What Does a Trade Deal Promise for Soybean Exports?

Source: Hubbs, T. “What Does a Trade Deal Promise for Soybean Exports?.” farmdoc daily (9):207, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, November 4, 2019

The proposed Phase 1 trade deal with China continues to move toward a resolution.  An initial announcement of $40-50 billion a year of agricultural exports gradually morphed into a $20 billion arrangement. Subsequently, a scenario popped up from Chinese trade commentators framing increased U.S. agricultural imports as China market demands require.  Stronger soybean prices appear to have priced in much of the recent export activity and leave the question of what if any change in soybean exports may come from the new deal.

USDA projections for Chinese soybean imports in 2019-20 are at 3.12 billion bushels, up 73 million bushels over the previous marketing year estimate.  The ongoing issues with swine fever led to the Chinese hog herd estimates coming in around 40 percent below last year.  Despite the reduced herd, Chinese attempts at rapid herd expansion and alternative feed use for soybeans to meet protein demands keep soybean imports from falling.  China reported soybean imports of 301 million bushels in September, with the vast majority of those coming from Brazil.  In the run-up to this latest round of negotiations, China exempted 10 million metric tons (367.4 million bushels) of U.S. soybean imports from tariffs.  Through October 24, China’s total commitments for U.S. exports sit near 227 million bushels.  Space exists for more buying under the current tariff exemption.  The implementation of a trade deal in November appears set to change the nature of soybean exports over the next year.

 

While the prospect of expanded export totals to China appears promising, the overall increase in soybean export may not be at levels equivalent to Chinese buying.  During the 2018-19 marketing year, the U.S. shipped 489 million bushels of soybeans to China and 1.258 billion bushels to the rest of the world.  Soybean exports to the rest of the world increased 41 percent from the previous marketing year as the U.S. picked up the slack witnessed from large Chinese buying out of South America.  A reversion to higher South American exports to the rest of the world’s major importers seems assured under expanded Chinese buying of U.S. soybeans.  Projections for non-Chinese soybean imports for the world are expected to decrease around 10 million bushels to 2.318 billion bushels for the marketing year.  It seems unlikely China would walk away from the trade relationships built over the last year and a half during the trade war.  Particularly when substantial uncertainty remains about the prospects of a long-term deal.  Significant Chinese buying from non-U.S. sources should continue.

The projection for U.S. soybean exports during the marketing year is 1.775 billion bushels.  This forecast is 7 million bushels higher than last marketing year’s total exports.  Soybean accumulated exports through October 24 equaled 292 million bushels, 21 million bushels above last year’s pace.  As of October 24, 416 million bushels of soybean had been sold for export but not shipped.  The outstanding sales total sits close to 100 million bushels below last year at this time despite increased Chinese buying.  The current unshipped export sales to China totaled 167 million bushels.  In the five marketing years before the onset of the trade war, U.S. exports to China averaged 37.7 percent of China’s total imports.  If the trade deal saw a reversion to that historical average, soybean exports to China this marketing year come in at 1.18 billion bushels.  By factoring in export substitutions related to expanded South American shipments to non-Chinese nations, expansion of U.S. exports by 70 – 100 million bushels above the present 1.775 billion bushel projection seems realistic.  This scenario remains strongly dependent on production levels in the U.S. and South America and the final framework for the trade deal.

World soybean production is set for much lower totals in 2019 due to the reduction in U.S. acreage.  U.S. soybean production is projected at 3.55 billion bushels for the 2019 crop.  The present yield forecast of 46.9 bushels per acre may see a further decline with the November 8 crop production report.  The continued deterioration of the U.S. crop diminishes the potential for massive increases in soybean exports that do not impact soybean crush profitability.  Brazilian production is forecast to be 5.3 percent higher than last year as higher export demand drove an increase in acreage.  Projected harvested acreage in Brazil sits at 91.2 million acres, up from 88.7 million acres last year.  Brazil’s soybean yield in 2018-19 came in at 48.5 bushels per acre.  The yield projection for the current crop is 49.5 bushels per acre.  Dry conditions and a slow start to planting in many areas may decrease the potential for a larger yield.  Argentine soybean production is forecast at 1.947 billion bushels, down a little over four percent from last year’s estimate.  The evolving nature of Argentine politics injects considerable uncertainty into future profitability for farmers in the region.  When considering the potential for the Brazilian crop, the market share of exports remains crucial in determining soybean export potential this marketing year.

