Dr. Dan Talks Agronomy

Fri. Nov 27, 2015 2:33 PM

By Dan Davidson
DTN Consulting Agronomist

A recent report from Michigan State University reports no significant yield response from applying gypsum (calcium sulfate) on soybeans. It's a good example of why we never want to depend on one year of test results. The same study in 2014 showed a 6-bushel-per-acre positive yield bump in soybean.

Gypsum does have its uses as both a soil amendment and a fertilizer. There are measurements and formulas to determine how much to apply to remediate sodium and salinity. It's when used to supply calcium and sulfur that there are no clear measurements on which to base recommendations, and in the case of soil, it may take as much as six to eight years to notice a difference.

I first applied gypsum back in 2004 on 80 acres. I applied a ton of synthetic gypsum (Procal 40 from Soil Solutions) and have continued that practice every third year as both a soil amendment and a sulfur source. I began to notice significant changes in soil tilth in 2010 -- six years after the first application. I have never tried to measure a yield response.

It doesn't surprise me that this study contradicted itself in 2015. James DeDecker, author of the Michigan study, stated that most soils in Michigan don't lack calcium or structure that requires gypsum remediation. However, he points out that the courser-texture soils (sands) could respond since they have a smaller CEC value and are lower in organic matter and won't mineralize as much sulfur.

We have known for decades that sulfur is mostly needed on course soils. With reductions in atmospheric sulfur deposits (thanks to the Clean Air Act introduced in 1963) applications of supplemental sulfur are most commonplace for all crops including alfalfa, corn and soybeans.

DeDecker said in his study, "Inadequate levels of available sulfur are not only directly detrimental to soybeans, but can also inhibit uptake and utilization of nitrogen by the crop due to the synergistic roles of sulfur and nitrogen in protein synthesis." However, soybeans are not as responsive to supplemental sulfur as alfalfa and corn.

In 2014, the Michigan study applied 1/2 ton of bulk natural (powdered) gypsum and increased yields by 6.6 bushels per acre. In 2015, they used a different site and applied Gypsoil's synthetic gypsum and Calcium Products' pelletized SuperCal SO4 mined gypsum at three rates. Yields averaged 37.4 bushels per acre with no significant difference between treatments, and the untreated control averaged 38.2 bushels. Tissue tests found all treatments provided sufficient calcium, nitrogen and sulfur.

DeDecker believes the responses relate to soil quality differences between the two sites and differences in texture, CEC and organic matter. The field in 2014 had a CEC of 5.1 and organic matter of 1.9%. In 2015, CEC was 10.5 and organic matter was 2%. As a result, DeDecker concluded CEC and organic matter might be able to predict deficiencies and gypsum responses.

It will take years of additional calibration work at different rates, sites and soil types to develop gypsum application recommendations. The Michigan State work seems like a good start, and I hope we keep working toward this goal.

To read the full Michigan State University article "Soybean response to gypsum is dependent on soil quality," click on the following link: http://goo.gl/…

If you have a question, e-mail Dr. Daniel Davidson at askdrdan@dtn.com


Ask the Taxman by Andy Biebl

Fri. Nov 27, 2015 1:51 PM

By Andy Biebl
DTN Tax Columnist


I read your article in the October Progressive Farmer involving a grain producer who created a Charitable Remainder Trust (CRT), sold grain, and took back an annuity to spread out the income taxes and eliminate the self-employed Social Security tax. We have a breeder hen farm with a sale contract that will close soon. Is it possible to follow the same method to minimize some of the taxes, which are projected to be about $150,000? Some of the income is ordinary from prior depreciation and some is capital gain. The farm is nearly 100% depreciated, and we are in our 70s so are not interested in another Section 1031 rollover into other real estate at our age.


A CRT can accept virtually any asset from a donor, but a key point is that we must be transferring an unsold asset that is then disposed of by the CRT. The CRT needs to actually conduct the sale to be tax-free; the CRT then invests the proceeds and pays the term annuity to the grantor of the CRT. Your question indicates that you have a sale contract and you mentioned a closing date. That suggests that the sale is set and just awaiting closing. The IRS view would be that the sale had actually been completed by you and the sale proceeds assigned to the CRT; this would not avoid the immediate taxation. Also, if a significant portion of your gain is at capital gain rates, the CRT would not have been advisable. The ordinary income payments come first, and the capital gain portion, taxed at lower rates, is the last portion of the annuity.


Can someone set up a CRT without retiring? As an example, could I transfer unsold grain into a CRT and stretch out the payments, even though I am continuing to farm? And how much does it cost to set up a CRT?


Yes, it is possible to use the CRT deferral technique without retiring. On several occasions, we have had clients take this action where grain prices are very high and it makes great business sense to sell, but from a tax standpoint it is better to stretch the payments over multiple years rather than push up the tax bracket currently.

The cost is a variable, depending on the types of assets transferred and your attorney fees to draft the documents. The IRS has issued sample pre-approved CRT documents, which makes it easier for the attorney (see Rev. Proc. 2003-54). And if it is a simple bill of sale to transfer unsold grain, in addition to the CRT document, it may not be very complicated -- perhaps $2,000 -$3,000. You will also need a trust department to administer the CRT and issue the payments over the specified term of years. And either that trust department or your tax preparer will need to prepare the annual information return for the CRT, reporting the annual income payout results to both the IRS and to you, as the recipient of the annuity payment.


