FarmWeek March 22 2010

LEGISLATION THAT would allow landowners to obtain answers about longwall mining was stymied last week, but the sponsor vows to press on. ...........................................3

FARM BUREAU MEMBERS have only a couple of weeks left to complete and submit petitions for the Illinois Fair Map Amendment Initiative. ..........................................3

Monday, March 22, 2010

USDA AND THE U.S. Department of Justice launched a sweeping look at ag concentration in the first in a series of joint public workshops.

Monsanto was a focus. ......................4

Two sections Volume 38, No. 12

State’s money woes cast shadow on legislative day

BY KAY SHIPMAN FarmWeek

Periodicals: Time Valued

Hundreds of agricultural leaders from across Illinois last week urged state legislators to support agricultural programs, but the state’s financial problems remained in the forefront.

“Anything you can do to make the GRF (general revenue fund) more robust would be appreciated,” Illinois Agriculture Director Tom Jennings told leaders gathered in SpringTom Jennings field for Agricultural Legislative Day. Jennings reminded leaders the Illinois Department of Agriculture (IDOA) partially relies on GRF to support its programs. Gov. Pat Quinn has proposed cutting $6.9 million from IDOA’s budget.

“I understand we (IDOA) have to take our cuts,” Jennings told FarmWeek. “But I was glad we did as well as we could.

It demonstrated the governor understands the importance of IDOA and the regulatory programs it administers.”

However, Jennings offered

no assurances for pass-through programs, such as the Council on Food and Agricultural Research and others whose appropriations were eliminated or severely cut.

“IDOA has enjoyed partnerships with everyone who is being cut in the budget. There are no choices unless you come to the table with fees or ways to fund the pass-through grantees,” Jennings said.

Ryan Croke, Quinn’s deputy chief of staff, reassured ag leaders that the governor is aware of the tough situation. “I feel the agricultural community is enduring, persistent, and resilient. You make good things happen every day,” Croke said.

Ag leaders lobbied for several pieces of legislation that

More Ag Legislative Day coverage on page 3 were debated in committees and on chamber floors. In the House, concerns about farmers’ use of all-terrain-vehicles are addressed in HB 6094, sponsored by Rep. Emily McAsey (D-Lockport). The bill is up for a final vote on the House floor. Previously, the Senate passed SB 2566, which also addresses the issue.

HB 6142, a bill that would deal with nuisance lawsuits on proposed livestock facilities, will be held in the House Judiciary Criminal Law Committee; however, IFB plans to work with its sponsor, Rep. Rich Myers (R-Colchester), and others on a possible agreement after the legislative session.

An effort to ensure agriculture would be represented on the University of Illinois Board of Trustees was defeated.

HB 4608, sponsored by Rep. David Reis (R-Willow Hill), was defeated on a 44-to69 vote. The bill would have required at least one appointed trustee have an agricultural background.

Craig Gathmann, a farmer from Manito, poses near a flooded field south of Havana off Route 97 in Mason County. Gathmann last harvested a crop (corn and popcorn) at the site known as “sand lake” in 2008. Since then the water table has risen and created a lake, which as of last week was as much as 4 to 5 feet deep.

“After two years of record rainfall, that’s what you get,” Gathmann said. He believes it could be July before all the water recedes. “The only outlet is the Illinois River,” he said. “As long as it (the river) stays up, it will take a while to drain.” The sign at right is very appropriate: Gathmann is kneeling on a high spot in the road with the submerged surface behind him. (Photo by Ken Kashian)

Meteorologists predict another late planting season

BY DANIEL GRANT FarmWeek

Spring officially sprung on Saturday, heralding a new season, but the weather pattern in coming months is expected to remain much the same as the past two years — cool and wet.

Bryce Anderson and Mike Palmerino, Telvent DTN ag meteorologists, last week predicted another active weather pattern this spring likely will create more headaches for farmers as they try to catch up on fieldwork from last year and plant this season’s crops.

“I wish I could be the bearer of good news to producers, but once again it looks like it could be a tough spring,” Palmerino said during a spring outlook webinar. “Some areas (of the Corn Belt) are much wetter than a year ago.”

Precipitation in Illinois the previous two years averaged a total of 100.8 inches, which was 22.4 inches above normal, according to the Illinois State Water Survey.

The addition of heavy winter snowfall, which currently is melting in the north and creating floods in the Red River Valley and along the Mississippi River, will delay the improvement of soil conditions.

“Certainly, wetter soils are slower to respond to increasing sunshine,” Palmerino said. “Soil

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temperatures likely will continue to lag behind normal.”

Meanwhile, lingering El Nino conditions in the Pacific Ocean and “high-latitude blocking” in the atmosphere above North America likely will lead to a cool and wet spring.

Highlatitude blocking occurs when a boundary zone forces cold air into the U.S. from Canada that collides with warm, moist air from the Gulf.

The frontal boundary, which is a lightning rod for weather disturbances, currently runs east and west through the heart of the Corn Belt, according to Palmerino.

“That puts a wetter scenario into the Midwest,” Anderson said of his spring weather outlook. “A favorable planting season is on the low end of the probability scale.”

Palmerino said Illinois farmers will be lucky this season if they can plant 10 percent of the corn crop by April 20, which has been the normal pace the past five years.

“I think farmers could struggle to get the crops in the ground by the optimal dates,” he said.

At this point, farmers may just be hoping for a better season than last year, when only 5 percent of the corn crop was planted as of May 1 due to numerous weather delays.

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

FarmWeek Page 2 Monday, March 22, 2010

Quick Takes PRIMARY MOVES BACK TO MARCH — Gov. Pat Quinn last week signed legislation that moves the general primary election back to the third Tuesday in March of even-numbered years. This year, the primary was held on the first Tuesday in February. The law takes effect in 2012.

SB 355, sponsored by Sen. Deanna Demuzio (D-Carlinville) and Rep. Elaine Nekritz (D-Northbrook), passed easily in the General Assembly. In 2007, the General Assembly moved the primary up to ensure the election would be relevant in the 2008 presidential election.

However, the earlier primary coupled with bad winter weather was blamed for low voter turnout this year.

‘MEATOUT DAY’ BLASTED — National Agriculture Day (March 20) may not have been as much of a celebratory occasion in Michigan as it was in others parts of the country.

Michigan Gov. Jennifer M. Granholm angered a large portion of her state’s ag industry by declaring the day “Michigan Meatout Day.” The Michig an state g over nment, at the website {www.michigan.gov}, announced Meatout Day by promoting the “benefits of a plant-based diet” and by claiming “reducing the consumption of meat or not eating meat at all can significantly decrease the exposure to infectious pathogens.”

Wayne H. Wood, president of the Michigan Farm Bureau, blasted the governor’s proclamation and called it “unconscionable and an insensitive slap in the face to Michigan’s livestock and dairy farmers, not to mention Michigan’s meat-eating residents.”

Agriculture in Michigan is a $71.3 billion industry, according to the Farm Bureau.

“T he fact that Granholm’s proclamation states unfounded facts and allegations toward meat products indicates the governor’s desire and willingness to court special-interest groups to the demise of a major state industry,” Wood said.

He noted the USDA Food Pyramid Guide recommends two to three servings of lean meat per day, depending on a person’s age.

EPA SEEKS VIEWS ON PROTECTING WATER — The U.S. Environmental Protection Agency (EPA) is seeking online public input on how the agency can better protect and improve the health of the nation’s bodies of water. Go online to {http://blog.epa.gov/waterforum}.

Through this week, EPA is holding a web discussion forum on how the nation can better manage some of the nation’s most significant water pollution problems. Information from the online forum will help shape the discussion at an EPA water conference in April.

EPA wants input from water professionals, advocates, and anyone interested in water quality about ideas on how to control water pollution.

(ISSN0197-6680) Vol. 38 No. 12

March 22, 2010

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RENTS/RECOGNITION

Cash rents projected to remain flat

BY DANIEL GRANT FarmWeek

There were scattered reports this year of some large increases in cash rental rates around the state.

But, for the most part, cash rents are expected to remain steady or even be slightly lower in 2010 compared to 2009, according to a member survey of the Illinois Society of Professional Farm Manager and Rural Appraisers (ISPFMRA).

