Washington Insider- Tuesday

Ag Secretary Rumors

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

GAO: Rising Advanced Biofuels Targets Unlikely to be Met

Several factors have combined to make it unlikely that there can be enough advanced biofuels produced in the U.S. to meet the rising mandates for that category under the Renewable Fuel Standard (RFS), according to a Government Accountability Office (GAO) report.

While there are several advanced biofuels that are "technologically well understood," GAO said exporters noted that of those currently being produced, "there is limited potential for increased production in the near term." Plus, several factors will make it a challenge to boost the speed and volume of production. Given those factors, GAO said it "does not appear possible to meet the targets in the RFS for advanced biofuels under current market and regulatory conditions."

In 2015, GAO noted about 3.1 billion ethanol-equivalent gallons of advanced biofuels were produced, falling short of the statutory target of 5.5 billion gallons in the RFS for that year. By 2022, the advanced biofuels target increases to 21 billion gallons, so production would have to rapidly increase to meet this target.

One bright spot in the situation is biodiesel and renewable diesel, which typically fall under the category of biomass-based diesel in the RFS. They are "among the types of advanced biofuels that are technologically well understood, according to experts, and they are being produced in the largest volumes," GAO said. In fact, GAO said biomass-based biodiesel "is the exception among the categories in that it exceeded its minimum of at least 1 billion gallons for 2015. In 2015, about 1.5 billion gallons of biodiesel were produced, according to EPA."

Arkansas Moves to Mitigate Dicamba Pesticide Drift

The use of dicamba on Arkansas farmland could be restricted in 2017 after the Arkansas Plant Board voted 12-0 to adopt measures designed to limit the spraying of the pesticide to attempt to limit drift to adjacent crops. The regulations now go to the state’s governor for approval.

If approved, the new regulations could serve as a framework for restricting dicamba use in other states. Dicamba drift is on the rise as farmers struggle with an increasing number of herbicide-resistant weeds, and some have resorted to off-label dicamba use or the use of older formulations more prone to drift.

Those practices led to a record number of complaints to the Environmental Protection Agency (EPA) over the summer from farmers whose crops were damaged by their neighbor’s pesticide use.

The new rules would ban the use of dimethylamine salt and acid formulations of dicamba, with an exception for pastures or range land more than one mile in all directions from susceptible crops. Also, diglycolamine salt and sodium salts of dicamba would not be allowed to be used between mid-April and mid-September each year unless the farmland is at least one mile away from any susceptible crops.

BASF’s Engenia herbicide, a dicamba product, could only be used on cotton and soybeans engineered to be resistant if there is a 100-foot buffer zone in every direction, with an additional one-quarter-mile buffer zone downwind of the field where it is applied.

Under the Arkansas regs, farmers who wish to use dicamba would need to complete a training program before they are allowed to apply the pesticide to their crops and would have to maintain records of each application for three years.

Washington Insider: Ag Secretary Rumors

At about this stage of presidential transitions, the incoming president-elect often begins to think seriously about some of the less exciting posts, including ag secretary. Politico reported last week that there is something of a crowd of ag hopefuls and that vice-president elect Mike Pence may well have a significant impact on the eventual pick.

Five of the nine names thought to be the likeliest picks, it said, are Hoosiers, either by birth or business connections. Several have personal connections to the Indiana governor including Chuck Conner who heads the National Council of Farmer Cooperatives; Ted McKinney, the state's top agriculture official; and Don Villwock, the president of the Indiana Farm Bureau who has long advised Pence.

That could bode well for Conner, Politico thinks. He's an Indiana native who grew up on his family's farm in Benton County and came to Washington after graduating from Purdue University in 1980 to work in the office of then-Sen. Richard Lugar, R-Ind.

Conner has been "extremely involved" in Trump's agricultural advisory committee, and played an active role in advising the campaign on trade and immigration issues. In addition, Conner earlier served as deputy agriculture secretary for three years under President George W. Bush, including a six-month stretch as acting secretary after Mike Johanns resigned. He also spent more than a decade as a staff director on the Senate Agriculture Committee and was president of the Corn Refiners Association for more than four years.

Most recently, Conner played a key role in the push for voluntary GMO-labeling legislation, as leader of the agriculture and food industry's national lobbying coalition. The bill passed in July and was considered a win for Conner's coalition, Politico says.

Conner is scheduled to speak next week at the DTN/The Progressive Farmer Ag Summit in Chicago. http://www.cvent.com/…

Still, Conner would be seen as a Washington insider, and possibly less attractive than a more salt-of-the-earth pick from the heartland. The Trump team also has dropped hints that they'd like the leader of USDA to be an actual farmer, a criterion Conner may not meet.

Politico says another prospect may have even stronger ties to Pence than Connor and that’s Ted McKinney, whom Pence in January 2014 tapped as director of the Indiana Department of Agriculture—and, who has worked with the agricultural advisory committee throughout the presidential campaign.

McKinney grew up on a central Indiana farm and graduated from Purdue also the year after Conner. He spent most of his career working for companies associated with "Big Ag" like Dow AgroScience and Elanco. He also has had leadership roles in organizations like the National Future Farmers of America, U.S. Meat Export Federation and the International Federation of Animal Health.

Another candidate with an Indiana connection is Mike McCloskey, co-founder and CEO of Select Milk Producers, the sixth-largest milk cooperative in the Unites States.

Villwock, president of the Indiana Farm Bureau and a farmer from Knox County, told Politico that he and Pence have a close working relationship, and that he has personally advised Pence over the years on agricultural issues.

Politico also mentioned Kip Tom , a seventh-generation corn and soybean farmer in Indiana who ran for an open congressional seat in Indiana's 3rd District but was defeated narrowly in the Republican primary by Jim Banks, who went on to win the general election.

Politico also points to some non-Hoosier candidates who have been vocal lately and cites Charles Herbster, a Nebraska cattle rancher who chairs Trump's rural advisory committee who donated generously and remained loyal to the Trump campaign during its darkest days.

Sid Miller, Texas' agriculture commissioner, also is frequently mentioned, but has been criticized for “showboat antics.” And, former Nebraska Gov. Dave Heineman is listed as an early Trump supporter who earned the endorsement of the Nebraska Farm Bureau in his run for governor, support seen as crucial to winning the post.

The Politico list also includes Sen. Jerry Moran, R-Kan., chairman of the Senate Appropriations agriculture panel, who was reportedly approached about his interest in the position and met with Trump recently but then issued a statement saying he hadn't been "offered" the job, Politico said.

Former Texas Gov. Rick Perry is a rumored contender as is Dale Moore, the American Farm Bureau Federation's executive director for public policy.

So, we will see. At this point, it seems likely that Politico is right and that at least, that the job is likely to go a person with strong links to Midwestern ag. And, given the campaign’s pressure against trade and immigration and the sector’s strong interest in those policies, it will be important for producers to watch with care as the next Secretary is selected, Washington Insider believes.

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