FarmWeek August 3 2009

U.S. HOUSE LAWMAKERS removed grain producers from potential additional bureaucracy and costs in new food safety legislation. ................................2

A SOUTHERN ILLINOIS congressman said he would fight the current lockage fee proposal “every step of the way.” ................................4

DESPITE RECORD propane inventories for this time of year, propane prices likely will move higher in the months ahead. ........14

Monday, August 3, 2009

Three sections Volume 37, No. 31

Crop outlook: Acreage shift, late harvest expected

BY DANIEL GRANT FarmWeek

The combination of a wet spring and late planting season was more than just a threemonth ordeal for farmers, particularly in the eastern Corn Belt.

The situation is expected in coming months to affect

‘ The reduction in acreage may be negated by yield.’

— Rob Huston AgriVisor

everything from final acreage numbers and crop prices to harvest progress, according to farm leaders who last week attended the Illinois Farm Bureau Commodities Conference in Springfield.

“The crops are about three to four weeks behind,” said Richard Ochs, IFB District 14 director who farms in Jasper County.

The late planting season is expected to affect current crop acreage projections.

USDA is conducting additional farmer surveys ahead of its Aug. 12 crop production report.

Rob Huston, general manager of AgriVisor, predicted USDA this month will lower its estimate of corn acres nationwide and increase its projection for soybean acres.

“Many analysts feel the corn number may come down by about 500,000 acres,” said Huston, who believes crop prices will remain weak prior to harvest.

“But the other piece to the puzzle is yield,” which is projected to average 153.4 bushels per acre for corn nationwide, he continued. “A lot of analysts feel this number may be a little bit small. So the reduction in acreage may be negated by yield.”

However, yields are not a given at this point, according to Ochs. And the crops in Illinois have a long way to go before harvest (see graphic on page 2).

“We could have an average to good crop, but at the same time, we could have a failure if we get an early frost,” Ochs

said. “It (the crop) is kind of a like a poker hand. We think we’ve got a winner right now, but it could be a loser.”

Kent Schleich, IFB District

8 director and a farmer from Fulton County, said his crops are far from made.

“The beans are way behind (as many were planted at the

end of June),” he said. “And the corn looks good from the road, but it’s got a lot of wet See Acreage, page 2

PUTTING FOR EDUCATION

Bob Effner, right, prepares to putt as his fellow Country Financial agents, from left, Wayne Atteberry, Jack Smith, and Brad Kallevig look on. The 13th annual IAA Foundation’s Illinois Ag in the Classroom (IAITC) Golf Outing occurred last week at the Elks Golf Club and Wolf Creek Golf Club in Pontiac. A total of 210 golfers took to the links to support the IAITC program. The outing’s live and silent auctions raised nearly $5,000. Livingston County volunteer Rosie Duffy donated 12 homemade pies to the cause, raising more than $3,000. Ticket sales for a ball drop raffle raised another $4,000.

(Photo by Cyndi Cook)

Producers would pay for fertilizer sector woes Periodicals: Time Valued

BY MARTIN ROSS FarmWeek

East Dubuque-based Rentech is one of the 29 nitrogen fertilizer manufacturers remaining in the U.S. — 26 other facilities have ceased domestic production since 2000. It also is Illinois’ only plant.

Illinois Fertilizer and Chemical Association President Jean Payne sees the possibility that domestic nitrogen production — now at roughly 5 million tons annually — could “move entirely offshore” after 2015 under House cap-and-trade proposals. That means higher costs

for Illinois growers, U.S. job losses, and questionable climate gains, Payne maintained.

A key issue is future availability of natural gas, the primary feedstock for nitrogen fertilizers, if utilities and others that rely on coal power generation are forced by proposed greenhouse gas (GHG) emissions caps to switch to a

FarmWeek on the web: FarmWeekNow.com

“cleaner” energy source.

Natural gas, which generates relatively low greenhouse emissions in energy applications, would be a likely “switchover” source, GROWMARK legislative director Chuck Spencer suggested.

Rentech President John Ambrose is concerned both about the short-term direct costs associated with meeting new emissions caps and the long-term costs of competing in a climate-driven market.

Ambrose emphasized that “to make ammonia, you have to use natural gas.”

Rentech is eyeing biomass “gasification” to supplement

natural gas supplies, but he told FarmWeek that at best, the technology would be inad-

FarmWeekNow.com View video of Illinois Farm Bureau President Philip Nelson on climate change legislation at FarmWeekNow.com.

equate “to completely supply our energy needs.”

“It’s unsure how much cost we will incur due to having to buy (federal) allowances for carbon emissions,” he said.

“Even more, we’re concerned about the ‘dash for gas’ as See Woes, page 3

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

FarmWeek Page 2 Monday, August 3, 2009

Quick Takes RIVER OPEN HOUSE — The public is invited to an open house — on the water.

The Mississippi River Commission is inspecting U.S. Corps of Engineers projects along the Illinois River, Aug.9–13 on board the U.S. Army Corps of Engineers’ largest diesel towboat. The visit is part of the commission’s annual Low Water Inspection trip.

The Corps’ Rock Island District is hosting two public open houses aboard the towboat prior to the inspection trip.

Open houses are from 4 to 7 p.m. Thursday at Peoria Riverfront Park, 200 Northeast Water St., Peoria; and from 10 a.m. to 2 p.m. Saturday at Allen Park in Ottawa.

The open houses will provide information about the importance of the Illinois River system.

M I C H I G A N A N I M A L C A R E B I L L M OV E S AHEAD — Michigan’s House Agriculture Committee last week passed new versions of bills that would make comprehensive standards for farm animal care state law. Redrafted bills address many public concerns posed with the initial bills, yet assure consumers that Michigan livestock have been raised with the highest safety and accountability standards.

“Our coalition looks forward to working with the House of Representatives to advance this legislation which stands to make Michigan a national leader in comprehensive farm animal care,” said Michigan Farm Bureau President Wayne H. Wood.

One interesting wrinkle to the legislation is that it is supported by American Humane Certified, the farm animal welfare program of the American Humane Association.

The bills are drawing vocal opposition from the Humane Society of the United States, which denounced them as “controversial” and an “attempt to thwart meaningful reform.”

RETAIL FOOD PRICES OUTPACE FARMER PRICES — Retail food prices grew faster than the prices farmers received for agricultural commodities, but research by the Government Accountability Office (GAO) shows that concentration in the food and agricultural sectors has not affected these trends.

GAO last week released a summary of research that was completed June 30. According to GAO, concentration generally has increased at all levels of the food marketing chain and in all agricultural sectors since the 1980s.

While real annual per capita food expenditures have increased since 1982, households now spend a smaller share of disposable income on food, according to GAO. Total annual per capita food expenditures rose from $3,358 in 1982 to $3,888 in 2007, in constant 2008 dollars.

GAO reports that household spending on food decreased from 13 percent of disposable incomes in 1982 to 10 percent in 2007. Since 1982, overall food prices and food prices in each of the five major agricultural sectors have increased about as much as prices for consumer goods and services overall. However, from July 2008 through December 2008, food prices increased faster than the prices of other goods and services.

(ISSN0197-6680) Vol. 37 No. 31

August 3, 2009

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FOOD SAFETY

Grain producers exempted in House food safety bill

BY MARTIN ROSS FarmWeek

U.S. House lawmakers rescued grain producers from potential new bureaucracy and costs, but Senate work may be necessary to make Houseapproved food safety legislation palatable for specialty growers stung in recent food scares.

Citing low contamination risks for consumers, an amendment to proposals expanding U.S. Food and Drug Administration (FDA) authorities exempt grain farmers from proposed new safety standards and record access provisions.

The House plan would enable FDA to impose stricter standards for food producers, recall suspect foods, and mandate facility inspections as often as once a year in addition to demanding improved recordkeeping.

While FDA does not cover meat, egg, and dairy products currently under USDA purview, it oversees feed and pet food safety, and ag groups feared the bill would encompass grain producers and elevators.

“Plenty of progress still needs to be made as this bill is addressed by the Senate,” Illi-

Acreage Continued from page 1 holes, uneven pollination, and we’re seeing a little nitrogen loss showing.”

Schleich said he believed his yield prospects were below average for both crops, and could be even worse if there is an early frost.

“We just cannot have any type of early frost as most people in our area think there will be very little harvest in September,” Schleich added.

“Most of it will be condensed in October and November and maybe into December.”

nois Farm Bureau National Legislative Director Adam Nielsen said Friday.

“But when it was voted out of committee, it was unclear how it was going to impact

The bill seeks new “scientific, risk-based” safety standards for production and handling of “certain” fruits, vegetables, nuts, and mushrooms.

But FDA would be required to

‘Plenty of progress still needs to be made as this bill is addressed by the Senate.’

— Adam Nielsen IFB national legislative director

grain farmers. Corn and soybean producers aren’t generally sources for food safety issues — never have been — but for some reason, this bill was going to try to cover them.

“Over the last few days, some last-minute negotiations produced an exemption. It helped remove opposition we would have to this bill.”

Lawmakers clarified they would not require trace-back of grain delivered to elevators.

Beyond grain operations, the House bill exempts farm-tofarm sales, direct farm-to-consumer sales, and farmers’ market products from its list of facilities subject to new federal regulations or fees.

consult with USDA in developing standards and accessing farm records for product trace-back.

Missing is any indemnification for growers who suffer losses through erroneous food safety advisories or recalls.

FDA’s response to a 2008 salmonella outbreak was blamed for losses by tomato growers who ultimately were cleared of suspicion.

Nielsen is hopeful the Senate will address protections for producers affected

by FDA activities, noting Senate Majority Whip Dick Durbin, a Springfield Democrat, has focused on food safety issues.

FarmWeek Page 3 Monday, August 3, 2009

CLIMATE

Will Senate climate plan be House lookalike?

BY MARTIN ROSS FarmWeek

“Based on past experience,” a Senate climate blueprint expected by early September likely will look like the Illinois Farm Bureau-opposed House cap-and-trade bill, American Farm Bureau Federation (AFBF) regulatory specialist Rick Krause told FarmWeek.

Krause, speaking at last week’s Illinois Farm Bureau Commodities Conference in Springfield, reported Senate Environment and Public Works Chairman Barbara Boxer (DCalif.) plans to release a climate draft for fall floor debate after Congress’ August recess.

The House climate package, developed by Boxer’s California colleague, House Energy and Commerce Chairman Henry Waxman (D-California), is “not something that we thought would be beneficial for agriculture,” Krause said.

The bill aims to reduce greenhouse gas (GHG) emis-

sions 17 percent from 2005 levels by 2020, with an 83 percent reduction by 2050 by capping emissions from utilities, manufacturers, and others.

Under the bill, USDA would determine what ag practices would qualify as emissions “offsets” that regulated industries could buy to meet new U.S. Environmental Protection Agency (EPA) limits. But AFBF economists project energy and input cost increases under the bill would result in an $8 million drop in annual U.S. ag net income within the next decade.

According to IFB President Philip Nelson that translates to a potential $500 million “hit” for Illinois producers alone.

