Grains

Wheat Technology Races to Catch Soybeans and Corn

While corn and soybean yields reach new heights, wheat continues to fall behind the curve with fewer investments and no biotechnology.  For wheat to be more competitive in the market, breeders might need to make a few changes. "Hybrid wheat development is the next step," says Carl Griffey, Virginia Tech professor of crop genetics and breeding. By combining two inbreds breeders can meld desirable traits of each parent to create stronger offspring. Griffey says there are additional reasons to consider hybrid wheat: Hybrids tend to have better performance stability. Less variability year to year and with weather. When you cross two inbreds it combines alleles from both parents advantage in resistance to disease, drought, stresses (abiotic and biotic). Corn has long used a hybridization system, which has helped advance yields several fold in the past several decades. As breeders search for ways to improve wheat yields this could be one way to make the crop more favorable for producers. However it’s a long road to perfection and breeders will need to overcome certain challenges associated with hybridization. Namely finding a way to stabilize the hybridization system, improve cross pollination, optimize breeding programs, create heterotic gene pools, find more information on alleles and find ways to reduce yield drag from wild phenotypes, Griffey adds. For wheat growers, unfavorable commodity prices means they need to find yield advantages soon to justify planting the crop. The future of wheat technology could be bright if hybridization is realized.
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DuPont Collaborates with Sumitomo Chemical for Seed Treatments

Sumitomo Chemical Company, parent company of Valent, recently entered an agreement with DuPont Crop Protection, a business unit of DowDuPont Agriculture Division, for the development, registration and commercialization of seed treatment technology globally. The pair entered this agreement to speed up development and commercialization of seed-applied technology products. It combines the conventional chemical and biological pipeline of Sumitomo with seed technology, development and commercialization ability of DuPont’s. The companies say working together will allow them to identify and evaluate technology earlier to make commercialization decisions and investments sooner. “We typically share products with other companies two to four years before commercialization,” says Trey Soud, Valent director of row crop marketing. “This brings them together earlier and the end goal is commercializing products that might not have been found without early collaboration.” The companies worked together in the past on a corn fungicide called Intego. This collaboration formalizes and grants the companies access to each other’s technology earlier in the development process than in the past. “Two to three years would be a reasonable timeline because we can look at new products earlier and jointly develop them earlier,” says Mick Messman, DuPont director of global seed applied technologyu. For products not yet registered we would need to wait for that registration, which would add time, he adds. “Once regulatory happens we can launch products at a larger scale,” Messman says. Companies will focus on the North American cropping region, but maintain the potential to market globally.
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NPPC Announces Support for Farmers for Free Trade

Today, the National Pork Producers Council (NPPC), the global voice for the U.S. pork industry and leader on public-policy issues for America's 60,000 pork producers, announced its support for Farmers for Free Trade. Farmers for Free Trade is a bipartisan campaign co-chaired by former Senators Max Baucus and Richard Lugar that is working to rebuild support for trade at the grassroots level. The National Pork Producers Council joins the American Farm Bureau Federation and other agriculture trade and commodity groups that are partnering with Farmers for Free Trade to strengthen support for trade in rural communities. "NPPC is proud to get behind this bipartisan effort to build a sustainable network of support for trade among our nation's farmers and ranchers," said NPPC President Ken Maschhoff, a pork producer from Carlyle, Ill. "Exports are vital to the financial livelihoods of pork producers. We need help getting the word out more broadly in rural America that trade generates jobs and prosperity. "We look forward to working with our friends in many other sectors of American agriculture as well as with Farmers for Free Trade to get out the message that rural America benefits from trade." "The support of the National Pork Producers Council is a huge boost for our bipartisan effort," said Senator Baucus. "Not only because they'll help us reach pork producers across the country, but also because they've long led the fight for smart trade policies that help American farmers. The Pork Producers understand that rebuilding bipartisan support for trade on Capitol Hill requires first reestablishing consensus at home among the American people. With the support of the Pork Producers we're going to continue to organize, educate and mobilize farmers whose livelihoods depend on trade." "Momentum behind this effort continues to grow," said Senator Lugar. "With the support of groups like the Pork Producers and the Farm Bureau, we are going to ramp up our efforts at the state and district level. This effort is more needed than ever in order to help alleviate the decline in farm incomes by opening new export markets and safeguarding access to the markets we have." Farmers for Free Trade is currently working at the grassroots level to organize and educate farmers about the importance of trade, including through work at state commodity conventions, through state proclamations, by reaching farmers through social media, and by identifying local spokespeople, among other efforts. Senators Baucus and Lugar outlined some of the key policy priorities that will help rebuild bipartisan support for trade in an op-ed earlier this year.
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Wheat Crop in Black Sea Region off to Strong Start

