Posted 08/28/2020

North Dakota Stockmen’s Association Member Update: Aug. 28, 2020

The North Dakota Stockmen’s Association (NDSA) is proud to be the voice of the state’s beef cattle producers. Here are a few things you should know:

Department of Trust Land's fall surface auctions to be held online only

Following an executive order issued by Gov. Doug Burgum in April, the North Dakota Department of Trust Lands (DTL) will be conducting its fall surface lease auctions via an online auction platform called EnergyNet instead of the usual face-to-face sales in the respective county seats. Interested parties should be aware that they will be required to register to bid at www.energynet.com, and other changes will also be in effect.

The tracts will be available for viewing beginning Sept. 1 at the EnergyNet website. The opening and closing of tracts will be staggered and conducted alphabetically by county. Bidding will start Sept. 28, but be open for seven days, with the auctions for the first of the tracts (A = Adams County) closing Oct. 6 and the last Oct. 9.

Another change is that checks will not be accepted for payment. Now, payments must be made via wire transfer or automated clearing house (ACH). EnergyNet’s 3 percent online auction “convenience fee” assessed on the first year’s rent will be covered by the DTL; however, any associated bank charges will be the responsibility of the lessee.

The NDSA has heard from many producers with questions and concerns about this process and posed them to the DTL. Here are a few commonly asked questions (and their answers) that might be helpful to you:

Q. How does bidding work?

A. All bids entered are treated as a maximum bid. EnergyNet bids automatically on your behalf, up to the amount you specify. Any time a competing bid is placed that is less than an entered maximum bid, another bid one bid increment higher than the competing bid will be automatically entered on your behalf. The automatic bidding will stop when a competing bid is received that is larger than your maximum bid. The EnergyNet system does not make a bid unless necessary to maintain your status as high bidder. After you have set a maximum bid, you don’t have to be online. You will receive e-mail confirmations after you have placed a bid, when you have been outbid and when you are the winner.

Q. What happens if there is a tie at the close of the auction?

A. The auction period will not be extended. Instead, the first chronologically received bid of a tie will be the winner.

Q. Will I know who else is bidding or registered to bid?

A. No. The bidder identity is anonymized and will be displayed only as “Bidder 19,” as an example.

Q. How long will the DTL use this online-only feature?

A. The executive order states that it “shall remain in effect for the duration of the declared state of emergency,” but no specific expiration date is listed. North Dakota Century Code specifies that the leasing of university and school lands “must be at public auction ... and held at the county seat.” Therefore, a permanent change to this online format would require legislative action.

For questions about bidding, call EnergyNet at (877) 351-4488 or visit www.energynet.com/page/How_to_Bid. For questions about specific tracts, contact the DTL at (701) 328-2800 or dtlsurface@nd.gov.

Coronavirus Food Assistance Program work continues

The NDSA continues to work with lawmakers to fortify the Coronavirus Food Assistance Program (CFAP). Congress is considering legislation to that end right now. Among the NDSA’s asks: to increase the “after April 15” payments paid through the original CFAP program to a more equitable level and to oppose any federal program that would incentivize the prolonged backlog of cattle in the system.

The U.S. Department of Agriculture (USDA) recently announced that the application deadline for the CFAP program has been extended from Aug. 28 to Sept. 11. Additionally, USDA also announced that it will be paying out the remaining 20 percent of authorized payments to applicants. (Originally, only 80 percent was dispersed.) Those who have already applied do not have to reapply in order to capture the remaining value. Those payments will be made automatically. Going forward, producers who apply for CFAP will receive 100 percent of their total payment (not to exceed the payment limit) when their applications are approved. For more information and to apply for the program, click here.

As of last week, approximately 16,000 CFAP applications from North Dakota, valued at nearly $250 million, had been processed.

