LEGISLATIVE redistricting is so foreign to most voters they won’t even venture a guess on how districts are drawn, according to a recent survey. ..................................3
TWO ILLINOIS congressmen are critical of the omission of river priorities from the recently proposed $50 billion infrastructure investment plan. ............................4
A G R I C U LT U R A L l e a d e r s would like to see the reach the Environmental Protection Agency has extended into farming shortened up a bit. ...................................5
Monday, September 27, 2010
Two sections Volume 38, No. 39
Producers mobilize for estate tax reform BY MARTIN ROSS FarmWeek
Periodicals: Time Valued
Rains had pre-empted the day’s fieldwork, so Carolyn Lawrence decided to alert policymakers to the potentially dire forecast ahead for many Illinois producers. Lawrence and husband, Rob, who farm near Roseville in Warren County, are the self-described fifth-generation “stewards” of their operation, an Illinois Sesquicentennial Farm. They are among thousands of Illinois farmers who have contacted Democrat Sens. Dick Durbin of Springfield and Roland Burris of Chicago this month seeking federal estate tax relief for 2011. As part of an earlier threeday Illinois Farm Bureau campaign, producers made 2,300plus calls to the senators warning them of the hit farm heirs could take under a January return to a pre-2002 $1 million estate tax exemption and a 55 percent tax rate. Farmers urged the pair to back a phased-in $5 million individual exemption sponsored by Senate Ag Committee Chairman Blanche Lincoln (D-Ark.) and Sen. Jon Kyl (R-Ariz.). “We had a rainy day (on Sept. 18), and our lawyer had
See page 3 for more details sent us a letter mid-week asking if we would write a letter,” Lawrence told FarmWeek following a Thursday grain delivery. “He has a lot of farmers in
the same situation, and I think it’s wearing on him, trying to advise them on the best thing to do. So I ... sat down for an hour or two, composed the letter, and sent it off to the senators.” Last week, Senate Finance Chairman Max Baucus (DMont.) announced plans to introduce legislation that would address the estate tax issue and extend expiring 2001/2003 tax cuts (see page 3). However, Senate leaders last week said a vote on “extenders” would be delayed until after the November elections. Lawrence noted a growing number of area farmers nearing retirement age as well as the “incredible” escalation of Illi-
nois land values over the past decade — her husband’s parents paid $200 an acre for land now valued at $7,000 an acre. The Lawrences face particularly acute financial concerns: Rob’s parents reside at a nearby nursing home, and their care costs currently consume most of their farm’s annual income. While the elder couple incorporated the family farm, formed trusts, and otherwise “did all they could to plan for leaving their estate to their children,” they did not anticipate a return to a $1 million exemption and “an estate tax of over 50 percent,” Carolyn told senators. She warned them 2010 could be “our last year of
farming” if Congress fails to act soon. A $5 million exemption and an accompanying 35 percent tax rate likely would relieve the Lawrences of estate tax liability, she said. The Lawrences do not support a counterproposal by Sen. Dianne Feinstein (D-Calif.) that would defer family farm estate taxes under stringent eligibility criteria and the condition land remains in production and in the family. That would limit the flexibility heirs might need to restructure or refinance operations, she said. “And there also are nonfarm heirs (within families),” Lawrence added. “To tie things up for 10 years or more isn’t fair to them.”
Harvest nears halfway mark; yields remain disappointing BY DANIEL GRANT FarmWeek
More than half of the state’s corn crop likely is in the bin as the torrid harvest pace continued much of last week. Illinois farmers as of Sept. 20 had harvested 38 percent of the crop compared to just 1 percent at the same time in 2009 and the five-year average of 12 percent. Unseasonably warm temperatures and nearly ideal harvest conditions allowed farmers to keep their combines rolling last week until showers early Friday morning provided a much-needed break for some. “The corn is dry — under 15 percent,” said Tim Lenz, a Shelby County farmer and president of the Illinois Corn Growers Association, who as of Friday had harvested about 75 percent of his corn crop. “It is just a matter of how fast you can get it.” Lenz estimated many farmers in his area could finish harvest in the next two weeks, which would be earlier than some farmers were able to start harvest last year due to a late-developing crop and numerous rain delays. “It’s been almost ideal (conditions) with a few showers to
break it up,” Lenz said. “It’s been a lot better than last year, which was a nightmare.” But while harvest conditions this season have been much better than last year, yields are falling below year-ago levels for many producers. “Yields are a little down from last year, closer to the five-year average,” Lenz said. Production took an even bigger hit in parts of the state that were extremely wet this summer. Terry Pope, a farmer from Burnside in Hancock
County and Illinois Farm Bureau District 9 director, last week reported his area received more than 50 inches of rain during the growing season. “In this area, it (corn production) is not very good,” Pope said. “The big issue is we have a lot of corn that was stunted.” Pope on Friday reported corn harvest in his area was 40 to 50 percent complete and yields ranged from just 44 bushels to 145 bushels per acre. “We have a lot of 60-, 70-, and 80-bushel corn that’s been
harvested so far,” he said. “The corn-on-corn has been the most disappointing, but even the cornon-beans has not been good.” USDA earlier this month lowered its statewide corn yield estimate from 180 to 174 bushels per acre. The statewide soybean yield, though, was projected to average a record-high 51 bushels per acre. Soybean harvest as of the first of last week was 10 percent complete statewide compared to no progress in 2009 and an average of 5 percent.
John Strader of rural Ashmore in Coles County last week was in his second day of soybean harvest after having finished harvesting corn. He farms 2,200 acres, half soybeans and half corn. He said corn yields averaged 175 bushels per acre, and his beans were starting out in the mid-50s. With a wetter-than-usual June followed by a dry July and August, Strader characterized the corn yields as about average but said his soybean yields were good. Harvest this year is about a month earlier that last year, he said. Statewide, soybean harvest was 10 percent completed as last week began. (Photo by Ken Kashian)
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FarmWeek Page 2 Monday, September 27, 2010
GOVERNMENT
Quick Takes PRE-ELECTION BIODIESEL VOTE — In a joint letter to U.S. Senate Democratic and Republican leaders last week, the National Biodiesel Board (NBB) and the Advanced Biofuels Association (ABFA), urged Congress to extend biodiesel, renewable diesel, and other biofuels tax credits through 2011 before adjourning for November midterm elections. The request sought retroactive extension of the $1-pergallon biodiesel credit, which expired Dec. 31, 2009. The credit’s lapse “and the Senate’s subsequent inability to address this issue has killed thousands of jobs and has made America more dependent on foreign oil,” NBB Vice President of Federal Affairs Manning Feraci said. “If Washington doesn’t step in before lawmakers leave for the campaign trail, then they are essentially putting a virtual hold on our nation’s energy and economic security,” ABFA President Michael McAdams stated. “Industry cannot be expected to continue to build and develop fuels of the future if the government does not hold up its end of the bargain.” CLIMATE CLASH CHILLED? — Last week, Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) declared climate change legislation dead for the near future. Republicans are expected to gain seats in both the House and the Senate, and passing climate change legislation that mandates reductions in greenhouse gases will be tough. “I don’t see a comprehensive bill going anywhere in the next two years,” said Bingaman, who supports climate legislation. “I’d be surprised if that kind of a comprehensive climate and energy bill could pass both houses of Congress in the next Congress, since they’ve been unable to pass it in this Congress.” URBAN SPRAWL AFFECTS WATER QUALITY — Sprawl in the developing Metro East area is contributing fecal bacteria and phosphorous to the Lower Kaskaskia River basin, Southern Illinois University-Carbondale (SIU) scientists have learned. A three-year study of 43 river basin subwatersheds revealed the urban subwatersheds contain significantly higher levels of both E. coli and phosphorus on a day-to-day basis than do the largely rural, agricultural subwatersheds. “That surprised me,” said Jon Schoonover, SIU assistant professor of forestry who managed the project. “People have been pointing a finger at agriculture for years as a major source of water pollution, but our study showed that as urbanization increased, so did water quality problems.” The report doesn’t specify the sources of the bacteria and phosphorous, but Schoonover and his colleague, Karl Williard, have their suspicions. “As far as bacteria is concerned, two possibilities are home septic systems and combined sewer (sanitary and storm water in the same system) overflows,” Williard said. Phosphorous fertilizer applied to urban lawns with compacted soil also is suspected of washing off during storms.
