USDA Assists Farmers, Ranchers, and Communities Affected by Recent Derecho

A news release yesterday from the USDA indicated that, “[USDA] today announced the availability of assistance for agricultural producers in the Midwest affected by the recent severe weather to help eligible farmers and ranchers reestablish their operations.

“‘Our agricultural producers provide Americans and consumers around the world with such abundance, it’s critical that we stand with them when confronting disasters like the derecho that has devastated so many in America’s heartland,’ said Bill Northey, USDA Under Secretary for Farm Production and Conservation.”

Yesterday’s update pointed out that, “Livestock owners and contract growers who experience above normal livestock deaths due to specific weather events, as well as to disease or animal attacks, may qualify for assistance under USDA’s Livestock Indemnity Program. The Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program provides payments to eligible producers to help compensate for losses due to disease (including cattle tick fever), and adverse weather or other conditions, such as blizzards and wildfires, that are not covered by certain other disaster programs. Producers of non-insurable crops who suffer crop losses, lower yields or are prevented from planting agricultural commodities may be eligible for assistance under USDA’s Noninsured Crop Disaster Assistance Program if the losses were due to natural disasters.”

The USDA release added that, “USDA also can provide financial resources through its Environmental Quality Incentives Program to help with immediate needs and long-term support to help recover from natural disasters and conserve water resources. Assistance may also be available for emergency animal morality disposal from natural disasters and other causes. USDA’s Emergency Watershed Protection Program also can help relieve imminent threats to life and property caused by flood, fires and other natural disasters that impair a watershed.

Orchardists and nursery tree growers may be eligible for assistance through USDA’s Tree Assistance Program to help replant or rehabilitate eligible trees, bushes and vines damaged by natural disasters.

“Producers with coverage through the Risk Management Agency (RMA) administered Federal crop insurance program should contact their crop insurance agent for issues regarding filing claims.”

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USDA Announces More Eligible Commodities for CFAP- Application Deadline Extended to Sept. 11

A news release yesterday from USDA’s Farm Service Agency (FSA) stated that, “U.S. Secretary of Agriculture Sonny Perdue announced today that additional commodities are covered by the Coronavirus Food Assistance Program (CFAP) in response to public comments and data. Additionally, the [USDA] is extending the deadline to apply for the program to September 11th, and producers with approved applications will receive their final payment. After reviewing over 1,700 responses, even more farmers and ranchers will have the opportunity for assistance to help keep operations afloat during these tough times.

“‘President Trump is standing with America’s farmers and ranchers to ensure they get through this pandemic and continue to produce enough food and fiber to feed America and the world. That is why he authorized this $16 billion of direct support in the CFAP program and today we are pleased to add additional commodities eligible to receive much needed assistance,’ said Secretary Perdue. ‘CFAP is just one of the many ways USDA is helping producers weather the impacts of the pandemic. From deferring payments on loans to adding flexibilities to crop insurance and reporting deadlines, USDA has been leveraging many tools to help producers.'”

Yesterday’s update added that, “To ensure availability of funding, producers with approved applications initially received 80 percent of their payments. The [FSA] will automatically issue the remaining 20 percent of the calculated payment to eligible producers. Going forward, producers who apply for CFAP will receive 100 percent of their total payment, not to exceed the payment limit, when their applications are approved.”

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USDA Accepting Applications to Help Cover Costs for Organic Certification

A news release yesterday from USDA’s Farm Service Agency (FSA) stated that, “[FSA] announced that organic producers and handlers can apply for federal funds to assist with the cost of receiving and maintaining organic certification through the Organic Certification Cost Share Program (OCCSP). Applications for eligible certification expenses paid between Oct. 1, 2019, and Sept. 30, 2020, are due Oct. 31, 2020.

“‘For producers producing food with organic certification, this program helps cover a portion of those certification costs,’ FSA Administrator Richard Fordyce said. ‘Contact your local FSA county office to learn more about this program and other valuable USDA resources, like farm loans and conservation assistance, that can help you succeed.’

“OCCSP provides cost-share assistance to producers and handlers of agricultural products for the costs of obtaining or maintaining organic certification under the USDA’s National Organic Program. Eligible producers include any certified producers or handlers who have paid organic certification fees to a USDA-accredited certifying agent. Eligible expenses for cost-share reimbursement include application fees, inspection costs, fees related to equivalency agreement and arrangement requirements, travel expenses for inspectors, user fees, sales assessments and postage.”

The FSA update added that, “Due to expected participation levels and the limited funds available, FSA revised the reimbursement amount available through fiscal year 2023. Certified producers and handlers are now eligible to receive reimbursement for up to 50 percent of the certified organic operation’s eligible expenses, up to a maximum of $500 per scope.

“This change is will allow a larger number of certified organic operations to receive assistance.  If Congress authorizes additional funding, FSA may provide additional assistance to certified operations that have applied for OCCSP, not to exceed 75 percent of their eligible costs, up to $750 per scope.”

