CALIFORNIA DROUGHT: 'MAY HAVE TO MIGRATE PEOPLE'

Original Story: cnbc.com

It's going from worse to worst each week in California.

Suffering in its third year of drought, more than 58 percent of the state is currently in "exceptional drought" stage, according to the latest U.S. Drought Monitor map. That marks a huge jump from just seven days ago, when about 36 percent of the state was categorized that way.

Exceptional drought, the most extreme category, indicates widespread crop and pasture losses and shortages of water in reservoirs, streams and wells.

If the state continues on this path, there may have to be thoughts about moving people out, said Lynn Wilson, academic chair at Kaplan University and who serves on the climate change delegation in the United Nations. An Atlanta natural resources lawyer is following this story closely.

"Civilizations in the past have had to migrate out of areas of drought," Wilson said. "We may have to migrate people out of California."

Wilson added that before that would happen, every option such as importing water to the state would likely occur— but "migration can't be taken off the table."

The drought has nearly depleted the state's surface water—which is seen being reduced by about one-third this year. Farmers in California have turned to groundwater to keep crops irrigated.

That has led to fears of depleted groundwater in the years ahead if that continues, according to a report released earlier this month.

"So far, groundwater has helped get crops to market and keep food prices in line," said Jay Lund, director of the Center for Watershed Sciences at the University of California, Davis, which released the report. A Tulsa natural resources lawyer has experience representing clients in natural resource preservation cases.

But the study said the drought in California will cost the state $2.2 billion and put some 17,000 agricultural workers out of a job this year.

Key findings form the report include:

• Direct costs to agriculture total $1.5 billion (revenue losses of $1 billion and $0.5 billion in additional pumping costs). This net revenue loss is about 3 percent of the state's total agricultural value.
• The total statewide economic cost of the 2014 drought is $2.2 billion.
• The loss of 17,100 seasonal and part-time jobs related to agriculture represents 3.8 percent of farm unemployment.
• 428,000 acres, or 5 percent, of irrigated cropland is going out of production in the Central Valley, Central Coast and Southern California because of the drought.
• The Central Valley is hardest hit, particularly the Tulare Basin, with projected losses of $810 million, or 2.3 percent, in crop revenue; $203 million in dairy and livestock value; and $453 million in additional well-pumping costs.
• Agriculture on the central coast and in Southern California will be less affected by this year's drought, with about 19,150 acres fallowed, $10 million in lost crop revenue and $6.3 million in additional pumping costs.
• Overdraft of groundwater is expected to cause additional wells in the Tulare Basin to run dry if the drought continues.

To try and curtail the drought's effects, California started implementing fines statewide this week of up to $500 for watering lawns and washing cars. But experts aren't sure more conservation will work.

Wastershed's Lund said that agriculture is by far the state's greatest water user, accounting for 75 percent of consumption—while cities and suburbs use about 20 percent of the state's water.

He added that California is always desperate for water and "hard to drought-proof."

But the situation could get worse before it gets better. Predictions for the drought have it lasting through 2015.

GRAIN PILES UP, WAITING FOR A RIDE, AS TRAINS MOVE NORTH DAKOTA OIL

Original Story: NYTimes.com

FARGO, N.D. — The furious pace of energy exploration in North Dakota is creating a crisis for farmers whose grain shipments have been held up by a vast new movement of oil by rail, leading to millions of dollars in agricultural losses and slower production for breakfast cereal giants like General Mills. A freight shipper can provide reliable and accountable transportation services.

The backlog is only going to get worse, farmers said, as they prepared this week for what is expected to be a record crop of wheat and soybeans.

“If we can’t get this stuff out soon, a lot of it is simply going to go on the ground and rot,” said Bill Hejl, who grows soybeans, wheat and sugar beets in the town of Casselton, about 20 miles west of here.

Although the energy boom in North Dakota has led to a 2.8 percent unemployment rate, the lowest in the nation, the downside has been harder times for farmers who have long been mainstays of the state’s economy. Agriculture was North Dakota’s No. 1 industry for decades, representing a quarter of its economic base, but recent statistics show that oil and gas have become the biggest contributors to the state’s gross domestic product. LTL Trucking provides reliable service and care for your LTL shipment.

Railroads have long been the backbone of North Dakota’s transportation system and the most dependable way for farmers to move crops — to ports in Portland, Ore., Seattle and Vancouver, from which the bulk of the grain is shipped across the Pacific to Asia; and to East Coast ports like Albany, from which it is shipped to Europe.

