Court Denies Injunction Against EPA From Approving Additional Small Refinery Waivers

DTN writer Todd Neeley reported last week that, “A federal court Friday denied a motion for an injunction against EPA from approving additional small refinery waivers, using what the agency said is a new process for issuing those waivers to the Renewable Fuel Standard.

“One year ago, the Advanced Biofuels Association petitioned the U.S. Court of Appeals for the District of Columbia Circuit, asking for a review of those waivers to the RFS that to-date, have totaled about 2.6 billion gallons of biofuels not blended in gasoline.

“The ABFA on March 6, 2019, filed a 97-page brief with the court alleging the EPA broke away from RFS requirements for granting small-refinery waivers starting in May 2017 and continued to deny a congressional order regarding which refiners qualify.”

The DTN article stated that, “During the week of May 7, 2019, EPA argued the group waited too long to file for an injunction.

“A partially redacted document filed by the ABFA in March shows the EPA originally was allowed to grant temporary, two-year, exemptions starting in 2005. In recent years, however, the agency granted exemption extensions beyond two years — including a refiner that never received a prior exemption.

The EPA approved waivers for small refiners that didn’t have the minimum U.S. Department of Energy score to qualify, the brief said, and improperly considered the debts of small-refiners’ parent companies when examining waiver requests.”

Mr. Neeley added that, “The Advanced Biofuels Association has argued that falling prices of Renewable Identification Numbers, or RINs, in 2017 was caused by waivers granted.

“EPA argued in its response that the falling prices are not evidence of waivers granted.

“The agency granted 53 waivers for 2016 and 2017, and 39 pending waiver requests for 2018.”

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USDA Reopens Continuous CRP Signup

A news release this week from USDA’s Farm Service Agency (FSA) stated that, “[FSA] will accept applications beginning June 3, 2019, for certain practices under the continuous Conservation Reserve Program (CRP) signup and will offer extensions for expiring CRP contracts. The 2018 Farm Bill reauthorized CRP, one of the country’s largest conservation programs.

“‘USDA offers a variety of conservation programs to farmers and ranchers, and the Conservation Reserve Program is an important tool for private lands management,’ said FSA Administrator Richard Fordyce. ‘CRP allows agricultural producers to set aside land to reduce soil erosion, improve water quality, provide habitat for wildlife and boost soil health.’

FSA stopped accepting applications last fall for the continuous CRP signup when 2014 Farm Bill authority expired. Since passage of the 2018 Farm Bill last December, Fordyce said FSA has carefully analyzed the language and determined that a limited signup prioritizing water-quality practices furthers conservation goals and makes sense for producers as FSA works to fully implement the program.”

The FSA update added that, “This year’s signup will include such practices as grassed waterways, filter strips, riparian buffers, wetland restoration and others. View a full list of practices approved for this program.

Continuous signup enrollment contracts are 10 to 15 years in duration. Soil rental rates will be set at 90 percent of the existing rates. Incentive payments will not be offered for these contracts.”

The news release also noted that, “A one-year extension will be offered to existing CRP participants who have expiring CRP contracts of 14 years or less. Producers eligible for an extension will receive a letter describing their options.

“Alternatively, producers with expiring contracts may have the option to enroll in the Transition Incentives Program, which provides two additional annual rental payments on the condition the land is sold or rented to a beginning farmer or rancher or a member of a socially disadvantaged group.”

“Producers interested in applying for continuous CRP practices, including those under existing CREP agreements, or who need an extension, should contact their USDA service center beginning June 3. To locate your local FSA office, visit www.farmers.gov. More information on CRP can be found at www.fsa.usda.gov/crp.”

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Prevented Planting Not an Easy Decision for Farmers

DTN Ag Policy Editor Chris Clayton reported this week that, “Leading into USDA’s Crop Progress report on Monday, May 13, roughly 79 million acres of soybeans and more than 71 million acres of corn were unplanted. Rains and cold weather hampered planting throughout major corn and soybean states this past week.

“Already, there are a lot of questions about how much acreage won’t be planted this spring because of widespread flooding. At the end of March, the data group Gro Intelligence estimated for Reuters that more than 1 million acres were flooded across nine states for at least seven dates in March.”