Expanded soybean exports under the proposed trade agreement look probable.  The magnitude of this expansion may not be at the levels many hoped for when accounting for changing trade flows associated with South American export potential.  A substantial production shortfall from any of the major producing nations holds the potential for major changes to trade flows over the next year.

Discussion and graphs associated with this article available here:

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Fall fertilizer considerations in 2019

Source: Emerson Nafziger, Univ. of Illinois

While this article is written for Illinois many of the concepts apply in Ohio.

The high number of prevented-planting fields in some areas, the late start to harvest, and the inability to apply P and K fertilizer as planned last fall or this past spring combine to raise a number of questions about fall application of P, K, and lime over the next few months.

Prevented-planting fields

If P and K fertilizers were applied last fall or this past spring but no crop could be planted, there’s no reason not to count all of the applied P and K as available for the 2020 crop. The same goes for any lime applied over the past 12 months. Any nitrogen (N) that was applied with MAP or DAP is likely no longer available, and shouldn’t be counted in the 2020 supply.

If the plan was to sample soil last fall or this spring to determine how much P, K, and lime to apply but that didn’t get done, these fields can be sampled now in preparation for fall or spring application. If the plan was to sample after the 2020 crop, there’s no reason to move that up to this fall; these nutrients didn’t (and won’t) go anywhere. By the same token, there’s no reason not to apply after two years based on estimated removal using the same P and K rates set to be applied a year ago. Unless a cover crop has been or will be harvested from a prevented-planting field this fall, removal will be zero.

Our most recent numbers to use for estimating P and K removal (see my Bulletin article with details) are 0.37 (.35 in Ohio) lb P2O5 and 0.24 (.20 in Ohio) lb K2O per bushel of corn and 0.75 (.79 in Ohio) lb P2O5 and 1.17 (1.14 in Ohio) lb K2O per bushel of soybean.

 

We mentioned last spring the concern about the “fallow syndrome” that’s been associated with having no crop in a field for an entire growing season. This problem, which appears as a phosphorus deficiency, has been more commonly seen in fields or parts of fields where water has stood for much of the season; it was reported in the Mississippi River bottomlands in 1994 following the flood of 1993, when water stood on parts of fields through much of the summer. If weeds or cover crops grew on prevented-planting fields for most of this summer, especially in August and September, the crop-friendly fungi (VA mycorrhizae, or VAM) that prevent this problem likely are still present, and there’s no cause for concern.

In low-lying spots where water stood into mid-summer, and in fields kept weed-free through the summer by tillage or herbicide, we can’t rule out a possible problem due to loss of VAM. There are commercial preparations of VAM that can be applied in-furrow to inoculate corn next spring. In most cases, it will be enough to make sure there’s adequate P close the seed so the crop can take it up as growth begin, after which VAM will start to regrow in the roots of the new crop. Growing a cover crop this fall will restart VAM growth this fall, and should rule out the need for any additional steps next spring.

A year without a crop is used deliberately in some dry regions to store water for the next crop, but is a novelty for most Illinois fields. So we don’t have much research to help predict what this might mean for the next crop: is “fallow” in 2019 more like soybean or more like corn in its effect on the 2020 crop? We think the answer is “neither” – that 2019 will instead be an “amnesty” year, in which any effects of the 2018 crop got canceled or at least minimized, leaving open the choice of crop in 2020. Wheat planted this fall can be expected to do well on fields where neither corn nor soybean grew in 2019, as long as we get rid of plants that can serve as a reservoir of insect-vectored diseases (see Nathan Kleczewski’s Bulletin article on this), take care not to plant too early, and provide enough P for the crop.

