass through their hands.

Elaine Kub is the author of "Mastering the Grain Markets: How Profits Are Really Made" and can be reached at elaine@masteringthegrainmarkets.com or on Twitter @elainekub.

(BE/BAS)

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Retail fertilizer prices continue mostly lower, according to retailers tracked by DTN for the fourth week of November 2019.

Seven of the eight major fertilizers were lower in price from a month earlier, although once again none were noticeably lower. DAP had an average price of $456/ton, MAP $465/ton, potash $381/ton, urea $386/ton, anhydrous $497/ton, UAN28 $245/ton and UAN32 $277/ton.

The remaining fertilizer was slightly higher than last month. 10-34-0 had an average price of $472/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.42/lb.N, anhydrous $0.30/lb.N, UAN28 $0.44/lb.N and UAN32 $0.43/lb.N.

Harvest occurred on many wet soils this fall across a good portion of the Corn Belt and this could affect how farmers apply fertilizer. In a post titled "How Soil Compaction Impacts Fertilizer Decisions" University of Minnesota Extension specialist Dan Kaiser, Extension educator Brad Carlson and soil scientist Jeff Vetsch tackled this subject.

Compaction creates barriers that limit root growth, impacting the uptake of nutrients and thus limiting yields. Most nutrients with limited mobility in the soil move via diffusion through soil water and compaction makes the soil less porous, which could affect the movement of some nutrients.

"Data from Wisconsin has shown adding potassium to the soil increases alfalfa yield," the report stated. "Other data has shown a similar link between increased yield and higher levels of magnesium (Mg) in compacted situations."

The University of Minnesota does not have specific research-based recommendations for compacted soils, according to the report.

One method of avoiding fertilizer loss due to compaction issues is to delay fertilizer application until the field is in better condition. Applying fertilizer in the spring instead of in the fall will likely decrease the likelihood of nitrogen losses.

The report said research has shown severe compaction can affect yield for many years and the best plan is to try to avoid severe compaction at all costs. This may test your patience at the moment but longer term your crops will thank you for years to come, the report concludes.

The entire University of Minnesota Extension report can be viewed at https://blog-crop-news.extension.umn.edu/….

Retail fertilizers are mixed in price from a year ago. MAP is now 12% less expensive, DAP is 9% lower, urea is 6% less expensive, anhydrous is 4% lower, UAN32 is 3% less expensive and UAN28 is 1% lower from last year at this time. In addition, both potash and 10-34-0 are 3% more expensive compared to last year.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to 2010 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DRY
Date Range DAP MAP POTASH UREA
Nov 26-30 2018 501 530 369 409
Dec 24-28 2018 507 533 379 407
Jan 21-25 2019 512 535 383 409
Feb 18-22 2019 512 536 385 404
Mar 18-22 2019 509 533 386 401
Apr 15-19 2019 504 531 388 404
May 13-17 2019 498 526 392 426
Jun 10-14 2019 497 527 392 434
Jul 8-12, 2019 497 532 392 431
Aug 5-9 2019 495 531 395 428
Sep 2-6 2019 491 488 387 408
Sep 30-Oct 4, 2019 476 474 384 404
Oct 28-Nov 1 2019 464 472 383 402
Nov 25-29 2019 456 465 381 386
LIQUID
Date Range 10-34-0 ANHYD UAN28 UAN32
Nov 26-30 2018 457 519 246 287
Dec 24-28 2018 457 568 266 303
Jan 21-25 2019 467 584 270 313
Feb 18-22 2019 470 596 271 317
Mar 18-22 2019 470 597 270 318
Apr 15-19 2019 481 594 270 317
May 13-17 2019 487 595 267 311
Jun 10-14 2019 487 591 271 314
Jul 8-12, 2019 485 585 276 317
Aug 5-9 2019 491 580 272 320
Sep 2-6 2019 473 522 255 290
Sep 30-Oct 4, 2019 470 511 253 289
Oct 28-Nov 1 2019 468 503 251 291
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Russ Quinn can be reached at russ.quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

(SK/CZ)

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- With a proposed rule to account for small-refinery exemptions in the Renewable Fuel Standard now in the EPA's hands, Sen. Charles Grassley, R-Iowa, told agriculture journalists on Tuesday he's hopeful the agency will improve the proposal.

A public comment period for the supplemental rule closed on Nov. 29, and the agency is on track to finalize the rule by the end of the year.

The Trump administration has approved 85 exemptions since 2016, and agriculture and biofuel interests are unsatisfied with an EPA proposal to account for waivers. The industries contend the proposal does not include what was agreed to in a Sept. 12 White House meeting involving Midwestern lawmakers.

