FarmWeek April 19 2010 by Illinois Farm Bureau

THE OUTLOOK for a state budget in May remains strong after lawmakers returned from spring break last week. ...............................3

A ROBOTIC milking system is allowing a pair of Bond County brothers to improve their herd’s efficiency and give them more free time. .............5

MANY ILLINOIS far mers planted more corn last week than they did during the entire month of April in 2008 and 2009. ................6

Monday, April 19, 2010

Two sections Volume 38, No. 16

Family stories wanted

AFBF kicks off federal ‘death tax’ campaign

BY MARTIN ROSS FarmWeek

Periodicals: Time Valued

Hoping to see Congress gear up to put federal estate tax fears to rest by Memorial Day, the American Farm Bureau Federation (AFBF) has kicked off a national campaign focusing on farmers’ experiences with and concerns about the “death tax.” With farm families in limbo because of the temporary estate tax repeal and the anticipated return of the tax in 2011 at pre-2002 rates and exemptions, AFBF President Bob Stallman last week reiterated a push for at least a $5 millionper-individual/$10 millionper-couple estate tax exemption. Following up on AFBF’s “Don’t Cap Our Future” campaign aimed at defeating congressional climate/cap-andtrade legislation, he announced a new “Put Death Taxes to Rest” campaign focused on selected senators and aimed at putting a face on the impact of estate tax liability on farm heirs. Borrowing Ben Franklin’s oft-quoted observation about the certainty of death and taxes, Stallman argued that “when it comes to death taxes, there

is no certainty,” particularly in a producer’s ability to plan for succession of an operation. Rather than flooding Capitol Hill with mass mailings,

FarmWeekNow.com Listen to AFBF President Bob Stallman’s comments on estate t a x r e f o r m a t F a r m We e k Now.com.

AFBF has asked state Farm Bureaus to provide grassroots stories about the hardships the tax creates for farm owners

and heirs and young and beginning farmers and thus “why we need reform,” he said. According to Stallman, “key Hill leaders” indicate some legislative action may be taken by the end of May, and the postcard/e-mail campaign will continue through the Memorial Day recess. If no action is taken by the end of summer, AFBF plans to launch a full-out “call to action” during Congress’ August break and continuing,

if necessary, through fall. Under a 2001 tax law loophole, the estate tax will return next year with a mere $1 million individual exemption. In December, the House approved a permanent $3.5 million exemption (2009’s threshold), but AFBF believes a $5 million exemption adjustable for inflation and a 35 percent rate would better protect farmers faced with rising farm values. “Politically, full (death tax) repeal is out for the time

being, though some day, we hope we’ll get back to full repeal,” Stallman told FarmWeek. “But right now, we have to deal with the legislative reality of the law reverting to a $1 million exemption and a 55 percent tax rate unless something is done.” To share personal experiences with the estate tax, contact Illinois Farm Bureau National Legislative Director Adam Nielsen at 309-5573152 or anielsen@ilfb.org.

Senate-approved redistricting plan moves to House BY KAY SHIPMAN FarmWeek

The Illinois House last week received a Senate-approved proposal to change how state legislative districts are drawn. A second measure, known as

the Fair Map Amendment, failed on a 5-6 vote in the Senate Redistricting Committee. By 36 to 22, the Senate passed Senate Joint Resolution Constitutional Amendment (SJRCA) 121, dubbed the Citi-

zens First Amendment and sponsored by Sen. Kwame Raoul (D-Chicago). Kevin Semlow, Illinois Farm Bureau director of state legislation, explained SJRCA 121 must go through several steps

TAKING A BREAK

Ty Langham of rural Donnellson in Montgomery County takes a short break from working up a 5-acre field he plans to plant to corn. Langham said he would wait a few days to let the soil dry out before he planted the field. He and his brothers, Hal and Nate, produce corn and soybeans and have a dairy and feeder cattle operation. They will not have a wheat crop this year because their ground was too wet to plant last fall. (Photo by Ken Kashian)

before it could be put before voters. “For the House to take action, the amendment must go through three full readings and will be considered by the House Judiciary I-Civil Law Committee,” Semlow said. “After that, the amendment must be passed by a three-fifths vote by May 2 to be placed on the November ballot.” Earlier, the IFB Legislative Redistricting Working Group had analyzed SJRCA 121 after a presentation on the proposal from Sens. John Sullivan (DRushville) and William Haine (D-Alton) along with Senate staff. Although SJRCA 121 contained some reforms called for in IFB policy, key provisions were missing, the Legislative Redistricting Working Group determined. The members concluded IFB’s priority was to focus on supporting the Illinois Fair Map voter initiative and its legislative equivalent, Senate Joint Resolution Constitutional Amendment (SJRCA) 104; however, SJRCA 104 was defeated in committee. “We continue to support the Illinois Fair Map voter initSee Redistricting, page 3

FarmWeek on the web: FarmWeekNow.com

Illinois Farm Bureau®on the web: www.ilfb.org

FarmWeek Page 2 Monday, April 19, 2010

IFB IN ACTION

Quick Takes BIODIESEL BLUES NEAR END? — The $1per-gallon federal biodiesel tax credit that expired at the end of 2009 could be revived by Memorial Day if House and Senate negotiators can agree on the final version of a tax bill. House Ways and Means Committee Chair man Sander Levin (D-Mich.) said his goal was to have the final bill ready by late May. T he lack of a biodiesel credit this season has prompted shutdowns and layoffs throughout the largely soy-based industry. The House and Senate have been at odds over how to pay for various tax credit extensions. Levin said the key obstacle is the need to secure a filibuster-proof, 60-vote margin in the Senate. ATLANTA GROWER ON POLICY PANEL — Central Illinois producer Ron Kindred will help the American Soybean Association (ASA) develop ag policy recommendations as part of a new 2012 Farm Bill Working Group. ASA leaders met recently with House Ag Committee Chairman Collin Peterson (DMinn.) to discuss his plans for preliminary farm bill hearings beginning this month. “In establishing the working group, I attempted to identify members who will bring experience in key farm policy, crop and revenue insurance, bioenergy, agricultural research, and trade, and perspectives from all soybean production areas,” ASA President Rob Joslin said. “I’ve also included past leaders who have been involved in previous farm bill debates to ensure that ASA is fully prepared to offer and advocate meaningful policies.” Kindred, who raises 550 acres of corn and alfalfa and manages a small beef cow/calf operation near Atlanta, is an ASA board member and secretary and past ASA vice president. OBAMA APPLAUDS CONSERVATION — President Obama last week declared “it’s the right thing to do for the economy” to conserve working farm lands and ranches. The president made his remarks before signing a memorandum outlining administration conservation goals at a White House Conference on America’s Great Outdoors. The conference included panel discussions with local leaders from across the country. Ag Secretary Vilsack moderated a panel focusing on “Conserving working lands for the benefit of all Americans,” while Interior Secretary Ken Salazar moderated a panel focused on “Connecting people to our lands, water, and wildlife.”

(ISSN0197-6680) Vol. 38 No. 16

April 19 , 2010

Dedicated to improving the profitability of farming, and a higher quality of life for Illinois farmers. FarmWeek is produced by the Illinois Farm Bureau. FarmWeek is published each week, except the Mondays following Thanksgiving and Christmas, by the Illinois Agricultural Association, 1701 Towanda Avenue, P.O. Box 2901, Bloomington, IL 61701. Illinois Agricultural Association assumes no responsibility for statements by advertisers or for products or services advertised in FarmWeek. FarmWeek is published by the Illinois Agricultural Association for farm operator members. $3 from the individual membership fee of each of those members go toward the production of FarmWeek.

Address subscription and advertising questions to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Periodicals postage paid at Bloomington, Illinois, and at an additional mailing office. POSTMASTER: Send change of address notices on Form 3579 to FarmWeek, P.O. Box 2901, Bloomington, IL 61702-2901. Farm Bureau members should send change of addresses to their local county Farm Bureau. © 2010 Illinois Agricultural Association

Schutz appreciates past, excited about future BY DANIEL GRANT FarmWeek

Chad Schutz, 31, certainly appreciates the past. The fifth-generation farmer from White Hall in Greene County in his spare time travels the state “fighting battles” as a Civil War re-enactor. “I’ve always enjoyed history,” Schutz said. “It (becoming a Civil War re-enactor) was a good way to combine history” and a passion for horseback riding. But, for as much as Schutz appreciates the past, he is even more excited about the future. The Schutz family in recent years expanded its livestock operation. The move allowed Chad, his father, Kenny, his uncle Bob, his brother, Brock, and a cousin, Jake, to stay on the farm. They also employ a hired man, Frank Rice, who has worked with at least four generations of the Schutz family. “We’ve not experienced a large growth in our land base (on the cash grain side of the business),” Schutz said. “So, for everybody to come back, it (growing the livestock operation) was a good way to expand and keep everybody employed.” Schutz, who last December was elected to represent District 15 on the Illinois Farm Bureau Board of Directors, has a particular interest in his family’s cattle operation. He started the cattle side of the business to complement the family’s hog and crop operations.

