July 10, 2026: 45Z Tax Credit Opportunities This Growing Season, Crop Diseases to Watch

today on Agnew Staley. If you are adopting cover crops here this fall that would be an awesome opportunity or if you are already doing a strip till a reduced till program if your nutrient efficiencies were pretty good but it's especially if you are already using cover crops you will absolutely be in a great spot to capitalize on this. Welcome back to another edition of the Agnew Staley podcast still any hell will join today by Michelle Stingler. According remote this week as schedules are going to be hectic here in the month of July Michelle. Yeah field season a lot of great weather we're having and so it's fun to be in July already in summer. It is but it's gonna be a busy one like I mentioned heading to Kansas City next week for the summer agribusiness meaning that's gonna be put on with the KC agribusiness council and NAFB. I've got a couple travel dates coming up here so a lot going on in the month of July and certainly a lot going on in the weather as well. Fourth of July weekend brought a lot of showers our showers going to be continued in the forecast well unfortunately it looks like yes scattered showers and thunderstorms are expected across much of the Midwest through the weekend bringing additional rainfall to many areas. The isolated events though should be pretty severe in some areas and could cause some localized flooding. The overall pattern is expected to provide soil moisture as we get into some key growth stages here but heading into next week no widespread weather concerns are expected across much of the corn belt. Instead the focus will remain on getting that timely rain into areas that need it and conditions are certainly varying across much of the country. Well the latest USDA crop progress report shows the nation's corn and soybean crops continue to hold study as a growing season moves into a critical stretch nationwide 67% of the corn crop is rated good to excellence unchanged from last week while 64% of soybeans are rated good to excellence up one percentage point from the previous report. Corns have been reached 14% just behind the five-year average of 17% while 28% of soybeans are blooming right and lined with seasonal progress. A generally favorable weather across much of the corn belts crop conditions remain relatively stable heading into pollination and out here in my neck of the woods in Wisconsin corn is almost here into the tassel stage a lot of tall corn especially since we have some silage corn but what is that looking like here in your neck of the woods in Iowa? I was just thinking the same thing Michelle definitely a little bit of variability but a lot I think is getting ready to head into that tassel season. Well Farmer sentiment weakened again in June as high input costs continued to weigh on producers according to the latest Purdue University CME Ag Group economy barometer. The index fell from 119 in May to 113 in June with nearly half of respondents identifying input costs as their biggest concern. Only 12% of farmers say their operation was in a better financial position than it was a year ago while 42% said high input costs are limiting improvements to their bottom line despite those concerns producers remain optimistic about agriculture's long-term outlook more than 40% of farmers expect U.S. agricultural exports to increase over the next five years a nearly 58% agreed that free trade benefits agriculture and most other American industries. Respondents also continue to express confidence in long-term farmland values even as concerns over input costs and commodity prices persist. It certainly needs to see that data from month to month and we appreciate it although where the farm economy sits today and it'll be interesting to continue to watch that continuing going forward here in 2026. Looking ahead the United States officially entered the review process for the U.S. Mexico-Canada Agreement this week after the White House declined to automatically extend the trade pact for another 16 years. We've been sharing this a lot of weeks here on Agnews daily so what will those conversations come out will continue to report it here on the podcast. While the decision has raised questions about the future of North America's largest trade agreement it does not change the current terms of U.S. MCA according here today. Instead it begins a formal review period that could eventually lead to updates or renegotiations. Despite this announcement market analysis say the reaction has been limited because the review was widely expected and changes would take years to implement. Stonex economist Mike Castle says agricultural trade between the U.S. Canada and Mexico is deeply interconnected with Canada serving as a key supplier of potash and the major buyer of U.S. Ethanol while Mexico remains the largest export market for U.S. feed grains. For now here analysts expect agricultural trade to continue largely uninterrupted as negotiations move forward. I'm Michelle turning now to some livestock headlines here. USDA is continuing its response to new world's screw worm. As cases continue to rise in the U.S. with the USDA now reporting 32 confirmed cases in Texas and now new Mexico. The agency continues to monitor the outbreak through ongoing surveillance and response efforts noting that while individual animal cases may be resolved affected areas can remain under management until additional requirements are met. The parasite poses a serious threat to livestock because of the larva feeding on light living tissue potentially causing severe injury or death if left untreated. As the response continues researchers are also working on new ways to strengthen eradication efforts. The foundation for food and agriculture research grant is supporting the development of genetically sterile male screw worm flies using CRISPR technology. Researchers hope that this approach could improve upon the current sterile insect technique by producing more competitive flies helping slow the spread of pests and better protect the U.S. livestock