"Two weeks ago this afternoon, I and another senator were in the Oval Office, talking to the president about this very thing," Grassley said.

Grassley said that, during the recent meeting in the Oval Office, the president invited in economic adviser Larry Kudlow and contacted by phone EPA Administrator Andrew Wheeler, telling them the RFS proposal to guarantee 15 billion gallons of corn ethanol is maintained.

"I tried to make clear to Wheeler something very simple," Grassley said. "He tells us that we're going to get to 15 billion gallons. But the regulations really bring so much uncertainty to that, that even if his intentions is 100% correct and his heart's in the right place, farmers don't believe it.

"Not because of just Wheeler, but because of the history of EPA being a voice for big oil on the RFS. So, bottom line, I sat through two administrations now we've been putting up with this. So even if your heart's in the right place, your regulation has to show that."

Much has been made about President Donald Trump's administration's handling of the RFS and how it might affect the upcoming presidential election.

When asked about possible Trump political ramifications of EPA's actions on the RFS, Grassley said farmers should consider overall administration policies favorable to agriculture.

"I would say there's a price to be paid but not as great as it would have been 10 or 15 years ago," Grassley said.

"And it would be offset a considerable degree if the economy stays at about the same as it is. And then you've got to remember what he's done for agriculture in addition to what might or might not be the end product of the RFS. On the other hand, I'm very positive about what the president feels about the 15 billion gallons because I heard him say it Sept. 12 when we left the Oval Office with an agreement. And I heard him say it two weeks ago today when two of us senators were discussing it with him in the Oval Office. I heard him tell Wheeler it's gotta be 15 billion gallons."

The EPA proposal under development is said to differ from the Sept. 12 agreement, in that EPA proposed accounting for waived gallons based on a U.S. Department of Energy estimate for 2016 to 2018 and not actual gallons waived.

"The president is working very hard to correct this rule," Grassley said.

EPA COMMENT PERIOD CLOSED

The EPA missed the Nov. 30 statutory deadline to finalize the 2020 RFS volumes, as it now considers thousands of public comments submitted on the supplemental proposal to address small-refinery exemptions.

In comments to EPA, Little Sioux Corn Processors, a company that operates a 165-million-gallon ethanol plant in Marcus, Iowa, said there is concern the agency proposal allows for the EPA to require less than 15 billion gallons of ethanol.

"The proposal means nothing until EPA reallocates those lost gallons and sets forth a more transparent and rational process that assures small-refinery exemptions are not abused or granted unnecessarily," the company said.

"Widespread exemptions from the RFS have resulted in significantly lower RIN prices, reduced corn and ethanol demand, avoided legal obligations for highly profitable businesses, and provided windfall profits for certain oil refiners."

The North Dakota Ethanol Producers Association outlined in its comments how the small-refinery exemptions have affected biofuels and agriculture in the state.

"Farmers rely on ethanol production to consume up to half of the country's corn," the group said. "They lose a vital market when plants are shut down or production is restricted. As the agriculture and ethanol economics continue to deteriorate, farmer owners and rural investors are not only losing the near-term return in their businesses, but they are witnessing the long-term investment value decline. The ethanol industry of North Dakota urges EPA to fully implement the Energy Independence and Security Act's commitment to advanced biofuels and to enable market access for all biofuels."

The American Soybean Association said in comments to EPA the latest proposal is harming the potential growth of biodiesel.

"The proposal put forth by EPA ignores the biodiesel industry's capacity for growth, fails to account for the small-refinery exemptions, and directly defies a court ruling that EPA unlawfully waived 500 million gallons," the ASA said.

"The proposal sets the 2021 requirement for biomass-based biodiesel volumes at 2.43 billion gallons, which represents no growth over the 2020 levels. With U.S. soybean farmers shut out of China due to the trade war, we have record carryout of U.S. soybeans. Utilizing the crush capacity and oil utilization domestically would be a win for U.S. soybean farmers and suffering rural communities."

Read comments to EPA here: https://www.regulations.gov/….

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(SK/AG)

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- With a little more than two weeks left before Congress adjourns for the holidays, supporters of the U.S.-Mexico-Canada Agreement know time is slipping away fast, and the trade deal could land right in the middle of presidential politics.

Talks continue in Washington over what it will take for House Democratic leaders to sign off on a deal, but appeasing Democrats is now causing pushback from Mexico.

As Politico reported Tuesday, Mexican officials are now resisting U.S. proposals for supervisors who would ensure Mexico upholds its labor reforms under the trade deal. The Mexican Business Coordinating Council, a major business lobby, is criticizing new labor demands as "extreme in nature and completely unacceptable." The Business Coordinating Council includes banking, agricultural and other business groups.

