Onion World February 2020

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Table of Contents Magazines For Maximum Yield

ONION WORLD Volume 36, Number 2

February 2020 6

8

www.O n i o n W o r l d .n e t Onion World Contacts

Soil Health Matters

What Recent Soil Biology and Soil Organic Matter Discoveries Mean for Soil Management

Work in Progress

90 Years of USDA Onion Breeding for Resistance to Onion Thrips

10

Exploring New Topics in Old City

13 14

Thrips Management: Paying the Price

16

Crop Protection Essentials

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PO Box 333 Roberts, Idaho 83444 Telephone: (208) 520-6461

Publisher / Advertising Manager Dave Alexander dave@ColumbiaMediaGroup.com Editor Denise Keller editor@ColumbiaMediaGroup.com Director of Operations Brian Feist brian@ColumbiaMediaGroup.com

UK Onion and Carrot Conference

Trade Trends

Africa: Trade in Fresh Onions, Shallots Buyers' Guide

EDITORIAL INFORMATION Onion World is interested in newsworthy material related to onion production and marketing. Contributions from all segments of the industry are welcome. Submit news releases, new product submissions, stories and photos via email to: editor@ColumbiaMediaGroup.com, or call (509) 697-9436.

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Safety Revolution reps welcome attendees to the UK Onion and Carrot Conference and Trade Exhibition. See the story on page 10.

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On the Cover

Departments

Soil biology is a hot topic in the agriculture industry. What do new discoveries in soil health mean for soil management? See the story on page 6.

18 19 22

Onion World • February 2020

In the News Calendar From the NOA

Onion World magazine (ISSN 1071-6653), is published eight times a year and mailed under a standard rate mailing permit at Idaho Falls, Idaho and at additional mailing offices. Produced by Columbia Media Group PO Box 333, Roberts, ID, 83444. Copyright 2020. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose without the express written permission of Columbia Media Group. For information on reprints call (208) 520-6461.


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SOIL HEALTH MATTERS What Recent Soil Biology and Soil Organic Matter Discoveries Mean for Soil Management By Andrew McGuire, Washington State University Extension Agronomist “This changes everything.” That is how everything is presented in today’s media – new cars, new policies and new science. For an example of the latter, look at the recent advances in soil microbiology, or “soil biology” in pop-ag speak. Soil biology has become the means, the end and the banner flying over the soil health movement. In particular, the recent focus on the vital role of soil microbes in the production of soil organic matter has become a “This changes everything!” call to arms. While the new scientific discoveries are important, revealing the details of microscopic soil life with new clarity, do they change everything? Here is my agronomist take on what has changed, what hasn’t and what it means for soil management.

What Has Changed? Change 1: The microbial pathway to soil organic matter This change brings soil microbes to the forefront in the formation of soil organic matter (SOM). Rather than just breaking down plant material until what is left is SOM or humus, soil microbes produce compounds that become SOM. And when they die, microbe “necromass” can also become SOM. Perhaps 50 percent or more of the total SOM is formed through this microbial pathway. Change 2: Stable humus concept questioned The longtime view of humus as a component of SOM resistant to decomposition, and therefore stable and long-lived, is now in question. The alternative view is that humus is created

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Onion World • February 2020

by our extraction methods and that natural SOM is much more dynamic, with constant turnover from protected locations on clay and in aggregates being the norm. Change 3: The clay connection to soil organic matter Recent observations suggest that microbial-derived SOM is most often attached to clay and smaller silt particles. The bonding of SOM to clay protects the SOM from microbial decomposition, at least for a while. This SOM is called mineral-associated organic matter. SOM is also protected within soil aggregates. But these protections are shorter lived than we had thought, and even protected pools of SOM are constantly being decomposed and replaced. Change 4: Roots and root exudates are important. Root biomass and exudates are much more likely – up to five times by some estimates – to become SOM than aboveground plant biomass, mainly because of their location; they are already in the soil in contact with all the microbes just waiting to process them when they die. Furthermore, roots deep in the soil profile are subject to lower decomposition rates than surface roots or surface-applied biomass. Root exudates are produced by plants for microbes in the soil rhizosphere. Exudates are then rapidly used by microbes in the rhizosphere and so are important for the microbial pathway to SOM. In exchange, microbes supply nutrients, water in some cases, and provide other advantages to plants such as helping them resist plant pathogens.

