Brazil Land Law May Retract

Thu. May 26, 2016 3:26 PM


By Alastair Stewart
DTN South America Correspondent

SAO PAULO, Brazil (DTN) -- The new government in Brazil will review a 2010 decision to bar foreigners from buying large tracts of farm land, a local press report said Wednesday.

According to O Globo, a local daily, advisers close to Interim President Michel Temer want to overturn the six-year-old ruling that limits land purchases by foreigners to small plots.

Back in 2010, the leftist government of President Dilma Rousseff took the step amid concerns that foreigners, more specifically the Chinese, were looking to buy up large swathes of grain land.

However, the Temer administration doesn't see any threat to sovereignty. The ban is "totally out of proportion" to the threat, a source close to the new president told the newspaper.

Temer took over the presidency at the start of May, while impeachment proceedings against Rousseff are heard in the Senate. Temer has wasted no time in pushing a more market-friendly agenda. Commentators think it unlikely that Rousseff will return.

For a long period up until 2010, foreigners were allowed to buy land freely. However, alarmed by Chinese purchases in Africa, the attorney general created tighter restrictions by reinterpreting a 1971 law.

According to O Globo, the government sees no legal impediment to going back to larger land sales as part of a wider effort to attract foreign investment. Officials see this as a way to help pull Brazil out of one of the deepest recessions in its history.

However, the land plan has a significant opponent in the shape of Blairo Maggi, the new agriculture minister, who wants to maintain restrictions on the purchase of agricultural land for grain use.

The presidential palace did not respond to a request for comment for this article.

The Brazilian land market is very quiet at the moment, not helped by the downturn in the economy, restricted credit and lower grain prices.

Alastair Stewart can be reached at astewartbrazil@gmail.com

(ES/CZ)

By the Numbers

Thu. May 26, 2016 2:23 PM


By Danny Klinefelter
DTN Farm Business Adviser

Counterparty risk has become an increasing concern for lenders in assessing a borrower's risk profile. Counterparty risk is defined as the risk that a party to a transaction will fail to fulfill its obligations.

Producer production and marketing contracts are an obvious example, but the concept applies to a much broader range of formal relationships. MF Global, VeraSun and Eastern Livestock have been well publicized examples, but there have also been concerns about the financial viability of several hog and poultry integrators who represent repayment risks to their contract growers. When fertilizer markets collapsed in 2008, many producers rightly worried about the security of their deposits at local retailers.

Producers can also present risks if their contracts contain quality requirements that they may fail to meet thus negating the contract or resulting in significant price discounts.

Other examples involve lenders themselves. If the size of a borrower's loan requires the involvement of participating lenders, consider their track record of commitment. Bankers in remote cities don't know you personally and may not share the relationship you have with a local lender or its alliance with production agriculture. Financial problems in a participating institution, their acquisition by another lender not committed to agriculture, or their unwillingness to work with a borrower who gets into financial trouble or whose loan requires restructuring, can also represent a major risk during an economic downturn. If the lead lender is unable to find a replacement for a participating lender who pulls out of the arrangement, it can create a house of cards where the entire borrowing relationship crumbles.

Another case which affects many products is the listed derivative markets on the major exchanges. The exchange clearinghouse is a counterparty to every sale or purchase of options or futures contracts. That eliminates the possibility that a buyer or seller won't make good on the transaction. The clearinghouse, in turn, protects itself by requiring market participants to meet margin requirements. However, there is no such protection in the unlisted derivatives market where forwards and swaps are arranged. The prime example was the collapse of credit defaults swaps during the 2008 financial crisis.

There are also the cases of counterparties to the counterparty. If the primary contracting entity is primarily dependent on a single buyer or supplier, the failure or decision by the primary buyer or supplier to go elsewhere can also lead to financial problems. Some of these firms have also been victims of foreign buyers or suppliers being hit by changes in exchange rates, the imposition of tariffs or simply economic or political problems in their own country.

In all instances it is imperative that producers and their lenders are aware of the potential risks that each of these relationships represent. Producers need to know the financial condition of their direct counterparty as well as the domestic and global economic and geopolitical issues that may affect the relationship.