industry. So interesting to see some technology being leveraged here. We've talked a lot about CRISPR on this podcast in years past so interesting to see that coming to potential fruition here to help support that. Well something we've also talked about in the last few years is the farm realm and just before the 4th of July holiday we had some news there but we are still waiting on a full farm bill to be passed. But here's an update. Senate Agriculture Committee chairman John Bozman is pushing to move two major international food aid programs back under the U.S. Department of Agriculture as part of the next farm bill. Bozman says the food for peace and mid-governed dole programs are a better fit to USDA he says. Arguing the department is better equipped to manage agricultural assistance than the state's department after the programs were shifted following the restructuring of U.S. aid. Bozman says including the change in the farm bill will require agreements from other congressional committees that oversee the state department. He remains optimistic while markers can reach a deal adding the programs were originally designed not only to fight hunger abroad but also to create export markets for U.S. farmers and help support commodity prices. I am sure farm bill is going to be a continue topic here on the podcast as well as some changes to other legislation which we'll get to here in the podcast. But looking at head some farm groups are pushing back against Bayer's request in late June to place new import duties on glyphosate products coming from China saying that this move could increase herbicide costs. At a time when many farmers are already operating on very thin margins. Bayer through its Monsanto subsidiary argues that Chinese glyphosate is being sold at unfairly low prices and that import duties are needed to protect U.S. production. Commodity groups including the National Corne Growers Association and the American Swaping Association oppose that proposal. They argue that adding import taxes would reduce competition and likely continue to raise import costs for farmers who are already facing low commodity prices and high production expenses. Farm organizations say any increase in herbicide costs would put additional financial pressure on growers heading into future planting seasons. And Bayer also had some other big headlines here recently Michelle as well. Yeah they had announced here on July that it is moving its U.S. glyphosate to business into a separate company called Ruvion which will be headquartered in St. Louis and remained part of the Bayer group. Ruvion will manage all aspects of Bayer's U.S. glyphosate operations including pricing, marketing, production, and logistics. Bayer says the move is part of its long-term strategy to better compete in the glyphosate market while maintenance apply and support for farmers who rely on Roundup branded and other glyphosate products. So interesting to see some of these larger companies breaking into two companies that we've seen in recent news over the last few months. Well Michelle Crop scatting is certainly going to be pertinent this time of year and while some folks are dealing with weather-related production losses others are certainly focused on protecting yield potential as the growing season progresses. And as you mentioned earlier a lot of corn is starting to enter that tassling stage. And agronomists with the University of Illinois extension are reminding growers that it's time to start scouting especially for issues like corn leaf aphids while widespread infestations are not expected this season, the pest reproduces most rapidly during the late vegetative and early reproductive stages, making the next several weeks the most critical time to monitor fields for aphids and a lot of other disease and insects. Heavy aphid populations can reproduce plant vigor by feeding on sap and may interfere with pollination if lack unchecked. University of Illinois Extension entomologist Nick Cider says growers who have dealt with corn leaf aphids in recent years, particularly those with later planted fields should be scouting now. Although the overall risk does remain low, he said severe infestations can, of course, reduce yields in isolated cases and early detection and timely intervention can help prevent those. Another crop disease we're watching is tar spot. It's been confirmed the season around the Midwest, but some recent hot weather throughout the corn belt has loaned the disease development in some areas. Agronomists are encouraging farmers to keep scouting fields because the pathogen remains present and could become more active if temperatures cool and so that's 64 to 73 degree range. Agronomists are encouraging growers to avoid making fungus side applications too early and instead focus on protecting the earleaf during the key treatment window from tassling through the R3 or milk stage. Tar spot has so far been confirmed in the states of Missouri, Iowa, Minnesota, at Illinois, Nebraska, Kansas, and Indiana. I think there was also county in Wisconsin that also is recently confirmed so continuing to watch and some crop diseases on our especially corn and soybeans throughout the Midwest. Well, here's kind of a fun news story to wrap us up for this week. Looking beyond the field, the USDA is looking for new opportunities for producers to expand through local food programs. The USDA is making its largest investment ever in farmed school grant programs, awarding nearly $20 million to 68 different countries or projects across the country. The funding is designed to help schools purchase more locally grown food while creating new market opportunities for American farmers and ranchers. These grants support initiatives such as school gardens, local food purchasing, and agricultural education to connect students with where their food comes from while strengthening the local food systems. The USDA says the investment benefits both students by increasing their access to fresh foods and produce and, of course, producers to help create reliable local products for their local markets