What Has Not Changed? While this new knowledge is important to our understanding of soils, I find the implications of these discoveries on management of soil are often overstated by the popular press and others promoting soil health. They reason that since we have not been able to study soil biology very well until recently, by studying it now with the new tools and guided by new knowledge, all will change. Here are some things that have not changed. Constant 1: Plant biomass is still the driver of soil organic matter formation. Just like us, microbes live either directly or indirectly on the energy in plant inputs. Plant biomass produced through photosynthesis is the raw material, and microbes are the processors that transform the material into SOM. No matter the specific mechanisms leading to its formation, the level of SOM in a soil is still a result of SOM gains and losses. So, it still holds that using practices to either reduce losses or increase gains of SOM will lead to higher SOM levels. Constant 2: Increasing SOM levels is still slow and difficult. Regardless of the newly understood microbial and root biomass/exudate pathways to SOM formation, the low conversion rates of plant biomass to SOM, measured for many decades in many types of systems, both managed and unmanaged, still apply. It varies by input and how it is handled, but only 3 to 33 percent of plant material ends up as soil organic matter. The conversion rates for pre-digested soil amendments like compost or manure are better; 20 to 40 percent of manure or compost becomes SOM. Whatever the


input, changing SOM levels requires a lot of plant biomass, which in practical terms translates to slow change over time unless biomass is imported as with manure and compost. Constant 3: Roots and root exudates have always been there. What about our imperfect measurements of the inputs, like roots and root exudates? It is true that often only aboveground biomass is measured for calculating the conversion rates. However, our measurements of total SOM have been reasonably reliable over time. When roots and root exudates are included in the calculations of the conversion rate, we find that our conversion rates decrease, not increase. Why? That’s because they have always been there, even when not measured.

Improving Current, Informing New Practices Just because these discoveries don’t change everything doesn’t mean they can’t help us improve farm practices.

Here are a few possible ways that this new knowledge could guide us in tweaking the practices already known to build SOM levels. Focus on stable flow of carbon through soil. This, as an overall strategy for soil health, was presented as a hypothesis by Markus Kleber at a Potato Soil Health symposium in December 2018. Kleber, an Oregon State University soil scientist, speculated that we may find that carbon flow through a soil is more important than the level of stable carbon – soil organic matter – in that soil. Kleber calls for “maintaining a steady supply of carbon” rather than a high or low supply. How to do this? • Produce more microbes. • Produce more roots. • Produce more root exudates All of this can be accomplished with cover crops, green manures and by incorporating perennial crops in rotations. As you can see, our new knowledge has not changed everything; mostly, it helps explain what we have been measuring in soils for decades.

This is my take on the big-picture, agronomic view of recent advances in soil science and how they relate to practices in the field. However, science is slow, so it will take a while to either confirm these ideas or test new ones. In the meantime, there are proven benefits of keeping the soil covered by living plants when possible, cover crops, perennial crops, etc. The real questions are in the details of how far these time-proven practices can take us in improving and managing our soils. Editor’s note: You can find more from Andrew McGuire, including the full version of this article with references, at www.csanr.wsu.edu/author/amcguire-2 or follow him on Twitter @agronomistag.

Andrew McGuire

Researchers have been measuring inputs to the soil and outputs, the change in soil organic matter levels, for a long time. It is only recently that they have begun to figure out the details of what happens in the black box between.

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Work in Progress

90 Years of USDA Onion Breeding for Resistance to Onion Thrips By Michael J. Havey, USDA-ARS and University of Wisconsin

Y

ear after year, feeding by onion thrips (Thrips tabaci) causes serious damage to onion leaves and reduces the yield of seed and bulb crops. Thrips management is challenging due to numerous generations of the insect per season, the large host range of the insect, and difficulties of pesticide sprays reaching the insect hiding between leaves. Therefore, frequent applications of insecticides are required to control thrips, and their extensive use has produced insecticide-resistant populations, reducing control options for growers. The USDA Agricultural Research Service (ARS) has supported research on thrips resistance in onion for almost 90 years. In the early 1930s, Dr. Henry Jones observed that under severe thrips pressure, the White Persian variety of onion from Kashan, Iran, suffered significantly less

feeding damage relative to other onions (Fig. 1). Jones noticed that the leaves of White Persian onions had a lighter green color compared with the blue-gray foliage color of thrips-susceptible onions. Jones referred to this lighter green foliage as “glossy” and blue-gray foliage as “waxy.” Over the years, numerous researchers have observed that onions with lighter green foliage suffer less thrips damage compared to onions with waxy foliage. In the 1950s, glossy selections from White Persian onions were the focus of the doctoral research of Dr. Clint Peterson at Iowa State University. Peterson evaluated numerous leaf characteristics, such as epidermis and leaf thickness, to try and determine the basis of thrips resistance. However, none of these characteristics explained the thrips resistance of White

Clint Peterson joined the USDA-ARS at the University of Wisconsin in 1968, conducted research on thrips resistance in onion and eventually released two glossy inbred lines.

