FarmWeek January 10 2011 by Illinois Farm Bureau

THE ILLINOIS AGRICULTURAL LEGISLATIVE Roundtable discussed concerns about the federal and the state Environmental Protection Agency. .........................4

THIS E15 LABEL has been offered by Illinois Farm Bureau as an alternative to the Federal Trade Commission’s much more inflammatory “CAUTION” label. ...........5

SPINNING WIND turbines increase the airflow near crops, but researchers are up in the air whether plant growth and yields benefit. ....................................13

Monday, January 10, 2011

Two sections Volume 39, No. 2

Congress could bring ceiling down on ag funding BY MARTIN ROSS FarmWeek

At a nearly $1.3 trillion current national deficit, Congress must come up with an average $4,300 per American “in order to get things back into balance,” according to American Farm Bureau Federation economist Bob Young. Farmers Bob Young likely will be asked to ante up their share well before lawmakers devise a new farm bill, Young warned.

The economist noted the U.S. today spends roughly “every dollar we take in” in federal revenues on defense, Medicare, Medicaid, Social Security, and interest on the national debt. Roads and bridges, education, food stamps, farm programs, and all the other government programs demand funding “over and above all the money we take in,” he said. The “deficit commission” proposes to trim $4 trillion from projected deficits through 2020. Roughly $670 billion of commission-targeted reductions ostensibly would come from net debt interest, while a projected $20 billion in

savings would come from cuts in federal procurement — in Young’s view, a dubious legislative prospect given lawmakers’ allegiance to major defense contractors and suppliers. “We’re going to end up needing to talk about raising the national debt level, possibly in February or the first half of March or so,” Young told FarmWeek. “There’s a lot of discussion about what folks are going to demand in order to grant that increase in debt level. “I think we’re going to talk about deficit reduction in 2011, and I think when we do, we’re going to have farm programs on the table for part of

that conversation.” Illinois Farm Bureau National Legislative Director Adam Nielsen noted national debt is rising by $6 billion a day. He cited concerns from new House Speaker John Boehner (R-Ohio) and others that “the creditworthiness of the United States is in jeopardy” without an increase in the debt ceiling. In its Nov. 15 draft report, the White House-authorized National Commission on Fiscal Responsibility and Reform suggested trimming annual commodity/conservation spending $3 billion by 2015. The commission’s final plan hewed closer to $1 billion, tar-

geting direct payments. Beyond direct program hits, Young cited the commission’s focus on eliminating “earmarks” — so-called “pork barrel” spending requested by individual lawmakers and blasted by fiscal conservatives. House and Senate Republicans recently vowed to reject earmarks in the 112th Congress. While he agreed many earmarks are “egregious,” Young noted the Food and Ag Policy Research Institute (FAPRI), which provides key analysis for Congress, remains “the longest-standing ‘earmark’ in the USDA budget,” funded for See Ceiling, page 4

Suite of state tax increases may be coming from session BY KAY SHIPMAN FarmWeek

Periodicals: Time Valued

The Illinois House was expected to vote Sunday on a laundry list of tax increases, program reforms, and property tax relief before the Senate takes up the package this week in the final days of the lame duck session. Constitutional officers and legislators will be sworn in Wednesday. Gov. Pat Quinn, Speaker Michael Madigan, and Senate President John Cullerton

reached a tentative agreement on a tax increase package that would address state funding

FarmWeekNow.com More details of the lame duck General Assembly session are available at FarmWeekNow.com.

problems over the next 14 years, according to Bart Bittner, Illinois Farm Bureau associate director of state legislation. “We’ve been concerned for some time with the magnitude of the state’s fiscal problems and appreciate the fact leadership is looking at solutions,” said IFB President Philip Nelson. “As we monitor the evolving proposals, we’ll look for accountability on any new revenue generated and no new program growth until our fiscal issues are adequately addressed. As part of this equation, it is critical the General Assembly look at improving the business climate in Illinois,” Nelson said. The proposed tax increases would generate an estimated $7.577 billion annually. As of FarmWeek presstime Friday, the proposal included a four-year increase in the personal income tax with a portion of

the revenue designated for the deficit, another portion for property tax relief, and portion to repay a 14-year borrowing plan. After four years, a portion of the tax increase would remain to pay for property tax relief and the borrowing plan. After 14 years, a portion of the tax

increase would remain to continue property tax relief. A corporate income tax increase also is being proposed. The funding package includes a 14-year borrowing plan to generate revenue to pay overdue bills and make current pension payments. A $1 per pack cigarette tax increase is

being proposed with that revenue going toward new education funding. The proposal also includes a three-year moratorium on new programs and reform of Medicaid, moves expected to produce $200 million in savings this fiscal year and additional savings in future years.

TWISTER AFTERMATH

Brothers Steve and Gary Hoke, left to right, stack hay bales they were able to salvage from the remains of a century-old, three-story barn in the background. The barn was destroyed by a New Year’s Eve day tornado that struck the Hoke’s farm near Petersburg in Menard County. There were about 800 bales in the barn at the time of the storm. More photos and a story appear on page 7. (Photo by Ken Kashian).

FarmWeek on the web: FarmWeekNow.com

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

FarmWeek Page 2 Monday, January 10, 2011

SPECIALTY CROPS

Quick Takes DAIRY AWAITING DECISION — Illinois Attorney General Lisa Madigan and her staff have not made a decision regarding a permit for a Jo Daviess County dairy, despite media reports to the contrary, according to Robyn Ziegler, spokesman for the attorney general. In October, the Illinois Environmental Protection Agency (IEPA) referred a matter involving the Tradition South Dairy of Nora to the attorney general; however, the referral “has not resulted in any public action,” Ziegler said. She said it was not appropriate to comment further on the matter. IEPA alleges Tradition South Dairy caused or allowed a discharge of silage leachate into a tributary of the South Fork of the Apple River. The dairy is owned by A.J. Bos. In December, an Illinois appellate court ruled in favor of the dairy and upheld a circuit court decision regarding a challenge of the dairy’s permit to operate issued by the Illinois Department of Agriculture. CHAPTER 11 FILING IN ELEVATOR CASE — A Central Illinois farmer who faces a lawsuit for his alleged part in an elevator failure has filed for Chapter 11 bankruptcy, according to “The Pantagraph.” Robert and Julie Printz of Hudson filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Springfield in December, the newspaper reported. The bankruptcy filing estimates the couple owes between $10 million and $50 million to 85 creditors. In May, the Illinois Department of Agriculture suspended the grain dealer and warehouse licenses of Towanda Grain Co. of McLean County. In June, Denver-based CoBank filed a lawsuit seeking more than $4.6 million from Robert Printz, who allegedly was advanced or borrowed millions from the elevator before it failed. Evergreen FS bought the elevator’s assets and reopened the business last summer. DDGS INTERESTS MOBILIZED — Voicing plans to “operate as normal in China,” the U.S. Grains Council (USGC) is coordinating an industrywide registration process for U.S. companies interested in responding to China’s “antidumping” charges against U.S. distillers dried grains (DDGs). China’s Commerce Ministry has launched a probe into the ethanol feed co-product. The case, which charges U.S. DDGs have been “dumped” into the Chinese market at prices lower than those charged elsewhere, was initiated on Dec. 28. While a decision won’t be reached for at least a year, U.S. companies were given only 20 days to register in the case. During the investigation, the Chinese government has the authority to impose higher duties on DDG exports. Today, there is a 5 percent duty on DDGs, but China’s announcement raises concerns that duties could climb to at least 50 percent. According to the Illinois Corn Growers Association (ICGA), those who register would be assigned a lower tariff if one were put in place, and those who don’t would face higher tariffs. “If you are exporting DDGS to China (directly or indirectly), or if you think you will in the future export DDGS to China, you should register,” ICGA’s Philip Thornton said.

(ISSN0197-6680) Vol. 39 No. 2

January 10, 2011

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

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Farmers: Think like customers — specialist BY KAY SHIPMAN FarmWeek

Farmers need to find the markets that best fit their farm and products and then tailor their marketing strategies to their customers, an Extension direct marketing specialist with The Ohio State University advised specialty growers. “It’s most important for a grower to find a fit with the buyer,” Julie Fox said during last week’s Illinois Specialty Crops, AgriJulie Fox tourism, and Organic Conference in Springfield. Fox advises growers and works with farm marketing programs in Ohio. She encouraged farmers to find buyers who have similar views on local food and want the types of products the farmer raises. She discouraged farmers from trying to convince buyers what’s right or judge the buyers’ definition of “local food.” In exploring potential markets, farmers need to consider their farming operations and products from the consumers’ viewpoint, according to Fox. “Think like your customers because if you understand where they’re coming from … you’ll understand their issues (and concerns),” Fox told farmers. She said farm business signs need to be colorful to appeal to tour groups of children and need to have large lettering for

Miriam Cooper of Cooper’s Mill Apple Butter and Jelly Factory of Bucyrus, Ohio, helps Pat Curran sample some of the 36 varieties of jellies and apple butters at last week’s Illinois Specialty Crops, Agritourism, and Organic Conference in Springfield. Curran owns Honey Hill Orchards near Waterman in DeKalb County. (Photo by Ken Kashian)

groups of senior citizens. Farmers also need to consider everyone involved with their marketing strategy, she recommended. Those individuals include family members and farm employees. “Are your family and workers willing to do what is needed to meet the market needs?” Fox asked. “If the people part (of the market strategy) fits, then look at your product, then places (to sell), planning, and processing.” Fox said she doesn’t expect the marketing trend or consumers’ interest in local foods to change in the near future. However, she added that there are several definitions of local food. Fox also encouraged farmers to market the qualities of

their products and farming operations of which they’re proud. For example, a farmer may offer customers on-farm activities or emphasize farming practices that are sensitive to environmental concerns. She also encouraged farmers to capitalize on cross-marketing opportunities with their customers. An Ohio restaurant promoted dishes with farm-grown asparagus and encouraged customers who liked the meal to text the farmer. The farmer gave a discount to any customers who sent a text and shopped at his farmer market stand. Farmers are advised to find markets that fit their operations and to tailor marketing strategies for their customers.

