Crop Issues

The Western Ohio Cropland Values and Cash Rents study was conducted earlier this year from January through April. This opinion-based study surveyed professionals with a knowledge of Ohio’s cropland values and rental rates. Professionals surveyed were rural appraisers, agricultural lenders, professional farm managers, ag business professionals, OSU Extension educators, farmers, landowners, and Farm Service Agency personnel. The study results are based on 131 surveys.

Respondents were asked to group their estimates based on three land quality classes: average, top, and bottom. Within each land-quality class, respondents were asked to estimate average corn and soybean yields for a five-year period based on typical farming practices. Survey respondents were also asked to estimate current bare cropland values and cash rents negotiated in the current or recent year for each land-quality class. Survey results are summarized below for western Ohio with regional summaries (subsets of western Ohio) for northwest Ohio and southwest Ohio.

Results from the Western Ohio Cropland Values and Cash Rents Survey show cropland values in western Ohio are expected to increase in 2024 by 3.3 to 5.8 percent depending on the region and land class. Cash rents are expected to increase from 3.2 to 3.8 percent in 2024 depending on the region and land class. Decreasing profit margins have competed with relatively strong farm equity positions and increasing property taxes to direct values and rents so far in 2024. Cropland values and cash rents are expected to increase although they are projected to be smaller increases than the past two years.

Factors Important to Ohio Cropland Values and Cash Rents

The primary factors affecting these values and rents are land productivity and potential crop return, and the variability of those crop returns. Soils, fertility and drainage/irrigation capabilities are primary factors that most influence land productivity, crop return and variability of those crop returns.

Other factors impacting land values and cash rents may include field size and shape, field accessibility, market access, local market prices, field perimeter characteristics and potential for wildlife damage, buildings and grain storage, previous tillage system and crops, tolerant/resistant weed populations, USDA Program Yields, population density, and competition for the cropland in a region. Factors specific to cash rental rates may include services provided by the operator, property taxes and specific conditions of the lease. This fact sheet summarizes the survey research data collected for western Ohio cropland values and cash rents:

https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents

Projected Estimates of Land Values and Cash Rents

Survey respondents were asked to give their best estimates for long-term land value and cash rent change. The average estimate of cropland value change in the next five years for western Ohio is an increase of 3.6 percent (for the entire five-year period). Responses for the five-year cropland value change ranged from an increase of 50 percent to a decrease of 50 percent.

The average estimate of cash rent change in the next five years is an increase of 2.7 percent. The cash rent change also had a large range, with responses ranging from an increase of 25 percent to a decrease of 50 percent.

Interest Rates

Survey respondents were also asked to estimate 2024 interest rates for two borrowing terms: 20 year fixed-rate mortgage and operating loan. The average estimate, according to survey respondents, of 20 year fixed-rate mortgage borrowing is 7.1 percent. According to the same respondents, the average estimate of operating loan interest rates is 8.3 percent.

The full survey research summary can be found at the Farm Office website: https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents

The U.S. Department of Agriculture Agricultural Marketing Service (USDA) is asking the agricultural community to weigh in on a new program aimed at the voluntary carbon market in the U.S.  The agency has published a Request for Information seeking input on what the agency should consider in developing rules for the new “Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program.”  The purpose of the new program, created by the passage of the Growing Climate Solutions Act last year, is to facilitate farmer, rancher, and private forest landowner participation in voluntary carbon markets by: (1) publishing a list of widely accepted protocols designed to ensure consistency, reliability, effectiveness, efficiency, and transparency of voluntary credit markets; (2) publishing descriptions of widely accepted qualifications possessed by covered entities that provide technical assistance to farmers, ranchers, and private forest landowners; (3) publishing a list of qualified technical assistance providers and third-party verifiers; and (4) providing information to assist farmers, ranchers, and private forest landowners in accessing voluntary credit markets.

Farmers haven’t engaged in the voluntary carbon market to the extent some predicted several years ago, when “carbon agreements” began circulating through the agricultural community.  A carbon agreement is a private  contract that compensates a farmer for adopting practices that sequester carbon, with one ton of sequestered carbon creating a “carbon credit.”  Those who pay farmers for the carbon credits can retain the credits or trade the credits through a carbon market.  The owner of the carbon credits can use the credits to offset their greenhouse gas emissions, with the goal of reducing their “carbon footprint.”

