⛽️ You've Been Served + Farmer Barometer Blues, Wheat Issues Mounting, and more...

“You’ll be hearing from our lawyer.”

That was the gist of a letter Growth Energy sent earlier this week to EPA Administrator Michael Regan. The message in the letter was clear: get your act together or get sued.

So what’s the hubbub? Under the Renewable Fuel Standard (RFS), the EPA has a statutory deadline of November 30 to set the Renewable Volume Obligation (RVO) for 2022. Plus, they typically give at least 30 days (and sometimes up to 50) for the public to comment on proposed rules.

As of today, 25 days out from the deadline, mum’s the word… and the ethanol industry is more than just a little perturbed.

Refresher: The Clean Air Act requires the EPA to set RFS volume standards by calendar year. And the EPA isn’t just delayed. In fact, they are waaaaay behind schedule. So much so that, according to the law, they should have already set the RFS for 2023.

Delays in setting these volume standards have major consequences. With the law requiring RVOs in 2023 and beyond to be set at or above 2022 levels, the hold-up is causing market uncertainty for producers and processors.

A soundbite: "We've got surging fuel costs, we’ve got rising emissions, and we really cannot afford to hold back lower-cost, lower-carbon biofuels with needless regulatory uncertainty.”—Emily Skor, Growth Energy CEO

Where this goes: The lawsuit will focus on the EPA’s failure to adhere to the timelines in the law. Growth Energy is giving them 60 days. If action isn’t taken, it’s game on.

Quick Hits

→ Thanks, but no thanks. United Auto Workers members rejected a second contract from John Deere, keeping their three-week-long strike going after 55% voted ‘no’ on the offer.

→ New carbon cousins. Bayer will extend its carbon farming program enrollment to the 75,000 farmer-members of CHS with hopes to increase those planting off-season crops, reducing tillage, and optimizing fertilizer usage.

→ Berry waster saver. A strategic alliance between J.R. Simplot and Plant Science Inc. will use gene editing to breed strawberries with long shelf life, a move to lower the ~35% of fresh inventory that’s discarded each year.

→ Intel gets into ag. The technology and computing behemoth is partnering with SVG Ventures to develop a pipeline of agrifood innovations and accelerate startups’ growth.

→ China’s record-breaking rice. An expert team was able to produce a new world record, measuring a rice field’s yield to be 1,326.77 kg yield per mu (1 acre = 6.07 mu), a 10% boost over the prior record.

→ Sentera gains Insights. The drone and sensor startup acquired Insight Sensing, a company delivering field-specific insights via machine learning to agronomists.

Each month, Purdue University and CME Group interview 400 U.S. ag producers to gauge their feelings on current and future ag economic conditions. The Ag Economy Barometer measures how healthy (or unhealthy) the ag economy is in the eyes of farmers.

And sadly, for the third month in a row, the sentiments aren’t bright and shiny.

The October barometer shows farmer sentiment at 121, three points lower than September. The perceptions regarding current and future conditions in production agriculture aren’t any better.

In October:

Current conditions dropped five points to 135.
Future conditions dropped two points to 114.
Farm Capital Investment Index rose three points to 46. (Which is nice, but still 50% lower than it was at the start of 2021. Ouch.)

It’s brutal out here: Increasing input prices like fertilizer are making farmers feel less than impressed. In fact, USDA data indicates nitrogen prices in October were up 130% from 2020. Other inputs like pesticides, machinery repairs, and seed are also worrying farmers.

51% of those interviewed said they expect input costs to rise 8% or more in the upcoming year.
44% said higher input costs are their top concern.
Four out of 10 respondents said inventory issues impacted their machinery purchasing plans.

Go easy on me: Despite the sad farmer sentiment, farmers are still bullish about farmland values. The Long-Term Farmland Value Expectations Index set a record-high of 161, two points higher than September.

You might be thinking, “What do sports have to do with agriculture?”

Let us count the ways:

1.3 billion chicken wings get downed on game days
1 cowhide can produce 20 footballs
The horticulture and turf chops to maintain an NFL-caliber field are nutty.

We digress…

Let us save you some time and send you to our new favorite sports newsletter, Sideline Sprint. It’s SportsCenter wrapped up into a 5-minute email… only way funnier.

If you love Magnetic’s witty, digestible tone and you’re into sports, then Sideline Sprint is for you.

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It's a trifecta: Wheat worries are ramping up, crop conditions are historically poor, and global wheat prices are high.

And now the USDA is rating a mere 45% of winter wheat in good or excellent shape, which is the fourth-worst score for the week since 1986 when they started keeping records. Plus, 19% of winter wheat comes from the northwestern wheat belt, which has been drowning in drought this year.

Pressure on the U.S. and other top wheat exporters to produce healthy harvests is graining. The other thing rising? Bread costs all over the world as a result of the wheat price surge.

How high are we talking? Benchmark prices in Chicago are at an almost nine-year high. And that’s not just bringing grocery bills to a head. It’s also causing more inflation for central banks and worsening global hunger, also at a multi-year high.

Kansas City and Minneapolis wheat futures show new contract and multi-year highs, up to $10.47 a bushel. The most recent previous high was in July 2012 at $10.35 a bushel.

Zoom out: Countries like China are the ones with the wheat stockpiles, and they ship little abroad. Meanwhile, wheat inventory in the top seven exporters is wheakening to an eight-year low. Countries like Russia are safeguarding supplies.