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Market Matters Blog           03/20 11:08
US Infrastructure Report Card: Waterways, Dams Get Failing Grade
DDG Prices Lower as Demand Slows
Opening Day on UMR; First Barge of 2017 Reaches St. Paul, Minnesota
DDG Prices Lower On Slowing Demand, Large Supplies
Soybeans or Corn: Sow What?
Renewable Rumors Plus Time
Early Start to Grain Shipping and Planting Season? 
Hard Amber Durum: The Noodle Wheat Faces Challenges
Corn Exports, Please?
Will Latest Executive Order Put the Brakes on Pending Truck Regulations?

US Infrastructure Report Card: Waterways, Dams Get Failing Grade

   The nation's infrastructure received an average grade of D+ in the American 
Society of Civil Engineers' (ASCE) 2017 Infrastructure Report Card released on 
March 9. The report is an assessment of the conditions of the nation's 
infrastructure across 16 categories.

   Of the 16 categories graded, six are essential to the success of commodity 
shipments and, in particular, agriculture shipments. Those categories are 
bridges, which were graded C+, ports C+, railroads B, roads D-, levees D and 
inland waterways D. 

   While our roads and bridges are in dire need of repair, the poor condition 
of our inland waterways, specifically our aging locks and dams, remains a 
detriment to our infrastructure. 

   Here is a link to the entire report card: 

   The U.S exports nearly one quarter of the grain it produces. When it comes 
time to move these crucial commodities to export grain elevators, barges 
account for the transporting of 61% of corn, 42% of soybeans, 40% of wheat and 
26% of sorghum, according to the National Grain and Feed Association (NGFA).

   Since most of the corn and soybean crops in the U.S. are grown close to the 
Mississippi River system, shipping by barge is the most economical method. One 
barge can carry the same quantity as 15 jumbo hopper cars or 58 large 
semi-trucks. In near-perfect conditions on the river, barges are tied together 
into 15-barge "tows," carrying the same quantity as 2.25 100-car trains and 870 
dry vans, 53 feet long. A tow of 15 barges has a total capacity of 787,000 

   There are currently 28 locks and dams on the Mississippi River. This series 
of locks and dams is operated by the U.S. Army Corps of Engineers and maintains 
a 9-foot channel on the Mississippi from St. Paul, Minnesota, to St. Louis, 
Missouri. As the aging locks and dams continue to deteriorate, especially when 
damaged by floods, the Corps has to make costly repairs, and in some cases, can 
only make a temporary fix. The USACE has said that it is "unable to adequately 
fund maintenance activities to ensure the navigation system operates at an 
acceptable level of performance." Vessels may be delayed for hours while aging 
locks are shut down for maintenance and repair. That can cost shippers money, 
and in some cases, those costs can be passed on to farmers in the way of lower 
prices for their grain.

   Mike Steenhoek, executive director of the Soy Transportation Coalition, told 
me via email, "Constructing and maintaining infrastructure is very expensive 
and requires years of planning and execution. It is much more effective when 
government can provide greater certainty of funding over a number of years 
rather than a surge of funding in one year and a scarcity of funding the next. 
Because we do not provide this certainty, especially with regards to our lock 
and dam inventory, cost escalations and project delays become commonplace."

   On March 9, the NGFA joined a small group of leaders from other farm, 
agribusiness, and rural-focused organizations for a meeting at the White House 
with key staff from President Donald Trump's National Economic Council. During 
the meeting, the NGFA highlighted the importance of infrastructure investment 
in the "dilapidated locks and dams" on the inland waterways, as well as ports, 
and noted that an estimated $8.7 billion is needed to complete the 25 
lock-and-dam projects already authorized by Congress, many of which are on the 
Upper Mississippi and Illinois River System. The NGFA said that, in recent 
years, "the number of unscheduled disruptions attributable to malfunctioning 
inland waterways locks has increased 700%."

   That meeting followed a letter written to Trump on Feb. 22, 2017, signed by 
NGFA and more than 200 other organizations (spearheaded by the Farm Credit 
Council), encouraging him to focus on rural infrastructure. The letter noted, 
"Transportation infrastructure improvement is the most obvious need in rural 
communities, but not the only one. Highways, bridges, railways, locks and dams, 
harbors and port facilities all need major investment if we are to continue 
efficiently getting our agricultural products to market."

   Steenhoek added, "I like to argue that agriculture has one of the most 
diverse and elongated supply chains of any industry in existence. We are 
heavily exposed to and dependent upon our system of roads and bridges, highways 
and interstates, inland waterways, railroads, and ports. Farmers do not have 
the luxury of locating themselves in proximity to infrastructure. Rather, 
farmers hope infrastructure locates in proximity to them. Our viability as an 
industry depends upon having each of these modes being properly maintained and 
providing seamless transition from one to the other." 

   The Soy Transportation Coalition (STC) funded and disseminated an analysis a 
few years ago that suggested indexing the fuel tax to inflation so that revenue 
to improve our roads and bridges can better keep pace with the costs of doing 
so. Steenhoek noted that, "It is also important for federal, state, and local 
government to demonstrate better stewardship of taxpayer dollars when 
maintaining and improving infrastructure." 

   Here is a link to the STC website, which includes analysis and studies 
related to U.S. infrastructure issues that affect agriculture:    

   "Before the government asks more from the taxpayer, it should ask more from 
itself. There are opportunities to institute and employ best practices so that 
taxpayer dollars can be stretched further," Steenhoek said.

   Mary Kennedy can be reached at 

   Follow Mary Kennedy on Twitter @MaryCKenn

DDG Prices Lower as Demand Slows

   The DTN average dried distillers grains, or DDG, spot price was down $2 per 
ton from two weeks ago, at $92, for the week ended March 16. Of the 39 
locations from which DTN collects spot prices, 16 bids ranged from $2 to $10 
lower, one bid was $5 higher and the balance of the prices were unchanged.

   Prices moved lower the past week as markets remained quiet, adding to the 
pressure of ample supply and lack of buyers. Strong run times continue as was 
reported by the U.S. Energy Information Administration on Wednesday showing 
ethanol plant production for the week ending March 10 was up from the prior 
week and the largest since early February. In the coming weeks some maintenance 
downtimes should help alleviate the heavy supplies, causing pipelines to 
trickle lower. 

   According to Informa Economics, for now, ample supply and positive margins 
suggest plants will continue to have runtimes above year-ago levels causing 
supply to be a burden for price. "Relative prices will continue to stay below 
average levels and there is a bias for prices to remain range bound."

