Inside This Issue

1 China Issues Official

Biosafety Certificates

2 Arbitration Decisions

3 Upcoming Events

3 NGFA Recommends Major

Revisions to FDA Proposed

Rules

7 President Signs

Appropriations, Tax

Extenders Bills

8 Updates on Two Ag

Biotech Court Cases

11 NGFA, Orgs Tell EPA More

Worked Needed for a

Sustainable NSPS Proposal

13 Lift on Cuba Trade

Embargo Could Lift Exports

15 New Senate Ag

Committee Announced

16 Save the Date: Elevator

Design Conference

Volume 66, No. 25 | December 23, 2014

ngfa.org/newsletter | ngfa@ngfa.org | 202.289.0873

China Issues Official Biosafety

Certificates for Import of Biotech Traits

By Randy Gordon, President

Three corporate owners of biotechnology-enhanced traits indicated this week

they have received official “Biosafety Certificates if Agricultural GM) (Import)”

from China’s Ministry of Agriculture for biotech-enhanced crop traits for import as

food, feed and for further processing.

Covered by the Chinese action are Syngenta’s Agrisure Viptera® MIR162 corn

trait, Bayer CropScience’s LibertyLink® 55 soybean trait, and stacked biotech

traits involving DuPont Pioneer’s Plenish® soybean. The Plenish trait previously

had been approved for import into China.

Syngenta said China’s approval of its Viptera MIR162 corn trait covers corn grain

and processing coproducts, such as distillers dried grains with solubles (DDGs)

for food and feed use. Viptera MIR162 was approved for cultivation in the United

States in 2010, and an import approval dossier was submitted to Chinese

government authorities in March 2010. According to Syngenta, the trait now has

been approved for import into Australia, Belarus, the European Union, Indonesia,

Japan, Kazakhstan, Mexico, New Zealand, Philippines, Russia, South Africa,

South Korea, Taiwan and Vietnam, in addition to China. Meanwhile, in addition to

the United States, Agrisure Viptera MIR162 also is approved for cultivation in

Argentina, Brazil, Canada, Colombia, Paraguay and Uruguay, according to the

company.

To apply for a Chinese Safety Certificate, Syngenta is directing exporters to

obtain a China Safety Certificate Request Form available on its website at

www.syngentastewardship.com/. The form may be accessed by clicking on the

“Grain Marketing” link on the right-hand side of the webpage. Then click on the

“China Safety Certificate Request Form.” Once the application is completed,

it is to be sent via email to syngenta.stewardship@syngenta.com, or faxed to

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PAGE 2 NGFA NEWSLETTER

1-800-858-8664. Syngenta said those with questions may call the company at

877-476-2676.

Meanwhile, Bayer CropScience received a biosafety import certificate from China

for its LL55 Liberty Link soybean, which is a sister trait of its LL27 trait. Bayer

CropScience had been waiting for more than seven years for China to approve

the trait, and had declined to commercialize it until that occurred. The company

said a commercial launch of the new LL55 varieties now is planned for 2015.

The DowPioneer Plenish™ high-oleic soybean trait was approved in 2010 for

cultivation in the United States, after previously receiving cultivation approvals in

Canada and Mexico. The trait, which currently is produced under stewarded

contract arrangements involving growers and local soybean processors, is not

approved yet for import by the European Union.

Chinese officials had provided notification shortly before the 25th session of the

U.S.-China Joint Commission on Commerce and Trade (JCCT) meeting

convened last week in Chicago to each of the technology owners that the

biosafety certificates would be issued. At the conclusion of the JCCT, Secretary

of Agriculture Tom Vilsack announced the two countries had agreed to begin a

vice-ministerial-level Strategic Agricultural Innovation Dialogue in early 2015 with

multiple Chinese ministries that he said “will showcase U.S. innovation and

create new economic opportunities in a wide range of agricultural industries,

while addressing food security, climate change and environmental protection.”

A statement issued by the U.S. government following the JCCT meeting noted

China had “made commitments” that should promote significant increases in U.S.

exports of soybeans, corn and dairy products. “Specifically, China announced

that it would approve the importation of new biotechnology varieties of U.S.

soybeans and corn (a precursor to the biosafety safety certificates referenced

previously) – current annual U.S. exports of soybeans and corn to China total

$14 billion and $3.5 billion, respectively – and also that it would pursue a regular

dialogue with the United States focused on the benefits of the increased use of

innovative technologies in agriculture, both for the United States and China.

