FarmWeek February 28 2011

ILLINOIS FARM BUREAU will make several environmentalrelated issues priorities in this spring’s state legislative session. ....2

L I V E S T O C K FA R M E R S receive advice on how to avoid the inadvertent hiring of an animal activist. ............................................3

THE ILLINOIS FARM Bureau Market Study Tour will visit the Panama Canal and other sites in the region beginning next week. .............................4

Monday, February 28, 2011

Two sections Volume 39, No. 9

Now ‘not the time’ to block ethanol — biofuels head

BY MARTIN ROSS FarmWeek

Renewable Fuels Association (RFA) President Bob Dinneen acknowledges ethanol’s future is on the table in Congress. He just isn’t ready to see it laid on the chopping block.

Commemorating RFA’s 30th anniversary in Phoenix last week, Dinneen noted the “acute state of turmoil and uncertainty” that faced the industry in 1981.

Last week, Dinneen indicted U.S. House moves to block use of federally approved E15 (15 percent ethanol) blends and called on the Senate and White House to defeat measures included in the House fiscal 2011 continuing resolution (CR).

Rep. Jeff Flake (R-Ariz.) won approval for a CR amendment to bar USDA funding for new retail “blender pumps” that offer a choice of ethanol fuels.

And Rep. John Sullivan (ROkla.) moved a measure to block U.S. Environmental Protection Agency (EPA) efforts to boost fuel ethanol content.

Dinneen conceded “we need to be flexible in our approach ... and recognize the limitations of government support in an era of unimaginable debt and competing priorities.”

He said he is open to discussion of options to revise the 45cent-per-gallon ethanol

PLANNING FARM COMMUNITY RESPONSES

Dr. Patrick Webb, far left, director of swine health programs with the National Pork Board, discusses emergency responses for a typical farm community, depicted in the toy model, during an agroterrorism workshop at the Pike County Farm Bureau building last week. The Federal Bureau of Investigation and the Illinois Department of Agriculture sponsored the workshop for local officials and farmers.

(Photo by Ken Kashian)

blenders tax credit, including a plan to divert a share of federal support toward blender pumps and other biofuels infrastructure.

“What happened with the continuing resolution was a couple of oil state members of Congress decided they were going to seize the moment and put a stake in the ground to say, ‘We don’t want the ethanol market to grow,’” he told FarmWeek. “All they’re doing is denying choice.

“They were substituting their political science for EPA’s physical science. The Department of Energy and EPA have more than 6.5 million (vehicle test) miles on E15. That’s the equivalent of 12 trips to the moon and back.”

Dinneen sees Flake and Sullivan’s “opportunity to vent” having little traction with the administration or Senate leaders. Sen. Charles Grassley (RIowa) told RFA members, “We need certainty for investors and producers” via solid ethanol policy, but he warned ethanol opposition is “growing too fast.”

Grassley said “Big Oil” has been joined in attacks by “grocery manufacturers, environmental groups, international humanitarian organizations, and ivory tower elites.” He sees ethanol as “a scapegoat for the

big food producers, for the sole purpose of raising prices and making bigger profits.”

Dinneen believes the media now realize “they were used by some special interests” to target ethanol as a factor in food price increases. “They’re (media) a lot more reasonable; they’re a lot less quick to jump on the bandwagon,” he said.

On the heels of RFA’s conference, the biofuels group Growth Energy (GE) condemned House actions against E15 amid “unrest in Libya and other North African and Middle Eastern nations sending oil to a two-year peak of $120 (per barrel).”

GE CEO Tom Buis warned “now’s not the time for Congress to be blocking ethanol from the American fuel market.”

The Flake-Sullivan amendments threaten to deepen America’s addiction to foreign oil,” said GE co-chairman and retired Gen. Wesley Clark. E15 could replace 7 billion gallons of gasoline per year, according to Buis.

“Today, ethanol is the only alternative energy source that’s actually replacing oil,” Senator Grassley told RFA. “The 13 billion gallons of ethanol produced in the year 2010 will reduce oil demand by about 455 million barrels.”

Periodicals: Time Valued

Simon seeks to be a voice ‘for all the state’ Rural, economic issues on list

BY KAY SHIPMAN FarmWeek

Downstate and rural Illinois have a voice in the lieutenant governor’s office, Lt. Gov. Sheila Simon assured Farm Bureau leaders last week.

“I want to speak out for all the state. It is significant to speak up for parts of the state that are not heard from,” Simon told Farm Bureau leaders at the Illinois Farm Bureau Governmental Affairs Leadership Conference, Springfield.

Simon reeled off a to-do list that touched on several issues of interest to Farm Bureau members. Those range from equity in quality education to rural community issues and from river concerns to economic development.

“To me, the most significant thing in rural economic development ... is education and making sure that we have quality education everywhere in the state and not just in places with high real estate values,” Simon told FarmWeek.

Through her efforts, the lieutenant governor also envi-

FarmWeek on the web: FarmWeekNow.com

sions herself as a link between constituents from different parts of the state who share similar interests and concerns.

Community colleges are a prime example. The lieutenant governor already has met with several community college presidents and plans to meet with others. Her goal is to have community college presidents share success stories as well as problems. She said she will share that information with Gov. Pat Quinn and state legislators.

Education and community colleges are key to growing the

state’s economy, Simon noted.

“We know our economy is going to need more highly educated workers,” Simon said.

Currently, 40 percent of Illinois adults age 25 and older have some college education.

Her goal is to increase that to 60 percent.

Illinois has many economic opportunities even within itself, Simon continued. She remembered attending an organizational meeting for a new farmers’ market in Rogers Park. One volunteer needed help finding growers.

See Simon, page 3

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

FarmWeek Page 2 Monday, February 28, 2011

GOVERNMENT

Quick Takes REGULATORY DUST-UP? — Heading into a new farm bill, Senate Ag Committee Chairman Debbie Stabenow (D-Mich.) notes a “more risky” climate for farmers. She said she doesn’t want to add unnecessary regulatory risk to an already uncertain future.

Stabenow has assembled a group to work with USDA and the U.S. Environmental Protection Agency (EPA) regarding concerns over pending environmental regulations. EPA is eyeing new nutrient loading restrictions for portions of the country as well as potentially broad greenhouse gas and particulate/”dust” regulations.

“We need to discuss the issue and provide more certainty and clarity to farmers,” Stabenow said. “We need to remind them (regulators) that county roads sometimes can be a little dusty, and there’s not much we can do about it.”

The senator sees forthcoming farm legislation as a “jobs bill,” noting that in her home state, about one of every four jobs is tied to agriculture. While commodity prices have increased, the cost to plant an acre of corn has increased the past 30 years from about $80 to more than $300,” she said.

SIMON’S SILO EXPERIENCE — Illinois farmers don’t be concerned. The new lieutenant governor said she won’t ask to scale your silos — no matter how spectacular the view.

During last week’s Illinois Farm Bureau’s Governmental Affairs Leadership Conference, Lt. Gov. Sheila Simon shared a story about her first visit to the Randolph County farm of her father-in-law, Wilbert Knop. Simon joked that being “young and in love” she agreed to climb the silo for the best view of the farm. Her journey up wasn’t difficult, but coming down was another story.

“I’m happy to visit any of your farms, but I won’t climb any of your silos,” she assured Farm Bureau leaders.

IS YOUR MOM SPECIAL? — Illinois Country Living, the electric magazine provided to homes of rural electric cooperative members, is seeking candidates for its 2011 Illinois Country Mother of the Year award.

The winner will be a mother who is served by a rural electric cooperative and has been active in her community.

To be entered, the special mom must be described in 500 words: What she does and why she deserves to win the title.

Go to {icl.coop} to fill out a form and write in the essay or mail it to: Mother of the Year, Illinois Country Living, P.O. Box 3787, Springfield, Ill., 62708-3787.

Those making nominations must provide their name, relationship to the nominee, and phone number with area code.Deadline to enter is March 11. The winning mother will receive a $100 gift certificate and other prizes.

(ISSN0197-6680) Vol. 39 No. 9

February 28, 2011

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IFB focuses on state legislative priorities

BY KAY SHIPMAN FarmWeek

Illinois Farm Bureau is addressing several environmental-related issues among its state legislative priorities in the spring session.

Under SB 1841, sponsored by Sen. Linda Holmes (D-Aurora), the Illinois Environmental Protection Agency would keep confidential the name of an individual being investigated for a potential environmental violation until the investigation is finished and enforcement proceedings have started.

IFB Director Chuck Cawley, chairman of the IFB Illinois Government Committee, explained IFB wants an investigation to be completed before possible causes and sources are identified to prevent an individual from being accused falsely.

“It goes against the grain of being innocent until proven guilty,” Cawley said. “It would be unfair to all parties involved.”

On an another environmental front, IFB wants to reconnect mineral rights that have not been used in 20 years with the surface land owner. That is the purpose of SB 1876, sponsored by Sen. A.J. Wilhelmi (D-Joliet).

The legislation addresses the issue of mineral rights that were sold many years earlier but have remained dormant. The idea is to have dormant rights revert to the surface owner.

IFB would consider any action, such as development or even filing of a notice of continued ownership, by the mineral rights owner to mean the rights are being used and those

rights would not revert to the surface owner.

