READ the NAFB’s National Ag News for Wednesday, March 1st…

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READ the NAFB’s National Ag News for Wednesday, March 1st

Potential Deal to Change the Renewable Fuels Standard

A Bloomberg Report says billionaire investor Carl Icahn (Eye’-kahn) and a leading biofuels group have put together an agreement for the Trump administration to revamp the Renewable Fuels Standard. People familiar with the agreement told Bloomberg it would give both parties long sought after changes to the RFS. The groups have sent a memorandum to the White House which could give guidance on how the Environmental Protection Agency could implement the changes. Icahn is a majority owner in CVR Energy, who has long pushed for shifting the burden of complying with biofuel quotas from refiners to blenders. Refiners have now won agreement from the Renewable Fuels Association regarding shifting the point of obligation. The RFA now supports the idea in return for a pledge regarding a waiver allowing gasoline blends with 15 percent ethanol to be sold year-round in U.S. markets. “I was told in no uncertain terms the point of obligation is going to be moved,” said RFA Chief Bob Dineen, “and I wanted to see one of our top priorities moved as well.” The waiver granting year-round access to E-15 would “greatly expand market opportunities for ethanol, and I think that’s a darn good thing for our industry.”

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Growth Energy Denounces Efforts to Rewrite RFS

Growth Energy condemed the effort of Carl Icahn (Eye’-kahn), the owner of CVR Refining, to strike a backroom deal with the Renewable Fuels Association that would change the Renewable Fuels Standard by shifting the point of obligation from refiners to fuel retailers. Emily Skor, CEO of Growth Energy, said, “If this is true, this proposal would undo all of America’s progress under the RFS and impose massive costs on consumers.” She says both sides in that “deal” don’t have the authority to come to an agreement. “Mr. Icahn doesn’t work for the government, but instead owns CVR Refining, which would profit directly from such a deal. The RFA also doesn’t represent a majority in the biofuels industry. Their largest member is a refiner that would also profit from the deal,” Skor said. She says both of those companies are negotiating for the same side, which Skor says isn’t the American farmer or the ethanol industry. “In exchange for his company getting a waiver from its responsibility,” Skor said, “Mr. Icahn promised support for a Reid Vapor Pressure (RVP) waiver from the Environmental Protection Agency. That’s a change that already has strong bipartisan support as a common sense solution to increase summer sales of higher ethanol blends.” However, a Twitter post from Amy Harder of the Wall Street Journal said the White House denies those comments by Dineen, as a White House Spokewoman says no executive order on ethanol exists.

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Starling Appointed Special Assistant to Trump for Ag

The Trump White House appointed Ray Starling to the position of Special Assistant to the President for Agriculture, Trade, and Food Aid, a move hailed by multiple Ag groups as a positive. Starling was most recently an aid to North Carolina Republican Senator Thom Tillis. Starling’s appointment fills a position left mostly vacant during the Obama Administration. A National Pork Producer’s Council release called Starling a “true champion for American Agriculture,” adding that his appointment signals a clear intention by the Trump Administration to undo some of the unnecessary regulations that are making it hard for pork producers and all American farmers to do their jobs. The special assistant position is part of the National Economic Council and Farm Bureau President Zippy Duvall said Starling is a great choice. “Mr. Starling not only knows agriculture from his farm background, he’s also an accomplished Ag policy specialist. We look forward to working with him as he advises the president,” Duvall said. The National Cattlemen’s Beef Association and the National Cotton Council also issued releases praising Starling as a good addition to the National Economic Council.

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Farm Sector Working Capital to Decrease in 2017

Farm financial liquidity describes how easily members of the farm sector can convert assets to cash in order to meet short term debt obligations. One measure of liquidity is working capital, which is the difference between current assets like cash and inventory, and short term debt. Higher working capital means much better financial health for the farm sector. The USDA Economic Research Service expects working capital to shrink to $48 billion by the end of this year. The lower amount of working capital is a result of a reduction in assets values ($87 billion lower since 2012), and growing current debt, which is up $30 billion since 2012. Even though working capital is lower since the ERS started tracking it in 2012, the decline followed record highs in net cash farm income from 2011 to 2013. Farm solvency ratios measure whether debt can be met in a timely manner, and the current ratio is favorable compared to the last 25 years. But solvency has been weakening over the last five years, and combined with lower working capital, reflects a modest increase in risk across the farm sector.   

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Trump Signs Executive Order to Eliminate WOTUS

President Donald Trump signed an executive order today (Tuesday) to do away with the Waters of the U.S. Rule. The American Farm Bureau called it a welcome relief to farmers and ranchers across the country. “The flawed WOTUS rule has proven to be nothing more than a federal land grab,” says Farm Bureau President Zippy Duvall, “aimed at telling farmers and ranchers how to run their business. The Environmental Protection Agency failed to listen to farmers and ranchers when they drafted the rule and caused widespread confusion for agriculture.” However, Politico’s Morning Agriculture Report points out that the executive order may not have a big effect right away. An appeals court put WOTUS on hold while legal challenges are played out. Also, actually withdrawing the rule would require the agency to go through the formal rulemaking process once again. That includes another proposal, notice, and comment period, and then a final rule. Environmental groups still support the rule and would certainly mount a legal challenge against getting rid of the WOTUS rule.

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Feed Industry Welcomes New Secretary of Commerce

The American Feed Industry Association welcomes Wilbur Ross as the new Secretary of Commerce in the Trump Administration. AFIA announced its intention to work closely with the Department of Commerce moving forward on things like trade efforts, including animal food, which fall under the Department’s authority. The association will also support the new Secretary in the promotion and enforcement of laws regarding fair trade and open markets for U.S. commerce. “International trade offers the greatest potential for the U.S. animal food industry’s future growth,” says AFIA President and CEO Joel Newman. “In 2016, our industry’s exports exceeded $11 billion in feed, feed ingredients, and pet food. It’s important for Secretary Ross to understand that overseas markets are the key for continued development and success of the U.S. feed industry.” The association says it looks forward to working with Secretary Ross, and the secretary of agriculture, to ensure the international trade needs, concerns and interests of the U.S. feed industry are represented and taken into consideration in broader administrative trade policy strategies led by the Commerce Department.

SOURCE: NAFB News Service

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