Too many producers have become victims by assuming that just because the relationship has worked in the past, it will continue to work. It is always good business to develop personal relationships, open communication and have a backup plan. The effects of increases in regulations, regulatory compliance measures and changing consumers' tastes and preferences also need to be kept in mind. Just look at the impact that retailers and processors shifting to cage-free suppliers is having on egg producers.

**

EDITOR'S NOTE: Danny Klinefelter is an agricultural finance professor and economist with Texas AgriLIFE Extension and Texas A&M University. He also is the founder of the mid-career Texas A&M management course for executive farmers called TEPAP. Access his recent DTN columns at https://www.dtnpf.com/….

(MT\SK\CZ)

Dr. Dan Talks Agronomy

Thu. May 26, 2016 8:26 AM


By Daniel Davidson
DTN Contributing Agronomist

Generally speaking, if planting is delayed in May because of rains, you don't have to switch out to shorter maturities of either corn or soybean varieties. Finding seed of shorter maturity varieties for your location could be a challenge and both corn and soybeans naturally shorten their maturity requirements when planted a few weeks later than expected.

However, when we move into June all bets are off and it may be time to consider switching from corn to soybeans, depending on which has the better yield and profit potential. There are agronomic considerations that should be part of the decision to switch crops.

Planting delays are always an inconvenience involving some financial loss and require a hard decision -- do I stay with the same crop or do I switch out crops? Factors going into that decision include relative yield expectations, anticipated crop prices, meeting production contracts, application of inputs, seed availability and agronomic considerations such as running into hotter and drier weather during pollination.

Chris Hurt, Purdue agricultural economist, believes the rally in soybean prices the last three months, concurrent with the inability to plant corn, may offer the financial incentive to shift to more soybeans now. Soybean prices have been moving steadily higher since January and more money can be made off soybeans than corn. This may be an opportunity.

John Bailey, with JCB Ag Research in Effingham, Illinois, stated that in southern Illinois's light timber soils the decision to switch to soybeans needs to be made by May 20. "Planting corn in late May and into June will put corn's pollination into a hot and dry period," Bailey said. "Soybeans will fare better for us."

Of course, if you laid down a corn nitrogen and herbicide program already it probably behooves you to stay with corn. Corn roots will capture more of the soil nitrate than soybean roots will. That gives the best chance of profit from the nitrogen investment and keeps the nutrient out of surface waters. If you laid down a preplant herbicide program, it probably will hurt soybean seed germination. That's enough reason to avoid switching crops.

Shawn Conley, soybean extension specialist offered three tips when considering the switch from corn to soybeans.

Check the herbicide label. "Several burndown or early pre-plant programs have labels for both crops. However, tankmix partners or rates may differ between the two. Make sure you verify rates, timings and plant-back restrictions before you make the switch."

Consider residual nitrogen available after heavy spring rainfall. Conley said that biologically, it's impossible to know how much is too much residual nitrogen to decide whether to stay with corn or switch. "Economically that number is a moving target given yield penalty, corn drying costs, etc. Over the last four weeks (into late May) the amount of nitrogen readily available to the late-planted corn crop, or in this case soybean crop, has declined, though some nitrogen is still readily available in the soil profile."

He noted that since excess nitrogen can lead to a more lush soybean crop, growers should consider whether diseases such as white mold are an issue in the field, and select varieties, seeding rates, and timing of disease scouting accordingly.

Is an inoculant required? "Should I use an inoculant (on soybeans) even when excess nitrogen is present? The simple answer is yes," Conley said. Studies show excess available nitrogen will inhibit N fixation later on. Increasing nodulation by inoculating seed can overcome that.

Read Conley's full report here: http://thesoyreport.blogspot.com/….

Growers were best served by keeping their corn cropping plan and varieties unchanged in May even though yields may fall slightly the later in May planting occurs. However, in June moving to soybeans may make more sense if yield and revenue potential is higher and there are no herbicide limitations.

(GH/CZ/SK)

Kub's Den

Wed. May 25, 2016 2:32 PM


By Elaine Kub
DTN Contributing Analyst

Satiated by a barbecue sandwich and some German potato salad at my neighbor's recent high-school graduation party, I admired the decorations placed on folding tables throughout the 4-H event hall. There were mason jars filled with lilac blooms, framed senior photos, snapshots of trophy-winning steers and sewing projects, and a hand-painted "Advice Box" inviting all the guests to write down and drop into the box a piece of advice for the graduate as she approaches college and adulthood.