   CIF NOLA (New Orleans, Louisiana) dried distillers grains with solubles, or 
DDGS, prices for the week ended March 16 were up 5 cents to up 1 cent for March 
compared to last week, at $120 to $125 per ton and up 1 cent to unchanged for 
April at $122 to $125. U.S. Grains Council in its March 16 newsletter reported 
that last month, Saudi Arabia buyers purchased 18,000 metric tons of U.S. DDGS, 
a relatively large amount and a dramatic increase from total sales of just 
8,400 metric tons in 2014. While the dairy and poultry sectors in Saudi Arabia 
are large and modern with an estimated annual compound feed demand of 6.9 
million metric tons, USGC's progress in persuading the Saudi industry to 
utilize DDGS has been limited by shipping distance and local subsidies that did 
not incentivize use of the product. 

   Now, those policies are changing, and DDGS is priced well in the market, 
USGC said. As a result, Saudi buyers and others in the region including in 
Egypt, Turkey, Morocco and Pakistan are taking a closer look at U.S. DDGS. Kurt 
Shultz, USGC senior director for global strategies said, "The timing of the 
purchases by Saudi Arabia could not be better. The DDGS export market has been 
under pressure with a slowdown in exports to key markets like China and 
Vietnam. However, other countries like Saudi Arabia are helping to fill that 

                   CURRENT         CURRENT      CHANGE
COMPANY       STATE               3/16/2017    3/9/2017
Bartlett and Company, Kansas City, MO (816-753-6300)
              Missouri           Dry             $118    $118   $0
                                 Modified        $60      $60   $0
CHS, Minneapolis, MN (800-769-1066)
              Illinois           Dry             $95     $100   -$5
              Indiana            Dry             $90      $95   -$5
              Iowa               Dry             $90      $95   -$5
              Michigan           Dry             $85      $88   -$3
              Minnesota          Dry             $85      $90   -$5
              North Dakota       Dry             $90      $95   -$5
              New York           Dry             $105    $115  -$10
              South Dakota       Dry             $85      $90   -$5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
              Kansas             Dry             $103    $105   -$2
POET Nutrition, Sioux Falls, SD (888-327-8799)
              Indiana            Dry             $90      $90   $0
              Iowa               Dry             $93      $95   -$2
              Michigan           Dry             $90      $90   $0
              Minnesota          Dry             $90      $93   -$3
              Missouri           Dry             $115    $115   $0
              Ohio               Dry             $90      $90   $0
              South Dakota       Dry             $90      $95   -$5
United BioEnergy, Wichita, KS (316-616-3521)
              Kansas             Dry             $100    $102   -$2
                                 Wet             $45      $45   $0
              Illinois           Dry             $100    $102   -$2
              Nebraska           Dry             $100    $102   -$2
                                 Wet             $35      $35   $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
              Illinois           Dry             $95      $95   $0
              Indiana            Dry             $90      $90   $0
              Iowa               Dry             $95      $95   $0
              Michigan           Dry             $95      $95   $0
              Minnesota          Dry             $85      $85   $0
              Nebraska           Dry             $95      $90   $5
              New York           Dry             $120    $120   $0
              North Dakota       Dry             $100    $100   $0
              Ohio               Dry             $98      $98   $0
              South Dakota       Dry             $90      $90   $0
              Wisconsin          Dry             $90      $90   $0
Valero Energy Corp., San Antonio, TX (402-932-5901)
              Indiana            Dry             $80      $80   $0
              Iowa               Dry             $85      $85   $0
              Minnesota          Dry             $80      $80   $0
              Nebraska           Dry             $85      $85   $0
              Ohio               Dry             $90      $90   $0
              South Dakota       Dry             $80      $80   $0
California           $150            $150         $0
Western Milling, Goshen, California (559-302-1074)
              California         Dry             $163    $166   -$3
*Prices listed per ton.
              Weekly Average                     $92      $94   -$2
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   Mary Kennedy can be reached at

   Follow Mary Kennedy on Twitter @MaryCKenn

Opening Day on UMR; First Barge of 2017 Reaches St. Paul, Minnesota

   The Upper Mississippi River is seeing an early opening to the 2017 shipping 
season thanks to warm weather in February melting ice on Lake Pepin. That's 
good news for grain and feed shippers as it provides another route to ship 
commodities downriver.

   On Feb. 15, the U.S. Army Corps of Engineers (USACE) St. Paul District made 
their first ice measurement on Lake Pepin. Pepin is located 60 miles downriver 
from St. Paul, Minnesota, and is the widest naturally occurring part of the 
Mississippi River. It is the last roadblock for barges waiting to come upriver 
to open the spring shipping season. 

   When the USACE returned to Lake Pepin March 1, a Corps survey crew declared 
that the Lake was open and no future measurements were scheduled for 2017. When 
I mention March Madness, you likely think it's time to fill out your NCAA 
basketball bracket. In Minnesota this year, it meant spring-like weather in 
February melting ice on many of the lakes, a snowstorm in March and an early 
start to the Upper Mississippi River (UMR) shipping season. On March 9, the 
U.S. Army Corps of Engineers (USACE), St. Paul District, reported that the 
Motor Vessel Stephen L. Colby locked through Lock and Dam 2, near Hastings, 
Minnesota, around 6 a.m. It was pushing 12 barges en route to St. Paul, 

   The Corps considers the first tow to arrive at Lock and Dam 2 as the 
unofficial start of the navigation season, because it means all of its locks 
are accessible to commercial and recreational vessels. The earliest date for an 
up-bound tow to reach Lock and Dam 2 was March 4 in 1983, 1984 and 2000. The 
average start date of the navigation season is March 22. In 2016, the season 
opened March 13 in the early morning hours when two tows made their way through 
Lock and Dam 2.

   An earlier start to the shipping season is good news for grain and feed 
shippers because it provides another source for loading commodities heading 
downriver. This will ease some pressure on them, especially since rail 
secondary freight costs have become expensive as the U.S. rail system works 
itself out of the logistic issues brought on the past two months by heavy snow, 
rain and flooding in and heading to most of the U.S. ports. Corn and soybean 
basis levels have been mixed due to the high freight costs and also due to 
demand fluctuations. The cash prices have also suffered, which is keeping 
farmers from getting too excited about selling anything. For the week ending 
March 10, the May soybean futures lost 31 cents and May corn lost 16 1/2 cents 
with the basis unchanged on average.


   Because of the warm weather and little ice coverage, the St. Lawrence Seaway 
will open early this year on March 20. After opening the 2016 season on March 
21, the Seaway closed Dec. 31, which tied with 2008 and 2013 for the longest 
navigation season. The Seaway consists of five Great Lakes (Superior, Michigan, 
Huron, Ontario and Erie); the St. Lawrence River and Seaway; 16 sets of locks; 
and a series of canals, rivers, and inland lakes that connect U.S. and Canadian 
centers of mining, manufacturing, and agriculture to the global marketplace, 
according to the Duluth Seaway Port Authority. Agriculture shipments are a big 
part of the Seaway shipping volume.

   According to the St. Lawrence Seaway Management Corporation records, grain 
movements posted a strong performance for a third consecutive season, moving 
11.266 million metric tons in 2016, which was above the five-year average and 
up 407,000 metric tons from 2015. Since 2014, U.S. grain traffic through the 
Seaway has increased 30%. In the Port of Duluth-Superior (Twin Ports), grain 
shipments were running nearly 25% above the Port's five-year average. 