China also agreed to strong IP (intellectual property) protections for products that

use trademarks or common names, like “parmesan” or “feta” cheese, which in

recent years have begun to demonstrate a potential for rapid export growth vis-à-

vis China.”

Established in 1983, the JCCT is the primary forum used by the United States

and China to address bilateral trade and investment issues, and to promote

commercial opportunities between the two countries.

Arbitration Decisions

This week’s decisions:

Arbitration Case Number 2662

Barry Nowatzke and Nowatzke

Farms (Michigan City, ID) v.

Cargill, Inc. (Minneapolis, MN)

– 10/16/2014

Arbitration Case Number 2679

Cargill, Incorporated

(Minneapolis, MN) v. Searcy

Farms, Inc. (Danville, ID) –

10/16/2014 - $116,764.14

These and all NGFA Arbitration

Committee decisions and default

judgments are accessible at

ngfa.org/decisions.

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PAGE 3 NGFA NEWSLETTER

Upcoming Events

Jan. 13 How to Prepare for an OSHA

Inspection

With Nebraska Grain and

Feed Association

Location TBD

Jan. 15 How to Prepare for an OSHA

Inspection

With Kansas Grain and Feed

Association

Salina, Kansas

Registration form

Jan. 27 How to Prepare for an OSHA

Inspection

With Montana Grain Elevator

Association

Great Falls, Mont.

Registration form

Mar. 15-17 Annual Convention

San Antonio, Texas

Hyatt Regency

Registration open

May 4-5 Trade Rules Seminar

Hilton St. Louis Airport

St. Louis, Mo.

Registration open

July 28-30 NGFA/Grain Journal Elevator

Design Conference

Kansas City, Mo.

Sheraton at Crown Center

Registration opens March

Aug 4-5 Ag Transportation Summit

Chicago, Ill.

Westin O’Hare

Registration opens March

For a full listing of events, go to

ngfa.org/events

NGFA Recommends Major Revisions

to FDA Proposed FSMA Rules

By Dave Fairfield, Vice President of Feed Services

The NGFA on Dec. 15 submitted extensive comments to the U.S. Food

and Drug Administration (FDA) recommending the agency make major

changes to three reproposed rules that would establish safety

requirements for human food, animal feed and pet food.

Overview

FDA previously had amended and reissued for additional public comment

key portions of the three originally proposed rules implementing major

sections of the Food Safety Modernization Act (FSMA). FDA reissued the

proposed rules on Sept. 19 because public comments received on its

initial proposals from the NGFA and other stakeholders led the agency to

make significant changes to certain key provisions.

The proposed rules are very significant to NGFA-member companies

involved in supplying commodities or ingredients for or manufacturing and

distributing human food, animal feed, pet food and feed ingredients, as

well as those involved in the storage of raw agricultural commodities,

such as grains and oilseeds. In addition, the proposed requirements

would affect companies engaged in importing foreign food/feed products,

including grains and oilseeds.

The NGFA’s Feed Legislative and Regulatory Affairs Committee

spearheaded the development of NGFA’s statements. In doing so, the

committee received broad input through an extensive review process that

involved several other NGFA committees. In addition, the NGFA actively

was involved with a coalition of other animal feed- and pet food-related

trade associations to evaluate the proposed rules and, to the degree

possible, gain alignment on comments to FDA on major issues.

Below highlights portions of NGFA’s statements, for more detailed

information see the full comments:

Supplemental Notice of Proposed Rule Making – Current Good

Manufacturing Practice and Hazard Analysis and Risk-Based

Preventive Controls for Food and Animals (74 pages)

Proposed Rule – Current Good Manufacturing Practice and

Hazard Analysis and Risk-Based Preventive Controls for Human

Food (28 pages)

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PAGE 4 NGFA NEWSLETTER

Supplemental Notice of Proposed Rule Making – Foreign Supplier

Verification Programs for Importers of Food for Humans and Animals

(13 pages)

Comment Highlights

FDA’s three proposed rules would establish requirements for current good

manufacturing practice (CGMP) and preventive controls for animal feed and

pet food, CGMP and preventive controls for human food, and foreign supplier

verification programs for food/feed products imported into the United States.