SUPPORTERS OF AGREEMENT

Supporters in agriculture, such as the group Farmers for Free Trade, keep putting rural Democrats front and center to call for passage of the trade agreement. On Tuesday, former U.S. Agriculture Secretary Tom Vilsack and former Sen. Blanche Lincoln of Arkansas, each reiterated the need to move quickly on USMCA rather than allowing the trade deal to carry into 2020.

"There should be nothing stopping this and working across the aisle to get this done quickly," Lincoln said.

Lincoln pointed out U.S. agricultural exports account for about $20.5 billion in sales to Canada and $18.5 billion to Mexico. USMCA can be a big victory for ag that farmers and ranchers deserve and need, Lincoln said.

"USMCA is a top priority for American agriculture," Lincoln said. "This kind of certainty puts us in the driver's seat to go back and do what they do best. Farmers are watching this debate very closely."

According to an International Trade Commission report last spring, USMCA would add about $68 billion in overall U.S. exports when implemented, including about $2.2 billion in additional agricultural exports.

RISKS OF DRAGGING ON

Lincoln talked about the risks of USMCA talks dragging on. "That would just be devastating, as it would just languish or linger on into this unknown about what was going to happen," she said.

That is essentially what happened with the Trans Pacific Partnership, as resistance built up among presidential candidates as 2016 moved forward. One of President Donald Trump's first actions when he took office in 2017 was to pull the U.S. out of TPP.

On a weekly press call with agriculture reporters, Sen. Charles Grassley, R-Iowa, said "things are very unpredictable" in a presidential year. "But I think you have got to realize what Americans don't want -- Congress playing political games with real-world issues -- and I hope that would encourage the Democratic House to move this as quickly as we can."

Grassley indicated if the House were to get its work done before the end of the year, he was confident the Senate could take up USMCA shortly after Congress returns on Jan. 6 next year.

"If it moved through the House and didn't get through the Senate, next year it's going to be a lot easier for us to get it up in the Senate than what (House Speaker Nancy) Pelosi is going through in the House," Grassley said.

Grassley said that, on the Senate floor, an agreement needed to be reached this week or there wasn't much chance of the trade deal being done this year. "So I stick with that."

Reflecting some of the complexity and uncertainty currently facing trade, in his weekly call with reporters, Grassley took questions about USCMA, the state of trade talks with China, steel and aluminum tariffs against Argentina and Brazil, and tariffs against French goods over France's digital services tax.

TALKS CONTINUE

Grassley said he was optimistic on USMCA largely because talks continue between U.S. Trade Representative Robert Lighthizer and House Democrats. Further, negotiators from Canada and Mexico continue to be engaged as well.

"I want it because Iowans are asking for it," Grassley said of the USMCA. "They need the certainty it would bring, particularly to agriculture," Grassley said.

"It would also be confidence-building for what we are doing in China," and also in England and other trade talks, Grassley added.

Vilsack, on a later call, defended Pelosi's efforts to satisfy labor demands for more enforcement oversight in Mexico.

"In fairness to the speaker, an agreement is only as good as the enforceability, and it appears they are making efforts and making improvements to the enforceability of the agreement," Vilsack said.

FUTURE OPPORTUNITIES

Looking at opportunities going forward, Michelle Jones, a fourth-generation wheat and barley farmer in Montana, joined the call with Lincoln and Vilsack. Jones said the North American Free Trade Agreement has been a major success story for U.S. crops such as barley. Jones highlighted that almost 80% of U.S. barley is malted, then shipped to Mexico to make beer, which is then frequently exported back to the U.S.

"It just highlights how important those integrated supply chains are," Jones said. She added, "Not having a set trade agreement, a long-term trade agreement like NAFTA, or improving it with USMCA, puts a lot of our markets at risk."

Vilsack stressed the trade deal is an improvement over NAFTA, partially because of provisions to periodically review it and change terms of the deal. There are also specific provisions that trigger open access for dairy products to Canada that are restricted now under Canada's supply management program. Canada's class 7 dairy pricing system also has distorted markets, Vilsack said, "And it needs to be changed and eliminated."

Citing USDA figures released last week, Vilsack also pointed out 31% of farm income came from federal payments this year. Farmers want markets, not federal payment, he said, but they also have faced significant market challenges in recent years.

"Farmers are now trying to deal with a challenging economy," Vilsack said. He said dairy prices have increased because of a number of factors, including exports. "But there has still been a lot of pain out there in the countryside, a lot of bankruptcy, a lot of folks making decisions to leave a farming operation that has been in the family for generations. They are looking for a ray of hope. They are looking for a light at the end of the tunnel, and they have placed a lot of faith and a lot of interest and a lot of passion and a lot of hope into passage of USMCA as a signal they are going to have opportunities in these important markets."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/ES)

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- The U.S. Cattlemen's Association is asking the U.S. treasury secretary to conduct a review of Brazil's Marfrig Global Foods increasing its stake in Kansas City, Missouri-based National Beef Packing.

