Emissions

USDA’s Cover Crop Program Would be Made Permanent through Biden's Budget

Fri, 10 Mar 2023 22:23:44 GMT

A $6.8 trillion budget proposal was released by the Biden administration on Thursday with the continued “bottom up, middle out” theme, according to USDA.

“The President’s budget provides USDA with the tools needed to serve all Americans by providing effective, innovative science-based public policy leadership at home and around the world,” Tom Vilsack, USDA secretary said in a press release .

The proposed budget includes:

• $19 trillion to be borrowed through FY 2033
• 10.2 trillion in interest on national debt
• $3 trillion in debt deficit reduction
• $6.9 trillion for spending

So, what’s ag’s stake in the $6.8 trillion plan? As is generally the theme in a farm bill, nutrition would take most of the cake.

Nutrition and the Supplemental Nutrition Assistance Program (SNAP)

According to the release, the administration anticipates 6.5 million people will participate in SNAP. To meet these “critical” SNAP needs, the proposal devotes $6.3 billion of a total $7.1 billion in nutrition for SNAP.

“The budget also includes $15 billion over 10 years to allow more states and schools to leverage participation in the community eligibility provision to provide healthy and free school meals to an additional 9 million children,” the release says.

Ensuring SNAP availability is one obstacle. Ensuring food is available for purchase is another issue the budget looks to address.

Supply Chain Resilience

COVID-19 and the Russia–Ukraine war exposed many broken supply chain links. To solder the chain back together, the White House plans to create programs that will:

• Bolster markets through oversight by the Agricultural Marketing Service.
• Safeguard livestock against pests and disease through Animal and Plant Health Inspection Service (APHIS) investments.
• Ensure “safe and healthy” work environments by hiring more inspectors and health officials.

“These programs build on the pandemic and supply chain assistance funding in the American Rescue Plan to address COVID-19 pandemic-related vulnerabilities in the food system,” the plan says.

The supply chain won’t be the only sector to see new or reestablished programs. A similar approach will also be taken up in the climate department.

Climate Resilience

Cover crop pilot programs would be made permanent if this budget were to pass.

With $208 million more in conservation funds from the 2023 enacted funding level, the NRCS would work to “increase the voluntary adoption of conservation practices that sequester carbon and reduce greenhouse gas emissions associated with agricultural production.”

Related article: Producers Eliminate Fungicide and Insecticide Use, Cut Fertilizer 50%

To put the investments in motion, NRCS would use draw on federal, state and private conservationists to hire “thousands” of employees that would be available to rural America.

These employees would also work alongside climate researchers, which will also be funded in the budget.

Ag Research

In the past, many legislative officials have speculated American ag is falling behind in research compared with other countries. But research might finally see its needs met if this budget proposal passes.

“The People’s Republic of China has become the largest funder of agricultural research and development in the world, surpassing the U.S. and the EU” the report says. “The budget restores American innovation in agriculture by providing a total of more than $4 billion, a $299 million increase above the 2023 enacted level, for ag research, education and outreach.”

Some, including Rep. Salud Carbajal (D-Ca.), feel these research funds are long overdue.

“This administration is taking an important step toward undoing years of underinvestment – as public funding for agriculture research has declined by one-third since 2002,” Carbajal said in a press release.

A letter sent in February to the Office of Management and Budget by Carbajal and other members of Congress stressed the need for increases in ag research.

If these proposed investments are taken-up, Carbajal says American innovation in ag will be “restored.”

Taxes

Arguably the heaviest hitter in the budget bundle is rooted in tax changes that would make American’s pay “their fair share” toward the nation’s debt, according to Janet Yellen, U.S. treasury secretary.

To ensure the “share” is paid, the budget would:

• Raise the corporate tax rate from 21% to 28%. For most farmers this would be almost an 100% tax increase from 2017 when most farmers only paid 15%.

• Include several proposals to eliminate or reduce tax deductions and credits related to oil and natural gas operations.

Many farmers have ground that enjoys oil and gas revenues. This could indirectly reduce those revenues.

• Any farmer with a net worth greater than $100 million would be subject to a minimum tax rate of 25% on all income included unrealized gains not yet tax.

As an example, assume a farmer is worth $125 million and they have $25 million on unrealized gains not yet taxed. They would owe $5 million that can be paid over 9 years in the first year of this proposal or 5 years thereafter.

Plus, if the asset is illiquid, they could make an election to defer the tax until the asset is sold but would owe an “interest charge”. There appears to be no refund if your net worth decreases.

