EPA Administrator Defends Agency’s Work On RFS And Water Rule

By Jerry Hagstrom
DTN Political Correspondent

Washington (DTN) – Environmental Protection Agency Administrator Gina McCarthy apologized to the National Corn Growers Association for the problems caused by the agency’s delays in issuing the volumetric requirements under the Renewable Fuel Standard and urged the farmers to read both the volumetric requirements proposal and the Clean Water Rule before reaching conclusions that neither one is good for agriculture.

NCGA has been highly critical of both the RFS and the Clean Water Rule, which EPA initially called the Waters of the United States rule. “We know the delay last year in getting these [RFS] standards out was disruptive to say the least. I apologize for that,” McCarthy said in a speech to the Corn Congress at a Washington hotel.

She also noted that more than 200 farmers had come to a public meeting in Kansas City, Kansas, last month to give their comments on the volumetric requirements and said they should continue to comment until the comment period comes to an end on July 27. “That way we’ll be able to base the final standards on all the best information and data available,” McCarthy said, noting that the agency is scheduled to finalize the volumetric requirements by November 30.

Corn growers have complained that EPA has lowered volumetric requirements for corn-based ethanol below those in the legislation Congress passed, but McCarthy said that the Obama administration is still committed to growing the industry.

McCarthy said “you might’ve heard we’re trying to shrink or kill this program. But the truth is, we’re committed to growing it. The volumes we’ve proposed for 2015 and 2016 are designed to bust through the blend wall.” “Our proposed 2016 standard for total renewable fuel is about 1.5 billion gallons more – almost 10% higher – than the actual 2014 volumes,” she added. “And the proposed 2016 standard for cellulosic ethanol is six times higher than what the market produced in 2014. So EPA isn’t just promoting growth; we’re pushing the envelope.”

But when a farmer asked how EPA could cut the requirements below those in the legislation when it is committed to reducing carbon pollution, McCarthy said EPA had to deal with the fact that “the factors that underpin those projections may not have been the reality since [Congress] passed that law.”

McCarthy also insisted that the Clean Water Rule – previously known as the Waters of the United States rule – will not affect “everyday farming” and urged the farmers to read it carefully, as she has done. When another farmer noted that under the Clean Water Rule “small drainage features” may come under regulation and said “every farmer has field with one of those small drainage features” and will need a permit to use pesticides, McCarthy said, “We need to talk more specifically about what is a small drainage feature.”

McCarthy said that if people have needed a permit before, they will still need one, but added, “I know you have to use pesticides. We did nothing to expand what was required before.” Another farmer told McCarthy “you are the only one in your agency who is bringing any clarity” to the Clean Water Rule. He said that EPA field staff are not clear in saying what will come under the agency’s jurisdiction and what will not.

McCarthy acknowledged that EPA needs to train its field staff, but added that when EPA headquarters answers a question about the Clean Water Rule she wants it posted and suggested that NCGA could also help publicize these answers.

In an interview afterward, McCarthy said that even though EPA has been sued over the Clean Water Rule, she expects enforcement to begin on schedule on August 28. More than two dozen states have sued over the rule, as well as several major agricultural and business groups.

Before she spoke, NCGA President Chip Dowling asked the attendees to be courteous to McCarthy even though they had differences. When McCarthy began her speech, she noted that she was speaking to the group because “I asked Chip to share that message with his members, and he suggested I tell you myself.”

Near the beginning of her speech, McCarthy seemed to signal that the arguments EPA is an economic drag are overstated. “In the 45 years since EPA’s founding, we’ve cleaned up 70% of our nation’s air pollution and hundreds of thousands of miles of waterways, and meanwhile our nation’s economy has tripled,” she noted.

McCarthy also starting off by using a line that all farm groups love to hear: that farmers are “the original conservationists.”

At the end of her formal remarks, McCarthy said, “I’d just like to wrap up by restating that at the end of the day, we all know the importance of healthy land and clean water. Our health, our food supply, and your livelihoods all depend on it. At EPA, we value what you do, and we take your input seriously.” McCarthy told The Hagstrom Report she felt the corn growers had been “gracious” in receiving her.

