Media Release: Al-Corn Clean Fuel Members Vote to Become Limited Liability Company

Claremont, Minnesota – By an overwhelming majority the membership of Al-Corn Clean Fuel has voted to convert from a cooperative to a Limited Liability Company (LLC).  The results of the shareholder vote were announced this morning by Rodney Jorgenson, Chairman of the Board of Al-Corn Clean Fuel.

Al-Corn Clean Fuel, LLC will be acquiring all of its corn for operations on the open market through traditional pricing methods, as well as average pricing contracts and other methods as determined by management.

“Without our member’s willingness to grow and compete in an ever changing business environment, we wouldn’t be here today.” said Rod Jorgenson.  “We have begun moving forward to allow the conversion to become a reality while ensuring our current operations continue running smoothly”.

Al-Corn Clean Fuel, LLC is currently expanding and modernizing the Claremont facility from 50 million gallons per year to 120 million gallons per year, including storage for 1.5 million bushels of corn to facilitate deliveries.  Once complete, the expansion will require an additional 25 – 27 million bushels of corn annually.

“By increasing the production capacity of the Claremont plant, we will be able to drive down cost of production and reach better price markets.  The conversion to an LLC was necessary for Al-Corn Clean Fuel to realize the full potential of the expansion and modernization project” said Jorgenson.

For additional information regarding Al-Corn Clean Fuel visit www.al-corn.com.

About Al-Corn Clean Fuel

Founded in 1994, Al-Corn Clean Fuel, LLC is located in Claremont, MN.  On an annual basis, Al-Corn Clean Fuel grinds 17.5 million bushels of corn and produces 50 million gallons of ethanol.  The plant produces 132,000 tons of high protein livestock feed and 12 million pounds of corn oil.

The media release can be accessed here:

https://www.dropbox.com/s/3bd4svxzwgi7elh/Media%20Release%20-%20Transition%20to%20LLC%20%28September%202017%29.pdf?dl=0

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Interview: Moving Disaster Funding Through Congress (RDL & Associates)

Upon their return to Capitol Hill, members of Congress were met with a congressional agenda laden with fiscal issues – including an emergency funding package in response to Hurricane Harvey.

Dave Ladd, President of RDL & Associates, was recently a guest on the Linder Farm Network to provide an overview of the process of moving emergency disaster funding through Congress.

This segment is 1:18 in length.

Issue Update: Fiscal 2018 Appropriations (RDL & Associates)

Upon their return to Capitol Hill, members of the United States Senate and United States House of Representatives were met with a congressional agenda laden with fiscal issues that must be dealt with prior to the end of September.  In addition to an emergency funding package in response to Hurricane Harvey, Congress must also advance Fiscal Year (FY) 2018 appropriations bills – as well as a continuing resolution and an increase in the debt ceiling.

The first order of business is an emergency spending package related to Hurricane Harvey.  The Trump Administration has requested $14.55 billion from Congress, with $7.9 billion being appropriated immediately as emergency supplemental FY 2017 funds.

Of this amount, $7.4 billion is for the Federal Emergency Management Agency (FEMA) to support ongoing response efforts and $450 million is slated for the Small Business Administration (SBA) for the agency’s disaster loan program to assist small business and homeowners.

The remaining $6.7 billion of the Administration’s request is to replenish the Federal Emergency Management Agency’s Disaster Relief Fund as part of an anticipated continuing resolution.

Also on the appropriations front, the end of the current fiscal year means work on the eight remaining appropriations bills for fiscal 2018 must move forward.  Although the Senate and House Appropriations committees rejected most of the Trump Administration’s proposed FY 2018 budget reductions for the United States Department of Agriculture (USDA), there are a number of key differences.

In the Senate, appropriators included language that would block reorganization of rural development programs at USDA and the elimination of the rural development undersecretary post.  The Senate bill also includes language that would allow cotton farmers to be eligible for payments from the Price Loss Coverage (PLC) program.

For dairy producers, the Senate bill modifies the Margin Protection Program (MPP) in an attempt to make coverage more affordable for farmers.  It would also require USDA to use monthly animal feed data as part of the payment formula.