The article stated that, “While this year’s wet spring might look comparable to 2013, the payments for prevented-planting insurance have changed quite a bit, said Steve Johnson, a farm management specialist at Iowa State University. The coverage level is now lower for corn, and the price protection is also dramatically lower now.

“‘This is a different game for 2019 because the revenue guarantee is so much lower for corn and soybeans than it has been in recent history,’ Johnson said. ‘So the reality of prevent-plant is much different than it was. That’s why I don’t think it will be as big a deal as 2013 because of the financial constraints on a lot of these farms right now.’

Johnson cautions producers to push a pencil and have a long talk with their crop-insurance agent about their specific policies before making any decision. If they haven’t already, farmers should be photographing the damage to their fields.”

University of Illinois extension provided a more detailed analysis of prevent planted issues in an update yesterday titled, “Prevented Planting Decision for Corn in the Midwest.”

The update noted in part that, “Prevented planting decisions are always difficult, but market and policy dynamics make 2019 decisions even more difficult.  Given no MFP-like payments, our analysis suggests that prevented planting has the highest expected return relative to planting corn or planting soybeans.  An individual’s situation will matter.  In particular, planting may be more economical if some of the inputs, especially fertilizer on corn, have already been applied.

An individual’s expectation on another round of aid similar to last year’s MFP payments also will influence planting decisions.  Press reports suggest that aid is being considered and that aid will be larger than last year.  If this aid is targeted to 2019 production, incentives will be reduced to take prevented planting payments.”

The DTN article also pointed out that, “More details on prevented planting can be found at https://blogs.extension.iastate.edu/… and https://www.rma.usda.gov/…

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Bayer AG Loses Third Consecutive Roundup Trial- $2 Billion Award to Plaintiff

Reuters wrier Tina Bellon reported yesterday that, “A California jury on Monday awarded more than $2 billion to a couple who claimed Bayer AG’s glyphosate-based Roundup weed killer caused their cancer, in the largest U.S. jury verdict to date against the company in litigation over the chemical.

The large punitive damages award is likely to be reduced due to U.S. Supreme Court rulings that limit the ratio of punitive to compensatory damages to 9:1. The jury awarded a total of $2 billion in punitive damages and $55 million in compensatory damages.

It was the third consecutive U.S. jury verdict against the company in litigation over the chemical, which Bayer acquired as part of its $63 billion purchase of Monsanto last year. Both other jury verdicts also came in California, one in state court and one in federal court.”

The Reuters article stated that, “The jury in Alameda County Superior Court in Oakland on Monday said the company was liable for plaintiffs Alva and Alberta Pilliod’s contracting non-Hodgkin’s lymphoma, a spokeswoman for the couple said.”

Ms. Bellon added that, “The German chemicals giant faces more than 13,400 U.S. lawsuits over the herbicide’s alleged cancer risk.”

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Lenders Offering Fewer Mortgages for Cheaper Properties

Last week, Wall Street Journal writer Ben Eisen reported that, “Some low- and middle-income home buyers are having a hard time getting mortgages for an unexpected reason: The loans they’re applying for are too small.

“Lenders extended about 106,000 mortgages with balances between $10,000 and $70,000 in the U.S. last year, worth $5.1 billion. That is down 38% from almost 171,000 in 2009, according to figures compiled by Attom Data Solutions, a real-estate data firm. The drop-off at the bottom end of the market has been far swifter than at the top. Origination was down a more modest 26% for mortgages between $70,000 and $150,000, and it rose 65% for mortgages above that range.”

“Small Mortgages Are Getting Harder to Come By,” by Ben Eisen. The Wall Street Journal (May 9, 2019).

The Journal article noted that, “Only about a quarter of homes that sold for less than $70,000 were financed with a mortgage, while almost 80% of sales between $70,000 and $150,000 had one, according to an Urban Institute analysis last year. Low-end borrowers had their applications denied at a higher rate than those taking out bigger mortgages even when comparing borrowers with similar credit quality, according to the think tank.

“Housing experts say small mortgages have become rarer because lenders have trouble making profits on smaller loans. Lenders typically have a fixed cost to extend a mortgage, and the smaller the loan, the smaller the profits.”

