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Highlights: 2018 NSA Summer Seminar

Tuesday, August 28, 2018
filed under: Marketing/Risk Management

Washington, D.C. Update
Dale Thorenson

 
       Dale Thorenson covered a lot of ground in his remarks to the 2018 NSA Summar Seminar, as he provided an update on what’s been happening in the nation’s capital. Among his talking points were: status of the Trump administration’s nomination process; progress on the 2018 farm bill; international trade concerns; and appropriation bills coming up in Congress.
       Thorenson is an associate with Gordley Associates, the consulting firm that has represented the National Sunflower Association in Washington, D.C., for the past 31 years.
       As of late June, of the 671 positions in the Trump administration’s nomination field requiring Senate confirmation, 186 (27%) had yet to be nominated, Thorenson noted. Another 147 had been formally nominated and were awaiting hearings or confirmation, while 331 (49% of the total) had been confirmed.  Within the USDA, five top-level positions (plus Secretary Sonny Purdue) had been confirmed as of late June, while several under-secretary positions were awaiting either nomination or confirmation.
       The long and winding road to the 2018 farm bill was still under heavy construction as of latter June, but things were looking up.  Thorenson noted that many items that needed to be finished before the farm legislation could proceed had actually been completed in the first half of the year.  A two-year budget deal had cleared the way to pass this year’s appropriations bills, and allowed good progress on next year’s.  Also, the debt ceiling had been extended until after the election.  While the highly watched investigations into the Russia-Trump situation were still a focus, the newly commenced trade war should actually push Congress to act on a farm bill as concerns about declining farm income increase, negating the usual effect a mid-term election has over completing major legislation prior to voting. 
       There have been several areas of agreement among most farm groups throughout the process, Thorenson said, including:
       • Keeping the farm bill as an amendment to permanent law.
       • Increasing the farm bill baseline (although it will not happen).
       • Retaining crop insurance and the Commodity title as top priorities.
       • Keeping the Nutrition title in the farm bill (due to the shrinking rural populations in congressional districts).
       As to international trade, TPP (Trans-Pacific Partnership) status as of mid-June remained the same and could be summarized in two words:  “still dead.”  Trump’s determination to renegotiate NAFTA could result in talks beginning in August.  “The administration wants to complete the talks quickly so they can chalk up a win; but meaningful improvements are not going to happen that rapidly,” Thorenson said. “Mexico and Canada will not be inclined to give away anything of substance just to made the Trump administration look good.”
      Since June, the House and Senate have both passed their respective versions of the 2018 farm bill. Agriculture Committee conferees have been named by both houses of Congress to work out a compromise of the two versions. They are scheduled to meet in early September to produce a compromise in order to pass a farm bill and get it to President Trump for his signature before the current farm bill expires on September 30.  — Don Lilleboe
Gene Editing: What Does the Future Hold for Sunflower?
       A discussion of gene editing — what it is and what it portends for sunflower — was presented at the 2018 NSA Summer Seminar by Brent Hulke and Dylan Moxley. Hulke is sunflower research geneticist with the USDA Agricultural Research Service in Fargo, N.D.  Moxley is a graduate student in the Rieseberg Lab, Department of Botany at the University of British Columbia.
       Gene editing has been garnering a lot of attention within recent years among scientists working in both human and plant biotechnology research.  It refers to the utilization of biotech techniques to orchestrate changes to specific DNA sequences within the genomes of living organisms, so it is indeed a method of genome engineering.  However, unlike “genetically modified organisms (GMOs),” in which a gene is inserted from a different species (transgenic), the gene editing concept in plants focuses on engineering a plant to express its own genes in a different way from what it normally would.  In that sense, “gene edited” plants could offer a less-controversial path to breeding progress than does a “GMO” path.  In both instances, though, they should be considered a “process” toward a destination; not the destination itself.
       The Rieseberg Lab is well known and highly regarded for its work with high-throughput genomic methods, bioinformatics, ecological experiments and evolutionary theory, studying the origin and evolution of species, domesticated plants and weeds.  The sunflower genus (Helianthus) is a primary focus at the lab.
       Moxley explained to the NSA audience that “genome engineering” in the broad sense is used to better understand a specific gene’s function, to introduce desirable traits — and/or to remove or modify a trait.  Its advantages include the ability to rapidly generate desired lines, thereby saving both time and resources.  
       Genome editing systems to date, Moxley noted, have included recombinant DNA technologies, such as gene guns and agrobacterium transgenics.  While these technologies carry the benefit of being very versatile in terms of moving genes from one organism to another, they likewise have been very controversial among the general public.
       True “gene editing” Moxley observed, refers to lesser-known systems (e.g., zinc finger and TALENs) and the now more-recognizable CRISPR.  CRISPRs are specialized stretches of RNA that guide the process to the target DNA sequence.  The protein Cas9 (“CRISPR-associated”) is an enzyme that acts like a pair of “molecular scissors,” capable of cutting strands of DNA.
       CRISPR technology has emanated from the natural defense mechanisms of bacteria (agrobacterium-mediated transformation).  While it holds exciting possibilities for editing genomes of sunflower and other plants, it simultaneously brings along some big challenges.  With sunflower specifically, the challenges include low transformation efficiencies (<1%) and the lack of a stable transformation pipeline.
       USDA’s Hulke told Summer Seminar attendees that using pollen as a foreign DNA carrier currently offers the most promise when it comes to editing the sunflower genome via CRISPR technology.  It’s inexpensive and routine (once the method has been optimized), he noted. Not surprisingly, though, there are significant research obstacles, too.  
      The regulatory environment should be less of an obstacle compared to GMOs, Hulke added, since gene editing does not include the insertion of foreign DNA into the genome.  However, bringing it to commercialization is complicated by legal issues involving intellectual property rights.
       If and when CRISPR technology does become a reality in sunflower, Hulke envisions several “targets” for application.  Sclerotinia and Phomopsis resistance genes certainly would be on that list, as well as genes affecting seed size and oil composition.  Other areas of impact would be downy mildew and rust resistance and herbicide resistance.
       For now, though, the utilization of CRISPR technology in sunflower breeding “is still in the hypothetical phase,” Hulke emphasized.  Biologists are still mastering its fundamentals in “amenable” species; and sunflower is not currently amenable due to transformation issues.  Plus, there are the regulatory issues (not so much in the United States, but more so abroad*), as well as the continuing legal debates regarding intellectual property rights.  So while the potential may be promising, bringing it to reality carries a lot of yet-unresolved scientific and commercial complications. — Don Lilleboe
 
