July 26, 2017

EPA Releases Proposed Renewable Fuel Volume Obligations

The Environmental Protection Agency on Wednesday released their proposed Renewable  Volume Obligations (RVO) for 2018.  The numbers were largely steady with the 2017 requirements with a few small tweaks to biomass based products.  Overall, the total RVO will drop from 19.28 billion gallons down to 19.24 billion.  Within that amount, the traditional corn based ethanol mandate will remain at 15 billion gallons but blend volumes for biomass based biodiesel will decline from 4.28 billion gallons in 2017 to 4.24 billion gallons.  The mandate on cellulosic ethanol too the biggest percentage hit with a target of 238 million gallons, down 73 million from last year.

The release of the proposed mandates is the first for the Trump Administration which took office this past winter.  It comes as a relief to some who had feared that Trumps pick of Scott Pruitt could mark the end of the Renewable Fuels era as agriculture knew it.  Pruitt had served as attorney general for fossil fuel state Oklahoma, although he pledged during his confirmation hear to leave renewable fuels policy intact.  He backed that up again in his statement Wednesday saying, “Increased fuel security is an important component of the path toward American energy dominance”  He said the new proposed targets would further that goal.

The National Corn Growers Association gave their endorsement.  President Wesley Spurlock, of Texas, issued this statement:

“We are pleased to see EPA pick up where last year’s RFS rulemaking left off and propose a rule that keeps the RFS on track for conventional ethanol production. EPA’s proposal is good for farmers who are facing tough economic times and good for consumers who want affordable fuel choices that give us a cleaner environment”

“The Renewable Fuel Standard has been a resounding success: cleaner air, greater energy independence, and stronger rural communities. We call on the EPA to keep the RFS moving forward in line with the law and in a timely manner. Doing so will bring greater stability and certainty to the marketplace and spur increased investment in renewable fuels.”

The RVO’s are mandated by statute to be finalized by November of the year prior to implementation.

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Vince Peterson Becomes President of US Wheat Associates

On July 1, 2017, Vince Peterson became the fourth President of U.S. Wheat Associates (USW) since the organization was formed in 1980 by the merger of Great Plains Wheat and Western Wheat Associates. Peterson replaced Alan Tracy who retired as President after 20 years. Tracy will serve as a Senior Advisor with USW for the foreseeable future. 

The USW President serves at the pleasure of the U.S. wheat farmers on its Board of Directors and is responsible for implementing board-directed policies and for managing staff, export market development programs and finances. The USW directors unanimously selected Peterson as the next President in November 2016. 

“I am very optimistic about the long-term opportunities for U.S. wheat exports as I start my tenure as President,” said Peterson, who has been with USW for 32 years and served most recently as Vice President of Overseas Operations. “The farmers we represent produce the variety and quality of wheat needed to meet rapidly growing demand around the world. Under Alan’s leadership, and with amazing support from our farmer leaders and wheat commission members, we built a strong base of export sales and talented staff that are well prepared and strategically placed to take advantage of this opportunity.”

Looking back, Tracy said adjusting to the shift from government to mainly private importing was one of the big changes since he joined USW in 1997.

“I am proud that we are able to pass along to Vince a worldwide team that continues to provide trade and technical service that build a preference for U.S. wheat in an increasingly competitive and sophisticated world market,” Tracy said. “I am also pleased that we were able to play a role in the demise of the trade-distorting Australian Wheat Board monopoly and see the Canadian government choose an open market for its wheat industry.”

Trade policies will have an increasing influence on global wheat trade, Tracy noted. He cites the significant market distortion from excessive domestic subsidies and other policies by China, India and other developing countries that are cutting into U.S. wheat farm income.

“USW helped blow the whistle on these policies and the U.S. government is now pursuing disputes cases against China at the World Trade Organization,” he said. “Enforcement of existing trade agreement rules is vital in today’s trade environment and will grow even more important in the future.”

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” Its activities are made possible by producer checkoff dollars managed by 18 state wheat commissions and through USDA Foreign Agricultural Service cost-share funding. For more information, visit www.uswheat.org or contact your state wheat commission.

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Nation’s Hard Red Spring Wheat Conditions Lowest Since 1988

The drought affecting the Dakotas this summer continues to impact crops and pasture conditions, despite rains that fell late last week.  That’s according to the weekly Crop Progress numbers released Monday by the National Ag Statistic Service.  In the agency’s weekly crop progress report, the both North and South Dakota as well as Montana garnered national attention as ratings of Hard Red Spring wheat fell a whopping 10% week over week to just 45% good to excellent and the lowest rating since the historic drought of 1988.

The worst hit area continues to be South Dakota where Hard Red Spring is now rated 57% poor to very poor and just 11% good to excellent.  Montana was the next hardest hit, now 31% poor to very poor and 23% good to excellent down sharply from 43% good to excellent just one week ago.  North Dakota reported 45% good to excellent and 17% poor to very poor with the Northeastern corner providing most of the support in ratings.

For livestock producers, there wasn’t much good news either.  South Dakota showed some minor improvements with pasture and range conditions improving by 5% out of the poor to very poor category.  Still 45% of the state is reporting heavily stressed grazing areas with another 29% considered only fair.  In North Dakota, 53% of the state is reporting poor to very poor pasture and range land with only 18% good to excellent.

Other crops weren’t exempt as South Dakota corn conditions were 45% good to excellent with North Dakota 58% good to excellent.  Nationally, however, things looked much better with 67% of the crop rated good to excellent and broad coverage of rains through this week expected to improve that number next Monday.  Despite the wet start for much of Illinois and Indiana, producers there are reporting the further moisture will be welcome.

Monday was also the initial release of soybean conditions for the 2017 season.  At 66% good to excellent, the crop is just below the five year average of 68%, but still viewed to be in “ok” shape, according to analysts.

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