FarmWeek Feb 21 2011 by Illinois Farm Bureau

COUNTY OFFICIALS should focus on their overall goals when revising wind development ordinances, two experts advise. ............2

THE ETHANOL INDUSTRY continues to fight for policy support amid high corn prices and legislative resistance. ......................4

THE PORK sector faces mounting public and regulatory pressures, the Illinois Pork Producers Association’s new president warns. ..................5

Monday, February 21, 2011

Two sections Volume 39, No. 8

Could president’s plan lead to farm bill reopening? Proposed budget targets direct payments BY MARTIN ROSS FarmWeek

Faced with a dual White House/congressional threat of major ag budget cuts, producers last week feared potential “reopening” of the current farm bill before Congress can develop solid program spending priorities for the next one. President Obama’s fiscal 2012 USDA budget seeks $4 billion in cuts in discretionary spending over last year’s fiscal 2011 request. Total USDA outlays would be reduced by $7 billion to help bring down the budget deficit, Ag Secretary Tom Vilsack reported. Obama proposes eliminating farm payments to producers with higher adjusted gross incomes (AGI). After a proposed three-year phase-in period, payments would be made only to those with less than $500,000 in AGI from agriculture or less than $250,000 off-farm AGI. Obama’s plan reportedly would save $2.6 billion over 10 years and affect 30,000 current payment recipients. USDA’s new 2011 farm income forecasts show “overall income growth,” but “it’s not necessarily distributed among all sizes of operations,” said Vilsack, who defend-

ed targeting the payments. The USDA budget also seeks a cut in maximum annual perfarm direct payments, from $80,000 to $60,000, and reduced premium assistance to crop insurers who sell catastrophic “CAT” coverage. CAT cuts, a follow-up to $6 billion in 2010 cuts, aims to save an added $1.8 billion over 10-years. Vilsack also cited proposed cuts in so-called research and conservation “earmarks,” such as watershed flood protectionrehabilitation, wildlife, and grasslands programs. American Farm Bureau Federation analyst Tara Smith finds “nothing unusual on that front,” given the president’s push for potentially “painful” cuts. “Presidential budgets get filed away pretty quickly,” said Smith, who saw Congress’ debate over the current budget continuing resolution (CR) drawing attention even more rapidly away from Obama’s plan. However, House Republicans proposed even more aggressive CR cuts, including what Smith termed an estimated 22 percent “hit” in discretionary ag funds and conserva-

reopening of the 2008 farm bill. She stressed “we don’t write farm policy for one year,” arguing the current crop price situation that’s spurred sentiments toward payment cuts eventually could sour. “I don’t suspect there’s going to be a lot of desire within the ag committees

either on the House side or the Senate side to open up the farm bill any earlier than we have to,” Smith said. “The 2008 farm bill was a commitment to farmers and ranchers and the nutrition community and the conservaSee President, page 4

PORK EXPO INFO

Art Kuhn, left, a pork producer from DeKalb County, and his son, Hayden, center, a senior at GenoaKingston High School, view corn samples and discuss the importance of feed particle size for improved digestibility in livestock with Lee Drewelow at the Illinois Pork Expo in Peoria. Drewelow was promoting IFA roller-grinder systems at the expo. More from the Pork Expo appears on page 5. (Photo by Ken Kashian)

Quinn seeks more cuts, borrowing to pay bills BY KAY SHIPMAN FarmWeek

Periodicals: Time Valued

tion program cuts for the remainder of fiscal 2011. That was versus an average 10 percent cut in other non-defense areas, and she argued ag has been asked to shoulder “more than our fair share.” Further, Smith told FarmWeek near-term cuts could force a “short-sighted”

Illinois must tighten its belt and address billions in overdue bills that will remain despite an income tax increase, Gov. Pat Quinn said last week. Quinn warned lawmakers they must make difficult choices when he unveiled his $52.7 billion budget Gov. Pat Quinn for fiscal year 2012 that starts July 1. The governor’s proposal includes borrowing to pay $8.75

billion in overdue bills. “We need to keep investing in essential, necessary services while cutting programs that don’t work,” Quinn told legislators gathered in the House. Illinois Farm Bureau President Philip Nelson pointed out Quinn’s proposed budget “reflects the serious challenges that the state’s fiscal situation continues to present.” “There is, unfortunately, no escaping the reality that cuts need to be made, and that will cause a lot of pain. That pain needs to be shared by everyone,” Nelson said. Quinn’s staff emphasized his proposed budget included no

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new programs but is larger than previous budgets because it included $1.7 billion in higher pension costs and other expenses. A larger budget is necessary “because we’re fixing the system ... We have to include everything in the budget,” Jack Lavin, Quinn’s chief of staff, told reporters during a briefing. State Budget Director David Vaught estimated the state may face a $9 billion to $10 billion deficit if no cuts are made or borrowing is not approved. Lavin and Vaught claimed the budget included accountability measures and goals for agencies. They also conceded some programs are more easily

measured by accountability yardsticks than others. “Continued fiscal reform and changes need to occur,” IFB’s Nelson said. “The state needs to get back on the right track for the future and once again make it a desirable place to live and work.” Illinois is paying the price for delaying payments to service providers. Lavin estimated the state is paying as much as $700 million more each year because vendors are charging more to offset the long delay in state reimbursements and contractors have withdrawn See Quinn, page 3

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FarmWeek Page 2 Monday, February 21, 2011

NATURAL FORCES

Quick Takes ILLINOIS HIGH-SPEED RAIL ON TRACK — Other states are backing away from high-speed rail, but not Illinois. Illinois is “leading the nation in building a robust and efficient high-speed rail network,” Gov. Pat Quinn said in his budget message last week. In Illinois, demand for passenger rail service is at an alltime record with Amtrak reporting a record 2 million riders last year, Quinn noted. The governor proposed to increase Amtrak funding by 42 percent. Quinn also said he intends to go after more federal highspeed funds. That may be possible, because last week Florida Gov. Rick Scott rejected $2.4 billion in federal funds to build the first phase of a Tampa–Orlando–Miami high-speed rail line. Likewise, the governors of Wisconsin and Ohio also recently turned down a total of $1.2 billion in federal funding for new passenger lines. Quinn reported the prospect of high-speed rail in Illinois already has attracted new manufacturers to the state. RIVER ISSUES — Illinois lawmakers joined forces last week to fight efforts to block key navigation channels and ensure flood protections within the Mississippi River basin. Springfield Democrat Sen. Dick Durbin, Highland Park Republican Sen. Mark Kirk, Collinsville Republican Rep. John Shimkus, and Belleville Democrat Rep. Jerry Costello sent a letter to President Obama urging him to include levee and related improvements in administration infrastructure proposals. The four held a Southern Illinois levee “summit” in December. Durbin called flood protection “a national priority. Kirk stressed the need to maintain “the jobs that depend on our riverways,” through lock and levee upgrades. Meanwhile, Rep. Judy Biggert, a Hinsdale Republican, led the fight against amendments to the House budget continuing resolution that would result in “cutting off the entire Great Lakes region from billions of dollars in maritime commerce.” Measures focusing on Asian carp control proposed prohibiting use of federal funds to open Chicago’s Thomas J. 0’Brien Lock and Chicago River Controlling Works. Biggert and Company argued $29 billion in barge traffic — including coal, asphalt, gravel, grain, road salt — relies on open channels. SALUTE TO THE BLUE, GOLD — More than 17,400 FFA members in Illinois will celebrate National FFA Week through Saturday with a variety of activities. Illinois has about 300 FFA chapters across the state. FFA chapters in Illinois and around the nation use FFA Week to educate the public about agriculture and agriculture education. National FFA Week occurs during the week of President George Washington’s birthday. The Illinois FFA members and the Illinois Agriculture in the Classroom program are using a children’s book about George Washington and his farm as a teaching tool.

(ISSN0197-6680) Vol. 39 No. 8

February 21, 2011

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.

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County officials advised to consider goals in revising wind ordinances BY KAY SHIPMAN FarmWeek

County officials should focus on their overall goals — not specific wind farm projects — when revising wind development ordinances, two experts advised at a recent wind energy conference. “The approach a county (government) takes depends on if it wants wind (development). And if so, where and how much?” said Matt Boss, a business development manager with Mainstream Renewable Power. “It is important to set economic development goals,” Boss continued. “Then ordinances need to be tailored depending on the county, whether it’s agricultural or urban.” Boss was part of a county ordinance panel during the recent Siting, Zoning, and Taxing Wind Farms in Illinois Conference in Normal. Recently, several Illinois counties have revised or are in the midst of revising wind energy ordinances. Other counties are considering placing a moratorium on wind development. Iroquois County is under a six-month moratorium that will end in April. One driving force behind Iroquois County’s moratorium

was concern about the disposition of the turbines after they’ve outlived their usefulness, said Iroquois County Board member John Wilkening, who also serves on the Ford-Iroquois County Farm Bureau Board. The county “didn’t want to be sitting here with a bunch of towers” after a wind farm closed, Wilkening said. Boss and fellow panelist Jim Griffin, a Chicago attorney, said they favored revisions of county wind ordinances instead of moratoriums on new development. “As soon as a county knows the change it wants, it can amend an ordinance. It doesn’t have to use a moratorium,” Griffin said. Boss advised county officials to use ordinances to set wind development ground rules, such as standards for shadow flicker and noise. “We like counties with a view of what they want to do with wind (energy),” he added. County officials should use opportunities, such as when wind developers apply for special use permits, to ensure local standards are understood and will be met, Boss said. “A county can make clear what a developer must do to meet the standards,” he explained.

