Radio Interview: Energy Legislation, GMO Labeling and Iowa Caucus

Dave Ladd, President of RDL & Associates was recently a guest on the Linder Farm Network to provide brief overviews of the Senate Energy Bill, GMO Labeling and the Iowa Caucus.  The audio clips can be accessed via the following links:

Senate Energy Bill: https://soundcloud.com/rdl-associates/linder-farm-network-senate-energy-bill-2016

GMO Labeling: https://soundcloud.com/rdl-associates/linder-farm-network-gmo-labeling-january-2016

Iowa Caucus: https://soundcloud.com/rdl-associates/linder-farm-network-iowa-caucus-2016

For additional information, please contact RDL & Associates at (651) 247-5458 or via daveladd66@gmail.com.

Al-Corn Clean Fuel’s Position Within a Changing Ethanol Marketplace

If you are involved in agriculture, you know the sector is not immune to the up-and-down cycles of the marketplace.   Domestic and global market demands, weather, public policy decisions and the political environment are but a few of the variables that can impact a producer’s bottom line.  That is why there is great value in the cooperative model for agricultural producers. The processing of members’ corn adds significant value to their crop.

In 1994 the ethanol industry in the United States was producing approximately one billion gallons of ethanol per year. Fuel ethanol was a niche market at that time, finding its way into local markets. It was not in use much outside the Midwest and the total volume of ethanol being used amounted to less than 1 percent of the nation’s gasoline demand.

Fast forward to today and you find that domestic use of ethanol in our gasoline supply is at that 10 percent level. That means that practically every gallon of gasoline sold in the United States is a 10 percent blend with ethanol. Our current gasoline demand in the United States is approximately 138 billion gallons per year. That creates a domestic demand for ethanol of roughly 13.8 billion gallons. The constructed capacity of the conventional ethanol industry in the United States is 15.5 billion gallons, and growing.

By the time 2017 rolls around, it is likely that the ethanol industry will have a constructed capacity in excess of 17 billion gallons per year.

We have just come out of one of the most profitable period in ethanol’s history. Debt is down, lenders are a bit friendlier, and management and boards have matured and learned. We have also come through a couple of periods of consolidation of ownership, so the industry is currently in fewer hands. This means a previous decision to expand capacity would affect only one facility where today that could be five, ten, or more.

That is why there is great value in owning ethanol plants for agricultural producers. Domestic and global market demands, weather, public policy decisions and the political environment are but a few of the variables that can impact a producer’s bottom line.

Furthermore, the added value produced by ethanol plants is of definite benefit to the customer-owners of the organization and the local community benefits when farmers spend the money on goods and services.

Al-Corn Clean Fuel, a farmer-owned ethanol production cooperative located in Claremont, MN, is one such example. Since its founding in 1994 with an initial membership base of 50, the cooperative now has approximately 470 members who recognize the value of diversifying their operation.

The cooperative was created when depressed corn prices drove local farmers to seek new opportunities to add value to their corn crop. Similar to other agricultural cooperatives, members of Al-Corn Clean Fuel invest financially but also agree to deliver a quantity of corn determined by their investment in the business. This “corn commitment” has been a key contributor to success of the cooperative.

For the past two decades, Al-Corn Clean Fuel’s model has allowed for development of a firm business foundation based on success, a strong cash position and investments that add value for members and their communities and resulted in competitive returns.

The Claremont plant was designed to produce 10 million gallons per year, which meant that our production equaled approximately 1 percent of the total U. S. ethanol volume going to market. As our industry has grown and evolved, however, Al-Corn Clean Fuel has been an active participant in finding ways to increase domestic demand.

Not only has Al-Corn Clean Fuel grown its capacity at the Claremont facility, it has added additional capacity via wise investments in other ethanol facilities. At present those outside investments are generating as much as 40% of the cooperative’s total net annual income.

In addition to the 17.5 million bushels of corn that are ground and 50 million gallons of ethanol that are produced annually, the cooperatives revenue stream for member-owners extends beyond the corn field via the marketing of co-products.

The Claremont plant produces 132,000 tons of high protein livestock feed, 12 million pounds of corn oil and 70,000 tons of beverage grade carbon dioxide. The majority of these products are consumed by refiners, livestock feeders, meat packers and biodiesel producers throughout Minnesota.

