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ASFMRA Ag News - September 12, 2023

By ASFMRA Press posted 17 days ago


Summit Carbon Solutions Denied Permit for Carbon Dioxide Pipeline

South Dakota's Public Utilities Commission on Monday denied a permit application from Iowa-based Summit Carbon Solutions to build 495 miles of pipeline through the state to transport captured carbon dioxide from ethanol plants to an underground storage site.

The three-member commission voted unanimously to deny the company's application on what was set to be the first day of three weeks of evidentiary hearings on the project. Summit said in a statement that it respects the commission's decision and plans to refine and refile its application.

On Friday, the PUC's staff recommended in a filing that the commission reject the application because the project would violate county ordinances related to setbacks and other aspects of the pipeline route.

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Sell or Repurpose? Washington County Commission Mulls Future of County Farm

It was the final operating “poor farm” in Tennessee when its last residents moved about 15 years ago. Now, Washington County commissioners are trying to determine whether there’s a viable future for the 47-acre County Farm off of Couch Road, or whether selling the mix of pasture and woodland will best serve county taxpayers and residents.

“We’ve looked at that property a number of times and sort of debated about what would be the best thing we can do,” County Commissioner Jodi Jones said Thursday ahead of a County Owned Property Committee meeting to discuss the farm’s future.

“We have three options. We can auction it and let somebody else decide what to do with it, we can donate it or we can keep it as a county-owned property and find a use for it that serves the county.”

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In Fire-Stricken Maui, Sustainable Land Management Is Key

Surveying the aftermath of the Kula Upcountry Fire—one of three devastating wildfires that raged across Maui last month—Brendan Balthazar noticed a striking pattern emerge across his cattle ranch. Peppered throughout some 500 acres of charred pastureland, he found sizable patches of grass left unscathed by the blaze.

“The fire burned right around them,” says the 73-year old rancher and owner of Diamond B Ranch, noting the intact areas—some as big as a quarter acre. “It’s all grazed pasture,” he says, spared “because the fuel load was low.”

But elsewhere, fields of fire-prone grasses had made conditions ripe for combustion, says Balthazar. Introduced to the islands decades ago as livestock forage, invasive vegetation such as Guinea grass and buffelgrass proliferate in the islands, largely on unmanaged agricultural land. And with the state in prolonged drought, the dense, often chest-high growth has turned vast swaths of land, he says, into “one tinder box.”

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Farmers Say Carbon Contracts Ought to Pay More

The small portion — 2% — of corn and soybean farmers who have signed carbon contracts said they were ready, if required, to change their production practices to earn the money, according to a Purdue University poll on Tuesday. Most growers said the payment rates were too low to entice them.

“Interest about usage of carbon contracts in row-crop agriculture remains high,” said Purdue’s Ag Economy Barometer, based on a monthly survey of 400 large-scale producers. Six percent of corn and soybean growers said they have discussed carbon payments with vendors, and 2 percent signed a contract. Companies typically offered $20 or less per tonne of carbon captured. Nearly six of every 10 growers said they wanted at least $30 an acre.

Corn and soybean growers unanimously said they already planned to adopt the practices required by the contract that they signed. Three out of every five said their contract mandated changes in production practices.

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Factors Impacting Succession Planning

Succession plans ensure continuation of the farm business.  Without succession plans, the next generation is left in limbo, unsure of how to split the farm, and may be forced to sell because an agreement can’t be reached.  Guilt often overcomes those who would like to continue farming, but are unable to follow in the footsteps of preceding generations.  While an entitled mentality may drive other family members to make it difficult or impossible for the family farm business to continue operating.  These disagreements can drive families apart, leaving all involved with soured opinions of relatives they have known their whole lives.

A solution to this is well within reach.  If time is devoted to creating succession plans and review is done regularly, farms can continue doing what they do best without these looming uncertainties.  This article explores key factors associated with farms which have developed written succession plans.  Specifically, we examine the relationship between written succession plans and farm characteristics such as farm growth, farm demographics, management practices, and resilience to strategic risk.  Results presented and discussed in this article were derived from a survey of 403 U.S. producers conducted in April 2023.  An earlier article used survey results to discuss resilience to strategic risk (Lippsmeyer et al., 2023).  With this article we hope to encourage farms to create or review their succession plans.