Golly, do I love being asked for advice! It's the best part of growing older; there is an ever-increasing population of people who think you've got it all figured out and who come to you for wisdom and guidance. My neighbor's graduation advice box reminded me of an email I received from a young man out of the blue a few months ago.

"I recently purchased a Kindle version of your book and am slowly learning the grain markets," he wrote, and then he followed with some very kind words about the book itself (which, of course, I'm much too modest to reprint here). Then his email continued, "What in your opinion is the best way to begin trading the grain markets, strategy wise? Do you use fundamental or technical analysis, maybe a combination of both perhaps? I have about $10,000 capital to begin trading with. Any advice you would be willing to share would be forever appreciated and in your debt.

"Best Regards,

"Justin

"Sent from my iPhone"

Well, I'm pretty sure we're all thinking of the same one-word piece of advice for this young man who wants to take his $10,000 and start trading grain futures: Don't.

Farmers and physical grain traders spend entire careers trying to minimize their risk exposure to these volatile markets, with prices as wild and as unpredictable as the weather itself. But there will always be some foolhardy souls who want the chance to participate in a 28% price rise within 11 weeks (as soybeans have done), or even the chance to make 15 cents per bushel with a day-trading guess. Putting up $2,300 in margin money for one long soybean contract on March 1 would have yielded $9,600 by now, if the speculator had guessed the correct direction of the market. I'll admit it -- in my younger years, I myself dabbled in some short-term speculation and even some day trading. I would make gains of a few hundred dollars on soybean-to-corn spread trades, or even a few thousand dollars on lucky crude oil trades; but I also remember losing $6,000 one day on a copper bet when the Federal Reserve tweaked its language and the dollar suddenly collapsed. Whoopsie daisy.

Note that I said, "When I was younger." As in, when I had even less money than I do now and was therefore even more desperate to forge any sort of profit. That's a recognized economic phenomenon. Using Kahneman's and Tversky's Prospect Theory, researchers can show that poorer people (people with less to lose) exhibit more risk-seeking behavior. Compared to people with a little more economic security, they have a different frame of reference about how good gains will feel and how bad losses will feel. A young person with not much money and no other employment prospects may feel that the risk of losing thousands of dollars in the corn market is worth it, while someone with hundreds of thousands of dollars to easily deploy in comfortable investment strategies may take a look at corn's volatility and think, "Nah." Wealth, youth, gambling, extreme sports, farming ... it's all sort of interrelated.

That's why my email pal Justin likely won't accept, "Don't do it," as reasonable advice, and he's not alone. The U.N. estimates that global unemployment rates for youth (24 years old and younger) are three times higher than adult unemployment rates. Yet they have the same dreams as anyone, and they want money to pursue those dreams. The Financial Times' coverage of the surging speculative trading volume on Chinese commodity futures exchanges has shown that many of those new speculative traders are otherwise unemployed 20-something men, "looking forward to another week of fevered risk-taking in China's hottest new casino."

Good advice to a heroin addict might be: "Always use a clean needle." In that same spirit, I put together some advice to Justin, the email writer and aspiring speculative grain futures trader.

* Technical trading signals don't always work, but it's nevertheless a good idea to look at a historical chart to see if a market will soon be bumping up against previous highs or lows that might meet psychological resistance.

* It's also a very good idea to KEEP YOUR EYE ON WHAT THE U.S. DOLLAR IS DOING FROM DAY TO DAY.

* Maybe start with some long options (i.e. buy either cheap calls or cheap puts, depending on which direction you think a market will go.) That will get you familiar with the order-placing process and the speed of the markets.

* Once you're comfortable with that, then with your $10,000, and a good fundamental hunch about a market's trend or direction, it would not be unreasonable to go long or short in a grain market using futures contracts themselves (which will earn you profit or loss faster than options), but REMEMBER TO BACK UP EACH ORDER WITH STOP ORDERS, and to remove those stop orders once you've closed each position.

* Once you really feel like you know the markets well, then in my opinion, spread trading (either calendar spread trading or intermarket spread trading) has the best reward-to-risk ratio among commodity trading strategies, but it can take months or years to research and understand a market well enough to spark those ideas.

