Daily Ag News Summary 11/14/2017

Group Alleges Farmers Double-Dip in Farm Bill

The Environmental Working Group (EWG) is alleging that farm businesses regularly get payments from their government-subsidized crop insurance policies, and then receive separate payments from one of two Department of Agriculture subsidy programs created in the 2014 Farm Bill. “Farmers who receive payments through one of the new subsidy programs – the Agricultural Risk Coverage (ARC) program or Price Loss Coverage (PLC) program – routinely take indemnities from their revenue insurance policies” says Anne Weir Schechinger, EWG’s senior economics analyst and co-author of the report.

“ARC, PLC and crop insurance each define ‘losses’ in different ways, but in the end they pay out for the same reason: failure to meet expectations for crop yield or revenues,” she asserts. “Through federal farm programs, American taxpayers are routinely paying thousands of wealthy mega-farms twice for the same ‘loss’. ARC, PLC and crop insurance each define ‘losses’ in different ways, but in the end they pay out for the same reason: failure to meet expectations for crop yield or revenues.”

EWG’s report concludes that in 2015, farmers in more than 2,300 counties received ARC or PLC payments for losses incurred in 2014. Crop insurance indemnity payments were also made in 77 percent of those counties. In 2016, farmers in more than 2,800 counties received ARC or PLC payments for losses incurred in 2015. Crop insurance indemnity payments were also made in 71 percent of those counties. Farmers in six states – Iowa, Minnesota, Nebraska, Illinois, Kansas and North Dakota – received more than half of PLC, ARC and crop insurance indemnity payments. The group also says the top ten percent of subsidy recipients collected 77 percent of farm subsidies even though annual farm household income for large commercial farms tops $1.1 million.

Agriculture Industry Wants Exemption from Trucking Mandate

In 2012, the Congress passed the “Moving Ahead for Progress in the 21st Century” bill which outlined the criteria for highway funding and included a provision requiring the Federal Motor Carrier Safety Administration (FMCSA) to develop a rule mandating the use of electronic logging devices (ELDs). ELD’s are used to electronically record a driver’s Record of Duty Status (RODS), which replaces the paper logbook some drivers currently use to record their compliance with Hours of Service (HOS) requirements. Fleets have until December 2017 to implement certified ELDs to record HOS. Fleets already equipped with the technology have until December 2019 to ensure compliance with the published specifications.

The American Sheep Industry Association (ASI) continues to work collaboratively across the legislative and regulatory regimes to ensure exemptions to the Hours of Service regulations remain in place for livestock haulers during the transition from paper to electronic logging. ASI says it is apparent that there is an incompatibility between the Electronic Logging mandate and the realities of the livestock industry. Neither the electronic logging equipment, nor drivers and law enforcement, are prepared for the implementation of these new regulations given the exemptions necessary for animal welfare and safety.

According to the FMCSA, there are Hours of Service and Agricultural Exemptions in place. The exceptions include during planting and harvesting periods as determined by the State, for the transportation of agricultural commodities (including livestock, bees and other commodities) within a 150-air mile radius from the source of the commodities. The same provision applies to the delivery of supplies and equipment for agricultural use from a wholesale or retail distribution point. Work and driving hours are not limited and the driver is also not required to use an Electronic Logging Device (ELD). However, once a driver operates beyond the 150-air mile radius, the HOS regulations apply. Drivers transporting agricultural commodities are not required to use an ELD if the vehicle was manufactured before the model year 2000 or if they do not operate outside of the 150 air-mile radius for more than 8 days during any 30-day period, provided they prepare paper logs on the days when they are not exempt from the HOS rules.

At ASI’s request, FMCSA is seeking comments before December 18 on a delay of the Electronic Logging Device mandate for livestock haulers.

California Leads Nation in Agricultural Exports

Once again, California tops all states in the value of agricultural exports according to the latest information from the Economic Research Service (ERS) at USDA. Last month, ERS released its annual update of the State Export Data product along with estimates for each State’s agricultural export value and total export value. In 2016, California’s agricultural exports, totaling over 12 billion dollars in value. The majority of California’s exports come in the form of tree nuts, fruits, and vegetables.

Total U.S. agricultural export value in 2016 was $134 billion. In addition to California, 58 percent of the value is created by Iowa, Illinois, and Minnesota. In contrast, the majority of export value from the Midwestern states comes from grains and oilseeds along with animal products like pork.

Analysts Looking Towards Cattle on Feed Report

On Friday, the U.S. Department of Agriculture releases the monthly Cattle on Feed and Cold Storage reports. Allendale is projecting October Placements to be 13.1% larger than last year at 2.455 million head. If realized, this would be the largest October placement in seven years but would be slightly exaggerated in comparison against a low October 2016 number. The recent rally on outgoing cattle, and cheap feed, has pushed cattle feeders to profits. Kansas State University projects break-evens for November delivery fed cattle at $120, increasing to $122 for December finishing. October placements supply the April through September slaughter period.

Allendale also anticipates a 5.1% increase in Marketing over last October at 1.792 million. Total Cattle on Feed as of November 1 is projected to be 7.0% over last year at 11.417 million, the largest for a November in the past six years.