FarmWeek September 20 2010

FOUR NEW ILLINOIS broadband projects announced last week will create about 500 jobs and bring the total in federal broadband funds to $240 million-plus. ...........................2

A N E W A NA LY S I S b y a n internationally recognized engineering firm indicates virtually no problems in older cars using an ethanol blend of 15 percent. .........4

Monday, September 20, 2010

NATIONAL FARM SAFETY week is upon us and serves as a reminder to be particularly careful during an early harvest season that has afforded very few breaks. .......9

Two sections Volume 38, No. 38

IFB steps up estate tax campaign

Farmers caught in debate over ‘wealth’ and taxes

BY MARTIN ROSS FarmWeek

Periodicals: Time Valued

Pre-election debate over what constitutes “middle-class” tax relief has farm families caught in the middle as the return of the federal estate tax looms.

If Congress does not act this fall, the currently dormant estate tax will be revived Jan. 1 at 2001’s $1 million exemption and a high 55 percent tax rate, potentially capturing many Illinois families whose land values alone have increased significantly over the past decade.

In a statewide phone campaign, Illinois Farm Bureau members last week lobbied Democrat U.S. Sens. Dick Durbin of Springfield and Roland Burris of Chicago to support a $5 million individual/$10 million-per-couple exemption in 2011.

Rep. Phil Hare, a Rock Island Democrat, told visiting IFB Leaders to Washington the estate tax is “just plain unfair,” and said he urged his colleagues to “err on the high side” in setting a new exemption.

Rep. Jerry Costello, a Belleville Democrat who, like Hare, favors scrapping the tax, sees “support on both sides of

the aisle” for a higher threshold.

“I don’t want a single farmer ever having to worry that they can pass their farm on to their family,” Hare told FarmWeek.

“I met a guy when I was back home — he’s had a farm in his family since 1860, and he has every right to pass that on.

They’ve already been taxed once, and I think taxing people twice is, quite frankly, un-American.

“Hopefully, we can get rid of (the estate tax). If not, we could raise the ceiling so high that no farmer will ever have to worry about it.”

IFB’s call-in campaign commenced amid increasingly tense tax relief debate. President Obama has proposed limiting general tax cuts to households earning less than $250,000 per year, and House Speaker Nancy Pelosi (DCalif.) last week supported consideration for extending

“middle-class” cuts while allowing breaks for “wealthy” taxpayers to expire.

Estate tax relief has been characterized by some lawmakers as an attempt to placate the “rich.” But given current Illinois land values, IFB Leader Steve Koeller warned a $1 million exemption “just barely touches a small amount of acreage.”

Koeller’s fellow Madison County Leader Mike Campbell said the non-farming public fails to grasp that farm value is “not so much wealth as it is expense: the expense of ground, the expense of machinery.”

“The only way you’re going to make ‘wealth’ is to liquidate what you have,” he said. “Then you can’t farm, because you don’t have anything to farm with.”

Hare sees a similar lack of congressional understanding of See Taxes, page 4

USDA ‘not just about small farmers’

Deputy secretary: Ag in budgetary ‘sights’ With the country “so much in the red,” ag spending under the next farm bill will be “all about the budget baseline,” USDA’s top budget official told Illinois farmers last week.

USDA today (Monday) was to submit its first-round fiscal 2012 budget plan to the administration Office of Management and Budget. Deputy Secretary Kathleen Merrigan, who oversees a current annual $149 billion budget, warned Illinois Farm Bureau Leaders to Washington “we’re at a point of belt-tightening.”

President Obama has directed USDA and other departments to trim 5 percent in existing spending for fiscal 2012. That’s a daunting assignment: The majority of USDA program spending is mandatory, with only $26 billion in discretionary funds ostensibly available for the federal scalpel.

Of those funds, USDA salaries and administrative costs consume $8 billion; $7 billion is dedicated to the popular Women, Infants, and Children’s nutrition program, which, Merrigan said, “everyone treats as mandatory”; and roughly $7 billion goes to USDA’s Food Safety Inspection Service. That’s “not a lot of wiggle room,” she stressed.

Further, the president’s bipartisan

National Commission on Fiscal Responsibility and Reform (see above) is expected in December to outline prospective deficit reduction measures. Commission members have “signaled from the start that agriculture is in their Kathleen sights,” Merrigan advised.

Merrigan She admits the fate of 2012 farm bill commodity and risk management spending is in question. Merrigan acknowledged ag lawmakers thus are working “expeditiously” to lock in farm spending baselines, but cited several unknowns on the horizon, including November elections.

“In Washington, that’s all anyone’s talking about,” she said. “How’s it going to impact farm bill deliberations? Are we going to have a change in party leadership, all kinds of shake-ups?

“We had our harvest barbeque here (Wednesday). We invited agricultural members in Congress, and that’s all we were talking about: Who’s vulnerable, what’s happening. We had the same conversations with Republicans and Democrats.”

FarmWeek on the web: FarmWeekNow.com

She noted Congress continually is “losing people in agriculture.” Senate Ag Committee Chairman Blanche Lincoln (D-Ark.) is fighting for re-election, and Merrigan sees “an increasingly urban Congress” with new congressional redistricting coming.

USDA thus is ramping up its public “conversation” about the importance of farming: Merrigan leads USDA’s “Know Your Farm, Know Your Food” campaign aimed at linking producers and consumers.

She stressed the need to “ride this new wave of public interest in agriculture” and correct misconceptions, particularly those involving larger-scale production.

Efforts on behalf of “local” and specialty growers have raised questions about USDA support for grain and larger livestock operations. USDA hopes to move fresh produce into schools and build slaughter capacity for small producers, but overall, its efforts are not “size-specific,” Merrigan said.

“I think of the Chicago school food system — these big institutions can’t deal with the small guys,” she said. “They’re going to be looking for a larger-sized farmer to supply their local food interests.” — Martin Ross

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

FarmWeek Page 2 Monday, September 20, 2010

STATE

Quick Takes BIODIESEL CREDIT AGAIN DENIED — Hopes for a revival of the U.S. biodiesel industry again faded last week as the Senate voted 41-58 against a motion to suspend legislative rules and accept an amendment that would retroactively have extended the federal biodiesel blenders tax credit.

Senate Majority Leader Harry Reid (D-Nev.) had signed off on the suspension, but the motion to suspend required 67 votes to pass. The biodiesel industry has languished since Jan. 1 when the $1-per-gallon credit expired, even though, as American Soybean Association (ASA) President Rob Joslin notes, biodiesel has provided “a significant market opportunity for U.S. soybean farmers, as well as jobs and economic development for rural communities.”

“ASA is severely disappointed in the failure of the Senate to extend the biodiesel tax credit,” Joslin said. “At a time when jobs and renewable energy production are cited as top priorities, it is unacceptable that Congress would fail to extend the biodiesel tax credit.”

CORN REFINERS WANT ‘CORN SUGAR’ — The Corn Refiners Association last week petitioned the U.S. Food and Drug administration to allow food and beverage manufacturers the option of using “corn sugar” as an alternate name for high fructose corn syrup (HFCS) on product labels.

The association said it is asking for the change because research has shown consumers mistakenly assume that HFCS is high in fructose when compared to other sweeteners.

“The majority of consumers polled do not know that high fructose corn syrup and table sugar have essentially the same composition: half fructose and half glucose. Forty percent believe that high fructose corn syrup has more calories than table sugar,” the refiners said.

A D M D O NA T E S TO A G E D — A r ch e r Daniels Midland (ADM) Co. last week made several donations for agricultural education and ag literacy efforts in Central Illinois.

The donations included $20,000 to the IAA Foundation for Illinois Agriculture in the Classroom; $50,000 to the Abraham Lincoln Presidential Library and Museum for agricultural exhibits and education; $30,000 to Illinois 4-H for scholarships and agriculture education; and $10,000 to the Children’s Museum of Illinois in Decatur, for agricultural education.

(ISSN0197-6680) Vol. 38 No. 38

Sept. 20, 2010

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

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State to receive $73 million for broadband Four more Illinois broadband projects were vice in rural areas of Cook, Kankakee and Will awarded $73 million in federal funding to build counties in Illinois and the Indiana counties of and improve infrastructure and broadband Lake, Newton, and Porter. access across Illinois, Gov. Pat Quinn Two projects received funding from the U.S. announced last week.

Department of Commerce.

Project funding will include more than $16 Northern Illinois University, on behalf of million from the Illinois Jobs Now! capital pro- the Illinois Broadband Opportunity Partnergram, which helped secure the federal funds. ship, will receive $46.1 million in federal dollars “Illinois has received over $240 million in matched with $14 million in state funds and federal broadband funding,” Quinn reported. $8.5 million in private funds to build an 870The four projects are expected to create mile fiber-optic network across nine counties. about 500 direct jobs.

This project will interconnect with the Illinois Rural Development Director Colleen DeKalb County broadband project, which Callahan announced two of the Illinois broadreceived stimulus funding in February. band projects will receive funding through MyWay Village will receive $4.7 million in USDA. federal funding matched with $1.2 million in “Broadband, much like education, is the great equalizer,” said Callahan. “Until we complete ‘Broadband, much like educathe initiative to bring hightion, is the great equalizer.’ speed Internet to our rural communities, rural Illinois will continue to be at a — Colleen Callahan disadvantage in receiving Illinois Rural Development director quality health care, improved educational opportunities, and potential business advanstate funding and $890,000 in private funding to tages.” teach thousands of senior citizens and people Norlight Inc. will receive $11 million, with disabilities e-mail basics and other practical matched by $450,000 in state funds and computer skills in 23 public and affordable $350,000 in private funds, to provide a wireless housing communities in Northern Illinois. network to 13 Central Illinois counties that To date, 17 Illinois projects have been selecteither lack or have little broadband access. ed for federal broadband funding.

Included are all or parts of Bond, Calhoun, Last week, the American Farm Bureau FederCass, Christian, Fayette, Green, Jersey, ation (AFBF) urged Congress to pass HR 5828, Macoupin, Montgomery, Morgan, Pike, Scott, the Universal Service Reform Act of 2010. and Shelby counties.

The bill would declare broadband Internet a Convergence Technologies Inc., based in universal service and allow for direct support Burr Ridge, will receive $9.1 million in federal from the Universal Service Fund (USF). AFBF funds matched with $700,000 in state funds to President Bob Stallman said the USF should be offer wireless broadband and digital phone ser- used for long-term broadband deployment.

Clinton County man charged with grain code fraud A Clinton County man whose company operated four elevators in Clinton and Marion counties recently was charged with fraud of $4 million, stemming from violations of the Illinois Grain Code, according to Illinois Attorney General Lisa Madigan.

John Kniepmann, 46, Breese, was charged with 12 counts of violating the grain code and one count of burglary.

Kniepmann is the owner and president of Grain Exchange LLC and Consolidated Exchange Inc. that operated elevators in Carlyle, Bartelso, Germantown, and Sandoval.

Clinton County Circuit Court Judge Dennis Middendorff issued a warrant for Kniepmann’s arrest. Bond was set at $50,000.

The attorney general charged Kniepmann allegedly submitted inaccurate, misleading, and false reports to the Illinois Department of Agriculture (IDOA) regarding notes valued at more than $4 million and payable to the First State Bank of Eldorado in 2007 and 2008.

He also is accused of withholding records indicating an alleged shipment in March 2007 of about 10,000 bushels of wheat by using the name of his stepdaughter and another shipment of 5,000 bushels in August 2007.

The Grain Exchange closed in February 2008.

IDOA liquidated its grain assets of nearly $1.2 million and used an additional $900,000 from the state grain insurance fund to compensate farmers who

were owed money.