EPA has posted McCarthy’s speech on its website: http://dld.bz/dMjbR.

Future Of The Cattle Market, Trends To Be Featured At 2015 Beef Cattle Short Course Aug. 3-5

College Station – Historic high prices in the cattle market and future trends will be one of many important topics discussed in-depth at the 2015 Texas A&M Beef Cattle Short Course scheduled Aug. 3-5 at Texas A&M University in College Station.

Dr. Darrell Peel, Oklahoma State University livestock economist, will be one of the featured speakers during the general session Aug. 3, discussing the cattle market outlook and current supply/demand factors that beef producers will want to consider in maintaining their own operations. “High prices certainly have been welcomed among cattle producers here in Texas and abroad,” said Dr. Jason Cleere, conference coordinator and Texas A&M AgriLife Extension Service beef cattle specialist in College Station. “Many are wondering how long this trend will continue and are evaluating the economics of restocking and/or increasing their herd size. We have several topics throughout this year’s short course that will address these issues and more.”

Historic high prices in the cattle market and future trends will be one of many important topics discussed in-depth at the 2015 Texas A&M Beef Cattle Short Course scheduled Aug. 3-5 at Texas A&M University in College Station.

Other featured speakers during the general session include Brian Bledsoe, chief meteorologist at KKTV-Colorado Springs, who will provide a weather outlook. Dr. Rick Machen, AgriLife Extension livestock specialist, Uvalde, will discuss hot topics in the beef industry.

The short course is the premier beef educational event in Texas, attracting more than 1,400 attendees annually, Cleere said. The short course features 20 sessions covering basic practices, new technologies and other important industry topics. These sessions provide participants with an opportunity to choose workshops based on their level of production experience and the needs of their ranch. “These concurrent workshops will feature information on introductory cattle production, forage management practices, range management, nutrition and reproduction, record keeping, genetics, purebred cattle, landowner issues and much more,” he said.

In addition to classroom instruction, participants can attend one of the popular demonstrations on the morning of Aug. 5, Cleere said. “There will be demonstrations on fence building, chute-side calf working, cattle behavior, penning and Brush Busters, program on brush management,” Cleere said. “These provide an opportunity for ranchers to see beef cattle production practices put to use.” “The goal of the short course each year is to provide the most cutting-edge information that is needed by beef cattle producers. We think we have information for everyone to take home and apply to their operations.” Participants can earn at least 10 Texas Department of Agriculture pesticide continuing education units if they are already licensed, Cleere added.

An industry trade show will be held during the event, featuring more than 120 agricultural businesses and service exhibits. Cleere said the famous Texas Aggie Prime Rib Dinner is always a highlight of the short course.

Registration is $180 per person before July 30 or $220 afterwards, and includes educational materials, a copy of the 600-page Beef Cattle Short Course proceedings, trade show admittance, admission to the prime rib dinner, lunches, breakfasts and daily refreshments.

Registration information and a tentative schedule will be mailed to previous participants in May, but also can be found on the short course website at www.beefcattleshortcourse.com. Producers can also register at the website or by contacting Cleere’s office at 979-845-6931.

USDA Redefines “Wealthy” Farm

By Marcia Zarley Taylor
DTN Executive Editor

Indianapolis (DTN) – Tax preparers have always felt uncomfortable policing their clients’ farm program eligibility. Now certification under the 2014 farm bill is only continuing to add to their heart burn.

USDA’s current definition of Adjusted Gross Income (AGI) could deny farm families from receiving government payments if they operate as either an S corporation or Limited Liability Corporation (LLC) taxed as a partnership. That rule could also throw a wrench into many garden-variety farm estate plans, speakers told 200 professionals gathered in Indianapolis for an American Institute of CPAs conference. The message didn’t go over well.

Under the 2014 Farm Act, farmers must not generate a three-year average Adjusted Gross Income greater than $900,000. The test applies first to legal entity levels (S corporation, LLC, LLP, etc.) and then to the individuals in that entity. For the sizable 2014 corn Agricultural Revenue Coverage-county payments growers will collect in early October, USDA will be averaging tax years 2010, 2011 and 2012 – unusually high income years when many went on equipment spending sprees.

