A MADISON COUNTY family is concerned about the impact return of the “death tax” next year could have on the family’s farming operation. ........................................4
MIDWESTERN SENATORS are joining forces in an effort to kick down the 10 percent ethanol blend wall. Illinois Sen. Dick Durbin is among those involved in the fight. ..5
PROPOSALS TO PROHIBIT biotech crops within Midwest wildlife refuges is frustrating to producers deprived of other key agronomic tools. .......................................................9
Monday, July 12, 2010
Two sections Volume 38, No. 28
Bipartisan duo seeks window for estate tax reform BY MARTIN ROSS FarmWeek
With Congress heading into a pre-election home stretch, prospective estate tax reformers must “break the logjam” before once-exempt farm heirs find themselves again liable to Uncle Sam, a Farm Bureau analyst warns. U.S. Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (RAriz.) are seeking their opportunity to move a plan that would place a new $5 million per individual/$10 million per couple exemption on the estate tax. The House late last year approved “permanent” extension of the tax at a 45 percent rate on all assets inherited
above $3.5 million per individual or $7 million per couple. Unlike the House plan, the Lincoln-Kyl bill proposes adjusting exemptions annually to track with the rate of inflation. The measure includes a 35 percent top tax rate and
FarmWeekNow.com Listen to Pat Wolff’s comments on current estate tax legislation at FarmWeekNow.com.
“stepped-up basis,” enabling heirs to take the fair market value of an estate for capital gains purposes and pay capital gains tax on the difference between the net sales price
and that stepped-up basis if and when they sell assets. “(Lincoln and Kyl) need a vehicle — they need something to amend the plan to,” American Farm Bureau Federation policy specialist Pat Wolff told FarmWeek. “It’s kind of a case of wait-and-beready. Once they have a bill to amend this to, the vote will happen fast. “Right now in the Senate, there aren’t 60 votes for any (estate tax) proposal. If the House bill came up in the Senate, it wouldn’t pass. There are people in the Senate who want to do more than what the House bill did.” The senators had hoped to attach an amendment to the
Senate version of a small business package that recently cleared the House, but colleagues already had “filled the tree” with other tax breaks and incentives, Wolff said. Meanwhile, Sens. Sheldon Whitehouse (D-R.I.), Tom Harkin (D-Iowa), and Bernie Sanders (I-Vt.) have unveiled a so-called Responsible Estate Tax Act which would impose a new 10 percent “billionaire’s surtax” on estates worth $500 million per individual and restore 2009’s $3.5 million exemption with a 45 percent rate on estates up to $10 million. The Whitehouse-HarkinSanders bill would allow “family farmers” to reduce the
value of their land for estate tax purposes by as much as $3 million, indexed for inflation, under the tax code’s Section 2032A “special use valuation” clause. Today, eligible heirs can reduce farmland values by $1 million. Farm Bureau supports unlimited special use valuation, and Wolff held that is “a step in the right direction.” But although she noted 2032A is a potentially valuable tool particularly in areas with “inflated land values” such as those abutting major cities or national parks, special use valuation carries a See Estate tax, page 4
State ends fiscal year 2010 in the worst shape ever BY KAY SHIPMAN FarmWeek
Periodicals: Time Valued
Illinois’ financial shape on June 30 was its worst ever, and the state must set aside “a large portion” of this year’s revenues just to pay off last year’s debts, according to a July report from Comptroller Dan Hynes. “Illinois ended the fiscal
year in the worst fiscal position in its history,” the “Comptroller’s Quarterly” report stated. At the end of June, the state owed $4.7 billion compared to the $2.785 billion the same time a year ago. Not only had the debt grown, but so had the wait for those owed state payments — another dubious record. By June, the payment delay had increased to 153 working days, up from 99 days the previous year. “As a large portion of the fiscal year 2011 revenues must be set aside to pay the prior year’s bills, payment delays over the course of the next (fiscal) year are likely to be even more prolonged than what was seen in fiscal year 2010,” the report said. If last fiscal year’s revenues are any indication, the outlook is grim at best. Corporate income taxes were down 20.5 percent or $350 million; sales taxes dropped 6.9 percent or $465
million; and personal income taxes fell 7.7 percent or $712 million. With reasonable revenue
performance but no significant changes to the current budget, “the state will likely end fiscal year 2011 with a ...
bill backlog significantly higher than that at the end of fiscal year 2010,” the report concluded.
NICE AND EASY
Jesse Jansen of Montrose carefully maneuvers a 1911 Case 110-horsepower antique tractor off a trailer last week during the opening day of Historic Farm Days in Penfield. The steam-powered goliath is owned by Jansen’s father, Bill, of Dieterich. More than 1,000 antique tractors and farm implements were displayed during the four-day show. (Photo by Daniel Grant)
FarmWeek on the web: FarmWeekNow.com
Illinois Farm Bureau®on the web: www.ilfb.org
FarmWeek Page 2 Monday, July 12, 2010
ECONOMY
AG PLATE BENEFITS — Christmas came early for Illinois Agriculture in the Classroom (IAITC), thanks to agriculture specialty license plates. Susan Moore, IAA Foundation director, recently received $50,000 for IAITC programs and activities based on the anticipated number of specialty ag plates in circulation. “It’s an amount that will continue to grow as vehicle owners renew their plates,” Moore said. Last year, the specialty plates generated $10,000 for IAITC. Plates were first offered in 2007-08. Moore thanked Steve Simms and Illinois Farm Bureau’s promotions team for initially collecting signatures to support the issuance of the plate. She noted that many Farm Bureau and Country Financial vehicles are outfitted with ag specialty plates, as well as those purchased by individuals. BAD POLICY? — Sixteen U.S. senators, including bipartisan Ag Committee leaders, have chastised USDA’s planned $6 billion in crop insurance cuts. Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.) voiced support for increasing and improving crop insurance coverage at the committee’s first 2012 farm bill hearing. “If we could get every farmer in this country to 85 percent revenue insurance that is affordable, we would go a long way in filling the holes of the current safety net,” she said. But Lincoln and colleagues are concerned expanding future farm coverage will prove more difficult if USDA slashes funding in its standard reinsurance agreement (SRA) for companies that sell federal crop policies. Insurers must sign the agreement this month to continue offering coverage. “We remain concerned that the $6 billion in proposed cuts over the next 10 years to the program reflected in the SRA will severely constrain the (Congressional Budget Office spending) baseline for the farm bill,” Sen. Saxby Chambliss (R-Ga.) and others said in their letter to USDA. TRADE PROGRESS AND PRIORITIES — In its progress report on the recently created national export initiative, the White House last week cited improved advocacy efforts on behalf of U.S. exporters, increased access to export financing, greater efforts to remove trade barriers and trade rule enforcement, and “international promotion of policies leading to strong, sustainable, and balanced economic growth.” But ag interests continued to push congressional approval of free trade agreements (FTAs) with Panama, Colombia, and South Korea as crucial pieces of the U.S. trade agenda. Citing Canada’s aggressive market expansion push, a coalition of ag and food groups last week urged lawmakers to work with the Obama administration to remove remaining impediments to a “rapid implementation” of outstanding FTAs. The U.S. Department of Commerce recently coordinated 18 trade missions with more than 160 companies in 24 countries, while federal loans to support American exporters more than doubled over the same period last year.
(ISSN0197-6680) Vol. 38 No. 28
July 12, 2010
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BY KAY SHIPMAN FarmWeek
That loss of jobs would cause the ag sector unemployment rate to increase from 12 percent to 14.6 percent, according to Coursey. The impact would be even greater if the job losses were concentrated in the nation’s corn-growing sector, he added. “Ninety to 95 percent of the (ban) impact will be felt by small, rural family farms,” Coursey said.
The nation’s agricultural sector would lose jobs and income related to corn production if the U.S. Environmental Protection Agency (EPA) bans atrazine, a University of Chicago economist reported last week. “A ban on atrazine on the national level would have a devastating effect on the U.S. corn economy,” Don Coursey told journalists during a teleconference hosted by the Tri‘Ninety to 95 percent of the (ban) imazine Network. Coursey recently completed an econom- pact will be felt by small, rural family ic study on atrazine usage. farms.’ EPA is studying the potential health risks related to atrazine. At the end of the — Don Coursey review, the agency will deterUniversity of Chicago economist mine if it needs to revise its position on atrazine or if current use restrictions are sufficient. An atrazine ban would result in additional Coursey first examined the impact of an loss of jobs related to grain sorghum and sugatrazine ban on Illinois corn production. He ar cane production, he added. estimated Illinois farmers would lose between “We know how important a single job or $166 million and $450 million annually due to even a handful of jobs are in a rural comreduced yields, increased production costs, munity,” said Jere White, chairman of the and other factors. Triazine Network and executive director of Then, Coursey applied a similar economic the Kansas Corn and Grain Sorghum Growloss to U.S. corn production. He estimated ers. U.S. corn growers would lose between $2.3 A recent University of Illinois study billion and $5.08 billion annually if atrazine showed atrazine also is a key management use is banned. tool for sweet corn production. U.S. sweet By applying that economic loss to the corn growers would pay an additional $9.2 national Gross Domestic Product, Coursey esti- million for weed control if atrazine is banned, mated the nation would lose between 21,000 according to Marty Williams, U of I and and 48,000 jobs related to corn production. USDA ecologist.
Nearly half of H1N1 vaccines may go unused The H1N1 flu outbreak last year, which initially was mislabeled “swine flu,” is costing the U.S. more than lost pork exports. About $260 million (40 million doses) of H1N1 vaccine produced for the U.S. expired at the end of June. The outdated vaccine will be incinerated, the Associated Press reported. But the losses may not stop there. About 30 million additional doses of the vaccine will expire later this year and could go unused. If the remaining vaccine expires, more than 43 percent of the supply for the U.S. public will have gone to waste, AP reported. Overall, the government last year purchased nearly 200 million doses of H1N1 vaccinations, which is about double the amount of vaccine made for seasonal flu. But demand for the vaccines never materialized as tests showed one vaccine was enough to protect most people; much of the vaccine was not ready until late 2009 when the largest wave of illnesses had passed; and H1N1 turned out to be much less deadly than feared.
Federal officials defended the large purchase as a necessary risk taken to protect the public against a new virus. Many health officials feared H1N1 could turn into a global epidemic.
Instead, about 12,000 deaths were attributed to H1N1, which reportedly is about one-third of the estimated annual deaths from seasonal flu.
Where Ideas That Grow Mean Policies That Glow Join a Glowing GrassRoots Issue Team When you join one of Illinois Farm Bureau s eight GRITs Teams (GrassRoots Issue Teams), you bring to the table big-picture ideas– thoughts you and your neighbors have about the future of agriculture. IFB s GRITs teams bring together ideas from across the state. Some ideas grow into other ideas. Some get energized and become action plans. Others light the way to new and improved policies.
Apply for One of These Teams • Conservation and Natural Resources • Crop Production and Trade • Equine • Livestock and Dairy • Renewable Resources and Energy • Risk Management and Farm Programs • Rural Life • Specialty Crops and Labor
Grassroots R g n es i ow
To Apply Call your county Farm Bureau or IFB at (309) 557-3984, or go to ilfb.org. Applications must be submitted by August 16.
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Economist: Atrazine ban would cost many ag jobs
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Quick Takes
FarmWeek Page 3 Monday, July 12, 2010
STATE
Federal broadband funds bringing opportunity, changes BY KAY SHIPMAN FarmWeek
High-speed Internet will bring opportunities to the five Southern Illinois counties served by Shawnee Telephone Co., but 100 new jobs may be one of the most welcome additions, according to Michael Guffy of Shawnee Telephone Co. Last week, Guffy continued to sort stacks of congratulatory phone messages that followed an announcement that his company will receive $7.4 million in grants and loans. “People are very excited and anxious
to hear about it,” Guffy said. Shawnee Telephone was the lone Illinois recipient selected in the latest round of federally funded broadband projects. Shawnee Telephone’s fiber-to-home network will improve Internet services in about nine communities in five counties. Officials estimate the project, which includes $1 million in local funding, will create 100 jobs initially. “We’re hoping for more (jobs) after that,” Guffy added. The area has the state’s lowest perhousehold income and high unemploy-
ment, a fact Guffy was surprised to learn when he moved there two years ago. “We’re really excited that this project will stimulate the economy,” he added. Guffy said he anticipates that highspeed Internet will boost tourism when local campgrounds offer visitors broadband connections. Shawnee Telephone hopes to partner with the U.S. Forestry Service to offer broadband access in the area’s national forest, he added. In addition to economic benefits, high-speed Internet services will
expand information available to local school districts, libraries, and medical facilities. Shawnee Telephone also wants to work with Southeastern Illinois College, Guffy added. Since the announcement, Guffy said he’s been surprised by the support his company has received from many economic sectors, including agriculture. IFB supports expansion of broadband services in rural Illinois, and upgrading broadband services is part of the Illinois Smart Agenda developed by the Vision for Illinois Agriculture.
