May 19, 2017
CapitalPress.com
7
Deere, Monsanto cancel planter deal, averting antitrust trial
Federal government
claimed transaction
would have reduced
competition in
high-speed planters
By MATEUSZ PERKOWSKI
Capital Press
One month before a feder-
al antitrust trial was to begin,
Monsanto Co. has ended the
litigation by halting the sale
of its high-speed planter sub-
sidiary to the John Deere Co.
The U.S. Department of
Justice filed a lawsuit last year
seeking to block the transac-
tion between Monsanto and
Deere, which the government
argued would impair competi-
tion in the high-speed planter
market.
In 2015, Monsanto agreed
to sell its Precision Planting
business for $190 million to
Deere, which now equips its
machinery with a rival high-
speed planting system.
The federal government
claimed the purchase would
eliminate Precision Planting
as a competitor for Deere, giv-
ing it control over 86 percent
of the market for high-speed
planters.
Precision Planting had
posed a threat to Deere be-
cause farmers could retrofit
their existing planters with its
technology rather than buying
new high-speed machinery,
according to DOJ’s antitrust
division.
Monsanto’s
subsidiary
also leased the technology to
Deere’s competitors in the ma-
chinery industry, the govern-
ment claimed.
According to Deere and
Monsanto, however, the DOJ’s
lawsuit was largely filed at
the behest of rival manufac-
turers CNH Industrial and
Kinze Manufacturing, which
feared the deal would actual-
ly increase competition in the
planter market.
Precision Planting’s tech-
nology would gain greater dis-
tribution through Deere’s retail
outlets and would be leased
to another firm, Ag Leader,
which would manufacture and
improve the planting equip-
ment, the defendants argued.
The
defendants
also
claimed the federal govern-
ment’s definition of “high-
speed planting systems” was
vague and ambiguous, as there
isn’t a distinct market for such
equipment.
The companies defended
themselves against the DOJ’s
lawsuit for eight months, most
recently participating in a final
conference before a trial that
was set to begin on June 5 in
Chicago.
At the pretrial conference,
held April 26, U.S. District
Judge Edmond Change ruled
on motions made by the par-
ties, admitting into evidence
redacted performance apprais-
als of several Deere executives
that defendants said contained
highly confidential informa-
tion.
A few days later, on May 1,
the federal government agreed
to drop the case because Mon-
santo had terminated its sale
agreement with Deere.
Monsanto said it’s still
planning to sell the Precision
Planting business, in which
other parties have expressed
an interest.
Deere said that it remains
committed to precision agri-
culture technology despite the
deal’s breakup, noting that if
the litigation had gone to tri-
al, “we believe it would have
been clear the challenge to
the transaction was based on
flawed assessments of the mar-
ketplace.”
It’s not unusual for de-
fendants in antitrust cases to
suddenly give up after initial-
ly fighting the federal govern-
ment’s accusations, said Peter
Carstensen, a law professor
specializing in agricultural
antitrust at the University of
Wisconsin.
Companies typically de-
fend such cases to get a sense
of the DOJ’s evidence and to
test the government’s will-
ingness to settle the lawsuit,
Carstensen said.
“Businesses reassess as
they learn more,” he said.
In this case, it’s also like-
ly that Monsanto didn’t want
the dispute over Precision
Planting to loom over its
planned merger with Bayer, a
German chemical company,
Carstensen said.
Critics have urged the DOJ
to block that deal, arguing the
combined seed-and-pesticide
company would have an out-
sized influence on global ag-
riculture.
Fossil sawmill earns state loans Idaho hop growers to
add 1,500 acres this year
to improve its juniper production
By SEAN ELLIS
Capital Press
By ERIC MORTENSON
Capital Press
A one-man sawmill in Fos-
sil, Ore., that specializes in
Western juniper products is
the recipient of two state busi-
ness loans intended to support
efforts to remove the intrusive
trees.
Kendall Derby, owner of
the In the Sticks sawmill, was
approved for loans totaling
$148,550, according to Busi-
ness Oregon, the state de-
partment that administers the
funding. Derby said the mon-
ey is meant to increase pro-
duction and jobs, and some
of it is forgivable if he meets
certain conditions.