“These charges resulted from an in-depth, coordinated investigation between the attorney general’s office and the (IDOA) and demonstrate our commitment to prosecute those who abuse the trust of Illinois grain producers,” IDOA Director Tom Jennings said.

Violations of the Illinois Grain Code are felonies punishable by three to seven years in prison. Burglary also is a felony.

Sangamon County pork producer appeals ruling A Sangamon County pork producer recently appealed a ruling by a Circuit Court judge that awarded the farmer only $500 for damages stemming from legal action by a resident group.

Robert Young of Rochester had sought more than $257,000 in damages from the Rochester-Buckhart Action Group that tried to stop construction of his hog operation.

On Sept. 7, Sangamon County Circuit Court Judge Leslie Graves awarded Young $500 and ruled against his other claims.

In February, the Illinois Supreme Court denied the resident group’s request to appeal a Fourth District Appellate Court decision that Young had the right to recover damages for the construction delay.

In 2006, the resident group obtained a preliminary injunction that temporarily stopped construction. That was decision later was reversed. Young has a 3,600-head operation.

FarmWeek Page 3 Monday, September 20, 2010

ENVIRONMENT

NUTRIENT SUMMIT

State focusing on nitrogen, phosphorous levels in water

BY KAY SHIPMAN FarmWeek

Illinois is working to address the amount of nitrogen and phosphorous in its lakes, rivers, and streams, but hasn’t reached a consensus on what the target levels should be or how to achieve them.

During a day-and-a-half nutrient summit last week, representatives of state government, the scientific community, and agriculture, as well as environmentalists, and those who deal with public water supplies and wastewater treatment grappled with myriad issues.

“This isn’t a debate; it’s a chance to let everyone air their perspectives,” Illinois Environmental Protection Agency (IEPA) Director Doug Scott said in videotaped remarks at the University of Illinois, Springfield.

IEPA started working on state-specific water standards in 2003.

The Illinois Council on Food and Agricultural Research (C-FAR) spent $1.5 million on research to help develop the new standards.

In the process, scientists learned water quality is complex and could not find a one-size-fits-all state standard for phosphorous, for example.

Water quality is a major

concern impact on water and signifiquality. Nitrogen cant issue and phosphorous ‘Nitrogen and phosphorous represent for the U.S. represent a signifEnvirona significant national priority and risk.’ icant national primental Proority and risk,” tection — Ephraim King King said.

Agency King’s laundry U.S. Environmental Protection Agency director of science and technology (USEPA), list of “nutrient according pollution” sources to Ephraim included urban “The jury is in on whether stormwater, which he called a King, director of USEPA’s excess nitrogen and phosoffice of science and techsignificant source; municipal phorous contribute to the nology. wastewater treatment plants;

Ag experts outline nutrient advancements, issues Illinois farmers have saved soil, planted trees and grass buffer strips, and used fertilizer more efficiently.

Those actions, along with others, have reduced the amount of nitrogen and phosphorous moving from agricultural land into lakes, rivers, and streams, ag experts said at a state nutrient summit last week.

But farmers can’t control the weather, and weather is a major factor in nutrient runoff, the experts noted.

“Nitrogen losses (from fields) are very much rainfall related and weather driven,” said Bob Hoeft, University of Illinois interim associate dean and director of Extension and a soil fertility specialist.

Nick Paulson, a U of I agricultural economist, told the gathering that farmers have a limited number of good days available to work in the field, especially in Illinois.

“Farmers face a lot of uncertainty (about) when they can put on fertilizer, what type to apply, and how much,” Paulson added.

The amount of nitrogen applied per acre has remained steady, while amount of nitrogen per bushel harvested has decreased, Paulson

noted. “We’ve (farmers) become more efficient at using nitrogen over time,” he added.

Likewise, the amount of phosphorous applied per bushel harvested also has declined, and Paulson projected that trend would continue.

Improved technology is helping farmers better manage fertilizer applications and use those nutrients more efficiently, said Howard Brown, manager of agronomy services for GROWMARK Inc. Brown cautioned against limiting farming practices, such as fall fertilizer applications, because farmers need to be able to adapt to weather conditions. He illustrated by noting an excellent growing season in 1987 was followed by a drought in 1988.

“When you look at nitrogen (applications) as a system, we have to be agile and react to conditions and the environment,” Brown said.

Brown promoted more on-farm nitrogenrate studies that help farmers better understand their soils and fertility needs.

“Farmers care about reducing nutrient loss.

I believe this coming from a farm family,” Paulson summarized. — Kay Shipman

livestock production; and agricultural row-crop production.

King then focused on “tools not being deployed as effectively” as possible.

Those included pollutant quotas known as total maximum daily loads (TMDLs) and numeric nutrient water standards.

A key USEPA priority is “nutrient accountability across watersheds” for point sources and nonpoint sources, he said.

“The states have authority and influence that go beyond the (federal) Clean Water Act,” King added.

Earlier in the program, Illinois Agriculture Director Tom Jennings noted: “We must recognize there will be costs associated with any management changes. We must balance the costs with resulting benefits and without placing undue burdens (on various sectors).”

IEPA is planning a second meeting in mid-October with the goal of identifying shortand long-term actions that can be taken, said Marcia Wilhite, chief of IEPA’s water pollution control bureau.

“This (issue) isn’t something that can be solved with one conversation. We need additional discussion,” Wilhite said.

Environmentalists say nutrient levels must be reduced Nitrogen and phosphorous levels in Illinois water bodies cause problems, and current practices either aren’t reducing those levels or not reducing them fast enough, according to several environmentalists who spoke at a state nutrient summit last week.

Establishing state numeric standards for nitrogen and phosphorous levels in bodies of water is a priority for the environmental groups.

Currently, Illinois only has a numeric phosphorous standard for

some lakes, although the Illinois Environmental Protection Agency (IEPA) has worked on state standards since 2003.

Cindy Skrukrud with the Sierra Club and Albert Ettinger with the Environmental Law and Policy Center noted that environmental groups recommended their own phosphorous standards to IEPA in 2008, but the agency didn’t adopt them.

Ettinger pointed to work done in other states — especially in Wis-

consin — to set numeric nutrient standards for water bodies. He even suggested Illinois environmental groups may approach the Illinois Pollution Control Board with Wisconsin water quality data to have Illinois water standards written.

Craig Cox with the Environmental Working Group (EWG) said his organization plans to recommend government policy changes.

“Business as usual will not work,” Cox said.

Cox promoted precision conser-

vation that would focus conservation practices on areas which are contributing the most nutrients to streams, etc., within a watershed.

He said the government should enforce conservation compliance, possibly for water quality, in order for landowners to qualify for farm program benefits.

EWG also is interested in “precision regulations” at the state level with the goal being to “push those farmers causing the most damage,” Cox explained. — Kay Shipman

IEPA investigates sources of Central Illinois fish kill The Illinois Environmental Protection Agency (IEPA) at presstime Friday continued an investigation into possible causes of a fish kill in Lone Tree Creek and the Bruce Yurdin Sangamon River in McLean County,

Bruce Yurdin with IEPA’s water bureau told FarmWeek.

“We’re looking at more than one potential source,” Yurdin said.

He did not have an estimate of when IEPA might determine either a cause or the sources.

IEPA received a report about the fish kill on Sept. 6, Yurdin said, adding the incident may have happened 48

or more hours earlier.

A “concerned citizen” reported seeing “brownstained water” to the Illinois Department of Natural Resources (IDNR) on Sept.

6, and IDNR investigated the report, said Januari Smith, IDNR spokesman.

IDNR estimated about 40,000 fish were killed along an 11.52-mile stretch of the creek and river, Smith said.

Fish species killed included

large- and small-mouth bass, sunfish, channel catfish, carp, and minnows. Other aquatic life, such as crayfish, frogs, and mussels, also were killed.

IEPA has isolated the water source to a drainage tile that empties into Lone Tree Creek, Yurdin said.

The area is agricultural, but a road and a pipeline also run through the area, he said.

IEPA has eliminated some potential sources, but Yurdin declined to name them.

The incident has generated a lot of interest from the public and the media, Yurdin said.

“Once we (IEPA) have figured it out, we will go back and let the public and the press know, ‘Here’s what we think happened and who is responsible,’” Yurdin said.

— Kay Shipman

FarmWeek Page 4 Monday, September 20, 2010

GOVERNMENT

Pecking at OPEC: Ethanol efforts accelerated

BY MARTIN ROSS FarmWeek

The U.S. House Ag Committee chambers last week served as the backdrop for an unusual event: ethanol industry observance of the Organization of Petroleum Exporting Countries (OPEC) 50th anniversary.

Jeff Broin, CEO of top ethanol company and prospective cellulosic biofuels producer Poet Inc., argued “the next 50 years don’t have to be the like the last 50.” With an expanded national commitment, “we can replace OPEC oil with American ethanol in 12 years,” Broin speculated.

During a Washington news conference, the ethanol group Growth Energy said it anticipated the U.S. Environmental Protection Agency (EPA) would approve its request to allow use of E15 — 15 percent ethanol gasoline — in conventional vehicles.

Illinois Farm Bureau Lead-

ers to Washington, meanwhile, lobbied bipartisan lawmakers to support extension of the ethanol blenders tax credit, which expires Dec. 31.

Growth Energy supports

FarmWeekNow.com We have audio comments from Tom Buis on the upcoming E15 decision at FarmWeekNow.com.

credit extension as well as new federal incentives for installation of retail “blender pumps” that offer consumers a range of ethanol fuels.

“Had we invested 50 years ago in the infrastructure and fuels necessary to make this country less dependent on foreign oil, we wouldn’t be in the economic shape we’re in today,” Growth Energy CEO Tom Buis told FarmWeek.

“We’re spending $300 billion (annually) ... overseas for our addiction to foreign oil. We

know we can do better.”

EPA Administrator Lisa Jackson earlier assured Growth Energy leaders “everything is still on track” toward a fall E15 decision, Buis said. Department of Energy (DOE) testing of E15 in 2007 and newer models should be complete this month, with tests on 2001 and later models expected in November, she said.

Jackson “spoke very positively about the role for corn ethanol,” Buis said. But EPA stands by its proposal for twotiered E15 approval for older and newer vehicles despite Growth Energy’s push to clear use in “all vehicles and all gasoline engines” (DOE reportedly is struggling to find older cars with low mileage that can undergo extensive E15 tests).

“There’s no reason we can’t raise that mixture immediately,” Rock Island Democrat Rep. Phil Hare told IFB leaders.

Meanwhile, Sen. Dick Durbin, a Springfield Democ-

Lawmakers: Compromise crucial to approval of U.S.-Korea FTA A Western Illinois congressman with dual ag and labor constituencies suggests he could support a U.S.-South Korea free trade agreement (FTA) with the proper “fix,” but stressed “I want the deal to be fair on both sides.”

Rock Island Democrat Rep. Phil Hare last week told Illinois Farm Bureau Leaders to Washington he was not opposed to expanded trade despite his continued reservations about existing bilateral trade agreements.

FTAs with Korea, Panama, and Colombia are still awaiting congressional action — President Obama said last week he would seek ratification of the Korea deal as soon as possible after resolving outstanding issues.

Noting the economic importance of U.S. exports, Hare argued Korea must be more accommodating on allowing entry of U.S. beef and automobiles.

U.S. Sen. Dick Durbin, a Springfield Democrat who also met with the IFB leaders, argued “the ag part is the easy part,” while South Korea’s purported reluctance to allow more U.S. vehicles in is the tougher nut to crack.

Part of the concern about reaching a solution, according to Hare, is that he and others have received “mixed signals” from the U.S.

trade representative regarding ongoing U.S.Korean negotiations.

