 We just, Joe Bradley is going to be in comedy, so he just had to run down the hall. And we're going to get a quick overview of the fire and walls and the primary comedy, how that's all doing. I just had a meeting with them and some people from the co-op, the chair, all the locations. Is that where I saw Liam Graves? Hi. Is that where I saw Liam? Yeah, he's right here. Oh, good to see you. Good to see you. I'm going to try to figure out some way to hold in the seat for you. So, the... Did you want me to hear your first answer? You look pretty good, Joe. Thank you. Thank you. The chair chair and the front words as well. Mine was the front words. No, actually, it seems like it was. Perfect. Did you have someone else? I did. I had. Janice and Kimberly. Was that okay? Okay. So, anyways, we'll call a meeting to order. We're going to let that light get started, but we've been working. And so I want to introduce Joe Bradley. So, to call more from Rotland County. Nice to meet you. Yes. You know, Caroline. Yes. Mr. Graves. And I thought that it would be good to hear Joe and Vita do a lot of front words. And I thought it'd be good to hear, you know, the big picture of just how things are from their perspective back on the finance and care. And then we'll move on to some of our bills, but it'd be good to get an overview. And I don't know how you want to do that. Well, I could start off, but I'd really like Jameson to come to the table. Why don't you take a chair right up there with you? Great. Thank you. Jameson is our senior agricultural lender. And he has a lot of experience. He looked at FSA before he came to us. And so spends a lot of time out on the farm with farmers. And I thought that it would be good for you to hear from someone who's actually out on the farm. I'm not out on the farm much. I'm mostly in the office. But let me just start from a management perspective at VAC. There is a great deal of difficulty in the farm sector, primarily due to the milk price. Yeah. And it's been a longer period of time this time, where the milk price has been lower, with the ag industry and more about the second. Well, I actually have been there 20 years. I do know quite a bit about it, don't I? So, you know, it's been a cycle like this. And now it's like this for a long period of time. And so a lot of farmers have gotten themselves in significant debt. We do a lot of restructuring of their balance sheets and their debts already. But I think they're going to need some significant assistance. Back in 2009, we did a program called the Farm Operating Loan Program, which gave them a low interest rate for a couple of years and gave them some cash for relief. And we're looking at possibly doing the same sort of thing, but with a longer period and a larger dollar amount, because some of the bills that are out there now are quite staggering, especially for the larger farms. We do about, I don't know if you want to know about VEDAVAC, but we do about 20 million a year in farmland. 20 million a year. 20 million a year. Yeah. In just from that. In just from that, yes. Now we do deal with out-of-state banks sometimes, not often in the farm sector. Kat, you must be one of the larger farmlanders. We are, because so many banks, as you know, have gotten out of farmlanding. So there's FSA, there's Yankee Farm Credit, and there's VAC. Our portfolio is, well, I don't know how you'd compare our risk with FSA because, you know, they have a lot of longer-term funding up to 40 years in some cases that really stretches. So I think their risk is probably comparable to ours. I don't know, Janice, what do you think about that? But our portfolio is certainly more risky than a Yankee Farm Credit. Yankee takes the better credits, and we take the credits that often need help. We work with them a long time. We're not like a bank where we have to write it off immediately. So we have some farmers, I'm embarrassed to say this, but we've worked with them for years, and stretch them out and stretch them out. And I mentioned we get paid off. The thing about farmers, I think, that I've learned, is they will find a way to pay their bills somehow. And I said that one meeting several years ago, and a farmer came up to me, and I said, maybe two weeks ago, I remember you said that about farmers, and I was really happy you said that. But it's absolutely true. When you look at their living expenses, it's amazing what they put on their income statement for their living expenses. It's much less than any of us would ever imagine being able to live on. Having said all that, VAC is going to do fine. We have collateral. Oftentimes we take the farm, so that includes the house. Nobody wants to lose their house, so we are often able to, they're often able to sell their land, their cows, and keep their house, and pay us back. And we will often stretch that out to allow them to pay us every time. We have had some auctions lately, more than we certainly normally. It was a big one. A couple hundred thousand dollars. Not that that's not substantial, but I think we're going to see more losses. But we can weather that. We have enough reserves to do that. What about the loss ratio, you know, or default? Yeah, unbelievably, Senator Starr, it is under one percent. It still is. It's still is. I'm not going to say it's going to stay there, but it's significantly under one percent. It's amazing. That's what I mean about them finding the way to pay us and pay their bills. It may take them a long time, but we're lucky we're not federally regulated, so we can work with our customers. So that's, I guess, it from just an overall management perspective. I'm not worried. I think there does need to be something done to, as we've done in the past, to help with some cash flow relief in the first couple of years to help them pay their grain bills, get their crops on the ground. That's the most important thing right now. So they've got to pay the grain bill dealer a little something so they can get their grain finished. So, James, if you don't mind, if anybody has any questions for me, I'm happy to take them. Sure. You know, I do. I'm out on the ground every day. I see a lot of stress, especially in the dairy industry, but in agriculture in general in the state. Most stress is, you know, a lot of these farms are family farms, you know, who sit down with them at their dining room table to meet, you know, their kids are playing in the background. It's in some other commercial businesses I've led to, you're meeting with them at the place of business, typically. So there's a significant amount of stress, a significant amount of stress on farms' balance sheets right now. I'm seeing a lot of balance sheets where they have not yet paid for last year's inputs for their crop expenses, let alone determine how they're going to finance this year's crop expenses, which is coming up. I was looking at milk checks yesterday, and I saw a milk check on one farm there. It's a pretty good farm, and they received over $18.50 a hundred weight under milk in January. And then saw their check for March, and it's down 15. So you can see a difference, and you can see where a farm can fall behind quickly when there's a fluctuation like that in checks. Three dollars, in a two month span. Now, a lot of farms can handle that if it was a one month thing, but what we have seen now in 2016, which was an okay year, but not great is the cycle has been going down and then last year came up a little bit, but certainly not enough to allow any time for people to catch up. So that's what we're seeing. There's a significant need for working capital, where we will have more farms that are unable to get their crops in the ground this year, and if you can't get your crops in the ground, that's what we're seeing. So we had a pretty bad overall year in certain parts of the states for crop production last year, and that has hurt farms in multiple ways. They're stretching the inventory as they have currently, which has an impact on the feed cost, but also no production if they have to stretch their feed until the fall if they're able to have another harvest. It certainly is most likely that annual production or it's costing more grain than concentrates to keep that production up. So I'm happy to answer any questions with us really where we're at today. What do you see as an average cost of production? Without factoring in debt repayment, I would say cost of production varies between $17 and $18, $19 depending on the amount of leverage a farm has, you can add $2 or $3 a hundred weight on that for debt. Not all farms have that level of debt but we are seeing quite a bit of it. So I would say with debt in there, probably $18 to $20. So when you're getting $15 a hundred weight you're falling behind very quickly. We also have should I introduce Leigh and as a former senator and now works for I've seen all of this co-op detour and all those that but maybe Leigh you'd like to jump in what are you seeing at co-op level? Sure. Thank you and thank you for having me here this morning. It's great to see you all again and thank you for taking the time to hear from us on this. I also serve on the data backboard been there for what 22 three years now. So I've seen a lot of cycles former dairy farmer for 22 years myself so I understand it from the farm's perspective as well but just by way of background Seattle's cooperative has about 370 members we produce about 1.3 billion pounds of milk as a cooperative with a processing plant up there and no common company farm store that's a bit about our business but we are seeing a tremendous amount of stress a significant number of our producers since January have gotten no milk checks at all because of the assignments and the payments that come out of the checks before we issue the final milk check to them Jameson put it well if you look at average cost of production right out of the money between $18 to $20 and it can be more than that depending on that level production for cow with a milk price so that was advanced the most recent pay period just slightly over $14 and you take $14 and you take the milk hauling away from that the fees for balancing the oversupply of milk that we have away from that equity dues we're seeing farmers with milk checks depending on if they get any premiums of what their components are in that getting that $14 since January 15 range against the most minimal production cost of $18 we're seeing a tremendous amount of stress we do a lot trying to support our members and trying to finance the input because we do sell feed, seed, fertilizer we do sell it and or we market it through other vendors but farmers do have the ability to buy it through sale and go up and then expense it out over the year but with our business at the end of the year that you have to pay it off as well because we can't as a cooperative carry that long-term going forward and that's where the full program the farm operating line program can be helpful not for us right now because we're not in that cycle with them but our farmers need to have their expenses paid off with us either by the end of our fiscal year or the end of the calendar year and then we start over again with them but a number of farmers with no milk checks farmers who have not satisfied the input costs for the 2017 crop now need to put a crop in the ground for 2018 I do see very modest improvement in milk prices on the back half of this year but it's very modest and the big drag on the market and the biggest problem obviously is the price of milk and there is a significant oversupply especially if not bad dry milk powder on the market not only nationally but internationally as well and that's what's keeping the overall price of milk down in the last ten or well that will eventually clear the market and my biggest concern is having our members and our farmers in Vermont have the ability to satisfy some of their credit needs right now to be able to get a crop in the ground for 2018 and hopefully be there when milk prices come back that's always the issue we used to traditionally be in a three year cycle we saw record high milk prices in 2014 farmers in this state and nationally responded to that that's why we have the significant surplus of profit believe it or not so we are it's almost some economists would say a double dip recession in terms of milk prices because you usually every third year if you look back over the last dozen years every third year was a low milk price but a record high on top of it so we kept stairs stepping up in terms of overall milk prices but it's tough out there there's a lot of despair our membership folks they always go on with working with farmers on an ongoing basis if you look at the loan servicing and the things that