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Onion World • February 2020

Persian onions. In 1968, Peterson joined the USDA-ARS at the University of Wisconsin (UW) and continued research on thrips resistance in onion. He backcrossed the glossy foliage from White Persian to onions with waxy foliage and released two glossy inbred lines, B9897 and B9885 (the prefix “B” stands for Beltsville, which is the headquarters of the USDA-ARS in Maryland). Peterson’s last graduate student at UW, Nick Molenaar, studied the glossy foliage from White Persian for his Ph.D. research and showed that the amount of wax on the leaves of glossy onions was much less than the waxy leaves of most onions. These waxes are important to protect the leaves from water loss or damaging wavelengths of light, as well as interactions with pests. The glossy phenotype from White Persian has never been commercially grown due to poor field performance and susceptibility to fungal pathogens. Over the last 10 years, Steve Damon and Eduardo Munaiz, graduate students with Dr. Michael Havey of the USDA-ARS and UW, demonstrated that the color of onion leaves is primarily due to both the amounts and types of waxes on the leaf surface. The glossy foliage of White Persian has all the same wax components as waxy onions; however, it accumulates very low amounts of total wax. The leaves of Sweet Spanish onions have intermediate amounts of leaf waxes (termed “semi-glossy”), greater than glossy but less than waxy plants, and show some resistance to thrips. Waxy foliage generally has more wax than either White Persian or Sweet Spanish. However, the UW students revealed that specific semiglossy onions have the same total amount of wax as susceptible waxy onions, only the composition of waxes is different. These semi-glossy onions had significantly less of the ketone 16-Hentriacontanone, the specific wax component associated with


Figure 1. The USDA evaluates glossy (left) and waxy (right) onions for thrips damage in a greenhouse research in the 1950s. Onion World Buyerstrial Guide_Sept2018_Layout 1 9/25/2018 9:17 AM Page 1

Michael Havey continues to work for USDA-ARS at the University of Wisconsin breeding onions with resistance to onion thrips.

thrips susceptibility, and more of other waxes such as fatty alcohols and alkanes. In field evaluations, semi-glossy and waxy onions with the same total amounts of leaf wax were grown side by side, and the semi-glossy onions suffered significantly less feeding damage by thrips. Based on these results, we are now selecting onions with specific wax profiles that are adequate to protect the leaf surface and still show resistance to thrips. These onions will still have to be sprayed, but hopefully less often to save money and delay the emergence of insecticideresistant thrips. Research by USDA-ARS onion breeder Henry Jones in the early 1930s identified differences in thrips resistance between “glossy” foliage and “waxy” foliage.

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Exploring New Topics in Old City T

he biennial UK Onion and Carrot Conference and Trade Exhibition opened its doors to delegates, exhibitors and speakers at the Cambridge Corn Exchange in the historic city of Cambridge on Nov. 20, 2019. Allan Wilkinson, head of Agrifoods HSBC, opened the conference with a presentation on excelling in a period of change and the UK food supply chain. He covered current talking points such as consumer trends, producer trends, drivers and solutions. Andrea Graham, head of policy services for the National Farmers’ Union, followed Simon Pearce from Alfred G Pearce speaks about markets of the future.

The team from Hazera staffs the company’s trade show booth at the UK Onion and Carrot Conference and Trade Exhibition.