Safety concerns are at the heart of two bills related to the use of slow-moving-vehicle (SMV) emblems. Both HB 1438, sponsored by Rep. Chad Hays (R-Danville), and SB 1907, sponsored by Sen. Martin Sandoval (D-Chicago), propose to increase fines to $75 for improper use of SMV emblems.

Currently, the fine for misuse of an SMV emblem is $25. By increasing the fine, IFB hopes people would be discouraged from using SMV emblems to mark their driveways or other improper uses, according to Cawley.

“A driver could mistake that (improper use) for a vehicle with dangerous results,” Cawley said. “It’s simply a matter of safety.”

IFB supports SB 2012, sponsored by Sen. Michael Frerichs (D-Champaign), which would change how the Illinois Council on Food and Agriculture (C-FAR) is funded.

Cawley, who serves as C-FAR chairman, explained the bill proposes to make C-FAR research grants competitive instead of awarding designated percentages of funding to the four state universities with agriculture programs.

The legislation also would allow C-FAR to accept contributions instead of the existing requirement that it must rely solely on state funds, Cawley added.

The changes “are key components of the reinvention of C-FAR” and were proposed by a C-FAR task force, Cawley said.

HIGHEST AWARD RECIPIENT

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

Richard Verdery (rverdery@ilfb.org) Classified sales coordinator

Nan Fannin (nfannin@ilfb.org) Director of News and Communications

Dennis Vercler Advertising Sales Representatives

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

U.S. Rep. John Shimkus, right, a Collinsville Republican, last week was awarded the Golden Plow award, the highest honor the American Farm Bureau Federation bestows on a member of Congress. The award was presented by Illinois Farm Bureau President Philip Nelson during the Governmental Affairs Leadership Conference in Springfield. Nelson called Shimkus a “passionate advocate” for farmers.

“Just two weeks ago, the congressman used my testimony and a photo he took of last October’s soybean harvest to make the point that EPA’s (Environmental Protection Agency) proposed dust regulations defy common sense,” said Nelson. IFB nominated Shimkus for the award because of his work on Farm Bureau issues, including his opposition to cap-and-trade legislation, support of biofuels, and his efforts on animal health and food safety. (Photo by Kay Shipman)

DATEBOOK 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/ExplorA CES}.

March 12 Tri-state forest stewardship conference, Sinsinawa Mount Center, Sinsinawa, Wis. To register, go online to {www.forestry.iastate.edu}.

Page 3 Monday, February 28, 2011 FarmWeek

GOVERNMENT

Livestock farmers advised to use care when hiring and put into writing animal care and handling guidelines — and each employee should receive Livestock farmers should apply some of the training on those guidelines and sign a docuhiring practices used by other employers to ment stating he or she was trained and underreduce the possibility of employing an animal stands them. activist, an animal agriculture expert told Farm “This (guideline) is proof that you’re doing Bureau leaders last week. the right thing and provides proof that you “It is important for you, as farmers, to have developed policies for employees to folunderstand that agriculture is part of the coun- low,” she said. try’s critical infrastructure,” said Kay JohnsonJohnson-Smith also recommended farmers Smith, vice president of the Animal Agriculture develop a policy about employees’ having and Alliance, based in Arlington, Va. using any type of device that can record video, She spoke at the Illinois Farm Bureau Govphotos, or sound. ernmental Affairs Leadership Conference in She encouraged farmers to let employees Springfield. know they can Many of report situathe hiring tions “that ‘It is impor tant for you, as don’t seem practices and questions on farmers, to understand that right” without Johnsona g r i c u l t u r e i s p a r t o f t h e repercussion Smith’s list and to warn country’s critical infrastruc- them about to be asked are familiar individuals ture.’ to most who might — Kay Johnson-Smith offer bribes to employers.

Animal Agriculture These get access to Alliance vice president include buildings or requiring and animals. checking prospective employees’ references and If a farmer receives a threatening letter from asking employees to sign statements that their an activist group or becomes the focus of an personal information is accurate. activist campaign, he or she should keep local In some cases in which a farmer inadvertent- law enforcement informed and work with the ly hired an animal activist, following basic hiring county and Illinois Farm Bureau, Johnsonprocedures might have stopped the activist, Smith advised. according to Johnson-Smith.

Farmers interested in additional details may She also recommended farmers implement contact Jim Fraley, IFB livestock program direcprocedures specifically geared for livestock tor, at 309-557-3109 or Johnson-Smith at 703operations. Each livestock farm should develop 562-5160.

BY KAY SHIPMAN FarmWeek

TREASURER TALK

Illinois state Treasurer Dan Rutherford, right, shares a laugh with Livingston County Farm Bureau President Dennis Haab, left, of Forrest and the county Farm Bureau’s treasurer-secretary, Don Immke of Pontiac, during Illinois Farm Bureau’s statewide legislator reception in Springfield last week. Rutherford took the opportunity to stay and chat with former constituents and friends.

(Photo by Kay Shipman)

Lt. Gov. Sheila Simon discusses agricultural issues with Illinois Farm Bureau President Philip Nelson, right, following her speech to IFB’s Governmental Affairs Leadership Conference in Springfield. Mark Gebhards, IFB executive director of governmental affairs and commodities, looks on. Simon told Farm Bureau leaders she will work on rural and downstate issues. (Photo by Kay Shipman)

Simon Continued from page 1 “It was so funny to be in the middle of this urban area and to hear people say they want more access to fresh, local produce,” Simon said, laughing that she was a resource because she knows farmers. Simon said she hopes to bring about more linkage between farmer resources in Illinois and consumers.

Simon’s also would like to connect local elected officials across the state.

The lieutenant governor mentioned she had IFB’s Adopt-aLegislator program in mind when she thought of a local officials matching program.

Her goal is to help local officials connect with their counterparts in different areas of Illinois. Simon said she hopes the program will help officials make personal connections with colleagues in different areas.

“I’m from Southern Illinois, and I want to be a voice for all of the state,” she said.

Agriculture facing flood of environmental issues The nation’s agricultural industry faces environmental challenges, especially as the U.S. Environmental Protection Agency (EPA) pressures states to take action; however, agriculture has progressed on a couple of fronts, according to two national experts who spoke at the Illinois Farm Bureau Governmental Affairs Leadership Conference last week.

Susan Parker-Bodine, an attorney from Washington, D.C., shared a list of environmental lawsuits with the potential to negatively impact Illinois farmers.

She repeatedly expressed frustration at EPA’s reliance on computer models to set regulatory targets instead of using accurate data.

“It’s a train wreck, and we don’t see the train wreck being stopped,” Parker-Bodine said of EPA’s efforts to require permits for pesticide applications on or near “waters of the U.S.” Harold Coble with USDA’s Office of Pest Management

reported two recent successes on environmental issues.

Coble and his colleagues represent USDA and agriculture while working on pesticide regulations with EPA. Coble expressed optimism that EPA will alter proposed pesticide label wording about spray drift. USDA had recommended EPA change the wording to “don’t allow spray drift that causes harm” from wording that was more vague.

“I talked last week with EPA, and we seem to have made progress on the language,” Coble reported.

Coble also was optimistic the National Marine Fisheries Service will rely on USDA information on documented pesticide uses to develop pesticide-use restrictions.

Previously, the agency had based its restrictions on possible maximum pesticide rates and applications, Coble explained.

“Folks, that’s a win,” Coble said of the agency’s change in mindset. — Kay Shipman

FarmWeek Page 4 Monday, February 28, 2011

PRODUCTION

USDA: Stocks will remain tight despite jump in acres

BY DANIEL GRANT FarmWeek

U.S. farmers this planting season are expected to respond in a big way to higher crop prices.

USDA last week projected the total area for the eight major row crops (barley, corn, cotton, oats, rice, sorghum, soybeans, and wheat) will increase by 9.8 million acres to a total of nearly 255 million acres.

That would be the most total crop acres planted in the U.S. since 1998.

“Higher market prices will encourage greater plantings this year and increased crop production this fall,” Joe Glauber, USDA chief econo-

mist, said last week during the USDA Ag Outlook Forum in Arlington, Va. USDA projected farmers this spring will increase plantJoe Glauber ings from last year by 3.8 million acres for corn, 600,000 acres for soybeans, and 2 million acres for cotton. U.S. farmers last fall increased winter wheat seedings by 3.7 million acres to 41 million acres.

“The net increase of 9.8 million acres would be the largest year-to-year change since 1996 when 15 million additional

Weather will be watched closely this growing season Weather always is the key determinant of crop yields, but it could have an even greater impact on the markets in coming months than at any other time in recent history.

Tight crop supplies and strong demand essentially have turned the possibility of above-average corn yields from a goal for U.S. farmers into a necessity this growing season.

“We need early corn planting and we need a lot of it,” Steve Strong, senior export corn trader with Bunge North America, said last week at the Grain and Feed Association of Illinois (GFAI) annual convention and trade show in Springfield.

Corn demand so far has not slowed much, despite $7 futures, as historically high livestock and oil prices have kept many livestock producers and ethanol manufacturers in the black.

Meanwhile, the low value of the U.S. dollar, crop shortages in other regions of the world caused by drought and floods, and a stronger economy have made U.S. ag products hot commodities around the world.