The extent to which weeds or cover crops grew and matured might influence how having no crop this year might affect next year’s crop. Any addition to the weed seed supply could complicate weed control going forward. Large quantities of mature (high-carbon, low nitrogen) residue produced this year may act much like corn crop residue, increasing the N requirement for a 2020 corn crop. Because weed or cover crop growth requires soil water, there may be a little less stored soil water next spring in fields where there was a lot of growth this year. But most fields that didn’t grow a crop this year are likely to have more water stored in the soil now, and should also have more mineralized N, both because less N was taken up by a crop, and because there is less residue whose breakdown ties up N. These increases may well diminish by next spring, but they still might be helpful to next year’s crop, whether that’s corn or soybean. In using the N rate calculator to set corn N rates in fields with no crop and minimal weed or cover crop growth this year, I suggest choosing soybean as the previous crop; in fact, with no removal of mineralized N from the soil by soybean this year, it might be appropriate to also set N rates for next year’s corn crop a little lower (within the MRTN range) than usual. In fields with a lot of residue present now, it might be more appropriate to select “corn” as the previous crop when using the calculator.

Fields with a crop in 2019

If neither soil sampling nor P and K application could be done as planned for the 2019 crop, the yield-based estimate of nutrient removal by this year’s crop can be added to the estimate of removal by crops grown since the last application. The urgency of the need to apply “catch-up” P and K depends on soil test levels the last time the field was sampled: if P and K levels are already high, there’s less concern about yield loss even if 2019 ends up being a “skipped” year of replacement. Yields in some fields will also not be as high in 2019 as they were in 2018, meaning less nutrient removal. But any of the immobile nutrients like P and K that were removed with harvest of any crop will need to be replaced at some point if soil test levels are to be maintained.

Other than less nutrient uptake in fields where yields are lower than expected this season, soil sampling and nutrient management can continue as usual in fields where a crop was grown this year. In the drier parts of Illinois, late-planted crops took up water (and matured or will mature) later than normal, although the total amount of water taken up is less where yields are lower. Where it’s dry enough to make it difficult to get a soil probe to the proper depth, we can expect soil samples to show more variability than usual, especially in K test levels. This is due both to variable depth of samples and to the effect of dry soils on K extractability. Samples taken from dry soils often show lower than expect soil test K levels because K cations get trapped in clay lattices. Test levels of pH and P are less affected than the K test by soil moisture before and during sampling. Dry soils are rare in the spring, and so soil test levels, especially of K, are more consistent when measured on samples taken in the spring.

Fertilizer application

Soils are currently dry enough to allow application of dry fertilizer materials over much of Illinois; the wettest part of the state is northwestern Illinois, where the crop still has to mature. Harvest started slowly in Illinois, but with the warm weather this week, it will accelerate quickly as long as it stays dry. The development of wet conditions could slow both harvest and fertilizer application that follows harvest, but soils in the drier parts of Illinois can take in an inch or two of rainfall without turning muddy or forcing much delay. Most people are anxious to start applying fertilizer after the delays and frustration in getting this done over the past year.

There has been a considerable amount of discussion about whether or not placing P fertilizer beneath the soil surface is a sound practice. The main reason for doing this is to keep the P in MAP or DAP, which is highly soluble, from dissolving and running down slopes and into streams in the event of heavy rain. How much of this might occur is affected by slope, permeability of the surface soil, how dry the soil is, how much crop residue is present, and the intensity of rainfall. Soils following soybean harvest are generally more permeable than following corn harvest, but corn leaves more residue. Tillage increases surface permeability, but also loosens soil to make it move more readily with runoff water. Drier soils can take in more water before runoff begins than can wet soils.

October and November are drier months, on average, than spring months, crops growing into the fall extract a significant amount of water from the soil thus leaving it drier, and high-intensity rainfall events are less likely in the fall. So overall, chances of getting high-loss conditions are lower in the fall than in the spring, but they aren’t zero. Surface-applied P will move into the soil under normal weather conditions, and will end up safe from direct loss (it can still move if soil runs off the field) by December. Most research has shown no yield benefit to subsurface P and K placement in the fall, and it is not clear that the added cost of subsurface placement will provide a positive return in most years and on most fields. In strip-till systems, however, where subsurface placement doesn’t add to the amount of surface soil disturbance, applying P and K beneath the strip while strip-tilling in the fall may be a cost-effective way to apply these nutrients.