* In late July, the Court of Justice of the European Union issued a judgment that organisms created through many newer genome editing techniques are to be regulated as genetically modified organisms (GMOs) in the EU.  “This decision subjects such organisms, and food and feed products containing these organisms, to expensive and lengthy approval processes as well as traceability, labeling and monitoring obligations,” noted a USDA Foreign Agricultural Service report on this development. 
Key Issues in Agricultural Trade Policy
 
       American farmers are the best in the world — producing much more than we could ever consume — which is why trade is so crucial to U.S. agriculture.  Without overseas customers, we would have huge surpluses, which would drive down prices and create hardships for U.S. farmers. As it is, the United States exports about $150 billion in ag commodities every year.  So it’s important the U.S. remain a reliable supplier of consistent crops at competitive prices. 
       That is something Jason Hafemeister deals with every day.  Hafemeister is the trade counsel to the Secretary at the U.S. Department of Agriculture.  In that role, he advises the Secretary and the Under Secretary for Trade and Foreign Agricultural Affairs on agricultural trade policy. 
       Via phone from his Washington, D.C., office, Hafemeister discussed trade policy and U.S. agriculture with attendees at the NSA Summer Seminar.  He said exports are the secret to success for American producers.  “Government payments make up only a small share of farm gross cash income.  Exports support farm price [and] generate jobs and income for rural America.  At the department, we are trying to find ways to help our producers improve their yields and get a better price. That’s where trade comes in.”
       Hafemeister noted that more than 20% of U.S. ag production is exported; for some commodities, more than half of what’s produced in the United States ends up overseas. He said exports are a critical source of income for a wide range of ag products, and international markets are important to all producers. 
       “We compete in foreign markets with most everything we produce,” he explained. “Nearly everything we produce, we export.  And so much of what we produce we actually have surpluses of.  Of course there are products we import into the United States as well, products that we don’t produce here, like some tropical fruits, cheese and wine.  But it is broadly understood in the United States that we are competitive and we need export markets. Those markets unify U.S. agriculture.”
       Hafemeister said that over the last 80 years, the number of people living in poverty around the world has decreased, while the interconnection between countries has increased.  “That has allowed commercial and technological development and has fostered efficiency and productivity.  It has increased income and has really been great for the world.  People are living much better lives than they used to.  And the great thing for us in agriculture is that people are eating more, and there’s a greater need for our products.” 
       Hafemeister said that when people in lower-income countries have additional money, they spend half or more of that money on food.  That’s good news for American farmers; and when the American rural economy is strong, it’s good news for the U.S. economy as a whole. 
       “When the U.S. economy is stronger, people are more confident and positive about competition and opportunity,” he observed.  “When it comes to trade agreements, they have provided new opportunities for exports. Trade agreements have helped expand U.S. exports, knock down barriers, increase integration, reduce regulations and just make it easier to do business.  Trade agreements deliver for our farmers.”
       Still, Hafemeister said, trade is always a difficult topic because globalization creates a disruption that makes a lot of people uncomfortable.  He explained that NAFTA is seen as good for the United States, but opinions about its impact differ widely. And then there are the tariffs. Hafemeister said there are “too many tariffs” and more countries are threatening to add even more tariffs on U.S. products.  He went onto explain the importance of trade to U.S. agriculture and to the economy and expressed optimism about the strong economy.
       “We have the strongest economy in the world.  People want to invest in the United States.  Right now the economy is doing pretty darn well.  We are coming out of 2008 recession and seeing a steady increase in GDP and employment is increasing. We really have a very strong economy.”— Jody Kerzman
Supporting Minnesota’s Innovation Ecosystem: Food Trends, Sunflower & AURI
 