* Do careful research on the firm with which you open a brokerage account. Human brokers can be immensely helpful for discussing trading ideas, or alternatively, they can tempt you into crazy ideas that just burn through commission fees.

* Keep good records to dispassionately assess your successes and failures, and change your strategies accordingly.

If Justin ever took my advice, he didn't write back to tell me about it. I do know that I also tried saying some of this to my 20-something cousin, who day trades Forex contracts out of his parents' basement, and he shrugged it off and continues to free-wheel along without diligent stop orders. But he is still free-wheeling along, so I guess he's not broke, and that's something of an achievement.

To my readers who are farmers, if you're like me and haven't sold much 2016 grain yet, well let's not get too sanctimonious just yet. Farmers can be grain speculators, too. We can do it directly through a futures account if we feel confident the market doesn't yet realize something about its supply-and-demand fundamentals, and that we can therefore make some money betting on a future price direction.

But we can also be unintentional speculators, exposed to all the same monetary risk, whenever we have unhedged bushels. If you've planted 100,000 bushels worth of corn but have zero forward contracts signed and zero futures or options hedges sold, then that makes you 100,000 bushels long in December 2016 corn price exposure. Who's crazier? Justin with his $10,000? Or you?

Elaine Kub is the author of "Mastering the Grain Markets: How Profits Are Really Made" and can be reached at elaine@masteringthegrainmarkets.com or on Twitter @elainekub.

Trading commodities involves substantial risk of loss. Past performance is not indicative of future results. Opinions are subject to change at any time. THIS ANALYSIS IS NOT A SOLICITATION OR RECOMMENDATION TO BUY OR SELL COMMODITY FUTURES OR COMMODITY OPTIONS.

(CZ/BAS)

Bayer-Monsanto Maybe

Wed. May 25, 2016 2:18 PM


By Pam Smith
DTN Progressive Farmer Crops Technology Editor

DECATUR, Illinois (DTN) -- Monsanto may have rejected the $62 billion deal offered by Bayer AG on Tuesday, but the St. Louis based seed and biotech company also admitted it wouldn't rule out further discussion.

Bayer has since replied that it found Monsanto's response encouraging. However, the pressure is now on the German pharmaceutical and chemical company to increase an offer that already has some Bayer investors fearing the transaction would strain the balance sheet and put too much emphasis on agriculture at the expense of health care. Monsanto said in a prepared statement that the company is "open to continued and constructive conversations to assess whether a transaction in the best interest of Monsanto shareowners can be achieved."

"We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer's business," said Hugh Grant, Monsanto Chairman and CEO. "However, the current proposal significantly undervalues our company and also does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks related to the acquisition."

Bayer reiterated that its $122 per share all-cash proposal provides full and certain value for Monsanto shareholders. The bid valued Monsanto at 37% over its closing share price of $89.03 on May 9, the day before Bayer made a written proposal to the company. Monsanto's stock closed Tuesday at $111.42 a share.

"We are pleased that Monsanto's board shares our belief in the substantial benefits an integrated strategy could provide to growers and broader society," said Werner Baumann, CEO of Bayer AG, in a prepared statement following the news Monsanto had declined. "We are confident that we can address any potential financing or regulatory matters related to the transaction. Bayer remains committed to working together to complete this mutually compelling transaction."

Monsanto made several failed attempts to bring Syngenta into a relationship last year. A $2 billion breakup fee eventually become part of those negotiations and that may be one of the prenuptial assurances Monsanto is looking for in further offers.

The run at Syngenta was the first of several indications that the world's largest seed and chemical players were consolidating again. Since then, Dow Chemical and DuPont have agreed to a merger that would form a combined company valued at roughly $103 billion. Chinese state-owned China National Chemical Corp. and Syngenta agreed to a cash purchase price of $43 billion earlier this year. All of these transactions are still pending approval, and antitrust concerns are part of the discussions.

Bayer went on the offense in a media conference on Monday discussing how they see the marriage working and touting the benefits of the union with Monsanto. Under the proposed transaction, the plan was to leave the global Seeds & Traits and North American commercial headquarters in St. Louis, for example.