“My gut feeling is the rapid advancement of cash rents may have slowed,” said Bret Cude, president of ISPFMRA. Average cash rents in the state last year ranged from a low of $100 per acre for average/fair land to as much as $375 per acre in Northern Illinois and $400-plus per acre in Central Illinois for excellent ground.

“I’m always amazed at the range given for different types (of farmland),” said Gary Schnitkey, University of Illinois farm management specialist, who is the head of the ISPFMRA survey. “Overall, I don’t expect a lot of change (in rental rates) from 2009 to 2010. If anything, they may have decreased a little bit.”

Steve Myers of Busey Ag Services in LeRoy said cash rental rates are very specific to geographic locations.

For instance, the highest average cash rent for an Illinois county in 2008 was $224 per acre in Sangamon County compared to an average of $190 per acre in nearby McLean County.

“There are some high, high rates being paid by people who possibly can do it and some by people who can’t do it,” Myers

said. “One thought process is ‘I’m paying too much, but I don’t want to lose this ground.’ But that only works to a point.”

Kent Meister of Pioneer Farm Business Farm Management Association in Bloomington reported some farmers last year lost as much as $100 per acre. Some could have made high cash rents work, but drying costs that were 50 to 75 percent higher than anticipated flipped some income statements upside down, he said.

Myers suggested farmers analyze their breakeven points to establish what they can afford to bid for cash rents.

ISPFMRA members also suggested farmers and landowners consider some type of flex lease or variable cash rent agreement that removes some of the risk from input costs and yield variation.

“You’re sharing some of the risk and upside potential (with a flex-lease arrangement),” said Richard Grever of Hertz Farm Management in DeKalb.

Illinois teacher, county Farm Bureaus honored for ag literacy An Illinois teacher last week was one of 10 honored nationwide by the American Farm Bureau (AFB) Foundation for her efforts in promoting agricultural literacy.

Linda Bush, a teacher at TriCounty Christian School at Freeport in Stephenson County, will receive a $1,500 scholarship to attend the National Agriculture in the Classroom Conference in Baltimore, Md., in June.

Her scholarship was sponsored by the foundation in cooperation with the AFB Women’s Leadership Committee.

In other ag education news, the foundation awarded nine Illinois county Farm Bureaus $500 mini-grants each for agricultural education efforts. The grants are funded through the White-Reinhardt Fund for Education program and are awarded for new projects or to extend existing ones.

The county Farm Bureaus and their projects are: Bureau

County Farm Bureau, farmrelated books and puppets; Carroll County Farm Bureau, commodity kits; Christian County Farm Bureau, display of crops grown in the county; and Clark County Farm Bureau, school kits with a teacher’s guide, books, and other supplies.

Also: Cook County Farm Bureau, lessons for ag educators using a SMART board, an interactive, electronic whiteboard; Effingham County Farm Bureau, ag ed kits for county elementary schools; MarshallPutnam Farm Bureau, Farmer Mac’s farm kits for schools; Peoria County Farm Bureau, SMART board to enhance ag lessons; and Pope-Hardin Farm Bureau, microscope for chick embryo lessons in life science classes.

The winners were selected based on the effectiveness of their programs to encourage students to learn more about agriculture and to make a strong link between education and agriculture.

BASKET ASSEMBLY LINE

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

Richard Verdery Classified sales coordinator

Nan Fannin Director of News and Communications

Dennis Vercler Advertising Sales Representatives

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

Some of the 700 FFA members and advisers from across Illinois filled baskets with Illinois products last week during Illinois Agricultural Legislative Day in Springfield. Illinois ag and commodity groups donated products and food for meals and baskets for each state legislator and the state’s constitutional officers. (Photo by Ken Kashian)

FarmWeek Page 3 Monday, March 22, 2010

GOVERNMENT

Senator vows to continue push for mine hearing bill

AG LEGISLATIVE DAY CHAT

BY KAY SHIPMAN FarmWeek

A bill that would allow landowners to obtain answers about longwall mining from the Department of Natural Resources (DNR) and coal mining companies was stymied last week, but Sen. Kyle McCarter (R-Lebanon) told FarmWeek he plans to keep fighting for SB 3107.

“When I believe in something, I push it to the end,” McCarter said. To keep the bill alive, he sent it to the coal mining subcommittee of the Senate Agriculture and Conservation Committee after the coal industry secured enough no votes to defeat it in committee.

SB 3107 would apply to the coal-mine permitting process the same public meeting option that has been used for years to site livestock facilities under the Livestock Management Facilities Act. The bill would give a county board the option to call for a public meeting about a proposed longwall mine. Representatives of DNR and the coal mining company would be required to attend, explained Bart Bittner, Illinois Farm Bureau associate director of state legislation. Bittner last week testified in support of SB 3107.

SB 3107 would allow the public to ask questions, especially about the reclamation process, and receive answers. The county board could make a non-binding recommendation to DNR about the issuance of a mining permit.

“Under the current process, DNR has a hearing, but doesn’t have to answer landowners’ questions, and the coal company doesn’t have to participate in the hearing,” Bittner explained.

McCarter added he worked for a year to develop the bill and met numerous times with landowners and DNR officials, but representatives of the coal industry refused to compromise.

“I’m in favor of coal mining and in favor of preserving farmland,” McCarter said. “Illinois is No. 1 in agriculture, and the landowners and those who farm the land deserve answers.”

McCarter encouraged Farm Bureau members to ask their legislators to support SB 3107.

Sen. Dale Righter (R-Mattoon), right, discusses agriculture issues with Scott County Farm Bureau President Mark Vortman, left, and Pike County Farm Bureau board member Kim Curry. On Illinois Agricultural Legislative Day, hundreds of ag leaders lobbied lawmakers to support agricultural programs and address challenges. (Photo by Ken Kashian)

IFB makes final push to put initiative on ballot Members reminded to send petitions Farm Bureau members have only a couple of weeks to complete and submit petitions for the Illinois Fair Map Amendment Initiative.

The initiative seeks to put a

Many state public records, documents are now online The state recently launched a new one-stop online location where the public may view many public records and documents.

The site {www.sunshine.illinois.gov} offers a variety of information.

Internet users will be able to access detailed information on

state expenditures, track grant awards, and review inspection reports on such public facilities as schools, hospitals, and nursing homes.

YOUNG CONSTITUENTS

proposal to amend the state Constitution before voters in November.

The amendment would change the method used to draw state legislative districts.

IFB’s goal is to have petitions at the IFB state office

by April 2, according to Kevin Semlow, IFB director of state legislation.

He encouraged everyone to send the petitions as soon as possible.

Semlow and IFB Director Terry Pope, who chairs the IFB Legislative Redistricting Working Group, thanked Farm Bureau leaders and managers for their efforts.

“It’s been a big program.

I’d like to thank everyone who has participated by carrying petitions and signing petitions,” Pope said.

He also thanked the

League of Women Voters for leading the redistricting issue.

“We don’t know what the results (of the petition) drive will be, but we brought this issue to the forefront of the state and many state representatives and senators are aware of that,” Pope said.

Semlow reminded members that petitions must be signed by the person who circulated them and notarized before they are mailed to Kayla Arnolts, IFB governmental affairs division, 1701 Towanda Ave., Bloomington, Ill., 61701. — Kay Shipman

Ag scholarship digest

Sen. Tim Bivins (R-Dixon) chats with FFA members, left to right, Megan Howard of Oregon, William Henert of Ashton-Franklin Center High School, and Kayla Jones of Oregon. FFA members from across the state discussed issues with state legislators and also helped prepare and deliver lunches and baskets filled with Illinois ag products on Agricultural Legislative Day. (Photo by Ken Kashian)

Illinois Pork Producers Association Scholarship — Nine students will be awarded $7,500 in scholarships: three for $1,250 each; three, $750 each; and three, $500 each.

Applicants must be currently enrolled as undergraduates or enrolled to start college in fall 2010 at any two-year or four-year college. Applicants must submit a completed application, transcripts, a list of activities, and an essay.

Application deadline is April 1.

For more information or an application, go online to {www.ilpork.com} or call 217-529-3100.

Ryan & Friends Scholarship — The Illinois Purebred Swine Council will award four scholarships of $500 each.

Applicants must attend a university, college, or community college in fall 2010.