Boss recommended county officials focus on specific standards for noise, safety, and shadow flicker and avoid using blanket requirements, such as large setbacks, to achieve those standards. “Once a turbine is far enough away to comply with the (noise) ordinance, why is any further setback required?” Boss asked. Griffin cautioned county officials that passage of moratoriums must follow a prescribed process and meet requirements for public notice, etc. “A moratorium must have a deadline and the period should be as short as a board feels is feasible ... (The moratorium) needs to be clear so staff can implement it, and landowners and developers understand what is and isn’t allowed,” Griffin said. County officials also need to consider if a moratorium or amendments will apply to projects that have not filed for permits, have filed for permits but not had a hearing, have received approval but aren’t built, or are already constructed. Generally, changes don’t affect already-built projects unless the change enacts such things as new reporting requirements, Griffin added.

Winter temps may finish on milder note BY DANIEL GRANT FarmWeek

Temperatures this week are expected to cool off in Illinois after a much-welcomed warmup last week. Fortunately, though, it doesn’t appear the weather pattern will return to the frigid, snowy conditions experienced much of December through the second week of February, according to Mark Russo, meteorologist with Chesapeake Weather Services. “It looks like a new, very spring-like pattern has evolved and will be with us for quite some time,” Russo told the RFD Radio Network. The temperature last week briefly topped 60 degrees in many parts of the state after dipping below zero the previous week. Highs this week are not expected to be as warm as last week, topping out in the 30 and 40s, but it still should be an improvement compared to the previous eight weeks. “We had very cold temperatures in place in (December), January, and to start February,” Russo said. The statewide temperature

in December averaged a frosty 24 degrees, 5.8 degrees below normal, while the temperature in January averaged just 21.8 degrees, 3 degrees below normal, according to the Illinois State Water Survey. As for precipitation, odds favor the wetter pattern of recent years will continue, Russo said. But there may not be as much snow the final four weeks of winter. “We haven’t seen any significant precipitation since the big storm (Jan. 31 through

Feb. 2), but precipitation may be on the increase,” he said. “With the warmer temperatures, it will allow most of the precipitation to be in the form of rain instead of snow.” So what caused the sudden change in the weather pattern last week? In an ironic twist, Russo suggested the powerful blizzards that struck the Midwest and parts of the southern and eastern U.S. the first half of February may have disrupted the jetstream, thus producing the new weather regime.

Vegetable researcher seeks farmers Dan Anderson, research specialist at the University of Illinois, is looking for 10 small-scale farmers for an onfarm research project on sustainable vegetable production. Ideally, 10 farmers from across the state will be selected, according to Anderson. Those farmers will have the potential to achieve the project goal of improving the sustainability of smallscale, management-intensive vegetable farms through onfarm experimentation and use of cover crops during

fallow periods, he added. Farmers who are selected and successfully complete the project will receive a $500 honorarium. “This research builds upon previous experimental field trials to test cover-cropping strategies using on-farm research and farmer-to-farmer education,” Anderson said. To be considered, complete the online application form at {http://tiny.cc/fallowstudy} or contact Anderson by calling 217-621-7974 or e-mailing aslan@illinois.edu).

Page 3 Monday, February 21, 2011 FarmWeek

STATE

Quinn seeks cuts in ed, health care funding BY KAY SHIPMAN FarmWeek

School districts and health care providers face state funding cuts in Gov. Pat Quinn’s proposed budget for fiscal year 2012. The governor maintained he is supporting essential services, but he suggested cuts to education and human services would save the state hundreds of millions of dollars. Quinn proposed to increase the rate of perpupil funding by $148 to $6,267 per student and to increase early childhood education by $38 million. The governor also targeted Illinois’ 868 school districts and urged consolidation but didn’t set a specific goal. “Our fiscal reality demands consolidation. There are too many districts,” the governor said during his budget message. District consolidation should not be mandated, according to Illinois Farm Bureau President Philip Nelson.

“The state should not be forcing schools to make decisions that local property taxpayers may not be supportive of,” Nelson said. “State funding is critical in providing the education of our children, but it is local property taxpayers who bear the greatest support and remain in control of their local schools.” Quinn also proposed cutting state funding by $95 million for school transportation and to eliminate $14 million in state funding for regional offices of education. Local districts should pay for student transportation costs, he suggested. Ben Schwarm with the Illinois Association of School Boards noted the state already mandates that districts transport students. Plus, the state was six months behind in paying transportation funding in the last budget and is six months behind in the current budget, Schwarm added. Doctors, hospitals, and nursing homes, especially those in rural areas and the poor who depend on them, face a potential $552

million cut in Medicaid rates. An already strained system in rural Illinois may be pushed to the brink, according to Mary Jane Clark, president of the Illinois Rural Health Association. Clark said many rural health care providers do not accept new Medicaid patients now because of the state’s low reimbursement rate and a six- to eight-month delay in payment. “We wouldn’t think of going into a grocery store, picking up a $3 gallon carton of milk, paying them 10 cents, and saying that we’ll pay the rest later. But that’s what we’re doing with our health care system,” Clark said.

Governor Quinn pledges to double Illinois exports over 5 years SWCD budget cut; consolidation urged Gov. Pat Quinn held up Illinois exports as a shining example of the state’s economic power during his budget address last week. “We are sixth in the nation in exports and first in the Midwest,” Quinn said, highlighting a recent soybean sale to China. “As governor, I pledge to double our exports over the next five years.” Quinn said he plans to reorganize the state’s trade offices.

During a briefing for reporters, the governor’s staff said the state would develop a more flexible trade presence overseas, particularly in South America, Africa, and Southeast Asia. Quinn proposed level funding overall for the Illinois Department of Agriculture (IDOA) with a budget of $96.781 million, including $14 million in federal funding. However, $600,000 was cut from the budget for Soil and Water Conservation Districts (SWCDs). David Vaught, the gover-

nor’s budget director, said the state needs to consolidate SWCD offices and “could use a regional approach for the administration of those programs that spends less on administration.” “The governor has encouraged further consolidation of Soil and Water Conservation Districts. While we are concerned with the potential impact, we will reach out and work with the governor and the General Assembly to see if there are alternative ways to reduce spending, ” said Illinois Farm Bureau Presi-

dent Philip Nelson. Our goal will be to minimize the negative impact on our members. Some SWCDs are struggling with skeleton staffs and may close soon, according to Rich Nichols, executive director of the Association of Illinois Soil and Water Conservation Districts (AISWCD). Nichols said two districts may close by the end of March, another one the following month, and three by the end of May. The Department of Natural Resources (DNR) received

small increases in state funding under the governor’s budget, but will see a 53 percent decrease in federal funds. The federal cut reflects the one-time infusion of federal stimulus dollars, primarily for control of the invasive Asian carp, according to Chris McCloud, DNR spokesman. DNR’s overall budget is proposed at $258.97 million, down 7.2 percent from the previous year. McCloud said the loss of federal funding would not impact any programs. — Kay Shipman

Push begins to merge state treasurer, comptroller offices Estimated savings $12 million a year Illinois citizens would save about $12 million annually and be well served if the state combined the offices of the treasurer and comptroller, Illinois Treasurer Dan Rutherford said in a press conference last week. Rutherford, joined by sever-

al state senators and representatives, launched the latest effort to amend the Illinois Constitution and consolidate the two constitutional offices. “It’s a no-brainer,” said Sen. Kwame Raoul (D-Chicago), one of Senate bill sponsors. The timing is right to merge the two offices because several changes have occurred since the 1970 state Constitution

was written, Rutherford said. Illinois has gained an auditor general who reviews and audits the state finances. Computerized records and other technology would make possible the management of a single state office, to be known as the Comptroller of the Treasury. Rutherford explained $4 million of the $12 million in savings would come from reduced office expenses and staff, while the remaining $8

sale of soybeans to China. In addition, the state also must continue upgrading its infrastructure, including information technology and broadband, the governor said. To enhance innovation and entrepreneurship, Quinn named a new innovation council (see accompanying article). It was one of several blue-ribbon panels the governor created last week. Quinn challenged legislators who don’t like his budget proposal to put forward their own counter-offer: “Saying no is not enough unless you are willing to offer real alternatives,” he said.