Al-Corn Clean Fuel continues to utilize the best available control technologies in order to reduce energy consumption and production costs while at the same time increasing efficiencies and reducing emissions.

In addition, the Claremont plant has reduced water consumption to less than 2.4 gallons of water per gallon of ethanol and was the first plant to achieve “zero liquid discharge”. In addition, energy conservation efforts have reduced the plant’s energy use by more than 35% compared to the original plant design.

Al-Corn Clean Fuel continues to play an important role in the economic viability of agriculture and rural communities throughout the region. The cooperative remains sound as it continues to successfully add value to the corn delivered by its member-owners, as well as seeking new and innovative ways to enhance revenue and reduce costs.

For additional information regarding Al-Corn Clean Fuel, please contact Randall Doyal at RDoyal@al-corn.com or visit al-corn.com.

 

 

Commentary: Improving Water Quality; We are all in this together

What do residents of urban areas, the business and manufacturing, and the agriculture sector have in common? Each plays a pivotal role in enhancing water quality.

There are two primary sources of water impairment; point and nonpoint. Point source pollution can generally be described as coming from a single, discrete place such as a pipe.

Nonpoint sources refer to both water and air pollution from diffuse sources. It can be difficult to control because it comes from the everyday activities of many different people, such as fertilizing a lawn, using a pesticide or constructing a road or building.

Atmospheric inputs of pollutants into the air can come from multiple sources. Emissions from industrial facilities, generally regarded as a point source, can also be considered as a nonpoint source due to the distributional nature.

Due to the large amount of paved surfaces, urban areas are primary sources of nonpoint source pollution. Asphalt and concrete keep rainwater and water from snowmelt from percolating into the ground. Our roads, sidewalks, driveways, parking lots, swimming pool decks and rooftops – even our automobiles – carry pollutants into the surrounding soil that are absorbed by the watershed.

Typically, in suburban areas, chemicals are used for lawn care. These chemicals can end up in runoff and enter the surrounding environment via storm drains in the city. Since the water in storm drains is not treated before flowing into surrounding water bodies, the chemicals enter the water directly.

Porous pavement allows for rain and storm water to drain into the ground beneath the pavement, reducing the amount of runoff that drains directly into the water body. Restoration methods such as constructing wetlands are also used to slow runoff as well as absorb contamination.

Buffer strips can provide a barrier of grass between impervious paving material such as parking lots and the closest body of water. Retention ponds in drainage areas create an aquatic buffer between runoff pollution and the aquatic environment.

The business and manufacturing sectors also face water quality challenges.

Federal and state laws exist that require permits that place limits on many types of businesses, cities and industries. These laws require that water that from these sources is treated in modern wastewater treatment facilities that remove pollutants from wastewater so that the water is safe enough to put back into nearby rivers and streams.

Wastewater that comes from our homes, businesses, and industry is transported via miles and miles of pipes to wastewater treatment plants. State-of-the-art technology is used to clean the water and insure it meets federal and state water quality standards.

Agricultural practices also account for a percentage of nonpoint source pollution. Exposed soil is more vulnerable to erosion during rainstorms and can increase the amount of fertilizer and pesticides carried into nearby bodies of water.

The agriculture sector recognizes that there is always room for improvement as it continues to build upon its success in addressing water quality issues.

New ideas and technologies are constantly being tested. For example, in Minnesota and Wisconsin, the Green Star Farms Initiative challenges farmers and those who advise them on farming practices to think critically about both agricultural production and resource protection.

Best management practices utilized by farmers and ranchers to prevent the loss of sediments, nutrients, and pesticides from working lands have led to improved water quality, less soil erosion, enhanced soil quality and an increase in wildlife habitat.

Advancements in crop science allow for the matching of farming practices more closely to crop needs, with the end result being a significant reduction in the amount of nutrient and other crop inputs.

Utilization of no-till farming, whereby farmers cultivate crops without tilling their land, prevents soil erosion and dramatically reduces carbon dioxide emissions. It is estimated that no-till farming enabled by effective weed control has already reduced carbon-dioxide emissions by nearly 15 million pounds.

Simply stated, human activities related to different land use and land-management practices have an impact on the water quality of a community. The underlying challenges in addressing water quality are as diverse as the solutions.