Applicants must have been a 4-H or FFA member. Applicants must complete an application form, provide transcripts, list of achievements and activities, statement of financial need, and an essay.

Application deadline is April 1.

For more information or an application, go online to {www.ilpork.com} or call 217-529-3100.

FarmWeek Page 4 Monday, March 22, 2010

GOVERNMENT Congress has the time ...

But where’s the $$ for the next highway bill?

BY MARTIN ROSS FarmWeek

Congress now has the time to plot a new long-term transportation strategy, but with money a key roadblock, hopes for an infrastructure overhaul are “mired in mud and going nowhere.”

So says American Association of State Highway and Transportation Officials (AASHTO) CEO Jack Basso.

AASHTO seeks a $545 billion transportation bill that would boost annual federal highway funding from an initial $50 billion to $75 billion over a six-year period.

Currently, a combined roughly $90 billion is spent annually at federal, state, and local levels for capital transportation projects nationwide, Basso said. The National Transportation Policy and Revenue Study Commission concludes $135 billion more is needed to “bring the system up to a condition and performance that meets the needs,” he related.

Illinois represents about 5-6 percent of annual funding — Basso stressed the state is a crossroads for national highway and freight rail systems and a major river shipper. But waterway needs are “ignored to a large degree” (see accompanying story), and support for projects such as Chicago Region Envi-

ronmental and Transportation Efficiency, a local/state/federal alliance, is needed to untangle current freight rail “strangleholds,” he said.

House “jobs” legislation approved in December proposed $27 billion in highway/transit funding, but the Senate voted instead for $15 billion to stabilize the U.S. Highway Trust Fund through Dec. 31. The fund, sustained by federal fuel taxes, finances a share of highway repairs and expansion.

AASHTO maintains a oneyear extension of highway programs will “provide enough time for Congress to develop and enact the multiyear highway and transit authorization that is needed for America’s economic recovery and job restoration.”

Senate Environment and Public Works Chairman Barbara Boxer (D-Calif.) pledged to begin formulating the next “highway bill” once the expired existing one was extended.

Beyond highway improvements, AASHTO proposes $42 billion for expanded freight transportation programs over a six-year period, “from new revenue sources yet to be identified.”

“Everyone has the same problem: how to pay for the bill,” Basso told FarmWeek.

“Right now, if you take the House plan, at $450 billion over six years, we’re probably about $160 billion to $180 bil-

lion short in revenues to be able to pay for a bill that big.

“There aren’t too many options. One is a user fee or

gas tax increase, but I haven’t seen anybody running around the Capitol begging for that lately.”

IFB mulls strategies to move ahead with locks As Illinois Farm Bureau and others seek long-term funding for modern Midwest locks, transportation experts are eyeing possible ways to navigate through or around an increasingly difficult congressional appropriations process.

The IFB board has voted to support a proposed increase in barge fuel taxes designed to shore up the flagging Inland Waterways Trust Fund. The fund is slated to provide half the cost of building seven up-to-date 1,200-foot locks on the Illinois and Upper Miss, but trust fund revenues have fallen short of anticipated needs.

Congress approved construction of new locks in 2007, but budget-conscious lawmakers to date have approved little more than basic pre-construction engineering and design funds, and lock completion remains dependent on annual appropriations.

U.S. Senate Appropriations Committee member Dick Durbin, a Springfield Democrat, recently told IFB Leaders to Washington that lock construction represents good jobs and serves the public. But a Durbin aide stressed “for new (construction) starts, we’re going to need a fix to the Inland Waterways Trust Fund” to match prospective federal spending.

The federal advisory Inland Waterway Users Board is set to review final details of an industry plan that recommends increasing fuel taxes 30 to 45 percent (6 to 9 cents per gallon) to generate $110 million in annual trust fund revenues.

The plan, developed in conjunction with the U.S. Army Corps of Engineers, proposes a schedule that could launch construction at Cal-

houn County Lock 25 by 2011, Pike County Lock 22 in 2022, and Calhoun County Lock 24 in 2024.

It would limit trust fund cost-sharing to locks, with 100 percent federal funding of dam construction now included in the 50-50 mix.

Further, Kevin Johnson, aide to Urbana Republican Rep. Tim Johnson, suggested lawmakers consider including lock funds in 2011 transportation-infrastructure legislation. Inclusion of start-up funds in the transportation bill could show appropriators “we’re making progress,” he told FarmWeek after meeting IFB Young Leaders.

Meanwhile, American Association of State Highway and Transportation Officials CEO Jack Basso sees existing funding options to help bolster waterways efficiencies.

For example, newly passed jobs legislation expands the federal Build America Bond program, which addresses state and local infrastructure needs, to fund large-scale projects.

The program, created in 2009, offers tax credits for bond issuers or holders to reduce project borrowing costs, and Basso suggests it could help fund lock construction.

He also urges lawmakers to “unlock” longheld revenues from the Harbor Maintenance Trust Fund, which taps taxes from cargo moving through federally maintained channels and harbors. The fund is designated primarily for navigational dredging, but in fiscal 2008, Congress released less than 5 percent of available fund revenues for pressing projects. — Martin Ross

Biotech concentration focus in opening ‘workshop’ USDA and the U.S. Department of Justice (DOJ) at their first in a series of joint public workshops launched a sweeping look at ag concentration with an overview of livestock markets and biotech competition issues that could impact the seed industry and growers for years to come.

The “Agriculture and Antitrust Enforcement Issues in Our 21st Century Economy” workshop drew comments and concerns from crop and livestock producers, university economists, lawmakers, state attorneys general, and Monsanto Vice President for Industry Affairs Jim Tobin.

Monsanto’s influence in the biotech market was a key focus in the workshop’s review of what GROWMARK policy analyst Chuck Spencer termed “accessibility — and competitive accessibility — to seed products and traits,” as well as trans-

parency in seed pricing.

Illinois Farm Bureau senior commodities director Tamara White noted “there hadn’t been a meeting like this (held in Iowa) in a long

and Stockyards Act. However, Senate Ag Committee member Charles Grassley (R-Iowa) argued the need for stronger DOJ ag competition guidelines and

‘Once (a trait is) off-patent, you shouldn’t have anyone trying to control it.’

— Chuck Spencer GROWMARK

time.” Amid growing complexity in concentrationcompetition issues, USDADOJ cooperation is “long overdue,” White said.

DOJ Assistant Attorney General for Antitrust Christine Varney offered the services of department attorneys to help USDA scrutinize practices particularly under the federal Packers

enforcement, and IFB general counsel Jerry Quick argued DOJ “needs to be more proactive” in addressing ag antitrust concerns.

“Big is not necessarily bad, but if a company with monopoly power engages in predatory practices in violation of antitrust laws, then the courts should address and deal with such con-

duct,” noted IFB counsel Laura Harmon.

Harmon is closely watching an ongoing lawsuit between Monsanto and DuPont-Pioneer over the latter’s use of Monsanto’s Roundup Ready herbicide tolerance trait in a combined “stack” with DuPont’s own Optimum OGAT trait.

A St. Louis federal court rejected DuPont’s claim it was within its rights to stack the Monsanto and Optimum traits under the terms of its Roundup Ready licensing agreement, but is continuing to review DuPont’s charge that Monsanto has engaged in anticompetitive practices.

The case takes on a crucial dimension as growers and the seed industry mull 2014 expiration of Monsanto’s patent for its original “Roundup Ready I” soybean trait. Once “off-patent,” other companies legally can use Roundup Ready I (dubbed “generic Roundup Ready” by

Monsanto) license-free.

However, some have questioned whether seed marketers will be able to successfully do so, given Monsanto’s market dominance and potential competition between varieties incorporating Roundup Ready I and those with second-generation Roundup Ready traits.

Harmon is concerned by allegations raised by DuPont and Pioneer that Monsanto has conditioned availability of Roundup Ready I supplies on dealers contracting to continue carrying Roundup Ready 2 varieties and speculation that Monsanto could move to restrict stacking of Roundup Ready I with other technologies.

DOJ’s Varney pledged to monitor off-patent traits for monopolistic practices.

“Once it’s off-patent, you shouldn’t have anyone trying to control it,” Spencer said.

