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Summer Seminar Highlights

Monday, August 28, 2017
filed under: Marketing/Risk Management

Outlook for the 2018 Farm Bill — Timeline & Challenges Ahead
       Dale Thorenson addressed a critical — and fluid — subject in his presentation to the 2017 NSA Summer Seminar audience:  “Outlook for the 2018 Farm Bill — The Timeline and Challenges Ahead.” Thorenson is an associate with Gordley Associates, the consulting firm that has represented the National Sunflower Association in Washington, D.C., for the past 30 years.  (The NSA was John Gordley’s first client upon forming the firm in 1987.)
       The 2014 farm bill expires on September 30, 2018 — which should provide plenty of time to write a new one, right?  Not necessarily.  Thorenson reminded his audience that work on the 2014 farm bill “officially” began in early August of 2011; but the legislation was not signed into law until early February 2014 — more than two and a half years later. 
       The first round of public hearings by the House Agriculture Committee on the 2018 farm bill began in late June and may run into September. That will be followed by the committee’s drafting and marking up its proposed bill.  Then there’s the Senate, whose own timeline is complicated by other ag-related work such as confirmation of administration appointees to a number of top USDA posts — nominations that had not even been brought forward as of mid-summer. 
       Aside from all the attention it has paid/will pay to the health care debate, tax reform and large infrastructure bill, Congress must do two things this year, Thorenson stated:  (1) pass the 12 annual spending bills, and (2) increase the debt limit.  Then there are the ongoing, time-consuming Trump-Russia investigations.  So, at the end of the day, “ag committees will face an uphill climb to get floor time for farm bill consideration this fall,” he predicted.
       Most ag groups find agreement in several areas, Thorenson noted:  (1) keeping the farm bill as an amendment to permanent law; (2) increasing the farm bill baseline from its current level; (3) retaining crop insurance and the Commodity title as top priorities; and (4) keeping the Nutrition title in the farm bill.  (That last one is essential in light of where the U.S. population resides:  just 34 districts — 7.8% of Congress — are considered 50% rural or more.  “It would be very difficult, if not impossible, to pass a farm bill without a Nutrition title,” Thorenson emphasized.)
       Within the Commodity title, Thorenson stated, most farm groups agree on:  (1) continuing PLC and ARC; (2) allowing a choice between PLC and ARC by crop; (3) revising PLC and ARC to be more effective and fair; (4) keeping payments paid on historical crop bases; (5) opposing the lowering of payment limits; and (6) opposing means testing of commodity programs.
       On crop insurance, he added, the general consensus calls for opposition to reducing premium discounts; to payment limits on premium discounts; to means testing on crop insurance programs — and to the release of names and other personal data from the RMA regarding crop insurance premium discounts and indemnities received for losses.
       There’s considerable agreement among ag groups as well in areas relating to conservation; funding for ag research and education; simplification of reporting requirements and paperwork between FSA, NRCS and RMA; and continuation of the Young and Beginning Farmer programs implemented in the 2014 farm bill, among others.
       Where does the National Sunflower Association stand, as of Summer 2017, regarding its own farm bill “wish list?”  Thorenson outlined several positions:
       • With crop insurance, the NSA opposes any reduction of premium support or imposition of an AGI cap for eligibility.
       • Under the Commodity title, the NSA supports: (1) tying payments to historical crop bases; (2) allowing producers a one-time choice between ARC-CO and PLC by crop; (3) requiring the use of RMA data before NASS yields under ARC-CO; (4) retaining ARC-IC as an option; (5) providing an option to reallocate or update crop acreage bases; and (6) allowing producers an option to update program yields.
       • Within the Conservation title, NSA backs provision of an incentive to include sunflower and/or canola in cropping rotations to provide habitat for honeybees and wild pollinators.  The Association also wants the U.S. Fish & Wildlife Service, when administering USFWS wetlands easements, to be required to use NRCS easement guidelines for determining applicable setback distances from wetlands; for mapping guidelines for wetlands; and for mitigation options in drainage projects.
       • In the Trade arena, the NSA supports increased funding for the Market Access Program (MAP) and Foreign Market Development (FMD) program.
