NATIONAL AG NEWS SPONSORED BY THE AMERICAN FARM BUREAU FEDERATION

National Ag News for June 6, 2022

EPA Issues Final RVOs for 2020-2022

The Environmental Protection Agency issued the final Renewable Volume Obligations for 2020, 2021, and 2022 last week. The agency lowered conventional ethanol volumes to 12.5 billion gallons for 2020, advance biofuel to 4.63 billion, and cellulosic to 510 million. The rule also sets conventional ethanol at 13.79 billion gallons in 2021 and 15 billion in 2022. In a move sure to please the ethanol industry, the rule adds a supplemental 250 million gallons that was illegally waived in the 2016 RVO and denies 72 pending small refinery exemption requests. The EPA announcement also provides important guidance to limit the abuse of small refinery exemptions in the future. Growth Energy CEO Emily Skor says the 15 billion gallons in 2022 is a move that sets a baseline for strong future biofuel blending levels. “These moves will set the direction of total and advanced renewable fuel volumes for 2023 and beyond,” Skor says.

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World Food Prices Drop in May

World food prices dropped in May, the second-straight monthly decrease after hitting a record high in March. The U.N.’s Food and Agricultural Organization says while overall prices dipped, the cost of cereals and meat both rose during May. The Food Price Index tracks the most globally-traded food commodities and averaged 157.4 points last month after hitting 158.3 in April. While the average did drop month-to-month, the May index was still 22 percent higher than in 2021. In the cereal supply and demand estimates, the FAO says it expects global cereal production would drop in the 2022-2023 season for the first time in four years after record production last year. The cereal price index climbed 2.2 percent, with wheat posting a 5.6 percent month-on-month gain. The dairy, sugar, and vegetable oil price indices all fell in May, but the meat index edged up to an all-time high level. Vegetable oil dropped 3.5 percent from April.

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Farm Real Estate Debt Builds in First Quarter

Farm real estate debt at commercial banks grew modestly in the first quarter, while production loans remained steady. The Kansas City Federal Reserve Bank says alongside soaring farmland values, real estate loan balances increased at the fastest pace in four years and drove an increase in the overall amount of agricultural lending. Following a sharp pullback over the last two years, non-real estate lending was stable from a year ago. Farm loan performance also continued to improve, but performance at agricultural banks remained limited by compressed net interest margins and a glut of liquidity. The farm economy remained strong alongside decade-high commodity prices that continued to support farm finances. Many producers have benefited immensely from strong cash balances, but credit needs may rise as higher input costs weigh on profit margins. Farm lending accelerated in recent months alongside an increase in the size of operating loans. Many bankers expect loan demand to continue climbing.

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NCBA Commends U.S.-Japan Beef Export Agreement

The National Cattlemen’s Beef Association lauded the signing of an agreement between the U.S. and Japan to increase the Beef Safeguard Trigger level under a trade agreement between the two countries. Kent Bacus, NCBA senior director of international trade and market access, says the agreement underscores the importance of a mutually-beneficial relationship between U.S. cattle producers and Japanese consumers. “We are hopeful that the improved safeguard will provide greater certainty for all segments of the supply chain,” Bacus says. “We thank Ambassador Tai for her continued efforts to reduce trade barriers and expand export opportunities for American cattle producers.” In March 2021, Japan and the U.S. entered negotiations after record-setting beef exports triggered the safeguard provision in the U.S.-Japan Trade Agreement. The increase in the Beef Safeguard Trigger will allow American producers to continue exporting high-quality beef to meet Japanese consumer demand. U.S. beef exports to Japan hit $2.3 billion in 2021.

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NASCAR Reaches 20 Million Miles on Renewable Fuel

NASCAR and official partner Growth Energy say a significant milestone got surpassed this weekend at the World-Wide Technology Raceway. NASCAR drivers have passed 20 million miles driven on Sunoco (Suh-KNOW-co) Green E15, a fuel blended with 15 percent ethanol. Growth Energy, the world’s largest trade association representing America’s biofuel producers and supporters, has been a partner with NASCAR since 2011. NASCAR’s reduced greenhouse gas emissions by 20 percent across its three national touring series while also increasing horsepower on the track. “We’re fortunate to have great partners like Growth Energy and Get Bioethanol who are dedicated to NASCAR and helping us minimize our impact on the environment,” says Michelle Byron, NASCAR’s vice president of partnership marketing. Growth Energy CEO Emily Skor says, “Twenty million NASCAR miles driven on Sunoco Green E15 is a significant milestone for our environment and NASCAR’s sustainability platform initiative. Cars have cut carbon emissions while boosting octane on the track.”

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Cotton Trust Protocol Launches Streamline Enrollment

The U.S. Cotton Trust Protocol announced a new streamlined three-year grower enrollment for the 2022 through 2024 crops. The new process is designed to be quick, easy, and efficient, which allows a grower-member’s cotton to enter the supply chain sooner. Dr. Gary Adams, president of the U.S. Cotton Trust Protocol, says they understand the high demands on a grower’s time and listened to producer feedback. “We implemented a more streamlined and efficient enrollment process,” Adams says. “We thank the growers who helped double participation in 2021.” As supply chain membership continues to increase, Adams says they need to collectively ensure there is enough participation in the program to meet demand and that the U.S. continues to be a leader in producing sustainable cotton for markets around the world. Under the new process, Adams says growers should be able to complete all the requirements in one sitting. Data in the program remains secure and confidential.

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By Tucker Allmer - The BARN

Tucker Allmer & the BARN are members of the National Association of Farm Broadcasting (NAFB), the Colorado FFA Foundation, the Colorado 4H Foundation, the Colorado Farm Show Marketing Committee, 1867 Club Board Member, Denver Ag & Livestock Club Member, the Weld County Fair Board, the Briggsdale FFA Advisory Council, Briggsdale 4H Club Beef Leader & Founder / Coordinator of the Briggsdale Classic Open Jackpot Show.