The problem is that USDA’s Farm Service Agency’s definition of ABI excludes all Section 179 depreciation for legal entities such as LLPs, LLCs, and Sub S corporations. That decision befuddles CPAs since it creates a type of phantom income that would deny all farm program payments to these types of entities even though a regular corporation or individual would receive payments under the same conditions. “It’s not unusual for four family members organized as an LLC to have $1 million average incomes and possibly $500,000 a year in Sec. 179 spending from those years,” said Clifton Larson Allen agricultural CPA Paul Neiffer, president of the Farm Financial Standards Council. “Suddenly, this conflicts with good estate and business planning techniques that help family’s tran-sition ownership to another generation, or maybe save $5,000 a year in self-employment tax,” Neiffer said. Small business owners commonly use LLPs and LLCs for legal liability issues as well.

Unfortunately, such sound business practices could jeopardize payment eligibility, Neiffer added. He expects his home county of Benton, Washington, to generate 2014 ARC-County corn payments of about $115 a base acre, so many operators could be missing out on the maximum $125,000-per-person payments.

The irony in this new AGI definition is that USDA ignores income from capital gains, section 1231 gains on breeding stock or even bonus depreciation. Why USDA ignores some kinds of income or deductions and not the other doesn’t make a lot of sense, CPAs attending the conference said. Neiffer speculates it’s just that those items appear on a different page on the tax return.

Steve Troyer, a CPA with Eide Bailey in Fargo, N.D., certifies income for hundreds of farmers across the Dakotas and Minnesota. It’s become a cottage industry for him since so many local tax preparers “throw their hands up” when they see these USDA forms, he told DTN. Like Neiffer, he expects a number of family farms might bump up against the Farm Bill’s synthesized definition of AGI. “Our state FSA office knows the problem. We’d just wish they would listen to us,” Troyer said. “The bottom line is that IRS has a definition of Adjusted Gross Income that’s a line on form K-1. We’re not saying FSR needs to go to a lot of extra work to use it.”

Direct Receipts

Direct Receipts: 72,200

Texas 20,300. 93 pct over 600 lbs. 13 pct heifers. Steers: Medium and Large 1 FOB Current 625 lbs 244.00; 700 lbs 221.00; 750 lbs 215.00; 800-825 lbs 210.28; 875 lbs 204.60; July-Aug 775 lbs 212.00; Sept 600 lbs 239.00; Oct 750-775 lbs 208.55; Nov 400 lbs 215.35; Del Current 810-840 lbs 212.62; 875 lbs 208.50; Sept 750 lbs 212.17. Medium and Large 1-2 FOB Current 725 lbs 217.16; 750-785 lbs 212.26; 825-840 lbs 205.35; Aug 750 lbs 213.70; Sept 750 lbs 213.70; Del Current 500 lbs 255.90 Mex; 545 lbs 232.00 Mex; 670 lbs 209.30 Mex; 815 lbs 210.00; 875 lbs 200.00 Mex; July-Aug 875 lbs 201.70 Mex. Heifers: Medium and Large 1 FOB Current 700-725 lbs 205.45; Sept 575 lbs 221.00; 625 lbs 208.50; 650 lbs 206.90; Oct 650 lbs 205.25; 700-725 lbs 199.20; Del Current 700 lbs 203.15; 750 lbs 211.00; Sept 675 lbs 204.90; 700 lbs 205.05. Medium and Large 1-2 FOB Current 625 lbs 217.15; 740 lbs 202.25; Del Current 655 lbs 218.00.

Oklahoma 12,000. 100 pct over 600 lbs. 4 pct heifers. Steers: Medium and Large 1 Current 660 lbs 242.08; 800-830 lbs 213.87; 850 lbs 212.50; 915 lbs 200.34. Medium and Large 1-2 Current 750-800 lbs 212.31; 810-840 lbs 207.87; 905-925 lbs 199.21. Heifers: Medium and Large 1 Current 725 lbs 209.85; 750 lbs 207.30. Medium and Large 1-2 Current 700 lbs 203.70.