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Onion World • February 2020


A panel discusses markets of the future. Pictured from left are Michael Barker from Fresh Produce Journal, Mark Tate with George Perry Ltd, Simon Pearce with Alfred G Pearce and Joe Shaw from Kantar.

with a discussion of “The Future of Food 2040.” She provided insight into the changes happening within the industry from food production, changes in diets and how this affects UK farming. She went on to discuss the opportunities the changes will provide and how this will influence productivity in British food and farming manufacturing. The conference moved on to its technical session with the first speaker, Joseph Peller from Wageningen University in the Netherlands, presenting work on innovation in disease detection and explaining how spectral imaging works and how it can be applied. Joe Martin with the UK’s Agriculture and Horticulture Development Board then took to the stage to update attendees on the SCEPTRE-plus project’s work on sustainable plant protection products. Also within the technical session, Stephen Jelley with RootWave presented the company’s alternative weed control methods using its electricity technique. The conference delegates were then split into two groups for separate onion and carrot technical sessions. The onion session included updates from Angela Huckle with ADAS, an independent agricultural and environmental consultancy, on the SCEPTRE-plus herbicide screens in bulb and salad onions. The session also included the latest news on the INNO-VEG project from Lizzie Sagoo with ADAS and updates on Fusarium and white rot from John Clarkson with Warwick University.

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UK Onion and Carrot Conference

The delegates then regrouped for joint sessions during which Anna Jones spoke about her project Just Farmers, aiming to create more spokespeople to represent the industry. Dan Parker with Veg Power then presented on the “Eat Them To Defeat Them” campaign, proving that the media is having a positive impact on how eating vegetables is perceived by an influential audience. He also discussed future opportunities to encourage families to eat more vegetables. Michael Barker from Fresh Produce Journal chaired the “Markets of the Future” panel session. The discussion involved Simon Pearce of Alfred G Pearce, Mark Tate of George Perry and Joe Shaw Roberts of Kantar. The panel covered how future consumers will buy fresh produce, how they will be influenced and how the supply base will react to market changes. From left, Coral Russell, Pauline Sutton and Debbie Stacey represent the British Growers Association at the UK Onion and Carrot Conference.

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Thrips Management: Paying the Price By Gina Greenway, Agricultural Economist and Assistant Professor, College of Idaho

W

ith another year’s onion harvest in the books, a familiar problem remains a timely concern. Thrips and thrips-transmitted Iris yellow spot virus (IYSV), successfully deliver the threat of a one-two-punch to grower returns. Management expenses contribute to increased costs of production while any reductions in bulb sizes will hit the revenue line – a perfect combination to put the squeeze on profit. Thrips pressure will vary from year to year, field to field, by growing region and with environmental factors. Management costs will depend on severity of pressure and choice of products used.

To try to capture the impact of thrips and IYSV, I estimated management expenses under a few common scenarios. A grower spraying four times incorporating two applications of active ingredient spirotetramat plus one application each of active ingredients spinetoram and methomyl would have spent about $168 per acre on product costs alone this growing season. Application costs would further increase the price tag depending on method of application and whether the insecticides were delivered alone or as part of a tank mix. A grower who sprayed six times using Aza-Direct and M-Pede, plus two applications of spirotetramat,

one application of abamectin and two applications of spinetoram would have spent about $245 per acre. A grower who sprayed eight times incorporating two applications of spirotetramat, two applications of abamectin, two applications of spinetoram and two applications of methomyl would have spent about $305 per acre. No doubt about it, managing thrips is frustrating and expensive. As we think about the future, it will continue to be important to follow best management practices for preserving long-term-efficacy insecticides. Judicious scouting and efforts to hone in the timing of applications will also help. Research will broaden the toolkit for managing thrips and IYSV, as well. A team of research and extension scientists across major U.S. onion growing regions is working to further develop practical integrated pest management tactics for thrips and IYSV and to ensure the longterm sustainability of onion production by releasing germplasm that could lead to the development of thrips- and IYSV-resistant onion varieties.

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Trade Trends Africa: Trade in Fresh Onions, Shallots

By Mark Wocial, Certified Global Business Professional, Wocial & Associates LLC

A

ccording to the U.N. international trade statistics, imports of fresh onions and shallots by countries in Africa are much greater than exports. Additionally, imports showed increases in recent years, while exports remained relatively stable. In 2018, African countries imported 679,000 metric tons (MT) of onions and exported 284,000 MT. The four largest importing countries were located in West Africa. Cote d’Ivoire imported 201,000 MT, Senegal 132,000 MT, Ghana 65,000 MT, and Mauritania 54,000 MT. Other countries in West Africa that imported significant quantities of onions included Gambia

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(23,000 MT), Sierra Leone (21,000 MT) and Mauritius (14,000 MT). Together, these seven countries accounted for about three quarters of African imports. The Netherlands was a dominant supplier of onions to Cote d’Ivoire, Senegal, Mauritania, Gambia and Sierra Leone. Last year, the largest importers of onions in Central Africa included Uganda (20,000 MT) and the Democratic Republic of the Congo (16,000 MT). A vast majority of onions imported by Uganda came from Tanzania, while the Netherlands dominated the import market in the Democratic Republic of the Congo.