Liam Condon, head of Bayer's crop science division, acknowledged during the media call that the potential tie-up could possibly require some divestitures but said it was too early to speculate on what those might be. The two companies overlap mostly in cotton and vegetables on the seed side. How Bayer's LibertyLink trait technology and glufosinate herbicide business would fit with Monsanto's Roundup Ready trait system and new dicamba herbicide traits is another question.

Both Monsanto and Bayer communication officials told DTN the companies would have no further comments beyond the press releases at this time.

For more information how Bayer sees the proposal shaping up, go to: www.advancingtogether.com

Pamela Smith can be reached at Pamela.smith@dtn.com

Follow her on Twitter @PamSmithDTN

(CC/BAS)

WOTUS Expansion Moves

Wed. May 25, 2016 2:13 PM


By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- The waters of the United States rule may be halted nationally by a federal court but a district of the U.S. Army Corps of Engineers in California already is and has been enforcing aspects of the rule, according to testimony given to a U.S. Senate committee Tuesday.

A California scientist claims in written testimony to the Senate Committee on Environment and Public Works Subcommittee on Fisheries, Water and Wildlife, that Corps officials in the Sacramento district have been inconsistent in the way they make Clean Water Act determinations and have required permits for agriculture activities that are exempt.

Jody Gallaway, a California Farm Bureau member and a regulatory biologist who works with the Corps in the Sacramento district, said she expects reprisal from the Corps for coming forward about problems faced by her clients when it comes to agency interpretations of farming exemptions.

Gallaway stated that the Clean Water Act is "being abused by regulators to thwart, interrupt and challenge" existing farming operations.

"It was a difficult decision for me to provide testimony to this committee," she stated in her written testimony. "I hesitated to put my name, company, and 12 employees at risk because our work depends on maintaining a professional relationship with California-based Corps staff in the Sacramento, Redding and San Francisco offices."

Throughout the hearing Gallaway sat next to Don Parrish, senior director of regulatory relations for the American Farm Bureau Federation, but did not testify live before the committee.

The change in the Clean Water Act defining waters of the U.S. by EPA and the Corps has been tied up because of federal court battles. In recent months the U.S. Court of Appeals for the Sixth Circuit in Cincinnati ruled it has jurisdiction to hear numerous legal challenges to the rule. Agriculture and other industry interest groups are concerned the rule expands federal jurisdiction on private land.

Gallaway stated Corps officials in Sacramento began "jumping the gun" in August 2015 in implementing the rule even before it was finalized.

"I saw it when the Corps started automatically regulating additional features not historically hydrologically connected," Gallaway stated in the written testimony. Corps regulators expanded jurisdiction to features that could not be seen on the ground with the human eye. Gallaway's clients, who were in various planning stages of agricultural development and infrastructure projects became concerned, and frustrated.

When contacted by DTN for comment Tyler Stalker, deputy chief of public affairs for the Corps in Sacramento offered the following:

"The clean water rule has been stayed and we are interpreting the rules as defined prior to the clean water rule," he said.

William Buzbee, professor of law at Georgetown University Law Center, told the committee claims of regulatory overreach and expansion are "legally and factually erroneous" when it comes to the new rule.

"The clean water rule and connectivity report are directly responsive to the pleas and rulings of a majority of U.S. Supreme Court justices," he said. "Far from being illegal, they are directly responsive to Supreme Court law and well-grounded in peer-reviewed science and the long enduring Clean Water Act."

Farm groups have lamented EPA's new attempts to regulate land features using satellite imagery, as a possible violation of due process.

"No majority of the Supreme Court has ever so held, and the science contradicts this view," Buzbee said. "After all, much of the United States is often dry if not suffering from drought; when waters do flow, those channeling and connecting geographic features are of critical importance and require protection against pollutant discharges that will degrade precious and scarce water."

AG EXEMPTIONS

Parrish told the committee the Corps is paying no heed to agriculture exemptions.

When asked by Sen. James Inhofe, R-Okla., about whether the federal agencies are requiring farmers to obtain permits to do work involving otherwise-exempt agriculture activities Parrish responded, "Yes, Mr. Chairman, they are."