The proposed rules contain several common regulatory concepts, which FDA

intends to use to form the cornerstones of the new FSMA-mandated food

safety requirements.

The NGFA’s statements conveyed the following positions urging FDA to issue

final regulations that:

Provide a Clear Exemption for Low-Risk Storage and

Packing Activities of Raw Agricultural Commodities Other

than Fruits and Vegetables: The NGFA strongly supported

FDA’s revisions to its proposed rules that would clearly exempt

from its requirements facilities that are solely engaged in storing

raw agricultural commodities other than fruits and vegetables,

such as grain elevators.

However, the NGFA also stressed that FDA’s revised proposals

failed to provide a clear exemption for facilities engaged in

packing of raw agricultural commodities other than fruits and

vegetables that are intended for further distribution or processing.

The NGFA’s statement urged the agency’s final regulations to do

so, since packing activities often are inherent to the distribution

process associated with grains and oilseeds, and represent a

negligible risk to public health.

Establish Realistic and Practical CGMP Requirements for

Animal Feed and Pet Food: The NGFA urged FDA to make

many significant changes to its proposed rule, which would make

the final requirements realistic and practical for the full range and

scope of facilities that will need to comply with the regulation. In

addition, the NGFA stressed that unless such revisions are made,

the final regulation would add unnecessary requirements that

would cause industry to expend millions of dollars towards

complying with regulatory obligations that are not needed to

ensure the safety of animal feed and pet food.

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PAGE 5 NGFA NEWSLETTER

Allow Hazards to be Controlled in a Manner Commensurate

with Risk: The NGFA generally supported revisions to the

proposed rules that would provide for a preventive control

framework whereby facilities have the flexibility to make

appropriate decisions pertaining to the level of management

necessary to control a given hazard. However, the NGFA

recommended that FDA make several additional revisions to its

proposed requirements that would provide more flexibility to

facilities to control hazards in a manner that is effective and

efficient for their individual operations.

Provide Facilities and Importers Sufficient Flexibility when

Verifying the Safety of Food/Feed received from Foreign and

Domestic Suppliers: The NGFA urged FDA to not

overemphasize the role of supplier audits when issuing its final

regulations. The NGFA said requiring mandatory supplier audits

would be much too prescriptive, since audits only offer a

“snapshot” of a supplier’s food/feed safety performance at a given

time.

In addition, the NGFA emphasized that FDA’s regulations must

appropriately recognize the complex and comingled nature in

which raw agricultural commodities and other bulk ingredients

move through the supply chain. As such, the NGFA said FDA’s

final requirements pertaining to supplier programs must not

impose untenable traceability standards and appropriately reflect

the risk posed by the food, feed or raw agricultural commodity.

Contain Revised Requirements to Reduce Compliance

Costs: The NGFA’s statement emphasized that its own analysis

conducted to evaluate the economic impact of FDA’s proposed

regulations found the agency’s estimated cost of compliance to

be vastly underestimated.

FDA’s preliminary regulatory impact analysis for the proposed

rule estimated an annualized compliance cost of $93.45 million

for the entire animal feed and pet food industries, which equates

to an annual cost ranging from $13,200 to $18,300 per affected

facility. However, NGFA’s economic analysis, which focused

exclusively on the cost to animal feed facilities, resulted in an

estimated annualized cost of $430.33 million to $722.65 million,

or an annual cost per facility ranging from $56,385 to $127,715.

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PAGE 6 NGFA NEWSLETTER

The NGFA’s economic analysis also quantifiably demonstrated

how compliance costs for the proposed rule would be

dramatically reduced if the agency incorporated NGFA’s

recommendations into its final regulation.

Further, NGFA urged FDA to produce empirical evidence of the

benefits associated with the requirements before issuing a final

rule. NGFA stated its belief that such empirical evidence would

prove the costs of the proposed rule far exceed the anticipated

benefits. In addition, the NGFA said a more limited regulation

would accomplish FSMA’s goals more effectively, while imposing

a significantly lower economic burden upon the regulated

industry.