Africa - Imports and exports of fresh onions Africa - Imports andand exports of fresh onions and shallots shallots 1,000,000

Africa offresh fresh onions shallots Africa- -Imports Imports of onions andand shallots by by country 2018 (MT) country inin 2018 (MT) 250,000

800,000

200,000

600,000

150,000

400,000

100,000

200,000

50,000

0

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Imports (MT)

Exports (MT)

In 2018, the largest onion importers accounted for a vast majority of onion in southern Africa were Mozambique exports. The primary export markets (43,000 MT) and Angola (25,000 MT). were other countries in Africa. Major Africa - Imports of fresh onions anddestinations shallots for South Africa’s exports South Africa was the primary supplier to by country in 2018 (MT) both countries. In East Africa, Kenya and included Mozambique, Angola, Zambia, Ethiopia are the largest importers. Last Botswana and Namibia. Exports from 250,000 year, Kenya imported 24,000 MT, but no Niger were destined for Burkina Faso, 200,000 data was available for Ethiopia, which Ghana, Benin and Cote d’Ivoire. The 150,000 47,000 MT in 2017. imported primary export markets for onions from Last year, South Africa, Niger and Morocco were Mauritania, Senegal and 100,000 Morocco were the largest exporters of Cote d’Ivoire. 50,000 onions in Africa. These three countries

Author’s note: This information is based on the author’s analysis of the international trade data collected by the United Nations International Trade Statistics Database. Due to some inconsistencies and omissions in the available data, the quantities in this article should be viewed as approximate.

0

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Crop Protection Essentials Buyers’ Guide Gowan Company • www.gowanco.com Zing! Fungicide Zing! Fungicide is a premix protectant fungicide combining zoxamide and chlorothalonil in an easy-to-use liquid SC formulation. The combination of zoxamide and chlorothalonil works to enhance the performance beyond each individual product. These products have been successfully controlling diseases for several years in the labelled crops with no documented resistance in the field. Zing! Fungicide provides excellent control of key diseases like early blight, late blight, downy mildew, anthracnose and more. Registered for use on onions, potatoes, cucurbits and tomatoes, Zing! is an excellent choice, adding multi-site, multimode of action to your resistance management program.

Jet Harvest Solutions • www.jetharvest.com Jet-Ag

Jet-Ag is a peroxyacetic acid (PAA) broad-spectrum fungicide, bactericide and algaecide. Jet-Ag works great for broad-spectrum activity and is an indiscriminate killer on contact against Erwinia, Botrytis, anthracnose, Pythium, Fusarium, Colletotrichum, Penicillium, powdery and downy mildew, bacterial soft rot, Xanthomonas leaf blight and much more. Jet-Ag is also a very effective thermal fog post-harvest tool against storage rots. The versatile product offers a zero-hour restricted-entry interval (REI) and zero days to harvest. It is exempt from pesticide residue tolerance requirements and has no mutational resistance. Jet-Ag is OMRI certified and can be applied through chemigation, by ground rig or aerially.

Marrone Bio Innovations • www.marronebio.com Amplitude Bio-fungicide

Amplitude bio-fungicide controls Rhizoctonia and Pythium on onions, as well as white mold on potatoes. Amplitude is an advanced bio-fungicide offering growers a sustainable mode of action to control white mold and a broad range of other fungal and bacterial diseases in many crops including onions and potatoes.

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Onion World • February 2020


Nichino America, Inc. • www.nichino.net Torac Insecticide Torac insecticide controls thrips in onions and other bulb vegetables (Crop Group 3-07). The active ingredient in Torac, tolfenpyrad, works by blocking cellular respiration and is effective on immature and adult stages of thrips. Because Torac causes rapid cessation of feeding in the pest, it also aids in reducing the transmission of Iris yellow spot virus (IYSV). Torac belongs to the METI (Mitochondrial Electron Transport Inhibitor) class of compounds and is an IRAC Group 21A insecticide. Torac is an excellent rotational option to manage resistance in spray programs for onions. For effective resistance management, Torac should be used in rotation with insecticides of different modes of action.