Favorable weather expected at the start of the Russian winter will help planted wheat, according to Commodity Weather Group. Currently, no major cold snaps are seen in southern Russia and Ukraine, while snow cover is projected to be adequate, insulating plants against potential damage from any frosts, said David Streit, a forecaster at the group. “We have a fairly snowy winter for the region, which should help to provide protection as we go deeper into the winter,” he said by email. “Winterkill risks are limited for the beginning of the winter.” Average monthly temperatures in December are expected to be normal in southern areas and 1 degree Celsius (1.8 degrees Fahrenheit) above average in some central regions, the government’s weather center said on its website. Rain and snow are also predicted to be near normal in most of the areas where winter-wheat crops are now shifting to dormancy. Most Russian winter wheat is planted from mid-August through mid-October, according to the U.S. Department of Agriculture. Ideal weather conditions helped Russia reach a record harvest this year and indications of good weather for next year may see the country retain its position as top wheat exporter. Plantings for next year’s harvest are seen near a record high, with crop conditions mostly better than a year ago, according to estimates by the Institute for Agriculture Market Studies, or IKAR. Moscow-based consultant SovEcon also expects Russia to collect its second-largest wheat crop of 76.7 million metric tons, assuming that weather is similar to recent years.
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Scrapping NAFTA Bad for Agriculture

Deliberations on the nearly 24 year-old free trade agreement between Canada, Mexico and the U.S. have gotten more contentious and ending the deal could spell trouble for agriculture domestically. The North American Free Trade Agreement (NAFTA) was discussed during a panel conversation hosted by the World Trade Center - Kansas City and the Kansas City Chamber of Commerce. NAFTA 2.0 has been through several different negotiation meetings since the Trump administration went into office. The three way trade deal represents more than $1 trillion a year exchanged between the partner countries. The health in that trade relationship is important, says Paul Lalonde, partner and trade specialist with the law firm Dentons. Lalonde is based in Toronto, Canada and he says the dialogue is changing with the U.S.' s neighbor to the north. " The possibility of the end of NAFTA is receiving more attention," Lalonde says. " We' re seeing a lot more serious study going on about ending NAFTA from analysts, foreign exchange traders, financial institutions and so on." The studies have indicated that ending NAFTA would have downward pressure on the growth prospects of Canada and it would impact the strength of the dollar. These impacts might not be as hash as the global recession in 2008 or the collapses in oil prices, but it would take time to settle the economy. The U.S. could likely see similar market shocks. " If NAFTA does die the only winners will be our off-shore competitors, particularly the European Union, China, Japan and countries with large economies in transition like Brazil," Lalonde says. Mexico has been thought to be one of the biggest winners from NAFTA, particularly by the Trump administration. Alfonso Navarro-Bernachi, head consul for the Consulate of Mexico in Kansas City, points out the trade deficit amount between the U.S. and Mexico isn' t that large when looking at China. From January to September 2017 the U.S. has a trade deficit of $277.3 billion with China, compared to $53.1 billion with Mexico according to data from the U.S. Census Bureau. The U.S. currently has a $12.4 billion deficit with Canada. Thus far for the year the U.S. is at a trade deficit of $586.5 billion when looking at all trade partners internationally. China accounts for 46.7% of the trade deficit, while Mexico is at 9% and Canada is only 2%. Navarro-Bernachi adds that while the entire U.S. has a trade deficit with Mexico there are states who trade a large amount of agriculture goods to his country and actually have surpluses. " For instance in the case of Mexico and Kansas, Mexico has a trade deficit with Kansas." The story is similar for Arkansas, Iowa, Louisiana, Nebraska, North Dakota, South Dakota, Virginia and Washington which all have an agriculture commodity ranking in the top 10 exported items and have a trade surplus to Mexico. Trying to solve trade deficit issue is something Raj Bhala, Associate Dean for International and Comparative Law at the University of Kansas and partner with Dentons, believes will only stall negotiations. The U.S. had already spent eight years in Trans-Pacific Partnership (TPP) negotiations with Canada and Mexico. If the U.S. had not backed out of TPP much of the updates to NAFTA around ecommerce and regulations could have been handled with that agreement. Bhala says agriculture and other industries dependent on trade should pay attention to what Canada and Mexico do with other free trade agreements. Both countries remained in TPP and it is near finalization, opening up major free trade markets in Asia for Canada and Mexico. "They (Canada and Mexico) are increasingly looking east and west, instead of north and south," Bhala says. There is the potential that Canada and Mexico just use TPP as a means to do their own NAFTA updates, potentially leaving the U.S. out of the mix should the Trump administration decide to walk away from NAFTA.
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USDA: Equal Corn, Equal Soybean Acres in 2018

