USDA- RMA Announces a New Coverage Option for Crop Insurance

A news release yesterday from USDA’s Risk Management Agency (RMA) stated that, “Farmers now have a low-cost option for insuring small parcels of land in one county by combining them into a single enterprise unit with land in a neighboring county under their crop insurance. The [RMA] is offering the new endorsement known as the Multi-County Enterprise Unit for farmers interested in covering two counties in the same state under their crop insurance policy.

“‘Today’s farmers and ranchers face tremendous challenges. Access to affordable, flexible crop insurance options shouldn’t be one of them.’ said RMA Administrator Martin Barbre. ‘This simple policy change will help producers manage their overall production risk by combining acreage into a larger unit, which could also lead to lower insurance premiums for policyholders. It’s a win-win.’

“The endorsement is available for spring crops with a November 30, 2018, and later contract change date. Initially targeted crops include coarse grains (corn, grain sorghum, soybeans), cotton, canola, peanuts, rice, small grains (barley, wheat), and sunflowers.”

The RMA update noted that, “To qualify for the endorsement, one county must qualify independently for an enterprise unit and the other county must not qualify for an enterprise unit. Both county crop policies in the Multi-County Enterprise Unit must be with the same Approved Insurance Provider and have the same elections for Multi-County Enterprise Units, insurance plan, coverage level, and enterprise unit by practice. Interested farmers should contact their crop insurance agent to discuss options. A list of crop insurance agents is available at all USDA Service Centers and online at the RMA Agent Locator.”

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In Fourth Hog Waste Trial in North Carolina, Jury Sides with Plaintiff Neighbors

Craig Jarvis and Josh Shaffer reported yesterday at the News & Observer (Raleigh, North Carolina) Online that, “A federal court jury on Wednesday ruled in favor of eight Sampson County neighbors who sued the world’s largest pork producer for bringing foul odors and excessive noise to their rural community.

The plaintiffs were each awarded between $100 and $75,000 to compensate them for harm caused by living near a hog farm. Following Wednesday morning’s verdict the jury began hearing testimony in the punitive damages phase of the trial on Wednesday afternoon. The jury is likely to decide later this week on the amount of punitive damages, if any.

“Based on the three previous hog nuisance trials, all of which the company also lost, punitive damages could reach into the hundreds of millions of dollars.”

Yesterday’a article stated that, “Murphy-Brown attorney James Neale of Richmond, Va., said the plaintiffs’ contentions about the hog industry have nothing to do with the specific farm that is the subject of the trial. He listed improvements the company has made over the years to address concerns.

“Punitive damages, Neale said, are reserved for the worst corporate offenders. The allegations in this trial fall short of that standard, he said. Citing state law, Neale said punitive damages require clear and convincing evidence of personal ill will or conscious and intentional disregard of the rights and safety of others.”

The article added that, “This latest trial is the fourth such case against Murphy-Brown.

“In August, a federal jury awarded $470 million to neighbors of a Pender County farm run by Murphy-Brown, an award that was reduced due to a state cap on punitive damages. Under the cap, punitive damages can’t exceed three times compensatory damages or $250,000.”

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Acting EPA Administrator Says Obama Administration Went Too Far in Wetland Protection

Wall Street Journal writer Heidi Vogt reported yesterday that, “The Environmental Protection Agency announced a proposal Tuesday that reduces the number of federally protected bodies of water compared with an Obama-era rule it seeks to replace.

“EPA Acting Administrator Andrew Wheeler said the rule will give states needed flexibility in managing their streams and wetlands and provides greater certainty to Americans about when permits are needed, while reining in what he described as the overreach of the Obama administration.

Mr. Wheeler said former President Obama’s rule wrongly included many bodies of water that don’t regularly flow into larger waterways. The new proposed rule ‘puts an end to the previous administration’s power grab,’ he said.”