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17


In the News

SGE Opens Manufacturing Facility South Georgia Equipment (SGE) has opened a 200,000-square-foot manufacturing facility in Lincolnton, Georgia. SGE managers say this puts the company in a position to handle any project of any size and also supply readily accessible American parts and service after the sale. SGE provides a wide variety of produce handling equipment and supplies, including extraction systems, drying rooms and optical grading systems, to customers ranging from entry-level automation farmers to the largest farms throughout North and South America, according to company chief operating officer Tony Mimbs. SGE owner Rob Hinnant established the company in 1999 and began importing produce handling equipment into the North American market. However, the crash of the global economy a few years earlier seemed to cause many of the company’s foreign partners to concentrate more on their own domestic customers, according to Hinnant. This led to delays in delivery of parts and equipment for SGE’s North American customers. Mimbs said Hinnant also had a common practice of re-designing portions of the foreign equipment to meet the standards and needs of American farmers, but was not receiving any compensation for his intellectual property. Wanting to change directions, Hinnant and Mimbs made the decision in early 2017 to convert to a full-fledged and all-American manufacturer/assembler for the same type of equipment, but with American design and quality added to the mix. They built their first five projects during 2018 at a 12,000-square-foot facility in Vidalia, Georgia, but it became clear they needed more space. Hinnant and Mimbs say acquiring the 200,000-square-foot manufacturing facility will help SGE achieve its goal to continue providing American farmers with quality equipment for every phase of their operations.

Staff at South Georgia Equipment (SGE) shows off a single-bed field onion topper, the first project completed at the company’s new manufacturing facility in Lincolnton, Georgia. Members of the SGE team responsible for bringing the project to fruition are, from left, David Newton, national sales manager; Lewis Thigpen, controller; Pat Purvis, technical specialist; Tony Mimbs, vice president and chief operating officer; and Misty Margarita, administrator.

OSU Entomologist Earns IPM Award Oregon State University entomologist Silvia Rondon has received the Award for Excellence in Integrated Pest Management from the Entomological Society of America (ESA). The award recognizes outstanding contributions that have a direct relation to integrated pest management (IPM). Rondon is a professor and extension entomology specialist at OSU Hermiston Agricultural Research and Extension Center. Her areas of expertise are pest management, insect distribution, population dynamics, insects-plant interactions, biological control and chemical control. Rondon works on various cropping systems including onions, potatoes and carrots. She is currently working toward improving management of Lygus bugs, leafhoppers and other pests affecting irrigated crops. Rondon earned her bachelor’s and master’s degrees in entomology at the Agraria University in Lima, Peru, and her Ph.D. in crop sciences at the University of Illinois at Urbana-Champaign. She then worked as a postdoctoral associate in the horticulture department at the University of Florida before joining OSU in 2005. Rondon received her award at the ESA annual meeting in November in St. Louis. She is particularly honored to be recognized because her mentor who brought her to the U.S. is a past recipient of the award, and Rondon is one of two women to ever have earned the award.

18

Onion World • February 2020

Stokes Seeds Acquires Siegers Seed Company Stokes Seeds has expanded its U.S. market coverage with the acquisition of Siegers Seed Company. The acquisition combines two organizations, each of which has been operating for over 100 years in the vegetable seed industry. Stokes Seeds is continuing operations from Siegers’ Michigan, Georgia and Florida locations, with the newly combined organizations doing business under the Stokes Seeds brand. Stokes Seeds will now serve commercial growers from five U.S. locations in Buffalo, New York; Vineland, New Jersey; Holland, Michigan; Moultrie, Georgia; and LaBelle, Florida. Stokes Seeds’ expanded U.S. market area now includes the Northeast, Mid-Atlantic, Midwest, Mid-South and Southeast. The ongoing 2019-20 sales season will be a transition year with primary focus on customer service. Siegers Seed Company customers can expect the same level of service, provided by the same staff, from the same facilities.


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Calendar

Feb. 4

Idaho-Malheur County Onion Growers Association Annual Meeting

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Four Rivers Cultural Center Ontario, Ore. Cindy Pusey, (208) 888-0988 or cindy@amgidaho.com

Nunhems USA, Inc.

