Digest Highlights

EPA has aerial surveillance authority, within limits

U.S. case law indicates the EPA has authority to conduct aerial surveillance of farms, within limits.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Writing in the Janzen Ag Law Blog on March 28, attorney Todd Janzen said the issue was raised in 2012, when Iowa and Nebraska feedlot owners learned that EPA was conducting flyovers to look for Clean Water Act violations. Now, there are reports of EPA flyovers in the Lake Erie watershed in northeast Indiana.

The U.S. Supreme Court has held that the use of aerial photography is within statutory authority because the Clean Air Act provided that the EPA has a "right of entry to, upon, or through any premises."

U.S. citizens have a right to privacy under the Fourth Amendment, and there are limits to government surveillance, Janzen said. When deciding Dow Chemical Co. v. U.S. in 1986, the Supreme Court noted there was a difference between searches of the "curtilage" of one's home and the "open fields" nearby. "Curtilage" is the "area immediately surrounding a private house," Janzen noted. However, the Fourth Amendment does not protect the privacy of individuals in areas "out of doors in fields, except in the area immediately surrounding the home."

Most parts of a farm would likely be considered “open fields,” freely visible from the sky and thus not protected from peering eyes. However, this does not mean the EPA’s aerial surveillance could never violate the Fourth Amendment. Many farms often include both livestock facilities and residential homes on the same property.

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While it may be worrisome for a farmer to see the EPA flying overhead, Janzen said he would be more concerned with follow-up site visits because that means EPA saw something they did not like from the sky.

Read Janzen’s blog post, “EPA Flyovers, Open Fields and the Right to Privacy.”

Proposal raises Chapter 12 liability cap

A bipartisan group of senators have reintroduced a bill that would allow more family farmers to reorganize under Chapter 12 of the federal bankruptcy code. Introduced by U.S. Sens. Amy Klobuchar and Tina Smith (both D-Minnesota) and Chuck Grassley (R-Iowa), the Family Farmer Relief Act of 2019 would raise the Chapter 12 operating debt cap to $10 million. The bill is co-sponsored by Sens. Ron Johnson (R-Wisconsin), Patrick Leahy (D-Vermont), Thom Tillis (R-North Carolina), Doug Jones (D-Alabama) and Joni Ernst (R-Iowa).

Chapter 12 of the U.S. bankruptcy code removes some costly reorganization requirements intended for large corporations. Designed for family farmers with "regular annual income,” Chapter 12 bankruptcy allows financially distressed farmers to restructure financials and propose a repayment plan – usually over a three- to five-year period – to avoid a liquidation of assets or foreclosure.

The Family Farmer Relief Act of 2019 is supported by the American Farm Bureau Federation (AFBF).

“Our farmer members have experienced several consecutive years of weak commodity prices and the low profitability and poor farm income that follow,” said Zippy Duvall, AFBF president. “As a result, farmers and ranchers are watching their equity erode as their debt-to-asset ratios climb, and debt financing reaches a 30-year high. The double whammy of nominal record farm debt and poor economic conditions have led many farmers to seek Chapter 12 bankruptcy as a debt relief and restructuring option. Lifting the liability cap and giving more farmers an opportunity to qualify for Chapter 12 bankruptcy provides the restructuring and seasonal repayment flexibility that many farmers need in today’s lagging farm economy and will help to align bankruptcy law with the scale and credit needs of U.S. agriculture.”

Latest data from U.S. court caseload statistics indicates Chapter 12 bankruptcy filings totaled 498 in the year ending Dec. 31, 2018, with “dairy” states accounting for some of the highest filing rates. (Read: Dairy economy factors into Chapter 12 bankruptcy numbers.)

Proposal again seeks tighter oversight of checkoff programs

A bipartisan group of U.S. senators has reintroduced a bill calling for more control and transparency of the nation’s agricultural commodity checkoff programs.

First introduced in 2017, the “Opportunities for Fairness in Farming (OFF) Act” was brought back by U.S. Sens. Mike Lee (R-Utah), Cory Booker (D-New Jersey), Rand Paul (R-Kentucky) and Elizabeth Warren (D-Massachusetts). According to the bill’s authors, past checkoff program abuses have included diversion of funds to agribusiness trade associations for salaries and lobbying activities that often run counter to the wishes of family farmers.

The OFF Act would amend the authorizing checkoff laws to reaffirm that these programs may not contract with organizations that engage in policy advocacy, conflicts of interest or anticompetitive activities that harm other commodities. It would also require that they publish all budgets and disbursements of funds for the purposes of public inspection and submit to periodic audits by the USDA Inspector General.

Pennsylvania over-order premium raised to $1 per cwt

The Pennsylvania Milk Marketing Board increased the state’s over-order premium to $1 per hundredweight (cwt), effective April 1-Sept. 30, 2019. The over-order premium, which applies to all Class I milk produced, processed and sold in Pennsylvania, had been at 75 cents per cwt since the beginning of 2018.

