This week in Minnesota several country elevators in various parts of the state called the Minnesota Grain and Feed Association (MGFA) about DCV Farms, LLC, with a mailing address of 3208 West Lake Street, Suite 72, in Minneapolis. MGFA checked out the address yesterday and found it to be a location of UPS and FedEx drop boxes, but no offices. DCV Farms entered into contracts to sell grain to the elevators. A representative of DCV Farms has now been contacting the elevators and stating that DCV Farms is unable to deliver the entire contracted amount and wants to close the contracts, receiving any difference between the contract price and current market price. Do not tender payment until all the contracted bushels are delivered to the elevator or feed mill.

If a party enters into a contract with an elevator and has no intention of delivering grain, the contract would result in a probable violation of the Commodity Exchange Act and likely constitute a fraud on the buyer. When the market moves in the seller’s favor, an illegitimate trader will try to close out the contract and take the profits. When the market moves against the seller, however, an illegitimate trader will disappear and leave the loss in the hands of the elevator.

MGFA intends to pursue several legal issues on behalf of their Members and intends to meet with the Minnesota Attorney General’s office and the Minnesota Department of Agriculture to apprise those agencies of its Member’s concerns. Source: SDF&GA

The interim legislative committee charged with studying SD highway needs and financing recently heard two days presentations on the $130 million or so needed in additional funds for our state’s highways. The state highways account for nine percent of all roads in South Dakota, but they carry 68% of all traffic – and 76% of heavy truck traffic – in the state. Yet to be completed is a survey that will try to quantify the amount of additional funding needed for local roads, such as city, township, and county roads. One of the presentations concentrated on current and potential funding alternatives and included:

• Motor fuel excise tax, currently at 22 cents/gallon for most gasoline, diesel and biodiesel. Current annual revenue is about $120 million; each additional penny of motor fuel excise tax raises approximately $5.7 million. Off-road dyed diesel is not taxed

• Indexed fuel tax, where the tax on fuel is indexed to the consumer price index or highway cost index. This is currently being used in five states, including Nebraska. Each one percent of sales tax would generate an estimated $22 million in South Dakota, assuming a $3.60 pump price

• Vehicle Excise Tax, which is currently 3% of the purchase price in South Dakota. This tax generates about $58 million per year. Cars older than 10 years or less than $2,200 in value are exempt. A number of other current exemptions meant that last year 154,000 of 300,000 title transfers were not taxed. A one percent increase would add $19 million per year. Eliminating exemptions could generate an additional $6 to $11 million per year

• Vehicle Registration Fees. The vast majority of registration fees are dedicated to local governments. • Wheel tax, assessed per wheel at the time of vehicle registration. The fee is capped at 4 wheels, with a maximum of $4 per wheel allowed. Currently 38 of 66 counties in SD use the wheel tax. The tax generates $8 million per year now, with 90% of the funds to the county, 5% to townships, and 5% to cities. Could generate $12.4 million per year if all vehicles were taxed at $4/wheel

• Front-foot assessments, where an annual assessment is based on the frontage adjacent to public roadways. Assessments range from 40¢/ft/year for cities, to 80¢/ft/year for townships. Special assessments can be used by cities to recover costs that exclusively benefit private property. Developer fees may be set by local agencies to offset costs of road improvements.

• County road districts may charge 75¢/ft/year. There are more than 180 road districts in South Dakota, raising about $1.6 million per year.

• Vehicle miles traveled, where a fee is charges based on the number of miles a vehicle is driven. This is being pilot-tested in Oregon, which charges 1.2¢/mile during non-congestion times and 10¢/mile during rush-hour periods in metropolitan traffic.

• Weight-distance fees, which charges heavy vehicles based on weight and distance to compensate for pavement wear. Currently being used in five states.

• Overweight penalties. Currently, in SD fines to go local school districts, meaning that revenues generated are not used to compensate for road damage.

• Tolls, bonds, or public-private partnerships

The committee is scheduled to meet again November 12-13 in Pierre where a closer look at funding options and alternatives will take place.

Economic Stabilization Package Contains Renewable Energy Tax Incentives, Disaster Relief - President Bush on October 3 signed into law an economic stabilization package that combines a $700 billion bailout of financial companies with more than 100 new and extended tax incentives, including incentives for renewable fuels. The “Emergency Economic Stabilization Act of 2008,” H.R. 1424, includes the following:

• Extension of the placed-in-service date for the Section 45 renewable energy credit and expansion of the types of facilities qualifying for the credit to include new biomass facilities.

• Immediate write-off of 50 percent of the cost of facilities that produce cellulosic biofuels ethanol if the facilities are placed in service before January 1, 2013. This benefit is available for the production of other cellulosic biofuels in addition to cellulosic ethanol.

• Extension of the $1.00 per gallon production tax credit for biodiesel and 10 cents per gallon small biodiesel producer credit through 2009.

• Extension of the $1.00 per gallon production tax credit for diesel fuel produced from biomass. Diesel fuel created by co-processing biomass with other feedstocks [e.g., petroleum] will be eligible for the 50 cents per gallon tax credit for alternative fuels.

• Extension of the 30 percent alternative refueling property credit for businesses through 2010.

• Extension of the temporary refinery expensing provision. The provision is available to refineries that increase total capacity by 5 percent or that process nonconventional feedstocks at a rate equal or greater to 25 percent of the total throughput of the refinery. The new law extends both the refinery expensing contract requirement and the placed-in-service requirement for this expensing provision for two years. Refineries directly processing shale or tar sands qualify for this provision.

In addition to energy provisions, the new law provides a five year recovery period for certain machinery or equipment (other than any grain bin, cotton ginning asset, fence, or other land improvement) used in a farming business. The machinery or equipment must be placed in service after December 31, 2008, and before January 1, 2010.

Dr. Don Marshall has agreed to serve as Acting Dean of the SDSU College of Agriculture and Biological Sciences, and Dr. John Kirby will serve as Acting Executive Associate Dean. Each will keep their existing roles and functions with Dr. Marshall having overall administrative responsibility for the College and Dr. Kirby, in addition to his existing role as Associate Dean for AES, will assist Acting Dean Marshall with general external activities until a permanent dean is appointed. Source SDSU

Initiated Measure 10 will have a negative impact on cooperatives, their employees and employees’ families. Rural South Dakota’s populations cannot adjust to the restrictions that would be imposed by Initiated Measure 10 and still be active in the open political process that we are now an integral part of.

Three important points to remember about IM 10:

• It removes the right of political speech from thousands and thousands of South Dakotans.

• It allows people to report you if they feel you are violating this measure – neighbors spying on neighbors.

• It gags local elected leaders and silences voices for local control.

January 13th, 2009 - Legislative Session begins

January 26th, 2009 - SDAC Board Meeting - Agfest that evening - Ramkota Inn - Pierre SD

March 5th & 6th, 2009 - SD Co-op Managers Association Spring Meeting - Ramkota Inn - Sioux Falls, SD

March 18th & 19th, 2009 - ABC Conference - Crossroads Convention Center - Huron SD

• November 14-15, 2008 –NCFC Government Affairs Meeting – Scottsdale, Ariz.

• February 4-6, 2009—NCFC Annual Meeting—Westin Maui Resort, Lahaina (Maui), Hawaii