(ISSN0197-6680) Vol. 38 No. 39
Sept. 27, 2010
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Nelson sees a ‘crack of optimism’ for WTO BY MARTIN ROSS FarmWeek
The discussions continue. So do the questions and speculation about a successful resolution of the World Trade Organization’s (WTO) Doha Round. After making the rounds in Geneva, Switzerland — the hub of Doha activity — Illinois Farm Bureau President Philip Nelson sees a “crack of optimism” amid efforts to reach a final WTO accord. A shift to “small group discussions” may resolve contentious individual issues and pave the way for final consensus among the WTO’s 153 member nations, he said. But a lot depends on the willingness of China and India to improve market access; the direc-
cessful Doha FarmWeekNow.com Round are To listen to President Nelson’s import tariffs i n t e r v i e w on the status of that present t r a d e n e gotiations, go to “obstacles to FarmWeekNow.com. entering the Chinese market and the Indian market,” Nelson maintained. China imposes tariffs as high as 15-20 percent on some goods. However, world economic woes have instilled “a caution in the whole trade talk community,” Nelson said, citing heightened protectionist instincts. Economic collapse within Greece and other European Union (EU) nations, meanwhile, may spur re-examination of the EU’s Common Agri-
‘ If progress can be made coming out of small group discussions, if we can take things to the next step ... I think we can have a successful round completed .’ — Philip Nelson President, Illinois Farm Bureau
tion of and international satisfaction with U.S. farm policy reforms; and the outcome of worldwide elections, including currently unpredictable U.S. mid-term congressional races, said Nelson, chairman of American Farm Bureau Federation’s Trade Advisory Committee. “2011’s going to be a very pivotal year in the WTO talks,” he predicted. “If progress can be made coming out of small group discussions, if we can take things to the next step as it relates to the service sector, the manufacturing sector, and agriculture, and we can conclude those during 2011, I think we can have a successful round completed. “If that does not happen in 2011, I think it’s going to be very hard to complete this round of trade talks. Given the elections of 2012 around the world, (WTO talks) will be more politicized than they are today. “But the positive thing I took away as we met with the various embassies is that the United States is the major trading force in this world. Countries want to work with us; we just have to be able to sit across the table and try to figure out how that takes place in this particular environment.” Among the major stumbling blocks to a suc-
cultural Policy “and how it fits in the big scheme of things,” he said. Nelson reported many WTO nations will closely monitor U.S. farm bill debate. A particular focus is the WTO’s ruling that the U.S. has made insufficient progress in retooling purportedly trade-distorting cotton supports. However, Brazil, which brought the original WTO complaint against the U.S., appears to be taking a wait-and-see approach to congressional farm bill reforms. In order to stave off Brazilian countermeasures, the U.S. has agreed to pay Brazil some $147.3 million per year in “damages.” The potential trade impact of the U.S.’ November elections “came up at about every embassy we visited,” Nelson related. The president’s seemingly vague trade policy signals and the possibility of a party control shift on Capitol Hill have raised global speculation. “If we see one of the (congressional) chambers flip, we’ll have to see if the president comes more to the center of the debate as it relates to trade,” Nelson said. “In his State of the Union address, he said he wants to see exports doubled. Well, let’s see how he plans to address that.”
Northwestern Illinois recipient of $70 million broadband project To boost service in nine counties Northwestern Illinois is the latest region of the state to receive federal funding for a broadband project. Last week, Gov. Pat Quinn announced the start of a $70 million fiber-optic project involving $46 million from the U.S. Department of Commerce, $14 million from the
Illinois Jobs Now! program, and $10 million in private funding. The project will cover the counties of LaSalle, Ogle, Lee, Whiteside, Jo Daviess, Carroll, Stephenson, Winnebago, and Boone. About 485 jobs are expected to be created. “Illinois has won over $240 million in federal broadband funding to date,” Quinn said. Over the past several weeks, federal broadband funding has
been announced for projects in several regions of the state. The proposal for the northwest project was submitted by Northern Illinois University on behalf of the Illinois Broadband Opportunity Partnership–Northwest Region, a consortium of public and private partners. The latest project is one of 17 broadband expansion awards announced for Illinois since February.
FarmWeek Page 3 Monday, September 27, 2010
GOVERNMENT
Survey shows voters clueless about redistricting State government more distrusted than federal BY KAY SHIPMAN FarmWeek
A major decision facing state lawmakers next year is so foreign to most Illinois voters they don’t even venture a guess about how legislative districts are drawn, according to a new University of Illinois survey. “It (district map drawing) is an invisible process,” Brian Gaines, a faculty member in U of I’s Institute of Government and Public Affairs, told FarmWeek. Between April 30 and May 10, the Institute surveyed 500 registered Illinois voters about legislative redistricting and other issues, such as trust in government. One third of survey respondents said they “never” trust state government to do what is right, according to survey results.
Almost twice as many Illinois voters responded they were more willing to trust the federal government compared to those who
‘It (distr ict map drawing) is an invisible process.’ — Brian Gaines University of Illinois Institute of Government and Public Affairs
were willing to trust state government. Gaines speculated the state distrust percentage would be even higher today because state budget problems continued over the summer. As for legislative maps,
Gaines said he was surprised 80 percent of respondents didn’t try to guess about the map-drawing process although they had six possible options to a question about how the current state legislative district map was drawn. Fewer than 10 percent selected the most accurate response. (See box at right) Likewise, nearly 77 percent responded they had not heard about an unsuccessful petition drive by the League of Women Voters, the Illinois Chamber of Commerce, Illinois Far m Bureau, and others to put a constitutional amendment changing the redistricting process on the fall ballot. Gaines noted voters’ lack of understanding about the redistricting process is a substantial educational challenge to those who want to change the current process. “The League of Women Voters ran up against that” challenge with its amend-
Election calendar Oct. 5 Last day to register to vote Oct. 11 First day for early voting Oct. 28 Last day for early voting Nov. 2 Election Day
ment petition drive, Gaines said. Voters also lack a “gut reaction” to issues when they don’t understand them, he added. The Institute hopes to further its study of voters and legislative district maps, according to Gaines. In the near future, the people may be invited to draw and submit their own state legislative district maps to the Institute, he said.
Redistricting drill Every 10 years, a national census is conducted, and the results are used to determine the need for new legislative district maps for state and federal elections. The Illinois Constitution empowers members of the Illinois House and Senate with drawing the district maps the year after the decennial census — 2011 in this case. If lawmakers can’t agree on a map, a special commission takes a shot at it. The four legislative leaders each appoint two members to the commission. If the eight commission members can’t agree, then the secretary of state must conduct a lottery (a name has been drawn from Abraham Lincoln’s hat) to select one of two individuals, each representing a different political party, to be the ninth commission member. One party then has enough votes to end the impasse and approve a map.
1099 issue is one more ‘bite’ for tax-scarred producers BY MARTIN ROSS FarmWeek
New health care tax requirements represent one more “mosquito bite on the guy who’s about to get run over by a truck,” a Washington policy specialist suggests. Last week, Farm Bureau and more than 25 other ag groups urged D.C. lawmakers to seek repeal of U.S. Internal Revenue Service (IRS) 1099 reporting requirements that likely will create a major paperwork burden for small businesses and farmers. Under recently approved health care provisions, businesses must issue a federal tax Form 1099 to every unincorporated service and goods provider to whom they pay more than $600 during a tax year. Starting in 2012, producers also will have to issue 1099s to incorporated businesses and providers, covering virtually every ag “vendor” transaction. The Senate rejected efforts to include 1099 relief in small business tax legislation amid debate over Democrat and Republican “dueling amendments” and proposals for
“paying” for relief measures, American Far m Bureau Federation policy specialist Pat Wolff told Far mWeek. Last week’s failure by Senate Democrats to win the 60 votes needed to move on fiscal 2011 defense authorizations signaled major legislation is “pretty much locked up” until after November elections, she said. Illinois Far m Bureau Vice President Rich Guebert Jr.’s operation currently issues 10 to 12 For m 1099s per year. He warned that number could exceed 100 if new requirements come into play. Expanded compliance would entail obtaining business infor mation and tax ID/Social Security numbers from each vendor, as well as the increased IRS manpower needed to review a resulting new “mountain of paperwork,” Guebert said. Kankakee County grain and onion grower Bill Olthoff, who deals annually with 50-some vendors, sees new requirements as “an added cost of doing business that isn’t needed.”
“The number of vendors we use is considerable — to have to write a 1099 for each one is cost-prohibitive,” said Olthoff, an IFB board member. “This just isn’t necessary.
Rapid response Illinois Farm Bureau members broke from harvest activity in droves Sept. 14-16 to push for federal estate tax reform. Producers and others placed 2,327 calls to U.S. Sens. Dick Durbin, a Springfield Democrat, and Roland Burris, a Chicago Democrat, on behalf of a higher estate tax exemption and a reduced estate tax rate (total contacts were as of FarmWeek’s Friday deadline). Eighty-nine counties reported contacts. Sangamon County Farm Bureau registered 312 contacts, Cass-Morgan Farm Bureau 197 contacts, and Warren-Henderson Farm Bureau 97 contacts.
There are other ways to accomplish what (IRS) is trying to do in tracing income.” Ag groups last week were pinning hopes on Sens. Mike Johanns (R-Neb.) and Bill Nelson (D-Fla.), who have offered small business amendments to remedy this situation. Guebert recommended straight-out repeal of the new requirements or at least an ag exemption; AFBF was collecting producer concerns to include in 1099 comments due this week to IRS. New 1099 requirements arise amid a raft of potential 2011 challenges for far mers: Expiration of 2001 tax relief provisions may expose more far m heirs to estate tax liability, boost the top capital gains tax rate from 15 percent to 20 percent, and hike individual income tax rates for non-incorporated producers from a top 35 percent to 39.5 percent. The latter alone represents “a 5 percent business tax increase for far mers,” AFBF’s Wolff said. “Now’s not the time to be doing this kind of stuff,” she argued.