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ASFMRA Government Relations Update

Senate to Consider FY 2024 Appropriations Bills 

The Senate returned to Washington D.C. last week. The House returns this week. As the Federal fiscal year winds down, the Democrat lead Senate and Republican lead House are moving to strengthen their negotiating positions going into the end of the Fiscal Year.  None of the 12 appropriations bills have been completed. To avoid a government shutdown Congress will have to enact a Continuing Resolution (CR). Additionally, the Biden Administration has submitted a supplemental funding request which includes funding for Ukraine, which some House Republicans do not support.

The Senate this week is set to consider a bill that combines 3 appropriations bills into a “minibus.” The 3 bills are Agriculture, Military Construction and Veterans Affairs and the Transportation, Housing and Urban Development bill. A cloture vote (end debate) is anticipated and then Senate consideration could last upwards of two weeks. If the Senate can pass the minibus before the end of September, it would strengthen its negotiating position with the House as they consider a necessary Continuing Resolution (CR). So far there are no anti-commodity, crop insurance or conservation program amendments filed. 

On the House side, House Leadership plans to consider the Defense appropriations bill this week to strengthen its negotiating hand going into the end of the fiscal year. Recall at the end of July before the start of the August recess the House did not consider the FY 2024 Agriculture Appropriations bill on the floor. It may do so yet this month, but it isn’t currently on the schedule. 

USDA Forecasts Fall in Farm Income

The Economic Research Service (ERS) forecasts net farm income in 2023 to decrease by $41.7 billion (22.8 percent) from 2022 to $141.3 billion.  Net farm income reached a record high of $183.0 billion in calendar year 2022. The projected decline is a result of lower commodity and livestock receipts, lower government payments, and higher input costs.

The American Farm Bureau Federation (AFBF) provided its analysis of the USDA projections, noting the high degree of uncertainty of the forecast.

The Senate Agriculture Committee Minority staff also opined on the USDA forecast in its blog. Senator Boozman’s staff used the USDA forecast to make the case that Congress must invest in a meaningful and enhanced farm safety net and suite of risk management tools when reauthorizing the farm bill given the headwinds facing the farm economy.

Environmental Working Group Attacks Reference Prices

Hoping to stoke a regional conflict going into the farm bill, the Environmental Working Group (EWG) released a blog criticizing lawmakers and producers calling for an increase in reference prices.  According to EWG’s the bulk of any Price Loss Coverage (PLC) payments go to growers of cotton, peanuts, and rice. Most of the farms that benefit from increasing the price guarantees in the PLC program are in just 48 congressional districts, pointing out that most of those districts are in the South. The House and Senate Agriculture Committees will not fall for this specious analysis, but some lawmakers not on the Committee may, which could in harmful amendments once the farm bill is under floor consideration.

USDA Announces Milk Loss Program to Compensate for Disasters, Milk Dumping

The Farm Service Agency (FSA) announced plans for compensation to dairy producers for 2020, 2021, and 2022 milk losses. The Milk Loss Program will provide payments to eligible dairy operations for milk that was dumped or removed without compensation from the commercial milk market due to disaster events including droughts, wildfires, hurricanes, floods, derechos, excessive heat, winter storms, freeze (including a polar vortex), and smoke exposure that occurred in the 2020, 2021, and 2022 calendar years. The deadline to apply for the Milk Loss Program is October 16, 2023. 

RMA Announces Changes to Whole Farm and Micro Farm Policies

The Risk Management Agency (RMA) announced that it is improving crop insurance options for small and diversified farmers through improvements to the Whole-Farm Revenue Protection (WRFP) and Micro Farm insurance plans. Starting with the 2024 policy year the improvements include:

Improvements to WFRP:

  • Allowing all eligible producers to qualify for 80% and 85% coverage levels.
  • Allowing producers to purchase catastrophic coverage level policies for individual crops with WFRP.
  • Expanding yield history to a 10-year maximum (from 4 years) for all crops not covered by another federal crop insurance policy.
  • Making the policy more affordable for single commodity producers.
  • Allowing producers to customize their coverage by choosing whether WFRP will consider other federal crop insurance policies as primary insurance when calculating premium and revenue to count during claim time.

Improvements to Micro Farm:

  • Moving the sales closing date to a less busy time of year to help agents dedicate time to marketing the program. This is important specifically for producers that are purchasing Micro Farm for the first time as it provides additional time for agents to assist growers with important risk management decisions.
  • Allowing producers to purchase other Federal crop insurance with Micro Farm.
  • Allowing vertically integrated entities to be eligible for Micro Farm.
  • Making the Expanding Operations feature available with Micro Farm.