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Corn conditions unchanged... USDA rated 65% of the corn crop as “good” to “excellent” as of Sunday, unchanged from the previous week, though there was a one-point decline in the top category. Analysts expected a one-point drop it the “good” to excellent” rating. The “poor” to “very poor” rating held at 12%.
| This week | Last week | Year-ago |
Very poor | 4 | 4 | 6 |
Poor | 8 | 8 | 12 |
Fair | 23 | 23 | 29 |
Good | 50 | 49 | 44 |
Excellent | 15 | 16 | 9 |
USDA reported 92% of the crop was dented (91% average) and 61% was mature (55%). Corn harvest advanced five percentage points to 14%, three points ahead of average.
Soybean conditions unchanged... USDA rated 64% of the soybean crop as “good” to “excellent,” unchanged from last week. Analysts expected a one-point decline. The “poor” to “very poor” rating held at 11%.
| This week | Last week | Year-ago |
Very poor | 3 | 3 | 6 |
Poor | 8 | 8 | 12 |
Fair | 25 | 25 | 32 |
Good | 52 | 52 | 42 |
Excellent | 12 | 12 | 8 |
USDA reported 65% of the crop was dropping leaves, eight points ahead of average. Soybean harvest advanced seven points to 13%, five points ahead of average.
Cotton conditions decline... USDA rated 37% of the cotton crop as “good” to “excellent,” down two points from the previous week. The “poor” to “very poor” rating increased seven points to 33%. The Texas crop was rated 22% in the top two categories and 48% in the bottom two.
| This week | Last week | Year-ago |
Very poor | 14 | 10 | 20 |
Poor | 19 | 16 | 22 |
Fair | 30 | 35 | 28 |
Good | 32 | 34 | 25 |
Excellent | 5 | 5 | 5 |
The cotton crop had 63% with bolls open, three points ahead of average. Harvest stood at 14%, two points ahead of average.
Spring wheat harvest just about wrapped up... USDA reported spring wheat harvest advanced to 96%, one point ahead of average. Harvest was finished in Minnesota, South Dakota and Washington. Harvest stood at 93% in top producer North Dakota, equal to the five-year average.
Winter wheat planting one-quarter complete... Winter wheat planting increased 11 points over the past week to 25%, one point ahead of average. Planting stood at 29% in Texas (27% average), 16% in Oklahoma (19%) and 16% in Kansas (17%). The winter wheat crop was 4% emerged, one point behind normal for the third week of September.
Why it’s taking so long to get more guidance on 45Z tax credit program... There are a few key reasons why guidance on the 45Z clean fuel production tax credit program is taking a long time to be issued:
· Complexity of the program: The 45Z credit is a new, technology-neutral credit based on carbon intensity scores, which is more complex than previous biofuel tax credits. Developing the emissions rate tables and carbon intensity scoring methodology is technically challenging.
· Interagency coordination: The Treasury Department and IRS need to coordinate with other agencies like the Department of Energy to develop the emissions rate tables and carbon intensity methodologies.
· Stakeholder input: The government is likely taking time to gather and incorporate input from various industry stakeholders on how to structure and implement the credit.
· Technical details: Determining specifics like eligible fuels, feedstocks and how to calculate and verify carbon intensity scores requires careful consideration.
· Transition from existing credits: The 45Z credit will replace several existing biofuel credits in 2025, so the transition needs to be carefully managed.
· Limited resources: Treasury and IRS have been working on implementing many new tax provisions from recent legislation, potentially straining their resources.
· Desire for accuracy: Given the credit’s importance for clean fuel investment, the government likely wants to ensure the guidance is comprehensive and accurate before releasing it.
Impact of delay. The lack of full guidance is causing uncertainty for fuel producers trying to plan investments and production for when the credit takes effect in 2025. However, the government has issued some initial guidance on registration requirements to help producers prepare.
The 45Z Clean Fuel Production Credit differs from previous fuel production credits in several ways:
· Technology-neutral approach: Unlike previous credits that targeted specific types of fuels, the 45Z credit is technology-neutral and applies to any transportation fuel that meets the emissions reduction criteria.
· Carbon intensity-based: The credit amount is calculated based on the fuel’s carbon intensity score, rather than a flat rate per gallon. Fuels with lower emissions receive a larger credit.
· Producer credit vs blender credit: The 45Z credit goes to the fuel producer, whereas some previous credits like the $1.00 per gallon biodiesel tax credit went to fuel blenders.
· Emissions rate requirement: To qualify, fuels must have an emissions rate no greater than 50 kg of CO2e per mmBTU.
· Registration requirement: Producers must be registered with the IRS before claiming the credit, which is a new requirement.