for their products. Well, in this week's in a room, we're talking to Mitchell Hora, founder and CEO of Continuum Egg to discuss the latest developments surrounding the 45Z clean field production tax credit. The news that we just got in just before the year to lie fourth holiday. With the USDA really seen long-awaited guidance, Mitchell explains what the new rules mean for farmers. How carbon intensity scores may create new revenue opportunities for corn and soybean producers from this year's crop. And what growers should be doing now, particularly as a plan for the 2020-26 crop year to determine whether they qualify as bio field companies begin rolling out to participate in programs. Let's get into that in a room right now. Well, folks, of course, we've seen a lot of new movement over the last few weeks here with 45Z. And who better to break down what's going on in that space than Mitchell Hora with Continuum Egg? Mitchell, thanks for joining us on the podcast this week. Great to be here, Galani. So bring us up to speed. We had a pretty good size announced a couple of weeks ago on 45Z. And I know they continue on team. They're on it. And have been really proactive in making sure producers know what's going on. Yeah, now what we got was the final USDA guidance. And there's still a couple steps to take for the IRS in the Department of Treasury to integrate this new update from the USDA. But what we got was a updated calculator as to how you can calculate your farm's carbon footprint. We got updated and final guidance about verification of your farm practices. And we got final ruling on the traceability, which is going to be based on mass balance, which means that in order to participate in this program, you must physically deliver your corn, soybeans, sorghum, or spring canola as the applicable crops. You must deliver those crops into the biofuel supply chain, either direct to an ethanol plant or a crushed facility or to an elevator who is supplying those folks. So booking claim was the alternative. That's what we were pushing for, which would have decoupled the crop and the data, but they went with mass balance, which was in line with the preliminary rule. So it wasn't, you know, wasn't that groundbreaking. But it's mass balance. The practices and the calculator looks pretty good. You can get credit for using cover crops, no till reduced till improve your nutrient use efficiency. So it takes in your actual fertilizer rate and your actual yield and the more efficient you are, the better. And if you're using a nutrient stabilizer, you can get credit for stabilizers or specifically, nitrification inhibitors and manure gets factored in as well. So cover crop, village nutrient efficiency yield stabilizers and manure, those are all factored into the equation now. And it looks pretty good. Farmers can absolutely move the needle. And if you are delivering into the biofuel supply chain, you have got to figure out your CI score and you have got to figure out your opportunity to help your biofuel producer, capitalize on this awesome opportunity. Now, when I go back to the ruling that you talked about, none of the things you listed there was livestock and feed usage. Where do we stand on that front? Yeah, it's not included. So 45Z was originally inflation reduction act and it is a biofuel producer tax credit, specifically for transportation biofuel. So think ethanol, biodiesel, renewable diesel, sustainable aviation fuel, those are the core fuels that can earn these tax credits. Livestock, if you're feeding your crop to livestock, done qualify. If your crop is being exported, done qualify. The crop has to actually go into the biofuel supply chain in order to participate. And again, that's because of the mass balance determination where the data and the crop must stay together. And again, the folks who get the tax credit are the biofuel producer. In most cases, the ethanol plant or the biodiesel refiner. So the money flow goes from the biofuel producer, then down to the farmer, whether that be direct or via an elevator, who of course would want to take a cut as well. And then the farmer would, it's anticipated and coming very quickly here that farmers could get paid based on their CI score. And the whole concept is the lower your CI score, the lower your carbon footprint, the more you move the needle for the ethanol plant, and the more you can get paid. So the lower your score, the better, the lower the score on the farm, the lower the score, or the carbon footprint of the fuel, and the more money there is for everybody, be add to any it's specifically for biofuel production, which does consume about 40% of the corn and soybeans we're growing in this country. So it's a substantial percentage of folks that would qualify right out of the gate on this thing. But it is a biofuel producer tax credit. And you work with stakeholders in both the biofuel space and at the farm gate level to help with defining what those CI scores are Mitchell. So in the work that you and your team have been doing over the last really five plus years, how much of the producers that you work with were ready for that CI score? How many are going to be able to take advantage of this immediately versus what do you think that adoption rate looks like over the next few years? Yeah, now there's billions of bushels that will be applicable right away. And we are talking 2025 crop production that would end the fuel here in 2026. And we are absolutely also talking our 2026 crop production that's out there growing right now. And then of course we're talking going forward as well. This is a tax credit that is currently in law through 2029. It was part of the big beautiful bill and was extended through 2029. But no, I think a lot of farmers will be able to qualify even again for your last year's crop. That's where you should start. If you delivered any of last year's crop, 2025 crop, if you delivered any of it directly to a biofuel producer or delivered it to an elevator who delivered it to a biofuel producer, you have got to look into this. Now kind of to your point, some of