Hare said he does not expect the FTA to yield a “car for car” exchange between the U.S. and Korea, but he argued Korea must lift import tariffs to at least level the playing field.

“They get that done, and I’ll vote for that deal,” he said. “There are a lot of members who are going to vote for this deal if (administration officials) get it fixed. If we put tariffs up, and we didn’t allow Korea to ship into this country, that would be my definition of protectionism.

“I don’t support blocking people from bringing products over here. That’s perfectly fine.

Colombia’s a classic case: Colombia’s going to take a lot more of our exports than we’re ever going to import from Colombia. There’s no question.”

Hare told Illinois producers he wants American agriculture and American manufacturing to be “on the front end” of future bilateral negotiations.

Further, he argued the president “has not yet really articulated his stance on trade” — a move Hare believes is crucial to breaking a partisan “logjam” that has delayed FTA approval. — Martin Ross

U.S. Rep. Jerr y Costello, a Belleville Democrat, discusses tax, biofuels, and other issues with Illinois Farm Bureau Leaders to Washington, from left, Tim Orlet of Mascoutah, Steve Koeller of Godfrey, and Mike Campbell of Edwardsville. At far right is Costello aide Melissa Connolly. (Photo by Ken Kashian)

rat, was confident Congress would approve tax extenders legislation that includes continuation of the 45-cent-pergallon ethanol tax credit.

Rep. Jerry Costello, a Belleville Democrat, said extenders legislation “has to be done,” and anticipated a bill could reach the House floor within the next two weeks.

While the ethanol credit has drawn fire from some urban and oil state lawmakers, Hare is seeing a “flip” in legislative

attitudes amid fallout from the recent Gulf oil spill.

Rep. Bill Foster, a Batavia Democrat who met with IFB leaders, supports “the whole range of ethanol policies,” from extension of the ethanol credit to federal loan guarantees and incentives for biofuels pipelines.

Foster stressed to FarmWeek the importance of assuring that as the tax credit eventually is phased out, “that doesn’t crash the industry.”

Study supports E15 use in older vehicles According to a new analysis by internationally recognized engineering firm Ricardo Inc., moving from a 10 percent ethanol blend to 15 percent (E15) will mean little, if any, change on the performance of older cars and light trucks manufactured between 1994 and 2000.

The study, which analyzed vehicles from six companies and representing 25 percent of light-duty vehicles on the road today, concluded “the adoption and use of E15 in the motor vehicle fleet from the studied model years should not adversely affect these vehicles or cause them to perform in a sub-optimal manner,” compared with performance using E10.

“This analysis provides conclusive evidence for the Environmental Protection Agency that there is no reason to limit the availability of E15 to newer vehicles only,” national Renewable Fuels Association (RFA) President Bob Dinneen maintained.

The study reviewed the effects of E15 use on “vintage” vehicle drivability, catalytic converter durability, and on-board diagnostic systems. It found minimal effects on engine components and materials, emission systems, or performance.

Slight mileage reductions have been associated with E10 or “flex-fuel” E85 use relative to pure gasoline. But Jeff Broin, CEO of Iowa-based ethanol producer Poet, noted “fantastic mileage” with mid-level ethanol blends, often similar to fuel containing no ethanol.

Meanwhile, higher ethanol blends “fit perfectly into the engines we’re starting to design,” he argued. Automotive technology provider Bosch has been awarded federal funding to improve efficiency in light-duty engines and is working with Ricardo to develop an optimized flex-fuel vehicle offering fuel economy closer to that provided by straight gasoline.

Broin noted increasingly smaller, more turbo-charged engines can benefit from ethanol’s higher octane content.

“It allows actually very good mileage in these engines,” he told FarmWeek. “Although there are slightly less BTUs (energy units) in ethanol, because it’s higher-octane, the computer in the car advances a spark, and you get back that efficiency you lose with the BTUs.” — Martin Ross

Taxes Continued from page 1 the true costs of farming. He recalled polling a group of innercity House members on the price of a new farm tractor. The urban lawmakers guessed no higher than $25,000, he said.

Durbin agreed a return to pre-2002 estate tax levels is “untenable,” calling a $1 million exemption “crazy.” However, he supports restoring the $3.5 million individual/$7 million-per-couple exemption in place when the estate tax “expired” last Dec. 31.

He said he feared a $5 million (individual) exemption would result long-term in “a dramatic loss of revenues.”

As a member of the president’s bipartisan National Commission on Fiscal Responsibility and Reform, Durbin maintained there are only two ways to reduce a nearly $13 trillion federal deficit — “cut spending or raise taxes.”

He argued Senate Minority Leader Mitch McConnell’s (R-Ky.) proposal to permanently extend Bush-era tax cuts would cost the Treasury nearly $4 trillion over a 10-year period.

“The notion that we could eliminate the estate tax and ignore the deficit consequences is as crazy as saying we could eliminate the income tax,” Durbin told the FB leaders.

FarmWeek Page 5 Monday, September 20, 2010

FARM PROGRAMS

Emergency loans available for some farmers USDA Farm Service Agency (FSA) State Executive Director Scherrie Giamanco announced last week that farmers in 55 Illinois counties are eligible to apply for lowinterest emergency loans due to physical and production losses caused by excessive rain and flooding that occurred since April 1.

In addition, with a qualifying loss, this designation makes producers eligible for the Supplemental Revenue

Assistance Payments (SURE) program.

Emergency loan applications are available and must be submitted through the local FSA county office from any applicant who qualifies for a physical or production loss (at least a 30 percent reduction from normal) in a single enterprise from this disaster in these counties.

To qualify for a loan, an applicant must be an established family farm operator;

provide evidence of having suffered a qualifying physical or production loss; and be unable to obtain suitable credit from a source other than FSA. The low-interest loans may cover up to 100 percent of their actual production or physical losses, to a maximum amount of $500,000.

The loan applicants must show ability to repay the loan and the loan must be adequately secured.

FSA loans for production losses may be used to buy feed, seed, fertilizer, livestock, or to refinance certain debts.

FSA loans for physical losses may be used to repair or replace the property that was damaged or lost.

The current interest rate for the loans is 3.75 percent. The deadline for submitting applications is May 9, 2011.

In addition to the Emergency Loan Program, FSA has other Direct and Guaranteed Farm Operating and Farm Ownership Loan programs, which can be considered in assisting farmers to recover from their losses.

Additional information about FSA farm loan programs is available at {www.fsa.usda.gov/dafl}.

In addition to farmers in the 55 designated disaster counties, those in 37 contiguous counties also may be eligible for assistance.

CRP general sign-up nets 4.3 million acres

BY DANIEL GRANT FarmWeek

USDA as of last week had accepted a total of 4.3 million acres offered by landowners under the Conservation Reserve Program (CRP) general sign-up.

The most recent opportunity to enroll ground in CRP — Aug. 2 through 27 — was the first general sign-up for the program since spring 2006. “Interest in this open enrollment was high,� said Tom Vilsack, ag secretary. “I’m pleased that producers and landowners across the nation continue to realize the environmental of enrolling ‘ I ’ m p l e a s e d t h a t benefits land in the CRP.� producers and USDA received more landowners contin- than 50,000 offers that u e t o r e a l i z e t h e totaled more than 4.8 million acres. environmental benHowever, there is a 32e f i t s o f e n r o l l i n g million-acre statutory cap on CRP, so current land in CRP.’ enrollment, which totals 31.2 million acres, leaves — Tom Vilsack room to continue enrollAg Secretary ment in the Conservation Reserve Enhancement Program, continuous CRP sign-up, and other CRP initiatives through fiscal year 2011.

Farmers and ranchers with acreage enrolled in CRP plant grasses and trees in crop fields and along streams or rivers to reduce soil erosion and keep nutrients from washing into waterways.

The average annual rental rate for the recent CRP sign-up was about $46 per acre.

USDA selected offers for CRP enrollment based on an Environmental Benefits Index that consists of wildlife enhancement, water quality, soil erosion, enduring benefits, and air quality.

Disaster counties shown in red

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FarmWeek Page 6 Monday, September 20, 2010

CROPWATCHERS Bernie Walsh, Durand, Winnebago County: We had half an inch of rain on Thursday morning, and that was the first time in more than a month that we had more than a tenth of an inch at any one time. That should settle the dust and knock some more leaves off the bean plants.

We heard of some beans being combined five miles north of us last week that were close to 60 bushels per acre and 12 percent moisture. We started combining our beans Friday. More on that next week.

The corn is losing moisture very fast, but most of it is still in the low- to mid-20s, according to neighbors who have started to harvest their corn. Have a safe week.

Pete Tekampe, Grayslake, Lake County: Got a half inch of rain on Thursday. Corn and beans are maturing rather early this year. Heard some beans were cut on the north end of the county Wednesday with moisture at 12 percent. Mine are still a week to 10 days off. Beans in the hollows are still a little yellow and holding their leaves. Not much green left on most of the corn, but none has been picked in the county yet. They are calling for more moisture. I hope they are wrong.

Leroy Getz, Savanna, Carroll County: Another week with no measurable rain. On Sept.

12, a small storm moved through Jo Daviess County and parts of northern Carroll County with 80 mph winds but very little rain. Stalk quality is poor in some corn, and it is going down.

Combines are running and trying to salvage what they can. Moisture levels are in the 20s to high teens. The yields seem to be respectable in the 180s up to 230 bushels per acre. No soybeans have been harvested yet. The dry weather has been good for some fourth cutting of hay.

Ron Frieders, Waterman, DeKalb County: The 2010 harvest is off and running. Early varieties of soybeans have been yielding average to good, except in areas of disease where yields plummet. Lots of farmers are opening up corn fields or combining full swings. Moisture levels seem very dry for this time of year.

Some even in the teens. Yield reports have been extremely variable. Stay safe this fall.

Ken Reinhardt, Seaton, Mercer County: We missed several chances of rain last week. Corn yields are variable, but corn-oncorn is much closer to 100 bushels per acre (bpa) than 200.

Lots of reports of 100 to 120 bpa field averages. Bean yields so far are more normal, 40 to 60 in the few early ones that have been cut.

Ron Moore, Roseville, Warren County: We missed any rain last week. Corn harvest is progressing nicely. We have done about 20 percent. The moisture has been as low as 16 percent on some varieties. Yields have been somewhat disappointing and are below the five-year average. There are some excellent yields, but the areas that had water standing for a long time in May and June are pulling the average down. I have not seen any soybeans harvested yet in this area. We should start in 10 days or so.

Ron Haase, Gilman, Iroquois County: Harvest continues at a moderate pace. The drier cornfields and mature soybean fields are being harvested, but there are a lot of acres that still need to dry down and mature before being harvested. I have heard corn yield reports ranging from 60 to 200 bushels per acre. On the corn being harvested, I have heard the moisture ranging from 12 to 21 percent.

Overall, the yields are quite a bit lower than in 2009. The reports I have heard so far on soybean yields are that they are disappointing and lower than in 2009. We harvested corn this past week and have 12 percent harvested. But we are waiting on the other acres to dry down more before we take out the remaining fields. Local closing prices for Sept. 16 were $4.54 for nearby corn, $4.79 for January corn, $10.07 for nearby soybeans, and $10.31 for January soybeans.

Jacob Streitmatter, Princeville, Peoria County: As time goes on, there is more and more corn being mowed off. A few soybean fields have been harvested.

The yields on corn are all over the board. Some good-looking corn is not yielding so hot, and some short, crappy-looking corn also not yielding so hot. There are, of course, the tops of hills pushing bumper yields once again.