Also of note is a ban on horse slaughter.  Although the last domestic horse meat slaughter facility closed in 2007, the issue remains a sensitive one within the public policy arena.

Speaking of policy, it was no surprise that a number of riders were included in the Senate version of the Agriculture Appropriations bill, including; a ban on the import and sale of genetically engineered salmon and block funding for USDA to implement a rule requiring convenience stores and similar retailers to expand the categories of food they stock in order to remain eligible to redeem Supplemental Nutrition Assistance Program (SNAP) benefits.

The dynamics were a bit different when House appropriators crafted their version of the bill.  They were silent on the USDA reorganization issue and did not include language banning USDA inspectors from examining horses slated for slaughter to provide meat for human consumption overseas.

Policy riders in the House bill include; a blockage of funding to carry out a rule allowing China to sell cooked chicken to the United States, unless USDA ensures China has an inspection system equivalent to the system used in the U.S.  A

The bill would allow legal foreign workers (primarily temporary agricultural workers brought in through the H-2A visa program) to use farm-worker housing currently limited to Americans and permanent U.S. residents and would block funding for USDA to implement a rule requiring convenience stores and similar retailers to expand the categories of food they stock to remain eligible to redeem SNAP benefits.  This latter provision mirrors language in the Senate bill.

As House leadership pushes ahead on regular appropriations action on the floor, the mechanics of how the spending bills will make it across the goal line remain uncertain.  The eight-bill omnibus package would likely be combined on the floor with a four-bill “minibus” (HR 3219) that has already been passed by the House.  A full 12-bill omnibus would then be sent to the Senate.

Dave Ladd, President of RDL & Associates writes about public policy and the political environment. He also serves as Co-Director of Heartland Advocates.  Contact him at daveladd66@gmail.com.

Agri-Pulse Open Mic: Todd Van Hoose, President & CEO Farm Credit Council

This week’s guest on Open Mic is Todd Van Hoose, President and CEO of the Farm Credit Council. Farmers and ranchers across the country continue to struggle in a down farm economy.

In this week’s interview, Van Hoose emphasizes the need for a new farm bill with risk protection including Title One and crop insurance to see producers through this downturn. Van Hoose explains the need for change in the FSA loan program, expanded funding for rural development and an expansion of market access for U.S. commodities around the world.

Link: https://www.agri-pulse.com/media/podcasts/85-open-mic-interview/play/8505-todd-van-hoose-president-ceo-farm-credit-council

Sugar Symposium opens with call for unity in farm bill talks (via Agri-Pulse)

The leaders of the two biggest U.S. farm groups opened the sugar industry’s annual Sweetener Symposium Monday with a plea for unity among ag organizations as Congress gets down to negotiating a new farm bill.

Zippy Duvall, president of the American Farm Bureau Federation (pictured above), told the American Sugar Alliance gathering in San Diego that the tough economic conditions farmers are facing make it obvious that a strong safety net is needed to ensure agriculture producers can plant and harvest a crop from one year to the next.

“If we’re gonna write a farm bill, we couldn’t find a better atmosphere to write it in,” said Duvall, who said a more precise term for the legislation Congress puts together every five years or so should be a “food security bill for the people of America.”

“It’s not a safety net for farmers,” Duvall said. “It’s not a pay check we’re gonna receive… It’s to make sure farmers get through this crop and can get to the next one…”

Duvall also said that this is the right time to negotiate the farm bill because President Trump “talks our language” and has put in place a team that understands farmers and can speak for the sector to congressional negotiators. He specifically praised Agriculture Secretary Sonny Perdue, Interior Secretary Ryan Zinke and EPA chief Scott Pruitt.

Pruitt, he said, had spoken twice before AFBF leaders and each time had received a standing ovation. “Who would ever think an EPA administrator would ever get a standing ovation from a group of Farm Bureau leaders… I never thought that would happen…. He (Pruitt) wants to go back and enforce laws as they were intended, not make up rules.”

Duvall had followed Roger Johnson, the president of the National Farmers Union, who said farmers, ranchers, conservation groups and nutrition organizations “will all have to be pulling together to get the farm bill done.”

He noted that the ag sector is being challenged by groups including the Heritage Foundation and tea party activists who will be looking for cuts in farm spending, and specifically from nutrition programs, which account for most of USDA outlays.