In 2017, farmers and the market thought soybean acres would overtake corn acres, but King Corn reigned supreme. Roughly 90.4 million acres of corn and a record high 90.2 million soybean acres were planted in 2017. For 2018, the USDA’s Office of the Chief Economist is expecting soybean acres to top 91 million acres, creating a new record. Corn acres are expected increase slightly to 91 million. In 2017, wheat plantings fell to their lowest in roughly a century, and that number is expected to decline moving into the new year with an estimated 45 million acres. Coming off what is appearing to be a record corn yield, the USDA is pegging corn yields for 2018 to average 173.5 bushels per acre. On the other hand, soybean yields are also relatively conservative, expected to come in at 48.4 bushels per acre. “It’s going to be two years in a row of neck-and-neck acres, but I thought with the price of corn being so low and below cost of production for so many that we would maybe even see less corn acres,” said Naomi Blohm, senior market advisor at Stewart-Peterson. Over the next decade, the USDA is expecting soybeans to be the top crop, forecasting soybean acres will grow 1 million acres in four years. Yield expectations are also being raised. Average corn yields are believed to top 191.5 bushels to the acre by 2027 and soybeans will climb to 53 bushels per acre. The USDA’s final near and long-term projections will be released in its February outlook report.
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Owning Corn Could Pay Off As World Stocks Fall 10 Percent

Commodity prices have been low and trading sideways, and 2017 wasn’t a great year for most farmers. Last month, the USDA Economic Research Service (ERS) released data that show the downturn in the ag economy has bottomed, and farm income could be on the rise. There’s been a lot of discussion amongst farmers if we can compare our current situation to that of the 1980s. As far as supply, Bill Biedermann, co-founder of Allendale, Inc., says its similar, but the policies in place are vastly different. “Back in the 80s, the government was paying us to store grain, so we had huge warehouses full with an incentive to keep it there,” he said. “Today we have more of a free market system.” The fifth round of renegotiations for the North American Trade Agreement (NAFTA) wrapped up earlier this month in Mexico City. As trade officials from the U.S., Canada, and Mexico are preparing for the sixth round of talks in Montreal in late January, several ag groups are hoping some positive headway is made for U.S. agriculture. Biedermann is hoping these negations, as well as negotiations with countries in the Pacific go well, because of the record supplies of corn, wheat, and rice along with record demand. He said the world’s corn stocks are down 20 million tons, or 10 percent, from 2016. That’s roughly 800 million bushels. “If we have just a 2 percent loss in production around the world, that would be a billion bushel loss—that’s half of our carryover,” he said. “It would change the dynamics of the corn market.”
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Net Farm Income Inches Up 3% to $63.2 Billion