FarmWeek Page 4 Monday, September 27, 2010
GOVERNMENT
Rivers needs missing from president’s plan BY MARTIN ROSS FarmWeek
A vital link is missing from President Obama’s plan to forge a better domestic infrastructure, according to a pair of Illinois congressman. Democrat Reps. Jerry Costello of Belleville and Phil Hare of Rock Island were among those who criticized the omission of river priorities from the White House’s recently proposed $50 billion infrastructure investment plan. The plan, in Costello’s view designed to “put people back to work,” ignores the immediate and long-term economic potential of proposed new locks on the Upper Mississippi and Illinois Rivers, the lawmaker argued. Construction of seven modern 1,200-foot locks has been in limbo since 2007, when Congress reauthorized the Water Resources Development Act.
“(Obama) mentioned roads, bridges, highways, rails, and airports, but he did not mention waterways,” Costello told FarmWeek. “I sent him a letter to say that infrastructure bill should include our waterway system. “We authorized five locks on the Mississippi River and two new locks on the Illinois Waterway system — they’re authorized, but they’re not funded. If we’re going to have an infrastructure bill to address the other modes of transportation, waterways certainly should not only be considered but included. ‘‘We have structures on our waterways system that are 75, almost 100 years old. We can no longer get parts to fix problems along the way.” Commercial river interests and the U.S. Army Corps of Engineers have anted up to shoulder a portion of lock upgrades and construction, agreeing to higher barge fuel
taxes to replenish the Inland Waterways Trust Fund. The trust fund, currently low on reserves, was designed to pay 50 percent of new locks or major rehabilitation. With Illinois/Mississippi users willing to accept a “heavy-duty tax,” Hare argued Congress should expedite lock funding. Of the seven locks across Hare’s district, he said at least five are in “really serious condition.” “All it’s going to take is a barge hitting a lock,” he said. The Rock Island congressman cited reports that
new lock construction will generate at least 28,000 jobs, as well as reducing lock delays that boost ag transportation costs. Hare’s push, however, is not confined to navigation funding — he related estimates that the Burlington-Northern Santa Fe Railroad lost $1 million a day during recent Midwest floods. That’s not to mention the destruction to crops, grain storage facilities, and other economically important operations behind the levees. “I get beyond angry when I
hear people say, ‘Well, it’s only agricultural land behind some of these levees,’” Hare said. An existing Corps-supported plan would invest $6 billion in Upper Mississippi River system flood improvements, he said. That’s vs. $30 billion in recent federal flood relief, Hare stressed. “They’re telling us that with inflation, if things go on like this for another seven to 10 years, we’ll be paying out another $60/$70 billion in flood relief,” he said.
Tags may be required for interstate transport BY DANIEL GRANT FarmWeek
U.S. livestock producers in the future may be required to tag their animals for identification purposes prior to moving them across state lines. Federal officials currently are considering such a requirement as they draft new rules for animal disease traceability. USDA is holding a series of public meetings on the proposed draft regulations and reportedly plans to have a draft rule ready by April 2011. USDA in February scrapped its unpopular National Animal Identification System due to poor participation and is in the process of developing a “new, flexible framework for animal disease traceability.” The current proposal for interstate transport would require livestock producers to tag animals with a metal clip before the animals are moved across state lines. USDA reportedly would provide the tags to producers at no charge and would be responsible for reading the tags at the time of harvest, according to Jim Fraley, Illinois Farm Bureau livestock program director. Fraley last month attended a Joint Strategy Forum on Animal Disease Traceability hosted by the United States Animal Health Association and the National Institute for Animal Agriculture. The proposal would address producers’ concerns about the price tag of an animal traceability system in the U.S., but Fraley questioned whether the program would remain voluntary. The American Farm Bureau Federation and IFB support a voluntary animal traceability system. “We need a traceability system (to increase the response time to animal disease outbreaks and reduce the number of herds affected by various outbreaks), everybody agrees with that,” Fraley said. “But I’m not sure what USDA is proposing would be voluntary.” Last year, more than 19 million of the 30 million beef cattle nationwide and 9 million dairy cows crossed state lines, the Associated Press reported. “That would be a significant number of cattle” producers would be required to tag, Fraley said. More information about proposals for the new animal traceability system is available at the Animal and Plant Health Inspection Service’s website {www.aphis.usda.gov}.
Growth Energy Chairman Jeff Broin, right, CEO of cutting-edge Iowa ethanol producer Poet, touts the need for federal approval of 15 percent ethanol blends and support for improved biofuels infrastructure development, during a news conference recently in the U.S. House Agriculture Committee hearing room on Capitol Hill. Seated at left is Tom Buis, CEO of Growth Energy, who helped “commemorate” the Organization of Petroleum Exporting Countries’ (OPEC) 50th anniversary. (Photo by Ken Kashian)
Federal support crucial to cellulosic ‘firsts’ The future is here for cellulosic ethanol, according to one of the Midwest’s leading pioneers in the field. However, funding for tomorrow’s cellulosic industry is more uncertain, Poet CEO Jeff Broin warns. Project Liberty, Poet’s planned 25-milliongallon-per-year cellulosic ethanol plant at Emmetsburg, Iowa, intends to use corn cobs and other post-harvest materials as feedstock. Broin told FarmWeek his company has made “tremendous strides” in collecting, transporting, and storing crop residues. This fall, Poet plans to collect 56,000 tons of residues in the Emmetsburg area. According to Broin, that is “a pretty good representation of what we’re going to need in the future.” The 22acre Emmetsburg site will include the capacity to house 23,000 tons of biomass “bales.” Poet also has studied collection of materials from as far away as South Dakota and Texas. Nearly two years of fine-tuning pilot operations and a partnership with global technology provider Novozymes are expected to greatly reduce the cost of processing biomass into fuel. The Emmetsburg plant is slated to launch in early 2012, pending approval of a U.S. Department of Energy (DOE) loan guarantee. Broin stressed industry financing will be as
crucial as new technology and logistics to future cellulosic commercialization. Thus he sees extension of the soon-to-expire 45-cent-per-gallon federal ethanol tax credit as important security, especially for biomass startups. A recent USDA report estimated the U.S. needs more than 500 new biofuel plants, at a projected cost of $168 billion, to meet a federally mandated goal of 36 billion gallons of renewable fuels per year by 2022. “As you go out to borrow money to build a facility like this, lenders are looking for longterm government programs,” Broin said. “A one-year tax incentive just isn’t enough to motivate them. It’s important we have longer-term incentives out there so projects can be financed and become a reality. “We’re going to need that (DOE) loan guarantee — it’s very important to our process. You can’t finance the first of anything without some help from the government.” The standard ethanol credit will expire Jan. 1 without congressional action (a parallel credit for use of cellulosic ethanol expires at the end of 2011). Rep. John Shimkus, a Collinsville Republican, is spearheading a proposal to extend the standard credit to 2015 and the cellulosic credit to 2016.” — Martin Ross
FarmWeek Page 5 Monday, September 27, 2010
ENVIRONMENT
Agriculture’s link to gulf hypoxia is still murky BY KAY SHIPMAN FarmWeek
The direct connection between Illinois farms and hypoxia in the Gulf of Mexico remains murky. Environmentalists and some government officials claim Midwest agriculture via the Mississippi River contributes 80 percent of the phosphorous and 70 percent of the nitrogen to water in the Gulf. Meanwhile, ag experts and other officials note increased fertilizer efficiency and widespread use of no-till and other conservation practices have reduced nutrient runoff and soil erosion in the Mississippi River Basin. Hypoxia is a depletion of oxygen in the water that can affect aquatic life. The size of the gulf hypoxia zone changes depending on the amount of
rain received in the Mississippi River Basin, gulf water temperatures, and the number of hurricanes that mix the water and reduce the zone, according to Dennis McKenna with the Illinois Department of Agriculture. McKenna has represented the state for years on a national hypoxia task force. “If we have more water move down the (Mississippi) river, we get a larger hypoxic zone,” McKenna said. Surprisingly, the BP Deepwater Horizon oil spill hasn’t influenced the hypoxic zone, according to McKenna and a new national report. McKenna explained the spill occurred east of the mouth of the Mississippi River while the hypoxic zone stretches from the river’s mouth to the west.
Last week, the National Oceanic and Atmospheric Administration (NOAA), the U.S. Environmental Protection Agency (EPA), and the Office of Science and Technology Policy (OSTP) issued a report on the oil spill and hypoxia. Microbes, which are consuming oil from the spill, have lowered oxygen levels, but those levels have stabilized and are not low enough to become a hypoxic zone, the agencies reported. In addition, the hypoxic zone normally is not found in deep water — 3,300 to 4,300 feet down in this case — where the oxygen reduction has been linked with the oil spill. Meanwhile, Illinois experts understand nitrogen sources, what happens to that nitrogen, and how it reaches waterways, but more information about
phosphorous is needed, according to McKenna. He said new questions about the amount of phosphorous contributed by streambank erosion have been raised. “This is something we need to know if we’re going to solve the problem,” he said. However, requiring farmers to change farming practices may result in unintended consequences that could lead to other water quality problems, McKenna warned. McKenna recommended the state develop a consensus on priority watersheds, determine the most cost-effective and acceptable solutions, and decide how those costs will be funded. “If you’re going to spend billions of dollars, you really need to have a plan,” McKenna said.
