In a move that will rile opponents of corn-based ethanol, EPA this week approved the first application for registration of an 85/15% blend of gasoline and ethanol (E15), the formal agency move to erase the 10% blend rate in place for years. The new fuel would be allowed in cars and trucks made in 2001 or later, the agency said. EPA said the Obama Administration is backing the E15 move by "helping" fuel station owners to install upwards of 10,000 blender fuel pumps around the country over the next five years through programs at DOE and USDA. Before the new fuel blend can be sold, manufacturers must "help to ensure" retail stations and gasoline distributors "understand and implement labeling rules." The E15 action follows two previous waivers by the agency that allowed the 15% ethanol blend to be used in the newer vehicles. It can't be used in motor vehicles made before 2001, in off-road vehicles and equipment that includes boats and lawn/garden equipment. Details can be found at www.epa.gov/otaq/regs/fuels/additive/e15.

"You have to be passionate about it. You have to be more vocal about it," urged Secretary of Agriculture Tom Vilsack last week in an address to the Advanced Biofuels Industry Conference as he told them they have to convince the public biofuels do not compete with consumer food availability while defending the Renewable Fuels Standard (RFS). He also announced an Advanced Biofuels Industry Roundtable May 18, in Washington, DC, as the "next step in the partnership with the private sector" to produce alternative fuels for military and commercial transport. And while Vilsack was giving communications advice to the biofuel industry, a broad coalition of ag associations, hunger and development organizations, business, budget and free market groups told the Congress in a letter this week that any effort to include or expand federal support for corn ethanol is a nonstarter.  

 

Vilsack continued to tell the ethanol producers that biofuel is only responsible for about 4% of the increase in food costs due to higher corn prices, explaining overall higher energy costs as an input to food processing is responsible for the price spike, and that biofuels can help reduce these energy costs. On the RFS, Vilsack told the group it's vulnerable to attack, calling it the "lynchpin" of the bioenergy industry. The anti-ethanol subsidy coalition told congressional leadership it specifically opposes any move to renew the Volumetric Ethanol Excise Tax Credit or any other tax subsidy; any change to the RFS in a way that allows corn ethanol to be defined as an "advanced biofuel;" any expansion of current alternative fuel tax credits that would allow ethanol blends or related infrastructure projects to qualify for the credit, and any funding for ethanol "blender pumps" or any other infrastructure projects.

 

Its detailed roadmap to reinventing the Conservation Reserve Program (CRP) to free up arable acres was transmitted this week to the Senate Agriculture Committee by the National Grain & Feed Assn. (NGFA). NGFA is one of the leaders among several industry organizations in livestock, poultry, feed manufacturing, grain storage and grain/oilseed processing which participate in a coalition that's pushed CRP modernization for years. NGFA cited a Natural Resources Inventory report from 2009 that estimates there are currently 7.1 million acres of "prime farmland" - Land Classes 1 and 2 - enrolled in the CRP, land suitable for row crop production and needed for feed, food, biofuels and exports.  

 

Specifically, NGFA called for a prohibition on Land Classes 1 and 2 from future enrollments or reenrollment; elimination of USDA's authority to exceed the 25% limit on CRP enrollments in specific counties, and include with the county limit at least a 5% allowance for acres enrolled in wetlands reserve and continuous sign-up; mandate USDA permit penalty-free early outs on Land Classes 1, 2 and 3, provided producers are required to implement "prudent conservation practices;" restrict whole-field and whole-farm enrollments by requiring land to undergo a more stringent environmental benefits (EBI) evaluation rather than partial-field enrollments, and guidance to USDA to freeze CRP rental rates for three to five years or implement a percentage-based limit on rental rates compared to average county rental rates to help young and beginning farmers compete against the government for acres, while limiting CRP general sign-ups.

 

A House Agriculture Committee Farm Bill field hearing in Jonesboro, AR, late last week brought strong evidence that getting a 2012 Farm Bill hammered out between the midwestern and southern farmers is going to be tough. Meanwhile, the Senate Agriculture Committee staff is using the two-week congressional spring recess to try and hammer out a direct payment program/income safety net replacement that will make all its members happy so Chair Debbie Stabenow (D, MI) can get her bill to the floor after markup beginning the week of April 23.  

 

The House Ag field hearing witnesses told the committee solutions which work for midwestern farmers don't or won't work for southern and midsouth producers. And while one cotton industry executive told a meeting in Texas that midwestern interests were ignoring southern concerns - "They're trying to take the money that's in the baseline for rice, peanuts and cotton in order to enrich their revenue programs," alleged National Cotton Council President Mark Lange at the annual meeting of Plains Cotton Growers, Inc., in Lubbock, TX - farmers from six southern states told the House ag panel a one-size-fits-all approach to replacing direct payment programs is the wrong way to go.  

 

The Arkansas Farm Bureau said Congress needs to take into account the needs of each commodity and each region in crafting programs, and told committee Chair Frank Lucas (R, OK) it doesn't agree with the American Farm Bureau Federation's "deep loss" approach to program replacement because "it just really doesn't work for some of our commodities." One Missouri grower said a single program approach "picks winners and losers," while others said the cotton industry wants to see a new program built off crop insurance. On the Senate side, a letter coordinated by former ag committee chair Sen. Saxby Chambliss (R, GA), senior champion of southern agriculture, and sent to Stabenow and ranking member Sen. Pat Roberts (R, KS) garnered several other committee member signatures in urging any replacement for direct payment programs must be "equitable" and take into account regional and commodity differences.