The concern, Parrish said, is what is happening in California will be reality for farmers across the country. The Sacramento district is regulating plowing, for example, which also is exempt.

"In the Corps' Sacramento district, any plowing no matter how shallow, in a WOTUS such as a vernal pool or ephemeral drain requires a permit," Parrish said. "The Corps issues threatening letters if farmers plow a fire break, change from alfalfa hay farming to cattle grazing and back to alfalfa hay farming or when the agency 'thinks' the farmer was plowing too deep or changing land use."

Damien Schiff, an attorney with the Pacific Legal Foundation pointed to the case of Fort Bridger, Wyoming, landowner Andy Johnson as an example of how the Corps and EPA may no longer follow the law with agriculture exemptions. Johnson had faced large penalties although he built a stock pond which is exempt from the Clean Water Act. Under a settlement, Johnson will not pay fines and won't need a permit.

Buzbee said the only activities regulated are those that lead to discharges to regulated waters, meaning "neither ordinary farming activities nor basic uses of lands, wetlands, and other covered waters are prohibited."

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

Follow him on Twitter @toddneeleyDTN

(CC\SK)

View From the Cab

Tue. May 24, 2016 1:03 PM


By Richard Oswald
DTN Special Correspondent

LANGDON, Mo. (DTN) -- "Since Thursday it's been go, go, go." That's the way View From the Cab farmer Chase Brown described farming at his place outside Decatur, Illinois.

Chase told DTN late Sunday that corn planting officially ended on Monday of the same week soybean planting officially began, once weather offered a reprieve from rainfall. "We finally got started planting beans on Thursday," he said.

Chase farms with his father David and Uncle Joe. In addition to wheat, corn, and commodity soybeans, they raise seed soybeans for Beck's Seeds. "We've been focusing on getting seed beans in. This year we're raising dicamba beans. Currently we'll just use Roundup (for weed control) unless the dicamba gets (regulatory) approval. In the past if the seed company didn't take the beans (because of low germination/quality) we'd take them to the local elevators, but the local elevators don't want anything to do with them. The seed company says they'll take them," he said.

Chase also began the haying season on 25 acres of alfalfa, followed the next day by 10 acres of orchard grass. "We've been putting in some long hours. We started mowing on Wednesday and baling on Friday. We're having incredible haying weather right now. With low humidity, the hay just looks beautiful," he said. That helps protect hay quality and saves some money to boot. Chase told DTN his baler is equipped to apply a preservative, but using that costs $10 to $25 per ton. "You don't get paid to use it but you have to to get your hay put up. I didn't need to turn it on." But that might change with the weather. "It looks like a pretty wet week. We aren't going to mow any more hay."

The "little" 8-row planter is being used along with the Browns' 24-row machine to get as many soybeans planted in as short a time as possible. That complicates things. "Problem is the tractor pulling the 8-row is kind of my favorite haying tractor. It's a 140-horsepower utility model, front-wheel assist, that has the wheels set in so it turns shorter. We've been hooking and unhooking," Chase explained.

Haying offers many challenges. "The missing link in our hay operation is storage. If we had a dedicated shed it would be easier. We love everything about the big square bales except you can't leave them outside." The solution is selling hay direct from the field, netwrapped big round bales that shed water, or loading square bales on hay racks in case of rain. "We like to have our hay mobile so we can get it inside."

The Browns' seed wheat has been sprayed with a fungicide to protect it from head scab. The crop is developing nicely. How about soybean planting? "I haven't heard of anyone being done. I would say we're about 50% done. Guys that didn't have (drainage) tile had to wait awhile. Everybody is running now. They'll go in pretty quick. We could get done with soybeans this week if the weather holds." Corn conditions? "Corn is looking better by the day. This weather is helping it snap out of the yellow. I've seen some rotary hoes out. (Loosening crusted soil for improved emergence of corn). We have some corn to replant. There are guys that are hoeing and guys that have corn to replant who planted the same day," Chase said.

Four pigs and a steer were delivered to the locker plant where they'll be processed in time for Chase and his wife Ashley to sell farm-to-consumer packaged meat. "The farmers market opens two weeks from Saturday," he said.