The IFB Board of Directors voted unanimously to oppose legislation that came out of the House. Nelson at the Commodities Conference cited estimates that the House plan would impact the

IFB’S STANCE: • House cap-and-trade legislation would have a negative economic impact on farmers.

• Cap-and-trade would have a negligible impact on global warming.

• Cap-and-trade creates a gaping hole in the nation’s energy supply.

average Illinois farm to the tune of $11,000-$15,000 annually in 10 years, noting “that’s a price you can’t pass on to anybody else.”

“We are urging our members to contact their senators to oppose whatever happens on the Senate floor until they address some of the concerns we have,” Krause told FarmWeek.

GROWMARK also is opposed to the House climate bill “and sees significant chal-

lenges facing domestic nitrogen producers” if it clears Congress, GROWMARK legislative director Chuck Spencer reported Friday (see page 1).

AFBF is “continually revising” estimates of U.S. farm costs under the House plan, Krause noted. A new study by Iowa State University economist Bruce Babcock predicted a “relatively small” impact for Midwest growers, but Krause suggested Babcock has focused wholly on anticipated future carbon prices — i.e., offset opportunities — without considering extended market impacts.

“It doesn’t take into account that if you raise carbon prices, natural gas prices will rise and fertilizer prices will rise in accordance with that,” Krause said.

According to Farm Foundation President Neil Conklin, a former USDA/Farm Credit economist who headlined last

week’s IFB conference, “mitigating climate change, in the short run, is going to cost us money.”

While he acknowledges the growing impact of climate change on world agriculture, Conklin questioned purely unilateral U.S. climate action: “If we don’t act globally, it isn’t going to work.”

China and India have shown little inclination to impose their own carbon caps.

Gardner Chair for Ag Policy and University of Illinois economist Bob Thompson said adaptation to climatic change will be necessary to meeting long-term global food demand.

But “we’d pay a fairly high price and get very little benefit in terms of slowing down greenhouse gas accumulation between now and the middle of the century” by passing cap-and-trade legislation, Thompson told FarmWeek.

Woes Continued from page 1 power plants and other facilities try to move off coal, purchase more gas, and run up demand and the price for natural gas.

“The ammonia fertilizer plants are dependent on natural gas — it represents generally 80 to 90 percent of

industries that would be included in the same allowance “pool” or the level of allowances they might expect to receive.

With various industries vying for a finite supply of allowances, “who gets the ‘free’ allowances is up in the air,” Ambrose said. Fertilizer

‘There’s going to be a point, between t a xe s a n d n a t u ra l g a s, t h a t h i g h e r costs are going to have to be passed on — higher input costs for the farmer.’

— John Ambrose Rentech

their costs of making ammonia. There’s going to be a point, between taxes and natural gas, that higher costs are going to have to be passed on — higher input costs for the farmer.”

Allowances and anhydrous The industry also is uncertain about potential allocation of annual emissions “allowances” to fertilizer manufacturers under new laws.

House legislation categorizes ammonia manufacturers as an “energy intensive and trade-sensitive” sector but does not identify other

manufacturers must determine the share of allowances they would need to remain a “domestic viable production industry,” GROWMARK’s Spencer said.

At the same time, Spencer stressed the challenge of “making the competitive playing field level” for U.S. companies under potentially unilateral emissions caps.

While natural gas can be traded worldwide, Spencer noted most countries currently use their own gas production domestically, exporting or importing relatively little.

If foreign fertilizer suppliers aren’t required to provide similar emissions reductions on a parallel timeline, they likely would enjoy lower gas prices relative to U.S. companies. That alone could “price U.S. manufacturers out of the market,” Spencer warned.

Competition and the climate Today, 55-plus percent of U.S. farm nitrogen fertilizer is imported. Ambrose noted 17 percent of imported nutrient comes from nations that have initiated climate policies. However, China, India, former Soviet countries, and key Caribbean exporters “have not made any moves to regulate carbon.”

Aside from domestic employment and the importance of Illinois growers having “a source of nitrogen that’s local,” Payne argued importation of nitrogen through the Gulf would spur increased truck and rail greenhouse emissions “on a transportation system that’s already maxed out.”

Some fertilizer is moved by pipeline or reduced-emissions barge, but Payne noted a limited number of available river tows.

“If we continue to lose nitrogen fertilizer plants to those countries, we’re really not doing anything to help control the environment,” Ambrose said.

THE FERTILIZER FACTOR: The importance of natural gas • Natural gas accounts for up to 90 percent of the cost of producing a ton of ammonia. In 2008, the nitrogen fertilizer industry spent $3 billion on natural gas.

• Each $3 per million Btu (British thermal unit) increase in the cost of natural gas raises nitrogen fertilizer production costs by $1 billion, according to The Fertilizer Institute.

• Since 2000, the U.S. nitrogen industry has closed 26 fertilizer production facilities due largely to natural gas costs. Currently, only 29 plants operate in the U.S. — more than 55 percent of U.S. farm nitrogen fertilizer is imported.

• Today, natural gas meets 24 percent of U.S. energy demand. Americans used 23.2 trillion cubic feet in 2008; that was up 0.85 of a percent from 2007.

• Natural gas supplied about 64.9 million residential customers and 5.5 million commercial and industrial customers in 2007. Because it provides reduced emissions relative to gasoline or diesel, many companies and municipalities are moving to natural gas-powered cars, trucks, and buses to reduce emissions. There are more than 120,000 natural gas vehicles now operating on American roads.

• According to the Energy Information Administration, natural gas-fired electricity generation is expected to increase dramatically over the next 20 years, as new capacity comes online. In 2000, 23,453 megawatts of new electric capacity was added in the U.S., nearly 95 percent derived from natural gas.

• Domestic sources produced more than 20.6 trillion cubic feet (tcf) of the natural gas delivered to the U.S. market in 2008 — more than 88 percent of U.S. consumption. Of gas imported in 2008, 3.6 tcf arrived by pipeline, mostly from Canada, with the rest coming from such countries as Trinidad, Egypt, Nigeria, and Algeria.

For more information on nitrogen fertilizer prices and markets, see page 14.

FarmWeek Page 4 Monday, August 3, 2009

GOVERNMENT

Costello fighting lock fee ‘every step of the way’

BY MARTIN ROSS FarmWeek

Barge interests called all hands last week to sink a proposed lockage fee that would penalize Upper Mississippi elevators and shippers.

Several bipartisan Illinois congressmen have signed onto U.S. House Transportation and Infrastructure Chairman Rep. Jerry James OberCostello star’s (DMinn.) “Dear Colleague” letter aimed at defeating a Houseproposed per-barge, per-lock fee that would help finance river improvements through the Inland Waterways Trust Fund.

Currently, the waterways fund is replenished through barge diesel fuel taxes, but reduced reserves have some policymakers seeking new river funding alternatives.

The existing fuel tax at least distributes the funding burden

across all river traffic, Inland Waterways Council Midwest Area Vice President Paul Rohde argued.

Rohde calls the proposed new fee a “punitive approach to rivers that lock” that would “definitely be detrimental to the State of Illinois.”

Under the proposed fee structure, an elevator located above a given lock would face a serious competitive disadvantage to those below the lock “just because of its geographical location,” he said.

“The Lower Miss and any other navigable waterways (without locks) currently paying into the Inland Waterways Trust Fund essentially would get a free pass,” Rohde said.

“That would put the onus on only rivers that lock and only traffic that goes through those locks to pay for the entire nation’s infrastructural capital improvements.

“The thing they’re not taking into account are shipper choices, and what a punitive tax like this would do (toward) moving traffic off the river at a time when we can ill-afford

to underutilize the country’s most environmentally friendly, energy-efficient means of transportation.”

The importance of barge transportation both for ag and energy shipments is apparent in the list of Illinois House members who have joined Oberstar’s efforts, from downstate Democrats Jerry Costello of Belleville and Debbie Halvorson of Crete and Republicans Tim Johnson of Urbana, John Shimkus of Collinsville, and Aaron Schock of Peoria to Chicagoland Democrats Jesse Jackson Jr. and Dan Lipinski and Republican Mark Kirk of Highland Park.

Costello said he has repeatedly opposed Bush- and Obama-proposed user fee increases, and told FarmWeek he would fight the current lockage fee proposal “every step of the way.”

He conceded concerns about “the long-term future of the Trust Fund,” and reported “we’re looking at options” to ensure private cost-share funds needed to improve Midwest navigation.

Tierney: EPA waiver statements create ethanol ‘uncertainty’ Rumblings from the U.S. Environmental Protection Agency (EPA) have generated a “really big uncertainty” about prospects for breaking the 10 percent ethanol “blend wall,” Doane Advisory Services General Manager William Tierney warns.

Major biofuels producers have petitioned EPA to approve use of intermediate ethanol/gasoline blends up to 15 percent ethanol. Currently, only conventional gasoline blends of up to 10 percent ethanol may be sold nationwide.

Tierney cited industry consensus that EPA would consider “all intermediate blends,” from 10.1 percent ethanol to E15, but recent statements by an agency official appear to indicate EPA “is only going to evaluate E15,” he told producers at last week’s Illinois Farm Bureau Commodities Conference.

That’s significant, the former USDA economist warned, because many analysts see E12 or E13 as “a lock” for approval, while prospects for E15 are far less certain.

The small/off-road engine industry opposes an E15 waiver, alleging potential performance issues with mowers and other gas-powered equipment, and whatever their validity, Tierney noted perceived “technical issues surrounding an E15 blend approval are substantial.”

If EPA denies a straight E15 waiver in December — as Tierney predicts — biofuels producers would be forced to “start the clock all over again” with a request for an E12-E13 waiver. Thus, he anticipates an industry or even federal “pushback” if EPA “plays games” and requires new petitions for additional blend levels.

Approval of E12-E13 blends could result in a 20-30 percent increase in ethanol demand “just at the stroke of a pen,” Tierney suggested.

He noted ethanol blending margins currently are “attractive” for fuel suppliers, relative to 100 percent gasoline, and higher blend levels could further enhance profit potential for blenders. — Martin Ross

CDC reports no H1N1 found in U.S. hogs The H1N1 flu virus has not been found in any pigs within the United States to date, according to the Centers for Disease Control and Prevention (CDC).

However, the virus was detected in pigs on a farm in Alberta, Canada.

CDC issued interim guidelines for preventing the spread of disease from humans to

pigs in petting zoos, hobby farms, and other non-commercial settings.

Flu viruses are thought to spread from infected people and pigs to other people and pigs mostly through coughing or sneezing, and through contact with virus-contaminated surfaces.

To prevent flu viruses from spreading between people and

pigs, it is important for those working with pigs in non-commercial settings to recognize flu symptom and take precautions.

Anyone who is diagnosed with flu or develops flu-like symptoms should seek medical care, limit their contact with others, and practice good hygiene. That person also should avoid contact with pigs.

Lawmaker opposes delays in new transportation bill A Southwestern Illinois congressman is “adamantly opposed” to delaying highway legislation crucial to bolstering a crumbling nationwide transportation network and creating jobs “for decades to come.”

