FarmWeek June 21 2010 by Illinois Farm Bureau

UNIVERSITY OF ILLINOIS Extension will be different after the current reorganization, but it will continue helping Illinois residents solve their problems. ...........3

ETHANOL IS MAKING a comeback, but a number of things, including an “international land use wall,” could stunt future growth potential. ..........................................4

THE OHIO LIVESTOCK industry is preparing for another ballot challenge from the Humane Society of the United States (HSUS). ...............................................8

Monday, June 21, 2010

Two sections Volume 38, No. 25

Hope not lost for biodiesel credit extension? BY MARTIN ROSS FarmWeek

The biodiesel industry again was disappointed last week as Senate leaders balked at attempting to move a huge, long-delayed federal tax extenders bill. Senate Majority Leader Harry Reid (D-Nevada) determined he would be unable to garner votes needed for “cloture,” a process that limits new amendments and allows 30 hours of debate over the controversial extenders bill. The

measure includes retroactive extension of a $1-per-gallon biodiesel blenders tax credit that expired Jan. 1.

FarmWeekNow.com Listen to Matt Kaye’s latest report from Washington about the tax extenders bill at FarmWeekNow.com.

Reid withdrew his cloture measure, but later lawmakers appeared open to a deal that would trim some $20 billion from the massive package.

However, Republicans blocked what they deemed a weakened jobs bill, aided by Sens. Ben Nelson (D-Neb.) and Joe Lieberman (I-Conn.). “Don’t give up yet; things are not bleak,” Renewable Energy Group (REG) spokesman Alicia Clancy nonetheless told FarmWeek. REG owns Danville’s former Blackhawk Biofuels biodiesel plant. The credit is a key incentive for fuel distributors to purchase biodiesel, and a number

Sobering future previewed on the state budget front BY KAY SHIPMAN FarmWeek

Periodicals: Time Valued

No one could blame Illinois Agricultural Legislative Roundtable members last week for feeling downcast after presentations about the state’s budget and fiscal outlook. Many agriculture programs won’t know how much money they’ll have to spend until Comptroller Dan Hynes certifies the state’s debt by July 8, Illinois Agriculture Director Tom Jennings told

assembled ag leaders in Springfield. “So until we get a benchmark by July 8, we don’t know what appropriation will be available for the Illinois Department of Agriculture (IDOA) Tom Jennings and its partners,” Jennings added. “It’s a budget in motion until we figure it out.” Jennings’ report on the current fiscal year was just as sobering. Until June 11, two-thirds of the Soil and Water Conservation Districts (SWCDs) hadn’t received any funding for operations, while the remaining third had received only two-thirds of their operations budget, according to Jennings. “The odd man out is the University of Illinois (Extension). They’ve received zero dollars,” Jennings said. Although the director said he’d been talking with the interim head of Extension about the situation, he added, “There’s no good news yet, but I’m working on it.”

The ag director also warned some entities waiting for state funding may have to continue waiting. Lapse-period spending has been extended, and those who don’t receive their funding in the current fiscal year may receive it in the future, Jennings offered. The state uses lapse-period spending to carry over bills from one fiscal year to the next. Usually, lapse-period spending occurs during the first 60 days of the fiscal year from prior appropriations. Some people have been waiting even longer than that for their money. Jennings noted the state is finally paying the horse race winners from the 2009 DuQuoin State Fair. The director urged nonagency programs that receive funding through IDOA’s budget to work together and not fight among each other over a lump-sum appropriation that was less than was sought. “We need to keep it going and sustained until the economy turns around and we can make good things happen,” Jennings said. See Budget, page 3

FarmWeek on the web: FarmWeekNow.com

of plants nationwide have been forced to lay off workers or shut down over the last six months. Iowa Renewable Fuels Association Executive Director Monte Shaw argued that “instead of kicking tar balls on beaches, President Obama ought to be kicking the backside of Congress to reinstate the biodiesel tax incentive.” Compromise proposals on the Hill include funding extenders through higher per-barrel taxes on the oil industry — a current target for the administration and Congress amid the Gulf oil spill. While Medicare funding issues dominated Senate discussions, Clancy was hopeful bipartisan negotiations eventually could generate the 60 votes necessary for cloture and

action on extenders. As Obama pushed for green energy development in the face of the Gulf disaster, National Biodiesel Board CEO Joe Jobe warned “further inaction by Congress ... is causing the loss of jobs every day, derailing investment in its first successful advanced biofuel.” That impact was a key point of concern for ethanol producers gathered last week in St. Louis and facing year-end expiration of a similar ethanol credit. “This is absolutely all about the politics and nothing to do with biodiesel,” Clancy said. “We’re lost in the midst of a giant political process. We’re a leaf in the forest, a teeny-tiny fly on a buffalo. But it looks like things are making some progress.”

CARING MESSAGE

Traffic whizzes by one of two pro-livestock billboards that have been erected along Interstate 80 near Ottawa through the efforts of the Illinois Farm Bureau Public Relations Action Team. The billboards, one eastbound at mile marker 94 and one westbound (shown here) at mile marker 102, will remain up until August. (Photo by Ken Kashian)

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

FarmWeek Page 2 Monday, June 21, 2010

INDUSTRY

Quick Takes BIOMASS CONFUSION — Mainstream media outlets have largely misinterpreted a biomass sustainability and carbon policy report released this month by the Manomet Center for Conservation Sciences, according to the Pinchot Institute for Conservation, a study contributor. The rapidly spreading assertion that woody biomass is dirtier than coal “couldn’t be farther from the truth,” Pinchot President Al Sample told reporters last week. The six-month study, “Biomass Sustainability and Carbon Policy Study,” addressed social, scientific, economic, and technical issues related to use of forest biomass for generating energy in Massachusetts. The Massachusetts Department of Energy Resources commissioned the study in the wake of activist opposition to three proposed biomass power projects in the state. LAWSUIT FILED IN ELEVATOR FAILURE — Denver-based CoBank has filed a lawsuit against a Livingston County farmer who allegedly was advanced or borrowed more than $13 million from a McLean County elevator before it failed, according to “The Pantagraph.” On May 10, the Illinois Department of Agriculture (IDOA) suspended the grain dealer and warehouse licenses of Towanda Grain Co. Two weeks later, Evergreen FS bought the elevator’s assets and reopened the business. According to a lawsuit filed last week in federal court, CoBank is seeking more than $4.6 million from Bob Printz, claiming that Printz still owes that amount out of the original $13 million. IDOA officials had no comment on the lawsuit, but are continuing their investigation into the elevator’s failure. CHESAPEAKE COMPROMISE — In the face of potentially stern regional regulations, the American Farm Bureau Federation (AFBF) supports a bipartisan bill introduced by U.S. Reps. Tim Holden (D-Penn.) and Bob Goodlatte (R-Va.) that seeks to address water quality in the Chesapeake Bay. AFBF President Bob Stallman said the Chesapeake Bay Program Reauthorization and Improvement Act, House Resolution 5509, is “a commonsense approach to help agriculture, business, states, and local governments within the Chesapeake Bay watershed work together to improve water quality.” Stallman said the bill is a reasonable and bipartisan solution farmers can support. AFBF fears U.S. Environmental Protection Agency rules for the East Coast watershed could serve as a template for farmers across the U.S. Stallman said HR 5509 provides important incentives to farmers to implement additional environmental best management practices that go above and beyond minimum state regulatory compliance requirements. “Those incentives, like interstate nutrient trading opportunities and an environmental assurance program, not only will help farms but also will benefit communities in the bay’s watershed,” Stallman said.

(ISSN0197-6680) Vol. 38 No. 25

June 21, 2010

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

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GROWMARK CEO to retire; reflects on lengthy career BY KAREN JONES

Two weeks before Bill Davisson was set to graduate from the University of Iowa with an accounting degree, Vietnam War protestors detonated a bomb in downtown Iowa City. University officials told students if they were concerned for their safety, they could end the semester with the grades they had and not take final exams. Davisson, who already had been hired as an accounting trainee by FS Services Inc., took advantage of the situation and began his 40-year career Bill Davisson with what became the GROWMARK System two weeks early. Last week, Davisson announced his intent to retire soon after Jan. 1, 2011, from the cooperative where he spent his entire career. “I like to say I made two good decisions in 1970,” he said. “I married my wife, Sue, and I accepted a job with the GROWMARK System.” During his career, Davisson held positions that include transportation accountant at the Kingston Mines, Ill., terminal; financial analyst; controller; vice president of finance; and vice president of member services before being named CEO in 1998. He earned his Certified Public Accountant designation in 1985. Over the years, Davisson witnessed many changes in both the agricultural industry and

the GROWMARK System itself. “I can remember as a child riding in a wagon with my grandfather as he was picking corn by hand. Today, tractors drive themselves,” he said. “Our telephone ring on the farm was a long and two shorts. Now we can talk to anyone anywhere with the push of a button.” Consolidation — of both farms and businesses — has driven change. In 1970, there were approximately 125 member cooperatives serving farmers in Illinois, Iowa, and Wisconsin. Today, there are fewer than 40, but many cover a much larger territory. Davisson believes the strong relationships built across all levels of the system are a lasting legacy that bodes well for the future. “First and foremost, the GROWMARK System must continue to focus on serving the needs of farmers and offer solutions to their challenges and opportunities,” he said. “By staying open to innovative growth and promoting loyalty to the cooperative structure, we will be able to spread our wings and continue to be successful.” GROWMARK Chairman of the Board and President Dan Kelley said the GROWMARK Board of Directors has formed a selection committee to implement a selection and transition process. He anticipates that process to be accomplished by Nov. 30. Karen Jones is GROWMARK’s publications and news specialist.