“It’s grown from 20 cows to now we’re able to finish 150” annually, Schutz said. Three years ago the Schutz family put up a hoop building to finish cattle. They also use products such as straw and corn gluten in feed rations to make the cattle operation

more efficient. The Schutz family also reduced its risk in the hog industry in 1998 by switching from a farrow-to-finish operation to contract finishing. “We feel we’re in a really good spot,” Schutz said. Schutz and his wife, Stacy, have two children, Lana, 8, and Bridget, 5. He hopes the next generation of his family will have the same opportunity to farm. “Ever since I was little, I always wanted to farm,” said Schutz, who previously served as the president of the Greene County Farm Bureau and is a 2008 Agricultural Leaders of

Tomorrow (ALOT) graduate. He also serves as chairman of the administrative council of Christ United Methodist Church in White Hall and is a member of the Illinois Beef Association and the Illinois Walking Horse Association. Schutz, who obviously wears a lot of different hats, also wears different Civil War uniforms as part of his hobby. He has a Union-blue and Confederate-gray uniform so he can fill any role needed at each battle re-enactment. “It’s an odd but interesting hobby,” Schutz said. “I have a lot of very good friends I met through it.” A highlight of Schutz’s Civil War hobby thus far was a few years ago when he appeared on “80 Acres of Hell,” a History Channel documentary about Camp Douglas in Chicago. Camp Douglas was as tract of land provided by the Stephen A. Douglas estate that was converted from a Union Army training post into a prison camp. The camp became infamous for its inhumane conditions and between 1862 and 1865 an estimated 6,000 Confederate soldiers died there from disease, starvation, or bitter cold winters. Schutz portrayed a Union guard in the film. “It was pretty neat to watch the History Channel and see yourself,” he said. Schutz, as the District 15 director, represents Bond, Calhoun, Greene, Jersey, Macoupin, and Madison counties.

STAFF Editor Dave McClelland (dmcclelland@ilfb.org) Legislative Affairs Editor Kay Shipman (kayship@ilfb.org) Agricultural Affairs Editor Martin Ross (mross@ilfb.org) Senior Commodities Editor Daniel Grant (dgrant@ilfb.org) Editorial Assistant Linda Goltz (Lgoltz@ilfb.org) Business Production Manager Bob Standard Advertising Sales Manager

Richard Verdery Classified sales coordinator

Nan Fannin Director of News and Communications

Dennis Vercler Advertising Sales Representatives

Hurst and Associates, Inc. P.O. Box 6011, Vernon Hills, IL 60061 1-800-397-8908 (advertising inquiries only) Gary White - Northern Illinois Doug McDaniel - Southern Illinois Editorial phone number: 309-557-2239 Classified advertising: 309-557-3155 Display advertising: 1-800-676-2353

Chad Schutz, Illinois Farm Bureau District 15 director from White Hall, walks a horse on his farm recently during a simulation of a soldier preparing for a Civil War battle. Schutz, who produces grain and livestock on his family’s farming operation, combines his passion for horseback riding and appreciation for history into a regular hobby of re-enacting Civil War battles. (Photo by Ken Kashian)

FarmWeek Page 3 Monday, April 19, 2010

GOVERNMENT Spring fever?

Legislators stay busy with legislation and budget

BY KAY SHIPMAN FarmWeek

State legislators, fresh back from spring break, worked expeditiously on legislation, while the outlook for a May budget resolution remained strong last week, according to Kevin Semlow, Illinois Farm Bureau director of state legislation. “Maybe it’s the spring air or just a desire to move quickly and not be trapped in the Capitol in yet another overtime session,” Semlow said. For information on individual bills, go to FarmWeeknow.com. “This is the time of year that proposals that did not see much action have a chance, or new ideas sprout and bloom into a legislative measure,” Semlow explained. In addition, the Senate and House have continued with informational budget hearings.

FarmWeekNow.com Visit FarmWeekNow.com to check on the status of IFB-supported legislation in Springfield.

Semlow anticipated another roll-out of a single massive appropriations bill that would be voted on within a few hours. Many legislators have commented they expect to vote on a state budget in May, he added. While the General Assembly is

scheduled to adjourn on May 7, Semlow said he wouldn’t be surprised if the session ended in late May. Semlow speculated this year’s budget outcome will be similar to last year’s. The General Assembly will approve some cuts, but not enough to offset the $13-billion shortfall. Some political experts are speculating the funding problems won’t be addressed until after the Nov. 2 election, he said. Both the Senate and House appropriations committees have heard the Illinois Department of Agriculture’s (IDOA) proposed budget. Last week in a House Appropriations hearing, Ag Director Tom Jennings noted the number of IDOA employees and its budget are a fraction of what they were just a few years ago, and this year’s budget scenario will further exacerbate the situation. Rep. Frank Mautino (D-Spring Valley), the committee chairman, said the current budget challenges are not the fault of the agency, but the result of the larger state budget problem. The outcome will be reduced funding for all state agencies, including IDOA. Jennings discussed the impact that budget problems are having on entities

that receive their funding through IDOA’s budget. One of those is the University of Illinois Extension. At the hearing, representatives of Extension Partners discussed Extension’s plan to consolidate offices and reduce costs. During the hearing, legislators suggested that all entities that receive funding through IDOA may want to consider an approach similar to what Extension is doing, said Bart Bittner, IFB associate director of state legislation. Adoption of new state fuel standards is another issue that has been discussed recently, according to Paul Cope, IFB assistant director of state legislation. The standards would ensure the quality of gasoline that Illinois is receiving, blending with ethanol, and selling at gas stations to consumers. However, the action on Illinois standards has been put on hold for several reasons, including a new national standard set to take effect in May 2012 for all U.S. oil companies. Major Illinois refineries and the oil and pipeline companies that supply fuel coming from the Gulf of Mexico have informed legislators and IDOA that if Illinois adopts new standards, the refineries and companies would need to produce fuel specifically for Illinois,

IDOA to sprout first green roof on a state building

store it in the Gulf, and send it through the pipelines that supply Illinois. Cope noted IDOA is responsible for fuel inspection in Illinois and for ensuring fuel quality. However, oil refineries in Illinois that do not receive oil from the pipelines also have informed IDOA officials that if the state adopts new standards they, too, will have to produce gasoline that meets new Illinois specifications and store it onsite, Cope explained. These companies also supply gasoline to other states that wouldn’t have the same fuel standards, he added. The companies are saying they would need to refine their fuel more to meet the new Illinois standards and expand their storage facilities for Illinois-specific fuel, which would add to their costs. However, if the state waits until 2012 when the national standards are implemented, then the Illinois-based refineries have said they will produce the same fuel for every state. Over the past several weeks, these issues have been discussed numerous times by members of the General Assembly, IDOA, the Petroleum Marketers Association, American Petroleum Institute, Illinois Corn Growers, Illinois Renewable Fuels Association, IFB, and other entities. IFB will keep members informed as the issue develops, Cope said.