New Mexico 500. 100 pct over 600 lbs. No heifers. Steers: Medium and Large 1-2 Current 830 lbs 210.75; 875 lbs 202.50.

Kansas 3000. 100 pct over 600 lbs. No heifers. Steers: Medium and Large 1 FOB Current 800-825 lbs 215.32; 925 lbs 204.00; July-Aug 900 lbs 206.50; Del Current 850 lbs 850 lbs 212.81.

National Feeder Cattle Summary

St. Joseph, MO — July 17
National feeder cattle receipts: 121,100

A light test of yearlings and calves sold steady to $5 lower as extremely hot temperatures across much of the country help to curtail receipts. Temperatures for the most part were in the nineties with heat indexes reaching over 100 degrees. Few auctions noted cattle carrying long hair and susceptible to heat stress sold at a discount. Calves throughout the Southeast traded mostly $3-10 lower. Demand remains very good for yearling cattle as abundant feed supplies and a light supply of feeders available is helping to keep the cash feeder market a full $10 above the nearby feeder cattle futures. Feeder cattle futures had strong gains on Tuesday of over $3 and modest gains on Wednesday showing some footing. Then rebounding corn prices on Thursday rocked feeder cattle futures back on their heels after the previous gains. Western Video Market held a nice three-day sale this week selling over 92,500 head of feeder cattle based out of Reno, NV with over 70 percent of the consignments coming from areas west of the Rockies. One consignment of 225 head of fancy Nevada steer calves weighing 435 lbs sold for $373 for November delivery and 700 head of yearling steers from the North Central States weighing 825 lbs for August delivery sold for a weighted average price of $221.02. But in most cases fed cattle trade and boxed-beef sales are laboring in the dog days of summer with the extreme heat this week could spell trouble for the fed cattle trade. Choice boxed-beef has had a melt down over the past 13 trading sessions closing lower in 12 of them for a total loss of near $20 on Choice product, closing Friday at $233.30 down $.65 cents. On Wednesday, heavy movement of 246 total loads led to the largest single day volume movement since October 1, 2014. We are in a period which is known for its lack of demand and falling beef prices. Hopefully the worst has come and gone for boxed-beef as smoldering summer heat can be unbearable for summer grilling as prices attempt to carve out its summer lows. The meat sector at this time seems to have plenty of pounds to satisfy the market both here and abroad. Hog futures have seen sharp swings over the past week with increasing slaughter levels going forward into fall as hog slaughter is running 11.9 percent higher than last year. There are also ample poultry supplies as chick placements are up and larger than last year by about 2.5 percent. Corn crop conditions remain at 69 percent rated good to excellent with 9 percent rated poor to very poor compared to 8 percent last week. Uneasiness remains in the grains as areas that have rained soaked crops offer very little hope for producing an average yield which should bear watching for corn prices going forward. The old saying “rain makes grain” is true more often than not; it will likely discount the negative impact on too much rain in key areas. The debate going forward: Will strong yields in key areas offset low yields in other areas? Negotiated cash trade Friday afternoon in Kansas and Northern Plains was mostly $2 lower on live sales at $148.