U.S. Senate ag leaders question growing EPA reach BY MARTIN ROSS FarmWeek
U.S. Senate ag leaders last week scrutinized the U.S. Environmental Protection Agency’s (EPA) growing reach and efforts to bring more farmers under its regulatory umbrella. During a Senate Ag Committee hearing, Jay Vroom, CEO of the trade group CropLife America, warned “the businesses that support American agriculture have seen serious deviations from the regular order, transparency, and scientific integrity of the federal government’s pesticide review process.” Vroom urged lawmakers to help put EPA “back on a path to a more productive dialogue that leads to reasonable, timely, and consistent solutions to our shared concerns.” But American Farm Bureau Federation regulatory specialist Don Parrish sees major roadblocks across that path. Farmers are concerned about a range of EPA issues, from new nutrient proposals in the eastern Chesapeake Bay that could set the stage for expanded livestock regulations to expanded purview over pesticide spray nozzle applications that eventually could limit crop protection options. “I think this administration is pushing for more ‘accountability,’ and that means more regulation of agriculture,” Parrish suggested. “They’re not being secretive about it: Whether it’s done at the national or the state level, this EPA’s pushing really hard to make sure there’s some kind of regulatory hook for farms. “We’re very concerned that’s going to have a really detrimental effect on our pro-
ductivity and our ability to produce a secure food supply.” Parrish sees a regulatory push seemingly aimed at larger ag operations that instead are raising costs for smaller, “local” producers, the latter of which ostensibly is supported by administration officials. Lawrence Elworth, EPA’s ag counselor, told IFB Leaders to Washington recently he would seek “individual perspectives” from new members of EPA’s ag advisory committee, which is to meet for the first time this week. Of all economic sectors within the Chesapeake Bay, Elworth noted “agriculture is the only one documented as making substantial contributions to reducing nitrogen and phosphorus over the last 25 years.” He said he sees other improvements agriculture could make in the area, but urged regulators to evaluate issues within individual watersheds and devise practices farmers “can do, can afford to do, and can do and stay in business.” “There’s no use in making changes on the farm (if it goes out of business and) we have it turn into a housing development,” he said. Meanwhile, USDA is working to educate EPA personnel with little firsthand production knowledge. Under federal pesticide law, EPA must consider only potential chemical risks without regard to offsetting ag/consumer benefits, but Harold Coble, with USDA’s Office of Pest Management Policy, told Leaders “we help them understand the benefits, anyway.” USDA recently schooled 55 EPA employees in pesticide
spray logistics, and was instrumental in persuading EPA to exclude crop applications from new general pesticide permits, at least for the present. Coble called the federal
court ruling ordering EPA to regulate applications under the Clean Water Act “one of the worst examples of overregulation and unnecessary regulation ever to come out of a judge’s mouth.”
USDA is fighting congressional proposals to expand EPA permit authority under the act “every chance we get,” he added. “We’re trying to make sure common sense prevails, if it can,” Coble said.
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FarmWeek Page 6 Monday, September 27, 2010
CROPWATCHERS Bernie Walsh, Durand, Winnebago County: Showers this past week put a stop to soybean harvest, even though some corn combining continued. We started on our beans on Sept. 17, and the first field of 2.1 maturity beans went 65 bushels per acre (bpa) at 12 percent moisture. That night we had 0.75 of an inch of rain, and ever since then it has been too wet for the beans to dry back down. Reports on corn harvest around here keep coming in with variable yields and moisture readings. There is some very good corn, especially corn after beans, with some all-time high yields. The corn-after-corn yields are coming in about average — 180 to 195 bpa. The moisture levels are still in the mid- to low 20s, but I talked to one producer southwest of Seward who reported corn at 13.5 percent out of the field, and that was running well above 200 bpa. Have a safe week. Leroy Getz, Savanna, Carroll County: Temperature fluctuations and rain on three different days totaled 0.95 of an inch for the week and 1.55 inches for September. Corn harvest continues without much delay. Some of us are still letting it dry more in the field. Moisture levels are in the 17- to 20-percent range. Yields are still considered good. Very few soybeans have been cut but they are ready when it dries out again. Larry Hummel, Dixon, Lee County: We have been trying to stick to soybean harvest, but a little shower every three days has made it more of a hit-and-miss proposition. Yields have been good. Two varieties that we harvested were in the low to mid60s, but the variety we are in now is running in the mid-50s. The soybeans that were hailed on were set back maturity-wise and look more like they will make 40 bushels. We haven’t harvested any corn, but most people are reporting moisture in the 18- to 26-percent range and yields that are average for corn on bean ground and 10 percent below average for corn on corn. The rally in the markets has made for a nice opportunity to make some grain sales at a high level, but then again, I thought I was selling at a good price when I sold some about a dollar lower. Joe Zumwalt, Warsaw, Hancock County: Harvest has moved along at a pretty rapid pace. I would estimate that perhaps 50 percent of the corn is harvested in my immediate area. Corn yields have been extremely disappointing for many producers in the area. Literally thousands of acres are not yielding averages better than 100 bushels per acre. In many cases, not even 50. Moistures have been low for the most part, ranging from 14 percent to 18 percent for what we have harvested so far. Very few beans, if any, have been cut and we are still two to three weeks away from harvest for most of them. It is odd to be harvesting so much dry corn with brilliant green soybeans, trees, and roadsides right next to it. An upcoming challenge may be all of the cottonwood and willow trees that have sprouted in the many wet holes around the area. With a challenging harvest facing us, at least we can be thankful for the improvement in the market prices. Ken Reinhardt, Seaton, Mercer County: More than 3.5 inches of rain through the week impeded harvest progress. No soybeans were cut, but some corn was shelled. It is going to be a rough year on corn heads now with all ditches from the rain. I’m up to three so far. Ron Moore, Roseville, Warren County: We received 3 inches of rain last week on three different days. The fields were dry, so we were able to harvest the next afternoon. We are 50 percent done with corn now. Last year, we had not even started harvesting corn yet. Yields are still lower than the five-year average. This year is one that will bring the averages down. Very few beans have been harvested in this area. The forecast is for dry weather this week and many of the beans should be ready by then.
Jacob Streitmatter, Princeville, Peoria County: During the week the rain kept a lot of combines out of soybean fields, but most were still able to harvest corn. If it is nice this week, I would bet there will be many soybean fields harvested. It looks as if 50 percent of the corn is harvested. The moisture of my corn has been running between 15 and 19 percent. Have a safe week. Tim Green, Wyoming, Stark County: Harvest is rapidly getting done around here. Corn is probably 40 percent to 50 percent done. Moistures are really good, so it helps us move along really fast. Yields, unfortunately, have helped, too. They have been somewhat disappointing — probably 30 to 40 bushels below last year. There is a lot of 120- to 130-bushel corn. It seems corn on beans is a little bit better. Beans yields so far have been good, but there haven’t been a lot of beans cut. It seems that about the time the beans get good and fit, it rains. Have a safe harvest. Mark Kerber, Chatsworth, Livingston County: Harvest is going well, except for a few rain delays which bring back memories of last year’s rains and mud during harvest. Corn is disappearing fast, being dry and with fewer bushels to haul. Soybeans are ripe, and combines are taking them out, weather permitting. My dad always instilled in us that if the beans are ready, you better get them, because you only have so many days to combine them. We are getting a lot of practice this year switching heads from corn to beans. I can still picture 80 acres of soybeans with a quarter-inch of ice on them in January of 1972. Fertilizer and lime are starting to be applied when the wind isn’t blowing 30 mph. Markets are due for a setback. Will there be another surge up as predicted? There could be a lot of long liquidation someday. Ron Haase, Gilman, Iroquois County: Harvest was slowed up Tuesday by rain. We received from 0.75 to 0.9 of an inch. The wind and hot weather helped dry down the crops that are still in the field. About 75 percent of the crops in the area have been harvested. I have heard a range of 47 to 218 bushels per acre on corn yields. Soybean yields vary quite a bit as well, but I have not heard many reports. Local closing prices for Sept. 23: nearby corn, $4.65, January corn, $4.91; nearby soybeans, $10.66, January soybeans, $10.97. Brian Schaumburg, Chenoa, McLean County: Howling winds and 90-degree heat pushed beans to maturity so we could finally start harvesting. Corn harvest is mostly complete. As disappointing as corn yields are around here, beans apparently are a pleasant surprise. Bears and Illini on a twogame winning streak? What a year! Corn, $4.60, January, $4.75, fall 2011, $4.26; soybeans, $10.53, January, $10.68, fall 2011, $10.28; wheat, $6.28. Steve Ayers, Champaign, Champaign County: Just listening to the rhythm of the falling rain this Friday morning as a cold front moves through. Temperatures will range from 50 to 75 degrees this week as things dry out. Combines took a breather Wednesday morning as we had 1.06 inches of rain. Area corn harvest is more than 70 percent completed and soybean harvest more than 30 percent done. We have 100 acres left to finish with corn yields in the 160s at 15 percent moisture. The SmartStax yields were disappointing, even though they looked green and healthy all season. We will start beans this week. Kudos to the Ivesdale, Bement, Atwood, Sadorus, Seymour, and Pesotum fire departments for containing a field fire to 20 acres Tuesday afternoon with those high winds. A combine, tractor, and auger wagon burned southeast of Ivesdale. Let’s be careful out there!
