ND, MT wines score at international wine competition

The 15th annual Finger Lakes International Wine Competition is a big deal. It benefits Camp Good Days,  a summer camp for children with cancer. This is the world’s largest charitable wine competition. This year the competition was held in Rochester, N.Y., on March 21-22. It was open to commercial wineries and distilleries from all producing countries.

The competition in recent years has drawn 3,750 wines from 20 countries, including six Canadian provinces and all 50 United States. The event includes more than 70 judges from more than a dozen countries, representing Master’s of Wine, Master Sommeliers, sommeliers, educators, enologists, winemakers, writers, importers, retailers and industry consultants.

Each wine is judged on its own merit — its “presence, balance and varietal character — not how it compared to other wines in a particular flight. The wines in the competition are judged for what they are at the time of judging — not what they might become in the future.

It’s a sophisticated competition. Wines are blind-judged in flights, with each wine identified only by a computer-generated code number. Each glass is labeled with this code number and the judges are given a scoring sheet with the number and variety of the wines.

All flights are staged in a separate back room and delivered to a judging room. Re-pours, when necessary,  from a second, unopened bottle are also staged in a back room and delivered to the judging room. All wines are presented the judges in Riedel crystal stemware.040615.A.GFH.WineWinners.jpg

Jeff Broin: Poet LLC executive chair is a pioneer in his 40s

It’s been 35 years since I was an undergraduate at South Dakota State University in Brookings. I wrote about the 1978 and tractorcades to Washington, D.C., for The Collegian, the SDSU student newspaper. I was an agricultural journalist, and Editor Kevin Woster from the famed Woster journalism family in South Dakota was my boss. He created a position called “Earth Editor” for me.

About this time, Paul Middaugh was an SDSU professor who was helping farmers learn about producing on-farm ethanol from their corn that was worth about $1.30 per bushel at the time. Middaugh was a Boy Scout leader, and I was familiar with one of his older sons. In 1979 I started my first job at the Worthington Daily Globe. Farmers were in trouble and ethanol was one of their potential saviors. I covered the first wet milling plant at Marshall, Minn., and the Minnesota effort to get subsidize ethanol production and mandate its use at 10 percent in regular gasoline. “Gasahol,” they called it.

In 1983, I moved to The Forum of Fargo-Moorhead. The only ethanol in our part of the country at the time was the Dawn Enterprises plant at Walhalla, N.D., which originally was to make the stuff from barley, before they started shipping corn up there. There was the Al-Chem Ltd. plant at Grafton, N.D., eventually owned and later shut down by Harold Newman from Jamestown, N.D.

Meanwhile, in 1983, a youngster named Jeff Broin was growing up on a farm south of Minneapolis where his father dabbled in on-farm ethanol plants. In 1987, at age 22, Broinand his family had purchased a bankrupt ethanol plant at Scotland, S.D. Fast-forward 25 years. Broin has gone on to build a huge ethanol empire that’s touched farmers in North Dakota, South Dakota, Minnesota and several other states.  Broin has done it all — envisioning, building, marketing, innovating, and reinventing an industry that has made a huge impact on agriculture in this region. After all of these years, I had never met Mr. Broin until Jan. 28, when I sat down with him at his impressive Poet LLC headquarters in Sioux Falls. It’s a sprawling affair that includes research facilities. As we took a “walk down Memory Lane,” as Broin put it, we realized we knew all of the same characters — guys like Middaugh and former legislator and Minnesota Agriculture Commissioner Jim Nichols, one of the key movers of Minnesota’s ethanol mandate. It occurred to me that this fellow who has hired a new CEO for Poet, LLC, was one of the pioneers in the flesh — a builder of an industry and still a young man. Broin noted that most of the players in the business were 20 years older than he, which puts them in their 70s or better. Broin already has done more in his young life than anyone I’ve ever met, and I’ve met a lot of people. He’s been a co-investor for the plants he’s helped build, so he’s had the same skin in the game as many of his farmer-investors. He’s avoided some of the pitfalls that have impacted some of his competitors and rivals. He could take his money and buy an island somewhere, I suppose, but that doesn’t seem to be in the picture. I am interested in motivations.If you look in the  company literature, Broin hints at religious motivations and caring for his community that I find is a motivator for some of this region’s most effective leaders. You don’t have to be an ethanol believer to respect that. I surely do. Broin’s story was in the March 2, 2015, issue of Agweek magazine, and on Agweek TV. See them at agweek.com