Congressional $$ crucial

Biofacility seen as vital tool in controlling tough diseases BY MARTIN ROSS FarmWeek

Today, no nation or even species is an island, and as “zoonotic” diseases threaten both livestock and people, a pair of leading disease scientists recommends shifting animal research from Plum Island to a new state-of-the-art facility. Re-emergence of foot-andmouth disease (FMD) in Japan and South Korea has refocused concerns about zoonoses — pathogens that can transfer between animals and humans. Development of a modern biocontainment facility is necessary, University of CaliforniaLos Angeles infectious-zoonotic disease specialist James Lloyd-Smith told FarmWeek, during a June conference on global epidemiology. A “top-level” facility such as the planned National Bio and Agro-defense Facility (NBAF) at Kansas State University (KSU) in Manhattan, Kan., would greatly help producers and health officials “mitigate risks” from increasingly dangerous pathogens, Lloyd-Smith argued. NBAF, a collaboration between USDA and the

Department of Homeland Security (DHS), would replace the Plum Island Animal Disease Center, which opened in 1954 off Long Island, N.Y. DHS deemed Plum Island’s aged facilities inadequate to meet national biosecurity needs. The 520,000-square-foot NBAF would be co-located with KSU’s Department of Veterinary Medicine and existing Biosecurity Research Institute. The NBAF site is to be dedicated in July with completion slated tentatively for 2016, but Congress has not yet locked down funds for construction of the $500 million to $700 million facility. Jerry Jaax, KSU university veterinarian and former chief of the U.S. Army Medical Research Institute of Infectious Diseases Veterinary Medicine Division, sees “many very serious threats from foreign animal diseases that would have drastic effects on our agricultural structure and economy.” While Plum Island has “served us well,” Jaax told FarmWeek the U.S. has “limited countermeasures” to combat such diseases, and NBAF would be the only major new

domestic biocontainment facility focused squarely on ag issues. “Such a facility is very important,” Lloyd-Smith said. “Technology’s changed a lot over the decades, and the science we’re able to do and the knowledge we’re able to obtain will be improved a lot by moving into a modern facility. No human endeavor, particularly scientific or technical, can be carried out at full speed in 50year-old facilities.” Given the nature of modern travel, trade, and disease dynamics, he views global coordination as crucial to fighting multi-species diseases such as FMD, avian influenza, BSE, and H1N1 (often mislabeled as “swine flu”). Jaax cites concerns not only about “naturally occurring” and accidental disease introductions, but also about the remote possibility of agro-terrorism targeting American food production. “Our world is certainly shrinking — these oceans don’t mean much to us any more as far as disease control because of the tremendous mobility we have,” the KSU scientist said.

FarmWeek Page 3 Monday, June 21, 2010

STATE

Hoeft: ‘It’s going to be a new Extension’ BY KAY SHIPMAN FarmWeek

University of Illinois Extension will be different after the current reorganization is completed, but it will continue helping Illinois solve its problems, members of the Illinois Agricultural Legislative Roundtable were assured last week in Springfield. “This is a major Bob Hoeft shift. It’s not going to be the same Extension as we knew it. It’s going to be a new Extension,” said Bob Hoeft, interim Extension director. Hoeft updated ag leaders from across the state on the restructuring

progress of local and regional Extension offices and staff changes. He estimated Extension could be facing as much as a $7.3 million funding cut in the next fiscal year. Cutting county office rent expenses is one strategy being employed. That will save some money, “but it won’t be as much as I had hoped,” Hoeft said. In addition, Extension will close all of its regional offices, the first five by the end of June. Hoeft focused on changes that Extension will make in providing information to the public. Today more people, especially youth, receive information electronically and over the Internet, he noted. While people used to travel to Extension offices for information, fewer do that now, Hoeft noted.

Instead, people call with questions or visit electronically, he added. “That doesn’t mean if someone has a question, they can’t get an answer. They can,” Hoeft said. “That doesn’t mean we won’t have personal contact (with the public), we will. But we will move information faster (electronically). “I want (Extension) to be the Google that tells them where to Google,” he said. Hoeft said Extension will become less of a meeting organization and instead will expand its work with other entities to help solve problems. Extension will emphasize programs that focus on the following initiatives: energy and the environment; food safety and food security; economic involvement; family health, financial

security, and wellness; and youth development. Most of Extension’s existing programs would apply to one of those initiatives, Hoeft said. Ruth Hambleton, a retired Extension educator in farm business management and marketing, told Hoeft: “I like what I see that you’re doing. I’d like to see more agriculture (programs), but I like what I see.” Multi-county Extension groups currently are finalizing their selection of educator specialties for their area. By July 9, the state Extension office will give local Extension councils its decision on the educator positions. Hoeft said he hoped the decisions on main office and satellite office locations will be completed by the end of September.

Nutrient summit

IEPA planning to address water nutrient issues, standards Illinois needs a strategy to address water nutrient issues, especially numerical standards for rivers, lakes, and streams, an Illinois Environmental Protection Agency (IEPA) official told the Illinois Agricultural Legislative Roundtable last week in Springfield. “I think it will be better if we come up with a strategy. We (IEPA) would be willing to engage in conversation,” said Marcia Wilhite, chief of IEPA’s water bureau. Wilhite said her agency is planning a state nutrient summit and will include municipalities, the agricultural community, scientists, and environmen-

tal groups. No date has been set, but she speculated a meeting might be scheduled in July or August. Illinois Farm Bureau and other agricultural groups will be present at the summit voicing agricultural views on the issues. Around the country, state agencies are being pressured by the USEPA to set numeric standards for nitrogen and phosphorous levels in bodies of water, Wilhite noted. She described ongoing action in the Chesapeake Bay area and in Florida. Both involve USEPA stepping in with nutrient standards and

Budget Continued from page 1 However, Illinois’ fiscal problems are due more to its tax structure than the bad economy, according to Ralph Martire, executive director of the Center for Tax and Budget. Illinois has one of the nation’s largest economies, Ralph Martire but its economic growth has lagged the nation and much of the Midwest — barely outperforming Michigan, he said. “Michigan hasn’t had a good economy since Moses,” Martire joked.

“Our problems weren’t caused by the recession; they’re long-term and structural,” Martire continued. “They were made worse (by the recession), but they’re not going to turn around when the recession is over and go back to happy times.” Martire made a case for his group’s proposal to increase the income tax rate from 3 percent to 5 percent. Illinois has one of the nation’s lowest overall tax burdens, but overrelies on property taxes, he said. He also promoted placing a tax on services, such as hair cuts and lawn care. “Services are the largest and fastestgrowing segment of our economy,” Martire said.

Vision to sponsor fiscal forum The Vision for Illinois Agriculture will sponsor a forum on fiscal integrity Aug. 3 in Bloomington. The goal is to raise awareness about the state’s financial issues and to discuss potential solutions. For more information, call the Illinois Farm Bureau president’s office at 309-557-3212.

requiring states to take action to reduce nutrient levels or face restrictions on development and other consequences. In the Midwest, Wisconsin is in the process of setting a phosphorous standard for bodies of water, and environmentalists have threatened to sue the state of Kansas because it lacks nitrogen and phosphorous water standards, according to Wilhite.

Back in 2003, Illinois attempted to develop its own water nutrient standards and even funded research by the Illinois Council on Food and Agricultural Research (CFAR). However, the research didn’t surface specific standards because many factors, including temperature and sunlight, influence problems stemming from nutrients in water, Wil-

hite explained. “IEPA has worked on standards for some time and still doesn’t have them, but many states are in the same situation,” Wilhite said. “I think a more productive approach will be to identify what actions (in Illinois) can be taken to reduce nutrients (getting into water) from all sources,” she said. — Kay Shipman

Ag educators, industry leaders discuss challenges Agriculture needs more young people to enter into ag careers, and ag educators are seeking information from ag industry to better prepare their students for those future positions. Educators and industry swapped ideas and opinions last week during a Springfield symposium sponsored by the Illinois Committee for Agricultural Education and the Illinois Leadership Council for Agricultural Education. The event coincided with a meeting of the Illinois Association of Vocational Agriculture Teachers. “We need to create the right message that resonates with young people. And we need to involve their parents,” said Vern McGinnis, retired GROWMARK executive and Vision project coordinator. The Vision strategy includes attracting an educated workforce to supply the state’s growing ag and food industry sectors. Adding to last week’s discussion was audience opinion on different topics. The real-time information was collected via electronic “clicker” devices that allowed participants to vote. The audience, which was predominantly educators, said

State Sen. Brad Burzynski (R-Clare), right, and Stephenson County Farm Bureau Secretary Steve Fricke, to Burzynski’s right, who also teaches agriculture at Freeport High School, voice their opinions on agricultural education issues using electronic “clicker” devices (Photo by Kay Shipman)

ag industry and agribusinesses need to provide more experiences and internships to help students better understand potential careers and what they require. “I have a hard time getting high school kids to make the next leap (from hearing about ag careers) to what careers are,” said Doug Falk, Cuba High School ag teacher and FFA adviser. Falk suggested representatives of agribusiness and other industries talk about potential careers in the industry at FFA

contests and workshops. Another audience member urged ag industry representatives to inform school guidance counselors, administrators, and school board members about future ag careers and the demand in certain industries. Education initiatives will help educators connect more with industry in Illinois, said Ann Reed of the Illinois Biotechnology Industry Organization (iBIO). “Agriculture is leading the charge, but we still have a lot to do,” she added. — Kay Shipman

FarmWeek Page 4 Monday, June 21, 2010

ENERGY

Ethanol coming back only to face federal ‘walls’? BY MARTIN ROSS FarmWeek

With ethanol production and exports rosy, corn prices moderating, and summer pump prices expected to climb, the sector is again a bright spot in a recession-worn economy. Now, the industry is seeking gains in plant efficiency, climatefriendly technologies, and new “co-products” that could help assure expanded market share for corn-based ethanol as an “advanced biofuel” (see page 5). However, possible expiration

of the federal ethanol blenders credit, regulation that is discouraging investment in green technology, and an “international land use wall” for corn ethanol could stunt future potential. Corn ethanol is limited to 15 billion out of 36 billion gallons of long-term U.S. biofuels use under the federal renewable fuels standard (RFS2). In a speech last week addressing the Gulf oil spill, President Obama maintained “the time to embrace a clean energy future is now.” At last

