October 26, 2015
By Mikkel Pates
With grain prices dropping since 2013, farmers are closing the 2015 season with big crops and difficulty penciling profits.
Agweek visited with the presidents of the South Dakota Farm Bureau and the South Dakota Farmers Union, the two general farm organizations that aren’t specific to a commodity or a species of livestock. The organizations differ in emphasis, but agree on certain things. Significantly, both say ethanol will be important to the region, and will weather the financial storm.
Scott VanderWal, president of the SDFB since 2004, operates a third-generation family farm, raising soybeans and corn, with some custom cattle-feeding and custom harvesting near Volga, S.D., which is about 8 miles west of Brookings, S.D.
South Dakota Farmers Union President Doug Sombke farms with his sons on land his great-grandfather farmed near Groton, S.D., about 20 miles east of Aberdeen. Today, the Sombkes run the farm and have diversified with a hunting lodge, dog business and a soil-sampling enterprise.
Ethanol a key
VanderWal leads an organization of about 16,000 member-families, meaning a single member might represent several family members. He says the SDFB is clearly and consistently in favor of ethanol development. It is opposed to lowering ethanol volumes required in the Environmental Protection Agency’s Renewable Fuel Standard, as has been proposed.
Ethanol production also creates a byproduct called distiller’s grains, which benefits the state’s livestock industry as a feed option.
“We do have some livestock producers who feel the RFS is an unfair advantage, and that it drives up the cost of corn,” VanderWal says. “But we can see now that corn is back to some pretty low prices. We’re still producing ethanol at record levels, like we had been.”
He harvested a good soybean crop, and the biggest corn crop his farm has ever experienced, with a yield of nearly 190 bushels per acre.
Ethanol development and expansion is the biggest priority for the Farmers Union, an organization of about 14,000 people. With the rise and fall of corn prices in the past several years, Sombke sees ethanol as “the way to go” to help stabilize corn and other grains.
“It gives us another market for the marketing of the corn, but also the byproducts,” he says.
South Dakota has been one of the most aggressive places for developing ethanol, and is still trying to expand. The Ring-Neck Energy & Feed LLC project in Onida, S.D., about 30 miles northeast of Pierre, is the most recent effort to build a new plant. The company, formed in September 2014, is trying to gather finances to build a 70-million-gallon-per year plant that would take 25 million bushels of corn per year.
The current $3-per-bushel corn price might mean less cash for investment, but that’s when farmers need the ethanol market the most, Sombke says.
“That’s the reason I got into it 10 years ago, and why I started using higher blends of ethanol rather than just using the 10 percent, and not only in flex-fuel vehicles but in non flex-fuel vehicles, as well.”
A national industry effort seeks to raise the ethanol level in fuel from 10 to 15 percent, but Sombke thinks the future is the E30 blend. It’s the “most stable fuel you can find,” he says, regarding its evaporation volatility. He has E30 splash-blended and delivered to his farm for use in flex-fuel and standard vehicles.
Despite allegations against the ethanol blends, Sombke emphasizes there has never been “proof in a legal case” of any standard engine failing from the use of E30.
In terms of policy efforts, Sombke says SDFU is circulating a petition to acquire 27,741 valid signatures to create an independent political redistricting committee for the state. It would revise the way the state legislature changes voting district boundaries. Iowa has done it. Montana is one of 26 other states considering something similar.
Gerrymandering political districts to suit partisan motives is a problem for rural voters, Sombke says. A recent district change put 1,500 people from Aberdeen into a district that sprawls 100 miles away into Spink, Clark and Hamlin counties.
“The legislators are picking the voters, not the voters picking the legislators,” Sombke says.
As for its policy initiatives, the SDFB is anxious to help follow through on a state wetland mitigation bank it helped develop in the last Legislature, VanderWal says.
Under the wetland mitigation bank plan, a farmer wanting to eliminate a wetland in the middle of a field can buy credits toward creating a new one, and the person expanding or creating a wetland can take a payment toward that purpose. The state is still in the process of getting the federal Natural Resources Conservation Service to approve the details.
VanderWal says frustration surrounds NRCS backlogs in making wetland determinations.
In a related wetland issue, SDFB supports litigation efforts to oppose the expansion of EPA authority over wetlands in the Waters of the U.S. rule. VanderWal says if WOTUS can’t be stopped legally, the groups will work through Congress to defund or overturn the rule. South Dakota joined a North Dakota effort that created an injunction on the rule in 13 states, which has since been expanded nationwide.
The 2015 North Dakota Legislature passed exemptions to the state’s anti-corporate farming law to closer reflect legislation in South Dakota that allowed growth in its dairy industry.
To compare, South Dakota voters in November 1998 approved Amendment E, an anti-corporate farming law, but it was ruled unconstitutional in 2003. Sombke says the SDFU supports dairy development, but he agrees with North Dakota Farmers Union colleagues who have opposed an anticorporate exemptions in North Dakota.
“I don’t think (overturning the law) changed anything for the better or worse,” Sombke says of the South Dakota law. “I do know corporations try to build because of [a lack of anti-corporate law in South Dakota], but we’re still largely family-owned, not corporate-owned.”
VanderWal says his organization is in support of “responsible livestock development and expansion. With land prices and the cost of capital now for starting to farm, it’s virtually impossible for a young person who isn’t inheriting a farm to get started.”
South Dakota needs more dairy cows with the opening of the Bel Brands cheese plant in Brookings. The expansion of the dairy industry has been a good thing, VanderWal says.
“Lots of people have new (dairy-related) jobs around Brookings,” he says. “It’s economic development.”
VanderWal says South Dakota’s program to help counties identify areas well-suited for livestock production is significant from environmental and social perspectives.
Sombke says South Dakota’s main advantage over North Dakota is climate.
“There’s a big difference between here and Fargo in the coldness of the weather and the climate for livestock,” says Sombke, who lives 35 miles from the North Dakota border. “That’s the biggest reason there’s no development (in North Dakota), not the corporate farming law. That’s just what the North Dakota Farmers Union says, as it is leading an effort to overturn the new exception.”
Sombke says the South Dakota Department of Environment and Natural Resources should gather more diverse opinions on the environmental impacts of large dairies and feedlots. He says the large livestock enterprises can have bigger negative effects on the environment.
VanderWal says the bottom line is that livestock development is still the most available avenue for young people to get into agriculture.
“You can still put up buildings or a feedlot, and start contract-producing livestock,” he says.
Most of the dairies that have moved here from other countries and states initially only wanted the 50 acres or so to place their buildings, and would buy feed products from surrounding farmers. Now, some are starting to buy their own farmland and put up their own feed.
That’s important, because it means they’re making money.
And both organizations can agree that’s crucial.
While the two groups have historically been split along political lines, the South Dakota Farm Bureau and Farmers Union do agree on some issues.
Ethanol’s influence on their state’s economy and farmers is at the top of that list.
Read the original story: Common Ground: SD Farm Groups Differ on Policy, but Support Ethanol