Prevented-plant crop insurance adjustments, weaknesses

IMG_1672Above is a photo I took of some cropland east of Dickinson, N.D., that wasn’t planted on July 2, 2014. It was a prevented-plant (PP) crop insurance situation because of some very wet planting season weather.

Of all of the input I receive from readers, PP is the tops. Several times a year I will get a phone call or e-mail from some farmer, wanting to know who to contact about the neighbor who outbids younger farmers for land rent and then has land that goes unplanted while neighbors seem to get their work done.

In one case, a south-central North Dakota farmer was talking about the farmer who had eight quarters unplanted — about 1,200 acres. The

Another story was about the fellow who failed to plant canola by the planting date, collected the 35 percent PP insurance, and then went ahead and planted the crop the neighbors allege they intended to plant all along. There was the insurance agent that told me that  this kind of thing isn’t as lucrative as people say it is, that the PP benefits are declining. But there’s something pervasive going on when an extension official declined to comment about PP at all, saying it is so rife with potential abuse.

Me? I think a big problem with the PP is that it is enormously difficult to enforce this kind of program across all of the variability of the American cropping picture. I think the prairie pothole region of the Dakotas are more difficult to keep it all straight. I think part of the problem is how the crop insurance companies and their adjusters view the system.

Regardless of the fraud potential, the U.S. Department of Agriculture is looking at some changes in the  program. In the March 2 issue of Agweek magazine look for a brief summary of some of the proposed changes a consultant, Agralytica of Alexandria, Va., has suggested to the USDA’s Risk Management Agency for formula changes that could affect such crops as corn, potatoes and green peas in our region. RMA officials say these ideas are more in the trial balloon stage — not yet to the point of proposed rules. But I’m thinking those steps aren’t far behind.

If you wish to offer input on this, I’m all ears — fingerprints or not.  My phone number — 701-297-6869 — is published in Agweek every week.


Gulke: SD banker says 85% of ag customers lost money in ’14

IMG_1603Jerry Gulke tells it like it is, and that’s why the room was filled at the Soybean Expo 2015 in Fargo, N.D.

An Illinois farmer and nationally-known grain marketing consultant and analyst, Gulke doesn’t sugar-coat the current agricultural picture. “I have a friend in South Dakota at (a very large bank), their regional banker, told me that 85 percent of their farmers at the banks lost money last year in 2014 — their Schedule F, including depreciation,” he said.

Farmers have different cash flow situations, he acknowledged. Some may have grain on the farm from two years ago, Gulke says, so there’s “a lot of money sitting in grain waiting to be sold,” Gulke says. “If you think about it in your mind, you’ve already expensed it. It’s too late to recoup something you’ve already expensed. If you’ve got 10,000 bushels of $5 (per bushel) wheat or $4 (per bushel) corn in the bin, that’s pure profit.”

Gulke perceives that farmers in North Dakota may be in a bit better shape than in South Dakota. “But there seems to be a problem brewing out there somewhere.”

Here were some of his thoughts on key areas going into 2015:

Cash flow: “This thing doesn’t cash-flow real well. I look at it and say, ‘What’s the rock bottom that I can spend in actual dollars out of my pocket, not including depreciation, that I can put a crop in, and you probably want to do the same thing.”

