FarmWeek April 25 2011

ILLINOIS ATTORNEY General Lisa Madigan last week filed a water pollution complaint against the owner of a Jo Daviess County dairy farm. .......................2

LONG-AWAITED action on Free Trade Agreements with Panama, Colombia, and South Korea should reach the Hill “some time this spring.” .....................................6

FA R M FA M I L I E S w i l l b e ever ywhere — in person and in pictures — at this year’s Illinois State Fair, which r uns Aug. 12 through 21. ......................................6

Monday, April 25, 2011

Two sections Volume 39, No. 17

Severe storms pound Illinois

Farm family survives harrowing encounter with tornado

BY DANIEL GRANT FarmWeek

A number of farms and homes were damaged or destroyed last week as severe storms, including at least two tornadoes, pounded the state.

Mark Prose, a farmer from Girard in Macoupin County, knew the weather last Tuesday (April 19) could get “rough”

FarmWeekNow.com Vi e w v i d e o o f s t o r m d a m age in White County at FarmWeekNow.com.

in his area based on storm warnings and what he saw on the radar.

But he and his family (wife Lisa and 6-year-old son Michael) had no idea what was to come when they wisely decided to seek shelter in the basement of their home.

“We were planning on eating supper in the basement and about the time we sat down to eat the electricity went out,” Prose told FarmWeek. They were going to get flashlights when an F-3 tornado with wind speeds estimated at 150 mph barreled

onto their farmstead.

The Proses first felt a significant change of pressure in their ears followed by rattling noises. The family quickly went into the basement bathroom and Prose lay on top of his family.

“We could hear it (the house) coming apart above,” Prose said. “Then, in probably 15 seconds, it was over.”

But the realization of what had happened was just beginning for the Proses. Their home and entire farmstead was destroyed in those few seconds.

“I waited a minute or so and headed toward the stairs (the subfloor remained intact),” Prose said.

“As I made my way upstairs, I could see daylight. I knew that was a bad sign,” he continued. “When I got to the top, everything was gone. The house was only 6 years old — we had just built it.”

But Prose quickly realized his family’s new home wasn’t the only loss.

“The shed and all the bins were gone, too,” he said. “My jaw just dropped.”

The National Weather Ser-

vice Friday confirmed two tornadoes from the storm, the F3 that caused significant damage near Girard and an F-2 (wind speeds estimated at 120 mph) that caused damage near Honey Bend just north of Litchfield.

Two homes were destroyed,

15 others were damaged, and numerous outbuildings were damaged or destroyed near Girard.

The storm also dumped hail 2.75 inches in diameter in Green County and 2.5 inches in diameter in Calhoun and Pike counties, the Illinois State

Water Survey reported.

An estimated 69,000 Illinoisans were without power after the storms. Some still were without power as of Friday morning, according to Donnie Laird, a farmer from See Tornado, page 3

Mark Prose, left, a Macoupin County farmer, describes damage caused to his farm by an F-3 tornado during a conversation with John Earley of the Girard Emergency Management Agency and a former GROWMARK employee. The twister destroyed Prose’s home (which is being removed in the background), grain bins, and shed. Prose and his family survived the storm in the basement of their now demolished home. They plan to rebuild on the same location. More photos appear on page 3. (Photo by Ken Kashian)

Time ripe for estate tax repeal debate?

Periodicals: Time Valued

BY MARTIN ROSS FarmWeek

The head of a family business advocacy group sees “game-changing” movement toward possible repeal of the federal estate tax, even if it takes the next year and a half.

The American Farm Bureau Federation supports the Death Tax Repeal Permanency Act, a bipartisan House measure aimed at ending estate tax uncertainty for farm families and small businesses.

A new analysis by the American Family Business Foundation concludes repeal actually would boost overall government revenues by $89 billion over a 10-year period.

Barring congressional action, the individual estate tax exemption will return to a pre-2002 $1 million level and the tax rate

to a high 55 percent when a current estate tax fix expires at the end of 2012. Illinois land values alone could create widespread tax exposure for farmers at that threshold.

The foundation’s analysis, by former U.S. Treasury economist Stephen Entin, estimates 22,000 farms and 65,000 “family business units” face estate tax liability even under a current $5 million exemption and 35 percent rate.

American Family Business Foundation President Dick Patten argued Congress’ recent two-year hike in the exemption is “by no means a permanent solution.”

Patten recognizes straight repeal is an uphill battle: Many Democrats are reluctant to give up potential tax revenues.

But he sees hope in the current congressional environment: The House-Senate Joint Committee on Taxation recently

FarmWeek on the web: FarmWeekNow.com

hired new economists. In Patten’s view, that brings a fresh view of tax revenues and costs, and lawmakers are under new pressure to provide permanent death tax relief.

“Our organization went to all candidates for the Senate and House and asked them to sign a Death Tax Repeal Pledge,” Patten told FarmWeek. “More than 500 (bipartisan) candidates signed that pledge.

Of those, 278 won their primaries. Of those, 131 are now members of the Senate and the House.

“That creates game-changing numbers in both the House and the Senate that make repeal of the death tax much more possible than it has been in the past.”

Patten faults congressional budget See Tax, page 2

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

FarmWeek Page 2 Monday, April 25, 2011

GOVERNMENT

Quick Takes BUDGET POSSIBLE DEAL-BREAKER? — U.S. Rep. Collin Peterson (D-Minn.), ranking member of the House Ag Committee, last week said cuts in a House-passed budget proposal could make it politically impossible to pass a farm bill next year.

Peterson said the Democrat-controlled Senate is certain to reject the House budget, but if the two chambers can’t agree on a compromise plan, House GOP leaders could go forward with making the cuts unilaterally.

Peterson explained House farm bill passage often requires garnering support from urban and suburban lawmakers by expanding nutrition and conservation programs. Big cuts to food stamps may make it tough to gain urban support — the Republican-proposed budget revives a 1995 plan to turn the program into block grants to states.

“I just don’t think that given the economic climate, you can sell that big of a cut,” Peterson said.

SOBERING STATE BUDGET OUTLOOK — State Sen. Bill Brady and Rep. Dan Brady, both Bloomington Republicans, described the state’s dire fiscal situation to constituents last week during the General Assembly spring break.

“We’ve got to stop digging a (funding) hole,” the representative said. “It’s going to take quite some time to get out of it.”

At the end of March, the comptroller reported the state had $4.5 billion in unpaid bills.

The state needs a combination of belt tightening, borrowing, and taxes to balance the budget, Representative Brady said. He added the state cannot afford to add any new programs.

Illinois also is struggling to fund its state employee pension system. “If we don’t do something to the (state) pension monster, the state budget will implode,” Senator Brady said.

REGIONAL HABITAT PLAN FOR WIND FARMS — The U.S. Fish and Wildlife Service (FWS) and members of the wind energy industry last week agreed to develop a wind energy habitat conservation plan for the Midwest.

The plan will outline measures to conserve threatened and endangered species that may be affected by wind farm development. In particular, the plan calls for conservation of Indiana bats as well as other protected species in Illinois, Indiana, Ohio, Missouri, Iowa, Minnesota, Wisconsin, and Michigan.

FWS received $3.3 million to develop a habitat conservation plan to cover all threatened and endangered species in the eight states. The regional approach is expected to streamline compliance and reduce costs, according to an Illinois-based FWS supervisor.

Madigan files complaint against dairy operation attorney general in October.

Traditions’ employees told the IEPA the silage was collected at the dairy in anticipation of livestock that had not arrived, and silage leachate was stored in a holding pit. A conBY KAY SHIPMAN tract land applicator told inspectors he applied FarmWeek Illinois Attorney General Lisa Madigan last the silage leachate on five acres the previous week filed a water pollution complaint against day as well as on Oct. 1, 2010, according to the owner of a partially constructed Jo Madigan’s complaint.

Daviess County dairy farm, alleging silage Madigan has asked the IPCB to schedule a leachate from the dairy flowed into a tributary hearing in Jo Daviess County, at which time of the South Fork of the Apple River last Traditions Investments will have an opportuOctober. nity to answer the five counts, which include A.J. Bos, water pollution Bakersfield, and operating Calif., owns the without a ‘We disagree that any additional per- National Polludairy, known as Traditions mits or author izations are required tant Discharge Dairy, located for the completion and operation of Elimination near Stockton.

System the dairy.’