Farmers hoping for any sign of an economic bright spot for 2017 got a modest one yesterday. Net farm income is expected to inch up a slight 3% over 2016 and reach $63.2 billion this year, according to the U.S. Department of Agriculture-Economic Research Service (USDA-ERS) November Farm Income Report. The small improvement is the first farmers have seen in the last several years but is still less than half the amount farmers saw in 2013, when net farm income reached a record $129 billion. Carrie Litkowski, a senior economist for USDA-ERS, says the 2017 gains primarily came as the result of strong export demand and higher prices in the livestock sector for beef, dairy, pork and poultry. The USDA cites a couple of examples: cotton and cattle prices have helped farmers in the Southern Plains, while dairy farmers have seen strong performance in the Northeast. At the other end of the spectrum, low prices for corn and soybeans continue to hamper farmers’ earnings in the Northern Plains and the Midwest. Litkowski says the depressed prices are a result of oversupply, lower sales and lower government payouts. Despite the slight economic improvement for agriculture this year, median income from farming alone is expected to be a negative $1,093 in 2017. However, USDA says the median income for farm households at $68,000 is higher than the U.S. overall, thanks to off-farm employment. Here are additional summary notes from the USDA November report: Direct Government farm program payments—those made “directly” by the U.S. Government to farmers and ranchers such as Price Loss Coverage, Agricultural Risk Coverage, and conservation program payments—are forecast to decline $1.8 billion (13.8 percent) in 2017 to $11.2 billion. Federal Crop Insurance Corporation indemnities—payments made by private insurance companies to farm operators for their insured crop losses—are forecast to rise in 2017 by $1.1 billion, or 25.1 percent, to $5.4 billion. Total production expenses are forecast to increase $5.3 billion (1.5 percent) in 2017 to $355.8 billion after falling year-over-year in both 2015 and 2016. Inflation-adjusted total production expenses are forecast to be relatively unchanged from 2016. In nominal terms, interest expenses are forecast up $2.1 billion (12.3 percent) and hired labor expenses up $1.1 billion (4.1 percent). Expenses for fuels and oils are forecast up by $1.7 billion (13.8 percent) after 2 years of decline. In contrast, expenses for fertilizer are forecast to drop $1.0 billion (4.7 percent) and feed to drop $1.9 billion (3.4 percent).
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Why Record Soybean Acres in 2018 Matter on Your Farm

USDA's Office of the Chief Economist is forecasting soybeans to reach a record of 91 million acres in 2018—equal to that of their rotation partner, corn at 91 million acres. Before switching acres to soybeans consider market implications. "The past few years the market has been essentially asking for soybeans," says Matt Bennett, farmer and owner of Bennett Consulting in Illinois. "The price ratio for beans to corn has been robust. For fall prices we're looking at 2.75:1 which definitely suggests beans are more profitable than corn." Because of this, it's not surprising that some farmers might plant more soybeans than corn, and might even consider planting soybeans after soybeans. In many areas, soybean yields have been stellar for the past few years and even in areas with yield risk, insurance guarantees could help farmers gain confidence in the crop. "If we had $10.06 for insurance guarantee for beans you could guarantee break even at worst even if yields are bad—insurance might dictate what producers do a little, especially in high risk areas," Bennett says. Farmers could plant more acres than last year in general, too, with a predicted 253.7 million acres dedicated to one of eight major row crops. That's up 1.4 million acres over last year and could mean farmers are looking for alternatives to corn. "Sorghum producers out west have indicated we could see a jump," Bennett says. "People are going to look for other opportunities." Growers experienced a 30 to 40 cent basis improvement in sorghum across the sorghum belt this past month, according to Tim Lust, CEO of National Sorghum Producers. "We certainly saw that push in price at harvest that's not traditional [and] I think it will signal a good message as we go into 2018 in terms of our need for acres." Corn acres are forecasted to be down by 600,000 acres next year, and three million acres from 2016. According the USDA's estimates the crop will likely continue this downward trend over the next 10 years. However, just because some areas are avoiding corn, doesn't mean it's the wisest idea everywhere, Bennett advises. If you live in Iowa, Nebraska or any state with a strong ethanol or cattle feeding market corn could still be the better cash crop. No matter what you choose, be strategic with marketing. "If the price on beans is what is prompting you to plant more then you had better be doing something to lock in that price," Bennett says. "Right now if you look at Nov. 2018 beans they're at $10.06 and just about everyone can make money on that & protect that money on the table."
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Pipelines and Farmers Collide

