Advanced Biofuels Association Files Court Action Regarding EPA Biofuels Waivers

Late last month, Reuters writer Jarret Renshaw reported that, “A U.S. biofuels trade group asked a federal court on Wednesday to stop the Environmental Protection Agency from giving refiners new waivers from the country’s biofuels law until the agency reverts to the tougher criteria it used to assess applications before Donald Trump’s presidency, according to court papers.

The waivers can exempt small refineries — those with a production capacity of 75,000 barrels per day or less – from the requirements of the Renewable Fuel Standard, which mandates U.S. refiners blend biofuels into the fuel pool or buy compliance credits from those who do.

“Trump’s EPA has vastly expanded the biofuel waiver program to save the oil industry money, angering Midwest farmers who say the policy destroys demand for corn-based ethanol and other biofuels at a time they are already struggling – putting the administration in the center of a fight between two key constituencies.”

The article stated that, “‘We want to return to normalcy,’ Michael McAdams, head of the Advanced Biofuels Association (ABFA), which filed the injunction in the U.S. Court of Appeals in Washington, said in an interview on Wednesday. ‘My members will continue to suffer irreparable harm unless the EPA changes its ways.'”

Mr. Renshaw added that, “For 2017, the Trump administration’s EPA granted 35 exemptions to small refineries without denying any applications, up from seven exemptions issued in the last year of the Obama administration, according to EPA data.”

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Turn to Organic Comes as Overall Number of Farms Declines

Bloomberg writers Shruti Singh and Michael Hirtzer reported this week that, “With crop prices stuck in a multi-year rout, more farmers are chasing price premiums by turning to organic crops.

“Higher-value farm products such as organic allow farmers to boost returns over conventionally grown crops. While the number of farms overall in the U.S. from 2012 has shrunk, the number of organic growers has surged, according to the latest census from the U.S. Department of Agriculture published this month. The value of organic farm products more than doubled in 2017 from 2012.”

The Bloomberg article pointed out that, “Indiana farmer Joe Mills said food-grade organic corn that can be made into products like tortilla chips was fetching about $10.50 a bushel, compared with conventional corn of about $3.50 a bushel.

“Mills, who farms with his father Don, started to transition land to organic in 2015 and now has 230 certified organic acres. Another 290 acres are going through the three-year transition. While the financial returns are better, Mills said organic farming can be more labor intensive. Weeds, for example, are removed manually at many organic farms, compared with conventional operations where herbicides can be sprayed on fields by tractors or even airplanes.

“‘A lot of people get dollar signs in their eyes,’ Mills said by telephone. ‘Yes, it’s economical, but there is a huge learning curve and a mindset change.'”

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Workers Getting Hired Through Apps Considered Independent Contractors, Labor Department Says

Wall Street Journal writer Eric Morath reported this week that, “Workers lining up jobs through smartphone apps and websites such as Handy and Angie’s List are independent contractors and not employees of those platforms, the Labor Department said in a letter Monday.

“An unidentified ‘virtual marketplace company’ sought clarification on whether service providers hired through the platform are considered employees under the Fair Labor Standards Act, the letter said.

“The 1938 law addresses minimum wage, overtime and other labor rules. The publicly issued ‘opinion letter’ said service providers are not working for the virtual marketplace, but working for consumers through the marketplace.”

The Journal article noted that, “While the Fair Labor Standards Act ‘has a very broad scope of coverage, it is not so broad that all workers are caught within its reach—far from it,’ the letter stated.

The letter doesn’t represent a new regulation or law, and doesn’t carry the same weight in court. It serves to demonstrate how the department would make determinations on relevant questions—if it were asked, for example, whether a violation of overtime laws occurred.”

Mr. Morath added that, “The letter isn’t binding, and could be reversed or disregarded by future administrations. Still, it is important because it provides guidance on how the department interprets an 80-year-old law in a world where people can land jobs in moments through apps on their phones.”

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USDA Announces New Decision Tool for New Dairy Margin Coverage Program

A news release today from USDA stated that, “Agriculture Secretary Sonny Perdue announced today the availability of a new web-based tool – developed in partnership with the University of Wisconsin – to help dairy producers evaluate various scenarios using different coverage levels through the new Dairy Margin Coverage (DMC) program.