Efforts to improve water quality launching in Illinois Champaign County farmers in a subwatershed of the Upper Salt Fork watershed will learn Tuesday about new efforts to improve water quality by reducing nutrient runoff. The American Farmland Trust (AFT) is working with the Champaign County Soil and Water Conservation Dis-
‘This is a voluntary approach to address an issue that others want to regulate.’ — Bruce Stikkers Champaign County Soil and Water Conservation District
trict (SWCD) on a three-year project that received a $750,000 grant from USDA. Through a competitive
process, USDA awarded $11 million for 75 projects in the Mississippi River Basin. The Champaign County watershed is part of the larger Vermilion River watershed selected by USDA in January for a special Mississippi River Basin initiative. Meanwhile, the Livingston County SWCD is finalizing details on its water quality project in the Indian Creek watershed, according to Debbie Ruff, SWCD executive and education director. More information will be released soon about the $1.01 million Illinois Cooperative Conservation Partnership Initiative project, Ruff said. In the Champaign County 27,000-acre watershed, the focus will be on helping farmers better manage applied nutrients through a range of conservation practices, according to Bruce Stikkers, SWCD resource conservationist, and
Kevin Donoho, Natural Resources Conservation Service (NRCS) district conservationist. For example, farmers may develop a row-crop nutrient management plan that meets NRCS standards. The plan may include switching nitrogen applications from fall to spring. “Our longterm goal is by trying nutrient (management) plans to improve water quality and save farmers money, too,”
Stikkers said. “This is a voluntary approach to address an issue that others want to regulate.” Participating farmers would sign approved contracts for a minimum of one year up to a maximum of three years. They would receive up to three annual payments for implementing such conservation practices as strip till, no till, cover crops, drainage management, and filter strips. With assistance from AFT,
a retired soil fertility expert will be hired to work with participating farmers and answer any questions. Stikkers and Donoho welcomed the additional help because their staffs wouldn’t have been able to devote that much time to a single watershed, they noted. “USDA is trying to take programs and partner with others. This is trying to make people work together and make it better,” Donoho said. — Kay Shipman
SUMMER LAWMAKER VISITS
U of I’s MarketMaker aiding Gulf fishermen To help Gulf Coast fishermen and shrimpers whose markets are devastated by the oil spill, the Louisiana State University (LSU) Agricultural Center is turning to an online marketing program developed by the University of Illinois Extension. Known as MarketMaker, the program is an online database that will connect Gulf Coast seafood producers with commercial buyers and consumers across the U.S. MarketMaker is one of the most extensive collections of searchable food industry data in the nation. Since the oil spill crisis, areas of the Gulf have been closed to fishing, and many wholesale seafood buyers located at the ports are not getting the sufficient volume they need to stay open. Fishermen are bringing in their seafood catches with no place to sell them. In other cases, boats are not coming to port so they don’t disrupt clean up of oil in or near the ports. During July, U of I Extension specialists will hold training workshops in Louisiana to help implement MarketMaker. “We have asked U of I Extension specialists to pull up their boots with us, and they have said, ‘We want to help.’ We are still in a crisis disaster response mode, and MarketMaker has come to the top as being one of the life rings that we can implement immediately,“ said Paul Coreil, director of the Louisiana Cooperative Extension Service. National MarketMaker currently includes 14 states with three more developing sites. For information, go online to {http://national.marketmaker.uiuc.edu}.
County Farm Bureau leaders and their adopted state legislators are taking advantage of summer to connect with each other. Top photo: Wayne County Farm Bureau President Fred Blessing, left, and county Farm Bureau board member David White, right, chat with state Rep. Andre Thapedi (D-Chicago) during a recent tour of his Chicago district. Bottom photo: Winnebago County Farm Bureau leader Bob Phelps, right, discusses modern beef production with state Rep. Elaine Nekritz (D-Northbrook) who toured his farm and several others during her recent visit. Winnebago County Farm Bureau manager Roger Christin looks on. Cook County Farm Bureau leaders joined both lawmaker visits. (Photos by Christina Nourie, Illinois Farm Bureau northeast legislative coordinator)
FarmWeek Page 4 Monday, July 12, 2010
THE ESTATE TAX
Grower urges Congress to put anxiety ‘to rest’ BY MARTIN ROSS FarmWeek
The cliche “death and taxes” has become a sort of macabre “joking point” for Madison County producer Larry Martin and his family, given an anticipated shift from no federal estate tax this year to a potentially alarming tax liability scenario. But to Martin and his parents, uncertainty surrounding the “death tax” and how it might impact their nearly 46year-old farm legacy is anything but humorous. Because of a nearly 10-yearold congressional loophole, the estate tax could be reinstated in 2011 with a $1 million individual exemption, barring congressional action. That’s vs. the $3.5 million exemption in effect when the tax temporarily “expired” Dec. 31. Farm Bureau is pushing for approval of a $5 million perperson/$10 million per couple exemption as part of its “Put Death Taxes to Rest” campaign. Martin said he and his brother, Steve, and their parents, Bernard and Donna, continue to work together, but “we know the inevitable transfer of the farm is nearing.” In his area, where recent farmland sales have netted $6,500-$10,000 per acre, a 1,000-acre estate and accompanying structures and equipment could “pretty easily” top $10 million in value, Martin warned. Martin and his brother farm “essentially separately together,” but family members individually and a group have consulted experts in multigenerational farm planning “and have come up with a plan
Under the anticipated return of the estate tax in 2011, Madison County’s Larry Martin fears “my generation and those that follow will be punished for having parents who worked hard, made smart decisions, and progressed their farming operation.” Without “death tax” reform or repeal, he feels his own two sons and niece likely will be unable to continue in the family business. (Photo by Ken Kashian)
that works well for us.” But, he stressed, “The decisions and actions taken have not been easy, due to the status of the estate tax exemption.” “Your action will have a lasting effect on many hardworking, multi-generational American families,” Martin advised lawmakers considering estate tax reforms. The elder Martins began farming in 1964 after buying 150 acres at an area auction. They managed to make ends meet through “years of high interest rates, drought, excess rain, disease, and low grain prices” by borrowing equipment from neighbors and working for other area producers, their son noted.
Estate tax Continued from page 1 number of qualifications and conditions. For example, eligible land (land used in active farming for five of the previous eight years) must remain within the family and in farm use for 10 years. If within that period, heirs dispose of that property to anyone other than a family member or take it out of qualified use from the decedent, they are subject to additional estate taxes. Even cutting timber or selling a conservation easement on inherited land risks added tax liability, Wolff said. “The race is on to see who can get 60 votes,” she stressed. “Our efforts are to work for 60 votes to get the best deal. “Isn’t a $5 million exemption, with no strings attached, better? For farms that are bigger than $5 million, if we would get more 2032A, we would say, ‘Go for it.’ But it’s not a tradeoff.”
The parents gradually accumulated enough land to partially support three families, and their adult sons eventually “chipped in” with added land and equipment. The brothers aren’t formal partners, but they share equipment: Steve supplies planters, drills, and trucks; Larry provides trac-
tors, combines, and grain carts. Martin’s parents never cared to incorporate, and he and his brothers maintain separate business and financial dealings. That keeps the operation “slightly more interesting,” as well as potentially more complex from an estate
planning standpoint, he admits. Uncertainty over long-term estate tax policy has contributed to the Martins’ planning concerns. Noting his father once paid $700-$1,000 per acre for land now worth more than $5,000, Martin stressed the need for both a higher exemption and stepped-up basis. Stepped-up basis enables heirs to take the fair market value of an estate for capital gains purposes and pay capital gains taxes on the difference between the net sales price and that stepped-up basis if and when the assets are sold. “My dad was very shy about going for estate planning, trying to figure out what was going to happen with the whole estate tax,” Martin related. “They (his parents) didn’t want to spend a lot of money to plan something out and then essentially not have it recognized after whatever (legislative) plans were laid. “Next year, things (potentially) revert back, and we don’t know exactly what’s going to be recognized. The kind of estate planning we do today might not be correct next year.” Thus the dilemma facing many Illinois farm families.
Planning the imponderables: Estate review recommended Gone today, potentially back tomorrow under ing from how the formula clause was drafted currently unspecified terms — estate tax uncertain- that separates the marital and family, or credit ty is a head-scratcher for farm financial planners. shelter, shares,” Zenge said Country Financial senior advanced planner Producers also may consider gifting to Lorraine Zenge is concerned Congress may reduce potential estate tax exposure. The annual delay action on the “death tax” until after fall $13,000 federal gift exclusion remains in place elections, complicating an already uncomfortfor 2010, and producers can make a gift of cash able situation for producers and their heirs. or assets to each offspring up to that level “with“This has left clients, planners, and attorneys in a quandary as far as what to do going forward,” ‘There are ways in which some of those Zenge told FarmWeek. previously written plans could have unThe best strategy appears to intended results.’ be to plan for the imponderables, she said. Zenge urges farm families to consult an attorney even if — Lorraine Zenge an estate plan is in place, “particCountry Financial ularly if illness or advanced age is bringing those issues to the forefront” and their estate exceeds $1 million — out an issue,” Zenge said. the default 2011 estate tax exemption if ConGifting appreciating farm assets or other gress takes no action. assets expected to appreciate in value (such as “There are ways in which some of those pre- stock), rather than cash, is “always a good strateviously written plans could have unintended gy,” removing “growth” and thus taxable value results if there were a death in 2010,” the advis- from the eventual estate, she said. er warned. “One likely would never have Gifts can be made throughout the year, and thought we would have no estate tax in 2010.” Zenge sees no pressing need to wait for resoluFor example, “formula clause” provisions for tion of the estate tax issue before making annual separating estates into marital and family trusts exclusion gifts. could leave spouses effectively “disinherited” in “If individuals intend to make a gift that the event of a 2010 death. exceeds that exclusion amount, they should def“Most family trusts are written to ensure initely see their tax adviser,” she said. — Marspousal income, but problems could arise result- tin Ross
FarmWeek Page 5 Monday, July 12, 2010
GOVERNMENT Partial E15 approvals this fall?
Senators, Colts player join ethanol game plan BY MARTIN ROSS FarmWeek
Senate Democrats have joined in the call to accelerate test data needed to break the 10 percent ethanol blend wall, “so that both consumers and our biofuels industry are not further harmed” by federal delays. But even expedited approval for “E15” (a 15 percent blend) may be highly conditional, the administration warns. In a letter to the president, Midwestern senators including Springfield’s Dick Durbin stressed a “great sense of urgency to utilize more homegrown fuels” in the wake of the Gulf oil spill. The lawmakers voiced “serious concerns” about delays in U.S. Department of Energy (DOE) test results crucial to U.S. Environmental
Protection Agency (EPA) approval of a fuel waiver for blends between E10 and E15. In December, EPA Sen. Dick Durbin extended its review of “intermediate” blends, indicating a decision would be forthcoming by summer. However, the agency still requires further DOE data. Given long-term federal biofuels mandates, the senators said “it is vitally important that our domestic biofuel production continues to grow — unhindered by the 10 percent by volume limit for ethanol in gasoline blends.” “It has become very clear that a higher blend is feasible,
and any delay in implementing it is now at the doors of the DOE,” they maintained. The White House last week argued DOE’s testing program was “consistent with national protocols and in conformance with engineering best practices,” encompassing hundreds of vehicles including 82 undergoing full “useful life” testing to gauge long-term emissions and performance. Useful life testing is being conducted 24 hours a day, the White House reported, but even under this “accelerated protocol,” each vehicle requires 6 to 9 months of testing. By the end of September, DOE testing on 2007 and newer models will be complete and EPA will act on the E15 request for those vehicles, the administration stated. In November, testing of 2001-
2006 vehicles should be complete and EPA can make a “further determination” for those cars. At the same time, “it has become clear that insufficient data have been submitted on the use of E15 in older vehicles and non-road engines to enable EPA to make a decision on a waiver that would allow the use of E15 for these engines,” the White House asserted. Tom Buis, CEO with the ethanol industry coalition Growth Energy, reiterated his group’s stance that “E15 could go into all cars — that there is no difference between E10 and E15 for the performance and durability of engines and emissions system.” “We believe we submitted sufficient data for the EPA to make a decision on all vehicle
types, and while they may disagree, our waiver (request) stands as is,” Buis told FarmWeek. Growth Energy helped kick off a campaign last week to spur biofuels action when lawmakers return from their July 4 break this week. Ohio Gov. Ted Strickland and Indianapolis Colts tight end Dallas Clark joined in a Midwest tour seeking mandated “flex-fuel” capabilities in U.S.-sold automobiles and federal support for installation of “blender pumps” that allow motorists to dial up various ethanol blends. U.S. Reps. Stephanie Herseth Sandlin (D-S.D.) and Adrian Smith (R-Neb.) are sponsoring a measure that would fund half the cost of installing blender pumps and storage tanks.