The Journal article pointed out that, “The proposal requires a 60-day public comment period before the EPA begins drafting a final version, which the agency said it expects to publish by June.

“The new EPA proposal, like the rule it seeks to replace, is designed to clarify the definition of ‘waters of the United States,’ which the 1972 Clean Water Act stipulates should be regulated by the federal government. The Obama administration’s 2015 rule said if streams, wetlands or ditches have a significant impact on more major waterways, they fall under federal jurisdiction.

“Mr. Wheeler’s proposal is for a rule that is more narrow in scope. ‘The Congress hasn’t told us to regulate all development across the entire country. They’ve told us to regulate navigable waters,’ Mr. Wheeler told The Wall Street Journal in his first interview about the rule. ‘You have to draw a line.'”

Ms. Vogt added that, “The change will appeal to some in the business world, and especially farming groups, which complained that the Obama rule was so broad that it made it difficult to know when permits were needed. Restrictions regarding ditches and groundwater could easily end up restricting the way they use their land, said Don Parrish, director of regulatory relations for the American Farm Bureau Federation.”

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Agritech Start-Ups Are Disrupting Farming

Financial Times writer Emiko Terazono reported yesterday that, “Hauling corn from field to silo on a truck, South Dakota farmer Chet Edinger is having a good harvest. The mood of the 53-year-old, who also farms soyabeans and wheat on more than 5,000ha of farmland, has been boosted this year by a corn seed recommended by Farmers Business Network, a digital platform dubbed as a ‘Google for farmers.’

“Mr Edinger planted a variety that he had ‘never tried and never heard of.’ Yet the gamble has given his farm ‘the best work we’ve [harvested] so far this year,’ he says.”

The FT article explained that, “An increasing number of US farmers are exploring alternative ways of purchasing seeds and chemicals as well as data and insights.

“With 7,000 members — accounting for 28m acres of farmland, about 3 per cent of the US total — FBN provides extensive crop, seed and other agronomic data, plus a marketing and ecommerce platform for grains, offering more price transparency for fertilisers and pesticides. It has in effect become a social media platform for the exchange of farming knowhow.”

Ms. Terazono indicated that, “Agritech is attracting a diverse range of investors. And large funding roundsFBN raised $110m last year and is now valued at $660m by Pitchbook, a data provider on private companies — are providing the foundation for the first wave of agritech start-ups with the potential to be valued at $1bn.

The single most important reason for this interest is innovation. It is not simply changing agriculture and food production, bringing in more transparency and new products as well as shortening supply chains — it is also offering investors such as SoftBank, Google and sovereign wealth funds a road map they recognise from other industries that have been transformed by technology.”

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Business Initiative Seeks to Bring High-Paying, High-Tech Jobs to Rural Iowa

Des Moines Register writer Donnelle Eller reported on the front page of Sunday’s paper that, “Microsoft’s Kevin Scott understands the limits teenagers face growing up in a place where cows outnumber people and opportunities for tech careers are limited.”

“‘I faced a hard choice: I wanted to stay in Virginia — I wanted to stay there with my friends and family — but if I wanted to pursue a career in technology, I had to leave,’ Scott said Saturday.

The Microsoft chief technology officer and nearly a dozen Silicon Valley executives want to change that.”

The article stated that, “They’re joining a business and small-town partnership to bring high-paying, high-tech jobs to rural Iowa. If successful, leaders want to replicate the initiative in other rural towns and states, creating opportunities in regions being emptied of jobs and people.

“Scott, LinkedIn co-founder Allen Blue, venture capitalist Greg Sands, Ripple CEO Brad Garlinghouse and others spent Saturday in rural Iowa learning about Pillar Technology’s initiative to provide intensive training for students who could then land high-paying tech jobs at the company’s office in Jefferson, a town of 4,200.”

Ms. Eller indicated that, “Startup founders and CEOs have found ‘an opportunity and want to grow but simply can’t find the people to do the job — at nearly any price,’ said Sands, a Minneapolis native.