Derby said he is buying a
more efficient electric saw to
cut juniper logs. He’ll also
use the money to buy logs and
will purchase a better skid-
steer loader to move logs and
lumber.
“Oh happy days for In
the Sticks,” Derby said in an
email. “The idea is that I can
prove the market and perfor-
mance of this operation in
order to get added future fi-
nancing from a bank or other
institution.”
The money comes from
a fund approved by the state
Legislature in 2015 and ad-
ministered by Business Ore-
Eric Mortenson/Capital Press File
Kendall Derby, owner of In the Sticks sawmill in Fossil, Ore., cuts a Western juniper log in this photo
from November 2014. Derby was approved for a state loan intended to support the state’s juniper
industry. He’ll buy an improved saw setup and other equipment.
gon. The intent is to jack up
juniper removal and lumber
production in Eastern Oregon.
Western junipers have taken
over large swaths of the land-
scape in that part of the state
and elsewhere in the West.
The species is often described
as a water “thief” because it
robs grasses and sage of mois-
ture. Studies have shown that
removing them rapidly makes
more water available for other
plants. Juniper removal has
emerged as a key component
of rangeland conservation
work, including improv-
ing habitat for greater sage
grouse.
Logging and milling ju-
niper, however, is not easy.
They are often difficult to
reach with logging trucks and
equipment, and an infrastruc-
ture of logging roads is lack-
ing. Derby said he had trouble
getting logs this past winter.
In addition, the logs often
are gnarled and difficult to
cut, compared to the straight
lines and size of pine or fir.
Derby and others have
found a niche market in urban
areas, however, where some
buyers seek out specialty lum-
ber products or ones seen as
environmentally sustainable.
Juniper is naturally rot-re-
sistant, and Derby sold posts
to an organic vineyard in the
Willamette Valley, for exam-
ple, that didn’t want posts that
had been treated with a chem-
ical preservative.
Derby said the market re-
mains strong for other juniper
products, which include land-
scaping timbers, beams for
retaining walls and posts to
support rows of wine grapes.
“It’s nutso,” he said. “I’m
turning away customers. It’s
like having a business and
keeping the doors locked.”
Ag groups laud new USDA trade undersecretary
An aerial view shows
the Export Grain
Terminal at the Port of
Longview, Wash., on
the Columbia River.
Ag groups are lauding
USDA Secretary
Sonny Perdue’s plan
to appoint a new un-
dersecretary for trade
and foreign agricultur-
al affairs.
By CAROL RYAN DUMAS
Capital Press
USDA Secretary Sonny
Purdue is winning quick sup-
port from most in the ag com-
munity with his creation of an
undersecretary for trade and
foreign agricultural affairs.
The move is part of his
reorganization of the agency,
which is also garnering acco-
lades from ag groups.
Many groups issued state-
ments lauding the move, in-
cluding the American Farm
Bureau Federation, which
said members of Congress
made it clear they were eager
for Purdue to create the po-
sition as required under the
2014 Farm Bill.
It’s “good news for farm-
ers and ranchers and assures
that exports will receive dai-
ly attention at USDA,” said
Zippy Duvall, Farm Bureau
president.
The American Soybean
Association also registered
strong support, noting the
U.S. exports well over half
of the soybeans produced
domestically.
“That success abroad
leads to success here at
home, returning billions to
the economy and supporting
more than a million jobs,”
said ASA President Ron
Moore.
With President Donald
Trump’s focus on trade, “It
will be imperative to have
high-level officials within
the administration who un-
derstand the intricacies of
global agriculture markets,”
he said.
Total ag exports in 2016
were nearly $130 billion and
accounted for 20 percent of
the value of U.S. agricultural
production. Every $1 billion
in U.S. ag exports supports
about 8,000 U.S. jobs, ac-
Courtesy of Port of
Longview
cording to USDA.
The National Association
of Wheat Growers said the
new position emphasizes the
mutual importance of agri-
culture and trade to the U.S.
economy.
“Our producers rely on
trade access throughout the
world. It’s vital that who-
ever fills this new position
ensures that American wheat
growers are made a priority
in trade negotiations,” said
NAWG President David
Schemm.
The North American
Meat Institute said USDA’s
trade roles have been un-
changed since the last reor-
ganization in 1978 and its
trade structure is outdated.