Don Man(NPDES) perning, a Rockmit. ford attorney Each count — Don Manning has a potential representing Attorney representing Bos Bos, told civil penalty of FarmWeek the $50,000 per incident was handled appropriately at the time. violation and an additional $10,000 for each “Traditions’ response was immediate and day the violation continued. cooperative, and any potential issues arising In prior litigation, a plaintiffs’ group known from the construction site were immediately as HOMES sought to halt construction of the resolved,” Manning said. “During the interdairy. Traditions prevailed at the trial court vening months, there has been no suggestion level, and last December an appellate court of any harm or damage to any person, proper- upheld the trial court’s decision in favor of ty, or to the environment generally, and we Traditions regarding a challenge of a permit believe that it is inaccurate to say that pollutto construct the dairy issued by the Illinois ing activity actually occurred.

Department of Agriculture.

“We feel (action taken by the dairy) should Most recently, the Illinois Supreme Court have resolved the situation,” Manning added. upheld the Illinois appellate court’s ruling in Bos’ Traditions Investments LLC was favor of the dairy. The attorney general’s named in the complaint filed with the Illinois complaint before the IPCB was filed after the Pollution Control Board (IPCB).

Illinois Supreme Court’s ruling in Traditions’ On Oct. 1, 2010, the Illinois Environfavor. mental Protection Agency (IEPA) investi“As has been the case with respect to prior gated a citizen complaint about discollitigation regarding this site, we intend to oration in the west branch of the South respond with appropriate filings in the proper Fork, and IEPA inspectors traced the color forum, and we expect that our client will be vinto a location at the dairy where a field tile dicated, as occurred in the trial court, the appeldischarged into the tributary, according to late court, and the supreme court in the Madigan’s complaint.

HOMES litigation,” Manning said.

Test results of samples collected by the He added, “We disagree that any additional IEPA showed an elevated level of suspermits or authorizations are required for the pended solids attributable to the silage completion and operation of the dairy, and it is leachate, according to Madigan’s commy client’s intention to complete construction plaint. IEPA referred the matter to the and to commence operations.”

Lawyer: Matter handled, no damage indicated

Tax (ISSN0197-6680) Vol. 39 No. 17

April 25, 2011

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Continued from page 1 analysts’ “static scoring,” which focuses exclusively on estate tax revenues without considering how tax relief might spur economic growth and overall federal revenues for lack of action on repeal of the tax.

That’s an “unrealistic” view of a tax that “confiscates capital out of the economy,” he said.

Entin suggested repeal would boost gross domestic product by 2.25 percent and private sector output and labor income by 2.34 percent. Resulting increases in other tax revenues “would more than offset the decline in the estate tax portion of the estate and gift tax,” he maintained.

Past Congressional Budget Office director Douglas Holtz-Eakin told the foundation 1.4 million jobs would not “exist within the economy” under a 55 percent tax rate, Patten said.

Even under the temporary 35 percent rate, some 857,000 potential jobs are affected, Holtz-Eakin stated.

Patten sees the estate tax having a particularly harsh impact for rural America, hitting family businesses able to support large local payrolls but challenged to shoulder high taxes.

Estate tax liability can spur rural businesses to sell assets to outside corporations or retail chains that may, in turn, “truck (assets) out of town,” he said.

“All of a sudden, you have a town without that employer,” Patten said.

“You have a town where the family business was the source of philanthropy, supporting the Little League teams and the scholarship programs.

“All of those are lost when the death tax causes these family businesses to have to sell off.”

Page 3 Monday, April 25, 2011 FarmWeek

WEATHER

Above: Helyn Seifert of Girard comforts family friend Mark Prose two days after an F-3 tornado leveled his farmstead in Macoupin County. At right: More than 100 volunteers have helped the Prose family clear debris each day since their farm was struck by a tornado April 19. (Photos by Ken Kashian)

Heavy rains, severe storms, halt planting progress

BY DANIEL GRANT FarmWeek

Planters were parked most of last week as heavy rains soaked the state.

Illinois farmers as of the first of last week had planted 9 percent of the corn crop, which was on target with the five-year average pace but well behind last year when 29 percent of the crop was in the ground.

“There’s been no fieldwork done here, whatsoever,” said Rick Corners, a FarmWeek Cropwatcher from Jefferson County (Cropwatchers will begin their reporting season in the May 2 issue of FarmWeek). “In another week, it could start to be a concern.”

Farmers likely won’t begin planting or return to their fields anytime soon. The majority of the state the first 20 days

of the month received between 3 and 6-plus inches of rain and more was falling Friday.

The state on average receives about 3.8 inches of rain in April. So many locations already had received above-average rainfall with six days re-

maining in the month.

“Waves of rainfall are heading our way,” Dan Smith, meteorologist with the National Weather Service office in Lincoln, said on Friday. He predicted rain showers could last through Easter weekend and into the first part of this week.

“We may start catching a break (mid-week) and dry out a little bit,” he said.

Adam Edwards, a farmer from Macoupin County, said it could be at least a week or longer before farmers are back in the fields in his area.

“We’re probably talking May now (before fieldwork resumes) if it keeps raining,” Edwards said.

He estimated 20 percent of the corn crop was planted in his area, but the soil now is soaked and fields must be cleared of debris after at least two tornadoes and straight-line winds pum-

A grain dryer was blown over into a bin of soybeans that sustained some damage in 90 mph winds Tuesday on the Rusty Walsh farm at Carmi in White County. Two other bins of beans remained standing while several empty bins were destroyed. Also destroyed was the house Walsh was born in, and his current residence nearby had windows blown out. Many of the family’s friends last week were helping clean up debris from the storm. (Photo

by J.C. Pool, Illinois Farm Bureau director from Broughton)

meled the southern half of the state last week.

“There are a couple farmsteads on the ground,” Edwards said. “It’s real bad.

“And there are some (corn) acres up, but none of that has been assessed yet,” he continued. “I imagine there is some hail damage.”

Strong winds last week destroyed a small shed on

Corners’ farm.

But he believes the wheat crop mostly was unaffected by the severe storms. The condition of the state’s wheat crop last week was rated 65 percent good to excellent, 26 percent fair, and 9 percent poor or very poor.

“Like a friend says, ‘bad start, good finish,” Corners added.

“That’s what we’re hoping for.”

Jim Laird, left, and his son, Donnie, remove scraps of a tin roof that were blown off a barn on their Jefferson County farm last week during a violent storm in the southern half of the state. One shed was destroyed on the Laird’s cow-calf operation, three barns were damaged, and shingles on the roof of Jim Laird’s home were peeled. (Photo by Ken Kashian)

Tornado Continued from page 1 Jefferson County.

Laird’s farm was hit by what he believes were straight-line winds. Several outbuildings were destroyed, a barn was severely damaged, and the shingles on his father’s (Jim) home were peeled off.

“I can’t confirm anything, but it looked like straight-line winds to me,” Laird said. “It did a lot of damage in town (Waltonville).

No severe injuries or fatalities were reported as of Friday from the outbreak of severe storms in Illinois.

Prior to the outbreak of storms “we were running out of odd jobs to do (waiting for fields to dry out) but not anymore,” Laird added. “There is lot of metal and debris scattered about. It’s a miracle nobody got hurt.”

“There’s not a cut or nick anywhere,” Prose said of his family’s health. “Neighbors, friends, and relatives have given us overwhelming support.”

Prose said most of his machinery was not badly damaged and already is repaired, so he will be able to plant once debris is picked up and fields dry out.

He also plans to build a new home on the same site.

“We’re going to rebuild right there and try again,” he said.

“It’s a lifetime experience that I never wish on anybody” Elsewhere, winds estimated at 90 mph severely damaged the boyhood home of Rusty Walsh in White County.

Fortunately, nobody was in the house at the time of the storm. Walsh also suffered damaged to his nearby home and his grain-drying operation and bins.

FarmWeek Page 4 Monday, April 25, 2011

GOVERNMENT

State lawmakers take action before taking spring break

BY KAY SHIPMAN FarmWeek

State representatives face a full plate of legislation when they return to the Statehouse Tuesday, following a one-week break. Their Senate colleagues are scheduled to return May 3.

Several bills of interest to Illinois Farm Bureau were caught up in the legislative flurry before lawmakers recessed.

Two bills, SB 2209 and HB 3504, that would set proposed permit fees for confined animal feeding operations (CAFOs) were held in committees in their respective chambers.

The House sponsor, Rep. Michael Tryon (R-Crystal Lake), and the Illinois Environmental Protection Agency continue to push for the fees and continue to call for negotiations on the issue.

IFB opposes both bills and continues to work with the Illinois Pork Producers Association, Illinois Beef Association, and Illinois Milk Producers Association to share concerns and oppose implementation of National Pollutant Discharge Elimination System (NPDES) fees for livestock operations.

The deadline for passage was extended for HB 1697, legislation that would ban tail docking of cattle unless the procedure is done by a veterinarian for health reasons. IFB opposes the bill, which is on second reading in the House.