U of I Extension improving MarketMaker The new year is bringing new features and expanded uses for a University of Illinois Extension online marketing program that has spread to 16 states. “Technology is the trend we (farmers) have to embrace. That’s where the market opportunities are,” said Dar Knipe, a U of I Extension specialist and one of the originators of MarketMaker. The program is online at {www.marketmaker.uiuc.edu}. Knipe and fellow Extension specialist John Pike discussed new features and upcoming plans for the 8-year-old marketing database that received a national USDA award in 2010. Several improvements have made the program more consumer friendly, Knipe noted. Consumers and other buyers may search for farms with retail operations and other business outlets. New mapping tools also have expanded users’ abili-

ty to search the site. One new function features the in-season products in each participating state. When a user clicks on a product, such as Illinois peaches, he finds a list of all participating growers, farmers’ markets, or stores that sell Illinois peaches. A new business spotlight on the home page continually features a participating farmer or retailer. Knipe noted an Iowa poultry farmer gained a new retail market after her farm was featured. One feature that is still being developed would highlight unique specialty products that reflect individual states. Knipe said she would like a user to be able to scan MarketMaker for products, such as Ohio buckeye baskets, and be able to buy them online. Expanded search features now allow users to seek farm operations with certain characteristics, such as those with

Good Agricultural Practice (GAP) certification. Knipe and Pike encouraged farmers who already participate in MarketMaker to check their profile information and ensure it is current. By updating their electronic profiles, farmers may sign up to receive electronic trade alerts that would send an e-mail whenever a buyer posted a listing for a product or service the farmer offers, Pike said. An agritourism MarketMaker is being pilot tested in another state and soon will be offered in Illinois, Knipe added. Knipe and Pike said plans include adding information about institutional buyers’ and their requirements, farm-toschool buying and selling information, and mobile applications. “We’re at the point where we want to kick MarketMaker up to the next level,” Knipe said. — Kay Shipman

Page 3 Monday, January 10, 2011 FarmWeek

STATE GOVERNMENT

State money woes continue to ripple through ag industry BY KAY SHIPMAN FarmWeek

Agriculture agencies and educational institutions are grappling with funding cuts and shrunken staffs in light of the state’s poor financial conditions, ag Tom Jennings leaders reported to the Illinois Agricultural Legislative Roundtable last week. However, representatives of those entities also noted the General Assembly going into the weekend was discussing tax increases and other budgetary actions, and the legislature’s action could change the fiscal outlook. The Illinois Department of Agriculture (IDOA) has cut staff dramatically and now employs the smallest staff in the past 35 years, said Agriculture Director Tom Jennings. “We’ve learned to be more efficient and encourage our partners to do the same,” Jennings said. IDOA’s pain was shared

by the four state universities with agriculture programs that reported a long list of deferred maintenance projects, budget cuts, and staff shortages. One bright note was an increase in non-state research funding, Robert Hauser especially $17.1 million at the Southern Illinois University College of Agricultural Sciences and $60 mil-

lion at the University of Illinois College of Agricultural, Consumer, and Environmental Sciences (ACES). ACES Dean Robert Hauser, who reported for the four state ag programs, attributed the influx of external non-tax research dollars to the fact that “what we do is of high interest right now.” Illinois collegiate agriculture programs also are experiencing enrollment increases along with demand for their graduates. Students are reacting to

market signals that good jobs are available in agriculture fields, Hauser said. However, the ag programs can delay needed facility repairs and infrastructure needs only so long, Hauser noted. “This is serious. We’re facing something we haven’t faced in a long time.” IDOA, too, is facing uncertain impacts, especially those related to new the federal food safety law, Jennings said. IDOA staff is reviewing the new law to determine if IDOA would have new responsibilities.

Jennings expressed concerns that IDOA doesn’t have enough employees to staff homeland security response teams 24 hours a day, seven days a week. He explained teams of eight to 10 are needed and that three people need to be available to fill each position, meaning 24 to 30 people would serve on a team. “We may be looking at our partners,” Jennings told the ag groups. “We may talk to you in the near future about responding to potential problems.”

Ag groups set 2011 state legislative priorities The Illinois Agricultural Legislative Roundtable last week tentatively set its state priorities for the agriculture industry. More than 50 agricultural organizations, universities, agribusinesses, and state and federal government representatives attended a meeting in Bloomington. The following list of state priorities is preliminary, pending final consensus from all Roundtable members: • Solve state budget problems. • Make Illinois a business-friendly state, including such actions as embracing the Vision for Illinois Agriculture’s Smart Agenda goals and extending the research and development tax credit and the enterprise zone authority. • Clarify permit requirements related to Concentrated Animal Feeding Operation (CAFO) and National Pollution Discharge Elimination System (NPDES) rules.

• Maintain state funding for agriculture education for elementary through adult education levels. • Support funding for the University of Illinois Extension and the Council on Food and Agricultural Research (CFAR). • Seek state legislation to strengthen right-to-farm laws and oppose legislative efforts that would be detrimental to agriculture by anti-agriculture organizations. • Support agricultural research in Illinois while maintaining fiscal integrity. • Seek legislative changes to the Illinois Fertilizer Act that would privatize the funds collected from the fertilizer industry for use on research and education programs. • Support funding mechanisms for Soil and Water Conservation Districts. — Kay Shipman

IFB to focus on state funding, environmental issues Holding the line on state spending remains a top Environmental-related issues are at the heart of a Illinois Farm Bureau legislative priority for 2011. The couple of priorities. IFB board set the organization’s state legislative priorIFB will seek legislation to reconnect mineral ities during its December meeting. rights that have not been used in 20 years with the IFB will seek passage of a state budget that prosurface land owner. vides maintenance funding for within the current tax Bart Bittner, IFB associate director of state legislastructure for core agricultural programs. IFB also will tion, explained the legislation would address issues of support a no-growth program budget given the state’s mineral rights that were sold many years earlier but economic downturn and budget deficits. IFB has had remained dormant. The idea would be to have dora similar priority for the last several years. mant rights revert to the surface owner, he added. “The state is going to have to live within its budIFB considers any action by the mineral rights get. This means no new programs unless there’s a owner, such as development or even filing of a notice designated funding source,” said Paul Cope, IFB of continued ownership, to mean the rights are being assistant director of state legislation. used and those rights could not revert to the surface Currently, the state’s budget deficit is estimated at owner. about $13.5 billion, and economic indicators do not Under another proposal, the Illinois Environmensignal a fiscal turntal Protection Agency (IEPA) would around any time keep confidential the name of an soon. individual being investigated for a Meanwhile, state ‘The state is going to have potential environmental violation tax revenues continto live within its budget. This until the investigation is finished and ue to decline. Lawenforcement proceedings started. means no new programs unmakers and political The proposal was sparked by a fish l e s s t h e r e ’s a d e s i g n a t e d kill over Labor Day weekend in which leaders continue to discuss possible tax IEPA officials attributed a McLean funding source.’ increases and proCounty farm as the likely source of gram cuts or a comthe contamination. Later, the agency — Paul Cope announced it was considering several bination of both to IFB assistant director of state legislation address state fundother potential causes. ing problems. IFB will seek legislation that Under the current would require IEPA staff to refrain tax and revenue system, the IFB board seeks to main- from making public comments about a case in which the investigation was incomplete. tenance key Illinois Department of Agriculture Safety is at the heart of a fourth legislative priority. (IDOA) programs and keep as whole as much as posIFB hopes to pass legislation that would increase sible other programs and those funded through IDOA’s budget that provide direct support to produc- fines for misuse of slow-moving-vehicle (SMV) tion agriculture. emblems.

Currently, the fine for misuse of an SMV emblem is $25. IFB proposes to increase the fine to $75 in the hopes it would discourage improper uses. SMV emblems are to be used to identify tractors, farm equipment, animal-drawn vehicles, and other slow-moving vehicles, Cope noted. He said individuals who use SMV emblems to mark entrances to driveways and other entrances can cause safety problems. — Kay Shipman

FarmWeek Page 4 Monday, January 10, 2011

GOVERNMENT

Roundtable seeks congressional reins on EPA BY MARTIN ROSS FarmWeek

Jean Payne and her colleagues on the Illinois Agricultural Legislative Roundtable hope a new Congress can “bring some reason back” to federal regulation, particularly on the environmental front. Last week in Bloomington, Roundtable participants emphasized the need to address “oppressive regulations” chiefly through legislation that would limit U.S. Environmental Protection Agency (EPA) regulations that exceed congressional authorization and oversight. Members also targeted forthcoming farmer tax requirements and potential federal “hours of service” limits that could hinder seasonal ag transportation. After watching “our friends in the livestock industry” deal with concentrated animal feeding operation (CAFO) and National Pollutant Discharge Elimination System (NPDES) regulations, Payne, president of the Illinois Fertilizer and Chemical Association, said she was “taken aback” to discover NPDES rules could be applied to pesticide applications under EPA directives. The U.S. Clean Water Act was never intended to address “terrestrial” crop applications, she argued. But Illinois’ draft NPDES permit could see potentially thousands of Illinois pesticide applicators

“performing routine pesticide applications that could be inferred to be subject to an NPDES permit” (see accompanying story), she warned. “We have to fix this rule at the federal level,” Payne insisted. And the threat doesn’t end there. EPA is eyeing new dust control rules that could impact

‘ There need to be actions taken to make (EPA) accountable to our elected officials.’ — Jean Payne Illinois Fertilizer and Chemical Association

not only feedlots, elevators, and input manufacturers and suppliers but also ag movements on county roads. States are struggling with developing greenhouse gas (GHG) permits or surrendering to federal rules under EPA directives that, according to Payne reinforce the agency’s apparent power to “govern without authorization.” She is buoyed by indications that “EPA is going to be at the Capitol every week” under new U.S. House leadership. Rep. Darrell Issa (RCalif.) plans a series of hearings on EPA as chairman of the Oversight and Government Reform Committee.

Further, Collinsville Republican Rep. John Shimkus, chair of the House Energy and Commerce Energy and Jobs Subcommittee, pledged increased contact between his panel and the agency. “We hear there’s going to be much more oversight of EPA,” Payne told FarmWeek. “But it’s more than just asking them tough questions. There need to be actions taken to make (EPA) accountable to our elected officials. “EPA is just a branch of the government, not an autonomous branch of the government. We’ve been really stressing to our legislators, ‘They report to you.’ They can’t regulate these activities unless Congress has given (EPA) the authority and the funding to do so.” To some extent, lawmakers can rein in agencies by reining in funding via annual congressional appropriations. However, Payne stressed U.S. EPA can impose essentially unfunded regulatory mandates on states, which face the threat of environmentalist lawsuits if they do not or cannot comply. Both new NPDES rules and EPA-proposed greenhouse enforcement measures were directed by the federal courts. “You can take (EPA’s) funding away, but if you let the rules lay out there, someone will eventually pick them up and try to enforce them through the judicial branch,” Payne said.

Scott to Roundtable: Illinois under environmental gun BY KAY SHIPMAN FarmWeek

Illinois is under pressure to deal with excess nitrogen and phosphorous in streams, rivers, and lakes or face an undesirable alternative, the head of the Illinois Environmental Protection Agency (IEPA) warned Illinois Agricultural Legislative Roundtable members last week in Bloomington. The U.S. Environmental Protection Agency has “put states on nutrient diets and forced states to take quick action ... We don’t want to do that,” IEPA head Doug Scott said in his first appearance before the Roundtable. Scott’s warning was sobering news for farm and ag groups that are seeking changes to IEPA’s proposed general state permit for pesticide applications. Scott was asked why IEPA’s general Doug Scott National Pollution Discharge Elimination System (NPDES) permit covered more pesticide uses than a proposed national NPDES permit. “Illinois has different situations and may have to do more than other states because of that situation,” Scott told FarmWeek. After last fall’s nutrient summit and additional meetings, IEPA is “reinvigorating stakeholders’ efforts to establish (water nutrient) standards,” and had a meeting last week to discuss phosphorous standards, Scott noted. “USEPA and environmental groups will not stand for a donothing approach or (for states) to study issues for a decade,” Scott said. He pointed to USEPA’s controversial actions in the Chesapeake Bay area as the federal agency’s model. Many Roundtable members outlined their concerns about the proposed state NPDES permit in a letter sent to several IEPA officials, including Scott and Marcia Willhite, chief of IEPA’s water pollution control bureau. The groups’ main contention is that agricultural pesticide use does not fall under the scope of an NPDES permit. In addition, IEPA’s proposed NPDES permit “is too broad, and compliance will be costly and time consuming” for agricultural operators, the Roundtable members wrote. Roundtable members also sent a letter raising concerns about USEPA’s actions to Illinois members of Congress.