Texas 4600. 67 pct over 600 lbs. 34 pct heifers. Steers: Medium and Large 1 500-550 lbs (573) 258.25; 600-650 lbs (610) 233.79; 650-700 lbs (663) 217.54; 700-750 lbs (711) 223.87; 750-800 lbs (767) 213.78; 800-850 lbs (834) 205.17; 850-900 lbs (863) 199.15. Medium and Large 1-2 500-550 lbs (529) 253.55; 650-700 lbs (687) 219.46; 700-750 lbs (744) 203.67; 750-800 lbs (775) 200.44; 800-850 lbs (828) 197.30. Heifers: Medium and Large 1 400-450 lbs (437) 275.97; 500-550 lbs (513) 230.13; 650-700 lbs (676) 205.40; 700-750 lbs (714) 201.59; pkg 775 lbs 193.00. Medium and Large 1-2 400-450 lbs (427) 229.90; 450-500 lbs (471) 238.21; 550-600 lbs (582) 215.65; 600-650 lbs (635) 210.84; 650-700 lbs (684) 198.75; 700-750 lbs (710) 188.01; load 850 lbs 185.50.
Oklahoma 21,400. 65 pct over 600 lbs. 38 pct heifers. Steers: Medium and Large 1 300-350 lbs (331) 346.71; 350-400 lbs (365) 349.65; 400-450 lbs (432) 299.55; 450-500 lbs (479) 279.29; 500-550 lbs (528) 268.60; 550-600 lbs (571) 255.84; 600-650 lbs (621) 246.31; 650-700 lbs (669) 240.29; 700-750 lbs (724) 229.17; 750-800 lbs (765) 224.46; 800-850 lbs (831) 216.13; 850-900 lbs (870) 211.30; 900-950 lbs (919) 210.81; 950-1000 lbs (967) 200.23; 1000-1050 lbs (1019) 194.09; load 1085 lbs 185.25. Medium and Large 1-2 350-400 lbs (373) 302.46; 400-450 lbs (428) 301.63; 450-500 lbs (469) 274.09; 500-550 lbs (530) 259.32; 550-600 lbs (579) 243.74; 600-650 lbs (625) 235.77; 650-700 lbs (677) 239.27; 700-750 lbs (730) 223.72; 750-800 lbs (778) 219.54; 800-850 lbs (824) 213.86; 850-900 lbs (870) 207.64; 900-950 lbs (971) 196.80; 950-1000 lbs (971) 196.80; 1000-1050 lbs (1026) 185.88. Holsteins: Large 3 pkg 445 lbs 218.00; pkg 675 lbs 167.00; part load 700 lbs 155.00; load 755 lbs 169.00; 850-900 lbs (869) 152.10. Heifers: Medium and Large 1 300-350 lbs (326) 303.41; 350-400 lbs (373) 284.99; 400-450 lbs (424) 263.34; 450-500 lbs (472) 254.16; 500-550 lbs (520) 237.06; 550-600 lbs (569) 232.00; 600-650 lbs (616) 219.04; 650-700 lbs (678) 215.70; 700-750 lbs (722) 210.10; 750-800 lbs (771) 206.39; 800-850 lbs (825) 200.89; 850-900 lbs (870) 194.41. Medium and Large 1-2 300-350 lbs (332) 289.71; 350-400 lbs (382) 269.07; 400-450 lbs (426) 251.56; 450-500 lbs (472) 239.96; 500-550 lbs (521) 225.94; 550-600 lbs (584) 225.44; 600-650 lbs (639) 216.37; 650-700 lbs (691) 211.83; 700-750 lbs (726) 207.79; 750-800 lbs (781) 199.29; 800-850 lbs (829) 195.38; 850-900 lbs (860) 193.46.
New Mexico 2800. 42 pct over 600 lbs. 34 pct heifers. Steers: Medium and Large 1 400-450 lbs (427) 280.41; 500-550 lbs (538) 258.71; 550-600 lbs (572) 245.54; 600-650 lbs (610) 240.26; 750-800 lbs (768) 205.51. Medium and Large 12 300-350 lbs (344) 320.49; 350-400 lbs (366) 305.22; 600-650 lbs (618) 225.60. Heifers: Medium and Large 1-2 300-350 lbs (330) 291.07.
