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Bayer/BASF Lose $265 Million in Peach Orchard Damage Case

February 19, 2020

This AgPro article about peach orchard damage from dicamba is interesting for a couple of reasons:

Peach Orchard in Bloom

First, the jury apparently not only ignored the defense argument that the peach orchard damage was not related to the dicamba, but also decided to award very large punitive damages: $250 million in punitive damages for a claim of $15 million in actual damages.

Second, the plaintiff's attorney alleges that the multi-district litigation (MDL) model has been expanded and will affect future cases. (The orchard was located in Cape Girardeau, Missouri.)

Bayer and BASF are going to appeal the verdict, yet they also claim that because peaches are a perennial plant, this verdict is unique: They argue that the peach orchard claim is fundamentally dissimilar to the numerous claims for soybean crop damages, because soybeans are an annual plant, not a perennial.

That "perennial vs annual" argument could make sense for the actual damages, but we aren't sure if it also applies to the large punitive damages imposed?

The complete AgPro article is short and worth a read, but here are some excerpts from it:

"Bader Farms, the plaintiff, sued in civil court for damages that occurred to peach trees starting in 2015 when Xtend cotton seed was launched. Bader says his peach orchards are dying as a direct result of dicamba damage from drift or volatilization."

“While Mr. Bader is claiming losses in his orchards, the evidence fundamentally showed nothing related to Xtend seed or herbicide,” says Chris Hohn, partner at Thompson Colburn law firm and attorney for Monsanto. “What is happening at Bader farms is not dicamba, it’s armillaria root rot.”

The Bader Farms versus Monsanto and BASF trial comes before a multi-district litigation (MDL) case involving alleged dicamba damage to a large number of farms including soybeans, vegetables and fruit trees. “This will certainly have an effect on that MDL and future cases,” Randles adds.

“Bader is unique,” Hohn, who also is one of Bayer’s attorneys for the MDL, says. “[This will have] no impact on soybean cases because they are fundamentally different. Peach trees are perennial, and soybeans are annual. Soybean cases are held to one year [of damage] versus the claims by Bader that were vastly different [from 2015-2018].”

This case began in 2015, and Monsanto was acquired by Bayer in September, 2016, for $66 billion. This is why both Bayer and Monsanto are mentioned in the article. We aren't sure how much liability, if any, that Monsanto has in this case.

We will try to keep track of this case, to see if the appeal results in a different outcome.



Local Land Values Appear Strong

February 6, 2020

Land Auction In Bird City, Kansas

Yesterday, we attended a land auction in Bird City, Kansas. The sale of 640 acres was mostly high quality dryland acreage, from two separate farms.

The sale seemed well attended: we counted about 75 people in the room. There was a free lunch served in the middle of the bidding, but we don't know if the food affected turnout. In addition, there were bidders on the phone lines and the internet.

Tracts 1, 2, and 3 (totaling 400 acres) were located about 5 miles northeast of Bird City, as the ag airplane flies. Tracts 2 and 3 sold as one unit.

Tracts 4 and 5 (240 acres) were maybe 11 miles southeast of Bird City. There was 52 acres of grass land scattered throughout the tracts, leaving 588 acres of farm ground.

The two sellers were Edna Roesener and the Query Family. Both sites consisted of adjacent parcels. The dryland corn yields were 111 bushels/acre, and wheat yields of 52 bushels/acre.

You can view a sale flyer, which details the land auction, which was held by Farm and Ranch Realty, Inc., by clicking here.

The first phase of the bidding went quickly, and after the lunch break, the parcels (1, 2&3, 4, 5, respectively) sold for $2,150, $1,900, $1,950, and $1,350 in the third phase of bidding.

Those numbers compute to a weighted average price of $1,906 per acre.

We agree with the sentiment that these prices represented stable to slightly bullish pricing, when compared to sales in the last year.

We have previously reported on land sales which were held August, 2019; March, 2019; April, 2018; and February, 2018.

Please click those date links to read about the previous sales.