   Adele Yorde, public relations director for Duluth Seaway Port Authority, 
told me, "Our Great Lakes shipping season is tied to the opening of the Soo 
Locks, set again this year for March 25. We'll see engineers and deck crews 
starting to show up in town for fit-out sooner than that, but no vessels moving 
until March 22. Looks like the first outbound vessel may be the Paul R 
Tregurtha, departing with a load of coal for an intra-lake delivery up to 
Silver Bay." 

   Yorde noted that the opening of the Seaway means salties (ocean-going 
vessels) will be making their way inland sooner this year to the Port of 
Duluth-Superior. The first saltie entering the port signals the opening of the 
grain shipping season out of the northern Minnesota-Wisconsin port. In 2016, 
the first saltie entered the Duluth Ship Canal April 3.

   "It's been a very odd winter here in the Twin Ports -- waves lapping our 
shoreline in the harbor where there is typically thick ice, plus seeing nothing 
but deep-blue water past the Aerial Lift Bridge in January and February," said 

   Odd indeed. The U.S. Coast Guard Cutter Alder normally starts breaking ice 
in the Twin Ports to open the canal ahead of the shipping season around March 
8. This season, Mother Nature took care of that for her.

   Mary Kennedy can be reached at 

   Follow Mary Kennedy on Twitter @MaryCKenn

DDG Prices Lower On Slowing Demand, Large Supplies

   The DTN average dried distillers grains, or DDG, spot price was down $4 per 
ton from two weeks ago, at $94, for the week ended March 9. Of the 39 locations 
from which DTN collects spot prices, 27 bids ranged from $2 to $20 lower, two 
bids ranged from $5 to $8 higher and the balance of the prices were unchanged.

   Prices moved lower the past week as supplies have become heavy and demand 
has slowed. One merchandiser told me that besides warm weather slowing feed 
use, pastures are greening and animals can be turned out to pasture to feed. 

   While the U.S. Energy Information Administration said ethanol plant 
production slowed for the week ending March 3, we will need to see more of a 
slowdown to keep supplies from becoming burdensome. The opening of the 
Mississippi River on March 9 as the first tow reached St. Paul, Minnesota, 
should be supportive to shippers and allow them to move more product than to 
just rely on trucks and rail cars, which have seen some weather-related 
logistic issues the past few months.

   The value of DDG relative to corn for the week ended March 9 was lower at 
73.16% and the value of DDG relative to soybean meal was lower at 29.00%. The 
cost per unit of protein for DDG was lower at $3.76 compared to the cost per 
unit of protein for soybean meal which was lower at $6.82. The low relative 
prices indicates that prices may be near the bottom, but without a rebound in 
exports, prices could continue to work lower.

   CIF NOLA (New Orleans, Louisiana) dried distillers grains with solubles, or 
DDGS, prices for the week ended March 9 were down 8 cents to down 4 cents for 
March, at $115 to $124 per ton and down 1 cent to down 7 cents for April at 
$121 to $125. Export demand nearby has remained slow, but the January numbers 
were up compared to one year ago totaling 937,628 metric tons in January, up 
17% from a year ago. The U.S. Census Bureau said Mexico was the top export 
destination in January, accounting for 19% of total exports, followed by Turkey 
and China. China's January purchase of 87,310 metric tons was down 60% from a 
year ago and Vietnam was notably absent. 

   A merchandiser told me that in early February, there was chatter back and 
forth between USDA's Animal and Plant Health Inspection Service, or APHIS, and 
Vietnam's Plant Protection Department about what fumigants can be accepted for 
use on containers, who would monitor the fumigation in the United States, what 
documentation would be acceptable, along with other issues about the process 
from start to finish. After speaking with the rest of the industry, APHIS is 
expected to send a final proposal to Vietnam's PPD for approval, but so far 
there is no word they have done so. 

   One of the concerns is it may be possible a forbidden insect actually enters 
the DDGS container from other unrelated containers while en route to Vietnam on 
a ship. A merchandiser told me that U.S. shippers have told Vietnam this kind 
of infestation is not possible in bulk ships because they are fumigated at port 
and then aired out while heading to Vietnam and are not exposed to insects like 
containers may be. Also, fumigation of an entire ship full of DDGS is more 
reliable than container fumigation. 

   Shippers hoped this would change the PPD's mind and at least allow bulk U.S. 
DDGS to start shipping, but that has not yet happened. Regardless, no matter 
what happens between APHIS and the PPD, a merchandiser told me that none of 
this may be settled until summer or later.

   Meanwhile, Vietnam has been buying DDGS from Canada and other countries, 
ignoring the U.S. that used to be their No. 1 source. On top of that, DDGS 
prices in Vietnam are close to $100 per ton higher than U.S. prices. That in 
itself makes no sense, but nothing is changing in the near future to fix it.

                                                CURRENT      CURRENT
COMPANY    STATE                                3/9/2017    2/16/2017    CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri              Dry              $118         $122       -$4
                                 Modified         $60          $60         $0
CHS, Minneapolis, MN (800-769-1066)
           Illinois              Dry              $100         $100        $0
           Indiana               Dry              $95          $100       -$5
           Iowa                  Dry              $95          $100       -$5
           Michigan              Dry              $88          $88         $0
           Minnesota             Dry              $90          $97        -$7
           North Dakota          Dry              $95          $97        -$2
           New York              Dry              $115         $115        $0
           South Dakota          Dry              $90          $97        -$7
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas                Dry              $105         $105        $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana               Dry              $90          $90         $0
           Iowa                  Dry              $95          $96        -$1
           Michigan              Dry              $90          $90         $0
           Minnesota             Dry              $93          $95        -$2
           Missouri              Dry              $115         $115        $0
           Ohio                  Dry              $90          $90         $0
           South Dakota          Dry              $95          $98        -$3
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas                Dry              $102         $110       -$8
                                 Wet              $45          $50        -$5
           Illinois              Dry              $102         $115       -$13
           Nebraska              Dry              $102         $105       -$3
                                 Wet              $35          $40        -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
           Illinois              Dry              $95          $95         $0
           Indiana               Dry              $90          $90         $0
           Iowa                  Dry              $95          $95         $0
           Michigan              Dry              $95          $90         $5
           Minnesota             Dry              $85          $90        -$5
           Nebraska              Dry              $90          $100       -$10
           New York              Dry              $120         $105       $15
           North Dakota          Dry              $100         $105       -$5
           Ohio                  Dry              $98          $90         $8
           South Dakota          Dry              $90          $95        -$5
           Wisconsin             Dry              $90          $95        -$5
Valero Energy Corp., San Antonio, TX (402-932-5901)
           Indiana               Dry              $80          $100       -$20
           Iowa                  Dry              $85          $100       -$15
           Minnesota             Dry              $80          $95        -$15
           Nebraska              Dry              $85          $95        -$10
           Ohio                  Dry              $90          $100       -$10
           South Dakota          Dry              $80          $90        -$10
           California                $150         $158         -$8
Western Milling, Goshen, California (559-302-1074)
           California            Dry              $166         $172       -$6
*Prices listed per ton.
           Weekly Average                         $94          $98        -$4
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

   Mary Kennedy can be reached at 

   Follow Mary Kennedy on Twitter @MaryCKenn

Soybeans or Corn: Sow What?

