Canola Quick Bytes

A supplement to U.S. Canola Digest


Capitol Hill

Congress faces a high-stakes agenda in the coming weeks, notes Tom Hance of the U.S. Canola Association (USCA) in the USCA Blog. It just passed a Continuing Resolution (CR) to keep the government functioning as well as disaster assistance for farmers. The CR, signed by President Joe Biden at the nth hour on Sept. 30, will run through Dec. 3, which includes $10 billion for agriculture disaster assistance to cover losses in 2020 and 2021. The federal government is also approaching the statutory debt limit and action will be needed to suspend or increase it. Moreover, agreement on a reconciliation package and passage of the bipartisan infrastructure bill are pending.

On Sept. 8, the U.S. Canola Association signed a letter to Congress regarding the need to preserve stepped-up basis (which  ensures a farmer only has to pay capital gains on farmland’s increase in value since it was inherited), like-kind exchanges (deferred taxes on land sold to purchase new farmland per AgWeek), the Sec. 199A small business deduction for farmers and cooperatives, and current estate tax exemption levels for farms. The letter was signed by 327 national, regional and state trade associations.

Indications from the U.S. Environmental Protection Agency suggest that the analysis required to approve canola renewable diesel for the Renewable Fuel Standard is moving forward with positive results. However, no specific data from the modeling have been made available yet and no timetable has been given for the subsequent rulemaking process.

On Sept. 21, the U.S. Court of International Trade rejected Argentina’s challenge to the U.S. Department of Commerce’s 2020 decision to impose countervailing duties on biodiesel imports from Argentina. The court found the decision lawful and noted that Argentina changed its tax regime seven times during the investigation. The court further cited evidence that the new administration in Argentina intended to use its export tax regime as a development tool for specific industries. Meanwhile, the Biden administration is reportedly considering lowering biofuel volume targets for 2020, 2021 and 2022. If the Administration does so, it would be a setback for the U.S. biofuels industry.

On Sept. 13, President Biden announced the selection of Elaine Trevino, a former California deputy secretary of food and agriculture, to be his Chief Agriculture Negotiator in the Office of the U.S. Trade Representative (USTR). She is currently president of the Almond Alliance of California. She “understands the importance of America’s farmers and farming communities to the vitality of our economy,” notes USTR Katherine Tai. “Her experience will help the Biden-Harris Administration craft durable trade policy that creates broad-based prosperity.” Biden has not yet nominated an Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs to replace Ted McKinney.

Kansas City Southern (KCS) Railway is seeking to merge with Canadian Pacific (CP) after attempts to merge with Canadian National (CN) hit a roadblock. The U.S. Surface Transportation Board unanimously rejected CN and KCS motions for use of a voting trust, but it had previously approved it for CP. As a result, KCS will pursue a merger with CP instead of CN.

The U.S. Department of Agriculture will give $700 million in competitive grant funding to farmers impacted by COVID-19 via a new Farm and Food Workers Relief fund. Applications can be submitted and more information obtained online.

Biofuel producers are seeking changes to a proposal to boost production of sustainable aviation fuel. The proposed changes focus on how carbon-saving benefits of producing the fuel would be measured. Biofuel producers believe the current plan is “biased” and “too ambitious” and will not work without tapping into feedstocks like ethanol and soybean oil. They want the model to determine eligibility for the tax credit to allow them to participate.

Agronomy

Members of the International Oilseeds Producers’ Dialogue (IOPD), including the USCA, adopted a declaration about climate action and agricultural sustainability. “Demand for vegetable oils and oilseed products continues to be strong and oilseed producers are well positioned to be vital partners in global food security and the fight to address climate change,” they state. “Vegetable oils and protein meals provide a nutrient-dense food source for humans and animals and are a readily available, renewable, climate-smart alternative to fossil fuels. IOPD members are committed to growing sustainable crops in harmony with the environment and our communities, while also ensuring family farms remain economically viable for current and future generations.” To this end, IOPD members call on their governments to advance the following policy philosophies for sustainable food systems:

  • Science and innovation play a central role in meeting global food and climate change goals.
  • Existing environmental practices provide a strong base to leverage and build on.
  • Comprehensive trade liberalization is required to meet global food and renewable energy demand.
  • No one solution will address climate or production challenges.

Agriculture Secretary Tom Vilsack said the United States is forging an international coalition of like-minded countries to pursue the same farming sustainability goals as the European Union but in a different way, according to The Hagstrom Report. “We want to make sure that there is a strong, articulated message that is in support of productivity growth, not necessarily at the sacrifice of climate and sustainability,” he says in criticism of the EU’s Farm-to-Fork strategy. Brussels and Washington both aim to make agriculture climate-neutral but differ on how to get there.

Nutrition

Canola meal improves the environmental footprint of milk production, reducing methane emissions and nitrogen losses, while boosting milk production, according to the September 2021 issue of the Journal of Dairy Science. “Diet supplementation with canola meal improves milk production, reduces enteric methane emissions, and shifts nitrogen excretion from urine to feces in dairy cows,” note researchers led by Dr. Chaouki Benchaar, research scientist with Agriculture and Agri-Food Canada in Sherbrooke, Quebec. They found that methane, expressed as a percentage of gross energy intake, declined as the amount of canola meal in the diet increased. This energy was captured in greater milk production, rather than lost to the atmosphere. The researchers also found that as canola meal rations increased, more dietary nitrogen was converted to milk protein, reducing urine nitrogen, which contributes to atmospheric ammonia and nitrous oxide.

Other Country News

What will happen to the Canadian canola market? The Manitoba Co-operator reports that production uncertainty has shaken it for quite a while and will continue to do so as a result of droughts. Canada is expected to have its smallest canola crop since 2007 and prices are rising, topping $900 per ton in Alberta and in the upper $800s in Saskatchewan.

Saskatchewan’s canola harvest is underway and about 44 percent is ready to straightcut. Yields have been around 20 bushels per acre. However, there have been issues with regrowth due to rain. Justine Cornnelsen of the Canola Council of Canada warns northerly farmers: “Be very cautious and aware of your pre-harvest intervals and that if you have desiccated a crop already with a certain product, likely you’re not able to go in with that same product again.”

Due to droughts in Canada and a steady global demand for canola oil, stockpiles of canola are plunging and canola prices skyrocketing. Inventories of canola dropped by 49 percent to 1.8 million.

Droughts in Canada are also affecting Australian canola prices. As global demand for canola remains high, Canadian farmers are unable to meet market demands, driving prices up across the globe. Australia’s market is experiencing record-high prices at more than $900 a ton. This opens the door for Australian canola to find its way into new markets.

Latest Industry News

Global Ag Risk Solutions Corp. and Corteva Agriscience have teamed up to create the first insurance protection for Canadian canola farmers. Called The Heat Advantage™, it will be included with Brevant™ seeds Nexera® canola for growers in Saskatchewan, Manitoba and Alberta as of 2022. The insurance will cover “acceptable yield losses” on canola from heat blasts.

About the USCA

Ted McKinney, former USCA board member and USDA Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs, is the new CEO of the National Association of State Departments of Agriculture (NASDA). He aims to “set new horizons for NASDA and ensure agriculture thrives in all 50 states and four territories.” He will succeed Barb Glenn who retired.

The USCA will host its autumn annual meeting in Nashville, Tenn., Monday-Wednesday, Nov. 8-10, barring COVID-19 interference. All USCA members are welcome to attend. Registration is online.

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