Who controls the CRT during the term of years, the farmer or the charity that will receive the residual? And how is the money invested over this period?


Technically, the trustee of the CRT controls the trust. That party's responsibility is managing the investments, making the annual payment under the terms of the trust instrument, and at the end of the term moving whatever residual remains to the charity. In many of the CRTs that we use for retiring farmers, the charity is unaware of the existence of the CRT until the CRT term expires and the charity receives the residual.

Some larger charities will have the ability to assist in establishing a CRT, with the obvious expectation that the charity is the residual beneficiary. But those are often designed to move a significantly greater portion than the 10% statutory minimum to the charity. In almost every case involving a retiring farmer, the CRT document is drafted by the grantor's attorney, and designed to maximize the income tax benefits to the retiring farmer/grantor. And often, there may be several charities designated as the residual beneficiaries (e.g., one-half to my church and one-half to our local hospital).

The investments are made with an eye to the annual payments required to the grantor. In a 10- or 15-year CRT, some of the investments can be long term (say stocks or mutual funds), as a portion of the payments are not due for many years. But a portion of the investments should be liquid, lower risk, in order to have the funds for those first several years of payouts. Professional trust departments are good at this; use one as the trustee! The better the investments, the more for the charity at the end.


Is it too late for a CRT to be set up after a farm sale?


Yes. Assets transferred to the CRT must be unsold, with the disposition then handled by the trust. If the proper steps are not followed, the sale of the assets is taxable to the grantor of the trust.


Editor's Note: Andy Biebl is a CPA and tax principal with the firm of CliftonLarsonAllen LLP in Minneapolis with more than 40 years of experience in ag taxation, including 30 years as a trainer for the American Institute of CPAs and other technical seminars. He writes a monthly column for our sister magazine, The Progressive Farmer. To pose questions for future tax columns, e-mail AskAndy@dtn.com.

Expect to retire in the next 10 years? Learn more about how to "Exit Agriculture Without Paying a Monster Tax" at a half-day DTN University workshop in Chicago Dec. 6. Go to www.dtnagsummit.com for details.


Soil Health Gaining Traction

Fri. Nov 27, 2015 11:15 AM

By Chris Clayton
DTN Ag Policy Editor

SHELBY, Neb. (DTN) -- It was a little chilly Monday morning as Greg Whitmore gave an early tour of various cereal rye cover-crop mixes on his farm.

Whitmore is one of 40 farmers taking part in the Soil Health Partnership, a long-term research demonstration project led by the National Corn Growers Association with support from Monsanto Co. and the Walton Family Foundation. Whitmore was showing how various mixes of cereal rye, turnips, radishes and clover were doing on his fields. The cover crops were applied at different times and with different methods, ranging from aerial seeding to using a high-boy seeder in the field.

"Anytime the average air temperature is above 40 (F) degrees, rye will be growing," said Nick Goeser, director of the Soil Health Partnership for NCGA. "It's a really versatile cover crop and a good fall-back."

Forty farmers are involved in the Soil Health Partnership, mainly in Indiana, Illinois and Iowa, and another 25 farmers are likely to join the partnership within the next year, Goeser said. The reach is expanding, as some groups in Nebraska want to set up a specific program just for that state that would link into the national efforts.

Soil health is going to get a lot of focus in the coming week. World Soil Day is Dec. 4 and will be celebrated by the United Nations Food and Agriculture Organization. Around that time, a new soil-health institute in the U.S. will be launched as well with a focus on studying soils nationally to increase long-term productivity and resiliency.

Agricultural groups plan to take these soil-health elements to Paris for the climate talks to make the case that more needs to be done in global climate discussions to ensure resiliency in the food system.

"With Paris coming up, we're going to be talking about air quality more and more and the U.S. commitments," Goeser said.

Just last week, the Natural Resources Defense Council rolled out its own study championing cover crops and soil health to increase crop resiliency, sequester carbon in the soil and improve water-holding capacity in crops.

Whitmore farms about 2,500 acres, of which about two-thirds are corn and one-third are soybeans. Whitmore's corn crop is a mix of seed corn, grain and silage. His silage supplies a large nearby dairy. The dairy also provides crop nutrients by pumping effluent from the dairy farm through their pivots, as well as offering slurry for fields. Whitmore said he normally will get a couple of one-acre-inch applications from the dairy effluent on his fields in a given year that will satisfy most of the fertilizer demands for his corn crop after he plants it. Whitmore notes the difference in areas that get effluent applied and those that don't.

"You can see over here with some of the cover crop where the effluent covered and where it didn't," Whitmore said. "There's a definite growth difference."

While his cover seeding costs can run $15 to $25 an acre depending on the application and mixes, Whitmore noted his custom silage cutters have told him they see a difference in silage fields where cover crops are used because the cover crop holds nitrogen that can later be taken up by the silage corn during different growing stages.

Goeser visited Whitmore's farm Nov. 23 as part of a road trip with his father and brother. Goeser wanted to see how Whitmore and other area farmers were growing cover crops while also using effluent and slurry mixed in from a dairy. Whitmore was concerned that applying slurry after seeding a cereal rye-radish cover mix would tear up the field too much. That didn't turn out to be the case as the cover crops recovered quickly and began growing.