Mark Kerber, Chatsworth, Livingston County: As I write this report from the auger cart, the crop is being harvested at a rapid rate. In general, corn yields are lower than expected and soybeans are better than expected. The disk-sharpening man has made his rounds, keeping fall tillage tools sharp. While working late in the evening in the combine cab, have you ever found old donuts or cookies you had forgotten about?. It is like finding a treasure. Markets are still on the rise. Will they keep going or fall back like last year?

Good prices for grain off the combine.

Brian Schaumburg, Chenoa, McLean County: Finishing corn harvest on Sept. 17 cannot be a good thing, but it is amazing what you can accomplish with quality help and equipment.

Our best and worst corn was continuous corn all within one mile of each other. Go figure.

Soybean yields are in the mid 50s to mid 70s. Very low moisture on both crops. Corn, $4.58, January corn, $4.73, fall 2011 corn, $4.22; beans, $9.99, January beans, $10.09, fall 2011 beans, $9.77; wheat, $6.32.

Steve Ayers, Champaign, Champaign County: The area corn harvest, according to Premier Co-op, is 60 percent done with average moisture at 15.5 percent and beans are 27 percent done with 9 to 11 percent moisture. Corn yields range from 80 to 210 bushels per acre (bpa) and most beans are in the 60-bushel range with some as low as 40. We started corn Sept. 13 and our first 140 acres went 180 bpa at 15 percent. Our beans are not ready yet, so we will continue corn until late next week. Wednesday night we were expecting a half to an inch of rain but received a whopping .06 of an inch, so combines continued rolling Thursday. Let’s be careful out there!

Wilfred Dittmer, Quincy, Adams County: A nice fall morning here Friday with a temperature reading of 50 degrees and several combines rolling in the area cornfields. What a difference a week makes in the looks of the fields. What yields I have heard of are all the way up the scale from low to fairly good with good-sized ears and small ones. Early soybeans turned rather fast this last week and later ones are still basically pretty green. No soybeans have been harvested yet nearby.

Rainfall since last report here was 1.5 inches of rain on Sept. 10. Have a safe week!

David Schaal, St. Peter, Fayette County: Corn harvest has progressed rapidly. Some farmers are complete with their corn; others were hoping to finish by the weekend. Moisture on the corn has really come down from the previous week. Some are shelling corn at 14.5 to 15.5 percent. A lot different than last year when we were picking five weeks later. Some producers are beginning to harvest soybeans and I’m hearing yields are pretty decent.

Everyone stay safe, and happy harvesting.

Dan Meinhart, Montrose, Jasper County: It was a very pleasant fall week. Rain was in the area Sept. 10, leaving a little more than 2 inches, which was beneficial to the late-planted corn and the beans. Harvesting of the April-planted corn is in full swing with moisture running in the teens. The May- and Juneplanted corn is still carrying excessive moisture. The early-planted beans are turning yellow. Soybean harvest is a couple weeks off. Another pleasant fall week is expected with no rain in the forecast.

Bob Biehl, Belleville, St. Clair County: Last weekend (Sept. 11-12), we received about 2 inches of rainfall, but by Sept.

13 corn harvest continued.

Everyone is really pleased with the moisture levels. They range from 14 to 17 percent. The propane people are going to struggle for business this year.

Yields vary substantially in the county. I’ve heard corn down to 80 to 90 bushels per acre in areas that couldn’t buy rain all the way up to 200-plus bushels. Most of the corn in our area has been between 165 and 190 bushels per acre. I have seen only one bean field in the area harvested. Looks like it will be the end of the week before any of our beans will be ready to cut.

Carrie Winkelmann, Menard County: Corn harvest in our area got under way Sept. 7. We have been in the field every day since, except for the weekend of Sept. 11 and 12 because of 1 inch of rain received Sept. 10. Corn yields are lower than expected with moisture running between 14.5 and 16 percent. We have a slight diplodia problem, with an average of 4 percent damage. Nitrogen loss looks to be the main cause of poor yields from side-by-side testing of fall-applied vs. spring-applied nitrogen. Our early Group 4 beans look to make it to harvest and beat the frost. Bean harvest is under way in the area, but I haven’t heard any news on yields or quality. Mini pumpkin harvest is under way on our farm. Insect pressure and wet conditions have caused quality problems in the pumpkin patch.

Tom Ritter, Blue Mound, Macon County: Corn is disappearing at a very rapid rate.

Probably more than 70 percent has been harvested at this point.

Yields have been all over the board with corn after beans and corn on rolling ground yielding far better than low-lying areas or corn following corn. Soybean harvest is just barely getting started — definitely less than 10 percent of the beans have been harvested at this point. Many farmers will be making the switch to beans the first of this week or as they complete their corn harvest. I have heard no reports on bean yields, but early indications seem to put them at very excellent in yield.

Todd Easton, Charleston, Coles County: Harvest continues at a rapid pace with almost no slowdown from the two weather events last week. Standing cornfields are getting harder to find, and in another week they will be very scarce. Soybean fields also are disappearing at a steady pace with most yields running in the 50- to 60-bushel range so far. I am keeping my fingers crossed that the later beans will be able to hold these levels.

Rick Corners, Centralia, Jefferson County: Corn harvest clicks right along with no weather delays. Most probably will finish soon. A few April beans have been cut. Most of the later-planted Group 3 beans will be ready in a week or 10 days. The water hemp plants are still not ripe.

Some would make nice Christmas trees.

Doug Uphoff, Shelbyville, Shelby County: This harvest is going to be a record, and it’s not going to be in bushels per acre.

It’s going to be on acres covered, because we probably are going to be done with harvest around in my northern part of the county in September. There have been a few beans harvested, with yields at 50 to 60 bushels per acre. Corn is still ranging anywhere from 70 bushels per acre up to 175. I have not heard of any 200-bushel average cornfields. There could be some in the southwestern part of the county, but those will be very spotty. There is a lot of activity going on — fertilization, lime being spread, and chisel plowing. Nearby corn on the board hit $5 last week. Prices at the elevator: $4.70 for cash corn, $10.16 cash beans; $4.90 for January corn and $10.48 for January soybeans. That is the Decatur price in the elevator. Field prices: $2.61 for farm diesel, $3.09 for truck diesel, $2.67 for ethanol. I know everyone is tired since we haven’t had many rain events, so be very careful.

Page 7 Monday, September 20, 2010 FarmWeek

CROPWATCHERS Dean Shields, Murphysboro, Jackson County: We had rain of 1.75 inches in some spots during the weekend of Sept. 1112. Later, another shower came through, and we got a couple of tenths of an inch from it. The corn ground, has been picked but the ground is a little damp to be working right now. Most people I talked to have been disappointed with their corn yields. We’re talking maybe 20 percent less than normal. Nobody seems to be bragging about good corn this year. The bean crop is coming on, and a lot of the leaves are dropping. There’s been a patch or two of beans harvested, but not much. I look for this week to start up pretty good on the beans. Milo is looking good. It’s got nice big heads, and I think it’s going to do OK. I think wheat acres are going to be up to near normal this year, if not a little more. Have a safe harvest and take care.

Ken Taake, Ullin, Pulaski County: After the 3 inches of rain that I reported last week on Sept. 9, we received another two inches on Sept. 10. It seems like that’s more rain than we’ve had all summer. It kept us out of the field over the weekend, but we did get back in the field on Monday (Sept. 13). We’ve been running and shelling corn since then. We’re down to less than 200 acres of corn to go.

Alfatoxin continues to be a problem in corn.

We’ve not had any rejected, but I know considerable amounts are still getting rejected at the local elevator. There are quite a few beans in the area being cut, but ours aren’t quite ready. We’ll probably start harvesting soybeans this week. I really haven’t heard anything on soybean yields. Please remember to be careful during this busy season.

Kevin Raber, Browns, Wabash County: The rain I was talking about in my last report didn’t amount to much. I probably had 0.1 of an inch of rain or less.

Corn harvest probably will be done in a week or less. Yields are about 15 to 20 bushels less than I expected in most fields. I haven’t cut any beans yet, but I expect the extended dry period will cut their yields, also.

Reports received Friday morning.

Expanded crop information available at FarmWeekNow.com

Corn harvest pace brisk; bean harvest under way

BY DANIEL GRANT FarmWeek

A large number of farmers who last year were unable to start corn harvest in September are on pace this year to finish the job before Oct. 1.

Corn harvest in Illinois as of the first of last week was 18 percent complete, three times faster than the five-year average pace of 6 percent.

Most farmers last week dodged a few rain drops and continued to make significant

progress on corn harvest while many started cutting soybeans.

“Corn is disappearing at a very rapid rate,” said Tom Ritter, a FarmWeek Cropwatcher from Macon County.

“Probably more than 70 percent of the corn has been harvested.”

Last year just 1 percent of the corn crop statewide was in the bin as of Sept. 13, according to the National Agricultural Statistics Service

Illinois field office.

The portion of the corn crop that was mature as the first of last week was 79 percent compared to just 6 percent at the same time a year ago.

Corn harvest “is feeling a little more normal, outside of the (disappointing) yields,” said Trevor Toland, a farmer from McDonough County.

“The pace really picked up” last week, he said.

Farmers are off to an early

start on soybean harvest as well. Three percent of the soybean crop was harvested as of the first of last week compared to the five-year average of 1 percent.

“A few soybeans have been harvested,” said Jacob Streitmatter, a Cropwatcher from Peoria County, “The yields on corn are all over the board.”

Mark Kerber, a Cropwatcher from Livingston County, also found extreme variability in yields so far this harvest.

“In general, corn yields are lower than expected and soybeans are better than expected,” he said.

Sorghum harvest also is off to a quick start.

Fifteen percent of the crop was harvested as of the first of last week compared to the five-year average of 4 percent.

The rapid harvest pace should continue this week as the forecast is for mostly clear skies with highs in the 80s.

Maintenance can minimize field fires

Pest caterpillars refuse to give up

BY KEVIN BLACK

This season, we saw an unusual number of caterpillar pests affecting corn, soybeans, and alfalfa.

In corn, we had early development and ear feeding from corn earworms.

Fall armyworms and Kevin Black western bean cutworms also did their share of damage in some areas.

In soybeans, we had green cloverworms, soybean loopers, cabbage loopers, garden or alfalfa webworms, celery leaftiers, yellow striped armyworms, imported cabbageworms, woolly bear caterpillars, and alfalfa caterpillars.

In alfalfa, we encountered garden or alfalfa webworms, celery leaftiers, and

alfalfa caterpillars.

We suspect that some of this year’s caterpillar activity was a result of a buildup that began last year. For migratory insects, such as the corn earworm (soybean podworm), the early onset of warm weather allowed early buildup of the pests this season, even allowing an extra seasonal generation or two.

This early start also allowed the caterpillars to get ahead of their natural enemies.

It would be nice to say that we are now past the seasonal problems from the caterpillar pests, but this is not so.

Soybean podworm damage recently has been reported from late-maturing soybeans in Western Illinois.

(Podworms, by the way, are the same things as corn earworms, only they feed on soybean pods.)

Missouri has also reported

severe damage to soybeans from this pest.

With early corn maturity this year, the earworm moths are attracted to the last green crops available. In our area, this means late-maturing soybeans.

Fall armyworms recently were reported to be devastating some Southwestern Illinois alfalfa fields, essentially stripping all leaves from the field.

As Yogi Berra is quoted as saying, “It ain’t over ‘til it’s over.”

As long as you have green crops, keep watching for lateseason caterpillar activity.

If insecticide application is necessary, be sure to heed the labeled preharvest intervals for these products.

Kevin Black is GROWMARK’s insect and plant disease technical manager. His e-mail address is kblack@growmark.com.

Farmers can greatly reduce their risk of field fires with regular maintenance of combines and other equipment used to harvest crops, according to Gail Deboy, a Purdue University Extension farm safety expert.