the farmers may not qualify for a lot of credit. If you weren't doing many of the practices, your score may not be that good. And there may not be an ROI there. And yeah, this program may not necessarily work for you. But if you are adopting cover crops here this fall, that would be an awesome opportunity. Or if you are already doing a strip till a reduced till program, if your new training efficiencies were pretty good. But it's especially if you are already using cover crops, you will absolutely be in a great spot to capitalize on this. But every single farmer that delivered into the supply chain, at least needs to run their CI score. It's free. you can do it on our website, topsoil.ag. That's our software. Takes you just a couple of minutes. Just run your quick CI score. And any CI score that's below a 22 or 24 somewhere in there, especially if you're below a 20, you're in a great spot. So how it works is every single bushel is given a default CI score. And it's in the upper 20s. This new calculator has a 27.4. But every bushel is given a default carbon emission rating, saying that you are emitting carbon as a result of growing corn. So everybody starts with a high score. And what you must do is just prove that you are better than the default. Just prove that you are already doing some of these practices that lower your CI score. And again, a lot of different practices can qualify. And you likely already have a low CI score if you have already been doing these practices. If you're new to these practices, it doesn't matter. There's not an additionality clause like an old carbon markets. There's not a ultra long term commitment on any of this stuff. It is simply calculate your score for that given crop year. Submit the practice evidence, like receipts and shape files, so that you can pass a third party audit to prove that you did the practices. And that's what our software and our company does, is we do the verification, we help with the data collection, and we undergo a third party accredited audit. But the farmers, again, you likely already have a pretty good score. But at a minimum, you should calculate your score, figure out where you are. On my farm, we were a 4.7. It's not as amazing as some of the old carbon calculators, but this is the updated and final calculator for the time being. You need to know what your CI score is. You need to know, is your ethanol plant or your elevator? Are they participating in the program? And if they aren't today, it's because they're still waiting for some more clarity and a couple more of these rules, but almost every single ethanol plant. And therefore, the elevators supply in them. They'll all be coming out with programs in the months to come, because there is substantial financial opportunity here. Now, when we think about the ethanol or the biofuel producers that are putting together these programs, some farmers have been concerned to play devil's advocate that it's putting a lot of reliance on that marketplace to trustworthy, to be transparent about the practices and the way that those credits or the premiums are going to be passed down to the producers. What have you seen and what questions should farmers be asking to make sure they are picking the best program for them? Yeah, I think there will be some open transparency at some point. I anticipate that that continuum at a minimum will have to create at least kind of a landing page or website to highlight the different biofuel producers that we are partnering with who are accepting our data and being able to put out there some basics of their programs. Ultimately, each ethanol plant will have different financials in this. So it is tough. And we're only a week into having some clarity on this. So there's not necessarily money moving right now. It's going to take a little while for some of the dust to settle on this. What makes it tricky without going too complicated is the ethanol plant has to round their CI score to the nearest multiple of five. And they won't know exactly how their score shapes up until basically the end of the year when it's all said and done. Now we'll be able to model it out. We'll be able to get pretty close between now and then. But at the ethanol plant, there's CI score rounds to the nearest multiple of five. So they need to get kind of to the next stair step in order to qualify for the next higher tax credit bracket or the next level of credit. And how it works is that for every five points, the ethanol plant moves their score, they earn an incremental tax credit of about $0.10 a gallon. So for every five points, it's an extra 10 cents a gallon. And that would be shareable value worth. Upper 20 is almost 30 cents a bushel, and shareable value for each five points. But the problem is on the farmer side of things, and the feedstock, it's a weighted average of all the bushels that go across the scales and get verified in a given year. And the ethanol plant won't know exactly how it shapes up until they start inking contracts and until the verifications and everything get going. So that's what makes it a little tricky. So I would urge farmers be patient with your ethanol plants. Ethel plants, I would urge be patient with the farmers that are interested in participating. And again, ultimately, yeah, the dust kind of has to has to shape itself out here. So I do think though that there will be some decent openness and transparency on which plants are participating. What is their program? They will have to kind of put that out there and have to make it halfway as digital because doing all this over the phone and pencil and paper is just going to be impossible. So there will be that. And then on the farmer side, what you need to do is again, know your CI score, know how that moves the needle for the ethanol plant. So you kind of know what is the value of your data? And you kind of know what a fair deal looks like. And for most farmers, you could expect a premium somewhere between maybe 10 to 15 cents on the low end if you're not doing many practices. And I do think there will be some farmers that are doing a