• Increase the Statute of Limitations from 3 years to 6 years for prohibited transactions and material misstatement of assets in a retirement plan.

• Treat all capital gains and dividend income for taxpayers with more than $1 million of taxable income as being taxed at ordinary rates.

As example, assume a farmer had $500,000 of capital gains and $1 million of other net taxable income. All of the capital gains would be taxed at 44.6%.

The administration wants to make farmers and their heirs pay capital gains taxes on any transfers of appreciated property either via gift or at death. They have increased the exemption amount to $5 million per person or $10 million for a married couple and allow portability of any unused amount at the first death.

Related article: Review of President Biden’s Green Book

So, what are the odds of this budget passing? It depends on who you talk to.

Upshot

According to Jim Wiesemeyer , ProFarmer policy analyst, democrats in the House and Senate aren’t sure they’ll produce their own budget documents, saying they’ll review Biden’s proposal and only draft their own resolutions if they need to take a different approach from the president.

Paul Neiffer , farm CPA, believes, with the House in Republican control, there is little chance that much of this will pass in

Four Ag Topics Discussed in Mexico City During USMCA Meetings

Fri, 13 Jan 2023 18:40:59 GMT

Mexico City ran the headlines this week, as Mexican President Andrés Manuel López Obrador hosted President Biden and Canadian Prime Minister Justin Trudeau for the 10th North American Leaders’ Summit.

In their Tuesday meeting, the three leaders shared a conversation including these top takeaways for the ag industry:

1. Semiconductor manufacturing

The three agreed to organize a semiconductor forum with industry representatives and government officials in early 2023 to coordinate semiconductor supply chain needs and investments. Semiconductor companies building new manufacturing facilities in the U.S. would like to put parts of their supply chain in Mexico.

Read more: What to Watch in 2023

2. Methane and food waste reduction

The countries also committed to reducing methane emissions from the solid waste and wastewater sector by at least 15% by 2030 compared with 2020 levels, and to develop a proposal to cut food loss and waste in half by 2030.

3. Energy

Biden, López and Trudeau agreed to create a plan for standards and installation of electric vehicle chargers along their international borders.

The energy topic comes as Mexican officials are in consultations with the U.S. to avoid a U.S.-Mexico-Canada Agreement (USMCA) dispute panel over Mexican energy policy. Canada has also joined in the complaint.

The U.S. Trade Representative’s office says the policy puts billions of dollars in U.S. investments at risk.

Canada also has concerns over the implementation of an electric-vehicle provision in the Inflation Reduction Act signed by Biden last year.

While Trudeau did not elaborate on his concerns, Biden said Trudeau has “always been there” when he reached out. With that, Biden intends to travel to Canada to discuss the matter in March.

Read more: Title 42 Talks Continue with Biden at U.S./Mexico Border

4. U.S./Mexico Border Wall

Biden, in the meeting, was met with thanks from López Obrador for not building “even one meter of wall.”

“You are the first president of the United States in a very long time who has not built even one meter of wall. We thank you for that, sir,” said López Obrador.

The comments come as the Biden administration announced a program to allow 30,000 migrants from Cuba, Haiti, Nicaragua and Venezuela, collectively, to enter the U.S. legally each month.

Still, López Obrador suggested Biden “insist” Congress regularize undocumented Mexican migrants who work in industries where American employers are struggling mightily to find enough workers.

By the end of the discussion, López Obrador labeled Biden as “a man with conviction.” López Obrador then moved to challenge Biden to improve life across the region, telling him he “holds the key” to change.

“This is the moment for us to determine to do away with this abandonment, this disdain and this forgetfulness for Latin America and the Caribbean,” López Obrador said.

While López Obrador and Biden reserved a moment for a border wall discussion, no commentary was shared regarding GMO corn trade .

Read more: Mexico’s GMO Corn Debate Tabled Until 2025, According to Mexico

California Approves Plan to 'Move State Away From Oil' by 2035

Wed, 05 Oct 2022 18:44:12 GMT

Noting an urgent need to address climate change while cutting back on air pollution, the California Air Resources Board (CARB) voted Thursday to require all new cars and light trucks sold by 2035 to be zero-emission vehicles.

Lauren Sanchez, Gov. Gavin Newsom’s climate advisor, called it “a huge day not only for California but the entire world.” The mission, she said: “Move the state away from oil.”

Liane Randolph, chairwoman of the CARB, said the rule is one of the state’s most important efforts yet to clean the air and will lead to a 50% reduction in pollution from cars and light trucks by 2040.