Combines are especially vulnerable to fires because of the many hours they operate at a time and the dry crop fodder that can collect on them, Deboy said.

“During hot, dry weather, very dry fodder provides an excellent source to fuel a flame whenever a fire is ignited,” he said.

This year’s early planting resulted in early maturing of crops and unusually dry foliage during harvest.

Much of what causes machinery fires are overheated bearings and belts, exhaust components, clutches and brakes, electrical malfunctions, and sparks caused by damaged or improperly adjusted components, and foreign material entering the processing path, Deboy said.

Drive components clogged with crop material also can get

hot enough to catch fire.

“As combines have become larger, they carry much larger quantities of fuel, lubricants, and hydraulic oil,” Deboy said.

“Even small leaks in any of the systems using flammable liquids can result in a large fire in seconds.”

Deboy’s tips for minimizing the potential for field fires include: • Perform regular maintenance on machinery. Keep combines clean, free of crop residue, and free of fuel and oil leaks. Service equipment at the end of the day, rather than at the beginning, in order to detect overheating components or smoldering material that could burst into flames overnight.

• Maintain the electrical system. Keep a close eye on components that draw heavy electrical loads, such as starter motors, remote actuators, and heating and cooling systems.

Consider fuses that blow regularly a warning sign that a circuit is overheating.

• Install portable fire extinguishers on every large piece of machinery.

U of I Extension launches equine manure and composting project with two workshops University of Illinois Extension will host two composting workshops Monday, Oct. 4.

The first one is for commercial landscapers, nurseries, municipalities, and individual composters interested in using horse manure.

The second is for horse

owners and others in the equine industry.

The workshops are part of the Changing Manure Streams program, a joint effort between the U of I and University of Wisconsin Extension to encourage the use of composted manure.

“The goal is to see if we can divert horse manure in Northeast Illinois and southeast Wisconsin from going to the landfill,” said Randy Fonner, U of I Extension specialist.

The first workshop will take place from 9 a.m. to noon Oct. 4 at the Hooved Animal

Humane Society in Woodstock. The cost is $10 per person. For more information or to register, call 800-345-6087.

Information also is online at {www.manurecentral.illinois.edu}.

The second workshop for horse and small livestock owners will be from 1 to 4 p.m. at

the same location. The cost is $25 for adults and $5 for children younger than 18.

The fee will increase to $35 for adults after Sept. 27.

To register, go online to {web.extension.illinois.edu/sta te/calendar_event.cfm?EventID=56518.}

FarmWeek Page 8 Monday, September 20, 2010

PRODUCTION

Higher feed prices a concern for livestock producers

BY DANIEL GRANT FarmWeek

Not all farmers were overjoyed last week when corn futures cracked $5 per bushel.

Some livestock producers are concerned higher feed costs could erode their profit margins. “It’s a concern, but it’s not something we haven’t had to deal with before,� said Trevor Toland, a beef producer from Macomb and president of the Illinois Beef Association (IBA).

Crop prices have rallied in recent months due in part to crop losses in other parts of the world, particularly Russia where a severe drought diminished wheat production.

The grain markets picked up even more steam last week after USDA in its Sept. 10 crop production report cut the estimated corn yield nationwide by 2.5 bushels per acre compared to its August estimate.

USDA subsequently raised its average corn price estimate by 70 cents to a range of $4 to $4.80 per bushel.

“While (livestock) producers have a bit of margin to work with at present, these

even, the cattle and hog markets also have been bullish in recent weeks.

‘It’s a concern, but it’s not something we haven’t had to deal with before.’ — Trevor Toland Illinois Beef Association president

continuing increases in corn prices are whittling away from them pretty rapidly,� authors of the CME Group Daily Livestock Report stated in their Sept. 13 newsletter.

The projected margins for hog producers in 2011, for instance, have declined from $25 per head in June to a current estimate of $7 per head, according to the report.

The good news for livestock producers is that, unlike the feed cost run-up in 2008/09 when livestock prices were below break-

Cattle prices earlier this month were above $100 per hundredweight and last week still were in the high $90s.

Meanwhile, pork bellies last week reached an all-time high of $1.55 per pound. “It makes the break-even a lot better,� Toland said. “I think we (cattle producers) are feeling if we can weather the recession, we’ll be feeling pretty stable. Every indication is we’ll continue to grow exports.�

The strength in livestock prices generally is attributed to an uptick in demand and tight supplies. The yearly hog

slaughter pace as of last week was down 4.4 percent compared to last year.

Many Illinois livestock producers are in better position to handle higher grain prices than their counterparts in other states.

A large number of livestock producers in the state grow corn, so when grain prices jump, they can shift feed rations in order to sell more corn on the open market rather than feed it. “When you operate both enterprises (crops and live-

stock), it results in some choices,� Toland said.

Many Illinois livestock producers also have access to distillers dried grains (DDGs) to replace corn in feed rations.

Dave Seibert, animal systems educator at the University of Illinois Extension East Peoria Center, recently updated the list of co-products available in the state.

The list is available online at {http://web.extension.uiuc.ed u/eastpeoriacenter/anisci.html } or by visiting the IBA website {www.illinoisbeef.com}.

Remember four Rs for fall fertilizer Corn harvest is advancing rapidly, but that doesn’t mean fall fertilizer application should follow suit.

The Illinois Fertilizer and Chemical Association (IFCA) asks farmers to think four Rs when it comes to applying fertilizer: right source, right time, right place, and right rate.

IFCA and the University of Illinois College of Agricultural, Consumer, and Environmental Sciences offered the following reminders: Don’t apply anhydrous ammonia until soil temperatures at a 4-inch depth have reached and will remain below 60 degrees Fahrenheit if a nitrification inhibitor is included.

If no inhibitor is included, don’t apply anhydrous until soil temperatures reach and will remain below 50 degrees.

Currently, soil temperatures in Illinois are in the high 60s with some in the 70s. Go online to {www.ifca.com} for daily soil temperatures.

Do not apply nitrogen before the third week of October in Central Illinois or the second week of October in Northern Illinois, even if air temperatures are getting cooler.

No fall nitrogen should be applied on any field south of a line extending from about Jerseyville to West Union.

If applying animal manure, make sure it is incorporated into the soil and follow the time of application guidelines suggested for commercial nitrogen management.

Do not apply nitrogen to increase crop residue breakdown.

Survey: Grain elevators expand to meet new growing demand

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A majority of Illinois’ country grain elevators have been increasing storage capacity to meet the growing demand for space to store corn and soybeans, according to an industry survey.

Early in 2010, researchers in Illinois State University’s Department of Agriculture, supported by the Grain and Feed Association of Illinois (GFAI), surveyed 135 country grain elevator managers to determine changes in their business structure and capacity as well as the types of crops that elevators were receiving from their farmer customers.

The results of the 2010 survey were compared to a similar study conducted by the same researchers in 2007.

As with most sectors of the agricultural economy, the country grain elevator industry has experienced consolidation and increased operating scale over the past four years.

The number of firms (members of GFAI) in the industry

declined from 250 in 2007 to 227 in 2010, a decrease of about 10 percent. During the same period, the average storage capacity of elevators increased by more than 500,000 bushels to 4.8 million bushels of storage per company.

Comparing the responses from the same elevators (2010 vs. 2007), 81 percent increased their storage capacity by an average of 29 percent. Seventy-five percent of the elevators that expanded their capacity did so by constructing new facilities, 20 percent increased capacity through a combination of new construction and acquisition of existing facilities, and 5 percent increased capacity by acquiring existing facilities.

Operating multiple facilities under a central management has become common in the grain industry, with 69 percent of the elevator managers responding to the survey indicating their firm operated out of multiple locations.

FarmWeek Page 9 Monday, September 20, 2010

FARM SAFETY

On-road ATV use legal but requires caution More Illinois farmers may take to rural roads on their allterrain vehicles (ATVs), thanks to reinstatement of an Illinois law this summer.

While that may provide an additional level of harvest efficiency for many producers, it also adds one more safety concern for farmers and their families during a particularly hectic time.

“ATVs: Work Smart. Ride Safe” is the National Safety Council’s theme for National Farm Safety and Health Week, which continues through Saturday.

Farmers with a valid driver’s license again can legally operate ATVs and utility-terrain vehicles

(UTVs) on county and township roads for farming purposes, under legislation signed recently

by Gov. Pat Quinn.

Country Financial commercial agribusiness loss control representative Eric Vanasdale noted ATVs are important tools for farmers who use the compact vehicles to travel between farms and check on crops, fences, and livestock.

Fifty Illinois residents died as the result of ATVrelated incidents from 2006-08, according to the Consumer Product Safety Commission. Of the 204 ATV deaths that occurred between 1990 and 2008, 94 percent

ATV safety No. 1 for cattleman Carroll County farmer Lyle Miller is a second-generation cattleman who was among the first to adopt the use of all-terrain vehicles (ATVs) in the early 1980s.

That’s particularly noteworthy achievement, as Miller was only about 8 years old at the time.

Since then, he has made farm ATV safety paramount not only because he cares about his family’s safety, but also because he knows how dangerous ATVs can be for young riders.

“Back when I first got them and when I was a teenager, I used them to do chores, but mostly I did a lot of playing on them,” Miller related. “We’d get to horsing around on them and we’d get to racing.”

While racing with his brother-in-law as a teenager, Miller rode his ATV over a wet hay field at a high speed. It flipped and landed on him but he was not injured. That incident nonetheless taught him an important lesson.

Miller’s children, 10-year-old Austin and 7-year-old Alyssa, use ATVs weekly. Operating four ATVs on three rented pastures among about 90 cattle, the Millers know that working smart and riding safe is essential.

Here are some tips for safe ATV use: • Always wear a helmet. In fact, the national ATV Safety Institute recommends use of a U.S. Department of Transportation-compliant helmet, goggles, long sleeves, long pants, overthe-ankle boots, and gloves.

An ordinary bike helmet is inadequate, University of Illinois ag safety specialist Chip Petrea stressed: “You’re talking about more speed on rough terrain.”

• Do not allow passengers on a single-rider ATV or more than two passengers on a two-rider vehicle. Passengers, as well, should wear helmets, Petrea said.

• Make sure the ATV is age-appropriate. Nearly 90 percent of youth ATV-related injuries reportedly occur when a juvenile is operating an adult-sized ATV. Miller and wife, Codee, bought ATVs for their children that were approved for riders 6 years and older, with dimensions and control mechanisms that were age- and size-appropriate.

Both Austin and Alyssa’s ATVs are rated for younger drivers, meaning they operate at far slower speeds.

• Do not operate an ATV until properly trained. For information on a free ATV “E-course” for children, teens, or adults, visit {www.atvsafety.org} on the web.

• Follow safety instructions provided with ATVs. Austin and Alyssa watched the riding DVD that accompanied their vehicles. Neither may use their ATV without adult supervision.

• Be aware of surroundings and remain alert while operating ATVs. • No horseplay. “As with any privilege, it can be taken away if you don’t use it properly,” Miller said.

Typically, the Millers use their ATVs as alternative vehicles for fetching supplies, checking fences, and tracking escaped cattle.

“There’s not a steel frame around you protecting you, and safety is a No. 1 issue with us,” Miller stressed. “If we respect the ATVs just like we respect the cattle and our tools and equipment, then everything works out well.”

occurred off the farm.

A recent Journal of Rural Health article concluded Cen-

tral Illinois children were more likely than the national average to be injured in ATV accidents.

“Now that farmers can operate their ATVs on roadways again, rural motorists and farmers will need to watch for each other more than ever,” Vanasdale stressed.