Although we’ve found that the N in DAP tends to be available to the next year’s crop if DAP is applied after soils cool down to 50 degrees, applying MAP or DAP when soils are warm will allow much of the ammonium from these materials to convert to nitrate in the fall; once it’s nitrate it can move down with water into and through the soil, including to tile lines if there’s a lot of rainfall. Even if the N doesn’t move too far down in the soil in the fall before the soil freezes, it will have a head start when water begins to move through the soil in the spring. There can also be direct movement of ammonium (along with P) in surface runoff during heavy rainfall before the MAP or DAP has had a chance to dissolve and move into the soil.

While it may not be practical to hold off on applying MAP or DAP until soil temperatures fall to below 50 degrees, we should recognize that even though the amount of N in these fertilizers is relatively small, it can add appreciably to the N that moves to surface waters through drainage tile. One solution that has been suggested is to switch from using MAP/DAP as the P source to using triple-super-phosphate (TSP, 0-46-0) which contains no N. If TSP is available at about the same cost per pound of P as MAP or DAP, it would be a good source to use, especially for applications made before mid-October. The “free” N that comes with MAP or DAP is more likely to reach tile lines than the roots of next year’s corn crop if it’s applied when soils are warm in the fall. If it’s applied after soil temperatures reach 50 degrees or if it’s applied next spring, the N in MAP or DAP does contribute to the N supply for next year’s crop.

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Field Drying and Harvest Losses in Corn

Source: Peter Thomison, OSU (edited)

Late corn plantings and sporadic rain in some areas are not helping with field drying. Some growers are delaying harvest until grain moisture drops further. However, these delays increase the likelihood that stalk rots present in many fields will lead to stalk lodging problems (Fig. 1). Leaving corn to dry in the field exposes a crop to unfavorable weather conditions, as well as wildlife damage. A crop with weak plant integrity is more vulnerable to yield losses from stalk lodging and ear drop when weathering conditions occur. Additional losses may occur when ear rots reduce grain quality and can lead to significant dockage when the grain is marketed. Some ear rots produce mycotoxins, which may cause major health problems if fed to livestock.

Several years ago we conducted a study that evaluated effects of four plant populations (24,000, 30,000, 36,000, and 42,000 plants/A) and three harvest dates (early-mid Oct., Nov. and Dec.) on the agronomic performance of four hybrids differing in maturity and stalk quality. The study was conducted at three locations in NW, NE, and SW Ohio over a three-year period for a total of eight experiments. Results of this study provide some insight on yield losses and changes in grain moisture and stalk quality associated with delaying harvest. The following lists some of the major findings from this research.

Key Findings:

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Safety at the Bin

Source: Lisa Pfeifer – OSU Ag Safety and Health Education Coordinator

Approaching harvest makes for a busy time on the farm. Stop and take the time now to inspect on-farm grain handling facilities before the combine heads to the field. Assess the 10 items on our list and make repairs or improvements to deficiencies. OSU Ag Safety & Health wishes you a safe fall harvest.

Sampling for Soybean Cyst Nematode – Fall is the time!

Source:  Anne Dorrance

Harvest is well underway and once the soybeans are off the fields this provides some time to sample soil for the SCN populations.  The SCN Coalition theme for the next few years is What’s your number?  Do you know which fields have SCN and what the current population is sitting at?  If its high, then there is a second number – what is the SCN type?  Which addresses the bigger question can it reproduce on the SCN resistance source PI 88788 or Peking.  All of these numbers can impact management of this root pathogen and future losses.

The situation in Ohio:  We know that the state is now “polluted” with SCN, fortunately most of those fields are at very low levels – which is where they should be kept.

From samples received to date of a statewide survey for Ohio of 50 counties as part of the SCN Coalition sampling, here are the numbers from 378 fields.

Yield losses have been measured as high as 25% with no above ground symptoms in populations of 2,000 and higher.