USMCA Trade Agreement Widely Praised

January 25, 2020

American Ag Welcomes USA-Mexico-Canada Trade Agreement

In a time of political upheaval for the Trump administration, the Senate passed the USMCA Trade Agreement with broad bipartisan support with a vote of 89-10. The breadth of the acclaim for the deal is exceptional, as reported by this AgPro article.

As this is written, President Trump is in the middle of an impeachment trial, and his administration suffered criticism in August when it granted ethanol waivers to large oil companies, seemingly at the expense of corn growers. Here's a Reuters article about the controversial refinery (RFS) waivers.

Given this turbulent political environment, it is notable that the overwhelming acclaim of the USMCA trade deal comes from all segments of the agricultural industry, including grain, cattle, pork, poultry, ethanol, fertilizer, and equipment dealers.

The AgPro article quotes Agriculture Secretary Perdue as saying, “We’ve long waited for this day and now USMCA will finally head to the President’s desk. The passage of USMCA is great news for America’s farmers and ranchers. With Congressional consideration now complete, our farmers and ranchers are eager to see the President sign this legislation and begin reaping the benefits of this critical agreement." (emphasis is ours). There are many more quotes from the various trade groups in the article.

As every farmer knows, grain prices are low, and have been for several years. If the new USMCA agreement raises those prices substantially, it will help considerably in increasing farmers' profitability. When and if that happens, every segment of agriculture will benefit. We assume that President Trump will sign the bill into law very quickly, and we join in the hope that it will raise commodity prices across the board.



Cover Your Acres 2020

January 16, 2020

CYA 2020 Conference Oberlin Gateway

We attended the second day of the 17th annual 2020 Cover Your Acres conference, which is sponsored by KSU and held annually in the Oberlin, KS, Gateway Center. Because of scheduling conflicts, were only able to attend three of the seminars, but we read the program book on the other sessions. The dates were January 14-15, 2020.

As this is published, the online meeting presentations are not yet available, but we will update this article with links as soon as possible. Here is a link to the program schedule, showing topics and speakers. As usual, some of the programs were very good.

Jeanne Falk-Jones gave an excellent overview of the available methods of controlling two significant weeds: Tumble Windmill grass and Palmer Amaranth.

It is difficult to summarize Jeanne's presentation here, but she noted that early chemical treatment using herbicides with varying modes of action is critical. Additionally, the occasional tillage for windmill grass might be useful.

Aaron Harries, Vice President of Research, Kansas Wheat, gave an excellent presentation on the state of wheat research today. He said, "We will learn more about wheat in the next decade than we have in the last 10,000 years." He then proceeded to convince us that his statement was true.

As reported here and here, it took 200 researchers 13 years to decode the extraordinarily complex wheat genome. But in January, 2017, they announced success and published the results.This announcement has significant implications for future wheat varieties.

Surprisingly, the red wheat genome is five times more complex than the human wheat genome. It is one of the most genetically complex organisms on planet Earth. Wheat's genome has 16 billion DNA letters compared to 3 billion in the human genome. Soybeans and corn are much simpler organisms.

Harries said that the research on the DNA project was aided by the 2 cent per bushel wheat checkoff funding which wheat producers pay.

Since 1989, the planted acres of wheat in Kansas has dropped by half, from 12.5 million acres to 6.5 million acres in 2019. However, since yields in Kansas have gone up dramatically in the last four years, from 38 to 49 bushels per acre average, total wheat production has remained stable. Wheat acres are being replaced by soybeans and corn in Kansas as those crops move eastward.

Because the genome is now known, Harries predicts that within three years, using supercomputers (because regular computers don't have the necessary power), the "stupidly complex" wheat genome will be managed to create "virtual DNA" variety breeding.

This means that a computer-generated solution, coupled with CRISPR/cas9 based genetic modifications, will allow researchers to design a wheat seed that has whatever characteristics that you want, and then quickly introduce that new variety to the agricultural world. The development time of new wheat varieties could be dramatically reduced.

The implications are powerful: wheat varieties that have both high protein and high yield might be possible. New disease-reistant varieties might be available more rapidly than the diseases can evolve, solving some of the wheat rust susceptibility issues now present.

Durum wheat for western Kansas could be grown under contract to pasta makers in Denver or Kansas City, solving availability issues where durums are now grown, while creating new, local markets.

