A five-minute summary of AAI, regulation, and industry activities for members of the largest state agribusiness association in the nation.
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REMINDER:
The main office in Des Moines is closed to visitors. AAI staff is still available to help you with your member needs via phone or email. Phones are still being answered during normal business hours. If you'd like to reach a specific member of the staff please visit our
staff listing
online.
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Grain Warehouses Affected By Iowa Supreme Court Grain Lien Ruling
Grain warehouse operators face a new challenge in how they interact with lenders who provide notice of lien on customer assets.
A ruling last Friday by the Iowa Supreme Court upheld most aspects of a district court ruling from 2019. The bank was allowed to claim it was unaware that the costs of storage and drying would be deducted from the sale of the grain, and it was clarified that the bank has priority lien and therefore grain elevators do not have the ability to withhold costs associated with keeping grain in salable condition without prior notification to (i.e. permission from) the lender.
The court did change the lower court’s ruling on the look back period. The Iowa supreme court clarified the two year look back period begins at the date of sale.
The Agribusiness Association of Iowa is strongly recommending grain elevators start sending notices of the set off of drying and storage costs from sale proceeds to any lender or other secured party that provides notice of a security interest to the elevator. This will prevent lenders and other secured creditors from claiming that they did not have actual knowledge of the set-offs. If such lenders continue to allow the set-offs and do not object after having actual knowledge, such action would create an implied waiver of their lien rights in favor of the elevator.
It is also recommended that this be done for EVERY contract and EVERY notice of lien. While this does not provide an automatic lien right for the elevator, and does not automatically override a lender’s position of first lien, it does create a more favorable argument should issues arise.
Next Steps
The court explicitly stated they “defer to the legislature whether to give grain elevators lien rights for storage and drying costs superior to a lender’s prior perfected security interest in crops and their proceeds.” As has been stated before, the solution to this issue is legislation that provides a position of first lien for grain warehouses to collect storage and conditioning costs for grain. This a top priority of AAI as we continue to work with the legislature leading up to elections and the 2021 session.
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Grain Committee Discusses Valero, Grain Lien Ruling
The Grain Committee met on Wednesday with two primary topics of discussion on the agenda – the implications of the Supreme Court ruling on the grain lien issue, and information about how businesses should proceed in response to force majeure claims by ethanol producer Valero.
Grain Lien Ruling
The committee received a review of the MidwestOne v Heartland court case as well as analysis of the Iowa Supreme Court ruling. The supreme court ruling relied on Uniform Commercial Code (UCC) rules which gives the lender first lien position. The court did send the case back to the district court to fix the error surrounding the two year statute of limitations, which should have been applied from the date of sale. The committee continues to recommend legislation to resolve the grain lien issue so that grain warehouses get paid for the service they provide by keeping grain in salable condition.
As noted elsewhere in this issue of Take Five, grain warehouses will need to make changes to how they interact with lenders and other secured parties that provide notice of a security interest to the elevator.
Valero Breach of Contract
On the ethanol front, a number of grain warehouses have received notice from Valero that they will not be honoring their contracts as written. The committee was brought up to date on a meeting held by AAI with grain committee members and the association’s legal counsel to discuss the issue with the National Grain and Feed Association (NGFA). The representative from NGFA provided insight on how those entities affected by a breach of contract should proceed with arbitration claims. Because the NGFA rules are stated in the contracts and because Valero is an NGFA member, the breach of contract will be handled under NGFA arbitration rules. It was also noted by NGFA that every affected party will need to file arbitration documents with NGFA. Additionally, the process is likely to take 9 months or longer to complete, but every claimant can choose the remedy that best suits their situation.
The grain committee recommended that AAI assist affected members and nonmembers in filing arbitration documents with NGFA and support the affected parties by taking a lead role in a consolidated arbitration claim. The recommendation will be addresses by the AAI Board of Directors at their next meeting.
Additional information will be shared with members as the process moves forward.
The Grain Committee is chaired by Bill Buekema, State Line Cooperative, and co-chaired by Rob Cogdill, Cogdill Farm Supply.