James and his team does and back just to continue to try to work with farmers so something like farm operating line program like we visited about earlier today could be very very helpful to provide some cash flow relief and it would be most appreciated by our farmers we've got probably five or six farms right now that have announced that they're going to have auctions we start to pull that up for the viability of our business and our farmers business several million pounds of milk production will be lost this year now in some cases it goes to the neighboring farm but you do see a significant loss in overall production as well which will impact our ability to serve our customers we've had the milk business a long time the difficulty of this as well we're in a long over supply that we've been in for quite a while milk will go short just as quick as it went long and then we're going to be clamoring to find milk to supply our customers and our biggest customers you know they were Ben and Jerry so they had significant means they just extended their processing facilities we supply milk to a lot of processors in this state that maintenance of that 1.23 billion that's part of our milk supply is critical not only to our farmers and our cooperative but to the processors and the customers that we supply and that the final thing I would say is there's a tremendous amount of stress and I would urge you if you want to and if you start to go down the road of supporting a program like this bring a couple three of the input suppliers in that have a tremendous amount millions and millions of dollars of credit on the books right now for feed seed and fertilizer and there's a lot of stress on that side of the economy as well as well as custom operators we're losing a big environment of custom operator in Franklin County here with an auction next week so those are the kinds of things that start to get at the core of the dairy industry in Vermont overall and it's so critical to our economy the travel and tourism industry maintaining our open landscape I know you know all this but we're at a critical point right now so you have probably mentioned the record high price just curious how high the last couple years was in 2014 we saw farms that were not organic farms and were conventional farms with good quality and good components get close to $30 a hundred we're in the norm would normally be somewhere in that $20 range now based on where production costs are between 18 and 2122 the year total supply amounted to 1.2 billion how many trailer loads were there well you do the math about 57 to 60,000 pounds a load so I know our milk was all over the place we had 50, 60 loads just from then to our plant then we had a milk that goes to a fair bit of milk that goes to Commonwealth they have milk that goes to several of the dean foods fluid processing plants they have milk that goes to the agro mark plants in all of the places 60, 70 loads maybe a day then it's seven days a week that's a a lot of milk that keeps a lot of people working besides just the farm we've got a couple hundred jobs between our calling company and the plant the other thing to note the organic side of the industry is struggling right now too we've got about 100 organic farmers the organic farmers are seeing due to over supply as well they're seeing some bases or production flows put in place on their farms as well as their payment programs $3.00, $100, so their production costs are so much higher so their P&L is not looking great right now we've had some organic farmers who requested to come back to the conventional side of the business and of course we do take them back to the conventional farmers I appreciate everything you have just shared coming from Central County we are teetering on a crisis up there if enough farmers go out to sink the whole the whole world economy these providers who are providing seed and fertilizer the veterinarians, the machinery dealers that's really the backbone of Franklin County and I can foresee a really economic disaster up there a significant amount of these farms go out and we are seeing it everybody reads the auction page and it's really something that we need to take action on but by the same token it's frustrating because there's little we can do about it some of us were talking earlier this morning about coming up with a way to regulate the amount of milk so I just have a question, I apologize for asking it right here in the open session is there any way the co-op can start its own cap on the amount of milk produced like next month we're going to pick up 5% less milk from you than we picked up this month something like that to force farmers to not be producing so much milk can they hold it together first off if we did that but what happens to the co-op can you guys hold your announce statements together what have you thought of doing that the only way a program like that could work in an ideal situation it needs to be a national program and we worked I've been working for co-ops since I left the commissioner of eggs office I've been working for co-ops full time and we spent seven years program that was a two-pronged program the margin protection program which we have now at the federal level and there was a growth management program, supply management program coupled with that based on margin and the two could have worked beautifully together unfortunately it's a story longer than we have time for here after getting into the floor twice in Washington and the Senate and passed and the house once in the past it got killed in the house the growth management piece got pulled out and we ended up with margin protection which as you know has been a very ineffective program based on the way it was put together so and unfortunately we've just seen some improvements in that program that Senator Wayne and others have worked on to get through that will help a little bit the issue of growth management, supply management on a regional co-op by co-op basis has to be a non-starter the reason it's a non-starter is we could, let's say for argument's sake based on what you said we could it's co-op pay our farmers for 95% of their production thinking that we're going to inset them to make less melt to raise the overall price unfortunately it would have absolutely no impact on the overall price amount no impact whatsoever now let's move it to the regional level, let's say for argument's sake our partner competitor, other co-ops in the northeast decided to try to do something like that it's difficult at best because unfortunately melt moves manufacturer products move all over the country, the US and all over the world so you will move melt and melt products to an area where there is not sufficient supply so that in and of itself is a problem as well and at the end of the day if any one co-operative or even co-operatives in a region were to do this the bigger challenge is when you come out of the oversupply situation somebody else has your customers and it's a complicated set of dynamics it could work at the national level we're exporting 15-16% of our total US production right now and thank God we are and if anything happens in NAFTA or anything happens with the Chinese or customers in the Asian brand we are in big trouble in this country because in 09 what really happened in 09 we had about one and a half percent of that export product come back on to the domestic market and for about 18 months every farmer farming here lost about $100 per kelp a month for about 18 months so today we're in similar situation exports are still stronger now but if anything happens with the exports we're in big trouble and the bigger problem that we have is our farmers today probably have lost 50% of their equity in their cattle machinery right now and that's what starts to create problems from any lander from an underwriting standpoint as well so it's complicated and there's no easy quick fix and unfortunately we and I used to work on this a lot in my former life here in this building and this commission of agriculture as hard as we work on it and want to try to affect the melt price the underlying root cause of the problem we do not have the ability to do that so right now I think the most beneficial thing that we could do is to support the development or the reestablishment of the farmers operating land program and figure out if there's a way that we can underwrite the cost of that so that the Vermont high price corporation can get some operating money out there to help farmers over the hump and let's hope it's over the hump and let's hope we're on the backside of this melt price situation and that we're seeing that it's going to see some improved prices later this year if they're not able to get through this spring it's a move point down the road so we're trying to give farmers the opportunity to try to move forward a little bit this spring and why I've invited these folks in because we're all on different committees and those committee members that you sit with in the afternoon most of them haven't got a clue what's really going on out there in the rural parts of the state and I think as the ag committee we have an obligation to inform our senate colleagues that how important this issue is and when it comes up on the floor if we can get it there you've got to have some support and you know hopefully the governor I know he and some of his people are also talking about this so hopefully we make this a full full effort from all involved and get this done we can't we can't drag into mid-summer we really need to fire this thing up as soon as possible for morale sake and for spring planting living come on in then talking about a subject that you might have some concern with what is the this we're talking about what is the this we're talking about you say we want to ramp this up with a particular program well yeah Joe can tell you that's what we met real early about in 2009 we did a program called the Farm Operating World Program and what it did at that point was provide money for feed, seed and getting people's crops in the ground this year we're doing a similar program but also with consolidation of some of the debts they already have on their management sheet so we're looking at doing perhaps $10 million we would subsidize their rate for two years so they have a cash flow for the first couple years so we would take their interest rate down to three and a half for the first two years three and a half from our typical rate right now is five and a half so that's a 2% subsidy and we're thinking the program in 2009 was a three-year program where things are now I think we should do a longer program like a seven-year program seven-year loans so we can perhaps not have to refinance as many later on so that's something that we were asked to put together so we'll be looking for new money to do this yes we'd be looking for subsidy money to buy down the interest rate and then some reserves because this is a very risky we're taking a great deal of risk already in our ag portfolio so to take additional risk we feel that we would need some reserve funding so it's about $750,000 or something that's what you'd be looking for when you did in 2009 was it the same idea? it was a million dollars and it was the same idea but what that morphed into was this consolidation program also that came after the operating loan program so there was a million dollars for the big consolidation program and then there was another million for the consolidation program I think right now we need to concentrate on the operating life program especially if we can stretch it out maybe we don't have to do the big consolidation program or maybe we'll do it maybe we'll be able to do it I don't know I can't guarantee that when you're looking for the money I'm sorry I was thinking you're looking for the money to divide on the interest rate to businesses and I'm curious right now you do operating loans and then you do real estate loans that we should follow yeah we do just curious how much of what percentage of your business is operating loans versus the we've done a lot more operating loans of late so what would your loans are probably at least 67% of what we do the purposes of the farm what we call farm operating loans farm ownership loans sorry is purchased as a real estate improvements to real estate including new buildings we can restructure debt with a farm ownership loan on a longer term we tend to try not to to stretch out debt over 20 years but that is a purpose but most of the financing people have been seeking recently is more working capital restructuring debt on a shorter term seven years or less and making improvements for maintenance items, machinery, equipment or purchasing livestock