“When you have a knife out to cut, you go where the money is,” Johnson said.

Still, Johnson said he’s optimistic that the farm bill will be finished on time and that the end result will be “evolutionary, not revolutionary.” He said with Congress as divided as it is now, a farm bill may be an “easier lift” than other legislation being debated, and that lawmakers may see the measure as a way to demonstrate they can get things done.

Later, in a separate panel discussion, Jack Roney, an ASA economist, called for a continuation of a strong U.S. sugar policy in the 2018 farm bill, arguing that with U.S. sugar prices still slumping, the country would otherwise be vulnerable to losing much of its domestic sugar industry.

“Sugar is a unique commodity and our policy is unique in that it is designed to operate without taxpayer cost,” he said. Roney pointed out that U.S. sugar growers don’t have access to farm programs such as Agriculture Risk Coverage and Price Loss Coverage, which are designed to provide financial relief to other commodity groups when prices fall below certain levels. Sugar producers, on the other hand, put their crops up as collateral for loans designed to help them maintain their businesses throughout the year.  Because loans are repaid with interest and no subsidy checks are involved, sugar policy has generally been without cost to taxpayers.

“After a sugar crop is completed, producers must hold the inventory until food makers buy it and ultimately need the sugar in their factories,” Roney said. “This keeps our customers from having to store massive quantities of sugar. That kind of just-in-time delivery would be nearly impossible without the cash-flow that government loans provide.”

Roney says there would be other consequences, too, if opponents of sugar policy are successful in gutting the loan system in the next farm bill.

“In today’s low-price environment, you’d see many domestic producers go out of business without a strong safety net – much like the century-old Hawaiian industry that recently went under after years of market uncertainty,” he explained.  “Risk would increase, contraction would occur, and geographic diversity of the industry would shrink.”

That would also mean a greater dependence on subsidized imports, according to Roney.

“As we’ve seen in other countries that’ve outsourced sugar production, grocery shoppers would be vulnerable to market fluctuations and supply issues,” he concluded.  “A reliable, affordable, homegrown sugar supply is in the public interest, and no-cost sugar policy makes it all possible.”

Speaking on the same panel was Randy Green, representing the Sweetener Users Association, who argued that U.S. sugar policy keeps prices artificially high for the companies that use large amounts of sugar, and ultimately for U.S. consumers.

The 34th Annual Sweetener Symposium continues through Wednesday. House Agriculture Committee Chairman Mike Conaway, R-Texas, addresses the group on Tuesday, and the panel’s ranking Democrat, Collin Peterson of Minnesota, is scheduled to speak Wednesday.

Issue Update: Trade Agreements and Cuba

Dave Ladd, President of RDL & Associates, was recently a guest on the Linder Farm Network to provide an overview of issues related to trade agreements and opportunities for the agricultural sector in Cuba.

Part 1: Trade (:45 in length)

Part 2: Trade Opportunities for Agriculture in Cuba (:34 in length)

Dave Ladd, President of RDL & Associates writes about public policy and the political environment. He also serves as Co-Director of Heartland Advocates.  Contact him at daveladd66@gmail.com.

Trump sparks rush of NAFTA lobbying (via The Hill)

Lobbyists are gearing up for the looming renegotiation of the North American Free Trade Agreement (NAFTA), a sweeping trade pact of critical importance to the United States, Canada and Mexico.

Trade officials from the three nations will take the lead at the negotiating table, but business leaders are already working to build consensus around possible changes to the agreement.

About 175 companies and groups in the U.S. listed lobbying federal officials on NAFTA from June 2016 through the beginning of this year. Roughly a dozen other entities have recently hired Washington lobbyists, including states, provinces and business groups in Mexico and Canada.

President Trump has called NAFTA “the worst trade deal ever,” and he threatened to ditch the deal before finally agreeing to renegotiate after talking to Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto.

“I don’t think a [Hillary] Clinton administration would have prompted Canadian provinces to hire a lobbyist,” said one lobbyist working on NAFTA negotiations who asked for anonymity to speak freely.

Lobbyists and government negotiators for Canada and Mexico have bristled at Trump’s criticism of NAFTA but say working with Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer has given them hope about moving forward.