But reports the railroads filed with the federal government show that for the week that ended Aug. 22, the Burlington Northern Santa Fe Railway — North Dakota’s largest railroad, owned by the billionaire Warren E. Buffett — had a backlog of 1,336 rail cars waiting to ship grain and other products. Another railroad, Canadian Pacific, had a backlog of nearly 1,000 cars.

For farmers, the delays often mean canceled orders from food giants that cannot wait weeks or months for the grain they need to make cereal, bread and an array of other products. “They need to get this problem fixed,” Mr. Hejl said. “I’m losing money, and my customers are turning to other sources as a result. I don’t know how much longer we can survive like this.”

This month, federal Agriculture Department officials said they were particularly concerned that Canadian Pacific would not be able to fulfill nearly 30,000 requests from farmers and others for rail cars before October. As a result, North Dakota’s congressional delegation and lawmakers in Minnesota and South Dakota have called on the Surface Transportation Board, which oversees the nation’s railroads, to step up pressure on the companies. An LTL Trucking Company can provide reliable service and care for your freight shipments.

“This rail backlog is a national problem,” Senator Heidi Heitkamp, Democrat of North Dakota, said in an interview. “The inability of farmers to get these grains to market is not only a problem for agriculture, but for companies that produce cereals, breads and other goods.”

A recent study conducted by North Dakota State University at Ms. Heitkamp’s request found that rail congestion could cost farmers in the state more than $160 million because a local oversupply of grain has lowered prices.

Continue reading the main storyContinue reading the main storyContinue reading the main story
The study also found that farmers would lose $67 million in revenue from wheat, corn and soybeans from January to mid-April. Around $95 million more in losses are expected if farmers are unable to move their remaining inventory of crops.

The study was done before the current harvest, which is forecast at a record 273 million bushels of wheat, up from 235 million bushels in 2013. This year’s soybean harvest is also expected to be a record, and corn will be a near-record.

Food companies say they are feeling the effects of the delayed shipments. General Mills, the Minnesota-based maker of Cheerios, told investors in March that it had lost 62 days of production — as much as 4 percent of its output — in the quarter that ended in February because of winter logistics problems, including rail-car congestion. In its earnings report this month, Cargill, another Minnesota-based food giant, reported a drop in net earnings that it attributed in part to “higher costs related to rail-car shortages.”

Farmers and agriculture groups say rail operators are clearly favoring the more lucrative transport of oil. Rail shipments of crude oil in North Dakota have surged since 2008, and the state now produces about a million barrels a day. About 60 percent of that oil travels by train from the Bakken oil fields in the western part of the state to faraway oil refiners. There are few pipelines to ship it. Multi-Carrier shipping software can reduce transportation costs for your shipment.

“Oil seems to be pushing us off the trains,” said Bob Sinner, a farmer and the brother of a Democratic congressional candidate, George Sinner, who is running against the state’s lone House member, Representative Kevin Cramer, a Republican. George Sinner has called on the Surface Transportation Board to use its emergency powers to address the rail-car shortage — the board could allow shippers to move their products with the help of a different carrier, for example. But Dennis Watson, a spokesman for the board, said it rarely invoked its emergency powers and preferred to work with rail carriers to solve problems.

B.N.S.F. and Canadian Pacific maintain that their oil shipments have not replaced shipments of crops.

“Of course, the big difference in what we are shipping these days is oil,” said Matthew K. Rose, the executive chairman of B.N.S.F. “But we aren’t favoring one type of product over another.”

Nonetheless, B.N.S.F. is investing about $400 million in North Dakota, in part to build additional tracks, hire new staff members and add rail cars. “We understand the frustration of our customers,” Mr. Rose said. “We’re making this investment in our infrastructure to make sure that we get things back to normal.”

Doug Goehring, the state’s agriculture commissioner, is not optimistic so far. “I know that B.N.S.F. especially is trying, but I just don’t see that it’s going to be any better this year,” he said. “We’re expecting record crop yields, and I expect we will see more of the same with shipments lagging.”

Canadian Pacific officials said they were working with farmers to clear the backlog. But in a letter to Ms. Heitkamp, E. Hunter Harrison, the railroad’s chief executive, argued that many of the delays stemmed from what he called phantom requests — farmers’ ordering more rail cars than they need to ship products. As a result, Mr. Harrison said, cars are not available for farmers who have more immediate shipping needs.