MAKING CIDER

The Illinois Department of Agriculture (IDOA) soon will be green in more ways than one. The IDOA building on the Illinois State Fairgrounds in Springfield will have Illinois’ first green roof on a state-operated building, said David Blanchette, spokesman for the Capital Development Board (CDB). CDB is overseeing the roof project. In June, rooftop trays will be planted with 22,000 square feet of sedum on the roof ’s upper central section. The $2.093 million project includes repairs of the building’s

leaky roof. STR Partners Inc. of Chicago is the project engineer. “The (project’s) major focus was to correct the leaking,” Blanchette said. “The second focus was to make the roof environmentally friendly and efficient, and the best way to do that is with a green roof.” Designed Roofing Systems Inc., Springfield, will replace several levels of the tar-and-gravel roof with insulation and a layer of white poly vinyl chloride roofing membrane. Then, 2-by-2-foot trays that are four inches deep will be installed on the roof. The plants will arrive in the trays, and a small crane will hoist the containers onto the roof. Employees of Designed Roofing will unload and place the trays. The added insulation will help lower energy costs for heating and cooling, while the white membrane will reflect sunlight and also help lower cooling costs, said Blanchette. He noted the plants also will store carbon dioxide, give off oxygen, and help absorb and filter any rain. — Kay Shipman

Aaron Graham, left, of Curtis Orchard & Pumpkin Patch in Champaign watches as Fuji apples brought in from Michigan for a special order of cider move through the production line. At right are Randy Graham, left, co-owner and manager of the orchard, and Cameron Graham. Randy is the father of Aaron and Cameron. The orchard produces about 20,000 gallons of cider a year during its normal production period from August to December. Its cider is a blend of six to 10 apple varieties. Curtis’ 2010 season begins July 20. (Photo by Ken Kashian)

Redistricting Continued from page 1 iative (a petition drive to put the matter on the November ballot),” Semttlow added. In other legislative action, Gov. Pat Quinn last week signed public pension reform legislation. The administration estimated the new law would save taxpayers more than $200 billion over nearly 35 years and stabilize

current employee pensions. The legislation caps pensionable salary at $106,800 and raises the retirement age for full benefits to 67 with 10 years of service. Employees will be eligible for reduced benefits at age 62. The changes apply only to new employees and take effect on Jan. 1, 2011.

FarmWeek Page 4 Monday, April 19, 2010

GOVERNMENT

Breaking E-wall requires clearing roadblocks BY MARTIN ROSS FarmWeek

The ethanol industry continues to battle to reach the next stages of production and market demand despite new estimates that more ethanol use could save drivers at least a nickel per tank more. According to the Renewable Fuels Association (RFA), U.S. drivers could save 12-19 cents per gallon with higher ethanol blend levels. The U.S. Environmental Protection Agency (EPA) is reviewing an industry proposal to permit ethanol blends between the current standard 10 percent and 15 percent (E15). Based on current wholesale prices, ethanol is selling at 70-80 cents less than gasoline even before a 45-cent-per-gallon federal ethanol blenders tax credit is considered. Ten percent blends thus should cost at least 7-8 cents per gallon less at the

pump than gasoline without ethanol, but E15 would save motorists up to a nickel more per gallon, RFA projected. Factoring in the ethanol tax credit, consumers could save “a whopping 19 cents per gallon” with E15, it stated. But corn ethanol remains under attack. The Grocery Manufacturers of America, the American Meat Institute, the National Council of Chain Restaurants, and others have challenged Collinsville Republican Rep. John Shimkus’ push to extend the soon-toexpire ethanol credit for five years. Environmentalists argue EPA has given corn-based plants too much leeway in renewable fuels standard (RFS2) rules, though EPA determined they meet greenhouse emissions thresholds relative to gasoline based on new, revised global land use/climate data and long-term corn yield projections. University of Illinois Biofuels Law and

Regulation Program leader Jay Kesan sees RFS2 as “a victory for ethanol as a whole and for ethanol from grain.” He hopes the biofuels sector will prevail given federal greenhouse reduction goals. “Everyone’s trying to build new technologies and processes to meet higher standards,” he told FarmWeek at a U of I Energy Biosciences Institute conference. “The oil exploration people are trying to do better; corn and ethanol producers are trying to do better. It’s good to have healthy competition, but it’s also good to have everyone moving in the same direction.” Kesan is encouraged by the federal Biomass Crop Assistance Program (see accompanying story), which will “put money in producers’ pockets” to produce cellulosic feedstocks needed to reach long-term RFS2 goals. He acknowledged that biomass production “has not really taken off in the

manner we’d envisioned,” noting EPA reduced its 2010 RFS2 cellulosic ethanol targets from 100 million to 6.5 million gallons. Cellulosic producers “can use all the help they can get,” including ethanol tax credit extension, he said. University of California-Berkeley Environmental Law Program Director Dan Farber is sharply critical of policies he sees as skewed toward corn ethanol. While he conceded corn ethanol “may not be as bad as people have framed” in terms of carbon emissions, Farber suggests the chief benefits of biofuels “mandates” will be to boost fuel prices (in his view, leading to reduced fuel use and lower emissions) and reduce red meat consumption through higher grain prices. Not so, says ag industry consultant Rebecca Richardson, who sees the industry on “the cusp” of cellulosic commercialization — if corn ethanol is allowed to thrive and “evolve.”

SRA poses concerns New York plan Midwest model? for ‘crop-only’ insurers As federal officials propose cuts at both ends of the crop insurance industry ledger, many insurers — and their customers — could be caught in the middle. Ron Pridgeon, Country Financial vice president of corporate actuary, warns a proposed new standard reinsurance agreement (SRA) being negotiated by USDA’s Risk Management Agency (RMA) and private companies could have a dramatic bearing on the financial survival of some insurers who “live and die by the crop results.” The SRA outlines the terms for the government to share in the underwriting gains and losses of the companies as well as provide expense reimbursements for delivery, policy processing, claims investigations and settlement, and other policy expenses. USDA is “attacking things from both directions,” trying to reduce underwriting profitability while realigning administrative costs, Pridgeon said. Because RMA pays expense reimbursements as a percentage of premiums, the government costs and some company expenses rose sharply when crop prices spiked in 2008, and as a result, he said, federal officials are “very frustrated.” “Traditionally, the government reimbursement has not covered our costs,” Pridgeon told FarmWeek. “To the extent (RMA) is not covering our costs, it has a direct impact on the bottom line. “The new SRA will drop our expense reimbursements dramatically and take an even greater portion of our underwriting gains (the portion of premiums above those used to cover claims). This is making it harder for insurers to cover the long-term costs of providing this coverage to their customers.” The new SRA sets several key goals, including efforts to “maintain producer access to critical risk management tools” while ensuring what it views as a “reasonable rate of return” for insurers. At the same time, RMA stressed the need to bring administrative-operating subsidies “closer to actual (policy) delivery costs.” The new SRA also aims to equalize “performance” — or, as Pridgeon puts it, “spread some of the money” — between historically more profitable “ ‘I’ states” such as Illinois and “underperforming” states and “underserved” states such as Alaska and Nevada. The industry already sustained an $8 billion cut in the 2008 farm bill. Country has a diversified insurance portfolio and healthy financial reserves, but Pridgeon noted some crop-only insurers are not as fortunate. The proposed cuts could jeopardize their financial survival or at least the level of service they provide, he said. “This year, premiums are down substantially for the producers, at least in Illinois, because the volatility factors dropped specifically for corn,” said Pridgeon. “That’s reducing the amount of premiums we’re taking in, but not our expenses. “I understand where RMA is coming from; I’m working with them so they understand where we’re coming from. I am hopeful that we can work together to meet RMA’s goal of maintaining producer access while ensuring a reasonable rate of return for insurers.” — Martin Ross

A blueprint for New York policymakers could help provide a template for biomass/biofuels production across the U.S. An August 2009 order from New York’s governor called for an 80 percent reduction in statewide greenhouse gas (GHG) emissions from 1990 levels by 2050. An estimated 40 percent of the state’s GHGs come from transportation. New York-based Pace University’s Pace Energy and Climate Center headed a 40-member team charged with designing a renewable fuels “roadmap”/sustainable biomass feedstock supply study to help rein in vehicle emissions. Center Executive Director James Van Nostrand told FarmWeek the newly released study was designed to create a next-generation biofuels industry “in a sustainable way that doesn’t create an impact on food prices.” The group concluded the state could achieve a 67-85 per-

cent long-term reduction in GHGs through increased biomass-based biofuels use alone. The study focused on cellulosic feedstocks that could be harvested in New York without sacrificing existing food production acres, siting of “biorefineries” within the state to process them, logistics of producing and transporting biomass, and distribution of new biofuels. The center envisioned three potential scenarios for cellulosic biofuels development. “Scenario One basically takes the existing level of (New York) agricultural output and holds it constant,” Van Nostrand said at a University of Illinois bioenergy law and policy conference. “Scenario Two recognizes that we’ll probably have increased crop yields over the next 10 years, and so we may be able to achieve the same levels of crop output and food output on fewer acres of land. That gives you more land available for biofuels production.”

