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EPA Approves California Plan Requiring Half of Heavy Duty Trucks be EV

Sun, 02 Apr 2023 19:01:40 GMT

EPA on Friday said it was approving California’s plans to require a rising number of zero-emission heavy-duty trucks as the state pushes to cut pollution. Governor Gavin Newsom said as a result of the plan, “half of all heavy duty trucks sold in California will be electric by 2035.”

EPA said it is not yet approving California’s request to set new regulations on pollutant exhaust emission standards for nitrogen oxide (NOx) and particulate matter for 2024 and future medium- and heavy-duty engines and vehicles.

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Angst Against EPA’s Renewable Diesel Plan

Fri, 13 Jan 2023 14:36:56 GMT

EPA heard complaints about its proposed levels under the Renewable Fuel Standard (RFS) for 2023, 2024, and 2025 relative to renewable diesel and sustainable aviation fuel (SAF) during public hearings. Critics told EPA in the public session the agency has underestimated the existing or expected industry capacity.

“There is over $4.75 billion invested in oilseed processing expansions and new construction,” Paul Winters of Clean Fuels Alliance America told EPA. “Some of that could be delayed or possibly canceled in response to the proposal.” The EPA proposal, Kent Engelbrecht of ADM said, “underestimates our ability to produce both feedstocks and finished renewable fuels.”

The EPA plan implies modest growth in the sector, with EPA stating in its proposal it had doubts the announced expansion in the sector will actually be built due to costs of sourcing feedstocks, primarily seen as vegetable oils like soyoil and canola oil.

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Black Sea Shipping Rates Rise as Reinsurers Cut Coverage

Tue, 10 Jan 2023 04:16:57 GMT

Costs for hiring ships to transport commodities from the Black Sea have risen by more than one-fifth since the start of the year, Reuters reported, reflecting higher war risk insurance rates, industry sources said. The Black Sea is crucial for the shipment of grain, oil and oil products. Its waters are shared by Bulgaria, Georgia, Romania and Turkey, as well as Russia and Ukraine. Since Jan. 1, when policies are renewed, reinsurers that provide financial protection for insurance companies have added exclusions for ships and planes for Belarus, Russia and Ukraine.

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Six insurance sources told Reuters an exodus of reinsurers from the market had added to unease over the risk of ship seizures by Russia and liabilities related to the war in Ukraine, including floating mines or vessels getting stuck in ports for long periods. Since the introduction of exclusions this year, insurers who provide cover will not have the cushion of reinsurance in the event of big claims. The sources said no vessels had lost their insurance provision, but they expected higher rates that would vary depending on specific circumstances, and that war risk premiums had so far risen by more than 20%.

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Ukrainian Ag Minister sees Big Fall in 2022 Corn Harvest, Smaller Area in 2023

Thu, 22 Dec 2022 14:54:30 GMT

Ukraine’s corn production could fall to 22 MMT to 23 MMT this year from 41.9 MMT in 2021 because of a reduction in the harvested area caused by Russia’s invasion, Agriculture Minister Mykola Solsky told Reuters. The ag ministry previously said it expected to harvest around 25 MMT of grain this year. Solsky said farmers, facing a lack of fuel and funds, had left a lot of corn in their fields. These areas could be harvested by spring, but “it means less volume and worse grain quality.”

As of Dec. 15, farmers had harvested 18.4 MMT of corn from 70% of planted acreage. Ukraine harvested 19.4 MMT of wheat and 5.6 MMT of barley this year. Total grain output stood at nearly 45 MMT.

Ukraine could export 49.2 MMT of grain in 2022-23, depending on logistics.

Solsky said a large area of unharvested corn would prevent farmers from sowing corn again on these fields, with sunflowers a possible replacement crop next spring.

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Tougher EPA Emission Rules for Trucks

Thu, 22 Dec 2022 14:50:52 GMT

EPA as expected on Tuesday released final tailpipe emission rules for trucks, which some health and environmental groups say don’t go far enough to be adequately protective. The final rules for nitrogen oxide emissions are 80% more stringent than current standards, which haven’t been updated for more than 20 years, according to an EPA press release. This action begins reductions by model year 2027 and is the first of three in the agency’s Clean Trucks Plan. The next action is projected for March 2023, according to EPA Administrator Michael Regan, speaking at a Tuesday press conference.