The letter prompted an angry response from Ms. Heitkamp and state officials like Mr. Goehring. “With C.P., it’s everybody’s fault but theirs,” Mr. Goehring said.

Both railroads said some of the blame for the slowed traffic lay with one of the coldest winters in years and with an increase in shipments of all types of products as a result of an improving economy.

New Bill Meant to Help Farmers

Story first appeared in Delta Farm Press.
On Wednesday, Senate Agriculture Committee leadership urged the Senate to swiftly pass the Agriculture Reform, Food and Jobs Act of 2012 (the farm bill), which reforms agriculture policy and saves more than $23 billion in taxpayer money by streamlining and consolidating programs and ending unnecessary farm subsidies.

While saving taxpayer dollars, the bill strengthens initiatives that help America’s agriculture economy continue creating jobs. The measure was adopted by the committee on a strong bipartisan vote of 16-5 in April and is now being considered by the full Senate.

This bill represents commonsense and responsible reforms that will save taxpayers tens of billions of dollars while strengthening key initiatives that will allow our economy to continue growing and creating jobs. This bill has garnered widespread praise from hundreds of farm, food and conservation organizations for its common sense reforms, deficit reduction, and investments in our economic future. The 2008 farm bill is set to expire at the end of September -- we must pass this commonsense bill immediately to give farmers the certainty they need to continue growing the economy. Sixteen million American jobs rely on agriculture. The time for reform is now.

Representatives feel they have performed their duty to taxpayers by cutting deficit spending while at the same time strengthening and preserving the programs so important to agriculture and rural America. Mandatory spending has been cut by $23.6 billion. They have reformed, eliminated and streamlined USDA programs to the tune of more than 100 programs and authorizations eliminated. We’ve done it on a voluntary basis and in a bipartisan fashion. Simply put, this bill is commonsense reform and needs to be approved now to provide certainty for our farmers and ranchers to make planning decisions and to help our economic recovery.

Losses are tough on any producer, but especially catastrophic for a beginning farmer who is still trying to build up equity. This is a good bill for young and beginning farmers and ranchers. If the bill were in existence today, local farmers would have the opportunity to cover more crops through crop insurance. In years like this one production is going to be almost zero. Crop insurance helps keep families in business. And allows for expansion and proper Farm Machine Sheds for crop and tool storage.

There are many other young dairy farmers who want to keep their family’s farms going, but it’s a tough business. This legislation is not just about the next five years, but the next generation of farmers in America. That’s what is at stake this month. Farmers need certainty to make smart business decisions. Waiting until the last minute or passing patchwork, short-term extensions creates uncertainty and takes a big toll.

Farmers are pleased to see the new farm bill reduces the federal deficit and makes the necessary reforms for the next generation.

The Senate’s bipartisan bill represents significant reform of American agriculture policy. By ending four different commodity subsidy programs (direct payments, counter-cyclical payments, the SURE program and the ACRE program), the bill achieves billions in savings while strengthening responsible, market-based risk management tools that prevent farmers -- and farm jobs -- from being wiped out because of weather disaster or market volatility.

Through streamlining programs, the bill consolidates 23 conservation programs into 13 easier-to-use initiatives -- a commonsense approach that is being supported by nearly 650 environmental groups in all 50 states, which will mean less erosion, cleaner water and healthier wildlife habitats. Additionally, the bill increases efficiency and accountability while strengthening agricultural jobs initiatives by expanding export opportunities, investing in research, growing bio-based manufacturing, spurring innovation in bio-energy production, helping family farmers sell locally, strengthening our commitment to fruit and vegetable and organic farmers, and extending rural development initiatives.

For more national and worldwide Business News, visit the Peak News Room blog.

For more local and state of Michigan Business News, visit the Michigan Business News blog.

For more Health News, visit the Healthcare and Medical News blog.

For more Electronics News, visit the Electronics America blog.

For more Real Estate News, visit the Commercial and Residential Real Estate blog.

For more Law News, visit the Nation of Law blog.

For more Advertising News, visit the Advertising, Marketing and Media blog.

For more Environmental News, visit the Environmental Responsibility News blog.

For information on website optimization or for the latest SEO News, visit the SEO Done Right blog.