"Everybody wants to own land in Macon County, Illinois." That's the short explanation Chase gave for an 80-acre land sale last week netting the seller $11,000 per acre. A second farm of 225 acres was no-saled when the per-acre bid fetched a paltry $7,250. "He wanted closer to $8,000 out of it."

Chase stopped fieldwork for the day on Saturday. It couldn't be helped. "I was best man in a good friend's wedding. I gave my buddy a hard time. He works for a fertilizer plant and her folks farm. I asked him, 'Who plans a wedding in May?' But it was good to clean up and go to town," he said.

Meanwhile in Newport, Pennsylvania, Jim Hoover of Hoover Turkey Farm has an important announcement: "We're done!"

It's been wet and it's been cold. In spite of that, corn and soybean planting are finally finished. Corn has come up fairly well, soybean emergence has been slow. It's getting better. "We've had a lot of rain. It's raining here now," Jim told DTN late Sunday. "It started Friday night, about three quarters to an inch ... it certainly has made the soybean fields look better than they did. Corn is turning green. No more of that yellow stuff. That makes a guy feel pretty good," he said.

Jim does most of the corn planting. His son Craig does the spraying, and Jim's grandson Mason runs the soybean drill. "We finished the corn and brought the planter home on Thursday. Mason got done Saturday morning. Craig got everything sprayed. We're in good shape." Farming in a highly populated eastern state can be challenging. "We couldn't move the drill because the traffic was so bad. They got the drill home today," Jim said.

Jim grows wheat and triticale for seed. He likes to mow field borders and roadsides to dress things up before crop inspectors evaluate his crop. While mowing, he noticed field areas close to trees looked different. "One or two or three rows in, almost 75% of the ground that was in the shade didn't come up or if it did it was a poor stand. Once you get out of the shaded area into the sun the stand is perfect," he observed.

"We're getting ready for the hay business. For the weather we've had here it's gonna be a heavy crop." The Hoovers don't use the hay they grow. "We just do it for the landlords. Mason does it. We've gotten everyone converted over to big bales. He does a nice job of watching the moisture," Jim said.

The best markets for hay are dairies or horse people. "Both use a mixture of grass hay and alfalfa," Jim said. "We like a mixture of Timothy and brome grass. You can end up selling that for $100 (per ton) and make a little money. Alfalfa can go for $250 to $300," he explained.

Weed control in corn fields has been excellent. "I am really pleased with this new herbicide we've been using. We don't see a weed anywhere." Jim and his partners have put a high priority on grass control. "We have very little grass problem because we've been on top of it," he said, adding that the most difficult weed they face is dock. Morning glory crops up from time to time, and pigweed used to be a problem, but crop rotation and a late-summer herbicide application to maturing corn fields in early autumn has kept those in line.

After hitting a rough patch with the most recent group of turkey poults, the strongest have survived and thrived. Jim and Craig raise a total of about 130,000 turkey hens every year.

"Turkeys are doing fine. We'll have more babies here in a couple of weeks. Some will be going out and some will be coming in," he said.

Weather affects everything from livestock and crops to the people, like Jim, who grow them.

"The rain is cool. I noticed this morning when it was raining we had 51 to 52 degrees. We're still getting a lot of 40s and 50s. If we get some warmer weather these things will really take off," he said.

Richard Oswald can be reached at talk@dtn.com

(CZ/SK)

Zika Bill Nixes Spray Permits

Tue. May 24, 2016 12:50 PM

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- A federal requirement for permits to spray pesticides on water to combat mosquitos would be eliminated under legislation proposed by U.S. House of Representative lawmakers. The legislation is likely to fail, however, as the Obama administration Monday said in a statement it opposes the bill, rebranded last week as the "Zika Vector Control Act."

The bill comes as the president has criticized Congress for now passing funding to prevent more Zika cases in the U.S. Congress and the president have been battling over funding since the beginning of the year.

So House leaders repurposed the "Reducing Regulatory Burdens Act" into the Zika Vector Control Act without changing anything in the original bill. The legislation, which has bounced around Congress for years, would eliminate the federal requirements to get a permit to spray pesticides on or near water. This is something agricultural groups have wanted for years.

The Federal Insecticide, Fungicide, and Rodenticide Act requires spray applicators to obtain Clean Water Act permits to spray on water to combat mosquitos. Ag interests opposed the U.S. Environmental Protection Agency rule because of concerns about the costs to comply and that the requirement would make it difficult to address immediate mosquito concerns.