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Iowa Land Values Jump to a Record High

Wed, 14 Dec 2022 14:16:31 GMT

The 2022 Iowa State Land Value Survey shows the average value of an acre of farmland in the state jumped 17%, or $1,660, to a record $11,411 per acre. When adjusting for inflation, the 2022 average value surpassed the previous inflation-adjusted record set in 2013. While inflation was a major factor that drove the increase last year, Wendong Zhang, an associate professor of economics and faculty affiliate of Center for Agricultural and Rural Development (CARD) at Iowa State University, said that it did not play as much of a factor as commodity prices, limited land supply and low interest rates through summer 2022.

Zhang, who is responsible for conducting the annual survey, said: “The Federal Reserve seems to be determined to keep raising interest rates until they get a firm control on inflation. This is a tricky balance because larger and quicker interest rate hikes run the risk of slowing down the economy, potentially to a recession.” While he noted higher interest rates put downward pressure on the land market, the effects typically don’t show up in land prices for one or two years. Plus, 81% of Iowa farmland is fully paid for, so the higher interest rates don’t always affect farmers’ land purchasing decisions. Furthermore, a significant portion of respondents said that cash on hand was a positive factor influencing land values. “Farmers have a lot more cash on hand and supply chain issues led to a shortage of equipment, so the money that farmers normally spend on equipment is now devoted to land,” Zhang said.

Some 70% of survey respondents feel that current land values are “too high” or “way too high.” Still, t 48% of respondents expect an increase in farmland values one year from now, while 24% anticipate no change and 28% expect lower values. Most respondents expect the one-year value to either be the same or increase roughly 5% to 10%. Looking five years ahead, 60% of respondents believe land values will increase 10% to 20% from current values, while about 24% forecast a decline in prices.

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Nutrien Expects 'normal' Fertilizer Prices in 2023

Wed, 14 Dec 2022 14:16:12 GMT

After a year of price volatility for agricultural inputs, 2023 is set to be a “normal” year for fertilizer and pesticide costs, an official at top Canadian fertilizer maker Nutrien told Reuters.

“The war in Ukraine generated all sorts of expectations around a shortage of products. After May, prices began to fall,” Nutrien CEO for Latin America Andre Dias said. He added that 2023 will be a more normal year with less volatility than 2022, with a more “settled” market despite what Dias said was expected Russian surcharges on fertilizers.

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Biden to Call on Congress to Intervene in Rail Labor Dispute

Mon, 28 Nov 2022 23:03:57 GMT

With less than two weeks from a railroad strike deadline, President Biden plans to call on Congress to take action to avert a shutdown of the country’s freight railroads, the Washington Post reported, citing an official briefed on his plans. Union officials have said it’s looking increasingly unlikely the unions and major rail freight carriers would reach a deal over lingering issues before a Dec. 9 strike deadline, renewing pressure on Congress and the White House to intervene.

Four out of 12 unions that represent the majority of U.S. freight railroad workers have voted down tentative agreements, brokered by the White House, citing frustration over lack of paid sick time and punitive attendance policies. All twelve unions need to vote individually to ratify their contracts. If one union moves to strike, all of the unions — which represent more than 115,000 rail workers — would likely move in solidarity, triggering an industry-wide work stoppage.

It remains unclear what Congress would impose, but it would likely be a version of an agreement recommended by a Biden-appointed board earlier this year that was rejected by the unions. Some unions have been lobbying Congress in recent weeks to add paid sick days to the deal.

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Cargill CEO: Doesn’t Have to be Food vs. Fuel

Mon, 21 Nov 2022 14:17:13 GMT

Food prices will probably decline next year, even as global crop stockpiles stay very tight, especially for oilseeds, said David MacLennan, CEO of Cargill. “All it takes is one really bad crop, let’s say in North America or South America, to really send prices higher,” he said at the Bloomberg News Economy Forum in Singapore on Wednesday. MacLennan said the solution to the food-versus-fuel debate is to boost global crop production. “We don’t think it’s going to be an either/or dynamic,” he said. “It can be food and fuel.” Regenerative agricultural practices, greater yields and more use of technology can increase output so that it can meet demand from both sectors, he said.

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Threat of a Nationwide Strike by U.S. Freight Railroad Workers Still Looms

Fri, 04 Nov 2022 19:41:14 GMT

Two unions have rejected a proposed deal with railroads, while six have approved it. Others are still deciding, with votes of the two largest rail workers’ unions coming mid-November. The earliest a rail strike could happen is late November. All 12 unions must approve the contracts with the railroads to prevent a strike.