The first two scenarios include four biorefinery “clusters” across the state. A third, “distributed” scenario proposes 24 smaller biorefineries. According to Van Nostrand, that provides an answer to concerns about biofuels transportation costs and emissions related to shipping them over greater distances. That also could generate greater economic opportunity for more communities. Van Nostrand estimates New York’s biomass/biofuels industry could provide 4,000-14,000 jobs, roughly 10 percent of them at the refinery level, a quarter in the trucking sector, and the remainder in agriculture. Unlike California’s disputed new low-carbon fuel standard, New York scientists did not employ theoretical “land use change” models related to the carbon footprint of crop/-biofuels production, instead designing a blueprint that “minimizes effects,” he said. — Martin Ross

Landlord-tenant rights biomass contract issue Good landlord-tenant relations, or laws that clarify landlord-tenant rights, could prove key in biomass contract development. According to University of Illinois law professor Jay Kesan, no standard biomass production/marketing contract has yet emerged largely because USDA is shaping final details of the fledgling Biomass Crop Assistance Program (BCAP). BCAP provides funding for owners and operators of ag and forest lands to receive matching payments for eligible biomass materials sold to qualified conversion facilities for heat, power, bio-based products, or advanced biofuels production. Payments are intended to assist with costs of collecting, harvesting, storing, and transporting biomass to the facility, for up to two years. BCAP also will provide producers of eligible renewable crops within a select area payments up to 75 percent of the cost of establishing the crop and annual payments for up to 15 years for crop production. To receive BCAP subsidies, growers must partner with an area processor who guarantees a

home for harvested material, and once both parties understand program workings, Kesan sees basic contract development “definitely coming.” By tying program support to a guaranteed buyer, BCAP itself provides an important market protection for producers, he maintained. But Neil Hamilton, director of Iowa’s Drake University Ag Law Center, sees several parties playing a possible role in contract biomass production. “One of the underlying issues we have to look at is who actually has the right to those crop residues — the farm tenant or the landlord,” Hamilton told FarmWeek. “This session, the Iowa legislature passed a bill that says unless there’s an agreement in writing that indicates otherwise, the tenant has the right to remove the crop residues. “The common law in Iowa probably would have said they didn’t — that the residues were owned by the owner of the property. The standard lease used by a lot of people in Iowa says specifically you can’t remove those residues without the agreement of the landlord.” — Martin Ross

FarmWeek Page 5 Monday, April 19, 2010

LIVESTOCK Old dairy gets a new look

Robotic milking system works wonders in Bond County BY DANIEL GRANT FarmWeek

Brothers Kyle and Kurt Johnson about six years ago jumped at the chance to take over the Bond County dairy operation of their grandfather, Bill Schrage.

FarmWeekNow.com View our online photo gallery of the VillaRosa Dairy operations in Greenville at FarmWeekNow.com.

But it didn’t take long for the brothers, who currently are in their late 20s, to encounter one of the biggest business decisions of their young careers. “We knew we needed to update,” Kyle said. “Our parlor (which was built in 1957 and could handle only 16 cows at a time) was pretty outdated.” The limitations of the facility meant the Johnsons of Greenville had to work long days (typically from about 4 a.m. to 8 p.m.) to milk their 80-cow herd. The situation also impeded their goal of expanding the operation. “We had to do something,” Kurt said. The Johnsons initially considered investing in a new milking parlor and hiring outside labor until they toured dairies in Wisconsin and Minnesota that used robotic milking systems. “We were amazed,” Kyle said. “We liked what we saw.” The Johnsons subsequently installed a Lely Astronaut A3 robotic milking machine on their farm and in December converted their operation to a fully automated system. There are two milking devices on the machine, each

is open 24 hours a day except for two 15-minute wash cycles, and each can service 60 cows per day. The cows are drawn to the robots with high-energy feed and are able to eat and be milked, at any time of the day or night, without human intervention. “We’ve increased production by about 10 to 12 pounds (per cow) per day,” Kyle said. “That is easily making the payments to the bank” to cover the cost of the robotic system. In fact, the Johnsons calculated the investment in the robotic milking system actually was cheaper than building a new parlor with traditional technology and hiring out the labor for their operation, VillaRosa Dairy. Installation of the robots was a snap, according to Kyle, who said they simply needed to run power and water to the machines. And, after a few weeks to get the cows acclimated to the new system, the operation currently is averaging three milkings per animal per day. “It’s more than just a milking machine. It’s a great management tool,” Kurt said. “We’ve been able to manage things a lot closer with the information (such as cow weights and somatic cell counts) we get from the robots.” The new system is working so well the Johnsons plan to expand their herd to 120 milking cows within the next month. “It makes sense to max the robots out,” Kyle said. “We also started doing some contracting. The price of milk the last two years (was very

Brothers Kyle, left, and Kurt Johnson, Greenville, have a leisurely chat during a pleasant day last week as their dairy cows are milked by a new robotic milking system installed in December. The Johnsons said the robotic system has increased milk output, improved herd management, and reduced human labor on their operation (VillaRosa Dairy) and provided an opportunity to expand the operation from 80 to 120 cows. (Photos by Ken Kashian)

volatile) so we’re trying to lock in a price that allows us to live comfortably.” The Johnsons recently held an open house to showcase the robotic system. The event drew roughly 170 people. The brothers also are willing to give private tours to producers who may be considering a robotic system, as similar tours played a crucial role in their decision. “We’ve been really happy with it,” Kurt added. “We’ve had non-stop visitors.” And even more importantly, the brothers say that since updating their operation they’ve been able to spend more time with their families — and get more sleep.

Say cheese? A dairy cow at VillaRosa Dairy in Greenville is so relaxed it appears to pose for a photo last week while being milked by a Lely Astronaut A3 robotic milking system. The cows are drawn to the milking stalls by high-energy feed and are free to “milk themselves” at any time of the day.

A robotic milking machine gets into position to milk a cow at VillaRosa Dairy in Greenville. The milking cups are directed by a laser. The new system at the facility has increased milk output by 10 to 12 pounds of milk per cow per day. It is fully automated and doesn’t require human intervention for the milking process.

FarmWeek Page 6 Monday, April 19, 2010

PRODUCTION

Corn planting off to best start in three years BY DANIEL GRANT FarmWeek

Many farmers in the state planted more corn last week than they did during the entire month of April each of the past two years. Emmett Sefton, a farmer from Dalton City in Macon County, on Thursday told FarmWeek he was on pace to finish planting corn by the weekend, depending on the weather. Last year, the Seftons finished planting corn on May 22. “We’re very fortunate to get some awfully good weather,” said Sefton, who estimated corn planting by the end of last week was 30 to 40 percent complete in his area. “The ground is working real good.” The warm, dry conditions for much of the past two weeks was a sharp contrast to April 2008 and 2009 weather conditions, which were cold and wet. Farmers in the state through April 27 planted just 4 percent of the corn crop in 2009 and 5 percent in 2008 compared to the five-year average of 43 percent.

Jerry Miller, Thompsonville, checks his planter set-up in a mid-round stop during the first day of his corn planting season on April 12. Miller described planting conditions last week as “very good” as the temperature was in the low 80s. It was estimated Franklin County farmers last week planted a quarter of their corn crop. (Photo by Larry Miller, manager of the Franklin County Farm Bureau)

“I’ve farmed a long time (47 years), and there never has been two years the same,” Sefton said. “We’re used to that.” Elsewhere, Larry Miller, manager of the Franklin County Farm Bureau and a farmer from Thompsonville, estimated 25 percent of the corn crop was in the ground in

his area late last week. “It really was ideal for corn planting (last week),” Miller said. “We probably didn’t have better conditions all of last year.” The temperature last week peaked in the upper 80s in Southern Illinois, low- to mid80s in Central Illinois, and high 70s to low 80s in North-

ern Illinois, according to James Auten, meteorologist with the National Weather Service. “In the last week we’ve

been running on average 12 to 15 degrees above normal,” Auten said on Friday. “The ground really is beginning to dry out” due to warmer temperatures along with lower dew points and gusty winds. Some areas were getting light rain on Friday. However, conditions should remain conducive to fieldwork for much of this week, although the temperature likely will be closer to normal, Auten said. “This week looks dry except for a chance of precipitation late in the week around Thursday,” Auten said. “Temperatures likely will fall back to the 60s for highs, which is closer to normal.” Nationwide, corn planting at the beginning of last week was 3 percent complete compared to 2 percent last year and the five-year average of 4 percent.

