Washington Report for 2-24-14

U.S., Canada, industry ramping up on PEDv; Canadian company recalls feed

Porcine epidemic diarrhea virus (PEDv), first detected in the United States in April, 2013, is stressing all components of swine production as it’s estimated anywhere from 1 million to more than 4 million piglets have died from the almost-always fatal, swift-moving virus.  The U.S. Department of Agriculture attributes a forecast drop of about 1 percent in 2014 pork productionto the PEDv outbreak.

USDA and the Canadian Food Inspection Agency are accelerating their cooperative testing efforts. More than 2,700 outbreaks have been recorded in 23 states. CFIS last week announced it’s stepping up testing to see if a contaminated feed may have been a contributing factor in recent Canadian outbreaks.

The Canadian agency said it has increased testing of a “U.S.-origin” plasma contained in a swine nursery feed produced by Grand Valley Fortifiers, an Ontario feed company. CFIA said additional testing will be needed to ascertain if the pellets could have contributed to the outbreak. 

Grand Valley, however, has voluntarily recalled its pelleted nursery feeds containing refined blood plasma, included generally to boost piglet antibodies post-weaning. 

“We believed the most prudent approach, given the information we had, was to inform customers to stop feeding those products and to recall them, out of an abundance of caution and a desire to protect our customers’ businesses,” said Grand Valley CEO Ian Ross in an interview on the PORKNetwork.

Syngenta/Gavilon Grain form partnership on GE corn market assurance

Syngenta has formed a partnership with Gavilon Grain LLC to ensure farmers growing Syngenta’s new rootworm-resistant corn have a market for their production, including overseas.  The partnership comes as some nations, mainly China, have rejected the Syngenta corn for import because the genetically modified variety is not yet approved in their countries.

The Gavilon agreement is part of Syngenta’s “Right to Grow” program, which is designed to assist farmers growing its Agrisure Duracade corn that they can market the product as broadly as possible. The National Corn Growers Association and the American Farm Bureau Federation  both praised the Syngenta move. 

New farm bill in place, USDA forecast includes greater 2014 prices drops

Corn prices will average $3.90 per bushel this crop year, down from over $4.50, according to U.S. Department of Agriculture forecasts. Average wheat prices will also drop to $5.30 a bushel, while soybeans will average $9.65 per bushel.

The price forecast was part of a USDA 2014 Outlook Conference presentation last week by the department’s chief economist and reflects greater average price declines than a previous forecast due mainly to refiguring since the 2014 Farm Bill was signed by the president. The forecast price levels also indicate the likelihood of higher federal payments under the new farm bill’s Agricultural Risk Coverage option.

The report shows reduced corn plantings in 2014 at 92 million acres, a drop of about 1.5 million from previous numbers. Part of this drop is attributed to the new acreage flexibility rules contained in the 2014 Farm Bill that indicate most corn acres will shift to soybeans.

EPA proposes new pesticide farm worker exposure rules

The U.S. Environmental Protection Agency is proposing new rules that would protect more than 2 million farm workers from pesticide exposure.

The proposed rules, which come after more than a decade of study and public input, will include new provisions on how to prevent and treat pesticide exposure, primarily due to pesticide overspray and fumes. The agency further proposes that children under 16 be permanently barred from handling category I and II pesticides; however, “family farms” would be exempt.   Other provisions include the following:

• Annual pesticide handling training instead of the current five-year requirement
• Mandatory posting of “Do Not Enter” on fields sprayed with chemicals
• New no-entry buffer areas to protect from overspray and fumes
• Documentation and recordkeeping for minimum of two years for training records, dates and labeling
• Data on pesticide dangers, effects and other information to be made available to families and caregivers of workers affected by pesticide exposure.

The agency proposal is found at www.epa.gov/oppfead1/safety/workers/proposed/index.html.

White House moves to speed up California drought assistance

President Obama said he’ll order the U.S. Department of Agriculture make all California drought disaster assistance programs operational within 60 days. The order also will make disaster assistance available to other states, satisfying a growing congressional demand from disaster-hit states for accelerated assistance.

In a related development, California Gov. Jerry Brown unveiled a $687-million proposed state package last week aimed at speeding up the spending of assistance dollars on projects designed to improve water conservation, cleaning drinking water supplies and increasing penalties for illegal diversion of water.

Most of the new federal programs, including livestock disaster assistance, are part of the recently enacted 2014 Farm Bill, and Secretary of Agriculture Tom Vilsack said the department will be ready to begin accepting applications in April rather than the six to eight months it would normally take to get the programs up and running. The programs cover dead livestock, tree loss, forage and animal feed costs and could amount to about $100 million in 2014.

In other states, aid will be available for recent losses retroactive to 2012, including blizzard losses in the Dakotas and Nebraska.

Competing bills in Congress, however, are not predicted to move quickly. The White House rejected a bill by Rep. David Valadao (R-Calif.) to end state-federal water sharing restrictions and override certain state water authority programs and decisions. A separate $300-million emergency assistance bill by Sens. Dianne Feinstein (D-Calif.) and Barbara Boxer (D-Calif.) is getting White House study. 

Senate biodiesel producer tax credit bill introduced

Legislation aimed at reinstating the biodiesel/renewable diesel $1-per-gallon federal tax credit, but shifting it to benefit biofuels producers not blenders, has been introduced by Sens. Charles Grassley (R-Iowa) and Maria Cantwell (D-Wash.). 