· Limited duration: The 45Z credit is currently set to apply only to fuels produced from 2025-2027, whereas some previous credits were repeatedly extended.
· Replaces multiple credits: The 45Z credit will replace several existing fuel credits that are set to expire, including those for biodiesel, renewable diesel and alternative fuels.
· Potentially larger credit amounts: For fuels meeting certain labor requirements, the credit could be up to $1.75 per gallon for sustainable aviation fuel or $1.00 per gallon for other fuels, which is potentially higher than some previous credits.
The 45Z Clean Fuel Production Credit has several important implications for sustainable aviation fuel (SAF) production:
· Incentivizes SAF production: The 45Z credit provides a significant financial incentive for producers to manufacture SAF, with a maximum credit of $1.75 per gallon for aviation fuels that meet certain requirements.
· Technology-neutral approach: Unlike previous credits that targeted specific fuel types, the 45Z credit is technology-neutral. This means any SAF that meets the emissions reduction criteria can qualify, potentially spurring innovation in SAF production methods.
· Carbon intensity-based: The credit amount is calculated based on the fuel’s carbon intensity score. SAF with lower emissions receives a larger credit, encouraging producers to minimize the carbon footprint of their production processes.
· Replaces previous credits: The 45Z credit will replace several existing fuel credits set to expire, including the current sustainable aviation fuel credit (Section 40B).
· Registration requirement: SAF producers must register with the IRS before claiming the credit, which is a new requirement compared to previous fuel credits.
· Emissions reduction threshold: To qualify for the credit, SAF must have an emissions rate no greater than 50 kg of CO2e per mmBTU.
· Potential for higher credit amounts: For SAF meeting certain labor requirements, the credit could be up to $1.75 per gallon, which is potentially higher than some previous credits.
· Uncertainty due to delayed guidance: The lack of final guidance on how to calculate carbon intensity scores is causing uncertainty for SAF producers and potentially delaying investments in new production facilities.
· Impact on feedstock choices: The credit may influence which feedstocks are used for SAF production, depending on how carbon intensity is calculated for different agricultural inputs.
· Transition period: The shift from the current SAF credit (Section 40B) to the new 45Z credit in 2025 is creating some challenges for producers in planning future production and sales.
Bottom line: While the 45Z credit has the potential to significantly boost SAF production, the current lack of detailed guidance is causing some uncertainty in the industry. Producers and investors are eagerly awaiting further clarification from the Treasury Department to make informed decisions about SAF production and investments.
USDA study reveals minimal impact of renewable energy projects on agricultural land... A recent USDA study found the majority of agricultural land near solar and wind farms remains in agricultural use, despite the expansion of renewable energy projects. This finding challenges concerns about potential land use competition between renewable energy development and agriculture.
Solar and wind farmland use:
· Renewable energy projects occupied an estimated 424,000 acres of rural land in 2020.
· Most projects installed in recent years are located on agricultural land.
Land cover changes:
· Cropland or pasture-rangeland typically maintained the same land cover after the addition of solar or wind development.
· Land cover changed on approximately 20% of solar sites and only 4% of wind turbine sites.
Agricultural land persistence:
· About 85% of cropland and pasture-rangeland near solar farms remained in agricultural production.
· Wind turbine development showed even higher compatibility with agricultural production.
Regional differences and project distribution
Solar Projects:
· Most common in the West, mid-Atlantic, and Northeast regions.
· 43% of rural solar projects installed from 2012-2020 were on cropland.
· The Midwest had the highest share (70%) of solar installations on cropland.
Wind turbines:
· Concentrated in areas with consistent, high wind speeds.
· Most prominent in the Plains, followed by the Midwest and West.
· Installations in the Plains and West were primarily on pasture and rangelands.
Implications. The study suggests renewable energy development can coexist with agricultural production in many cases. However, the researchers noted these projects have local socioeconomic effects on rural communities, providing benefits such as leasing and tax revenue while also potentially imposing costs related to landscape changes, noise, and altered views. As the U.S. continues to expand its renewable energy capacity, with wind and solar accounting for 10.7% of electricity generation, this research provides insights into the relationship between renewable energy development and agricultural land use.
Panel recommends USDA streamline meat plant inspections with new technology... The National Advisory Committee on Meat and Poultry Inspections (NACMPI) urged USDA to adopt new technologies to streamline inspections in meat and poultry plants. Recommendations include providing inspectors with government-issued phones and tablets to document findings, allowing video chat for communication and using technology that converts voice or handwriting into digital text. These measures aim to reduce inspectors’ workloads and speed up inspections. While some changes, such as remote inspections, may reduce delays and costs for companies, others, like video recording inside plants could raise competitive concerns.