USDA Reminds Producers to Pay Their Crop Insurance Premiums by January 31

A news release yesterday from USDA’s Risk Management Agency (RMA) stated that, “[RMA] is reminding producers that their crop insurance premiums for the 2019 crop year are due January 31. Under this change, policies that do not have the premium paid by January 31, 2020, will have interest attach on February 1, calculated from the date of the premium billing notice.

“USDA had deferred to January 31, 2020, the accrual of interest on 2019 crop year insurance premiums for most policies with a premium billing date of August 15, 2019, to help the large number of farmers and ranchers affected by extreme weather in 2019.

“‘At USDA, we understood the challenges that farmers and ranchers faced due to inclement weather last year, so we deferred the interest to give producers additional time to pay their premium, which is now due on January 31,’ RMA Administrator Martin Barbre said. ‘We urge producers to make their premium payment on time to ensure they don’t get charged interest back to their premium billing notice date.'”

Yesterday’s update added that, “The extended interest deferral built on other steps taken by USDA to support farmers and ranchers impacted by flooding and other disasters. As of January 13, RMA has paid roughly $8.1 billion in overall claims for the 2019 crop year.”

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FSA Encourages Producers to Enroll Soon in Agriculture Risk Loss and Price Loss Coverage Programs

An update yesterday from USDA’s Farm Service Agency (FSA) stated that, “[FSA] encourages agricultural producers to enroll now in the Agriculture Risk Loss (ARC) and Price Loss Coverage (PLC) programs. March 15, 2020 is the enrollment deadline for the 2019 crop year.

“Although more than 200,000 producers have enrolled to date, FSA anticipates 1.5 million producers will enroll for ARC and PLC. By enrolling soon, producers can beat the rush as the deadline nears.

“‘FSA offices have multiple programs competing for the time and attention of our staff.  Because of the importance and complexities of the ARC and PLC programs; and to ensure we meet your program delivery expectations, please do not wait to start the enrollment process,’ said FSA Administrator Richard Fordyce. ‘I cannot emphasize enough the need to begin the program election and enrollment process now. Please call your FSA county office and make an appointment soon to ensure your elections are made and contracts signed well ahead of the deadlines.'”

Yesterday’s update added that, “For more information on ARC and PLC, download our program fact sheet or our 2014-2018 farm bills comparison fact sheet. Online ARC and PLC election decision tools are available at www.fsa.usda.gov/arc-plc. To enroll, contact your FSA county office for an appointment.”

For additional information on 2018 Farm Bill decision making, see the 2018 Farm Bill Toolbox webpage from the farmdoc team at the University of Illinois.

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Farmers and State Officials Saying the New USDA Rules for Hemp are Too Onerous

DTN Ag Policy Editor Chris Clayton reported earlier this week that, “The Trump administration has built a track record of reducing or eliminating regulations, yet farmers and state officials are saying the new USDA rules for hemp are too onerous and would harm hemp production already happening in their states.

“Complaints are coming in from several states as USDA has extended the comment period for its interim final rule until Jan. 29.

“Kentucky, the first state to submit its regulatory plan for hemp to USDA after the 2018 farm bill was signed, is now being urged by the Kentucky Hemp Industries Association to forego USDA’s rule in 2020 and stick with the rules written under the 2014 pilot plan. Initially reported by a Kentucky business journal, the Kentucky Hemp Industries Association (KYHIA) wrote state Agriculture Commissioner Ryan Quarles last week outlying the association’s concerns about USDA’s rule. The letter states USDA is planning to over-regulate the infant hemp industry.”

Mr. Clayton pointed out that, “The big problem lies with issues in the testing regime for THC, the principal chemical that generates the high in marijuana, and is limited to just .3% in hemp under the farm bill. The Kentucky Hemp Industry Association is concerned that variations in a tiny sampling of THC could cause the entire crop to be destroyed. A one-acre field with as many as 30,000 plants should not be lost because of the test from a single plant, the KYHIA stated. The group wants USDA to conduct some testing on measurements of uncertainty in a hemp crop.”