Strong reported U.S. corn demand is on pace to total 13.5 billion bushels. U.S. corn production, however, last year totaled 12.4 billion bushels.

“We are consuming corn at a pace that is not sustainable to make it to the new crop,” Strong said. “The function of the market is to find a way to ration demand and increase acres. It’s a very bullish picture (for corn prices).”

Strong estimated it may take as many as 95 million acres of corn this year to meet demand and rebuild stocks. About 88 million acres were planted to corn in 2010.

The seasonal forecast for March through May is neutral in terms of precipitation and temperatures. However, the overall wet pattern could continue into the planting season.

“We have a snowpack sitting up north (that totals as much as 3-5 inches of water),” Jim Angel, state climatologist with the Illinois State Water Survey, said at the GFAI convention. “As soon as it melts, it will come rushing down the Mississippi and could cause (flood) problems.”

On the flipside, forecast models predict La Nina (cooler waters in the Pacific) will weaken and possibly be gone sometime between May and June. La Nina springs tend to be dry, Angel reported.

“Soil moisture is in great shape,” Angel said. “The only drought conditions in the U.S. are in the south and southeast. It looks like that will continue.”

So what type of impact could La Nina have on the weather and crop yields this season?

Elwynn Taylor, Iowa State University Extension climatologist, predicted on Twitter that if La Nina remains active into June, the national corn yield could average just 147 bushels per acre, which could push the average corn price to $7.42 per bushel.

However, if La Nina conditions disappear by June 1, Taylor projected the national corn yield could average a much more robust 162 bushels and pull corn prices down to an average of $5.70 per bushel. — Daniel Grant

acres were planted to the eight crops,” Glauber said.

The corn acreage estimate would be the highest level in the U.S. since farmers planted 93.5 million acres in 2007.

However, even with a national trend-line yield of about 162 bushels per acre this year, corn stocks would increase by just 190 million bushels to a total of 865 million bushels.

The situation is similar for soybeans as USDA projected ending stocks this year will increase by a modest 20 million bushels to a total of 160 million bushels.

“In terms of stock levels, there will be some rebuilding,

FarmWeekNow.com Listen to remarks by USDA chief economist Joe Glauber at FarmWeekNow.com.

but the situation will remain very tight,” Glauber said.

The tight stocks combined with strong demand are expected to keep the pressure on crop markets. Crop prices this year were projected to average $5.60 per bushel for corn, $13 for beans, and $7.50 for wheat.

Elsewhere, livestock prices were projected to remain strong this year. USDA forecast steer prices this year will average a

record $102 to $109 per hundredweight while hog prices are expected to rise from an average of $55 per hundredweight in 2010 to an average range this year of $58 to $61 per hundredweight.

The all-milk price this year was projected to average $17.70 to $18.40 per hundredweight, up from $16.29 last year and $12.93 in 2009.

High crop prices are expected to temper expansion in the livestock industry, though, as feed costs account for about three-quarters of expenses.

Overall, cash production expenses for farmers this year were projected to reach a record-high $274 billion.

Panama ‘bottleneck’ northbound without infrastructure investment?

BY MARTIN ROSS FarmWeek

It was constructed nearly a century ago — a marvel of commercial infrastructure built to accommodate the oceangoing behemoths of the future.

When the size and scope of marine transportation finally surpassed that vision, the nation’s citizens voted to invest billions in bringing it up to date.

Indeed, Mike Steenhoek argues, the consistently “wellmaintained” Panama Canal offers a model for U.S. policymakers who balk at investing in Mississippi River locks and domestic port infrastructure that he deems crucial to Midwest producers hoping to fully tap the Canal’s potential.

Last week, Steenhoek, director of the national Soy Transportation Coalition (STC), briefed participants of Illinois Farm Bureau’s March PanamaColombia Market Study Tour.

STC members met in Panama in December; Illinois Soybean Association representatives will join IFB members on a week’s market study tour March 8 to 15.

Steenhoek notes Panama’s plan by 2014 to complete major expansion of the formerly U.S.owned Canal — an increasingly crucial conduit for containerized shipments between the Gulf and key Asian markets. An average 40 vessels move daily through the 48-mile canal, which was completed in 1914.

Forty-two percent of U.S. grain exports today moves through the Canal, including 540 million bushels of soybeans in 2010 alone. Steenhoek estimates 61 percent of soy exports move through the Gulf.

The size of oceangoing cargo vessels has increased over the last century — a modern “Panamax” vessel can carry 2 million

bushels of beans. Panamanians thus voted in 2007 to expand currently limiting lock chambers and channels, at a projected $5.2 billion cost.

Expanded Canal capacity is expected to generate a “big surge” in freight movements, according to Steenhoek. Unless Congress and the administration begin to prioritize domestic infrastructure improvements, he sees a current Panamanian “bottleneck” moving upstream to the U.S. “We certainly need to do some things to augment our rail infrastructure, which will feed (Gulf) ports,” Steenhoek told FarmWeek. “This is going to be another reason to advocate for lock-and-dam modernization and repair.

“Illinois has an opportunity to do some container-on-barge

loading on the Illinois River and send freight all the way down to the Gulf.

“And it’s a call, in my opinion, for greater semi (truck) weight limits. You have to look at the whole system as a logistics chain, and there are weak links throughout it. Whether you’re talking about trucking, barge, or rail, each one of those needs to be fortified.”

The Port of New Orleans predicts a 12-13 percent increase in overall cargo shipments in the near future.

Evergreen Shipping, a New Jersey company with offices in Oakbrook, Panama, and Colombia, is a major host for IFB’s study tour. IFB Senior Commodities Director Tamara Nelsen noted “agriculture’s become very important to them.”

“They know that agriculture’s voice in (U.S.) policy and investments is important to their long-term shipping ability,” Nelsen related.

ADOPTED LEGISLATOR CHAT

Rep. Fred Crespo (D-Hoffman Estates), second from right, chats with his “adopted” county Farm Bureau leaders, left to right, Hancock County Farm Bureau Board members Carol Jerred and Sam Zumwalt and Illinois Farm Bureau Director Terry Pope during the IFB legislator reception last week. The county Farm Bureau and Crespo are matched through IFB’s Adopt-a-Legislator program.

(Photo by Kay Shipman)

Page 5 Monday, February 28, 2011 FarmWeek

ENERGY

Clinton: No simple answers to food-vs.-fuel debate

BY DANIEL GRANT FarmWeek

Former U.S. President Bill Clinton learned one of his first lessons about agriculture while growing up on a farm in Arkansas.

With an outhouse as the only facility on the farm, he joked last week at the USDA Ag Outlook Forum in Arlington, Va., that he quickly learned which snakes were poisonous and which were non-poisonous so he could decide when it was safe to use the facility.

But now, as the world has changed greatly since those seemingly much simpler times decades ago, farmers and agriculture face much more difficult decisions, according to Clinton.

“We’re living in a highly complicated environment,” Clinton told an overflow crowd of more than 1,000 attendees at the Bill Clinton Outlook Forum. “What will agriculture look like in the next 20 years as we deal with all the competing pressures?”

Specifically, he said, agriculture must feed a rapidly rising population — the world population is projected to grow from 6.5 billion people to 9 billion people by 2050 — at a time when it also is being counted on as a key source of

energy, mostly in the form of biofuels.

Clinton, who 10 years ago founded the William J. Clinton Foundation with goals that include alleviating poverty, improving global health, strengthening economies, and protecting the environment, noted agriculture must walk a fine line to balance future food, feed, and energy demands.

“Half our trade deficit is imported energy,” Clinton said.

“We have to become more energy independent.

“But we don’t want to do it at the expense of food riots,” he continued. “We must maximize the availability of good food at affordable prices and maximize our move to energy independence. For farmers,

there are no simple answers.”

Growth Energy, a biofuels advocacy group, called Clinton’s admonition “well-intentioned,” but pointed the former president toward recent studies including “Land Availability for Biofuel Production,” in the journal Environmental Science and Technology in January.

The University of Illinois/University of Central Florida study indicates biofuel crops grown on already-available farmland could produce up to half of the world’s current fuel consumption without negatively affecting food crops.

American agriculture won’t be able to do it all, though, according to Clinton. That’s why he said it is imperative for the U.S. to help farmers in oth-

er countries become more productive through the use of better farming techniques, improved genetics, and the formation of cooperatives.

Clinton insisted that improving food production around the world won’t result in competition for American agriculture.

He noted more than 1 billion people currently suffer from chronic hunger, and the world population is expanding the fastest in countries with some of the highest poverty rates. In the U.S., the percentage of people on food stamps is near a 50year high, according to Clinton.

“We have to make sure people can feed themselves,” he said. “There is no conflict (of interest) in our effort to build sustainable agriculture.”

Vilsack: USDA will promote exports, biofuels despite rising food prices Ag Secretary Tom Vilsack last week acknowledged U.S. crop stocks likely will be extremely tight this year.

The stocks-to-use ratio for soybeans is at an all-time low while the stocks-to-use ratio for corn is at its lowest point since 1995/96.

However, Vilsack was adamant last week during his keynote address at the 87th annual USDA Ag Outlook Forum in Arlington, Va., that his agency’s push to promote ag exports and biofuels will not waiver this year despite the possibility of tight crops supplies contributing to higher food prices.