In other action, the Senate passed four bills supported by IFB. On a 57-0 vote, the Senate passed SB 2010, sponsored by Sen. Michael Frerichs (DChampaign).

It would replace the existing Fertilizer Research and Education Council with a simi-

lar program overseen by the Nutrient Research Education Council.

The legislation seeks to prevent money raised from fertilizer fees being used by the state for other purposes.

The bill also would change and increase fees imposed on the fertilizer industry to fund the Illinois Department of Agriculture (IDOA) bureau of agriculture products inspection program.

Senator Frerichs also sponsored SB 2012, which passed in the Senate. The bill would change how the Illinois Council on Food and Agricultural Research (C-FAR) is funded. IFB supports the legislation, which follows the recommendations of a C-FAR task force.

On a 58-0 vote, the Senate passed SB 1852 as amended.

That measure provides for the creation of a farmers’ market task force by the Illinois public health director to help review laws and regulations of products and practices permitted at farmers’ markets. The task force also will help enact statewide administrative regulations for farmers’ markets.

Trespass notification is the focus of SB 1914, sponsored by Sen. John Sullivan (D-Rushville).

The bill proposes to add marking of private property through the use of purple paint on trees or posts and to raise public awareness of the meaning of those markings.

The property owner still would mark his or her property or provide oral notice for no trespass as required by current law and may, but is not required to, add the purple paint system voluntarily.

This is a legislative initiative of the Illinois Forestry Association.

Senate Redistricting Committee posts more hearings The Illinois Senate Redistricting Committee recently announced more hearing dates and communities; however, all times and hearing locations were not available.

Details are expected to be posted online at {www.ilsenateredistricting.com}.

Dates and cities are: April 21, 10:30 a.m.,

Southern Illinois University’s Student Union, Carbondale; 3 p.m., Elmhurst City Hall, Elmhurst; April 26, 10 a.m., Yorkville City Hall, Yorkville; April 28, south Chicago suburbs and Macomb; April 30, northwest Chicago suburbs; and May 2, Alton and Chicago’s west side.

Northern Illinois vineyard workshops planned The University of Illinois is providing free workshops to help grape growers prepare for the growing season.

The Northern Illinois Spring Vineyard Tune-Up Workshops will be led by Bill Shoemaker, superintendent at the U of I St. Charles Horticulture Research Center and viticulturist with the Illinois Grape Growers and Vintners Association (IGGVA).

The four identical workshops each will run from 1 to 4 p.m. at commercial vineyards in Northern Illinois. Pre-registration is not required.

The topics will include vineyard fertility practices; canopy management practices in grapevines; and integrated pest management practices for vineyards.

Workshop dates and locations are: • Thursday (April 28), Old Mill Vineyard, Metamora, located two miles west of Ill. Route 26 on Coon Creek Road; • Friday (April 29), Baxter’s Winery and Vineyard, Nauvoo; • May 5, Famous Fossil Vineyard and Winery, Cedarville, located a half mile

west of Ill. Route 26 on Cedarville Road; • May 6, Blue Star Vineyard and Winery, Hebron, located one mile west of Ill. Route 47 on Vander Karr Road.

For more information, contact Shoemaker at 630-5847254 or e-mail him at wshoemak@illinois.edu.

The workshops are sponsored by the IGGVA, the Illinois Department of Agriculture, and the crop sciences department in the College of Agricultural, Consumer, and Environmental Sciences at the U of I.

McLean County farmer Brian Carlson, center, of LeRoy explains how he used a loan through the state treasurer’s link-deposit program to help start his farming operation. Looking on are Illinois Treasurer Dan Rutherford, right, and Illinois Farm Bureau President Philip Nelson.

Rutherford announced the revamped link-deposit program during a news conference last week in Bloomington. (Photo by Cyndi Cook)

Rutherford unveils revised ag link-deposit program Illinois State Treasurer Dan Rutherford last week rolled out a link-deposit program that had been revamped in an effort to improve participation by farmers and financial institutions.

The new treasurer said that over his 99 days in office, he learned the program’s interest rates were not competitive, it required excessive paperwork, and the dollars available were modest.

“We reconfigured the whole program,” Rutherford told reporters last week during a news conference at the Illinois Farm Bureau Building in Bloomington.

Under the new terms, eligible farmers may borrow up to $120,000 and eligible farm operations may borrow up to $240,000 at a maximum 4.5 percent interest rate for a oneyear operating loan. For a long-term loan, an eligible farmer may borrow up to $200,000 at maximum 4.5 percent interest for five years.

The state will charge lenders 1 percent interest for funds through the link-deposit program.

“This is going to be a much more customer friendly approach for the people who utilize this program,” said IFB President Philip Nelson. “Making it more streamlined will go a long way in the minds of the business people across the state.”

McLean County farmer Brian Carlson, LeRoy, attested to the link-deposit program’s value. In 2007, Carlson obtained a link-deposit loan from the Flanagan State Bank of LeRoy. He was able to buy used equipment to start his farming operation and later obtained two more loans through the program.

“The interest rate was the main thing; it helped me cash flow,” Carlson said. “I plan on using the program in the future to expand.”

“The changes by the Illinois state treasurer’s office to the Ag Invest: Annual Agriculture program make the program a better tool for providing farmers access to competitive interest rates for operating loans,” said Gary Ash, president and chief executive officer of First Farm Credit Services.

“When interest rates rise, this will become a very effective option for farmers to consider locking in interest rates on their operating lines with local banks and Farm Credit Associations,” Ash said.

Richard Ritter, senior vice president of agricultural lending at Flanagan State Bank, agreed Rutherford’s changes have improved the ag link-deposit program and made it easier for borrowers to qualify. But given the current low interest rates, Ag Invest may generate more interest in the future when interest rates start to increase, he said.

Rutherford said he has committed $500 million for all linkdeposit programs, including the revamped Ag Invest program.

In six months, the treasurer and his staff will reassess the markets and interest rates, lender and borrower participation, and other factors, he told reporters. — Kay Shipman

Page 5 Monday, April 25, 2011 FarmWeek

ENVIRONMENT

EPA: No Chesapeake on the Mississippi planned But ‘guidance’ raises concerns

BY MARTIN ROSS FarmWeek

Visiting the Corn Belt last week, U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson dismissed concerns that her agency was eyeing Chesapeake Bay-style nutrient management standards for the Mississippi River Basin.

However, a federal Clean Water Act (CWA) “regulatory guidance” document under consideration by EPA and the U.S. Army Corps of Engineers has raised suspicions that Midwest farmers could be in for more stringent watershed regulations.

In a move hailed by the American Farm Bureau Federation (AFBF), 170 bipartisan

members of Congress have challenged proposed regulatory guidance. At Farm Bureau’s behest, Reps. Bob Gibbs (ROhio) and Tim Holden (DPa.) issued a “Dear Colleague” letter on the yet-unreleased guidance document, garnering support from 23 Democrats.

In an Iowa visit last week, Jackson said EPA has no plans to implement pollution regulations in the Mississippi Basin similar to those being imposed in the eastern Chesapeake Bay, insisting “EPA is not targeting agriculture.” “I am ruling out the need for us to move directly to a regulatory mechanism when we have folks stepping up and are willing to do the conservation measures,” she said.

But AFBF President Bob Stallman argued regulatory guidance could provide a roadmap for EPA to designate “nearly all water bodies and

even some dry land” as subject to rules that could dictate land-use decisions.

In a 38-page draft of the document, the EPA and Corps predicted “the number of waters found to be subject to CWA jurisdiction will increase significantly.”

Redefining regulated waters is “far too important to be decided by an informal guidance document,” AFBF regulatory specialist Don Parrish argued. EPA/Corps guidance would lead to new CWA permitting requirements, environmental lawsuits, and “less economic growth at a time when our nation needs it most,” Stallman warned.

Stallman said the proper procedure for federal water policy is either through formal EPA rulemaking, including opportunity for public comment, or by legislation.

House seeks to chill EPA; courts may be next step If Congress can’t halt federal greenhouse gas (GHG) regulations, the courts likely will, a Farm Bureau regulatory specialist suggests.

The U.S. House has approved a measure, spearheaded by House Energy and Commerce Chairman Fred Upton (R-Mich.), that would block EPA regulation of GHG emissions from “stationary” sources such as manufacturers, utilities, and, potentially, farm operations.

A similar amendment by Senate Minority Leader Mitch McConnell (R-Ky.) failed in his Democrat-controlled chamber. McConnell’s proposal would have overturned EPA’s 2009 ruling that GHGs posed a human health threat.

EPA is expected to begin regulating stationary sources exclusively for greenhouse emissions July 1, though some standards already have been set under existing air quality permits.

