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Vilsack: RFS Filled With Litigation

United States Secretary of Agriculture Tom Vilsack
United States Secretary of Agriculture Tom Vilsack

Agriculture Secretary Tom Vilsack says the conflict between agriculture and petroleum interests over the Renewable Fuels Standard shows no signs of slowing. Vilsack told Bloomberg last week “you’re going to have constant litigation.” Oil and biofuel industry advocates alike have filed numerous lawsuits over the RFS volume targets issued by the Environmental Protection Agency last November. Valero Energy, the third largest ethanol producer and the largest U.S. petroleum refiner, is the latest to file suit against the EPA. In November, EPA announced refiners must use 14.5 billion gallons of corn-based ethanol this year, below the 15 billion gallon mark as set within the RFS. The oil industry says that is above levels considered safe to use in engines while biofuel proponents say that is below the target required by law. The EPA maintains it has the authority to set the volume targets based off the current market situation.

Midwestern Rural Mainstreet Index Remains Weak

field, farmWhile the Creighton University Rural Mainstreet Index rose for February, it remains weak, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture. Overall, the Index, which ranges between 0 and 100, increased to 37.0 from January’s 34.8. This is the sixth straight month the overall index has moved below growth neutral. Organizer Ernie Goss says recent declines are “the result of lower agriculture and energy commodity prices and downturns in manufacturing.” The farmland and ranchland price index for February climbed to 29.8 from January’s 23.9. This is the 27th straight month the index has moved below growth neutral. Bank CEOs reported average annual cash rent for farmland, excluding pastureland, of $221. This is down by approximately 15 percent from July 2015. The February farm equipment-sales index climbed to 11.3 from January’s record low 7.0. Finally, the confidence index, which reflects expectations for the economy six months out, moved slightly higher to 30.4 from 29.4 in January, indicating a very pessimistic outlook among bankers.

Cargill Stopping Sales to Black Sea Region

Cargill announced the company will stop selling seed, fertilizer and crop chemicals to farmers in the Black Sea region. The announcement comes as Cargill continues to cut back operations given the current commodity prices, according to Reuters. The privately held company is restructuring to improve how it responds to market swings. Cargill will immediately start winding down its crop input business in Black Sea region countries like Russia, Ukraine, Romania and Hungary. The company will completely exit the region by June of this year. Cargill says exiting the business will impact about 180 employees. Cargill reported 25,000 employees in Europe, the Middle East and Africa last year and 150,000 worldwide, according to a 2015 corporate fact sheet. A statement by Cargill said, “the company will refocus its attention on its grain and oilseeds origination, merchandising and trading activities in these markets.” However, Cargill will continue to sell crop inputs in other countries, including the U.S. and Canada, where Cargill AgHorizons operates a network of facilities that buy grain from farmers and sell inputs.

Chinese CPI Falls Just Short Of Expectations

China’s consumer price index climbed 1.8 percent in January from the year prior, which was a 0.2 percent rise from December but 0.1 percent less than expected, according to data from the National Bureau of Statistics. The slight rise was primarily due to a 4.1 percent seasonal increase in food prices preceding the Lunar New Year celebration. Pro Farmers First Thing Today reports non-food consumer inflation was up just 1.2 percent in January from the year prior. The producer price index was down 5.3 percent from year-ago levels in January, which was a bit better than expectations for a 5.4 percent decline and a 0.6 percent improvement from December. Most believe the data adds to the case for more monetary policy easing.

National FFA Week Starts Saturday

FFA_logoNational FFA Week kicks off Saturday. The week runs February 20th to the 27th as FFA chapters around the country celebrate National FFA Week. The week-long tradition began in 1947 when the National FFA Board of Directors designated the week of George Washington’s birthday as National FFA Week. The designation was made in recognition of Washington’s legacy as an agriculturist and farmer. The first National FFA Week was held in 1948. Today, FFA Week always runs Saturday to Saturday and encompasses February 22nd, Washington’s birthday. Follow the National FFA Week conversation on Twitter by using hashtag #FFAweek.