lot of these soil health practices that could be seeing 50 cents a bushel or better because they do move the needle quite substantially. So it'll be a range. Again, it's based on the lower your CI score. The more you move the needle for the ethanol plant and every five points that they move the needle, it's worth an extra 10 cents a gallon. So it is complicated. It is tricky. But I do think that it'll sort itself out here very rapidly and continuum, of course, is very involved in helping with that process. One other thing that's important to note here as well is that you can't be in a existing carbon credit program and be in CI in a CI program. So you cannot be in a carbon offset or a carbon in set program on the same acre on the same year. Okay, so in order to qualify, got to deliver the crop into biofuel, can't be in an existing carbon credit program, offsets or insets or just any program that is claiming your carbon reductions, cost share is fine, equip, CSP, the IDALs program for those of us farming in Iowa. Those things are fine. You can get paid for the practice. You just can't get double paid for the carbon. I think those are some good reminders. And I'm sure that some farmers' ears are purking up when they hear 10 to 50 cents per bushel, especially in a tight economic year. Like we're seeing the last few here. Mitchell, before I let you go, remind our listeners one more time the best place to go to get more resources from the continuum team. Yeah, if you search anything about 45Z, Michora, continue mag, you will find me. We have put out a tremendous amount of material but our website and our social media pages are all continue on the ag or continue on.ag is the website. And then the actual software to run your score, which is absolutely where you need to start. That's at topsoil.ag. Spends for 10 minutes to at least figure out is this going to be applicable for you? What's your score? What's the opportunity? And if you want help with that, our team would be happy to help run your score for you and help you there. There will be a bunch of the bio-field producers that, again, over the coming weeks and months will be, you know, saying what their programs are and if they're in or out or what are they doing. So a lot of movement on that side. But farmers, what the USDA gave us now is a seed at the table. Again, there's a little bit more dust-settle tees to cross eyes to dot. Regarding policy in DC. This is a huge deal. And Lady, we've been talking about it for years, right? It's finally coming to fruition, finally getting here. And it looks good. It's a huge opportunity. And I think, you know, now it's here. We've been talking about it and speculating about it for years. And now the final rule of the final words on the page are here. And it's a huge opportunity. Awesome, Mitchell. Thanks so much for joining this week. We appreciate it. Thanks for having me on. Good to see you. Well, Delaney, in a recent StoneX media update sent by John Dosh Linville, a potential change in fertilizer trade policy could provide some relief for farmers heading into fall application season. President Donald Trump has indicated his administration plans to suspend import tariffs on phosphates fertilizer from Morocco. A move that could reopen an important source of supply after months of limited global availability. Morocco has historically been a major supplier of phosphates fertilizer to North America. Linville says the announcements has raised hopes for lower phosphate prices, many farmers are hoping, of course, but it's still unclear how much impact this policy will have. While current U.S. phosphates prices are already competitive on the global market, increased imports could help improve supply availability and reduce costs as growers begin making fertilizer decisions for the 2027 crop. But Delaney, what's happening in markets this week? Well, great markets have eased lower as traders took over. some profits and repositioned ahead of Friday's USDA/WISD report. We're recording this just before the report drops, so we'll have fresh updates on that next week on the show. Enlests aren't expecting to see a lot of major changes on that report to the supply and demand estimates, but we could see some consolidation following the recent rally we saw here in Swarivine and Corn Futures. China remains the key mark as markets are still watching to see are they going to purchase soybeans. They've purchased an estimated 8 to 10 cargos of US soybeans this week, which does help support those demand expectations, but still a long ways off from the mark that a lot of the trade is watching to see them hit. We're also seeing some global weather concerns continue to build with El Nino contributing to drought stresses in parts of Australia and Europe. EU officials estimate drought-related corn production losses of about 5 to 10 million metric tons, which does raise questions about global grain supplies. Again, not expecting to see those adjustments on this month's WISD report. And across the Corn Belt, conditions remain highly variable due to the uneven rainfall we've seen, the variety and planting dates this year, and that is adding a lot of growing uncertainty to growing potential here. And as we look to the broader markets, geopolitical tensions also remain on traders' radars, as we're continuing to see reports of fresh attacks on vessels going through or trying to get through this trade of Hormuz. That has boosted crude oil prices once again, but that has shown a little bit of support here for the Swarivine oil market. So certainly a lot to watch this week on the markets front as well. And we'll be talking markets and other things next week at the KC Agribusiness Summer Showcase, so we'll be bringing you some headlines from that event as well, Michelle. Certainly, a lot of fun things happened in the next few weeks, but listeners, if you ever have a story idea or want to hear more of something, feel free to let us know, and you can find us across all social media. Then the meantime, Delaney, should we let the listeners go? Let's let them go. (upbeat music)