Vanasdale urged farmers to regularly check ATVs to make

sure brakes, tires, steering, and rearview mirrors are in good working order before heading out on rural roads.

ATVs used on roadways should carry red, reflective warning devices on the front and rear, as well as a slow- moving-vehicle emblem on the rear of the vehicle.

ATVs also should be equipped with headlights and tail lamps. Vanasdale suggests farmers perform weekly safety inspections to ensure brake lights, turn signals, headlights, and tail lamps are functioning properly.

Age is a key factor in onfarm or off-road cross-country ATV operation — not only the age of the operator but the model of ATV used by juvenile operators. The national All-Terrain Vehicle Association emphasizes the need to

provide an “appropriately sized” vehicle for younger drivers.

“ATVs are not toys,” Vanasdale said. “Children are not allowed to ride them on rural roads. Farmers should supervise riders younger than 16 when they are using ATVs on the farm. All riders should always wear a helmet.”

Reinstatement of ATV operation on rural roadways offers an opportunity for farmers to review liability and property insurance coverage, he noted.

Farmers typically can insure ATVs for farm use under an auto or farm policy, but if ATVs are driven on rural roads, owners need to obtain a special endorsement to cover off-premise liability.

Coverage also is available for ATVs used for non-farm activities.

Grain can be a powerful, deadly force in the fall

BY MARTIN ROSS FarmWeek

bins, be sure any unloading auger is off. In the fall, we would want people to shut off stirators before they even go up to look.

“I recognize that’s not a popular option, because part of the reason they go up is to see that things are running OK. If they going to go

Grain is the coin of the Illinois producer’s realm and the focus of frenetic fall activity.

Grain also can be a powerful and potentially dangerous force with which to be reckoned, as illustrated by a recent rash of grain bin fatalities and September grain explosions at Central ‘If someone’s going to go up and look in and Western Illinois elevators. the bins, be sure any unloading auger is According to a Country Financial survey, 21 farm-relatoff. In the fall, we would want people to ed deaths occurred in Illinois shut off stirators before they even go up during the period from July 1, to look.’

2009, through June 2010 — the lowest number in six years and 12 fewer deaths than in 2008— Chip Petrea 09, when 33 farm-related University of Illinois farm safety specialist deaths were reported.

However, deaths involving grain bins accounted for 19 percent of Illinois farm fatalities over the up with them running, they should have somepast year vs. 12 percent during the 2008-09 one else there to keep in contact with.” period.

Ideally, a bin should be topped with a guard The grain bin fatalities reveal a guide to the rail, and many modern bins are equipped with a range of risks involving storage facilities. Two caged vertical ladder to help prevent falls or a teens — a 19 year old and a 14 year old — died curving stairway that reduces hazards associated following a late July grain entrapment at Mt. with vertical ascent.

Carroll. A 63-year-old producer fell from a If producers must enter a bin, the top should McLean County bin in June. be opened for air circulation, at least one comAccording to local police officials, a 37-year- panion should remain in verbal contact from old rural Rochelle man who perished in a Lee outside the bin, and power to grain equipment County bin in March wasn’t wearing a safety should be locked out. harness and was walking alone inside the bin Further, Petrea stressed producers should lowaround a large mound of corn. er grain augers when moving from bin to bin to Stress and routine based on on-farm familavoid potentially lethal contact with power lines. iarity can heighten risks even for experienced, The bin is not the only key danger point durable-bodied grain handlers, University of Illiing harvest. Petrea urges producers to keep chilnois ag safety specialist Chip Petrea told dren — especially those tall enough to climb FarmWeek. but young enough for possible horseplay — “There’s always the potential for taking a away from grain wagons. shortcut across (power takeoff unit) drive lines, The danger of entrapment and suffocation is particularly with augers that use a tractor to as great for kids playing in the wagon as it is for drive them,” Petrea noted. an unprotected, unaccompanied adult in the “If someone’s going to go up and look in the bin, he said.

FarmWeek Page 10 Monday, September 20, 2010

STATE

New sector caucuses elect C-FAR leaders The Illinois Council on Food and Agricultural Research (C-FAR) recently elected new officers under the new structure and operations approved in June.

Four new sector caucuses elected their respective representatives. They were: corn sector chairman, Leon Corzine of Assumption, representing the Illinois Corn Marketing Board, and the vice

chairman, Harold Reetz of Monticello, representing the Illinois Fertilizer and Chemical Association.

The soybean sector chairman is Ross Prough of Greenfield, representing the Illinois Soybean Association (ISA), and the vice chairman is Larry Martin of Highland, representing the Illinois Farm Bureau.

The pork-beef-dairy sector chairman is Jim Fraley of

Bloomington, representing Illinois Milk Producers Association, and the vice chairman is Steve Wiyatt of Effingham, representing the Southern Illinois University College of Ag Sciences Alumni Society.

The specialty crops-wheatallied industries sector chairman is Charles Treser of Belleville, representing the Illinois State Grange, and the vice chairman is Nathan

Illinois starts high-speed rail project Illinois last week ceremonially kicked off a $98-million project to upgrade 90 miles of Union Pacific Railroad track between Alton and Lincoln for high-speed rail service. The project represents the first high-speed rail upgrades in the nation, according to Gov. Pat Quinn.

The project is funded with federal stimulus dollars.

“This project is essential to strengthening Illinois’ economic recovery, creating jobs, and developing long-term investment in Illinois,” Quinn said at the ceremony marking the start.

Illinois’ high-speed rail signature route from Chicago to St. Louis received a total of $1.1 billion for corridor improvements.

Construction on the Alton-to-Springfield segment actually began in the Alton area earlier this month. Next, workers will concentrate on the track between Springfield and Lincoln.

A study is being conducted to determine the best route for high-speed rail traffic through Springfield. Weather permitting, the goal is to complete the initial segment of track upgrades by late December.

Matusheski of Glenview, representing the Institute of Food Technologists/Chicago.

“It’s a good blend of leadership representing a variety of disciplines and interests,” said Jim Charlesworth, the outgoing C-FAR chairman and a GROWMARK executive.

Each of the four sectors also elected a new C-FAR board of directors.

Those elected to the board and their affiliations are: Susan Adams, Atlanta, the Illinois Corn Growers Association; Howard Brown, Bloomington, GROWMARK; Dan Farney, Morton, ISA; Bill Fisher, Urbana, Illinois Pork Produc-

ers Association; Diane Handley, Bloomington, Illinois Wheat Association; Randy Pearson, Bloomington, Illinois Seed Trade Association; Ross Prough, Greenfield, ISA; Blake Roderick, Pittsfield, Orr Ag Research Center; Rod Stoll, Mahomet, Farm Credit; and Tom Toohill, Mt. Pulaski, SIU College Ag Sciences Alumni Society.

Chuck Cawley of Rochelle was appointed by IFB to a one-year term.

Three officers were elected by the new board of directors.

They are: Cawley, chairman; Adams, chairman elect; and Roderick, secretary/treasurer.

IDOA receives $1.24 million for feed inspections The Illinois Department of Agriculture (IDOA) will receive $1.24 million in federal funding to conduct feed inspections to prevent bovine spongiform encephalopathy (BSE).

The U.S. Food and Drug Administration (FDA) and IDOA signed a five-year agreement to ensure that cattle feed produced and used in Illinois does not contain ingredients that could transmit BSE. Illinois was one of 12 states to receive federal funding as part of the cooperative agreement.

“For nearly 20 years, our inspectors have been contracted by the FDA to inspect feed mills and feed manufacturing plants across the state,” IDOA Director Tom Jennings said.

“But this agreement will allow us to maintain our expanded on-farm surveillance efforts,” Jennings added. “We believe these inspections provide additional assurance to consumers and our agricultural trading partners that Illinois beef is safe to eat.”

Feed contaminated with tissue from the nervous system of infected cattle is believed to spread BSE, and FDA has prohibited the use of ruminant protein in feed for cattle and other ruminant animals since 1997. IDOA enforces the prohibition through regular feed inspections.

Over the past two years under a similar agreement with FDA, IDOA conducted 300 on-farm inspections and 100 non-farm inspections. More than 1,000 cattle feed samples were collected and analyzed.

These days, there’s a lot of talk out there about stacked traits and improved genetic profiles. But the truth is, there is one brand of seed corn developed specifically for the needs of Midwest growers — FS Seed Corn. With its high-yielding genetic foundations and proven performance record, FS Seed Corn is offering Midwest corn growers greater profit opportunities than ever before. So when you choose FS Seed Corn, you can be sure you’re getting more than just top-of-line genetics, you’re getting bottom line results. Now how smart is that?

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FarmWeek Page 11 Monday, September 20, 2010

ENERGY

U of I Energy Farm part of national biomass study

BY KAY SHIPMAN FarmWeek

The towering miscanthus crop on the University of Illinois’ Energy Farm should add to the nation’s knowledge about plantbased energy sources.

“Our goal is to get the greatest yields with the lowest amount of inputs and less environmental impact,” said Tom Voigt, the U of I Extension specialist involved in the study.

Voigt described his research project during the recent tour of the research farm.

The Urbana site is one of five field trials in the U.S. Department of Energy (DOE)/Sun Grant’s herbaceous feedstock partnership.

The other trials are being conducted in Kentucky, Nebraska, New Jersey, and Virginia.

The DOE/Sun Grant project’s goal is to learn “what (crop) is the best to grow (for biomass) and where to grow it,” Voigt said.

Voigt pointed to U of I miscanthus plots, planted in 2008, that are part of a fertilizer trial.

In the national trial, researchers are testing nitrogen rates of zero, 53 pounds, and 107 pounds per acre.

Researchers have reported mixed results from previous nitrogen rate studies in miscanthus production.

Some studies showed a positive crop response to nitrogen applications while others showed no response, according to Voigt.

The researchers are using urea as an annual nitrogen source because it is less expensive, he added.

In Urbana, only 17 percent of the miscanthus plants involved in the study survived the first year and the field had to be replanted.

Therefore, yield data were not available for 2009.

But results were available from Kentucky, Nebraska, and New Jersey.

No data were available from Virginia because the plots were just planted this year.

The Kentucky plot yields were the same — 6.3 tons per acre of dry matter — for both zero and 107 pounds of nitrogen, but the yield was 6.6 tons on the plot with 53 pounds applied.

In contrast, Nebraska plot yields decreased as nitrogen rates increased from 6 tons per acre for no nitrogen down to 5.5 tons per acre for 107 pounds of nitrogen.

The highest yield in New Jersey was harvested on the 53-pound nitrogen plot at 5.6 tons per acre.

Yields were 4.1 tons with no nitrogen and 5.4 tons on the 107-pound nitrogen plot.

Voigt said the yield data from Kentucky, Nebraska, and New Jersey were “impressive” because second-year plants usually produce much less than longerestablished stands of three years or more.

Tom Voigt, left, University of Illinois Extension specialist, describes his participation in a national miscanthus research project during the recent field day at the U of I’s Energy Farm in Urbana. (Photo by Kay Shipman)

Don’t miss our Early Season Sale from March 17-31, 2010 Member Company Name Contact: Name

website

Phone: (000) 000-0000 ©2010 GROWMARK, Inc. A11425_6x8_aod

FarmWeek Page 12 Monday, September 20, 2010

LIVESTOCK

Cattle market: Strong demand could trump bearish report

BY DANIEL GRANT FarmWeek

Cattle prices this week could give back some recent gains as U.S. inventory numbers released Friday were well above trade expectations.

FarmWeekNow.com

the two big numbers,” said Graham Utter, AgriVisor market analyst. “The number on

U.S. beef exports in July totaled 2.049 billion pounds, up 23 percent from the same

‘It (the report) was a little bearish, but the other thing to look at is we’re still seeing (cattle) go out the door.’