“Some suggest we should

take our foot off the gas on ag exports to rebuild our (grain) supply,” Vilsack said. “We’re not going to do that.”

Instead, the Tom Vilsack ag secretary believes American farmers will respond to strong domestic and international demand by increasing crop production.

USDA at the meeting predicted the ethanol industry this year will increase its use of corn by 50 million bushels while soybean exports will be the second-highest on record

at 1.575 billion bushels despite prices that increased in recent months by 42 percent for corn and 41 percent for beans.

The Ag Department last week also increased its estimate for domestic food price hikes this year from 2 to 3 percent to a current forecast of 3 to 4 percent.

“High prices are a catalyst for the private sector to increase food production,” Vilsack said. “Despite the challenges and difficulties, I’m confident in our ability to confront these challenges.”

USDA also projected U.S. farmers this year will respond to strong demand, tight stocks, and high prices by increasing plantings of the eight major row crops by

Promising start to 2011 season should help meet corn needs

BY MARTIN ROSS FarmWeek

Corn growers are looking at a promising start to the planting season and thus have sound prospects for adequately meeting future food and fuel needs (see accompanying story).

So says National Corn Growers Association (NCGA) CEO Rick Tolman, who assured global ethanol interests that researchers and growers are continuing to “expand the pie” — i.e., total grain supplies for livestock, exports, and biofuels markets.

Tolman acknowledged that often, “the difference between having too much and too little in the corn market is narrow.” But for 2011, he suggested, “the odds favor us being at or above (historical yield) trend” — a recent informal survey of NCGA board members projected a 165-bushel-per-acre or higher national average yield (last year’s average was 153).

While a “hiccup or disruption” could spur corn prices given current supplies, Tolman sees seasonal conditions and market incentives “telling farmers to plant more corn.”

“We had a really good fall: The weather was dry and the winter weather held off,” Tolman

told FarmWeek. “Farmers were able to get crops out of the field, to do their fall tillage, apply their fertilizer, buy inputs. It was much different than 2009 when they were still harvesting even into 2010.

“They’re feeling like they’re well prepared this spring to really get in and plant and get things done.”

He sees improvements in crop genetics continuing to drive yields and strong farm income and current federal tax incentives driving equipment purchases that can boost productivity.

An NCGA-authorized study points to a possible 189-bushel corn average by 2020-21, as annual ethanol production approaches a projected 20 billion gallons. Even under that biofuels production scenario, “we see stocks continue to grow,” Tolman said.

Tolman offered stern words for a mass media he characterized as “misinformed or deceitful or lazy” in its failure to publicize the growing corn feed replacement value of ethanol-derived distillers dried grains.

“You know the story; it’s not being told,” he stressed at last week’s National Ethanol Conference.

9.8 million acres, including a 3.8million-acre bump in corn acres.

The Ag Department also will push to increase education about the benefits of biotechnology around the world to increase crop production, and it will work with other countries to help farmers learn new methods to increase crop production, the ag secretary said.

“We have to embrace the opportunities science presents to increase production worldwide,” Vilsack said.

The ag secretary also believes support of biofuels must continue despite recent rekindling of the food-vs.-fuel debate.

“There’s no reason to take our foot off the gas,” he said. “Biofuels are an important component of our energy security.”

Vilsack noted the U.S. has cut its oil imports by 450 million barrels each year due to the use of biofuels, but the U.S. still imports more than 60 percent of its oil. — Daniel Grant

FarmWeek Page 6 Monday, February 28, 2011

ETHANOL

Edwardsville center works to boost corn’s stock

BY MARTIN ROSS FarmWeek

While John Caupert notes “corn is in our name,” the director of Illinois’ National Cornto-Ethanol Research Center (NCERC) doesn’t quibble about where next-generation biofuels technology comes from or, for that matter, where it goes.

The Edwardsville center is chartered to study and help develop new corn ethanol technologies. While cellulosic

ethanol and other “future” fuels may be causing much of the buzz in Washington today, Caupert sees NCERC’s work offering a potential new lease to the original ethanol feedstock.

Under the federal renewable fuels standard (RFS2), corn ethanol caps out at a mere 15billion out of 36 billion gallons of required U.S. biofuels use by 2022. But scientists are seeing potential for starch-based ethanol to make inroads into the

growth category of “advanced biofuels” which offer quantum reductions in overall carbon emissions vs. gasoline.

Caupert feels “corn ethanol gets the short end of the stick” in terms of U.S. Environmental Protection Agency calculations.

The 15 billion-gallon RFS2 limit is based on its’ purported 20 percent carbon savings over gasoline, but Caupert notes center clients over the past few years have been “pushing

Cellulosic ethanol becoming a reality?

U.S. Energy Secretary Steven Chu argues “a strong domestic biofuels industry is good for our economy, good for our security, and good for our environment.”

Corn ethanol has provided “a good start” in strengthening green energy security “and generating wealth for farmers,” Chu told ethanol producers last week in Phoenix. But he stressed federal efforts to promote “advanced biofuels technologies,” including cellulosic ethanol, to “greatly expand the economic opportunities in rural America.”

Chu noted research with USDA in particular to develop “non-food feedstocks” such as switchgrass, and ongoing work to improve biofuels “energy density” and efficiency.

Meanwhile, global technology providers outlined how the private sector is rapidly achieving Chu’s reality.

Cynthia Bryant, director of global biomass business with biofuels technology provider Novozymes, suggested cellulosic ethanol could be cost-

competitive with its corn-based counterpart “in the very near future.” Key are emerging technologies that break down stubborn biomass fiber content and unlock complex sugars to generate more ethanol per ton.

Last year, Novozymes unveiled CTEC2, a technology that greatly reduces “dosing” — the level of costly chemical enzymes biofuels processors must use to break down biomass material. Last week, Bryant touted “fast fermentation” — a technique that enables plants to tap harder-to-get “C5” sugars.

C5 sugars constitute up to 40 percent of biomass, but because they have few commercial uses beyond fuel, they’re often left on the table or extracted with a roughly 50cent-per-gallon dose of highpowered yeast. “Your economics simply cannot support that,” Bryant told processors.

Fast fermentation would allow plants to recycle yeast. In commercial-scale trials, Novozymes found the technology can reduce the net “dose”

GMO switchgrass biomass boon?

The land reportedly is there; the will in Washington appears strong. And now, new GMO switchgrass could further set the stage for more feasible next-generation biofuels.

By manipulating lignin, generally the toughest plant fiber to break down and process into fuel, scientists have been able to produce a switchgrass variety that yields 38 percent more biofuel with lower pretreatment costs.

The modified switchgrass requires four to five times less cellulase, an enzyme used to break down fiber, according to a report in the Proceedings of the National Academy of Sciences. That would improve production cost margins and thus the competitive price of biomass ethanol.

“These transgenic switchgrass lines and the approach are valuable for developing improved cultivars of biofuel crops,” said report author Chunxiang Fu, a researcher with the Oklahomabased Samuel Roberts Noble Foundation.

With miscanthus, forest products, and crop residues, switchgrass is seen as crucial in achieving the Department of Energy’s “billion-ton” target for U.S. energy biomass production. Because of its perennial potential, switchgrass also could provide key carbon sequestration benefits.

Ernie Shea with the renewable energy group 25X’25, argued, “We have sufficient land capacity and underutilized land, coupled with improvements in productivity, to provide more than enough biomass feedstock to satisfy food, feed, fiber, and energy needs.”

At issue are “policy mechanisms” that encourage or inhibit development, Shea told FarmWeek.

He applauded the U.S. Environmental Protection Agency’s (EPA) January decision to delay biomass industry greenhouse gas permit requirements for three years — an indication the agency is “relying much more on sound science.” ““But there’s still a lot of work to be done to get consensus within the scientific community around how you properly calculate those impacts,” Shea noted. .”We’re spending a lot of time trying to help EPA sort that out.” — Martin Ross

by as much as 50 percent. The catch: Fast fermentation requires significant startup costs.

Novozymes also is developing low pitch fed batch technology, which extends fermentation time but with less yeast.

The key lies in finding what Bryant termed the “sweet spot” — the right blend of technologies for each plant.

Rival technology provider Genencor, meanwhile, has high hopes for accelerase duet, which is designed to work with 300 different biomass feedstock and processing combinations. Genencor’s Deborah Dodge reported the technology yields more sugar at a threefold reduction in enzyme dosage, and is effective with wood pulp, sugar cane, and corn “wastes.”

A DuPont-Genencor joint venture plans eventually to scale a 250,000-gallon Tennessee cellulosic demonstration plant up to 50 million gallons of annual production. Genencor also has joined Danish firm Inbicon in a 1.4-million-gallon plant that helps supply retail stations across Denmark.

Dyadic International CEO Mark Emalfarb cited major biorefinery innovation in northern Europe, noting his firm’s work with European “gene jockeys” to develop Dyadic’s C1 technology from a fungus found decades ago in Russian soils. Variations on C1 have yielded a series of durable, feedstock-diverse enzymes that withstand temperature and pH extremes.