Summary to date:

  • 60% of the Fields sampled in 2018 and 2019 in Ohio have detectable levels of SCN
  • 15% of these have populations at economically damaging levels – do you know your number?

If your SCN report in the past has come back as:

  1. Not detected: this is not surprising. Remember that SCN sits in pockets and can we quite variable. Continue to monitor your fields.
  2. Trace: May begin to measure some yield loss on susceptible varieties, especially on lighter soils.
  3. Low: Plant SCN resistant varieties or rotate to a non-host crop (corn or wheat).
  4. Moderate: Rotate to a non-host crop and follow with SCN resistant varieties the following year. We have planted susceptible varieties in fields with this level of SCN and have recorded 20 to 50% yield loss.
  5. High: rotate to a non-host crop for two to three years, then sample SCN to determine if populations have declined to a level where soybeans can be planted again.

SCN is picky about what it feeds and reproduces on but it does like a few weed hosts and cover crops as well as soybean. If you have SCN in your fields , it is important to also control winter annuals such as purple deadnettle, but also avoid cover crops such as several of the clover’s, cowpea and common & hairy vetch.

So it is time to sample! We recommend sampling in the fall – because in most cases this is what the population will be in the spring. With the warmer weather this year and hopefully no frozen ground should give ample time to collect and process the samples in plenty of time for spring planting. Processing of samples does cost time and money, so here are a few thoughts on how to sample or how to target your sampling to get the best information for your money.

There is still some free sampling available.  Contact your John at 740-397-0401.

Tar Spot of Corn in Ohio Again this 2019

Source:  Pierce Paul, Felipe Dalla Lana da Silva, OSU Extension

Tar Spot, a new disease of corn caused by the fungus Phyllachora maydis, was reported for the first time in Ohio at the end of the 2018 growing season. At that time, it was found mostly in counties close to the Indiana border, as the disease continued to spread from the middle of country where it was first confirmed in 2015. Over the last few weeks, there have been several new, confirmed report of Tar Spot in Ohio, this time not only in the northwestern corner of the state, but also from a few fields in central and south-central Ohio. As was the case last year, disease onset was late again this year, with the first reports coming in well after R4. However, some of the regions affected last year had more fields affected this year, with much higher levels of disease severity. It could be that Tar Spot is becoming established in some areas of the state due to the fungus overwintering in crop residue from one growing season to another. This is very consistent with the pattern observed in parts of Indiana and Illinois where the disease was first reported. We will continue to keep our eyes out for Tar Spot, as we learn more about it and develop management strategies. You can help by looking for Tar Spot as you walk fields this fall, and please send us samples.

What does it look like? Even though corn is drying down, if Tar Spot is present, you can still detect it on dry, senescent leaves almost as easily as you can on healthy leaves. So, please check your fields to see if this disease is present. “Symptoms of tar spot first appear as oval to irregular bleached to brown lesions on leaves in which raised, black spore-producing structures call stroma are formed… giving the symptomatic areas of the leaf a rough or bumpy feel to the touch… resembling pustules on leaves with rust. Lesions … may coalesce to cause large areas of blighted leaf tissue. Symptoms may also be present on leaf sheaths and husks.” As the name of the disease suggests, symptoms look like the splatter of “tar” on the leaves. In some cases, each black tar-like spot may be surrounded by a necrotic halo, forming what is referred to as “fish-eye” lesions.

What causes Tar Spot and how damaging is it? In the past, the greatest impact of this disease in terms of yield loss were observed when P. maydis-infected plants were co-infected with a second fungus called Monographella maydis. In other words, the damage tended to be much more severe when the two fungi worked together to affect the plant. So far, only the first fungus, P. maydis, has been reported in the US, but based on work done in Illinois, this pathology alone is capable of causing substantial yield reduction on highly susceptible hybrids when conditions are favorable and infections occur early.  