The 2018 Farm Bill authorized DMC, a voluntary risk management program that offers financial protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. It replaces the program previously known as the Margin Protection Program for Dairy. Sign up for this USDA Farm Service Agency (FSA) program opens on June 17.

“‘With sign-up for the DMC program just weeks away, we encourage producers to use this new support tool to help make decisions on participation in the program,’ Secretary Perdue said. ‘Dairy producers have faced tough challenges over the years, but the DMC program should help producers better weather the ups and downs in the industry.'”

Today’s update added that, “For more information, access the tool at fsa.usda.gov/dmc-tool. For DMC sign up, eligibility and related program information, visit fsa.usda.gov or contact your local USDA Service Center. To locate your local FSA office, visit farmers.gov/service-locator.

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USDA Extends Deadline for Certifying Crop Production for MFP

A news release today from USDA stated that, “USDA extended the deadline to May 17 from May 1 for agricultural producers to certify 2018 crop production for payments through the Market Facilitation Program (MFP), which helps producers who have been significantly affected by foreign tariffs, resulting in the loss of traditional exports. USDA’s Farm Service Agency (FSA) extended the deadline because heavy rainfall and snowfall have delayed harvests in many parts of the country, preventing producers from certifying acres.

“Payments will be issued only if eligible producers certify before the updated May 17 deadline.

“The MFP provides payments to producers of corn, cotton, sorghum, soybeans, wheat, dairy, hogs, fresh sweet cherries and shelled almonds. FSA will issue payments based on the producer’s certified total production of the MFP commodity multiplied by the MFP rate for that specific commodity.”

Today’s update added that, “Producers can certify production by contacting their local FSA office or through farmers.gov.”

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Existing Home Sales Sputter in March

Wall Street Journal writer Laura Kusisto reported earlier this week that, “Sales of previously owned U.S. homes sputtered in March, failing to build off strong gains in February, despite lower mortgage rates and a strong job market.

U.S. existing-home sales fell 4.9% in March from the previous month to a seasonally adjusted annual rate of 5.21 million, the National Association of Realtors said Monday. Sales were down 5.4% from a year ago, marking 13 straight months of annual declines.

“Home sales in February experienced their second-strongest monthly gain ever, offering the possibility that the market was finally rebounding. But March’s numbers were a setback as the housing market headed into the crucial spring selling season, and they offered fresh evidence that home sales are still struggling to break out of a period of decline.”

The Journal article stated that, “The housing market has been beset by a host of challenges over the past year. Home prices have risen faster than wages and inflation for years, making it difficult for many first-time buyers to afford homes. A rise in mortgage rates and a shortage of inventory, especially at the low end created additional challenges for buyers.

“All those trends have moderated or reversed in recent months, raising hopes that buyers would return to the market. The median sale price for an existing home in March was $259,400, up 3.8% from a year earlier, about half the pace of price growth a year ago.”

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Iowa’s New Ag-Gag Law Challenged in Court

Earlier this week, Des Moines Register writer Donnelle Eller reported that, “Iowa’s second attempt to make it a crime for animal welfare activists, journalists and others to go undercover at meatpacking plants and livestock facilities will face a legal challenge.

The ACLU of Iowa filed a lawsuit Monday challenging the state’s new ag-gag law, saying it’s unconstitutional, chills free speech and criminalizes a free press.”

The Register article explained that, “Iowa lawmakers and ag groups say the law is necessary to protect producers from groups that would use false pretense to harm farm operations.

“The new law is similar to legislation passed in 2012, which a federal judge ruled in January was unconstitutional. The state is appealing that decision.

“Both legal challenges will move through the courts separately, [Rita Bettis Austen, legal director of the ACLU of Iowa] said.”

Ms. Eller added that, “Iowa lawmakers say the new law has been more narrowly crafted to avoid legal challenges that befell the existing law.

“The new ‘agricultural production facility trespass’ law makes it illegal for someone to use deception to gain access to a private facility with the intent to cause physical or economic harm or ‘other injury’ to a facility’s operations, property or persons.”

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Farm Property Taxes Issues

DTN Ag Policy Editor Chris Clayton reported earlier this week that, “The big fight in the Nebraska Legislature this year is over plans to reduce property taxes, which has the state’s farm lobbies pushing lawmakers hard for some relief.

“Numbers taken from the 2017 Ag Census show Nebraska farmers have more reason to complain about property taxes than farmers in nearby states.