It is worth noting that both the Environmental Protection Agency (EPA) and the Minnesota Pollution Control Agency (MPCA) continue to pursue ill-conceived, regulatory efforts designed to protect Minnesota’s waters.

Further complicating the issue is that many of the new requirements being placed upon our cities, businesses and the agricultural sector are being imposed without following legally-required public input procedures or a full analysis of economic impacts. Left unchecked, these actions will cause wide-spread municipal, manufacturing and agricultural expenditures that are unrelated to actual water quality needs.

The entire state of Minnesota would benefit greatly from scientific peer review via a panel of qualified scientific professionals who are not currently employed by the MPCA or the EPA. The results of these reviews should be made available for public review and comment prior to final action on proposed rules and regulations.

It is not realistic to single out a particular community or sector of the economy. To do so would be unfair, inaccurate and it won’t address the problem. Even if we were to do so, we would still be sending too much pollution into the watershed and it would still be impaired.

Everyone who lives and works in a watershed contributes to the quality of water within that watershed. Everything they do has an impact downstream.

When it comes to improving water quality, we are all in this together.

Dave Ladd is President of RDL & Associates, a government relations and strategic communications firm based in Apple Valley, MN.   He can be reached at daveladd66@gmail.com.

2016 Dairy Outlook: ‘Hunker Down’ (via Jim Dickrell)

Dairy farmers should be prepared for an extended period of low margins, likely exceeding beyond the first half of 2016.

That’s pretty much the consensus view of a panel on the dairy market presented at the 2016 Dairy Strong Conference sponsored by the Dairy Business Association here in Madison, Wis. this week.

“I would love to tell you we’ll see a [recovery] by the second half of the year,” says Mary Keough Ledman, a dairy economist with Keough Ledman Associations.  But that’s not likely to happen, and if it does, it might only be a cheese market rebound to $1.65 to $1.80/lb, which would translate to $16.50 to $18/cwt Class III prices.

“I’m not talking about $1.90 to $2 cheese, and a whey price (currently less than 30¢/lb) at 50¢/lb.,” she says. Those types of prices are required to get to levels seen in 2014, and they’re not likely to happen anytime soon due to the more than ample milk supply in cheese producing regions.

In November, income-over-feed-cost margins were about $10 the Midwest and New York, $9 in Idaho and $8 in California. Come February and March, those margins will likely erode $2 to $3/cwt.  So Ledman’s advice to dairy farmers is pretty simple: “Hunker down. And I would not put one more cow onto your operation until I ask my milk buyer if he has room for her production.”

Those views were shared by Bob Witt, a senior dairy lender with Wells Fargo and David Rinneard, a regional sales manager with BMO Harris Bank.

Witt, who has about 20% of his clients in California and the Southwest, says conditions there are worse than in the Midwest. “If you’re in the Southwest, the basis (the difference between the producer mailbox price and Class III) ranges from -$1 in times of milk surplus to 50¢/cwt when milk supplies are tight. Right now, they are negative, and the losses of 2015 are stretching into 2016,” he says. “We’re in for a couple of tough years.”

In 2016, clients will start to see equity erosion, says David Rinneard, regional sales manager with BMO Harris Bank. “Risk management will be fundamental to success,” he says. At the same time, he has some clients who are planning moderate expansions in 2016.

“They’ve planned for expansion, and they’ve squirreled away cash the last two years to make it happen,” he says. But with lowered milk price expectations, some might shelve those plans for 12 to 18 months.

The article can be accessed here: http://www.agweb.com/article/2016-dairy-outlook-hunker-down-naa-jim-dickrell/

Jim Dickrell was named editor of Dairy Today in 1989 and associate publisher in 2007, and is based in Monticello, MN, northwest of Minneapolis.

Media Release: US Poultry Producers Outline Possible Economic Benefits of TPP (via National Chicken Council)

U.S. poultry producers today used a U.S. International Trade Commission (USITC) hearing to both express support for the Trans-Pacific Partnership (TPP) and to highlight mixed experiences with past free trade agreement negotiations.

National Chicken Council President Mike Brown, on behalf of NCC and the USA Poultry & Egg Export Council (USAPEEC), delivered testimony this morning at a USITC hearing addressing the likely economic impact of the TPP on the U.S. poultry sector, should the deal be fully implemented.