and how what kind of how big would those levels generally be is there a way to calculate that if you look at an average it's probably around 150 but you know we really should look at the median and I'm sorry I don't have that because some of the loans are large I mean in $20 we can do to the larger farms so they really run the gamut from a loan for a tractor to a loan to purchase to build a barn once I wish it does seem like it's kind of a challenge given the state of the industry to be somebody people who are told they're losing money every day but let me just say as I said I guess before asked about our loss rate seems impossible doesn't it? and you know it's been that way for 20 years my sample keeps saying to me because I can win this way for 20 years yes it's going to get a little higher but you know we have the reserve weekend we can withstand that but I don't think we can withstand and these are when we risk the loans because there are people that are already in a great deal of debt and have to pay off other things before they can finance their crops I will quickly mention that the other issue outside of price right now is the significant decline in the value of cattle machinery equipment especially livestock value and cattle so if a cow was valued at $1,000 or $2 years ago and the same cow now is maybe in $1,000 or in an auction scenario even less than that and so it becomes difficult to lend against assets that have a decline in value and so a program that would help them get their crops on the ground if it even allows a farm that knows that they need to transition out of milk production and maybe allows them the opportunity to get far enough along that they can do it with maybe a better market price for their animals they really are not even going to pay down maybe they're secure partners and those asset values aren't directly linked to the price of milk and what's going on in the economy so those asset values will come back and improve again the other thing I would quickly add that really helps us with our mission is partnering with FSA USDA about 50 plus percent of our total portfolio we have loan guarantees on usually about what the 85% rate so that helps us be able to stretch more than some lenders do as well because of that part of our portfolio that has FSA loan guarantees I've been remiss and I haven't introduced Cassie Thelanus who is our COO who is in charge of lending and so she sees all the ag loans and I don't know if you want to add anything Cassie I think well I think a lot of it has been uncovered as Jamison just said the challenge for us is how to approach these higher risk loans when the market is not there on the collateral we've got our underwriting or criteria and guidelines and we're already pretty much over against those thresholds without any kind of additional support and FSA helps but sometimes we're even at the limit of what FSA was doing so some of these farms maybe they want to get out but as Jamison said if we can help with dispersing that sort of panic feeling that it back it out there's no value in my cows it certainly helps folks in Franklin County who are really in an emotionally stressed situation as well that's why we're here what can we do to help mitigate all that and sort of psyche as well their emotion is I think the toughest thing to deal with it's everywhere and I know that I grew up on a farm I've lived in Franklin County my entire life and other times when these cycles come around at least the community has been able to morally support farmers who are in their area there hasn't been this racism that you hear on the street the letters to the editor the meetings that occur in the evening to point the finger at farmers you didn't see that until very recently and I don't know what to do to stop that I go to as many of them as I can and I try to keep the other side but in fact the one group that I spend most of my time sticking up for are the farmers and the co-op but everywhere I go I try to point out the overall benefit that these businesses create for the rest of the state of Vermont the money that they bring in the landscape the attractiveness and the iconic image that tourists have of Vermont is based on farming so if we lose that I know you guys all know this it's going to be devastating but especially for my county so I find that very frustrating and I think it's a sign of how difficult things are overall so what happens when they leave dairy what do you see happening to the farms in the land are they often bought up by the farmers or is this just any left to you that's often bought up by other farmers can you imagine I would say typically the value often times for a farm that goes out is in the land itself not necessarily the facilities on that farm depending on what those facilities are because typically the farms that are buying the neighboring farm are larger farms that maybe already have efficient facilities but they're looking for more problems where they're trying to manage their manure and waste storage so when those farms have been bought up by the land trust is that value still there does some of that value go away because it's only available for agriculture not for any other purpose it depends on the type of easement but yes there are certain easements where there are options in place where if it's not purchased by a family member or another farming farm then yes it can impact the value of that property for the most part though good agricultural land it's a conservative value and it's continuing to appreciate the value I'm asking because of the effect on the grand list and a lot of those farms are in current use but if they're not being farmed then they're going to get kicked out of current use so if the grand list is affected by a loss of value of those properties then we have a larger financial impact on everybody else whose tax rates can go up you typically just to that point Senator you typically find the better crop land either being leased to another farmer and at least the way current use still operates which is very important to your rural landowners if you have a multi-year lease and you do an operating farm or have them still have used value appraisals so that's an important policy well you know what most of the legislators here don't understand how a portable current use is to farm it and in fact they don't understand how important a family is to the economic stability of the state I'm often astounded at that but there are probably a handful of this table there might be a handful of senators who really understand how important it is this recent concern over water pollution is valid but I think it's done a lot to run down the image of the Vermont farmer so we don't have that moral support that background that the communities are willing to suck it up for a while for farmers to make sure they survive because it's gone and so I am concerned about the impact I also wonder who can get because I don't know who to ask I don't want to be answered I also want to I think unlike Carolyn I did not grow up on a farm so until I served in this committee in the beginning of last year I might be described by the legislature here who didn't understand a lot about the agricultural landscape and it's different than it was and I'm going to depend on Leon and Joe and Jameson to give sort of a perspective that you can look back over a number of years because I think that's important if we are indeed going to talk to our colleagues in the senate the landscape is different there are fewer farms now we can pick a number and yet we're making more milk so that's one so I guess my bottom line question is and you've seen this for the 20 years that you've been around is this the low point that we've ever ever seen and I understand we're in dire straits and I think we're going to correct that we psychologically have further damaged kind of a recovery process by wagging fingers a lot but it is sick but is this a really really bad situation we have now or have we been here before I guess? We have been here before 2009 was I guess probably at least to date was the worst year that farmers had seen at least in our modern lifetime 2018 margins are much better in comorbic costs are much better however we've seen less than sufficient margins to cover costs for a long enough period of time so that it's really starting to impact the balance sheet on farms so we're always going to go through cycles as I talked to you earlier cycle now another thing that's happening we're seeing there are other experts in the room that put a pine on this but we used to not see as quick a response to price as we see now on the other side and I think some of that has to do and what happened coming off of 2009 leading to record all time high prices in margins sure we've got fewer farms and if you look back from 1950 to today good times and bad times we've lost between 3 and 5% it's a straight line down the other thing to look at though is that we're still at 2.6, 2.7 billion pounds of milk as a state that to me is the benchmark policy makers have to look at as to the economic well-being industry the fewer practitioners obviously and that's going to continue while being a dairy is still strong and still a vital part of our economy what we're seeing now though is that more protracted period of margins that maybe in the negative 2 to 3 dollars and it doesn't take very long and it doesn't take the big farms do better all things being equal when prices are high because they take advantages of all those things that big farms do however they lose money a lot quicker than anybody else when we're in a negative pricing situation like we're at now so it's not just the small farm, big farm issue that we're dealing with right now but it's if you talk to farmers today farmers would suggest this feels worse to them at 0.9 but I'll tell you the margins income over feed cost at 0.9 went down between 3 and 4 dollars we're sitting in the 6, 7, 8 now depending on the old break even absolute break even used to be 8 in the last summer saying it's closer to 9 so when you see policy makers talking about federal margin protection insurance at the 8 to 9 margin, dollar margin level those numbers that they're basically referencing but it's cyclical it's difficult and we're always going to have cycles and that's why we encourage our farmers to employ risk management strategies too and forward pricing because you got to take advantage of those when prices are high and that's the last time people want to spend any money on premiums to protect the price out in the future so when you on any case when you suffer injury and hardship and then have the opportunity to recover you can do it then if you go through that injury and hardship again and you recover or have the opportunity to recover you can do it but you don't do it with the same degree that you did the first time you had to recover and so for that reason I'm sitting here listening I don't remember what year it was 1884 1886 it was around 1888 okay but when I became an honorary member of the egg committee in the house if you ask me what did I remember and it was this issue that we're talking about now and can I to me this feels worse as I look at the balance sheets of these farmers I think it is worse Leon's point is well taken but if you look at what's happened to the collateral for some of these loans and you know the farmers are going to depend on this at some point and hopefully they hang on long enough so the things come back and as Cassie said and I think Jameson one of the things that we do I know this isn't what anybody wants to hear but we will help a farmer get to a point where you know the cycle goes up a little bit and then if he decides to get out he can get out at a better price in addition to which you don't have everybody selling out at the same time you know I think earlier I mean that's an awful thing to say but that is one of the functions the price of cows what they were valued at was half so if you had a thousand of them there's a lot of equity there but if you lose half the value and now they're only worth half it kind of puts you in a bad spot without even all it did tell that ended up years back when we lost farms a lot of times it would be 50 cattle farms or 60 cattle farms and now we're losing that middle range that 5, 6, 700 so when you lose that you lose a big that's 10 10 little farms so the shock is going to be harder people don't come to Vermont to see brush like the avenue Hampshire growing up in their field so they come here to see the open spaces and the cows out in the pasture and you know we lose a lot more than just that farm that the farm comes so anyways we better wrap this up so these guys can go back and figure out