A Nitrogen Nightmare in the Making?

The American Farm Bureau is waving a red flag on a fertilizer fiasco that could drain U.S. farmers’ piggy banks.

The culprit? Potential duties on urea ammonium nitrate solutions (UAN).

In early July, CF Holdings, Inc. filed petitions with the U.S. government requesting countervailing and antidumping duty investigations of UAN imports from Russia and Trinidad and Tobago. The duties intend to offset the value of dumping — aka exporters selling in the U.S. at a below-normal value price — and countervailing subsidies.

CF Holdings, the U.S.’s largest UAN producer, claims the countries haven’t been fighting fair, underpricing their product by as much as 433.37%.

The more you know: More than 80% of American UAN fertilizer imports come from Russia and Trinidad and Tobago.

Bad news for the bottom line: Farm Bureau says UAN solutions are the most common nitrogen delivery vehicle, making up nearly half of nitrogen fertilizer usage. 59% of all fertilizer applied to fields is nitrogen. Roughly 25% of operating costs are attributable to UAN solutions… meaning these duties could do major damage to farmers’ bottom lines.

Insult to injury. Fertilizer costs were already projected to increase by roughly 5% between 2021 and 2022. The potential tariffs could make that a double-digit increase.

Can D.C. Fix Ag Labor?

The struggle is real with the current U.S. labor shortage, and agriculture is certainly not excluded. The sector is feeling the squeeze, and legislators are pushing to reform the guest worker program to help.

The issue at hand: the current H-2A guest worker program is structured for seasonal, not year-round, help.

A proponent’s point: “Employers in Iowa — animal agriculture, agricultural processing — is not a seasonal business, and that’s what the H-2A program is for is seasonal workers,” Senator Chuck Grassley (R-IA) said. “So I hear from farmers and business(es) who just can’t find people to work.”

Today there are an estimated 2.5M farmworkers, about half of them undocumented. In March, the House passed the Farm Workforce Modernization Act of 2021, which provides mass amnesty without addressing the core labor issues. Republicans aren’t fond of the bill — and won’t approve it until Democrats secure the border.

Senator Grassley also argued the bill fails to address many of the shortfalls of H-2A. “This will involve expanding the program to cover year-round agricultural industries such as pork, dairy, and agricultural processing. It should also involve streamlining the program, reducing red tape and addressing the high cost of using the program.”

Where does it go from here? More debate on how to structure a bill that would address both worker legalization issues and solve the agricultural labor shortage.

Frozen Coffee – It’s Not What You Think

Iced coffee picked up a new meaning last week, and not in a good way.

Early in the morning on July 20, air temperatures across Brazil’s coffee belt settled at an icy 29 degrees Fahrenheit. That’s the coldest temperature the region has seen since 1994.

And just like chocolate milk does not come from brown cows, frozen coffee plants do not make iced coffee.

Farmers are still assessing the extent of the damage, but early indications are not good. One estimate pegs the damage at 4.5M bags off the 70M bag projection for 2022 exports. But the full impact won’t be known until farmers are able to determine if the plants can be saved or not.

Get in line: Like the Starbucks drive-through, the line of challenges stacked against Brazilian coffee farmers is long. Before the frost, drought conditions plagued this year’s growing season, and futures prices were already high. Following the frost, prices surged another 13%.

Dark roast coming? The coming months will be mega important to the cost of your caffeine habit. Forecasters are predicting a return of La Niña. AKA more drought.

If the forecasts come to fruition, count on prices to keep rising.

Senators Take Aim at Corn Ethanol

Corn growers be like, “What just happened here?

A few short weeks after a bullish outlook on the future of ethanol, new legislation now has the corn industry feeling a little sheepish.

Refresher: Amid court setbacks less than a month ago that nixed year-round E15 sales and allowed more small refineries to apply ethanol blending exemptions, bipartisan legislators in key farm states introduced bills that would encourage higher ethanol blends. Things were looking up.

But this week, another group of senators has introduced legislation that seeks to fully eliminate the national ethanol blending mandate. We’re not in the Corn Belt anymore.

Citing a host of grievances, including the risk to good-paying oil refinery jobs, the bipartisan group did not mince words.