There is no immediate threat of a walkout because the unions agreed to return to talks through at least late November to avoid an economically crippling strike. If the impasse persists, Congress may intervene and block a strike. Some of America’s top agricultural transporters are calling on congressional leaders to take swift action to avert a rail strike. A strike or lockout “would be catastrophic for the agricultural and broader U.S. economies. Congress must act to prevent this from occurring if the parties cannot reach agreement,” they said in a letter to congressional leaders.

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‘Dark clouds’ for Trade

Thu, 03 Nov 2022 15:56:31 GMT

Shipping giant Maersk on Wednesday warned of gloomy times ahead for global trade, even as it reported record profits stemming from high rates charged by its ocean business. “With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon,” Søren Skou, the CEO of the Danish company, said in a statement.

“It is clear that freight rates have peaked and started to normalize during the quarter, driven by both decreasing demand and easing of supply chain congestion. As anticipated all year, earnings in Ocean will come down in the coming periods,” Skou said. Global container demand is estimated to contract between 2% and 4% in 2022, down from a previous projection of +1% to -1%, though Maersk confirmed full-year guidance for underlying EBITDA of around $37 billion and a free cash flow above $24 billion.

U.S. Diesel Supply ‘Rapidly Devolving’

Tue, 01 Nov 2022 16:20:32 GMT

Mansfield Energy issued an alert about diesel fuel shortages in several Southeastern states, including Alabama, Georgia, Tennessee, North Carolina, Virginia, and South Carolina. The company also noted “extremely high prices in the Northeast.” “Poor pipeline shipping economics and historically low diesel inventories are combining to cause shortages in various markets throughout the Southeast,” the company said. “These have been occurring sporadically, with areas like Tennessee seeing particularly acute challenges.” It noted that fuel prices are 30 to 80 cents higher than the posted market average due to “tight” supply, while saying that “fuel suppliers have to pull from higher cost options, at a time when low-high spreads are much wider than normal.”

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Fuel carriers are now having to go to “multiple terminals to find supply, which delays deliveries and strains local trucking capacity,” it said. While gasoline prices have dropped since they posted record highs in June, diesel hasn’t decreased nearly as much and currently stands at $5.31 per gallon, according to AAA. Oct. 21 data from the Energy Information show that the country had 25.9 days of diesel left.

Report: Russia Will Support Grain Export Deal Extension

Tue, 18 Oct 2022 23:11:56 GMT

Russia will support an extension of the grain export deal despite concerns about its implementation because that would present the best opportunity for increased Russian ag and fertilizer shipments, Deputy Director of the Center for Comprehensive European and International Studies Dmitry Suslov told TASS news agency. “Keeping this deal and the time left before its end is a good opportunity to achieve lifting of such restrictions, since if the deal is not renewed, then exports of Russian agricultural products will remain hindered,” Suslov noted. He said there’s risk of new sanctions against Russia from Western allies if the deal is not extended. Plus, Moscow wants to maintain a positive relationship with Turkey and improve dialogue with African countries, to which ag products will be supplied.

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But he noted: “The grain deal is not implemented as it was designed. Firstly, the overwhelming portion of Ukrainian grain is not going to poor developing countries and, secondly, the issue of export of Russian agricultural products and Russian fertilizers is not solved. The deal is working for less than a half, for about a quarter, that is, Ukrainian grain is exported but not to where it should go and restrictions on Russian export are not lifted.”

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Slower Imports Will Ease Port Congestion

Tue, 20 Sep 2022 19:07:16 GMT

Port of Long Beach Executive Director Mario Cordero told Bloomberg News he expects the pandemic-era surge in U.S. consumer demand that snarled supply chains will start to cool, with evidence of a deceleration starting to show in weaker inbound container arrivals. The nation’s No. 2 gateway for trade moved 806,940 20-foot container units last month, down 0.1% from August 2021 — which was its busiest August on record. Imports dropped 5.6% and exports gained 1.6%. Through August, Long Beach moved 6.6 million TEUs, a 4% increase from the same eight-month period last year. Cordero also expressed confidence dockworkers and their employers at West Coast ports will keep cargo moving as they negotiate a new labor contract, avoiding a repeat of the stoppages and delays that plagued supply chains in the 2014 talks.