According to USDA Secretary Vilsack, “high-integrity voluntary carbon markets offer a promising tool to create new revenue streams for producers and achieve greenhouse gas reductions from the agriculture and forest sectors.  However, a variety of barriers have hindered agriculture’s participation in voluntary carbon markets and we are seeking to change that by establishing a new Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program.”  In its Request for Information, the agency seeks responses to eight questions:

Question 1: How should USDA define the terms “consistency,” “reliability,” “effectiveness,” “efficiency,” and “transparency” (see 7 U.S.C. 6712(c)(1)(A)) for use in protocol evaluation?

Question 2: What metrics or standards should USDA use to evaluate a protocol's alignment with each of the five criteria to be defined in Question 1? What should USDA consider as minimum criteria for a protocol to qualify for listing under the Program?

Question 3: In general, after a new protocol is published, how long does it take for a project to use the protocol and be issued credits ( i.e., what is the lag time between protocol publication and first credit generation)?

Question 4: Which protocol(s) for generating voluntary carbon credits from agriculture and forestry projects should USDA evaluate for listing through the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program?

Question 5: Additional information for any protocol(s) identified under Question 4.

Question 6: How should USDA evaluate technical assistance providers (TAP)? What should be the minimum qualifications, certifications, and/or expertise for a TAP to qualify for listing under the Program?

Question 7: Should the qualifications and/or registration process be different for entities and individuals that seek to register as a TAP?

Question 8: What should be the minimum qualifications and expertise for a third-party verifier to qualify for registration under the Program?

The agency will accept comments on the questions until June 28, 2024.

Part of a broader policy initiative

USDA announced the Request for Information on the same day that Secretary Vilsack, Energy Secretary Granholm, and Treasury Secretary Yellen, published a Joint Statement of Policy and Principles for Voluntary Carbon Markets, which outlines seven principles for the government’s approach to advancing “high-integrity voluntary credit markets,” summarized in a White House Fact Sheet:

1. Carbon credits and the activities that generate them should meet credible atmospheric integrity standards and represent real decarbonization.
2. Credit-generating activities should avoid environmental and social harm and should, where applicable, support co-benefits and transparent and inclusive benefits-sharing.
3. Corporate buyers that use credits should prioritize measurable emissions reductions within their own value chains.
4. Credit users should publicly disclose the nature of purchased and retired credits.
5. Public claims by credit users should accurately reflect the climate impact of retired credits and should only rely on credits that meet high integrity standards.
6. Market participants should contribute to efforts that improve market integrity.
7. Policymakers and market participants should facilitate efficient market participation and seek to lower transaction costs.

The recent USDA announcements once again suggest that there are many issues for farmers considering engaging in the carbon market.  Caution is usually warranted when dealing with a new, developing market.  For farmers who do want to enter into the carbon market, be sure to refer to our posts on Carbon as a commodity for agriculture? and Considering carbon farming? Take time to understand carbon agreements.  The Farmers Legal Action Group also has an excellent publication on Farmers Guide to Carbon Market Contracts in Minnesota, also useful for Ohio farmers.

A federal court decision last week vacated the registrations of dicamba products XtendiMax, Engenia, and Tavium for over-the-top applications on soybean and cotton crops, making the use of the products unlawful (see our February 12, 2024 blog post).  The decision raised immediate questions about whether the U.S. EPA would exercise its authority to allow producers and retailers to use "existing stocks" of dicamba products they had already purchased.  Yesterday, the U.S. EPA answered those questions by issuing an Existing Stocks Order that allows the sale and use of existing stocks of the products that were packaged, labeled, and released for shipment prior to the federal court decision on February 6, 2024.  For Ohio, the EPA's order allows the sale and distribution of existing stocks until May 31, 2024 and the use of existing stocks until June 30, 2024.

Here is the EPA's order:

1. Pursuant to FIFRA Section 6(a)(1), EPA hereby issues an existing stocks order for XtendiMax® with VaporGrip® Technology (EPA Reg. No. 264-1210), Engenia® Herbicide (EPA Reg. No. 7969-472), and A21472 Plus VaporGrip® Technology (Tavium® Plus VaporGrip® Technology) (EPA Reg. No. 100-1623). This order will remain in effect unless or until subsequent action is taken. The issuance of this order did not follow a public hearing. This is a final agency action, judicially reviewable under FIFRA § 16(a) (7 U.S.C. §136n). Any sale, distribution, or use of existing stocks of these products inconsistent with this order is prohibited.
2. Existing Stocks. For purposes of this order, “existing stocks” means those stocks of previously registered pesticide products that are currently in the United States and were packaged, labeled, and released for shipment prior to February 6, 2024 (the effective date of the District of Arizona’s vacatur of the dicamba registrations). Pursuant to FIFRA section 6(a)(1), this order includes the following existing stocks provisions:

a.  Sale or Distribution by the Registrants. As of February 6, 2024, sale or distribution by the registrants of these products is prohibited, except for the
purposes of proper disposal or to facilitate lawful export.
b.  Sale or Distribution by Persons other than the Registrants. Persons other than the registrants, including but not limited to co-ops and commercial distributors, who are already in possession of these products as of February 6, 2024, may sell or distribute these products until the end date for sale and distribution of existing stocks identified in Table 1; except that such persons may distribute these products after the date identified in Table 1 solely for purposes of proper disposal, lawful export, or to facilitate return to the manufacturer.
c.  Distribution or Sale by Commercial Applicators. Notwithstanding paragraph 2.b, for the purpose of facilitating use no later than the relevant end date for use of existing stocks identified in Table 1, distribution or sale of existing stocks of these dicamba products that are in the possession of commercial applicators is permitted
until the relevant end date for use in Table 1.
d.  Use of Existing Stocks. As of the date of this order, use of XtendiMax, Engenia, and Tavium is permitted until the relevant date identified in Table 1, provided that such use of existing stocks is consistent in all respects with the previously approved labeling accompanying the product.

What happens next? 

The Existing Stocks Order addresses dicamba over-the-top applications for the current growing season, but it's not the end of the dicamba controversy.  One potential next step could come from the petitioners in the federal case that vacated the dicamba product registrations, Center for Biological Diversity v. EPA.  The petitioners could file a motion asking the Court to review the Existing Stocks Order--an action that took place in the previous dicamba cancellation case, National Family Farm Coaltion v. EPA (Monsanto).  The petitioners in that case unsuccessfully sought an Emergency Motion to enforce the vacatur and hold the EPA Administrator in contempt for issuing an Existing Stocks Order.  A second next step that may yet play out is an appeal of the recent federal decision by the EPA, which has 30 days from the February 6 decision date to file an appeal.  At least one thing is clear at this point:  the long-term future of dicamba over-the-top products will continue to exist in a state of uncertainty.

Read the full text of the EPA's Existing Stocks Order.

A federal district court in Arizona has vacated the registrations for dicamba products XtendiMax, Engenia, and Tavium, finding that the U.S. EPA violated pesticide registration procedures when it approved the product registrations in 2020.  As a result of the decision in Center for Biological Diversity v. EPA, the dicamba products are no longer legally authorized for use and application in the U.S.  Although there will likely be appeal of the decision, the new ruling creates uncertainty over the use of dicamba products for the upcoming crop season.

History of the case

If the court’s ruling feels familiar, that’s because it is a repeat of a 2020 Ninth Circuit Court of Appeals decision in National Family Farm Coalition v. EPA (Monsanto).  In that case, the court vacated the first “conditional” dicamba product registrations granted by the EPA in 2018.  The court found that the EPA had “substantially understated” and failed to acknowledge the risks of dicamba’s volatility and its effects on non-users.  The EPA then cancelled the product registrations in June of 2020, but allowed producers to use “existing stocks” of already purchased products to apply the products until July 31, 2020.  The Ohio Department of Agriculture shortened that timeline in Ohio due to growing conditions within the state, prohibiting applications of dicamba after June 30, 2020.

Bayer, BASF, and Syngenta immediately revised the label application instructions and restrictions for their dicamba products and resubmitted their registration requests to the EPA. In October of 2020, the EPA granted the applications and issued “unconditional” five-year registrations for over-the-top applications (OTT) of the products on cotton and soybean crops.  The EPA did not provide a notice and opportunity for the public to submit comments before it made the registration decision. The National Family Farm Coalition, Pesticide Action Network, Center for Food Safety, and Center for Biological Diversity filed the current lawsuit, claiming that the EPA violated federal law by granting the unconditional registrations without a notice and comment period.

The court’s reasoning in this case

EPA’s error.  The primary basis for the court’s decision is the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), Section 136a(c)(4), which contains the notice and comment requirement for registration of a “new use” of a pesticide or herbicide.  It states that the EPA:

“. . . shall publish in the Federal Register. . . a notice of each application for registration of any pesticide that contains any new active ingredient or if it would entail a changed use pattern. The notice shall provide for a period of 30 days in which any Federal agency or any other interested person may comment.”