   USDA is estimating an increase in soybean acres this spring because the 
economics of doing so makes sense. But there are many who don't think that 
acres will increase by as much as the most recent predictions. I have talked to 
farmers around the Midwest about what their intentions are, and also to local 
elevators about what they have heard so far.

   "It's a little early to decide 100% what I want to plant," a farmer told me 
at the Minnesota Grain and Feed Association convention last week. "If I start 
planting corn and the going is good, I'm not going to stop." A few other 
farmers in southern Minnesota told me they will stick with their rotations and 
have no plans to change that up. 

   Brad Kremer, a farmer from Pittsville, Wisconsin, and a board member of the 
American Soybean Association (ASA), operates a family farm consisting of 1,200 
acres of soybeans and 1,800 acres of corn, wheat and alfalfa. He told me that 
his planting intentions are to plant "more soybeans, and in talking with 
farmers and the industry, it seems to be a bit of a trend in Wisconsin."

   In southeastern North Dakota, an elevator manager told me that planting 
beans this spring "is real popular across the entire state, with the biggest 
expansion in the north and west. Still, here spring wheat plantings are off 15% 
to 20%. Wouldn't need much more of a bump in September wheat and that could 
change by 5% to 10%. Corn acres steady, canola steady, sunflowers up some."

   Another manager in eastern North Dakota told me the plan is for more beans 
"but it'll be limited, they won't go all out. Rotations are too important to 
them." He said he sees bean acres up 10%, which will mostly take away from corn 
acres rather than other crops in his area.

   "We will see more test plots of soybeans, peas, lentils, oats, Garbanzo 
beans; you name it as farmers look for positive cash flow," said Jerry Cope, 
who does the grain marketing for Dakota Mill & Grain, Inc. in Rapid City, South 
Dakota. He added that there was still a lot of uncertainty. He said that the 
insurance date to start planting spring wheat is mid-March in his area, "so 
there is still time, and I would suspect a higher percentage of spring wheat 
than last year. Oil sunflower cash flow with 2,000-plus yields has been 
positive, so those acres will grow. Corn continues the westward migration." 

   Ryan Wagner, a producer from Roslyn, South Dakota, said, "As far as planted 
acreage goes, it's not hard to see that soybeans will net more per acre right 
now than corn, but I don't think it's a slam dunk that there will be a huge 
shift. If you pencil in last year's yields at current prices, it's a 
no-brainer, and soybeans would easily outperform corn again. But I think guys 
are worried last year's huge soybean yields were an anomaly, and they are more 
confident that they can repeat last year's corn yields than soybeans."

   Wagner told me that seed salesmen are saying that soybean seed sales are up 
quite a bit over last year, "but it's tough to judge strictly off that because 
farmers can easily switch their orders back to corn at the last minute if 
needed. Weather will play a huge role in acreage mix up here. It feels to me 
like guys will be a little quicker on the trigger to switch from corn to 
soybeans this year because of that price relationship, so if we are behind on 
corn planting in mid- to late-May, there will be a big switch."

   Bret Davis, a soybean producer from Delaware, Ohio, is an at-large member of 
the governing committee of the ASA. He said, "Corn and soybeans here are mostly 
set as was planted last year. Changes from here on will be made as spring 
weather allows."

   "I think we will see more corn than many are anticipating at this point," 
said Angie Setzer, vice president of grain at Citizens Elevator in Charlotte, 
Michigan. Her draw area runs throughout Michigan and into northern Ohio and 
Indiana. "Many of the customers I have, and the guys I've talked to across the 
countryside, are planning on keeping their rotational plans relatively 
unchanged," added Setzer. "I do have a few guys that are going to plant beans 
quite heavily versus what their normal planting intentions would be, but I also 
have customers that were planning on going heavy on beans that have changed 
those plans with the recent run up in corn."

   Rob Shaffer, a farmer from El Paso, Illinois, and an ASA board member, said, 
"As far as beans being the crop of choice, my farming operations will be 70% 
corn and 30% beans this year. But this is only because of my rotation is that 
way due to the farms we have picked up via cash rent." He added that he 
believes soybeans pencil out better than corn, but if corn gets to $3.80 cash 
for fall 2017, that may change the equation.


   Shaffer said that there was about 20% of old-crop soybeans left to sell 
until the futures rally on Feb. 28. "I am pretty sure that run-up bought a lot 
of beans," he said. "I know the basis widened out, so the processors and the 
river got a lot of corn and beans purchased."

   Davis told me that, "Ten percent of my beans are unpriced and basis isn't 
set on 20% of priced beans." 

   Kremer of Pittsville, Wisconsin, said that he has sold all of his old-crop 
soybeans, but most of his old-crop corn was in his bins waiting for a rally. He 
isn't alone; some of the farmers I met at the MGFA said they had "a fair 
amount" of old-crop corn left to sell after taking advantage of the higher 
soybean prices since harvest.

   In eastern North Dakota, one elevator manager told me that there is 15% of 
old-crop beans left on-farm with about 5% in elevator inventory on price later 
contracts. Another manager said that there is less than 20% of old-crop 
soybeans left in the bins in his area. 

   Setzer commented, "Most of my customers have very few of their soybeans left 
unhedged on the farm. I do have a few guys that have hedge-to-arrive contracts 
locked in and are waiting to see if we can capture any type of basis strength 
as we work into spring and early summer. For the most part, though, the amount 
of bushels left unsold on the farm is quite limited."

   Wagner of Roslyn, South Dakota, said that he also thinks 20% unsold on 
soybeans is pretty accurate, and he thinks corn is probably closer to 50% 
unsold right now. "Farmers probably sold more corn than soybeans on the recent 
rally just because there is more corn yet to sell, and we made new highs for 
the move. I think corn basis this summer could get pretty ugly with all the 
corn that needs to come to town, and there is a lot of concern about that."  

   Tim Luken, manager Oahe Grain in Onida, South Dakota, told me as far as 
soybeans in his area, there were not many around for sale. As for what was 
going to be planted in his area, he said he feels producers are more confused 
this year than in any other year. He, like many of us, can agree with the 
conversation I had with a farmer from southern Minnesota: If weather is good 
while planting corn, then corn will keep going in the ground. 