— Martin Ross

FarmWeek Page 5 Monday, March 22, 2010

YOUNG LEADERS

YLs help aide ‘get ahead’ of farm bill debate

BY MARTIN ROSS FarmWeek

Illinois Farm Bureau Young Leaders last week offered input on the next farm bill — a debate that could see a shift from direct payments, pressing questions about ag risk management needs, and regional redistribution of congressional clout.

Growing federal budget pressures and the potential implications of forthcoming congressional redistricting are two key factors spurring House Ag

Committee Chairman Collin Peterson (D-Minn.) to push forward with initial discussions on the next farm bill, according to Kevin Johnson, aide to Urbana Republican House Ag Committee member Tim Johnson.

Farm bill hearings are to begin this spring, continuing through summer. Development of a draft “2012” bill may start this fall, with debate kicking into gear by January.

“I’m trying to get ahead of the issue for the congressman (Johnson) and see what Farm

Scott Taylor (red shirt) of Taylor Farms in Florida, discusses tomato production methods with participants of the Illinois Farm Bureau Young Leader Ag Industry Tour. Taylor showed the Young Leaders how Florida farmers create an irrigation strip, which will be covered in plastic, to provide a “greenhouse” for tomato seeds. (Photo by Jennifer Smith, IFB Young Leader manager)

YL Ag Industry Tour an ‘eye-opening’ experience

BY DANIEL GRANT FarmWeek

The Illinois Farm Bureau Young Leader Ag Industry Tour this month in Florida was an “eye-opening” experience, according to Jason Bunting, Young Leader State Committee chairman from Livingston County.

The 36 IFB Young Leaders on the trip learned about different forms of agriculture, such as citrus production. They also learned how production practices in the Corn Belt can affect the Gulf, and they had a preview of how new regulations can affect the livestock industry.

“There are more than 300 commodities produced in the state (of Florida),” Bunting said after the early-March tour.

“It was very eye-opening for the group.”

The Young Leaders toured a hydroponic operation; the Southern Cattle Co., which produces a large volume of Angus and Charolais bulls specially bred to perform well in the Gulf Coast region; and a honey bee operation.

Monica Stevens, committee member from Knox County, said the tours stressed the importance of bees to agriculture and provided her with some new ideas

for conservation practices.

“Bees pollinate 80 percent of the fruits, vegetables, and nuts,” Stevens said.

Meanwhile, Young Leaders received first-hand accounts of how the hypoxia zone in the Gulf of Mexico, for which nitrogen runoff from the Corn Belt often is blamed, has a negative effect on ocean life and the fishing industry.

“They were able to stress the importance of a nutrient management plan,” Bunting said.

Young Leaders also heard from a former hog producer in Florida who claimed the state’s ban on gestation crates, which was passed by a voter initiative in November 2002 and went into effect in 2008, helped put him out of business.

“They said (the outlawing of gestation crates) pretty much destroyed the hog industry” in Florida, said Tom Flack, IFB Young Leader Committee member from Stephenson County.

Young Leaders could learn more about that issue next year as the Young Leader Ag Industry Tour will take place in Arizona.

Arizona voters in 2006 passed a similar measure that banned the use of gestation crates.

Bureau, what young people, what Illinois farmers want to see in a farm bill,” the aide told FarmWeek after meeting with Young Leaders in Bloomington.

“I think we are going to have to make tweaks to the (next) farm bill, and we need to be ahead of that game now. Will some of this money go more to crop insurance, so people will get higher coverages with lower premiums? Will we see the ACRE (average crop revenue election) program go county-bycounty and cut direct payments?

This is all on the table.”

In today’s spending environment, “everything’s about budget ‘baseline’,” the starting point in determining long-term program needs, he noted. The administration has proposed $10 billion in commodity, insurance, and conservation fiscal 2011 spending cuts — a threat to future farm bill baselines.

Peterson supports direct payments, but Johnson’s aide said he sees indications the administration will “go after” them.

Producers may have to consider

moving direct payment funding into other programs to avoid losing baseline dollars, and improved risk management is a likely direction, he said.

Higher crop premium subsidies could help growers afford expanded coverage. But a “standard reinsurance agreement” currently being negotiated by USDA and insurers could cut millions in company reimbursements, raising questions about their ability to weather a bad year, Johnson’s aide said.

Another possibility is shifting money into ACRE, which has received a lackluster reception.

ACRE coverage is based on national prices and state yields; Edwards County Young Leader Matt Lynch held “we’d be more receptive to ACRE if it were on a county-by-county basis” reflecting localized risks.

At the same time, Johnson’s aide noted predictions that Illinois will lose at least one seat through congressional remapping while southern states will gain seats.

He acknowledged “it’s pretty

easy to pass a farm bill through the Senate,” where lawmakers represent both urban and rural constituents, but shifts in House dynamics could complicate the debate.

Further, a regional shift could change the tenor of program debate. Southern growers are less likely to support bolstering crop insurance, something they see as largely ineffective.

Neither is ACRE seen as effective for cotton — still a key crop across the South — and Hancock County Young Leader Bryan Stevens questioned “why we have both” ACRE and crop insurance. Price-based loan deficiency payments (LDPs) are far more popular in cotton country, but Johnson noted LDPs “get a bad name even though we don’t get a payment.”

That brings the debate back to direct payments. However, DeKalb County’s Jeff Heinsohn notes growing perceptual challenges to payments made to larger producers and landlords.

“A direct ‘handout’ is hard to sell,” Heinsohn said.

FarmWeek Page 6 Monday, March 22, 2010

RURAL LIFE

Lawmakers to seek FCC’s goal: enhanced 911 systems high-speed

BY MARTIN ROSS FarmWeek

Help is three numbers away — if the right help is on the other end of the line, if a phone in the field makes the right connection, and if responders can pinpoint a remote address.

Southwest Jersey County is continually finetuning “enhanced” 911 services to help ensure rapid rural emergency response for its roughly 23,000 residents.

In neighboring Calhoun County, residents using low-tech “basic” 911 services sometimes are connected to emergency services in nearby Missouri — a potentially life-threatening error.

In an effort to plug gaps in emergency response systems, Collinsville Republican U.S. Rep. John Shimkus, chairman of the bipartisan Congressional E911 (enhanced 911) Caucus, is spearheading the Next Generation 911 Preservation Act. Beyond continuing a five-year federal grant program for the nation’s 6,000-some 911 call centers and programs, the act proposes improvements to the national E911 Implementation Office, which helps states upgrade technologies and coordinate services between call centers.

Currently, 85 of 102 Illinois counties have enhanced systems, with six more systems in development. Jersey County resident and Calhoun County Farm Bureau manager Brenda Bizaillion said enhanced service “makes you feel safe” and said she feels that greater reliability would greatly benefit Calhoun County.

Lacking enhanced technology in the county, Calhoun County Farm Bureau has urged rural residents to provide detailed premises identification and directions for emergency responders.

“Since we’re a peninsula between the Mississippi and Illinois (rivers), 911 calls sometimes don’t bounce to our Calhoun County sheriff ’s office,” Bizaillion added.

“Sometimes, they might bounce over to Mis-

souri — we’ve had that happen in the southernmost part of our county.”

The proposed upgrade in federal 911 resources comes amid fears that statewide budget cuts could threaten community emergency services. The Shimkus-backed bill prohibits state agencies from diverting 911 funds to other uses.

Jersey Countians pay a $2.50-per-line monthly phone surcharge to help sustain enhanced 911 service, but the initial cost of establishing enhanced service is daunting, said Jersey County enhanced 911 coordinator Emily Schulte.

Since 1998, when residents approved a referendum for basic service, the 911 system has been “a work in progress,” Schulte said.

Enhanced service was launched in 2008, following major computer upgrades, lengthy testing of local phone systems, and, with the help of an outside consultant, extensive “readdressing” — formatting local rural route/post office box numbers into easily identifiable home addresses.

When a 911 call comes in, the caller’s name and address are displayed and the address automatically charted on a county map.

Schulte uses satellite global positioning system (GPS) equipment to record geographical coordinates for each new structure or house and update maps when necessary.

As of March 1, the Jersey County system has been fielding local cell phone calls formerly routed to and transferred by the Illinois State Police.

While that could save lives, particularly in farm fields and feedlots, Schulte sees room for additional improvements — and funding support.