"I've had a number of people ask me how to work cover crops into a dairy system," Goeser said.

Whitmore started planting cover crops in 2002-03. He had started selling silage to the new dairy a year or two earlier. After a couple of springs of watching dust blow off the fields, Whitmore said he realized he needed to change the way he manages his fields. That's when they started putting some cereal rye down, he said.

"I'm a firm believer we have got to have a cover over that crop," Whitmore said. "... It help(s) conserve moisture, even though it takes a little bit to grow it."

Whitmore said his fields normally will have about 40 pounds of rye for seeding to get the airflow working well on the seeder. Whitmore will add about four pounds of turnips and in some fields also add radishes and clover in others. In some fields, Whitmore will lease the cover-crop stand for cattle to graze.

Whitmore reiterated that one of the big benefits of the Soil Health Partnership is the chance to share knowledge with other farmers and learn from them. "There are always those unanswered questions out there you need to figure out a way to work around or work better," Whitmore said.

Still, one of the bigger issues in the soil-health debate is quantifying the financial gains for producers who plant cover crops. Whitmore agreed that's an area where he would like to see more research. The payback is longer term as cover crops give farmers a basis for improving productivity, he said.

"That is the one question that needs to be figured out," Whitmore said. "We're not just doing this to make the field pretty this time of year and see some green as soon as the snow is gone."

Goeser said there are efforts going on in lease agreements to try to apply broad soil-health principles to create cost-share agreements between the landowner and renter. Other groups are looking to tie soil health into crop insurance as a risk-management tool for production. A task force led by the group AGree is considering how that may work.


Last week, members of the Soil Health Partnership took part in a couple of scientific and sustainability events tied together in Minneapolis. Bryan Biegler, who farms about 2,200 acres of corn and soybeans near Lake Wilson in southwest Minnesota, began converting to no-till, strip-till and has been working over the past three years to implement cover crops into the operations. The strip-till runs a shank about every 30 inches and makes about an 8- to 10-inch-wide strip to plant in.

"The biggest reason I changed was erosion," Biegler said. "I was getting these heavy rains after planting and getting a lot of runoff. I had been looking at strip-till for about 10 years, and finally after seeing the gullies, I realized I had to make a change."

Biegler bought a high-clearance sprayer and put a seed box on it so he could seed rye grass or cereal rye into a standing corn crop. That also allowed him to start doing some custom seeding of cover crops. Biegler has noted how the cover crops absorb water, particularly in a couple of lowland spots where he has often had difficulty getting the field to dry out.

"Now that I've seen the erosion control, I want to get looking at water infiltration and seeing how that is improving," Biegler said. "The little bit of testing my local NRCS office has done, we've seen some big improvements in the water and how much it will soak into the soil profile."

Biegler joined the Soil Health Partnership this year as a way to better learn more practices and network with other farmers using similar practices.

"I thought it would be a good way to ask more questions about this stuff and try to avoid some pitfalls with it," he said.

Steve Berger said last week in Minneapolis that his farm in southeast Iowa is in its 36th year as a continuous no-till farm with a 50:50 corn-soybean rotation. Berger credits his father who was always focused on conservation, as well as a county extension agent in the 1970s that pushed farmers in Washington County, Iowa, to adopt no-till farming.

"We're in southern Iowa and we get the hills so there is soil erosion," Berger said. "Dad dropped the plow in the '60s and went to a chisel plow, but he was always conservation-minded and really stuck to it."

The Bergers also added cover crops about 15 years ago. Despite decades of work in no-till and cover cropping, Berger joined the partnership this year to learn more about what the scientific community is doing in the arena. "I really want to know what other guys are doing differently out there," he said.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN


Waiting on EPA's RFS Rule

Wed. Nov 25, 2015 5:17 PM

By George Orwel
DTN Energy Reporter

NEW YORK (DTN) -- Following multiple delays, the Obama administration is under intense pressure from ethanol, oil and ag commodity groups as well as members of Congress as it prepares to release Renewable Fuel Standard obligation levels for 2014 through 2016 sometime between now and Monday.

The Environmental Protection Agency is supposed to determine how much ethanol is needed for the next year by Nov. 30, but the agency has missed its deadline at least each of the past two years.

Last May, EPA announced in a response to litigation by the petroleum industry that the agency would make the call on the blend volumes by Nov. 30. As a result, the 2014, 2015 and 2016 Renewable Volume Obligations (RVOs) are expected to be issued before Tuesday.

The RVO levels for ethanol are determined by estimating gasoline demand for the years in question. EPA had initially considered cutting the blend volumes by about 20% below the statutory levels because of earlier data showing weak demand for gasoline.

Given the fight since 2013 over these blend levels, it's likely biofuel supporters or the petroleum industry will cry foul once the blend volumes are released and immediately file a lawsuit over the EPA's handling of the issue.

Estimating gasoline demand has been a challenge due to the fact that the U.S. economy is resilient, but the global economy has been affected by the Chinese slowdown. However, prices for unleaded gasoline and 10% ethanol-blended gasoline across most of the country are now below $2 a gallon, the lowest for the Thanksgiving holiday since 2004, according to market analysis from the website GasBuddy.com.