Climate specialist: Renewable energy incentives are crucial
Regulatory costs a concern for small meat processors
Sound, incentive-driven U.S. energy policy is a crucial piece in a global approach to controlling climate change, according to Michael MacCracken, chief scientist for climate change programs with the Washington-based Climate Institute. MacCracken sees varying approaches to greenhouse gas (GHG) reduction across the planet. Solar energy appears an ideal technology for desert regions. Biofuels and hydropower can meet needs in wet tropical regions. The realities of modern China suggest to MacCracken a mixed approach, blending renewable and nuclear power with “efficient coal” and restoration of carbon-trapping vegetative land cover. The U.S. needs “all the approaches we can take,” from diversified electrical generation and “fossil fuel-neutral” building design to wind energy and biofuels, MacCracken told FarmWeek. And that sets up opportunities as well as challenges. For example, many Native Americans originally were forced to relocate on marginal lands buffeted by high winds and now are attempting to capitalize on that former liability. However, MacCracken warned that potential cannot be fully realized until wind energy suppliers nationwide can connect to the electrical transmission grid. While electricity “can do a lot for us,” he argued liquid biofuels will be crucial to reducing GHGs in a mobile society. The U.S. Department of Defense is proving bio-based aviation fuels are possible, MacCracken related. However, ethanol, biodiesel, and wind energy producers are continuing to fight for extension of and/or consistency in federal tax credits and programs designed to encourage alternative energy development. “What’s needed right now are some incentives,” MacCracken said. “What we’re hearing too much of in Congress is, ‘This is going to be expensive; it’s going to be difficult.’ But once you can get some incentives in place, there are so many approaches that can come about.” Just as global approaches vary, MacCracken insists U.S. energy-climate legislation must be “systematic,” considering diverse regional resources and needs. At the same time, he acknowledged continued debate not only between various regions but also among diverse energy interests. “Everybody’s sort of circling the wagons and shooting inward,” MacCracken said. “That’s why it’s difficult in Congress — there are different situations. It’s not going to be a simple thing; it’s going to be a complex bill.” — Martin Ross
The livelihood of many small and independent meat processors could be at risk due to increased regulatory costs. The Food Safety and Inspection Service (FSIS) recently proposed implementing new and costly requirements for local meat processors under the Hazard Analysis and Critical Control Point (HACCP) Systems Validation proposal. “It’s a definite concern,” said Terry Jones of Jones Meat and Locker — a third-generation, 67-year-old business in Jacksonville. “If the original proposal had been implemented, it would be very hard to stay in business for any small (meat) processor.” FSIS originally proposed microbial testing for all inspected processing plants. But possible new rules could be redefined — FSIS by last week had held one of three public hearings on the issue and plans to issue a second draft of proposed regulatory changes. Microbial testing “is a big cost factor” that could put some small processors out of business, said Dianne Handsaker, executive secretary for the Illinois Association of Meat Processors (IAMP). “Most live off very small margins” and have no means to pass along costs.
BY DANIEL GRANT FarmWeek
The American Farm Bureau Federation wrote a letter to FSIS that noted many AFBF members who raise livestock rely on small and independent meat processors to process meat for their own consump-
“More and more people are trying to market their own animals as a way to supplement income,” Jones said. “We’re finding an increase in that (private labeling) business.”
‘More and more people are tr ying to market their own animals as a way to supplement income.’ — Terry Jones Jones Meat and Locker
tion and to satisfy niche markets. Deer hunters also have voiced concern over finding processors for deer harvested every year. “(Local meat processing) facilities are most at risk from increased costs due to (new validation costs for) multiple species and multiple products, with a relatively low volume to spread those costs,” the AFBF letter stated. Handsaker, for example, believes a small processor who slaughters 100 goats per year simply would drop that service if new validation costs are put in place. Jones, a member of IAMP, told FarmWeek about 40 percent of his business is slaughtering livestock for local farmers. And it’s one of the few growth areas for many small processors, he said.
Illinois has lost a number of small meat processors in the past but still has 229 inspected plants that would be affected by new regulations along with about 20 custom plants that would not be affected by a change in FSIS rules. The number of processing plants in recent years has remained stable, according to Handsaker. “This (process for FSIS to establish new regulations) could take up to a year or longer,” said Handsaker, who noted the Food Safety Working Group implemented by the Obama administration is pushing the stricter food processing regulations. “There still are a lot of unanswered questions.” Information about the situation is available on the web at{www.illinoismeatprocessors. com}.
FarmWeek Page 6 Monday, July 12, 2010
CROPWATCHERS Bernie Walsh, Durand, Winnebago County: No rain to report this week and now it has been three weeks since our last rain, except for the one tenth we got Wednesday night. The corn and beans still look good; they are not showing any signs of stress, probably because we had such good soil moisture. Some wheat fields have been combined, but very few. Ours was almost 20 percent moisture on Thursday, so that will take awhile to dry down. Early reports are of just average yields and pretty good test weight. Some of the yellow beans are turning green with the drier weather. Leroy Getz, Savanna, Carroll County: There was a threat of heavy rain nearly every day this past week, but we received only 0.65 of an inch for the week. Crops continue to look good. Some sprayers have been working. Green beans are being harvested and trucked to the processors. I’ve seen one wheat field combined — others are ready. Producers are reminded to certify their planted crop acres at the Farm Service Agency office before the Thursday deadline. Ron Frieders, Waterman, DeKalb County: Once in awhile I like to look at my notes and compare today with past years. In 2006, crop conditions were very similar. Corn was tasseling, beans were more than knee high and blooming, and wheat was being harvested. Another similarity is that people were urged to contact their legislators and push for the passage of the Permanent Estate Tax Release Act of 2006. On Jan. 1, the “death tax” returns with a 55 percent rate. Let’s not let the oil spill, recession, or the war distract us or our elected officials. This is the most unfair, double taxation, small-businessdestroying tax on the property people work so hard all their lives for. Let our elected officials know you are aware and November elections will soon be here. Joe Zumwalt, Warsaw, Hancock County: There is little farm activity to report in Western Illinois. On and off showers and thunderstorms left from 1 to 4 inches of rainfall across Hancock County. While the crops have taken on a little better color, the yield potential is still drastically down for the year. There is a lot of corn tasseling and the soybeans have really taken off, ranging from emerging to four and five trifoliate. Crop dusters have been busy spraying insects and fungicide on corn. Let’s hope it never gets too wet for them to fly. It’s too bad that my yard isn’t a cash crop this year. Ken Reinhardt, Seaton, Mercer County: It looked like we were getting shorted on rain but we finally got 2 to 3 inches Wednesday night. It’s still plenty soft, as I found out when I turned too short down at the elevator. While I was waiting for the police to close the highway, the tow driver told me he had been out until 3 a.m. July 4 pulling out a row-crop sprayer down to the frame. Most of the April-planted corn has tasseled. There is good potential on what is there, but there are way too many bare and stunted areas within most fields. It is fair week already, July 13-17. It is important to attend and support your local fair. Ron Moore, Roseville, Warren County: The dry weather has come to an end. We received 2.3 inches of rain last week. Areas to the south got up to 4 inches. The bean field in which I had planted the wet spots for the third time now is under water again. Since April 1, I think it has had water on it more often than it has not. Those will be some of the unharvested acres for this fall. The corn that has not been damaged is starting to pollinate. The shorter and yellow corn will not pollinate for awhile yet. It is going to be very difficult to time any fungicide spraying this year. The early-planted beans have nearly closed in 30-inch rows. They should start flowering soon. Weed control has been good so far. I expect to start hearing about diseases with the wet conditions. Pasture conditions are still very good with all the rain we have had.
Jacob Streitmatter, Princeville, Peoria County: After an unusual nice, dry week here, I received some rain on Tuesday — anywhere from 0.6 to 1.5 inches. Wednesday brought another half-inch of rain, and on Thursday we received a couple tenths more. Hard to believe, but the first rain did help. The grass was starting to get dry and the crops were starting to show signs of stress. Hopefully, we can receive nice showers from here on out. A lot of corn is tasseling and soybeans are blooming. Crop conditions look better from the seat of my car than from the truck, planter tractor, mower tractor, or roof of the grain bin. However, I did feel better as I flew out of the Peoria airport and realized I am not alone. Tim Green, Wyoming, Stark County: We have had two almost dry weeks, and we really needed that. Our corn crop is starting to look like it might make something. Our corn around here looks pretty tough. I would say our crop ratings are 6 percent good and probably 30 percent poor. Just too much water. People are starting to spray Headline, or they are trying to decide how or whether to spray because the cornfields are so uneven. Tassels are out on some corn and some is only a foot high. Mark Kerber, Chatsworth, Livingston County: Last week was hot and dry with a few scattered showers toward the end of the week. Corn was not looking good as the heat was beginning to cause stress on these shallow-rooted plants. Fungicide spraying is starting as I see planes buzzing around. Gray leaf diseases could be worse this year with all of the wet weather we have had. Most of the corn is now pollinating. Soybeans are looking better with the drier weather, although we will need timely rains to keep them growing and flowering. Wheat harvest is over — there wasn’t much planted due to the wet fall. Haven’t heard any yields. Livingston County Fair-goers will be working on their projects as our county fair is July 19-22. Producers are hoping we can sustain a rally this summer going into harvest. Last year our highest prices were in the fall. Ron Haase, Gilman, Iroquois County: We received anywhere from a few drops of rain up to 0.15 of an inch of rain. We need much more with all the heat and shallow-rooted crops. Corn is anywhere from the V11 to up to a few fields about to enter the R2 or blister stage. Many fields have been pollinating over the last week. A few fields have had a fungicide applied over the last couple days. Some soybean fields were planted for the first time this past week. Other fields were replanted in spots. Area soybean fields are anywhere from emergence up to the R2 growth stage. Herbicides also were being applied in soybean fields. Area soybean farmers are wondering how much below trend the yields will be vs. whether we will make trend line yields. The local closing prices for July 8 were $3.57 for nearby corn, $3.58 for new-crop corn, $9.84 for nearby soybeans, and $9.07 for new-crop soybeans. Wilfred Dittmer, Quincy, Adams County: Hello from a rain-drenched Adams County where we might as well measure rainfall in buckets instead of inches after receiving 4 inches in the first three days of last week. That brings our total since March to at least 17 inches. We are more than wet. A little spraying did get done last week, but some fields still need attention. Corn for the most part has improved some, but is still a long way from the bin. Some is tasseling awfully short, so it may be interesting when the combines start up. Soybeans are growing and most stands are good with little insect activity. I have seen a few Japanese beetles. Some hay did get put away last week.