The DTN article added that, “Kentucky growers aren’t the only ones to weigh in with concerns. The Minneapolis Star-Tribune reported that state officials there ‘are raising alarms’ over the new federal rules and also warning that USDA’s rules could ‘punish farmers for even the slightest errors.’

“Thom Peterson, Minnesota’s Agriculture commissioner, wrote USDA last week stating that the USDA rules are ‘unworkable’ and would put the state’s ‘promising hemp industry in jeopardy,’ the Star-Tribune reported. Minnesota saw the number of growers jump from 51 in 2018 to 550 in 2019, and the number of acres grew to about 8,000, the article stated.”

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France Sees Sharp Increase in Businesses Created, Start-Up Boom

Michael Pooler reported late last month at The Financial Times Online that, “Justine Hutteau embodies the entrepreneurial spirit that France hopes can flourish. Little more than six months since the 25 year-old’s natural deodorant brand went on sale, the business has expanded its workforce from two to 16.

“‘We aim to launch a new product each month,’ said Ms Hutteau, co-founder of the company called Respire. ‘Our vision is to be the number one natural hygiene brand in Europe’.

“As strikes over pension reforms have brought disruption to public transport and put the government of President Emmanuel Macron on a collision course with trade unions, her ambition attests to another force that is playing out in an economy long perceived as lacking dynamism.”

The FT article noted that, “The number of businesses being created has surged since Mr Macron came to power with a pledge to overhaul the economy, reaching almost 809,000 over the past 12 months. This is up 45 per cent compared with the year before the former banker took office in May 2017.

“There have been sharp rises in businesses created in areas such as transport and storage, real estate, manufacturing and business support services, according to data from national statistics agency Insee.

“For some observers, the explosion is connected to government policies to slash red tape, reduce taxes and encourage innovation.”

Mr. Pooler added that, “Among the measures are state financial assistance and special visas for the technology sector to attract talent. In the first half of 2019, French start-ups raised a record €2.79bn, up 43 per cent on the previous year and higher than Germany.

“Beyond an easing of the bureaucracy and high costs that France has traditionally placed on businesses, the trend also points to shifting cultural attitudes towards work and entrepreneurship.”

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Should EPA Consider Petitions to Change the Point of Obligation in the RFS?

Earlier this month, DTN writer Todd Neeley reported that, “Should the EPA consider petitions to change the point of obligation in the Renewable Fuel Standard?

“It’s a question brought before the agency numerous times via petitions but never fully addressed in rulemaking.

“Valero Energy Corp. and the American Fuel and Petrochemical Manufacturers petitioned the United States Supreme Court to consider whether EPA is following the law.”

Mr. Neeley explained that, “Currently, refiners and fuel importers are obligated parties in the RFS. The agency has been petitioned several times to consider instead requiring fuel blenders to follow the RFS.

“In the petition filed with the high court on Dec. 30, the plaintiffs argue the EPA has violated the law by not considering such petitions. The refiners and petroleum groups argue that EPA is required annually to consider specific elements under the RFS, but has refused to look at changes to the point of obligation.

“‘EPA admits that it initially placed the point of obligation on refineries and importers, but not blenders, for reasons of administrative convenience. EPA has repeatedly refused to reexamine that placement in annual rulemaking, and it denied petitions for rulemaking seeking reconsideration outside the statutorily mandated annual assessment,’ the plaintiffs stated in the petition.”

The DTN article noted that, “Shifting the point of obligation to ‘blenders’ has been an ongoing source of friction with refiners. In 2016, a refiner petitioned EPA to shift the point of obligation to owners of the fuel at the rack who pay excise taxes on the fuel. The rack price is the price refiners charge to sell their gasoline to various clients.

“The Renewable Fuels Association notes that shifting the obligation to the blender could ‘exponentially increase the number of obligated parties’ under the RFS, making it far more difficult for EPA to enforce the law.