The EV Scoop

Congress gave California permission to set its own rules under the Federal Air Quality Act of 1966 when the state was combatting the toxic yellow-brown smog that hung over Los Angeles.

The Trump administration in 2019 revoked California’s authority to regulate its own air quality, but the Biden administration restored that authority earlier this year.

Already, 15 states , including Colorado and Minnesota, as well as states on the Northeast and West Coast, followed California’s previous zero-emission vehicle regulations.

New York, Oregon, Washington state and Rhode Island officials they plan to adopt California’s rule through their own rule-making process, while New Jersey and Maryland officials said they were reviewing California’s decision. Public comment in Washington state on a similar plan will start Sept. 7.

More than 16% of new cars sold in California in 2022 were zero-emissions vehicles, the state said , up from 12.41% in 2021 and 7.78% in 2020.

What’s Next for America and Electric Vehicles

The rules won’t be immediate and will go into effect in 2026. The mandate forces automakers to phase out gasoline and diesel cars, sport utility vehicles, minivans and pickup trucks in favor of cleaner versions powered by batteries or fuel cells. If automakers do not comply, they could be charged $20,000 per noncomplying car, CARB said.

What if consumers don’t go along? One option: People could still buy internal combustion cars from another state without the mandate. And it will still be legal to buy and sell used fossil-fuel cars and light trucks.

Under the new rules, 35% of new cars must be zero emission by 2026, 51% by 2028, 68% by 2030, and 100% by 2035. The quotas also would allow 20% of zero-emission cars sold to be plug-in hybrids.

The mandate doesn’t cover all of highway transportation: Heavy trucks that burn diesel fuel will have 10 extra years before they are banned. A proposed zero-emission mandate for heavy trucks wouldn’t hit 100% until 2045.

Also, up to 20% of a carmaker’s sales can be plug-in hybrids, which have both electric motors and gas engines, and still count as zero-emission, as long as the minimum battery range is 50 miles or more.

As part of the California mandate, the state will require specific levels of warranty protection for EV batteries and related components.

Notable Hurdles for EV’s

One of them is that an electric car still costs far more than an equivalent gasoline car. According to Kelley Blue Book, the average EV sold for $66,000 in July, compared with $48,000 for the average international-combustion vehicle.

CARB officials pointed to studies that show savings in fuel and maintenance can make an EV a better financial deal over time, and that prices would continue to drop.

Charging is another hurdle. While homeowners can install their own EV charger in a garage, most people who live in apartment buildings and condos don’t have that option. California plans to require multifamily housing landlords to provide some way to charge electric cars.

John Bozzella, president and CEO of the Alliance for Automotive Innovation, which represents major automakers, said California’s mandate would be “extremely challenging” for automakers to meet.

“Whether or not these requirements are realistic or achievable is directly linked to external factors like inflation, charging and fuel infrastructure, supply chains, labor, critical mineral availability and pricing, and the ongoing semiconductor shortage,” Bozzella said in a statement. “These are complex, intertwined and global issues.”

State officials said the rule is critical to meeting to state’s goal to transition to 100% renewable energy by 2045, and that resulting emissions reductions would lead to fewer cardiopulmonary deaths and emergency visits for asthma and other illnesses.

Ag Industry Responds

While environmental groups were largely very complimentary, some said the CARB rule didn’t go far enough. The National Corn Growers Assn. (NCGA) released the following statement:

“As NCGA told regulators during the rulemaking process, constraining the vision of a zero-emission future prevents the state from tapping into the immediate and affordable environmental solutions that come from replacing more gasoline with low-carbon and low-cost ethanol, in both current and new vehicles, including new plug-in hybrids,” NCGA wrote. “Ethanol is on a path to net zero emissions, and NCGA will continue to work with and urge California to use all the tools in its toolbox as it addresses climate change and cuts harmful tailpipe emissions. As recent University of California, Riverside, vehicle testing for CARB found, higher ethanol blends, like E15, significantly reduced most criteria air pollutants compared to standard 10% ethanol blends.”

New Legislation Could Put E30 on a Pump Near You

Wed, 27 Jul 2022 20:03:08 GMT

The University of Nebraska-Lincoln (UNL) published a study on the use of E30 in non-flex fuel vehicles in February 2021. The study involved 50 non-flex fuel vehicles that used varying levels of octane to show the contrast between ethanol and carbon dioxide emissions.

Results from the UNL study show that if 10% of Nebraska’s non-flex fuel vehicles switched from E10 to E30 , carbon dioxide emissions would decrease by 64,000 tons per year.