Brian Schaumburg, Chenoa, McLean County: Crops continue to develop nicely with 1,490 growing degree units to date, plenty of subsoil moisture, and sunshine. Scouting for foliar disease reveals common rust being most prevalent. Spray planes are making steady progress. Soybeans are returning to a deep green color. What a rally! Corn, $3.59 and $3.54, fall; soybeans, $9.91 and $9.01, fall; wheat, $4.78. Steve Ayers, Champaign, Champaign County: A quiet week with ideal pollination conditions after our record June rainfall. Corn is nearly all tasseled with an average height about six feet. Beans are about one third blooming. Showers moved through Thursday but rains were spotty. Our area is 15 percent surplus moisture, 68 percent adequate, 15 percent short, and 2 percent very short. Extended forecast looks like temperatures from 70 to 90 with chances of pop up storms. A few planters are dubbing in ponds as most of the water has disappeared. Sprayers, mowers, and balers are rolling, and a few farmers are emptying bins. Some fields were treated with fungicide. Let’s be careful out there. Carrie Winkelmann, Menard County: Rain was scattered throughout the area last week. We received only 0.25 of an inch, but there were places in the county that received much more. Pollination is ongoing. The yellow planes have been out spraying foliar fungicide. Wheat harvest is complete, and I have received reports of low test weights. Tom Ritter, Blue Mound, Macon County: A chance of rain on Thursday skirted just to the south in southern Macon County. Even though moisture at this point is not real critical, it would be nice to get the pump primed. Corn pollination has been wrapping up with adequate moisture. Soybeans, of course, need more rain as we go along here, especially during August. Overall, crop conditions look good. Spraying of fungicides is starting to slow a little. Herbicide application on soybeans also is pretty much caught up at this point. Very little field activity going on. Farmers are hoping for periodic rains along the way. The slightly cooler temperatures will help crop growing conditions considerably. Todd Easton, Charleston, Coles County: It was a good week for crops in the Coles County area. Fieldwork is almost wrapped up and crops have been developing at a steady pace. Most of the corn crop completed pollination with the help of near-perfect temperatures and is on a path to develop some pretty good ears. Soybeans are still in the blooming process and growing steadily. Fields all over are looking much better now that the sprayers have had their chance to take care of the weeds. Farming methods of yesteryear will be revisited next weekend as the local antique tractor club fills the fairgrounds with equipment and displays of years past. It is a great way to remember how things were and appreciate the advances modern farming has made. If you are in the area, we hope to see you there. Jimmy Ayers, Rochester, Sangamon County: We didn’t have any rain at our place last week. It actually is turning a little bit dry in the area. Not too far away from us 1.5 inches was measured in the gauge. There’s a lot of roadside mowing and guys finishing up hay. Several people are taking a little vacation. Many people enjoyed the fair at Christian County this past week. If you can cut down 30 stalks at your county corners and save a life, you might want to think about doing that. We trimmed down a little last week to make it safer for the community. Most of the corn has tasseled, and 15-inch beans have closed the rows. The drill beans closed a long time ago. You can still see dirt between the 30-inch rows. The markets are responding to the shortage of last year. You might want to reward the market for these big up moves — 5 or 10 percent, maybe.
Page 7 Monday, July 12, 2010 FarmWeek
CROPWATCHERS David Schaal, St. Peter, Fayette County: It was a hot, humid week here. Rains finally entered this part of the county about 5 p.m. Thursday. The northern part experienced rain Thursday morning with some it being heavy — 2 to 3 inches. We ended up with about 1.5 inches, some coming early Friday morning. This rain was really welcome. A lot of corn is pollinating unless it was late-planted corn or re-planted. That corn also looks very good. As far as the soybean crop, things are all over the board from plants almost kneehigh to beans just emerging. There was a lot of spraying of soybeans last week. In the Roundup soybeans, it seems to take old technology sprays to kill water hemp and marestail. Roundup alone is not killing our broadleaves anymore. Fungicide also is being applied on cornfields, some with highrise ground rigs but most with planes. Grain prices rallied some last week: corn, $3.67; new-crop corn, $3.64; soybeans, $10; newcrop soybeans, $9.20. Fayette County Fair starts this week, so more rain probably will occur — it usually does. We won’t turn it down. Get out and enjoy your county fair. Ted Kuebrich, Jerseyville, Jersey County: Jersey County was back in the oven last week with temperatures in the mid-90s and high humidity. We received about half an inch of rain last week with more on the way. The kernels on the early-planted corn are at blister stage. Most of the corn is in excellent condition, although you can find some fields of corn planted in the creek bottoms that have not yet tasseled. The early beans are putting on blooms and are in very good condition. There still is bean planting going on in some of the creek bottoms. The Illinois River at Hardin is at 430 feet, 5 feet above the flood stage of 425 feet. Prices at Jersey County Grain, Hardin: July 2010 corn, $3.77; fall 2010 corn, $3.66, January 2011 corn, $3.82; July 2010 soybeans $10.12; fall 2010 soybeans, $9.34, January 2011 soybeans, $9.55; July wheat, $5.15. Rick Corners, Centralia, Jefferson County: 1.2 inches of rain and still raining Friday morning. Yeah, that’s what I’m talking about. The corn was in dire need of this, and the beans really appreciate it, also. Not much else to say other than bring it on.
Dan Meinhart, Montrose, Jasper County: Thousands and thousands of acres of beans were planted in the last week to 10 days, especially in the I-70 corridor. Hay baling also was in full swing. Post chemicals were being ap plied. Farmers were busy doctoring up their stunted yellow corn by applying nitrogen. Some fungicides have also been applied to the early-planted corn. Showers were in the area Thursday and Thursday night leaving various amounts of rain. Our gauge showed 2.5 inches. Showers were still lingering in the area Friday morning. The heat index has been around 100 degrees. More showers are in the forecast for early this week. Bob Biehl, Belleville, St. Clair County: Corn was looking stressed around here all week, then on Thursday we received 1.2 inches of muchneeded rainfall. Some areas in the county received significantly more, maybe up to 5 inches. This rain should take our corn a good ways into the kernel development stage. Beans seemed to do a little better this past week than corn, not as many noticeable stress areas. This rain will help loosen the ground in the bean fields, as the ground is mostly shaded now. Beans are about to get the dark green color where they get the next growth spurt. Japanese beetles are the only pest problem. Populations are not significant enough to justify treatment, however. Grain markets were exciting last week with oldcrop corn hitting $3.93; cash beans, $10.31; and cash wheat, $5.50 at the river terminals.
Dean Shields, Murphysboro, Jackson County: Last week was hot and humid for us until Thursday night when showers came through and we got anywhere from 0.5 of an inch to probably 1 inch or so. Some places had a real downpour and others didn’t get very much at all. The corn crop is coming along and I’m seeing a lot of black silks now on the corn. Beans are continuing to grow. Like I keep reporting, we have all different sizes of beans. I planted some more beans Wednesday on some of the low ground I have. The river is still giving us a fit in that it is very high and the locks are closed. We will have to keep the pumps running to keep the seep water out. Most of the low land got planted. Wheat field beans are up and looking pretty decent. This shower should help them quite a bit. Most of the time is being spent spraying beans and doing right-of-way mowing. Everybody is hunting for that job in a cool cab. Everybody stay cool, and hopefully it is going to rain. Ken Taake, Ullin, Pulaski County: It’s been another hot, dry week here in deep Southern Illinois. Crops were really starting to show the stress from all the dry weather. Both corn and beans are looking like they need a big rain. We did have a real light shower Thursday evening. I would estimate it as 0.10 of an inch or less. Every little bit helps, but we sure need a nice soaking rain. Otherwise, we are down to the usual summertime activities, mowing, working on equipment, and trying to stay cool. Again, please remember to be careful in your activities this summer.
Kevin Raber, Browns, Wabash County: It was raining as I wrote this report Friday morning. I had 0.3 of an inch of rain in my gauge so far. We really needed a rain. The lighter soils are really showing stress. The Wabash River went below flood, but I don’t know how long it will take to dry out the replanted acres. That’s the way it goes. Your light soils are burning up, and it’s too wet to replant your bottom ground. Reports received Friday morning. Expanded crop information available at FarmWeekNow.com
Considerations for late-season herbicide applications BY BARRY NASH
Although most postemerg ence herbicide applications have been completed within the last few weeks in both cor n and soybeans, several weeds continue to make their presence known — waterhemp, giant ragweed, l a m b s q u a r t e r s, a n d m o r n i n g g l o r y, i n particular. In some instances, Barry Nash complete control was not achieved due to inadequate herbicide rates, larger-than-expected weeds, or a brief shower shortly after application. In other cases, additional weed f lushes already have begun (waterhemp, in particular). Although several postemergence herbicide options are available for
“late-season” weed control, it is critical to understand the precautions and restrictions of each herbicide prior to application. Consider the following prior to making that late-season application: Crop growth stage: Most herbicides have a crop growth stage or height limitation that restricts applications during the reproductive developmental stag es of the crop. For example, most soybean herbicides restrict applications once t h e p l a n t b e g i n s f l owe r i n g ( R 1 ) . However, the glyphosate label a l l o w s a p p l i c a t i o n s t o Ro u n d u p Ready Soybeans through the flowering stages (R1-R2). Similarly, some corn herbicides restrict applications beyond V6 while others allow applications up to tassel (VT). Additionally, a few herbicides are labeled for applica-
tions after the hard dough stage. Preharvest interval: Preharvest inter vals are established by the Environmental Protection Agency to allow sufficient time for a herbicide to be metabolized within the plant to non-toxic forms. If a herbicide application is made within that prehar vest inter val, herbicide residues may be in excess of established limits, thereby making the grain unacceptable for human consumption. Crop Rotation Inter val: Many herbicides labeled for late-season applications have slight to moderate residual activity and require crop rotation restrictions for the following year. These herbicides will have a comment in the “Precautions or Restrictions” section of the label that recommend a time period for safe planting of a different crop the
following growing season. These recommendations take into account the physical and biological factors required for successful degradation of the herbicide — the amount of time required for microbial deg radation, amount of rainfall required, and soil pH. Re c o g n i z i n g t h e c r o p r o t a t i o n intervals of a herbicide can become critical when applications are made after the middle of July — especially if winter wheat is the intended crop for the next year. For more infor mation on lateseason herbicide applications, contact your local FS crop specialist, who will have the most up-to-date infor mation available on herbicide label requirements. Barr y Nash is GROWMARK’s weed science technical manager. His e-mail address is bnash@growmark.com.