   So, the burning question about what will be planted this spring may not be 
answered until the planting season is nearly in full swing. And besides the 
cash price having an effect on that decision, Mother Nature will also have 
something to say about it as well.

   Mary Kennedy can be reached at 

   Follow Mary Kennedy on Twitter @MaryCKenn

Renewable Rumors Plus Time

   Tuesday started off like any other day in grains with corn a penny higher 
and soybeans up a few as I checked prices in my morning routine. It was odd, I 
thought, that May soybean oil was up 0.55 at the 7:45 a.m. break, but I chalked 
it up to commercials responding to bean oil's lowest prices in six months.

   What was not expected was how corn, soybeans, and wheat all ran sharply 
higher after the 8:30 a.m. open. And of all grain-related contracts, soybean 
oil was leading the way with a 5% gain. What is going on, I thought? Is South 
America on fire? No, this time it wasn't South America's weather. Bogged-down 
soybean trucks in muddy roads did not explain this move. 

   As it turns out, Tuesday's bullish surprise was largely the result of two 
rumors swirling, both of which are still not confirmed as of this writing. 
Because we will likely be revisiting this conversation in the months ahead, I 
thought it would be a good time to consider the potential market impact.

   The first rumor affected corn and was explained well by DTN Staff Reporter 
Todd Neeley in Tuesday's DTN article, "RFS Order Eyed." The Renewable Fuels 
Association told DTN that President Donald Trump is considering changes that 
would include an easing of restrictions on the sale of E15 ethanol in summer 
months. I'll refer to Neeley's article ( for the details, 
but if true, this change would have a slight long-term bullish consequence for 
corn prices. I can't say it justified May corn's 18-cent rally at the peak of 
Tuesday's excitement, but it's understandable when traders get jolted by 

   The second possible change being circulated was harder to track down, but 
help came Tuesday in the form of a tweet from University of Illinois Ag 
Economist Scott Irwin around 10 a.m. CST. Dr. Irwin is a popular reference for 
explaining all things renewable and he tweeted, "Hearing rumors part of 'deal' 
might be conversion of biodiesel tax credit to producer credit. I always 
thought Trump would like that."

   This particular rumor made a lot of sense and explained the sudden 
popularity of soybean oil. The biodiesel tax credit actually expired at the end 
of 2016, but the old method applied the tax credit to biodiesel blended in the 
U.S. even though the source of the biodiesel might have been imported. Many, 
including the National Biodiesel Board, have advocated applying the credit to 
U.S. producers only, a move that their web site,, says could have 
saved the U.S. Treasury $600 million in 2015.*

   Applying the tax credit only to biodiesel produced in the U.S is very much 
in line with the president's aims and, if enacted, would have some bullish 
impact on U.S. soybean oil and soybean prices, putting imported biodiesel 
sources at a disadvantage. The catch is that the biodiesel tax credit is still 
waiting to be restored, so the timeline is unclear.

   Later Tuesday, White House spokeswoman Kelly Love claimed there was no 
ethanol executive order in the works, but other sources disagree. Tuesday's 
excitement and Wednesday's follow-through of higher corn and soybean prices 
stopped row crops from sliding lower, but as cooler heads prevail, the bullish 
enthusiasm may be difficult to maintain. 

   The rumors sound reasonable and, if true, will have some bullish 
consequence, especially for soybean oil. But who can say when?

   "Reforming the Biodiesel Tax Incentive to a Production Credit," by the 
National Biodiesel Board, 2016 at:

   Todd Hultman can be reached at 

   Follow Todd Hultman on Twitter @ToddHultman1 

Early Start to Grain Shipping and Planting Season? 

   Punxsutawney Phil may have predicted six more weeks of winter on Feb. 2, 
2017, but since then, temperatures have been warming in the Midwest. If the 
warm weather continues, we may see an early start to the grain shipping season 
on U.S. waterways this year.

   Ice coverage on Lake Superior and on Lake Pepin is unseasonably light for 
this time of year. Both lakes are key to the grain shipping spring season 
opening, normally in late March or early April. 

   On Feb. 3, DTN Senior Ag Meteorologist Bryce Anderson reported, "The updated 
outlook for February has nearly the whole continental United States in 
warmer-than-average conditions more likely."

   On Feb.17, the NOAA Great Lakes Coastal Forecasting System (GLCFS) reported 
that total ice coverage on the Great Lakes was at 13.3% vs. 20.3% at the same 
time in 2016, with Lake Superior coverage at 5.9% vs. 9.5% in 2016 on the same 
date. The Coast Guard issued a warning that, "Unseasonably warm air 
temperatures will cause frozen waters to melt at an alarming rate and may cause 
misperceptions about Great Lakes water temperatures, which will remain 
dangerously cold, posing safety concerns for anyone venturing onto the lakes." 
Strong winds in recent weeks also have helped reduce ice cover, breaking up any 
ice that had formed.

   The Great Lakes and Seaway Shipping News reported as of Feb. 18, the opening 
of the 2017 navigation season is scheduled to take place on March 20 at 8 a.m. 
with vessel transits subject to weather and ice conditions. Restrictions may 
apply in some areas until lighted navigation aids have been installed. Early 
ship traffic will be limited to a maximum draft of 26 feet, 3 inches in the 
Montreal/Lake Ontario section of the Seaway until the South Shore Canal is 
ice-free or April 15. The maximum draft then increases 3 inches through that 
section and the Welland Canal. The opening of the Sault Ste. Marie locks is 
scheduled for March 25.

   In 2016, the Great Lakes spring shipping season commenced on March 21 as the 
St. Lawrence Seaway opened two weeks earlier than normal, with no ice hindering 
ships thanks to the warm weather. The very first ocean-going vessel (saltie) of 
2016 sailed into the Port of Duluth-Superior beneath the Aerial Lift Bridge on 
April 3, 2016, officially opening the grain-shipping season.

   On Wednesday, Feb. 15 crew members with the U.S. Army Corps of Engineers 
(USACE), St. Paul District took the first of their annual measurements on Lake 
Pepin, finding less ice on the lake than in previous years at the same time of 
year. Lake Pepin is located 60 miles downriver from St. Paul, Minnesota, and is 
the widest naturally occurring part of the Mississippi River. Pepin is the last 
roadblock for barges waiting to come upriver to open the spring shipping 
season. It is basically the only "highway" to get to the St. Paul Mississippi 
River District, which is home to many grain terminals that ship barges of corn, 
soybeans and feed grains downriver.

   The Corps reported that the thickest ice on the lake measured 17 inches, 
about 1 mile southeast of Lake City. However, when they went 3 miles north of 
Lake City, they encountered open water. Crew members concluded that "this is 
the least amount of ice they've seen on the lake in the last few years." 
Measurements will be taken every week or two and will be used to decide when 
it's safe for barges to break through any remaining ice and begin the 
navigation season in the northern portion of the Upper Mississippi River. Tows 
will typically move barges through ice no thicker than 10 to 12 inches so they 
don't risk damage to their vessels.