“Trump’s personal style is an important challenge to any negotiation,” said Luis de la Calle, a consultant who was part of Mexico’s original NAFTA negotiating team. “There’s a difference between today and 25 years ago. That negotiation was complicated, but all three governments had the same objective.”

Canada’s federal government has not hired any U.S. firms so far. Mexico employs a few D.C. firms working on trade, including Public Strategies Washington, though diplomats are leading the charge on the talks.

Some of the lobbying on NAFTA is coming from individual regions that would be affected by changes to the deal.

The state of Sinaloa, which is the largest agricultural producer in Mexico, has hired Mercury, which has former Mexican government official Luis Rosendo Gutiérrez Romano as its managing director, to lobby on its behalf.

Similarly, New Brunswick, a Canadian province, hired the law firm that boasts the former U.S. ambassador to Canada. That firm, Nelson Mullins Riley & Scarborough, already represents the Canadian province of Saskatchewan. Additionally, Ontario — which trades with more than two dozen U.S. states and is home to Canada’s capital of Ottawa — recently hired the lobbying firm West Front Strategies.

U.S. business leaders and officials in Mexico and Canada insist that negotiations, which aren’t expected to start until at least August, must not result in going back to the high tariffs and other trade barriers that were in place before NAFTA.

Experts in Mexico are drawing a hard line: “Neither tariffs nor quotas of any kind will be negotiated,” de la Calle said.

The White House notified Congress on May 18 that it plans to renegotiate the 23-year-old trade deal, kicking off a 90-day countdown clock before official talks can begin.

Most groups are keeping their powder dry on specific issues, and lobbyists say that discussions remain broad in scope and focused on modernizing the agreement.

Businesses and governments — down to the state and local level in all three countries — agree they want to work quickly on NAFTA before elections in Mexico and in the U.S. next year so that all three nations can stay in the deal, allowing the current trading system to continue uninterrupted.

Mexico will elect a new president and Congress next July, while the U.S. congressional elections will follow in November.

Jodi Hanson Bond, senior vice president for the U.S. Chamber of Commerce’s Americas Division, said updating the trade agreement means starting from scratch to convince policymakers of NAFTA’s value.

“I think for a couple of decades we’ve taken for granted that things were going so well that we didn’t take the time to communicate or educate on why it mattered to our economic platform together,” Bond said.

“This has given us a chance to get back together, and it’s really unified the private sector and collaboration with the government at a real local level,” she said.

Earlier this month, the U.S. Chamber of Commerce announced the creation of the U.S.-Mexico Economic Council, led by top companies in both countries, and the North American Economic Alliance with the heads of Canada’s and Mexico’s chambers.

And in April, the Mexican Chamber of Commerce, the Consejo Coordinador Empresarial, hired its first lobbying firm — top K Street shop Akin Gump — to work on NAFTA-related issues.

“On the record, they’re going to be optimistic,” said another trade lobbyist about those involved in the talks. “There’s nobody in industry who’s asking to renegotiate NAFTA. Nobody wanted to renegotiate NAFTA.”

“They’re trying to keep a stiff upper lip. They’re not really thinking about if and when they conclude this thing,” the lobbyist said, expressing concern that a renegotiated NAFTA may face hurdles on Capitol Hill.

Most industries are urging officials to tread lightly on overhauling the agreement, which they say has been successful but needs updates to account for the technological advances of the past 25 years.

The agriculture sector is “not the industry pushing for large wholesale changes to NAFTA,” said Veronica Nigh, an economist at the American Farm Bureau. “Now that we’re here, there could be some changes around the edges.”

The farm group is mostly hoping not to lose “the really significant gains” it has made since NAFTA was adopted. U.S. agriculture exports to Canada and Mexico have increased 300 percent since NAFTA was enacted, Nigh said.

David MacNaughton, Canada’s ambassador to the United States, said he is tapping into support in Congress and the U.S. business community to smooth negotiations with the Trump administration.

“The key message I hear across every sector of the U.S. economy is that a modernized NAFTA must reduce trade barriers between our three countries and enhance the ability of North America to compete in the rest of the world,” McNaughton told Canadian lawmakers last week.

