Weekly Digest: EPA seeks emissions reporting delay

Progressive Dairyman Editor Dave Natzke Published on 09 August 2017

Digest Highlights: EPA petitions for farm emissions reporting delay. California takes another step in creating federal order. Texas adds CAFOs to drone protection statute. Find a summary of these and other news here.

EPA petitions court to delay farm emissions reporting requirements

The U.S. Environmental Protection Agency (EPA) filed a motion seeking a delay on a court order requiring livestock farms to report emissions under two federal laws. The delay would also give farmers and their organizations more time to appeal the decision to the U.S. Supreme Court, according to the Husch Blackwell law firm’s Food & Ag Law Insights blog.

In April, the U.S. Court of Appeals for the District of Columbia (Waterkeeper Alliance v. Environmental Protection Agency), removed reporting requirement exemptions included under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and Emergency Planning and Community Right-to-Know Act (EPCRA).

Read: Court ruling lifts livestock operation exemptions for emission reporting requirements

Two substances included under the reporting requirements – ammonia and hydrogen sulfide – are emitted during decomposition of livestock manure. Reportable quantities for ammonia and hydrogen sulfide were set at 100 pounds per day.

While lifting the exemption, the court noted there is currently no determination of how on-farm emissions should be measured. It is unclear how farmers are expected to know whether their emissions are above reportable quantity, or how they are to measure them for reporting.

In requesting the stay, EPA said farmers from all over the country have asked for help in calculating their emissions. The stay is needed so the agency can develop guidance on how to measure emissions from animal waste and comply with the new reporting requirements.

If the stay is issued, farms will have until January to come into compliance with the reporting requirements. A stay would also provide farms relief from enforcement actions and penalties while they come into compliance.

Without the stay and petition for appeal, the reporting requirement is effective Oct. 1 for approximately 63,000 U.S. farms, according to Husch Blackwell estimates.

Also read: DC Circuit Court: Farms Must Report Air Emissions, Exemption Unlawful

California FMMO moves a step further

Procedural steps leading to the potential creation of a California federal milk marketing order (FMMO) continue.

In recommending a proposal for a California FMMO, the USDA left administration of a unique state quota program to the California Department of Food and Agriculture (CDFA). California’s Producer Review Board (PRB) has met throughout the summer to develop draft language for a stand-alone quota plan.

One challenging issue dealt with milk assessments and payment amounts to quota holders, according to Geoff Vanden Heuvel, California Milk Producers Council board member and economics consultant. The PRB approved an initial payment rate at 38 cents per hundredweight (cwt), giving the state secretary of agriculture the flexibility to review and adjust payments as needed. The PRB also called for a producer survey every five years, seeking input on how the stand-alone quota program is functioning.

Approved at the meeting in early August, the draft language is now open for public comment until Aug. 30, with any revisions reviewed by the PRB at its next meeting, Sept. 12.

Once approved by the PRB, the plan must be approved by CDFA and presented to California dairy producers for a vote, possibly in October or November. The plan only goes into effect if California producers also separately approve establishing a California FMMO.

Dean’s milk challenges grow

Increasing competition and retail price wars in a declining fluid milk sales market cut into quarterly profits for Dean Foods, company officials told stockholders, Aug. 8

Second-quarter 2017 sales of all Dean products totaled 615 million gallons, a 2.7 percent decline from the same quarter a year earlier. Sales of its branded white milk, DairyPure, declined 6 percent.

Dean’s share of the U.S. fluid milk market, at 32.4 percent, declined 30 basis points year-over-year. Based on USDA sales data, Dean said 2017 year-to-date U.S. fluid milk sales had declined 2.9 percent.

Dean’s raw milk costs in the second quarter of 2017 averaged $15.52 per hundredweight (cwt), down roughly 9 percent from the first quarter, but 15 percent more than the second quarter of 2016.

Dean will face similar market challenges going forward into the third quarter, according to chief executive officer Ralph Scozzafava.

Margins end July stronger

Dairy income margins strengthened over the last half of July due to a combination of higher milk prices and lower feed costs, according to Commodity & Ingredient Hedging LLC.

Milk prices were supported by strong demand from China, which may continue providing a tailwind through the fall. The country’s dairy imports set a record pace for most products in June.

Spot cheddar cheese prices at the Chicago Mercantile Exchange (CME) rose despite lower results from the latest Global Dairy Trade (GDT) auction.

Meanwhile, feed prices have been under pressure due to improved forecasts and expectations for cooler temperatures and periodic rains in the U.S. Corn Belt.

The USDA will update crop yield and production forecasts on Aug. 10, incorporating actual field surveys. Most traders are expecting declines in yield and production estimates from July for both corn and soybeans.

June cull cow prices higher

June U.S. average cull cow prices improved to their highest level since August 2016, according to the USDA/NASS Ag Prices report.

June 2017 cull cow prices (beef and dairy combined) averaged $76.50 per hundredweight (cwt), up $3.20 from May, but $4.40 per cwt less than June 2016.

Year-to-date, the cull cow price average is $78.95 per cwt, down $33.72 from January-June 2015.

Assessing the pulse of the next farm bill debate: Dairy

What will federal dairy policy look like in the 2018 Farm Bill?

According to two leading dairy economists, much of the focus will be on fixing the dairy safety net, the Margin Protection Program for Dairy (MPP-Dairy).

Leading U.S. agricultural economists gathered for the Agricultural and Applied Economics Association (AAEA) meeting in the first week of August. Andrew Novakovic, Cornell University, and Christopher Wolf, Michigan State University, prepared a short paper on the issues likely to arise as Congress writes the 2018 Farm Bill.

Novakovic and Wolf said there’s little legislative appetite for changing federal milk marketing orders, and agriculture advocates and like-minded members of Congress are primarily focused on doing no harm to trade prospects.

Texas adds CAFOs to drone protection statute

An amendment to the Texas “Use of Unmanned Aircraft” statute adds confined animal feeding operations (CAFOs) to the list of “critical infrastructure” facilities to which additional flight limitations apply for many drone operators. The amendment will go into effect on Sept. 1, 2017, according to Texas Agriculture Law.

Supporters of this amendment argued it was necessary to protect ag operations from bioterrorism threats to the nation’s food supply. The U.S. Department of Homeland Security identified the Texas cattle industry as a soft target for a potential terrorist attack. Additionally, concerns with drones startling livestock were mentioned.

Opponents of the amendment argued the real purpose was to prevent animal rights groups from taking videos by drone of abuse at these facilities, and say that the existing statutory prohibitions on capturing images of private property are sufficient to alleviate this concern. end mark

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