The bill seeks to put back in place for three years the tax benefit allowed to lapse at the end of 2013, but instead of the break going to the petroleum company blending the biodiesel with gasoline – oil companies would be barred from getting the credit – the tax break goes to the biodiesel producer. Also, the credit would only be available to U.S. producers.

The bill would also increase the tax credit to $1.10 for the first 15 million gallons produced by a small entity, defined as a company with an annual capacity of less than 60 million gallons. The definition of “biodiesel” is simplified to ensure that any biomass-based feedstock or recycled oils and fats qualify.

Grassley said industry growth stagnated when the credit was allowed to lapse in 2012. When the credit was reinstated in 2013, the biodiesel industry increased production from 1.1 billion gallons to over 1.8 billion. 

“Biodiesel is America’s first biofuel, which can be made from a variety of feedstocks such as cooking grease and soybeans,” Cantwell said. “This legislation gives business the certainty to invest in biodiesel.”

Renewable fuels industry aggressively defending RFS; EPA hints at proposal increase

The president of the Renewable Fuels Association said the U.S. Environmental Protection Agency's proposed decrease in the renewable fuel standard (RFS) for corn ethanol is “an inexplicable step backwards to what has been an overwhelmingly successful program.” 

RFA President Bob Dineen said at the National Ethanol Conference: “All we ask of Washington is one thing – keep your word. It’s that simple,” referring to mandatory RFS levels set in the 2007 law creating the RFS.

In related developments, recent statements by EPA Administrator Gina McCarthy and others within the agency indicate EPA is likely to adjust upwards RFS levels in its fall, 2013 proposal.  However, because the proposed RFS rule received more than 22,000 comments, it may not be until late summer before any final RFS levels are announced to 2014. 

At the same time, RFA released a study showing the positive impacts of ethanol on the U.S, economy, including jobs, household income and foreign oil displacement. Dineen said the report should “silence the opposition” and also listed several non-corn ethanol and non-food biomass-based biofuel plants either just online or about to come online.

The U.S. Department of Agriculture's chief economist said ethanol production will continue to grow over the next decade to build exports and meet growing international demand.

White House announces plans for new truck fuel efficiency standards

Plans to set new, strict fuel efficiency standards for heavy trucks and buses were unveiled by the U.S. Environmental Protection Agency and the Department of Transportation last week, aimed at further reducing carbon emissions and reliance on foreign oil imports. The first draft of the new proposal is to be available by March 2015 and go into effect a year later.

President Obama announced the new standards standing on the loading dock of a grocery distributor in Maryland and said the new standards are the second phase of reducing truck and bus pollution. In 2011, EPA set a goal of reducing truck emissions by 20 percent by 2018, requiring an 8-mile-per-gallon increase in efficiency by manufacturers. That move only applied to trucks built in 2014-2018. 

FDA, USDA agree AMS will certify feed, pet food exports

The Food and Drug Administration and U.S. Department of Agriculture have agreed that the USDA’s Agricultural Marketing Service will have the authority to audit, register and certify animal feeds and pet food for export. The agreement was modeled after the existing USDA/FDA agreement on egg exports.

The American Feed Industry Association and the Pet Food Institute, both intimately involved in the evolution of the FDA-USDA agreement, praised the new AMS program.

The agreement does not cover all feed products and ingredients moving to all countries but will be used on a case-by-case basis, AMS said. Industry will work with AMS to identify which nations’ requirements require the special AMS certification. When AMS is involved, the program covers feeds, pet foods and treats, dried distillers’ grains with solubles, mixed ingredient feeds and feed additives.

The cooperative program was developed because an increasing number of foreign nations are requiring formal government certifications to meet internal requirements. AMS was chosen because it’s developed such U.S. certifications before.

“USDA’s AMS has unique capabilities in working with stakeholders to develop export certification programs that meet the specific requirements of other countries. With years of experience certifying agricultural products for export, AMS will now expand its services to support the trade of animal feed and feed ingredients,” said AMS Administrator Anne Alonzo. 

Ag census shows farm numbers drop, size holds steady, farmers get older

Preliminary data from the 2012 Census of Agriculture released last week shows the number of U.S. farms has dropped, while existing farm size is holding fairly steady larger overall. At the same time, the average age of a U.S. farmer is creeping upward.

However, the U.S. Department of Agriculture cautioned the numbers may be a bit skewed given “the 2012 census was not conducted in a typical crop year, and drought had a major impact on U.S. agriculture, affecting crop yields, production and prices.”

The United States had 2.1 million farms in 2012, down 4.3 percent from the 2007 census report, confirming the long-term trend in lower farm numbers. The average size of a U.S. farm increased from 418 to 434 acres. The number of acres overall dedicated to farming declined from 922 million acres five years ago to 915 million acres in 2012. 

The value of ag products sold in the United States totaled $394.6 billion, up 33 percent from the 2007 report. Crop sales outstripped livestock sales for only the second time in census history; crops accounted for $212.4 billion and livestock sales contributed $182 billion.

The “principal farm operator” profile is shifting, with the average farmer age set at about 58, about 1.2 years older than in 2007, with a third of farmers over age 65. A small rise in the number of farmers 25 to 34 years old was recorded, and there were more minority farms operating in 2012 than in 2007. 

The 10 states with the most farms, in order, are Texas, Missouri, Iowa, Oklahoma, California, Kentucky, Ohio, Illinois, Minnesota and Wisconsin. Only Ohio is new to the list since 2007.