“We’re only required to have one (911) answering position, but we have two and we need two,” she told FarmWeek. “We could also utilize a third backup position when it gets really busy. And that all costs.’’

Internet for all KAY SHIPMAN FarmWeek

The Federal Communications Commission (FCC) last week unveiled an ambitious plan to ensure every American has access to high-speed Internet service within the next 10 years.

FCC wants an estimated 100 million Americans who currently lack broadband to have inexpensive Internet service at 10 times current speeds. The plan also calls for the U.S. to have the world’s fastest and most extensive wireless network by 2020.

FCC’s plan dovetails with the work of the Illinois Broadband Deployment Council, a public-private coalition that guides state efforts to expand broadband access and services.

“The plan reinforces many of the governor’s efforts to improve broadband infrastrucRyan Croke ture in Illinois,” Ryan Croke, Quinn’s deputy chief of staff, told FarmWeek. Gov. Pat Quinn chaired the broadband council as the lieutenant governor and continues to be involved in its work.

“We are delighted that the FCC has offered an ambitious, comprehensive vision for our broadband future,” Croke said.

Information about the broadband council is online at {www2.illinois.gov/broadband/Pages/default.aspx}.

To pay for the national plan, the FCC is proposing to sell 500 megahertz of spectrum, but notes its plan requires 10 times more unused spectrum than can now be offered.

Television stations have raised concerns that they will be forced to relinquish some of their frequencies, and some members of Congress have questioned the plan’s hefty price tag and how it may affect competition to provide broadband services.

FCC has posted its plan and related information online at {www.broadband.gov}.

DISTINGUISHED SERVICE AWARD

EPA fines IDOT for storm water violations The U.S. Environmental Protection Agency (EPA) Region 5 has fined the Illinois Department of Transportation (IDOT) for violating storm water rules with its Route 22-12 project in Lake Zurich.

According to EPA, IDOT violated water quality standards, and didn’t maintain proper erosion controls at the site, conduct inspections, or maintain proper records.

IDOT has corrected the problems and paid a

$100,000 penalty.

By issuing fines, EPA is sending a message to construction site operators, public or private, that storm water regulations must be met, according to the agency.

Incentives available for propane-fueled equipment use

BY DANIEL GRANT FarmWeek

Farmers interested in switching from gasoline or diesel to propane-fueled equipment can receive incentives ranging from $1,000 to $2,500.

The Propane Education and Research Council (PERC) is seeking a limited number of producers across the nation who are willing to use propane equipment in order to provide valuable feedback on the performance of that equipment in real-world applications.

“There are three big advantages with propane — economics, efficiency, and cleanliness,” Brandon Robinson, projects coordinator for PERC, told FarmWeek during the Commodity Classic in Anaheim, Calif.

Equipment that is eligible for the Farm Equipment Efficiency Demonstration

(FEED) program is an irrigation engine, a mower, and a tankless water heater.

The incentives range from $1,000 for the purchase and use of a propane-powered tankless water heater, $1,500 to $2,500 for an irrigation engine, and $2,500 for a mower.

“It’s a nice incentive to producers for this equipment, and they’re able to get the newest equipment out there,” Robinson said.

Propane-fueled engines reportedly are 20 to 33 percent more efficient than their gas and diesel counterparts and they provide a 9 to 48 percent improvement in the greenhouse gas emissions profile.

For information on the program and application process, visit the website {www.agpropane.com/FEED} or call 888-235-4332.

While in Washington, D.C., recently, Illinois Farm Bureau President Philip Nelson, left, and IFB representatives presented the American Farm Bureau Federation Distinguished Service Award to Secretary of Transportation Ray LaHood. LaHood was named recipient of the honor earlier this year but had not been presented with the award. Nelson and LaHood also discussed the highway bill, surface transportation issues, funding to upgrade locks, concerns about closing of crossings for high-speed rail, and the Unified Carrier Registration (UCR). LaHood indicated openness to considering an exemption for agriculture for the UCR. (Photo provided by U.S. Department of Transportation staff)

FarmWeek Page 7 Monday, March 22, 2010

PRODUCTION

Farmers hope to catch up on fieldwork this spring

BY DANIEL GRANT FarmWeek

Farmers in recent weeks started preparing some fields for planting, according to Illinois Farm Bureau Young Leader Committee members from around the state who met last week in Bloomington.

Joe Raben of Gallatin County last week reported a

number of farmers in his Southern Illinois area recently applied anhydrous ammonia, while Jeff Heinsohn of DeKalb County witnessed recent applications of dry fertilizer in his northern area.

However, the majority of Illinois farmers likely have some catching up to do this spring (which officially began

Saturday) before they can plant this year’s crops.

“Everybody is getting anxious,” Raben said.

A large portion of anhydrous ammonia applications typically done in the fall were not completed due to poor field conditions and the late harvest.

A great deal of tillage work,

Bullish cattle market could be corralled A recent run in the cattle market soon could run out of steam.

Paul Nelson, livestock analyst and director with EHedger in Chicago, believes competition from the poultry sector and higher cattle weights in coming months could cap live cattle prices.

The market recently has been bullish with live cattle prices surging to the mid-$90 range while some feeder cattle contracts last week reached new highs.

However, Nelson warned, “I’d be careful about getting too bullish. An increase in chicken production could keep a lid on (cattle) prices.”

Domestic broiler production the first week of March totaled 889.9 million pounds, up 4.8 percent compared to the previous year, according to the CME Group Daily Livestock Report.

“I think we’ve got a real threat from chicken as a competitor to pork and beef this summer,” Nelson said.

Meanwhile, the analyst predicted cattle weights in coming months could increase due to

Pasture, forage focus for sheep, goat confab University of Illinois Extension will cover pasture and forage management for sheep and goats at a Tuesday, March 30, seminar in Princeton.

Reservations are due March 26.

Extension educators will discuss ways to extend the grazing season and how to increase the quality, quantity, and use of forages produced on the farm.

The seminar will run from 7 to 9 p.m. in the Bureau County Extension office. The registration fee is $7 per person or $10 per family or farm. Checks should be made payable to University of Illinois Extension and mailed to: Bureau County Extension Unit, Becker Professional Suites, 850 Thompson St., Princeton, IL 61356.

For more information or to register, contact Sherry Hockings, educational program coordinator, at 815-875-2878.

improved weather conditions and affordable feed prices.

Cattle carcass weights earlier this month were down 21 pounds (2.6 percent) com-

FarmWeekNow.com Visit FarmWeekNow.com to view the latest USDA cattle on feed repor t.

pared to year ago levels.

“Slowly but surely cattle weights will go back up as we turn to warmer weather” Nelson said. “I think live prices could start to find

some resistance.”

USDA Friday issued its monthly cattle on feed report that mostly was neutral to the market as the projections landed within traders’ expectations.

Cattle and calves on feed continued a downward trend as the total on March 1 (10.9 million) was down 3 percent from last year.

February placements (1.67 million) were down 1 percent and marketings (1.72 million) increased by 2 percent. — Daniel Grant

including rut repairs, remain on the to-do list, and farmers in many areas still are dealing with extremely wet fields.

Soil moisture statewide as of the beginning of this month was rated 58 percent surplus and 42 percent adequate, and recent rainfall hasn’t helped matters.

“We are wet,” said Alan Bailey of Sangamon County who reported little to no fieldwork had been done in his area as of last week. “A lot of guys in our area didn’t get any fall nitrogen on.”

Bailey predicted heavy demand for fertilizer this spring could create “bottlenecks” that could delay planting progress.

Corn planting as of March 15 already was off to a slow start down south as Texas farmers had planted just 11 percent of the crop compared to the average of 28 percent. Farmers in Georgia had planted 5 percent of the crop compared to the average

of 9 percent.

USDA on March 31 will release its first official estimate of U.S. corn and soybean acreage with its prospective plantings report.

It previously projected U.S. farmers this year could plant 89 million acres of corn, up from 86.5 million last year, and 77 million acres of soybeans, down a half million acres from last year.

“In our area, we’ll try for more corn, but it probably won’t happen,” said Heinsohn, who finished harvesting his 2009 corn crop in January.

“Probably one-third of the ground intended to be tilled didn’t get tilled.”