Full details of the September cattle on feed report are at FarmWeekNow.com.

Live cattle futures at the Chicago Mercantile Exchange prior to the USDA cattle on feed report Friday climbed to new contract highs in anticipation of a herd reduction. Overall, live cattle prices last week averaged about $97 per hundredweight.

USDA, however, surprised many traders when it estimated cattle and calves on feed as of Sept. 1 totaled 10.17 million head, 3 percent above year ago levels.

Placements in feedlots during August were estimated at 2.27 million head, 7 percent above last year.

“The two big surprises (of the cattle on feed report) are

Auction Calendar Wed., Sept. 22. 11:30 a.m. Whiteside Co. Land Auction. Fulton Land Development, LLC, FULTON, IL. Lenny Bryson, Auctioneer. www.lennybrysonauctioneer.com Wed., Sept. 22. 7 p.m. Land Auction.

Lotta Moore Heirs, CLINTON, IL. Haycraft Auction Co. Inc. www.haycraftauctions.com Fri., Sept. 24. 10 a.m. 277 Ac. Macoupin Co. Farmland. Estate of Catherine Klaus, WAGGONER, IL. Mike Crabtree, Auctioneer. www.mikecrabtreeauctions.com Sat., Sept. 25. 10 a.m. Farm machinery.

Estate of William E. Bittner, PAW PAW, IL. Espe Auctioneering. www.espeauctions.com Wed., Sept. 29. 6 p.m. 71.49 Ac. Marshall Co. Wayne Gallup and Elaine M. Hecathorn, LACON, IL. Tim Placher Auctions.

we’re still seeing (cattle) go out the door,” Utter said. “The market has stayed strong since

— Graham Utter AgriVisor market analyst

feed and placements are higher than expected.”

Utter believes cattle prices this week could inch lower, but he doesn’t foresee a major break in the market any time soon due to strong demand.

time last year. The growth in beef exports was fueled by a surge in sales to South Korea and Russia, among other destinations.

“It (the cattle on feed report) was a little bearish, but the other thing to look at is

September 19-25, 2010

the summer when it started to rally.”

A build-up of animals, however, could weigh on the market later this year or by next spring. The cattle inventory as of Aug. 1 also posted a gain (2 percent) compared to last year.

“I don’t know if production will start to slow down until feeder prices are lower, live prices are lower, or there’s a cut in demand,” Utter said.

So far, higher corn prices apparently haven’t been a major deterrent to beef production. Corn prices on Friday posted a 17-cent gain.

Cattle producers and feeders “don’t seem too worried about the price of corn based on the number (of animals) coming out,” Utter said. “But at some point, it will have an effect.”

Marketings of fed cattle during August totaled 1.92 million head, 7 percent above the same time last year.

FarmWeek Page 13 Monday, September 20, 2010

FROM THE COUNTIES

C

UMBERLAND — The Women’s Committee will sponsor a blood drive from 2 to 6 p.m. Wednesday at the Toledo Christian Church. This is in honor of National Farm Safety and Health Week. Call the Farm Bureau office at 217-849-3031 for an appointment or more information.

• Farm Bureau has “Pass with Caution” stickers, slowmoving-vehicle emblems, and reflective kits to purchase.

Members who buy one get one free. Call the Farm Bureau office at 217-849-3031 for more information.

• Farm Bureau will sponsor Stroke Detection Plus Health screenings Tuesday, Oct. 5, at the Toledo Christian Church.

Screenings will include carotid artery, aortic aneurysm, peripheral vascular disease, and osteoporosis. Cost is $90. Call 877732-8258 for an appointment or the Farm Bureau office at 217849-3031 for more information.

ENDALL — The Prime Timers will sponsor a bus trip Wednesday, Oct. 13, to Chicago. The bus will leave the Farm Bureau office at 7:30 a.m.

The group will take walking tours of Vietnamese and Indian areas, visit a Polish museum, and eat at an Oriental cuisine restaurant. Cost is $50, which includes bus, lunch, and driver’s tip. Call the Farm Bureau office at 630-553-7403 for reservations or more information.

• Farm Bureau will sponsor two “Meet the Candidates” forums in October. The first will be at 7 p.m. Tuesday, Oct. 19, at the Historical Kendall County court house. All county candidates have been invited.

The second forum will be at 7 p.m. Tuesday, Oct. 26, also at the court house. This forum will include congressional, state representatives, and state senatorial candidates from Kendall County. Both forums will be broadcast on WSPY Radio.

• The annual meeting will be Monday, Nov. 15, at the Yorkville Legion. More information will be announced at a later date.

• The Young Leader and Newark FFA Farm Toy Show will be from 9 a.m. to 2 p.m.

Sunday, Nov. 21, at Newark High School. Cost to rent a table is $15. Call the Farm Bureau office at 630-553-7403 to hold a table or more information.

ASALLE — Farm Bureau and Country Financial will sponsor a defensive driving course from 10 a.m. to 2:30 p.m. Wednesday and Thursday, Sept. 29-30, at the Farm Bureau office. Cost is $15, which includes materials and lunch. Non-Farm Bureau member’s cost is $25. The course is available to those who are 55 and older and are policy holders. Call the Farm Bureau office at 815-433-0371 or your

K

Country agent for reservations or more information.

• Farm Bureau has slowmoving-vehicle emblems available for $2. Slow-moving vehicle kits are $6. Call the Farm Bureau office for more information.

EE — Farm Bureau members may buy one slow-moving-vehicle emblem at the Farm Bureau office and get one free. This is in honor of National Farm Safety and Health Week.

• The Lee County Farm Bureau Foundation Agriculture in the Classroom teacher grant applications are due Oct. 1.

Teachers must be a graduate of Summer Ag Institute. Call the Farm Bureau office at 857-3531 or leecfb@comcast.net for an application.

ENCOURAGING A BREAK Schuyler County Farm Bureau recently conducted a safety promotion asking farmers and their employees to slow down and take a break during the hectic harvest season. Farm Bureau staf f traveled throughout the county making stops where people were working in the fields. A drink, cookies, and fruit were offered, and those needing new slow-moving-vehicle signs were given an emblem to replace faded ones.

Here, Pat Briney Schisler, who was combining in the Bluff City bottoms, is offered a basket of goodies by Farm Bureau manager Kelly Westlake. (Photo by Schuyler County Farm Bureau Ag Literacy Coordinator Jean Barron)

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FarmWeek Page 14 Monday, September 20, 2010

PROFITABILITY

Miller: Best to plan for higher propane prices

BY RANDY MILLER

What a difference a year makes! After last year’s wild grain-drying demand, which ran deep into winter, we are set up to have one of the earliest harvests in recent history.

The propane industry certainly has Randy Miller seen some interesting times. As we near the beginning of the heating season, let’s take a look at where the propane market is today and what the future might hold.

Propane stocks at the end of August totaled 62.5 million barrels, nearly 7 million barrels below last year. Regionally, Midwest propane stocks are slightly below 28 million barrels, nearly 3 million barrels below last year.

However, last year propane inventories were at record levels, and most in the industry believe that 60 million barrels is the “comfort level” to enter the heating season. Current inventory levels are still above the fiveyear average.

Propane demand has been sporadic this summer in the Midwest, as summer fill volumes have been light. After the strong grain-drying

demand and a fair winter for heating, weather turned warm in late March and April, causing propane tanks to remain fuller than normal. In fact, 2010 had the warmest April on record.

Exports and demand from the chemical industry kept inventories somewhat in check this summer. Early weather forecasts for the winter are mixed, but the recent trend has been a little colder. Heating degree days the last three winters in the Midwest are nearly 12 percent higher than the previous four winters. Will the trend continue?

Truthfully, trying to predict the weather is at best an educated guess. Nevertheless, it’s

BY DANIEL GRANT FarmWeek

It appears farmers will need good production and a continuation of strong commodity prices to remain profitable in the coming year.

The University of Illinois is projecting input costs for 2011 could surpass 2010 as the second-highest on record.

“We’re projecting higher production costs in 2011, led primarily by higher fertilizer costs,” Gary Schnitkey, U of I Extension farm management specialist, told the Illinois Farm Bureau Profitability

Feeder pig prices reported to USDA*

Weight 10 lbs.

40 lbs.

50 lbs.

Receipts

Range Per Head Weighted Ave. Price $35.94-$45.00 $40.32 $58.99 $58.99 n/a n/a This Week Last Week 23,985 32,872 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) (Prices $ per hundredweight) This week Prev. week $75.81 $78.84 $56.10 $58.34

Change -3.03 -2.24

USDA five-state area slaughter cattle price Steers Heifers

This week $97.88 $97.90

into the winter are higher than current levels. With stronger crude prices, even with the balanced supply/demand situation in propane, propane prices likely will be stronger in season.

Randy Miller is GROWMARK’s director of propane operations. His e-mail address is rmiller@growmark.com.

Input costs projected to increase in 2011

M A R K E T FA C T S

Carcass Live

prudent to budget your heating needs toward the colder forecasts.

Crude oil prices, perhaps the best guide to propane prices, are in a carry position, meaning that futures prices

What to do? Forward contracts continue to be the best tool to manage volatility and uncertainty in today’s marketplace. Also, taking advantage of your retailer’s even-payment plan helps cash flow by spreading your costs evenly over the entire season.

If you haven’t done so already, be sure to follow up with your local FS member cooperative for its contracting and even-pay programs, and take the worry out of the heating season.

(Thursday’s price) Prv. week Change $97.46 0.42 $97.51 0.39

CME feeder cattle index — 600-800 Lbs. This is a composite price of feeder cattle transactions in 27 states.

(Prices $ per hundredweight) Prev. week Change 113.71 -1.49

This week 112.22

Lamb prices Slaughter Prices - Negotiated, Live, wooled and shorn 120-140 lbs. for 125146 $/cwt., dressed, no sales reported.

Export inspections (Million bushels)

Week ending Soybeans Wheat Corn 09-9-10 7.0 30.0 36.3 09-2-10 14.5 23.3 39.6 Last year 10.9 22.5 43.6 Season total 10.3 293.7 52.8 Previous season total 18.2 224.2 69.1 USDA projected total 1470 1200 1975 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Advisory Team.

Expenses projected for 2011 “won’t be as high as 2009, but they would be the second-highest on record,” he said.

Schnitkey projected anhydrous ammonia prices this fall in Illinois could average $600 to $650 per ton, a considerable jump from the average summer price of $548 per ton.

Higher fertilizer prices were projected to boost the cost of growing corn on highly productive farmland in Central Illinois next year by $10 per acre.

The farm management specialist believes fertilizer prices are rising, despite relatively low natural gas prices, due to increased pressure to outbid countries such as China and India for fertilizer. He also noted U.S. corn and wheat acres are expected to increase in the coming year, which will boost fertilizer demand.

Meanwhile, corn seed prices were projected to increase by an average of $5 per acre while total power costs for corn production in Central Illinois in 2011 were projected to reach an all-timehigh of $89 per acre.

Power costs are on the rise due to higher prices of fuel, machinery repairs, new machinery, and depreciation.

“The cost of a new combine from 2005 to 2010 increased by about 35 percent,” said Schnitkey, who noted the cost of new farm machinery could rise even more in the future due to increased emissions regulations.

Schnitkey also believes the recent run-up in commodity prices — corn futures last week topped $5 per bushel — will play into higher prices for

ag inputs. He noted many tenants and landlords are in the process of negotiating rents for next year.

“If we hadn’t seen the (crop) price increase, we probably would’ve been looking at stable to declining cash rents,” he said. “But increased commodity prices kept those cash rents going up.”

