Top 10 Ag News Stories of 2018 - Best of the Rest
OMAHA (DTN) -- Anyone who's ever operated a combine knows what happens when they fill the hopper just a little too full: Grain spills over the side and rains down on the roof of the cab. Farmers even have their own terminology for this phenomenon -- "cab corn."
Scan farmers' social media accounts during harvest and you'll likely run across photos with the hashtag #cabcorn showing combine cabs topped with small mounds of corn, along with various explanations of how it happened and who's to blame.
Something similar happened when DTN reporters and editors were harvesting this year's bountiful crop of stories for our annual Top 10 Ag News Stories of the year series. We kept filling our 10-story-capacity hopper with more and more ideas, until ... a handful of news kernels spilled out onto the roof of our newsroom cab.
Among those kernels were stories such as the ethics controversies surrounding former EPA Administrator Scott Pruitt, the midterm election that resulted in a shift of power in the U.S. House of Representatives, and the finalization of mergers between some of the biggest seed and ag chemical companies.
Like most farmers, we hate to see any of our hard-earned crop go to waste, so we gathered up our pile of cab-corn stories and binned them here:
-- Mega Mergers, Acquisitions Wrap Up
This year saw the conclusion of a number of mega mergers and acquisitions among seed and agrochemical companies.
Hot on the heels of the May 2017 close of ChemChina's purchase of Syngenta, DuPont Pioneer and Dow AgroSciences finalized their merger in September 2017. But it was February 2018 before DowDuPont announced Corteva Agriscience as the name of its new agricultural division, and Corteva will not formally spin off as a separate company until June 2019. This new agricultural behemoth holds a sizeable portfolio of herbicides, fungicides, insecticides and seed in 11 different crops, including corn, soybeans, cotton and wheat. That includes Enlist corn, cotton and soybeans, and high-oleic Plenish soybeans.
In the meantime, Bayer completed its $63 billion acquisition of Monsanto in August 2018, after selling much of its seed and chemical holdings to BASF in order to absorb Monsanto's portfolio of herbicides, seed treatments, biologicals and seed for eight different row crops and 22 vegetable species. Bayer also inherited ongoing litigation over Monsanto products like glyphosate and dicamba and announced in November that it will be cutting 12,000 jobs.
-- Scott Pruitt's Rocky Reign as EPA Administrator
When embattled EPA Administrator Scott Pruitt resigned in early July after months of ethics controversies, there was a mixed bag of reactions from farming country.
Pruitt had become a villain of sorts in the eyes of biofuel producers and some farmers. They watched in horror as reports surfaced that his agency had approved 48 small-refinery waivers to the Renewable Fuel Standard, totaling 2.25 billion gallons in 2016 and 2017, and that EPA was apparently slow-walking the approval of year-round E15 sales. Conversely, Pruitt was lauded by leaders in rural America for his actions to end the 2015 waters of the United States, or WOTUS, rule and replace it with a rule that was much less far reaching in farm country.
In his stead, President Donald Trump appointed Andrew Wheeler as EPA acting administrator. Unlike Pruitt, Wheeler has stayed out of the headlines as he attempts to repair any agency damage done in rural America. Wheeler dialed back on small-refinery waivers, announced intentions to finalize an E15 rule in 2019, and recently released a proposed rewrite of WOTUS.
-- House Flips to Dems, GOP Hold Senate in Midterm Elections
The midterm elections gave President Trump an opportunity to stump across the country as he held 42 rallies leading up to the November election. His rallies helped Republicans hold the U.S. Senate as the GOP increased its Senate hold by two seats -- Indiana and North Dakota -- to a 53-47 majority. But with a focus on health care, the House of Representatives flipped dramatically in Democratic favor as Democrats picked up 40 seats and will hold a 235-199 advantage going into 2019 (a North Carolina race has yet to be called because of allegations of election fraud).
The dynamics mean the Trump administration will face significantly more oversight moving forward. The election also will shake up the House Agriculture Committee, as Democrats will control it, giving more leverage to new suburban House members who will likely hold seats on the committee with a stronger emphasis on nutrition programs as a result.
-- Land Prices on Shaky Ground
As 2018 came to a close, cropland value projections were anyone's guess. Most analysts were willing to predict no more than 5% to the downside, making a case that it is even possible to see a 5% upside. That position, a minority view, was based on the idea that there could be a strong resurgence in exports and a resulting flurry of positive trade announcements.