AFBF offers first shot at defining priorities With a new “dynamic” in Washington, this week’s American Farm Bureau Federation (AFBF) delegate debate will provide a crucial first stab at nationwide policy priorities before lawmakers dive into the 2012 farm bill. Illinois Farm Bureau delegates will prioritize “direct

payments, obviously,” as well as efforts to bolster the farm bill safety net through crop insurance or other means, said IFB Farm Policy Task Force Chairman Darryl Brinkmann, a delegate in Tuesday’s policy discussions in Atlanta, Ga. When the task force was

formed, House Ag Committee Chairman Collin Peterson (D-Minn.) intended to launch serious farm bill review this year. However, with a shift in House control and an influx of new members largely “elected on deficit control,” Brinkmann noted “the whole dynamic has changed.”

Ceiling Continued from page 1 nearly 25 years through an annual line item appropriation. Eliminating all earmarks would save what Young sarcastically termed a “whopping” $16 billion per year, or only $53 of the $4,300 per capita he believes is needed to resolve deficit woes. With “earmarks” under attacks, specific agency requests will be especially important to preserving non-mandatory ag programs and initiatives, Nielsen suggested. Ag/farm bill spending constitutes about 2 percent of the federal budget, and commodity spending roughly a tenth the cost of popular nutrition programs.

Direct payments account for 85 percent of farm program outlays. According to Young, that leaves “only one pot” for lawmakers eyeing commodity cuts. Public perception won’t help: He noted “agriculture’s doing pretty well” relative to the rest of the economy, posting some of the best debt-to-asset ratios in recent times. Farmers overall “have been prudent, very good managers over the course of the last 10-15 years,” Young said. “Keep doing that,” Young advised. “But I also will tell you that the folks in Congress know these numbers. They know you’ve been sitting on record net farm income.”

At last week’s Illinois Agricultural Legislative Roundtable, he recognized “we’re not going to get everything” desired, given regional/crosscommodity differences especially over average crop revenue election (ACRE) and supplemental revenue (SURE) standing disaster assistance programs. IFB President Philip Nelson nonetheless stressed the need to emphasize a “risk management philosophy” in Atlanta. IFB is wary of what Nelson termed a “rhetorical” AFBF policy proposal questioning ACRE’s continued “value” as a safety net and proposed dairy policy supporting “temporary” supply management measures opposed by Illinois delegates. IFB seeks increased coverage levels for ACRE, which has fared far better for Midwest producers than for

growers in the South. Moving to a county ACRE trigger — a major goal for some ACRE reform advocates — would require significantly increased annual program spending, Nelson said. Ensuring a strong safety net with limited dollars will require a unified ag front and, according to Illinois AgriWomen leader and Roundtable participant Penny Lauritzen, lawmaker education. Roundtable participants stressed the need to maintain the current ag budget baseline, protect crop insurance, and support adequate conservation funding in the next farm bill. “We have a lot of incoming freshman who aren’t familiar with the history of the farm bill or agriculture,” Lauritzen told ag groups. “It’s going to be up to us to hopefully enlighten them.” — Martin Ross

Page 5 Monday, January 10, 2011 FarmWeek

GOVERNMENT

Case against E15 on rocky legal ground? BY MARTIN ROSS FarmWeek

A trio of petroleum industry groups is asking a federal court to repeal U.S. Environmental Protection Agency’s (EPA) approval for “E15,” in what ag and biofuels interests see as an ultimately futile and costly effort. This fall, EPA approved 15 percent ethanol blends for 2007 model year and newer vehicles. But the National Petrochemicals and Refiners Association is spearheading a lawsuit challenging EPA authority to enact federal Clean Air Act rules for some vehicles and not others, arguing owners of pre-2007 vehicles could unknowingly “misfuel” with E15. Tom Buis, president of the biofuels group Growth Energy, maintained “concerns about misfueling are premature, as EPA is drafting a robust (E15) labeling rule and will conduct a vigorous public education campaign.” Renewable Fuels Association spokesman Matt Hartwig suggested E15 lawsuits “only serve to delay the inevitable.” “I think it will only serve to cost the taxpayers more money and cause more headaches for U.S. EPA, but I don’t think there’s a case here,” Illinois Corn Growers Association business development director Dave Loos told FarmWeek. “I’m not overly concerned, except what this could mean in terms of delays.” An EPA comment period on E15 labeling ended early last week, and final labeling rules are expected within

60 days. Meanwhile, the U.S. Department of Energy has submitted test results for 2001-2007 vehicles, and EPA soon is expected to announce whether it will expand allowable E15 use. Growth Energy spokesman Stephanie Dreyer was unable to discuss specifics of the E15 lawsuit, but she reported the organization’s legal specialists are examining “whether there are even grounds for a lawsuit.” In approving voluntary E15 sales, EPA “is not forcing anyone to use anything,” she said. Buis stressed “this is not the first fuel change in history,” recalling the U.S. phase-out of leaded gasoline. The phasedown started in 1973, but EPA did not totally ban on-road use of leaded gas until 1996 — “People wanted lead in their gasoline, because they thought they would lose octane if they didn’t have it,” Loos said. Further, EPA Office of Transportation and Air Quality Director Margo Oge cites EPA’s success in integrating mandated ultra-low sulfur diesel (ULSD) into the fuel mix and educating diesel users. In June 2006, EPA required ULSD as 80 percent of annual U.S. refiner output, and fuel sellers were required to label fuel type and sulfur content. Green Plains Renewable Energy CEO Todd Becker noted proliferation nationwide of “blender pumps” offering flex-fuel vehicle owners a range of gasoline blends from E10 to E85 — including blends prohibited for stan-

Schock lands trade, tax oversight roles Illinois continued to rack up potentially influential U.S. House appointments last week as Rep. Aaron Schock, a Peoria Republican, received an unusual trio of House Ways and Means subcommittee assignments. Most committee members serve on two subcommittees, but Schock was appointed to serve on trade, oversight, and Social Security panels. The trade subcommittee oversees multilateral and bilateral trade negotiations and trade barrier issues. Rep. Aaron Current congressional trade measures Schock include pending free trade agreements with South Korea, Colombia, and Panama. The oversight subcommittee has jurisdiction over Internal Revenue Code and related issues. That subcommittee is expected to review portions of President Obama’s health care law — a target for many House Republicans. As previously reported, Illinois also snagged two new seats on the House Ag Committee. Freshman Republican House members Bobby Schilling of Colona and Randy Hultgren of Winfield have been named to the committee. The committee’s third Illinois member, Urbana Republican Tim Johnson, is chair of the subcommittee addressing rural development, research, and other issues. Collinsville Republican John Shimkus chairs the House Energy and Commerce Environment and Jobs Subcommittee, a panel with U.S. Environmental Protection Agency oversight.

dard cars and trucks. Becker argued vehicle-appropriate fueling “comes down to proper labeling that’s happening already today.”

“The consumer can read correctly the labeling that’s on the fuel pumps today,” the biofuels manufacturer maintained.

Language, color, and emphasis are viewed as key factors in determining whether the U.S. Environmental Protection Agency’s new pump label for 15 percent ethanol (E15) gasoline blends serves as a consumer advisory that supports E15’s integration into the market or a warning that could discourage E15 use. The word “Caution!,” with the orange background, and a warning that improper E15 use could cause vehicle damage on the top left label, which was designed by the Federal Trade Commission (FTC) for EPA, worry ag and biofuels groups. Illinois Farm Bureau’s proposed example, top right, alerts consumers while playing up product identification and eschewing vehicle damage concerns, all on a more subdued blue background. The label offered by the national Renewable Fuels Association (bottom left) and industry ethanol group Growth Energy (bottom right) further downplay key advisory elements.

New tax law extends bonus depreciation In mid-December, President Obama signed legislation that would extend and expand the depreciation bonus through 2012. The recently passed Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act provides 100 percent depreciation bonus for capital investments that were placed in service after Sept. 8, 2010, through Dec. 31, 2011.

Depreciation bonus helps businesses cut their tax bill when they buy new equipment. It applies to purchases of tangible personal property (including construction, mining, forestry, and ag equipment) with a Modified Accelerated Cost Recovery System recovery period of 20 years or less. For equipment placed in service from Dec. 31, 2011, to

Dec. 31, 2012, the bill provides a 50 percent depreciation bonus. The earlier Small Business Jobs Act of 2010, which included a 50 percent depreciation bonus, still applies to purchases made between Jan. 1, 2010, and Sept. 7, 2010. Bonus depreciation applies to new equipment only, but is allowable for both regular and alternative minimum tax purposes.

NCBA seeks assistance for producers The National Cattlemen’s Beef Association (NCBA) is seeking assistance for producers who were affected by the bankruptcy of Eastern Livestock Co. of New Albany, Ind. The Eastern Livestock Co. in November bought and sold cattle in 11 states, including Illinois, and issued unfunded checks to cattle producers and livestock market operators. Overall, Eastern owes more than $130 million to 743 sellers in 30 states, according to USDA’s Grain Inspection, Packers, and Stockyards Administration. NCBA in response last

month sent letters to USDA and the U.S. Small Business Administration seeking financial assistance for producers affected by the bankruptcy. “Hundreds of cattle producers and marketers, through no fault of their own, have been financially harmed by Eastern’s bankruptcy,” said Steve Foglesong, NCBA president and a producer from Astoria. “We know Eastern may owe more than $130 million to producers, and without some short-term financial assistance, many operations may be forced to shut down or sell off assets to cover costs.”

NCBA requested USDA provide emergency access to short-term, low-interest loans or government-backed loan programs.

Clarification 1st Farm Credit Services (FCS) amended projected year-end earnings for 2010, which were discussed in last week’s FarmWeek. Income through Nov. 30 was roughly $68 million, and could be nearly $80 million by Dec. 31. However, that figure has not been audited or officially released, and is merely a projection.