New regulations would impact utilities and others that emit greenhouse gases in excess of a varying range of from 75,000 to 100,000 tons per year.

While McConnell’s measure garnered 50 votes, it fell 10 short of a necessary majority. American Farm Bureau Federation regulatory specialist

Rick Krause was uncertain whether the Senate would vote again to stay EPA’s hand. The White House hailed “the Senate’s actions to defend the Environmental Protection Agency’s ability to protect public health under the Clean Air Act.” However, Krause noted suggestions even within EPA that greenhouse controls are “the weakest link in its whole regulatory scheme.”

“I don’t know of anyone who thinks it’s going to stand up in court,” Krause told FarmWeek. “There are already lawsuits filed against it. A number of states have filed, and everything’s wrapped up into one big lawsuit.”

Meanwhile, EPA greenhouse reporting requirements that set the stage for industry data collection and emissions enforcement have been delayed until at least fall.

EPA already is regulating emissions from cars and light trucks to be sold over the next five years, under an agreement with states and automakers.

House legislation would allow that “mobile source” program to proceed but bars any future regulations on vehicle greenhouse emissions. — Martin Ross

But ag groups may find stiff opposition trying to rein in the EPA: A coalition of sports and conservation groups wrote members of the House urging them not to sign the Gibbs-Holden letter.

Ducks Unlimited, the Izaak Walton League of America, the National Wildlife Federation, and Trout Unlimited opposed efforts to sideline the guidance document.

Concerns about the document arose as lawmakers con-

tinued to push Senate legislation aimed at blocking proposed new EPA pesticide applicator permits under the CWA. The House has moved the measure, and in what Illinois Farm Bureau National Legislative Director Adam Nielsen deemed “an attempt to get away from the Senate Environment and Public Works” and its chairman, Sen. Barbara Boxer (D-Calif.), the Senate Ag Committee has taken up the measure.

Lawmakers resist EPA talk of new dust rules U.S. House lawmakers have signaled they are ready for a dust-up with the U.S. Environmental Protection Agency (EPA).

A proposed new House measure would at least temporarily block EPA from imposing more stringent nationwide “coarse particulate” dust standards while exempting so-called “farm dust” from existing particulate rules.

The Farm Dust Regulation Prevention Act is spearheaded by Reps. Kristi Noem (R-S.D.), Robert Hurt (R-Va.), Leonard Boswell (D-Iowa), and Larry Kissell (D-N.C.).

Despite earlier House Ag Committee testimony in which she dismisses plans to revise current dust rules to include farms, EPA Administrator Lisa Jackson last week told reporters in Iowa she would decide in July whether to tighten particulate standards.

American Farm Bureau Federation regulatory specialist Rick Krause warned new dust standards could affect such things as cropping and livestock activities, construction, and even seasonal transportation on rural roads.

Arizona and California policymakers already are mulling the possibility of imposing speed limits of 10-15 mph on rural unpaved roads to reduce dust “pollution,” he noted.

Concerns about the impact of tighter standards have attracted “a lot of signers” to Capitol Hill correspondence urging Jackson to drop any new plans, Krause told FarmWeek.

“The dust letters have been pretty popular,” he said. “They send EPA a big message not to mess around with things.”

Farm operations and rural traffic generate coarse particulates. Even now, EPA or state agencies can investigate an individual facility based on air monitoring data indicating even a single particulate violation — data often submitted by environmental groups, Krause said.

Further, while the federal Clean Air Act includes an “exceptional event” provision that exempts excessive particulate levels related to a tornado or other natural events, EPA has the authority to designate such events.

“They really don’t do that very much,” Krause said. “It’s almost like (exceptional event exemptions) don’t exist.” — Martin Ross

Budget cuts ill omen for conservation spending?

Illinois conservation interests were uncertain how ongoing statewide stewardship efforts might be impacted by nearly $240 million in nationwide conservation program cuts for the remainder of fiscal 2011.

As part of a compromise continuing budget measure aimed at keeping the federal government running through Sept. 30, Congress cut $119 million from the Wetlands Reserve Program (WRP), $80 million from the Environmental Quality Incentive Program (EQIP), and $39 million from

the Conservation Stewardship Program (CSP).

Paige Buck, spokesman with the USDA Natural Resources Conservation Service’s (NRCS) Illinois office, said her agency was unsure how fiscal 2011 cuts would be distributed across the country. Buck reported Illinois EQIP funds have been largely “obligated” or committed for the rest of the fiscal year, though near-term availability of WRP funds remains a concern.

Illinois NRCS officials plan to “keep on offering these programs to our clients” and accepting landowner applica-

tions until Washington offers funding details, Buck told FarmWeek.

However, short-term cuts raise concerns about how conservation spending will fare under forthcoming fiscal 2012 appropriations measures and, long-term, in 2012 farm bill debate. Farm bill program spending generally is based on budget “baselines” in force when ag policy is written.

The CSP provides financial and technical assistance to promote soil, water, air, and wildlife conservation. It recently was targeted for cuts by a

White House-authorized deficit commission, as were farm direct payments.

“Sometimes, when economic times are hard, conservation gets kind of put on the backburner,” Buck lamented. “But it’s as important as ever that we get the funding to deliver conservation solutions to Illinois producers. The soil’s still out there; the water’s out there, and it needs to be protected. None of that’s changed.

“In 2012, we’re going to have a new farm bill. That planning needs to go on right now, but it’s kind of hard to do that kind of

planning when we’re in the middle of this. It’s hard to be strategic when you’re cutting back.”

EQIP programs designed to control field and feedlot runoff are important to Illinois producers facing possible new U.S. Environmental Protection Agency watershed nutrient management standards, Association of Illinois Soil and Water Conservation Districts Executive Director Richard Nichols said. Funding for equally vital technical assistance “has not been sufficient” for years, Nichols warned. — Martin Ross

FarmWeek Page 6 Monday, April 25, 2011

MARKETS

‘Votes are there’ for FTAs; White House action sought

BY MARTIN ROSS FarmWeek

Last week saw a flurry of congressional travel to Colombia, a whirlwind of data on free trade benefits, and fanfare for an agreement that paves the way for approval of a U.S.-Panama free trade agreement (FTA).

Now, it’s up to the White House to sound off on longawaited FTAs with Panama, Colombia, and South Korea.

U.S. Rep. Aaron Schock, a Peoria Republican who joined bipartisan colleagues on a Colombia fly-in last week, was hopeful the president would submit FTAs for a congressional vote in June and Congress would clear the agreements by July.

Prospects for timely approval improved with the announcement of a new agreement with Panama that, among other things, would recognize the U.S.’ meat inspection system as equivalent to Panama’s own inspection system. That would provide even further duty-free access for U.S. pork and beef into the small but potentially key Central American market.

In an RFD Radio-FarmWeek interview, national Truth About Trade and Technology Chairman Dean

Kleckner maintained “the votes are there” for Congress to move all three agreements.

Kleckner said the administration “has said the right things” about trade expansion but questioned what he sees as the White House’s “strictly political” delay in submitting them.

Colombia continues to ship goods into the U.S. virtually duty-free, but Schock noted U.S. commodity exports to the South American nation have fallen nearly 50 percent over the past few years as a result of delays in FTA passage.

The manufacturing sector also has felt the impact of FTA heel-dragging, with Illinois-based Caterpillar facing high Colombian tariffs on imported heavy equipment, he said.

“We had 80 percent of the wheat market two years ago,” Schock said during a teleconference from Colombia.

“Because we have not signed a trade agreement and they’ve signed trade agreements with countries like Argentina and now Canada, our percentage of the wheat market has fallen

below 40 percent.

American Farm Bureau Federation trade specialist David Salmonsen reported the White House was “a little fuzzy” about when it might submit FTAs, but State Department officials told him last week all three FTAs should reach the Hill “some time this spring.”

Administration support nonetheless remains contingent on Colombia and Panama agreeing to “meet some benchmarks” beyond the trade arena, he said. Colombia recently agreed to new “labor performance” standards aimed at addressing union-related human rights issues of concern to FTA critics.

“Usually, (the president) doesn’t send anything up (to the Hill) unless he knows it’s going to pass,” Salmonsen told FarmWeek.

Kleckner cited Senate Finance Chairman Max Baucus’ (D-Mont.) continued concerns about Korean treatment of U.S. beef despite a recent FTA side agreement that helped address beef and automotive trade issues and was credited with winning FTA support from the United Auto Workers (UAW) union.

The UAW announcement “surprised me,” he said, suggesting it helped win Democrat lawmakers to the FTA

cause. But Kleckner fears further FTA delays could push debate into the next federal election cycle and erode congressional enthusiasm, especially given bipartisan worries about pending congressional redistricting

and reapportionment.