"I honestly believe if we could remove some of the uncertainty in the land market and see grain prices rebound a little, we could be steady to 5% up, said Hertz's Kyle Hansen, who categorized his outlook as cautiously optimistic. He allowed that prices in his area could decline as much as 5% if tariff wars continued and commodity prices didn't improve.
Cobank's Tanner Ehmke said he believed given the consecutive record years in yield America's producers have seen, it would take more than an improvement in trade to change the direction of land prices. He characterized the land market as being in a period of downward pressure, and feared growing Chapter 12 bankruptcies would compound problems.
"I just don't see farmers getting the financial break they need right now," he said. "While high yields have kept a lot of farmers in business, in many situations they are hanging on by a thread. I think many of them are going to have to resort to more borrowing and this will come at a higher cost."
Probably the most positive outlook came from Steffes Group's Tim Meyers. He believed there could be a 10% to 15% increase in the Midwest land market if trade issues are ironed out. And he added, even if some farmers are selling, others will be buying.
"Farmers with good equity positions are still very interested in the farm across the road, and will compete to buy it. For them we may be moving into a period of opportunity," he said.
-- Food Companies, Livestock Groups and Government Agencies Chew Over Lab-Grown Meat Labeling, Oversight
Watching major food companies such as Tyson and Cargill invest in plant-based proteins and meat grown in labs, livestock groups moved in 2019 to secure definitions of "meat" and "beef" on both the state and national levels. A petition to USDA sought to prevent lab-based proteins from using the terms meat or beef to define their products.
As the year went forward, more debate arose over whether USDA or the Food and Drug Administration would have oversight over these products. Late in the year, USDA and FDA came together to say each agency will have some role regulating and inspecting protein products grown in labs. Arguments continue over exactly how these products eventually will be marketed to consumers.
-- Detours on the Road to Enforcing the Electronic Logging Device Mandate
The electronic logging device (ELD) mandate went into effect on Dec. 18, 2017, but it remained a contentious issue among many trucking groups throughout 2018. An ELD is electronic hardware that is attached to a commercial motor vehicle engine to record driving hours.
One issue with the mandate has been that smaller, independent truckers would incur expenses they cannot afford. On top of that, the ELD mandate is intertwined with the Hours of Service (HOS) rule because, once the allotted time allowed a trucker ends, the device will show that any further movement is in violation. This is a concern to truckers who transport livestock and live insects.
Mike Steenhoek, executive director of the Soy Transportation Coalition, told DTN: "Many are arguing that those small businesses who have a track record of safety, who maintain a paper record of their operations should not have to incur such a cost. There is a concern that this mandate could drive certain small trucking firms out of business, which will reduce the capacity and amount of competition within agricultural shipping."
In a news release on March 13, the Federal Motor Carrier Safety Administration (FMCSA) announced an additional 90-day temporary waiver from the ELD rule for "agriculture-related transportation." Then, on May 22, 2018, a bill titled the "Transporting Livestock Across America Safely Act (TLAAS)" was introduced. The bill seeks to ease the burden of "far-reaching" HOS and ELD regulations for haulers of livestock and insects.
Later in the year, on Dec. 7, the FMCSA published denials in the Federal Register to 10 different ELD mandate exemption requests, including the Owner Operator Independent Drivers Association (OOIDA), which had requested a five-year exemption from the ELD mandate for "certain motor carriers considered to be a small transportation trucking business." However, there are some ELD exceptions already published for short-haul operations within a 100 air-mile radius and agricultural operations within a 150 air-mile radius. As far as a complete exemption for other agriculture shippers, that expired June 18.
Then, on Dec. 14, the FMCSA announced that transporters of livestock and insects are not required to have an ELD. The statutory exemption will remain in place until further notice. Drivers were told they did not need to carry any documentation regarding this exemption.
Several bills were introduced in Congress in 2018 that would revise the Hours of Service rule. The FMCSA issued an advance notice of proposed rulemaking on Aug. 23, listing four specific areas in which the agency is considering changes. Heading into 2019, there is still no final decision on what, if any, changes will be made to the HOS rules, which in turn would affect the use of ELDs.