FarmWeek Page 6 Monday, January 10, 2011

MARKETS

Volatility expected to persist in commodity markets BY DANIEL GRANT FarmWeek

Price volatility in the commodity markets is expected to persist much of this year as everything from tight crop supplies to fund action are driving daily market swings. Corn futures recently reached a 29-month high above $6 per bushel, wheat futures hit a 28-month high above $8, and soybean futures recently reached a 27-month high near $14. “Outside forces the last six months have really pushed and pulled the markets,” said Pete Manhart, analyst and owner of Bates Commodities in Normal. He spoke last week at a farm profitability workshop in Champaign hosted by Soyatech and sponsored by the Illi-

nois Corn Growers and Soybean Associations. “Overall, we’re bullish” about future price prospects, he continued. “We don’t think there are enough acres to produce enough crops to meet demand.” USDA on Wednesday will release its final crop production estimates for 2010 along with its winter wheat yield estimate. Manhart believes USDA will trim its final corn yield estimate, which currently stands at 154.3 bushels per acre nationwide, and possibly increase the final bean yield, which currently is 43.9 bushels per acre. He also predicted USDA will trim corn usage, because of lower feed demand, possibly raise soybean usage,

GROWMARK acquires four fertilizer terminals Bloomington-based GROWMARK Inc. last week announced it acquired four fertilizer terminals, including three in Illinois. GROWMARK and George Lamb last week entered into an agreement whereby GROWMARK will acquire Lamb’s Seneca Terminal in Seneca. The acquisition includes 45,000 tons of dry fertilizer storage, dock, and acreage. GROWMARK plans to add liquid nitrogen storage at the site. “This acquisition is a strategic location for our member cooperatives and other customers,” said Rod Wells, GROWMARK director of agronomy sales and operations. GROWMARK last week also agreed to acquire fertilizer

terminals in Illinois at Albany and Mapleton along with one in St. Louis, all currently owned by CF Industries. “This opportunity improves our supply and service capabilities, while bringing increased efficiency to our plant food operations,” said Jim Spradlin, GROWMARK vice president of agronomy. Overall, the acquisitions from CF Industries represent about 226,000 tons of dry and liquid plant food storage. The size and scope of the facilities will enhance GROWMARK’s capability to make large-scale purchases of domestic and offshore fertilizer production. “We will remain proactive in pursuing acquisitions and joint ventures that support our growth and service goals,” Wells added.

because of strong exports, and raise wheat acres compared to last year. The bull-run in the crop markets started last summer when drought cut into crop production in Russia and the Ukraine and more recently was fueled by drought concerns in Argentina along with flooding in parts of Australia. “Any hiccups in any growing regions will impact prices because we are so tight on

supply,” Manhart said. U.S. corn ending stocks (832 million bushels) as of last month were down to the lowest level since 1995/96 and carryout vs. usage was just 6 percent. Meanwhile, carryout vs. usage for soybeans last month was even tighter at just 5 percent as soy stocks totaled 165 million bushels. Crop prices last week actually softened, though, as hedge

fund managers rearranged their portfolios. Looking ahead, Manhart believes the commodity markets will continue to be pushed and pulled by fund activity, the value of the dollar, and the direction of the economy — along with the usual fundamentals. “What can a farmer do? Set traps and sell on highs or protect what he hasn’t sold,” Manhart added.

Rains finally come for Brazil’s bean crop BY PHIL CORZINE

I’m writing to you from Illinois, but if I were in Brazil, I would be dodging raindrops. Rains finally have arrived in earnest at all three of our farms. In southern Goias, our 2,200 acres of soybeans are getting almost too much rain, and we are having a tough time keeping up with our applications of herbicides and fungicides. Surprisingly, given the hot and soggy conditions, we haven’t had a significant outbreak of rust here yet (knock on wood), and the crop is advancing rapidly toward what could be a good finish. The first-planted beans, which have a maturity of about 110 days, should be ready for harvest by the last week of February. The 1,300 acres of soybeans at our second rental farm, located in central Tocantins, is getting enough rainfall now, but we did suffer through some dry periods during planting. The dry soils slowed germination and infected some of the seedlings with a fungus, and now we are fighting a fungal disease (not rust) on a portion of the area. We are hopeful that the already-planned ap-

plications of fungicide plus the top-dress of potassium will diminish the disease’s effects on our plants. At our farms near Araguacu, the rains were even spottier. We went 14 days without rain during planting. Planting took place over a six-week period, so we have fields starting to flower while we wait on others to germinate. Now the rains are coming — we’ve had nine consecutive days of rain totaling 8 inches. A Jan. 6 report from Conab, the Agriculture Ministry’s cropforecasting agency, estimated Brazil’s planted area up by 2.6 percent but held production close to last year’s 68.7 million metric tons (2.52 billion bushels) due to lower yields. However, the rains apparently are spotty in Mato Grosso, Brazil’s No. 1 production state, so the jury’s still out on Brazil. Phil Corzine is general manager of South American Soy, a global production management and investment company. His e-mail address is pcorzine@agpage.com.

Page 7 Monday, January 10, 2011 FarmWeek

WEATHER

Active month: Heavy snow, tornado hit state in December BY DANIEL GRANT FarmWeek

Most Illinoisans likely welcomed the relatively uneventful weather last week. A return to more seasonable temperatures and little precipitation the first week of January followed a vicious month of December in Illinois that was the 12th coldest on record, featured between one and 2.5 feet of snow at some locations, and produced thunderstorm activity the last day of the month that spawned an F-3 tornado. The twister, which reportedly was 200 yards wide and traveled a 3.5-mile path through Menard County, packed winds speeds as high as 136 mph. It was part of the same system, fueled by unseasonably warm air from the Gulf of Mexico, that produced tornadoes in the south and Midwest that killed six people in Arkansas and Missouri. No deaths were reported in the Lake Petersburg area, the epicenter of the twister’s damage in Menard County, but 22 homes were rendered uninhabitable and a total of at least 40 homes were damaged, according to report in the

Brothers Gary and Steve Hoke, left to right, of Petersburg sort through hand tools and other small items on their farm to determine what they can salvage and what must go in the dumpster after an F-3 tornado ripped through their farm in Menard County on New Year’s Eve. The brothers lost several outbuildings, and four tractors were damaged extensively by the twister. The brothers were waiting on machinery repair estimates as of last week. (Photos by Ken Kashian)

Springfield State Journal Register. Brothers Steve and Gary Hoke, who farm just south of Petersburg, lost a century-old, three-story barn and a 100-by50-foot machine shed in the tornado. It also caused extensive damage to four tractors and other machinery and implements, a corn crib, and a grain bin on the Hokes’ farm. “I was in Petersburg eating

Above: This debris field on the farm of brothers Steve and Gary Hoke of Petersburg was left in the wake of the New Year’s Eve tornado. The implements in the background are parked where a 100-by-50-foot machine shed stood before it was destroyed by the twister. Below: Remains of a century-old, three-story barn and lean-to are scattered about in front of a grain bin that lost its roof. Steve Hoke believes the body of the grain bin remains standing because it was full of corn at the time of the storm.

dinner at a New Year’s Eve fish fry when the storm siren sounded,” said Steve Hoke, who looked outside but could not see the twister that hit his farm. “Then I got a call that there had been damage. It’s not exactly the way I intended to start the new year.”

The Hokes as of last week salvaged some of the 800 hay bales of hay that were in their now-ruined barn, some tools, and some of their equipment. But they still were waiting on repair estimates for their tractors. “We’re trying to sort

through stuff now,” Steve said. “This time of year (there is time to make repairs). We’ll have everything up and going by spring.” Elsewhere, strong winds and heavy rains that battered the state on New Year’s Eve capped a wild month from Mother Nature. The statewide average temperature in December was just 24 degrees, 5.8 degrees below normal, the Illinois State Water Survey (ISWS) reported. Snowfall last month totaled 20.4 inches in ChampaignUrbana (the snowiest December on record), 18.1 inches in Bloomington-Normal (the second-snowiest December on record for that area), and 19.2 inches in Peoria (the thirdsnowiest December). The highest snowfall totals for the month, though, were 30 inches near Galena and 28.5 inches in Streator. The statewide average precipitation was just 1.8 inches last month, which was 0.9 of an inch below normal as most of the moisture was in the form of snow, ISWS reported.

FarmWeek Page 8 Monday, January 10, 2011

corn co orn ffarmer arme a er

IImage mage C Campaigns ampaigns

CHECKOFF CHE C HEC CKOF KOF FF F

Telling T elling the truth about fam e family mily cor corn n far farmers mers dominated dW Washington, ashington, a DC this yea yearr in an ad campaign like non ne other r. For over 60 days, Metr o subway stations and none other. Metro were along Reagan National Airport we ere inundated with the facess of family corn farmers, alo ong farms. Partnered efforts, w facts about their farms with s. Partner ed with in-state ef fforts, f this campaign made more educate mor e than h 100 million illi impr iimpressions. e i essions. Th The goall was to ed ducate the h people l that h most directly that dir ectly inﬂuence policies th hat impact corn farmers.

The Corn home-run corn farmers. The inaugural season at Th T he Cor n Crib was a home-ru un for family cor n far mers. from around were corn crop Families fr om ar ound Illinoiss wer e exposed to family co orn farmers and their cr op professional more as they enjoyed pr ofessiona al baseball as played by the CornBelters. At the mor e were presented t than 50 home games, audio o and visual messages aboutt corn wer e pr esented in an n entirely Pictured are e entertaining way to educate e an entir ely new audience. Pictur ed ar e the 2010-2011 Hasheider,, Secr Secretary; Treasurer; ofﬁcer team: (left to right) Larry L Hasheider etary; Kent K Kleinschmidt, T reasurer; e Billl Christ,, vice-chair S Scott Stirling, g, Chairman;; Bil

organizations groundPartnering with other farm or ganizations in Illinois, ICMB ICM MB undertook a gr oundbreaking effort br eaking rresearch esearch ef fffort to determine what inﬂuential people p think and feel aboutt Two amazing Illinois farmers. T w wo amazin g lessons learned: 1) most people p believe that the are families; pictured majority of farms ar e owned d by corporations, not famil ies; 2) the farmer pictur ed here indicated her e is the image that mostt of the people surveyed ind dicated best matched their looks Hard learn, the v vision of what a farmer look ks like. Har d lessons to learn n, but the rresearch esearch paves th he great w for gr way eat opportunitiess for education.

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Image Inform a growing world population of the beneﬁts of the improving technology of grain production.

Establish the current level of support for farmers among inﬂuencers and by 2012 increase that level of support.

Making ethanol “greener” Increase Illinois corn usage for ethanol to 1 billion bushels by 2012.

Reduce the average cost of producing ethanol by 10 cents/gallon by 2010.

Demonstrate through research that the corn to ethanol carbon footprint can be reduced to 25,500 btu per gallon by 2012.

Page 9 Monday, January 10, 2011 FarmWeek

annual report DOING THE GROUNDWORK

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Â&#x2021; Start Construction of two new lock replacements within the Upper Mississippi River Basin (one on the Miss. and one on the IL) by 2013.

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Â&#x2021; Increase corn and corn co-product usage by the domestic and international livestock sector by 5 percent by 2013.

Â&#x2021; Increase Illinois corn and corn products consumption by livestock by 50 million bushels by January 1, 2010.