Senator soundbites:

  • “The federal government forcing Americans to buy billions of gallons of corn ethanol is terrible policy on many levels.” — Senator Pat Toomey (R-PA)
  • “The federal corn ethanol mandate no longer makes sense when better, lower-carbon alternatives exist.” — Senator Dianne Feinstein (D-CA)

Playin’ politics: The day the bill was introduced, the White House announced the administration would delay the annual review process that determines biofuel blending requirements for petro products.

Mum was the official word, but insiders noted the delay was due to President Biden’s political catch-22 that has him stuck between two key blue-collar constituencies: farmers and refinery workers.

Where this goes: Long-term decisions are a ways off, but NCGA President John Linder quickly responded, echoing what is likely on the minds of most corn growers: “This bill is ill-conceived and would have a devastating impact on air quality, the diversity of our energy supply, fuel prices, and rural economies.”

Forecast Recognition

Iron Man might just have become Climate Man.

Robert Downey, Jr.’s venture fund was one of several to take part in a $12M Series A round for forecast-focused startup ClimateAi. The new tech tool aims to help make agriculture more profitable and food systems more resilient through artificial intelligence climate forecasting.

Learning about clouds on the cloud: So meta. Farmers know weather is a main hurdle to jump each year. Talks about climate change are like the temperatures predicted: on the uptick.

The World Meteorological Organization predicts a 90% likelihood we’ll see the hottest year on record between 2021 and 2025. Looking forward to it…?

Climate Avengers: ClimateAi hopes to help the agricultural supply chain predict the weather to help minimize its climate risk exposure. Their science aims to forecast extreme weather events more than two weeks before they occur, thanks to machine learning and loads of data points.

This is the same technology that powers successful rocket launches. You’re welcome, Jeff Bezos

Specifically, this could help the food supply chain by:

  • Identifying new locations for climate-smart expansions for specific crops and ingredients
  • Managing inventory better to avoid shortages
  • Forecasting pressures from pests and diseases

SoundbAite: “ClimateAi is a platform that provides long-term insights into weather and climate impacts, providing businesses the information they need today to take the actions needed now to adapt to the climate disruptions of tomorrow.” – Jon Schulhof, co-founder of FootPrint Coalition Ventures.

Taking it global: ClimateAi has ambitious goals to be deployed across half a billion acres of farmland around the world in the next three years.

Animal Ag Serious About Sustainability

Twelve American meat, poultry, dairy, and animal feed and ingredient companies solemnly swear they are up to no good good for the animal protein industry.

The companies formed the first joint initiative of its kind, the Protein PACT for the People, Animals, and Climate of Tomorrow. The goal? To “accelerate momentum and verify progress toward global sustainable development goals across all animal protein sectors.”

Submitted as a sustainability game changer, the Protein PACT will make center-of-the-plate sustainability a side dish at the UN Food Systems Summit event in Rome on Tuesday, July 27.

Oh, and this: The North American Meat Institute released its draft sustainability framework too. Public comments are open to help set transparent baselines and measure sustainability progress. The framework has an ambitious 100 metrics determined through collaboration with experts, supply chain partners, and members.

Funding for the Protein PACT came from U.S. farmers and ranchers, and the pork, dairy, and soybean checkoffs also financially supported the effort. The twelve organizations include groups like Animal Agriculture Alliance, Elanco, National Corn Growers Association, Pork Checkoff, and the U.S. Meat Export Federation, among others.

The West’s Insect Issue

The Western U.S. is facing a drought dilemma of biblical proportions: grasshopper plagues.

In large swaths of Oregon, Montana, and Wyoming, as well as some areas of Idaho, Arizona, Colorado, Texas, and Nebraska, the native insects are appearing on the heels of a dry planting season. Grasshoppers and drought go together like PB&J, so the insects are having a hayday.

Not seen by some growers since the mid-1980s, grasshoppers attack rangeland and crop fields. They chew through tender plants, leaves, and grain heads, and are a competitor for livestock forage on public lands, where ranchers have no easy back up plans for the damaged food supply.

No small issue: Populations of 14 grasshoppers per square yard – totaling the weight of a sheep – become a problem. They can eat their bodyweight in forage each day, leading to a $900M impact from a typical infestation. This year, populations are reaching 50-60 grasshoppers per square yard.