U.S. Rep. Jerry Costello, a Belleville Democrat on the House Transportation and Infrastructure Committee, told FarmWeek he and committee Chairman James Obserstar (D-Minn.) will continue to push a new $500 billion, six-year surface transportation package despite a recent Senate Commerce, Science, and Transportation Committee recommendation to extend the soon-to-expire “highway bill” for 18 months.

Transportation Secretary Ray LaHood, Costello’s former Republican House colleague, has urged extension of the current six-year act.

Costello maintained “our highways, our roads, our bridges, our waterways, and our rail system are in terrible condition,” and said new legislation was crucial to upgrading domestic transportation. He was hopeful a House package would move out of committee in September.

Costello said he was disappointed by diversion of recent economic “stimulus” funding for education, health care, and other programs.

“The entire stimulus package was supposed to go into infrastructure, which would have made permanent investments in our road/bridge/transit/waterway system, while at the same time creating good-paying jobs and putting people back to work,” Costello told FarmWeek.

“If there is going to be a second stimulus bill — and I don’t know if there will be or not — I have said I’m not voting for it unless it is all for infrastructure. Our infrastructure is falling apart in this country.”

Further, he is seeking House funding for seven new Upper Mississippi/Illinois River locks. The Water Resources Development Act (WRDA), which authorized construction of the modern, 1,200-foot commercial locks, was passed in 2007, but Congress has been slow to fund the project.

The Senate proposes allocating $19 million for pre-construction engineering/design work through fiscal 2010 spending legislation. House energy and water appropriations proposals currently do not include funding, but Costello reported “we are attempting to get that done as we speak.”

Flood-damage-reduction projects in the Mississippi River Valley would see the largest budget cut under the House spending measure, losing $133 million from fiscal 2009 levels. Costello supports approval of a “second” WRDA bill to address comprehensive Mississippi-Illinois flood management planning — a goal for Rock Island Democrat Rep. Phil Hare as well. — Martin Ross

Illinois receives stimulus funds for leaking tanks Illinois received more than $7.4 million in federal stimulus funds from the U.S. Environmental Protection Agency (EPA) to assess and clean up leaking underground tanks.

The funding will be used for overseeing assessment and cleanup of leaks from underground storage tanks or directly paying for assessment and cleanup of leaks from federally regulated tanks where the responsible party is unknown, unwilling or unable to finance, or the cleanup is needed as an emergency response.

This month, EPA regional underground storage tank programs will enter into a cooperative agreement with Illinois EPA. The cooperative agreement will include more detailed descriptions of state spending plans.

“The Recovery Act support for underground storage tank cleanup is a great investment in environmental protection and will provide long-term economic benefits for Illinois,” said Bharat Mathur, acting regional EPA administrator in Chicago.

FarmWeek Page 5 Monday, August 3, 2009

OUTLOOK

Shift from deflation to inflation looming?

BY DANIEL GRANT FarmWeek

The current period of deflation may be a drag on commodity prices, but a shift to inflation would present a new set of challenges, according to Rob Huston, general manager of AgriVisor.

“The government injectRob Huston ed quite a bit of money (into the financial system and ailing industries) in the form of cash and credit,” Huston said last week at the Illinois Farm Bureau Commodities Conference in Springfield. “The concern now is inflation.”

Some projections show the

deflationary cycle could end soon and inflation in coming months could creep near its historic average of 3 to 4 percent.

The shift, if realized, could help boost commodity prices to higher levels in the near-term.

However, a period of infla-

FarmWeekNow.com Multi-media interviews and complete coverage of the IFB Commodities Conference are available at FarmWeekNow.com.

tion also could hurt demand for ag products and drive up the cost of ag inputs that recently have softened from historic highs.

“With as many jobs as we’ve lost and companies that have gone out of business, deflation is not a bad thing,” Huston said.

Ellinger: Farmers may face more risk The ag economy still is in decent shape despite the ongoing recession, according to an ag economist.

Farm debt nationwide ($215 billion) is low compared to farm assets ($2.34 trillion), most ag loans have performed well, and credit generally is available for most farmers, according to Paul Ellinger, an ag economist who recently was named head of the department of agricultural Paul Ellinger and consumer economics at the University of Illinois.

“Agriculture is in a pretty safe spot,” Ellinger said last week during the Illinois Farm Bureau Commodities Conference in Springfield. “We’re characterized as a relatively low-debt industry.”

Most community banks have weathered the financial storm by avoiding the subprime mortgage fiasco and because ag loans have performed well, he said.

“Most (ag) lenders are in relatively good shape and credit generally is available for farmers,” Ellinger said. “But about 20 percent of all ag loans were done with banks involved in this crisis. So ag was not immune” to financial troubles, he said.

Ellinger believes there are signs of economic recovery, noting the financial markets recently have become more settled and the home market is beginning to stabilize.

So far this year, 64 banks have failed nationwide compared to 305 banks that were on a “troubled list” a year ago, he reported.

But even if the worst is over, Ellinger believes farmers will be forced to absorb more risk as a backlash from recent economic events.

Key risk challenges for farmers could involve commodity prices, input prices, cash rents and interest rates.

“We (in ag) are having a lot of risk pushed back on us,” he said.

“If the crisis deepens, we can get a lot of domino effects in ag.”

Farmers in the near future may have limited access to longterm, fixed-rate financing due to uncertainty about interest rates.

Ag lenders also may require farmers to provide more documentation to obtain operating loans.

Meanwhile, farmers may get squeezed by tighter margins, particularly if they’re paying high cash rents.

“All economics would support (a decline in cash rents),” Ellinger said. “But what we’ve seen in the past is cash rents are slow to react” to the market.

Overall, the farmland market will be a key barometer to gauge the health of the ag industry: Real estate accounts for about 87 percent of all farm assets, Ellinger added. — Daniel Grant

“It means people who don’t have jobs pay less for food and other goods.”

Huston reported unemployment in the U.S. currently is about 10 percent. The current economic troubles frequently have been compared to those during the Great Depression, but unemployment at that time was about 25 percent, he noted.

Meanwhile, any strengthening of the value of the dollar also could present a challenge to agriculture.

“Exports will be largely affected by the dollar,” he said.

“A lower dollar is good for exports” as it allows U.S. products to be more competitive around the world.

Overall, Huston was bearish about crop prices for the remainder of the growing season but believes markets may strengthen after harvest.

He recommended farmers employ marketing plans that protect against downside risk and allow for upside potential.

Prices in coming months could range anywhere from $7 to $13 per bushel for beans and $3 to $4 per bushel for corn.

Huston also predicted basis levels will weaken heading into harvest.

Lehr predicts bright future for agriculture Jay Lehr, science director for The Heartland Institute in Chicago, acknowledged farmers are pressured by everything from volatile commodity and input prices to attacks by environmental and animal activists.

But the bottom line of the business, according to Lehr, is people must eat to survive, and population projections indicate there will be 2 billion more people on the planet within the next 50 years.

Jay Lehr “The future of agriculture never has been brighter,” Lehr said last week during his keynote address at the Illinois Farm Bureau Commodities Conference in Springfield.

“World demand for food is growing, and it will continue to grow.”

People in developed countries currently consume an average of 65 grams of animal protein a day, and Lehr believes a growing middle class around the world will strive to obtain a similar diet.

Farmers can meet the growing demand for food through the use of such tools as biotechnologically enhanced seed and precision agriculture, he said.

“Biotechnology is the future of ag,” he said. “It will allow us to improve yields, reduce water intake, and provide health benefits to consumers.”

Meanwhile, precision agriculture allows farmers to be more efficient. Tractors steered by global positioning systems (GPS), for instance, save money by reducing overlap of chemical applications and lost yield from missed strips of land.

“The average person on the street thinks we farm like our grandparents did. We don’t,” said Lehr, who has worked in the ag industry for 55 years. “We’re using tools that reduce inputs and increase yields. This is critically important” to feeding a growing population and improving the environment.

It also is important for farmers to be more proactive in their communities so consumers have a better understanding of how their food is produced, Lehr said.

The number of people involved in production ag in the U.S. has declined from 20 percent to less than 2 percent, he noted.

— Daniel Grant

FarmWeek Page 6 Monday, August 3, 2009

CROPWATCHERS Bernie Walsh, Durand, Winnebago County: More of the same here last week with cool weather and rain every few days. We had 0.4 of an inch Thursday night but missed the really bad storms. Two very bad hailstorms occurred 30 to 40 miles west of us in the last two weeks, with 2-inch hail and lots of crop damage. We were able to combine wheat last week and were very happy with a 90-bushel yield. The corn still looks good, but could use more warm weather. The Rockford Weather Bureau recorded the coldest average temperature for the entire month of July in all the years records have been kept. It was 67 degrees — the old record was 68.8 degrees.

Leroy Getz, Savanna, Carroll County: Rain for the week was 4.2 inches. July total rain is 9.2 inches. A massive hailstorm hit Jo Daviess and Stephenson counties along the state line on July 24.

Severe crop damage resulted on 40,000 to 50,000 acres.

There was more damage in Wisconsin. A story and picture appear on the next page. I received 1.4 inches of rain during that storm. Then on July 27, 2.8 inches caused local flooding in my area. I had many flood fences washed out. I combined my oats and they yielded about 65 bushels at 10 percent moisture. No hay was baled in this area last week. Crop dusting planes are flying on fungicides.

Soybeans are still not growing and are very short. Yes, that field that was planted two weeks ago was flooded out again.

Ron Frieders, Waterman, DeKalb County: Frequent rains and cool temperatures are keeping crops stress free, but the lack of heat continues to slow maturity. Two thirds of the cornfields are tasseling.

This is at least two weeks later than average for the area.

Soybeans look good. They are shorter than normal and need growing degrees to mature. My wife is wondering if Obama is going to have a “Cash for Clunkers” program for old farm tractors.

Larry Hummel, Dixon, Lee County: Our wheat is finally harvested and delivered to the elevator. It didn’t reach the yield goal I had set, but 87 bushels to the acre left a little bit of profit in my pocket.

The moisture averaged a little more than 15 percent, so there was a pretty good dock, but at least it is out. There hasn’t been very much good weather for combining wheat or baling hay, for that matter. We have started to spray fungicide on the corn varieties that I had planned to spray early this spring. I’m keeping a close eye on the rest of the corn to see if this summer’s wet weather causes a flare-up in foliar diseases. I did my first yield check for corn Thursday. It was planted May 5 and is at the blister stage. The population was 32,000, the average ear had 720 kernels. That comes up to a yield potential of 260 to 290 bushels to the acre. I know it’s early and definitely not all of our fields look that good, but for that field, that’s the potential. Soybeans are starting to set pods, so the window for applying fungicide, if warranted, is soon approaching. No sign of aphids, and Japanese beetles seem to be thinning out for now.

Ken Reinhardt, Seaton, Mercer County: I had 1 inch of rain last week, bringing the total to 26 inches since May 1.

I have never seen everything so green at this time of year.

The small fertilizer plant by Keithsburg has been struck by lightening 33 times this season, with at least one worthy of Internet fame. The biggest local hay producer said he finished his first cutting last week, with the best hay only being rained on once. I just finished spraying soybeans.