The inherent disease resistance of goat grass could be crossed with wheat varieties to give wheat much better disease tolerance.

The wheat research facility in Manhattan, Kansas, is a state-of-the-art facility, and worth a visit, Harries believes. It was built with farmers' money, and he extended an invitation to take a tour.

Finally, although we didn't attend the presentation, the essay in the program by Mark Wood and Jordan Steele, discussed the financial challenges of farming in NW Kansas. The information in the program guide seems both salient and offers practical advice for managing cash flow.

If you are looking for guidance on managing the finances of your farming operation, we think this article is worth a read.


Happy Holidays!

December 14, 2019

Thank you for your business!

We appreciate your continued trust in us.

We hope that each of you has a great holiday season, and a safe and prosperous 2020!



NAAA Annual Meeting

November 22, 2019

Last week, we attended the National Agricultural Aviation Expo, the national ag association's annual meeting. It was held in Orlando, Florida.

The meeting is the largest aerial application gathering in the world, and hosts many suppliers, including airframe manufacturers, as well as many educational opportunities.

Show Floor, Thrush 510P Aircraft

We were reminded that aerial application began in the southeast of the United States, on cotton production, in 1921. This means that we are less than two years away from the 100th anniversary of the aerial application industry.

We attended an optional meeting concerning a new, emergent segment of the industry: Remotely Piloted Aerial Application Systems (RPAAS). Today, RPAAS is small group which is trying to advance this new technology, and make it mainstream. Additionally, they want to help the FAA devise regulations for these aerial systems which will not have humans on board while applying pesticides.

Most of the current RPAAS systems are UAVs--multi-rotor drones--but there is at least one fixed wing version, the Pyka. It's worth a look: click here.

RPAAS faces several technical hurdles, which are being solved fairly quickly, but also significant regulatory ones. Aerial application in the US is controlled by FAR 137, and that regulatory framework has not been modified to allow remotely piloted operations for aircraft over 55 pounds gross weight. Like most Federal agencies, the FAA is not known for rapid adoption of new regulations, so this is still a major hurdle for RPAAS technology.

Other subjects which we attended included spray pattern analysis, turbine engine maintenance, new pesticides which are not yet labeled, and old pesticides, including chlorpyrifos, which are approaching their required 15 year re-certification process with the EPA.

We also heard speakers concerning global agricultural market trends, including the changing diet preferences of the millennial generation, which is trending toward organic and plant based--not animal-based--products.

Finally, we heard from a firm which is deploying new aerial imaging technology for crops. The new imaging systems have very high resolution: 0.2 mm per pixel, which is high enough to actually see insects on the leaves, and those insects are are discovered by, and highlighted in the photos, by AI technology.

We left convinced that even though there are clearly challenges ahead, the aerial application industry enters its second century with a promising future, at least for those willing to embrace change.



Fighting Fires With the Thrush

November 10, 2019

Blackhawk Parked, Thrush Fighting Fires

On Saturday, November 9, 2019, the opening day of pheasant season, plumes of white smoke began to fill the skies around Saint Francis, Kansas. Initially, it looked like proscribed burns, but as the number of fires increased, it became obvious that something else was going on. The number of fires was reported, unofficially, as 21 in total.

As the fires began, the wind was light, but within an hour, it was gusting to 25 knots from the south-southwest, and fire personnel from multiple areas began arriving, rumored to be 14 jurisdictions in all.

Grace Flying Service quickly launched their Thrush ag airplane and applied 2,000 gallons of water, using the emergency dump gate, over 5 or 6 flights. Rick Rogers, a local pilot, served as spotter and reconnaissance, and directed the Thrush's loads. John "Dusty" Dowd also flew another Thrush aircraft up from Syracuse, Kansas, to aid in the battle.

The Kansas Forest Service became involved, and requested a Grumman S2F Tracker air tanker, which arrived later in the day--see photos. The tanker was an interesting, if older, aircraft: It has two Wright 1820 radial engines, and a gross weight of 29,000 pounds. Surprisingly, the Grumman Tracker only carried 800 gallons of water. For comparison, our single engine turboprop Thrush will haul 500 gallons of water maximum and 400 gallons is a comfortable working load in the windy, turbulent conditions of fire fighting.