Taking care of business: This week, the USDA began spraying diflubenzuron in hard-hit Montana to kill nymphs. Conservationists are concerned about impacts to other insects in the treated area. But officials say their skip-a-swath approach protects slower moving insects while targeting the far-traveling grasshoppers.

Where this goes: Without killing nymphs, the outbreak will peak in roughly two months when the 2-3 inch-long insects will be able to out-eat cattle. They’ll die out when they run out of forage – and likely after they’ve laid next year’s eggs.

Germany’s (Continued) Pork Problem

Stop us if you’ve heard this before.

African Swine Fever (ASF) is stirring up panic in the pork world.

Some viruses just won’t take a hint.

How it started: Germany has been doing everything it can to keep infections out of its hog herd. They went as far as building fences along their border in an attempt to keep infected wild boars in Poland. But last September, the game changed when the first cases of ASF were confirmed in wild animals.

Amidst its own recovery from the devastating impact of the virus, China took the news of wild German boars with ASF hard. They, among other Asian nations, immediately banned imports of German pork.

How it’s going: Germany is the newest addition to the list of countries that have now found ASF in farm-raised pigs. Two farms were confirmed to have the virus last Friday: one an organic farm of about 200 pigs, the second a small farm with only two pigs.

Most in the German pork industry do not see the news as all that concerning. They point to the fact that they have already been limited on export options, thanks to the ban on exports to Asian nations. And the EU is expected to maintain their regionalization approach to restricting trade within its borders.

Ag Data Watch Dogs

Who’s watching your farm data?

A better question for farmers might be… who isn’t watching your data?

And could NFTs (Non-Fungible Tokens) be the solution? NFTs allow people to purchase and own “original” data content and are based on blockchain technology. They’re entirely unique and have software code consisting of smart contracts: once one is minted onto a token on the blockchain, it’s permanent.

In an agricultural setting, this means an AgTech company would attach an NFT to a specific dataset that would be uploaded to its servers and could create a single dataset for its farmer-data-originators. Any copies made of this data would violate the owner’s permission.

Backstory: Currently, there’s not much oversight in place to look out for farmers and how their data is used. At this point, Ag Data Transparent (ADT) is the only organization doing that work.

“ADT certifies companies that commit to be transparent about how they collect, store, use, share, and delete farmers’ ag data.” And they have certified almost 30 AgTech and ag industry legacy companies in a few years.

Who’s behind this ADT? A few farmer-trusted organizations including the National Farm Bureau, National Farmers Union, and national commodity organizations.

The bottom-line: “Datasets that work for farmers need to be created,” said Bill Northey, the USDA’s Under Secretary for Farm Production and Conservation. More than anything? Farmers need to feel comfortable knowing who has access to their data.

Mic(robes) Drop

Fact: soil health fanatics can be the life of the party.

Also fact: soil health fanatics might just be saving the world.

Or at least that’s what one Arizona-based soil science startup is trying to do. MyLand is a soil health company that believes “healthy soil gives us healthy food, healthy people, and a healthy planet.”

And Canada-based Ag Growth International (AGI) is saying “us too!” They are acquiring a minority stake in MyLand so they can have a seat at the board table and install some of the MyLand systems throughout North America.

Soil systems service: The systems AGI wants to install would extract live, native microorganisms from a farmer’s soil and reproduce them in mass quantities. Those organisms are then integrated in a farm’s irrigation system to deliver them back to the ground. It’s like a chocolate fountain, but with soil.

Laying the groundwork: The MyLand system has been in development since 2010 and is unique in that it’s a service-based subscription model with a monthly fee. There’s no up-front cost, and farmers get full benefits of the cost savings, increased yields, increased land values, and carbon captures.

The president and CEO of AGI says this implementation of regenerative agriculture technology like MyLand’s is “critical from a sustainability perspective.”

Successful soil story: A farmer in the Arizona desert was able to increase organic matter from less than 1%  to more than 3% in a three-year period. Of course, the total impact of the technology depends on plenty of variables, but the company has proven results that continuous use of the MyLand System reduces input costs and increases yields.

Next up: The company is planning flagship soil health centers in Florida, California, and Texas to increase interaction with farmers.