Quinn names new Illinois innovation council

Quinn Continued from page 1 contract bids that now must be re-bid, usually at higher prices. Although Quinn’s budget speech was short on numbers, he did offer support to sectors

FarmWeekNow.com For detailed information about the 2012 state budget and its effect on ag, go to FarmWeekNow.com.

of interest to agriculture. The governor said he wants to build up Illinois’ export markets and will restructure the state’s foreign trade offices. During his speech, he highlighted the recent $1.8 billion

million would be saved through better money management. Rutherford added both he and Illinois Comptroller Judy Baar Topinka support the merger. Separate bills have been introduced in the House and the Senate. To be put before voters, a bill with the same wording must receive a three-fifths vote in both chambers. The proposed amendment would then be put on the

Gov. Pat Quinn last week named business executives, researchers, and university leaders to a new innovation council that will focus on technology and economic growth. The panel will be chaired by Brad Keywell, co-founder of Groupon, an Internet-based company that works with businesses to provide discounts for products and services. The council is to work with academic, business, and government sectors to evaluate and recommend initiatives to support innovation. Council members will develop methods to identify, promote, and attract innovative enterprises and develop policies to grow and retain innovative entrepreneurs and researchers. Council members include: Curtis Baird, head of two Carbondale technology compa-

November 2012 ballot. If approved, the amendment would affect the 2014 election for the newly combined office. Rutherford emphasized a combined office is better suited to today’s system of government than the outdated treasurer’s vault with an 18-ton door three floors beneath the Capitol. “We don’t operate with bags of money three floors below the State Capitol anymore,” the treasurer concluded. — Kay Shipman

nies; Dr. Caralynn Nowinski-Chenoweth, a Chicago investment banker and physician; John Clark, president of Reggio’s Pizza of Chicago; Lisa Freeman, vice president of research at Northern Illinois University; Kendall “Ken” Hunt, chairman of VASCO Data Security International; and Eric Isaacs, director of Argonne National Laboratory. Other members are: Matt Maloney, head of an online ordering service for 4,000 restaurants; Norbert Riedel, chief scientific officer for Baxter International; Lawrence Schook, University of Illinois interim vice president for research; Joseph Walsh, Northwestern University vice president for research; and Howard Tullman, president of Tribeca Flashpoint Media Arts Academy.

FarmWeek Page 4 Monday, February 21, 2011

GOVERNMENT

Transportation support fine; funding a question mark BY MARTIN ROSS FarmWeek

Washington appears to realize transportation improvements are crucial to boosting the economy, but money will be the “main friction point” as the rubber meets the road, said Soy Transportation Coalition Director Mike Steenhoek. President Obama has proposed a six-year, $556 billion national transportation bill. While “aggressive,” that plan is consistent with efforts needed “to get our infrastructure back up to acceptable levels,” Steenhoek told FarmWeek. He conceded the tight fiscal environment in Washington, suggesting long-term funding ultimately could come in at as little as half that amount. However, he said commercial transportation should be viewed as an investment in economic growth and jobs “rather than just spending money. That said, Steenhoek is encouraged “any time our elected officials, particularly the president, place great emphasis

on transportation.” “One of the things that happens during an economic downturn is you start asking how we can start pulling ourselves from the malaise we find ourselves in,” he said. “Transportation is one of those things, not only through the job-creating potential of infrastructure projects, but also, more significantly, through the greater efficiency enjoyed by the U.S. economy once projects are actually built.” The president offered few details about how to pay for new transportation spending. The White House repeatedly has dismissed the notion of raising gasoline taxes to fund highway improvements, but officials are wary of added federal debt. Transportation projects normally are financed through “some form of taxation or some form of debt,” Steenhoek said. Complicating the issue is Obama’s proposal to put a million electric cars on the road by 2015 — a move that would reduce fuel taxes that feed the

CFTC $$ at risk The market could become riskier business for producers if Congress fails to fund the beefed-up mission of the Commodity Futures Trading Commission (CFTC), investor advocates warned last week. The proposed House Republican 2011 Continuing Resolution — which would fund the government for the balance of the fiscal year once funding runs out March 4 — seeks cuts of $56.8 million from the CFTC’s $168.8 million budget. Further, House lawmakers propose even more dramatic cuts in forthcoming fiscal 2012 spending, rolling funding for the commission back to 2008 levels. Fiscal 2012 CFTC funding would drop to roughly $110 million. Tracy Stewart, executive director of the group ShareOwners.org, warned that would undercut market regulators as they attempt to “oversee the most sweeping financial reforms since the Great Depression.” In the case of the CFTC, that includes new oversight of the “vast, multi-trillion-dollar” over-the-counter derivatives market, Stewart said. Barbara Roper, Consumer Federation of America director of investor protection, argued newly approved financial reforms aim to bring “more transparency and more safety to the system.” In late January, CFTC issued proposed rules setting limits on the amount of positions a person can hold with respect to commodity futures and option contracts. Roper maintained position limits should help prevent commodity markets from being “driven by speculators” rather than by businesses that use them largely to manage risk. “Averages businesses — farms, all sorts of businesses — use the commodity/derivatives markets for basic, day-to-day business functions,” Roper told FarmWeek. “They use them to hedge risks. When those markets fail, the cost of managing risks goes up. When there’s no transparency, the cost of managing risks goes up.” Until Congress provided it a recent funding boost, CFTC staffing had fallen to the same level as when the agency was created in 1975. Over the past decade, trading volume in the markets overseen by the agency has risen nearly fivefold, and the number of actively traded futures and options contracts has increased sevenfold. Failure to increase or at least hold the line on CFTC funding could force the commission to focus its energies on derivatives regulation, resulting in “a decline in the quality of regulation we’re seeing in the commodity/futures markets,” Roper said. She said claims regulators could cut costs by improving efficiency, arguing budget cuts limit adoption of technologies that would strengthen regulatory oversight. — Martin Ross

national Highway Trust Fund and thus would “exacerbate the funding gap,” Steenhoek said. The war on so-called spending “earmarks” also could impede funding for regional projects that together form crucial commercial transportation networks, he added. While many Capitol Hill lawmakers

continue to share “an affinity for agriculture” and its needs, “that’s not necessarily the case within the federal agencies,” Steenhoek stressed. “If you’re going to have a ban on earmarks, you’re basically going to allow federal agencies to actually conduct that spending,” he said. “I’m not

sure agriculture’s going to win with that scenario. “There has to be a way for members of Congress to be able to direct resources to the areas that are going to benefit their states and the industries they represent. We can’t just defer all that to the federal agencies.”

Ethanol battle continues The battle over ethanol growth intensified as biofuels supporters took aim at proposals targeting “E15” and fuel infrastructure incentives and corn and livestock producers debated the impact of ethanol on grain availability. Rep. John Sullivan (R-Okla.) last week proposed cutting funds needed by the U.S. Environmental Protection Agency (EPA) to implement use of 15 percent ethanol blends. Renewable Fuels Association President Bob Dinneen argued the measure “seems more about political science than physical science,” and “would only serve to slow the evolution of America’s domestic ethanol industry.” At the same time, Rep. Jeff Flake (R-Ariz.) proposed to bar use of USDA funds to help

install blender pumps which would enable consumers to choose from among a variety of ethanol blends. EPA’s fall announcement of E15 approval for 2006 and newer vehicles — later expanded to 2001 or newer cars and light trucks — has spurred efforts by petroleum interests and food manufacturers to block higher ethanol blends, the latter charging ethanol growth has inflated corn prices. Mike Haag, president of the Illinois Pork Producers Association, is concerned about corn usage trends and the effect ethanol policy could have on the corn supply and feed availability. U.S. ending stocks of corn (675 million bushels) currently are at the lowest level since 1995/96. “We (pork producers) like ethanol but are concerned about

the priorities being set about how we use feed grain in this country,” Haag told FarmWeek at the Illinois Pork Expo in Peoria. “Even at a time of recordhigh (hog) futures prices, we’re faced with the possibility of a break-even scenario” due to record-high feed prices. Illinois Corn Growers Association Technology and Business Development Director Dave Loos said he harbors “a lot of optimism” regarding the 2011 corn crop. Citing favorable conditions heading into spring planting, he anticipates potential for “record yields and productivity.” “If we can get back to normal on yield trends and have a fairly early harvest, I think the industry will right itself pretty fast,” Loos said. — Martin Ross and Daniel Grant

Defining ‘rural’ seen as defining issue What’s in a label? To rural communities and producers within the urban-suburban shadows, it can mean the federal funding or programs crucial to future economic viability. House Ag Rural Development Subcommittee Chairman Tim Johnson, an Urbana Republican, led a hearing last week focusing on various definitions of “rural” applied under USDA programs. The 2008 farm bill mandated changes in definitions aimed at ensuring funds aren’t directed toward urban areas. USDA has not yet completed a farm bill-directed report on those definitions, and Johnson said lawmakers would help the department ensure funds are used “in the most effective way.” Illinois Institute for Rural Affairs (IIRA) Assistant Director Timothy Collins sees agriculture remaining a key rural component. But economic, infrastructure, and transportation development are “interconnected” in helping provide off-farm or value-added income opportunities for farm and rural residents amid tight federal dollars, Collins said. Illinois has become more urbanized: 26 of 102 counties were designated as “metropolitan” in 1980; 36 currently are so identified. In a 2005 report about changing U.S. Census definitions, IIRA expressed concerns about potential impacts

for new metro or urbanized “micropolitan” counties. USDA state officials report little change in dollars for those counties — several have received business and community project loans and grants since 2005. “The importance of these definitions, though, works out in two or three different ways,” Collins told FarmWeek. “In counties on that urbanrural fringe, it can be problematic in terms of their ability to get federal funds. They’re rural in character, but they’re urbanizing. There are more demands on their services, but they don’t have the local resources yet to deal with some of those demands. “And we have pretty good diversity in our rural areas, both in terms of landform and, as you get into the southern

region, the amount of coal mined and increased forestry. “That suggests that for federal programs to be effective, these definitions are important to help target types of programs that might be delivered in these types of areas.” Those complexities translate to varying conservation needs as well as a changing view of what constitutes “rural development.” Biofuels and other processing facilities that tap ag output are locating both in rural communities and on the urban fringe. Local food and agritourism have proliferated within the suburban landscape. Flexibility in development programs can foster urban markets for rural goods, with revenues “flowing back” to rural Illinois, Collins said. — Martin Ross

President Continued from page 1 tion groups, and it was a five-year commitment. Congress needs to stand by that commitment.” Illinois Farm Bureau Farm Policy Task Force Chairman Darryl Brinkmann noted efforts to preserve the existing ag budget baseline in the next farm bill. Changes of the kind proposed by Obama not only could set program direction prior to farm bill debate but also erode the spending baseline, he warned. Because of the relative positive price situation of the last several years, “there’s not a lot of baseline in (price-based) countercyclical payments to begin with.” Brinkmann stressed “people have been making plans for the next couple of years based on the farm bill.” From planning and financial standpoints, premature cuts “could be very harmful,” he said.