USDA: Farm Sizes Increasing, Farms Decreasing

USDAThe annual USDA Farm and Land in Farms report shows the nation’s farms are getting bigger, and the number of farms is getting smaller. The report released Thursday by USDA shows the U.S. lost 18,000 farms last year compared to 2014 with a total estimated 2.07 million farms in the United States. The report shows that U.S. farmland decreased in 2015 by one million acre’s now totaling 912 million acres. The average farm size increased by three acres to 441 and almost 31 percent of all farmland was operated by farms with less than $100,000 in sales. Farms with sales of $500,000 or more operated 41 percent of all farmland. Texas has the most farms with more than 245,000. Meanwhile, Missouri came in second with more than 97,000 farms and Iowa was third with 88,000 reported farms. Alaska had the least amount of farms reported at 760.

Top House Democrat Opposes TPP

tppHouse Ways and Means Committee ranking Democrat Sander Levin of Michigan said Thursday the Trans-Pacific Partnership “falls short of an acceptable outcome.” He cited four areas where the agreement failed to make improvements, according to a report by The Hill. Those issues being workers’ rights, rules of origin for automobile parts, currency manipulation and the investment chapter that he claims endangers U.S. laws on the environment and health. The 12 member nation pact that includes the United States represents nearly 40 percent of the global gross domestic product or GDP. Levin was not a likely candidate to support the trade pact; he opposed Trade Promotion Authority last year that forces Congress to a simple pass-fail vote with no debate. The trade deal faces a rough road to passage as congressional leaders say a vote is not likely until after the November elections, possibly under a new president. Levin did say he expected talks to heat up in the coming weeks as “lobbyists storm Capitol Hill” to sway lawmakers to take their sides.

Death of SCOTUS Justice Shakes up Water Docket

Scalia- photo Steve Petteway, Staff Photographer of the Supreme Court
Scalia- photo Steve Petteway, Staff Photographer of the Supreme Court

The death of Supreme Court Justice Antonin Scalia may be a major victory on water law for the Obama administration. Politico reports Scalia was the foremost critic of federal wetlands regulations who helped move the court away from an expansive interpretation of the law. With a divided court following his passing, the court could leave lower court rulings standing or simply avoid making a decision. The controversial Waters of the United States rule is working its way through the courts, but case regarding the rule likely won’t reach the high court until 2017 at the soonest, when a Scalia successor may already be named. However, there is a chance the high court would be asked to appeal a technical ruling from the sixth circuit sooner sometime this year.

Hemp Could Soon be Tradeable Commodity

HempSeed CX has applied to become a trading venue for industrial hemp. Seed CX filed a draft application with the US Commodity Futures Trading Commission to create an exchange-like trading platform established under the 2010 Dodd-Frank financial reforms. The cousin plant to marijuana is found in products such as fabric, shampoo, plastics, building materials and even food. The Financial Times reports Brian Liston, Seed CX president, hopes to offer three contracts tracking markets for hemp seed, whole hemp plant and hemp plant extract. Through fundraising, Liston, and his co-founder has mustered more than $3 million to create the exchange. Meanwhile, 27 states have passed laws related to industrial hemp as Kentucky, Tennessee and Colorado accounted for most of last year’s crop. Hemp production in the U.S. previously peaked at more than 150 million pounds during the Second World War.

China Prepping to Sell Reserves of Corn

China is reportedly preparing to sell aging stockpiles of corn to companies to churn out products such as ethanol or starch, according to a report by Reuters. The move would come even as a stockpiling scheme to support farmers is expected to add record amounts of new grain. The government has yet to finalize the volume or prices for the sales but did ask selected firms to take part. China is the world’s largest buyer of corn and corn substitutes and any significant change in grain use could impact demand for imports. Beijing is holding about 10 million tons of aging corn that has been stored for more than three years. China has more than 200 million tons of corn stored overall or more than one-years’ worth of consumption. The upcoming sales would be months earlier than the government’s regular annual sales which usually begin after April.

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