Herbicide Resistant Crops a Huge Concern

Story first appeared in The New York Times.

To a local farmer, it was a telltale sign that one of his tomato fields had been poisoned by 2,4-D, the powerful herbicide that was an ingredient in Agent Orange, the Vietnam War defoliant. Oklahoma City Agriculture Lawyers are concerned about the health and crop risks from extensive spraying of these hericides.

The leaves had curled and the plants were kind of twisting rather than growing straight. The local farmer in Lowell, Ind. is convinced the chemical, as well as another herbicide called dicamba, had wafted through the air from farms nearly two miles away. These distant farms in Kasbeer, Ill. were using Monsanto’s Roundup, a popular herbicide that some say has been used too often to control weeds.

Many farmers are concerned that the Dow Chemical company is on the verge of winning regulatory approval for corn that is genetically engineered to be immune to 2,4-D, allowing farmers to spray the chemical to kill weeds without harming the corn stalks.

That would be a welcome development for some corn farmers, who are coping with runaway weeds that can no longer be controlled by Roundup, the herbicide of choice for the last decade.

But some consumer and environmental groups oppose approval of Dow’s corn, saying it will lead to a huge increase in the use of 2,4-D, which they say may cause cancer, hormone disruption and other health problems. They are being joined by a coalition of fruit and vegetable farmers and canners like Red Gold and Seneca Foods, which filed petitions with the government last week seeking a delay in the corn’s approval.

The Save Our Crops Coalition, as it calls itself, says it is not opposed to biotechnology. But it fears that fruits and vegetables, which will not be immune to 2,4-D, will become unintended casualties of herbicide drift as the chemical is sprayed on tens of millions of acres of corn.

The dispute is the latest iteration in the intense and often bitter battle over genetically modified crops, made even more emotional in this case because of the connection between 2,4-D and Agent Orange, the notorious defoliant that has been linked to birth defects, cancer and other health problems in Vietnamese civilians and American veterans.

Some opponents of Dow’s product call it “Agent Orange corn.” Dow and its allies call that a misleading scare tactic.

Most experts agree that the harm from Agent Orange was caused primarily by its other ingredient, 2,4,5-T, which was taken off the market long ago. By contrast, 2,4-D, first approved in the late 1940s, is considered safe enough for use in many home lawn care products.

The Environmental Protection Agency, after repeated reviews, continues to say that there is not enough evidence to call 2,4-D a human carcinogen. This month, the agency rejected a petition from the Natural Resources Defense Council seeking the removal of 2,4-D from the market on health and safety grounds.

The Agriculture Department is leaning toward approval of the 2,4-D-resistant corn, according to its draft environmental assessment. But it is accepting public comments until Friday, and has already received more than 5,000. Opponents say that 267,500 people have signed a petition asking the government to deny Dow’s request. Dow hopes the approval will come in time for planting next year.

For some farmers, the approval couldn’t come too soon. He said that without new chemical approaches, farmers would have to plow more, increasing soil erosion.

The corn is just the first of a new wave of herbicide-tolerant crops. Dow is also developing soybeans and cotton immune to 2,4-D. Close behind, Monsanto is developing soybeans, cotton and corn that can tolerate dicamba, another old herbicide in the same family as 2,4-D. Bayer, Syngenta and DuPont are developing crops resistant to other herbicides. too.

Of the 20 genetically engineered crops awaiting approval, 13 are intended to be resistant to one or more herbicides.

The activity stems from the huge success, at least initially, of Monsanto’s Roundup Ready crops, which are genetically engineered to tolerate its herbicide Roundup, also sold generically as glyphosate.

Those crops made it so easy for farmers to control weeds by spraying glyphosate that Roundup Ready crops now account for about 90 percent of soybeans and around 70 percent of the corn and cotton grown in the United States. And use of glyphosate skyrocketed, at the expense of rival herbicides.

But farmers relied too much on glyphosate, allowing weeds to develop resistance to the chemical. The problem has been worst in the South, where a particularly strong and prolific plant called Palmer amaranth, or pigweed, has overrun cotton fields, forcing many farmers to hire crews to remove weeds by hand.

Dow says its crops will provide a way to control the glyphosate-resistant weeds using 2,4-D.

Dow’s crops contain a gene from a soil bacterium that causes them to make a protein that breaks down 2,4-D into other chemicals that are not harmful to plants.