Mr. Eisen added that, “The dearth of smaller mortgages is becoming an impediment to home buying in regions where prices are otherwise affordable, especially in Midwestern and Southern cities like Chicago, St. Louis, Youngstown, Ohio, and El Paso, Texas, according to local housing advocates and attorneys.”

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Bayer AG’s Third Roundup Case- Two Previous Trials Yielded $159 Million in Damages

Bloomberg writer Joel Rosenblatt reported earlier this month that, “The jury in Bayer AG’s third Roundup weedkiller trial was urged by a plaintiffs’ lawyer to consider socking the company with $1 billion in damages as punishment for covering up the health risks of the herbicide for decades.

“The aggressive demand on behalf an elderly couple who claim they got cancer from exposure to Roundup shows that plaintiffs are becoming bolder after winning the first two trials against Bayer, which together yielded $159 million in damages.

“The couple’s attorney said the billion-dollar request is roughly based on the gross profit of $892 million recorded in 2017 by the agricultural-chemicals division of Monsanto, which was making Roundup long before Bayer acquired the company last year.”

The Bloomberg article noted, “‘That is a number that changes things,’ lawyer Brent Wisner said Wednesday at the close of a trial in state court in Oakland, California. He also asked the jury to award about $55 million to compensate Alva and Alberta Pilliod for economic damages like hospital bills and noneconomic losses such as pain and suffering.”

The article stated that, “Bayer Chief Executive Officer Werner Baumann faces increased shareholder pressure over the litigation it inherited from Monsanto. The agrochemical giant that operates out of St. Louis is the named defendant in U.S. lawsuits over Roundup filed by 13,400 people, a number that jumps by thousands with each passing quarter.”

Mr. Rosenblatt added that, “Bayer denies that Roundup causes cancer and the company has been holding out hope for a court win that would give [Bayer Chief Executive Officer Werner Baumann] some breathing space as the company hones its legal response to the swelling wave of litigation. A third loss, however, could force the company to accelerate talks on a global settlement, which analysts have said could top $5 billion. The judge in San Francisco handling the federal suits canceled a trial scheduled for May 20 to allow for confidential negotiations.”

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New Crop of Home Flippers Encounter First Slowdown

Bloomberg writer Prashant Gopal reported today that, “Sean Pan wanted to be rich, and his day job as an aeronautical engineer wasn’t cutting it. So at 27 he started a side gig flipping houses in the booming San Francisco Bay Area. He was hooked after making $300,000 on his first deal. That was two years ago. Now home sales are plunging. One property in Sunnyvale, near Apple Inc.’s headquarters, left Pan and his partners with a $400,000 loss. ‘I ate it so hard,’ he says.

A new crop of flippers, inspired by HGTV reality shows, real estate meetup groups, and get-rich gurus, piled into the market in recent years as rapid price gains helped the last property crash fade from memory. Many newbie investors are encountering their first slowdown and facing losses from houses that take too long to sell. Meanwhile, they face steep payments on a kind of high-interest debt—known as ‘hard-money’ loans—that helped power the boom.

“‘Flipping only works in an appreciating market where homes move quickly,’ says Glen Weinberg, the Denver-based chief operating officer of Fairview Commercial Lending, which is tightening its standards for real estate investors. ‘Those factors are now in flux, and that’s what’s going to lead to the demise of a lot of flippers.'”

The Bloomberg article noted that, “About 6.5 percent of U.S. sales in the fourth quarter were flips, or homes sold within a year from when they last changed hands. That was the highest share in seasonally adjusted data going back to 2002, according to real estate data firm CoreLogic. (It’s even higher than during the last boom, when there were more newly built houses for buyers to choose from.)”

Today’s article added that, “Unlike the last decade’s housing crash, in which speculators bought simply to resell, many of today’s flippers sink money into fixing up properties. Their hard-money loans, which come from private investment groups, often have high interest rates and low down payments. The loans also are bigger because renovation costs are folded in.”

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Iowa Supreme Court Rejects Effort by Landowners to Block Wind Farm

Associated Press writer Grant Schulte reported earlier this month that, “The Iowa Supreme Court rejected an effort [May 3rd] by local landowners to block a proposed wind farm in northwest Iowa after it won approval from government regulators.