       When Tom Smude has an idea, there’s not much that will hold him back. Especially since he has the team at AURI on his side.  AURI stands for Agricultural Utilization Research Institute, an organization formed by the Minnesota state legislature 30 years ago to help promote ag production in the state of Minnesota.
       In 2010, AURI helped Smude start his own sunflower oil crushing company, Smude’s Sunflower Oil. 
       “We had drought years in 2007 and 2008, and we were looking for a byproduct to help feed our cattle,” Smude explained to those in attendance at the AURI breakout session at the NSA Summer Seminar. “Sunflower oil was going to be our byproduct, but it ended up being our primary product.  We still have the byproduct going into cattle and hog feed, but cold-pressed sunflower oil became our main focus.”
       Smude still farms about 700 acres and raises cattle; he also does some grain handling, and that’s where he got the idea for his latest project, microwave popcorn.
       “I sold a dryer to a man, and he showed me a microwave popcorn bagging machine he had built. I gave him a bottle of our sunflower oil as a thanks for his business. That started a conversation about sunflower oil, what it can be used for. We started talking about microwave popcorn. That was in 2015. We teased each other for two years saying this was never going to happen. Finally we found a paper that is highly refined and has no wax. And so we started making microwave popcorn.”
       Today, you’ll find Smude’s popcorn in 150 retails stores in Minnesota, Iowa and Nebraska, with plans to launch the product nationally next year. He’s secured funding for an expansion—he’ll build a new crush facility and have a separate building for popcorn. He expects to produce a half million bags of popcorn a day.
       “We’ve come a long way in eight years. It’s still a struggle, but we have found a good group of people over the years to work with.”
Jerry Hasnedl

       Those people include the folks at AURI.  Jerry Hasnedl is a farmer as well as an AURI board member.  He explained the mission of AURI is to foster long-term economic benefit for Minnesota through value-added agricultural products. The board members are well thought out as well: the board is mandated to have at least three representatives from Minnesota agricultural councils (such as the sunflower council), two representatives from statewide ag organizations, such as Farm Bureau and Farmers Union; three representatives from agribusiness, and two members from the state legislature. The board’s job is to guide AURI’s efforts and to advise people like Tom Smude.
       “We helped Tom develop his popcorn, and AURI was instrumental in getting the ethanol industry going, and biodiesel,” said Hasnedl.
       There are currently four AURI offices across Minnesota—located in Crookston, Marshall, St. Paul and Waseca. All but the St. Paul office have lab facilities where scientists are continuously working on adding value to Minnesota’s ag industry.
       “Once a crop is in the bin, or animal is dead, we have a scientist in the laboratory to help develop new uses for those commodities,” explained Michael Sparby, senior project strategist of the AURI. 
       With a staff of around 30 people, AURI serves a diverse set of clients from across Minnesota, and even beyond.  “We do go across state lines sometimes, when we are able to utilize the USDA rural cooperative  grant program.  Ag production doesn’t follow a state line, so when given the funding, neither do our services,” Sparby said. 
       AURI focuses on four areas: food, co-products, bio-based products and renewable energy.  Food is the hottest topic right now, with the explosion in local food processing production. The goal is to get a product into the marketplace within five years. AURI provides applied research, technical assistance, commercialization help and innovative networking.
       “We do public domain research on the trends we see,”?Sparby noted.  “When we gather that research, we pull the industry together, from large Fortune 500 companies to small entrepreneurs.  We can really help open doors for those small entrepreneurs like Tom Smude.”
       AURI initiates about 120 projects annually and works on an average of 200 projects a year.  In the past six years, Sparby said, AURI has created or retained more than 600 jobs, totaled $90 million in new capital investment, and generated $77 million in new annual sales.
       “We’re proud of those numbers. They mean we are making a difference,” he observed. “But we don’t do it alone. We have partners across the state, including college and commodity groups, helping us determine what the pulse of the industry is and how to translate that into products and companies.”
       Jason Robinson, a project development director for AURI, said food trends in the marketplace are driving much of their work right now.  Back to Tom Smude’s microwave popcorn, he said it’s products like that — with simple ingredients — that consumers are demanding. It’s Robinson’s job to help entrepreneurs like Smude take their ideas and make them reality.
       “We are a mission-based organization. We support our clients’ innovation needs with expert help in the very early stages of research,” Robinson explained.  “We can provide some level of comfort to our clients that what they’re working on is the right thing, that they’re playing in the right sandbox.  We don’t replace the actual research, but we can help determine what drives consumer behavior.  And that can be a big help.” — Jody Kerzman
Rick Ekins
At-Plant Application Innovations
 