Marfrig announced in mid-November the company would buy the remaining 31% of National Beef, the fourth-largest meatpacker in the U.S. The shares in National Beef had been owned by the investment firm Jefferies Financial Group. Marfrig had already purchased 51% of National Beef from Jefferies and other shareholders in June 2018.

National Beef operates two beef packing plants about 80 miles apart in Kansas. One is in Dodge City and the other is in Liberal. National Beef also owns a packing plant in Tama, Iowa, and operates other case-ready and further-processing plants in Pennsylvania, Georgia, Kansas, Ohio and Missouri.

Marfrig announced the purchase of that 31% of shares from Jefferies is already final.

USCA wrote Treasury Secretary Steven Mnuchin on Wednesday asking him to review the sale under the Committee on Foreign Investment in the United States, known as CFIUS. The committee is made up of members from several federal agencies, and it meets in closed settings to review foreign acquisitions in critical industries involving infrastructure, technology, manufacturing and mining. In recent years, CFIUS has examined multiple major acquisitions in agriculture, but the Treasury Department has not added a representative from USDA and FDA to join the committee for reviews, despite calls from members of Congress.

In its letter, USCA cited work from the Institute for Agriculture and Trade Policy, highlighting that Brazilian meatpackers have benefitted from subsidized loans and other resources from the Brazilian National Development Bank. Marfrig had also settled an agreement with Brazilian prosecutors, paying $28.73 million to cover damages from an earlier bribery investigation.

National Beef did not respond to an email seeking comment.

Marfrig and one of its main Brazilian competitors, JBS S.A., are now two of four of the largest meatpackers in the United States with Cargill and Tyson Foods being the other two U.S.-based competitors.

USCA President Kenny Graner warned of the growing influence of foreign ownership in U.S. agriculture. In an interview, Graner noted a large share of packing capacity is now controlled by Brazil.

"You have these foreign owners buying up a large percentage of our kill capacity here in the U.S.," Graner said. "What is it to them to give back to our rural communities when they just want to take the profits back to Brazil and utilize the exchange rate and become more profitable in their own countries?"

Graner added that President Donald Trump has stressed "America first," but that runs counter to increased foreign ownership, especially when Brazilian beef competes against the U.S. for global exports. "You've got political people in both parties working with these foreign investors, but it's time to put our ag industry first," Graner said. "Let's not allow our industry to be sold off to foreign investors."

If CFIUS were to review the sale, the findings would likely remain undisclosed to the public. CFIUS seldom releases details of its reviews and often releases a single report of its work more than a year afterward.

The chairman and ranking member of the Senate Agriculture Committee wrote Mnuchin in April 2018 to request a CFIUS review of Marfrig's initial majority-stake purchase of National Beef. Three other senators signed the letter at the time. The senators cited earlier purchases of major agricultural companies, stating, "It has become increasingly clear that growing foreign investment in U.S. agriculture requires a thorough review process to safeguard the American food system."

The senators added in the 2018 letter that there were also issues over corruption scandals in Brazil "that revealed unacceptable safety and quality issues with Brazilian beef intended for the American market, including Marfrig."

Read the letter here: https://bit.ly/…

Grassley said Tuesday he did not recall receiving any response from the Treasury Department regarding the letter. Responding to a question from DTN, Grassley also said he does not think CFIUS takes foreign investment in agriculture as seriously as other industries.

"No, but that's probably because the ignorance of agriculture inside the beltway mentality here," Grassley said.

In October, Sens. Robert Menendez, D-N.J., and Marco Rubio, R-Fla., wrote Mnuchin also raising concerns about Brazilian meatpackers and their expansion in the U.S. Menendez and Rubio specifically asked CFIUS to investigate JBS S.A.'s acquisitions in the U.S.

USCA stated the group "believes an investigation into the activities of Marfrig Global Foods is necessary to ensure the safe, affordable and abundant food supply that our nation currently enjoys."

Read the Menendez and Rubio letter here: https://bit.ly/…

On Nov. 17, Marfrig's board of directors unanimously voted to increase Marfrig's ownership interest in National Beef. Marfrig recently announced its third quarter results showing its North American quarterly revenue at just under $2.25 billion and gross income at $374 million for the quarter. Marfrig also recently signed a partnership with ADM to produce more plant-based products.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(BAS/CZ)

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