Advice to farmers: monitor alfalfa growth Farmers the next several weeks should monitor the growth of alfalfa to maximize the relative feed value at the first cutting, according to Dave Fischer, University of Illinois Extension dairy educator. Development of the crop last week generally was ahead of last year’s pace. Measurements in Southern Illinois alfalfa fields ranged from 12 inches to as much as 14 inches in a Clinton County field and 18 inches at one location in Perry County. “The sunny, warm conditions have the alfalfa crop just a little ahead of last year,” Fischer told FarmWeek prior to an oncoming cold front and chance of thunderstorms late last week. The condition of the state’s alfalfa crop the first of last week was rated 73 percent good to excellent, 23 percent fair, and just 4 percent poor or very poor, according to the National Agricultural Statistics Service Illinois field office. “We’re hoping to have a more ‘normal’ first alfalfa harvest,” Fischer said. “That means by Dave Fischer the third and fourth weeks of April, things will be happening” in Southern Illinois. Farmers in the meantime should measure the growth of the alfalfa crop and monitor its condition and maturity stages. The goal, based on the Predictive Equation for Alfalfa Quality (PEAQ) program, is to harvest alfalfa when its relative feed value (RFV) is about 165 to 170. Producers can calculate the RFV of each of their fields at the website {http://peaq.traill.uiuc.edu/}. “It’s important to measure every field,” Fischer said. “One field in a county could be 18 inches and another could be 20.” It’s also important for producers to monitor their own alfalfa fields this spring as the U of I Extension recently fine-tuned its PEAQ program and no longer will calculate average alfalfa growth measurements for each region of the state. That information was provided each of the past 13 years and appeared in a FarmWeek graphic, which has now been discontinued, in the weeks leading up to the first alfalfa harvest. “The website will still be there,” Fischer noted. “This is a great tool and it’s pretty simple.” Farmers should measure alfalfa growth twice a week once the crop reaches 14 to 16 inches in height, he said. They also should check on the presence of alfalfa weevils, which currently are active in Southern Illinois. At this point, Fischer recommended farmers avoid using a full-rate of insecticide, which has a 14-day wait period, to combat weevils and instead either apply a half-rate, which has a seven-day wait period, or harvest early.— Daniel Grant

FarmWeek Page 7 Monday, April 19, 2010

POLICY

Thompson: budget, global view to season ag debate BY MARTIN ROSS FarmWeek

Given budget pressures and global scrutiny, University of Illinois economist Bob Thompson suggests Congress may be forced to replace “this jerrybuilt ag policy we have today” with a new safety net emphasizing overall farm revenue. Budget costs will be “the biggest driver of the next farm bill debate,” Thompson told FarmWeek. He sees the stage for ag program scrutiny being set amid mounting national debt and “our borrowing everything we’re spending in the (federal) stimulus program from abroad” (see accompanying story). As Congress crunches numbers, he urges farmers to consider what they want the U.S. government to accomplish for agriculture. As “the most capitalintensive sector of the American economy,” with a heavy reliance on debt rather than farm equity financing, production agriculture is “particularly vulnerable to extreme volatility,” he noted. Thompson thus advocates subsidizing a whole-farm revenue insurance program that would enable producers to meet annual debt obligations despite low prices or poor yields or both.

“What are we spending money on?” he posed. “(Loan deficiency payments), countercyclical payments, direct payments, subsidies for crop insurance, and disaster payments. We have a group of overlapping programs that are duplicative at times and don’t really make any sense as a package. It’s a jerry-built house. “If we really wanted to make a change that would make sense, we’d take everything we’re spending on all five of those programs, put it in a pot, make whatever contribution you had to for deficit reduction, and then put the rest into a subsidy for a whole-farm revenue insurance program.” Thompson views the wholefarm component as crucial, given pressure on commodity-specific supports believed to influence global markets and prices. Commodity-neutral payments would fall outside the World Trade Organization’s (WTO) “amber box” category of capped domestic ag subsidies. Direct payments have been included in the WTO’s unregulated “green box,” but Congress is feeling increased pressure over subsidies that benefit major commodities but do not support fruit or vegetable producers. Canada, Brazil, and others

have challenged the green box status of direct payments. That could leave the U.S. exposed to an unfavorable WTO ruling against the program mainstay. The U.S. recently agreed to enter into concrete negotiations to settle a longstanding dispute with Brazil over U.S. cotton subsidies, in exchange for Brazil postponing trade countermeasures set to kick in this month. Thompson called the deal “a travesty,” arguing domestic cotton interests persuaded the U.S. to “thumb its nose at the WTO.” Rather than serving to “change the cotton program” in line with the WTO ruling, the 2008 farm bill largely “reaffirmed” it, the economist said. Thompson cites further erosion in global perceptions of U.S. farm subsidies at a time when prospects appear dim for a WTO Doha Round agreement that would clarify future ag support levels. “The way I see it, we bribed Brazil to back off until 2012 in implementing retaliatory measures it was authorized to take,” Thompson said. “We’ve bought nothing in the court of public opinion worldwide, other than perhaps some further distaste about the U.S. not honoring its international commitments.”

Sweeping river reform plan on way to Hill A plan aimed at speeding construction of new locks on the Illinois and Upper Mississippi rivers has been floated to Congress, where shippers, producers, and others hope to successfully negotiate currently choppy political waters. Last week, the federal advisory Inland Waterways Users Board supported recommendations from an industry-U.S. Army Corps of Engineers working group designed to improve domestic navigation over the next 20 years. The new Inland Waterways Capital Development Plan would require an increase in the 20-cent-per-gallon fuel tax currently paid by the barge industry. That would shore up a waning Inland Waterways Trust Fund, which provides 50 percent of funding needed for major projects such as seven new 1,200-foot locks on the Illinois and Upper Miss. The plan preserves the 50-50 industry-federal cost-share formula for new locks and major rehabilitation projects costing $100 million or more, but proposes 100 percent federal funding for non-navigational dam construction and smaller lock rehab projects that currently tap trust fund revenues. Further, the plan seeks a cost-share cap that would prevent the industry from having to fund major cost overruns that result from delays in lock

construction. The plan and user board recommendations will be sent to Capitol Hill. “It’s going to be a challenge to get a water resources bill moving this year with the election and the lack of bipartisan ‘energy,’ for lack of a better word,” WCI Midwest Vice President Paul Rohde told FarmWeek. More than 150 industry “stakeholders” support the plan, including American Soybean and the National Corn Growers Associations; Illinois Farm Bureau and state corn, soybean, fertilizer and chemical, and biotech organizations; and several Illinois county Farm Bureaus. GROWMARK, Cargill, Valero Energy, Citgo and Marathon petroleum companies, and Clarkson Grain Co. are among corporate supporters. The St. Louis Chapter of Ducks Unlimited is among the latest in a list of diverse groups urging plan passage. The plan was promoted as an alternative to a new, administration-proposed per-barge, perlock fee. Without added trust fund revenues and the plan’s new approach to prioritizing and managing projects, “we will wait too long to see the first new lock built,” Illinois Farm Bureau National Legislative Director Adam Nielsen warned. “Under the plan, if adopted by Congress and signed into law by the president, construction on (Upper Miss) Lock 25

would begin next year,” Nielsen noted. “Construction on Lock 22 would begin a few years later.” — Martin Ross

Fiscal policy leaves U.S. in a precarious position U.S. debt — and resulting reliance particularly on China’s substantial financial resources — has left debtor and creditor alike poised on a “razor’s edge,” University of Illinois economist Bob Thompson warned FarmWeek last week. Failure to bring federal spending and the deficit into line is “further increasing the clout China and Japan have over the strength of the U.S. dollar,” said Thompson, who discussed key issues with an Illinois State University audience last week. China trimmed its holdings of U.S. Treasury debt 1.3 percent in February — a fourth consecutive decline that raises concerns the U.S. could face higher interest rates in financing soaring budget deficits. The Treasury Department reported China’s holdings dropped $11.5 billion to $877.5 billion, but China remains the largest foreign holder of Treasury debt, followed by Japan with $768.5 billion. “Either one could unilaterally determine the value of the U.S. dollar by how fast they try to diversify their holdings of U.S. government instruments,” Thompson argued. “Either Japan or China owns enough accumulated U.S. government debt that if they start-

ed cashing it in at any point, they could drive the dollar as low as they wanted to drive it. “Obviously, neither of them, as important exporters to the United States, is inclined to do that. If they drive the dollar down, they’re increasing the value of their currencies relative to the dollar, and that makes it hard to sell into the U.S. market. “They’re sort of balanced on a razor’s edge, but they’re our bankers, and we pretty much have to dance to the tune they dictate.” Neither country is likely to call their U.S. notes in the foreseeable future, Thompson said. But he believes either could boost interest rates to offset any U.S. effort to “crank up the printing press” and effectively write down the value of its debt with “cheaper dollars.” The future policy and trade implications of U.S. indebtedness are “very difficult to predict,” the economist said. Thompson noted the U.S. “obviously is not the only country that’s encouraging China to let its currency appreciate” in the interest of holding the line on Chinese imports. However, Europeans governments with far lower debt probably have “more leverage” over the Asian superpower, he said. — Martin Ross