EPA's proposal released in May would set renewable fuel mandates at 15.93 billion gallons for 2014, 16.3 billion gallons for 2015 and 17.4 billion gallons for 2016. The proposal reflects between 9% and 10% of gasoline volumes.

Last week, the Renewable Fuels Association sent a letter to President Barack Obama detailing the dynamic state of the U.S. ethanol industry, and noted that in excess of 13 billion gallons of ethanol are produced annually in the domestic market.

RFA and Growth Energy, two top ethanol trade groups, went to the White House on Nov. 18 to urge strict compliance with the RFS in the face of a campaign by anti-ethanol groups for the government to either scrap the RFS law or limit the ethanol mandate. They told officials at the Office of Budget Management that the EPA should not cut RVOs as initially proposed.

RFA President and CEO Bob Dinneen said the U.S. ethanol industry would have no problem meeting the 15 billion gallon blending level specified by the statute, citing data from EIA showing that gasoline consumption projections for 2016 have increased to a nine-year high.

The American Petroleum Institute, the nation's largest trade group for the oil and gas industry, has increased its lobbying campaign to lower the ethanol mandate. API has not been a fan of the RFS. The petroleum industry had its own meeting with White House officials late last week. API argues that ethanol mandates should be kept below the current 10% threshold acceptable for use in all cars and trucks. The American Fuel and Petrochemical Manufacturers had a similar message.

Even foreigners have got into the act. The Union of Sugarcane Industry Association, Brazil's largest trade group for sugarcane and ethanol producers known by its Portuguese acronym UNICA, said it had earlier submitted comments opposing the proposed changes to RFS or lower ethanol mandates.

UNICA said lower statutory RVOs are "unnecessary" since Brazil has increased its output and exports to the U.S. over the past three years by 6%, and hopes to raise exports to the U.S. over the coming years to 2 billion gallons.

Lawmakers remain divided on the issue. A bipartisan group of 184 House members recently sent a letter that calls on the EPA to set the final volume for ethanol in 2016 at a level that would account for the blend wall.

But last week, House Minority Leader Nancy Pelosi, D-Calif., and Democratic Whip Steny Hoyer, D-Md., wrote to the White House urging it to push refiners to use more ethanol. Those producers say oil companies could provide ethanol blends of up to 85% if they were prodded to do so by the government. A rule that locks in the "blend wall" would be "counter to our efforts" in the 2007 law.

DTN Ag Policy Editor Chris Clayton contributed to this report.

George Orwel can be reached at george.orwel@dtn.com


Enlist Reversal

Wed. Nov 25, 2015 5:10 PM

By DTN Staff

OMAHA (DTN) -- The U.S. Environmental Protection Agency said in a court motion Tuesday it wants to pull the plug on Dow AgroScience's Enlist Duo herbicide, citing "new information" it received about the potential environmental effects of the herbicide designed to work with genetically-engineered corn and soybean.

In a court document filed with the U.S. Ninth Circuit Court of Appeals Tuesday, EPA stated that because the agency has "new information regarding potential synergistic effects between the two ingredients on non-target plants, EPA seeks a voluntary remand in order to reconsider the Enlist Duo registration in light of the new information." In court documents, the agency said it "cannot be sure, without a full analysis of the new information, that the current registration does not cause unreasonable effects to the environment, which is a requirement of the registration standard under FIFRA (Federal Insecticide, Fungicide, and Rodenticide Act)."

Enlist Duo herbicide, which contains a mix of glyphosate and a new formulation of 2,4-D, received EPA registration in a select number of corn states in fall 2014. The genetically-engineered trait package that gives crops resistance to those two herbicides was approved for corn and soybeans September 2014 and for cotton, July 2015.

In April 2015 the EPA granted final approval of Enlist Duo herbicide for use in nine additional states, bringing the total to 15 states.

Dow had not yet sold the seed and herbicide package commercially. It had been conducting research, seed production and "stewarded" trials for corn and soybean seed in 2015. Dow had said it was holding full commercial release pending Chinese approval of the genetically-engineered traits in grain. Dow had said it did not want producers to run into grain sales issues; China has a recent history of being slow to approve a number of U.S.-approved traits and has refused U.S. corn that contained unapproved traits.

In a statement provided to DTN Wednesday, EPA said Dow made new information available "that suggests (the) two active ingredients could result in greater toxicity to non-target plants. EPA has not yet completed its review of the new information."

Neither EPA nor Dow would specify at press time what the "new information" included. Dow has for months, on its Enlist Duo website (http://www.enlist.com/…) and in sales and marketing materials, heralded "combining the proven control of a new 2,4-D and glyphosate" as one of the key points for growers using the Enlist herbicides and the crops genetically engineered to tolerate both herbicides. Farmers have been using a tank mix of the two products, applied as burndowns and other early season applications, for decades.

According to the motion filed by EPA in court, the agency originally registered the herbicide because it saw "no indication of synergism" with the combination of glyphosate and 2,4-D. So, in approving the new combination product, it reviewed the toxicology and other environmental effects of each herbicide individually. It did not ask for research trial data on the two active ingredients together because, at the time, EPA said "it is reasonable to assume that there are no synergistic interactions for the taxonomic groups that were not tested, including plants."