It was easy to see where last year’s refuge corn was by the amount of volunteer corn caused by corn borer. Seven planes are applying fungicide on corn out of our airport. There is some corn that looks fantastic — from the road, anyway.

Ron Moore, Roseville, Warren County: We received one inch of rain last week. The corn crop has been improving lately and looks very good right now.

Pollination is almost complete in our area. Fungicides are still being applied on corn and should be finished soon. The soybeans have closed in the rows and have started to flower and set a few pods. There have not been any reports of any insect problems yet. My cattle sure like to reach through the fence to eat my corn crop, even though they have plenty of grass to eat for this time of year.

Tim Green, Wyoming, Stark County: Another very pleasant week, but temperatures still are cool. Nights have been down in the mid- to low 60s, and we’ve had a few sprinkles of rain now and then, but nothing major. A few planes have started to spray fungicide on corn. We have pretty much wrapped up the spraying season on herbicides, and almost everybody is done spraying beans. Still keeping a look out for Japanese beetles, but they are not much of a concern quite yet. We need some nice, warm weather — the crop is really behind. Beans are going backward. They just don’t like all this wet weather.

Mark Kerber, Chatsworth, Livingston County: Rain was on the short side last week. As we close out the month of July, there has been no recorded 90degree weather, and the air conditioner has been off more than it was on. Our local co-op was trying to begin its meeting when a 5-inch rain and lightning delayed the start. The co-op had a great year — profits will be used to update facilities and pay patronages. Pollination seems to be perfect as there is no insect pressure this year.

Plenty of moisture and cool temperatures also have helped. My hat turned yellow with pollen as we scouted for leaf diseases.

Higher-priced fungicides and lower-priced corn have kept spraying to a minimum unless warranted by certain hybrids.

Soybeans are finally getting a little height as they are setting pods and still producing flowers. We will need August rains to keep this growing season productive. Last year, we were looking good at this time when the rain shut off and the southern portion of Livingston County was really hurt at grain fill.

Markets have seemed to bottom. The new ethanol plant in Gibson City is at full capacity and is grinding a lot of corn everyday.

Ron Haase, Gilman, Iroquois County: Most of the corn planted from May 9 to May 12 either was pollinating or finished pollination last week. The corn planted May 20 or a few days later is also pollinating. So, most cornfields in the area are in the silking stage (R1) up to the milk growth stage (R3). Most soybean fields are in the beginning pod growth stage (R3). Farm activities last week included spraying herbicides in soybean fields, scouting cornfields for leaf diseases, spraying fungicides in cornfields, learning more about average crop revenue election (ACRE), and mowing roadsides. We finished our fungicide application on corn Friday. We have applied fungicide on 70 percent of our corn. The other 30 percent is either healthy hybrids that don’t need protection or check strips.

Gray leaf spot is present in corn on corn with high residue present, and the lower cost of applying it ourselves is what led to our decision to apply fungicide. Overall, there has been a lot less fungicide applied on corn this year than in the last two years. Local closing prices for July 30 were: nearby corn, $3.26; new-crop corn, $3.16; nearby soybeans, $10.64; new-crop soybeans, $9.45.

Brian Schaumburg, Chenoa, McLean County: Moderate temperatures and 1 inch of rain last week kept crop prospects in the positive. If we continue this pattern and get more sunshine, 5- and 10-year average corn yields will be likely. Soybeans still have a long way to go. We missed the damaging winds and hail that hit farther east of McLean County.

Spraying fungicides for foliar diseases has increased. Corn, $3.27, $3.12 fall; soybeans, $10.61, $9.36 fall; wheat, $4.21.

Steve Ayers, Champaign, Champaign County: The Champaign County Fair was blessed with a pleasant week.

That’s the good news, but we need some heat to mature both corn and soybeans. We are still popping tassels on corn. Doing the math, that should put maturity in early October. We will be OK if Jack Frost doesn’t nip us before our average mid-October first frost date. We had 0.34 of an inch of rain in a storm early Wednesday morning. A crop-duster from Texas struck a power line Thursday south of Philo, but was able to return to Rantoul airport. Corn is showing gray leaf spot and rust. Soybean spraying, baling, mowing, and crop scouting continues.

Wilfred Dittmer, Quincy, Adams County: Another cool Friday morning with the thermometer standing at 57. It is clear and there was nothing in the rain gauge all week. Our July total still stands at 3 inches and total for the year since March is 20 inches. Crops are doing better, but we still need more growing degree units to get to maturity. July is gone and fall is just around the corner. These little beans could sure use some more summer days. Most corn is tasseled, and I saw a little aerial spraying last week. Support your county fair and all who help make it happen.

Harry

Schirding,

Petersburg, Menard County: Pollination of the 2009 corn crop is nearly complete, but kernel counts appear to be slightly below those of 2008.

Rootworm beetle numbers are below average this year, which should be positive for low pressure next year. Japanese beetle feeding is apparent in both corn and soybean fields; however, there have been few incidences where treatment thresholds were met. Although not an accurate indicator of yield, the height of the soybean crop, especially in 30-inch rows, is less than normal. Earliest soybeans are nearly to the stage that will give the maximum response from applications of fungicide. Corn nearby, $3.24, up 8 cents; corn for January, $3.20, up 3 cents; soybeans nearby, $11.13, up 81 cents; soybeans for January, $9.59, up 31 cents.

Tom Ritter, Blue Mound, Macon County: We are in our third week with no major rains.

We’ve had rains come close, but they stopped short or went north or south, so the grass is turning brown and definitely needs a shot of moisture in the very near future. Crops, overall, look good considering their late planting. Soybeans are starting to close in the 30-inch rows, but both crops have a long way to go before harvest.

Some are spraying fungicides on corn.

Not nearly as many acres are being sprayed this year due to the crop prices.

Corn planted in late May and early June is just now at the stage where it needs spraying. Overall, prospects for the crops look fair. A lot of areas in each field that have had major stress over time will take their toll on yields.

Todd Easton, Charleston, Coles County: Salesman season seems to have started, and I already have had a few come by. Fortunately, their pricing this year seems to be more realistic, but, of course, no seed prices yet. I hope those numbers won’t be too shocking. We received showers last weekend (July 25-26) that brought 0.5 to a full 1 inch in places.

Currently we are getting well-timed rains and hopefully that will continue through August. Our latest cornfields are getting a good start on pollination while the rest is done pollinating in all but the low spots.

I’m afraid those areas will be disappointing when the combines roll through.

Soybean fields have had some good growth in just this last week. Most are in the R2 stage and hopefully will continue this and come closer to where they should be this time of year.

Reports received Friday morning.

FarmWeek Page 7 Monday, August 3, 2009

CROPWATCHERS Jimmy Ayers, Rochester, Sangamon County: This past week we received a little over 0.6 of an inch of rain. The weather has been cooler than normal, and crops are responding fairly slowly. Beans did show a bit of growth last week. There is a lot of corn that is still going through the pollination process. We have had excellent weather for that type of activity — a little moisture and lots of dew nearly every morning. There have been some areas of damage from strong weather fronts that moved through. Wind being the most damaging in our area. Beans are running knee high, but some of them are as much as waist high in some 30-inch rows. Most of the spraying has been done. With the crop in our area, it doesn’t seem like prices should have gone as low as they have. Apparently, China is back to buying again. Excellent move. Frost is the biggest concern at this point.

Ted Kuebrich, Jerseyville, Jersey County: Jersey County received between 0.5 of an inch to almost 2 inches last week.

The corn and beans are looking better now that the crops are starting to even out in most fields. The smaller beans are being sprayed to clean out the weeds, grass, and volunteer corn. You can still find Japanese beetles eating on the corn and beans as you check the crops. Cash corn, $3.43; new corn, $3.16; January corn, $3.33; cash beans, $11.36; new beans, $9.69; January beans, $9.82; cash wheat, $4.15

Doug Uphoff, Shelbyville, Shelby County: We finished spraying soybeans last week for the second time and are monitoring leaf disease in the cornfields.

A lot less Headline is being applied this year due to cost of putting the crop in and falling grain prices. We also baled hay last week for the second cutting.

Well, “we” didn’t. I had to drive the tractor due to a severely sprained ankle, but Dad, the boys, and friends baled me out. Pardon the pun. We had a very nice fair two weeks ago.

It was some of the nicest weather I can ever remember having for the county fair. I really appreciate all the kind words I received for the FarmWeek reports we all do. I met a man from Edwardsville, Glen Suns, 92 years young, who reads the cropwatcher reports every week. He helped build the fairgrounds in 1958. He was the county farm adviser then. It made my week to talk to someone who designed and help build a place that has meant so much to so many 4-H kids in the last 51 years. Corn and beans are looking better and most are in reproductive stages now. Soybeans are short for this time of year except the few that were fortunate enough to get in earlier to plant them. July rain was 2 inches. Grain prices on Thursday: cash corn, $3.28; fall corn, $3.12; January 2010 $3.27, beans, $10.61; fall beans, $9.49; January 2010 $9.64; wheat, $4.08. Most farmers are finally feeling caught up and are mowing, going to average crop revenue election (ACRE) meetings and plot tours, or planning vacations before the kids go back to school or college.

Bob Biehl, Belleville, St. Clair County: Scattered showers occurred around the area this past week. Some areas received as much as 0.5 of an inch, but most areas just received a sidewalk-wetter. It’s not too dry, but we could use an inch of rain. A lot of corn is starting to tassel.

Beans are sure slow starters this year. A little spraying has yet to be done, but not too much. Insect pressure is fairly low so far, except for the waterways, which are loaded with grasshoppers.

Rick Corners, Centralia, Jefferson County: Another week with no rain. Excuse me, we had one half of one tenth Thursday.

Most all of the May-planted corn is tasseled now. I know everyone says I’m always negative, but I can’t for the world of me see how we are going to get 6-inch-high beans into the combine header this fall. Some of those little buggers just will not get going.

Unusual July weather good, bad for crop development

BY DANIEL GRANT FarmWeek

Farmers wondering if the month that just ended really was July or if it was September posing as July saw various effects on the crop from the unusual weather.

Whether the weather last month was beneficial or harmful to crop development depended on location, as usual.

The average temperature in Illinois for the month was about 5 degrees cooler than normal, according to Mark Russo, meteorologist with Chesapeake Energy. He was a featured speaker last week at the Illinois Farm Bureau Commodities Conference in Springfield.

“If it’s not quite as hot during the summer, it reduces the chance of heat stress during pollination,” Russo said.

And 62 percent of the corn crop and 61 percent of soybeans in the state were

Correction The U.S. Department of Interior’s wild horse adoption will be Aug. 7 and 8 at the Interstate Center on the west side of Bloomington.

Forty horses will be offered for adoption. They can be viewed from 2 to 7 p.m. Friday at the center, and adoption on a first come, first served basis will be from 8 a.m. to 5 p.m. Saturday.

The dates carried in the July 27 FarmWeek were correct, but the days of the week were in error.

rated good to excellent as of the first of last week, according the National Agricultural Statistics Service state office in Springfield.