“While it’s not perfect with any of these countries, it’s good,” he proclaimed. “We’re going to be selling more and not losing. We have to get at it.

If there’s a time to vote, it would appear to me it’s now.”

Peoria Republican U.S. Rep. Aaron Schock meets with Colombian President Juan Manual Santos during a trip to the Latin American nation last week. Schock discussed pending free trade agreement issues with Colombian cabinet-level officials, labor leaders, and business leaders along with House Ways and Means Committee Chairman Dave Camp (R-Mich.) and other bipartisan colleagues. “All sides see the benefits of this agreement not just from a diplomatic and economic perspective, but because together we can work to put an end to the drug trafficking business that has impacted both our countries,” Schock said. (Photo courtesy of the U.S. Embassy in Bogota, Colombia)

Farmer Image Campaign

Farm families plan activities, effort to connect with State Fair visitors

BY KAY SHIPMAN FarmWeek

Farm families will be everywhere — in person and in pictures — at this year’s Illinois State Fair.

“We believe it is a great opportunity to talk with Illi-

nois residents about our farm families and how we grow safe and healthy food,” said Dereke Dunkirk, a Morrisonville pork producer and president-elect of the Illinois Pork Producer Association (IPPA).

Dunkirk joined Illinois

State Fair Manager Amy Bliefnick and Illinois Agriculture Director Tom Jennings at a fairground news conference last week to announce plans for the fair.

This year’s fair theme, “A good thing growing,” has an agricultural connection,

Pavilion, the livestock barns, and the interactive Farmer’s Little Helper educational area.

In certain fairground locations, fairgoers will have an opportunity to meet farm families and ask questions about farming, Dunkirk said. In

‘They will come to our farms to see what we do.’

— Dereke Dunkirk

FarmWeekNow.com View videos of Dereke Dunkirk and Amy Bliefnick discussing plans for the 2011 state fair at FarmWeekNow.com.

President-elect, Illinois Pork Producers Association

according to Bliefnick.

The fair dates are Aug. 1221. Illinois Farm Bureau again will coordinate the Farm Bureau stage at the Commodities Pavilion.

Photos of Illinois farm families along with the Illinois Farm Families logo (shown here), which is part of the farmer image campaign, will be featured around the grounds, in the Commodities

addition, farm families who visit the fair will be asked to have their photos taken and to share information about their farming operations, he added.

Activities also are being planned to link farmers, consumers, and food.

Fair visitors will be able to register for $5,000 worth of groceries for a year.

Chicago-area mothers will be invited to apply for an

opportunity to be one of five “field moms” who will participate in a family-to-family farm tour later in the year.

“They will come to our farms to see what we do,” Dunkirk explained. He added more information about the activity will be announced later.

During the fair, “we hope to have conversations (with consumers) ... and answer their questions about how their food is raised,” Dunkirk said.

Page 7 Monday, April 25, 2011 FarmWeek

LIVESTOCK

Cattle market may have reached seasonal peak

BY DANIEL GRANT FarmWeek

Cattle prices in recent weeks have been on fire even though the outdoor grilling season has yet to heat up.

But the market may have reached its seasonal peak, if consumers adjust their budgets to account for higher fuel and food prices by trimming beef purchases, according to Dale Durchholz, AgriVisor senior market analyst.

Steer prices in early April reached a record-high $125 per hundredweight. Prices as of last week receded slightly

but still traded close to $119 per hundredweight.

The average price last year, by comparison, was about $93 per hundredweight.

Meanwhile, the cattle on feed report released Thurs-

FarmWeekNow.com The complete cattle on feed report is available at FarmWeekNow.com.

day by USDA generally was friendly as marketings were above trade expectations while placements were a little below expectations,

according to Durchholz.

USDA pegged March marketings at 1.99 million head, up 4 percent from last year, and March placements at 1.92 million head, up 3 percent from a year ago.

Overall, the inventory of cattle and calves in U.S. feedlots as of April 1 totaled 11.27 million head, up 5 percent from a year ago.

“Both (the marketings and placements estimates) have repercussions that are friendly,” Durchholz said. “They suggest the near-term supply of cattle and supply in the distant months may be tighter

Meat exports off to sizzling start in 2011 Consumers around the world so far this year have not backed down from record-high meat and livestock prices.

U.S. pork exports the first two months of 2011 totaled 337,160 metric tons valued at $831 million, up 11 percent in volume and 17 percent in value compared to the same period last year, the U.S. Meat Export Federation reported this month.

“We’ve done very well lately on exports,” said Ron Plain, ag economist at the University of MissouriColumbia. “We exported more beef in 2010 than we imported, which is the first time that occurred since 1947.”

Exports of U.S. beef in January and February this year totaled 179,460 metric tons valued at $372 million, up 24 percent in volume and 45 percent in value compared to the same time last year.

“We’ve been steadily recovering beef exports since 2003” when numerous markets closed to U.S. beef due to the finding of BSE in a U.S. cow.

U.S. beef exports in February accounted for 12.9 percent of total production compared to 10.6 percent a year ago.

The trend is similar in the pork industry. U.S. pork sold outside the U.S. in February totaled 27 percent of production compared to 25.2 percent at the same time last year.

Plain said improvements in the world economy and a weak dollar are key factors driving U.S. meat exports.

“Then in some countries you have specialized situations (contributing to larger meat purchases),” he noted.

“In South Korea, they have foot-and-mouth problems so they’re euthanizing a portion of the (swine) herd, which increases pressure to import more meat,” he continued. “In Japan, domestic (meat) production was hurt a bit (by earthquakes and the tsunami), which creates a need to import more.”

In Japan, the leading value market for U.S. pork, exports in January and February were up 19 percent in volume and 17 percent in value com-

GROWMARK to purchase Indiana seed company GROWMARK last week announced it intends to purchase the assets of Select Seed in Camden, Ind. The transaction is expected to be finalized on May 1.

Select Seed is a third-generation, family business. It primarily is a corn sales and production company.

GROWMARK also plans to offer soybean seeds through Select Seeds.

“This will increase our overall seed business,” said Ron Milby, GROWMARK seed division manager. “We are interested in other seed acquisition opportunities.”

Select Seed’s brand is sold through more than 100 active farmer dealers in Indiana, southern Michigan, Ohio, and Kentucky.

GROWMARK, a Bloomington-based cooperative, provides ag-related products, services, and grain marketing in 31 states and Ontario, Canada. It owns the FS trademark used by affiliated member co-ops.

pared to last year. The other top markets for U.S. pork during the same time were Mexico, Hong Kong/China, South Korea, and Canada.

The top five markets for U.S. beef the first two months this year were Mexico, South Korea, Canada, the Middle East and Japan. — Daniel Grant

than we (in the trade) thought.”

The friendliness of the report, however, could be offset by a pull-back in demand.

Durchholz believes cattle prices could continue to edge lower, although prices are expected to remain high by historical standards, if demand softens.

“We’re starting to pick up some modest indications of resistance to higher (cattle and beef) prices,” the analyst said.

“We could see some pushback on the demand side that counters the positives of the report.

“We’re probably at the seasonal peak for the cattle market right now,” he predicted last week.

The cost of food ingredients has trended up for months and many retailers will be forced to raise prices if they haven’t already, Durchholz said.

“We’re starting to get to the point with food ingredients that there’s not much wiggle room” for retailers, he said.

Fast-food giant McDonald’s Corp. last week announced a plan to offset higher food ingredient costs by increasing the prices of some of its menu items.

McDonald’s projected U.S. food prices this year could increase between 4 and 4.5 percent, which would be the highest jump since a 5.5 percent increase in 2008.

FarmWeek Page 8 Monday, April 25, 2011

PRODUCTION

Cuts in biomass assistance program questioned

BY MARTIN ROSS FarmWeek

Congress’ decision to slash $134 million from the Biomass Crop Assistance Program (BCAP) may have seemed a reasonable compromise to help keep the government running.

But amid global turmoil and energy-driven consumer costs, Ernie Shea questions how cuts in promising renewable energy programs will keep the economy moving.

As prospective biomass producers approach a May 27 deadline for initial BCAP project involvement (see accompanying story), Shea, project coordinator with the 25X’25 national renewable energy initiative, fears a major cut in current fiscal 2011 BCAP spending could bode ill for future biofuels/biomass spending.

The 2008 farm bill program, created to foster regional clusters of energy crop production and processing, was targeted for cuts in the latest continuing resolution

approved to sustain federal operations through September.

But Shea argued BCAP and related programs represent “real

‘We are encouraging our policymakers to ensure t h e c u t s t h ey ’r e making are fair, are balanced, and are appropriate in terms of the national challenges we face.’

— Ernie Shea 25X’25

investments in a new economic opportunity for millions of Americans across the country.”