These numbers echoed throughout the ethanol industry, igniting a call to action in some Midwestern states.

South Dakota Weighs In

Marcy Kohl, director of communications and corporate affairs at Glacial Lakes Energy in South Dakota, says her team is well aware of E30’s benefits and they’re pushing for the state to maximize on those opportunities.

“By fueling the state’s fleet with E-30, you save $6 for every 15 gallons of fuel. What does that mean for the South Dakota taxpayer?” Kohl asked. “We’ve been trying to put that pressure on Noem, but she won’t return our calls. We are asking her to support local agriculture, ethanol and the South Dakota economy by fueling the fleet with E-30.”

South Dakota wasn’t the only state to catch wind of Nebraska’s ethanol study. After being published, the results quickly made their way to The Hill.

New Legislation Puts the Wheel in Motion

In August 2021, numerous Representatives backed the Next Generation Fuels Act of 2021, which aims to “promote low-carbon, high-octane fuels, to protect public health, and to improve vehicle efficiency and performance,” according to the bill.

Included in the legislation are requirements for:
1. Manufacturers to design vehicles with E20 blend capabilities in their non-flex fuel vehicles by 2026, and E30 blends by 2031.
2. Fuel retailers to offer the respective higher-octane options as the non-flex fuel vehicles are made available to the public.

Rep. Cheri Bustos (D-IL), who led the bill’s introduction, says this legislation important because it will “bring an environmental lens to biofuels production” by reducing carbon emissions and improving air quality.

While this bill remains in the introduction phase in the House, various Senators moved to introduce the same bill in the Senate on Tuesday.

“ Unstable gas prices have left many families – especially rural families – with a lot of budget uncertainty,” said Senator Grassley (R-IA). “As we look to the future of liquid fuels, this legislation can play a critical role in restoring energy independence, saving consumers money, lowering carbon emissions and expanding the market for farmers and ethanol producers.”

More on biofuels:
What Is the Ethanol Sweet Spot? Up The “E”
EPA Faces Lawsuit for Ethanol’s Impacts on Endangered Species
EPA Proposes New Rules on RFS, Finalizes Biofuel Blending Requirements
John Phipps: It’s Now Less About the Supply of Oil, And More About Refining Capacity in the U.S.

Monarch Bioenergy Receives Funds to Boost Renewable Energy Efforts

Fri, 11 Mar 2022 22:04:48 GMT

The push toward carbon neutrality in the pork industry continues. Monarch Bioenergy, a collaboration between Roeslein Alternative Energy (RAE) and Smithfield Foods Inc. subsidiary Smithfield Renewables, recently received funding from TPG Rise Climate.

Applying RAE anaerobic digester technology and other environmental protections to Smithfield’s hog farms is a meaningful step toward addressing methane emissions at their source, said Marc Mezvinsky, Business Unit Partner in TPG Rise, in a release.

Monarch uses the digester to capture methane emissions from manure and convert the gas into carbon negative, pipeline-quality natural gas. In addition to this biogas, byproducts from this process include feedstock for fertilizer, irrigation and soil regeneration. Future solutions may also include organic fertilizer, clean water creation and compostable fiber.

“Monarch is taking an innovative approach to tackling methane emissions – one of the most complex challenges we face in the fight against climate change. With additional capital and expertise from TPG Rise Climate, Monarch will continue to advance RAE’s technology and commercialize its adoption to large and small agricultural operations across the country,” said Chris Roach, newly appointed CEO of Monarch.

Smithfield Renewables is committed to becoming carbon neutral by 2030 and is excited to integrate with TPG Rise Climate and Monarch, according to the press release.

Likewise, RAE said they will continue to see Monarch as a blueprint for how to address environmental challenges with fully integrated, closed-loop innovations. RAE’s goal is to restore 30 million acres of land to native prairie plants, specifically around highly erodible areas, providing ecological services and wildlife habitat for monarch butterflies across Missouri, as well as naturally sequestering carbon, storing and filtering water and creating biomass for additional renewable natural gas production.

TPG Rise Climate’s multi-sector investing strategy includes the acceleration of transition to renewable energy, greening the industrial sector, and scaling greenhouse gas abating technologies, said a recent press release. Their investment looks to advance agricultural innovation, enhance existing projects in Missouri and develop new ones across the U.S.

Setting the Farm Bill Stage

Thu, 23 Dec 2021 17:35:50 GMT

COVID-19 Pandemic and Fallout

Supply chain disruptions will likely steal the limelight, says Jonathan Coppess, University of Illinois professor.
Pandemic challenges could change future policy decisions, says Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri.