The court filing this week says that EPA "recently discovered" Dow's claims of "synergistic weed control" in patent filings Dow has made on Enlist Duo. EPA's court filing says it sent a letter to Dow on Oct. 13 saying that the synergistic weed control Dow was claiming could "affect the Agency's assessment of drift reduction measures."

Andrew Kniss, University of Wyoming weed researcher, detailed the meaning of synergistic effects in a blog post Wednesday http://bit.ly/… and noted that Dow's patent http://bit.ly/… indicates synergies exist between the two chemicals.

A Dow spokesman told DTN that the company learned of the court filing Tuesday. He said the company is "considering options" regarding what court actions it may take.


Drift control has been a critical issue in the Enlist Duo registration, as 2,4-D has a long history of drift issues. The new Enlist herbicide/seed packages would allow the growth-hormone disruption herbicide to be applied much later in the season, when sensitive crops and plants would be growing and much more susceptible to it.

EPA had mandated buffer zones around Enlist crops as part of the original registration in an effort to reduce drift issues.

"EPA is seeking a remand because this new information could lead EPA to a different decision on the restrictions for using Enlist Duo. Specifically, this could result in changes to the width around application areas of no-use buffer zones that EPA imposed to protect unintended plants, including those listed as endangered," the EPA court filing said.

In October 2014, several environmental groups sued EPA in the Ninth Circuit Court of Appeals on the agency's decision to register the Enlist Duo herbicide.

Groups such as the Center for Food Safety and the Environmental Working Group quickly heralded EPA's decision to ask to pull the registration. Several claimed the decision was based on "high toxicity levels," though EPA announcements referred to the need to evaluate spray drift buffer strips and did not discuss toxicity levels.

Enlist Duo had been labeled for use in Arkansas, Kansas, Louisiana, Minnesota, Missouri, Mississippi, Nebraska, Oklahoma, Illinois, Indiana, Iowa, Ohio, South Dakota, Wisconsin and North Dakota. EPA had considered approving the product for use in Tennessee, but decided against it because of concerns it would harm some the endangered plant species Spring Creek bladderpod.

The first six states approved are areas with strong penetration by Dow's Mycogen Seeds and other seed partners. The 10 additional states, particularly the Southern states of Arkansas, Louisiana, Tennessee and Missouri, are key battleground areas for tough glyphosate-resistant weeds such as Palmer amaranth.

Registering in Southern states has been a bit trickier because few crops are as sensitive to 2,4-D drift than non-tolerant cotton. The Enlist cotton trait received regulatory approval July 2015, but Enlist Duo herbicide is still pending for that crop.

The original Enlist Duo registration included a number of use requirements and restrictions that are unusual for an EPA registration. The agency has made it known it is interested in curbing weed resistance to herbicides, and said all new herbicide-tolerant crops, not just this system, will likely carry restrictions to guard against the overuse, and subsequent weed-resistance problems. Similar restrictions for current herbicide-tolerant cropping systems, including glyphosate and glufosinate, are also being discussed.

The registration required 30-foot, in-field, no-spray buffer zones to minimize drift, and does not allow spraying when winds are greater than 15 miles per hour. In addition, EPA required scouting and reporting for potential weed resistance to Enlist Duo, as part of the six-year registration.

Last year, Canada approved the use of Enlist Duo for the same uses that EPA authorized. Other approvals have come from Argentina, Australia, Colombia, Japan, Korea, Mexico, New Zealand, South Africa and Taiwan. In addition, the herbicide mix is approved for use in 26 European Union nations.

EPA has had several recent safety reviews of 2,4-D: in 2005, in 2012 and in 2014.

Neither EPA nor Dow could offer a timeline on when the agency would finalize the current review of any new information. "We expect to complete our review in a timely manner," EPA told DTN in an email.

Dow issued a general response to media, saying the company is "working with EPA to quickly provide further assurances that our product's conditions of registered use will continue to protect the environment, including threatened and endangered plant species." The company said it expects "that these new evaluations will result in a prompt resolution of all outstanding issues."

Timing of that review is critical, Dow and farmers have said during the original Enlist registration process. The combination of the herbicides and traited seeds offers one of the few alternatives to glyphosate-resistant weeds, which are now found in most corn and soybean growing areas. Dow had expected Chinese registration for the grain traits soon, as recent trade visits by U.S. representatives had focused on speeding up Bejing's approval process.

The Enlist issue marks the third regulatory blow to Dow originating in the U.S. Ninth Circuit Court of Appeals in a matter of months.

On Nov. 12, the EPA announced a ban of sulfoxaflor, the active ingredient in Dow's Transform WG insecticide, and the agency has also proposed a ban of chlorpyrifos, the active ingredient in Dow AgroScience's Lorsban insecticide.

The Transform ban was inspired by the Ninth Circuit Court of Appeals' ruling after a lawsuit by the Pollinator Stewardship Council, filed by Earthjustice, questioned whether the EPA had sufficient environmental data to register the chemical. The court ruled that the agency's original registration of sulfoxaflor in 2013 was "based on flawed and limited data" and demanded that agency "obtain further studies and data regarding the effects of sulfoxaflor on bees."