we have two colleagues to talk to me right now I sure do thank you very much for having us I just was in the hallway commissioner did that go well yes we've got the administration that's terrific that will be thank you thank you very much everybody probably Tuesday or Wednesday next week we'd be happy to provide you with any information or combat or whatever you like thank you thank you so much everybody thank you thank you thank you again we've got to try to figure out how we can get this done sooner we're going to go back and actually mock up all the things that we would need to mock up welcome y'all Brad and your Jonathan Cheever and Louise Louise Calderwood with the Northeast Agro-Business and Thief Alliance we've got our crew Brian Collamore representing the Rutland District and Carol and Brannigan from your way up in Brannigan where's she from Franklin County now I'm Bobby Starr Francis Brooks Washington County welcome to the committee and we're dealing with 915 pollinated protection pollinated protection building and I guess we wanted to hear from you folks a little bit about treated seeds and untreated seeds and we need all education all right well I may lead off I'm going to go ahead and lead off and the three of us will be tag-teaming we'll listen and try to get educated okay all right since I'm skipping my small business management class this morning the students are very happy so I'll educate you folks instead pollinated protection bill first of all we want to thank you folks you have taken an amazing amount of testimony on this bill well-rounded testimony and we really appreciate the time and attention that you've given to this bill what we bring to the table looking at the list of folks that you have heard from so far are Jonathan and Brad actually sell the seeds make the recommendations to the farmers and interact directly with the farmers in the management of their land so I think this is a very important voice that you have at the table and we really appreciate the time the second point I'd like to make is that we certainly have pollinators a wide range of pollinators rat tailed maggots grow up to be pollinators but with this bill we realize that we are looking at domesticated pollinators at the bee population bees are one of our oldest domesticated livestock if you look at it and so we can talk about protection but we can also talk about management when we consider management of these domesticated bees as we would consider management of any domesticated livestock and so in a management setting we're looking at the broad range of management issues think of it we've been sitting here talking about the dairy industry it's no different than a dairy cow genetics nutrition we really need to be looking at the bee pollinator population from a management perspective so with that I'm going to pass this over to Brad and John to talk about their interaction with farmers the actual use and management of the seed part of it and then I'll come back around on some other issues within the bill so if you don't mind can I go first? I guess what I'd like to do is basically a little bit of groundwork we talk about nicotinoids and their role on seed I guess I'd just like to talk a few minutes about some of the value some of the reasoning why we're here to talk about it, to try to preserve and have this as a tool for our producers back in 2006 a neighbor of mine had planted us 70 acres of corn we planted it we went out, we looked at this field he was happy the week before he said this is a great corn crop we get out there 70% of it's left basically it's been cut off laying right on the ground dead it was an infestation of black cover this was back prior to the seed treatments being the way they were so he basically had to go in and replant that crop 30% stand the yield would have been well under 20% of what the potential was and basically the ability for him the following year to take advantage of this technology would have eliminated that loss that potential yield drag so we're not talking just a little bit at the end of the year having a few bushels or a few ton difference we're talking about some pretty substantial insects you know we a little history on some of how that came we used to use a general product something similar like wars band or something where you would either broadcast that over the whole field you would band it over the top of the seed the product was used in pounds per acre and it was basically just spread out there and then sort of that technology involved into you would take a packet a little packet whatever something you dump that into your hopper mix it with the seed and that's how you got your insecticide fungicide control basically that was just a loose powder that got dumped in and mixed together and then they came out with these seed treatments were basically from the seed producer they would come pre-treated with these with these controls so the formulations when they first came out they tended to be a little sticky but I will tell you now they changed drastically they're a lot harder coating they aren't as sticky but they basically have been able to refine their technology in how they treat these seeds to better prevent the loss of what you know really the producer wants to be kept in the furrow you know and so they evolved from a broadcast over general application over the whole field to then getting put right in the furrow so you open a trench up you drop the seed in basically we're putting that product right in with the seed and then covering it back up so it's not exposed to the surface you know and there's a little bit of contact with maybe vacuum or things like that but the technology has really come a long ways in basically protecting those species and those plants you know they have a wide spectrum of control whether it be wireworm white grub which also includes the Japanese beetle larva black cut worm which I talked about in my neighbor major devastation and it has a broad spectrum of control that basically covers early season you know we're not looking for this stuff to carry it through the plant once it gets over a couple three feet tall you know it's really for these early seedling issues that when the plant is really tender and it's just no different than any other young livestock you know you can't overcome those early infestations diseases and insect damage you know it's really treating that plant healthy from the very beginning you know and as we talk about just for the last presentation how much farms have been put under pressure for water quality you know they're being asked to do no till, minimum till cover crops all these things and there's one common factor that all of these things do leaves more residue on the surface and more insect pressure because instead of turning the ground over and burying the larva and eggs and things where they can't come up we're basically leaving it all on the top so every year this is becoming a perpetual issue that producers are having to deal with in order to protect the water they're asked to leave all this stuff on top which then just promotes these insects and basically the cutworms the wireworms all these things that affect early in the season are just magnified so these nicotine oids have become really important in trying to combat those insect pressures in order to make these practices acceptable or work for these producers to still grow and maintain their crops and then we talk about new and emerging markets you know there's a new craze or a new word on the market non-GMO well the only other option that these non-GMO crops have for protection is some of these early season seed treatments that allow them to come up because the other option is to basically have it in plant which we carry later in the season but doesn't always help early when the plant's young and I'll just touch a little bit Brad will go more into it but we've always had these options for non-treated seeds it's always been something that someone wanted it we can work with it but there's a reason that this is such a wide adoption because basically it is a risk management if you're with milk pricing and maintaining profitability and sustainability from farms it's risk management you know it's that like I told you with my neighbor that was a first year cornfield insect pressure is not usually an issue you turn over the sod or you kill your sod from a hayfield and you go and plant corn in that's the year you can expect that oh you know it's kind of a gravy train the insect pressure isn't there but I just told you we understand that first year so you know there's things that you can come up with to try to mitigate risk and one of these is a very important part of it so I haven't heard I don't think before that with no tell you've got all these little critters up on top that are running around I don't, we haven't heard that I don't think well that's because you haven't spoken to the fellows that are working with the farmers managing the crops we basically are asked by our customers to come up with solutions how do you as these practices change what do we do to still mitigate our risk this is definitely one of the major ways that we can do that with them and basically gives them options to still do non-GMO do GMO or do all of these different things that they want and ultimately they want water quality and we're going to adapt these things and we want it to be successful so that we can get our end goal yeah thanks to piggyback well John is saying of course he's young and he has been around like some of us know before the seed treatments came out we were buying trail loads of insecticide the farmers were putting the seed in and they were laying down a 10 pound track of insecticide on every acre and I don't know what your perception is but I'd rather have a seed in the ground buried than to go back to adding 10 pounds of insecticide right on the surface and every other product you don't have to go 10 you go 3 and 4 of some other products we definitely don't want to go back to that the seed treatment of the old day the farmer would get that packet of Dias non and Lindane, everything's been taken off the market now he's still a captain and he'd sprinkle it on the seed and he'd stir it around sometimes he'd do a stick a lot of times these farmers would come out and they'd have all purple hands because they would mix it up this way so they would mix in all this chemical in the seed and that's the way it used to be can I interject here Brad is using the pronoun C I was 8 months pregnant doing exactly that mixing the pink insecticide with the C-corn with the stick 8 months pregnant now that kid's 26 years old now is he doing okay? maybe not, I've been impacted by that but it's not always he it's she's out there doing that too so I looked this morning and I'm using this with 5 seed companies 4 commercial seed companies the 4 major seed companies I do they have 343 varieties of corn seed available 343 for 4 companies and there's I don't know how many seed companies are out in Vermont there's probably 10 so let's just say everybody's got the same amount of pioneers certainly got a huge profile about DeKalb and Northrop King and Seedway and Cropland and I add them all up to 343 different varieties of corn seed that we have available for the farm for them to pick and choose or we advise to do that all of these varieties are GMO varieties non-GMO varieties they're Roundup Ready, they're BT resistant or they're not one thing they all are is they're all treated 100% of them are treated all treated seed 100% I've talked to all 4 of the companies is there any option for treated seed? untreated untreated seed excuse me untreated seed one company says we can take the neonic off of one seed because we sell it in Canada so we have one company that would give us treated seed it would still be a treated seed it wouldn't have neonic but it's the only one available the other the 5th company that we deal with is an organic seed company I think Jonathan deals with it too it's a very small organic seed company they have 20 varieties of seed they don't have any of the high-tech stock it's old, old technology it's old, old breeding I don't want to have to go to the farmer and say well we've got all this new technology enhanced yield enhanced feeding ability enhanced standability, coal tolerant drought tolerant I don't want to go back and say well we went back to 25 year old corn it doesn't have any of these new advantages that the new varieties all have and those those advantages a lot are just a result of traditional breeding a lot of traditional breeding some of this stuff is traditional breeding some of it is with GMO GMO when the state wants to no longer have brown dirt out