EPA blend delay ‘dereliction of duty’ Ethanol supplies are falling into place. The infrastructure is growing, with necessary equipment approvals rolling in and plans for massive upscaling under way. A lack of federal will appears to be the key obstacle to approval of new ethanol blends that could displace imported oil use and boost ethanol into its next growth phase. Biofuels groups united last week to push for U.S. Environmental Protection Agency (EPA) approval of an industry waiver allowing sale of 12 to 15 percent ethanol gasoline blends (E12/E15) nationwide. EPA is further delaying a definitive decision on so-called “midlevel” blends — “as much disappointing as it is a dereliction of duty,” according to the Washington-based Renewable Fuels Association (RFA). EPA reportedly is preparing to OK E15 only for model year 2007 and newer vehicles in September, while waiting to approve it for model year 2001 and newer vehicles later this fall. Such multi-tiered, conditional approvals “would further and unnecessarily confuse the issue,” and “for no scientifically justified reason,” RFA stated. EPA’s decision was expected in December, but Growth Energy President Tom Buis told FarmWeek the U.S. Department of Energy (DOE) was “lagging way behind” in completing E15 tests. Growth Energy’s member ethanol plants last week urged President Obama to “move quickly and end any further delay on E15, as well as support our effort to open the transportation fuels market –— with FFVs (flex-fuel vehicles) and blender pumps — to give consumers more choice.” Mid-level blend approval is seen as a key impetus to installing retail blender pumps which enable motorists to “dial up” standard E10 (10 percent ethanol), E85 blends for FFVs, or intermediate blends currently supported for FFV use. RFA President Bob Dinneen cited hopes for installation of 5,000 pumps over the next two years, while Buis seeks “to see blender pumps in every gas station within five years.” “Ultimately, what we need in this nation is flex-fuel vehicles and blender pumps, and then you put the power into the hands of the consumer,” Buis said. “They choose the blend based on the economics of ethanol and fuel mileage. That’s the way it should be: a free, open, competitive marketplace.” Rather than accept two-tiered approvals for E15, the industry supports immediate approval of E12 with later clearance of E15 after DOE has clearly documented its automotive performance and safety. Dinneen reminded FarmWeek U.S. consumers already have used blends exceeding 10 percent: EPA previously allowed blending of 2 percent MTBE — a now-banned fuel oxygenate similar to ethanol, and he sees EPA authority to clear E12 “today,” “if they’re going to continue to count the angels on the head of a pin for E15.” Meanwhile, Buis hailed Underwriters Laboratory’s (UL) safety approval for a key E85 dispensing hose and anticipated approval for blender pump equipment. Both would offer retailers “more comfort” in updating infrastructure, he said. He also applauded fellow Hoosier Sen. Dick Lugar’s (R-Ind.) proposed new energy plan, which would require flex-fuel capabilities in 90 percent of model year 2015 or later vehicles. “He has a very comprehensive energy bill, and the stuff that applies to ethanol is right on target,” Buis said. — Martin Ross

week’s Fuel Ethanol Workshop in St. Louis, Renewable Fuels Association President Bob Dinneen argued weak policies threaten the future of ethanol and the jobs and economic growth it provides. “I’m optimistic we’ll see extension of the tax incentives and other policies that have built this industry,” Dinneen told FarmWeek. “We’re just too darned important at this point. “Ethanol now represents 10 percent of the U.S. motor fuel market. Without it, what are you going to do? You going to import more oil? You going to look at (petroleum deposits in) tar sands? You going to find someplace deeper in the Gulf that’s not leaking to get your oil? I don’t think so.” Agriculture shares inextricably in ethanol’s economic fortunes, Iowa State University’s Charles Hurburgh Jr. said. With a predicted 4-6 percent annual ramp-up in corn yields in coming years (adding a possible 300 million to 500 million U.S. bushels annually), capping ethanol would result in “a growing surplus of corn we’re going to have to do something with,” he warned. Obstacles to ethanol development also represent lost environmental opportunity, Mon-

santo biofuels specialist Martha Schlicher said. Under the RFS2, advanced biofuels must offer at least a 50 percent reduction in greenhouse gas (GHG) emissions vs. gasoline — “I think we can get

‘ W e ’r e j u s t t o o darned important at this point.’ — Bob Dinneen Renewable Fuels Association

there,” said Cereal Process Technologies Vice President Pete Moss. Moss, whose company specializes in fractionation (separation of valuable corn components prior to ethanol processing), said plants can reach a 3647 percent GHG reduction through a “kitchen sink” approach including use of natural gas instead of coal power, combined internal heat and power generation, fractionation, and raw starch hydrolysis (starch breakdown using less heat). Adding biomass energy to the mix could push reductions to 46-57 percent, and Monsanto’s Schlicher said use of corn

stover to generate plant electricity could slash GHGs by up to 90 percent over coal power. Reactivating now-idled cornbased production through biofuels-friendly policies would boost cumulative GHG gains by 10 percent, she held. But while the U.S. Environmental Protection Agency (EPA) endorses new ethanol technologies, it singles out corn ethanol based on the theoretical impact of its production and global land use, preventing plants from gaining advanced biofuels status, Schlicher said. “The RFS2 assumes a certain adoption of technology, but doesn’t incent the adoption of technology,” she told FarmWeek. “Incenting the adoption of technology and (ethanol) policy certainty are absolutely critical if we want to see the existing industry continue to improve. “The corn-based ethanol industry isn’t pretty money; it’s a commodity business. Most companies have debt structures that significantly limit their ability to invest in capital. We need to be working with the existing industry to help validate technologies and (GHG reduction) pathways and show there will be financial incentives for adoption.”

Consolidation future for ethanol industry? Biofuels industry analyst Mark Lakers predicts a five- to 10-year consolidation of the ethanol sector as boom-and-bust gives way to new technological efficiencies and corporate economies. During last week’s Fuel Ethanol Workshop in St. Louis, National Renewable Fuels Association President Bob Dinneen anticipated additional “stabilization” in the industry as plants continue to transition from interests armed with “overly ambitious business plans” to “a stronger, more mature industry that’s prepared for the future.” The industry continues to struggle in the wake of the recession and shockwaves from the failure of ethanol giant VeraSun in 2008. For example, Riverland Biofuels, which purchased assets of Canton’s original Central Illinois Energy (CIE) in May 2008 following CIE’s bankruptcy filing, itself declared bankruptcy after completing plant construction and briefly producing ethanol until it shut down in March. The Illinois Environmental Protection Agency (IEPA) recently asked the Illinois Attorney General’s Office to compel plant owners to prevent further runoff contaminated with corn products and ash that reportedly is killing fish in a nearby lake. Minneapolis-based hedge fund firm Whitebox Advisors LLC now controls the plant. Lakers, president of Agribusiness and Food Associates, attributed the Canton plant’s failure largely to initial “technology problems.”

To survive, it likely will require new ownership with $10 million to $20 million in capital to bring the facility up to date with new-generation technology. “We’re seeing a natural consolidation of owners who have advantages either in access to capital or better technologies or economies of scale,” Lakers told FarmWeek. “It’s really the same drivers of consolidation we’ve seen in almost every industry in agriculture except for two — the cow-calf business and the production of grain, where there are still thousands of producers. “We believe that in the next 10 years, we’ll go from about 100 ethanol companies to around 20.” One of the major obstacles facing ethanol operations is a lack of credit for modifications, upgrades, or even operations, he said. Lakers sees options for struggling smaller operations including getting out, but “not at a low point”; trying to survive (“which I would argue is not a plan at all”); consolidating operations “with other like-minded producers”; or integrating or “virtually” integrating with fuel blenders, retailers or manufacturers. Valero, which acquired failed VeraSun ethanol holdings, is a prime example of nextgeneration ownership: The publicly traded company has considerable capital resources as well as profit “margin opportunities” via its wholesale-retail gasoline business, Lakers said. — Martin Ross

FarmWeek Page 5 Monday, June 21, 2010

RESEARCH

Farmers encouraged to target challenges with cover crops BY KAY SHIPMAN FarmWeek

Cover crops aren’t a silver bullet, but do offer solutions for some farming problems and objectives, farmers from five Central Illinois counties were told last week at Heartland Community College, Normal. “Be realistic about cover crop challenges,” Western Illinois University (WIU) professor Joel Gruver told the farmers. “We need to prioritize where we can effectively manage it (cover crops) and have (farming) challenges that would receive the most benefit.” A new Central Illinois cover

crop project seeks to increase the acres planted with cover crops in that area by providing farmers with technical expertise, cost-share funding, and access to a unique air seeder. The project is open to all types of tillage and cropping systems in Ford, LaSalle, Livingston, Macon, and McLean counties. McLean County farmer Sean Kinsella and his father, Mike, have seeded cereal rye grass for the last seven years. Last year, they planted rye into soybean stubble by applying seeds along with custom-applied fertilizer, Sean Kinsella explained. The notill farmers use a spring burn-

down and wait a week after that before planting corn in the field. “We’re looking for improved (soil) micro- and macro-pores,” Kinsella said. Farmer innovation and attention to management will be key to successful use of cover crops, according to Gruver. “To get cover crops to work, it normally requires more management than other ag technology,” Gruver said. “Cover crops aren’t idiot proof.” Gruver discussed studies that show cover crops help improve soil organic matter, soil structure, and the soil’s release of carbon dioxide and nutrients when

a crop most needs it. “Cover crops can stimulate (soil) biology so you get better breakdown of the previous year’s crop residue,” he added. Farmers need to select the right cover crop for their fields, challenges, and operation, according to University of Illinois researcher Dan Anderson. The farmers received a compact disc with different information, including an electronic copy of “Managing Cover Crops Profitability.” They also were referred to the Midwest Cover Crops Council website at {www.mccc.msu.edu} as another information source.

The farmers also were encouraged to consider enrolling one year in the Environmental Quality Incentive Program (EQIP) for the special cover crop project. Kent Bohnhoff, district conservationist with McLean County Natural Resources Conservation Service (NRCS), explained participating farmers may qualify for a $34-per-acre payment for planting a grass cover crop or a $49-per-acre payment for a grass-legume cover crop. For added information, farmers in five counties should contact their local NRCS or Soil and Water Conservation District.

Advancing corn: Research offers new opportunities BY MARTIN ROSS FarmWeek

Illinois corn growers could be eligible to join the elite ranks of the future U.S. biofuels market, a Southern Illinois researcher suggests. John Caupert, head of Edwardsville’s National Corn-toEthanol Research Center (NCERC), told FarmWeek NCERC has enjoyed a “major rebound” this year, with “the biofuels industry making some money again” and more venture capital flowing into new technology. The goal, according to Caupert, is “efficiency, efficiency, efficiency,” especially in terms of reducing ethanol’s carbon footprint. With the national

renewable fuels standard (RFS2) offering greater market opportunities for greenhousefriendly “advanced biofuels,” that’s a key commercial target. “It’s led a number of new technologies into our facility that are really focused on qualifying corn as an advanced biofuel,” Caupert related at last week’s Fuel Ethanol Workshop. “We’ve done quite a lot of ‘isobutanol’ and ‘biobutanol’ work this year already. “It’s been proven that you can take No. 2 yellow shelled corn and convert it into what qualifies as an advanced biofuel. That’s exciting for the industry, if we meet the criteria. Under RFS2, corn ethanol doesn’t qualify as an advanced biofuel. What we’ve

