Crop Issues

Each year, preliminary crop enterprise budgets are unveiled at the Farm Science Review which reveals our best estimates for costs and returns for the main row crops in Ohio for the upcoming year. With continued high crop prices projected for 2022 there is some optimism, however, higher costs will likely decrease profit margins to levels lower than 2021 margins.

Production costs for Ohio field crops are forecast to be higher compared to last year with higher fertilizer, seed, chemical, fuel, machinery and repair costs leading the way.

Variable costs for corn in Ohio for 2022 are projected to range from $477 to $583 per acre depending on land productivity. Variable costs for 2022 Ohio soybeans are projected to range from $266 to $302 per acre. Wheat variable expenses for 2022 are projected to range from $213 to $262 per acre. These are increases over last year of 19%, 18%, and 25% for corn, soybeans and wheat, respectively.

If the current grain prices and costs endure through next year, profit margins will likely be positive although higher costs may create losses for some producers. Grain prices currently used as assumptions in the 2022 crop enterprise budgets are $4.80/bushel for corn, $12.20/bushel for soybeans and $6.90/bushel for wheat. Projected returns above variable costs (contribution margin) range from $226 to $472 per acre for corn and $288 to $529 per acre for soybeans. Projected returns above variable costs for wheat range from $191 to $344 per acre.

Return to Land is a measure calculated to assist in land rental and purchase decision making. The measure is calculated by starting with total receipts or revenue from the crop and subtracting all expenses except the land expense. Returns to Land for Ohio corn (Total receipts minus total costs except land cost) are projected to range from $54 to $283 per acre in 2022 depending on land production capabilities. Returns to land for Ohio soybeans are expected to range from $166 to $393 per acre depending on land production capabilities. Returns to land for wheat (not including straw or double-crop returns) are projected to range from $99 per acre to $242 per acre.

Total costs projected for trend line corn production in Ohio are estimated to be $919 per acre. This includes all variable costs as well as fixed costs (or overhead if you prefer) including machinery, labor, management and land costs. Fixed machinery costs of $78 per acre include depreciation and other overhead. A land charge of $207 per acre is based on data from the Western Ohio Cropland Values and Cash Rents Survey Summary. Labor and management costs combined are calculated at $82 per acre. Details of budget assumptions and numbers can be found in footnotes included in each budget.

Total costs projected for trend line soybean production in Ohio are estimated to be $619 per acre. (Fixed machinery costs: $62 per acre, land charge: $207 per acre, labor and management costs combined: $53 per acre.)

Total costs projected for trend line wheat production in Ohio are estimated to be $541 per acre. (Fixed machinery costs: $36 per acre, land charge: $207 per acre, labor and management costs combined: $48 per acre.)

Current budget analyses indicates favorable returns for soybeans compared to corn or wheat but crop price change, harvest yields and other factors through fall and into summer of next year may change this outcome. These projections are based on OSU Extension Ohio Crop Enterprise Budgets. Newly updated Enterprise Budgets for 2022 have been completed and posted to the Farm Office website: https://farmoffice.osu.edu/farm-mgt-tools/farm-budgets

In addition to projected row crop budgets for 2022, there are newly updated forage budgets posted to our Farm Office site. These include Alfalfa Hay, Alfalfa Haylage and Corn Silage. Also recently updated are two Market Beef Budgets which include Market Beef Budget (Self-Fed) and Market Beef Budget (Bunk-Fed).

Did you know that the “wise old owl” saying is a myth?  Generally speaking, owls are no wiser than other birds of prey.  In fact, other bird species like crows and parrots have shown greater cognitive abilities than the owl.  An owl’s anatomy also helps dispel the myth because most of the space on an owl’s head is occupied by their large eyes, leaving little room for a brain. 

This week’s Ag Law Harvest brings you EPA bans, Ohio case law, USDA announcements, and federal case law which could make your head spin almost as far as an owl’s.  

