An egg proDucer from Northeastern Illinois fears a proposal to nearly double cage space for hens will significantly boost egg costs. .....................................................2
Lock upgrADes, approved in 2007, are still waiting for Congress to provide construction funding. One river spokesman hopes this is the year. ............................................4
WHILe sAYIng he sees a cor rection coming, a far mland expert is predicting land prices should remain strong for some time to come. ..................................7
Monday, July 25, 2011
Two sections Volume 39, No. 30
Heat wave plows into corn, soybean country Crop conditions deteriorating BY DANIEL GRANT FarmWeek
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The hot, dry pattern that has persisted for months in large areas of the South and Southern Plains last week paid an unwelcome visit to the Corn Belt. High temperatures for much of the week in Illinois and surrounding states hit the high 90s to 100-plus degrees, with heat index ratings as high as 110 to 120-plus degrees. “This heat is the result of what we saw in the Southern Plains for much of the past year, in terms of really hot and dry conditions that have caused a terrific drought problem (there),” Bryce Anderson, DTN ag meteorologist, said last week. “It started to move into the Midwest. We expected that at some point.” USDA last week lowered the portion of the crops rated good to excellent from 69 percent to 66 percent for corn and from 66 percent to 64 percent for beans. Meanwhile, the portion of
the crops rated poor or very poor last week increased 2 percent to a total of 11 percent for corn and 10 percent for beans. Some of the corn crop blown over in heavy winds two weeks ago had righted itself and was pollinating, although harvest will still be a challenge. “The expansion of hot weather to much of the Corn Belt ... raises additional concerns about corn yield,” said Darrel Good, University of Illinois ag economist. “The high temperatures in the Corn Belt are occurring during the reproductive stage for a large portion of the crop.” Anderson predicted the heat wave will relax this week and temperatures won’t be quite as stressful. However, a lack of moisture is becoming an increasing concern.
“There’s a large stretch (of the Corn Belt) from eastern Iowa, though much of Illinois, and all the way to Pennsylvania that the last 30 days is well below 50 percent of normal rainfall,” Anderson said. The short-term forecast as of last week showed a better chance of rain in Northern Illinois with less of a chance of any significant moisture in the southern two-thirds of the state. Portions of Northern Illinois did receive good rains Friday. “For now the corn market is reflecting modest concerns about the size of the 2011 crop,” Good said. “Prices will continue to reflect weather conditions, weather forecasts, and crop conditions ratings.” Matt Kilgus, a farmer and IFB Young Leader from Livingston County, said his crops still are on pace to yield well if
Corn rolling its leaves to preserve moisture was becoming a common sight last week as the Midwest heatwave persisted. (Photo by Ken Kashian)
the farm receives timely moisture. “If we can catch a couple good rains, we’ll be looking at a good crop,” he said. The heat last week also had an adverse effect on the Kilgus family’s dairy herd. “We need to keep them
(cows) under cover and under fans, so we aren’t able to graze them as many hours,” he added. “We’ve done well (maintaining milk production so far this summer), but I think we’ll see a drop-off (from last week’s oppressive heat).”
Debt limit impasse heightens ag anxieties BY MARTIN ROSS FarmWeek
Congress and the White House must quickly reach an agreement over the federal debt ceiling to provide “some stability to the marketplace” and protect the U.S.’ global credit rating, Illinois Farm Bureau President Philip Nelson admonished last week. House Speaker John Boehner (R-Ohio) told Republicans Friday the House must pass legislation to lift the nation’s debt ceiling by Wednesday, though he warned no agreement had yet been reached with the White House. After Aug. 2, the U.S. government will begin defaulting on its debt unless it raises the current $14.3-trillion debt limit, but Republicans have insisted on trillions in spending cuts as a condition of lifting that limit. IFB and nearly three dozen national ag groups last week called for a comprehensive approach to federal deficit/debt management, including across-the-board cuts that do not disproportionately penalize ag programs. According to IFB, lawmakers should credit the ag budget for recent “deep spending cuts” already made and respect “the authori-
ty of the House and Senate agriculture committees to write the next farm bill.” Further, IFB’s statement stressed Illinois farmers are “very interest rate-sensitive,” and urged lawmakers to consider any deficit/debt plan’s impact on rates. Despite last week’s continued impasse, Nelson was cautiously optimistic about a near-term solution. “I think, deep down, both parties would like to see us resolve this and get on with the debt ceiling vote,” he said. American Farm Bureau Federation chief economist Bob Young sees potentially serious consequences immediately if Congress can’t reconcile debt issues. Nelson fears failure to raise the debt limit could spark “calamity in the bond markets” and higher ag and consumer interest rates. Further, when a nation lapses into a state of debt default, “It is never viewed the same by the markets ever after,” Young stressed. He noted current ripples across the debt-ridden states of the European Union (EU). Greece is paying interest rates 6-8 points higher than Germany’s to service its debt, and thus is viewed as “a much more risky proposition” in global markets,
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Young said. U.S. default, even on paper, “sends a strong signal to the global economy that we can’t control our spending,” Nelson said. “On Aug. 3, (the government) is supposed to be writing something in the neighborhood of $30 billion in checks. I think expected (federal) receipts for Aug. 3 are only about $12 billion. “Right away, you have a shortfall. Somebody’s not going to get paid,” Young advised in an RFD Radio-FarmWeek interview. He noted more than $400 billion in U.S. Treasury notes could come due in August alone. If the market “gets a little bit jittery” and interest rates subsequently climb even a half to two points, “that adds up to some cash” in terms of added debt obligation, he said. The U.S.’ debt crisis has sparked fundamental partisan debate over excessive spending vs. a perceived need to ramp up tax revenues. Young reported revenues today are at “some of the lowest percentages we’ve seen Jacklyn Detig, Lindenwood.since the second World War.” Meanwhile, spending has reached nearly 24-25 percent of gross domestic See Debt, page 2
Illinois Farm Bureau®on the web: www.ilfb.org