Happy Thursday!
Pour the coffee, kick the mud off the boots, and let's talk about a US tax credit that just became a Prairie story.
Today we've got Washington quietly widening a door for canola oil, a survey confirming your auto-steer is officially not fancy anymore, and a cow herd that keeps shrinking while everyone argues about whether to hit the gas or the brakes.
Let's get into it. 👇
🌾 The Big Bin: 45Z Just Made Canadian Canola an Approved Pathway
What happened. Farms.com reported Thursday that the US 45Z Clean Fuel Production Credit is reshaping demand for oilseed oil in renewable fuels, and buried in the mechanics is a detail that matters a lot north of the 49th.
The credit pays fuel producers based on the carbon intensity of what they make, not on blending volume like the old biodiesel credit.
For fuel produced after Dec. 31, 2025, the feedstock has to be grown or produced in the United States, Mexico, or Canada. Full stop.
The indirect land use change penalty is gone, which changes the math for every crop-based feedstock.
USDA has finalized its Feedstock Carbon Intensity Calculator, the tool that scores how your practices affect a crop's carbon footprint.
Why it happened. That land use penalty was the whole ballgame. It stacked extra emissions onto crop-based oils and shoved canola's carbon score above the eligibility threshold, which locked Canadian canola oil out of the credit almost entirely. Strip the penalty out and canola drops back under the bar.
What it means for the farm gate. This is the biggest renewable diesel market on the continent to formally name Canadian canola as an approved feedstock, with the credit running through 2029.
It is a structural demand channel for canola oil, not a one-week blip. Crush plants that buy your seed now have a US customer with a tax reason to prefer them.
The timing matters. With Chinese seed demand still hobbled by tariffs, a second large buyer for the oil side takes some weight off a badly overloaded export file.
The catch, and mark your calendar. The EPA had proposed handing imported feedstock only half the renewable credits of domestic feedstock. That did not make the final 2026 and 2027 rule. But the agency did lock in the import penalty to take effect in the 2028 compliance year, and there is no Canada or Mexico carve-out on the table. Translation: clear runway through 2027, and 2028 is the fight.
The homework. Carbon intensity is scored at the field level now. No-till, cover crops, and tighter nutrient management are the levers, and clean records are what prove it. If you have been sloppy on agronomic record-keeping, this is your nudge.
🚜 Tractor Tech & Trends: Auto-Steer Is Now Just... Steering
CNH dropped its first-ever Farmer Pulse: AgTech Adoption Edition on Thursday, built on responses from 217 farmers and ranchers across the US and Canada. The headline finding is that precision ag has quietly stopped being a gadget.
89% are running auto-guidance. That is not early adoption. That is just how a tractor works now.
54% plan to buy more precision tech in the next two years, which is remarkable given how tight the money is.
71% call precision tech important to the success of the operation, and 62% say the stuff they already own delivers moderate to high value.
What is driving it: 74% said cutting input costs, 70% said saving time and labour, 59% said chasing yield. Notice the order. Nobody is buying a rate controller because it is cool. They are buying it because fertilizer is expensive and good help is hard to find.
What is blocking it: 56% said cost, 36% said they are not sure the return is there, 21% want more training, and 13% flagged connectivity.
That connectivity number is the one that reads differently out here. Thirteen percent sounds small until you remember how much of Western Canada is a cell dead zone the second you turn off the grid road. A prescription map you cannot download at the far quarter is just a very expensive PDF.
🐮 The Grazing Pen: Gas or Brakes on the Cow Herd
DTN's Jennifer Carrico wrote a sharp piece Thursday morning on the question every cow-calf operation is chewing on: step on it, or ease off?
The numbers underneath it are stark. The US beef cow herd sat at 27.6 million head on Jan. 1, down from 30.3 million in 2016. That is an 8.9% decline in a decade, and it is the smallest herd in a very long time.
The cause is not mysterious. Years of drought hollowed out the regions that carried the biggest cow numbers, and grass that is not there cannot run cows.
Here is the trap. The last inventory report showed heifer retention ticking up slightly this year, but the market keeps giving producers a very good reason to sell those same heifers instead of keeping them. Carrico's framing is that it is gas and brakes at the same time, and she is right. Every heifer you keep is a heifer you did not market, and every heifer you market is a cow you do not have in three years.
The Prairie read. Same arithmetic, different postal code. Canadian cow-calf operators are running the identical decision tree, with the added wrinkle that our grass base has been shrinking too. And Carrico makes a point worth sitting with: grain margins are thin enough right now that the feed side of the equation is not the safety valve it used to be. When one half of agriculture is flooring it and the other half is riding the brake, the whole convoy gets twitchy.
👉 Dig in
📊 Stat of the Day
The US beef cow herd on Jan. 1, 2026.
27.6 million. That is how many beef cows were standing in the United States on Jan. 1 this year.
Ten years ago it was 30.3 million. So roughly 2.7 million cows have quietly left the continent's beef supply chain since 2016.
That is not a herd you rebuild over a coffee break.
Cows take years to make more cows, which is exactly why the retain-or-sell decision happening in corrals right now is going to be shaping this business well into the 2030s.
👋 That's a Wrap
Big picture today: a tax credit in Washington just handed canola oil a new customer, your auto-steer became a boring appliance, and the cow herd is still writing cheques the calendar has to cash.
Go have a good one out there.
Watch the dust, watch the sky, and we'll see you tomorrow.
The Daily Kernel