The next step is fostering “onsite” enzyme production at ethanol plants, according to Dodge, offering them a “flexible” supply of feedstockfriendly enzymes and “just-intime” production to meet market needs. Working with ethanol giants including Abengoa and Iowa’s POET, Emalfarb sees plants realizing a 50 percent cost savings by producing enzymes onsite.

The CEO envisions “versatile genetic tools” opening not only new fiber and sugar avenues but also profitable new product lines. “You can make all kinds of things in addition to ethanol,” Emalfarb said. — Martin Ross

beyond 40 to 50 percent.”

“I’m completing a full calendar year cycle where 100 percent of the work we’ve done in the biofuels pilot plant is advanced biofuels work,” he told FarmWeek.

“What’s exciting for some is it’s advanced biofuels actually being produced from corn. A major area of study in advanced biofuels is energy efficiency, which leads to a lower carbon footprint.”

At the same time, Caupert is “excited” about Syngenta’s new amylase corn, which contains an enzyme necessary to convert its own starch into fermentable sugars, largely because of the corn trait’s potential incorporation into biomass energy crops (see accompanying stories).

Beyond improving ethanol resource use, NCERC embraces “the biorefinery concept” — wringing as many new products as possible from a single feedstock. NCERC’s commercial “scale-up” work since May has centered on corn-based “butanol,” both for use as a fuel that someday could be blended with gasoline in a single pipeline and as a industrial chemical feedstock.

That work has been powered

by Tetra Vitae, an Illinois-based company that uses technology developed by University of Illinois scientist Hans Blaschek.

NCERC’s pilot plant has produced some of the highest volumes of the new fuel yet.

“Tetra Vitae has gone public, and the world’s talking about it,” Caupert added.

Illinois-based researcher may help resolve dispute A Chinese-born scientist with Edwardsville’s National Cornto-Ethanol Research Center (NCERC) could play a key role in addressing Chinese concerns about U.S. distillers dried grain (DDG) exports.

China’s Ministry of Commerce recently launched an investigation alleging U.S. companies “dumped” the ethanol co-product at sub-par prices into the Chinese market, primarily from July 2009 and June 2010.

China is the No. 1 buyer of U.S. DDGs. China’s domestic industry annually produces roughly 3.5 million tons of DDGs. As an anti-dumping case, the dispute is between private U.S. and Chinese interests, rather than government agencies. The Chinese government was petitioned to launch the probe and will seek data from U.S. producer-exporters as U.S. officials monitor Chinese compliance with international rules.

NCERC, based at Southern Illinois University-Edwardsville, conducts extensive DDG studies. Center assistant research director Yan Zhang, a China native who NCERC Director John Caupert said has compiled “an enviable research portfolio” on DDGs, has been tapped to join discussions regarding Chinese allegations. “(Zhang) is incredibly respected in mainland China. I see a couple of trade missions probably for her this year to assist the U.S. Grains Council and other groups in their efforts to overcome this false accusation of dumping,” Caupert told FarmWeek..

“She’s just such a well-respected scientist around the world.”

Geoff Cooper, vice president of research and analysis with the national Renewable Fuels Association, reported the Chinese investigation will follow dual tracks. The first focuses on whether U.S. firms sold DDGs at prices below the cost of production or domestic Chinese prices.

Three “mandatory respondents” — companies that exported distillers grains during the alleged “dumping” period — tentatively have been called to submit all production and U.S. and international sales data to the Chinese government. That puts Iowa’s Big River Resources (which owns a Galva ethanol facility) and Golden Grain Energy and United Wisconsin Grain Producers “in the hot seat,” Cooper said.

At the same time, Chinese officials will attempt to determine “injury” — whether U.S. DDG imports significantly harmed China’s ethanol/DDGs industry. That phase of the investigation will tap far broader U.S. industry “effort and response,” Cooper told FarmWeek.

He noted speculation that China’s government was motivated to pursue an investigation in part as retaliation for U.S. complaints about Chinese wind and solar energy subsidies.

“There is no dumping occurring in that (DDG) market,” Cooper argued. “The price of distillers grains going into China is higher now than the prices in their domestic market.

“If China conducts a fair, even-handed investigation, it’ll find that there is no dumping, there is no injury resulting from the increased importation of U.S. distillers grains.

“It boils down to this: Are they interested in looking at this fairly and objectively, or is this entirely motivated by politics? Is this retribution for other trade tensions?” — Martin Ross

Page 7 Monday, February 28, 2011 FarmWeek

BUSINESS CLIMATE

GFAI president focuses on industry expansion issues

BY DANIEL GRANT FarmWeek

Last year was a busy one for the grain storage/elevator industry as many commercial and farm operations added drying capacity, storage capacity, or both.

Off-farm, commercial storage capacity in the U.S. on Dec. 1, 2010, totaled 9.74 billion bushels, up 3 percent from the same time in 2009, according to USDA. In Illinois, commercial grain storage capacity increased last year by about 40 million

bushels.

The growth has been spurred by strong demand for crops and a general trend of increased production.

Last year, David Koltveit U.S. corn production (12.4 billion bushels) was the third-largest on record while soybean production (3.33 billion bushels) was down just 1 percent from the record set in 2009.

The rise in grain storage needs has been good for the elevator industry, but it also has resulted in some growing pains.

David Koltveit of Consolidated Grain and Barge Co. in Bluffs will focus on industry growth issues this year during his term as the president of the Grain and Feed Association of Illinois (GFAI).

Koltveit took the reins of GFAI last week at the organization’s 118th annual convention and trade show in Springfield.

“As the industry grows and

gets larger, we have to continue to be a frontrunner in the safety and health of our employees,” Koltveit told GFAI members during his first president’s address. “You’ll see a lot of emphasis this year on safety.”

GFAI recently formed an alliance with the Occupational Health and Safety Administration to help improve safety at grain facilities around the state.

GFAI also joined the Grain Handling Safety Association.

Another challenge for the grain and feed industry as it

grows is infrastructure limitations and access to utilities, according to Koltveit.

“As the industry grows and demand increases, we’re finding natural gas and utilities are not readily available” at some locations in the state, he said. “If we don’t get our utilities upgraded, it will hurt our business.”

Some of Koltveit’s other priorities this year include expanding membership and services in the organization and building and maintaining relationships with lawmakers and regulators.

FSA: Payments boost rural Illinois economies The Illinois Farm Service Agency (FSA) provided about $649.7 million to Illinois farmers during fiscal year 2010, Oct. 1, 2009, through Sept. 30, 2010.

Scherrie Giamanco, state executive director for Illinois FSA, noted this money provides farmers with commodity price support and assistance to recover from disasters and implement conservation practices.

Payments made through FSA’s farm programs provide a financial boost to rural communities, she said. The economic impact of farm programs reaches local businesses through sales of equipment, seed, fertilizer, and fuel, Giamanco said.

Some economists estimate that once a federal farm program payment is made to a producer,

those dollars change hands locally at least seven times.

The following federal farm payments, by program, were issued in Illinois during FY2010: • $394,178,848 through the direct and counter-cyclical payment (DCP) program, which provides annual fixed direct payments to eligible farmer according to historically based acreage and yields.

• $102,505,213 was disbursed in Illinois through the Average Crop Revenue Election (ACRE) program. ACRE provides farmers with revenue-based payments as an alternative to receiving price-based countercyclical payments.

• $25,400,643 was received by qualifying Illinois farmers through the Supplemental Revenue Assistance (SURE) pro-

NASCAR driver coalition spokesman A multi-state farm/agri-business coalition recently announced a promotional partnership with NASCAR Nationwide Series driver Kenny Wallace.

Wallace of St. Louis will serve as spokesman for the coalition, Family Farmers, and renewable fuels for the 2011 racing season. ,ZJVY[LK ;V\YZ :PUJL

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The agreement makes Family Farmers the primary sponsor of RAB Racing’s No. 09 Toyota Camry, driven by Wallace, at five races this season. The first was Saturday at Phoenix International Raceway.

Participants in the Family Farmers coalition include the Illinois Corn Marketing Board, Illinois Soybean Association, Missouri Corn Merchandising Board, and Marquis Energy.

NASCAR this year is using a blend of 15 percent ethanol as its official fuel.

gram, which provides crop disaster assistance to eligible farmers on farms that have incurred crop production or crop quality losses due to natural disasters.

• $117,078,000 in annual rental payments was received by Illinois farmers who have Conservation Reserve Program (CRP) contracts. CRP is a voluntary land retirement program available to farmers to help safeguard environmentally sensitive land.

Other notable Illinois programs for FY2010 include:

$45,426 for the Livestock Indemnity Program (LIP); $1,423,594 for the Milk Income Loss Contract (MILC) program and $4,008,450.85 for the Dairy Economic Loss Assistance Payment (DELAP) program.

In addition to direct payments, Illinois FSA loaned $173,625,977 through commodity loans and loan deficiency payments to provide producers interim financing at harvest to meet cash flow needs.

The Farm Storage Facility Loan program provided

$31,795,790 in low-interest financing for farmers to build or upgrade farm storage.

FSA’s farm loan programs provide direct and guaranteed loans to purchase real estate or to provide funding for operating expenses.

In FY2010, Illinois FSA made 269 operating loans and 267 ownership loans for a total of $57,610,000 in direct loans.

