8
CapitalPress.com
Friday, April 22, 2022
More research needed to fuel carbon markets
bon from the atmosphere or
avoided carbon emissions,”
he said during a Farm Foun-
Carbon sequestration is a dation virtual seminar.
The lack of consistent,
hot topic in agriculture, and
while farmers have great uniform guidelines across
potential for cashing in on MRV systems can result in
LWVFLHQWL¿FJDSVFRQWLQXHWR high search costs incurred by
hinder participation in car- credit buyers to evaluate the
bon markets, an economist suitability of credits gener-
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says.
Sequestration is certi- programs, he said.
¿HGWRYHULI\FODLPVIRUFDU-
“One way to address this
bon credits through the Mea- particular challenge is to
suring, Reporting, Verifying standardize the guidelines
(MRV) systems, said Ale- across MRV systems, and
jandro Plastina, associate that would reduce the search
professor of economics and cost for credit buyers,” he
extension economist at Iowa said.
State University.
Another challenge is that a
“Having robust MRV sys- low degree of independence
tems is key to convincing EHWZHHQYHUL¿HUVDQGFDUERQ
buyers that the implemented programs could undermine
changes in agricultural prac- EX\HUV¶ WUXVW LQ FHUWL¿FDWLRQ
tices actually removed car- he said.
By CAROL RYAN DUMAS
Capital Press
“However, independent
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might be cost-prohibitive
for small-scale projects. So
aggregation of carbon proj-
ects before submission for
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problem or this challenge,
along with increased com-
petition among independent
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Another issue is the
long-term target dates of
corporations committing to
carbon neutrality, many of
which are a decade or more
in the future. That’s gener-
ating a disconnect between
long-term plans and short-
and medium-term demand
for carbon credits, creating
uncertainty for farmers, he
said.
“So more information
on short- and medium-term
plans to purchase carbon
credits by these corpora-
tions would address this
challenge,” he said.
Changing farming prac-
tices is costly for farm-
ers, so the industry needs
to understand the costs and
prices that need to be paid
for farmers to enroll in car-
bon programs, he said.
Another challenge is cur-
rent technology leaves a lot
of uncertainty in the pro-
jected volume of carbon
credits that can be produced
by a farmer, he said.
“This can generate sub-
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the projected and the actual
volumes for which farmers
are compensated, depend-
ing on weather, timeliness
of the practices, weed pres-
sure at the point in time and
so on,” he said.
Improving
modeling
capabilities and reducing
uncertainties in estimation
is critical to develop a mar-
ket for agricultural carbon,
he said.
Another science gap is
related to measuring not
the projected volume but
the actual volume of car-
bon removed or avoided on
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and costly, he said.
“So more research is
QHHGHG WR ¿QG WKH DSSURSUL-
ate mix of technologies to
measure the actual removal
RUDYRLGDQFHUDWHVDWGL൵HUHQW
project scales — the farm, the
region and so on,” he said.
The third science gap is
that it is currently impossi-
ble to compare carbon cred-
its generated by one change in
practices on one farm across
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FDUERQSURJUDPVXVHGL൵HUHQW
models to estimate changes
in carbon and greenhouse gas
emissions, he said.
“The industry needs to
generate
research-based
guidelines on how to compare
the potential to generate car-
bon credits across programs,”
he said.
The industry also needs
increased transparency on
how carbon programs will
address carbon removal to
understand the impact of
potential adoption both for
farmers and buyers, he said.
“Finally, we need to
develop tools to manage
production, price and legal
aspects for participating farm-
ers and other players in the
system,” he said.
High costs +LJKO\FRQWDJLRXVDYLDQÀXFRQ¿UPHGLQ,GDKR
expected to
stress dairy
margins
By CAROL RYAN DUMAS
Capital Press
By CAROL RYAN DUMAS
Capital Press
USDA is forecasting Class III milk
prices will average $24.05 per hundred-
weight for 2022, but costs are rising and
that leaves the outlook for farmers’ prof-
itability in limbo.
On average, milk prices are covering
costs, but labor, energy, inputs, every-
thing on the cost side is putting pressure
on margins, said Ben Laine, a dairy econ-
omist with Rabobank.
“It’s going to be an environment of
active risk management and just oper-
ational strategic management” for the
foreseeable future, he said during the lat-
est “DairyLiveStream” podcast.
Conversations with dairy producers
are all about managing risks and the high
cost of everything — feed, fuel, fertilizer,
labor and parts, said Sam Miller, man-
aging director of agricultural banking at
BMO Harris Bank.
Milk prices are covering costs for
now. The question is how long does “for
now” last, he said.
The good news is dairies had some
good years with milk prices and govern-
ment payments related to the pandemic
and trade mitigation, he said.
“That really helped liquidity and
helped strengthen balance sheets,” he
said.
Working capital positions and balance
sheet positions are the strongest they’ve
been in a number of years, he said.
While milk revenue is currently cov-
ering costs, the risk ahead is on both the
income side and the expense side, he
said.