However, extreme weather such as heavy rains, wind, and hail pounded the crops last month at numerous locations around the state.

Eleven percent of the corn crop and 10 percent of soybeans in the state last week were rated poor or very poor.

One storm in particular late last month produced golf ball- to tennis ball-sized hail and 60 to 70 mph winds that devastated some crops, particularly in Bureau, Carroll, Jo Daviess, and Stephenson counties.

Leroy Getz, a FarmWeek cropwatcher from Carroll County, reported one of his 50-acre cornfields in Stephenson County may be a complete loss after the July 24 storm.

“The odor of dying plants was very strong,” he said after assessing the damage last week.

Chris Anderson, spokesperson for Country Financial, said crop damage claims from the storm as of last week totaled 24 in Bureau County, 26 in Jo Daviess County, and 32 in Stephenson County.

On the bright side, the cooler-than-normal temperatures in July suggest increased chances of a warm autumn, according to Josh Darr, meteorologist with Chesapeake Energy.

“After a cold July, we’re more likely to have a warm

These corn plants located near Kent in western Stephenson County show the effects of major hail damage that occurred during a severe storm that passed over Northern Illinois on July 24. The storm produced golf ball- to tennis ball-sized hail and 60 to 70 mph winds. The 50 acre field prior to the storm had the potential to yield about 150 bushels per acre. Now it may be a complete loss. (Photo courtesy of Leroy Getz, FarmWeek cropwatcher from Carroll County).

autumn,” Darr said. “That could very critical to the crop as it’s kind of lagging behind normal.

“That’s not to say there’s no freeze risk,” he continued.

“But (historical trends) lean toward a decreased possibility of an early freeze.”

The first freeze typically arrives around Oct. 1 in Northern Illinois, Oct. 15 in Central Illinois, and Nov. 1 in Southern Illinois, Darr added.

New Holland Ag supplying 1,250 tractors to Iraq New Holland Agriculture, the global manufacturer and seller of ag equipment, is supplying an additional 1,250 tractors to the Iraq government.

The first 400 of the 1,250 New Holland tractor kits already have been supplied to an Iraqi plant, and more than 300 units have been delivered to farmers and are operating in the country’s fields. An additional 200 tractor kits are en route to Iraq’s Iskandiriyah assembly plant.

Sufficient parts stocks also have been provided to ensure minimum machine “down” time.

FarmWeek Page 8 Monday, August 3, 2009

RESEARCH

Researchers monitor rainfall for soy rust spores

BY DANIEL GRANT FarmWeek

Researchers currently monitoring the chemistry of rainfall at sites around the country may

not be able to stop soybean rust spores from entering the atmosphere.

But each time it rains, researchers at the Illinois State

Water Survey (ISWS) are showered with vital information such as where rust spores are located and when they arrived on the scene.

“If something is transported in the rain (such as rust spores), we can tell you where it came down and when it came down,” Brenda Riney, a lab technical assistant for the National Atmospheric Deposition Program at the Illinois State Water Sur vey in Champaign, analyzes the chemistr y of a rainfall sample. Researchers the past four years have used rainfall samples to determine exactly where and when soybean rust spores were deposited at specific locations. (Photo by Daniel Grant)

said David Gay, program director for the National Atmospheric Deposition Program (NADP) at the ISWS and the University of Illinois.

NADP has analyzed the chemistry of rainfall samples from around the country for about 30 years and is known informally as the acid rain network. In 2005, it started testing samples from about 80 of its 250 collection sites for the presence of rust.

Overall, NADP each year analyzes the chemistry of about 12,000 to 13,000 rainfall samples collected from around the country. The genetic work to determine the presence of rust then is completed by researchers at the University of Minnesota.

“Since the NADP is used to monitor precipitation chemistry nationwide, it was an ideal platform to study deposition of soybean rust spores,” Gay said.

“If there is a presence of spores in the sample, we can find it.”

And once spores are found, researchers can use that information to track the path of the disease and predict where it may travel in the future.

“We know where the disease is and with atmospheric models we can predict where it’s going to be,” Gay said.

Information about rust is vital to soybean growers so they know when a fungicide application may be warranted to avoid a yield loss.

Soy rust was found in the U.S. about five years ago. Problems with the disease thus far have been confined to the southern U.S., so there has not been a need to spray for rust thus far in Illinois.

The disease has the potential to damage soy plants in Illinois, but rust so far this year has been confirmed in just 31 counties in five Gulf states.

“Drought conditions (in the South) certainly have slowed it down,” said Kevin Black, insect/plant disease technical manager for GROWMARK. “We’re getting to the point (this season) that even if rust blew up from the South, it likely wouldn’t create a great problem for us.”

Information about NADP is available online at {http://nadp.isws.illinois.edu}.

Farmers can track the weekly movement of soy rust online at {www.sbrusa.net}.

USDA/DOE award grants Ag Secretary Tom Vilsack and U.S. Energy Secretary Steven Chu have announced grants totaling nearly $6.3 million for genetics-based research aimed at improved use of plant feedstocks for biofuels production.

The seven awards (none in Illinois) are designed to broaden the nation’s energy portfolio and “decrease our dependence on foreign oil,” an interagency news release stated.

Grants will be awarded to USDA-ARS Northern Plains Area in Lincoln, Neb., $1.183 million; USDA-ARS Western Regional Research Center, Albany, Calif., $1.3 million; University of Georgia, two separate grants of $1.2 million and $705,000; Michigan Technological University, $900,000; University of Florida, $643,000; and University of Nebraska, $390,000.

FarmWeek Page 9 Monday, August 3, 2009

FB IN ACTION

Action Teams elect leaders, seek additional volunteers

LEGISLATOR GETS LOWDOWN

BY DANIEL GRANT FarmWeek

Illinois Farm Bureau Action Teams met this month to elect leaders, discuss new ideas, and prepare for next year.

Dennis Verbeck, a farmer from Henry County, was elected chairman of the Action Coordinating Council for 2010 while Greg Leigh of Fulton County was elected vice chairman.

Volunteers elected to lead individual Action Teams for 2010 are Verbeck, chairman, and Dave Krebel (Monroe County), vice chairman, of the membership team; Keith Mussman (Kankakee County), chairman, and Connie Schneider (McLean County), vice chairman, of the public relations team; Gail Pollard (Winnebago County), chairman, and Pat Koelling (Washington County), vice chairman, of the education team; and Leigh, chairman, and Carrie Titus (Henry County), vice chairman, of the quality of life team.

“Hopefully, we can make a contribution to the organization, help it move forward, and promote the organization,” Verbeck told FarmWeek.

Projects in various stages of work or that recently were completed include a recruitment incentive program that offers IFB members who sign three or more new vot-

Dennis Verbeck

Keith Mussman

ing members $10 and a Case IH toy combine at the Farm Progress Show; a new member website {www.ilfb.org/member} was launched; “Share the Road Safely” fact cards that offer driving tips for motorists and farmers now are available for distribution; and a farm education video “Look, it’s a Watchamajig!” will be available to county Farm Bureaus after a program by the same name produced brochures for interstate rest stops.

“It’s neat to see some of the projects that come out of there,” said Verbeck, who will provide an Action Team update next month to the IFB board. “Over our history, some of the projects have been so successful the (IFB) board decided to carry them on over the years,” he said.

Action Teams currently have about 40 participants.

“We have several openings for the coming year,” Verbeck said. “We meet twice a year (in February and July) and you can choose your team of interest.”

EQUINE WORKSHOP

The second Livingston County Marketing Committee Equine Workshop, held during the 4-H Fair, drew approximately 70 horse owners. Kevin Kline, University of Illinois equine specialist, shown leading a horse toward a trailer, gave a presentation on “The Psychology of Trailer Training and Horse Handling.” The Marketing Committee has begun to provide informational workshops for the horse industry because there are 219,000 horses worth $330 million in Illinois. They consume about 500,000 tons of hay and grain (at a cost of $100 million a year). The workshop may become an annual event. (Photo courtesy of Livingston County Farm Bureau)

Gail Pollard

Greg Leigh

Verbeck urged IFB members to consider volunteering for Action Teams, noting, “Those of us in agriculture probably don’t spend enough time promoting ourselves.

Then negative stories come out and that’s what people remember.”

A proactive approach “lays the foundation to offset some of the criticism,” he added.

Information about Action Teams is available online at {www.ilfb.org} and by clicking on “Programs and Activities” followed by “Committees/Volunteer Groups.”

Rep. Mark Walker (D-Arlington Heights), center, learns what goes into a dairy cow’s diet from Matt McCoy of the McCoy dairy farm near Palestine while Sean Sheerod of the Vita Plus Co. looks on.

Recently adopted by the Crawford County Farm Bureau, Walker last week attended a farm tour in the county.

During his visit, he toured the LincolnLand Agri-Energy ethanol plant in Palestine and visited the Weger family grain farm near Palestine as well as the McCoy operation. Rep. Roger Eddy (R-Hutsonville) attended for part of the day. Issues discussed included animal welfare, cap and trade, and the daily operation and cost of running a farm.

(Photo by Christina Nourie, northeast legislative coordinator for Illinois Farm Bureau)

FarmWeek Page 10 Monday, August 3, 2009

EDUCATION

WIU taps renewables interest with degree program Biofuels, wind policy focus

BY KAY SHIPMAN FarmWeek

Western Illinois University (WIU) is launching a new degree program for students seeking careers in renewable energy.

“We’re blasting off,” William Knox, director of WIU’s honors college, said at a recent wind energy conference in Bloomington.

The renewable energy program is part of the interdisciplinary studies in the honors college; however, the program is open to all students and is not limited to honors students, Knox explained.

Starting this fall, renewable energy students may choose to

focus on biofuels, wind energy, or policy, planning, and management. They will work toward a bachelor’s degree and complete internships as part of the program.

For example, the National Corn-to-Ethanol Research Center in Edwardsville is interested in working with WIU students with a biofuels focus, Knox said.

Students focusing on biofuels technology will study the technological aspects of using plant materials to produce ethanol and fuel. Those studying wind energy will study the technological and business

aspects of wind power facilities.

Students in policy, planning, and management will focus on public policies that affect the development and uses of renewable energy, including laws, contracts, and regulations.

WIU’s goal is to accept 10 students into the new program each year, according to Knox.

Michele Aurand, the program’s academic adviser, may be contacted at 309-298-2586 or by emailing MJ-Aurand@wiu.edu.

Information about the program is available online at {www.wiu.edu/IDST}.

The university also plans to continue working with community colleges whose students want to pursue bachelor’s degrees. “We’ve found

more and more community colleges are offering two-year

degrees and certificates in wind energy,” Knox said.

WIU renames school of agriculture Western Illinois University’s (WIU) department of agriculture was renamed the school of agriculture, effective July 1, according to WIU College of Business and Technology Dean Tom Erekson.

William Bailey, the agriculture department chair, serves as the agriculture school director.

“The name change to school of agriculture better reflects the professional nature of our program and differentiates Western’s program from other programs in the state and reminds our alumni that

WIU values its agriculture unit,” Erekson said.