“Put simply, American business is telling their government that the cardinal rule for NAFTA renegotiation is do no harm,” he said.

Al-Corn Clean Fuel “Ethanol Update”

Randy Doyal, CEO of Al-Corn Clean Fuel in Claremont, MN provides an update regarding Al-Corn’s expansion and modernization project. Mr. Doyal also touches upon the benefits of the project to the local community and regional economy, as well to current and future members.

For additional information regarding Al-Corn Clean Fuel, please visit al-corn.com

Mexico shopping for new pork suppliers (via National Hog Farmer)

Mexico’s concern over North American Free Trade Agreement renegotiations sparks the country to begin seeking other viable options for pork supplies, reports pork leaders during a press conference held at the World Pork Expo in Des Moines, Iowa, last week.

While Mexico appreciates and values the pork trade relationship with the United States, they too have reservations over the Trump administration’s intentions to revamp NAFTA. “They want to continue the positive relationship that we have with them, but they are very concerned,” says Maria Zieba, National Pork Producers Council deputy director of international affairs.

Last year, 26% of U.S. pork and pork variety meat was exported with the largest volume shipped (730,000 metric tons) to Mexico, accounting for 90% of the pork imported into the country. U.S. exports to Mexico are coming off a fifth consecutive volume record in 2016

During March, the National Pork Board trade team traveled to Mexico City, building trade relations and pursuing new trade opportunities. The delegation invested its time immersing itself in Mexico, which is one of America’s most important export markets. Zieba and other NPPC staff accompanied the NPB members and staff on the trip.

“Our visit to Mexico was eye-opening. As board members, we were able to witness why Mexico is such an important trading partner,” says Jan Archer, NPB immediate past president and a North Carolina pig farmer. “The average Mexican family spends 30% to 40% of its income on food, so they appreciate the ability to access safe, nutritious and affordable U.S. pork.”

If the United States withdraws from NAFTA, Mexico is likely to place a 20% duty on pork. The fear of imposing a 20% duty on various products sent Mexico researching other potential suppliers of pork. “The biggest worry for us and what we heard is they are looking at other markets. They are looking at diversifying where they purchase their pork from,” stresses Zieba.

Global pork trade is extremely competitive. Other leading pork-producing countries are eager to step up and supply Mexico with pork. As U.S. exports to Mexico comes off a fifth consecutive volume record in 2016, the U.S. pork producers understand the economic impact of trade with its No. 1 volume customer.

America’s pig farmers export pork to more than 100 countries worldwide. However, the United States ships more pork to the 20 countries with free trade agreements than all other countries combined. Market access through free trade agreements is essential to selling additional pork.

John Weber, NPPC immediate past president and Iowa pork producer, says while gaining new market opportunities is a leading offense priority, its top defensive priority is NAFTA. “We want to protect pork exports to two of our biggest markets – Canada and Mexico,” explains Weber.

The United States withdrawing from NAFTA would be devastating to U.S. pork producers. Iowa State University economist Dermot Hayes calculates that if Mexico places a 20% duty on U.S. pork, the industry eventually will lose the entire Mexican market. Consequently, this would result in a 5% loss in pork production, 10% reduction in the live hog market which will ultimately cost America’s pig farmer $14 per pig or an aggregated loss of nearly $1.7 billion to the U.S. pork industry alone.

“We are asking the Trump administration to ‘do no harm’ to agriculture when renegotiating NAFTA,” stresses Weber. “For our industry, that means maintaining zero tariff rates on North American trade.”

Pork leaders recognize that NAFTA is not a perfect agreement for all sectors of the U.S. economy. NPPC supports the modernization of NAFTA. However, the organization firmly asks for no tweaks to NAFTA when it comes to pork trade.

KDUZ Radio “Farm Forum”

Dave Ladd, President of RDL & Associates, recently participated in KDUZ Radio’s “Farm Forum hosted by Lester Schuft.  Topics include buffer strips/water quality, land values, international trade, biotechnology and much more.

He was joined by Mark Dorenkamp (Brownfield Ag News),  Kent Thiesse (MinnStar Bank) and Dave Nicolai (University of Minnesota Extension).