Faced with reduced dollars, USDA reportedly may delay some matching payments for BCAP participants, though “that doesn’t mean there won’t be any money available,” he stressed.

Shea noted fossil energy supplies are “finite,” and pointed out conflicts in the Middle East are having a major impact on overall energy pricing.

He emphasized energy prices are a key contributor to “price spikes we’re seeing across the economy.”

President Obama last week announced a new task force to investigate high gasoline prices.

“We certainly recognize the dire financial straits the country’s in; we recognize the need to cut back spending,” Shea said. “But we are encouraging our policymakers to ensure the cuts they’re making are fair, are balanced, and are appropriate in terms of the national challenges we face.

“If, in fact, they’re going to be reducing subsidies for renewable energy programs, we would expect they’d also be making reductions in other subsidies for other forms of energy, such as those the oil and natural gas industries would enjoy.”

Illinois FSA preparing for project deadline

BY KAY SHIPMAN FarmWeek

Illinois biomass growers and buyers have a May 27 deadline to apply for a biomass crop assistance program (BCAP) project area.

Previously, the Farm Service Agency (FSA) announced there would be project areas, but it released the application deadline only last week.

A BCAP project area is a geographic area in which one or more farmers have agreed to grow and sell eligible biomass materials to one or more biomass conversion facilities. Farmers and conversion facilities must apply jointly to FSA. Jamie Diebal, Illinois FSA conservation program specialist, said interested applicants should go to the FSA website {www.fsa.usda.gov/energy} for the latest details and forms.

Applications must be submitted to the state office by the May deadline, Diebal noted.

The Illinois Biomass Working Group (IBWG) “will try to act as a clearinghouse to link together” individuals who are interested in a project area, said Fred Iutzi, IBWG facilitator and agriculture and renewable energy program manager at the Illinois Institute for Rural Affairs at Western Illinois University.

IBWG may be contacted online at {www.illinoisbiomass.org} or by contacting Iutzi at 309-2981453 or e-mail f-iutzi@wiu.edu.

A BCAP project area application will require a great deal of information, such as studies on feedstock availability and economic impact, as well as planning between buyers and sellers, according to Iutzi.

Technical questions about BCAP should be directed to county and/or state FSA offices; however, all the details about the project area program have not been released, according to Diebal. She anticipated additional information will be posted on the website once it becomes available.

Iutzi viewed the planning and application process as necessary steps to develop biomass in Illinois. “It’s sound project development,” he concluded.

Ag science speaker draws crowd, opinions Agriculture’s contribution to Illinois State University’s Science & Technology Week attracted a standing-room-only crowd to a presentation on the benefits of herbicide usage in crop production.

Last week Leonard Gianessi, director of the Washington, D.C.-based Crop Protection Research Institute and CropLife Foundation, described how herbicides have reduced hand labor and increased crop yields, benefiting societies around the world.

“Any agricultural system that condemns a large segment of the population to the drudgery of hand weeding, that country will not move ahead economically,” Gianessi said.

Gianessi compared conventional agriculture methods to those used in organic farming. Organic production uses tillage and hand labor to manage weeds, he said.

A woman who identified herself as an organic farmer challenged Gianessi and said organic farmers also use mulch, cover crops, and crop rotation to manage weeds. Several audience members raised their hands when the woman asked organic farmers to identify themselves.

After a man commented on the value of hand labor in fields, Gianessi responded: “I’m trying to point out the magnitude. You would need tens of millions (of workers), and I don’t think the students of America would volunteer to do that.”

In addition to many ISU students, the audience included several conventional farmers, including Ron Moore, chairman of the Illinois Soybean Association, which had sponsored Gianessi’s presentation.

Afterward, Moore said the discussion “exposed students to issues that are out there.” “I applaud the farmers who are trying to find a niche market,” Moore added.

Rob Rhykerd, chair of ISU’s agriculture department, concluded that the science week event “served its purpose.”

“There was good, healthy, open discussion,” Rhykerd said. “It was a successful event with an exchange of opinions.” — Kay Shipman

Page 9 Monday, April 25, 2011 FarmWeek

FROM THE COUNTIES

B

UREAU — Bureau, Henry, and Stark County Farm Bureaus, along with the Kewanee Fire Department, will sponsor a SAFE (Surrounding Area Farm Emergency) course for fire, rescue, and EMS providers in those counties. The eight-hour session will be Saturday, May 21, at the Kewanee Fire Department. Cost is $10.

Call the Farm Bureau office at 815-875-6468 by May 6 for a reservation form or more information.

• Applications are available for the Bureau, Lee, and Whiteside County Summer Agricultural Institute June 13-17 at the Bureau Valley High School, Manlius. Cost is $100, or $80 if the teacher is a Farm Bureau member. Applications are available at the Farm Bureau office.

Deadline to return applications is Friday.

ASS-MORGAN — Farm Bureau will sponsor an informational meeting on the FutureGen project at 7 p.m.

Tuesday at the Berea Church, Prentice. The meeting is only for Farm Bureau members, who must have current Farm Bureau identification. Call the Farm Bureau office at 217-245-6833 for more information.

EE — Applications for the Bureau, Lee, and Whiteside County Summer Ag Institute June 13-17 are available on the website {www.leecfb.org}. Cost for Farm Bureau members is $80 and $100 for non-members.

Deadline to apply is Friday.

• A retirement open house for Judy Sharkey, Farm Service Agency (FSA), will be from 1 to 4 p.m. Friday at the FSA office in Amboy.

ASALLE — Farm Bureau will sponsor a bus trip June 14 to see the Chicago Cubs vs. Milwaukee Brewers at Wrigley Field, Chicago. Cost is $85 for members and $95 for non-members if

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paid by May 20. After May 20, the price increases to $90 and $100, respectively. Call the Farm Bureau office at 815-4330371 for tickets or more information.

TEPHENSON — The Progressive Agriculture Safety Day for children 6 to 14 will be from 8 a.m. to 12:45 p.m.

Saturday, May 14, at the Freeport fairgrounds. Registration forms are available at the Farm Bureau office or online at {www.stephensoncfb.org}.

Deadline for reservations is Friday, May 6. Call the Farm Bureau office at 815-232-3186 for more information.

• The Chicago Getaway bus trip is Saturday, May 14. Dropoff and pick-up points will be Navy Pier, the downtown shopping area, and the museum complex. Information is available online at {www.stephensoncfb.org} or call the Farm Bureau office at 815-232-3186.

NION — Farm Bureau has four scholarships for high school seniors who will pursue a degree in an agricultural field. Scholarship applications are available at area high schools and the Farm Bureau office.

Deadline to return applications is May 9.

ERMILION — Farm Bureau will sponsor a Summer Ag Institute workshop July 11-15. Presentations on classroom activities, visits with farmers to learn about today’s agriculture, and tours to various farms and agribusinesses will be held. Cost is $150. Teachers will receive up to 40 continuing professional development units.

Reservations are due May 1.

More information is available on the website {www.vcfb.info}.

SUPPORT FOR LOCAL ANIMAL SHELTER

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“From the counties” items are submitted by county Farm Bureau managers. If you have an event or activity open to all members, contact your county Farm Bureau manager.

SHOWING SUPPORT

Micheal Ayers, left, chairman of the Illinois Committee for Employer Support of the Guard and Reserve (ESGR), last week presented Illinois Farm Bureau President Philip Nelson with a certificate of appreciation and a Patriot Award lapel pin for the organization’s support of employees who serve in the National Guard and Reserve.

Nelson signed the first pledge of support in 2009 and resigned the pledge last week. Receiving similar awards were Susan Moore, director of the IAA Foundation, and Holley Hinthorn, a manager of computer operations for Country Financial. (Photo by Cyndi Cook)

The Fulton County Farm Bureau Young Farmers Committee presents $500 in cash and supplies to the Humane Society of Fulton County, which operates an animal shelter. The money was made possible through a Monsanto Builds American Communities grant the committee was awarded. The Young Farmers encouraged others to donate to and support local animal shelters instead of the Humane Society of the United States. Pictured left to right are Young Farmer Committee members Joe Tolley and Keith Mellert; shelter volunteers Andrena Roth and Jeanette Ewing; Young Farmers Chairman Julie Mellert; and Young Farmer member Justin Vigna. (Photo courtesy Fulton County Farm Bureau)

FarmWeek Page 10 Monday, April 25, 2011

PROFITABILITY

Illinois both a farming, mining state Golf outing to raise four feet or more. Mine accept or reject these proposmoney for IAA Foundation Illinois is a farming state — bypanels can be 1,000 feet by als.

