Soy Growers Oppose White House Budget

The American Soybean Association (ASA) signaled strong opposition to proposed cuts in the FY-2018 budget released by the White House this morning.

“By shredding our farm safety net, slashing critical agricultural research and conservation initiatives, and hobbling our access to foreign markets, this budget is a blueprint for how to make already difficult times in rural America even worse,” said Ron Moore, ASA president and a soybean farmer from Roseville, Ill.

The budget would cut the federal crop insurance program by $28.5 billion—or roughly 36 percent—by capping the premium subsidy and eliminating the harvest price option. The crop insurance program is widely used by soybean farmers, and the harvest price option was selected in 99.4 percent of soybean revenue insurance policies sold in 2016. The White House’s proposed budget also would cut nearly $9 billion from Title I commodity supports, including the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, by reducing the adjusted gross income (AGI) eligibility cap from $900,000 to $500,000.

“Thirty six percent is the most extreme proposed cut to crop insurance I’ve seen in my 40 years on the farm,” Moore said. “This is a program that exists to sustain farmers who suffer catastrophic losses. Coupled with the arbitrary caps the budget would impose on premium subsidies, it’s clear that this budget was written without input from farmers who would be severely affected.”

The budget also poses an existential threat to export promotion and foreign food assistance programs. It eliminates funding for the two hallmark U.S. Department of Agriculture (USDA) programs for the expansion of foreign markets: the Market Access Program (MAP) and the Foreign Market Development program (FMD).

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Read the full article at soygrowers.com

Bullard Seed Co. Feature

Recently, we had the opportunity to work with a great company based in Ashland, MO. Bullard Seed Co. is a family owned and operated contract producer of soybeans and wheat seed. They were looking to become faster and more efficient with their sorting process and the standard spiral separators Bullard had in place were not meeting their growing needs.

Profile’s President and chief engineer Steve DeJong worked with Bullard to create the best solution. Since Profile’s standard cabinet is four-inches too large to fit into Bullard’s existing space, Steve designed a custom cabinet to fit.

Bullard’s spirals are positioned ahead of the color sorter which in turn enables the sorter to become more precise in its sorting.

“I cannot explain it without visually showing you what they will do in operation – it is hard to explain until you actually see it run. This thing really works.” Said Joel Bullard, president and owner of Bullard Seed Co.

“They (rotary spirals) remove a small amount, yet they remove everything you want to remove,” he says. “They are so easy to set. It takes longer to climb the ladder to the platform on the cleaning deck than it does to change the setting.”

Bullard says they routinely check the spiral’s discard throughout the day and when they change from variety to variety. The spirals are so sensitive that Bullard usually makes a slight adjustment for each different variety.

“I cannot say enough good about these rotary spirals. It gives us greater confidence in our product.” Bullard says. “I feel every soybean plant should have them.

This case study was featured by SeedToday in the 2017 first quarter issue. The full article contains a profile of Bullard Seed Co. and how they decided to implement the rotary spiral separators into their seed cleaning operation.

Agricultural Giants Risk Being Left Behind in Agtech Boom

How does the agtech boom impact the biggest agricultural companies in the world over the next 10 years.

While a number of forward-thinking agricultural corporates are investing big money into agtech (agriculture + technology), there’s a significant majority who are not. They are waiting on the sidelines, perhaps understandably thinking that it makes sense to follow a “wait-and-see” strategy.

“Wait-and-see” almost never works in technology. The big agricultural corporates need to start taking genuine risks in agtech, which means making acquisitions that move the needle. Buying up smaller players alone won’t cut it. Neither will in-house innovation. Only bold moves and visionary tech acquisitions will help the big agricultural firms avoid disruption, and in some cases even become the disrupters themselves.

Agtech is where fintech was a few years ago

As an investment banker, I believe the agtech industry is where the financial technology sector was five or six years ago. Smaller and less developed, yes, but potentially on the same brink of a financial and value-creation explosion.

TechCrunch reported last week that investment into agtech tripled over the start of this year, compared to the same time last year. Most of this investment was at pre-seed, seed, and other early investment levels.

This is exactly what we saw before the fintech sector took off a few years ago: a period of intense, heightened early-stage investment in fintech startups; startups that grew over the next five to six years into companies with multi-billion dollar valuations.