EPA banning use of chlorpyrifos on food crops.  The EPA announced that it will stop the use of the pesticide chlorpyrifos on all food to better protect producers and consumers.  In its final rule released on Wednesday, the EPA is revoking all “tolerances” for chlorpyrifos.  Additionally, the EPA will issue a Notice of Intent to Cancel under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) to cancel all registered food uses of chlorpyrifos.  Chlorpyrifos is an insecticide used for a variety of agricultural uses, including soybeans, fruit and nut trees, broccoli, cauliflower, and other row crops, in addition to non-food uses.  The EPA’s announcement comes in response to the Ninth Circuit’s order directing the EPA to issue a final rule in response to a petition filed by opponents to the use of chlorpyrifos.  The petition requested that the EPA revoke all chlorpyrifos tolerances because those tolerances were not safe, particularly because of the potential negative effects the insecticide has on children.  For more information about chlorpyrifos and the EPA’s final rule, visit the EPA’s website.

Trusts aren’t to be used as shields.  An Ohio appeals court recently reinforced the concept that under Ohio law, trusts are not be used as a way to shield a person’s assets from creditors.  Recently, a plaintiff filed a lawsuit against a bank alleging breach of contract and conversion, among other things.  Plaintiff, an attorney and real estate developer, claimed that the bank removed money from his personal account and a trust account in violation of Ohio law and the terms of the loan agreement between the parties.  Prior to the lawsuit, plaintiff established a revocable trust for estate planning purposes and to acquire and develop real estate. This dispute arose from a $200,000 loan from the bank to the plaintiff to help establish a restaurant.  A provision of the loan agreement, known as the “Right to Setoff” provision, allowed the bank to “setoff” or effectively garnish all accounts the plaintiff had with the bank.  The setoff provision explicitly prohibited any setoff from any IRA or trust accounts “for which setoff would be prohibited by law.”  Plaintiff made all monthly payments but failed to make the final balloon payment on the loan.  Plaintiff argued that the bank broke the loan contract and violated Ohio law by taking funds from the trust account to pay off the remaining balance of the loan.  The court disagreed.  The court noted that under Ohio law, a settlor’s property in a revocable trust is subject to the claims of the settlor’s creditors.  A settlor is a person who creates or contributes property to a trust.  In this case, plaintiff was the creator, settlor, and sole beneficiary of the revocable trust.  Because of that, the court concluded the bank did not violate Ohio law when using the trust account to setoff the balance of the loan.  Additionally, the court found that the bank did not violate the terms of the loan agreement because a setoff from the trust account was not prohibited by law.  The court noted that Ohio law did not intend to allow a settlor who is also a beneficiary of the trust to use a trust as a “shield” against creditors.  Although trusts can be a useful estate planning tool, there are limits to what a trust can do, as evidenced by this case. 

Renewable fuel supporters file appeal on E15 summer sales. Corn farmers have joined forces with the biofuel industry (“Petitioners”) to ask the D.C. Circuit Court of Appeals for a new hearing on a ruling that struck down the EPA’s 2019 decision to allow year-round E15 sales.  Earlier this year, the same D.C. Circuit Court of Appeals issued an opinion that ruled the legislative text in the law supporting the biofuel mandate does not support the Trump administration’s regulatory waiver that allowed E15 to be sold during the summer months. In their petition, Petitioners argue that the D.C. Circuit Court made “significant legal errors.”  Petitioners contend that the court should rehear the case because the intent behind the nation’s biofuel mandate is better served by the sale of E15 through the summer months because it is less volatile, has less evaporative emissions, and is overall better for the environment than other fuel sources.  Petitioners also believe the court’s original decision deprives American drivers the choice of lower carbon emitting options at the gas pump.

Monsanto asks Supreme Court to review Ninth Circuit’s Roundup Decision.  In its petition to the Supreme Court of the United States Monsanto Company (“Monsanto”) asked the Supreme Court to review the $25 million decision rendered by the Ninth Circuit Court of Appeals.  In that decision, the Ninth Circuit held that the Federal Insecticide Fungicide and Rodenticide Act (“FIFRA”) did not preempt, or otherwise prevent, the plaintiff from raising California failure-to-warn claims on Roundup products and allowed plaintiff to introduce expert testimony that glyphosate causes cancer in humans.  In trial, the plaintiff argued that Monsanto violated California’s labeling requirements by not including a warning on the Roundup label that glyphosate, which is found in Roundup, causes cancer.  Monsanto argues that FIFRA expressly preempts any state law that imposes a different labeling or packaging requirement.  Under FIFRA, Monsanto argues that the EPA did not require Monsanto to include a cancer warning on its Roundup label.  Therefore, Monsanto maintains, that because California law differed from FIFRA, Monsanto was not required to follow California law when it came to labeling its Roundup product.  Secondly, the Ninth Circuit allowed plaintiff to present expert evidence that glyphosate could cause non-Hodgkin’s lymphoma in the general public and that glyphosate caused the plaintiff’s lymphoma.  Monsanto contends that the lower courts have distorted established precedent by allowing the expert testimony because the testimony is not based on generally accepted scientific principles and the scientific community has consistently found that glyphosate does not cause cancer in humans.    