Where did it come from and will it survive and become established? At this point it is still unclear as to how Tar Spot got to the US in the first place and how it continues to spread. The fungus is not known to be seed-borne or infect other plant species, so corn seeds and weeds are unlikely to be the sources of inoculum. However, the fungus can survive and be moved around on fresh and dry plant materials such as leaves and husks. In addition, since spores of the fungus can be carried be wind, it could be blowing in from neighboring states/counties/fields. Although not yet confirmed through survival studies, it appears that the fungus could be overwintering in infected crop stubble between growing seasons.

What should I do if I find Tar Spot? If you see anything that fits the description of, or resembles (Picture) Tar Spot, please inform your state specialist, field specialist, or county extension educator, but most importantly, please send samples to my lab (1680 Madison Ave, Wooster, OH) for confirmation. We will also be using your samples to study the fungus in order to develop effective management strategies.

Read more about Tar Spot of Corn at:

https://cropprotectionnetwork.org/resources/articles/diseases/tar-spot-of-corn

https://www.extension.purdue.edu/extmedia/BP/BP-90-W.pdf

 

A Review of Herbicide-Tolerant Soybean Trait Options for 2020

Source: Emily Unglesbee, DTN

Farmers have a range of choices when it comes to herbicide-tolerant soybean technology in 2020 — up to seven different traits.

When selecting seed, remember that disease, insect tolerance and other genetic characteristics should still top your soybean shopping list. But with the growth in herbicide-resistant weeds, weed control is a crucial part of soybean profitability, and herbicide-tolerant traits can be an important tool.

Moreover, the growing web of different herbicide-tolerant crops planted across the country has made it more important than ever to know what is in the variety you are growing — and what’s in your neighbor’s. So here is the latest information on the status and availability of each different trait option, organized by herbicide-tolerant genetic platform:

1. ROUNDUP READY TECHNOLOGY

ROUNDUP READY 1

The original glyphosate-tolerant Roundup Ready trait have been off patent since 2015. Although Monsanto, now owned by Bayer, phased the trait out of its seed stock years ago, the trait is still available from university breeding programs and some smaller, localized seed suppliers. Because the trait is off patent, growers who use RR1 soybeans can save them for seed. Growers interested in finding varieties with the RR1 trait should check with their local universities and state seed associations for information on availability.

ROUNDUP READY 2

After phasing out RR1, Monsanto focused on its glyphosate-tolerant Roundup Ready 2 platform. The trait remains a standalone option for growers in 2020, and will likely continue to be available for a few more years, either from Bayer seed brands and other seed companies that license the trait, albeit in smaller and smaller numbers, said Bayer Soybean Portfolio Lead Ryan Rubischko.

Ultimately, Bayer is shifting its breeding pipeline to the RR2 Xtend platform, said Wes Hays, Bayer germplasm and deployment lead.

RR2 XTEND

Glyphosate and dicamba-tolerant RR2 Xtend soybeans accounted for 60% of the soybeans planted in the U.S. last year, roughly 54 million acres. It’s too early to say if that number will rise in 2020 or — as it is now facing increased competition in the marketplace — stay the same or even decrease, Rubischko noted.

The trait is available in maturity groups ranging from Group 00 through Group 7 from Bayer seed brands and more than 100 licensees, he noted.

Growers who use RR2 Xtend varieties in 2020 should be aware that the corresponding herbicides, XtendiMax, Engenia and FeXapan, face an increasingly complicated number of use restrictions.

In 2018, EPA released a new set of restricted use pesticide (RUP) labels for these herbicides with restrictions on when and how growers can use them. Another herbicide, Tavium, was registered in 2019 for use in the Xtend system, with a similar set of restrictions.

However, after the third consecutive year of off-target dicamba injury reports — including record levels in Illinois and Indiana — some states are taking measures to further restrict dicamba use in 2020. Most recently, Illinois has announced a 24(c) label with a June 20 cutoff date and an 85 degree cutoff for dicamba next year. (See more here: https://www.dtnpf.com/…)

XTENDFLEX

Bayer’s next generation of soybean herbicide-tolerant trait technology is XtendFlex. These soybeans can tolerate over-the-top use of glyphosate, dicamba and glufosinate. The technology was used under stewardship in 2019 in Bayer’s Ground Breakers program, but the company hopes it will be fully commercialized in 2020. The only remaining obstacle to full commercialization is EU import approval of the trait, Rubischko noted.