Page 5 Monday, February 21, 2011 FarmWeek

LIVESTOCK

New IPPA president wants to maintain ‘social license’ BY DANIEL GRANT FarmWeek

The issue of record-high feed prices created quite a buzz last week at the Illinois Pork Expo in Peoria. But Mike Haag, newly elected president of the Illinois Pork Producers Association (IPPA), believes there is a greater threat to the long-term viability of the pork industry in the state. “I believe we’re in a time in which a lot of our future could be dictated by legislation and regulations,” said Haag, who manages a 1,200-sow, farrow-tofinish operation with his brother-in-law (Jeff Stark) and father (Dewaine) in Livingston County.

“We need to do what we can to minimize the impact (of potential legislation/regulations) so we can continue to operate and remain economically viable,” he said. Seven states in recent years passed legislation, promoted by animal welfare groups, to phase out the use of gestation crates. Meanwhile, other proposed regulations/legislation could limit livestock producers’ ability to treat animals with antibiotics, limit producers’ ability to earn premiums through specialty contracts, and require producers to acquire dust permits to operate. Haag, in response, urged pork producers to tell their story to lawmakers and consumers

and to continue to engage in practices and programs that demonstrate social responsibility. “We’re really good as producers at Mike Haag watching our feed costs, maintaining the health of our animals, locking in a profit, and increasing demand,” Haag said. “But I have a sincere concern that, if we’re not careful and vigilant, we could lose our social license to stay in business.” Haag, who has been an IPPA member since 1986,

encouraged producers to take part in the We Care Responsible Pork Initiative, a program designed to demonstrate producers are accountable to established ethical principles and animal well-being practices. “We Care not only is a symbol and reminder of what we do every day, it provides an opportunity to explain to others what we do for consumers,” said Haag, who with his wife, Trisha, has three children (Kaleb, Brooke, and Kacie). “We hold ourselves accountable for taking care of our animals and maintaining a safe, high-quality pork supply.” Illinois pork producers apparently had success in

recent years despite profitability issues. The inventory of hog and pigs in Illinois (4.3 million head) in December was up 1 percent compared a national trend that was down 1 percent. Haag also encouraged producers to participate in the Pork Power program, particularly in light of rising food production costs and higher food prices. Pork Power, which is a partnership of IPPA, the Illinois Corn Marketing Board, and the Illinois Soybean Association, since it was launched in 2008 has collected more than 200,000 pounds of donated pork that was used to provide more than 800,000 meals to needy families in the state.

Analyst: Hog market has more upside potential If demand for pork this year is anything like it was last week at the Illinois Pork Expo, it should be a good year for hog producers. Concessionaires at the expo, billed as the largest pork-specific trade show in Illinois, were unable to cook pork chops fast enough to keep up with strong lunch-hour demand. Some expo participants, as a result, were forced to form long

lines and wait until fresh supplies of pork chops were available. The situation last week in Peoria could be a microcosm of what occurs this year around the world as strong demand is expected to test a tight supply of hogs. “The total number of hogs will be down this year, which has been supportive and kept a floor under hog prices,” said Tomm Pfitzenmaier, market

Fine-tune feed costs Higher feed costs are expected to eat up a good portion of profit potential this year on many livestock operations. There are strategies, however, that livestock producers can implement to reduce the impact of historically high grain prices. Rommel Sulabo, a researcher in the department of animal sciences at the University of Illinois, addressed the subject last week at the Illinois Pork Expo in Peoria and offered tips to reduce feed costs. “Feed costs account for 70 to 80 percent of the cost of production so, obviously, it’s one of the major concerns right now (on livestock operations),” Sulabo said. But with such a large amount of input costs tied up in feed, it makes improved feed efficiency the best way for livestock farmers to improve their bottom lines. Sulabo reported that for every tenth-of-a-pound improvement in feed gain, profits increase by about $3 per pig. So what can farmers do to improve feed efficiency and lower their costs? “Start with what you can control,” Sulabo said. Livestock producers should check all feeders and delivery systems for leaks and adjust them routinely to reduce feed waste. They should check the particle size of feed: Sulabo recommended an optimal size for hogs between 600 and 800 microns. “Reducing the size improves nutrient digestibility,” he said. Other steps include the following: • Incorporate distillers grains into the diet. With the current price of corn and soybean meal, the cost of swine diets is reduced by $7 to $9 per ton for each 10 percent of distillers grains added to the ration. • Use small grains when available. Other feed grains, such as wheat, sorghum, barley, and oats offer a similar nutrient value as corn and possibly could be included in rations to displace corn when the economics of such a move are favorable. • Consider using other co-products. In some areas, co-products such as hominy feed, bakery meal, or wheat middlings are available to swine producers. If they can be purchased at a price that is about 90 percent of corn or less, the move can reduce overall feed costs. • Use fish meal substitutes. Nursery rations have increased as the cost of fish meal escalates. Products such as fermented soybean meal and enzyme-treated soy meal can be used to replace the more expensive fish meal for weanlings. • Eliminate inorganic phosphorus. The need for inorganic phosphorus can be reduced or eliminated by including phytase and distillers grains in swine diets. — Daniel Grant

analyst with Summit Commodity Brokerage in Des Moines, who was a featured speaker at the Pork Expo. The inventory of hogs and pigs in the U.S. (64.3 million head) as of December was down 1 percent compared to a year ago. Elsewhere, South Korean farmers reportedly culled as much as 30 percent of their swine herd due to an outbreak of foot-and-mouth disease. Tighter hog supplies come at a time when the world economy and meat demand are improving, according to Pfitzenmaier. The amount of

U.S. pork exports shipped last year increased by 3 percent compared to 2009. “June hogs recently got to $103 (per hundredweight), and it looks like they have more upside potential,” the analyst said. Pfitzenmaier predicted hog futures in coming months could increase by another $10 to $15 per hundredweight. However, the long-term direction of the hog market will depend on whether consumers keep buying meat at higher prices and if hog producers are able to expand despite record-high feed prices,

according to the analyst. “Retailers absorbed a lot of the price increases the last half of 2010, but at some point (retail meat prices) will bust open,” he said. “Then we’ll see if we can sell the meat.” Pfitzenmaier doesn’t look for a major boost in hog production this year, despite strong prices and demand, due to record-high feed costs and historically low grain stocks. “I’m not sure how producers will respond to higher (hog) prices,” he added. “Will they take the additional risk?” — Daniel Grant

FarmWeek Page 6 Monday, February 21, 2011

TECHNOLOGY

High tunnels extend season for Adams County farmer BY KAY SHIPMAN FarmWeek

Cory Crawford harvests some of the earliest and the latest farm-grown tomatoes in Adams County, thanks to his high tunnels. Crawford, who farms near Ursa in Adams County, farms with four high tunnels, also

known as hoop houses. He discussed high tunnel production at a recent University of Illinois Extension small acreage workshop. Adding several weeks to the start and the end of the growing season is a major benefit of using high tunnels, Crawford told FarmWeek.

Farmers stroll through a Southern Illinois high tunnel used for specialty crop production. The Natural Resources Conservation Service (NRCS) is studying high tunnels for specialty crop production in Illinois and 37 other states. (Photo courtesy Illinois NRCS)

His first tomatoes are ripe by mid-June and the growing season continues to midNovember in his unheated buildings. In his structures, Crawford raises strawberries, peppers, green beans, onions, lettuce, cucumbers, turnips, and peas. He also farms eight acres of specialty crops. In addition to extending the growing season, high tunnels also help reduce problems of pests and disease, Crawford said. Monitoring humidity levels within the tunnel is important to eliminate problems from bacterial diseases, he added. Crawford has encountered one major drawback — a lack of water. “I have to haul all my water,” Crawford said. He advised any grower interested in high tunnel production to consider a water source for the tunnel location. Potential damage from high winds is another consideration for tunnel locations, Crawford noted. A nearby timber provides some protection to his structures. And, Crawford has-

n’t experienced any hail or snow damage to his structures, which are covered with 6-millimeter plastic. The tunnels measure 30-by96 feet and 26-by-96 feet. Crawford assembled them

from kits with the help of family and friends. Read more about Crawford and his farm online at {http://web.extension.illinois. edu/adamsbrown/reports/i16 4/c431.html}.