       During one of the 2018 Summer Seminar’s breakout sessions, Rick Ekins, application and innovations platform lead with FMC Corporation, described the company’s 3RIVE 3D formulation and application system and how it can work for sunflower and other row-crop producers.  
       The 3RIVE 3D system is a new way to deliver crop protection products at planting for seedling defense against pests such as wireworm.  It attaches to all major planter brands, offering central fill liquid and eliminating the need for container handling, high water volume and heavy weight on the planter.  It has a 30-gallon formulation tank and 130-gallon water tank, along with its metering and rate control system, and can cover up to 500 acres between refills.
       The 3RIVE 3D has an in-line injection system, Ekins explained, with the crop protection ingredients not mixed until the time of application.  Precision metering and delivery, no measuring or mixing required of the planter operator, and electronic controls and data management are all part of the system, along with the low-volume delivery.  A key attribute, Ekins emphasized, is the precise distribution in the soil of the active ingredient.  The system lays down an unbroken “foam rope” of crop protection product in the furrow — a continuous three-dimensional zone of protection.
       Testing of the 3RIVE 3D system in sunflower is being conducted by North Dakota State University with Ethos® and Capture®, both FMC products, as well as with Cruiser® from Syngenta.  South Dakota State University also is conducting trials on sunflower.  Establishing sunflower crop tolerances is one focus of the testing.  Registration for commercial use in sunflower is not expected until late 2019 at earliest.
       The basic premise behind FMC’s development of precision platforms such as the 3RIVE 3D system, Ekins noted, is to unite “valuable crop protection products and novel delivery systems.”— Don Lilleboe
Lori McGehee
Guide to Online Export/Import Data & Information
 
       U.S. farmers export billions of dollars of ag commodities every year, and sunflower exports continue to increase.  But how much do you know about sunflower exports and imports?  You can find it all online.  Lori McGehee, marketing consultant for the National Sunflower Association, walked people through the best ways to find that information during a session at the 2018 NSA Summer Seminar.  McGehee says she mainly relies on three websites. 
 
Foreign Ag Services — 
       McGehee says the main website she uses to look up exports for her clients is the USDA Foreign Ag Services site, found at https://apps.fas.usda.gov/gats/default.aspx. Click on “product type,” then choose from a drop-down menu for what you’re seeking.  Choices include exports, imports for consumption, general imports and re-exports. Next, select the product you’re researching from the drop-down menu that appears when you select “product group.” Once you’ve made that selection, the last drop-down menu asks you to select “partner,” i.e., which is the country in which you’re interested. 
       “The FAS website lists most commodities grown in the United States.  The site allows you to publish the data on an Excel page and save it to your computer.  It is easy to use and intuitive.  It’s all based off export documentation collected from the Department of Commerce,” McGehee explained.  “I gather data on in-shell, kernel and sunflower oil exports from this site.”
 
PIERS — 
       Another site McGehee recommends is the PIERS: Bill of Lading Data for U.S. Imports and Exports.  It is found online at ihsmarkit.com/products/piers.html.  She said this is a nice site because it includes what was brought into what ports; but, it requires a subscription to access that information, and that is on the expensive side.
 
Global Trade Atlas —
       The third site McGehee shared with attendees is the Global Trade Atlas website, found at gtis.com/gta/default.cfm?msg=1. This site requires a login and password:
       Login — sunflower   Password — trade
       “This site is not quite as accurate as other systems,” McGehee said.  “The data on this website are collected from customs and foreign countries. Those numbers don’t always match what FAS reports. But it does give a good idea of who imports what.”
       McGehee said the U.S. is the only country that uses a 10-digit system to identify products.  Other countries use six digits, and their systems are not as specific as the U.S. system. Still, she said, it is a good tool to see who the top global exporters are and who are competitors in the market. Information on this site can be exported into a spreadsheet. — Jody Kerzman              
 
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