Stagger Compliance Dates for CGMP and Preventive Control

Requirements: The NGFA strongly recommended that FDA

provide a sufficient time period following publication of its final

regulations to allow affected facilities to come into compliance

with the rule’s requirement.

Further, since the CGMP regulation will establish new baseline

requirements for all affected animal feed and pet food facilities –

many of which that have not previously been subject to such

requirements – the NGFA stated it is necessary and appropriate

for FDA to provide facilities with adequate time to first come into

compliance with the CGMP regulation before being expected to

comply with the preventive controls regulation. As such, the

NGFA recommended that FDA provide facilities one additional

year after being required to comply with FDA’s final CGMP

requirements before being required to comply with the agency’s

final preventive controls regulation.

Timeline for Finalizing Regulations

FDA is under court order to issue both its final CGMP and preventive controls

rules for human food and animal feed/pet food by Aug. 30, and its final rule

for foreign supplier verification programs by Oct. 31. The NGFA believes it is

unlikely that the agency will publish its final rule much before the prescribed

deadlines.

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PAGE 7 NGFA NEWSLETTER

President Signs Appropriations,

Tax Extenders Bills

By Max Fisher, Director of Economics and Government Relations

Last week was busy for lawmakers with the president signing two bills into

law with several provisions important to agriculture – both from a policy and

tax perspective.

First, President Obama signed an appropriations bill on Dec. 16 that will fund

the Department of Homeland Security (DHS) through Feb. 27 and the rest of

the federal government through Sept. 30. Republican leaders chose to set a

shorter timeframe for DHS funding to allow the upcoming Republican-led

Congress to weigh in on the president’s immigration executive orders. Then

on Dec. 19, the President signed the tax extenders bill, which will reinstate

several tax benefits for the 2014 tax year.

The appropriations law also addresses the Environmental Protection

Agency’s contentious Waters of the United States proposed rule by ensuring

various farming practices and structures will be exempt from permitting

requirements, and by making it expressly understood that landowners can

undertake farming and conservation practices even if the U.S. Army Corps of

Engineers believes they could harm rivers and streams. In addition, the

appropriations law prohibits the U.S. Fish and Wildlife Service from listing two

species of sage grouse under the Endangered Species Act. Further, the law

instructs the secretary of agriculture to bring the country of origin labeling law

into compliance with international trade rules.

It also addresses the restart provision of the trucking hours of service rule.

Effective Dec. 16 and lasting at least until Sept. 30 or until a study on the

operational, safety, health and fatigue impacts of restart provisions has been

completed, truck drivers will not be required to include two consecutive nights

from 1 a.m. to 5 a.m. during their 34-hour mandatory weekly break.

Included in the 2014 tax extenders package is a 50 percent bonus

depreciation for new capital assets and Section 179 expensing, which allows

small business immediately to deduct up to $500,000 in equipment expense.

Further, the tax extenders package renewed the $1 per gallon blenders’ tax

credit for biodiesel and renewable diesel.

Finally, for years, NGFA has advocated for improvements to the U.S. inland

waterways system and ports. Also included in the tax extenders package is a

9-cent increase in the barge fuel tax along with federal match that NGFA and

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PAGE 8 NGFA NEWSLETTER

other industry members had advocated to help pay for waterway

infrastructure repairs and improvements.

In a recent statement, NGFA said, “the increase, which takes effect April 1,

2015, is expected to generate approximately $40 million in additional

revenues annually that will be deposited into the Inland Waterways Trust

Fund for the benefit of priority navigation project construction and major

rehabilitation.”

Major Developments in Ag Biotech Court

Cases Syngenta Lawsuit Against Bunge Dismissed; Mass Multi-state MIR162 Litigation Assigned to Kansas Court, 20 States Join

By Charlie Delacruz, Vice President, General Counsel and Secretary

Two separate major actions related to agricultural biotechnology were

significantly addressed this month in federal court.

Syngenta Seeds v. Bunge North America Inc.

On Dec. 12, the Syngenta Seeds and Bunge North America Inc. filed with the

federal district court in Iowa a stipulation that Syngenta had agreed to dismiss

all of its claims against Bunge, including specifically the sole claim that

remained following the court of appeals’ decision to remand that claim to the

lower court after denying all of Syngenta’s other claims.

