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ASFMRA Ag News - November 9, 2021

By ASFMRA Press posted 11-09-2021 10:57 AM


Challenges in Setting Land Rental Rates for 2022

Arriving at equitable land rental rates is always an ongoing challenge for farm operators and landlords alike and will likely be an even bigger challenge for the 2022 growing season.

Many times, land rental rates for a coming crop year are based on the profitability in crop production in the previous year or two before. In some cases, this can present profitability challenges for farm operators, if grain prices drop or there are yield challenges. On the other hand, there can be extra profit for farm operators in years with above average yields and higher levels of crop prices. Many landlords reduced land rental rates from 2015-2018 and would like to return to higher rates.

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Supply Chain Delays Disrupt California Agriculture Exports

Amid an historic drought posing threats to future harvests, California farmers now say they have no way to export the crops they do have because of a kink in the global supply chain that has left container ships lined up off the Southern California coast with nowhere to deliver their goods.

Problems with the supply chain have retailers worried their shelves — and their customers’ online shopping carts — will be empty during the crucial holiday shopping season, prompting emergency actions from state and federal leaders to clear up the logjam.

But the backlog of ships entering U.S. waters also means there are fewer making the trek back across the Pacific Ocean, leaving the farmers in one of the nation’s most important agriculture regions with nowhere to send their products.

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As-Needed Pesticide Use Brings Wild Bees, Increases Watermelon Yield Without Reducing Corn Profits

Many farmers rent bee hives to pollinate crops, but they could tap into the free labor of wild bees by adopting an as-needed approach to pesticides, a new proof-of-concept study shows.

A multiyear study of commercial-scale fields in the Midwest found this approach led to a 95% reduction in pesticide applications, while maintaining or increasing crop yield for corn and watermelon. The findings are detailed in a paper published in the Proceedings of the National Academy of Sciences.

“An as-needed approach to pesticide treatment can benefit farmers,” said Ian Kaplan, professor of entomology at Purdue University, who led the project. “With reduced pesticide use, we saw within the first year wild bees returned to the fields, and our findings showed an average 26% increase in watermelon yield.”

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Research and Development Tax Credit

Farmers are always looking for ways to keep more money in their pocket at tax time. The Research and Development tax credit is a little-known tool that could help you do just that. It rewards businesses for innovation that is only required to be new to them, not new to the world.

Julie Spiegel is a certified public accountant for Varney and Associates of Manhattan, Kansas. She says the tax credit has predominantly been used by manufacturing companies, but its broad focus also applies to agriculture and farming.

"It could be improved processes to increase your yields and production efficiency. That could be as simple as experimenting with new fertilizers, planting cover crops, planting disease-resistant crops," says Varney. "On the rancher side of things, it could be experimenting with new feeds or feeding techniques for your livestock. For the hog operations, it could be improving facilities for environmental and biosecurity reasons."

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McDonald’s USA Commits $5 Million to Implement Climate-Smart Farming Solutions

AgMission, a global collaboration to reduce greenhouse gas (GHG) emissions in agriculture, announced today that McDonald’s USA has partnered to develop and implement climate-smart farming solutions with a $5 million commitment over the next five years.

The Foundation for Food & Agriculture Research (FFAR), the U.S. Farmers & Ranchers Alliance (USFRA), and the World Farmers’ Organisation (WFO) established AgMission to unlock agriculture’s potential to reduce GHG emissions. This initiative ultimately aims to make the agriculture sector net negative for GHG emissions. To achieve this goal, AgMission brings farmers, ranchers, and scientists together to co-create science-based solutions that can be rapidly deployed, increasing on-farm resiliency while mitigating the impacts of climate change, say AgMission officials.

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$240 million Sandow Lakes Ranch sold in Rockdale, Texas

Alcoa Corporation announced Nov. 1 it has completed the sale of land and industrial assets in the state of Texas in a transaction valued at $240 million.