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Ç Ĺ?Ć&#x161;Ĺ&#x161;Ĺ?Ĺś Ć&#x161;Ĺ&#x161;Ä&#x17E; Ä&#x201A;Ĺ?Ć&#x152;Ĺ?Ä?ĆľĹŻĆ&#x161;ĆľĆ&#x152;Ä&#x201A;ĹŻ Ä?Ĺ˝ĹľĹľĆľĹśĹ?Ć&#x161;Ç&#x2021;Í&#x2DC; Ĺ?Ĺś Ä&#x17E;Ä&#x161;ĆľÄ?Ä&#x201A;Ć&#x;Ĺ˝ĹśÄ&#x201A;ĹŻ Ä&#x201A;ĹśÄ&#x161; Ć&#x2030;Ć&#x152;Ĺ˝ĹľĹ˝Ć&#x;Ĺ˝ĹśÄ&#x201A;ĹŻ Ä&#x201A;Ä?Ć&#x;Ç&#x20AC;Ĺ?Ć&#x;Ä&#x17E;Ć? Ç Ĺ?Ć&#x161;Ĺ&#x161;Ĺ?Ĺś Ć&#x161;Ĺ&#x161;Ä&#x17E; Ä&#x201A;Ĺ?Ć&#x152;Ĺ?Ä?ĆľĹŻĆ&#x161;ĆľĆ&#x152;Ä&#x201A;ĹŻ Ä?Ĺ˝ĹľĹľĆľĹśĹ?Ć&#x161;Ç&#x2021;Í&#x2DC;

FarmWeek Page 10 Monday, January 10, 2011

RISK MANAGEMENT

Will ‘combo’ policies appeal to Illinois growers? BY MARTIN ROSS FarmWeek

Streamlined “combo” crop insurance policies could help bring some of Illinois’ roughly 20 percent uninsured producers on board this spring, Illinois Farm Bureau risk management specialist Doug Yoder suggests. Last fall, USDA’s Risk Management Agency unveiled its basic “yield protection” and “revenue protection” products for wheat producers, eliminating yield-based actual production history (APH) and revenuebased income protection, crop revenue coverage (CRC), and revenue assurance (RA) policies. This spring, corn and soybean farmers will have the same greatly simplified options. Roughly 80 percent of the state’s corn-soybean farmers currently purchase crop insurance. “In my opinion, this eliminates the potential confusion over which policy covers what,” Yoder said. “It simplifies the selection process. It also eliminates a choice. “Before, if farmers wanted a revenue-based policy, they could choose CRC or RA. A lot of times, that decision came down to which one was cheap-

er. They had different rate-setting mechanisms to determine premiums. Now, they don’t. “If implemented as we envision, the combo product simplifying the selection process could lead to increased (crop insurance) usage. I think most farmers are pretty comfortable with how crop insurance works, but it can be technical, it can somewhat be difficult to understand when you’re first getting started. This simplification should ease that uncertainty or uneasiness.” That said, premiums should be “noticeably higher” this season because of solid 2010 crops and prospects for high spring prices. ”The product you’re insuring is going to be worth more this year,” Yoder explained. Further, the new revenue policy appears to be based more closely on the RA rate-setting

mechanism than that for CRC, which offered at least slightly lower premiums for Illinois producers during periods of high and volatile crop prices. Previously, growers could opt for RA with guarantees based

on February average prices or an RA policy with an added October harvest price election. Combo offerings include a basic revenue policy that provides both price options, triggering claims based on the higher of the two, and a policy with a harvest price exclusion, at a lower premium. Whether producers opt out

of the harvest election should depend largely on whether they use insurance as a grain marketing tool, Yoder maintained. Growers who hope to take advantage of high prices and lock in a significant number of bushels ahead of harvest through forward contracting, hedging, or other strategies likely would be “strong candidates” for default harvest price election. “If you’re not likely to do a lot of forward contracting, if you can look at yourself in the mirror and say, ‘Even though prices are high, I know I’m not going to sell more than about 10 or 15 percent,’ I would challenge you as to why you’d need to spend that extra premium,” he said.

“If you buy that harvest price option, that’s basically a call option. If the market goes up at harvest time, you get a higher price. Those people who aren’t going to sell grain ahead of time already own it.” Under policy restructuring, both basic yield and revenue policies will be based on the February average price, further simplifying coverage decisions. The previous actual production history (APH) yield policy was based on a separate price set earlier by the Federal Crop Insurance Corp. Combo changes do not affect county-level crop coverages, which include yield-based group risk protection (GRP) or revenue-based group revenue income protection (GRIP) or GRIP with harvest revenue. As always, GRIP is a potentially more advantageous product for growers whose annual yields generally track with countywide averages.

RMA proposes rewards for good ‘performers’ Safe drivers frequently are rewarded with lower premiums. USDA now is proposing to give back to crop insurance customers who’ve taken less from the system. USDA last week launched a 15-day comment period (ending Jan. 21) on a proposed “good performance” refund program for crop policyholders who have FarmWeekNow.com claimed minimal or no losses Listen to our RFD Radio interview over an extended period, as well with a Risk Management Agency as selected “beginning” farmers. s p o k e s m a n a b o u t i n s u r a n c e USDA Risk Management changes at FarmWeekNow.com. Agency Administrator William Murphy reported nearly $75 million would be available annually for the program. Farmers could receive anywhere from $25 to $25,000 per year back on the nonsubsidized, out-of-pocket portion of their premiums. The program would be funded through a $2 billion reduction in insurance company reimbursements under last year’s renegotiated RMA standard reinsurance agreement. March 15 is the sales closing date for Illinois policies, and Murphy was hopeful the prospect of premium refunds would encourage corn and soybean growers to buy higher coverage levels, even with likely higher 2011 premium levels. “When we talk about the 20 percent (of Illinois corn and bean acres) we don’t insure, one reason we don’t is that it’s good black dirt that seldom has losses,” Illinois Farm Bureau risk management specialist Doug Yoder told FarmWeek. “A good performance discount may help get that ground insured.” Refunds would be available to eligible producers who have purchased federally subsidized policies for seven to 10 years with no more than one annual loss; producers with four to six years’ coverage with no losses; and some beginning farmers who have been farming for one to three years and whose premiums have exceeded their loss payments. Rewarding positive performance could benefit the crop insurance program and its producer-customers overall, Yoder said. He argued the plan could discourage insured farmers from claiming small or insignificant losses so they could qualify for a refund later, potentially lowering claims volume and administrative costs to crop insurers and potentially leading to reduced overall premiums. Murphy noted premium discounts previously were written into crop policies but discontinued in the 1990s. With corn and soybean producers comprising roughly 60 percent of the crop insurance program, he sees Illinois, Iowa, and southern Minnesota as “major pockets” for prospective new refunds. “So go those two crops’ experience, so goes the experience for our entire agency,” Murphy told RFD Radio. “We’ve had very good experience over the last 10 years.” For information or to comment on the refund proposal, visit RMA on the web at {www.rma.usda.gov}. — Martin Ross

Page 11 Monday, January 10, 2011 FarmWeek

FROM THE COUNTIES

ROWN — The annual meeting will be at 6:30 p.m. Wednesday, Jan. 19, at the Knights of Columbus Hall, Mt. Sterling. Retired Judge David Slocum will be the speaker. Tickets are $6.50 and are available at the Farm Bureau office. Call the Farm Bureau office at 217-773-2634 for reservations. OLES — Family bowling will be held Saturday, Jan. 22, at the Charleston Lanes, 1310 E Street, Charleston. Registration will begin at 3 p.m. with bowling to follow. The cost is $2.50 per game, and shoe rental is $2 a pair. Contact the office at 345-3276 by Jan. 20. ORD-IROQUOIS — A marketing meeting will be held at 7 p.m. Monday, Jan. 17, in the Farm Bureau building in Gilman. Doug Yoder, Illinois Farm Bureau senior director of affiliate and risk management, will present an update on the crop insurance program and provide information on using marketing tools available to producers. He also will demonstrate how to gain marketing experience without the risk of using real money or bushels through an online marketing simulator. Clayton Pope, AgriVisor LLC, will provide a commodity price outlook. ANCOCK — Trinity Lutheran Church in Carthage will hold a promotional meeting about “Share the Harvest” at 6:30 p.m. Monday, Jan. 17. Anyone interested in participating or helping with the program is encouraged to attend. A free dinner will be served, but reservations are needed by Wednesday and can be made by contacting the church at 357-2468. Last year the “Share the Harvest” program worked with 12 Hancock County churches, and production from 40 acres of land was donated. Proceeds from those harvested acres were sent through Food Resource Bank to a third world country to help people there improve their agriculture. The group chose to help an area in Guatemala where work is being done to develop sustainable agriculture through green house and irrigation projects. • The Hancock County Soil and Water Conservation District will hold an open house at its office in Carthage from 7 a.m. to 5:30 p.m. Thursday, Jan. 20. ANKAKEE — The Kankakee County Farm Bureau Governmental Affairs and Marketing Committee will sponsor a WILL AM 580 Market Outlook panel discussion at 7 p.m. Tuesday, Jan. 18, at the University of Illinois Extension office in Bourbonnais. Register by calling the Farm Bureau office at 815-932-7471. ASALLE — The LaSalle County Farm Bureau

Local Affairs Committee will sponsor an informational meeting about application of municipal sludge at 10 a.m. Tuesday, Jan. 18 at Pitstick’s Pavilion in Ottawa. On the agenda are Jerry Hutton, Illinois Environmental Protection Agency; Gary McCandless, Illinois Emergency Management Agency, and Greg Firrantello, Stewart Spreading. For more information, contact the Farm Bureau office at 815433-0371. EE — Lee, Ogle, and Whiteside County Farm Bureaus, and Sauk Valley Bank will sponsor a family farms transition dinner program at 6 p.m. Tuesday, Jan. 25, at the Post House, Dixon. Ron Hansen, University of Nebraska, will be the speaker. Call the Farm Bureau office at 857-332 or email leecfb@comcast.net by Friday for reservations. • The Young Leaders will attend a Rockford Ice Hogs hockey game Saturday, Feb. 5. Tickets are $11. Call the Farm Bureau office at 857-3531 or email leecfb@comcast.net by Friday for reservations or more information. • The Lee County Farm Bureau annual meeting will be at 10 a.m. Thursday at the Farm Bureau office. Coffee and donuts will be provided. CLEAN — Learn the facts on how to comply with the new oil spill prevention control and countermeasures rule at 7 p.m. Thursday at the Farm Bureau building. Don Herring, Evergreen FS energy manager, will discuss the rule, answer questions, and provide resources to help keep a farm spill prevention plan up to date. The workshop is free and open to all farmers. Reservations are encouraged but not required. Call the Farm Bureau office at 663-6497 or e-mail anna@mcfb.org for more information. ERCER — The Marketing Committee will sponsor its winter market outlook program at 7 p.m. Thursday at the Farm Bureau office. Dale Durchholz, AgriVisor LLC, will be the speaker. Call the Farm Bureau office at 309582-5116 for more information. • The annual meeting will be at 5:30 p.m. Thursday, Jan. 27, at the VFW Hall, Aledo. A pork chop dinner will be served. Cost is $3. Call the Farm Bureau office at 309-582-5116 by Friday, Jan. 21, for reservations or more information. • A variety of nuts and candy is available at the Farm Bureau office. ONROE — Agriculture and rural issues will be the subject of an update program at 8:30 a.m., Friday, Jan. 21, at the annex. Sheriff Dan Kelley and representatives of the conservation police, highway