“Biofuel and petroleum interests have filed numerous lawsuits throughout the years challenging the EPA’s implementation of the RFS.”

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Midcourse Correction for Real Estate and Crowdfunding

Wall Street Journal writer Konrad Putzier reported this week that, “Dan Miller became a pioneer of real-estate crowdfunding about eight years ago by selling stakes in mainstream property such as hotels, apartment buildings and offices to small-time investors via the internet.

“Today, he is focused on property with an environmental bent, backing urban farms in Detroit and a grain and dairy farm in Pennsylvania’s Amish country.

His new approach reflects a broader midcourse correction for real estate and crowdfunding, the practice of financing a project by raising small amounts of money from a large number of people.”

The Journal article explained that, “Several of the original crowdfunding firms in real estate have gone out of business, or overhauled their strategies.

“Some, like Mr. Miller, switched to focus on assets that appeal to socially and environmentally conscious investors. After leaving Fundrise, the real-estate crowdfunding company he co-founded in 2012, he recently launched Steward, which invests in sustainable farms.

“Others are tinkering with the way money is raised. Fundrise, run by Mr. Miller’s brother Ben Miller, today manages pooled investment funds that take advantage of crowdfunding laws.”

Mr. Putzier stated that, “Starting in 2012, crowdfunding startups sold stakes as small as a few thousand dollars in commercial property. New regulations paved the way for real-estate investment firms to raise money across the country through Facebook ads and other social media. Proponents thought a tactic that could raise large sums while lowering marketing costs would transform real-estate investing the way Airbnb changed hospitality or Amazon changed retail.

But as the economy rebounded, more money flooded into real estate and developers suddenly had plenty of cheap funding choices. That often left crowdfunding firms with riskier, less-appealing projects that couldn’t get money elsewhere—a tough sell to investors.”

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American M&A Rose in 2019, as European and Asian Transactions Declined

Arash Massoudi, James Fontanella-Khan and Eric Platt reported late last month at The Financial Times Online that, “Dealmakers outside the US cast an envious eye towards their American counterparts in 2019. As cross-border mergers and acquisitions plummeted to their lowest level since 2013, US companies struck big transactions at home, accounting for 15 out of the year’s biggest 20 deals.

Nearly half of the $3.9tn in global M&A recorded this year involved US targets — a 6 per cent rise from a year ago, according to data provider Refinitiv. The boom in the US contrasted with lacklustre dealmaking in European and Asian markets, which recorded $742bn and $757bn respectively in total acquisition value, a 25 per cent decline for Europe and a 16 per cent drop for Asia.

The US activity was enough to power global M&A to its fourth-highest level on record. The deals were broad-based, spanning transformative pharmaceutical acquisitions like Bristol-Myers Squibb’s $93bn purchase of rival drugmaker Celgene and AbbVie’s buyout of Allergan for $84bn, and industrial tie-ups such as United Technologies’ $90bn deal to buy Raytheon.”

The FT writers pointed out that, “Deals greater than $10bn increased 28 per cent in value compared with last year, helping to boost volumes. The spike in so-called megadeals helped make up for a significant drop in the overall number of transactions, which were down 6 per cent. Acquisitions of companies worth between $1bn and $5bn dropped 13 per cent.”

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EPA, Corps of Engineers Face Third Lawsuit on WOTUS Rule

DTN writer Todd Neeley reported today that, “Fourteen states, the city of New York and the District of Columbia have asked a federal court to vacate the latest EPA and U.S. Army Corps of Engineers action on the waters of the United States, or WOTUS, rule and apply a significant nexus test when regulating waters across the country.

“A new federal lawsuit alleges the agencies failed to follow the Administrative Procedure Act when completing a rule that resets the WOTUS rule back from the 2015 version to the 1986 version while the agencies work on a rewrite.

“One of the hallmarks of the 2015 WOTUS rule was the use of a significant nexus test when determining jurisdictional waters. That is, non-traditionally navigable waters such as headwater streams and some wetlands are protected if they significantly affect the integrity of traditional navigable waters.”

