Health-care cooperative becoming a reality (via New Ulm Journal)

In a room filled with 75-plus agricultural producers and insurance representatives, the talk tends to focus on the current insurance crisis facing farmers across the state.

Such was the case Thursday evening at the offices of the Farmward Cooperative in Morgan.

Those in attendance were there to learn about another health insurance option for commodity producers.

Representatives of the newly-formed, but long-planned health-care cooperative called 40 Square were ready, willing and able to present and discuss a new health-care cooperative.

40 Square is a member-owned cooperative formed to assist agricultural producers in working together to help curtail the high cost of health insurance and health care.

Jeff Nielsen, president and CEO of United Farmers Cooperative (UFC), Winthrop, is a driving force in getting the new business off the ground.

“40 Square is a health-care cooperative,” Nielson said. “There is a need for this for farmers in the area. Healthcare is near and dear to your heart. It’s about time we can trust in the health care system. How many of you are good with our health care system today?”

Nielsen knows what he’s talking about when it comes to being a self-insured entity, which is what 40 Square was developed to be. He has been instrumental in keeping the insurance system at UFC as a self-insured system.

It’s working, and Nielsen is passionate about the opportunity being offered to producers of corn, soybeans, milk, meat and other commodities.

He knows there is a need for health insurance reform and believes it will work because “health insurance is the largest concern of the farmers I talk to.”

40 Square is a breath of fresh air for farmers struggling to find health insurance and then having to pay that monthly premium.

“Our rates keep going up,” commented Marge Schroeder, Renville. “Plus living in Renville County, we can’t go where we prefer to go. We cannot go to Mayo in Rochester.”

40 Square does have requirements to become a member-owner.

Members have to produce an agricultural commodity and have at least one common law employee. A common law employee is defined as someone who performs services for a business and that business controls what the person does, and how the person does it. The employer has to instruct the worker on when and where to do the work, what tools to use, where to purchase supplies and also provide the training to successfully complete the job.

Producers must sign up for at least three years.

Producers will purchase stock to become a member of the cooperative. One farm operation would purchase one share and earn one vote under the business structure. Any changes that need to be made will be voted on by the members.

The cooperative will be governed by a board of directors, consisting of ag producers, which would be elected by the voting members.

Because the cooperative is set up as a 308B Corporation, majority ownership must be from the members of the co-op. This means that member owners will control 51 percent or more of the business. The remaining 49 percent can be owned by outside investors.

40 Square members would purchase voting stock up-front for $100, per farm. Common stock, in the amount of $1,000, can also be purchased and can be paid for through the first 12 months of membership. The initial buy-in dollars will be placed into a trust.

“Those funds cannot be taken out of that trust for cooperative services,” Charlene Vrieze, project manager with 40 Square, said.

The trust would be set up to only cover claims placed by members. Business expenses will be covered by outside investors.

Vrieze has also been deeply involved with getting the concept of a health-care cooperative turned into an actuality.

“In Minnesota, we had to pass three pieces of legislation to proceed with our plan for 40 Square,” Vrieze said. “It’s been a long regulatory road.”

Terri Moxley, senior sales specialist with EBSO, explained how EBSO would assist as a third party manager of the business. (EBSO offers assistance “with management of an array of self-funded and fully insured benefit plans and products.”)

“We would make sure the plan is working and how we can change the plan to enhance it,” Moxley said. “The plan becomes tailored to those that are using it.”

Area producers would need to get in touch with their local insurance agents and accountants to pencil out the best option for their operation.

Also in attendance was Bob Skillings, a financial advisor with South Point Federal Credit Union, with an office in New Ulm. He’s excited to jump on board and help farmers decide what will work best for them.

“Hopefully this will be a good solution for farmers,” Skillings said.

Coverage under this new system begins with open enrollment starting Wednesday, Nov. 1, 2017 through Friday, Dec. 15, 2017. Coverage will begin Jan. 1, 2018 for those who chose to participate during open enrollment.

Interested individuals can also learn more and request information at 40square.coop.

 

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Opinion: Pruitt, stick to Trump’s winning Renewable Fuel Standard plan (The Hill)

It has been well documented that rural America provided President Trump with his margin of victory. Indeed, 90 percent of the corn grown and 94 percent of the ethanol produced come from counties that voted for Donald Trump last November. While there were many factors, Trump’s consistent and enthusiastic support for ethanol and the Renewable Fuel Standard (RFS) were critical.