Study: High-yield agriculture has helped greenhouse picture Advances in high-yield crop production over the latter part of the 20th Century have prevented the equivalent of 590 billion metric tons of carbon dioxide from entering the atmosphere, according to a new study that may redefine ag’s importance in greenhouse gas (GHG)/climate management. According to the Stanford University study, yield improvements reduced the need to convert forests to farmland, a process that typically involves burning trees and other vegetation to clear the land and thus releasing CO2 and other greenhouse gases. If not for increased yields, added emissions from clearing land would have been equal to as much as a third of the world’s total output of GHGs since the dawn of the Industrial Revolution in 1850, researchers said. “Our results dispel the notion that modern intensive agriculture is inherently worse for the environment than a more ‘oldfashioned’ way of doing things,” said lead author Jennifer Burney. Burney and company calculated that for every dollar spent on ag research and development since 1961, emissions of methane, nitrous oxide, and carbon dioxide were reduced by the equivalent of about a quarter of a ton of CO2. Ag research “ranks among the cheapest ways to prevent greenhouse gas emissions,” coauthor Steven Davis suggested. Burney said agriculture currently accounts for about 12 percent of human-based greenhouse emissions. Although emissions from fertilizer production and use have increased with higher-yielding crops, they’re far outstripped by emissions that would have been generated in converting forests and grasslands to farmland, she maintained. The authors argued higher yields alone don’t guarantee lower emissions resulting from land use change, but must be coupled with conservation and global development efforts. However, University of Illinois economist Steffen Mueller, who has documented environmental gains in ethanol production, argued land use models used to shape climate-biofuels proposals have “significantly overstated corn impact.” “I’m much more optimistic we have a better handle on land use,” Mueller said at last week’s Fuel Ethanol Workshop in St. Louis.

done here is convert corn into biobutanol, which does qualify as an advanced biofuel.” The U.S. Department of Energy has identified biobutanol as a promising biofuel and biobased chemical feedstock. Biobutanol’s energy density (i.e., fuel efficiency) is closer than ethanol’s to conventional gasoline, and, unlike ethanol, could easily be transported by pipeline. According to industry

reports, biobutanol is expected to grow from the pilot stage to 500 million-plus gallons of production by 2014. Isobutanol is another corn-based derivative that could be used as a fuel or chemical feedstock. NCERC also is working to help corn producers capture a share of the cellulosic ethanol market — another category open to expanded RFS2 demand. Caupert’s crew has

successfully converted corn bran (kernel fiber) into ethanol in the lab, and is ready for small-scale pilot production. Bran offers a 5-8 percent increase in a plant’s ethanol yield, Caupert said. And while corn stover offers promising fodder for cellulosic ethanol, using bran from the kernel addresses concerns about removing corn residues that protect soils against erosion.

FarmWeek Page 6 Monday, June 21, 2010

CROPWATCHERS Bernie Walsh, Durand, Winnebago County: More of the same here last week with occasional rain and generally excellent growing conditions. We had just about 2 inches for the week in three different rains and more was forecast for the weekend. This may be a good year for fungicide applications with all of the damp, humid conditions. Post herbicide application, roadside, and waterway mowing are the main jobs going on right now. We continue to accumulate more growing degree days than a year ago and more than the five-year average. This hopefully will lead to more mature crops, an earlier harvest this fall, and better quality and test weight corn. Pete Tekampe, Grayslake, Lake County: Another hot, wet week in Lake County. Got rain four of the seven days last week for a total of almost an inch and a half. With the hot weather, the corn is really turning a dark green. Most of the corn is waist high. Quite a difference from last year. Early beans are looking great with the later-planted ones only good. Some hay has been cut, but not much because of the frequent showers. Winter wheat is turning fast, but will need at least two to three weeks before it is ready. Spring grains are all headed out and looking good. Another wet week is expected this week with showers six of the seven days. I hope they are wrong. Leroy Getz, Savanna, Carroll County: Rain of 2.3 inches for the week with storms in the area and more rain falling Friday. June’s total as of Friday was 4.3 inches. Not much fieldwork was accomplished last week. Some hay was baled on Thursday. Hot, wet weather makes fast- growing corn that is chest high and very dark green. Spraying is about over, but soybeans still need some herbicides. Oats and wheat are changing rapidly. Harvest will be early this year. I have accumulated 857 growing degree units. Ron Frieders, Waterman, DeKalb County: For six weeks now, we have had numerous showers and storms. This year, again, the planting weather window was very early for this area. The timeliness of corn planting, frequency of rain, and the abundance of heat units are all adding the development of what could be an excellent corn crop. Most corn is waist high or better. The early-planted soybeans have benefited as well. However, their planting was slowed by wet conditions and their maturity is much more variable. Some beans are 10 inches tall and others are small in comparison. The wheat is turning and looks very good. It looks like the harvest will be early. Larry Hummel, Dixon, Lee County: This is always an enjoyable time of the year. The corn is growing by leaps and bounds and fieldwork is starting to wind down. Except for spraying one more path of Roundup on soybeans, the corn and beans are on their own. It’s time for them to do what they do so well. Like a mother watching her children play outside, we will monitor their actions, provide some guidance when needed, and take a few moments to relax. Joe Zumwalt, Warsaw, Hancock County: Saturated seemed to be the word of the week. From June 10 to the 13, Western Illinois received 5 to 9 inches of rain, and it sure didn’t come gently. Excessive ponding still exists, and both corn and soybeans are still showing the signs of a relentlessly wet period. Producers are trying to make the best of an extremely lessthan-desirable situation. Replant or take prevented planting? Corn or soybeans? My guess is that there is still 40 percent of the soybeans to be planted in the immediate area and even a few scattered fields of corn. Early corn continues to look acceptable considering what it has gone through over the last two months. We still have some good yield potential but we just need the right weather this summer. You know it’s wet when you can’t even mow roadsides!

Ken Reinhardt, Seaton, Mercer County: A storm blew through Thursday night. It was extra unnerving as I had to leave the sprayer mired in a washout. Luckily not much rain yet, but there is more coming. There are some soybeans yet to be planted, some on prime ground. There is corn that’s not going to get sprayed the second time. It might be tasseled by the time it’s dry enough to go. Some are saying the aquifer in the Keithsburg area is the highest it’s been in more than 60 years. Ron Moore, Roseville, Warren County: In the last two weeks we have had up to 8 inches of rain here and more to the north of us. Needless to say, we still have water standing in many places. The beans that I replanted three weeks ago are now under water again. The corn where the water has been standing is now yellow and appears to have lost all of its nitrogen. We have more damage this year than last year. The corn that was planted on the rolling fields looks much better. It is now fence-post high. There has not been a lot of post-spraying done. The forecast is for more rain this week. It has not been very good hay-making weather, either. There has not been a lot of hay baled, and it is almost the last week of June. Pasture conditions are very good with lots of grass. Jacob Streitmatter, Princeville, Peoria County: It was another wet week with rain totaling about 2 inches. There has not been much activity since last Saturday (June 12). There are still some soybeans to be planted, and a nice, dry week would be great. Corn is very uneven and yellow from wet spots and saturated soils. Some people are sidedressing anhydrous and 28 percent in those trouble areas. Hopefully next week will be dry and let me replant soybeans. Tim Green, Wyoming, Stark County: Another wet beginning of the week held things up for the rest of the week. Conditions were starting to dry Thursday afternoon, but then we got a little shower Friday morning. People are trying to finish up corn and bean spraying. It has been a struggle all spring. No diseases yet in the fields. I have heard about cutworms in beans, which I haven’t heard much of before. But it’s been an odd year, so you never know. We are moving a little grain. Mark Kerber, Chatsworth, Livingston County: It was a wet and stormy week and soils have become saturated again. Some areas have received too much rain, while others have been receiving smaller amounts. No tornadoes like the ones that hit Streator and Dwight and caused much damage. It made the national news, as it was very destructive. Corn has a nice green color and is growing rapidly. Soybeans are a little more yellow and need drier weather. Soybean spraying will be the next activity as some have started already, depending on weed pressure. Those with Sonic/Authority applied earlier can wait, as there are hardly any weeds. Markets aren’t doing much. We are still basically in a down trend. There is a lot of old corn around to be moved. Hopefully, elevators will be empty by fall for this new crop. Editor’s note: Because of a technical glitch the report Kerber filed last week did not appear. Steve Ayers, Champaign, Champaign County: Water, water, everywhere! We had three inches from June 11 June 17, but some areas reported more than 10 inches. We cannot see the ponds yet in the cornfields but water is still standing in the soybean fields. Some farmers are talking replant, but it is going to be a tough call. Corn is V11 or V12 and 6 feet tall, so we should see some tassels popping this week. Bug of the week is the Japanese beetle that just arrived to the area. I write this at 6 a.m. Friday and we are under a severe thunderstorm warning with monsoonal rain. Sorry, got to go, they just announced a tornado warning!

Ron Haase, Gilman, Iroquois County: We had rain on June 12, 13, 14, and 15. Counting June 11, that was five consecutive days of rain. Where I farm, we had a range of 0.9 to 1.6 of inches of rain. Other areas close by received 2 to 3 inches over the same period. The only field activity for the week began Thursday as a couple neighbors sprayed post-emergent herbicides in their soybean fields. Corn is anywhere from the V7 to the V11 growth stage. Most corn is in the V9 to V10 growth stage and 4 to 5 feet tall. At V10, the corn plant begins a rapid, steady increase in nutrient and dry matter accumulation and in water usage. Area soybean fields are anywhere from V2 to the V6 growth stage. Some soybean fields need some replanting done, and a few fields have not been planted yet. The local closing prices for June 17 were: nearby corn, $3.38; new-crop corn, $3.40; fall 2011 corn, $3.64; nearby soybeans, $9.55; new-crop soybeans, $8.86. Brian

Schaumburg,

Chenoa, McLean County: Thunderstorms last week dropped as little as 0.5 of an inch of rain to as much as 3.5 inches all within a 7-mile radius. Corn is 3 to 4 leaves from tassel and will be flowering soon. Soybeans are showing signs of wet feet in some spots as various diseases make their presence known. The summer solstice is my reminder to say happy anniversary to my sweetheart of 30 years! Corn, $3.38; fall, $3.35; soybeans, $9.47; fall, $8.82; wheat, $3.88.