engineer, Natural Resources Conservation Service, Extension, and a grain merchandiser will speak. Breakfast will be served. RSVP to 939-6197 by Jan. 18. EORIA — A market and weather outlook will be presented at 8:30 a.m. Thursday, Jan. 20, in the Farm Bureau auditorium. Mike McClellan will discuss weather for the 2011 growing season. Call the Farm Bureau office for reservations at 686-7070. • A crop insurance meeting is scheduled for 9 a.m. Wednesday, Jan. 26, in the Farm Bureau auditorium. Doug Yoder, Illinois Farm Bureau risk management specialist, will discuss 2011 crop insurance changes and options available to farmers. Call the Farm Bureau office for reservations. T. CLAIR — The Young Farmers will hold a blood drive from 3 to 7 p.m., Tuesday, Jan. 18, at the Farm Bureau building. • The annual meeting will be Friday, Jan. 28, at Augustine’s in Belleville. Tickets are $10 per person and may be purchased in advance at the Farm Bureau office. The entertainment will be music by Joe Powell. Reser-

vation deadline is Friday, Jan. 21. Call the office at 618-2336800 for more information. TARK — The annual Young Farmers’ blood drive will be from noon to 6 p.m. Friday at the Toulon Congregational Church. Donors and volunteers are needed. Call the Farm Bureau office at 286-7481 for more information or to volunteer. ERMILION — The market outlook seminar, sponsored with WITY, will be Monday, Jan. 17, at 9:30 a.m. in the Farm Bureau auditorium. Panelists Paul Coolley with ADM Investor Services, Pete Manhart with Bates Commodities, and Matt Payne with The Andersons will give their outlook on the markets for the coming year. • The Marketing Committee is hosting an “International Grain Markets: Connecting Vermilion County to the World” program at 6:30 p.m. Wednesday, Jan. 19, in the Farm Bureau auditorium. Burt Etchison, Stewart Grain in Bismarck, will discuss his company’s containerloading operation and grain marketing opportunities. Joe Daughhetee and Phyllis Parks will talk about their recent trip

to Brazil to learn more about our trading competitors. ABASH — The annual meeting will be at 6:30 p.m. Monday, Jan. 17, at Keensburg Christian Church. RSVP to the Farm Bureau office by Wednesday at 618-262-5865. INNEBAGO — Farm Bureau will sponsor a 14-day, 13-night trip July 25 through Aug. 7 to Alaska. Tours will include Denali, McKinley Explorer Rail Discovery Sternwheeler, and a glacier cruise. For more information, contact the Farm Bureau at 815-962-0653. OODFORD — A Young Leader meeting will be at 7 p.m. Tuesday at the Farm Bureau office. The meeting is open to all Farm Bureau members 35 years of age or younger. Call the Farm Bureau office at 437-2347 for more information. • An informational meeting on the spill prevention control and countermeasures ruling regarding oil and fuel storage will be at 1 p.m. Wednesday at the Farm Bureau office. Don Herring, Evergreen FS, will be the speaker. Call the Farm Bureau office for more information.

W W

FarmWeek Page 12 Monday, January 10, 2011

IFB IN ACTION

New YL chairman ready for a busy year BY DANIEL GRANT FarmWeek

Sean Arians, Normal, this year will complete his term on the Illinois Farm Bureau Young Leader (YL) Committee as its newly selected chairman. And 2011 should be a busy year for Sean Arians Arians, who started in Young Leaders in 2000 at the county level in Woodford County, as Young Leaders look to accomplish various goals and implement program changes.

“It’s going to be an interesting year,” Arians said. “Working with leaders from each county is always fun.” IFB Young Leaders will host their state conference in Springfield Jan. 28-30. IFB President Philip Nelson is among a list of speakers for that event. Young Leaders at the state conference also will announce the finalists for the YL Achievement and Excellence awards. The state winners of the awards will be announced in August during the AgriQuiz Bowl at the Illinois State Fair. The timeline for the two top YL awards is new this year to allow state winners more

time to prepare for national competition. State winners represent Illinois each year during the American Farm Bureau Federation (AFBF) annual meeting in January. The winners previously were announced in December during the IFB annual meeting. The YL state conference and AFBF annual meeting will be followed by the Young Leader Ag Industry Tour, which this year will be held March 1-6 in Arizona. Young Leaders also are expanding their presence online after introducing a Facebook page last year. “Anymore, it’s a primary means of communication,” Arians said of Facebook and

CIDER TASTING TRADITION

social media. “We’re trying to take advantage of that to get more people involved.” And getting farmers involved in leadership activities at the grassroots level is even more important these days as the overall number of farmers continues to decline, according to the YL Committee chairman. “It’s our challenge to make it at the front of young farmers’ minds that grassroots efforts still are as vital today

as they were back when Farm Bureau was started,” Arians said. Arians, who has a degree in agribusiness/business administration from Illinois State University, currently works as an education coordinator for Precision Planting of Tremont, which specializes in after-market planter parts. He hopes eventually to get involved in his family’s farm in Whiteside County.

AFBF names six Illinois farmers to commodity advisory committees The American Farm Bureau Federation (AFBF) Board of Directors has named six Illinois producers to its 2011 commodity advisory committees. They are: Harry Alten, Harvard, labor; Chad Leman, Eureka, swine; Kevin Miller, Teutopolis, feedgrains; Steve Pitstick, Maple Park, soybeans; Howard Schoenholz, Paw Paw, wheat; and Craig Tanner, Speer, ag nursery and greenhouse. IFB’s advisory committee

representatives will attend national meetings of the AFBF advisory committees in Washington, D.C., in February. Commodity advisory committees provide an opportunity to discuss and recommend solutions to problems that directly affect the commodity for which the member is appointed. The committees serve in an advisory capacity to the president and AFBF Board of Directors.

55 IFB members named to serve on Action Teams

Apple cider judging is an annual tradition at the Illinois Specialty Crops, Agritourism, and Organic Conference in Springfield. From left are Frank Dorris of Dorris Farms, East St. Louis; Mark Seibel, of FBScience Inc.; and Harry Alten of Alten Farms of Harvard in McHenry County. (Photo by Ken Kashian)

Illinois students sought for summer science camp The Illinois State Board of Education is accepting applications from high school seniors for the National Youth Science Camp (NYSC) June 30 through July 24 in West Virginia. Applications are due Jan. 28. Two students will be selected as official Illinois delegates, allowing them to receive a full scholarship. The NYSC program attracts outstanding science students from all 50 states for lectures and hands-on research projects presented by scientists from a variety of scientific fields. Students are challenged to explore new areas in the biological and physical sciences, art, and music. Student campers also present seminars covering their own areas

of research and interest. In Illinois, representatives from the governor’s office and the State Board of Education will review the applications. Selection will be based on a student’s achievement in math or science; school and community leadership; skills outside of the sciences and academic pursuits; and intellectual curiosity. Information about the camp and an application are available online at {www.nysc.org} or by calling 217-557-7323. Completed applications should be sent to: Illinois State Board of Education, Attn: Gil Downey, NYSC Selection Coordinator, 100 N. First Street, C-215, Springfield, Ill., 62777-0001. It may be emailed to gov.youthsciencecamp@illinois.gov.

The Illinois Farm Bureau Board of Directors has recently named 55 members who will serve on the 2011 IFB Action Teams. Action Teams will meet twice in 2011 to develop recommendations to the IFB board for statewide organization projects and programs in Education, Membership, Quality of Life, and Public Relations. Recent Action Team projects include ag information posters with a Route 66 theme, mini sessions at IFB annual meeting on farm succession planning, reusable membership tote bags, and pro-livestock billboards on I-80 near Ottawa. Team members, including chairs and vice chairs, and their county Farm Bureaus are as follows: Education: Gail Pollard, Winnebago; chair, Carleen Paul, Madison; vice chair, Sharon Barr, Hancock; Mike Chwasczinski, Washington; Audrey Davis, McHenry; Tom Feltes, DuPage; Bob Johnson, Grundy; David King, Tazewell; Paul Mariman, Macon; Leonard Sheaffer, Lee; Dale Wachtel, Effingham; and Dana White, Woodford. Membership: Dennis Verbeck, Henry, chair; Phillip Butler, Warren-Henderson, vice chair; Greg Anderson, DeWitt; Josh Curry, Henry; Monica Green, Douglas; Dave Krebel, Monroe; Ross Prough, Greene; Paul Rickey, Warren-Henderson; Jim Shanklin, Marshall-Putnam; Darrin Storm, Shelby; and Linda Wikoff, Knox. Public Relations: Connie Schneider, chair, McLean; David Headley, Fulton, vice chair; Joyce Bucklin, Greene; Jesse Edlefson, Henry; Mitch Heisler, Henry; Mike Hennenfent, Knox; Bob Kapraun, Woodford; Kevin Luthy, Randolph; Kimberly Meier, Stephenson; Kevin Miller, Effingham; Deborah Moore, Warren-Henderson; Diane Murphy, Montgomery; Keith Mussman, Kankakee; Vernon Schiller, McHenry; Rob Sharkey, Bureau; Karl Spencer, Jasper; Jacob Streitmatter, Peoria; Kevin Urick, Henry; Steve Weber, Henry; and Nick Wurl, Effingham. Quality of Life: Carrie Boelens, Henry, chair; Carol Jerred, Hancock, vice chair; Marion Barr, Hancock; Ray Dieter, Livingston; Don DuVall, White; Elaine Kapraun, Woodford; Julie Kern-Morrison, Sangamon, Steve Launius, Washington; Christina Lionts, Sangamon; Pat Titus, Douglas; David Wessel, CassMorgan; and Marguerite Zahnd, Champaign. Leading the Action Coordinating Council are Chair Dennis Verbeck, Henry, and Vice Chair Carleen Paul, Madison.