There haven’t been many billion-dollar valuations in the agtech sector; Climate Corporation is the most famous one that may have just tipped over the $1bn point, according to some sources. However, if the agtech sector continues to track fintech’s rise, then we should expect to see perhaps 20 or more over the next decade, especially as agtech taps deeper into fast-growing markets like China and India.

Why “wait-and-see” is not a strategy in tech

With a few notable exceptions, like Monsanto and Syngenta, many of the biggest agricultural firms have been waiting out this agtech investment boom on the sidelines – or have only been dipping their toes in the water. Some of the biggest investors in agtech is, instead, a roll-call of well-known Silicon Valley names: Y Combinator, Khosla Ventures, Andreessen Horowitz, Google Ventures, and Techstars.

“Wait-and-see” in technology can be fatal because it’s an abdication of a strategy. Technology is incredibly fast-moving, growing exponentially, and industries – like agriculture now – that are going through a period of rapid, choppy, tech-driven disruption are impossible to predict properly. The only thing that is certain, is that traditional ways of doing things and traditional business models will be overthrown. One month can be a long time in an industry that is undergoing disruption; one year is an age.

This means that speed out of the gate is essential. It’s the one quality that can give a company a real advantage. The companies who are in the second, third or even later waves of investment and acquisitions might find it difficult, if not impossible, to catch up. After declining to invest in Netflix, Blockbuster was never able to catch up despite later investing huge sums in an on-demand strategy

This difficulty to catch up stems from the fact that the first-movers will have acquired the best startups with the most promising technology, often at the lowest prices. Just to keep up will be a big ask, and to overtake, near impossible.

Why small acquisitions won’t cut it on their own

A number of agricultural CEOs and CFOs reading this article may remind themselves of a few smaller investments they’ve made. That’s a good start, and shows the right type of thinking, but dabbling in investment and acquisitions is often not enough to stave off disruption or realise the opportunity of becoming the disrupter

That’s because small investments may reveal a potentially losing strategy: buying tech startups with promising technologies to simply ‘bolt-on’ to the business. For example, it may be that the emergence of precision agriculture might convince an agricultural company to buy an agtech startup to answer its concerns about the impact it will have on the industry. But the agtech target’s absorption doesn’t necessarily lead to any lasting change in the acquirer – because so often it is left to operate independently.

When making an acquisition, if you want it to pay off, you ideally want that startup ultimately to transform the core of your business. The acquisition should not just become an arm’s length subsidiary; to be truly successful, the acquisition needs to lead to a total integration of the startup’s technology, team, and innovative mindset into your business. Over time it must become a core part of your organisational DNA.

In the banking sector, Michael Corbat, CEO of Citigroup, demonstrates the mindset required. Speaking at Mobile World Congress in 2014, he said he doesn’t consider Citi a bank, but “a technology company with a banking license”. So, it is no surprise to see that Citi has been one of the most active investors in fintech. Their venture arm’s portfolio currently comprises around 30 investments, and they are consistently making 5-10 deals every year. Corbat clearly knows the type of capital investment it takes to remain committed to a long-term strategy of truly transforming your core.

In-house innovation is not enough

One response I hear a lot from executives is that they feel it would be better to invest $1bn in in-house innovation rather than acquire an outside company. I understand the rationale for that.

But, we also have to be honest with ourselves. Many agricultural companies are just not set up and organised to drive through tech-enabled innovation; that’s simply not our expertise or strength. Instead, agricultural companies are experts in, among other things, supply chains, yields, and the longer-term planning that’s required to run a successful seasons-based business.

There’s no shame in saying that “our organisations aren’t the natural developers of the latest big data technology, aerial monitoring devices, and AI-powered agtech. Our companies are usually too large for that, and our headquarters are also often located too far away from the tech talent pool of Silicon Valley.”

So why gamble vast sums developing in-house technology when it can be acquired off-the-shelf by acquiring a successful tech startup that you, as a company, could take to the next level?

It’s time for agricultural companies to significantly increase their venture capital and M&A funding pools. Not only to see off disruption, but to get ahead of their competitors in buying the technology that will power the future of the industry. It’s time to act because another 12 or even six months could be too late for many.