1200 Anderson Corner Rd Parma, ID 83660 (208) 674-4100

Feb. 11

Utah Onion Association Winter Meeting Bridgerland Technical College Brigham City, Utah Dan Drost, (435) 770-4484 or dan.drost@usu.edu

July 15-18

National Onion Association Summer Convention Nashville, Tenn. www.onions-usa.org Editor’s note: To have your event listed, please email Denise Keller editor@ColumbiaMediaGroup.com Please send your information 90 days in advance.

www.nunhemsusa.com

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OnionWorld.net

19


Cashing Out

An Employee Stock Ownership Plan (ESOP) as an Alternative to a Straight Sale By John Zitzmann and Bill O’Brien, Financial Advisors, Morgan Stanley

D

oes this sound like anyone you know? You’ve owned, run and built the value of your family farm for more than 30 years. You’re ready to cut back, enjoy your well-earned retirement and cash in on your years of hard work. No one in your family is ready to take over, so you’ve been thinking about selling the farm. But something is stopping you. For one thing, what about your employees? They’re good, loyal people who depend on you, and you’d like to be able to secure their futures. That may not be possible with a simple sale. Your legacy is also important to you;

it’s hard to imagine the farm with a different name, or run by someone you don’t know or even repurposed in a way that alters the character of the community. And to be totally honest, you’re not 100 percent committed to full-on retirement. You’d like to maintain a presence on the farm – more like a “semi-retirement,” you might say.

Consider an ESOP We have quite a number of clients who own and run family farms who are approaching traditional retirement age. Some want a typical retirement, certainly. But more and more baby boomers

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Onion World • February 2020

want to stay involved somehow. They may be ready to relinquish day-to-day responsibility, but they’ve put so much of themselves into the farm, and they want to continue to have a role in it. Under circumstances like these, one option we may discuss with clients is an Employee Stock Ownership Plan (ESOP). An ESOP offers a serious alternative to selling a business. It lets the owner or owners stay connected to the business, while still taking out significant wealth. It’s also a great option for rewarding employees. If you are familiar with ESOPs, it may seem odd to associate it with a sale of a farm. After all, aren’t ESOPs benefits plans, used to give employees a stake in the enterprise? Well, yes, but an ESOP can be used to accomplish many of the key objectives of selling the business, including allowing the owner to cash in on the value of the asset. Because the ESOP trust purchases the equity from the owner, he or she can take cash out of the business without selling it to an outside party. Under this arrangement, the ESOP owns the company, and the employees are allocated shares based on their compensation. Since the ESOP trust itself owns the property, there is no outside buyer to disrupt the day-to-day operations of the farm. In fact, the owner is permitted to retain a significant percentage of the farm’s equity, determined by the preferences of those involved. The only threshold is that the ESOP must own at least 30 percent for certain tax benefits to be available.

Tax Benefits for Farm, Seller

ESOPs offer significant tax advantages for all parties. As long as certain requirements are met, the proceeds from


Zitzmann

O'Brien

the sale may be exempt from capital gains taxes. In fact, an ESOP is one of the few ways for an owner to transfer wealth from the farm without triggering capital gains taxes. The farm may realize important tax benefits, as well. The mechanics of how this works are a bit arcane to fully describe here, but the financial features of the ESOP provide several opportunities for meaningful tax savings. ESOPs are also popular when the market for the farm is soft. And they provide some flexibility to the owner for passing wealth to the next generation.

About the authors: John Zitzmann is a financial advisor with Morgan Stanley Global Wealth Management in Providence, Rhode Island. William O’Brien is a financial advisor at Morgan Stanley in Chicago. Authors’ note: The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies

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Weighing All Options ESOPs are not for everyone. It’s a great solution for some of our clients, but not in every case. For example, it only makes sense if you have at least 25 to 30 full-time employees. Also, the owner doesn’t get all the cash up front, which may be a deal-breaker for some. When considering whether an ESOP is right for you, you should consult your legal and tax advisors. When a client is looking toward retirement, we like to present several alternatives built around their needs and objectives. The ESOP is one alternative that can help overcome the hesitation some owners feel about selling. But it’s just one option. Morgan Stanley has been working with family farm owners for many years, and we understand the emotions that come with a decision to sell. It’s a mixed bag. Many of our clients have spent their lives on the family farm. On the one hand, it’s a once-in-a-lifetime opportunity. On the other, it’s a big change. We want to discuss every option and help them make the best choice for themselves and their families. After all, a client only does this once. It’s important to get it right.