   In 2016, the first tow passed through Lake Pepin to reach St. Paul, arriving 
on March 13. The USACE said the 10-year average for the first towboat to arrive 
in the St. Paul District is March 24. The earliest date for an up-bound tow to 
reach Lock and Dam 2 was March 4, in 1983, 1984 and 2000, according to the 
USACE. The latest start to a navigation season since 1970 occurred on April 16, 


   While planting season is not too far away for states such as Texas (corn 
planting started Feb. 17 in south Texas), Arkansas (corn planting started Feb. 
18 in parts of the state) and Mississippi, warm air temperature does not 
necessarily mean that spring planting would start any sooner than normal. Soil 
temperatures at a 2-inch depth should be 55 degrees Fahrenheit by 9 a.m. for 
three consecutive days for good corn germination. Also, in some parts of the 
Midwest, fields may be too muddy as frost leaves the ground earlier than normal 
and continued warm weather speeds that process up. 

   The other key component in deciding to plant early that famers need to be 
aware of, is crop insurance plant dates. Planting dates for corn in the key 
growing states are usually April 6 to April 11 with the latest date being in 
the Northern states. Crops planted before the specified earliest planting date 
will not be eligible for replanting payments.

   Anderson noted in his Midwest moisture forecast on Feb. 13, that a large 
portion of the central and southern Midwest, portions of southeastern Iowa, 
much of Illinois and Indiana, and most of Missouri is quite dry. Precipitation 
since last October is in many parts of this sector, running well under half the 
normal amount. "In fact, almost all of Missouri is in abnormally dry or 
moderate drought stages, according to the U.S. Drought Monitor. In contrast to 
the northern areas, this part of the Corn Belt could use some moisture," said 

   Heading to the Upper Midwest, the scene is much different. The Red River 
Farm Network reported in their Feb. 6 newsletter that, North Dakota Ag Weather 
Network interim director Daryl Ritchison thinks spring will be on the cool and 
wet side of average. "I don't know if we'll get extremely cold or extremely 
wet, but leaning in those two directions, a little cooler and wetter than 
average," added Ritchison. "The last two springs, we've had very little snow. 
We were able to get into the fields with warm, dry and no snow to melt very 
early. This year, there are greater odds of having to wait for the snow to melt 
and it will take a while to get rid of that snow." That could give the 
perception of delayed planting.

   While the warm weather may be a temptation for farmers to start spring field 
work early, much needs to be considered before they take their tractors out of 
hibernation and head to the fields to officially start the 2017 growing season.

   Mary Kennedy can be reached at 

   Follow Mary Kennedy on Twitter @MaryCKenn

Hard Amber Durum: The Noodle Wheat Faces Challenges

   Durum is a type of wheat that is very dense and high in protein. 
Approximately 80% of the nation's nearly 100 million bushels of durum wheat is 
grown in North Dakota. One 60-pound bushel makes about 42 pounds of pasta or 
roughly 210 servings of spaghetti. It is often considered one of the most 
nutritionally significant forms of wheat. 

   It is also one of the hardest of the wheat family to protect from Fusarium 
head blight (FHB), a kiss of death for growers. Also called head scab, it can 
produce the mycotoxin DON, also known as vomitoxin. This disease causes 
significant yield loss and reduces quality.

   The 2016 durum crop was hit by FHB and many North Dakota and Montana durum 
growers have been having second thoughts about growing durum again. U.S. Wheat 
Associates reported this past fall that FHB was reported across northern North 
Dakota and in northeast Montana durum area, and the final average DON value for 
durum was expected to be higher than normal in 2016. Humans are not normally 
affected by vomitoxin, unless infected grain is ingested in very high 
quantities. FDA has limits on intake in finished product (i.e., less than 1 
ppm), but even at low levels millers are reluctant when it comes to buying 
infected wheat. Grain infected with vomitoxin can also affect flavors in food 
and processing performance and limit the sale of feed by products produced by 
the milling process. 

   Durum likes dry hot days and cool nights which is why much of the U.S. crop 
is grown in northwestern North Dakota and northeastern Montana, also known as 
the durum triangle. However, in 2016, much of the key growing areas experienced 
humid weather during the critical stage of flowering and grain filling stages 
of the durum plant. Growers were diligent in applying fungicide to fight the 
scab, but to no avail. The disturbing part is that the disease hit areas that 
hadn't seen much, if any, in the past.

   Jochum Wiersma, a small grains specialist and professor at the University of 
Minnesota Crookston, told DTN that he spent 20 years in the trenches fighting 
FHB and said that while some progress has been made, the disease is far from 
"tamed." The disease first flared up in the 1990s in northeast North Dakota and 
northwest Minnesota during a continued, ongoing wet spell. Wiersma told me that 
he initially wanted to work on this disease in graduate school but was 
dissuaded to do so as one member of his exam committee asked if he "had any 
plans to complete his degree." 

   Nevertheless, in his role as extension agronomist, Wiersma has worked with 
growers since 1995 to combat this disease. During the past 20 years, progress 
has been made in developing crop varieties that are relatively resistant to 
scab, plus farmers have better access to, and better understanding of, 
fungicides that hold down the disease. Also, rotation is key. "With the 
popularity of corn in North Dakota, it is imperative to remember that corn is 
an alternative host to Fusarium graminearum, the fungus that causes FHB in 
durum, but causes stalk rot in corn. Corn stover will be a food source for this 
fungus for two years after the corn has been harvested," added Wiersma.

   "Long-term weather patterns appear to be switching to a wetter cycle which 
will be more favorable for FHB and the next wet cycle will tell us if we've 
made adequate progress to limit the economic damages caused by this 
opportunistic disease," said Wiersma.


   On Oct. 20, 2016, the Saskatchewan weekly crop progress report said that 
harvest was stalled for the third straight week, with 24% of the durum crop 
still in the rain-soaked fields. Each week the crop stayed in the field, the 
more the quality was compromised. In the final grade report from Canadian 
Grains Commission, they reported that overall, 64.6% of the samples were 
degraded due to fusarium damage. The HVAC count was degraded in 11.2 % of the 
samples, 9.3% with mildew and 2.2 % with severe sprout. The majority of the 
samples graded No. 3 Canada Western Amber Durum (CWAD).

   "There were lots of issues with contracts up here last fall that were being 
handled differently from company to company," said Cliff Jamieson, DTN Canadian 
Grains Analyst. "I heard about a farmer that had 4CWAD contracts in place with 
two companies roughly in the $6/bushel area. Grain was grading Canada feed, so 
one company was reported to be deducting around $3/bu., the other over $5/bu. 
Doesn't leave much left for the grower, especially when you spend three to four 
months trying to get it off the field."