Page 13 Monday, January 10, 2011 FarmWeek

WIND ENERGY

Wind turbines may help crops, but key questions remain BY KAY SHIPMAN FarmWeek

Spinning wind turbines change the microclimate and increase airflow near crops, but researchers remain up in the air on whether plant growth and crop yields also benefit, a U.S. Department of Energy (DOE) researcher told FarmWeek. “You can see the turbines generate turbulent conditions that reach the (field) surface,” said Gene Takle, an agricultural meteorology expert at DOE’s Ames Laboratory and an Iowa State University professor. “But we don’t know yet if it will impact plant growth or yields,” Takle added. “Those are the key questions farmers are interested in.” Farmers in several parts of Illinois may be curious. In 2010 alone, Illinois wind developers brought online 427 turbines with the capacity to generate 716 megawatts of electricity. In 2010, Takle and a research team studied how wind turbines interacted with corn over several months. Takle’s scientific curiosity was sparked by viewing Chinese crop fields

Wind turbines, such as those in Illinois, influence crop field microclimates, but researchers don’t know yet if the turbines impact plant growth or yields, according to scientists at the U.S. Department of Energy’s Ames Laboratory. (FarmWeek file photo)

interspersed with fruit trees and years of research on U.S. ag windbreaks. Although his results are preliminary, Takle said he found a measurable impact of wind turbines on crops. The turbine blades change the turbulence over the

crop, especially at night, and increase airflow. The crops downwind of a turbine also take up more carbon dioxide, but Takle said he was not sure why that occurred. Takle speculated the turbines may influence some growing conditions. For

example, increased airflow may help dry dew and reduce conditions favorable to fungus and moisture-loving pests. A future experiment might measure dew duration and other factors related to high-moisture diseases, Tak-

Wind farm siting, zoning, taxing conference focus The latest information on siting, zoning, and taxing of wind energy farms will be offered by the Illinois Wind Working Group Feb. 9 at the Marriott Hotel & Conference Center, Normal. The early registration deadline is Feb. 1. Registration will start at 7:30 a.m. and the program will conclude at 4:30 p.m. Session topics include the best practices for county boards and zoning

boards, roads and school district taxation, county ordinance revisions, and property value guarantees and decommissioning. The early registration fee is $40 for government employees and members of county boards and zoning boards. After Feb. 1, the fee increases to $60. The early registration fee is $95 for all other participants and increases to $125 after Feb. 1. To register online, go to

{www.RenewableEnergy.ilstu.edu} and select this conference under “Upcoming Events,” then click under “registration.” Registration forms and information also are available from the Illinois State University Center for Renewable Energy, Campus Box 5020, Normal, Ill., 61790-5020. Questions may be referred to 309-438-7919 or by e-mailing RenewableEnergy@ilstu.edu.

le said. Some moisture flux measurements have been taken but not enough for a definitive answer, he said. Takle admitted drying conditions would be positive in wet years, but could be a negative during dry years. “We’re not sure if it’s large enough to be an impact,” he added. “We need to look at it in more detail in normal (growing season) years. What about dry years? We want to get to the bottom of it so we can respond in a scientifically defensible manner.” Another potential turbine benefit may be an influence on air temperatures. Extra air turbulence likely quickens the heat exchange when sun-warmed crops give off heat into the atmosphere. This would allow crops to stay slightly cooler during hot days. On cold nights, turbulence from turbine blades stirs the lower atmosphere and keeps nighttime temperatures warmer around crops. This might help crops ward off an early fall frost. Takle said he has proposed additional studies on wind turbines’ influence on crops but has not heard if his research will be funded. “If you see the Department of Energy’s goals for wind energy and turbines, it wants a lot of turbines,” Takle said. However, the government has focused more on urban-related turbine issues and less on the impact to crops, he noted. “I hope our (ag researchers’) voice is heard. We want to be up-front and answer these questions,” Takle said.

Environmental, conservation topics focus of regional tillage seminars A series of regional tillage seminars will provide farmers the most up-to-date research and information on soil conservation practices and environmental issues. The registration deadline is Jan. 18. Experts in soil fertility, cov-

er crops, water quality, and conservation tillage will lead the day-long event. The dates and locations will be Jan. 25, Parkland College, Champaign; Jan. 27, Milan Community Center, Milan; and Jan. 28, Joliet Junior College, Joliet.

Speakers will include Illinois Environmental Protection Agency (IEPA) Water Bureau Chief Marcia Willhite, Indiana state agronomist Barry Fisher, University of Illinois crop science professor Fabian Fernandez, Western Illinois

University agronomist Joel Gruver, and McLean County resource conservationist Dave Bishop. A discussion on nutrient reduction and best management practices is timely given the ongoing activities in the

Energy efficiency grants available for some co-op members The Illinois Clean Energy Community Foundation (ICECF) is offering a new energy efficiency incentive grant program for qualifying members of Illinois electric cooperatives. The program provides an incentive for lighting upgrade projects of ICECFqualifying entities supplied electricity by a cooperative. Facilities, such as schools, local government buildings, and other 501c3 not-forprofit entities qualify for the ICECF incentives. For complete program details

and eligibility standards, go online to {www.IllinoisCleanEnergy.org}. Under this program, up to $20,000 is provided to applicants not covered by ICECF’s current lighting programs or the investor-owned utilities’ Energy Efficiency Portfolio Standard (EEPS) programs. In addition to the lighting incentive, funding is available for qualifying facilities for geothermal heat pump installations, design of new “green” Leadership in Energy & Environmental Design

(LEED) certified buildings, and renewable energy systems using solar photovoltaic arrays, solar thermal installations, and wind turbine projects. Applications for 2011 may be downloaded from the ICECF website or contact Bob Romo at ICECF at 312-372-5191 or by e-mail at bromo@illinoiscleanenerg y.org. Information also is available from John Freitag with the Association of Illinois Electric Cooperatives at 217241-7973 or jfreitag@aiec.coop

Chesapeake Bay Watershed to improve water quality and the potential implications for Illinois. Each seminar will run from 8:30 a.m. to 3:15 p.m. The registration fee is $25 per person and includes lunch. For reservations for the Jan. 25 seminar, contact the Champaign Extension Center at 217-333-4901. For reservations for the other seminars, contact the Boone County Extension Unit at 815-3443710. The seminars are sponsored by the Illinois Department of Agriculture, the University of Illinois Extension, the Natural Resources Conservation Service, the IEPA, and state soil and water conservation districts.

FarmWeek Page 14 Monday, January 10, 2011

PROFITABILITY

Bullish oil market fuels higher gas, diesel prices BY DANIEL GRANT FarmWeek

The recent jump in gasoline and diesel fuel prices unfortunately could be the rule rather than the exception this year. National average prices at the pump the first of last week were up 53 cents per gallon for diesel fuel (to an average of $3.33 per gallon) and 40.5 cents per gallon for regular gasoline (to an average of $3.07 per gallon) compared to the same time last year, the Energy Information Administration (EIA) reported. EIA pointed to higher crude oil prices and higher refiner margins as key reasons for the hike in fuel prices.

Crude oil prices recently reached a 26-month high, topping $92 per barrel. “We could see (the price of oil) reach $95 (near term) and by spring I would not be shocked to see $100 crude,” said Jackie McKinnis, GROWMARK energy analyst. “But I don’t think we’ll see anything close to what we saw in 2008” when oil prices peaked at $147 per barrel. Higher oil prices likely will lead to even higher fuel prices this spring, said McKinnis, who didn’t rule out gas prices in coming months reaching $3.50 per gallon. Farmers who need to stock up on fuel for the spring

AgriVisor launches new website AgriVisor LLC last week launched a new website. The site, {www.agrivisor.com}, features an updated design which incorporates many new features and makes previously existing features easier to find. Visitors to the site will learn about the products and services offered by AgriVisor, as well as have access to daily market updates and advice. “AgriVisor is excited about FarmWeekNow.com our new website because it proTo visit the new AgriVisor webvides timely information in an site, go to FarmWeekNow.com. easy-to-access manner,” said Cory Winstead, AgriVisor risk management specialist. “The site allows farmers and elevators alike the opportunity to receive information that can help improve their profitability and reduce their risk.” AgriVisor LLC is a joint venture between GROWMARK Inc. and Illinois Farm Bureau and offers grain and livestock marketing analysis. AgriVisor also offers brokerage services, Crossover Solutions, and premium advisory services. AgriVisor services are provided through participating grain elevators.

M A R K E T FA C T S Weight 10 lbs. 40 lbs. 50 lbs. Receipts

Range Per Head Weighted Ave. Price $34.77-$55.75 $45.95 $58.50-$73.00 $70.90 n/a n/a This Week Last Week 30,959 36,500 *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 $70.52 $70.17 $50.48 $50.48

Change 0.35 0.00

USDA five-state area slaughter cattle price Steers Heifers

This week $104.59 $105.00

(Thursday’s price) Prv. week Change $106.88 -2.29 $106.74 -1.74

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 122.58 0.80

This week 123.38

Lamb prices Slaughter Prices - Negotiated, live, wooled and shorn 125-175 lbs 135-160 $/cwt., dressed, no sales reported.

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 12-30-10 20.2 10.3 15.6 12-23-10 30.7 19.8 42.6 Last year 38.8 10.1 30.8 Season total 789.7 649.1 568.6 Previous season total 751.7 492.0 550.3 USDA projected total 1570 1250 1950 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

planting season, therefore, may want to look for lulls in the market in January and February to make their purchases and avoid the possibility of paying higher prices in March and April. “Typically, there are four or five good opportunities to

pick up product cheaper (in January and February) and then (the fuel market) rallies into spring,” McKinnis said. EIA in its recent shortterm outlook projected the national price of regular gasoline this year will average $3 per gallon while the national

price of diesel fuel was projected to average $3.23 per gallon. Oil prices have trended higher in recent months due in part to stronger demand and support from investors who use crude oil and other commodities as a financial hedge, according to McKinnis. “The supply/demand picture has improved a lot since last year,” the analyst said. Long-term, oil demand is projected to swell and push fuel prices even higher. China, which currently uses about 9 million barrels of crude oil per day, by 2020 is projected to match the current rate of use in the U.S. of 20 million barrels per day. And by 2030, China is on pace to use as much as 40 million barrels of crude oil per day, McKinnis added.

Don’t ignore storage tank filters BY MATT THOMAS

When was the last time you checked the operability of your fuel storage tank? Tank filters are one of the single most important, yet vastly overlooked, items in the equipment industry. With the demand for cleaner, more Matt Thomas efficient engines comes the demand for smaller micron filtration. The 2011 line of FS Bio-Power filters provides you with filters that match your equipment filters. You might be asking yourself, “Why do I need to filter my fuel? Isn’t the fuel delivered to my tanks already clean?” In short, that answer usually is yes, but your storage tank isn’t 100 percent clean. Natural circumstances which occur over time produce rust, dirt, and corrosion, so once fuel is placed in the tank, it is no longer 100 percent clean. Therefore, filtering the fuel at the storage tank is an important step. Industry-leading equipment manufacturers have outfitted their engines with two-micron final fuel filters, at an average cost of $120 per filter. The average retail cost of a twomicron FS Bio-Power storage tank filter is $30, saving you 75 percent on average. In addition to that savings, the FS Bio-Power filter is considered progressive density. Progressive density is like having two filters in one because there are two media inside the filter, the first being 10-micron and the second being two-

micron. Also, the progressive density filter is impregnated with hydrosorb, which will remove water trapped inside the fuel tank. This provides you with proper filtration to match your equipment filter, while reducing the frequency of replacing the storage tank filter. Proper

filtration at the storage tank may have an initial start-up cost, but your return on investment will certainly pay you back. Matt Thomas is GROWMARK’s facility equipment product specialist. His e-mail address is mthomas@growmark.com.