Syngenta’s marketing of a strain of genetically modified corn seed – Agrisure

Viptera MIR162 – beginning in the fall of 2010 was the core of this case.

Because the variety was not approved in China, which maintained a zero-

tolerance on imports of corn from seed with unapproved genetically modified

traits, Bunge declined to accept corn grown from Viptera MIR162 seed.

Syngenta sued, alleging that Bunge breached obligations under the U.S.

Warehouse Act (USWA) and its warehouse licensing agreement with the

federal government. Syngenta also claimed false advertising by Bunge in

violation of the Lanham Act. The trial court ruled in favor of Bunge on all three

claims, and Syngenta appealed to the U.S. Court of Appeals for the Eighth

Circuit.

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PAGE 9 NGFA NEWSLETTER

In its prior decisions in August and October 2014, the court of appeals noted

that pursuant to China’s zero-tolerance policy, Chinese officials could prohibit

an entire shipment of corn from entering its market if the shipment contained

even traces of corn a genetically modified trait it had not approved for import.

The court also noted that in the course of Bunge’s business – including the

purchase, storage, processing and transport of agricultural products for

foreign markets – Bunge had purchase contracts with farmers containing

provisions authorizing Bunge to refuse products containing genetic

modifications for which import approval had not been obtained in foreign

export markets.

In its the claim under USWA, Syngenta argued that Bunge’s obligation under

that law to treat depositors of agricultural products in a fair and reasonable

manner entitled Syngenta to sue Bunge for damages related to its lost market

share, profits and goodwill that allegedly resulted from Bunge’s refusal to

accept Viptera corn. The appellate court agreed with the lower court in

rejecting Syngenta’s assertion, ruling that nothing in the law expressly or

implicitly authorized Syngenta’s cause of action in this case.

Similarly, the court of appeals upheld the lower court’s dismissal of

Syngenta’s claim that it was entitled to damages as a third-party beneficiary

of the licensing agreement between Bunge and the federal government

related to Bunge’s status as a federally licensed warehouse operator. The

court stated it found no indication in the licensing agreement of intent to

benefit a seed producer.

The trial court also had granted summary judgment in favor of Bunge on

Syngenta’s claim of false advertising under the Lanham Act. In its review of

the claim, the court of appeals noted that until very recently, there had been a

split among the different judicial circuits regarding the approach to assess

claims under the Lanham Act. The trial court decided this case under the

then-controlling approach in this circuit. However, the U.S. Supreme Court

subsequently resolved the split among the different circuits in an unrelated

decision, which established a “zone-of-interests” test and “proximate

causality” requirement for cases involving the Lanham Act. For this reason,

the appellate court remanded Syngenta’s claim under the Lanham Act for the

trial court to make an initial determination on Syngenta’s standing to bring the

claim under the new approach established by the Supreme Court.

Latest Development: Pursuant to the court of appeals’ order, the district

court on Dec. 6, had scheduled the remaining claim for trial to commence in

February 2016. However, when on Dec. 12 the parties filed with the court the

stipulation that Syngenta had agreed to dismiss with prejudice all remaining

claims and causes of action asserted in the matter – including the Lanham

Act claim – this litigation consequently concluded.

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PAGE 10 NGFA NEWSLETTER

Syngenta AG MIR162 Corn Litigation

On Dec. 11, the U.S. Judicial Panel on Multidistrict Litigation (MDL Panel)

ordered the consolidation and transfer of lawsuits filed nationwide against

Syngenta for its decision to commercialize corn seeds containing a genetically

modified trait, known as Agrisure Vipter MIR162, despite lacking import

approval by the Chinese government. The cases were transferred to Judge

John Lungstrum of the federal district court of Kansas for coordinated and

consolidated pretrial proceedings.

(Note: The MDL Panel is a judiciary authority created by an Act of Congress in

1968. The panel’s role is to 1) determine whether civil actions pending in

different federal districts involve one or more common questions of fact such

that the actions should be transferred to one federal district for coordinated or

consolidated pretrial proceedings; and 2) select the judge or judges and court

assigned to conduct such proceedings. The panel consists of seven sitting

federal judges, who are appointed by the Chief Justice of the U.S. Supreme

Court.)