BY PETE TROTTER

The largest golf outing to benefit agriculture literacy in Illinois will be June 16 at the Elks Country Club and the Wolf Creek Golf Club in Pontiac. The 15th annual Illinois Agriculture in the Classroom (IAITC) Golf Outing will be hosted by the IAA Foundation.

“Join us for a great day of golf for a great cause,” said Steve Wentworth, event chair“The money raised during ‘The m o n e y man. the outing will help bring Agriraised will help culture in the Classroom to b r i n g A g i n t h e more schools across Illinois.”

Driving ranges open at 9 a.m.

Classroom to with a shotgun start at 10:30 m o r e s c h o o l s a.m. for this scramble-style tournament. Golfers will comacross Illinois.’ pete for a number of great — Steve Wentworth prizes. A social hour, auction, and steak dinner sponsored by Event chairman Country Financial will conclude the evening.

The registration fee is $130 per golfer or $520 per foursome. Those interested in attending the banquet only may register for $50.

Online registration is available on the IAA Foundation website at {www.iaafoundation.org} or by calling 309-557-2230.

New promotional rates are being offered for family and teacher participation. The family rate is $200 per pair, a $60 discount. Golfers age 18 and younger playing with a parent or grandparent are eligible for this “twosome” discount. A special IAITC rate for a teacher or ag literacy coordinator will allow that golfer to play free with three additional registrations, a $130 discount.

“We look forward to seeing old friends and new teams out on the course this year for a day of fun and friendly competition,” said Susan Moore, director of the IAA Foundation.

“We are optimistic that our farmers will have completed spring work and can celebrate a successful planting with some well-deserved time on the course,” Moore continued. “We encourage our farmer teams to sign up early, and if fieldwork keeps them away, they can contact us for accommodations.”

75 percent of the land is farmed. Illinois also is a coal state — 68 percent of the land has coal.

Economic viability of modern mining, combined with potential damage to the farm, means that the interests of the Pete Trotter Illinois farmer and the miner may conflict.

Illinois coal is high in sulfur, which has made it less marketable due to environmental constraints, but power plants have been upgraded to permit the use of high-sulfur coal.

Improvements in mining technology also have contributed to the economic feasibility of mining Illinois coal, as automated modern longwall mining increased productivity by 50 percent. However, longwall mining involves planned subsidence within mine panels — the collapse of the surface

two miles in size, and mines can cover thousands of acres.

Farm impact may include drainage, erosion, and farm structure damage.

Can a farmer prevent coal mining? The question first turns on whether the farmer still owns mineral rights to the land.

The right to extract minerals, including coal, can be severed from surface rights in a mineral deed. Ownership of mineral deeds may be difficult to determine because severance may have occurred long ago, further complicated if rights defaulted to the local county for tax reasons. A title search can assist with determining ownership rights.

If the farmer owns the mineral rights, the coal mining company may propose a surface damage agreement offering compensation for a release of mining damage claims.

Alternatively, the company may offer to lease the mineral rights or to purchase the land.

The farmer has discretion to

BY DANIEL GRANT FarmWeek

A recent run-up in the price of various commodities, particularly in the energy sector, could dampen farm commodity demand in coming months.

Feeder pig prices reported to USDA* Range Per Head Weighted Ave. Price $32.00-50.62 $39.75 $69.00-76.19 $74.20 n/a n/a This Week Last Week 34,996 30,969 *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 $90.50 $91.32 $66.97 $67.58

Change -0.82 -0.61

USDA five-state area slaughter cattle price Steers Heifers

This week 118.89 118.85

(Thursday’s price) Prv. week Change 119.04 -0.15 118.71 0.14

CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states.

(Prices $ per hundredweight) Prev. week Change 134.37 -1.97

This week 132.40

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 125-175 lbs. for 165200 $/cwt.(wtd. ave. 185.56); dressed, no sales reported.

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 4-14-11 14.2 35.7 32.2 4-07-11 22.2 28.8 40.7 Last year 16.5 18.3 40.6 Season total 1336.6 1061.8 1077.4 Previous season total 1293.4 749.8 1100.7 USDA projected total 1580 1275 1950 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Pete Trotter is GROWMARK’s associate general counsel.

His e-mail address is ptrotter@growmark.com.

Economist: Inflation could dampen consumer demand for commodities

M A R K E T FA C T S Weight 10 lbs.

40 lbs.

50 lbs.

Receipts

If the farmer no longer owns the mineral rights, these rights may be purchased from the current owner. Again, a title search can be helpful.

If a coal mining company owns the mineral rights and will not sell those rights to the farmer, the farmer may not be able to prevent mining.

However, unless surface damage claims are explicitly waived, Illinois law requires coal mining companies to repair damage caused by mining, including subsidence.

Review of the mineral deed and any surface damage contract will clarify whether an explicit waiver of mining damage claims has been granted.

Even if such a waiver has been granted, future legislative or judicial activity may provide relief. In the meantime, vigilance and proactive measures are in order.

‘Consumers are finding disposable income getting squeezed.’

— Ron Plain Ag economist

U.S. consumer prices in March were up a half-percent from the previous month and 2.7 percent from a year ago.

The average price of a gallon of regular gasoline last week topped $4 per gallon in six states (Alaska, California, Connecticut, Hawaii, Illinois, and New York), according to AAA’s Daily Fuel Gauge. It was the first time prices surpassed $4 per gallon since gas topped out at a nationwide average of $4.11 in 2008.

Retail surveys suggest motorists have responded to higher prices by reducing purchases, the Associated Press reported.

The rise in the price of gas and other commodities also could have a negative impact on demand at the meat case.

“With some weakness in the U.S. economy (unemployment last week was 8.8 percent) and gas prices going up fast, con-

sumers are finding disposable income getting squeezed,” said Ron Plain, ag economist at the University of Missouri-Columbia. “I’m worried meat demand will back down.”

Meat, livestock, and crop prices in recent months surged to historic highs, and in some cases record prices, driven by strong demand and tight supplies.

Overall, food price inflation in March increased 2.9 percent compared to the same time last year, according to the CME Group Daily Livestock Report.

Meanwhile, energy prices last month increased 15.5 percent compared to March 2010.

“Part of the reason why retail food prices have not increased more is that raw food materials make up only a portion, and often a small portion, of the overall retail price,” authors of the Daily Livestock Report noted.

The rising costs of inputs are expected to have a large impact on farmers’ bottom lines this year. USDA recently projected farm production expenses this year will reach a recordhigh $274 billion.

FarmWeek Page 11 Monday, April 25, 2011

PROFITABILITY Corn Strategy

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

Planting conditions different than 2008 As much as everyone dwells on comparisons with 2008, current planting conditions this year have major differences compared to that year.

Southern planting has gone well. And there’s even been some good progress across the southern part of the Corn Belt. Weather forecasts for most of the Corn Belt and Northern Plains remain cool, and damp. But forecasts were becoming more uncertain just ahead of Easter.

The key feature to focus on is soil moisture because it is known. At present, soils are dry across the South, a little wet in the east/southeastern part of the Corn Belt, and wet in the northwestern Corn Belt

and Northern Plains. But it’s near normal across much of the Corn Belt.

In April 2008, it was significantly wetter than normal from eastern Kansas and Nebraska east. The Northern Plains were a little dry in 2008, as was the deep South. April 2009 was similar, except it was significantly wetter in the Northern Plains and closer to normal across the southern Corn Belt.

In May 2008, precipitation was mostly above normal from the Central Plains to the eastern Corn Belt. The situation was similar in 2009, with the heaviest amounts in the central Corn Belt.

We started those years with wet soils across much of the Corn Belt, only to have heavy rains that kept soil moisture conditions extremely wet, causing corn planting to get off to historically slow starts. Given the moisture difference, planting may go better than expected this year unless May weather is extremely wet as it was in 2008 and 2009.

The Northern Plains is a place to watch, with soil moisture nearly as wet as it was in 2009. Significant acreage was lost in North Dakota to both spring wheat and corn, with soybean acreage rising because of planting issues.

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2010 crop: Recent market action suggests a short-term top is in place, positioning prices to drift sideways to lower into a short-term cycle low due in early May. If July futures drop below $7.13$7.22 prices could slip to $7.

Use rallies to wrap up sales, other than gambling bushels.

Hedge-to-arrive (HTA) contracts for summer delivery are the best marketing strategy.

2011 crop: December futures are showing initial signs they could be topping. If they close below $6.50, critical support at $6.25 could be tested.

Technically, a close below that would not be good. Given the initial topping signs and the downside risk, boost new-crop sales to 40 percent now. At the moment we prefer HTAs for fall/early winter delivery.

Fundamentals: The recent rally was tied to forecasts for cool/damp conditions to persist in the Midwest. The latest 11- to 15-day forecast called for potentially drier weather. And the new 30-day outlooks were mostly normal, except for the Northern Plains.