Trump’s support for the RFS has continued into his presidency, as he has maintained his vocal advocacy for ethanol and the administration has been aggressive in pushing back against trade barriers to U.S. biofuels and seeking input on regulatory reforms that would open a new era of investment and expanded market opportunities for American biofuels.

But the president’s vision for an America First energy policy that includes energy produced above the ground as well as below does not seem to be shared by his EPA Administrator Scott Pruitt. Over the past several weeks, Pruitt’s agency has proposed a reduction in the overall RFS (even after an inter-agency review approved a slight increase in the program), issued a Notice of Data Availability seeking comment on further reductions to the program under the specious justification that potentially lower imports should be reflected by a lower volume obligation.

Now there is further talk of lowering demand for ethanol by allowing oil companies to count ethanol exports as part of their RFS obligations, even though the program was designed to spur domestic biofuels consumption.

Apparently, Pruitt, whose political aspirations in his home state of Oklahoma are becoming more well-known, has not gotten the memo from the White House that the RFS is to be protected and allowed to grow the market for biofuels, while providing consumers with more choice and savings at the pump.

The driving force behind these “adjustments” to the RFS appears to be the administrator’s desire to lower the price of Renewable Identification Numbers (RINs), the credits used by obligated parties to ease RFS compliance. Oil companies who blend more than their renewable fuel obligation are able to trade credits to those companies not meeting their obligation with physical gallons of renewable fuels.

Not surprisingly, oil companies with surplus RINs don’t want changes to the program because they have a valuable asset. Oil companies that are short on RINs are looking for any number of ways to reduce their cost of compliance. Importantly, this is the very definition of inside baseball, because consumers never see an increase or a decrease in the price of gasoline based on the price of RINs. Simply put, for every gallon of gasoline sold to a consumer using a RIN for compliance, there is an oil company whose costs have been lowered by selling the RIN. RIN sales do not impact consumer gasoline costs.

Nevertheless, Pruitt has been looking for ways to accommodate those oil companies who are short on RINs, at a potential cost to those companies who made the investments allowing them to blend more biofuels than required.

So, how does he make both sides of the oil company divide happy? He proposes to lower the overall RIN obligation. Lowering the RFS to accommodate potentially fewer imports doesn’t drive investment in domestic energy; it lowers the cost of RINs. Allowing oil companies to count gallons of exported ethanol toward their RFS obligation doesn’t expand the market for ethanol; it artificially increases the supply of RINs and, again, abrogates the intent of the RFS.

If Pruitt wants to lower the price of RINs without cannibalizing the existing biofuels industry, there is a simple solution. Allow the biofuels market to grow, meaning more physical gallons of renewable fuel would be available for compliance and RIN values would fall. That’s what the RFS was supposed to do in the first place. And the easiest and most effective way to encourage more ethanol into the market would be to allow the use of E15 year round. EPA could simply extend the existing volatility waiver available today to only 10-percent ethanol to blends of 15-percent, 20-percent, or 30-percent blends. That would be consistent with the RFS, consistent with the administration’s objective of repealing outdated regulations that hamper growth and would empower consumers to make the correct fuel choice for their vehicle and their wallet.

Ethanol is cheaper than gasoline today. More than 90 percent of the vehicles produced sold today are fully warrantied for higher than 10-percent ethanol. And refiners looking to lower their cost of compliance with the RFS could do so easily. It seems like a win, win, win.

Mick Henderson is the general manager of Commonwealth Agri-Energy LLC, which operates a 35-million-gallon per year ethanol plant in Hopkinsville, Kentucky. Henderson is also chairman of the Renewable Fuels Association board of directors.

KDUZ Radio: Farm Forum

Dave Ladd, President of RDL & Associates, was recently a guest on KDUZ Radio’s “Farm Forum”.  He was joined by Bob Worth, Minnesota Soybean Growers Association and Mark Dorenkamp, Brownfield Ag News.

Topics included; buffer strips and conservation, federal tax reform, the North American Free Trade Agreement (NAFTA), and exports.

Dave Ladd formed RDL & Associates to assist clients seeking solutions to public policy issues, strategic communications and grassroots engagement.  He is also a Co-Founder of Heartland Advocates, which offers a team approach to help an organizations manage their political capital by engaging stakeholders and policymakers throughout the United States.

 

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

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.