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The Pandemic Sparks New Demand For Vertical Farming

Dickson Despommier indicated in a column late last month in The Wall Street Journal that, “The Covid-19 pandemic has disrupted agricultural production and supply chains around the world. Farmers have often struggled to get their food to distant markets, and sharp shifts in demand have repeatedly forced them to dump crops. Avoiding such logistical problems is one of the chief advantages of vertical farms, a new approach to agriculture that aims to grow food closer to population centers.

“Over the past 10 years, hundreds of such indoor farms have sprouted up around the globe, mostly in the larger cities of industrialized countries. They occupy multistory buildings in which crops are grown in water or in misted air instead of soil, with LED lights in place of sunlight, in a controlled and largely automated environment.

Building more vertical farms in cities is especially timely because of the expected effects of the pandemic on urban office towers. Moody’s Analytics REIS now projects office vacancies to rise to 19.3% in the 82 largest metropolitan areas by the end of the year, up from 16.8% last year, and then to continue rising. In June, 82% of employers surveyed by market-research firm Gartner, Inc. said that they would allow employees to work from home permanently. Indoor farms can occupy some of the abandoned or underused office space created by these trends.”

Dr. Despommier stated that, “There are many other vertical-farm startups backed by venture capital and expanding in Europe and the U.S., as well as on the Arabian peninsula, where they can provide an alternative to hot, arid conditions. But other firms have failed, or have canceled expansion plans, as they struggle to manage their costs and compete in local markets. And vertical farms aren’t likely to gain a competitive advantage over conventional farming when it comes to important commodities such as fruits grown in orchards or grains grown in vast fields. Both are possible to raise in vertical indoor settings, but so far, their yields are too low and seasonal to be economical.

The pandemic has sparked new demand for the industry. San Francisco-based vertical farm Plenty says that a significant increase in shipments has sped up its effort to diversify crops. The company has already experimented with strategies to add items such as tomatoes and strawberries.

“Covid-19 has been a harbinger of longer-term problems in food security for our cities. One answer may come from growing more of our food just down the street.”

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Mortgage Rates Fall to Historic Lows

Washington Post writer Kathy Orton reported yesterday that, “The federal government’s inability to come to an agreement on a coronavirus relief package has been good for mortgage rates.

The 30-year fixed mortgage rate, the most popular home loan product, sank to its lowest level on record. It fell to 2.88 percent with an average 0.8 point, according to the latest data released Thursday by Freddie Mac. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.) It was 2.99 percent a week ago and 3.6 percent a year ago. Since November 2018, when it was 4.94 percent, it has fallen more than two percentage points.

“The 30-year fixed rate has never been this low since Freddie Mac began tracking mortgage rates in 1971. It surpassed the previous low of 2.98 percent, set last month. This is the eighth time since March that the 30-year fixed rate has fallen to a new low.”

The Post article added that, “‘Mortgage rates moved notably downward this week, as a stalemate in Washington dampened investor sentiment,’ said Matthew Speakman, a Zillow economist. ‘Recently, downward pressure on mortgage rates has been consistent, but a combination of factors — including increased demand from borrowers and reluctance from lenders to push rates lower — had kept them afloat. But the inability for the federal government to agree to a new fiscal relief bill last week finally tipped rates over the edge and down to new all-time lows. Now that the threshold has been broken, more downward rate movements may be on the horizon.'”

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Agricultural Technology Greenhouse Startup AppHarvest Raises More Money

Bloomberg writer Emily Chasan reported today that, “In a bid to push more sustainable production into the U.S. food system, hedge funder-turned impact investor Jeff Ubben is backing agricultural technology greenhouse startup AppHarvest in his first deal since leaving ValueAct Capital Management LP in June to launch a new firm, Inclusive Capital.

“AppHarvest, which is planning to open the world’s largest greenhouse this fall—a 2.76 million square foot facility in Morehead, Kentucky—raised $28 million in a Series C funding round, it announced Thursday. That brings the total raised for the company to $150 million over the past two years.

The latest round was led by J.D. Vance’s Narya Capital, which focuses on ‘scientifically complicated’ startups. It also includes James Murdoch’s Lupa Systems investment firm and Steve Case’s Rise of the Rest fund, among others.”

The Bloomberg article noted that, “The company’s Kentucky greenhouse less than a day’s drive from 70% of America’s population, AppHarvest said, a strategy designed to reduce fuel and food waste associated with transporting fresh vegetables around the country. The greenhouse grower, which relies on rainwater rather than local water supplies, aims to create jobs in Eastern Kentucky, a region hard hit by the decline of the coal industry.

“‘Agriculture is at a tipping point now where we have to have technology and infrastructure come onto farms and update them over the next few years,’ said AppHarvest founder and Chief Executive Officer Jonathan Webb. The company is betting that supply chain disruptions related to the coronavirus pandemic will push large grocers to back more domestic sources of produce.”