There will be a large amount of available acres this spring, though, that were not planted to wheat last fall.

In Illinois, USDA estimated seedings of the 2010 wheat crop total just 350,000 acres, down a half million acres from last year and the lowest on record.

FarmWeek Page 8 Monday, March 22, 2010

ACES At left, Samantha Voils, sophomore from Nokomis High School, grimaces as she explores the inside of a fistulated cow while University of Illinois animal sciences graduate student Jackie Ploetz looks on. At right, students in Kevin Larsen’s agriculture class at St. Joseph High School inspect the cornstalk counter in the Agriculture Engineering Sciences Building during ExplorACES at the U of I. Dylan Troyer, (in white Hollister t-shirt) is at the wheel. The ACES event is geared toward high school students who are considering Illinois for college. It included more than 100 exhibits housed within seven U of I buildings. (Photos by David Riecks)

ACES on display Those attending the recent University of Illinois ExplorACES event included many of the university’s target audience — students who in the near future will be considering the College of Agricultural, Consumer, and Environmental Sciences (ACES) for their undergraduate choice.

The activity also allowed ACES students to publicly display some of the work going on at the college.

Pictures on this page were taken by David Riecks and Joyce Seay-Knoblauch of the U of I. About 2,000 people attended this year’s event.

Above, University of Illinois horticulture students arrange flowers into the shape of a giant high-heeled shoe to the tune of Cyndi Lauper’s hit “Girls Just Wanna Have Fun” in the plant sciences lab during ExplorACES. Left to right are Bailey Fitzgerald, Candace Pummill, and Maggie Moerschbaecher. At right, agricultural and biological engineering student Lawrence Knott explains to students from Kingswood Christian School how he and other students developed their entry into this year’s “Fountain Wars” competition, which will be held in Pittsburgh this summer. For the competition, the students come prepared with a design and materials, but must construct a fountain within a 120-minute time period. (Photos by David Riecks)

At left, University of Illinois animal sciences graduate student Rebecca Jensen displays a Dumeril’s boa, a medium-sized snake from Madagascar named Court, at ExplorACES — a two-day event that gives visitors a chance to learn more about the College of Agricultural, Consumer, and Environmental Sciences. (Photo by Joyce Seay-Knoblauch)

FarmWeek Page 9 Monday, March 22, 2010

FROM THE COUNTIES

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OLES — Farm Bureau and Prairie State Bank will sponsor the WILL AM580 commodity panel at 6 p.m.

Wednesday, March 31, at the Stovepipe Grill, Charleston.

Call the Farm Bureau office at 345-3276 for reservations or more information.

FFINGHAM — Farm Bureau and WILL AM580 will sponsor an agricultural outlook meeting at 7 p.m. Monday, March 29, at the Farm Bureau office. Dave Dickey, WILL’s director of agricultural programming, will host the panel discussion. The panel will include Justin Kelly, E-Hedger LLC; Mike Zuzolo, Global Commodity Analytics; and Bill Mayer, Strategic Farm Marketing. Call the Farm Bureau office at 217-342-2103 for reservations or more information.

• The rescheduled On the Road seminar will be at 7 p.m.

Thursday, April 8, at the Farm Bureau office. Kevin Rund of Illinois Farm Bureau will review motor vehicle laws.

Call the Farm Bureau office at 217-342-2103 for reservations or more information.

CDONOUGH — Applications are available for McDonough County Farm Bureau Foundation scholarships. Four $500 schol-

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arships will be given to students pursuing an ag-related major. Applications are available at the Farm Bureau office or online at {http://mcdonough.countyfarmbureau.org}.

Deadline to return applications is April 2.

ERCER — The Prime Timers will meet at noon Thursday at the Farm Bureau office for a potluck lunch and a presentation from the American Red Cross organization. Call the Farm Bureau office at 5825116 for reservations or more information.

• Rob Huston, AgriVisor LLC, will be the speaker at a spring market outlook meeting at 7 p.m. Thursday at the Farm Bureau office. Call the Farm Bureau office at 582-5116 for more information.

EORIA — The Peoria County Beef Producers annual meeting will be at 6:30 p.m. Monday (today) at the Kickapoo Sportsman’s Club.

Cost is $10.

• A spring health screening fair will be from 7 to 11 a.m.

Wednesday, March 31, at the Farm Bureau auditorium. Call Proctor Hospital at 309-6898334 for an appointment or more information.

TEPHENSON — A defensive driving course

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P

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CELEBRITY TRACTOR PULL

State Rep. Bill Black (R-Danville) smiles as he receives his participation ribbon following the Celebrity Tractor Pull hosted recently by the District 12 Young Ag Leaders of Champaign, Douglas, and Vermilion counties. The event was in conjunction with the sixth annual Illini Farm Toy Show in Urbana. Other celebrities included representatives from local TV and radio stations; Champaign Mayor Gerry Schweighart; state Sen. Mike Frerichs (DChampaign); and state Reps. Naomi Jakobsson (D-Urbana) and Chapin Rose (R-Mahomet). The pedal pull also featured a Young Farmer/Young Leader division as well as a sanctioned children’s pull. (Photo by Champaign County Farm Bureau Young Leader Heather Miller)

will be from 10 a.m. to 3 p.m.

Wednesday and Thursday, April 7-8, at the Farm Bureau office. Doug Sommer will be the instructor. Lunch will be served. Cost is $15 for members and $20 for non-members. Call the Farm Bureau office at 815-232-3186 for reservations or more information.

• Farm Bureau will sponsor a bus trip Saturday, April 17, to Fair Oaks Farms, Fair Oaks, Ind. A buffet lunch will be served at the farm. Call the Farm Bureau office at 815232-3186 by Friday, April 2, for reservations or more information.

• Farm Bureau will sponsor a bus trip Saturday, May 29, to the Amana Colonies. Lunch will be at the Ox Yoke Inn. Cost is $55 for adults and $45 for children ages 5-10. Call the Farm Bureau office at 815232-3186 by May 14 reservations or more information.

ERMILION — The Vermilion County Farm Bureau Commodity Challenge games are up and running.

This free online interactive commodity trading exercise is

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designed to help farmers practice their marketing skills in a risk-free environment. The top-scoring members signing up before June 30 are eligible to win cash from the pool donated by sponsors. Call the Farm Bureau office at 217-4428713 for login information.

ARREN-HENDERSON — Farm Bureau and the Mercer County Health Department will sponsor a

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breakfast and health screenings Friday at the Farm Bureau office. Breakfast will be from 7 to 7:45 a.m. and screenings from 7:30 to 10 a.m. Screenings will include prostate, oral and skin cancer. Rick Winbigler of the Soil and Water Conservation District will give a presentation at 8 a.m. Call the Farm Bureau office at 309734-9401 for reservations or more information.

Promotion raises awareness of county’s E85 availability The Hancock County Farm Bureau, WestCentral FS, and Illinois Corn Marketing Board sponsored their first E85 promotion last week at Roger Law’s Service Station in Carthage.

During the promotion, E85 was marked down to just 85 cents per gallon with a maximum of 10 gallons per vehicle.

The promotion saw a total of 260 gallons of the fuel pumped into 24 vehicles. In honor of St. Patrick’s Day, the Women’s Committee served Irish potato soup, Irish crème coffee, and shamrock cookies during the promotion.

“We believe that we did an excellent job of promoting E85 fuel and were effective in educating people about the benefits of ethanol,” said Carla Mudd, county Farm Bureau manager.

“We also believe that by doing this promotion, we made a lot of people aware that you can finally purchase E85 from a local business in Carthage.”

FarmWeek Page 10 Monday, March 22, 2010

PROFITABILITY

Developing a risk management plan essential

BY WADE MITTELSTADT

In recent years, increased commodity price volatility, crop input costs, equipment costs, and certain regulatory requirements have forced producers to take a deeper look at the overall risks Wade Mittelstadt within their operation.

In addition, agricultural lenders have begun to scrutinize whether appropriate risk management processes and business practices are in place.

In the current economic environment, identifying, managing, and prioritizing risk across your farming enterprise has become increasingly important to your success and longevity.

A formal risk management plan for your farming operation is essential. The following steps should be considered in developing a sound risk management plan: First, establish specific goals and objectives for your farming operation. Clear goals and objectives help define which risk events may hinder their achievement.