Soybean Strategy 2010 crop: Spread unwinding against both corn and wheat may have been responsible for soybean strength more than fundamentals. Unless weather becomes a problem this summer, old-crop prices have limited upside potential. If you still have inventories, use rallies to $13.70 on July to wrap up sales.

2011 crop: Uncertain newcrop fundamentals are somewhat supportive, but softening demand from China and steadily rising South American numbers still could leave the world with adequate supplies even without larger U.S. plantings.

Given November futures inability to hold $14, you should increase your sales to 40 percent now. Use a fall/early winter HTA contract if possible.

Fundamentals: Talk continues to center around Chinese cancellations, but they bought a small quantity from the U.S. last week. Their crush margins remain poor, and there

are signs pork demand may be slipping. The best place for acreage gains this year are in the Northern Plains.

Wheat Strategy 2011 crop: The shortterm trend in wheat has turned back higher, with prices on the Chicago July contract again trading above key moving averages. Its close above the 100-day moving average ($8.25) opens the door for it to test the previous high at $8.43 and psychological resistance at $8.50. Use rallies on Chicago July futures for catch-up sales. Check the Hot-

line frequently; we could recommend additional new-crop sales at any time. We prefer HTA contracts, especially for winter delivery, if you have the capability to store wheat.

Fundamentals: Growing conditions both domestically and internationally continue to dominate the trade’s attention.

The southern U.S. Plains remain extremely dry, while wet soils in North Dakota and Canada are preventing the planting of this year’s spring wheat crop. In addition, there are dry weather issues in England, France, and Germany.

FarmWeek Page 12 Monday, April 25, 2011

PERSPECTIVES

ONE FOR THE RECORDS In 2009, Illinois farmers coped with a wet, cool growing season.

They were not anticipating what they harvested in their cornfields.

Illinois farmers have experienced cool, wet soils before, but the conditions the 2009 growing season — and the corn yields — were unique.

Illinois corn yields that year were near-record highs and occurred despite highly STANLEY CHANGNON unusual growing season weather with exceptionally low temperatures and heavy rainfall, serving as the record wettest and coldest growing season in the past 70 years.

Most months from March through November had above average precipitation and below average temperatures. During that cool and wet growing season, several agricultural experts predicted below average corn yields.

The wet, cold spring greatly delayed planting of corn, usually detrimental to yields. Past research has shown that wet,

cold springs acted to decrease yields.

The wet and cold fall in 2009 delayed harvesting, a situation also considered detrimental to corn yields. Research has shown that persistent wetness in past falls delayed harvesting and reduced yields.

A study of 2009 was done to try to assess why near-record corn yields came with weather conditions previously thought to be crop limiting. Assessment was based on comparison of yields in prior years with weather conditions similar to those in 2009.

Examination of weather conditions of past growing seasons in Illinois, dating back to 1940, revealed very few years with wet and cool conditions during most of the growing season. No past year exactly matched the conditions of 2009.

The 2009 growing season had precipitation that was 14.6 inches above average and a temperature that was 1.2 degrees below average. Together, these

FutureGen comments

Jacksonville groups have consistently championed this underground storage facility because of the thousands of jobs it would create for area and other Illinois residents.

We have maintained that the area will see a temporary boost in the economy, but it will not result in the numbers of longterm jobs widely reported by Jacksonville groups supporting this project.

MIKE FLYNN, Alexander

are the greatest seasonal departures on record dating back to 1940. All the months from March through October had above-normal rainfall, and only June had above-normal temperatures.

Examination of past climate data for Illinois In 2009, Fayette County Farm Bureau President Ken Cripe of Vandalia looks for 1941-2009 found that over a cornfield that was drowned out or had a stunted crop due to numerous four past years had grow- rounds of heavy rain. (FarmWeek file photo) ing season conditions simdict the magnitude of the state’s These model results help indiilar to those in 2009. These final yield. cate why agricultural experts years included 1945, 1970, The inability to predict the were predicting low yields dur1974, and 1990. above-average yield in 2009 ing 2009.

The yield values for 2009 and likely resulted from awareness Field experiments with corn the four similar seasons were that past similar cold and wet in Central Illinois conducted compared with the expected seasons had resulted in relativeduring 1988-1994 involved average yield values. This ly low corn yields. applications of various increasrevealed that 2009 had a corn The unusual 2009 outcome es to the natural rainfall by plus yield of 174 bushels per acre, likely reflects ongoing improve10, plus 25, and plus 40 percent. which was 5 bushels above that ments in plant genetics, making These tests showed that the expected with average weather, corn less sensitive to weather increases of 25 and 40 percent a significant difference. stress, and new farming pracin near-average season rainfall However, the yields in the tices that collectively produce led to corn yield decreases. four similar weather seasons different outcomes in recent In summary, the wet and were all well below average yield years from those in similar cool weather during the 2009 expectations. growing seasons 10 to 60 years growing season in Illinois proCrop yield-weather models ago. duced exceptionally high corn developed during the 1950yields that were well above 1990 period were used to test Stanley Changnon is chief emeritus expectations. the 2009 weather conditions. of the Illinois State Water Survey Crop experts, most farmers, All the models showed a and outputs from crop-weather and a geography professor at the decrease in corn yields for University of Illinois. models failed to correctly pre1945, 1970, 1974, and 1990.

LETTERS TO THE EDITOR Editor’s note: In an effort to accommodate several letters to the editor on the FutureGen project in Morgan County, FarmWeek has edited these letters to reduce the redundancy and allow all writers to make their key points.

Editor: As an owner of farmland in Morgan County, I question why FutureGen wants to experiment with CO2 storage under prime farmland. One small leak or accident will wipe out this God-given land so it will no longer be viable to raise crops or feed livestock.

One day we will wonder why we have a shortage of grain because of this experiment.

Is this good stewardship of the land for future generations?

MAYMIE BERGSCHNEIDER, Jacksonville Editor: A FarmWeek interview with Ken Humphreys, CEO of FutureGen, finally acknowledged what many of us in the Alexander vicinity had been saying for months to Jacksonville business groups — the pipeline will be done by a Texas-based firm.

Editor: I’m very disturbed by the lack of support farmers and farm owners have received from Farm Bureau concerning the FutureGen project. Why has Farm Bureau taken a neutral stance?

Studies from respected scientists name all sorts of potential environmental hazards from carbon sequestration.

Even environmental advocacy groups are opposed to carbon sequestration.

The U.S. Department of Energy estimates carbon sequestration will result in about 50 percent higher energy costs to consumers. So who’s the big winner? Coal companies that will sell 40 percent more coal.

Meanwhile, farmers and farm owners in our area will be facing higher energy bills, eminent domain battles, and living over the top of a major environmental hazard.

DAVE AND RACHAEL DAVENPORT, Morgan County farmers, Cass-Morgan Farm Bureau members Editor: I wanted to let you know that not all parties involved are in favor of the FutureGen project. We live in Cass County and will soon be landowners in Morgan County and are strongly opposed to the project.

There are many unanswered questions and environmentalconcerns which need to be addressed before this new technology can be seen as being safe and ecologically friendly.

Until there is better proof, we do not feel this is good land stewardship.

Please remember that you represent the farmers of Illinois, and that those farmers use the land to produce food and fuel for the world. They and their neighbors need facts to make sound decisions on major changes to the use of their land and the impact that use will have on the future value of the

land both as an investment and as fertile, productive agricultural ground.

We need to make a considered decision and not be influenced by all the urgency to spend $1 billion of taxpayer money.

ELEANOR TALKEMEYER, Arenzville Editor: I am a Morgan County native, and my family retains a vested interest in the farm there.

Because of so many unanswered questions and environmental concerns, we, and hundreds of others who have signed petitions, strongly oppose this admittedly experimental project.

FutureGen CEO Ken Humphreys was quoted in 03/01 New York Times as say-

Letter policy Letters are limited to 300 words and must include a name and address.

FarmWeek reserves the right to reject any letter and will not publish political endorsements.

All letters are subject to editing, and only an original with a written signature and complete address will

ing, “Exactly how the carbon dioxide will behave is uncertain ... the gas might cover 2,500 acres, or perhaps 10,000,”and that before injection can begin, “... a change in Illinois’ liability law” will be needed.

One of the most perplexing of my many unanswered questions: How is it that a handful of people, who’ve apparently accepted offers they cannot refuse, can control the fate, quality of life, and destiny of everyone for miles around them?

People seem ignorant or unmindful that this would not be a contained (CO2) disposal site, as we count on toxic or other waste storage to be.

MARILYN SCHUTT, Mill Spring, N.C. (Morgan County native)

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