Likewise, the proposed ban on chlorpyrifos stemmed from a Ninth Circuit Court of Appeals' ruling that pressured the EPA to establish food tolerances for the insecticide, an action EPA lacked the data to execute. This time, the lawsuit was filed by Earthjustice on behalf of the Pesticide Action Network and Natural Resources Defense Council.

"This court is known for making rulings that align with activist organizations at the expense of agriculture," former National Sorghum Producer chairman J.B. Stewart said in a press release protesting the Transform ban. "We plan to do our part in pushing back on these nonsensical court decisions that unfortunately are becoming more frequent and to the detriment of farmers and ranchers across the nation," he added.

DTN reporters and editors Todd Neeley, Pam Smith, Chris Clayton and Emily Unglesbee contributed to this story.


Woodbury: Farm Family Business

Wed. Nov 25, 2015 11:58 AM

By Lance Woodbury
DTN Farm Family Business Adviser

Conflict and family business simply go together. When you work everyday among people with whom you've spent a major portion of your life, your different opinions and approaches are bound to rub each other the wrong way. The question is not whether you will have conflict, but over which issues you will fight, how you will engage each other, and whether you will be able to move on.


Conflict, when focused on the right issues, can expose alternative ideas and create necessary change. In particular, conflict over the vision and strategies of the business can be useful in uncovering opportunities in the market, or a differentiated or more competitive way of operating. Family business participants, and especially current and future owners, need to air their differences and come together over where the business is headed and how it will get there. Working through those conflicts will produce a psychological ownership, helping the company persevere through the ups and downs of a cyclical industry.

There are other issues, however, where conflict can be destructive. Fighting over inheritance decisions, and conflicts around how family members and spouses are treated in daily interaction, are two places where the results can be deleterious.

A typical farm or ranch inheritance conflict is one in which the on-farm heir is gifted an equal portion of the land or operating company along with off-farm heirs. While this may satisfy the parents' desire to be equal, it almost always creates a financial and control hurdle, and future conflict, for the on-farm heir. The parents who built or grew the business have every right to dispose of their assets as they see fit, but the fight between the parents and on-farm heir can destroy the farm.

Another fight often emerges around how people are treated. A lack of communication in general, not including spouses in relevant discussions, making assumptions about people's intentions and motivations, and talking about one family member or their spouse with other family members, such that alliances are formed, can chip away at the trust and respect between family members.


Several behaviors contribute to effective management of conflict. First, acknowledging the conflict exists is critical. Family members often sweep it under the rug, hoping it will go away, but that strategy almost always backfires. Second, knowing what you want and why you want it -- which requires personal reflection -- helps clarify your position and your interests; it helps you and others know where you stand. Third, agreeing to a process of meetings ensures communication. And you will likely need several meetings, as you almost never reach major conclusions with just one. If the issues are too "hot," consider an impartial third party as a mediator. Fourth, agreeing to how you will treat others is critical, especially when it involves in-laws who didn't grow up dealing with your family's communication style. Commit to listening to others, give each person an equal opportunity to speak, and avoid personal attacks.


In looking at solutions to conflict, reaching an agreement in which all parties get everything they want is unrealistic. A more consensus-oriented question is whether everyone can live with the agreement. Moreover, recognize that conflicts in a family are seldom resolved. Rather, they are "managed" through ongoing communication.

While it can be frustrating to engage in a continuing process of conflict management, recall the many benefits of a family business. The flexibility, the chance to work with your children, and the opportunity to transfer values and a legacy may be well worth working through the occasional conflicts.

EDITOR'S NOTE: Lance Woodbury writes family business columns for both DTN and our sister publication, "The Progressive Farmer." He is a Garden City, Kansas, author, consultant and professional mediator with more than 20 years of experience specializing in agriculture and closely-held businesses. Hear him in person Dec. 6 at the DTN University course in Chicago www.dtnagsummit.com. Email ideas for this column to Lance@agprogress.com


DTN Retail Fertilizer Trends

Tue. Nov 24, 2015 3:47 PM

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- As has been the case in recent months, fertilizer prices continue to slide lower slowly, according to retailers tracked by DTN for the third week of November 2015. Meanwhile, farmers are becoming more efficient at squeezing more bushels out of the fertilizer they apply, experts say.

All of eight major fertilizers slipped lower compared to a month earlier but none were down any significant amount. DAP averaged $545/ton, MAP $559/ton, potash $424/ton, urea $403/ton, 10-34-0 $579/ton, anhydrous $629/ton, UAN28 $287/ton and $332/ton.

On a price per pound of nitrogen basis, urea averaged $0.44/lb.N, anhydrous $0.38/lb.N, UAN28 $0.51/lb.N and UAN32 $0.52/lb.N.

Last week we reported the challenges those in the fertilizer industry faced with changing regulatory issues. Retailers face major changes with the storage and handling of anhydrous while all in the industry have an obstacle to overcome with the Des Moines Water Works suing three rural counties upstream from Iowa's capital city.

Despite this lawsuit, there are signs farmers are becoming more efficient at growing crops with fewer inputs. In a presentation at the recent Fertilizer Outlook and Technology Conference in Jacksonville, Florida, Harry Vroomen, vice-president of economic service for The Fertilizer Institute, highlighted some of this data.