The trend is a major concern for the Profitability Advisory Team, according to its chairman, Kent Schleich, IFB District 8 director from Fairview.

“We could be setting ourselves up for similar problems (as in 2008/09 when input

prices set new record highs) if people are basing prices on expectations rather than reality,” said Schleich, who said corn yields in his area this year could be down 25 percent or more.

Yield variability shouldn’t affect next year’s supply of seeds, according to Brian Deverman, senior marketing manager for Pioneer Hi-Bred.

“We put measures in place to prevent that,” Deverman told the advisory group. He reported seed prices in Illinois for 2011 likely will remain flat for soybeans and will be flat to slightly higher for corn.

FarmWeek Page 15 Monday, September 20, 2010

PROFITABILITY Corn Strategy

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

Harvest rallies offer opportunity Strong harvest rallies are rare. More often than not, they end up being good selling opportunities. While there are examples of markets that rally through harvest, continuing higher well into the marketing year, they tend to be the exception, not the rule.

The two example years traders are talking about that countered the typical harvest rally peaks are 1995 and 2007.

The year 1995 came in the midst of a wave of Chinese wheat and corn imports to build stocks, the Chinese chose to liquidate during the early part of this decade. Chinese stock building drove wheat supplies outside of that country to extremely tight levels.

U.S. crops were smaller in 1995 as well. Wheat yields and production were the smallest they had been in four years. Corn yields were hit by extreme heat that summer, pushing them 8 to 9 percent below trend.

The Chinese buying carried wheat prices to the highest level in 15 years. Crop problems and strength in wheat carried corn prices to the highest level in seven years.

Both continued higher into 1996, capped by a spring problem with the 1996 wheat crop.

The 2007 situation should

Basis charts

be more fresh in your minds.

Grain prices rode the wave of investment demand for commodities, led by the surge in crude oil prices to the $147 peak. That doesn’t appear to be the case this time around.

Instead, we think the current situation has more in common with fall rallies such as those in 1974, 1980, and 1983. The first two instances started from late spring/early summer low prices. The rallies into the fall were triggered by adverse summer weather.

In 1974, the infamous “triple whammy” occurred: late planting, summer drought, and an early freeze. Summer 1980 weather was hot/dry, dropping yields 9 percent below trend. Corn prices peaked in late September, shortly after the frost.

Talk, and subsequent installation, of a massive acreage setaside program started the 1983 corn rally at the end of 1982. A harsh summer drought compounded the situation, dropping yields 22 percent below trend.

Prices peaked with the weather, but stayed high into midSeptember.

The 1980 corn market rallied close to the $4 then alltime high at the beginning of December, only to fall 15 percent in eight days.

In all three cases, prices declined during the marketing year. High early prices succeeded in cutting demand.

And as much as you think demand cannot decline this year, traders did not anticipate the depth of demand destruction when prices were peaking in those examples.

Short crops do have long tails, i.e., high early prices cut demand, causing prices to generally decline through the marketing year. No matter what you think, demand at $5 corn will not be the same as demand at $4 corn.

And, with the big hedge funds already long a record 2 billion bushels, the risk of a 1980-style collapse is ever present.

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Cents per bu.

2010 crop: The December contract has been unable to penetrate $5, an indication the rally could be ending. This coincides with the seven-week low that is expected to bottom in late September. Sales should have been increased last week to 70 percent. Boost sales to 80 percent now. Storage costs are too steep to warrant storing corn off the farm. But for farmed-stored grain, consider a hedge-to-arrive (HTA) contract for March delivery.

2011 crop: Given current prices, and the possibility of expanded plantings, make a 10 percent sale now.

Fundamentals: The trade talks about disappointing early yields, but tends to ignore the good ones. And better yields should occur when the harvest gets under way in northern and northwestern parts of the Corn Belt. Little has been done there. The 11 percent harvest completion was ahead of the 6 percent average.

Export sales slowed last week to 587,900 million metric tons (22.9 million bushels), sending a cautionary note to those talking up demand.

Soybean Strategy 2010 crop: Demand needs to strengthen to consume what looks like a very good crop. A South American crop problem is about the only thing that could carry prices higher yet. Boost sales to 80 percent now, especially if you store soybeans commercially. A HTA may work as a strategy to price commercially stored soybeans.

2011 crop: If South America has another big crop, new-crop prices will be lower this spring. Make an initial 10 percent sale now.

Fundamentals: Early yield reports tend to reinforce the large crop USDA forecast in its September report. Even if output eventually slips lower, demand isn’t strong enough to keep inventories from building this year. Chinese demand is good, but their buying has slowed. Our crush margins have declined, pushing basis levels closer to more traditional harvest levels. Unless something unexpected occurs, prices

could slip 70 to 80 cents into harvest, maybe more.

Wheat Strategy 2010 crop: Wheat continues to trade in a choppy, sideways pattern. If the December contract would penetrate the 20-day moving average, it would suggest the trend is shifting lower. Wrap up sales if Chicago December futures rallies to $7.40. Use daily strength for catch-up sales.

Storage hedges, or HTA contracts, for winter delivery are still the best tool.

2011 crop: Use rallies to $7.40 on Chicago July 2011

futures for catch-up sales. If basis is wide compared to this past summer, consider a HTA contract.

Fundamentals: International growing problems continue to pop up and the trade is now keeping an eye on harvest conditions in Canada. They have been contending with wet, cold weather and over the past week have been threatened by frost. In addition, Russia, Kazakhstan, and Ukraine all remain dry, hampering winter wheat planting progress. But Australian and Argentine potential is looking a little better.

FarmWeek Page 16 Monday, September 20, 2010

PERSPECTIVES

Growing the U.S. economy with farm exports Selling American-made goods and services is a key to economic recovery — and the latest export numbers suggest that farmers have the potential to lead the United States out of its economic doldrums.

We’re on track to sell more than $107 billion in farm products to foreign customers this fiscal year, according to recent USDA staBILL HORAN tistics. That would make 2010 guest columnist the second-best year for U.S. farm exports, trailing only our showing of $115 billion in 2008. For 2011, USDA projects sales of $113 billion.

This is excellent news not only for those of us who grow crops and produce meat, but also for the U.S. economy as a whole.

As Secretary of Agriculture Tom Vilsack pointed out, every $1 billion in agricultural exports supports more than 8,000 jobs and generates an extra $1.4 billion in economic activity.

That’s because food isn’t merely grown and harvested. It’s also processed and shipped by American workers who never set foot on farms.

President Obama certainly understands the power of an export-charged economy. Earlier this year, he promised to double U.S. exports by 2015.

Yet we can’t afford to stand still and assume that farm exports will grow like a field of corn on a hot summer day. Trade must keep up not only with foreign demand, but also with the rising tide of technology.

In the near future, I’m going to start growing a lot more food. At least that’s what the seed companies tell me. They claim that advances in breeding and genetics will allow the commercialization of seeds that yield 50 percent more food within the next decade.

Our growing world will need these new sources of food and energy because demographers expect our planet to have 9 billion inhabitants by 2050.

What’s more, we must feed and fuel this burst of population in a sustainable manner. That means raising more crops on existing farmland. The alternatives include watching Brazil convert rainforests into soybean fields and tolerating an unprecedented level of global hunger.

Farmers almost always welcome technological leaps. The improved genetics of GM crops have allowed us to grow more crops even as we spend less on herbicides and pesticides. There’s an additional environmental benefit because we don’t have to till as much. This conserves fuel and prevents soil erosion.

At the same time, we’ve traditionally viewed increased production as a mixed blessing. It can provide us with the opportunity to sell more of what we grow. If everybody grows more, however, high yields can lead to poor prices as supply falls out of sync with demand. In other words, production is good but overproduction is bad.

A new generation of genetically enhanced seeds that delivers a substantial increase in yield may force us to confront a crisis of overproduction. All farmers will suffer, but the smallest farmers will pay the price first. It could force many out of business.

The solution is to guarantee long-term foreign demand for what we grow in the heartland. This shouldn’t be too difficult, given population patterns in Asia and elsewhere.

China soon will pass Mexico as the second most important destination for U.S. farm exports, right behind Canada.

Yet nothing is automatic. Our competitors want a slice of this market as much as we do. The Obama administration must secure our future exports through diplomacy — and specifically by creating

favorable trade conditions for American-made products.

This means coming into full compliance with NAFTA (North American Free Trade Agreement), which requires the United States to permit Mexican long-haul truckers who meet U.S. safety standards to travel our highways (a U.S. Department of Transportation study found that Mexican carriers in the U.S. had a better safety record than U.S. carriers).

By refusing to take this step, the U.S. has opened itself to Mexico’s fully justifiable retaliation. Its latest round of sanctions will cost farmers and manufacturers about $2.5 billion over the next year.

The White House also must push ahead with three free-trade agreements that have been completed but continue to languish in Congress.

The pacts with Colombia, Panama, and South Korea will help secure the future of farm exports in countries whose combined population is nearly 100 million.

American farmers will do their part, continuing to grow the food the world needs. Now Washington must make sure we can sell it.

Bill Horan grows corn, soybeans, and grains in northwest Iowa on his fourth-generation family farm. Horan volunteers as a Truth About Trade & Technology Board member and may be reached at {www.truthabouttrade.org}.

Will Congress hit the books and address estate taxes?

Members of Congress and school children have wrapped up their summer recesses. Students have returned to their schools. Chances are good that members of Congress are a bit more somber.

During the August recess, many of the country’s farmers and ranchers reminded members of Congress there’s a lot of work left to do between now and Oct. 8.

One of the issues that needs and deserves to be shored up quickly DAL GROOMS is settling the guest columnist question of the estate tax exemption.

Last week, Illinois Farm Bureau leaders lobbied congressmen in Washington on the need for estate tax reform.

On Jan. 1 of this year, the estate tax was repealed. Farmers and ranchers liked that, and would like to see it continue.

Most farms and ranches are family-owned, with a good share of the farmland owned

by the eldest family member.

Under the repeal, when that family member dies, those farm families can this year address the personal loss without facing a great financial loss, too.

The concern, though, is that the repeal only lasts until the end of this year. Then it reverts to a top tax rate of 55 percent after the first $1 million of the estate’s value, and that’s before the state adds its own estate tax on the estate value.

That kind of cost on a farm, ranch, or any small business can be enough to force downsizing, as chunks often are sold off to meet the tax burden. In

some cases, that could lead to a family farm or business shrinking to the level of economic unsustainability.

On average, farm and ranch estates have 84 percent of their assets tied up in real estate. As has been said on numerous occasions, farmers are asset rich and cash poor.

If land must be sold to pay the tax bill, it reduces the family’s chances for keeping the business operating because fewer acres usually mean less income.

In the late 1990s, it took medium-sized farm operations two and a half years to pay off estate taxes, which at that time were levied at the same 55 percent rate we would see again if Congress does not take action this year.

In cases in which the land supports more than one family household, it usually means that at least one family has to leave the business for the rest to keep farming

or ranching. Generally, that doesn’t lead to a happy family gathering at Thanksgiving.

While farmers and ranchers would prefer the permanent elimination of estate taxes, there is writing on the wall that some estate tax will be in force on Jan. 1, 2011.

Members of Congress must act quickly and with clear vision to demonstrate they listened during their recess.

If they did, they will pass a bill that includes an exemption large enough to cover most

farms and ranches, and they will make sure the exemption is indexed to inflation.

The bell has rung.

Now it’s time to sharpen the pencils and hit the books to hammer out estate tax reform that works for America’s farm and ranch families.

Dal Grooms, a regular columnist for the American Farm Bureau Federation, is a native of the Midwest, where she writes about rural and agricultural issues.

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