Ethanol-friendly corn trait granted approval BY MARTIN ROSS FarmWeek

USDA has approved commercial production of GMO corn tailored to boost per-bushel ethanol production while reducing its environmental footprint. The National Corn Growers Association hailed federal approval for Enogen, Syngenta’s corn amylase technology, which incorporates into the plant itself enzymes that break down corn starch for fuel production. Syngenta plans limited 2011 production, within a secure, “closed” system designed to prevent what the North American Millers’ Association termed “significant adverse impacts on food product quality and performance” that could result from Enogen grain mingling with other corn. A few western Corn Belt millers are expected to use the product this year. Syngenta head of technology acceptance Jack Bernens told FarmWeek the new product exceeds the “baseline” performance of liquid amylase now added to corn to speed transformation of starch to sugars that can be converted into fuel alcohol. Citing rising ethanol input costs, Bernens said amylase corn use could save 8-10 cents per gallon of ethanol produced, largely by reducing water and energy used in biofuels processing. That could mean $10 million in annual savings for a 100-million-gallon-per-year plant, “which hopefully would translate into a benefit for the grower,” said Illinois Corn Growers Association (ICGA) Technology and Business Development Director Dave Loos. By reducing the amount of resources needed, amylase corn use can lessen ethanol’s carbon “footprint” by 10 percent, Bernens said. That’s potentially key to market growth: The federal renewable fuels standard sets a mere 15-billion-gallon-peryear target for corn ethanol use by 2022 but offers added leeway for “advanced biofuels” that offer carbon reductions. Where many specialty corn products carry a yield drag, Bernens reported no difference in yields between Enogen and “elite” varieties. “This is different than an input trait — the ramp-up of this (product) will be a fair amount slower,” he nonetheless advised prospective growers. “You need to grow the amylase; you need to test it in an ethanol facility. Then, (the plant) would contract with its grower base the following year. It takes a couple of years to get a plant on line.” The U.S. Food and Drug Administration deemed amylaseenhanced corn as being as safe as conventional corn for food or feed, whether fed directly or as distillers dried grains (DDGs) produced in the process of making ethanol. Because processors don’t need to add sulfuric acid to balance pH as they do using supplemental enzymes, Bernens said DDG sulfur content, which can impede ruminant copper absorption and metabolism and feed palatability, is significantly lower with the GMO corn. Commingling of Enogen with other varieties can cause problems with starch quality in some industrial corn uses. Syngenta has developed a plan to manage Enogen harvest, storage, and delivery from the farm to designated plants to avoid nonintended uses. Contract producers are not to grow amylase corn within the “draw area” of food or industrial starch plants, and Syngenta plans an advisory council to keep millers abreast of “stewardship” efforts. “I think this can work in (individual) locations,” ICGA’s Loos told FarmWeek. “It’s going to take a closer relationship between the grower and the plant, and its going to take the plant being able to manage the flows properly. “They have to have the right balance of amylase corn coming in with other corn. The critical thing in an ethanol plant is the consistency of the products, especially the DDGs, and the consistency of the process.”

Page 7 Monday, February 21, 2011 FarmWeek

PRODUCTION

keep pressure on cattle prices U of I joins climate study Strong demand could And the high price levels during the second half of 2011. are expected to continue, the big picture, we’re on corn cropping systems The current bull run in the despite a larger inventory and very“Inbullish on prices the secBY DANIEL GRANT FarmWeek

USDA’s National Institute of Food and Agriculture (USDA-NIFA) awarded $20 million to nine land-grant universities, including the University of Illinois, and two USDA Agricultural Research Service institutions for a climate study on corn production. The grant was announced last week in Washington, D.C. The U of I’s research efforts will be led by crop science faculty members Emerson Nafziger and Maria Villamil. They will lead the U of I’s work to collect and analyze data over the next five years. Iowa State University will be the overall project leader. “The grant takes a synergistic approach to understanding the effects of climate variability and impacts on the sustainability of corn-based cropping systems throughout the Midwest,” said Lois Wright Morton, an Iowa State sociology professor. This spring, researchers will begin collecting data on carbon, nitrogen, and water movement from 21 sites in eight states. The teams will use field and climate data to create computer models and evaluate crop management practices. Nafziger said the research builds on work he and others have done for several years, looking at the effects of crop rotation, tillage, and other factors on yields. “With this funding, we will be able to measure some things that we couldn’t measure before,” Nafziger said. “Our hope is that sound management can be shown to benefit soils, corn yields, and the environment.” “The goal is to create a database of plot, field, farm, and watershed data that can be combined with climate data to develop scenarios based on different practices,” Iowa State’s Morton said. She said farmers in the region would have opportunities to participate in on-farm research and evaluate research models. The long-term national outcome is to reduce the use of energy, nitrogen, and water by 10 percent and to increase carbon sequestration by 15 percent through agriculture and forest systems. In addition to the U of I and Iowa State, the seven other universities are: The Ohio State University, University of Wisconsin, Purdue University, University of Missouri, Michigan State University, University of Minnesota, and South Dakota State University. The two USDA ARS centers are in Coshocton, Ohio, and Columbus, Ohio.

cattle market likely will continue, as USDA’s cattle on feed report released Friday was very close to trade expectations.

FarmWeekNow.com Go to FarmWeekNow.com for details on the cattle on feed report.

Cattle and calves on feed in the U.S. totaled 11.57 million head as of Feb. 1, up 6 percent from last year, USDA reported. Meanwhile, placements in feedlots in January totaled 1.89 million head, up 4 percent from last year. Marketings of fed cattle (1.78 million head) were flat compared to a year ago. “Cash cattle prices have maybe two to three weeks left in this very exciting bull rally,” said Rich Nelson, director of research at Allendale, Inc. in McHenry. “But we do look for a dip into the second quarter.” Cattle prices late last week hovered around $108 per hundredweight.

higher placements, due to demand growth. “We’re looking at higher slaughter numbers from now until the end of summer,” Nelson said. “But we’re doing such a great job with exports that it’s taking care of all the extra slaughter.” The volume of U.S. beef exports in 2010 increased by 19 percent worldwide, and the value of those shipments totaled a record-high $4.08 billion, the U.S. Meat Export Federation reported. Meanwhile, Nelson predicted domestic demand for beef and other meats actually could increase this year despite higher retail prices. “The U.S. consumer (as the economy improves) wants more meat,” Nelson said. “That should offset higher prices.” There is some concern June cattle futures, which last week approached $120 per hundredweight, could be overvalued, according to Nelson. But he believes there could be more fireworks in the cattle market

ond half of the year,” Nelson said. “Placements should start tailing off,” which could strain supplies. USDA last week also released inventory reports of all cattle and calves in the U.S. (92.6 million head, down 1 percent) and in the U.S. and Canada combined (105 million head, down 2 percent) that appeared to be price-friendly.

FarmWeek Page 8 Monday, February 21, 2011

YOUTH IN ACTION

Southern Illinois county Farm Bureaus host 100s of FFA members Hundreds of FFA members representing about 30 FFA chapters recently learned about Farm Bureau and related topics during an event hosted by several county Farm Bu-

reaus from Southern Illinois in conjunction with Southern Illinois University’s (SIU) College of Agricultural Sciences. The FFA Acquaintance Day was held in the SIU Student

DATEBOOK Feb.22 Regional agroterrorism workshop, 8:30 a.m. to 3 p.m., Carlyle Mariner’s Village, Carlyle. Register online at {www.Illinoisworkshop.org}. Feb. 23 Regional agroterrorism workshop, 8:30 a.m. to 3 p.m., Pike County Farm Bureau Building, Pittsfield. Register online at {www.Illinoisworkshop.org}. Feb. 23-24 Illinois Farm Bureau governmental affairs leadership conference, Crowne Plaza, Springfield. March 4-6 Illinois Horse Fair, Illinois State Fairgrounds, Springfield. For information, go online to {www.HorsemensCouncil.org} March 5 Sustainable farmer network, 6 to 9 p.m., 220 New American Bistro, Bloomington. March 9 Illinois Agricultural Legislative Day, Springfield. March 9-10 Rural Community Economic Development Conference, Holiday City Centre, Peoria. For information, go online to {www.iira.org}. March 10 Livestock manager certification workshop, 8:15 a.m., Sangamon-Menard Extension office, Illinois State Fairgrounds. March 11-12 ExplorACES, University of Illinois College of Agricultural, Consumer, and Environmental Sciences, Urbana. Go online to {http://aces.illinois.edu/ExplorACES}.

Center in Carbondale. FFA members had an opportunity to participate in several educational workshops. Topics ranged from Agriculture in the Classroom materials to information about Farm Bureau and agricultural careers. After the workshops, students heard Illinois Farm Bureau President Philip Nelson describe his FFA career and provide his view of the future of the agriculture industry. For participating in the event, each of the FFA chapters is eligible to send a representative to the 2011 Illinois Farm Bureau & Affiliates Youth Conference April 4-5 in the Crowne Plaza, Springfield.