“That margin is going to compress at
some point in time. Either milk prices
will come down or the cost structure
will continue to increase,” he said.
Petroleum prices will eventually
come down, bringing down fertilizer
and feed costs. But other costs such as
labor, parts and equipment aren’t likely
to come down, he said.
“So keeping an eye on margins, man-
aging price risk is as critical as it’s ever
been and frankly more challenging when
you’ve got the volatility on both sides of
the equation,” he said.
Feed costs per hundredweight of milk
were up 12% in 2021 year over year. Fuel
and utilities were up more than 20%.
Labor costs increased and total operat-
ing costs were up 6%, said Chris Wolf,
an agricultural economist at Cornell
University.
“That was prior to the recent spikes
that we’ve seen in some of these things
related to the international events,” he
said.
Income over feed costs is pretty decent
right now. But the increases in other
expenses mean those margins aren’t as
healthy as they would appear, he said.
Rising interest rates and international
events such as natural disasters and man-
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other sources of uncertainty, he said.
Miller said it could end up being a
pretty good year with milk prices, espe-
cially if producers pre-purchased inputs.
But at some point, milk prices are
going to correct. And a correction in
expenses won’t happen until after milk
prices correct. Producers should prepare
for lower milk prices while revenue is
positive, he said.
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capital. So if you’ve got accounts, get
them cleaned up. Be on pre-pay and be
on early-pay instead of having accounts
payable,” he said.
Secondly, producers should pay down
lines of credit so they’ve got that avail-
ability and then build up the rest of their
working capital so they have a cushion.
With the high cost of labor, they should
DOVREXLOGODERUH൶FLHQF\RUDXWRPDWLRQ
into their operation, if possible, he said.
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WZR ÀRFNV RI GRPHVWLF FKLFN-
ens in Idaho, the state Depart-
ment of Agriculture says.
The department received
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several cases of Highly Patho-
JHQLF $YLDQ ,QÀXHQ]D YLUXV
— known as HPAI — in two
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Gooding and Caribou counties.
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be unrelated, ISDA said.
Gooding County is in
south-central Idaho, and Car-
ibou County is in southeast
Idaho. They are roughly 200
miles apart.
7KH FDVHV ZHUH FRQ¿UPHG
WKURXJK D FRRUGLQDWHG H൵RUW
between ISDA and USDA Ani-
mal and Plant Health Inspection
Service. Following preliminary
UHVXOWV WKH ¿QDO GHWHUPLQDWLRQ
was made by USDA’s National
Veterinary Services Laboratory
in Ames, Iowa, said Chanel
Tewalt, ISDA deputy director.
The virus was found in sev-
eral birds in the two small
ÀRFNV2QHLVGH¿QHGDVDSRXO-
try operation, meaning it sells
or gives away poultry, eggs or
PHDW7KH RWKHU LV GH¿QHG DV D
non-poultry domestic operation,
which does not distribute prod-
ucts, she said.
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order was put on the infected
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Two nocks of chickens in Idaho were to be depopulated after avian nu was found.
each property will be depopu-
lated as soon as possible, she
said.
The virus “is highly conta-
gious, which is why there’s such
a rapid response with depopula-
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It had not been detected in
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now, but it was detected in
wild birds in the state in 2015
and 2017. Low Pathogenic
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domestic birds many years ago,
she said.
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Massachusetts, Wyoming, North
Carolina and North Dakota in
0DUFK 7KH DJHQF\ FRQ¿UPHG
HPAI in Colorado, Montana and
Texas in April.
HPAI is carried by migra-
tory waterfowl. Idaho is within
WKH 3DFL¿F )O\ZD\ 'RPHVWLF
birds and poultry are susceptible
to morbidity and mortality once
infected.
HPAI is transmitted between
birds through close contact, fecal
matter and sometimes as an aero-
sol. It is often carried on objects
such as tools, vehicles, clothes
and boots, which can transfer
the virus from one location to
another.
Signs of HPAI in domes-
tic poultry frequently include
decreased appetite and activ-
LW\ UHVSLUDWRU\ GL൶FXOW\ GDUN
combs and wattle and unex-
plained mortality.
ISDA said it is essential for
poultry owners to be vigilant in
monitoring for illness and con-
tact the ISDA State Veterinar-
ian immediately when HPAI
V\PSWRPV DUH FRQ¿UPHG +3$,
is a reportable disease in Idaho,
and veterinarians are required to
report detections to ISDA.
It is uncommon for humans
to become infected, but symp-
toms may include conjunctivi-
tis, fever, lethargy, aches, cough-
ing or diarrhea. Being in direct
contact with domestic birds is
the highest risk activity. When
USDA guidelines for cooking
are followed, HPAI is not a food-
borne illness.
7KHEHVWIRUPRIÀRFNSURWHF-
tion is maintaining strong bios-
ecurity standards. Biosecurity
includes limiting the number
of people who interact with the
birds, washing hands before and
after handling the birds and hav-
ing dedicated clothing and tools
IRUHDFKÀRFN
ISDA will post updates on the
situation on its website at https://
agri.idaho.gov .