CME to make changes to daily price limits

The CME Group (CME) published a Special Executive Report (SER) outlining proposed amendments to the Daily Price Limits rule of the Live Cattle and Feeder Cattle Futures Contracts last week. CME intends to adopt a variable price limits structure, and the formula it intends to use to annually adjust normal limits can be found below (taken from CME’s proposed amendments to the Rulebook at 10102.D):

Daily settlement prices are collected for the nearest June contract over 45 consecutive trading days before and including the last trading day in April (Last Trade Date of the nearest April contract). The average price is calculated based on the collected settlement prices and then multiplied by 4.25 percent. The resulting number rounded down to the nearest $0.0025 per pound, or $0.040 per pound, whichever is higher, will be the new initial price limits for Live Cattle futures and will become effective on the first trading day in June and will remain in effect through the last trading day in May of the following year.

The daily price limits in the Feeder Cattle Contract will be 125 percent of the Live Cattle limit. No changes have been made to the formulas for determining expanded limits or the rules governing limits in the final two trading days of a contract. Pending Commodity Futures Trading Commission approval, the new limits will go into effect Oct. 5. On an annual basis, the normal limits will be adjusted using the aforementioned formula and will go into effect on June 1 each year.

Prevented plant flexibility granted in some counties

The NDSA welcomed the U.S. Department of Agriculture’s Risk Management Agency’s (RMA) announcement last week that farmers who planted cover crops on prevented plant acres in select counties in North and South Dakota will be permitted to hay, graze or chop those fields beginning Sept. 1 rather than Nov. 1 this year. The change is being made because of excessive moisture and flooding in 42 counties in the two states.

The change still will allow producers to maintain eligibility for their full 2020 prevented planting indemnity. North Dakota’s prevented plant acres are expected to reach more than 3 million acres this year, accounting for approximately one-third of all prevented plant acres in the country.

Qualifying counties in North Dakota right now include the following: Barnes, Benson, Bottineau, Cass, Dickey, Eddy, Foster, Grand Forks, Griggs, Kidder, LaMoure, Mcintosh, Nelson, Ramsey, Ransom, Rolette, Sargent, Sheridan, Steele, Stutsman, Towner, Traill and Wells Counties. A 15 percent prevented plant threshold was used to establish qualifying counties. Additional counties may be added if they trigger this threshold after their county’s acres are all certified. As of last week, approximately 95 percent of acres had been certified in North Dakota.

Cover crop flexibility has been a priority for the NDSA over the past year. It has worked alongside the North Dakota Congressional delegation in advocating for an earlier cover crop utilization date and had direct conversations with RMA Administrator Martin Barbre about the importance of this to North Dakota’s producers. Earlier this month, the NDSA joined with the North Dakota Corn Growers Association, North Dakota Farm Bureau, North Dakota Farmers Union, North Dakota Grain Growers Association, North Dakota Soybean Growers Association, Northern Pulse Growers Association and U.S. Durum Growers Association in appealing to U.S. Secretary of Agriculture Sonny Perdue to make this change as well.

Rue represents NDSA at meeting with U.S. Fish and Wildlife Service

NDSA District 1 Director Levi Rue of Sheyenne represented the NDSA at a meeting with U.S. Fish and Wildlife Service Director Aurelia Skipwith hosted by Sen. Kevin Cramer in Devils Lake last week. The meeting was a roundtable discussion with North Dakota producers and landowners to discuss the agency’s handling of Waterfowl Production Area easement enforcement and other issues, including Rue’s firsthand experience with the agency improperly closing a road. Rue and other leaders shared concerns and offered feedback to hopefully improve processes moving forward.

Ellingson shares ranchers’ priorities and concerns at Hoeven roundtable

NDSA Executive Vice President Julie Ellingson shared North Dakota beef producers’ priorities and concerns at an agricultural roundtable discussion hosted by Sen. John Hoeven last week. Among them: Coronavirus Food Assistance Program 2.0 priorities, prevented plant cover crop flexibility criteria and the importance of the Mandatory Price Reporting reauthorization and related enhancements to improve price discovery.