A summary of the Iowa Supreme Court opinion can be found here online
here.
Take Part In A Committee
Members are encouraged and welcome to join committees so they can take an active role in the association by providing their voice to topics that concern their businesses. See a full list of committees online -
click here
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Governor's Emergency Declaration Reminder
On April 2, Gov. Reynolds signed a proclamation continuing the State Public Health Emergency Declaration through April 30.
Please note that new emergency declarations are being made frequently and often include updates to previous declarations. AAI will continue to provide updated information as we receive it.
Important agribusiness issues already covered in the Governor's
March 19th Declaration and which will remain in effect until the end of the Emergency Declaration:
- Weight exemptions similar to proclamations related to harvest
- 90,000 lbs. maximum or 12.5% increase per axle allowed on highways but not Iowa interstates
- Hours of Service waivers
- Iowa Code § 321.449 pertaining to hours of service of motor carriers and drivers of commercial motor vehicles
- Property Tax Payment Extensions with no additional fees or penalties
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Pesticide Applicator Self-Service Site Now Available From IDALS
Pesticide applicators and licensed businesses have a new way to apply for their certification, pay fees, and check on their status. The Iowa Department of Agriculture and Land Stewardship (IDALS) has launched a self-service portal for pesticide applicators meant to streamline the certification process.
First time users will need to register to use the online site. Once registered, users can check on their status, pay fees, and retrieve certification numbers. The site also works for licensed businesses and private applicators.
Additionally, for new applicators who will be working for a licensed business under supervision of a certified applicator and need to take the private applicator test as the work around during the COVID-19 pandemic, registration and payment of fees can be done directly from the portal. A successfully completed test immediately provides a certified applicator number.
Instructions on First Time User registration instructions -
click here
Pesticide Applicator Self-Service site (login page for those already registered) -
click here
The self-service portal uses each pesticide applicator’s unique certification number to match their application and payment to their training and testing history.
To apply for a new or renew an existing pesticide applicator license, individuals will use their certification number to log-in to the self-service portal. The licensee can submit their application, test results and payment online.
Once in-person testing resumes, proctored test locations will use each applicator’s unique certification number when uploading the test results to the self-service portal. The portal will link the user’s training and testing information to the application and payment records stored in the online system.
Once the application, payment, training and testing information are received, the licenses and certifications will be processed and sent directly to the applicant.
By moving the process online, individual pesticide applicators can access their records anytime by logging into the self-service portal. The system also has a public search function that empowers customers and employers to verify that their pesticide applicators are licensed to work in the state of Iowa.
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Dicamba Training Available Online
Online training sessions have been approved for the state of Iowa. Info can be found at
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AAI Calendar of Meetings & Events
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Note:
Until further notice, all committee and board meetings will be held via conference call.
Conference call access information will be listed in calendar invitations.
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AAI Board of Directors Meeting
July 9
10:00 AM
Golf Tournament #1
July 21
Fox Ridge Golf Course
Dike, Iowa
(tentative)
Golf Tournament #2
July 22
Emerald Hills Golf Course
Arnolds Park, Iowa
(tentative)
Iowa CCA Summer Workshop
August 6
ISU Field Extension Education Lab, Ames
(details coming soon)
Golf Tournament #3
August 10
The Legacy Golf Club
Norwalk, Iowa
(tentative)
Golf Tournament #4
September 17
TBA Location
(tentative)
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VIEW ONLINE
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- The crop progress report is back along with changes due to the pandemic
- ISU economic impact report shows Iowa ag losing billions
- USDA Announces food assistance program to help farmers and consumers
- Paycheck protection dollars have run out
Watch episodes from the past week anytime online!
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On April 10, the Occupational Safety and Health Administration (OSHA) issued an enforcement guidance with details on how employers should record occupational illnesses, specifically cases of the COVID-19.
Under OSHA’s record keeping requirements, COVID-19 is a recordable illness, and employers are responsible for recording cases of COVID-19, if: (1) the case is a confirmed case of COVID-19, as defined by Centers for Disease Control and Prevention (CDC);[1] (2) the case is work-related as defined by 29 CFR § 1904.5;[2] and (3) the case involves one or more of the general recording criteria set forth in 29 CFR § 1904.7.[3] On March 11, the World Health Organization (WHO) declared COVID-19 a global pandemic, and the extent of transmission is a rapidly evolving issue.