Students make paper-bag horses used as Agriculture in the Classroom (AITC) teaching tools. FFA members worked with AITC coordinators from across Southern Illinois during a workshop session on ideas for high school students to use in teaching younger students. (Photo by Bradley Conant, manager of Washington and Perry County Farm Bureaus)

Applications available for Youth Conservation Congress The Illinois Department of Natural Resources (IDNR) is accepting online applications for the second annual Youth Conservation Congress, which will be May 15 at the Brookfield Zoo, Brookfield. Participation will be awarded to conservation-related school and youth groups in the state. Students must be enrolled in an Illinois high school during the 2010-2011

school year to be eligible. Each organization may register a maximum of two group leaders and five students.Students and leaders will have an opportunity to showcase their achievements as well as learn about many youth-related conservation activities.

Applicants will be notified of acceptance by April 1. A 500-word paper outlining the group’s conservation achievements is required. To apply, go online to {www.dnr.state.il.us/nrab/ycc .htm}. For more information, contact the IDNR education division at 217-524-4126.

SIU’s King to lead Horsemen’s Council Sheryl King, director of Southern Illinois University’s (SIU) equine science program, recently was elected president of the Horsemen’s Council of Illinois (HCI). Other Sheryl King newly elected officers were Karen Freese, Hammond, co-owner and operator of Lamplight Farm and Stables, vice president, and Dr. Joe Lowry, a Davis

Junction veterinarian, secretary-treasurer. Immediate past president Frank Bowman, Pleasant Plains, will remain on the HCI board and was appointed to serve as the organization’s first executive director. King first joined SIU as an equine specialist in 1983. She now directs the state’s only four-year equine science program. She also conducts research in the areas of equine reproduction and general horse management and welfare.

Page 9 Monday, February 21, 2011 FarmWeek

FROM THE COUNTIES

DAMS — A Viewpoint meeting will be at 7:30 a.m. Friday at the Lamp Lighter, Payson. State Rep. Jil Tracy (R-Mt. Sterling) will be the speaker. Call the Farm Bureau office at 2227305 for reservations or more information. • Food Check-Out Day will be from 10:30 a.m. to 1 p.m. Tuesday at the HyVee Grocery, 36th & Broadway. Reusable grocery bags will be given out during the promotion. UREAU — An agribusiness seminar will be at 9:30 a.m. Friday at Wise Guys, Princeton. David Kohl, Virginia Tech professor emeritus of agricultural finance and small business management, and a representative from EHedger will be the speakers. Cost is $20. Call the Farm Bureau office at 815-875-6468 for reservations or more information. • Farm Bureau will sponsor an informational meeting on a Hawaii trip at 7 p.m. Wednesday, March 2, at the Farm Bureau office. The trip will be Jan. 8-17. A Tri-State director will discuss the itinerary. HAMPAIGN — Viewpoint meetings will be at 11:30 a.m. Tuesday at the Philo Tavern, Philo, and at 7:30 a.m. Tuesday, March 1, at the Market Street Eatery, Sadorus. Breakfast will be served. Call the Farm Bureau office for more information. EWITT — A Women’s Health Day will be from 9:30 a.m. to 1:30 p.m. Saturday, March 5, at Warner Library, Clinton. Cost is $5, which includes lunch. Call the Farm Bureau office at 217-935-2126 by Friday for reservations or more information. FFINGHAM — The Commodities and Marketing Action Team will sponsor a workshop on options and futures at 7 p.m. Monday, Feb. 28, at the Farm Bureau office. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Call the Farm Bureau office at 217-3422103 or e-mail ecfbmgr@consolidated.net for reservations or more information. • The Local Affairs Action Team will sponsor an on-the-road seminar at 7 p.m. Wednesday, March 2, at the Farm Bureau office. State Police Trooper Steve Tarter will discuss truck weight limits, medical card changes, and comprehensive safety analysis. Call the Farm Bureau office at 217-342-2103 or e-mail ecfbmrg@consolidated.net for reservations or more information. • Farm Bureau and Country Financial representatives will sponsor a farm estate and transfer planning seminar at 6 p.m. Tuesday, March 8, at the Farm Bureau office. James Hughes, Country Financial security consultant, will be the speaker. Dinner will be served. Call the Farm Bureau office at 217-342-2103 or your Country Financial insurance representative by Monday, Feb. 28, for reservations or more information. • The annual meeting will be at 6:15 p.m. Monday, March 14, at the Teutopolis Knights of Columbus building. A pork barbeque and chicken dinner will be served. Cost is $3. Call the Farm Bureau office at 217-342-2103 by Friday,

March 4, for reservations or more information. ULTON — The Women’s Committee will conduct the annual “I Shopped the Sheriff ” grocery cart race at 10 a.m. Wednesday at the Lewistown County Market as part of Food Check-Out Week. Sheriff Jeff Standard and Coroner Steve Hines will participate in the race. All food collected will be donated to the Lewistown Association of Churches Food Pantry. • Farm Bureau and the University of Illinois Extension will sponsor an agronomy and outlook meeting at 8:30 a.m. Friday at the Farm Bureau office. Terry Niblack, University of Illinois Extension; Tom Williams, Western Illinois University geology department; and Matt Montgomery, University of Illinois Extension, will be the speakers. Cost is $8, which includes a rib-eye sandwich meal. Call the Farm Bureau office at 309-547-3011 for more information. • Farm Bureau will conduct a “Load a Wagon” food drive from 11 a.m. to 2 p.m. Saturday at the Canton HyVee. All items will be given to the Canton Food Pantry. ANCOCK — Farm Bureau will sponsor a meeting with U.S. Rep. Bobby Schilling (R-Moline) and U.S. Sen. Mark Kirk (R-Highland Park) at 9:15 a.m. Saturday at the Spoon River College, Macomb. Call the Farm Bureau office for more information. • Memorial Hospital will sponsor a hospital/Ag Committee meeting at 6:30 p.m. Wednesday, March 2, at the hospital in Carthage. Call the Farm Bureau office for more information. ENRY — Henry, Knox, and Stark County Farm Bureaus will sponsor a program, “Learn to Market Like Your Paycheck Depends on It” from 6:30 to 8:30 p.m. Thursday in the Conference Center at Black Hawk College, East Campus. Cathy Ekstrand, Stewart-Peterson senior market adviser, will be the speaker. The program is geared toward farm couples. Call the Farm Bureau office at 309-937-2411 for reservations or more information. • The Henry County Farm Bureau Foundation has four $1,000 scholarships and the Farm Bureau has five $2,000 Wilbert & Carol Keppy Foundation scholarships available. Applications are available from high school guidance counselors, agriculture instructors, and the Farm Bureau office at the website {www.henrycofarmbureau.org} or e-mail kbhcfb@theinter.com. Call the Farm Bureau office at 309-9372411 for more information. • Henry and Rock Island County Farm Bureaus will sponsor a market outlook meeting at 6:15 p.m. Thursday, March 10, at St. Paul Lutheran Church, Orion. Mike McClellan, Mobile Weather Team, and Mike Schaver, Gold Star FS grain merchandiser, will be the speakers. Dinner will be served. Cost is $18, unless the series was prepaid. Call the Farm Bureau office at 309-937-2411 for reservations or more information. EE — Applications for the Bureau, Lee, and Whiteside Summer Ag Institute are on the Farm Bureau website

{www.leecfb.org}. Teachers may apply by April 29. Cost is $80 for Farm Bureau members and $100 for non-members. Call the Farm Bureau office for more information. • Lee County Extension will sponsor a test session for those who need to renew their private pesticide applicator’s license. The session will be from 10 a.m. to noon Tuesday, March 1, at the Loveland Community Building, Dixon. There is no charge for the program. Call the Lee County Extension at 815-857-3525 for reservations or more information. • Members should have received their dues notices. Return to the Farm Bureau office by March 1. If you did not receive your notice, call the Farm Bureau office at 857-3531. • Applications for the Bureau, Lee, and Whiteside County Summer Ag Institute are available at the website {www.leecfb.org}. The dates are June 13-17. Cost is $80 for Farm Bureau members and $100 for non-members. Deadline to return applications is April 29. IVINGSTON — The Women’s Committee will sponsor a WJEZ radio quiz daily for $40 worth of groceries as part of Food Check-Out Week. The Young Leader’s Committee will sponsor a shopping cart race Friday at Dave’s Super Market, Fairbury. Mark Heil, Prairie Central Co-Op general manager, and Matt Jacobs, Graymont Co-op general manager, will participate in the race. Items collected during the race will be donated to local food pantries. ACOUPIN — A spring Outlook meeting will be at 6 p.m. Tuesday, March 1, at the Farm Bureau office. Dinner will be served. Steve Jones, M & M Service Co. grain division manager; and Rita Frazer, WSMI ag director, will be the speakers. There is no charge for members. Cost for non-members is $10. Call the Farm Bureau office at 217-854-2571 by Tuesday for reservations or more information. • The Macoupin County Agriculture Education Foundation has scholarships available for students who will continue their education in an ag-related field. Deadline to return applications is March 25. Call the Farm Bureau office at 217-854-2571 for an application or more information. ONROE — The annual meeting will be at 6 p.m. Saturday at St. Mary’s Parish Center, Valmeyer. A silent auction will be held. The Valmeyer High School Chorus will provide the entertainment. Cost is $9. • An on-the-road seminar will be at 10 a.m. Tuesday, March 1, at Gateway FS facility in Red Bud. Kevin Rund, Illinois Farm Bureau local government director, and a member of the Illinois State Police will provide updates on truck inspections, weight limits, and county roads. Call the Farm Bureau office at 939-6197 or 4434511 by Friday for reservations or more information. ONTGOMERY — Montgomery County Farm Bureau Foundation will award six $1,500 scholarships to students who will pursue an agricultural-related field of study.