Wilfred
Dittmer,
Quincy, Adams County: Most machines will be parked for another day or so due to overnight Thursday rainfall of about 0.5 of an inch. That, added to about 1.25 inches during the Sept. 18-19 weekend and another 1.5 inches Tuesday night, have made conditions a little tough. Are we getting back into the wet-weather pattern of last spring? Sure hope not. Several have started in their corn, and some fields are history. Many others are still getting ready. Still no soybeans close by that have been harvested. Be careful as the harvest pace continues.
Tom Ritter, Blue Mound, Macon County: Spotty rains early last week slowed harvest a little, but farmers are advancing and corn harvest is up to at least 90 percent complete. Farmers are just beginning to harvest soybeans, and less than 20 percent have been cut. Rain Friday morning will slow harvest going into the weekend, especially for soybeans. Overall, farmers are fairly pleased with corn. Yields have been all over the board, but soybean yields seem to be a pleasant surprise. A lot of tillage work has been completed, as well as some fertilizer application. Harvest is at least half over. Last year at this point we had not even started corn, so we are well ahead of the previous year. Jimmy Ayers, Rochester, Sangamon County: We had 0.4 of an inch of rain on Saturday (Sept. 18) and on Tuesday we got 0.3 of an inch more. Tremendous amounts of corn were shelled during the week, and some got into their bean fields. It appears the beans are yielding a little more than guys anticipated. Corn is all over the board. We started out at 172 bushels per acre and worked our way down to a low of 115 so far. I’m thinking that our average will probably be off 15 or 20 bushels. It appears from our numbers that for every 10 bushels lost we need to have a price 30 cents higher to break even. It appears nitrogen loss is the key in the reduced yields. Corn on corn seems to have suffered quite a bit more than any other. Some of our poor lighter dirt on the hills provided some of our best-yielding corn, which is the reversal from a normal year. Looks like the bean crop should be good. My corn is 70 percent harvested and beans are maybe 10 percent done. Keep thinking safety as you travel your roads. Your family and friends need you. David Schaal, St. Peter, Fayette County: A busy harvest week here with warm temperatures and no rainfall. There was some corn shelling, along with producers heading to bean fields last week. Corn yields are still, for the most part, good to excellent. I finished with corn and started with beans on Thursday. Beans that I have harvested were beans-on-beans and the yields are decent. A little fall tillage work is going on. Some are itching to sow wheat. Grain markets seemed to rally through the last week of harvesting, so a “city slicker” told me good prices, good yields, so farmers have nothing to complain about. Happy harvesting and stay safe. Ted Kuebrich, Jerseyville, Jersey County: We received about 1 inch of rain last week with more on the way at the end of the week. In a couple of weeks we will get a better idea what corn yields will be. So far, the corn is yielding between 160 and 230 bushels per acre. Fields with good drainage have the best yields. The hot, wet summer had an effect on the corn crop. In parts of the county that received the most rain, the yield is down about 20 bushels from last year. Jersey County Grain at Hardin is getting in some new beans and the moisture is running 15 to 16 percent. Prices at Jersey County Grain, Hardin: Cash corn, $4.67, January 2011 corn, $4.94; cash beans, $10.80, October beans, $10.85, January 2011 beans, $11.08.
Page 7 Monday, September 27, 2010 FarmWeek
CROPWATCHERS Dan Meinhart, Montrose, Jasper County: We had a dry and very warm week with record-breaking temperatures and some very windy days. Most of the April-planted corn has been harvested. Some farmers are working on the May-planted corn. A few fields of beans were harvested last week, but for most harvest is a week or more away. A few fields of wheat have been planted. There will be a limited amount of wheat sown this year due to a shortage of seed. Several combine fires have been reported due to the dry conditions. The forecast is for a cooler week with a chance of showers at the beginning of the week. Bob Biehl, Belleville, St. Clair County: An excellent week of corn harvest. We had 0.6 of an inch of rain on the Sept. 18-19, but started harvest again on Monday, Sept. 20. Only about a third of the corn remains to be harvested in our area. On Friday, a cold front was going through bringing some scattered showers, but it looked like the rain would be minimal. Virtually no beans have been harvested in our area, but some late Group 3 beans are getting close.
Rick Corners, Centralia, Jefferson County: Corn is mostly done, except later-planted and replant, which I hear is still pretty damp. Bean harvest will start in earnest this week.
Dean Shields, Murphysboro, Jackson County: It felt like August last week, hot and humid. Hopefully, some cooler weather is coming. Most of the corn crop in Jackson County is picked. A lot of farmers have jumped into harvesting soybeans. The yields I’ve heard so far are OK to average. I know they say beans on the light soils burned up quite a bit. On the heavier soils, they are doing better. The milo crop looks like it is headed out real well, but I don’t know when harvest will get started. The wheat sowers have been busy for the last few days. I don’t know whether these will be the normal acres of wheat or more. Have a safe harvest. Reports received Friday morning. Expanded crop information available at FarmWeekNow.com
Kevin Raber, Browns, Wabash County: No rainfall this past week. It is getting extremely dry here in Southeastern Illinois. Corn harvest is probably 90 to 95 percent done. This is the earliest I can remember finishing corn harvest. My corn was probably 15 to 20 bushels less than I would have guessed at the middle of August. The beans that I cut were good on the dark soils, but yields really went down when going over the sand ridges. The moisture was down to 9.5 percent on the beans I have cut. Ken Taake, Ullin, Pulaski County: I managed to finish corn harvest on Monday, the 20th. Our corn yields were down about 20 percent from our fiveyear average. Soybean harvest is just under way. There have been quite a few beans cut in the area, but because of different combine issues we’ve cut only about 25 acres. It appears yields were running in the area of 40 bushels per acre. Talking to area farmers, it seems soybean yields are highly variable. I’ve heard everything from the 60s down to the lower 20s, depending on how the rains fell. Remember to be careful during this busy season.
October weather forecast favorable for harvest BY DANIEL GRANT FarmWeek
Summer and the summer-like weather conditions may have ended late last week, but the forecast for the next month is favorable
FarmWeekNow.com Check out the latest weather outlook for the remainder of fall at FarmWeekNow.com.
for harvest to continue at a rapid pace. The National Weather Service (NWS) has predicted conditions will remain warm and dry through October.
“The outlook for October calls for a greater-thannormal chance of abovenormal temperatures and below-normal precipitation,” said Kirk Huettl, meteorologist at the NWS office in Lincoln. The average temperature for the first three weeks of the month in Illinois, prior to the slight cool-down during the weekend, was 2 degrees above normal. In fact, high temperatures in the state from Sept. 20 to Sept. 23 ranged from 10 to 15 degrees above normal, Huettl reported. This followed temperatures for the climatological
summer (June through August) that were the fourth-warmest on record in the continental U.S., accord-
‘Ever ything is way ahead of schedule.’ — Kirk Huettl Meteorologist
ing to the National Oceanic and Atmospheric Administration. Autumn officially began last week, but temperatures
much of this week were projected to have a latesummer-like feel with highs in the mid- to upper 70s. The warm, dry stretch has allowed crop harvest to progress at a rapid pace. “Everything is way ahead of schedule,” Huettl said. “It’s kind of a flip-flop from last summer (which was abnormally cool) to this summer.” Corn harvest nationwide as of the first of last week was 18 percent complete compared to just 4 percent at the same time last year and the five-year average of 10 percent. Weather Services Interna-
tional (WSI) last week also predicted warmer-than-normal conditions will continue through October. “The combination of a La Nina event, a relatively cold north Pacific, and a record-warm north Atlantic are quite bullish for a very warm October” in the Northeast and Midwest, said Todd Crawford, WSI chief meteorologist. WSI predicted warmerthan-normal temperatures will continue through November in the Northeast and Central U.S. before shifting to a colder-thannormal pattern in much of that area in December.
U of I Extension answers questions about fall forage When should I apply nitrogen in the fall? The University of Illinois Extension recommends that fall anhydrous be applied with a nitrification inhibitor only after soil temperatures drop below 60 degrees Fahrenheit. No fall nitrogen should be applied on any field south of a line extending from Jerseyville to West Union. U of I Extension also recommends ammonium sulfate be applied only after soil temperatures stabilize below 50 degrees for several days. Slopes in excess of 5 percent should not be considered for surface applications of ammonium sulfate in the fall or winter. Urea-containing fertilizers should not be applied to “designated corn” ground in the fall or the winter because it converts too quickly and thus may not be
available to the crop in the spring. What are the risks if my forage is frosted early? Frosted sorghums/sudangrass should not be grazed until plant tissue has dried for three or four days after a frost to allow “frost released” cyanide to escape from the damaged plant tissue. If it is safe to graze prefrost, it should be safe to graze after the frosted tissue has dried. Sorghum-sudangrass hybrids should be 24
inches tall to have tolerable levels of prussic acid. Frosted alfalfa/clovers should be grazed only after tissue is dry (frosted alfalfa/clover may cause bloat). Can Central Illinois farmers “get by” with a last cutting of alfalfa in late September or early October? Alfalfa/clovers really need a 30- to 40-day rest period prior to dormancy, according to the U of I. Root reserves are the issue when
it comes to cutting alfalfa. Farmers want adequate carbohydrate reserves going into the winter to ward off winterkill. To establish those adequate root reserves, alfalfa needs about a month (some experts say more) of vegetative recovery before a killing frost induces dormancy. Central Illinois typically experiences its first killing frost a week “plus or minus” Oct. 12. Thus, cutting alfalfa
in late September or early October most likely will not allow enough vegetative recovery for the establishment of adequate root reserves, indicating a much greater chance of significant winterkill. Late September or early October cuttings, therefore, are just too risky. A post-dormancy cutting is sometimes a possibility if done a couple weeks following the first killing frost.