FarmWeek Page 8 Monday, July 12, 2010
PRODUCTION
USDA raises crop price projections, wheat production for corn, and 20 cents for wheat. The projected price ranges currently are $8.10 to Price prospects for Illinois’ $9.60 per bushel for beans, top three crops improved Fri$3.45 to $4.05 per bushel for day as USDA increased its corn, and $4.20 to $5 per feed demand estimate and bushel for wheat. lowered its ending stocks estiHowever, the near-term mate for corn next year by 200 price trend could be less million bushels. friendly. USDA reduced its corn USDA on Friday estimated ending stocks estimates to U.S. farmers this year will har1.478 billion bushels this year vest a record 78 and 1.373 billion million acres bushels for FarmWeekNow.com of soybeans. 2010/11. The Listen to commentary from Al Crop yields projected ending Kluis on Friday’s USDA realso were stocks for soyports by going to FarmWeekprojected to beans, 175 milNow.com. average a lion bushels this bountiful year and 360 million 163.5 bushels per acre for bushels next year, were in line corn and 42.9 bushels per acre with trade expectations. for beans. Corn use was raised 125 “We had a substantial move million bushels due to increased feed and residual use. up (recently in the crop markets),� said Al Kluis, market Meanwhile, winter wheat proanalyst with Kluis Commodiduction was estimated at 1.51 ties, during a teleconference billion bushels, which is up 2 hosted by the Minneapolis percent from last month but still is 1 percent below last year. Grain Exchange. “But the old saying is ‘You USDA subsequently have to feed a bull every day.’ increased its season-average We could be susceptible to a price estimates by a dime per sell-off and give back some of bushel for soybeans, 15 cents
BY DANIEL GRANT FarmWeek
(last) week’s gain.� Kluis believes yield and acreage estimates could be lowered in future reports as heavy rain cut planting short and drowned out a large portion of crops in the Midwest while parts of the Southeast experienced the opposite problem with extreme dryness. The analyst projected acreage could be lowered by 500,000 to 1 million acres for corn and beans. He believes national yield averages could be closer to 161 to 162 bushels per acre for corn and 41 to 42 bushels per acre for beans, which would support prices. “We have good yield potential in the northern and western Corn Belt,� he said. “But in the central and eastern Corn Belt, we’re seeing crop deterioration and there’s dryness in the Delta and Southeast.� Elsewhere, crop production problems in Europe, Russia, and Canada could support U.S. wheat prices. Wheat production in Canada last week was estimated at 20.5 million metric tons (752 million bushels), but Kluis believes it could be
closer to 18 million metric tons (660 million bushels) due to weather-related issues. In Illinois, USDA lowered the average wheat yield from
59 bushels per acre on June 1 to 54 bushels per acres as of July 1. The current wheat yield estimate for the state is 2 bushels below last year’s aver-
Crop conditions quite variable around Illinois Illinois every year has its share of “garden spots� and “crop disasters� due mostly to weather variability. But the difference between the good and bad spots this season seems to be as extreme as many farmers have seen in recent years. “There is a lot of yellow, stunted corn and a lot of uneven fields,� said Phil Fuhr, president of the Rock Island County Farm Bureau, who farms near Taylor Ridge. “But on some of the better-drained farms, there will be some good yields. “There is just a lot of variability,� said Fuhr, whose farm is in the western portion of the state that last month received anywhere from 10 to 13-plus inches of rain. Overall, the average height of the corn crop (67 inches) in the state as of the first of last week was well above the fiveyear average (54 inches). However, the height of the crop ranged from 58 inches in Southwestern Illinois to 73 inches in Northeastern Illinois. “Corn is anywhere from setting ears to three inches tall in my area,� said Ray Krausz, president of the Clinton County Farm Bureau and a farmer from Mascoutah. Krausz was unable to start planting soybeans until June 10 and didn’t finish custom-planting beans until July 1. In fact, many farmers opted not to plant soybeans in low, saturated areas and instead filed prevented planting claims. “There were a lot of late-planted beans,� Fuhr said. “We’re going to give up a lot of yield potential.� Many stunted cornfields also surrendered yield potential as wet conditions didn’t allow many farmers to make follow-up nitrogen applications. Fuhr said he is aware of a handful of farmers who had urea dropped on fields via airplanes. “It was so wet in June, nothing could be done,� he said. Now, farmers can only hope for consistent doses of rain to keep many shallow-rooted crop fields going without giving up yield potential, Krausz said. “Rainfall is going to be the main issue (the rest of the season),� he said. Overall, the conditions of the corn crop in Illinois last week were rated 68 percent good to excellent, 20 percent fair, and 12 percent poor to very poor. Soybeans were rated 59 percent good to excellent, 28 percent fair, and 13 percent poor or very poor. — Daniel Grant
WIU bull test entries due Aug. 31
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Western Illinois University’s (WIU) School of Agriculture is now accepting entries for its annual bull test program. Entries for the 112-day test are open to any breed and are due by Aug. 31, according to Ken Nimrick and Bruce Engnell, program co-directors. Nimrick, who is also an associate ag professor, noted the bulls must be weaned and started on a preconditioning program no later than Aug. 20. “The WIU bull test offers breeders the opportunity to compare their bulls against bulls from other breeders when the animals are fed and managed in the same environment,� said Engnell. “It also provides the individual bull owners the opportunity to get data on the bull’s feed efficiency,� Engnell said. “Feed efficiency has always been important and is even more so with the prospect of ongoing high feed prices.� Nimrick noted few on-farm testing situations can gather this type of data, and it is extremely important for the breeders’ economics. In addition to average daily gain and feed efficiency, the WIU Bull Test Program provides information on scrotal circumference, pelvic area, ribeye area, fat depth and marbling. In addition to the test program, bulls will have ultrasonic data gathered. A sale of the top bulls will be held March 18. For more information, contact Nimrick at 309-298-1288 or Engnell daytime at 309-298-2613 or evenings at 309-298-1276, or the ag school at 309-298-1080. Interested individuals also may write: Ken Nimrick, WIU School of Agriculture, 1 University Circle, Macomb, Ill., 614551390. Entry forms for this year’s test, along with information on last year’s program, are available online at {www.wiu.edu/bulltest}.
FarmWeek Page 9 Monday, July 12, 2010
BIOTECHNOLOGY
Refuge concerns seen as frustrating, unscientific BY MARTIN ROSS FarmWeek
Proposals to prohibit biotech crops within Midwest wildlife refuges is frustrating to producers deprived of other key agronomic tools and confounding to one of the nation’s foremost experts on crop genetics. Lewis Hollis farms 875 acres within the Crab Orchard National Wildlife Refuge, which covers 43,890 acres in Williamson, Jackson, and Union counties. Hollis has farmed there since 1971, but years ago, the U.S. Fish and Wildlife Service (USFWS) banned atrazine and metolachlor (Dual) herbicide use, leaving him few options other than planting glyphosateresistant GMO corn and beans. He has used biotech crops on refuge land since the late 1990s. Now, USFWS is crafting an
environmental assessment (EA) of ag practices for 54 national refuges across eight states, focusing on continued GMO use. Lewis Hollis The agency reports “concerns have been expressed about the long-term effect of GM crops on the environment, wildlife habitat, and human health.� “Public scoping� of assessment issues ended Friday, and a draft EA is to be issued by Sept. 1 for public comment. A final assessment is expected by Dec. 1. In 2009, a federal court required USFWS to assess environmental risks of planting GMO crops in Delaware’s
Sustainability and yield: Devil in the definitions? A new National Academies’ National Research Council report argues ag research is focused too heavily on increased food production and too little on air and water quality. To farmers and scientists eyeing precision farming, biotechnology, and other reduced-input strategies for boosting peracre yields, those goals aren’t mutually exclusive, and much of the work already is being done. The study raises questions about “sustainability� — a concept that has spurred wide-ranging debate over organic vs. “conventional� farming, GMO vs. non-GMO crops, and “local� vs. larger-scale commercial production. To American Farm Bureau Federation biotech regulatory specialist Russell Williams, the devil lies in the definition. Williams sees two basic “camps� — “those who want to feed a growing population and those who don’t.� “In my mind, sustainability is a balance between social, economic, and environmental factors,� Williams told FarmWeek. “The ability to produce more food on an acre of land with a per-acre reduction in inputs is a good thing. You can feed more people; you have less of an impact on the environment. “Some people look at sustainability only in an environmental context: ‘How much can we produce given these environmental constraints?’ However many people an organic-only system can feed is how many it will feed. While biotechnology is seen as a key to reducing inputs while boosting per-acre yields, environmental and some organic groups have stepped up anti-GMO efforts. The U.S. Supreme Court recently ruled against a lower court injunction against Roundup Ready alfalfa plantings, but plaintiffs are gearing up for a second attack on Roundup Ready sugar beets. Sen. Patrick Leahy (D-Vt.) has asked USDA to maintain current restrictions on Roundup Ready alfalfa production. As of last week, nearly two dozen House members had signed onto a counter request asking the department to allow production pending the outcome of an ongoing environmental impact study. Williams is optimistic about the sugar beet case, given the Supreme Court’s decision: “I would think a very similar case would have a very similar outcome.� But Gregory Conko, senior fellow with the Competitive Enterprise Institute, is concerned about long-term biotech policies particularly at the Cabinet level. Conko notes Ag Secretary Tom Vilsack is a former Iowa governor with “a generally positive reputation among the supporters of agricultural biotechnology.� Conversely, he said, USDA Deputy Secretary Kathleen Merrigan is a supporter of organic production and “a big opponent of biotechnology.� “You’re seeing this sort of love-hate relationship within the USDA for new agricultural technologies, including biotechnology,� he said. “I, for one, don’t believe things like biotechnology are incompatible with sustainable agriculture.� — Martin Ross
Prime Hook National Wildlife Refuge, and USFWS noted several eastern refuges now are facing lawsuits. USFWS’ issues with GMOs are broadly stated: “Some people� fear insect-resistant traits could impact butterfly species, and “it has been suggested� GMO corn or soybeans could “hybridize� with and thus build herbicide resistance in related wild species. Agency-stated issues extend beyond refuge protection: USFWS cites concerns that “GM crops in the human food chain� may pose risks for allergies and other “unintended consequences,� despite federal findings to the contrary. American Farm Bureau Federation biotech specialist Russell Williams suggests a refuge ban is “probably against public policy.�
Hollis sees glyphosates and thus GMO crops as crucial to Southern Illinois growers, especially given concerns about johnsongrass. He argued Crab Orchard producers and officials have conducted ongoing environmental assessments for years. “We have been growing GMO crops on Crab Orchard Refuge since they were first patented and put on the market,� the Johnson County Farm Bureau president said. “If there’s been an adverse effect, it hasn’t shown up. “The eight farmers who farm on Crab Orchard Refuge have a good working relationship with (refuge personnel). We have a yearly meeting to discuss any positive or negative effects pertaining to agriculture in Crab Orchard.� Among other things, Crab Orchard farmers must report annual glyphosate use rates —
according to Williams, “fine anecdotal evidence� to confirm continued herbicide efficacy. The Delaware case was brought on behalf of groups including the Audubon Society and the activist Center for Food Safety. Tuskegee University Center for Plant Biotechnology Research Director C.S. Prakash sees advocates of new restrictions “trying to whip up sentiments against GM crops.� “With both corn and soybeans, there’s really no problem, because there are no wild species that are cross-compatible in the areas we’re talking about,� Prakash told FarmWeek. “The corn has no known (wild) relatives in the U.S. The same with soybeans — soybeans came to us from China, and there are no relatives that can (pose) a soy gene issue in the U.S. Both are really non-issues.� Most compatible corn relatives are found in Mexico, where GMO plantings to date have not proven “a problem at all� said Prakash, a recent USDA Ag Biotechnology Advisory Committee member who also advises the Indian government.
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FarmWeek Page 10 Monday, July 12, 2010
POLICY
WTO concerns likely to shape next farm bill BY MARTIN ROSS FarmWeek
Lawmakers likely will attempt to balance farm income with potential global outcomes as they formulate the next farm bill, according to Washington trade analyst Paul Drazek. Drazek told FarmWeek Congress will weigh trade issues in its ag policy debate, “if for no other reason than it has to take into account the cotton decision” — the World Trade Organization’s (WTO) ruling against U.S. cotton supports. Amid fears that Brazil could retaliate against U.S. goods, he expects lawmakers
to eye less “trade-distorting” supports. But cotton doesn’t stand alone. Drazek believes a successful WTO Doha Round agreement is still possible, and suggested the U.S. could agree to further changes in domestic supports “if it’s a good enough deal.” For example, the 2008 farm bill’s average crop revenue election (ACRE) program is part of the WTO’s “amber box” of purportedly price-distorting and thus annually capped subsidies. If Congress moved from state ACRE yield triggers to more precise county triggers
and total farm payments increased significantly as a result, spending could exceed annual WTO limits and trade disputes could ensue. One answer could be to move ACRE into the “green box” — the WTO’s repository for uncapped supports such as direct payments. Key to reclassifying supports as “green” is decoupling them from specific commodities: Drazek said a move to a “whole-farm” revenue program, an idea raised by House Ag Committee Chairman Collin Peterson (D-Minn.), might meet that goal. Peterson’s whole-farm con-
cept would cover the spectrum of current program crops, compared with adjusted gross revenue crop insurance, which provides coverage for a farm’s combined crops and activities. Under conventional revenue assurance (RA) policies, growers can buy protection fieldby-field, for “enterprise” units including all of an individual covered commodity within a county, or by whole-farm units combining revenue from all corn and soybeans within a county. Illinois Farm Bureau risk specialist Doug Yoder notes premiums drop dramatically as producers move from field-by-
field coverage to enterprise units or enterprise to wholefarm coverage. But so do potential claim payouts, Yoder said. Whole-farm unit coverage has been available to Illinois policyholders for several years, “but we don’t use it,” Yoder noted. He is uncertain whether that reflects past RA costs relative to other revenue policies that don’t offer a whole-farm option or general wariness toward a whole-farm concept. “Say wheat was going to get a huge ACRE payment this year, while beans weren’t going to get squat,” Yoder said. “The fact that beans had a good (production) year doesn’t reduce or eliminate wheat or corn payments. They’re separate. “Under Peterson’s concept, you’d combine all three, and who knows what we’d get. You’d have to look at your wheat loss times those acres, your corn loss times those acres, and your bean loss times those acres, and balance all that out.”