“Over the last 40 years,
the challenges that U.S.
agriculture faces in glob-
al markets have increased
and markedly changed from
primarily tariff barriers to
phytosanitary and other non-
trade barriers,” said NAMI
President and CEO Barry
Carpenter.
“USDA is now positioned
to appoint an undersecretary
with extensive experience in
international trade negotia-
tion and policy issues who
can advocate for the impor-
tance of science-based agri-
cultural trade,” he said.
Establishing an undersec-
retary for trade was one of
National Cattlemen’s Beef
Association’s top priorities
this year.
“This
position
will
play a vital role in leading
USDA’s efforts to capitalize
on foreign demand for U.S.
agricultural products, and
we look forward to work-
ing with the undersecretary
to break down barriers and
expand our ability to meet
the growing demand for
U.S. beef in key markets like
Asia,” said NCBA President
Craig Uden.
National Corn Growers
Association said trade is more
important than ever to farm-
ers’ incomes given the cur-
rent farm economy and the
announcement signals to farm
country that the administra-
tion is listening.
“Overseas markets repre-
sent 73 percent of the world’s
purchasing power, 87 percent
of economic growth and 95
percent of the world’s cus-
tomers. Now is the time for
U.S. agriculture to fully cap-
italize on the long-term, in-
creased global demand for our
products around the world,”
said NCGA President Wesley
Spurlock.
WILDER, Idaho — Idaho
hop growers will add 1,500
acres this year, and there
is an outside shot the state
could move into the No. 2
spot in the U.S. for hop pro-
duction.
Hop acres in Idaho, the
nation’s No. 3 hop produc-
ing state behind Washington
and Oregon, have increased
by large amounts every year
since 2012, when they to-
taled 2,423.
They increased to 3,376
acres in 2013 and then 3,743
in 2014, 4,863 in 2015 and
5,648 in 2016.
Idaho growers told Capi-
tal Press they planted about
1,500 new acres this year,
which would push the total
number of hop acres in the
state past 7,000.
With Idaho typically en-
joying higher hop yields than
Oregon, it’s possible Idaho
could move into the No. 2
spot for total production this
year, said southwestern Ida-
ho grower Mike Gooding.
“There is an outside
chance Idaho may move into
the No. 2 spot, ahead of Or-
egon,” he said. “That would
be something that nobody
ever dreamed of 10 years
ago.”
According to USDA’s
National Agricultural Statis-
tics Service, 7,765 acres of
hops were harvested in Ore-
gon last year. NASS will re-
lease state-level hop acreage
estimates next month.
Since 2014, average hop
yields in Idaho have ranged
from 50 to 300 pounds per
acre higher than in Oregon.
“I think over time, that’s
certainly a possibility,” Hop
Growers of America Ad-
ministrator Ann George said
about Idaho’s chances of
passing Oregon in hop pro-
duction.
Idaho’s string of large
hop acreage increases is
expected to come to an end
next year because hop pro-
duction is catching up with
Sean Ellis/Capital Press
Hops are strung for processing
last September in southwestern
Idaho. Idaho hop growers es-
timate that an additional 1,500
acres of hops were planted in
the state this year.
market demand, industry
leaders told Capital Press.
“I think most everybody
is done after this year put-
ting more hops in,” Gooding
said. “It’s definitely going to
slow down next year.”
The huge jumps in craft
beer production drove the
Idaho acreage increases and
while craft beer produc-
tion is still healthy, growth
slowed to single-digit per-
centages in 2016 after six
straight years of double-digit
growth.
Southwestern Idaho hop
grower Brock Obendorf,
who added a couple hundred
new acres this year, believes
the whole industry will slow
down for a few years to see
what the craft industry does.
“I think (the acreage in-
creases are) going to come to
a screeching halt because the
market is going to drop off,”
said Obendorf, chairman of
the Idaho Hop Commission.
“I think there are too many
acres.”
Growth in the craft beer
industry is still healthy, “it’s
just not at the meteoric pace
that it was before,” George
said. “I would certainly see
things starting to slow down.
Brewers are telling us to put
the brakes on.”
George said early esti-
mates, as reported at the
International Hop Growers’
Convention in April, are
that 5,000 acres of hops will
be added around the nation
this year, and about 4,200
of those acres will be in the
Northwest.
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