WIU‘s school of agriculture houses a range of agrelated areas of study, including business, technology, education, animal and soil science, horticulture, natural resources, and urban forestry.

The school also oversees more than 700 acres of farmland and several hundred head of beef, sheep, and swine. It shares research information with the public through field days and livestock programs.

“Designating the agriculture department as the school of agriculture more accurately reflects the breadth and complexity of our extensive programs,” Bailey said.

WIU‘s school of agriculture continues as a unit within the College of Business and Technology.

A new website, featuring a blog, a user-friendly photo gallery, and indepth information about agriculture programs at WIU, will be launched at {www.wiu.edu/ag}.

In addition, as part of the school of agriculture designation, an advisory board comprised of local, state, and national agriculture professionals will be established to further advance the mission and programs of the school.

For information, call 309-2981080 or visit {www.wiu.edu/ag}.

USDA seeks input on standards The Natural Resources Conservation Service (NRCS) is seeking public comment on its conservation practice standards to help improve program delivery. Comments will be accepted until Aug. 11.

Public review of conservation delivery standards will ensure programs in the 2008 farm bill are relevant to local ag, forestry, and natural resource needs, including specialty crops, organic crops, native and managed pollinators, and bioenergy crops.

All comments will be reviewed and considered for incorporation into final rules directing delivery of conservation programs.

Comments may be submitted online, by mail, or by fax to 202-720-5334.

To submit electronically, visit {www.regulations.gov}.

Mail comments to Norman Widman, National Agronomist, USDA, Natural Resources Conservation Service, Conservation Practice Standard Comments, P.O. Box 2890, Washington, D.C., 20013.

FarmWeek Page 11 Monday, August 3, 2009

GOVERNMENT

Hours of service exemption applies to some intrastate drivers

BY KAY SHIPMAN FarmWeek

Transportation hours of service regulations generally apply to drivers of vehicles with a gross vehicle weight or gross vehicle weight rating of more than 10,000 pounds used for business purposes.

Illinois Department of Transportation (IDOT) auditors will check a driver’s maxi-

Orr field day set for Aug. 19 The University of Illinois crop sciences department and U of I Extension will have a field day beginning at 4 p.m.

Wednesday, Aug. 19, at the Orr Agricultural Research and Demonstration Center.

The Center is located in northeastern Pike County on Route 104 about four miles west of the junction with Route 107, or about midway between Jacksonville and Quincy.

Field day topics will address current issues in crop management and crop protection for producers, advisers, agribusiness people, landowners, and others who deal with and are interested in crops. Presentations will be made by U of I specialists.

The first tour will leave from the buildings at 4 p.m., and additional tour groups will leave the headquarters at 20minute intervals, with the last tour leaving at about 4:40.

Each tour will last about 90 minutes.

Dinner will be available after the tour at no cost to those who take the tour.

For more information, contact Mike Vose at 217 2364911.

Orr beef field day slated for Aug. 26 The University of Illinois Orr Beef Research Center near Perry in Pike County will hold its annual field day on Wednesday, Aug. 26, The field day, which will start at 4 p.m., will highlight the Orr Beef Research Center’s research and demonstration programs as well as a number of current topics relevant to the beef cattle industry.

Tours of the center’s calving barn, feedlot, pastures, and research facilities will be conducted. A complimentary evening meal of beef brisket sandwiches will be served.

Pre-registration is not required and there is no registration fee to attend.

For additional information, contact Nathan Post at 217236-4961.

mum hours of service and his or her time record, which is required, during an IDOT compliance review.

Illinois has adopted the federal hours of service regulations and, for the most part, the federal and state regulations are the same. Most farmers are viewed as interstate drivers and are subject to federal hours of service regulations and exemptions.

However, Illinois makes some allowances for intrastate drivers. For example, Illinois grants an exemption from a log-book requirement for intrastate drivers traveling with-

in a 150-air-mile radius, a greater radius than the 100-airmile federal exemption.

In Illinois, intrastate carriers generally are exempt from

hours of service regulations for agricultural moves during the planting and harvest seasons.

In Illinois, a driver is exempt from completing a log book if he or she: • Operates the vehicle within 150 air miles of the normal work-reporting location; • Returns to the workreporting location and is released from work within 12 consecutive hours; • Has at least 10 consecutive hours off duty following 12 hours on duty; • Does not exceed 11 hours of driving time following 10 consecutive hours off duty.

The vehicle owner/operator must maintain accurate time records for six months indicating: • The time the driver reports for and is released from duty; • The total number of hours the driver is on duty; and • The driver’s name and date on each time record.

Remember, intrastate exemptions apply only to the driver’s hours of service. Medical cards, drug and alcohol testing, maintenance records, etc., may still apply. If you have any questions, call the IDOT division of traffic safety at 217785-1181.

FarmWeek Page 12 Monday, August 3, 2009

FROM THE COUNTIES

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ASS-MORGAN — The annual “Member Appreciation Dinner and Meet Your Legislator” program will be at 5:30 p.m. Monday, Aug. 17, at Hamilton’s, Jacksonville.

Call the Farm Bureau office at 217-245-6833 by Monday, Aug. 10, for reservations or more information.

HAMPAIGN — Farm Bureau will sponsor a “Preparing for Tomorrow’s Harvest: AgriEnergy” seminar from 9 a.m. to 4 p.m. Tuesday, Aug. 11, at the Tony Noel Agricultural Center, Parkland College, Champaign. Speakers will include former U.S. Rep. Tom Ewing; director of the Center for Advanced Bioenergy Research Hans Blaschek; Vice President of Biofuels for Monsanto Technology Martha Schlicher; and Illinois state Director of Rural Development Colleen Callahan. Cost is $25, which includes lunch. Call the Farm Bureau office at 217352-5235 or go online at {www.ccfarmbureau.com} for reservations or more information.

OOK — Farm Bureau will sponsor a Night with the Cook County Farm Bureau Saturday, Aug. 15, at the Schaumburg Flyers vs.

Kansas City T-Bones. Cost is $7.50 for reserved seat, $15.08 for adult picnic, and $7.54 per child for picnic. Call the Farm Bureau office at 708-354-3276 or go online at

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{www.cookcfb.org} for more information.

• The annual Family Celebration Picnic will be from 1 to 4 p.m. Saturday, Aug. 22, at the Children’s Farm at the Center, 12700 Southwest Hwy., Palos Park. Lunch will be served at 1:30 p.m. Tickets are $12 for adults, $6 for children 3 to 12, and children 2 and under may eat for free.

ERSEY — The Marketing Committee will sponsor a pork promotion from 4 to 7 p.m. Tuesday at the State Street Farmers’ Market. Jersey County Farm Bureau members will receive 50 cents off a pork chop or burger sandwich by showing their membership card.

NOX — Doug Yoder, Illinois Farm Bureau senior director of marketing and risk management, will be the speaker at an average crop revenue election (ACRE) meeting at 9 a.m. Thursday at the Knox Agri Center. Call the Farm Bureau office at 3422036 for reservations or more information.

IVINGSTON — The Safety Safari for Kids has been rescheduled to 9 a.m. to 2 p.m. Wednesday at the 4-H Park, Pontiac. Call the Farm Bureau office at 815-842-1103 to register or for more information.

EE — A policy development meeting will be at 7:30 p.m. Tuesday at the Farm Bureau office. Members

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may take part in this grassroots process to help shape Farm Bureau policy. Call the Farm Bureau office at 815-857-3531 or e-mail leecfb@comcast.net for more information.

• Farm Bureau will sponsor its 15th annual Farm Visit Day from 10 a.m. to 2 p.m. Saturday. Buses will leave Woodhaven Association to visit the host farm. Tickets are available at Woodhaven’s main office and are required to board the bus. Call Woodhaven’s office at 815-849-5200 or the Farm Bureau office at 815-857-3531 for more information.

ONROE — Members and their families are invited to the ice cream social at 7 p.m. Thursday at the county fairgrounds. A ventriloquist will provide the entertainment.

ONTGOMERY — The Prime Timers will sponsor a bus trip Tuesday to Fairmount Park Race Track, Collinsville. The bus will leave at the following times and locations: 9:35 a.m. downtown park, Nokomis; 10:05 a.m.

Farm Bureau office; and 10:20 a.m. former Kroger parking lot, Litchfield.

• Kevin Rund, Illinois Farm Bureau senior director of local government, and Paul Hentze, Illinois State Police District 18, will present an “On the Road” seminar at 7 p.m. Wednesday at the M&M Service Co. fertilizer plant, Litchfield. Topics will

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include U.S. Department of Transportation numbers, commercial driver’s license requirements, and medical cards. The program is sponsored by Macoupin and Montgomery County Farm Bureaus and M&M Service Co. Call the Farm Bureau office for more information.

OCK ISLAND — A Rules of the Road seminar will be at 7 p.m. Tuesday, Aug. 11, at the Farm Bureau office. Kevin Rund, Illinois Farm Bureau senior director of local government, and Joey Delarosa, Illinois State Police commercial vehicle officer, will be the speakers. Call the Farm Bureau office at 309736-7432 for reservations or more information.

• The Rock Island County Farm Bureau Foundation golf outing will be at 8 a.m. Friday, Aug. 14, at the Highland Springs Golf Course, Rock Island. Cost is $60 or $290 for a foursome plus a hole sponsorship. Call the Farm Bureau office for more information.

• The annual meeting will begin with dinner at 5:30 p.m.

Thursday, Sept. 3, at the Milan Community Center. A Viewpoint meeting will be held with U.S. Rep. Phil Hare (D-Rock Island), Jim Bohnsack, county board chairman, and local Farm Bureau directors attending.

ARREN-HENDERSON — A farm safety planning meeting will be at 10 a.m. Wednesday at the Farm Bureau office. A farm safety day on Sept. 30 for fifth grade students and on Oct. 1 for seventh grade students will be planned.

• Farm Bureau will sponsor an informational meeting on average crop revenue election (ACRE) at 1 p.m. Thursday at the Farm Bureau office. Doug Yoder, Illinois Farm Bureau, will be the speaker. Mark Phillipson, Warren County Farm Service Agency, and Cindy Bridgford, Henderson County Farm Service Agency, also will attend. Call the Farm Bureau office at 309-734-9401 for more information.

• Farm Bureau and Wyffels Hybrids will sponsor a marketing and crop report breakfast meeting at 7 a.m. Wednesday, Aug. 12, at the Farm Bureau office. Call the Farm Bureau office at 309-734-9401 for reservations or more information.

• Farm Bureau and Country Financial will sponsor an educational long-term care insurance seminar at 2:30 p.m.

Thursday, Aug. 13, at the Farm Bureau office. Call the Farm Bureau office at 309-734-9403 for reservations or more information.

• Farm Bureau will sponsor a program at 6 p.m. Thursday,

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Aug. 13, at the Farm Bureau office on how to plan financially for a family with special needs. Rick Morgan, an attorney, will discuss special needs trusts. Call the Farm Bureau office at 309-734-9403 by Monday, Aug. 10, for reservations or more information.