FarmWeek Page 8 Monday, April 19, 2010

EDUCATION

University of Illinois graduate students, left to right, Charles Cole Hendrix, Joshua Bates, and Justin Ma, inspect soybeans in the greenhouses next to Turner Hall. The three grad students are among the wave of future plant breeders involved with the U of I Illinois’ Illinois Plant Breeding Center. (Photo courtesy U of I)

U of I nurturing future plant breeders BY KAY SHIPMAN FarmWeek University of Illinois graduate students Edhilvia Campos, left, and Brian Cho study a gel showing expression of small RNAs in soybean tissue. They are working in a lab that is part of the molecular group in the U of I’s Illinois Plant Breeding Center program. (Photo courtesy U of I)

Improved crop yields, pest and disease resistance, plant stress tolerance, and other scientific breakthroughs are the

goal of future plant breeders studying at the University of Illinois’ Illinois Plant Breeding Center (IPBC). “I’d like farmers to know we’re looking out for their best interests,” Rita Mumm, IPBC’s director, told FarmWeek. Without the next generation of plant breeders, new crop advancements won’t be achieved, she noted. “I feel I’m part of the scientific community that is working on behalf of farmers in the U.S. and around the world — and those of us who eat,” Mumm added. The nation is experiencing a severe shortage of plant breeders, and the demand is expected to continue as more than half of the seed industry workforce will retire within the next 10 to 15 years. Mumm estimated U.S. institutions that educate graduatelevel plant breeders are meeting less than two-thirds of industry demand. IPBC was organized a year and a half ago to help meet the demand for plant breeders with master’s degrees and doctorates. In that brief time, its graduate program has grown 90 percent. Twenty-nine professors in various crop and disciplinary areas teach at IPBC and mentor students who conduct thesis research in the labs. Most students are awarded assistantships or fellowships. IPBC awards 21 merit-based fellowships, sponsored by industry and private donors. Mumm said it’s encouraging to see a “rallying of the seed industry” to support the next generation of

plant breeders. Mumm encouraged interested students to go online to {http://plantbreeding.illinois.e du} for information about IPBC and educational opportunities. Admission is a two-step process. Students first must apply to and be accepted by the U of I Graduate College. Once they are accepted, students may specify their interest in agriculture and plant breeding. She recommended students also contact IPBC faculty members about their research areas and whether they have any openings in their lab. “I tell students, ‘Don’t be shy about contacting faculty members,’” Mumm said.

‘ I t ’s a r e d - h o t a r e a , ve r y c u t ting edge.’ — Rita Mumm director University of Illinois’ Illinois Plant Breeding Center

One of Mumm’s concerns has been decreased interest of students who grew up on farms. She speculated some students may mistakenly consider plant breeding a low-tech field. “We’re making breakthroughs all the time in genetics,” Mumm said. “It’s a redhot area, very cutting edge. Farm kids, there are great career opportunities out there.”

FarmWeek Page 9 Monday, April 19, 2010

HAPPENINGS

Harness racing exhibit to open at Lincoln Library NRCS accepting Ag Water A new temporary exhibit graphs are on loan from The • Photographs of Old Bob, Enhancement Program proposals about harness racing will open Harness Racing Museum & the last horse Lincoln owned May 1 at the Abraham Lincoln Presidential Library, Springfield. The centerpiece will be 35 framed, original Currier & Ives lithographs that depict equestrian scenes from the 1800s. These color illustrations will be complemented by original artifacts from the Presidential Library’s collections. The exhibit may be viewed weekdays free of charge through Aug. 31. The Currier & Ives litho-

Hall of Fame, Goshen, N.Y. A full-size horse figure and two sulkies will be on display courtesy of John Cisna. The Presidential Library will add items from its own collections that reflect the history Illinois’ horse racing industry. The items include: • 1836 race results and membership lists of the Petersburg, Ill., Jockey Club, a group that used the racetrack surveyed by Abraham Lincoln;

before leaving Springfield as president-elect; and photographs of Ulysses S. Grant’s three black horses his saddle used in the Civil War; and • Vintage photographs, postcards, and publications from horse races at the DuQuoin and Illinois State fairs. For more information, go online to {www.presidentlincoln.org}. The library is open free of charge weekdays from 9 a.m. to 5 p.m.

Co-op Youth Conference planned at SIU Southern Illinois University’s (SIU) division of continuing education along with its College of Agricultural Sciences will host the Cooperative Youth Conference June 3-4 on the Carbondale campus. Participating high school seniors and juniors will learn about cooperatives

through hands-on activities, attending workshops led by cooperative employees, and touring local cooperative businesses. The conference will start at 9 a.m. June 3 and conclude at 1:30 p.m. June 4. Interested students must submit a $30 deposit to hold a seat. The money will be returned when

Eisenhower Fellowships seeks farmer applicants Eisenhower Fellowships, an international leadership development program, is accepting applications from experienced farmers for a 2011 Agricultural Fellowship. The successful applicant will receive a customdesigned, all-expenses-paid program overseas for up to five weeks in one or two countries where he or she will focus on agricultural issues. Applicants must be a practicing farmer, aged 32-45, have demonstrated leadership experience, be a U.S. citizenship or permanent resident, and be willing to commit to at least 15-20 years of further active leadership in agriculture. Application deadline is July 1, 2010. All Interviews will be held in mid- to late July. For more information and to download applications, visit {www.eisenhowerfellowships.org} or contact Julia Ransom, Eisenhower Fellowships, at jransom@eisenhowerfellowships.org, or by phone at 215-546-1738.

FROM THE COUNTIES

UMBERLAND — Far m Bureau will sponsor a bus trip S u n d ay, Au g. 1 5 , t o S t . Louis to see the St. Louis C a r d i n a l s v s. C h i c a g o Cubs game. The bus will l e ave t h e Fa r m B u r e a u office at 10 a.m. Cost is $65 for members and $70 for non-members. Call the Farm Bureau office at 217-849-3031 for reservations or more infor mation. D G A R — Far m Bureau will sponsor a bus trip May 12 to the Beef and Boards Dinner Theatre, Indianapolis, Ind., to see “Always Patsy Cline.” Cost is $68, which includes bus, buffet lunch, a d m i s s i o n t o t h e s h ow,

and g ratuities. Call the Fa r m B u r e a u o f f i c e a t 217-465-8511 for reservations or more infor mation. • Far m Bureau will sponsor a bus trip Aug. 6 to Wrigley Field to see the Chicago Cubs vs. Cincinnati Reds game. Cost is $80, which includes bus, admission to the g ame, and gratuity for the bus d r i v e r. C a l l t h e F a r m Bureau office at 217-4658511 for reser vations or more information. “From the counties” items are submitted by county Farm Bureau managers. Contact your Farm Bureau manager if you have an event or activity open to all members.

they attend the conference because each attending student will be sponsored by a cooperative or county Farm Bureau. For more information or to register, contact the division of continuing education at 618536-7751 or go online to {www.dce.siu.edu}. For information about sponsoring a student participant, contact the division’s Jack Welch at 618536-7751.

The Natural Resources Conservation Service (NRCS) has $61.2 million available for Agricultural Water Enhancement Program (AWEP) projects. The funding will help farmers conserve surface and ground water and improve water quality on agricultural land. May 17 is the deadline for partner organizations to submit proposals. “By working with our partners, we will see more water conservation on working lands and more opportunities to improve water quality,” said Bill Gradle, NRCS state conservationist. AWEP projects are implemented after NRCS enters into agreements with eligible entities to help landowners plan and implement conservation practices in established project areas. Eligible partners include federally recognized Indian Tribes, state agencies, local governments, agricultural associations, and other producer groups, such as irrigation associations, agricultural land trusts, or other non-governmental groups that have experience working with farmers. After an AWEP project area has been approved and announced, individual farmers may apply for program benefits through their local NRCS office. Types of water activities may include: water quality or water conservation plan development; water conservation restoration or enhancement projects; water quality or quantity restoration or enhancement projects; irrigation system improvement and irrigation efficiency enhancements; activities to mitigate the effects of drought; and activities to help achieve water quality or water conservation benefits on agricultural land. For more AWEP information or to apply, go online to {www.nrcs.usda.gov/programs/AWEP/}.