“We’re hoping for a late spring of 2020 approval of XtendFlex with the EU,” he said. “Given that anticipated timeframe, we could see an introductory launch of XtendFlex for the 2020 season.”

The company has XtendFlex soybeans available in a broad range of maturity groups for 2020, but the timing of that EU approval will determine what volumes are available in what regions, added Hays. Given that these soybeans contain the Roundup Ready, Xtend and Liberty Link traits, growers should have a range of herbicide options to use over the top of them legally in 2020, he added.

Ultimately, the XtendFlex trait is expected to inherit RR2 Xtend’s “throne” as the basis for Bayer’s soybean breeding portfolio in the coming decade. “We’ve shifted breeding efforts from RR2 to the Xtend platform and we’ll start to shift that to XtendFlex in the future,” Hays said.

2. LIBERTY LINK TECHNOLOGY

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Ohio’s proposed hemp rules are out

Source: Peggy Kirk Hall and Ellen Essman, OSU Extension

Ohio’s newly created hemp program is one step further toward getting off the ground.   On October 9, the Ohio Department of Agriculture (ODA) released its anxiously awaited proposal of the rules that will regulate hemp production in Ohio.   ODA seeks public comments on the proposed regulations until October 30, 2019.

There are two parts to the rules package:  one rule for hemp cultivation and another for hemp processing.   Here’s an overview of the components of each rule:

1.  Hemp cultivation

The first rule addresses the “cultivation” of hemp, which means “to plant, water, grow, fertilize, till or havest a plant or crop.”  Cultivating also includes “possessing or storing a plant or crop on a premises whre the plant was cultivated until transported to the first point of sale.”  The proposal lays out the following regulatory process for those who wish to cultivate hemp in Ohio.

Cultivation licenses.  Anyone who wants to grow hemp must receive a hemp cultivation license from the ODA.  Licenses are valid for three years.  To obtain a license, the would-be hemp cultivator must submit an application during the application window, which will be between November 1 and March 31.  The application requires the applicant to provide personal information about the applicant, and if the applicant is a business, information about who is authorized to sign on behalf of the business, who will be primarily responsible for hemp operations and the identity of those having a financial interest greater than ten percent in the entity.    The cultivation license application will also seek information about each location where hemp will be grown, including the GPS coordinates, physical address, number of outdoor acres or indoor square footage, and maps of each field, greenhouse, building or storage facility where hemp will grow or be stored.  Cultivators must pay a license application fee of $100, and once licensed, an additional license fee of $500 for each growing location, which the rule defines as “a contiguous land area or single building in which hemp is grown or planned to be grown.”  All applicants and anyone with a controlling interest in the hemp cultivation business must also submit to a criminal records check by the bureau of criminal identification and investigation.

Land use restrictions.  The proposed rules state that a licensed hemp cultivator shall not:

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Seed Corn Costs: How Do Discounts Work with Seed Company Financing?

Source: Farmdoc, Chad Fiechter and Jennifer Ifft, Cornell University

To manage input costs, many producers take advantage of early pay and other discounts offered by input suppliers. Seed and chemicals often have complex pricing, with a range of pre-pay discounts, volume discounts, rebates and other incentives. On top of that, financing options are almost always available, with their own schedule of discounts and fees. This series addresses the following aspects of seed corn costs: (1) early cash payment and volume discounts (2) discounts under seed company financing options, and (3) the cost of seed company financing relative to traditional financing. In our first article (farmdoc daily October 10, 2019), we created a hypothetical discount schedule based on published discount schedules to show that seed discounts can easily reduce costs by over 20 percent  of the base price with early cash payment and volume discounts. In this article, we use this information to consider how discounts work under seed company financing.

Most seed companies offer financing under a separate discount schedule, which we summarize in Table 1. As we discussed in our previous article, we do not account for base price, but consider only the potential range of prices across an individual company, holding base price constant. Locking in financing early and obtaining a volume discount can lead to discounts from the base price in the range of 15 percent, which offers meaningful cost savings.

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