       • Under the Energy title, the NSA supports continued authorization and funding for the Biobased Market Program, Bioenergy Program for Advanced Biofuels, and for the Biodiesel Education Program. — Don Lilleboe

Oilseed Market Outlook
       An overview of the U.S. and global oilseed situation and outlook was the focus of John Baize’s presentation at the 2017 NSA Summer Seminar.  Baize is president of John C. Baize and Associates, a Washington, D.C.-based international agricultural trade and policy consulting firm specializing in the oilseed sector.
       While global production of sunflower seed has risen in the past couple years, the U.S. production level has been on a fluctuating path: from about 1.0 million metric tons in 2014/15, up to 1.33 million tons in 2015/16; then down to 1.2 million in 2016/17 — and with a forecast of 1.02 million metric tons for 2017/18.  Globally, USDA’s current forecast of sunflower seed production for 2017/18 is about 17.7 million metric tons, Baize noted.  That would compare to 17.33 million tons in 2016/17 and is well above 2015/16’s 15.47 million-metric-ton global output. The Ukraine and Russia together account for the majority of world sun seed output, followed by China and Argentina.
       The Ukraine and Russia likewise are by far the largest exporters of sunflower oil (estimated at 5.1 and 2.0 million metric tons, respectively, in the 2016/17 marketing year).  India and the European Union top the list of sun oil importers, in volume.
       After broadening his comments to include soy oil, palm oil and rapeseed oil production and consumption, Baize turned to the topic of trans fat labeling and its impact on U.S. veg oil use patterns.  “After the FDA required labeling on food indicating [the] content of trans fats, the demand for hydrogenated soybean oil plummeted,” he noted  “This resulted in food manufacturers shifting to alternate veg oils — particularly canola oil and palm oil.”  Fortunately, he added, “the growth of the U.S biodiesel sector and increased soy oil exports prevented surplus soy oil stocks from becoming a burden on the oilseeds sector.”  The U.S. soybean industry is now focusing a lot of attention and money expanding production of beans that are high in oleic fatty acids and do not require hydrogenation.  “However, it likely will be several years before enough high-oleic soybeans are produced to win back market share in the food market,” Baize stated.
       The oilseeds consultant believes sunflower seed production will continue to grow in the Ukraine and Russia, while in the U.S., “sunflower’s biggest challenge is competing against other crops (e.g., soybeans and corn) for land.”  A faster upward trend line in sunflower yields will be a key factor in the crop’s ability to do so, he observed. — Don Lilleboe

Hybrid Sunflower Seed Production in California
       California produces roughly 95% of the hybrid seed planted each year by U.S. sunflower growers.  And, an even-larger volume of California-grown seed is destined for sunflower producers in Europe and Asia.  That makes it a very high value specialty row crop in California.
       But what exactly goes into hybrid seed production?  Rachael Long, farm advisor with University of California Cooperative Extension in Yolo County, Calif., addressed that question and more at the 2017 NSA Summer Seminar.
       “Seed production follows incredibly strict protocols to ensure our seed is certified and meets the standards of countries throughout the world that are importing our seed for planting,” explained Long. It has to be pure, high germination, and free of weeds, pests and diseases.”
       Long went on to explain how fields are planted for seed production. Both male and female lines are planted in the same fields, but in separate rows within that field.
       “Often you’ll see two rows of males and six rows of females, but it can be any combination,” she said. “The real key is to have a good ‘nick’; that is, male and female (male sterile) plants need to bloom at the same time for pollination and seed production.”
       Once the flowers are blooming, the honey bees come in to do their part.  Honey bees move the pollen from the male to the female lines to produce seed.
       That seed has a high value, both in the United States and abroad. Ukraine and Russia are the biggest importers of California’s hybrid sunflower seed. Of that seed, most of it comes from the Sacramento Valley, for a number of reasons.
       “We have hot, dry weather that favors really high seed quality. But while our days are really hot, our nights are cooler. We get breezes from the San Francisco bay area that help cool things off at night, as opposed to the southern part of the valley where it’s hot day and night. The climate favors pollination. Bees, and humans, work better when things cool down a bit,” said Long. 
       “There’s also a lot of industry support in my area of the state. We have a number of companies based here that are involved in hybrid seed production, and we are right by UC Davis, which has a bio seed center that has really provided high skilled labor and good information on seed biology and seed breeding.”
       Sunflower seeds aren’t the only seeds grown in the area; carrots, onions, melons and squash seeds are also grown here. The Sacramento Valley also has good field isolation, which Long says is another important factor in hybrid seed production.