there to follow they want a color crop on it they want green, something growing on that field 365 days a year just like John brought up that brings up a whole new batch of insect problems next spring you've got soil that's growing in there that's where they're overwintering in an off-tail situation it's very hard to get an insect control product down here the only way you're going to do it is you're going to have to do a broadcast spring so you're spraying everything versus trying to concentrate it on a seed or in a band it does create I remember when everybody had to have a manoeupe and you had the empty manoeupe you couldn't start until the 15th of April because we had frost on the roads and the smashing up all the roads and all the talent managers would get upset because the roads would get smashed because one thing creates another issue this no-till thing is creating something like that so to lose a treated seed now would be I don't think it would be a good idea yeah what about the one product do you have any requests for that one product for the only organic growers I cannot remember and I've had it since 1986 I can't remember a customer coming up and asking me for a treated seed I'm sure it's probably happened in 32 years that I've owned the business but I don't remember and the organic seed company is a small organic seed company I'm one of the largest organic seed salesmen in New England I own 250 bags and I have a heck of a time getting 250 bags so it's you're optionally going to be incredibly limited if you do that but it is available what about the product that they use in Quebec or Ontario with that neonic pot I actually don't know it's probably some of the old chemistry or it's just a fungicide or it could be just a fungicide that's the other thing that with these treatments you're not only getting an insecticide but you're also getting an insecticide a fungicide and now nine times out of ten you're getting a biological already added to that seed treatment to enhance biological growth and activity around that seed root to enhance uptake of nutrients all of those things are packaged together and when you get them treated you're not just missing the insecticide portion of it you're also injecting the fungicide which you all as gardeners must know damping off, fusarium all those types of things that those seeds need when they get adverse conditions you plant it it's dry and beautiful and with Vermont weather you get an inch of rain in three days that's ground stay saturated you need something there to protect it so you have your fungicide and these biologicals and other things that really play a major role and some seed companies are actually treating them with micronutrients so you're getting beneficial zinc more on some of these others and coating the seed with it which is showing quite a yield increase we're really kneeling down to those exact areas where you get that seed it germinates in that root zone it's the most efficient utilization rather than some of these broadcasts trying to get it so if we get untreated seed then you treat the earth on top but how do you treat the earth on top if you use no-till well first of all all the farmers that have taken off all their insecticide boxes 20 years ago every corn plant had a separate unit in the back of the corn plant where you dumped your insecticide and you had a tea bar and that product on there so first of all all the farmers would have to go back to finding those insecticide boxes which I don't know how readily available they are when you've got 12 real corn plant is now and much bigger and that's very common now there are some liquid insecticides that can be mixed if you go in furl or a tea band which means you're putting a band right over there so you're not treating the whole soil you're protecting just the seed to which is on both sides of the seed that's what you're protecting from the insecticide from the insect you know it's probably going to be a $25 per acre increase in product in product costs to protect that seed versus nothing with a treated seed there's no charge I'm sure it's built in it's in here for $5 going to get treated you know there's no it's not sold at least in the company's idea don't break that down but if you eliminate that seed then you are looking at another like I said I don't have $20 $25 per acre increase and not as effective and do you sell seed corn by the bag or by the pail all in a count by the count yeah by the count so every bag nowadays is $80,000 kernels so a bag will plant about two and a half acres of corn the average price of a bag I'm going to say is probably $250 is the average price per bag so it's not a cheap investment for farmers it's a major investment for farmers and then if you said okay you know so that's $80 an acre for one seed and then you say you're going to throw another $20 in insecticide on top of that because you can't use the treatment you're still going to have to treat because you've got the fungicide problems regardless of the insecticide you're still going to have to do something about treating for fungicide and why would that do to the pollinators the bees I mean the doing it on top you wouldn't be able to do a fungicide on top but in the end if it's annoying I'm not a scientist but just having it and actually having dirt over top of it I mean that seed when the farmer is done his goal is not visibly being able to seed that seed he wants an inch and a half to two inches down covered with dirt versus an application of fungicide over the top would be on the surface or insecticide which is what we're really focusing on here the insecticide will still be on the surface as well the other thing I might add to that all the seed companies that I deal with we always bring in an extra 20 to 30% more seed than we've got ordered for or that we think we're going to sell or hopefully we can sell because you never know what the spring is going to be you can take corn out there to the farmer and he thinks he's going to be in the field the first of May and like last year he got in the field the 10th of June while the 100 day corn that he was going to plant went to an 85 day corn in the 10th of June well guess what I had to go back and get that 100 day corn I had to bring in an 85 day corn and the reason that we always have an extra corn is for that very reason so that we don't have to wait for this corn to come out of Indiana or Illinois so that we've got some on hand that we can do the substitution now the nice thing about all the major seed companies is that Brad Laws has got 700 bags of corn seed left over well that all gets shipped back I don't pay for that so one exception is the untreated seed company I own every bag and that bag if it's not used I own it there is no return for any special ordered seed whether it's organic or whether you could call and say I want 500 bags of untreated seed the moment you say that you own it you don't sell it so if you've got 500 bags at 250 dollars a piece sitting in your inventory and the germination is dropping because we don't have control storage like all the seed companies do and when that germ drops guess what you have to drop the price of that seed to the farmer about 200 and some dollars a bag how much is untreated your untreated stuff is about the same untreated stuff all within 5 bucks I mean treats corn seed you can buy different varieties of corn seed you can pay 180 bucks a bag or you can pay over 400 dollars a bag depending upon the traits and the companies and all this other stuff so I say an average of 250 that's probably what it is but you can easily spend over 300 dollars for certain varieties of corn easily just done every day I'll be done questions do you are you still using farmers using much atrazine anymore yeah atrazine is still still used on a lot of product atrazine is one of the acre no not every acre certainly not but it's one of those you have to take an asperin the asperin house atrazine is similar you put a little bit atrazine you use it now in pints per acre versus again when I first started we would be doing 2 or 3 gallons to the acre I think the message is an important tool it's totally yeah it's still a base to a lot of chemistry the other section of the bill that we'd also like to just reserve a few minutes let's make sure we get all the questions asked about the technology because I think this is useful for educating you just a few minutes to also talk about section 4 of the bill which is the study section the agency of ag section yeah do you folks get into anything to do with tile drainage do we have anything to do with it well what we've heard in our summary of our testimony is by injecting or using these treated seeds welcome Bill thank you um they're in the ground and what somebody testified yesterday or one of these is that if you test the outfall you'll find some traces of of these chemicals going out the outfall from if corns planted on these fields I didn't know if you'd heard anything from any of your farmers in regards to that or not I am not my institute just came out with it really and I don't know if you've seen enough they've come out with a 2-3 year tile study and I believe and I may be incorrect here but I believe they touched on some of that chemistry that's on that water well we're going to have them eventually we haven't heard from them I just because that came up in some right testimony didn't know if any farmers had said well you know I've got a whole problem Bob it's also okay so we go right back to the fact you want to treat a seed you want to put a seed every 4 and a half inches that's treated or you want to go back to 15 pounds of insecticide and not have the same effect that's right you do one thing to improve something and then the something creates a whole new problem so then you have to do something else and and believe me this cover crop that's being promoted has created a lot of other issues that the farmers get a little bugs in the air and stuff and a question I would ask on the tile drains if you do get a chance if the Neonicotinoids are being measured in the output from tile drains is that output biologically doesn't have a biological impact on pollinators it's one thing to be able to measure something and the other question is that concentration that's found what is the impact I don't know the answer to that but that would be a question I would ask if I was sitting in one of your seats look at miner over here hopefully they do do a good job on there they're analyzing and testing of drainage it's a very informative report they presented at miner a couple of months ago it was really a lot of good information real recent very just as new you had something well I want to make certain you've asked all your questions of these fellows on the management of the product because you've got them here I just want to make certain all your questions are answered on that I I Brian Carroll Anthony Bruxy you're good you're good then the closing section of the bill section 4 section 4 of the bill and that addresses the request to the agency of agriculture for the study and you've got Carrie sitting looking right over your shoulder there I'm certain you can speak to this but my understanding is that a number of the things that are being requested in this section are already being carried out by the agency they could be carried out at a different level with sufficient funding but expecting existing staff to expand on that capacity would only require the agency to move resources from other programs that are already in existence so in order to carry this out at an elevated level is going to require existing staffing which equals more it's going to require additional staffing which equals more money the other piece to understand with this is that the agency capacity when the owner this domesticated livestock makes a phone call into the agency with concerns around bees the agency has the ability to work with them is the concern because of verroa mites is the concern because of forages genetics or pesticides in the case of pesticides I believe carries it a 20 point protocol that you folks have in existence that you can follow it's on the house and website I'll make sure it makes it to this committee okay so there is a protocol in existence if in looking at the management of these critters are like oh gee we think the issue with this hive is because of pesticides and then I'd like to go back again to some of my opening comments and I know Brad has some thoughts on this as well is that really we need to be looking at the overarching management not protection it's overarching management of these animals and all of the things that impact the well being of the animals of the pollinators so I think