DATEBOOK July 15 Southern Illinois University-Carbondale field day, 8 a.m., Belleville Research Center, Belleville. For information, call 618-566-4761. Northern Illinois Agronomy Research Center field day, 4 p.m., Shabbona. For information, call Dale Baird at 815-978-2844. July 17 Pull for Agriculture Education sporting clays and trap shooting, World Shooting and Recreational Complex, Sparta.For information and registration details, go online to {www.rcfb.org} or call 618443-4511 or 618-357-9355. July 22 Prairie Rivers Resource Conservation and Development (RC&D) annual meeting dinner at Mona’s Restaurant, Toluca, and tour of Oak State Products, Wenona. Call RC&D at 309-3653979 for reservations. Aug. 13-22 Illinois State Fair, State Fairgrounds, Springfield. Aug. 17 Ag Day, Illinois State Fairgrounds, Springfield.
FarmWeek Page 11 Monday, July 12, 2010
EVENTS IFB Commodities Conference July 28
Export push will boost rural economy — speaker BY DANIEL GRANT FarmWeek
A farmer from Shelbyville or a tractor dealer from Fairfield, Iowa, probably doesn’t have much interest in consumer/population trends in places such as Hong Kong or Seoul. But what happens in Asia and other parts of the world actually could play a key role in the rebuilding of rural America, according to Christine Turner, senior adviser for the USDA Foreign Ag Service. “We have a very ambitious secretary (Tom Vilsack) who
is very focused on reinvigorating rural economies around the country,� Turner told FarmWeek. “A strong part of that (push) is to increase exports.� President Obama earlier this year unveiled the National Export Initiative with a goal to double U.S. exports, including agricultural goods, in the next five years. Turner this month (July 28) will discuss agriculture’s role in the plan and export market potential and trends at the Illinois Farm Bureau Commodities Conference at the Marriott
Ag 2010 Illinois State Fair focus
New interactive attraction to teach kids about ag The Illinois State Fair Aug. 13-22 will pay tribute to the state’s agricultural industry with a new interactive exhibit for families and the theme, Cream of the Crop. “This year’s fair will showcase Illinois’ agricultural roots while also recognizing Illinois farmers for being the cream of the crop, the best of the best,� said Illinois State Fair Manager Amy Bliefnick. The new attraction, named Farmer’s Little Helpers, will teach children about agriculture through hands-on activities related to the ag industry. A mock farm will include miniature
barns, a corn crib, seed gardens, a farmers’ market, and a grocery store. Young visitors will be offered activities at each station. “I’m very excited about Farmer’s Little Helpers and would like to thank all the sponsors for their support. Without them, none of this would be possible,� Bliefnick added. The Illinois Corn Marketing Board (ICMB), Illinois Soybean Association (ISA), County Market (Niemann Foods) and Grain Systems Inc. are major exhibit sponsors. “This exhibit allows a glimpse into the work of family farmers in Illinois,� said Donna Jeschke, a Mazon farmer and past-chairman of the ICMB. “More than that, we hope that by visiting this exhibit children and adults will feel a direct connection to the farm, the farmers and their families, and the food we grow here.� “The Illinois Soybean Association is proud to be involved with the new Farmer’s Little Helpers exhibit at the Illinois State Fair, said ISA Secretary Doug Winter, a farmer from Mill Shoals. “We feel this is a great opportunity to show visitors the connection between soybeans grown by Illinois farmers, livestock raised throughout our state, and the food people eat,� Other sponsors include Illinois Farm Bureau, the American Egg Board, Brandt Consolidated, Corn Products International, Illinois Beef Association, Illinois Pork Producers Association, Illinois Standardbred Owners and Breeders Association, Midwest Dairy Association, and USDA Farm Service Agency. The United Brotherhood of Carpenters Local 16 and Local 742 are donating expertise to help construct new buildings for the exhibit.
Hotel and Conference Center in Normal. Registration at the event will open at 7:30 a.m. and the program will begin at 8:30 a.m. “We’re lucky ag trade has provided a surplus for the last 50 years,� Turner said. “That’s a tribute to the efficiency and effectiveness of U.S. producers.� USDA last month projected U.S. agriculture in 2010 will generate a surplus of $28 billion compared to $23.2 billion in 2009. The speaking engagement also will be a homecoming for Turner, who grew up in
Bloomington-Normal and is a University of Illinois graduate. In fact, she has family members who still farm in McLean County and helped host the 1994 Farm Progress Show on the Pitts, Kinsella, Mecherle Farms east of Bloomington. “I remember my grandfather being involved in the Farm Progress Show,� Turner said. After college, Turner worked as an attorney in New York City and more recently served as counsel for the Obama presidential campaign before she was appointed to
her current position. “It’s incredibly gratifying to work on these (ag trade) issues,� Turner said. “It’s a nice combination of my personal and professional background.� Registration for the conference is available through county Farm Bureau offices or online at {www.ilfb.org}. The pre-registration deadline is Friday. Any cancellations received after July 19 will not be refunded. For hotel reservations, contact the Marriott Hotel and Conference Center in Normal at 888-236-2427.
USDA announces funds for rural microentrepreneurs USDA recently announced funding through Rural Development to support small start-up businesses in rural areas. July 16 is the application deadline for the current fiscal year. Funding is available through Rural Development’s new rural microentrepreneur assistance program (RMAP), which was authorized by the 2008 farm bill. Non-profit organizations, institutions of higher learning, and federally recognized Indian Tribes are eligible for loans and grants to support microentrepreneurs. “Support for small rural businesses is one of the most important investments Rural Development can make,� said Colleen Callahan, Rural Development state director. Eligible organizations may apply to Rural Development for loans between $50,000 and $500,000 at 2 percent interest for up to 20 years. Those organizations, in turn, will re-lend the money in rural areas to sole proprietors and small businesses with the equivalent of no
more than 10 full-time employees. The “micro-borrowers� may apply to the organizations for loans up to $50,000 at a fixed interest rate for up to 10 years. The loans may be used for working capital; purchases of furnishings, supplies, inventory, or equipment; debt refinancing; business acquisitions; and already improved real estate intended for locating a business. The organizations eligible for the RMAP funds also may apply for grants to provide technical help and training to microntrepreneurs and prospective micro-borrowers. Applications will be accepted throughout the year and awarded on a quarterly basis; however, for fiscal year 2010, applications must be received by July 16. A total of $45.1 million is available with $36.2 million set aside for loans. More information in Illinois is available by e-mailing Mary.Warren@il.usda.gov or calling 217-403-6218.
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FarmWeek Page 12 Monday, July 12, 2010
FB IN ACTION
Cyclists to raise money for IAITC Cyclists will travel through a six-county area in Eastern Illinois Sept. 7-9 during the 15th Annual Illinois Agriculture in the Classroom (IAITC) Bike Ride. The IAA Foundation hosts the annual fundraising event to support ag literacy programs. The early registration deadline is Aug. 20. This year’s ride will highlight routes through Ford, Grundy, Iroquois, Kankakee, Livingston, and Will counties. The riders will stop at about 30 schools and perform a skit stressing the importance of agriculture and offering some bicycle safety information. “This ride not only provides an education for the students, but also the cyclists,” said Paul Roney, bike ride co-chairman. “I farm in Central Illinois, and this ride has allowed me to see first hand different agricultural issues facing my peers around the state.” The other co-chairman, Charlie Grotevant, added: “The bike ride is a lot of fun, provides an opportunity to meet a lot of great people, and raises funds for a great cause.” All the routes follow paved roads and will begin and end in Kankakee each day. Riders may participate on one, two, or three days and have an option to ride short (about 40 miles), medium (about 65 miles), or long (100 miles) routes. The IAA Foundation is accepting registrations. Riders who register by Aug. 20 pay $75. After that date, the fee increases to $95. Individuals who raise money for IAITC will receive special rider benefits. Riders who raise between $250 and $499 will receive free registration; those who raise $500 to $999 will receive free registration and meals, while those who raise $1,000 or more will receive free registration, meals, and lodging. More information about registration and fundraising is available online at {www.iaafoundation.org} or by calling 309-5572230.
Illinois FFA and 4-H representatives present a special Illinois Farm Bureau Youth Education wreath to guards at the Tomb of the Unknown Soldiers at Arlington National Cemetery, Virginia. A closeup of the wreath is shown in upper right. The teens learned about history and cooperative businesses on a recent trip sponsored by IFB and affiliated companies. (Photo by Mariah Dale-Anderson, IFB youth activities manager)
Ag youth learn about history and cooperative businesses BY KAY SHIPMAN FarmWeek
A glimpse of Vice President Joe Biden and a White House tour were two highlights for 75 Illinois FFA and
4-H members who participated in a recent Heritage and Cooperative Tour, sponsored by Illinois Farm Bureau and affiliate companies. The group happened to be touring the U.S. Capitol at the same time the vice president came to the Hill. The Illinois teens also were able to secure a White House tour, which are limited due to tightened security, according to Mariah DaleAnderson, IFB youth activities manager. The tour groups included the winning FFA chapters who were honored for their cooperative programs and the top FFA chapters that won awards
for their heritage programs. Cooperative winners also toured several cooperative businesses, including a fruit processor, dairy, and electric co-op, on their way to Washington, D.C. Meanwhile Heritage winners toured several historical sights, including Gettysburg National Park. After meeting in Washington, D.C., the two groups toured several government buildings, historical sites, and museums. In a moving ceremony, they presented a special wreath at the Tomb of the Unknown Soldiers in Arlington National Cemetery (see photo).