Kansas 5500. 88 pct over 600 lbs. 41 pct heifers. Steers: Medium and Large 1 550-600 lbs (563) 271.45; 600-650 lbs (612) 258.68; 650-700 lbs (664) 243.01; 700-750 lbs (737) 232.85; 750-800 lbs (762) 226.00; 800-850 lbs (831) 218.06; 850-900 lbs (872) 215.10; 900-950 lbs (954) 212.30; 950-1000 lbs (954) 212.30; 1000-1050 lbs (1032) 203.57. Medium and Large 1-2 pkg 490 lbs 286.50; 500-550 lbs (533) 264.95; 550-600 lbs (582) 258.21; 600-650 lbs (630) 240.27; 650-700 lbs (675) 235.57; 700-750 lbs (730) 226.79; 750-800 lbs (783) 219.02; 800-850 lbs (818) 210.89; 850-900 lbs (863) 208.03; 950-1000 lbs (967) 197.66. Heifers: Medium and Large 1 450-500 lbs (476) 281.65; 500-550 lbs (530) 250.54; 550-600 lbs (570) 244.07; 600-650 lbs (607) 239.93; 650-700 lbs (682) 220.51; 700-750 lbs (721) 217.21; 750-800 lbs (771) 207.24; 800-850 lbs (819) 196.94; load 895 lbs 200.25; 900-950 lbs (905) 199.06. Medium and Large 1-2 400-450 lbs (444) 255.20; 500-550 lbs (529) 241.14; 550-600 lbs (589) 230.05; 600-650 lbs (616) 224.39; 650-700 lbs (686) 217.95; 700-750 lbs (732) 208.15; 750-800 lbs (763) 201.56; 800-850 lbs (828) 194.36.
Missouri 15,000. 43 pct over 600 lbs. 39 pct heifers. Steers: Medium and Large 1 300-350 lbs (332) 308.34; 350-400 lbs (380) 300.79; 400-450 lbs (428) 294.45; 450-500 lbs (478) 278.76; 500-550 lbs (523) 269.70; 550-600 lbs (573) 256.05; 600-650 lbs (628) 244.09; 650-700 lbs (673) 233.26; 700-750 lbs (721) 224.84; 750-800 lbs (781) 212.59; 800-850 lbs (817) 206.61; 850-900 lbs (869) 192.80; 900-950 lbs (931) 191.52. Medium and Large 1-2 300-350 lbs (330) 312.58; 350-400 lbs (375) 283.36; 400-450 lbs (428) 273.99; 450-500 lbs (480) 265.72; 500-550 lbs (525) 258.31; 550-600 lbs (579) 242.31; 600-650 lbs (619) 235.14; 650-700 lbs (671) 227.49; 700-750 lbs (717) 217.86; 750-800 lbs (773) 208.58. Holsteins: Large 3 pkg 590 lbs 183.00; 750-800 lbs (761) 172.00. Heifers: Medium and Large 1 300-350 lbs (327) 266.48; 350-400 lbs (379) 265.57; 400-450 lbs (424) 256.70; 450-500 lbs (474) 248.38; 500-550 lbs (522) 237.71; 550-600 lbs (573) 229.70; 600-650 lbs (623) 219.76; 650-700 lbs (672) 206.37; 700-750 lbs (726) 201.66; 750-800 lbs (758) 203.61. Heifers: Medium and Large 1-2 300-350 lbs (323) 247.03; 350-400 lbs (378) 250.28; 400-450 lbs (426) 243.08; 450-500 lbs (477) 237.25; 500-550 lbs (525) 226.98; 550-600 lbs (575) 218.25; 600-650 lbs (621) 213.13; 650-700 lbs (669) 206.24; 700-750 lbs (719) 200.94; 750-800 lbs (769) 201.43; 800-850 lbs (827) 188.09.
Arkansas 7300. 35 pct over 600 lbs. 38 pct heifers. Steers: Medium and Large 1 300-350 lbs (318) 320.34; 350-400 lbs (374) 303.17; 400-450 lbs (423) 282.53; 450-500 lbs (468) 262.03; 500-550 lbs (528) 253.66; 550-600 lbs (568) 236.23; 600-650 lbs (615) 233.91; 650-700 lbs (665) 226.17. Heifers: Medium and Large 1 300-350 lbs (324) 280.15; 350-400 lbs (376) 270.10; 400-450 lbs (423) 251.74; 450-500 lbs (471) 241.51; 500-550 lbs (524) 229.10; 550-600 lbs (568) 219.74; 600-650 lbs (622) 218.17; 650-700 lbs (667) 208.91.

 

 

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Thursday, July 23, 2015 2:33 PM