AYNE — Wayne and Edwards County Farm Bureaus and the Farm Service Agency will sponsor an average crop revenue election (ACRE) update meeting at 7 p.m. Monday (today) at the Community of Christ Church, Fairfield. Doug Yoder, Illinois Farm Bureau senior director of marketing and risk management, will be the speaker. Call the Farm Bureau office at 842-3342 for reservations or more information.

• Farm Bureau will sponsor its annual appreciation dinner from 5 to 7 p.m. Friday at the Cumberland Presbyterian Church, Fairfield. Tickets are $2, but children 12 and under may eat for free. Take-outs are available. A silent auction will benefit the Wayne County Ag in the Classroom program.

Donations for the auction will be accepted. Purchase tickets at the Farm Bureau office.

• The first annual Wayne County Antique Tractor Drive will be on Labor Day, Sept. 7.

The event will begin and end at Grainergy Farms, north of Geff. Drivers may register by calling the Farm Bureau office or by stopping by the office.

HITE — Farm Bureau will sponsor its annual appreciation lunch from 11 a.m. to 1 p.m. Wednesday, Aug. 12, at the Floral Hall, White County Fairgrounds.

Call the Farm Bureau office at 618-382-8512 by Wednesday for reservations or more information.

• The Young Leader Committee will sponsor a pedal pull at 3 p.m. Saturday at the Floral Hall at the county fairgrounds.

Cost is $1. First- and secondplace trophies will be awarded in each class. Consult the fair book for rules or call 618-3828512 for more information.

HITESIDE — Farm Bureau will host an antique tractor drive Monday, Aug. 17. The ride leaves the county fairgrounds at 8 a.m. and travels to Coleta and returns through MorrisonRockwood State Park. Registration is $35 per tractor. All proceeds will benefit the county’s Ag in the Classroom program.

Deadline to register is Friday.

Call the Farm Bureau office at 815-772-2165 for a registration form or more information.

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“From the counties” items are submitted by county Farm Bureau managers. If you have an event or activity open to all members, contact your county manager.

FarmWeek Page 13 Monday, August 3, 2009

GROWMARK

Energy field spawns GROWMARK growth

BY HEATHER MILLER

GROWMARK today is one of the largest agriculture cooperatives in North America with expertise in seed, agronomic solutions, facility planning, and logistics. The root of the cooperative lies in the energy field, however.

“The FS System began in the 1920s to provide a reliable fuel supply for farmers, “ said Mark Dehner, GROWMARK marketing manager of refined and renewable fuels.

“Over the years, GROWMARK has evolved into bulk fuel sales, lubricants, propane, and biofuels, as well as our FAST STOP brand in the retail sector.”

Strong member cooperatives and an exceptional line of proprietary products make the difference in the energy business.

“FS members have the most knowledgeable sales force in the industry and GROWMARK has its own line of products like Dieselex Gold and SURE-FLO, which perform exceptionally well and create value for the user. That

GROWMARK a biofuels leader In the late ’70s, GROWMARK was one of the first companies to market ethanol.

“We became involved in renewable fuels for two reasons,” said Mark Dehner, marketing manager of refined and renewable fuels.

“The first was to create an added value for our customers’ crops. The second was to lessen our dependence on foreign oil and create cleaner emissions. To our organization, it seemed like the right thing to do.”

Naturally then, when the American and Illinois Soybean Associations approached GROWMARK in 1994 about participating in field trials of biodiesel, the organization was quickly on board.

FS member companies tested the new fuel and after a successful trial period, GROWMARK began marketing biodiesel in 2000.

In nine years, sales have increased dramatically, to 27 million gallons of biodiesel last year. GROWMARK now even holds partial ownership in a biodiesel plant in Mexico, Mo. Locally owned FAST STOPS also are making an impact on the industry, Dehner said, adding that the FS member cooperative retail outlets are leaders in E85 sales. — Heather Miller

Fourth of a series creates loyalty among our customers,” Dehner said.

The GROWMARK energy division also prides itself on being forward-thinking in terms of both new product development and price risk management. “Price risk management gives us the ability to run forward-pricing contracts,” said John Cripe, GROWMARK energy risk

manager. “Our fixed-price programs on diesel, gasoline, and propane add a lot of marketing flexibility and in past bull market years they have helped save end users a lot of money.”

Chris Salrin, propane product manager, credits risk management, along with product reliability, with much of the growth in the propane industry. Five years ago, GROWMARK and its member cooperatives marketed 200 million gallons of propane; this year, that number increased to 280 million gallons.

“GROWMARK is a company people know they can trust. Our propane supply is reliable and our members

cooperatives are experts in their markets,” Salrin said.

Another feature that adds strength to GROWMARK is its breadth of growth.

GROWMARK owns a portion of the National Cooperative Refinery Association in McPherson, Kan., which serves as a key supplier of refined fuels and propane.

“Ten years ago, GROWMARK began marketing refined fuels to independent gas stations, truck stops, and wholesale distributors in states west of FS core members in order to expand GROWMARK’s business,” said Brendy Lee, west manager of refined and renewable fuels product.

GROWMARK also recently acquired a refined fuels terminal near Petersburg, Ill., to solidify its supply of fuels.

Other energy acquisitions include the assets of McCollister and Co., Council Bluffs, Iowa, a manufacturer of heavy-duty lubricants.

“GROWMARK energy is constantly looking at ways we can expand and complement the efforts of our members by growing our own business in areas where we haven’t been before,” Salrin concluded.

Heather Miller is a GROWMARK corporate communications Intern . Her e-mail address is hmiller@grow-mark.com.

FarmWeek Page 14 Monday, August 3, 2009

PROFITABILITY

Look for propane prices to move higher

BY CHRIS SALRIN

“May you live in interesting times.” These oft-referenced words, at face value a blessing, are actually a curse. Their implication is that you will experience much upheaval instead of “uninteresting times” marked by Chris Salrin peace and tranquility.

The past year has had its share of interesting times, and the future undoubtedly will offer its own share of surprises. To bring some “tranquili-

ty” in the months ahead, following is a general overview of the current propane market and what the future may hold: Currently, U.S. propane stocks total 64.4 million barrels, 30 percent more than the five-year average. Regionally, Midwest stocks are 30 percent higher than average levels with the Gulf Coast 35 percent above historical levels.

New supply that came online in the past 12 months has served to cushion Midwest inventories, while the Gulf Coast continues to work through the excess inventory from winter as petrochemical demand waned.

In fact, because of the sup-

ply situation, propane’s value relative to crude has been at historically low levels for the past three months.

Interestingly, as the propane market works through the supply/demand imbalance during the coming months, propane’s value to crude should strengthen and return to “normal” levels.

Even if crude prices remain unchanged, propane prices could firm more than 50 percent as the propane/crude relationship returns to equilibrium.

Granted, there is a lot of inventory to work through, so prices may not increase a full 50 percent from current levels,

but again history suggests current prices are undervalued.

When a market is undervalued, it attracts buyers.

Additionally, crude prices are in carry — that is, prices for future months are higher than current prices. What this tells us is that there is a “premium” associated with having crude available in the future.

Propane prices are likely to firm even if crude prices remain unchanged, and yet the market expects crude values to be higher in the months ahead.

Despite record propane inventories for this time of year, propane prices likely will

move higher in the months to come as propane’s value relative to crude returns to more historical levels and as crude values trend higher.

In addition, rebounding energy demand because of lower prices and a weaker U.S. dollar also will likely contribute to stronger pricing.

If you haven’t already, be sure to talk with your local FS cooperative for its contracting and even-payment programs and enjoy some “peace of mind.”

Chris Salrin is GROWMARK’s propane product manager. His e-mail address is csalrin@growmark.com.

Analyst: Fertilizer could be ‘much cheaper’ than last year

BY DANIEL GRANT FarmWeek

Fertilizer prices this summer and fall could be “much cheaper” than last year despite a recent uptick in the price of anhydrous ammonia, according to Bryce Knorr, Farm Futures senior editor and commodity trading adviser.

The price of ammonia at the Gulf increased late last month by about $75 per ton.

Knorr believes recent price increases of fertilizer — urea prices at the Gulf last week increased by about $10 per ton while the cost of diammonium phosphate (DAP) jumped $5 per ton — are a seasonal function of the market and not an indication of another massive price run-up similar to last year.

volatility this year as last year,” Knorr said. “But farmers still are probably going to have a less informal relationship with suppliers than in the past.”

Knorr attributed the recent increases for ammonia, urea, and DAP to demand returning to the market.

Milk price remains unchanged

“Fertilizer is going to be much cheaper (this year) by about half or more,” Knorr told FarmWeek.

“Some people (last year)

M A R K Feeder E T pigFA CTS prices reported to USDA* Weight 10 lbs.

40 lbs.

50 lbs.

Receipts

Range Per Head Weighted Ave. Price $14.00-$32.86 $26.68 $25.00-$26.00 $25.68 n/a n/a This Week Last Week 25,895 20,779 *Eastern Corn Belt prices picked up at seller’s farm

Eastern Corn Belt direct hogs (plant delivered) Carcass Live

(Prices $ per hundredweight) This week Prev. week $52.40 $57.01 $38.78 $42.19

Change -4.61 -3.41

USDA five-state area slaughter cattle price (Thursday’s price) Steers Heifers

This week 82.00 81.50

Prv. week 83.04 82.47

“The (fertilizer) market tends to slow between planting seasons in the northern and southern hemispheres,” he said.

“Now we’re seeing people start to book orders” which may indicate prices have bottomed for the season.

Change -1.04 -0.97

Lamb prices Confirmed lamb and sheep sales This week 679 Last week 755 Last year 963 Wooled Slaughter Lambs: Choice and Prime 2-3: 90-110 lbs, $98; 110-130 lbs., $91.25-$92.50. Good and Choice 1-2: 60-90 lbs., $105.

Slaughter Ewes: Utility and Good 1-3: $25-$29. Cull and Utility 1-2: $25.

Export inspections (Million bushels)

Week ending Soybeans Wheat 07-23-09 8.1 10.7 07-16-09 13.7 14.4 Last year 14.4 21.6 Season total 1180.5 100.8 Previous season total 1069.0 166.7 USDA projected total 1210 980 Crop marketing year began June 1 for wheat and Sept. 1 for corn and soybeans.

Corn 52.2 39.4 43.5 1550.1 2142.6 1700

got stuck paying $1,200 per ton (for anhydrous ammonia) if they were forced to buy at the top of the market.”

Knorr believes farmers this summer and fall may purchase anhydrous ammonia for anywhere from $400 to $500 per ton.

Offers late last month for fall delivery in Illinois hovered in the mid-$400 range, he reported.

Natural gas, the primary feedstock of nitrogen-based fertilizers, remains cheap compared to past prices, according to Knorr.

And natural gas prices for 2009 and 2010 are projected to average significantly less than last year (see graphic), according to a recent forecast by the Energy Information Administration.

Knorr recommended farmers begin talking to fertilizer dealers if they haven’t already to find out what’s available and to seek price information. A significant number of dealers may require farmers to pre-pay for fertilizer or provide a large down payment to secure inventory.