DAIRY LESSONS
More than 200 visitors from seven Manteno kindergarten classes along with their teachers and numerous parents paid a recent visit to the Surprenant Dairy Farm in rural Manteno. Here, Dave Surprenant speaks to the students about how the cows are cared for and what they eat. All the cows at the Surprenant dairy are pasture fed. The farm milks about 160 dairy cows and has a total of more than 300 cows. Kankakee County Farm Bureau provided ice cream treats for all of the visitors following the tour. (Photo courtesy of Kankakee County Farm Bureau)
FarmWeek Page 13 Monday, July 12, 2010
FROM THE COUNTIES
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UREAU â&#x20AC;&#x201D; An informational seminar about marketing techniques will be at 6:30 p.m. Wednesday, July 21, at the Farm Bureau office. The seminar is an extension of last summerâ&#x20AC;&#x2122;s Marketing 101 series. Dinner will be served. Scott Stoller, Michlig Ag, and Dan Aubrey, Consolidated Grain and Barge, will be the speakers. Call the Farm Bureau office at 815-875-6468 by Friday for reservations or more information. â&#x20AC;˘ Two informational meetings on the U.S. Environmental Protection Agencyâ&#x20AC;&#x2122;s spill prevention, control, and countermeasure rule will be Monday, July 26. The first meeting will be at 9 a.m. at the Bureau County Farm Bureau office and the second at 1 p.m. at the Marshall-Putnam County Farm Bureau office. Clem Weborg, Ag View FSâ&#x20AC;&#x2122; energy marketing manager; and Kevin Runkle, Illinois Fertilizer and Chemical Association, will be the speakers. Call the Farm Bureau office at 815-875-6468 by Monday, July 19, for reservations or more information. HAMPAIGN â&#x20AC;&#x201D; The Communications Committee will meet at 7 p.m. Monday, July 19, at the Farm Bureau office. Agenda items include the Farm Bureau website updates and developing a new mission statement. Feedback is welcome. Send your input on these two topics to megan@ccfarmbureau.com. â&#x20AC;˘ Farm Bureau will sponsor a renewable energy seminar from 7:30 to 11:30 a.m. Thursday, July 22, at the Farm Bureau auditorium. Breakfast will be served. Topics include Farm Bureau organizational policy, wind energy, updates on renewable energy, climate change and its impact on ag, and the industryâ&#x20AC;&#x2122;s outlook on corn and soy-based renewable
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Auction Calendar Thurs., July 15. 10 a.m. 80 Ac. Moultrie Co. Sarah E. Broughton Trust, MT. ZION, IL. Wm. Beck Auction and Realty. www.williambeckauct ions.com Sat., July 17. 10 a.m. Farm machinery. Earl Rinkenberger, BUCKLEY, IL. Bill Kruse and Raymond Cleary, Auctioneers. billkruse.net Sat., July 17. 10 a.m. 333 Ac. Jefferson Co. SESSER, IL. Mark Kennedy, Auctioneer. buyafarm.com. Sat., July 17. 10 a.m. Real Estate Auction. Estate of Charles Aldridge, WOLF LAKE, IL. Alex Belcher, Auctioneer and Real Estate Broker. Sat., July 17. 10 a.m. Real Estate Auction. SESSER, IL. Buy A
fuels. Registration forms are available at the Farm Bureau office or on the website at {www.ccfarmbureau.com}. Call the Farm Bureau office at 217-352-5235 for more information. ACKSON â&#x20AC;&#x201D; The Womenâ&#x20AC;&#x2122;s Committee needs to borrow antique farm tools and equipment for an exhibit at the John A. Logan Museum. Items will be on display from January to June. The committee needs a picture and measurements to submit to the museum before the end of August. Call the Farm Bureau office at 618-684-3129 for more information. ANKAKEE â&#x20AC;&#x201D; Farm Bureau and County Corn Growers will sponsor a â&#x20AC;&#x153;Cultivating Communicationâ&#x20AC;? meeting at 7 p.m. Tuesday at the University of Illinois Extension office, Bourbonnais. Suggestions on helping those in agriculture tell their story using the social media will be discussed. Kelly Rivard, North Central College Internet communications and design student, and Ray Prock Jr., Ag Chat Foundation, will be the speakers. Call the Farm Bureau office at 815-932-7471 for reservations or more information. ASALLE â&#x20AC;&#x201D; LifeLine Screening will conduct tests for stroke, abdominal aortic aneurysm, peripheral arterial disease, atrial fibrillation, and osteoporosis. Receive an additional $10 off of four or more tests. Call the Farm Bureau office at 815433-0371 for costs or reservations. EE â&#x20AC;&#x201D; Farm Bureau and the Lee County Fair Association will sponsor an American Red Cross blood drive from noon to 6 p.m. Thursday, July 22, at the Lee County Fairgrounds. Call the
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Farm Bureau office at 815857-3531 or e-mail leefb@comcast.net if you can volunteer or donate. â&#x20AC;˘ The Lee County Farm Bureau Foundation will sponsor a raffle for your choice of a John Deere or Case IH pedal combine. Tickets are $5 or three for $10. The winner will be selected Sunday, July 25, at the Lee County 4-H Fair and Junior Show. All proceeds will benefit the ag literacy programs. Tickets are available at the Farm Bureau office or from a board director. Call the Farm Bureau office at 815857-3531 or e-mail leecfb@comcast.net for more information. â&#x20AC;˘ Two informational meetings on the U.S. Environmental Protection Agencyâ&#x20AC;&#x2122;s spill prevention, control, and countermeasure rule will be Monday, July 26. The first meeting will be at 9 a.m. at the Bureau County Farm Bureau office, Princeton, and the second at 1 p.m. at the Marshall-Putnam County Farm Bureau office, Henry. Farmers in Lee, Bureau, Marshall-Putnam, and Stark counties are invited. Call the Farm Bureau office at 815-
857-3531 by Monday, July 19, for reservations or more information. CDONOUGH â&#x20AC;&#x201D; Farm Bureau will sponsor a Marketing 102 seminar at 7 p.m. Thursday, July 22, at the Farm Bureau office. Andrew Goodrich, Russell Grain, will be the speaker. Call the Farm Bureau office at 309-837-3350 for reservations or more information. EORIA â&#x20AC;&#x201D; The Heart of Illinois Fair runs through Saturday. Farm Bureau has a Spin the Wheel game in the Exhibit Hall. â&#x20AC;˘ Delivery for Michigan blueberries will be from 8:30 a.m. to 5 p.m. Thursday at the Farm Bureau office. â&#x20AC;˘ A History of Illinois Agriculture tour will be Thursday, July 22. Participants will visit the Gillett Home, Elkhart Hill; Prairie Home near Funkâ&#x20AC;&#x2122;s Grove, and Haws Wooden Grain Elevator. Cost is $40, which includes bus, lunch, and tours. Call the Farm Bureau office for more information. â&#x20AC;˘ Deadline to order Calhoun County peaches is Friday, July 23. Peaches are available in 25-pound boxes.
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Delivery to the Farm Bureau office is Thursday, Aug. 5. ANGAMON â&#x20AC;&#x201D; The Marketing Committee will sponsor a crop risk management workshop at 6 p.m. Wednesday at the Farm Bureau office. Steve Johnson, Iowa State University Extension farm and ag business management specialist, will present â&#x20AC;&#x153;Controlling the Crop Controllables.â&#x20AC;? Call the Farm Bureau office at 753-5200 for reservations or more information. â&#x20AC;˘ A Farm Bureau policy development â&#x20AC;&#x153;tailgate talkâ&#x20AC;? will be at 5:30 p.m. Tuesday, July 20, at the Farm Bureau office. Rich Guebert Jr., Illinois Farm Bureau vice president, will provide a policy issue update. Members will have an opportunity to express concerns on policy. Call the Farm Bureau office at 7535200 for reservations or more information.
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â&#x20AC;&#x153;From the countiesâ&#x20AC;? items are submitted by county Farm Bureau managers. If you have an activity or event open to all members, contact your county Farm Bureau manager.
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Farm Land & Auction Co. buyafarm.com Mon., July 19. 10 a.m. Farm machinery. Schultz Bros., HERSCHER, IL. Mike Peterson Auctioneers. www.mikepetersonau ctioneers.com Sat., July 24. 9 a.m. Auction. Northwest Eq., OREGON, IL. Cal Kaufman and Todd Wills, Auctioneers. Tues., July 27. 7 p.m. 96.5 Ac. Farmland. Carole Bratton and William Atchley, Family of Lowell Peddicord, JOHNSONVILLE, IL. Carson Auction, Realty & Appraisal Co. www.carsonauctiona ndrealty.com Thurs., July 29. 10 a.m. 158 Ac. Farmland. Marjie Musson, ROBERTS, IL. Bill Kruse, Auctioneer. billkruse.net Sat., July 31. 10 a.m. Machinery and collector tractors. Larry
Armstrong Estate, ODELL, IL. Immke and Bradleysâ&#x20AC;&#x2122; Auction Service. biddersandbuyers.com/immke and bradleyauctionsinc.com Sat., July 31. 10 a.m. Monroe Co. Land Auction. Edward Rickert Trust, WATERLOO, IL. buyafarm.com Sat., July 31. 9:30 a.m. Estate Auction. Estate of Julius Kartheiser, YORKVILLE, IL. DeBolt Auction Service, Inc. www.deboltauctionse rvice.com Wed., Aug. 4. 10 a.m. Farm machinery. Harold and Mary Becker, EMINGTON, IL. Immke and Bradleysâ&#x20AC;&#x2122; Auction Service. www.biddersandbuye rs.com/immke Sat., Aug. 21. 9 a.m. Large Multi Farmer Auction. OKAWVILLE, IL. Riechmann Bros. LLC, Auctioneers.
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FarmWeek Page 14 Monday, July 12, 2010
PROFITABILITY
New technology: More is on the way BY SID PARKS
“Summertime and the livin’ is easy,” or so the song goes. For those who have been struggling with the spring’s near-record rainfall, the recent sunshine allowed them to finish planting, cut hay or wheat, or catch up on crop proSid Parks tection applications. At the same time, I heard others say, “Sure could use a rain!” Isn’t that always how it goes? Some are wanting while
others have too much? I feel the same is true with regard to technology. While some folks feel overwhelmed and choose to wait or not participate at all, I have really been impressed by the adoption of some of the available precision technologies. In particular, autosteer was a big help in getting through some of the challenges of this spring. Adverse conditions and weather-related issues forced long hours and fatigue, which made this spring a challenge for planting and product applications. One manager I visited with last month said the services
provided and acres covered would not have been possible without the precision resources he had available. Similarly, a farmer friend of mine said he used his newly acquired guidance system to help plant soybeans into cornstalks at 2 a.m., when there would have been no way to know where he was otherwise. (I love it when things work out, don’t you!) Later this month, I will be attending the 10th International Conference on Precision Farming in Denver, Colo. This typically brings hundreds of academic, industry, and agriculture practitioners from
around the world to visit and share ideas, research, and the latest technology from their respective companies or universities. While not everyone would enjoy this, some of us will be like kids on Christmas morning, excited to see all that might be available for us to explore. I anticipate some of the newer technologies to be discussed are things such as cellular modem communication technologies and RTK (RealTime Kinematic) networks, remote service and diagnostics tools, enhanced guidance systems, and improved
remote sensing services. I hope to participate in many of the breakout sessions, learn of the new ideas and technologies, and bring those concepts home with me. I will then work with our FS crop specialists and precision coordinators to ensure they are current with their understanding and implementation of new technologies. Contact them for the latest potential FS GREEN PLAN solutions for your farm. Sid Parks is GROWMARK’s manager of precision farming. His e-mail address is sparks@growmark.com.
Wheat harvest winds down; basis levels improve BY DANIEL GRANT FarmWeek
Illinois farmers last week came closer to completing this season’s abbreviated wheat harvest. The National Agricultural Statistics Service Illinois field office last week reported 85 percent of the 325,000 wheat acres to be harvested in the state this year were in the bin as of July 5. This compares with 60 percent at the same time last year. The amount of wheat acres planted in Illinois last fall was down 59 percent compared to the previous year. Farmers in the state who
are dealing with a much smaller wheat crop this year at least have seen a large improvement in the wheat basis. Cash wheat prices, which
FarmWeekNow.com Visit FarmWeekNow.com to learn more on how Illinois’ wheat basis has improved during the past year.
ranged from $4.73 to $4.96 per bushel in Southern Illinois the first week of July, were near or above the futures price of $4.87, according to Darrel Good, University of Illinois Extension ag economist.
M A R K E T FA C T S
Feeder pig prices reported to USDA*
Weight 10 lbs. 40 lbs. 50 lbs. Receipts
Range Per Head Weighted Ave. Price $36.10-$47.29 $40.34 $55.18-$64.00 $60.39 n/a n/a This Week Last Week 20,897 25,403 *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 $74.85 $76.55 $55.39 $56.65
Change -1.70 -1.26
USDA five-state area slaughter cattle price Steers Heifers
This week $92.50 $92.37
(Thursday’s price) Prv. week Change $91.01 1.49 $90.96 1.41
CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states. (Prices $ per hundredweight) This week Prev. week Change 113.94 111.22 2.72
Lamb prices Confirmed lamb and sheep sales This week 756 Last week 550 Last year 873 Wooled Slaughter Lambs: Choice and prime 2-3: 90-110 lb., $115-$117; 110-130 lbs., $130. Good and choice 1-2: 60-90 lbs., $125. Slaughter Ewes: Utility and good 1-3: $43-$45. Cull and utility 1-2: $37-$43.
Export inspections (Million bushels)
Week ending Soybeans Wheat Corn 07-01-10 2.3 16.8 35.1 06-24-10 4.6 18.0 39.3 Last year 15.8 15.3 35.8 Season total 1361.2 70.7 1518.5 Previous season total 1147.5 66.2 1419.1 USDA projected total 1445 900 2000 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.
This convergence of prices is a sharp contrast to recent years. Cash wheat prices in Illinois last year slipped to more than $1 below the futures price and as much as $2 below the futures price in 2008. “It (the wheat basis in Illinois) has improved dramatically,” said Jeff Hainline, chairman of Advance Trading, who also is a member of the National Grain and Feed Association’s Risk Management Committee and the Commodity Futures Trading Commission’s special subcommittee on convergence. The improvement in local basis levels has been credited to a policy change by the CME Group from a fixed storage rate to a variable storage rate for wheat. The small soft red winter wheat crop also may be impacting the market. “A lot of folks who pushed that change say the higher storage rate has corrected the problem with convergence,” Good said. “It’s harder for the market to offer a return for those who take delivery and not load out.” The CME Group’s maximum storage rates prior to the change in some cases were below actual commercial storage costs. The Illinois Farm Bureau Profitability Advisory Team supported the changes to the wheat contract. “The market (recently) has been increasing carry to hold wheat off the market and now we’re getting convergence,” Hainline said. “I’m very satisfied the contract change CME Group implemented is responsible and has allowed all players access.” The change in storage rates for wheat contracts was not implemented in the western states, and basis levels in Kansas City last week were anywhere from 50 cents to 80 cents below traditional levels, Hainline reported.
Wheat basis levels in Illinois
The wheat basis has improved dramatically in Illinois compared to previous years and as of last week cash wheat prices in Southern Illinois nearly converged with futures prices. Cash prices last week ranged from just 10 cents up to 50 cents per bushel below futures prices compared to $1-plus last year. In some cases, cash prices last week were even above futures prices.
