Evening Report (VIP) -- February 14, 2014

15:01PM Feb 14, 2014

Markets closed on Presidents Day... Markets and government offices are closed for Presidents Day on Monday, Feb. 17. Therefore, there will be no Pro Farmer updates on Monday. We'll be back with our full slate of market reports and commentary beginning with "First Thing Today" on Tuesday, Feb. 18.

Senators introduce measure to extend biodiesel tax credit through 2017... U.S. Senators Maria Cantwell (D-Wash.) and Chuck Grassley (R-Iowa) today introduced bipartisan legislation to reinstate a tax incentive for the production of domestic biodiesel. The bill would reform and extend the $1-per-gallon tax credit for biodiesel producers through 2017 after Congress allowed the law to lapse at the end of 2013. Specifically, the Biodiesel Tax Incentive Reform and Extension Act of 2014, or S. 2021, would:

  • Provide a $1 per-gallon tax credit for the production of biodiesel, renewable diesel and aviation jet fuel that complies with fuel standards and Clean Air Act requirements.
  • Increase the credit from $1 to $1.10 for the first 15 million gallons of biodiesel produced by small producers with an annual production capacity of less than 60 million gallons.
  • Eliminate potential abuses and simplifies how the tax is administered by restricting the credit to fuel producers and excluding fuel blenders from eligibility. By focusing on production, this bill would eliminate any remaining opportunity for abuse known as "splash and dash" in which oil companies add a few drops of biodiesel to petroleum diesel to qualify for the tax credit. The change also ensures the credit benefits domestic producers -- the old law allowed blenders to receive the credit for blends that included foreign-imported biodiesel.
  • Simplify the definition of "biodiesel" to encourage production from any biomass-based feedstock or recycled oils and fats.
  • Tighten compliance and reduces administrative burdens on taxpayers by simplifying the coordination between the income tax credit and the excise tax liability.
  • Extend this tax credit for three years, giving needed financial predictability so that more facilities can be brought online in the United States.


USDA invests in prairie pothole conservation efforts... USDA Secretary Tom Vilsack announced today his department will provide up to $35 million over the next three years to help landowners conserve grasslands and wetlands in the Prairie Pothole region in North Dakota, South Dakota, Minnesota, Iowa and Montana. This funding will come in several pieces, including:

  • Environmental Quality Incentives Program: Will help producers with expiring Conservation Reserve Program contracts keep their lands as working grasslands or haylands through implementation of prescribed grazing and other conservation practices.
  • Ducks Unlimited-NRCS partnership for carbon credits: Natural Resources Conservation Service (NRCS) is working with North Dakota, South Dakota and Montana to create a carbon credit marketing system for landowners who agreed to avoid tilling grasslands. This work started in 2011 in North Dakota as part of a Conservation Innovation Grant, but now it's being expanded to the three states. Through this system, interested landowners can keep their land in grass, continue grazing and haying, and generate verified carbon credits that place a conservation easement on their land. These credits can be sold or traded into existing voluntary carbon markets.


NRCS will also provide additional technical assistance to complete certified wetland determinations that producers need to meet conservation compliance requirements.


KC Fed: Slow fourth quarter growth in farmland values could signal a top... The value of farmland in the U.S. Central and Southern Plains held steady in the fourth quarter relative to the third quarter, but the market tone is soft and bankers expect farmland values to weaken in the months ahead, according to a quarterly survey of farm bankers by the Kansas City Federal Reserve. The survey showed cropland values rose just 1% in the fourth quarter of 2013, despite fewer farms being sold. And ranchland slipped below third-quarter levels, according to the survey. For the year, farmland values rose 7% to 9%, the lowest percentage increase in more than three years. Of note, the Kansas City Fed said, "A growing number of district bankers felt that farmland values had topped out and could retreat from current highs." Get more details from LandOwner Editor Mike Walsten.


Old-crop soybeans remain focused on demand... March soybean futures rose to the highest level since mid-September today before setting back into the close. The contract still posted solid weekly gains, giving holders of old-crop soybeans yet another opportunity to catch up on sales. Demand for old-crop soybeans was the topic of this week's Pro Farmer Profit Briefing on AgDay TV. Click here to watch the segment.