Additionally, FSA guaranteed 265 operating loans and 242 ownership loans for a total of $147,421,000.

FarmWeek Page 8 Monday, February 28, 2011

RESOURCES

New Bt guidelines, tighter monitoring in 2011

BY MARTIN ROSS FarmWeek

The seed industry and the U.S. Environmental Protection Agency (EPA) are redoubling efforts this season to ensure the continued effectiveness of insect-resistant corn varieties.

EPA has issued new refinements to its Insect Resistance Management (IRM) Compliance Assurance Program (CAP), supported by the Agricultural

Biotechnology Stewardship Technical Committee (ABSTC), a consortium of Bt corn registrants that includes Dow, Monsanto, Pioneer, and Syngenta. ABSTC plans a heightened refuge education campaign this year.

ABSTC IRM Subcommittee Co-Chairman Michael Smith of Pioneer said compliance programs to date have proven effective in maintaining the efficacy of Bt corn borer,

rootworm, and combo borer/rootworm products.

CAP survey results for 2010 were largely unchanged from 2009, with the majority of growers found to have planted required refuge sizes and the majority of Bt acres including appropriate non-Bt refuge.

EPA changes in part reflect continued introduction of new Bt technologies, said IRM Subcommittee Co-Chairman Joanne

NRCS seeks input on 2012 farm bill A Thursday USDA National Resources Conservation Service (NRCS) regional forum in Rock Island is designed to gather local input on the 2012 farm bill’s Conservation Title.

Producers may attend to discuss conservation problems, solutions, concerns, and ideas for NRCS to use “in developing the best public policy for conservation of the nation’s natural resources.”

The forum is from 9:30 a.m. to 4:30 p.m. at Augustana College’s Olin Technology Center, at 639 38th Street, Rock Island.

It is the only forum to be held in Illinois.

NRCS is seeking public input on water security, climate variability, landscape integrity and other critical conservation issues as required in the federal Soil and Water Conservation Act, through six regional forums. An additional national forum is scheduled April 7-8 in Washington.

Information from those events will be compiled into the federal Resources Conservation Act Appraisal 2011 (RCA) for submission to Congress in preparation for farm bill debate.

The Rock island forum will

begin with review of the RCA process, segueing into water security discussions at 10 a.m.

After an 11:30 a.m. lunch, NRCS will address climate concerns and, at 2:30 p.m., landscape integrity issues.

The event is organized by NRCS in collaboration with the Farm Foundation and the American Farmland Trust.

There is no charge to participate, but registration is required to ensure adequate seating. Register online at {www.farmfoundation.org}.

For more information, call 630-571-9393.

Carden of Monsanto. Those include reduced-refuge products such as Monsanto’s SmartStax or Syngenta’s AgriSure Viptera and new “refuge-in-a-bag” products such as Pioneer’s AcreMax which offer an IRM-compliant mix of Bt/non-Bt seed.

Carden stressed the need for growers to understand requirements associated with new products “as we bring them to commercialization.”

“Growers have a lot of choices today with unique IRM requirements, which can complicate their refuge planning strategies,” Smith told FarmWeek and RFD Radio.

“It’s encouraging to see compliance results are stabilizing. At the same time, there are improvements that should be addressed.”

Under new CAP terms, onfarm compliance assessments will be conducted by an independent third party, focusing on areas with the highest resistance development risks and growers who did not buy sufficient

refuge seed from a Bt corn registrant.

Growers found to be out of compliance now face a higher probability of losing access to Bt corn if compliance is not established and maintained, and those farmers will be checked more frequently by registrants.

Seed bag tags will better depict refuge size requirements.

Smith urged growers to consult seed dealers or sales agents about refuge size and distance requirements for individual products. The National Corn Growers Association’s online IRM “calculator” {www.irmcalulator.com} helps growers calculate appropriate refuge, the quantity of standard seed bags to buy for both trait and refuge, and possible product-specific planting configurations.

“We want to make sure compliance is taken seriously,” Carden maintained. “It’s very important for us to maintain trait durability of Bt corn traits for the future.”

Group seeks to study biochar uses before biomass byproduct debuts

BY KAY SHIPMAN FarmWeek

Illinois researchers and others are working to learn about possible agricultural uses for a new byproduct from the production of bio-oil and syngas.

“As we ramp up biomass production of bio-oil or syngas, the low-temperature, low-oxygen process produces biochar,” said Duane Friend, a University of Illinois Extension educator in natural resource management.

While giving recent presentations about biochar, Friend said he learned few people have heard of the substance or its possible uses.

Friend is a member of the Illinois Biochar Group that is working for research into the production and uses of the byproduct.

More information is available online at {www.biochar-international.org/regional/Illinois}.

Biochar is a high-carbon, fine-grained, porous material produced from biomass using low temperatures and low-oxygen combustion, according to Friend. The material is different from charcoal, which is from produced from heat and mainly used as a fuel.

“One reason we are interested in biochar is as a soil amendment, but it’s not new and has been used by other cultures,” Friend added.

Historians have found evidence that ancient Amazonian civilizations used biochar, and the dark soils are still productive 500 years later, according to Friend.

Biochar helps increase the soil’s nutrient retention and increases its water-holding capacity, Friend explained. “It (biochar) is a stable organic compound that sticks in the soil and doesn’t degrade,” he added.

“There is still a lot of research needed — the best way to use it, the chemical and physical properties, the best form and the best way to apply it (to soil),” Friend continued.

The Illinois Biochar Group’s goals include research to establish standardized biochar production methods and to understand how to produce biochar that is beneficial for agricultural uses without any adverse affects on crops or the environment.

For more information about biochar or the biochar group, Friend recommended individuals contact Nancy Holm, the sponsored research coordinator at the Illinois Sustainable Technology Center at the U of I in Urbana-Champaign. She may be reached by e-mail at nholm@istc.illinois.edu or by phone at 217-244-3330.

Page 9 Monday, February 28, 2011 FarmWeek

FROM THE COUNTIES

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ARROLL — Carroll, Ogle, and Winnebago County Farm Bureaus will sponsor a bus trip Friday, April 8, to the Case IH plant, Racine, Wis. The bus will leave the Winnebago County Farm Bureau at 7 a.m. and return by approximately 4 p.m. Cost is $27, which includes transportation, tour, and lunch. Call the Farm Bureau office at 815-2443001 for more information.

• Carroll, Jo Daviess, and Stephenson County Farm Bureaus will sponsor a Northwest Illinois Wine Trail Saturday, March 19. Tickets are $25.

Call the Farm Bureau office at 815-244-3001 or visit the website {www.carrollcfb.org} for more information.

• The Carroll County Farm Bureau Foundation will award five $1,000 general ag and one $1,000 Harold Schmidt Memorial scholarships. Applications are available at the Farm Bureau office or on the website {www.carrollcfb.org}. Deadline to return the applications is March 24.

HAMPAIGN — A Viewpoint meeting will be at 7:30 a.m. Tuesday at the Market Street Eatery, Sadorus.

Breakfast will be served. Call the Farm Bureau office more information.

FFINGHAM — The Commodities and Marketing Action Team will sponsor a workshop on options and futures at 7 p.m. Monday (today) 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 a 217-3422103 or e-mail ecfbmgr@consolidated. net for reservations or more information.

• The Local Affairs Action Team will sponsor an on-theroad seminar at 7 p.m. Wednesday 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 email ecfbmgr@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 (today) for reservations or more information.

• The annual meeting will be at 6:15 p.m. Monday, March 14, at the Teutopolis Knights of

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Columbus building. A pork barbeque and chicken dinner will be served. Cost is $3. Call the Farm Bureau office by Friday for reservations or more information.

ANCOCK — Farm Bureau will sponsor an economic and weather outlook meeting at 6 p.m. Monday, March 7, at the Marine Bank and Trust. Parry Dixon, ADM economist, and Jim Angel, state climatologist, will be the speakers. Dinner will be served.

Call the Farm Bureau office at 217-357-3141 for more information.

ASALLE — The LaSalle County Farm Bureau Foundation has two $1,000 scholarships available.

One will be awarded to a high school senior who will enroll in an ag-related field of study and one to a current college student enrolled in an ag-related field of study. Deadline to return applications is Friday, March 25. Call the Farm Bureau office at 815-433-0371 or download an application from the website {www.lasallecfb.org}.

• The LaSalle County Stockman’s Association will sponsor the “March Thaw II” program at 6 p.m. Wednesday at Pitstick Pavilion, Ottawa. Dinner will be served. Topics will include herd health, mineral program and show feeds, and Pfizer products. Call Terry Patyk at 815-488-1371 or Dave Isermann at 815-257-0110 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 nonmembers. Call the Farm Bureau office for more information.

ADISON — The annual meeting will be at 7 p.m. Friday at the American Legion Hall, Edwardsville.

Call the Farm Bureau office at 618-656-5191 for reservations or more information.

ERCER — Farm Bureau will sponsor a federal crop insurance and 2012 farm bill meeting at 11 a.m. Wednesday at the Farm Bureau office. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Lunch will be served. Call the Farm Bureau office at 5825116 for more information.

• In celebration of Ag Week, Farm Bureau will host a food drive March 14-18. Members may drop off their donations to the Farm Bureau office from 8 a.m. to 5 p.m. that week.