Deadline to return applications is March 15. To qualify, a student’s parents or the student must be a Farm Bureau member. Applications are available at the website {www.montgomerycountyfb.com}. • The Young Leaders will sponsor a bus trip Saturday to the Professional Bull Riders, Scottrade Center, St. Louis. Tickets are $45.50. Call the Farm Bureau office at 532-6171 for reservations. Tickets must be paid for by Friday. EORIA — A Food CheckOut Day activity will be held at 10 a.m. Tuesday at Kroger’s, Sterling Avenue, Peoria. A spin-the-wheel game will be played for Kroger gift cards, reusable grocery bags, and farm DVDs. • A market seminar will be at 8 a.m. Tuesday, March 1, at Exposition Gardens, Peoria. John Roach, Roach Ag Marketing, will be the speaker. Call the Farm Bureau office at 686-7070 for reservations or more information. ANDOLPH — An onthe-road seminar will be at 10 a.m. Tuesday, March 1, at the Gateway FS facility in Red Bud. Kevin Rund, Illinois Farm Bureau local government director, and a member of the Illinois State Police will provide updates on truck inspections, weight limits, and county roads. Call the Farm Bureau office at 939-6197 or 4434511 by Friday for reservations or more information. CHUYLER — Farm Bureau will participate in Food Check-Out Day from 10 a.m. to 2 p.m. Friday at the Rushville County Market. Recyclable grocery bags will be given away while supplies last and drawings will be held for six $20 gift certificates. Food donations for the Schuyler County Food Basket will be accepted. TARK — Henry, Knox, and Stark County Farm Bureaus will sponsor a program, “Learn to Market Like Your Paycheck Depends on It” from 6:30 to 8:30 p.m. Thursday in the Conference Center at Black Hawk College, East Campus. Cathy

Ekstrand, Stewart-Peterson senior market adviser, will be the speaker. The program is geared toward farm couples. Call the Farm Bureau office at 309-286-7481 for reservations or more information. • Farm Bureau and the State Bank of Toulon will sponsor an ag outlook breakfast meeting at 8 a.m. Friday at the Bistro, Toulon. Larry Acker, 3F Forecasts, and Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speakers. Call the Farm Bureau office at 309-286-7481 for reservations or more information. • Stop by Ron’s Super Value, Wyoming, or the Toulon Market to pick up a Food Check-Out Week recipe booklet, which is sponsored by the Marketing Committee. ERMILION — Farm Bureau will celebrate Food Check-Out Week by asking everyone to donate to local food pantries. Collection carts will be stationed at the checkouts at both Danville County Markets and the Farm Bureau office. Farm Bureau members will bag groceries and meet consumers from 10 a.m. to noon Friday at County Markets. • The Legislative and Local Affairs Committee will sponsor a “What’s Going on in Illinois Government” discussion and Viewpoint meeting at 9:30 a.m. Monday, March 7, at the Farm Bureau auditorium. Panelists will include Chuck Hartke, former Illinois director of agriculture; Bill Black, retired state legislator; and Kevin Semlow, Illinois Farm Bureau director of state legislation. Call the Farm Bureau office for more information. • Farm Bureau will sponsor a marketing specialty crops workshop at 1:30 p.m. Tuesday, March 8, at the Farm Bureau auditorium. Cynthia Haskins, Illinois Farm Bureau manager of business development, will discuss grants and funds available to specialty growers and how to market their crops. Call the Farm Bureau office for more information.

FarmWeek Page 10 Monday, February 21, 2011

PROFITABILITY

Window closing fast on tending to spring energy needs BY BRIAN HARTMAN

It appears that the window of opportunity is closing fast to fill your energy inventory for spring and make any forward contract purchases. The lows for gasoline and diesel Brian Hartman typically occur by the first part of February but if you have something done by the end of February, you are still in good shape. After that, the markets start anticipating the demand of the summer driving season. Egypt is the “wild card” currently creating much uneasiness in the energy markets. To date, there have been no major supply disruptions, but there is a real possibility that one may occur. Five percent of global oil production passes through the Suez Canal and the SuezMediterranean pipeline. The big question is whether the violence and civil unrest will spill over to more countries like it has in Tunisia, Jordan, and Yemen. Until Egypt settles down, the region will remain a tinderbox, and as a result, the oil markets most likely will trade

higher. Now that Hosni Mubarak has resigned, the country could plunge into chaos with no organized leadership. Saudi Arabia is rumored to be pushing for an increase of oil output at the OPEC (Organization of Petroleum Exporting Countries) consumer meeting, with the intentions to put a cap on this rally. Some suspect that the Saudis already are pumping more oil into the markets.

BY DANIEL GRANT FarmWeek

U.S. meat exports posted a dramatic turnaround in 2010 as total beef shipments increased 19 percent while pork shipments grew by 3 percent compared to 2009. In fact, the value of U.S. beef exports last year ($4.08 billion) broke the previous record of $3.86 billion set in 2003, prior to the discovery of BSE in the U.S. “We knew the groundwork was in place for an Phil Seng excellent recovery in 2010,” said Philip Seng, president of the U.S. Meat Export Federation

Feeder pig prices reported to USDA* Weight 10 lbs. 40 lbs. 50 lbs. Receipts

Range Per Head Weighted Ave. Price $33.00-61.00 $45.87 $77.98-79.50 $78.77 n/a n/a This Week Last Week 24,563 31,716 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) (Prices $ per hundredweight) This week Prev. week $79.06 $82.19 $58.50 $60.82

Change -3.13 -2.32

USDA five-state area slaughter cattle price Steers Heifers

This week n/a n/a

the world. Its needs for energy are projected to grow through 2020. China imports between 30 and 60 percent of its oil. It has increasingly been dependent on Middle Eastern oil, and this thirst most likely will keep prices on the rise. John Hofmeister, the former president of Shell, certainly gained a lot of attention in December when he said Americans could be paying $5 a gallon for gas.

The media accidentally forgot to report the timeframe for what John stated, but most do not think that prices will be going to $5 this year or even next. However, that price is a possibility over the next five to 10 years as world demand grows. Brian Hartman is GROWMARK’s energy analyst. His email address is bhartman@growmark.com.

U.S. meat exports projected to continue climb

M A R K E T FA C T S

Carcass Live

I personally believe that geo-political tensions will trump any fundamentals in the energy markets. Additionally, China is looking to fill its new oil reserves and could gobble up any excesses. The Chinese government’s energy policies are dominated by its growing demand for crude oil, and it relies heavily on oil imports. With 1.3 billion people and double-digit growth, China is one of the fastest growing economies in

(Thursday’s price) Prv. week Change $105.30 n/a $105.50 n/a

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 126.52 2.26

This week 128.78

Lamb prices n/a

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 2-10-11 33.8 24.2 26.1 2-03-11 44.0 30.5 29.2 Last year 39.0 16.3 25.0 Season total 1055.6 810.1 736.7 Previous season total 1029.0 584.6 729.8 USDA projected total 1590 1300 1950 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

(USMEF). “But even the most optimistic forecasts underestimated the degree to which our beef exports would bounce back.” Beef exports last year to South Korea and Russia doubled compared to 2009 while exports to Hong Kong and Taiwan set new value records of $158 million and $216 million, respectively. U.S. beef exports also set new records in the Caribbean and Central-South America regions, USMEF reported. Meanwhile, exports of U.S. pork last year set new records in Australia, Japan, the Central-South America region, and the Caribbean. Meat exports picked up last year as economies improved around the world and the value of the U.S. dollar remained weak compared to other currencies. The weaker dollar made U.S. meat a good value in the world market, according to Ron Plain, ag economist at the University of Missouri. And the momentum of American meat exports should continue this year, despite the probability of tighter supplies and higher prices, Plain told FarmWeek. “We’re fairly optimistic about pork and beef

exports in 2011,” he said. A major buyer could be South Korea, which last year bought 26 percent of its pork imports and 32 percent of its beef imports from the U.S. “With foot-and-mouth disease problems, the (South Korean) swine herd is down about 30 percent,” Plain said. “There’s real potential they (South Korea) will buy a lot of pork this year.” Estimates suggest South Korea this year could increase its pork imports by

20 to 30 percent. However, strong world demand for U.S. meat will present some challenges in the states. “There’s no question U.S. consumers will see higher prices in the meat case,” Plain said. USDA recently predicted U.S. retail prices this year will increase 2.5 to 3.5 percent for beef and from 3.5 to 4.5 percent for pork. Futures prices recently were near $1.10 per pound Ron Plain for cattle and $1 per pound for hog carcasses. “We’re looking at probably record prices for cattle and hogs this year,” Plain said. “But, we’re looking at record-high feed costs, so it’s going to take record livestock prices to keep hog and cattle producers in the black.” The future direction of feed prices will be highly dependent on the quantity and quality of 2011 crop production, Plain added.