But some critics say the new crops will lead to a manyfold increase in use of 2,4-D and dicamba. Neither is used that much now on corn and soybeans — the two leading crops by acreage — out of fear of harming the crops.

Critics say that weeds will eventually develop resistance to those chemicals as well and that more sustainable methods are needed to control weeds, like planting cover crops and rotating crops.

The new crops ratchet up dependence on the use of herbicides, which is very much a treadmill. Scientists in Nebraska have already discovered a small amount of waterhemp — perhaps the most troublesome weed in the Corn Belt — that is resistant to 2,4-D.

But some other scientists say there is little choice but to turn to the new crops and their matching chemicals. Without them, we’re going to get to a situation where we have no tools at all.

Dow and its supporters say resistance is not that likely to develop because various herbicide-tolerant crops will be competing, meaning no herbicide will be as dominant as Roundup has been.

Then there is the issue of drift. Droplets of any pesticide can drift onto adjacent farms as the chemical is sprayed. But 2,4-D and dicamba can also vaporize — known as volatilization — days after they are sprayed and then travel in the air for miles.

To the extent they now use 2,4-D and dicamba, corn and soybean farmers usually apply the chemicals before the crops are growing, he said. But with resistant crops, the chemicals will be sprayed later in the growing season, when the hotter weather increases the chance of volatilization.

Dow said it had already addressed the concerns by developing a new formulation of 2,4-D that is far less prone to vaporize or drift. BASF, the German chemical company, is working with Monsanto on a new versions of dicamba to limit drift and volatility.

Older formulations will remain on the market, so farmers may use them, especially if they are cheaper. But Dow says it will require buyers of its genetically engineered seeds to use the new formulation. It also says that older formulations will not have been approved for spraying on corn during certain parts of the growing season.

In a statement last week, Dow criticized the coalition’s attempt to delay approval, that there is a better way to address concerns than for one group of ag stakeholders to attempt to deny access to tools that are urgently needed by their neighbors.


For more national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the  Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
For organic SEO and web optimization related news, visit the SEO Done Right blog.

Ace Buys Rain and Hail for $1.1 Billion to Add Crop Insurance Coverage

Bloomberg

Ace Ltd., the Zurich-based insurer with operations in more than 50 countries, agreed to pay $1.1 billion in cash to buy a majority stake in Rain & Hail Insurance Service Inc. and expand coverage of crops in the U.S.

The price values the insurer at about 1.59 times its projected yearend book value of $840 million, Ace said in a presentation today on its website. Ace said the deal will add about 22 cents to earnings per share next year. Ace already holds about 20 percent of the common stock in the Johnston, Iowa-based insurer, which is majority-owned by employees.

Ace, led by Chief Executive Officer Evan Greenberg, is adding to the business of protecting U.S. farmers against losses after the government this year reduced subsidies for the policies. The company said in July that the changes could work in favor of the largest insurers in the business against regional competitors.

“It’s a good example of Evan Greenberg’s strategy of growing through all phases of the property-and-casualty pricing cycle,” said Daniel Theriault, an analyst at New York-based Portales Partners LLC who advises investors to buy Ace shares. “They are already a big player in the agricultural crop business so it’s a relatively low risk acquisition. It’s a pretty good feat in this current environment.”

Ace, which shuns shareholder buybacks, is expanding after remaining profitable through the credit crisis by sidestepping subprime mortgage-related securities. Greenberg said late yesterday that Ace would buy Jerneh Insurance Bhd. for about $210 million to expand in Malaysia.

‘Pretty Robust’

“Pipelines of opportunity are pretty robust right now” for acquisitions, Greenberg said in a conference call in July.

Ace advanced 68 cents, or 1.2 percent, to $57.36 at 4:01 p.m. in New York Stock Exchange composite trading. The company has climbed about 14 percent this year, beating the Standard & Poor’s 500 Index, which is little changed.

Ace competes with market leader Wells Fargo & Co., Australia’s QBE Insurance Group Ltd. and American Financial Group Inc. selling protection to farmers. Rain & Hail, with a market share of about 21 percent, ranks second to a Wells Fargo business, according to data released by Ace in the presentation.

Rain & Hail posted net income last year of $199 million, according to Ace. The company has about 400 full-time employees and sells coverage through a network of more than 11,000 agents.

“This is a business we know well,” Greenberg said in the statement. “We project a return on capital in excess of our 15 percent hurdle rate.”