       “It can be challenging to grow certified seed because there are a lot of different requirements and regulations to ensure that you have really, really high-quality, high-purity seed.  Some of the standards require you have isolation of at least a mile and a quarter between two different varieties of sunflower.  Sometimes that can be even greater,” she explained. “The flowers can also be isolated by different blooming times.”
       Maintaining field isolation can be difficult with so many seed companies competing for sunflower acreage. The California Crop Improvement Association (CCIA) has created crop isolation maps that can be accessed online. Seed companies mark the areas they’re planting so other companies can see that and work around planting and blooming dates.
       In a normal year, Long said, they’ll get three plantings. This year, she expects it will be closer to two because of an unusually wet spring.
       Irrigated fields must also be rotated out of sunflower every two years; non-irrigated fields must be rotated every three years. Most of the valley is irrigated, so a typical rotation includes processing tomatoes (used for ketchup), wheat and then sunflower.
       California’s sunflower area totaled more than 50,000 acres in 2017, up from 30,000 acres in 2008.  “Acreage is increasing, which is exciting. We did have a drop in seed production from 2013 to 2015 because of the conflict between Russia and Ukraine,” Long said. “A number of seed companies did not want to send seed to that area for fear they wouldn’t get paid. The markets are critical, especially the international markets. We see a drop in production if those markets are volatile.”
       Yields have steadily increased too, from around 1,000 lbs/ac in 2008 to just over 1,300 lbs/ac in 2015, in part due to more-uniform stands.  Hybrid sunflower seeds remain a high-value specialty row crop in California, at around $1.20 a pound.
       “It is an intensely farmed crop. While we’re getting $1.20 a pound, we are also spending half that to get a high-quality seed crop. But it’s a profitable crop.”
       A profitable crop that Long said has managed to stay disease- and insect-free for the most part.
       “Disease pressure is low in California, in part because of our hot, dry summers. We don’t get those summer thunderstorms that you see in the Dakotas and other sunflower-producing states. Those storms bring pathogens and disease,” said Long. “We do have some lygus bugs, which are a big problem in confectionery seed production; but we’re not really sure what they do to sunflower seed production. There are reports of a number of sunflower heads with seeds that are blank. Some think it’s a result of poor pollination, others think it might be lygus bugs killing the embryo. We’ve just started working on a research project to determine the real impact of lygus bugs on sunflower.”
       Long and her team have caged several sunflower heads, some with lygus bugs and some without, on self-pollinating lines. They’ll repeat the process several times and hope to have some information later this fall.  She’s also working on a hybrid production manual, something the state of California has never had for sunflower. That should be out later this fall as well. Long wants to do what she can to ensure that the future of hybrid sunflower seed production in California remains bright. — Jody Kerzman

Spanish Market for Confection In-Shell
       ¡Pásatelo pipa con las pipas!
       Translation: “Have a blast with seeds!”
       That’s just one of many slogans being used to promote U.S.-grown sunflower seeds in Spain.  Spain has long been a top importer of U.S. confection sunflower, and efforts by the team at Ketchum and Lori McGehee, international marketing consultant for the National Sunflower Association, should help ensure a strong market for years to come.
       McGehee, based in Denver, Colo., presented at one of the breakout sessions held at the 2017 NSA Summer Seminar in Rapid City, S.D., in June. She works to promote U.S. sunflower in Spain, among other countries.
       The National Sunflower Association runs two programs in Spain:? a consumer program and a trade program. McGehee said the main objective of the consumer program is to raise consumer demand and boost sales of sunflower seeds, known as “pipas” in Spain.
       “We want to make pipas the real star of our plan,” McGehee explained. “The idea is to continue supporting health messages and identifying Pipas USA with moments of pleasure, leisure time, friendship, fun and social events. We try to highlight the values of pipas—they are a healthy, non-GMO snack, which is important to people in Spain.”
       The NSA uses several methods to spread the word about pipas.  Advertorials — an advertisement that looks like editorial content in a magazine or newspaper —have been a helpful tool.  “We have reached over 1.7 million readers through advertorials,” said McGehee.  “Advertorials are a great way to get the message across, as they look like an actual article and we can fill the article with extensive information like recipes and health data.”
       Press releases, billboards and social media are also important tools in creating demand for U.S. grown sunflower seeds.