NDSA shares state of the industry with economic revenue forecasters

The NDSA was invited to provide a state of the beef industry with the legislature’s and the Office of Management and Budget’s economic revenue forecasting committees over the past two weeks. Julie Ellingson, NDSA executive vice president, detailed the challenges the cattle industry has faced over the past year – from market disruptions due to the Holcomb, Kan., fire and COVID-19 pandemic to extreme weather conditions. She detailed the U.S. Department of Agriculture’s and Department of Justice’s investigation into cattle markets and margins, federal assistance programs and some of the bright spots for the industry – improving feeder cattle prices, lessening supply chain disruptions and a promising new trade deal with Japan. The committees use this and information from other major industry sectors to help them as they plan and budget for the upcoming biennium.

More time to collect CRP bales

The NDSA is expecting that producers will be given more time to gather their Conservation Reserve Program bales. A request to extend that deadline to Oct. 1 has been made. Official word is expected from Farm Service Agency soon.

Checkoff-funded issues management team sets record straight with Prevention magazine

The beef industry’s checkoff-funded issues management team stepped in this week when Prevention magazine shared an article entitled “Why Cutting Back on Beef is Good for You and the Planet.” In it, the magazine announced it will no longer create recipes that include beef, citing environmental and health concerns and a 2006 study stating that industrialized beef production is responsible for up to 80 percent of deforestation in the Amazon and that red meat has been “definitively linked to higher risks of health hazards like heart disease and cancer.”

The issues management team responded to the article’s author, citing research and correcting misinformation, worked with regional influencers to submit op-eds and share accurate information about beef’s role in a healthy, balanced diet and is continuing to monitor the situation.

Beef has a good story to tell about its impact on the environment. Here are a few talking points you can use to refute myths such as those perpetuated by Prevention:

• According to the Environmental Protection Agency, greenhouse gas from beef cattle only represents 2 percent of emissions in the United States. All of agriculture, including beef production, accounts for around 9 percent of total U.S. emissions.

• Beef cattle production, including the production of animal feed, is responsible for only 3.7 percent of greenhouse gas emissions in the United States.

• If all livestock in the United States were eliminated and every American followed a vegan diet, greenhouse gas emissions would only be reduced by 2.6 percent, or 3.6 globally. Reducing beef consumption in the United States is not a realistic or impactful solution for climate change.

• The United States is the leader in sustainable beef production.

• Cattle generate more protein for the human food supply than would exist without them because their unique digestive system allows them to convert human-inedible plants into high-quality protein.

The shows will go on

The NDSA is committed to hosting its regularly scheduled activities as normally as possible. Plans are still on for the All Breeds Cattle Tour Oct. 2-3 in the Minot area, the NDSA Annual Convention & Trade Show Oct. 8-10 in Bismarck and the Tomorrow’s Top Hands Beef Leadership Summit Oct. 22-24 in Minot. Detailed event information will be included in the September Stockman magazine. Know that precautions are being taken to ensure your safety and well-being as you join us for these events.

Auto-renew membership options available

NDSA members who would like to simplify their lives and automatically renew their NDSA dues are now able to do so. Those paying via credit card may elect to choose the auto-renew option on their renewal form if they would like the convenience of this feature. The auto-renew election can be cancelled at the member’s discretion at any time.

Recruiters: sprint across the finishline

The NDSA Membership Contest will come to a close next Monday, Aug. 31, and recruiters are encouraged to sprint across the finishline by reaching out to their friends and family and asking them to join the NDSA and strengthen the cattle industry’s voice. Recruiters will be eligible for prizes, as well as a drawing for $2,075 in Bull Bucks cash. The drawing will be held during the NDSA Annual Convention & Trade Show in Bismarck in October. If you need recruitment materials, contact Leann Rosencrans, NDSA office manager, at (701) 223-2522 or ndsa@ndstockmen.org.