“Farm income nationally fell between 2012 and 2017, and land values fell in some states during that time. Property taxes nationally for farmers went up $2 billion over that five-year stretch, jumping from $7.4 billion to $9.4 billion. The average property-tax increase nationally was $21.3%. Just one state, Rhode Island, collected less in property tax from farmers and ranchers over that five-year stretch, according to the Census figures.”

Mr. Clayton noted that, “California remains the highest state for taxing farmers’ property. In 2017, the 65,129 ranch and farm operations in California paid $1.126 billion, an average of $17,299 per farm. And California farm property taxes rose $300 million over that five-year span despite losing 6,297 farms. California property taxes paid rose 26.5% from 2012-2017.

Nationally, 1.92 million farmers paid $9.4 billion worth of property taxes in 2017, up $2 billion from five years earlier, a 21.3% increase. The average property tax paid by farmers nationally was $4,902 in 2017, compared to $3,752 per farm in 2012.”

The DTN article added that, “Illinois farmers also saw a 25.5% hike in their property taxes from 2012-2017 to an average of $6,379 per farm.”

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Gauge of Home Building Projects Declined in March

Wall Street Journal writers Sharon Nunn and David Harrison reported last week that, “A gauge of U.S. home building and approvals for new projects declined in March, continuing a recent weak stretch for new housing construction.

So-called housing starts fell 0.3% in March from the prior month to a seasonally adjusted annual rate of 1.139 million, the Commerce Department said Friday. Residential building permits, which can signal how much construction is in the pipeline, dropped 1.7% from February to an annual pace of 1.269 million in March.

These declines were unexpected; economists surveyed by The Wall Street Journal had predicted a 4.1% increase for starts and a 0.3% gain for permits in March.”

The Journal writers stated that, “Housing-starts data are volatile from month to month and can be subject to large revisions. March’s 0.3% drop for starts came with a margin of error of 14.6 percentage points. Still, home construction has been weak, more broadly. Starts were down 9.7% in the first three months of 2019 compared with the same period a year earlier. Permits were down 5.4% year to date.”

Last week’s article added that, “Economic fundamentals are in place to support strong demand. Wages are growing at the fastest pace in years, while employers continue to churn out jobs.

“Yet factors including rising input costs and lack of available land pushed up prices and put a damper on the housing market in 2018. Recent housing data suggest the existing-home sales market could be turning around as interest rates fall.”

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Delgado Leads Bipartisan Bill to Ease Chapter 12 Bankruptcy Rules Amid Farm Economy Slump

A news release last week from House Ag Committee member Antonio Delgado (D., N.Y.) stated that, “On Thursday, [Rep. Delgado] led House Judiciary Committee Ranking Member Jim Sensenbrenner (R-Wisc.), House Agriculture Committee Chairman Collin Peterson (D-Minn.), and Reps. TJ Cox (D-Calif.), Kelly Armstrong (R-N.D.) and Dusty Johnson (R-S.D.), in introducing the bipartisan Family Farmer Relief Act of 2019, legislation that would ease the process of reorganizing debt through Chapter 12 bankruptcy rules. The restructuring of the rules to make more farms eligible comes amid a continued downturn in the farm economy.

“‘For folks in Upstate New York, farming is more than a job—it’s a way of life. And in this extremely challenging farm economy, we must come together to help our family farmers overcome years of low prices and increased market consolidation. The Family Farmer Relief Act will provide the critical restructuring and repayment flexibility these folks need to get through these hard times without permanently closing their operations,’ Delgado said.

“The bill, which is the House companion to legislation introduced by Senators Chuck Grassley (R-Iowa), Amy Klobuchar (D-Minn.), Ron Johnson (R-Wisc.), Patrick Leahy (D-Vt.), Thom Tillis (R-N.C.), Doug Jones (D-Ala.), Joni Ernst (R-Iowa) and Tina Smith (D-Minn.), expands the debt cap that can be covered under Chapter 12 bankruptcy from $3,237,000 to $10,000,000. The changes reflect the increase in land values, as well as the growth over time in the average size of U.S. farming operations and are meant to provide farmers additional options to manage the downturn in the farm economy. The legislation is endorsed by the American Farm Bureau Federation and National Farmers Union.”

The release added that, “The bill will now be referred to the Judiciary Committee for consideration.”

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