Iowa and other flyover states can help fill that workforce need.”

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Housing Pressure: Many Nonbank Lenders are Shutting Down

Wall Street Journal writer Christina Rexrode reported recently that, “Small and midsize U.S. mortgage firms are trimming staff, putting themselves up for sale and closing up shop at a clip not seen in years, a sign of the mounting pressure on the housing market as interest rates rise and a long economic expansion matures.

The number of nonbank mortgage lenders was down by about 3.5% at midyear from the end of 2017, according to the Conference of State Bank Supervisors. Mortgage-loan-originators at those firms dropped by more than 11,000 workers, or 7%, according to the group, which operates the system that processes mortgage licenses and registrations.

The declines follow years of significant growth for nonbank lenders, which have taken mortgage-market share from traditional banks by being nimble and sometimes knowing local markets better. Led by larger firms such as Quicken Loans Inc., Freedom Mortgage and loanDepot, nonbanks made more than 52% of $1.26 trillion in originations in the first nine months of 2018, according to industry research group Inside Mortgage Finance.”

“Retreat of Smaller Lenders Adds to Pressure on Housing,” by Christina Rexrode. The Wall Street Journal (November 22, 2018).

The Journal article explained that, “Bankers and other industry watchers expect the ranks of smaller nonbank mortgage lenders to keep shrinking in coming months, as rising rates dry up the once-lucrative mortgage-refinancing business and make home purchases costlier. The nonbanks’ retreat adds to the concerns swirling about the health of the economy, particularly in the housing sector, which has slowed this year. Housing and lending are both major employers and widely followed leading indicators of future economic activity.”

The article added that, “‘Rising rates are headwinds to us,’ said Dan Gilbert, chairman of Quicken, the largest nonbank lender and one of the largest mortgage providers in the U.S., according to industry rankings. ‘When rates go low, those are tailwinds. But either way the plane has to fly,’ he said.

The shakeout also reflects the straitened economics of the housing industry, where sales are slowing amid concerns about declining affordability, and rising costs for materials and labor are helping to narrow the pipeline of future construction projects.”

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Scientists in Helsinki Have Created an Edible Vaccine for Bees

Bloomberg writer Kati Pohjanpalo reported today that, “A growing number of honey bees die each year due to pesticides, vanishing habitats, poor nutrition and climate change, with potentially disastrous consequences for agriculture and natural diversity.

Now, scientists at the University of Helsinki have developed the first edible vaccine against microbial infections, hoping to save at least some of the pollinators.

“‘We might be right now at a tipping point, without even realizing it,’ Dalial Freitak, the lead scientist on the project, said in an interview on Wednesday. ‘We’ve been taking the pollination services for granted for so long. These insects are not there, they are disappearing.'”

The Bloomberg article noted that, “The vaccine is administered via an edible sugar patty that’s suspended in the hive for the queen to consume over seven to 10 days. After she ingests the pathogens, she is able to spark an immune response in her offspring, eventually generating an inoculated hive.

The vaccine still needs a lot of work before it can become commercially available. Scientists must ensure it’s safe for the environment, the bees themselves and humans who consume the honey. Regulatory hurdles will take years to clear. It’s also too early to estimate how much beekeepers will have to shell out to buy inoculated hives, Freitak said.”

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Federal Affidavit Details Alleged Scheme to Defraud Minnesota Cooperative

DTN writer Todd Neely reported today that, “The man accused of stealing millions of dollars from the Ashby Farmers Cooperative in Ashby, Minnesota, has surrendered himself to federal authorities and now faces one count of mail fraud.

“Jerome Hennessey, 56, of Dalton, Minnesota, made his initial court appearance in the U.S. District Court for the District of Minnesota in Minneapolis on Tuesday, according to the U.S. Department of Justice.