USDA working to protect nation’s dairy industry.  The USDA’s Agricultural Marketing Service (“AMS”) has struck a deal with the European Union (“EU”) to satisfy the EU’s new import requirements on U.S. dairy.  The EU will require new health certificates for U.S. dairy products exported to the EU to verify that the U.S. milk used for products exported to the EU is sourced from establishments regulated under the Grade “A” Pasteurized Milk Ordinance or the USDA AMS Milk for Manufacturing Purposes.  Officials representing the U.S. Dairy Export Council and International Dairy Foods Association claim that the deal will allow U.S. producers to comply with the EU’s mandates while also satisfying the concerns within the American dairy industry.  The deal pushes back the EU’s deadline for new health certificates to January 15, 2022, to allow U.S. producers and exporters enough time to bring their products into compliance.  The USDA also announcedthat it is providing around $350 million to compensate dairy producers who lost revenue because of market disruptions due to the COVID-19 pandemic and a change to the federal pricing formula under the 2018 farm bill.  Additional details are available at the AMS Dairy Program website.

Tale as old as time.  An Ohio appeals court recently decided a dispute between neighbors about a driveway easement.  The driveway in dispute is shared by both neighbors to access their detached garages. Defendants used the driveway to access their garage and then the driveway extends past the Defendants’ garage onto Plaintiff’s property and ends at Plaintiff’s garage.  The dispute arose after Defendants built a parking pad behind their garage and used parts of the driveway they never used before to access the parking pad.  The original easement to the driveway was granted by very broad and general language in a 1918 deed, when the property was divided into two separate parcels.  In 1997, a Perpetual Easement and Maintenance Agreement (“Agreement”) was entered into by the two previous property owners.  The Agreement was much more specific than the 1918 deed and specifically showed how far the easement ran and what portions of the driveway could be used by both parties.  The 1997 Agreement did not allow for Defendants to use the portion of the driveway necessary to access their parking pad.  Plaintiffs argue that the 1997 Agreement controls the extent of the easement, whereas Defendants argue that the broad general language in the 1918 deed grants them authority to use the whole length of the driveway.  The Court found the more specific 1997 Agreement to be controlling and ruled in favor of the Plaintiffs.   The Court reasoned that the 1918 deed creates an ambiguity as to the extent of the easement and there is no way of knowing what the original driveway looked like or how it was used.  The Court concluded that the 1997 Agreement does not contradict or invalidate the 1918 deed, rather the 1997 Agreement puts specific parameters on the existing easement and does not violate any Ohio law.  The Defendants were found liable for trespass onto the Plaintiffs’ property and is expected to pay $27,500 in damages.  The lesson to be learned from all of this?  Make sure your easements are as specific and detailed as possible to ensure that all parties are in compliance with the law.

Poison hemlock and Canada thistle are making unwelcome appearances across Ohio, and that raises the need to talk about Ohio’s noxious weeds law.  The law provides mechanisms for dealing with noxious weeds—those weeds that can cause harm to humans, animals, and ecosystems.  Location matters when we talk about noxious weeds.  That’s because Ohio law provides different procedures for dealing with noxious weeds depending upon where we find the weeds.  The law addresses the weeds on Ohio's noxious weeds list in these four locations:

1. Along roadways and railroads
2. Along partition fence rows
3. On private land beyond the fence row
4. On park lands

Along roadways and railroads.  The first window just closed for mandatory mowing of noxious weeds along county and township roads.  Ohio law requires counties, townships, and municipalities to destroy all noxious weeds, brush, briers, burrs, and vines growing along roads and streets.  There are two mandated time windows for doing so:  between June 1 and 20 and between August 1 and 20.  If necessary, a cutting must also occur between September 1 and 20, or at any other time when necessary to prevent or eliminate a safety hazard.  Railroad and toll road operators have the same legal duty, and if they fail to do so, a township may cause the removal and bring a civil action to recover for removal costs.