,GD ho Power
seeks to recoup
added costs
of electricity
By BRAD CARLSON
Capital Press
ODFW
About 175 wolves live in Oregon, the state Department of Fish and Wildlife says.
State: Oregon wolf population
growth slows; mortalities rise
tion as they expand in distribu-
tion across the state and show a
strong upward population trend,”
SALEM — Oregon’s wolf Brown said in a statement.
population increased by just two
Environmental
groups
individuals in 2021, according argued the report shows Ore-
to the state Department of Fish gon’s wolf population is in cri-
and Wildlife, while the number sis due to poaching and other
of wolf deaths was the highest human-caused mortality.
Danielle Moser, wildlife pro-
yet in a single year.
ODFW released its annual gram coordinator for Oregon
wolf report on April 19, docu- Wild, said the deaths reported
menting 175 wolves compared by ODFW are “only known
to 173 in 2020. The count is a mortalities and there are cer-
minimum estimate based on tainly many more unaccounted
YHUL¿HGHYLGHQFHVXFKDVZROI for deaths and poaching of
sightings, tracks and remote uncollared wolves.”
Zoe Hanley, Northwest rep-
camera photographs.
A total of 26 wolves died resentative for Defenders of
in 2021, including 21 killed by Wildlife, said the group is con-
humans. Of those, four were hit cerned Oregon’s wolf recov-
by vehicles, eight were illegally ery is not adequately addressing
poisoned, one was legally shot threats like poaching.
“This year’s report is a call
by a rancher on private property
and another eight were killed by to action for agencies like
ODFW after habitually preying (ODFW) and Oregon State
Police to recognize the severity
on livestock.
Roblyn Brown, ODFW wolf of poaching incidents and take
program coordinator, said last additional steps to protect Ore-
year’s rise in mortalities “cer- gon’s vulnerable wolves,” Han-
tainly played a role” in the lat- ley said.
John Williams, wolf com-
est population survey remaining
mittee co-chairman for the Ore-
PRVWO\ÀDW
“Despite this, we are con- gon Cattlemen’s Association
¿GHQW LQ WKH FRQWLQXHG KHDOWK based in Enterprise, said he was
of the state’s wolf popula- surprised by the wolf popula-
By GEORGE PLAVEN
Capital Press
tion being mostly unchanged,
considering ranchers are seeing
wolves in areas where they’ve
never seen them before.
“We know their areas are
expanding. We know the num-
bers are expanding,” Williams
said.
Most wolves in Oregon
inhabit the far northeast cor-
ner of the state, though they are
branching into new territory.
ODFW established four new
areas of resident wolf activ-
ity in 2021, covering parts of
*UDQW -H൵HUVRQ .ODPDWK DQG
Union counties.
The state now has 21 known
wolf packs — 16 of which
qualify as breeding pairs — in
addition to eight other groups
of two or three wolves.
Wolves also continued to
prey on livestock in 2021.
2'): FRQ¿UPHG FDVHV RI
wolf depredation, up from 31
in 2020. In all, wolves killed or
injured 95 animals, including
six cows, 44 calves, 17 ewes, 11
lambs, 14 goats and three guard
dogs.
The vast majority, 92%, of
those depredations occurred
between July and November,
with 86% on private land and
14% on public land.
Idaho Power irrigation customers
would pay 8.46% more for electric-
ity if regulators approve the compa-
ny’s annual power cost adjustment.
The company said the adjustment,
¿OHG ZLWK WKH ,GDKR 3XEOLF 8WLOLWLHV
Commission on April 15, calls for
a price increase across all customer
classes as a result of higher power
costs related to last summer’s heat-
wave and less hydroelectric genera-
tion due to drought.
Idaho Power last year requested a
power cost adjustment that included
a 3.44% increase for irrigators.
Across all customer classes,
the proposed increase for 2022
attributed to the power cost adjust-
ment is 8.27%, up from 3.36% a
year ago.
Earlier power cost adjustments
included a 5.21% increase in 2020
and a 4.34% decrease in 2019.
The power cost adjustment of
$103.4 million passes to customers
the higher costs associated with sup-
plying energy. Money collected is
used only to recover expenses asso-
FLDWHG ZLWK DQQXDO ÀXFWXDWLRQV LQ
power costs.
Neither the company nor its share-
KROGHUVUHFHLYHD¿QDQFLDOUHWXUQ
Idaho Power said actual power
supply costs in 2021 exceeded the
forecast, driven by lower-than-ex-
pected hydro generation, high natu-
ral gas prices and high market prices
for power. The company paid higher
power costs during last summer’s
heat wave, when it exceeded its pre-
YLRXV DOOWLPH SHDN ORDG ¿YH FRQ-
secutive days.
Irrigation is the smallest cus-
tomer class but has relatively high
usage per customer, company
spokesman Jordan Rodriguez told
Capital Press.