In areas where there is ongoing community transmission, employers other than those in the healthcare industry, emergency response organizations (e.g., emergency medical, firefighting, and law enforcement services), and correctional institutions may have difficulty making determinations about whether workers who contracted COVID-19 did so due to exposures at work. In light of those difficulties, OSHA is exercising its enforcement discretion in order to provide certainty to the regulated community.
Employers of workers in the healthcare industry, emergency response organizations (e.g., emergency medical, firefighting, and law enforcement services), and correctional institutions must continue to make work-relatedness determinations pursuant to 29 CFR § 1904. Until further notice, however, OSHA will not enforce 29 CFR § 1904 to require other employers to make the same work-relatedness determinations, except where:
- There is objective evidence that a COVID-19 case may be work-related. This could include, for example, a number of cases developing among workers who work closely together without an alternative explanation; and
- The evidence was reasonably available to the employer. For purposes of this memorandum, examples of reasonably available evidence include information given to the employer by employees, as well as information that an employer learns regarding its employees’ health and safety in the ordinary course of managing its business and employees.
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On April 21, 2020, the United States Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (USACE)
published their long-awaited rule clarifying the definition of the term, “Waters of the United States” (WOTUS), effective June 22, 2020. In a move with tremendous regulatory significance, this rulemaking—formally known as the Navigable Waters Protection Rule—significantly narrows the number of waters potentially regulated as WOTUS under the Clean Water Act (CWA).
The Navigable Waters Protection Rule (the “2020 Rule”) significantly streamlines and narrows the definition of WOTUS. It jettisons the controversial and difficult-to-apply “significant nexus” test in favor of less subjective criteria that more closely align with the plurality decision in Rapanos.
Under the 2020 Rule, to be codified at 33 C.F.R. § 328.3, there are four categories of WOTUS:
- Territorial seas and traditional navigable waters;
- Tributaries of jurisdictional waters;
- Lakes, ponds, and impoundments that contribute surface water flow to a jurisdictional water in a typical year; and
- Wetlands adjacent to non-wetland jurisdictional waters.
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Iowa Secretary of Agriculture Mike Naig announced today that the Iowa Department of Agriculture and Land Stewardship has issued its first round of hemp licenses and seed permits for the 2020 growing season. To date, 11 hemp licenses and 38 seed permits specific to hemp have been approved since it became legal to possess hemp in Iowa on April 8, 2020. License applications for outdoor hemp crops will be accepted until May 15. There is no deadline to apply for a license for indoor hemp crops.
“The introduction of hemp brings Iowa farmers another cash crop option for the 2020 growing season,” says Secretary Naig. “As with any new market, there are lessons to learn and challenges to overcome, but we continue to hear from farmers who are excited for this new opportunity.”
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Farmers who grow many different types of crops and raise livestock will receive direct payments from the United States Department of Agriculture through $16 billion of CARES Act relief money.
USDA has announced it will also spend $3 billion to purchase fruits and vegetables, dairy products, meat and other food, which it will then distribute to those in need through food banks and other community groups.
But in announcing these relief efforts, Secretary of Agriculture Sonny Perdue was blunt about the fact that there’s nothing directly for ethanol.
“Frankly, at this point there’s just not enough money to go around,” he told reporters in a telephone press conference. “The demand from all of the sectors was even more than we could accommodate.”
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A contagious strain of bird flu flying through and wreaking havoc in South Carolina has caught the attention of Iowa agriculture officials.
The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service confirmed on April 9 the presence of highly pathogenic H7N3 avian influenza in a commercial turkey flock in Chesterfield County, SC.
That was the first confirmed case of highly pathogenic avian influenza in commercial poultry in the United States since 2017. The strain apparently mutated from a low pathogenic strain that had been found in poultry in that area recently.
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WATCH THE AGRIBUSINESS REPORT EACH DAY
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