Members will receive a chance to win a $50 gift certificate to

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Liberty Station Steakhouse for every item they donate. Call the Farm Bureau office at 5825116 for more information.

ONTGOMERY — The Prime Timers will meet at noon Wednesday, March 16, for a luncheon meeting. A corned beef and cabbage meal will be served. Cost is $8. Mike Plunkett, Montgomery County board chairman and senior editor of The Journal News, will be the speaker. Call the Farm Bureau office at 217-532-6171 for reservations or more information.

ERMILION — 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

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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.

AYNE — Farm Bureau will sponsor a crop insurance meeting at 7 p.m. Tuesday at Frontier Community College Foundation Hall, Fairfield. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will be the speaker. Call the Farm Bureau office at 618-842-3342 for reservations. Visit the website {www.waynecfb.com} for more information.

• The annual meeting will be at 6 p.m. Friday, March 11, at the Cumberland Presbyterian Church, Fairfield. The Young Leader Committee will collect non-perishable food donations for the Harvest for All campaign, as well as hold a drawing in the raffle for an Echo CS360 chainsaw. Call the Farm Bureau office at 618-842-3342 for reservations by Friday. Vis-

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it the website {www.waynecfb.com} for the complete notice of the annual meeting.

• The Young Leader Committee is raffling off an Echo CS-360 chainsaw to raise funds for its collegiate scholarship and safety day. Tickets are $5 and may be purchased at the Farm Bureau office or from a Young Leader member. The drawing will be during the annual meeting March 11. The chainsaw was donated by McLean Implement Inc., Albion.

HITE — Farm Bureau will sponsor a crop insurance meeting at 1 p.m. Tuesday 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 628-382-8512 for reservations. Visit the website {www.whitecfb.com} for more information.

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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.

“WHY DO WE USE FS?”

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“Trust, dependability and solutions.

We’ve been working with FS for over 30 years. They’re a part of our root system.

Spring, summer and fall, they always come through with good direction and good advice. With their nutrient management plans and variable rate technologies, we’re less wasteful, more environmentally friendly and more profitable.

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Why do we use FS?

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At the end of the day, it’s about working with someone you trust.”

Stan & Willis Kelsey Corn and soybean growers

THE LOCAL ANSWER TO YOUR WORLD OF NEEDS.™

©2010 GROWMARK, Inc. A12338B

FarmWeek Page 10 Monday, February 28, 2011

PROFITABILITY

U.S. economy continues to show steady improvement

BY JIM CHARLESWORTH

The global economy contracted in 2009 for the first time in more than 60 years.

The highly integrated world financial, product, and service markets have provided a conduit to rapidly transmit recessionary pressures throughout the global economy.

Global gross domestic product (GDP) grew 3.9 percent in 2010 and is forecast to advance another 3.5 percent in 2011.

The global economy continues to advance at an uneven pace, led by strong growth in developing economies as the developed economies of the United States and Europe continue to face slower growth prospects, weaker labor markets, and difficult political decisions regarding the future trajectory of government spending and taxation.

On the other hand, economic growth in most developing countries continues to lead growth in world GDP.

The BRIC countries (Brazil, Russia, India, and China) remain strong. These four developing countries represent 42 percent of the global population and 12 percent of the global economic output.

The United States officially entered a recession in December 2007. Recovery has been sluggish but steady. U.S. economic output finally regained the level reached prior to the recession as growth sped up on stronger consumer spending and exports.

Consumer spending alone represents more than 70 percent of the total economic output.

U. S. GDP grew at 2.9 percent in 2010 and is forecast to expand 3.1 percent in 2011.

The economy has grown for six consecutive quarters, averaging 3.3 percent, right in line with the historical average.

The economic expansion has been fueled by a jump in consumer spending, a crucial change from earlier in the

recovery when growth relied heavily on business investing and rebuilding product inventories.

Tax cuts and employment gains should spur additional growth. The extension of the Bush era tax cuts for two years and the 2 percent reduction in payroll taxes this year are expected to boost consumer spending to 3.2 percent, compared with 1.8 percent in 2010.

The average unemployment rate is expected to drop slightly during 2011.

No question the economic outlook still faces some ominous clouds. Some economists are concerned that the yearend consumer spending splurge could fizzle.

The most challenging economic indicator centers around the historically high unemployment rate, currently at 9 percent. Collapse of the housing market is another major contributor to the slowdown, although recent indica-

tors are showing stabilization with slight improvement.

Jim Charlesworth is GROW-

MARK’s soon to retire marketing research director. His e-mail address is jcharlesworth@growmark.com.

Midwest farmland value jumps 12 percent in 2010; trend looks to continue

BY DANIEL GRANT FarmWeek

The most recent farmland value survey conducted by the Federal Reserve Bank of Chicago confirmed what many farmers and landowners have experienced at auctions in recent months.

Midwest farmland values in 2010 rose dramatically, and so far this year the trend shows no signs of slowing down.

Farmland values in the Seventh Federal District, which includes Illinois, Indiana, Iowa, Michigan, and

M A R K E T FA C T S Feeder pig prices reported to USDA* Weight 10 lbs.

40 lbs.

50 lbs.

Receipts

Range Per Head Weighted Ave. Price $33.00-58.00 $45.84 $77.98-78.50 $78.23 n/a n/a This Week Last Week 25,214 24,563 *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 $80.41 $79.06 $59.50 $58.50

Change 1.35 1.00

USDA five-state area slaughter cattle price Steers Heifers

This week 110.83 110.70

(Thursday’s price) Prv. week Change n/a n/a n/a 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 128.78 -0.18

This week 128.60

Lamb prices n/a

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 2-17-11 41.0 31.0 38.1 2-10-11 35.5 24.9 27.5 Last year 42.9 20.3 42.8 Season total 1100.0 842.0 776.6 Previous season total 1072.0 604.9 772.6 USDA projected total 1590 1300 1950 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Wisconsin, increased last year by an average of 12 percent. It was the secondlargest increase in farmland values in the past 30 years.

“Overall, 2010 was a stellar year for agriculture in the Midwest,” the Federal Reserve Bank stated in its report.

Since 1976, the only year there was a larger increase in Midwest farmland values was 2007.

The state with the largest increase in the value of “good” farmland in the Seventh Federal District last year was Iowa, at 18 percent.

Elsewhere, the increase in “good” farmland value in 2010 totaled 12 percent in Indiana, 11 percent in Illinois, 7 percent in Wisconsin,

FarmWeekNow.com To learn more about Midwest farmland values, go to FarmWeekNow.com.

and 4 percent in Michigan.

A surge in commodity prices last year was the primary driver of land prices, according to the Federal Reserve Bank.

Cash prices last year increased by 57 percent for corn, 27 percent for soybeans, 24 percent for cattle, and 16 percent for hogs, according to the bank’s Agricultural Newsletter.

Meanwhile, Midwest ag credit conditions strength-

ened in the fourth quarter of 2010.

Interest rates decreased to an average of just 5.85 percent for operating loans and 5.7 percent for farm real estate loans while the average loan-to-deposit ratio dipped to a seven-year low.

The outlook for agriculture prices this year looks bright as well. USDA recently projected a 20 percent increase in net farm income.

However, farm income and farmland prices could take a hit if interest rates rise or if a Treasury debtbuying program to stimulate the economy creates financial imbalances at that are negative to ag, warned Thomas Hoenig, president of the Federal Reserve Bank of Kansas City.

“History has taught us

that it is nearly impossible to determine how much of the farmland boom may be an unsustainable bubble driven by financial markets and how much results from fundamental changes in demand and supply conditions,” Hoenig testified before the Senate Ag Committee.

“Rising interest rates often coincide with falling farm revenues and higher capitalization rates, a depressing combination for farmland values.”

Up next, the Illinois Society of Professional Farm Managers and Rural Appraisers will release results of its annual farmland value survey on March 15 and 16 at the group’s Illinois Land Value Conference at the Parke Hotel and Conference Center in Bloomington.

FarmWeek Page 11 Monday, February 28, 2011

PROFITABILITY Corn Strategy

C A S H S T R AT E G I S T Plantings/crops coming into focus USDA’s “best estimate” for the 2011/12 supply/demand structure at its Outlook Forum will serve as the baseline from which the trade will develop its own forecasts for the 2011/12 fundamental structure.

The surprise of these initial estimates may have been they projected even smaller ending stocks than they did on the baseline forecasts released two weeks ago. They still aren’t at levels tight enough to warrant higher prices than those the markets experienced over the last three weeks. But they clearly suggest there’s no margin for error this growing season.

At this writing, the full scope of the forecasts aren’t available, but the basic numbers released last week, offer an insight into the basic structure with which they started.

USDA analysts stayed close to the acreage numbers used in the baseline estimates.

It should be noted the planting numbers they used are still not based on any survey, so there will be some skepticism regarding their validity.

They increased total plantings of the eight major crops nearly 10 million acres from last year.

On first glance, it looks as though they are taking a conservative stance, given the acreage available and the higher price levels.

As we outlined a couple of weeks ago, plantings of all crops

Basis charts

declined 8.3 million acres in primary corn-producing areas from 2008 to 2010. Factor in a potential 2.5-million-acre increase in double-crop soybean plantings, and there’s at least nearly 11 million more acres available to be planted this year. And history has proven that when producers are offered exceptional profits, they plant a lot of acres. This year’s insurance guarantees offer that exceptional profit opportunity.