just focusing in narrowly on the pesticides the pollinator protection committee pesticides was number four out of their five issues we have concerns we just have a lot bigger issues to focus on with pollinator protection than the use of neonicotinoids and you had some issues there as well as far as some of the language in section four specifically well I think that word contribution is a pretty broad word that can be used you know I'm just concerned that you could say well neonicotinoid contributed to the potential B reduction I'm concerned that there's no limitation on that and there may be no basis in science on that but it may be assumed that it might be doing that because that's what all the noise is about that would be my concern is that you would come up with a decision not to use it because that triggered that contribution language you know usage of neonicotinoid means unsheated seeds no I'm just trying to say if you you said you were concerned about how you affected the usage of the insecticide does that then in turn mean no insecticide then you're limited on the type of seed well a farmer is if they've got the situation where they have an untreated seed they're still going to treat there's going to be a different manner of treatment so the only class of people that don't usually treated seed are the organic corn growers and that's a very small portion of the corn acres in the state of Vermont so they can get what they can get and that's you know their yields are 50% of what a conventional farmer gets for yield generally so sometimes there's some exceptions but I guess I'm not quite sure what you're asking but I mean they're going to treat if they buy an untreated seed then we're going to go back to 30 year old technology and the way they're treated which isn't anywhere near as safe for the farmer or for the environment or for the environment you're spreading the product on top of the ground rather than coating an individual seed so birds all kinds of animals can get into it if it's on top I don't know the biological activity of these products and other critters Kerry would know that makes them grow healthier and stronger no we'll call it it's got to be some positive talk so anything else from me and the members that's sort of a quick thing sort of a comment I think might be a question but Louise when you were talking before you used the word domesticated in much times and I understand what you mean but I've brought a concern not just about domesticated bees but about wild bees right and I think that we do need to be looking at the entire population of pollinators I agree with that and I think my very opening comment was that pollinators we tend to think of just bees we've got a whole host of insects that are pollinators that aren't in the bee family and so it's very broad which is why I feel that we need to be looking beyond just this very narrow segment of protection from one technology to very broad management so I think some of the broader issues that have been looked at of sufficient foraging capacity for the wild bees, for the wild pollinators in general is very important but when we're looking at the domesticated pollinators I think we need to be broadening our management concerns that's a pollinators we've got an amazing list of pollinators anything else anything else so you did testify you both have untreated seeds or sale if somebody wants to buy them they're five dollars roughly a pack no you can't say that because it could be a hundred dollars a bag or it could be fifty dollars a bag more expensive the thing about corn seed pricing yes sir so the corn seed pricing is based upon what traits it may have it's based upon when you're dealing with a hybrid corn you're dealing with a male that may produce a very very small portion of seed so these hybrid seeds if you ever go to a seed foundation and you see these seeds the corn the kernels that we're planning are coming off these little dinky ears all deformed in everything it's terrible you think how is this going to produce me a decent year so if you take a farmer in Indiana who is producing 250 bushels of corn per acre if he does foundation corn he may be producing 50 bushels to the acre 30 bushels to the acre so for that farmer to grow that crop that's producing 20 bushels the acre the seed companies have to pay him 10 times the value because that's if you went to commercial corn they have to make sure his income is adjusted so some of that comes into play with the pricing of corn seed so you can have a corn seed has the same traits whether it's round up ready whether it's conventional with no traits that can be $50 difference in price because of what the availability so untreated seed isn't necessarily cheaper like I said I can sell you a full treated with all the goodies in it for $180 it's got some other issues with it or I can sell you untreated corn for $225 so in that situation it's $45 more a bag but if you were to take a specific variety of corn seed and buy it treated untreated with the cost being a few dollars less for untreated I know that first of all they're not going to give you that option they're not going to it's only going to be a limited it's going to be a limited number of varieties so a farmer may not be able to buy the best variety and we don't know when we go to the farm speaking for myself of the 343 possible varieties you eliminate some because they're too early or too late we certainly eliminate some because I'm not going to try to sell a $350 bag of corn seed because most of my client tells in Addison County it's heavy clay and they can spend $350 for a bag of corn and still get 12 ton of corn silage or you take that same corn seed and take it over Connecticut river valley and they're going to get 25 ton so our clay has limitations so we try to make sure that we don't say you need to buy a $300 bag of corn because it's not going to be any of its own yield so it's not everything is not black and white it's not like more money is going to give me more yield it doesn't work that way at all so we try to screen everything and say well he is 30 varieties that we think are appropriate for your area and that 30 varieties changes from Addison County to Rutland County to the Connecticut river Jonathan has different varieties and I do you know something like that you got 30 day corn don't tell the sweet corn guys it's got that cross comes late and comes early too apparently well anything else don't lose it but again I just really want to thank you folks for listening to the people that are actually working with the farmers to manage the crops well thank you for your time your time is probably a lot more valuable than that this time of year is what it will be surely good to catch your the farmers usually do their seeds in the fall or winter do you have any more here it varies some producers are right off on it in the fall and some producers are yeah I'm going to plant next week can you read me some questions or I'm going to pull my planter up today or I'm going to have corn cheat to go with that we probably sell 20% 30% of the corn that we sell it will be the day they pull the corn planter out unfortunately and so that's another reason we've got to have an inventory there now we start taking the seed companies give tremendous cash discounts and they've obviously got a margin so they give farmers tremendous cash discounts if they'll order their seed in September or October or November December they'll give cash discounts that we pass on and we send to seed companies so it is a whole range majority of the corn is majority is ordered before March would have been ordered last month but there's also a big chunk the good progressive farmers will usually order in the late fall and again because you're dealing with a variability in supply if you've got a really good variety well everybody else knows about that really good variety and that supply may not be available until March or we've got some some new stuff coming out now that the seed company is doubling in production every year for seed production and they're still sold out so there's new stuff coming in that's why inventory and all this other stuff comes into play we've ordered the day that the seed company opens up its order book we block order a lot of corn seed so that we try to get what we want and we have it we have it and what you don't have to answer this question if you don't want to or if you can but I was wondering what do you find the well-being of our ag community in your two respective counties do you hear anything on price and mill I think this is the worst depression that I can remember we the farmers this has been for me personally this has been the slowest two months three months that I've had since I've owned a business from memory farmers aren't even calling asking me about prices they are just they're in shock they don't have a clue how they're going to do it I just had one of my salesmen text me out there that one of our farmers is not going to plant corn next year because he can't afford it he owes me $25,000 from last bank he gave me a $5,000 check he's done her plant corn this year because he can't afford it I think it's as bad as it's ever been out there so Brad I'm just going to lead you a little bit here in O9 the price of milk was low fuel and fertilizer were a whole lot higher than they are this year so the margin that the farmer had in O9 was a whole lot worse than it is this year the price of milk is a little bit lower this year but fuel and fertilizer are pretty darn cheap they had 08 they had 08 they have not had anything good since 14 so that's my question what makes it different to me that's the big difference that's why everybody tells me it's worse no one said it's worse in the fact that since 14 guys in O9 expenses were high cash flow was non-existent but they had just come off of good now these guys have not it's either worse most all farmers are on cash basis so the year end they'll prepay for some of their grain prepay for fertilizer so they don't have to pay up the sand I normally have 30 to 35 prepay accounts we give them a cash discount for Bannahead we give them a very good price on that so I normally have 30-35 this year always well and that's the way it is out there we haven't progressed to a point where we're in good shape but we are working on a program the legislature and the governor's office to try to make some money available so maybe that guy that called to say run the plant one might be able to if we can get our stuff well that's it we've got to now we can do it rather than waiting until we do the budget I had a call last week first of last week good farmer he says I just got my milk check for last month it's $84,000 less than it was a year ago same number Cal same quantity milk being shipped out $84,000 that's one month that he's down those are big numbers yeah so anyways thanks a lot guys if y'all if you think of anything we should know feel free to call in time and thank you Bill did you have something well the only thing I was going to say about what changed you know we've been in a three year cycle since 2000 every three years we've seen that cycle repeating itself in 2014 we had a big year but I think that was an anomaly China went home with their checkbook because they overpopped they packed their warehouses full of powder and everything else and they didn't entirely forget about us but they didn't buy a lot of drugs for a couple of years and we got hung out there and we had a 17% export market and we got hung out big dairies geared up to produce to produce for the export market and without that export market you look at it like this for example last year this country produced 215 billion pounds of milk and with a 17% export market it worked but with a 13% export market with a 4% of 215 billion pounds that's our excess how did that happen Russia had its trouble with Ukraine the west imposed sanctions Russia closed its door to the west European Union the E32 they produced 360 plus billion pounds of milk here in the 32 countries 260 billion pounds Russia was their chief export market so where did all that milk go and they gave up their management wherever you could find home some of it came in so that really that really hurts so now what's changed we're not sure we now know that it's not a three-year cycle and we're not sure how long the cycle will be and that's why the environment is worse how long is the cycle going to be we're having talks with Mexico Canada over in Africa yeah you like what and the president he's not willing to entertain negotiations too far I guess but that could have a real impact on us you lost both of them it could come down to the point where it could destroy the industry in