Fertilizer typically boosts crop yields 40% to 60%, according to research. Vroomen said U.S. corn production increased 114% from 1980 to 2014. But during that same time nutrient use only increased 4.5%.

"This would be a 105% increase in partial fertilizer efficiency," Vroomen said.

Vroomen also broke down the fertilizer use by pounds of nutrient per bushel of corn produced.

In 1980, producers used an average of 1.58 pounds of nitrogen per bushel of corn, 0.0727 pounds of phosphorus and 0.882 pounds of potash, for a total NPK application of 3.188 pounds per bushel. In 2014 this same bushel only required 1.556 pounds of total NPK with 0.890 pounds of nitrogen, 0.326 pounds of phosphorus and 0.3440 pounds of potash. This meant 44% less nitrogen, 55% less phosphorus and 61% less potash produced with NPK total down 51%.

This data does raise some interesting questions in terms of crop production, he said.

How much lower could fertilizer input numbers go and still maintain yields? Or is it more likely that these figures will level-off or possibility even rise in the near-to-mid future? Some research shows we may have reached a turning point on nutrient use trends for P and/or K, he said.

"How will the world, and the U.S. in particular, increase food production by 70% [because of rising world population] by 2050 and how might this impact future U.S. nutrient demand," he asked. "These questions will have to be answered in the coming years."

With retail fertilizer moving lower in recent months, only one fertilizer remains more expensive compared to a year earlier. 10-34-0 is 3% higher than last year.

The remaining seven nutrients are now lower compared to retail prices from a year ago. DAP averages 5% lower, MAP 6% less expensive while UAN32 is 9% lower and both anhydrous and UAN28 are 11% less expensive. Potash is 12% lower while urea is 18% less expensive versus a year ago.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to November 2008 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DTN's average of retail fertilizer prices from a month earlier ($ per ton):

Nov 17-21 2014 576 595 480 493
Dec 15-19 2014 565 592 483 461
Jan 12-16 2015 566 594 486 465
Feb 9-13 2015 569 597 488 473
Mar 9-13 2015 570 597 489 471
Apr 6-Apr 10 2015 570 598 491 461
May 4-8 2015 570 598 491 457
June 1-5 2015 570 598 491 461
June 29-July 3 2015 570 596 490 469
July 27-31 2015 569 594 487 469
Aug 24-28 2015 567 586 476 447
Sept 21-25 2015 562 575 454 428
Oct 19-23 2015 547 562 435 413
Nov 16-20 2015 545 559 424 403
Date Range 10-34-0 ANHYD UAN28 UAN32
Nov 17-21 2014 560 709 322 366
Dec 15-19 2014 572 705 322 362
Jan 12-16 2015 582 710 325 364
Feb 9-13 2015 589 707 330 370
Mar 9-13 2015 626 706 331 371
Apr 6-Apr 10 2015 648 709 333 370
May 4-8 2015 653 711 331 371
June 1-5 2015 650 710 331 371
June 29-July 3 2015 642 705 330 369
July 27-31 2015 636 689 324 354
Aug 24-28 2015 609 667 309 350
Sept 21-25 2015 589 646 297 343
Oct 19-23 2015 582 637 291 334
Nov 16-20 2015 579 629 287 332

Russ Quinn can be reached at russ.quinn@dtn.com

Follow him on Twitter @RussQuinnDTN


CFTC Proposes Automated Trading Rule

Tue. Nov 24, 2015 12:05 PM

By Katie Micik
DTN Markets Editor

OMAHA (DTN) -- The Commodity Futures Trading Commission is proposing a new rule to bring firms that specialize in algorithmic trading, which are responsible for an estimated 35% of futures trade, under its regulatory umbrella.

The new rule would require about 100 firms at the most to meet a three-part test to register as floor traders with the CFTC. It would establish requirements for risk controls and compliance, not only at the firm level, but at the exchanges and clearinghouses that handle their business.

It's a layered approach to regulation that follows the lifecycle of an order, and CFTC said that approach was designed to prevent market disruption caused by an algorithmic trading dysfunction, such as the "flash crash" in the stock market in 2010.

CFTC worked with the Securities Exchange Commission after the flash crash to establish some controls at the clearing level, but CFTC Chairman Timothy Massad said the commission began working on the proposed rule several years ago in hopes of addressing the evolving concerns about algorithmic trade, including high-frequency trading, in commodity markets.

"It focuses on minimizing the potential for disruptions and other operational problems that may arise from the automation of order origination, transmission or execution," Massad said in a statement. "They may come about due to malfunctioning algorithms, inadequate testing of algorithms, errors and similar problems. No set of rules can prevent all such problems."

But Massad said a number of the proposals in the rule reflect industry best practices, and rather than apply prescriptive controls, the rule grants flexibility in setting appropriate risk controls.

A firm must register as an "automated trading person" if it's a proprietary trader that engages in algorithmic trading on a regulated exchange via direct electronic access.

Once those firms are registered, they'll have to establish pre-trade risk controls, such as maximum order size and frequency. They'll have to put in place a cancellation system and complete an annual compliance report. CFTC will require them to join industry association groups, such as the National Futures Association, which often enforce industry best practices and can implement newer or stricter rules more quickly than regulators.