FarmWeek Page 10 Monday, April 19, 2010

PROFITABILITY

In pursuit of those maximum corn, bean yields BY MATT HYNES

We have heard a lot of talk about the idea of obtaining maximum yields for both corn and soybeans. The discussion has come about because the world population is projected to grow to more than 9 billion Matt Hynes people by 2030, while the amount of arable land per capita decreases. So how will we be able to feed all the people? This problem is compounded by the fact that when incomes rise in developing nations, people shift their diets from strictly carbohydratebased to a diet including more

calories from protein sources such as meat, milk, and eggs. Just to meet those demands, the world agricultural community will have to increase corn production by 76 percent and soybean production by 125 percent. The growth demand for feed alone is projected to require approximately 250 million incremental acres from 2000, more than the total acreage planted to U.S. corn, soybeans, and cotton today, if yields remain constant. So how do we get there? There are three pieces to the puzzle: breeding, biotech, and agronomics. It will take a combination of all three to accomplish feeding the world. Today, we have to rely on the major seed companies and trait providers to improve the

M A R K E T FA C T S

Feeder pig prices reported to USDA*

Weight 10 lbs. 40 lbs. 50 lbs. Receipts

Range Per Head Weighted Ave. Price $34.45-$50.00 $40.81 $70.00-$75.00 $73.26 n/a n/a This Week Last Week 27,771 11,788 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week $78.09 $72.69 $57.79 $53.79

Change 5.40 4.00

USDA five-state area slaughter cattle price Steers Heifers

This week $97.67 $97.25

(Thursday’s price) Prv. week Change $99.73 -2.06 $100.78 -3.53

CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states. (Prices $ per hundredweight) This week Prev. week Change 113.45 111.68 1.77

Lamb prices Confirmed lamb and sheep sales This week 926 Last week 722 Last year 1,211 Wooled Slaughter Lambs: Choice and prime 2-3: 90-110 lb., $110. Good and choice 1-2: 60-90 lbs., $135. Slaughter Ewes: Utility and good 1-3: $43-$45. Cull and utility 1-2: $32-$36.

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 04-08-10 13.4 17.1 32.0 04-01-10 17.1 21.2 41.9 Last year 24.3 21.0 33.1 Season total 1268.1 726.6 1044.4 Previous season total 972.3 881.3 1003.6 USDA projected total 1420 825 1900 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

breeding and biotech. The final piece of the puzzle is agronomics. The American farmer and partners such as the GROWMARK System will have a significant role to play in shaping the agronomics. We have launched an FS Green Plan Solutions OnFarm Discovery program in pursuit of maximum yield. This program is designed to take the leadership position in working with growers to approach the market differently and explore new ideas on

how to raise yields. This means recommending and positioning the right hybrids and varieties and looking at new and better ways to control weeds and protect the crop through fungicides, insecticides, nematicides, and biological methods. We will look at anything that may be limiting yields. This is called the “Law of the Minimum” — certain environmental conditions, cultural practices, and nutrient concentrations are necessary to maximize harvest yield.

Any one individually can limit the potential yield of what comes out of the bag, regardless of whether all other conditions, cultural practices, and/or nutrient levels promote maximum yield. Talk to your local FS crop specialist if you are interested in being part of this exciting program and continuing to keep the U.S. farmers the best in the world. Matt Hynes is FS’ seed sales and marketing manager. His e-mail address is mhynes@growmark.com..

Agriculture Index debuts

DTN product takes ‘economic pulse’ of ag economy BY DANIEL GRANT FarmWeek

Market analysts, investors, and anybody else concerned about the economic recession the past two years likely kept an eye on the Consumer Confidence Index (CCI) The CCI, which was started in 1967, is calculated each month from information gleaned from household surveys of consumers’ opinions on current economic conditions and expectations of the economy in the future. However, when it came to economic forecasts for farmers and agribusinesses, similar information about the ag economy was difficult to find. Until now, according to Mary Rose Dwyer, DTN product manager. DTN today (April 19) unveiled its new Agriculture Confidence Index (ACI) that is designed to gauge the financial health of the ag sector. “It’s important to take the economic pulse of the ag industry,” Dwyer told FarmWeek. “This information (in the past) was not available.” The ACI, which DTN promoted as “the industry’s first index designed to determine the level of optimism producers have concerning the current and future financial health of their operations,” was modeled after the nationally recognized CCI. DTN/The Progressive Farmer with the launch of the ACI will survey a sampling of 500 American farmers three times each year — pre-planting, pre-harvest, and at the end of the year — to produce the index. The ACI then can be used as a resource to assist farmers and agribusinesses with dayto-day or long-term business decisions. “Producers can look (at the ACI) as a way to get a broader industry perspective and com-

USDA recently projected U.S. net farm income this year will total $63 billion. If realized, farm income would be up 11.8 percent compared to 2009 but would be $1.4 billion below the most recent 10-year average. Crop receipts this year were projected to decline by $6 billion while livestock receipts were projected to rise by $11.5 billion. DTN will ask 500 farmers their opinions about farm income and other economic indicators three times a year to produce its new Agriculture Confidence Index (ACI). The ACI debuted this week.

pare their operations to others,” Dwyer said. “For agribusinesses, this will be good information that could impact everything from inventory planning to business decisions.” The survey for each ACI will draw on the most recent data from the USDA Ag Census (2007) to ensure each sampling is representative of the major types, sizes, and loca-

tions of U.S. farms. Farmers selected for the survey will be asked a handful of questions that will gauge their level of optimism for current and future input prices, commodity prices, and farm income, among other economic indicators. Those interested in the findings may view the ACI online at {www.AgricultureConfidenceIndex.com}.

FarmWeek Page 11 Monday, April 19, 2010

PROFITABILITY Corn Strategy

C A S H S T R AT E G I S T

Trend points to higher yields As you know, rapid planting progress tends to ensure good yields for any corn crop. This winter nearly all weather forecasters were concerned the wet soils and heavy snowcover could lead to another troublesome spring. Such has not been the case. Unusually warm temperatures and drier than normal weather have rapidly depleted the excess soil moisture across a wide swath of the Corn Belt and the South. Although temperatures are expected to fall back toward more normal levels, precipitation for the next seven to 10 days is generally going to be less than normal. And the new 30day forecasts favor a relatively normal May. In the accompanying graphic, we have compared corn yields (as a percent of trend) to planting progress by May 1. We allowed a one-week shift in the

Basis charts

planting data prior to 1990 to equalize the general shift to earlier planting and increase in planting capabilities in recent years. It’s interesting to note that few yields fall short of 95 percent of trend no matter the planting date. The two years that had yields well under trend even though corn planting had gone reasonably well were 1974 (77.8 percent of trend) and 1988 (76.9 percent of trend). If you discount those two years because of continued weather problems during the growing season, corn yields on average tend to come in 1.5 percent above the trend we are using. That points to a 163bushel average corn yield for the crop being planted. Furthermore, if you kick out 1976 and 1980, summers that had moderate weather stress as well, the average of the years is lifted to 2.8 percent above trend, a 165-bushel yield. So far, there are some weather parallels to 1977, suggesting it’s a year to keep an eye on. Planting went well that year and the yield was g ood, the second best behind 1972’s record. But it was still a little below what we consider the best-fit trend yield. That year’s crop came on the heels of a year when corn and wheat stocks were building. And even though the crops weren’t necessarily exceptional, they were still large enough to allow supplies to build even further. That’s the danger of this year, especially with planting going well. Not only does it tend to point to good yield potential, but we’ll probably add acreage, too. And just like 1977, we can foresee the possibility of supplies growing a little more. AgriVisor endorses crop insurance by

AgriVisor LLC 1701 N. Towanda Avenue PO Box 2500 Bloomington IL 61702-2901 309-557-3147 AgriVisor LLC is not liable for any damages which anyone may sustain by reason of inaccuracy or inadequacy of information provided herein, any error of judgment involving any projections, recommendations, or advice or any other act of omission.