Carrie Winkelmann, Menard County: My apologies for missing last week’s reporting. My dad was having heart surgery. All went well; he is one tough farmer! We had 1.7 inches of rain in the last seven days, faring better than most of the neighboring areas that received much more. Corn is just over head high on me (5-foot9) and looking good in all but the wettest spots. We mudded in the last four acres of beans June 9, so some of our beans are just coming up and others are putting out the second trifoliate. Wet spots look bad, but stand counts taken last week averaged 115,000 plants per acre (drilled). Tom Ritter, Blue Mound, Macon County: Since last report, the area received anywhere from 2 to 5 inches of rain in numerous showers, most of it coming over the previous weekend (June 12-13). Crop conditions continue to look very good. Corn is shoulder to head high. Soybeans also are growing, but they may be a little more stunted due to the wetter soil conditions. Needless to say, there was very little field activity last week — just some spraying of crop protectants. Overall, weed control seems to be adequate. We have a lot more volunteer corn than previous years because of the late harvest and winds that downed corn last fall. Overall, farmers are optimistic at this point and are beginning to ready storage and prepare for the upcoming harvest. Todd Easton, Charleston, Coles County: Field operations across Coles County have been curbed since last Friday (June 11) afternoon and subsequent rain showers have kept fields fully saturated and flooded in spots. Sprayers have been on hold while soybean fields are getting close to canopy in narrow-row plantings and getting pretty ragged looking with volunteer corn and other weeds. I already have walked into a few cornfields that are above my head and showing nine or 10 visible collars. The rest of the cornfields are not too far behind and the whole crop is looking good with a big exception of the flooded and low spots that are actually losing color and falling behind in development. The very small amount of wheat that can be found in the countryside is coming to maturity and may see a combine in the next week or two if the machines can stay on top of the ground. Apologies in advance for no Coles County report next week as I will be off on vacation with the girls. I am hoping to see some tassels popping out when we return.

Page 7 Monday, June 21, 2010 FarmWeek

CROPWATCHERS Jimmy Ayers, Rochester, Sangamon County: We’ve received from 2.5 to 5 inches of rain in the area last week. One of my neighbors in Rochester called and said he had an inch and a half of rain on Saturday (June 12). There has been rain just about every other day. Fields are saturated, but the crops are growing well. Corn is more than 6 feet tall. Sweet corn was tasseling earlier in the week. A few fields of field corn also are tasseling. Beans have had a tremendous jump. Weeds are coming right along, also. A lot of guys are done spraying corn, but there still are quite a few beans that need attention. Markets still don’t know where they are headed. Sangamon County Fair went off really well. Very good attendance. Some of the rains last week were flash-flood type. Our river bottom corn is about 4 feet tall with about 2 feet of water on it. The upland that is flat is struggling with drowned out areas and pockets of standing water. A few tried to mow ditches hanging off the road with sickle bar mowers. Be careful. Doug Uphoff, Shelbyville, Shelby County: The main activity last week was emptying the rain gauge — 7.85 inches of rain by June 15 this year vs. 5.5 for the whole month of June last year. Corn is growing fast and will be tasseling by July 4. Some already is tasseling over by Assumption. Fungicide reps are calling on us trying to lock in acres to be sprayed for corn leaf diseases such as grayleaf spot. Prices range from $24 to $28 per acre for the application. It could be a year when it pays to spray, but scouting is an important part of the equation. I have some fields that may need sprayed as leaves are showing signs of disease. It will take roughly a 7- to 8-bushel-per-acre (bpa) yield boost to break even, and we have seen 15 to 25 bpa increases from the application in the past. Soybeans are waterlogged and at a standstill. Water damage to soybeans and corn will be unavoidable from the heavy rains. Farm diesel, $2.58; farm soy diesel, $2.52; truck diesel, $3.60; truck soy diesel, $2.98; gas, $2.754; cash corn, $3.36; fall corn, $3.43; January corn, $3.59; Decatur corn (no trucking taken off) June, $3.58; July, $3.59; fall, $3.58; December, $3.68; Jan 2011, $3.75; cash beans, $9.67; July, $9.65; fall, $8.91; December, $8.97; January, $9.06; Decatur beans, (no trucking taken off) January, $9.92; July, $9.87; fall, $9.13; December, $9.32; January 2011, $9.34. Rick Corners, Centralia, Jefferson County: Sometimes I wonder if bean planting will ever get done around here. It rains every other day. Amounts vary from 0.3 of an inch in one place to 1.5 inches just down the road. I guess we’re lucky there is not very much wheat around because it might be a booger to get it dried out, and there will be muddy places in some of the fields. Looks like the early corn might be sticking tassels out in the next week or so.

David Schaal, St. Peter, Fayette County: We’ve had rain every day except for Wednesday since I gave my last report. Monday and Tuesday storms blew in giving us around an inch of rain each time. Places around the area received even more. Soybeans in low-lying areas were under water two or three times last week. After the water receded, they were covered with dirt. I suspect there will be a considerable amount of replant or spotting in on a lot of fields. There are a few soybeans that have to be replanted for the first time. The corn for the most part is still looking very good. It is big enough to handle quite a bit of water. There was virtually no fieldwork in the last week. A little bit of wheat around the area looks as though it needs to be cut, but that is hard to do when rain falls every day. And, with the rains we have had around here, grounds conditions are become soft in the wheat stubble. Nobody wants it to quit raining, but maybe spread showers out a little more. You will grow more in a wet year than a dry one. Farmers also have hay that should have been cut. When it does dry up a little bit, there will be a whole lot of soybean spraying. The water hemp just keeps on growing. Ted Kuebrich, Jerseyville, Jersey County: Jersey County received 2 inches of rain last week, with a lot of heat and humidity. The corn and beans are looking very good with the early-planted corn looking like a bin buster. The early beans have their rows closed in. The 2-inch rain last week caused water pooling in some of the low spots in bean fields that have beans that are just now coming up. There are some beans still to be planted as of Friday. The fields have low spots that are taking a little longer to dry out. The Illinois River is 3 feet above flood stage at Hardin. Prices at Jersey County Grain, Hardin: June 2010 corn, $3.48; fall 2010 corn, $3.42; June 2010 beans, $9.66; fall 2010 beans, $8.98; July wheat, $4.31. Dan Meinhart, Montrose, Jasper County: Another week without any fieldwork accomplished. The area had 4 to 5 inches of rain or more last week. Roadways and fields were flooded. Creeks and rivers came out of their banks. The rains were accompanied by damaging winds and hail. Some areas are reporting up to 10 inches or so far during the month of June. A lot of beans need to be planted and replanted. A lot of corn and beans need post-emerge chemicals applied, but ground conditions do not permit. Wheat harvest will begin as soon as the combines can travel. There is much less wheat than usual in this area because of the late planting last spring and consequently the late harvest last fall. This week brings promise of drier weather and hot temperatures. Reports received Friday morning. Expanded crop information available at FarmWeekNow.com

Bob Biehl, Belleville, St. Clair County: Received about 2.5 inches of rain for the week. It was a much-needed rainfall for our area as many of the storms were going around us. The next 5 to 7 days temperatures are to top out at near 95 degrees. I did see a few tassels Friday morning in some of the corn planted April 6 to April 8. So, this week many fields will start tasseling as quite a few acres were planted in this area during the week of April 12 to April 18. Bean stands are good and should take off with the recent rains. Wheat harvest is under way as well. Moisture readings I have heard are running between 14 and 15 percent. Kevin Raber, Browns, Wabash County: Some of the early-planted corn is beginning to tassel. The warm weather with ample moisture has really helped the corn and soybeans. Wheat harvest has started and might be almost over. There was very little wheat grown locally. I haven’t heard anything on yield or quality. The Big Wabash is supposed to go almost 4 foot above flood, so that will affect many low areas. The amount of damage should be known by this week. Dean Shields, Murphysboro, Jackson County: The weather last week was kind of a repeat of the previous week. Hot, humid, and 1 to 2 inches of rain scattered throughout Jackson County. A lot of guys planted beans and then received a big rain. We don’t know if we will have to do it again. The Mississippi is on the rise, so there is some concern for the river bottom farmers. The locks are still down and the river is coming back up. Corn looks pretty decent in most places. It is just starting to pollinate, but we still have a lot of variance in the corn size. I even heard the other day that another fellow is still planting corn. Beans are growing well, especially the little ones planted earlier. It’s been hard to get finished. Seems like everytime we plant something, we get a big rain and have to do it again. Some fellows just gave up. Wheat harvest has come along in between the showers. The yields I’m hearing are good, but nothing to write home about. Most of those acres will be put back to beans if the ground dries out. It is hot and humid in Southern Illinois, and we would like to see a little period of dry weather so we can finish up the planting season. Ken Taake, Ullin, Pulaski County: “Hot” pretty much sums up the weather for the past week. Seems as if we have fallen into a normal summer-type weather pattern: highs in the 90s and high humidity. It’s been pretty uncomfortable. We received a surprise thunderstorm Thursday afternoon that totaled about an inch of rain. It was really welcome. Hard to believe we were starting to get a little bit dry. Crops are growing well, especially the weeds. Seems like they never stop growing. That probably was the primary job last week — spraying weeds and working on equipment. Please be careful.

More heavy rains pummel Illinois; field ponds common BY DANIEL GRANT FarmWeek

Illinois may be in position to temporarily take over Minnesota’s nickname “Land of 10,000 Lakes” if the recent weather pattern continues the rest of this month. Much of the state was drenched with heavy rains again last week to push rainfall totals for the first half of June to 3.5 to 4.5 inches in Northern Illinois, 4.5 to 5.5 inches in Central Illinois — with a band of 5.5 to 6.5 inches in EastCentral Illinois — and as much as 7.5-plus inches in Western Illinois from the Quad Cities to Quincy. Rainfall totals from June 1 to 16 in Souther n Illinois

ranged from 1.5 to 4.5 inches with the lightest totals in the deep south, according to the Midwestern Regional Climate Center in Champaign. “It was a wet and stormy week as soils have become saturated again,” said Mark Kerber, a Far mWeek Cropwatcher from Livingston County. Topsoil moisture the first of last week, prior to the more recent rains, was rated 47 percent surplus and 51 percent adequate with just 2 percent short or very short, the National Agricultural Statistics Service Illinois field office reported. “Excessive ponding still exists, and both corn and soybeans are still showing the signs of a relentlessly wet period,”

said Joe Zumwalt, a Cropwatcher from Hancock County. Unfortunately, the DTN ag weather forecast for this week

FarmWeekNow.com Corn rootworms and Japanese beetles are showing up in fields. Check out the latest CropWatcher reports by going to FarmWeekNow.com.

called for episodes of scattered showers and thunderstorms for central and northern areas of the Midwest. The additional rain could produce more local flooding. A trend leaning toward less rain and hotter temperatures was predicted to the east and south. Farmers last week reported

more drowned out spots in fields and corn that is yellow in color. But, overall, 98 percent of the corn crop has emerged in Illinois and last week was an average 28 inches in height compared to the five-year average of 19 inches. Soybean planting as of the first of last week was 91 percent complete statewide. The focus for many farmers soon will turn to scouting fields as corn rootworms and Japanese beetles recently appeared in Illinois fields, according to Mike Gray, University of Illinois Extension entomologist. “Unlike the previous two growing seasons, I believe this year’s rootworm population had a ver y g ood chance to

establish on root systems and survive because of the early and quick pace of planting,” Gray said. Root systems may be shallower this year because of saturated soils, and lodging could become an issue later this season, even in fields without heavy rootworm damage. “If lodging occurs, examine the plants’ root systems to determine the severity of root injury,” Gray said. “Don’t automatically assume corn rootworms are responsible.” Meanwhile, Japanese beetles were observed last week on corn and flowering shrubs in Central Illinois. Gray predicted the population of that pest will expand in coming weeks.

