American Ag Today- 10/23/24

And welcome into a new episode of American Ag today produced by the American Ag Radio Network. I'm your host Jesse Allen. Thanks for joining us. Well, Oklahoma State University's agricultural economics department recently hosted the Rural Economic Outlook Conference, John Michael Riley, an associate professor in the economics department, talked about recent days in the grain markets.

I think just kind of hit on what was discussed here at the Rural Economic Outlook Conference. It's not the prettiest of days in the grain markets. Prices for pretty much all of our grains are under quite a bit of pressure. Production just is outpacing demand, hitting some headwinds with trade as we are looking at a various number of factors. A lot of competition from overseas markets. You got some strength here in the dollar of late and then obviously some port issues that are just really compiling the export market and putting some pressure there which

wasn't needed because there's enough pressure here domestically. And so all told, it's not the rosiest of outlooks with regard to where we're at with corn, beans, wheat, all of our grain markets. Wheat seems to be looking somewhat better while cotton has gone in the other direction. If you think back to what we were expecting in winter, early spring with wheat, a lot of apprehension there. It improved the closer we got to harvest and it was better than we anticipated.

All of Oklahoma's summer crops are under some pressure. Beans not looking as good as what they did and cotton's the same. So cotton is probably in one of its worst years of the past five or so. Yields not the best just because of the dry conditions here in the state and on top of that you've got all the pressures that exist in the grain market kind of spilling over into cotton. Normally you would have a natural hedge in some respects where when you've got a bad growing year you might have stronger prices. Well that's just not the case this year with cotton.

drought is continuing to make things tough for crops in Oklahoma and the southern plains.

tremendous amount of risk as you put that seed in the ground with the soil moisture conditions where they're at. So not something that I would want to face and I'm encouraged by the resiliency of farmers. That's John Michael Riley from Oklahoma State University. Well, Jeff Eastman of Asitlan Bio was elected as the new chair of the Renewable Fuels Association. He says there are a lot of challenges facing the ethanol industry.

The upcoming election will, I think, will be pivotal for the ethanol industry. Regardless of who wins, we need to immediately establish relationships with the new leaders in Washington. The first six months of any new administration really are these guys are trying to learn as much as we're trying to teach them. It's very chaotic, I guess. But I think organizations like the Renewable Fuse Association excel at getting out there and making those connections with the right policymakers.

The industry needs guidance on future tax credits to promote the sustainable aviation fuel industry. On top of that, everyone talks about it and it's a 45-Z tax credit. In fact, we need clarity in that. I mean, part of the inflation reduction act is crucial incentive for the ethanol industry, but much remains unclear. Preserving and gaining further guidance on 45-Z and other IRA credits is essential to promote our industry's growth.

We're a critical juncture where more specific direction from the IRS is necessary. Along with that, the expansion of E15, the momentum has been amazing in the shift that we've seen, but we got to get legislation. We got to capitalize on the progress. Eastman says the ethanol industry is in a rebound phase as exports are the bright spot.

This continued boom and ethanol exports has been a vital factor in maintaining the balance in the markets. And it's imperative that we continue to grow these international opportunities. And knowing that the RFA recently joined the Climate Ethanol Alliance, which is a global organization that promotes

ethanol. It's not necessarily trading organization. We're not trying to compete with any other folks, but it really, it shows the benefits of ethanol on a global perspective and how it relates to some of the decisions that are made at IEA, FAO and other global organizations. We need to have a place in this global dialogue.

Again, that's Jeff Eastman of Astilon bio, the new chair of the Renewable Fuels Association. While the Renewable Fuels Association and growth energy were pleased with a Supreme Court decision this week on small refinery exemptions, they issued a joint statement saying the Fifth Circuit Court

Was it the right venue to hear the challenges on small refinery exemptions? The statement said in part quote because the Fifth Circuit opinion set up a clear split with several other courts on the venue question. This is precisely the sort of issue that the Supreme Court is meant to resolve. The court has agreed and we look forward to participating in the case and settling the issue for good end quote.

Now, the groups also say the refining community's abuse of small refinery exemptions destroys demand for biofuels nationwide, which negatively impacts farmers and bioethanol producers, regardless of where they operate. The groups added, quote, the economic and environmental impact of this abuse does not recognize state lines. The decision in this case should give producers some much needed certainty and quote.

All-American farmland trust will collaborate with real farmer care as the fiscal sponsor to support and advance farmer and rancher self-care and well-being. The real farmer care's founding mission is to support farmer self-care unions and allocate donated funds directly to farmers and ranchers as $100 self-care awards. Self-care is the practice of taking an active role in protecting and improving one's well-being and happiness, particularly during stressful times.

Self-care activities can be inexpensive, but rarely get prioritized. AFT president and CEO John Pioti says, quote, as rigors and responsibilities and challenges continue for farmers, it's critical that now more than ever they have the resources at hand to improve their well-being. AFT could not be any more grateful to real farmer care in this alliance to promote healthy farmer and rancher mental health.

For more information, you can go online to the Real Farmer Care or American Farmland Trust website. Well, the 2017 Tax Cuts and Jobs Act expires next year, and that's raising big challenges for farmers and ranchers. According to National Cattlemen's Beef Association president, Mark Eisley, he says it's not an issue of paying taxes.

We don't mind paying some taxes. We don't mind paying our fair share something. It's manageable and adjustable to what we do for a living and how our actual cash flow comes in, which I honestly told NCBA's Beltway beef podcast may not end up the case. If the 2017 tax law is allowed to expire without a favorable replacement.

All the things that really will matter, your herd, your genetics, your cropland, all the things that you value and worry about, those will be known voice because the taxes will eliminate that. With resulting rates that could go to 40% or even higher. Whether you're a brick and mortar deal or a t-shirt shop, you're not going to survive a 60% tax.

You're not gonna survive a 40% tax. It's just, it's undoable. Add to that the huge cost of tax planning for estate and other taxes. Then there's talk of taxing unrealized asset gains and heaping tax liability for generational ag wealth on a current operator. His grandfather probably started it. His father probably worked out paid down the debt. He's involved in it.

His children, whether they're young or if their adults are working on it, they're paying the current taxes, the property taxes. They're paying all the inputs. They've paid the mortgage. They're paying the insurance on it to say that you're targeting one individual for a tax bill. It's a false hit. And there's also filing for the Corporate Transparency Act, the anti-money laundering law by January 1st. The American Farm Bureau says less than 11% of farms have done so. This has been American Act Today. I'm Jesse Allen.