Depreciation is a “funny number,” he says, because that’s already been spent once. “This is the year you don’t spend that depreciation on new equipment. You put it off a year to make the balance sheet look better.”

Cash  flow was the “biggest problem that got guys in trouble in the ’80s,” Gulke says. “If you use the income tax break that you’ve saved to make a down payment on land, I don’t care how much you paid down, you’ve got a $100 principal payment, you’ve got to net $130 or $140 an acre to have enough left over to pay that. Rent is expensable,  interest is expensable, but not capital payments.”

2015 soy  acreage: The price outlook for corn and soybeans is “really up to us” farmers, he said, noting that farmers will be in more trouble if they plant as many acres as they did last year. The industry now is expecting an 88 million-acre soybean planting in 2015. “I’m hoping our numbers come down to 86 million (U.S. soy acres) or somewhere that makes the market nervous,” Gulke says.

He added that a move of 2 million acres up or down doesn’t mean as much to soybean prices as it does to corn. Gulke doesn’t see a good weather year like last year for raising beans and farmers need to be ready to catch a surge in price.

Crop insurance: “If you think of it, after Feb. 28 — after one more week in February — you really have to move that price to get the average for insurance (values) up.”

If there are three weeks of prices “going nowhere” there needs to be a $5 per bushel price for a week to get the average up to $4.50 per bushel, he noted. “We will run out of time for the crop insurance to incentivize us to plant for the profit under crop insurance. Those days are gone,” he said.

“If we’re at the levels of crop insurance now that we we’re going to be at the end of February, 80 percent of $4  something  (per bushel) on corn is $3.20,” he says. “That doesn’t work” for farm profitability.”

Gulke thinks the price of corn in the fall will be around $4 an acre in October, November, December, if there are 88 million acres of soybeans and the country gets a trend-line yield. “The  corn will be worth more than it was last fall, but not a lot. Then we’ll see if we can get a rally in post-harvest.” He thinks soybeans will be at $8.50 per bushel if they get the crop planted.

If U.S. farmers plant 171 million acres of corn again in 2015, and the crop comes through in good shape,  farmers may be in trouble on per bushel prices, Gulke says.  “You may see a 2 in front of the number, who knows?”

Cutting back on fertilizer: “If you plant the acres, you discourage efficiency, you discourage production,” Gulke says. “I don’t know where we cut back. A lot of us won’t have to, maybe we’ve gotten pretty well-heeled and won’t have to. I’ve even thought about it, and I’ve fertilized a lot when prices were good. Put the plow down, start everything (with starter fertilizer) because we need to get rid of the money. Now it’s a little different. You can say to yourself I have enough reserve, I don’t need to put on any P and K (phosphorus and potassium). I can put the minimum on and still get a crop.”

Land rent: The rent in Illinois is not coming down, very fast or far.

“I don’t know where it all ends,” he says. He says he rents out farmland and is “always $50 behind” the top per-acre levels in the community. “This year we’ll drop it $50 an acre. I think we got $350 an acre and we’ll drop it to $300 an acre. I’d rent  him all of my land for $300 that I’m farming, based on cash flow now, and just take a year off.”

Gulke owns farmland and is negotiating with his own renters. He’s telling them he’ll keep the rent at the same level for the first half of the year payment but then negotiate on the second-half payment. But he says the renter must be a smart marketer. “If you have a chance at $4.25 (per bushel) corn and you don’t take it, don’t come crying to me.”

He says perhaps 2016 will be the year when land rents come down more.

Gulke often finds a way to bring laughter to an unpleasant outlook. He told  about how he chisel-plowed all of his soybean ground last fall, some of it twice, and has it ready to plant soybeans.

“I may just plant the whole farm to soybeans. I’ve got grain bins. I’ll make sure the suckers (soybeans) are dry, put them in the grain bins,” he said, and added a joking quip:  “Then only me and you guys will know that I’ve got it. My kids could dribble them out (and sell them) over the next 10 years and Obama will never know, or his kids, you know.”