Farmers look to manage glyphosate-resistant weeds Nearly 60 percent of farmers who responded to a recent national poll said they are changing their weed management plans to deal with growing glyphosate resistance. The poll, conducted by BASF Crop Protection, showed a similar portion of farmers are adding a preemergent herbicide with
residual control to battle stubborn weeds such as ragweed, marestail, lambsquarters, and waterhemp. “Lambsquarters are coming through higher rates of glyphosate, leaving weed pressure and competition in fields later in the season,” said one grower in the national poll. While only 23 percent of
respondents believe glyphosate resistance will impact their yield this growing season, the poll confirms that many farmers believe they need to take action now to overcome the threat of yield-robbing glyphosateresistant weeds in the future. A Purdue University study conducted in 2005-2006 found 40 to 47 percent of
growers indicated that tankmixing glyphosate with residual herbicides, or including alternate herbicides with different modes of actions, would be effective management practices for minimizing weed resistance. Five years later, the BASF poll confirms that a majority of farmers are putting those ideas into practice.
FarmWeek Page 8 Monday, September 27, 2010
BIOTECHNOLOGY
GE salmon approval may offer upstream benefits BY MARTIN ROSS FarmWeek
Federal approval of genetically engineered (GE) salmon offers inroads for future livestock improvements as well as possible benefits for Illinois producers. The U.S. Food and Drug Administration (FDA) continues to review AquaBounty Technology’s application to commercialize AquAdvantage salmon, a fish engineered to reach market weight in half the time needed for conventionally raised salmon. AguaBounty argues improved production efficiency would contribute to more sustainable aquaculture systems. The company’s request, the first for a modified food animal, has generated some controversy, and FDA’s Veterinary Medicine Advisory Committee (VMAC) last week hosted a discussion of salmon labeling and other issues. Biotechnology Industry Organization director of animal biotechnology David Edwards cited FDA-vetted
data documenting that the AquAdvantage salmon is “extremely similar� in nutritional composition to conventional farm-raised salmon — a key factor in federal approval. Edwards acknowledged “there is a faction of people who have questions about the technology,� and VMAC recommended additional data that might verify the GE salmon’s safety for human or animal consumption. However, the consumer advocacy group Center for Science in the Public Interest anticipated AquaBounty’s application would be approved by the FDA. Edwards sees “no set timeline� for FDA approval of the AquAdvantage trait, but the agency is accepting comments on labeling of products derived from the salmon through Nov. 22. FDA also has released a draft 80-page environmental assessment for eventual public comment. AquaBounty has specified GE salmon — all sterile females — would be raised in secure inland facilities to avoid
The AquAdvantage salmon offers a greatly accelerated rate of gain. (Photo by AquaBounty)
contact with wild fish. Special netting would prevent birds from carrying modified salmon off-premises, wastewater treatment would be designed to prevent “escapes,� and each batch of modified salmon eggs would be inspected to ensure continued sterility. Edwards sees FDA’s decision impacting review of other GE animals “coming down the pipe,� such as pigs engineered to excrete less phosphorus or BSE-resistant cows. Inland salmon production, meanwhile, could offer a “real opportunity� for Midwest producers, he suggested.
“You could raise them close enough to Chicago to harvest the fish on-site and have them in the restaurants in Chicago that evening,� Edwards said. “That would be some awfully fresh fish, I’d say. “Part of the nutritional
requirements for salmon are met with plant-based materials. I’m sure that with something high in protein — we’re talking in the soybean range — there’s the opportunity for some of that feed to come from the Corn Belt.�
Grain entrapment training offered by GROWMARK GROWMARK Inc. is looking for a local rescue team to send to a grain bin entrapment training class conducted by an Iowa safety center. The National Education Center for Agricultural Safety (NECAS) in Peosta, Iowa, is offering grain entrapment rescue training for first responders with simulation equipment donated by GROWMARK, Nationwide Agribusiness, and Grain Systems Inc. (GSI). “In our business, as well as the business of farming, there are times when one must enter a grain bin,� said Randy Holthaus, GROWMARK grain systems marketing manager. “In the event of a problem, the actions of the first responders can mean the difference between life and death, so timely training is key.� FS Grain Systems has teamed up with Successful Farming magazine and GSI to send a local rescue team to be trained. The training will be in Peosta; Assumption, Ill.; or at a local facility. All travel, lodging, and training expenses for the team will be covered by FS Grain Systems. The rescue squad recipients also will receive a $2,700 aluminum rescue tube from GSI. Anyone can nominate a local rescue team by completing a one-page form available at {www.necasag.org} or at {www.growmark.com}.
WE SALUTE America’s Youth
National
4-H Week & PAS Week October 3-9, 2010
Illinois Farm BureauÂŽ $IĂ€OLDWHV Youth Education Committee:
Don’t miss our Early Season Sale from March 17-31, 2010
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FarmWeek Page 9 Monday, September 27, 2010
FROM THE COUNTIES
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ULTON â&#x20AC;&#x201D; The Womenâ&#x20AC;&#x2122;s Committee will sponsor a pork chop cookout from 11 a.m. to 5 p.m. Friday at the Lewistown County Market. In recognition of both October Pork Month and Breast Cancer Awareness month, all proceeds will be donated to the Susan G. Komen Fund. ANCOCK â&#x20AC;&#x201D; Farm Bureau, 1st Farm Credit Services, and Illinois Pork Producers will sponsor a pork burger cookout from 11 a.m. to 1 p.m. Wednesday at the Ursa Farmers Co-Op, Warsaw.
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K
NOX â&#x20AC;&#x201D; The Womenâ&#x20AC;&#x2122;s Committee, Illinois Pork Producers Association, 1st Farm Credit Services, and Knox County Pork Producers will deliver pork sandwiches and apples Tuesday to local grain elevators. â&#x20AC;˘ The Womenâ&#x20AC;&#x2122;s Committee and Williamsfield High Schoolâ&#x20AC;&#x2122;s home economics class will provide sack lunches to local elevators as a reminder to take a break during harvest. The sack lunches will be delivered Wednesday, as well as Wednesday, Oct. 13 and 27.
U.S. hog inventory down 3 percent; price forecast appears profitable BY DANIEL GRANT FarmWeek
Meat supplies likely will remain tight, and livestock prices are expected to remain strong as USDA on Friday reduced the swine inventory in the U.S. compared to last year. All hogs and pigs as of Sept. 1 totaled 64.991 million head, down 3 percent from a year ago, according to the quarterly hogs and pigs report released Friday. USDA also projected declines in the U.S. breeding inventory (5.77 million head, down 2 perFarmWeekNow.com cent) and inventory of market More details from the Sep- hogs (59.2 million head, down 3 tember hogs and pigs report percent). are at FarmWeekNow.com. â&#x20AC;&#x153;The breeding herd is the lowest on record,â&#x20AC;? said Bob Brown, an independent market analyst from Edmond, Okla., during a teleconference hosted by the National Pork Board. Brown also noted sow and boar slaughter from June through August declined 15 percent compared to last year and was the lowest on record. The USDA swine inventory estimates generally were in line with trade expectations and are expected to set the stage for continued profits in the industry. â&#x20AC;&#x153;We (in the hog industry) are making very good money,â&#x20AC;? said Ron Plain, University of Missouri Extension economist. â&#x20AC;&#x153;Futures (prices) look very good.â&#x20AC;? Spot October hog prices ended the day Friday up 60 cents at $79.02 per hundredweight while nearby December prices were up 42 cents at $76.45. Brown, Plain, and Shane Ellis, livestock economist at the Iowa Beef Center, estimated hog prices in the fourth quarter will range from $74 to $76 per hundredweight and between $74 and $78 per hundredweight the first quarter of 2011. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s looking profitable until August of next year,â&#x20AC;? Ellis said of Iowa State Universityâ&#x20AC;&#x2122;s hog market projections, which took into account a recent run-up in corn prices nationwide. Hog producers in August, for example, turned an estimated profit of $35 per head despite higher corn prices. Ellis estimated hog producers for the year will recover about 70 percent of what they lost in 2009. Higher corn prices may slow expansion in the hog industry, though. Plain noted the pigs saved per litter in the most recent quarter, at 9.81, increased just 1.1 percent compared to the trade estimate of 1.5 percent. â&#x20AC;&#x153;We knew that once we stopped cutting the breeding herd, weâ&#x20AC;&#x2122;d see a drop-off in the number of pigs saved per litter,â&#x20AC;? Plain said. â&#x20AC;&#x153;But this was a bit more of a drop-off than we were expecting.â&#x20AC;? Swine numbers trended in the opposite direction in Illinois. The total inventory of hogs and pigs in the state as of Sept. 1 (4.4 million head) was up 4 percent compared to last year. The number of market hogs (3.91 million head) increased 3 percent while the breeding inventory (490,000 head) was up 4 percent statewide.