FarmWeek Page 8 Monday, June 21, 2010

COMMODITIES

Ohio prepares for another HSUS challenge BY DANIEL GRANT FarmWeek

The Ohio livestock industry is preparing for another challenge from the Humane Society of the United States (HSUS). Last year the industry in Ohio responded to an informal challenge from HSUS by creating the Ohio Livestock Care Standards Board. The purpose of the new board is to reinvent the partnership farmers have with consumers and provide transparency, validation, and credibility of standards set for livestock production, according to Jack Fish-

er, executive vice president of the Ohio Farm Bureau Federation. Ohio voters last year approved the livestock care board by a vote of 64 percent to 36 percent and since then one farmer, two veterinarians, a food safety specialist, a member of a local Humane Society, two consumers, two representatives of state farm organizations, and one college administrator have been selected to serve on the board. â&#x20AC;&#x153;The (livestock care) board is a good cross-section of Ohio,â&#x20AC;? said Fisher, who last week was a keynote speaker at the American Farm Bureau Federation public relations con-

Maschhoff appointed to National Pork Board Julie Maschhoff, Carlyle, last week was one of five people in the pork industry appointed by Ag Secretary Tom Vilsack to serve on the National Pork Board (NPB). The new appointees, including Maschhoff, each will serve a three-year term beginning July 1. Maschhoff, along with her husband, brother-in-law, and sister-in-law, own The Maschhoffs, which is a farrow-to-finish operation. Through a partnership network of 300 family farms across the Midwest, the operation has 130,000 sows and markets 2.8 million hogs per year. She also serves as the vice president of communications for the operation. Maschhoff has been active on several National Pork Producers Council (NPPC) committees, served on the Illinois Pork Producers Association board, and has testified on behalf of NPPC before the Environmental Protection Agency. She is the only new NPB appointee from Illinois.

ference in Madison. â&#x20AC;&#x153;Their job is to get permission for us to feed the world.â&#x20AC;? The livestock care board received bipartisan support in Ohio and was supported by the American Humane â&#x20AC;&#x2DC;If itâ&#x20AC;&#x2122;s on Association. mitted to However, the board is not supported by HSUS. In fact, HSUS is in the process of collecting signatures to put an initiative on the ballot in November that would override the livestock boardâ&#x20AC;&#x2122;s authority by establishing language that would phase out the use of gestation stalls, battery cages, and veal crates in Ohio.

â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a way to short-circuit what was put in place,â&#x20AC;? Fisher said of the potential ballot initiative. HSUS must collect 402,275 signatures of registered

spent about $5 million on the Ohioans for Livestock Care Campaign, which was supported by Illinois Farm Bureau. â&#x20AC;&#x153;We expect this to be a very expensive campaign,â&#x20AC;? Fisher said of the potenthe ballot this fall, weâ&#x20AC;&#x2122;re com- tial ballot initiaâ&#x20AC;&#x153;Last year it another campaign to defeat it.â&#x20AC;&#x2122; tive. was as fairly civil campaign. Weâ&#x20AC;&#x2122;re anticipating this â&#x20AC;&#x201D; Jack Fisher one could get Ohio Farm Bureau pretty ugly.â&#x20AC;? Fisher believes if the ballot inivoters by June 30. tiative is approved, HSUS will â&#x20AC;&#x153;If itâ&#x20AC;&#x2122;s on the ballot this fall, attempt to sway votersâ&#x20AC;&#x2122; opinweâ&#x20AC;&#x2122;re committed to another cam- ions by launching a negative paign to defeat it,â&#x20AC;? Fisher said. campaign against conventional If the ag industry is able to agriculture that could include prevail, it likely will be a costly graphic images of the mistreatbattle. The industry last year ment of animals.

Illinois farmer elected to NCGA leadership post Gary Niemeyer, Auburn, last week was elected first vice president of the National Corn Growers Association (NCGA). Niemeyer is scheduled to begin his new position on Oct. 1, which would put him in line for the NCGA presidency the following year. His election still must be ratified next month at Corn Congress. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m grateful and excited about the opportunity,â&#x20AC;? Niemeyer said. â&#x20AC;&#x153;Our industry

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has many challenges ahead of it in the coming years, and it also will be a time of great opportunity to advance both the image and impact of modern American agriculture.â&#x20AC;? Niemeyer and his wife, Cheryl, produce corn and soybeans in Sangamon Coun-

ty. He has farmed for 35 years and has been a member of NCGA since 1995. He also served as president of the Illinois Corn Growers Association (ICGA) in 2002 and in 2000 was chairman of ICGAâ&#x20AC;&#x2122;s legislative team.

Small grains program Thursday in Shabbona A small grains program will be held Thursday at the University of Illinois Northern Illinois Agronomy Research Center near Shabbona. The program will begin at 5:30 p.m. and will focus on small grain management, oat and wheat variety selection, and disease prevention and control. There will be a grilled pork chop meal available at the event for $5. Registration is available prior to the event and is encouraged to help with the meal count. Contact the Illinois Wheat Association office at 309-557-3662, the research center at 815-824-2029, or e-mail handley@ilfb.org. A story printed in the June 14 issue of FarmWeek had the incorrect date of the event.

FarmWeek Page 9 Monday, June 21, 2010

FROM THE COUNTIES

HAMPAIGN — Farm Bureau will sponsor summer toolshed meetings Thursday, July 1. Mark Gebhards, governmental affairs and commodities executive director, will be the speaker. The following times and places are: 7:30 a.m. breakfast at Norman Uken’s, Urbana; 10:30 a.m. Philo Tavern with lunch being served; and 3 p.m. at Larry Dallas’ farm, Tuscola, with Sidney Dairy Barn ice cream available. Call the Farm Bureau office at 217-352-5235 for more information. • Applications for the Champaign County Farm Bureau Leadership Academy are being accepted. The fiveclass session will be from 5:30 to 9 p.m. Monday, Aug. 2, through Monday, Aug. 30, with the exception of Monday, Aug. 23, when the class will meet from 10 a.m. to 5:30 p.m. A District 12 dinner meeting will follow that class. Deadline to return applications is Wednesday, June 30. Call the Farm Bureau office at 217-352-5235

for an application or more information. EWITT — Kevin Rund, Illinois Farm Bureau senior director of local government, will be the speaker at a truck regulation meeting at 1 p.m. Monday, June 28, at the University of Illinois Extension office, Clinton. The Government Action Committee will sponsor the meeting. Call the Farm Bureau office for more information. ASALLE — A special LaSalle County Ag in the Classroom (AITC) donation flyer was in the June 7 FarmWeek. Golfers are asked to participate in the fundraising event for the LaSalle County AITC program. Those who can’t attend are asked to consider a tax deductible donation. Checks may be made to the LaSalle County Farm Bureau Foundation and mailed to the Farm Bureau office at 4201 N. Columbus St., Ottawa, Ill. 61350. All donations above $50 will earn the donor a free 10th annual golf outing T-shirt.

• The LaSalle County 4-H and Junior Fair will be July 1418. Season tickets are $12, which will provide entrance to the fair, rodeo, tractor pull, demolition derby, and truck pull. Tickets are available at the Farm Bureau office. Call the Farm Bureau office at 815433-0371 for more information. EE — The Young Farmers Committee will sponsor its annual cookout at 6:30 p.m. Saturday at Brad and Erin Shippert’s farm. Contact the Farm Bureau office for directions. The committee is open to all Farm Bureau members between the ages of 1835. Pork chops, hotdogs, baked beans, and drinks will be provided. Bring a dish to pass and lawn chairs. Call the Farm Bureau office at 815-857-3531 or e-mail leecfb@comcast.net for more information. • Farm Bureau will sponsor a legislative breakfast at 8 a.m. Monday, June 28, at the Red Apple, Dixon. Legislative updates from the offices of

state Sen. Tim Bivins (RDixon), state Rep. Jerry Mitchell (R-Sterling), and U.S. Rep. Bill Foster (D-Geneva) will be given. Call the Farm Bureau office at 857-3531 or e-mail leecfb@comcast.net for reservations or more information. CDONOUGH — The McDonough County Board Comprehensive Plan Committee will sponsor the following focus meetings: 7 p.m. Tuesday, June 29, Bushnell Recreation Center, with the topic of land use; 7 p.m. Wednesday, June 30, at Colchester Lions Den, with the topic of agriculture; and 2 p.m. Thursday, July 1, Macomb City Hall, with the topic of natural resources. Call the Farm Bureau office at 309-837-3350 or e-mail mcdfb@logonix.net for more information. IATT — The Prime Timers will sponsor a trip Wednesday, June 30, to Bloomington to tour the Ropp Jersey Cheese Farm and the Davis Mansion. Cost is $25 and includes transportation,

tours, and lunch. Call the Farm Bureau office at 762-2128 for reservations or more information. • Farm Bureau will sponsor a bus trip Friday, Aug. 13, to St. Louis to see the Cardinals vs. the Chicago Cubs baseball game. Cost is $85. Call the Farm Bureau office at 7622128 for reservations or more information. TARK — The Prime Timers will meet at the Farm Bureau office at 9 a.m. Friday for an informational meeting on a trip to St. Louis on Aug. 19 when the group will take a river cruise. Cost for the trip is $130. Deadline for reservations is July 9. Call the Farm Bureau office for more information. OODFORD — A cardiopulmonary resuscitation class will be from 6 to 10 p.m. Tuesday, June 29, at the Farm Bureau Park, Eureka. Class size is limited to 20. Call the Farm Bureau office at 467-2347 for reservations or more information.