Fires in Cheyenne County, Grumman Tracker Air Tanker

From the air, there was smoke in all directions, and it looked like the entire county was on fire. If the winds had been stronger, or lasted longer, it could have been a much worse situation.

The next day, Sunday, two Blackhawk helicopters arrived, along with a transport load of Jet A to fuel them. The Blackhawks were planning to use flexible buckets, lowered into local ponds, to apply to the remaining fire hot-spots.

We have no estimates of damage, but in addition to extensive pasture and CRP damage, at least some standing corn was also destroyed. Many road signs are laying on the ground, their supporting posts burn away, and there is damage to a lot of fence posts. It is too early to know if the trees that were affected will suffer permanent damage.

The cause of the fires was a truck which was spewing sparks over many miles, and which ignited the numerous fires. The theory is plausible because all of the fires were adjacent to--and downwind of--the highway from Haigler, NE, to Wheeler, Kansas, and then south for a few miles.



Noxious Weed Control

September 17, 2019

Fall Thistle Postcard

We are gearing up for the annual Musk and Canada Thistle fall applications. Our reminder postcard has been sent, and will arrive soon. Here is what it says:

Postcard Text Follows:

Fall is the best time to treat pasture thistles.

We need your order and maps soon, so that we can plan the application schedule. Remember, the window of opportunity can be very short in the fall, and the small acreages often require combining customer loads.

Our deadline for taking thistle orders is Monday, Oct 14, 2019.

Musk and bull thistle can be treated until the ground freezes, but Canada thistle needs sprayed before a killing frost.

We think the best chemical choice is GrazonNext HL, which is a pre-mix of Milestone and 2,4-D.

The Cheyenne County Weed Department cost-shares 25% of the chemical cost on approved applications, and we will handle the paperwork for you. Contact us or the Weed Department if you have questions.



Farm Bill Meeting

September 1, 2019

Farm Bill 2018

We attended a meeting on the new Farm Bill on August 27 at the Goodland Elks Lodge. There was a big crowd, more than 200 people, and the seating was nearly all utilized.

The new 2018 Farm Bill replaces 2014 Farm Bill. Mykel Taylor, KSU Associate Professor, explained that the Farm Bill spends 77% of the budgeted money on nutrition (SNAP), and 7% on conservation. The remaining 16% is what farmers actually consider, with 7% going to commodities and 9% to crop insurance.

The crop insurance portion is mostly unchanged per requests from farmers to their legislators, so the bulk of the meeting is about the 7% which affects commodities. Before you read any further, we should note that KSU has a comprehensive website called agmanager.info, and you might want to go the Farm Bill portion of that site by clicking here.

The choices for farmers are generally the same as last time: PLC versus ARC-CO. The PLC choice is based upon prices only, while ARC-CO is based upon total revenue: prices and the yields in the county where the land is located. The good news here is that while the 2014 Farm Bill required producers to choose for the entire five year period, the choice now is only valid until 2021, at which time a farmer can choose between PLC or ARC-CO every year.

The first sign-up date is September 3, 2019, and the deadline for the October, 2020, payment is March 15, 2020. The recommendations were to wait until January or February, in order to get all harvest data for 2019 available, then sign up well before the March rush.

This Farm Bill has a payment cap of $125,000 and an AGI limit of $900,000. Also, the FSA loans now max out at $600,000, up from $300,000.

The presenters all believed that visiting your FSA office in person would be helpful: the agmanager.info has a lot of information, but every farm has specific differences, and it is a very complicated decision: Specific county yields vary by region, different crops have different moving averages of previous prices, and the Supplemental Coverage Option (SCO) is only available in the PLC program.

Other speakers included Monte Vandeveer, KSU Extension Ag Economist; Jeanne Falk Jones, KSU Multi-County specialist; and Robin Reid, KSU Extension Associate. The speakers were all informative, but the discussion is too detailed for us to chronicle here.

We think that you should check out the agmanager.info website,then visit your FSA office(s) early next year. You might want to take your crystal ball in order to determine future commodity pricing, too.



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