Study: Curbing speculation could destabilize market Price spikes for gasoline, grain, and other commodities could be magnified if lawmakers curb speculative trading in futures markets, according to a new study. Congress is considering proposals to restrict a growing surge of speculation in commodity futures that some blame for a 2008 spike that netted record corn, rice, and wheat prices. The commodity price bubble also pushed gas prices above $4 per gallon. But new research suggests the billions of dollars invested by speculators may have helped stabilize prices rather than drive them up, said Scott Irwin, a University of Illinois economist who co-wrote the study. “Restricting investments by speculators could do exactly what these proposals are trying to avoid,” Irwin said. Irwin and Dwight Sanders, economist at Southern Illinois University, researched the 2007 and 2008 price hikes in the commodity markets in a study commissioned by the Parisbased Organization for Economic Cooperation and Development. The researchers found no convincing evidence that speculators aggravated price increases that already were on the rise as drought cut into grain supplies and growing worldwide demand boosted oil demand. Instead, the study indicated the influx of cash from index traders provided a deep new pool of liquidity that reduced volatility and held price increases in check.
FarmWeek Page 15 Monday, July 12, 2010
PROFITABILITY Corn Strategy
C A S H S T R AT E G I S T
World wheat structure changing The devil is always in the details. That could be said about the latest USDA forecast for the world wheat situation. On the surface, it certainly looks like buyers will have an abundant supply of wheat to choose from this coming year. But, the breakdown shows quite a different case, maybe not one that’s bullish, but one that’s certainly less bearish than one might believe. Where the trade was gearing up for a 10 million to15 million metric ton (mmt) reduction in world ending stocks, the USDA forecast only a near 7-mmt decline. The new stocks-to-use ratio, 28 percent, represents both a reduction from last month and last year. But, it’s still a very comfortable number. As expected, USDA forecast larger supplies and ending stocks in the U.S. What wasn’t expected was an increase in the Chinese crop and ending stocks. Those two, especially
Basis charts
the latter, tended to mask just how much the fundamental structure tightened outside of those two countries. The stocks-to-use ratio in the world outside of those two countries was reduced to 17.5 percent from last month’s 19.6 percent projection and last year’s 21.7 percent. The historical low point was established two years ago at 16 percent. In the new estimates, USDA did lower Russian output 3.5 mmt, Kazakhstan output 3 mmt, Canadian output 3 mmt, and the European Union (EU) crop 1 mmt. Private analysts indicate the Russian crop could be another 2 mmt to 4 mmt lower yet. Wet weather has been a problem in the Ukraine, Bulgaria, and Romania, but the extent of losses, if any, is still difficult to determine. USDA stuck with its 20 mmt projection for the Ukraine. At a minimum, the rain could cut quality, reducing its competitiveness in world trade this year. Recent extreme heat has been a problem in both France and Germany. While numbers are not yet clear, the EU wheat crop could be revised lower yet. In the end, wheat output outside of the U.S. and China could further tighten. Quality could slip a little as well. That could bolster demand for U.S. wheat in the world over the next year. Because we have such a huge potential surplus, it could diminish downside risk. Chinese supplies are becoming burdensome, too. The Chinese could export a little more into Asian countries, but there is a better chance of seeing them use more wheat for feed this year, helping cap any need to import corn. AgriVisor endorses crop insurance by
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Cents per bu.
2009 crop: Use current strength to make catch-up sales. 2010 crop: The December contract penetrated key resistance at $3.85, opening the door for the move above $4-$4.02 resistance. This may not happen until later in July. Leave an order to price another 10 percent if December futures reach $4.12. Fundamentals: Given the June 30 corn stocks and planting numbers, the new USDA supply/demand numbers were not as positive as hoped for with 2010/2011 U.S. ending stocks forecast at 1.373 billion bushels. Still, given the wet June and its impact on condition ratings, more analysts are seeing yields coming in below USDA’s 163.5-bushel projection. With pollination upon us, the market has become sensitive to the short-term weather risks and yield repercussions. Every 1 bushel yield decline cuts 81 million bushels off the crop size.
Soybean Strategy 2009 crop: Merchants have mostly shifted basis bids to November futures, and they have reached important resistance. Use this opportunity to sell old-crop inventories you may still have. 2010 crop: Leave an order to price another 10 percent if November futures hit $9.58, bringing the total to 50 percent. We may add another 10 percent over the next few weeks, but want to see how the crop develops. Fundamentals: The new USDA supply/demand projections were close to expectations. This year’s larger acreage leaves some room for yields, or harvested acres to fall and yet still build supplies in the coming year. Even so, traders are a little fearful of weather and yield implications with continued signs that the Pacific Ocean is slipping into a La Nina event. That could bring late-season dryness to the Midwest. ✘Fail-safe: Complete the new-crop sale if November falls to $9.38.
Wheat Strategy 2010 crop: The trend in wheat shifted higher. Key resistance levels have been penetrated. However, prices could temporarily set back with the negative USDA numbers. New-crop sales should have been increased another 10 percent when Chicago September reached $5.25, bringing the total to 50 percent. If it reaches $5.42 again, make an additional 10 percent sale. Given this week’s surge, shortterm storage has become less attractive, especially commercial storage. If you price
wheat at harvest — or shortly after — get it done. 2011 crop: With next July futures having moved to $6, make an initial 10 percent newcrop sale now. Fundamentals: The first “official” USDA forecast for all wheat production, 2.216 billion bushels, was significantly more than the trade expected. World production was forecast to decline from previous estimates due to hot and dry conditions in the Black Sea region, but not as much as expected. This should boost U.S. export business but not enough to keep stocks from building.
FarmWeek Page 16 Monday, July 12, 2010
PERSPECTIVES
Sometimes budget deficits are good
O
ur federal government is running a huge budget deficit. In fiscal 2009 we spent about $1.4 trillion more than we collected in taxes, which was just short of 10 percent of gross domestic product (GDP). That’s the biggest deficit since World War II when it reached 30 percent of GDP. Deficits add to the national debt. The federal government borrows in order to spend more than it takes in. It sells Treasury bonds to investors, who lend to the federal government in exchange for a promise to repay plus interest. The value of all those Treasury bonds is the national debt — the amount the federal government owes investors. Some of the debt is held by government agencies. The debt held by the public is usually taken as the meaLARRY sure of what the government owes. DEBOER That figure was about $7.3 trillion — 53 percent of GDP — at the end of fiscal 2009. Big deficits add to the debt, so the share is expected to be 64 percent by the end of 2010. How will we pay it back? We won’t. The debt got enormous during World War II, and we never paid it back. We’re still paying interest on it. The reason this didn’t cause problems is that the deficit dropped to almost nothing right after the war and stayed low in most years through the mid-1970s. From 1947-1974, the deficit averaged less than one-half of 1 percent of GDP. The debt grew by $100 billion during those years, but it fell from 109 percent of GDP to 24 percent of GDP.
United we eat
We compare the debt to GDP because GDP measures our ability to handle debt. The higher GDP is, the more tax revenue we can collect, and the greater is our capacity to pay interest on Treasury bonds. We never paid back the debt from World War II, but because we quit running big deficits and our GDP increased, the burden of those interest payments got less and less. It’s a problem if our deficits are so big every year that the debt as a share of GDP keeps rising. Interest on the debt then becomes an ever-bigger share of the federal budget, and that requires less spending on government services, or ever-higher taxes or even more borrowing. That can’t go on forever, which is why it’s called unsustainable. Since the debt is about two-thirds of GDP now, the deficit has to be less than about two-thirds of GDP growth to keep the debt share from rising. That’s a deficit of about 3 percent of GDP or less. Unfortunately, it’s likely that the deficit will be a lot higher than that throughout the coming decade. The debt will increase as a share of GDP. Big deficits in an expanding economy can create problems. If the Treasury borrows a lot, there will be less left over to lend to businesses, and that reduces investment in buildings, equipment, and technology. The Treasury may have to offer higher interest rates to get investors to buy all those bonds, raising interest rates for everyone. The Federal Reserve Board may decide to keep interest rates lower and buy those bonds itself, but that would increase the money supply and cause inflation. Big future deficits are a problem. Big deficits now, not so much. They’re the result of the recession. Tax revenues are way down because of all that unemployment. Spending is up, partly because of added entitlement payments and partly because of the government’s stimulus spending. But deficits during a recession help. The extra spending and reduced taxes increase the sales of goods and services, which give businesses a reason to employ more people. Without the deficits, unemployment would be even higher. With unemployment near 10 percent, it wouldn’t do to try to reduce the deficit now. The federal government tried that during 1937-38. With the unemployment rate still at 14 percent, the Roosevelt administration cut spending, and Social Security taxes were first collected. The deficit was reduced to near zero — and the economy dropped into recession. Unemployment rose to 19 percent. We do need a long-range plan to reduce deficits to less than 3 percent of GDP. We need to balance the budget eventually. But not now.
More than 60 million people in the United States ate to celebrate the nation’s birthday. Americans are great eaters. From Alaska to Florida and California to New York, citizens cleaned grills, stocked fridges and pantries, had backyard cookouts and family dinners, all thanks to the bounty produced by hard-working farm and ranch families. Few other days on the calendar inspire a greater sense of American unity than July 4. We are reminded of the freedoms we enjoy and pay tribute to those who founded this country. We honor those who fight to keep our nation free and those who have paid the NATHAN SMITH ultimate sacrifice. The holiday also offers an guest columnist opportunity to examine how much we depend on each other for the great selection of food we enjoy. America’s tastes are as diverse as its population, yet without help from farmers in every state, dining on Maine lobster in Nevada or Washington apples in Kansas wouldn’t be as easy. Here in the land of the free there is no set menu for Independence Day, but many families enjoyed hamburgers and lemonade, peach cobbler and ice cream. No matter what the main course, there was a good chance items from multiple states were on the table. If beef was for dinner, there was a one-in-five chance it came from Texas. If you ate chicken instead, say thanks to states such as Georgia, Alabama, and South Carolina. There was a good chance those tender morsels found their way to your plate from farm families in the South. Or, how about pork from the Midwest, or lamb from the West? Did you enjoy fries or potato salad? Idaho potatoes are some of the best. Salad was another menu item. California lettuce, Florida tomatoes, and Wisconsin cheese were just a few of ingredients. It wouldn’t be “The Fourth” without watermelon, thanks to farm families in states such as Arizona and Indiana. No matter what was on the grill, in the oven, or in the mixing bowl, Americans enjoyed an abundant food supply. But more importantly, they can be secure knowing that their food is among the safest in the world and grown by farmers dedicated to caring for our natural resources. In addition to the diversity of selection and abundance, Americans enjoy year-round food options. Not long ago, buying fresh, tasty produce in the winter was not an option. Today, through safe, advanced farming methods, we are able to enjoy many foods no matter the season. Americans recently commemorated our nation’s birthday. They also could have been thankful for the national bounty from all 50 states — from sea to shining sea.
Larry DeBoer is an agricultural economics professor at Purdue University, West Lafayette, Indiana. His e-mail address is ldeboer@purdue.edu.
A Texas native and recent graduate of Tarleton State University, Nathan Smith is a public relations intern at the American Farm Bureau Federation.
LETTER TO THE EDITOR Didn’t stimulus add to deficit? Editor: I’m sure we all remember the quip by President Barack Obama during the presidential campaign of “Putting lipstick on a pig.” Judging by the statement of Rep. Phil Hare in the May 3
edition of FarmWeek, it seems Representative Hare believes “lipstick on a pig” to be a valid strategy. What better way could one use to promote a $5 billion expenditure than to claim, “This bill doesn’t add a penny to the deficit. It comes out of the stimulus.” The issue here is not whether the program is good
or bad, but the attitude of Congress, and particularly our congressmen and senators, when they dole out these billions and spin it as “not adding to the deficit.” The obvious question here is “Did the so-called stimulus add to the deficit?” If we are to believe published reports in the media quoting various gov-
ernmental agencies, the stimulus has greatly increased the deficit, so what accounting method does Representative Hare use to declare that this $5 billion is deficit free? This attitude toward the disposition of our tax money by elected officials at all levels is unacceptable. Too many of these officeholders have the
opinion that we, the people, don’t understand and only they have the insight to see the “big picture.” I submit that in fact these officials are missing the real “big picture” of voter dissatisfaction as how they are handling the affairs of the people. WILLIAM SCHROEDER, Hillsboro