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EE â&#x20AC;&#x201D; The Lee County Farm Bureau Agriculture in the Classroom teacher grant applications are due Oct. 1. Teachers must be a graduate of a Summer Ag Institute. Call the Farm Bureau office at 857-3531 or e-mail leecfb@comcast.net for an application or more information. TA R K â&#x20AC;&#x201D; Farm Bureau will sponsor farm visits Tuesday, Oct. 5, for more than 80 second-
S
grade students and chaperones from Charter Oak Primary School in Peoria. The students will visit the Mark Wilson farm, where they will learn about raising and caring for hogs. After lunch in the park, the students will visit the Frank Shafer farm and learn about harvest and farm safety. AY N E â&#x20AC;&#x201D; Farm Bureau will sponsor an â&#x20AC;&#x153;Ag-Spiredâ&#x20AC;? art contest. There will be two categories
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â&#x20AC;&#x201D; photographic and artistic. Three winners in each category will receive cash prizes. Deadline to return entries is March 1. Go to {www.waynecfb.com} to download a flyer, contest rules, and submission form. â&#x20AC;&#x153;From the countiesâ&#x20AC;? items are submitted by county Farm Bureau managers. If you have an event or activity open to all members, contact your county Farm Bureau manager.
State receives $650,000 for specialty crops Illinois Department of Agriculture (IDOA) Director Tom Jennings last week announced farmers and organizations across the state will receive nearly $650,000 in USDA specialty crop grants. â&#x20AC;&#x153;The purpose of these grants is to encourage additional production and access to nutritious, locally grown fruits and vegetables,â&#x20AC;? Jennings said. A total of 37 projects were selected for funding.
The government defines specialty crops as fruits, vegetables, tree nuts, dried fruits, horticulture, and nursery crops, including floriculture. Recipients with Farm Bureau connections include: â&#x20AC;˘ Illinois Agriculture in the Classroom will receive $10,000 to develop a new pumpkin Ag Mag to raise awareness of specialty crops and introduce more students to the concept of locally grown foods and the farmers who g row them.
â&#x20AC;˘ Jo D a v i e s s C o u n t y Far m Bureau will receive $7,583 to implement a marketing campaign to promote specialty crops at local f a r m e r s â&#x20AC;&#x2122; m a r k e t s. â&#x20AC;˘ The Illinois Specialty Crop Growers Association will receive $24,450 for a conference to educate specialty g rowers on a variety of i s s u e s. A list of the g rant recipients and their projects is available online at {Far mWeekNow.com}.
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FarmWeek Page 10 Monday, September 27, 2010
PROFITABILITY
Manage risk by not putting all eggs in one basket BY JEFF LYNCH
Breakfast used to begin with a walk to the chicken house. Farmers first practiced risk management by putting their eggs into multiple baskets, thus diversifying their holdings. No one intends for egg baskets to break, but such is a fact of life — sometimes there are no eggs for breakfast. Of course, risks are different today, but the importance of identifying and managing risk is the same as it was then. To prepare for the unexpected, we must first define our exposure to risk. There are many “egg baskets” today’s farmers must keep a close eye on. From commodity prices, seed varieties, and interest rates, to geography (multiple location operations make it critical to keep updated on weather variances), production practices (crop rotation), Jeff Lynch and off-farm employment, farmers have a lot to keep track of. On top of these, add water usage/quantity, crop insurance, land ownership, and public policy. These combine to create nearly a dozen items or areas farmers must monitor to reduce risk, improve profitability, and enhance competitiveness in an ever-changing global economy. We must accept risk; it is always among us. We cannot predict the weather, the markets, or changes in technology or farm policy. This is not necessarily a bad thing; after all, without risk, there would be no reward. Risk is inherently necessary to have value. What is the moral of the story? Identify your risks and consider what tools there are to manage those risks. Things such as crop insurance, hedging crop inputs or outputs, fixed-rate financing, using several different corn varieties, proper soil fertility, and other various tools can help manage the risk or the number of eggs being placed in one basket. Relative to other professions, farmers have more than their fair share of risk. Your local FS has a variety of individuals who can help you manage the various risks in your business. Use them to help you be on the lookout for any event that could interrupt your business goals. That way, if one basket breaks, you can still enjoy breakfast.
Recession ‘officially’ over
Farmers optimistic about future BY DANIEL GRANT FarmWeek
A survey of American farmers recently found the gloominess exhibited last spring has been replaced by a fair amount of optimism. The DTN/Progressive Farmer Agriculture Confidence Index (ACI), which is based on a random survey of 500 producers in the U.S., this month totaled 140. Any score above 100 indicates optimism, according to Mary Rose Dwyer, manager of the Ag Confidence Index. The initial survey of farmers for the ACI was conducted in April and that score was recalibrated to 100 to serve as the baseline for the index. “Since we last sampled producers, there was a good,
strong growth of optimism,” Dwyer told FarmWeek. “I think maybe the strong optimism has to do with the fact we’re in different stages of the farm year,” she continued. “When we surveyed farmers in April, there was a lot of anxiety about planting. Now that we’re into harvest, they have a better feeling how their year will be.” The yearly outlook also has improved dramatically in recent months due to market rallies in the crop and livestock sectors. The Present Situation Index portion of the ACI, which reflects producer sentiment regarding input prices and net income, was a strong 180 while the Expectations Index, which measures senti-
Jeff Lynch is GROWMARK’s assistant treasurer. His e-mail address is jlynch@growmark.com.
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-$42.36 $39.11 $50.00-$58.98 $54.46 n/a n/a This Week Last Week 25,557 23,985 *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 $81.32 $75.81 $60.18 $56.10
Change 5.51 4.08
USDA five-state area slaughter cattle price Steers Heifers
This week $97.00 $97.00
(Thursday’s price) Prv. week Change $97.88 -0.88 $97.90 -0.90
CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states. (Prices $ per hundredweight) Prev. week Change 112.22 -2.30
This week 109.92
Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 115-160 lbs. for 117.38-153.86 $/cwt., dressed, no sales reported.
Export inspections (Million bushels)
Week ending Soybeans Wheat Corn 09-16-10 12.1 29.9 28.5 09-9-10 7.3 32.3 43.0 Last year 1.1 26.9 41.0 Season total 22.7 326.5 88.3 Previous season total 19.3 251.1 110.2 USDA projected total 1470 1200 1975 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
ment 12 months from now, was a more reserved 118. “What a difference a few months makes in terms of producers’ optimism,” Dwyer said. The next producer survey will be conducted in December. In other economic news, the Business Cycle Dating Committee of the National Bureau of Economic Research last week declared the U.S. recession officially began in Dec. 2007 and ended in June 2009. The 18-month recession was the longest economic slump in the U.S. since World War II. Previously, the longest postwar recession was 16 months, which occurred twice (1973 to 1975 and from 1981 to 1982). The current economic outlook for the U.S. isn’t exactly upbeat, however. Unemployment continues to hover around 9.5 percent and the growth of the gross domestic product (GDP) has yet to surpass pre-recession levels. The committee noted economic activity after a recession typically is below normal in the early stages of expansion. Any future downturn in the economy now will be labeled a new recession as opposed to a continuation of the one that began in December 2007.
Landowners may apply for buffer program The Illinois Buffer Partnership, which includes the Illinois Farm Bureau and Trees Forever, is accepting applications from landowners who would like to participate in the 2011 program. The application deadline is Dec. 31. The partnership’s goal is to improve water quality by establishing buffers of trees, shrubs, and grasses along streams and in wetlands in the state. Individuals eligible to participate include farmers, rural landowners, and watershed residents. Participants are eligible to receive up to a maximum of $2,000 in cost-share funds and may participate in a half-price seed deal with GROWMARK Inc.
Participants also host a field demonstration day and share their knowledge with interested friends and neighbors. Applicants will be notified in Febr uar y if they have been selected to participate. For an application or more infor mation, contact Trees Forever at 800-3691269 or go online to {www.treesforever.org/Content/GetInvolved/ Programs /Illinois-Buffer-Partnership.aspx}. Between 2000 and 2008, Illinois has had 146 demonstration projects; 3,624 acres of buffers planted with 868,546 trees and shr ubs; 44 miles of streams protected; and involved more than 1,000 landowners and volunteers.
State corn husking contest Oct. 3 The 30th annual Illinois Corn Husking Contest will be held Sunday, Oct. 3, on the Harlan and Barb Jacobson farm 3.5 miles south of Roseville (on the west side of Highway 67) in Warren County. A paid membership in the Illinois State Corn Husking Association (ISCHA) of $15 is required to pick in the state contest for adult classes, and there is a $3 membership fee for youth. There will be a limited number of plots, so
those interested in participating in the contest should register by Tuesday. The state contest will begin at 9 a.m. There are 10 classes that will qualify contestants for the national contest, which this year will be held in Oakley, Kan., on Oct. 16 and 17. For more information, contact Dick Humes, ISCHA president, after 7 p.m. at 309-729-5261 or Frank Hennenfent at 309426-2854 or visit the website {www.illinoiscornhusking.com}.