The TPP is trade agreement between Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Negotiations concluded last November, and now the agreement must be ratified by each country and, in the U.S., debated and passed by Congress.

Both NCC and USAPEEC have supported TPP, continuing 30 years of unwavering support for free trade and trade liberalization initiatives. Though the U.S. poultry industry has been in support of free trade, the industry’s experience with the results of free trade agreement negotiations has been mixed. During past negotiations, poultry has often been denominated a “sensitive product” and typically receives less-favorable access than other products.

Brown stressed that poultry once again faced mixed results in the TPP negotiations. “Our very frank assessment of the TPP provisions is that this agreement, on its current terms alone, will provide opportunity for moderate improvement for U.S. exports of poultry products in three of the 11 markets,” Brown said.

A key point is the lack of meaningful increases in access for U.S. poultry to Canada. “While virtually all other commercial sectors have been able to play the NAFTA game for the past three decades, U.S. poultry has been relegated to the sidelines,” he added. Under TPP, U.S. poultry’s access to the Canadian market will only grow through small increases in quotas over a long period of time rather than truly free trade. “The TPP was the opportunity to correct a 30-year-old mistake, and very frankly, the results of this negotiation are disappointing in that regard,” Brown told the commission.

Brown also took the opportunity to thank USTR for its tremendous effort on behalf of all agriculture; especially its work in developing improved sanitary and phytosanitary (SPS) provisions. These could provide the initial boost needed to place more emphasis on SPS in all trade discussions.

As the 2015 outbreak of highly pathogenic avian influenza (HPAI) in the U.S. showed, SPS barriers can cause great damage to trade. Though the HPAI detections were regional and contained, some trading partners placed bans on poultry from the entire United States for much longer than justified. During the first 10 months of 2015, unjustified non-tariff trade restrictions cost the poultry and egg industry over $3.3 billion in lost income.

Brown also pointed out key moderate improvements afforded through TPP. “Our assessment is that TPP will allow us to make some modest inroads in Japan and hopefully in Vietnam; but we do not believe the TPP, as currently negotiated, will provide our industry with any actual market access in Malaysia.”

The United States exported $128 million of poultry and poultry products to Japan in 2014. Japan’s tariffs are currently as high as 21.3 percent, or 48 yen per kilogram, whichever is greater (approximately 24.1 percent ad valorem equivalent). Under the TPP agreement, tariffs on all poultry, eggs, and egg products will be eliminated in six to 13 years.

The United States exported $92.7 million of poultry and poultry products to Vietnam in 2014. Vietnam’s tariffs on poultry and poultry meat, currently as high as 40 percent, will be eliminated within 13 years. This includes tariffs on frozen chicken cuts and offal, which will be eliminated in 11 years.

Brown concluded, “We are wholeheartedly supporting TPP, as we did all the other free trade agreements and fully support passage and implementation by Congress.”

Brown’s full testimony as submitted to the USITC, which includes comments on turkey and egg exports, can be read here.

2015 Year in Review

Dave Ladd, President of RDL & Associates was recently a guest of KTLF Farm Director Scott Colombe for a “2015 Year in Review”, as well as the outlook for agricultural issues in 2016.

The interview is 20 minutes in length and can be accessed here: https://soundcloud.com/rdl-associates/ktlf-radio-2015-year-in-review.

For additional information, please contact RDL & Associates at daveladd66@gmail.com or (651) 247-5458.

Guest Commentary: Water quality summit should focus on collaboration

Minnesota Gov. Mark Dayton recently called for a statewide water quality summit to take place sometime in early 2016. Since agriculture is likely to be a focus of the summit, I’d like to take this opportunity to highlight a few of the farmer-driven efforts to improve our state’s water quality, and share what I hope to see take place at the summit from a farmer’s perspective.

I’ll be the first to admit that as farmers, we haven’t done a very good job talking about our conservation efforts. That needs to change. Today’s consumers not only care about where their food comes from, they care about the practices used by the farmers who grow it.

On a personal level, I use several common conservation practices also used on most Minnesota farms. These include grass waterways to reduce soil erosion and buffer strips to keep nitrogen fertilizer and other nutrients that could run off my fields during heavy rains from entering nearby waterways.