FIFRA further states that a “new use” of a product means, in part, “any additional use pattern that would result in a significant increase in the level of exposure, or a change in the route of exposure, to the active ingredient of man or other organisms.”

The EPA took the position that it did not have to provide the FIFRA notice and a comment period because the 2020 registration requests were not applications for a “new use” since EPA had previously approved the products.  The court strongly disagreed, however, emphasizing the previous court decision that had vacated those registrations because the EPA had failed to fully consider the risks of the products.  The EPA’s conclusion that the 2020 registrations were not for a new use “is so implausible that the Court cannot ascribe it to be a mere difference in view,” the court stated.  Stakeholders who would be affected by the dicamba registrations should have had an opportunity to “meaningfully weigh in during the decision-making process before EPA concluded whether OTT dicamba has unreasonable adverse effects on the environment,” said the court.

Remedy for the error.  The court explained that upon finding an agency has violated federal law, the presumed remedy a court must grant is to vacate the agency’s action.  The law requires that only in limited circumstances, when equity requires it, should a court remand without vacating an agency decision.  There are two factors the law requires a court to review in determining the remedy:  the seriousness of the agency’s error and the disruptive consequences of vacating the agency’s decision.  The court’s next step was to review those two factors and determine whether it should remand the issue with or without vacating the dicamba registrations.

Examining the first factor, the court concluded that the EPA’s error was “very serious” because it was likely that, had the agency considered field studies, data, and other information that would have been submitted during the comment period, the EPA’s registration decision likely would have differed from the decision it made to grant the five-year unconditional registration.  The history of the dicamba registrations were important to the court, and the judge noted that there had not been a notice and comment period for stakeholders who were opposed to approving dicamba products since 2016, when the EPA considered the original registration.  The court reiterated a long list of field studies, incident reports, and data generated since 2016 that the agency could have considered had it provided a comment period.  Noting that the EPA was “highly confident that control measures would eliminate dicamba offsite movement to only a minimal effect,” the court pointed to years of incident reports on dicamba offsite movement and concluded:

“This Court believes hearing from all stakeholders is likely to change the OTT dicamba registrations at least from unconditional to conditional, with data gathering requirements reinstated. Hearing from non-users of OTT dicamba may change the EPA’s circular approach to assessing costs for risks from OTT dicamba offsite movement. Instead of simply concluding there is no risk and, therefore, no costs to these stakeholders, EPA is likely to include the costs to these stakeholders when balancing the risks and benefits for OTT dicamba. Accordingly, the Court finds the EPA’s procedural error to unconditionally issue the “new use” 2020 dicamba registration, without notice and comment, was serious.”

The court then examined the second factor, the disruptive consequences of vacating the agency’s decision. The court recognized the benefits of dicamba products to the agricultural industry and that growers, through no fault of their own, would be in the difficult position of finding legal herbicides to protect their crops if the dicamba registrations were vacated.  Nevertheless, the court agreed with the reasoning in the previous dicamba case, National Family Farm Coalition v. EPA (Monsanto), that the seriousness of the EPA’s failure to assess the risks and costs for non-users of dicamba warranted vacating the registration despite the disruptive consequences.

What happens next?

There are two issues to watch now in the wake of the court’s decision. First is whether the EPA will appeal the federal district court’s decision.  The appeal would go the Ninth Circuit Court of Appeals, the same appellate court that reviewed the decision in the first dicamba appeal, National Family Farm Coalition v. EPA (Monsanto).  If the EPA also requests a stay, the appeal would put the federal district court’s decision on hold.

If there is not an appeal, the second issue to watch for is how the EPA and state agencies will direct the use of existing stocks of dicamba products.  The EPA could use its authority to allow continued use of existing stocks of dicamba products until a certain date, as it did in the previous case.  If the EPA does issue an existing stocks order, states could also address the extent of existing stocks use within their borders, as Ohio did in the previous case.

Follow the Ohio Ag Law Blog for continued legal information about Center for Biological Diversity v. EPA and review the federal district court’s opinion through this link.  Ohio growers should also refer to information from OSU’s Weed Science Extension Specialist, Dr. Allyssa Essman, available through OSU’s C.O.R.N. newsletter.