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Tai Again Defends Continued China Tariffs, Murky on Road Ahead

Tue, 20 Sep 2022 15:49:31 GMT

U.S. tariffs levied against Chinese products in 2018 were not “punitive” tariffs, according to U.S. Trade Representative (USTR) Katherine Tai and are not “punishing” China. Tai said the tariffs are just a trade tool. “They can be used in lots of different ways. In some contexts, they are used as sanctions. These are not sanctioning tariffs. The tariffs that were put down in 2018 were really rebalancing tariffs; they are tariffs to try to level the playing field to overcome unfairness that we have seen and the impacts on the U.S. economy. So that is a legal fact, but that is also a fact with respect to policy.”

Regarding the first talks with Taiwan under the Initiative on 21st Century Trade, Tai said she expects negotiations will take place soon. Tai downplayed the possibility of an “early harvest” of successes under the U.S. Indo-Pacific Economic Framework (IPEF) following the ministers’ meeting last week.

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EPA Won’t Meet Glyphosate Deadline

Fri, 05 Aug 2022 19:59:59 GMT

EPA said in court filings this week it will not meet the court-ordered Oct. 1 deadline for the agency to review its cancer assessment and to conduct an Endangered Species Act (ESA) review of the herbicide glyphosate. EPA asked the U.S. Court of Appeals for the Ninth Circuit to give the agency more time, indicating it would be unable to issue a new interim decision or final registration decision for glyphosate until 2026 because of the complexity of the issues involved and the lengthy timeframe needed to complete its ESA review and consultation with the federal wildlife agencies.

The court is not expected to rule until the petitioners in the case file their response to EPA’s request. EPA said at most by Oct. 1 it could only provide a partial analysis of some of the issues in the case and that such an analysis would have “no regulatory or real-world effect.”

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Supreme Court Curbs EPA’s Power to Regulate Emissions

Wed, 13 Jul 2022 20:27:39 GMT

The Supreme Court has made it more challenging for the Environmental Protection Agency to regulate greenhouse gases and fight climate change, as justices ruled today in favor of Republican-led states and coal companies that asked the court to limit how much the EPA can control emissions from power plants. The court ruled 6-3 along ideological lines that the EPA does not have the authority under the Clean Air Act to create caps for greenhouse gas emissions. The consolidated cases are known as West Virginia v. EPA.

Chief Justice John Roberts wrote for the court’s conservatives. “Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day’ ” Roberts wrote, referring to a court precedent. “But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme.”

Justice Elena Kagan, writing for the dissenters, countered: “Today, the Court strips the EPA of the power Congress gave it to respond to ‘the most pressing environmental challenge of our time,’ ” referring to another precedent.

Bottom line: The ruling delivers a blow to Democrats and environmental groups, who want the agency to crack down on emissions from power plants and other sources to mitigate climate change.

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Outlaw: Crop Insurance Key to Avoiding Another Farm Economy Downturn

Mon, 16 May 2022 13:41:56 GMT

A report from Dr. Joe Outlaw, Professor and Extension Economist, Co-Director, The Agricultural and Food Policy Center at Texas A&M, says: “According to USDA survey data, U.S. agricultural producers, on average, have relatively low debt and many are in quite strong cash flow positions. Low debt makes farmers much less vulnerable to a collapse in land values. But, I think the biggest reason the U.S. won’t see a crisis like the 1980s again is the federal crop insurance program.

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Crop insurance had very low participation during the 1980s with less than 50 million acres covered generally at low levels of buy-up on yield policies. Over time, a lot of innovation has occurred in crop insurance policies. Now, around 225 million acres are covered generally by revenue insurance policies bought up to at least the 70% coverage level. With virtually all cropland covered by some type of policy, significant within year price declines will be covered by revenue insurance. Due to this, there wouldn’t be the tremendous pressure on farm incomes contributing to lower land values and increased loan defaults. What about a sustained price decline scenario? That is where crop insurance coupled with price loss coverage provides significant protection.”

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STB Implements New Rules for Some Railways

Tue, 10 May 2022 18:12:34 GMT

The Surface Transportation Board (STB) implemented new rules for some of the largest railroads after customers said train backlogs have hampered their operations, the agency said. STB, which regulates freight railroad operations, says certain carriers will need to permit service-recovery plans and regular progress reports on rail service, operations and employment. The move follows complaints voiced at an STB hearing last month about rail-service congestion involving the major railways. Customers in the ag sector say delayed trains are impeding crop shipments, causing grain storage facilities to fill up, backing up fertilizer shipments and temporarily shutting down production at ethanol producing plants.

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The National Grain and Feed Association (NGFA) praised the STB action. “NGFA members continue to experience rail service issues in many areas of the country impacting feed availability for livestock, exports and processing facilities for food and fuel,” NGFA President and CEO Mike Seyfert said in response to STB’s announcement. “The additional transparency should help the board with its oversight and help shippers and receivers more efficiently plan operations and more accurately gauge when contingency plans are needed.”