‘Ag-Zibit’ educational exhibit to open Saturday A growing lack of information exists among parents, students, teachers, and the community in general about agriculture and its role in American society. That led Discovery Center Museum in Rockford, along with agriculture leaders from the area, to plan a 2,500square-foot permanent exhibition with 17 hands-on, interactive exhibits showing the impact of agriculture on our daily lives. Ag-Zibit will introduce to children ages 3-13 and their families basic concepts of how agriculture touches our lives every day. Grand opening of the exhibit is scheduled for Saturday and Sunday. An advisory committee comprised of Discovery Cen-

ter staff and agriculture industry professionals was formed to develop exhibit ideas and educational content and to provide expertise to ensure exhibit accuracy. Advisory committee members included Roger Christin, Winnebago County Farm Bureau manager; Ann Marie Cain, Boone County Farm Bureau manager; Bruce Johnson, Stephenson County Farm Bureau manager; and Ron Kern, Ogle County Farm Bureau manager. Also included were Ferol Empen, Agriculture in the Classroom (AITC) teacher; Luke Allen of Facilitating Coordination in Agriculture Education (FCAE); Darrell Stitzel, Illinois Pork Producers Association representative; Gail Pollard, Illinois Dairy

Association representative; and local farmers Lynden Endress, Ken Greene, Bernie Walsh, and Chuck Cawley. The advisory committee narrowed exhibit ideas to 17 hands-on exhibits that cover a wide range of agricultural topics. The education experts on the committee incorporated Illinois state learning goals into the educational message for each exhibit. The advisory committee also was instrumental in helping to raise the necessary funds to make Ag-Zibit a reality. Local, state, and regional organizations contributed to support the exhibit. Many county Farm Bureaus also have made donations to the Ag-Zibit, including Boone, Lee, LaSalle, McHenry, Ogle, Stephenson, and Winnebago.

Maisey Rathbun, left, her brother, Caleb (red shirt), and their cousin, Mason Gaylord, work together at the “Grain Mover,” an interactive exhibit that allows children to experience and learn how machines are used to move and manipulate grain in grain elevators and on the farm. Mason is the son of Paula and Bill Gaylord, Crystal Lake. Maisey and Caleb are the children of Martha and Mike Rathbun, Rockford. Mike is associate director of the Discovery Center Museum in Rockford. The Ag-Zibit, a 2,500-square-foot permanent exhibit at the museum, will open Saturday. (Photo by Ken Kashian)

AgChat Foundation to host first farmer training session BY DANIEL GRANT FarmWeek

Bob Stallman, president of the American Farm Bureau Federation (AFBF) and a cattle and rice producer from Texas, believes the job description of farmers must be expanded in order for them to keep up with consumer demands. Farmers and ranchers no longer can simply produce commodities and expect consumers to be satisfied, according to the AFBF president. Farmers in the information age also must engage consumers so they can learn about food production and develop or maintain trust with farmers

who produce their food. “All of us in agriculture have a responsibility to share our story,” Stallman said last week at the AFBF public relations conference in Madison. “We need to make a connection with the public.” Stallman believes most consumers still trust farmers, but more and more do not understand the industry as the U.S. population becomes increasingly urban and more generations removed from farming. More than 98 percent of Americans currently have no involvement in farming or the ag industry, according to the AgChat Foundation, which was

created by farmers in April to empower producers to tell their stories to consumers. “People still think farmers are good people and have a high degree of trust,” Stallman said. “The problem is people are not sure what we do anymore is farming.” The AgChat Foundation was established to bridge the gap between farmers and consumers. The goal of the organization is to equip farmers with skills to use social media — such as Twitter, Facebook, and YouTube — to tell their story to consumers. The AgChat Foundation will host its first training session Aug. 30 and 31 in Chicago. For

more information visit the website {http://agchat.org}. “Social media platforms are delivering the non-farmer to the farm,” said Tricia Braid Terry, communications director for the Illinois Corn Growers Association Corn Marketing Board, during a presentation at the AFBF conference. “Social media might seem mysterious and elusive, but what it boils down to is just an online conversation,” she continued. “I’m talking about moving your coffee shop talk to your laptop.” Facebook currently has 450 million users while Twitter is adding a reported 300,000 new users per day and last week had a

total of 106 million users. “Social media give us an opportunity to reach younger demographics,” Stallman said. “Those younger demographics will be the ones (in the future) making decisions that affect American agriculture.” But social media isn’t just a fad or limited to younger people. The fastest growing segment on Facebook is 55- to 65-year-old women, according to Terry, who serves on the AgChat Foundation board. Social media “are communications tools that must not be ignored,” Terry added. “This is a case where putting your head in the sand just isn’t going to cut it.”

FarmWeek Page 10 Monday, June 21, 2010

PROFITABILITY

Understanding and managing counter-party risk BY WADE MITTELSTADT

Recognizing and managing risk is essential in today’s agricultural marketplace. However, as volatile as certain price risks can be to manage, there is another risk that can become more serious in nature: counter-party risk. Simply stated, Wade Mittelstadt counter-party risk is the risk that a person or entity on the other side of a contract or transaction does not perform as agreed and potentially

defaults on that contract. It is vital that attention be given to this area of your operation as losses and exposure from this type of risk can come without warning, can come at the wrong time (for example, when markets are at their highest), and can be significant. Counter-party risk has always been around but becomes a greater concern in times of volatile markets and economic uncertainty. Counter-party risk can occur in several ways: 1) the risk that a payment default or delivery default occurs, 2) the risk that the contract may have no value, 3) the risk that

deferred payments due may not get paid or 4) the risk that prepaid product does not get delivered. Common examples of contracts or agreements where counter-party risk exposure is present are cash grain contracts, grain contracts where title passes, prepayments for crop inputs, or custom service agreements. Contract defaults can occur because the other party is unable to meet the terms of the agreement because they are financially or otherwise unable to perform. The other party’s perception or understanding of the agreement also may differ greatly from your

understanding, causing either party to not perform. Assessing counter-party risk is essential to your business and requires considerable due diligence. Considering the risks of what could go wrong and the potential implications to your operation are no less important than the other factors in a contract. Based on the scope of your business, identify and assess your key business partners. Knowing and understanding their financial strength is extremely important in limiting your risk. Written documentation of a transaction also is essential to ensuring the understanding of

all parties. Take time to understand the terms and conditions of your agreements. Consider outside influences that may interfere with the agreement, such as landlords, lenders, third-party suppliers, and regulators. Reducing and managing counter-party risk is different for each operation. However, being mindful of the risks and taking steps to manage and mitigate the exposure is crucial to your success in these uncertain economic times. Wade Mittelstadt is GROWMARK’s assistant treasurer. He email address is wmittelstadt@growmark.com.

Export market has great potential for U.S. farmers, economy BY DANIEL GRANT FarmWeek

U.S. pork producers finally received some relief from twoplus years of losses when domestic hog prices improved this spring. However, the long-term profitability of the industry likely will be linked in part to what happens on the international trade front, according to industry leaders this month at the World Pork Expo in Des Moines. “Ninety-five percent of the world’s population lives outside the U.S.,” said Don Butler, immediate past president of the National Pork Producers Council (NPPC). “This pre-

sents a huge opportunity for pork producers to ship our products around the world.” U.S. pork exports last year were valued at $4.3 billion and added $38 to the value of each pig marketed by American producers. But, in order to expand outside sales, U.S. farmers need improved access to some markets, according to Butler. He called on Congress and the Obama administration to ratify and implement pending free trade agreements (FTAs) with Colombia, Panama, and South Korea. “It’s vitally important we have access to international trade,” said Butler, who noted

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 $35.10-$44.00 $38.04 $56.62-$59.00 $57.27 n/a n/a This Week Last Week 22,413 11,964 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week $78.28 $75.74 $57.93 $56.05

Change 2.54 1.88

USDA five-state area slaughter cattle price Steers Heifers

This week $90.95 $90.97

(Thursday’s price) Prv. week Change $92.34 -1.39 $92.33 -1.36

CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states. (Prices $ per hundredweight) This week Prev. week Change 108.35 109.63 -1.28

Lamb prices Confirmed lamb and sheep sales This week 661 Last week 779 Last year 895 Wooled Slaughter Lambs: Choice and prime 2-3: 90-110 lb., $119; 110-130 lbs., $127-$130. Good and choice 1-2: 60-90 lbs., $130. Slaughter Ewes: Utility and good 1-3: $43-$45. Cull and utility 1-2: $39-$43.

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 06-10-10 7.4 14.0 37.1 06-03-10 5.1 16.8 35.7 Last year 13.1 14.1 32.2 Season total 1343.9 22.4 1407.1 Previous season total 1102.0 25.5 1311.2 USDA projected total 1445 900 2000 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

NPPC supports Obama’s goal of doubling U.S. exports in the next five years. Butler claimed that, if ratified, the pending FTAs in Colombia and Panama could add $1.54 per head of value to U.S. hogs while the FTA with South Korea could be worth as much as $10 per head to U.S. pork producers. “If the FTAs are not ratified, not only do we lose the opportunity to export more, but we could be completely out of those markets as those countries are negotiating (FTAs) with other countries,” Butler said. Nick Giordano, vice president and counsel of international affairs with NPPC, said South Korea has the most market near-term potential for U.S. producers. But, long-term, he believes China represents an even greater opportunity for ag sales. “There is no greater moneymaking opportunity for U.S.

pork in the world than China,” Giordano said. “It’s the largest pork-consuming country in the world, its costs of production are much higher (than in the U.S.), and (the Chinese herd) has all sorts of disease problems.” China currently imports just 2 percent of the pork it consumes. But Giordano believes that will rise as population increases are expected to out-

strip China’s ability to produce pork and other ag products. Overall, U.S. ag exports this year are projected to total $104.5 billion, which would be the second-most on record. And ag trade is expected to provide a huge boost to the U.S. economy as USDA projected a trade surplus in the ag sector this year of $28 billion, up from $22.5 billion last year.