Along partition fence rows.  Landowners in unincorporated areas of the state have a duty to cut or destroy noxious weeds and brush within four feet of a partition fence, and the law allows a neighbor to request a clearing of the fence row if a landowner hasn’t done so.  If a landowner doesn’t clear the fence row within ten days of receiving a request to clear from the neighbor, the neighbor may present a complaint to the township trustees.  The trustees must visit the property and determine whether there is a need to remove noxious weeds and if so, may order the removal and charge removal costs against the landowner’s property tax bill.  

On private land beyond the fence row.  A written notice to the township trustees that noxious weeds are growing on private land beyond the fence row will trigger another township trustee process.  The trustees must notify the landowner to destroy the weeds or show why there is no reason to do so.  If the landowner doesn’t comply within five days of receiving the notice, the trustees may arrange for destruction of the weeds.  The township may assess the costs against the landowner’s property tax bill.

On park lands.  If the township receives notice that noxious weeds are growing on park land or land owned by the Ohio Department of Natural Resources, the trustees must notify the OSU Extension Educator in the county.  Within five days, the Educator must meet with a representative of the ODNR or park land, consider ways to deal with the noxious weed issue, and share findings and recommendations with the trustees.

Even with noxious laws in place, we recommend talking before taking legal action.   If you’re worried about a noxious weed problem in your area, have a talk with the responsible party first.  Maybe the party isn’t aware of the noxious weeds, will take steps to address the problem, or has already done so.  But if talking doesn’t work, Ohio law offers a way to ensure removal of the noxious weeds before they become a bigger problem.

We explain the noxious weed laws in more detail in our law bulletin, Ohio’s Noxious Weed Laws.  We’ve also recently illustrated the procedures in a new law bulletin, Legal Procedures for Dealing with Noxious Weeds in Ohio’s Rural Areas.  Also see the OSU Agronomy Team’s recent article about poison hemlock in the latest edition of C.O.R.N, available through this link.

It’s been a busy spring for legal developments in pesticides and insecticides.  Our last article summarized recent activity surrounding dicamba products.  In today’s post we cover legal activity on glyphosate and chlorpyrifos.   

Roundup award.  The Ninth Circuit Court of Appeals dealt another loss to Monsanto (now Bayer) on May 14, 2021, when the court upheld a $25.3 million award against the company in Hardeman v. Monsanto.   The lower court’s decision awarded damages for personal injuries to plaintiff Edward Hardeman due to Monsanto’s knowledge and failure to warn him of the risk of non-Hodgkin lymphoma from Roundup exposure.  Monsanto argued unsuccessfully that the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) preempted the plaintiff’s claim that California’s Proposition 65 law required Monsanto to include a warning about Roundup’s carcinogenic risks on its label.  That requirement, according to Monsanto, conflicted with FIFRA because the EPA had determined via a letter that a cancer warning would be considered “false and misleading” under FIFRA. The Ninth Circuit disagreed that the EPA letter preempted the California requirements.

The Court of Appeals also held that the trial court did not abuse its discretion in allowing the plaintiff’s expert testimony.  Monsanto had challenged testimony from a pathologist whom it alleged was not qualified to speak as an expert.  But the court agreed that the witness testimony met the standard that expert opinions be “reliably based” on epidemiological evidence.

Monsanto also challenged the damages themselves.  The award in Hardeman included $20 million in punitive damages that the district court reduced from $75 million originally awarded by the jury.  While $75 million seemed “grossly excessive,” the appellate court reasoned, $20 million did not, especially considering Monsanto’s reprehensibility, because evidence of the carcinogenic risk of glyphosate was knowable by Monsanto. 