this country people wonder because in Quebec we talk about Canadian farmers right across the border from you know they're doing good but I was Americans don't realize that the Canadians buy a lot of stuff from dairy stuff from us it's amazing thousands and millions of pounds of product they buy from us but they keep their so their farmers do do the fraud they play some games you live so close to the border you must be able to hear the frogs say oh yeah so I sit on the porch and listen yeah thank you Bill Aaron we got Aaron here Peter Andrea's on too I'll take 30 seconds up on the pollinator bill if you have 30 seconds for the pollinator bill I'd like to just offer a couple of things all four in question I know that these guys are waiting thank you thank you you've heard a lot of testimony yourselves I've heard even more some of it repetitive because I heard it in the house as well we're living in a world of bad choices at this point really bad choices really bad choices we have worked ourselves to a place where we are having a balance this against this and neither one is good a couple of points I wanted to respond to we do need to look at this holistically it isn't just about managed bees and managed bees aren't like cows they don't stay put you know they go places they forage and you don't know exactly where they're going they know some things about how far they go so they're exposed to a lot of things in the course of flying around and we have all these other pollinators not just bees other creatures that pollinate and we also have this very complex web of life in the soil in the water that is very much a part of how agriculture works how we produce food how we maintain our landscape how we have a lot of the things that we think are important and I think the one thing I would say is let's focus on long term thinking not short term thinking it's really hard to do that because there's a lot of short term immediate crises looking us in the face the economic crisis and we start thinking holistically in long term we will we will steal the future from those that come after us and I don't think we have the right to do that I don't think we do I think we have a responsibility so I would ask you to do that and I would offer you just two things this is age 688 which was the original pollinator protection bill as you think about what you're going to do there's language in here so you don't have to spend a lot of time because it's already been drafted and vetted and all that stuff so I would urge you to and she can make copies for anybody and then if you haven't had a chance to look at this this is the pollinator protection committee's report it's really comprehensive they put an enormous amount of work into it there were a lot of really smart people with a lot of experience who contributed to this so there's resources here too the last thing I would say is the two things that they you know they recommended very strongly was to ban the use of neonicnoids on ornamental plants that's not agriculture that is another that's in the bill yeah and to designate neonix as a restricted use product so that only people who have the training and know how to use them are using them it carries idea of a public information campaign and so on and so forth is really important because it's very true that a lot of people out there have no idea what the impact of these chemicals may be so I would just urge you to think about those is that in either 688 or it is in 688 and there's language about this in 915 but I think going as far as banning the use on ornamental plants would be a really good step thank you I appreciate that and would you like me to leave these with you I know she has access to them but I haven't right here I'm happy to give them to you I didn't kill the trees by making copies for all of you I didn't want to assume that you'd want to read them thank you that copy room yeah I'm sorry well if they had a place self paper 663 Aaron you had a few things you were going to do for us sir well maybe we'll do it we'll do it again from you first thank you that copy is Aaron Adler Legislative Council that copy is number community draft for H663 draft 3.2 so there's a big couple there anybody else interested I think you can take one I think I'll take it all the way this makes a few changes that are bolded the last draft that you saw which was 2.2 first change is on pages page 4 to the top of page 5 this the last draft section 3 and 4 related to both to Act 250 I would have amended this Act 250 statute and adopted a simplified application form and then had a schedule for doing that this is the alternative is suggested by Chair Schelling and my understanding is that NRB is comfortable with this language just section 3 would say simplified application report they asked for an honor before January 31st of next year to submit a different report on its plans to design a simplified application under Act 250 the Board shall submit the report to various committees listed there including this one so that's that's the change that I have made and then the next change is section 4 which is Peter's Day Act 250 get out of the hot seat and let them in unless you have questions on section 3 well why didn't you swap sections because I know Act 250 and Act 250 then we would all be in the same boat together okay next time thank you that I appreciate that did anyone have any questions that they are on this not on what he did but I did have some notes back on page 2 but we might not have actually asked for these to report so I don't know what we did about the overnight stays repraising at the farm stays you know I didn't know about that okay I'll up here do you want to do your first or how do we do it well it's just farm stays is a phrase that she used on a lot of different things and so we'll do Peter okay Peter Griffin office of legislative we'll talk to you about section 4 on page 5 this language might look a little different than what you were expecting to see a lot of time I was in here I had language that kept the current definition of house site and then added some specific instances where additional houses and dwellings would still be included within a single house site since the last time I was here now I had a talk with Doug Farnin from the tax department and Doug pointed out that use base definitions like that are a little tricky in current use if you remember the uses were within a certain distance 300 or 100 feet of labor housing the problem is that that language wouldn't work fine the first time it needed to be implemented somewhere so you had someone come to your committee who had four or five dwellings in a small area and they were the question was to me to take 10 acres out or could they all fit on a two acre house site so Doug said that kind of use base language would work for an instance like that to have all that dwellings be on a two acre lot but then that person ever sold that business and the use of those dwellings changed they were no longer being used for an accessory farm business the question would become well do we need to take eight acres back out of current use and when you take eight acres back out of current use because now it's not being used for a farm business anymore it's being used for something else is the land use change tax due on those eight acres and the land use change tax is 10% of the fair market value those eight acres are right where the home site is it's probably relatively attractive acres it could be a bit of a liability so Doug and I talked a little bit about well you know one option you had is you could try and tinker with the definition of development in the current use statutes and the definition of and the language of the land use change tax but that might be getting a little broader than what I used to the committee to be looking for and so what I talked with Doug about and I mentioned it to yesterday at the Saturday start was the tax department said that they could take a crack tackling this problem through regulation and then come back to you guys in January next year and show you what they've got and from your point of view what they were doing was problematic you could consider a legislative fix at that point so what you now have here in section four is language that's requiring tax department I'll just point you to the line real quick the tax department shall adopt rules regarding the definition of house site and your statute to ensure the two acre exclusion is applied consistently to parcels that include more than one house or dwelling and on lines eight and nine the rules shall specifically consider the application of the two acre exclusion to farms with on-farm accessory businesses and then this just sets a date on who gets the report on number four January 15th, 2019 department tax shall report to the senate committees on agriculture and finance and the house committees on agriculture and forestry and ways and means so what would happen could you talk to a doctor right behind you now did I talk to him directly? no I wouldn't want to know if you talked to him oh sorry I thought I heard someone come in and they'd say I'm just wondering what might happen to the situation that we already have at hand about having to remove those five extra five acres from ag somebody's requested that the sheep place, the lane place going to take five more acres out of the farm and put them with those old cabins is that going to be on hold until we get this report back or I wouldn't know the answer to that question don't know that answer don't know the answer why don't you sit right up there you two I'm sorry trying to figure this situation out so I like this idea you guys try to figure out how to deal with that the only concern I personally have is why I just skated so what will we do with the guys five acres? so for the record another farm policy director and tax condomist alright so to answer your specific question what we well with the generality so what we generally do an appeal where we are not we are aware that there is a legislative change coming up or a regulatory change being considered we will generally hold that appeal process so we may not require that removal from the grand list so we would keep that open so the hard part with current use is that everything is isolated to each grand list year a decision has to be made in December is it in or out to finalize the grand list with an income tax appeal it's not pleasant but we can hold it open for longer legally we don't have a specific date where we have to drop that other than statute of limitations expiring in our authority to pursue something expiring without a judgment our policy is that when we know that we are looking at changing something and we have a related appeal we would hold that appeal so this what we have now what you folks came up with section 4 would give you until next January to come up with sort of a little plan to how to deal with this then it would allow the on-prime state people to maintain their little cabins as they are and allow the five acres that's in the ag to stay in ag until you come back with this report and we determine if that's good, bad or different and we have a necessary adjustment which I didn't have time to transmit in that the rulemaking authority in this situation is actually with the current advisory board so we could be charged to work with them but they do own the rule and we have to work through the advisory board so right now the land the tax department shall come up with the rules but what makes sense to me it needs to be the current advisory board or some other issue that you use in tax to decide something like this so that's a difficult question Mr. Chair technically speaking because we have conflicting superior court trial court decisions related to this matter the department could decide to change direction without putting in a regulation I think from a good government perspective we would prefer not to do that without because of the conflicting trial courts we prefer to give it a public comment period and that could go on for another year after next we've been running out of years here before I'm getting at wouldn't that take another 6 or 9 months? Coincidentally our new PBR director Jill Remick has actually had luck in the past shepherding things through the our car process she does have experience updating regulations from her time at the agency of education so we are optimistic that while we haven't always been good at maintaining the status of our regulations we do have expertise in place right now that will help us move more quickly and we do recognize as the policy director for the department I recognize the current situation as creating an absurd policy outcome and that's what