Milk price drops $1.61 The Class III price for milk adjusted to 3.5 percent butterfat for the month of December was at $ 13.83 per hundredweight, $1.61 lower than the previous month. This latest price announcement confirms a more than $3 drop in the price of milk since the highs seen in October. It comes at a time when crop prices are at all-time highs, and the increase in feed costs places a great deal of pressure on the dairy farmer’s bottom line. Domestic demand for butter and cheese was lighter than expected during the year-end holidays.

FarmWeek Page 15 Monday, January 10, 2011

PROFITABILITY Corn Strategy

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

Major crop reports coming In the short term, little else matters other than the January USDA reports. Traders still remember all too well the negative shocks on last year’s reports, numbers that sent prices reeling over the first six months of the year. On Wednesday, USDA will release its final production forecasts for crops, Dec. 1 grain stocks levels, U.S. and world supply/demand estimates, and the first winter wheat planting forecast. Generally, the trade is looking for a slightly smaller corn production estimate (12.5 billion bushels), with soybean production (3.37 billion) nearly unchanged from November. Given the early harvest, the trade seems to feel USDA was able to closely forecast production potential in its last report. The slight reduction in corn yield expectations many are using is tied to the premise the January yield usually is slightly smaller in years it is reduced in October and November. The smaller ending corn ending stocks expectations (779 million bushels) is based on expectations USDA will raise its ethanol grind forecast. Expectations for another reduction in the soybean ending stocks forecast (157 million) are tied to the idea USDA again will raise its export forecast. The most anticipated report

Basis charts

may be the Dec. 1 grain stocks report, especially the corn stocks estimate. The range for this number is unusually wide at more than 1 billion bushels. Much of that can be tied to the volatility of corn stocks in the last two quarterly reports. June’s estimate was 300 million less than the trade expected, while September’s was 300 million more. There were a lot of reasons advanced in the wake of both as to why the USDA number was different than expected, but there is little “concrete” justification as to why the numbers “are what they were.” This report may not resolve the dilemma, as the December number has a history of being “volatile.” It may be March before analysts begin to get a sense of the actual supply. It is surprising the range for the soybean stocks estimates is more than 100 million bushels, as consumption is well documented. Still, most numbers cluster around last year’s 2.34 billion bushels. The other number traders are looking forward to is the first winter wheat planting projection. On average, they look for a 3.6 million-acre increase from last year’s extraordinary low acreage. You will remember that last year’s wet fall caused planting difficulties in both the Great Plains and Corn Belt, causing acreage to drop sharply. Given last year’s problems, this year’s good fall weather, and high wheat prices, it’s a little surprising to see analysts expect winter wheat plantings to rise only 3.5 million acres. Two million comes in soft red wheat, and 1.5 million in hard red winter wheat. There is a history of the USDA December planting number coming in below expectations, and some may be accounting for that. But given the flip in the situation from last year to this year, we’d be less inclined to expect that. Last year’s report ended up being a “game changer” for the first part of the year. Given the uncertainty, this year’s could be, too. We’ll know on Wednesday. AgriVisor endorses crop insurance by

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Cents per bu.

2010 crop: The March contract slide below $6. suggests a top may have been seen. Still, short-term direction will be influenced by the USDA reports Wednesday. You should have priced remaining bushels, other than “gambling bushels,” when March was above $6. Hedge-to-arrice (HTA) contracts for winter/spring delivery still look like the best marketing tool, but check returns against storage costs. 2011 crop: There’s a possibility December futures could move near $6. before peaking, but there’s a possibility it’s putting in a double top at $5.65. The gross income per acre is too high not to make a sale at these prices. Get caught up now. Fundamentals: The looming USDA reports are the key fundamentals at the moment. But Argentine weather remains a focus of the trade. Scattered showers moved through the region, but additional moisture is needed for Argentina to have a good crop. The current forecast calls for more chances in the short-term, but amounts are uncertain.

Soybean Strategy 2010 crop: The soybean rally was rejected at a level that contains a number of price objectives. Further gains may be dependent on the USDA reports and Argentine weather. Use current prices to sell soybeans, other than what you want to gamble with. 2011 crop: There’s a chance new-crop prices could move as high as current old-crop prices, but that may not come until late winter/spring, if it does at all. Because November futures may have completed the move up off the summer low, we urge you to get caught up now. Fundamentals: Once the USDA reports are behind, the trade’s attention will return to Argentina and China. Rain and cooler temperatures kept Argentine crop conditions from getting worse the first week of the year. Whether that signaled a more permanent shift is still not certain, but it is a possibility. Chinese demand has softened with uncertain

monetary policy, neutral to negative crush margins, and relatively high port stocks.

Wheat Strategy 2010 crop: The March contract is nearing the $7.70 support. If it violates this, especially if it breaks $7.66, it would give the short-term a more negative price look. The key fundamental remains uncertainty about quality milling wheat supplies. You still should wrap up sales if you have inventory. Because of the futures carry, HTA contracts for winter/spring delivery are still the most attractive tool.

2011 crop: Use prices above $8.30 on Chicago July 2011 futures to make catch-up sales. We even considered adding to them because of price, but believe it’s too early to go beyond 50 percent. If basis is wide on cash contracts, use a HTA contract. Fundamentals: The trade is keeping an eye on Australia, as the northern region contends with flooding. However, the vast majority of the wheat crop is grown and exported farther south, missing the excessive rains. The U.S. Plains remain extremely dry and vulnerable to winter kill.

FarmWeek Page 16 Monday, January 10, 2011

PERSPECTIVES

Numbers tell the success story of Rural Development in 2010

As one year ends and another begins, it’s common to reflect. The process is the same at Illinois’ USDA Rural Development. Here are the top 10 things we thought you should know ... by the numbers. 10. 53 community and non-profit projects were funded, providing COLLEEN essential services to CALLAHAN 606,000 residents. 9. 12,200 households were assisted with affordable housing opportunities. 8. 5,256 home loans were made. 7. 47 water projects were financed

to provide safe, dependable water to 40,800 users. 6. 247 business loans and grants were approved to help 197 business and job development projects. 5. Nine broadband projects were awarded to create high-speed Internet access for 394,737 residents in parts of 35 counties. 4. 4,400 customers will benefit from enhanced telephone and electric services made possible through Illinois Rural Development. 3. 143 renewable energy projects were funded to assist in energy independence. 2. $2 million, on average, was invested every day by Rural Development.

And the No. 1 thing you should know about Illinois’ USDA Rural Development investments in 2010 — 676,200 people stand to benefit through the financial empowerment provided by Rural Development. That’s the year in review, by the numbers. But there’s more. The close of the fiscal year coincided with the end of the American Recovery and Reinvestment Act. During the 19-month period that Recovery Act funding was available, Illinois’ Rural Development invested $485 million to support 63 rural community, business, broadband, and home projects. When all the numbers were tallied, Illinois’ Rural Development helped meet needs and make improvements that are affecting one in every 26 rural Illinois families! Illinois’ recipients capitalized on $744,252,366 in affordable loans and grants. And the cost to taxpayers was only 1.6 cents in administrative

cost per dollar distributed. In return, 30,500 individuals are in good homes; seven communities have improved library services; four hospitals and clinics are keeping good health care close to home; and 1,835 jobs opportunities are viable through business programs. Those projects were among the 6,126 financed in 2010. But of all the numbers, the most important one is incalculable. And that’s the impact these investments will have on the future of rural Illinois — the stabilization of our rural economy, and the improvement in the quality of life. Next, we’ll focus on 2011. USDA Rural Development already is providing assistance to meet the needs and challenges of the new year. Colleen Callahan is director of USDA Rural Development in Illinois. Her family raises Angus cattle on their Kickapoo farm. Her e-mail address is Colleen.Callahan@il. usda.gov.

What we know about the value of DGS in finishing diets When feeding corn distillers grains (DGS) in beef cattle grow-finishing diets, producers should have three primary concerns about DGS: • Inconsistency in nutrient composition; • High sulfur concentrations; and • Percent moisture of the DGS. Nutrient composition on a percent of dry matter basis can vary from ethanol plant to plant and between loads produced by the same plant with considerable week-toweek variation. However, most plants are becoming more consisPAUL tent in producWALKER ing DGS with less variation in protein, fat, and element concentrations than they did just a couple of years ago. In fact in some states, such as Illinois, several ethanol plants are very professional in documenting the quality of DGS produced. The inconsistency concern relates to inconsistent cattle performance if the nutrient composition of the DGS varies more than 5 percent. Sulfur concentrations in cattle diets above 0.4 of a percent of the total diet dry mat-

ter can result in sulfur toxicity symptoms and PEM (polioencephalomalacia). Generally, we have little concern regarding sulfur toxicity unless the DGS inclusion rate exceeds 40 percent of diet dry matter and the DGS sulfur concentration exceeds 0.9 of a percent. Moisture variability of DGS can be the cattle feeders’ biggest concern. DGS above 60 percent moisture can decrease substantially dry matter intake and lower cattle performance. In addition, DGS above 60 percent moisture does not store well, especially in warmer weather, and can deteriorate rapidly. An abrupt dietary switch from 50 percent moisture DGS to 70 percent moisture DGS can throw cattle off feed and negatively affect the cost of grain. Most cattle feeders also should have three marginal concerns regarding the feeding of DGS. They are: • Increased phosphorous levels in manure; • Increased incidence of fecal E. coli; and • Increased concentrations of mycotoxins in DGS. In several research studies, researchers have observed increased concentrations of phosphorous in the manure of cattle fed higher inclusion lev-

els (40 percent or more of the diet dry matter) of DGS. Higher manure phosphorous concentrations can be a concern when land-applying the manure, especially if the soil concentration of phosphorous is high. Therefore, the more phosphorous the manure contains, the more acres required for manure application. The concern regarding the relationship between E. coli concentrations in the feces from cattle fed DGS and the amount of DGS fed is not completely understood. Unpublished research at Illinois State University (ISU) suggests there is no relationship between fecal E. coli concentration and dietary inclusion of DGS, but published data by other researchers have found a linkage. I have speculated other environmental factors, such as environmental temperature, rainfall, lot conditions, and cattle stress have more effect on E. coli than does the dietary inclusion level of DGS. Mycotoxin concentration in DGS is of greater concern in swine and poultry diets than it is for cattle diets. Even so, cattle feeders should be cognizant of DGS mycotoxin concentrations, especially in years when weather conditions increase the likelihood of mycotoxins in

shelled corn as the ethanol production process concentrates the mycotoxin level in DGS. Cattle feeders always should request a current DGS nutrient profile that includes a mycotoxin concentration analysis. Finally, cattle feeders need to consider storage of highmoisture DGS. In research conducted at ISU, we successfully stored wet DGS of 40 to 60 percent moisture for up to eight months during warmer weather, including over the summer. We used both the

“vacuum method” and the “salting method.” I recommend storing wet DGS in a bunker by sprinkling one pound of salt per one square foot of surface area on the top of the piled DGS. Then, cover the pile with a plastic tarp. This is a low-cost, effective method of storing wet DGS without — or with minimal — nutrient loss. Paul Walker is an agriculture professor at Illinois State University, Normal. His e-mail address is pwalker@ilstu.edu.

“She wants to be an actress, but she’s my best producer.”