Editor’s Note: Paul Cuatrecasas is CEO of Aquaa Partners, a specialist investment bank that advises growth-focused traditional companies on acquiring the right technology company.

*Article Posted with permission from AgFunderNews.

March is a Great Time to Invest in New Equipment

New shape sorting and seed cleaning equipment is what we know best. Designing solutions for our customers that fit their budget and their business model is how we define success. Our friends at Crest Capital understand that as well. They specialize in finding ways to finance the equipment you need to succeed and March happens to be a great time to have that conversation.

Let me give you a few reasons why:

First, winter is ending. For about half the country, this isn’t that big of a deal. But for the other (more northern) half, it’s generally a sigh of relief. The snow melts, the birds return, and people start venturing outside again. And some industries start cranking up. To give a good example, many outdoor construction projects are impossible with frozen earth, you see few motorcycles in the winter, golf courses are shut down, etc. These all awaken in the spring, meaning the regional economic engine starts to run again.

Related to that is the mental line in the sand this month brings. Many companies will say “we’ll tackle that after winter”. Add in Daylight Savings Time, and you have a clear shift in overall demeanor. Spring is a season of rebirth, and that includes equipment financing. It’s time to spruce things up and modernize!

March is also the end of the first quarter. Many companies use the first quarter to predict where the entire year is going. Look at your own company – by this point, you probably have a decent indicator of what kind of year 2017 is going to be. This makes economic decisions (like financing new or used equipment) a little easier.

Some of the reasons I mentioned for earlier months are still valid in March – some companies may still have a few of “last year’s models” around at really deep discounts. And time is marching on (pardon the pun) – your Section 179 tax deduction increases in effectiveness, especially when you combine it with an equipment lease.

 

For more information, visit Crest Capital.

All You Need to Know About Ultraviolet is Right Here.

Go towards the light. The Ultraviolet Light!

Ultraviolet technology is here and it can do some pretty amazing things. For starters, lets talk about how it can disinfect without using chemicals. In today’s world, that is a big deal. There is nothing added during disinfecting process. Its simple. Its inexpensive. Best of all, its very low maintenance. Ultraviolet purifiers use germicidal lamps that produce just enough ultraviolet light. (16,000 microwatt seconds per square centimeter). Some of these lamps can produce even more.

Ultraviolet-C light is germicidal. What does this mean? Well, it destroys the DNA of viruses, bacteria and other pathogens and kills their ability to reproduce. The  UV-C light alters the nucleic acid of microorganisms. It forms covalent bonds between certain adjacent bases in the DNA which prevents the DNA from being unzipped for replication. Done. Bacteria dead and all other organisms are also destroyed.

How does it work? Check it out!

 

Get to Know Our Open Spiral Separator

Our line of spiral separators and advanced shape sorting technology will provide you with the purity and quality you need for your operation. Our free lab analysis is just the beginning to higher profits and cleaner commodities.

We’re sure we have a product that will meet and exceed your needs. Like this one, our classic Open Spiral Separator. Take a look at all of the efficiency and simplicity in this video:

Get to Know the Single Open Spiral Separator from Steve DeJong on Vimeo.

End of the Year Special Financing

As 2016 comes to a close, Profile has once again partnered with Crest Capital to make every opportunity available for our customers. You can combine Crest Capital’s ‘Section 179 Qualified Financing‘ with your generous Section 179 tax deduction to literally add thousands of “bottom line” dollars to your bank account. Take full advantage of Section 179 with this free report.

Crest Capital Crest Capital

Use the Calculator to Check Your Tax Write Off for 2016

The Section 179 Tax Deduction is meant to encourage businesses to stay competitive by purchasing needed equipment, and writing off the full amount on their taxes. This free Section 179 calculator is fully updated for 2016 – go ahead, run some numbers and see how much you can actually save in real dollars this year.

A review of the Soybean Industry Issues in the Democratic Platform

Below is an analysis of the Democratic Party Platform, released at the Democratic National Convention in Philadelphia. A full copy of the platform is available by clicking here.           

The election of the next president of the United States is just around the corner. The conventions for each party are long over but the ads, debates, and social media onslaught is just beginning. Many things will be said and analyzed about the policies and procedures of our next president no matter who is elected. However, as promised, in this post Profile takes a look at some of the line items related directly to the Soybean Industry in the Democratic Party Platform.