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USDA Extends Deadlines, Defers Interest Accrual Due to COVID-19

A news release today from USDA stated that, “The [USDA’s] Risk Management Agency (RMA) today announced it will authorize Approved Insurance Providers (AIPs) to extend deadlines for premium and administrative fee payments, defer the resulting interest accrual and allow other flexibilities to help farmers, ranchers, and insurance providers due to the COVID-19 pandemic.

“‘USDA recognizes farmers and ranchers have been severely affected by the COVID-19 Pandemic this year and to help ease the burden on these folks, we are continuing to extend flexibility for producers,’ said U.S. Secretary of Agriculture Sonny Perdue. ‘The flexibilities announced today support health and safety while also ensuring the Federal crop insurance program continues to serve as a vital risk management tool.'”

The release added that, “Specifically, USDA is authorizing AIPs to provide policyholders additional time to pay premium and administrative fees and to waive accrual of interest to the earlier of 60 days after their scheduled payment due date or the termination date on policies with premium billing dates between August 1, 2020, and September 30, 2020. In addition, USDA is authorizing AIPs to provide up to an additional 60 days for policyholders to make payment and waive additional interest for Written Payment Agreements due between August 1, 2020, and September 30, 2020.”

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January 1 Honey Bee Colonies Up 8 Percent

A report yesterday from the USDA’s National Agricultural Statistics Service (NASS) stated that, “Honey bee colonies for operations with five or more colonies in the United States on January 1, 2020 totaled
2.88 million colonies, up 8 percent from January 1, 2019. The number of colonies in the United States on April 1, 2020 was 2.98 million colonies. During 2019, honey bee colonies on January 1, July 1, and October 1 were 2.67 million, 3.18 million, and 3.02 million colonies, respectively.

Honey bee colonies lost for operations with five or more colonies from January through March 2020, was 399,570 colonies, or 14 percent. The number of colonies lost during the quarter of April through June 2020 was 252,630 colonies, or 8 percent. During the quarter of July through September 2019, colonies lost totaled 434,700 colonies, or 14 percent, the highest number lost of any quarter surveyed in 2019. The quarter surveyed in 2019 with the lowest number of colonies lost was October through December, with 399,510 colonies lost, or 13 percent.”

The NASS update added that, “Varroa mites were the number one stressor for operations with five or more colonies during all quarters surveyed in 2019. The quarter of October through December 2019 had the highest percentage of colonies reported to be affected by varroa mites at 45.7 percent. The percent of colonies reported to be affected by varroa mites during January through March 2020 and April through June 2020 are 25.5 percent and 42.3 percent respectively.”

“Honey bee colonies lost with Colony Collapse Disorder symptoms on operations with five or more colonies was 105,240 colonies from January through March 2020. This is a 76 percent increase from the same quarter of 2019,” the NASS report said.

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FBN Raised $250 Million To Expand Agriculture Tech Platform

Bloomberg writer Katie Roof reported today that, “Farmers Business Network Inc. [FBN] says it raised $250 million in financing to expand its agriculture technology platform.

“The financing round was led by BlackRock Inc., with participation from investors including Lupa Systems, T. Rowe Price Associates Inc., GV and Kleiner Perkins.

“The investment values the company at about $1.75 billion, according to two people familiar with the matter, who asked not to be identified because the information isn’t yet public. It was last valued about $1.1 billion last year, according to PitchBook Data Inc. The company declined to comment on its valuation.”

The Bloomberg article added that, “San Carlos, California-based Farmers Business Network has a data and analytics platform that helps farmers with a range of functions, from pricing to marketing. The new capital will be used to expand its seed and crop protection business, which aims to help farmers reduce their cost of production.

“Amol Deshpande, chief executive officer and co-founder, said saving farmers money is more important than ever, as many agricultural businesses were harmed by the pandemic.”

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ADM Accused of Ethanol Market Manipulation in Lawsuit

Reuters writer P.J. Huffstutter reported last week that, “Green Plains Inc, one of the biggest U.S. ethanol producers, sued Archer Daniels Midland Co on [July 14th], accusing the global grain trader of manipulating the price of the biofuel to profit from its positions in the derivatives market.

“Green Plains filed the proposed class action with the U.S. District Court of Nebraska, where it also claimed that senior ADM officials knew of the alleged manipulation. ADM told Reuters in an email statement that the company does not comment on pending litigation.

“The lawsuit seeks unspecified damages. It follows reporting by Reuters that ADM’s ethanol selling had led traders to complain to S&P Global Platts, which provides benchmark pricing for the physical ethanol contract at different U.S. delivery points.”

Ms. Huffstutter noted that, “According to the complaint, ADM was aggressively selling ethanol on the cash market at the Argo terminal just outside of Chicago – and timing such selling 30 minutes ahead of the close of the trading day. Green Plains also said ADM flooded the terminal with its barges, to choke off competitors’ supplies and influence the price of spot and futures ethanol markets.”

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