READ the NAFB’s National Ag News for Wednesday, December 27th

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READ the NAFB’s National Ag News for Wednesday, December 27th

Cruz Proposal Could Harm Renewable Fuels

Texas Senator Ted Cruz made a recent proposal to cap the cost of Renewable Identification Numbers (RINs) as a way to control the cost for refiners that blend renewable fuels into the nation’s gasoline supply. A DTN report says capping the cost of RINs at ten cents each would basically all but eliminate the Renewable Fuels Standard mandate for biodiesel and would likely hurt the nation’s ethanol industry. That analysis comes from farmdoc at the University of Illinois. The Department of Agricultural and Consumer Economics at the University of Illinois also says the cap would likely violate the U.S. Environmental Protection Agency’s RFS Waiver Authority as well. Farmdoc says any biodiesel price below $2.64 a gallon would lead to no biodiesel blending, making a ten-cent cap unfeasible. Additionally, a ten-cent cap would be like waiving the biomass-based diesel mandate down to zero and would push the ethanol mandate back down to the E-10 blend wall level. Cruz offered the proposal on behalf of oil refiners, which prompted the ethanol industry to send a letter to the Trump Administration to educate them on how RINs work. RINs are generated when a qualifying renewable fuel is produced domestically or imported. A refinery then buys RINs when it’s not producing or buying enough biofuels to meet its blending obligations.

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Farmland Values Still High Despite Low Commodity Prices

Industry experts are scratching their heads over the relatively high price of farmland while commodity prices are still low. The two factors often have a strong correlation between each other. Farm Futures Dot Com quotes Steve Bruere (Brewer), President of the land-brokerage firm Peoples Co. of Iowa as saying, “Strong farmland values defy logic in a lot of ways.” He says the fact that there aren’t a lot of farms for sale may be at least partially responsible for keeping prices high. As of November, there were only 150 farms for sale in Iowa, which is considered a low number, less than two farms per county. Randy Dickhut, a senior vice president with Farmers National Co., says, “Farmland values have dropped in many areas but not as far as some think they could.” He says it would take a “perfect storm” of circumstances for prices to head lower, including crop insurance adjustments, negative changes to tax policy, and mishandled trade policy opportunities. For now, he says drastically lower prices are not likely to happen anytime soon. “We’ve seen mostly stable prices so far,” Dickhut adds, “and there’s interest in buying land out there with a relatively low supply.” He did say that low commodity prices may continue to apply short-term pressure to land prices.

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Beef and Pork Production Hit Record High Numbers

The U.S. Department of Agriculture says domestic red meat, beef, and pork production all hit new monthly highs in November. In fact, for the first 11 months of 2017, red meat production is three percent ahead of last year’s record pace, totaling 47.571 billion pounds so far this year. Year-to-year beef production is four percent higher and pork production is three percent higher than last year. Beef production was at 2.29 billion pounds in November, two percent higher than November of 2016. A three percent increase in November slaughter to 2.761 million head canceled out an 11-pound decrease in the average live-weight to 1,373 per head. November pork production totaled 2.245 billion pounds, a slight increase this year. The November kill decreased one percent to 10.55 million head and the average live-weight was three pounds higher than last year, coming in at 286 pounds. Overall, November red meat production was one percent higher than last year at 4.535 billion pounds.

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Lower Milk Prices in 2018?

As America’s dairy farmers look to 2018, they’re wondering whether or not higher prices are on the horizon. A Dairy Herd Dot Com article says a massive herd, large domestic supply, falling domestic demand, and a strong dollar all show that prices may slip before they improve. Mike North of Commodity Risk Management says there’s a growing supply of product across the board as we enter the time of year when dairy consumption typically drops. North adds, “We’re continuing to make product that’s adding to an already large supply, so there’s a massive collision of increased supply and declining demand.” Scott Brown of the University of Missouri says it’s not just domestic oversupply that’s causing challenges, but global milk supplies are continuing to increase as well. The National Milk Producers Federation and the International Dairy Foods Association are looking for creative ways to help stimulate domestic demand for dairy in an attempt to eat through some of the excess supply. “One of the things we’re looking at,” says Michael Dykes of the IDFA, “is can we do something with the Supplemental Nutrition Assistance Program to incentivize dairy consumption.”

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Grain Sorghum Is Now an Advanced Biofuel

The Environmental Protection Agency recently released a Notice of Proposed Rulemaking regarding sorghum and advanced biofuels. Growth Energy says the release had to do with the life-cycle Greenhouse Gas Emissions associated with biofuels that are produced from grain sorghum oil extracted at dry-mill ethanol plants. The agency says in evaluating the product, the GHG emissions of producing biofuels from distillers’ sorghum oil results in no significant upstream agricultural GHG emissions. That means biofuels produced from sorghum oil would meet the GHG-emissions reduction threshold required for advanced biofuels and biomass-based biodiesel under the Renewable Fuels Standard Program. Growth Energy CEO Emily Skor says this is great news for a lot of ethanol producers who use grain sorghum as a feedstock because it opens up a valuable additional market for one of their more important co-products. “Our industry has a history of leading innovation in the production of clean, renewable fuel, and in creating value for associated co-products,” Skor adds. “This is an exciting step for producers who are poised to provide more homegrown fuels to America.”

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FAA Sues Farmer Over Irrigation Rigs

Federal authorities have filed a lawsuit against a Georgia farmer because they allege the farmer’s massive metal crop-irrigation rig is causing radio interference. An ABC News report says the irrigation unit is on a farm in south Georgia where the Federal Aviation Administration has a radio tower that relays signals to keep aircraft on course. The lawsuit alleges that radio interference from the 1,200-foot structure caused the FAA to shut down the transmitter in February, which affected operations at nine different airports. The government’s complaint alleges that the transmitter is in close proximity to Robins Air Force Base, making the situation even more serious. The lawsuit warns that flight integrity has been compromised. The government isn’t accusing the irrigation unit of actually transmitting a signal, but instead is degrading the FAA radio signal. Three men were identified as landowners and are listed as defendants. They couldn’t immediately be reached for comment by ABC News on Friday. The U.S. Attorney’s Office is seeking an immediate court injunction and an order telling the farmers to move the unit. 

SOURCE: NAFB News Service

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