drives the courts mad that's what drives the legislators mad and that's what I want to fix yeah what's the committee think about this direction it's good make sense I don't have a problem with it Anthony good no I don't have a problem I once we pass it if anyone assigns it you don't foresee any problems with it flowing once it is up for action I don't believe so in considering this the one wrinkle that I would hope would not perturb anyone would be that because it involves a board as opposed to an apartment there are associated gradient costs with calling that board together right now twice a year so the cost of that board is negligible in order to move this through we would need to meet at least a couple more times maybe four meetings or five meetings in a year instead of two so there would be a de minimis cost to calling this board together to try to get this regulation updated yeah do they work on your issues this board do we have to appropriate money for them to or do you pay them out of tax I I don't have complete certainty on that I believe that we pay them out of tax we're charged with administrative support for the board but you can call the meetings if you need it as long as we convince the chair there was recently a new chair appointed by the governor so as long as we can convince him to call the meetings so just to clarify what will happen is in the middle of January on the 15th next year this group will come to us it's us and ways and needs in the house Senate committees on agriculture and finance so it's the same committees on both sides agriculture and finance here and then egg and ways and needs upstairs so you're going to bring those four committees your report on how these rules should work so does the legislature have any say on changing them at that point or is that going to be what happens so the way it's going to work the way it's going to work is they're going to come the way I see it work and you're going to come to us with this suggestive changes and then you would write the rule next after are we going to look at those proposed changes before you go so just to be clear the language you have before you says it says the department of taxes but that's actually right it used to say the current use of virus report will probably aid rules and then it says you're going to get a report back on the substance of the rules all the rules adopted not the substance but all the rules themselves so that's it there's no change so just to be clear it wouldn't be a matter of the report coming with proposed rules this language is saying go adopt the rules and then come back and tell us about that way you can have an opportunity to pass legislation if there was something problematic from your point of view how you jumped through all these hoops how was that going to happen I mean we're just better out of our box on you or on the board chair the brand new board chair to fix this and then we're going to come back and pass a bill if we need to if you need to, yeah how they were proceeding that's how that that is how that that's how this language works it is it is but in terms of timing it gets to what we want to do faster I think and I'm getting nods there so in the case of this gentleman that we had in you're saying that you basically put everything on hold until the rules had been adopted and then they would go into effect whatever rule that was and then we would have a look at that rule after the fact to decide whether we wanted to modify it or not if you do it the other way he won't get any relief until we've taken a look at it and then it gets back and kind of we skip a step I think it would be quicker I don't even question that yeah do you think the board in the department could put together something to figure this out so it's going to be now moved out both sides I would say that that passing a regulation getting a regulation through the process in six months is extremely aggressive I think that we can do it and if not we can report back on where we are in the process but obviously I would I see the need to have this done before the end of the year so that it can affect the proper grant list there will be the L-CAR stage in the process that the legislature will definitely have a point in which to they'll push it right and always have very different questions and with our regulation updates recently we have been going above the Secretary of State minimum requirements for notice and so we would make sure that all of these four committees had seen a copy of the regulation before we even submitted it to the I-CAR L-CAR process yeah they've sent us a copy that's what I'm thinking what about you guys Washington County guys what do you think this is all taking place in Washington County so we don't mind you guys can keep a close eye on that's right I'll be here you've made up your mind now no I haven't well why not we you'll fix that language change to make sure it's like the word yeah and I have a different question what do you have a chance on this part on the different part okay we'll get Aaron back we'll get Aaron back thank you he says review permit I just wonder what that means that sentence page four lines one through three well one through five actually takes the first sentence so what this means is that if you have an accessory on back up this provision amends the planning zoning chapter so it's about municipal zoning this is as it passed the house overall what's going on here just as a refresher is the house is proposing to say you can't prohibit or have the effect of prohibiting an auto farm business earlier on in this language this language permits limited review of the accessory on the farm business and it may be a point it says is that if activities of an accessory auto farm business that are not exempt there's stuff that on the farm that's exempt from land use farm use not something that's regulated by local land use but accessory on farm businesses may be a part of that definition that may not be exempt they may be subject instead to site plan review site plan review if you were to go to section 4416 is about screening, landscaping traffic, circulation parking signs so it's usually regulation of specific things like that it's not the same as conditional use review which deals with whether something fits with the character of the area site plan review is usually fairly limited and they would not be exempt from almost right well the municipality may go through site plan review but it can't say no it can say only so much parking or put your sign over here or move your lighting over there or whatever yeah and then it does say did you also ask what the second sentence was? yes so why law can require that these activities meet the same performance standards otherwise adoptive for similar commercial uses so today existing law allows the municipality to have performance standards for things like noise that can apply to commercial uses if the municipality has adopted performance standards for similar commercial uses they can then apply them to especially on farm business so there's a noise standard in town for commercial uses you can apply that but the way it's worded is also to avoid having performance standards that are solely for clients that zone these things out so there's a nuance in the wording because generally what the bill is saying is that the town cannot develop the town can't have restrictions on these on farm well I can't say it can't prohibit or have the effect of prohibit which isn't quite the same I'm interrupting it's in quite the same time zero restrictions through the site plan review process you can have some conditions that might affect but they can't be prohibiting them out right or it can't have if your restriction is so restrictive you prohibit that also would be a problem it's not that they can't just they can't prohibit it says page one it says no wireless you'll have the effect of prohibiting so it's worded so that to try to give the farm operator the ability to say well that restriction is so much that I cannot make we can't do that to you okay changes it was just helpful to talk through yeah and back on page two I think it's probably on one can or some place you got overnight stays on line nine yes well then we'd have to we'd have to put that so instead of overnight stays we want to fire them right yeah I'm going to yield to if I can because I think she came up with sort of the language here thank you Senator Palmer and Senator Starr just to be clear this is this section is probably in our view the crux of a lot of this bill is a battle of finding what can and can't be an accessory on our business and I've been in communication with the group of people who participated in coming up with this to begin with and we're working on some new language and I had talked with we were supposed to come in with it today and we asked if we could come in on Tuesday just so that we could make sure that we could run it by all the people who had a stake in this to begin with and make sure that we're getting it right for as broad a swath of the folks who have been concerned with this as possible so I apologize for the delay but I think it'll be worth it because we'll be able to give you something that we can say this whole group of people is okay with and good with because it is pretty critical how this all plays out as far as what's in and out of consideration we've tried to make sure we're checking in with a lot of people who've got more experience with both existing accessory on our businesses and people who are thinking about one of the things that you haven't heard about is the survey that we did when it was being, when the bill was being considered in the house we did a quick turnaround survey and we got a huge response we got almost 400 farmers who responded to it in a matter of days of where they were at with interest in accessory on farm businesses and how many were already doing it and if it would be helpful on Tuesday we can bring that information in as well just for your consideration in terms of the number of people who are interested in this and the types of things they're interested in so if you're willing to give us till Tuesday I can bring you a language that you're running out of Tuesdays I know, I know I just hope it will save you time because you'll have the confidence you can have the confidence that it's widely supported so given that what you just said about timing should I work with Andrea when she has language just to get it in if you had it on say Monday you got squared away with these farmers might even have it tomorrow give that to Aaron now so he can work on to present that would be better if you could and we weren't going to plan your back here we were just trying to get it up some more I actually just wanted to make sure they were okay that I worked for them I figured you would say yes I was saying she was working on her back she is behind my back anything else on 663 everybody's getting close everybody's happy sure so so if that works out Tom and we are trying to get it I'm hoping that the two main parks will be able to I forgot the old saying two main parks will be soon I absolutely agree with you there Senator but we did have a group of stakeholders who put a lot of time into developing this and I think on balance after the fact it will be better to have them all on board than to have people saying wait a minute I didn't hear about this I didn't sign up for that well push them I will do that sir I'll do that thank you how are we how's your man about work well we take our break so I guess that's did you have anything you wanted to offer that's how we switch granddaughters yeah I know I've been here for years I've been coming here since yeah are you just here are you just here visiting yeah I was here with the farm bureau today for the young farmer I guess as you're thinking about some of the dairy some of the dairy funding and some of the issues we talked about earlier this morning you know just consider the fact we're trying to bring out the young farmers also so we want to make sure that it's possible for generational for young farmers to be buying some of the farms for some of the older generation that is retiring that doesn't necessarily have the next generation so in order to make sure that we're putting farms in financial situations where we're allowing that next group to come up and be involved and continue is definitely something that's great do you do you just volunteer that time or do you work for farm bureau volunteer the time is the chair so I'm only up here everyone's in a while yeah well we eat your beef up steers and that's always good and so that's fine yeah well why don't we knock it off for the day yeah well thanks very much