“Social media, especially Facebook, has been a great help in spreading the message in Spain,” said McGehee.  “Of Internet users in Spain, 81% have social media. Facebook is the most used, and posts that include video are especially well received. We use Facebook to position pipas as a fun and healthy snack, to share client news, and to share monthly promos and videos. We have over 6,500 followers on our Facebook page, and that number continues to climb every day.”
       The objectives of the NSA’s trade program are similar. They include:
       •  Make the U.S. sunflower seed industry the reference for purchasing the product and for delivering high-quality product and excellent service.
       •  Meet present and future industry and government challenges that could directly or indirectly affect the snack sector.
       •  Obtain more support from trade companies that can lead to improved communication campaigns.
       •  Become more visible to trade buyers by generating relevant marketing and trade support tools.
       “Our ad plan includes placement in key trade media that are read by our target clients. We highlight the same healthy, non-GMO values of pipas as we do in the consumer program.  Anytime we can get U.S. growers involved we try to do that as well. It helps to give the product a face and a story,” explained McGehee. “We also develop quarterly newsletters with interesting news about pipas and reinforce that pipas USA is the leader. Press releases and one-on-one interviews are a couple of other tools that have shown great success.”
       A look at the numbers shows the plans are working.  In 2016, ads reached nearly 200,000 targeted readers, and press releases targeted nearly 600,000 readers.
       “Sunflower seeds are the number -one nut consumed in Spain — and more than 50% of what is consumed is from the United States,” said McGehee. “Our product is known as the premium product, and our exporters provide the good service to the trade in Spain.  The U.S. exporters and this promotional program have helped keep Spain the number-one export destination for the U.S.” — Jody Kerzman

Taking Downy Mildew Protection to New Heights
       “Taking Downy Mildew Protection to New Heights” was the title of a special breakout session at the 2017 NSA Summer Seminar.  Its discussion focused on Plenaris™, the newly released fungicide seed treatment from Syngenta.  Among the presenters were Syngenta personnel, along with Sam Markell, North Dakota State University plant pathologist who has conducted research on Plenaris.
       Plenaris contains oxathiapiprolin (licensed from DuPont), a novel chemistry with a new mode of action for control of fungal disease caused by the oomycetes group of micro-organisms.  For sunflower producers, the most important one by far is downy mildew. 
       Plenaris is available commercially in the U.S. as of 2017.  Its next commercial introduction will occur in Argentina.
       The research effort by Markell and his NDSU colleagues was led by former Ph.D. student Dr. Ryan Humann.  His work demonstrated consistently strong performance by Plenaris for downy mildew control across all tested locations, environments, disease pressure levels and pathogen races.  In three field trials in 2015 at Fargo, for example, seeds of a susceptible sunflower hybrid were treated with different rates of two labeled fungicides — azoxystrobin (Dynasty®) and acibenzolar-S-methyl (Bion®) — as well as oxathiapiprolin (Plenaris), which was still experimental at that time.  They were tested against three different races (710, 734 and 710+) of Plasmopara halstedii (downy mildew) in inoculated trials.  “All treatments containing fungicides had significantly lower incidence levels compared to the non-treated check,” they reported.  And, both of the oxathiapiprolin treatments (9.4 and 18.8 micrograms/seed) showed significantly lower disease incidence levels — just 0 to 1.0% — when compared to the two Dynasty treatment levels (12-18%) and the non-treated check (35-42%).  There was no phytotoxicity at any rate.
       Genetic resistance remains a very important component of a management program, and Plenaris is not recommended for use as a stand-alone product for downy mildew resistance management in order to preserve hybrids’ genetic resistance to the greatest degree possible.  “Plenaris complements the leading Syngenta downy mildew portfolio consisting of Apron XL®, Dynasty and Bion and will provide a unique ability to offer four different modes of actions to battle against this pathogen,” Syngenta states. — Don Lilleboe       
       Other speakers during the 2017 NSA Summer Seminar included Travis Maddock, Jeff Kenninger and Brandy Edland. 
       Maddock, with Dakota Global Consulting, focused on the Food Safety Modernization Act (FMSA): what it entails and how it may impact sunflower processors.  Identified by the FDA as the most sweeping reform of food safety laws in seven decades, the main goal of the FMSA is to ensure safety of the U.S. food supply by shifting the focus of federal regulators from responding to contamination over to preventing it.
       Kenninger and Edland, with Sheyenne Tooling & Manfacturing, makers of the “Sunmaster” system, discussed sunflower harvesting technology and provided tips for making harvest more efficient.        
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