   An expected increase in both United States and global durum stocks, combined 
with Canada's record 2016 durum production of below-average quality, continues 
to pose a challenge for the prairie durum market. On Feb. 3, Statistics Canada 
reported 6.9 million metric tons of durum stocks as of Dec. 31, up 63.1% from 
the previous year and a record for this date.  The most recent export data 
shows cumulative exports through licensed facilities as of week 27, or Feb. 5, 
at 2.172 mmt. This is roughly 13% below the same period in 2015/16, and the 
lowest volume shipped at this point in time in the past five years. Current 
government estimates point to 2016/17 exports falling just 1% from the previous 
year by the end of the crop year.

   "Ending stocks are expected to balloon by 136% to 2.6 mmt this crop year 
according to government forecasts, although the five-year average disappearance 
in the January-through-July period is 3 mmt, which points to the potential for 
ending stocks to reach a much higher level by year's end," added Jamieson. 
"Success in pushing the lower grades into feed channels will be the key to 
capping the growth in stocks. Top grade prices on the Prairies are ranging from 
$7 to $8/bu., while there seems little hope for upside potential at present."

   Jamieson expressed concern that the large carryover and growing risk of 
fusarium damage on the Prairies is pointing towards a move away from durum in 
2017. "Early indications from Agriculture and Agri-Food Canada suggest 
producers will reduce seeded acres by 15% in the upcoming year to approximately 
5.3 million acres, while private estimates suggest that the reduction will even 
be larger. Both canola and spring wheat are expected to benefit from this move 
away from durum."


   What's the bottom line financially?

   While durum commands a higher price than spring wheat, the risks can many 
times outweigh the value of any premiums. Currently No. 1 Hard Amber Durum 
(HAD) is at about a $1.50 to $2.00 premium to No. 1 MQ 14 pro spring wheat 
depending on the milling grade/value. That's not much of a premium when you 
factor in the complexity of growing a "perfect" crop that will appeal to buyers.

   Durum commands a premium when it is at least 75% HVAC (hard and vitreous 
kernels of amber color), 13% protein, 60 pounds, 300 falling number, plump 
kernels and as the old timers I used to trade with said, "It has to have a 
shine." Top milling durum that grades 85% HVAC or better, is 13.5% protein and 
325 FN can receive an even bigger premium. It also needs to be free of sprout, 
ergot, frost, and anything else that affects the No. 1 milling grade sought 
after by semolina (durum flour) buyers and pasta plants. 

   If a farmer has a top milling durum contract and drops below the required 
grade, he can face major discounts as high as $5 or more per bushel, or even 
rejection depending on how low the quality drops. Some farmers will run 
scabby/vomitoxin-infected durum through a cleaner, but while the added expense 
of doing that can cut in to margins, it is still a "cheaper" hit cost wise if 
they try to market it uncleaned.

   Jamieson said that last fall, "Farmers in Canada not meeting required grades 
on their contracted durum were facing the prospect of writing a check for tens 
of thousands, in some cases hundreds of thousands of dollars to buy out their 
contract, unless they could roll it." He said he had heard a buyout on a 
farmer's contract could be as high as $250,000. The farmer, like many others in 
the area, was not able to harvest all of his durum and the poor quality didn't 
meet his contract requirements.   

   The North Dakota Wheat Commission (NDWC) reported that the 2016 U.S durum 
crop in Montana and North Dakota was the largest since 2000 and nearly 50% 
larger than 2015, due to record yields and a one-third increase in planted 
area. "The crop averages No. 1 Hard Amber Durum with grade parameters that are 
very similar to 2015. The crop benefited from mostly dry conditions for the 
bulk of the harvest, although significant differences in moisture and disease 
pressure during the last half of the growing season resulted in a big 
difference in DON levels in some of the northern growing regions," said the 
NDWC. (See

   "Had the U.S. crop also been poor and had the market run higher, the 
financial loss to the growers in Canada would have been even worse," concluded 

   For more on the subject of vomitioxin, see my blog last fall on "What 
Happens When Grain Gets Sick?" at

   Mary Kennedy can be reached at 

Corn Exports, Please?

   I know it's my own fault, but another WASDE report has come and gone, and 
I'm feeling like Charlie Brown after Lucy pulled the football away again. Why 
didn't USDA raise its estimate of U.S. corn exports? Arghh!

   Okay, to be honest, I've been around long enough to know USDA estimates 
aren't required to make sense, but of all the things in February's World 
Agricultural Supply and Demand Estimates, this one seems the least defensible. 

   As of Groundhog Day 2017, USDA shows 819 million bushels of corn already 
shipped in 2016-17 with another 802 mb of sales on the books. Total the two 
numbers and we find corn exports and sales up 67% from where they were a year 
ago at this time. However, USDA's export estimate for all of 2016-17 is up just 
17% from last season's 1.898 billion bushels. Why the big gap?

   Playing USDA advocate, we could say USDA is erring on the side of caution 
and, after all, we don't know how Mexico, the biggest U.S. corn customer, is 
going to respond to President Donald Trump's attempts to reform NAFTA. On the 
other hand, NAFTA is not going to be renegotiated overnight, and the current 
export season only has a little more than six months left.

   It could also be said USDA is reluctant to hike its export estimate while 
Brazil's crops are doing well. Brazil's government just estimated its corn crop 
at 87.4 million metric ton on Thursday, up from last year's 67.00 mmt. But that 
argument also doesn't go very far. Even in a good year, Brazil's corn exports 
don't typically pick up until July, which means that U.S. corn exports still 
have at least four more months of active business. 

   One year ago at this time, USDA showed 490 mb of corn shipped, which means 
that 1.408 bb of corn were shipped in the final 6 3/4 months of the season. 
This year, 819 mb of USDA's 2.225 bb estimate have already been shipped, 
meaning USDA expects no more corn will be shipped from this point on than what 
we saw last year.

   But if we compare the two years, 2016-17 clearly has the more bullish edge. 
This year, Brazil's real is 27% more expensive, leaving U.S. corn prices with a 
significant export advantage that was not there a year ago. 

   The February issue of Grains: World Markets and Trade from USDA's Foreign 
Agricultural Service shows FOB corn prices at $168 a ton in the U.S. in early 
February, significantly below FOB prices around $180 a ton in Brazil and 
Argentina. USDA noted that Argentina's forward prices from March onward are 
competitive with the U.S., but until they become cheaper, U.S. exports are 
likely to remain active.

   Granted, acknowledging a 200 mb increase in corn exports would not make a 
big dent in USDA's 2.32 bb of ending stocks and the impact on prices would 
likely be small. But with cash corn prices in the low $3s, even small changes 
matter and the evidence is there. For 2016-17, USDA's ending corn stocks 
estimate is too high.

   Todd Hultman can be reached at

   Follow Todd Hultman on Twitter @ToddHultman1

Will Latest Executive Order Put the Brakes on Pending Truck Regulations?

   A number of regulations affecting the U.S. trucking industry were in the 
works last year. But now, two executive orders signed by President Donald Trump 
aimed at curbing federal regulations, could put the brakes on the new rules. 