Mr. Neeley noted that, “Justice Anthony Kennedy’s opinion in the 2008 Rapanos v. United States U.S. Supreme Court case essentially established a significant nexus standard.”

“The plaintiffs in the new lawsuit argue the agencies have the science to support the significant nexus standard,” the DTN article said; adding that, “The new lawsuit filed in the U.S. District Court for the Southern District of New York argues the agencies should be required to apply the significant nexus test instead of reverting back to the 1986 rule, which predates the Supreme Court cases.”

“The latest lawsuit is the third such action filed since the agencies finalized the new WOTUS rule that temporarily uses the 1986 definition of waters,” Mr. Neeley said.

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Plant-Based Food Makers Are Targeting Pork

Wall Street Journal writers Jacob Bunge and Heather Haddon reported this week that, “After biting into the U.S. burger business, plant-based food makers are targeting pork.

“Impossible Foods Inc. said Monday that it will introduce imitation ground pork and sausage, including a patty for a new sandwich at dozens of Burger King restaurants later this month. Rival Beyond Meat Inc. last year began supplying plant-based sausage to Dunkin’ Brands Group Inc.,  Carl’s Jr. and Tim Hortons restaurants, mainly for breakfast sandwiches.

“Impossible, Beyond and other meat-alternative developers say their products spare livestock and are better for the environment than meat because they require less grain, water and fuel to produce. The companies first worked on beef because they said it is one of the most environmentally intensive meats to produce. Pork is the world’s most widely consumed meat, according to the U.S. Agriculture Department. Plant-based food makers are also developing chicken and seafood alternatives.”

The Journal writers noted that, “Meat-free burgers, sausages and nuggets represent a fraction of overall meat consumption. But their sales are growing much faster than those of traditional meat. Cases of plant-based proteins shipped to commercial restaurants from broadline food distributors increased by 23% in the year ending in November, according to market-research firm NPD Group. Restaurants say the products have helped boost traffic and buzz.

That growth has drawn pushback from livestock producers. Farm groups have urged regulators to block the use of words like ‘meat’ and ‘pork’ to describe plant-based imitations, arguing that consumers could be misled about their contents.”

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Online Consumer-Products Startups Finding Success Depends on Getting on Shelves

Last month, Wall Street Journal writer Sharon Terlep reported that, “American shoppers will buy almost anything online. But when it comes to household mainstays, from razors to tampons, the old-fashioned store still beckons.

That reality is hitting some of the world’s biggest consumer-products companies, which collectively have invested billions of dollars in startups in recent years that sold directly to consumers. Meanwhile, upstart brands are finding they must move into stores to compete outside of niche territory—for at least two reasons, executives and analysts say. Big retailers can give brands critical visibility, and consumers generally prefer buying household staples in a single shopping trip to enrolling in many subscription services.

More than three years after Unilever PLC, the European giant behind Dove soap and Axe body sprays, paid $1 billion to buy Dollar Shave Club, the razor subscription service still isn’t making money, according to people familiar with the matter.”

The Journal article noted that, “Dozens of online consumer-products startups are finding their success depends on getting on shelves of Walmart Inc., Target Corp. and other traditional retailers. Even some celebrity-fueled startups have made the shift. Kylie Jenner’s cosmetics brand, which recently sold a $600 million stake to Coty Inc., started selling in Ulta Beauty Inc. stores last year, although it didn’t cite a reason for the move.”

Ms. Terlep added that, “Some companies that sell online say demand is rising, and many brands that have moved into retail are increasing sales online as well. In addition to getting on store shelves, they are investing in TV and print advertising, finding they can’t rely on social-media marketing alone.

“Online sales accounted for roughly 15% of the $3.7 trillion in U.S. retail spending last year, according to the National Retail Federation. Where overall retail spending rose 4.6% from the year earlier, online spending grew by more than 10%.”

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