Biodiesel – The platform does not mention biodiesel specifically, but frequently points to clean energy and “clean fuels,” citing the promotion of “clean energy leadership and collaborative stewardship of our natural resources, while expanding opportunities in rural communities across America.” The platform also commits to extending tax credits for clean energy.

Conservation – The platform commits to providing assistance to producers who conserve and improve natural resources on their farms. It also notes the benefit of working cooperatively with farmers in promoting conservation.

Farm Safety Net – The platform commits to providing a “focused safety net to assist family operations that need support during challenging times.”

Hunger and Nutrition – The platform commits to protecting “proven programs like the Supplemental Nutrition Assistance Program (SNAP) … that help struggling families put food on the table.” The platform also opposes the block-granting of the SNAP program.

Infrastructure Investment – The platform commits to job creation through investment in “rebuilding our crumbling infrastructure,” citing specifically roads, bridges, and freight rail lines and waterways. Additionally, the platform calls for the creation of a national infrastructure bank to focus on infrastructure improvements, as well as the permanent establishment of Build America Bonds to spur investment at the state and local levels.

Rural Broadband – The platform commits to bringing high-speed internet connectivity to “every household in America.”

Trade – The platform contains language on trade, referencing a desire to “review agreements negotiated years ago to update them,” and approach new agreements to ensure they do not take “shortcuts on labor policy or the environment.” The platform includes language on currency manipulation and dumping, and while it mentions the Trans-Pacific Partnership (TPP), it neither supports nor opposes the TPP. Additionally, the platform calls for an end to both the travel ban and the trade embargo with Cuba.

Waters of the U.S. – The Clean Water Act is mentioned in the platform, but only in the context of mining discharge. There is no mention of the Waters of the U.S. rule.

Listed items courtesy of ASA.

Bayer looks to have acquired Monsanto with improved $66 billion bid

A $128-a-share deal has been struck. Bayer upped their offer from the previous  $127.50 a share and the deal  was done.

“Bayer’s competitors are merging, so not doing this deal would mean having a competitive disadvantage,” said fund manager Markus Manns of Union Investment, one of Bayer’s top 12 investors.

Farm incomes are near rock bottom as grain prices remain at record lows.

From Reuters:

But the proposed merger will likely face an intense and lengthy regulatory process in the United States, Canada, Brazil, the European Union and elsewhere. Hugh Grant, Monsanto’s chief executive, said Wednesday the companies will need to file in about 30 jurisdictions for the merger.

Competition authorities are likely to scrutinize the tie-up closely, and some of Bayer’s own shareholders have been highly critical of a takeover that they say risks overpaying and neglecting the company’s pharmaceutical business.

If the deal closes, it will create a company commanding more than a quarter of the combined world market for seeds and pesticides in the fast-consolidating farm supplies industry.

What the newly-formed company would be named is unclear.

For the latest news on this deal, visit Reuters.

ASA Meets with Trump, Clinton Campaigns

The American Soybean Association (ASA) and representatives from 10 other national agricultural organizations met Monday with officials of the Donald Trump presidential campaign in Washington. ASA and the same groups met with the Hillary Clinton campaign in Brooklyn in June. The purpose of both meetings was to establish a dialogue between the campaign, the individual and collective ag groups on key policy matters that will emerge during the 2016 campaign.

The groups highlighted several big, broad policy areas as examples of matters deserving attention during the election, including agricultural trade, food safety, Farm Bill and crop insurance programs, ag labor, infrastructure and the importance of science based regulatory policy.

None of the groups participated in either meeting with the intent of any direct political engagement commitment —though each organization have representatives that are already, or plan to eventually, engage with both the Clinton and Trump campaigns.

The issues discussion and further engagement opportunities exchange in the meetings were extremely open and constructive.

Groups in attendance also included, the American Farm Bureau Federation, American Seed Trade Association, CropLife America, National Association of State Departments of Agriculture, National Association of Wheat Growers, National Corn Growers Association, National Cotton Council, National Council of Farmer Cooperatives, National Farmers Union and The Fertilizer Institute.

Post information courtesy of ASA.