With farmers across the country taking advantage of early spring weather, USDA reports 3% of the corn crop is already planted on what USDA estimates will be 95.9 million acres, up 4% from last year and on track to produce an average of 164 bushels per acre or a record crop of 14.4 billion bushels. As surprising as the plantings number was to most, the soybean prospective plantings number also raised eyebrows, with USDA reporting a lower-than-expected number at 73.9 million acres. Rabobank's research team was less optimistic on corn yields, pegging per-acre production at about 156 bushels per acre, according to Agri-Pulse.  

 

USDA said the bulk of increased corn production is in North Dakota, Nebraska, Ohio, Iowa and Minnesota. Meanwhile, USDA reported old crop corn stocks remain tight at just above 6 billion bushels, lower than last year's 6.52 billion at this point in the year, with independent experts predicting more tightening as ethanol production continues stronger than last year. Corn use December, 2011 through February, 2012, was about 3.64 billion bushels compared to 3.53 billion during the same period last year. Soybean and wheat stocks are "more than ample," analysts said.

While the Commodity Futures Trading Commission (CFTC) continues to wrestle with both basic and arcane regulations required under the Dodd-Frank Act, the House last week overwhelmingly approved two bills designed to modify CFTC authority and regulatory definitions. Approved by the House were HR 2779 exempting from new rules so-called "inter-affiliate" swaps traded among companies or divisions under common ownership, and HR 2682, which clarifies end-user exemptions from margin requirements, but which some believe will set legal grounds for expanding these exemptions to financial institutions. There are two other CFTC bills awaiting House floor action, and four others awaiting committee hearings and markup.

The California Department of Food and Agriculture (CDFA) Fertilizing Materials Inspection Program (FMIP) started implementing the provisions of Assembly Bill 856 (AB 856) on January 1, 2012. Any bulk or packaged fertilizing material that is to be used in organic crop and food production will require registration with CDFA as an Organic Input Material, as stipulated in Section 14550.5 of the Food and Agricultural Code (FAC). This includes registration of commercial fertilizers, bulk agricultural minerals and bulk soil amendments for organic crop and food production. Information regarding AB 856 and the Fertilizing Materials Law and Regulations can be found on our website at

If your company is not currently licensed by CDFA to sell and distribute fertilizing materials, a license must be obtained for each plant and business location. A Fertilizing Materials License is valid for a two-year period from January 1 of each odd-numbered year to December 31 of the next even-numbered year. Refer to Section 14591 of the FAC.

The fertilizing materials license and registration applications can be completed by visiting our Online FFLDERS Database at http://cdfa.ca.gov/is/apply_register.html (select Visit the New FFLDERS Database). Enrollment as a new user is required to receive a user identification and password. You can apply for a fertilizing materials license by selecting "Add Fertilizing Materials" under the "LICENSES" heading. The licensing fee is $100 per license. To apply for label registrations, select "Register Fertilizing Materials" under the "PRODUCT REGISTRATION" heading. The registration fee for OIM is $500 per product label.

If you have any questions, you may contact CDFA staff at (916) 445-0444.

With two House members introducing legislation to stop USDA's efforts to close facilities as part of an efficiency move and slammed because his office didn't respond to formal Senate inquiries until the day before the hearing, Secretary of Agriculture Tom Vilsack took significant heat last week from Senate ag appropriators during his appearance to talk about FY2013 spending. At issue is USDA's announcement it's closing 131 county Farm Service Administration (FSA) offices across the country while at the same time slashing spending for the Animal & Plant Health Inspection Service (APHIS) and the Agricultural Research Service (ARS). Vilsack said he needs the flexibility to make his "Blueprint for Stronger Service" work, but Sen. Mark Pryor (D, AR) cut the secretary no slack alleging Arkansas is taking a bigger hit than most states as Vilsack strives for "stronger" service. Vilsack countered Congress has cut his budget several times and he has to cope with doing more with less, but was surprised when Sens. John Hoeven (R, ND) and Roy Blunt (R, MO), the subcommittee's ranking member, seriously criticized the Administration for its cuts in ag research. Pryor chimed in, asking the Secretary, "Are y'all just getting out of the research business?" The House legislation to block Vilsack's blueprint was introduced by Rep. Rick Crawford (R, AR) and Rep. Leonard Boswell (D, IA).

In yet another move to make it illegal for a packer to own livestock headed to slaughter, Rep. Bruce Braley (D, IA) introduced legislation that would make slaughter livestock ownership illegal in a move to "protect family farms" and thwart increased integration of cattle and pork operations in Iowa and elsewhere. Braley's bill comes on the heels of similar legislation introduced in the Senate last month by Sens. Tom Harkin (D, IA) and Chuck Grassley (R, IA). Braley, who called his bill a "common sense approach" to a growing problem, would exempt single packers too small to participate in the USDA Mandatory Price Reporting Program, and would also exempt ag cooperatives where the members own, feed or control the livestock themselves.  

 

The National Pork Producers Council (NPPC) said of the Braley bill: "There's nothing common sense about the federal government telling pork producers they can't enter into contracts to sell their hogs to meat packers. We're surprised someone who represents one of the country's top pork producing districts would introduce such a bill." NPPC says the effect of such an ownership ban would be to increase packer costs, which in turn increases producer costs, putting some producers out of business, decreasing competition and increasing vertical integration.

   

CGFA's membership committee is pleased to announce a new member recruitment campaign. All Active CGFA Members are eligible to compete in this contest beginning April 1, 2012. As a member, you can get involved and help support & promote our AG Industry's growth and development.  Compete against your friends in the industry and be one of the top three winners for the most new member recruits between April 1, 2012 and December 1, 2012. Prizes will be awarded to the top three recruiters (see contest flyer attached for prize description).

 

It's easy to recruit a new member! Simply forward the "CGFA Membership Application" to your colleagues and remind them to write your name at the bottom mentioning you as the "Referral / Sponsor" person. Submit the application! (Application)

 

We hope to see your name in the spotlight!