The futures exchanges would also have to develop risk controls and enhanced compliance procedures for these firms. They will have to increase their transparency about market maker and trade incentive programs, including what kinds of monetary benefits they give to the types of firms that help provide liquidity.

Clearinghouses would have to provide a platform for algorithmic traders to test new algorithms and would create tools that prevent self-trading, which is defined as matching of orders for accounts with common beneficial ownership or under common control. In the few cases where self-trading would be allowed, the clearinghouses would have to release annual statistics.

Perhaps the most controversial portion of the rule requires algorithmic trading firms to make their source code available to the CFTC and the Justice Department upon request. Currently, the federal government must use a subpoena to access a company's intellectual property, such as source code.

"I am unaware of any other industry where the federal government has such easy access to a firm's intellectual property and future business strategies," CFTC Commissioner Chris Giancarlo said in a statement.

In the days leading up to the proposed rule's release, livestock market participants have wondered aloud if this rule would help reign in some of the wild volatility that's roiled the market since Labor Day.

DTN Livestock Analyst John Harrington said it's tempting to blame the volatility on the close of pit trading, but he also thinks that's an overly simplistic answer.

"After all, automatic trading and high-frequency trading were probably dominant before we finished pit trading. It's very tempting to think along these lines: As small as the pit was, have we lost an anchor that we used to have?"

Harrington thinks the proposed rule sounds like a step in the right direction, he said, and hopes pre-trade risk controls on order quantity and frequency can help reign in some of the volatility.

Once the rule is published in the Federal Register, a 90-day comment period will begin. The 19-page rule also includes a list of more than 150 questions for public comment.

Katie Micik can be reached at katie.micik@dtn.com

Follow Katie Micik on Twitter @KatieMDTN


Weighing Chlorpyrifos Ban

Tue. Nov 24, 2015 7:47 AM

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- A series of court decisions and actions by the U.S. Environmental Protection Agency threatens to remove a popular Dow AgroSciences insecticide.

EPA recently proposed a ban of chlorpyrifos -- the active ingredient in Dow AgroScience's Lorsban, an organophosphate insecticide used for combating pests such as soybean aphids, spider mites and corn rootworm.

Entomologists contacted by DTN said it could take years before chlorpyrifos products are removed from the market. However, there is some concern that removing chlorpyrifos from the market could at some point complicate the battle against insects, especially when growers are being encouraged to rotate chemistry to guard against possible resistance.

For right now, however, when it comes to combating insects in soybeans, there are options.

According to EPA, corn accounts for chlorpyrifos' largest agriculture market for total pounds used because overall corn acres are much larger than soybeans. However, in recent years use of chlorpyrifos has expanded in soybeans and has been on the decline in corn.

According to Dow AgroScience's website chlorpyrifos use in soybeans expanded from about 200,000 acres in 2004 to some 8 million acres in 2008. Dow estimated chlorpyrifos was applied to about 11% of soybean acres planted in 2008.

Since 2000, Dow estimates soybean aphid infestations have caused economic yield losses of up to 45% in untreated fields. Soybean aphids are now present in 20 states including the Great Plains and into the Northeast and South, according to Dow.

The USDA estimates corn rootworm leads to more than $1 billion in lost revenue each year. That includes $800 million in yield loss and about $200 million in treatment costs.

Erin Hodgson, associate professor and extension entomologist at Iowa State University, said during a recent podcast there are many other options to combating insects in soybeans, making the potential loss of chlorpyrifos easier for farmers to overcome.

Christian H. Krupke, professor of entomology at Purdue University, said a look at Purdue's 2015 insecticide recommendations shows there are plenty of options.

"Chlorpyrifos, while still in use, does not represent a large portion of the corn and soybean insecticide market," he said. "While it was once thought to be indispensable, it has been largely replaced by a variety of pyrethroids for foliar sprays in corn and soybeans and by Bt for rootworm and some caterpillars in corn.

"Chlorpyrifos is one of the few remaining available compounds in the organophosphorus class of insecticides, which were at one time widely used and effective, but now have been replaced by other options both because of problems with resistance and their relatively high toxicity to mammals. I don't anticipate a significant impact of the phase-out in these crops."


Matthew E. O'Neal, Iowa State University entomologist, however, said when it comes to soybeans there should be some concern about what a chlorpyrifos ban could mean in years to come.

"My concern is if we get into a situation where we have a resistance to the other classes of insecticides used for aphids we're going to need an alternative," he said. "Chlorpyrifos is commonly used by farmers for aphids and other pests in soybeans. If one class of insecticide replaces its uses in soybeans, this could increase the likelihood of resistance occurring. In four or five years that's when you'd start to notice there are is no chlorpyrifos and you're looking for something that works."

Dow AgroSciences suffered a separate blow last week when the EPA banned sulfoxaflor (Transform WG), also used to combat soybean aphids.

In June 2000 EPA eliminated all household uses except in ant and roach baits. According to EPA's website termiticide uses were phased out as well. EPA also banned the use of chlorpyrifos products on tomatoes. In 2002, EPA restricted the use of chlorpyrifos on citrus and tree nuts, and other crops.

In 2012 EPA limited the use of chlorpyrifos by lowering pesticide application rates and creating no-spray buffer zones around public spaces, including recreational areas and homes.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @ToddNeeleyDTN


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