There was laughter.

“If I look at them being worth 40 percent more than they really are (right now), I’m planting $14 per bushel beans.”

More laughter. And applause.

Gulke is frequent, popular speaker in the Dakotas because he relates to the culture. He was born and raised on a grain and livestock farm near Ellendale, N.D. He received electrical engineering degrees at North Dakota State University and worked in Rockford, Ill., where he started farming part-time. He earned a masters in business administration from Northern Illinois University in DeKalb, Ill. He started farming full-time in 1975 and became a contributing editor to Top Producer Magazine and writes columns on DTN, and among his many media activities.

Farming is still the most popular job in ND, SD. Truckers coming on.

If you want to see an interesting map of the United States, check out National Public Radio’s animation of the most popular jobs. You’ll see that in North Dakota and South Dakota, farming is still No. 1, but that trucking is taking over in surrounding states.



Queens and new friends at the Black Hills Stock Show in Rapid City, SD

I am just home from the Black Hills Stock Show, which runs through Feb. 8 at Rapid City, S.D. — a great get-together for friends. Among the new friends were  Miss Faith (S.D.) Stock Show Rodeo Queen Mikayla Sich. Originally from Duluth, Minn., Sich is an alumni of the University of Minnesota,  Crookston, Minn., but now is an agricultural communications major and animal science and ag business minor at South Dakota State University in Brookings, S.D. Also at the BHSS was Miss North Dakota Rodeo Dani Taylor  of Mandan, N.D.,  a senior SDSU mass communications and political science major. The two queens were among 28 queens who answered an annual rodeo queen’s call, through social media. The queens help run the World’s Smallest Rodeo children’s event, where kids dress up like cowboys and run “figure 8s” and other events on stick ponies. No live animals, but lots of live fun.

Curiously, before the BHSS, Sich and Taylor had never met at SDSU. “It’s a big place,” Taylor said, noting the student population is almost13,000. I know, I told her. I am a proud  graduate and grew up in Brookings. I have stories from a new cattlemen’s conference at the BHSS and features from the horse sale coming in the Feb. 9 issue of Agweek magazine. Don’t forget to subscribe.



Would “Honest John” Burke recognize today’s N.D. Legislature?

As the Republican-led North Dakota Legislature grapples with issues big and small, many of its members walk past the statue of John Burke. “Honest John” came to Dakota Territory in 1888 and is said to have done everything from pitching bundles to teaching school, reading law — even publishing a newspaper. I don’t know how he had the time as he was in both the state House, the Senate, the governorship and on the state supreme court. As a capstone he was a federal treasury secretary in the Woodrow Wilson administration.

An advocate for limiting lobbying, I’m not sure Burke would recognize the political climate today. Certainly he’d see fewer farmers in legislative spots.

While visiting the capitol as a part of a four-state agricultural legislation outlook for Agweek (See the Jan. 19, 2015, cover story, and Agweek TV)  I ran into long-time acquaintance, Rep. Jon Nelson, a farmer from Wolford, N.D., and a member of the House for 20 years. Nelson told me there are only about 16 active farmers in the Legislature anymore. Members of the House and Senate agriculture committees often have some tie to the industry, but few are farmers.

A former Agriculture Committee member and now on the Appropriations Committee, Nelson is hearing the pain in the oil  sector because of plunging prices. But he reminds colleagues  the agriculture industry has gone through the “same thing” in the past several months.

“It’s part of the game, we have to live with it. It doesn’t scare me,” Nelson says. “We realize in the big scheme of things there are valleys and peaks and we should have policies in place to get us through this. I don’t see anybody coming to the aid of agriculture when corn drops to $2 a bushel.” Well, the Legislature makes an effort.