The Zika bill may come to the House floor for a vote this week. It likely is doomed to the veto pen as the Obama administration said in a statement Monday it does not support the legislation, saying it would "weaken" the Clean Water Act, and noting it was just rebranded.

"H.R. 897 would weaken environmental protections under the Clean Water Act by exempting pesticide spraying from the currently required pesticide general permit," the White House stated. "Creating a new statutory exemption to the permit is unnecessary, as it was explicitly crafted to allow immediate responses to declared pest emergencies, thereby allowing vector control methods to be applied to the possible influx of disease-carrying mosquitos."

The White House added that most mosquito-control districts, as well as federal and state agencies, already have authority to apply mosquitocides as needed to respond to the Zika virus without any additional permit.

"In rare circumstances where a mosquito control district did not seek prior coverage under the permit, emergency provisions of the permit are available that allow instant authorization to spray without the need for prior notification," the White House stated.

The White House said that "rebranding legislation that removes important Clean Water Act protections for public health and water quality is not an appropriate avenue for addressing the serious threat to the nation that the Zika virus poses."

There is a concern the Zika virus will continue to spread this summer across the United States, predominantly in pregnant women and infants.

The World Health Organization has expressed concern countries around the world are not making serious efforts to control mosquitos.

Though Democratic lawmakers have pointed to the rebranding of the legislation as a political ploy by House Republicans, supporters say the idea behind the legislation is to eliminate red tape for acquiring spray permits in order to enable health officials and applicators to more quickly respond with mosquito combating efforts.

Read the bill here: http://1.usa.gov/…

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

Follow him on Twitter @toddneeleyDTN

(CC/AG)

Sulfoxaflor Update

Tue. May 24, 2016 11:58 AM


By Emily Unglesbee
DTN Staff Reporter

ROCKVILLE, Md. (DTN) -- The EPA has issued a preliminary new label for Dow AgroScience's Transform insecticide with restrictions designed to protect pollinators.

The proposed new label, which is available for public comment through June 17, covers a handful of row crops such as wheat and barley and variety of fruits, vegetables, nuts, turfgrass and commercial ornamentals. It does not include cotton or sorghum, where growers will have to rely on Section 18 emergency use exemptions for the insecticide in 2016.

Transform was pulled from the market in 2015 after the Ninth Circuit Court of Appeals ruled it was not adequately vetted for pollinator safety. Dow AgroSciences must now supply the agency with new data on the effect of the active ingredient, sufloxaflor, on pollinators. "Work on generating that data is underway," Dow Media Relations Manager Garry Hamlin told DTN.

Until then, the EPA has included a number of restrictions on the proposed Transform label to protect pollinators such as honeybees.

"For those crops that are included and that are bee-attractive, sulfoxaflor would be prohibited before and during bloom ...," the EPA announced in a press release. "Applications are prohibited on crops grown for seed production."

The agency is also seeking public comment on two additional restrictions aimed at protecting pollinators: "One would require a buffer when there is blooming vegetation bordering the field. The second would prohibit tank mixing sulfoxaflor with other pesticides."

The new Transform label also contains spray drift preventative measures, such as speed limits, nozzle recommendations, buffer requirements and a prohibition on tank mixing sulfoxaflor.

Dow does not consider this proposed new label to be a permanent one, Hamlin said.

The company is "committed to registering sulfoxaflor for all of these previous uses," including cotton and sorghum, he said. "EPA's proposed new federal registration is a step in that direction. It reflects intended direction, not our ultimate goal."

"In the absence of federal registration, state level emergency use and special local need applications provide interim avenues for sulfoxaflor use on threatened crops," Hamlin added.

Sorghum growers in 11 states have received Section 18 emergency use exemptions for Transform, and three cotton-growing states have petitioned the EPA for these exemptions as well.

You can find and comment on the proposed Transform label here: http://1.usa.gov/…. You can find the EPA's press release on its posting here: http://1.usa.gov/….

Emily Unglesbee can be reached at emily.unglesbee@dtn.com.

Follow Emily Unglesbee on Twitter @Emily_Unglesbee.

(PS/CZ)

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