   On Aug. 26, 2016, The U.S. Department of Transportation's National Highway 
Traffic Safety Administration (NHTSA) and the Federal Motor Carrier Safety 
Administration (FMCSA) proposed speed limiter on all large commercial vehicles 
in an attempt to increase safety, in addition to boosting fuel and emissions 
savings. However, this proposal may not become law since the release of Trump's 
executive orders. Another FMCSA regulation in limbo is a rule to establish 
national driver training standards.

   The speed limiter proposal would establish safety standards requiring all 
newly manufactured U.S. trucks, buses and multipurpose passenger vehicles with 
a gross vehicle weight rating more than 26,000 pounds to come equipped with 
speed-limiting devices. The proposal discusses the benefits of setting the 
maximum speed at 60, 65 and 68 miles per hour, but the agencies stated in the 
FMCSA press release that they would consider other speeds based on public 

   "This is basic physics," NHTSA Administrator Mark Rosekind said in the press 
release. "Even small increases in speed have large effects on the force of 
impact. Setting the speed limit on heavy vehicles makes sense for safety and 
the environment." Here is a link to the press release and proposed rule:

   Joe Rajkovacz, head of regulatory affairs for the Western States Trucking 
Associations, was quoted in numerous trucking publications as saying, "[Trump's 
regulatory] freeze, I think, is a death knell for the speed-limiter mandate -- 
that's an easy one since so many in the industry have ripped it apart." 

   On Oct. 6, 2016, the American Trucking Association (ATA) released a 
statement on their website condemning the proposal. CEO Chris Spear stated: 
"Despite ATA's decade-old, pro-safety policy on speed, the new joint rulemaking 
from the National Highway Traffic Safety Administration and Federal Motor 
Carrier Administration proposes a menu of three speed options for commercial 
trucks, not one. It provides insufficient data, and fails to make a 
recommendation regarding which of the three proposed speeds it believes is best 
and why. Most disconcerting is the fact that DOT's new rulemaking does not 
address the differentials in speed that would exist between any of the three 
proposed national speed limits for trucks and the speed laws of multiple states 
-- allowing passenger vehicles to travel at much higher speeds than commercial 
trucks. This lack of data and direction only elevates the safety risks to the 
motoring public."

   ATA added that a mandate for a "one-size-fits-all speed limiter" will 
squelch innovation in technologies to enhance safety and accommodate not only 
highways, but potentially secondary roads and beyond.


   On March 4, 2016, the U.S. Department of Transportation's Federal Motor 
Carrier Safety Administration released notice of proposed rulemaking of 
comprehensive national prerequisite training standards for entry-level 
commercial truck and bus operators seeking to obtain a commercial driver's 
license (CDL). 

   Under the proposal, applicants seeking a "Class A" CDL -- necessary for 
operating a combination tractor-trailer-type vehicle weighing 26,001 lbs. or 
more -- would be required to obtain a minimum of 30 hours of behind-the-wheel 
training from an instructional program that meets FMCSA standards, including a 
minimum of 10 hours of operating the vehicle on a practice driving range.

   Applicants seeking a "Class B" CDL -- necessary for operating a heavy 
straight truck (such as a dump truck or box truck) or a school bus, city 
transit bus, or motorcoach -- would be required to obtain a minimum of 15 hours 
of behind-the-wheel training, including a minimum of seven hours of practice 
range training. Here is a link to the entire proposal on the FMSCA website:

   On Feb. 1, 2017, in light of the Jan. 31 executive order, the FMCSA 
published a notice officially delaying the effective date of a new rule 
establishing national truck driver training standards.


   Another new regulation affecting the trucking industry, the electronic 
logging device (ELD) rule, is intended to help create a safer work environment 
for drivers, and make it easier and faster to accurately track, manage and 
share records of duty status (RODS) data. An ELD synchronizes with a vehicle 
engine to automatically record driving time, for easier, more accurate hours of 
service (HOS) recording. The effective date of this rule was Feb. 16, 2016, 
which was the date 60 days after the rule's publication in the Federal 

   Carriers and drivers who are subject to the rule must install and use ELDs 
by the appropriate deadline. Carriers and drivers who are using paper logs or 
logging software must transition to ELDs no later than Dec. 18, 2017. Carriers 
and drivers who use automatic on-board recording devices (AOBRDS) prior to the 
compliance date must transition to ELDs no later than Dec. 16, 2019. Here is a 
link to the final rule published by the FMCSA:

   This rule has been challenged in court by the Owner Operators Independent 
Drivers Association (OOIDA), an organization that represents small-business 
truckers. The OOIDA called the ELD mandate devices "arbitrary and capricious," 
saying that it violates 4th Amendment rights against "unreasonable searches and 
seizures" and filed a lawsuit against the FMCSA on March 16, 2016. OOIDA 
contends that requiring electronic monitoring devices on commercial vehicles 
does not advance safety since they are no more reliable than paper logbooks for 
recording compliance with hours-of-service regulations. A three-judge panel on 
the appeals court ruled against the lawsuit in October 2016.

   The OOIDA then filed a petition on Dec. 14, 2016, to the U.S. Court of 
Appeals for the 7th Circuit for a rehearing of their case against the Federal 
Motor Carrier Safety Administration. This appeal means that OOIDA wants all 12 
judges on the 7th Circuit bench to hear their case. Jim Johnston, president and 
CEO of OOIDA, said in a press release that the association is preparing for 
"the next phase of the challenge with an appeal to the Supreme Court but will 
also continue to pursue the issue on the congressional side."

   "It's clear now that we have to pull out all the stops to convince lawmakers 
and the new Trump administration of the need to set aside the ELD mandate," 
said Johnston.

   The OOIDA is the only national trade association representing the interests 
of small-business trucking professionals and professional truck drivers. The 
association currently has more than 150,000 members nationwide. OOIDA was 
established in 1973 and is headquartered in the Greater Kansas City, Missouri, 

   I spoke to a retired independent truck driver who currently farms 1,400 
acres of corn and soybeans in Michigan, and he told me that, in his opinion, 
large trucking firms are trying to use safety regulations as a way to force 
smaller companies to spend their limited budgets and manpower on things that 
don't generate revenue. "Assuming owner operator trucks are not safe is no 
different than assuming dairy farms abuse their cattle," he said.  

   He went on to say that professional drivers are safety oriented because its 
makes long-term economic sense. Drivers face a physical fitness requirement 
that in any other industry would be considered discrimination. Couple that with 
wild swings in fuel and road usage costs, and there is more burden placed on 
drivers by the USDOT. If government regulatory agencies can't prove the 
benefits of these new rules, then the regulations should be stopped, he said. 

   Like farming, the trucking industry is already heavily regulated enough and 
is an economically challenging industry, he concluded.

   Mary Kennedy can be reached at  

   Follow Mary Kennedy on Twitter @MaryCKenn


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