Soil is life, dirt is death, and the vast distance between takes a lifetime to cross. Mike Kelley is staring into the chasm and believes part of his farmland will suffer stunted yields for the rest of his life. He says the delicate soil balance, a rich, black elixir sweetened by nature’s alchemy, is lost to a pipeline. Pipelines and agriculture are a contentious pair, with a growing number of farmers raising concerns over soil health, drainage issues and responses from oil and gas companies. Mike Kelley grows corn and soybeans in Illinois on some of the most productive ground on the planet—fine drummer soil that consistently churns out 200 bu. corn and 60 bu. soybeans. In 2015, like it or not, Kelley knew the Enbridge Southern Access Extension Pipeline was going to cross McLean County in the central part of the state. Many of his farming neighbors didn’t want the pipeline to come through, and some dug in their heels to eminent domain, but most acquiesced and took an Enbridge payment. “I understand the public benefit of going through private land and that can mean imposing on individual. I recognize that,” Kelley says. However, he makes clear that principal and application are not necessarily bedfellows. The pipeline came through two farms leased by Kelley, on no-tilled ground dating back several decades. Kelley, chairman of the McClean County Soil Board, believed his crop production would suffer a sustained degree of yield drag, but pinned his hopes for minimal loss on construction conditions. With an extremely wet spring soaking central Illinois, Kelley grew increasingly anxious over the prospect of heavy machinery operating on spongy soil. His fears came full circle in June when, according to Kelley, bulldozers began pushing soil aside on ground that was literally too wet for farming fieldwork. In an emailed statement, Ryan Duffy, communications strategist for Enbridge, acknowledged Kelley raised concerns over wet conditions but says crop production won’t be affected: “A third-party certified professional soil scientist and agronomist visited the pipeline construction area, evaluated the soils and concluded that the conditions did not degrade or otherwise compromise the soils for future crop productivity. As required by the Agricultural Impact Mitigation Agreement between IEPC and the Illinois Department of Agriculture, subsequent restoration was completed in 2016 and future crop productivity should not be impaired.” (Enbridge declined Farm Journal interview requests regarding Kelley’s claims.) “There was actually water on top of the ground and they were rolling with dozers. It was so disappointing to see, knowing this was about the pipeline’s time and budget. Any reasonable person would have held off from starting dozer work,” Kelley contends. Kelley argued with Enbridge personnel at the site, protesting the mix of machinery and wet ground: “Their own question-and-answer pamphlets said their work conditions would parallel ag work conditions, but I couldn’t have driven across the field in a four-wheel-drive pickup or my sprayer without getting stuck.” Down a 120'-wide right of way, bulldozers peeled off 16" of topsoil and piled it to the side. Enbridge next brought in excavators to dig a 6'-wide trench. After the 48" pipe was set and finished, the ground was filled in. To alleviate compaction issues due to equipment and semi-trailer traffic, Enbridge came in with deep rippers. However, deep ripping generally tears compacted soil into chunks. When soil particles are squeezed together and the air pushed away, steel doesn’t solve compaction. Last, Enbridge came back with bulldozers to push the mounds of black topsoil back in place, followed by one last tillage pass. “Their equipment operators did a good job attempting to keep the clay down and topsoil above, but there is only so much humanly possible. We now have wet spots and general roughness spread across 18 acres,” Kelley describes. Soil chemistry might be Kelley’s biggest long-term concern. Manipulation of wet soil is a breach of soil health 101, particularly on 20-plus years of no-till ground. In 2016, Kelley’s corn dropped 30 bu. per acre on the pipeline-related acreage. “Enbridge paid for my crop damage, but the yield drag will go on and on. I’m 51 and plan to farm 20 more years or so, but I don’t think I’ll ever see that farm area return to its former production. The wet soil should have been left alone because that was the right thing to do.” Almost 900 highway miles to the southeast in Brooks County, Ga., Randy Dowdy faces a permanent yield drag across 40-plus acres of record-producing farmland (171.7 bu. soybeans and 521 bu. corn). Dowdy signed an easement in 2015, giving Spectra Energy right of way across a mile of his land for the Sabal Trail natural gas pipeline. The project section on Dowdy’s land began after fall harvest and was slated for completion the first week of 2017, but when hard winter storms arrived the third week of January, construction was ongoing and the ground was relatively unprotected. Dowdy lost more than 40 acres of topsoil and decades of yield potential. (In addition, sediment deposition spilled across 100 acres of wetlands.) Dowdy points the finger at Sabal Trail and a series of alleged regulatory violations. When