Plaintiffs in the cases are corn growers and exporters who allegedly suffered

economic losses from the introduction of MIR162 into the marketplace and

China’s refusal to accept it. At the time of the Dec. 11 order, the MDL Panel

was notified of 168 potentially related actions in various districts. That list

subsequently has grown to more than 360 separate actions. Significantly, by

Dec. 18, it was widely reported that 20 separate states had joined the ongoing

litigation against Syngenta.

The massive consolidation thus far includes individual cases filed in various

federal courts across the country including courts in Alabama, Arkansas,

Georgia, Kansas, Kentucky, Illinois, Indiana, Iowa, Louisiana, Michigan,

Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Ohio, South

Carolina, South Dakota and Tennessee. The 20 states named in complaints

thus far joining the litigation against Syngenta are Alabama, Arkansas,

Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan,

Minnesota, Mississippi, Missouri, Montana, Nebraska, North Dakota,

Oklahoma, South Dakota, Tennessee and Wisconsin.

In its decision, the MDL Panel concluded that the actions involve common

questions of fact regarding Syngenta’s decision to commercialize MIR162

without Chinese approval to import corn with that trait. The panel also

determined that centralization would serve the convenience of the parties and

witnesses and promote the just and efficient conduct of the litigation. As with

past litigation involving allegedly improper dissemination of genetically

modified crops, the panel determined that centralization of the cases will

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PAGE 11 NGFA NEWSLETTER

eliminate duplicative discovery, avoid inconsistent pretrial rulings (particularly

on class certification) and conserve the resources of the parties, counsel and

the courts. In its decision, the panel specifically referred to how it had

similarly handled prior agricultural biotechnology-related litigation involving

Starlink corn in 2001, genetically modified rice in 2008 and genetically

modified wheat plant material in 2013.

Given the nature of the nationwide litigation, these steps by the MDL Panel

were expected, and no party opposed the consolidation and centralization of

these cases. However, the defendants – all from the different states – had

suggested alternative locations for the transfer to occur in Minnesota,

Missouri, Iowa or Illinois. In its decision, the MDL Panel noted that the district

court in Kansas was particularly appropriate and accessible, and that

Lungstrum was “well-versed” in the “nuances” of complex, multidistrict

litigation. The docket of cases ultimately to be addressed by Lungstrum is

expected to grow significantly.

NGFA, Agribusinesses Tell EPA More Work

is Needed to Justify NSPS Proposal

By Jess McCluer, Director of Safety and Regulatory Affairs

In comments submitted Dec. 22, NGFA and five other national

agribusinesses said the Environmental Protection Agency (EPA) needs to do

more work to justify its proposal concerning the New Source Performance

Standard (NSPS) for grain elevators.

The comments were in response to an EPA NSPS rulemaking proposal,

which would apply to facilities that commence construction, modification or

reconstruction after July 9, 2014.

Under EPA's NSPS for grain elevators, any commercial grain elevator

constructed after 1978 with a permanent storage capacity exceeding 2.5

million bushels is required to comply with stricter air permitting and emission

standards. The requirement also applies to any facility that has been

modified since 1978 to expand its permanent storage capacity to more than

2.5 million bushels. Also subject to the NSPS are grain storage elevators with

a permanent storage capacity exceeding 1 million bushels that are located at

wheat flour mills, wet or dry corn mills (manufacturing products for human

consumption), rice mills or soybean oil extraction plants. Grain-handling

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PAGE 12 NGFA NEWSLETTER

facilities located at feed mills, pet food manufacturing plants, cereal

manufacturers, breweries and livestock feedlots are not covered by the

current or proposed new NSPS.

According to its official notice, EPA is considering ways to "reduce the testing,

monitoring, recordkeeping, and reporting burden, while making the proposed

requirements less ambiguous and more straightforward for determining

compliance.” EPA also proposed a new subpart DDa, and various additions

that address changes in grain storage technology that have emerged since

1984, including so-called temporary storage facilities (TSF). The EPA last

comprehensively reviewed the NSPS for grain elevators in 1984, at a time

when the industry did not use TSFs.