“The court’s rulings remove a major obstacle for the 170-turbine wind energy project in Palo Alto County. It also provides more certainty that similar projects will be able to proceed in the future.

“Residents filed two lawsuits challenging the plan by Palo Alto Wind Energy and MidAmerican Energy, one against the Iowa Utilities Board and another against the Palo Alto County Board of Supervisors.”

The AP article stated that, “The utilities board lawsuit contended board members should have required developers to get a ‘certificate of public convenience, use and necessity’ that would have required an extensive study of the project’s impact on neighbors and the environment.

“At issue was an ambiguous section of Iowa law that mandates the certificate for large wind-energy projects located at a single site.

The utilities board chose to define ‘single site’ as a collection of wind turbines that are all linked by a single line to a power substation. Based on that interpretation, the utilities board said the Palo Alto County wind farm was not a single site but a cluster of different facilities because they used different lines. None of those individual facilities produced enough energy to require the special certificate.”

Mr. Schulte explained that, “Bertha and Stephen Mathis’ lawsuit against the county, with five other plaintiffs, challenged the Palo Alto County Board of Supervisors’ process for approving the project under a newly approved zoning ordinance.

“Palo Alto County Attorney Peter Hart said he was relieved and thankful that the court upheld the county’s zoning rules. Hart said the ordinance was carefully designed to promote wind-energy development while protecting the interests of local residents.”

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USDA Accepting Applications to Help Cover Producers’ Costs for Organic Certification

An update yesterday from USDA’s Farm Service Agency (FSA) stated that, “[FSA] announced that organic producers and handlers can apply for federal funds to assist with the cost of receiving and maintaining organic certification through the Organic Certification Cost Share Program (OCCSP). Applications for fiscal 2019 funding are due Oct. 31, 2019.

“‘Producers can visit their local FSA county offices to apply for up to 75 percent of the cost of organic certification,’ said FSA Administrator Richard Fordyce. ‘This also gives organic producers an opportunity to learn about other valuable USDA resources, like farm loans and conservation assistance, that can help them succeed. Organic producers can take advantage of a variety of USDA programs from help with field buffers to routine operating expenses to storage and handling equipment.’

“OCCSP received continued support through the 2018 Farm Bill. It provides cost-share assistance to producers and handlers of agricultural products for the costs of obtaining or maintaining organic certification under the USDA’s National Organic Program. Eligible producers include any certified producers or handlers who have paid organic certification fees to a USDA-accredited certifying agent. Eligible expenses for cost-share reimbursement include application fees, inspection costs, fees related to equivalency agreement and arrangement requirements, travel expenses for inspectors, user fees, sales assessments and postage.”

The FSA update added that, “To learn more about organic certification cost share, please visit the OCCSP webpage, view the notice of funds availability on the Federal Register, or contact your FSA county office. To learn more about USDA support for organic agriculture, visit usda.gov/organic.”

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Homeownership Rate Dips in the First Quarter

Wall Street Journal writer Laura Kusisto reported recently that, “The U.S. homeownership rate fell for the first time in more than two years in the first quarter, putting the brakes on the recovery of an important piece of the economy.

The homeownership rate fell to 64.2% in the first quarter from 64.8% in the fourth quarter, according to U.S. Census Bureau figures released [April 25th]—a notable drop for a number that barely moves from one quarter to the next. After more than a decade of declines, the homeownership rate had been reliably on the upswing since the beginning of 2017 and was nearing its historic average of around 65%.

“First-time buyers ‘are hitting a bit of an affordability ceiling here,’ said Zillow Director of Economic Research Skylar Olsen.”

The Journal article stated that, “A rising homeownership rate primarily reflects younger households successfully making the transition from renting to owning, which for many families is critical to saving for retirement and other big expenses. Those households have struggled in recent months as mortgage rates have risen and there has been a shortage of lower-priced inventory.”

Ms. Kusisto added that, “Younger buyers, who had been driving the rise in homeownership for the last couple of years, had some of the steepest falls in the first quarter. The homeownership rate of households headed by someone under 35 years old dropped to 35.4% from 36.5% in the fourth quarter. The homeownership rate among households headed by someone 35 to 44 dropped to 60.3% from 61.1%.”

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