Tougher times ahead for cattlemen? Cash cattle prices near-term could hover in a sideways pattern with a chance for a slight bounce if a traditional increase in consumer purchases prior to the Fourth of July is realized. However, after the holiday the chances of any more fireworks in the market appear slim, according to Dale Durchholz, AgriVisor market analyst. The USDA cattle on feed report released Friday, which was nearly an exact match to traders’ expectations, confirmed a large increase in FarmWeekNow.com feedlot placements (2.02 million Visit FarmWeekNow.com to head, up 21 percent from last year). check out the latest cattle-onThe large increase is partially feed report. explained by a rebound from last year’s dramatic 14 percent decline in May placements. But the extra animals and heavy weights (see graphic) still could weigh the market down. “It appears there will be a lull in the feedlots in the summer, then we’ll really push a lot of animals (through the system) later in time,” Durchholz said. “If there is a big bulge in cattle coming, that puts a real cautionary note in the market.” Cattle producers should keep an eye on future placement numbers to gauge the potential for a glut of animals that could stifle the market, according to the analyst. This week’s quarterly hogs and pigs report also could impact the cattle market. “If (the hogs and pigs report) shows expansion, it could create problems in the cattle market,” Durchholz said. — Daniel Grant

FarmWeek Page 11 Monday, June 21, 2010

PROFITABILITY Corn Strategy

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

Wheat fundamentals improving Quietly, the oppressively negative wheat fundamentals slowly have been getting a little better. The initial 2010/2011 ending stocks-to-use ratio for total world wheat production and consumption was 29.6 percent, as large as it was last year. USDA’s June forecast lowered it to 29 percent based on smaller output expectations. Given the recent planting issues in Canada, it should be smaller yet. Still, it’s far from the extremely tight situation that occurred in 2008 when it was at 20 percent. Even last year’s 29.6 percent paled in comparison to the record levels from the late 1980s and again in the early 2000s that were in the mid-30s. We like to watch the fundamental structure of wheat outside of the U.S. as it provides a better gauge for export demand. We further exclude China because the government control there has kept China from being a significant player in recent years. Still, China’s may be the

Basis charts

most significant crop of any in the world. The Chinese have the largest crop of any country by far. On a normal year, their output is 16 to 17 percent of the world’s total. The last couple of years the Chinese exported modest amounts to some Asian countries. But over the last 15 years, the modest imports over a twoyear span (2003 to 2005) was the only time they had even a modest impact on world trade. The last two years exceptional crops allowed Russia and the Ukraine to dominate world trade. This year’s output is expected to be slightly lower. Dry weather in parts of the European Union (EU), and heavy rains in other parts could trim the expected increase in the EU this year. But, Canadian problems may be the most significant, at least for the immediate future. The Canadian Wheat Board reported 12.5 million acres, or 20 percent of the western crop areas, may not get planted this year because of the persistent rain delays. Three million of that could come from wheat. Crop insurance planting deadlines will have passed by this week. A 3-million-acre decline in wheat plantings could cut output as much as 3 million metric tons, 13 percent down from earlier estimates. The stocksto-use ratio outside of the U.S. and China would drop close to 19 percent from the current 19.6 percent estimate. The stocks-to-use for the world total would fall to 28.6 percent. Fundamentals are still far from being as good as they are for oilseeds and coarse grains, but the shift, along with investment money turning to riskier assets again, could bolster wheat prices modestly this marketing year. AgriVisor endorses crop insurance by

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

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

309-557-2274

Cents per bu.

2009 crop: The shortterm trend has turned up out of the 40-week low. Because it’s so early in the move up, prices could hold firm into early/middle July. Use a rally to $3.70 on July for catch-up sales. 2010 crop: Use rallies above $3.75 on December futures ahead of the June 30 USDA acreage report for catch-up sales. Because it’s early in the current price cycles, the best pricing opportunities might not come until early to middle July. If December closes above $3.82, the rally could extend into the $3.90s. Plan to add to sales should that occur. Fundamentals: The June 30 planting number and summer weather have become more critical in the wake of stronger demand for processing into ethanol. Generally, the trade is expecting the acreage estimate to increase 1 million from the March estimate. Even though the current crop condition is very good, the possibility of seeing a La Nina in the Pacific has raised the risk of drier late-summer weather.

Soybean Strategy 2009 crop: Disappointing demand numbers are keeping a lid on prices. A July close above $9.60 would open the door for further shortterm gains, but even then, a move above $10 is unlikely. We’d use rallies within those parameters to wrap up sales. 2010 crop: The confirmed turn in the short-term trend suggests the window to make sales could extend into early July. Hold off catch-up sales unless November rallies to $9.50 ahead of the June 30 reports. Fundamentals: Newcrop variables both here and elsewhere in the world will dominate the fundamental structure. The June 30 acreage report will be significant, but weather here and in other countries is becoming a significant influence, especially with the possibility of a La Nina developing in the Pacific Ocean. At the same time, investment money seems to

have become more risk oriented, a move that will help support commodity prices.

Wheat Strategy 2010 crop: Weather problems in other countries triggered the surge in wheat prices. Chicago September futures look poised to push near $5. Use a rally near that to price 60 percent of any wheat that needs to be sold at harvest. If you can store wheat on the farm, it may pay to do so further into summer. It’s a more difficult proposition to make commercial storage pay.

Fundamentals: Even though world supplies are large, scattered weather problems are slowly cutting into output this year. Soft red wheat cash prices are holding up better this year because the sharp cut in output has brought more balanced fundamental structure. Low protein on hard red winter wheat may shunt more of that crop into the feed. The cut in Canadian plantings may be the most important feature and could shift the market leadership to the hard red spring wheat market.

FarmWeek Page 12 Monday, June 21, 2010

PERSPECTIVES

Taxing has become a weighty issue Politicians across America want to raise the cost of drinking. This year alone, they’ve called for new taxes on soda pop and other non-alcoholic beverages in at least 20 states and cities. There’s even talk about action on the federal level. What’s behind this percolating movement? One motive is government’s insatiable thirst for revenue. Another is a desire to reduce BILL HORAN obesity, especially guest columnist among kids. They often work in cahoots: Let’s raise taxes to save the children, say advocates. Yet raising taxes isn’t a good way to balance budgets or encourage healthier drinking habits. There is, in fact, a much better approach — one that avoids a tax hike and nudges consumers toward better habits while also preserving their freedom of choice. Let’s start by pointing out that much of what fuels the drive for new taxes on soda-pop is a governmental money grab, plain and simple. The economy is rotten and politicians are trying to squeeze everything they can out of taxpayers. In the state of Washington, they’ve uncorked a new soda-pop tax: 2 cents on every 12 ounces purchased. This may not sound like much. It’s a little more than a dime for a 2-liter bottle of Coke and a little less than a quarter for a 12-pack of Pepsi. But it does raise the cost during the worst economy of our lives. Does this make sense?

Moreover, it would be a mistake to assume that the politicians will stop at a couple of pennies. Once they’ve established soda pop as a legitimate category of special taxation, they will raise its price whenever they stumble into a new budget crunch. No matter what the politicians promise, this should not be viewed as a one-time emergency measure. It’s a bold move to create a permanent stream of revenue for a government that refuses to confront its own profligacy. Cities have been especially aggressive in pushing for soda-pop taxes: Philadelphia, San Francisco, and Washington, D.C., have debated proposals. Many of these efforts have failed, but this has done nothing to deflate the hopes of would-be taxers. “How could you be discouraged when major cities and states all over the country are considering the idea?” asked Kelly Brownell, director of the Rudd Center for Food Policy and Obesity, in the “Wall Street Journal.” Last year, she wrote an article for the New England Journal of Medicine that called for a federal soda tax. Don’t discount that possibility. President Obama has spoken favorably about the idea of a special tax on food and drinks that use high-fructose corn syrup (HFCS) as an ingredient. The idea came up during the debate over health care. It wasn’t part of the final package, but it may receive fresh

consideration as the law’s true costs become apparent. Many of these tax proposals are disguised as compassion for children. We have to raise taxes on soda pop, say many advocates, so that kids will quit growing fat from drinking it. But think about the fundamental contradiction: The tax-raisers want to balance budgets via consumers who drink a lot of soda pop, while the nutritionists want to use taxes as a tool for reducing consumption of these same products. There’s no way both groups can achieve their goals. Robert Paarlberg of Wesleyan College — one of the most sensible voices in the arena of food policy — has proposed a worthy compromise. He suggests banning sugary drinks from food-stamp eligibility. Currently, the federal govern-

ment spends about $58 billion on food stamps and roughly one in eight Americans receives them. The beauty of this idea is that it would end a government subsidy and, in doing so, promote healthier

drinking habits without trying to legislate them through tax policy. Anybody who opposes this sensible idea probably isn’t serious about public deficits or childhood obesity. Bill Horan grows corn, soybeans, and grains in northwest Iowa. Horan volunteers as a Truth About Trade & Technology board member and may be reached at {www.truthabout trade.org}.

Gulf oil disaster is another reason to support biodiesel Do you run your car on soybeans? You could if it has a diesel engine. Doing so would help make us more energyindependent and would be better for our environment. We’re used to hearing about the “oil crisis” LYNNE FINNERTY — the limited supply of oil and the billions of dollars sent overseas to buy oil from unstable countries. Now, the first oil crisis has been overshadowed by what you could call a second oil cri-

LEADER TALK: What is the most challenging issue facing agriculture today? Editor’s note: Members of the Illinois Farm Bureau GrassRoots Issue Teams (GRITs) were asked for their views on several questions. Their responses will appear periodically on the Perspectives page.

sis — the Deepwater Horizon oil spill that is spewing thousands of barrels of oil a day into the Gulf of Mexico. We need all the energy we can get, and oil is a necessary ingredient in the total fuel mix. As much as we all hate to see the situation in the Gulf and the unsuccessful efforts to stop it, none of us is volunteering to give up our cars or, for that matter, eating food, which takes energy to produce. The public seems to realize this. However, this second oil crisis should bring new urgency to our national efforts to increase the supply of renewable fuels, such as biodiesel

“Government over-regulation.”

made from soybeans. We’ve made great strides in the last few years. A $1-per-gallon federal tax credit has helped biodiesel compete with oil. Since the tax credit was established five years ago, 150 new biodiesel refineries have been built in 44 states and more of us are running our cars on soybeans. Now those gains are threatened because Congress has been slow to act in renewing the tax credit, which expired at the end of 2009. Since then, between 40 and 50 of the nation’s 173 biodiesel plants have shut down. The National Biodiesel Board has estimated that if the tax

“Affecting change in an environment in which fewer of the U.S. population understands agriculture.”

credit is renewed, most of those idled plants would come back online and the 8,000 to 11,000 jobs that have been lost since January would be restored immediately. So, in addition to helping address both the first and second oil crises, economics are another reason for supporting biofuels. The U.S. House of Representatives recently passed the American Workers, State, and Business Relief Act of 2010, which would reinstate the biodiesel tax credit. Now, it’s the Senate’s turn to act. So how do we keep our vehi-

cles, our tractors — and our economy — fueled up? The logical solution is producing more renewable fuels such as biodiesel, with the tax credit restored to help bring in the investment dollars needed to grow the industry. Can we count on the Senate to address both of our oil crises, save jobs, and keep us on a path to meet more of our energy needs from homegrown fuels? Ask your senator today! Lynne Finnerty is the editor of FBNews, the official newspaper of the American Farm Bureau Federation. Her e-mail address is lynnef@fb.org.

“Profitability for the farmer — input costs/market conditions which are uncontrollable unless contracts are

“The ability to change in order to be profitable.”

in place.”

Eleanor Zimmerlein Lee County

Glen Ludwig Livingston County

Carol Meyer Randolph County

Sam DeNeal Saline County