Next, perform a risk assessment of your operation. Performing a risk assessment is an important tool for identifying which risks represent opportunities and potential

pitfalls. The risk assessment should consider the enterprise as a whole.

Five primary categories of risk should be considered.

These include production risk, marketing risk, financial risk, legal and environmental risk, and human resource risk.

These risks should be analyzed with consideration to their severity and probability of occurrence.

Then, based on the severity

BY DANIEL GRANT FarmWeek

Farmland prices that were mostly flat the first half of last year gained momentum in recent months.

FarmWeekNow.com Interviews with Bob Swires and Gary Schnitkey on the Illinois farmland/cash rent markets are available at FarmWeekNow.com

Members of the Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA) estimated farmland values, from August through last week increased anywhere from 3 percent to as much as 15 percent, depending on the location of the land.

In fact, a farmland sale about three weeks ago near Springfield fetched an eye-

Feeder pig prices reported to USDA*

Weight 10 lbs.

40 lbs.

50 lbs.

Receipts

Range Per Head Weighted Ave. Price $34.73-$47.00 $39.79 $68.00-$72.00 $70.67 n/a n/a This Week Last Week 21,916 22,533 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) (Prices $ per hundredweight) This week Prev. week $66.09 $70.74 $48.91 $52.35

Change -4.65 -3.44

USDA five-state area slaughter cattle price Steers Heifers

This week $94.00 $94.17

the strategies employed.

Your risk management plan should be reviewed regularly and realigned to ensure the achievement of your operation’s goals and objectives.

This is not a one-time process; it is ever-changing and evolving.

Agricultural producers who develop a formal risk management program for their operation and regularly realign strategies to address their risks

are better positioned to capitalize on opportunities and avoid surprises.

Over time, a sound risk management process will lead toward measurable, lasting success in today’s ever-changing agricultural business environment.

Wade Mittelstadt is GROWMARK’s assistant treasurer. His e-mail address is wmittelstadt@growmark.com.

Illinois farmland prices rise from 2009 levels

M A R K E T FA C T S

Carcass Live

and probability of the identified risks, a set of actions to address the risks should follow. Mitigation and monitoring strategies should be employed to address the various categories of risk.

Once specific strategies have been devised, they must be continually monitored, measured, and prioritized.

This entails continually gauging the risk environment, renewing your assessment and

(Thursday’s price) Prv. week Change $94.30 -0.30 $94.14 0.03

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 103.82 102.09 1.73

Lamb prices Confirmed lamb and sheep sales This week 428 Last week 409 Last year 386 Wooled Slaughter Lambs: Choice and prime 2-3: 90-110 lb., $130. Good and choice 1-2: 30-60 lbs., $175; 60-90 lbs., $150.

Slaughter Ewes: Utility and good 1-3: $52-$54. Cull and utility 1-2: $52.

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 03-11-10 31.5 9.2 36.5 03-04-10 33.9 21.1 37.9 Last year 23.9 12.9 35.3 Season total 1173.7 651.5 882.1 Previous season total 878.4 805.0 857.1 USDA projected total 1420 825 1900 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

popping $8,300 per acre.

“Farm ground has held its value and paid good returns,” said Bret Cude, ISPFMRA president and farm manager with the Farmers National Co. in Nashville.

ISPFMRA last week released its annual farmland and lease trends report that showed Illinois farmland last year declined by as much as 10 percent at some locations while it increased by as much as 15 percent at other locations.

“The appreciation we’ve seen the last few years definitely tapered off,” said Mike Lauher of Farmland Management Services in Savoy.

Bob Swires, chairman of the Illinois Land Values Survey and farm manager with Swires Land and Management Co. in Danville, characterized farmland values last year as steadyto-down before an uptick that started in the fall and carried over into this year.

“Last year at this time (when farmland prices were softening) producers were getting hit over the head with costs, and the economy was up for grabs,” Swires said. “That’s kind of settled out.”

Illinois finished the year with farmland sales in seven of the 10 ISPFMRA districts that brought at least $7,000 per acre.

A key factor currently driving farmland prices is simple supply and demand, according to Swires.

“There is strong demand (for good to excellent farmland) but there is a lack of supply,” Swires said.

The number of farmland transactions in some regions of the state last year was down by as much as 40 to 50 percent, according to the ISPFMRA report.

Swires believes the lack of available farms was due in part to a lower number of distress sales, as many farmers still were in good financial shape from 2007 and 2008, and the fact the weak economy offered few outlets to invest money from a farm sale.

“If ground was available last

year, it sold very quickly,” Cude said. “The main buyers were farmers.”

Farmers last year were the top buyers of farmland in Illinois (62 percent of sales) followed by local and non-local investors (29 percent of sales).

Sales generated from 1031 exchanges, which in recent years was a big driver of farmland values, were so scattered last year they didn’t register on the survey.

The remaining 9 percent of

farmland purchases were by institutions or listed in the “other” category.

The one sector of the farmland market that took the biggest hit last year was recreational tracts, which lost anywhere from 5 to 30 percent in value.

“Recreational land (value) was hit harder by the recession,” said Gary Schnitkey, University of Illinois farm management specialist who heads the ISPFRMA survey group.

AgriVisor to preview stocks, planting reports AgriVisor regularly conducts online seminars for its MaxVisor clients. It is putting together a webinar preview of the upcoming USDA grain stocks and prospective planting reports for those clients.

“The USDA reports are the most important ones released between the January reports and the first ‘official’ new-crop supply and demand reports on May 11,” said AgriVisor analyst Dale Durchholz. “They could have major implications for oldcrop prices as well as those for the new crop.”

AgriVisor will release a recorded version of that webinar for general viewing on Friday. To access it, go to the AgriVisor website {www.agrivisor.com} anytime after Friday and follow the instructions. It will work best for those with a broadband connection to the Internet.

China lifts ban on U.S. pork China last week agreed to reopen its market to U.S. pork imports.

“This is great news for U.S. pork producers,” said Sam Carney, president of the National Pork Producers Council. “China is one of our biggest markets.”

China in 2008 was the third-largest market for U.S. pork exports, importing 400,000 metric tons valued at $690 million.

However, the Asian nation closed its market to U.S. pork last April in the wake of an outbreak of the novel H1N1 flu strain, which was mislabeled “swine flu.”

U.S. exports of pork to China/Hong Kong last year declined by 38 percent as a result of the ban.

The announcement to reopen the Chinese market to U.S. pork was the second this month. Russia, which last year was the fifth-largest market for U.S. pork exports, earlier this month reopened its market to U.S. pork.

FarmWeek Page 11 Monday, March 22, 2010

PROFITABILITY Corn Strategy

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

Cents per bu.

2009 crop: The minor trend in corn appears to have t u r n e d u p, b u t p r i c e s a r e approaching resistance levels.

If May futures move above $3.75, they should attempt to test $3.92 resistance. Increase sales to 60 percent if May rallies to $3.92. We may boost sales even more; check the Cash Strategist Hotline frequently. Basis may not improve much until late April/early May when farmers turn their focus to planting.

2010 crop: Use rallies above $4 to make catch-up sales. Boost sales to 30 percent if December futures hit $4.15.

Check the Cash Strategist Hotline daily; we would like to have 50 percent priced by late April.

Fundamentals: Shortterm weather appears to have a wet bias, which should be supportive to the market. On the other hand, the new 30-day outlook for April is near normal for much of the Corn Belt. But the implications of the March 31 reports may be the biggest fundamental events ahead.

Soybean Strategy

Soybean/wheat exports good Even though soybean exports have started to level off, there’s still a good chance

Basis charts

sales might exceed expectations.

Sales last week totaled 7.9 million bushels. They need to average only 5.4 million bushels to reach USDA’s current target.

Chinese old-crop purchases may have come to an end, but other buyers should fill a part of the hole.

Lower world prices have bolstered wheat export sales enough that the current USDA forecast is attainable.

If anything, flour exports may be a bigger drag on exports than actual grain sales.

Corn exports may be the sector that’s most vulnerable.

Last year at this time, sales accelerated, whereas this year, they are eroding.

It may be that quality issues are going to be a significant drag this year.