In their comments, NGFA and other organizations commended the EPA for its

decision to rescind a Nov. 21, 2007, letter of interpretation under which it had

equated temporary storage structures with permanent storage facilities when

it determined whether elevators were subject to costly permitting

requirements under the Clean Air Act. EPA in its proposed rule notes that it

was rescinding that interpretation since it is "now aware that (temporary

storage structures) typically handle the grain less time throughout the year

than other types of permanent storage facilities, and may require different

treatment."

However, the organizations also said, “more work is needed by the EPA to

develop a sustainable proposal. Therefore, the EPA should withdraw the

present proposal, with the effect of removing July 9, 2014, as the dividing line

between ‘new’ and ‘existing’ facilities, and then repropose once it has

established an adequate record.”

In their comments, the organizations state:

EPA Lacks Authority: EPA lacks authority to retain a NSPS to

govern particulate matter emissions from future construction

events at grain elevators – i.e., from “affected facilities” on which

construction, modification or reconstruction commences after July

9, 2014. EPA’s proposal package lacks a rational basis for

concluding that such events present a significant risk to human

health and welfare on a national scale.

• Exorbitant Cost: Economic analysis estimates a

disproportionately large incremental cost for the proposed control

technologies and compliance assurance mechanisms relative to

the incremental amount of achievable particle emission reduction.

The organizations estimate the annual cost of particle emission

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PAGE 13 NGFA NEWSLETTER

reduction is $51,175 per ton and the cost per affected grain

elevator is $48,073 per year, which is much more expensive

when compared with EPA’s estimates. Thus, the organizations

state, “it is clear that the incremental costs, especially those

related to the treatment of TSFs are ‘exorbitant’ in relation to the

benefits.”

• Questionable Applicability: Although the Clean Air Act requires

EPA to conduct a comprehensive review of a given NSPS, EPA

has carried many applicability provisions from Subpart DD into

the proposed subpart DDa without questioning the merit. The

organizations therefore recommend the EPA: 1) exclude “grain

storage elevators, i.e., elevators at certain grain processing

plants; 2) raise the current applicability triggers from 1.0/2.5

million bushels of permanent storage capacity to at least 3.5/8.8

million bushels; and 3) continue to exclude TSFs from the

calculation of permanent storage.

• Compliance Burden: The proposal significantly would increase

the burden of performance testing, parameter monitoring,

notifications, reporting and recordkeeping. For example, in the

proposed rule, EPA estimates the capital cost of its proposed

requirement to install a Bag Leak Detection System (BLDS) to be

$24,000. However, in addition to the initial capital cost of a BLDS,

there would be substantial costs involved to install and perform

maintenance on a BLDS.

Lifting Cuba Trade Embargo Potentially

Opens $3 Billion for U.S. Agriculture

By Max Fisher, Director of Economics and Government Relations

While not all are pleased with the recent White House announcement that the

United States would seek to normalize relations with Cuba, the agriculture

industry is ripe to benefit from a potential increase in exports.

According to the U.S. Department of Agriculture (USDA), improved trade

relations could be worth $3 billion to the nation's farmers. The United States

now exports about $350 million a year in farm products, including rice, corn,

soybeans and frozen chicken parts. (A 2000 law relaxed restrictions on food

and medical exports.)

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PAGE 14 NGFA NEWSLETTER

In fact, as shown in the table below, USDA estimates Cuba has been one of

the larger import markets in calendar year 2014.

In addition, over the last 13 years, Cuba has imported significant amounts of

corn, wheat, rice, soybean meal, soybeans and soybean oil from various

suppliers. During this period, Cuba’s imports of corn trended upward;

meanwhile its imports of other grains, oilseeds and products have been

relatively steady.

As shown in the table on the following page, the U.S. share of Cuban imports

has declined substantially for all U.S. grains, oilseeds and products. It has

been several years since the last time the United States exported any rice,

soybean oil or wheat to Cuba. (Note: differences in import volumes may exist

between the tables because the table below is based on U.S. marketing

years, whereas the table above is based on calendar years.)