“The question is if we write policies to handle any similar emergency in the future,” he says. “Or we choose what was done this time, where we make policies on the fly.”

Political Turbulence

Elections need to be center stage when considering farm bill outcomes, Westhoff says: “If we have a Republican House and Senate, those implications would be very different compared to Democratic control of both chambers of Congress.”

Coppess agrees. “The current political polarization really amplifies the uncertainty about how the farm bill is going to unfold,” he says.

Climate Focus

Wildfires, storms, drought and intense weather events due to climate shift will be the “single biggest driving influence” in policy debates, Coppess predicts. He says climate mitigation and prevention will likely translate into emergency disaster assistance, crop insurance and farm programs in 2023 and beyond.

California Company Says the Future of Tractors Is Electric

Wed, 10 Nov 2021 15:00:55 GMT

Mani Iyer thinks it’s the right time and he’s targeting the right market segment with the right products to bring battery powered tractors to the forefront as a solution.

“This is the perfect time to launch a truly renewable, electric powered tractor, which is repowered with solar energy,” he says. “These tractors have a lot of advantages, and they perform much better than diesel.”

Iyer joined Solectrac as CEO in the middle of 2021. He’s spent nearly 30 years in the ag machinery market including nine years as president and CEO of Mahindra North America. Solectrac is a California-based company focusing on battery powered tractors–specifically focusing on the 70-hp and below market.

What’s the best power ranges for battery-powered tractors?

So far the company has sold 50 plus tractors—mostly into applications for vineyards, specialty crops and rural lifestyle customers.

“We have a sweet spot with three products in the lineup: 30 hp, 40 and 70 hp,” Iyer says.

He says the company has introduced first generation products in each category, however, each is going through upgrades to expand their use with attachments and accessories. Standard loaders and backhoes can be mounted on the tractors, and the three-point hitch allows for all standard implements to be used. Additionally, the 40 hp will be upgraded to 50 hp and additional versions of current products are on the drawing board.

“Customers have been extremely excited—and I appreciate their patience in our roll out,” Iyer says. “Tesla has proven how a product and a company can scale. And thanks to Tesla for showing us the way to make people believe in these products. Rural lifestyle customers are very close to automotive customers—so there’s been a lot to learn from.”

What are the greatest advantages for battery-powered tractors?

Iyer says the coined term around Solectrac’s performance is “Quiet Power,” as the electric-powered motors can provide up to 75 hp equivalent of diesel power with only 65 decibels—which is about the same sound range as a normal conversation. The Lithium iron phosphate batteries last three to eight hours, depending on the application, and the tractors can be ordered with an optional exchangeable battery pack.

“There’s no noise. We aren’t generating any pollutants. And you have full torque at zero RPM,” Iyer says. “You have power and torque across the power scale. Operators are getting close to 90% power at the wheels.”

He says customers in applications where noise levels are sensitive—vineyards, municipal maintenance, equestrians etc—users are boasting about the benefits of being able to operate at the low noise levels.

“For rural lifestyle customers, riding the tractor is like therapy. They love spending time on their machine and on their land. And with our tractors, they can really enjoy what they are doing without generating loud engine noises or breathe pollutants,” Iyer says.

Iyer says in addition to the environmental and power benefits, the Solectrac tractors are assembled in the U.S. with a t percentage of their components made domestically and batteries packs created in their factory. In February 2022, the company is planning to move to a facility five times bigger than its current factory.

“We want to deliver tractors with strong performance, high efficiency, low operating cost, better for the environment, charged renewably, and are quiet and safe,” he says.

How much do battery-powered tractors cost?

Prices for the Solectrac tractors can be expected to be 15% to 20% more than a diesel model, but Iyer says the goal is to provide a return on the cost difference in less than two years, and operators save money over time not buying diesel & oil and they can use their existing attachments.

As for a future with higher horsepower models, Iyer says it’s in the making, understanding how big of a battery pack is required for high horsepower applications and performance.

“But for chicken farms, horse farms, hog farms, using this tractor for their purposes and their property—there is no reason why this shouldn’t perform for them,” he says. “Failure is an option, but fear is not an option for us. We will keep going and innovate daily on these solutions for a cleaner, healthier and safer world.”

In June 2021 Solectrac was acquired by Ideanomics, which is a company that focuses on renewable energy and electric vehicles. Solectrac was founded by Steve Heckeroth in 2012.