News & Media

Market Briefs for December 21, 2017

Tax reform bill includes some big wins for agriculture
The tax reform measure includes a big win for ag cooperatives and their farmer members as it added language to help offset the loss of Section 199 provisions. There was also pass-through language for businesses that are important for agriculture, since the vast majority of farms are structured as pass-throughs. Plus, the bill would repeal “carryback” provisions for net operating losses, but make an exception for farming.

CME lowers margins on corn and soy
CME Group has lowered maintenance margins on January soybean futures by $200 to $1,450 per contract. It also dropped maintenance margins for January soyoil futures by $125 to $600 per contract. The exchange cut maintenance margins for March corn futures by $100 to $550 per contract. CME details that initial margins stand at 110 percent of these levels.

Rule on definition of WOTUS delayed
A new definition for waters of the U.S. (WOTUS) is now scheduled to be finalized June 2019, with a proposed rule expected in May 2018, according to the updated Unified Agenda for the Environmental Protection Agency (EPA). This is in contrast to recent comments by EPA Administrator Scott Pruitt who said the new definition of WOTUS would be coming in the first quarter of 2018.

EPA gives OK to glyphosate
The Environmental Protection Agency (EPA) announced it has deemed the herbicide used in Monsanto’s Roundup weed killer was not harmful to humans. It also found “no other meaningful risks to human health when the product is used according to the pesticide label.” EPA added that its findings were consistent with other research groups, including the 2017 National Institute of Health Agricultural Survey.

Ag exemption to FMCSA rule
The Federal Motor Carrier Safety Administration (FMCSA) published its proposed regulatory guidance on the hours-of-service (HOS) exception for truckers hauling produce and other agricultural goods. Existing HOS rules let most drivers in the agriculture industry off the hook as long as they’re delivering within a 150-mile radius of the source. FMCSA’s newly proposed guidance clarifies they’re exempt on unloaded trips, both to the source and from the point of delivery. The regulatory guidance explains that if a delivery destination falls outside of that 150-mile limit, the HOS rules go into effect only once the driver’s traveled beyond that radius. The agency will accept public comments over the next 30 days.

Disaster package includes $3.8 billion for agriculture
The $81 billion disaster aid package unveiled in the House this week includes $3.8 billion for USDA for disaster recovery from hurricanes, wildfires and crop loss. The funds for USDA would include $2.6 billion for agriculture disaster assistance, including those related crop and livestock losses in disaster designated zones; $541 million for watershed and flood prevention efforts; $400 million for emergency conservation efforts to mitigate future disaster risks; and $165 million for repairs and mitigation for rural water and waste disposal systems. The package would also include $12.1 billion for the Army Corps of Engineers for repairs needed due to natural disasters and $26.1 billion for Community Development Block Grains-Disaster Recovery that would be targeted to housing, business infrastructure and mitigation needs for communities hit by disasters in 2017.

KORUS update
South Korea’s trade ministry said Monday it had reported to Parliament a plan to renegotiate the 2012 free trade agreement with the United States. U.S. and South Korean officials are more upbeat on a likely update to the Korea-U.S. (KORUS) trade agreement that President Trump earlier this year threatened to walk away from.

Missouri fines eight people for misusing dicamba
Missouri has fined eight people a total of $145,125 for improperly applying the chemical known as dicamba to kill weeds in 2016. The state called this “the first wave of civil penalties issued to applicators.” EPA has issued new, tougher guidelines regarding dicamba use in 2018, with some states adding additional restrictions. Meanwhile, Monsanto Co. is promising cash refunds to farmers who buy its XtendiMax with VaporGrip herbicide that is based on dicamba in 2018.

U.S. agriculture vulnerable to disease-causing terror attacks
The U.S. lacks a coordinated defense against terrorism targeting the country’s food supply and farm economy with disease-causing pathogens aimed at crops and livestock, witnesses told the Senate Agriculture Committee last week. Joseph Lieberman, a former Connecticut senator who co-chairs the Blue Ribbon Study on Biodefense, said the potential for attacks on food crops and food animals should worry policy makers as much as the possibility of a nuclear attack by an enemy.