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Russian Fertilizer Shipments Continue to Brazil

Tue, 19 Apr 2022 02:27:04 GMT

Despite concerns that sanctions would limit Russian fertilizer shipments to Brazil, shipping data shows fertilizer is still being shipped, Reuters reported. At least 24 vessels carrying almost 678,000 MT of Russian fertilizers will reach Brazil in the following weeks.

Despite sanctions against Russia, 11 of the 24 vessels left Russian ports after Feb. 24, when the war started. Most are carrying potassium chloride used for soybean and corn production. The most recent cargo left Russia on April 4. Overall, Brazil’s fertilizer imports and raw materials used to make plant nutrients rose by 24.6% to 9.795 MMT in the first quarter, according to Siacesp, an industry group.

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CF Industries Warns of Fertilizer Shipping Issues

Mon, 18 Apr 2022 13:35:03 GMT

CF Industries is warning customers that fertilizer shipments might be delayed or may not reach farmers after Union Pacific (UP) railroad mandated certain shippers to reduce the volume of private cars on its railroad. CF ships fertilizer from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa via UP railroads. The railroad asked CF Industries to reduce its shipments by 20%. The company said it might not have available shipping capacity to take new rail orders involving UP rail lines to meet late-season demand for fertilizer. “The timing of this action by Union Pacific could not come at a worse time for farmers,” CF’s Chief Executive Officer Tony Will said on Thursday. CF Industries had previously announced it planned to increase fertilizer shipments from the world’s largest nitrogen plant to both U.S. coasts to help offset some of the decline in fertilizer supply due to Russia’s invasion of Ukraine.

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Vilsack Wants DOJ to Investigate Input Prices

Thu, 17 Feb 2022 19:46:53 GMT

USDA Secretary Tom Vilsack wants the Department of Justice (DOJ) to ensure seed companies and other input suppliers are not using their market power and current conditions to raise prices unfairly. “It’s important for us to ask questions about whether all of these increases, every penny of these increases, is justified based on disruptions, based on supply, based on the normal economics,” Vilsack said during an appearance at the National Association of State Departments of Agriculture’s (NASDA) 2022 Winter Policy Conference. He told the nation’s state agriculture commissioners on Wednesday that if input companies cannot justify current pricing, “then shame on anybody who’s trying to take advantage of this circumstance.”

Vilsack acknowledged the volume of challenges weighing on the ag sector, mentioning supply chains, animal disease threats and rising input costs, but stressed his confidence in the “capacity of American agriculture” to overcome them. Vilsack said higher input costs are tightly linked to broader pandemic-driven supply chain woes, with heavy demand running up against scarce supplies. “A lot of these factors are things that the department of Agriculture, whether at the state level or at the federal level, is not in a position to provide much assistance,” he said. However, he said USDA’s other moves aimed at creating and expanding market opportunities for farmers and ranchers through climate-smart ag and new export markets can support higher commodity prices and help producers “withstand some of these shocking [input] prices that they’re currently facing.”

Vilsack’s comments come as DOJ and the FBI today are scheduled to announce a new initiative to look at finding companies that are exploiting supply chain disruptions in the U.S. to make increased profits, violating U.S. antitrust laws. The U.S. has also formed a working group on supply chain collusion with countries like the U.K., Australia, New Zealand and Canada to share intelligence and root out global efforts on that front.

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Lower Part of the Mississippi Dredging Makes Progress

Mon, 10 Jan 2022 20:20:08 GMT

Cargo vessels can load more corn and soybeans and reduce shipping costs due to dredging progress on the lower Mississippi River, according to the Soybean Transportation Coalition. The allowable depth for 150 miles of the Lower Mississippi River is now set at 48 feet, down from 45 feet previously.

Ultimately, the project calls for a 50 ft. channel up to Baton Rouge (river mile 232) from the Gulf of Mexico. There are 82 more miles of shipping channel dredging needed to complete the project. The project is estimated to take two to three years to finish due to the complexity of that section of the river, including pipelines that run under the river.

Soy Transportation Coalition (STC) research says when completed to the 50-foot level, the average vessel can increase loads by 500,000 bu. of soybeans or 21%, and shipping costs would drop 13 cents per bu. for soybeans. They estimate the completed dredging project would mean an additional $461 million for soybean farmers in 31 states.

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