FarmWeek Page 11 Monday, February 21, 2011

PROFITABILITY Corn Strategy

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

Cents per bu.

2010 crop: The recent break in corn looks like a correction, but corn also is fighting what looks to be an increasingly negative short-term picture in the other two grains. While the market has yet to show a sign of a top, one has to remain mindful of the impact the 40-week low due in late March might have. At these prices, we’d recommend you hold only “gambling bushels.” If you are holding more, use rallies to make sales. Hedge-to-arrive (HTA) contracts for winter/spring delivery are still the best tool. 2011 crop: New-crop sales should stand at 30 percent complete. Even though a top still is not apparent, December futures are trading in a range with major price targets. Fundamentals: With the USDA Outlook Forum on Thursday and Friday, the focus may shift to potential new-crop fundamentals. The 92 million acres projected on the baseline forecast got the attention of the trade. If weather would be reasonably good, that’s high enough to potentially build a more comfortable fundamental structure.

Soybean Strategy

Investment money exiting grains Since late fall, the holdings of “outside” investment money what The Commodity Futures Trading Commission (CFTC) swaps have been declining. The

Basis charts

group that holds positions for long-term gains has been exiting the market. The big trading funds (CFTC classification: managed money) have rebuilt long positions after modest liquidation in late 2010. But with each fund having a maximum it can own in each market, there’s a chance their long positions might be close to their ceiling. It’s these trading funds you should be most concerned about as their trading is determined by computer programs. Given the size of their long positions, there’s not a lot to counter the size of their selling if prices slip to the stops they hold on their long positions. And if prices were to slip into stops on their long positions, there’s a significant risk grain prices could experience a hard liquidation break. That could cause prices to have an unusually hard short-term break. AgriVisor endorses crop insurance by

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2010 crop: The most important short-term variable is not the Chinese, but the South American crops. Barring a significant port strike, the entrance of South American crops into the world pipeline will rapidly diminish our exports. Without a weather problem, lower prices, not higher ones, are ahead. Wrap up sales now. 2011 crop: If the South American crops continue to improve, South America threatens to keep its exports relatively large into the early part of our new-crop year. Get sales up to recommendations. Plan to increase them during planting, having 50 percent priced by early summer. Fundamentals: China again canceled some soybean purchases last week. That continues to signal export demand will soon shift from our shores to South America. Brazilian harvest is said to be 9 percent complete, a little behind normal. But, early plantings were a little late this year. Weather

continues to remain generally good for the Argentine crops, too.

Wheat Strategy 2010 crop: Even though the recent break caused technical damage, it’s still not certain the short-term trend turned down. A close below $8.50 on Chicago May futures would look ominous. Until then, prices have potential to rebound back toward $8.91. Complete sales if you have inventory. This market feels exhausted. Because of the futures carry, HTA contracts for winter/spring delivery are still the best marketing tool.

2011 crop: Use rallies above $9 on Chicago July 2011 futures to make catch-up sales. We’ve considered adding to them, but don’t want to boost sales until the crop breaks dormancy or the trend turns down. If basis is wide on cash contracts, use a HTA contract. Fundamentals: Export business and weather supported wheat on breaks last week. Export demand is coming from countries with precarious political structures that are wanting to build food reserves. Weather news is focused on the Southern Plains and China.

FarmWeek Page 12 Monday, February 21, 2011

PERSPECTIVES

A love story

LETTER TO THE EDITOR Says organic farming provides solutions

Civil War romance supplies rootstock for farm family There are about 70,000 farms in Illinois, a number that’s down by half over several decades. Despite the decline, we have built the most efficient farms in the world and intend to keep it that way. Each farm has its story, its heritage. Let me share mine. In the summer of 1861, 16-year-old Jemima Dickson presented a locally made flag to Lt. Alan Varner CARSON at a town ceremony. VARNER The lieutenant, later company captain, was part of the newly formed Company D of the 25th Illinois Volunteer Infantry. That flag, Captain Varner, and the 25th Infantry would see action at Shiloh and Chickamauga, among other Civil War venues. We have no contemporary photo of Jemima, as we do of the dashing young officer. Was she beautiful? Clearly our captain thought so because a correspondence, and then a marriage that lasted into the 20th century, ensued between the people who were my great-great-grandparents. Some 80 years later, another Lieutenant Varner, their great-grandson and my father, would see action in the Battle of Leyte Gulf and South China during World War II. Does history repeat itself ? My father’s term of service was for the duration of the war. Fortunately for me, he married mom just a few days before shipping out. It was different in the 1860s, in the midst of the Civil War. My great-great-grandfather and the other soldiers of the 25th Illinois signed on for three years. With the war still raging, they were mustered out during the summer of 1864 and my great-great-grandfather was able to return home and marry Jemima. Their first of five children, Jacob, my great-grandfather, was born in 1867. With the approaching sesquicen-

tennial of the Civil War, stories like theirs will soon be in vogue. So let Jemima and Alan’s be one of the first. My great-great-grandparents built Varner Farms together. We may think that our pioneer ancestors simply stumbled onto our flat and fertile ground. The truth is they had to create what we have today. Our flat land was naturally riddled with depressions. That means pesky willow and cottonwoods, standing water mosquitoes, and disease. Jemima’s 1927 obituary tells us, “That due to poor drainage and sanitation, malaria, flu, typhoid, and other diseases were common ... They drained the land as best they could with surface drainage and underground ditches made with a mole drilling machine ...”. — whatever that might be. The prairie sod was turned over for the first time, no doubt, by a John Deere steel plow invented in 1837. Proper drainage is a constant battle. We have spent thousands of dollars in recent years improving drainage and thus the quality of the land. Mercifully, machines now do the work that used to break backs. “The country was sparsely settled,” we are told in the obituary. “Deer, prairie chickens, turkeys, wolves, foxes, and other wild animals abounded.” That part seems romantic, at least to us. “Success required much physical and mental strength and this was possessed to an unusual degree by both Captain and Mrs. Varner.” They began their life in a log cabin and later built a substantial brick house, which is no longer there, though I do remember it. Now after our sentimental journey, let’s get down to business. Even large farms are small businesses, and these Illinois family farms lead the world in agricultural efficiency. Keeping it that way requires public education on the issues and continued partnership with (gulp) government to keep the sea lanes of free trade open and, on occasion, give financial support.

Big and efficient are not the same. Studies indicate that the family farm or the partnership of several families is the peak of efficiency. Large, corporate mega-operations are not in our best interest. If peak efficiency is to be maintained, improved technology will allow farm size to gradually grow, but the family unit will remain at the center. Business theory next tells us that in a very competitive environment the efficient will survive and the weak will drop out. This is not always the case. Farming, I believe, is an exception to this general rule. Employees with State Farm Insurance Cos. or the State of Illinois enjoy a steady income. In farming, income and prices swings are radical. There is no end to years of feast and famine, fat and lean. Survivors of the famine years are not so much the efficient, but those who can endure loss the longest. They are the mega-corporate operations. Taxpayer support preserves many efficient family farms in famine years. In spite of higher fertilizer and seed prices, times are good right now for Varner Farms, and government payments were just 2.7 percent of income last year — much of that in Conservation Reserve Program payments. But in 2000, when many were making a killing on Wall Street, it was famine on the farm. I sold one load of corn for $1.53 per bushel, a price I could have gotten in 1918. (We are getting more than $5 today.) Government support was 24 percent of what we took in. Varner Farms survived that, and the next famine year of 2005, but other equally good operations did not. That is today’s lesson: a romantic Civil War story, a bit of Illinois history, and some business theory. Carson Varner is a professor of finance, insurance, and law at Illinois State University, Normal. His e-mail address is cvarne2@ilstu.edu.

Editor: The word limit permits me to comment on only a few aspects of two articles in the Jan. 24 FarmWeek (p. 4 and 7) on the recent Illinois Fertilizer and Chemical Association (IFCA) convention. The first article reports on possible solutions offered by panelists to high nitrogen and phosphorous levels in Illinois surface waters. In general, they suggested more study and analysis. But not the obvious solution: a large decrease in the use of synthetic nitrogen and phosphorous fertilizers. I say act now by transitioning industrial agriculture to family organic farming. The second article reports on a speech by Leonard Gianessi, director of the Crop Protection Research Institute, at the same convention. The article reports that there is “one clear solution for feeding more people (in the U.S.) in the future,” which Mr. Gianessi says it to “produce more crops/food per acre.” There are other approaches: e.g., reduce the great waste of food, including many people eating too many calories; grow more primary food and less, as an example, corn for ethanol and sweeteners; and replace much dietary animal protein with plant protein. Mr. Gianessi credits the introduction of hybridization, fertilizer, and pesticides with the large increase in corn yield since 1935. Classical plant breeding, including hybridization, has been important. But corn yield has also increased on organic farms — without synthetic fertilizers and pesticides. He also claims that new technology saves the soil and reduces fossil fuel use. But not compared to organic farming, which is better in both regards. Also, how long will his highly touted no-till perform with the increasing prevalence of herbicideresistant weeds? Finally, the use of synthetic fertilizers and pesticides is not sustainable because the natural resources (e.g., fossil fuels, and phosphate and potassium rocks) are finite and declining. HERMAN BROCKMAN, Congerville

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‘I’m a finalist for Extreme Farm Makeover.’