Ethanol advocates in the state are concerned about heading off any surprise effort to scuttle the state’s counter-cyclical subsidization of their industry. An unexpected effort to do that came up in the 2013 Legislature. Nelson was there to notice it and stop it. Why keep a safety net for ethanol? Nelson says that’s simple: “If wasn’t for ethanol, what would prevent corn from going to 50 cents a bushel?”

A bit of exaggeration, yes, but Nelson — the farmer-legislator — has a point.

Mexican deal on sugar with U.S. is complete, details later from DOC


Red River Valley sugar beet growers appear to have gotten what they are looking for in a deal over Mexican sugar imports. Here is today’s press release from the American Sugar Alliance:

WASHINGTON—The U.S. Department of Commerce (DOC) today announced that the U.S. and Mexican governments have reached an agreement to suspend the ongoing antidumping and countervailing duty investigations of sugar from Mexico. Phillip Hayes, a spokesman for the American Sugar Alliance, released the following statement about the settlement.


“The final suspension agreements should achieve U.S. sugar producers’ main goal by stopping Mexico from dumping subsidized sugar onto the U.S. market and violating U.S. trade law. It is a good deal for U.S. producers, U.S. taxpayers, and U.S. consumers, and we would like to thank officials at the DOC and USDA for their hard work in negotiating the agreements.


“Like our counterparts in Mexico, we want NAFTA to operate as intended and to foster free and fair trade in sugar between the countries. This settlement helps achieve that objective.”


The DOC will provide details of the agreements, which do not reopen or undermine NAFTA and will not require any changes to U.S. sugar policy in the recently passed Farm Bill, Hayes says.

Here are the key terms of the agreements, according to the Department of Commerce:

• The CVD agreement contains provisions to prevent an oversupply of sugar in the U.S. market.

Specifically, Commerce will calculate an export limit for Mexico based on information it obtains from

the U.S. Department of Agriculture (USDA) about the U.S. needs for sugar in a given year. The CVD

agreement will also prevent imports from being concentrated during certain times of the year, and will

limit the amount of refined sugar that may enter the U.S. market from Mexico.

• Mexico’s export limit is set at 100 percent of U.S. needs after accounting for U.S. production and

imports from tariff rate quota countries. (U.S. needs are calculated based on USDA data.)

• For purposes of the agreement, “refined sugar” is defined as sugar with a polarity of 99.5 percent or

greater. “Other sugar” is sugar that does not meet the definition of refined sugar. The agreement caps

exports of refined sugar at 53 percent of total exports from Mexico.

• The Government of Mexico will allocate the amount of sugar that each Mexican sugar

producer/exporter can export to the United States. As part of this process, the Government of Mexico

has agreed to establish an export licensing mechanism. Sugar from Mexico will not be able to enter

the United States if it is not accompanied by an export license.

• The signatories of the CVD agreement are Commerce and the Government of Mexico.

AD Agreement

• The AD agreement establishes reference prices, or minimum prices, to guard against undercutting or

suppression of U.S. prices. These minimum prices are $0.26/pound by dry weight commercial value

for refined sugar and $0.2225/pound by dry weight commercial value for all other sugar. “Refined

sugar” is defined as sugar with at least 99.5 percent polarity or above. “Other sugar” is sugar that

does not meet the definition of refined sugar.

U.S. Department of Commerce | International Trade Administration

• The signatories of the AD agreement are Commerce and the Mexican sugar producers and exporters

which account for substantially all of the subject merchandise imported into the United States.

Monitoring and Enforcement

• Commerce and the relevant Mexican government agencies have agreed to establish information

exchanges and consultative processes in relation to the operation and enforcement of the agreements.


• Commerce will instruct U.S. Customs and Border Proctection to terminate the suspension of

liquidation and refund any cash deposits collected as a result of the preliminary AD and CVD

investigation determinations consistent with the relevant provisions of U.S. antidumping and

countervailing duty law.