Cuba's Worldwide Import Rank by Volume in Calendar Year 2014

Calendar

Year Corn Rice Soybeans

Soybean

Meal

Soybean

Oil Wheat

2014 24 23 25 33 20 47

Source: Foreign Agricultural Service, Production, Supply and Distribution Online

Cuban Imports from All Destinations (1,000 Metric Tons)

Calendar

Year Corn Rice Soybeans

Soybean

Meal

Soybean

Oil Wheat

2002 292 538 104 115 53 1,054

2003 279 371 108 130 85 819

2004 469 639 160 195 95 727

2005 546 736 160 149 79 836

2006 501 594 96 167 91 751

2007 646 574 162 234 48 660

2008 811 652 118 268 85 902

2009 708 463 141 249 79 871

2010 736 468 126 265 88 765

2011 838 642 132 263 81 834

2012 746 469 134 280 85 773

2013 911 369 125 215 76 794

2014 900 450 150 250 85 754

Source: Foreign Agricultural Service, Production, Supply and Distribution Online

Return to contents December 23, 2014

PAGE 15 NGFA NEWSLETTER

New Senate Ag Committee Line-Up

Announced

In January, four newly elected Republican senators will join the Senate

Agriculture Committee while the Democratic line-up remains virtually

unchanged.

The newly elected Republican senators are: Iowa’s Joni Ernst, who replaces

retiring Democrat Tom Harkin; Ben Sasse, Nebraska; David Perdue, Georgia;

and Thom Tillis; North Carolina.

Ernst's appointment gives Iowa two seats on the committee, since Republican

Chuck Grassley will keep his place.

Republicans, who will have an 11-9 majority, will tackle issues such as

reauthorizing child nutrition programs and the Commodity Futures Trading

Commission.

While, both parties have finalized committee assignments, Republicans have not

formally announced chairmanships of committees or subcommittees. However,

Pat Roberts of Kansas is in line to be chairman of Agriculture, while Mississippi's

Thad Cochran, Agriculture's current ranking member, will take over the

chairmanship of Appropriations.

Cuban Imports from United States (1,000 Metric Tons)

U.S.

Marketing

Year Corn Rice Soybeans

Soybean

Meal

Soybean

Oil Wheat

2001/02 200 72 57 97 27 127

2002/03 287 119 95 182 65 101

2003/04 494 113 119 122 43 351

2004/05 438 100 129 74 25 452

2005/06 558 186 149 168 64 345

2006/07 566 60 182 169 14 263

2007/18 742 21 112 156 17 500

2008/19 712 0 124 137 20 339

2009/10 603 0 148 98 35 119

2010/11 427 0 121 9 5 28

2011/12 423 0 100 34 0 0

2012/13 285 0 91 148 0 0

2013/14 137 0 48 143 0 0

Source: Foreign Agricultural Service, Export Sales Query System

Return to contents December 23, 2014

PAGE 16 NGFA NEWSLETTER

The Agriculture Committee’s Democratic lineup virtually will stay the same

except for the loss of Harkin and John Walsh of Montana. The committee's

current chairwoman, Debbie Stabenow, Michigan, will become ranking

member.

Committee assignments are expected to be approved formally in January. For

additional information, see a full list of the Republican membership and the

Democratic membership on every Senate committee.

Save the Date: Elevator Design Conference

is July 28-30

By Jess McCluer, Director of Safety and Regulatory Affairs

NGFA and Grain Journal magazine again will co-sponsor an Elevator Design

Conference July 28-30 at the Sheraton Kansas City Crown Center in Kansas

City, Mo.

The day-and-a-half conference will feature sessions on:

• Finding good employees,

• Retrofitting design considerations,

• Permitting,

• Energy savings,

• Improving operations with automation,

• Safety and preventive maintenance,

• Workers compensation,

• Monitoring equipment,

• Increasing facility air and dust flow,

• Receiving and reclaiming systems,

• Contractor management, and

• Updates on combustible dust and hazard communication.

The conference, which is being planned by a steering committee consisting of

representatives from several NGFA committees and the Grain Elevator and

Processing Society, will feature 12 45-minute and one 1.5-hour sessions all day

July 29 and the morning of July 30.

There will be an opening reception the evening of July 28 and a trade show will

be open throughout.

Additional details and registration will be available in early 2015.