February cull cow prices higher

Despite higher slaughter rate, cull cow prices improved in the first two months of the year. February 2019 cull cow prices (beef and dairy combined) averaged $58.90 per cwt, up $4.70 from January and the highest average since September 2018. The average is still about $6.70 per cwt less than February 2018.

Flooding impacting cottonseed shipments

While Mississippi River flooding has disrupted southbound barge movement of grains to the Gulf of Mexico, it’s also prevented northbound shipments of cottonseed to warehouses where supplies are depleted, according to Nigel Adcock with Cottonseed LLC.

Midwest warehouse cottonseed inventories generally track the typical shipping season, with restocking activity picking up in March. With river experts estimating the Mississippi River will remain closed through mid-April, cottonseed availability will be limited to long–haul trucks and a few rail cars that can be switched from California and/or Pacific Northwest destinations, Adcock said. Delivery delays and higher prices in the Upper Midwest are expected until the cottonseed pipeline is replenished.

In addition, flooding along the Platte and Missouri rivers in Nebraska and Iowa seriously impacted rail services into the Pacific Northwest, with many rail lines washed away. This has resulted in a tightening of cottonseed supplies and an increase in prices.

2019 hay acreage forecast steady

Lots of variables remain, but the USDA’s initial estimate of 2019 acreage devoted to major crops indicates little change in the area harvested for dry hay compared to a year ago. The USDA released its Prospective Plantings report on March 29.

Based on surveys conducted during the first two weeks of March, U.S. producers intend to harvest 53.1 million acres of all hay in 2019, up less than 1 percent from 2018. (The report does not differentiate between alfalfa and other hay.) If realized, this will represent the third-lowest total hay harvested area since 1908, behind 2017 and 2018.

Whether these acreage estimates continue to be accurate remains to be seen. Flooding and other weather-related factors could impact hay acreage in a number of major hay-producing states, and the cold, wet spring has delayed determination of alfalfa winterkill in many Northern states.

Regionally, the report indicates modest decreases in hay acreage across most of the Rocky Mountain states, offset by modest increases in most Corn Belt and Northeast states.

A 60,000-acre decline in California continues a long-term trend that has seen hay acreage drop 455,000 acres since 2014 and 620,000 acres in the past decade. Among other leading dairy states, hay acreage is expected to decline slightly in Idaho and Michigan, but rebound somewhat in Pennsylvania.

For more information, see the Progressive Forage website.

Corn and soybean stocks, acreage reported

Along with hay acreage expectations, the two reports from the USDA released last week could have an impact on your other feed costs. Initial market reaction saw corn and soybean prices decline.

A quarterly Grain Stocks report estimated the U.S. corn inventory stored in all positions as of March 1, 2019, totaled 8.60 billion bushels, down 3 percent from a year earlier. Even though it was down, the forecast was higher than many market analysts expected.

Soybean inventories totaled 2.72 billion bushels, up 29 percent from a year earlier. With past trade disruptions, market analysts had already factored much of the increase into prices.

The annual Prospective Plantings report estimated U.S. growers will plant 92.8 million acres of corn for all purposes in 2019, up 4 percent (3.66 million acres) from last year.

Soybean-planted area for 2019 is estimated at 84.6 million acres, down 5 percent from last year.

Affecting cottonseed supplies, the cotton-planted area for 2019 is estimated at 13.8 million acres, 2 percent below last year.

CWT adds to list of products eligible for export assistance 

Cooperatives Working Together (CWT) member cooperatives can now add pasteurized process cheese, cream cheese and anhydrous milkfat to the list of products eligible for export assistance, according to the National Milk Producers Federation (NMPF).

Previously, the CWT export assistance program was available for American-type cheeses, butter and whole milk powder. Nonfat dry milk powder and whey powders are not eligible to receive assistance.

Member cooperatives and individuals pay 4 cents per hundredweight of milk to CWT. Only dairy farmer cooperatives that are fully participating members of CWT are qualified to apply for export assistance.

Under the program, CWT member cooperatives submit requests for financial help in making sales to specified markets.

Through April 1, CWT had assisted with exports of dairy products equivalent to more than 459.6 million pounds of milk (milkfat basis).

Global Dairy Trade index up again

Although small, the index of Global Dairy Trade (GDT) dairy product prices posted a ninth consecutive increase during the auction held April 2, up 0.8 percent.

Prices for most major product categories were higher:

  • Skim milk powder was up 1.8 percent to $2,468 per metric ton (MT).
  • Butter was up 5.8 percent to $5,374 per MT.
  • Cheddar cheese was up 3.2 percent to $4,248 per MT.
  • Whole milk powder was down 1.3 percent to $3,287 per MT.

The next GDT auction is April 16, 2019.  end mark

Dave Natzke