The Mexican sugar imports in the past few years have led to Mexican imports that depressed the price of U.S. sugar and led to a trade case by the U.S. producers against the Mexicans. The sugar price cuts have cost the region’s growers — who also own the factories as cooperatives — hundreds of millions of dollars.

USA vs. Johnsons: Spud crop insurance trial starts today in Fargo

The USA vs. Aaron Scott Johnson, Derek Johnson and Johnson Potato Co. starts today, Monday, Dec. 1.  Pre-trial conferences start at 9 a.m., Monday,  and the jury trial starts at 9:30 a.m. in Fargo, and are scheduled in the calendar of U.S. District Judge Ralph R. Erickson through Friday, Dec. 12.

The potato farmers from Northwood, N.D., have pled not guilty to intentionally harming stored potatoes to gain crop insurance. On Nov. 25, Erickson granted several requests from Johnson attorneys to exclude six topics — evidence of a 1995 conviction of conversion of commodity credit corporation property; uncharged alleged criminal acts; the refusal of Aaron Johnson to submit to a polygraph;  and whether Aaron Johnson had reduced harvests during the 2002 to 2006 period.

Erickson said he may exclude testimony of a worker to community farmers  about whether Derek Johnson had “developed the idea of using Rid-X to destroy potatoes.” Erickson said evidence must show that the statements “are not hearsay.”  


Fact and fiction: Are the North Dakota Grain Growers in a “sinister” effort to promote corn, undermine conservation?


I was fascinated to read Frank Carroll, a Rapid City Journal columnist, who this week took aim at the North Dakota Grain Growers. Carroll talks about a “sinister fight” where “360 million tons of corn contend for center stage.”

“In our rush to make fuel from our food, we inadvertently caused farmers to drain the famous prairie potholes where ducks and other birds have landed for millennia on their way here and there. Farmers are draining the water to make way for corn,” Carroll writes.

Carroll, a Forestry consultant, says the Ducks Unlimited Inc. organization is buying conservation easements on private farmland in South Dakota, and  they can’t get easements, they’re buying the land outright.” DU has $7 million for the purpose in South Dakota this year, Carroll says.

In his column, Carroll reports that “organizations like the North Dakota Grain Growers Association are working hard down low, behind the scenes to make conservation easements illegal,” and are attacking the Natural Resources Conservation Service, criticizing the agency for using “DU funding to pay for three NRCS positions.” Attacks on the NRCS are “way out of line” and “willing sellers and buyers should be able to establish conservation easements without interference.” And Carroll adds: “If there’s anything wrong here, it’s the corn lobby going after property rights in state legislatures and in the press.”

I don’t know what else in the Carroll column might be wrong, but I checked with the Grain Growers and Brad Thykeson, a recent past president and farmer from Portland, N.D., and he confirmed my recollection that  the group  has never pushed for the elimination of conservation easements.

Perhaps Carroll refers to the Grain Growers being against DU employees working in NRCS offices. The Grain Growers say DU workers are a political action group and don’t have any place in a federal office that has sensitive farm information.

The Grain Growers also are against Measure 5, a proposal promoted by DU and others that would constitutionally mandate the “allocation” of an estimated  $150 million a year on not-yet-approved programs. The Grain Growers says that kind of required spending or allocation of money into a trust fund is excessive, compared to the size of the Conservation Reserve Program, a federal program that has spent up to $188 million annually in the state and now spends $70 million. Thykeson say smaller state programs with the same purpose have struggled to spend even a fraction of the amount that would come into this proposed program.

The North Dakota Grain Growers are “not all about corn” — or even anything about corn, as Mr. Carroll might be surprised to learn. The group is about “small grains” — wheat and barley.

I don’t know about DU’s land purchase possibilities in South Dakota, but I know that a North Dakota state law dating to 1932 prevents corporations (even well-meaning non-profit organizations advocating for conservation) from owning and controlling farmland. South Dakota exempts nonprofit corporations from anti-corporate farming restrictions.  North Dakota makes no such exemption.