and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Morgan Stanley Financial Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

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OnionWorld.net

21


From the NOA

NOA’s New President Draws on Deep Ag Roots to Lead By René Hardwick, National Onion Association Director of Public and Industry Relations

D

oug Bulgrin was just 8 when he found his future – though he didn’t know it. He found a patch of wild onions near his home in Portage, Wisconsin, and played around with transplanting them around the farm. It was an interesting experiment for him since he grew up on a dairy farm, milking cows every morning before school. “All these years later, to think my income would be derived from onions after playing around as a kid pretending to be a farmer,” Bulgrin recalled. Today, he is the 32nd president of the National Onion Association (NOA). Trustees of the NOA elected him to the position in December during the organization’s annual convention in Naples, Florida. And at 46, he’s no longer pretending to farm. He got his start almost 30 years ago working for the Lewiston Corporation, where he got involved in growing onions, corn and soybeans. He started with the planting and harvesting and worked his way up to packing shed manager by the time Gumz Farms bought the operation in 1997. He stayed on managing the shed and all of Gumz’s onion sales. Today, he manages 35 people in the Gumz onion packing shed. In that time, he married Nikki, and they had three kids, all of whom are involved in agriculture in a unique way. “I was looking to involve my boys in something to understand hard work, the ins and outs of agriculture and the fact that sometimes you put forth your best effort and the outcomes can only be determined by Mother Nature,” Bulgrin said. “It was a chance for them to earn some money and for me to spend time with them.” Today, his oldest, Ryan, is 17; Adam is 15, and Emily is 13. The last seven years farming with their dad has introduced them to growing corn and soybeans, and even pumpkins to sell at a roadside stand. It works out perfectly for Bulgrin, who is a bit of a workaholic, easily putting in 14-hour days at his day job. “I find that when we get done here, I do enjoy getting in the combine and going and working at night,” Bulgrin said. “It’s relaxing for me to be involved in farming. It’s just in your blood. Here at Gumz, I do more management, so I don’t get to do equipment operation. I do still get to be involved in things on the farm, whether it be brainstorming ideas on how to improve yields or dealing with flooding. There’s always something new and exciting.” Frankly, that’s what excites him about heading up the NOA. He loves the challenge and solving problems. He got involved with the organization a few years back, working on food safety issues. “Rather than doing what someone has told us to do with food safety, I’d rather be involved in helping create and steer policies and rules that make sense,” Bulgrin said. He will serve as NOA president for two years, and in that time, he wants to concentrate on increasing membership, as well as member participation.

22

Onion World • February 2020

He attended his first Washington D.C. trip with the NOA leadership last year, and his eyes were opened. His expectations going in were, “How can I as one person make a difference?” He quickly learned that he was dealing with human beings – everyday people who needed our industry’s expertise in some of the larger issues affecting the onion industry. “There are a lot of people, I believe, who are not members who do not understand the benefits they are reaping from the NOA,” Bulgrin said. “They’re riding the coattails of the NOA, and I’d like them to recognize that and step up and participate. That awakening in Washington was real. It’s like, ‘We really do matter. We can make a difference.’ I don’t know that all the farmers out there understand that part.” He hopes these next two years will be busy with meeting people, increasing membership and participating in Washington regulations that affect our industry. Bulgrin said it will take everyone in the membership to help it evolve. “If the NOA is going to continue to thrive, we have to evolve,” he said. “We need to hear if things are going well or what isn’t going so well. The more ideas we have out there, the better.”

New NOA President Doug Bulgrin wants to hear from those in the onion industry. Feel free to email him at doug@gumzfarmswi.com.



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Advertiser Index Hotlinks Click on the Advertiser to Jump Straight to Their Ad

ONION SEED

CROP INPUTS

Bejo Seeds Inc.

Nutrien

Gowan Seed

Oro Agri

Nunhems Seed Dynamics Seedway

EQUIPMENT Asa-Lift Chinook Equipment, Inc. Clearwater Supply, Inc. CMI Equipment & Engineering Co.

STORAGE

Cut Above Enterprise, Inc.

Pacific Building Systems

Gearmore Inc.

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Greentronics Industrial Ventilation, Inc. Lee Shuknecht & Sons, Inc

MISCELLANEOUS

Redwood Empire Awning Company South Georgia Equipment

National Onion Association TheOnionPodcast.com

Univerco Verbruggen


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