FarmWeek Page 11 Monday, September 27, 2010
PROFITABILITY Corn Strategy
C A S H S T R AT E G I S T
Coarse grain supplies tighter This summer’s weather problems in former Soviet Union countries, Russia, the Ukraine, and Kazakhstan had the greatest impact on wheat fundamentals. But because the first two raise a lot of barley and feed-quality wheat, the situation has implications for coarse grain fundamentals, too. The industry has become even more sensitive to the changes in the world with talk that the yield of the U.S. corn crop is destined to decline more based on the disappointing early yield reports. Given the current U.S. yield forecast, the stocks-to-use ratio of coarse grain supplies outside the U.S. and China is expected to dip to 11.3 percent. That’s not quite as tight as it was in 2001 and 2007. If one uses a three-bushel lower U.S. corn yield, the
Basis charts
stocks-to-use ratio drops to 10.4 percent. That is slightly tighter than 2001 and 2007, but it’s still not as tight as it was in 1996, the last time China bought significant amounts of corn. That’s assuming the higher price levels do not slow demand, but they will. It’s just the extent of demand rationing that’s difficult to ascertain when the market seems wholly focused on supply issues. Last week, we talked about past markets that rallied into harvest. In each of those cases, the high prices hurt demand more than traders could foresee when they were focused on supply uncertainty. It is interesting that two of the years with harvest rally tops came during recessions, 1974 and 1980. And the third one, 1983, came just after a recession ended. The two instances in which rallies continued through fall into the next year came during times when economic activity was relatively robust. China’s intentions may be the biggest uncertainty the market faces going forward. And that uncertainty extends beyond possible corn imports to basic economic policy. The Chinese continue to have a problem reigning in inflation, not only for food, but in general. They could just as easily raise interest rates to slow economic growth as increase commodity imports to deal with inflationary problems. The former would have negative repercussions. AgriVisor endorses crop insurance by
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2010 crop: Even though December futures rebounded at week’s end, the drop below $5 was an indication the rally could be ending. The minor low could have been the seven-week low, or the break hinting the market may be poised to slip into it. Because downside risk is as large as it is, we think you should get sales up to recommendations. Storage costs are too steep to warrant storing corn off the farm. A hedge-to-arrive (HTA) for March delivery may work, especially for farmstored grain. 2011 crop: We still think this is a good point to begin sales. Use rallies to get up to recommendation. Fundamentals: There are subtle signs the surge in prices may be starting to ration demand. Last week’s lower-than-expected export sales were a hint demand may be moderating. Going forward, the trade is going to keep a close eye on the ethanol industry, especially with ethanol prices at a premium to gasoline blends.
Soybean Strategy 2010 crop: A steep decline in the dollar’s value ignited the latest wave of buying carrying soybean prices to new highs. Prices have reached what should be strong resistance. Get sales up to recommendation. If you store soybeans commercially, we wouldn’t discourage you from wrapping sales up. 2011 crop: If South America has another big crop, new-crop prices will be lower this spring. Make an initial 10 percent sale now. Fundamentals: Yield reports continue to be very good, confirming what USDA has indicated, this is a very good crop. Chinese buying has continued to be very good, but their buying may slow the next couple of weeks through a couple of fall holidays. It is important to remember we are starting to harvest a large crop, and with prices at these levels, producer selling off the combine should increase. A $1 break would
not be a surprise.
Wheat Strategy 2010 crop: Wheat penetrated the 20-day moving average, hinting the trend is shifting lower. Chicago December futures subsequently dropped through the 50-day moving average, adding to negative technical features. Old-crop sales were wrapped up when Chicago December futures traded to $7.40. Use rallies to get sales wrapped up. Storage hedges, or HTA contracts, for winter delivery are still the best tool. 2011 crop: Use rallies to
$7.40 on Chicago July 2011 futures for catch-up sales. If basis is wide compared to this past summer, consider a HTA contract. Fundamentals: Export business has started to slow. For the second week in a row, Egypt canceled purchases for delivery in the next marketing year. Egypt did buy some hard wheat from the U.S., but we are the only source until Australian crops become available. Weather in Russia remains on the radar, but some of the driest areas have picked up rains. Still, soil moisture reserves are low.
FarmWeek Page 12 Monday, September 27, 2010
PERSPECTIVES LETTER TO THE EDITOR If you eat today, thank a farmer
MOVING AWAY Might the livestock sector relocate offshore? Sometimes, simply asking a question may create more problems than initially imagined. For example, “Does this milk taste OK?” is a simple question that may lead to unexpected results, such as pouring the milk down the drain before tasting it. I am broaching a question that is being asked in U.S. agricultural circles — Might the U.S. animal production industry move offshore? I ask the question, not to create problems but to provide some insight into a very important issue that has become part of the agricultural conversation around the state. At one time, most of the clothes we purchased were made in the U.S. A similar situation existed for furniture, home appliances, and electronics. But those industries have changed dramatically over time, including moving off shore. While the industries may have left the U.S. for a variety of reasons, the consequence of their move is that most of their products are now made someWILLIAM place other than the U.S. BAILEY Might U.S. meat and poultry production, following the lead of those industries mentioned above, also move offshore? The question is not as farfetched as it might seem. As I’ve previously discussed, animal welfare activists have placed, are placing, and will continue to place restrictions on how livestock is handled. But the challenges facing production animal agriculture in the U.S. are not limited to the issues raised by animal welfare supporters. Costs incurred in meeting food safety regulations will continue to rise. Environmental costs associated with odor, transportation, or effluent disposal also will continue to rise as regulations become more complex and more strict. The recent news of salmonella found in eggs produced in
Illustration by Sharon Newton
Iowa probably will increase the criticism of the poultry industry and renew awareness of all of the issues for which it has been criticized — including not enough space and not enough fresh air for the chickens. The hog industry is facing criticisms similar to the poultry industry. And the beef industry faces concerns common to the others — too much manure and too much odor. Solutions to these issues are expensive and may make those industries less efficient. So, as costs go up and efficiency declines, might major U.S. meat companies shift their production systems offshore, while retaining control, to escape burdensome and expensive domestic regulation? I don’t know the answers to the question. But at least one industry group has begun research into trying to understand the potential impact on U.S. consumers of a shift in animal production offshore. The problem is that, in attempting to understand those impacts, more questions will be asked than answered: Do U.S. consumers care where their animal protein is produced? What does a shift mean for U.S. food security? How much do U.S. consumers value a safe food supply? How important is a transparent and carefully inspected food supply? Tough questions that are difficult to answer. But they need to be asked and, eventually, they will be answered. William Bailey is the director of the school of agriculture at Western Illinois University, Macomb. His e-mail address is WC-Bailey@wiu.edu.
Editor: American supermarkets are amazing places. Nowhere in the world is such a wide array of food available to everyday consumers. It’s important to consider the farmers, ranchers, and growers who work every day to produce this bounty of food, fiber, and fuel we use every day. Farmers are skilled businesspeople who work week days, weekends, even holidays. They pamper the soil and the plants that spring from it; carefully tend to their livestock; steer $100,000 harvesting machines; and still find time to manage their business spreadsheets with the patience of an accountant. There are approximately 2.2 million productive farms in the United States. Most of them are small, family-run operations that produce less than $250,000 of annual revenue and have expenses that can consume as much as 90 percent of that revenue. Many, if not most, farmers and ranchers work other jobs to supplement their incomes. So what does this hard work of our farmers, ranchers, and growers mean? In short, a lot. It means U.S. consumers pay less of their income for food than consumers in any other nation. And it means that in the future the energy that powers our cars and towns can be rooted in our forests and fields, not in foreign oil fields. So this week I am asking that you join my colleagues and me at the U.S. Department of Agriculture in thanking America’s farmers and ranchers for their role in making America a truly great nation. Scherrie V. Giamanco, Illinois Farm Service Agency executive director
Landowners’ constant refrain: Don’t dump on us Rural landowners have many responsibilities when it comes to their property, including disposing of trash — whether it’s theirs or dumped on their property illegally by othKAY ers. SHIPMAN That’s why a new campaign to prevent illegal dumping in Illinois is a good idea for everyone, especially rural landown-
ers. During a public launch Wednesday at a former dump at Markham in Cook County, the state Departments of Public Health and Natural Resources along with the state Environmental Protection Agency and Office of Attorney General are expected to draw attention to the problem and ask for the public’s help. The state also is seeking help from local governments, law enforcement, and organizations, such as Farm Bureau, to educate people and help stop illegal dumping. The focus is on
illegal dumping of garbage, rubbish, and refuse on someone’s property without his or her consent. Illegal dumps are potential health and safety hazards. For example, mosquitoes that can carry West Nile Virus and a type of encephalitis can breed in rainwater that accumulates in dumped tires or other trash. Under state open-dumping regulations, violators face penalties and clean-up costs. However, it is difficult to catch someone in the act — and prove — that individual was
responsible for the illegal dumping. The state agencies involved with the campaign are recommending illegal dumping be reported first to local county and city law enforcement by calling a non-emergency number. Farmers and rural landowners also can take steps to prevent people from dumping trash on their land. Post “no trespassing” and “no dumping” signs at a site. Restrict people’s access to a site, especially by preventing anyone
from being able to drive to the site. That can be accomplished by digging a deeper ditch, putting down railroad ties, or instilling a locked cable to prevent access. Illegal dumping isn’t just unsightly, it’s also unhealthy and potentially dangerous. Making people aware of the problem is a good first step. Preventing illegal dumping from happening will take a united effort. Kay Shipman is the legislative affairs editor for FarmWeek. Her email address is kayship@ilfb.org.