USDA projected a 13.73-billion-bushel corn crop, a 3.345billion-bushel soybean crop, and a 2.08-billion-bushel wheat crop.

It looks as though analysts used yields close to 160-161 bushels for corn, 43.4 bushels for soybeans, and 42.5 bushels for wheat to reach those projections. We estimated what they used for harvested acreage to calculate yields. The actual data should come after FarmWeek went to press Friday.

The demand and ending stocks estimates may be even more important. The 865-million-bushel corn, 160-millionbushel soybean, and 663-million-bushel wheat ending stocks estimates were smaller than the baseline projections, particularly the corn number.

None is large enough to allow for significant crop problems this growing season. At the same time, none is tight enough to support prices at current levels if the crops end up as big as projected.

We think it’s reasonable to expect production could exceed these estimates by a modest amount. And, if world crops are improved this year, export demand could fall short of the projections used to build these estimates, except maybe for soybeans. The end result could be slightly larger ending stocks.

Short term, these numbers aren’t strong enough to generate significant buying interest. But the uncertainty will keep prices generally strong into the early part of the growing season, unless planting numbers are higher than USDA is expecting.

Even then, they aren’t strong enough to prevent prices from breaking hard if something triggers more speculative liquidation.

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Cents per bu.

2010 crop: Like other grains, trading fund liquidation hit prices hard, leaving a shortterm negative technical picture. If May futures slip under $6.62, the decline could extend to $6 to $6.10. The probable timing would be the 40-week low due in late March. Given the break, the argument to hold only “gambling bushels” got stronger. If you hold more, use rallies to make sales.

Hedge-to-arrive (HTA) contracts for winter/spring delivery are still the best tool.

2011 crop: Even though downside risk has grown, hold sales at 30 percent. There should be another good selling opportunity after the 40-week cycle bottoms, but not one that will necessarily be as high as the recent peak.

Fundamentals: USDA’s “first shot” at next year’s fundamentals pointed to a picture a little less tight. We think the high insurance guarantees ensure a big planting unless planting is extremely late. And a good yield is still far from secure.

Soybean Strategy 2010 crop: Estimates for the South American crops continue to grow. Harvest is a little behind last year, but not average. South American supplies will enter the world pipeline in three to four weeks, rapidly diminishing our exports. Without a weather problem, lower prices are ahead. Wrap up sales on strength.

2011 crop: The first newcrop supply/demand forecast isn’t negative, but the ending stocks still could increase for a variety of reasons. Given the recent break, we think it important to use strength to get sales up to 30 percent.

Plan to increase them to 50 percent by early summer.

Fundamentals: Even with the initial relatively tight new-crop supply/demand forecast, a lot of unknowns persist. First and foremost is the acreage that will be planted this year, and we can build a scenario that it will be even larger. At the same time,

there’s risk demand will fall short of expectations, especially given current prices.

Wheat Strategy 2010 crop: Liquidation from the big trading funds turned the wheat market lower.

Prices on the Chicago May contract took out key support.

The next support doesn’t come until $6.91. If you still have inventory, use rallies to wrap them up. Because of the futures carry, HTA contracts for winter/spring delivery are still the best marketing tool.

2011 crop: Use rallies above $8.30 on Chicago July

2011 futures for catch-up sales.

We’ve considered adding to them, but don’t want to until the crop breaks dormancy.

And once the liquidation break is over, there should be another good rally for sales. We still generally prefer HTA contracts.

Fundamentals: Political unrest in Africa and the Middle East can affect export business. The Chinese drought area continues to subside. But USDA’s initial 2011 wheat crop projection of 2.08 billion bushels doesn’t leave much “margin for error,” either.

FarmWeek Page 12 Monday, February 28, 2011

PERSPECTIVES

ExplorACES

Students, connect with your future at College of ACES I remember my first visit to the University of Illinois like it was yesterday.

It was early on a Friday morning and I was excited to be missing a day of school. Although, I was not so excited about attending yet another college open house.

I had experienced a number of career fairs and open houses. They were all the same –- boring. But my parents assured me that ExplorACES at the U of I, College of Agricultural, ELLEN REEDER Consumer, and Environmental Sciences (ACES), would be different.

Little did I know that by the end of the day I’d be convinced to spend four years at the U of I. As an anxious, excited high school junior, I set foot on campus for the first time and suddenly felt nervous. I was scared to open my mouth and talk to the students and advisers, and instead made my parents do all the talk-

Jenny Neef, left, career services coordinator at the University of Illinois’ College of Agriculture, Consumer, and Environmental Sciences (ACES) chats with visiting high school students at ExplorACES 2010. (Photo courtesy of the U of I College of ACES)

ing for at least the first half hour.

I soon realized the students and advisers didn’t want to talk with my parents. They were interested in talking with me. After all, I was the one who should be deciding my future.

The students, who were there to help me learn about the College of ACES, had been in my shoes just a few short years ago. They knew how I felt.

I ended the day with a smile on my face. My head spun with excitement about all of the opportunities I could take advantage of during my four years at a student at the U of I College of ACES. Fast forward to now.

As a second-semester freshman in ACES, I can’t imagine being anywhere else. It is because of the wonderful experiences I’ve had so far that I hope to share my story and enthusiasm with prospective ACES students at ExplorACES 2011 on March 11 and 12.

ExplorACES is designed for students and coordinated by students.

Our dedicated team has been planning this event since September. It’s nothing

ordinary — trust me.

Once on campus, prospective students and their families will find themselves engrossed in conversations with students and dedicated advisers who are passionate about the College of ACES. While you’re here, take time to visit the exhibits that you find interesting, ask questions, and learn as much as you can to help you connect with your future.

You will get honest answers from the students and learn about scholarships, housing, majors, and college life in general.

No matter what your career interests are, I can guarantee there is something for you at ExplorACES. From among the Illini Pullers’ “tricked-out” tractor, horticulture students demonstrating flower arranging, and the fistulated cow — something will catch your eye!

I hope you’ll also take a break and enjoy a meal at the ACES food tent.

ACES students will be serving food and visiting with families, offering another opportunity for you and your family to ask questions.

At ExplorACES, you’ll meet current students who will share their experiences with you and explain why they chose the College of ACES. Between the outstanding scholarships, undergraduate research opportunities, leadership development, outstanding faculty, or the feeling of the “ACES family” within the larger university — our college is a unique experience.

This year, I’ve made connections with so many people and had experiences that I never would have found in an ordinary classroom. But don’t take my word for it, experience the College of ACES for yourself!

Mark your calendars for March 11-12 and come to the U of I to experience ExplorACES. I am sure you will be impressed with the ACES atmosphere and abundant opportunities. Hope to see you there!

Ellen Reeder of Little York is a freshman studying agricultural communications with a focus on advertising.

A tribute to President Reagan from his agriculture secretary The country recently marked what would have been President Ronald Reagan’s 100th birthday.

His Feb. 6 birthday was celebrated in California at the Ronald Reagan Museum, in Tampico, Ill., where he was born, in Dixon, Ill., where he was raised, and here in WashJOHN ington, D.C., at BLOCK the Ronald Reagan Building. I attended the latter event.

The crowd was filled with individuals who worked for him along with many admirers who probably wished they had.

Before he selected me to serve as his secretary of agriculture, I didn’t know Ronald Reagan. But with the support of then-Sen. Bob Dole and then-Gov. Jim Thompson, I was invited in late December to meet with President-elect Reagan.

I flew to Los Angeles, checked in at my hotel, and went straight to the home of President and Mrs. Reagan.

Nancy opened the door and welcomed me. That first meeting included Ed Meese, Reagan’s closest adviser; Marty Anderson, his economic adviser; and Mike Deaver, his deputy chief of staff.

We spent two hours discussing everything about gov-

ernment’s role — not so much on farm programs. A fortunate thing for me is that I was the only one in the room that really knew agriculture.

I remember Senator Dole had told the president that he wanted a “hands-on farmer from the heartland.”

Ronald Reagan The president reached out to me to get to know me, to know my philosophy of government, and how I visualized the role of the secretary of agriculture.

The meeting concluded, and I returned to the hotel.

Within 30 minutes, the phone rang.

The caller said, “This is Ronald Reagan, and I would like for you to serve as my secretary of agriculture.”

I was stunned. I just said, “Mr. President, I would be proud to serve.” I really had no idea what I was getting into.

That first meeting with President Reagan told me two things about the president. He was guided by philosophy and instinct.

He concluded that my philosophy was consistent with his — and it was. We both believed in smaller government, less taxes, and less regulation.

The second thing was he made many important decisions based on instinct. He didn’t really know me, but instinct told him I would be OK. His leadership and optimism lifted the country.

Remember he told us, “The best days are still to come for this shining city on the hill.”

The United States of America was blessed to have had Ronald Reagan’s leadership at that critical time.

John Block, a Gilson native and former U.S. agriculture secretary in the Reagan administration, is a senior policy adviser with the Washington, D.C., firm of Olsson, Frank, Weeda, and Terman. His e-mail address is jblock@ofwlaw.com.