AgriVisor endorses crop insurance by

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

309-557-2274

2009 crop: Weakness in the dollar appears to have turned the short-term price expectations a little more positive. We’d still leave orders to sell soybeans if May futures hit $9.90, but would boost sales to 60 percent. We may boost sales even more the next 3 to 4 weeks. Lowering our price target is not out of the question, either. Check the Cash Strategist Hotline frequently.

2 0 1 0 c r o p : L e ave a n order to make a 20 percent sale if November futures reach $9.49. Check the Cash Strategist Hotline occasionally for changes. Plan to have 50 percent sold by early May. Fundamentals: Demand factors continue to be supportive to soybean prices. The February crush number came in higher than anticipated.

China resumed buying U.S. soybeans, although the purchases were for new-crop delivery. But other customers were buyers of old-crop soybeans and meal. There’s continued talk that loading delays

in Brazil may have shunted a couple of boats to the U.S.

Wheat Strategy 2009 crop: Even though the market has difficulty sustaining gains, the short-term trend appears to be turning higher.

Prices need to close back above the 50 percent retracement of this latest decline, $5, to confirm the trend has turned up. Wait to see if the May contract can rally back to $5.20 to wrap up oldcrop sales.

2010 crop: Use a rally to $5.30 on Chicago July futures

to make an initial 25 percent sale. Check the Cash Strategist Hotline daily as this target could be adjusted at any time.

Fundamentals: T he winter wheat crop continues to benefit from generally good weather. T he most recent report rated the Kansas crop at 63 percent good to excellent vs.

42 percent last year. However, the spring crop could run into problems with excess moisture likely to delay planting. There also are some scattered problems starting to surface with the world crop.

FarmWeek Page 12 Monday, March 22, 2010

PERSPECTIVES

Who needs whom in rural Illinois?

Do you, your community, or your business need the financial assistance of USDA Rural Development? Or does USDA Rural Development need your help? Why do I ask?

Here’s why: While agriculture is still the major, significant economic driver in Illinois, only a small percentage of the rural workforce is directly employed in farm production. That means the United States Department of Agriculture must support not only the farms but also the communities that surround those farms.

And while USDA Rural Development is central to the communitybuilding effort, it is only one piece in the erector set. Our agency can help COLLEEN CALLAHAN bring businesses to rural Illinois, finance water, community facilities and infrastructure, and help build houses.

But the overall goal is to “ensure that rural communities are creating wealth, are self-sustaining, are repopulating, and are thriving economically.”

Rural Development has done its part in the past year by investing $395 million in our rural Illinois communities: • 3,753 homebuyers have their first home or a better home;

• 18 water and sewer projects were funded; • 18 community facility projects were funded, from fire stations to county fair buildings and from a building to serve people with disabilities to a dental clinic; • 9 loan guarantees for seven rural businesses were provided; and • 4 grants were provided to non-profits and a municipality.

But USDA Rural Development needs your help to break the mold in Rural Development, to initiate a regional approach, to leverage resources.

Breaking the mold means regional collaboration, regional food systems, community building, alternative energy, broadband and continuous business creation, capital markets, and strategic partners.

There is strength in numbers, as the saying goes.

And the “erector set” has multiple pieces. Those pieces, when fit together, create a solid structure.

Our rural communities are the structure and we — municipal leaders, community organizations, residents, economic developers, businesses, government agencies, etc. — are the pieces that support and build the structure!

As the winds of change continue to blow, wind turbines continue to change our rural landscape. As we move toward energy independence, we recognize

the opportunities that accompany that change.

There are 8,800 parts in each one of those wind turbines. A business that manufactures those parts, located in a region where alternative energy is generated, means community building, business creation, economic stimulation, jobs. You get the picture.

So the last goal, strategic partners, means we actually need each other because relationships lead to opportunities.

Colleen Callahan is the director of USDA Rural Development in Illinois. Her e-mail address is Colleen.Callahan@il.usda.gov.

Record $25 million now available for Illinois’ beginning farmers Whether you’re a college graduate interested in farming or considering a career in agriculture, now may be the best time ever to secure low-cost financing to buy your first farm.

That is possible through the popular beginning ERIC farmer bond REED program offered by the Illinois Finance Authority (IFA).

Beginning farmers, as well as farmers who have never owned their own property, can now borrow up to $470,100 to buy that first operation. The program’s previous lending limit was $250,000.

Additionally, more beginning farmers may take advantage of the program because Gov. Pat Quinn set aside a record $25 million in funding for eligible beginning farmer bond applicants in 2010.

It’s the highest level of lowcost capital available for Illinois’ beginning farmers since the program was launched more than 25 years ago.

The beginning farmer bond program is a great tool for producers purchasing land for the first time, whether you have been farming for years, starting your own farming operation, or just coming back to the farm after college.

The program provides financing for land purchases for beginning farmers at a reduced or below-market interest rate. The IFA issues a single tax-exempt bond to the lender, who finances the land purchase.

The borrower benefits from this IFA partnership because the lender can pass on the savings to lower your interest cost and ultimately your land payment.

Applicants do not need prior farming experience or a down payment toward the pur-

chase to be eligible. While there are no requirements of farm income as a percentage of total income, the producer should either be involved in farming or become involved in farming with the purchase of the property. Purchases from relatives also are allowed under the IFA program.

Eligibility requirements for the beginning farmer bond program are fairly broad.

An eligible applicant should: • Be at least 18-years old; • Be an Illinois resident; • Have a net worth of less than $500,000; • Have limited land ownership prior to the purchase; and • Be purchasing farmland located in Illinois.

The rules on prior land own-

ership vary by county throughout the state, so please visit the IFA website at {www.il-fa.com} to learn about the limits in your individual county.

This program may also be used in a contract-for-deed scenario, whereby the seller holds the bond and finances the land on a contract purchase.

Before 2009, the individual loan limit for the beginning farmer bond program was $250,000; however, after significant efforts by the IFA and others across the country, the loan limit was increased to $470,100 in the 2008 farm bill.

The legislation governing the loan limit now carries the ability to increase the maximum amount each year, based on inflation.

Illinois is the second largest among states that use the beginning farmer bond program.

IFA partners with local banks throughout the state, which secure financing for beginning farmers under the program. Contact your local banker or call 618-244-2424 for a list of participating lenders who are experienced with the beginning farmer bond program.

Applicants must be approved for financing under their bank’s underwriting guidelines and credit standards IFA provides expert, handson support to help farms and businesses obtain the capital needed for growth. To

strengthen Illinois businesses and the state’s economy, the IFA provides access to lowcost, non-conventional financing, through banks, and other sources.

IFA secures financing for farms, manufacturers, businesses, local governments, hospitals, and other non-profits.

The agency is continually seeking new opportunities and invites developers, financiers, and community partners to see how IFA can help.

If you have any questions or want to find a participating lender in your area, please don’t hesitate to contact me.

For more information or to request an application for the beginning farmer bond program, contact the IFA’s Mt. Vernon office at 618-244-2424 or visit us at {www.il-fa.com}.

Eric Reed is the IFA regional manager for the downstate counties and is responsible for all agricultural programs.

Letter to the editor What caused global warming in caveman era?

Editor: I read Mr. (Herman) Brockman’s letter in the Feb. 15 issue of FarmWeek. It seemed to be a semi-scathing attack on people who do not share his beliefs on various issues, including “global warming.”

After several years of watching scientists on TV trying to make sense of it all, I was able to make a conclusion that seems to have eluded science for years. The “big heat” and the “big chill” are all part of the natural order of global climate cycles.

On TV in just the past month was a study in Greenland. Scientists were all buzzing because a giant glacier had receded to “record” minimum. They were in a hurry to find as many human artifacts as possible before the ice would begin to expand again.

They found campfire remains, as well as animal bones that had been nicked by human tools. They found spear points, some even had wooden shafts attached.

They guessed that perhaps until recently (a few thousand years) that area had been covered by ice, hundreds of feet thick, and the glacier had extended several miles down a valley. But yet, humans obviously walked on that bare ground in the past.

I have one question about this scientific discovery. What caused “global warming” thousands of years ago?

With no cars or industry to blame it on, a scientist with millions of dollars of grant money likely will claim that cavemen were actually farmers. So it must have been caused by bovine flatulence.

CHET PEUGH, Chadwick