“I don’t expect the same

The Class III price for milk adjusted to 3.5 percent butterfat for the month of July was $9.97, unchanged from the previous month.

The hot weather that has gripped the West, one of the major dairy production areas of the country, certainly will have an impact on milk production.

As this shortfall takes effect, and as herds are retired through the producer self-help program, milk prices should start to respond to tighter supplies.

We also are nearing the time of the year when demand starts to pick up as the school year begins.

FarmWeek Page 15 Monday, August 3, 2009

PROFITABILITY Corn Strategy

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

August report much anticipated The August crop report is always an anxiously awaited report, maybe more so this year because of the late planting and the unusually mild growing season.

Analysts and traders have gravitated to the idea that the good crop ratings and mild weather imply excellent yield potential. More than a few people have talked about the possibility of seeing record yields, corn yields in particular.

Just two weeks ago, University of Illinois economists indicated their model based on temperature and precipitation projected record yield potential for corn and soybeans. Iowa State University climatologist Elwynn Taylor has compared this growing season to 1992 and 2004.

Both were mild and both ended with new record yields.

But both years were characterized by a faster-than-nor-

Basis charts

mal planting pace, especially 2004.

We have looked at growing seasons since 1970, and have found three years in which the crop was both planted late and July was generally cooler than normal — 1984, 1996, and 2008.

We found the final corn yield during those years was at, or slightly above, the trend yield we use. That would infer potential for a 157- to 158bushel corn yield, which would not set a record.

Soybean yields in those years tended to be disappointing. The soybean yield in 1996 was near trend, but both 1984’s and 2008’s yield, respectively, fell 9 percent and 8 percent below trend. That would imply a yield closer to 40 bushels than the 42.6-bushel number estimated by USDA. The August crop report mostly is a population count.

There’s not a lot of other data for USDA enumerators to collect at this time, although they do look at the node count on soybeans.

Knowing their procedure for estimating the corn yield in the August report, we are inclined to think they will project a national corn yield near 157 bushels per acre. USDA has been using 153.4 bushels in its supply/demand forecasts.

It’s more difficult to determine what USDA might use for a soybean yield. However, we have heard that node counts appear to be higher this year.

That leads us to believe the forecast may be in the 41- to 41.5-bushel-yield range, potentially matching the previous high for an August forecast. That’s still below the 42.6 “model” number USDA has been using.

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Cents per bu.

✓2008 crop: Last week’s market action confirmed better pricing opportunities should lie ahead to make needed old-crop sales. If you haven’t locked in the basis, wait for days of price weakness to consider doing so.

Plan to make sales if December futures rally to $3.50 or higher. If storage is available, it may pay to carry some inventory into next year, but it may be winter before the market will more than cover the cost. ✓2009 crop: Recent action suggests the short-term price trend has turned up. If December gets above $3.50, there’s potential up to $3.75.

Hold off new-crop sales for now, but we may add a small sale and/or recommend needed harvest sales on this rebound. Check the Cash Strategist Hotline frequently. ❖Fundamentals: Weather conditions throughout the Midwest remain non-threatening, with below-normal temperatures and adequate moisture levels. However, development is lagging, leaving the crop more at risk to fall weather problems.

Soybean Strategy ✓2008 crop: Old-crop soybeans still face the problem of flat prices and basis levels being premium to newcrop values. Last week triggered catch-up sales. If you still have old crop, use rallies above $9.75 on November futures to make sales. ✓2009 crop: Last week’s surge indicated we should see somewhat better selling opportunities over the next few weeks. November’s push to $9.75 offered an opportunity to make catch-up sales or harvest delivery sales. Keep close contact with advice through the Cash Strategist Hotline, as we may recommend an additional sale if prices move back near the June highs. ❖Fundamentals: The Chinese government not only failed to sell any inventories, but Chinese crushers aggressively stepped up the pace of new-crop U.S. soybean purchases. Adding last Thursday’s 65-million-bushel sale to Chi-

na, our new-crop sales could total 340 million bushels. That eclipses last year’s 241 million bushel record, which in itself was sharply higher than normal.

Wheat Strategy ✓2009 crop: Prices took out the previous $5.12 low on the September contract, but there was no downside followthrough. If the Chicago September contract would move back above the last highs at $5.27 and $5.28, it would enhance the odds that a shortterm low has been seen. Continue to hold off additional

sales. Better pricing opportunities should come in late summer/early fall. If your sales lag recommendations, use rallies near $5.50 to get caught up. ❖Fundamentals: The fundamental structure of the wheat complex changes little.

However, weekly export sales provided a glimmer of hope.

Latest week’s sales, 575,000 metric tons (20.74 million bushels), were above trade expectations. The large size of Egypt’s purchase last week adds to signs that buyers see present prices offering good value.

FarmWeek Page 16 Monday, August 3, 2009

PERSPECTIVES

Climate change law could cost you $1,000 or more per year The main purpose of the House-approved H.R. 2454, the “American Clean Energy and Security Act of 2009,” is to put in place a system by which carbon dioxide (CO2) emissions ultimately are reduced.

The Environmental Protection Agency (EPA) has stated that CO2 is a dangerous gas which is linked to global warming.

The unfortunate news is that CO2 touches all our lives in some way such as mowing your yard, taking that car or motorcycle trip, the fizz in your soda, exhaling when you breath, and, of course, in the production of goods and services (electricity being one).

W. SCOTT When SIPC (Southern Illinois RAMSEY Power Cooperative) ran the numbers for our emissions, we estimated an impact to the homeowners (many of whom are farmers) in our region of $240-$1,300 per year per home.

Moreover, if the bill moves forward as is through the Senate and is signed by the president, it will leave open the potential for market speculation. If CO2 emission allowances jump in price, utility bills could jump to several thousand dollars per year for each homeowner.

The costs from SIPC affect a population of nearly 200,000 people in our region. An electric cooperative is owned by each member (the customer) and it is not in business to make a profit; therefore, whatever it costs to produce and transmit the power to your home is all that a cooperative charges.

But each time SIPC is impacted with a cost increase, that increase must be passed on to the member/customer. This would include the new legislation, if it becomes law.

I thought it was time to speak out on the potential impacts to each person who uses

electricity in their daily lives.

Illinois is ranked No. 3 in CO2 emissions for every kilowatt of electricity produced. Only Kentucky (No. 1) and Minnesota (No. 2) rank higher.

The reason for the high rankings is that we get most of our energy from coal. About 70 percent of the energy in the Midwest is produced from coalfired generation.

SIPC produces most of its generation from coalfired sources with natural gas and hydro rounding out the final numbers.

The House bill would allow trading (buying and selling) for a portion of the total CO2 allowances needed to generate electricity. The other portion of the CO2 allowances is being given out at no charge to electric utilities; however, as time passes, those free allowances will disappear.

The reason for the reduction in free allowances through time is that the bill entices electric utilities to reduce their CO2 emissions as each year passes.

SIPC has a concern for each concept that is listed above. First, trading of allowances introduces speculation by traders and creates more volatility in allowance pricing.

Second, there are no commercially available, proven, cost-effective technologies we can purchase to install on our plants to reduce CO2.

If H.R. 2454 becomes law, prices for transporting goods and services also will increase as it affects transportation fuels. All coal and supplies to SIPC are delivered by truck.

The numbers in H.R. 2454 will change as it makes its way through the U.S. Senate; however, I wanted the people of Southern Illinois to get some concept of the costs we are looking at if this bill becomes law as is.

SIPC believes that more time should be given for research and development to find a lower-cost technology to keep everyone’s electric bill affordable.

Moreover, SIPC really needs more time to develop renewable resources beyond what it currently has.

With H.R. 2454, the start date for reducing CO2 emissions is Jan. 1, 2012; however, utilities would need to begin making decisions on how to meet any new law as soon as it passed.

It is highly unlikely that most utilities starting today could have a new hydro dam, wind farm, or biomass plant permitted and in operation by 2012.

In summary, if H.R. 2454 becomes law, the people of Southern Illinois (and in many Midwestern states), will see sizable increases on their electric bill.

For cooperative members and municipal customers in our region, those costs could range from $240 to $1,300 per year as a minimum.

SIPC along with the utility industry needs more time to develop the technology to cost-effectively capture and store CO2, and more time to develop additional renewable resources to help offset the CO2 emissions is needed.

SIPC would like a cap (safety valve) put on the allowance price so that market speculation and volatility do not create unbearable price increases to electricity prices.

The best solution to avoid market volatility is for the government to issue all allowances needed for SIPC’s emissions and assist in helping find a technology solution to reduce CO2. As the technology could be affordably implemented, those free allowance allocations could be reduced.

I would encourage each reader to make his or her voice heard by contacting our U.S. senators as bill H.R. 2454 moves to the U.S. Senate for debate.

Tell them your concerns and let them know you are watching this proposal closely.

W. Scott Ramsey is president and general manager of Southern Illinois Power Cooperative in Marion. His e-mail address is sramsey@sipower.org.

Social media bridges gap between consumers and producers Billions of people turn to the Internet daily searching for access to instant information. On Google alone, there are 31 billion searches every month. We live in exponential times. With radio, it took 38 years to reach a market audience of 50 million; with Facebook, it took a mere two years.

Social media is sweeping the nation as well as the agricultural community.

According to a recent American Farm Bureau Federation survey of young ANGELA HOFFMAN farmers and ranchers, among the 92 percent of young guest columnist (aged 18-35) farmers and ranchers who use computers, 46 percent regularly use some form of social media.

The growing discovery of Web-based tools, such as Facebook and Twitter, is not only changing the way we communicate with one another, but also is shaping the way people form opinions, ultimately driving consumer preferences.

Likewise, more and more farmers and ranchers are using social media to build bridges of understanding with consumers.

While a number of agriculturists are using social media to connect with likeminded individuals, many are engaging in conversations with others who hold different opinions but who hunger for information from “real” farmers. This presence is vital as activist groups also use social media to plant seeds of doubt about modern agricultural practices.

Food safety is one topic fostering all types of conversations in social media circles. There are numerous forums, blogs, Twitter messages, and Facebook pages in the cyber world about food and how it is produced.

All too often, these platforms are one-sided and negative. But therein rests an opportunity for positive engagement.

Engaging and interacting with critics and consumers can be challenging and uncomfortable, but in our convenience-driven society, if the farmer’s side of the story goes untold in social media circles, the doubters are not going to take the time to dig for the facts.

That is one big reason why using social media to join the conversation has become more of a business responsibility than a social luxury.

By embracing today’s communication tools and conveying authentic, thoughtful messages about all the values-based activities that go into modern food production, farmers and ranchers are making a difference.

A farmer can send out a simple message like, “It’s a hot one today! Headed out to check the animals.”

The value of that kind of Twitter or Facebook message cannot be quantified, but it’s the type of reassurance, accountability, and responsiveness consumers are seeking and expect.

Angela Hoffman, an Indiana native and graduate of Purdue University, is a public relations intern at the American Farm Bureau Federation.

‘You’re biting the hand that seeds you.’