The sale included approximately 31,000 acres in Milam and Lee counties and was marketed as the Sandow Lakes Ranch, which includes the site of the former Rockdale aluminum smelter. The Rockdale smelter was fully curtailed in 2008 and was permanently closed in 2017.

The transaction, which was completed on Oct. 29, predominantly included highly improved pasture and agricultural property and industrial assets. The buyer is SLR Property I, LP, an affiliate of a private, Texas-based real estate investment entity.

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ASFMRA Government Relations Update

Bipartisan Infrastructure Bill Moves to President for Signature

Democrats in the House reached an agreement to allow the bipartisan infrastructure bill to move forward while promising to support the Build Back Better bill next week if the Congressional Budget Office (CBO) determines that its offsets (largely tax increases) pay for the additional spending in the bill. Both the House and Senate are in recess this week.

The vote 228-206 included 13 Republicans voting for passage and 6 Democrats voting no. The bill now moves to President Biden for his signature, and he plans to hold a public signing ceremony with the bill’s authors this week. The infrastructure bill totals nearly $1 trillion in spending composed of $550 million in new spending and the remainder funding that is normally allotted each year for highways and other projects.

USDA Secretary Vilsack released a statement following passage which included, in part: “This is a tremendous opportunity to build up rural America with wealth that stays in rural communities, jobs you can raise a middle-class family on, and the ability to compete around the world. I’m thankful to those in Congress who drove this bipartisan legislation over the finish line, and to President Biden for his leadership for America’s working families. Now, let’s get to work and see to it that the benefits of modern infrastructure reach every corner of country.”

OHSHA Releases Workplace Requirements for COVID

The Occupational Safety and Health Administration (OSHA) issued an emergency temporary standard (ETS) in the form of an interim final rule last week. The stated purpose of the ETS is to protect unvaccinated employees of large employers (100 or more employees) from the risk of contracting COVID-19 by encouraging vaccination. Employers with 100 or more employees must develop, implement, and enforce a mandatory COVID-19 vaccination policy, with an exception for employers that instead adopt a policy requiring employees to either get vaccinated or elect to undergo regular COVID-19 testing and wear a face covering at work in lieu of vaccination.

White House Unveils Framework for Build Back Better Deal

On October 28th President Biden released a framework that is intended to bring the various factions within the Democrat party together to pass the Build Back Better bill, also known as the “human infrastructure” or “budget reconciliation” bill, in both the House and Senate. The framework would spend $1.75 billion, (see link above for details), with offsets to pay for the bill, largely tax increases on millionaires and corporations.

Agriculture Provisions in Build Back Better Framework

The details, and legislative language, for the agriculture title of Build Back Better framework have been released. Senator Stabenow (D-MI) has also released a summary of the provisions. The bill includes over $90 billion for climate smart agriculture, forestry, rural development, research, child nutrition and debt relief. The provisions could be changed as Democrats still negotiate, but I suspect the agriculture provisions are close to final in this release.

Only one provision in the entire agriculture section touches on crop insurance and it does so in a peripheral way. No provisions impact the commodity title. In the bill, the conservation subtitle provides the Secretary of Agriculture the authority to make $25 per acre payments for crop years 2022 though 2026 to producers who establish a cover crop practice. The payments are limited per producer to no more than 1,000 acres. It also provides authority to the Secretary to make $5 per acre payments for crop years 2022 through 2026 to landowners who establish a cover crop practice with the same limit at 1,000 acres. A producer/ landowner cannot collect both payments, so the $5 payment is targeted to landowners who rent their land.

The crop insurance related provision provides for a prevented plant payment to a producer if the producer adopts a cover crop practice and purchases insurance and is unable to plant the insured crop because of management decisions with the cover crop. This payment is not made by the private insurance companies, but by USDA. The provision is a kind of backstop to hold the farmer and the insurers harmless if a significant increase in cover crop acres results from the $25 per acre payments and leads to unanticipated problems.