“The former manager of the Ashby cooperative allegedly stole at least $2 million from the elevator from 2003 to 2018, before disappearing in September 2018.”

The DTN article stated that, “According to the affidavit, Hennessey allegedly caused the cooperative to make more than $1.1 million in payments to himself and more than $1.1 million in payments to a personal Cabela’s Visa card in Hennessey’s name. In addition, co-op funds allegedly were spent by Hennessey on hundreds of thousands of dollars in payments for ‘various expensive hunting trips and taxidermy services,’ the affidavit said.”

Mr. Neeley noted that, “Erik Ahlgren, an attorney hired by the cooperative, told DTN the cooperative is doing all it can to recover the money from Hennessey. In October the co-op filed a civil suit against him. Ahlgren said the co-op is considering additional lawsuits.

“‘We expect to obtain assets on behalf of the creditors but we do not expect to obtain sufficient assets to make the creditors whole,’ he said. ‘We are hopeful that Mr. Hennessey will cooperate in obtaining assets to repay the creditors but we do not expect Mr. Hennessey’s return to have a significant impact on whether we obtain a judgment against him and we will do the best we can, with or without his cooperation, to recover assets on behalf of the creditors.'”

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Caution Advised for Grain Elevators in Year Ahead

Sara Schafer reported today at AgWeb Online that, “‘Cautious.’ That’s the word Will Secor, a grain and farm supply economist with CoBank, would use to describe the year ahead for grain elevators.

“‘There are some bright spots based on the fundamentals for corn and wheat,’ he says. ‘But there’s extreme caution when we think about the overall picture, as we incorporate what is going on in the soybean market.’

“Even with the recent news of President Donald Trump and Chinese President Xi Jingping agreeing to a trade truce, uncertainty remains. Combine that with farmers in challenging financial positions, likely interest rate hikes and other macroeconomic forces, and the outlook for grain elevators in 2019 looks volatile.”

Ms. Schafer noted that, “‘The big issue is the large crops,’ he says. ‘For an elevator, it’s not just the size of the crop, but it’s where the crop is; we have some surpluses in localized areas, but generally, there is tight supply of storage and capacity.’

Illinois and Nebraska will have the largest grain storage shortages, Secor says. Iowa, Kansas, Indiana, South Dakota and Ohio will also come up short.

“‘We’re hearing of a lot of producers using ag bags and opening up bins they haven’t used in years,’ he says. ‘It’ll be really interesting to see how it plays out.'”

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Proposed Regulations Would Allow for More Home Sales Without Human Appraisals

Wall Street Journal writers Ryan Dezember and Cezary Podkul reported last week that, “The battle between man and bot has a new front: your mortgage.

“Federal regulators have proposed loosening real-estate appraisal requirements to enable a majority of U.S. homes to be bought and sold without being evaluated by a licensed human appraiser. That potentially opens the door for cheaper, faster, but largely untested property valuations based on computer algorithms.

“The proposal was made earlier this month by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Federal Reserve. It would increase to $400,000, from $250,000, the value of homes that can be bought and sold without a tape-measure-toting appraiser visiting a property.”

The Journal writers explained that, “More than two-thirds of U.S. homes sell for $400,000 or less, according to U.S. Census data and the National Association of Realtors. If the regulators’ proposal had been in force last year, about 214,000 additional home sales, or some $68 billion worth, could have been made without an appraisal, regulators said in their 69-page proposal.

“Some worry, though, that dropping appraisal requirements would introduce new risks into the $10.7 trillion market for home loans.”

Last week’s article added that, “Scrapping the appraisal requirement would open a swath of new turf for upstart property valuation companies, like HouseCanary Inc., which use artificial intelligence, algorithms and sometimes even drones to value homes. Jeremy Sicklick, the company’s chief executive, said that replacing appraisers with computers will speed up home sales by weeks, reduce costs for buyers and eliminate human bias and error from the process of valuing mortgage collateral.”

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