Dowdy signed the Sabal Trail easement, the agreement included a stipulation: Sabal Trail would return all land to its pre-construction condition, both in fertility and deposition (topsoil segregated from subsoil). Dowdy says the topsoil disaster was a direct result of Sabal Trail negligence in following the Georgia Soil & Water Commission’s Green Book (a manual for erosion and sediment control) regulations. On March 11, 2017, responding to an irrigation line leak in the right of way, Dowdy found evidence of jumbled soil deposition and says it is a clear violation of Sabal Trail’s Federal Energy Regulatory Commission permit and Sabal’s written agreement with him at the purchase of the easement. According to Dowdy, an excavator revealed 2" of topsoil, 6" of hard clay and 10" to 15" of various mixtures before digging into the expected bright orange clay. Dowdy believes he’s facing a lifetime of loss on the affected ground due to the negligence of Sabal Trail. By hauling in several thousand loads of dirt, Dowdy has replaced the highest-yielding soybean soil in agriculture history with a forced substitute. (Sabal Trail/Enbridge declined Farm Journal interview requests regarding Dowdy’s claims.) In 2016, when the Dakota Access Pipeline (DAPL) arrived in northwest Iowa, it was slated to run across 13 miles of O’Brien County, including 2 miles of David Richter’s land. Rather than wade into an expensive court battle, Richter signed a pipeline contract. The DAPL right of way technically touched 45 acres of Richter’s ground, but in reality affected 320 acres of his operation. The DAPL cut passed through the lower part of Richter’s property. “Right away, I asked them to move the line just a couple hundred yards north and onto more of a hill so my tile wouldn’t be affected, but it wasn’t happening,” he says. During construction, Richter was assured his tile system would remain fully functional. Things changed when the crews cleaned up and left, according to Richter. By fall 2016, he could see wet spots forming close to the pipeline, but he hoped the ground would settle by spring. As winter snows melted, the wet spots progressed from warning signs to farming danger. Richter was less than two months from planting and was clueless as to the extent of damage under his pipeline ground. On March 1, with water backed up onto adjacent land beyond the right of way, a distressed Richter picked up the phone and called DAPL. He says he went through days of phone calls, dealing with four farm agents before a crew of nine DAPL workers arrived in mid-April and began digging. At one of the wet spots, Richter took one look and immediately could see the drainage problem. In a 200' stretch where the pipeline ran beneath a road, the tile had been covered in PVC pipe. “They assured me they’d drilled holes in the PVC, but they had no clue how many holes a piece of tile needs to drain properly,” Richter explains. With planting dates bearing down, Richter didn’t know when DAPL would return to make the repairs. He hired a contractor to repair the drainage issues and sent DAPL two bills totaling $13,000. DAPL agreed to pay the smaller $3,000 bill, but refused to cover the larger $10,000 bill. (DAPL responded to Farm Journal inquiries with a pdf stating Richter’s $10,000-bill was declined after he hired an unapproved private contractor. DAPL declined to answer specific questions related to Richter’s claims.) “I was disgusted. I had planting dates getting close and had called them repeatedly for help,” he says. “It’s difficult to describe the incredible pain of the whole procedure. Even when I finally started planting, I had to switch from corn to beans three times waiting for fields to dry.” When the repairs were finished, Richter says he was left with 100 acres of mud and a dip in his ground that was previously as flat as a table. (Richter suspects the dip in his land is from compacted clay.) Into July 2017, he was still dealing with water on top of his ground: “I’ve talked to so many people in this frustrating mess since I originally called March 1. They admit there’s a low spot out there but they won’t fix it. There’s basically a hole in my ground and I’m supposed to pay?” Richter’s DAPL agreement requires coverage for 100% of yield loss the first year, 80% the second year and 60% the third year. “I’m 58 years old and I won’t see normal yields for the rest of my life,” he says. “My kids will take over and maybe the land will yield normal then, but who can say?” Richter, Dowdy and Kelley share common uncertainties, frustrations and regrets, and they have warnings for fellow farmers and landowners. “If they need to get through your land, they’ll tickle your ear. Once the line is installed, they don’t come back to fix problems. Even if you’ve got it in writing, you’ll still have to go to the legal system for enforcement and spend thousands of dollars,” Dowdy says. “The only leverage you’ve got is prior to the pipeline.” “You’ve got to get advice from somebody with soil experience, not dirt experience. Don’t let the company put time limits on corrective action and don’t sign off on anything,” Kelley adds. “Remember, farmers look down and see soil, but the pipeline company just sees dirt.”
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