Policies issued by COUNTRY Mutual Insurance Company®, Bloomington, Illinois AgriVisor Hotline Number

309-557-2274

Cents per bu.

2009 crop: Prices on July futures penetrated both $3.71 and the 20-day moving average resistance levels. This opens the door for a possible move to $3.75-$3.85. However, the longer-term bias remains bearish with the 40-week cycle expected to bottom in June. Get sales to 90 percent complete with July futures trading at $3.70 or higher. We might complete them at any time. Check the Cash Strategist Hotline daily. 2010 crop: Our $3.89 target on December futures was hit, lifting sales to 40 percent. Check the Cash Strategist Hotline frequently; we may increase sales to 50 percent at any time. Fundamentals: Corn Belt farmers are expected to m a ke s i g n i f i c a n t p l a n t i n g progress with the nearly ideal conditions. The seven- to 10day maps call for more of the same, although temperatures could drop back to nearer normal. Hopes are still alive that the Chinese will provide some export business. Fail-safe: If July futures drop below $3.65, wrap up old-crop sales.

Soybean Strategy 2009 crop: Rising Chinese import forecasts and firm cash markets have lifted soybean prices steadily higher. Use short-term rallies for making catch-up sales. Prepare to wrap up old-crop sales at any time. Check the Cash Strategist Hotline frequently. 2010 crop: The rally has lifted prices to a level at which upside progress will be more difficult. Get sales to 40 percent complete now. Fundamentals: Chinese soybean import expectations were revised upward this past week. The persistent premium of domestic prices is pushing users to import more of their needs than previously anticipated. Some of that will come from the U.S. with logistical issues capping users’ ability to obtain supplies from South America. China’s dispute with Argentina over soybean oil imports may help boost soybean imports, too.

Fail-safe: If July futures drop below $9.84, wrap up old-crop sales.

Wheat Strategy 2009 crop: Wheat continues its choppy sideways trade with a slightly positive bias. The July contract is back above the 20-day moving average. However, rallies may be limited by the influence of the 40-week cycle that is expected to bottom in June. Prices reached our $4.70 target on May futures, wrapping up oldcrop sales. If you failed to pull the trigger, use rallies to get it done.

2010 crop: Chicago July futures hit our $4.90 target to make an initial 25 percent sale. We may advise additional sales at any time, especially for those who sell wheat at harvest. Check the Cash Strategist Hotline daily. Fundamentals: Wheat continues to feel the pressure of big global supplies. That has been reflected in weekly export sales again, as they are starting to fall short of expectations. Wheat will be more vulnerable to cold weather over the next few weeks, a factor that may temporarily limit downside risk.

FarmWeek Page 12 Monday, April 19, 2010

PERSPECTIVES

The image of farmers past influences today

n April 22, 1970, more than 20 million people celebrated the first Earth Day. Sen. Gaylord Nelson was responsible for the creation of Earth Day. He tried to get it put on the political agenda as early as 1963, but other issues overshadowed the “environment.” On Nov. 30, 1969, a lengthy article in the New York Times about a day of observance in the spring of 1970 on environmental concerns gave the environmental movement the springboard it needed. That is when the grassroots effort took hold. People began to raise their voices about what was happening to the land, rivers, lakes, and air. If this grassroots effort sounds familiar, it is also what Farm Bureau is all about. Even though Earth Day is a one-day observance, farmers observe Earth Day every day. Whether it is their decision to notill farm or use conservation tillage, grass waterways, terraces, or filter strips along water courses, farmers are environmentalists DENNIS each day. HAAB The reduced use of chemicals and fertilizers plus the way they are applied through precision methods are other ways farmers are protecting the environment. Every year, teachers will teach students about Earth Day and how those students can make a difference. Agriculture should be part of the lesson plan. Farmers help provide food for the world and do it in an environmentally sensitive way. Farmers need to become teachers and tell their own story instead of letting others who are not involved in agriculture tell their views of farming. It is encouraging to know that the younger generation is involved. About two years ago, students at Pontiac Township High School started a prescription drug disposal program to properly dispose of

LEADER TALK: What policy issue should Farm Bureau be addressing in the next five years? Editor’s note: Members of the Illinois Farm Bureau Grassroots Issue Teams (GRITs) were asked for their views on several questions. Their responses will appear periodically on the Perspectives page.

unwanted or unused drugs. Before the program was enacted, many people would simply flush their drugs down the toilet. It doesn’t sound like a problem, but a huge one was created because the active ingredients in the drugs did not break down during the water treatment process. The active ingredients remained active for years and seriously affected water quality. Due to the efforts of these students, the program spread across the state and the country. Every effort, no matter how small, does make a difference. After serving several years on the Illinois Farm Bureau Grass Roots Issue Team on Natural Resources, I have learned a great deal about how Farm Bureau policy is developed. It is truly from the members. Illinois is a large state with diversity from one area to another. Our team addressed issues such as coal mine subsidence, wind energy, conservation issues, water quality, and water withdrawal issues. Many are issues that need to be addressed now because they have consequences in the near future. Even though farmers do many things now, there is always more that can be done. Simple things such as recycling used oil through a certified recycler, taking farm chemicals and hazardous household waste to proper collection points, recycling used pesticide containers, and taking used tires to be recycled are just a few ways that farmers can help out even more to keep their environment clean for future generations. Celebrate Earth Day on Thursday, but remember that Earth Day is everyday for farmers. Dennis Haab, Forrest, is the president of the Livingston County Farm Bureau. He serves on the Renewable Resources and Energy GrassRoots Issue Team and on the conservation subcommittee of the IFB Farm Policy Task Force.

“The integrated role of agriculture in food, fiber, environment, hunger, and health.”

“Regulations on grain market participants that facilitate good balance between farmers, end users, and speculators.”

Sam Lilly DuPage County

Dale Plumer Pike County

When Chicago lost to Brazil in its bid to host the 2016 Summer Olympics, many residents were disappointed. Now, the city has suffered another disappointment with the removal of a 25-foot-tall sculpture of two farmers from a small plaza along the city’s Magnificent Mile. The threeSTEWART dimensional TRUELSEN sculpture by J. Seward Johnson Jr. has completed its year on loan to the city and attracted many passersby while it was present. It was named “God Bless America,” but almost everyone recognized it as a version of Grant Wood’s famed painting, “American Gothic,” which coincidentally hangs in Chicago’s Art Institute. What is it about “American Gothic” that has so captivated people over the years? Could it be the couple’s stoic expression, which seems reassuring in hard times? Maybe it is their obvious self-reliance that we envy. Wood did not intend to paint a classic portrait of an American farm couple; certainly not one that would have such lasting effect. His sister posed as the woman in the 1930 painting, and a local dentist was handed a hayfork and enlisted to be her father or husband or brother — depending on the story you hear. Farmers weren’t quite sure what to make of the painting. Like it or not, the picture is one of the most-recognized paintings in the world. Sure, it would have been nice if Wood had painted the man and woman with smiles on their faces, but there wasn’t much to smile about then. Crop and livestock prices

“The infrastructure (and ultimately the dynamics) of agriculture is changing at high speed. How can the IFB prepare the farming population for the next big step?” Pat Titus Douglas County

were plunging as Wood finished his work and the Great Depression gripped the nation. “American Gothic” along with the red barn, moldboard plow, milking stool, and tractors — such as International Harvester’s Farmall series — are icons of American agriculture. Like Wood’s painting, the red Farmall tractors also date back to 1930. In some ways, the American public’s appreciation for and understanding of farming never really left that era. The American Farm Bureau Federation and other agricultural organizations have worked hard to update the image of the American farmer and paint a portrait of modern agriculture, its importance to our economy, and the environmental benefits we derive from it. But it is difficult to overcome nostalgia. No doubt there were people who missed the plow horse as mechanization transformed farming a century ago, and there are similar feelings today as agriculture is transformed by science, technology, and global markets. These feelings are understandable, but they provide fertile ground for critics of production agriculture. Yet, some things haven’t changed. The vast majority of farms today is still familyowned and operated, and the traits we’ve admired in farmers and ranchers — on canvas or in real life — are still evident; the values they hold dear are the same. In this way, American agriculture is drawing on the best of the past to meet the challenges of the future. Stewart Truelsen is a regular contributor of American Farm Bureau columns and is author of “Forward Farm Bureau” about the American Farm Bureau Federation’s 90th anniversary.

“Making the best out of unfavorable rulings and legislation and figuring out a way to make those work for agriculture .”

Don Duvall White County