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November' 2012

EPA Denies RFS Waiver

The U.S. Environmental Protection Agency (EPA) recently announced that it would be denying the request for a waiver of the Renewable Fuels Standard (RFS). The EPA indicated that the agency did not find the necessary evidence to support a finding of “severe economic harm” that would have warranted the RFS waiver to be granted. EPA used a series of economic analyses and modeling done in conjunction with USDA and the U.S. Department of Energy (DOE). EPA indicated a strong recognition of the severe drought in 2012, along with the economic hardship it has placed on livestock producers; however, based on the analysis conducted, EPA did not feel there was enough justification for a RFS waiver at this time. [ read more ... ]

 

Nov. 9 USDA Report

The USDA Report released on November 9 increased the estimated total soybean production in 2012 to 2.97 billion bushels, which is 4 percent above the 2.86 billion bushel estimate in October. The 2012 soybean production estimate is still 4 percent lower than the 2011 U.S. soybean production of 3.09 billion bushels, and 11 percent below the 2010 production level of 3.33 billion bushels. This production increase is a fairly major production adjustment for this late in the year. [ read more ... ]

 

Flexible Cash Leases

We have received a large number of inquiries for information on the potential use of “flexible cash leases” for the 2013 crop year. Flexible leases also work well for newer or younger farm operators that may not be able to afford the higher cash rental rates for farm land. A flexible lease makes it easier to use a crop revenue insurance policy, along with some forward pricing of grain, as risk management tool for farm operators. Most Ag Lenders are quite supportive of the use of flexible leases by farm operators, as a risk management tool. A flexible lease, with a fair base rental rate, allows landlords the security of a solid base rental rate, while having the opportunity to share in added profits when yields and crop prices exceed expectations. Flexible leases are a nice alternative for Landlords that want to continue to work with long-standing farm operators with cash rental arrangements, without setting cash rental rates too high to keep the current tenants. [ more ... ]