Roundup settlement.  In a second Roundup case, a California district court last week rejected a motion to approve a $2 billion settlement by Monsanto (now Bayer) to a proposed class of users exposed to Roundup or diagnosed with non-Hodgkin lymphoma who have not yet filed lawsuits.  The offer by Bayer in Ramirez, et al. v. Monsanto Co. included legal services, compensation, research and assistance with non-Hodgkin lymphoma diagnosis and treatment, and changes on the Roundup label advising users of a link to non-Hodgkin lymphoma, but would require class members to waive their right to sue for punitive damages if they contract non-Hodgkin lymphoma and stipulate to the opinion of a seven-member science panel about whether Roundup causes non-Hodgkin lymphoma. 

The judge determined that the settlement would accomplish a lot for Bayer by reducing its litigation and settlement exposure, but it would greatly diminish the future settlement value of claims and “would accomplish far less for the Roundup users who have not been diagnosed with NHL (non-Hodgkin lymphoma)—and not nearly as much as the attorneys pushing this deal contend.”   The court also determined that the benefits of the medical assistance and compensation components of the settlement, to last for four years, were greatly exaggerated and vastly overstated.  The proposed stipulation to a science panel also received the court’s criticism. “The reason Monsanto wants a science panel so badly is that the company has lost the “battle of the experts” in three trials,” the court stated.  Concluding that “mere tweaks cannot salvage the agreement,” the court denied the motion for preliminary approval and advised that a new motion would be required if the parties could reach a settlement that reasonably protects the interest of Roundup users not yet diagnosed with non-Hodgkin lymphoma.

Bayer responded to the court’s rejection immediately with a “five-point plan to effectively address potential future Roundup claims.”  The plan includes a new website with scientific studies relevant to Roundup safety; engaging partners to discuss the future of glyphosate-based producers in the U.S. lawn and garden market; alternative solutions for addressing Roundup claims including the possible use of an independent scientific advisory panel; reassessment of ongoing efforts to settle existing claims; and continuing current cases on appeal.

Chlorpyrifos.  The insecticide chlorpyrifos also had its share of legal attention this spring. Chlorpyrifos was first registered back in 1965 by Dow Chemical but its use has dropped somewhat since then. Its largest producer now is Corteva, who announced in 2020 that it would end production of its Lorsban chlorpyrifos product in 2021.  That’s good timing according to the strongly worded decision from the Ninth Circuit Court of Appeals, which ruled in late April that the EPA must either revoke or modify all food residue tolerances for chlorpyrifos within sixty days. 

The plaintiffs in the case of League of United Latin American Citizens v. Regan originally requested a review of the tolerances in 2007 based on the Federal Food, Drug and Cosmetic Act (FFDCA), which addresses pesticide residues in or on a food.  FFDCA requires EPA to establish or continue a tolerance level for food pesticide residues only if the tolerance is safe and must modify or rescind a tolerance level that is not safe.  Plaintiffs claimed the tolerances for chlorpyrifos are not safe based upon evidence of neurotoxic effects of the pesticide on children.  They asked the EPA to modify or rescind the tolerances.  The EPA denied the request, although that decision came ten years later in 2017 after the agency repeatedly refused to make a decision on the safety of the product.  The Obama Administration had announced that it would ban chlorpyrifos, but the Trump Administration reversed that decision in 2017.

Plaintiffs objected to the EPA’s decision not to change or revoke chlorpyrifos tolerance, arguing that the agency should have first made a scientific finding on the safety of the product.  The EPA again rejected the argument, which led to the Ninth Circuit’s recent review.  The Ninth Circuit concluded that the EPA had wrongfully denied the petition, as it contained sufficient evidence indicating that a review of the chlorpyrifos tolerance levels was necessary.  The EPA’s denial of the petition for review was “arbitrary and capricious,” according to the court.  “The EPA has sought to evade, through one delaying tactic after another, its plain statutory duties,” the court stated. 

More to come.  While the spring held many legal developments in pesticide law, the rest of the year will see more decisions.  The Roundup litigation is far from over, and the same can be said for dicamba.  How will the EPA under the new administration handle pesticide review and registration, and the court's order to address chlorpyrifos tolerances?  Watch here for these and other legal issues with pesticides that will outlive the spring.