By implementing these practices, I’m helping protect water quality in the community where I not only operate our farm, but also raise a family. Furthermore, inputs like nitrogen fertilizer are expensive. I want any fertilizer I apply to be used by the plant, not washed away into the ditch.

On a larger scale, I’m proud to address agriculture and water quality through my role as President of the Minnesota Corn Growers Association (MCGA). Together with the Minnesota Corn Research & Promotion Council, MCGA supports innovative research through institutions like the University of Minnesota that seek solutions to water quality problems. Corn farmer-funded research also helps farmers better manage their use of nutrients and improve our soils.

Through Minnesota’s corn check-off – a voluntary one-cent “fee” paid by farmers on every bushel of corn sold to market – corn farmers support about $4 million in research projects and initiatives that address water quality, soil health and other conservation issues. The corn check-off also supports faculty positions at the University of Minnesota that focus on farming and water quality. Other commodity check-offs support similar efforts.

I’m sharing my perspective not to boast, but to ensure that the voice of the farmer is heard in the ongoing discussion of agriculture and water quality. Too often, farmers’ voices fail to rise above the racket of political rhetoric and finger-pointing, which brings me to the governor’s water quality summit.

As a farmer, I hope that the summit is an opportunity for everyone to come together and talk about solutions to water quality. I’ve talked a lot about farmer-led efforts to address water quality, but I’ll be the first to admit that farmers are not perfect. When it comes to water quality, we can do better, and we’re working every day to improve.

Speaking of improvement, a recent report from the Minnesota Pollution Control Agency showed reductions in five of seven pollutants found in Minnesota waterways over a 30-year span. As a farmer, I work every day to increase my knowledge of good farming practices, take advantage of technological advancements and use the latest research to become a better steward of land, soil and water resources.

I know there are plenty of non-farmers out there doing the same. Yes, we might disagree on a few things, but we all share the same goal: improving water quality in Minnesota.

Let’s make sure the summit is an opportunity for everyone to work together. Minnesotans are sick of political rhetoric and name-calling. They want to see people working cooperatively and thoughtfully to achieve real-world solutions.

Improving our state’s water quality might seem like a daunting task, but we’re making progress and on track to make further improvements. Here’s hoping the governor’s water quality summit puts us on a collaborative path toward additional progress.

Noah Hultgren is a family farmer in Raymond, Minn., and serves as president of the Minnesota Corn Growers Association.

What is your game plan for success? Let RDL & Associates help you cross the goal line.

Organizations and trade associations that understand the importance of strategic communications and/or government relations want to be well-organized, with a solid game plan that can be activated as the situation warrants.

RDL & Associates specializes in government relations, policy development and analysis, strategic communications, message development and delivery, coalition development and online outreach.

If your company or organization is giving serious thought to enhancing your current efforts or developing a management plan for your policy and political capital, RDL & Associates would welcome the opportunity to assist you in developing a successful game plan.  A strategic and tactical communications and government relations game plan allows for an organization to effectively hit the ground running at the federal, state and local levels of government and across business sectors.

This includes preliminary groundwork within the legislative and executive branches of government so that elected officials and regulatory decision makers are well aware of the organization, as well as its mission and agenda, prior to full implementation of a strategic plan.

State lobbying and federal lobbying are not mutually exclusive and the strategic partnerships developed by RDL & Associates allows for seamless legislative representation for our clients.

Working with our strategic partners, including firms headquartered in Washington, D.C. and St. Paul, MN, we have the capacity to integrate federal and state lobbying, public affairs and communications services in a bipartisan fashion so as to provide cost-effective strategies for our clients.

Our collaborations provide for a true team approach and create additional opportunities and efficiencies for our clients.  Combined, our firms have over sixty years of legislative, regulatory and political experience.   As such, RDL & Associates provides a distinctive advantage at the federal, state, and local level.

Developing such an effort does not have to be cost-prohibitive.  The fee structure of our can be negotiated so that it best reflects the work expected of RDL & Associates and your organization’s internal budget for such work.

If RDL & Associates might be helpful in developing a government relations effort for your organization, we would welcome the opportunity to speak with you and your colleagues as your schedules permit.

Dave Ladd, President of RDL & Associates, can  be reached at (651) 247-5458 or via e-mail at daveladd66@gmail.com.

We thank you in advance for your consideration.